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DESIGNATION OF A PERMANENT SECRETARIAT: The Secretariat introduced the Designation of a Permanent Secretariat (PS) and Arrangements for Its Functioning (A/AC.241/44) explaining that the issue has two tracks: location, which will be addressed through written submissions for INCD-9, and administrative arrangements for the PS. Most of the document is a response by the UN Secretary General (SG) to a request from INCD-7 regarding possible support for the PS without fully integrating it into the work programme or management structure of any programme. Paragraph 21(a), paying for core staff from the UN regular budget, should be disregarded because of the UN's current financial uncertainty.

Greece on behalf of OECD countries said input is needed from capitols before discussing details. He suggested renewing the invitation to potential host organizations, and offered to submit a draft decision. Bangladesh said formal offers from potential hosts were missing, but the Secretariat said there had been no formal offers. Argentina suggested following the example of the Climate Convention; to be institutionally linked to, but not integrated into, any UN department.

Senegal said the decision could be a middle ground between attaching the PS to the UN Secretariat or to one of two institutions being mentioned. He favored attaching the PS to the UN with support from specialized agencies.

Morocco said delegates need to understand the institutional link while maintaining the sovereignty of COP. Benin suggested that the Secretariat should encourage a rapid development of an understanding specifying possible support from specialized agencies. The Secretariat said INCD can decide an appropriate time to request inputs.

France said discussion of a PS linked to the UN but not integrated fully precludes consideration of other organizations such as UNEP, which satisfactorily supports the Vienna Convention and Montreal Protocol. The Climate Convention could be a model but it is unclear how a small machinery will function within the UN Secretariat. Integrating the PS with UNEP or UNDP would support it with funds the UN SG cannot supply. Morocco said paragraph 23 provides an opportunity to obtain additional information from the SG. Although options with other organizations should be maintained, an SG proposal on support for the PS is needed. Argentina said difficulties and successes of secretariats supported by UNEP should be considered.

Cameroon, on behalf of the African Group, and Cuba supported Benin's and Morocco's requests for additional information. Djibouti said paragraph 21(a) impacts others promising support for core PS staff.

The Chair summarized, suggesting that delegations submit written comments to the Secretariat. The Secretariat would prepare a summary document with Parties' submissions as well as responses from institutions to information requests, including a new report from the SG. France said international organizations should also be requested to report how they could replace the SG's support.

FINANCIAL RULES OF THE COP, ITS SUBSIDIARY BODIES AND THE PERMANENT SECRETARIAT: The Secretariat introduced the subject as contained in document A/AC.241/45. Financial experts say the cost of administering three trust funds or one trust fund with three supplementary accounts is comparable, and processing a financial contribution of any amount costs US$500. The Secretariat has prepared models on percentage rates for the scales of contribution, but because these vary depending on the number of Parties to the Convention, presentations are best done to individual delegations so as to address their interests. The models demonstrate that the effect of large or small contributions is insignificant. The issue is whether to do away with small contributions.

The Group only considered paragraphs 1 through 4 and was unable to agree on bracketed text.

Paragraph 1 limits the scope of the financial rules to either the institution hosting the permanent secretariat or the UN. There was no debate because the decision depends on the selected institution. Austria, supported by Canada and Switzerland, suggested deleting the provision that these rules apply "unless the COP decides otherwise" because this is addressed in paragraph 24. Cameroon, on behalf of Africa, said he prefers to retain the provision because it is not in the current rules. Otherwise, Senegal added, the SG would always require a COP decision to operate. France suggested to retain the bracketed phrase but add that the COP can only do so "by consensus."

Paragraph 2 provides for a biennium financial period with an even-numbered first calendar year. Although no text was bracketed, the Netherlands, supported by Switzerland and others, pointed out that a crisis would arise during the third biennium if the COP-1 is held in 1997. Morocco suggested harmonizing the budget year to those of recent conventions.

Paragraph 3 focused on the currency to be used in the preparation of the budget, either a convertible currency or US dollars. Cuba, supported by Chile, Bangladesh and the UK, suggested deferring the discussion until the location of the permanent secretariat is determined. Benin, supported by Senegal, said US dollars should be retained because the reference to convertible currencies discriminates against some countries that may wish to host the permanent secretariat. Uganda prefers US dollars because the secretariat should be administratively linked to the UN and for cost-effectiveness.

Paragraph 4 suggests whether the budget is considered at an ordinary or extraordinary session. Australia, supported by Switzerland, suggested deleting "ordinary or extraordinary." Lesotho proposed "the COP shall at its session consider.... " Several delegations preferred retaining "ordinary." Cameroon said UN rules do not permit the adoption of budgets at extraordinary sessions. Bangladesh said extraordinary sessions are cumbersome to convene. Panama said not all states would be able to attend extraordinary sessions. France noted that the crisis identified in paragraph 2 for the third biennium would result in annual meetings of the COP at which budgets are approved in extraordinary sessions.

Cuba's proposed amendment was: "The COP shall consider and adopt at an ordinary session, prior to commencement of the financial period it covers...."

Paragraph 6 provides for the permanent secretariat to make transfers across budget lines. Due to time constraints Canada's suggested amendment permitting "transfers between such appropriation lines which the Conference of Parties may authorize from time to time" was not considered.

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