CM(2003)27 24 February 2003
835 Meeting, 10 April 2003
11 Administration and Logistics
11.1 Co-ordinating Committee on Remuneration (CCR)
Co-ordination: 2002 Activity Report
Report by the Chairman
(Item to be prepared by the GR-AB)
1.1. The Co-ordination system was set up in 1958 by the Councils of six international organisations known as the "Co-ordinated Organisations"1 to relieve them of the tasks involved in setting up their officials' pay and pensions. This assistance mechanism operates within the framework of tripartite discussions amongst three Committees: the Co-ordinating Committee on Remuneration (CCR), composed of national delegates from the Member countries of the Organisations; the Committee of Representatives of the Secretaries-General (CRSG), made up of representatives of the Secretaries/Directors-General of the Organisations; and the Committee of Staff Representatives (CRP), in which the Organisations' staff representatives take part.
1.2. In 2002, the Committees' work focused essentially on the review of the remuneration adjustment method for the staff of the Co-ordinated Organisations. At the request of one of those Organisations, the CCR also addressed the issue of the education and expatriation allowances, and that of daily subsistence allowances.
1.3. Co-ordination activities were marked by two major developments. First, for lack of a consensus within the CCR on a new remuneration adjustment method and on the adjustment of remuneration at 1 January 2003, I had to prepare, in compliance with the rules, two Reports which were issued from me as Chairman rather than from the CCR. Second, the CCR was approached by one of the Co-ordinated Organisations to give advice on proposals arising within that Organisation for reform of the education and expatriation allowances and daily subsistence allowances for staff travelling on duty.
2. The Committees
2.1. I have chaired the CCR since 1999, and my term of office was extended for another year as from July 2002. The offices of the CCR's Vice-Chairman and Legal Adviser were held by Mr. Ulrich Kullmann. Mr. Kullmann's term ended on 31 December 2002, and he will be replaced by Mr. Günter Schmidt. Mr. Pierre-Dominique Schmidt (OECD) served as Chairman of the CRSG until January 2002. In the absence of a successor, the Vice-Chairman, Mr. Peter Emmett (NATO), continued to serve as acting Chairman. The current Chairman of the CRP is Mr. Gianni Palmieri (Council of Europe), and its Vice-Chairmen are Messrs. Emilio Gasparini (NATO) and Jean-Louis Rossi (OECD).
2.2. In all, five Co-ordination sessions were held in 2002, including five half-day joint meetings of the three Committees. Each Committee also met separately, as needed, and in bilateral meetings.
3. Assistance provided to the Co-ordination system
3.1. The Inter-Organisations Section (IOS) provided technical assistance in the realm of remuneration and prepared the working documents providing the basis for the work of Co-ordination. The Joint Pensions Administrative Section (JPAS) provided the Committees with its expertise in the area of pensions.
4. Main activities
4.1. Remuneration adjustment method
4.1.1. In the absence of a CCR recommendation on the revision of the remuneration adjustment method within the deadlines imposed by Article 1 of the Annex to the 80th Report [CCR/R(97)7], the validity of the existing method, in line with the procedure, had been extended automatically for one year, until 31 December 2002 [127th Report of the CCR, CCR/R(2001)5]. This extension presupposed that the CCR could achieve consensus on a new adjustment method at its meeting in June 2002, as required by the rules.
4.1.2. Negotiations on a new method therefore resumed in January 2002 with a view to reaching consensus on the issues to which the CCR had not been able to find agreement, in particular the CRSG's proposal, endorsed by the CRP, to introduce a new reference index that would reflect not only salaries paid by national civil services, as in the past, but also salaries paid by the private sector and other international organisations, all suitably weighted.
