FIFTH COMMITTEE RECOMMENDS IMMEDIATE IMPLEMENTATION OF PROPOSED PROCEDURES TO SETTLE CLAIMS FOR DEATH AND DISABILITY BENEFITS

5 November 1997

Press Release
GA/AB/3185

FIFTH COMMITTEE RECOMMENDS IMMEDIATE IMPLEMENTATION OF PROPOSED PROCEDURES TO SETTLE CLAIMS FOR DEATH AND DISABILITY BENEFITS

19971105 Defers Action on Third-Party Liability, Continues Consideration of Budget Sections

The Fifth Committee (Administrative and Budgetary) this afternoon recommends that the Secretary-General be authorized to immediately implement his proposed administrative procedures for paying claims for casualties sustained after 30 June by United Nations peacekeeping troops.

By the terms of the draft resolution on death and disability benefits, adopted without a vote, the Assembly would also ask the Secretary-General to settle claims no later than three months after their submission, and to take into account the fact that casualties resulting from gross negligence or the wilful misconduct of the person involved would not be compensated.

In other action, the Committee approved an oral draft decision to defer to its resumed session further deliberations on reimbursements for contingent- owned equipment. At the request of the United States representative, it delayed action on a draft text on time and financial limitations on third- party liability of the United Nations.

Those actions were taken as the Committee acted on administrative and budgetary aspects of peacekeeping financing. Also this afternoon, the Committee took up the Secretary-General's report on the work of the Office of Internal Oversight Services (OIOS) and concluded debate on Part V, Regional cooperation for development, of the proposed 1998-1999 budget.

On the Oversight Office, Ukraine's representative said its work should be strengthened in the areas of peacekeeping, humanitarian affairs, procurement, recruitment, distribution of contracts and use of trust funds.

The Under-Secretary-General for Internal Oversight Services, Karl Paschke, introduced the annual report of the Office for the period from 1 July 1996 to 30 June this year, as well as those on its investigations into the International Trade Centre (ITC) and an alleged conflict of interest in the United Nations Centre for Human Settlements (Habitat).

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During the debate on Part V of the budget, the United States representative said funds for the regional commissions should not be increased, since those bodies were streamlining their work.

The fact that the overall budget would be cut did not mean that every section's allocations would be reduced, United Nations Controller Jean-Pierre Halbwachs said in response. By increasing the provisions for the regional commissions, the Secretary-General was only seeking to ensure that priority areas received increased funding.

Several delegations expressed support for the commissions in their respective regions, with many calling for increases in their budgetary allocations.

The representatives of Uruguay, Ukraine, Saudi Arabia, China, Republic of Korea, Romania, Cuba and Algeria also spoke.

The Committee is scheduled to meet again at 10 a.m. tomorrow, 6 November, to begin discussing human resources management, during which the new Assistant Secretary-General for Human Resources Management, Rafiah Salim, will speak. It expects to continue discussing the sections of the proposed budget, starting a debate on those in Part VI, Human rights and humanitarian affairs.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this afternoon to take action on administrative and budgetary aspects of peacekeeping financing, and to consider reports on the Office of Internal Oversight Services (OIOS) as well as on the review of the United Nations administrative and financial efficiency.

In addition, the Committee is scheduled to continue debating Part V of the budget, concerning regional cooperation for development. (For background on the draft resolutions on aspects of peacekeeping financing and on the budget sections in Part V, see Press Release GA/AB 3184 of 5 November.)

Secretary-General's Reports on Oversight Office

In his third annual report on the work of the Oversight Office (1 July 1996 to June 1997) (document A/52/426), the Secretary-General states that he will continue to support the full and timely implementation of the recommendations of the Office. Those recommendations will continue to be a key element in the ongoing reform process.

The Office was established by General Assembly resolution 48/218 B of July 1994 to enhance oversight functions within the United Nations through intensified evaluation, audit, inspection and compliance monitoring. On 24 August 1994, the Assembly approved the nomination of Karl Paschke as Under-Secretary-General for Internal Oversight Services, who then assumed duties on 15 November 1994.

