COUNCIL TAKES UP SEABED AUTHORITY’S BUDGET AND ASSESSMENTS

COUNCIL TAKES UP SEABED AUTHORITY’S BUDGET AND ASSESSMENTS

(Reissued as received.)

      KINGSTON, 12 August (International Seabed Authority) --The Council of the International Seabed Authority, meeting this afternoon in Kingston, began discussing the budget and scale of assessments of the Authority for 2003-04.

No objections were voiced to the biennial budget total of $10,509,700 as proposed by the Secretary-General (ISBA/8/A/6-ISBA/8/C/2) and recommended by the Finance Committee (ISBA/8/A/7-ISBA/8/C/3).  Rather, discussion centred on two issues:  whether to lower the maximum contribution rate from 25 to 22 per cent, as recommended by the Committee, and how the travel expenses of members of the Legal and Technical Commission from developing countries should be met.

The Council will continue discussing these matters at 10 a.m. tomorrow, 13 August, after which it will receive the report of the Legal and Technical Commission on its recent session.

Also this afternoon, the Council completed its roster of officers by electing Gabon as a Vice-President for 2002.  The other vice-presidents, elected this morning, are Germany, India and Poland.  All were elected without objection on the nomination of their respective regional groups, as was Council President Fernando Pardo Huerta (Chile) on 7 August.

Assessment Rates

      The Finance Committee has recommended that the Assembly authorize a scale of budget assessments to be paid by the 138 members of the Authority based on the scale used for the United Nations budget for 2002 and 2003, “taking into account that the maximum assessment rate for the budget of the Authority for 2003 and 2004 will be 22 per cent”.  (This would be in line with the decision of the United Nations General Assembly, taken in 2000, to lower that organization’s ceiling rate from 25 to 22 per cent.)

(The United Nations decision effectively lowered the rate of its largest contributor, the United States.  Applied to the Seabed Authority, the decision would reduce the rate of Japan, its largest contributor, since the United States is not a member of the Authority.)

Today, Argentina, arguing that the United Nations decision had been taken owing to circumstances in that organization, said it was the view of the Group of Latin American and Caribbean Countries that no decision be taken by the Authority that would raise the rates assigned to members of that group.

Japan, opening the discussion on this issue, observed that the surplus of $1,695,000 recorded from previous years would be applied to reduce the amounts of members’ assessments for 2003-04.  Nevertheless, Japan took issue with its level of contribution for 2002, which should be reduced from 25 to 22 per cent, based on the United Nations scale for 2002 and 2003.  Japan had not objected last year to that rate, but it could see no rationale now for adding 3 per cent to its assessment.  Moreover, mitigating circumstances affecting individual rates were a matter for the United Nations Committee on Contributions, not for the Authority.

Argentina said it was implied in General Assembly resolution 55/5 C of 23 December 2000 that the Authority could set its own scale. (The Assembly stated in this resolution that its reduction of the maximum assessment rate for the United Nations “shall have no automatic implication for the apportionment of the expenses of the specialized agencies”.) Argentina added that the Authority should take account of a recent recommendation by the United Nations Committee on Contributions not to increase Argentina’s assessment for 2003 in light of that country’s financial difficulties.

Travel Expenses of Members

      Today’s Council discussion on ways to cover the travel expenses of members of the Legal and Technical Commission from developing countries centred on a paragraph in the Finance Committee’s report stating that the establishment of a voluntary trust fund to cover such expenses, as well as those of the Committee’s own members from developing countries, “would be kept under review in the light of further information to be provided by the Secretary-General”.

A recent report by the Secretary-General on the modalities for financing participation in the Commission’s meetings (ISBA/8/C/4) cited two options used by other intergovernmental bodies:  trust funds and budget allocations.  It mentioned two bodies related to the law of the sea for which the United Nations General Assembly had established trust funds to help developing country representatives participate:  the Commission on the Limits of the Continental Shelf and the Open-ended Informal Process on developments in ocean affairs.  It put the cost of travel and subsistence allowances for the 17 members from developing countries during a one-week session of the 24-member Legal and Technical Commission at $117,900.

This issue was first raised today by Chile, which expressed disappointment that, three years after being raised in the Council, the matter was still being reviewed pending further information to be provided by the Secretary-General.  The Chairman of the Finance Committee, Domenico da Empoli (Italy), explained that Committee members had differing opinions on the reliability of trust funds and had therefore requested more information from the Secretary-General before taking a decision.

Chile argued, however, that, having set up the Commission, the Authority was duty bound to ensure that funds were in place so that it could function, notably when it had to deal with environmental emergencies.  If a trust fund was not the best solution, other ways should be found to secure proper financing, such as a line in the Authority’s budget. Chile’s views were endorsed by Fiji, which also voiced disappointment that the matter of a trust fund had not been dealt with more expeditiously.

Argentina believed that, as much of the Authority’s work in the immediate future would fall under the Commission’s portfolio, solutions would have to be found, preferably while the Authority was recording a budget surplus.

Japan opposed the idea of establishing a trust fund on the ground that States would not want to contribute; Japan would not be in a position to make a contribution, and it would be irresponsible to establish a fund that might never be implemented.  Moreover, if Commission members were funded by governments or contractors, this might raise issues of conflict of interest.  (Members of the Legal and Technical Commission are elected in their own capacity as experts rather than as government representatives and are required to fulfil their duties with complete objectivity.) 

Cameroon and the Russian Federation cited precedents in which the costs for experts were borne by States.  The Russian Federation also observed that voluntary trust funds had been successful in other cases, so that there was no reason to dismiss this option as a possible solution.

On another matter, South Africa questioned the Finance Committee’s recommendation to reappoint KPMG Peat Marwick to audit the Authority’s accounts for 2002, given reservations expressed in the Committee’s report.  The Committee Chairman explained that the issue of concern was a matter of form rather than substance and that in the interest of continuity it was best to keep the firm to complete the audit of expenditures under the budget for 2001-02.

* *** *