CHAIRMAN: I call’ the meeting to order and declare open the 12th meeting of Commission II. We shall debate this morning the subject of Support Costs, Agenda Item 12.2 as contained Document C 81/INF/16.
The subject for debate today is closely related to the UNDP, as was the subject yesterday in the Review of Field Programmes. Tomorrow we shall have another subject on Recent Developments in the UN System of Interest to FAO where the relationship to UNDP may come up again. Yesterday it came out very clearly, and many delegates pronounced themselves very plainly that they were concerned about the diminishing resources from UNDP and about the consequences that may result from that fact.
I think this general awareness and concern may invite the assembly here, Commission II, to consider even fixing in the text of the report that goes to the Conference an appeal to UNDP. After all, it is not only a concern, we have to draw a conclusion out of this concern. One of these conclusions might be a clear cut appeal addressed by the Director-General to UNDP not to reduce the resources for agriculture and technical assistance projects operated and executed by FAO.
With these suggestions I would now like to turn to the subject this morning and invite Mr. West to give us an Introduction.
E.M. WEST (Assistant Director General, Office of Programme, Budget and Evaluation): As the Chairman said, the document before the Commission is C 81/INF/16 which is intended to provide the basis for your decision on this matter. As you well know, the subject of support costs has been debated time and again over practically a generation and it will no doubt be debated again in the future. But the point we have reached now is that we have been asked by the Governing Council of the UNDP to consider a solution which it is hoped will last for ten years at least.
The decision to which I refer is not yet your decision but the decision of the Governing Council of the UNDP taken in 1980. The text of that decision is set out in Annex I of the INF document. This resolution was subsequently endorsed by the General Assembly at the end of 1980 as regards the United Nations which is a major executor of UNDP Programmes, not as large as FAO but still fairly large. It has also been endorsed by the governing bodies of other organizations which are executors of UNDP projects. But this FAO Conference is the first occasion on which it has been able to consider the UNDP decision and to say whether or not it endorses it.
The Governing Council decision was discussed at the 78th session of the FAO Council in November 1980 on the basis of document CL 78/28. The views of the Council were somewhat divided, as explained in paragraph 4 of the INF document. The majority agreed, however, that if this Conference decided to accept a flat rate of 13 per cent reimbursement for the future for UNDP projects, the Director-General should make the necessary provision for support costs, over and above that amount in the sub-programme provisions of the Regular Programme. This was done within the budget which you discussed a few days ago.
The majority of the Council in November 1980 also considered that the current provisions for reimbursement of support costs of FAO Trust Fund Projects should be maintained as at present established in Chapter II, Section 250 of the FAO Manual which is reproduced in Annex II of the information document. Since the Council expressed those views in November 1980 there have been a number of important developments, As indicated in paragraph 7 of the INF document the most important development is the problem of resources which are going to be available to the UNDP in the Third Planning Cycle, 1982-86.
The point which arises here is that whereas before paragraph 2(c) of the Governing Council decision, which you find in Annex I, would not have been likely to have come into operation, it is possible that within the next year or two, it might do so to some extent. But this depends on developments with the totality of the UNDP Programme.
On the other hand, if we do have to separate a lot of personnel and make other project adjustments in the next couple of years, then the logistic support which has to be provided will inevitably increase. The net effect of this cannot be estimated either, but it can only be assumed that support costs will continue to exceed the 14 per cent level and indeed, a fortiori, the 13 per cent level.
There have also been developments as regards trust funds since, as indicated in the INF document, several trust fund donors have declared in no uncertain terms their unwillingness to provide more than 13 per cent reimbursement on trust funds as from 1 January 1982, which is nearly here. If that is to be applied, it will in fact involve the amendment of paragraph 4(a) of the Manual section which you find in Annex II.
In the past discussions in New York and here in Rome, it was indicated by some trust fund donors that they would prefer to provide 13 per cent as a flat rate reimbursement on trust funds and no longer take advantage of sections 4(b) to (g) of the Manual Section. Other trust fund donors have however indicated very strongly in recent discussions that while they wish 13 per cent to remain the maximum rate of reimbursement on trust funds, they still wish to take advantage whenever appropriate of the flexibility provisions in sections 4(b) to (g) under which the rate might be 7 per cent or 5 per cent or zero in certain cases. This is why in the light of these developments we have suggested that there are four main options for your decision. There are, of course, variations that could be devised but it seems that these are the four main options. They are spelt out in paragraph 11 of the document.
