FIFTH COMMITTEE SPEAKERS ECHO OPPOSITION BY GROUP OF 77 TO PROPOSED CHANGES IN CALCULATION OF ARREARS, POSSIBLE REPERCUSSIONS ON RIGHT TO ASSEMBLY VOTE

15 October 2001
GA/AB/3459

FIFTH COMMITTEE SPEAKERS ECHO OPPOSITION BY GROUP OF 77 TO PROPOSED CHANGES IN CALCULATION OF ARREARS, POSSIBLE REPERCUSSIONS ON RIGHT TO ASSEMBLY VOTE

15/10/2001
Press ReleaseGA/AB/3459

Fifty-sixth General Assembly

Fifth Committee

8th Meeting (AM)

FIFTH COMMITTEE SPEAKERS ECHO OPPOSITION BY GROUP OF 77 TO PROPOSED CHANGES

IN CALCULATION OF ARREARS, POSSIBLE REPERCUSSIONS ON RIGHT TO ASSEMBLY VOTE

As the Fifth Committee (Administrative and Budgetary) began its consideration of the issues related to the scale of assessments this morning, several speakers strongly opposed any changes in calculation methodology for the purposes of Article 19 application, including the utilization of the net-to-net comparison and the calculation of amounts outstanding every six months.

[Under Article 19, a Member of the United Nations in arrears in the payment of its dues, in an amount that equals or exceeds the amount of contributions due for the two preceding years, can lose its vote in the General Assembly.]

Introducing the reports on the matter, the Chairman of the Committee on Contributions, Ugo Sessi, said that the proposed changes would tend to accelerate the application of Article 19 for most Member States and might increase the number of States falling under its provisions.  The impact of those changes on the financial situation of the United Nations would depend on whether and how, if implemented, they would affect the pattern of payments by Member States.

Several speakers supported the position of the representatives of Iran (on behalf of the “Group of 77” developing countries and China) and Chile (on behalf of the Rio Group) that there was no need to change the current procedures, which were consistent with relevant General Assembly decisions and Article 19 itself.  The proposed changes would primarily affect the developing and least developed countries –- that is, the Member States which could least afford it.  They also pointed out that those countries were already bearing most of the financial costs resulting from the new scales of assessments approved last December, although some of them were experiencing a devastating economic situation which had been worsened by the current global recession.

Pointing out that the potential negative effects of the proposed changes could not be ignored, Botswana’s representative said that Article 19, as the only existing sanction for non-payment of contributions, must be strengthened.  Application of Article 19 should be stringent, and requests for extensions should be reviewed on their own merit.  Strengthening of Article 19 alone, however, could not be a substitute for the binding legal obligations under Article 17. 

Also stressing the need for diligent compliance by all States with their financial obligations to the United Nations, the representative of the Russian Federation supported the Committee on Contributions’ recommendation that, should

the Assembly take a decision to change the current practice, such changes should be introduced in stages, taking into account the analysis of initial results.  As for the new approaches to the future scales of assessments methodology, the Committee on Contributions should carefully monitor the changes in States’ capacity to pay and concentrate on the technical aspects of the problem, including rates of conversion and national accounts data.  For both political and financial reasons, in the near future no substantial changes should be introduced to the recently revised scale-of-assessments methodology.

Also this morning, the Committee concluded its general discussion of several matters under the programme budget for the current biennium.  They included the Development Account and the plan for improving the Organization’s information technology, as well as the proposal to enhance the Headquarters visitors’ experience.

In other business, the Committee decided to set 1 p.m. on 19 October as the deadline for the submission of nominations for appointments to fill vacancies in subsidiary organs and other bodies.  According to the Committee’s programme of work, the elections are to be held on Friday, 2 November.

Statements were also made by representatives of Brazil, Argentina, Sudan, Iraq, Canada (also on behalf of Australia and New Zealand), United States and Cuba.  Responding to comments and questions from the floor were the Assistant Secretary-General for Central Support Services, Toshiyuki Niwa, and the Senior Programme Officer of the Department of Economic and Social Affairs, Nikolai Zaitsev.

At 3 p.m. today, the Committee will begin its consideration of the Organization’s regular budget for the next two years.

