Decentralized Administration of Justice System Readily Accessible to All Employees Key for Organization’s Effectiveness, Transparency, Speakers Tell Fifth Committee
Performance of United Nations Joint Staff Pension Fund Also Reviewed
Delegates in the Fifth Committee (Administrative and Budgetary) today urged Secretariat officials to manage the United Nations justice system in a transparent and efficient manner to ensure its thousands of employees are treated fairly.
Pakistan’s delegate, speaking for the “Group of 77” developing countries and China, said the Organization needs a sustainable, adequately resourced and decentralized system that is aligned with relevant rules of international law. This due process is vital to effectively manage the Organization’s most valuable asset: its human resources. Restating support for the Office of the Ombudsman and Mediation Services, he said the use of informal dispute resolutions should be encouraged when appropriate while the Office is strengthened.
Echoing this view, Switzerland’s representative, speaking also for Liechtenstein, said the use of mediation as a tool to resolve workplace disputes must be reinforced. The method frequently avoids lengthy and costly litigation and the Secretary-General should encourage all categories of personnel, including non-staff, to use it. She urged the Secretariat to address the inequality faced by non-staff personnel without access to the internal justice system and supported initiatives to provide effective protection and remedies to all categories of United Nations personnel, without distinction. Fair, transparent, efficient and non-discriminatory access to justice for everyone ensures the Organization’s effectiveness and credibility, she stressed.
The delegates spoke after two Secretariat officials delivered their reports on the Fifth Committee’s administrative of justice system agenda item.
Alayn Frankeson-Wallace, Executive Director of the Office of Administration of Justice, introduced the Secretary-General’s report on the United Nations administration of justice system in 2021. She said the justice system continued to function well and programme delivery was maintained, with outputs in some areas exceeding prior periods.
Shireen Dodson, United Nations Ombudsman, introduced the Secretary-General’s report on the activities of the Office of the United Nations Ombudsman and Mediation Services from 1 January to 31 December 2021. During the reporting period, the Office handled 1,611 ombudsman and mediation cases and the three most reported categories of issues were evaluative relationships, job and career, and compensation and benefits. She noted that parties found mutually acceptable solutions with the support of the Ombudsman as a neutral third party in most cases.
Donna-Marie Chiurazzi-Maxfield, Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced its related report, which focuses on the administration of justice and the activities of the Office of the United Nations Ombudsman and Mediation Services. Regarding remedies available to non-staff personnel, the Advisory Committee emphasized the necessity for all personnel to have access to a fair, easily accessible justice system.
At today’s meeting, delegates also considered the reports of the Secretariat and other bodies regarding the United Nations pension system. Speaking on behalf of the Group of 77, Pakistan’s delegate recognized the improved performance of the United Nations Joint Staff Pension Fund. While noting the Fund successfully met or exceeded its long-term investment rate of return objective of 3.5 per cent over the past years, he also noted the drop in the Fund’s market value to $79.1 billion as of 31 August. He urged the Secretariat to provide recommendations on mitigating the risks of current market volatility and urged Fund managers to continue efforts for equitable geographical representation and gender balance in all posts and at all levels. Furthermore, he supported expanded diversification of the Fund’s investments in developing countries and countries in transition and requested information on Fund investments by country, region and type of asset.
Vilem Vesely, Chair of the United Nations Joint Staff Pension Board, introduced the Board’s report, which includes the conclusions of its work during its seventy-second session and the proposal for the administrative expenses of the United Nations Joint Staff Pension Fund for 2023. The Fund is in good financial health and all actuarial and investment parameters remain sound, he said. The Board approved, for the Assembly’s consideration, proposed budget estimates for the Fund’s 2023 administrative expenses of $123.2 million before re-costing. The overall increase in the Fund’s 2023 budget proposal is only 1.1 per cent.
Ms. Chiurazzi-Maxfield introduced the Advisory Committee body’s related report on the Fund, which urges it to renew efforts to improve the investment performance and adopt measures to mitigate the risk of current market volatility.
Maria Costa, Director of the Finance Division of the Department of Management Strategy, Policy and Compliance’s Office of Programme Planning, Finance and Budget, presented a statement containing the programme budget implications for the regular budget arising from the Board’s report.
Pedro Guazo, Representative of the Secretary-General for investment of the assets of the Fund, introduced the Secretary-General’s report on investments of the Fund and measures to increase the Fund’s diversification. As of 31 December 2021, the Fund’s assets reached a record $91.5 billion, producing a return above market benchmarks and well above the 3.5 per cent real rate of return for all relevant historic periods, he said. Yet, 2022 was a very difficult year, and as of 30 September, the Fund’s preliminary value was $74.2 billion, equivalent to a nominal decrease in the year of 18.73 per cent.
