1. Financial Regulation (FR) 4.6 requires the Director-General to manage the Appropriations so as to ensure that adequate funds are available to meet expenditures during the biennium, and calls for the Finance Committee to review annually the Director-General's implementation of this regulation. In accordance with this requirement, this Thirty-fourth Annual Report of Budgetary Performance summarises, for information and discussion, the budgetary aspects of the Regular Programme performance for 2000.
2. Financial Regulation 4.5(a) calls for Finance Committee to be notified of certain transfers between divisions, and Financial Regulation 4.5(b) requires transfers from one chapter to another to be approved by the Finance Committee. This report also provides some advance notice of the likely magnitude of budgetary transfers arising from the implementation of the Programme of Work. A formal request for transfers between chapters will be submitted at the next session, in September 2001.
3. Conference Resolution 2/99 on the Budgetary Appropriations for 2000-01 approved a budget of US$650 million, and FR 4.1(a) authorises the Director-General to incur obligations up to the amounts voted.
4. The Director-General manages the Appropriations via annual Regular Programme allotments issued by the Office of Programme, Budget and Evaluation (PBE) to allottees. The allotments include financial provision for under-budgeted activities, where appropriate, and are adjusted during the implementation cycle to take account of emerging requirements. They constitute spending limits for allottees, by programme heading.
5. The Appropriations comprise the approved Programme of Work less Other Income1/. Table 1 summarises the management of the overall budgetary Appropriations. The 2000 performance is based on the actual expenditure in the interim unaudited accounts of the Organization, and the 2001 figures present the latest Regular Programme financial projections.
Table 1. Overview of 2000 Regular Programme Performance (US$ 000)
|Programme of Work||368,098||366,354||734,452|
|Less Other Income||(42,226)||(42,226)||(84,452)|
|Appropriation adopted by Conference Resolution 2/99||325,872||324,128||650,000|
|Less TCP Projects (Major Programme 4.1)||44,559||44,559||89,118|
|Adjusted Net Appropriation||281,313||279,569||560,882|
|Net Expenditure (excluding TCP projects budget)||258,519||302,063||560,582|
|Expenditure vs. Net Appropriation||22,794||
6. The following points are made regarding the performance indicated in the preceding table.
7. In accordance with FR 4.1(a), shortfalls in Other Income versus the budgeted levels require corresponding reductions in planned expenditure during the biennium to remain within the approved budgetary Appropriation of US$ 650 million. The outturn for 2000 is summarised in Table 2, and shows an overall shortfall of US$0.9 million, or 97.7%, of the total budgeted income as having been earned. As this outcome was foreseen, corresponding reductions in the Programme of Work (i.e. expenditure) could be managed in a planned fashion.
Table 2. 2000-01 Budgetary Performance of Other Income3/
2000 INCOME (US$ 000s)
|Description||Budget||Actual||Variance||Actual as % of Budget|
|Trust Funds and UNDP Support Cost Income||(18,426)||(14,226)||(4,200)||77.2%|
|Jointly funded investment activities (World Bank and others)||(13,423)||(17,050)||3,627||127.0%|
|Technical support services and other reimbursements||(5,641)||(5,356)||(285)||94.9%|
8. Support cost reimbursements are essentially earned in proportion to the actual expenditure on non-emergency Trust Fund projects4/ and United Nations Development Programme (UNDP) projects implemented or executed by FAO. The shortfall versus budgeted support cost income totals US$4.2 million. This is a result of a further decline in 2000 in UNDP project delivery, which fell by 30% to US$17 [MJ1] million, while non-emergency Trust Fund delivery failed to rise beyond the overall levels achieved in 1999.
9. Reimbursements for Jointly Funded Investment Activities relate to the work of the Investment Centre Division (TCI) in support of lending activities for the agricultural/rural sector under cost sharing arrangements from the World Bank and other multilateral financial institutions. An over-recovery of US$ 3.6 million emerged in 2000. This is due to a timing difference in the processing of expenditure and income of the World Bank Cooperative Programme, where FAO and the World Bank follow a different fiscal year (the World Bank's fiscal year is from July to June)5/. It does not affect net performance as timing differences occur equally in income and expenditure.
