Speakers Weigh Impact on Staff, Spending, as Fifth Committee Reviews Proposal for Improving Service Delivery Worldwide
Speakers considered the impact on staff and spending, as the Fifth Committee (Administrative and Budgetary) today reviewed some key proposals to better serve United Nations Secretariat staff worldwide and achieve greater efficiency in the procurement of goods and services annually costing the Organization $3 billion.
The global service delivery model would consolidate the Secretariat's fragmented administrative structures into four Global Shared Service Centres in different time zones Nairobi, Shenzhen, Budapest and Montreal in a bid to improve the responsiveness, efficiency, transparency and accountability of service delivery, said Christian Saunders, Assistant Secretary-General for Supply Chain Management, who introduced the Secretary-General's most recent report containing the proposal. The proposal complies with the General Assembly's requirement, in resolution 72/262 C, for one centre based in Africa, coverage for French-speaking staff and maintaining a follow-the-sun support model, he said. The shared service centres are projected to cut spending by about $49 million during the first five years of operations, and by $23 million annually.
This is a significant change to the way services are traditionally delivered in the Secretariat, and it will affect staff to varying degrees, he said, adding that the Organization is committed to proceeding with the utmost consideration for those affected, including staff occupying the 747 posts proposed for abolishment.
Cihan Terzi, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing its related report, endorsed the proposal, yet said the Advisory Committee expects the Secretary-General to make every effort to mitigate its impact on affected staff and to develop a detailed benefits realization plan with quantitative and qualitative indicators for measuring progress.
The United States representative said the global service delivery model is an important initiative that would transform the work of the Organization and help create a more efficient entity. She warned, however, that having four centres runs counter to the aim of consolidating service delivery and will only perpetuate fragmentation.
Japan's delegate questioned the technical rationale for establishing four Centres, recalling that the Secretary-General's past two reports contained proposals respectively for three locations, and a gradual consolidation into two sites. Further, the Joint Inspection Unit report described cases where the majority opted for a single location. Creating unjustifiable inefficiencies due to political considerations would waste money and be unfair to those affected, she stressed.
Delegates from three of the four countries that would host the Centres � Canada, China and Kenya � supported the proposal. Canada's delegate, speaking also for Australia and New Zealand, said that given the Organization's alarming financial situation, the choice before the budget Committee is clear � either generate back-office savings or watch funds available for mandate delivery spread ever more thinly. This is the reality we collectively must face, he said, and implementation of the global service delivery model is a part of the solution.
As for the Secretary-General's proposal that Montreal would provide services to French-speaking staff in Africa, Nigeria's delegate, on behalf of the African Group, said it is hard to grasp how the provision of human resources and payroll administration services to clients in Africa can be situated outside the continent, especially as there are locations in Africa that can fulfil those functions.
Senegal's delegate said that Dakar is one of such locations in Africa.
Mexico's delegate expressed regret that Mexico City was not chosen and sought transparency, especially about the criteria used for the selection of four Centres. Spanish is the second most spoken language in the world, but this was not taken into account in selecting a centre for the Americas region, he said.
The Fifth Committee also reviewed the Secretary-General's report on procurement, introduced by Mr. Saunders, and the related ACABQ report introduced by Mr. Terzi.
Noting that the Secretariat's direct procurement from developing countries accounted for only 38.7 per cent of the total in 2017, China's delegate encouraged it to adopt more practical measures to increase direct sourcing from those countries.
The Russian Federation's delegate stressed the importance of added steps to ensure accountability and transparency in procurement with a view to getting the best value for money. He sought more detail and analysis on risk monitoring in the next report. On environmentally sustainable procurement, he said the meaning of that concept and how it would be applied in practice must be clarified.
The European Union's representative emphasized the importance of durable procurement, explaining that the Organization's procurement activities should better align with the Sustainable Development Goals by incorporating requirements, specifications and criteria that help the environment, social inclusion, lasting economic development and human rights.
The Committee also heard the introduction of the reports of the Secretary General and ACABQ on after-service health insurance management.
The President of the Federation of Associations of Former International Civil Servants said that health insurance currently covers about 67,000 retirees and their qualified dependents. The Federation is concerned that ACABQ does not support the financing recommendations in the Secretary-General's report. As a result, the United Nations common system remains exposed to growing risks of significant unfunded liabilities, which range from $8.8 billion upwards.
