TWN Info Service on Biodiversity and Traditional Knowledge
7 August 2026
Third World Network

CBD: Developing Countries Call for Review of the Institutional Documents of the Cali Fund

Nairobi, 7 August 2026 (Nithin Ramakrishnan) - More than 70 developing countries have called for the institutional documents of the Cali Fund to be reviewed by Parties to the Convention on Biological Diversity (CBD). These documents include the Memorandum of Understanding (MOU) signed between the UN Multi Partner Trust Fund Office (MPTFO), United Nations Development Partnership (UNDP), United Nations Environmental Programme (UNEP) and the Secretariat of the CBD.

The call was made during the Seventh Meeting of the Subsidiary Body of Implementation (SBI-7), which is taking place in Nairobi between 4th and 12th August 2026.

Egypt, on behalf of the 54 countries in the African Group, and South Africa, on behalf of 20 like-minded megadiverse countries (LMMC) made interventions on the agenda item of digital sequence information on genetic resources (DSI) expressly calling for the review of these documents by Parties. Other countries, including Brazil, India, China, Uganda, Namibia, Democratic Republic of Congo, Malawi, Tanzania and Kenya, also supported the statements and called for better alignment of the CBD multilateral mechanism with the rights of provider countries, indigenous peoples and local communities.

The agenda item follows up on Decision 16/2 that operationalized the multilateral mechanism for the fair and equitable sharing of benefits arising from the use of digital sequence information on genetic resources, including a global fund (named as the Cali Fund).

The countries also reiterated the representative nature of members of the Steering Committee of the multilateral mechanism. They insisted that the members should be able to discuss the matters under consideration with their regions and constituencies, and report back to them, to improve Parties’ oversight on the activities of the Steering Committee.

South Africa, on behalf of the LMMC, stated: “All substantive governance documents,  including memoranda of understanding, Steering Committee terms of reference, and operational arrangements, must be submitted to the COP for review and approval before implementation. Administrative arrangements developed outside of COP oversight risk modifying agreed mandates without authority and overlooking a Party-driven process and. Steering Committee members must serve in a transparent, representative capacity, consulting with and reporting back to their regions. Nomination procedures must be established and applied by the COP.”

The African Group stated:

“First, we reaffirm that the Conference of the Parties is the governing authority of the Multilateral Mechanism, including the Cali Fund. The governance, institutional arrangements

and operational modalities of the Mechanism must remain under the authority and guidance of the Conference of the Parties, in accordance with decision 16/2. Any substantive modification of those arrangements should therefore be considered and approved by the Conference of the Parties.

Second, all governance and institutional documents developed for the operation of the Multilateral Mechanism and the Cali Fund, including memoranda of understanding between MPTFO and UN Agencies, and the documents mentioned [in] its Annexes A to D, terms of reference of Cali Fund, rules of procedure of Steering Committee, operational manuals and comparable arrangements, should be submitted to the Conference of the Parties for review. This is necessary to assess their consistency with decision 16/2 and subsequent decisions of the Conference of the Parties, and to ensure that administrative arrangements do not modify mandates or introduce governance elements that have not been agreed by Parties. In this regard, [the African Group] would like to incorporate an additional agenda item on Cali Fund institutional documents, in particular MOU between MPTFO and UN Agencies and the documents annexed thereto.

Third, the governance structure and representative character of the Steering Committee require greater clarity. The roles of the Chair designated from among Party representatives and the United Nations Co-Chair established for the operational requirements of the Cali Fund should remain consistent with decision 16/2. Members and alternates should be nominated transparently by their respective regions and constituencies, serve in a representative capacity, consult with those they represent and report back throughout their terms. The Steering Committee should also report regularly to the Conference of the Parties on its activities, decisions, financial oversight and recommendations.”

India emphasised that developing countries, particularly mega-biodiverse countries, should have equitable representation in all future work relating to the operationalization of the multilateral mechanism.