The Director-General invites the Conference now to take its decision but bearing in mind two things. One is that we obviously have no desire in present circumstances to make the situation of the UNDP more difficult. In any case, it would scarcely seem practicable for FAO to refuse to accept a decision which has now been accepted by everybody else; it would lead to a deadlock the resolution of which is difficult to foresee. The second thing we would like to have borne in mind is that the flexibility provision in the Trust Fund is one of the bases upon which we have been able to attract trust funds for a variety of purposes ranging from emergency operations to purchase of fertilizers on behalf of a Government, to purchases of equipment in certain projects which constitute a high proportion to the total project and for activities which are in effect additions to or substitutions for Regular Programme activities, thus keeping down the Regular Programme Budget; because if the activities can be funded under Trust Funds, we do not have to try and cover them from the Regular Programme. These are important factors in influencing the donation of Trust Funds to FAO by Trust Fund donors. Naturally we do not wish to do anything which would discourage that, particularly when special action programmes are so short of funds and the prospects of funds from other sources are fairly grim.
J.P, WARNIMONT (Belgique): Le point 12.2 relatif aux frais de soutien a retenu toute l’attention de ma délégation. En effet ce point revêt une importance toute particulière pour la Belgique, eu égard au fait que mon pays figure parmi les principaux contributeurs aux programmes extra-budgétaires de l’Organisation.
Je voudrais par ailleurs saisir une fois encore cette occasion pour souligner la valeur de tous ces programmes. Malgré la sympathie que les représentants permanents peuvent ressentir personnellement pour la position exprimée par le Directeur général, la décision prise par le PNUD ayant été ratifiée par l’ensemble des membres du Conseil des gouverneurs du PNUD ne semble pas pouvoir être remise en cause. En consequence ma délégation appuie la proposition figurant au point iv) du paragraphe 11 du document C 81/INF/16. Lors du soixante-dix-huitième Conseil, ma délégation avait insisté pour que la différence entre les 14 et 13 pour cent de soutien ne soient en aucun cas reportée à la charge du budget ordinaire de la FAO. Eu égard à la difficulté d’apprécier la charge que représentent les frais de soutien dans chaque cas particulier, ma délégation ne peut que confirmer cette position.
M. TRKULJA (Yugoslavia): It is most likely fifty times that my delegation has dealt with the same issue, so I can do it in a sort of roll-call fashion. Our option - the one that we should certainly prefer - is for (iii) in paragraph 11, but we would not be very unhappy if the majority opted for (iv).
S. HEIDSMA (Netherlands): My delegation has not had the opportunity to speak on this subject during the Council meeting, so I hope you will permit me, Mr. Chairman, to dwell somewhat at length on this subject.
We have never exactly calculated the position of the Netherlands as a trust fund donor to FAO in comparison to other donor countries, but it seems a fair estimation, that my country is one of the largest donors of extra-budgetary resources to FAO. We are, moreover, one of the biggest contributors to UNDP. I mention this not because we want to demonstrate to this meeting that we belong to the “good guys”, although we are proud of our performance, but merely to indicate that the issue of agency overhead costs is of particular interest to my country and I believe to recipient countries as well, not in the least because many millions of dollars are involved.
When assessing the situation, I believe that it is important that one keep in mind the reasons and motives of the members of the UNDP Governing Council, when they unanimously decided to lower the reimbursement rate from 14 to 13 percent. I want to stress the fact that the. recipient countries wholeheartedly supported this decision, I might even go further by saying, that the recipient countries themselves inspired this decision taken by the Council. And rightly so, because it is the recipient country which is first and foremost affected by it, because all UNDP and trust fund resources spent on agency overhead is money not directly - and I repeat not directly - benefiting the recipient countries. I hasten to stress, that no field programme can be properly executed without sufficient back-stopping, and we would be the last to promote a haphazard and superficial implementation of programmes and projects.
