FIFTH COMMITTEE DECIDES TO CONSIDER SECRETARY-GENERAL'S COMPREHENSIVE REPORT ON HONORARIA AT NEXT SESSION OF ASSEMBLY

Press Release
GA/AB/3214

FIFTH COMMITTEE DECIDES TO CONSIDER SECRETARY-GENERAL'S COMPREHENSIVE REPORT ON HONORARIA AT NEXT SESSION OF ASSEMBLY

Taking note of the Secretary-General's interim report on honoraria payable to members of organs and subsidiary organs of the United Nations, the Fifth Committee (Administrative and Budgetary) decided this morning to consider his comprehensive report during the next session of the General Assembly, beginning in September. The Committee Chairman, Anwarul Karim Chowdhury (Bangladesh), proposed the draft decision, which was approved without a vote, as the Committee considered aspects of the 1998-1999 programme budget.

The Secretary-General's interim report resubmits his 1992 recommendation that current rates be increased by 25 per cent. The proposed increase would take effect as of 1 January 1998 -- and cost $182,500 for 1998-1999. The revised rates would be paid to members of the International Law Commission, International Narcotics Control Board, United Nations Administrative Tribunal, Human Rights Committee, Committee on the Elimination of Discrimination against Women, and the Committee on the Rights of the Child.

Also this morning, the Committee continued its review of the United Nations administrative and financial efficiency, focusing on procurement reform.

Developing countries were not getting a fair share of the United Nations business opportunities, the representative of the United Kingdom said on behalf of the European Union and associated States. Speaking for the "Group of 77" developing countries and China, Indonesia's representative said that, among qualified vendors, preference should be given in the award of procurement contracts to vendors from developing countries.

In addition, preference in awarding procurement contracts could also be given to countries that had paid their assessed contributions, the representative of Bangladesh added.

Substantive problems with procurement practices had not been resolved, Algeria's representative said. The suppliers roster should be expanded through targeted efforts to assure transparency. All interested parties should be able to act on an equitable basis.

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The Chief of the Procurement Division, Allan Robertson, said that while his Division was making great efforts to attract companies from developing countries, the results had been disappointing. It was unclear why there had been a lack of response from those countries. The Division was trying to develop new outreach techniques, he added.

Also this morning, the Committee concluded its general discussion on financial reports and audited statements of the Board of Auditors.

The representatives of Norway, Pakistan, Argentina, India, China, Russian Federation, New Zealand, Saudi Arabia, Mexico, United States and Cuba also spoke.

Comments and questions by Committee members were responded to by the Chairman of the Audit Operations Committee, Kanwal Nath, speaking on behalf of the Chairman of the Board of Auditors; the Under-Secretary-General for Internal Oversight Services, Karl Th. Paschke; and the Vice-Chairman of the Joint Inspection Unit (JIU), Andrzej Abraszewski.

The Committee is scheduled to meet again at 10 a.m. tomorrow, 12 March, to resume its consideration of the Organization's human resources management, focusing on the use of consultants. It also plans to take up the financing of the International Criminal Tribunal for Rwanda, and conclude its review of the United Nations administrative and financial efficiency. In addition, the President of the United Nations Staff Union, Rosemarie Waters, is scheduled to address the Committee.

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this morning to continue its general discussion on financial reports and statements of the Board of Auditors; review of the Organization's financial and administrative efficiency; and aspects of the 1998-1999 budget. (For background information see GA/AB/3212 of 9 March.)

Statements on Financial Reports

HUMAYUN KABIR (Bangladesh) said the idea of maintaining a timetable for the implementation of recommendations of the Board of Auditors was particularly welcome. The proposed establishment of a focal point for overseeing audit recommendations would contribute to improving accountability in the Organization. Bangladesh was also impressed by the work of the Board on the Integrated Management and Information System, which had exposed several problems with that system.

TRYGGVE GJESDAL (Norway) said that Norway wished to align itself with the statement made two days ago on the current subject by the representative of the United Kingdom on behalf of the European Union and associated States.

KANWAL NATH (India), Chairman of the Audit Operations Committee, speaking on behalf of the Chairman of the Board of Auditors, said he wished to express his appreciation for the interest shown by the Committee in the Board's work. The Board was encouraged by the positive views expressed by delegations on the Board's presentation of its reports. Many delegations had made useful observations and suggestions.

