BUDGET COMMITTEE TAKES UP ACCELERATED STRATEGY FOR IMPLEMENTING CAPITAL MASTER PLAN

Sixty-second General Assembly

Fifth Committee

8^th Meeting (AM)

BUDGET COMMITTEE TAKES UP ACCELERATED STRATEGY

FOR IMPLEMENTING CAPITAL MASTER PLAN

2007 Report of International Civil Service Commission Also Introduced

Introducing a revised strategy for implementing the plan for the refurbishment of the United Nations New York Headquarters this morning, the Organization’s top management official said that it would lower the risk of an unanticipated escalation in the cost of construction.

The Under-Secretary-General for Management, Alicia Barcena, said that the accelerated capital master plan strategy would allow the Assembly and conferencing functions to remain in temporary facilities on the compound.  The library building would be used as swing space, and the whole Secretariat building would be emptied in one phase instead of four, thus requiring more office swing space off site.  However, the increased cost of swing space would be more than offset by the lowered cost of the renovation itself.  Work on the General Assembly building and Conference building on the North Lawn would be accelerated.

Responding to the presentation, the representative of Australia, who also spoke on behalf of Canada and New Zealand, expressed surprise over the presentation of an accelerated strategy to the Assembly 16 months after it had made a decision in June last year to pursue a phased approach to the renovations of the United Nations complex, and some 10 months after the adoption of the $1.8 billion budget of the capital master plan in December 2006.  At the same time, he agreed with the Advisory Committee on Administrative and Budgetary Questions (ACABQ) that the proposal was the best way forward, reducing many of the risks associated with the plan, especially with regard to the health and safety of staff.  Proposed completion of the project sooner than planned would reduce the chance of further cost escalation, as well as interruption to the work of the Organization.

Expressing similar surprise, several other speakers, including the representatives of South Africa, on behalf of the African Group, said that before endorsing the accelerated strategy, they would like to receive assurances that the costs would remain within the approved budget and that the quality of the work would be guaranteed.  The representatives of Portugal, speaking on behalf of the European Union, and the Dominican Republic, on behalf of the Rio Group, were among the speakers who stressed the importance of keeping the plan within the budget and financing schedule decided by the Assembly in resolution 61/251.

The representative of Pakistan, on behalf of the “Group of 77” developing Countries and China, noted that steps had not been taken immediately by the Secretariat to commence work on renovations after the Assembly had approved the budget for the plan, which was now one year behind schedule and $219 million over budget.

Among the actions that had undermined the Assembly’s decisions, the Group of 77 noted with concern the failure of the Department of Management to adapt its resources to the needs of the project, and a series of delays in such areas as finalizing the leases for swing spaces, the appointment of the Executive Director, the establishment of the advisory board, filling critical vacancies, and the failure to identify staff members to be moved to swing spaces.  Those delays explained why the capital master plan still basically remained on paper.

Egypt’s representative recalled, in that regard, that the Secretariat had urged Member States to decide on the plan and even blamed them for the delay and resignation of the previous Executive Director.  Now, the only element of the project that had been on time was the bill received by Member States.

On the positive note, several speakers expressed hope that such recent developments as the selection of Skanska Building USA as the construction manager, appointment of the new Executive Director, and leasing of additional swing space for the project would speed up its implementation.  At the same time, members of the Committee pointed out that the failure to fully implement the Assembly’s mandate had not only delayed the project, but also harmed the image of the United Nations.

Also this morning, the Committee considered the latest recommendations of the International Civil Service Commission (ICSC) on the conditions of service within the Organization’s common system, which covers over 52,000 staff members at various duty stations.  The Commission said, among other things, that it would not be appropriate to offer special financial incentives to retain staff of the International Tribunals for Rwanda and the former Yugoslavia, suggesting the use of existing non-monetary incentives instead.  It also recommended a 1.97 per cent adjustment to the base/floor salary scale for the professional and higher categories by increasing base salary and commensurately reducing post-adjustment multiplier points.

Several speakers in the debate regretted the slow progress of the pilot study on broadbanding (pay for performance) proposals, which, according to the Chairman of ICSC, Kingston Rhodes, was in danger “of slowly grinding to a halt”.  There were stark differences in what each of the five organizations participating in the project had been able to achieve.  With the three-year testing period due to end this year, and given that there had been a loss of momentum, the Commission had decided to request its secretariat to conduct an evaluation of the pilot study to determine the way forward.

Several speakers also commended ICSC for improving its own working methods and recalled the decisions taken in resolution 61/239 on strengthening ICSC.  They also supported the Commission’s action plan for the year 2008-2009, as well as its strategy to strengthen its role and functions.

Also speaking today were representatives of Switzerland, Japan, Brazil, India, Russian Federation, Turkey, Canada (on behalf of Australia and New Zealand) and China.  Robert Weissel also made a statement on behalf of the Federation of International Civil Servants Association (FICSA). 

Reports before the Committee were introduced by Roland Rey, member of the Board of Auditors and Director of External Audit of the Philippines; Rajat Saha, Chairman of ACABQ; and Katrina Nowlan, Chief of Service III of the Programme Planning and Budget Division.

The Committee will continue its debate on the capital master plan at 10 a.m., Wednesday, 24 October.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to consider the progress in the implementation of the capital master plan and various questions related to the United Nations common system, including the latest recommendations of the International Civil Service Commission (ICSC).

Capital Master Plan

According to the fifth annual progress report on the implementation of the Capital Master Plan (document A/62/364), during the past year, the Assembly approved financing, selected a new construction manager, appointed an Executive Director in July, and leased some additional swing space for the project in Manhattan and on Long Island.  As of September 2007, total estimated project costs amounted to about $2.1 billion, an increase of $219.6 million over the amount approved by the General Assembly in resolution 61/251.

The Secretary-General recommends that the Assembly adopt the new “accelerated strategy IV”, as outlined in the report, which would reduce disruptions and seek to avoid unanticipated price escalations.  It would reduce the time spent on renovations of existing structures and expedite construction of the temporary conference building, facilitating sound planning, management and budgeting.  The Organization has awarded Skanska Building USA a contract for construction management services.  The work would proceed in two phases:  a pre-construction advisory phase, followed by a construction management phase.  During the latter, Skanska would submit cost proposals for each phase of work, negotiated into guaranteed price contracts, which would be accepted or rejected by the Secretariat.

The report notes that the project has slipped, in some categories by almost one year, since the fourth annual progress report.  Budget projections have also increased due to inflation, unanticipated construction costs and soaring rental fees.  Through a process called “value engineering”, a portion of the cost increase would be corrected in the design process.  To finance the plan, the majority of Member States elected to have an equal five-year multi-year assessment, with pre-established selection criteria and deadlines.  The assessment for the plan falls at $341 million per year, between 2008 and 2011.

As of September 2007, $153.5 million remains due and payable to the Plan’s account, with the Secretary-General requesting an additional appropriation of $652 million for 2008 and $341 million for 2009 for further pre-construction and swing space requirements.  The report lists the total appropriation to date as $194 million.  The Assembly called upon the Secretary-General to explore the possibility of using contributions from private donors to help execute the plan and approved a working capital reserve of $45 million for the plan’s account.  The report notes that the Secretariat is reviewing initiatives to promote energy efficiency and sustainability of the renovated complex.  Additionally, efforts to create an advisory board and explore ways to increase procurement opportunities for vendors from poor countries are under way.

