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Agreement Between the Government of the United States of America and the Government of the People's Republic of Bangladesh Concerning the Establishment of a Tropical Forest Fund and a Tropical Forest Conservation Board U.S. Department of State, September 12, 2000

The Government of the United States of America (U.S. Government) and the Government of the People's Republic of Bangladesh (Government of Bangladesh), hereinafter known as the Parties,

Seeking to facilitate the conservation, protection, restoration, and sustainable use and management of tropical forests, which provide a wide range of benefits to humankind,

Desiring to enhance the friendship and spirit of cooperation between the Parties,

Recognizing that rapid rates of tropical deforestation and forest degradation continue to be serious problems in many regions of the world,

Also recognizing that the alleviation of external debt can reduce economic pressures on countries and result in increased protection for tropical forests,

Further recognizing that economic benefits to local communities from sustainable uses of tropical forests are critical to the protection of tropical forests,

Wishing to ensure that resources freed from debt are targeted to the conservation of tropical forests,

Also wishing to further the Agreement Between the Government of the United States of America and the Government of the People's Republic of Bangladesh Regarding the Reduction of a Certain Debt Related to Agricultural Trade Owed to the Government of the United States and its Agencies of 12 September 2000, hereinafter known as the 2000 Debt Reduction Agreement, which reduces certain debt owed the U.S. Government through the exchange of old obligations for a new obligation, known as the New Tropical Forest Conservation Act (New TFCA) Obligation,

Have agreed as follows:

Article I -- PURPOSE

The purpose of this Agreement is to provide for the establishment of a Tropical Forest Conservation Fund and Administering Board in order to promote activities designed to conserve, maintain or restore the tropical forests of Bangladesh.

Article II -- TROPICAL FOREST CONSERVATION FUND

1.   The Government of Bangladesh shall establish a Tropical Forest Conservation Fund, hereinafter known as the Fund, in accordance with its own laws. The Fund shall be administered by the Board established pursuant to Article III. Any monies deposited in the Fund, or grants made from the Fund, will be free from any taxation, levies, fees or other charges imposed by the Parties to the extent permissible by law.

2.   Subject to Article III (2) of the 2000 Debt Reduction Agreement, the Government of Bangladesh shall ensure that the entire amount of interest owed on the New TFCA Obligation falling due on or after the entry into force of this Agreement is deposited in full in local currency in the Fund in accordance with the repayment schedule provided by the U.S. Government to the Government of Bangladesh pursuant to the 2000 Debt Reduction Agreement. In the event an interest payment falls due under the repayment schedule set forth in the 2000 Debt Reduction Agreement prior to the establishment of the Fund, the relevant provisions of the 2000 Debt Reduction Agreement will apply.

3.   Monies, in the form of local currencies or other currencies, from other sources, including but not limited to public and private creditors of the Government of Bangladesh and voluntary contributions from the Government of Bangladesh, other governments, and non-governmental entities may also be deposited into the Fund.

4.   Once deposited, these monies shall be subject to the requirements and considerations of this Agreement. Deposits in the Fund shall be the property of the Government of Bangladesh until they are disbursed pursuant to the procedures set forth in Article VI. The Government of Bangladesh shall not grant or permit to be granted a lien, mortgage, charge, privilege or priority with respect to such deposits except in conjunction with disbursements at the direction of the Board pursuant to Articles VI, VIII and IX.

5.   The Government of Bangladesh, in consultation with the U.S. Government, shall appoint a fiscal agent for the Fund who shall be charged with investment and disbursement of the monies in the Fund. The contract between the Government of Bangladesh and the fiscal agent shall specify his/her relationship with the Board. The fiscal agent is responsible for promptly notifying the Board in writing when the Government of Bangladesh makes a deposit to the Fund pursuant to paragraph 2 of this Article, or if a deposit is overdue.

6.   Deposits in the Fund shall be prudently invested by the fiscal agent until disbursed. Returns on investment shall be deposited by the fiscal agent in the Fund until disbursed, pursuant to the procedures set forth in Article VI.

7.   The fiscal agent shall make every effort to ensure that such investments yield a positive real rate of return within acceptable limits of risk. To accomplish this goal, the fiscal agent may be authorized by the Parties jointly to convert all or part of the monies in the Fund into United States or other hard currencies for investment purposes. To the extent that prudent investment practices cannot accomplish this goal, the Government of Bangladesh shall ensure that the value of the deposits in the Fund is maintained in terms of an agreed price index. The fiscal agent shall provide periodic reports to the Board and the Parties on the status of investments.

