1. The Hundred and Twenty-seventh Session of the Council was held in Rome from 22 to 27 November 2004 under the Chairmanship of Aziz Mekouar, Independent Chairman of the Council.
2. The Council noted the Declaration of Competence and Voting Rights presented by the European Community and adopted the Agenda and Timetable for the Session, after having taken into consideration the request made by the G-77, to change the title of the Item 14 from “Comprehensive and Independent External Evaluation of FAO” to “Independent External Evaluation of FAO” and include that under “Other Matters” as Agenda Item 17.3. The Agenda is given in Appendix A to this Report.
3. The Council elected three Vice-Chairpersons for its Session: Ilia Krastelnikov (Bulgaria), Mohammad Saeid Noori-Naeini (Iran, Islamic Republic of) and Muhammad Ismail Qureshi (Pakistan).
4. The Council elected Noel D. De Luna (Philippines) as Chairperson of the Drafting Committee with the following membership: Australia, Burkina Faso, Canada, Chile, Congo, Cuba, Egypt, Finland, Germany, Japan, Philippines, Republic of Korea, Romania and the Syrian Arab Republic.
5. The Council expressed appreciation for document CL 127/2, and generally concurred with its depiction of the current world food and agriculture situation. Many Members provided additional information on the food, agriculture and food security situation in their respective countries and regions.
6. The Council expressed its strong concern over the insufficient progress in reducing the number of undernourished in the world, and urged a renewed commitment and effort to meet the goal of the World Food Summit and the Millennium Declaration of halving hunger by 2015. The Council also noted that the reduction at the global level covered wide variations in performance, with rapid progress in a few countries along with a stagnating or deteriorating situation in many others.
7. The Council emphasized the need for strengthened and concerted efforts at the national, regional and international levels to accelerate progress towards the elimination of food insecurity in the world. The Council noted that progress in combatting hunger and poverty would be achieved when all the causes for underdevelopment had been suitably dealt with, and the need to draw lessons from successes in reducing undernourishment. It also requested FAO to continue monitoring the world food security situation while striving to improve up to date information collection and assessment methods.
8. The Council noted with concern a number of recent trends and developments with negative implications for world food security. In particular:
9. Many Members launched a vibrant appeal to the international community and to the institutions of the UN System to set up a sustainable and efficacious mechanism which, under the auspices of FAO and endowed with the relative means, would pursue its mission of a coordinated and in-depth campaign for the total eradication of the desert locust plague which was known to be cyclical.
10. The Council, recognizing the important contributions that had been made by a number of donors, acknowledged the need for additional international resources in emergencies to avert famine situations. The Council also noted the importance of ensuring that emergency assistance be conducive to rehabilitation of the agricultural sector. As reflected in Guideline 15 of the Voluntary Guidelines to support the Progressive Realization of the Right to Adequate Food in the Context of National Food Security, many Members felt that food aid based on sound needs assessment should be targeted to the most vulnerable people and only used in internationally- recognized emergencies.
11. The Council underlined the crucial role of agricultural and rural development in reducing poverty and undernourishment, and stressed the importance of increasing resource flows and effectiveness in ways that supported sustainable economic growth and social development.
12. The Council noted the contribution of international trade, including agriculture, in promoting economic development and in eliminating poverty and food insecurity. It also recognized the importance of a fair and market-oriented trading system under the Doha Development Agenda, and the recent consensus reached in the WTO July 2004 Package of Framework Agreements. It called on FAO to continue supporting agricultural market liberalisation efforts through its analytical work on the impact of trade on food security in developing countries, and assistance to them in facilitating their understanding of, and participation in, multilateral trade negotiations.
13. Many Members underlined the positive contribution provided by FAO’s Special Programme on Food Security (SPFS) and by South-South Cooperation (SSC). A number of Members also stated their readiness to share their experience and expertise within the framework of South-South Cooperation.
14. Many Members requested that FAO support the final Declaration of the Summit For Action Against Hunger and Poverty (New York, 20 September 2004).
15. The Council noted the need to pay special attention to the food and agriculture component of the New Partnership for Africa's Development (NEPAD), and welcomed the recent Maputo Declaration, “Together Shaping Our Future,” of the Heads of State and Government of the African, Caribbean and Pacific Group of States that recognized the fundamental importance of agricultural development to economic growth.
16. The Council noted that achieving food security required a complex set of measures, including but not limited to food production and supply. The Council particularly emphasized the need for measures that promoted access to food and income-generating opportunities.
17. The Council endorsed the Report of the Thirtieth Session of the Committee on World Food Security, and the conclusions and recommendations contained therein. With regard to the World Food Summit goal, the Council expressed concern that the progress in reducing the number of the undernourished remained very slow at the global level. It stressed in particular that the situation in sub-Saharan African countries was disturbing. The Council noted that efforts to fight hunger remained insufficient. In this connection, the Council recalled that rural development was essential to sustainable development and poverty and hunger eradication, and called on countries to accord higher priority to food security through agriculture and rural development in national strategies and budgets. Several Members informed the Council on the actions taken by their Governments to overcome poverty and hunger.
18. The Council stressed that the primary responsibility for the fight against poverty and hunger rested with national governments. It agreed on the overriding importance of strong political will and an enabling political, social, economic and sustainable natural resource environment, conducive to economic growth and poverty reduction. The Council emphasized that efforts at national level should be supported by a conducive international environment, and agreed on the need to enhance allocation of resources, including ODA, to agricultural and rural development. Many Members stressed the importance of alleviating the debt burden of developing countries. The Council underlined the importance of food aid, particularly under emergency situations, but stressed that hunger could not be sustainably eradicated by food aid alone.
19. The Council referred to the impact of the locust plague in West and North Africa, and to the recent emergencies caused by a series of hurricanes in Central America and the Carribbean, and their effects on national food security and in worsening the poverty and hunger of the poor. Several Members affected by the locust crisis expressed their gratitude to FAO and donor countries for the support provided and appealed for additional assistance to supplement major efforts already underway. The Council recommended that donor countries, FAO and UN concerned Agencies accelerate coordinated and urgent assistance to the affected countries to prevent the situation from deteriorating further.
