DEMANDS FROM NEW MANDATES, UNFORESEEN EXPENDITURES, COSTING VARIATIONS CONFRONT MEMBER STATES WITH STEEP INCREASES, COMMITTEE IS TOLD

Fifty-seventh General Assembly

Fifth Committee

29^th Meeting (PM)

DEMANDS FROM NEW MANDATES, UNFORESEEN EXPENDITURES, COSTING VARIATIONS

CONFRONT MEMBER STATES WITH STEEP INCREASES, COMMITTEE IS TOLD

As the Fifth Committee (Administrative and Budgetary) met this afternoon to discuss items related to the programme budget for the biennium 2002-2003, several delegates expressed concern over growing expenditures presented to the Committee in the first performance report for the current biennium.

[The report is submitted in the first year of the biennium in order to identify adjustments for inflation and exchange rate variations, as well as additional mandates that the Assembly and the Security Council have approved after the adoption of the budget.  Also contained in the report are unforeseen and extraordinary items that could not be deferred to the second year of the biennium. The revised requirements under the expenditure sections amount to some $2.9 billion –- an increase of $215.1 million against the appropriations level approved in June 2002.]

This year, the situation was anything but routine, said New Zealand’s representative.  Everybody was familiar with the additional demands facing the Organization from new mandates and unforeseen and extraordinary expenditures.  Those demands had coincided with major variations in costing.  The combination of those factors meant that Member States faced significant increases.

The representative of the United States said that much as he was concerned about a sharp increase in expenditures, he was also concerned about a sharp decrease in income of the United Nations.  As far as the activities of the postal administration were concerned, for example, the Organization seemed to be bleeding money.  He agreed with the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that in view of the continuing decline in income from the sale of stamps, it was necessary to fundamentally rethink the way that activity was run.

While emphasizing the great importance of the issue of special political missions, the growing amounts of money needed to finance those missions were of concern to several speakers.  Delegates felt that the time had come to change the way in which resource requirements for such activities were presented to the Assembly.  The Organization was now operating in a results-based framework, and that should be extended to all United Nations activities, including special political missions and peace-building work.

Delegates also voiced concern over the financial performance of the International Research and Training Institute for the Advancement of Women (INSTRAW).  Last year, regular budget funds had been provided to the Institute on

an exceptional basis, yet despite such support, delegates stressed the serious flaws in INSTRAW’s management.  That was seen to be particularly serious, since the statute of INSTRAW stipulated that the organization should be funded though voluntary contributions.

Also addressing the Fifth Committee this afternoon were the representatives of Denmark, Tunisia, Japan, Belgium, Venezuela, Cuba and Syria.

Controller Jean-Pierre Halbwachs, Conrad S. M. Mselle, Chairman of the ACABQ, and Warren Sach, Director of the Office of Programme Planning and Budget Division, introduced the related reports.

The Committee will meet again Wednesday, 4 December, at 2:30 p.m., to continue its consideration of items related to the programme budget for the biennium 2002-2003.

Background

The Fifth Committee (Administrative and Budgetary) met this afternoon to consider a number of items on its agenda:

Before the Committee was a report of the Secretary-General on estimates in respect of matters of which the Security Council is seized (document A/C.5/57/23). The report is submitted in the context of action taken or expected to be taken by the Security Council during the course of 2002-2003 regarding good offices, preventive diplomacy and post-conflict peace-building missions, on the basis of requests from governments and/or recommendations of the Secretary-General.

The report contains the proposed resource requirements of 18 political missions pertaining to matters of which the Security Council is seized for the period to 31 December 2003, the mandates of which extend or are expected to be extended into 2003.  In addition, resources are being sought for one political mission, the Monitoring Mechanism on Sanctions against the União Nacional para

a Independência Total de Angola (UNITA), for its mandate ending 19 December 2002, as its expenditures have exceeded the current appropriation.  The total estimated requirements for the extension of these missions amount to $82.76 million net ($90.95 million gross).

After taking into account the estimated balances expected to remain unencumbered for each of the missions at the end of their current mandate periods ($13.74 million), the additional amount being sought in the present report amounts to $69.03 million net ($77.2 million gross). The requirements arising in respect of special political missions mandated by the General Assembly are not addressed here.