MOU treats benefit sharing contributions as donations

The CBD Alliance - the NGO major stakeholder group at the CBD - also urged Parties to review these documents as they deviate from the understanding of Decision 16/2 that operationalizes the Cali Fund. It pointed out that the MOU treats monetary benefit sharing contributions to the Cali Fund as donations, rather than as a mode of discharging obligations arising pursuant to the CBD.

It was also highlighted that the document had no first reading in the Steering Committee of the multilateral mechanism or in any other Party-led processes. Civil society called on Parties to therefore review the MOU and its annexed documents before proceeding with the further negotiations on the implementation of the mechanism.

[The annexed documents in the MOU include Annex A: Terms of Reference (TOR); Annex B: Standard Administrative Arrangement between the Donor and the Administrative Agent; Annex C: Memorandum of Agreement for National Access; and Annex D: Non-UN Organization Framework and Financing Agreements.]

Paragraph 5 of Section I of the MOU reads “The Administrative Agent [MPTFO] will also receive donations from users of digital sequence information on genetic resources [term used to define the private sector partners] through an exchange of letters, (the "Donations") to be used to finance the activities funded through the Fund further to this Memorandum Of Understanding and the Fund's TOR.”

Furthermore, the MOU in its Section II, Paragraph 8, states that “The Participating UN Organizations recognize that each of the donors signing an Administrative Arrangement has reserved the right to discontinue future deposits of its contribution if there is: (i) failure to fulfil any obligations under the Administrative Arrangement including those related to Section VIII; (ii) if there are substantial revisions of the terms of reference (TOR); or (iii) if there are credible allegations of improper use of the funds in accordance with Section VII of this Memorandum of Understanding (Section VIII of the Administrative Arrangement); provided however that before doing so, the Administrative Agent, the Steering Committee and the donor will consult with a view to promptly resolving the matter.”

Given that the MOU considers the benefit sharing contributions from the users of DSI as donations, it is possible for the users of DSI to exercise a new right to discontinue future deposits of its contributions simply if the TOR is revised, or if the conditions of the Administrative Arrangement are not met. There is a view that the users of DSI may not be required to sign the standard Administrative Arrangement, and therefore they cannot have these rights mentioned in Paragraph 8. However, this distinction is not clear from the MOU, and there are other paragraphs which do not differentiate between donors signing the standard Administrative Arrangement, and users of the DSI who are giving the so-called “donations”, for example Section IV on reporting and Section V on monitoring and evaluation.

Section IV requires the MTPFO to provide consolidated reports as well as certified annual and final financial statements to each donor that has contributed to the Fund, as well as to the Steering Committee (para 3 and 5).

Section V of the MOU provides for joint evaluation of the Fund by the Participants, the donors), the Host Government (if applicable) and other partners (Para 2) and additional evaluation by the donors (Para 4).

Paragraph 4 of Section V states that “the Participants recognize that the donors may, separately or jointly with other partners, take the initiative to evaluate or review their cooperation with the Administrative Agent and the Participating UN Organizations under this Memorandum of Understanding, with a view to determining whether results are being or have been achieved and whether contributions have been used for their intended purposes.”

As per the Non-United Nations Organisations (NUNO) Framework Agreement (Annex D to the MOU), the recipient NUNOs, i.e. entities receiving money from the Cali Fund, including indigenous peoples and local communities who are also entitled to direct payments through institutions they identify, are obligated to submit all relevant information requested by the donor during any evaluation that may be initiated, including by providing direct recourse to donors (Section 6.5). The direct recourse would include unrestricted access to any premise, personnel, records, goods and documents as per Section 8.7 of the Agreement. This right of the donor is even extended for five years after expiry and termination of the agreement.

Even if this right is restricted to donors signing the standard Administrative Arrangement, it is excessive, because indigenous peoples and local communities, and their institutions receiving funds from the Cali Fund, will have to undertake this contractual obligation to undergo evaluation, that may be initiated by such donors, and in such cases, provide them unrestricted access to their premises and resources, simply for receiving the money they are entitled to.

