UN FINANCIAL SITUATION, HUMAN RESOURCES MANAGEMENT REFORM FOCUS OF DEBATE IN BUDGET COMMITTEE

Fifty-ninth General Assembly

Fifth Committee

15^th & 16^th Meetings (AM & PM)

UN FINANCIAL SITUATION, HUMAN RESOURCES MANAGEMENT REFORM

FOCUS OF DEBATE IN BUDGET COMMITTEE

(Issued on 29 October 2004.)

As the Administrative and Budgetary Committee took up the financial situation of the United Nations today following last week’s presentation by the Under-Secretary-General for Management, Catherine Ann Bertini, speakers welcomed the improvement of the overall picture, but registered serious concern over such problems as the negative cash position of the two international Tribunals; an unprecedented growth of the peacekeeping budget; and the high level of Member States’ unpaid assessments, which on 15 October stood at some $3.35 billion, as compared with about $1.6 billion on the same date last year.

Numerous speakers urged all Member States to fulfil their financial obligations under the Charter by paying their assessments in full, on time and without conditions, insisting that financial stability and, consequently, the implementation of the Organization’s mandated activities depended on such payments.

While recognizing the relevance of that issue, Japan’s representative, however, put forward several other considerations, which, he said from his point of view, were even more important.  One of them was whether the rapid increase of United Nations assessed contributions had gone beyond Member States’ capacity to pay.  There were also questions of whether limited resources were truly used in the most efficient way and whether the Organization was striking an appropriate balance between assessed and voluntary contributions.

The European Union -– represented by the Netherlands -- was among those who worried about the impact on governments of the significant increase in the peacekeeping budget, which had reached $4.1 billion this year and was expected to grow further.  Many speakers also expressed concern over the continued practice of cross-borrowing from peacekeeping budget to finance regular activities of the United Nations, which the Organization had been forced to resort to in September, for example.

The representative of the Russian Federation said that, while the increase in the peacekeeping budget could negatively affect the readiness of Member States to make timely payments of their contributions, it was hard to provide an explanation for a $2.5 billion debt on behalf of Member States.  Peacekeeping was one of the most important areas of the Organization’s activities, and no one would like to see the United Nations unable to fulfil its tasks in that area.  Payment of peacekeeping contributions on time and in full would also facilitate quicker refunds by the Organization to the nations which had contributed military contingents and equipment.

The latter was a source of serious concern for the representative of Qatar (on behalf of the “Group of 77” developing countries and China).  All outstanding amounts, including those dating back many years owed to developing countries, should be paid as a matter of high priority.  The Group also urged the Secretariat to improve the timeliness of its reimbursements of troop and contingent-owned equipment claims.

Also today, as the Committee continued its consideration of the ongoing human resources management reform and issues related to the United Nations common system, several speakers emphasized the need to strengthen the accountability framework in the implementation of human resources policies.  Many delegates also raised concerns about gender parity and equitable geographical representation within the Secretariat.

The representative of Nigeria, for example, said that the African Group, on whose behalf she was speaking, remained the only regional group that continued to be visibly under-represented at programme management levels and as far as gender parity was concerned.  While the region had well qualified people that could be appointed to senior management positions, that was not reflected in the appointments made by the Secretariat.  Only six of the 86 women hired between July 2003 and June 2004 were from Africa, and only one of them was at the D-1 level.

China’s representative called on the Secretariat to ensure that there was fair representation of nationals from developing countries at the senior and policy-making levels, saying that the share of nationals from developing countries at the D-1 grade and above had declined from 48.5 per cent in 2000 to 44.7 per cent in 2004.

The representative of New Zealand, also speaking on behalf of Australia and Canada (CANZ), said that, while the principle of merit was at the foundation of the human resources system, the staff of the Organization should also reflect the diversity of the Member States.  Women should be equally represented in the Secretariat.  The statistics on geographical distribution showed continuing improvement in the past decade.  Nonetheless, aggressive recruitment campaigns and close coordination were needed to help the small number of States that had been substantially under-represented for a sustained period.  The Secretary-General could also do more to appoint women to senior posts.

Among other issues addressed today were the contractual arrangements for United Nations staff, measures to “rejuvenate” the Secretariat, the use of contractors and retirees, mobility and the new staff selection system.

Finally, also discussed today were several reports related to the Organization’s pension system, which were introduced by the Chairman of the United Nations Joint Staff Pension Board, Antonio Busca; the Under-Secretary-General for Management, Catherine Ann Bertini, and the Vice-Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), Rajat Saha (India).

Also speaking today were the representatives of South Africa (on behalf of the African Group), Australia (on behalf of CANZ), Bangladesh, Kuwait, Malaysia, Myanmar, Viet Nam, Republic of Korea, India, Lao People’s Democratic Republic (on behalf of the Association of South-East Asian Nations (ASEAN)), Oman, Brazil (on behalf of the Rio Group), Jordan, Singapore, Tunisia, Pakistan, United Republic of Tanzania, United States, Uruguay, Barbados, Jamaica, Saudi Arabia, Philippines, Mongolia, Kazakhstan, Turkey, Bahamas and Syria.

The Committee will continue its deliberations at 10 a.m. Friday, 29 October.

Background

The Fifth Committee (Administrative and Budgetary) this morning was expected to continue its consideration of human resources management reform and the United Nations common system (for detailed background, see Press Release GA/AB/3639 of  27 October) and discuss improving the financial situation of the Organization, as well as hear introduction of several reports related to the Organization’s pension system.

On the latter, it had a report of the United Nations Joint Staff Pension Board on the United Nations Joint Staff Pension Fund (document A/59/9), which reports on the outcome of the Board’s session last July.  The major items dealt with by the Board include actuarial matters, management of the Fund’s investments, review of the size and composition of the Pension Board and its Standing Committee, the progress report on the Fund’s management charter, and revised budget estimates for 2004-2005.

During the biennium ended 31 December 2003, the number of participants in the Pension Fund increased from 80,082 to 85,245, or by 6.4 per cent, and the number of periodic benefits awarded increased from 49,416 to 52,496, or by 6.2 per cent.  On 31 December 2003, the breakdown of the periodic benefits was as follows:  16,713 retirement benefits, 11,730 early retirement benefits, 6,575 deferred retirement benefits, 8,294 widows’ and widowers’ benefits, 8,221 children’s benefits, 921 disability benefits, and 42 secondary dependants’ benefits.  In the course of the biennium, 12,978 lump-sum withdrawal and other settlements were paid.

Among other developments, the document notes the rebound in the market value of the Fund’s assets and the positive returns achieved during the 2002-2003 biennium.  The total annualized real rate of return for the two-year period ending 31 March 2004 was 8.7 per cent.  Since the establishment of the Pension Fund in 1949 -- when it was set up to provide retirement, death, disability, and related benefits for staff upon cessation of their services with the United Nations -- the cumulative annualized real rate of return has been 4.1 per cent.

The Pension Board recommends that the General Assembly approve three proposals for additional resources required in the 2004-2005 biennium, amounting to $5.3 million.  The revised estimates would then total $41 million for administrative costs.  The increase was related mostly to the $5.1 million authorized but not spent in 2002-2003 for renovation work and the purchase of furniture and equipment for the Fund’s new offices (the necessary obligations could not be made during the previous biennium without a signed lease for the office space).

An addendum to the report (document A/59/9/Add.1) contains information on the July 2004 session of the Joint Staff Pension Board, which considered a number of possible transfer agreements that might be concluded with international organizations, including the Organization for Security and Cooperation in Europe (OSCE) and the World Trade Organization (WTO).  Since July, the Pension Fund secretariat has successfully concluded discussions concerning agreements on bilateral transfer of pension rights of participants with the Universal Postal Union (UPU) and the Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO).

The report of the Secretary-General on investments of the United Nations Joint Staff Pension Fund (document A/C.5/59/11) provides information on the management of the investments of the Fund during the period from 1 April 2002 to 31 March 2004 -- including information on investment returns, diversification of the investments, and development-related investments.  The Fund’s management is the fiduciary responsibility of the Secretary-General, who acts in consultation with the Investments Committee, taking into account the observations on broad policy of the United Nations Joint Staff Pension Board and the General Assembly.  The Investments Committee provides advice to the Secretary-General on investment strategy and reviews the investments of the Fund at his quarterly meetings.  The Under-Secretary-General for Management has been designated as the representative of the Secretary-General for the investments of the Fund, with delegated responsibility for its management and administration.

The Fund maintained its long-term, large capitalizations, blue-chip orientation as financial markets experienced huge volatility for the second consecutive biennium, with economic difficulties compounded by accounting fraud, corporate malfeasance, SARS, mad cow disease, and war.  The United States dollar reversed its upward moves of the previous biennium to undergo an almost continual decline against other major currencies, ending the biennium down 41 per cent against the euro, 30 per cent versus the pound sterling, and 29 per cent against the Japanese yen.  The Investment Management Service reallocated Fund assets to Europe from the United States in both equities and bonds early in the biennium.

Commenting on those reports, the ACABQ (document A/59/447) advocates streamlining the Board’s report and presents recommendations on the substantive matters.

According to the document, the results of the latest valuation showed an actuarial surplus of 1.14 per cent of pensionable remuneration, or $1.95 billion in dollar terms, showing the fourth consecutive positive actuarial result over the past decade.  Based on those results, the Pension Board agreed with the view of the Committee of Actuaries that the contribution rate of 23.7 per cent of pensionable remuneration was sufficient to meet the benefit requirements under the plan. The Advisory Committee agrees that the present contribution rate of 23.7 per cent should be retained.  It also recalls the provisions of Assembly resolution 53/210 that the Pension Board should continue to monitor closely the evolution of the actuarial valuation of the Pension Fund and that no attempt should be made to reduce the present rate of contributions to the Fund or change any other features unless and until a pattern of surpluses emerges in future valuations.

Also, as the market value of the Fund is subject to fluctuation, the ACABQ continues to emphasize that all investments of the Fund must meet the criteria of safety, profitability, liquidity and convertibility.  This investment policy has been advocated repeatedly by the Committee, the Pension Board and the General Assembly.

As for the purchase of the building as a real estate investment, the Advisory Committee recalls that, according to the Pension Board’s report, the Fund sold the property at a profit of approximately $30.6 million, with an annualized return of about 10 per cent on the sale.  However, the ACABQ agrees with the finding of the Board of Auditors that it could have been conducted in a more transparent manner.  In the future, real estate investment transactions should be conducted in the same manner as those relating to equity investments.  The ACABQ also endorses the auditors’ view that the Investment Manual and other guidelines of the Investment Management Service of the Pension Fund should be amended prior to transactions being undertaken, rather than retroactively.

The ACABQ further discusses several measures proposed by the Pension Board, including those related to the need to approve a phased approach in the elimination of the 1.5 per cent reduction in the first consumer price index adjustments due after retirement and amend the Pension Adjustment System.  The Advisory Committee agrees with the recommendation of the Pension Board that the General Assembly approve additional resources in the amount of $5.34 million for the biennium 2004-2005 for administrative costs of the Fund. The revised estimates for total administrative costs of the Fund would amount to $41.01 million for the biennium 2004-2005.  The ACABQ remains concerned about the upward trend in administrative expenditures of the Fund and intends to revert to the matter in the context of the administrative budget proposal of the Fund for 2006-2007.

