GA/AB/3693
24 October 2005
UN Pay and Benefits Review, New Contract Framework among Issues, as Budget Committee Debates Civil Service Commission Report
NEW YORK, 21 October (UN Headquarters) -- As the Fifth Committee (Administrative and Budgetary) continued its consideration of the report of the International Civil Service Commission (ICSC) this morning, a wide range of issues was discussed, among them the ongoing review of the pay and benefits system; the proposed framework on new contractual arrangements within the United Nations; a new scheme for making payments under education grant, mobility and hardship allowances; and the decision to increase the level of hazard pay to internationally recruited staff from $1,000 to $1,300, effective 1 January 2006.
Jamaica's representative, speaking on behalf of the "Group of 77" developing countries and China, welcomed the decision of the Commission to simplify and modernize the system of compensation, while ensuring transparency and equity for similar work being performed. Simplification of the system should reduce administrative costs and increase efficiency, she said.
She also addressed the ongoing pilot study on pay-for-performance and broadbanding (a strategy for salary structures that consolidate a large number of pay grades into a few "broad bands"), saying that updates on the study should focus on its effect on staff morale in the volunteer organizations. She added that the Group was prepared to consider the proposed system of continuing, fixed-term and temporary contracts in the United Nations common system, but also emphasized the importance of job security for staff members, saying that it was vital to ensure impartiality, independence and integrity of the staff.
Japan's representative welcomed the study and supported in general the introduction of a new system as a means of aligning the salaries and benefits with the staff's performance. He said a fair and reliable performance-appraisal system was indispensable in that regard, and measures to prevent personnel costs from soaring were required.
China's representative said that appointments of a permanent character should be gradually reduced and cautioned against the new type of continuing contracts becoming de facto permanent ones. Granting continuing contracts that would last indefinitely after only one performance evaluation would give it a very strong "permanent flavour". Therefore, he supported the proposal of the Commission that periodic review of the continuing appointments should be carried out against clear criteria, with the interests of the Organization in mind. At the same time, for the sake of enhancing flexibility of management, he welcomed the expansion of the use of fixed-term contracts, to keep the "exit" channel open, so that people could move up or down the hierarchy.
Insisting that its staff was the common system's most valuable asset, Argentina, speaking on behalf of the Rio Group, took note of the intention of the ICSC to continue studying the salary conditions of different civil services of Member States to make the Organization attractive to the most outstanding and competent individuals. It was necessary to strive for establishing the best possible conditions.
The representative of Canada, who also spoke on behalf of Australia and New Zealand, noted that United Nations salaries still lagged behind the mid-point of the agreed range in relation to the United States civil service. In that connection, some had suggested that the Assembly should increase salaries to close that gap over time. On the other hand, Member States had been informed that Germany and Switzerland would no longer be studied as possible replacements for the United States as a comparator, because they were tightening the benefits they offered, linking salary increases to performance, lengthening working hours and capping pension benefits. Those measures were not directly relevant in the United Nations system, except as they shed light on the change in compensation policy among civil services that in the United Nations system had been considered among the most generous in the world.
Several speakers also asked for additional clarification in connection with the re-designation of Senior Management Service as the Senior Management Network, as endorsed by the Chief Executives Board for Coordination High-Level Committee on Management last April.
The representative of the Russian Federation expressed scepticism regarding that project, saying that it was not clear what the term "Senior Management Network" meant and why it needed to be established in the first place. Did that mean that staff not belonging to management could also create their own networks? In fact, the goal of "bringing together senior managers throughout the system", as described in paragraph 5 of the Secretary-General's report (document A/60/209), could be achieved without creating a "network". He also expressed concern that the project would take up a large share of limited resources designated for professional training within the organizations of the United Nations system.
Many delegations expressed strong support for the independence of the Commission, which had demonstrated its fundamental usefulness throughout the years. Lauding the ICSC as a valuable human resources management tool, Algeria's representative expressed hope that it would be closely involved in the promotion of moral integrity and ethics. Those aspects of the reform were particularly important, he said.
Also this morning, the Committee continued its consideration of the Secretariat's report on the implementation of the recommendations of the Office of Internal Oversight Services (OIOS) by the Organization's regional commissions.
