Accreditation and designation

Overview of the accreditation and designation process

Accreditation and designation is the process by which operational entities are authorised as validators and verifiers of CDM project activities. The process is set out in the Procedure for Accrediting Operational Entities by the Executive Board of the Clean Development Mechanism, contained in EB 56, Annex 2.

In summary, operational entities are accredited (or "provisionally designated") by the Executive Board on a recommendation by the CDM Accreditation Panel, which is advised by a specially constituted CDM Assessment Team, and then designated by the COP/MOP.

The accreditation procedure in EB 74, Annex 12, revising EB 56 Annex 2, is Version 11.0 and replaces earlier versions contained in EB 46 Annex 3, EB 34 Annex 1, EB 32 Annex 2, EB 29 Annex 1, EB 27 Annex 1, EB 26 Annex 1, EB 23 Annex 1, EB 7 Annex 2, and EB 5 Annex 2. In this guidance document:

  • "Entity" is used to describe an entity prior to application;
  • "Applicant entity" (or "AE") is used to describe an entity once its application has been duly submitted or whose application is subject to a procedure contained in this document; and
  • "Designated operational entity" refers to the entity after it has been designated by the COP/MOP.

The latest version of the Procedure for Accrediting Operational Entities by the Executive Board of the Clean Development Mechanism (Version 10.1) will come into effect on 17 November 2010 (EB 56, paragraph 13).

Bodies involved in the accreditation process

According to 3/CMP.1, Annex, paragraph 20, accreditation of applicant entities and related functions are the responsibility of the Executive Board:

The Executive Board shall:

  1. Accredit operational entities which meet the accreditation standards contained in appendix A below;
  2. Recommend the designation of operational entities to the COP/MOP;
  3. Maintain a publicly available list of all designated operational entities;
  4. Review whether each designated operational entity continues to comply with the accreditation standards contained in appendix A below and on this basis confirm whether to reaccredit each operational entity every three years;
  5. Conduct spot-checking at any time and, on the basis of the results, decide to conduct the above-mentioned review, if warranted (3/CMP.1, Annex, paragraph 20; previously 17/CP.7, paragraph 20).

However, 3/CMP.1, Annex, paragraph 25 confirms that the Executive Board may delegate these accreditation functions:

The Executive Board may seek assistance in performing the functions in paragraph 20 above (3/CMP.1, Annex, paragraph 25; previously 17/CP.7, Annex, paragraph 25).

The Executive Board has delegated most of the accreditation functions to a team of bodies. The role of each of these bodies is set out in EB 56, Annex 2, paragraph 3:

The responsibility of each actor in this scheme...is as follows:

  1. The COP/MOP designates operational entities, or withdraws their designation, based on a recommendation by the EB;
  2. The EB takes the decision whether or not to accredit an AE and recommend it to the COP/MOP for designation, and to fully or partially suspend a DOE, or to withdraw accreditation of a DOE;
  3. The CDM accreditation panel (CDM-AP) serves as the technical panel of the EB in accordance with its terms of reference and makes recommendations to the EB on effective implementation of the CDM accreditation process;
  4. A CDM assessment team (CDM-AT), in accordance with the CDM accreditation procedure and under the guidance of the CDM-AP, undertakes the assessment of an AE and/or DOE, to identify the level of conformity to the CDM accreditation requirements and reports to the CDM-AP;
  5. The secretariat supports the implementation of the CDM accreditation procedure;
  6. The AE/DOE submits all required documentation through the official communication channel established for that purpose.

The power of the Executive Board to accredit operational entities is derived from Section D of the modalities and procedures (3/CMP.1, Annex, Section D).  Each of the rules in this section is discussed below.  The provisions of this section apply equally to afforestation and reforestation (A/R) project activities:

All provisions of section D of the CDM modalities and procedures, contained in the annex to decision 17/CP.7, shall apply mutatis mutandis to afforestation and reforestation project activities under the CDM (5/CMP.1, Annex, paragraph 5).

Standards for accreditation

In order to become accredited as an operational entity for the CDM, an operational entity must meet the criteria contained in 3/CMP.1, Annex, Appendix A. These criteria include basic organisational criteria (paragraph 1) as well as operational criteria (paragraph 2).

Basic criteria

The basic criteria for accreditation, set out in 3/CMP.1, Annex, Appendix A, paragraph 1, are as follows:

An operational entity shall:

  1. Be a legal entity (either a domestic legal entity or an international organization) and provide documentation of this status;
  2. Employ a sufficient number of persons having the necessary competence to perform validation, verification and certification functions relating to the type, range and volume of work performed, under a responsible senior executive;
  3. Have the financial stability, insurance coverage and resources required for its activities;
  4. Have sufficient arrangements to cover legal and financial liabilities arising from its activities;
  5. Have documented internal procedures for carrying out its functions including, among others, procedures for the allocation of responsibility within the organization and for handling complaints. These procedures shall be made publicly available;
  6. Have, or have access to, the necessary expertise to carry out the functions specified in modalities and procedures of the CDM and relevant decisions by the COP/MOP, in particular knowledge and understanding of:
    1. The modalities and procedures and guidelines for the operation of the CDM, and relevant decisions of the COP/MOP and of the Executive Board;
    2. Issues, in particular environmental, relevant to validation, verification and certification of CDM project activities, as appropriate;
    3. The technical aspects of CDM project activities relevant to environmental issues, including expertise in the setting of baselines and monitoring of emissions;
    4. Relevant environmental auditing requirements and methodologies;
    5. Methodologies for accounting of anthropogenic emissions by sources;
    6. Regional and sectoral aspects;
  7. Have a management structure that has overall responsibility for performance and implementation of the entity's functions, including quality assurance procedures, and all relevant decisions relating to validation, verification and certification. The applicant operational entity shall make available:
    1. The names, qualifications, experience and terms of reference of senior management personnel such as the senior executive, board members, senior officers and other relevant personnel;
    2. An organization chart showing lines of authority, responsibility and allocation of functions stemming from senior management;
    3. Its quality assurance policy and procedures;
    4. Administrative procedures, including document control;
    5. Its policy and procedures for the recruitment and training of operational entity personnel, for ensuring their competence for all necessary functions for validation, verification and certification functions, and for monitoring their performance;
    6. Its procedures for handling complaints, appeals and disputes;
  8. Not have pending any judicial process for malpractice, fraud and/or other activity incompatible with its functions as a designated operational entity (3/CMP.1, Annex, Appendix A, paragraph 1).

