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TWN Info Service on WTO and Trade Issues (Oct07/14)

13 October 2007


WIPO in Crisis as Assemblies end without resolving key issues

The WIPO was thrown into crisis after its General Assemblies ended 3 October night without approving its 2008-9 budget, and without resolution of two other issues - the status of the Director-General and the proposal to cut patent-related fees charged by WIPO.

The three issues had been integrally linked during the crisis-laden Assemblies, with the developed countries, led by the United States, determined to create a situation in which Director-General Mr. Kamal Idris has to leave office before the expiry of his term in 2009.

When the question of how to treat the allegation of misconduct by the Director-General in misrepresenting his age could not be settled, the developed countries used the option of not approving the organisation's two-year programme budget as a way to generate a systemic crisis in the organisation and thus to continue and deepen the crisis over the specific issue of the DG.

Below is a report of the conclusion of the WIPO General Assembly.  It was published in the South North Development Monitor (SUNS) on 5 October 2007.  It is reproduced here with the permission of the SUNS.  Any reproduction or re-circulation requires the prior permission of the SUNS (sunstwn@bluewin.ch).

With best wishes
Martin Khor
TWN


WIPO in Crisis as Assemblies end without resolving key issues
By Martin Khor (TWN), Geneva, 4 Oct 2007

The World Intellectual Property Organisation (WIPO) was thrown into crisis after its General Assemblies ended late Wednesday 3 October night without approving its 2008-9 budget, and without resolution of two other issues - the status of the Director-General and the proposal to cut patent-related fees charged by WIPO.

The three issues had been integrally linked during the crisis-laden Assemblies, with the developed countries, led by the United States, determined to create a situation in which Director-General Mr. Kamal Idris has to leave office before the expiry of his term in 2009.

When the question of how to treat the allegation of misconduct by the Director-General in misrepresenting his age could not be settled, even after a week of continuous informal meetings, Group B (of developed countries) used the option of not approving the organisation's two-year programme budget as a way to generate a systemic crisis in the organisation and thus to continue and deepen the crisis over the specific issue of the DG.

African countries, supported by many other developing countries, insisted that due process and proper procedure be followed in dealing with the DG issue. In their view, the question of action (including the Group B proposal to convene a special Assembly in a few months to discuss the issue) should be dealt with following a meeting of WIPO's Audit Committee and recommendations they may come up with.

On Wednesday morning, the WIPO Assembly chair, Nigerian Ambassador Martin Uhomoibhi, announced that the DG issue was closed as attempts to resolve it had failed. Late in the day, a final attempt was made to narrow the differences on this issue, but it failed.

Officially, the issue came up under agenda Item 12 on internal audit reports of WIPO, because a recent internal audit report had detailed how the DG had given the wrong date of his birth (1945 instead of the real 1954) for several years.

Informal meetings in a small group (mainly made up of regional coordinators) led by the Assembly chairman had taken place since 25 September, and at some stages a consensus solution seemed possible.

But in the end, the different positions were irreconcilable. Developed countries wanted a decision at this Assembly to direct the audit committee to review the audit report within 60 days and propose action in a report to be forwarded to the WIPO Coordination Committee, and then to convene a special WIPO General Assembly session in February 2008 to consider action.

The US and several European countries have made no secret that they had told Mr. Kamal Idris that they had lost confidence in him, that WIPO would suffer as an organisation if he remained, and that he should leave before his term expires.

The Africa Group, backed by many other developing countries, took the position that the audit committee at its December meeting should review the audit report and send its findings to the Chair of the General Assembly and member states, which would then decide on follow-up steps. Originally, the Group wanted the committee's report to be considered by the regular General Assembly next year.

The developing countries felt that the developed countries' demand that a decision be taken now to plan for an extraordinary Assembly meeting in February was pre-judging that the DG was guilty of a serous misconduct.

Moreover, the proposal to give a mandate on this issue to the Coordination Committee was seen as having an ulterior motive, since the Committee (comprised mainly of the members of the executive committees of the Paris and Berne Unions) has the authority to put forward a name for a new Director-General for the General Assembly to endorse.

The insistence of the developed countries for quick action on the DG issue and the insistence of the African Group (backed by others) on following due process and on not pre-judging, caused the deadlock that continued to the end of the Assembly.

At plenary on Wednesday morning, Assembly President Uhomoibhi announced that "all possible efforts in search of a compromise on that item have failed as far as the chair and this assembly is concerned and it is important to close the debate." As Chairman, he said, he was duty bound to propose a ruling, that "the assembly did not agree on this matter."

Nevertheless, the Chair made a last late attempt in another meeting of the small group (comprising coordinator plus one country per region) but after 9 p. m. on Wednesday it became clear there would be no consensus solution on the DG issue and thus on all three issues.

Meanwhile, the official meetings dealt with the patent fees issue (in the afternoon) and finally the budget (late at night). Votes were called - a rarity in WIPO - by the Africa Group on both issues. On both counts, the Group did not succeed.

In the first vote, late on Wednesday afternoon, the Africa Group proposed that the discussion (held at the Assembly of the Patent Cooperation Treaty) on cutting PCT fees, which are the major source of WIPO's revenue, be closed. This proposal was aimed at retaining the PCT fees.

Many developing country delegations believe that the United States-Japan proposal to cut PCT fees (by up to 15 per cent) was a move to cut WIPO's revenue and thus force it to reduce its expenditure, which would affect new activities relating to the just-adopted programme on the WIPO Development Agenda (which is championed by the developing countries).