4.1.3. After long and arduous discussions in January, March and June 2002, focusing mainly on the affordability clause, and after considering new compromise proposals by the CRSG and the CRP, the CCR failed, for the first time since its creation, to achieve consensus within the stipulated time frame on a recommendation for a new remuneration adjustment method. Pursuant to the procedure, I therefore prepared my own Report [139th Report, CCR/R(2002)3]. Aware of the implications of this failure for all of the Co-ordinated Organisations, and in particular for the work of Councils, which were thus obliged to take up discussions that had already taken place in the CCR, I addressed a letter [CCR/P(2002)6 of 12 July 2002] to Councils' permanent representatives and national delegates setting out my views on how and why we had come to this deadlock.
4.2. Adjustment of the remuneration of the staff of the Co-ordinated Organisations at 1 January 2003
4.2.1. Each year, at its November session, the CCR formulates a recommendation on the adjustment of remuneration for the staff of the Co-ordinated Organisations for the following year. Until now, this subject had been mentioned only briefly in my previous annual Reports and those of my predecessors, because the CCR's recommendations on the annual remuneration adjustment had taken the form of a virtually automatic application of the results of calculations of the adjustment carried out according to the methods in force. This year the recommendation warrants special attention since for the first time in its history the CCR did not achieve consensus on the subject. Pursuant to the Regulations concerning the Co-ordinating System, I was therefore obliged for the second time this year to write a Chairman's Report [CCR/R(2002)7]. As I wrote in the cover letter to the Report, this failure stemmed from the fact that discussions had been complicated by two factors: firstly, the introduction of a new element into the method for calculating the reference index on the basis of which the adjustment is made, which led to unexpected results; and secondly, divergent interpretations of the relevant provision of the method that prompted discussions and was behind the lack of consensus.
4.3. Requests for CCR opinions regarding the education, expatriation and daily subsistence allowances
4.3.1. On 3 September 2002, I received a request for the CCR's opinion on a proposed reform of expatriation and education allowances at NATO. NATO's request was consistent with the 128th Report of the CCR on salary levels [CCR/R(2001)6], which recognised that Councils of the Co-ordinated Organisations could take measures individually that they deem necessary to meet their particular needs in terms of managing pay and benefits for their staff. This request was examined by the CCR at its November session. The CCR was obliged to note that, in accordance with the Regulations concerning the Co-ordinating System, it was not competent to formulate an opinion regarding proposed reforms applicable to only one Organisation, but only on reforms applicable to all six Co-ordinated Organisations. It was therefore unable to follow through on NATO's request for an opinion.
4.3.2. In this context, the CRSG, on behalf of the six Co-ordinated Organisations, submitted a proposal to reform the education allowance that took an entirely new approach. Aware of the impossibility of submitting a detailed proposal that could fully satisfy the diversity of the needs of the Co-ordinated Organisations because of their differing geographical locations, constituent Member countries and educational facilities in the Organisations' headquarters and duty station countries, the CRSG proposed the establishment of a general framework, within which each Organisation would have latitude to set detailed implementation rules of the allowance that would fit into the categories defined in the general co-ordinated framework. The CCR is to examine this proposal at its January 2003 session.
4.3.3. In October 2002, I received another request from NATO, for an opinion concerning a proposed revision of the daily subsistence allowance, and in particular the way in which such allowances were granted to staff travelling on duty, without changing either the method of calculation or the amounts involved. In order to avoid the CCR having to decline another such request on the grounds that the reform would be applicable to only one Co-ordinated Organisation, I invited the CRSG, after consultation with the CCR's Legal Adviser and the Vice-Chairman of the CRSG, to consider submitting a request on behalf of the six Co-ordinated Organisations for a review of the CCR's 50th Report [CCR/R(95)3], which governs the subsistence allowance, modelled on the CRSG's proposal with regard to the education allowance. This issue too will be examined at the January 2003 session.
4.4.1. The CCR made eight recommendations that were the subject of Reports to Councils. These recommendations dealt essentially with special remuneration adjustments in Turkey and with adjustments at 1 January 2003 of kilometric allowances and daily subsistence allowances. In the absence of a CCR consensus on a recommendation, as stated above, two Chairman's Reports were submitted to Councils, one on the review of the remuneration adjustment method for the staff of the Co-ordinated Organisations (139th Report) and the other on the adjustment of remuneration at 1 January 2003 (143rd Report) (see attached list of Reports in Annex 1).