Basic criteria for accreditation for afforestation and reforestation project activities

The same basic criteria apply to DOEs seeking accreditation for afforestation and reforestation activities, except that DOEs are required to have knowledge and understanding of:

  • Environmental and socioeconomic issues relevant to validation, verification and certification of afforestation and reforestation project activities under the CDM;
  • The technical aspects of afforestation and reforestation project activities under the CDM, including expertise in the setting of baseline net greenhouse gas removals by sinks and monitoring of emissions and removals; and
  • Methodologies for accounting of greenhouse gas emissions by sources and removals by sinks (5/CMP.1, Annex, Appendix A).

These criteria replace paragraphs (1)(f)(ii), (iii) and (v) in the basic criteria for non-forestry projects above.

Operational criteria

The applicant entity must also meet the operational criteria set out in 3/CMP.1, Annex, Appendix A, paragraph 2:

An applicant operational entity shall meet the following operational requirements:

  1. Work in a credible, independent, non-discriminatory and transparent manner, complying with applicable national law and meeting, in particular, the following requirements:
    1. An applicant operational entity shall have a documented structure, which safeguards impartiality, including provisions to ensure impartiality of its operations.
    2. If it is part of a larger organization, and where parts of that organization are, or may become, involved in the identification, development or financing of any CDM project activity, the applicant operational entity shall:
      • Make a declaration of all the organization's actual and planned involvement in CDM project activities, if any, indicating which part of the organization is involved and in which particular CDM project activities;
      • Clearly define the links with other parts of the organization, demonstrating that no conflicts of interest exist;
      • Demonstrate that no conflict of interest exists between its functions as an operational entity and any other functions that it may have, and demonstrate how business is managed to minimize any identified risk to impartiality. The demonstration shall cover all sources of conflict of interest, whether they arise from within the applicant operational entity or from the activities of related bodies;
      • Demonstrate that it, together with its senior management and staff, is not involved in any commercial, financial or other processes which might influence its judgement or endanger trust in its independence of judgement and integrity in relation to its activities, and that it complies with any rules applicable in this respect;
  1. Have adequate arrangements to safeguard confidentiality of the information obtained from CDM project participants in accordance with provisions contained in the present annex (3/CMP.1, Annex, Appendix A, paragraph 2).

CDM accreditation standard for operational entities

EB 46 introduced a CDM Accreditation Standard for Operational Entities, revised by Version 1.1 from Annex 2 to EB 48 and Version 2 from Annex 1 to EB 56. The purpose of the accreditation standard is to facilitate and promote common understanding and consistent implementation of the CDM accreditation requirements by providing users with a compilation of all the CDM accreditation requirements in a single document. AEs and DOEs do not have to comply with Version 2 of the Accreditation standard until 17 March 2010 (EB 56, paragraph 12)

The CDM accreditation standards described in Appendix A to Decision 3/CMP.1 (CDM M&P) specify the requirements applicable to AEs and DOEs. An AE/DOE shall also comply with the requirements described in other sections of the CDM M&P and in the decisions and/or clarifications issued by COP/MOP and the CDM EB (EB 56, Annex 1, part II).

The accreditation standard covers the following areas:

  1. Legal issues;
  2. Human resources and competence;
  3. Liability and finance;
  4. Process requirements;
  5. Information management;
  6. AE's/DOE's organisation;
  7. Quality management system;
  8. Handling complaints, disputes and appeals;
  9. Pending judicial process;
  10. Safeguarding impartiality; and
  11. Confidentiality management.

A detailed overview of the accreditation standard is provided here.

Scope of accreditation

The 'scope of accreditation' consists of sectoral scopes as applied by the entity and in which the entity has demonstrated its competence for performing validation and verification/certification functions. An accredited entity shall be allowed to carry out validation and verification functions in specified sectoral scope(s) (EB 56, Annex 2, paragraph 10). The Executive Board has established a list of sectoral scopes for accreditation, available electronically on the UNFCCC CDM website (Annex B to EB 56, Annex 1).

In order to undertake validation or verification/certification of a project activity, a designated operational entity must be accredited for all sectoral scopes to which the project relates (EB 18, paragraph 15). However, 'grouping' of sectoral scopes is allowed, so that a favourable assessment of one activity may establish the eligibility of the applicant entity to be accredited for more than one sectoral scope (EB 9, Annex 2, paragraph 3).

Applying for accreditation in an additional sectoral scope

A DOE may at any time apply to be accredited for additional sectoral scopes. The standard procedural steps for accreditation apply. The DOE shall submit to the secretariat, along with its application, the application documentations (set out in EB 56, Annex 2, Appendix 1). The accreditation for additional sectoral scopes will only be valid until the expiry of the existing accreditation. (EB 56, Annex 2, paragraph 147).

Accreditation and designation process

The accreditation procedure is set out in detail in EB 56, Annex 2, paragraph 13:

The accreditation process comprises the following main steps:

  1. An application for accreditation by an entity;
  2. A completeness check of the application documentation by the secretariat;
  3. Consideration of the application by the CDM-AP;
  4. A desk review by a CDM-AT of the documentation provided by the AE;
  5. On-site assessment by the CDM-AT at the central office of the AE and/or at any other site where the CDM functions are to be undertaken;
  6. A recommendation on accreditation or rejection of application by the CDM-AP to the EB;
  7. A decision by the EB on accreditation or rejection of application of the AE;
  8. Recommendation for designation to the COP/MOP by EB (EB 56, Annex 2, paragraph 13).

The following sections will discuss each of these steps in detail.

