TREATIES AND OTHER INTERNATIONAL ACTS SERIES 06-1119 

________________________________________________________________________ 

FINANCE 

Tropical Forest 

Conservation 

 Agreement between the 

UNITED STATES OF AMERICA 

and BOTSWANA 

Signed at Gaborone October 5, 2006 

 

 with 

 

Annex 
 NOTE BY THE DEPARTMENT OF STATE 

 Pursuant to Public Law 89—497, approved July 8, 1966 

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued 

under the authority of the Secretary of State shall be competent 

 evidence . . . of the treaties, international agreements other than 

treaties, and proclamations by the President of such treaties and 

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime 

jurisdiction, and in all the tribunals and public offices of the 

United States, and of the several States, without any further proof 

or authentication thereof.” 
BOTSWANA 

Finance: Tropical Forest Conservation 

 Agreement signed at Gaborone October 5, 2006; 

 Entered into force November 19, 2006. 

 With annex. 
06 - 311

AGREEMENT BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA

AND

THE GOVERNMENT OF THE REPUBLIC OF BOTSWANA

CONCERNING THE ESTABLISHMENT OF A

TROPICAL FOREST CONSERVATION FUND AND A

TROPICAL FOREST CONSERVATION BOARD

The Government of the United States of America (U.S. Government) and the

Government of the Republic of Botswana (Government of Botswana), hereinafter known

as the Parties,

Seeking to facilitate the conservation, protection, restoration, and sustainable

management of tropical forests, which provide a wide range of benefits to humankind,

Acknowledging the work and contributions of the Government of the Botswana

toward forest conservation under its national Forest Act and approved National Forest

Policy;

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

Recognizing that 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 conservation of tropical forests,

Further recognizing that economic benefits to local communities of sustainable

uses of tropical forests are critical to the protection and sustainable management 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 Republic of Botswana Regarding the

Reduction of Certain Debts Owed to the Government of the United States and its

Agencies, hereinafter known as the "Debt Reduction Agreement," which reduces certain

debts owed the U.S. Government through the exchange of old obligations for new

obligations, known as the New Tropical Forest Conservation Act (New TFCA)

Obligations,

Have agreed as follows:
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Article I

PURPOSE

The purpose of this Agreement is to provide for the establishment of a Tropical Forest

Conservation Fund and an administering Tropical Forest Conservation Board to promote

activities designed to conserve, maintain and restore the forests of Botswana. The

agreement will be implemented in Botswana in accordance with the Forest Act and the

National Forest Policy of Botswana.

Article II

TROPICAL FOREST CONSERVATION FUND

1. Within eight months of the signing of this Agreement, the Government of

Botswana shall establish a Tropical Forest Conservation Fund, hereinafter known

as the "Fund," in accordance with the laws of Botswana. The Fund shall be

administered by the Board established pursuant to Article III of this Agreement.

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 the laws of the Parties.

2. The Fund shall consist of monies, in the form of local currencies or other

currencies, as follows:

2.1 Monies appropriated by the Parliament of the Government of Botswana for

this purpose;

2.2 Deposits made pursuant to Article II, paragraph 3 of the Debt Reduction

Agreement; and

2.3 Grants and contributions from other sources.

3. The amounts deposited in the Fund shall be subject to the provisions of this

Agreement. Deposits in the Fund made pursuant to Article II, paragraph 3 of the

Debt Reduction Agreement shall be the property of the Government of Botswana

until they are disbursed pursuant to the procedures set forth in Article VI of this

Agreement. The Board and the Fiscal Agent shall develop a provision to be

included in each Grant Agreement approved pursuant to Article IV, paragraph 2 of

this Agreement to address the recovery of funds misspent or misused by, and the

return of any unused grant funds held by a grantee.

4. Within eight months of the signing of this Agreement, the Government of

Botswana shall appoint an accounting officer who shall act as Fiscal Agent for the

Fund charged with monitoring payments into the Fund and disbursement and

investment of the monies in the Fund. The Botswana Government Instructions

appointing the accounting officer shall be reviewed by the U.S. Government prior

to finalization. The Instructions shall be concluded within eight months of the

signing of this Agreement and shall specify the subordinate relationship of the

accounting officer to the Board established under Article III of this Agreement and
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shall also specify that the accounting officer shall take direction only from the

Board. The Fiscal Agent is responsible for promptly notifying the Board in writing

when monies are deposited in the Fund pursuant to paragraph 2 of this Article, or if

a deposit is overdue.