The Board of Auditors, in its report on the capital master plan (document A/62/5 (Vol. V)) expresses concern with the financial implications of about a year’s delay and changes to the project, which have resulted in an estimated overrun of at least $148 million, or 7.9 per cent of the overall budget approved in resolution A/61/251.  That preliminary estimate would be subject to further revision based on the evolving schedule of works.  Among the reasons for the delay, the report cites the time taken by the Assembly to reach a decision on the project, the addition of new options that increased the project’s complexity, inadequate planning schedule, and the vacancy of the Executive Director position from June 2006 until July 2007.

According to the report, a draft risk-assessment study prepared by the programme management firm underscored the fact that some technical surveys and decisions were lacking in March 2007, such as surveys of the soil under the building and studies on the impact of blast-resistance provisions on the façade design.  The human resources were insufficient to manage such a project, due to the slow pace of filling vacancies.  The vacancy rate was 21 per cent as at 15 March 2007; in the three years leading up to that date, an Executive Director had been heading the project for only 10 months, from September 2005 to June 2006.  Although the Procurement Service had dedicated three full-time professionals to the capital master plan project, the Facilities Management Service of the Office of Central Support Services, Department of Management, had yet to adapt its resources to the needs of the project.

Commenting on the first two documents, the Advisory Committee on Administrative and Budgetary Questions (ACABQ), in a related report, (document A/62/490), notes that the plan would have benefited from stronger senior leadership, especially during the absence of an Executive Director.  It also underscores the need for strong commitment to the project from all departments under the leadership of the Secretary-General.  The Advisory Committee concurs with the recommendation that an advisory board for the project be established without further delay and calls on the Administration to implement the recommendations of the Board of Auditors expeditiously.

Continuing, the report says cost reductions from the potential impact of value engineering should be pursued, although the full extent of benefits and savings to be realized remains to be seen.  Costs associated with the replacement of furniture and equipment should also be considered in the context of the capital master plan.  Regarding the Secretary-General’s request to establish a letter of credit, the Advisory Committee recalled the General Assembly’s resolution that charges arising from a drawdown on the letter of credit would not be charged to Member States that have paid in full their capital master plan assessments for the applicable period within the 120 days of the issuance of letters of assessment.

After taking into consideration the Secretary-General’s comments on accelerated strategy IV, regarding the reduction of the time frame for the project’s completion and the maintenance of costs within the approved budget, the Advisory Committee recommends the Assembly approve the strategy.  It also calls on the Assembly to authorize $992.8 million for the project ($652 million in 2008, including $310 million carried over from 2007, and $341 million in 2009).  The next progress report on the status of the plan should include detailed information on all aspects of the project, including its schedule, actual and projected costs, associated costs, the status of contributions, the working capital reserve, the status of the advisory board, and the letter of credit.

The Office of Internal Oversight Services (OIOS), in its annual report (document A/62/281 (Part I)), calls the capital master plan “the riskiest construction project the Organization has ever undertaken”, due to its highly complex nature, coupled with the significant financial exposure and safety-related concerns.

According to the report, the Office has been providing audit coverage of the plan since February 2003.  In January 2007, in addition to a P-5 auditor post, the Office received an additional P-4 position and the amount of $300,000 to enter into a consulting contract with a firm specializing in New York State construction auditing.  OIOS is now finalizing the recruitments against both posts, following recent retirement of the previous P-5 incumbent.  Procurement for services under the consulting contract has also started.

As part of its audit approach, OIOS has issued its observations and recommendations in memorandums and via e-mail, rather than in formal reports.  In addition to transmitting audit communications to the Board of Auditors, the Office has also held regular meetings with the Board.  In February 2007, OIOS updated the status of its recommendations pertaining to two audits:  draft preconstruction phase services agreement (part A) and construction manager agreement (part B); and code consulting services bid and construction law counsel request for proposal.  The office of the capital master plan accepted all 18 recommendations of the Office, implemented 15 of them, and advised that the remaining three recommendations would be implemented in 2007-2008.

OIOS is also finalizing two specific audits on activities related to contract B and amendments for infrastructure architectural and engineering design; and the accuracy of plan disbursements.  To enhance the plan’s internal control, OIOS supported the initiative of the capital master plan office to have a specialized firm perform an ongoing review of payments made to contractors.  The Office also provided advisory services in relation to a proposed award for construction management, suggesting that documentation in support of major decisions for the capital master plan contract should include specific risk assessment.  It also reiterated its recommendation on the need to form an independent advisory board composed of experts in the construction area.  According to the Department of Management’s reply, however, the advisory board is not meant to provide technical oversight, but to act as a general advisory board on capital master plan-related matters.

Common System

The common system represents common standards, methods and arrangements applied to salaries, allowances and benefits for the staff of the United Nations, those specialized agencies that have entered into a relationship with the United Nations, the International Atomic Energy Agency (IAEA) and a number of other international organizations.  Covering over 52,000 staff members at various duty stations, the system is designed to avoid serious discrepancies in terms and conditions of employment and to facilitate the interchange of personnel.

The ICSC’s annual report for the year 2007 (document A/62/30) presents the Commission’s latest recommendations on the conditions of service of international civil servants.  Having discussed proposed measures to retain staff of the International Tribunals for Rwanda and the Former Yugoslavia, the Commission suggested that offering special financial incentives towards that end would not be appropriate, as it might set a precedent for the common system.  However, existing non-monetary incentives, including outplacement services and consideration as internal candidates when applying for other common system positions, are appropriate.  In addition, if staff members’ fixed terms of service expire prematurely because their skills are no longer needed at the Tribunals, they would be eligible for termination indemnities.

According to the report, over the past five years, the margin between the net remuneration of United Nations staff in grades P-1 to D-2 in New York and federal civil servants in Washington has consistently been less than the desirable midpoint of 115, currently standing at an average of 112.3.  The cumulative movement of the United States federal civil service net salaries in Washington, D.C., the comparator, increased by 1.97 per cent, as from 1 January 2007.

The Commission recommended a 1.97 per cent adjustment to the base/floor salary scale for the Professional and higher categories by increasing base salary and commensurately reducing post adjustment multiplier points.  In addition, it endorsed the recommendations of the Advisory Committee to simplify the structure of the post adjustment index, and decided to conduct out-of-area surveys on the issue and to gather additional data on the cost-of-living differential between New York and Washington, D.C.

Regarding the Senior Management Network, the Commission renewed its request for regular feedback on progress and asked for specifics on training for new Senior Management Network members, including those provided by the United Nations System Staff College and the Rotterdam School of Management Erasmus University.  In 2008, each agency would be expected to fund the participation, between $10,000 and $12,000 per participant, of its senior staff at the two aforementioned institutions.

Concerned with the slowed progress of five volunteer organizations participating in the broadbanding pilot study, ICSC requested its secretariat to conduct a comprehensive evaluation of the pilot study and best practices regarding performance recognition and awards in national civil services and other international organizations.  Regarding leave entitlements, ICSC recommended that, while a framework should be in place that ensures harmonized recruitment incentives and coherent conditions of employment, agencies should remain flexible in the way annual, home and sick leave are handled.

Having found all organizations satisfied with current arrangements regarding language incentives and the promotion of multilingualism, the Commission recommended maintaining the long-standing flexibility in the way language incentives are handled between organizations.  When possible, multilingualism should be encouraged for new and existing staff through training opportunities and recruitment bulletins incorporating language incentives.

