UN’S FUTURE EFFECTIVENESS DEPENDENT ON CREDIBLE SYSTEM TO EVALUATE PERFORMANCE, IMPROVED CONDITIONS OF SERVICE, BUDGET COMMITTEE TOLD

Fifty-eighth General Assembly

Fifth Committee

16^th Meeting (AM)

UN’S FUTURE EFFECTIVENESS DEPENDENT ON CREDIBLE SYSTEM TO EVALUATE PERFORMANCE,

IMPROVED CONDITIONS OF SERVICE, BUDGET COMMITTEE TOLD

In order to maintain the Organization’s efficiency and effectiveness and make the United Nations a model for study and emulation, it was necessary to establish a credible system to evaluate performance and improve the conditions of service of international personnel, Nigeria’s representative told the Fifth Committee (Administrative and Budgetary) this morning, as it concluded its consideration of the United Nations common system.

Addressing the Committee, representatives of Japan and Nigeria stressed the importance of the ongoing review of pay and benefits within the United Nations system and proposed ways of improving the remuneration of staff.  Nigeria’s delegation expressed concern that the proposed broadbanding/performance pay system did not seem to have mechanisms to clearly describe the advertised job to an interested applicant.  For example, in the broadband system to be tested, a P-3, P-4 or P-5 vacancy would be announced only as a Band 2 vacancy.  How would that help applicants?  How would the Organization be better placed to attract the best candidates for that particular post?  Additionally, lateral job changes would be made without the need to reclassify jobs, and there would be fewer vertical job changes.

Japan’s representative supported, in general, the introduction of a broadbanding system and pay-for-performance, but pointed out that a fair and reliable performance appraisal system was indispensable for introducing changes in that regard.  The pilot study should be carried out in a cost-neutral way.  It was also necessary to review the system of comparing remuneration of the United Nations and United States federal employees, especially the grade equivalency and level of margin.

Responding to comments and questions from the floor, Chairman of the International Civil Service Commission (ICSC), Mohsen Bel Hadj Amor, said that under article 11 of its Statute, the Commission had the authority to establish the level of hazard pay.  Having given careful consideration to the matter following the Assembly’s request to reconsider its decision, however, the Commission had upheld, by consensus, its opinion on the need to increase the level of hazard pay for locally recruited staff to 30 per cent of the midpoint of the salary scale.  In particular, it was necessary to address the discrepancy in the hazard pay of the General Service and Professional categories of staff.  At present, the amounts received by General Services and related staff were significantly less than the $1,000 per month received by the Professional and higher categories for the same level of hazard.

In response to Monday’s comments by the President of the Federation of International Civil Servants’ Associations (see Press Release GA/AB/3587 of 3 November), he recalled that the Commission, in its 2002 annual report, had recommended a differentiated salary increase that would take the margin to its desirable midpoint of 115.  However, the Assembly, after careful consideration, had decided to adopt a scale resulting in an estimated margin of 112.2 for 2003.  Contrary to what the President of the Federation had stated, regular adjustments of the base/floor salary scale had never been intended as a means to grant salary increases to Professional staff.  Those adjustments were introduced only to track the movement of salaries in the comparator civil service.

[Under the current methodology, the salary scale is set by reference to that of the comparator civil service in Washington, D.C.  In accordance with the accepted practice, the desirable midpoint of United Nations officials (P-4, step VI, at the dependency rate) has been set at 115 per cent of corresponding salaries of their counterparts in the United States federal civil service.]

The Committee also concluded its consideration of a report on the salary and retirement allowance of the Secretary-General and the Administration of the United Nations Development Programme (UNDP) and took up the financing of International Trade Centre UNCTAD/WTO and admission of the International Criminal Court to membership in the United Nations Pension Fund.

Documents were introduced by Director of the Office of Programme Planning and Budget Division, Warren Sach; Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Conrad S.M. Mselle; and Deputy Chief Executive Office of the United Nations Joint Staff Pension Fund, John Dietz.

The Committee will hold elections to fill vacancies in subsidiary organs at 9:30 a.m. Friday, 7 November.