Article III -- ESTABLISHMENT AND COMPOSITION OF THE BOARD

1.   The Government of Bangladesh, in consultation with domestic nongovernmental entities with an interest in forests, including local community organizations, and scientific, academic, and forestry organizations, shall establish in accordance with its laws a Tropical Forest Conservation Board, hereinafter known as the Board, to administer the Fund. The Board shall be discrete and separate from any existing Board, Commission, Foundation, or other entity.

2.   The Board shall consist of five members. It shall be composed of:

A.  One representative appointed by the U.S. Government;
B.  One representative appointed by the Government of Bangladesh and
C.  Three representatives of a broad range of nongovernmental forest-related interests within Bangladesh, including representatives from;
     (i)   environmental nongovernmental organizations;
     (ii)  local community development nongovernmental organizations; and
     (iii)  scientific, academic and/or forestry organizations.

3.   The representatives under Article III (2)(C) shall constitute a majority of the members of the Board. They shall be appointed to the Board by the Government of Bangladesh in consultation with a range of domestic nongovernmental entities in Bangladesh and with the consent of the U.S. Government from a slate of three candidates put forward by each of the respective nongovernmental interests specified in Article III (2) (C)(i), (ii) and (iii).

4.   Board members appointed in accordance with Article III (2)(A) and (B) shall serve ad honorem and at the discretion of the appointing Party. Board members described in Article III (2)(C) shall serve ad honorem, except as provided in Article IV (9), and in their expert capacity for a three-year term and may be removed prior to the end of their term only for malfeasance. A member may be permitted to serve consecutive terms up to two terms if both Parties agree.

5.   A Board member may not participate in the approval of any proposed grant which, if approved, would result in a financial benefit for the member, any member of his family, or an organization in which the member or any member of his family has a direct financial interest. Further, a Board member may not participate in the approval of any proposed grant to an organization which the member represents.

Article IV -- FUNCTIONS OF THE BOARD

1.   The Board shall be responsible for administration and management of the Fund and disbursements from the Fund to support eligible activities, and for oversight of activities financed from the Fund, pursuant to this Agreement. The Government of Bangladesh, in consultation with the U.S. Government, shall ensure that the Board has the necessary authority to carry out the functions assigned to it in this Agreement.

2.   The Board shall:

A.  issue and widely disseminate a public announcement of the call for grant applications which states the purpose of the fund, eligible activities and applicants in accordance with Article V, the criteria for the selection of grant recipients, the schedule of the grants process, and any other procedural and format requirements established by the Board;

B.  receive applications for grants from entities described in Article V (2) and award grants to such entities for activities consistent with Article V (1) on the basis of evaluating applications for their merits and chances of success;

C.  publicly announce grants awarded by the Board;

D.  develop with each grant recipient a Grant Agreement, which outlines the terms of the grant;

E.  present to the Parties annually according to a schedule to be mutually agreed upon by the Parties:

     (1)  a plan and annual budget for their approval showing prospective activities, including expected administrative and program costs. The first such plan and budget are to be presented within one year from the date of the Board's establishment;

     (2)  a report on grant activities for the previous year, including multi-year activities funded by the Board, which shall include for each grant award information as to the grant recipient, grant amount, activity funded, and status of implementation, as well as information on the status of audits of randomly selected grants; and

     (3)  a financial audit to accepted international standards by an independent auditor, covering the previous program year, the first such audit to be presented by one year from the date of the Board's establishment or at such time as $1 million in grants has been disbursed, whichever comes first.

F.  hire an executive director to coordinate and execute with the guidance of the Board all necessary actions required for the adequate functioning of the Board, including the hiring of necessary support staff with the approval of the Board.

3.  Proposed grants with a life-of- project total in excess of $100,000 endorsed by the Board shall be presented by the Board to both Parties. If either Party disapproves such a grant, that Party must notify the Board of its disapproval, in which case the Board shall not award the proposed grant. Proposed grants not disapproved by either Party within 30 days of presentation to the Parties' members on the Board shall no longer be subject to either Party's disapproval.

4.  The Board shall adopt by majority vote bylaws and procedures for its operation, provided that the majority vote includes the affirmative votes of the representatives of the Parties appointed in accordance with Article III (2)(A) and (B). No disbursements pursuant to Article VI may be made prior to the adoption of these procedures.

5.  The Board shall approve procedures and schedules for the grant process, including procedures and schedules relating to public announcements, grant applications and review, monitoring, and auditing.

6.  The Board shall establish and make public selection criteria for awarding grants, which should include means for evaluating the merits of an application and the chances of success of proposed activities.

