Global Fund - Second Board Meeting
April 22-25, 2002, New York

A Report from the Delegation of NGOs from Developing Countries

Part I

1. INTRODUCTION

The board in New York City met to discuss a wide range of issues
including;
i) First round of proposals and their management,
ii) The overall strategy and mission of the fund,
iii) The appointment of the Fund’s first Executive Director and the
Trustee Agreement that the Fund is undertaking with the World Bank to
manage the Fund’s financial resources.
iv) Monitoring and evaluation tools for tracking proposals in countries
v) Procurement
vi) Partnership strategies for different organizations and entities
including international agencies, local governments, NGOs and national
ministries of health, companies and foundations.
vii) WHO/Administrative Services

This report is primarily concerned with the first two items, which have
the most direct relevance to the global advocacy and in-country
preparations for accessing resources from the Fund. A second part of the
report summarizes topics (iii) – (vii). Interested groups and individuals
can find more information on the website of the Global Fund
(www.globalfundatm.org).

2. EXECUTIVE SUMMARY

i) The Board approved $378 million USD for 40 programs in 31 countries to
be disbursed over two years. In addition, the Board approved $238 million
USD for 18 proposals in 12 countries plus three multi-country proposals
contingent on provision of additional information. These programs add up
to 1.6 billion USD over five years.
The Board decided that funding after the second year would be approved
based on performance during the first two years.

ii) Discussions of the first round of proposals raised many issues: need
for better guidelines encouraging countries to seek funds for provision of
treatment; ways to ensure that country coordinating mechanisms (CCMs) are
in place; conflicting views over the amount and pace of first round
funding disbursements.

iii) The Board began considering its overall strategy and mission;
documents pertaining to these topics were reviewed and tabled for
discussion at a later meeting. The three strategic goals contained in the
draft document are: Maximize lives saved per dollar spent; Increase
productivity per dollar spent; Improve capabilities per dollar spent.

iv) The Mission and Strategy documents raise many issues: ensuring that
cost-effectiveness rationales are reconciled with the urgent need for
antiretroviral and first line TB and malarial therapies; improving needs
assessments in countries to identify gaps in programming such that
prevention, treatment and care are all represented; ensuring that CCMs,
NGOs and other stakeholders access technical assistance to improve the
quality of grants and to broaden their scope to include innovative,
treatment-inclusive programs for all three diseases.

v) The Board decided to expand the Working Group on Technical Review to
include revision of guidelines for proposals by July 2002

3. PROPOSALS AND THEIR MANAGEMENT

3.1 Composition

In March [2002], a Technical Review Panel (TRP) of experts in management
of TB, malaria and HIV was appointed to review the proposals received
following the GFATM’s first call for applications. 322 applications were
received, a number that far exceeded expectations.

Of these 322 applications, nearly half (157) were from Africa. 54 came
from South East Asia, 40 from Europe, 29 from the Americas, 25 from the
Western Pacific, 15 from the Eastern Mediterranean. 2 were multicountry
“global” proposals.

30 percent of the proposals submitted came from Country Coordinating
Mechanisms (CCMs) that had been established by countries in response to
the GFATM request that all proposals come from CCMs which included
meaningful participation from NGOs and, civil society as well as
government. 45 percent of proposals came from NGOs.

Of the 322 proposals received, 145 (45%) were referred from the
Secretariat to the TRP. In some cases, the TRP separated disease-specific
proposals from the same country into “components.” The 145 proposals
included 204 components.

After reviewing these 204 components, the TRP split the proposals into the
following categories:
* Option 1) 43 for funding with no or minor adjustments (934 million USD
for a multi-year budget)
* Option 2) Option 1 plus 14 components for funding following more
extensive adjustments (678 million USD for a multi-year budget)
* Option 3) Options 2 & 3 plus 42 components for funding contingent on a
re-review by the full TRP (appx. 1 billion USD for a multi-year budget).
* Option 4) 69 components not recommended but encouraged to resubmit (1.3
billion USD for a multi-year budget)
* Option 5) 36 components not recommended (243 million USD for a
multi-year budget)

The TRP recommended that the Board approve Options 2 and that it impose a
six week timeframe on countries required to re-submit modifications to be
validated by the Chair, Vice-Chair, Secretariat and recommendation of the
proposal’s Primary Reviewer.

