The evolving priorities and new opportunities outlined in the previous section would be sufficient in themselves to suggest that FAO needs to adapt itself to continue serving its Members effectively in the coming years. It is also evident that the Organization has been constantly adapting over the past six decades and that it could continue to do so through a process of gradual change and improvement over a period of years, in response to new and differing requirements. Such would be a "business-as-usual" scenario.
The Director-General's decision to propose, instead, a far-reaching reform for immediate implementation has been prompted both by developments in the wider environment of the UN system, and by reflections and consultations within the Secretariat and in the deliberations of its Governing Bodies, primarily during the year 2005. This section examines these developments and explains the process followed so far in consulting on the proposals, with a view to facilitating consensus on them by the time of the Conference in November, 2005.
The year has seen a remarkable succession of significant developments of high relevance to FAO. The UN's 2005 World Summit has brought into even sharper focus the actions needed to achieve the internationally agreed goals, in particular, the overarching MDG 1, which explicitly recognizes the interrelationship between hunger and poverty and the imperative of reducing both. This message was at the core of the two World Food Summits FAO has held in the past decade: that it is acknowledged in the broader context of these global development goals is a vindication of the Organization's advocacy on behalf of the food-insecure. But while stating the goals was a crucial step, they are far from being attained, and UN organizations are seen as having an important role in assisting countries to achieve them.
The expectations of UN Members are that the system must reform itself in order to rise to this challenge. In an important section of the Outcome Document of the 2005 World Summit, Heads of State and Government pledged to "enhance the relevance, effectiveness, efficiency, accountability and credibility of the UN system". As one of the oldest of the specialized agencies, FAO must reflect seriously on the situation in which the system finds itself, facing such pressing calls for reform in order to eliminate overlap and duplication in mandates and ensure stronger system-wide coherence and effectiveness. Part of the momentum for change comes from the concepts of partnership, coordination and harmonization that are reflected in the Paris Declaration on Aid Effectiveness: ownership, harmonization, results and mutual accountability, adopted at the Paris High-Level Forum in March 2005. UN organizations are expected to take account of changes in the approach adopted by major multilateral financing institutions and by bilateral donors, aiming at promoting full national ownership of development strategies and programmes, and national accountability for results.
The process of UN reform began several years ago. However, initially the concentration has been on achieving greater coherence among the UN funds and programmes, both centrally and at the country level. In future, attention is expected to focus particularly on the specialized agencies, and it is within this framework that a proactive response from FAO is required. Recent donor studies claim that the agencies, including FAO, have been slow to adapt themselves to the changes in the wider environment of development cooperation. Having global sectoral mandates, the agencies are very different in nature from the UN funds and programmes, the IFIs or donor organizations. They have important responsibilities for norm-setting and the production of global public goods in the areas of their mandates; with respect to supporting country efforts, their principal comparative advantage is seen by some as being in the areas of advocacy, policy and technical advice, and capacity building, and by others in developing pilot projects as a basis for upscaling at national level and coordinating regional and international programmes.
In general, the agencies face similar challenges in maintaining the appropriate balance between their global work and the need to provide services to individual member countries. However, they are custodians and depositaries of knowledge in their respective fields of competence and represent a significant investment by their Members, over many years, in building up a wealth of information, experience, technical expertise and analytical capacity, which makes them well-placed to provide evidence-based advice on policy and technology options, and to facilitate capacity building and the transfer of knowledge. It is therefore essential that the specialized agencies participate proactively in the next phase of UN reform, which is expected to find ways of drawing on all the knowledge and experience available within the system to support development in member countries.
The urgent need for decisive action on FAO's part to respond to these concerns became even more apparent in the context of discussions in the UN Chief Executives Board (CEB), during which the developments outlined above were addressed collectively by the heads of UN organizations. In early 2005, FAO re-examined all of its programmes in the light of the MDGs and of the ongoing process of UN reform. The review found that much of FAO's work is already contributing directly or indirectly to achievement of the MDGs. It concluded that about half of the Organization's effort in relation to the MDGs is directed towards MDG 1 - to eradicate extreme poverty and hunger. Important contributions are made to MDG 7 - to ensure environmental sustainability, as well as to MDG 3 - to promote gender equality. Significant indirect contributions are made to MDG 4 - to reduce child mortality; MDG 5 - to improve maternal health; and MDG 6 - to combat HIV/AIDS, malaria and other diseases. FAO's increasing engagement in alliances and partnerships, as well as its work on commodities and trade, responds to MDG 8 - to develop a global partnership for development.
The review also recognized, however, that the Organization needed to "critically re-examine its own role within the [UN] system and articulate how it will adapt to face the challenges ahead".
It noted that the focus of efforts to achieve the goals will be at the country level, and that FAO needs to determine where and how its capacities should be most effectively deployed at this level in the context of the UN system's overall contribution to the process. The proposed strategy to enhance FAO's contribution as part of collective action by the UN system to respond to the MDG challenge, had four main elements: advocacy to boost momentum in addressing the Goals; better targeting of FAO's own programmes; strategic alliances and partnerships; and cooperation, within the framework of the UN Resident Coordinator system, at the country level.
