STREAMLINED PEACE-KEEPING, RAPID LIQUIDATION OF COMPLETED MISSIONS CALLED FOR IN ADMINISTRATIVE AND BUDGETARY COMMITTEE

7 November 1996

Press Release
GA/AB/3109

STREAMLINED PEACE-KEEPING, RAPID LIQUIDATION OF COMPLETED MISSIONS CALLED FOR IN ADMINISTRATIVE AND BUDGETARY COMMITTEE

19961107 Procurement Procedures, Payment of Consultants, Disability Benefits for Peace-keepers, Among Other Issues Addressed

The Secretariat must act quickly to streamline peace-keeping operations and liquidate completed missions within specific time limits in the interests of financial propriety and settling the outstanding claims of troop- contributing States, the Fifth Committee (Administrative and Budgetary) was told this morning, as it began debating financial statements and reports of the Board of Auditors.

The suggestion was made by India's representative who addressed procurement procedures, saying that the Secretariat must correct widespread use of ex post facto approval of large contracts, the invitation of bids from prequalified vendors without advertisements and the extension of contracts without bidding. Also, the implementation of the Board of Auditors recommendations on irregularities in the recruitment and payment of consultants must be a priority of the Secretary-General, and the Secretariat should resume reporting regularly to the Assembly on their employment, he said.

The Committee also continued its consideration of the proposed savings from the 1996-1997 budget and took up the administrative and budgetary aspects of peace-keeping financing and human resources management.

Speaking on death and disability benefits for peace-keepers, Nepal's representative questioned the rationale that would have the United Nations opt for a self-insurance scheme, and sought clarifications from the Secretariat. The representative of Pakistan said that death and disability payments should be made quickly to soldiers and their survivors, and uniform criteria applied in paying death and injuries benefits.

Statements, largely on when the issues of peace-keeping financing and the use of gratis military officers would be debated in the Committee, were made by the representatives of Sierra Leone, India, Ireland (speaking for the

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European Union), Canada, Nepal, Pakistan, Zambia, Uganda and China. The representatives of Cuba, Costa Rica and Germany made procedural statements regarding the budget.

The Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Conrad S.M. Mselle, introduced his Committee's consolidated report on peace-keeping financing and human resources management.

The United Nations Controller, Yukio Takasu, introduced the Secretary- General's reports on the administrative and budgetary aspects of peace-keeping financing and responded to questions raised by Member States. The Assistant Secretary-General for Human Resources Management, Denis Halliday, introduced a report on the Secretary-General's special representatives and envoys, and responded to various questions.

The Director, Specialist Services Division, Office of Human Resources Management (OHRM), Momoyo Ise, introduced the report on mission subsistence allowances (MSA). The Deputy Director, Peace-keeping Financing Division, Bock Yeo Cheng, also answered questions by delegations.

The Committee is scheduled to meet again at 10 a.m. tomorrow, 8 November, to take up appointments to fill vacancies in subsidiary organs and other appointments.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this morning to take up the administrative and budgetary aspects of the financing of peace-keeping operations and to continue considering financial statements and reports of the Board of Auditors. (For background on the financial statements and auditors' report, see Press Release GA/AB/3107 of 5 November.)

The Committee is also scheduled to continue its consideration of human resources management and of proposed savings from the 1996-1997 budget.

Administrative and Budgetary Aspects of Peace-keeping

The Committee has before it a report of the Secretary-General on the establishment of a peace-keeping reserve fund (document A/48/622). The Fund was set up by a General Assembly resolution on 1 January 1993 as a cash flow mechanism to ensure the rapid response of the United Nations to the needs of peace-keeping operations. The Assembly had then decided that the level of the Fund should be $150 million.

According to the report, the Assembly had also resolved at that time to finance the Fund by transferring the balance in the accounts for the United Nations Transition Assistance Group (UNTAG) in Namibia, the United Nations Iran-Iraq Military Observer Group (UNIIMOG) and some balances from the General Fund (the regular budget, the Working Capital Fund and the Special Account).

The report states that the Reserve Fund has been funded by transfers of $47 million from the UNTAG account and $17.2 from UNIIMOG upon their closure as of 31 December 1992. The Fund also received a voluntary contribution of $400,000 from Switzerland and interest of $400,000.

The report seeks a review of the current established level. One option -- recommended in 1993 by an advisory group on the financing of the United Nations -- would be to establish a $400 million revolving fund and finance it through three annual assessments. It also says that Member States' respective shares of the Reserve Fund should be determined quickly.

A subsequent report of the Secretary-General on the Reserve Fund (document A/49/654) states that a balance of $204,353 was available as of 31 October 1994. About $85.7 million was still due to the Reserve Fund, from the General Fund ($82.6 million), from UNTAG ($2.3 million) and UNIIMOG ($894,390). Loans of $64.9 million have been granted to four peace-keeping operations.

In a related report on the Reserve Fund (document A/50/976), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) provides further updates. As of 31 December 1995, the Fund had received a total of

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$93.3 million, including $89.3 million transferred from some peace-keeping missions and $3.7 million in interest income.

The ACABQ points out that proposals to raise the Reserve Fund's level have been overtaken by events. Spending for peace-keeping missions from 1 July 1996 to 30 June 1997 is projected at $1.3 billion, down from 1994's $3.5 billion. Monthly costs have dropped from $215 million to some $100 million. Therefore, there are no longer compelling reasons for establishing a larger revolving fund at $400 million.

The Secretary-General's report on a review of the rates of reimbursement to the Governments of troop-contributing States (document A/48/912) states that the standard rates were initially established by the Assembly in 1974 and made effective in 1973. They have been revised on several occasions, with the latest being in 1991. The rates for pay and allowances per person per month for all ranks were revised from $500 in 1973 to $988 in 1991; and for supplementary payment for specialists raised from $150 to $291. The rate of $65 per person per month was reimbursed for personal clothing, gear and equipment issued by governments to their troops. Since the standard rates were revised effective July 1991, and since the overall absorption factor has dropped by 6.2 per cent to 43.1 since 1989, the current rates are reasonable and no adjustment is necessary now. The absorption factor, expressed in percentages, is the portion of expenses of troop-contributing States that are not covered by the reimbursement rates.

