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GA/AB/4371
5 October 2021
Seventy-sixth Session, 2nd Meeting (PM)

While Agreeing on Capacity-to-Pay Principle, Speakers in Fifth Committee Differ over How Best to Readjust Scales of Assessment for 2022-2024 Budget Cycle

Speakers in the Fifth Committee (Administrative and Budgetary) agreed today that the capacity to pay must remain the core principle that determines how much each Member State must pay into the United Nations’ regular and peacekeeping budgets, but they differed on how best to readjust the scales of assessment for the period 2022‑2024, particularly in the wake of the global COVID-19 pandemic.

Singapore’s representative, speaking on behalf of the Association of Southeast Asian Nations (ASEAN), noted that according to the Committee on Contributions’ report, 45 developing countries would see their regular budget assessments go up, with ASEAN members collectively paying nearly 6 per cent more.  ASEAN will not support proposals that would distort the capacity‑to‑pay principle or unduly shift the financial burden onto developing countries.  He also said that the Committee must address the 22 per cent maximum ceiling on assessments, which only benefits one Member State.

The United States’ representative said the ceiling has been a fundamental part of the methodology for the scale of assessment since 1946.  “No changes should be made to the ceiling,” he declared.  He also called for eight wealthy members of the “Group of 77” developing countries and China to forego their 7.5 per cent discount on the peacekeeping budget and for the 10 elected Security Council members to either relinquish their discount or, for those that do not receive a discount, pay a small premium.

India’s representative, also speaking on behalf of Brazil, Russian Federation, China and South Africa, said the elements of the present methodology have worked well and should continue.  “They are not negotiable,” he stressed.  He added that the 22 per cent maximum rate of assessment contravenes the principle of capacity to pay.  Developed countries with high per capita income should take on more financial responsibility with regards to the United Nations, he added.

The European Union’s representative, speaking in its capacity as observer, renewed the bloc’s call for Member States to improve the current methodology of cost‑sharing.  The European Union is particularly interested in the Committee’s comments regarding the use of verifiable and comparable public external debt flow data in the debt‑burden adjustment.  Regarding peacekeeping operations, he said the rates of assessment should reflect the capacity to pay while also considering the special responsibility of the Security Council’s five permanent members.

The representative of Saint Kitts and Nevis, speaking on behalf of the Caribbean Community (CARICOM), emphasized that no developing country should be placed beyond category C on the scale of assessments.  He deplored the fact that Bahamas has found itself placed in category B, thus doubling its contribution.  Such a situation must be corrected, he said, adding that developing countries cannot assume the same financial responsibilities as wealthy countries.

Japan’s representative said the methodology for calculating assessments needs to better reflect each Member State’s real capacity to pay in a more equitable manner, based on the most current data available.  The scale of assessments for peacekeeping operations must take into consideration the special responsibilities of the permanent members of the Security Council, he added.

Egypt’s representative said he respected the accuracy of the current methodology and rejected any changes that would increase the contributions of developing countries, who under the current format would see their regular budget assessments rise by more than 27 per cent.  Any attempt to modify the methodology and subject developing countries to more burdens is unfair.  The COVID‑19 pandemic has already had an unprecedented financial impact on the developing countries, he stressed.

The Committee began its consideration of the Committee on Contributions’ report – the starting point of its discussions to determine the regular budget and peacekeeping assessments for the period 2022‑2024 – at its opening session on 4 October.  (See Press Release GA/AB/4370.)

In other business today, the Committee, acting without a vote, approved a draft resolution titled “Scale of assessments for the apportionment of the expenses of the United Nations:  requests under Article 19 of the Charter” (document A/C.5/76/L.2).  Through that text, the General Assembly would agree that the failure of the Comoros, Sao Tome and Principe and Somalia to pay the full minimum amount of their assessments necessary to avoid the application of Article 19 of the Charter was due to conditions beyond their control.  It would also decide that those three Member States shall be permitted to vote in the Assembly until the end of its seventy‑sixth session.