Also taking the floor today were representatives of Nigeria, Cuba and Republic of Korea. Responses to comments and questions from the floor were provided by Chairman of the ICSC Mohsen Bel Hadj Amor, and Acting Chief of the Regional Commissions' New York Office Kazi A. Rahman.
The Committee will meet again at 10 a.m. Monday, 24 October.
Background
The Fifth Committee (Administrative and Budgetary) continued its consideration of the United Nations common system today. (For background information, please see Press Release GA/AB/3692 of 20 October.)
Statements
SHANNON-MARIE SONI (Canada), also speaking on behalf of Australia and New Zealand, said that the launching of the review of the pay and benefits system during the fifty-seventh session had been timely. The pilot study of broadbanding and pay-for-performance was a step to strengthening performance-based human resources management. She looked forward to a clarification of concerns raised by a volunteer organization about the design and broadband groupings. She also wanted to know what changes were needed to ensure relevant and applicable results.
Welcoming the Commission's decision to separate mobility and hardship allowances from each other and from a direct link to the salary scale, she said she would be interested in learning more about how the balance had been struck between incentives for mobility and hardship and how the Commission would assess whether the incentives were having the desired effect. It would also be helpful to have a clearer understanding of what the triennial reviews would do. There were, indeed, many grants or allowances, including those for education, mobility, hardship, hazard, assignment, non-removal and termination. In that connection, she wondered how the review of each piece led the Organization to a better understanding of how the sum of them cohered as a modern, competitive and streamlined compensation package.
The United Nations had a policy basis for salaries -- the United States civil service, she continued. What was the analogy when it came to benefits? The Assembly had asked that question very clearly last year. She noted with concern the Commission's non-response, found in paragraph 270 of its report, as well as on the information regarding the practices of other civil services and international organizations in paying for tertiary education for dependants.
While pleased that the Commission had found that field-based organizations were trying to harmonize among themselves, she also wanted to know why there was no common-system approach to addressing the needs of non-family duty stations. Given the growth of field operations in non-family settings and the increasingly integrated engagement of United Nations entities in complex peace operations, it would be important to have a coherent approach, based on a shared understanding of relevant principles, costs and benefits.
United Nations salaries still lagged behind the mid-point of the agreed range in relation to the United States civil service, she said. In that connection, some had suggested that the Assembly should increase salaries to close that gap over time. On the other hand, Member States had been informed that Germany and Switzerland would no longer be studied as possible replacements for the United States as comparator country. And why? Because they were tightening the benefits they offered, linking salary increases to performance, lengthening working hours and reducing or capping pension benefits. Those national measures were not directly relevant in the United Nations system, except as they shed light on the ferment and change in compensation policy among civil services that in the United Nations system had been considered among the most generous in the world.
She was pleased that the work on contractual arrangements had at last produced a proposal. She had no objection to the model that had been proposed, but would seek further information in informals, along with information on other issues raised in the report. She also recalled that the Assembly had not concluded its work on the report of the panel on the strengthening of the international civil service. However, at this point, the recommendations of the panel were more pertinent than even. The International Civil Service Commission (ICSC) occupied a strategic position in the United Nations system and could help shape the international civil service of tomorrow.
NORMA TAYLOR ROBERTS (Jamaica), speaking on behalf of the "Group of 77" developing countries and China, said the International Civil Service Commission (ICSC) was the essential component for the success of all participating organizations in the United Nations common system. She looked forward to considering the annual updates of the Commission on the pilot study on broadbanding/reward for contribution. The updates should provide solid indications of whether the goals and objectives envisaged were being achieved. The updates should focus on how the pilot study affected the morale of the staff in the volunteer organizations.
She said she welcomed the decision of the Commission to simplify and modernize the system of compensation, while ensuring transparency and equity for similar work being performed. She expected the simplification of the system would reduce administrative cost and increase efficiency. On the ICSC work to develop new contractual arrangements, she wanted to emphasize the importance of the concept of job security for the staff members -- which was vital to ensure impartiality, independence and the integrity of the staff. Based on that concept, the Group would consider the proposed contractual arrangements developed by the Commission. With respect to the Senior Management Network, the Group would require additional clarification on the question of the network's role in strengthening the management capabilities across the United Nations system.
