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 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 34, Annex 1.

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.

This process is illustrated in the diagram below:

The accreditation procedure in EB 34 Annex 1 is Version 8, and replaces earlier guidance contained in EB 5 Annex 2, EB 7 Annex 2, EB 23 Annex 1, EB 26 Annex 1, EB 27 Annex 1, EB 29 Annex 1 and EB 32 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.

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:

Accredit operational entities which meet the accreditation standards contained in appendix A below;

Recommend the designation of operational entities to the COP/MOP;

Maintain a publicly available list of all designated operational entities;

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;

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 34, Annex 1, paragraph 3:

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

The COP/MOP designates operational entities based on a recommendation by the EB.

The EB takes the decision whether or not to accredit an AE and recommend it to the COP/MOP for designation.

The CDM accreditation panel (CDM-AP) is responsible for preparing a recommendation to the EB regarding the accreditation of an AE based on assessment work conducted by a CDM assessment team (CDM-AT). The CDM-AP is also responsible for preparing recommendations regarding unscheduled surveillance, re-accreditation and accreditation for additional sectoral scope(s). The CDM-AP provides guidance to and approves the work plan of each CDM-AT.

A CDM assessment team (CDM-AT), under the guidance of the CDM-AP, undertakes the detailed assessment of an AE and/or DOE, identifies non-conformities and reports to the CDM-AP. A CDM-AT shall possess the necessary competencies required to undertake the assessment activity.

The secretariat supports the implementation of the CDM accreditation procedure.

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:

Be a legal entity (either a domestic legal entity or an international organization) and provide documentation of this status;

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;

Have the financial stability, insurance coverage and resources required for its activities;

Have sufficient arrangements to cover legal and financial liabilities arising from its activities;

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;

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:

The modalities and procedures and guidelines for the operation of the CDM, and relevant decisions of the COP/MOP and of the Executive Board;

Issues, in particular environmental, relevant to validation, verification and certification of CDM project activities, as appropriate;

The technical aspects of CDM project activities relevant to environmental issues, including expertise in the setting of baselines and monitoring of emissions;

Relevant environmental auditing requirements and methodologies;

Methodologies for accounting of anthropogenic emissions by sources;

Regional and sectoral aspects;

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:

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;

An organization chart showing lines of authority, responsibility and allocation of functions stemming from senior management;

Its quality assurance policy and procedures;

Administrative procedures, including document control;

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;

Its procedures for handling complaints, appeals and disputes;

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:

Work in a credible, independent, non-discriminatory and transparent manner, complying with applicable national law and meeting, in particular, the following requirements:

An applicant operational entity shall have a documented structure, which safeguards impartiality, including provisions to ensure impartiality of its operations.

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;

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).

Scope of accreditation

The 'scope of accreditation' is comprised of both functions (validation and verification/certification) and sectoral scopes. The scope of functions limits the work that a DOE may undertake in validation or verification/certification, while the sectoral scope(s) identifies the sector within which the DOE may undertake those activities (EB 34, Annex 1, A.1, paragraph 6).

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)

Phasing of accreditation

The accreditation of an operational entity may be undertaken in phases in relation to functions and sectoral scopes (EB 34, Annex 1, A.2, paragraph 7). Once an applicant entity is accredited for one function (e.g. verification) for one group of sectoral scopes, it may be accredited for that same group of scopes in the other function (e.g. validation) by receiving accreditation for that other function in another group. At the same time, the applicant entity will receive accreditation for the second function in the first sectoral group.

For example, an applicant entity, which is accredited to perform validation in Group A (of sectoral scopes) and verification in Group B, is automatically accredited to perform both validation and verification in both Groups (EB 34, Annex 1, Appendix 6).

Applying for accreditation in an additional sectoral scope

To apply to be accredited for an additional sectoral scope, a DOE must follow the standard application procedure for accreditation. At the same time, a DOE may apply to be reaccredited for the original sectoral scope for which it was accredited, thereby allowing the DOE to streamline its reaccreditation schedule and reduce costs (EB 34, Annex 1, B.8, paragraph 109-110).