It was concluded that FAO should develop its role as a privileged adviser to governments in the spheres of its competence and engage fully in UN-wide reforms, strengthening its capacity to work in closer partnership within UN mechanisms such as the CEB and other relevant coordinating arrangements. It should also contribute to coordinating processes at the national level, especially Common Country Assessments (CCAs) and UN Development Assistance Frameworks (UNDAFs). The Organization must take these frameworks, as well as the Poverty Reduction Strategies or other relevant national strategies, as the key points of reference for improving priority setting for its own programmes at country level.
The review also pointed out the considerable scope that exists for expanding the range of joint programmes with other UN agencies, building on the successful experience of the Joint FAO/International Atomic Energy Agency (IAEA) Division of Nuclear Techniques in Food and Agriculture, the Joint Programme for Codex Alimentarius with WHO and the FAO/World Bank Cooperative Programme. One conclusion was that FAO might do more, in future, to assist countries in addressing the MDGs concerning child mortality, maternal health and combating diseases, all areas in which the importance of adequate nutrition is capital, and that this should be envisaged in the framework of joint work with other UN organizations dealing with these target groups.
In parallel with the review of FAO's contribution to the MDGs, a thorough survey was conducted on the nature of FAO as an organization that collects, generates, processes, standardizes, disseminates, transfers and applies knowledge in a continuous cycle. The conclusion that 80 percent of the knowledge was in the heads of individuals, within and outside the Organization, had far-reaching consequences, leading to the concept of knowledge networks.
The preparation of the reviews both of FAO as a knowledge organization and of FAO's contribution to the MDGs and UN reform coincided with consideration of the outcome of the Independent Evaluation of FAO's Decentralization. The recommendations of the evaluation were not entirely surprising, as FAO was already trying to address some of the problems, but they were far-reaching in their implications. It was clear that the decentralization process - one of the principal aspects of the reorganization in 1994 and further pursued in subsequent biennia - had still not produced the full benefits expected. The evaluation had acknowledged that the context of shrinking resources in which decentralization had taken place had had major implications for its effectiveness. Nevertheless, the recommendations made by the Independent Evaluation involved substantial modifications to the structure and functioning of FAO's network of decentralized offices
The evaluation emphasized the need to strengthen the Organization's capacity to respond to its Members' requirements in a relevant and timely fashion, with staff and consultants of the requisite calibre, familiar with the conditions of the countries. In order to do this, flexible arrangements for identifying national priorities at country level in partnership with multilateral partners were found to be essential, as was effective decentralization of authority and placing staff in proximity to the countries, especially in those parts of the world where physical communications are difficult. It was also considered important to build a more networked Organization with increased interchange between headquarters and decentralized offices. In practice, implementation of these and other recommendations required simultaneous changes in FAO's headquarters structure to permit and reinforce their execution. Measures to address the recommendations needed to be accompanied by actions to bring about what the Council had described as "a major shift in organizational culture" in order to increase flexibility in execution and ensure clearer accountability for results.
The Independent Evaluation of FAO's Decentralization was one of the most recent of a series of external reviews and assessments on which reports had been submitted to FAO's Governing Bodies. These reviews, of which a list is provided in Annex 1, had addressed various aspects of FAO's programmes and operations following the Director-General's initial reform measures launched in 1994. While their recommendations had been carefully considered and accommodated to the extent possible, it was clear that, as was the case for the decentralization evaluation, substantial modifications to FAO's structure and ways of doing business might provide more fertile terrain for implementation of some of the more fundamental conclusions of these reviews.
At the time that discussions were taking place in the Council concerning decentralization, there was also a clear expression by some Members of concerns about FAO's planning and programming process. In efforts to meet past requests for greater transparency, the Organization has greatly modernized and systematized its planning, implementation, monitoring and evaluation processes, and increased the amount of reliable data and detailed information that it can provide to the Governing Bodies. At the same time, this may have also reinforced an impression of fragmentation in the programme and in resource allocations. In requesting streamlining and simplification, the Council was calling on the Secretariat not only to reduce the volume of documentation, but to arrive at a programme structure and form of presentation that would allow both Members and the Secretariat to focus their attention on major priorities.
The prospect of formulating proposals that could significantly increase the Organization's capacity to meet the expectations placed upon it led the Director-General to request his senior colleagues to consult their staff and report frankly on management challenges and programme priorities for FAO in the future. Candid views were thus expressed, followed by presentation of priorities for each department. The Director-General's own reflections and the views of staff led to the conclusion that change was essential, and that what was needed was not to add and subtract on the margins, but rather to re-engineer the Organization, both its programmes and its management structure.