20. The Council recognized with satisfaction that the Committee had welcomed the WTO July 2004 Package of Framework Agreements, and supported the Committee’s view that serious work was needed to provide substance to the consensus reached. It also supported the Committee’s recommendation that trade analysis continue to be part of the assessment of the world food security situation, and that FAO assist developing countries in building their capacity to benefit from the opportunities provided by a liberalized trading environment.
21. The Council supported the decision of the Committee to hold a Special Forum in 2006 in order to review progress made in the achievement of the Summit objectives, consonant with the recommendations contained in objective 7.3 viz 7.3 (g) and 7.3 (h). The Council agreed that at the Thirty-first Session of the Committee in 2005, a Multi-stakeholder Dialogue would take place, funded from within available resources between Governments, international organizations and representatives of civil society.
22. The Council noted that, based on its recommendation at its Hundred and Twenty-fifth Session, the CFS had considered the revised reporting format for follow-up of the implementation of the World Food Summit Follow-up. The Council agreed that the Secretariat should convene a regionally-balanced Working Group of Experts to review and finalize a revised reporting format and the related set of indicators.
23. The Council recalled that at the request of the World Food Summit: five years later, the Hundred and Twenty-third Session of the Council had established an Intergovernmental Working Group (IGWG) to elaborate a set of Voluntary Guidelines to support the Progressive Realization of the Right to Adequate Food in the Context of National Food Security. The Fourth Session of the IGWG had adopted the text of the Voluntary Guidelines on 23 September 2004, and had submitted it to the Thirtieth Session of the Committee on World Food Security (Rome, 20-23 September 2004). That Session of the Committee had endorsed the Guidelines and had submitted them to Council for final adoption.
24. The Council expressed its gratitude to the Chair of the IGWG, its Members and Observers, as well as the Secretariat for the successful conclusion of the negotiations which had been conducted in a transparent and participatory manner.
25. The Council adopted the Voluntary Guidelines on the Progressive Realization of the Right to Adequate Food in the Context of National Food Security, attached to this Report as Appendix D. The Council recommended that Members implement the Guidelines, decided to bring the Guidelines to the attention of the next Session of the Conference, and requested the Director-General to ensure their wide dissemination to all relevant UN Bodies and Agencies.
26. Many Members furthermore requested the Secretariat to ensure, through mainstreaming and inclusion in the next PWB proposal, adequate follow-up action on the Voluntary Guidelines, including the preparation of information, communications and training materials, and to strengthen its capacity to assist Members in their implementation. Many Members also requested the Secretariat to seek additional extra-budgetary resources to further mainstream the Voluntary Guidelines.
27. The Council acknowledged the growing burden of non-communicable diseases in both developed and developing countries. It agreed that the subject was complex and that further studies by Member Nations at national and regional levels would be required.
28. The Council stressed that fighting hunger and malnutrition had to remain a high priority for FAO. A majority of Members expressed the view that the scientific basis for the Expert Report recommendations was inadequate and that the application of its global recommendations at individual country level would need to take into account the specific circumstances of each country.
29. Many Members encouraged FAO in accordance with its core mandate to continue its collaboration with the World Health Organization (WHO) on diet, nutrition and non-communicable diseases, and to provide Members with policy advice on nutrition and healthy diet in preventing such diseases. The Council suggested that, within the financial means available to FAO, a thorough assessment be made, taking account of the specific cultural and social characteristics of individual countries, of the linkages between changing food consumption patterns and non-communicable diseases, of the possible effects of changing demand on agricultural production systems and commodity trade, and of supply responses through diversification.
30. The Council observed that in document CL 127/9, on the page entitled “Matters Requiring the Attention of the Council” preceding the COAG Report itself, the correct wording of the second bullet should have been that “many Members (not the Committee) recognized that the Expert Report could be a useful resource for Governments in considering nutritional recommendations to alleviate the growing burden of non-communicable diseases”. With that observation, the Council endorsed the Report of the Eighteenth Session of the Committee on Agriculture (COAG).
31. The Council commended the World Food Programme for its work in 2003, as reflected in the Annual Report of the WFP Executive Board on its activities.
32. Noting that the Annual Report had already been extensively discussed at the Annual session of WFP’s Executive Board in May 2004, the Council noted that there were no specific pending issues for discussion or debate before it.
33. The Council welcomed increased financial contributions, as well as the expansion of the donor base. The Council acknowledged the concerns expressed with respect to the decreasing level of multilateral funding.
34. Some Members recommended that WFP provide an account of work carried out in tackling the underlying causes of food emergencies for its next Annual Report, on the basis of guidelines issued by the Thirty-second Session of the FAO Conference in 2003.
35. Many Members requested WFP to continue to work to strengthen early warning systems and the capacity of developing countries to respond to natural and man-made disasters.
36. In accordance with the Resolution 6/99 adopted by the Thirtieth Session of the FAO Conference on 13 November 1999, the Council was required to elect six members of the WFP Executive Board from among FAO Member Nations for the period 1 January 2005 to 31 December 2007.
37. The Council then elected the following members from the respective lists to the WFP Executive Board for a term of office of three years (1 January 2005 to 31 December 2007):
38. The Council took note that El Salvador had resigned from the WFP Executive Board and agreed that Nicaragua occupy the List C seat thus vacated as of 1 January 2005. It also noted that Belgium had resigned from the WFP Executive Board and agreed that Switzerland occupy the List D seat thus vacated as of 1 January 2005.
39. The Council was informed of the main outcome of the Second FAO/WHO Global Forum of Food Safety Regulators, (Bangkok,12-14 October 2004) and of the FAO/WHO Regional Conference on Food Safety for Asia and the Pacific (Seremban, 24-27 May 2004). The Council expressed appreciation to the Governments of Thailand and Malaysia for hosting the events, and congratulated FAO and WHO on their successful organization. It noted with satisfaction the large number of participants, and in particular the attendance of many participants from the Least Developed Countries.
