INTERGOVERNMENTAL NEGOTIATING COMMITTEE FOR AN
INTERNATIONAL LEGALLY BINDING INSTRUMENT
FOR IMPLEMENTING INTERNATIONAL ACTION ON
CERTAIN PERSISTENT ORGANIC POLLUTANTS

6 March 1998

1.1 The purpose of this document is to suggest an outline for a course of action regarding the development of projects on persistent toxic substances¹ by UNEP for possible funding through the Global Environment Facility during the period 1998 - 2001. It forms the basis for a decision on a strategic work plan for UNEP/GEF activities in this area.

1.2 The suggested outline is based on a preliminary draft discussion document prepared by the GEF Coordination Office and The UNEP Water Branch and comments received on it from UNEP Industry and Environment Office, Chemicals Unit and the regional co-ordination Unit for the Caribbean Environment Programme. In addition, the GEF secretariat has commented on the discussion paper and reviewed the following suggested project ideas and project areas.

1.3 In section 2 of this document some general considerations relating to the GEF eligibility of projects on persistent toxic substances are given as guidance for the development of the project concepts. There are also sections on financial considerations and on the basis for action to be taken into account in the development of the projects.

1.4 In section 5 an outline of a UNEP Project Portfolio on persistent toxic substances is suggested. The project proposals are at various stages of development and have to be further elaborated by responsible units within UNEP before submission, through the GEF Coordination Office, to the GEF Secretariat and eventual approval by the GEF Council. A timetable for submission of project proposals is also suggested.

1.5 As pointed out in the recently concluded study of GEF’s Overall Performance, no project relating to persistent toxic substances has yet been funded, although a project on mercury contamination is in the pipeline (UNDP). The study states that "The absence of any projects on the subject is unfortunate in view of the fact that POP’s have now been recognized as a priority environmental issue by the world community and a global treaty is to be negotiated beginning in 1998." The study recommends that the secretariat and IA’s should make more efforts in exploring opportunities to reduce dependence of POP’s in developing countries.

1.6 UNEP should take a lead in this effort, particularly taking into account the responsibility for the upcoming negotiations on persistent organic pollutants. UNEP’s role would be to assess the environmental problems related to persistent toxic substances, increase the knowledge base and assist the development of and removals of barriers for innovative technology and best management practices through a series of targeted demonstration projects. UNEP activities would facilitate investment related and national capacity building projects in the next phase of activities.

2.1 The GEF Operational Program # 10 states that "the long-term objective of the Contaminant-based Operational program is to develop and implement International Waters projects that demonstrate ways of overcoming barriers to the use of best practices for limiting releases of contaminants causing priority concerns in the International Waters focal area."

2.2 Interventions under this operational program focus on four main components. "One includes a set of limited demonstration projects for addressing land-based activities while others include projects related to contaminants released from ships, persistent toxic substances such as persistent organic pollutants, and targeted regional or global projects useful in setting priorities for possible GEF interventions, meeting the technical needs of projects in this focal area, or distilling lessons learned from experience." Some toxic pollutants that are persistent in nature and could be considered as "global contaminants" because they are transported long distances in ocean currents or through deposition from the atmosphere, are specifically targeted. The operational program identifies heavy metals (e.g. mercury), persistent organic pollutants (e.g. dioxin, PCBs,) and pesticides that can disrupt human endocrine systems or pose human health threats as possible categories of substances to target.

2.3 GEF funds only the incremental costs of projects designed to achieve global environmental benefits. In the context of water, the transboundary nature of the issue or problem is a significant criterion in determining whether or not a particular intervention will be GEF eligible. In many cases the transboundary nature and global benefits of addressing environmental problems related to persistent toxic substances are very uncertain. Until a higher degree of certainty is established, for instance through an overall assessment, the GEF eligibility of many projects could be questioned.

2.4 As the program scope focuses on contaminants rather than a specific water body, there is no requirement that projects within OP 10 should be tied to a particular multi-country collaborative effort, however, the established precedents are strongly biased towards multi-country interventions. Exceptions could be argued in the case of demonstration type projects that provide wider benefit through testing of new technological or practice based solutions to problems related to persistent toxic substances². The GEF emphasis on innovation is an important consideration, therefore introduction of technologies that have been tried and are being widely applied in recipient countries are unlikely to be funded.

2.5 The GEF has adopted a principle of additionality, which means that it will not fund activities that are part of an organization’s or agency’s mandate or regular program. The argument is that the sponsors of resolutions and decisions in intergovernmental fora have a responsibility to fund the resultant activities through the agency concerned³. The GEF does not fund activities that are clearly part of the existing mandate of international agreements since the GEF Council is reluctant to expand the scope of the GEF which is limited to four portfolio areas Climate Change, Biological diversity, International Waters and Ozone.

2.6 In accordance with the GEF desire to provide global environmental benefits, most projects related to persistent toxic substances will need to tackle the source end of the problem rather than the end of pipe fix. Another related factor is the emphasis placed in OP 10 on pollution prevention rather than remediation. However, projects addressing existing temporary sinks of persistent toxic substances, for instance contaminated sediments that pose a threat to ecosystems, could be eligible to demonstrate use of technology for remediation.

