Organizational Autonomy and Survival
in the United Nations System:
A Comparative Case Study
By
Dong Hoon Shin
Student Number: s1455508
Advising Professor
Prof. A.K. Yesilkagit
Second Reader
Prof. Brendan Carroll
Leiden University
Department of Public Administration, International Administration
2015
Chapter I: Introduction
Agency immortality, the notion that public institutions are extremely durable, resistant to change, and all but impossible to dismantle, was an idea that was commonly held in the study of public institutions. This idea was enshrined in Kaufman’s empirical research on the population of public institutions, which found that the population overall remained relatively stable. However, the myth of agency immortality has since been thoroughly debunked. Researchers have found that, behind the seemingly stable population of institutions, vast currents of change exist, with institutions constantly changing, dissolving, and being replaced with new institutions. For example, in their study of the population of international governmental organizations (IGOs), Shanks et al. present several interesting insights into the dynamics of change in the population of IGOs, and their relationship to IGO membership among states. According to the authors, they set out to, ”examine how countries affect the IGO population and how the IGO population in turn affects the choices that countries make about institutionalizing cooperation.”1 The authors find several trends within the time horizon they examined in the IGO population. A particularly intriguing aspect of their findings is the fact that IGO’s belonging to the United Nations (UN) family of organizations have increased their share of the entire IGO population from 27 to 35 percent in eleven years. Even more astounding is the fact that the driving force behind such a large shift in population is an even more dramatic process of change. Shanks et al. reveal that, within these eleven years, over a quarter of UN affiliated organizations were discarded or demoted, yet more than twice as many new organizations were added to the ensemble of UN organizations, which ultimately led to such a significant net increase in the UN’s share of the overall IGO population. Indeed, contrary to previously held notions of agency immortality, contemporary academic works seem to imply 1 Shanks et al (1996)that fluidity and change, rather than immortality, is the constant that is characteristic of the IGO population, and especially those IGOs belonging to the UN family of organizations. These observations give rise to several important questions to consider. What causes some organizations to survive and remain relatively unchanged, while many others are terminated or fundamentally changed? To what extent can the organizations themselves be the agents of their own survival? In order to provide some insight into the issues at hand, this thesis suggests a course of research that will hopefully add to our understanding of the conditions under which a UN organization is most likely to survive, as well as some of the actors involved in ensuring its survival. Specifically, this thesis explores the question of, to what extent does organizational autonomy play a role in ensuring organizational survival within the UN system? To this end, this thesis submits the Organization for the Prohibition of Chemical Weapons (OPCW), the International Atomic Energy Agency (IAEA), United Nations Development Fund (UNDP), and the ) the United Nations Development Fund for Women (UNIFEM) as four case studies with which to conduct a qualitative comparative analysis in order to better understand how IGOs in the UN system survive, and whether organizational autonomy is a significant precondition for survival. These four organizations will be grouped in pairs for analysis according to their organizational mapping within the UN system. The OPCW and IAEA are grouped together as UN‐related organizations, and UNIFEM and the UNDP are grouped together as UN funds and programmes.