It also heard the introduction of reports titled “Activities of the Office of Internal Oversight Services for the period from 1 July 2020 to 30 June 2021” (document A/76/281 (Part I) and A/76/281 (Part I)/Add.1), from Fatoumata Ndiaye, Under‑Secretary‑General of Internal Oversight Services; “Activities of the Independent Audit Advisory Committee for the period from 1 August 2020 to 31 July 2021” (document A/76/270) from Committee Chair Janet St. Laurent; and “United Nations Office for Partnerships” (document A/76/218), from its Executive Director, Annemarie Hou.

Also speaking today were representatives of Cameroon (on behalf of the African Group), United Kingdom, Qatar, Venezuela, Republic of Korea, Mexico, Pakistan and the Russian Federation.

The Fifth Committee will reconvene on Wednesday, 13 October, to take up the Organization’s proposed programme budget for 2022.

Scale of Assessments for United Nations Expenses and Peacekeeping Operations

BURHAN GAFOOR (Singapore), speaking on behalf of the Association of Southeast Asian Nations (ASEAN), said the current methodologies governing both scales of assessments have been adopted by consensus for two decades, reflecting a common agreement by Member States on the principles underpinning the scales.  “This agreement, solemnly entered into by sovereign States, is not to be taken lightly.”  The first and main principle – the “capacity to pay” – must remain the main criteria, he said, noting that about 45 developing countries will see a rise in their contributions to the regular budget, according to the Committee on Contributions’ report.  ASEAN’s contribution is projected to increase by nearly 6 per cent and the bloc is committed to fulfilling its obligations, he said.  ASEAN will not, however, support proposals aimed at distorting the capacity‑to‑pay principle or to unduly shift the burden onto developing countries.  He agreed with the “Group of 77” developing countries and China that the 22 per cent maximum ceiling is the only element of the methodology that contradicts the principle of capacity to pay.  It benefits only one Member State and it must be addressed, he said.

Turning to the scale of assessments for peacekeeping operations, he reaffirmed that the Security Council’s five permanent members should continue to absorb discounts applied to other Member States in recognition of their decision‑making prerogatives.  Those five countries must show leadership and not shift the burden onto developing States.  “We cannot have a situation where the political dominance of permanent members continues to increase while their financial contributions are allowed to decrease,” he said.  He added that peacekeeping financing must continue to recognize the circumstances faced by developing countries, particularly small developing economies which may have misleadingly high per capita incomes.  No developing country that is not a permanent member of the Security Council should be categorized above Level C in the scale of assessments for peacekeeping operations, he emphasized.

THIBAULT CAMELLI, representative of the European Union in its capacity as observer, said the bloc’s members are ready to endorse the recommendations of the Committee on Contributions to let countries that requested an exemption, under Article 19, to vote in the Assembly until the end of its seventy‑sixth session.  He stressed that funding the United Nations is a joint and shared responsibility.  While acknowledging that some Member States may face temporary difficulties in fulfilling their annual financial obligations to the United Nations, he noted that several countries requesting the exemption have been facing difficulties repeatedly.  He strongly encouraged those Member States to consult the Secretariat in order to develop and submit practical multi‑year payment plans.

Turning to the scales’ methodology, he said the Assembly should strive towards an equitable and balanced distribution of the Organization’s financial responsibility, in accordance with every member’s capacity to pay.  The European Union renews its call to the United Nations membership to improve the current methodology of cost‑sharing.  Regarding the regular budget, the Committee on Contributions identified several areas of improvements in the scale formula and the European Union’s members would like to build on those and complement them with a view to correcting the scale of assessment methodology.  The bloc is particularly interested in the Committee’s comments regarding the use of verifiable and comparable public external debt flow data in the debt‑burden adjustment.  Regarding peacekeeping operations, he said the bloc’s member States actively contribute with troops, civilian police and other personnel to missions around the world.  Similar to the regular budget, the rates of assessment for peacekeeping should reflect the capacity to pay of Member States while taking into account the special responsibility of the permanent members of the Security Council.