2.7 Due to their persistent nature and liability to bioaccumulate some toxic substances pose greater long-term threats to environmental and human health than others do. A clear distinction must be made between contamination and pollution in this regard. It is therefore necessary to demonstrate as far as possible the extent of the threat the substances pose for a project to be approved⁴. In accordance with the precautionary principle, a project dealing with persistent toxic substances, where there is a threat of bioaccumulation to a level in the environment at which they might become pollutants, could be GEF eligible.

2.8 A particular problem arises in regard to addressing the sources of persistent toxic substances since a large proportion of their transboundary impacts are the result of long-range atmospheric transport and may occur in one geographic region at a considerable distance from the source. In addition, the actual source itself may not be well known or understood. Since the GEF focus is on sources this poses a challenge for project design and there is a general need to assess this issue before much headway on addressing persistent toxic substances can be done.

2.9 GEF can address problems to human health related to persistent toxic substances only if the pathway of human uptake is water related or through bioaccumulation in the food chain. As such human health problems occur mainly for workers directly exposed to contamination due to poor work practices and improper handling of chemicals most projects related to human health would be ineligible. However, if the human health problems occur in conjunction with some evidence of environmental threats to water, either ground or surface, then the issue could be addressed through a multi-faceted project involving chemical management and practices in the sector in which the problem occurs⁵.

2.10 Contaminants are considered in the GEF only in the context of water hence projects relating to hazardous waste management and chemical management per se are ineligible. Projects relating to disposal of obsolete stocks for example might be eligible, but only if they pose a significant threat to a transboundary water-body or bodies.

2.11 Projects that are largely based on environmental monitoring or research are unlikely to receive support⁶ and targeted research projects must be clearly directed towards solving specific project or program-related problems and issues to be eligible.

2.12. The approach of the GEF to environmental issues and problems within its mandate is based on a comprehensive approach. Such an approach is normally based on a sound and thorough analysis of a particular issue or problems that pinpoints the causes of the problem and the most effective areas for intervention regardless of whether these are economic, legal, administrative or related to current practices. Persistent toxic substances are treated by various entities within and outside UNEP in a variety of ways, ranging from a consideration of issues relating to safe maritime transportation, handling, storage, disposal etc. Most GEF interventions on these substances will therefore require collaboration and cooperation between various entities.

3.1 During the pilot phase 16% of the GEF appropriations were directed to International Waters with only 7 full projects being approved to a funding level of 115 million US $. Thirty million was invested in a single project alone. In GEF Phase I again only 7 full projects had been approved by July 1997, but twenty five Project Development Facility grants (PDF-B’s) have been approved, representing fiscal commitments of between 3 and 7 million dollars per project over the next two years⁷. The commitments as of July 1997 represent 11% of total GEF disbursements i.e. the ‘share’ of international waters has declined at the expense of Biological diversity and Climate Change.

3.2 Contaminants represent one of four elements of Operational Program 10, which is itself only one of three OP’s drawing from the International Waters budget. Other activities already planned within this element include two demonstration projects relating to the implementation of the Global Programme of Action. Limited funding is available for additional PDF-B activities leading to significant full projects before 2001. An optimistic estimate would be two full projects in Fiscal Year 1999 and two per year thereafter.

3.3 The GEF Council prioritization of activities within this component of OP 10 could, however, result in an increase as the negotiations on the POP’s convention commence and as a result of the recommendations of the GEF Overall Performance Study. In addition, several bilateral donors have expressed their interest to participate in projects dealing with POP’s, so the possibilities for co-financing should be taken into consideration at an early stage of project development. It should also be noted that projects that are not considered eligible for GEF funding might be funded through donors who might find attractive a more concerted UNEP wide approach, that links their activities to others funded by the GEF.

4.1 The OP 10 states that projects within this operational program should help demonstrate ways of overcoming barriers to the adoption of best practices that limit contamination of the International Waters environment. The program scope focuses on contaminants rather than a specific water body. Projects should aim to:

• focus on poorly addressed contaminants;
• utilize demonstrations to overcome barriers to adoption of best practices;
• address waste minimization strategies, and pollution prevention measures;
• foster innovative policies and the use of economic instruments;
• target technical demonstration and capacity-building projects;
• foster private sector involvement to leverage needed investments;
• support activities that help characterize the nature, extent and significance of global contaminants.

A mixture of project elements addressing technical issues, scientific assessment, analysis, capacity building and investments may be needed to adequately meet the objectives for OP 10.

5.1 Building on basic concepts and ideas that have been presented up to this date, five project areas are suggested to be included in a UNEP portfolio. The portfolio planning should, however, be flexible enough to allow for eventual changes in the GEF policy and for urgent and prioritized projects to come through at a later stage.