The fact remains, however, that a donor who has to spend one percent less in agency support costs obtains one percent more resources available for direct project implementation in the country. This was the main motive for members of the Governing Council of UNDP to decide as they did, not in an irresponsible manner, but in the conviction that 13 percent as an overall figure would be sufficient additional income for the agencies to adequately support their project-executing activities. It is our belief that the UNDP Governing Council is pre-eminently equipped to make such a decision. UNDP is the only international body which has an overall insight into the details, problems and consequences of technical cooperation in the different fields in which the agencies have an executing responsibility. We feel, moreover, that there is insufficient proof that FAO finds itself in a more difficult position in this connection than other agencies, such as ILO and UNESCO and that there is, consequently, no immediate cause to make an exception in the case of FAO.
On page 26 of the Programme of Work and Budget the Director-General calculates the total support costs on $52.4 million and the total amount reimbursed on $37.3 million, resulting in a negative difference of $15.1 million. We do not dispute this table, but we think the Director-General would tend to agree with us when we state, that this is an estimated amount of money and not a precise calculation. It is virtually impossible to establish the support costs involved in a precise way. This, in fact, is exactly the reason that the UNDP Governing Council at the time decided to take a fixed and estimated percentage of project costs as the amount to be reimbursed. One realizes, of course, that such a fixed percentage does not always have negative effects for the executing organizations concerned. It seems very likely that in certain cases where a 14 percent rate was applied, the actual costs involved would come out lower, if it were possible to calculate them in a precise way.
On page 25 the Director-General explains, that the financial difficulties of UNDP may result in a decline in delivery from 1982 onwards, even in absolute terms, although such a situation is not actually foreseen in the Programme of Work and Budget. He explains on page 26 that this development will result in a relatively increased amount of support costs.
What this in fact means is that on top of a decrease in output directly benefiting developing countries, caused by a decline in funds, an additional decrease in output should be added caused by relatively increasing support costs. This is indeed a highly regrettable situation. We do not dispute the argument put forward by the Director-General, but it seems to my delegation, that some more stress could have been laid on the necessity to absorb these unfortunate developments, first and foremost by a relative reduction of administrative costs, instead of an increase, through more cost-effectiveness, greater efficiency, better performance and an increased awareness of the actual purpose of all our and in particular FAO’s endeavours.
It is true that on page 27 it says:
“Every effort will, of course, be made to keep support for all programmes and projects, including UNDP projects, to the minimum consistent with the quality and quantity required for sound technical, administrative and financial purposes.”
It is arguable however, as I stated before, that this minimum performance requires an amount of money substantially above 13 percent. Moreover, the statements following on page 27 on the costly activities of coordination, are in our opinion only partly related to the costs involved in backstopping project execution. Mentioning these costs of coordination in this context therefore does not seem to be an entirely proper illustration of the problems encountered when curtailing support costs.
My delegation supports the UNDP decision. We would, moreover, urge FAO and delegates not to reopen this issue. It has been discussed extensively for a number of years. A final decision has now been taken and the time has come to close the discussion and to start working within the limits set by the UNDP decision.
Turning now to funds in trust, my delegation wants to follow the UNDP decisions in that respect as well. Two paragraphs of this decision are particularly relevant as far as trust funds are concerned.
Firstly para. 4 where governments are urged to follow the UNDP decision in respect of trust funds.
Secondly para. 2 d), where it is stated, and I quote: “In those cases where the actual support costs can be identified, no Agency shall be reimbursed in excess of the support costs associated with the execution of projects funded by UNDP”. This last paragraph is of particular importance in connection with the projects with a large equipment component and the Associate Expert Programme. As we have stated before it is extremely difficult, if not impossible, to identify the precise support costs. But it seems to us abundantly clear that in cases where now a 5 percent or a split-rate of 14 and 5 percent is applied, charging a flat 13 percent rate would be against the intention and purpose of the UNDP decision.
We therefore reject option 1 on page 3 of document INF/16, which does not accept the UNDP decision and option 2, in which the application of a flat rate of 13 percent for all projects is proposed. In option 3 the present provisions concerning trust funds are maintained, that is, 14 percent overhead as a general rule and the possibility for a split-rate of 14 and 5 percent and 12 percent for the associate expert programme.
As has been said before, we cannot accept a 14 percent rate for trust fund projects, because it is against the UNDP decision. In the case of split-rate projects, we prefer to maintain the possibility of a diminished rate for projects with a large equipment component, as was explained before, because such a possibility is in line with the UNDP decision and more adequately reflects the actual costs involved. The 14 percent rate in split-rate projects covers more or less the non-equipment part of the project. There seems to us to be no logical or practical reason to make an exception in this case and to maintain the 14 percent in split-rate projects, as is envisaged in option 3. If we accept 13 percent in normal, non-equipment projects, there seems to us to be no reason not to accept this rate for the non-equipment component of split-rate projects.
