FAO LAUNCHES SPECIAL FUND FOR EMERGENCY AND

UNCLAS ROME 002298 SIPDIS USAID FOR AA/EGAT SIMMONS, AA/DCHA WINTER, OFDA FOR HALMRAST-SANCHEZ STATE FOR IO/FO, IO/EDA BEHREND AND KOTOK; STATE ALSO FOR E, EB, OES USDA/FAS FOR REICH, HUGHES AND CHAMBLISS FROM U.S. MISSION TO THE UN AGENCIES IN ROME E.O. 12958: N/A TAGS: EAID AORC EAGR KUNR ABUD FAO SUBJECT: FAO LAUNCHES SPECIAL FUND FOR EMERGENCY AND REHABILITATION ACTIVITIES, SEEKS DONOR CONTRIBUTIONS REF: (A) ROME 1370, (B) ROME 1372 ¶1. Summary: In April 2004, FAO completed arrangements to establish a Special Fund for Emergency and Rehabilitation Activities. The aim of this Special Fund is to enable FAO to respond rapidly to emergency situations, ensuring ready access to funds at the onset of an emergency, before agreements have been finalized with interested donors. The Special Fund will allow FAO to participate in UN-wide needs assessment mission immediately following a crisis, to establish quickly an emergency coordination unit for agricultural, livestock or fisheries assistance, and to prepare a program framework taking into account causes and effect of the crisis. The Fund will enable immediate deployment of essential logistic equipment, and to advance funding for procurement of inputs after a donor has confirmed a contribution, thereby saving the 4-6 weeks it normally takes for governments to transfer funds. FAO has issued an appeal for contributions to the Special Fund, with a target of $2 million. U.S. Mission Rome views the Fund as an important step in shortening FAO's response time at the onset of emergencies, and recommends that the USG contribute to this mechanism. End summary. ¶2. As reported in reftels, FAO has taken steps to strengthen its emergency operations aimed at protecting and restoring agriculture-based livelihoods and lessening dependence on food aid following crises. A 2002 evaluation recognized the quality of FAO's emergency interventions, but stressed the need to improve the timeliness of its response. (Such operations depend on voluntary contributions from donors that may take weeks or months to negotiate and finalize.) In June 2003 the FAO Council endorsed the proposal to establish a Special Fund as a mechanism to reduce response time. The FAO Secretariat completed arrangements to set up the Special SIPDIS Fund in April 2004. On April 21, U.S. Mission received a letter from Anne Bauer, Director of Emergency Operations and Rehabilitation, outlining the characteristics of this new financial mechanism and soliciting contributions. The text of this letter is reproduced below. Further information on FAO emergency operations is available at www.fao.org/reliefoperations/. TEXT OF FAO LETTER -------------- The Special Fund for Emergency and Rehabilitation Activities: a Rapid Response Mechanism I have the honour to refer to donor funding for FAO's response to emergencies, which covers a wide range of activities aimed at supporting the protection and rehabilitation of agricultural-, livestock- and fisheries- based livelihoods. FAO's emergency response has multiplied tenfold over the last decade, from US$7 million in 1993 to US$70 million in 2002. In part, this upward trend reflects an increase in the number of people affected by natural and human-induced disasters but it is also indicative of the increasing confidence of donors in the relevance and capacity of FAO's relief and early rehabilitation activities. In 2002, FAO conducted an evaluation of "Preparedness for, and effective and sustainable response to, food and agricultural emergencies", which constitutes one of the Strategic Objectives of the Organization. The evaluation recognized the quality of FAO's emergency interventions but highlighted the need to improve the timeliness of its response by various means, including the need for a financial mechanism to ensure ready access to funds at the onset of an emergency. Specifically, the evaluation proposed the establishment of a Special Fund for Emergency and Rehabilitation Activities to enable FAO to respond rapidly to emergency situations, even before agreements had been finalized with interested donors. In June 2003, the Council endorsed the proposal for the establishment of the Special Fund. The Special Fund will enable FAO to participate from the outset in the inter-UN agency needs assessments missions following a crisis, to establish rapidly an emergency coordination unit for agricultural, livestock or fisheries assistance and to prepare a programme framework taking into account the causes and effects of the crisis. Furthermore, the Special Fund will allow for immediate deployment of essential logistic equipment and, as soon as a donor has confirmed a contribution in writing, to advance funding for procurement of inputs rquired to protect or restart agricultural production, thereby saving the four to six weeks it normally takes to transfer funds to FAO's bank account. Procedures have been established to ensure appropriate financial monitoring and reporting to donors. Contributions to the Special Fund will be credited to the Fund by the Finance Division. These contributions will enable the Emergency Operations and Rehabilitation Division (TCE) to take immediate action and make advances in accordance with the approved purposes of the Special Fund. The Special Fund includes four types of accounts to record the following: i) receipts of contributions; ii) advances against a donor commitment; iii) refunds from a project to the Special Fund; and iv) amounts that are not refunded where either: (a) funds advanced on the basis of expected donor contributions exceed the total amount received from donors; or (b) funds are used for purposes that are not intended to be financed by a donor. The target set for the Special Fund is US$2 million and will be maintained through replenishment from contributions by donors, by transfer from the TCE Direct Operating Cost Recovery account and from interest earned. Donors contributing to the Special Fund will be provided with an annual report on the use of the Fund. The Special Fund will be included in the Financial Statements of FAO and be subject to the examination and opinion of the External Auditor. The following account has been established for the Special Fund: FAO/UN Trust Fund US Dollar Account Account No. 490650/67/72 Banca Intesa S.p.A. Bank code: ABI 03069, CAB 3356 Swift code: BCIT IT MM700 FAO Branch Via delle Terme di Caracalla 00100 Rome, Italy Contributors are kindly requested to quote on the bank advice "SFERA - OSRO" and to notify the Emergency Operations and Rehabilitation Division of funds deposited. The Special Fund will not be sustainable without participation and support from the donors. I would greatly appreciate therefore any contribution that your Government may provide. I would also be thankful to donors if they would allow the transfer of balances of completed projects to the Special Fund, either automotically or on a case-by- case basis. Your Government's support to the Special Fund will enhance the FAO's capacity to respond rapidly to breaking emergencies and the need for quick-start/quick-impact post-conflict rehabilitation activities that will contribute to the consolidation of peace. U.S. MISSION COMMENT -------------- ¶3. As we have noted in reftels, FAO's emergency assistance has played an important role in crises around the world. In recent years, the USG has found FAO to be an effective partner in numerous emergencies, and we have contributed about $6 million annually to FAO emergency activities. FAO's proposal for a Special Fund for Emergency and Rehabilitation is a sound concept -- one that other UN agencies have already put into practice (e.g., the World Program's Immediate Response Account and the UN Development Program's Central Emergency Reserve Fund). A USG contribution to the FAO Special Fund would help ensure a more rapid response and more timely and effective use of donor resources by the organization in future emergencies. HALL NNNN 2004ROME02298 - Classification: UNCLASSIFIED