IAN MC DONALD LIBURD (Saint Kitts and Nevis), speaking on behalf of the Caribbean Community (CARICOM) and aligning himself with the Group of 77 and China, stressed the importance of keeping the capacity‑to‑pay principle for the distribution of United Nation expenditures unchanged.  The growth rate, gross domestic product (GDP) and per capita income adjustments as well as the debt ratio must remain unchanged, he said.  Furthermore, he stated that any changes to increase the contribution of developing countries must be avoided.  On the issue of assessed contributions for peacekeeping operations, he underlined that the operations must be provided with sufficient resources to carry out their mandates.

Recalling the special responsibility of the permanent members of the Security Council, he highlighted the importance of the principle of common but differentiated responsibility.  No developing country should be placed beyond category C.  He deplored the fact that the Bahamas was placed in category B, thus doubling its contribution.  This situation must be corrected to restore the balance between developing and rich countries, he said.  Developing countries must not assume the same financial responsibilities as wealthy countries.

RAVINDRA RAGUTTAHALLI (India), also speaking on behalf of Brazil, Russian Federation, China and South Africa, said the elements of the present methodology have worked well and should continue.  “They are not negotiable,” he stressed.  He added that the 22 per cent maximum rate of assessment contravenes the principle of capacity to pay.  Developed countries with high per capita income should take on more financial responsibility with regards to the United Nations, he added.

FELIX-FILS EBOA EBONGUE (Cameroon), speaking on behalf of the African Group, said any apportionment methodology only makes sense when Member States fulfil their responsibility to pay their contributions on time, in full and without conditions.  The Group stresses that the political circumstances that led to the 2000 agreement, and profoundly distorted the notion of equitably shared responsibilities, no longer stands the test of time.  It is a fundamental distortion of the capacity‑to‑pay principle.  The Group urges the General Assembly to make sure every Member State contributes to its real capacity to pay:  not more, not less.  The Group also stresses that any attempt to change the current methodology of calculation for contributions, in a sense that will add to the already very heavy burden of developing countries, is simply not acceptable.  The core elements of the current methodology of the scale of assessment must be kept intact.  “They are not negotiable,” he added.

The Group reaffirms that privileges and responsibilities are two sides of the same coin and cannot be dissociated, he said.  The use of services of the Organization, in any way, comes with it the responsibility to contribute to the institution’s financial burden.  It is a particularly an injustice when members with enhanced observer status are treated differently.  The Group again asks the General Assembly to correct this situation as soon as possible.  Regarding the scale of assessment for peacekeeping operations, the Group reaffirms the peacekeeping scale must clearly reflect the special responsibilities of the Security Council’s permanent members for the maintenance of international peace and security.  The negative consequences of the pandemic, coupled with other structural problems, has already prevented some developing countries from temporarily meeting their financial obligations.  The Group strongly recommends the Fifth Committee consider dealing with Article 19 exemptions under the United Nations Charter in an urgent manner.  It endorses the Committee on Contributions’ recommendation that Comoros, Sao Tome and Principe and Somalia be permitted to vote until the end of the Assembly’s seventy‑sixth session.

RICHARD CROKER (United Kingdom) said that relief measures provided under the regular budget should be better targeted at those Member States which need it most.  It is highly questionable whether major creditor nations should benefit from the debt burden adjustment, as they do now.  Turning to the peacekeeping scale, he said that the additional discounts afforded to Group C and certain other Member States do not derive from justifiable, objective and comparable criteria.  “As such, we see no basis for this discount and strongly encourage those Member States to relinquish it,” he said.  He added that it is only logical and fair for a Member State, or group of Member States, to see an increase in their contribution “where there is economic growth relative to others”.  Turning to Article 19, he endorsed the Committee on Contributions’ recommendations, adding however that Member States must make every effort to pay their assessments in full and on time, with Article 19 being used on an exceptional basis.