As in the previous two annual reports, the Secretary-General states, the current one focuses on three areas of oversight priority -- peacekeeping, humanitarian and related activities, and procurement. The report also discusses the work of the Office's divisions for audit and management, investigations, inspection, monitoring and evaluation.

Providing an overall picture of the work of the Office, he says that it had identified and recommended cost savings and recoveries worth about $29.3 million between July 1996 and June this year. Of that amount about $10.1 million had accrued from cuts made from the 1996-1997 budget in conformity with the Office's recommendations, $7.4 million from the prevention of unjustified expenditure, and $6.3 million had been identified as recoveries. The Office made about 811 recommendations and the rate of implementation of such proposals had risen from 61 per cent to 71 per cent.

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Of the priority area of peacekeeping, the Secretary-General says that the Office conducted audits of nearly 20 United Nations operations and facilities such as the United Nations Peace Forces (UNPF), United Nations Support Mission in Haiti (UNSMIH), United Nations Logistics Base, United Nations Peacekeeping Force in Cyprus (UNFICYP), United Nations Interim Force in Lebanon (UNIFIL), and the United Nations Observer Mission in Georgia (UNOMIG). In looking at the UNPF, the Office focused on the operation's liquidation and the disposal of United Nations-owned assets that had an original value of more than $430 million.

Overall, the audits found that the liquidation was being accomplished in an organized manner and that reasonable accounting had been made of the disposition of assets. But the auditors questioned an option being considered for the commercial disposal of 140 armoured personnel carriers at a cost of nearly $1 million and a contract to dispose of live, unserviceable ammunition at a cost of approximately $90,000. Management achieved significant savings by using a scrap contract to dispose of the personnel carriers and obtaining governmental assistance in disposing of the ammunition.

With regard to UNSMIH, the Secretary-General says that an audit of the Mission showed that a telephone technician had provided unauthorized international access to some staff members and, in some cases, inappropriately reduced telephone charges. As a result, the technician's contract, which expired last February, had not been renewed.

In examining humanitarian activities, the Office looked at the work of the Office of the United Nations High Commissioner for Refugees (UNHCR), United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) and the Centre for Human Rights. Audits of UNHCR covered expenditures of more than $150 million in 14 country programmes in Africa, Europe and Asia.

Because UNHCR spends about 50 per cent of its funds through implementing partners -- governments and non-governmental organizations -- the OIOS/UNHCR Audit Section devoted a good deal of effort to auditing such bodies, the Secretary-General reports. The audits disclosed various weaknesses in financial control and recurring problems, such as delayed or unreliable financial reporting, making it difficult for UNHCR to determine the extent to which funds were being used for the intended purposes.

The report states audit certificates for UNHCR projects were not always received from implementing partners and at one major programme where UNHCR

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engaged the services of commercial auditors to address the problem, more than 50 per cent of the audit opinions had to be qualified owing to inadequate financial reporting systems. Weak financial infrastructures in field programmes seemed to be a major cause of such problems and UNHCR will have to make additional investments in the area if the financial management of its implementing partners is to improve.

As for UNRWA, the Office confirmed a report that the agency's funds were being siphoned off through the submission of false medical reimbursement claims on behalf of registered Palestine refugees. The fraud had been perpetrated by a former staff member of the UNRWA West Bank Field Office in East Jerusalem who had used false refugee registration numbers and names from his extended family to defraud the UNRWA of some $355,000 from 1992 to 1995. The investigation found 209 individual cases of fraud, including 191 cases that involved the use of his extended family. UNRWA management is taking corrective action on internal controls and has passed the criminal case to both the Israeli and the Palestinian authorities for prosecution.

Narrating the work of the various divisions of the Office, the Secretary-General says that the Audit and Management Consulting Division, for example, had audited assets of $402 million, income of $153 million and expenditures totalling $1.8 billion. Those audits identified about $28 million in potential savings. Almost $16 million in savings and recoveries were realized from actions recommended by the Division in this and prior reporting periods. The Office continues to use a conservative approach in estimating cost savings. Those audits generated 66 audit reports addressed to senior management, containing a total of 811 recommendations. The division audited the use of consultants and associated contractual procedures and would report to the fifty-second Assembly session.