Background

This morning, the Fifth Committee (Administrative and Budgetary) was scheduled to consider issues related to the scale of assessments and the

programme budget for 2000-2001.  Reports under the current budget were introduced last Thursday.  [For background information, see Press Release GA/AB 3457 of

11 October.]

On the scale of assessments, the Committee had before it a report of the Committee on Contributions on its sixty-first session, which took place in June 2001 (document A/56/11).  The document addresses such issues as the application of Article 19 of the Charter; measures to encourage the timely payment of assessed contributions; methodologies for the preparation of future scales of assessment; assessment of non-Member States; and appeals by Members for a change of assessment.

The Committee’s general mandate includes advising the Assembly regarding the application of Article 19 of the Charter.  Article 19 states that a Member of the United Nations in arrears in the payment of its dues in the amount that equals or exceeds the amount of contributions due for the two preceding years, can lose its vote in the General Assembly.  In this connection, during its June session, the Committee on Contributions considered requests for exemption from sanctions from four countries late in the payment of their dues:  Burundi, Comoros, Georgia and the Republic of Moldova.  [Subsequently, in its meeting on 25 July, the Assembly decided to grant those four countries an exemption, allowing them to vote in the General Assembly until 30 June 2002.]

Also considered during the Committee on Contributions’ sixty-first session were the procedures for the application of Article 19.  The current procedure of arrears calculation involves a “gross to net” comparison between the amount owed and the initial assessment.  For purposes of Article 19 application, all of each Member State’s arrears are aggregated, including those related to the regular budget, peacekeeping or the International Tribunals assessments.  The calculations are made once a year, in January, on the basis of the arrears for the two preceding calendar years.

In order to ensure the sound financing of the Organization, in its resolution 55/5 A, the General Assembly requested a review of the implications of the calculation of arrears at the beginning of each calendar year and at the beginning of the financial peacekeeping period on 1 July.  It also decided, subject to the outcome of further negotiations and the recommendations of the Committee on Contributions, to compare arrears with the amount actually assessed and payable (“net to net”) for the preceding two full years. 

As regards the merits of the proposed changes, the Committee noted that should the General Assembly decide to move its biannual calculations of arrears for the application of Article 19, some countries might be prompted to pay their contributions earlier in the year.  It also appeared that more Member States might fall under the provisions of Article 19, should the patterns of payments for 2000 remain unchanged.  As the two changes proposed would potentially affect a significant number of Member States, they could result in an increase in the number of Member States requesting exemption under Article 19.  The changes could also have implications on the Committee’s timetable and programme of work. 

In view of those considerations, the Committee recommended that, should the Assembly decide to proceed with the changes, it should consider implementing them gradually.  It might, for example, begin by implementing the “net to net” comparison, and subsequently consider fully the matter of biannual calculations of arrears for the application of Article 19, taking into account the results of the first change.  The Committee on Contributions also recommends providing a grace period before implementation, which would give Member States adequate time to make any necessary adjustments.

On the measures to encourage timely, full and unconditional payment of assessed contributions, the Committee on Contributions recalls that such payments are currently defined by financial regulation 5.4, which states that contributions and advances shall be considered payable in full within 30 days of the receipt of the communication of the Secretary-General or as of the first day of the calendar year to which they relate, whichever is the later.  As many assessments are issued to Member States in the course of the year, it is not feasible to determine the exact date on which each arrives.  For this reason, the Committee on Contributions states that, should the Assembly introduce any of the measures proposed to encourage the timely payment of the dues, it will need to decide whether to define timely payment in terms of the 30-day period from the date of assessment or from  1 January.  At its fifty-ninth session, the Committee on Contributions concluded that it might be prudent to fix the deadline from the date of the issuance of the assessments, rather than from the date of their receipt.  Recently, it also proposed an extension of the deadline, perhaps from 30 to 35 days.  Such a change, however, would require a revision of the existing financial regulations.