Improving Financial Situation of United Nations

Statements

MISHAL MOHAMMED AL-ANSARI (Qatar), speaking on behalf of the “Group of 77” developing countries and China, noted that the data provided by the Under-Secretary-General demonstrated that the United Nations had moved towards a better financial situation overall.  However, the Group expressed concern at the continuing high levels of amounts payable to troop-contributing countries, while noting the modest improvements in that regard during 2004.  The Group urged that all outstanding amounts, including those dating back many years owed to developing countries, should be paid to them as a matter of high priority.  The Group also urged the Secretariat to improve the timeliness of its reimbursements of troops and contingent-owned equipment claims.

As for the international Tribunals, the Group regretted that they found themselves in a negative cash position of $80 million, again maintaining the previous negative trend.  The Group noted that, as of 15 October, as many as 113 Member States had not paid their contributions to the Tribunals in full, and was especially concerned by indications that cash levels were slipping each year.

The Group was also concerned that several ongoing peacekeeping operations had had to resort to cross-borrowing from closed peacekeeping mission accounts due to non-payment of assessed contributions.  The Group believed that unhealthy practice should not be allowed to continue indefinitely, since it had negative effects on the financial capacity of concerned countries.

While recognizing the need to extend sympathetic understanding to those temporarily unable to meet their financial obligations as a consequence of genuine economic difficulties, the Group urged all Member States to pay their assessed contributions in full, on time and without conditions.  Finally, he noted that the United Nations had twin responsibilities for peace and security, and development, but that the progressive importance accorded to peace and security had resulted in substantially increasing the peacekeeping budget.  The Group would like to see equal, if not greater, emphasis for funding development activities mandated by the General Assembly.

KAREN LOCK (South Africa), speaking on behalf of the African Group, fully supported the statement made by the representative of Qatar on behalf of the Group of 77 and China, and echoed their appeal to all Member States to pay their assessed contributions in full, on time and without any conditions.  They did also recognize, however, that special situations might arise where some Member States were unable to meet their obligations due to genuine financial difficulties, and they should not be penalized.

The Group commended the Organization for serving the people of the world admirably, despite facing severe financial difficulties.  While encouraged by the reports that some progress had been made towards providing the United Nations with a strong and dependable financial base, they remained mindful of the caveat by the Under-Secretary-General that serious problems still persisted.  Member States must ensure that the Organization received adequate resources and reliable financing, so that it could complete its tasks without resorting to extrabudgetary funding for core activities.  The Secretary-General had, on numerous occasions, stated that further budgetary constraints would seriously compromise the Organization’s ability to deliver the level and quality of services expected of it, especially when Member States continued to impose new mandates without providing corresponding resources.

The African Group was concerned about the deepening financial crisis faced by the two Tribunals, with unpaid assessments remaining at unacceptable levels.  Member States had pledged to support the ideals of the International Tribunal in Rwanda, believing that it would contribute to the process of national reconciliation in that country and help maintain peace in the region.  Member States also acknowledged that the tragedies of Rwanda and the former Yugoslavia were the world’s tragedies.  It was imperative that the Member States continued to translate political support into action.  Member States could hardly judge the performance of the Tribunals if they did not provide the appropriate resources.

On peacekeeping, the Group commended the Secretary-General for the marked improvement in reimbursing Member States that had provided troops and equipment to United Nations peacekeeping operations.  However, the Organization still owed large sums to Member States from the accounts of active and closed peacekeeping missions.  Many of those Member States were from Africa and other developing countries, and their continued efforts in support of the United Nations would be greatly enhanced if the Organization met its obligations to them in a timely manner.

It was clear that the only solution to the precarious financial situation of the United Nations was in the hands of the Member States, and it was imperative for them to live up to their legal responsibilities and provide the Organization with the appropriate means to carry out its noble mission.

JESSICA THORPE (Australia), also speaking on behalf of Canada and New Zealand, strongly echoed Ms. Bertini’s call to Member States that had not done so to pay as soon as possible.  Member States should meet their financial obligations to the United Nations in full, on time and without conditions.  The need for cross-borrowing for the regular budget for two weeks in September was alarming.  It was also worrying that the $725 million owed in regular budget contributions affected core activities of the Organization.  If Member States continued calling for increased activities, they should be prepared to pay for them.

She agreed with Ms. Bertini that the slight improvement in the Tribunal payments was no reason for complacency on the part of the 113 countries that had only partially paid, or worse, not made their payments.  Unpaid assessments had increased significantly over the last two years.  That unacceptable trend would affect the Tribunals’ core activities.  She was also concerned by the high level of debt to Member States and expected the Secretariat to make timely reimbursement and efficiently process credit transfers.  Of course, that depended on Member States paying their assessments.  When the Committee adopted peacekeeping budgets, countries must take responsibility for keeping up with payments.

She added that the question of returning money from closed peacekeeping missions was a difficult one for countries that had paid in full and on time.  While not wishing to place the work of the United Nations at further risk, they should not continue to support a cross-borrowing mechanism that effectively subsidized those that were not paying.

ANDREY I.DENISOV (Russian Federation) said that, on the whole, the current financial situation could be characterized as stable.  The Organization had managed to get away from the abyss of the 1990s.  The situation had been remedied, to a large extent, by payments of large arrears by Member States, substantial payments to various budgets and measures to strengthen financial discipline in the Secretariat resulting from the Secretary-General’s reform agenda.  The cautious optimism of last week’s report, however, was far from making Member States believe that the Organization’s financial situation was really stable.  As in the past, it was characterized by serious delays in payments of assessments, their partial payments and, in many cases, by mere non-payment.  This year, the overall debt to the regular budget amounted to practically half its level.  Hopefully, the forthcoming significant payments mentioned by Ms. Bertini could improve the situation in that respect.

Continuing, he noted a sizeable expansion of the Organization’s peacekeeping, with its budget now exceeding $4 billion.  One could not exclude its further rise.  That could negatively affect the readiness of Member States to make timely payments of their contributions.  At the same time, it was hard to provide an explanation for a $2.5 billion debt.  Peacekeeping was one of the most important areas of the Organization’s activities, and no one wanted to see the United Nations unable to fulfil its tasks as set by the international community.  Payment of peacekeeping contributions in due time and in full would facilitate quicker refunds by the Organization to the nations that had contributed military contingents and equipment.

The Russian Federation consistently and firmly pursued its policy of principled support to the United Nations, he said.  Russia had recently repaid its arrears to the Yugoslavia Tribunal, and it paid on time and in full its dues to other United Nations budgets, thus, confirming its commitment to the goals and ideals of the Organization.  This year, his country had already paid over $85 million to different budgets.  No political assurances of support of the United Nations would be meaningful without a diligent fulfilment by Member States of their financial obligations under the Charter.

In conclusion, he said that a considerable growth of the peacekeeping budget and expected increase of the already approved budget for the current biennium pointed to an urgent need to search for measures aimed at cost-saving and further strengthening of financial discipline.  It was also necessary to rigorously re-evaluate some programmes and projects in progress with a view of terminating the obsolete ones.

DIRK JAN VAN DEN BERG (Netherlands), speaking on behalf of the European Union and associated States, noted that the countries of the European Union together accounted for some 37 per cent of the United Nations budget and, as the largest contributor, attached enormous importance to the financial viability of the Organization.

The Union welcomed the modest positive trend outlined by Ms. Bertini, but remained concerned that the number of States paying their regular budget assessments in full had declined from 131 in 2003 to the present number of 111.  They were also concerned about the rise in outstanding assessed contributions to the regular budget from $690 million last year to $725 million in 2004.  As pressure on the budget level rose, the ability of the United Nations to scrape by from month to month was decreasing.

The Union remained alarmed by the financial situation of the international Tribunals -– with 113 MemberStates not having fully paid their dues and 13 MemberStates having not contributed to the Tribunals since their inception.  International justice was a key priority of the United Nations.  By not paying, Member States jeopardized the functioning and credibility of the international justice system.  They called upon Member States that had approved the budgets of both Tribunals, yet delayed or did not make payments, to meet their obligations in full, on time and without conditions.

On peacekeeping, the Union recognized the sharp increase in assessments to over $4 billion in 2004.  So did their ministries of finance.  Yet, despite the heavy financial burden, they believed that peacekeeping was a function of the United Nations that had proved its worth.  They were disturbed by the increase in outstanding assessments from $1 billion by the end of 2003 to $2.5 billion as of 15 October, recognizing the nuances to that picture.  The Union called upon those Member States that owed large amounts to take steps to remedy the situation.  The Union recognized the need to take a decision on the need to address the negative effects of continuing cash shortfalls, including the need to take a decision on the return of $94 million to Member States.

MUHAMMAD MUHITCH (Bangladesh), associating his statement with that made by the representative of Qatar on behalf of the Group of 77 and China, noted that while some progress was reported in the Organization’s financial situation, critical problems remained.  The ratio between assessments and payments did not represent an optimistic picture.  Only the unpaid assessment of the Tribunals’ budget showed a little improvement, but even that remained “very critical”.  As a Member State that had been paying its assessed contributions to both the regular and peacekeeping accounts on time and in full, Bangladesh was wary.

On the peacekeeping budget, he was concerned to note that outstanding peacekeeping assessments had risen to $2.5 billion.  However, he also noted a marginally positive trend in the ratio between assessments and payments, which was significant in view of the fact that the total peacekeeping assessment this year was almost double that of last year.  Bangladesh appreciated the overall progress made in the troops and equipment debts and troop payment for the three newly established missions.

However, there was no room for complacency, as the level of debt owed to Member States at year’s end was estimated at $605 million on accounts of troops and contingent-owned equipment.  The situation could turn worse, if it was necessary to resort to cross-borrowing from the peacekeeping budget to fund regular expenditure.  That unhealthy practice had in the past resulted in inordinate delays in reimbursements to countries providing troops and contingent-owned equipment.

Countries that responded to calls at the United Nations to maintain peace and security were mostly developing ones.  As one of the largest contributors of troops, Bangladesh could not overemphasize the importance of timely payment of dues by the Organization.  The amount of debt owed to Bangladesh remained the highest at $46 million, a modest improvement from last year’s outstanding amount of $69 million.  The matter required urgent redress.

MESHAL AL-MANSOUR (Kuwait) supported the position of the Group of 77 and China and said that the Organization’s deficit now exceeded $3 billion, exacerbating the financial difficulties experienced by the United Nations as a result of the lack of commitment of Member States –- including the major contributor -- to pay their assessments in full, on time and without conditions.  That affected the performance of the United Nations.  The political will of Member States to pay must be one of the priorities.  That would enable the United Nations to continue implementing its tasks.  His country had paid its obligations in full and was among the first to make its payments.  He reaffirmed that the Organization’s financial situation could not improve, unless Member States made a concerted effort to assume their financial burdens in accordance with the Charter.  He called on all countries to make their payments in full, on time and without conditions.

TOSHIRO OZAWA (Japan) said that the question of which country had or had not paid their assessments was important and relevant, but there were also other questions that were even more important.  One of them is whether the rapid increase of United Nations assessed contributions had gone beyond the Member States’ capacity to pay.  There were also questions of whether limited resources were truly used in the most efficient way and whether the Organization was striking an appropriate balance between assessed and voluntary contributions.

The budgets for peacekeeping operations for the current fiscal year had gone beyond the level of $4 billion, and that figure was expected to increase further.  Last week, Ms. Bertini had made an appeal, as she should, to those who had not yet paid their assessed contributions in full to emulate the examples of the “honourable Members” who had paid their assessments in full.  He felt compelled to comment that, if that appeal was conducted in the spirit of “business as usual”, then the Organization was overlooking the fact that the United Nations peacekeeping budgets were more than double the previous fiscal year.