KIMURA TETSUYA (Japan) said that, as one of the major financial contributors to the United Nations, his Government attaches great importance to the scale of assessments.  The capacity‑to‑pay principle should be respected and maintained.  Japan has continuously fulfilled its responsibility by paying its assessment in full.  The methodology for calculating assessments needs to better reflect each Member State’s real capacity to pay in a more equitable manner, based on the most current data available.  The scale of assessments for United Nations peacekeeping operations must take into consideration the special responsibilities of the permanent members of the Security Council.  Regarding the application of Article 19 of the United Nations Charter, he considered the recommendations of the Committee on Contributions regarding exemptions to the Article’s application as appropriate.  He encouraged those Member States with significant arrears to consider submitting and updating multi‑year payment plans as recommended by the Committee.

PATRICK KENNEDY (United States) acknowledged that some improvements can be made to the regular budget scale.  However, since 1946, the ceiling has been a fundamental part of the scale methodology.  “No changes should be made to the ceiling,” he said.  On the peacekeeping scale, he said that in the past, many Member States have volunteered to pay at a higher assessments rate than required.  They numbered 14 in the 2001‑2003 scales period and 13 in the 2004‑2006 period.  If such a practice was still in place, it would be worth $65 million, based on the current peacekeeping budget.  However, in 2021, only four countries – Bulgaria, Estonia, Portugal and Romania - volunteered to pay at a higher rate.  He called for a revival of this “voluntary spirit”, starting with two groups.  The first comprise eight wealthy countries which receive a 7.5 per cent discount on the peacekeeping scale only because they self‑identify as members of the Group of 77.  “These countries have every right to identify with any group they please, but they should not be rewarded for this,” he said, calling on those eight Member States to voluntarily forgo their discount and pay the peacekeeping budget with no discount.  The 10 elected members of the Security Council should meanwhile either relinquish their discount or, for those that do not receive a discount, pay a small premium.  This is the responsible thing to do, as those 10 countries participate in Council decisions, he said.

ALYA AHMED SAIF AL-THANI (Qatar), aligning herself with the Group of 77 and China, said peacekeeping operations are multidimensional and their mandate involves support for political processes, disarmament and the protection of human rights.  The Organization needs to be funded properly to carry out its mandates.  Current principles for peacekeeping, as approved by Assembly resolution 55/235, should be the foundation of all debate.  All Member States should fund peacekeeping operations.  Yet the permanent members of the Security Council bear special responsibility.  Transparency on this issue is necessary.  Qatar rejects attempts of political pressure to move members of the Group of 77 to Level B.

AHMED MOHAMED ISMAIL ELMAHS (Egypt), aligning himself with the Group of 77 and China and the African Group, spoke in his national capacity and complimented the work completed by the Committee on Contributions in its report on the scale of assessments.  It is the obligation of all Member States to pay their assessments on time and without conditions. The capacity‑to‑pay principle must be followed.  It is the responsibility of the permanent members of the Security Council to maintain their contributions with respect to the peacekeeping budget.  He respected the accuracy of the current formula and rejected any change to the current elements for the scale of assessment that would increase the contributions of developing countries.  With regard to the regular budget, the current methodology will lead to more than a 25 per cent increase for developing countries.  Any attempt to modify the methodology and subject developing countries to more burdens is unfair.  The pandemic has already had an unprecedented financial impact on the developing countries.

JOAQUÍN ALBERTO PÉREZ AYESTARÁN (Venezuela), associating himself with the Group of 77 and China, said that his country has the capacity to pay its assessments.  However, it has been unable to do so owing to the United States’ systematic attempt to sever its rights and privileges, including the right to vote in the General Assembly.  He recalled that in 2020, Venezuela’s application for exemption under Article 19 was denied, resulting in a 10‑month suspension of its ability to vote in the Assembly.  He also noted that more than $300 million deposited by Venezuela’s central bank at Citibank in New York City is now in the coffers of the Federal Reserve, just a few miles away, having been seized by the United States.  “We are just calling for equal and non‑discriminatory treatment – nothing more than that,” he said.  He called on the United States to abide by its obligations under the Headquarters Agreement and the United Nations Charter, emphasizing that bilateral differences cannot be an excuse to exploit its privileged position as host country.  He also called on the Fifth Committee to exercise its good offices to achieve a lasting solution to this situation by the end of this year.