The Investigations Section, for its part, received 172 reports and suggestions from heads of offices, departments and funds and programmes, requesting investigative assistance. The geographical distribution of the 172 reports and suggestions is as follows: 69 in the Americas; 49 in Europe; 44 in Africa; six in Asia; and four in the Middle East. Of the 27 reports received anonymously, eight were received through the Office's "Hotline". The Section investigated 33 reports that were found to be bona fide but which resulted in the allegations not being proved for lack of sufficient evidence. The accused individuals were cleared.

Included in the report as appendices are recommendations of the Office on which corrective action has not been taken and lists of reports the Office has submitted to the General Assembly, and the Economic and Social Council.

A note by the Secretary-General transmits the comments of the Joint Inspection Unit (JIU) (document A/52/464) on final reports produced by the Office on various subjects. The JIU says it has reviewed all of them and commented separately on the United Nations Logistics Base at Brindisi, Italy.

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As for the other, the Unit either agrees in general with findings or does not find it appropriate to comment on them. The reports include those on the United Nations access control system, the seminars of the Special Committee on decolonization, outsourcing at the United Nations, the International Criminal Tribunals for Rwanda and for the Former Yugoslavia, the United Nations Environment Programme (UNEP) and the United Nations Centre for Human Settlements (Habitat).

A letter dated 23 October addressed by the Secretary-General to the Fifth Committee, on the role of legislative bodies in receiving and discussing reports of the Oversight Office (document A/C.5/52/12), transmits the views of the Office of Legal Affairs on some aspects of Assembly resolution 48/218 B, which established the Office. Contained as an annex, the letter says, in essence, that OIOS recommendations are to be submitted to programme managers for implementation and the Assembly subsequently informed of the action taken in response. Similarly, the annual report of the Office provides a comprehensive overview of its work in a reporting period, including a summary of recommendations made in individual reports submitted to programme managers. Its seems clear, the Legal Counsel says, that the annual report is transmitted to the Assembly for information purposes.

Also before the Committee are the second annual report of the Office (document A/51/432), covering the period 1 July 1995 to 30 June 1996; a note by the Secretary-General transmitting JIU comments on the Oversight Office reports (documents A/51/530 and Corr.1); and another note transmitting a report of the Office on enhancing the internal oversight mechanisms in the United Nations operational funds and programmes (document A/51/801). (For background, see Press Release GA/AB 3144 of 15 May.)

Review of Administrative and Financial Efficiency

The Committee had before it an OIOS report on the review of the practices of the secretariat of the International Trade Centre (ITC) of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (document A/51/933). According to the report, the ITC was created by the General Agreement on Tariffs and Trade (GATT) in 1964. Since 1968, it has been operated jointly by GATT (now the World Trade Organization) and the United Nations, the latter acting through the United Nations Conference on Trade and Development (UNCTAD).

The sole purpose of ITC is to provide technical support and services to Member States in international trade promotion, according to the report. It works with developing countries and those with economies in transition to set up trade promotion programmes for expanding their exports and improving their import operations. This covers product and market development; development of trade support services; and international purchasing and supply management. The body also serves as the technical assistance arm of UNCTAD and the World Trade Organization in the operational aspects of trade promotion and export

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development. It has a regular budget of $44 million for 1996-1997. Of that, it gets $22 million from the United Nations regular budget and a similar amount from the WTO. The ITC also receives money from some trust funds.

According to the report, the OIOS found weaknesses in ITC's management structure. Examples include a lack of mechanisms for strategic thinking, policy formulation and programme development; lack of mechanisms for coordination and central direction; and a lack of teamwork and clearly defined responsibilities.

