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Scale of Contributions 1994-95

285. The Conference took note that the Finance Committee and the Council had agreed that the FAO proposed Scale of Contributions for 1994-95 be derived from the UN Scale of Assessments in force for the three-year period 1992-94.

286. The Conference accordingly adopted the following Resolution:

Resolution 17/93

Scale of contributions 1994-95

The Conference,

Having noted the recommendations of the Hundred and Third Session of the Council,

Confirming that as in the past, FAO should follow the UN Scale of Assessments subject to adaptation for the different membership of FAO:

(Adopted 24 November 1993)

Financial Position of the Organization

a) Status of Contributions: Measures to Improve the Collection of Contributions

287. The Conference noted that the financial situation of the Organization continued to give cause for concern due to the non-payment or late payment of assessed contributions. The Conference considered the Director-General's proposal to allow Member Nations whose currency was not freely convertible as defined in Financial Regulation 5.6 to effect payment of their assessed contributions in their local currency, subject to criteria contained in the proposal.

288. In view of the nature of the proposal, the Conference decided that the matter required further technical analysis. It therefore requested that an in-depth review of the proposal and its implications in the light of the questions raised in the debate be submitted to the Spring 1994 Session of the Finance Committee, and its conclusions be submitted to the additional session of the Council to be held by May 1994.

289. Furthermore, in order to allow Member Nations to avail themselves eventually of this facility at the earliest possible date, the Conference agreed to delegate to the Council the authority to decide on the issue of derogation from Financial Regulation 5.6 and on the criteria under which this was to be made, such delegation to remain with the Council only until the next Conference, and with any decision taken by Council to be implemented on a trial basis until the matter has been addressed by the next Conference.

290. The Conference noted the status of contributions from Member Nations to the Budget of the Organization for 1993 (Appendix L). The Conference was advised that 79 Member Nations had made no cash payment at all as of 19 November 1993, while 69 Member Nations still had arrears outstanding. A total of US$157 million was still outstanding, of which US$50 million related to current assessments and US$107 million to arrears of contributions.

291. The Conference therefore urged all Member Nations to pay their outstanding contributions in full as soon as possible in order to ease the Organization's current liquidity problems and to continue in the fulfilment of its mandate.

Trust funds/support costs reimbursement

a) Background
b) Discussion
c) Conclusion

a) Background

292. The Conference recalled its decision at its last session in November 1991 that a study of arrangements for the reimbursement of Support Costs under FAO's Trust Fund Programme be undertaken, with a view to seeking a solution to this long-standing issue.

293. The Conference recognized that this study and the consideration of related proposals by FAO Governing Bodies, were timely at a juncture of changing patterns for technical cooperation activities in Member Nations. It underlined other major factors which were of particular importance to its present discussion: the recent introduction of new UNDP Support Cost Arrangements; the growing complexity of field projects and changing modalities for their implementation; the wish of the Director-General to ensure greater transparency and improved accountability of Trust Fund-supported operations; and, above all, the search for enhanced quality and relevance of FAO Trust Fund programmes.

294. The Conference observed that as a result of its own request, the issue had been the object of extensive intergovernmental discussions during the 1992-93 biennium, involving the Programme and Finance Committees and the Council. Accordingly, the above bodies had reviewed at their autumn 1992 sessions the results of a study on the costs incurred by FAO in support of Trust Fund projects, and a proposed methodology to achieve more appropriate reimbursement arrangements. The Conference further observed that this study had been prepared with the advice of an external consultant of international repute, who had also been involved in connection with similar studies in the UN system. At their subsequent spring 1993 sessions, these bodies had reviewed detailed preliminary proposals from the Director-General.

b) Discussion

295. The Conference noted that consultations on the thrust of possible new arrangements had been pursued with interested parties, especially representatives of a number of Member Nations which provided Trust Funds to the Organization. Regret was expressed, however, that the consultations had not been more extensive and, in particular, that the revised proposals had not been fully discussed with representatives of the donor community prior to their finalization

296. The Conference welcomed the opportunity to consider more refined proposals at its present session, in the light of views expressed throughout the above process.

