COUNCIL EXAMINES FINANCE COMMITTEE REPORT, INCLUDING PLAN TO CONTINUE FUND FOR DEVELOPING COUNTRY PARTICIPATION

COUNCIL EXAMINES FINANCE COMMITTEE REPORT, INCLUDING PLAN TO CONTINUE

FUND FOR DEVELOPING COUNTRY PARTICIPATION

(Reissued as received.)

KINGSTON, 4 August (ISA) -- The Council of the International Seabed Authority (ISA), meeting this afternoon in Kingston, took up a recommendation by the Finance Committee that an advance from some funds of the Authority outside its regular budget be used for one year to supplement a new voluntary fund helping defray the attendance costs of members from developing countries serving as experts on Authority bodies.

After learning that only $10,500 has been donated voluntarily to a one-year-old fund established for this purpose, the Committee recommended that the fund be supplemented from other sources, notably up to $75,000 from unspent, interest-bearing sums derived from fees that pioneer seabed investors and contract applicants have paid to the Authority.

At the request of the Russian Federation, the Council put off a decision on this issue until its next meeting, at 10 a.m. tomorrow, 5 August.

Taking note of the Committee’s report, the Council approved its other recommendations, including the appointment of the firm Deloitte and Touche as auditor of ISA accounts in 2003-04, replacing KPMG Peat Marwick.  The report also fixes assessment rates for five new ISA members.

Funds for Developing Country Participants

      The Finance Committee recommended continuation of a fund based on voluntary contributions, set up under a Council decision of last August, designed to help members from developing countries attend meetings of the two ISA expert bodies –- the Finance Committee and the Legal and Technical Commission.  It further recommended that the voluntary fund be supplemented for its first year by an advance of up to $75,000 from certain funds of the Authority outside its regular budget.  Specifically, this advance would come from “such extraordinary sources of funding as may be under the custody of the Secretary-General and accrued to the Authority”.  This authorization would be “made on an exceptional, one-time basis” and without prejudice to any future recourse to the general administrative fund that might arise when the Authority decides on “definitive sources of financing”. (The general fund covers expenditures under the regular budget, financed by the assessed contributions of member States.)  The Committee recommended that the Assembly decide next year on a “definitive source”, on the basis of recommendations to be made by itself and the Council. 

The Committee also recommended “provisional terms and conditions” for use of the fund:  the government that had nominated the member must explain, three months in advance of a session of the expert body, why it could not cover the costs of participation; consideration should be given to “the expertise of the member”, taking into account “qualifications, continuity in attendance and contributions to the meetings”; where possible, members from least developed countries should receive priority; as a general rule, covered costs should be for economy fare, while a daily subsistence allowance (DSA, for lodging and other living expenses) should be provided only exceptionally; and the Secretary-General should respond to the request at least two months before the start of the session.

Requesting a report by the Secretary-General on the interest accruing from the Authority’s various funds and resources, the Committee decided to define next year “the purpose and limit” of the special fund containing contributions by applicants for registration as pioneer seabed investors and later by applicants for plans of work (under contracts) for exploration and exploitation.  In each case, the fee was $250,000.  In the 1980s, the registration applicants paid the Preparatory Commission for the Authority and the International Tribunal for the Law of the Sea, while the contract applicants in recent years paid directly to the Authority.  All these funds have since been consolidated under the ISA Secretary-General and have been earning interest. 

The Finance Committee’s report (document ISBA/9/A/5-ISBA/9/C/5), covering its five closed meetings between 31 July and 2 August, was introduced this afternoon by its Chairman, Hasjim Djalal (Indonesia).  With regard to the voluntary fund and its proposed supplementation, the Chairman noted that donations had come from only three sources, for a total of $10,500.  The Committee’s recommendations on this matter had been adopted after extensive discussions.

One of the matters discussed, he continued, was the question of who would be supported.  Some took the position that all members should benefit, since their participation was based on personal qualifications and did not necessarily represent the views of governments.  Others felt that support should be given to all members from developing countries, while still others preferred to limit it to those members from developing countries who were in need because their governments were currently unable to defray expenses.  In the final analysis, the Chairman said, the last option had prevailed.