The Office makes several recommendations to remedy the situation. A system for coordination, monitoring and evaluation of the programmes and projects should be established, it says. The skills profile of the organization should be updated, with the acquisition of fresh expertise capable of introducing innovative thinking. More efforts should be made to upgrade the skills of existing staff through appropriate training and sabbatical leave. For rapidly changing technical fields, the ITC should offer fixed-term appointments of up to five years, with no renewal or extensions. The Division of Administration should be streamlined through efficiency measures and savings ploughed into substantive areas. A clear system of control over staffing and over the use of consultants should be established.

A note by the Secretary-General transmits a report of the Oversight Office on the investigation into alleged conflict of interest in Habitat (document A/52/339). The Office found the appearance of a conflict of interest because a Habitat staff member not only recommended and approved consulting contracts to her husband both before and after their marriage, but also approved and certified payment on some occasions. The staff member was hired as a human settlements adviser with Habitat's Technical Cooperation Division in February 1991. At that time she was living with -- but later married -- a director of a Nairobi-based consultancy group called Matrix Development Consultants.

The fact that she did not actually "hold" an interest -- such as stocks -- in Matrix, as the language of the United Nations Staff Rule 101.6 requires, did not allow for a finding of an actual conflict of interest, the Oversight Office says. Even though her husband owned shares in Matrix, his financial interest could not be imputed to her. The difference between the two legal concepts of "holding" and "having" a financial interest made all the difference in whether there was an appearance or the existence of a conflict of interest.

According to the report, the Office recommended that the Office of Legal Affairs should be supported in strengthening and clarifying the conflict of interest provisions. The new provision should include rules that bar staff from using their positions and the Organization's financial resources to enrich themselves indirectly through family members.

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The management of Habitat should ensure that the Matrix consultant's spouse is not involved in decisions to initiate or certify consultancy contracts with the firm, the report continues. She should be dismissed if she violates some directive that would be submitted to her.

Habitat and the Office of Legal Affairs had responded to the recommendations, the Oversight Office says. For example, the Office of Legal Affairs has developed an amendment to the code of conduct to strengthen the provisions on conflict of interest. It would specifically bar staff from deriving "direct or indirect" benefits from their involvement with a firm because of the role he or she has as a United Nations employee. The amendment had been approved by the Secretary-General, but not yet ratified by the Assembly. Habitat has implemented some of the recommendations addressed to it.

Action on Peacekeeping Drafts

ANWARUL KARIM CHOWDHURY (Bangladesh), Committee Chairman, asked whether the Committee was ready to take action on the draft resolution on death and disability, as orally revised to replace the word "principle" in operative paragraph 7 with "notion".

The paragraph would now read: "Also requests the Secretary-General to continue, in the new system, to take into account, when considering all mission-related death and disability claims, that such injury or death should be compensable, unless such injury or death was caused by the gross negligence or wilful misconduct of the injured or deceased member of the contingent, and requests the Secretary-General to include this notion in the aide-mémoire for troop-contributing countries."

The committee approves the draft resolution on death and disability without a vote.

Speaking after action, the representative of Uruguay, welcoming the draft, said that it would help boost the confidence of peacekeeping troops in the field.

THOMAS REPASCH (United States) said action on the draft text on third party liability should be delayed because his delegation would like to have further instructions and discussions on operative paragraph 12.

The paragraph reads: "Requests the Secretary-General to take the necessary measures to implement the present resolution in respect of the status-of-forces agreements in accordance with paragraph 40 of his report;"]

The Committee decided to defer action on the draft resolution on third- party liability.

Mr. CHOWDHURY (Bangladesh), Committee Chairman, proposed an oral draft

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decision that would have the Committee defer further action on contingent- owned equipment until the resumed session.

The Committee approved to draft decision.

Statements on Oversight Office's Reports

KARL PASCHKE, Under-Secretary-General for Internal Oversight Services, introducing the OIOS annual report, said the Office had become an important component of the United Nations management culture. It had contributed to streamlining services and had combated irregularities. Working in partnership with management, it had heightened fiscal awareness among staff, increased adherence to regulations and battled wrongdoing. The implementation rate for OIOS recommendations continued to climb.

