FC 108/9 - PC 92/INF/4

Finance Committee

Hundred and Eighth Session

Rome, 27 September – 1 October 2004

Utilization of the Special Fund for Emergency and Rehabilitation Activities

Table of Contents

I. Background

1. The FAO Finance Committee, at its 102nd Session in May 2003, agreed to establish a new Special Fund, the Special Fund for Emergency and Rehabilitation Activities (SFERA), with a target funding level of U$2 million, to be provided from the donor community and the Emergency and Rehabilitation Division’s Direct Operating Cost (DOC) Recovery account. The Committee also requested the Secretariat to present in 2004 a first report on the utilization of the SFERA.

2. The reasons for the establishment of SFERA that were explained to the Committee are summarized as follows (see FC 102/14):

3. The SFERA provides FAO with a means of taking initial rapid action and/or complementary action to ensure continuity of follow-up on emergency activities. It enables 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 SFERA allows for immediate deployment of essential logistic transport and equipment and, as soon as a donor has confirmed a contribution in writing, the advance funding for procurement of inputs required to protect or restart agricultural production, thereby saving the four to six weeks it normally takes to transfer funds to FAO’s bank account.

II. Financial Set up

4. The SFERA is operated in compliance with Financial Regulation 6.7, that governs the Director-General’s acceptance of voluntary contributions. The effect of this is that expenditure to be met from the resources of the SFERA should not create financial obligations on the resources of the Regular Programme. This means that expenditure should not be approved unless covered by available funds on hand. The Financial Rules and procedures applicable to the administration of extrabudgetary funds derive from this guiding principle.

5. Procedures have been established to ensure appropriate financial monitoring and reporting to donors. Contributions to the SFERA are credited to the Fund by the Finance Division. These contributions enable FAO to take immediate action and make advances in accordance with the approved purposes of the SFERA. The SFERA includes four types of accounts to record the following:

6. The SFERA is included in the Financial Statements of FAO and is subject to the examination and opinion of the External Auditor. A report on the activities funded by the SFERA is prepared on an annual basis, provided to contributing donors and made available to the Governing Bodies.

III. Utilization of the SFERA

7. Since the presentation to donors in March 2004 on the SFERA and a first call for funds letter sent to potential contributors in April 2004, US$500 000 has been transferred to the SFERA in order to cover the initial response of FAO to two major crises in Colombia and Sudan.


8. The conflict in Greater Darfur in the Sudan, exacerbated by three consecutive years of drought, has resulted in the displacement of more than 1 million persons within the region and the exodus of more than 120 000 persons into neighbouring Chad. Competition between pastoralists and settled farming communities for scarce natural resources, aggravated by the continuing drought, the lack of basic services and weak governance systems with little community participation, have all contributed to intensified inter-tribal conflict since April 2003. The impact of the humanitarian crisis has led to an even greater reliance on the fragile natural environment and thus accelerated its degradation and that of agricultural based livelihoods and food security.

9. In June 2004, during a high-level alert meeting on the Darfur Crisis, the UN Under Secretary General Emergency Relief Coordinator advocated for a rapid involvement of the UN agencies in addressing the humanitarian crisis in Darfur. The UN was strongly encouraged to increase its presence and assistance substantially in order to prevent an exacerbation of the crisis. Pending financial resources from international donors, FAO decided to use the SFERA to strengthen its team on the ground by deploying additional national and international staff and making operational a third emergency suboffice in Darfur. It aimed to deliver assistance and to coordinate and provide technical advice to NGOs and other agencies involved in agricultural assistance.

10. This rapid establishment of additional capacity in the field enabled the Organization to be fully involved in the set-up of the agricultural component of the UN plan. It contributed to the reduction of the potential catastrophic impact of the loss of the 2004 harvest and to the protection of the livelihoods of rural displaced populations. As at mid-July, US$1.69 million has been received from Belgium, Canada, Netherlands, Norway, Sweden, United States of America and UNDP to cover the agricultural component of the appeal and several other donors have communicated their interest in funding emergency and rehabilitation operations in the region.


11. Colombia faces the biggest humanitarian catastrophe of the Western hemisphere with the largest number of killings and humanitarian problems due to an internal conflict lasting 40 years. Colombia is largely a forgotten humanitarian crisis and the situation is deteriorating. Over the past 15 years, the accumulated number of internally displaced persons (IDPs) has reached two million, of which half has been displaced in the last three to four years. In addition, several hundred thousand Colombians have been obliged to move to neighbouring countries. While this humanitarian crisis has been hidden for a long time, the Government of Colombia, the international community and the UN system are now working in close collaboration on the elaboration of a humanitarian plan of action focused on the IDPs. This plan will be launched in September 2004.

12. The SFERA was used to fund the early appointment of an FAO Emergency Coordinator in Colombia in response to the request addressed in February 2004 by the UN Under Secretary General Emergency Relief Coordinator to the UN agencies to reinforce their presence and humanitarian activities related to the problems created by the conflict. The FAO Emergency Coordinator contributed to the formulation of the food production and food safety component of the humanitarian plan of action. He also prepared project proposals and explored potential funding with donors. The early appointment of an Emergency Coordinator enabled FAO to reinforce its presence in the country and contributed significantly to the UN launched process. Some donors have expressed their interest in sustaining the funding of an Emergency Coordination Unit in Colombia and FAO is now expecting to receive US$650 000 to build-up its emergency activities in the country.

IV. Conclusion

13. Over the first three months of its effective functioning in 2004, the SFERA has demonstrated its catalytic function in enabling FAO to play a key role in both sudden and protracted emergency situations. Several donors have reiterated their support to the SFERA. This is most welcome since the SFERA requires continuous donor support to sustain its success.