40. The Council stressed the role of the first two Global Fora in facilitating information exchange and experience sharing among food safety regulators, and in promoting the transfer of knowledge and technology in food safety. It took note of the Secretariat’s intention to continue the consultation process with Member Nations of FAO and WHO on the desirability, feasibility, format and content of possible future fora through an electronic forum and through a discussion with delegates on the occasion of the next session of the Codex Alimentarius Commission. The Council agreed to retain this item on the Agenda for future deliberations, at which time the Secretariat would report on the outcome of the consultation process. Many Members stressed that it would be premature to have the Third Global Forum before 2009, as sufficient time was required for making effective use of the previous fora results. In this context, they also pointed out that the objectives of any Third Global Forum had still to be defined.
41. The Council was informed of plans to convene joint FAO/WHO Regional Conferences on Food Safety for the Near East, Africa, and the Americas and the Caribbean in 2005, provided sufficient extra-budgetary funds were mobilized for this purpose. Several Members supported the convening of the African Regional Food Safety Conference in Zimbabwe in 2005, and called upon donors to provide the necessary funding for this event.
42. The Council endorsed the Report of the Tenth Regular Meeting of the Commission for Genetic Resources for Food and Agriculture and complimented the Commission on the progress it had made over its twenty years of existence. It welcomed the Commission’s proposed Multi-Year Programme of Work, which would need to be reflected in the Organization’s Medium-Term Plan. It also recognized the need to mobilize the Regular Programme of Work and Budget and human resources of FAO, in support of the work of the Commission; to match priorities with available financial and human resources; and, if required, to mobilize extra-budgetary resources. It welcomed the convening of the First International Technical Conference on Animal Genetic Resources in 2007.
43. The Council endorsed the Report on the Second Meeting of the Commission acting as Interim Committee for the International Treaty. While recognizing the progress achieved during the meeting, many Members expressed disappointment and concern about the efficiency of the large number of regional coordination meetings that had limited the time available in plenary. Many other Members noted that such coordination was necessary and had contributed to the advances made at the meeting. The Council also stressed that the focus should be on the preparatory work to support the implementation of the International Treaty on Plant Genetic Resources for Food and Agriculture by preparing the First Session of the Governing Body. A number of Members stated that, as far as possible, resources for the Secretariat and Governing Body of the International Treaty should come from the Regular Programme of the Organization. Other Members stated that the resources for the implementation of the Treaty should come from extra-budgetary resources. It was noted that these matters required further deliberations at the Governing Bodies of the Treaty and the Organization.
44. The Council thanked the Members that had contributed to the work of the Interim Committee, and the European Commission for having hosted the Expert Group on the Terms of the Standard Material Transfer Agreement in Brussels in October 2004. It welcomed the offer of Spain to host the First Session of the Governing Body. It also welcomed the offer of the United States to provide for the meeting of the Contact Group for the Drafting of the Standard Material Transfer Agreement, and the intention of Switzerland to make a contribution for the preparatory work of the Interim Secretariat of the Treaty for the First Session of the Governing Body.
45. The Council welcomed the continued efforts to improve the Programme Implementation Report (PIR), noting that the changes introduced were consistent with the progress made over recent years in the application of Results-Based Budgeting (RBB) principles in FAO.
46. The Council recalled that the PIR was intended to meet accountability requirements for Members in full complementarity with evaluation reports, the contents of which would be summarized in the Programme Evaluation Report (PER). It recognized that there were, necessarily, basic differences in timeframe and scope between the two documents.
47. Some Members mentioned areas where they would welcome the provision of further information, such as additional financial analysis, country level data, and information on impact reporting in order to respond to accountability requirements and to provide the necessary analytical foundations for future programme planning. On the other hand, many Members felt that efforts should be made to reduce the size of the document and avoid duplication. The Council was advised of the practical difficulties in reducing the size of the document while providing more detailed information.
48. The Council noted, in this connection, that the Programme and Finance Committees had made a number of suggestions for further improvements in the document, that included the consolidation of some sections and the need for increased outcomes reporting. It therefore requested that the Committees and the Secretariat explore how the PIR could be enhanced by taking into account, where possible and desirable, the various requests of Members, and by possibly taking advantage of the FAO Website as a modality for providing much of the information.
49. The Council was satisfied that overall delivery under the Regular Programme had included close to full utilization of budgeted resources. Many Members expressed their concern that the FAO’s scarce resources may be too thinly spread over too many activities and consequently hampering FAO’s overall effectiveness. Therefore, FAO should have a stronger focus on priority-setting already in the context of the next Summary Programme of Work and Budget. Many Members emphasized the importance of a vigorous Field Programme, noting in particular the expansion of the Special Programme on Food Security (SPFS) in the last biennium and the essential contributions made by the Technical Cooperation Programme. They looked forward to further extra-budgetary support to the Field Programme, in line with present positive trends.
50. The Council endorsed the document prior to its consideration by the Conference.
51. The Council addressed the Medium-Term Plan (MTP) 2006-2011, with the benefit of the comments of the Programme and Finance Committees, including the detailed review of its substantive contents carried out by the Programme Committee. It welcomed the improvements in the document, including the application for the first time of Results-Based Budgeting principles to the non-technical and technical cooperation areas. The Council recalled that the rolling plan approach, as endorsed by the Conference, should focus the document on new programme entities and changes to existing entities. The Council welcomed the application of this approach in the current version, and encouraged further steps in this direction in future versions.
52. The Council welcomed the analysis in the document of the application of three basic criteria for priority-setting, which were consistent with the guidance it had provided at earlier sessions (i.e. conformity with the Organization’s mandate and relevance to its strategic objectives; expressed priority and usefulness to a broad section of the Membership or to special groups identified by the Governing Bodies; and FAO’s comparative advantage).
53. Many Members recommended that greater prominence be given in future documents to the contribution of FAO to the implementation of internationally-agreed development goals, in particular those of the Millennium Declaration. The Council was informed in this connection that such contributions would be better highlighted in a document for the next session of the Committee on World Food Security (CFS) and that the issue would be duly taken into account in the revision of FAO’s Strategic Framework. The importance of pursuing close partnerships with other UN System organizations and of ensuring active participation of FAO in key country-level policy exercises was also emphasized. Some Members regretted that opportunities for extra-budgetary support had not been listed in this version.
54. The Council appreciated that proposals for capital budgeting had been presented for the first time in the MTP to implement the Capital Expenditure Facility, as approved by the last session of the Conference. It concurred with the endorsement of these proposals by the Finance Committee, including the proposal to carry forward any unused balance of arrears as at 31 December 2005 to this Capital Expenditure Facility.
