1. The Fifty-Third Session of the Council was held in Rome from 3 to 6 November 1969 under the Chairmanship of Mr. M. Gemayel.
2. The Agenda of the Session as adopted is set out in Appendix A to this report.
3. Mr. G. Schütz (Federal Republic of Germany) and Mr. V.P. Dhital (Nepal) were elected respectively First Vice-Chairman and Second Vice-Chairman.
4. The Council noted that an application for membership in the Organization had been received on 30 September 1969 from the Czechoslovak Socialist Republic, and that at its Twenty-Second Session the Finance Committee had prepared a draft resolution for submission to the present session of the Council, based on the proposals of the Czechoslovak Government for a settlement of its arrears of contributions as a former member of the Organization 1. In view of this the Council agreed that the Czechoslovak Socialist Republic could be represented at its present session in an observer capacity.
5. The Council expressed regret for the illness of its Secretary-General, Mr. A.C. Janssen, and asked the Director-General to convey its best wishes for his speedy recovery.
6. The Reports of the Forty-Fourth Session and of the Resumed Forty-Fourth Session of the Committee on Commodity Problems 1 were introduced by Mr. M.W. Oakley, the Chairman of the Committee.
7. The Council generally endorsed these reports, and expressed appreciation of the work of the Committee and its subsidiary bodies. The recent activities conducted under the auspices of the Committee were evidence of the continuing and growing status of that Committee as a forum for the examination of commodity issues and for the development of appropriate action. The Council particularly welcomed the concrete action for the improvement of commodity markets that had been achieved by the Study Groups on Hard Fibres and Jute, through the operation of informal international arrangements. The prospects for progress on some other commodities appeared encouraging, notably tea. The Council noted with satisfaction that a permanent consultative body on tea had now been established by the CCP. The Council felt that, through the work of the Committee and its subsidiary bodies, FAO should continue to collaborate effectively in the work of UNCTAD, with more thorough analyses and more concrete recommendations in relation to the serious commodity trade situation.
8. The Council shared the interest shown by the CCP in certain basic structural factors which limited the expansion of world trade of agricultural commodities and affected particularly developing countries. In this connexion, some members emphasized in particular the limitations which they felt derived from the protectionist policies of a number of countries, and which placed serious restraints on the expansion of trade of agricultural commodities, particularly of the developing countries. Obstacles to trade had been thoroughly documented in the work of several of the Study Groups, but, in the opinion of many members, there was little prospect of substantial progress in trade unless there was a more determined will to remove or mitigate these restraints. Several members also supported a request for the convening of a new special consultation on meat and poultry problems as they considered necessary the rapid establishment of an appropriate Study Group, time having come to move forward to the implementation stage of policies.
9. The Council noted with interest the Director-General's proposal for an International Dairy Development Scheme which had been submitted to the CCP for its preliminary consideration. This was a proposal envisaging a cooperative effort by donor and recipient governments, with the assistance of FAO, WEP and other international agencies, aiming at fostering dairy development, increasing consumption of milk products in the developing countries and putting to constructive use the existing large surpluses of butter and skim milk powder. The proposal was considered a timely one since it was being made at a moment of heightened awareness of the importance of adequate protein nutrition and one which fitted in well in the Director-General's area of concentration on the protein gap. The Council agreed with the CCP that the Director-General's proposal merited further consideration and approved the Committee's suggestion that it should be presented to the Conference for examination by Commission I. A number of members favoured the convening of an ad hoc consultation to explore the proposal in detail.
10. The Council endorsed the recommendation by the Committee on the setting up of a central information service on food aid, with the general objective of providing the international community with detailed and timely data on food aid.
11. The Council emphasized the importance of the recommendations prepared by the CCP on procedures for notification and consultation on the part of Member Nations to ensure the observance of the FAO Principles of Surplus Disposal. The review of the existing procedures was made necessary by the growth in recent years of transactions at concessional terms which were taking place under new circumstances which made it difficult to determine the extent to which Member Nations were observing the FAO Principles of Surplus Disposal and the consultative and reporting obligations attaching to these principles. As the outcome of its deliberations, the Committee had agreed on new procedures for notification and consultation on the types of transactions in agricultural commodities which it had identified as likely to cause harmful interference to normal patterns of production and international trade. The Committee had recognized that, to provide for possible future changes in international trade in agricultural commodities, the list of transactions to which the procedures for consultations and notification applied should be subject to review and had provided a procedure for this purpose.
12. The Council noted with approval that the Committee had recognized the special position of developing countries with respect to the procedures recommended, both as recipient countries of food aid and as exporting countries heavily dependent on export earnings from agricultural commodities.
13. The Council noted that the Committee had considered procedures and guidelines for the establishment in transactions subject to prior consultation of a “usual marketing requirement,” defined as a specific agreement by the recipient country in a transaction on concessional terms to maintain at least a specified level of commercial imports of the commodities to be supplied under the concessional transaction. It expressed regret that the Committee had not yet been able to reach agreement on this matter. It noted the arrangements made by the Committee to pursue this subject further, and requested it to finalize this part of its recommendations at its Forty-Fifth Session.
14. The Council noted that the Committee had amended the terms of reference of the Consultative Sub-Committee on Surplus Disposal to bring these into line with the recommended changes in consultation and reporting procedures. The Council recognized that, since agreed recommendations on the procedures concerning usual marketing requirements had not yet been finalized by the Committee, the reference in CCP Resolution 2/44 on Terms of Reference of the CCP Consultative Sub-Committee on Surplus Disposal (paragraph 1 (b)) to usual marketing requirements could not yet be operative beyond any consultation and notification activities already carried out. The Council was informed that transactions containing provisions for usual marketing requirements were already being notified by Member Nations to the Consultative Sub-Committee on Surplus Disposal, and that it had a continuing responsibility to review certain questions relating to usual marketing requirements, in particular, transactions involving “tied sales.”
