7 November 2001


Also Begins Consideration of United Nations Common System,
Hearing Introduction of International Civil Service Commission Report

NEW YORK, 6 November (UN Headquarters) -- The Fifth Committee (Administrative and Budgetary) this morning continued its consideration of the report of the Office of Internal Oversight Services (OIOS), with representatives highlighting specific aspects of its investigations, among them management of the Office for Drug Control and Crime Prevention and the Iraq "oil-for-food" programme. The Committee also began its consideration of the United Nations common system.

The representative of the United States told the Committee that the OIOS inspection of the administration of the Drug Control Office "read like a manual on how not to do things". Describing numerous findings of the report, including a "centralized and arbitrary" management style, he inquired about the status of the recommendations to correct the serious problems uncovered. Also, referring to investigation of the so-called "Boat Project" -- a solo voyage around the world to raise awareness of the United Nations Drug Control Programme -- he said he would not be in the position to decide on the Programme’s budget prior to issuance of that report.

Iraq’s representative, noting the OIOS decision to establish a dedicated audit section for the Iraq Programme "to address the risks associated with its multifaceted" activities, stressed the need to ensure Iraq’s participation in the Programme’s financial monitoring. Financial misconduct had continued for far too long and Iraqi financial auditors could assist the OIOS in its duties. That request did not call into question the ability of the Office; rather, it was a basic right of Iraq to monitor the way in which international agencies were acting on its behalf. It was also the responsibility of the OIOS and the Secretary-General to draw the Security Council’s attention to the financial mistakes and the risks involved in managing the Programme.

The representative of Japan said he hoped that the organizations concerned would make every effort to tackle crucial OIOS recommendations. In particular, justice should be obtained in cases of fraud, abuse and other misconduct.

Also this morning, as the Committee began its consideration of the United Nations common system, the Chairman of the International Civil Service Commission, Mohsen bel Hadj Amor, introduced its annual report, saying its centrepiece was the review of the current pay and benefits system. With the changing environment and the introduction of new technologies, a new set of skills was required from the staff. While the Commission had analysed the problems and attempted to find solutions, to preclude any misunderstandings, it had avoided being overly specific at the current stage. He hoped that by next year the Assembly would have a range of tools to consider.

Also speaking this morning were the representatives of Qatar, United Republic of Tanzania, Syria, Cuba and Belgium (on behalf of the European Union and associated States). A statement on the financial implications of the decisions and recommendations contained in the ICSC report was introduced by Vladimir Belov of the Office of Programme Planning, Budget and Accounts.

The Under-Secretary-General for Internal Oversight Services, Dileep Nair, responded to questions and comments from the floor.

The Committee will continue its discussion of the United Nations common system at 10 a.m. Wednesday, 7 November.


The Fifth Committee (Administrative and Budgetary) met this morning to continue its consideration of reports of the Secretary-General on the activities of the Office of Internal Oversight Services (OIOS). [For more information, see Press Release GA/AB/3475 of 5 November.] It was also expected to take up the United Nations common system.

Before the Committee was the twenty-seventh annual report of the International Civil Service Commission (ICSC) for 2001 (document A/56/30), which contains its latest recommendations concerning conditions of service of international staff, remuneration of the professional and higher categories and other matters regarding the coordination of civil service regulations throughout the United Nations system.

[The ICSC was established in 1974 to regulate and coordinate the conditions of service throughout the United Nations common system. The Commission makes recommendations to the General Assembly on principles for determining conditions of service in the common system, salary and post adjustment scales, dependency allowances and language incentives, education and repatriation grants and termination indemnities. All of the specialized agencies of the United Nations, except the World Bank, the International Monetary Fund, the International Finance Corporation, the International Development Association and the International Fund for Agricultural Development have accepted and are bound by the statute of the Commission. The International Atomic Energy Agency (IAEA) is also a party to the statute.]

Within the context of the framework for human resources management, approved by the Assembly last year, the Commission decided to review the pay and benefits system, one of the principal elements of the framework, the report says. [The framework was conceived as a management tool to enable organizations to manage their resources in a strategic manner and reinforce their capacity to carry out overall management reform.]