297. The Conference recognized the significance of the matter, bearing in mind, in particular, the important share of Trust Fund-supported activities in the FAO's field programmes and the beneficial links with the Regular Programme.

c) Conclusion

298. In the light of the above, the Conference recognized that the problems relating to Trust Fund Support Cost reimbursement called for an urgent solution. The Conference recognized that the proposals of the Director-General, which had been progressively developed over a period of two years, aimed at valuable objectives in addressing these problems. These objectives were particularly: improving the quality of the Trust Fund Programmer ensuring a well balanced relationship between Trust Fund operations and the related contributions of the Regular Programme; enhancing transparency and accountability; and malting a determined impact on the reduction of administrative costs, while achieving greater efficiency.

299. The Conference took note that some delegates were in favour of full cost recovery. At the same time, the Conference took note of the concerns expressed by many contributors to the Trust Fund Programme as well as by recipient countries, and the difficulties of accepting the proposals as submitted. The Conference noted that these delegates had stated the need for corrective action to be taken and requested that more time be given to work out solutions acceptable to all interested parties. Many delegates who spoke also stressed the need to take into account the potential benefits of a unified approach in the UN system.

300. The Conference generally endorsed the objectives embodied in the proposals and noted that several delegates also endorsed the methodology and the principles of these proposals. It requested the Director-General to pursue consultations with all interested parties, with a view to arriving at a broad consensus solution which would reconcile the various points of view expressed.

301. The Conference requested the Director-General to report on the outcome of these consultations, through the Programme and Finance Committees to the Council at its additional Session in May 1994. It authorized the Council to endorse eventual newly-proposed arrangements on which consensus had been reached among interested parties for implementation on a trial basis until the Twenty-eighth Session of the Conference in November 1995.

Personnel matters

a) Recent Developments in the Activities of ICSC and the UN Joint Staff Pension Board
b) Methodology for the Calculation of the Pensionable Remuneration of the Director-General
c) Changes in Salary Scales and Allowances
d) Staff Post Adjustment Problems Arising from the Italian Lira Devaluation
e) Personnel Statistics
f) Statement of Staff Representative

a) Recent Developments in the Activities of ICSC and the UN Joint Staff Pension Board

302. The Conference was informed of the recent developments in the activities of the UN Joint Staff Pension Board (UNJSPB) and the International Civil Service Commission (ICSC). In particular the Conference noted that the ICSC, after having considered the Pension Board's views, had formulated recommendations to the General Assembly on all aspects of the methodology to determine pensionable remuneration for staff in the General Service and related categories. The Conference also noted that the ICSC had recommended to the forty-eighth Session of the General Assembly an increase in the base/floor salary scale of the professional and higher categories by 3.6 percent through the consolidation of post adjustment points on a no-gain/no-loss basis with effect 1 March 1994.

b) Methodology for the Calculation of the Pensionable Remuneration of the Director-General

303. In conformity with Rule XXXVI (c) of the General Rules of the Organization, the Conference reviewed the recent Resolutions of the General Assembly (Resolution 45/242 Section II, Resolution 46/192 Section III and Resolution 47/203 Section IV) that dealt with the pensionable remuneration and pension of the Executive Heads of the Specialized Agencies, including the Director-General of FAO. The Conference endorsed the methodology for determining and adjusting the pensionable remuneration of officials appointed or elected to ungraded posts, including the Director-General, as recommended by the International Civil Service Commission and endorsed by the General Assembly, and informed the General Assembly, the International Civil Service Commission and the UN Joint Staff Pension Board of the action taken in this regard.

304. The Conference, recalling that the General Assembly's preference was that ungraded officials should become participants in the UN Joint Staff Pension Fund, also recommended that future Directors-General could EITHER (a) become participants in the United Nations Joint Staff Pension Fund, OR (b) have arrangements made outside the Fund in accordance with the scheme set out in UN General Assembly Resolution 47/203 Section IV, sub-para. 1., whereby an annual pensionable remuneration was established and the equivalent of the Organization's contribution to the UN Joint Staff Pension Fund was paid to the Director-General in monthly instalments as a supplement to his remuneration; the choice between options (a) and (b) would be made at the time of adopting the resolution on the appointment of the Director-General, after consultation with the Director-General Elect.