The Executive Board has established a list of sectoral scopes for accreditation, available electronically on the UNFCCC CDM website ( (EB 34, Annex 1, B.1, paragraph 10; EB 6, paragraph 2(b)) . Both the CDM-AP and an applicant entity or DOE may add to this list of sectoral scopes (EB 34, Annex 1, A.2, paragraph 11-12).

Adding a new sectoral scope

The procedure by which an applicant entity may apply for a new sectoral scope is set out in EB 34, Annex 1, A.2. The applicant entity submits a brief description of the proposed scope, which is then considered by the CDM-AP. The CDM-AP may either accept the proposed scope without modifications, in which case the new scope will be added to the list of sectoral scopes, or will modify an existing scope to take the new scope into account. The amended scope will then replace the old scope on the list of sectoral scopes.

Accreditation and designation process

The accreditation procedure is set out in detail in EB 34, Annex 1, B.1, paragraph 22:

The accreditation procedure comprises the following main steps:

The application for accreditation by an entity;

The preliminary consideration of the application file by the CDM-AP;

The desk review by a CDM-AT of the documentation provided by the AE;

On-site assessment by the CDM-AT on the premises of the AE;

A number of witnessing activities by the CDM-AT as requested by the CDM-AP, to assess whether the AE can perform validation and verification/certification tasks as a DOE in the scope(s) of accreditation for which it has applied for;

The reporting of the CDM-AT to the CDM-AP;

The recommendation on accreditation by the CDM-AP to the EB;

The decision by the EB on accreditation and, therefore, recommendation for designation to the COP/MOP (EB 34, Annex 1, paragraph 22).

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

Step (a): Application for accreditation

In order to apply for accreditation, an entity must:

submit a completed application form (F-CDM-A) and related application documents (set out in EB 34, Annex 1, Appendix 1) to the secretariat of the CDM Executive Board (EB 34, Annex 1, paragraph 23). 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 a non-refundable application fee (EB 34, Annex 1, paragraph 24). The application fee is currently US$15,000 (EB 4, paragraph 2(8)), but application entities from non-Annex I Parties may pay 50% of this fee if they are to pay the full fee at application (EB 6, paragraph 3(f)). However, if a new sectoral scope is added to the list of sectoral scopes, DOEs and applicant entities may apply within 6 months to be accredited for this sectoral scope without paying an application fee (EB 34, Annex 1, A.2, paragraph 20; EB 13, paragraph 9(a)).

The secretariat will check that all documents are complete and shall inform the entity is any information is missing (EB 34, Annex 1, paragraph 25). If there is a change to any of the information submitted by the applicant entity, it must inform the CDM Accreditation Panel and pay any costs associated with the change (EB 34, Annex 1, B.1, paragraph 26). If additional work by the CDM-AT or CDM-AP is required as a result of notified changes, 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 on-site assessment has commenced, 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 a new application and a new non-refundable application fee is payable (EB 34, Annex 1, Appendix 3, paragraph 18).

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, and such comments will be made public by the secretariat immediately following the 15 day period (EB 34, Annex 1, B.1, paragraph 27).

The secretariat will then prepare an application file for the CDM Accreditation Panel, including all application documents and suggestions with regard to possible candidates for the CDM Assessment Team and a draft work plan (EB 34, Annex 1, B.1, paragraph 28).

Step (b): Preliminary consideration by the CDM-AP

Once the CDM Accreditation Panel has received the application file, it will conduct a preliminary review of the documentation and will select the CDM Assessment Team and team leader (EB 34, Annex 1, B.1, paragraph 30). 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 in the case of a conflict of interest (EB 34, Annex 1, B.1, paragraph 31). Members of the CDM Assessment Team are required to sign a confidentiality and non-disclosure agreement using F-CDM-CA (EB 34, Annex 1, B.1, paragraph 32).

