CLIMATE FINANCING & RISK GOVERNANCE ASSESSMENT Kingdom of Tonga April 2016 Copyright © 2015 Ministry of Finance and National Planning, Government of Tonga All rights reserved. No part of this publication maybe reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission. Ministry of Finance and National Planning - Government of Tonga Title: Climate Financing and Risk Governance Assessment (CFRGA) Report Acknowledgements The authors of this report would like to extend our deep gratitude to the Ministries, Departments, Organizations, civil society organizations, CROP agencies and others for their time and in sharing invaluable information with us. The team acknowledges the financial and technical support provided by the Australian Government’s Department of Foreign Affairs and Trade (DFAT), Pacific Islands Forum Secretariat (PIFS), UNDP, UNWOMEN and USAID. We would also like to express our appreciation for the inputs from the expert reviewers: Dr. Netatua Pelesikoti, Director Climate Change Division, Secretariat of the Pacific Regional Environment Programme and Ms. Cecilia Aipira, Climate Change and Disaster Risk Reduction Policy Advisor, UNWOMEN. Climate Financing and Risk Governance Assessment | TONGA i CFRGA Team Government Focal Point for CCRGA: Mr Aholotu Palu, Head of Aid Management, Ministry of Finance Team Leader and International CCDRM expert: Dr Robert Kay National Institutional and Local Governance Expert: Mr ‘Inoke Fotu Kupu, Deputy CEO, Local Government and Community Development, Ministry of Internal Affairs, Government of Tonga National Finance Expert: Mr Erling Fitzpatrick Ve’etutu International Finance Expert: Mr Stephen Boland, USAID Adapt-Asia Pacific National CCDRM expert: Mr Sione Fulivai, Senior Climate Finance Officer, Ministry of Meteorology, Energy, Information, Disaster Management, Climate Change and Communications, Government of Tonga (Seconded) International Institutional and Local Governance expert: Mr Bikash Dash International Gender and Social inclusion expert: Ms Philippa Ross, UNWOMEN National Gender and Social Inclusion expert: Ms Polotu Pauga Advisor: Mr Kevin Petrini, Regional Climate Change Specialist in the Pacific, UNDP Advisors: Dr Scott Hook and Mr Exsley Taloiburi, Pacific Islands Forum Secretariat Advisor - Mr Nacanieli Speigth, PRRP Programme Associate, UNDP Country liaison and sustainability considerations: Ms Milika Tuita and Mr Sione Vaka, UNDP Coherence with PRRP Programming: Mr Moortaza Jiwanji, PRRP Programme Manager, UNDP ii Climate Financing and Risk Governance Assessment | TONGA CFRGA team members meeting with Honourable Siaosi Sovaleni, Deputy Prime Minister and Minister of MEIDECC (L-R: Inoke Fotu Kupu, Nacanieli Speigth, Sione Vaka, Exsley Taloiburi, Robert Kay, Honourable Siaosi Sovaleni, Kevin Petrini, Philippa Ross, Erling Ve’etutu, Polotu Paunga, Sione Fulivai, Stephen Boland) Climate Financing and Risk Governance Assessment | TONGA iii Foreword Tonga is ranked as the third most vulnerable country in the world to natural hazards. As a small island developing state on the front line of natural hazards, the additional risks posed by climate change are a critical cause for concern. To help Tonga manage its vulnerability we need to learn more about what disaster management actions we have put in place so far and what else we can do to improve our resilience and to respond to not only natural hazards but to the challenges of climate change. We understand how important it is to develop an integrated approach to managing disasters and climate change issues by bringing resilience dimensions into our broader development efforts. This concept of risk governance is now rapidly emerging in the Pacific region and positions climate change and disaster risk management (CCDRM) at the heart of development. The Kingdom of Tonga, has developed policy and planning instruments for managing disasters and addressing climate change but capacity and resource constraints undermine the delivery of integrated approaches across development sectors. This is why the Government of Tonga has determined that there is a real need for an integrated, comprehensive and whole of government approach for managing risk and addressing community-based issues. Partnering with us is UNDP, who are also working closely with Pacific Islands Forum Secretariat (PIFS), UNWOMEN, Secretariat of the Pacific Regional Environment Program (SPREP), USAID Adapt Asia-Pacific and other partners. Together we implemented a joint project to undertake a Climate Financing and Risk Governance Assessment (CFRGA) to find out our strengths and weaknesses across horizontal and vertical lines of responsibility within our Government. The Kingdom of Tonga’s Ministry of Finance