While individual internal controls had been implemented over the years, the United Nations overall system of internal control remained weak, he said. Reviewing some of the recent work of the OIOS, he noted that its auditors had acted as consultants to the Department of Peacekeeping Operations in a number of instances. An in-depth evaluation of the Department of Humanitarian Affairs had been undertaken. Procurement remained a priority for the Office.

VOLODYMYR KOSYI (Ukraine) said the activities of the OIOS were becoming more results-oriented. Many far-reaching changes had been made in the Organization's management culture as a result of its efforts. Oversight activities had demonstrated significant financial waste, which must ultimately be borne by Member States. The work of the OIOS frequently became the focus of international media as a means of highlighting the problems of the United Nations.

The OIOS, together with the JIU and the Board of Auditors, should pay particular attention to reviewing changes for the Organization's management, he said. He welcomed initiatives aimed at decentralizing management, provided there was a clearly defined system of reporting and accounting. The OIOS and other oversight bodies would play a key role in the Organization's reform efforts. Staff regulations should be reviewed to best represent the interests of Member States.

Economic frustration, complacency and lack of initiative among international civil service staff led directly to budgetary violations, he said. The mechanisms for implementing the recommendations of the OIOS were not sufficiently effective. The activities of the Office must be strengthened in the areas of peacekeeping operations, humanitarian affairs and procurement. It should pay priority attention to recruitment procedures for short-term staff and consultants, distribution of contracts, and the use of trust funds.

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AHMED FARID (Saudi Arabia) expressed support for the statement made by the Under-Secretary-General for Internal Oversight Services and praised the actual savings and recoveries of $17.8 million that would be made due to the work of the Office. He welcomed the recommendations on outsourcing and on the new contracting system for the United Nations cafeteria in which the Organization would share in the profits of the facility.

Referring to the Secretary-General's letter of 23 October transmitting legal opinion on the Oversight Office, he sought clarification of what the memorandum from the Office of Legal Affairs meant by saying that annual reports of the Oversight Office were to be submitted to the Assembly for information purposes.

DJAMEL MOKTEFI (Algeria) welcomed the actual savings of some $17.8 million reported by the Oversight Office but sought more information on how the figures were determined. The Office should also explain the difference between the $29.3 million identified and recommended and the $17.8 million of actual savings and recoveries realized.

Mr. PASCHKE, Under-Secretary-General for Internal Oversight Services, introducing the report of the OIOS on the ITC, said the Office had found that the ITC's definitions of inter-divisional responsibilities were vague. Its mechanism for promoting coordination needed to be strengthened. Instruments designed to provide guidance to management diluted responsibility. There were also weaknesses in the control over utilization of consultants and experts. The percentage of staff resources engaged in administrative functions was too large for a small organization. The Centre's skills profile had not kept pace with the evolution of world trade. Its management had endorsed the recommendations of the OIOS.

On the OIOS report on Habitat, he said the Office had investigated allegations of a conflict of interest regarding the hiring of a Habitat consultant; a lack of management response to the conflict of interests; and retaliation against a staff member for having raised the issue to management.

With the Office of Legal Affairs, the OIOS had identified a deficiency in Staff Rules which were written too narrowly regarding conflict of interest, he said. The report contained four recommendations, all of which had been implemented. The rule in the code of conduct had been revised. Internal changes had also been made.

Mr. REPASCH (United States) said the report on the conflict of interest case showed how a narrowly focused investigation could have a far-reaching and beneficial effect on the Organization.

CHEN YUE (China), welcoming the introduction of the two reports, said she was unable to comment further because the report on Habitat had not yet been issued in Chinese. Why was that translation not available, and when

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would it be issued? she asked.

Statements on Budget Sections

SOONG CHULL SHIN (Republic of Korea), speaking on Section 17, Economic and Social Development in Asia and the Pacific, supported the statement of the representative of the Philippines on behalf of Association of South-East Asian Nations (ASEAN) this morning. The Economic and Social Commission for Asia and the Pacific (ESCAP) should be supported, particularly for its work in the alleviation of poverty in the region, population and development, as well as transport and communications. He supported the overall level of resources for ESCAP and the recommendations of the Committee for Programme and Coordination (CPC) on the budget section.

