COUNCIL

Table of Contents

MATTERS REQUIRING ATTENTION BY THE COUNCIL

INTRODUCTION

ADOPTION OF THE AGENDA

MEDIUM TERM PLAN 2002-07

JOINT INSPECTION UNIT (JIU) REPORTS

FAO'S PRESENCE AT COUNTRY LEVEL

FAO'S NEW FINANCIAL SYSTEMS AND PROCEDURES

USE OF ARREARS

SAVINGS AND EFFICIENCIES IN GOVERNANCE

Proposed Reform of the General Debate at Conference

INTRODUCTION

1. The Committees submit to the Council the following report of their Joint Meeting.

2. The following Members were present at the meeting:

3. Mr Kim Kyeong-kyu replaced Mr Rho Kyeong-sang as representative of the Government of Korea on the Finance Committee.

4. Ms C. Heileman replaced Ms L.J. Tracy as representative of the Government of United States of America on the Finance Committee.

5. Mr Baharsjah, the Independent Chairman of the Council, was present at the meeting.

ADOPTION OF THE AGENDA¹

6. The Agenda and Timetable for the Joint Meeting were approved with the inclusion of one item under the item Any Other Business, i.e.: Joint Inspection Unit Reports.

MEDIUM TERM PLAN 2002-07²

7. The Committees reviewed the Medium Term Plan 2002-07 and commended the Secretariat for the quality of the document and the manner in which it responded to the stated requirements of the membership. They considered it to be a significant improvement over previous versions, and that it evidenced the extensive analytical work which had taken place throughout FAO. They noted that there were benefits inherent in this process going beyond the production of a policy document for consideration by the Governing Bodies. The Committees also welcomed the attention placed on multi-disciplinarity, through the presentation of selected Priority Areas for Inter-disciplinary Action (PAIAs). Several members felt that more prominence should have been given to regional dimensions and were informed that this would be addressed in the biennial Programme of Work and Budget.

8. The Committees appreciated the additional efforts to apply the new programming model to substantive activities. They looked forward to further improvements in future versions, particularly in terms of closer adherence to the design principles of this model, and better articulation of constituent programme entities.

9. The Committees considered that the proposed medium-term programme had met expectations that it should be firmly rooted in the Strategic Framework 2000-2015. As such, the Plan provided the membership with a well articulated vision of the substantive work that FAO proposes to carry out over the next six years. It also covered the important complementary actions to implement the strategies to address cross-organizational issues identified in the Strategic Framework.

10. The Committees recognised the indicative, non-binding character of the resource projections included in the Plan, which reflected the Secretariat's perception of what was required for satisfactory implementation. Some members did not subscribe to the analysis and conclusions in the Director-General's Introduction.

11. After extensive discussions, the Committees agreed that the most appropriate context for effective discussion of budget levels was during the consideration of proposals for the next Programme of Work and Budget through to the final decision of the Conference, rather than in the context of the Medium Term Plan, the substantive content of which would, however, usefully inform forthcoming Programme of Work and Budget debates among members.

12. Given that efficiency considerations were germane to any discussion of resource requirements, the Committees agreed that a document on efficiency gains should be prepared for the next Council, while noting that the normal distribution rules for documentation were unlikely to be met in the circumstances.

13. The Committees approved the Medium Term Plan for transmission to the Council, and emphasised that their endorsement of it related to the substantive content and priorities expressed in the document, noting that the resource projections were indicative and non-binding on members. The Committees expressed the hope that the further discussion at the Council, together with the Plan itself and the views of the Committees would constitute a good basis for the formulation of the Programme of Work and Budget proposals for the next biennium.

JOINT INSPECTION UNIT (JIU) REPORTS³

14. The Committees addressed jointly the following two JIU reports, with the benefit of the presence of Inspectors involved in their preparation.

Private Sector Involvement and Cooperation with the United Nations System (JIU/REP/99/6) together with comments of the Director-General and of the ACC⁴

15. The Committees expressed appreciation for the prompt response of the JIU to the request from FAO for a study on this important and topical issue.

16. The Committees recognised that cooperation of the UN system with the private sector, while promising as to its mutually beneficial effects, had sensitive dimensions which required a cautious approach. In this connection, the Committees felt that the report should have been more explicit with specific case studies of successes and pitfalls.