Following a Commission retreat that focused on ways to strengthen ICSC, staff members found the role of the Commission as both a regulatory and coordinating body should be refocused.  Through streamlining and simplifying its activities, the Commission should work towards coherence and flexibility within the common system.  Proposed steps include building a more solid personnel database and maintaining an inventory of best practices both within and outside the common system.  To increase efficiency, ICSC recommended holding shorter formal meetings and having more informal meetings, task forces and retreats.  In its meeting with Geneva-based organizations prior to the opening of its sixty-fifth session, the organizations’ representatives welcomed the Commission’s current initiative to promote a direct and open dialogue with executive heads.

Among the items deferred during the Commission’s sixty-fourth and sixty-fifth sessions, the report mentions the review of the implementation of decisions and recommendations made since ICSC’s annual 2005 report.  The Commission would also continue its review of the education grant methodology.  

According to the Secretary-General’s report on the administrative and financial implications of the ICSC’s decisions and recommendations (document A/62/336), for the United Nations and other organizations of the common system, the financial implications, on an annual basis, of the 1.97 per cent adjustment are estimated at $348,700, owing to the increased level of separation payments. For the proposed budgets of the United Nations, the International Criminal Tribunal for Rwanda, and the International Criminal Tribunal for the Former Yugoslavia for the biennium 2008-2009, the financial implications of the increased level of separation payments are estimated at $307,700, $21,400 and $35,600, respectively.

The Advisory Committee on Administrative and Budgetary Questions, in a related report (document A/62/353), has no objection to the Secretary-General’s approach, under which additional requirements resulting from the proposed upward adjustment of the current base/floor salary scale by 1.97 per cent will be reflected in the recosting of the proposed programme budget for the biennium 2008-2009 prior to determination of the appropriations to be adopted by the Assembly.

Introduction of Documents

ALICIA BARCENA, Under Secretary-General for Management, introduced the fifth progress report on the implementation of the capital master plan, assuring the Committee that there would be no need for any additional funds or changes in the speed of the implementation of the plan.  Among other achievements during the past year, she listed the fact that Skanska had been selected after a strict bidding process, and a new Executive Director had been appointed.  Swing space in Manhattan and Long Island had been identified. Currently, the schedule of the plan had slipped and there were projected budget overruns because of the impact of inflation.  The reasons for the delays included unique procurement requirements related to the construction management contract, which required the Organization to undertake due diligence; the need to incorporate blast resistance and enhanced sustainability into the design documents; and a complete change in the chain of command for the plan.

The Secretary-General’s proposal to accelerate the approved Strategy IV was advantageous to the United Nations because it lowered risk of construction impacts on United Nations activities and staff functions, she said.  The possibility of a construction-related incident or accident, in close proximity to occupants, would be diminished.  The strategy lowered the risk of United Nations staff impacts on the cost of construction.  The possibility of noise and other disturbances, requiring the United Nations to request pauses in the construction schedule and causing significant cost increases, would be greatly diminished.  The strategy also lowered the risk of unanticipated escalation in the cost of construction.  The proposal would allow for the General Assembly and conferencing functions to remain on the compound, in temporary facilities.  The Library would move out, as planned, and the library building would be used as swing space.  It was proposed to empty the whole Secretariat building in one phase instead of four, thus requiring more office swing space off-site.  The Secretary-General also proposed to accelerate work on the General Assembly building and Conference building in the North Lawn.  The increased cost of swing space would be more than offset by the lowered cost of the renovation itself.

In either the approved plan or the accelerated one, the Organization was presently over budget, although less so in the accelerated plan, she said.  It was necessary to both accelerate the project and revisit the designs.  The capital master plan-Skanska team was ready to undertake a robust value engineering exercise to find appropriate ways to reduce cost without compromising on the quality and sustainability of the completed project.  The designs would be modified as needed to align the project to the approved budget.  The proposed accelerated strategy would not change the design or appearance of the renovated United Nations.  “We are presenting today only a different way of phasing the project, while staying within the approved overall budget”, she said.

ROLAND REY, Director of External Audit of the Philippines, introduced the Board of Auditors’ report.  He said that the Board’s particular concern related to technical surveys that were required.  A draft risk assessment study by the project’s programme management firm indicated the absence of geotechnical and exploratory surveys of the structures and material of existing buildings, as well as studies on blast protection.  Therefore, there was a risk that, when those surveys were eventually carried out, the proposed foundation and structures might need to be strengthened, resulting in further delays and additional costs.

He added that, as at 15 March 2007, the vacancy rate for posts related to the project had been 21 per cent.  In particular, the Facilities Management Services had yet to adapt its resources to the needs of the project.

Presenting the ACABQ report on the capital master plan, the Chairman of the Advisory Committee, RAJAT SAHA, said that the budget of the plan was estimated to exceed the approved budget of $1.88 billion by $219.6 million.  According to the report, the proposed accelerated strategy IV was consistent with the approved strategy IV in that it allowed the Assembly and conferencing functions to remain in the United Nations compound, in temporary facilities.  It was stated that the entire project would be completed in five years, rather than seven, and that the Office of the Secretary-General would remain on site.  The Secretary-General also indicated that savings needed to be identified through a value engineering exercise, in order to bring the project back within the approved budget parameters.  The Advisory Committee had been informed that, at this stage, Skanska was not yet required nor was it able to provide firm pricing in writing.

ACABQ believed that the planned value engineering exercise was worth pursuing and that associated costs of replacing furniture and equipment should be considered in the context of discussions on the plan.  Although there were uncertainties and risks in the process, the Advisory Committee saw merit in the accelerated strategy IV, taking into account the information and assurances provided in the Secretary-General’s report.  On that basis, ACABQ recommended approval of accelerated strategy IV.

Statements

CLOTILDE MESQUITA (Portugal), speaking on behalf of the European Union, hoped that, under the newly appointed leadership of the capital master plan, there would be opportunity for the effective execution of the project, and she called on the Secretary-General to give his full support to the plan.

Taking note of the report of the Board of Auditors with regards to delays and cost overruns, she concurred with ACABQ that the recommendations of the Board were pertinent and focused.  She hoped those recommendations would be implemented without delay and the Secretariat would update the Committee on the status of their implementation, in particular, the long-awaited establishment of the advisory board on the plan.  She said the Union has been a strong advocate of the project.  Although she acknowledged that a construction plan and funding mechanism had been approved by the Assembly two years ago, elements which were supposed to move forward expeditiously, she said the new proposals now before the Committee appeared to be logical and pragmatic.  She said the new accelerated strategy promised to bring the costs of the project back into line with the agreed budget of $1.87 billion by expediting the constriction schedule, in a manner that posed less safety, security and operational risks to staff and the organization.

Looking forward to hearing further details on proposals at informal consultations, she said the Union had serious concerns about the consequences further delays might have.  She added that the Union would wait for further clarifications on the concept of value engineering, and said it was clear that timely and transparent communication from the Secretariat regarding the new approach were essential.  She stressed the importance of keeping the plan within the budget and financing schedule decided by the Assembly in resolution 61/251.  She hoped the Secretariat would seize the opportunity to launch a study to see the way of rationalizing and optimizing the space used for its activities.  She expected a productive discussion during this session on new elements of the project, including options for allocating swing space and for an environmentally sustainable, “greener” United Nations.  She stressed the Union’s commitment to urgent renovations, which should be carried out in a timely, safe and effective manner.

