LAW OF SEA MEETING APPROVES DECISION ON FINANCIAL ARRANGEMENTS, PARTICIPATION OF SUBSIDIARY BODIES

Meeting of States Parties

to Law of Sea Convention

69^th Meeting (PM)

LAW OF SEA MEETING APPROVES DECISION ON FINANCIAL ARRANGEMENTS,

PARTICIPATION OF SUBSIDIARY BODIES

The twelfth Meeting of States Parties to the United Nations Convention on the Law of the Sea this afternoon approved three decisions affecting, respectively, the working methods and financial arrangements of two of the subsidiary bodies created under the Convention -- the Commission on the Limits of the Continental Shelf and the International Tribunal on the law of the Sea.

By one decision, regarding the inclusion of new paragraph 3 bis of rule 18 in the Rules of Procedure for the Meeting of States Parties (document SPLOS/L.24), the States Parties granted observer status to the Commission to participate in their work, in a manner consistent with its functions as an expert body, and the independence of its members.  The Commission reviews and makes recommendations on applications of coastal States whose continental shelf boundary extends beyond

200 nautical miles.

Two other decisions approved today concerned financial arrangements for the International Tribunal.  By a text relating to savings from previous budgets of the Tribunal (document SPOLS/L.25), the Meeting decided that the Tribunal should surrender savings from its 1998, 1999 and 2000 budgets, in compliance with United Nations Financial Regulations.  Further, a deduction of such savings should then be made from the assessed contributions of States Parties for 2003.

By a text relating to the staff assessment fund of the International Tribunal (document SPLOS/L.26), the Meeting decided that the Tribunal should continue with its current practice concerning staff assessment pending the adoption of a decision by the Meeting on the basis of a detailed proposal to be submitted by the Tribunal at the thirteenth meeting of States Parties.

Moving on to other outstanding matters on their current agenda, the States Parties discussed three issues relating to the draft budget and financial regulations of the International Tribunal – namely, establishing a currency of reference for the Tribunal, setting the scale of assessments for contributions to Tribunal’s budget, and the creation of contingency fund for the body.

Financial Terms of Reference for International Tribunal

Summing up the Meeting’s working group discussions, Meeting President Don MacKay of New Zealand said it was generally felt that both matters were closely related, and addressing the issue of currency would aid the States Parties’ efforts at setting the Tribunal’s scale of assessments.  Simply, he said, the

choice was between dollars or euros.  Right now, the Tribunal’s currency was equally divided between dollars and euros, but about 70 per cent of the Tribunal’s overall payments were in euros.

When the floor opened for discussion on the matter, the representative of Spain, on behalf of the European Union, proposed that the euro be adopted as the Tribunal’s currency of reference, but that provision be made so that payments could be made in either euros or dollars.  The representatives of the United States, Belgium, Greece, Malta, Germany and Japan all agreed, noting that since the Tribunal sat in Hamburg, Germany, it was logical to assume that most of that body’s financial transaction and contributions would be in euros.

The representative of Nigeria, however, urged caution before setting blanket policy on reference currency for international organization.  Certain national currencies were not convertible to the euro.  A guiding factor for the meeting was that the Tribunal itself had indicated that it kept its currency equally divided between euros and dollars.  There was no reason for the Meeting to specify the euro as the currency of reference.

Mr. MacKay proposed the following provisional language be added to the Tribunal’s Financial Regulations (document SPLOS/WP.17):  “Annual contributions and advances to the working capital fund shall be determined in euros and paid in either United States dollars or euros.”  The Meeting agreed with the language in principle and would take a final decision on the matter tomorrow, following further consideration.

Scale of Assessments for International Tribunal

The representative of Japan opened the discussion on the Tribunal’s scale of assessments.  He said that a ceiling was set in assessments to avoid too much dependency by an international organization on one country's contribution.  To achieve more equitable financial contributions, Japan had advocated reducing the ceiling in specialized agencies from 25 per cent to 22 per cent.

He noted that opponents to reducing the ceiling had referred to General Assembly resolution 55/5, which had decreased the ceiling for the United Nations budget from 25 per cent to 22 per cent.  The resolution stated that "the maximum assessment rate should have no automatic implication for the apportionment of the specialized agencies".  However, that sentence was solely to reaffirm the independence of specialized agencies, and would not impede a voluntary decision to reduce the ceiling at each entity.

Moreover, he continued, harsh economic conditions had caused the Japanese people to turn a critical eye on government spending, including payments to the United Nations.  It was difficult to justify paying 25 per cent to the Tribunal, as opposed to lower rates at other international organizations.

Several representatives, including those of Italy, the United States and Malta, supported Japan's proposal to reduce the ceiling, while others, including Paraguay, expressed reservations about the delegation’s interpretation of Assembly resolution 55/5.  The representative of Belgium said the resolution clearly stated that it did not set a precedent and could not be implemented in other agencies

with juridical force.  Therefore, the Tribunal must examine the proposal to reduce the ceiling on its own merits.

Some delegations, including Argentina, Nigeria and Mexico, noted that other nations shared Japan's economic difficulties.  They voiced the concern that lowering the ceiling could mean that those economically disadvantaged States could be forced to make up the difference in Tribunal contributions.

Mr. MacKay said no decision on Japan’s proposal could be taken at that stage, and deferred discussion of the issue until Friday.

Miscellaneous Tribunal Budgetary Matters

The Meeting also discussed three draft decisions, in the form of a working paper, on miscellaneous budgetary matters of the Tribunal.  The first text would authorize the Tribunal to transfer funds between appropriate sections when necessary during 2003.  Another would also approve that $500,000 in savings from 2001 be appropriated to the Tribunal's Working Capital Fund to ensure the Tribunal’s continued operation should funds temporarily fall short, and finance cases that could not be funded from the contingency.

The final text would have the Meeting further decide that the Registrar would report any action taken with respect to those budgetary decisions to the Meeting.

Based on the comments of several delegations, including Spain, Netherlands, United Kingdom, Nigeria, Senegal, Germany and Malaysia, the Chairman said the draft would be discussed informally and then taken up in plenary on Friday, the final day of the Meeting.

In other business this afternoon, the Meeting decided to retain two agenda items -- one on issues with respect to article 4, annex II of the Convention, and another on matters related to article 319 of the Convention -- for further consideration during its next session.

The States Parties to the Convention on the Law of Sea will meet again tomorrow at 10 a.m., to consider the remaining items on their agenda.

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