Chapter II: Theoretical Framework
This chapter will serve primarily to provide the theoretical background that sets the context of this research. The literature review will explore the definitive concept of organizational autonomy and highlight any links found previously between organizational autonomy and organizational survival. It provides empirical trends that support the significance of initial institutional designs, which containsmany indicators for organizational autonomy, to the likelihood of an agency’s survival. Furthermore, we identify weak points in the academic literature found thus far and their implications for our analysis. Literature Review Authors Volgy, Fausett, Grant, and Rodgers state that, despite major efforts to empirically quantify and analyze the population of IGOs in the international system, there is a distinct lack of a systematic effort to focus explicitly on the broader conceptual definition of an IGO in contemporary academic literature. In their efforts to develop and analyze a new database on IGOs, Volgy et al. lay down the foundations of our working definition of organizational autonomy, which in their analysis, serves as a crucial criterion for identifying IGOs. Volgy et al. conceptualize recognition of formal IGOs along three dimensions: organizations that demonstrate ongoing decision‐making and oversight by states, evidence of bureaucratic organization, and demonstrable organizational autonomy. Simply put, the authors state that organizational autonomy can generally be regarded as staffing and funding being relatively immune from control by either a single member state or external actors. More specifically, the authors state that, first, an organization must have a permanent headquarters and non‐symbolic, professional staffing, independent of other IGOs and/or one single state. The issue of a permanent headquarters is relatively unambiguous. However, with regards to staffing, the authors state that staff must be sufficiently large enough to administer and operate a complex organization, rather than being a small symbolic staff comprised of only a few people responsible only for minor clerical functions. Furthermore, they require that the staff must be professional, in that the staff administer the organization as their livelihood, and that the administration itself be “paid by, reports only to, and holds as its permanent assignment, the IGO in question.”2 With regards to funding, the authors state that funding for an IGO be non‐symbolic, systematically available, and independent of any one state or 2 Volgy et al. (2008)
another IGO. Funding for an IGO should be minimally sufficient to support staffing beyond one or two individuals, and it must be systematically available with its terms of availability codified in the charter/constitution of an IGO. Furthermore, the majority of an IGO’s budget must be independent of any single actor, be it a member state or another IGO. Having laid down an initial working definition of organizational autonomy for IGOs, the next step is to explore any links found previously in academia between organizational autonomy and survival. The prime major example would be work done by Lewis. Lewis attempts to examine agency mortality as it relates to political turnovers in the US government. Among his findings, Lewis reveals that agencies created by statute tend to be more durable than those created by executive action. The reasoning behind this dynamic Lewis puts forth is that creation by statute offer organizations an increased degree of insulation from hostile politics that seek to dismantle the organization, due to the fact that the termination process must undergo legal and judicial barriers, thus decreasing the likelihood of organizational death.3 Furthermore, Lewis reveals that organizations tend to be more vulnerable to termination under periods of unified government, as well as when it encounters a president from the opposite party of the president that created the organization.4 Therefore, it stands to reason that the greater the degree of insulation an organization has from politics and dominant actors in the environment, such as unified governments and hostile office‐holders, the more it is likely to survive. In other words, an organization will exhibit higher rates of survival the more control it has over its own affairs, free from external political pressures. The work of Boin et al. seem to confirm, to a degree, the conclusions drawn from Lewis’s work. The authors set out to analyze mortality rates of US New Deal organizations using institutional design features as their independent variables. Two variables in their analysis of critical importance to this 3 Lewis (2002) 4 Lewis (2002)
thesis are hierarchical independence and the existence of a board or commission structure. Ultimately, for both of these variables, the authors find that there is a time‐dependent correlation between survival time of organizations, and hierarchical independence and the existence of a board or commission structure. For both of these factors, there is, in fact, a negative correlation with survival time for the first five to six years of an organization’s existence. The existence of these two factors will make it more likely that an organization will perish within six years of creation. However, as the time horizon expands to beyond six years, the correlation flips. After the six year mark, an organization is more likely to have a higher survival time and a decreased hazard rate if it is more hierarchically independent and has a board/commission structure in place.5 Missing Pieces of the Puzzle Thus far, we have gathered a substantive amount of previous academic work that explore the concepts of organizational termination and survival, and organizational autonomy. We have identified how to differentiate between various forms of organizational change and termination, which allows us to more precisely assess the conditions of an organization’s survival, and what can truly be considered “survival.” We have laid down an initial working definition of what organizational autonomy is within the scope of this analysis, and have identified many indicators for autonomy. We have explored the political contexts under which autonomy can conceivably have a significant impact on an agency’s survival, and we have also gathered information on empirical correlations between institutional designs critical to autonomy and mortality rates of organizations. However, we are still missing many crucial pieces of the puzzle. First, much of the previous academic works seem to provide little in the way of accounting for different types of international organizations, with varying functions, organizational histories, 5 Boin et al. (2010)
organizational cultures, and structures. For instance, although Volgy et al. provide clear‐cut definitions of what constitutes an IGO, they fail to account for organizations that are offshoots of a parent organization, yet are clearly distinct. They site membership and autonomy as interrelated and inseparable criteria for consideration as an IGO, yet what is to be done for organizations that do not have member states, but operate independently and yet are closely tied to another organization via administrative and budgetary dependencies? The working definition of what can be considered autonomy and formal IGOs must be expanded so that our analysis can encompass such organizations. Second is the question of generalizability. Namely, the vast majority of academic work on organizational survival revolve around national government agencies or the private sector. For example, the subject of Lewis’s work is primarily the US federal system, and how US government agencies interact with national politics. The conditions under which UN organizations operate, however, are vastly different from national agencies, and thus, the scope of analysis must be expanded considerably in order to confidently apply conclusions drawn from his work to the population of UN organizations. Hypothesis H1: Organizations in the UN system exhibiting higher levels of financial autonomy will exhibit higher rates of organizational survival than those exhibiting lower levels of financial autonomy. H2: Organizations in the UN system with a governing board structure in place will exhibit higher rates of organizational survival than those without a governing board structure in place.
