DISCUSSION OF UNTAET’S BUDGET COMMENCES IN FIFTH COMMITTEE

Press Release
GA/AB/3411

DISCUSSION OF UNTAET’S BUDGET COMMENCES IN FIFTH COMMITTEE

The range and depth of need in East Timor was extensive, the Fifth Committee (Administrative and Budgetary) was told this morning, and the international community was responding to those needs with energy -– through development and humanitarian assistance and contributions of personnel.

As the Committee began its consideration of the financing of the United Nations Transitional Administration in East Timor (UNTAET), the representative of Australia (also speaking on behalf of Canada and New Zealand) went on to support the recommendation of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) to approve a budget of $563 million (gross) for 2000-2001, taking into account the $200 million already assessed. He also welcomed the planned return to Member States of the unencumbered balance of $48.9 million for the period ending 30 June 2000.

Speaking on behalf of the Association of South-East Asian Nations (ASEAN), the representative of the Philippines stressed the need to provide UNTAET with adequate funds, to enable it to discharge its multifaceted responsibilities, and called on all Member States to pay their assessed contributions in a timely manner. Noting that the recommendations of the ACABQ would reduce the Secretary- General’s proposed budget by 5 per cent, she sought assurances that the mission would be able to effectively implement its mandate.

Speaking on behalf of the European Union and associated States, the representative of France also supported the recommendations of the Advisory Committee. He informed the Committee that the second Donors Conference for UNTAET had been held in Lisbon last June, and the third such Conference would be hosted by the European Commission in Brussels in December.

Reports before the Committee were introduced by United Nations Controller Jean-Pierre Halbwachs, and the Chairman of the ACABQ, Conrad C.S.M. Mselle.

Also this morning, the Committee heard concluding statements on the United Nations common and pension systems by the Chairman of the International Civil Service Commission (ICSC) Mohsen Bel Hadj Amor, the Assistant Secretary-General for Policy Coordination and Inter-Agency Affairs, Patrizio Civili, and the Chief Executive Officer of the United Nations Joint Staff Pension Board, Raymond Gieri. They also responded to questions posed during the debate.

At its next meeting, which will be held at 3 p.m. on Tuesday, 21 November, the Committee will begin consideration of the reports of the Office of Internal Oversight Services (OIOS) and take up the financing of the United Nations Interim Administration in Kosovo (UNMIK).

Fifth Committee - 2 - Press Release GA/AB/3411 29th Meeting (AM) 17 November 2000

Committee Work Programme

As the Fifth Committee (Administrative and Budgetary) met this morning, it was expected to begin consideration of financing of the United Nations Transitional Administration in East Timor (UNTAET) and to conclude its general discussion of the United Nations pension and common systems. (For background information on the last item, see press release GA/AB/3408 of 10 November.)

The Committee had before it the report of the Secretary-General on financing UNTAET (document A/55/443), which contains the proposed budget from 1 July 2000 to 30 June 2001 for the mission’s maintenance. The document supersedes previous budget submission contained in document A/54/769/Add.1.

The current proposed budget amounts to some $592.31 million gross (about $574.47 million net), the report states. The budget reflects the results of the comprehensive review of UNTAET and provides for requirements for the reorganization of the mission and current operational needs. Of the total budget, some 35 per cent of resources relate to civilian personnel costs. Operational requirements account for 22 per cent of the budget, military personnel costs constitute 39 per cent, and staff assessment comprises 3 per cent of the total. Less than 1 per cent of the total resources is related to other programmes. Estimated requirements for 1 July 2000 to 30 June 2001 are 69.2 per cent more than the seven-month apportionment for 1 December 1999, when UNTAET was established, to 30 June 2000.

As a consequence of the comprehensive review of UNTAET, the structure of the Transitional Administration was reorganized to resemble more closely the future government, and to increase the direct participation of Timorese to enable them to assume greater political responsibility. The action to be taken by the General Assembly, as set out in the report, involves appropriation of some $592.31 million gross (about $574.47 million net) for the maintenance of the Transitional Administration, inclusive of about $292.07 million gross ($283.69 million net) for the period from 1 July to 31 December 2000 authorized by General Assembly resolution 54/246 C.