7.  The Board shall monitor performance under grant agreements to determine whether time schedules and other performance goals are being achieved. Grant agreements shall provide for periodic progress reports from the grantee to the Board. Such reports will review all activity components essential to the successful achievement of the goals of the activity.

8.  The Board shall meet at least once every four months.

9.  The Board may draw sums from the Fund necessary to pay for reasonable administrative expenses of the Board, including the fiscal audit required pursuant to this Article. Board members appointed under Article III (2)(C) of this Agreement may be compensated from the Fund only for travel expenses and reasonable per diem. Such expenses incurred by Board members appointed under Article III (2)(A) and (B) shall be borne by the respective Party. Administrative expenses may not exceed a ceiling established by the Parties annually. The ceiling for the first year will be established within 120 days of the entry into force of the Agreement.

10.  The Board's bylaws, written policies, operating procedures, summaries of proceedings, books, records, reports, and any organizing statutes shall be retained in the files of the Board. A permanent record shall also be maintained of the decision criteria used in the award of each grant. The Board shall make available for easy public inspection its bylaws, written policies, operating procedures, summaries of proceedings, and decision criteria used in the award of each grant. Upon request, authorities of either Party shall be granted access to all Board documents, including minutes of meetings, books, records, and reports.

11.  The Government of Bangladesh may require that those funds which derive from the New TFCA Obligation referred to in Article II (2), falling due subsequent to the Notification Period, as defined in Article VIII (7), be transferred in U.S. dollars to an escrow account. The Board's operating procedures should expressly authorize the Government of Bangladesh to require such a transfer. Unless otherwise agreed by the Parties, the Government of Bangladesh shall under no other circumstances require that the Board transfer monies contained in the Fund to another account.

Article V -- ELIGIBLE ACTIVITIES AND GRANT RECIPIENTS

1.  Amounts deposited in the Fund shall be used to provide grants to conserve, maintain or restore tropical forests in Bangladesh through one or more of the following eligible types of activities:

A.  Establishment, restoration, protection and maintenance of parks, protected areas and reserves. Such activities could include, for example, demarcation of protected forest areas and indigenous reserves, establishment of new or expanded protected forests and buffer zones, identification of unique or representative forest areas, or inventory and protection of areas featuring species richness and high levels of endemism.

B.  Development and implementation of scientifically sound systems of natural resource management, including land and ecosystem management practices. Such activities could include, for example, forest inventory, assessment and monitoring; implementation of criteria and indicators for forest conservation and sustainable management; or testing and application of silvicultural techniques.

C.  Training programs to increase scientific, technical and managerial capacities of individuals and organizations involved in forest conservation efforts. Such activities could include, for example, short-term training courses, internships and study tours; development of community extension services; environmental education and public awareness programs; enhancement of university curricula in forest management or conservation biology; or education and training to develop capacity of local nongovernmental organizations.

D.  Restoration, protection or sustainable use of diverse animal and plant species. Such activities could include, for example, rehabilitation of degraded forest; sustainable hunting, fishing, animal farming; improvement of forest health and vitality; or efforts to assess/address illegal logging.

E.  Research and identification of medicinal uses of tropical forest plant life to treat human diseases, illnesses and health related concerns. Such activities could include, for example, ethnobotany studies; sample collection and analysis; or technical document preparation, publication and dissemination.

F.  Development and support of the livelihoods of individuals living in or near a tropical forest in a manner consistent with protecting such a tropical forest. Such activities could include, for example, development of community-based and women's enterprises involving wood or non-wood products; application of low impact logging practices; or development of multiple-use tree species outside natural forests.

2.  The Parties recognize the importance of forest activities related to conservation of the Sundarbans mangrove forest in Bangladesh and their endangered population of Royal Bengal tigers, which depend on the mangroves for their habitat.

3.  Entities in Bangladesh which shall be eligible to receive grants from the Fund are:

     A.  Nongovernmental environmental, forestry, conservation, development, educational and indigenous people organizations active in Bangladesh;
     B.  Scientific, academic and professional organizations related to forests;
     C.  Other appropriate forest related entities active in Bangladesh;
     D.  In exceptional circumstances, the Government of Bangladesh.

4.  Grants shall be awarded within the financial capacity of the Board and strictly on the merits of proposals presented to the Board and the chances of success of proposed activities, without regard to whether the applicant does or does not have representation on the Board.

5.  In awarding grants, the Board shall give priority to activities proposed by nongovernmental organizations and other private entities and that involve local communities in their planning and execution.

Article VI -- DISBURSEMENT OF FUNDS

1.  The Board shall instruct the fiscal agent appointed pursuant to Article II (5) to disburse grant monies from the Fund to entities selected to receive grants pursuant to Article V. All disbursements shall be made pursuant to a Grant Agreement.

