BUDGET COMMITTEE IS ASKED TO REJECT EFFORTS BY A STATE TO APPLY DOMESTIC LAW TO INTERNATIONAL COMMUNITY

17 May 1996

Press Release
GA/AB/3078

BUDGET COMMITTEE IS ASKED TO REJECT EFFORTS BY A STATE TO APPLY DOMESTIC LAW TO INTERNATIONAL COMMUNITY

19960517 Cuba Says 'Certification' of UN Spending Limit as Prelude to Dues Payment Not Acceptable; Others Warn of Consequences of Reduction in Services

The demand by the Congress of the largest contributor for "certification" that the United Nations budget did not exceed $2.61 billion as a pre-condition of payment of dues should not be accepted by the General Assembly, the Fifth Committee (Administrative and Budgetary) was told this morning by the representative of Cuba.

The acceptance of that demand, he said, would create the dangerous precedent of the extra-territorial application of a State's national law; the demand came from a State which believed it had the right to dictate and apply its domestic laws to the international community.

The Committee was discussing proposals to save $154 million. The representative of China said the $2.61 billion 1996-1997 budget should not be treated as a ceiling. Activities in the budget should be seen like the construction of a building. "To complete the building, we should not take bricks from the east wall to build the west wall. We should provide more construction materials, instead." Savings from the budget should not affect the full implementation of programmes, and paper and pencils should be returned to conference rooms.

While savings were necessary, said the representative of Chile, the United Nations must be provided with full and efficient conference servicing with equal facilities for all the languages. He expressed sympathy for the views of the Committee on Conferences on the effect the savings could have on the ability of the United Nations to service meetings.

Costa Rica's representative, also speaking for the "Group of 77" developing countries and China, reiterated that the absence of such services would affect the quality of the work of some Member States.

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The Secretariat should explain why it was seeking a greater vacancy rate, especially for professional staff, than the 6.4 per cent requested by the Assembly, said the representative of the Russian Federation, a view echoed by some other delegates.

The rates had been based on projections from programme managers, who were suggesting how they could help achieve the mandated savings, responded Joseph E. Connor, the Under-Secretary-General for Administration and Management. He also answered questions on the criteria for cuts in the budget sections, their impact on the 1998-1999 budget and on the separation programmes.

Statements were also made by the representatives of Bangladesh, Ecuador, Canada and Uganda.

Evan Fontaine Ortiz, the Executive Secretary of the Joint Inspection Unit (JIU), cited several Assembly resolutions to defend the Unit's budgetary allocations.

The Committee is scheduled to meet again at 10 a.m., on Tuesday, 21 May, to conclude its discussions on proposals on how to absorb some $120 million of new mandates within the budget.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this morning to continue its consideration of aspects of the 1996-1997 budget which include discussing the Secretary-General's proposals on how to save $154 million and the total of $120 million in 1996-1997 requirements that might arise for the new mandates of some United Nations activities. Under-Secretary-General for Administration and Management Joseph E. Connor is expected to respond to questions raised by Member States.

(For background, see Press Release GA/AB/3076 of 15 May.)

Statements on 1996-1997 Budget: Progress on Saving $154 Million

NIKOLAI LOZINSKY (Russian Federation) said the Secretary-General's report was vague in some respects and departed from the instructions of the General Assembly's budget resolutions. The Assembly had stated that the savings from the budget should not have any effect on the full implementation of programmes. There was also a lack of concrete proposals to hold back the growth of administrative expenditures. Member States expected more specific proposals from the Secretary-General. The three-stage approach to enhancing the Organization's work was welcome, but not even the implementation of the first stage had been reflected in the report. He supported the views in paragraph 38 of the report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ). (The ACABQ had stated that reporting on measures to enhance the United Nations performance should be much more specific and contain sufficient information to justify that the measures represented improved productivity and sustainable gains.)

He went on to say that the vacancy rates proposed by the Secretary- General had departed from the recommendation of the Assembly, especially regarding professional staff. The rationale behind seeking more vacancies than were recommended by the Assembly should be explained. The report had not explained the full impact of the separation programmes. Concrete information should be provided on the financial implications of those programmes. There should be a more rational relationship between permanent and fixed-term contracts for staff. While the Secretary-General's report was only provisional and a first attempt by the Secretariat leadership to respond to the Assembly, it was a step in the right direction. At this stage, there should be a concrete plan for the budget within the parameters of resolution 50/214, which set guidelines.

