• Reduction

Agreement between the Islamic Republic of Iran and the Executive Committee for the phase-out of ODSs

1.   This Agreement represents the understanding of the Islamic Republic of Iran (the “Country”) and the Executive Committee with respect to the complete phase-out of controlled use of the ozone depleting substances set out in Appendix 1-A (the “Substances”) prior to 31 December 2009 in compliance with Protocol schedules.

2.   The Country agrees to phase out the controlled use of the Substances in the refrigeration, foam and solvent sectors in accordance with the annual phase-out targets set out in row 2-A of Appendix 2-A (the “Targets”) and this Agreement. The annual phase-out targets will, at a minimum, correspond to the reduction schedules mandated by the Montreal Protocol. The Country accepts that, by its acceptance of this Agreement and performance by the Executive Committee of its funding obligations described in paragraph 3, it is precluded from applying for or receiving further funding from the Multilateral Fund in respect to the consumption of Substances. Further funding can only be applied for activities that are not directly related to the consumption of Substances such as eligible support measures for the implementation of the plan like the development of strategies, or institutional support.

3.   Subject to compliance with the following paragraphs by the Country with its obligations set out in this Agreement, the Executive Committee agrees in principle to provide the funding set out in row 25 of Appendix 2-A (the “Funding”) to the Country. The Executive Committee will, in principle, provide this funding at the Executive Committee meetings specified in Appendix 3 A (the “Funding Disbursement Schedule”).

4.   The Country will meet the consumption limits for each Substance as indicated in rows 2 A and 4 in Appendix 2-A. It will also accept independent verification by the relevant Implementing Agency of achievement of these consumption limits as described in paragraph 9 of this Agreement.

5.   The Executive Committee will not provide the Funding in accordance with the Funding Disbursement Schedule unless the Country satisfies the following conditions at least 30 days prior to the applicable Executive Committee meeting set out in the Funding Disbursement Schedule:

      (a)  that the Country has met the Target for the applicable year;

      (b)  that the meeting of these Targets has been independently verified as described in paragraph 9;

      (c)  that the Country has substantially completed all actions set out in the last Annual Implementation Programme; and

      (d)  that the Country has submitted and received endorsement from the Executive Committee for an annual implementation programme in the form of Appendix 4 A (the “Annual Implementation Programmes”) in respect of the year for which funding is being requested.

6.   The Country will ensure that it conducts accurate monitoring of its activities under this Agreement. The institutions set out in Appendix 5-A (the “Monitoring”) will monitor and report on that monitoring in accordance with the roles and responsibilities set out in Appendix 5-A. This monitoring will also be subject to independent verification as described in paragraph 9.

7.   While the Funding was determined on the basis of estimates of the needs of the Country to carry out its obligations under this Agreement, the Executive Committee agrees that the Country may use the Funding for other purposes that can be demonstrated to facilitate the smoothest possible phase-out, consistent with this Agreement, whether or not that use of funds was contemplated in determining the amount of funding under this Agreement. Any changes in the use of the Funding must, however, be documented in advance in the Country’s Annual Implementation Programme, endorsed by the Executive Committee as described in sub paragraph 5(d) and be subject to independent verification as described in paragraph 9.

8.   Specific attention will be paid to the execution of the activities in the servicing sector, in particular:

      (a)  the Country would use the flexibility available under this Agreement to address specific needs that might arise during project implementation;

      (b)  the recovery and recycling programme for the refrigeration service sector would be implemented in stages so that resources can be diverted to other activities, such as additional training or procurement of service tools, if the proposed results are not achieved, and will be closely monitored in accordance with Appendix 5-A of this Agreement.

9.   The Country agrees to assume overall responsibility for the management and implementation of this Agreement and of all activities undertaken by it or on its behalf to fulfill the obligations under this Agreement. The Government of Germany (the “Lead IA”) has agreed to be the lead implementing agency and the Government of France and UNDP, UNEP, UNIDO (the “Cooperating IAs”) have agreed to be cooperating Implementing Agencies under the lead of the Lead IA in respect of the Country’s activities under this Agreement. The Lead IA will be responsible for carrying out the activities listed in Appendix 6-A including but not limited to independent verification. The country also agrees to periodic evaluations which will be carried out under the monitoring and evaluation work programmes of the Multilateral Fund. The Cooperating IAs will be responsible for carrying out the activities listed in Appendix 6-B. The Executive Committee agrees, in principle, to provide the Lead IA and the Cooperating IAs with the fees set out in rows 8, 12, 15, 18 and 21 of Appendix 2-A.

10.  Should the Country, for any reason, not meet the Targets for the elimination of the Substances or otherwise does not comply with this Agreement, then the Country agrees that it will not be entitled to the Funding in accordance with the Funding Disbursement Schedule. In the discretion of the Executive Committee, Funding will be reinstated according to a revised Funding Disbursement Schedule determined by the Executive Committee after the Country has demonstrated that it has satisfied all of its obligations that were due to be met prior to receipt of the next installment of Funding under the Funding Disbursement Schedule. The Country acknowledges that the Executive Committee may reduce the amount of the Funding by the amounts set out in Appendix 7-A in respect of each ODP tonne of reductions in consumption not achieved in any one year.

11.  The funding components of this Agreement will not be modified on the basis of any future Executive Committee decision that may affect the funding of any other consumption sector projects or any other related activities in the Country.