3.2 Issues

Much of the discussion at the meeting concerned which of the categories
the board should recommend for funding during the first round of
disbursement.

* 3.2.1 PROVISION OF ARVS

One of the concerns raised by members of the NGO delegations, the
delegation of Communities Living with HIV, TB and Malaria, Brazil and
France was the lack of clarity about how many of these proposals included
antiretroviral treatment for HIV/AIDS. According to Dr. Michel
Kazatchkine, the co-chair of the TRP, countries were “shy” about
requesting ARVs. In a briefing given prior to the board meeting, the civil
society delegations were told that only seven (7) proposals specifically
mentioned requested funding for adult antiretroviral treatment, for an
estimated total of 40,000 adults. This excludes mother to child
transmission prevention programs. The 40,000 figure was re-confirmed by
Alex Coutinho, of TASO-Uganda, a TRP co-chair.

Concerned about this gap, the Developing Country NGO delegation moved that
all countries be required to include treatment in their proposals. There
was vigorous debate about this issue, with Brazil and France supporting
the call for applicants to justify why they are not including treatment,
care or prevention in their programs if one of these approaches is
omitted. The call for a treatment requirement was not accepted, nor was
the proposal presented by the Communities of People Living with HIV, TB,
Malaria delegation that the Fund issue a specific call for treatment
proposals.

However, the Board did adopt the requirement that countries justify their
proposals, including the exclusion of treatment. Here again, advocacy
efforts on the part of NGOs, civil society and people infected and
affected by HIV and other diseases are needed to ensure that these
explanations are sought, and that countries submit ambitious, innovative,
treatment-inclusive proposals.

* 3.2.2 AUTHENTICITY OF COUNTRY COORDINATING MECHANISMS (CCMS)

Another concern was whether or not the proposals came from authentic CCMs.
When the GFATM called for CCMs, it was expected that these structures
would not be fully developed by the time the first call for proposals went
out. AIDS advocates and board members who visited countries preparing
proposals reported wide variation in the types of CCMs and in the type of
advice that these groups received from in-country bilateral donors such as
DFID and USAID. Some countries were told that their proposals must include
all three diseases, even if one of them was not endemic to the region,
other countries reported that they received pressure from bilateral donors
not to include costly ARVs in their proposals.

The TRP was not in a position to verify each and every CCM. They looked
for visible linkages between the programs contained in the different
proposals and the role of the CCM partners in implementing them.
Signatures were used to ascertain civil society and NGO participation.
Several delegations urged a more rigorous approach to CCM verification. As
a body that is concerned specifically with proposals, the TRP is not the
mechanism for conducting this review and the Board meeting concluded with
a recognition of a need for ongoing policy development.

There was strong concern voiced by the South African representative of the
East and Southern African countries delegation that the national CCMs have
a more active role in verifying proposals that are not prepared by the
CCM. These proposals include those coming from civil society or NGOs and
provincial or local government. The GFATM guidelines currently call for
proposals from CCMS, but allow for exceptions in specific circumstances.

Overall, several countries urged a closer relationship between CCMs and
national governments, and appeared concerned that NGOs and civil society
groups be limited in their ability to submit proposals when a CCM was in
place. From the NGO perspective, this requires ongoing advocacy to ensure
that civil society groups and individuals living with HIV/AIDS are
meaningful participants in the CCM process – a goal that has yet to be
achieved in some countries.

The Communities of People Living with HIV/AIDS, TB, and Malaria expressed
the need for the Fund to clarify that international non-governmental
organisations based in developed countries could not directly apply as a
CCM. It was important that non-governmental organisations based in
developed countries respond only when their assistance is requested from
the developing country that is applying. Following in line with this,
there was a general call that CCMs not replace other public health
coordinating entities such as National AIDS Control Programs, already in
place in countries applying to the GFATM. It was stressed that these
Programs can and should participate in the CCM.

