18TH SESSION OF THE ASSEMBLY OF STATES PARTIES TO THE ROME STATUTE
Day 3 (4 December 2019)
Name of the Event: Fifth Plenary Meeting: Budget
Overview by: Keri van Douwen, Francisca de Castro, Sindija Beta, Junior Research Associates PILPG-NL
Main Highlights:
The ICC Registrar and the Chair of Budget and Finance provided statements and the audit reports were presented for consideration.
The proposed budget was subject to stringent measures taken by the court and it represents the lowest percentage increase since the ICC was established.
Summary of the Event:
The third day of the ASP continued with a plenary meeting on the ICC’s 2020 budget. The ICC Registrar, Peter Lewis and the Chair of the Committee on Budget and Finance, Mr. Hitoshi Kozaki presented. The external auditor finally presented the audit reports for consideration.
The Registrar of the Court, Peter Lewis, opened the fifth plenary meeting by acknowledging the investment of States Parties to the ICC even through financial challenges. He stressed the importance of the Court showing results from these investments, as well as showing stringency and precise budgeting by the Court. He touched upon the new strategic planning process that has been made recently compared to the first-year budget process and how the registrar’s office’s strategic plan, mixed with the other organs of the court’s plans created a complete set for strategic plans for the Court. These strategic plans provide a clear roadmap for how they can improve the core functions of the court through a more efficient administration of key duties and thus resulting in a reduction of costs.
The proposed budget for 2020 amounts to 146.94 million euros, which signifies an increase of 2.39 million, or 1.7% increase from the approved budget of 2019. Mr. Lewis emphasized that this budget was taken as a result of stringent measures taken within the court, and highlighted that this represents the lowest percentage increase since the ICC was established. Furthermore, he talked about how they found an additional 1.3 million euros of savings within the capital replacements of the court premises, which is why they did not see the necessity to put forward a proposal that would ask for the full costs of changes to the common system.
One of the concrete proposals made by the registrar was to continue the discussion as to find sustainable financial solutions which would be in line with the Committee of Budget and Finance’s (CBF) recommendations. Furthermore, he emphasized that they had requested an addendum to increase the budget by 230.000€ to cover the legal aid for Mr. Al Hassan’s defense team, as his confirmation of charges was posterior to the submission of the proposed budget. However, he acknowledged that if the CBF’s proposed budget proposal were to be voted by the ASP, it would be a 0.7% increase over the 2019 budget.
He stressed that there has been one notable unforeseen development since the session with the CBF which has been the augmentation of the living costs in The Hague, which significantly impacts the living allowance of the staff compared to 2011, the year the last assessment was conducted. The increase of living costs placed more pressure on the court’s budget, needing an augmentation of around 2 million euros.
The Chair of the Committee on Budget and Finance (CBF), Mr. Hitoshi Kozaki, noted that the forecast implementation rate is expected to be 99.4% against the 2019 approved budget and that the CBF has received 3 contingency funds of 2.25 million. The CBF has scrutinized the proposed budget, which represents an increase of 2.4 million euro or 1.7% against the 2019 budget. Hitoshi Kozaki also emphasized that the court review process should include the committee and should keep them informed of all changes.
The chair of the audit committee, Samir Abu Lughod, outlined that in the summer of 2019 the audit committee received an interim report by the court on courts values and effects framework with representatives of all organs on their current efforts in the area. He emphasized the importance of creating an institutional culture founded on values and effects and encouraged the development of a wide ethics charter for the court. He also asked the States Parties to approve extension of the mandate of auditors which cover the financial statements of the Court and Trust Fund for Victim’s (TFV) in the year 2020, as well as to undertake at least one performance audit.
Mr. Didier Migaud the First President of the Cour des Comptes in France was to present the external auditors report from 2019. His remarks were delivered by a colleague as Mr. Migaud could not make it. There were three reports of the audit which included the financial status of the ICC, the TFV, and the budgetary procedure of the ICC.
The first report, relating to the financial status of the ICC showed that 2018 ended on an accounting deficit of 7.1 million euros, which is a decrease compared to the 2017 deficit of 13.8 million euros. The 2018 deficit represents 4.8% of the Court’s budget. The external audit did not reiterate last year’s remarks on a risk of a cash crisis which could threaten the courts activities because the collections received during the second semester of 2019 allowed the risks to be managed. The report warns the States Parties about the impact the delay in payment could have on the ICC’s workings.
The second report, relating to the audit of the TFV, found that the budget for the TFV was of 2.5 million euros, which was complemented by 3.6 million euros of voluntary contributions. The TVF shows an accounting deficit of 1.1 million euros. 2018 showed an increase in voluntary contributions compared to 2017.
The third report discussed the efficiency of the budgetary procedure of the ICC. It was found that the current structure of the ICC budget poses a problem on budgetary coordination. The current structure makes it impossible to determine a result-based budget. Second, there is a problem of budgetary coordination. It is recommended to have a less strict interpretation of Art. 42.2 of the Rome Statute which would allow the creation of communal administrative services.
The audit was based on the four phases of the budgetary process: with regards to the preparation, the recommendations are the same as last year, and the creation of a communal administrative service. With regards to the adoption, to simplify the budget document to re-center it on the questions about a budget and for it to be released no later than January. Regarding the execution, they suggested some recommendations on the special funds, and the delegation of some of the responsibilities of the ASP to the bureau so that they can take particular measures in case of a new liquidity crisis. Finally, concerning the execution of the budget, their recommendation is based on the content of the annual report and they suggest removing some unnecessary information in the report’s annex.
In application of article 12 of the financial rules and regulations of the ICC, the external auditor has established three reports throughout the year 2019. These reports are on the financial statements of ICC for the year that ended on 31st December 2018, the TFV, and the ICC’s budget process.
The external auditor highlighted several points. For instance, he mentioned that the Court’s cash inflow for the second semester of 2019 has brought an end to the cash flow crisis flagged in last year’s audit reports. Nevertheless, the Court is left with some uncertainty vis-a-vis some States Parties outstanding budget payments and the difficulty of knowing when to expect payment.
He further noted that:
Thirteen out of twenty-four recommendations made by the external auditor in 2018 have been applied.
The voluntary contributions made to the TFV have increased from 2.6 million euros to 2.9 million euros compared to last year. It is recommended to note the voluntary contributions separately in the annual or multi-annual report because they constitute more than half the resource flow for the funds. This will give the ASP a better understanding of where the ICC’s budget sits.
The structure of the budget of the Court is tied to its major programs. While this structure upholds the legal imperatives of the ICC and the independence of the OTP, it means different budget lines cannot be clustered if they have been listed per major activity. As a result, result based budgeting cannot be implemented which risks double ups across the different silos. It might be recommendable to take a more flexible interpretation of the way that these services are organized. That is, consider more common sources rather than separate silos.
Regarding the size of the Court, it would be worthwhile to have a more clear description of all mechanical relationships and the way they work together to be able to come up with more realistic figures of what their size means.
The external auditor notes that the budget increase exceeds inflation, meaning that staff and non-staff costs are continuing to rise.
Regarding non-staff costs, it would be worthwhile to implement a zero budget growth scenario and to justify each single expense.
To control staff costs, greater internal mobility has to be ensured.
The presentation and proposal of the budget goes into too much detail rather than focusing on central elements. A simplified document that looks only at the most important budget issues is necessary. This could preferably be disseminated no later than end of January.
Negotiations of the budget will continue in closed meetings where states will vote on the adoption of the proposed budget.