ZAFAR IQBAL CHAUDJARY (Pakistan), speaking on behalf of the “Group of 77” developing countries and China, recalled that the Assembly, in its resolution 60/282, had decided in favour of strategy IV recommended by the Secretary-General, namely, phased renovation of the United Nations buildings.  In March 2007, seven years after having the original discussion on the capital master plan, the Assembly, following the advice of the Secretary-General, had finally approved the methods of financing the plan at a total budget of about $1.8 billion.  The Board of Auditors had identified the main reasons behind the delays in the implementation of the plan by about a year.  Those ranged from procedural difficulties in United Nations departments, delays in decision-making and insufficient importance assigned to the implementation of the project.

He noted with concern that a number of actions by the Secretariat had undermined the General Assembly mandates and decisions.  The failure of the Department of Management to adapt its resources to the needs of the project, and a series of delays contributed to the current situation, including in finalizing the leases for swing spaces, the appointment of the Executive Director, the establishment of the advisory board, filling critical vacancies, and the failure to identify staff members to be moved to swing spaces.  Those delays explained an increase of 13 per cent in the projected costs approved in August 2007 and why the capital master plan still basically remained on paper.  The failure to fully implement the Assembly’s mandate had not only delayed the project, but had also harmed the image of the United Nations.  Moreover, the representatives of Member States, staff and other people concerned continued to be exposed to hazards and risks arising from the current conditions of Headquarters.

He said that the Group concurred with the recommendations of the Board of Auditors and related recommendations of the ACABQ.  The Board’s recommendations should be implemented expeditiously.  He also emphasized that, as recommended by ACABQ, the Board should validate the implementation of its own recommendations in its forthcoming report on the capital master plan.  It was imperative to avoid further delays and cost overruns and ensure compliance with the mandates of the General Assembly.  The Group reaffirmed resolution 61/251 and requested the Board of Auditors and OIOS to continue to report on the plan.

Regarding the accelerated strategy IV, he said that its benefits included mitigating the cost escalation, reducing the financial risks, eliminating the health and safety hazards, and speeding the renovation.  The safety, security and health of the United Nations staff should also enjoy paramount consideration during the relocation to the hired swing space.  The report also indicated that expediting the project involved adjusting a calculation at a particular time of the balance among available real estate opportunities, construction costs and projected escalation.  On the other hand, ACABQ had been informed that, at this moment, the project manager was not yet required, nor was able, to provide firm pricing in writing and that the total project estimate would be fine-tuned and adjusted as necessary.  That state of affairs raised serious questions about the financial assumptions used for the project within the approved budget and the distribution of the assessments over the entire project duration.

According to the Secretary-General’s report, the proposed accelerated strategy would reduce the current increase in the projected costs by only $30 million, leaving some $190 million to be identified for savings through “value engineering”.  The Group looked forward to receiving more clarifications and detailed information on value engineering.  It would like to seek concrete assurances that any proposed action would not compromise the quality, durability and sustainability of the materials and original design of the Headquarters.  No decision should be taken on those aspects without the Assembly’s prior approval.  He also supported the recommendation of ACABQ that associated costs should be considered in the context of discussions of the plan, probably at its first resumed session.  The Secretariat must have prepared an estimate in that regard, taking into account that those costs had been known to the Secretariat since the adoption of resolution 60/282.

The Group also looked forward to further clarifications on sustainability initiatives mentioned in the Secretary-General’s report.  The Group was concerned that the current accelerated strategy and value-engineering concept could have been presented in 2006.  The Secretary-General’s efforts in the context of the accelerated strategy IV should not be limited to mitigating the cost escalation of $219 million, but should continue in order to bring the approved budget of $1.8 billion to a lower level.

Member States were now faced with an accelerated approach on which an urgent decision needed to be taken, he said.  It was only through clarity, transparency and responsibility that it would be possible to move towards any decision, which would ultimately re-establish the credibility of the project, guarantee the availability of resources, and resolve the unacceptable health and safety deficiencies at Headquarters.  The Group stressed the need for more frequent interaction with member States on the implementation of the plan.

FRANCES LISSON (Australia), speaking also on behalf of Canada and New Zealand, said she was surprised when she learned that the Secretary-General planned to propose a revised implementation strategy for the capital master plan.  She noted that, after many years of often difficult negotiations, the Committee made a decision in June of last year to pursue strategy IV, the phased renovation approach, yet only 16 months later the Committee was asked to reconsider.  However, after carefully examining the accelerated strategy presented in the Secretary-General’s report, she agreed with the ACABQ that it was the best way forward.  She acknowledged that the accelerated strategy reduced many of risks associated with the plan, especially in regards to the health and safety of staff.  She said the completion of the project sooner than planned reduced interruption to the work of the Organization and the chance of further cost escalation.

Despite the advantages of the accelerated strategy, she noted that it still left the plan some $190 million over budget.  She said he would appreciate an update on the progress of the value engineering exercise to date from the plan office.  She asked for the assurance of the Secretary-General that, if the new strategy was approved, the plan could still be delivered in accordance with the budget agreed by the Assembly last year.  She then concurred with the recommendations of ACABQ and the Board of Auditors that the leadership should include a capital master plan advisory board.

OLIVIO A. FERMIN ( Dominican Republic), speaking on behalf of the Rio Group, said that the Group had always supported the need to renovate the Headquarters complex and, accordingly, the importance of the capital master plan.  Many countries of the Group had fully paid their dues to that end, and he reaffirmed the authority of the Assembly and its Fifth Committee to adopt the strategy and costs of the plan.  Thus, he expressed profound concern over the little progress that had been achieved nearly a year after the adoption of resolution 61/251 on the plan.  The Board of Auditors report had given the reasons for the delay.  However, the changes in regard of the Executive Director of the plan, the lack of leadership and lack of cooperation of some departments could not be used as an excuse for the failure to implement the Assembly’s mandate.  The position of the Group was clear:  the plan should be implemented as adopted in 61/251, and the total cost of the plan should not exceed the adopted budget of $1.87 billion.  There should be no changes in the distribution of assessments over time.  Many countries had chosen to pay their dues in five instalments, and there could be no changes, in that regard.

Continuing, he expressed concern over the escalation of costs, and stressed the need to maintain resources in compliance with resolution 61/251.  However, in paragraph 11 of its report, ACABQ had noted a possible increase of the costs by some $219 million, even taking into account the cost reductions through the proposed accelerated strategy IV.  The Group was concerned that the cost of renting additional space and building and an even larger Conference building would exceed the possibility of savings.  He requested some clarifications in connection with the identification of savings through value engineering and said that, before endorsing the accelerated strategy, the Group required additional assurance from the Secretariat regarding possible savings.  He was also concerned about the delay in forming the advisory board that had been repeatedly requested by the Assembly, the auditors and ACABQ.  Why had such a delay occurred?

In conclusion, he said the Group was gravely concerned about the scant and inappropriate management of the art work and artifacts donated to the Organization by Member States.  Those were part of the heritage of the Organization.  As provided for by resolution 61/251, during the construction and renovation, it was necessary to ensure careful handling of those works.  He wanted to receive more details how the Secretariat planned to handle those works during the project.  Many questions required answers.  The Group was concerned about the lack of compliance with the mandates.  Restoration of the project’s credibility was possible only with greater transparency and accountability.  Member States needed to be involved in future discussions on the matter, to ensure the conclusion of the project within the established time frame.