In its report on reimbursement rates (document A/50/1012), the ACABQ states that the data from the Secretary-General were outdated, since they were based on a survey dating back to 1992-1993 and the number of troop contributors has risen from 57 to 70. The Secretary-General should therefore be asked to conduct a new survey before the Assembly acts on the rates. The ACABQ recommends that the low response to surveys by troop-contributing States should be addressed by the Assembly in order to obtain more accurate data to help decide on whether to change the reimbursement rates.

The Secretary-General's report on surplus asset storage facilities and mission start-up kits (document A/49/936) states that the creation, since 1991, of several peace-keeping missions for short periods had led to the problem of what to do with the huge volumes of reusable equipment left over from closed operations. Coinciding with the end of the United Nations Transitional Authority in Cambodia (UNTAC) in 1993, the Organization decided to place priority on keeping the assets that could be re-used. In addition to the problem of how to deal with surplus assets, sometimes worth up to $100 million, was the question of supplying new missions on time. Therefore, the establishment of facilities to store surpluses and the creation of a standard supply of materials needed in the initial phases of missions -- mission start-up kits -- were considered.

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The United Nations store in Pisa, Italy, set up to receive assets after the closure of the United Nations Emergency Force (UNEF I) in 1956, is too small for current needs. With the need to respond quickly to new peace-keeping initiatives, it was suggested that the United Nations should be able to field small missions within 48 hours of authorization and that start-up times to achieve operational self-sufficiency should be no more than 10 days for small missions (of up to 500 people), two to three months for medium-sized missions (up to 5,000 personnel) and four to five months for large missions (above 5,000 personnel).

Regarding where to store such kits and surplus assets, the United Nations asked several governments for facilities to augment those at Pisa. The Italian Government offered some at a military site in Brindisi. The base's strategic location relative to United Nations missions in the former Yugoslavia, the Middle East and Africa makes it more valuable. When fully developed, it will cover more than 400,000 square metres and some 45 buildings.

Currently, a small number of international and local staff is needed to manage the operation, to carry out activities related to the United Nations Peace Forces (UNPF), as well as to inspect and register equipment from closed missions. The requirements in the six-month period ending 31 December 1995 were projected at $6.6 million, covering renovations to premises, equipment, supplies and staffing.

The Secretary-General proposes to meet those costs from the budgets of the UNPF and other missions and to identify such spending in his performance report to the Assembly. He proposes that the Assembly confirm its acceptance of the premises and approve the creation of the Logistics Base in Brindisi. A memorandum regarding the Base was signed in November 1994 between the United Nations and the Italian Government.

The Committee has also before it the Secretary-General's consolidated report on the United Nations Peace Forces in the former Yugoslavia and on the administrative and budgetary aspects of the financing of peace-keeping missions (document A/51/389), which proposes to limit the Organization's peace-keeping liabilities.

The report describes the scope of United Nations liability for the activities of United Nations forces, especially in relation to the types of damage most commonly seen in United Nations operations. They include non-consensual use and occupancy of premises, personal injury and property loss or damage as a result of the ordinary operation of the force, as well as injury and damage resulting from combat operations.

The report comprises three parts: the first describes the scope of United Nations liability for damage resulting from the ordinary operation of

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the force, from "operational necessity", and combat-related damage. The second examines the existing procedures for settling third-party claims, the difficulties experienced and modified mechanisms to ensure simpler settlement of third-party claims. The third part proposes financial and time limits on the Organization's liability and suggests measures of recovery from States that contribute contingents.

The United Nations has, since the inception of peace-keeping missions, assumed its liability for damage caused by members of its forces in the performance of their duties. In accordance with section 29 of the Convention on the Privileges and Immunities of the United Nations, it has undertaken in its model status-of-forces agreement to settle, by means of a claims commission, the claims that arise from damage caused by members of the force and which, due to the immunity of the Organization and its Members, could not be settled in local courts.

The report explains the scope of United Nations liability. It states that the use of land and premises for the headquarters, camps and offices of a United Nations force and for accommodating its members are essential in a host country. Based on the assumption that, by inviting a peace-keeping force to its territory, a host State has agreed to provide it with premises, the various status-of-forces agreements have included an obligation on the part of the host State to provide a United Nations peace-keeping mission, free of charge, with premises for its use. The obligation is reflected in article 16 of the model status-of-forces agreement. But article 16 of the model agreement has rarely been applied to the letter, with the result that, with few exceptions, the United Nations has had to negotiate the rental of its premises with the owners of private premises.

The Secretary-General states that the Organization's liability for property loss and damage caused by its forces in the ordinary operation of a force is subject to the exception of "operational necessity". He defines operational necessity as a situation in which damage results from the necessary actions taken by a peace-keeping force in pursuing its mandate. The determination of such a necessity remains the discretion of the force commander.

According to the Secretary-General, the scope of the Organization's third-party liability will have to be determined in each case according to whether an act by members of its forces violated international law. Such liability would arise if damage was caused in violation of international law and could not be justified on grounds of "military necessity". Liability usually lies where the command and control of a force is vested.

The Secretary-General states that there are two kinds of procedures for handling third-party claims. One is provided for under article 51 of the model status-of-forces agreement and the other is established internally by

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the United Nations. The model agreement provides for a standing claims commission for settling disputes, with both parties -- the United Nations and the host country -- taking part equally. The internally created mechanism, on the other hand, leaves the processing and final adjudication of claims in the Organization's hands.

