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Info Service on Intellectual Property Issues (Sept14/04) WIPO:
Debate to continue on governance, ‘development expenditure' Geneva, 29 Sep (K. M. Gopakumar) -- Member States of the World Intellectual Property Organisation (WIPO) are unable to move forward on reforming the institution's governance despite an independent evaluation of systemic problems. Accordingly, a decision was adopted on 26 September, after three days of informal consultations at the 46th Session of the WIPO General Assembly, to continue governance discussions at the next meeting of the Program and Budget Committee (PBC). The decision also includes an agreement to continue discussing the definition of "development expenditure" at the 23rd Session of the PBC. The current interim definition is so broad that the WIPO Secretariat is able to classify all expenditure related to developing countries as development expenditure, including travel and daily subsistence allowances. The 46th WIPO General Assembly is taking place in Geneva from 22 to 30 September. The 43rd Session of the WIPO Assembly in 2013 (23 September-2 October) discussed both WIPO governance and the development expenditure based on a recommendation from the 21st session of the PBC (9-13 September 2013) that the WIPO General Assembly "consider this issue and take appropriate action". At last week's deliberations the African Group and other developing countries demanded a process of informal or formal consultations on both issues in order to resolve it in the next session of the PBC, which is to take place some time in mid-2015. Through the 26 September decision the General Assembly sends it back to the PBC for further discussion in the absence of consensus to set a specific process to reform WIPO's governance. The governance reform discussion has a long history. The latest attempt was initiated at the 16th session of the PBC in 2011. In that session the WIPO Secretariat had been requested to prepare a document. The following Member States submitted proposals on WIPO governance: the African Group, the Development Agenda Group (comprising a number of developing countries), Australia, China, France, Germany, Japan, Monaco, Republic of Korea, the United Kingdom and the United States of America. At the WIPO General Assembly in 2013, Brazil, on behalf of the Development Agenda Group (DAG), had proposed the following draft decision: "The WIPO General Assembly recognized the importance of sound, fair and good governance in WIPO. Took note of Member States' proposals and comments on improving WIPO governance contained in document WO/PBC/17/2 Rev., and requested the International Bureau to organize a two-day meeting to discuss the JIU (United Nations' Joint Inspection Unit) report, the proposal submitted by Member States and make recommendations for the 22nd session of the PBC, to be held in September 2014, including, but not limited to, on the following issues: Improving the work of the PBC, improving the work of the WIPO Coordination Committee, improving interaction between Member States and the IAOC (Independent Advisory and Oversight Committee), improving interaction between Member States and the auditors, establishing a fair and efficient mechanism to select chairs and vice chairs of WIPO bodies. "The DAG understood that its proposal would engage Member States at least in the preparation of discussions for the next session of the PBC, which would be the 22nd session in September 2014, in order that there could be a productive outcome for discussions on the JIU report in the proposal that would be presented by the Member States". This proposal was not adopted due to lack of consensus and it was thus decided that the issue would be resolved during the September 2014 session of the PBC. The latest decision again shows the lack of consensus to take forward the agenda item. Meanwhile, the UN's Joint Inspection Unit (JIU) prepared a report, which makes a series of recommendations with regard to WIPO's governance. The JIU Report, titled "Review of Management and Administration in the World Intellectual Property Organisation (WIPO)", deals with the following issues viz. Governance, management, resources planning and budgeting, human resources management, oversight, and other issues related to information and communication technology and knowledge management. (https://www.unjiu.org/en/reportsnotes/JIU%20 The JIU made the following recommendations: Recommendation 1: The WIPO General Assembly should review the WIPO governance framework as well as current practices with a view to strengthen the capacity of the governing bodies to guide and monitor the work of the organization. In doing so, Member States may wish to consider in their deliberations the options suggested in this report. Recommendation 2: The Director General should ensure that clear and updated terms of reference are made available for all WIPO organizational units and include them in relevant Office Instructions, in particular each time an internal re-organization is carried out. Recommendation 3: The Director General should issue comprehensive terms of reference for the management committees by the end of 2014 and circulate them to the relevant WIPO governing bodies. Recommendation 4: The Director General should request the Internal Audit and Oversight Division to include in its workplan a series of evaluations of the Strategic Realignment Program (SRP) initiatives and their results to capture lessons learned, thus supporting WIPO management during the next phases of the reform process of the organization. Recommendation 5: The Director General should finalize, by the end of 2015, and regularly update the WIPO Risk Policy and all the elements of a comprehensive risk management framework. Recommendation 6: The Coordination Committee should revisit the present principles concerning geographical distribution in order to ensure broader geographical diversity within the WIPO professional workforce. Recommendation 7: Based on guidance provided by the Coordination Committee, the Director General should establish, by the end of 2015, a Plan of Action with specific measures and targets to broaden the geographical diversity within the professional workforce and report annually on its implementation. Recommendation 8: The Director General should finalize the WIPO Gender Policy by the end of 2014, ensuring that it contains specific measures and targets to improve gender balance, in particular at senior management level, and report annually on its implementation. Recommendation 9: The Director General should further formalize WIPO's Information and Communication Technology (ICT) Strategy and present it to the General Assembly by the end of 2014. Recommendation 10: The Director General should finalize a comprehensive Knowledge Management Strategy and present it to the General Assembly by the end of 2015. WIPO GOVERNANCE CRITICISED Apart from the recommendations, the JIU report contains insightful observations and findings. Regarding decision-making, the report observes that, "... the format of adoption of some decisions may also raise questions. At times, Member States only ‘take note' of the