JUN JI SUN (Republic of Korea) said the scales of assessment must be based on the capacity to pay, based on the most comprehensive data available.  In that regard, the Fifth Committee should take due note of the recommendation of the ad hoc intergovernmental working group on the implementation of the capacity to pay that gross national disposable income is the most appropriate way to determine the scale of assessment.  She also drew attention to the Committee on Contributions’ decision regarding briefings by the International Monetary Fund (IMF), World Bank and others, calling it an important step.

JESÚS VELÁZQUEZ CASTILLO (Mexico) said the scale of assessments is very important as it carries financial implications for the Organization and the budgets of Member States, especially as the COVID‑19 pandemic makes itself felt.  The Fifth Committee must guarantee that the scale of assessments is fair and that assessments for peacekeeping are distributed fairly and follow the capacity‑to‑pay principle.  The scale must also ensure the permanent members of the Security Council pay properly for peacekeeping operations.  Any change in the payment of one permanent member must be resolved with payments by other permanent members and not absorbed by developing countries.

CHAUDHARY JAWAD ALI CHATHA (Pakistan), aligning himself with the Group of 77 and China, stated that cooperation and collective action is needed more than ever.  He stressed the responsibility of all Member States to pay their contributions without conditions.  The capacity‑to‑pay principle is the cornerstone of the methodology for calculating the scale of assessments for the apportionment of United Nations expenses, he said, and rejected any change to this methodology.  Regarding the scale of assessments for peacekeeping operations, he stressed the special responsibility of permanent members of the Security Council.  The ceiling rate goes against the capacity‑to‑pay principle and it must therefore be reviewed, he concluded.

BERNARDO GREIVER, Chair of the Committee on Contributions, thanked the Committee for their questions and ideas.  “We are here to help you and to work with the Committee,” he said, emphasizing that its input is even more important given the pandemic’s impact on Member States.  The variety of socioeconomic situations is rendering the task of determining the scale of assessments more complex, but a scale must be adopted to ensure that the Organization can continue to function.  He went on to say that, a few years ago, the Committee on Contributions’ work was hampered by insufficient data.  Now, however, thanks to the Statistics Division, there is a wealth of information available.

The Committee, acting without a vote, then approved a draft resolution titled “Scale of assessments for the apportionment of the expenses of the United Nations:  requests under Article 19 of the Charter” (document A/C.5/76/L.2).

Through that text, the General Assembly would agree that the failure of the Comoros, Sao Tome and Principe and Somalia to pay the full minimum amount of their assessments necessary to avoid the application of Article 19 of the Charter was due to conditions beyond their control.  It would therefore decide that those three Member States shall be permitted to vote in the Assembly until the end of its seventy‑sixth session.

Report on Office of Internal Oversight Services (OIOS) Activities

FATOUMATA NDIAYE, Under‑Secretary‑General of Internal Oversight Services, introduced the annual report on the activities of the Office of Internal Oversight Services (OIOS) for the 1 July 2020 to 30 June 2021 period (documents A/76/281(Part I) and Add.1).  The Office issued 188 oversight reports relating to non‑peacekeeping operations, including 9 reports to the General Assembly.  The reports include 418 recommendations to improve risk management, governance and operations, of which 6 were classified as critical.  The addendum provides an analysis of implementation of OIOS recommendations.  During the reporting period, the Office made the following areas a priority:  implementation of reforms, organizational culture, procurement and supply chain, and missions in transition.  It also acted to ensure its recommendations are implemented in a timely manner so that control weaknesses are quickly addressed and opportunities for performance improvements are reached quickly.  This work helped reduce by half the number of recommendations remaining open for extended periods of time, compared to a year ago.

Despite an initial reduction in reports of misconduct made to OIOS at the pandemic’s onset, the general upward trend in the number of these reports continued, she said.  Excluding matters related to peace operations, during the reporting period, the Division received 675 reports and issued 98 investigation reports and closure notices and 13 advisory reports.  The timeliness of investigations remained a challenge, primarily because of the pandemic’s impact on the investigation process.  This included the ability to conduct interviews and gather other evidence.  The Office will soon work with independent experts to undertake an external quality assessment review of the Inspection and Evaluation Division to ensure the most efficient and effective investigations practices are in place and identify opportunities for improvements.

