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a) Administration of the WFP fund

318. The Conference noted that Regulation 27 of the Revised General Regulations envisaged that the World Food Programme Fund should continue to be established by the Director-General under Regulation 6.7 of the Financial Regulations of FAO, while the management of the Fund should be governed by separate Financial Regulations to be proposed by the Executive Director of WFP and approved by the CFA after receiving advice from the UN Advisory Committee on Administrative and Budgetary Questions (ACASQ) and the FAO Finance Committee.

319. Consequently, the Conference endorse the following Resolution:

Resolution 10/91

ADMINISTRATION OF THE WORLD FOOD PROGRAMME FUND

THE CONFERENCE,

Recalling its Resolutions 1/61, 4/65 and 22/75 concerning the establishment and continuance of the UN/FAO World Food Programme,

Noting that the proposed Revised General Regulations endorsed by the Council at its Ninety-ninth Session in June 1992 and submitted to the present session of the Conference for its approval envisage that the World Food Programme Fund should continue to be established by the Director-General under Regulation 6.7 of the Financial Regulations of FAO, while the management of the World Food Programme, Fund should be governed by separate Financial Regulations to be proposed by the Executive Director of the World rood Programme and approved by the Committee on Food Aid Policies and Programmes after receiving advice from the United Nations Advisory Committee on Administrative and Budgetary Questions and the FAO Finance Committee, rather than by the Financial Regulations of FAO themselves,

Further noting that Financial Regulation 6.7 provides that Trust and Special Funds and voluntary contributions should be administered in accordance with the Financial Regulations of the Organization, unless otherwise provided for by the Conference:

Decides, for the purpose of Financial Regulation 6.7, that the World Food Programme Fund may be administered in accordance with separate Financial Regulations established by the Committee on Food Aid Policies and Programmes in accordance with the procedures set out in the Revised General Regulations of the World Food Programme.

(Adopted 26 November 1991)

Observations on the terms of reference of the committee on constitutional and legal matters (CCLM)

320. The Conference noted that the last four years had witnessed a marked increase in the number and importance of items which were referred to the CCLM. The CCLM had discussed the matter at its Fifty-seventh Session and had suggested that its Terms of Reference, as established in Rule XXXIV.3 of the General Rules of the Organization, could be usefully reviewed in due course.

321. The Conference also noted the personal remarks of the Chairman of the CCLM, Ambassador Fotis Poulides, that, in the light of his experience as Chairman for the last two biennia, the Committee had been restrained in many instances by the limits inherent in its Terms of Reference. He was, therefore, convinced that these Terms of Reference should be reinforced in order to allow the CCLM to deal with a broader range of subjects and to allow it to make recommendations on certain matters, as in the case of the Finance Committee.

322. Some Member Nations stressed that the composition of the CCLM should take due account of regional representation.

323. The Conference decided to request the Director-General to submit this matter to the CCLM for study and possible recommendations, and for a subsequent report to the Council. If the Council so decided, it could, in turn, submit proposals to the Twenty-seventh Session of the Conference in November 1993.

B. Administrative and financial matters

Headquarters accommodation
Emoluments of the director-general
Audited accounts 1988-89
Scale of contributions 1992 - 93
Financial position of the organization
In-depth study on the question of contributions outstanding and in arrears
Status of cash flow and other information on the financial position as of 31 October 1991
Increase in level of the working capital fund
Replenishment of the special reserve account for 1992-93
Commissary account - 1988-89: Authorized transfers to reserves

Headquarters accommodation

324. The Conference was informed on the progress being made in the three phases of the construction project:

325. The Conference expressed its appreciation for the Host Government's generosity and valuable support and, in particular, for the personal intervention of the Permanent Representative of Italy to FAO, His Excellency Ambassador Gian Luigi Valenza and his colleagues.