* 3.2.3 OPTIONS FOR FUNDING

In addition to the concerns about the composition of CCMs and the content
of proposals, there was considerable debate about which of the recommended
options should be funded in the first round. All of the developing country
delegations recommended Option 3 (see above) with some further emphasizing
that the whole review process be considered ongoing, leaving room for
consideration of Options 4 & 5; the European delegations (France, Spain,
European Commission, Scandinavia) favored Option 2; the United States, the
Private Sector delegation, and the United Kingdom favored Option 1.

Issues that were raised included whether or not the fund was acting in
haste in this first round, with the U.S. and UK urging a slower process to
ensure that no mistakes were made in disbursement and monitoring.
Developing countries spoke of the need for a rapid response to the
devastating epidemics and asked that the GFATM use this first funding
decision to send a clear message to the world that it would respond as
quickly and in as many different locations as possible.

Another undercurrent in these discussions was that, even as many
delegations urged the Fund to take ambitious decisions, they were also
aware that the first round of proposals did not include many innovative,
treatment-inclusive programs featuring ARVs and medications for
drug-resistant malaria and tuberculosis.

In considering the commitment of the fund to approved proposals, it was
suggested that the fund lifetime support (up to five years) contingent on
a two-year review and on available resources. A group of delegations, led
by the Developing Countries NGO and Italy, and seconded by Communities
Living with HIV/AIDS, TB, and UNAIDS, urged that the fund remove the
stipulation about available resources. To retain this language would send
the message that the fund could not live up to its mandate as a financing
mechanism and could further emphasize the impression in resource-poor
countries that more costly treatment proposals should not be submitted to
the fund. These comments were noted, and should be reflected in the final
guidelines prepared by the Board. The changes were not noted at the time
of the Board Meeting.

3.3 FUNDING DECISIONS: FIRST ROUND

The Fund agreed to provide immediate support to Option 1 proposals, and to
Option 2 proposals contingent on provision of additional information
reviewed by the TRP. Additional criteria applied to all proposals are that
appropriate fiduciary, procurement and monitoring and evaluation
arrangements are in place in accordance with GFATM policy and that these
arrangements are approved by the Executive Director. Whereas the TRP had
recommended that Option 2 revisions should be received and considered in
six weeks this Board decided that this process will be continuous and
ongoing, and did not set a deadline for receipt of additional information.
The Board decided that Option 3 proposals could also be funded must first
be re-considered by the full Board at the September Board Meeting, and
must also meet the criteria listed above.

In practical terms, this means that the Board approved for Option 1 --
$378 million USD for 40 programs in 31 countries to be disbursed over two
years. For Option 2 -- $238 million USD for 18 proposals in 12 countries
plus three multi-country proposals. These programs add up to 1.6 billion
USD over five years.

The Board decided that funding after the second year would be approved
based on performance during the first two years.

4. OVERALL STRATEGY AND MISSION OF THE FUND

4.1 STRATEGIC FRAMEWORK

The Board members also looked at the question: How to synthesize the
thinking and work to date into a structured and sustainable strategy for
the Fund? To answer this question, the Board considered several documents
that laid out various aspects of the Fund’s short and long term goals, and
different considerations pertaining to each goal.

Three main goals were presented as pillars of an overall strategic
framework:
i. Maximize lives saved per $ spent
ii. Increase productivity per $ spent
iii. Improve capabilities per $ spent

A further goal articulated during the meeting was to balance the fund’s
investments based on regions, diseases and types of interventions
including prevention, care, and treatment.

No major discussion or decisions took place around the strategic framework
during the Board Meeting. The relevant documents were tabled for
discussion at the next Board Meeting.

In the interim, the draft framework raises some issues which bear close
consideration by NGOs, civil society and infected and affected
individuals.

4.2 ISSUES

* 4.2.1 COST-EFFECTIVENESS AND THE IMPLICATIONS FOR TREATMENT

The Fund is a complementary effort with the explicit goal of supporting
programs that bring “additionality” and “value-added” to existing efforts.
The major gap in existing efforts is treatment. NGO and civil society
delegations were concerned about the inherent tension between the goal of
maximizing lives saved per dollar spent and the investment required to
treat HIV and other diseases in the developing world. While many partners
do not consider these programs to be cost-effective, they are a required
component of a truly effective response to AIDS, TB or malaria.