It follows, that my delegation is in favour of option 4 on page 3 in document INF/16. It is a flexible solution. It is in our opinion the only one that is in line with the unanimously accepted UNDP decision. It gives the Director-General the possibility to make exceptions when the circumstances so require and it is the option which will hopefully secure and maintain and perhaps even increase the present level of trust fund contributions.
I would like to conclude by once again expressing my country’s support for FAO and in particular for its trust fund activities. The Netherlands will continue to support FAO’s programmes and we look forward to a contained, fruitful and long-term cooperation.
N. CARRASCO SAULNIER (France): Beaucoup a déjà êtê dit, au cours de ces derniers mois, sur le sujet que nous abordons ce matin. Je me bornerai donc à émettre une opinion sur les propositions qui nous sont soumises par le Secretariat dans le document C 81/INF/16.
Je voudrais tout d’abord faire remarquer qu’il ne nous paraît pas concevable de rejeter purement et simplement, comme le mentionne la première proposition contenue dans ce texte, la décision adoptée par le Conseil d’administration du PNUD et approuvée ensuite par l’Assemblée générale des Nations Unies.
Comme ma délégation l’a déjâ relevé devant le Conseil, il y a un an, soyons conséquents avec nous-mêmes, et n’oublions pas que ces décisions ont été prises par nos propres délégations dans ces deux enceintes et cela en pleine connaissance de cause et conformément aux instructions de nos gouvernements. On ne peut donc nous demander de nous déjuger ici sur ce que nous avons approuvé à New York. D’ailleurs, comme vient de le signaler M. West lui-même, cela ne manquerait pas de nous conduire à une impasse.
Il nous semble donc curieux que le Secrétariat nous ait présenté à nouveau cette solution de rejet, d’autant plus que, si j’ai bien compris, les documents C 81/3 et C 81/INF/16 nous précisent que, pour tenir compte de la situation qui pourrait résulter de la décision du PNUD, les crédits demandés pour le soutien des programmes de terrain dans le présent programme de travail et budget ont été calculés en conséquence.
Ma délégation souhaite donc se rallier à la quatrième des solutions qui nous sont proposées à la page 3 du document C 81/INF/16, et qui figure à l’alinéa iv). Ainsi, devons-nous accepter pour les projets du PNUD la réduction de 14 à 13 pour cent du taux de remboursement des frais de soutien.
Je voudrais d’ailleurs ajouter que, compte tenu des motifs qui ont amené le Conseil d’administration du PNUD à prendre cette décision, nous considérons que cette réduction doit constituer un premier pas vers un taux mo ins élevé.
Il conviendrait d’autre part d’appliquer ce taux plafond de 13 pour cent aux projets financés par les fonds fiduciaires, tout en conservant les taux inférieurs et les exonérations prévus pour certains cas particuliers au paragraphe 4b) à g) de la section 250 du manuel administratif de la FAO. Cette mesure nous paraît en effet de nature à préserver l’originalité des fonds fiduciaires de notre Organisation et,comme l’a fait très justement remarquer le Directeur général, elle éviterait de décourager la création et le réapprovisionnement de ces fonds.
S.V. HAGEN (Norway): Speaking on behalf of the Nordic countries, Denmark, Finland, Norway and Sweden I would like to comment also on the agenda item 12.2, Support Costs. The document I will refer to is document C 81/INF/16.
The Nordic countries have, for a number of years, been actively involved in the search for a generally acceptable solution to the problem of an arrangement which applies to the reimbursement to the United Nations agencies for the costs incurred by them when executing projects financed otherwise than through the regular budget. The decision by the UNDP Governing Council in June 1980, which was confirmed by the Council in June this year, and by which it was unanimously agreed to lower the reimbursement rate from 14 percent to 13 percent, has in our opinion settled this matter, It is no secret that the developing countries, in other words the recipients of aid and those most directly affected, have inspired this decision. We welcome the decision which to us represents a compromise. Today we have come to the stage where we have to ‘address the implementation of this new UNDP decision. We attach great importance to this. First of all, because it is our belief that it will mean that an additional one percent in real resources will be available for projects in the field. Secondly, because the Nordic countries, as major contributors to the UNDP and as the largest contributors to FAO Trust Fund Programmes, have an important stake in the issue of overhead costs for other United Nations agencies,
As for the implementation of this decision in relation to FAO, we are in general agreement with the statement just made by the delegate of the Netherlands.