To improve the delivery of services mandated by Member States, a "modernized" compensation system would reward staff in a competitive and equitable manner, based on competence, responsibility and accountability, the report says. It would also motivate staff to develop skills and provide opportunities for career advancement. Designed to be flexible and transparent, the system would attract high-quality staff. Possible new approaches to the pay and benefits system would include streamlining job classification procedures. The new system would provide tools to reward contribution and strengthen the capacity of management to meet goals. The Commission requests the Assembly to take note of progress to date on the matter.

On the issue of contractual arrangements, the Commission decided that future work on the subject should be integrated into the review of the pay and benefits system. In that respect, the Commission requested its secretariat to take inventory of the types of contracts in use, to collect information on the administrative policies of selected national civil services on career versus time-limited appointments and propose a catalogue of contracts from which organizations could select and adapt according to their specific needs.

The Commission also addressed how the launch of euro currency at the beginning of next year would affect the United Nations common system. To ensure an orderly transition to the euro, the Commission decided to recommend to the Assembly that the euro be used -- as of 1 January 2002 -- as the official currency for emoluments that are currently set in the national currencies of the 12 euro-zone countries. The national currency amounts would be converted by applying the respective fixed conversion rates and then rounded up or down to the nearest euro. It recommends that organizations officially convert their General Service and allowances in the same way. It also decided to recommend the converted values of the education grant for nine currency areas and of the children's and secondary dependant's allowances that will change over to the euro.

The report also contains decisions on the conditions of service for Professional and higher categories staff. On the question of the base/floor salary, the Commission decided to recommend to the Assembly, for implementation effective 1 March 2002, an increase of the current base/floor salary scale of 3.87 per cent through consolidation of post adjustment on a no-loss/no-gain basis. Annexes to the report contain the proposed base/floor salary scale, as well as the staff assessment rate for the Professional and higher categories for use in conjunction with gross base salaries.

Regarding the conditions of service of General Service staff, the Commission conducted surveys of best prevailing conditions of employment for General Service and related categories in Rome and in New York (for the trades and crafts category and for language teachers). As a result of the survey, the Commission recommends a salary scale, effective 1 November 2000, to the Director-General of the Food and Agricultural Organization for the Rome-based staff, which is contained in an annex to the report. Also annexed to the report are the recommended revised rates for dependency allowances and the results of the survey of the New York staff trades and craft and language teacher staff.

Annex II of the report contains the updated version of the Standards of Conduct for the International Civil Service, which the Commission is recommending to the Assembly and other legislative organs. After three years of discussion with staff representatives, the Commission was able to reach consensus on a text that would serve the needs of the international civil service in the twenty-first century. The Standards of Conduct, which were first issued in 1954, include guiding principles for international civil servants, such as integrity, tolerance, impartiality and independence. The Standards also comment on such issues as working relations, harassment, conflict of interest, the role of the Secretariat, staff management relations, relations with the public and personal conduct.

Also before the Committee is a statement of the administrative and financial implications of the decision and recommendations contained in the ICSC report (document A/56/485). For 2000-2001, the related requirements under the regular budget have been estimated at some $1.78 million net of staff assessment and, for 2002-2003, about $7.82 million net of staff assessment. Recommendations and decisions of the Commission giving rise to additional requirements under the current biennium will be considered when computing the second budget performance report for 2000-2001. The additional requirements for 2002-2003 will be reflected in the recosting of the programme budget proposed estimates prior to determination of the appropriation to be adopted by the Assembly.

Statements on Oversight

AHMAD FLAMARZI (Qatar) said that it was no secret that oversight mechanisms were extremely important, for they could shed light upon mismanagement and fraudulent practices. His country had supported the establishment of the OIOS to consolidate and enhance the internal oversight of the United Nations. He commended the Office for implementing its mandate and noted that last year its recommendations had led to savings and recoveries in the amount of some $58 million.

According to the report before the Committee, he continued, only 53 per cent of the OIOS recommendations were implemented during the period under review, which indicated a weakness in the rate of the implementation. For example, only 34 per cent of the recommendations on the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) had been implemented. The Office also did not get detailed answers from the agencies and departments involved on many of its recommendations. He urged the Department of Peacekeeping Operations, the Office of the United Nations High Commissioner for Refugees (UNHCR) and other administrations to speedily implement the recommendations of the oversight body.