Each MemberState had its own budgetary cycle, and its unique approval/oversight mechanisms, he continued.  Not all Member States were blessed with systems that could quickly respond to rapid increases in assessed contributions.  That was particularly true, if the figures involved were large, and Japan was one of those countries.  Japan had consistently paid its assessed contributions in full and without conditions.  The timing of the full payment of peacekeeping contributions was often late [by one to a year], but that was a consequence of democratic oversight over possible expenditures.  What was more important than the issue of partial late payment of peacekeeping budgets was the unfortunate, but undeniable, trade-off between assessed contributions and voluntary contributions.

Japan’s Government continued to face a major fiscal challenge of dealing with the enormous amount of accumulated public debt.  It did, indeed, intend to continue paying its assessed contributions, but wanted to remind the Committee of the unintended consequences of the collective decisions it had made for increases in expenditures.  Personally, he had found it a very tough task to inform the funds and programmes engaged in humanitarian and development assistance that Japan could no longer fund this or that programme.

Recalling his statement to the Committee on 3 June, he said that Japan had expressed serious concern regarding its inability to participate in the establishment of peacekeeping operations in the Security Council.  Fortunately, one week ago, Japan had been elected to serve on the Council in 2005 and 2006.  His country intended to participate actively in the reviews of peacekeeping mandates and the implementation of completion strategies.

Turning to the Tribunals, he commended the Russian Federation for making full payments to both Tribunals, despite its comments concerning the Yugoslavia Tribunal.  On the other hand, it had been most surprising to learn that 13 countries had never paid their assessed contributions since the establishment of the courts.  Perhaps it was time, after 10 years, for the Secretariat to inquire about the reasons.  He noted that Ms. Bertini had imposed fiscal austerity measures vis-à-vis the Tribunals.  Certainly, no organization could live beyond its means.  He hoped that those measures were in line with the implementation of the completion strategy.

On the regular budget, he reiterated his concern on the continuous increase in expenditures.  Japan would carefully study all major items, including the proposal for special political missions and safety and security, as well as the issue of recosting.  He also asked Ms. Bertini why the request of the Assembly to redeploy, on an experimental basis, 50 posts Organization-wide had not been implemented so far.

NUR JAZLAN MOHAMED (Malaysia) associated his delegation with the statement made by Qatar on behalf of the Group of 77 and China, and with the forthcoming statement of the representative of the Lao People’s Democratic Republic on behalf of the Association of South-East Asian Nations (ASEAN).  It appeared from the presentation of the Under-Secretary-General that serious problems still remained, though some progress had been made in improving the financial situation of the Organization.  The total amount of unpaid assessments as at 15 October 2004 stood at $3.345 billion, as compared with last year’s figure of $1.596 billion. Malaysia welcomed the announcement that a major contributor was expected to make a payment of $300 million that would ensure a return to last year’s more positive trend.

Noting the surge in the budget for peacekeeping operations, totalling more than $44 billion, Malaysia believed that a proper balance should be struck between the level and urgency with which peacekeeping activities were funded and the availability of resources needed for full implementation of all programmes and activities mandated by the General Assembly, particularly in the economic and social spheres.  He noted with concern that the international Tribunals and several ongoing peacekeeping operations had to resort to borrowing funds from the accounts of closed peacekeeping missions and hoped such a situation would not arise in the future.

Member States must ensure that the United Nations was provided with the necessary financial resources for it to fulfil its mandate efficiently and effectively.  While fully understanding the difficulties faced by some Member States in meeting their obligations, everyone must try to do their best to ensure that the good work done by the United Nations was not unencumbered by the lack of financial resources.  While his delegation recognized that some Member States were faced with situations beyond their control, he urged the more capable Member States to honour their assessed contributions.  Malaysia would continue to honour its obligation seriously by paying its assessment in full, on time and unconditionally.

KYI TUN (Myanmar) associated his delegation with the statement made by the representative of Qatar on behalf of the Group of 77 and China, and with the statement to be made by the Lao People’s Democratic Republic on behalf of ASEAN.

While there were some positive developments in the overall financial picture, he could not be to optimistic as serious problems still existed.  Similar problems of the recent past persisted, such as cash flow problems, mounting unpaid assessments, and the prevalence of increased cross-borrowing from peacekeeping accounts.  He was especially concerned that there would still be some need for cross-borrowing later in 2004 and wished to see the Committee find a more durable solution to that ongoing practice.

With only 111 countries to date having paid their regular budget assessments in full for 2004, as compared to 131 in 2003, the financial stability of the Organization remained under pressure.  The demands on the Organization continued to increase year by year.  As more services were requested by Member States, the Organization should be provided with the adequate resources to carry out its mandate successfully.  He supported measures to encourage the timely, full and unconditional payment of assessed contributions.  He felt that the multi-year payment plan was the best tool to be initiated by Member States with arrears.  However, that plan should be voluntary and not automatically linked to other measures.  Myanmar had always paid its assessed contributions and would continue to do so.

XUDONG SUN (China) said that in order to meet greater challenges and better adapt to the current situation, the Organization needed to carry out a comprehensive reform, so that it could play an increasingly stronger role.  He hoped the reform would enable the United Nations to manage and implement its ever-increasing programmes more effectively, further rationalize its resource utilization and maximize its output and efficiency, so as to better serve the needs of Member States.  A strong financial base was an important reflection of the strength, stability and vitality of the Organization.  As long as all Member States faithfully and seriously fulfilled their financial obligations and paid all their assessed contributions on time, in full and without conditions, the United Nations would be endowed with adequate resources.  A strong and stable financial situation was of particular importance at a time of reform.

He said the statistics presented last week showed that, on the one hand, the majority of Member States had paid their assessed contributions in full and on time, while, on the other hand, there were still some countries that had not fulfilled their obligations under the Charter.  With unpaid assessments as high as $3.35 billion, the normal functioning of the United Nations in all areas of work would inevitably be seriously hampered.  That was a cause for serious concern.  All the Organization’s budgets had been fully discussed by Member States and approved by the Assembly after consensus had been reached.  Therefore, it was the Member States’ burden to pay those assessments according to the agreed scale.  In brief, if the Member States failed to implement their financial obligations seriously, the United Nations would not be able to receive the assessments on time and, consequently, its income and expenditure balance would be skewed.  In that case, the budget of the United Nations would become a mere piece of paper, without any binding force, and the financial expenditures required to finance the work of the United Nations could not be assured.

Despite being a developing country with a relatively low capacity to pay, China was keenly aware of its responsibility as a major Power and had managed to pay its full assessed contribution of $29.99 million for 2004, and the assessment for the two Tribunals in the amount of $6.03 million, as well as $70 million for the 15 peacekeeping missions.  The total of those payments amounted to over $100 million.

NGO DUC THANG (Viet Nam) supported the position of the Group of 77 and China and ASEAN, and said that payment of regular budget contributions in 2003 had fallen behind in comparison with previous years.  For this year, he noted the view of the Under-Secretary-General that, although the United Nations was in a stronger position with higher payments and cash on hand, its financial situation was still very critical.  The financial health of the Organization depended not only on proper management of resources, but also on the financial contributions by Member States.  In order to improve it, it was necessary to deal with those two issues in tandem.  The Organization had put forward a comprehensive reform agenda, in which the reform of the planning and budgeting process was one of the most important components.  Viet Nam joined the African Group in urging the administration to expedite the implementation of General Assembly resolution 57/278, which requested the Secretary-General and the executive heads of the funds and programmes to examine governance, structures, principles and financial management and accountability.  While not an easy exercise, he believed the reform would finally enable the organization to manage and better implement the increasing number of programmes and activities in a more cost-effective and efficient manner.

He shared the common view that Member States should honour their financial obligations to the United Nations in accordance with the Charter, he said.  In that connection, he welcomed the announcement that the major contributor was expected to make a payment of $300 million, which would allow the Organization to end this year with a positive cash balance.  However, in some cases, serious circumstances could prevent Member States, especially the developing countries, from paying their assessments in full and on time.  His delegation would like to extend its sympathetic understanding to those countries that were experiencing difficulties and were temporarily unable to meet their financial obligations.  Any measures sought to encourage payment of arrears should be in line with resolution 57/4C.

In that spirit, he said, multi-year payment plans should remain voluntary, to be used to help Member States pay their arrears.  They should not be considered as a condition to the granting of wavers under Article 19.  He also shared the concern that many developing countries had been negatively affected as a result of the application of the current scale methodology.  He hoped that future reports of the Committee on Contributions would present concrete measures to avoid substantial increase in the assessment of developing countries, and ensure the capacity-to-pay principle as the basis of the methodology.

CHUN YUNG-WOO (Republic of Korea) noted that on the whole there was more bad news than good news.  Although there was no financial crisis on the horizon, there was sufficient cause for concern about the sustainable financial health of the Organization.  The amount of unpaid assessments had more than doubled in the reporting period, while the debt owed to Member States had also increased sharply.  Given the surge in demand for United Nations peacekeeping operations, unpaid assessments for peacekeeping and the debt to Member States would likely increase further over the coming year.  He was particularly concerned about the financial situation of the Tribunals.  Apart from their negative cash balance, unpaid Tribunal assessments stood at an alarming level -- indicating declining political support by the Member States.

Member States were primarily responsible for the financial health of the Organization, which would benefit from greater financial discipline.  His delegation appreciated the efforts of the Department of Management to put the Organization’s financial house in order and welcomed the introduction of results-based budgeting.  He looked forward to continued efforts to align expenditures with revenues.

He believed that greater efforts were required to match the operational costs of the two international Tribunals with the level of actual contributions received by freezing recruitment and scaling down operations.  The Republic of Korea had always paid its assessed dues to the Tribunals in full and on time.  Nevertheless, it must be kept in mind that, given the limited available financial resources of Member States, more urgent peacekeeping priorities might suffer to the extent that a disproportionate amount of resources continued to be devoted to the operations of the international Tribunals.  While the importance of justice could never be overemphasized, stopping ongoing conflicts was equally important.  His delegation sincerely hoped that the Tribunals would make every effort to complete their work by 2010 as mandated, despite the financial and other constraints.

The sharp increase in the peacekeeping budget this year had made it extremely difficult for many Member States to pay their shares in full and on time.  It was vital that the Security Council and the Secretariat consult with major financial contributing countries in the process of establishing new peacekeeping missions or extending existing ones.  The perception of being sidelined from decisions with important financial implications would only undermine domestic political support for peacekeeping operations and compound the difficulties of securing necessary appropriations.  Troop-contributing countries would also suffer from such a practice, to the extent that troop debt payments were delayed.

His country had always paid its share of the regular budget in full and on time, but was experiencing unprecedented difficulties in paying its dues to the peacekeeping budget this year.  That was primarily due to the extraordinary apportionment of peacekeeping costs, whereby the country’s share of the peacekeeping budget jumped eightfold over the past five years.  Together with the increase in the overall cost of peacekeeping operations, the actual amount of the Republic of Korea’s assessment had jumped 11 times since 2000.  He did not know of any other country facing a similar situation.

RAVI PRAKASH VERMA (India) began his remarks by noting that the information provided during the presentation of the financial situation this year was somewhat less detailed that on earlier occasions.  His delegation associated itself with the statement made by the representative of Qatar on behalf of the Group of 77.  Noting that unpaid assessments for peacekeeping were more than twice the figure of last December, his delegation hoped that was a temporary phenomenon.  He hoped that the four contributors that together owed about $1.7 billion in peacekeeping dues as of 15 October would soon make their payments.