5. Monies in the Fund shall be invested until disbursed, with every effort made to

ensure that such investments yield a positive real rate within acceptable limits of

risk in accord with sound investment practices. To accomplish this goal, the

Parties may jointly request the conversion of all or part of the monies in the Fund

into U.S. dollars or other hard currencies for investment purposes. Returns on

investment shall be deposited by the Fiscal Agent in the Fund until disbursed,

pursuant to the procedures set forth in Article VI of this Agreement.

Article III

ESTABLISHMENT AND COMPOSITION OF THE

TROPICAL FOREST CONSERVATION BOARD

1. Within eight months of the signing of this Agreement, the Government of

Botswana shall establish, in accordance with the Companies Act, in consultation

with the U.S. Government and domestic Botswana nongovernmental entities with

an interest in forests, a Tropical Forest Conservation Board, hereinafter known as

the "Board," to administer the Fund. The Board shall have the authorities and

functions conferred on it by this Agreement and implemented through the requisite

documents of incorporation under Botswana law, which shall be reviewed by the

US Government prior to finalization. The Board shall be discrete and separate

from any existing Board, Commission, Foundation, or other entity in Botswana.

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

2.1 Two officials of the U.S. government appointed by the U.S. Government;

2.2 Two officials of the Government of Botswana appointed by the Minister

of Environment, Wildlife and Tourism; and

2.3 Five representatives of a broad range of:

2.3.1 environmental nongovernmental organizations of, or active in,

Botswana;

2.3.2 local community development nongovernmental organizations of

Botswana; and

2.3.3 scientific, academic or forestry organizations of Botswana.

3. The representatives under paragraph 2.3 of this Article shall constitute a majority

of the members of the Board. They shall be appointed to the Board by the

Minister of Environment, Wildlife and Tourism of the Government of Botswana

in consultation with a range of domestic nongovernmental entities in Botswana

and the U.S. Government.
4

4. Board members named pursuant to paragraphs 2.1 and 2.2 above shall serve ad

honorem and at the discretion of the naming Party. Board members described in

paragraph 2.3 above shall serve ad honorem, except that the administrative expenses

of such Board members may be paid as provided in Article IV, paragraph 9 of this

Agreement. Board members described in paragraph 2.3 above shall serve in their

expert capacity for a three year term, and may be removed prior to the end of their

term only for malfeasance. Any such member of the Board may serve for a

consecutive term if so recommended by the Board and agreed by the Parties.

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 or any person in his

family, for an organization which employs the member or any person in his family, or

for an organization in which the member or any person in his family has an affiliation

or a direct financial interest.

Article IV

FUNCTIONS OF THE BOARD

1. The Board shall be responsible for administration and management of the Fund, for

disbursements of grants from the Fund to support eligible activities, and for

oversight of activities financed from the Fund, pursuant to this Agreement. The

Board shall have full legal competence to carry out the functions assigned to it in

this Agreement.

2. With respect to the management of the Fund, the Board shall:

2.1 Issue and widely disseminate a public announcement on the call for grant

applications, which announcement shall state the purpose of the Fund,

eligible activities and eligible entities in accordance with Article V of this

Agreement, the criteria for the selection of grant recipients, the schedule of

the grants process, and any other requirements established by the Board for

the award of grants from the Fund;

2.2 Receive applications for grants from entities described in Article V,

paragraph 3 of this Agreement and award grants consistent with Article V of

this Agreement on the basis of an evaluation of applications on their merits;

2.3 Publicly announce grants awarded by the Board;

2.4 Develop with each grant recipient a Grant Agreement which shall include

provisions on, inter alia, receipt and use of funds, audit and reporting

requirements, improper use of funds and subsequent remedies,

representations and warranties, and intellectual property.

2.5 Within six months of the Board's establishment, develop and submit to the

Parties for their approval a long-term strategic plan for the operation of the
5

Fund, including an annual budget showing prospective activities and

expected administrative and program costs;

2.6 Take steps to meet the relevant "performance criteria" set forth in the

"TFCA Performance Evaluation", the current form of which is contained in

the Annex to this Agreement, recognizing the document may be amended

from time to time;

2.7 Within 18 months after the signing of this Agreement, and on an annual

basis thereafter, submit to the Parties a completed "TFCA Performance

Evaluation" document, which shall include as annexes:

2.7.1 A report on grant activities for the previous year, including multiyear activities funded by the Board, which shall include

information regarding the grants awarded, grant recipients, grant

amounts, activities funded, and status of grant implementation, as

well as information on the status of audits of randomly selected

grants; and

2.7.2 A financial audit conducted in accordance with generally accepted

international accounting standards by an independent auditor,

covering the previous year.