Chapter III Methodology
The Research Question To what extent does organizational autonomy play a role in ensuring organizational survival in the UN system?Dependent Variable. The dependent variable in this analysis is organizational survival. However, the concept of organizational survival is a fairly nebulous one. How does one identify organizational termination? How can one differentiate varying forms of organizational change from true organizational mortality? Current academic literature generally do not classify an organization’s state of being according to a dichotomous categorization of birth and death, however. Rather, literature recognizes an organization’s lifespan as a range of varied states of existence with even more varying degrees of change lying between an organization’s birth and death. Bringing the discussion back to organizational survival, however, literature also identifies different types of organizational deaths, allowing us to more precisely pinpoint the moment and circumstances of an IGO’s failure to survive. In an analysis of the life history of all organizations within a certain population, authors Hannan and Freeman make the distinction between four types of organizational mortality; disbanding, absorption by another organization, merger, and radical change of form. With regards to these classifications, absorption and mergers pose a somewhat puzzling conundrum. Does an organization truly die when it merges with a different organization? In the case of absorption, how does one differentiate the new organization from its precursory organizations, and which of the precursory organizations have truly ended? The authors assert that the answers to these questions are specific to the case, and depend on, for example, leadership, organizational structure, and how an organization presents itself to the outside world.6 Author Lewis, in a study of agency mortality between 1946 and 1997, also brings up the issue of the difficulty in classifying an organization’s termination. Lewis addresses the issue by stating that termination includes circumstances where an agency has been eliminated in its entirety with all of its functions, or if it has a name change, a location change, and 6 Hannan and Freeman (1989)
change of function.7 Boin, Kuipers, and Steenbergen also address the issue of ambiguities in defining agency termination versus change and/or survival. In a departure from Lewis, Boin et al. consider organizations created as a result of a merger, or being split off from an existing organization, as births of new organizations. On the other hand, they consider a merger of old organizations as the deaths of those organizations. They also classify organizational splits into two or more organizations as the death of the original. The implied result of Boin et al.’s agency mortality definitions are relatively higher rates of organizational birth and death.8 Within the scope of this analysis, we use the definition of organizational survival put forth by Boin et al., and consider the merging of an organization into a new one as death. Organizational survival is measured along a dichotomous scale, and in the case where an organization retains its original functional domain (including the addition of new functions to an organization’s original mandate), with a consistent name, headquarter (barring a simple location change), and staffing will be considered survival. The loss of any one of these characteristics will be considered organizational termination. Independent Variables The independent variable in this thesis is organizational autonomy. In his study of credibility and delegation of tasks to independent regulatory agencies, Gilardi cites the difficulty associated with measuring the formal autonomy of public agencies and diluting the idea down to a singular unit of measurement. Gilardi argues that data on agency independence is generally unavailable and no satisfactory operationalization for the concept has been developed in previous academic works, and thus, he constructs his own index of organizational independence. This index is composed of several groups of indicators that, aggregated together, provide a plausible measure of organizational autonomy. These indicators are grouped into five dimensions of autonomy: Agency head status, management 7 Lewis (2002) 8 Boin et al. (2010)
board members’ status, relationship with government and parliament, financial autonomy, and regulatory competencies.9 Because of the multifaceted nature and far‐reaching implications of the concept of organizational autonomy, and the very specific nature of the environment UN organizations operate within that greatly differ from the regulatory bodies that were the focus of Gilardi’s analysis, it is ill‐advised to directly apply his index to the study of international organizations. Therefore, this thesis adopts the most readily applicable elements of Gilardi’s conceptual framework of agency independence and autonomy in order to most accurately gauge the autonomy of UN organizations. The two indicators for organizational autonomy from Gilardi’s index that this thesis adopts are: financial autonomy and board structure. In his study of government agencies, Meier investigates the links between an agency’s access to resources, autonomy, and the subsequent interplay between these two factors that result in organizational power. In terms of organizational autonomy, Meier stresses that financial autonomy is a critical determinant of the insulation an organization has from its political environment. No different from government