17. The Committees were satisfied that FAO had issued comprehensive guidelines on cooperation with the private sector, which were broadly consistent with similar guidelines issued by the UN. They also noted with satisfaction that FAO was already well advanced in relation to the recommendations in the report and welcomed the updated information given during the discussion on recent developments in FAO, and planned measures to strengthen cooperation.

18. The Committees felt that, given fast-evolving contexts in this area, it would be useful that the JIU carry out a follow-up study at a suitable stage. In conclusion, while taking note of the report and the ACC comments thereon, the Committees endorsed the Director-General's comments on it. The Committees agreed to forward this report to the Council for information.

Policies and Practices in the Use of the Services of Private Management Consulting Firms in the Organizations of the United Nations System (JIU/REP/99/7) together with the comments of the Director-General⁵

19. The Committees welcomed the useful comparative information contained in this report. In relation to its recommendations, the Committees agreed with the comments of the Director-General. In addition, the Committees felt that regular reports on the use of such firms, including on ex-post facto assessment of the usefulness of the advice given, should be made to the Finance Committee. It was also felt that, in any follow-up report it would be useful to take account of the views and opinions of the firms themselves. The Committees agreed to forward this report to the Council for information.

FAO'S PRESENCE AT COUNTRY LEVEL⁶

20. It was recalled that the Finance and Programme Committees at their Joint Meeting in May 2000 had considered the Director-General's proposals to enhance FAO's presence at country level through the outposting of senior technical officers as described in document JM 2000/1 and that although a majority of the members was prepared to advise the Council to approve the proposals, some members had requested that further information be provided on a number of issues and the Committees had therefore decided to consider this item further in September 2000.

21. Accordingly, the Committees considered the comprehensive additional information provided in document JM 2000/2. At their request, the Committees also received complementary information in document JM 2000/INF/3 on the transfer of operational responsibilities to the country level.

22. The majority of the members of the Committees confirmed their support for the proposals as contained in document JM 2000/1 and recommended their approval by the Council.

23. Some members, however, expressed a number of concerns, particularly on the financial implications of the proposals. It was not clear whether the cost neutrality of the proposals could be maintained beyond the short-term. In this context those members recalled the proposal in the Medium Term Plan 2002-07, that resources devoted to FAO Representatives should be substantially increased in 2002-03. They also felt that criteria for the establishment of country offices needed further refinement. In addition, some members expressed concern about the option to locate FAO Representatives in the premises of Ministries of Agriculture since that could be viewed as inhibiting their independence.

24. The Committees also expressed concern about the possible impact on technical programmes as outposted technical officers might not be able, under the proposed arrangement, to continue to fully assume their technical functions in addition to the responsibilities of FAO Representatives. However, the Committees were informed that partial compensation would be provided by a redistribution of tasks among technical officers dealing with the same general subject matter area for a group of countries. It was recognized that the proposals would not provide the ideal conditions under which the officers concerned could effectively assume both FAO Representative and technical officer duties.

25. The majority of members supported the Secretariat's view that the proposals represented the only feasible way in which the Organization could positively respond, in the context of a zero nominal growth budget, to the requests from developing Member Nations to enhance their liaison with FAO. The Secretariat also stressed that the new arrangements had received the agreement in principle of a number of countries wishing to host an FAO Representation, despite the cost implications for them.

26. Taking into consideration the concerns expressed by some members, the Committees agreed that the proposals should be implemented with caution paying due attention to:

• the need to appoint to these new positions fully qualified staff members with both technical and managerial expertise;
• the application of existing mechanisms for regular performance appraisal;
• the need to ensure that FAO Representatives continue to discharge their functions independently; and
• the capacity of recipient countries to fulfil their obligations which will accrue from the implementation of the proposals.

27. The Committees suggested that at some future date they should receive a progress report based on an evaluation of the new arrangements.

28. Regarding the decentralization of operational responsibilities to the country level, the Committees welcomed the progress report provided by the Secretariat and in particular the gradual and phased approach to the implementation of the transfers of responsibilities from the Regional Offices to the FAO country offices.

FAO'S NEW FINANCIAL SYSTEMS AND PROCEDURES⁷

29. The Committees discussed the work programme and budget proposals for completing Phase I (the financial systems component of the Oracle project). While there was broad agreement that FAO had little choice but to proceed with the work necessary to resolve financial systems implementation problems and bring the operation of its financial systems to good order, the level of funding required for this was felt to be unpalatable but inescapable. On balance, the Committees felt that, going forward, the cost of not resolving these problems quickly would result in higher costs to the Organization. It was emphasized that FAO could not operate without a fully functional financial system in place and therefore the funding proposed by the Director-General was necessary.