2.8 Hire an Executive Director to coordinate and implement, 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. A proposed grant which would over the project life require in excess of $100,000

to be disbursed from the Fund shall be submitted to the members of the Board appointed

under Article 111.2.1 and 111.2.2 for approval. If the two members of the Board appointed

under Article 111.2.1 or the two members of the Board appointed under Article 111.2.2

disapprove such a grant, those members must notify the rest of the Board of their

disapproval, in which case the Board shall not award the proposed grant.

4. The Board shall adopt, by majority vote, guidelines, internal policies and

procedures for its operation, which shall be subject to the approval of the Parties. 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

6. The Board shall establish and make public selection criteria for awarding grants,

which should include criteria for evaluating the merits of application(s) and the prospects

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 require periodic progress reports from the grantee to the Board. Such

reports shall review all components essential to the successful achievement of the goals

of the activity.

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

9. The Board may draw sums from the Fund necessary to pay for reasonable

administrative expenses of the Board, including the audit required pursuant to paragraph

2.7.2 of this Article. Board members appointed under Article III, paragraph 2.3 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,

paragraphs 2.1 and 2.2 of this Agreement shall be borne by the Party which that member

represents. Administrative expenses shall not exceed a ceiling established by the Parties'

representatives on the Board, taking into account anticipated administrative expenses and

funds available in the Fund. The Parties' representatives on the Board shall review and

adjust, as appropriate, the ceiling for administrative expenses on an annual basis.

10. The Board's written policies, 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 to award each grant, including

an explanation of the basis of the award decision. The Board shall make available for

easy public inspection, such as by the Internet where appropriate, its written policies,

operating procedures, summaries of proceedings, and explanations of award decisions.

Upon request, authorities of either Party shall be granted access to all Board documents,

including minutes of meetings, books, records, and reports.

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 forest areas through one or more of the following

activities and in a manner consistent with the Government of Botswana's Forest

Act and approved National Forest Policy:

1.1 Establishment, restoration, protection and maintenance of parks, protected

areas, and reserves. Such activities could include, for example,

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.
7

1.2 Development and implementation of scientifically sound systems of natural

resource management including land and ecosystem management practices.

Such activities could include, for example, development and implementation

of scientifically sound systems of forest land and forest resources

management; forest resources assessment and inventory; land and resource

use monitoring and evaluation; implementation of criteria and indicators for

sustainable forest management; development and implementation of forest

management information systems; development and implementation of

watershed ecosystem management and community based forest management

strategies; adoption of research-based forest technologies; plantation

establishment on degraded lands; natural forest regeneration, rehabilitation

and management; or testing and application of silvicultural techniques.

1.3 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.

1.4 Restoration, protection, or sustainable use of diverse animal and plant

species. Such activities could include, for example, rehabilitation of

degraded forests; sustainable fishing and animal fanning; improvement of

forest health and vitality and relevant research and development; efforts to

assess and address problems of forest law enforcement and associated illegal

practices.

1.5 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.

1.6 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 environmentally

friendly community-based and women's enterprises involving wood or nonwood products; application of low impact logging practices; establishment

of agroforestry systems; or development of multiple-use tree species outside

natural forests.

2. The Board may establish priorities for financing among the eligible activities as it

deems appropriate;

3. Entities in Botswana which shall be eligible to receive grants from the Fund are:
8

3.1 Nongovernmental environmental, forestry, conservation, and indigenous

people organizations of, or active in, Botswana, including those

organizations involved in development, education, science research, or

forest management;

3.2 Other appropriate local or regional entities of, or active in, Botswana; and

3.3 In exceptional circumstances, the Government of Botswana.

4. In providing grants, priority shall be given to projects that are run by local

nongovernmental organizations and other private entities and that involve local

communities in their planning and execution.

5. Grants shall be awarded within the financial capacity of the Board and strictly on

the merits of proposals presented to the Board.