4.5. Other activities
4.5.1. The CCR had the opportunity to review the draft IOS and JPAS budgets for 2003 presented by the CRSG, on which the Committee conveyed its opinions.
4.6 Programme of work for 2003
4.6.1. As stated above, the Committees will be examining the CRSG's proposed reforms of the education and subsistence allowances. These will be reviewed in conjunction with the discussions of Co-ordination reform that the Committees have already begun and will continue in 2003.
5.1. I repeat my regret that the CCR was unable in 2002 to fulfil its mission of providing Councils with clear and agreed recommendations on issues of remuneration and working conditions for the staff of the Co-ordinated Organisations. The CCR's failure to reach agreement has in effect passed to Councils the task of resolving difficult and disputed remuneration issues. I recall that the CCR was set up precisely to avoid that situation.
5.2. Looked at positively, this failure presents a real opportunity for all parties to Co-ordination to identify the system's weaknesses and to prepare the reforms that will restore it to full relevance. I believe that this can be achieved provided that a number of conditions are met.
5.3. All parties must be prepared to accept change. They will have to address some fundamental questions. When the co-ordination system was set up, it was on the basis of a rigid framework of rules common to the six Organisations. The CCR has performed its duties within that context over the decades, but with growing difficulties in recent years. It may well be that the original framework no longer serves the Organisations' needs, given the environment in which they must now operate. If so, the parties will have to redefine co-ordination, and devise new methods of work so as to draw up new rules which, while common to the six Co-ordinated Organisations, can vary in their specific applications so as to meet the individual Organisations' needs. The review of the education allowance and of the daily subsistence allowance for staff travelling on duty, with which the CCR will have to deal in 2003, provides a first test.
5.4. I hope that the CCR and the other two colleges, working in open dialogue, will be able to demonstrate their capacity to evolve, and to meet the expectations of Councils.
List of CCR Reports and Reports by the CCR Chairman
CCR/R(2002)1 137th Report: Turkey: Special Adjustment of Remuneration at 1 March 2002
CCR/R(2002)2 138th Report: Daily Rates of Subsistence Allowance: Exceptional Review at
1st July 2002
CCR/R(2002)3 139th Report: Remuneration of the Staff of the Co-ordinated Organisations:
General Review (Report by the CCR Chairman)
CCR/R(2002)4 140th Report: Turkey: Special Adjustment of Remuneration at 1 September
CCR/R(2002)5 141st Report: Review at 1 January 2003 of the Daily Rates of Subsistence
Allowance for Staff of the Co-ordinated Organisations
CCR/R(2002)6 142nd Report: Review at 1 January 2003 of the Amount of the Kilometric
CCR/R(2002)7 143rd Report: Annual Adjustment of Remuneration of the Staff of the
Co-ordinated Organisations at 1st January 2003 (Report by the CCR Chairman)
CCR/R(2002)8 144th Report: Turkey: Special Adjustment of Remuneration at 1 December
Position of the Committee of Staff Representatives (CRP)
1. The CRP wishes to assure the Councils that it is available to co-operate fully in the consultations and analysis which are to lead to a reform of Co-ordination. It is clear that the two severe set-backs suffered by the CCR in 2002, as regards both the method of adjustment of remunerations and the salary adjustment at 1 January 2003, show the pressing need to adapt existing mechanisms to the evolving requirements of the Organisations and to social reality.
2. However, referring to paragraph 5 of the CCR Chairman's report, the CRP is convinced that the redefinition of working methods and the introduction of new rules must precede any decision on specific allowances, decisions which should be based on proposals made in the light of a method of functioning of Co-ordination other than that which is adopted in practice today. This applies in particular to the CRSG's proposals concerning the education allowance and daily subsistence allowances.