Steps (c) - (e): Assessment process

The assessment process, carried out by the CDM Assessment Team, consists of three main elements, as set out in EB 34, Annex 1, paragraph 4 - a desk review, an on-site assessment and the witnessing of the performance of tasks within the scope of accreditation by the applicant entity:

Desk review by a CDM-AT of the documentation submitted by an AE against the CDM accreditation requirements;
On-site assessment on the premises of the AE by a CDM-AT. The purpose of this assessment is to confirm whether the operational capability of the AE meets the requirements provided in the documentation provided by the AE. The assessment is to provide the assurance that the AE has the capacity to perform the tasks related to the "sectoral scope(s)" of accreditation for which it has applied. Only those premises of an AE where the on-site assessment took place shall receive the accreditation/designation as an operational entity. Any other part of that entity is not accredited/designated.
Witnessing by the CDM-AT of the performance of tasks by an applicant entity which relate to the scope of accreditation for which it has applied (EB 34, Annex 1, paragraph 4).

Desk review

The desk review process is further described in EB 34, Annex B.2. Once the CDM Accreditation Panel has provided the CDM Assessment Team with the application file, the results of its preliminary review and the revised draft work plan, the CDM Assessment Team will undertake a desk review and prepare the desk review report (F-CDM-DOR).

The CDM Assessment Team will identify and request any additional documentation that is required prior to commencing the on-site assessment using the form FCDM-Addoc, and the applicant entity must provide this documentation within 14 working days. If it does not, then the time allocated for the on-site assessment will be extended to allow for the assessment of the missing documentation on-site. Any additional cost relating to this extension will be borne by the applicant entity.

The team leader will have 30 days to complete the desk review report, after which it will be made available to the applicant entity.

On-site assessment

The on-site assessment process is further described in EB 34, Annex B.3. Once the desk review process has been completed, the team leader (assisted by the secretariat) coordinates the date for the on-site assessment. The assessment process involves the following steps:

The team leader organises an opening meeting, attended by the CDM-AT and the applicant entity's management, where the CDM-AT explains the activities involved in the assessment.
The CDM-AT conducts an on-site assessment of the operational capability of the applicant entity against:
1. The requirements contained in 3/CMP.1, Annex, Appendix A;
2. The requirements for the particular sectoral scopes for which the applicant entity has applied; and
3. Any relevant decisions and clarifications issued by the Executive Board and the CDM-AP.
The team leader organises a closing meeting, attended by the CDM-AT and the applicant entity's management, where the CDM-AT informs the applicant entity of the outcome of its assessment.
Within 15 working days, the CDM-AT prepares the draft on-site assessment report (F-CDM-DOR) and provides it to the applicant entity.
Within 30 days, the applicant entity must identify corrective actions to resolve non-conformities and develop a timeframe for their resolution (F-CDM-NC) or withdraw its application. Corrective actions must be completed within 6 months or the application for accreditation will be automatically rejected.
Within 30 days, the CDM-AT verifies of the implementation of corrective actions undertaken by the applicant entity. If the corrective actions are not found to be satisfactory, the applicant entity will have 3 further months to implement additional corrective actions.
The CDM-AT prepares a draft preliminary assessment report, containing an assessment of the competence and experience of the applicant entity in the sectoral scope(s) assessed and the conformity of the applicant entity with the accreditation requirements (including any corrective actions undertaken) (F-CDM-PR). The CDM-AT (through the secretariat) provides the draft preliminary assessment report to the applicant entity.
Within 6 days, the applicant entity provides comments on the on-site assessment report and the preliminary assessment report.
Within 10 days, the CDM-AT prepares the final assessment report (F-CDM-FR), containing the preliminary assessment report, a description of the corrective actions undertaken by the applicant entity to address the non-conformities and the comments of the applicant entity on the draft preliminary report and how they have been taken into account.
Once this process is complete, the CDM-AP may send a letter to the applicant entity indicating successful completion of the desk review and the on-site assessment (an 'indicative letter') (EB 34, Annex, 1, B.3, paragraph 48). The indicative letter notes that a favourable recommendation to the Executive Board on accreditation depends on successful completion of witnessing activities, and that the validation and verification/certification activities witnessed will be recognised by the Executive Board once the applicant entity is accredited (EB 34, Annex, 1, B.9, paragraph 113).