15. The Council considered that the development by the Committee of agreed procedures for consultation and notification under the FAO Principles for Surplus Disposal constituted an important step forward, and that adherence to the procedures recommended by the CCP would make an important contribution to more orderly conditions in international trade for agricultural commodities, which would be in the interest of all Member Nations. It therefore invited Member Nations to cooperate fully in implementing the agreed procedures.
16. The Council adopted the following resolution:
Resolution 1/53
CONSULTATIVE OBLIGATIONS OF MEMBER NATIONS UNDER FAO PRINCIPLES OF SURPLUS DISPOSAL
THE COUNCIL
Noting that the Committee on Commodity Problems at its Forty-Fourth Session had adopted recommendations on procedures for notification and consultation, as applying to Member Nations which have adhered to the FAO Principles of Surplus Disposal, and revised the terms of reference for the Consultative Sub-Committee on Surplus Disposal;
Noting further that the CCP had not yet reached agreement on procedures for the establishment of usual marketing requirements in transactions subject to prior consultation, and that its discussion on this matter would be continued;
Endorses the recommendations of the Committee on Commodity Problems as reproduced in the Annex to this Resolution, and commends them to the attention of all Member Nations, stressing the importance of their full implementation;
Urges the Committee on Commodity Problems to finalize at its Forty-Fifth Session recommendations on the establishment of usual marketing requirements;
Requests the Director-General
to transmit to Member Nations and Associate Members the text of the present Resolution and the annexed recommendations and to invite them to signify their readiness to follow the agreed procedures, and
to draw the attention of Member Nations and Associate Members to the benefits to be derived from the widest possible participation of Governments in the activities of the Consultative Sub-Committee on Surplus Disposal.
Annex to Council Resolution 1/53
PROCEDURES FOR NOTIFICATION AND CONSULTATION UNDER THE PRINCIPLES OF SURPLUS DISPOSAL RECOMMENDED BY FAO
The following procedures for notification and consultation are applicable to transactions of the types mentioned in the Catalogue of Transactions reproduced below.
Notification and consultation
All reporting and consultative obligations and procedures shall be based on the principle of reciprocity among Member Nations and Associate Members.
Before carrying out any transaction in agricultural commodities 1 of a type mentioned in the Catalogue of Transactions, and taking into account the special situations covered in paras. (3), (4) and (5), below, the supplying country shall:
undertake bilateral consultations with countries substantially interested by reason of their exports of the commodity concerned to the recipient country;
notify the CSD of the main features of the proposed transaction in order to provide other countries directly interested in exports of the commodity an opportunity for bilateral consultations, it being understood that this would not result in any lengthening of the total period of consultation.
The above procedures shall not apply to:
Transactions effected through intergovernmental organizations (including WFP) whose commodity transfers are already subject to special consultative rules or through intergovernmental organizations (including UNICEF and UNRWA) whose operations are of such a nature and volume as not to constitute a substantial danger of harmful interference with normal patterns of production and international trade;
Emergency transactions. In such cases, donor countries shall notify the CSD ex post facto.
Government-to-government transactions of relatively small size and not involving sales in the local markets of the recipient country and therefore not likely to result in harmful interference with normal patterns of production and international trade shall be notified to CSD ex post facto as soon as practicable.
FAO Member Nations which effect transactions through private charitable institutions shall periodically notify the members of CSD using the CSD distribution machinery in a reasonably comprehensive form, of the relevant data on the current pattern of programmes and projects, so that a Member Nation which considers its commercial trade endangered may request bilateral consultation.
Modifications to the List of Transactions 1 and to the Catalogue of Transactions
There was general agreement that the lists of transactions were not exclusive and that some new types of transactions might be identified in the future. The Committee considered that the CSD should be prepared to examine proposals by Member Nations for additions to or deletions from the List of Transactions 1 and modifications to the Catalogue of Transactions. If the CSD, after taking account of arrangements in other international organizations, concluded that the type of transaction concerned fell within the scope of the FAO Principles of Surplus Disposal, it could request the CCP to decide whether it should be added to the categories of transactions subject to consultations and/or reporting.
Position of developing countries
The Committee reaffirmed that, as agreed by the Council at its Twenty-Ninth Session, the governments of recipient countries continued to be under no obligation to take steps for prior consultation or reporting. The Committee agreed that, in keeping with the spirit of the FAO Principles of Surplus Disposal and Guiding Lines, the recommended procedures for consultations and reporting should not constitute an obstacle to, or cause undue delay in, the provision of food aid which was urgently required by a developing deficit country.
The Committee agreed that special consideration should be given to the interests of developing exporting countries which depended heavily on export earnings from agricultural commodities. It also agreed that special consideration should be given to the safeguarding of local production and markets of developing countries.
Obligations of Member Nations in Other Organizations or under International Agreements
The Committee recognized that in relation to the transactions it had identified 1, Member Nations may also have incurred obligations in other organizations and under international agreements, and that nothing recommended above in any way diminished these obligations or commitments. Likewise, nothing recommended above detracted from the generality of the FAO Principles of Surplus Disposal.
Catalogue of Transactions
Gifts or donations of commodities from a government to a government of an importing country, an intergovernmental organization or a private institution for free distribution directly to the final consumers in the importing country;
Gifts or donations of commodities from a government to a government of an importing country, or an intergovernmental organization or a private institution for distribution, by means of sale on the open market of the importing country;
Monetary grants by the government of an exporting country to an importing country, for the specific purpose of purchasing a commodity from the exporting country;
Monetary grants by a government either to a supplying country (or countries) or to a recipient country for the specific purpose of purchasing a commodity from the exporting country (or countries) for delivery to the specific recipient country;
Monetary grants by a government to an intergovernmental organization for the specific purpose of purchasing commodities in the open market for delivery to eligible importing countries (developing countries);
Transfers of commodities under the rules and established procedures of the World Food Programme;
Sales for the currency of the importing country which is not transferable and is not convertible into currency or goods and services for use by the contributing country;
Sales for the currency of the importing country which is partially convertible into currency or goods and services for use by the contributing country;
Government sponsored loans of agricultural commodities repayable in kind 2;
Sales 3 on credit in which, as a result of government intervention, or of a centralized marketing scheme, the interest rate, period of repayment (including periods of grace) or other related terms do not conform to the commercial rates, periods or terms prevailing in the world market. In particular with respect to period of repayment, credit transactions are distinguished as follows:
Over 3 years and under 10 years
Sales 1 in which the funds for the purchase of commodities are obtained under a loan from the government of the exporting country tied to the purchase of those commodities, distinguished as follows with respect to period of repayment:
Over 3 years and under 10 years;
Transactions under categories 1 to 4 and 7 to 11 subject to tied usual marketing requirements or to tied offset purchasing requirements;
Transactions under categories 1 to 4 and 7 to 11 tied to purchase of fixed quantities of the same or another commodity from the exporting country.