Valentina Monasterio Gálvez (Chile), Director of External Audit and Chair of the Board of Auditors’ Audit Operations Committee, presented the Board’s report on the Fund for the financial year ending 31 December 2021. The Board issued an unqualified audit opinion, which confirmed that the financial statements of the Fund present fairly, in all material respects.
The Fifth Committee will reconvene at 10 a.m. on Tuesday, 15 November, to consider appointments to fill vacancies in subsidiary organs and other appointments; construction and property management issues; and a draft decision on the United Nations common system.
United Nations Pension System
VILEM VESELY, Chair, United Nations Joint Staff Pension Board, introduced the Board’s report (document A/77/9), which contains its conclusions of its work during its seventy-second session and the proposal for the administrative expenses of the United Nations Joint Staff Pension Fund for 2023. The Fund is in good financial health and all actuarial and investment parameters remain sound, he said. The most recent actuarial valuation, undertaken by the Fund’s consulting actuary as of 31 December 2021, showed a surplus of 2.3 per cent of pensionable remuneration on an open group basis and a funded ratio of 117 per cent, indicating the Fund remains fully funded. This result was fuelled by the strong performance of the Fund’s assets in recent years, reflecting careful management of the assets by the Office of Investment Management, he explained.
Despite the challenges of the COVID-19 pandemic, all services to clients were maintained and delivered, all pension payments were made on time and processing targets were met and exceeded, he said. The modalities adopted during the pandemic may have even increased productivity and modernization, including the Digital Certificate of Entitlement application, which won the 2021 Secretary-General’s Award for innovation and sustainability. The Board approved, for consideration by the General Assembly, proposed budget estimates for the Fund’s 2023 administrative expenses of $123.2 million before re-costing. The overall increase in the Fund’s 2023 budget proposal is only 1.1 per cent. These proposals were reviewed by the Board’s budget committee in June and subsequently reviewed and endorsed by the entire Board in July. To further professionalize budgetary review, the Budget Working Group has now been reconstituted as a fully fledged Committee of the Board.
The United Nations Joint Staff Pension Board strongly supports the proposals made by the Chief Executive and Representative of the Secretary-General for the investment of the assets of the Fund, as set out in the report, especially in terms of posts and non-post resources, he said. This will let the Pension Administration carry out the 2021-2023 strategy, which was supported by Assembly at its seventy-fifth session in December 2020. He noted that all expenses for the Fund’s administration are paid for through contributions from participants, employing member organizations and investment returns. Any unspent appropriation represents savings, rather than under-implementation, and are returned to the Fund.
MARIA COSTA, Director, Finance Division, Office of Programme Planning, Finance and Budget, Department of Management Strategy, Policy and Compliance, introduced a statement submitted by the Secretary-General in accordance with rule 153 of the rules of procedure of the General Assembly (document A/C.5/77/3), which contains the programme budget implications for the regular budget arising from the Board’s report. According to the report, the overall resources of $8.7 million represent the estimated costs of services related to the United Nations Staff Pension Committee, which are provided through the Pension Fund to the United Nations. She said $5.3 million would represent the portion from the regular budget, and the balance of $3.4 million from the funds and programmes, based on the latest data on the number of Fund participants.
When the proposed programme budget for 2023 was prepared earlier this year, the Fund’s 2023 budget had not been finalized, she said. Pending its finalization and the Board recommendations, a preliminary estimate of $5.4 million, after re‑costing, was included under Section 1. This would represent the regular budget share of costs to be reimbursed by the United Nations for the central secretariat of the Fund. If the Assembly approves the Board’s proposals and recommendations, the estimate for the regular budget share of costs, directly chargeable to the United Nations for services related to the Staff Pension Committee under Section 1, Overall policymaking, direction and coordination, of the proposed 2023 programme budget would total $5.3 million. That reflects a $83,800 reduction, compared with the estimate of $5.4 million contained in the 2023 programme budget proposal for 2023.
PEDRO GUAZO, Representative of the Secretary-General for investment of the assets of the Fund, introduced the Secretary-General’s report on investments of the Fund and measures to increase the Fund’s diversification (document A/C.5/77/2). The report highlights the investments of the Pension Fund’s performance as of 31 December 2021, the diversification of the Fund’s investments through impact investing and the requested extension of the mandate to engage in derivatives for the limited purposes defined by the Assembly. As of 31 December 2021, the Fund’s assets reached a record high of $91.5 billion, producing a return above market benchmarks and well above the 3.5 per cent real rate of return for all relevant historic periods, he said. Yet, 2022 was a very difficult year, and as of 30 September, the Fund’s preliminary value was $74.2 billion, equivalent to a nominal decrease in the year of 18.73 per cent. “The situation of the markets remains very volatile and extraordinary in many respects, with both global equity and bond markets concomitantly affected by negative returns,” he said.