The costs of the on-site assessment are payable by the applicant entity in accordance with EB 34, Annex 1, Appendix 3.

Witnessing

The witnessing process is further described in EB 34, Annex 1, B.4. Witnessing provides the CDM-AT the opportunity to observe the performance by the applicant entity of tasks which relate to the sectoral scope(s) in which the entity has applied for accreditation. This objective is descried further in EB 34, Annex 1, paragraph 4:

The purpose of a witnessing activity is to assess whether an AE is implementing its tasks in line with its documented quality policy and procedures, including its procedures and substantive decision making capacity of the AE for performing validation and verification/certification of CDM project activities within the scope applied for (EB 34, Annex 1, paragraph 4).

The CDM-AT must witness both validation and verification activities within the relevant sectoral scope(s). However, witnessing of either (or both) may occur by considering documentary evidence of the validation or verification process:

Witnessing activities shall be required for both functions: validation and verification. At the stage of validation, and, if appropriate, verification and certification, [witnessing] may be undertaken by considering documentary evidence (e.g. a "procedural report") provided by an AE on how validation or verification/certification has been performed (EB 34, Annex 1, paragraph 4).

The witnessing process is as follows:

The applicant entity identifies a witnessing opportunity by completing F-CDM-WOI.
The team leader approves the proposed witnessing opportunity and prepares the work plan. The applicant entity must not have started performing the functions prior to acceptance of the witnessing opportunity.
Two qualified members of the CDM-AT (including one methodology expert) witness the performance of the functions by:
1. In the case of validation, considering documentary evidence (unless the team leader requests an on-site visit to be made); and
2. In the case of verification, by considering documentary evidence and a visit to the project site. The Executive Board has clarified that in the case of applicant entities seeking accreditation for afforestation and reforestation activities, a minimum of two verification activities must be witnessed. For all other sectoral scopes, at least one verification activity must be witnessed. (EB 19, paragraph 15)
Previously, verification activities could be witnessed purely with documentary evidence. Since EB 25, however, witnessing of verification must include an on-site visit (EB 25, paragraph 9; EB 34, Annex, B.4, paragraph 53).

The scope of witnessing now also includes an assessment of the decision-making capacity of the applicant entity. The CDM-AT is therefore required to witness this activity during the assessment process (EB 19, Annex 1, paragraph 1).
Within 10 days, each CDM-AT member carrying out the witnessing activity prepares a witnessing report. The team leader prepares a consolidated witnessing report (F-CDM-WR).
The CDM-AT determines whether further witnessing activities are required. If so, the CDM-AT prepares a draft revised work plan and submits this to the CDM-AP for approval. If approved, the CDM-AT carries out the further witnessing activities.
Within 10 days, the CDM-AT prepares a draft preliminary report, containing an assessment of the competence and experience of the applicant entity in the sectoral scope(s) assessed, a description of the activities witnessed and the conformity of the applicant entity with the accreditation requirements (including any corrective actions undertaken) (F-CDM-PR). If an indicative letter has been issued the draft preliminary report is restricted to aspects related to witnessing (EB 34, Annex 1, B.9, paragraph 119(a)).
The CDM-AT (through the secretariat) provides the draft preliminary assessment report to the applicant entity.
Within 30 days, the applicant entity must identify corrective actions to resolve non-conformities and develop a timeframe for their resolution (F-CDM-NC) or withdraw its application. Corrective actions must be completed within 6 months or the witnessing will be automatically rejected. The applicant entity may also propose witnessing activities related to other sectoral scopes.
Within 10 days, the CDM-AT verifies of the implementation of corrective actions and finalises the preliminary assessment report (F-CDM-PR). The CDM-AT (through the secretariat) provides the preliminary assessment report to the applicant entity.
Within 6 days, the applicant entity provides comments on the preliminary assessment report.
Within 5 days, the CDM-AT prepares the final assessment report (F-CDM-FR), containing the preliminary assessment report, a description of the corrective actions undertaken by the applicant entity to address the non-conformities, the comments of the applicant entity on the preliminary report (limited to aspects related to witnessing, if an indicative letter has been issued) and how they have been taken into account, and conclusions regarding accreditation for consideration by the CDM-AP.