The observer for the State of Palestine, speaking on behalf of the Group of 77 developing countries and China, said that it remains committed to after service health insurance as many staff cannot benefit from the national social security schemes of Member States, owing to their service with the Organization. The Group also looks forward to further discussions on the recommendation to establish a specialized body to provide United Nations system entities with a forum for addressing complex insurance-related issues.
Also speaking today were the representatives of Switzerland, Republic of Korea and Uganda (on behalf of the African Group).
The Fifth Committee will meet again at 10 a.m. on Friday, 22 March, to discuss the proposed amendments to the financial regulations, accountability, whistle-blower policies and practices, and the revised estimates of the 2018 2019 programme budget for the United Nations Monitoring Mechanism.
Global Service Delivery Model
CHRISTIAN SAUNDERS, Assistant Secretary-General for Supply Chain Management, introducing the Secretary-General's report on the global service delivery model for the United Nations Secretariat (document A/73/706), said the new model will consolidate the Secretariat's fragmented administrative structures within and across duty stations, with the goal of improving the responsiveness, efficiency, transparency and accountability of service delivery. Regarding the locations of shared service centres, an independent consulting firm had been hired to assist with the assessment study. The assessment resulted in Nairobi, Shenzhen, Budapest and Montreal being the recommended location in their respective geographical regions. The proposed combination of locations fully addresses the requirements of the General Assembly in resolution 72/262 C, including ensuring that one shared service centre is based in Africa, providing coverage for French-speaking staff, and maintaining a follow-the-sun support model.
The shared service centres are estimated to result in a cost reduction of about $49 million over the first five years of operations, he said. Once the centres are established, there is estimated to be a recurring $23 million annual cost reduction. Total staffing across the four centres is 780 for the first two years of operation, decreasing to 684 from the third year onwards, as efficiency gains and process improvements are realized. A phased implementation will begin in 2020 and with an incremental integration of clients which would ensure that the proposal is fully implemented by mid 2021. This is a significant change to the way services are traditionally delivered in the Secretariat, and it will affect staff to varying degrees, he said, adding that the Organization is committed to proceeding with the utmost consideration for those affected.
CIHAN TERZI, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing its related report (document A/73/791), noted that the present business case reflects higher estimated cost reductions of $23 million and a shorter break-even period of three years as compared with the previous proposal of the Secretary-General. The Advisory Committee also noted the location assessment undertaken in accordance with the criteria set out in General Assembly resolution 72/262 C, including consultation with Member States. Considering the analysis presented by the Secretary-General, the Advisory Committee recommends that the General Assembly approve the proposed establishment and the locations of the Global Shared Service Centres, he said.
Given the significant number of French-speaking clients in the African region, ACABQ noted with concern the time zone gap between the region and Montreal, the centre that would provide French-speaking services to clients in Africa, he said. The Advisory Committee expects that the Secretary-General will provide more detailed information to the Assembly on this matter. The Advisory Committee feels that the benefits realization plan is lacking quantitative and qualitative indicators, which are important for measuring progress, and it recommends that the Assembly request the Secretary-General to develop a detailed benefits realization plan with such indicators, including cost savings and service improvement targets. Regarding 747 posts proposed to be abolished, the Advisory Committee is concerned about the potential impact on staff and the Organization. The Advisory Committee expects the Secretary-General to make every effort to mitigate the impact of the global service delivery model on affected staff, particularly the Regional Service Centre in Entebbe, Uganda.
MAJED S. F. BAMYA, observer for the State of Palestine, speaking on behalf of the Group of 77 developing countries and China, noted that the Secretary General's proposal is the third he has submitted on the global service delivery model. Welcoming his intention to ensure more cost-effective and consistent administrative support, he said the Group looks forward to discussing the various factors taken into consideration during the drafting of the proposal. It puts particular importance on how closely and transparently the Secretariat adhered to the mandate given by Member States through General Assembly resolution 72/262 C, as well as how well Member States were consulted and their views taken into account. The Group will also seek further clarification on the apportionment of costs and the predictability of the funding model. Noting the imbalance of cost reductions in various locations, he said the Group is interested to know how more efficiencies can be achieved at duty stations with the highest staff costs.