Step (a)-(b): Application for accreditation and completeness check

  • In order to apply for accreditation, an entity must:
    submit a completed application form (F-CDM-A) and related application documentation (EB 56, Annex 2, Appendix 1) to the secretariat of the CDM Executive Board (EB 56, Annex 3, paragraph 15). These must include a legal statement indicating that there are no legal impediments to the applicant entity operating as a DOE arising from applicable domestic law or applicable law/statutes (EB 17, paragraph 7); and
  • pay, or have paid, a non-refundable application fee (EB56, Annex 2, paragraph 16). The application fee is currently US$15,000 (EB 4, paragraph 2(8); EB56, Annex 2, Appendix 5, paragraph 2), but applicant entities from non-Annex I Parties may pay, or have paid, 50% of this fee if they are unable to pay the full fee at application (EB 6, paragraph 3(f); EB 56, Annex 2, Appendix 5, paragraph 3).

The secretariat will check that all documentation and information submitted is complete and shall inform the entity if any information is missing (EB 56, Annex 2, paragraph 17). The following changes, made by an applicant entity (AE) or DOE during the accreditation process or following accreditation, may have some cost implications:

  1. Addition or subtraction to the list of sectoral scopes applied for before decision of the EB on accreditation;
  2. Changes in the legal status of the entity;
  3. Changes in ownership;
  4. Substantial changes in documentation (EB56, Annex 2, Appendix 5, paragraph 20).

The costs associated with this work will be paid as follows:

  • If notified before CDM-AT members have signed confidentiality and non-disclosure agreements, no additional cost;
  • If notified before the coordination of the on-site assessment, the equivalent of 2 days of the standard daily fee for CDM-AT members; and
  • If notified any time after this, it will be considered as a new application and a new non-refundable application fee is payable (EB 56, Annex 2, Appendix 5, paragraph 21).

Any changes by a DOE will be considered by the CDM-AP and related costs will be decided on a case by case basis (EB 56, Annex 2, Appendix 5, paragraph 22).

Once the application documents are complete, the secretariat will publish the name of the applicant entity and the sectoral scope(s) applied for on the UNFCCC CDM website. Parties, accredited NGOs and other stakeholders then have 15 days to comment on the application (EB 56, Annex 2, paragraph 18).

The secretariat will then prepare an application file and send this to the CDM-AP, along with the comments and/or information received from the stakeholders (EB 56, Annex 2, paragraph 19).

Step (c): Consideration by the CDM-AP

Once the CDM Accreditation Panel has received the application file, it will conduct a preliminary review of the documentation (EB 56, Annex 2, paragraph 20). The CDM-AP Chair will select the CDM Assessment Team and team leader (EB 56, Annex 2, paragraph 21). The CDM Accreditation Panel must inform the applicant entity, through the secretariat, of the composition of the CDM Assessment Team, and the AE may object in writing within six days in the case of a conflict of interest (EB 56, Annex 2, paragraph 22). Members of the CDM Assessment Team are required to sign a confidentiality and non-disclosure agreement (EB 56, Annex 2, paragraph 23).

Steps (d) - (e): Assessment process

The assessment process, carried out by the CDM Assessment Team, consists of two main elements, as set out in EB 56, Annex 2, paragraph 4 - a desk review and an on-site assessment:

  1. Desk review by a CDM-AT of the adequacy of the documented system of AE to meet the CDM accreditation requirements and perform CDM validation and verification functions;
  2. On-site assessment by a CDM-AT to evaluate the implementation of the system, including the competencies and operational capability of the AE to comply with the CDM accreditation requirements. The on-site assessment shall take place at the central office of the AE and/or at any other site where the CDM functions are undertaken, as decided by the CDM-AP. The CDM-AP, in planning any on-site assessment, may decide that the impartiality committee meeting of an AE/DOE shall be observed. In such cases, the AE/DOE shall make necessary arrangements for undertaking this activity.

Desk review

The desk review process is further described in EB 56, Annex 2, B.4. The CDM-AT will undertake the desk review of the documentation provided by the AE/DOE and prepare the draft desk review report within 20 days after receiving the application documentation from the secretariat.

If the CDM-AT identifies any non-conformities against the requirements, the AE/DOE will provide additional or amended documentation within 90 days, or 30 days for re-accreditation, of the receipt of the desk review report. The CDM-AT will prepare the desk review report on the basis of amended and additional documentation within 10 days of receipt of such documentation. Once the CDM-AT has finalised its desk review report, the CDM-AT will provide its final conclusion and recommendation to the CDM-AP (EB 56, Annex 2, paragraph 29).

If no documents have been received from the AE within 90 days of the draft desk review report, the CDM-AT shall finalise the draft final desk review report indicating the missing elements, and/or the non-conformities, and provide its conclusion and recommendation to the CDM-AP (EB 56, Annex 2, paragraph 34).

For applications for re-accreditation different timelines for the application process apply. These timelines are specified in EB 56, Annex 2, B.4.

The CDM-AP, after considering the report from the CDM-AT, shall decide whether to:

  1. Recommend to the EB the rejection of the application of accreditation of the AE;
  2. Seek additional and amended documentation from the AE, providing submission and assessment deadline(s) andrequesting the CDM-AT to conduct an additional desk review in relation to the documentation; or
  3. Request the CDM-AT to proceed with the on-site assessment (EB 56, Annex 2, paragraph 36).

For re-accreditation or extension of sectoral scope(s), the CDM-AP may in addition decide to recommend to the EB the suspension of accreditation of the DOE (EB 56, Annex 2, paragraph 40).

The CDM-AP shall inform, through the secretariat, the AE of its decision to recommend the rejection of its application for accreditation. The AE shall have six days to appeal against the CDM-AP recommendation. The appeal shall be addressed to the Board in accordance with the provisions contained in EB 56, Annex 2, Appendix 2.

The Board shall then consider the recommendation of the CDM-AP and the report of the appeal panel (if relevant) and decide on one of the following options:

  1. Reject the application of accreditation of the AE;
  2. Request the CDM-AP to proceed with the on-site assessment;
  3. Refer the application to the CDM-AP for further work/reconsideration (EB 56, Annex 2, paragraph 39).