10. Other external income includes: fees for technical support services; income from terminal project reports; reimbursements for administrative services to the World Food Programme (WFP); and Government Counterpart Cash Contributions to FAOR offices. In 2000, a minimal shortfall has occurred (US$ 0.3 million) versus the budgeted income. It is recalled that the 2000-01 budget for this category of income was reduced by approximately 30% since 1998-99, in order to bring the provision more in line with actual reimbursements.
11. Table 3 summarises the Regular Programme budgetary performance by major programme. It compares the Appropriation as revised6/ pertaining to 2000 with the corresponding net expenditure and describes the main reasons for the variances against the programme budget.
Table 3. 2000 Budgetary Performance by Major Programme (US$ thousands)
|Chapter/Major Programme||2000 Appropriation as Revised||2000 Expenditure/ Commitments||Balance vs. Appropriation||% Appropriation Spent|
|1. General Policy and Direction|
|1.1 Governing Bodies||8,077||7,690||387||95.2%|
|1.2 Policy, Direction and Planning||10,076||9,342||734||92.7%|
|1.3 External Coordination and Liaison||6,351||4,351||2,000||68.5%|
|1.9 Programme Management||395||463||(68)||117.2%|
|Total Chapter 1||24,899||21,846||3,053||87.7%|
|2. Technical and Economic Programmes|
|2.1 Agricultural Production and Support Systems||44,215||38,477||5,738||87.0%|
|2.2 Food and Agriculture Policy and Development||42,811||37,364||5,447||87.3%|
|2.5 Contributions to Sustainable Development and Special Programme Thrusts||23,620||22,279||1,341||94.3%|
|Total Chapter 2||145,073||131,406||13,667||90.6%|
|3. Cooperation and Partnerships|
|3.1 Policy Assistance||13,097||12,313||784||94.0%|
|3.2 Support to Investment||9,420||7,754||1,666||82.3%|
|3.3 Field Operations||3,461||3,268||193||94.4%|
|3.4 FAO Representatives||31,597||29,749||1,848||94.2%|
|3.5 Cooperation with External Partners||3,164||3,578||(414)||113.1%|
|3.9 Programme Management||328||611||(283)||186.3%|
|Total Chapter 3||61,067||57,273||3,794||93.8%|
|4. Technical Cooperation Programme|
|4.1 Technical Cooperation Programme||44,559||44,582||(23)||100.1%|
|4.2 TCP Unit||1,168||1,145||23||98.0%|
|Total Chapter 4||45,727||45,727||-||100.0%|
|5. Support Services|
|5.1 Information and Publications Support||8,280||7,858||422||94.9%|
|Total Chapter 5||29,145||27,988||1,157||96.0%|
|6. Common Services||19,961||18,838||1,123||94.4%|
|Grand Total Regular Programme||325,872||303,078||22,794||93.0%|
12. General Policy and Direction utilised 87.7% of its 2000 Appropriation. Under-spending arose in Major Programme 1.2, Policy, Direction and Planning, due to a carry forward to 2001 of a 2000 instalment payment to External Audit, and due to professional staff vacancies in PBE which were not utilised for other inputs. Under-spending in Major Programme 1.3, External Coordination and Liaison, was the result of a delay in receipt of accounting documentation to permit processing of payments of the Organization's financial contribution to inter-agency coordination mechanisms, and rental payment for the premises of one Liaison Office. Funds are expected to be utilised in 2001.
13. Technical and Economic Programmes were under-spent by US$13.7 million, utilising 90.6% of the Appropriation.
14. Approximately US$3.1 million of the under-spending can be explained by the planned reduction to the allotments, implemented on the basis of vacant professional posts, and the reduction to certain non-staff components. These cuts were required to cover expected shortfalls in Support Cost Income and to compensate for under-budgeted, high-priority programmes in other chapters.
15. The remaining under-spending was mainly incurred under Major Programmes 2.1, Agricultural Production and Support Systems, and 2.2, Food and Agriculture Policy and Development:
16. Cooperation and Partnerships utilised 93.8% of the 2000 Appropriation, due to under-spending mainly in Major Programmes 3.2, Support to Investment, and 3.4, FAO Representatives. In both major programmes, some of the under-spending can be attributed to 2000 non-staff costs being posted against the 2001 financial accounts. Furthermore, in Major Programme 3.4, staff cost savings were incurred due to exchange rate gains on non-staff costs, as the dollar strengthened against most currencies where FAOR offices are located.