Emphasizing the importance of strong host Government relations, he said the Group will seek details on the extent and duration of support offered for the four proposed locations to ensure that the business case for each location is sustainable over the long term. To that end, it stressed the importance of a benefits realization plan with clear indicators that would make it possible to measure progress objectively. He went on to note with concern the selection of Montreal to service French-speaking clients, given their number and geographical spread, as well as the time zone gap between African client locations and that city. He requested that investments made in the Regional Service Centre in Entebbe, Uganda, as well as its significant role, be taken into account, and asked how the Secretary-General will ensure its optimal use.
TIJJANI MUHAMMAD BANDE (Nigeria), speaking on behalf of the African Group, said it is hard to grasp how the provision of human resources and payroll administration services to clients in Africa can be situated outside the continent, especially as there are locations in Africa that can fulfil those functions. Acknowledging that the Secretary-General is recommending that one of the proposed centres be based in Africa, he said there should be an appropriate number of centres that would be commensurate with the continent's various functions and language requirements, particularly with respect to establishing a centre in a francophone country. He drew attention to a lack of clarity regarding remaining processes, given that only 80 out of a total of 387 identified processes are expected to be offered in the first year of operation.
Going forward, he said the African Group will seek clarification on minimum requirements, scoring criteria, methodology and the application of the follow the sun support model. It will also delve into how arrangements of extra budgetary resource commitments played a part in the selection process, including the Secretariat's consideration for offsetting opportunity costs. Turning to peacekeeping, he noted that about 400 posts would be abolished in the 1 July 2020 to 30 June 2021 period in an existing shared service centre. Twenty-four posts funded under the support account for peacekeeping operations would suffer a similar fate by 30 June 2021. It behoves the African Group to question those proposals, given that many peacekeeping operations are based in Africa.
JAN DE PRETER of the European Union expressed the bloc's support for a truly global Secretariat, saying it is time for the Organization to better adapt to its goals. Congratulating the Secretary-General on his proposals, he emphasized the importance of improving efficiency while guaranteeing standardized service delivery norms for all clients. He also stressed the need for sustained momentum in implementing management reform, resulting in concrete results for the Organization as soon as possible. For the European Union, the Committee must take a decision on the global service delivery model with little delay, he said. The bloc agrees with the Secretary-General's vision, as well as the Advisory Committee's observations and it will contribute to negotiations in an action oriented spirit of compromise and consensus.
KENT VACHON (Canada), speaking also on behalf of Australia and New Zealand, pointed to the Organization's alarming financial situation, saying the choice before the Committee is clear � either generate back-office savings or watch funds available for mandate delivery spread ever more thinly. This is the reality we collectively must face, he said, and implementation of the global service delivery model is a part of the solution. The Secretary-General's proposal supports his management reforms, realizes tangible Umoja benefits and accords with General Assembly resolution 72/262 C, he added. The ACABQ has endorsed it and the Assembly should do the same. It is unrealistic to believe that a better outcome would be possible through a political exercise that would likely lead to a proliferation of centres and the loss of all savings and efficiencies, he said. The alternative to an Assembly-mandated process is the status quo, with services delivered inefficiently, expensively and inconsistently, and almost entirely in only one of the Organization's languages. Welcoming the emphasis on multilingualism in the Secretary-General's proposal, he said gains achieved through the global service delivery model will support improved service to United Nations staff while freeing resources for improved mandate delivery.
FELIX SIEGFRIED WANNER (Switzerland), also on behalf of Liechtenstein, said his delegation will, during consultations, seek to know the key factors that should guide the transformation of the global service delivery model to ensure more sustainable qualitative gains for the Organization. It will also ask how the model can best anticipate and incorporate technological change and ensure cost effective service delivery. Emphasizing the importance of motivated and empowered staff, he wondered how their welfare can be safeguarded and the negative impacts of the shift to the global service delivery model mitigated.
CHERITH NORMAN-CHALET (United States) said the global service delivery model is an important initiative that her delegation has supported since its inception. It would transform the work of the Organization as standardization is key to creating a more efficient entity. It also envisions greater cost savings. However, there are some aspects that are concerning to her delegation, including the proposed follow-the-sun approach, which was not endorsed by the relevant General Assembly resolution. Having four shared service centres runs counter to the objective of consolidating service delivery and will only perpetuate fragmentation. A decision has been delayed too long, and one should be made on a version of the model that will improve the Organization and is fit for purpose.