Regarding the proposed indexation of, and interest on, the arrears, the report points out that should the Assembly deem such measures necessary, it should make clear that the revised amount is the new assessed contribution and, thus, subject to Article 19.  Such a decision would have to be effected through an amendment to financial regulation 5.2, which defines assessment and how they are to be adjusted.  The Committee on Contributions concluded that:  indexation of arrears would pose more complex technical issue than the imposition of interest; should it be introduced, the rate of interest should be fixed at a low level; and imposition of interest should be delayed to allow States to make appropriate adjustments.  The Committee also decided to consider this question further at its sixty-second session, including such issues as the date from which indexation of interest charges would accrue; the rates to be applied; the period of indexation; the appropriate use of income from indexation or interest charges; and the basis on which the charge would be calculated.  It is also to consider whether the charges would be compounded in the event of continued non-payment.

The Committee on Contributions also agreed that payment plans can be a useful tool for reducing the unpaid contributions and recommended that the Assembly take a decision on the matter.  Deferring consideration of several other proposed measures, the Committee reaffirmed its serious doubts that it had, within its terms of reference, the capacity to deal with a proposal to restrict the access of States in arrears to opportunities for recruitment and procurement.

An addendum to the Committee on Contributions report (document A/55/11/Add.1) contains information on some multi-year payment plans and incentive and disincentive measures, which are being applied to Member States in arrears by various organizations of the United Nations system and other multilateral and regional organizations.  The information is being provided in response a request by the General Assembly, contained in resolution 55/5 A, to consider further those bodies’ experience in the indexation of arrears, interest on the debt, multi-year payment plans, early reimbursement to troop-contributing countries, and further suggestions for measures to encourage the timely, full and unconditional payment of assessed contributions.

According to the document, in general, the arrangements for time-bound settlement of arrears are implemented only when Member States are at a point of losing their voting rights owing to the amount of their arrears.  The definition of such amounts varies among the agencies.  The periods for settlement under these payment plans for most of the agencies are up to 10 years.  A number of agencies also stipulate that payment of current contributions and advances to the Working Capital Funds must be made in addition to the payment of arrears instalments.  The arrangements usually also provide for the manner in which defaults in payment are to be treated.

Among the incentive measures described in the report are distribution of interest to contributions; allocation among Member States of the interest income element of any cash surplus; and discounts for payment early in the year.  The disincentives include ineligibility for election to the governing bodies; charges of interest on late payments; and denial of membership privileges and technical assistance.

Also before the Committee was a note by the Secretariat on the comprehensive study on the question of honorariums payable to members of organs and subsidiary bodies of the United Nations (document A/56/311), which was initially scheduled to be introduced on Thursday, 11 October.  According to this document, in the Secretary-General's previous report on the matter, he had concluded that authority for paying honorariums rested solely with the Assembly.  He also suggested that the rates, which were last revised in 1981, be increased by 25 per cent.  The Advisory Committee on Administrative and Budgetary Questions (ACABQ) concurred with that suggestion.  Although the Secretary-General's report was before the Assembly at its fifty-fourth session, it was neither introduced nor debated.  In 1999, the Assembly, by its resolution 54/239, endorsed the recommendations of the Advisory Committee, subject to the provisions of that resolution, which included no specific reference to the questions of honorariums.  The Secretariat requests that the Assembly indicate, whether it endorses the recommendations on the payment of honorariums and if so, that it provide an effective date, either retroactively to January 2000 or prospectively to January 2002.

Introduction of Reports

UGO SESSI, Chairman of the Committee on Contributions, introduced the reports on the scale of assessments.  He said that Article 19 did not specify how arrears should be calculated.  Current procedures for its application (“gross to net” comparison) linked the interpretation of arrears to financial regulation 5.4, which, among other things, provided that, as of January of a calendar year, the unpaid balance due and payable contributions and advances should be considered to be one year in arrears.  Thus, the calculations for the application of Article 19 were currently based on the comparison of the outstanding contributions of each State with the total assessments due and payable in the preceding two calendar years.

Continuing, he explained that for 2001, for example, amounts due and payable as of 1 January 2001 were compared to total assessments that had become due and payable in 1999 and 2000.  Gross assessments approved by the General Assembly generally included provisions for staff assessments.  Assessments actually payable by most Member States, or what had become known as net assessments, also reflected a reduction in respect of credits for their share of estimated income from staff assessments.