Statements on Administrative and Financial Efficiency

CECEP HERAWAN (Indonesia), speaking for the "Group of 77" developing countries and China, said the Group attached great importance to the issue of procurement reform in the United Nations. Such reform was important to ensure the efficiency and transparency of the procurement process, as well as to foster competition. Reform should also make the procurement process responsive to the Organization's needs. He noted the Secretary-General's commitment to reforming the procurement process, as indicated in his report on the matter.

The revised procurement manual should be produced without delay, he said. Further, the Secretary-General should submit to the ACABQ and the General Assembly specific proposals for revising and amending the Organization's financial regulations and rules.

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It was expected that the guidelines requested by the Assembly on methods for inviting bids, which covered all aspects of procurement, including open- tendering, would be finalized by the end of this month, he said. The Secretary-General's efforts to broaden the scope of the suppliers roster were appreciated. Noting the low number of companies from developing countries registered in the roster, he said efforts should be enhanced to include potential vendors from those countries.

Among qualified vendors, preference should be given in the award of contracts for the procurement of goods and services to vendors from developing countries, to balance the geographical base of the suppliers roster, he said. The necessary resources should be provided to enable the staff of the Procurement Division to attend seminars and exhibitions away from Headquarters in order to ensure that equal opportunity was given to vendors from developing countries.

The Group appreciated the reduction of cases submitted for ex post facto approval, he said. The approval of contracts on that basis should be kept to the minimum, with full justification provided in each case. All procurement- related functions should be performed by United Nations staff. The Group noted that gratis personnel were being phased out in the Procurement Division. That phasing out should not be delayed beyond July.

On the practice of outsourcing, he said that a defined policy, as well as related norms and regulations, should be formulated as soon as possible. These measures were needed to ensure that the role of international civil servants to effectively implement the Organization's activities was not undermined. The Secretary-General should establish and submit a roster of contractors along with an evaluation of their performance to Member States, to make outsourcing practices more transparent and reflective of the interest of the developing countries.

NICHOLAS THORNE (United Kingdom), speaking on behalf of the European Union and Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia and Cyprus, said the Union was dismayed that the report of the Office of Internal Oversight Services (OIOS) on its audit of the implementation of procurement reform had still not been issued. It was hoped it would be available soon.

In its report on procurement reform, the Advisory Committee on Administrative and Budgetary Questions (ACABQ) had concluded that considerable improvement had been made in the procurement process, he said. However, some proposed procedures were still outstanding. Those included the issuance of a revised procurement manual, originally promised for July 1996; a sharper definition of exigency needs, requested by the European Union and the Advisory

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Committee last year; and proposals to revise pertinent financial rules and regulations. It was essential that specific proposals be submitted urgently.

The European Union noted and welcomed the progress made in expanding the suppliers roster, he said. But it was not convinced that it was currently an active and viable instrument reflecting a reasonable geographical registration of suppliers. It shared the concern of developing countries that they were not getting a fair share of the business opportunities on offer. The procedures must be demonstrably transparent, fair and even-handed.

With regard to the integration recommended by the European Union and Advisory Committee of procurement activities at Headquarters, the Union was disappointed to learn that the Secretary-General's decision to consolidate within the Procurement Division, with effect from 1 November 1997, the relevant functions of the Contracts and Procurement Office had been delayed. It would welcome information on the reasons for that delay.

The European Union would have more to say on the subject of procurement reform in informal consultations, he said. The problems were too big and long-standing to be set at the feet of any one individual or group of individuals.

AMJAD HUSSAIN SIAL (Pakistan), associating himself with the statement made for the Group of 77 and China, expressed concern about the Secretariat's failure to provide data on its outsourcing practices, and asked for an explanation from it. The suppliers roster was made up primarily of companies from industrialized countries. The Secretary-General must make greater efforts to broaden the roster's geographical base. Invitations to bid should be posted on the Procurement Division's home page on the Internet.

While the number of ex post facto approval of procurement contracts had decreased, that trend could be enhanced by better planning, he said. The Advisory Committee and the Board of Auditors had recommended the preparation of an exhaustive list of exigencies for waiving procurement regulations and procedures. He hoped an elaborated list of exigencies would be made available during the current session.

Other departments should follow the example of the Procurement Division and phase out of gratis personnel, he said. He asked the Secretariat to inform substantive departments to include background information as well as recommendations and conclusions in their reports to the Fifth Committee.