JESASS VELA�ZQUEZ CASTILLO (Mexico) said his delegation has been keenly interested in the global service delivery model, as it fully supports the central goals of management reform. However, there are still legitimate concerns and doubts, especially about the viability of the project. Mexico seeks transparency, especially regarding the criteria used for the selection of four centres, he said, asking that further information be provided during the next informal consultations. Services must be outsourced to low-cost locations. Mexico City vanished from the Secretary-General's report on a potential host for a shared service centre. Stressing that Mexico City offers advantages, he reiterated his delegation's candidacy to host an Americas centre in Mexico City. Spanish is the second most spoken language in the world, but this was not taken into account in selecting a centre for the Americas region.
CHEIKH NIANG (Senegal), associating himself with the Group of 77 and the African Group, expressed its principled support for the global service delivery model. But, with the current proposal, it would be difficult to achieve the overall objectives of the initiative. Also expressing reservation about the transparency of the follow-the-sun approach, he requested publishing the report of the consultant so that the selection of the locations can be objectively reviewed. Noting that 9,000 staff members work in Africa's French-speaking countries, he said Dakar would offer significant assets as a host of a shared service centre.
PHILIP ODIDA (Uganda), associating himself with the Group of 77 and the African Group, said the Committee is discussing a proposal to determine the locations of the Global Shared Service Centres for the third time in fewer than five years. Noting that the Regional Service Centre in Entebbe currently serves 72 per cent of United Nations field operations for 19,400 personnel � including processing some 155,000 payrolls, 25,000 travel requests, 8,700 education grants and more than 65,000 vendor invoices � he noted that a 2017 Joint Inspection Unit study on shared services of other international organizations never mentioned follow-the-sun concept and instead recommended making use of existing centres. In that regard, he called for an examination of the merit of the follow-the-sun model vis-A�-vis the selected locations, while taking to consideration the percentage of Secretariat staff who will be served by each proposed shared service centre. Expressing disappointment over how consultations with Member States were carried out, he also voiced concern that the significant number of French-speaking clients in Africa was not taken into account when considering the time zone gap between that region and Montreal, where the proposed Centre tasked with servicing French speaking clients in Africa would be located. In that context, he also requested an examination of the merit of placing a French centre in Montreal.
YASUKO NISHIMURA (Japan) said that, while the global service delivery model will lead to meaningful cost savings and improved efficiency, its introduction will also cause pain in the form of downsizing various offices. We cannot overemphasize the importance of realizing the potential benefit and efficiency gains of the global service delivery model to its maximum, she said, stressing that it must be efficiently designed. Creating unjustifiable inefficiencies due to political considerations would waste money and be unfair to those affected. The Secretary General's proposal is not convincing that this is the best model for achieving highly effective and the most efficient service delivery. She questioned the technical rationale behind establishing four Centres, recalling that the Secretary-General's past two reports contained proposals respectively for three locations, and a gradual consolidation into two locations. Further, the Joint Inspection Unit report described cases where the majority opted for a single location. She requested a fully convincing explanation for why four Centres is the best solution, noting that the Assembly has never endorsed the follow-the-sun approach.
FU DAOPENG (China), associating himself with the Group of 77, expressed support for the Secretary-General's efforts to improve implementation of the global service delivery model as scheduled. Recalling the Secretary-General's proposal to consolidate 202 location-independent service processes, he expressed support for the Secretariat in improving the consolidation plan and evaluating administrative services processes not covered by the Global Shared Service Centre operations, for the time being. Encouraging the Secretariat to make every effort to mitigate the impact on staff, he said existing regional service centres have offered support to peacekeeping operations and expressed hope the Secretariat will continue to properly use these centres to ensure that returns are maximized. He called on all parties to work on the basis of the Secretary-General's recommendations and the Advisory Committee's conclusions.
GUNJUNG LYU (Republic of Korea), on the topic of the global service delivery model, reiterated that efficiency must be the key element in all related discussions. Despite the Secretariat's efforts, it remains unclear whether establishing the four Service Centres is the most efficient path forward, nor is it clear whether the follow-the-sun model has been endorsed by the Committee. Noting that a step-by-step approach would be a faster way to reach a conclusion on the number of Service Centres and their basic structures, he said their locations could then be discussed. We need to speed up our discussions, as the global service delivery model has already been considered for several years, he added.