He went on to say that in its conclusions regarding the proposed changes in calculations, the Committee on Contributions had recalled its earlier comment that such changes would tend to accelerate the application of Article 19 for most Member States.  The impact of those changes on the financial situation of the United Nations would depend on whether and how, if implemented, they would affect the pattern of payments by Member States.  The use of the net-to-net comparison and biannual application of Article 19 might increase the number of States falling under its provisions.

Regarding measures to encourage the timely, full and unconditional payment of assessed contributions, he said that it would be necessary to define timely payment of assessed contributions in the context of any measures the Assembly might adopt.  For practical reasons, it might be prudent to fix the deadline for timely payment from the date that assessments were issued rather than the date on which they were received.  As assessments were issued for a number of separate accounts, it would also be necessary to decide whether any measures adopted would be applied in respect of all assessed contributions, or on an account-by-account basis.

Turning to particular proposed measures, he said that from a technical point of view, if the Assembly decided to apply interest or indexation to unpaid contributions, it should make it clear that the revised amount was the new assessed contribution and, thus, subject to Article 19 of the Charter.  That would require revision of financial regulations governing assessments.  The Committee on Contributions had decided to consider that question further in the future, in the light of any guidance from the Assembly.  He added that the Committee on Contributions had agreed that earlier reimbursement by the United Nations on accounts owed to troop-contributing countries could have a positive impact on Member States’ payments of assessed contributions.

Also, as of 26 June 2001, the President of the General Assembly had referred to the Committee on Contributions a request from Afghanistan for a reduction of its assessment rate.  Taking into account the principle underlying the procedure established by the Assembly in its resolution 54/237 C for consideration of requests for exemptions under Article 19, the Committee decided that it would not be able to undertake a complete review of that country’s request in the time available.  It was, therefore, decided not to take action on the request.  Following consideration of assessment of non-Member States, the Committee had also noted with concern that four Member States –- Democratic People’s Republic of Korea, Kiribati, Tonga and Viet Nam –- still had non-Member State arrears from before their membership of the Organization.

He said that at the conclusion of the Committee on Contributions’ sixty-first session, 16 Member States fell under the provisions of Article 19, although seven had been granted exemptions under Article 19 until 30 June 2001.  Subsequently, Guinea had paid the amount necessary to restore its vote in the Assembly.  Also, the General Assembly had permitted four Member States to vote until 30 June 2002 (Burundi, Comoros, Georgia and the Republic of Moldova).  Accordingly, 11 Member States currently came under Article 19 and had no vote in the Assembly.  Those were the Central African Republic, Guinea-Bissau, Iraq, Kyrgyzstan, Liberia, Niger, Sao Tome and Principe, Seychelles, Somalia, Tajikistan and Uzbekistan.

Statements

SEYED MORTEZA MIRMOHAMMAD (Iran), speaking also on behalf of the “Group

of 77” developing countries and China, reiterated that Member States had a binding legal obligation to pay assessed contributions on time, in full and without condition; possibly strengthening of Article 19 was no substitute for that binding commitment.  On the method for calculating arrears, current procedures were consistent with relevant General Assembly decisions, which were, in turn, consistent with Article 19.  Although General Assembly resolution 55/5 A sought to improve the Organization’s precarious financial situation, the Secretary-General’s report A/55/789, which was still relevant to the discussion, indicated that calculating arrears on a twice-yearly, “net to net” basis would increase the number of developing countries affected by Article 19.  The Committee on Contributions concluded in its report that two proposed changes had the potential to significantly affect a number of Member States, mainly developing countries, with possible consequences for decisions to be taken under Article 108.  Such changes would not improve the financial situation of the United Nations.

If all Member States falling under Article 19 paid the minimum amount to recover their right to vote based on the net-to-net approach, it would increase the United Nations cash balance by a mere $9 million, he added.  By adopting that approach, the Organization ran the risk of significantly increasing the number of Member States under Article 19 –- the Member States which could least afford it.  The United Nations financial situation was a cause of concern to the Group.  The financial cost resulting from the new scales approved last December was borne largely by developing Member States, some of which were experiencing a devastating economic situation which had been worsened by the current global recession.  The Group could not consider any changes to the current procedures for the application of Article 19, such as the “net to net” comparison or biennial calculation of arrears.

