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THE ENVIRONMENT FUND AND ADMINISTRATIVE AND OTHER BUDGETARY MATTERS

1. As decided by the Council at the 1st meeting of the session (see chapter I, paragraphs 18-21, above), agenda item 7 was discussed in the Committee of the Whole. In addition, also under this item, the 6th plenary meeting, on 6 February 1997, was devoted to a pledging session.

2. In considering the agenda item, the Council had before it the following documentation: the report of the Executive Director entitled "The Environment Fund budgets: revised proposals for 1996-1997 and proposals for 1998-1999" (UNEP/GC.19/22) and the note by the Executive Director transmitting the comments of the Advisory Committee on Administrative and Budgetary Questions on the composite budget document of UNEP (UNEP/GC.19/L.1); a note by the Executive Director transmitting a report entitled "Ensuring adequate and predictable financing of UNEP: a challenge to Governments" (UNEP/GC.19/INF.10 (English only) and Corr.1); the report of the Executive Director on developments in conference-servicing (UNEP/GC.19/5); the report of the Executive Director on progress made on the implementation of the Mercure satellite telecommunications system (UNEP/GC.19/21); the report of the Executive Director on the administrative costs of trust funds to UNEP (UNEP/GC.19/18); the report of the Executive Director on the management of trust funds (UNEP/GC.19/4 and Rev.1 and Corr.1); the Executive Director's comments on the report of the Board of Auditors on the financial report and audited financial statements of the Environment Fund for the biennium 1994-1995 (UNEP/GC.19/33); a note by the Executive Director on the status of implementation of the recommendations of the Board of Auditors (UNEP/GC.19/INF.5 (English only)); a note by the Executive Director transmitting the biennial report of the Board of Auditors to UNEP (UNEP/GC.19/INF.1); the report of the Executive Director on revision of the Financial Rules of UNEP and revision of the General Procedures Governing the Operations of the Fund of UNEP (UNEP/GC.19/3); the report of the Executive Director on enhancing human resource utilization within UNEP while ensuring the complementary and appropriate use of individual and corporate consultancies (UNEP/GC.19/15); the report of the Executive Director on prevention of waste, fraud and mismanagement in UNEP (UNEP/GC.19/6 and Add.1); and a note by the Executive Director transmitting additional information on the Environment Fund and administrative and other budgetary matters (UNEP/GC.19/INF.24).

3. It also had before it draft decisions on the following topics that had been prepared by the Drafting Group of the Committee of Permanent Representatives and considered by that Committee: management of trust funds (UNEP/GC.19/L.2); enhancing human-resource utilization within the United Nations Environment Programme, while ensuring the complementary and appropriate use of individual and corporate consultancies (UNEP/GC.19/L.9); the cost of administering trust funds (UNEP/GC.19/L.12); prevention of waste, fraud and mismanagement (UNEP/GC.19/L.15); revision of the Financial Rules of the Fund of the United Nations Environment Programme and revision of the General Procedures Governing the Operations of the Fund of the United Nations Environment Programme (UNEP/GC.19/L.22). In addition, it had before it draft decisions on developments in conference-servicing, the Mercure satellite communication system, the Environment Fund budgets, and the financial report and audited accounts for the biennium 1994-1995 ended 31 December 1995, contained in sections II, V, VI and XII, respectively, of the compilation of suggestions regarding draft decisions that had been considered by the Drafting Group of the Committee of the Permanent Representatives (UNEP/GC.19/L.23).

4. The item was taken up by the Committee of the Whole at its 1st meeting, on 27 January 1997. It was also considered by the Fund Subcommittee at its 1st and 2nd meetings, on 29 January 1997.