55. The Council reiterated that resource projections in the MTP were of an indicative nature. It recognized that the proposals in the document embodied Real Growth (RG) at a percentage of 2.2% per annum, while it was also possible to identify the programme implications of Zero Real Growth (ZRG) resource levels. Among other factors with potential impact on contributions, the Council took note that the amount of US$ 14.1 million which had been added by the last FAO Conference to Assessed Contributions for the 2004-05 biennium for the ongoing amortization of After Service Medical Care (ASMC) liabilities, was no longer sufficient on the basis of the latest actuarial valuations. It recognized that the Finance Committee would be considering options for handling this at its next session.
56. Many Members stressed that FAO’s effective action depended on the availability of adequate resources. They felt that the 2.2% per annum RG rate was not commensurate with expressed demand for FAO services in all regions. They were, however, prepared to accept it, if conducive to general consensus and endorsement. Other Members emphasized that this RG rate was not consistent with recent budgetary decisions in FAO and the difficulties experienced by many countries in meeting their financial obligations to the Organization. The Council recognized that alternative scenarios for the next MTP and PWB would be necessary to enlighten the Membership about the possible impact of alternative allocations, including Zero-Real Growth (ZRG), Zero-Nominal Growth (ZNG) and Real Growth (RG). In this context, many Members expressed their preference for a more substantive justification for the proposed significant budget increase for the TCP.
57. The Council recalled that the final decisions on the budget level and assessments for the next biennium would take place in connection with the examination of the Summary (SPWB) and full Programme of Work and Budget (PWB) 2006-07 proposals. Among other aspects, while noting that the issue had been under active consideration in the Finance Committee, it looked forward to continued coverage of concrete and future potential efficiency savings in the PWB documents.
58. In addressing the substance, the Council agreed that the MTP proposals had been framed with the clear intent to be broadly responsive to the varied needs of the Membership. It reiterated the importance of maintaining an adequate balance between normative and operational activities and noted that core activities under the Regular Programme should not be excessively dependent on extra-budgetary resources. The Council supported the new Priority Area for Inter-disciplinary Action (PAIA) on the implications of the HIV/AIDS pandemic on food and agriculture and looked forward to the review of PAIAs by the Programme Committee. It further noted that the Programme Committee would continue to address priority-setting at its next session.
59. In their interventions, Members stressed a number of areas to which they attached particular importance, including: national capacity-building in general; technical assistance to developing countries, including in relation to WTO trade negotiations and in the context of NEPAD for the Africa Region; natural resources management and soil and water conservation; the two components of EMPRES dealing with locusts and animal health; assistance in the context of the Avian Influenza epidemic; support to the implementation of the Voluntary Guidelines for the Right to Food; support for development and implementation of Africa’s priorities; biotechnology and biosecurity; fisheries, including attention to Illegal, Unreported and Unregulated Fisheries and support to regional Fisheries Bodies; forestry, including support to regional commissions; key international instruments such as the IPPC, Codex, and the International Treaty on Plant Genetic Resources; the GIEWS and FIVIMS; data collection and FAOSTAT; gender mainstreaming; Technical Cooperation Programme (TCP) and the Special Programme for Food Security (SPFS).
60. In conclusion, the Council gave its general endorsement of the substantive content of the Medium-Term Plan as a basis for the preparation of PWB proposals for the next biennium, taking account of the comments made by the Programme and Finance Committees, the results of discussions in its Technical Committees early next year, and its own reactions, as summarized above.
61. The Council noted that the Committees had continued to address this item, dealing with improved arrangements for COAG and CCP sessions and with the implications of a shorter FAO Conference in November 2005, and that the Committees would return to some aspects of the latter issue at their next Joint Meeting.
62. The Council noted that the Committees also addressed at their Joint Meetings in May 2004 proposed adjustments to the Programme of Work and Budget 2004-05 and that they had endorsed them, thus facilitating the implementation of programmes against an approved budget in the current biennium. A more detailed assessment of these adjustments was carried out by the Programme Committee at its own session. The Council was advised that it had not yet proved possible to make sufficient efficiency savings to redress some of the cuts made to Programme 3.1.2 Policy Assistance to Various Regions and 5.2.1 Financial Services, but every effort would be made to do so to the extent possible in the remainder of the biennium.
63. The Council also took note that the Committees had recognized the importance attached to the reinstatement of the cancelled session of COAIM (Consultation on Agriculture Information Management) or some acceptable alternative approach, and that they would consider proposals from the Secretariat at their next sessions in the context of the SPWB 2006-07.
64. The Council noted that, beyond the detailed examination of proposed adjustments to the Programme of Work and Budget 2004-2005, of the substantive contents of the Medium-Term Plan (MTP) 2006-2011 and of the Programme Implementation Report (PIR) 2002-2003, the Programme Committee had addressed several important evaluation reports and documents, and in particular the Evaluation of FAO’s Decentralization.
65. The Council echoed feelings in the Committee in welcoming the depth and independence of the evaluation of FAO’s Decentralization and the timeliness of the exercise. The Council recognized that the evaluation report was of a particularly complex nature and contained many valuable suggestions and ideas, in addition to formal recommendations.
66. The Council further noted that the Committee would consider at its next session a comprehensive response to the evaluation and attendant action plan. This response would include:
67. The Council looked forward to further advice from the Committee on the basis of this more detailed discussion, while recognizing that related proposals could be progressively incorporated into the Programme of Work and Budget for consideration by the Governing Bodies.
68. The Council noted that the Programme Committee had also examined a document on: “Policy and Operational Framework of the Technical Cooperation Programme”15. It further noted that preliminary proposals for strengthening the TCP would be considered by the Committee at its next session. In this connection, the Council welcomed the fact that the Evaluation Service would undertake a review of certain aspects of the TCP, including recommendations for strengthening its effectiveness and the results of a consultative process with Governments and other external stakeholders.
69. The Council underscored its expectation that this TCP review process should be carried out in such a way as to contribute to further strengthening of the Programme, its adaptation to changing contexts, and the enhancement of its impact in Member Nations.