On-site assessment

The on-site assessment process is further described in EB 56, Annex 2, B.5. Once the desk review process has been completed, the team leader (assisted by the secretariat) coordinates the date for the on-site assessment at the central office of the AE. The assessment process involves the following steps:

  1. The CDM-AT conducts the on-site assessment, in compliance with the CDM on-site assessment procedure.
  2. The CDM-AT prepares the on-site assessment report within 12 days of completion of the on-site assessment, which is sent to the AE for comments.
  3. From date of receipt of the on-site assessment report, the AE has 30 days to propose corrective actions to resolve the non-conformities identified.
  4. The CDM-AT assesses the proposed corrective action plan within 6 days. If the CDM-AT does not accept the proposed corrective action plan, or the proposed corrective actions are not submitted, the AE has an additional 15 days to propose further corrective actions.
  5. From the date of acceptance of the proposed corrective actions, the AE shall have 90 days to implement those actions and submit evidence demonstrating the implementation.
  6. Once the AE has submitted documentation demonstrating that it has implemented the approved corrective actions, the CDM-AT shall have 12 days to verify the implementation of all the corrective actions to address non-conformities, close the non-conformities and complete the draft final on-site assessment report. In case the non-conformities have not been adequately addressed through implementation of the corrective actions, the AE shall have 30 additional days to pursue implementation.
  7. The CDM/AT makes the draft final on-site assessment report and non conformance forms available to the AE. The AE has 6 days to provide comments on this.
  8. The CDM/AT has 6 days to complete the final assessment report taking into account the AE's comments.
  9. The secretariat submits the final assessment report to the CDM-AP for decision at its next meeting.
  10. The CDM-AP will decide one of the following options:
    1. Recommend to the EB the accreditation for all the sectoral scopes applied for by the AE;
    2. Recommend to the EB the accreditation for only some of the sectoral scopes applied for by the AE;
    3. Recommend to the EB to reject the application for accreditation;
    4. Seek additional corrective actions from the AE;
    5. Undertake any other appropriate action based on the reports
  11. The AE is informed of the CDM-AP's decision through the secretariat, and has 6 days to appeal against a recommendation of the CDM-AP. The appeal should be addressed to the EB.
  12. The EB shall make a decision to accredit the AE for all sectoral scopes applied for or for partial sectoral scopes, or the EB will reject the application for accreditation. The initial accreditation is valid for 3 years from the date of the accreditation decision by the EB.

For applications for re-accreditation different timelines for the application process apply. These timelines are specified in EB 56, Annex 2, B.5. For re-accreditation or extension of sectoral scope(s), the CDM-AP may in addition decide to recommend to the EB the suspension of accreditation of the DOE (EB 56, Annex 2, paragraph 58).

Performance Assessment

The performance assessment process is further described in EB 56, Annex 2, B.6. Performance assessment occurs over a period of six months (EB 57, paragraph 9). The process for performance assessment is as follows:

  1. After completion of the accreditation process, the CDM-AP decides on the number of activities to be assessed as part of the performance assessment. The number of activities selected is based on the number of scopes for which the DOE is accredited, the number of project activities the entity has validated/verified and performance of the DOE based on the results of the implementation of the policy framework to address non-compliance of DOEs.
  2. The secretariat informs the DOE of the project activity selected for performance assessment for validation and/or verification and of the composition of the CDM-AT.
  3. The DOE may object, in writing to the CDM-AP within 6 days, to members of the CDM-AT based on any conflict of interest.
  4. The DOE forwards the relevant documents in accordance with Appendix 8 to Annex 2 of EB 56 within 3 days of receiving the information from the secretariat on the activity selected for the performance assessment.
  5. The performance assessment of the validation functions is based on documentary evidence. The performance assessment of the verification functions is based on the observation of the verification assessment carried out by the DOE's team at the project site and evaluating conformity of the DOE's draft verification report.
  6. The DOE forwards to the CDM-AT the draft verification report, duly reviewed internally for its completeness and adequacy, including the Corrective Action Requests (CARs), Clarification Requests (CLRs) and/or Forward Action Requests (FARs) within 30 days of the site visit.
  7. The CDM-AT completes the performance assessment for validation/verification functions within 14 days of receiving all relevant documents, including any additional documents which have been requested by the CDM-AT.
  8. The entity proposes corrective actions within 20 days of the receipt of the draft performance assessment report and non-conformities report. The CDM-AT reviews the proposed corrective actions and communicate its acceptance or non-acceptance to the DOE within 6 days. If the proposed corrective actions are not accepted, the DOE has another 10 days to propose additional corrective actions.
  9. The DOE implements the proposed corrective actions accepted by the CDM-AT and provides evidences to the CDM-AT of the implementation of corrective actions within 30 days of the acceptance of corrective actions.
  10. The CDM-AT evaluates implementation of the corrective actions. The CDM-AT prepares the final assessment report, closes the non-conformities and forwards the same to the DOE within 6 days of the receipt of the evidences of the corrective actions.
  11. If implementation is not satisfactory, the secretariat informs the DOE and it will have another 15 days to demonstrate conformity.
  12. The CDM-AT makes the final assessment report and NC reports available to the DOE. The DOE then has 10 days to provide comments on the final assessment report.
  13. The CDM-AT has 6 days to complete the final assessment report taking into consideration the comments provided by the DOE.
  14. The secretariat submits the final assessment report to the CDM-AP for a decision at its next meeting. The CDM-AP based on the final assessment report and the comments received from the DOE may decide to:
    1. Inform the EB of the successful outcome of performance assessment;
    2. Inform the EB of the unsuccessful outcome of the performance assessment:
      1. Undertake additional performance assessment(s);
      2. Recommend to the EB to suspend the accreditation for limited sectoral scopes and/or functions;
      3. Recommend to the EB to suspend the accreditation for all scopes and functions; or
    3. Seek additional corrective actions from the DOE, providing deadlines for their proposal and implementation and requesting the CDM-AT to conduct assessments in relation to those actions; and
    4. Undertake any other appropriate action based on the reports (EB 56, Annex 2, paragraphs 86 and 87).
  15. The CDM-AP informs the DOE of its decision through the secretariat. The DOE shall have six days to appeal against the CDM-AP recommendation.
  16. The Board shall consider the recommendation of the CDM-AP, the report of the appeal panel and/or the hearing of the DOE, if applicable, and may decide to:
    1. Maintain the accreditation of the DOE;
    2. Suspend the accreditation of the DOE;
    3. Suspend the accreditation of the DOE for specific sectoral scopes and/or functions (EB 56, Annex 2, paragraph 89).

