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PROGRAMME, BUDGETARY, FINANCIAL AND ADMINISTRATIVE MATTERS

Summary Programme of Work, and Budget 1986-871 2 3

Introductory Statement by the Director-General

191. In his introductory statement, the Director-General had started with an assessment of the world economic and social situation. The preliminary signs of economic recovery and expansion in developed countries were counterbalanced by considerable uncertainty and social stresses due to persistently high unemployment. The recovery in industrialized countries had not yet led to acceptable rates of growth for developing economies; nor had it relieved the pressures of external economic forces. Developing countries continued to be exposed to the heavy burden of external debt; generally depressed demand and subdued prices for their export commodities, in particular agricultural commodities; the impact of protectionist measures; and declining development aid, especially on concessional terms. Many developing countries were in the unenviable situation of having to write off the prospect in the current decade of any improvement in the standard of living of their populations. The situation was particularly dramatic in sub-Saharan Africa.

192. This disquieting background had led the Director-General to give equal weight to two conflicting requirements. On the one hand, he could not remain insensitive to the ever increasing demands of member countries for the broad range of FAO's support and programme activities. On the other hand, he was convinced of the necessity to limit again the impact of his proposals on all member countries, in terms of financial contributions to the FAO budget, by the exercise of restraint, as exemplified in the Programme of Work and Budget for 1984-85. As a result, a further substantial boost to FAO's Technical and Economic Programmes was proposed, involving an increase in allocations of 3.8 percent, but because of transfer of resources from administrative support programmes, an overall nominal programme growth of only 1.4 percent would be required.

193. The Council commended this deliberate search for economies to finance needed programme growth, an approach which had characterized the Director-General's action over several biennia and had confirmed the proven record of the Organization in management, efficiency.

194. The Council expressed satisfaction that, within this overall approach, the Director-General had fully taken into account earlier guidance on strategies and priorities provided by FAO Governing Bodies, as well as the recommendations of the Regional Conferences and main Council Committees.

195. The Council welcomed the introductory presentation by the Director-General of the main factors which had influenced him in formulating the Summary Programme of Work and Budget for 1986-87.

Views of Programme and Finance Committees

196. The Council was appreciative of the statements of the Chairmen of the Programme and Finance Committees, covering the salient points of the deliberations of the two Committees which had reviewed in depth the Summary Programme of Work and Budget for 1986-87. They noted with satisfaction that the reports showed consensus on most if not all issues.

197. The Council agreed with both Committees in welcoming the further improvements in the format and presentation of the document, which were in full accordance with its intended purpose of apprising the Council of the main features of the Director-General's eventual Programme of Work and Budget proposals.

198. The Council supported their views that the proposals for 1986-87 were framed to respond to the highest priorities of the Organization and the felt needs of member countries, that they provided a satisfactory basis for consideration by the Council, and merited its full endorsement. 45

199. In particular, the Council agreed with the detailed review carried out by the Finance Committee of the methodology for calculating and presenting cost increases for 1986-87, which was in conformity with the practice previously approved by the FAO Conference and Council.

World Background

200. The Council generally concurred with the Director-General's assessment of the world economic situation and the main features of the world food and agricultural context.

201. It agreed in recognizing the many paradoxes of this situation: overall and localized progress, leading, for instance, to a record production and increase in global stocks of cereals in 1984, while many countries, particularly in Africa, continued to face the crippling effects of malnutrition and starvation; external assistance to development, particularly in the form of multilateral concessional funds, was being curtailed at a time, when however many countries were in dire need of maintaining existing productive capacities and of investing in essential infrastructures for which no commercial credit nor domestic resources were available; agricultural trade remained sluggish, despite relatively low international prices; unbalanced rural development resulted in the continued flight of rural migrants to cities, despite congested living conditions and dim prospects for employment; and environmental degradation in tropical areas was still fast outstripping corrective measures.

202. The Council fully shared the Director-General's renewed conviction that the root causes of these issues had to be addressed in a determined manner, beyond the necessary provision of short-term relief and rehabilitation assistance.

203. The Council stressed that FAO was uniquely placed in view of its constitutional mandate, its accumulated developmental experience, the confidence placed in it by its Member Nations, and its central role of being the world repository of information and source of policy advice on food and agricultural matters, to contribute to the solution of the many food and agricultural problems besetting the international community. The Council agreed that it was essential to preserve both FAO's technical capacity and operational effectiveness in responding to such multiple challenges.