30. In supporting the Director-General's proposal to delay Phase II of the Oracle project (payroll, human resources and budget), the Committees asked for, and received, assurances that this decision would not delay the decentralization of work to the country offices.

31. With respect to possible sources of funding for the US$5.9 million shortfall at issue, as described in the paper, the Committees doubted the value of seeking additional voluntary contributions from major donors, given that the response to an earlier request had been unfruitful.

32. In concluding discussions, there was agreement on the need for funding and that the work should proceed, but that further input from the Finance Committee was necessary with respect to the recommended sources of funding.

33. The Finance Committee reported back to the Joint Meeting that, while a consensus had been reached to endorse the Director-General's proposal to reallocate up to US$5.9 million within the budget of 2000-01, it was a reluctant decision made because there was no real alternative source of funding available if arrears and voluntary contributions were not forthcoming. This endorsement was given with the understanding that as much protection as possible would be given to Chapter 2 (technical and economic programmes). It was regretted that the practice of budgetary transfers had recurred for this project. The Committee further expressed the view that the cost for this and similar projects in the future, should be budgeted to include reasonable provision for contingencies consistent with the risks and uncertainties inherent in the project. In the future the Committee would wish to be briefed on such projects at their inception stage and to be kept informed of progress. The Committee concluded that the use of inter-chapter transfers for this purpose should not be seen as a precedent. These conclusions were endorsed by the Joint Meeting.

USE OF ARREARS⁸

34. According to the terms of Conference Resolution 3/99, the Committees considered a proposed list of items meeting the criteria established in the same Resolution, which could be funded by arrears payments, in order to advise the Council in this regard.

35. After receiving an update from the representative of the main contributor on the prospects for payment of its arrears, members expressed their preliminary views on the relative priorities among the various items from the perspective of their own country or region. The Committees recalled the legal obligation of Members to pay their contributions on time and without conditions.

36. Some members suggested that a one-time effort to provide additional technical support to Member countries for strengthening national sanitary and phytosanitary systems, and developing a network of plant biotechnology in Asia, be added to the priorities. Some members also emphasised the need to channel a substantial portion of surplus funds to technical assistance, while others commended the balance and distribution of resources between administrative and technical matters in the Director-General's proposal.

37. The Committees agreed to forward the proposal to Council with the above observations. The Committees also agreed with the recommendation of the Director-General (cf. paragraph 30) to give high priority to the full implementation of the Organization's corporate administrative systems.

38. While not directly related to the use of arrears, under the terms of the above Resolution, the Committees also wished to draw the attention of the Council to the still unresolved issue of accrued liabilities under the After-Service Medical Care scheme and requested that the Finance Committee review it as a matter of urgency.

SAVINGS AND EFFICIENCIES IN GOVERNANCE

Proposed Reform of the General Debate at Conference⁹

39. The Committees examined the proposal to set aside half a day early in the Conference for delegation heads to have roundtable discussions in order to promote greater interaction between Ministers. This was seen as an initial step towards moving away from the traditional practice of the Conference dedicating four days to statements in Plenary, and to encouraging an intellectually stimulating debate by Ministers that would lead to greater commitment to the Organization at ministerial level.

40. The Committees discussed the merits of the format adopted for the United Nations Millennium Assembly (New York, September 2000), in which four separate regionally-represented Round Tables were attended by Heads of State and Government. Further to the United Kingdom's offer to finance an Expert study on the dynamics of such meetings, the Committees requested the Secretariat to prepare a paper on the options available, including their costs and the time needed to develop and implement them, to be presented to the Council at its Hundred and Nineteenth Session (November 2000) and stressed that each of these Round Tables should include representation from all regions. The latter Council Session would be requested to choose the most suitable option, taking into account the proposal to use the Thirty-first Session of the Conference in November 2001 as a forum for World Food Summit: five years later.

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1 Doc.: JM 2000/INF/2

2 Doc. CL 119/17

3 Transferred to the Joint Meeting from their individual sessions

4 Doc. CL 119/INF/13

5 Doc. CL 119/INF/14

6 Doc. JM 2000/2

7 Doc. JM 2000/3

8 Doc. CL 119/19

9 Doc. JM 2000/4