Mr. KABIR (Bangladesh) said that while his delegation associated itself with the statement of the Group of 77 and China, he would like to highlight some additional points. He said that the recent strengthening of the Procurement Division was a helpful step in streamlining the procurement

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process. Also, it was believed that a procurement manual would be published, as had been promised by the Under-Secretary-General for Management in his recent address.

Although bidding on procurement contracts was increasing, access to the process remained limited to a few States, he said. All States should have access. According some preference to countries that had paid their assessed contributions and to vendors from developing countries, especially from the least developed countries, should be considered.

CARLOS RIVA (Argentina) said his Government had been carrying out an information campaign aimed at promoting increased registration of national business with the United Nations procurement roster. A seminar would be held next month on the United Nations procurement system, and to that end, the Government had sent invitations to United Nations officials, as well as those from multilateral financial institutions. The United Nations Information Centre in Buenos Aires should be used to disseminate relevant information, in particular, that information issued by the Office of Communications and Public Information and specialized agencies pertaining to development.

He noted reforms under way to ensure transparency in the procurement process. The Secretariat should continue to train its officials and also convey to all Member States information on the bidding procedures. His delegation supported the holding of periodic meetings to update information and contribute to expanding the list of suppliers. The broad participation of businesses from a large number of Member States, all competing in an atmosphere of transparency, would enhance the Organization's procurement process.

RAJAT SAHA (India) said that procurement reform was an important issue for consideration at the current resumed session. The Secretary-General's report had indicated that several documents, including the revised procurement manual, elaborate list of exigencies, as well as the revised guidelines for the administration of the Letters of Assist, and the establishment of a single format for the provision of data and a common reporting system for procurement, would be ready in the first quarter of 1998. It was hoped that the issuance of those documents would not be postponed further.

Member States had been asking for comprehensive procurement statistics, he said. Data relating to field and regional levels also needed to be made available. With a view to establishing transparent criteria for registration of vendors for all regions of the world and to make the supplier roster more geographically representative, allocation of funds should be made to allow United Nations staff to travel to developing countries for seminars. Also, an arrangement should be formulated to give preferential treatment to suppliers from Member States that had paid their assessed contributions in full.

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WANHAI ZHANG (China) said the Secretary-General had developed a suppliers roster with as wide a geographical base as possible. However, suppliers from developing countries only accounted for 6.9 per cent of the roster. It was hoped that number could be increased. With regard to ex post facto and partial ex post facto approval of contracts, China hoped that the number would be reduced to the lowest level.

Mr. THORNE (United Kingdom) said he had never noted such a commonality of views on the subject of procurement. He wished to apologize the Under- Secretary-General for having said, earlier, that the report of the Office of Internal Oversight Services (OIOS) on the subject had not yet been issued -- he understood that it had.

VLADIMIR KUZNETSOV (Russian Federation) said his delegation shared the concerns expressed for the European Union on a number of issues. He noted a total absence of information and analysis of the movement towards the ultimate goal of enhancing the Organization's efficiency in the Secretary-General's report on procurement reform. Many criteria for evaluating efficiency had not been covered in the report, yet enhanced efficiency of procurement policy was a primary objective set for the Secretariat by the Member States. The Secretary-General's next report should be submitted with specific information on the way in which the measures adopted would enhance efficiency in procurement.

Another problem related to arbitration and the absence of arbitral provisions, he said. The value of arbitration for 1995 represented more than $110 million. In the absence of practical measures, the United Nations stood a good chance of losing huge amounts of money. Where would the money to pay for those losses come from? The United Nations used external lawyers, and their services were costly. What budget line was used to pay for those lawyers? The Secretary-General should provide an update during informal consultations. The amounts spent by the United Nations to attract lawyers from various countries to deal with arbitration matters should also be provided.

Each arbitral case was preceded by a decision adopted within the Secretariat on procurement of goods and services, he continued. He asked what measures had been adopted regarding personal accountability. The Russian Federation's delegation had been disappointed that the report of the Oversight Services, which was commendable in many respects, had largely overlooked the matter of arbitration.

WEN CHIN POWLES (New Zealand) agreed with speakers who had underlined the need for Procurement Division's management to be subject to the strictest standards. The reputation of the United Nations was at stake.

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KARL TH. PASCHKE, Under-Secretary-General for Oversight Services, said procurement would continue to be a priority for his Office. It was an area where oversight was very much needed. Due note had been taken of the expression of satisfaction expressed by delegations on the cooperation between the Oversight Office and the Joint Inspection Unit (JIU). The Organization could benefit from the synergies of the two bodies.