The costs of witnessing are payable by the applicant entity in accordance with EB 34, Annex 1, Appendix 3.

An applicant entity must be accredited before submitting a request for registration for a project activity to the Executive Board. However, a validation report undertaken by the entity for the purpose of being witnessed by the CDM-AT can later be submitted to the Executive Board for registration of the project activity once the entity is accredited (EB 11, Annex 2, COP 10 EB Report).

Steps (f) - (g): Reporting and recommendations

Once the CDM-AT has prepared the final assessment report (F-CDM-FR), it submits this report to the CDM-AP. (EB 34, Annex 1, B.4, paragraph 63).

Having received the final assessment report from the CDM-AT, the CDM-AP then considers this report and submits to the Executive Board:

The final assessment report of the CDM-AT;
Its considerations and conclusions regarding accreditation of the applicant entity; and
Its recommendation on whether to accredit the applicant entity (EB 34, Annex 1, B.4, paragraph 64).

The CDM-AP informs the applicant entity of its decision. If the recommendation is against accreditation, the applicant entity may appeal within 6 days, or withdraw its application. Any appeal will be considered by a 3-member panel specially constituted by the Executive Board in accordance with the appeals procedure in (EB 34, Annex 1, Appendix 2).

Step (h): Decision by the Executive Board on accreditation

Once it has received the recommendation of the CDM-AP, the Executive Board considers the application in closed session and decides whether to:

Recommend that the COP/MOP designate the applicant entity by accrediting the entity and specifying the applicable sectoral scope(s); or
Reject the application and provide reasons for the rejection. (EB 34, Annex 1, B.4, paragraph 68)

The Executive Board then informs the applicant entity of its decision and makes this decision publicly available. The accreditation (and designation) of the entity is valid for 3 years from the date of accreditation, but the entity may apply for re-accreditation EB 349, Annex 1, B.4, paragraphs 70-71).

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.

Only those premises of the entity where the on-site assessment takes place are accredited and designated, and other parts of that entity are not ( EB 34, Annex 1, paragraph 4 ). However, the Executive Board has clarified that this means only that responsibility for decision-making in relation to validation and verification/certification activities rests with the accredited office, but that office may use external resources, including non-accredited parts of the organisation, under contractual arrangements (EB 28, paragraph 6).

Applying for accreditation in a new sectoral scope

If an applicant entity has applied for accreditation in a new sectoral scope and the sectoral scope is accepted without modification by the CDM-AP, the normal assessment process will apply EB 34, Annex 1, A.3, paragraph 15).

However, if the CDM-AP modifies an existing scope in order to take account of the new scope, the assessment procedure will apply with the following modifications EB 34, Annex 1, A.4, paragraphs 16-21):

After a preliminary consideration, the CDM-AP:
1. Informs the applicant entity of the new scope;
2. Gives the applicant entity a list of any additional requirements and/or documentation to be submitted in relation to the new scope; and
3. Informs the applicant entity of the composition of the CDM-AT.
Within 6 working days, the applicant entity notifies the CDM-AP whether it wishes to proceed with its application in the revised sectoral scope or withdraw its application. The applicant entity may also object to the composition of the CDM-AT.
The secretariat publishes the name of the applicant entity and the sectoral scope on the UNFCCC CDM website. Stakeholders have 15 days to provide comments on the application to the secretariat, and the secretariat shall immediately make these comments publicly available.
The normal assessment procedure then applies.