Emoluments of the director-general

326. The Conference adopted the following Resolution:

Resolution 11/91

Emoluments of the director-general

THE CONFERENCE,

Recalling that it last determined the salary and allowances of the Director-General at its Twenty-fourth Session in November 1987 by Resolution 22/87 at the time of his re-election to office,

Noting that the salary and allowances of the Director-General as determined in 1987 did not include any allowance for accommodation, while such allowances have been included in contracts for the Executive Heads of a number of comparable agencies in the UN system over the same period,

Further noting that the representation allowance of the Director-General was last increased in 1987 in order to take account of inflation and has not been revised since, despite the increasing erosion in the real value of that representation allowance due to inflation:

Decides that:

(Adopted 22 November 1991)

Audited accounts 1988-89

a) Regular programme 1988-89

b) UNDP 1988-89

c) World Food Programme 1988-89

327. The Conference reviewed the reports on the above accounts and the views expressed in the Report of the Ninety-eighth Session of the Council. It noted that in the Report for each of the three Programmes the External Auditor had expressed the opinion that the financial statements presented fairly the financial position at 31 December 1989 and the results of the operations for the biennium 1988-89, that they were prepared in accordance with the stated accounting policies, and that the transactions were in accordance with the Financial Regulations and legislative authority.

328. The Conference wished to express its appreciation for the work carried out by the External and Internal Auditors.

329. The Conference expressed the wish that a report be made to it on the follow-up of the recommendations of the External Auditor.

330. The Conference endorsed the views of the Council and adopted the following Resolution:

Resolution 12/91

AUDITED ACCOUNTS

THE CONFERENCE,

Having considered the report of the Ninety-eighth Session of the Council, Having examined the following Audited Accounts and the External Auditor's Reports thereon:

Adopts the above Audited Accounts.

(Adopted 26 November 1991)

Scale of Contributions 1992-93

331. The Conference took note that the Finance Committee and the Council had agreed that the FAO proposed Scale of Contributions for 1992-93 be derived again directly from the UN Scale of Assessments in force for the three-year period 1989-91.

The Conference accordingly adopted the following Resolution:

Resolution 13/91

Scale of contributions 1992 - 93

THE CONFERENCE,

Having noted the recommendations of the Ninety-ninth Session of the Council,

Confirming that as in the past FAO will continue to follow the United Nations Scale of Assessments subject to adaptation for the different membership of FAO:

(Adopted 26 November 1991)

Financial position of the organization

a) Status of contributions
b) Payment of contributions

a) Status of contributions

332. The Conference was informed that the financial situation of the Organization had further deteriorated due to the high amount of arrears outstanding (US$136 million) and the delayed payment of contributions by certain Member Nations. It was also informed that delayed payments had an adverse effect on the programme of the Organization especially when they related to the major contributors, two of which, for example, accounted for about 38 percent of the contributions to the budget. The Secretariat stated that this situation left the Organization with only two solutions: either to have adequate funds in the Working Capital Fund and Special Reserve Account or to resort to exercising the authority to borrow.

333. The Conference noted the status of contributions from Member Nations to the Budget of the Organization for 1991 (Appendix F). The Conference was advised that 64 Member Nations had made no cash payment at all in 1991, while 65 Member Nations still had arrears outstanding. A total of US$194 million was still outstanding, of which US$151 million was due from the largest contributor.

334. The Conference took due note of the intention of the largest contributor to pay to the Organization the sum of $34.9 million before the end of the year as final payment of its assessed contribution for 1991 and $22.6 million in payment of arrears by June 1992. This amount would be taken from a total of $92.7 million which the Government of the largest contributor had planned for 1992 for the payment of part of its arrears in contributions due to international organizations.

335. The Conference noted that until mid-November 1991, the rate of receipt of contributions had been favourable as compared to previous years. However, the amount of unpaid current assessments and arrears remained at an unprecedented level.

336. The Conference, therefore, reiterated its appeal to all Member Nations, particularly the largest contributor, to pay their outstanding contributions as soon as possible, in order to enable the Organization to ease its current liquidity problem.

b) Payment of contributions

337. In connection with the request submitted by Equatorial Guinea to the Director-General for a plan to liquidate its arrears, the Conference adopted the following Resolution:

Resolution 14/91

PAYMENT OF CONTRIBUTIONS - EQUATORIAL GUINEA

THE CONFERENCE,

Noting that the Government of Equatorial Guinea had made a proposal that it liquidate its arrears of contributions over a period of ten years commencing in 1992 in addition to paying each current contribution in the calendar year of assessment,

Decides that:

(Adopted 15 November 1991)

In-depth study on the question of contributions outstanding and in arrears

a) Measures to be considered to encourage prompt payment of contributions

338. The Conference noted the proposal submitted to the Finance Committee by the Director-General concerning the establishment of a discount scheme to encourage prompt payment of contributions. In compliance with the Council directives this proposal did not provide for penalties, but suggested the scheme described below which would provide a credit to Member Nations for early payment of their assessment.