17. Major Programme 3.3, Field Operations, has undergone the restructuring anticipated, but not fully developed in the Programme of Work and Budget (PWB) 2000-01. This entails abolition of the Regional Operations branches and transfer of project operational responsibility to country offices and technical officers, as well as related restructuring of the Technical Cooperation Department (TC). While this work is proceeding according to plan, it is recalled that over 40% of the total support cost income in the PWB 2000-01 is allocated to Major Programme 3.3 and the resulting impact of the support cost shortfall of US$4.2 million is approximately US$ 1.8 million.
18. The restructuring of AFF was completed in 2000, but the division has faced difficulty in filling 11 additional professional positions approved under the new structure. Notwithstanding the surplus against the Chapter 5 Appropriation in 2000, it is recalled that substantial expenditure beyond the total Appropriation for Major Programme 5.2 is foreseen in 2001 for the Oracle development project7/.
19. Expenditure of 94.4% of the Appropriation in Chapter 6 arises from under-spending in the Administrative Services Division (AFS) where outstanding work orders for buildings maintenance work were not processed at year-end, and some favourable currency effects were recorded against Headquarters non-staff expenditure because of the stronger US Dollar versus the Lira.
20. There is no constitutional constraint as regards spending by expenditure category; the Organization is free to choose the most effective inputs to fulfil the approved Programme of Work. However, a review of spending by account can provide useful indications of cost fluctuations and trends. A review of the Regular Programme expenditure in 2000 (excluding TCP projects), by account and a brief description of trends emerging in the 2000-01 biennium, is covered in Appendix I.
21. The year 2000 actual expenditure and the estimated requirements for the second year of the biennium, tentatively indicate that transfers will be required principally in favour of Chapter 1 (US$0.4 million), Chapter 3 (US$2.3 million) and Chapter 5 (US$3.7 million). Resources would need to be transferred from Chapter 2 (US$6.1 million). Funds transferred from Chapter 2 amount to less than half of the 2000 under-spending for that chapter.
Table 4. 2000-01 Forecasted Budgetary Performance by Chapter (US$ million)
|Chapter/Title||2000-01 Appropriation||2000-01 Expenditure/ Commitments||Balance vs. Appropriation|
|1. General Policy and Direction||50.9||51.3||(0.4)|
|2. Technical and Economic Programmes||289.2||283.1||6.1|
|3. Cooperation and Partnerships||120.6||122.9||(2.3)|
|4. Technical Cooperation Programme||91.5||91.5||0.0|
|5. Support Services||57.3||61.0||(3.7)|
|6. Common Services||39.9||39.6||0.3|
|Grand Total Regular Programme||650.0||649.7||0.3|
|* Contingencies is used to offset unforeseen expenditure under Chapter 5|
22. The transfer into Chapter 1 is mainly required for the funding of temporary administrative posts in the Office of the Director-General, several of which are proposed to be regularised in the PWB 2002-03. The transfer into Chapter 3 is necessitated by the substantial effect of the deficit on support cost reimbursements (currently estimated at US$7.7 million for the biennium) on this chapter. Finally, the transfer into Chapter 5 is required due to incremental costs associated with the Oracle project and AFF restructuring. The amount is consistent with information provided to the Joint Meeting at its September session8/.
23. Half of the approved budget for Chapter 7, which provides US$ 600 000 for Contingencies, is planned to be spent. As stated in Financial Regulation 4.5(c) (i), "the expenditure of any sum (or part thereof) which may have been voted in the budget to cover unforeseen contingencies may be effected by the Director-General." The contingency funds will be used to help offset some incremental Oracle costs in Chapter 5.