ALEJANDRO TORRES LEPORI (Argentina), speaking on behalf of the Rio Group, stressed the importance of the common system and the fundamental role of the ICSC in regulating and coordinating the conditions of service in the organizations that were associated to the common system. He took note with appreciation of the determination of the Commission to address the issue of contractual arrangements by adopting a framework of guidelines that distinguished between three kinds of contracts: continuing, fixed-term and temporary. He congratulated the Commission for coming up with a framework that was consistent and gave organizations enough flexibility.
He also appreciated the decisions regarding the hazard pay and more precise criteria for its payment, including situations where staff were exposed to life-threatening diseases. He followed with interest the intention of the ICSC to incorporate innovations in relation with mobility and hardship allowances, which were no longer to be linked to the base/floor salary scale. It would also be following carefully the development of the proposals related to education grants.
He took note of the intention of the ICSC to continue studying the salary conditions of different civil services of Member States to make the Organization attractive to the most outstanding and competent individuals. The staff was the most valuable asset of the common system; therefore, it was necessary to strive for establishing the best possible conditions. He also expressed strong support for the independence of the Commission, which had demonstrated its fundamental usefulness throughout the years.
SHEN YANJIE (China) expressed appreciation for the progress made by participating organizations in the ICSC pilot study on broadbanding. As for the problems that had arisen in testing the models and the extension of the scope of the test, he reiterated that the modalities of the test should be strictly in line with the direction decided upon through Assembly resolutions and ICSC decisions. At the same time, the tests should also incorporate corresponding scientific and rational performance appraisal criteria and evaluation systems, so as to reflect the spirit of performance management and make the performance pay easier to operate. China encouraged the Commission to strengthen its communications with the participating organizations and other parties concerned.
On contractual arrangements, he said that appointments of a permanent character should be gradually reduced. Therefore, using continuing appointments to replace permanent ones should truly reflect the spirit of performance management, so as to avoid the new type of contracts becoming de facto permanent ones. Granting continuing contracts that would last indefinitely after only one performance evaluation would give it a very strong "permanent flavour". Therefore, he supported the proposal of the Commission that periodical review of the continuing appointments should be carried out against clear criteria, with the interest of the Organization in mind. Continuing appointments should have a high threshold of years of service. Once granted, periodical reviews should follow, against clearly specified criteria and through open and transparent procedures. At the same time, for the sake of enhancing the flexibility of management, he welcomed the expansion of the use of fixed-term contracts, to keep the "exit" channel open, so that people could move up or down the hierarchy.
In connection with the proposal to re-designate the Senior Management Network, he said it was necessary to enhance the management and governing capacity of senior management officials and to strengthen effective cooperation at all levels. However, the development of corresponding management tools to facilitate the members to fulfil their management functions should proceed within the limit of available resources. It should not lead to requests for additional posts or budgetary resources.
Turning to the report of the panel on strengthening the ICSC, he expressed concern over the fact that the panel had made policy recommendations outside its mandate. The ICSC was an independent expert body under the General Assembly and, as such, it was playing a core role in defining and coordinating the conditions of service for the common system. In modernizing the human resources management, the Assembly, the ICSC and administrative heads of agencies all had an important role to play. It was, therefore, extremely important to enhance their cooperation and mutual trust.
ANDREY V. KOVALENKO (Russian Federation) said the pilot study to test a new model for staff remuneration had shown that problems existed with the possible introduction of a new system of pay and benefits. There was not an adequate system for appraising staff in the Secretariat and other Organizations and there was the risk of greater expenditures to maintain such a remuneration system.
He said that, before the General Assembly made a decision on a new system of remuneration, the Commission should have clearly demonstrated that the new system would produce greater productivity and was more effective than the existing one. It could be more effective if combined with greater flexibility in the contract system. He said greater authority was needed for managers to manage their staff, including the hiring and firing of employees.
He had concerns with other proposals included in the ICSC report, including the proposed framework on new contractual arrangements within the United Nations and a recent decision to separate mobility and hardship allowances from each other and the salary scale.