By closing the discussion on PCT fees, the African Group wanted to prevent the developed countries from using the fee cut and the resulting reduction in WIPO revenue to then cut the bi-annual 2008-9 WIPO budget, which in turn would affect implementation of the Development Agenda.

The African proposal was defeated by 42 to 40 votes. Group B voted as a solid block, with all their members present to vote. The African countries had the support of many Asian countries.

Most GRULAC countries abstained, mainly because Brazil also had a proposal that there be reduced PCT fees for patent applications from developing countries. Several developing countries were also either not eligible to vote because of arrears in payment, or were absent.

After the vote, the PCT Assembly did not deal further with the fee-reduction issue, thus no decision was made on it. There was also no formal closure of this Assembly - one of the confusing outcomes (or non-outcomes) of the day's events.

At 10 p. m. Wednesday, after a last attempt (at the informal small-group level) to reach a compromise on the DG issue (and the related two issues) failed, the WIPO Assembly plenary met again to consider the crucial agenda item 9 on the budget.

Although there was time-related urgency as the Assembly had to close by midnight, Group B (of developed countries) requested a break so that its members could meet. Several African countries objected, as time was now short.

The Chair finally agreed to a short break, saying we don't want to suspect that the request was an attempt to filibuster or to let the clock tick to midnight (without decisions taken).

After the break, the Secretariat was invited to present the budget, but the Group B coordinator (Italy), supported by several of its members, objected to the item on the budget being discussed, until a decision on the PCT fees issue had been made, as this would have a bearing on the budget.

This was a clear attempt to block a decision on the WIPO budget, since it was too late in the night for a discussion and decision to be held by another body - the PCT Assembly - on the patent fees.

More time was taken on the procedural issue as to whether a discussion on the budget could be held. The Chair then appealed to the developed countries to allow the exercise of the freedom of expression so that the Assembly could freely discuss the budget issue.

"To tell people to shut up and don't talk goes against the grain of members of a civilised community," said Uhomoibhi, making a Chair's ruling that the budget be now discussed.

The Secretariat's financial official then presented the revised 2006-7 budget and the 2008-9 budget. She was asked what would happen to financial resources for the Development Agenda if the 2008-9 budget was not approved by the Assembly.

The WIPO official explained that if the 2008-9 budget was not approved, the budget level would have to be at the same level (as the current 2006-7 budget), and the amount would be 100 million Swiss francs less. She implied that the funds for the Development Agenda would be affected, as there were several items relating to the Agenda that had been allocated higher funding in the 2008-9 budget, that would have to be scaled back.

The US announced that it would block consensus if there was a move to approve the budget. It had concerns about the budget, as well as its link to the PCT issue.

Many developing country groupings (Africa, Organisation of Islamic Countries, LDCs, G77 and China) as well as China and Russia called for approving the budget.

With the US announcing that it would block consensus, Algeria (for the Africa Group) called for a vote. "I was hoping we would have a gentle people's agreement," said Algerian Ambassador Idriss Jazairy.

"The life of this institution is at stake. Let's move to vote. It's like choosing between the devil and deep blue sea. To ask for a vote is repugnant in this institution, but to deprive this institution of means to do its business especially its Development Agenda is heavier on our conscience."

In the roll-call vote, 64 countries (almost all of them developing countries, but also including Russia) voted to approve the budget and 44 (developed countries and most countries in transition) voted against. However, a two-thirds majority (which is required for the resolution to carry) would have required 72 votes in favour.

Thus the resolution failed, even though a clear majority voted for it, and the budget failed to get the Assembly's approval.

Several developed countries (including the US, EU, Japan, Group B, the UK) then explained their vote against. They said they regretted the situation (some expressing "deep sorrow"), and pledged their continuing support for WIPO and especially for the Development Agenda.

The US alluded to the DG issue when it said it was committed to a strong WIPO with "strong, honest, credible leadership". Switzerland touched a sensitive nerve when it said that since there is no budget and a decision is needed, a special session of the General Assembly is needed and asked what are the requirements to convene it.

Algeria, for the Africa Group, said it was disappointed with the outcome. It was opposed to the attempt to block the approval of the budget which had already been approved by the Programme and Budget Committee. A minority had blocked the Development Agenda by taking action to stop it from coming into effect.

On agenda item 12 (on the DG issue), Algeria said "the issue had not been swept under the carpet but instead we worked on it from the first day to the last minute but consensus eluded us... We need to persevere to get consensus, but not at the expense of justice and dignity."

Because of the crisis, the Assembly ended without adopting a report of its proceedings. Normally, the last day of the WIPO Assemblies is spent amending and adopting the reports of the meetings.

At the conclusion, WIPO's Legal Counsel spoke on this issue and announced that the Secretariat can put on its website each report that is ready and in a letter to member states it would refer to a deadline by which to comment on their statements. The report would then be deemed to have been adopted.

Replying to a question, he added that the PCT item was not concluded, so the report on the PCT would say that there is no agreement.

The Assembly President, in his conclusion, said there should be no sense of guilt on what transpired, as it was part of the rules and decision-making process, and it is legal and fair that we did what we have done.

He remarked that WIPO is at a crossroads and asked whether we are to help it to suffocate or to discharge its responsibilities as a UN body, and he spoke of "very challenging times ahead."

The meeting closed at 12.30 a. m.

 


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