ZHANG WANHAI (China) said he agreed with the views expressed by Costa Rica on behalf of the "Group of 77" developing countries and China. He emphasized that General Assembly resolution 41/213 and its budgetary procedures should be fully complied with. The stipulations regarding the contingency fund, for instance, should be fully observed. The budget adopted

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last December should not be treated as a ceiling. The activities covered in the budget were like the construction of a building. "To complete the building, we should not take bricks from the east wall to build the west wall. We should be provided with more construction materials, instead." The Secretary-General had not been clear as to what programmes would be delayed as a result of the proposed cuts. Anyway, the Assembly had resolved that the savings should not affect the full implementation of programmes. The Fifth Committee had, at one time, discussed the issue of whether water should be provided in the conference rooms. The supply of paper and pencils, on the other hand, had been stopped without any consultation. Lack of water would not affect delegations, but lack of paper and pencils would. That problem should be solved soon.

BRUNO RODRIGUEZ PARRILLA (Cuba) said he supported Uganda's representative's wise assessment of the budget and awaited the answers to the very precise questions asked by the representative of Egypt. The Secretary- General's interim report on the budget was ambiguous and would further complicate the forthcoming negotiations. His next report should be presented in the normal budgetary format containing more detailed information on the budget's programmatic and budgetary aspects. Stressing the complexity of the recent budgetary negotiations, he called for more prudence and seriousness over the temptation of some Member States to try to renegotiate the terms agreed on in order to address internal political agendas.

On the mandate of the budget resolution -- 50/214 -- he said it was important to know the interpretation that the Secretariat had given to the Assembly's mandate. The Committee should be provided with clear and detailed information on the measures taken and the amounts involved. Regarding vacancy rates, he said approval of the proposed 9 per cent rates for Professional staff and 7 per cent for General Service staff would have a negative influence on the implementation of approved mandates, and would be contradictory with part II of the budget resolution.

He said the Congress of the larger contributor demanded that its Secretary of State certify that the Organization's budget had not exceeded $2.6 billion before it could approve the payment of its contribution to the Organization. Such a policy was not only contrary to the obligation by Treaties of the members of the Organization, he said, but if accepted by the General Assembly, it would create a serious precedent -- the extra-territorial application of a State's national legislation. The intention was not surprising, he added, since it came from a State which believed it had the right to dictate and apply its domestic legislation to the international community.

He called for more information on the Secretariat's plans for the proposed level of vacancies and the costs for voluntary retirement. Referring to the trend of an increase in personnel on loan, he cautioned that it would

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not be a solution to the Organization's financial problems. He was also concerned how that practice would influence the Secretariat's impartiality, as well as the geographic imbalance that it created in the Secretariat.

Calling for more information on the Efficiency Board, he said "silence has been the only answer" to previous requests for such information. The 1996-1997 budget was adopted under exceptional circumstances -- an institutional crisis "sustained by financial blackmail and the threats of drastic measures of force". It was a political agreement to solve the difficult situation the Organization was facing, but it could not prejudge the budgetary level for the next biennium's budget nor did it constitute a budgetary ceiling. If any delegation wished to modify or renegotiate part of the budgetary process contained in resolution 41/213, his delegation would be forced to propose to renegotiate it totally, including the process of decision-making.

He said that while he respected the Secretary-General's statements that programme delays and postponements were unavoidable, they seemed to show that the Secretary-General was in no condition to make proposals in accordance with the mandate that he received from the General Assembly. Reduction of the budget should not be the goal; instead, the result should be better efficiency in the Organization's work.

SYED RAFIQUL ALOM (Bangladesh) said he welcomed the Secretary-General's holistic approach to the implementation of the difficult task of cost savings. His transparency and efficiency in pursuing the task was appreciated. The ACABQ had prepared an excellent report which had brought out some hidden areas of concern. It deserved much thought and attention and had deterred Member States from taking hasty decisions.