5. At its 1st and 2nd meetings, on 27 and 28 January 1997, the Committee of the Whole had a general debate on this item and heard statements by the representatives of Algeria, Bangladesh, Benin, Burkina Faso, Canada, the Central African Republic, China, Colombia (on behalf of the Group of 77 and China), Iran (Islamic Republic of), Japan, Kenya, Mauritius, the Netherlands (on behalf of the European Union), New Zealand, Nigeria, Pakistan, Panama, Philippines, Republic of Korea, Romania, the Russian Federation, Senegal, Sudan, Switzerland, Uganda, the United Kingdom, and the United States of America. The representative of Kenya formally requested that the written text of the statement made by the representative of the United States should be distributed.

6. At its 1st meeting, on 29 January 1997, the Fund Subcommittee focused on the revised appropriations of Fund resources in 1996-1997 biennium of $34,861,400 for the management and administrative support costs budget and $62,500,00 for the Fund programme activities budget, as set out in paragraph 10 of section I of the draft decision relating to the report of the Executive Director on the Environment Fund budgets, contained in the compilation of suggestions regarding draft decisions that had been considered by the Drafting Group of the Committee of Permanent Representatives (UNEP/GC.19/L.23, pp. 19-24). Following a briefing by the Chairman on the outcome of the informal consultations on the matter, the Subcommittee heard statements by the representatives of Australia, Bangladesh, Benin, Canada, China, Colombia (on behalf of the Group of 77 and China), Egypt, Kenya, the Netherlands (on behalf of the European Union), New Zealand, Pakistan, the Philippines, Poland, Romania, Switzerland, Turkey, and the United States of America.

7. At the same meeting, the Subcommittee heard an introductory statement by the Assistant Executive Director on the revised appropriation for Fund programme activities for the biennium 1996-1997 and the appropriation for Fund programme activities for the biennium 1998-1999. In his introductory statement, the Assistant Executive Director pointed out that the revised 1996-1997 appropriations for Fund programme activities, as presented in table 22 of the Executive Director's report (UNEP/GC.19/22 and Corr.1), followed the same subprogramme/subprogramme-element format as the appropriations originally approved by the Governing Council at its eighteenth session, and that now going to the level of subprogramme element components for the revised appropriations would be extremely difficult because of the interlinkages between subprogrammes elements and the financial control mechanisms already in place.

8. Following the introductory statement, the Subcommittee, at its 2nd meeting, also on 29 January, heard statements on the subject from the representatives of Canada, Colombia, Pakistan, the Philippines, Romania, and Uganda.

9. At the 4th meeting of the Committee of the Whole, on 30 January, the representative of Colombia, speaking on behalf of the Group of 77 and China, introduced an amendment to paragraph 10 of section I of the draft decision relating to the report of the Executive Director on the Environment Fund budgets. Statements regarding the amendment were made by the representatives of the Netherlands (on behalf of the European Union), the Philippines, and the United States of America. The Committee also heard statements on section I of the draft decision as a whole from the representatives of Australia and Colombia (on behalf of the Group of 77 and China).

10. Also at its 4th meeting, the Committee considered the report of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on the Environment Fund budgets (UNEP/GC.19/L.1). Having heard an introductory statement by the secretariat and statements on the report from the representatives of India and Sweden, the Committee decided to take note of the report and to request the secretariat transmit its response to the Advisory Committee.

11. At its 4th, 5th, 6th and 9th to 14th meetings, on 30 and 31 January and 3, 4 and 6 February, the Committee took up draft decisions submitted under this item, together with the relevant background documentation.

12. At the 8th meeting of the Committee, on 31 January 1997, the representative of Kenya and the Executive Director announced that an agreement had been signed that morning between the Government of Kenya and UNEP concerning the implementation of the Mercure project in Kenya. The Chairman congratulated the Government of Kenya and the secretariat on their achievement. The representative of the United Kingdom welcomed this achievement and introduced the Chairman of the Governing Board of Mercure to the Committee, who made a statement on behalf of the six Mercure donors.

13. At the Council's 6th plenary meeting, on 6 February 1997, the President invited representatives to announce their pledges for the current biennium and the biennium 1998-1999.

