SUNS #4430, Thursday, 6 May 1999

From rule-based to rule-less system?

Geneva, 5 May (Chakravarthi Raghavan*) -- After three sittings of its General Council (GC), a week of manipulations and manoeuvres over the selection of the next Director-General and no consensus, the World Trade Organization Tuesday night (4 May) was on the verge of being seen as an institution without rules, and well on its way to losing its legitimacy.

If the aim of the United States, the prime mover behind the candidacy of New Zealand's Michael Moore, had been to make it impossible to decide on Moore by consensus, or enable him to function if elected, and jeopardise the 3rd Ministerial meeting at Seattle, the US Ambassador Mrs. Rita Hayes and her delegation, and Chairman Amb. Ali Mchumo of Tanzania and "facilitator" Amb. William Rossier of Switzerland could not have gone about the job better.

The Council meeting adjourned Tuesday night (4 May) with members in an angry mood, and not very much cooling was evident Wednesday morning -- though there were some hints that Mchumo might try to ease matters at the next meeting.

The Council is expected to reconvene late Wednesday (5 May) or Thursday morning (6 May), according to supporters of Dr. Supachai, who had an open-ended consultation (of some 30-40 delegations) with Mchumo and Rossier.

At the Tuesday evening sitting (4 May) the selection process and the work of the Council, appeared to have been made more complicated, with some real danger of the Chair's role becoming an issue, when he announced that he had eliminated one of the two candidates, Thai Dy. Prime Minister Supachai Panitchpakdi, and that "Supachai is no longer in the race."

With a large number of delegations challenging from the floor the Chair's right to refuse to recognize a validly tabled proposal from Kenya for building a consensus around Supachai, and insisting that the Chair, facilitator or secretariat had no right to "object" to any candidate, and that it was for members to object, it seemed at one stage that the issue was no longer one of Moore or Supachai, but of how the system functions and the role of the Chair.

At a Tuesday night (4 May) press conference, Mchumo reiterated the view that Supachai is out of the race as far as he was concerned, and described his role in eliminating Supachai and placing only one candidate before the Council for a consensus election, as like that of a "referee" in a match, insisting that if his proposal for consensus election of Michael Moore was not accepted, it was his proposal that would have to be voted upon, but that the rules were not "clear" whether voting on a DG had to be by the entire membership (requiring postal ballots) or of those present.

[A reading of the relevant WTO articles and the rules showed that the only exception against voting in the absence of a consensus was at the Dispute Settlement Body (where a proposal is to be considered as adopted unless there was a consensus against it, the socalled negative consensus); that a postal ballot being agreed to by the Council is envisaged only for instances where "a qualified majority of the entire membership" is needed to change some agreement. Even the role of the chair, the rights of members to take the floor, and closure of debates, and challenges to the ruling are all provided in the rules. Perhaps press officers and trade officials trying to guide the media need to be asked to take a course on the WTO and its rules]

But at a Wednesday morning (5 May) meeting with him, an open-ended one attended by some 40 delegations, the Supachai supporters avoided a confrontation, and urged him to reconvene the meeting, explain the position, and place a proposal from Kenya for the election of Dr. Supachai by consensus before the meeting.

But it was not clear what course Mr. Mchumo will adopt. He was due to hold consultations with the other side in the course of the day.

In what he later described, at a press conference, as a situation of members being tired and angry, Mchumo adjourned the Council for consultations and reflection. But even this effort to cool tempers became controversial when he declined to give the floor to Malaysia (on behalf of ASEAN), and his remark to the facilitator by his side on the podium that he would not give the floor to Malaysia which has taken the floor too often, got relayed to the delegations through an open microphone and the loudspeaker system. There were tense exchanges between him and Malaysians and others after the meeting was adjourned.

At his press conference Tuesday night (4 May), Mchumo explained that his mandate was to propose one name, by a reductionist process that had the approval of the members, and that was why he had placed Moore's name and had eliminated Supachai's on grounds explained in his statements to the Council, adding that his role was of a referee in a match.

At the General Council he had declared the candidacy of Dr. Supachai as having been eliminated and refused to entertain a validly tabled Kenyan proposal that he try to build a consensus around Supachai. Mexico, Hong Kong, India and a number of Supachai supporters said from the floor that the "right of objection" to a consensus or candidacy belonged to the members and not to the Chair of a meeting. India also made a long analytical statement explaining why on the "facts" disclosed by Mchumo and Rossier at several successfive meetings and the report of 30 April the conclusions about Supachai's candidacy was not borne out.

Judged by the interpretations and statements by delegations supporting Moore, inside the closed-door meeting, and by delegations and secretariat officials outside to the media, few seemed to have actually read the Articles and rules of procedure on decision-making, powers and role of the chair, voting or when this could be by postal ballot etc or the practices of international organizations.