As far as UNDP financed projects executed by FAO are concerned, the decisions are clear and we would expect that the issue would not be re-opened here.
Regarding trust funds, we confirm that our Governments will adhere to para. 4 of the UNDP decision which urges governments to apply the support cost arrangement spelt out in the decision also to such funds. In that respect the document before us presents four options. We could accept option 4, which seems to us to be the only one which is both in conformity with the UNDP decision and at the same time provides for the necessary flexibility.
We would like to draw the attention of this Commission to para. 2 a) of the UNDP decision where it is stated that executing agencies shall “not increase the levels of the regular budgets because of the new reimbursement rate”.
Furthermore, we would welcome and even emphasize that servicing costs earned by the Organization from trust funds should, as a general rule, be distributed to the technical divisions in proportion to the extra workload undertaken.
Miss C. McASKIE (Canada): It is with some difficulty that my delegation addresses the proposal which the Secretariat has put before us, that the long negotiated question of support costs be re-opened. My Government, along with many others here today, was closely involved in this process, a process begun in 1977 at the 24th Session of the UNDP Governing Council and which we believed was finally settled in 1980 and 1981.
I would like briefly to review the events which have taken place. Firstly, in 1977 the 24th Session of the UNDP Governing Council decided that 14 percent would remain in effect on a temporary basis only, while the question was reviewed. The 14 percent, therefore, was never formally enshrined. Accordingly a working group of Member Governments was established which met five times between January 1978 and June 1980. The group reviewed evidence from many sources, chiefly from the Specialized Agencies themselves as well as the UNDP, other executing agencies, the joint inspection unit and an outside consultant. As a result of this evidence, during which it was, I regret to say, apparent that many Specialized Agencies had difficulty in establishing exactly what their actual support costs were in relation to UNDP projects, the decision was adopted by consensus that 13 percent would apply across the board, with effect from 1st January 1982, subject, of course, to certain variations under the flexibility rule and the currency exchange rules. These decisions were reached in 1980 and endorsed in 1981 and subsequently endorsed by the Economic and Social Council and the General Assembly. Therefore, I am at a loss to understand the proposal before us today. I appreciate fully that the Secretariat must lay these decisions before the Conference, it is right that they should do so, but in document C 81/INF/16, which presents no evidence on the actual costs to the Organization of the Administration of UNDP projects and it merely suggests once again that the 13 percent is insufficient. Mr. West, in his opening remarks this morning, confirmed in fact the difficulties there are in being precise about these matters. The document then goes on to make four alternate recommendations,the first of which is that the Conference reject the decisions taken by the UNDP Governing Council and the General Assembly and to seek to re-open the whole question. My Government is aware of the fact that decisions of the General Assembly are not binding on the Specialized Agencies but it was always our understanding that the agreement, the partnership agreements, between the United Nations system and the Agencies required the Agencies to give serious consideration to decisions made by member governments in their capacity as members of the General Assembly.
It is the contention of my Government that the proposal before us to reject a decision of the General Assembly does not constitute serious consideration. I would appeal therefore to fellow delegates to ask themselves if they wish to be put in the impossible situation of rejecting at this Conference a decision which they themselves made in the General Assembly or whether they wish to recommend instead that more serious consideration be given by the Agencies to the deliberations of the central organ, the General Assembly, which is the embodiment of the joint will of the international community. The fact remains that whatever the decision of the Conference the UNDP is not empowered to pay more than 13 percent, and this is the reality which we must face.
On the question of Trust Funds I would just like to add that my Government is not of course a Trust Fund donor at this cime. But we would support the statements of the Nordic governments in respect of recommendation (iv) in the document before us.