The 'Form for reporting to the public – DOE performance monitoring' (version 01) was adopted at EB 57 (Annex 2) and can be accessed here. The form is designed to make information regarding DOE performance publicly available on the UNFCCC website. Reporting must take place every three months during the monitoring period (EB 57, paragraph 9).

Designation by the COP/MOP

Once an applicant entity has been accredited by the Executive Board, it is then designated by the COP/MOP and becomes a designated operational entity.

Applying for accreditation in a new sectoral scope

If an applicant entity has applied for accreditation in a new sectoral scope, the provisions and timelines of EB 56, Annex 2, B.1 to B.7 apply as appropriate and applicable in accordance with the scope defined by the CDM-AP (EB 56, Annex 2, paragraph 146). The list of documents to be submitted by a DOE with its application for the extension of accreditation to a new sectoral scope is contained in EB 56, Annex 2, Appendix 1.

The Executive Board has established a list of sectoral scopes for accreditation, available electronically on the UNFCCC CDM website (Annex B to EB 56, Annex 1)

Withdrawal of applications

If an applicant entity withdraws its application prior to accreditation and designation, any costs incurred up to that point are not refunded.

Regular surveillance and spot-checking

Two methods of monitoring the performance of DOEs are provided for in the accreditation rules - regular on-site surveillance (EB 56, Annex 2, B.7) and spot-checking (EB 56, Annex 2, B.8).

Regular on-site surveillance

The regular on-site surveillance assessment is conducted at least once during the 3 years of the accredited period of the DOE. The procedure for on-site surveillance is set out in EB 56, Annex 2, B.7. The regular on-site surveillance assessment takes place at the central office of the DOE all other sites where the CDM functions are being undertaken.

The CDM-AP decides on the locations of the regular on-site surveillance. The assessment is for a minimum of 4 days per site, unless otherwise decided by the CDM-AP.

The secretariat shall inform the DOE at least three months in advance on the tentative dates of the site visits. The regular surveillance, at the central office, shall take place no later than the 18th month from the date of accreditation of the DOE. The DOE may request a deviation from the tentative scheduled date of the site visit by not more than one month.

The CDM-AT for the regular on-site surveillance assessment is comprised of at least two members. The CDM-AT is nominated by the Chair of the CDM-AP in consultation with the CDM-AP and with the assistance of the secretariat.

The secretariat prepares a work plan based on the performance and validation/verification undertaken by the DOE under the guidance of the CDM-AP. Data gathered as a result of the implementation of the policy framework to address non-compliances of DOEs, shall constitute the basis of the elaboration of the work plan and the scope of the assessment.

The process for regular on-site surveillance is as follows:

  1. The DOE submits an electronic copy of the documentation specified in Appendix 1.
  2. The CDM-AT undertakes a review of the documentation submitted by the DOE.
  3. The team leader coordinates, schedules the on-site assessment and forwards the assessment plan to the DOE at least 10 days prior to the surveillance assessment.
  4. The CDM-AT, after completion of the regular surveillance assessment, has 10 days to prepare the draft surveillance assessment report.
  5. The DOE has 15 days to propose corrective actions to resolve the identified nonconformities from receipt of the on site assessment report.
  6. The CDM-AT assesses the proposed corrective actions within 6 days. In case the proposed corrective actions are not accepted by the CDM-AT, the DOE has another 7 days to propose further corrective actions
  7. All proposed corrective actions identified and accepted by the CDM-AT are completed within 30 days from the date of acceptance of the corrective actions.
  8. Once the DOE has submitted documentation demonstrating that it has implemented the corrective actions identified, the CDM-AT shall have 10 days to verify the implementation of all the corrective actions to address the non-conformities, close the non-conformities and prepare the final assessment report.
  9. If implementation is not satisfactory, the DOE shall have an additional 15 days to pursue implementation of the corrective actions and submit further evidences.
  10. The CDM-AT makes the final assessment report and non-conformities reports available to the DOE. The DOE has 6 days to provide comments on the final assessment report.
  11. The CDM-AT has 6 days to complete the final assessment report taking into consideration the comments provided by the DOE.
  12. The secretariat shall submit the final assessment report to the CDM-AP for a decision at its next meeting. The CDM-AP may recommend to the EB to maintain the accreditation of the DOE; recommend to the Board to suspend the accreditation of the DOE; or seek additional corrective actions from the DOE, providing deadlines for their proposal and implementation and requesting the CDM-AT to conduct assessment of such actions.

The costs relating to the regular on-site surveillance assessment shall be borne by the DOE in accordance with Appendix 5 (Fees and costs) of the accreditation procedure.

The DOE shall have six days to appeal against the CDM-AP recommendation. The appeal shall be addressed to the Board in accordance with the provisions contained in Appendix 2 (Handling of appeals). The DOE shall also have an opportunity for a hearing (EB 56, Annex 2, paragraph 115).

The Board shall consider the recommendation of the CDM-AP and the report of the appeal panel and/or the hearing of the DOE, if applicable, and decide on one of the following options:

  1. Maintain the accreditation of the DOE;
  2. Suspend the accreditation of the DOE;
  3. Suspend the accreditation of the DOE for specific sectoral scopes and/or functions.

Spot-checking

Spot-checking (unscheduled surveillance) is used to assess whether a DOE still meets accreditation requirements (EB 56, Annex 2, paragraph 8). The Executive Board is authorised to conduct spot-checks of DOEs at any time (EB 56, Annex 2, paragraph 117). The CDM-AP can recommend the Executive Board to conduct a spot-check of any particular DOE at any time (EB 56, Annex 2, paragraph 119).