While article 51 of the model agreement allows for the establishment of a standing claims commission to settle private law disputes involving a United Nations mission or any of its members, third-party claims are settled differently. They are handled by local claims review boards, established in mission areas, which review claims for injuries, death and property damage attributable to official acts by members of a mission. When a claims review board -- established under authority delegated by the United Nations Controller -- approves a settlement amount within its authority, the sum is paid out in the field. Sums exceeding the board's financial authority are referred to Headquarters for action.

Consisting typically of at least three staff members, the claims review board mechanism applies to all United Nations operations regardless of size. But the increasing number and complexity of claims from recent major operations have taxed the Organization's ability to deal with them promptly. Shortage of staff for investigating and processing claims at the field level and Headquarters has worsened problems such as delays.

In response to the problems, the Secretary-General proposes modifications to the procedures regarding claims. The financial authority of the local claims review boards could be changed on the basis of the work of the Interdepartmental Working Group on Third-party Claims. Meanwhile, claims exceeding the local boards' financial authority should continue to be forwarded to Headquarters with recommendations for final decisions. Also, instead of having only one local review board in a peace-keeping area, several could be created. The boards must be given the administrative, financial, operational and legal personnel they need.

Commenting on the lump-sum payment of claims, by which the United Nations negotiates a settlement directly with the Government acting on behalf of its nationals, the Secretary-General says that it offers the Organization the advantages of quick settlement and limitation of its liability. Under that type of settlement, the Government -- usually that of a host State -- submits its nationals' claims to the United Nations. It then negotiates on their behalf for a lump-sum amount to settle those claims. Once the amount is paid, it is up to the Government to distribute it as it sees fit.

The lump-sum approach has several advantages, according to the Secretary-General. It avoids long and costly proceedings necessary for dealing individually with a large number of claims. Since the lump-sum amount would be the final settlement of claims, it would set a limit to the

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Organization's financial responsibility. It would also prevent the continued submission of individual claims long after an operation has been ended.

Due to the huge increase in the number and amount of third-party claims against the United Nations, the Secretary-General states that the General Assembly may consider some limitations on the Organization's liability. They include financial and time limits. Accordingly, claims submitted after an unreasonable period of time would not be considered.

Providing estimates on third-party liability claims, the Secretary- General states that a total of 151 claims were pending in relation to the United Nations Peace Forces in the former Yugoslavia. They include 37 cases worth some $28.8 million.

The report of the Secretary-General on the entitlements of staff on peace-keeping assignments, including mission subsistence allowance (MSA) (document A/50/797) provides a comprehensive overview of all facets of such entitlements, including the establishment and application of the MSA. He states that the MSA, as presently applied, is commensurate with the exposure of staff to expenses arising from mission service.

The Secretary-General defines the MSA as the Organization's total contribution towards the living expenses incurred by staff assigned on special missions. It is not intended to address any of their continuing duty station costs. Those are covered -- in the case of Field Service and Professional staff -- by the continued payment of base salary, post adjustment and other entitlements such as mobility/hardship allowance and rental subsidy. For General Service staff, their duty station costs are provided for by the payment of local salaries and allowances.

The MSA is also paid to military observers, civilian police and human rights monitors recruited from outside the United Nations. It is the sole pay such personnel get from the Organization. It is not paid to locally hired staff in the General Service and related categories.

The MSA, the report states, is based on three principles: a mission's operational needs; the need to attract well-qualified persons; and the need to keep experienced personnel for service in field missions. The regular MSA rates for United Nations special field missions, as of 1 September 1995, range from $15 daily for the United Nations Mission of Observers in Tajikistan (UNMOT) to $125 for the United Nations Iraq-Kuwait Observation Mission (UNIKOM). Eligible persons are paid higher rates for their first 30 days on missions. For example, while those assigned to UNMOT get $115 initially, the sum drops to $15 after 30 days. In the same vein, the rates in the United Nations Mission in Haiti (UNMIH) change from $123 in the first 30 days to $87 daily.

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The Secretary-General's report explains that MSA rates are established and maintained by the Office of Human Resources Management after conducting field surveys on living expenses in mission areas. He adds that, for the most part, United Nations MSA rates are less generous than those of the United States federal civil service. In many locations, the United Nations MSA is about half the per diem paid out by the United States Department of State.

The Secretary-General differentiates the MSA from the United Nations daily subsistence allowance (DSA) or national travel or subsistence allowances. The DSA is part of what the United Nations pays towards the travel expenses of a staff member on initial appointment, on change of duty station, on separation from service, for short-term travel on official business, for home leave travel and on family visit or education grant. It does not cover short periods of temporary assignment.

The International Civil Service Commission (ICSC) establishes DSA rates to cover the costs of hotels and meals, says the Secretary-General. About 15 per cent is normally added for "incidental" expenses such as tips, local transportation and laundry. The DSA rates are raised by 15 per cent for D-1 and D-2-level staff and by 40 per cent for Assistant- and Under-Secretaries- General. The DSA rates, as of 30 September 1995, range from $241 daily for the first 60 days for UNIKOM, to $200 for the United Nations Protection Force in Bosnia and Herzegovina (UNPROFOR), to $13 in some locations of the United Nations Assistance Mission for Rwanda (UNAMIR).

In a nutshell, he says that the DSA offsets travel costs for short periods, while the MSA covers subsistence costs incurred over longer periods. The DSA focuses only on travel-related expenses, whereas the MSA takes into account other costs such as those associated with assignment and conditions of life and work.

The report also provides information on other entitlements such as hazard and danger pay, as well as per diem, hardship living quarters and foreign transfer allowances. It contains definitions of the various allowances, as well as tables and annexes of facts and figures.