Another controversial issue, he noted, was the criteria for selecting the members who would receive support.  As to whether assistance should be restricted to air fares or should include the payment of daily subsistence allowances, it had been agreed that governments should meet the latter expense, apart from exceptional cases where the Secretary-General could decide otherwise.  Moreover, as the fund was limited, not all requests could be granted.

In light of the low level of voluntary contributions, the Chairman went on, it had been suggested that supplementary funds be derived from interest on assessed budgetary contributions by member States, or from any unused portion of the budget.  This had met with opposition in the Committee on the ground that such funds belonged to the member States and should be used to finance subsequent budgets.

Another suggestion had been that the funds be included in the biennial budget of the Authority.  Last year’s budget decision (document ISBA/8/A/11) had mentioned the “possibility of making provision [for this purpose] from within the administrative budget of the Authority”.  Committee members had opposed this course of action because it would increase the budget of the Authority and consequently the assessed contributions each member would be asked to pay.

In the Council’s discussion this afternoon, Chile, Côte d’Ivoire, Egypt, Fiji, Jamaica, Senegal and Sudan supported the Committee’s recommendations and called for its adoption, with some amendments.

Chile, Côte d’Ivoire and Egypt questioned some of the terms proposed for deciding which members would benefit from the fund.  Senegal, objecting to the requirement that governments explain why they could not pay, said the purpose was to allow universal participation; moreover, a “first-come-first-served” concept was not used in the United Nations system.  Côte d’ Ivoire, Egypt and Sudan argued that, as members were nominated and appointed on the basis of their qualifications, their expertise should not be brought into question.

Chile said the Council should seek to preserve the independence of members from both developing and developed countries by providing funds to ensure their attendance without the support of their governments. 

Another issue raised today was the Council’s decision in 2001 to increase the Legal and Technical Commission membership to 24, from the 15 specified by the 1982 United Nations Convention on the Law of the Sea.  Chile and the Russian Federation agreed that the increase had an impact on costs.  Russia added that the issue of financing participation should be linked to the membership of 15 provided for in the Convention.  On this point, the Finance Committee Chairman said it was beyond his Committee’s function to limit the number of Commission members.

Russia supported other delegations that questioned the rationale for basing funding on the expertise of members, with Côte d’ Ivoire suggesting that the paragraph be deleted.

Russia said while it did not object to the clause authorizing a $75,000 advance to the voluntary fund, delegations needed time to consult.

The Finance Committee Chairman said that, while he appreciated the sentiments of Council members, the text represented “a very difficult compromise”.  He urged delegates to regard the recommendation as an emergency measure to avoid the danger of having only members from developed countries attend sessions of the Legal and Technical Commission and the Finance Committee. 

Echoing this point, Jamaica added that budget appropriations might be needed in future if the universality of these bodies was to be maintained.

Other Financial Matters

      The Finance Committee dealt with these other matters:

-- It examined the audit report on ISA accounts for 2002, prepared by the firm KPMG Peat Marwick.  After reviewing bids for future auditing, it decided that Deloitte and Touche should be appointed for 2003-04, while a request should be pursued that the United Nations Board of Auditors be asked to take over the task.

-- Noting “with concern” that the Authority and the Government of Jamaica had not yet concluded an agreement supplementary to the basic headquarters agreement on the Kingston offices of the ISA, the Committee urged “serious efforts” to do so “as soon as possible, and in any event before the end of October 2003”.  It cited three outstanding issues:  the amount of office maintenance costs; sums payable for the Authority’s use of the Jamaica Conference Centre, where its meetings are held; and Jamaica’s obligations to provide adequate security and insurance.

-- The Committee deferred to next year its consideration of the pension entitlement of the Secretary-General, an item placed on the agenda last year by one of its members.

-- It expressed concern about the number of States in financial arrears for multiple years.  (The Secretary-General, in his annual report, said that, as of 31 May, 68 members still owed money, of which 49 were more than two years behind.)

-- After hearing a request by one Committee member that the ISA scale of budgetary assessments be adjusted in line with a change made in the United Nations scale (a reduction of Brazil’s rate), the Committee said there was no reason to adjust the ISA scale now, since the State in question had not made a request.

-- For the four States that have joined the Authority this year, the Committee recommended that the rates for Albania, Kiribati, Tuvalu and Armenia be fixed at the minimum rate of 0.01 per cent, while that of Qatar be set at 0.05 per cent.

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