2 The delegate of Japan reserved his Government's position on the inclusion of this item.
3 The delegate of India reserved his Government's position on the inclusion of this item.
1 The delegate of India reserved his Government's position on the inclusion of this item.
17. The Council took note with interest of the Committee's preliminary examination of the Provisional Indicative World Plan for Agricultural Development. Some members agreed with the Committee that this was work of importance which could be help to governments in promoting a fuller understanding, both nationally and internationally, of the problems of development of the agricultural sector of developing countries. A full review of the document would be undertaken by the Conference, and the Council felt that it would be useful if the Conference examined some of the possible lines of action which had emerged in the Committee's discussion. Other members, however, felt that the IWP, in its present form, was not a useful instrument for the agricultural development policies of their countries for reasons which had been repeatedly put forward and which would be presented in greater detail at the Conference.
18. Discussing document CL 53/3, the Council expressed satisfaction at the Agreement that had been reached between the Director-General of FAO and the Executive Director of UNIDO in the field of industrial development, notably in the context of various initiatives under way to strengthen cooperation among members of the United Nations System.
19. In the view of the Council, the Agreement provided a good working basis for harmonizing the activities of the two Organizations in the industrial field in a constructive way and in the best interest of the developing countries.
20. The Council recognized that an Agreement of this nature could not be perfect in all respects, and that its success would therefore depend upon the spirit of accommodation shown by both parties to implement it on practical lines at the Secretariat level. It noted that the Inter-Secretariat Committee established under the terms of the Agreement could be a key factor in solving difficulties as they arose and in bringing the two Secretariats closer, especially in developing joint programmes.
21. The Council recognized the inter-relationship between agricultural and industrial development, and recalled FAO's constitutional responsibilities which went much beyond agricultural production and included processing, marketing and distribution of products derived from agriculture in the widest sense.
22. With regard to forest industries, the Council noted that the Agreement was not final and it expressed the hope that the issues would soon be pragmatically resolved through the Inter-Secretariat Committee in the light of experience gained in implementing the Agreement. In this context, the Council stressed the principle of an integrated approach to forest management and the production, processing and marketing of forest products. It also recognized that a considerable expertise in this field had been built up over many years by FAO which had established a sound reputation with Member Nations in regard to forest industries development, and that this should be borne in mind.
23. The Council was of the view that in addition to the Secretariats' efforts, Member Nations had a contribution to make toward the successful implementation of the Agreement, and for this purpose it urged that the Agreement be transmitted to Governments after it had been approved by the FAO Conference and the UNIDO Industrial Development Board.
24. Expressing its overall approval of the Agreement, the Council decided to transmit it for endorsement to the Fifteenth Session of the FAO Conference.
25. Finally, it called upon the Director-General to submit to it periodical reports on the progress of implementation of the Agreement.
26. The Council had before it Conference document C 69/34 on inter-agency relations and consultations on matters of common interest. It heard a verbal statement bringing up to date some of the items in the light of further developments at the meetings of the ACC and the joint meetings of the ACC/CPC. It noted that certain misunderstandings the CPC had with regard to the reorganization of the ACC procedures had been subsequently cleared up in the joint meeting.
27. It was also informed of the salient features of the report of the Enlarged Committee for Programme and Coordination which has been submitted to the ECOSOC and the General Assembly. It noted that the terms of reference of a reconstituted Committee on Programme Coordination suggested in the report seemed to indicate that it would not duplicate the programme reviewing functions vested in the governing and legislative organs of the specialized agencies, and that the ACC had expressed its readiness to cooperate closely with the reconstituted Committee when established on the lines proposed. The Council's attention would, however, be drawn by the Director-General to further developments should there be any subsequent changes which might merit its consideration.
28. The Council was also advised that the Chairman of the Panel of External Auditors had recently made a study of the United Nations Electronic Data Processing, and that at the invitation of the ACC, the second phase of the study would be extended to the specialized agencies “in or within technically or economically feasible computer linking distances of Geneva.” It noted that although FAO was not directly involved in the study, future technological developments might bring the Organization within its scope, and therefore FAO would participate in it.
29. The Council took note of the various matters referred to it in the document, and the subsequent oral explanations.
30. The Council considered this item under two separate aspects: first, the procedure proposed for a more expeditious handling of United Nations Joint Inspection Unit Reports and, second, substantive issues relating to certain of these reports.
31. On procedural matters, the Council after taking into account the views expressed in the Report of the Twenty-Second Session of the Finance Committee and the explanations given about the agreement at a recent session of the Administrative Committee on Coordination (ACC), approved for consideration by the Conference two changes to the previously proposed procedures 1.
32. The first change authorized the Director-General to communicate his comments on Inspection Reports concerning more than one Agency or involving system-wide problems to the ECOSOC through the Committee for Programme and Coordination (CPC) at the same time as he forwards them to the governing organs of FAO. Such action should be taken within three months of the original submission of the reports to him.
33. The Council noted that on items which required consideration by the FAO Council, ECOSOC had agreed that the CPC would postpone action until the Council had had an opportunity to formulate and present its views thereon. However, such action should be taken within a year of the date when the report was originally submitted.