Article VI

DISBURSEMENT OF FUNDS

1. The Board shall instruct the Fiscal Agent to disburse grant monies from the Fund

to entities selected to receive grants pursuant to Article V of this Agreement. All

disbursements shall be made pursuant to a Grant Agreement, as specified in

Article IV, paragraph 2.4 of this Agreement.

2. The Fiscal Agent 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 between the Fiscal Agent's receipt of a direction for

disbursement from the Board and the actual disbursement of funds to a grant

recipient.

Article VII

RESOLUTION AND REVIEW OF DISPUTES

1. Upon the written request of either Party, the Parties shall consult each other

concerning the implementation or interpretation of this Agreement. These

consultations shall be completed within 60 Business 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,

Wildlife and Tourism of the Government of Botswana. Unless the U.S.

Government otherwise notifies the Government of Botswana, the Assistant

Secretary of State for Oceans and International Environmental and Scientific

Affairs shall be the contact point in the Department of State. Unless the

Government of Botswana otherwise notifies the U.S. Government, the Director of
9

the Department of Forestry and Range Resources shall be the contact point in the

Ministry of Environment, Wildlife and Tourism.

3. Either Party may request consultations with the Board and with the other Party

after reviewing the Boards reports and audits presented pursuant to Article IV of

this Agreement. Such request shall be made in writing. These consultations shall

be completed within 60 Business Days after a request for consultations is received

from the other Party, unless the period of consultation is extended by mutual

agreement of the Parties.

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 of this Agreement has not been satisfactorily resolved, such Party

may notify the other Party in writing. •

2. Notwithstanding any other provision of this Agreement, the US Government

reserves the right to direct the Board in writing to direct the Fiscal Agent to suspend

disbursements from the Fund under Article VI of monies in the fund resulting from

payments on the New TFCA Obligations under the Debt Reduction Agreement, 30

days after consultations with Government of Botswana if the Government of

Botswana fails to take action to rectify the situation to the satisfaction of both

Parties in the event that:

2.1 The Board is operating under circumstances of undue influence and

interference from the Government of Botswana; or

2.2 The Board lacks the appropriate authority to effectively implement the terms

of this Agreement; or

2.3 Botswana ceases to meet the U.S. Government program eligibility

requirements found at 22 U.S.C. Sec. 2431c.

3. Suspension of disbursements pursuant to paragraph 2 of this Article shall mean that

no further approval of grants shall be undertaken until the Parties have jointly

agreed to resume such activity. However, disbursements pursuant to previouslyapproved Grant Agreements shall proceed unless the specific Grant Agreement is

suspended pursuant to the terms of that Grant Agreement.

4. Should the Parties jointly certify in writing to the Board that the manner in which a

Grant Agreement was awarded was inconsistent with Articles III, IV or V of this

Agreement or the operating procedures of the Board, the Parties may require the

Board to suspend disbursements under that Grant Agreement. Should

disbursements be so suspended, no further approval of any grants shall be
10

undertaken until both Parties agree to resume the receipt, review and award of

grants

5. If disbursements have not been suspended within seven (7) Business Days of the

written notification referred to paragraph 2 above, ("the Notification Period"), the

Government of Botswana agrees that it will take any and all actions necessary to

freeze the Fund until both Parties confirm in writing that the issues that led to

freezing of those amounts have been resolved.

Article IX

TERMINATION

1. The Agreement shall automatically terminate in the event that the

Debt Reduction Agreement automatically terminates under Article VII, paragraph

2(a) of the Debt Reduction Agreement.

2. The Agreement may be terminated by either Party upon six months'

written notice if: (i) the Debt Reduction Agreement is terminated under Article

VII, paragraph 2(b) of the Debt Reduction Agreement, and (ii) all funds resulting

from the Payments in accordance with the Debt Reduction Agreement have been

expended.

3. The Agreement may also be terminated by either Party pursuant to the

process set forth in Article VII, paragraph 3 of the Debt Reduction Agreement. In

such event, no disbursements from the Fund shall occur after a Party has given

written notice to terminate the Agreement, unless the Parties expressly agree in

writing to permit disbursements pursuant to specific Grant Agreements concluded

before the notice to terminate has been given. The termination of the Agreement

shall not prevent grantees' expenditure of funds that were disbursed before the

notice to terminate was given.

4. Upon termination under either paragraphs 2 or 3 of this Article IX, the provisions

of this Agreement shall continue to apply for the purpose of completion of any

previously-authorized grants.