Another of the significant aspects of this internal reflection was the conclusion that while some gains have been achieved through implementation of new budget and financial management systems, and more will be attained as these are extended to cover human resources management, FAO needed to move beyond the technology aspects of efficiency gains and focus on broad-based business process transformation to eliminate redundant actions rather than merely streamline them. Programme and organizational restructuring would accelerate this transformation process and enable the Organization to address substantive challenges and opportunities more coherently. A final important aspect concerned the balance to be maintained between "normative" and "operational" activities, a somewhat artificial distinction on which differing views and perceptions had always existed within the Membership. A focus on FAO's core business as a knowledge organization would provide a much more logical paradigm within which to frame programmes in the future.
The Director-General therefore took the decision to present, to the Thirty-third Session of the FAO Conference, a coherent package of proposals for implementation beginning in 2006. Section V provides a summary description of the goals and shape of the reform, as contained in the supplement to the Programme of Work and Budget 2006-07 (C 2005/3 Sup.1) and the additional information (C 2005/3 Sup.1 Add.1) provided at the request of the Programme and Finance Committees following their sessions in September 2005.
In the period since August 2005, when the reform proposals were first announced, the Director-General has engaged in a process of information and consultation with FAO staff, both at headquarters and in regional and subregional offices, as well as with a sample of FAO Representatives (FAORs). This involved meetings with senior management and with the Programme and Policy Advisory Board (PPAB) comprising all department heads, division directors and heads of independent offices, with the participation of the staff associations. He also had a separate meeting with the representatives of the staff associations. He met with all headquarters professional and general service staff in a series of divisional meetings. Following the meetings of the Programme and Finance Committees, he consulted by teleconference with all regional and subregional offices. Finally, he has established and met with a number of interdepartmental working groups to examine and recommend detailed measures to implement the reforms.
The Director-General has taken into consideration the views expressed by the Programme and Finance Committees, the feedback from all of his meetings with staff, the Outcome Document of the 2005 World Summit and the suggestions of individual Member Nations and groups of Members, to amend the initial proposals presented in the Supplement to the Programme of Work and Budget 2006-07. These amendments are contained in the additional information submitted in C 2005/3 Sup.1 Add. 1. Thus, the Conference will have before it several choices, corresponding to scenarios representing "business as usual" and proposals for "a reformed FAO".
Further details on the consultations carried out by the Director-General are contained in Annex 2. Following meetings he has held with Members and groups of Members represented in Rome, which have taken place on a number of occasions since the process began, arrangements have been made to facilitate consultation among Members with the aim of achieving consensus on the proposals by the time of the Conference. As each of the documents has been issued, it has been placed on FAO's Web site and delivered to all Member Nations in their capitals, as well as to all Members' representatives in Rome, in accordance with established procedures. Personal delivery to Ministers has also been arranged in countries in which FAO has a representative.
As observed by the Programme and Finance Committees, the refinement of the proposals would need to be an integral part of an implementation plan to be prepared by the Secretariat after a budget level is approved by the Conference. In any case, the proposed reforms call for a well-planned and orchestrated adjustment process, aimed at ensuring that changes are introduced in a logical sequence and with minimum disruption to FAO's substantive work. The Director-General plans to establish a phased change management process to oversee the detailed planning and implementation of the reforms. The Human Resources Committee will review the functional statements for the major organizational units, currently being developed in line with the proposed new organization chart. Building on the Organization's past experience, transparency in the management of staff movements will be ensured through task forces on redeployment with the participation of staff representatives. They will play a crucial role in matching posts and expertise, a task that will be greatly facilitated by the number of posts already vacant and the mandatory retirements expected during 2005 and in the coming biennium.
Keeping in mind the social and human implications of the reform proposals, the Director-General on 3 August 2005 gave instructions to freeze recruitment of professional and general service staff with a view to having vacancies available to facilitate redeployment of existing staff when and where necessary. Consequently, on 1 October 2005 there were 144 vacancies at headquarters and 32 vacancies in decentralized offices in the professional and higher categories. For the general service, there were 65 vacant posts at headquarters and 68 in the decentralized offices. During the remainder of 2005 and in the course of the next biennium, there will be additional posts becoming vacant owing to the mandatory retirement of 74 staff members at headquarters and 50 staff members in decentralized offices, in the professional and higher categories. The mandatory retirements during the same period for the general service category of staff will result in 47 vacancies at headquarters and 31 in decentralized offices. Other possibilities for staff redeployments would arise from the temporary assistance pool at headquarters and as a result of voluntary departure or retirement of staff.
The vacancies in the professional and general service categories will result in opportunities for lateral transfers, which will be reviewed and discussed with the participation of staff representatives in the framework of the redeployment task forces. The decisions of the Governing Bodies on the restructuring at headquarters would begin immediately, taking into consideration the logistical constraints of the changes in the departments. The changes in the decentralized offices are expected to be implemented progressively, as negotiations are concluded with the host countries of the decentralized offices. Most staff would not move before July-August 2006 to take into consideration the scholastic calendar year of dependent children, rental leases and other issues of relevance to the individuals concerned. The redeployment task forces will, as in the past, also address cases of separations on agreed terms.
In the end, the decisions, not only on the reform but in particular on the level of the budget, rest with the Members. Section V describes the substance of the reform proposals, the implementation of which would be influenced by the level of budget ultimately agreed upon by the Conference.