24. The level of transfers may yet be influenced by:
25. A formal request for transfers between chapters will be submitted at the next session in September 2001.
26. Financial Regulation 4.5(a) requires certain transfers between divisions within the same chapter to be reported.
27. In this connection, it is noted that, during 2000, in order to better align technical expertise in the decentralized locations:
28. As intimated to the Conference in 1999, further transfers between divisions are foreseen in the context of restructuring of the TC Department, to strengthen its capacity to develop, coordinate and monitor the field programme and reverse the current declining trend in non-emergency field activities funded from external sources. The restructuring will primarily affect the Field Operations Division (TCO) and the Office of Assistant Director-General (TCD), but may also extend to the Policy Assistance Division (TCA) in the latter part of 2001. The proposals will be reflected in the Programme of Work and Budget 2002-03.
29. At its November 1999 session, the Conference authorised the advance of funds from the Working Capital Fund up to an amount of US$9 million to cover redeployment and separation costs to complete restructuring pending the eventual receipt of assessed contributions in arrears from the major contributor9/.
30. Major restructuring actions in 2000-01 include the abolition of the Management Support Units at Headquarters and the creation of a centralised Management Support Service (MSS); the implementation of new arrangements for the field programme (affecting both Headquarters and decentralized offices); and the restructuring of AFF.
31. Based on current estimates, some 243 staff members are potentially eligible for incurring redeployment and separation costs under the US$9 million authority. However, 129 cases have been settled at no cost to the authority, essentially through placements to budgeted posts. Consequently, a total of 114 cases will need to be resolved at some cost to the US$9 million authority.
32. Of these 114 cases, 86 were resolved in 2000. A sum of US$3.6 million has been charged to the US$9 million authority in 2000, mainly in salary costs for staff members awaiting redeployment, in addition, termination indemnities amounting to US$1.2 million have been settled, bringing the total redeployment and separation costs for cases resolved in 2000 to approximately US$4.8 million.
33. In view of the foregoing, funds provided under the US$9 million authority are expected to be almost fully exhausted in 2000-01.
34. At its May 2000 session, the Finance Committee enquired whether, under the terms of Financial Regulation 4.5(b), it could take the initiative of proposing transfers from one chapter of the budget to another10/.
35. Following advice from the Legal Counsel, it is noted that transfers between chapters of the budget are effected upon proposal by the Director-General and that, while the Finance Committee and the Council have the power to approve those transfers, Financial Regulation 4.5(b) is not intended to confer upon the Finance Committee any power of initiative on the matter. A power of initiative of the Finance Committee on the matter would extend beyond its prerogatives of control over the financial administration of the Organization and conflict with the management authority of the Director-General to direct its work, including the execution of the budget. This arrangement is in line with the financial procedures and practices of other organizations of the United Nations system, for example, with Financial Regulation 4.5 of the United Nations and Financial Regulation 4.5 of the World Health Organization.
36. This report is submitted for information purposes. The Committee is requested to:
Table 5. 2000 Regular Programme Expenditure Summary (excluding MP 4.1) (US$ 000)
|Description||2000 Oracle Appropriation||2000 Financial Performance||2000 Balance vs. Appropriation||% Calendarised Appropriation Spent in 2000|
|Other Human Resources||37,160||40,434||(3,274)||108.8%|
|Other (Incl. Internal Transfers)||29,143||22,776||6,367||78.2%|
|Less External Income||(37,490)||(36,632)||(858)||97.7%|
|* General Operating Expenses (GOE) total also includes General Overhead Expenses, as well as Expendable and Non Expendable Procurement costs.|
37. From 2000, all charges for staff costs against divisional budgets have been made at standard rates that take account of the grade and duty station of the staff member. This ensures that allottees are not held accountable for unit cost variations that are outside their control, arising from matters such as changes in salaries and allowances determined by the International Civil Service Commission (ICSC) and exchange rate variations.
38. Differences between the overall standard costs and actual Regular Programme costs are monitored by the Office of Programme, Budget and Evaluation and will be charged in the financial accounts over all programmes in proportion to the amounts incurred at standard rates. Based on current trends, the actual costs incurred in the biennium should be lower than the standard rates applied against the budget. However, this forecast is tentative and will need to be monitored in the light of exchange rate movements during 2001, and the results of Headquarters salary surveys of professional and general service staff which are due shortly.