70. The Council considered and adopted the Reports of the Hundred and Sixth, Hundred and Seventh and Hundred and Eighth Sessions of the Finance Committee and in particular discussed the following items:
71. The Council considered the status of contributions and arrears of the Organization at 18 November 2004, and noted that the percentage of current assessments received compared reasonably with that of the previous year at the same date, but showed a significant shortfall compared to the same period two years ago. The Council noted that over 32 percent of the Membership of the Organization had made no payment towards their US$ portion of 2004 assessments, and 45 percent of the Membership, had not made any payment towards their Euro portion of 2004 assessments.
72. The Council expressed concern over the high level of arrears outstanding, noting that fifty-three Member Nations still had arrears outstanding from 2003 and previous years and thirty-four owed arrears in such amounts as would prejudice their Right to Vote in accordance with Article III.4 of the Constitution. It further noted that the shortfall in receipts of contributions resulted in the deterioration of the cash-flow situation, causing the Organization to resort to external borrowing and thus increasing interest costs. While appreciating the often-difficult financial situations of some countries, the Council urged all Member Nations to pay their contributions in full to enable the Organization to continue to fulfil its mandate.
73. The Council reviewed the Director-General's Thirty-seventh Annual Report on Budgetary Performance to Member Nations for 2002-2003, as well as the report of the discussions of the Finance Committee at its Hundred and seventh session in May 2004.
74. The Council noted that the Director-General had managed the Regular Programme Appropriations in accordance with the Financial Regulations. Further, it took note of the transfers between budgetary chapters and of the fact that they fell within the levels previously approved by the Finance Committee at its Session in September 2003.
75. The Council recalled that in December 2003 the Conference had decided to introduce a new methodology for the determination of equitable geographic distribution. In this connection, the Conference had requested the Secretariat to submit a report through the Finance Committee to the Council on the results of the application of the new methodology20, including the possible impact of adding a post grade-weighting factor to the system.
76. The Council noted that the application of the new formula had resulted in a significant increase in the number of equitably-represented countries. Only small variations in representation status were found among the three options analyzed. Many Members requested the Secretariat that when applying the new methodology for the determination of equitable geographic distribution, it should not include the post grade weighting factor.
77. The Council took note of the analysis of the application of the new methodology, including the comments of the Finance Committee thereon, and concluded that the new system should be permitted to operate for some time before any further revisions were considered.
78. The Council welcomed the information provided on staffing statistics broken down by region, nationality, grade and gender21. The Council noted the serious under-representation of one region (even under the new methodology), and stressed the need for further efforts to remedy the situation.
79. The Council noted that the External Auditor had issued an unqualified opinion on the FAO Audited Accounts for the biennium 2002-2003 and that, for most recommendations, the Organization had either taken adequate action or had assured the External Auditor that it would do so.
80. The Council, noting the comments and clarifications provided by the External Auditor and the Secretariat to the Finance Committee, decided to submit the Audited Accounts for the 2002-2003 biennium to the Conference for adoption.
81. Accordingly, the Council submitted the draft resolution below to the Conference:
Draft Resolution for the Conference
Having considered the report of the 127th Session of the Council, and
Having examined the 2002-03 FAO Audited Accounts and the External Auditor’s Report thereon
Invites the Secretariat to further implement the recommendations of the External Auditors.
Adopts the Audited Accounts.
82. The Council took note of the Finance Committee’s view expressed in several past sessions22 that the Incentive Scheme had no real impact in encouraging prompt payment by Member Nations.
83. The Council noted that the Committee had proposed that the rates of discount to be credited against 2005 contributions in US dollars and Euro be set at zero on a trial basis. Some Members observed that setting the discount rate to zero constituted a suspension of the Incentive Scheme, and noted their opposition to this. The Council further noted the Committee’s proposal that the effect of a discount rate of zero on Members’ timing of payments in early 2005 should be analysed against past behaviour, as this could reveal whether the Incentive Scheme had any relevance.
84. The Council noted the updated information provided to the Finance Committee on all the schemes of staff-related liabilities reflecting the financial situation of the liabilities as reported in the FAO 2002-03 Audited Accounts and based on the latest actuarial valuations at 31 December 2003, as well as developments in the 2004-05 biennium and funding issues.
85. The Council was informed that total staff-related liabilities, recorded and unrecorded, had increased significantly from 31 December 2001 to 31 December 2003 due primarily to a “one-time” change in methodology for the 2003 actuarial valuation of the After Service Medical Care (ASMC). The 2001 calculations had been based on a single valuation for the scheme participants of all Rome-based UN Agencies, using a notional apportionment of retirees amongst the Agencies. The 2003 method of computing ASMC liability had reflected two calculations, one for FAO and IFAD and one for WFP which now handled its own valuation. This resulted in a different combination of age groups in the two calculations and, because FAO was an older organization compared to WFP and IFAD, the distribution of liability had resulted in a significant increase in the FAO share and a reduction in the liabilities of the other participating Agencies. The magnitude of the increase had become evident with the release of the results of the 2003 Actuarial Valuation by the actuaries in February 2004. The Council took note that future biennial actuarial calculations would reflect normal demographic changes and, therefore, the liabilities should not fluctuate so significantly.
86. The Council recalled that the funding of staff-related liabilities was provided first from the investment income of long-term investments earmarked for staff-related liabilities and secondly, from budget appropriations, which started in 2004-05. The Conference in 2003 had approved partial funding of the ASMC liability of US$14.1 million in 2004-05 based on the latest Actuarial Valuation, which was as of 31 December 2001. The Council noted that funding would need to increase to US$30 million for the 2006-07 biennium to offset the increased biennial amortization for ASMC calculated as at 31 December 2003. This was necessary for the gradual elimination of the unfunded liability by matching funding with amortization over the next several biennia. The need to adjust biennial ASMC funding in accordance with the latest Actuarial Valuation had been recognized by the Council at its Hundred and Twenty-fifth session in 2003 when it endorsed the inclusion of US$14.1 million in the 2004-05 Budget Resolution towards the ASMC liability. The Council recognized that insufficient funding would cause the unfunded portion of the liability to increase, compounding the difficulties of reaching full funding in future years.