14. The representative of India announced that the pledge of $100,000 already made for 1997 would be paid and expressed India's hope that it would be able to pay $180,000 for 1998 and for 1999, in accordance with the United Nations scale of assessments.

15. The representative of Mauritania indicated that Mauritania would contribute for the first time, pledging $6,000 per annum for 1997, 1998 and 1999, as well as a sum of $2,000 to the General Trust Fund for the African Ministerial Conference on the Environment (AMCEN).

16. The representative of Indonesia pledged $15,000 for 1997.

17. The representative of Kuwait said that his country was committed to pay in 1996 and 1997.

18. The representative of the Netherlands, speaking on behalf of the European Union, said that UNEP needed a stable donor base but that there was a loss of donor confidence in the organization. He added that UNEP should be supported at the level of other United Nations offices providing similar services throughout the world. In addition, he presented a draft decision relating to the exploration of ways and means of acquiring a stable, adequate and more predictable funding formula for the organization.

19. Speaking on behalf of the Netherlands, he said that in 1995 and 1996 his country had paid an amount of 700,000 guilders in addition to its contribution of 3.3 million guilders, or approximately $2.3 million, making a total of 4 million guilders. It had decided to institutionalize that percentage increase and would pay 4 million guilders in 1997.

20. The representative of Switzerland welcomed the proposal of the European Union and said that Switzerland would maintain its level for 1997 of 3.775 million Swiss francs and would pay before the end of February. Its contribution for 1998 would remain the same and it hoped to contribute the same amount for 1999.

21. The representative of Benin said that his country had paid all its contributions for the years 1990 to 1996, totalling $16,000, and would pay $5,000 per year for 1997, 1998 and 1999.

22. The representative of Mozambique said that his country would pay $10,000 for 1997, 1998 and 1999.

23. The representative of Sweden supported the European Union statement and announced that Sweden would pay 20 million kronor, approximately $3 million, for 1997 and would strive to keep the same level of payments in 1998.

24. The representative of China pledged $168,000 for 1997, of which $60,000 would be in convertible currency, and said that China would make an effort to increase the amount in the future. China would pay $220,000 to trust funds in 1997.

25. The representative of Japan pledged $5 million in 1997 and added that future payment depended upon reforms within UNEP.

26. The representative of Canada pledged 1,025,000 Canadian dollars for 1997 and 925,000 Canadian dollars for 1998 and 1999.

27. The representative of Pakistan pledged $50,000 for 1997 and said that Pakistan hoped to contribute more if the situation improved.

28. The representative of the United Kingdom of Great Britain and Northern Ireland pledged 4.5 million pounds sterling for 1997, which it would attempt to pay early in the year.

29. The representative of Denmark indicated a general pledging level of $2.2 million which, it was hoped, would be increased in the future to encourage other donors to do likewise.

30. The representative of the Republic of Korea said that the contributions of the Republic of Korea had increased over the past three to five years and announced its pledge of $150,000 for 1997, 1998 and 1999. In addition, it had contributed $100,000 for 1995﷓1996 and $100,000 for 1997 to the General Trust Fund for the Protection, Management and Development of the Coastal and Marine Environment and the Resources of the Northwest Pacific Region, as well as $140,000 to a technical cooperation trust fund.

31. The representative of the United States of America said that the United States of America never earmarked contributions but that it had an interest in increasing its level for 1997 by several million dollars, subject to changes in the management of UNEP.

32. The representative of Austria, after indicating support for the European Union statement, announced a pledging level of $500,000 to the Environment Fund, which had already been paid for 1997. Austria would continue at the 1997 level in 1998 and would strive to do the same for 1999. Over the past few years, Austria had paid $4 million to various environmental funds and bodies.

33. The representative of South Africa said that his country would continue to support UNEP and, for 1997, would pay $40,000, twice the amount it had paid in 1996.

