US embassy cable - 04ROME2298

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 
 
 
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2004ROME02298 - Classification: UNCLASSIFIED