According to a related report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) (document A/55/531), one of the main recommendations of the Advisory Committee in it previous report (document A/54/804) concerned the urgent need to review the proposed structure and functions of governance for East Timor, with a view to establishing a sustainable structure for its future government. The structure of UNTAET has been reorganized.

Further, according to the report, the Secretary-General has proposed that the former governance and public administration component be redesigned as the East Timor Transitional Administration so it would more closely resemble a future government and increase the direct participation of the Timorese. The ACABQ notes that efforts have been made to simplify the governance and public administration component of the mission; however, it is not convinced that all its concerns have been fully addressed. It, therefore, recommends that the structure of UNTAET be kept under review and is reported upon in future budget submissions. It also appears to the Committee that a number of items have been included in the proposed UNTAET budget that would otherwise be funded from the consolidated budget, such as police training, judiciary costs and infrastructure repairs.

The ACABQ was informed that, on the assumption that the handover to local authority takes place by the end of 2001, peacekeeping, civilian police activities and civil administration will almost certainly require external support after the expiration of the UNTAET mandate. That support would best be provided by the United Nations under a new mandate, as well as by the United Nations Development Programme (UNDP) and specialized agencies. It also requests that information on the work of the United Nations agencies and programmes, and other partners in East Timor, continue to be provided as an annex to future submissions, including the amount of resources committed for assistance and the numbers and levels of personnel deployed in the territory.

On the proposed travel estimates, the report says that for 2000-2001 they amount to some $8.43 million, comprising $742,500 for military personnel, $6.92 million for civilian personnel and $771,200 for other travel, or an increase of 78.3 per cent against the period to 30 June 2000. On the basis of the information provided on deployment of military and civilian personnel and provisional expenditures as at 30 June, the ACABQ believes that travel requirements have been overestimated and that considerable savings are possible.

The ACABQ further agrees with the proposed estimates for military observers, noting that considerable savings will be possible under military contingents. It notes with concern that of 25 troop-contributing countries, to date only seven have signed memoranda of understanding. It welcomes efforts to deploy United Nations Volunteers in the various operations of the mission. In the view of the ACABQ, on the basis of the mission’s experience in the prior period, the vacancy factor for National Officers and local staff should be adjusted to 10 per cent for National Officers and 5 per cent for local staff.

Regarding its previous recommendation that the proposed Assistant Secretary- General-level post for the Chief of Staff in the Office of the Representative of the Secretary-General was not justified, the ACABQ says that the reply provided in annex III of the proposed budget is not satisfactory. The level of the post should be reviewed to determine whether it has been graded at too high a level. The adequacy of the number of posts proposed for the office of the Ombudsperson should be monitored and the role of the Ombudsperson should not be confused with that of investigator. The audit function for UNTAET should comprise four auditor posts (1 P-5, 1 P-4 and 2 P-3). Consideration should be given to charging some of the cost to the consolidated budget of East Timor to the extent that activities funded from that budget are audited.

The ACABQ raised questions concerning potential duplication of efforts, but information on this was not received. It should be provided to the Fifth Committee during its review of the UNTAET budget proposal, as well as the information on the total cost of the judiciary in the assessed budget, including provisions for the appointment of international judges, prosecutors and international lawyers as defence counsel.

As the establishment of a viable judiciary and installation of a local police and security forces should be accorded priority by UNTAET, the ACABQ recommends approval of $9.4 million for infrastructure repairs under the assessed budget for UNTAET, as follows: $2.1 million for upgrading of airstrips, $2.3 million for road works and $5.0 million for bridges. Significant savings will be possible under air operations and military contingents, but the ACABQ agrees with proposed estimates for military observers. Savings of at least 5 per cent are possible under contractual services. The ACABQ agrees with estimated requirements of $3.4 million to cover costs for other programmes, including provision for election-related supplies and services ($1.8 million), public information programmes ($1.6 million) and training programmes ($0.1 million). It asks that, in future submissions, information be provided on the sources and uses of resources under trust funds.