JOSEPH MASILA (Kenya), noting that the global service delivery model is underpinned by an urgent need to improve responsiveness, efficiency, transparency and accountability, drew attention to the estimated $23 million annual cost reduction over the first five years of operations once the four Shared Service Centres are established. This is indeed welcome, he said, underscoring ACABQ's recommendation that the Secretary-General make every effort to mitigate the impact of the model on staff. He reiterated Kenya's commitment to honour its host country obligations, and should Nairobi be selected to host a Global Shared Service Centre, the Government will work closely with the United Nations to ensure its smooth functioning.
Management of After-Service Health Insurance
CHANDRAMOULI RAMANATHAN, Controller and Assistant Secretary-General for Programme Planning, Finance and Budget, introduced the Secretary-General's report on managing after-service health insurance (document A/73/662), noting that the report reflects the analysis, conclusions and recommendations of the inter-agency Working Group on the matter. The Working Group on After-Service Health Insurance recommended that all avenues of health insurance cost containment continue to be explored in the context of inter-agency discussions under the auspices of the High-level Committee on Management and that the United Nations system organizations continue to consider all insurance-related harmonization opportunities in support of inter-agency mobility.
The Secretary-General has proposed a balanced approach to fund the Secretariat's after-service health insurance liability by combining a pay as you accrue method for staff recruited after 1 January 2022 with the current pay-as-you-go method to cover staffed recruited until the end of 2021, he said. For the pay-as-you-accrue method, the Secretary-General proposes a payroll charge of 5.35 per cent of salary mass and the creation of a dedicated financial reserve. This charge is to be reviewed every three years to accommodate variances against the projected accumulation of the dedicated reserve. The General Assembly is requested to take note of the recommendations in the present report and to approve the funding of the after-service health insurance obligation in respect of officials recruited from 1 January 2022 with the application of the entitlement accrual mechanism.
Mr. TERZI, ACABQ Chair, introduced its related report (document A/73/792), proposing that the General Assembly take note of the four recommendations of systemwide relevance, but not approve recommendations on funding the after-service health insurance liability from 2022 onward. Welcoming the developments of the system-wide standard template agreement for third-party administrators that reflects industry best practices, the Advisory Committee expects this will lead to optimal terms and conditions of service as indicated in the Secretary-General's report. More options to increase efficiency and contain costs should have been explored and reported on by the Secretary-General. Regarding the Secretary General's proposal to use an entitlement accrual mechanism for staff recruited from 1 January 2022, he noted that there would be no change to the current 10-year eligibility requirement. However, under the mechanism, participants would be required to accrue the entitlement to the Organization's full contributions over a period of 20 to 25 years, rather than the current 10 years. In addition, a payroll charge of 5.35 per cent of mass salary would be applied. The Advisory Committee is not convinced by this proposal.
Furthermore, peacekeeping staff and retirees again were not recruited in the projections for determining the pay-as-you-accrue rate of the funding proposal, he continued, noting that they represented approximately 40 per cent of the combined number of Secretariat and peacekeeping operations' staff as of 31 December 2017. The Committee considers that the absence of such a significant number from the projections may raise concerns regarding the accuracy and scope of the projections, he said. The Advisory Committee, recalling that the General Assembly has recognized that after-service-health-insurance benefit liabilities have been accrued from all sources of funding, continues to believe that the objective of ensuring the availability of adequate resources to settle recognized employee benefit liabilities can be achieved without necessarily and/or immediately creating a reserve. Therefore, the Advisory Committee recommends continuing the pay-as-you-go approach, as endorsed by Assembly resolutions 68/244, 70/248 B and 71/272 B.
MARCO BRESCHI, President of the Federation of Associations of Former International Civil Servants, said that health insurance currently covers about 67,000 retirees and their qualified dependents. Insured retirees, as significant financial contributors to after-service health insurance, have a legitimate, material interest in participating actively in all discussions and reviews of relevant arrangements. The Federation supported most of the Working Group's recommendations, except the proposal for a new entitlement accrual mechanism as it would place an additional financial burden on future retirees. The Federation is concerned that ACABQ does not support the financing recommendations in the Secretary-General's report. As a result, the common system remains exposed to growing risks of significant unfunded liabilities which range from $8.8 billion upwards.