The Oversight Office tried to meet deadlines as often as it could, he said. Outsourcing could be a means to achieving efficiency and cost reduction. It could allow programme managers to focus on substantive programmes. The proof of the success of outsourcing would be obtained through vigilant ongoing monitoring of each outsourcing exercise. Two OIOS reports -- on procurement by the Office of the United Nations High Commissioner for Refugees (UNHCR) and procurement planning in peacekeeping -- were under preparation.

On the non-inclusion of the complex issue of arbitration in the OIOS report, he said the report had been dealing with procurement reform and verifying the status of recommendations. The issue of arbitration was outside the scope of that audit. If the Committee was interested in the subject, the OIOS would be prepared to conduct a special review.

ALLAN ROBERTSON, Chief of the Procurement Division, said procedural guidelines for competitive bidding did exist, and had for several years. Those guidelines would be made available on the Internet, for access by potential suppliers. It was disappointing that so few suppliers were from developing countries. The Procurement Division had contacted all Permanent Missions with information on registration. While results were trickling in, the response from developing countries were disappointing.

The Procurement Division would be represented at the seminar to be held in Argentina, he said. Members of the Division could attend seminars and workshops if they were invited and their expenses paid. The Division tried to identify suppliers from Headquarters. Efforts to attract companies in developing countries and those with economies in transition had yielded disappointing results. It was unclear why there had been a lack of response from those countries. Perhaps they needed further prompting; the Division was trying to develop new techniques.

Distribution of procurement information on the Internet might not be practical in a number of cases, he said. Very often, the Procurement Division was given requisition with extremely short deadlines -- in many cases, two weeks was considered a long time. The Division used two types of advertising. It advertised by contacting companies on the database. The turn-around time for that process was generally more than four weeks. The Division also advertised through "open tenders" such as newspapers, the Internet and other open instruments. That method was time-consuming. Further, such advertising

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drew hundreds and even thousands of responses, which then added delays to the procurement process. Where time permitted, however, the Division would be advertising openly. It advertised through open tenders for any procurement contract worth more than $25,000.

The Annual Statistical Report provided consolidated procurement information, including that which originated locally or from system body headquarters, he said. The Secretariat would be attempting to provide Member States with further consolidated procurement information.

Exigency measures must be used carefully, he said. When emergencies required such measures, justifications were provided. A task force was focusing on the Organization's financial rules. In addition, the issue involved major users such as the Department of Peacekeeping Operations and other bodies.

Suppliers had to meet minimum standards, he said. Once they had been evaluated, they were "prequalified", which meant that given the opportunity to complete a contract, they were able to do so. An inter-agency procurement working group was meeting to agree on a common approach to performance rating of suppliers. It would determine what criteria would be used to evaluate performance once a contract had been awarded.

He had been disappointed to hear remarks from the United Kingdom's representative about lack of improvement in the Division, he said. As a matter of fact, improvements had been made, centred on the report of the high- level group of experts. Many recommendations had been implemented, and others were under review. Reform was an ongoing process. Some of the delays had been beyond the Division's control. For example, the revised procurement manual had been prepared a year ago; its issuance was delayed as the Division had to wait for other divisions to provide inputs.

ANDRZEJ ABRASZEWSKI, Vice Chairman of the Joint Inspection Unit (JIU), said authors of the JIU report on outsourcing were pleased that the thrust of their report had met with support. Points on which delegations had expressed reservation would be addressed later. All officials who had participate were to be thanked for their help in the preparation of the report.

He said the statement in the report that the United Nations had only been able to supply piece-meal data on the use of outsourcing was the reflection of a general pattern that existed in the Secretariat as a whole. Outsourcing was not immune to the general lack of data. Sometimes, one was required to make educated guesses. The lack of reliable information in the area of outsourcing might negatively affect the reform process.

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Regarding the use of former staff members as potential providers of outsourcing contract, he said the JIU was aware of concerns expressed by delegations. The issue was being examined. DJAMEL MOKTEFI (Algeria) said his delegation had been disappointed by the content of the statement of Mr. Robertson, which had put the ball back in the court of developing countries. The expansion of the suppliers roster required properly targeted efforts to assure transparency, so that all parties interested would be informed and could act on an equitable basis.

Further, the United Nations needed to make an effort in the direction of developing countries, he said. Preferential treatment for developing countries was an important subject. It was time to correct the balance. Peacekeeping operations in Africa, for example, had sold to markets outside of Africa for basic foodstuffs. An updated list of suppliers was requested. The lack of information from the Secretariat still needed to be addressed.

