Safeguarding REDD+ finance: ensuring transparent and accountable international financial flows

Safeguarding REDD+ finance: ensuring transparent and accountable international financial flows

Review of existing REDD+ and non-REDD+ funds, and best practice for future REDD+ finance

Funding forest protection in developing countries poses numerous financial risks, from inefficient allocation through to mismanagement of funds, misappropriation and corruption; detailed measures will be needed to ensure effective, transparent and accountable financial flows if greenhouse gas emissions from forest loss are to be reduced. This report by Global Witness sets out to review existing REDD+ and non-REDD+ funds (including the Congo Basin Forest Fund, Amazon Fund and the Global Fund to Fight AIDS, Tuberculosis and Malaria) and identify best practice lessons for future REDD+ finance. These include the following.

  • A clear set of minimum fiduciary standards, such as those promoted by the GEF, are applied across all implementing agencies involved in REDD+ financial flows. 
  • Financial accounts, donor contributions and expenditures are publicly available and up-to-date. 
  • Meetings to govern REDD+ funds are open to observers and the general public, key documents are made available beforehand and the fund should also hold regular sessions with civil society organisations, including representatives of forest communities, to maintain an open and continuous dialogue. 
  • There is a balance of power between donor and recipient countries in the decision-making process to disburse funds, with representation from civil society organisations, indigenous peoples and local communities. 
  • Allowing sub-national and local entities direct access to funds (bypassing national governments), when used appropriately and with stringent financial safeguards, is an effective way for REDD+ financial flows to reach project-level activities and reduce risks of misallocation at national level. 
  • Keeping the number of intermediaries between the source of money and its expenditure to a minimum avoids unnecessary transaction costs. 
  • Payment in tranches dependent on performance ensures greater effectiveness of disbursed funding. 
  • The presence of an official independent investigative body, such as the Office of the Inspector General that oversees the Global Fund to Fight AIDS, Tuberculosis and Malaria, provides clear oversight over financial management and deals with allegations of corrupt practices. 
  • Predictable funding arrangements over specified timeframes will allow REDD+ recipient countries to prepare their activities with greater certainty and purpose.

Based on these lessons learned, the report provides a number of detailed recommendations to improve transparency on commitments, disbursements and decision-making, as well as improving accountability and efficiency in general. These include the following.

  • Developing a standardised mandatory reporting template for REDD+ donor countries for amounts pledged, programmed and disbursed.
  • Key documents should be made available online before meetings and reasons for decisions taken should be published within specified time-frames.
  • To avoid conflicts of interest, private sector contributors to REDD+ funds should not be involved in the disbursement decision-making process; local and indigenous people should be included in both the decision-making and implentation process; and overall responsibility for decision-making and financial control should rest with a single board or committee.
  • Regularly review performance across comparable funds to identify best practice in organisational structure, processes and safeguards.
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