The procedure for spot-checks is set out in EB 56, Annex 2, B.8:

  1. A decision to conduct a spot-check may be triggered by:
    1. The review process conducted by the Executive Board including the provisions of the policy framework to address non-compliance of DOEs;
    2. Information received from a third party on changes to a DOE which may significantly affect the competency and performance quality of the DOE, such as ownership, organisational structure, internal policies or technical expertise of personnel; or
    3. Recommendation from the CDM-AP, including as a result of handling complaints against an AE/DOE as specified in Appendix 3 and performance assessment outcome.
  2. Once the Executive Board has decided to conduct a spot-check, it determines a scope and informs the CDM-AP. The scope of the spot-check includes identification of the type and site of the spot-check, and specific aspects, such as:
    • Quality and operational management of the DOE in relation to its competence for performing validation and verification functions.
    • Institutional and organisational structure of the DOE, in particular, for providing validation and verification functions in an independent and impartial manner.
    • Competencies of the DOE to perform all aspects of validation and verification/certification functions.
    • Any other area identified as relevant to ensure competency and conformity of the DOE (EB 56, Annex 2, paragraph 124).
  3. The CDM-AP considers the case, elaborates the scope of the spot-check, and establishes a CDM-AT to conduct the spot-check and prepare a spot-check report.
  4. The CDM-AP based on the reports and the comments received from the DOE, recommends the EB to:
    1. Confirm the accreditation and designation of the DOE;
    2. Request the DOE to identify and implement corrective actions to address the identified non-conformities within specified timeframe. The implemented corrective actions shall be verified by the assessment team through a site visit or a document review as appropriate;
    3. Partially suspend accreditation with corrective actions to be implemented before suspension is lifted;
    4. Fully suspend accreditation with corrective actions to be implemented before suspension is lifted;
    5. Withdraw the accreditation of the DOE (EB 56, Annex 2, paragraph 132).
  5. The recommendation of the CDM-AP to the Board shall be forwarded to the DOE. The DOE shall have an opportunity for a hearing to present their case to the Board at its next meeting.
  6. The EB considers the recommendation made by the CDM-AP and the additional documented evidence presented by the DOE at the hearing. In accordance with provisions of paragraph 21 of the CDM M&P and the decision of CMP 4, the EB will decide to:
    1. Confirm the accreditation and designation of the DOE;
    2. Request the DOE to address identified non-conformities, specifying timeframe for implementation and modalities of the assessment;
    3. Partially suspend accreditation, in respect of specific scopes or functions, indicating corrective actions to be implemented before suspension is lifted;
    4. Fully suspend accreditation, indicating corrective actions to be implemented before suspension is lifted;
    5. Withdraw accreditation of the DOE; or
    6. Advise any other action (EB 56, Annex 2, paragraph 134).

The procedures for lifting partial or complete suspension of a DOE are undertaken in accordance with EB 56, Annex 2, B.12.

The DOE will cover all the costs related to the spot-check in accordance with EB 56, Annex 2, Appendix 5.

Policy framework to address non-compliance

The Executive Board has developed a Policy framework to address non-compliance by Designated Operational Entities, based on the following principles:

  1. Any non-compliance of a DOE shall be addressed;
  2. A non-compliance shall be addressed in line with the risks it posed to:
    1. Credibility of the CDM process, and/or
    2. Confidence level of the Board in the DOE performance;
  3. An individual non-compliance issue bears a combined risk and contributes towards overall non-compliance;
  4. The overall non-compliance is graded in accordance with the combined risk that the individual non-compliance issues are posing to the process and the ongoing confidence of the Board in a particular DOE;
  5. Consequences of non-compliance are determined according to the grade;
  6. DOE performance can be measured by the level of its overall non-compliance (EB 49, Annex 3, paragraph 12).

Re-accreditation

The accreditation of a DOE is valid for 3 years only, and designation is valid from the date of accreditation (EB 56, Annex 2, paragraph 64). 9 months before the expiry date of its accreditation, a DOE must notify the secretariat whether it wishes to apply for reaccreditation (EB 56, Annex 3, paragraph 136).

The process for applying for reaccreditation is set out in EB 56, Annex 2, B.9:

  1. The DOE submits to the secretariat documentation listed in Appendix 1. The DOE may apply for additional sectoral scopes and identify additional sites.
  2. The CDM-AT undertakes activities during the re-accreditation process desk review of documentation and on-site assessment.
  3. Performance assessment of project activities selected by the CDM-AP continues after re-accreditation.
  4. The provisions and timelines within sections B.1 to B.7 of EB 56, Annex 2 regarding desk review, on-site assessment, performance assessment and regular surveillance apply.
  5. Re-accreditation is valid for 3 years from the date of expiry of the previous accreditation.
  6. In case of a delay in the re-accreditation process, the CDM-AP may recommend to the Board to extend accreditation of a DOE for up to six months. The extension shall be granted only if the DOE has applied for re-accreditation within the specified timeline and is not responsible for the delays in the process of re-accreditation.

A DOE may apply to be accredited for additional sectoral scopes at any time.

Suspension and withdrawal of designation

If, as a result of a review, the Executive Board determines that a designated operational entity no longer meets the accreditation standards, it may recommend to the COP/MOP to suspend or withdraw the entity's designation:

The Executive Board may recommend to the COP/MOP to suspend or withdraw the designation of a designated operational entity if it has carried out a review and found that the entity no longer meets the accreditation standards or applicable provisions in decisions of the COP/MOP. The Executive Board may recommend the suspension or withdrawal of designation only after the designated operational entity has had the possibility of a hearing. The suspension or withdrawal is with immediate effect, on a provisional basis, once the Executive Board has made a recommendation, and remains in effect pending a final decision by the COP/MOP. The affected entity shall be notified, immediately and in writing, once the Executive Board has recommended its suspension or withdrawal. The recommendation by the Executive Board and the decision by the COP/MOP on such a case shall be made public (3/CMP.1, Annex, paragraph 21).