5.2 The project areas proposed are at various stages of development and all of them have to be further elaborated by responsible units within UNEP as suggested below before submission through the GEF Coordination Office to the GEF Secretariat for eventual approval by the Council. At this stage, the aim should be to develop PDF B proposals for the various projects (where appropriate). A rough indication of a project budget, including the need of co-financing is presented together with a suggested timetable for submission of project proposals to the GEF Secretariat and a date for project completion.

1. Regionally-based Assessment of Persistent Toxic Substances

The current data on the origins, production, use, pathways and deposition of persistent toxic substances in most regions of the world, is deficient. There is little information, particularly in developing countries, on environmental levels and trends, threats and exposure of humans to these substances. To enable policy-makers to evaluate the priorities in addressing these substances, to provide a framework for GEF interventions and to support the negotiations on an international legal agreement on POP’s, it is proposed that a regionally-based assessment be undertaken with a view to issuing a state of the world report.

This assessment would be complimentary and supportive to the GIWA, giving special in-depth consideration to the issue of persistent toxic substances. It should be based on regional assessments. The objectives would be to: (i) demonstrate the transboundary nature of persistent toxic substances; (ii) analyze the major transport mechanisms (iii) identify major sources and production of the concerned substances; (iv) characterize the exposure of humans and the ecological implications; (v) analyze the socio-economic implications of the problems; and (vi) identify alternatives to the use of chemicals and alternative management methods.

Responsibility: UNEP collaborative team. (Lead responsibility: Chemicals Unit, with Water, Atmosphere, Assessment, IE, GPA Secretariat, GESAMP and GIWA-Core Team)

-GEF US $ 2 million

-Co-financing US $ 2 million

-PDF B submission May 1998 (GEF Coordination Office draft TOR for and select consultant)

-Project submission Jan 1999

-Project closure Jan 2000

The use of pesticides in agriculture, particularly in large scale production of export crops, poses a serious threat to both human health and the aquatic environment, and has transboundary effects through the hydrological cycle and atmospheric pathways. The objective of the project would be to demonstrate ways of overcoming barriers to the adoption of better practices and control programs for the use of pesticides.

The project would contain a mix of activities designed to remove barriers to alternative practices, including capacity building with respect to safe handling, storage, and use of chemicals; strengthening of legal frameworks regarding chemical importation, transport, storage and use; economic instruments and a monitoring/enforcement component to ensure compliance with existing regulations.

-GEF US $ 3-5 million

-Co-financing US $ 2-4 million

-PDF B submission April 1998

-Project submission October 1999

-Project closure January 2002

In the process of undertaking the regionally based assessment of persistent toxic substances, information and data gaps will be identified, in particular regarding the levels of the environmental threats, including through bioaccumulation, and the sources of the persistent substances. To improve the knowledge base, there will be a need to gather more precise information of the nature, extent and significance of such environmental threats and sources.

It is therefore proposed that, as a continuation of the regionally based assessment, several targeted projects might be conducted, through the existing Regional Seas Programme. The expected outcome would be an improved understanding of the nature and significance of threats from persistent substances and identification of alternatives for action to mitigate the potential threats to the environment and human health.

Responsibility: Regional Seas Secretariats, in collaboration with UNEP/Water and UNEP/Chemicals

Cost estimate:

-GEF ??

-Co-financing ??

-Project submissions Dec 2000

To achieve a local and more detailed assessment of the production, use and exposure to global contaminants, it is suggested that the proposed Regionally based Assessment is complemented with pilot country studies in various regions of the world. These would be comparable to the country studies that were carried out in the initial phases of work under the Montreal Protocol, the Framework Convention on Climate Change and the Convention on Biological Diversity.

The lessons learned through this pilot project could be used for future assistance to eligible countries in preparing national communications under the POP convention. Countries selected for the pilot studies should have documented use and/or production of chemicals, chemical intensive sectors, or documented environmental and human health problems resulting from chemical exposure. The selected countries should be representative of the different regions of the world and different stages of economic development. The pilot project could be a medium sized project

Responsibility: UNEP/Chemicals in collaboration with UNEP Regional Offices

Cost estimate: (8x100.000)

-GEF US $ 500.000

-Co-financing US $ 300.000

-PDF A October 1999

-Project submission January 2000

-Project closure January 2001

When sources of persistent substances are identified, specific technologies and management practices will be needed to remove them. However, such technologies and practices are not certainly available in the GEF recipient countries, or technical and financial barriers exist to their adoption and application.

The purpose of this project area is to demonstrate through a few targeted demonstration projects how best available technologies and management practices can be determined, adopted and applied. The demonstration projects might include environmentally friendly treatment of polluted bottom sediments, remediation of contaminated sites and groundwater, destruction of unwanted stockpiles of agri chemicals and PCB’s, removal of persistent substances in industrial wastewater, best management practices in different sectors and economic instruments to limit the use of persistent substances.

Responsibility: UNEP/IE, IETC, SBC and relevant UNEP units and external org.

Cost estimate:

-GEF ??

-Co-financing ??

-Project submissions FY 99-01