The Organization's budget, he said, was more than a balance sheet; it was a programme budget with a different culture and impact which was more demand-driven. The programming aspect of the process responded to the needs of the international community. Once that was agreed upon, resources were then planned. Reviewing the programme budgetary process, he said the constant factor was the demand -- the programme activities. There was no way to shift or deviate from that. It offered some flexibility. "We are sometimes putting the horse before the cart. We are making the supply side constant and shifting the demand side."

The second issue of concern was theoretical, he continued. There were certain perceptions that generating savings was guided by three assumptions. The first assumption was the disproportionate size of the Organization and that there was overlap and duplication. Undoubtedly, the Committee had to pay attention to those aspects. However, the approach of cutting and abolishing had only instant appeal, but did not work in the long term. The Organization presented the challenge of keeping the system manageable and making it more

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responsive to the needs of the international community; how to ensure that multilateral processes were not controlled by a few; and how to ensure it dealt with changing issues.

The second assumption was that the Organization was a sprawling bureaucracy, he continued. He compared its size to a number of large-size international and regional bodies and stressed the complexity and the diversity of the United Nations work. The question was whether the size and quality of the staff was commensurate with its tasks. It was a challenge which could not be dealt with by quantitative approach.

The third assumption was the Organization's excessive cost, he said. It was important to note that its budget was less than that the New York City Police and Fire services for an organization which was increasingly cast in the role of the police for the entire world. Why not then a higher budget? he asked. Increased efficiency was important, but the level of expenditure must be related to the objectives to be achieved. Strategies such as subcontracting services were counter-productive. He cautioned against any abrupt decisions and called on the Secretary-General to provide the Member States with detailed information before he implemented any action. They could then make decisions to help to salvage the Organization from further deterioration.

FABIAN PALIZ (Ecuador) said his delegation's position had been expressed by the representative of Costa Rica, on behalf of the Group of 77. He wanted answers to the questions the Egyptian delegation had asked. He reiterated that any action to save money should not affect programmes mandated by the Assembly. His Group and China had warned of the negative consequences of the reduction of the budget for the 1996-1997 biennium. Today, the United Nations was having trouble in implementing activities that had been mandated. The political nature of the United Nations and its purpose should always be considered, and Member States should provide the resources to meet its objectives. The United Nations was not a shareholder organization.

FERNANDO VARELA (Chile) expressed concern that if budgetary savings were made more widespread, they could affect the work of the Organization. While savings were necessary, it should be recalled that the United Nations was a political organization. It must be provided with full and efficient conference servicing with equal facilities for all the languages. In that regard, he expressed sympathy for the views of the Committee on Conferences on the effect the savings could have on the ability of the United Nations to service meetings. He highlighted the report of the ACABQ which had warned that the cuts might lead to a deterioration of all the work of the United Nations if the savings were not selected carefully. The United Nations was committed to some mandates, which should not be affected. Since more than 70 per cent of expenditure was on staffing, the elimination of posts would affect some programmes. Therefore, measures to save should take into

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consideration the mandates of recent conferences that had been held at the global level. He appreciated the work of the Secretariat in presenting its provisional report regarding savings which could be achieved through efficiency measures, but the quality of programmes and activities must not decline, though.

NAZARETH INCERA (Costa Rica) said that some delegations had brought to her attention the fact that a portion of the 13 May statement by Costa Rica, on behalf of the Group of 77 and China, had been omitted in translation. The omitted part had stressed the importance of ensuring that adequate resources were made available for conference services. The absence of such services would affect the quality of the work of some Member States. The omission should be rectified.

EVAN FONTAINE ORTIZ, Executive Secretary of the Joint Inspection Unit (JIU), recalled the statements by Canada, on behalf of Australia and New Zealand, and by the delegation of Mexico and then spoke mainly on paragraph 7 of the Secretary-General's report which had stated that the JIU had not proposed reductions. He said that the paragraph was incomplete and misleading. It was hard to understand why the JIU had been singled out even though it was not the only oversight unit that had not proposed cuts in its budget. While Assembly resolution 50/214 had asked the Secretary-General to ensure fair, equitable and non-selective treatment of all budgeted sections, it explicitly did not mean that the Secretary-General's proposals be applied evenly across the board.

