WTO news: what’s been happening in the WTO

12 December 2002

General Council chairperson outlines budget committee’s task on WTO staff pay

On 12 December 2002, the General Council approved a new budget which includes salary adjustments and a commitment to further work on a more permanent method of calculating salaries. Chairperson Sergio Marchi described elements of “an objective and credible process” for achieving a fair outcome.

Statements were also made by Director-General Supachai Panitchpakdi and the WTO Staff Council.

General Council chairperson’s statement on Budget, Finance and Administration Committee report

On behalf of the entire WTO membership, let me extend my appreciation and compliments for the hard work that the Chairman and members of the Budget Committee, together with the Secretariat, have put into this report.

As in many administrations, the budget cycle involves a very concentrated period of work involving matters of complexity and sensitivity. In this regard, I know many Members think it would be helpful to work towards a more long-term budgetary planning process, which could encompass broader considerations and aid a smoother handling of the work.

Concerning the elements in the report dealing with Secretariat staff salaries and allowances, I have had some consultations with the Director-General, with members, and with representatives of the Staff Council. I should underline that these consultations have been marked by a positive and constructive spirit on all sides. I know it is widely recognized that, while the WTO is a member-driven organization, a close partnership between Members and the Secretariat has always been essential to its success and will remain so in the future.

The General Council will take a decision today on the overall budget and its components. The proposed increase of 8.3% over last year represents a considerable effort by Members. At the same time, I am confident that we will all continue to receive a very good return on our investment in this organization, at this crucial stage in its life.

As Members are aware, the budget provisions include a salary adjustment for the Secretariat of 4%; 3% awarded on January 1, 2003 and the remaining 1% on July 1, 2003. The Budget Committee has also recommended such further adjustment as is necessary to restore parity with the UN Common System. In addition, the Committee recommends that it carry out a review of the methodologies for future pay adjustments, to be completed by March 31, 2003.

In reviewing these methodologies, the Committee will have to undertake a very important task in a rather short time. We all have an interest in an objective and credible process which produces a fair outcome. To help guide the Committee's work, the following elements should be taken into account:

(a) The work should begin as soon as possible in the new year and the recommendations which result from it should be forwarded to the General Council no later than 31 March 2003. In addition, the Committee is requested to make a progress report to the General Council, at its meeting on 10/11 February 2003;

(b) To assist the Committee, appropriate opportunity should be given to the Secretariat staff to be fully consulted and to express their views;

(c) In developing methodologies, the Committee should aim to provide WTO staff salaries, benefits and other conditions that are sufficiently competitive internationally to attract and retain a highly skilled and motivated staff;

(d) To enhance the predictability of the remuneration system, the methodologies that result from the Committee's work should be implemented fully and in good faith by all concerned;

(e) In order to ensure a smoother evolution in salary levels and facilitate overall budgetary planning for Members, salary adjustments based on the agreed methodology should be made on an annual basis.

I believe that these elements will help the Committee to arrive at a remuneration system which will be equitable and forward looking. I know I speak for all Members when I say that we look forward to seeing this work on salary review methodology carried out in a way which reinforces partnership and mutual respect. And I say this in the knowledge that the membership and the secretariat staff are united in their commitment to this organization and what it stands for.


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Statement by the Director-General 

The consensus on the budget is welcome and necessary. I would like to highlight my appreciation for the work and efforts of the Chairman of the Budget Committee, Mr. Neil McMillan.

I also fully appreciate the efforts of delegations who have, despite the prevailing climate of financial stringency, taken into account to the maximum extent possible the wider context of our human resources needs, even if it was not possible to meet in full what we had asked for as a reasonable increase.

Mr Chairman, I am particularly grateful to you for your own active and constructive influence on the budget discussions. The statement which you made just now complements in a very useful way the recommendations of the Budget Committee.

I will do my best to ensure that the resources made available to the Secretariat will be optimally used, in particular for work related to the DDA. It will be a challenge to manage this workload up to and beyond Cancún.

I note the interim measures agreed by the Budget Committee which will allow WTO Secretariat pay to catch up with UN rates by, at the latest, 1st July next year. Now that the UN pay increases for professional staff have been decided, we will discuss with Members how to factor that into the Committee's package.

Interim measures, by definition, are not intended to solve the whole set of problems which have arisen following the 1998 decision to take the WTO out of the UN Common System and to set up a fully independent Organization.

The methodology review, which is to be completed by 31st March next year, will be a vitally important next step. I cannot emphasize strongly enough the importance of an agreed-upon methodology in settling the terms and conditions of employment for the Secretariat. A reasonable outcome that reflects the value Members place on a highly trained and internationally recruited staff is the best way to forestall future problems. I look forward to working closely with the Members in that process; to defining objective criteria and parameters for the review; to determining future pay scales; and to setting up a system for more regular, annual adjustments.

I noted and welcomed, Mr Chairman, some helpful references in your statement to various aspects of the methodology review. I look forward to the progress report which will be made to the General Council at its next meeting in February.

As you know, many of our staff feel – I think with some justification — that there has been a tendency in recent years for the Members to demand greatly increased output for modestly increased input. We must all recognise that this approach ultimately has its limits.