MOTUMISI TAWANA (South Africa), speaking on behalf of the African Group and aligning itself with the statement from Pakistan, began by noting that steps were not immediately taken by the Secretariat to commence work on renovations after the Assembly approved a budget for the plan in December 2006.  The plan, thus, was one year behind schedule and $219 million over budget.  The delay was caused by the absence of an Executive Director, and the Board of Auditors has consistently recommended that vacant posts be filled.  The problem of vacancies, especially at the senior level, jeopardized the implementation of mandates and should be avoided at all costs.  However, recent appointments of an Executive Director and a project director were encouraging.  Those appointments would give impetus to the implementation of the project.

Next, he welcomed the establishment of an advisory board on the plan and trusted that the board’s composition would be based on broad geographical representation.  Also, he recognized the possible positive impact of an accelerated strategy IV on the viability of implementing the plan.  He stressed the urgency of the plan’s implementation.  Nevertheless, the African Group would like to be assured that the costs would remain within the approved budget and that the quality of the work would be guaranteed.

THOMAS GUERBER ( Switzerland) commended the new Executive Director of the capital master plan office for his re-evaluation of crucial parameters concerning design and implementation.  He reiterated that the plan should be realized at a minimum cost, in as short a period of time as possible, but without compromising the quality of the renovation or the safety of United Nations staff.  He also reemphasized that the new building should be equipped with environmentally friendly technology and other equipment suitable to reduce maintenance costs and improve working conditions of United Nations staff and delegations.

He said the accelerated strategy was in line with the aforementioned priorities and could even improve their realization.  The new strategy would help reduce risks and other negative effects relating to the construction process.  Also, the value engineering exercise could reduce costs and bring the project back within its approved budget.  He encouraged the Executive Director to scrupulously examine and exploit areas that could save money and bring the project back into authorized parameters.  Although he supported the accelerated strategy, he also urged the rapid establishment of an advisory board, which would go a long way towards strengthening confidence in the new strategy.  The board could operate as a competent interface between the capital master plan office and Member States, if unexpected circumstances necessitated further modifications of the strategy.

Noting that, on several occasions, the senior management of the capital master plan had stated its intention to encourage innovative businesses to use the United Nations Headquarters as a showcase for their products for energy-efficient and environmentally friendly building management.  He believed that those innovations were original ideas with cost-saving potential.  He encouraged the Secretariat to pursue those ideas further and give them the attention they deserved.  He understood that it would be necessary to move the gifts the United Nations had received from Member States to a storage space.  In that connection, whether they were moved or not, the gifts deserved an appropriate place on the United Nations campus once the renovation had been completed.

KENICHIRO MUKAI ( Japan) said that his delegation fully understood the importance of the capital master plan.  Clearly, it was necessary to have a safe environment for United Nations staff and Member State representatives.  That was why, in 61/251, Member States had agreed to a plan on a fast-track basis.  He was disappointed that, according to the documents before the Committee, the project was now one year behind schedule and that the cost had increased by $219 million.  He was also concerned that further delay would reduce the Member States’ trust in the Secretariat, its management and capabilities.

Many objectives of the proposed accelerated strategy IV could make up for the time lost, he said.  The most pressing task, however, was to absorb the costs within the adopted budget, avoiding further cost overruns.  He strongly urged the Secretary-General to keep his commitment to staying within the approved budget and level of assessments.  Once those two elements were secured, his delegation was ready to support the proposed strategy.

TARISSE DA FRONTOURA (Brazil), aligning himself with the statements on behalf of the Group of 77 and China and the Rio Group, brought particular attention to the “War” and “Peace” panels in United Nations Headquarters, which were painted by the artist Candido Potinari.  He quoted Brazil’s President, who, addressing the General Assembly, had noted that, as delegates walked into the building, they could admire a work of art that Brazil presented to the Untied Nations 50 years ago.  He noted that 2007 marked the 50-anniversary of the inauguration of the panels.

He said the artist’s message was simple, but powerful:  transforming suffering into hope, and war into peace was the essence of the United Nations mission.  He recalled paragraph 41 of resolution 61/251, where the Assembly requested that the Secretary-General ensure that works of art, masterpieces and other gifts were appropriately handled during all the stages of the renovation work and that all associated costs were foreseen.  He requested that detailed information be provided to the Committee on the measures planned by the Secretariat for the physical conservation of those murals, during the renovation of the building, including protection from hazardous materials, sunlight and humidity.  He asked that the answer to his request be provided in a formal meeting and also be available in writing during the informal consultations.

PRASANNA ACHARYA ( India) supported the position of the Group of 77 and said that Member States had been persuaded to adopt strategy IV based on detailed briefings and extensive negotiations, as the best possible option for beginning the most complex project ever undertaken by the Organization.  At this juncture, he was “a little surprised” not only by the time and cost overruns, but also by the fact that a new accelerated strategy IV was now being proposed.  While appreciating the merits of the proposal, he wondered why those advantages had not been incorporated in the original strategy IV.  Henceforth, it was necessary to be vigilant in ensuring a proper risk assessment for the project.  It was also necessary to put in place plans to mitigate the risks, “so that we are not back to square one in the future”.  He added that all recommended technical surveys and studies to be undertaken before the construction started.

While the complexity of the decision-making by Member States was well-known and should be factored into all proposals presented by the Secretary-General, he was disturbed by the ACABQ’s comments regarding the lack of commitment to the project on behalf of some of the departments involved as a reason for cost overrun and delay.  “It should be made abundantly clear that the capital master plan belongs to all of us:  the Member States, their peoples and United Nations staff”, he said.  Therefore, total commitment and full cooperation and coordination on the part of all departments concerned were not just an expectation, but an imperative.  All heads of department had a solemn duty to deliver whatever was required of their departments for an effective implementation of the capital master plan.  In that regard, he hoped the newly appointed Executive Director would provide the required leadership.

One could not argue with the economies of the proposed accelerated strategy IV, he said.  It proposed for the renovation of the Headquarters complex within the approved budget, in a shorter time frame.  As mentioned in the Secretary-General report, the strategy would also identify an amount of $190 million through “value engineering”.  While agreeing with ACABQ that the planned engineering exercise was worth pursuing, his delegation would keenly monitor it and evaluate its outcome.  Needless to say, pursuit of value engineering should not be at the expense of quality.  The United Nations belonged to all Member States and, in the spirit of collective ownership, his delegation called for increased procurement opportunities for vendors from developing countries for the plan.  Resolution 61/251 had called for procurement to be conducted in a transparent manner.  He cautioned against inserting unnecessary restrictive clauses in tender documents that might exclude vendors from developing countries on flimsy grounds.

The bottom line for his delegation was that, whatever strategy was eventually approved by Member States, firm assurances were required against any further cost escalations, as well as strict adherence to the construction schedule and delivery of the highest quality construction.

MAXIM GOLOVINOV ( Russian Federation) said he attached great importance to speedy implementation of the capital master plan.  He said information regarding significant delays in the plan and related growth in projected expenditures posed serious concerns.  He noted the changes proposed by the Secretary-General to strategy IV for implementation of the plan to conclude the project within the approved budget and established time frame, in accordance with resolution 61/251.   He said he could not hide his surprise that costs were exceeding the budget authorized by the resolution.