In a related report (A/57/7/Add.17) the Advisory Committee on Administrative and Budgetary Questions (ACABQ) stresses that future reports should be comprehensive, and should include all missions already charged or to be charged to the provision for special political missions under the relevant sections of the programme budget.  They should include charges arising from decisions of both the Security Council and the General Assembly.

Furthermore, the estimate for open-ended entities, such as monitoring mechanisms, expert groups or the Counter-Terrorism Committee, should be presented in the proposed programme budget and not through the report on estimates.  In general, further improvements are needed to enhance clarity, fully justify requirements and to promote transparency and consistency in the presentation of estimates for various items of expenditure.

The Advisory Committee recommends the approval of an additional expenditure amount of $60.04 million after taking into account the estimated unencumbered balance of $13.74 million for the current mandate period.  This amount would be reflected in the first performance report for incorporation within the revised appropriation for the biennium 2002-2003.

Also before the Committee was a Secretary-General’s statement of programme budget implications (PBI) (document A/C.5/57/24) of draft resolution A/C.3/57/L.16/Rev.1, whereby the Assembly would endorse the recommendations made by the working group on future operations of the International Research and Training Institute for Women (INSTRAW).  Adoption of the text by the Assembly would give rise to additional requirements of $500,000 from the regular budget of the United Nations to finance the core activities of the Institute so as to give it the same status as other institutes of the system.

According to the PBI, the amount of $500,000 would not be sufficient to enable INSTRAW to continue its operations even at the current minimum level.  Nor is it anticipated that the resources required for the operation of the Institute in 2003 could be provided using existing resources approved in the regular budget for the current biennium.  The additional requirements of $500,000 would therefore represent a charge against the contingency fund.  The additional amount of $1.31 million should be provided from as yet unidentified voluntary contributions. 

In a related report (document A/57/7/Add.18), the ACABQ points out that taking into account the provisions of the report of the Working Group, the total resources required would amount to some $1.8 million annually ($3.62 million on

a biennial basis).  The annual amount would include the annual provision of $500,000 from the regular budget to finance the core activities of the Institute or the four current Professional posts.  The remaining amount of $1.31 million, to be provided from unidentified voluntary contributions, would cover the costs associated with the post of the new Deputy Director, the four current G posts and other supporting operating expenses. 

Under the circumstances, should the Assembly adopt the draft, additional requirements of $500,000 would be required for the current biennium.  Representing a potential charge against the contingency fund, this provision would be considered in the context of the consolidated statement to be presented to the Fifth Committee at the end of the current session.  In order to ensure the viability of the Institute, the Advisory Committee trusts that the $1.31 million in additional contributions would be realized.

Another report before the Committee concerned the Permanent Forum on Indigenous Issues (A/C.5/57/26), transmitting the Secretary-General’s statement on the programme budget implications of a related draft resolution (A/C.3/57/L.7). The report recommends that the Fifth Committee inform the General Assembly that should it adopt the aforementioned draft resolution, there would be financial implications of up to $412,800 arising for the regular budget in the biennium 2002-2003.  The Assembly should also be informed that any decision to be made on additional appropriations for the biennium 2002-2003 would be addressed by the Committee at a subsequent stage, during its review of the consolidated statement of all assessments of programme budget implications and revised estimates.

In a related report (A/57/7/Add.19), the ACABQ recommends approval of three posts for the secretariat of the forum for the biennium 2002-2003 (one D-1, one

P-4 and one General Service) and stresses that this would lead to financial implications of up to $412,800 for the regular budget for 2002-2003.  This provision, representing a potential charge against the contingency fund, would be considered in the context of the consolidated statement to be presented to the Fifth Committee at the end of the current session.

The primary purpose of the first performance report, which is submitted in the first year of the biennium (document A/57/616), is to identify adjustments for inflation and exchange rate variations, as well as additional mandates that the Assembly and the Security Council have approved after the adoption of the budget.  Also contained in the report are unforeseen and extraordinary items that could not be deferred to the second year of the biennium. 

The revised requirements under the expenditure sections amount to some $2.9 billion –- an increase of $215.1 million against the appropriations level approved in June 2002 (or $289.2 million over the initial appropriation in December 2001). The revised estimate under the income sections amounts to $417 million, an increase of $7 million.  Consequently, net requirements amount to $2.49 billion (an increase of $208.1 million).