In his report on the surplus asset storage facilities and mission start-up kits at the United Nations Logistics Base (document A/50/907), he asks the Assembly to approve the $7.9 million gross ($7.4 million net) cost estimates for the Base for the period 1 July 1996 to 30 June 1997. He also asks it to include in each peace-keeping mission's budget an amount to meet the Base's financing needs for that period.

Since the signing of the memorandum, the Base has been funded on an ad hoc basis and from the budgets of peace-keeping missions, primarily the UNPF. The funds were spent on general temporary assistance, premises, transport, communications and other equipment, as well as freight charges.

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The ACABQ, in its report on the Brindisi Base (document A/50/985), recommends that the Assembly approve the $7.9 million gross for the Base to be prorated among individual peace-keeping budgets. However, any additional appropriation required should be justified by the Secretary-General in the context of the performance reports of the relevant peace-keeping missions. The $7.9 million gross estimates are based on a total of 16 international and 17 local staff and include provisions for mission subsistence allowance for international staff. The ACABQ asks the Secretary-General to review the staff levels and report in his next budget for the Base. It says it understands that once a budget and staff structure are approved, the payment of mission subsistence allowance will stop.

The report states that the ACABQ does not oppose the Secretary-General's proposal to establish 33 posts as core staff, changing an ad hoc arrangement in which the base was run with up to 38 staff funded from general temporary assistance.

With the Brindisi Base playing a pivotal role in receiving and deploying assets to and from field missions, the maintenance of a comprehensive central inventory for all operations will be critical, the Secretary-General states in his report on the management of peace-keeping assets: policy, technique and accounting issues (document A/50/965). Although each mission will be responsible for its own assets inventory, the Base will provide oversight under the supervision of the Field Administration and Logistics Division of the Department of Peace-keeping Operations. Mission inventories will be electronically linked to a master inventory at the Base.

Such a master inventory must, among other things, have a cataloguing system that incorporates a combined classification and identification process that will help achieve a common "supply language". The Secretariat is considering the introduction of a common supply language within peace-keeping missions, based on the Codification System of the North Atlantic Treaty Organization (NATO), which is currently used by some 74 countries. The NATO system is being tried for six months by the Secretariat.

The Secretary-General adds that, when missions are closed, assets that are not immediately required elsewhere will be reserved at the Base.

It is recommended that assets bought for peace-keeping missions should be accounted for through detailed records valued at their initial purchase prices. They should be transferred to the Base and field missions funded through assessments at the same price, with no additional cost to Member States. Redeployments to and from activities funded voluntarily would be charged at depreciated rates. The Secretary-General asks the Assembly to endorse those proposals.

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The ACABQ concurs with that proposal in its consolidated report on, among other issues, the management of peace-keeping assets (document A/50/985). It recommends that the results of the six-month trial of the NATO Codification System should be reported to the Assembly before a decision is taken to permanently use it. A comprehensive analysis of possible alternatives to the development of a new codification system should also be provided.

A report of the Secretary-General responds to some concerns on the implementation of the recommendations of the Board of Auditors on an inventory control system for non-expendable property at Headquarters (document A/C.5/50/51). The four main concerns raised by the Board are as follows: property accountability should be transferred to end-users; correcting the deficiencies and updating inventory records will require a physical inventory of non-expendable property; the value of the cumulative inventory of non-expendable property is unreliable; and the inventory controls and property records for non-expendable property are deficient and unreliable.

On the transfer of accountability, the Secretary-General states his intention to delegate authority to each head of department and office over assets assigned to his unit.

On the creation of a physical inventory of assets, he writes that one was conducted at Headquarters from June to August 1995. The results showed that there were non-expendable items worth some $19.3 million, special items of about $36 million and group inventory items worth about $25.1 million for a total value of $80.4 million. The total of the three categories of property has been recorded in a computerized system and constitutes a central record of the Organization's fixed assets at Headquarters. All property owned by or loaned to the United Nations in serviceable condition has been recorded.

There are three categories of non-expendable property -- non-expendable property valued at $1,500 or more per unit at the time of purchase and having a service life of at least five years, including generators, kitchen equipment, major equipment and vehicles; special items, regarded as attractive, easily removable because of their size, and costing $500 or more, including computers, cameras, televisions, facsimile machines, as well as tape recorders; and group inventory items, including furniture and modular work stations.

The Secretary-General states that a computerized system has been developed to make inventory controls and records reliable.

In his report on management review and roving finance officers for peace-keeping operations (document A/50/983), the Secretary-General says that their functions were proposed to improve the management of those missions, by providing support to managers and helping to enhance performance in executing mission mandates. They would support the system of accountability and

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responsibility of peace-keeping programme managers, ensuring the efficient administration of their human and financial resources.

One way of addressing shortages of experienced finance staff, particularly during missions' start-up or expansion phases, has been the temporary assignment of personnel from Headquarters or other field missions to assist until the missions were better staffed, says the Secretary-General. That is usually used only as a stopgap measure to meet specific needs for limited periods. However, experienced staff could be used more regularly when help is needed at any stage of a mission's life cycle. The "roving finance officer" function represents an important capability for prompt response from Headquarters to provide operational support needed in the field. The officers could help in the start-up, expansion and liquidation of missions, general "trouble shooting" and staff training. Their functions can be categorized as financial planning and management; operational support; and review and control. They can ensure, at the outset of missions, that appropriate financial systems and procedures are established.

With the current lack of capacity to undertake review and control functions, the Secretary-General states that management should provide missions with a management capacity in the form of "management review officers", who can help in the overall coordination of programme implementation. While roving finance officers are based at Headquarters or other large offices and placed on call to serve in missions on short-term bases, the functions of a management review officer would be performed by a mission staff member. The officers will review mission management procedures and practices, recommend ways to improve them and guide the implementation of their suggestions. The functions of review officers can be summarized in three broad categories: review and analysis of management practices; improving management practices and programme coordination; and establishing and implementing follow-up mechanisms for corrective action.