It was also important to implement the recommendations of the OIOS on auditing the accounts in Kosovo, he said, where serious shortcomings had been disclosed. He also regretted the situation regarding the policies and procedures for the recruitment of staff for peacekeeping operations. He was concerned that there were no standard job descriptions for mission posts and that half of the staff of the missions were not trained in information technology. Resident auditors at the peacekeeping mission in Sierra Leone had disclosed weaknesses in the management of service and rations contracts, and a payment of $133,000 to the service contractor for warehousing operations had been unproductive. That matter needed to be further pursued.

Regarding the audit of the Department of Public Information (DPI), he expressed concern that accounts receivable were not adequately managed and approximately $400,000 of accounts were significantly overdue. Moreover, there was no mechanism to guide the development and application of pricing policies for the sale of videotapes, photographs and audio cassettes. He also highlighted several other recommendations of the OIOS, including those regarding the need for the Department of Peacekeeping Operations and the Office of Human Resources Management (OHRM) to regularly review the rates paid to the staff, to ensure their continued reasonableness in comparison with the actual subsistence costs in various missions.

Turning to the proposed merging of the tasks of monitoring investigation and assessment within the OIOS, he said that such internal improvements would facilitate the work of the Office. He also supported establishment of the investigation unit in Geneva and elevating a similar unit in New York to a division. It was important to use the Internet to follow up on the recommendations and find out the stage of their implementation. In conclusion, he called for enhancing the role of the OIOS and stressed the importance of improving the performance of its budget and administration, which would ensure transparency in its work.

AHMED K. AHMED (Iraq) said the OIOS report addressed the functioning of the Iraq programme responsible for administering the "oil-for-food" programme in the north of the country, in which nine United Nations agencies and programmes were involved. His delegation commended the comments in the report, which expressed a professional spirit in evaluating the financial performance of the programme and the United Nations agencies working with it. However, those comments were not comprehensive and lacked the kind of precise information that would allow the diagnosis of mistakes and financial mismanagement. It should contain some examples that clearly indicated the programme’s financial mismanagement.

He would like to submit a draft resolution containing a recommendation to notify the Security Council of the deviations in the management of the oil-for-food programme, he said. In its paragraph 53, the report of the OIOS (document A/56/381) mentioned that the OIOS had established a dedicated audit section to address the risks associated with the multi-faceted Iraq programme, in order to protect Iraq's money from mismanagement. The section had an obligation to work in a professional way, compatible with the basic rules for auditing accounts. As the money came not from international donors, but from Iraq itself, the Government of his country should participate in the financial monitoring of the programme.

Iraqi financial auditors could assist the OIOS in its duties, he said. That request did not call into question the ability of the Office to monitor the situation, but it was a basic right of Iraq to monitor the way in which international agencies were acting on its behalf. It was the responsibility of the OIOS and the Secretary-General to draw the attention of the Security Council to the financial mistakes and the risks involved in managing the Iraq programme.

Financial misconduct had continued far too long, he continued, and wasting the money intended for the northern part of Iraq should stop. Currently, the United Nations agencies that implemented the programme followed a contractual policy far removed from any standards and rules normally followed by the United Nations in its subcontracting practices. The agencies followed the formula of a turn-key contract, which made those contracts extremely expensive and the costs were not commensurate with the services provided. Many inappropriate projects were also undertaken. Large amounts of Iraqi resources were also being spent on numerous experts and other staff for the so-called assessment missions, which really did not aim at anything other than spending money.

In conclusion, he said that it was the professional duty of the OIOS to subject the assets of the programme, and especially its designated "13 per cent" and "2 per cent" accounts, to a real audit. It was also absolutely necessary for Iraq to participate in that exercise in order to diagnose the mismanagement and hold responsible those responsible.

MUHAMMAD YUSSUF (United Republic of Tanzania) noted the efforts of the OIOS to improve relationships with management and with all members of the governing bodies, as well as coordinating its programme of work with other oversight bodies, such as the Board of Auditors and the Joint Inspection Unit (JIU). The OIOS advice would be of great importance in avoiding duplication, and ensuring that the JIU recommendations were implemented. The OIOS decision to modify its reporting format to include qualitative assessments of the implementation of recommendations was an important initiative, which should be emulated by other oversight bodies. While pleased with the overall implementation rate of 53 per cent, he believed a higher rate was achievable and measures must be taken to ensure that the bulk of the recommendations were implemented.