IRINA PAVLOVSKAYA (Russian Federation) stressed the need for diligent compliance by all States with their financial obligations before the United Nations.  However, of enormous significance to the Organization’s financial health and prosperity was not only the will of its Members, but also the character of the system of distribution of obligations.  Thus, the scale of assessments had not only financial, but also political implications, as the fairness of assessment distribution could strengthen the trust of Member States in the Organization.  In that connection, she pointed out that the improvement in the Organization’s financial situation, which had been forecast for the end of this year, had been influenced by the important decision to review the scale of assessments, which had been taken at the end of last year.  In the context of that successful reform, during its latest session, the Committee on Contributions had concentrated on other important aspects, including the application of Article 19 and exemptions under that Article.

On the procedures for the application of Article 19, the Committee had come to the logical conclusion that if the Assembly took a decision to change current practice, such changes should be introduced in stages, taking into account the analysis of initial results.  Her delegation supported such an approach.  As for measures to encourage timely, full and unconditional payment of assessed contributions, she supported the conclusions of the Committee on Contributions in that regard, in particular, concerning the usefulness of multi-year payment plans.  The General Assembly should adopt a decision on guidelines in that respect.  She also shared the Committee’s serious doubts that it had within its terms of reference the proposal to restrict the access of States in arrears to opportunities for recruitment and procurement.  That proposal was rather political in nature and should be discussed by the General Assembly plenary.

Turning to the consideration by the Committee on Contributions of new approaches to the future scales of assessments methodology, she said that expert body should carefully monitor the changes in the Member States’ capacity to pay and concentrate on the technical aspects of the problem, including rates of conversion and national accounts data.  For both political and financial reasons, in the near future no substantial changes should be introduced to the recently revised scale of assessments methodology.

CRISTIAN MAQUIEIRA (Chile), speaking on behalf of the Rio Group, said that during the first part of the resumed fifty-fifth session, the Group had clearly set out its position, which was against any change in the methodology for calculation for the purposes of Article 19 application, including the utilization of the net/net methodology and the calculation of amounts outstanding every six months.  The reasons behind the Group’s position had not changed:  it could not support the proposed changes, because their only practical effect would be an increase in the number of developing countries affected by the application of Article 19.  For its part, the Committee on Contributions had agreed with the Secretary-General that modification of the methodology of calculations would affect a large number of Member States, which would lead to an increase in the number and frequency of requests for exemption under Article 19.

The practical consequences for the total amount collected would be miniscule, he continued.  As annex 1 to the report of the Secretary-General indicated, the use of the net/net methodology would mean an increase of $9 million in the minimum payment due, which Member States would have to pay in order to avoid the loss of the right to vote.  From the legal point of view, there was no need to modify the current practice, since the two reports before the Committee indicated that the Office of Legal Affairs had ruled that the current methodology for calculation with respect to Article 19 was consistent with the relevant decisions of the General Assembly and, thus, with Article 19 itself.

In conclusion, he recalled that the commitment of the countries of the Rio Group was reflected in the outcome of the negotiations on the scale of assessments last December.  The financial impact of the resolutions adopted had been absorbed almost exclusively by developing countries, which required time to adjust their national budgets to the new scales.  That took place in an international environment of recession, which had worsened the economic crisis in many of those countries.  For all those reasons, his delegation was not in a position to support the proposed changes.

GELSON FONSECA, JR. (Brazil) said the main issues at stake were the proposals to introduce the biennial calculation of arrears, the “net to net” comparison between arrears and assessed contributions, and incentives and sanctions to encourage the timely, full and unconditional payment of assessed contributions.  Were the proposed changes fair and justified and would they improve the Organization’s financial situation?  The answer was “no”.  Neither the Secretary-General nor the Committee on Contributions had made a firm recommendation on the three proposals.  The issue would inevitably involve a political decision entirely within the purview of the General Assembly itself.  The proposed changes were not fair because they would increase the number of developing countries affected by Article 19.  Developing countries had assumed a disproportionate share of the United Nations expenses as a result of the agreement that allowed for a substantial reduction in the United States’ assessment.