He said he considered the Secretary-General’s accelerated strategy IV from the point of view of it providing a guarantee that, with its adoption, the implementation of the plan would move to a proactive stage and no new proposals.  He noted the element in the accelerated strategy of an opportunity for renting additional space for 1,500 Secretariat staff.  Within the adopted strategy IV, there was no such opportunity.  However, in the report, there was no information on the building the United Nations was proposing to rent and he would be grateful for additional information about the negotiations with the owner of that building.

He added that, given the large scale of project and broad delegation of authority to the management company, it would be important for OIOS and the Board of Auditors to keep negotiations under close attention.  Further, the United Nations should study the projects of other international organizations on the matter of creating a specialized intergovernmental organization to advise construction projects.

HESHAM MOHAMED EMAN AFIFI ( Egypt) said that consideration of the complicated issue of the implementation of the capital master plan should proceed on two tracks:  the failures of the past, which had contributed to the current situation, including cost overruns; and the options of how to stay within the approved parameters of the project.  The schedule had slipped, as all speakers had agreed.  The reasons identified today not only led to overruns, but also affected the credibility of the project and the image of the United Nations.  The delay now amounted to one year, and there was no progress on the site of the capital master plan.  That was what the public saw when looking at plan.  Member States had been urged by the Secretariat to decide on the plan and even blamed them for the delay and resignation of the previous Executive Director.  Now, the only element of the project on time had been the bill received by Member States.

Turning to the issue of the options, he recalled that the Assembly, in resolution 61/251, had requested the Secretary-General to submit options on how to stay within the budget, and his delegation would have preferred to have several options presented, rather than a single, “take-it-or-leave-it”, option.  The proposed option was advantageous as regards the timing, but still needed further clarification on how it would remain within the approved budget, as requested by the Assembly.  In fact, the proposal would lead to a decrease of overruns by some $30 million.  Compared with the approved budget, that was a small percentage.  He would seek further clarification as to how the option proposed to address the relevant provisions of resolution 61/251.

He was raising all those questions because the fifth annual report was far less informative than previous ones, he said.  More information was required on procurement, sustainability initiatives and many other issues.  His delegation was more than willing to look at the proposed strategy, provided certain assurances were provided.

FAZILI CORMON ( Turkey) aligned himself with the representative of Portugal, on behalf of the European Union.  He said that Turkey supported the capital master plan and noted that it had been under discussion in the Committee since 2000, with a resolution approved by the Assembly in 2006.  Given the current proposals, he welcomed the appointment of the Executive Director of the project and potential appointments to the Office and other departments.  He appreciated the work on the pre-construction phase, but was concerned with the delays.  Such serious changes as proposed in accelerated strategy IV could be somewhat undesirable, but he supported the new strategy as put in paragraph 26 of the ACABQ report.  However, he would appreciate the Secretary-General’s commitment to completing the project in a reduced time frame and for reduced costs.  He agreed with the view that completing the project under the accelerated strategy would be more efficient, less risky and less costly than the other approach.

Ms. BARCENA thanked the delegates for their comments and said that the Secretariat would come back to Member States with many answers.  Today, she only wanted to clarify that the Board of Auditors report referred to the period of January-December 2006.  In recent months, there had been progress on many of the issues reported on by the Board.

KINGSTON P. RHODES, Chairman of the International Civil Service Commission (ICSC), introduced that body’s report.  He said that he had been elected to his position last November, and it was the first time he was addressing the Committee.  The Commission focused its efforts on how it could better support the work of the Committee in modernizing and strengthening the international civil service and on rendering itself more strategic in its relation to the organizations of the common system.  ICSC gave priority consideration to the issues of the highest value to Member States and the organizations in the area of human resources management.  The Commission had undertaken to listen more keenly to all its stakeholders.  The Commission’s new action plan guided and streamlined its work and allowed it to make more effective use of available resources.  The main features here were the decision to reduce the time spent in formal session and utilize more informal settings, such as retreats and working groups, to facilitate frank discussions and the building of trust between the Commission and representatives of organizations and staff.

He then highlighted the conclusions of the Commission in the areas of performance management, mobility and measures to promote increased productivity and efficiency.  He also reported that the net remuneration margin between the United Nations and the United States federal civil service in Washington, D.C., for the calendar year 2007 stood at 114.0 – 0.1 percentage point higher than the margin estimate contained in the annual report.  That was explained by the fact that, in accordance with the existing practice, the margin level had been updated using the actual post adjustment multiplier for New York for September-December 2007, which had turned out to be slightly higher than the projections at the time of the preparation of the report.

The reform of the pay and benefits system continued to be a priority for the Commission, he said.  In that context, ICSC had addressed the issue of language incentives and continued to monitor the pilot study/pay for performance projects in five volunteer organizations.  From frank and open discussions with those organizations, it had become apparent that the project was in danger of slowly grinding to a halt.  There were stark differences in what each organization had been able to achieve.  At the inception of the project, it had been indicated that the pilot study would be evolutionary and proceed on the basis of lessons learned.  A three-year testing period had been specified.  That period was due to end with the 2007 performance year.  With that in mind, and given that there had been a loss of momentum, the Commission had decided to request its secretariat to conduct an evaluation of the pilot study to determine the way forward.  He hoped to present those to the Committee next year.

He added that the matter of contractual arrangements in the common system and harmonization of entitlements paid to staff in hardship duty stations had been included in a supplement to the Commission’s 2006 annual report.  Those subjects would be dealt with by the Committee later, and he was ready to provide any additional information in that regard.  One item that remained incomplete –- the United Nations/United States grade equivalency study -– and upon the request from the Commission, its secretariat and the secretariat of the United Nations System Chief Executives Board for Coordination (CEB) were exploring alternative approaches for carrying out that study.

KATRINA NOWLAN, Chief of Service III of the Programme Planning and Budget Division, introduced the statement on the implications of the decisions and recommendations of ICSC.

Mr. SAHA introduced the ACABQ report on the matter.

ROBERT WEISSEL, on behalf of the Federation of International Civil Servants Association (FICSA), in addressing the report of ICSC, brought to the Committee’s attention that the exclusion of FICSA views was a violation of Rule 22.2 of the ICSC Rules of Procedure.  He quoted the rule that called for such inclusion and said that the current report contained no such summary of the views of staff or of the administrations.  He said that situation was not considered desirable by any of the ICSC session participants and discussions about possible solutions were under way.  He trusted that a solution would be found to correct the omission in future reports.

He referred to the ICSC Chairman’s statement that conditions of service should be harmonized and coherent to ensure that they were equitable for all staff, and he called for a recommitment to a modern, equitable, dynamic and merit-based common system.  He hoped that any flexibility accorded to the administrations would not result in a wide variation among those conditions of service.  He said, from recruitment to career advancement, merit was the key criterion for selection and advancement.  He noted that the process of determining merit must be fair and transparent.

Next, he took up the issue of the ICSC’s decision not to approve special financial retention incentives for the International Criminal Courts for Rwanda and the former Yugoslavia.  He said FICSA had established a close working relationship with the Tribunals and supported the incentives requested by them, to ensure that staff would not leave their positions prior to the end of their contract or completion of their assigned responsibilities.  Instead of seeing the incentives as a precedent, he said the incentives could serve as a valuable pilot experience and, thus, would guarantee the required functioning of the Tribunals to the end of their mandates.