The procedure for the suspension of the accreditation status of a DOE is found in EB 56, Annex 2, B.12:

  1. Prior to any decision on suspension is taken, the DOE is provided an opportunity for a hearing. To facilitate the hearing, the DOE is provided with all relevant information that has led the Board/CDM-AP to consider the suspension of the accreditation.
  2. If the Executive Board decides to suspend totally or partially the accreditation of a DOE, it informs the DOE of the modalities for lifting such a suspension, including:
    1. The non-conformities that must be addressed;
    2. The deadline for implementing corrective actions, not exceeding 12 months;
    3. The nature of assessments to be carried out to check the implementation of the identified corrective actions including, site visits at the central office and any other sites where the DOE has allocated CDM functions, site visit(s) to a project activity(ies) site(s) and/or a document review;
    4. The treatment of the projects under validation/verification by the DOE and projects for which the DOE has submitted requests for registration/issuance.
  3. After receiving confirmation and evidence from the DOE that all corrective actions have been
    implemented, the CDM-AT verifies their implementation in accordance with the directions given by the Executive Board.
  4. If no confirmation of completion of implementation of corrective actions is received from the DOE within the defined deadline, the CDM-AP will either recommend to the Board that the accreditation status of the DOE be withdrawn or its scope of accreditation be reduced.
  5. After verification, the CDM-AT prepares the draft final assessment report within 3 days.
  6. The secretariat submits the draft final report to the DOE for comments. The DOE has 6 days to provide comments on the draft final assessment report.
  7. The CDM-AT has 3 days to complete the final assessment report and submit it to the secretariat.
  8. The CDM-AP will consider the final assessment report of the CDM-AT and submit one of the following recommendations to the Executive Board:
    1. Revoke the suspension of accreditation of the DOE;
    2. Revoke the suspension of accreditation of the DOE and request additional performance assessments or follow-up assessments to be performed to ensure that corrective actions implemented by the DOE have addressed all issues identified;
    3. Maintain the suspension and allow the DOE to implement further corrective actions within a specified timeframe;
    4. Withdraw the accreditation of the DOE (EB 56, Annex 2, paragraph 161).
  9. The recommendation of the CDM-AP and the final assessment report are forwarded to the DOE. If the recommendation is to withdraw the accreditation, the DOE will have an opportunity for a hearing at the Board meeting before any decision is made by the Board.
  10. The Board decides, based on the recommendation of the CDM-AP and, if applicable, the information provided during the hearing by the DOE, to:
    1. Revoke the suspension of accreditation of the DOE;
    2. Revoke the suspension of accreditation of the DOE and request additional assessment activities to be performed (follow-up visit; performance assessments, early surveillance);
    3. Maintain the suspension and allow the DOE to implement further corrective actions within a specified deadline;
    4. Withdraw the accreditation of the DOE on a provisional basis, pending the final decision by the CMP (EB 56, Annex 2, paragraph 163).

Effect of suspension or withdrawal on registered project activities

Upon withdrawal or expiration of accreditation of an entity, the entity shall not continue any work on any CDM project activities, whether its accreditation expired or was withdrawn. The DOE shall inform any affected clients of the withdrawal or expiration of its accreditation status (EB 56, Annex 2, paragraphs 166 and 167).

Expiration or withdrawal of accreditation of a DOE shall not free the DOE from its contractual arrangements with its clients or with the UNFCCC secretariat including costs related to assessments conducted before expiration or withdrawal of accreditation of the DOE (EB 56, Annex 2, paragraph 168).

Registered project activities are not affected by the suspension or withdrawal of a DOE's designation, unless significant deficiencies are identified in the relevant validation or verification and certification report for which that DOE was responsible (3/CMP.1, Annex, paragraph 22). If significant deficiencies are identified:

  • the Executive Board may appoint another DOE to review and correct them, and if excess CERs have been issued, the DOE must replace them (3/CMP.1, Annex, paragraph 22); and
  • the costs of the review will be paid by the DOE whose designation has been withdrawn or suspended (3/CMP.1, Annex, paragraph 24):

Registered project activities shall not be affected by the suspension or withdrawal of designation of a designated operational entity unless significant deficiencies are identified in the relevant validation, verification or certification report for which the entity was responsible. In this case, the Executive Board shall decide whether a different designated operational entity shall be appointed to review, and where appropriate correct, such deficiencies. If such a review reveals that excess CERs were issued, the designated operational entity whose accreditation has been withdrawn or suspended shall acquire and transfer, within 30 days of the end of review, an amount of reduced tonnes of carbon dioxide equivalent equal to the excess CERs issued, as determined by the Executive Board, to a cancellation account maintained in the CDM registry by the Executive Board (3/CMP.1, Annex, paragraph 22).

Any costs relating to the review referred to in paragraph 22 above shall be borne by the designated operational entity whose designation has been withdrawn or suspended (3/CMP.1, Annex, paragraph 24).

Replacement credits provided by a DOE after suspension or withdrawal will be transferred to a cancellation account:

Where the accreditation of a designated operational entity has been withdrawn or suspended, ERUs, CERs, AAUs and/or RMUs equal to the excess CERs issued, as determined by the Executive Board, shall be transferred to a cancellation account in the CDM registry. Such ERUs, CERs, AAUs and RMUs may not be further transferred or used for the purpose of demonstrating the compliance of a Party with its commitment under Article 3, paragraph 1 (3/CMP.1, Annex, Appendix D, paragraph 8).

Project participants in affected projects have the opportunity for a hearing before the Executive Board makes recommendations on the suspension or withdrawal of a DOE's designation:

Any suspension or withdrawal of a designated operational entity that adversely affects registered project activities shall be recommended by the Executive Board only after the affected project participants have had the possibility of a hearing (3/CMP.1, Annex, paragraph 23).

Requirement to notify the secretariat of organisational changes

An applicant entity or DOE is required to notify the secretariat, 3 months before implementation, of any changes in:

  • Legal, commercial or organizational status, e.g. ownership, partnerships;
  • Key professional staff;
  • Management system; or
  • Compliance with accreditation requirements
  • Allocation of CDM functions to non-central sites, including establishment of new sites (EB 56, Annex 2, paragraph 148).

In case of an unexpected significant change, the AE/DOE shall notify the secretariat no later than 10 days after the change took place.