Background

This morning, the Fifth Committee (Administrative and Budgetary) was expected to continue its consideration of the United Nations common system (see Press Releases GA/AB/3587 and GA/AB/3588 of 3 and 4 November) and the Advisory Committee on Administrative and Budgetary Questions (ACABQ) report on salary and retirement allowance of the Secretary-General and Administrator of the United Nations Development Programme (UNDP), which was introduced yesterday.  It was also supposed to take up section 13 of the proposed programme budget for the biennium 2004-2005:  International Trade Centre/UNCTAD/WTO; and consider admission of the International Criminal Court to membership in the United Nations Joint Staff Pension Fund.

The Committee had before it several reports related to the proposed budget for the next biennium of the International Trade Centre/UNCTAD/WTO (documents A/58/6(Sect.13)/Add.1) -- a joint technical cooperation agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO), which serves as the focal point for all United Nations technical cooperation activities in trade promotion.  The United Nations and the WTO equally share the funding of the International Trade Centre regular budget.  Revised budgetary arrangements with regard to the Centre, which were endorsed by the Assembly in its decision 53/411, are currently being reviewed.

According to the documents, as a reflection of widening recognition of the contribution of trade-related technical assistance to development, the demand for the Centre’s services on the part of beneficiaries has increased substantially in recent years.  In 2001 and 2002, thanks to the generous response of the donor community, the delivery of technical assistance by the International Trade Centre increased by 20 per cent each year.  The Centre is working to maintain that level of growth in 2003 and 2004.

The reports present an estimate of some SwF 65.09 million for the proposed programme budget of the Centre for 2004-2005, which represents an increase of 5.5 per cent (rounded) in real terms.  The United Nations share of the estimate amounts to some SwF 32.31 million, before recosting.  The increase relates mainly to the creation of six Professional and five General Service posts, as well as reclassification of three posts (two reclassifications from P-4 to P-5 and one reclassification from P-2 to P-3).  All of the proposed new posts and reclassifications relate solely to the substantive activities of the Centre and will be used to strengthen the capacity of the Centre to respond to areas where demand for technical assistance is most pronounced.

The Advisory Committee for Administrative and Budgetary Questions (ACABQ), in a related report (document A/58/7/Add.7), notes that the updated amount contained in the budget proposal represents an increase in real terms of 5.5 per cent, instead of the 5.4 per cent indicated in the budget outline, because of the more precise data available at the time of the preparation of the current submission.

The Advisory Committee further notes that income has been adjusted from SwF 695,000 to SwF 471,000 for 2004-2005, due to a reduction in rental income resulting from the need to accommodate the Centre’s expanding programme of work and increased in-house office space requirements.  The biennial contribution of each organization is SwF 32,431,700.  On the basis of the current exchange rate, the provision requested for the United Nations contribution would amount to some $20.59 million, which is $346,400 less than the figure provided in the budget outline.  Compared with the current biennium, extrabudgetary resources for 2004-2005 are estimated at SwF 72,566,600, an increase of 21 per cent.

Providing its recommendations on the staff requirements of the Centre, the Advisory Committee recommends approval of the reclassification of the three posts, from P-4 to P-5 for the Chief of Trade in Services Section (Division of Product and Market Development), from P-4 to P-5 for the Chief of Office for Interregional Programmes (Division of Technical Cooperation Coordination), and from P-2 to P-3 in the Business Advisory Section of the Division of Trade Support Services.  However, it also recommends against several proposed posts.  For instance, in view of the high ratio of General Service to Professional staff in the Centre (currently 1:1), the ACABQ recommends against acceptance of several General Service posts.

As a result of a reduction of over SwF 1 million recommended by the ACABQ for staff, the post requirements for International Trade Centre would amount to SwF 48,796,200 at 2004-2005 rates.  Further according to the report, non-post resources for the Centre should be reduced to SwF 15,472,200 at 2004-2005 rates (a reduction of SwF 26,000).