87. The Council expressed concern regarding this issue and noted the need to examine options available for funding the additional US$15.9 million needed in the 2006-07 Budget in respect to the increased ASMC amortisation arising from the latest actuarial report. It noted that the Finance Committee at its May 2005 Session would review proposals and the range of options available on the funding of the ASMC liability and formulate a recommendation to Council on the amount of funding to be included in the 2006-07 Budget Appropriation.
88. The Council considered and adopted the Reports of the Seventy-sixth and
Seventy-seventh Sessions of the Committee on Constitutional and Legal Matters (CCLM).
Proposed Amendment to Rule VIII.5 of the Rules of Procedure of the Codex Alimentarius Commission (Advisory Functions of the Executive Committee in Respect of the Granting, by the Directors-General of FAO and WHO, of Observer Status to International Non-Governmental Organizations)
89. The Council endorsed the CCLM’s view that the proposed Rule, as well as its underlying approach, were consistent with existing procedures. The Council took note that the proposed amendments will be considered, for approval, by the Codex Alimentarius Commission. The proposed wording for the revised Rule is the following:
“Rule VIII. Observers
5. Participation of intergovernmental organizations in the work of the Commission and the relations between the Commission and such organizations shall be governed by the relevant provisions of the Constitutions of FAO or WHO, as well as by the applicable regulations of FAO or WHO on relations with intergovernmental organizations; such relations shall be handled by the Director-General of FAO or WHO, as appropriate.
6. Participation of international non-governmental organizations in the work of the Commission and the relations between the Commission and such organizations shall be governed by the relevant provisions of the Constitution of FAO or WHO, as well as by applicable regulations of FAO or WHO on relations with international non-governmental organizations. Such relations shall be handled by the Director-General of FAO or WHO, as appropriate, on the advice of the Executive Committee. The Commission shall develop and keep under review principles and criteria concerning the participation of international non-governmental organizations in its work, consistent with the applicable regulations of FAO or WHO.”
Legal status of bodies established under Article XIV of the FAO Constitution
90. The Council agreed that the legal status of bodies established under Article XIV of the FAO Constitution has to be seen in such a way as to reconcile, in a suitable manner, the requirements of functional autonomy of such bodies and the fact that they are placed and operate under the framework of FAO. The constituent instruments of bodies under Article XIV of the FAO Constitution do not entrust them with legal personality, i.e. capacity to hold rights and obligations of their own, and, therefore, they have to act through FAO or drawing on the legal capacity of FAO. The Council considered in particular the following issues:
- Legal capacity of bodies under Article XIV of the FAO Constitution to perform legal and material acts with particular reference to the possibility of entering into agreements
91. The Council decided that a procedure for the conclusion of contracts and agreements, other than informal working arrangements, be followed in future. Such contracts and agreements should be reported to the Organization prior to conclusion, with a view to ascertaining any possible policy, programme or financial implications for the Organization, in keeping with the spirit of Part R of the Basic Texts. The secretaries of the bodies could be authorized to sign the contracts and agreements, which should make appropriate reference to the status of the bodies under Article XIV of the FAO Constitution. The Council noted that, in reviewing any proposed contracts and agreements, FAO would take account of the functional requirements of the bodies concerned and would not interfere with their substance, except in the event that they should have policy, programme or financial implications for FAO.
92. The Council requested the Director-General to monitor the implementation of this procedure, with a view to assessing whether amendments to Part R of the Basic Texts were required.
- Procedures for the selection and appointment of secretaries of bodies under Article XIV of the FAO Constitution
93. The Council recognized that, in cases where the secretary of a body is appointed by the Director-General with the approval of the body concerned, the need arises to harmonize the requirements inherent in the status of the secretaries of functional autonomy and technical accountability towards the concerned bodies and of administrative accountability towards the Organization, as officials of FAO. The Council noted that the selection and appointment process cannot be seen as one including two parallel and independent segments consisting, on the one hand, in the identification of a candidate by the body and, on the other hand, his or her appointment by the Director-General who would be required merely to appoint the selected candidate, without any form of involvement in the process of identification of qualified candidates. The Council stressed that this would not be consistent with the applicable legal framework, including the constitutional duties of the Director-General in the selection and appointment of staff.
94. The Council agreed that the procedure adopted recently by the General Fisheries Commission for the Mediterranean (GFCM), at its Extraordinary Session (Malta, 19-23 July 2004), provided a legally acceptable solution for the appointment of secretaries of bodies under Article XIV of the FAO Constitution having autonomous budgets. The Council invited the Indian Ocean Tuna Commission (IOTC) to amend its Rules of Procedure, as far as the selection and appointment procedure of its secretary is concerned, along the lines of the procedure approved by the GFCM, on the understanding that the revised procedure would apply only in future.
- Status of documents or decisions having policy, financial or programme implications for the Organization
95. The Council confirmed that any documents or decisions having policy, programme or financial implications for FAO must be reported to the Organization and that the Organization must be given a timely opportunity to express its views. The Council noted that such requirement is without prejudice to the functional autonomy of bodies under Article XIV of the FAO Constitution on technical matters and that, from a practical point of view, there is a need for the concerned secretaries to assess, in cooperation with the competent FAO unit, each particular situation in light of this requirement. The Council noted also that, should any document or decision having policy, programme or financial implications for the Organization be prepared during sessions of the bodies concerned, the representative of the Director-General should be allowed to present the position of the Organization.
96. The Council requested the Director-General to keep the matter under review in order to assess whether any amendments to Part R of the Basic Texts are needed.
- Status of Member Organizations of FAO within bodies under Article XIV of the FAO Constitution
97. The Council reaffirmed that the status of Member Organizations in bodies under Article XIV of the FAO Constitution - except for special situations where, in view of its full competence, the Member Organization was a Member of a body to the exclusion of its Members - was the same as in FAO. Accordingly, membership was based on the fundamental principle of the alternative exercise of membership rights of a Member Organization and its Members in areas of their respective competence.
98. The Council also confirmed that, in cases where a Member Organization participates in a particular body on the basis of the principle of the alternative exercise of membership rights, it may not hold office. The Council recommended that this be duly reflected in the Rules of Procedure of relevant bodies established under Article XIV of the FAO Constitution.