As per Section 8.6 of the NUNO Framework Agreement, “Each of the donors whose contributions to the Fund were received by the Administrative Agent at the time of approval of the approved Project(s), in a manner that allows the use of such contributions for the financing of the approved Project(s), shall have direct recourse against the Recipient NUNO for the Recipient NUNO’s failure to comply with any terms and conditions of this Agreement and any funding provided for hereunder. The Recipient NUNO accepts and agrees to such direct recourse and obligation to comply with demands of the donors..”

The Agreement further states that this provision will not be amended without the written consent of donors.

Even worse, the NUNO Framework Agreement in its Section 12.5 makes dispute resolution between NUNOs and donors subject to the laws of the domicile country of the donor. The seat of arbitration between a NUNO and donor has to be in the capital of the domicile country of the donor.

Section 12.5 of the NUNO Framework Agreement states that “The governing law for the dispute between the Recipient NUNO and the donors, including but not limited to, the interpretation of the Recipient NUNO’s obligations under this Agreement, shall be the law of the domicile country of the donor pursuing the recourse. The seat of arbitration shall be the capital of the domicile country of that donor. The procedural rules in the absence of any applicable rule in the UNCITRAL Arbitration Rules, and the applicable law for interpreting this Article 12.5 and Article 12.4 as well as the donors’ rights under Article 8.6, shall be the law of the domicile country of that donor.”

The Annex C document which is the Standard Agreement between the Parties (States) receiving amounts from the Cali Fund is not yet available in the public domain, and is anticipated to have similar clauses.

Above all, the donor-centric character of the MoU is further illustrated in Paragraph 4 of Section VII of the MOU, by its treatment of recovered funds. Where an investigation establishes that funds have been improperly used, the relevant implementing organization is required to make its best efforts to recover the funds. Rather than returning the recovered amounts to the Cali Fund for redistribution in accordance with decisions of the Conference of the Parties (COP), which would be the better option, the MoU permits donors to demand that the recovered funds be refunded to them in proportion to their original contributions.

All of the above are in direct contravention of the rights of the provider States, indigenous peoples and local communities under the CBD and Decision 16/2. The understanding of the Parties at COP16 was clear that the Cali Fund is not a donor-based fund, and is fully under the control and authority of Parties. The monetary benefits shared through the Cali Fund are actually an entitlement of the beneficiaries, i.e. providers of genetic resources, including Parties and indigenous peoples and local communities. Reference to words like “donations” and “donors” were completely avoided in Decision 16/2 to indicate this nature of the Cali Fund.

Paragraph 25 of the Annex to Decision 16/2 requires that the multilateral mechanism must respect the rights of indigenous peoples and local communities, including women and youth within those communities. Benefits received by provider communities are their rights, and the contributors have no right to evaluate how the fund has been utilized or discontinue contributions on account of a change in the utilization of funds. This is different from a situation where, as a matter of courtesy and comity, those who receive benefits inform the monetary contributors about the impact and results of the monetary contributions they have made.

Given that there was no first reading of these agreements at their draft stage in the Steering Committee, it's clear that these are not consistent with paragraph 24 of the Annex to Decision 16/2 which states that the multilateral mechanism and its fund will operate according to the principles of inclusivity, equity and transparency.

MOU may be reviewed at COP17

Contact Group meetings at SBI-7 confirmed that there are differences of opinion between Parties calling for review of the MOU and the Secretariat about the status of the MOU and its contents.

There is growing convergence that the MOU and other documents should be reviewed at COP17.

Sources informed TWN that the Standard Contracts are subject to amendments, if the COP makes that request. There is a view that the standard administrative arrangement and NUNO Framework Agreement can be adapted for the purposes of the Cali Fund in the coming days.

Others have also expressed the view that the MOU itself does not contain the text of these annexed documents, although the MTPFO has standard agreements for Annex B and Annex D. Therefore, the possibility is there for the COP to intervene early and oversee adaptation of these standard documents to the Cali Fund circumstances.

TWN is also further informed that there could be more interpretative nuances in the paragraphs quoted above, which could be resolved through debate, discussion and decisions.+