In a consolidated report, containing comments on the management review and roving finance officers (document A/51/646), the ACABQ recommends that the Assembly take note of the Secretary-General's report. Information on them should be included in the budgets of specific peace-keeping missions, to be examined by the Assembly, on a case-by-case basis.

The note by the Secretary-General on reform of the procedures for determining reimbursement to Member States for contingent-owned equipment (document A/50/995) transmits a draft Contribution Agreement between the United Nations and States contributing resources to its peace-keeping operations. Annexed to the note, the Agreement is being submitted in response to a request made last April by the Assembly. The purpose of the Agreement, which consists of 15 articles and seven annexes, is to establish the administrative and financial terms of the contribution of personnel, equipment and services by governments to peace-keeping missions.

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The articles cover such issues as the contributions of governments; reimbursement from the United Nations; third-party claims; recovery; and the settlement of disputes.

The Agreement also includes rates of reimbursement for troops, clothing and ammunition. For example, governments will be reimbursed for troop costs at the rate of $988 per month per contingent member; for clothing allowance at the rate of $65 a month per member; and personal training ammunition at the rate of $5 a month per peace-keeper. Furthermore, contingent personnel will receive directly from the peace-keeping mission a daily allowance of $1.28, plus a recreational leave allowance of $10.50 per day for up to seven days of leave taken during each six-month period.

In the consolidated report cited above on a wide range of issues such as the reform of the procedure for determining reimbursement for contingent-owned equipment (document A/51/646), the ACABQ says that since the issuance of the Secretary-General's report, several troop-contributing countries have indicated that the term "contribution agreement" may cause some difficulty as it would require national-level legislative approval. Resultant actions such as parliamentary approval would lead to delays in deployment. Therefore, the Secretariat is considering implementing the new procedures by the using the term "memorandum of understanding", or resorting to an exchange of letters. The ACABQ, for its part, recommends that the legal implications for the United Nations of those alternatives should be explored thoroughly. It trusts that the implementation of the new procedures for contingent-owned equipment will take place as soon as possible.

The report of the Secretary-General on death and disability benefits (document A/50/1009) responds to the Assembly's request that he should examine the possibility of an insurance scheme to cover all troops engaged in United Nations peace-keeping operations on the basis of proposals he receives from the insurance market. Based on a market survey that focused on 15 insurance concerns, it is possible to get commercial coverage for contingent personnel on peace-keeping duties if the Assembly authorizes it. The four proposals submitted to the United Nations by the 28 June deadline offered coverage of up to $50,000 at costs ranging from $25 per troop/per month to about $40 per troop/per month. Base amounts of $100,000 could be provided at proportionately higher premiums.

However, the Secretary-General adds, based on their legal status, any compensation made for the death or disability of such military personnel could not be paid directly to disabled troops or dependent survivors. Rather, payment would continue to be made to their national authorities.

In its related consolidated report on, among others, death and disability benefits (document A/51/646), the ACABQ says it learned that commercial insurance coverage would be for one year and subject to renewal on

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different terms. The renewals would not be automatic and insurance firms could refuse to renew coverage, should the level of perceived risk increase. They could also offer renewal terms that the United Nations cannot accept.

Although self-insurance might expose the Organization to significant liability due to catastrophic loss, the ACABQ says it has concluded that, over time, that form of insurance would be more cost-effective. In either case, based on what the Assembly decides, the Secretary-General will have to make detailed proposals on their implementation.

Annexed to the report are comparisons of the actual costs of four recent peace-keeping missions and projected costs based on the use of commercial insurance.

A note by the Secretary-General on the support account for peace-keeping operations (document A/C.5/51/8) updates information on the prorated share of that account of each of the 15 missions for the period 1 July 1996 to 30 June 1997. The total amount for the support account -- which pays for backstopping -- is about $30.5 million. Backstopping of missions is generally the overall direction, help and guidance given by departments and offices at Headquarters to ensure, among other things, the effective planning, implementation and liquidation of operations.

The missions with the biggest shares are the United Nations Angola Verification Mission (UNAVEM III), with $8.1 million; United Nations Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium (UNTAES), with $6.9 million; United Nations Mission in Bosnia and Herzegovina (UNMIBH), with $3.8 million; and the United Nations Interim Force in Lebanon (UNIFIL), with a rounded $3 million.

Human Resources Management

In a report on special representatives, envoys and related positions (document A/C.5/50/72), the Secretary-General says that, as of 31 July, there were 32 such officials placed in three categories. They cost $1.3 million in 1995. The categories are:

-- 16 special representatives and other high positions in peace-keeping or other missions authorized by the Security Council, including five Under-Secretaries-General and 11 Assistant Secretaries-General;

-- 11 envoys and other representatives who help the Secretary-General exercise his good offices functions, including eight Under-Secretaries- General, one Assistant Secretary-General and two Directors; and

-- 5 other special high-level positions, including special advisers to the Secretary-General, four Under-Secretaries-General and one Assistant Secretary-General.

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In its consolidated report cited above, containing comments on the Secretary-General's special representatives and envoys (document A/51/646), the ACABQ says that the number of representatives and envoys has risen to 33, as of 21 October. It reiterates its views against overly flexible interpretations of the guidelines for using general temporary assistance funds.

Statements on Proposed Savings from 1996-1997 Budget

YUKIO TAKASU, United Nations Controller, responded to the various questions that had been raised during the debate on the proposed savings. He said three types of information had been sought. Regarding the effects of the savings on United Nations output, the Secretariat had circulated a note explaining such implications. Further information, if sought, would be provided in informal consultations. The Secretariat had supplied another note explaining the proposed efficiency measures. The information would be distributed today and the Under-Secretary-General for Administration and Management could address the matter before the Committee tomorrow.