339. The Conference also noted with approval that the Finance Committee and members of the Council generally agreed that the Organization should test the discount scheme on an experimental basis. It further noted that several members of the Finance Committee and Council had recommended that in determining the application of the rate of discount the Director-General should consult the Finance Committee.

Status of cash flow and other information on the financial position as of 31 October 1991

340. The Conference was informed that the Organization expected to spend the full amount appropriated for the Programme of Work and Budget of the 1990-91 biennium.

341. The Conference noted that in June 1991 the Director-General had to resort to internal borrowing of US$30 million, comprising US$18 million from the Working Capital Fund, and US$12 million from the Trust Funds Terminal Payment Fund to enable the Regular Programme to execute its approved programme, pending receipt of contributions. Furthermore, from July onwards the Director-General had been obliged to resort to external borrowing up to a maximum of US$55 million in October 1991. The Director-General had been able to repay US$45 million of external borrowing since the end of October, following the receipt of some contributions in October 1991.

342. The Conference was advised that the extent of further external borrowing required until the end of the year would depend on the timing and amount of contributions received from the major contributor. If the expected US$35 million of final payment of 1991 assessed contribution was not received from the major contributor early in December, then additional borrowing would be necessary. Moreover, as the remaining US$10 million of external borrowing was to be repaid from the expected receipts of US$35 million, additional funds would be needed not only for expenditures in late December but also for January 1992. This would entail additional external borrowing pending receipt of 1992 contributions.

Increase in level of the working capital fund

343. The Conference noted that despite the strong recommendations of the Finance Committee and the Council, the amount of assessed contributions outstanding had reached unprecedented levels and the Organization was faced with an increasingly serious cash flow situation.

344. The Conference was informed that the Director-General would use his authority to borrow only as a last resort. It was not always possible to resort to the Special Reserve Account, one of the major purposes of which was to protect the Organization against unfavourable movements in the Lira/US dollar rate of exchange from that established for the budget. In this biennium, this reserve had been exhausted leaving no margin to offset arrears of contributions. The majority considered it essential to provide for a more adequate Working Capital Fund as the first resort for the nonpayment of contributions.

345. The Conference reviewed the Director-General's proposal that the Fund should be increased to US$25 000 000. It was informed that this would bring it into line with other major UN agencies and would further strengthen the ability of the Organization to implement its Programme of Work without recourse to external borrowing. At this level, the Fund would represent 3.87 percent of the approved net budget for 1992-93.

346. The Conference noted that, in accordance with Financial Regulation 6.2 (b) the increase would have to be met by an additional assessment on Member Nations. As a result of the significant delays in the receipt of contributions, it was unlikely that a cash surplus would be realized at the close of the 1990-91 biennium from which the proposed assessment could be met.

347. Some Member Nations could not support the proposal, as it would involve a further assessment. Other Member Nations considered that the increase, which would involve an assessment on all Member Nations, would penalize those members who had paid their contributions in a timely manner. A few Member Nations, whilst not opposing the increase to US$25 million, which would be in line with Joint Inspection Unit (JIU) recommendations, could not agree to a special assessment. These Member Nations preferred that other measures be considered to fund increases in the Working Capital Fund, such as the application of cash surpluses. The Conference could review and amend the Financial Regulations to permit this if so required.

348. The majority of Member Nations, recognizing the need for a more adequate Working Capital Fund, supported the increase. Some of these expressed concern, however, that the additional assessment would put a further strain on the ability of Member Nations of developing countries to pay their contributions as well as those countries where this would create difficulties arising from budgetary procedures.

349. The Conference adopted the following Resolution:

Resolution 15/91

LEVEL OF THE WORKING CAPITAL FUND

THE CONFERENCE,

Recalling its Resolution 16/87 by which the level of the Working Capital Fund was fixed at US$20 000 000 as from 1 January 1989,

Regretting that in spite of the Council's appeals, the rate of receipts of contributions to the Budget have again seriously deteriorated and that this might reflect a continuing pattern,

Recognizing that the present level of the Working Capital Fund has enabled the Organization to continue to implement its Programme of Work and Budget without recourse to external borrowing several times in recent years,

Noting that the present level of the Working Capital Fund constitutes only 3.52 percent of the present Budget level and that this was lower than in other comparable organizations,

Having examined the recommendations of the Council,

Decides that

(Adopted 26 November 1991)

Replenishment of the special reserve account for 1992-93

350. The Conference reviewed the proposal of the Director-General for the replenishment of the Special Reserve Account for 1992-93.