2.  The fiscal agent of the Fund appointed pursuant to Article II (5) shall make disbursements promptly to designated recipients in accordance with directions received from the Board. In no case shall more than 10 business days elapse in the fiscal agent's country between receipt of a direction for disbursement and actual disbursement of funds.

Article VII -- DISPUTE RESOLUTION AND REVIEW

1.  Upon the written request of either Party, the Parties shall consult concerning the implementation or interpretation of this Agreement. These consultations shall take place within 60 days after a request for consultations is received from the other Party.

2.  Consultations between the Parties concerning the interpretation or implementation of this Agreement may be conducted through written submissions between the Department of State of the U.S. Government and the Ministry of Environment and Forest of Bangladesh. Unless the Government of Bangladesh is notified otherwise by the U.S. Government, the Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs shall be the contact point in the Department of State. The Minister of Environment and Forest's designee, until further notice, shall be the Secretary of the Ministry of Environment and Forest.

3.  Either Party may request consultations with the Board and the other Party after reviewing the Board's reports and audits presented pursuant to Article IV. Such request shall be made in writing. These consultations shall take place within 60 days after a request for consultations is received from the other Party.

4.  The Parties shall meet to review the operation of this Agreement one year from the date of its entry into force, and periodically thereafter as the Parties so agree.

Article VIII -- SUSPENSION OF DISBURSEMENTS

1.  If at any time either of the Parties determines that any issue requiring consultation under Article VII has not been satisfactorily resolved, such Party may notify the other in writing.

2.  Notwithstanding any other provisions of this Agreement, upon receipt of such written notification from the U.S. Government, the Government of Bangladesh shall immediately suspend disbursements made under Article VI.

3.  Notwithstanding any other provisions of this Agreement, upon providing such written notification to the U.S. Government, the Government of Bangladesh may immediately suspend disbursements made under Article VI.

4.  Suspension of disbursements made under Article VI shall mean that no further disbursements shall be made from the Fund by the Board or the fiscal agent to any organization or individual, until both Parties determine that such disbursements shall proceed. Suspension of disbursements made under Article VI of this Agreement shall not prevent expenditures of funds disbursed before the written notification is received.

5.  Should the Parties jointly certify in writing to the Board that the manner in which a grant agreement was awarded was inconsistent with Article III (4) or (5), Article IV (2), Article IV(3), Article IV(6), Article V(1), Article V(3), Article (V)(4), or the operating procedures of the Board, the Parties shall require the Board to suspend disbursements pursuant to that grant agreement.

6.  Furthermore, should disbursements pursuant to a grant agreement be suspended under the terms of Article VIII (5), no further approval of grants shall be undertaken until both Parties agree to resume such activity.

7.  If the Government of Bangladesh fails to require that the Board suspend disbursements made under Article VI within seven days of receiving written notification from the U.S. Government ("the Notification Period"), the U.S. Government may, at its discretion, require that those funds which derive from the new obligation referred to in Article II (2), falling due subsequent to the Notification Period, be transferred in U.S. dollars to an escrow account as defined in the 2000 Debt Reduction Agreement. Any amounts paid to the escrow account may be transferred to the Fund only after both Parties confirm jointly in writing that the issues that led to the suspension of the disbursement have been resolved.

Article IX -- TERMINATION

1.  Either Party may terminate this Agreement upon six months' written notice to the other Party.

2.  No disbursements from the Fund shall occur after a Party has given notice to terminate the Agreement, unless the Parties expressly agree in writing to permit disbursements pursuant to specific grant agreements concluded before notice to terminate is given. The termination of the Agreement shall not prevent expenditures of funds disbursed before notice to terminate is given.

3.  Upon termination of this Agreement, amounts generated by the 2000 Debt Reduction Agreement remaining in the Fund shall be converted into United States dollars and deposited into the appropriate U.S. Government account.

Article X -- ENTRY INTO FORCE, AMENDMENT AND OTHER ARRANGEMENTS

1.  This Agreement shall enter into force upon signature and shall remain in force unless terminated by the parties in accordance with Article IX.

2.  This Agreement may be amended by written agreement of the Parties.

3.  Nothing in this Agreement shall prejudice other arrangements between the Parties concerning debt reduction or cooperation and assistance for tropical forest conservation purposes.

IN WITNESS WHEREOF the undersigned, being duly authorized by their respective Governments, have signed this Agreement.

Done at Washington, this twelfth day of September, 2000, in duplicate, in the English language.

FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF
THE PEOPLE'S REPUBLIC OF BANGLADESH:

[end of document]

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