agencies, IGOs are dependent on its environment and external actors (often member states or parent organizations) for funding. Thus, the very sources of an IGO’s budget, the conditions applied to budgeting and the discretion granted to an organization in the allocation of its resources by its constituents are a major determinant of an IGO’s environmental insulation, and as an extension, its autonomy. In their comparative study of state agencies and the concepts of organizational autonomy and control, Verhoest et al. elaborate more specifically on the link between an agency’s source of funding and organizational autonomy. Citing work by Pollitt and Gains, Verhoest argues that agencies with a large proportion of its own income will have more autonomy than those with a smaller proportion of its own income.10 On the mechanisms of financial autonomy’s importance to 9 Gilardi (2011) 10 Verhoest et al. (2010)
organizational autonomy, Verhoest explains that, if an agency is unable to generate any income independently, and it has a sizeable budget, then a superior department is more likely to attempt to control the agency, resulting is less overall organizational autonomy. In contrast, if an agency is able to earn all it needs to survive, it does not have a need for a superior financing department, and thus, is more likely to resist control by other entities, ultimately resulting in higher organizational autonomy. Due to differing reporting standards and practices of each organization, it is necessary to categorize all types of reported sources of income according to a universal typology applicable to this study. For the purposes of this thesis, financial autonomy is split into two categories: contributions from external sources, and independently generated income. Contributions from external sources include any types of donations, gifts, and state contributions to an organization’s resources. Independently generated income are funding and resources the organization is able to accrue internally, such as from interest income on any assets and investments made by the organization, income from reimbursable services, capital, and materials, as well as any other miscellaneous income reported as such. As Boin et al. have shown, there indeed exists a significant time‐dependent positive correlation between organizational survival time and the existence of a governing board structure in the organization. However, what of the links between organizational autonomy and board structure? Yesilkagit and Christensen argue that the governance structure of agencies is, in fact, a critical determinant of organizational autonomy. They put forth that a governing board structure is a measurement of the formal distance between the agency head and the supervising official or department, and in essence, serves as a buffer between the agency and a superior external entity. The relevant governing boards, according to Yesilkagit and Christensen, must be endowed with decision‐ making authority, and generally speaking, are responsible for the appointment of the agency head, preparation of the budget, and oversight of the management of the agency and the implementation of policies. With these infrastructures and procedures in place, the agency head is no longer directly
accountable to an external actor, but reports instead to the governing board. Because the boards possess decision‐making authority, they too, are somewhat exempt from direct external oversight even when some members of the board may be appointed externally.11 Thus, the presence of a governing board with decision‐making capabilities does indeed have a positive effect on organizational autonomy. This thesis organizes board structure according to two structural features: function and composition. By examining the purpose a board serves in an organization, and how members of the board are selected, we can determine whether the board adheres to the typology of governing boards demonstrated to have an effect on autonomy. By examining whether the board is, in fact, capable of decision‐making and the procedures by which the board acts, we can determine whether the board does indeed have the relevant decision‐making capabilities for this analysis. Analysis Strategy This research is constructed as a comparative qualitative analysis of multiple case studies. It will be theory testing in nature, attempting to confirm whether previously explored links between organizational autonomy and survival extends to different types of organizations in the UN system. This research will compare and contrast organizations of the same categorical type within the UN system over a period of ten years, from 2000 to 2010. Thus, our primary unit of analysis is the individual 11 Yesilkagit and Christensen (2009) Table 1. Independent variable: organizational autonomy Indicators Measurements Financial Autonomy ‐ Percentage of income from contributions from external sources ‐ Percentage of income from independently generated income Board Structure ‐ Function ‐ Composition