The changes would have no real impact on the ability of countries to fulfil their financial obligations, he continued.  Except for one notable case, all countries in arrears were, in fact, facing extreme budgetary constraints.  The measures proposed by the Committee on Contributions would, in fact, entail only a marginal increase in revenue.  Rather, they would have no impact on the implementation of programmes and activities and would represent an additional burden to developing countries.  It was inappropriate to link requests for exemption of individual countries from the application of Article 19 and the proposed changes for the calculation of Member States’ minimum required payments.  While the first was an evaluation of whether failure of a Member State to pay was due to conditions beyond its control, the second was a discussion on methodological approaches to determine the minimum payment.  He failed to see a solid case, both on technical and political grounds, for the changes proposed.  Brazil was convinced that the proposed changes were neither necessary nor warranted.

COLLEN V. KELAPILE (Botswana) emphasized the importance of the obligation of Member States to pay their assessed contributions in full, on time and without conditions.  The Organization’s expenses were a collective responsibility.  As long as they continued to be apportioned in accordance with the principle of capacity to pay, there could be no justification for non-, late or conditional payment, except when a Member State was unable to meet its obligations because of conditions verifiably beyond its control.  Article 19, as the only existing sanction for non-payment of contributions, must be strengthened.  Application of Article 19 should be stringent and of exceptional nature.  Requests for extensions should be reviewed on their own merit.  Conducting a comprehensive review of all aspects of the scale methodology was a purely technical exercise that could only be objectively decided through the Committee on Contributions’ expert advice.  While he welcomed that body’s report, he regretted that it did not contain many conclusive recommendations.  In many instances, the report referred to views previously expressed.

Noting that the Committee on Contributions had decided to discontinue consideration of some issues, he said he wanted to see continuity in the Committee’s work.  The Committee should give priority to those issues which fell within its mandate and competence.  Where the General Assembly was satisfied that the Committee was not able to proceed further with certain questions, it was in the interest of Member States to provide clear legislative guidance, rather than engaging an expert committee in protracted discussions that did not yield any conclusive agreement.  The current interpretation of the concept of arrears and their calculation were linked to that of regulation 5.4 of the United Nations financial regulations.  While there was scope for improvements in the procedures for application of Article 19, some of the proposed changes might accelerate the application of Article 19 for most Member States.  The potential negative effects of calculating arrears twice yearly and on a “net to net” basis could not be ignored.  The strengthening of Article 19 alone could not be a substitute to the binding legal obligations under Article 17.  The impact of some of the measures on the financial situation of the United Nations would depend on the political will of Member States themselves.

LOUIS ENRIQUE CAPPAGLI (Argentina) said that his delegation associated itself with the position of the Group of 77 and China, as well as the Rio Group. The current methodology for the calculation of arrears under Article 19 was consistent with the relevant decisions of the General Assembly and the Charter itself.  That was the opinion of the Office of Legal Affairs, quoted in the documents before the Committee.  Changes in the current methodology would result in an increased number of developing States with financial difficulties falling under its scope.  Last December, a large number of developing countries had agreed to an increase in their obligations to the United Nations.  Argentina, for example, had agreed to almost double its peacekeeping assessments.  Under the conditions of the current financial crisis, it was not a good time to increase their difficulties.  Article 19 provided for situations beyond the control of Member States, when they should be exempted from its sanctions.  Objective depoliticized application of Article 19 could enhance the financial situation of the Organization.  There should be no changes in the current methodology, and this was not the right time to consider them.

ANAS ELTAYEB ELGAILANI MUSTAFA (Sudan) joined the statement by the representative of Iran on behalf of the Group of 77 and China, and noted a significant improvement of the financial situation of the Organization, which would have important consequences for its work.  He was concerned to see the changes proposed for the implementation of Article 19 of the Charter, however.  Such changes would lead to an increase in the number of States falling under its application.  They would also affect many developing countries, especially the least developed ones.  The debt burden and the effects of globalization were already having an impact on the economies of the poor countries, and the application of revised methodology would further aggravate their situation without significantly changing the financial situation of the United Nations.  Thus, no changes should be introduced, but his delegation encouraged all Member States to carry out their obligations without delay and without imposing any conditions.

AHMED K. AHMED (Iraq) said his country no longer had the right to hold foreign currencies, even in amounts that should be paid in dollars to pay its arrears and contributions to the Organization.  He reserved the right, therefore, to speak at a later time.