Report on Independent Audit Advisory Committee Activities

JANET ST. LAURENT, Chair of the Independent Audit Advisory Committee, introduced that body’s report on its activities for the period from 1 August 2020 to 31 July 2021 (document A/76/270).  She said that Management’s effort to encourage senior managers to pay increased attention to the implementation of the Board of Auditors’ recommendations is to bear fruit since all the Secretariat entities, except for the United Nations Human Settlements Programme (UN‑Habitat) and the International Residual Mechanism for Criminal Tribunals, have shown improvements in the implementation rates.  The lessons learned from the root cause analysis that the Secretariat is conducting should help lead to timelier implementation of the Board’s recommendations, she said.

Turning to risk management and internal control framework, the Committee believes that enterprise risk management is headed in the right direction in prioritizing a robust enterprise risk management framework, she said.  On performance audit and evaluation, she noted that the current performance audits address specific elements within a department, whereas the evaluation work done by the Inspection and Evaluation Division used to look at a department as a whole.  The Committee therefore recommends that OIOS consider the need for holistic department‑wide assessments of non‑programmatic departments in its future workplans, she said.  On the implementation of OIOS recommendations, the Committee believes that timely implementation of oversight bodies’ recommendations is key to addressing the risks that could adversely impact on the Organization’s ability to achieve its objectives.  The Committee, therefore, is of the view that there is still room for improvement in the timely implementation of recommendations, she stated.

On strengthening the investigation function, she pointed out that the Investigation Division’s caseload has risen.  She expressed her concern over the fact that investigations take more than one year to complete.  The Committee continues to urge the Division to increase its focus on completing investigations in a timely manner, she said.  On the trends in after‑service health insurance, the Committee noted that after‑service health insurance liabilities increased by 9.3 per cent.  For the United Nations to have these liabilities comprising 75 per cent of the total liabilities presents a significant risk, she stressed.  The Committee recommends that the General Assembly consider alternative after‑service health insurance liability funding strategies to mitigate this risk, she concluded.

EVGENY V. KALUGIN (Russian Federation) stressed the importance of ensuring the Office’s independence if it is to function with impartiality and objectivity.  Impartiality means the equal treatment of all staff members, he said, adding that senior managers have a special responsibility as they set the tone for the overall ethical climate within the United Nations.  He expressed concern that the average duration of investigations has grown from 10.8 months to 11.7 months, adding that OIOS must carry out an internal review to address that problem.  The Office should also focus on filling vacant posts or abolishing posts which are no longer necessary, he said.

Ms. NDIAYE thanked the delegates, particularly the representative of the Russian Federation, for their attention to these issues.  The Office is looking closely at ways to improve the timeline for investigations.  It is important for all parties involved.  She said she looked forward to the informal session, where the plans to address the issue of timeliness could be discussed.

Ms. ST. LAURENT also thanked the delegates for their attention to these issues.

United Nations Office for Partnerships

ANNEMARIE HOU, Executive Director of the United Nations Office for Partnerships (UNOPS), introduced the annual report of the Secretary‑General on the Office (document A/76/218).  By engaging key stakeholders, UNOPS serves as a global gateway to spark and co‑create collaborations that accelerate solutions to deliver the Global Goals.  To fulfil its mandate, the Office leverages expertise and networks across its teams and initiatives, which include the Sustainable Development Goals Advocates, United Nations Democracy Fund and the United Nations Fund for International Partnerships (UNFIP).  UNFIP is the primary interface between the United Nations Foundation and the United Nations system.  By the end of 2020, UNFIP disbursed $9.76 million in funding from the United Nations Foundation for United Nations projects.  Of that amount, $4.98 million was used to address global health crises.  Going forward, UNOPS will continue to invest in its capacity to deliver results and take partnerships to scale, she said.

For information media. Not an official record.