Taking into account its other observations and comments, the ACABQ finally recommends that the General Assembly appropriate for the maintenance of UNTAET an amount of $563 million for the period from 1 July 2000 to 30 June 2001, reflecting a reduction of approximately 5 per cent from the amount proposed by the Secretary- General. The unencumbered balance of about $48.97 million as at 30 June 2000 should be credited among Member States.

Introduction of Reports and Statements

JEAN-PIERRE HALBWACHS, Assistant Secretary-General for Programme Planning, Budget and Accounts and United Nations Controller, introduced the Secretary- General’s proposed budget for UNTAET. The original budget estimates for UNTAET were submitted earlier in the year, he explained. Based on the ACABQ’s recommendation, the General Assembly did not act on that budget. The revised budget, which was before the Committee, superseded the budget submitted earlier. It incorporated the results of a comprehensive review of UNTAET and provided for a new organizational structure which reflected the future East Timor Government. The Special Representative of the Secretary-General would be assisted in his function by the Deputy Special Representative, the Transitional Administrator and the Chief of Staff. His Office also included an Ombudsperson. The function of the East Timor Transitional Administration was discussed in the Secretary- General’s report. There were eight portfolios in the transition cabinet, including police, justice, finance, internal administration, infrastructure and economic and social affairs. The Special Representative retained full responsibility for the Transitional Administration, while the Deputy Special Representative was in charge of day-to-day activities. The Secretary-General envisaged a reduction in the number of military observers by the end of January 2001. The proposed staffing table also addressed the observations which the ACABQ had made in its review in the previous budget.

HENRY FOX (Australia), also speaking on behalf of Canada and New Zealand, said that the revised budget had been prepared following the comprehensive review of UNTAET’s structure by the Secretary-General, taking into account recommendations made by the ACABQ in its March report. That review was subsequently endorsed by the Fifth Committee. The Secretary-General had requested a revised budget of $592 million and the ACABQ had identified possible savings in a number of areas, suggesting that the budget be adjusted by roughly 5 per cent. It recommended approval of a budget of $563 million (gross) with assessment of $363 million, taking into account the $200 million already assessed, and the return to Member States of the unencumbered balance of $48 million for the period ending 30 June 2000. He could support those recommendations.

The ACABQ suggested that attention should be directed to planning for the post-UNTAET period, he continued. While welcoming the progress already made in that respect, he agreed that the establishment of a viable judiciary and the training and installation of a local police force should be accorded priority within the assessed budget, as well as planning and phased implementation of those and other sectors, on a timetable agreed upon among the parties for handling over responsibility to an independent East Timor. He also welcomed the increasing focus being given by the ACABQ to issues concerning the nature of United Nations involvement following East Timor’s independence at the end of 2001.

The range and depth of need in East Timor was extensive, he said. The international community was, however, responding to those needs with energy -– through development and humanitarian assistance and contributions of personnel. He was also pleased to note that, at 31 October, 72 per cent of assessments had been paid, compared with only 37 per cent in May. While that was extremely satisfying, $149 million remained outstanding, and he urged all delegations to pay their outstanding assessments.

ALEXIS LAMEK (France), speaking on behalf of the European Union and associated States, said that the Union supported the ACABQ’s recommendations in regard to UNTAET. The Union also supported the mandate of that mission. He recalled that the second Donors Conference for UNTAET had been held in June in Lisbon. That Conference had gathered broad support for the mission. He informed the Committee that the European Commission would be hosting the third Donors Conference in December, at the invitation of the World Bank.