If a new sectoral scope is added to the list of sectoral scopes, DOEs and applicant entities may apply within 6 months to be accredited for this sectoral scope without paying an application fee (EB 34, Annex 1, A.3, paragraph 20, EB 13, paragraph 9(a)).

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. However, there is an exception for applicant entities that withdraw their application as a result of a change in the sectoral scope applied for (EB 34, Annex 1, Appendix 3, paragraph 5).

Regular surveillance and spot-checking

Two methods of monitoring the performance of DOEs are provided for in the accreditation rules - regular surveillance (EB 34, Annex 1, B.5) and spot-checking (EB 34, Annex 1, B.6).

Regular surveillance

The purpose of the regular surveillance system is to provide confidence in the full implementation and effectiveness of the accreditation system and the competence of accredited DOEs. Regular surveillance consists of periodic surveillance visits to the accredited office of the DOE to assess the key areas of its operations. Visits take place at least once during the three years of the accredited period of the DOE and comprise two days of on-site assessment (unless further time is requested by the team leader).

The assessment team is comprised of two members, including, if possible, the team leader of the CDM-AT that carried out the initial assessment. The CDM-AP will determine which DOEs are due for regular surveillance based on the volume and quality of validation and verification/certification activities in the period since accreditation. The regular surveillance visit may also be combined with an assessment for an extension of scope.

The regular surveillance visit consists of the following steps (EB 34, Annex 1, B.5, paragraph 81):

The team leader organises an opening meeting, attended by the CDM-AT and the DOE's management, where the CDM-AT explains the activities involved in the assessment;
The CDM-AT conducts an on-site assessment of the DOE to assess:
1. its compliance with CDM requirements;
2. the quality of its validation and verification reports;
3. internal audits and management reviews;
4. contract reviews of project activities; and
5. any changes to the DOE's status.
The team leader organises a closing meeting, attended by the CDM-AT and the applicant entity's management. The team leader may identify areas of non-compliance and its observations (F-CDM-NC).
Within 15 working days, the team leader prepares the draft assessment report (F-CDM-SUR). The DOE has 6 days to comment on the draft assessment report.
Within 15 days, the applicant entity must identify corrective actions to resolve non-conformities and develop a timeframe for their resolution (F-CDM-NC) or withdraw its application. Corrective actions must be completed within 1 month or the application for accreditation will be finalised without these corrective actions.
The team leader prepares the final report and submits it to the CDM-AP. The CDM-AP informs the DOE of the outcome of the surveillance.
Depending on the gravity of non-conformities and the observations of the CDM-AT, the CDM-AP may recommend that the Executive Board trigger a spot-check for the DOE or provisionally suspend the DOE.

The costs relating to regular surveillance are payable by the applicant entity in accordance with EB 34, Annex 1, Appendix 3.

Spot-checking

Spot-checking (unscheduled surveillance) is used to assess whether a DOE still meets accreditation requirements (EB 34, Annex 1, paragraph 5). The Executive Board is authorised to conduct spot-checks of DOEs at any time (EB 34, Annex 1, paragraph 89).