39. The total staff appropriation, which includes professional and general service staff costs, was underspent by approximately 8.5% (US$19.7 million) in 2000, principally reflecting professional staff vacancies. Some of staff savings were necessary to compensate for the reduced levels of External Income. Other savings were generated, via reduced allotments, for application of resources to under-budgeted programmes and activities.
40. Approximately 96% of the non-staff appropriation was spent in 2000, reversing the trend of the past biennium when non-staff expenditure exceeded the appropriation. This is likely to be due to the introduction of the automatic carry-over of divisional under-spending, via the allotments, into the second year of the biennium, which has reduced the pressure on allottees to commit funds in the final two months of the year in favour of spreading their expenditure plans into the first part of 2001.
1/ Other Income is further described in paragraphs 7 through 10.
2/ The breakdown of the approved budget between 2000 and 2001 takes account of the timing of the Regional Conferences and the FAO Conference in the first and second year of the biennium respectively, and assumes that all other programmes incur expenditures evenly throughout the biennium.
3/ In arriving at the 2000 Appropriation for Other Income, adjustments have been made for those elements that are accounted as Trust Funds in the accounts of the Organization. This is necessary to provide a comparable basis of relating the Appropriation with the expenditure reported in the audited accounts of the Organization.
4/ Emergency projects are carried out by the Special Relief Operations Service (TCOR). They have shown a substantial rise in delivery due to the Oil for Food programme in Iraq. FAO earns Direct Operating Costs from emergency projects, which are excluded from the tabulated support cost reimbursement figures as the policy for reimbursement of cost is that they should cover TCORs direct costs.
5/ It is recalled that in the 1998-99 accounts, an under-recovery of US$3.9 million was recorded under jointly financed investment activities.
6/ The Appropriation as revised constitutes the approved budget by chapter following re-programming of resources to reflect the adoption of the budget at an exchange rate of Lira 1875 to the US Dollar (document FC 94/5 refers).
7/ Document JM 2000/3, FAOs New Financial System and Procedures, refers.
8/ Document JM 2000/3 refers.
9/ Conference Resolution 3/99 refers.
10/ Financial Regulation 4.5(b) reads as follows:
4.5(b)(i) Transfers from one chapter of the budget to another relating to expenditures which would not involve additional financial obligations for Member Nations and Associate Members, either current or future, may be effected by the Director-General after having obtained the approval of the Finance Committee, or by the Council between sessions of the Finance Committee.
4.5(b)(ii) Transfers from one chapter of the budget to another, other than those for which the Finance Committee has authority, may be effected by the Director-General after having obtained the approval of the Council.
(2000-2001 Scale shown for comparative purposes)
|Member Nations||2003 a/||2002 a/||2001 /a||2000 b/|
|Antigua and Barbuda||0.00201%||0.002%||0.002%||0.002%|
|Bosnia and Herzegovina||0.00402%||0.004%||0.004%||0.005%|
|Central African Republic||0.00100%||0.001%||0.001%||0.001%|
|Congo, Democratic Republic of||0.00402%||0.004%||0.004%||0.007%|
|Democratic People's Republic of Korea||0.00905%||0.009%||0.009%||0.015%|
|Iran, Islamic Republic of||0.27365%||0.238%||0.255%||0.162%|
|Korea, Republic of||1.86223%||1.877%||1.739%||1.011%|
|Papua New Guinea||0.00604%||0.006%||0.006%||0.007%|
|Saint Kitts and Nevis||0.00100%||0.001%||0.001%||0.001%|
|St Vincent & Grenadines||0.00100%||0.001%||0.001%||0.001%|
|Sao Tome and Principe||0.00100%||0.001%||0.001%||0.001%|
|Saudi Arabia, Kingdom of||0.55736%||0.562%||0.560%||0.565%|
|The Former Yugoslav Republic of Macedonia||0.00604%||0.006%||0.006%||0.004%|
|Trinidad and Tobago||0.01610%||0.016%||0.016%||0.016%|
|United Arab Emirates||0.20324%||0.205%||0.205%||0.179%|
|United States of America||22.000%||22.000%||22.000%||25.000%|
|a/ Derived directly from the UN Scale of Assessments for 2001-2003 as adopted by General Assembly Resolution 55/5B of 22 December 2000.|
|b/ Derived directly from the UN Scale of
Assessments for 2000 as adopted by General Assembly Resolution 52/215 of 22 December 1997.