12.  The Country will comply with any reasonable request of the Executive Committee and the Lead IA to facilitate implementation of this Agreement. In particular, it will provide access to the Lead IA and the Coordinating IAs to information necessary to verify compliance with this Agreement.

13.  All of the agreements set out in this Agreement are undertaken solely within the context of the Montreal Protocol and as specified in this Agreement. All terms used in this Agreement have the meaning ascribed to them in the Protocol unless otherwise defined herein.

Appendices

Appendix 1-A: The Substances

Appendix 2-A: The Targets, and Funding

(*) Estimated consumption figure

(**) Completion of phase-out targets by end of year

Appendix 2-A: The Targets, and Funding (cont.)

Appendix 3-A: Funding Disbursement Schedule

Funding will be submitted for approval at the first meeting of the year of the annual plan.

Appendix 4-A: Format of Annual Implementation Programme

2.   Targets

3.   Industry Action

4.   Technical Assistance

      Proposed Activity:  _____________________________

      Objective:               _____________________________

      Target Group:         _____________________________

      Impact:                   _____________________________

5.   Government Action

6.   Annual Budget

7.   Administrative Fees

Appendix 5-A: Monitoring Institutions and Roles

1.   The National Ozone Unit (herein called NOU) monitors the consumption data of all Substances through agencies, cooperating ministries and the regional offices of the environmental ministry.

2.   Inspections at reconverted companies are foreseen to ensure the non uses of Substances after project completion.

3.   The licensing system will be a tool to monitor and ensure compliance of control measures. It will validated by the use of independent auditors to inspect the use of CFCs through distributors.

4.   The NOU will offer continuity and endorsement of implementation plans through the institutional support over the next years.

5.   After establishment of the implementation and management facility (herein called IMAF) a reporting scheme between IAs and local institutions will be established. The reporting format and requirements will allow transparent and continued verification of the total CFC phase out in the country.

6.   The Government will issue necessary official request to all beneficiaries and distributors in order to enforce proper facilitation and availability of data.

7.   Above communications will be counterchecked by reports of custom authorities.

8.   The information collected from recovery activities will include:

      (a)  number of appliances subjected to refrigerant recovery and type of these appliances at every service workshop;

      (b)  amount of recovered CFC refrigerants sent to the recycling centres;

      (c)  amount of recovered CFC refrigerants received from service workshops at every recycling centre;

      (d)  amount of recycled CFC refrigerants returned (sold) to workshops; and

      (e)  other data relevant for monitoring the scheme (amount of imported CFC refrigerants).

9.   Information on cost of recovery and reclaim activities will be collected annually on random basis.

10.  Information collected from the investment sectors will include:

      (a)  progress and completion of activities;

      (b)  destruction of old CFC equipment where required;

      (c)  total production and use of CFC and later on use of replacements;

      (d)  operational costs and total investments associated with the conversion; and

      (e)  stockpiles of CFCs and their transfer to authorized consumers.

11.  The responsible Implementing Agencies will perform regular monitoring, verification and auditing of the implementation of the Sector activities in line with the established procedures of both the Multilateral Fund and the IA rules.

12.  An annual report will compile relevant information on prices, consumption and completion of projects in such a way that it can serve as template for the annual implementation of the following year.

13.  More detailed information is available in the National Phase Out Plan under the chapters that discuss activities in each sector.

14.  The table below illustrates the distribution of responsibilities and reporting requirements under the National Plan:

Note: IMAF=Implementation Management Facility

Appendix 6-A: Role of the Lead IA

1.   The Lead IA will be responsible for a range of activities to be specified in the project document along the lines of the following:

      (a)  ensuring performance and financial verification in accordance with this Agreement and with its specific internal procedures and requirements as set out in the Country’s phase-out plan;

      (b)  providing verification to the Executive Committee that the Targets have been met and associated annual activities have been completed as indicated in the Annual Implementation Programme;

      (c)  assisting the Country in preparation of the Annual Implementation Programme;

      (d)  ensuring that achievements in previous Annual Implementation Programmes are reflected in future Annual Implementation Programmes;

      (e)  reporting on the implementation of the Annual Implementation Programme commencing with the Annual Implementation Programme for the year 2004 to be prepared and submitted in year 2005;

      (f)  ensuring that appropriate independent technical experts carry out the technical reviews undertaken by the Lead IA;

      (g)  carrying out required supervision missions;

      (h)  ensuring the presence of an operating mechanism to allow effective, transparent implementation of the Annual Implementation Programme and accurate data reporting;

      (i)   verification for the Executive Committee that consumption of the Substances has been eliminated in accordance with the Targets;

      (j)   ensuring that disbursements made to the Country are based on the use of the Indicators; and

      (k)  providing assistance with policy, management and technical support when required.

Appendix 6-B: Role of Cooperating IAs

Subsector Activities and Responsible Agencies

Summary of Agency Shares

Appendix 7-A: Reductions in Funding for Failure to Comply

In accordance with paragraph 10 of the Agreement, the amount of funding provided may be reduced by US $13,180 per ODP tonne of reductions in consumption not achieved in the year.

(UNEP/OzL.Pro/ExCom/41/87, Decisions 41/20 and 41/55, paras. 54 and 91).

(Supporting document: UNEP/OzL.Pro/ExCom/41/87 Annex VI).