Regarding vacancies and staffing, he said that he had provided further information on the nationality, grade, gender and other information on, for instance, those to be redeployed. The status and number of staff who were yet to be placed in posts would also be clarified in conference room papers being distributed. It was not easy to get information on the staff whose funding had been switched from regular budget to extrabudgetary resources, but a few details had been received from some departments. Information had also been provided on consultants and loaned officers.

Statements on Financing Peace-keeping Operations

Mr. TAKASU, United Nations Controller, introducing the reports under the agenda item, said some of the documents had already been introduced and acted on, while others were new. The first issue addressed in the reports was the United Nations Logistics Base at Brindisi, Italy. The second issue, referred to in other reports, was the peace-keeping Reserve Fund. That issue had already been introduced to the Committee. The third issue reported on was reimbursement to troop-contributing States. Those had already been introduced and would now be taken up informally by the Committee. The fourth issue related to death and disability benefits.

The fifth matter was reform of procedures relating to contingent-owned equipment, which was a new item that would be introduced today, he continued. Another item reported on was the question of roving finance officers and management review officers for peace-keeping operations. The proposals on that matter did not entail additional costs to the Organization and, thus, no action was requested by the Assembly on that matter. The other issue related to the MSA. The last item addressed in the reports was third-party liability claims. It was already introduced and action had been taken on the issue.

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The Controller then provided an explanation of a document on gratis military officers in the Department of Peace-keeping Operations (DPKO), which had been circulated in the conference room this morning. The statistical tables provided information on the staffing table of the Department, the budgets under which the staff was paid, the estimated annual cost of administrative support and the estimated annual salaries of gratis military officers who were paid by their governments.

He said that although the numbers of gratis military officers fluctuated, currently the number of such staff stood at 115 in the DPKO. Of a total staff in the Department of 392, 55 posts were regular budget, while 222 were support account. The 115 gratis military officers were employed in various units in the Department, such as in the Planning Division and the Situation Centre.

In preparing the table that showed the salary costs of the gratis military officers, the Secretariat had estimated the amounts based on the United Nations salary scale, since the military officers were paid by their governments. The estimated cost of their annual salaries was $11.4 million. There were also some indirect costs, such as secretarial and administrative support personnel, the use of office space, equipment and communication costs. Those costs, for which the Organization was responsible, were estimated at $1.5 million in one-time costs and $2.1 million in recurring costs. Direct costs such as official travel, based on travel costs in 1995, were estimated at about $248,000 and those costs were financed from peace-keeping budgets. The total of the direct and indirect cost to the United Nations regular budget was $3.5 million. Another table provided information on the nationality of gratis military officers.

Nineteen of the military in the DPKO were now being paid by the Organization, he continued. Stressing that other areas of the Secretariat were now resorting to the practice of using loaned staff, such as in the Tribunals for the former Yugoslavia and Rwanda, and the Department of Administration and Management. He stressed that the totality of the issue of loaned officers would be addressed in a report by the Secretary-General, which would be presented during the regular session.

Introduction of Reports on Human Resources

DENIS HALLIDAY, Assistant Secretary-General for Human Resources Management, introduced the Secretary-General's report on special representatives, envoys and related officers. He said that the Special Envoy to the Great Lakes region, Raymond Chrétien, had been added to the list. He explained how they were paid.

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MOMOYO ISE, Director, Specialist Services Division, Office of Human Resources Management (OHRM), introduced the report on MSAs, explaining how they were determined by the Secretariat. When a special mission was established by the Security Council, a field survey was conducted by a compensation specialist from the Common System and Compensation Service, OHRM, to gather data on living costs that would serve as a basis for determining the initial MSA rates for mission personnel. A detailed assessment was prepared of the costs of accommodation, food and incidentals, and attention was paid to the commodities, goods and services or infrastructure that might be lacking in a locality. For example, utilities might have been destroyed or interrupted. The cost of communication with other locations outside the mission area was also considered. Related recommendations were submitted to the Assistant Secretary-General for Human Resources Management for review and promulgation of the MSA and related rates on behalf of the Secretary-General. Subsequently, the MSA rates were reviewed regularly to ensure that the factors considered in reaching the initial rates were still valid.

Introduction of Report of the ACABQ

C.S.M. MSELLE, Chairman of the ACABQ, introduced his Committee's report, highlighting some of its contents. His reports covered administrative and budgetary aspects of the financing of peace-keeping operations and human resources. On the report on the MSAs, he said that the Committee had responded to specific requests that had been made to the Secretariat and had given a comprehensive overview on the entitlements of staff. The ACABQ had noted the conclusions of the Secretary-General. Further refinements, such as basing it on seven-day rather than five-day weeks, would reduce the complexity of monitoring the system of entitlements.

Statements on Peace-Keeping Financing

MIAN NADEEM JIAZ AHMAD (Pakistan) said that documents should be provided on time to Member States to consider before debating them. "Does the Secretariat think that we are computers?" he asked. Peace-keeping operations should be adequately funded, in order to safeguard the role of the United Nations in international peace and security. He asked for an explanation on the establishment and financing of trust funds. The facts provided on the gratis military officers had shown that those officers were not entirely cost- free to the United Nations. Also, they had not been recruited on the basis of the principle of equitable geographical representation. The death and disability payments should be made quickly to soldiers and their survivors. Further, a uniform criterion should be applied in paying death and injuries benefits.

JAMES JONAH (Sierra Leone) said that the debate on the proposed savings from the budget could be concluded, since the information he had requested on the loaned and other officers had been provided. But, the facts provided were

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still disturbing. He was very concerned about the categories of the gratis military officers. He was surprised at the fact that some of them were in the General Service category. He asked for more information on the gratis military officers, based in the various peace-keeping missions, and on political officers, as well. The policy implications of the use of gratis military officers were very important and should be discussed in the report the Secretariat was preparing on the matter. The Secretariat should tell Member States when its units became aware of the existence of the loaned officers.

