Remarks by Stephen Lieberman, Minister-Counsellor, at the Fifth Committee of the UN General Assembly, on Agenda Item 141: UN Common System, November 13, 2013

Stephen Lieberman
Minister Counselor for UN Management and Reform 
U.S. Mission to the United Nations 
New York, NY
November 13, 2013




AS DELIVERED

Thank you, Mr. Chairman. My delegation would like to thank Mr. Kingston Rhodes, the Chairman of the International Civil Service Commission, for his report. We also would like to thank Mr. Johannes Huisman, the Director of the Programme Planning and Budget Division, for delivering the statement of Secretary-General, and Mr. Carlos Ruiz Massieu, Chairman of the Advisory Committee for Administrative and Budgetary Questions, for his report. Finally, we would like to thank Ms. Paulena Analena, President of the Coordinating Committee of International Staff Unions and Associations of the United Nations System, and Mr. Mauro Pace, President of the Federation of International Civil Servants' Associations, for their statements. To those who you represent, we would like to say: the men and women who do the work of the United Nations around the world are the Organization’s most valuable asset and we thank them sincerely for their service.

Mr. Chairman, in the Fifth Committee, it is rare to have agreement that a problem exists and rarer still to have agreement on a solution. But during the 67th General Assembly session, in an agenda item that many consider to be difficult, we found surprisingly broad common ground.

We started the session by making several now-familiar observations: staff costs make up 70% of the UN regular budget and growth in staff costs—specifically the number of staff and the size of the overall compensation package—has been the principal cause of the significant budget growth over the last decade. This effect has been magnified in the 23 other organizations of the common system, many of whom rely on voluntary contributions that have dwindled in the wake of the global financial crisis.

Our argument is, by now, also familiar: by allowing staff costs to continue rising without understanding their impact on organization budgets, we force organizations like WHO, which recently had to cut 800 critical HIV/AIDS workers in Africa, to cut mandate delivery in order to meet rising staff costs.

What was noteworthy about the common system discussion in the 67th General Assembly session was not the difficult discussions last December in an often fraught Fifth Committee but that we all worked together to adopt major solutions to address these challenges: a Chief Executives Board report to better understand the effect of growing staff costs on budgets across the common system; an ICSC review of compensation that will seek to contain future compensation costs; and an administrative pay freeze that stopped—even just for a short period—automatic cost-of-living increases.

Mr. Chairman, while these successes will allow us to better address staff costs, they will not do so fast enough to meet the concerns of many common system organizations. Since the first resumed session, governing bodies of four organizations—the Food and Agricultural Organization, the International Maritime Organization, the World Intellectual Property Organization and, just this morning, the Universal Postal Union—have, with strong support from all the delegates around their tables, adopted resolutions asking the General Assembly and the ICSC to take immediate action to relieve their staff costs pressures. More organizations will likely do the same in the weeks and months ahead.

Just like last session, there seems to be broad agreement that a problem exists and must be solved soon. So the question is: what can we do while longer-term solutions are still under development? The answer requires us to revisit the mechanics of the margin management methodology. Recall the two basic elements of this methodology:

First, the Noblemaire Principle requires UN staff to be paid in comparison to the highest-paid national civil service: the U.S. federal civil service, or comparator. The difference between UN pay and comparator pay is known as the margin.

Second, in resolutions 40/244 from 1985 and 43/226 from 1988, the GA gave the ICSC two rules to manage the margin in keeping with the Noblemaire Principle. First, keep the 1-year margin between 10 to 20%, or range, and second, keep the average of 1-year margins over five years at 15%, or the desirable midpoint.

It is worth noting that these two rules have equal weight and complement one another: the GA approved the first “on the understanding that” the desirable midpoint would be attained over time; to attain this level, the GA approved the ICSC-adopted methodology to manage consecutive 1-year margins so that their 5-year average would equal the desirable midpoint.

Mr. Chairman, the problem we face this session is that the 1-year margin has risen from 13.3% in 2010 to a projected 22.4% in 2014 against the backdrop of an ongoing freeze in comparator pay. This increase, in turn, has caused the 5-year average to rise to 15.7% in 2013—above the desirable midpoint for the first time in history.

Given this unprecedented 5-year average, the ICSC plans to freeze the 1-year margin at 19.8% in accordance with resolutions 43/226 and 46/191 as of 1 February 2014. My delegation welcomes this intention and commends the ICSC for showing a willingness to act.

In spite of this freeze, however, all the evidence suggests that the 1-year margin will stay at 19.8% for the foreseeable future and, unless further action is taken, the five-year average will continue to move away from the desirable midpoint: as the latest ICSC report makes clear, 15.7% in 2013, 16.9% in 2014, 18.2% in 2015, and eventually rise to 19.4% in 2016.

Mr. Chairman, the only action that will bring the 5-year average back to the desirable midpoint in accordance with resolution 43/266 is a downward correction in the post adjustment, which is a pay add-on that is inherently variable and is adjusted upward and downward as a matter of course. Without one, common system organizations will continue to pay more for professional staff than intened by GA resolution every year the freeze in comparator pay persists.

Just as the GA set the policy goal, we should in this session provide the ICSC guidance on the single issue that the methodology does not clearly resolve: the duration over which this action should be taken. We maintain that a downward correction should take place over a short duration to give common system organizations immediate relief. Simply put, the shorter the duration, the faster common system organizations can redirect what are—by the GA’s own rules—overpayments to UN professionals in order to strengthen existing mandates.

Mr. Chairman, before I conclude, allow me to observe again that the work of the common system is impossible without the hard work, dedication and leadership of UN professionals. Indeed, our focus on staff costs is in part an effort to preserve the central role of staff in the UN system. Many common system organizations have cut staff or replaced them with consultants due to ongoing budget pressures. In its report A/68/67, the Joint Inspection Unit cited the FAO Finance Committee, which observed that consultants represent “a far more economical alternative to creating a professional post (by more than 50 per cent) to meet programme delivery requirements.” Unless we—member states and managers—live up to our obligations to manage responsibly and in accordance with the approved methodology, staff will continue to be supplanted in an era of continued fiscal austerity.

Only by making difficult choices today can we ensure that UN professionals will continue to have a role in helping the Organization do its critical work in the years to come.

Thank you, Mr. Chairman.

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PRN: 2013/231