Regarding the proposal to re-designate the Senior Management Service as the Senior Management Network, he was sceptical about the project and said it was not clear what the term "Senior Management Network" meant and why it needed to be created. Did that mean that staff not belonging to management could also create their own networks? In fact, the goal of "bringing together senior managers throughout the system", as described in paragraph 5 of the Secretary-General's report (document A/60/209), could be achieved without creating a "network". He was also concerned that the project would consume a large share of the limited resources designated for professional training within the organizations of the United Nations system.
AKIRA YAMAMOTO (Japan) said he welcomed the ICSC's ongoing effort to implement the pilot study on broadbanding/pay-for-performance. He supported, in general, the introduction of a broadband system and pay-for-performance, as a means of aligning the pay and benefit system with the staff's performance. He said a fair and reliable performance appraisal system was indispensable and measures to prevent personnel costs from soaring were also required. He added that Japan welcomed the ICSC decision on the mobility/hardship allowance and the contractual arrangements.
Concerning the entitlements of internationally recruited staff serving in non-family duty stations, he had serious concerns about an Organization proposal
-- endorsed by the ICSC -- to change from the mission subsistence allowance rates to the after-60-day daily subsistence allowance. That was used as the basis for calculating the special-operations living allowance under the special-operations approach. He said mission subsistence allowance rates were subject to reduction to reflect accommodations and/or food provided by the Organization, and that point should be fully considered when addressing the issue.
ABDELATIF DEBABECHE (Algeria) said that he agreed fully with the Group of 77 and China. The ICSC was a valuable tool in promoting and implementing the use of human resources on the Organization. At a time when the issues of moral integrity and ethics were gaining attention, he hoped the Commission would be closely involved in the implementation of that important aspect of the reform.
NONYE UDO (Nigeria) said that, when discussing the international civil service, it was important to clearly understand what the representatives of the staff were saying to the Committee. In that connection, she asked for clarifications regarding yesterday's statement by the President of the Federation of International Civil Servants' Associations. In particular, she wanted to know the meaning of his statement that international civil servants had stood as bystanders, rather than active participants, in the midst of developments intended to change and reform the Organization's system. She also asked for clarifications regarding the reference to the developments that had resulted in conditions of service being scrutinized and the crucial issue of a viable security management system. Overall, however, she was pleased that FICSA was collaborating with the ICSC and that their views had been taken into consideration when preparing the report.
MOHSEN BEL HADJ AMOR, Chairman of the International Civil Service Commission (ICSC), said the Commission valued the Member States' comments and suggestions, which had always been helpful in guiding its work.
Regarding the pilot study on broadbanding and pay-for-performance, he said some delegations were concerned at what they considered a deviation from the parameters set out by the Commission for the pilot study. He said that in its report to the General Assembly in 2004, the Commission presented its decisions on the framework and modalities to be used in the pilot study. The modalities were developed over time with the input of representatives of the organizations and staff and agreed to by all parties.
A problem that emerged was that one organization wanted to broaden those modalities to meet certain organizational requirements. The Commission was prepared to consider the request insofar as the organization's needs did not depart from the framework. In any case, the Commission was strictly coordinating the work and had closely monitored the progress of the pilot study in the volunteer organizations and the adherence to the modalities and to General Assembly resolution 59/268.
Regarding concerns over the proposed implementation date of 1 July 2006 for the new mobility and hardship arrangements, he said clarification was being sought on the financial and legal implications of the delay. He said the proposed implementation date of 1 July 2006 was a direct response to organizations' plea that a starting date of 1 January 2006 would not be feasible due to the difficulties associated with re-programming their payroll systems in time for the payment of flat amounts as of 1 January 2006, after General Assembly approval.
As indicated in the Commission's report, the financial implications would be $1.19 million if the General Assembly endorsed an implementation date of 1 July 2006 for the mobility and hardship arrangements and an implementation date of 1 January 2006 for increasing the base/floor salary scale. In that respect, the Commission did not foresee any legal implications with regard to the new arrangements.
He pointed out that the purpose of the mobility and hardship payments was to compensate staff for service at difficult duty stations and to encourage mobility.