Regarding unforeseen and extraordinary expenses (an increase of $12.87 million), the report states that some $4.45 million relate to the maintenance of peace and security, including the functioning of the Independent Commission on the question of political prisoners and prison conditions in Burundi, technical assessment mission and United Nations Office in Angola, border controversy between Guyana and Venezuela, assessment mission to the occupied Palestinian territories, fact-finding mission to the Jenin refugee camp, team of experts regarding Somalia, and The Special Envoy of the Secretary-General for the inter-Congolese dialogue.  Some $329,300 relate to the expenses of the International Court of Justice; and $8,300 to the commitments for inter-organizational security measures.

An increase of some $88.97 million reflects direct requirements for special political missions established by Security Council mandates (some $77.2 million); conference-servicing and support requirements for the Counter-Terrorism Committee (some $11.14 million); and the effect of several Assembly resolutions concerning follow-up to the World Conference on Racism ($670,700).  Additional requirements related to variations in budgetary assumptions, including changes in exchange rates ($33.76 million), adjustments to standard salary costs ($4.41 million); vacancies ($20.41 million) and the recommendations of the International Civil Service Commission (ICSC) on net remuneration (26.68 million) amount to some $113.3 million.

In a related report (document A/57/7/Add.16), the Advisory Committee points out that the actual amounts that would be required during the current biennium in respect of matters of which the Council is seized will be known only after the Assembly makes a decision on the matter.  As for the activities of the Counter-Terrorism Committee, the ACABQ observes that resource requirements for that body for 2003 are projected at $5.66 million, compared with $5.48 million for 2002 --

a growth of $182,400.  The ACABQ is of the view that the performance report should have provided sufficient justification for the assumption that the activities of the Counter-Terrorism Committee would continue in 2003 at a level comparable to the current year.  In fact, the estimated requirements may need to be revised, as appropriate, in light of the Security Council’s review of the structure and activities of the Counter-Terrorism Committee, which is to take place no later than 4 April 2003. 

Regarding additional requirements of $20.41 million related to lower than budgeted vacancy rates, the Advisory Committee notes that in a number of sections, the vacancies are quite high.  In the future, a brief explanation should be provided in that respect.  Turning to the revised requirements under income sections of the budget, the ACABQ states that in view of the continuing decline in income from the sale of stamps, it is necessary to fundamentally rethink the way this activity is run, exploring the possibility of outsourcing this activity to an enterprise specializing in the production and marketing of philatelic material. 

The Advisory Committee recommends that the Assembly approve the revised estimates contained in the Secretary-General’s report, subject to such adjustments as may be necessary as a result of its consideration of the estimates on matters of which the Security Council is seized, the report of the ICSC and the consolidated statement of revised estimates and programme budget implications.

The Secretary-General’s report on the construction of additional office space for the Economic Commission for Latin America and the Caribbean (ECLAC) at the United Nations compound in Santiago (document A/57/467) proposes to add three new modules to the existing building, which would provide an additional space capacity of 733 square metres.  The $736,900 project could be funded from the available unutilized balance of the construction-in-progress account.

In a related report (document A/57/7/Add.8), the Advisory Committee notes that the balance of the construction-in-progress account amounted to some $8.75 million as of 30 June 2002.  As an amount of some $7.71 million has been approved for the construction of office facilities in Addis Ababa, the unutilized balance in the construction-in-progress amounts to $1.04 million.  Since the ECLAC project is relatively small and well-defined, it would only require broad oversight by the Office of Central Support Services to ensure observance of United Nations construction standards and procedures.  The ACABQ recommends that the Assembly authorize the construction of three new modules as an extension to the existing building of the Santiago complex.  In that connection, the Advisory Committee recommends authorizing the funding of the total estimated cost of $736,900 from the available balance of the construction-in-progress account.

Also before the Committee was a draft resolution on the capital master plan (A/C.5/57/L.29), by whose terms the Assembly would take note with concern of the hazards, risks and deficiencies of the current condition of the United Nations Headquarters complex, and endorse the Secretary-General’s proposal to complete the negotiations with the City of New York for the construction and lease purchase of a new United Nations building on a section of the Robert Moses Playground.  It would also approve the implementation of the baseline scope as amended by the exclusion of the proposed new large conference room and multi-function hall in the parking garage and request the Secretary-General to submit at the fifty-eighth session plans for three additional conference rooms, including viable solutions for allowing natural light into the rooms.