The Fund has performed relatively better than those markets due to the tactical decision, endorsed by the Investments Committee, to hold around 6 per cent of the Fund’s assets in cash during the first nine months of the year, he said. The Fund’s portfolio has also decreased less than the compounded effect of the global equity and bond markets due to the strategic decision made more than a decade ago, and strengthened in the last few years, to diversify the Fund’s investments into private equity, real estate and infrastructure investments. While the evolution of the markets remains unpredictable over the short-term, the Fund’s long-term solvency was reconfirmed with the last actuarial valuation reviewed by the Pension Board at its July session, he said.
The budget requested for 2023, endorsed by the Pension Fund Board, is $55.9 million, up 3.4 per cent over the 2022 approved budget, he said. Most of the increase comes from the technical adjustment applied for the 16 posts approved in the 2022 budget.
VALENTINA MONASTERIO GÁLVEZ (Chile), Director of External Audit, Chair of the Audit Operations Committee, Board of Auditors, presented the Board’s report on the Fund for the financial year ending 31 December 2021 (document A/77/5/Add.16). The Board issued an unqualified audit opinion, which confirmed that the financial statements of the Fund present fairly, in all material respects, and the net assets available for its benefits as of 31 December 2021 and the changes in net assets available for benefits and its cash flows for the year, then ended in accordance with International Public Sector Accounting Standards (IPSAS) and International Accounting Standard 26.
She said the audit included a general review of the financial systems and internal controls, a test examination of accounting records and other supporting evidence the Board of Auditors considered necessary to form an opinion on the financial statements. The Board did not identify significant errors, omissions or misstatements from the review of the Fund’s financial records for the year ended 31 December 2021. However, the Board identified scope for improvement in the areas of data quality, strategic planning, benchmarks, budget management, trade approvals, private markets, brokers and counterparties, and external managers.
Despite the spread of COVID-19 in 2021, and volatility of the financial markets, the Fund’s total investments as of 31 December 2021 tallied $89.86 billion, up 11.08 per cent compared to the prior year, she said. As of December 2021, the Fund’s total assets were $91.77 billion and total liabilities were $0.31 billion. Net assets available for benefits were $91.46 billion, an increase of $9.95 billion compared with the $9.48 billion increase in 2020. The Fund assets consist mainly of investments, representing 97.92 per cent of the total assets.
The Board of Auditors issued 21 audit recommendations: 11 related to the Pension Administration, eight referred to the Office of the Investment Management; and two related to budgetary issues. All were accepted by the Fund. Turning to the implementation of previous recommendations, she said the Board verified the status of implementation of previous years’ recommendations for the period ended 31 December 2021. Of the 41 outstanding recommendations, the Fund implemented 26 (63 per cent) while 14 (34 per cent) were under implementation and one recommendation was overtaken by events (3 per cent). The Board considers that a 63 per cent implementation rate indicates a strong commitment by the Fund to manage long-standing recommendations, she said, acknowledging management efforts and encouraging the Fund to continue this trend.
DONNA-MARIE CHIURAZZI-MAXFIELD, Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing the body’s eponymous report (document A/77/5/Add.10), said it encourages the Fund to renew efforts to improve the investment performance and adopt measures to mitigate the risk of current market volatility. The Advisory Committee also recommends that information on comparison with peers be included in future reports.
Regarding administrative performance, the Advisory Committee concurs with the Board of Auditors’ recommendations, particularly the need to improve budget accuracy and develop key performance indicators linking Professional staff performance to individual portfolio returns for the Office of Investment Management, and workload indicators for the Pension Administration she said. Turning to the proposed 2023 budget for the Pension Administration, ACABQ trusts that the Assembly will receive clarification regarding accountability, in view of the proposed structural changes in this area, she said. It also would like clarification of the projected vacancy rate as there are discrepancies between projected and actual vacancy rates in past periods.
Regarding the Fund’s governance, she said ACABQ acknowledges the establishment of the Budget Committee and its contribution to oversight of the Fund’s budget proposal. On staffing, the Advisory Committee urges the Fund to continue efforts to ensure equitable geographical representation and gender balance at all levels and include updated information in the Board’s next report. Regarding the diversification of investments, the Advisory Committee trusts that updated information on investments — by country, geographical region, currencies and assets — will be given to the Assembly, together with information on the derivative instruments and the impact investments, she said.