34. The Council also approved certain simplifications to the procedure relating to Inspection Reports concerning two or more specialized agencies 1. In the revised procedure, each Executive Head, before submitting his comments to his governing body, would circulate a draft of such comments for any observations, within a stated period depending on the urgency of the matter, to each of his counterparts and to the ACC Secretariat. On the expiry of the stated period, he would submit his comments to his governing body. No attempt would be made to reach a consensus on each occasion and no meeting would automatically be called by the ACC Secretariat to iron out difficulties. However, if divergencies on important points of principle made inter-Agency consultations necessary, or required a longer time for a study in depth, the ACC Secretariat, on receipt of a request from any of the Executive Heads, would arrange for immediate consultations on such a study. In such cases, the governing organs would have in addition to the views communicated by the Executive Heads, the results of such consultations or study.
35. On the substantive issues the Council noted with satisfaction that the average months' lapse from approval to commencement of operations had been decreasing from 18.1 months in 1967 to 14.6 months in 1968, and that as of June 1969 the figure had dropped to 13.9. The Council emphasized the necessity for this trend toward further improvement to be continued.
36. The Council recognized that the Technical Committee on Field Programmes was reviewing the substantive issues which affect the rate of project implementation, such as the question of recruitment and the question of project evaluation. The results of this review would be available to the Conference when the relevant reports would be considered by Commission II.
37. The Council learnt with satisfaction that the resurgence of the Desert Locust plague in 1968, which at that time seemed capable of inflicting great losses to crops for many years, had been suppressed to a great extent through effective control operations undertaken in all infested areas, particularly in eastern Africa, Saudi Arabia and Morocco. The Council appreciated the prompt action taken by FAO, in collaboration with both donor and recipient countries, in providing assistance to various countries and its active coordinating role in combatting the plague.
38. The Council drew the attention of all Governments and international organizations concerned to the present locust situation which did not permit any relaxation of effort on the part of the Governments concerned. A maximum degree of sustained vigilance had still to be maintained in all the Desert Locust areas, and at the same time adequate arrangements had to be made for control operations to meet any future deterioration in the situation. The Council again underlined the need for a long-term strategy in the prevention and control of the Desert Locust, as adopted by the FAO Desert Locust Control Committee at its Thirteenth Session (1969) as a guide for future action. The Council suggested that the Desert Locust control should receive priority attention under the area of concentration “War on Waste,” as indicated by the Council at its Fifty-First Session 2.
1 See Annex I to document C 69/36.
2 See para. 308 of its report.
39. The Council agreed to put the following nominations before the Conference:
| Chairman of the Conference: | Hernan Santa Cruz (Chile) |
| Commission I: | Abbebe Retta (Ethiopia) |
| Commission II: | Rolland P. Poirer (Canada) |
| Commission III: | A.A. Moursi (UAR) |
40. In accordance with Rule XXIV, paragraph 5(b), of the General Rules of the Organization, the Council elected the following eleven Member Nations to the Nominations Committee:
Afghanistan
Australia
Brazil
France
India
Jordan
Nigeria
Philippines
Romania
Venezuela
Zambia
41. The Council nominated M. Veillet-Lavallée (International Federation of Agricultural Producers) to be Chairman of the informal meeting of observers from non-governmental organizations, which would be held on the afternoon of Monday 10 November 1969.
42. The Council noted that, as it had requested at its Fifty-Second Session, its proposals for the organization of the Fifteenth Session of the Conference, including arrangements for the work of the two Technical Committees, had been circulated to all Member Nations and Associate Members 1
43. In connexion with Item 38 of the Provisional Agenda of the Conference, the Council noted that an application for membership in the Organization had been received from the Czechoslovak Socialist Republic. This had been circulated to Member Nations and Associate Members on 8 October 1969, and would be considered by the Conference. On the other hand, the Council noted that Equatorial Guinea had withdrawn its application for membership in the Organization.
44. The Council further noted that the Director-General had circulated to all Member Nations and Associate Members on 8 July 1969 the proposal made by the Fifty-Second Session of the Council that an amendment to Article XXII of the FAO Constitution should be placed before the Conference at its Fifteenth Session. The amendment would provide for the Arabic, English, French and Spanish texts of the Constitution to be equally authoritative 2.
1 Documents C 69/20 and C 69/20-Sup. 1.
2 See document C 69/37.
45. The Council considered the procedure to be followed by the Conference at its Fifteenth Session for the review and adoption of the proposed Arabic version of the Constitution 1.
46. The Council recommended that a Special Committee should be appointed in accordance with Rule XV.1 of the General Rules of the Organization which provides: “The Conference may appoint, or authorize the appointment of, any temporary or special committee which it deems necessary.” The terms of reference of this Special Committee would be to examine the proposed Arabic version of the Constitution and to make recommendations thereon to Commission III. The Special Committee would also consider the Arabic version of the other Basic Texts. Its composition might be recommended by the General Committee of the Conference, if possible at its first meeting.
47. The Council reviewed the document CL 53/6 which concerned the establishment of ad hoc arrangements between the secretariats of the Council for Mutual Economic Assistance (CMEA) and FAO on questions of mutual interest to both organizations.
48. The Council was informed of ad hoc arrangements existing between certain organizations of the United Nations family and CMEA.
49. After a brief discussion, in which areas of interest common to FAO and CMEA in the field of agriculture were recognized, the Council endorsed the suggestion that the Director-General establish ad hoc arrangements for cooperation with CMEA by an exchange of letters as indicated in document CL 53/6.
50. The Council took note of the report 1, and additional oral presentation, listing those international non-governmental organizations without status that had been and were to be invited to specific FAO meetings 2.
51. When examining the budgets of the Commission for Controlling the Desert Locust in the Eastern Region and of its distribution in South West Asia and the Commission for Controlling the Desert Locust in the Near East, the Finance Committee at its Twenty-First Session (April 1969), raised the question of the need to submit these two budgets to the Council through the Finance Committee prior to their implementation as provided under Article IV 4 (b) of the Agreements establishing these commissions. The Finance Committee noted that Article IV 4(b) of these Agreements reflected paragraph 33 (i) of the “Principles and Procedures which should govern Conventions and Agreements concluded under Articles XIV and XV of the Constitution, and Commissions and Committees established under Article VI of the Constitution” as adopted by the Ninth Session of the Conference (1957) 3. Paragraph 33 (i) provides that a provision shall be inserted in the text of conventions and agreements concluded under Article XIV of the Constitution to the effect that:
“All cooperative projects and autonomous budgets and programmes shall be submitted to the Council or the Conference of the Organization prior to implementation.”