I have considerable sympathy with a number of the issues raised by the staff. We do need more resources overall. We do need to attract and retain high quality staff. We surely should by now have already had a settled and equitable mechanism to adjust salaries regularly. It is certainly not the best budget practice – and it is certainly inappropriate human resource practice — to rely so heavily from year to year on temporary assistance to perform work which is of a permanent nature.

Having said this, as the person responsible for making sure that the Secretariat carries out the Members' directions in an efficient manner, I have always — and will continue — to call for moderation and discussion. In particular, the DDA cannot be put at risk. Next year we face important deadlines and a vital Ministerial Conference. I also have to recognise, as I have already said, that the Members have their own constraints.

I believe that at this stage we should all be forward-looking. Let us all concentrate now on carrying out the Budget Committee's recommendations — as complemented by your statement, Mr Chairman — adding substance as we go along to the various important tasks set out for next year.

As we have discussed previously, Mr. Chairman, and as you implied in your important statement, this annual, ad hoc, bargaining exercise which we call the budget is no longer good enough for an Organization as important as this one now is. There should be more planning and strategic thinking for the future. That way, both the Secretariat and Members will have greater predictability and fewer surprises.

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Statement by the WTO Staff Council 

The WTO stands at a cross-roads. Since the conclusion of the Uruguay Round, the Secretariat has responded with commitment and energy to the many demands placed upon it by Members. Indeed, since 1999 alone, workload has increased by around 30%. Today, we are in the early stages of a new Round, and Members will expect much from the Secretariat as these negotiations proceed towards Cancun, and beyond.

However, a serious structural imbalance in the staffing of the Secretariat has emerged. In the last few years, the increase in Members' demands has far exceeded the human resources Members have provided. Further, to attempt to tackle the increase in workload, Members have created, in the Secretariat, an unhealthy reliance upon temporary assistance to perform work which is permanent in character.

The recommendation by the Budget Committee to provide only 6 new posts, instead of the 12 the Director-General requested, does not even begin to address the structural imbalance. Far less will the problem be solved by re-allocating existing posts because shifting already stretched resources will not alleviate the pressure on staff. Indeed, re-allocation of existing staff will have an inevitable impact on the level of service the Secretariat can provide Members. Similarly, failing to budget the sums spent last year on temporary assistance also sends a curious message in a Ministerial year, when workload is likely to be higher.

In short, none of these recommendations by the Budget Committee will address the underlying concerns of staff that the Secretariat does not have adequate human resources to provide the quantity and quality of work Members expect to receive. The staff is disappointed by the makeshift approach that the Budget Committee has adopted to resolve these important issues.

This year is also the first time that the Director-General conducts a pay review under the WTO staff regulations. The Budget Committee has rejected the perfectly reasonable methodology presented by the Director-General, but offers no alternative methodology in its place. In the absence of an objective, stable and clear methodology underlying the recommended interim measures, these recommendations are not consistent with the case-law of the ILO Tribunal.

The staff is extremely disappointed that the Budget Committee's pay recommendations fall far short of the Director-General's original proposal for an 8% adjustment. This adjustment is needed, today, to restore WTO pay to competitive levels.

The recommended interim measure is to “restore parity”, on a grade-by-grade basis, with the UN, for all staff. Yet, just three years ago, Members established an independent WTO secretariat, with its own staff rules. These rules contain an explicit rejection of the UN common system of pay and benefits. It is incomprehensible to staff that Members should seek now to re-apply the UN rules to staff. The message is that there is no independent WTO Secretariat, applying its own rules.

In practice, restoring UN parity for all staff would be extremely difficult. The WTO has a different system of benefits. The UN has some benefits we do not have, and the level of other benefits is different at the UN. Parity for all staff can only be achieved by applying the UN compensation rules to each WTO staff member. This cannot be consistent with an independent Secretariat.

Even though, in law, it is for the Director-General to decide and apply a methodology this year, the Budget Committee has recommended that a methodology be agreed next year, and applied the year after.

Besides failing to respect the deadlines in the staff regulations, the recommendation of the Budget Committee on the methodology gives undue prominence to the UN system. However, in other key areas, the recommendation is too vague. We have waited many years for vague language to be converted into concrete results. This year, we have watched the Budget Committee reject a good pay study for no good reason. This causes great concern to the staff as we work towards the adoption of a methodology for the future.

The staff urges the General Council to provide concrete parameters for the discussions on the methodology through the adoption of a set of guiding principles:

  • The General Council should state that the methodology will compare WTO pay with pay at other international organisations doing comparable work—not just the UN.
  • The General Council should state that the methodology will be applied annually and the results implemented automatically.
  • The General Council should call for the methodology to be applied in 2003, instead of trying to achieve parity with a different organisation, applying different rules. By applying the methodology in 2003, Members will ensure that WTO pay is determined according to WTO rules.
  • The General Council should also recognise the important role of the Director-General and the legitimate role of the staff in developing the new methodology.

The WTO stands at a crossroads. We, the staff, want Members to understand our profound commitment to the success of the WTO and the objectives of Members' common undertaking. We try, at all times, to be a committed and highly motivated work-force. But we hope that Members now see the need to affirm their commitment to staff and to build upon the institutional foundations of the WTO.