and National Planning (MFNP) is pleased to present the findings of this assessment to help our country respond to the challenges ahead of us in managing and accessing climate change funding and establish resilience within our community in the best way possible. Dr. the Hon. ‘Aisake Valu Eke MINISTER FOR FINANCE AND National PLANNING Minister of Finance and National Planning iv Climate Financing and Risk Governance Assessment | TONGA Contents Acknowledgements i CFRGA Team ii Foreword iv Contents v Abbreviations ix Executive Summary xi 1 INTRODUCTION 1 2 RISK PROFILING 3 2.1 Tonga’s climate change and geohazard exposure and vulnerability profile 4 2.1.1 Geological hazards 5 2.1.2 Weather and climate hazards 7 2.1.3 Climate change hazards 8 2.2 Exposure 10 2.3 Vulnerability 11 2.3.1 Vulnerable socio-economic sectors in Tonga 11 2.3.2 Vulnerable people in Tonga 14 2.4 Conclusion 15 3 POLICY ANALYSIS 17 3.1 National policy framework 17 3.1.1 Tonga Strategic Development Framework I & II 18 3.1.2 National CCDRM Framework 20 3.1.3 Sectoral policies and plans 23 3.2 Sub-national policy framework 27 3.3 Tonga’s international position on CCDRM 28 3.4 Conclusions 29 4 INSTITUTIONAL ANALYSIS 31 4.1 Institutions and structures for CCDRM 31 4.2 Institutions and planning processes 34 4.3 CCDRM Human resource management and development 35 4.3.1 CCDRM Human Resource Management 35 4.3.2 CCDRM human resource development 37 Climate Financing and Risk Governance Assessment | TONGA v Contents 4.4 Local government 38 4.4.1 National management of local government 38 4.4.2 Sub-national government structure 39 4.4.3 District development committees and sub-national planning and budgeting process 40 5 Public FinAnciAl MAnAgEMEnt (PFM) AnAlysis 45 5.1 Background – the importance of PFM to CCDRM finance 45 5.1.1 Country systems 46 5.2 The PFM system in Tonga 47 5.2.1 Credibility of the budget 47 5.2.2 Comprehensiveness and transparency 49 5.2.3 Policy based budgeting 49 5.2.4 Predictability and control in budget execution 51 5.2.5 Accounting, recording and reporting 52 5.2.6 External scrutiny and audit 53 5.3 PFM system in times of emergency 54 5.3.1 Emergency procurement 55 5.4 Conclusions 57 6 CliMAtE cHAngE AnD DisAstEr risk rEDuction ActiVitiEs AnD ExPEnDiturE 59 6.1 Methodology 59 6.1.1 Funding source methodology 60 6.1.2 Budget expenditure methodology 60 6.2 Funding source analysis 60 6.2.1 Overall development assistance – implementing entities 61 6.3 Analysis of expenditure 68 6.4 Flows of CCDRM expenditures 72 6.5 Other CCDRM policies and practices 73 6.5.1 Revenue policies 73 6.5.2 Public private partnerships 74 6.5.3 Remittances 75 6.6 Conclusions 76 vi Climate Financing and Risk Governance Assessment | TONGA 7 GenDEr AnD sociAl inclusion AnAlysis 79 7.1 The gender imperative 79 7.1.1 Gender on global climate finance structures 80 7.1.2 Gender mainstreaming good practice 81 7.2 Gender and social inclusion aspects of policies and plans in Tonga 82 7.2.1 National plans 82 7.2.2 Corporate plans 85 7.3 Opportunities for gender integration into CCDRM 85 7.3.1 Gender mainstreaming in projects analysis 85 7.3.2 Institutional gender mainstreaming structures 88 7.3.3 Civil society-government coordination and communication 90 7.3.4 The role of development partners in gender and social inclusion 92 7.4 Conclusions 93 8 DEVEloPMEnt EFFEctiVEnEss 95 8.1 Introduction 95 8.2 Ownership and leadership 96 8.3 Alignment and harmonization 98 8.4 Managing for results and mutual accountability 100 8.5 Conclusions 102 9 Options to bEttEr AccEss cliMAtE cHAngE AnD DisAstEr risk MAnAgEMEnt FunDing 103 9.1 Financing options 103 9.1.1 What are the climate financing options 104 9.1.2 What are the disaster risk management financing options 108 9.1.3 Emerging and underutilized funding sources 109 9.1.4 Observations and recommendations 111 9.2 Capacity constraints 112 Climate Financing and Risk Governance Assessment | TONGA vii Contents AnnExEs: Annex A Methodology and Definitions 115 Annex B References 119 Annex C Consultation List 123 Annex D Capacity Assessment Methods and Assumptions 132 Annex E Financial Assessments Methods and Assumptions (including Climate Change program Budget weightings and Climate Change related projects identified) 134 Annex F Structure of the Tonga Public Sector 146 Annex G Implementation Plan 148 viii Climate Financing and Risk Governance Assessment | TONGA Abbreviations ADB Asian Development Bank ADF Asia Development Fund AF Adaptation Fund AOSIS Alliance of Small Island States CCA Climate Change Adaptation CCCC Climate Change Cabinet Committee CCDRM Climate Change and Disaster Risk Management CCDRR Climate Change and Disaster Risk Reduction CCM Climate Change Mitigation CCTF