With only two months to go before year’s end, more than half the regular budget assessments of about $1.4 billion remained unpaid.  The number of Member States that had paid fully at this time was also down.  Those were not healthy signs.  His delegation was also dismayed to learn that cross-borrowing from the balances of closed peacekeeping operations was used, for two weeks in September, to finance operations of the regular budget.  Payments to Member States for troops and contingent-owned equipment had not kept pace with the increase in obligations on account of new missions.  While appreciating the efforts of the Secretariat in that area, there was no room for complacency in view of the several large peacekeeping missions in the start-up phase or in the offing, and with the expansion of existing missions.

Regarding individual peacekeeping missions, his delegation reiterated its concern about the status of financing the United Nations Interim Administration Mission in Kosovo (UNMIK).  Non-receipt of timely payments of assessed contributions for that Mission had resulted in delays in reimbursement for troop costs and for contingent-owned equipment that far exceeded the norm.  India registered its appreciation for the decision by one MemberState to pay its arrears, and encouraged other in arrears to do likewise.

The major part of outstanding dues owed to India were from closed peacekeeping missions that were in a net cash deficit.  The United Nations owed more than $100 million to Member States for troop and equipment costs from six closed mission with net cash deficits.  That was a long-standing problem that the membership had been unable or unwilling to address.  Meanwhile, the unencumbered balances of closed missions that were in net cash surplus were estimated at only $27 million.  That was the only amount available to the Organization for cross-borrowing, should that undesirable practice become necessary.  India did not favour any diminution in the existing cash balances of closed missions except for meeting cash liabilities.

ALOUNKEO KITTIKHOUN (Lao People’s Democratic Republic), speaking on behalf of ASEAN, supported the position of the Group of 77 and China and noted the improvement in the financial situation of the Organization, compared with the previous year.  He also welcomed the announcement that the major contributor would make a payment of $300 million shortly, which would allow the Organization to end the year with a positive cash balance.  The ASEAN, however, approached that trend with cautious optimism and remained concerned over the high level of unpaid assessments, the higher amounts due to troop contributors and the continued practice of cross-borrowing to finance regular expenses.

Continuing, he expressed concern over the fact that continuing financial difficulties experienced by the United Nations were undermining the Organization’s ability to implement fully, efficiently and effectively the programmes and activities mandated by Member States.  Financial difficulties faced by the United Nations were principally due to the late or non-payment of assessments, and he wanted to reaffirm the obligation of Member States to pay their assessed contributions in full, on time and without conditions.

Mr. AL-ZAABI(Oman) supported the statement by Qatar on behalf of the Group of 77 and China, and said that the report of Ms. Bertini deserved the utmost attention.  Of particular interest were the high amount of arrears that amounted to over $3.3 billion and the high level of debt to Member States.  The Committee should urge the countries that had not done so pay their assessments without delay and in full, as the Organization needed that money to fulfil its mandates.

He went on to say that in the presentation by the Under-Secretary-General for Management on contributions of States and arrears to the regular budget and the Tribunals, Oman had been listed among the countries that had not paid their dues.  In fact, his country had paid its assessments for the regular budget in full.  That was also true for the Tribunals’ budgets.  Oman had also paid towards the budget of peacekeeping operations.  The country’s total payments amounted to $1.398 million.  He requested that Oman’s name be eliminated from the list of countries that had not made their full payments.  He called on all Member States to pay their assessments in full and on time.

The costs of peacekeeping had reached $4.1 billion, he continued, while unpaid assessments amounted to $2.5 billion.  That was not a rosy picture.  It was important to rationalize the resources and respect a country’s ability to pay.  The international Organization now had to shoulder responsibilities that surpassed its resources, with many mandates yet to be implemented.  The Secretariat should provide resource requirements prior to any legislative action.  The Council should coordinate the needs with Member States prior to establishing the mandates of peacekeeping operations.

CAIO MARIO RENAULT (Brazil), speaking on behalf of the Rio Group, aligned the Group with the statement made by Qatar on behalf of the Group of 77 and China.

He offered two representations that could be drawn from the report on the financial situation of the Organization.  One picture was of an association of States striving together towards peace and development.  However, one could also see a picture where the unequal distribution of opportunities and wealth had made it almost impossible for developing countries to fully meet their obligations to the Organization.  Amidst the neatly drafted charts and graphs hailing those who paid on time and pointing out those who could not, it should be noted that it was far more heroic for a developing country, struggling with a chronically fragile economic situation, to make minimum payments than it was for those countries whose citizens enjoyed some of the highest per capita gross national products (GNPs) on the planet to pay their contributions in full.

That situation was of grave concern to the Rio Group, many of whose members had faced dire financial crises in recent years and yet had made all possible efforts to honour their financial commitments to the Organization.  Where they failed to do so, it was not by choice but was contingent upon their circumstances.  Among the matters that deserved careful attention were the enduring delicate situation of the international Tribunals and the long-standing issue of reimbursement to troop-contributing countries.

MOHAMMAD TAL (Jordan) aligned his delegation with the statement made by the representative of Qatar on behalf of the Group of 77 and China.  While the statistics provided by the Under-Secretary-General showed some modest improvement to the financial situation of the Organization, many of the same problems persisted as in previous financial periods.  In particular, he noted the delay by Member States in making full contributions to various United Nations accounts, and the delay in making the payments owed to troop-contributing countries.  That last issue had special importance to his country, which was one of the main contributors to peacekeeping operations.

Paying the debt owed to Member States was an important matter, and the delay was caused largely by four Member States that had not paid their assessed contributions to the peacekeeping budget, he continued.  The delay was also caused in part because applications had not yet been endorsed yet.  His delegation had repeatedly asked for the streamlining of those applications and making the process more transparent.  His delegation was also concerned about cross-borrowing from different accounts of the United Nations.  Borrowing from closed peacekeeping operations would affect the speed with which the Member States were paid what was owed to them.  As mentioned in previous years, he stressed that a mechanism must be found to address that issue.

RAZIFF ALJUNIED (Singapore) supported the positions of ASEAN and the Group of 77 and China, and noted that, while there was some improvement in the financial situation of the United Nations, serious problems remained.  The difficulties were mainly due to late payment or non-payment of dues by Member States. The persistent negative cash position of the Tribunals was also alarming, as well as the fact that no fewer than 113 countries still had outstanding amounts for the Tribunals.  Another source of concern was the quick growth of peacekeeping budgets, with outstanding dues in that regard amounting to some $2.5 billion.  The fundamental problem of non-payment would affect the ability of the United Nations to implement its activities.  The case for a financially stable United Nations was more relevant than ever today.

Continuing, he stressed that Member States should pay their assessments in full, on time and without conditions.  For its part, Singapore did its best to fulfil its financial obligations to the Organization.  At the same time, he was cognizant of the need to extend sympathetic understanding to countries unable to pay due to genuine economic difficulties.

RAFLA M’RABET (Tunisia) supported the position of the Group of 77 and China and noted with satisfaction the slight improvement in the financial situation of the United Nations.  She hoped that trend would continue.  Regarding debt to countries contributing troops and equipment to peacekeeping missions, she noted the suggestion by Ms. Bertini that it should be credited towards their arrears.  While interesting, that proposal must be discussed further, on a case-by-case basis.

SYED MUHAMMAD ASGHAR SHAH (Pakistan) associated himself with the statement by Qatar on behalf of the Group of 77 and welcomed the statement by Ms. Bertini that the financial situation of the United Nations remained stable in 2004.  However, such aspects as the high level of unpaid assessments and debt owed to Member States were among the sources of concern.  There was a need for long-term stability in the financial situation of the Organization, so that it could effectively carry out its mandated programmes and activities.  He was encouraged, though, that the cash-on-hand situation had improved for both the regular and peacekeeping budgets.  Pakistan had paid its regular and Tribunal budget assessments for 2004 in full and on time.  All Member States must fulfil their financial obligations to the United Nations in time and in full.

On peacekeeping, he noted the growth of peacekeeping budget to $4.1 billion, whereas unpaid assessments for peacekeeping operations had shot up to $2.5 billion.  That situation once again underscored the need to ensure that the United Nations was provided with adequate resources to enable it to perform the “myriad and growing” tasks with which it was entrusted.  For countries like Pakistan, which provided troops for peacekeeping, the high levels of unpaid dues and financial uncertainties posed disquieting costs.  His country was still owed more than $34 million for troop costs and contingent-owned equipment.  Although there had been some improvement in reducing the Organization’s debt to Member States, he remained concerned at the delays in reimbursement to troop contributors.  His delegation was particularly concerned when the fragility of the financial situation led to the practice of cross-borrowing from peacekeeping funds to finance regular budget shortfalls.

Noting with satisfaction that the situation of UNMIK had eased and the civilian police in Kosovo were now being paid, he expressed hope that steps would be taken to ensure that the civilian police in all missions be paid their remunerations on time.  It was not fair to deny the peacekeepers their rightful dues, when they were putting their lives in harm’s way for the sake of international peace and security.  Turning to “a new disturbing trend”, he said that there had been attempts to seek authorization for funds from the ACABQ, mainly on the argument that the matter was urgent.  By-passing the Fifth Committee undermined the intergovernmental prerogatives of the Organization.  He hoped that all resource requirements would be processed through established budgetary procedures.

JOHN J. NG’ONGOLOC (United Republic of Tanzania) fully associated his delegation with the statement made by Qatar on behalf of the Group of 77 and China, and also with the statement made by South Africa on behalf of the African Group.  He joined all other delegations that had called on Member States to pay their obligations in full, on time and without conditions.  That often depended on the political will of Member States to meet their obligations.  He pointed out that Tanzania, which was a developing country, had paid all its contributions in full by 21 October of this year.

The Under-Secretary-General for Management, Ms. BERTINI, addressed the delegates to respond to several issues raised during the debate and to provide some updates.  She thanked delegates for the concern and understanding they expressed.

She acknowledged the issue raised by Japan, the European Union and others about the impact on governments of the significant increase in the peacekeeping budget.  Everyone understood the strain that those increases put on the countries.  Also, when evaluating outstanding assessments, it should be noted that some of the accounts payable in peacekeeping were not overdue because the assessments were only recently made.  While appreciating that it sometimes took governments a while to make change, and trying to be sensitive to that, the Secretariat was not sensitive to the delay in paying assessed contributions that were known in advance, such as those to the regular budget and to the international Tribunals.  That matter required significant attention from the Member States.

On the issue of cross borrowing, she stressed that the Secretariat did not like it either and asked for ideas about alternatives.  “The alternative we have now is shutting down programmes and that is not an effective alternative”, she said, noting that if they did not borrow $6 million today, they would have to shut down the Rwanda Tribunal.  So they would borrow the $6 million.

Another broad issue, also raised by Japan, was the fact that when assessed contributions went up it put significant strain on voluntary contributions.  That was very painful -– both to the organizations that relied on voluntary funding and to the donor government that had to announce a cut.  Nonetheless, the Secretariat and the General Assembly had to take decisions and make judgements about what was required.

On a few specific matters, Pakistan had asked about whether the authorization of funds from the ACABQ by-passed the Fifth Committee.  She noted that that was not a new practice, and that the General Assembly had passed a resolution allowing the Secretary-General to authorize up to $50 million to start a new peacekeeping mission until he was able to present a full budget to the Fifth Committee.  In response to Japan’s question as to why the request of the Assembly to redeploy, on an experimental basis, 50 posts Organization-wide had not been implemented so far, she said they were working on that.  Regarding the specific concerns raised by Oman about its paid dues, her office would double-check the records and respond bilaterally.

Finally, she announced several updates on the financial situation.  Since she last addressed the Committee, Poland and Zambia had paid in full the amounts outstanding, bringing the countries that have paid this year to 113.  She reminded the delegates that the high point was in the year 2000, when 141 countries paid their dues.  She urged Member States to achieve at least that level.  As noted previously, a number of additional contributions should be forthcoming, including from the United States and Italy.