351. The Conference was informed that the demands on the Special Reserve Account in the current biennium, to deal with currency losses, would amount to over US$26 million. As the balance in the Special Reserve Account was limited to US$19.7 million, the entire balance would be used to cover these losses, and the remainder would have to be charged to the General Fund. As a result, the 1992-93 biennium would begin with no resources in the Special Reserve Account. The implementation of the next Programme of Work and Budget would, accordingly, have no protection, unless measures were taken to replenish the Account.

352. The Conference reviewed the options for replenishment of the Special Reserve Account, as provided for in Conference Resolution 13/81, and examined the proposal by the Director-General for the replenishment of the Account by a special assessment on Member Nations of US$28 million.

353. Several Member Nations could not support the proposal for a special assessment, many of them preferring that any replenishment be effected from payments of arrears of contributions. A few Member Nations expressed reservations on the very need for a Special Reserve Account. Whilst accepting that some protection of the Programme from fluctuations in exchange rates was necessary, several Member Nations considered that further study was needed on alternative mechanisms that were available.

354. Then, the Conference requested that the Finance Committee make a further study of alternative mechanisms to protect the Programme of Work and Budget from exchange rate fluctuations.

355. The majority of the Conference accepted the principles of the case for replenishment of the Special Reserve Account, attached importance to the Account having the requisite level of resources to fulfill its statutory purposes and supported the proposal of the Director-General.

356. The Conference adopted the following Resolution:

Resolution 16/91

REPLENISHMENT OF THE SPECIAL RESERVE ACCOUNT

THE CONFERENCE,

Noting that the Special Reserve Account has been fully exhausted in the biennium 1990-91, as a result of the negative variance on staff costs due to the decrease in the Lire/US dollar exchange rate from the budget rate of Lire 1 335,

Recalling Resolution 13/81 in which it decided that such portion of the cash surplus in the General Fund at the end of a biennium as is required to bring the level of the Special Reserve Account to 5 percent of the effective working budget for the subsequent biennium shall be withheld and credited to the Special Reserve Account,

Noting that at the end of the biennium 1990-91 there will be a deficit in the General Fund,

Considering that the implementation of the Programme of Work and Budget adopted by the Conference for 1992-93 is at peril without the protection provided by a solvent Special Reserve Account, in view of the continued delays in payment by some Member Nations, and in particular the largest contributors,

Concerned by the level of contributions outstanding from the largest contributor, both in current assessments and in arrears, and the settlement of these possibly extending over many years,

Conscious of the substantial claims on the arrears of contributions for the elimination of the deficit in the General Fund to be carried forward to 1992, and for the restitution of advances from the Working Capital Fund:

(Adopted 26 November 1991)

Commissary account - 1988-89: Authorized transfers to reserves

357. The Conference noted the views expressed by the Hundredth Session of the Council and adopted the following Resolution:

Resolution 17/91

AUTHORIZED TRANSFERS TO RESERVES

THE CONFERENCE,

Having noted that over the past years the Commissary had obtained specific authorization to establish certain reserve accounts, which are reflected in the annual financial statements,

Recognizing that a minor amendment is required to the second article of the Conference Resolution 16/89 to give recognition to the practice of distributing Commissary net profits to the Staff Welfare Fund after setting aside for any necessary reserves,

Decides to adopt the following recommendation (to amend the second article of the Conference Resolution 16/89):

(Adopted 26 November 1991)

C. Personnel matters

Statement of staff representatives
Chances in salary scales and allowances
Statistics of personnel services
Recent developments in the activities of the International Civil Service Commission (ICSC) and the UN joint staff pension board

Statement of staff representatives

358. The Conference welcomed the statement of the representatives of the staff associations and noted with concern the reported deterioration of the level of salaries and pension benefits.

359. The Conference recognized that the staff was the most valuable asset on which the successful implementation of the Organization's programme depended. It endorsed the view expressed by the staff representatives that it was essential that the Organization be able to recruit and retain high quality staff. To this end, the Conference urged the Member Nations to take steps to ensure that they adopt a strong stand in support of issues concerning the remuneration and pensions benefits of staff in the specialized agencies in the appropriate UN fore.

