Member States’ Timely Payment of Assessed Contributions Critical to Organization’s Financial Health, Fifth Committee Told

16 May 2013
GA/AB/4066

Member States’ Timely Payment of Assessed Contributions Critical to Organization’s Financial Health, Fifth Committee Told

16 May 2013
General Assembly
GA/AB/4066
Department of Public Information • News and Media Division • New York

Sixty-seventh General Assembly

Fifth Committee

32nd Meeting (AM)

Member States’ Timely Payment of Assessed Contributions Critical

 

to Organization’s Financial Health, Fifth Committee Told

 

Member States’ timely payment of assessed contributions and full reimbursement to troop-contributing countries was critical in maintaining the Organization’s financial health, delegations told the Fifth Committee (Administrative and Budgetary) today as they reviewed a briefing on the Organization’s budgetary affairs.

The representative of Fiji, speaking for the “Group of 77” developing countries and China, noted that, although the Organization’s outstanding debt to troop-, police- and equipment-contributing countries had been reduced from $529 million at the start of 2012 to $525 million on 31 December 2012, “this is not nearly enough”.  Most troop-contributing States were also developing countries and were not in a position to maintain their peacekeepers and equipment on their own for extended periods of time.

Australia’s delegate, also speaking for Canada and New Zealand, underscored that unpaid assessed contributions had adversely impacted the Organization’s cash flow.  Those shortages had resulted in the Working Capital Fund being used extensively between October 2012 and January 2013, almost depleting the established amount.  While the Fund had been set up to provide advances, it could only function properly if contributions had been paid on time and in full.

However, a European Union delegate said that, with the bloc contributing nearly 35 per cent of the regular budget and 37 per cent of the peacekeeping budgets, the Union’s share of total contribution was disproportionately large.  “Only a more equitable sharing of financial responsibilities among the United Nations Member States according to their actual capacity to pay can secure a sustainable financing architecture for the Organization,” she stated.

Japan’s representative said his Government would pay all outstanding payments for the regular budget, peacekeeping operations and tribunals “within days” as the country’s fiscal 2013 budget had just been approved.  However, he urged the Secretariat to seek further efficiency in using its financial resources.

Opening the session, Yukio Takasu, Under-Secretary-General for Management, offered updates on his briefing earlier this month regarding the increased number of Member States that had paid their assessed contributions, including those for the regular budget, peacekeeping budget, international tribunal account and the Capital Master Plan.

Binta Mansaray, Registrar of the Special Court for Sierra Leone, also briefed the Committee on the Court’s progress in its completion activities and transition to the Residual Special Court for Sierra Leone.

In other business today, the Committee recommended that the General Assembly appoint Thomas David Smith of the United Kingdom as a member of the Committee on Contributions for a term through 31 December 2014.

Also speaking in the debate were the representatives of Cuba and the United Republic of Tanzania.

The Committee is scheduled to meet again at 3 p.m. Friday, 31 May, to conclude its work.

Background

The Fifth Committee (Administrative and Budgetary) met today to discuss an addendum to the Secretary-General’s report on improving the financial situation of the United Nations (document A/67/522/Add.1) and to receive a briefing by Binta Mansaray, Registrar of the Special Court for Sierra Leone, on the progress of the Court’s completion activities and transition to the Residual Special Court for Sierra Leone.

The addendum to the Secretary-General’s report reviews the situation as of 31 December 2012 and 30 April 2013.  It focuses on four main financial indicators:  assessments issued; unpaid assessed contributions; available cash resources; and debt to Member States (For details, see Press Release GA/AB/4064.)

The Committee was also set to fill a vacancy in the Committee on Contributions.  Thomas David Smith of the United Kingdom had been nominated.  His curriculum vitae is contained in the Secretary-General’s note (document A/67/102/Add.1).

Briefing by the Registrar of the Special Court for Sierra Leone

BINTA MANSARAY, Registrar of the Special Court for Sierra Leone, briefed the Committee on the progress of the Court’s completion activities and transition to the Residual Special Court for Sierra Leone.

She noted that, despite extraordinary efforts by key donors, including Member States and the Management Committee, as well as intense fundraising by the Principals of the Special Court, financing through voluntary contributions had been insufficient to meet the budgetary requirements for the Special Court’s operations until completion of its judicial activities in September 2013 and for its transition to the Residual Court by December 2013.