NADA TARBUSH, observer for the State of Palestine, speaking on behalf of the Group of 77 and China, reiterated the great importance it attaches to the welfare of United Nations staff members. The Group remains committed to after-service health insurance as many staff cannot benefit from the national social security schemes of Member States, owing to their service with the Organization, she said. Mindful of the long-term implications of decisions on this issue on future United Nations budgets and staff members, the Group looks forward to informal sessions to seek a more in-depth understanding of both the administrative and funding aspects of after-service health insurance and working with other delegations to arrive at a practical, effective and sustainable solution. The Group also looks forward to further discussions on the recommendation to establish a specialized body to provide United Nations system entities with a forum for addressing complex insurance-related issues, she added.
Mr. SAUNDERS, Assistant Secretary-General for Supply Chain Management, introduced a report of the Secretary-General on procurement activities in the United Nations Secretariat (document A/73/704). He said it provides an update, from the procurement perspective, on progress made to date in establishing a global, integrated, end-to-end supply chain for the United Nations in line with the Secretary-General's management reforms. The newly established Office of Supply Chain Management, inside the Department of Operational Support, now includes logistics and procurement divisions, as well as a Uniformed Capabilities Support Division and an Enabling and Outreach Service, forming the Organization's integrated supply chain and a single point of entry for uniformed capabilities support. Outlining some of the new Office's priorities, he cited the importance of building a blue-chip procurement function that clients will seek out not because they are required to, but because its value will help them achieve their mandates.
The Procurement Division places a high priority on increasing access to the United Nations procurement market, in particular for small and medium-sized vendors from developing countries and countries with economies in transition, he said. In addition, the Office is focused on professionalizing procurement; improving transparency and risk management; cooperating within the United Nations system; e-procurement; and innovating and finding alignment with the sustainable development agenda. In that regard, he stressed that it is crucial for the Organization to walk the talk and help stimulate a culture and environment that allows for a more systematic assessment of environmental impact and encouraged market readiness. He proposed that the Regional Procurement Office in Entebbe be renamed the Global Procurement Support Section, in order to reflect its broader client base, and outlined plans for more streamlined and simplified processes decision-making processes, as well as greater transparency and accountability. A new administrative instruction is being finalized. In addition, an updated, simplified and streamlined procurement manual will take into account the latest best practices to help United Nations procurement professionals be more agile and responsive, while ensuring that the Organization receives the best value for money.
Mr. TERZI, ACABQ Chair, introduced the Advisory Committee's related report (document A/73/790), stressing that a strong and operational accountability framework is urgently needed. The role of the Department of Management Strategy, Policy and Compliance should be further defined. Noting that the Secretariat is discussing a proposal to establish one or more new procurement centres, he expected that, if the Secretary-General presents a related proposal to the General Assembly, he will present full justification with analysis on the placement, function, measurable benefits and financial implications. He recommended that the Assembly request the Secretary-General to explore innovative ways to promote procurement from least developed countries, developing countries and economies in transition, emphasizing the need for intensified system-wide cooperation on procurement matters.
Mr. BAMYA, observer for the State of Palestine, speaking again on behalf of the Group of 77, emphasized that opening procurement activities to all Member States is in the Organization's best interests. A greater diversity of products, services and vendors not only strengthens competition and lowers prices, but also ensures that the economic benefits of doing business with the United Nations assist in the promotion of social and economic development globally, he said. The Group looks forward to more details about the proposed regional procurement centres in the Asia-Pacific and the Latin America and Caribbean regions, as well as how the Secretariat will strengthen the Regional Procurement Office in Entebbe to manage global procurement both in the region and beyond the African peacekeeping missions.
Increased delegation of procurement authority must be matched by sufficient guidance, tools and training, he said. Welcoming the increased professionalization of the procurement division, he said the Secretariat should ensure that certificates from internationally recognized authorities in developing countries be included before the certification process becomes mandatory on 1 January 2021. Noting the Secretariat's move towards e-tendering and mobile applications, he said the Group will seek more details on efforts being made to reach vendors unable to access those systems. He went on to stress that the concept of environmentally friendly and sustainable procurement, which the General Assembly has not yet approved, must be based on reasoned analysis on its definition and how it can be applied in practical terms by the Organization.