Field Programme

204. The Council emphasized the inter-dependence of FAO's Regular Programme and field activities. It reiterated its deep concern at the downward trend of FAO field programme delivery under UNDP funds.

205. It stressed the importance of every measure being taken by all partners in development, including by governments themselves, to redress the falling share of food and agriculture projects in technical assistance country programmes financed by UNDP.

206. The Council recalled that FAO field activities were particularly instrumental in the provision of critical agricultural inputs to small farmers. It emphasized that the absence or inadequacy of assured supplies of such inputs would preclude any possibility of generating the needed production in rural areas of developing countries to feed rapidly expanding non-agricultural populations.

207. The Council expressed, in this connection, its gratitude to those Member Nations whose generous contributions, mostly for the benefit of drought-affected countries in Africa, had served to offset the detrimental impact of reduced extra-budgetary funding from other sources. It expressed the hope that such a laudable example would soon be followed by other Trust Fund donors.

Strategies, Priorities and Means of Action

208. The Council endorsed the strategies and priorities as well as the means of action proposed by the Director-General for 1986-87. It agreed that they faithfully reflected the guidance of the FAO Conference, Council and the recommendations of subsidiary committees such as COAG, COFI and COFO and of the FAO Regional Conferences. They moreover took into account the recommendations formulated on the occasion of global events such as the World Fisheries Conference, and of deliberations in other intergovernmental fora of the UN System.

209. The Council recommended, in this connection, that FAO forestry activities in 1986-87 and in future incorporate the results of the World Forestry Congress, to be held in Mexico City in early July 1985. It took note with satisfaction that sufficient flexibility had been built into the 1986-87 proposals to accommodate some changes in that respect.

210. The Council considered that the four principal aims which had guided priority selection by the Director-General, namely, increase of food production; enhancement of food security; improvement of impact at field level; and promotion of ECDC and TCDC, reflected the most judicious synthesis of member countries' requirements within the domain of competence of the Organization. It agreed that the policy of decentralization, actively pursued by the Director-General through the Regional Offices and the network of FAO representations, contributed to enabling the Organization to achieve those four principal aims. This applied particularly to ensuring greater impact of FAO's programme activities at field level. FAORs and Regional Offices were also ideally placed to provide firsthand information and ensure close and direct contacts with governments in promoting inter-country support for Economic and Technical Cooperation between Developing Countries.

211. The Council fully endorsed the overall emphasis on Africa, in order to meet the special, urgent and multiple requirements of that region. It noted, however, that while a great part of the net increase and of specific activities proposed under FAO Technical and Economic Programmes was indeed for the benefit of Africa, adequate attention would be paid to requirements and programmes in other regions.

212. The Council reiterated the importance of further progress in Economic Cooperation between Developing Countries and Technical Cooperation between Developing Countries, particularly at a time of uncertain world economic and financial instability and given the uncertain pace of the North-South dialogue. It welcomed the fact that several practical activities were planned in support of ECDC and TCDC in the. forthcoming biennium which would reinforce member countries' own initiatives in these areas.

213. The Council supported the overall emphasis on training. In furtherance of well-established practice, components of training in all FAO disciplines were an integral part of all programme activities, ranging from land and water conservation to agricultural planning, research management and fisheries statistics. The Council emphasized in this connection that the building up of a core of adequately trained manpower resources was an important foundation for development. It considered that FAO was uniquely placed to achieve quick, practical and lasting results in all developing regions.

214. The Council reiterated its general support to the Technical Cooperation Programme (TCP) which had become an intrinsic part of FAO developmental action. It welcomed the fact that a report on the findings of a comprehensive and independent evaluation of TCP would be submitted to its next session. In the view of the recipients of TCP assistance,

this study could only confirm what they themselves had been able to appreciate in terms of TCP's responsiveness to urgent requirements, timeliness in delivery and the multiplier-catalytic value of TCP inputs provided at critical stages of national and regional agricultural and rural development efforts. For recipient countries, higher increase in resources for TCP would have been fully justified in view of the aforementioned reasons and of the number of firm requests which could not be satisfied.

215. Some countries expressed concern about unexpended balances in TCP and the proposed increased for TCP resources in 1986-87. In this connection, the Secretariat drew the Council's attention to the reasons for the carryover of unobligated funds from one biennium to another and reported on the Status of utilization of the TCP appropriation.