Welcoming with appreciation the offer of support from the City and State of New York, the Assembly would decide to implement the capital master plan, with a projected construction budget of $1.05 billion, with a variance of plus or minus 10 per cent assuming a construction start date of October 2004, with the project’s duration of five years.  The cost of construction could thus range from $944.1 million to $1.16 billion.  Should the Assembly approve certain security and contingency design options at its fifty-eighth session, the projected budget should be increased by up to $144 million.

The draft determines management and oversight procedures for the project, in particular requesting the Secretary-General to put in place strict control standards for al phases of the plan, define the precise refurbishment to be done and the technical results to be achieved.  The Assembly would also concur with the Secretary-General’s intention to establish an independent and impartial advisory board for the implementation of the plan.  Also addressed by the text are such issues as procurement and parking at the United Nations.

To ensure proper funding for the plan, the Fifth Committee recommends establishing a special account for the capital master plan and appropriating $25.5 million for the current biennium.  For 2004-2005, it is recommended that the Secretary-General enter into commitments of up to $26 million.  The text also reaffirms the importance of continuing efforts to secure financial resources from the public and private sectors for upgrading facilities and equipment, including the participation of private companies in infrastructural improvements.

Introduction of Reports

Assistant Secretary-General Jean-Pierre Halbwachs, United Nations Controller, introduced the report of the Secretary-General on estimates in respect of matters of which the Security Council is seized (document A/C.5/57/23).

CONRAD S. M. MSELLE, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) introduced the related report of the Advisory Committee (A/57/7/Add.17).

THURE CRISTIANSEN (Denmark), speaking on behalf of the European Union and associated States, said that the European Union attached great importance to the special political missions of the United Nations.  He expressed concern that total expenditures were expected to exceed $200 million dollars.  However, the European Union would support the request for additional requirements, in line with the adjustments proposed by the ACABQ.

The Union, he said, had taken note of the Secretary-General’s proposal to consider alternatives to current methods of financing, but was of the view that financing should remain part of the regular budget.  The European Union agreed, however, that there was a need for improvement in the manner in which those budgetary requirements were presented to the Committee.  Furthermore, mandates should be closely scrutinized to ensure that they were not overlapping, and where possible they should include a clear exit strategy.

RADHIA ACHOURI (Tunisia) said her delegation too attached great importance to the issue of special political missions, for that instrument was closely related to the Organization’s responsibility for keeping international peace and security.  However, the colossal amounts of money needed to finance those missions were growing from one year to the next.  All but one of the special political missions had been mandated by the Council.  The Assembly had no authority to question mandates established by the Council, which had lead responsibility for international peace and security.  Thus, those missions should be financed through a quota system established for peacekeeping operations.  That was logical and consistent with the existing arrangements.  An account and a schedule for peacekeeping operations were in place, and it was important to hold a serious discussion on that matter.  Everybody was aware that the regular budget of the Organization could no longer absorb those substantial expenses.

Introduction of Further Reports

WARREN SACH, Director of the Programme Planning and Budget Division, then introduced statements on the programme budget implications (PBI) of draft resolutions A/C.3/57/L.16/Rev.1 and A/C.3/57/L.7.

Mr. MSELLE introduced a related ACABQ report.

Comments on PBIs

PATRICK F. KENNEDY (United States) said his delegation had been opposed to regular budget financing of INSTRAW in the Third Committee, because the Institute’s statute clearly stated that it was to be funded through voluntary contributions and not through the regular budget.  Last year, regular budget funds had been provided to the Institute on an exceptional basis.  His delegation had reluctantly agreed to that on a clear understanding that no regular budget contributions would be sought in the future.  Now, a year later, however, the Institute was again seeking regular budget financing.  Member States should carefully consider whether the activities of the Institute constituted a priority that should be funded through the regular budget.

            JUN YAMAZAKI (Japan) said that his Government had joined other Member States in providing the one-time only subvention in order to give INSTRAW a chance to revitalize itself.  Despite such support, there were still serious flaws in INSTRAW’s management.  The statute of INSTRAW stipulated that the organization should be funded though voluntary contributions, yet those contributions had not been adequately managed.  Based on those facts, his delegation could not support the additional requirements for the biennium 2002-2003 proposed for INSTRAW.