Concerning the evolution of the United Nations/United States net remuneration margin, he noted with dismay that the average margin level for the past five years had been below the desirable midpoint of 115, currently standing at 112.3.  He said it was high time for a real increase by raising the margin back to the agreed midpoint.  He also acknowledged that the proposed 1.97 per cent adjustment of the base/floor salary scale did not yield an increase in take-home pay, since it was implemented on a no-loss/no-gain basis by deducting a percentage of post adjustment.  Furthermore, he said the increase no longer factored in the locality pay of federal civil servants in Washington, D.C., which was intended to close the pay gap between public and private sectors workers in the United States.  Thus, he said United Nations pay remained uncompetitive, which, in turn, created recruitment and retention difficulties.  He called on the Assembly to restore pay competition in the United Nations system.

He said he appreciated the report to the Commission on the progress made towards creating a Senior Management Network and wanted to know whether criteria had been developed to evaluate the effectiveness of the Leadership Programme, and the entire Senior Management Network.  Continuing, he commented on the ongoing review of the pay and benefits system.  He said reports from volunteer organizations revealed that little progress had been made towards introducing broadbanding and pay-for-performance.  He questioned whether the improved performance appraisals, as reported by organizations, were sufficient to support performance pay.  A valid, trusted and robust performance management system was essential for decision-making on merit pay, and it was very important to make the distinction between performance appraisal and a coherent performance management system.  He stressed that performance should be managed, and not merely graded for the purpose of granting increases.  He emphasized that FICSA was firmly against performance pay in an international civil service.  He said the detailed reasons for that position was based on research on merit pay in the public sector, which would be presented at the working group.

Taking up the issue of leave entitlements, he regretted the Commission’s decision to grant organizations extensive flexibility in implementing certain leave entitlements.  He said that, in that regard, flexibility had led to leave provisions that were not equal, such as paternity leave that ranged from three days in some organizations to four weeks in others.  He said that was an example of the lack of coherence in the common system.  Similarly, he said there were wide variations in the ways in which organizations rewarded the knowledge and use of languages.  However, he said FICSA supported the promotion of multilingualism and diversity among staff, and language allowances should be awarded to all staff that used their language knowledge in their work, regardless of grade.  He said any award for language knowledge and use should be pensionable.

He expressed serious regret that the Commission did not approve the recommendations of the working group to simplify and streamline the education grant methodology.  Since the working group was comprised of representatives of staff and the administrations, and ICSC secretariat staff, its recommendations were representative of the parties concerned and were developed after extensive discussions.  He was, therefore, surprised that several commissioners reopened deliberations during the session and returned to several proposals that had been made at an earlier session and rejected by the working group.  He reminded the Committee that, while FICSA supported streamlining administrative processes and reducing administrative costs, the education grant was perhaps the most important benefit to ensure recruitment of staff in the professional and higher categories.  Any attempt to reduce the grant would make it more difficult for the organizations to recruit qualified people who have families.  He said that, for many professional staff, it would not be worthwhile for them to stay in the common system without the grant.

Finally, he brought the Committee’s attention to the long-standing calls for reform of ICSC, noting that FICSA boycotted ICSC sessions from the early 1990s to 2000 because it was dissatisfied with the functioning of the Commission and its lack of sensitivity to staff issues.  When the tripartite working group was established in 1998, to end the boycott, the working group successfully negotiated a number of changes to the ICSC Rules of Procedure, which had never fully been implemented, even though their implementation was a condition for the staff bodies to end their boycott.

He then drew attention to the Commission’s renewed efforts to be more proactive through improved relationships with partners, to focus on streamlining working methods and to refocus its role on coherence and flexibility in the common system.  In light of those efforts, he said FICSA would remain vigilant to ensure that future sessions would not return to the former business-as-usual ways.  He encouraged more interactive discussions and exchanges and less formal and prolonged interventions.  He said an extensive and open discussion between commissioners and staff would facilitate all the partners becoming a part of the change process.  In closing, he said, conditions of service needed to be coherent –- or ideally, the same -– for staff working alongside colleagues from other United Nations system organizations.

Ms. MESQUITA (Portugal), speaking on behalf of the European Union, welcomed the quick work of ICSC on contractual arrangements, harmonization of conditions of service, and retention bonus for the Rwanda and former Yugoslavia Tribunals, which would be taken up at a later stage under different agenda items.  He underlined the role of ICSC as a central body for bringing and keeping the United Nations common system together.

However, he said the Union regretted the slow progress of the pilot projects on broadbanding or pay-for-performance and would like to hear more explanations in that regard.  On the other hand, he commended ICSC for improving its own working methods and recalled the decisions taken in resolution 61/239 on strengthening ICSC.  Continuing, he encouraged the Commission to continue its work, through recommendations on practical steps to achieve gender balance in the organizations of the common system, in particular at senior levels.  Concluding, he said the common system united the United Nations family more effectively than any other element, and it was an important element to standardize rules and regulations.  Mobility was only possible thanks to the common system.

AHMED FAROOQ ( Pakistan), speaking on behalf of the Group of 77 and China, said he appreciated the user-friendly format of the ICSC report.  It acknowledged that, over the years, ICSC, both as a regulatory and coordinating body, had offered useful technical guidance to the General Assembly in dealing with common system issues and said its recommendations had helped productivity and efficiency in the Organization.  He reaffirmed the Group’s support to the ICSC’s mandated role and supported the Commission’s action plan for the year 2008-2009, as contained in Annex VII, and its strategy on strengthening its role and functions.

Continuing, he agreed with the ACABQ’s recommendation on the upward adjustment of the current base/floor salary scale for staff in the professional and higher categories by 1.97 per cent in the recosting of the proposed programme budget for the biennium 2008-2009.  He said the Group appreciated the ICSC input on the staffing of field missions, a review of the entitlements of internationally recruited staff in non-family duty stations, contractual arrangements and awarding appropriate incentives to retain staff for the international tribunals.  He said the latter incentives would be critical to the Assembly’s decisions under the relevant agenda items.  He also welcomed the ICSC recommendations on improving transparency and accountability and geographic representation in the human resources management of the Organization.

He said that the Group would like to seek assurances that the methodology used by the Advisory Committee on post adjustment questions was in accordance with internationally agreed principles.  He encouraged the Commission to continue its review of the education grant methodology and looked forward to its report in the sixty-third session.  He also acknowledged the Commission’s activities in monitoring the improvement of management capacity and performance among senior staff by the Chief Executives Board and hoped the Commission would continue to play a pivotal role in the development of the Senior Management Network, as well as the evaluation of its leadership development programme.  He would like to receive more details on the activities of the Senior Management Network.

Continuing, he said he awaited the report and recommendations of the Commission’s pilot study in the five volunteer organizations.  He would like further information on the Commission’s role in modernizing and simplifying leave entitlements.  He supported the Commission’s recommendation that all United Nations organizations should follow common system regulations on leave entitlements and in the consideration of work/life balance and health-care issues.

Finally, he took note of the Commission’s recommendation on guidelines for the issue of language incentives, which needed further clarification.  He supported the policy of adopting appropriate strategies to improve language skills and proficiency of all United Nations Professional and General Service staff.  However, he said language should not be used as an additional conditionality for recruitment, placement and promotion.  He said the recruitment in the Organization should strictly be guided by Article 101.3 of the Charter.

