Letter sent by the Staff Committee to the Secretary General in response to his presentation on the budgetary situation for 2011

  Yesterday, May 25, 2010, the attached letter was sent to the Secretary General.  In it, the Staff Committee presents its position regarding the measures proposed by the Secretary General in his presentation to the Permanent Council on the budgetary situation for 2011, and reiterates its call for dialogue.

                                                                                                   Washington D.C., May 25, 2010

SA 41/09-10

Mr. Secretary General:

Aware of the gravity of the financial situation of the Organization and of the need to find lasting solutions to these difficult circumstances as soon as possible, the Staff Committee carried out a detailed analysis of your May 6, 2010 presentation to the Permanent Council concerning the 2011 budgetary situation, and in which you proposed “the non-payment of the 2011 Cost of Living Adjustment (COLA) [….], equivalent to US$2.7 millions”.

As part of its evaluation, the Committee requested a meeting with the staff of the Organization and yourself, which took place on May 11, 2010; the Committee further requested additional information from Frank Almaguer, in his capacity as Secretary of Management and Finance, to obtain a breakdown of the financial situation supported by your proposal, information which was provided to the Committee this past May 24.  The Committee further asked the staff to present suggestions on alternatives of savings in the operations of the General Secretariat, and held a meeting with the Consultative Committee of the Staff Association on May 24, 2010.

In addition, the Committee analyzed the historical records concerning the modification of the General Secretariat’s staff compensation system and in particular resolution AG/RES. 1319 (XXV-O/95), which examines the responsibility of the States and of the General Secretariat to “be fully aware of the corresponding budgetary implications, obligations, and costs” under the new system.  The Committee further reviewed the May 13, 1994 Judgment No. 124 of the Administrative Tribunal which recognizes the cost of living adjustment as a “legal obligation that is binding on the Organization and, correlatively, a staff right”.

Based on the conclusions drawn from this analysis, the Committee unanimously expresses its disagreement with the General Secretariat proposal as it considers that this proposal would negatively impact both active and retired staff.  Similarly, the Committee considers that this is not the appropriate moment to carry out a staff referendum on this issue.

To come to these conclusions, the Committee took the following into consideration:

1.                   That, according to the data provided by the Secretariat of Management and Finances, the projected cost of the COLA adjustments - including increases applicable to professional and general services staff - amounts to US$ 1 million and not to the 2.7 millions which constitute the baseline of the proposal.

2.                   That, even though the proposal considers postponing the payment of the COLA for only one year (2011), there are no guarantees that the Organization will have the necessary resources to reestablish it in 2012, nor to pay back the 2011 amounts in the form of a differed settlement, which would have irreparable consequences on the U.N. parity system.

3.                   That the proposal also does not constitute a long term solution to the current financial situation of the Organization.  In that regard, the Board of External Auditors in its Report to the Permanent Council (2008-2009), indicated that two key decisions had to be made by the Member States to remedy the structural deficit: first, increase the quotas paid by the countries to cover the immediate deficit; and second, implement a system of annual increases in quotas in order to attend to the inflationary cost increases.

With the aim of responding to your call for a “joint effort” to face the current financial crisis, the Staff Committee wishes to reiterate its willingness to hold a dialogue with the Administration and participate in the search for cost reduction alternatives, as long as these would not affect staff stability.

It is important to underscore however, that these alternatives will mostly depend on the decision concerning the budgetary ceiling to be adopted by the Member States at the General Assembly. As such, the staff will only be able to respond in an informed manner to a referendum-based consultation based on a pronouncement from the Member States. 

Mr. Secretary General, the cost of living adjustment guarantees that salaries do not depreciate overtime, and was recognized as a right by the Administrative Tribunal (Judgment 124).  We trust in your leadership and capacity for dialogue and compromise to transmit to the Member States the importance of not undermining this right.

                   In the assurance of our highest consideration, we extend a cordial greeting.

René L. Gutiérrez

President, Staff Association

María Claudia Pulido                      Beatriz Santos                                     Joel Andrews

Catherine Pognat                            Martha Beltrán                                    Moises Benamor

Michael Thomas                             Juan Monticelli                                 María del Carmen Palau