* 4.2.2 IDENTIFYING THE GAPS

The delegation of Communities Living with HIV, Tuberculosis and Malaria
raised the issue that, at present, the Fund is not collecting specific
information on the number of people that will receive treatment or care in
a given proposal or on the specific medications included in the proposal.
The delegation moved that proposals provide the estimated number of people
treated and type of treatment during the initial application with in 3
weeks and on a yearly basis. This was not accepted at the Board Meeting.

* 4.2.3 QUALITY OF PROPOSALS

Feedback from the Secretariat and the TRP indicated that many countries
had difficulty in putting together their proposals. This in part could be
attributed to the short time in which countries had to put together the
applications. All parties acknowledged the need for better, clearer
guidelines and forms to aid the application process. There was also a TRP
recommendation made that a “catalytic emergency fund” be created to
support countries in the process of preparing their proposals.

Many delegations were not in favor of creating such an emergency fund,
stating that the Fund was not created to provide technical assistance in
this way and that other U.N. agencies (sic?) already working in these
countries could assist in the application process. However, there was
general consensus on the need for technical assistance. It is highly
recommended that countries seek this kind of support, especially from the
United Nations.

The Community of People Living with HIV/AIDS, TB and Malaria and others
voiced the acute need for assistance, particularly in designing proposals
for antiretroviral treatment programs and other initiatives that are not
part of the traditional response to these diseases.

A Working Group on Proposals, an expansion of the TRP working group, was
formed to develop new, clear guidelines for the next round of proposals.
These may include specifications for the type of proposals the GFATM is
seeking and strong recommendations for seeking technical assistance.

The new guidelines will be released in advance of the XIVth International
AIDS Conference in Barcelona in July 2002. At this conference, ICASO is
planning a skills-building workshop on the Global Fund open to all NGOs
and civil society members. Countries will have at least two months to
submit the proposals.

5. CONCLUSION

The GFATM has sparked enthusiasm and hope among developing countries and
people living with HIV/AIDS, TB and Malaria. The Fund received over 300
applications in response to its first call for proposals – many more than
were originally expected.

This enthusiasm has yet to be matched by contributions to the fund. At
present, the Fund has less than 1.9 billion dollars, less than the annual
7 to 10 billion dollar requirement quoted by U.N. Secretary General Kofi
Annan when he called for the creation of the fund. In spite of this
shortfall, delegations from donor nations including the United States and
the United Kingdom urged caution in spending the Fund’s existing
resources. In contrast, developing countries advocated a swift, expansive
response from the Fund to support as many proposals as possible.

Looking ahead, civil society, NGOs, infected and affected groups face
several challenges, including, campaigning for increased contributions to
the fund, encouraging proposals that include treatment and fulfill the
original mandate of the fund, and advocating for full and meaningful
participation of civil society in Country Coordinating Mechanisms
established to apply to the Fund.

All partners, especially developing countries, countries in oil-rich
nations, and middle income nations need to express their commitment to
addressing AIDS, TB and malaria by providing financial resources to the
fund. The Fund has provided a mechanism for all countries, and agencies to
contribute into a pool which can then be used in a meaningful way to
respond to the funding needs in the most hit countries.

Global Fund - Second Board Meeting
April 22-25, 2002, New York

A Report from the Delegation of NGOs from Developing Countries

Part II

1. INTRODUCTION

The Board reviewed documents pertaining to many issues, including the ones
listed below. In many cases, these issues were tabled but discussion
deferred to the next Board meeting. This report summarizes some of the key
points and issues raised by these documents so that the NGO community and
other civil society groups can have insight and contributions into the
decisions that will be taken at the next Board meeting. Interested groups
and individuals can find more information on the website of the Global
Fund (www.globalfundatm.org).