In November 2012, she continued, the Secretary-General, in an exchange of letters, told the Security Council that the possibility of the Special Court running out of funds was particularly worrisome since the Special Court was in the process of completing the appeal in its final case against former Liberian President Charles Taylor.  The Secretary-General had requested a subvention of $14 million for the Court for its operations from December 2012 to 31 December 2013.

On 14 December 2012, she said, the Advisory Committee on Administrative and Budgetary Questions (ACABQ) approved that amount.  In addition, the Special Court received $1.67 million in voluntary contributions towards its core budget, 80 per cent of which had been contributed by the United Kingdom.  Last year, the Special Court’s Principals and the Management Committee conducted more than 30 fundraising meetings for the Special Court and the Residual Court.

She then turned to matters regarding the Appeals Chamber, which would continue to work towards September 2013 as the projected date for delivering its final judgement, after which the Special Court would transition to the Residual Court.  She gave an overview of the various judicial proceedings, as well as the various completion and closure tasks being carried out by the Special Court.

Those tasks, she said, included the liquidation of infrastructure and assets, and the closure of the Liberia office and legacy projects.  Upon delivery of the final judgement in the Charles Taylor Appeal, the transition period would begin, and should last approximately six to eight weeks.  It would entail finalization of archives, court records and financial reports; liquidation of assets; repatriation of non-essential staff; dismantling of services; and conducting a final audit.

Improving Financial Situation of United Nations

YUKIO TAKASU, Under-Secretary-General for Management, gave updates on the figures he had presented in his briefing on 10 May of this year.  The number of Member States that had paid their assessed contributions in full had since increased to 84 for the regular budget, 36 for the peacekeeping budget, 48 for the international tribunal account and 160 for the Capital Master Plan.  The number of Member States that had paid their obligations in full for all accounts remained at 29.

PETER THOMSON (Fiji), speaking for the “Group of 77” developing countries and China, acknowledged some of the positive signals in the Organization’s financial situation, such as the reduced level of outstanding contributions to the regular budget and the budgets of the peacekeeping operations.  As well, unpaid assessments had been lower at the end of 2012 than at the end of 2011 for all categories, except the tribunals.

He said that, in regard to the outstanding payments to Member States that provided troops, police and equipment to peacekeeping operations, the efforts made to reduce that amount from $529 million at the start of 2012 to $525 million on 31 December 2012 were commendable.  However, “this is not nearly enough”, he stated, stressing that “more should be done to ensure that Member States are reimbursed in full, on time and as a matter of priority”.

That, he underscored, was a matter of particular concern and priority for the Group, as most troop-contributing States were also developing countries and were not in a position to sustain their troop commitments and maintain their equipment on their own for extended periods of time.  As for payments to the peacekeeping operations budget, he reiterated his request to those countries that had not paid their assessments in full to do so as soon as possible.

Noting that contributions for the Capital Master Plan budget were “almost complete”, with $3 million outstanding as of 30 April 2013, he emphasized that the full, timely and non-conditional payment of assessed contributions by Member States to the budgets of the United Nations was an obligation established in the Charter.  In that context, he strongly rejected all unilateral coercive measures that were contrary to international law and sometimes impeded payments from members of the Group to the Organization’s budgets.

CARMEL POWER, of the Delegation of the European Union, stressed that it remained vital Member States and the Secretariat take their partnership seriously, including the provision and use of funding responsibly.  In that regard, the significant level of outstanding assessments remained a concern.

She said that, according to Mr. Takasu’s presentation, the budgets remained healthy, with the Working Capital Fund untouched and the Special Account growing because it had not been utilized.  That reminded the Committee of the need to reduce spending while maintaining delivery.  It was imperative that concrete steps now be taken at all levels to spend more wisely, deliver in new ways and ensure that the Organization lived within the agreed budget levels.  “This applies to all activities of the United Nations,” she said, including peacekeeping, construction and the regular budget activities.

As well, she noted that the Union’s Member States contributed nearly 35 per cent of the regular budget, exceeding by far their gross national income (GNI) share, and approximately 37 per cent of the peacekeeping budgets.  Only a more equitable sharing of financial responsibilities among the United Nations membership according to their actual capacity to pay could secure a sustainable financing architecture for the Organization.