2000-2001 Programme Budget

The Committee then continued its discussion of issues related to the 2000-2001 programme budget, including the Headquarters visitors’ experience, information technology, improving the profitability of commercial activities, the Development Account and the question of honorariums.  [For more information, see Press Release GA/AB/3457 of 11 October 2001.]

The Committee Chairman, NANA EFFAH-APENTENG (Ghana), announced that the Chairman of the ACABQ, Conrad S.M. Mselle, would introduce that body’s report on the question of honorariums in the afternoon session when he presented the ACABQ’s report on the 2002-2003 programme budget.

PETER HAMMERSCHMIDT (Canada), speaking also on behalf of Australia and New Zealand (CANZ), said visits by the global public were an important part of raising the Organization’s profile and its many accomplishments.  He shared the ACABQ’s emphasis on ensuring that the conditions of acceptance of in-kind donations from UNA/USA were met.  Though the costs of construction and implementation would not be borne by the Organization, there would be a financial impact of that donation on the regular budget.  The scale of any project to enhance the visitors’ experience would have a direct impact on the United Nations responsibilities for operating and managing it.  In that regard, CANZ wanted to see in a future proposal a number of different size and cost options for enhancing the visitors’ experience.

Given the events of 11 September, increased security concerns had had an impact on the project, he continued.  It was critical to closely coordinate the visitors’ experience with the capital master plan, to ensure that it was implemented in the context of enhanced security measures for the United Nations Headquarters as a whole.  While the United Nations would not be responsible for fund raising, both projects aimed to raise some or all their funds by fund-raising campaigns.  Two separate campaigns might make donors less likely to contribute to two separate projects, diluting the potential pool of contributions.  The visitors’ experience should be fully integrated with the capital master plan. 

MELANIE J. ATTWOOLL (United States) said the proposal for enhancement of the visitors’ experience would have an effect on the revitalization of the commercial activities of the Organization.  But it did not contain either the timeframe or any guarantees that the United Nations would be able to secure adequate resources for its operation.  She agreed with the ACABQ that the donor base of the project should be expanded and that funding should be secured before renovation began.  Also, while revenues were expected to increase by some $11 million, the staffing and maintenance requirements would increase by almost $9 million.  A flexible approach to staffing was needed, should the number of visitors fall below the expected range.

In connection with the report on the commercial activities of the United Nations, she encouraged a closer examination of the function and potential of the United Nations Postal Administration, the catering services and the sale of publications.  She noted that the catering services were not generating sufficient revenue and should be under further scrutiny to increase their profitability.  There was considerable potential to be explored with respect to the sale of publications, and she encouraged the publications board to take a more active role in that respect.

Regarding information technology, she shared the concerns expressed by several speakers at the previous meeting.  Recognizing the importance of the issue, she was alarmed by the lack of strategic vision in that respect.  Such important issues as timelines and resources requirements had not been outlined in the report, and neither were the concrete direction and strategy for the future.  The issue needed to be further considered in the future.

EVA SILOT BRAVO (Cuba) said that her delegation would like to refer to the reports on the Development Account and the visitors’ project.  On the first point, she emphasized the need to ensure sustainability of the Account’s basic financing, for the actual situation was far removed from the initial promises regarding economy measures and short-term savings.  The level of resources had remained the same for the past two bienniums, and the efficiency measures were either not achieved or used to cover immediate requirements.  She also understood that there was a low level of performance as far as financing of projects was concerned, compared with the amounts endorsed.  She hoped the Assembly would take all necessary steps to implement its earlier decisions on the Account.

Regarding the visitors’ experience, she stressed that it would be important to continue work on the proposals, taking into account the recommendations of the ACABQ.  Broadening the financing base (which should not be limited to one donor) would make the project more democratic.  Also, she requested details regarding the basis for the projection that the number of visitors would significantly increase.  She did not know what the trend would be in the future, and lately it had significantly decreased.  She also supported the view that more complete information should be provided to the Committee for further consideration of the matter.