The savings and recoveries of some $58 million reflected the commitment of the OIOS in its resolve to propose recommendations that were implementable, he continued. He was pleased that the Office of the High Commissioner for Human Rights had implemented all of the 23 critical audit recommendations on its Burundi field operation, and had also implemented 15 of the 18 critical recommendations issued by OIOS on its field operation in Colombia. The OIOS investigations had continued to deter fraud and waste throughout the Organization. Individuals who had violated United Nations regulations and rules had been held accountable –- a positive development.

He noted with concern the cases of bribery at the Nairobi branch office of the UNHCR, the Office for Drug Control and Crime Prevention (ODCCP) and the mission in Kosovo. Those and other cases demonstrated the scope of the unlawful behaviour on the part of a few United Nations officials. The need to strengthen oversight bodies was more essential today than at any other time in the history of the Organization.

ARATA FUJII (Japan) said Japan attached great importance to the activities of the OIOS, the JIU and the Board of Auditors. He appreciated various new measures and developments initiated by Under-Secretary-General Dileep Nair, including the reclassification of crucial recommendations. He supported the criteria, as described in paragraph 8 of the report, to classify recommendations. He hoped that the organizations concerned would make every effort to tackle crucial recommendations. In particular, justice should be obtained in cases of fraud, abuse and other misconduct. On the investigation of the UNHCR branch office in Nairobi, he was concerned with the arrangement of the OIOS with specific Member States, as outlined in paragraph 43 of the report. He asked for more information on the modalities and procedures to be used in that arrangement.

ABBOU AL-MOULA NAKKARI (Syria) noted that OIOS recommendations did not appear in bold in the report. Several General Assembly resolutions established mechanisms for the drafting of reports. He hoped that the Office would review resolutions 54/248 and 55/212, which provided detailed conditions for the development of reports. He had not been able to familiarize himself with the most important recommendations. The method adopted in the report was to provide a summary, which prevented delegations from becoming familiar with the most important recommendations. There was also a tendency to classify recommendations as primary or less important, which could give the impression that there was a priority of recommendations and that some could be implemented and others deferred. If the recommendations were good, then they should all be implemented.

Although the rate of implementation of recommendations was good, it was not what he had expected, he said. He wondered to what degree the recommendations were mandatory and obligatory. On the many recommendations concerning audits, he wondered if there was a conflict between activities of the OIOS and the Board of Auditors. Referring to paragraph 222 of the report, he was pleased with the timetable for evaluations of the Office of Legal Affairs. In paragraph 226 -- on the merger of the monitoring, inspection and evaluation units -- the OIOS had proposed within the medium-term plan for 2002-2005 to restructure internal monitoring into three programmes. What were the ambitions of the administration in that regard? In conclusion, he said he was pleased with the activities of the OIOS. He understood that the question of resources requested by the Office would be reviewed within the framework of the programme budget.

THOMAS A. REPASCH (United States) said that while his delegation had already made a statement on the general report of the OIOS, he wanted to follow up on the other two reports introduced yesterday: on the audit of the UNHCR operations in Albania; and inspection of the ODCCP. The recommendations of the first report should be implemented in an expeditious manner. As for the ODCCP, it was an important report, which read like a manual on how not to do things. Given the responsibility to create and run a programme, one should read the report to avoid wasting resources.

He went on to recount the numerous findings of the report regarding the "centralized and arbitrary manner" of administering the programme; the lack of consistent oversight; and absence of clearly defined delegation of authority. The report also noted the low staff morale at the Office and poor management, which hindered proper implementation of the mandates. The OIOS had made clear to the Executive Director of the Office that the situation could not be allowed to continue, and urged the senior management to institute immediate measures to rectify the situation. Since January, some measures had been taken, and he noted that the OIOS intended to review the implementation of its recommendations next spring. However, that might be too late to review the status of the report, which caused serious concern.