E.M. West (Assistant Director-General, Office of Programme, Budget and Evaluation): To avoid any misunderstanding permeating this debate, may I say that the delegate of Canada has repeatedly referred to the recommendations of the Secretariat. There are no recommendations of the Secretariat in paragraph 11. The Secretariat has presented alternative options for the decision of the Conference. If I have indicated anything in my remarks it was certainly not the adoption of (i). So I hope it is now clear that we can avoid unnecessary discussion of what the Secretariat has recommended: it has not recommended as the delegate of Canada has suggested.
D. BETI (Suisse): En tant que membre du Conseil dfadministration du PNUD, la Suisse a participé depuis le début aux discussions concernant le taux de remboursement des frais de gestion par le PNUD aux agences d’exécution pour la mise en oeuvre des projets. Elle a, par conséquent, soutenu la décision du PNUD 80/44, adoptée par consensus en juin 1980, et reconfirmée par le Conseil d’administration du PNUD du mois de juin de cette année.
Nous aurions souhaité que toutes les agences d’exécution touchées par la réduction établie puissent accepter cette décision et essayer dfaccomplir les tâches dont elles sont chargées sur la base de cette décision. Nous regrettons dès lors que la discussion de cette question, discussion qui à notre avis a déjà trop duré, soit de nouveau relancée. Nous le regrettons d’autant plus qu’il y a lieu de craindre que cette nouvelle discussion ne nous amène qu’à des situations d’impasse, situations qui seraient essentiellement au détriment des vrais destinataires, de l’assistance acheminée par la voie du PNUD, de la FAO et de toutes les autres institutions d’aide au développement.
Mais, puisque la question nous est soumise dans cette enceinte, force nous ést de préciser ici la position de mon gouvernement à ce sujet. Quant aux arguments qui ont servi à déterminer cette position, ils rejoignént, pour l’essentiel en tout cas, ceux qui viennent d’être exposés par les délégations des Pays-Bas, des pays nordiques et du Canada; je ne les répéterai pas afin de gagner du temps.
Mon gouvernement continuera d’appuyer la decision 80/44 du PNUD, et ceci pour le moins aussi longtemps que des éléments d’appréciation et de calcul des frais de gestion plus précis que ceux fournis jusqu’à ce’jour par les agences d’exécution ne pourront être présentés par celles-ci.
En ce qui concerne les quatre options du paragraphe 11 du document C 81/INF/16, mon gouvernement rejette les options Nos 1 et 2. Il donne nettement la préférence à. l’option No 4. Si cette Conférence choisissait d’opter pour l’option No 3, nous le regretterions profondément. Mon gouvernement tient à faire remarquer qu’il nous serait extrêmement difficile, pour ne pas dire inacceptable, de payer en moyenne par projet un taux plus élevé de 13 pour cent comme frais de soutien aux projets que nous finançons par des fonds fiduciaires.
La question des frais d’administration pour l’exécution des projets est une de celles auxquelles l’opinion publique de mon pays est très sensible. Nous pensons que c’est à juste titre, et que c’est bien qu’il en soit ainsi. Mon gouvernemзnt se doit d’en tenir compte dans sa politique. On ne doit pas oublier que si nous additionnons les frais d’administration du PNUD avec les frais de soutien remboursés à la FAO, ainsi qu’avec les nôtres, pour la mise en oeuvre de projets multilatéraux, nous arrivons facilement à des dépenses d’administration dépassant les 30 pour cent du coût des projets. Cela signifie qu’approximativement un tiers des ressources mises à disposition pour l’assistance au développement ne profite pas directement, et je souligne “pas directement”, aux vrais destinataires. Personne ne peut avoir intérêt à ce qu’il en soit ainsi et que cet êtat de chose ne s’améliore pas.
Nous avons exürimé notre point de vue au sujet de l’appui que nous accordons aux programmes d’action spéciauxde la FAO par le financement de projets sur des fonds fiduciaires. Mais nous ne voulons pas nous répéter; ce point de vue se trouve exprimé dans les comptes rendus de notre commission.
Il va de soi que la continuation de notre participation au financement de ces programmes ne sera possible que dans la mesure où, d’une part la réalisation sera efficace et que, d’autre part, l’utili-sation des ressources mises à disposition sera la plus économique possible. Ce dernier aspect concerne particulièrement les frais d’administration des projets. Vu sous cet angle on ne peut pas passer sous silence le fait que l’aide accordée par la voie bilatérale est encore celle qui coûte le moins cher en frais d’administration.