JIBRAN KHAN DURRANI (Pakistan), speaking on behalf of the “Group of 77” developing countries and China, recognized the improved performance of the Pension Fund. While it successfully met or exceeded its long-term investment rate of return objective of 3.5 per cent over the past years, he noted the decrease in the Fund’s market value to $79.1 billion as of 31 August. The Secretariat should provide views and recommendations on mitigating the risks of current market volatility, he requested. For its part, the Pension Board and Administration must continue to implement the recommendations of the Board of Auditors.
On governance matters, he noted the need for further discussions on the proposal to approve the amendment to article 1 and its implications on the Fund’s beneficiaries and members. The Budget Committee has an important role in ensuring enhanced oversight of resource requirements for the Fund’s operational needs and budgetary accuracy. The Fund, he continued, must continue its efforts for equitable geographical representation and gender balance in all posts and at all levels. Regarding the conversion of General Temporary Assistance positions, he agreed that this must be fully justified and requested updated information on the first phase of the conversion. The Secretary-General and the Office of the Investment Committee must consider safety, profitability, liquidity and convertibility as they constantly exercise their fiduciary responsibility. He then expressed his support for the further diversification of the Fund’s investments in developing countries and countries in transition and requested information on its investments by country, region and type of asset.
Administration of Justice
ALAYN FRANKESON-WALLACE, Executive Director of the Office of Administration of Justice, introduced the Secretary-General’s report on the United Nations administration of justice system in 2021 (document A/77/156). As reflected in Part II, the justice system continued to function well and programme delivery was maintained, with outputs in some areas exceeding prior periods. The Dispute Tribunal delivered 168 judgements and disposed of the backlog of all cases older than 400 days that were pending on 31 December 2018. The Appeals Tribunal delivered 109 judgments and disposed of 122 appeals. The Office of Staff Legal Assistance received 1,123 new requests for assistance and closed 792 through settlement or otherwise. The Management Evaluation Unit closed 600 of the 652 requests it received. She said 85 per cent of management evaluation requests in the Secretariat did not proceed to the Dispute Tribunal, indicating this function’s importance in addressing workplace grievances.
Part III of the report elaborates on Assembly requests in resolution 76/242, including relevant information on the accountability of managers, multilingualism, protection against retaliation, informal dispute resolution, the Voluntary Supplemental Funding Mechanism and others, she said. The Office launched an enhanced version of the Court Case Management System in August 2021, which includes an e-filing system for applicants and respondents and the addition of French capability to reinforce multilingualism. The management system also enables the real-time Dispute Tribunal caseload dashboard.
The Office continued its outreach strategy and developed a searchable case law database in which Tribunal judgements are categorized, and summarized, in English and French, extrapolating key findings and legal principles, she said. The new Case Law Portal was launched on 6 October. “It will enhance transparency in the operation of the justice system and of the organization, increase access to justice and ensure more informed decision-making,” she said.
SHIREEN DODSON, United Nations Ombudsman, introduced the Secretary-General’s report on the activities of the Office of the United Nations Ombudsman and Mediation Services (document A/77/151) from 1 January to 31 December 2021. During the reporting period, the Office handled 1,611 ombudsman and mediation cases, she said. In noting that the three most reported categories of issues were evaluative relationships, job and career and compensation and benefits, she noted that parties found mutually acceptable solutions with the support of the Ombudsman as a neutral third party in most cases. As part of the pilot project requested by the General Assembly, the Office continued to provide services to non-staff personnel and received 114 cases in 2021. The Office also responded to 170 requests for mediation, 7 of which were referred by the United Nations Dispute Tribunal. Cases mediated by the Office continue to show a resolution rate of 80 per cent or higher, she reported. The Office has additionally been conducting regular information sessions on mediation to expand, strengthen and normalize its use across the Organization, she added.
In 2021, the Office launched a new multilingual website to provide information in all United Nations official languages, she said. Multilingualism, gender and geographical diversity are key considerations in the Office’s operations. The Office continued to promote dignity in the workplace through workshops, civility cafes and dialogues. It also supported the Secretary-General’s efforts to address racism within the Organization by holding global events and convening 50 dialogues to date, she noted. To enable a more sustainable approach to organizational conflict management, the Office has also gathered information on trends and patterns of workplace conflicts and shared such systematic observations with the Assembly and other stakeholders in the Organization to drive learning and development.