360. The Conference commended the Director-General for his continued perseverance and efforts in the various fore to improve conditions of service of staff. Recognizing the critical situation in respect of remuneration of staff and its negative consequences, it urged that the strong concern expressed by the Conference be brought to the attention of the General Assembly and its Fifth Committee and requested that a status report be prepared for the Hundred and second Session of the Council on any progress which had been achieved towards alleviating the described conditions.

Chances in salary scales and allowances

361. The Conference noted the developments in conditions of service of the staff, which had been reviewed by the Council at its Hundredth Session. With regard to the post adjustment level for Rome, the Conference was informed that five percent of post adjustment had been consolidated into the base salary in March 1991 on a "no-gain no-loss basis" (i.e., the increase in base salary had been offset by an equivalent decrease in post adjustment). In June 1991, a new class of post adjustment had been granted to reflect local inflation. The Conference was also informed that an increase in the salaries for the General Service Category had been granted effective 1 June 1991, in accordance with the methodology approved by the Council at its Eighty-second and Eighty-sixth Sessions.

Statistics of personnel services

362. The Conference was informed that the Council had reviewed in detail the statistics relating to the number of established posts and other forms of personnel services and noted the progress in the presentation, reliability and detail of the information provided.

Recent developments in the activities of the International Civil Service Commission (ICSC) and the UN joint staff pension board

a) International Civil Service Commission
b) UN joint staff pension board

a) International Civil Service Commission

363. The Conference was informed of the recommendations presented by the International Civil Service Commission (ICSC) to the Forty-sixth Session of the General Assembly (1991) with regard to personnel issues, which had been reviewed by the Council at its Hundredth Session, and it noted the consequent changes regarding the conditions of service of staff in the Professional and higher categories. The Conference noted that these recommendations were still subject to review and approval by the General Assembly.

364. The Conference noted the ICSC recommendation to increase the current net base salary scale for Professional and higher categories by 8.6 percent through a consolidation of post adjustment classes on 1 March 1992 with a simultaneous reduction of post adjustment levels ("no-loss, no-gain"). It also noted the ICSC recommendation that, in order to avoid a prolonged freeze of post adjustment, the General Assembly rescind its former decision requiring the Commission to manage the margin on a five-year period so that the average margin would be around the mid-point (115) of the range. It also noted that the recommendation that partial post adjustment be granted within the maximum 120 of the range of the margin.

365. The Conference also noted the ICSC recommendation to grant an increase in the net remuneration level of Assistant Secretaries-General/Under-Secretaries-General (ASGs/VSGs) in the range of seven to eleven percent to reflect the improved conditions of the officials of the comparator civil service (the Us Federal Civil Service) at equivalent grade levels, and to authorize Executive heads to decide on approval of housing subsidy arrangements for such staff.

b) UN joint staff pension board

366. The Conference noted that the Council had been informed of the activities of the UN Joint Staff Pension Board and that at the Forty-third Session of the Pension Board in July 1991, two agenda items had been of particular importance to organizations and staff: the review of modifications to the pension adjustment system and the comprehensive review of the pensionable remuneration and consequent pensions of the staff in the General Service and related categories.

367. The Conference was informed that the Pension Board had decided to recommend to the UN General Assembly that the pension adjustment system be modified to provide an income replacement ratio reasonably close (but not identical) to that in New York. In order to achieve this, the Board had recommended that some parameters of the existing formula be modified. The Pension Board had also recommended that the effective date of the proposed modification be 1 April 1992 and that the transitional measure introduced with effect from 1 January 1991 should expire on 31 March 1992 as agreed in 1990.

368. The Conference was informed of the Director-General's concerns regarding the serious problems of staff pension in the Professional and higher categories, and supported his initiatives in seeking appropriate modification to preserve the stability of and to strengthen the pension system. The Conference was informed that the FAO Staff Pension Committee had examined the entire issue of long-term modifications to the pension adjustment system and that, while joining the consensus on the modification proposed by the Pension Board, had expressed reservations regarding the longer-term viability of the proposed modification.

369. The Conference was informed that the Pension Board had concluded that there was no workable alternative available for immediate implementation to the use of Universal staff assessment rates for calculating pensionable remuneration of General Service staff. The Pension Board did request, however, that the ICSC and the Pension Board in close cooperation pursue studies which would include, inter alia, the feasibility of determining General Service pensionable remuneration and/or pensions by reference to the best prevailing practices in each locality.

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