In closing, she reminded everyone that there was a press conference scheduled for next Tuesday, 2 November, at which the Secretariat would present statistics and information based on all those who had paid by the close of business tomorrow.  She suggested that any country that could pay in full by then should do so, as they might look a lot better when this announcement was made to the press.

Human Resources Management

Mr. AL-ANSARI (Qatar), speaking on behalf of the Group of 77 and China, expressed his concern over the late submission of documentation on the agenda item under discussion.  The Group had deep concern over the continuous failure of the Secretariat to submit documentation on time and requested the rectification of that failure.  Accountability measures should be in place to prevent that from occurring in the future.

The Committee should fully take stock of the level of implementation of various provisions of resolutions 55/258 and 57/305, he said.  It was necessary to ensure a comprehensive, fair and transparent system of recruitment, placement and promotion.  He also insisted on strict implementation of the principle of equitable geographical distribution and representation in the Secretariat.  It was necessary to ensure better communication between the management and staff.  The Group was concerned over the impression of the ACABQ that staff-management relations had, to some degree, broken down over the issue of the reform.  The Secretary-General and the Office of Human Resources Management (OHRM) should involve staff meaningfully, to take account of their concerns in implementing reform and make sure staff took ownership of the process.

The Group also emphasized the need to implement a proper system of accountability, he said, and ensure gender balance with full respect for the principle of equitable geographical representation and the need to ensure adequate female representation from developing countries.  Regrettably, only 21 out of 86 women hired between July 2003 and June 2004 were from developing countries.  Developing countries should also be adequately represented at the senior level of the Secretariat.  Among other needs, he listed the need to:  ensure a reliable system of the administration of justice; implement a fair and well managed mobility system; and address the chronic high level of vacancies in certain duty stations.  Four years after the introduction of the reform package, it was imperative to evaluate and assess the impact of measures introduced.  He shared the concern of the ACABQ that the report of the Secretary-General on human resources management lacked analysis with regard to progress achieved and problems encountered so far.

Delegation of authority must be accompanied with well designed lines of accountability, he continued.  The reports before the Committee did not provide concrete information in that regard.  The Assembly had called for the establishment of a robust monitoring system in the OHRM for the monitoring of all relevant activities to ensure compliance with recruitment, placement and career development procedures throughout the Secretariat regardless of the source of funding.  The Group was concerned over the observation of the Advisory Committee that not enough attention had been given to setting criteria to monitor the quality of decisions by programme managers, rather than merely quantifying mechanical adherence to procedures as measured by raw statistics.

On mobility, he noted that the first expiration of post occupancy limits in 2007/2008 was fast approaching.  Many issues were still unresolved.  For example, there was neither a clearly defined strategic plan with indicators, benchmarks and timelines, nor clearly established criteria for mobility.  Mobility should not be used as an instrument of coercion against staff.  It was also necessary to ensure that lateral mobility did not negatively affect the continuity and quality of implementation of mandated activities.  In that regard, the Group was concerned about the outward mobility from the United Nations Office in Nairobi.

Welcoming the reduction in the time period for selection of staff, he called for its further reduction to 120 days in accordance with resolution 57/305.  Information should be provided on the time period and measures followed by the Secretariat from the selection of candidates to the actual filling of posts.  As for the proposal to reduce the number of days required for advertising vacancies, it addressed only one element of the process, while neglecting the others.  The proposal would not substantially contribute to reducing the actual selection time.  The Group also remained concerned over the weaknesses regarding staff selection and the utilization of the Galaxy.

Another source of concern, he added, was the issue of transparency and application of predetermined criteria in the selection of candidates through that tool, as well as selective use of generic job profiles and evaluation criteria when selecting applicants.  Central review bodies were not involved in qualitative evaluation of the managers’ decisions and unable to monitor their adherence to the principles of equitable geographical distribution and gender balance.  Also, it was difficult for some developing countries to participate in the recruitment process through electronic means.

Continuing, he requested further clarification on the implementation of the Secretary-General’s proposals on contractual arrangements and said that concerns on the conversion from 300 to 100 series appointments deserved detailed consideration by Member States.  The Group was concerned over the finding of the Board of Auditors concerning numerous problems associated with the hiring of consultants and individual contractors that could have been addressed, since the Assembly had adopted various requirements and guidelines in that respect.  As for the increasing re-employment of retired staff, the lack of proper succession planning not only resulted in providing a distorted picture of the existing human resources environment, but also impacted negatively on the rejuvenation of the Organization.

He said that reform should enhance the productivity and the quality of the Organization’s work and should not lead to a reduction of staff or budget.  It should not negatively affect the morale and motivation of staff members and, in turn, their commitment to the Organization.  On the common system, he stressed the importance of the independent nature of the International Civil Service Commission (ICSC).  The Group highly valued the work of the Commission as a subsidiary expert body to the General Assembly, dealing with the conditions of service in the common system.

NONYE UDO (Nigeria), speaking on behalf of the African Group, associated her delegation with the statement made by the representative of Qatar on behalf of the Group of 77 and China.  She concurred that a number of the Groups’ concerns and decisions had not been implemented and called on the Secretariat to expedite action on those outstanding issues.  She also concurred with the ACABQ opinion that there was a need to strengthen the accountability framework in the implementation of human resources policies to ensure results.

The African Group remained the only regional group that continued to be visibly under-represented at programme management levels, and concerning gender parity within the United Nations Secretariat.  While the region had well qualified people that could be appointed to senior management positions, that was not reflected in the appointments made by the Secretariat.  The Group had repeatedly raised that issue and asked again what proactive measures would the Secretariat put in place to rectify the situation.  She added that due attention should also be paid to equitable geographic distribution when addressing gender parity.  Of the 86 women hired between July 2003 and June 2004, only six of them were Africans, and only one of them was at the D-1 level.

Similarly, although the General Assembly had repeatedly requested that vacancies be filled expeditiously, vacancy rates at duty stations in Africa remained unacceptably high.  The African Group asked how, in concrete terms, would those rates be brought down to the barest minimum.  One proposed solution to that chronic problem included the introduction of mobility as a sine qua non for promotion.  However, as noted by the Office of Internal Oversight Services (OIOS), the number of staff members moving geographically had not changed significantly and duty stations with chronically high vacancy rates had not yet benefited from the new policy.  The African Group was concerned that there were still pervasive deficiencies in staff understanding of the new mobility policy.  The Group reiterated paragraph 49 (d) of resolution 57/305 that there should be a clear differentiation between mobility within duty stations and mobility across duty stations, and the latter should be a more important factor in career development.  The Group further hoped that, with mandatory mobility scheduled to become effective in 2007, that issue would be permanently resolved, and asked the Secretariat to develop a clearly defined strategic plan with indicators, benchmarks, and timelines to implement that policy.

The Group also touched on concerns regarding staff selection and the Galaxy support tool. In further implementation of the Galaxy tool, adequate consideration must be given to the limited access African States had to information technology.  The Group reiterated that hard copies of vacancy announcements should continue to be distributed to Member States, with the exception of those who indicate otherwise.  The rigorous application of delegation of authority to programme managers, the limited use of central review bodies, and the mechanical adherence to procedures, along with the lack of qualitative monitoring mechanisms, had eroded confidence in the selection and recruitment process.  That had contributed to a deterioration of staff/management relations, leading to frustration and confrontation.

She said the Group agreed broadly with the observations of the ACABQ that the average time required for staff selection was too high, at about 375 days.  The findings, observations and recommendations of the OIOS on the impact of human resources management reform were also of great interest to the Group.

ANDREW BEGG (New Zealand), also speaking on behalf of Australia and Canada, said that, in the consideration of human resources management, the starting point for the delegations he represented remained Article 101 of the Charter, which said that “paramount consideration in the employment of staff ... shall be the necessity of securing the highest standards of efficiency, competence and integrity”.  Indeed, the effectiveness of the United Nations depended heavily on the quality and performance of its staff.  In recent years, the delegations he represented had consistently supported efforts to modernize and reform the human resources practices within the United Nations, including through the common system.  A landmark in those efforts was resolution 55/258, by which the Assembly had approved a raft of reforms aimed at improving the practices of the United Nations.  Much more remained to be done, however, before the United Nations would have a modern and effective human resources framework, placing a premium on merit and performance.

Among his predominant concerns, he mentioned the negotiation of a resolution that would advance the process of reform.  He appreciated the reports of the Secretary-General, the OIOS and the ACABQ, all of which pointed to the need to continue cultural change, allow sufficient time for the reforms to have their full impact and make refinements where experience had revealed problems.  Accountability should be a particular focus of discussions, since the system of delegated authority to programme managers, with appropriate accountability, lay at the heart of the reforms adopted four years ago.  He was interested in the potential for improving the contents of human resources action plans and the means used by the Secretary-General to ensure that programme managers were held accountable for achieving their goals.

Turning to staff selection, he supported the proposal to reduce the period for submitting applications from 60 to 45 days.  However, that alone was not sufficient for addressing the continuing long delays in filling vacancies or the lack of succession planning.  He was also interested to know how Galaxy could be improved.

One of the unfinished pieces of reform was a decision on the contractual arrangements, he said.  While attracted to the proposal to establish three types of contracts for the Secretariat, he believed that, before taking a decision, it was necessary to better understand how the proposal related to contractual arrangements in other common system organizations and to the work of the ICSC.  It was necessary to further discuss the transitional arrangements, as well.  He was also supportive of the Secretary-General’s proposals to create more opportunities for the advancement of qualified General Service staff into the Professional category.

The principle of merit was at the foundation of the human resources system, he continued, but the staff of the Organization should also reflect the diversity of the Member States.  Women should be equally represented in the Secretariat.  The statistics on geographical distribution showed continuing improvement in the past decade.  Nonetheless, aggressive recruitment campaigns and close coordination were needed to help the small number of States that had been substantially under-represented for a sustained period.  The Secretary-General could also do more to appoint women to senior posts.  Most practical measures were needed to improve the representation of women.

Another concern was the lack of young people in the Secretariat, he added.  In that connection, it was important to re-evaluate the levels of posts that became vacant, with a view to creating more P-2 and P-3 openings.  The selection criteria must truly measure the capacities of applicants.  Turning to peacekeeping, he appreciated the need for longer than four years’ service for mission management, the need to be able to attract and retain personnel, and the inconsistency of conditions of service in the field.  However, the ACABQ had pointed out that the proposed solution was only a partial one, since it did not ensure consistency of conditions between staff employed by the Secretariat and those employed by the funds and programmes.  The ACABQ also raised the question of whether peacekeeping service merited its own distinct contractual package.  During informals, he hoped to explore a comprehensive solution to that problem.

Mr. AL-MANSOUR (Kuwait) supported the position of the Group of 77 and China, and said that the staff were one of the important pillars of the Organization.  He agreed with the Secretary-General that reform of human resources should ensure better effectiveness of the United Nations and enable it to face the challenges of the day.  The reform was aimed at developing the capabilities of the staff towards a more productive and efficient Organization.  He also shared the concern of the ACABQ that the report of the Secretary-General on human resources management reform was rather generic and did not undertake an accurate analysis of the situation.  The reform was a continuing process and must take into consideration equitable geographical distribution in recruitment, as well as the need to ensure gender balance.  He commended the efforts to achieve better geographical representation, but some under- and unrepresented States remained.  He called on the Secretariat to further reduce those figures.  He was most delighted that Kuwait was represented by one staff member in a high executive position and hoped that more would attain employment with the Organization.  High-level positions should not be the prerogative of developed States.