Ma délégation en appelledès lors à tous les participants à cette Conférence pour que nous réussissions à voir l’ensemble du problème auquel on nous a confrontés, et que nous nous évitions à nous-mêmes de nous acheminer sur des pentes dangereuses, nous amenant inévitablement à des impasses qui, en fin de compte, seraient désagréables pour tout le monde.
J’aimerais terminer en réitérant l’appui de mon pays, aussi bien au PNUD qu’à la FAO et à leurs activités, chacun dans son domaine et dans sa spécificité.
W. A. F. GRABISCH (Germany, Federal Republic of) (original language: German): With regard to item 12.2 on the Agenda I can be very brief indeed. I just wish to recall the position our country has already stated at the 78th, 79th and 80th sessions of the Council. To sum up our position is that FAO should accept the decision by the UNDP to reduce the support cost from 14 percent to 13 percent, and give evidence of the level of its support costs. This would also be in line with the pertinent decision of the United Nations General Assembly. We assume that the Director-General will succeed in compensating the lower reimbursement of support cost by way of rationalization.
With respect to paragraph 11 of document C 81/INF/16, the four options before us there, I would like to say that as far as my delegation is concerned option (iv) is the only one that we can accept.
J. L. F. BUIST (United Kingdom): First I would like to say that I believe it is worth spending some time on this question; it is important and we are grateful to the Secretariat for producing this paper and for setting out the possible options before us.
Mr. West did rightly remind the United Kingdom some time earlier that my country originally had doubts about the change which was proposed in the UNDP and the lowering of the rate from 14 percent to 13 percent. In the Governing Council, however, we were convinced by the arguments of other countries, and especially the developing countries benefiting from the programme. Our view has since been reinforced by considering the practice of other agencies and in this context I can again recall the arrangements made by the Asian Development Bank.
Incidentally, the Secretariat might like to note that their 10 percent reimbursement arrangement is for technical cooperation only. For financial cooperation the reimbursement rate is only 1 percent.
These rates make sure that the maximum share of any funds provided will go to actual operational development in the beneficiary countries. We therefore found the arguments of the Netherlands, the Nordic Group and others very compelling and convincing and we should like to underline our own agreement with their view that the practice in FAO should follow the UNDP decision, including of course paragraph 4 and paragraphs 2(a) and 2(d). We could therefore accept solution (iv) in this paper.
R. A. SORENSON (United States of America): The Commission will recall that when this issue was discussed at the 78th Session of the Council my delegation was of two minds. On the one hand we could have agreed at that time that the entire issue should be reopened in the UNDP Governing Council. On the other hand we believe that if the governing bodies of FAO were to agree to Decision 80/44 of the UNDP Governing Council as subsequently adopted by the General Assembly, then it was only logical and reasonable that this decision should be adopted in its entirety, that is to say that the UNDP Governing Council decision was an indivisible whole applying both to UNDP and to trust Fund support costs. In fact, this was also clearly the understanding of the Secretariat. That is in Document CL 78/28 prepared by the Seventy-eighth Council. In paragraphs 26 through 29, the Secretariat specifically drew the attention of Council Members to the significance and importance of Paragraph 4 of the UNDP Governing Council decision.
To quote both from the UNDP Council decision itself as well as from the document of the Seventy-eighth Council, the UNDP decision “urges governments and governing bodies of agencies to apply the support costs reimbursement arrangement described above also to technical cooperation activities financed from all other extra-budgetary resources including Trust Funds or similar funds”.
The FAO document goes on in Paragraph 27 to remind the Council that “reimbursement arrangements applied to Trust Funds ate governed by certain provisions in the FAO Manual”. In this connexion, it was recalled that “in addition to lower rates for projects with high equipment component, the Manual provisions allow waiver of Trust Fund reimbursement in part or in whole in certain circumstances.”
Clearly, the overhead cost of each project implemented by FAO and the other specialized agencies is different and unique for the very reason that every project is different and unique. What we are trying to agree upon is an overall average cost, and this is what the UNDP Governing Council was clearly trying to arrive at when they decided unanimously to approve the 13 percent and to urge that it be applied across the board to all Trust Funds from whatever extra-budgetary source. To deviate from that decision would be to destroy the basis upon which it was agreed. The governments which are members of this conference, including the United States, are all members of the General Assembly and participated in that decisiαn. We believe that it would not be consistent for us to vote in one way in one organization and then to undercut that decision by essentially voting against it and nullifying its effects in another UN forum, that is to say, here in FAO.