Mr. HALLIDAY, Assistant Secretary-General for Human Resources Management, said that the Secretary-General's report on loaned staff referred to by Mr. Takasu would deal with the human resource and political issues relating to gratis personnel in various parts of the Secretariat. The OHRM had found itself in a difficult position on that development, since the intake of loaned staff had been carried out at the departmental level. The DPKO, as well as other departments, had varying degrees of authority to bring in short- term personnel. That aspect of personnel resources had not been managed by his Office. However, the situation was of concern to his Office, particularly the related problems of the nature of the contractual relations of such staff, including the lack of insurance coverage and performance matters. He planned to address all those issues and would be making proposals on them to the Assembly shortly.

VIJAY GOKHALE (India) welcomed the information provided by the Controller. His Government attached great importance to many of the reports presented. However, because of the late issuance of the documents and the Fifth Committee's heavy workload, he would like to propose that decisions on the agenda item under discussion be deferred until the Committee's resumed session. When the item was debated next week, he would transmit the details of the debate to his capital, so that they could be taken into account in decision-making on the issue.

PATRICK KELLY (Ireland), speaking on behalf of the European Union, also stressed the importance of the agenda item. He agreed with India's proposal that substantive decisions on the item should be deferred until early next year during the resumed session. Such decisions should be made in conjunction with other matters related to peace-keeping operations that would be considered then. Referring to the number of reports that were still outstanding and the other related issues which were to be taken up, such as the support accounts, he said it was logical to consider all the reports when they were available.

The Committee Chairman, NGONI FRANCIS SENGWE (Zimbabwe), said he hoped the report on loaned officers would be available as soon as possible.

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G. DUSCHNER (Canada) said the agenda item was also of great importance to her delegation and she looked forward to addressing the issues on the date proposed -- 13 November. However, she also agreed that decisions on the agenda item should be deferred to the Committee's resumed session. She then asked for clarification on the costs of administrative support for the gratis military officers and on the incremental costs that were associated with those officers.

BINOD BISTA (Nepal), referring to the proposal to defer the agenda item, said the item had already been deferred once and should not be deferred again, since the Committee had been assured that the relevant documents would be available in time. It would be premature to prejudge the pace of the Committee's work and to request the deferral. His Government had very serious concerns about the agenda item and looked forward to the debate that would begin on 13 November. Regarding the death and disability benefits, he asked about the insurance company proposals. Were they based on concrete facts or the thinking of the Secretariat on those matters? he asked. He questioned the rationale for opting for a self-insurance scheme and asked the Secretariat to respond.

AHMAD KAMAL (Pakistan) said he was deeply disturbed by the tendency of the late issuance of documents and the insufficient information being provided to the main Committees. As a result, the Committees and the plenary were unable to function. Why should the Fifth Committee have to defer its decision-making until its resumed session? he asked. The Secretariat had to bear the responsibility for late documents and for providing insufficient information. The problem had also been experienced in the Second Committee (Economic and Financial) yesterday. He asked Secretariat officials to reply to Sierra Leone's concerns about loaned officers and to Nepal's questions about insurance. In the context of insurance for peace-keeping troops, he asked how the conclusion had been reached that the risk for peace-keeping troops was lower.

He said he could not agree to the proposal for a deferral of the decisions on the agenda item, if the Secretariat could not provide the necessary information. If that was the case, then the Assembly should be suspended until the information or the documents could be provided. It was inexcusable that responsible officers could be tardy with the issuance of information. The issue of loaned officers was not a new one and delegations still did not have a complete picture. The issue was far deeper than that of a minor discussion on one matter. The Committee needed to discuss the issue in an efficient and thorough manner, informally or formally.

ALBERT MUCHANGA (Zambia) said he supported Nepal's view. A decision on whether to defer the issue should not be taken until after further consultations.

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NESTER ODAGA-JALOMAYO (Uganda) said he had noted that the Secretariat's representatives had a tendency to not answer some specific questions they had been asked. "I would grant them a certificate of excellence for that", he said. The issue of loaned officers was a matter of concern to his delegation, which looked forward to an early release of the forthcoming report on the subject from the Secretary-General. The Secretariat's representatives should endeavour to answer the questions they were asked.

Mr. JONAH (Sierra Leone) said he was not sure of the implications of India's proposal to defer consideration of the agenda item. The issue of loaned officers had a fundamental impact on the international civil service, which was being eroded. The matter could not be postponed, since the current Assembly should act quickly to stem the erosion of the international civil service. Since a Secretary-General would have to be elected in the current session, it would be inconceivable for the Secretary-General's election to proceed without the issue of gratis military officers being resolved.

Mr. GOKHALE (India) said that the agenda item on administrative and budgetary aspects of the financing of peace-keeping operations dealt with many issues, not just gratis military officers. Some of the reports on, for instance, the gratis officers had not yet been submitted. Several critical issues were covered by the agenda item and his delegation could not consider them without thoroughly considering all of them. He would prefer to have all the issues discussed in the resumed session, when the Fifth Committee usually tackled peace-keeping financing.

Mr. KAMAL (Pakistan) said his delegation's decision on how to proceed on the matter would depend on when relevant documents would be available. Consideration of the matter could be suspended. The issue of gratis military officers was going beyond peace-keeping, but the use of such officers was most pernicious in peace-keeping. The consideration of the item should be suspended until delegates had a better idea of what was happening.

JAN JAREMCZUK (Poland) supported India's view, which had been seconded by the European Union and supported by Canada. Action on the item should be deferred to the spring session.

ZHANG WANHAI (China) said more time was needed to consider the issues, but the views of Sierra Leone and Pakistan were well founded. The issue of loaned officers could be discussed when the necessary documents had been prepared by the Secretariat. The other issues in the agenda item could be deferred.