Speaking on behalf of the Association of South-East Asian Nations (ASEAN), MARY JO B. ARAGON (Philippines) stressed that adequate funds should be made available to UNTAET to enable it to discharge the multifaceted responsibilities entrusted to it. She noted that unpaid assessments amounted to $262.3 million, according to paragraph 9 of the ACABQ report. In that regard, she reiterated the need for all Member States to pay their assessed contributions in a timely manner. The ASEAN appreciated the important role of the UNDP in coordination, resource mobilization and project implementation for infrastructure rehabilitation, as well as capacity-building in East Timor. She also welcomed the various roles and functions of other United Nations bodies in UNTAET operations.

She noted that the recommendations of the ACABQ would reduce the Secretary- General’s proposed budget for UNTAET by 5 per cent and sought assurances that UNTAET would be able to effectively implement its mandate. The ACABQ recommendation with respect to the two additional professional posts for internal auditors, given the size and scope of the mission, was welcome. As for the post level of the Chief of Staff to the Special Representative of the Secretary- General, she believed that the information provided by the Secretary-General in his report fully justified the retention of that post at the level of Assistant Secretary-General. The ASEAN supported the recommendation of the ACABQ to credit Member States with the unencumbered balance of $48.9 million for the period ending 30 June 2000. It stood ready to cooperate with all delegations to enable the Fifth Committee to take an early decision on the financing of UNTAET.

Introducing the report of the ACABQ, the Chairman of that body, C.S.M. MSELLE, said that upon review of the Secretary-General’s proposed budget, the Advisory Committee had taken into account all most recent developments in connection with the mission. It was recommending the approval of the assessment of some $363 million, taking into account the $200 million already assessed. The $48.9 million was an unencumbered balance. Accordingly, the crediting to Member States of that amount should take place at the time when the audit was completed. Additional information would be provided by the Secretariat as to the time when that crediting would take place.

The Committee then turned its attention to its agenda item on the United Nations common system of organizations.

MOHSEN BEL HADJ AMOR, Chairman of the International Civil Service Commission (ICSC), expressed appreciation for those who had stressed the importance of the common system. The ICSC had embarked upon several major initiatives aimed at strengthening the international civil service, including the integrated framework for human resources management, a comprehensive review of the pay and benefits system and the revised standards of conduct. The framework, which also constituted a programme of work for the Commission, would engage the energies of the ICSC over coming years as it took up the separate components on a systematic basis. The Commission saw the framework as a guiding tool for organizations aiming to improve human resources policies and processes.

In reference to the review of the pay and benefits system, the ICSC intended to approach its work with no preconditions, he said. Everything was on the table and was open to discussion and debate. It began last summer to examine, in a preliminary manner, alternative pay systems and structures, such as broad-banding. One delegate had referred to broad-banding as if it had already been adopted and approved by the General Assembly. Nothing could be further from reality. He wished to set the record straight on several issues. A recent article by the American Compensation Association noted that of 116 organizations surveyed in 1996 and 73 in 1998, some 90 per cent indicated that broad-banding was a highly effective human resources approach. Also, while the job evaluation system became more streamlined, all broad-banding systems utilized some form of job evaluation. One of the attributes of broad-banding was that it more closely related to the labour market, meaning that comparisons became more important, not less. All matters, however, were still to be discussed.

The importance of maintaining the post-based job classification had also been underlined, he continued. While all common system job classification standards were based on job duties and responsibilities, qualifications were taken into account to supplement those standards. On the related issue of the grade equivalency study, it was important that there be confidence in the grade equivalencies established. For the next grade equivalency study, the ICSC intended to look into more modern computerized methods to simplify the process while maintaining accuracy. The ICSC would continue to study all viable alternative systems in an effort to enable the Assembly to arrive at one that was most appropriate for the United Nations system.