1. By Resolution 9/99 entitled "Scale of Contributions 2000-2001" of 19 November 1999, the Conference adopted, for use in 2000 and 2001, a Scale of Contributions, as set out in Appendix G of its Report, derived directly from the United Nations Scale of Assessments in force for 2000. The Resolution decided that "if the United Nations General Assembly adopts a new United Nations Scale of Assessments for the years 2001 to 2003 before 31 December 2000, the Director-General shall prepare a modified Scale of Contributions for the year 2001 to reflect the Scale of Assessment for that year fixed by the United Nations General Assembly, applying established principles for adjusting the FAO Scale of Assessment to take into account differences in membership between the United Nations and FAO". Since, by Resolution 55/5B of December 2000, the United Nations General Assembly adopted a new Scale of Assessment for the year 2001, the Director-General applied for the year 2001 this new Scale, as adjusted to take into account differences in membership between FAO and the United Nations.
2. The first question raised by the distinguished representative of the Republic of Korea is that Conference Resolution 9/99 adopted for use in 2000 and 2001 the Scale of Contributions as set out in Appendix G of the Report of the Conference. Under Resolution 9/99, the Director-General was only required to "prepare" a modified Scale of Contributions for the year 2001 in the event that the United Nations General Assembly should adopt a new Scale of Assessment for that year. However, Conference Resolution 9/99 did not "adopt" the Scale of Contributions so prepared, and consequently, the Director-General was not required to implement it.
3. The Director-General cannot concur with this interpretation.
4. First of all, it should be noted in general that Conference Resolution 9/99 is a single resolution that must be seen as a whole, without dissociating its operative paragraphs 1 and 2, which were both adopted under Article XVIII - 2 of the FAO Constitution, whereby the Conference is required to adopt a scale of contributions for the financing of the budget. In particular, an interpretation whereby the Director-General would be merely required to "prepare" for 2001 a revised Scale of Contributions, without actually implementing it, would lead to the unreasonable result where, notwithstanding clear instructions given by the Conference with respect to the Scale of Contributions for 2001 following a long debate, the Director-General would perform a purely theoretical exercise. Such a result could in no way have been the intent of the Conference, in adopting Resolution 9/99, at its Thirtieth session.
5. This is clear from the consideration of the preparatory work for the resolution, as well as of all the relevant circumstances, as reflected, in particular in the verbatim records of the Twenty-ninth and Thirtieth Session of the FAO Conferences in 1997 and 1999. In both sessions of the Conference the debates were held in the same terms, nothwithstanding the fact that this note refers mainly to the debate of 1997.
6. In 1997, the Conference noted that it had been the normal practice of the Organization to derive the Scale of Contributions for the following biennium directly from the UN Scale of Asssessments, in force during the calendar year of the Conference Session, but that this practice had not always been followed, depending on particular decisions of the Conference. On that occasion, the Conference also noted that substantial changes to the UN Scale of Assessments were under discussion by the United Nations General Assembly. The Conference adopted a resolution, based on a proposal of the United States of America, whereby it decided that "if the United Nations General Assembly adopt(ed) a new United Nations Scale of Assessments for the years 1998 to 2000 before 31 December 1998, the Director-General shall prepare a modified Scale of Contributions for the year 1999 to reflect the Scale of Assessment for that year fixed by the United Nations General Assembly, applying established principles for adjusting the FAO Scale of Assessment to take into account differences in membership between the United Nations and FAO"1/. The Conference, at its Thirtieth session in 1999, adopted a resolution with the same content, mutatis mutandis2/.
7. Both resolutions were adopted following a debate in the course of which the Conference considered in great detail the range of issues involved. In particular, the question was raised as to whether the resolution "was consonant and consistent with Article XVIII.2 of the Constitution" requiring the Conference to apportion the budget among the members.