Proposal for the Establishment of a South West Indian Ocean Fisheries Commission (SWIOFC) under Article VI of the FAO Constitution
99. The Council adopted the following Resolution:
Statutes of the South West Indian Ocean Fisheries Commission
Noting the wishes expressed to the FAO Council, at its One Hundred and Sixteenth Session in June 1999, by the former members of the Committee for the Development and Management of Fisheries Resources in the South West Indian Ocean, i.e. Comoros, France, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, Somalia and Tanzania, for the establishment of a regional organization to promote the sustainable development, conservation, rational management and best utilization of fisheries resources in the region with special emphasis on fisheries targeted at non-tuna species;
Taking into consideration that the coastal States have established areas of national jurisdiction in accordance with the United Nations Convention on the Law of the Sea of 10 December 1982, and general principles of international law, in the exercise of their sovereign rights for the purpose of exploring and exploiting, conserving and managing the living marine resources in those areas;
Noting the objectives and purposes stated in Chapter 17 of Agenda 21 adopted by the United Nations Conference on Environment and Development in 1992;
Recognizing the relevant provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 and taking into account the Code of Conduct for Responsible Fisheries, 1995;
Recognizing further the economic and geographical considerations and the special requirements of developing States, including small-island developing States, and their coastal communities, for equitable benefit from living marine resources;
Recognizing furthermore that the coastal States in the region face common or similar problems in the development and proper utilization of the fisheries resources in their coastal waters, and need a mechanism for international cooperation in facing these common or similar problems, which would be furthered by the establishment of an advisory commission on fisheries management and development;
Hereby establishes under Article VI.1 of the Constitution of the Organization a fisheries advisory commission, to be known as the South West Indian Ocean Fisheries Commission, the Statutes of which are attached to this Report as Appendix E.
(Adopted on 25 November 2004)
Seating Arrangements for the European Community in Meetings of the Codex Alimentarius Commission and its Subsidiary Bodies
100. The Council approved the special seating arrangements for the European Community in meetings of the Codex Alimentarius Commission and its subsidiary bodies, whereby the delegation of the European Community sits next to the delegation of the country holding the rotating presidency of the Community. The Council emphasized that such arrangements must be seen in light of the special nature of the Codex Alimentarius Commission and its work and shall not set a precedent in respect of the practice followed by the Organization since 1991, neither in the Council nor in any other bodies or meetings of the Organization.
Correction of Errors in the Basic Texts in the Different Languages
101. The Council, in order to harmonize all five versions of the General Rules of the Organization in the different languages, approved the following corrections:
- Spanish version of Rule XXXVI. “Appointment of the Director-General”, of the General Rules of the Organization. In paragraph 1(a), the English version refers to “…by the date set by the Council”, and the French version mentions “…dans les délais fixés par le Conseil”, whereas the Spanish version mistakenly refers to “…en la fecha fijada por el Consejo”. The correct representation of the Rule in Spanish should read “…en el plazo fijado por el Consejo”. The Arabic and Chinese versions are consistent with the English and French versions as described here.
- Arabic version of the same Rule XXXVI of the General Rules. In paragraph 1(a) the English version refers to "such date ... shall be not later than 30 days before...", the French version contains the phrase “le délai ainsi fixé … est d'au moins 30 jours avant la session du Conseil”, and the Spanish version states “la fecha fijada … debe ser 30 días antes por lo menos del período de sesiones del Consejo”. However, the Arabic version mistakenly mentions that such period shall be not less than 30 days before such date. The correct representation of the rule in Arabic should read "ينبغى ألا يتجاوز الموعد المحدد 30 يوما قبل....". The Chinese version is consistent with the English, French and Spanish versions as described here.
- French version of Rule XLVIII, “Suspension and amendment of Rules”. In the last sentence of paragraph 2 the English version refers to “..an appropriate committee”, and the Spanish version correctly mentions “..comité correspondiente”. However, the French version erroneously refers to “..un comité ad hoc” and this should read “..un comité approprié”. The Arabic and Chinese versions are consistent with the English and Spanish versions as described here.
Information on Developments in the UN System Regarding Registered Partnerships and Same-sex Marriages
102. The Council took note of some developments that occurred in the United Nations recently, and supported the CCLM recommendation that the CCLM discuss the issue and prepare a proposal at its spring session, thus allowing the Organization and its Members to take an active approach on the issue at the session in June 2005 of the Council.
103. In accordance with Paragraphs B-1 and B-2 of the “Statement of Principles relating to the Granting of Observer Status to Nations”,25 the Council agreed that the Russian Federation attend its Session as an observer.
104. By Resolution 11/99 of the Thirtieth Session of the Conference (Rome, 12-23 November 1999), the Director-General was appointed for a period of six years from 1 January 2000, the term of office expiring on 31 December 2005. Under the provisions of Rule XXXVI-1(a) GRO, it was necessary for the Council to set the date for Nominations to the Office of Director-General.
105. The Council decided that Nominations to the Office of Director-General should be communicated to the Secretary General of the Conference and Council at the latest by 8 April 2005 at 12.00 hours, and that such Nominations should be circulated by the Secretary-General to all Member Nations of the Organization by 29 April 2005.
106. The Council was informed of the application for membership received from the Government of the Republic of Belarus.
107. Pending a decision by the Conference on this application and pursuant to Rule XXV.11 of the General Rules of the Organization and paragraphs B-1, B-2 and B-5 of the "Statement of Principles relating to the Granting of Observer Status to Nations", the Council authorized the Director-General to invite the applicant country to participate, in an observer capacity, to the present Council session, as well as regional and technical meetings of the Organization of interest to it.
108. The Council approved the Calendar for 2005, as reproduced in Appendix F to this Report, while noting that the dates for 2006 were indicative. The Calendar of FAO Governing Bodies and Other Main Sessions for 2006 would be approved by the Hundred and Thirtieth Session of the Council in November 2005 on the basis of a Provisional Calendar 2006-2007 to be examined at that Session.
109. In accordance with Article 6(c) of the Regulations of the United Nations Joint Staff Pension Fund, the Council – on behalf of the Conference – appointed His Excellency Don Oscar Antonio Oyuela Castellón, Alternate Permanent Representative of the Republic of Honduras to FAO, as alternate member to the Staff Pension Committee for the period ending 31 December 2006, to replace and complete the term of office of Her Excellency Doña Victoria Guardia Alvarado de Hernández, Permanent Representative of the Republic of Costa Rica to FAO, appointed by Conference at its Thirty-Second Session for the period 1 January 2004 to 31 December 2006.