34. The representative of Finland reported that his country would maintain the same high level of 17 million mark, approximately $3.8 million, as in recent years, and welcomed the broadening of the funding base of UNEP.

35. The representative of Myanmar made a first-time pledge of $2,000 to the Environment Fund.

36. The representative of Brazil indicated a pledge of $99,000 for 1996 and the $120,000 for 1997; his country would attempt to maintain the same level in 1998-1999 and to pay the amounts early in the year in question.

37. The representative of Germany said that Germany's 1997 contribution of 9.6 million deutsche mark was currently being deposited in the UNEP accounts and that it hoped to maintain current levels, provided that UNEP gained in credibility.

38. The representative of Viet Nam indicated a first-time pledge by Viet Nam of $2,000 per annum for 1997 and similar amounts in 1998 and 1999.

39. The representative of New Zealand indicated that its parliamentary budget process did not permit it to pledge at present but that he was advocating an amount of 136,000 New Zealand dollars.

40. The representative of Guinea pledged $2,000 for 1997 and $3,000 for 1998.

41. The representative of Poland pledged $100,000 for 1997 and hoped to increase that annual amount in 1998-1999.

42. The representative of Norway said that Norway had already paid for 1997 and wished to continue its support while making additional contributions of some $600,000 to the development of the PIC, POPs and other conventions.

43. The representative of Kenya pledged $40,000 for the years 1997, 1998 and 1999, all being paid by September of the year in question, in addition to the $32,000 it had paid in 1996.

44. The representative of Nepal pledged $2,000 for 1997.

45. The representative of Australia pledged 1,020,000 Australian dollars for 1997, to be paid in the first quarter of 1997. He said that the adequacy of the responses to the management challenge would be taken into consideration in determining Australia's future contributions to the Environment Fund. At the current point in Australia's budget cycle, it was not possible to indicate what its future contributions would be.

46. The representative of the Czech Republic reconfirmed a pledge of 3 million koruny, or approximately $120,000, for 1997, 1998 and 1999.

47. The representative of Burundi pledged an amount of $4,000 for 1997.

48. The representative of Ghana pledged $10,000 for 1997.

49. The representative of Botswana pledged $7,000 for 1997.

50. The representative of the Russian Federation said that his country would pursue efforts to maintain the same levels for 1998 and 1999.

51. The representative of Thailand pledged to maintain the current level of $10,000 for 1997.

52. The representative of Burkina Faso said that his country would pursue efforts to pay a minimum of $5,000 per year, for 1996, 1997 and future years.

53. The representative of Zimbabwe pledged $18,200 for 1997.

54. The representative of Mexico pledged $60,000 for 1997 and $100,000 for 1998 and 1999.

55. The representative of Trinidad and Tobago pledged $10,000 for the period 1997﷓1999.

56. The representative of Philippines pledged $15,000 for 1997 and $20,000 for the period 1998-1999.

57. The representative of Swaziland pledged $6,000 for 1997.

58. The representative of Sri Lanka pledged $5,000 for 1997.

59. The representative of Panama said that Panama had already paid its contribution of $4,000 for 1997, and would endeavour to increase the amount of future contributions.

60. In addition, at the 10th plenary meeting of the Council, on 4 April 1997, the representative of Turkey announced that his Government's contribution to the Environment Fund would be increased from $15,000 to $100,000, beginning in 1998, subject to parliamentary approval.

Action by the Council

61. On the recommendation of the Committee of the Whole, the Council, at its 8th meeting, on 7 February 1997, adopted the following decisions under this item: decisions 19/23 to 19/29 A, 19/30 and 19/31. At the same meeting, the Council adopted decision 19/22, on the Environment Fund budgets, on the basis of a draft prepared by a working group on budgetary matters that had been established for that purpose. In addition, the Council, at its 10th meeting, 4 April 1997, also adopted decision 19/29 B under this item. The text of those decisions is contained in annex I to the present proceedings and the process of adoption, including any comments made at the time, is recorded in chapter II above.