Even more, the Chairman of the General Council, Amb. Ali Mchumo of Tanzania and "facilitator", Swiss Amb. William Rossier of Switzerland, seemed at odds with the not inconsiderable supporters of one of the candidates, Dr. Supachai, with India asking Mchumo to ensure that his statements "do not create the impression of distorting the institutional relationship between the Chair and the Membership."

On Friday 30 April, Council Chair Mchumo had shocked the supporters of the That Deputy Prime Minister Supachai, by presenting a report that the tally for the two candidates were now 59 and 62, and on basis of some admittedly (in the Mchumo statement) subjective assessments, proposed the name of his rival Michael Moore of New Zealand for election by consensus as the next Director-General.

Two extended sessions on Friday (30 April), and another on Saturday (1 May), showed a deeply divided membership, and the proposal for electing Moore commanding no consensus, and with Supachai's supporters questioning the assessment of Mchumo and Rossier and calling for a vote.

The tense enough situation, was aggravated Sunday (2 May) by a statement issued in the name of "Friends of the Chair" by a core group of Moore supporters, calling for withdrawal of Supachai and electing the candidate commanding consensus, namely Moore.

In his statement 4 May, Mchumo announced that while he had "stopped" the clock on Friday night, there seemed no longer any purpose and that as of 4 May evening, the contracts of the D.G. and his three deputies had expired.

A separate announcement by the press office, in some infelicitous language, said that on Friday "Departing Director-General Renato Ruggiero" had selected David Hartridge, Director of the WTO services division, to handle the day to day affairs.

Curiously, if this was so, on Friday and Saturday, when asked who was in charge after the term of Ruggiero and his deputies had ended on 30 April, Press spokesman Keith Rockwell only agreed that directors could carry on with their work, but that for some matters a D.G. was needed, such as in naming panels in cases of controversy.

Mchumo also explained that he was not a party to the group, which called itself "Friends of the Chair" and had issued a statement on Sunday, but that he had no control over delegations calling themselves "Friends of the Chair" -- a terminology used in the international system for a group of delegations named or selected by the chair to help it in its tasks. Mchumo spoke of the difficult tasks before them and appealed to delegations to refrain from acts that might exacerbate the divisive and recriminatory atmosphere.

On the DG selection, Mchumo said he still believed they could work towards a consensus around his proposal, and that since he had made it delegations had had time to reflect and be in touch with capitals. It was his sense, he said, that a large number of delegations had indicated their support to his proposal.

He also noted that there was an overwhelming majority against voting and while the Art XI provided for voting, "it is by no means clear" if such voting was contemplated in relation to the appointment of a Director-general and if so how the voting was to be conducted and who should be voting, and that this would take weeks or months and paralyse the work of the WTO, and the need to prepare for Seattle.

But delegations pointed out to the media outside the meeting that voting, where there was no consensus, was contemplated as a way out in all cases, excepting in the DSB itself, and the rules provided for the Council using a postal ballot and everyone participating only in cases where a qualified majority of the membership was needed under any agreement.

As for the Kenyan proposal, Mchumo said that the criteria had been set, and that from the beginning there was a commitment on how to manage the business, that the Council had established the criteria though not every member had agreed to these. He also noted how Mclaren's candidacy had been eliminated, though technically it was on the table, and how the Moroccan candidacy of Abouyoub had been withdrawn. After consultations he had brought Moore's name before the council and that was the only proposal.

"It may be that Dr. Supachai and his supporters may still believe that he is a candidate like is the case with Mclaren but in terms of the rules of this process, he is no longer a candidate," Mr. Mchumo declared and said there should be a consensus around Moore.

Malaysia's Amb. Hamidon took the floor, commenting though on Mchumo's statements on Saturday, and said that formally the ASEAN was denying any consensus for Moore. The choice of a director-general, Hamidon said, rests with the members and not on any single person or member.

The situation before the council was:

* there were formal objections to Mchumo's proposal to elect Moore and thus no consensus;

* those who had supported Mchumo's proposal had said at the same time that if Supachai had been proposed they would have supported him also; and

* those expressing themselves against voting did not necessarily support Moore.

"As a legal point, in a rules-based organization, allow us to point out that there are two proposals on the table, one from Mchumo on which there was no consensus and other that a consensus be formed around Supachai."

The attempt to impose a decision on WTO members could divide the membership and "gravely impair not only our preparations for Seattle but the entire organization itself," Malaysia said and asked for "reflexion and responsibility" from all.

Amb. Rana of Kenya then formally requested that the proposal tabled by his delegation for a consensus around Supachai should be put before the Council.

Uruguay said that the objections, which were merely tactical, should be ignored and consensus declared around Moore.