In response to a concern that the Commission's report did not respond to previous requests for information, he said the ICSC was limited by administrative restrictions on the length of its report, which totalled 82 pages. He said the Commission had collected much more information and any delegation could have access to that material, which was in English.
PABLO BERTI OLIVA (Cuba) asked that staff from the Secretariat be made available to answer questions regarding the Senior Management Network.
In connection with Nigeria's question, Chairman of the Committee, JOHN ASHE (Antigua and Barbuda) reminded the delegations that under the terms of resolution 35/213, should any questions be posed in response to statements by the Federation of International Civil Servants' Associations, answers would be provided in writing.
Ms. UDO (Nigeria) wanted to know whether her delegation was to expect answers in writing before informal consultations.
The Chairman said that he would request the Federation to provide such answers.
As the Committee returned to the report on the implementation of Office of Internal Oversight Services (OIOS) recommendations by the United Nations regional commissions, Ms. TAYLOR ROBERTS (Jamaica), speaking on behalf of the Group of 77 and China, said that she attached great importance to the regional dimension of the Organization's work and the need to strengthen it. Regional commissions assumed great responsibilities with regard to the promotion of the development agenda of the United Nations. They represented the first tier of interface that billions of people around the world had with the United Nations. With additional mandates conferred on them to follow up on the implementation of the Millennium Development Goals and the outcome of major international conferences, she welcomed their efforts to align their programmes and structures with those crucial mandates. Nevertheless, each regional commission operated in a different economic and institutional environment and that was reflected in their priorities.
She also stressed the supportive role of the regional commissions for various regional initiatives, such as hunger and poverty eradication, support of the New Partnership for Africa's Development (NEPAD), managing globalization and emerging social and health issues, such as malaria, tuberculosis and HIV/AIDS. In that context, the Group acknowledged the importance of efficient and effective management practices. She welcomed the fact that most of the OIOS recommendations had been or would be under implementation during 2006. She further welcomed the Commissions' efforts to streamline their structures and functions.
The Group urged the Secretary-General to ensure that the Secretariat played its role to support the activities of the commissions, she said, stressing the importance of following a coordinated approach towards the implementation of the comprehensive communication strategy, as well as the reduction of high vacancy rates that continued to plague the commissions. Without adequate engagement, interaction and coordination between management at Headquarters and the commissions, the Organization's collective effort to support the development agenda might be in jeopardy.
While recognizing the need for the Commissions to utilize their resources in the most effective manner, the Group stressed the international community's collective responsibility to provide them with adequate resources, she said. It would be unrealistic to expect them to depend on extrabudgetary resources for the implementation of core mandates. A lot of hope had been placed in the commissions, and every effort must be made to strengthen them.
YOO DAE-JONG (Republic of Korea) said that he saw a difference from commission to commission in the level of implementation of the OIOS recommendations. He urged all executive secretaries to take more responsibility and be more active in implementing audit recommendations. Also, while recognizing the effort in preparing the Secretary-General's report, he would have liked to
have more concrete and detailed information on implementation and, where possible, statistics, including implementation ratios or levels.
Cutting across most of the recommendations was the need to avoid duplication, strengthen coordination and share best practices among the commissions, he continued. Recommendations on reassessment of intergovernmental machinery, harmonization of calendars of sessions, fund-raising, thematic impact and publications all fit those themes. From that perspective, a more systematic mechanism of consultation among commissions was desirable, and he expected to hear more on that in the near future.
KAZI A. RAHMAN, acting chief of the Regional Commissions' New York Office, responded to Member States' concerns on the OIOS report. He said that, as a way to ensure the OIOS recommendations are woven into commission work, the heads of programme planning at the five regional commissions would incorporate a follow-up to the OIOS report at their annual meeting.
The chiefs of programme planning also recently set up two working groups as a way to improve their operation. The Economic and Social Commission for Asia and the Pacific (ESCAP) would focus on ways to strengthen the self-evaluation process while the Economic Commission for Latin America and the Caribbean (ECLAC) would look at publications to ensure best practices were followed in that area. And the regional commissions had set up a Web board that would allow the sharing of information at all levels.
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