Consistent with the unanimous decision taken in the General Assembly, in which every government in this room participated, we believe that there is only one option open for this Conference to take which would be consistent with the rest of the UN system, and this would be to accept the decision already taken by: the UNDP Council and the General Assembly in its entirety and without equivocation, and that would mean that we would approve Paragraph 2 or would hope that this Commission could approve Paragraph 2.
CHAIRMAN: Do I understand the delegate of the USA correctly that he would then be advocating option (ii)?
R. A. SORENSON (United States of America): That is correct. Thank you.
M. MORIMOTO (Japan): My delegation wishes to make a brief comment on the question of support costs. The 1% reduction in the reimbursement from UNDP would have a serious impact on the future activities of FAO, and my delegation is among those who earnestly hope that the matter may be altered. But we are also wondering how much room for change for the better there is by having our Director-General or the Secretariat negotiate with UNDP whose decision has been reached after a long process of study and deliberations at ACADQ. My delegation is inclined to the view expressed at the Seventy-Eighth session of the Council that FAO should make an utmost Herculean effort to save on its outlays under various items and try to cover up the shortcomings caused by the UNDP Governing Council, and that after a due period of effort, FAO should present an ex-post facto report to request with a stronger cogency for that change, in accordance with Paragraph 2 (g) of the UNDP decision in Annex 1 of document C 81/INF/16.
As far as the Options open to us are concerned, we are drawn towards (iv).
J. O. ALABI (Nigeria): My comment on this would be very brief. Reading through the document before us and noting the views expressed at the Council, one can see that there is no unanimity on the question of how these support costs should be handled. Although the UNDP Governing Body and the UN Assembly agree that the support costs should be cut down to 13 percent, I still feel that this Conference as the Governing Body of FAO can still differ from this decision which has been taken. From the analysis which we have been given, it will mean quite a lot to FAO, which I understand even at 14 percent is subsidising all these various projects from the Regular Budget. It will mean quite a loss of funds, and I would very seriously think that the Conference should plead or discuss with whoever knows about this so that we retain the support costs at 14 percent. Even where the costs which are being charged at present are less than 13 percent, they still want us to go to 13 percent. Would that be in the interests of the donors who are obliged to pay more if the job can be done more cheaply?.
With these comments, I would think that we should stick to the 14 percent and not reduce the costs to 13 percent.
M. TRKULJA (Yugoslavia): I just wanted simply to eliminate any feeling that some countries tend to take one position in one forum and then perhaps change their position in another one. It is not true, at least as far as my country is concerned. We feel if one really wants to apply the General Assembly decision on this issue, then I think the only thing to choose is Option (iv) because it takes cognisance of the fact in 2(d) that “in cases where the actual support costs can be identified” and so on, so in that case, I think that a majority view as it has emerged from our debate is, I think, fully consistent with the General Assembly decision.
CHAIRMAN: As I see no further flag up, that indeed brings us to the end of the debate on this subject. I also will be very brief in winding up. That certainly is a subject that had been discussed within FAO and within the UN system for quite some time.
The twelve countries that have spoken this morning have indicated a clear preference to Decision 4 as contained in document C 81/INF/16. There were exactly nine countries; one country indicated that if
the majority would go along with Decision 4, it would also accept that. One country expressed itself on Option (i), and one country on Option (ii).
With these remarks I close the debate on the subject of support costs.
As we have recovered quite some time, I would suggest we adjourn until 11.30 to take up the subject of the World Food Programme. I would kindly ask the distinguished delegates to accept the time of 11.30 so we can start precisely and probably also end at 12.30.
The meeting was suspended from 11.00 to 11.30 hours.
La séance est suspendue de 11 h 00 à 11 h 30.
Se suspende la sesión de las 11.00 horas a las 11.30 horas.
CHAIRMAN: May I add the remark, with some regret on my side, that I overlooked at the end of the debate this morning the fact that the delegate of Norway was speaking for the Nordic countries, hence for two countries. So we actually had 18 countries speaking on the subject of Support Costs, 16 were for alternative (iv) on page 3 of document C 81/INF/16, one country was for option (i), one country for option (ii).