216. The Council considered that the proposed consolidation of FAO data bases and the planned facilitation of user access to such information, constituted a timely development. It gave evidence that the Organization intended to keep abreast of, and put to practical use, advanced communications technologies to maximize the value of this accumulated information. The Council suggested further strengthening of information dissemination. In particular, a suggestion was made that FAO should join the ICC (International Computer Centre) in order to participate in its expanding network for electronic mail.

217. A few members in addressing the biennial strategies, priorities and means of- action, suggested that there be an intensification of member government's discussions on the longer-term role and activities of FAO so that the limited resources could be used for the maximum benefit of all Member Nations, and in particular the developing countries.

Programme Activities

218. The Council endorsed the proposed activities, as described in the Annex to the Summary Programme of Work and Budget. It noted with satisfaction that comprehensive information had been provided on the net programme changes at sub-programme level, as well as on the shifts of resources effected between and within sub-programmes, to facilitate consideration of the proposals. In the discussion, references were made to a number of specific programme areas.

219. In particular, the Council fully supported the proposed strengthening of the Global Information and Early Warning System (Sub-programme 2.1.7.3) towards its even greater accuracy, wider coverage and increased timeliness. The contribution of the System to alerting the international community to impending large-scale food emergencies in sub-Saharan Africa since early 1983 had demonstrated its irreplaceable role of placing under constant watch the multiple indicators of crop failures and food shortages, and of enabling both affected countries and the international assistance community to take prompt remedial action.

220. The Council recognized the continued central character of FAO's crops and livestock programmes in assisting developing countries to increase domestic food production. It fully supported the proposed net increase of resources and broadened scope under these two programmes, particularly under the former, to strengthen activities related to seeds and plant genetic resources. Some members suggested that greater priority be given to the conservation and rehabilitation of land and other natural resources and for the development of alternatives to chemical fertilizers and pesticides.

221. The Council noted with satisfaction the continued attention given to food security, as demonstrated by the proposed activities in follow-up of the recommendations of the Committee on World Food Security at its last sessions within the context of the broadened concept of world food security. It stressed that food security concerns should address in a comprehensive manner products other than cereals, such as edible oils and fats as well as secondary crops of importance, both actual or potential, to many local diets.

222. The Council was pleased to note that it was proposed, in pursuance of its earlier recommendations, that both Major Programme 2.2 (Fisheries) and 2.3 (Forestry) should receive substantial net programme increases. These changes were moreover considered well-timed and fully justified responses to the successful conclusion of the World Fisheries Conference, and to the two major international events concerning forestry in 1985, i.e. the International Year of the Forest, which the Council itself had proclaimed at its last session, and the World Forestry Congress. These were events which were likely to influence FAO's forestry activities over the medium-term.

223. The Council endorsed the continuing emphasis placed on the special requirements of small farmers and of women as agricultural producers, which cut across several programme areas. It recommended that adequate attention also be placed on rural youth, in order to discourage migration from rural to urban areas through such measures as the provision of gainful employment.

224. The Council noted that, as usual, the full Programme of Work and Budget would contain more detailed information on medium-term objectives, proposed activities and planned outputs, programme changes, regional focus and extra-budgetary programmes, to enable a more thorough appraisal by member governments of proposals for 1986-87. Together with the two Reviews of the Regular Programme and Field Programmes, this set of documents was likely to meet the information requirements of member countries.

Financial Framework

225. With regard to the impact of the proposals on the distribution by various objects of expenditure, the Council noted with satisfaction that the percentage of expenditure on established posts had been further reduced to 54 percent from over 77 percent in 1974–75 The Council noted that the proposed net addition of nine posts had been the result of a thorough examination of a much greater number of proposals and had been carefully analysed and fully endorsed by the Programme Committee. Those retained corresponded to areas where the Organization required a sufficient critical mass of resident expertise to implement programmes effectively and efficiently. The Council appreciated the intention of outpostlng some of the new posts to various field locations for maximum local impact.

226. The Council noted with satisfaction that the provision for cost increases in 1986-87 had been pruned systematically to provide for the most realistic estimate. The 1984-85 budget included a provision for cost increases of some US$52 million. The provision for 1986-87, even on the basis of the same U.S. dollar/lira exchange rate of 1 615, had been reduced by more than half to US$24 million. The Council felt that this conservative estimate of cost increases was a further evidence of prudent management and reflected attention to economy, efficiency and effectiveness. The Council generally endorsed the Finance Committee's acceptance of the proposed cost increases.