The Advisory Committee recommends that the General Assembly approve an amount of SwF 64,268,400 under section 13 of the proposed programme budget for the biennium 2004-2005 for the International Trade Centre UNCTAD/WTO.

The Committee also had before it a note by the Secretary-General on Admission of the International Criminal Court to membership in the United Nations Pension Fund (A/C.5/58/13), according to which the Standing Committee of the United Nations Joint Staff Pension fund Board has, by consensus, decided to recommend approval of the Court’s application, effective from 1 January 2004.

In a related report, the ACABQ (document A/58/545) notes that, according to the Chief Executive Officer of the Pension Fund, the conditions of service for staff of the International Criminal Court have been aligned with those prevailing in the United Nations common system and thus conformed with the “common system of salaries, allowances and other conditions of service of the United Nations and the specialized agencies”.

Accordingly, the Advisory Committee recommends that the General Assembly approve the application of the International Criminal Court for membership in the Pension Fund.

Statements

AKIRA YAMAMOTO (Japan) said that his delegation had always extended its full support to the common system, which allowed each participating organization to avoid otherwise burdensome administrative arrangements and ensured equal and consistent conditions of service throughout the system, thus eliminating unnecessary competition.  He also recognized the role and function of the International Civil Service Commission (ICSC) as an independent technical and professional body serving the system.  He hoped the Commission would continue to play a key role in the area of human resources management reform.

He welcomed the ongoing review of the pay and benefits system and pointed out the need to pay proper attention to changing the top-heavy structure of participating organizations.  While the top-heaviness of the Secretariat had already been pointed out, other organizations were suffering from similar, sometimes much worse, problems.  The review of job evaluation should present a good chance to address that problem.

His delegation could support, in general, the introduction of a broadbanding system and pay-for-performance, he continued.  A fair and reliable performance appraisal system was indispensable for introducing changes in that regard.  And it should be clearly pointed out that the pilot study must be carried out in a cost-neutral way.  It was also necessary to review the system of comparing remuneration of the United Nations and United States federal employees, especially the grade equivalency and level of margin.  The Commission should present a detailed report on the grade equivalency between the United Nations staff and United States federal employees.

Enhancing mobility was a part of the human resources management reform, he said.  The Commission had a key role in promoting mobility throughout the common system, and he hoped that it would submit proposals to promote mobility as early as possible.  As for the hazard pay for locally recruited staff, 20 per cent of the midpoint of the salary scale was already higher than what was being applied to international staff, and it did not seem rational to raise the level to 30 per cent.

NONYE UDO (Nigeria) said that in order to maintain the Organization’s efficiency and effectiveness and make the United Nations a model for study and emulation, it was necessary to establish a credible system to evaluate performance and improve the conditions of service of international personnel.  Also, she remained concerned that the broadbanding/performance pay system did not seem to have mechanisms to clearly describe the advertised job to an interested applicant.  For example, in the broadband system to be tested, a P-3, P-4 or P-5 vacancy would be announced only as a Band 2 vacancy.  How would this help applicants? How would the Organization be better placed to attract the best candidates for that particular post?  Additionally, lateral job changes would be made without the need to reclassify jobs, and vertical job changes would be fewer, leading to more administrative responsibility being given to managers, who would require a significant increase in management development.

On the issue of hazard pay of locally recruited staff, Nigeria noted and agreed with the call by some delegations to exercise caution in the matter.  Nonetheless, she believed that the present day realities gave credence to the Commission’s position that the Organization should show strong support to those who put their lives on the line and held up the United Nations banner in the face of real danger.  Increasing the hazard pay of locally recruited staff would send them a message of support and solidarity.

Chairman of the ICSC, MOHSEN BEL HADJ AMOR, said that he was pleased to note from the representatives’ comments the support for the review of the pay and benefits system.  The Commission was moving forward in a very cautions and deliberate manner, and the approaches described in its report would be tested and evaluated through a pilot study.  The ICSC had designed the operational pay-for-performance system, in combination with the three models chosen for pilot testing, to be cost neutral.  However, after successful completion of pilot testing, if there were a need for additional resources, the Assembly and other legislative bodies would have to make a decision on their appropriation.  As for the project manager to oversee the pilot project, the Commission had looked into the possibilities of redeploying funds to finance that post.  As it was very difficult under United Nations rules, extrabudgetary funds would be needed to finance that post, which was seen as critical for the success of the project.