He said that there had been extensive correspondence between the Unit and the Secretariat. The JIU had stated that resolution 50/215, on the budget, was comprehensive and should be implemented with respect for the full legislative history leading to its approval. Part II, paragraph 65 of resolution 50/214, had requested the Secretary-General to present proposals on strengthening the Unit's secretariat in the framework of the revised estimates for the budget. The Secretary-General had been asked to strengthen external oversight mechanisms, in close cooperation with the JIU and in consultation with the Administrative Committee on Coordination (ACC). That was a clear mandate for the Secretary-General to pay attention to the JIU's needs, as reiterated in several resolutions. The Unit looked forward to the Secretary- General's implementation of the mandate. Paragraph 64 of the same part II had asked him to fill existing vacancies in the JIU secretariat no later than 30 June. The provision precluded any cost-saving measures related to the JIU staff expenditure. The Unit was waiting for the Secretary-General to take action before next month to fill the four vacancies in its secretariat. Since staff costs were some 89.9 per cent of the JIU budget, the implementation of the Secretary-General's proposal to save $540,000 without cutting staff would have required a 55.41 per cent reduction from non-staff expenditures, which was unrealistic. The Unit thanked the Group of 77 for understanding why the JIU should be excluded from the current exercise.

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Mr. Fontaine Ortiz added that paragraph 8 of resolution 50/214 had stated that the proposed budget had not taken into account previous legislation on the strengthening of external oversight mechanisms. The resolution had endorsed the ACABQ request that the Secretary-General report on what he and the executive heads of participating organizations had done to consider giving the JIU extrabudgetary resources and programme support. As far as the JIU knew, no steps had been taken in that regard. The Unit looked forward to the Secretary-General's action on that directive. The different status of the JIU had been recognized by the Secretary-General in implementing recommendation 15 of the "Group of 18" report to cut United Nations staff by 15 per cent, as requested by Assembly resolutions 41/213 and 42/211. The United Nations share of JIU's budget was about 21.34 per cent. Therefore, about 78.66 per cent of any savings would have to be reimbursed to the Unit's other participating bodies. The proposed measures to cut the JIU budget would contradict Assembly directives. Recently, though, the JIU had informed the Secretariat that it had projected savings of $148,530 in 1996, some 3.9 per cent of its annual allotment.

SAM HANSON (Canada) said he was prompted to intervene following the statement of the representative of the JIU, since it was an unusual procedure for such statements to be made. The JIU was a jointly funded activity with a broad mandate; nevertheless, its mandate did not include that that body should sit in judgement on Member States. He looked forward to the JIU's full cooperation with the Secretary-General in his attempt to achieve savings in the budget.

JOSEPH E. CONNOR, Under-Secretary-General for Administration and Management, responded to questions raised by Member States during their discussion on the budget. Referring to the vacancy rate of 9 per cent for Professional staff and 7 per cent for General Service staff being pursued by the Secretariat, he said those rates had resulted from projections of programme managers on the number of vacancies required to achieve the mandated level of savings. That level could not be achieved without a vacancy rate in excess of 6.4 per cent, as stated in the budget resolution. Programme justifications for the increased rates were based on the attempt to fulfil all mandates, he continued. The gains made should allow the delivery of all mandated programmes.

In response to a question asked about the criteria for the reductions in the various budget sections, he said reductions were distributed proportionately in all programme areas, except section 20 -- technical cooperation. Reductions in that section were determined by a relevant resolution which called for the maintenance of the same budgetary level as in the 1994-1995 biennium.

Regarding requests for the definition of the terms "delays", "deferrals" and "postponements", and for a list of activities subjected to such action, he

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said the time constraints for submission of the interim report did not allow such detailed information to be provided. The subsequent report would provide such details and other proposals by the Secretariat for savings. Programme managers would try to minimize delays, deferrals or postponement of programmes, he added.

On the issue of the impact of the present approach to reductions on the 1998/1999 programme budget, he said preparations of that budget would be guided by the requirements of resolution 41/213 that established the budgetary process. However, it provided no guidance on vacancy rates. The Secretary- General would take account of all relevant facts when formulating his programme outline.

Regarding the treatment of the representational allowance, he said initial payment had been due in early January but had been withheld, pending improvement in the Organization's financial situation. The allowance would now be paid by the end of May. He also responded to the question of what action the Secretary-General was expecting from the General Assembly. The Secretary-General's proposals for savings had been in response to the Assembly's request. On the question of the reduction in the budget of the Economic Commission for Latin American and the Caribbean (ECLAC), vis-à-vis that of other regional commissions, he said the reduction applied was close to the expected amounts.