Ms. CHIURAZZI-MAXFIELD, Vice-Chair of the Advisory Committee, introduced that body’s related report on the administration of justice and the activities of the Office of the United Nations Ombudsman and Mediation Services (document A/77/559). She said the Advisory Committee trusts the Secretary-General will provide information on the measures taken to address emerging trends, contributing factors and logistical challenges. The Secretary-General should strengthen the accountability of managers, the Advisory Committee encouraged, while noting the introduction of the new performance management approach and 360‑feedback methodology. There must be further efforts to raise the awareness of all categories of personnel on the existence and substance of the policy against retaliation, she added.
Turning to the remedies available to non-staff personnel, the Advisory Committee emphasized the necessity for all personnel to have access to a fair and easily accessible justice system. As more information is needed before accepting the offer of services from the Permanent Court of Arbitration, the Advisory Committee recommends the Secretary-General to conduct a fuller analysis of the Court’s offer and expedite his work on streamlining the existing method for the conduct of arbitration cases under the current ad hoc system. He should also address the underlying reasons for the very low number of arbitration cases. On the Office of Staff Legal Assistance, the Secretary-General is asked to provide an assessment of the supplemental voluntary funding mechanism and include information on alternative options and on the best practices of other organizations. Any proposed amendments to the Dispute Tribunal’s Statute and rules of procedure must be considered by the Assembly’s Sixth Committee (Legal) without any prejudice to the role of the Fifth Committee, it stressed.
Regarding the activities of the Office of the United Nations Ombudsman and Mediation Services, she said the Advisory Committee noted the potential benefits of a mandatory conversation on informal resolution mechanisms, including mediation. The Secretary-General should further study the value and feasibility of this option and provide the Advisory Committee with additional information. The specific requirements of formal mediation vis-à-vis other forms of informal dispute resolution must be preserved and reported. The Secretary-General should also provide further information on expanding the mandate of the Office to include non-staff personnel and its financial obligations.
On the Ombudsman’s systemic observations, she said the Advisory Committee encourages the Secretary-General to provide information on measures taken to address systemic issues. As the Office should report on trends regarding cases involving racial discrimination while preserving confidentiality, the Advisory Committee looks forward to information on racism and those cases in the next report. She then underscored the importance of meeting the mental health and well-being needs of staff, stressing that all United Nations personnel should be able to work in a safe and enabling environment and come forward without fear of retaliation.
Mr. KHAN DURRANI (Pakistan), speaking again for the Group of 77 and China, emphasized the need to explore the resolution of work-related disputes while guaranteeing accountability and respect for the rights and obligations of staff members. There must be a sustainable, adequately resourced and decentralized system for administration of justice which is consistent with the relevant rules of international law and the principles of the rule of law. Such due process is vital for the effective management of the Organization’s most valuable asset, its human resources. In noting the role of the management evaluation function, he encouraged the Secretary-General to continue his efforts to reduce the backlog of Dispute Tribunal cases.
He then reiterated his support to the Office of the Ombudsman and Mediation Services as an informal resolution mechanism. As the positive trend of informal dispute resolution should be encouraged when appropriate, the Office should be strengthened, he said before expressing concern over the high turnover rate of staff and the unfilled posts at some regional offices. Turning to the Internal Justice Council, he said he would assess the report and analyse its recommendations to enhance performance and improve operational efficiency and transparency.
GINA ANDREA SCHMIED (Switzerland), speaking also for Liechtenstein, underlined the importance of fair, transparent, efficient and non-discriminatory access to justice in ensuring the effectiveness and credibility of the United Nations. Despite often facing the same problems as staff members, non-staff personnel do not have access to the internal system of the administration of justice, she noted. As this inequality must be addressed, she expressed her support for initiatives to provide effective protection and remedies to all categories of United Nations personnel without distinction. Such access to justice must be effective and affordable for all, she added.
Mediation as a method of resolving workplace disputes, she continued, must be strengthened as a quick and effective tool which often avoids long and costly litigation. The Secretary-General should promote the use of mediation by all categories of personnel, including non-staff, she encouraged while voicing support for increased awareness of the possibilities for informal dispute settlement within the Organization. Conversations regarding the possibilities of informal dispute settlement should be compulsory from the outset of the dispute resolution process and held before the initiation of a formal procedure, if possible, she added. Turning to the efforts to increase efficiency through digitalization, she welcomed the online portal of case law of the Dispute Tribunal and the Appeals Tribunal. This new tool, she commended, will have a positive contribution on the administration of justice in the Organization.