305. The Conference noted that Article 28(d) of the Regulations of the UN Joint Staff Pension Fund had been amended to extend the ceiling on pensions to the Director-General.

c) Changes in Salary Scales and Allowances

306. The Conference noted the evolution of the Rome post adjustment classification, as determined by the ICSC. It was informed that in March 1993, an increase of a partial class of post adjustment due to inflation had been granted concurrent with the consolidation of 6.9 percent of post adjustment into base salaries. It was also informed that from April 1993, the multiplier paid included the special measure approved by the ICSC at its March 1993 session. The Conference was informed that an increase of 3.38 percent in net salaries of General Service staff in Rome had become due effective 1 June 1993.

d) Staff Post Adjustment Problems Arising from the Italian Lira Devaluation

307. The Conference was informed that the ICSC had approved an ad hoc special measure to address the negative impact of the devaluation of the Italian lira on the remuneration of staff in the professional and higher categories and the Organization's ability to recruit and retain staff. The Conference was also informed that the special measure adopted by the ICSC was deemed to have done little to provide relief to staff or to improve the Organization's ability to compete for high quality staff. In this regard, the Conference noted that the Council had agreed to mandate the Secretariat to pursue the issue with the ICSC to evaluate the situation in greater detail, and had further suggested that it would be useful to have a new in-depth cost-of-living survey.

308. The Conference was informed that at the Thirty-eighth Session of the ICSC (July 1993), at the request of FAO, the issue of the special measure applied to the Rome post adjustment had been added to the ICSC agenda. Following considerable discussion, the ICSC had concluded that sufficient new elements had not been presented which would warrant a revision of its earlier decision. At this same Thirty-eighth Session, however, the ICSC had confirmed arrangements necessary for the conduct of the next round of place-to-place cost-of-living surveys beginning in 1994.

309. The Conference noted that, as the Commission had decided not to improve the special measure, the Organization had been left in a situation where it was at a loss to consider what measures it could take, further to those already pursued to redress these problems, other than to await the results of the next place-to-place (Rome/New York) cost-of-living survey arranged to take place early in 1994.

e) Personnel Statistics

310. The Conference noted the Council had reviewed the data relating to the number of established posts and other forms of personnel services in use in FAO as at 30 June 1993, and had requested that corresponding information on filled posts be provided in future reports on personnel statistics.

f) Statement of Staff Representative

311. The Conference heard the statement made by one representative on behalf of the three staff associations and expressions of concern regarding their conditions of service. As regarded staff in the field, who often worked under difficult conditions affecting their personal security and health, the major concern was the decline in job security brought about by the overall reduction in both the number of field projects, and the use of long-term, international project personnel. Further, the representatives viewed the situation in respect to salaries and pensions of both the Professional and General Service staff as very serious and requiring the attention of the Member Nations to ensure a decent level of living for those already employed, as well as encouraging highly-qualified people to apply for positions with the Organization. The declining remuneration was nowhere felt more keenly than in Rome. The representatives of the staff associations recalled the Council Resolution 1/102 of 9 November 1992, and suggested that the issues of career development, training, performance appraisal and awards, better selection procedures and job classification be actively pursued in a framework of dialogue with the staff.

Commissary accounts

312. The Conference considered the proposal made by the Director-General, and supported by the Council, and adopted the following resolution:

Resolution 18/93

Commissary accounts

The Conference,

Having noted that over the past years the Commissary had obtained specific authorization to establish certain reserve accounts, which are reflected in the annual financial statements,

Recognizing that in consideration of the commercial nature of the Commissary operations, it would be useful to grant Senior Management, in consultation with the Finance Committee, greater discretion over related decisions,

Decides that:

(Adopted 24 November 1993)

313. During the debate preceding the adoption of the Resolution, the question of the transfer of the Commissary Annex at Via Cristoforo Colombo to the future WFP premises was raised. A final decision on this matter would depend inter alia: on the coming into force of the WFP Headquarters Agreement, at which time WFP would have the right to run its own Commissary; on the exact location of the future WFP premises; and on the economic viability of such an Annex. It was pointed out that the Commissary had never operated on the assumption that all outlying premises occupied by entitled staff had to be serviced by a Commissary Annex. In this context, it was recalled that when AO was occupying premises at Via del Giorgione, no Commissary Annex had been established there as it had been found uneconomical.

314. One delegation raised questions and received answers relating to the Commissary accounts like amount and utilization of surplus, rent for Commissary space paid to the Organization, personnel paid by the Commissary and working for other purposes and rents paid by the Organization for external storage.

Assessed Contribution of Czechoslovakia

315. The Conference recalled that the Czechoslovak Federation had been formally dissolved at midnight 31 December 1992, and as of that time, Czechoslovakia had ceased to exist. The dissolution had given rise to the birth of two new independent states, the Czech Republic and the Slovak Republic. Neither of the individual successor states was recognized under the law dissolving the Federation as being the sole continuation of the former Czechoslovakia, and neither was allowed to use any of the symbols. The Conference further noted that the Czech and Slovak Republics had been admitted to membership of the Organization at its current session.

