United Nations

GA/L/3249
6 October 2004

Technical Support Urged for Developing Countries to Build Infrastructure for Applying Trade Law Instruments

Legal Committee Concludes Review of UNCITRAL Report; Commission Chairman Seeks Fullest Support for Its Work

NEW YORK, 5 October (UN Headquarters) -- Developing countries need technical support to build the infrastructure to implement instruments on international trade law, the Chairman of the United Nations Commission on International Trade Law (UNCITRAL) told the Sixth Committee (Legal) this morning as it concluded its deliberations on the report of the Commission’s recent thirty-seventh session (14-25 June, New York).

Continuing, Wisit Wisitsora-At (Thailand) said giving technical assistance and travel funding would enable developing countries to participate fully in UNCITRAL’s work.

Sri Lanka’s representative said developing countries needed assistance to enact domestic laws based on the model laws formulated by UNCITRAL. That was important because governments, businesses and donor agencies all accorded great importance in a globalized world to the formulation of legal frameworks for international trade and investment, as part of a competitive strategy.

South Africa’s speaker said UNCITRAL’s training and technical assistance activities were as important to developing countries as the Commission’s harmonizing and unifying of international trade law.  Focus should be aimed at promoting the existing model laws and conventions. Also, developing country chambers of commerce should receive assistance. Africa should be highlighted in the expanded training and technical assistance plan being formulated now. A fair international legal trade system contributed to development and poverty eradication.

Speaking on the Legislative Guide on Insolvency Law that had been adopted during the Commission’s session, Indonesia’s representative said it would serve as an important legal reference for developing countries in dealing with insolvency in their private sectors. The World Bank, at its current annual meeting, was considering the Guidelines together with a revision of its own principles on the matter.

Also speaking this morning on the Commission’s report were the representatives of Belarus, Singapore, Sweden, Spain, Nigeria, Kenya, Gabon, Russian Federation, Mexico, Republic of Korea, Venezuela and Thailand.

In addition this morning, draft decisions were introduced on the granting of observer status in the General Assembly to four organizations: Shanghai Cooperation Organization, Collective Security Treaty Organization, Southern African Development Community (SADC), and the Economic Community of West African States (ECOWAS).

Speaking on these issues were China, Russian Federation, Kyrgyzstan, Zimbabwe, Kazakhstan, Ghana and Nigeria.

The Committee will meet again in plenary at 10 a.m. on Thursday, 7 October, when it is expected to take up the report of the Special Committee on the Charter.

Background

The Sixth Committee (Legal) met this morning to conclude its consideration of a report by the United Nations Commission on International Trade Law (UNCITRAL) on its thirty-seventh session (14-25 June, New York).  The Committee was also expected to hear the introduction of draft resolutions on requests for granting of observer status in the General Assembly for four organizations. (For background on the UNCITRAL report, please see Press Release GA/L/3248 of 4 October.)

Draft Decisions

The Committee had before it a draft decision requesting observer status in the General Assembly for the Shanghai Cooperation Organization (document A/C.6/59/L.3).  A background report (document A/59/141) states that the Beijing-based international organization was established in 2001 by Kazakhstan, China, Kyrgyzstan, Russian Federation, Tajikistan and Uzbekistan.  Its principal concerns are regional peace and security along with economic development.

A draft decision before the Committee requests observer status in the General Assembly for the Southern African Development Community (SADC) (document A/C.6/59/L.5).  A background report (document A/59/142) states that the Gaborone, Botswana-based international organization allows admission of new members and presently comprises:  Angola, Botswana, Democratic Republic of the Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.  Its principal aim is to promote sustainable socio-economic development at all geographic levels.

Another draft decision requests observer status in the General Assembly for the five-member Collective Security Treaty Organization (document A/C.6/59/L.4).  A background report (documents A/59/195 and Corr.1) states that the regional international organization established in 2003 comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russian Federation and Tajikistan.  Its primary aim is to promote cooperation for regional and global security.

Finally, a draft decision requests observer status in the General Assembly for the Economic Community of West African States (ECOWAS) (documentA/C.6/59/L.6).  The decision is sponsored by Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

Statements

ANDREI N. POPKOV (Belarus) said his country had been reviewing its insolvency laws, and completion of the process would enable Belarus to harmonize its legal systems with others globally.  It had adopted some of UNCITRAL’s conventions.  Belarus supported the central role of UNCITRAL in harmonizing the rules of international trade.  It had confirmed that role as a member of UNCITRAL.  It stressed the importance of technical assistance by UNCITRAL to countries with economies in transition in the field of training personnel through seminars.  In that respect, he underlined the importance of extrabudgetary funds and donor support to the Commission. Belarus welcomed UNCITRAL’s advisory programmes in the areas of international trade.

He also called for increased partnerships between UNCITRAL and other international organizations involved in international trade.  Belarus had particular interest in UNCITRAL’s current programme of work, particularly in the area of electronic commerce.  He also stressed the need for guidelines in such commerce.