EMIL STOJANOVSKI (Australia), also speaking on behalf of Canada and New Zealand, welcomed Mr. Takasu’s positive assessment of the Organization’s overall financial indicators, particularly the fact that at the end of 2012 outstanding assessed contributions had decreased across all budget categories except for the international tribunals, compared with the position a year earlier.

Nonetheless, he stated, it was not only unfair to Member States who had paid in full and on time while others had not, it was also unfair to the troop-contributing countries waiting to be reimbursed for incurred costs.  Although the $525 million still owed to Member States at year-end 2012 was a modest decrease from the beginning of 2012, it was still too high.  The Secretariat’s own projections of $496 million to be owed by Member States at year-end 2013 showed how difficult it was for the Organization to meet its obligations.  Unpaid assessed contributions also adversely impacted the Organization’s cash flow.

He went on to say that, due to cash shortages, the Working Capital Fund had been used extensively between October 2012 and January 2013, with borrowing peaking at $149.54 million in November 2012, which almost depleted the established amount.  The Organization also borrowed from the Special Account in November and December 2012.  While the Fund was set up to provide advances needed to fund budgetary appropriations pending the receipt of contributions, it could only function properly if contributions were then paid on time and in full.

He also pointed out that the extent of the Organization’s borrowing from the Fund and the Special Account towards the end of 2012 raised concerns over the liquidity available for regular budget operations during peak periods.  In addition, it highlighted the urgent need for Member States to fulfil their obligations and for the Committee to remain vigilant of the Organization’s financial situation.

He emphasized that Australia, Canada and New Zealand would continue to demonstrate their commitment to the United Nations by paying their dues in full and on time and he encouraged all others to follow suit.  Those facing financial arrears should make use of the multi-year payment mechanism.  Improving the Organization’s financial situation was not just a matter of providing it with all the required resources.  Those resources must be managed effectively.  “Doing more with less is not just a policy suited for times of fiscal austerity; it is a reality that all Governments and intergovernmental entities must live with for the foreseeable future,” he said.

MONDO YAMAMOTO ( Japan) said that, despite its financial difficulties in recent years, his Government’s determination to play an active role in maintaining international peace and prosperity remained unchanged.  All outstanding payments for the regular budget, peacekeeping operations and tribunals would be settled “within days” since its national budget for fiscal 2013 had just been approved.

At the same time, he urged that the Secretariat seek further efficiency, taking into account the domestic efforts made by each Member State, and stressed that the General Assembly should carefully analyse the Secretary-General’s budget proposals, with a view to setting realistic levels of resources necessary to implement the given mandates.

DAYLENIS MORENO GUERRA (Cuba), aligning with the statement by the Group of 77 and China, said she was encouraged by the improvement in the Organization’s overall financial situation and that the year-end 2012 outstanding assessments for everything, with the exception of the tribunals, had dropped from year-end 2011.  She lauded the 143 Member States who had paid their assessments in full, but was concerned that the Organization’s main contributor continued to be its main debtor.

She also said she was worried that at year-end 2012 the Organization’s cash position had been negative and the forecast for year-end 2013 did not look rosy.  The Secretariat should make every effort to efficiently use resources.  All the United Nations financial commitments must be met on time, entirely and unconditionally.  When adopting budgets, Member States must give the United Nations the requisite resources to fulfil its mandate.  That was crucial for gradually paying down debts to troop-contributing countries and returning surplus monies from closed missions to Member States.

She stressed the need to take into account some Member States’ difficulties in paying their contributions.  Developing countries were making a concerted effort to pay, despite the financial crisis.  She rejected unilateral coercive measures that impeded those countries’ ability to pay their dues.  Despite major obstacles and grappling with the impact of the financial crisis, Cuba was current with its dues to the regular budget and was making great efforts to pay its peacekeeping assessments on time.  Her country, she said, would continue to do so despite the United States’ aggressive economic, commercial and financial embargo against it.

JUSTIN KISOKA (United Republic of Tanzania) thanked the chief Contribution Office team for its work, in particular for staff maintaining the status of contributions paid.  That had helped his Government over the past few years to make projections for payment. His delegation remained committed to fulfilling its financial obligations despite many challenges.

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For information media • not an official record
For information media. Not an official record.