CAROLINE NALWANGA MAGAMBO (Uganda), speaking on behalf of the African Group, said organization within the new procurement framework is essential to fostering efficient management. Indeed, the Organization's management must understand what authority it can appropriately delegate, in line with the Secretary-General's guidance on the matter. He underscored the urgent need for a strong accountability framework, with a more defined role for the Department of Management Strategy, Policy and Compliance. The Group expects goods and services procured by the United Nations to comply with established procedures, based on international competitive bidding and the widest possible geographical base, and continues to call for a transparent, open, impartial and cost-effective system that reflects the Organization's character.
In this context, he requested the Secretary-General to explore innovative ways to promote procurement from Africa as a unique partner. The Group looks forward to updates on how a global role will be carried out by the Regional Procurement Office in Entebbe, since supporting information and analysis have not been provided on enhancements, efficiencies, savings or benefits. The Group also anticipates the new Office of Supply Chain Management will review this year the request for proposal solicitation methodology for aviation services. He asked that a comparative study of the request for proposal methodology, and the invitation to bid methodology be included in that exercise. In sum, he reiterated the need for a transparent procurement system, a well-defined accountability system, continued development of procurement strategies and equal access to United Nations opportunities for African vendors and suppliers.
SERGE CHRISTIANE of the European Union said procurement should continue to pursue best value through fair and transparent competition. Given the steep increase in procurement activities, there must be a strong accountability framework, together with strong internal controls, oversight mechanisms and transparency. The European Union encourages the Secretariat to ensure fair and transparent market access to tenders from all parts of the world. Emphasizing the importance of sustainable procurement, he said the Organization's procurement activities should better align with the Sustainable Development Goals by incorporating requirements, specifications and criteria that help the environment, social inclusion, sustainable economic development and human rights. It is also critical to ensure that the Organization's activities do not impact negatively on the health, safety and livelihoods of host country populations and United Nations staff, he said.
BRIAN CONROY (United States) noted that more than $3 billion is spent annually on the procurement of vital goods and services within the Secretariat, including for peacekeeping operations and special political missions. It is critical that the procurement function, as part of the broader supply chain management enterprise, operates effectively, efficiently and transparently, in line with industry standards and best practice. The Secretary-General identified vertical and horizontal fragmentation within the United Nations and cited supply chain management and related procurement as one of the largest challenges to the Organization. His delegation believes that the United Nations has a further opportunity to optimize service delivery and consolidate procurement activities, including through the full leveraging of Umoja, increased use of systems contracts and enhanced systemwide collaboration and cooperation. The United States also encourages further progress on implementing the solicitation methodology in long term air charter services.
DONG WEN (China), associating himself with the Group of 77 and recalling that procurement reached $3 billion in 2017, stressed that relevant Secretariat departments should enhance coordination in order to control costs while fulfilling mandates. Noting that the Secretariat's direct procurement from developing countries accounted for only 38.7 per cent of the total in 2017, he encouraged it to adopt more practical measures to increase direct procurement from those countries. Timeliness and transparency should be ensured, and accountability strengthened, he said, noting that China will seek more information from ACABQ on the matter during informal consultations.
Mr. MASILA (Kenya) said he is encouraged by the Secretariat's efforts to ensure procurement opportunities are as open and accessible as possible to vendors, particularly from developing countries and countries with economies in transition. Efforts to professionalize procurement in the Organization are a step in the right direction, as well. A robust procurement strategy must be grounded on sound empirical analysis and a strong business case in order to facilitate informed decision-making. In that regard, he echoed concerns raised by the Advisory Committee to the effect that the report lacks an adequate level of detail and analysis in terms of acquisition planning, demand analysis and contact management.
SERGEY B. KONONUCHENKO (Russian Federation) emphasized the importance of additional measures to ensure accountability and transparency in procurement with a view to ensuring the best value for money. The Russian Federation expects the next report from the Secretary-General to contain more detail and analysis on risk monitoring, enabling the Committee to come up with a more pertinent strategy. On environmentally sustainable procurement, he said the meaning of that concept � and how it would be applied in practice � must be clarified. His delegation opposes any artificial measures that would be discriminatory and distort competition. It is not Adam Smith, but United Nations staff who carry out procurement daily, he said, adding that their decisions must be protected with precise criteria. He went on to request a comparative analysis on the use of solicitation and invitations to tender.
Source: United Nations