organizations that form our specific case selections. In Chapters IV and V organizations belonging to their respective category of organizations will be compared against each other according to our two indicators of organizational autonomy, financial autonomy and board structure, in order to draw generalizable conclusions about the effects of organizational autonomy on survival for that type of organization. Chapter IV will deal with UN‐related organizations, while Chapter V will deal with UN funds and programmes. Chapter VI will then present an analysis of the data presented in Chapters IV and V. This thesis will then conclude by relating the findings on the two organizational pairings back to the theoretical discussion of the effects of organizational autonomy on survival, theoretical limitations of this study, and avenues for further research. Income sources will be categorized according to the typology suggested in the work of Verhoest. An income source stemming from external actors, including sources such as assessed contributions, voluntary contributions, and donations will be defined as contributions from external sources. Income sources stemming from internal sources, independent of external factors, such as interest income from investments, assets, etc. or income generated from the provision of materials, personnel, or services will be defined as independently generated resources. Changes over the relevant time period in the proportions of total income shared by these two income sources will be examined to determine the level of relative financial autonomy between the two organizations. Organizations having a larger proportion of their income from contributions from external sources and a lower proportion of their income from independently generated income will be considered to have lower levels of financial autonomy, with the converse holding true as well. Analysis of board structure, unlike financial autonomy, will depend largely on qualitative data. Relevant data sources will be analyzed in order to determine function and composition of the board structure for each organization. Function allows us to determine over which aspects of organizational management the board has authority over. If the board is able to make decisions on substantial matters
pertinent to the organization’s administrative, financial, and operational activities, as opposed to serving only advisory or reporting functions, it will have a positive impact on organizational autonomy. The composition of the board will allow us to determine whether members of the board and/or the leadership structure of the board is appointed internally or by external actors. Boards with members being appointed internally will be considered to have a larger positive impact on organizational autonomy than those with members being appointed by external actors. The aggregate of both of these measurements will be considered when assessing the comparative impact of board structure on organizational autonomy for our case selections. Case Selections As mentioned earlier, the four organizations selected to form our case selections are the OPCW, the IAEA, UNIFEM, and the UNDP. These four organizations have been paired according to their organizational categorizations according the UN organizational mapping structure, as UN‐related organizations, and UN funds and programmes. The OPCW and the IAEA both serve as interesting case studies for this analysis because several important distinctions remain between the IAEA and OPCW, and the majority of UN organizations, all of which would seem to inhibit organizational change or termination, and enhance prospects for organizational survival. First, although both the OPCW and the IAEA exist within the UN system of organizations, they are granted an unusual level of autonomy. They are both classified as “UN‐related organizations” under the UN map of organizations, as a clear distinction from organizations that would be considered “UN organizations”. Provisions remain in place for both organizations for certain budgetary, administrative, operational, and legal ties to the UN. In practical terms, due to these ties, both the OPCW and the IAEA exist within the UN system. However, both organizations, in their respective agreements with the UN, are afforded recognition by the UN as independent and
autonomous international organizations, and operate as such. Second, membership criteria for both organizations are geographically nonrestrictive, and are purely based on common goals and purpose. According to Shanks et al., organizations which are geographically non‐restrictive, but purpose‐driven in terms of membership were the most likely to survive.12 Third, the mission objectives and functional domain for both organizations are highly technical, and fall within the military/scientific functional domain. Furthermore, member states, with perhaps the exception of a few outliers, all have vested political interests in sustaining some form of cooperation in the field of nonproliferation and the restriction of the usage and production of weapons of mass destruction. Thus, these two organizations provide excellent potential case selections for this research, because they are theoretically highly resistant to change and termination, and therefore provide a good backdrop to examine organizational survival within the UN system. Within the scope of an intra‐pair analysis, the key difference between the two organizations is age. Because there has not yet been a case of a UN‐related organization being terminated, this pair was chosen because the IAEA is a significantly longer lived organization than the OPCW, with an organization lifespan difference of forty years. This being the case, we take longer lifespan as a substitute for increased organizational survival. Work done by Freeman, Carroll, and Hannan support this assumption, as they confirm that there does indeed exist a liability of newness for organizational populations where the death rate among organizations at early ages are much higher than those at later years.13 Thus, we expect that due to its longer lifespan, the IAEA will exhibit higher levels of organizational autonomy than the OPCW. UNIFEM and the UNDP are both case examples of UN funds and programmes. UN funds and programmes are those organizations most closely tied to the UN system. These organizations are established to address specific humanitarian and development issues, and generally report directly to 12 Shanks et al. (1996) 13 Freeman et al. (1983)