The Assistant Secretary-General for Central Support Services, TOSHIYUKI NIWA, said the paper before the Committee was not a budget proposal but a concept paper.  Required details, especially regarding the impact on budget, could only be made on the basis of design work to be done by UNA/USA and their fund-raising efforts.  The report had been based on benchmark work done for other institutions both inside and outside the United States.  The 11 September incident had a bearing on the issue of access to the United Nations complex.  He stressed once again that contributions would not be in cash but in kind.  Fund-raising activities would be conducted by UNA/USA.  On the issue of competing fund-raising efforts, as with the capital master plan, all options had to be considered.  The capital master plan, however, was about refurbishment, whereas the visitors’ experience would be a totally new endeavour. 

On the information and communication technology strategy, he repeated that the purpose of the paper before the Committee was to lay out objectives.  It was a concept paper, and they were at the macro level.  An implementation plan had been prepared for consideration by the Information and Communication Technology Board.  As soon as that Board was convened, he would be able to share its findings with the Committee.

NIKOLAI ZAITSEV, Senior Programme Officer of the Department of Economic and Social Affairs, reminded the Committee that it had received an update on Friday on the implementation rate for the first and second tranche of projects.  All projects were multi-year and would be implemented over a period of three to four years.  The progress review had provided valuable lessons, which had been taken into consideration in the design of third-tranche projects.  The programme manager was convinced that the next reporting cycle would report on the normal rates of implementation within the schedules for individual projects.

THOMAS REPASCH (United States) said that while he recognized the concern over rates of implementation of projects funded by the Development Account, he was pleased to hear that there had been recent improvements.  The report conveyed the impression that there were serious attempts to move projects forward by focusing on activities rather than outputs, and by making sure that there were strong evaluation components in projects.  He welcomed the report’s candour in acknowledging the need for better compliance with guidelines.  While some efficiency measures did not produce immediate savings, some did, and the Secretariat should pursue a mix of activities, both short and long term.  He concurred with the ACABQ recommendation that the Secretary-General’s report be expanded in the future to include the dates of commencement of projects and the names of implementing agencies.

He thanked Mr. Niwa for updating the Committee on the capital master plan.  Noting his mention of the report of the United States General Accounting Office, if any delegation wanted copies of that report, he would be glad to provide them.  He noted that the formation of a financial advisory board was supposed to have been initiated on a priority basis.  He would have expected the Board to be established by now. 

Ms. BRAVO (Cuba) clarified that her concern regarding the Development Account was not about the level of implementation, for she understood that multi-year projects were involved, the impact of which would not become immediately clear.  She believed, however, that attention should not be exclusively focused on the results.  Certain other elements should also be taken into account, including the lack of resources and the absence of a clear definition of resources within the Department of Economic and Social Affairs to support implementation of the Account.

Mr. NIWA then addressed some concerns expressed at the previous meeting.  Regarding the use of the term “take note” in paragraph 35 of the report on the profitability of commercial activities of the United Nations, he said that the report reflected the drafting style utilized prior to the consideration of the phrase during the resumed session of the Fifth Committee this year.  Thus, the wording of paragraph 35 could be changed to reflect the decisions of the General Assembly on the matter. 

Regarding the need to avoid compromising the international nature of the Organization, he said that any outsourcing activities envisaged strict compliance with the guidelines set by the Assembly.  Regarding catering contracts, he said that the ACABQ would be consulted before such contracts expired, and the development of new contracts would be reviewed together with the Office of Internal Oversight Services. 

Turning to the need to ensure “swing space” for the possible relocation of

a large part of the Secretariat in connection with the implementation of the capital master plan, he said that a discussion with New York City and State representatives would proceed in the near future, despite a delay as a result of the 11 September events.  Draft terms of reference had been established in that respect.  Another question under discussion involved establishment of either a financial advisory board or a general advisory board on the matter.

Mr. ZAITSEV then thanked the representative of the United States for his support and assured him that all ACABQ recommendations would be fully respected.  Productivity gains fell outside the responsibility of his Department, however.

Turning to the concerns expressed by the representative of Cuba, he said that he appreciated her understanding as far as the need resources for the implementation of the Development Account were concerned.  His Department was stretched, but it would address such needs through extensive use of information technology and collaboration with other departments.  His Department would be further updating the Committee on developments in the future.

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For information media. Not an official record.