YVONNE OW (Singapore) said her country had participated keenly in UNCITRAL’s work and had adopted many of its conventions and model laws.  She hoped the new Legislative Guide on Insolvency Law would be useful to developing countries in modernizing their insolvency regimes.  Singapore also hoped the Working Group on Transport Law would complete its work on the draft instrument on carriage of goods in time for submission to UNCITRAL at its thirty-ninth session in 2006.  Singapore was pleased that the Working Group on Procurement had recently met to consider issues for review in the Model Law on Procurement of Goods, Construction and Services, as well as other possible future work in the area of public procurement.

She said, her country, with its limited resources, would continue to actively support UNCITRAL.  She cited several UNCITRAL projects her country was involved in, such as the Working Group on Electronic Commerce and that on procurement.

JERZY MAKAROWSKY (Sweden), speaking also for the four other Nordic countries (Denmark, Finland, Iceland and Norway), welcomed the Commission’s work, particularly the important achievement on the insolvency guidelines.  The Commission was making much progress in its working groups, he said.  It was satisfying that the Commission would be able to carry out its ambitious plans for developing international legal instruments.

He said the enlarged Commission was welcome.  The increased membership would promote wider knowledge of the Commission’s work and would ensure acceptance of texts by States.  The distribution of seats should reflect the increased interest and should ensure fair balance in the Commission’s future work.  The discussion must continue on financing to increase developing country participation.

JORGE ROMEU (Spain) said the instrument on electronic documents was eagerly awaited.  The legislative guidelines on insolvency would be of particular help to developing countries.

He said he was pleased with the strengthening of UNCITRAL.  It would help guarantee the broadest acceptance of the Commission’s work.  On the question of limiting the length of the Commission’s reports, he said the extreme complexity of the instruments under review made it impossible to cover the subjects in short reports.  As for improving the Commission’s working methods, he said consideration should be given to having subcommittees take on some of the activity of the Working Group work.

OKON EFIONG ISONG (Nigeria) said the UNCITRAL report reflected the broad applicability of the Commission’s work, not only on aspects of electronic commerce but also in its training and implementation activities.  The insolvency instrument was a milestone in the Commission’s work; it would strengthen the legislative basis of cross-border trade and increase its much-needed transparency.

He said his country recognized the importance of foreign investment and had instituted an investment promotion and protection plan.  It included provisions on environmental observance and quality review. Electronic commerce was of particular concern to developing countries, particularly in light of recent Internet fraud.  On the draft instrument on carriage of goods to be completed by 2006, it should be kept in mind that the intercessional group had merit, but there were also drawbacks since developing countries had less access to e-mail.  The draft instrument should not be compromised in the rush for completion.

He said he supported revamping of the public procurement regime, but caution should be taken to preserve the proven usefulness of the provisions.  The Commission should also continue to pursue the issue of commercial fraud.  Since no money had been given to the Trust Fund to enable developing world participation in the Commission’s work, such funding should be made a provision in the regular budget.  Non-participation weakened the Commission’s work and the capacity of developing countries to implement its instruments.

JONNY SINAGA (Indonesia) said he believed the adoption of the Legislative Guide would serve as an important legal reference for developing countries in dealing with insolvency in their private sectors.  He said it was refreshing to note that the World Bank, at its current annual meeting, would consider the Guidelines together with the revision of the Principles and Guidelines for Effective Insolvency and Creditors Rights System.

His Government welcomed the suggestion that UNCITRAL’s secretariat would compile a list of features common to typical fraudulent schemes found in financial and trade practices, and disseminate the list to all Member States.  Expansion of UNCITRAL membership would provide broad participation of States with different legal systems, enabling them to contribute to the legislative process in the Commission.  Growing membership reflected the need for UNCITRAL to be more efficient in the conduct of its work.  He believed the upgrading of the Commission’s secretariat to a division would help it meet that objective.

LAZARUS O. AMAYO (Kenya) noted the significant progress the Commission made during its thirty-seventh session in which his country participated.  He commended the Commission on the finalization of the Legislative Guide to Insolvency Law and the progress made by its working groups in their meetings.  He said the Guide offered a comprehensive framework for States to adapt their insolvency regimes.  Harmonized insolvency regimes would help developing countries compete favourably in the international credit markets.

He said Kenya had modelled its commercial arbitration laws on the UNCITRAL texts.  Kenya attached great importance to work on electronic commerce.  He added that an international regime to govern transaction by electronic commerce was long overdue, and stressed the need to address the issue of the digital divide between developed and developing countries.

RUSSEL MEZEME-MBA (Gabon) said the insolvency instrument assisted the reader in applying the provisions in the national context.  However, it would have been more useful to specify the type of economy being addressed within the guidelines themselves, so as to cut down on the range of choices from which countries must choose the approach appropriate for them.

Speaking on the need to harmonize trade law and steps being taken in Africa to achieve that objective, he said the Committee’s busy and diverse schedule presented a problem for some delegations.  Support should be given to delegations operating without full Mission support so as to enable travel and participation.

VIJAYASIRI PADUKKAGE (Sri Lanka) said globalization had caused governments, the business community and donor agencies to accord ever more importance to the formulation of efficient legal frameworks for international trade and investment, as part of a competitive strategy.  The UNCITRAL had a great and demanding role in the process.  Measures must be taken to provide technical assistance to countries that did not have the resources to enact domestic laws in accordance with model laws.

