SEABED AUTHORITY'S COUNCIL DISCUSSES FINANCIAL ISSUES

Press Release
SEA/1601

SEABED AUTHORITY'S COUNCIL DISCUSSES FINANCIAL ISSUES

KINGSTON, 25 August (International Seabed Authority) -- Issues concerning the contribution of the European Community, the proposed single three-week session of the Authority next year and the appointment of auditors sparked debate in this morning's meeting of the Council of the International Seabed Authority.

The Council, meeting at the Jamaica Conference Centre in Kingston, was continuing its discussion of the Finance Committee's recommendations, including a proposed $5,011,700 budget for the Authority in 1999.

The Council is expected to approve a three-week session next year as an exceptional cost-cutting measure, replacing the two two-week sessions usually held. Secretary-General Satya N. Nandan said he had received a suggestion that the session be held from 9 to 27 August 1999.

Council President Joachim Koch (Germany), discussing the Council's progress in reviewing the draft seabed mining code, said a revised text of regulations discussed at this session will be circulated soon after the close of this session. At the 1999 session, he said, the Council should continue in informal sessions to complete its review of the remaining regulations and annexes. Only when consensus was reached on the entire text should the code be taken up in formal meetings.

The representative of Austria, speaking for the European Community, and referring to Annex IX of the United Nations Convention on the Law of the Sea (on participation by international organizations), said the organization is prepared to contribute $80,000 to the budget of the Authority and $4,000 towards the Working Capital Fund. He said the contribution of the European Community should be seen as an indirect contribution to the budget and not as an increase in the contribution of individual States in the Community. At the same time, the European Community wanted its agreed contribution to the budget of the Authority recorded in a formal document.

Japan's representative referred to the report of the Finance Committee (documents ISBA/4/A/13 and ISBA/4/C/10), which stated that the Committee had reached no agreement on how to treat the European Community's contribution for purposes of establishing the scale of assessment, although that agreed

contribution, "as determined by the Assembly", is obligatory. Japan said the Council must recommend to the Assembly the amount of the European Community's contribution. In light of this, Japan proposed an additional paragraph to the draft decision of the Council (document ISBA/4/C/L.2/Rev.1), to read as follows:

"Also recommends to the Assembly that the amount of the European Community's contribution to the revised budget of 1999 is $80,000, and the amount of the contribution to Working Capital Fund is $4,000."

Austria proposed that the text should refer to the "agreed contribution" of the European Community.

With regard to the cost-cutting move for a single session next year, the Latin American and Caribbean Group, through the representative of Chile, again asked that the Council formally state that the three-week session is not to be considered a precedent, but is approved on an exceptional basis only for next year. Argentina proposed that the Council decision include the following wording to express this idea: "that in view of the prevailing budgetary situation, on an exceptional basis, there should be one three-week session of the Authority in 1999".

The Netherlands and Poland opposed introducing the question of precedent into the text of the Council decision. The Council President, Joachim Koch (Germany), suggested that the Latin American view could be noted in another form, possibly by reference in the closing statement by the Council President.

On the issue of the appointment of a United Nations external auditor to audit the Authority for 1998, comments were made by several delegations. The Republic of Korea, supported by Namibia and Jamaica, proposed that to reduce costs, an independent auditor instead of a United Nations auditor should be appointed to audit the Authority for 1998.

In the debate which followed, several delegations, while expressing no opposition to the United Nations auditor, urged that the most cost-effective course of action be pursued. Namibia expressed surprise that the text of paragraph 7 of the draft decision made no mention of the Finance Committee's request that the Secretary-General make a proposal next year for appointment of government auditors or a private audit firm "on the most cost-effective basis".

Other delegations supported the recommendation of the Finance Committee to use the United Nations auditor who had prior experience in dealing with the Authority. The Russian Federation said that the savings to be gained from other alternatives were negligible. Summing up the debate on this issue, the President said the draft Council decision would be revised to include the reference to independent auditors in the Finance Committee's report.

- 3 - Press Release SEA/1601 26 August 1998

Indicative Assessment Rates

In view of the uncertainty over continued membership of the 11 provisional members of the Authority (including the United States) next year, the Secretariat has prepared two "indicative" 1999 assessment lists based on the proposed $5,011,700 budget. One list includes all 137 member States, while the other omits the 11 provisional members (whose membership after 18 November 1998 depends upon their ratification of the 1982 United Nations Convention on the Law of the Sea).

There was no objection to a request made by the Russian Federation for the two indicative scales of assessment prepared by the Secretariat to be issued as official documents attached to the decision of the Council related to the budget. The "indicative rate of assessment" lists will be annexed to the Council's budget report to the Assembly. The final assessment rates will not be established until after 16 November 1998.

The lists, based on the regular budget scale of assessment of the United Nations for 1998, show that without the 11 provisional members sharing in the 1999 budget cost, the developed countries' assessments would be increased to up to 50 per cent more than their 1998 assessments. Japan would become the largest contributor with an estimated $1,232,000 assessment (25 per cent), followed by Germany ($733,000), France ($494,000), Italy ($411,000), United Kingdom ($386,000), Russian Federation ($218,000), Spain ($195,000), Netherlands ($123,000), Brazil ($115,000) and Australia ($112,000). Most developing countries would continue to be assessed $493 a year.

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