EUGEN MIHUT (Romania), speaking on Section 18, Economic Development in Europe, said he agreed with the Secretary-General that the activities to be carried out by the Economic Commission for Europe (ECE) conformed with the overall objectives of the medium-term plan for 1998-2001. The work in that section should be supported.

Mr. REPASCH (United States) said the Economic Commission for Africa (ECA) was improving its cost-effectiveness. Some programmes were over- ambitious, while some publications could be reduced. The ECA budget for that Commission -- and for all the regional commissions -- showed an increase for the upcoming biennium. It was inappropriate for those budgets to be increased when the regional commissions were streamlining their working methods.

He welcomed the restructuring exercise being undertaken by ESCAP, and expressed concern at the increase of resources for programme support. The amount of resources allocated to that area should be reduced, so they could be used directly to respond to the needs of the region.

Regarding the ECE, he said that important strides had been made to improve transparency and eliminate work in low priority areas. He reiterated that budgetary resources should not be increased when streamlining and prioritization were being undertaken.

He welcomed the identification of new priorities at the Economic Commission for Latin America and the Caribbean (ECLAC). However, he could not accept increased budgetary resources for the Commission while it was in the process of streamlining.

The Economic and Social Commission for Western Asia (ESCWA) must make greater efforts to avoid duplication with other organizations, he said. It must refine its focus to ensure that it concentrated only on the priority needs of its members. Despite supposed reductions in posts, the Commission showed higher levels of resources for staffing.

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Resources for technical cooperation were largely allocated for the implementation of unspecified technical cooperation activities, he said. Those activities should be clearly defined and justified. It was inappropriate to provide programme funds without identifying clear goals. That practice made it virtually impossible to determine whether the programme was implemented appropriately.

The Advisory Committee on Administrative and Budgetary Questions (ACABQ) should recommend amounts to be allocated for consultants and experts, he said.

The amounts for travel in the Commissions should be reduced. Rather than simply identifying problems, the ACABQ should propose solutions.

EVA SILOT BRAVO (Cuba) expressed support for the work and the budget allocations of ECLAC. She expressed concern regarding the cancellation of reports and studies that provided useful analyses and information, and the reduction of seminars and meetings of experts groups, due to the cuts made to the 1996-1997 budget. The Secretariat should submit a summary of posts that would be abolished and state their functions. It should also justify proposed reclassifications of posts and explain its intentions regarding changes in the frequency of meetings of legislative bodies. The costs of hiring security services should be analyzed.

Mr. MOKTEFI (Algeria) said the resources proposed for Section 16, Economic and social development in Africa, should be increased by the Assembly. He welcomed both the streamlining in ECA and the fact that about a quarter of all its staff would be deployed to the five subregional development centres. The institutes under that budget section should be funded from the regular budget.

JEAN-PIERRE HALBWACHS, United Nations Controller, said the fact that the overall budget would be cut did not mean that the provisions for every section would be slashed. Increases were proposed for the regional commissions because the Secretary-General was trying to ensure that Assembly-determined priorities received more funds, compared with the 1996-1997 biennium. Anyway, some of those increases were inevitable. For example, the bulk of the increases proposed for the ECA was due to the fact that its new conference centre required more resources. A similar thing could be said of the ECE. The significant increase in resources for ESCWA was not solely due to the costs of relocating its headquarters from Amman to Beirut, even though staff costs were greater in the latter city.

A list of activities cancelled, postponed or deferred at ECLAC had been included in the Secretary-General's previous report on how the Secretariat proposed to live with the mandated budget cut of $154 million, he said. A Professional post at the P-4 level related to drug control, which had been kept vacant in order to make the savings of $154 million, would be filled shortly. Further details on the abolition of posts and the costs of security

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services would be provided at a later date.

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