TWN Info Service on WTO and Trade Issues (Sept22/05)
16 September 2022
Third World Network

Trade: Continued "McKinseyization" of WTO Secretariat
Published in SUNS #9645 dated 14 September 2022

Geneva, 13 Sep (D. Ravi Kanth) -- The much-vaunted reforms of the World Trade Organization's Secretariat as proposed by McKinsey & Company continue to be shrouded in secrecy. Apparently based on the recommendations made by the private management consultancy, plans are afoot to create two controversial divisions, namely, the "Planning & Strategy Unit" and the "Regional & Country Support Unit" to service the needs of the director-general whenever she visits any country, said people familiar with the development.

An early indication of the likely creation of these two divisions has been suggested by the WTO's deputy director- general Ms Angela Ellard in a restricted report on the "WTO Secretariat Transformation Exercise" that was circulated on 5 September.

As part of the so-called "third wave" of reforms, Ms Ellard has said in the report that "work may be launched in parallel in other areas e.g., putting in place a possible Planning & Strategy Unit or a possible Regional & Country Support Unit based in the Secretariat in Geneva."

In an article in the Hindustan Times on 22 July, titled "WTO: Focus on transparent, member-driven reform now", this writer cautioned that creating such a unit modeled on the lines of the World Bank appears to be incompatible with a member-driven organization like the WTO.

"WTO is not like the World Bank which needs such an office. Perhaps, due to her long association with the World Bank [WB], the DG wants to model the WTO on the WB, but they are two different institutions ... the WTO is a member-driven institution and it is the members who set the strategic vision of the multilateral trade body," said this writer in the Hindustan Times article.

At a time when the WTO is facing a funding crunch, the director-general, Ms Ngozi Okonjo-Iweala, appears determined to embark on seemingly "extravagant and wholly irrelevant" initiatives like creating a Planning & Strategy Unit when there is already the Administration and General Services Division, said a staffer who asked not to be quoted.

It is also not clear when there are so many officers who are not being properly used who can do this job, if deemed necessary, the staffer said.

In a member-driven organization, the DG is bound by the rules set out in the Marrakesh Agreement, particularly in paragraph 4 of Article VI.

It states that "the responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively international in character. In the discharge of their duties, the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO. They shall refrain from any action which might adversely reflect on their position as international officials. The Members of the WTO shall respect the international character of the responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them in the discharge of their duties."

As per McKinsey's report, the creation of a Regional & Country Support Unit is to service the needs of the DG when she travels or visits any country.

Apparently, the DG argues that when she travels, every Division provides briefing notes and that it is difficult to collate them, hence the need for such a unit.

In the past, such collating work was done by the DGO (the Director-General's Office).

Currently, there are five Senior Advisors in the DGO who should be able to do that work like their predecessors, said another staffer, who preferred not to be quoted.

The reforms of the WTO Secretariat are based on the recommendations made by McKinsey & Company.

It appears that McKinsey has been provided office space in the WTO building and is also apparently tasked with implementing the reforms, said a person, who asked not to be quoted.

Ahead of the upcoming meeting of the Committee on Budget, Finance, and Administration (CBFA) on 22 September, Ms Ellard presented a restricted report on the "WTO Secretariat Transformation Exercise".

The four-page report (WT/BFA/W/604), seen by the SUNS, somewhat ambiguously and couched in corporate jargon, begins with the headline "launch key initiatives and capture quick wins."

Under this headline, according to the report, three objectives are to be pursued.

They include: (a) "Reinforce Secretariat talent management practices"; (b) "Strengthen Secretariat ways of working to optimize efficiency and impact"; and (c) "Leverage the opportunities of data, technology, and innovation to secure long-term relevance."

Then it goes on to state that in the "first wave" of reforms, two issues  - "talent management" and "ways of working" - are to be addressed.

Under the sub-title "Establish reward schemes (outside promotion) for Secretariat staff", the report talks about "non-monetary rewards for staff" in which "changes [are] to be made".

It says, "launching new or re-designed non-monetary rewards to recognize teamwork, innovation, and excellence in management" and "full cycle of testing and refinement completed, including a review by the Steering Committee."

The report says, "plans for implementation being developed."

As part of the "first wave" of reforms, the report suggests "awarding annual performance bonuses for staff," saying that changes are to be made for "redesigning the annual performance-related bonus (without increasing the amount allocated in the budget) by splitting into two categories such as outstanding performers to somewhat higher bonus." The current status of this initiative is that "plans for implementation [are] being developed."

In a similar vein, the report highlights "building a stronger culture of ongoing recognition and praise within the Secretariat" for which plans are being implemented.

Several changes are being proposed to "improve key internal Secretariat systems," involving changes in "risk management."

The changes to be made in risk management are as follows:

(i) Development of an overarching risk management process with clearly defined responsibilities;

(ii) Strengthen risk awareness and the recognition of reporting and managing of risk across the Secretariat; and

(iii) Fill the risk officer position (currently vacant).

The report seeks to make changes in procurement by (1) updating monetary thresholds for procurement processes involving low-value procurement, taking account of inflation and of best practices among peer international organizations; (2) standardizing internal processes; and (3) increasing the use of digital tools to boost efficiency and transparency.

Like the previous recommendations, the report says that "plans for implementation are being developed."

In the "second wave" of reforms, the report intends to address "talent management,"  "ways of working" and "secretariat staff career pathways, mobility, recruitment, and promotions."

As part of career pathways, the changes to be made include "move from a rigid system of a single vertical progression track to a more dynamic architecture of career pathways enabling more flexibility and opportunities for development. Introduce a split into Expert and Manager tracks at more senior grades."

Similarly, the report talks about changes to be made in recruitment to the WTO.

It seeks to "introduce several measures to make the recruitment process faster, more efficient, more candidate- centric and more capable of contributing to a diverse and inclusive Secretariat, including more advance planning."

The "second wave" changes also cover issues such as "mobility," and "promotions".

As part of promotions, the report says, "various measures approved that aim to make the promotions process more consistent and transparent. Further analysis requested on how the promotions backlog that has led to high levels of staff frustration might be addressed."

In the "third wave" of reforms, the report intends to address "data, technology, and innovation."

As part of this, the report suggested the following initiatives:

* Developing a roadmap for the digital transformation of the Secretariat.

* Creating mechanisms to increase external collaboration and partnerships.

* Strengthening the culture of innovation in the Secretariat.

For external collaboration and partnerships, the report says that "various mechanisms have been identified to strengthen the approach to external partnerships across the Secretariat to leverage knowledge and efficiencies."

The report acknowledges that setting the strategic direction and foundational structure in the second phase is yet to commence.

As part of this, three initiatives are suggested such as "define Secretariat values, vision, and strategic direction"; "optimize Secretariat organizational structure to make it fit for purpose"; and "continue implementing phase one."

In addition, it says that "work may be launched in parallel in other areas e.g., putting in place a possible Planning & Strategy Unit or a possible Regional & Country Support Unit based in the Secretariat in Geneva."

In conclusion, WTO members will have to decide whether they should provide funds for a process of "McKinseyization" of the WTO Secretariat that goes against the Marrakesh Agreement, said people who asked not to be quoted. +