Regarding the comment that the ICSC should consider raising the minimum basic salary scale in real terms, while that was not the objective of the review, any new system had associated costs, he added. Real improvements were rarely cost-neutral. The question of increases was a matter for Member States. He recalled that in 1995 and 1996 the ICSC had recommended that the Assembly increase the base/floor salary scale in real terms, by some 9.5 per cent and 4.5 per cent respectively. That would have addressed the issue of the narrow margin at the higher levels. The Assembly decided not to accept those recommendations. The ICSC was acutely aware of the issue of the margin at the D-1/D-2 levels and would be looking at the issue again. The matter could only be resolved in the context of a real salary increase.

Concerning the timing of the study, he wished to dispel what was perhaps a misunderstanding. Through a series of working groups, the ICSC would start next month -- not at its June 2001 session -- to look at a number of pay and benefits areas. Their findings would be reported through the Steering Committee and an open-ended working group of the whole to the ICSC at its June 2001 session. The ICSC would then give its views and provide guidance to the Secretariat for further study. He expected to be studying the issue for some two years. Regarding the education grant, it was indeed a complex entitlement, which was why he had said it would be addressed in the context of the pay and benefits system review. On the common scale of staff assessment, the ICSC, in close cooperation with the Pension Board, had looked at updating the common scale in 1998 and 2000. Both times it concluded that taxes had moved so minimally at the seven headquarters duty stations that there was no need to change the scale.

He said that the standards of conduct should enjoy the full support of staff and organizations. It was for that reason that the ICSC, which had already done its part in revising the standards, decided to meet the request of its interlocutors and give the process one more year in an effort to obtain consensus. Given the effort expended on the matter, he did not feel that certain comments about the ICSC not reporting on the standards of conduct this year were justified. It, however, would do its best to satisfy the request next year, bearing in mind that it did not work in a vacuum. In response to comments on strengthening the international civil service, it was now up to the Assembly to decide if a review was needed. Should it go forward, the ICSC and its secretariat, would be involved at every stage.

PATRIZIO CIVILI, Assistant Secretary-General for Policy Coordination and Inter-Agency Affairs, said that members of the Administrative Committee on Coordination (ACC) were encouraged by the expressions of support and the degree of interest shown by the Fifth Committee. He fully shared the view of the ICSC that should the Assembly decide to pursue a review, its secretariat should be fully involved at every stage. He was at the Committee’s disposal for further discussion in the course of its informal meetings.

The Committee then turned its attention to consideration of the United Nations Joint Staff Pension Fund.

RAYMOND GIERI, Chief Executive Officer of the United Nations Joint Staff Pension Fund, expressed appreciation for the support given to the work of the Fund and said that during the discussion, several delegations had referred to the recommendations by the Board related to new article 35 of the Regulations of the Fund, which had been approved by the General Assembly in 1998. The amendment would cover surviving divorced spouses of former participants who had separated from service before 1 April 1999. At present, article 35 covered only divorced spouses of participants or former participants who separated on or after 1 April 1999. The General Assembly had requested the Board to review that limitation.

The Board proposed that the objective of broad coverage would best be met by providing a new benefit for that closed group of divorced surviving spouses.

In that respect, the Board had considered a proposal to establish a new benefit at either two or three times the minimum benefit for a surviving spouse, he continued. The Federation of Associations of Former International Civil Servants favoured setting the amount at three times the minimum surviving spouse’s benefit. However, the Board had been unable to reach consensus in favour of that level. A consensus was achieved, however, for setting the new benefit at two times the minimum. The Federation also pressed for elimination and modification of some of the eligibility conditions. The five criteria had been recommended by the Board and approved by the General Assembly in 1998. The Board took the position that the criteria should not be modified at this stage, as it was preferable to await further experience with the implementation of current provisions. To date, such experience was limited to one case.

On the issue of “domestic partnership”, some members of the Board favoured proceeding with further study of the matter, while others were strongly opposed to that. References had been made in the discussion to pension and other benefit coverage to domestic partners that had either already taken place or were under consideration in a number of countries. The intention of the Board at this stage was to collect information and carry out assessments of their implications, if any, for the United Nations pension system. Any concrete action would require a recommendation by the Board and approval of the General Assembly.

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