SUE BUTCHART (Canada), also speaking on behalf of Australia and New Zealand, underscored the importance of ICSC and the direct connection between its work and effective functioning of the common system.  First of all, she wanted to acknowledge the contributions of the Commission in providing guidance on key human resources issues.  First, the conclusions of the Commission on the proposals regarding contractual arrangements and entitlements for internationally recruited staff would provide an important basis for the Assembly to make decisions on new contractual arrangements and benefits for staff.  Further, the advice offered on the issue of conditions of service in non-family duty stations helped to clarify the options before the Assembly.  Second, Member States had, for some time now, been endeavouring to find the most effective means of retaining staff to complete the work of the International Tribunals.  The delegations she represented appreciated the comments and recommendations of the Commission, in particular, its helpful identification of non-monetary incentives.

For the organizations of the United Nations system to remain effective and progressive, the relevance of strengthening the capacity of managers could not be understated, she continued.  In that regard, she welcomed the work on a Senior Management Network.  It was significant that the Commission saw the value of that initiative.  She noted that the Commission’s secretariat had four staff members who were eligible to participate in professional development in the framework of the Senior Management Network.

Turning to the broadbanding pilot study, she said she continued to view it as a step towards strengthening performance-based human resources management.  She was disappointed at the lack of feedback to Member States, thus far, on the pilot.  However, she noted the decision to conduct a comprehensive evaluation of the pilot and looked forward to learning its outcome.  The Commission occupied a strategic position in the United Nations system, and she was encouraged by the efforts of the Commission to strengthen and streamline its working methods.  She would watch with interest the outcomes of those improvements on the work of the Commission and the critical guidance it provided to the organizations of the common system.

Mr. FERMIN ( Dominican Republic), speaking on behalf of the Rio Group, reiterated the importance of the common system and the fundamental role of ICSC in coordinating the conditions of service within it.  The most valuable asset of the system was its staff and, therefore, it was important to establish the best possible conditions to attract the most qualified people.  He noted the improved format of the report and the recommendations contained in it.  Regarding the broadbanding pilot study, he said that the Group had seen with concern that the results within the volunteer organizations had been uneven, and the Commission was now awaiting the evaluation of the project.

Regarding the promotion of multilingualism and language training, he noted with interest the recommendation to encourage the use of languages within the multicultural environment of international public administration.  The Group was awaiting the review on efforts to streamline the Commission’s working methods, provided it did not affect the independence of the Commission, which was essential.

ANDREY V. KOVALENKO (Russian Federation) noted a great deal of work done by the Commission, which had continued to consider the questions related to the functioning of the pay and benefits system of the United Nations.  He particularly noted the prompt and detailed reaction of the Commission to the Assembly’s proposal on the use of bonuses to retain personnel at the International Tribunals.  Despite the fact that the issue would be considered under another agenda item, he supported the recommendation by the Commission, which suggested that offering special financial incentives towards that end would not be appropriate, since they were not provided for in the common system and their introduction might set a precedent for the common system.  He also welcomed the Commission’s decision to evaluate the broadbanding pilot.  That was particularly important, since uneven results had been achieved in various volunteer organizations in testing that --generally questionable -- remuneration model.  In that connection, the Commission could propose a possible alternative for further action.

He noted the work by the Commission on the other important aspects of the pay and benefits system, in particular, the modernization and simplification of the benefits system.  He believed that it would be useful to conduct a review of the experience and practices of national civil service and evaluate the United Nations system of benefits from that standpoint, in order to reform and simplify it.  He also noted the information provided by the Commission on the preservation of differences in net compensation between the United Nations and the United States civil service within the limits established by the General Assembly, which, at this point, did not require any decision beyond the standard procedure of adjusting the base/floor salary scale for the professional and higher categories on a no-gain/no-loss basis.

Continuing, he said that the Commission should continue following the developments relating to the so-called Senior Management Network and draw the attention of Member States to that project, should it evolve towards creating a separate category of personnel.  In that connection, he did not quite understand why the information on the consideration of that issue by the Commission had been moved to the section relating to conditions of service of professional and higher grades of staff.  It seemed to him that the question about any kind of exclusions for the conditions of service of the Network staff had been closed a long time ago.

In conclusion, he said that his delegation was still in favour of strengthening ICSC as the central body dealing with the conditions of service of United Nations staff and welcomed the consideration of enhancing the role and improving the functioning of the Commission, which had developed a plan of action.  On the format of the report, his delegation had serious doubts regarding the usefulness of issuing that document in a shortened format.  That reduced its value as a reference document.

YASUO KISHIMOTO ( Japan) said that the recommendation of ICSC on the level of basic salary should be approved as is.  He said the observation of ICSC regarding the retention strategy in the Tribunals provided a very important benchmark that should be considered in addressing the issue of the financing of the two entities.  Regarding contractual arrangements and harmonization of conditions of service, he said both elements should be considered intensively in larger context of human resources management policies at a later stage.

Concerning language incentives among common system organizations and the general guidelines proposed by ICSC, according to which the knowledge of additional languages should be taken into account in career development and promotion of staff, he said that he had serious concerns about any proposal that introduced discriminatory and unnecessary factors into the recruitment and promotion process, apart from the qualifications needed to execute each post.  Continuing, he said the proposed guidelines suggested providing extensive free training opportunities to staff and family members in relation to mobility and organizational operations.  He did not see any reason to adapt such guidelines, and it was, therefore, not acceptable to do so.

SHEN YANJIE ( China) said the 2007 annual report of ICSC has provided a summary of the work of the Commission and provided analysis and recommendations.  He said the work of the Commission had been effective and he aligned his statement with that of Pakistan, on behalf of the Group of 77 and China.

First, he addressed the retention bonuses for the Tribunals, as pointed out in the report.  He noted that the Commission had reviewed the proposal and also recommended assistance to the Tribunals to resolve questions within existing staff rules and regulations, such as finding new placements and funding staff training.  He appreciated those efforts.  On the development of the Senior Management Network, he noted that members of the Network would be promoted based on their positions and that the head of the Network had the power to determine who held which positions in the Network.  In that regard, he said it was important to lay down criteria for gender balance and geographic scope, to ensure the cultural diversity of the Network.

Regarding language incentives, he said organizations across the system used different approaches, although all organizations were quite satisfied with current arrangements to meet their needs and enhance efficiency.  He noted that the ICSC report also made recommendations on giving flexibility to organizations to assure that language skills would contribute to meeting the needs of the organizations.  He said that multilingualism should continue to be encouraged throughout the organizations, including in vacancy announcements.

As for expenditures associated with language training, he said he wanted more information, in that regard.  On the working methods of Commission, he said that, at the Commission’s retreat, which was held before its sixty-fifth session, ICSC had explored ways to improve its work and maximize the support it provided to the General Assembly in guidance to the common system.  He appreciated the Commission’s efforts to improve its work and streamline its methods.  He hoped ICSC, as a subsidiary organ of the General Assembly, would continue to set and coordinate issues of service within the common system and human resources reform.

Mr. RHODES, Chairman of ICSC, took note of the comments and observations from the floor, saying that the views of delegations were important in guiding the work of the Commission.  ICSC would provide Member States with the detailed information and clarifications they requested during informal consultations.

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