227. Moreover, the Council was informed that, on the basis of a continuation of current exchange rates in the range of approximately 2 000 lire to one US dollar, and given the prospects for Miscellaneous Income, eventual contributions from Member Nations in 1986–87 could result in being the same or less in dollar U.S. terms than for the current biennium. Further information would, as usual, be provided in the final version of the Director-General's Programme of Work and Budget. In this connection, it was recognized that for many member countries, contributions in terms of national currencies could involve substantial increases.

Real Growth

228. The great majority of members of the Council considered that the proposed programme growth of 1.4 percent was manifestly insufficient in relation to the magnitude of requirements for FAO assistance. The food and agricultural crisis in Africa presented the most eloquent case for such requirements. They considered that the increase proposed was symbolic and tantamount to zero-programme growth, reducing the Organization to a stagnation which could not meet the requirements of the situation. In this connection, they took exception to the advocacy by some member governments of zero-programme growth for the budgets of all organizations in the UN System, irrespective of the relevanc of uch organizations to widely recognized objectives of the international community, of the individual records of effectiveness in programme delivery and management efficiency and of general trends of economic recovery in the developed world. They noted, moreover, that the indiscriminate overall application of zero-programme growth was not an instrument of budgetary policy domestically in any country, as ministerial allocations had to vary to reflect various national priorities. They sincerely hoped that a consensus would be reached on the full Programme of Work and Budget to be submitted to the Twenty-third Session of the FAO Conference, as the most encouraging mark of support to the Organization, at the auspicious time of the celebration of its Fortieth Anniversary.

229. Some members, on the other hand, expressed the view that, the pragmatic application of the principle of zero-programme growth for budgets in the UN System was upheld by their governments as a reflection of domestic restraint in public expenditures at home, concern to achieve value for money in international organizations and to maintain domestic support for multilateral cooperation. They urged the Director-General in formulating his final proposals to continue to pursue opportunities for reallocating resources, in particular, by reducing administrative and support costs to produce final proposals to achieve zero-net programme growth in real terms. 6789

230. A few other members expressed the view that, while their governments generally supported the concept of zero-programme growth for multilateral organizations in view of tight national budgetary situations, they were prepared to demonstrate the necessary flexibility and to have due regard to the scope and programme impact of individual institutions. While for the time being not committing themselves fully to the proposed increase, they indicated their intention of taking their final decision in the light of more detailed information to be provided in the full Programme of Work and Budget.

231. Notwithstanding differing views on the proposed real programme growth, the Council expressed unanimous appreciation for the way the Director-General had approached the difficult challenge of reconciling so many conflicting requirements. It fully commended the substantial transfer of resources from administrative and support services to FAO's technical and economic programmes and the shifts made from low to higher priority activities, as evidenced in the proposals. It agreed that such budgetary transfers from administration to substantive programmes could not be pursued indefinitely; lest it impair FAO's capacity to deliver its approved programmes efficiently.

Conclusion

232. The Council approved the strategies, priorities, programmes and, in general,the related budgetary estimates proposed in the Summary Programme of Work and Budget, and requested the Director-General to prepare the full Programme of Work and Budget for 1986-87 on the basis of the Summary proposals and, insofar as possible, on the discussion in the Council. It expressed the hope that a full consensus could be reached at the time of the Conference vote on budgetary appropriations for 1986–87.

Budgetary Matters

Budgetary Performance 1984 10

233. The Council took note of the Director-General's Annual Report on Budgetary Performance to Member Nations as attached to the Report of the Fifty-fifth Session of the Finance Committee.

Programme and Budgetary Transfers11

234. The Council took note of the within-chapter transfer of US$56 000 from Programme 2.1.9: Programme Management to Programme 2.1.4: Research and Technology, effected in accordance with Financial Regulation IV, para. 4.5(a).

235. The Council also noted with satisfaction the transfer authorized by the Finance Committee under Financial Regulation IV, para. 4.5(b)(i), of an amount of up to US$15 million, to Chapter 4: Technical Cooperation Programme, from other budgetary chapters, to support small-scale, quick action projects for the rehabilitation of agriculture in Africa. The programme aspects of this transfer had also been considered by the Programme Committee before the Finance Committee had taken its decision. The Council commended the initiative of the Director-General in organizing the formulation of a set of projects which were endorsed by the Governments of the affected countries and were suitable for immediate implementation in whole or in part. In view of the savings expected to be realized during the current biennium, the Council welcomed the action of the Finance Committee, which represented a tangible way for the Organization to extend its support for the rehabilitation of agriculture in Africa. Some members suggested that at its next session the Finance Committee review progress in implementation and consider if a waiver of the limitation of US$250 000 for each TCP project was required in respect of this transfer in order to ensure full and speedy implementation.