Introduction of Reports on United Nations Pension System

The Chairman of United Nations Joint Staff Pension Board, ANTONIO BUSCA, introduced the Board’s report on the United Nations pension system (document A/59/9).  The report provided information on the global operations of the United Nations Joint Staff Pension Fund, which currently consisted of 20 member organizations.  The main issues considered were related to the investment of the assets of the Fund; actuarial valuation of the Fund as at 31 December 2003; the financial and administrative arrangements of the Fund; and the structure of benefit provisions.

He noted that last year attention was drawn to the diverging views between the Fund and the OIOS on the internal auditing of the Pension Fund.  Thanks to the intervention of the ACABQ, the climate had changed and the auditing function was now operating efficiently.  While external auditors had proposed establishing an audit committee of the Board to assist the internal auditing of the Fund’s operation and activities, the Board had expressed reservations.  The Fund was asked to prepare a substantive document on the subject for the next session of the Standing Committee in 2005.

Much of the Board’s discussion focused on the results of the actuarial valuation as at 31 December 2003, which confirmed once again that the Fund was in a strong and solid financial position, with a surplus now established at 1.14 per cent of pensionable remuneration.  That marked the fourth consecutive positive actuarial result over the last decade.  After operating for about 60 years, the Fund presently was reaching financial maturity.  However, because actuarial results were influenced by variations of investment markets and currency fluctuations, prudent use of the actuarial surplus was recommended.  The Board, therefore, decided to preserve a margin of about 1.0 per cent of the actuarial surplus as a cushion, leaving some .14 per cent of pensionable remuneration that could be used to redress benefit inequities.

The Board also approved additional resources required in the 2004-2005 biennium for $5.34 million, an amount related primarily to the 16-year lease for the Secretariat’s new accommodation.

The Under-Secretary-General for Management, Ms. BERTINI, then introduced the report of the Secretary-General on the investments of the United Nations Joint Staff Pension Fund (document A/C.5/59/11), covering the two-year period from
1 April 2002 to 31 March 2004.  She was pleased to note the significant progress made in investments, management and in reforms.  During the biennium covered, the market value of the Fund’s assets increased to $26.6 billion on 31 March 2004 from $21.8 billion two years prior, an increase of 22 per cent.  As at yesterday, the market value of the Fund was at its highest point ever –- $27.24 billion.  The major contribution to performance during the biennium came from bonds, with a return at 21.9 per cent.  The biennium ending at 31 March 2004 was a period in which the markets performed very well as a whole, but remained volatile.  But the performance of the Fund’s investments had turned around.

The Pension Fund was unique among major pension funds in its commitment to global investment and diversification of its assets in terms of currency and geographical areas.  In terms of geographical diversification, the proportion of the Fund invested in North America declined to 43.3 per cent in March 2004 from 49.4 per cent two years before.  In Asia and the Pacific, the proportion of investments increased by 0.7 per cent during the same period.  The Fund also continued to pay attention to development-related investments during the last biennium -- with direct and indirect investments in developing countries amounting to $1.7 billion at cost value on 31 March 2004.  That represented an increase of $600 million –- or about 55 per cent –- from two years ago.

She also noted that the Secretary-General had asked her to make the United Nations a “leading example of responsible corporate citizenship” in its administrative and investment practices.  In that regard, they were doing a qualitative analysis on corporate approaches to environmental and social issues in making investment decisions.  They would formulate an appropriate investment policy for the Fund that incorporates sound investment strategies in terms of the Global Compact principles, as well as fully exercising the best practices of sound fiduciary responsibility.

In closing, she mentioned the names of several candidates put forward by the Secretary-General as new or continuing members of the Investments Committee.  They looked forward to the General Assembly’s review and approval of those candidates.

The Co-Chair of the ACABQ, RAJAT SAHA, then introduced the ACABQ’s report on the United Nations pension system (document A/59/447).  The Advisory Committee, while noting positive investment performance over the reporting period, continued to emphasize that all investments of the Fund must meet the criteria of safety, profitability, liquidity, and convertibility.  That investment policy had been advocated repeatedly by the Committee, the Pension Board, and the General Assembly.  The ACABQ recommended approval of the revised 2004-2005 budget estimate for administrative costs of the Fund.  However, it also registered concern about the upward trend in administrative expenditures of the Fund and would revert to that issue when considering the administrative budget proposal of the Fund for the 2006-2007 period.

Statements on Pension Fund

TOM REPASCH (United States) recalled that last summer he had represented the Fifth Committee at the meeting of the Pension Board, hosted by the International Civil Aviation Organization (ICAO) “in the beautiful and exciting” city of Montreal, Canada.

He noted with great satisfaction that in the first quarter of 2004, the Fund’s market value had reached an all-time high of $27.1 billion.  The Fund’s annual return for the year ending on 30 March had even outperformed the established benchmark by a slight margin.  That performance came as a great relief compared with the losses reported two years ago.  Such results could only be achieved with sound long-term financial planning and strong management, and he expressed his appreciation to those who had helped to provide them.  He was also pleased that the Secretariat had begun to deal with the problems that had adversely affected the Investment Management Service.  He welcomed the new Director and trusted that the findings and recommendations by the Board of Auditors and the OIOS would be addressed expeditiously.

Turning to the actuarial situation of the Fund, he said that although the actuarial value had once again shown a surplus, that was the third straight decline in the level of the surplus.  While any surplus was better than a deficit, it was no time to consider benefit enhancements or other proposals that could sap the Fund’s resources.  Thus, he supported the position of the Committee of Actuaries that it would be prudent to maintain “most of the surplus” to ensure long-term success of the Fund.  The Assembly, in resolution 53/219, had also made it clear that the Pension Board should continue to monitor closely the evolution of the actuarial valuation and that there should be no change in any feature of the Fund, unless and until an upward pattern of surpluses emerged in future valuations.  He would expect that the Board would refrain from considering benefit enhancements until that condition was met.

The Board had recommended that the Pension Adjustment System be amended to provide a minimum guarantee for beneficiaries who had decided to receive their benefits in local currency, he continued.  While understanding the good intentions behind that recommendation, he believed such a change was unwarranted.  The Fund should not and could not provide protection against currency devaluations and other risks to those who had opted to leave the dollar track when it was in their interest to do so.

Since the working group created to study ways to make representation on the Board more equitable had not yet completed its work, the Board should consider its size and compensation based on broader principles of efficiency and good governance, rather than “urges to increase the number of members and alternates”.  The tripartite structure of the Pension Board should be maintained.  He also took note of the appointment of a new team from the OIOS and expressed pleasure that the conflict that had entered into the Committee’s discussions over the past two years had been replaced by professionalism and cooperation.  Most indicative of that change was the internal audit charter, which formalized the relationship among management, internal auditors and the governing body.  On the Board of Auditors’ report, he supported the Pension Board’s position on the audit recommendations.  In particular, he looked forward to the Pension Board’s response to the recommendation to establish an audit committee.

SANTIAGO WINS (Uruguay) focused on the adjustments to pensions after award, expressing concern over the situation of retirees under a two-track adjustment system.  It was clear from paragraphs 172 to 183 of the Board’s report, and the presentation today, retirees from certain countries, particularly in Latin America, had been deeply hurt by the devaluation of currency in their countries.  In certain cases, after contributions in dollars had been made for many years, pensions increased by hardly $150.  That was a serious problem for a number of people who had worked at the United Nations for many years.  The two-track adjustment system was a distortion, which created deep inequalities in the system as a whole.  Accordingly, he supported the proposal of the Board contained in paragraph 182 of the report that the system be amended to provide for an adjustable minimum guarantee at 80 per cent of the United States dollar–track amount, to become effective as from 1 April 2005, on a prospective basis.

CHRISTOPHER FITZHERBERT HACKETT (Barbados) noted that it was important to have the best governance within the Pension Board.  His delegation had been supportive of the recommendations made by the working group established by the Board, which suggested including more retirees.  His delegation encouraged the Board to take into account the fact that the number of retirees was increasing, and that group had experience relevant to the workings of the Board.

Mr. TAL (Jordan) raised the issue of the late issuance of documentation, noting that documents related to the pension system appeared to be available only yesterday -– which did not comply with the six-week rule, or four-week rule, or any other rule that had to do with issuing documentation.  Considering the time difference between New York and many capitals, with Fridays off there, and offices closed here on Saturday and Sunday, there were only four days every week for consultations and feedback on agenda items.  The small amount of time delegates had to study the documents would compromise the quality of their discussions and of the resolutions produced.

The CHAIRMAN said he was very conscious of the problem and fully shared the sentiments expressed by the representative from Jordan and many other colleagues. He was continuing discussions with colleagues in the Secretariat on how to improve the situation.

NORMA ELAINE TAYLOR ROBERTS (Jamaica) referred to the situation with investments in developing countries.  She was pleased to see an increase in both direct and indirect investment in the past biennium.  While mindful of the fact that investments needed to be secure, with as little risk as possible, she urged the Pension Fund to seek further investment possibilities in developing countries.

Ms. UDO (Nigeria) supported comments by Jordan concerning documentation.  She did not understand how the Committee intended to proceed, provided the Chairman of the Pension Board could not be here tomorrow morning.  She expressed appreciation for the presentation of the matter, but regretted she would not be able to make a substantive statement, since her delegation had had no time to study the reports.  She expressed satisfaction that the market value had reached an all-time high and took note of increasing investments in the developing countries.  Comparing that investment with the total amount of the Fund, however, one could say there was still room for improvement.  Several investments had been made in Africa, and she reiterated that there were a lot of countries in Africa, including Nigeria, where investments should be made.

Responding to comments and questions from the floor, Mr. BUSCA of the Pension Board first noted the concern expressed by the representative of the United States regarding the recommendation that the Pension Adjustment System be amended to provide a minimum guarantee for beneficiaries who had decided to receive their benefits in local currency.  He explained that the adjustment would be a very limited measure taken to support countries facing very steep depreciation.  That measure was assessed by the Secretary of the Fund and had received support from the Committee of Actuaries, which was the body that should drive any change that may be taken by the Board.  He also responded to the representative of Barbados to assure him that the Board would try its best to make sure that retirees would be a factor in its membership.

Additional Statements on Human Resources Management

Before calling on representatives to speak on that issue, the CHAIRMAN informed colleagues that three United Nations staff members had been kidnapped in Kabul.  He expressed the Committee’s sympathy and solidarity with those staff members and their families.

Mr. TAL (Jordan), supporting the statement made by the representative of Qatar on behalf of the Group of 77 and China, also noted that the delay in issuance of documentation on this item prevented his delegation from giving the reports sufficient study, commensurate with the utmost importance Jordan attached to the subject of human resources management reform.

His delegation was particularly attached to the special importance of equitable geographical representation of posts at the United Nations.  Equitable geographical representation at the Organization would not be achieved as long as the posts subject to geographical distribution remained limited.  The improvement noted by the Secretariat was not up to the desired level and did not reflect the real international character of the Organization, particularly with regard to the representation of developing countries in senior management positions, which had decreased between 2000 and 2004.  That decrease was accompanied by a significant increase in the number of countries that were over-represented at the United Nations, which went from 12 to 21 in 2004.  His delegation believed it was absolutely imperative to take stock of the reasons for that situation.  Moreover, the system of desirable ranges did not achieve the objectives for which it was established, and it might appropriate to reconsider that system.