South Africa said that the situation had deteriorated, and the process had now resulted in an attack that went to the heart of the WTO, compromising its very principles. It was necessary to seriously address the accusations about lack of transparency and democracy being levelled against the WTO and important aspects of its work.

In reflecting on the challenges ahead, including the integrity of the WTO and the challenges of the multilateral trading system, said the South African representative, resolution of the selection process should not be seen as a test of will or as a war of attrition. There was a need for credible demonstration that every member's interests was embraced in an equitable manner. The central systemic challenge facing the WTO is the integration of developing countries into the system and their development concerns ought to be at the centre of the preparatory work. For all these reasons, South Africa felt the time had come for a developing country to lead the WTO and hence supported Dr. Supachai.

The United States said it could not agree to entertain a proposal from the floor (that of Kenya) and the only proposal before the Council was for electing Moore. Mrs. Hayes accused the other side of changing the rules half-way through the game.

Ecuador said that having evaluated the situation, it found the Mchumo-Rossier assessment to be too subjective. In its view Kenya's proposal needs to be considered.

Mexico said that it was for the members to object. The chair had put forward Moore's name, and the "Friends of the Chair" had said they could have gone along with either proposal (Moore or Supachai) if it had been put forward. While Mexico had supported voting, others had opposed it. It was for those who opposed to find a solution, but that could not be by asking Mexico to change its position.

Hong Kong China that it had not been possible for the delegation to draw same conclusions as Mchumo had from the facts presented in his statement. On Friday he had said that the decision was in the hands of members, and on Saturday he had said there was no consensus on his proposal. Hong Kong had suggesting voting, while others were against and it was for them to suggest how to proceed.

Hong Kong that the Chairman had no monopoly to make proposals for the Director-General. He had only been asked to direct the process. The Kenyan proposal was a valid one and had to be placed before the Council.

Haiti said that since it had not been possible to establish a consensus around Moore, it supported the Kenyan proposal that had been endorsed by India and Hong Kong China.

Zimbabwe joined others in protesting the statement issued by some as one by "Friends of the Chair". Voting was not merely contemplated in the WTO, but provided for. Zimbabwe also challenged Mchumo's conclusion that Supachai was no longer in the process. The chair was only there to direct a process, and could not claim infallibility. Only the council could make a decision on Supachai's candidacy.

Uganda (in switching sides) said that the delegation had been instructed by the government to announce that there was no consensus around Michael Moore and it was hence supporting the Kenyan proposal.

Japan said that the Chair had no mandate to eliminate any candidate. It could at best suggest a name, but had no right to say that another candidate was not in the race. The Kenyan proposal reflected the statements on Saturday for Supachai and it had to be put before the Council. Japan deplored the pressures being sought to be exerted through campaigns in the press.

Brazil's Amb. Celso Amorim said that he was taking up this post here coming from New York where there had been criticism in the UN about the lack of transparency at the WTO. It was clear there was no consensus around Moore. And while voting might divide the membership, an imposed consensus would divide the membership.

India's Amb. S. Narayanan said that he as others had been surprised by Mchumo's 30 April statement. While India had made brief interventions on that day and 1 May, and had associated itself with the views of Mexico and Hong Kong China, India felt it necessary to explain fully its position.

Like others, India had "legitimate expectations" about the outcome of the process - expectations derived from the reports from the facilitators and Mchumo over a fairly long period indicating a clear trend and showing Supachai had been consistently in the lead. On 1 May, Mchumo had indicated that he has simply made a proposal and it was for the members to take a view. Mchumo had not accepted the theory that those who did not go along with the proposal were impairing the dignity of the Chair. Having heard Mchumo's remarks Tuesday, India hoped that he was not "fundamentally changing the position taken by you at the end of the meeting on Saturday."

The Kenyan proposal was a logical way forward and India strongly supported it.

India referred to Mchumo's report of 27 March that in trying to forge a consensus around Supachai, it had come to the notice of Mchumo and the facilitator that there were members who would have difficulties in accepting him as the DG, and that when the possibility of consensus around Moore was pursued, there were members who would also have difficulties.

This showed that Mchumo and facilitator had tried to build a consensus around Supachai, and having failed tried to do the same around Moore. The Kenyan proposal was in tune with this, excepting for the reversal of the order of consideration of the two names.

Uruguay had asked for concrete reasons why others could not go along with the proposal for Moore's election. India would address this, Narayanan said.

In the report to the council on 14 December the facilitators (Lafer and Rossier) had referred to the criteria adopted by them, and indicated the hierarchy of support from this, with Supachai first and Moore behind. In the report to the General council on 20 Jan, it was again indicated that Supachai was leading in terms of first preference of members, and the geographical distribution of support was also mentioned. The report of Mchumo on 1 March also had indicated Supachai continued to lead and that he continued to have a wide base of support. In the 17 March report too, Mchumo had said that Supachai remained in the lead and on 27 March report he had indicated that there had no significant change in the hierarchy of support and the distance between the two candidates.