He said he was pleased with the strengthening of UNCITRAL.  Private-public partnership was relevant to the Commission’s work.  Implementing UNCITRAL texts would help achieve the Global Compact goals of inviting the corporate sector to promote United Nations principles.

SIVUYILE MAQUNGO (South Africa) said the Commission’s work in finalizing a complex Legislative Guide on Insolvency Law, while also considering another

12 substantive items during its session, was exemplary.  Its role in progressively harmonizing and unifying international trade law was important, but to developing countries its training and technical assistance activities were equally important.  There should be more focus on programmes aimed at promoting the existing model law and conventions, and to assisting developing country chambers of commerce.

He said he was pleased that a work programme and timetable were being prepared for an expanded training and technical assistance plan.  Africa should be highlighted and the resources made available, including to the Trust Fund from UNCITRAL symposia.  A fair and predictable legal system encouraged trade and contributed to development and poverty eradication.  The UNCITRAL contributed immensely.

STEPAN KUZMENKOV (Russian Federation) said he was pleased with the progressive tone of the insolvency guidelines that would enable businesses to be more flexible.  The guidelines also defined and clarified judicial issues related to insolvency and to creditors.  The subject of public procurement was more relevant now than ever.  Many changes had occurred since the original instrument on the subject was completed in 1994.

ALFONSO ASCENCIO (Mexico) welcomed the completion of the Legislative Guide to Insolvency Law and believed its provisions were highly important for the establishment of an international regime for harmonizing and developing unified rules for the creation of equitable and more transparent insolvency laws or legislation.

He welcomed the progress made by the Working Group on arbitration.  The international community would benefit from work in the area of arbitration.  His delegation attached importance to electronic commerce.  It was important that the Working Group work concluded its task.  A consensus would be necessary.  The Group’s next meeting this month would be crucial.  He believed that time should not be “a straitjacket” in the conclusion of the Working Group’s task.  There was need for an effective framework for transparency in procurement.

SHIN YOO-CHUL (Republic of Korea) said he was confident that the UNCITRAL Legislative Guide on Insolvency Law would immeasurably aid in the establishment of an efficient and effective legal framework to address the financial difficulties of debtors.  He expressed satisfaction with the progress made by the Commission’s working groups on arbitration, electronic commerce and security interests.

He said his delegation had concerns, however, about the issue of transport law.  He said the problems concerning the interests of shippers over those of carriers would be resolved at forthcoming sessions of the Working Group on the topic.  He suggested a fresh look into the work of that Working Group.

IMERIA NUÑEZ (Venezuela) expressed satisfaction about her country’s new membership of UNCITRAL.  She said her Government was engaged in efforts to have UNCITRAL texts studied by relevant authorities nationally.  It supported efforts by UNCITRAL to achieve coordination with relevant bodies within the United Nations system.  It was important that the Commission supported countries in need of technical assistance and travel grants to send representatives to its meetings.

ITTIPORN BOONPRACONG (Thailand) said the Legislative Guide was a well balanced text which took account of all stakeholders whether debtors, creditors or employees.  His delegation believed that together with the annexed Model Law on Cross-Border Insolvency and Guide to Enactment, the Guide would help promote economic development and investment, as well as availability of credits in the financial system. He encouraged further coordination and cooperation with the World Bank and the International Monetary Fund to facilitate the development of a unified international standard in the area of insolvency law.

He said his delegation shared the Commission’s view that its work should also be directed towards promoting the adoption and uniform application and interpretation of its texts, particularly by training and technical legislative assistance, as well as collection and dissemination of information related to UNCITRAL texts.

WISIT WISITORA-AT (Thailand), UNCITRAL Chairman, called attention to two appeals speakers had made in statements.  One was for the provision of technical assistance to developing countries to enable them to develop the infrastructure needed for implementing the Commission’s instruments.  The other was for contribution to the travel Trust Fund to ensure developing country participation in the Commission’s work.

Introduction of Drafts

The representative of China introduced the draft on observer status for the Shanghai Cooperation Organization in the General Assembly (document A/C.6/59/L.3).

Representatives of Kyrgyzstan, Russian Federation and Kazakhstan spoke in support of the draft.

The representative of Botswana introduced the draft on observer status in the General Assembly for the Southern African Development Community (SADC) (document A/C.6/59/L.5).

The representative of Zimbabwe spoke in support of granting observer status to SADC.

The draft on observer status for the Collective Security Treaty Organization (document A/C.6/59/L.4) was introduced by the representative of Kazakhstan.

Speaking in support of granting the observer status were the representatives of Kyrgyzstan and the Russian Federation.

Finally, the representative of Ghana introduced the draft on observer status for the Economic Community of West African States (ECOWAS) (document A/C.6/59/L.6). He referred to the background report on the Nigeria-based international organization (document A/59/232) and said the United Kingdom had joined the list of sponsors for the draft.

The representative of Nigeria spoke in support of the draft.

* *** *