Financial Matters

Financial Position of the Organization - Contribution Matters 12

(a) Status of Contributions to the Budget

236. The Council noted the status of contributions at 24 June 1985, compared to the same date in 1984, as follows, as well as the details of receipts in 1985 and outstanding contributions of all Member Nations as shown in Appendix E to this report.

1985a (For comparison)
1984 a
$ $
Amounts outstanding at 1 January
Current assessments 197 940 000.00 b 197 940 000.00 b
Contributions in arrears
29 160 039.05 19 286 724.23
Total 227 100 039.05 217 226 724.23
Receipts 1 January to 24 June
Current assessments 99 970 775.14 102 724 784.63
Contributions in arrears 15 320 465.23 2 400 872.37
Total 115 291 240.37 cd 105 125 657.00
Amounts outstanding at 24 June
Current assessments 97 969 224.86 d 95 215 215.37
Contributions in arrears 13 839 573.82 d 16 885 851.86
Total 111 808 798.68 d 112 101 067.23

a Contributions in arrears include arrears payable under Conference authorizations by instalments due in 1985 (in 1984 in comparative figures) and in future years (on 1 January 1985, $24 119.59 due in 1985 and $113 998.72 due in future years).

b Of which $650 000.00 relates to the Tax Equalization Fund.

c Receipts include release on 1 January 1985 of cash surplus of 1982-1983 biennium: $41 005 487.08 applied to current assessments (20.72 percent) and $5 010 524.74 to arrears; details are set out in Appendix F.

d Appendix E sets out details of receipts during 1985 and of outstanding contributions of all Member Nations; figures exclude receipts of US$1 760 000 from Iran and US$19 819 from Burundi, the effect of which is reflected in paragraph (d).

(b) Current Assessments (Appendix E sets out details of all Member Nations' positions)

237. The position at 24 June 1985 of the 1985 assessments of Member Nations (as well as the number with arrears outstanding), with comparative figures at the same date during the previous four years, were as follows:

Member of Member Nations
Current Assessments Arrears
% Received Paid in full Part paid No payment Total
1985 a 50.51 47 23 86 156 52
1984 51.90 48 31 77 156 58
1983 b 47.23 45 21 86 152 54
1982 30.78 47 31 74 152 41
1981 c 39.47 53 32 62 147 35

a To facilitate comparisons, applications of the cash surplus (20.72 percent) to the current assessments of 84 Member Nations are excluded from the Numbers of Member Nations.

b To facilitate comparisons, applications of the cash surplus (0.19 percent) to the current assessments of 54 Member Nations are excluded from the Numbers of Member Nations.

c To facilitate comparisons, applications of the cash surplus (1.65 percent) to the current assessments of 91 Member Nations are excluded from the Numbers of Member Nations.

238. The month-end cumulative percentages of 1985 assessments received during the first five months of 1985, as compared to receipts during the previous four years, were as follows:

Percentages of Current Assessments Received
(Cumulative - year to date)

1985 d 1984 1983 e 1982 1981 f
% % % %
January 24.69 6.28 4.63 2.48 7.43
February 28.25 8.73 18.81 14.02 16.03
March 30.95 14.21 26.52 16.88 22.72
April 37.31 27.09 32.74 27.82 33.88
May 47.89 30.92 45.58 28.28 38.37
June 51.90 48.07 32.69 40.08
July 55.42 51.87 40.55 46.72
August 57.44 53.06 43.62 54.79
September 60.66 55.33 49.46 59.35
October 86.34 75.17 56.17 72.34
November 91.44 89.09 79.95 87.35
December 92.60 93.81 90.52 91.25

d Includes $41 005 487 (20.72 percent of 1985 assessments) as distribution of the cash surplus of the 1982-83 blennium applied as of 1 January 1985.

e Includes $345 595.00 (0.19 percent of 1983 assessments) as distribution of the cash surplus of the 1980-81 biennium applied as of 1 January 1983.

f Includes $2 269 696.22 (1.65 percent of 1981 assessments) as distribution of the cash surplus of the 1978-79 blennium applied as of 1 January 1981.

239. The Council was informed that to date in 1985 the rate of cash receipts applied against Member Nations' current assessments was 29.79 percent (excluding the 1982-83 biennium cash surplus distribution of US$41 005 487, 20.72 percent of 1985 assessments), which was the lowest in many years. The Financial Regulations, however, required that all Member Nations should pay their assessments in full at the latest by the end of February each year. 109 Member Nations had not yet fulfilled this obligation of membership in the Organization. Several of the most important contributors, some of which had paid their contributions in full within June 1984, had made no cash payment to date during 1985. Several other major contributors had remitted less than half of their 1985 assessment.