AHMED FARID (Saudi Arabia) said although there had been improvement on procurement, some key issues needed to be worked on, including the issuance of the procurement manual. Also, the report indicated that the current supplier roster was not reliable. Such problems had to be ironed out. He asked when his delegation would get the procurement manual. The question could not come up year after year. When did the Procurement Division intend to put bidding information on the Internet? How would it be advertised? Many resolutions had been passed, but not implemented -- including on procurement.

Mr. SIAL (Pakistan) said he had noted the information from Mr. Robertson that public opening of bids was being done. It was a matter of concern that the recommendations of the Board of Auditors about open tenders were still being reviewed. They should have been implemented by now.

The statement made for the European Union had merit in its focus on the lack of progress, he continued. On the procurement manual, the Secretary- General had originally stated that the manual would be issued by July 1996. After repeated delays, the Committee was now informed that the manual would be ready by the first quarter of 1998. When would it be issued? he asked.

He had mentioned three points that the Oversight Office had chosen not to include in its recommendations. One of those pertained to the use of open tenders. ERNESTO HERRERA (Mexico) said that at yesterday's meeting, the Committee had also considered the Organization's administrative and financial efficiency. Six delegations had spoken about outsourcing and procurement reform. Of those, two had made specific comments on the reform of the procurement system. Unfortunately, the replies received today had not responded to comments made yesterday.

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Yesterday, he had welcomed the fact that gratis personnel in the Procurement Division were being phased out, and indicated support for the views of the ACABQ that there was no sufficient justification to merit reclassifying a post to the level of Director (D-2) to lead the Division. Also yesterday, he had welcomed the work being done on providing information on bidding. He had sought additional information on the progress being made by the Secretariat regarding incentives for broadening the roster's base. The Mexican delegation would be happy to provide the Division with a trade directory of businesses from Mexico, if that would be of use.

Mr. SAHA (India) said he had mentioned that he would welcome receiving data on procurement for 1997. Posting information on a regular basis on a computer should not take more than a few minutes.

Mr. ROBERTSON, Chief of the Procurement Division, responding to the question of arbitration, said there were currently eight such cases. They were highly complex. Outside counsel had been engaged. He was not in a position to comment on what settlements were going to be. He hoped to provide further information during informal consultations.

Regarding the delay in the merger of the two offices, mentioned by the representative of the United Kingdom, he said that was due to delays in negotiations. There had been extensive meetings to arrive at the scope of work and on post allocation. The merger had taken effect as of February.

He said he looked forward to guidance at the informals as to how the number of developing countries in the suppliers roster could be expanded. Rules currently in force made it difficult to give preferential treatment. Increasing the share of the market for such countries was desirable.

As the Under-Secretary-General for Management had said, the procurement manual would be available in April, he said. A draft was ready. It required further embellishment. The guidelines for competitive bidding would be on the Internet as early as April. Open tenders of anything above $500,000 had been used for a number of service contracts. The phasing out of the use of gratis personnel in the Procurement Division had begun and would continue.

Mr. HERRERA (Mexico) said he was sorry to insist on his question. If an answer was not possible right now, a response in writing would be appreciated.

Mr. ROBERTSON said that a system of selecting suppliers was being developed. Companies from countries that had not registered could not be invited. The ideal was to have suppliers from as many countries as possible.

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Aspects of 1998-1999 Budget

JAMES BOND (United States) said his country was opposed to raising honoraria for members of various United Nations bodies. Since granting honoraria had been inappropriate from the outset, there was no value in debating its rate.

EVA SILOT BRAVO (Cuba) asked about the completion date of a conference room paper on posts and recruitment processes. That paper should indicate the date when the various departments had been authorized financially to begin recruiting for posts. Further, it should include information on the status of posts which had been slated for elimination by the Secretary-General, and which the Assembly had subsequently decided to retain.

Mr. CHOWDHURY (Bangladesh), Committee Chairman, said the Secretariat would provide information on the matter tomorrow morning.

The Chairman then read out a draft decision regarding honoraria, as follows:

"The Assembly takes note of the report of the Secretary-General on an interim study of the question of honoraria payable to members of organs and subsidiary organs of the United Nations; endorses the observations made by the Advisory Committee; and decides to consider the comprehensive report of the Secretary-General at its fifty-third session."

The Committee adopted that decision without a vote.

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