110. The Council noted the Director-General’s proposal to extend the target funding level of the Special Fund for Emergency and Rehabilitation Activities (SFERA) to US$20 million and to create an emergency trust fund with an annual target funding level of US$80 million.
111. Some Members appreciated the proactive response of the Organization in determining the need for extra-budgetary funding for emergency preparedness and rapid response, as well as the ongoing actions to identify internal procedural constraints, following the review of the SFERA by the Finance Committee at its Hundred and Eighth Session in September 2004.
112. The Council noted that no commitments were sought from donors at this stage, and that the arrangements on how the trust funds could operate, and their optimal funding level, would also depend upon the extent of support that would be attained as a result of further consultation and discussion with donors.
113. The Council agreed to launch an Independent External Evaluation of FAO. The evaluation aims at strengthening and improving FAO, taking into consideration FAO’s performance in conducting its mandate. In doing this, the evaluation process represented FAO’s contribution to the overall efforts of the international community to strengthen the UN System through appropriate reform. The Evaluation would consider all aspects of FAO’s work, institutional structure and decision processes, including its role within the international system. It could also be a resource for the review of the Strategic Framework.
114. The Council thus decided to establish an Inter-Sessional Working Group (ISWG) to formulate proposals for the scope, conduct and institutional arrangements for the evaluation for consideration by the Council. The ISWG would consist of a core group of up to three Members of each regional group and the coordinator of the Group of 77. All Member Nations would be entitled to participate in the ISWG. The First Meeting of the ISWG would be convened by the Independent Chairman of the Council. At this meeting, the ISWG would establish its modalities of work and decide on the Chairpersonship. The Secretariat would provide the administrative and technical support, as well as any information required by the ISWG.
115. The Council decided that the ISWG will prepare proposals for:
116. The ISWG would present its proposals preferably to the Hundred and Twenty-eighth Session of the Council in June 2005, and in any case not later than the Hundred and Twenty-ninth Session in November 2005.
117. All phases of the evaluation process, commencing with the work of the ISWG, would be financed from extra-budgetary resources, in full accordance with the financial rules and regulations of the Organization.
118. The Council welcomed the upcoming Conference on Water for Food and Ecosystems which was being jointly organized by FAO and the Government of the Netherlands in the Hague, from 31 January to 5 February 2005.
119. The Council welcomed the initiatives of many Members in implementing the International Year of Rice 2004.
120. The Council stressed the importance of the Ministerial Meeting on Fisheries to be held in Rome in March 2005, and the need to address the issues of the use of flags of convenience by IUU fishing vessels, and making Regional Fisheries Management Organizations more effective and accountable therein. The Council welcomed the organization of a parallel meeting of Ministers of Fisheries on the specific issue of the NEPAD Fisheries’ Programme.
121. The Council also stressed the importance of the Ministerial Meeting on Forests to also be held in Rome in March 2005. Some Members proposed that FAO convene a meeting of Forestry Ministers every four or five years before the Committee on Forestry (COFO) is held.
122. The texts of the declarations made on these matters can be found in CL 127/PV/7.
1 CL 127/1-Rev.2; CL 127/INF/1-Rev.1; CL 127/INF/6; CL 127/LIM/4; CL 127/PV/1; CL 127/PV/8.
2 CL 127/PV/1; CL 127/PV/8.
3 CL 127/2; CL 127/PV/2; CL 127/PV/8.
4 CL 127/10; CL 127/PV/3; CL 127/PV/8.
5 CL 127/10-Sup.1; CL 127/PV/3; CL 127/PV/4; CL 127/PV/8.
6 CL 127/9; CL 127/PV/4; CL 127/PV/8.
7 CL 127/3; CL 127/PV/4; CL 127/PV/8.
8 CL 127/4; CL 127/4-Sup.1; CL 127/PV/4; CL 127/PV/8.
9 CL 127/18; CL 127/PV/4; CL 127/PV/8.
10 CL 127/20, Cl 127/PV/7, CL 127/PV/8.
11 C 2005/8; C 2005/8-Corr.1; CL 127/PV/4; CL 127/PV/8.
12 CL 127/7; CL 127/PV/4; CL 127/PV/5; CL 127/PV/6; CL 127/PV/8.
13 CL 127/8; CL 127/16; CL 127/PV/6; CL 127/PV/8.
14 CL 127/11; CL 127/12; CL 127/PV/6; CL 127/PV/8.
15 PC 92/7.
16 CL 127/13; CL 127/14; CL 127/15; CL 127/PV/6; CL 127/PV/8.
17 CL 127/LIM/1; CL 127/PV/6; CL 127/PV/8.
18 CL 127/PV/6; CL 127/PV/8.
19 CL 127/6; CL 127/PV/6; CL 127/PV/8.
20 Resolution 15/2003 on Methodology for Equitable Geographic Distribution.
21 CL 127/15, Annex III.
22 Ref. CL 119/13, paras. 39-41; CL 120/15, paras. 47-51; CL 123/15, paras. 59-62.
23 CL 127/5; CL 127/21; CL 127/21-Corr.1 (English, French and Spanish; CL 127/21-Corr.1 (French only); CL 127/PV/7; CL 127/PV/8.
24 CL 127/LIM/2; CL 127/PV/1; CL 127/PV/8.
25 See FAO Basic Texts, Volume II, Section L (Appendix).
26 CL 127/19; CL 127/PV/1; CL 127/PV/8.
27 CL 127/17; CL 127/PV/1; CL 127/PV/8.
28 CL 127/LIM/3; CL 127/PV/7;CL 127/PV/8.
29 CL 127/LIM/5; CL 127/PV/7; CL 127/PV/8.
30 CL 127/22, CL 127/PV/7, CL 127/PV/8.
31 CL 127/LIM/4; CL 127/LIM/6; CL 127/PV/1; CL 127/PV/5; CL 127/PV/7; CL 127/PV/8.
32 CL 127/PV/7, CL 127/PV/8.