(c) Contributions in Arrears (Appendix E sets out details of Member Nations' arrears outstanding)

240. The Council was pleased to observe that arrears outstanding had improved notably during 1985, both as a result of the application of part of the cash surplus (US$5 010 524) to the arrears of 76 Member Nations, and of significant payments by several important contributors which had had major amounts outstanding. The Council agreed, however, with the Finance Committee that, notwithstanding this improvement, the position could not be considered satisfactory, since 52 Member Nations continued to have arrears totalling US$13 839 573.82 outstanding.

241. The Council appealed to all Member Nations with outstanding contributions, and particularly to those which were in arrears, to remit the amounts due as soon as possible.

(d) Voting Right Problems

242. The Council noted with special concern that 10 Member Nations (Gambia, Guinea-Bissau, Guyana, Liberia, Mauritania, Niger, Peru, Romania, Sierra Leone and Togo) were in danger of losing their right to vote at the coming Session of the Conference in accordance with Article III.4 of the Constitution, which provided as follows:

"Each Member Nation shall have only one vote. A Member Nation which is in arrears in the payment of its financial contributions to the Organization shall have no vote in the Conference if the amount of its arrears equals or exceeds the amount of the contributions due from it for the two preceding calendar years. The Conference may, nevertheless, permit such a Member Nation to vote if it is satisfied that the failure to pay is due to conditions beyond the control of the Member Nation."

243. In addition, under the above Article five Member Nations (Central African Republic, Chad, Comoros, Democratic Kampuchea and Paraguay) did not qualify for voting rights, nor had they met their commitments under Conference authorizations permitting them to pay their arrears of contributions in annual instalments.

244. Noting that the Director-General had informed the Member Nations of the problem and had urged them to regularize their positions as soon as possible, the Council made a special appeal to these 15 Member Nations to pay the amounts outstanding without further delay so as to ensure their right to vote at the Conference, and it requested them to inform the Organization of the reasons for non-payment to date.

(e) Applications for Membership in the Organization

245. The Council was informed that applications for membership had been received from Cook Islands and from Solomon Islands, to be considered by the next Session of the Conference. Both Nations would have an assessment rate in FAO at the minimum of 0.01 percent. In accordance with the applicable provisions of the Basic Texts, as well as with past practice, each Nation would be called upon by the Conference, at the time of admission, to contribute an amount of US$4 950, relating to the last quarter of 1985, and to advance US$1 325 to the Working Capital Fund.

(f) Status of Advances to the Working Capital Fund

246. The Council noted that, following the application of US$177 193 from the cash surplus, only US$2 650 was due to the Fund at this juncture; details were set out in Appendix E.

(g) Delayed Payment of Assessed Contributions

247. The Council was informed that the Finance Committee at its Fifty-fifth Session had initiated its review of possible solutions to the long-term problem of late payment of contributions and arrears. The Council recognized that the problem was a particularly difficult one, for which no adequate solution had been found by any of the major Organizations in the UN System, but considered that it was especially important for FAO at this juncture. As a consequence, the Council confirmed that the Finance Committee should continue its deliberations on the matter at its next session, with a view to the possibility of allocating any cash surplus in the future on a more equitable and a more rational basis.

Scale of Contributions 1986-87 13

248. The Council reviewed the comments of the Finance Committee concerning the FAO Scale of Contributions for 1986-87. It noted that the resolution of the Eighth Session of the Conference (November 1955) had established that the FAO Scale of Contributions should be derived directly from the United Nations Scale of Assessments; but that the FAO Scale should be derived from the UN Scale in force during the calendar year of the FAO Conference Session. It recalled, however, that in the past when the new UN Scale incorporated significant changes, it had been used with effect from the year after the FAO Conference. In this connection, the Council was informed that a new UN Scale for 1986/88 was being prepared for consideration by the United Nations in the fall, but that there was no assurance that the UN General Assembly would have adopted a new Scale before the FAO Conference Session had ended. (The UN General Assembly had adopted its 1983/85 Scale only on 17 December 1982 and it was felt probable that its decision could again be late in the session).