52. As paragraph 33 (i) of the Principles quoted above did not provide for any specific indication of the role that the Council should play, the Finance Committee suggested that the Council might wish to give consideration to the desirability of recommending to the Conference that the requirement for submission of the budgets of Article XIV bodies to the Council or Conference be abolished by an appropriate amendment to the Principles.
1 CL 53/7.
2 The following two organizations were mentioned in the oral presentation: International Association
of Scientific Hydrology; Mediterranean Association of Marine Biology and Oceanography.
3 Section VII of Vol. II of the FAO Basic Texts.
53. The Council at its Fifty-Second Session (June 1969) considered that it would be desirable, prior to taking any action on the suggestion made to it by the Finance Committee, that the matter be referred to the Committee on Constitutional and Legal Matters (CCLM).
54. The CCLM examined this matter at its Twenty-First Session (October 1969) and submitted a report thereon 1 which was considered by the Council at its Fifty-Third Session
55. The Council noted that the CCLM had undertaken an exhaustive study of the Basic Texts of the Organization in order to examine the purposes underlying the requirement that the Council, assisted by its Committees, should examine the cooperative projects and autonomous programmes and budgets of bodies created under Article XIV of the Constitution; the role of the Finance Committee in this respect; and whether the relevant provisions in the Basic Texts of the Organization still served a useful purpose. In particular the Council noted that the CCLM had reached the conclusion that these underlined objectives referred to above could be summarized as follows:
to ensure that the objects of expenditure are consistent with the policies and aims of the Organization;
to ensure that the trust funds, whose resources are periodically renewed, are being utilized in accordance with (a) above and are not creating additional obligations for Member Nations of the Organization, not members of the body in question;
to ensure that expenses are being properly apportioned as between the trust fund of the body concerned and the Regular Budget of the Organization;
to ensure that various regulations, notably those relating to contributions by non-members of the Organization to costs falling on the Regular Budget of the Organization in respect of the body concerned, are being properly complied with;
to ensure that the necessary funds are available in the relevant approved budget, should an Article XIV body wish to create a subsidiary body;
to ensure, in connexion with any obligation that FAO might assume in respect of an Article XIV body, that prior provision has been made in the Regular Budget of the Organization.
56. In the light of the foregoing, the Council agreed with the CCLM that it was desirable for the Finance Committee to continue to scrutinize the cooperative projects and the programmes and budgets of Article XIV Bodies, and that it should report to the Council only in cases where it considered that the provisions of the Basic Texts were not being complied with. The Council further agreed that the scrutiny of the technical aspects of such cooperative projects and programmes and budgets would be the responsibility of the Council itself, assisted as appropriate by the Programme Committee and the technical staff of the Organization.
57. The Council also endorsed the CCLM's recommendation that no change be made to the provisions in the Basic Texts of the Organization relating to the examination of the cooperative projects and autonomous programmes and budgets of Article XIV Bodies by the Council and its Committees.
58. The Council noted that the percentage of current contributions collected to date in 1969 was somewhat lower than for the same periods in 1968 and 1967. As there were some important amounts still due 1, the Council appealed to Member Governments to remit outstanding contributions at the earliest possible date.
59. The Council noted that unless such assessments were received before the year end, the Cash Surplus, expected because Miscellaneous Income substantially exceeded the amount budgeted for the 1968–69 biennium, might not arise. In accordance with Financial Regulations 6.1(b), any cash surplus is allocated among Member Nations.
60. The Council further noted that as the arrears of Bolivia, Guinea, Paraguay and the Yemen Arab Republic exceeded the contributions due from them for the two preceding calender years, these countries would risk losing their vote at the forthcoming Session of the Conference in accordance with Article III-4 of the Constitution.
61. With regard to the amounts outstanding from Bolivia, the Council recalled that the Thirteenth Session of the Conference, by Resolution 33/65, had approved the proposal of the Government to pay its arrears of contributions in 10 annual instalments while at the same time paying its current contributions in the year of assessment. The Council expressed its serious concern that the amounts due under this arrangement for 1967, 1968 and 1969 had not yet been received.
62. In the case of the Yemen Arab Republic, the Council was informed that the Government had indicated that payment was in the process of being remitted. If this payment was received before or during the Fifteenth Session of the Conference, the provisions of Article III-4 of the Constitution would have been met.
63. The Council recalled that at its Fifty-Second Session it had granted to the Director-General to withdraw up to $335 000 from the Working Capital Fund to finance increased costs of salaries and education grants. The Council noted that as current indications suggest that there would be savings available at the end of 1969 to meet these increased costs, it no longer appeared necessary for the Director-General to call upon this authority.
64. The Council furthermore noted that the Director-General had authorized a withdrawal from the Working Capital Fund under the provision of Conference Resolution 35/65, on the recommendation of the Advisory Panel of Experts, and after consultation with the Chairman of the Finance Committee, of a sum of approximately $15 000 for the purchase and shipment of vaccines, for emergency action for the control of Foot-and-Mouth Diseases in the Near East. As the Director-General had stated that the expenditure involved could be met from savings, it was not now necessary to withdraw these funds from the Working Capital Fund.
65. The Council also recalled that it had authorized the Director-General under Council Resolution 5/51 to withdraw an amount of up to $150 000 from the Working Capital Fund to meet the cost of engaging a firm of Management Consultants. The Council noted that the Director-General was now hopeful that it would be possible to find this amount from savings.
66. The Council agreed that the Finance Committee should, at a future session, consider what action, if any, is necessary in regard to reimbursement of the Working Capital Fund.