On the report of the Secretary-General on reform of human resources management, he pointed out that the period needed to fill posts was an average of 174 days, and that high vacancy rates remained a problem at various departments, field missions, and centres.  It would have been better for the Secretariat to make proposals aimed at reducing the overall period for evaluating applications.  They, therefore, rejected the proposal made by the Secretary-General to reduce the vacancy announcement period from 60 to 45 days.  His delegation felt that not only would such a change have negative repercussions for applicants, but that it was an effort by the Secretariat to cover up its own weaknesses and shift responsibility to the Member States.

While his delegation supported the general direction of the OHRM to consolidate and simplify existing contractual arrangements, there was a need to ensure that new procedures would not impact on the staff negatively, and would not affect their career development or retirement benefits.  He noted that in the report of the Secretary-General, it was mentioned that the Secretariat had the “right” to terminate contracts in the interests of the Organization.  His delegation believed that that contradicted the Secretariat’s claim that it was anxious to provide job security for all staff.

Finally, his delegation expressed reservations about the proposed conversion of 100 and 300 series appointments.

ZHANG YISHAM (China) supported the efforts of the Secretariat to reform human resources management.  Progress had already been achieved in such areas as introduction of the new staff selection system, streamlining of policies and rules and introduction of mandatory managed reassignment of junior professional staff.  The overall effect of the reform, however, fell short of the expectations.  Also, some problems that had emerged in the reform process were yet to be resolved.  He hoped the Secretariat would intensify and speed up its work in implementation of the relevant resolutions of the Assembly.

For the majority of developing countries, under-representation was still a problem, he continued. The share of nationals from developing countries at the D-1 grade and above had declined from 48.5 per cent in 2000 to 44.7 per cent in 2004.  China’s under-representation was particularly egregious, with the number of its nationals in substantive departments steadily declining and concentrated in low-level posts.  In some departments, including the Department of Political Affairs, China was unrepresented.  He called on the Secretariat to take measures to ensure that there was fair representation of nationals from developing countries at the senior and policy-making levels.  He also called on the OHRM to study ways of resolving the problem across departments and levels.

Turning to career development for the G-level staff, he said that the maintenance of a professional team with a reasonable age structure was the basis for sound succession planning.  It was also essential to increase the vitality of the international civil service.  China was concerned at the lack of improvement in the age structure of the Secretariat.  Its optimization should be a priority task of the management.  It was important to undertake a serious study of the question and present concrete plans for consideration by the next General Assembly.  He understood the aspirations of the General Service staff for career development and encouraged them to actively compete for positions.  But he also wanted to remind the Secretariat that close to 75 per cent of the people who passed the national competitive exams in 2003 were still waiting to be recruited.  The enthusiasm of those young talents also needed to be taken into account.

On contracts, he supported flexible, balanced and performance-oriented arrangements, as well as a gradual reduction in the number of permanent appointments, an expansion in the number of fixed-term appointments and tightening of conditions for continuing appointment.  The Secretary-General’s proposal of granting continuing appointment after five years on fixed-term contracts, upon the completion of a one-time review, was too generous and did not truly reflect the requirement for performance management.  The Secretariat needed to revisit the issue, in close coordination with the ICSC.

Regarding civilian staff for field missions, he said that the problems described in the reports should be addressed on an urgent basis.  He called on the OHRM to focus on solving existing procedural and substantive issues in its effort to better monitor recruitment by the Department of Peacekeeping Operations.  He also encouraged the Department to enhance recruitment efficiency by using online recruitment tools offered by the improved Galaxy system.  He welcomed closer contacts between the departments concerned and Member States to help develop a civilian standby capacity.

FAWZI BIN ABDUL MAJEED SHOBOKSHI (Saudi Arabia) stressed the importance of the human resources management issue, adding that continued delay in the issuance of reports was of great concern to his delegation.  He fully supported the statement by Qatar on behalf of the Group of 77 and China.  Clear job descriptions for Directors and an effective accountability system to accompany the delegation of authority were of great importance.  It was also necessary to improve the situation of under- and unrepresented countries.  Nationals of developing countries must get a fair share of posts, particularly at the senior level.  He hoped that his country would get posts proportionate to its contribution to the budget of the Organization.  He also proposed to set aside 10 per cent of geographical posts for under- and unrepresented countries until a fair share of employment was achieved.

Continuing, he commented on a significant increase in the Organization’s activities, including field activities for technical cooperation, humanitarian support and peacekeeping.  In that connection, he supported the efforts to improve placement, recruitment, mobility and contractual arrangements of staff through new programmes to strengthen the work of the Organization and allow it to respond to today’s challenges.  Reduction of appointment time was a positive step, but it was not sufficient, for it was important to reach the benchmark of 120 days. 

His delegation advocated the machinery to evaluate managers by the staff and introduce peer reviews on ethics, integrity, accountability and respect for diversity.  He also urged the implementation of Joint Inspection Unit (JIU) recommendations to provide information on vacancies in the Economic and Social Commission for Western Asia (ESCWA) in Arabic.  The OIOS had remarked in document A/59/152 that, despite the fact that additional resources to monitor the peacekeeping operations practices of delegating authority for appointments, such monitoring was weak.  Further, the Galaxy was unable to provide for continuous monitoring, for it was not used in appointing international civilian personnel in field missions.  That was a source of concern to his delegation.  He urged the Department of Peacekeeping Operations to continue working on a global strategy to provide staff for field missions and streamline appointments, diversifying the pool of applicants. 

Continuing he expressed appreciation for the initiative to appoint a staff member to supervise appointments of candidates from under- and unrepresented countries, recommending that his competence should include appointments at P-2 and P-3 level, as well.  Recruiting nationals from under- and unrepresented States was a priority for developing countries.  Chiefs and managers must be accountable for improving geographical representation in their units.

Commenting on a huge increase in the number of applications through Galaxy, he suggested that it was necessary to contemplate approaches that would lead to speedy examination of applications in an objective manner.  His delegation supported the recommendation of the OIOS to increase the resources for training and career development.  He also supported the recommendations related to the need not to use or limit the use of consultants.  In that connection, it was important to assign priority to the need to develop and hire specific talents needed by the Organization.  Information technology should play an important role in that regard.  He also supported the mobility policy, which could help the Organization to accomplish its tasks.

MARIA ROSARIO C. AGUINALDO (Philippines) associated her delegation with the statement made by Qatar on behalf of the Group of 77 and China.  The Philippines attached high importance to the agenda item on human resources management, as the staff was the most important asset of the Organization.  Placement should be based on merit.  Noting the progress made in reducing the time to fill vacancies, her delegation would like to see further improvements in that regard.  She also emphasized the importance of mentoring arrangements.

On gender balance, though some progress had been achieved, she expressed concern over the slow progress of women’s representation from developing countries, especially at senior posts.  On a related issue, she noted that a large number of General Service staff were women, and said their concern for upward mobility should be addressed.  Her delegation, therefore, supported the proposal of the Secretary-General to raise the percentage of P-2 posts available to General Service staff who pass a competitive examination.  That would motivate the staff to continually improve themselves.

NGUYEN DINH HAI (Viet Nam), associating his delegation with the statement made by the representative of Qatar on behalf of the Group of 77 and China, noted that the issue of human resources affected the working life of all staff in the Secretariat, as well as the Organization’s fulfilment of its mandate.  The reform effort was an ongoing process, and there were always areas in management that needed improvement.  The reform efforts should lead to a comprehensive system of recruitment, placement, and promotion; better geographical distribution and gender balance; a transparent system of authority; and an effective system of administration and justice, among other reforms.

His delegation shared the ACABQ’s concerns over staff selection and welcomed efforts made to reduce the average time for selection.  Regarding gender distribution, while taking note of the progress achieved, he hoped that the 50/50 goal would be realized in the future.  His delegation shared the views of the ACABQ regarding mobility, and hoped efforts to improve geographical representation would continue.  He shared the view that rejuvenation of the staff had not been given enough attention and hoped to see more young people selected in the near future.

ANDREY V. KOVALENKO (Russian Federation) said that the human resources management reform should foster the achievement of the Organization’s goals and increase its effectiveness, while also promoting the most rational use of resources.  Clear interaction and distribution of roles between the Secretariat and MemberStates was needed, with a clear understanding of the leading role of Member States in that regard.  Unfortunately, recently there was more and more of a trend for the Secretariat to exceed its prerogative and take decisions without authorization from intergovernmental bodies -- whether that concerned interpretation of such basic documents as Staff Rules and Regulations, or the establishment of a Senior Management Service.  He intended to deal with the latter in more detail when he took the floor on the common system, but the question of establishing a service fell exclusively within the competence of Member States, especially considering that the Assembly had already considered the issue and decided to return to it at a later stage.

Continuing, he said that the proposal on new contractual arrangements was moving the Organization towards employment on a continuous contract basis, which was essentially a quasi-permanent contract system.  Such practices ran counter to the experience of national services, which were introducing a transition to fixed-term contracts, not to speak of the private sector.  Contracts should provide as much flexibility as possible in terms of human resources management.  He also had doubts regarding the rationality of keeping staff on probation during fixed-term contracts and letting them take a claim on permanent arrangements at the end of five years.  As for the use of 100 and 300 series arrangements, the Secretariat had not presented any serious or creative alternatives in that regard.  He had doubts regarding the desirability of the proposed approach, and the Committee should seriously consider the ACABQ recommendations on preparing separate contractual arrangement for the needs of field missions.

He also supported the ACABQ on the need for the General Assembly to approve fundamental aspects of mobility policy.  His delegation could hardly agree with the introduction of compulsory mobility for each and every staff member.  If moved to other duty stations, G-level employees would be automatically transformed into international staff.  That contradicted the very conception of that level of staff.  Instead, it was essential to stimulate mobility of senior staff, which would enable effective preservation and spread of institutional memory, experience and knowledge.  The issue of mobility required the concentrated attention of the General Assembly.

He added that he was impressed by a number of other ACABQ recommendations, including those on the reduction of the average age of staff.  Regarding geographical representation, he proposed extending the base of posts subject to geographical distribution by including posts in the peacekeeping missions and non-budgeted posts, as was already done in a number of international organizations.

In conclusion, he expressed fundamental disagreement with the OIOS report on the availability of technical skills in local markets and the conclusions of the OIOS regarding staff in the language service typing pools.  Any strategy for the selection of staff in countries where specific languages were notState languages, with consequent lack of training and skills, would inevitably lower the quality of language services.  Apart from that, he noted the existence of an inadmissible practice of “pseudo-local selection”, when, for purposes of economy, staff living thousands of kilometres away from a certain duty station were taken on under local conditions.  He requested the Secretariat to look into that practice, since it distorted the picture of availability of skills in local markets.

PUREVJAV GANSUKH (Mongolia) noted the efforts to consolidate and expand human resources management reform.  The Organization had greatly benefited from its implementation of the reform, but more should be done in the years to come.

Turning to the issue of equitable geographical representation, he insisted that more concerted efforts were needed in that regard.  The Assembly had adopted several resolutions on the issue, but the situation had not improved over the past period.  At present, 15 countries were not represented at all and many others were under-represented or below the mid-points of their respective ranges.  The total number of Mongolian nationals was still below its mid-point.  The Secretariat needed to redress the situation by extending a preferential selection to candidates from un- and under-represented Member States.

On recruitment of personnel through the national competitive exams, he noted that the number of countries invited to participate in such examinations had almost doubled in the past three years, reaching 62 in 2004.  However, many successful candidates were waitlisted or never given the opportunity to work for the United Nations.  He welcomed the proposed “fast-track” recruitment procedure for candidates from unrepresented and under-represented countries to posts at the P-4 level and above.  He also supported the establishment of a focal point for the purpose of recruitment at the P-5 level in the OHRM and national focal points, as well as proposed actions to improve gender distributions in the Secretariat.