249. The Council considered the view expressed by the Finance Committee that, in order to ensure that the Organization would have an approved Scale for the calling of contributions for 1986-87, the Council should at this time recommend to the Conference the adoption of a Scale derived from the current UN Scale. This would result in the 1986-87 FAO Scale being the same as the 1984-85 FAO Scale, subject to changes which would occur as a result of the admission of any new members.

250. Several members opposed the use of the UN Scale as a basis for the FAO Scale, since they considered inappropriate the criteria on which the UN Committee on Contributions had developed the 1983/85 UN Scale. As a consequence, they suggested that FAO should derive its 1986-87 Scale from the new UN Scale.

251. Other members expressed support for recommending to the Conference an FAO Scale for 1986-87 derived from the current UN Scale, citing the necessity for the Organization to have a known Scale adopted by the Conference, and noting that there was no assurance that the UN General Assembly would have adopted a new Scale before the FAO Conference Session had ended.

252. As a consequence, the Council recommended the following draft Resolution for adoption by the Conference:

DRAFT RESOLUTION FOR THE CONFERENCE
SCALE OF CONTRIBUTIONS 1986-87

THE CONFERENCE,

Having noted, the recommendations of the Eighty-seventh Session of the Council,

Confirming that as in the past FAO should follow the United Scale of Assessment subject to adaptation for the different membership of FAO:

1. Decides that the FAO Scale of Contributions for 1986-87 should be derived directly from the United Nations Scale of Assessments in force in 1985;

2. Adopts for use in 1986 and 1987 the Scale as set out in Appendix... of this report.

Preparation of WFP Final Accounts 1984-8514

253. The Council noted the comments of the Finance Committee concerning the preparation of WFP Final Accounts for 1984-85.

Reimbursement of Travel Expenses of Council Members

254. Questions were raised about the Organization's practice regarding the reimbursement of travel expenses of the representatives of Member Nations of the Council, as provided for under Rule XXV-6 of the General Rules of the Organization. The Council was informed that under this Rule, provision was made for the representative's travel from his/her capital city or duty station, whichever was the less, to the site of the Council's session.

255. The Council noted with concern that Rule XXV-6 GRO apparently precluded the reimbursement of the travel expenses of any member of a delegation attending the Council when a Permanent Representative to the Organization residing in Rome was designated as the representative to the Council. The Council requested the Director-General to examine this situation, and to refer the matter to the Committee on Constitutional and Legal Matters (CCLM) to determine whether Rule XXV-6 GRO may be interpreted to allow reimbursement to any one member of a delegation for travel to the Council. If not, the CCLM should prepare appropriate revisions to that Rule to permit reimbursement to any one member of a delegation for travel to the Council. The matter should also de referred to the Finance Committee for- its consideration. These Committees' conclusions could then be reviewed at the Eighty-eighth Session of the Council and, if necessary, by the Twenty-third Session of the Conference.

Reports of the Forty-eighth Session of the Programme Committee and the
Fifty-fifth Session of the Finance Committee
(Rome, 6-16 May 1985)

Personnel Matters15

256. The Council noted the relevant paragraphs of the Finance Committee report dealing with personnel matters and adopted them.

Relations with the Host Government16

Headquarters Accommodation

257. The Council was informed of developments which had taken place since its previous session, at which Resolution 3/86 had been adopted welcoming the interest shown by the highest authorities of the Host Government in the latest proposals of the Director- General, and urging the Government to implement the new construction project in the Caracalla complex as urgently as possible.

258. The Council noted that the Presidency of the Council of Ministers had continued its coordinating action through regular inter-ministerial meetings held at the Presidency, with the participation of representatives of the Organization. At a meeting held on 3 May 1985, the construction project was approved in principle.

259. The Council was however informed that there were several legal, administrative and financial issues still to be resolved before construction work could be initiated.

260. As regards the construction of 70 rooms on the eighth floor of Building D, the Council was informed that masonry works were in progress, and that the two remaining contracts (one for electrical installations and telephone wiring and the other for plumbing/heating/air conditioning) were expected to be awarded soon. At the current rate of progress, it was expected that these rooms could be ready for occupancy by the end of September 1986, barring further delays.

261. The representative of the Host Government informed the Council that with the latest decisions taken by the Government, the FAO Headquarters Accomodation problem might now be well on the way to being solved. Time was however required to complete the normal procedures for securing the necessary funds before construction work could be initiated.

262. The Council expressed its satisfaction with the positive steps taken by the Host Government, paying tribute to the Permanent Representative for his personal efforts in arriving at the latest decisions. At the same time the Council emphasize that all efforts should continue to be urgently pursued by all concerned with a view to achieving the realization of the project as early as possible.