i) The appointment of the Fund’s first Executive Director and the Trustee
Agreement that the Fund is undertaking with the World Bank to manage the
Fund’s financial resources.
ii) Fiduciary Trustee Agreement with the World Bank
iii) Monitoring and evaluation tools for tracking proposals in countries
iv) Procurement
v) Partnership strategies for different organizations and entities
including international agencies, local governments, NGOs and national
ministries of health, companies and foundations.
vi) Administrative Services Agreement with the World Health Organisation

2. APPOINTMENT OF THE EXECUTIVE DIRECTOR

At its first meeting in January 2002, the Board formed a recruitment
working group comprised of the Chair, Vice-Chair and the Northern NGO
Board Member to start the process of searching for a permanent Executive
Director for the Fund.

On behalf of the Board, the committee hired Korn-Ferry International, a
search firm, to identify suitable candidates. The committee developed a
job description that was reviewed by all the Fund’s board members and
endorsed. Along with the search firm, the working group defined the
qualities and qualifications desired in the Executive Director.

After a series of initial reviews the 680 applications received were
reduced to 65. Of these 65, 45 candidates who fulfilled the basic criteria
were contacted. 37 were invited for detailed interviews. Eventually the
group reduced the pool to 12 candidates who were personally reviewed by
the recruitment committee.

Of the 12, four names were submitted to the Board for consideration. After
long discussions by the Board, Richard Feachem was selected as the most
appropriate candidate for the position, a decision that followed the
selection committee’s recommendation.

Since 1999, Dr. Feachem has served as the founding Director of the
Institute for Global Health, a joint initiative of the University of
California, San Francisco and the University of California, Berkeley. From
1995-99, Professor Feachem held the positions of Director and Senior
Advisor for Health, Nutrition and Population at the World Bank. He was
responsible for the leadership of the Bank's activities in the Health,
Nutrition and Population sectors, including an active portfolio of 150
projects in 80 countries with financial commitments of over US$10 billion.

At the Board meeting, it was discussed that Dr. Feachem will likely assume
the position starting July 2002. Dr Anders Nordstrom, the interim
Executive Director, will remain with the Secretariat until Dr. Feachem
takes on the position. Dr. Nordstrom will oversee the many decisions
relating to initial disbursements of funds that will be taken between now
and when the new, permanent Executive Director arrives.

3. FIDUCIARY TRUSTEE AGREEMENT

The Board discussed the role of the World Bank as the financial trustee
for the Global Fund, including its role in country-level administration.
The Board agreed to work with the World Bank to act as the trustee for
receiving and disbursing funds according to pre-determined plans.

It was decided that the Executive Director of the Fund would enter into
agreements with “suitable, independent, credible and experienced
organization at each country level to ensure readiness for implementation
and adequate programmatic, financial and related standards.”

The Executive Director will develop these agreements in consultation with
the CCM, the Secretariat and the World Bank on identifying and verifying
the suitability of these organizations, but will not turn this
decision-making power over to the World Bank exclusively.

4. MONITORING AND EVALUATION

There was a brief discussion of the activities of the Monitoring,
Evaluation and Results Based Disbursement Working Group that recommended
that the Board adopt a minimum set of best practices indicators for
evaluating country level programs for the first round of approved
proposals.

These indicators include indices of prevention, care, treatment and
support. There are also process indicators for coverage, impact,
disbursement, expenditure, partnership development, sustainability and
systems development at country level.

The Working Group will bring its final recommendations to the Board in
September. At this April meeting, the Board adopted the minimal indicators
for purposes of the first disbursement.

4.1 ISSUES

i. Instance on baseline data as one of the indicators calls for rigorous
monitoring which is not in existence in many countries in biggest need

ii. Who should meet the cots of Monitoring and Evaluation at country
level?

iii. What is the legal status of the CCMs?

iv. What will the Fund do with non-complying countries/grantees to the
agreed Monitoring and evaluation requirements?

v. What system of feed-back should grantees apply to lower level country
partners.

vi. Should countries who comply with all requirements receive a form of
incentive?

vii. Is there a need for an independent verification process?

