INTERNATIONAL SEABED AUTHORITY'S FINANCE COMMITTEE RECOMMENDS REDUCED BUDGET OF $5,011,700 FOR 1999
Press Release
SEA/1598
INTERNATIONAL SEABED AUTHORITY'S FINANCE COMMITTEE RECOMMENDS REDUCED BUDGET OF $5,011,700 FOR 1999
19980825 End of Provisional Membership Creates 'Exceptional Situation' Next Year(Delayed in transmission; reissued as received.)
KINGSTON, 21 August (International Seabed Authority) -- The Council of the International Seabed Authority this afternoon received recommendations of the Finance Committee, under which the Authority's proposed budget for 1999 would be reduced to $5,011,700 -- 10 per cent less than the amount proposed earlier by the Secretary-General of the Authority.
In its report to the Authority's Council and Assembly, the Committee said the Secretary-General had submitted the revised budget in light of discussion in the Finance Committee, and "the need to take into account the prevailing exceptional situation resulting from the termination of provisional membership".
The "exceptional situation" concerns the 11 provisional member States of the Authority which, unlike the other 127 members, have not yet ratified the 1982 United Nations Convention on the Law of the Sea. Only those which ratify the Convention and related 1994 Agreement before 16 November will remain as members of the Authority after that date. The 11 countries, which together are assessed to pay about one third of the total budget contributions, are Bangladesh, Belarus, Belgium, Canada, Nepal, Poland, Qatar, Switzerland, Ukraine, United Arab Emirates and the United States (which is assessed for 25 per cent of the budget). One provisional member, Poland, has told the Authority its ratification process has been completed.
The earlier 1999 budget proposal submitted by the Secretariat (document ISBA/4/A/10) amounted to $5,604,100. The current year's budget amount is $4,703,900.
Single Three-Week Session for 1999
To achieve reductions due to the exceptional situation, the Finance Committee recommended that the Authority hold only one session next year, for
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three weeks, instead of meeting twice for two-week sessions. This would save $240,000, the Secretary-General estimated. (The change from two sessions to one will require approval of the Assembly.) Other savings would result from deferred recruitment for posts already approved in the past and cuts in additional areas. The Authority has a total staff of less than 40 Professionals and General Service staff.
"This is a bare-bones budget with no fat", said Secretary-General Satya N. Nandan. "The Secretariat does not consider the revised budget as a basis on which future budgets will be presented." He also said that without payment of all assessed contributions, some Authority activities could not be carried out.
In his report to the Council, Finance Committee Chairman S. Rama Rao (India) explained that two alternatives were submitted by the Secretary- General for consideration by the Finance Committee, which has been meeting in closed session since the beginning of this week. If conference services were provided for one three-week session, the total budgetary requirement would be $5,011,700. If meetings continued to be held in two two-week sessions, the sum would increase to $5,252,200 (see document ISBA/4/A/10/Add.1).
The Finance Committee recommended that in the light of the uncertain financial situation of the Authority, the Secretary-General be authorized to transfer funds between appropriation sections, up to a limit of 30 per cent of the amount in each section. It was also recommended that he be authorized, should the funds in the Working Capital prove inadequate to meet shortfalls in the cash flow, to utilize available funds (fees paid by pioneer investors) up to 20 per cent of the 1999 budget.
With regard to the scale of assessment for 1999, the Committee recommended that the Secretary-General should be authorized to establish the definitive scale after 16 November, based on which members currently holding provisional membership will become full members and would therefore be eligible to pay their assessed contributions. The Finance Committee requested the Secretary-General to prepare scales of assessment indicating the best and worst case scenarios for the information of all members.
The Finance Committee Chairman reported that there was no agreement on how to treat the contribution of the European Community ($75,000 in 1998) -- that is, whether it should be incorporated into the scale of assessment or first be deducted from the approved budget, after which the scale would be applied to States members. It was agreed that a decision on this matter would be taken at a later date. The Chairman proposed that as a temporary measure for 1999, the European Community's contribution, which would not appear in the scale of assessment, could be used by the Secretary-General for any of the budgetary items.
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Chairman Rao informed the Council that although Article 172 of the 1982 United Nations Convention on the Law of the Sea provided for an annual budget for the Authority, the Finance Committee had proposed, in the draft financial regulations to be presented to Council next week, the adoption of a biennial budgetary system. It was felt that this system would be more efficient and cost-effective and would better address the practical needs of the Authority.
The Committee recommended the appointment of a United Nations External Auditor to audit the Authority for 1998 and that for the future, the Secretary-General should make a proposal for the appointment of either government auditors or a private firm, based on cost-effectiveness.
Comments on Budget
Indonesia, speaking on behalf of the Asian Group, said the preliminary position of the Group, decided on at a meeting yesterday, is as follows: The Asian group appeals to all members of the Authority to pay their assessed contributions; the group accepts the proposal for one three-week session of the Authority for 1999, but the decision should not be considered a precedent; the Authority should look into other ways to cut costs, through minimal use of interpreters and translators, and local recruitment of such personnel where possible.
Japan welcomed the findings of the Finance Committee on the European Community but said it was disappointed at its failure to agree on how to treat the European Community contribution for the purpose of establishing the scale of assessment. As a cost-cutting measure, the representative of Japan said the Council should recommend to the Assembly that it ask the General Assembly of the United Nations to review its conference services charges, which amount to 13 per cent of the Authority's budget.
Poland, speaking for the Eastern European Group, and the Netherlands, speaking for Western European and Other States Group, said they would accept the proposal for a three-week session in 1999. The representative of the Netherlands said the Group took a common position that a three-week meeting might be more productive and would also represent some savings for individual delegations.
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