67. The Council examined the above accounts and approved the External Auditor's Report thereon.
68. In the course of its examination of the accounts of the UNDP/Special Fund Sector 1 the Council noted that the External Auditor had drawn attention in his Report to the fact that the unencumbered balance of allocations for projects in operation at 31 December 1968 was approximately $97 000 000. The Council noted that this was partly caused by delays in project implementation but was largely due to the fact that when Special Fund projects become operational, allocations were issued for the full duration of the projects through to final completion. The Council further noted that the Director-General hoped to reduce those delays attributable to the Organization by introducing Network Analysis techniques.
69. The Council further endorsed the comments of the Finance Committee concerning the accounts of the Freedom from Hunger Campaign 2 and Trust Funds 3. Some members drew the attention of the Council to the funds paid by some Member Nations for the financing of Associate Experts Schemes, which are accounted for either under the Freedom from Hunger Campaign or under Trust Funds. The wish was expressed that this matter be examined in detail at an appropriate future occasion. The Council noted that the Director-General would review the matter and report to the Finance Committee.
70. The Council recommended the following draft resolution for adoption by the Conference of the above accounts and of those examined by it at its Fifty-First Session:
DRAFT RESOLUTION FOR THE CONFERENCE
Audited accounts
THE CONFERENCE
Having examined the following audited accounts and the External Auditor's Reports thereon,
Regular Programme, 1966–67
Freedom-from-Hunger Campaign, 1966–67 and 1968
European Commission for the Control of Foot-and-Mouth Disease, 1967 and 1968
United Nations Development Programme, Special Fund and Technical Assistance Sectors, 1967 and 1968
Trust Funds, 1968
Adopts the above Audited Accounts.
1 C 69/15.
2 C 69/12.
3 C 69/17.
71. The Council noted that at its Fourteenth and Sixteenth Sessions, the Inter-Governmental Committee of the World Food Programme had approved the audited accounts for the years 1966, 1967 and 1968 together with the External Auditor's Certificates and Reports thereon.
72. The Council examined these account and recommended the following draft resolution for adoption by the Conference:
DRAFT RESOLUTION FOR THE CONFERENCE
Audited Accounts - World Food Programme for 1966, 1967 and 1968
THE CONFERENCE
Having examined the following Audited Accounts and the External Auditor's Reports thereon:
| World Food Programme Accounts 1966 | C 69/10 Supp. 1 |
| World Food Programme Accounts 1967 | C 69/10 |
| World Food Programme accounts 1968 | C 69/12 |
Adopts the above Audited Accounts.
73. The Council had before it Document C 69/3-Add. 2 “Addendum to Programme of Work and Budget for 1970–71”, which the Director-General submitted following the Report of the Twenty-Second Session of the Finance Committee.
74. The Council recalled that in adopting Resolution 2/52 on the level of the Budget for 1970–71, it had requested that the Director-General “review the question of savings and adjustments in consultation with the Finance Committee.” 2
75. The Director-General informed the Council that he had conducted a thorough review of all aspects of the Programme of Work and Budget for 1970–71, and in agreement with the Finance Committee had arrived at certain further savings and reductions totalling $1 117 000. Some members objected to the fact that a third of this figure would be achieved at the expense of the developing regions where FAO's activities must be strengthened and not further reduced, and requested that these proposals be revised. In addition, the Director-General had agreed with the Finance Committee that the estimate for Miscellaneous Income could be increased by $100 000, thus reducing the Assessment Budget by an equivalent amount. The Council accepted these adjustments.
76. The Director-General had informed the Finance Committee and the Committee noted that he proposed to submit to the Conference the establishment of seven additional professional staff, 3 in addition to those proposed in the draft Programme of Work and Budget as originally submitted, to strengthen selected areas of work which he considered as essential in order to maintain as balanced a programme as possible within the total proposed budget level. The costs for these posts, with supporting general service staff and travel, would be $360 000 in 1970–71. The Council noted that the inclusion of these posts would reduce the savings to $757 000. The Council accepted explanations as to the proposed activities under these additional posts, and agreed to their establishment.
1 See also para. 102 below, Publications Revolving Fund.
2 See para. 113 of the report of the Fifty-Second Session of the Council.
3 These posts are as follows:
Reports Officer - P -5 (Joint Inspection Unit Reports)
77. The revised 1970–71 estimates as now proposed by the Director-General amount to $70 568 000 representing an increase of 10 557 000 or 17.6 percent over the 1968–69 Budget as adjusted, composed of 9.8 percent for Mandatory Increases and 7.8 percent for expansion purposes. The Assessment Budget, after reduction of UNDP/TA subvention and Miscellaneous Income, would amount to $63 880 000 or an increase of 16.5 percent over 1968–69.
78. The Director-General stated further that he had been unable to find any additional savings in excess of those agreed to with the Finance Committee. Whilst expressing appreciation to the Finance Committee and the Director-General regarding the savings which had been identified, some members, nevertheless, expressed the view that further savings should be found, bearing particularly in mind the elimination of activities of low priority. A few members felt that the increase as now proposed by the Director-General was above the level needed in order to carry out the Programme.
79. The Council expressed its support for the revised estimates being submitted to the Conference by the Director-General, and adopted the following resolution, with 25 members in favour, 4 opposed and 3 abstentions, one of which was because of lack of instruction from his Government:
Resolution 2/53
DRAFT PROGRAMME OF WORK AND BUDGET, 1970–71
THE COUNCIL
Being aware of its responsibility to make recommendations to the Conference on policy issues regarding the Draft Programme of Work and Budget submitted by the Director-General for the following financial period;
Being aware also of the expanded effort necessary if the problems of food and agriculture of the world are to be solved, and of the important role of FAO in this effort;
Recognizing the need of Member Governments to maintain a reasonable balance between the funds they must devote to their national programmes and those they allocate for work through international organizations;
Recommends to the Conference that the level of the Budget for 1970–71, including provision for the interim agreement between the Director-General and the Administrator of the United Nations Development Programme concerning the financing of the fifty-five Senior Agricultural Advisers/FAO Country Representatives, should be $70 568 000.