5. PROCUREMENT

The Board summarized issues relating to short- and long-term procurement
strategies for medications, diagnostics and other commodities. In the
first round, 45 percent of funding requests were for commodities.
Therefore, the Fund anticipates a magnified challenge for meeting the
procurement requirements of these countries – and further anticipates that
these demands will increase over time as countries expand their
applications to the Fund.

There were no decisions taken at this meeting but it was agreed that the
Executive Director appoint a team of experts – from the public and private
sector -- to look into procurement issues. The NGO delegation from
Developing Countries along with the delegation of Communities Living with
HIV, TB and Malaria, expressed concern that the board members representing
civil society, infected and affected groups would be excluded from this
process, which serious implications for access to commodities, especially
ARVs, in the developing world.

It was clarified that other Board members could assign 1 representative to
join the Working Group.

5.1 ISSUES

* 5.1.1 Selection of Products for Procurement

The current recommendation is that countries will be encouraged to request
products from the WHO-recommended commodities list, and that other
commodities would require approval by the TRP. This restriction could pose
challenges for countries that have registered drugs not yet recommended by
the WHO, such as some antiretrovirals. Therefore, civil society and
infected- and affected groups strongly suggest that countries have
sovereignty to identify the most needed commodities and to select from
their choice of certified, high-quality suppliers.

* 5.1.2 Choice of Suppliers

The current recommendation is that countries choose suppliers acting in
compliance with the Trade Related Intellectual Property Rights (TRIPS)
agreement of the World Trade Organization. This carries major implications
in relation to the cost of commodities to developing countries who would
like to obtain high quality drugs as the lowest possible prices, including
ARVs. The civil society delegations has and will continue to recommend
modification of this recommendation to specify TRIPS as clarified by the
Doha declaration of the WTO, which stipulated that intellectual property
not be a barrier to countries’ purchase of most affordable, high quality
drugs.

* 5.1.3 Requirements of First-Round Grantees

The current recommendation states that grantees should have procurement
systems in line with the Fund’s best practices in place before funds are
disbursed. The civil society delegations are concerned about the
implications this would have on the roll-out of monies, since some
countries may experience significant delays as a result of these
contingencies. Instead, they recommend that the procurement process be
strengthened and scaled-up as the Fund grants roll out and as countries
begin implementing programs.

6. PARTNERSHIP AGREEMENTS

The Fund was created to complement existing efforts to address global
health crises. As such, partnerships with other entities are essential. No
major decisions on partnerships were taken at the April board meeting. The
Board reviewed different levels of local and global partnerships that the
Fund might enter into; and defered further discussion for the September
meeting.

7. ADMINISTRATIVE SERVICES AGREEMENT WITH WHO

The Board considered a Draft Service agreement between the Global Fund and
World Health Organization (WHO) and it was agreed that WHO would be the
administrative sponsor for the Fund, overseeing human resources,
administrative logistics for the next 30 months at an estimated cost of
1.295 million USD (approx$1.3m)

The delegation of Communities Living with HIV/AIDS, TB and Malaria raised
the concern that in the January board meeting they asked for clarification
regarding WHO’s health care coverage, which as they understand, includes a
pre-existing condition clause for HIV-infected individuals not to receive
treatment for two years. WHO and the Secretariat responded that health
coverage for HIV-positive staff will be worked out and an Annex to the
Agreement will be provided to the Board.

[Prepared by Milly Katana, Board Member representing NGOs from the
Developing Countries on behalf of Board members representing NGO
delegations and Communities Living with HIV/AIDS, Tuberculosis and
Malaria].

---
- B R E A K T H E S I L E N C E -
The international forum on health and
development policy issues

You are currently subscribed to break-the-silence as: [email protected]
To unsubscribe send a blank email to
[email protected]

To join email: [email protected]
To post to forum: [email protected]
For info: [email protected]

BTS discussion archives are available at:
http://www.hdnet.org

If you prefer to CONTRIBUTE TO BTS ANONYMOUSLY
ADD THE WORD 'ANON' TO THE SUBJECT LINE of your message
& your identity will not be revealed.

Coordinated by Health & Development Networks (HDN)