These clearly showed that from the time the facilitators gave an indication of support, i.e. from 14 Dec to 27 March 1999, for a period of three months, Supachai had been consistently in the lead. Even after that, in the statement on 31 March and 14 April, Mchumo had not specifically referred to the levels of support, but the statement showed that there was no difference in the hierarchy.

It was only on 30 April, that Mchumo had reported that out of 121 members, 59 had expressed preference for Supachai and 62 for Moore, and that though these figures were important, "they were not decisive."

Narayanan said he would be the last person to question the figures cited by Mchumo. But it was not unreasonable to suggest that the council should explore the possibility of building a consensus around Supachai, especially since he had been continuously in the lead right from the beginning. And even on 30 April, it was just a margin of difference of 3 delegations out of 134 members with 13 abstentions.

Narayanan objected to the "level of tolerance" criteria and said this had done "the greatest damage to the process" because of the nature of the criterion and the "unfortunate manner in which this had been interpreted, understood and handled." It was a highly subjective criterion and many members had been continuously questioning the wisdom of using this criterion when the overwhelming desire of members was that no member should be allowed to exercise any veto power against a candidate. During his own "confessional meetings" with Mchumo and Rossier, Narayanan said, he had vigorously argued against this criterion, whose validity itself was questionable under the best of circumstances and could have dangerous implications on the process.

He had stressed that if it was used when there were only two candidates and when there were rumours about a serious opposition to one candidate, it would have "unfortunate implications"

He himself had pointed out that in a race between two, after ascertaining the positive preferences, to probe the degree of acceptability or the degree of tolerance through a confidential consultation process was virtually enabling some members to diminish the chances of success of the candidate which they did not prefer by simply indicating their opposition to that candidate.

"It is obvious when there are only two candidates left in the field, to take into account the so-called degree of tolerance can only have two possible consequences: (a) supporters of the two would be forced to register their opposition to the other because of the criterion itself; and (b) if all members did not foresee or anticipate or understand the manner in which the criterion would be analyzed then some well-meaning Members would stop after expressing their positive preference and not convey opposition to the other candidate. On the other hand, some members with rigid positions would in addition to their preference also register opposition to the other candidate, "thus exerting an undue influence or effect on the final outcome."

India believed that this is what might have happened in the present process. The criteria relating to the degree of tolerance, by its very nature had "an element of distortion and inequity built into it," and it should have had no implication in making the recommendations at the end of the process.

"It is particularly regrettable that the chairman's statement should have portrayed the difficulties expressed against Moore being more in the nature of a reaction to what was perceived to be the main source of his support and the fact that he comes from a developed country."

While India had not opposed any candidate on the basis of his being from a developed country, in some cases difficulties against Moore could have been a reaction to the difficulties expressed against two candidates particularly since this hierarchy based on a criterion which Mchumo himself had said was subjective.

There was thus an element of subjectivity involved when the chair or facilitator assessed the extent of tolerance enjoyed by each of the two candidates, and this lent Members to make subjective judgements, as Mchumo's statement indicated. Narayanan said he understood from this that each Member began to make a judgement as to whether any other might have said anything negative about the preferred candidate and considered this in giving his possible response. It was thus an extremely subjective and an avoidable criterion and "I for one would be extremely reluctant and hesitant to draw the kind of conclusion" that the chair had.

On the geographical spread, Narayanan took objection to Mchumo saying that "it is significant that Dr. Supachai is naturally stronger in Asia, his own region, Moore does not seem to belong to any region, but is very strong in support outside his area."

The implication of this appeared to be that Supachai's strength in Asia was irrelevant as it was natural. But in India's assessment, both candidates enjoyed support in different regions of the world, and it was rather risky to introduce any hierarchy with regard to geographical spread, when no such hierarchy was clearly evident.

In making this lengthy presentation, India said, it was trying to show that on the basis of the information made available to members over a period of time and by ensuring no distortion was introduced in evaluating the information through subjective criterion, it would have been equally possible to have made a recommendation in favour of Supachai. While respecting Mchumo's recommendation, it was but fair to look at the other too, and this what Kenya had done.

In concluding Narayanan also addressed himself to Mchumo and said that while he appreciated the enormous pressure under which Mchumo had been working and no one could envy him "in all humility I would like to state that you must ensure that the statements you make, with your customary frankness, do not create the impression of distorting the institutional relationship between the chair and the membership."

* Chakravarthi Raghavan is the Chief Editor of the South-North Development Monitor (SUNS) in which the above article first appeared.

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