80. The Council recalled that the Conference at its Fourteenth Session had approved the list 1 of sessions and conferences to be financed under the Regular Programme but it had recognized that in exceptional circumstances certain unscheduled sessions might be necessary. The Conference, therefore, had authorized the Director-General to make exceptions when, in his view, such action was necessary for the fulfilment of the programme of work as approved by the Conference, subject, however, to these exceptions being reported to the next session of the Council.
1 Report of Fourteenth Conference Session, paragraph 621.
81. The Council was informed that 8 further sessions had been approved since 1 June 1969. Of these, three were sessions of Commodity Study Groups and the Advisory Committee of Experts on Marine Resources Research (ACMRR), one of which had been included in the budgetary adjustments approved by the last Session of the Finance Committee, and two were in substitution of cancelled sessions. Apart from the session included in the budgetary adjustments, all these sessions were being financed within budgetary provisions for meetings or involved no meetings costs to FAO.
82. The Council noted that 69 unscheduled sessions had been approved during the biennium, and 70 approved sessions had been cancelled. The additional sessions approved since 1 June 1969 by the Director-General and the cancelled and postponed sessions for the same period are listed in Appendix E.
83. The Council noted the recommendations of the Finance Committee concerning the disagreement which had arisen within the Working Party set up to conduct the four-yearly review of General Service salaries. It was informed that the Director-General in accordance with those recommendations had approached the Chairman of the International Civil Service Advisory Board (ICSAB) who had agreed to set up a panel composed of three of its members to review the Rome survey results. It was expected that this panel would start its investigation in January 1970.
84. The Council approved the following recommendations of the Finance Committee:
the current General Service salary scale should remain in effect until a new salary scale was established after the ISCAB Review; the new scale to be applied retroactively to 1 January 1970;
in the meantime no new increase in 1970 resulting from any upward movement in the wage index would be applied before the new salary schedule became effective;
the wage index should be rebased as of 1 January 1970 and
the Director-General, in consultation with the Central Institute of Statistics of Italy, should study the possibility of the creation of a Rome, rather than an all-Italy, wage index to be used for between-survey adjustments.
85. The Council noted that the Czechoslovak Socialist Republic had applied for re-admission as a Member of FAO 1, and that the Government of the People's Republic of Southern Yemen had applied to join the Organization.
86. The Council noted that should the Conference agree to the re-admission of the Czechoslovak Socialist Republic and the admission of the People's Republic of Southern Yemen to Membership, their assessments in the proposed FAO scale for 1970–71 (derived from the current UN scale) would be 1.16 percent, and 0.04 percent respectively. The Council further noted that the contributions due for the last quarter of 1969, from these countries and the advances due by them to the Working Capital Fund would be established as follows:
| Assessment last quarter 1969 | Advance due Working Capital Fund | |
| $ | $ | |
| Czechoslovakia | 79 500 | 52 200 |
| Southern Yemen | 2 750 | 1 800 |
87. The Council was informed that the Czechoslavak Socialist Republic, which had been a Member of the Organization up to 27 December 1950, at which date its withdrawal from the Organization became effective, owed an amount of $ 141 291.50 on account of arreas of contributions arising from its previous membership.
88. The Czechoslovak Government, when submitting its application for membership, had requested that the Conference consider an arrangement whereby the arrears could be paid over a period of 10 years. The Council, recalling that a similar arrangement had been made on the re-admission to membership of Hungary and Poland, recommended the following Draft Resolution for adoption by the Conference:
DRAFT RESOLUTION FOR THE CONFERENCE
Arrears of the Czechoslovak Socialist Republic
THE CONFERENCE
Noting that the Czechoslovak Socialist Republic's arrears of contributions on re-admission to the Organization amount to $141 291.50,
Decides:
that the Czechoslovak Socialist Republic's arrears shall be settled through the payment of ten annual instalments of $14 129.15 each. The first instalment shall be paid in 1969;
that the annual payment of the instalments referred to above shall constitute Miscellaneous Income and shall be considered as fulfilment of the Czechoslovak Socialist Republic's financial obligation to the Organization in respect of these arrears.
89. The Finance Committee had considered the report by the Director-General on the results of the survey carried out by the Management Consultants. It considered that the recommended improvements were sound and that the Director-General should be authorized to put them into effect. It noted that the Consultants had found that the structure resulting from the Reorganization was a good one.
90. The Consultants had considered that if the Organization was to be managed with increasing efficiency total operating costs of about $1 million would be required to cover the posts of introducing the modern management techniques they had proposed, including the cost of about 48 professional officers. To meet these costs the Consultants had identified possible savings of a similar order of magnitude, arising primarily out of the improvements in productivity and the more rational use of secretaries. This would lead to a reduction in the numbers of secretaries and clerical staff. The Director-General had accepted the recommendations which should provide a sound basis for increasing the efficiency of the Organization's services to its Member Nations at no additional cost.
91. Two structural changes arising out of the consultants' report were recommended for approval by the Council. The first involved the transfer of the budget function from the Development Department and its consolidation with the Financial function under a proposed new post of Controller in the Administration and Finance Department. The other proposal was to strengthen the programme formulation function of the Development Department by the appointment of a senior officer with sufficient authority to ensure that programme formulation was effectively carried out. Both the Controller post and the Programme Formulation Officer post would be at the D-2 level. The Finance Committee also emphasized that it was essential that there should be the closest possible cooperation between the Controller and the Programme Formulation Officer.
92. Some Council members considered that there had been insufficient time for full consideration to be given to the Director-General's report, and to the report of the Finance Committee on this matter which had been made available only at the beginning of the Council Session. They therefore welcomed the proposed review of implementation by the Finance Committee, but suggested that in addition the views of the Programme Committee be obtained.
93. Two members considered it inadvisable to establish a post for a senior officer responsible for programme formulation. They considered that this implied a duplication of functions and was very likely to lead to confusion. This officer would be unable to function effectively in the face of the multiple activities that he would have to carry out in relation to the numerous FAO organizational units involved. Furthermore, an appropriate explanation of his working relationships and lines of responsibility was lacking. Should this proposal be accepted two functions would again be divorced, the management of and relations with Regional Offices, Regional Conferences, etc., becoming the responsibility of that officer, while those concerning programmes would continue to be the responsibility of the Area Service Division.