The OIOS believed that the management of the programme could not be successful without the confidence of the staff working there, he continued. The Staff Council had only recently raised serious concerns in that respect, and he wanted to know the status of the recommendations to correct the serious problems uncovered by the OIOS. In paragraph 38 of the report, there was reference to the "Boat Project", sponsoring a solo voyage around the world by a sailor on a 90-year-old wooden boat in order to raise awareness of the United Nations International Drug Control Programme (UNDCP) activities. Because of the seriousness of the allegations, the OIOS intended to present a separate report on the investigation into the matter. He would like to know about the status of that report. He would not be in the position to take the decision on the budget of the UNDCP without information on the inspection efforts in that respect.

Responding to the comments and questions from the floor, Under-Secretary-General for Internal Oversight Services, DILEEP NAIR, said that a number of delegates had raised the question of the implementation of the OIOS recommendations. The report before the Committee presented the rate of implementation for the past year (53 per cent). There were some 2,015 recommendations last year. To have a sense of how well the recommendations had been implemented in the previous years, he said that for the period of 1997 to 1998, the rate of implementation was some 98 per cent. For 1998 to 1999, it was some 94 per cent; and for 1999 to 2000 -– 72 per cent. As for the follow-up to the recommendations, the OIOS tracked the statistics and checked the implementation of its recommendations by each department. Future reports would also contain such information.

As for the suggested periodic briefings, he said that it was a good idea, and he would be more than willing to present relevant information to the Fifth Committee on a regular basis. Regarding the oil-for-food programme, he said that the OIOS annual report by its very nature was a summary of all other reports and could not contain detailed information. Only four critical recommendations had been made regarding the oil-for-food programme, including those regarding the payment of allowances, which always needed to be validated. According to other recommendations: there should be clear guidelines for undertaking the projects; and there should be post-implementation review of the projects. There was also a recommendation on how to evaluate the contractors’ capacity to execute contracts.

Concerning the multinational task force to look into the situation of refugees in Nairobi, he said that a formal report would be presented to the Fifth Committee in due course. Regarding the presentation of the OIOS recommendations, he said that the management of programmes and bodies concerned generally treated them seriously. The responses of the departments, funds and programmes were very positive, and there was a rather high implementation rate. On the proposed reorganization of the OIOS, he said that it was important to make better use of human and financial resources available to the OIOS.

As for the ODCCP, he said the list of issues brought up by the OIOS had been rather extensive, and he was willing to provide a handout on the status of the implementation of the Office’s 14 main recommendations to the delegates. A definite review could be only provided after the follow-up review early next year. The "Boat Project" was a subject of the investigation, and the report on the matter could not be provided at this point. Any disciplinary proceedings that might be involved in the matter could be jeopardized by an early release of the report.

Mr. NAKKARI (Syria) thanked Mr. Nair for his useful responses. However, he wanted to address the issue of the role of the General Assembly in the implementation of the OIOS recommendations. According to Mr. Nair, the recommendations of the OIOS were not subject to action by the Assembly. Perhaps there was a misunderstanding, but he recalled that the note of the Secretary-General transmitting the report referred to the resolution by which the OIOS was created. There, the Assembly asserted its role in reviewing the recommendations and said that it would review them for action. In the light of that understanding, the Committee could debate or even reject any of the recommendations. It would be unreasonable for the recommendations to be implemented unless the Member States were sure that they did not violate any mandates authorized by the legislative organs.

EVA SILOT BRAVO (Cuba) thanked the OIOS for its annual report, noting that, as compared with previous years, the idea of indicating the scope of the functions to be carried out by the OIOS had been stressed. On the mandate of the OIOS, she recalled that the General Assembly adopted resolution 54/244 to further specify some of the elements contained in resolution 48/218 B, which established the Office. In that regard, Cuba had been thinking about the future. It would be useful for further reports to emphasize the intergovernmental consideration of the OIOS reports and the way in which the OIOS based the priorities of the Assembly and other intergovernmental bodies, especially in peacekeeping and the implementation of the report of the Panel on United Nations Peace Operations -- the Brahimi report. Bearing in mind the high level of resources involved in peacekeeping operations, it could be an area in which the OIOS could be involved. Results-based budgeting was another interesting topic that could be dealt with by the OIOS.