Further Introductions

Mr. HALBWACHS, United Nations Controller, introduced the first performance report on the programme for the biennium 2002-2003 (document A/57/616).

CONRAD S. M. MSELLE introduced the related report of the ACABQ (document A/57/7/Add.16)

FELICITY BUCHANAN (New Zealand), speaking also on behalf of Canada and Australia, said the performance report gave the Committee the first opportunity to formally review the resource requirements of the Organization for 2002-2003.  This year, the situation was anything but routine.  Everybody was familiar with the additional demands facing the Organization from new mandates and unforeseen and extraordinary expenditures.  Those demands had coincided with major variations in costing.  The combination of those factors meant that Member States faced significant increases.  As financial and programmatic performance were clearly linked, being part of the broader results-based system, resource decisions must be based on the results expected by Member States, as well as an assessment of their value for money.

The projected expenditure table in paragraph 5 of the report should have included all expenditures, she said, for it was confusing to see included in it some items yet to be approved, while others had been left out.  The actual revised total, assuming all elements were approved, was therefore some $2.93 billion.  With regard to additional requirements, she suggested that the net increase should use as a baseline the $2.63 billion level agreed to last December. 

The exchange rate fluctuations, while significant, were unavoidable, and she accepted the projected changes in part C of the report.  She also accepted the justification for inflationary adjustments for non-post objects of expenditure under section D of the report.  She accepted the $9.9 million increase for realized 2002 vacancy rates, but suggested that projections for 2003 should be dealt with in the second performance report. 

Regarding the PBIs introduced this afternoon, she said the countries for which she spoke were very supportive of the request for a Permanent Secretariat for Indigenous Issues.  Thanking the Secretariat for the estimates in respect of matters of which the Security Council was seized, she added that her group would wait until they had seen the ACABQ report before finalizing their view on those resource requirements.  Given recent expansion of activities, it would be interested in information on how the oversight function was discharged. 

The time had come to change the way in which resource requirements for those activities were presented to the Assembly, she said.  The Organization was now operating in a results-based framework, and that should be extended to all United Nations activities, including special political missions and peace-building work.  While predicting success or progress was in many cases difficult when dealing with peace-building and political activities, she hoped that in the future all mission budget proposals could as a minimum provide an indication of the major milestones that directed their work and against which progress could be measured.  She therefore proposed that all activities relating to the use of good offices, preventive diplomacy and peace-building be henceforth presented in a single document, country by country. 

Mr. CRISTIANSEN (Denmark), speaking on behalf of the European Union and associated States, said the Union welcomed the intention of the ACABQ to consider appropriate changes to the performance report in light of the development of results-based budgeting.  The European Union had also noted with concern a sharp increase in the budget for this biennium, but acknowledged that most of those increases were largely outside the Secretariat’s control.  For example, budgetary add-ons, such as improved security, could not have been foreseen.  In that regard, the 2002-2003 budget was exceptional and should not be seen as a precedent.  The European Union endorsed the recommendations of the Secretary-General as contained in the first performance report, and had noted the projections regarding the vacancy rate.  It agreed with the ACABQ that better explanations for those high vacancies would be needed in the future.

Also commenting on the first performance report, SHINICHI YAMANAKA (Japan) said that in relation to the conference and support servicing of the Counter-Terrorism Committee, the document referred to “the Secretariat temporarily redeploying second-year resources to the first year of the biennium” so as to minimize any adverse effect on other conference services programmed for 2002.  It was difficult to understand the relations between the requirement for servicing the Committee and the existing capacity of conference and support services for 2002.  Delegations had had no night or weekend meetings since February this year. The second part of the forty-second session of the Committee for Programme and Coordination had been cancelled.  Many parliamentary documents had been delayed, although many of them had been submitted by author departments much earlier.  Thus the question was whether some of the existing capacity of conference and support services could be utilized for conference services to the Counter-Terrorism Committee.