Mr. TAKASU, United Nations Controller, said that the Secretariat did not intend to provide answers selectively or to avoid answering any questions. Additional information on the regular budget would be forthcoming tomorrow. On documents before the Committee, the only new document was that of the

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ACABQ. Most of the others before the Committee today had been published earlier, some of them several years ago.

The issue of gratis military officers was not restricted to the DPKO, he continued. He, too, was concerned about the extent to which they were used. The Secretariat was trying to get and provide as comprehensive a picture as possible on the extent to which the officers were engaged. They were also recruited in the International Criminal Tribunals and in missions. Sufficient time should be granted to the Secretariat and the ACABQ to enable them to advise the Fifth Committee.

He said there were two trust funds for the DPKO, with none for the rapidly deployable headquarters capacity. There were 15 to 20 trust funds for various peace-keeping missions, targeted at specific items. The cost estimates of the gratis military officers included such administrative expenses as secretarial support and space. A question that could be asked was whether the Secretariat would have to recruit its own people to do the jobs of the gratis military officers. Turning to the insurance scheme for death and disability, he said that, when the report was prepared two years ago, no commercial company was ready to undertake such a business, which they said would not be viable. But, since then, some firms had changed their positions and offered to provide coverage, allowing the Secretariat to submit a report containing insurance options.

BOCK YEO CHENG, Deputy Director, Peace-keeping Financing Division, Department of Administration and Management, said that the perception of a reduced risk level was held by the commercial companies, not the Secretariat. The Secretariat had submitted to the companies detailed historical data on United Nations peace-keeping operations. With that information, the firms had decided that the risks were not as high as they had previously perceived. The options submitted by the Secretariat were only proposals for the consideration of the Assembly.

Mr. HALLIDAY, Assistant Secretary-General for Human Resources Management, said, in response to Pakistan's representative, that the Secretariat had overwhelming demands that were placing stress on the Secretariat's ability to submit documents on time. The Secretariat, too, had several levels of concern about the use of gratis military officers. Such concerns were related to the political influence of those officers and their financial implications. The demand for gratis military officers had grown since the operation in Cambodia and the Assembly could consider if their deployment should be continued. Some of the individual officers had contracts with the Secretariat, which protected them against injuries, for instance. Further details would be provided as requested by Member States. He agreed with the representative of Sierra Leone that the issue of gratis military officers should not be deferred.

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Ms. DUSCHNER (Canada) asked how much was spent on the travel of gratis military officers in 1995 and how much would have been spent if they were not there.

Mr. BISTA (Nepal) stressed that Member States had a right to request as much information as they needed to assist them in their decision-making. The non-availability of documentation did not make it imperative to defer the Committee's work. The Committee could continue its discussion of agenda items up to the end of December and then make decisions on what would be deferred.

MIAN NADEEM IJAZ AHMAD (Pakistan) asked for more information on trust funds and on the officers who were being sponsored by those funds. He also asked for information on the ratio of travel of the 19 military officers contracted by the United Nations and the travel of the 115 gratis military officers. Referring to the staffing of the DPKO, he said the existence of 115 loaned personnel of the total of 134 military officers in that Department had a fundamental effect on that Department's performance. Most of the key appointments were loaned staff.

Mr. TAKASU, United Nations Controller, said the estimated indirect costs for gratis military officers were absorbed by the United Nations regular budget. The estimated cost of travel had been analysed on the basis of the travel of the officers during the course of 1995. The question asked by Canada was very hypothetical. Were it not for the gratis military officers, some other staff might have had to travel. It was impossible to answer the question. He would provide the information on the trust funds, as requested by Pakistan, in writing.

The Committee Chairman, Mr. SENGWE (Zimbabwe), said there were three proposals before the Committee. The first proposal, made by India and supported by Ireland, on behalf of the European Union, Canada and Poland, was a request to defer the decisions on the agenda item to the resumed session. The second proposal was that the Committee should suspend the decision on that proposal until delegations had studied the documents. In another proposal, the Chinese delegation had suggested that the Committee proceed with those issues for which it had information.

The Chairman then proposed that the agenda item be suspended to allow him to consult with the various delegations.

Ms. DUSCHNER (Canada) said it was very important to discuss the agenda item and she looked forward to the debate on 13 November. However, she supported India's suggestion on deferral of the decisions on the item.

N.S.V. CHITTHAN (India) said he was pleased with some of the Secretariat's initiatives to improve the procurement process and welcomed the Secretary-General's continuing commitment to the reforms. However, the vision

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of a "truly competitive, fair and transparent process" still required substantial changes by the Secretariat and the support of Member States before it could be achieved. The Board of Auditors' observations deserved closer attention.

Within a specific time limit, he continued, the Secretariat must correct the following: the lack of a comprehensive data bank on procurement cases in the Purchase and Transportation Division (PTD); the widespread ex post facto approval of large contracts; invitation of bids exclusively from prequalified vendors without advertisements; and the extension of contracts without bidding. Such actions should be demanded in a legislative decision. The Secretariat should also, within a specified period, develop the Revised Policy Guidelines on the Invitations for Tenders and Selection of Suppliers. He supported the Board's recommendation that United Nations organizations prepare annual procurement plans in order to consolidate orders.

He said he shared the Assembly's concerns about the delays and lack of proper procedures in completing the liquidation of major operations, which had cost Member States millions of dollars. The Secretariat must act quickly on proposals to liquidate missions within specific time limits, in the interest of financial propriety and of settling the outstanding claims of troop- contributing States. It must also act quickly on the Board's observation on the streamlining of peace-keeping operations. The implementation of the Board's recommendations on irregularities regarding the recruitment and payment of consultants must also be a priority of the Secretary-General. The Secretariat should prepare within six months the promised comprehensive Policy Guidelines of Consultants' Terms of Reference, Recruitment and Selection. It should also resume the practice of reporting regularly to the Assembly on the hiring of consultants.

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