The procedure for spot-checks is set out in EB 34, Annex 1, B.6:

A decision to conduct a spot-check can be triggered by:
1. A request for review of a project activity or the issuance of CERs;
2. Information received on changes to a DOE which may affect performance quality, such as ownership, organisational structure, internal policies or technical expertise of personnel;
3. A written and substantiated complaint about a DOE's failure to comply with accreditation requirements, submitted by another DOE, an NGO or a stakeholder.
Once the Executive Board has decided to conduct a spot-check, it determines a scope and informs the CDM-AP.
The CDM-AP considers the case and determines whether to:
1. recommend immediate suspension pending the result of the spot-check;
2. agree an exception to the spot-check procedure (such as a limited on-site assessment or witnessing activity; or
3. send advance notification of the spot-check to the DOE.
The CDM-AP establishes a CDM-AT and elaborates the scope of the spot-check for the CDM-AT.
The CDM-AT reviews the DOE documentation and prepares an assessment plan. The CDM-AP approves the assessment plan.
The CDM-AT undertakes the spot-check assessment.
Within 5 days, the CDM-AT reports to the CDM-AP. The report must contain a description of any non-conformities and a final assessment report including conclusions regarding accreditation or suspension.
The CDM-AP considers the report and recommends to the Executive Board whether to:
1. Suspend accreditation until corrective actions are undertaken (such actions to be verified by the CDM-AT);
2. Withdraw accreditation; or
3. Confirm accreditation and designation.
9. After the DOE has had an opportunity to present its case to the Executive Board, the Executive Board decides whether to:
1. Confirm accreditation and designation; or
2. Recommend to the COP/MOP to suspend or withdraw designation.
This decision has immediate effect and remains in effect pending a final decision by the COP/MOP. The affected DOE is immediately notified in writing and both the recommendation and the decision will be made public.
If corrective actions are undertaken by the DOE, the CDM-AT reports on these to the CDM-AP. The CDM-AP considers these reports and recommends to the Executive Board whether to:
1. Terminate the suspension of the DOE; or
2. Provisionally withdraw accreditation pending the COP/MOP decision.
11. The Executive Board decides, based on the CDM-AP's recommendation, whether to:
1. Terminate the suspension of the DOE; or
2. Provisionally withdraw accreditation pending the COP/MOP decision (for all sectoral scopes or the sectoral scope in question).
This decision has immediate effect and remains in effect pending a final decision by the COP/MOP. The affected DOE is immediately notified in writing and both the recommendation and the decision will be made public.
The Executive Board may make the name of the DOE public before the spot-check is conducted.

The costs relating to spot-checks are payable by the applicant entity in accordance with EB 34, Annex 1, Appendix 3.

Reaccreditation

The accreditation of a DOE is valid for 3 years only, and designation is valid from the date of accreditation (EB 34, Annex 1, B.4, paragraph 70). 9 months before the expiry date of its accreditation, a DOE must notify the secretariat whether it wishes to apply for reaccreditation (EB 34, Annex 1, B.7, paragraph 102).

The period for notification was previously 6 months, but was extended to nine months at EB 25 (EB 25, paragraph 9). An extension was granted for DOEs who had missed this notification period as a result of delays in the adoption of the revised procedures at EB 26 (EB 26, paragraph 8).

The process for applying for reaccreditation is set out in EB 34, Annex 1, B.7:

The DOE submits to the secretariat all documentation relating to project activities validated and/or verified in the last accreditation period.
The CDM-AT undertakes an assessment process including a desk review, an on-site assessment and witnessing activities. The number of witnessing activities required is recommended by the CDM-AT and approved by the CDM-AP based on the quality of work in the previous period.
The CDM-AT recommends to the CDM-AP, which recommends to the Executive Board, whether to redesignate the DOE, reduce the sectoral scopes, or suspend or withdraw accreditation.

A DOE may request early reaccreditation in order to streamline this process with an application for accreditation of further sectoral scopes.

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).

Effect of suspension or withdrawal on registered project activities

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 (EB 34, Annex 1, B.10, paragraph 120).

An entity that fails to notify the secretariat of these changes may be fined or have its accreditation suspended (EB 34, Annex 1, B.10, paragraph 122).

If additional work by the CDM-AT or CDM-AP is required as a result of the changes, the costs associated with this work will be paid by the DOE 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 any time after this (including after designation is complete), it will be considered a new application and a new non-refundable application fee is payable (EB 34, Annex 1, Appendix 3, paragraph 18).

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:

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