Paragraph 16 of the Secretary-General’s report noted that the Security Council intended to review the structure and activities of the Committee no later than 4 April 2003, he continued.  At this juncture, his delegation wondered whether it should go along with the assumption that the activities of the Committee would continue for the period from April to December 2003 at a level comparable to that estimated for the first three months of 2003. 

He went on to say that a balance of $2.2 million remained in the contingency fund at the end of last year.  Paragraph 6 of the report referred, however, to an amount of $1.5 million.  His delegation understood that the difference between those amounts was utilized for comprehensive implementation of follow-up to the World Conference against Racism, Racial Discrimination, Xenophobia and Related Intolerance.  Since paragraph 20 did not mention the contingency fund, his delegation would like to get confirmation of that understanding from the Secretariat.

Paragraph 45 referred to the General Assembly’s decision to reduce the resources proposed by the Secretary-General for allocation for specific operational requirements for 2002-2003.  He commended the efforts of the Secretariat to implement that decision, and noted that in accordance with Annex II to the report, even further decreases for allocation were anticipated in many sections.  That fact seemed to justify the decision the Assembly had made last year. 

Regarding expenditures for public information activities for the Second World Assembly on Ageing, he said the ACABQ did not concur with the procedure outlined in the last sentence of paragraph 25 of the performance report, indicating that the matter would be revisited in the context of the second performance report.  His delegation endorsed the conclusion of the Advisory Committee in that regard.  As for Annex II, he noted that estimated additional requirements for protection of and assistance to refugees included about $3 million under “other” requirements.  That increase should be clearly justified. 

THOMAS A. REPASCH (United States) said that much as he was concerned about a sharp increase in expenditures, he was also concerned about a sharp decrease in income of the United Nations.  As far as the activities of the postal administration were concerned, for example, the Organization seemed to be bleeding money.  He agreed with the ACABQ that in view of the continuing decline in income from the sale of stamps, it was necessary to fundamentally rethink the way that activity was run.

The Committee then decided to propose that the Secretariat prepare a draft decision for the consideration of the Committee, recommending that the General Assembly take note of the report of the Secretary-General on the construction of additional office facilities at the Economic Commission for Latin America and the Caribbean in Santiago (A/57/467), and that it concur with the recommendation of the ACABQ in paragraph 7 of its report (A/57/7/Add.8).

Introduction

MICHEL TILEMANS (Belgium) introduced draft resolution ACABQ/C.5/57/L.29 on the Capital Master Plan.

Action

The representatives of Venezuela, Cuba and Syria said that all items on the agenda regarding financial implications should be adopted at a single, formal meeting, and that the Committee should not be establishing any type of preferential treatment for one draft resolution over another.

The Committee decided to postpone action on the draft resolution to a later date.      

Organization of Work

At the end of the meeting, the representative of Venezuela (on behalf of the Group of 77 developing nations and China) expressed doubt that the Committee would be able to conclude its work on 6 December, saying that many items needed to be further considered.  He did not object to concluding the work at the end of the week, but insisted that all items needed to be treated in an equitable manner.

The representative of Denmark (on behalf of the European Union) endorsed the Bureau’s proposal to take up several issues in informal consultations tomorrow morning, followed by a formal meeting in the afternoon to conclude the work of the Committee in an expeditious fashion.

Tunisia’s representative said she did not think it was viable to aim at concluding the Committee’s work by Friday.  It was important to decide which issues must be addressed immediately and act accordingly.  One of the options was to change the way the Committee acted on the drafts, presenting them for action on 6 December.  It would be most prudent to extend the work of the Committee by one week, however.

The United States representative said that throughout the session, there had been an understanding that the Fifth Committee would conclude its work by 6 December.  It was important to set priorities, deferring decision on those items which did not require immediate action to the resumed session.

Cuba’s representative endorsed the position of the Group of 77 and drew attention to the need to take responsible decisions on all agenda items.  In order to be disciplined, it was necessary to be responsible and consistent in decision-making.

The Chairman of the Committee, MURARI RAJ SHARMA (Nepal), expressed hope that the spirit of cooperation would sail the Committee through its difficult task.  Tremendous progress had been made in the past weeks, but the Committee had very limited time remaining.   The Bureau had been discussing the priorities before the Committee, and he hoped that it would be possible to make an informed decision acceptable to all delegations.  The Bureau would be guided by the will of Member States in taking a decision on whether or not to extend the session.

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