BENJAMIN GARCIA (United States) said that the reports before the Committee demonstrated a commitment by various human resources stakeholders, staff, managers, and human resources professionals to make the United Nations a more efficient, responsive, and modern organization.  However, his delegation concurred with the ACABQ impression that staff/management relations had broken down over the issue of human resources management reform and called on both parties to make a concerted effort to work together in order to achieve common goals.  Managers should be involved in planning and executing their human resources action plans to properly identify their work force needs, train and evaluate staff, and provide effective career advancement and mobility.

On the issue of recruitment, he reiterated his delegation’s support for efforts to integrate recruitment, selection, broad geographic representation, gender parity, and mobility into human resources planning and management.  While the period of time to fill a vacancy had been reduced from 275 days in 1999 to
174 days currently, further improvements were needed.  His delegation supported the proposal to reduce the number of days a vacancy must be advertised from 60 to 45 days. The Galaxy system had revolutionized the way the United Nations recruited applicants and selected the best qualified candidates.  As recommended by the OIOS and the ACABQ, his delegation encouraged the Secretary-General to promote and expand Galaxy’s use.

Regarding geographic distribution, he noted that the trend in reducing the number of un- and under-represented States had recently slowed, while the number of over-represented States had increased.  His delegation called on the Secretary-General and Member States to work together to address that issue, including establishing greater accountability by managers for achieving United Nations hiring goals.

Gender parity continued to be a problem at the most senior levels.  His delegation urged Member States to support United Nations efforts to increase the percentage of women in professional and decision-making positions by identifying and encouraging more women to apply, and by nominating more women candidates.  The possibility of 1,689 vacancies within the next five years presented an opportunity for the Organization to make progress toward parity.  The United States supported the simplification of contractual appointments and welcomed the input of the International Civil Service Commission on that issue.

His delegation continued to be concerned about the Organization’s practice of spending millions of dollars annually to hire consultants, contractors, and retired personnel rather than developing in-house resources to meet essential needs.  The Secretariat also needed to do more in the way of succession planning, especially given that retirements were highly predictable at the United Nations.  He agreed with the thrust of the OIOS report on the impact of human resources management reform and urged the Secretariat to expeditiously implement its recommendations.  He also concurred with its conclusion that United Nations managers must be held more accountable for their actions.

Lastly, regarding the request to convert appointments of substantial numbers of peacekeeping staff, his delegation questioned whether the proposal would meet the short- and long-term needs of the Organization.  He also expressed the concern that other entities in the United Nations Common System had developed compensation packages that were inconsistent with the Common System.  That said, they could not ignore the immediate need to address the contractual arrangement for staff who have reached or are about to reach the limits on United Nations employment under the 300 series, and would pay close attention to the discussion of the issue during the informals.

SHOZAB ABBAS (Pakistan) said the effective management of human resources was the key to making the Organization more efficient and relevant to the demands of these times.  While those discussions provided a useful and timely opportunity to review the progress made in implementing the reform package adopted four years ago, their task would have been facilitated if the required documentation had been made available on time.  His delegation agreed with the ACABQ opinion that it was time to analyse what had been achieved, what had not worked and why, and what must be done to expedite the process and achieve further success.

The Galaxy staffing system was an important tool in human resources management, but it was important to know how the system had contributed to recruiting competent staff for the Organization, and how was the large number of applicants being processed while fulfilling requirements of merit and transparency.  Also, why, despite heavy investments in that information technology-based recruitment system, had there not been a corresponding decrease in the timeline for filling vacancies at Headquarters and in peacekeeping missions?

His delegation was pleased to learn that the representation of un- and under-represented Member States had improved, but noted that the principle of equitable geographical distribution was restricted to a limited category of the total staff strength of the Secretariat.  His delegation hoped that the new staff selection system would facilitate better representation of developing countries in the Secretariat, and also urged a higher level of women’s recruitment from developing countries in the professional and higher categories.

Turning to contractual arrangements, Pakistan shared the view expressed by the Group of 77 that more information was needed on the implications of the Secretary-General’s proposals.  His delegation also supported the opinion of the ACABQ that not enough measures had been taken to ensure management responsibility and accountability.  He urged the Secretariat to delineate a clear and well designed mechanism of accountability and an effective monitoring and evaluation system for the programme managers.  He also noted that horizontal and vertical mobility must be part of a comprehensive career development system, with the provision of appropriate training wherever necessary.

ALMABEK DEMESSINOV (Kazakhstan) emphasized the importance of continued implementation of an integrated human resources management reform and said that he was pleased to note that special attention was given to the new system of staff selection, appointment and promotion.  While progress had been made, it was important to undertake serious analysis of the achievements so far.  Serious attention should be given to the opinion of the staff representatives.  He regretted the fact that disagreements on the reform had arisen between the administration and the staff.  However, the search for possible solutions must not affect the conceptual basis of the reform. 

Continuing, he expressed concern over the conclusions of the ACABQ on the difficulties experienced in connection with the introduction of a new selection system.  The difficulties attributed to the Galaxy were mostly of technical nature.  Those should be resolved, taking into account the feasibility of future use of the system.  He agreed with the ACABQ that criteria for electronic “filtering” of applicants must be clear and transparent to all.  He supported the proposal to rationalize the process by reducing the time of application for announced vacancies from 60 to 45 days.

The issues of General Service staff promotion to the Professional category and national examinations were of immediate importance to his country, which was one of the under-represented States.  In that connection, he was seriously concerned over the consequences of expected transition from the point of view of geographical representation.  As was clear from the documentation, proposed changes would lead to an almost twofold increase in the number of overrepresented States.  He would like to see a more balanced picture in that regard, based on an increase of Member States within the framework of determined quotas, primarily due to continued reduction of the number of under- and unrepresented States. 

CIHAN TERZI (Turkey) said that the general framework of the reform had been already defined by the Assembly and he was glad to see the progress already made.  He fully agreed with the ACABQ that such a broad-based reform must be accompanied by close cooperation and consultation between staff and management.  Thus, creation of a common understanding, participation and a sense of ownership through open access to management and decision-making at multiple levels could be helpful.  Resistance and reluctance of staff could endanger the success of the reform.  The process needed more energetic, enthusiastic and relentless efforts by all users.  He interpreted some of the ups and downs, the reform losing pace and delays in the implementation as fatigue, which would soon be overcome. 

Results-based budgeting and management, as well as a performance appraisal system, shaped accountability and transparency across the Organization.  Improvements in the staff selection system, implementation of mobility, streamlining of rules and simplifying of fragmented applications enhanced the robust and effective Organization culture.  However, since the process was changing the Organization’s culture and having an effect on the way of thinking and doing tasks, the side effect of fatigue could be expected.  Necessary remedies should be implemented to curb the side effects.  The most important remedy would be rewarding the achievements and improving the living and working conditions of personnel.  Rejuvenation of staff was of great importance.  It was incumbent on Member States to create the best working environment in the Organization to attract, develop and maintain staff of the highest calibre. 

When employees had a more stable and secure job environment with competitive pay and benefits and relatively longer contracts, they sensed strong psychological ownership of the Organization.  Under those conditions, they were more likely to be committed and dedicated to the United Nations.  In that respect, suitable classification of contracts and jobs would be of significant importance. 

Disparity in the treatment of the conditions of service in the field was a matter of serious concern, he continued.  It was necessary to address that problem in a balanced manner.  As for the existence of under- and unrepresented countries after half a century since the inception of the United Nations, he found that hard to understand.  An utmost effort should be made to achieve an equitable geographical distribution.  Another important matter was the fact that the representation of women in the Professional and senior level had not improved as expected.  As an exemplary body, the United Nations must reach the goal of 50/50 gender distribution at all levels.

FRANK DAVIS (Bahamas) highlighted the issue of high vacancy rates, particularly in United Nations offices in developing countries.  The issue had long been a matter of concern for many delegations.  He was pleased to learn from paragraph 181 of the “omnibus” report on human resources management reform that the Secretary-General attached great importance to further reducing the vacancy rates at the regional commissions, including the Economic Commission for Latin America and the Caribbean (ECLAC).  That was of particular importance to his delegation.  It was troubling that the post of Director of the subregional headquarters for the Caribbean had been vacant for over a year now, especially given the important role that office should be playing in guiding the Commission through such important processes as the SIDS+10 and Millennium Development Goals review.  He requested an update on the Secretariat’s efforts to fill that post and other vacancies in the Commission.

AKIRA YAMAMOTO (Japan) recognized that management of human resources was of paramount importance to the Organization.

His delegation welcomed the proposals for improving geographical representation, as the issue of how to resolve the issue of un- and under-represented States was a longstanding problem.  His delegation wholeheartedly supported the Secretary-General’s proposal for a “fast-track” recruitment procedure, as well as the proposed establishment of focal points at the Secretariat and in the capitals to promote cooperation with the concerned Member States.  He recalled a General Assembly resolution that requested the Secretary-General to provide information not only on the development of programmes, however, but also in setting specific targets.  Japan wished to stress that setting specific targets was both important and necessary.

On increasing the number of P-2 posts available for the promotion of General Service staff, he expressed some concerns.  The Secretary-General’s proposal to increase the percentage of P-2 posts available for successful candidates in the G to P examination to 25 per cent from 10 per cent would mean reducing the appointments of successful candidates in the National Competitive Examination by the same amount.  The National Competitive Exam was one of the few measures that had succeeded in improving geographical distribution.  His delegation did not, however, wish to ignore the frustration felt by the Organization’s General Service staff.  The issue should be addressed by reforming the post structure and increasing the number of P-2 posts, rather than by heightening competition between the G to P examination and the National Competitive Examination over a fixed number of appointments.

On contractual arrangements, Japan proposed to defer consideration of the issue until the outcome of the discussion on the same subject by the ICSC became clear.  Similarly, regarding the use of 300 and 100 series appointments in staffing field missions, his delegation believed the issue should be taken up with the perspective of the United Nations Common System, which also would necessitate the involvement of the ICSC.  He requested information on the current situation of the redeployment of up to 50 posts, which the General Assembly had requested in resolution 58/270.

Finally, his delegation repeated its request for greater analysis of the problem of under-representation, noting that the provision of just the numbers in each category was insufficient.  An analysis of the level of under-representation of Member States by the Secretary-General should be the basis of discussion of the issue in the General Assembly.  Japan requested clarification from the Secretariat on the issue.

NAJIB ELJI (Syria) echoed the sentiment that the staff of the Organization were its most invaluable asset.  However, he noted the concerns expressed by the staff representatives in their report on the absence of a clear, frank, constructive dialogue between them and management.  He underscored their point that the reforms appeared as an end in itself and not a means for development.

His delegation supported the remarks of the ACABQ that human resources management should play an essential role as the guarantor of change and development.  He called upon the Office of Human Resources Management to again become a major engine for a consultative, transparent process with the staff of the Organization.  The current system still lacked sufficient transparency and accountability, which had weakened the morale of the international staff.

The mobility policy could be a two-edged sword.  If applied well, it could develop experience.  If applied badly, it could lead to lack of confidence and arbitrary or discriminatory treatment.  There was a lack of clear criteria for the system, and no details about its financial implications nor the consequent social and family problems.  If it were to become a mandatory policy for all, the staff of the language sections must be excepted.  Also, the language posts did not appear to be subject to geographical distribution.  He would like clarification from the Secretariat in that respect.

He noted that not one single Syrian had been appointed since 2000, and there were no Syrians at the Director level or above for a number of years.  Finally, he remarked that the OIOS had not corrected its mistake in listing countries according to political groupings, rather than in alphabetic order as required.

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