Untitled - GIZ

16
c. Risks
A risk management system tailored to the requirements of the
company and meeting statutory requirements (Control and
Transparency in Business Act) had already been introduced in
2000 by the predecessor organisation GTZ. Since then, trends in
the defined risk areas (risk map) have been monitored and evaluated
on a quarterly basis by the risk management committee. The
committee regularly reviews the appropriateness and relevance of
the risk areas and also makes necessary adjustments to this early
warning system.
In addition to the risk report, each quarter the Management
Board receives:
• a summary evaluation
• information on measures already initiated
• the committee’s recommendations for avoiding or limiting
material risks.
The risk management systems introduced by the two predecessor
organisations DED and InWEnt were taken into account in the
overall presentation of 2011, the transition year.
The development of the budgets of BMZ and other German
ministries may pose a key risk for achievement of the growth
objectives. There is uncertainty with respect to planned growth in
income related to the German Special Fund for Energy and Climate
that GIZ expects from BMZ, the German Federal Ministry
for the Environment, Nature Conservation and Nuclear Safety,
and the German Federal Foreign Office. This is due to a blocking
notice for commitment authorisations over EUR 900 million in
the 2012 budget, because of lower prices for emissions certificates.
The difficult, volatile security situation in Afghanistan and Pakistan
represents a risk to both the pace and the technical aspects of
commission implementation. Orders on hand for measures being
implemented in these countries totalled about EUR 252 million as
at 31 December 2011. For these orders, there is the risk of possible
delays in project implementation, which will affect GIZ’s business
volume.
The seconded experts evacuated to Germany from Syria and
Yemen because of political unrest have not yet been able to resume
their work in these partner countries. This has led to a standstill or
delays in implementation of the related commissions.
Substantial growth in business volume and an improved market
position for GIZ will be sought in the next few years. To tap
the market potential, the Management Board has adopted the
Programme for Growth and Efficiency. With support from BMZ,
this growth is to be achieved through an increase in the resources
GIZ receives from department budget no. 23. In the 2012 budget,
the commitment authorisations for item 896 03, » Bilateral technical
cooperation «, were increased to approximately EUR 1,312
million, around EUR 275 million 8 over 2011. Additional increases
in commitment authorisations and cash appropriations will be
necessary for the following years.
Because of the lower probability of obtaining an expected new
large contract in Brazil for the modernisation of public security
institutions (MODISP), the targeted growth in International
Services for 2012 is at risk. To counteract this development, a
comprehensive plan was drawn up, with measures to secure business
growth in 2012 and to strengthen it in the following years.
The Management Board regularly informs the Supervisory Board
about essential risks in its quarterly reports.
8 Experience has shown that about EUR 25 million of the commitment authorisations in the
technical cooperation budget item are for other technical cooperation organisations.