Article X

ENTRY INTO FORCE, AMENDMENT AND OTHER ARRANGEMENTS

1. This Agreement shall enter into force 45 calendar days after signature and shall

remain in force unless terminated by the Parties in accordance with Article IX of

this Agreement.

2. This Agreement may be amended by written agreement of the Parties.
11

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 Gaborone, Botswana, this 5th day of October 2006, in duplicate, in the English

language.

FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT OF

UNITED STATES OF AMERICA THE REPUBLIC OF BOTSWANA
TFCA Evaluation Sheet

Category Function Criteria

Fund Comments

(w/ supporting material

citation as appropriate) Rating

definition: "OC/B and its implementor" = The Oversight Committee/

Board and its Fund Administrator or Office of Exectutive Director.

Excellent (4); Acceptable

(3); Needs Improvement

(2); Unacceptable (I); NA

plementation

),, , v,- or Azreentents

A.1.1 The OC/B and its implementor become operational within one year

 from the signing of the agreements. _

A.1.2 The Fund, or other implementor of the TFCA agreement, is in

compliance with all articles of the agreements, including the legal registry

of the appropriate implementing bodies.

A.1.3 The Fund, or other implementor of the TFCA agreement, completes,

and makes accessible, annual audits, plans and reports as may be required

in the agreements.

B. Governance Planning B.1.1 Within one year of January I, 2005 or within one year of becoming

operational, the OC/B has established a written strategic plan that includes

(a) specific, key objectives, (b) a list, in order of importance, of

conservation and funding priorities in order to meet those objectives, and

(c) target dates for completion of objectives.

B.1.2 The established goals & objectives complement plans/programs of

others (eg. national environmental plans, donors, swap partners).

B.1.3 The OC/B, or its implementors, have establised all internal

operational policies and procedures in accordance with normal business

standards.

Implementation B.2.1 The OCIE) meets in accordance with the bilateral agreement with

achieves a quorum at these meetings.

( info should include no. of

meetings, no. of meetings at

which quorum was achieved)

Monitoring B.3.1 The OC/B evaluates, on an annual basis, progress toward the key

objectives specified in the strategic plan, and implements any changes

judged necessary to remedy deficiencies in meeting the key objectives.

B.3.2 Within one year of January 1, 2005 or within one year of becoming

operational, the OC/B has established and implemented a monitoring and

evaluation plan for determining the conservation impact of funded

projects. OC/B monitors assessment of impact of projects.

(please provide details of

monitoring and evaluation

methodology, percentage of

projects undergoing M&E;

number of visits per project;

results of monitoring,

administrator/OC/B corrective

actions as annlicahlol.
TFCA Evaluation Sheet

B.3.3 The OC/B conducts an annual performance review of institutional

management (itself, the implementors, and, if applicable, the Trustee or

Investment Manager).

C. Gtant •

Management

Planning C.1.1 The percentage of total funds paid into the Foundation or Fund (or

other vehicle established to receive payments resulting from the Forest

Conservation Agreement) disbursed as grants annually, is at a reasonable

level.

Implementation C.2.1 Request for Applications (RFAs), or other grant soliciation

mechanisms used, are undertaken on a schedule consistent with an OC/B

approved expenditure plan, if applicable, and widely publicized (if

C.2.2 Grant processing, including fund disbursement periods, is

maintained within reasonable targeted timeframes.

Monitoring C.3.1 Grant agreements require reporting on the conservation impact of

project.

C.3.2 The OC/B has a policy on the need for, and the frequency of,

financial audits of grant recipients.

C.3.3 Implementor ensures that all necessary grant recipient financial

audits and/or impact reports are submitted as required by agreements.

C.3.4 The OC/B, through its implementors, ensures periodic on-site

reviews of grant projects.

(e.g. number of active projects,

number of active projects

receiving site inspections, and

number of site inspections per

project).

D. Financial

Management

Planning D.1.1 The OC/B has established a financial plan (complete with budgets,

forecasts of income and expenditures).

D.1.2 As appropriate, the OC/B has established a written investment

policy (guidance for the implementor or fund manager).

Implementation D.2.1 The administrative costs were kept within the limits established by

the bilateral agreement or its amendments during the last fiscal year.

D.2.2 The OC/13 has established, as appropriate, in-house or outsourced

investment monitoring capabilities (separate from the Investment

Manager).

D.2.3 Assuming fund sustainability beyond the life of the TFCA

agreement is an objective, the fund has diversified its sources of revenue

(fund raising).