If the AE/DOE does not notify the secretariat of changes within the deadline, the CDM-AP may recommend to the EB that it initiate a spot-check or take any other appropriate action (EB 56, Annex 2, paragraph 150).

Certain changes made by the DOE may have some cost implications, as follows:

  • If notified before CDM-AT members have signed confidentiality and non-disclosure agreements, no additional cost;
  • If notified before the on-site assessment has commenced, the equivalent of 2 days of the standard daily fee for CDM-AT members; and
  • If notified after the start of the on-site assessment, it will be considered a new application and a new non-refundable application fee is payable (EB 56, Annex 2, Appendix 5, paragraph 21).

Relationship between the accreditation process and the new methodology approval process

At EB 7, the Executive Board clarified the relationship between the process of accreditation and designation of DOEs and the approval of new methodologies. The graph describes this relationship (EB 7, Annex 1 ). It describes steps in the process, including timelines, for submitting and approving a new methodology (baseline and/or monitoring). The graph highlights in particular that the witnessing of an applicant entity for validation shall take place simultaneously with the validation of an approved methodology and subsequent registration of the proposed CDM project activity.

The role of the DOE/AE at validation of a proposed methodology is limited to checking whether the documentation is complete.

Two scenarios may arise after approval of a new methodology:

  1. The proposed methodology was accepted without modification. Validation can proceed immediately if all information required for validation is available;
  2. The proposed methodology was modified. Validation only proceeds once
    project participants have adjusted their documentation (dotted line).

Handling of complaints

At EB 56, the Executive Board adopted procedures for handling complaints against AEs/DOEs and handling complaints and disputes from DOEs.

The procedure for handling a complaint against an AE or DOE is set out in EB 56 Annex 2, Appendix 3:

  1. A complainant submits a complaint to the CDM-AP, using the complaint form (CDM-F-CD). A complaint may only be submitted if the complainant has exhausted all possibilities of complaints/disputes/appeal within the DOE.s system. Evidence of that shall be presented among the supporting documentation of the complaint.
  2. The secretariat has 7 days from the receipt of the complaint to request any relevant information or data from the complainant for the initial assessment. Such information shall be submitted within 7 days.
  3. After receipt of the additional documentation, the Secretariat carries out an initial assessment of the complaint.
  4. If the initial assessment reveals that the complaint is not substantiated with appropriate evidence, the secretariat will close the case and inform the complainant.
  5. If the initial assessment reveals that the complaint is substantiated, the secretariat will inform the DOE about the complaint unless it is about a fraud or an unethical behaviour. The secretariat will provide the DOE with the complaint and the supporting documentation received from the complainant. In situations where the complaint relates to fraud or unethical behaviour, the secretariat may conduct an investigation of the complaint without immediately informing the DOE.
  6. The DOE has 7 days from the receipt of the notification of complaint to provide a response to the complaint, including information justifying its opinion/decision and/or behaviour.
  7. Based on the information received from all parties, the secretariat has 7 days to prepare an assessment report for the consideration of the CDM-AP.
  8. The assessment report comprises of a summary of the case with allegations of both parties, an investigation of the alleged facts and a recommendation on whether the complaint is justified or not.
  9. The CDM-AP may decide to conduct an additional assessment, or an additional performance assessment, recommend the conduct of a spot-check, or suspension of the DOE or any other relevant action.

The procedure for handling a complaint or dispute from a DOE is set out in EB 56, Annex 2, Appendix 4:

  1. An AE/DOE submits a complaint using the complaint/dispute form (CDM-F-CD).
  2. The secretariat has seven days from the receipt of the complaint/dispute to request the DOE to submit any relevant information or data for the initial assessment. Such information will be submitted within 7 days by the DOE.
  3. After receipt of the additional documentation, the Secretariat carries out an initial assessment of the complaint.
  4. If the initial assessment reveals that the complaint is not substantiated with appropriate evidence, the secretariat will close the case and inform the DOE.
  5. If the initial assessment reveals that the complaint is substantiated, the secretariat will inform the party against which the complaint was made. In situations where the complaint relates to unethical behaviour, the secretariat may conduct an investigation of the complaint without immediately informing the DOE.
  6. The party against which the complaint was made then has 7 days from the receipt of the notification of complaint to provide a response to the complaint, including information justifying its opinion/decision and/or behaviour.
  7. Based on the information received from all parties, the secretariat has 7 days to prepare an assessment report for the consideration of a complaint/dispute body.
  8. The assessment report comprises of a summary of the case with allegations of both parties, an investigation of the alleged facts and a recommendation on whether the complaint is justified or not.
  9. A complaint/dispute may be considered justified if its treatment reveals, inter alia, that:
    1. The CDM-AP or the secretariat has not complied with the CDM Accreditation Procedure;
    2. The CDM-AT engaged in an inappropriate behaviour;
    3. The DOE disagrees about a non-conformity raised or the validity of a non-closure of a non-conformity.
  10. Both parties to the complaint are informed of the outcome of the assessment and when the complaint/dispute will be considered by the complaint/dispute body.
  11. The complaint/dispute body will be:
    • The CDM-AP in case the complaint/dispute is against the secretariat or a CDM-AT;
    • The Board, if the complaint/dispute is against the CDM-AP.
  12. The complaint/dispute body considers all relevant information to the complaint/dispute including the assessment report prepared by the secretariat and decides on the case.

Liability of DOEs for significant deficiencies in validation or verification reports

At CMP6 in 2010, the CMP requested the EB to adopt and apply a procedure to address significant deficiencies in validation or verification reports. In developing such a procedure, the EB may review and amend the provisions contained in 3/CMP.1, Annex, paragraphs 22-24 regarding:

the suspension of DOEs

the appointment of a second DOE to conduct a review or correct the deficiency;

the 30-day time limit for the cancellation of CERs; and

the liability of DOEs for deficiencies in validation or verification reports (-/CMP.6, paragraphs 25-26).

Related Topics

Designated operational entity (DOE)

Executive Board

CDM Accreditation Panel (CDM-AP)

CDM Assessment Team (CDM-AT)

Suspension and withdrawal of accreditation