Secretariat's reports which have to be read in conjunction with the (often divergent) comments made orally during the debates and cross-referenced with other background documentation. Although this practice is not an exception in the United Nations system, it may impact the oversight role and the adequate implementation of the Member States' decisions". On the current role and function of the Coordination Committee, the report notes that "there is a widespread perception among Member States that the Coordination Committee plays only a formal role, rather than providing substantive advice to WIPO's decision-making bodies and management". The report observes that the various laxity in the governance structure has led the Secretariat and Director General to take decisions without formal inputs from the Member States. The report remarks: "In terms of governance, the combination of the aforementioned factors resulted in a situation whereby the Secretariat, and primarily the Director General, was placed in a position to take the leading role on numerous issues without formal input from Member States. In the light of the insufficiency of regular guidance mechanisms, the Director General has resorted to a number of informal tools (monthly meetings with Ambassadors, breakfasts with delegates, meetings with regional groups) to obtain views and inputs of Member States on various subjects of interests. While such practices are common in other United Nations agencies, they have gained disproportionate weight at WIPO and serve as a substitute modality for proper guidance, often at the expense of transparency. In the view of the Inspectors, such informal methods have reached their limits, especially given the growth of the organization, and should not replace in-depth discussions by Member States through the formal and clearly established channels." The report notes that the term of the WIPO Director General is an exception to the UN System and there is no limitation with regard to the number of terms a Director General can be reappointed. The report recalls its recommendation in 2009 to limit the terms of service of the executive heads to a maximum of two successive terms. According to the report, "The Inspectors believe that the Director General should consider the creation of a resource allocation committee to enhance transparency and the participation of different sectors in the resource allocation process". On geographic representation of human resources, the report notes that out of 186 Member States only 99 countries are represented in the WIPO workforce. DEVELOPMENT EXPENDITURE Another important issue is related to the lack of a comprehensive definition of "development expenditure". The current definition is so broad that it helps the Secretariat to classify all expenditure related to developing countries as development expenditure. Development expenditure is defined as follows: Expenditure is qualified as "development expenditure", only when the beneficiary is a developing country and the equivalent expenditure is not available for developed countries. These amounts exclude foregone revenues resulting from the fee reductions accorded under the international registration systems for applicants from developing countries. Consistent with past practice, countries with economies in transition are included for the purpose of the Program and Budget. The External Auditor Report notes that, "While assessing development share under substantive programs, we found that regular expenses like Travelling Allowance and Daily Substance Allowance were also shown as development share. We were told that this was not irregular because as per the current definition of development expenditure, these expenses were not made on developed countries and were therefore, booked under development share". (http://www.wipo.int/edocs/mdocs/govbody/en/a_54/a_54_4.pdf) The External Auditor Report also notes that the WIPO management stated that the estimation of development was based on the definition of development expenditure. As such there was no "calculation formula". Further it states that, "We noted that no definition of ‘development expenditure' was available which could describe its scope and constituents. Most importantly, current definition of development expenditure was silent about the nature of development activities covered and their intended impact on the development of countries through intellectual property tools". The External Auditor Report further states that, "WIPO may clearly define development expenditure and formulate a method for determining the ‘development share' under each program and activity so that effectiveness of the mainstreaming exercise can be assessed objectively." The current definition is an interim definition used for the 2012-13 biennium but this definition will continue in the 2014-15 biennium in the absence of a consensus on a new definition. The proposed new definition reads: Expenditure is qualified as ‘development expenditure' when it is used to finance development-oriented assistance provided by WIPO to developing countries and the equivalent expenditure is not provided to developed countries. In addition, the development activities financed by WIPO should directly contribute to: * Enabling developing countries to derive benefits from the IP system, to reduce the costs of its use, and to better protect inventions and creations around the world; and, * Reducing the knowledge gap between developed and developing countries by facilitating developing country access to knowledge and supporting their engagement in innovating, producing, using and absorbing technologies, new forms of expressions and creativity. It is understood that the following activities should seek towards directly achieving the above impact: -- development of national intellectual property strategies, policies and plans in developing countries; -- development of national (and where relevant regional) legislative, regulatory and policy frameworks that promote a balanced IP system (including related research); -- support for the engagement of developing countries in global and regional decision-making and dialogue on IP; -- building modern state-of-the-art national IP administrative infrastructure; -- support systems for users of the IP system in developing countries; -- training and human capacity building in developing countries; and -- promotion of innovation and creativity, technology transfer and access to knowledge and technologies in developing countries (including related research). It is further understood that "development expenditure" is not used to finance the Organization's management, administrative and finance-related activities or functions. The above new definition was proposed by the chair of the PBC after consultation with Member States but could not be adopted due to resistance from developed country Member States. According to the latest 26 September decision, the PBC will consider the issue again at its 23rd session in 2015. The intriguing question is whether it is going to be a repetition in 2015 of the outcome (or lack of outcome) of the PBC process of 2013 and 2014.
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