Negotiations regarding the interpretation and application of the Headquarters Agreement 17

263. The Council noted the Report of the Fifty-fifth Session of the Finance Committee. It was informed that the negotiations with the Host Government had not yet been concluded and that agreement had not been reached on the two major issues outstanding, namely duty-free privileges of staff of Italian nationality, and the number of staff in the first category to enjoy full diplomatic privileges and immunities. The situation regarding import licences for the Commissary was very precarious and unless the latest requests for duty-free import licences were approved speedily, stocks would be exhausted by the end of July 1985.

264. The Council again noted the consequences of any withdrawal or reduction in privileges to staff of Italian nationality, namely substantial extra costs in the form of upward adjustments of staff remuneration which would fall on all member governments, and the reintroduction of discrimination between staff of the same category and grade on grounds of nationality.

265. The Representative of the Host Government explained that the decision to withdraw duty-free privileges to staff of Italian nationality was in line with practice in other countries and the provisions of the Vienna Convention on Privileges and Immunities.

266. In line with Resolution 4/86 which it had unanimously adopted at its previous session, the Council again expressed concern with the present situation and urged both parties to arrive at an early conclusion of the negotiations (which had entered their eleventh year)

Import Licences18

267. The Council noted the Report of the Fifty-fifth Session of the Finance Committee on the question of import licnces for official equipment and materials.

268. The Council noted with satisfaction that the situation had considerably improved, since the Ministry of Finance had taken adequate measures to ensure the regular issue of duty-free import licences for all equipment and materials for official use.

269. The Council appreciated the continued support and assistance of the Representative of the Host Government in solving this very serious problem and expressed the hope that such difficulties would not arise again In future.


1 CL 87/3; CL 87/4, paras. 1.1-1.7, 2.7-2.178 and 3.4-3.28; CL 87/PV/9; CL 87/PV/10; CL 87/PV/ll; CL 87/PV/12; CL 87/PV/19.

2 The delegation of Australia reserved its position on this section of the Report because it inadequately reflected minority views expressed in the Plenary. In particular, it did not give adequate expression to the following Australian suggestion: "Inresponse to the Director-General's agreement to provide additional information one member requested an information paper for the Conference outlining some options for the work programme under the zero real growth constraint."

3 The delegations of Colombia and Cuba expressed the opinion that the aforementioned reservation was unacceptable.

4 The delegation of the United Kingdom recorded that its association with the endorsement of the proposals for 1986-87 was subject to a reservation on Its position for the budgetary level for the blennium.

5 The delegations of Colombia and Cuba expressed the opinion that the aforementioned reservation was unacceptable.

6 The delegations of Canada, Japan and the United Kingdom reserved their position because it inadequately reflected minority views expressed in the Council and because these delegations were denied an opportunity to express fully their views on this paragraph by a decision of the majority to terminate the discussion before consideration had been completed.

7 The delegation of the United States of America reserved its position because of the abrupt closure of debate on the paragraph. In taking this action the Council denied some members their rights to be heard and to have their views reflected in the report of the Council, even though they be minority views. The action was especially lamentable because substantial agreement had been obtained on revised wording. This use of closure was an unacceptable and highly inappropriate departure from customary procedures.

8 The delegation of the Federal Republic of Germany reserved its position on this paragraph because the procedure followed for its adoption did not allow its position to be reflected adequately.

9 The delegations of Colombia and Cuba expressed the opinion that the aforementioned reservations were unacceptable.

10 CL 87/4, paras. 3.45-3.49 and Appendix A; CL 87/PV/12; CL 87/PV/19.

11 CL 87/4, paras. 1.8-1.11, 2.192-2.203 and 3.29-3.44; CL 87/PV/12; CL 87/PV/19.

12 CL 87/4, paras. 3.61-3.79; CL 87/LIM/l; CL 87/PV/12; CL 87/PV/19.

13 CL 87/4, paras. 3.80-3.83; CL 87/PV/12; CL 87/PV/19.

14 CL 87/4, paras. 3.126-3.129; CL 87/PV/13; CL 87/PV/19.

15 CL 87/4 paras. 3.88-3.99 and Appendixes C and D; CL 87/PV/13; CL 87/PV/19.

16 CL 87/PV/17; CL 87/PV/19.

17 CL 87/4, paras. 3.110-3.112; CL 87/PV/19.

18 CL 87/4, paras. 3.113-3.117; CL 87/PV/19.

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