316. The Conference noted that the assessed contribution of former Czechoslovakia for the 1992-93 biennium stood at a figure of US$2 439 206 a year, and that it had paid its contribution for the year 1992.

317. The Conference noted that the CCLM and the Council had considered in depth certain questions relating to the obligation to settle the assessed contribution of Czechoslovakia for 1993 and the treatment of the advance to the Working Capital Fund.

318. The Conference endorsed the recommendations of the Council. Accordingly, the Conference decided that Czechoslovakia was not under a legal obligation to pay the 1993 assessed contribution to FAO and that the amount of the contribution, US$2 439 206, should be written off. It further decided that the residual balance to the former Czechoslovakia in the Working Capital Fund should be credited to the Czech and Slovak Republics, in proportion to their assessed contributions, firstly in payment of their advances due to the Working Capital Fund, and secondly as partial payment of their assessed contributions for the last quarter of 1993.

Payment by the European Economic Community to cover Administrative and other Expenses Arising out of its Membership in the Organization

319. The Conference recalled that Article XVIII.6 of the Constitution provided that a Member Organization shall not be required to contribute to the budget, but shall be required to "pay to the Organization a sum to be determined by the Conference to cover administrative and other expenses arising out of its membership in the Organization". Prior to the admission of the European Economic Community (EEC) to membership in the Organization at the Twenty-sixth Session of the Conference in November 1991, the Conference on the recommendation of the General Committee, had set the sum payable for administrative expenses at the level of US$500 000 for the 1992-93 biennium. The Conference had directed that this sum should be paid into the General Fund of the Organization. The Twenty-sixth Session of the Conference realized, however, that other expenses would be likely to arise out of the membership of the EEC in the Organization which could not be quantified at the time. The Conference had therefore requested the Director-General to quantify such other expenses, in consultation with the Member Organization concerned, and to report on this matter to the Finance Committee. The Conference had further decided that the sum payable in respect of other expenses, should be paid into a Trust Fund that could be used to defray the cost of these other expenses.

320. The Conference further recalled that the Finance Committee had recommended the adoption of a methodology for the calculation of "administrative expenses" that would base the calculation of "administrative expenses" on an extrapolation from the administrative costs payable by the other Members of the Organization that were required to contribute regularly to the budget. Under the methodology recommended by the Finance Commit tee then, "administrative expenses" payable by Member Organizations would be calculated on the basis of the total budget for Chapters 1 and 5.1 divided by the total number of Member Nations contributing to the budget. At its Hundred and Fourth Session in November 1993, several members of the Council considered it difficult to endorse the recommended methodology because they felt that the recommended new formula would be inconsistent with Article XVIII.6 of the Constitution. The matter had therefore been referred to the Conference to take such action as it saw fit.

321. The Conference took the following decisions on this matter:

The sum to be paid by the EEC for the 1994-95 biennium

Noting that consensus had not yet been reached on a methodology for the calculation of "administrative expenses" for the 1993-94 biennium, the Conference determined, as it had done for the 1992-93 biennium, that the sum to be paid by the EEC to cover the administrative expenses for the 1994-95 biennium should take the form of a lump-sum payment.

In view of the difficulties that had arisen during the current biennium in quantifying the "other expenses" that had arisen out of the membership of the EEC in the Organization, the Conference decided that the lump-sum should in principle cover all administrative and other expenses arising out of that membership, with the exception of services not normally granted to FAO Members without special payment, such as the expenses of courier delivery of documents, as requested by the EEC.

Taking into account on the one hand cost increases and on the other hand the substantial rise in the value of the dollar against the Italian lira, the Conference decided that the amount of the lump-sum payment to be made by the EEC to cover administrative and other expenses arising out of its membership in the Organization be set at US$500 000 for the 1994-95 biennium.

The destination of sums paid by the EEC to cover "administrative and other expenses"

In view of its recommendation to cease to differentiate between "administrative" and "other" expenses, the Conference further decided that for the 1994-95 biennium the sums paid by the EEC in respect of administrative and other expenses should be paid into a trust or special fund to be established by the Director-General under Regulation 6.7 of the Financial Regulations.

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