8. On both occasions, the Conference noted the opinion of the Legal Counsel, as follows: "It is clearly yes because the Conference is taking a clear and detailed decision as to how the budget should be apportioned among its member states for the year 1999. It is not leaving any doubt about it. It is saying you must use a scale which is set out in the annex to the resolution. If a certain event happens before 31 December 1998, then you must insert the modifications necessary to bring it into line with the scale adopted by the United Nations for 1999. It is a mechanical operation to do that. This is not something that requires the discretion of the Director-General or a delegation of power to the Director-General to do this. It is a purely mechanical application (...). As long as the decision is taken here by the Conference as to exactly how it should be done and that is set out in the resolution, then it is a purely mechanical operation to perform the calculation. It is not an exercise of discretion in any way by the Director-General. Of course, that is merely the legal point of view. The political point as to whether you wish to adopt that is not for me to comment upon"3/. During the debates held at the Thirtieth Session of the Conference in 1999, the Legal Counsel referred in detail to the discussions and the legal position presented in the course of the previous session of the Conference4/.
9. On both occasions, it was also clarified that by adopting the Resolution, the Conference would be "taking a clear and unambiguous decision with respect to the apportionment". The Conference was deciding how the apportionment should be done, subject to a condition that if the United Nations adopted a new scale, the approved figures would be changed accordingly5/.
10. In light of the foregoing, it is the Director-General's view that he was bound by the clear and unambiguous decision taken by the Conference, through Resolution 9/99, under the terms of Article XVIII-2 of the Constitution. This required him to apply, in 2001, the Scale of Contributions adopted by the United Nations General Assembly in December 2000, as amended to take account of differences in membership between the United Nations and FAO. In particular, the Director-General is of the view that he had no discretion whatsoever not to have applied the new Scale of Contributions as he did. Had he done so, he would have not acted in conformity with the provisions of Rule XXXVII.1 of the General Rules of the Organization, whereby, as the executive officer of FAO, "(he) (...) shall (...) carry out the decisions of the Conference and Council". In this connection, the Director-General notes that a number of Members have already effected payment of their contributions on the basis of the Scale of Contributions as in force 2001.
11. The second question raised by the distinguished representative of the Republic of Korea is that when the Conference adopted Resolution 9/99 it could not know that the General Assembly would be applying transitional measures to address the increases in contributions for some Members arising from Resolution 55/5B. Therefore, the distinguised representative of the Republic of Korea enquires "why doesn't FAO take a transition measure?"
12. The Director-General was required to apply in 2001 a modified Scale of Contributions reflecting the Scale of Assessment for this year fixed by the United Nations General Assembly, applying established principles for adjusting the FAO Scale of Assessment to take into account differences in membership between the United Nations and FAO. In doing so, the Director General was required to use the new Scale of Assessment to the exclusion of other elements which, while important, were not an integral part of that Scale.
13. Thus, in determining what constituted the United Nations Scale of Assessment, the Director-General considered operative Paragraph 7 of Resolution A/55/5B, which states clearly:
"(The General Assembly) resolves that the scale of assessment for the contribution of Member States to the regular budget of the United Nations for the year 2001, 2002 and 2003 shall be as contained in annex II".
14. Consequently, in implementing Conference Resolution 9/99, the Director-General could not take into consideration any elements that were outside the Scale of Contributions, as set out in annex II of Resolution 55/5B, including the transitional measures adopted by the General Assembly. In addition, those measures were the direct result of negotiations of a political nature, reflecting to some exent the particular situation of the United Nations, outside the scope of the Scale of Contributions.
15. The Director-General's position on the matter is of course without prejudice to the position of the FAO's Governing Bodies on the desirability of any transitional measures related to the introduction of a new Scale of Contributions.
1/ Report of the Conference of FAO, Twenty-ninth Session, Rome, 7-8 November 1997, paragraphs 150-152.
2/ Report of the Conference of FAO, Thirtieth Session, Rome, 12-13 November 1999, paragraphs 144-148.
3/ Document C 97/III/PV/4, 14 November 1997, page 3. During the debates held at the Thirtieth Session of the Conference in 1999, the Legal Counsel referred in detail to the debates and the legal position presented in the course of the previous session of the Conference.
4/ See Document C 99/PV/13, 19 November 1999, pages 2, 3 and 4.
5/ See Document C 978/III/PV/4, 14 November 1997, page 5. See also, Document C 99/PV/13, 19 November 1999, where the Legal Counsel referred to the position presented in 1997.