On proposed reductions for the Department of Administration and Management, he reported that his own department had been reduced by 6 per cent and that of the Office of Human Resources Management (OHRM) by 4 per cent. Those reductions had been very pragmatic. He also referred to the $3.7 million reduction in the area of construction and maintenance.

Turning to the issue of human resources, he explained the rationale for the early separation programmes carried out in 1995 and 1996. The 1995 programme had been developed to give the Organization some flexibility and help it to diversify its mix of skills. The 1996 programme was in response to the budget resolution, to ensure cost savings. Efforts were made to achieve the vacancy rates by attrition and other natural means. Staff members in posts identified to be vacated were being given priority for redeployment. The funding of the early separation programme had been estimated at $15 million.

Providing more information on the numbers of staff separated in 1995 and the numbers of staff based on geographical representation, he said his department was in the process of putting together the compendium of posts for redeployment. He wanted to avoid a brain drain of staff who could contribute to the Organization's work. He stressed the importance of investment in staff resources and the need to ensure that those who could contribute to the Organization's efficiency would continue to do so.

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In response to a question on the legal justification for the early separation programme, he said it was based on mandates given by the Assembly. The Secretary-General also had the power, by staff regulations, to terminate appointments in order to reduce staff. He also responded to questions on the ongoing freeze in recruitment and the national competitive examinations. He assured the Committee that the national competitive examination would be continued as a means to maintain a renewal of staff resources.

Mr. Connor went on to say that the bulk of the more than 300 issues proposed for efficiency gains were directed at ensuring efficiency for the long term. Upgrading of the Organization's information technology was required to serve Member States better. The costs of the Efficiency Board were so minimal that there were no plans to scrap it presently and no plans to institutionalize it, either. Its working groups, not the Board, had been staffed by the commitment of experts and fellows from some 30 countries. A trust fund had been set up to support the Board and facilitate the participation of people from developing countries. Voluntary contributions would be reported to the ACABQ.

Programme managers had been asked to conduct efficiencies mainly to mitigate the effects of the budget cuts, increase the Organization's effectiveness and achieve better value. Savings might result from doing things better. The United Nations was trying to do more with less. Efficiencies being put in place were not cost cutting per se, but efforts to do things better. There were three phases of the efficiency gains. Phase one was part of the preparation of the budget and had involved the identification of cost-effective measures from which efficiency gains could be realized without hurting the implementation of mandates. That had involved measures such as streamlining structures and simplifying work procedures. Phase two would be to identify areas where duplication and overlap existed, and a third phase would involve a review of activities and services that were deemed to provide minimal or no value; those would be brought to the Assembly's attention for appropriate decision. Cross-cutting reviews that would lead to the development of strategic plans to make the United Nations more effective were being considered. For instance, the idea of which computer system to adopt was something that had to be considered. The IMIS project was alive and would help take the United Nations into the twenty-first century.

Ms. INCERA (Costa Rica), speaking for the Group of 77 and China, said that the answers from the Secretariat had not covered all the concerns raised collectively or separately by members of the Group. There was a gap between what the Secretariat and the ACABQ were saying. The Group trusted that the questions would be broadly considered, as that was essential to effective participation in meetings which could then lead to agreements. The Secretary- General should certify that the measures he proposed would not affect the full implementation of mandated programmes and activities.

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NESTER ODAGA-JALOMAYO (Uganda) said that the questions that had not been answered should be dealt with at a later date. The replies from Mr. Connor were a basis for subsequent discussion and dialogue. He thanked the Under- Secretary-General for his reply on representational allowances. He did not question that entitlement, but felt that, due to the current financial crisis, all sides should join hands to achieve savings. When things improved, pencils and paper should be returned to the conference rooms. In February, one of the senior ministers of Uganda was at the United Nations and had seen some of his colleagues with computer notebooks, thinking that the United Nations had provided them in place of pencils and paper. The minister had not been aware of the decision to remove the pencils and paper. They should be restored.

Regarding cost savings, he said he hoped that the Secretariat was conscious of the possible unintended effects of re-engineering.

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