94. These two members furthermore expressed concern that the Management Consultants had not reviewed the Agricultural Services Division since, as had been stated by some member countries at meetings of various FAO organs, and they reemphasized once again, the execution of multidisciplinary projects could not be deemed as coming suitably within the scope of that Division. They felt that these matters should be referred to the Conference, where they would bring them up when considering the 1970–71 budget of the Organization, and for this reason expressed their firm reservation.
95. In contrast thereto the opinion was expressed that the establishment of the post of a senior officer responsible for programme formulation could not be considered either to lead to duplication or to contain elements leading to confusion. Rather, the proposal before the Council provided for a clarification of the functions involved in programme formulation for the Regular Programme. This function would continue to remain where it had already been, within the Development Department and the Programme Formulation Officer would report to the ADG of that Department. The present Programme Formulation Branch would continue to function under the supervision of the new officer who would be senior enough to raise issues and discuss them at the directorial level, improve programme conception, ensure that the views of Regional Conferences, the Council and the Conference are built into the programme of work within the long-term perspective developed by PAB, and advise the head of the Development Department, and through him the Director-General on these matters. The view was also expressed that the establishment of a post of senior officer in charge of programme formulation would not be sufficient to strengthen programme formulation, and that if a Programme Formulation Division as recommended were not established, such a Division should not simply be replaced by a senior officer in charge of programme formulation.
96. The Council was informed that the Director-General attached great importance to the key function of programme formulation and considered the new post essential to its proper functioning. The proposal would not lead to a divorce between programme formulation for the regular and field activities. Both would continue to be the responsibility of the ADG, Development Department, who was responsible for their coordination. Duplication of effort would thereby be avoided. Furthermore, the responsibilities of the Area Service Division in connexion with the Organization's field programmes required the full attention of its Director, who could not also be expected to undertake the task of Regular Programme formulation. Programme formulation would continue within the department responsible for drawing up an appropriately balanced programme, taking into account the views of the Conference, the Council, Regional Conferences, Regional Offices and Departments/ Divisions. It would therefore provide a better opportunity for concentration on shifts in emphasis in areas of work of current interest to Member Nations, and facilitate the identification of those that become obsolete.
97. The Council expressed the opinion that it was necessary to maintain an adequate balance in programme formulation to the benefit of the technical, economic and social fields of greatest interest to Member Nations.
98. With regard to the execution of multidisciplinary projects, these had been assigned to the Agricultural Services Division under the approved Reorganization plan and it was not within the terms of reference of the Consultants to reopen this issue. The Council had noted at its Fifty-First Session that the review by the Management Consultants was to be undertaken within the framework of the approved structure. The only two structural recommendations resulting from the review were those discussed above, and these had been submitted to the Council for its approval.
99. In the light of the above, the Council adopted the following resolution:
Resolution 3/53
MANAGEMENT CONSULTING ADVICE
THE COUNCIL
Considering the importance of increasing the Organization's efficiency and the benefits to be derived therefrom by Member Nations;
Noting that the Director-General in line with recommendations made by him and the Ad Hoc Committee on Organization (CL 51/9), and as he had informed the Fifty-First Session of the Council, had commissioned outside consulting services to make a sector-by-sector study to improve FAO's methods, systems, procedures and practices;
Noting further the comments of the Finance Committee on the results of the study;
Authorizes the Director-General to implement the recommended improvements to the extent and as quickly as they can be met within the approved limits of the budget;
Also authorizes the transfer between chapters for the purpose of financing the establishment of the new posts, provided that such transfers do not affect present field programme technical posts;
Authorizes further, as initial steps of implementation, the transfer of the central budget function from the Programme Formulation and Budget Division in the Development Department and its consolidation with the financial function under a new post of Controller in the Administration and Finance Department, and the strengthening of the programme formulation function under the control of a senior director reporting to the Assistant Director-General, Development Department;
Instructs the Director-General to keep the Programme and Finance Committee informed on progress in the implementation of the recommended improvements in the internal management of the Organization.
100. The Council approved the recommendation of the Finance Committee that the post of Legal Counsel should be upgraded to D-2 level.
101. Some members of the Council expressed the desirability of providing on a regional basis during Conference sessions some office accommodation to the representatives of Member Nations, and requested the Director-General to examine this proposal.
102. The Council noted the report of the Finance Committee in connexion with the budgetary estimates of revenues and expenditure in the Publications Revolving Fund for 1970–71. The Committee had concluded that the estimated revenues from CERES - the FAO Magazine - would materialize, and the Council accordingly recommended for approval by the Conference the draft resolution submitted in the Draft Programme of Work and Budget (C 69/3, Annex X) 1, which reads as follows:
DRAFT RESOLUTION FOR THE CONFERENCE
Publications Revolving Fund
THE CONFERENCE
Approves the budget for the 1970–71 biennium for the Publications Revolving Fund as presented by the Director-General and contained in Annex X to the 1970–71 Programme of Work and Budget (document C 69/3), including an allocation not exceeding $60 000 for sales promotion purposes and an allocation not exceeding $ 181 530 for the development of the FAO Magazine (CERES) provided that expenditures from the Fund for this Magazine are at all times kept within the amount of firm advertising commitments and sales.
1 See also paras. 73–79 above.
103. The Council confirmed its decision, taken at its Fifty-Second Session, to convene its Fifty-Fourth Session in Rome on 28 November 1969.
104. At the close of the Session, the Council expressed its very deep appreciation and regard for Mr. Maurice Gemayel, whose present term of office as Independent Chairman of the Council was coming to its end. Mr. Gemayel had exercised outstanding tact and diplomacy in conducting the debates of the Council and his unfailing courtesy and equanimity would be long remembered. The Council Members were unanimous in regretting his departure from this important post.