Responding to delegations, Under-Secretary-General NAIR said that the reports and recommendations were directed to programme managers. For recommendations to be expeditiously implemented, they had to be acted upon quickly. To wait for recommendations to come to the Fifth Committee would waste valuable time and opportunities to improve inefficiencies. In the interest of time, the OIOS reported to Member States through the Secretary-General. That did not preclude the right of Member States, however, to present their views on what should be covered by the OIOS. That was the prerogative of Member States. If the reports were to be acted on, however, programme managers would have to act as soon as they were put forward. The caveat remained, however, that when inter-governmental bodies thought that other issues should be addressed, they would be.

United Nations Common System

The Chairman of the International Civil Service Commission (ICSC), MOHSEN BEL HADJ AMOR, introduced that body’s annual report, saying that given the number of United Nations system staff worldwide -- some 55,000 -- it was evident that the ICSC had a challenging mandate. The review of the pay and benefits system was the centrepiece of the report. Because the pay system dated back to the earliest days of the United Nations, it remained rooted in an earlier era. The nature of the Organization’s work had changed with increased emphasis on teams, rather than hierarchy, and contribution rather than seniority. New technologies had changed workplace dynamics and redefined roles and functions. A number of focus groups had met throughout the year on the review of the pay system. A broad range of staff had also participated in the groups, whose role was to lay the groundwork for possible changes.

The problems besetting the current system were myriad, but not insolvable, he continued. The Commission had analysed the problems and attempted to find solutions. Changing systems tended to make people uncomfortable, and gave the impression that some would be winners and some losers. Change was needed, however, or staff would become the victims of change. To preclude any misunderstandings, the Commission had avoided being overly specific in its report at the current stage. Realizing that old ways were no longer compatible, many national civil service systems had introduced in recent years the approaches under consideration by the ICSC. A series of working groups would transform what was at the current stage only concepts.

By next year, he added, the Assembly would have a range of tools to consider. However, while it was the Commission’s intention to deliver recommendations next year, he would not want quality to be sacrificed for speed. If in the course of the year the Commission discovered that it had been too optimistic, it would provide what was ready at the time.

He said it was important not to lose sight of the objective of the review, which was a competitive system to attract and retain high-quality staff. While common system staff were generally considered to be either underpaid or paid enough, some thought that they were overpaid. Despite varying views, however, no one would deny the cumbersome nature of the current pay system. The United Nations system could not afford to be immune to the salary fluctuations in the outside market. A modernized system was important for many reasons, including that it was mutually beneficial to staff and the organizations they served. The pay system was directly linked to the achievement of organizational goals. Flexible compensation policies that rewarded staff for individual and team contributions were an important objective of the review.

On the revised Standards of Conduct for the International Civil Service, he recalled that last year the Assembly had urged the ICSC to complete its work on the matter. He was pleased to announce that an annex to the report contained the revised Standards of Conduct, which provided appropriate guidance to international civil servants at the start of the new millennium. It was the enduring quality of the Standards that had made the ICSC’s task so difficult. New ethnical requirements necessitated a new version of the standards, however. To reach consensus, compromise had been required by all parties. After some time and numerous drafts, the text was the closest possible balance of all concerns.

The issue of contractual arrangements were at the heart of a compensation system and were vital to the Organization’s ability to recruit and maintain staff, he added. It was a leitmotif of the changing nature of the Organization’s work. The report contained a preliminary consideration of the question.

VLADIMIR BELOV, Budget Division, Office for Programme Planning, Budget and Accounts, introduced the statement of financial implications of the decisions and recommendations of the ICSC (document A/56/485).

The Committee was informed that the Advisory Committee on Administrative and Budgetary Questions had no objection to the budget requirements contained in document A/56/485.

THIERRY RONSE (Belgium), speaking on behalf of the European Union and associated States, reasserted the importance that the Union attached to the common system, which ensured equal treatment of staff within the United Nations. He supported the role played by the ICSC and its work in the field of human resources. He was pleased that the Commission had completed its review of the norms of conduct for international employees and welcomed the evolution of its work on the review of the pay and benefits system. The ICSC study, which had been undertaken to strengthen the international civil service, was a useful element in the modernization of the system, and he regretted that there was no progress so far. He hoped a timetable would be established to further address the matter.

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