Some delegations had expressed the view that all of the recommended models should be tested, he continued.  In that connection, the Commission was encouraging organizations to volunteer.  Of the three models selected by the ICSC, volunteer organizations could choose the one best suited to their needs.  As for the question on how to reflect different levels of responsibility within the broadbands, he noted that current distinctions reflected by the grades P-1 through D-2 would continue to apply during the test.  After conclusion of the pilot study, the Commission would determine the ultimate alignment of the grading and salary structures in a single broadbanded model.

Turning to the proposed creation of a Senior Management Service, he emphasized that it was seen by the Commission as an inter-organizational component of the common system, for which it accordingly would be responsible.  However, the Commission did not believe the examination of the Service needed to be undertaken in the context of the pay and benefits review.

Regarding hazard pay, he said that under article 11 of its Statute, the Commission had the authority to establish the level of that allowance.  However, the ICSC had noted the Assembly’s request to reconsider its decision.  After careful consideration, the Commission upheld, by consensus, the decision to increase the level of hazard pay for locally recruited staff to 30 per cent of the midpoint of the salary scale.  The absolute amounts of hazard pay received by the General Service and related categories were significantly less than the $1,000 per month received by the Professional and higher categories for the same level of hazard.  Believing that the difference needed to be addressed, the Commission had decided to adjust the formula for the calculation of the amount of hazard pay for the General Services and related categories.  Currently, hazard pay was applicable only in 25 countries or areas.

He went on to say that, having considered the General Service salary methodology, the Commission was overwhelmingly of the view that the current categorization based on public versus private employers had served it purpose well.  The matter of sectoral representation of the surveyed employers would again receive the Commission’s appropriate attention at the time of the next review, however.

Responding to the comments by the President of the Federation of International Civil Servants’ Association, he recalled that the Commission in its 2002 annual report had recommended a differentiated increase that would take the margin to its desirable midpoint of 115.  However, the Assembly, after careful consideration, had decided to adopt a salary scale resulting in an estimated margin of 112.2 for 2003.  Contrary to what the President of Federation had stated, regular adjustments of the base/floor salary scale had never been intended to grant salary increases to Professional staff.  Those adjustments were only intended to track the movement of salaries in the comparator civil service.

Therefore, at the time of the establishment of the base/floor salary scale in 1989, it had also been decided that base salary levels would be adjusted each time the comparator’s equivalent net salary levels moved.  That would be achieved by consolidation of a part of post adjustment into base salaries on a no-loss/no-gain basis.

Regarding the exclusion of locality pay, he emphasized that there was no change in procedure, but the Commission was merely reverting to the initially established procedure for adjusting the scale.  Furthermore, the locality pay to civil servants in Washington, D.C was taken into account in the margin calculations when the Commission carried out comparisons of the net remuneration of the United Nations staff in New York with that of the United States federal civil service employees in comparable positions.

In closing, he reiterated his appreciation to the delegations for their strong support for the cohesion of the common system and the work of the Commission.  The Commission would be guided in its deliberations by the views and comments made in the debate.

Introductions

WARREN SACH, Director of the Office of Programme Planning and Budget Division, introduced the report of the Secretary-General on the International Trade Centre UNCTAD/WTO contained in document A/58/6(Sect.13)/Add 1.

CONARD S.M. MSELLE, Chairman of the Advisory Committee on Administrative and Budgetary Questions introduced the related report of the Advisory Committee contained in document A/58/7/Add.7.

JOHN DIETZ, Deputy Chief Executive Officer of the United Nations Joint Staff Pension Fund, introduced the note by the Secretary-General on the admission of the International Criminal Court to membership in the United Nations Joint Staff Pension Fund contained in document A/C.5/58/13.

Mr. MSELLE introduced document A/58/545, the related report of the ACABQ.

* *** *