the General Assembly or the Economic and Social Council. As such, these types of organizations are presumably the least autonomous type of UN organizations among the three outlined in this thesis. Membership criteria in these types of organizations are generally not state‐specific. That is to say, these organizations are not separate IGOs by virtue of a membership comprised of states, but rather, are distinct organizations administered by the UN and its principal organs and composing of representatives from the same members of the UN. The functional domain for these types of organizations, as mentioned earlier, are usually comprised of humanitarian and development issues. The functional domain of UN funds and programmes tend to be less technical than those of UN related organizations and can be comparable in technicality to the functional domain of specialized agencies. Within this pair, UNIFEM, which was in operation from 1976 to 2011, when it was merged with other organizations to form UN WOMEN, will serve as an intra‐group form of control to more assertively determine the role of autonomy in survival within the UN system. Because UNIFEM was terminated as an organization in 2011, as opposed to the UNDP which is still in operation, we expect that UNIFEM will exhibit lower levels of organizational autonomy than UNDP. Data Collection Data collection for this research will revolve primarily around primary sources. Data for the financial autonomy indicator will primarily be quantitative in nature, while data for the board structure indicator will be qualitative. In the case of UN‐related organizations, the OPCW and the IAEA, the CWC and the Statute of the IAEA, the treaties that establish the institutional groundwork of these two organizations respectively, will serve as our beginning point of analysis. These documents provide the institutional foundations for both financial autonomy and board structure indicators as outlined in the previous section. In the case of the OPCW, the annually published series of documents of the Conference of States Parties, Programme and Budget and Working Capital Fund, will be used to track any changes to both financial autonomy and board structure indicators. A similar strategy is adopted for
the analysis of the IAEA; The Agency’s Budget Update, published annually at the conclusion of every IAEA General Conference and available on the IAEA website will be used to track changes to income sources and financial autonomy. One caveat to note is that relevant data for financial autonomy for the OPCW is reported in euros, contrasting with dollars for the IAEA. However, currency adjustments are not necessary for the purposes of this thesis as it is concerned mainly with proportions of income composition. With regards to UN funds and programmes UNDP and UNIFEM, the UN resolutions that establishes the two organizations, accompanying annexes, and further resolutions elaborating on institutional design will be used as a starting point for our analysis. With regards to financial autonomy, this research will utilize data on income sources, available from the series of annually published reports by the Administrator of the UNDP, Annual Review of the Financial Situation, in the case of the UNDP, and UNIFEM Annual Reports, in the case of UNIFEM. In terms of board structure, the resolutions establishing each organization, rules and procedures documents, and relevant official reports will be used to construct data according to function and composition.
Chapter IV: UN‐Related Organizations
(A) OPCW The OPCW was founded in 1997 in order to uphold the ideals set forth in the Convention on the Prohibition of the Development, Production, Stockpiling, and Use of Chemical Weapons and on their Destruction, more commonly known as the Chemical Weapons Convention (CWC). The CWC puts forth four key provisions: destroying all chemical weapons under international verification by the OPCW, monitoring the chemicals industry to prevent new weapons from re‐emerging, providing assistance to state parties against chemical threats, and fostering international cooperation to strengthen the implementation of the CWC and promote the peaceful use of chemicals. To this end, authors Krutzschand Trapp assert that the OPCW’s original mandate and raison d’être as an IGO are threefold: (1) To contribute towards the progress of the disarmament process under international control and to uphold the principles of the United Nations Charter, (2) to cope with the complexities of international verification of compliance with the CWC, (3) to provide an international forum for consultation and cooperation among partners.14 As an institution, the OPCW was founded as an autonomous IGO within the United Nations system, with standards similar to previously established IGOs, most notable of which is the International Atomic Energy Agency. Legally, the OPCW is classified as an international legal entity as defined in Articles 104 and 105 of the UN Charter. It is able to “enter into agreements with states and IGOs, and acquire rights and assume obligations under private law in the territory of its members.”15 The OPCW is currently comprised of 190 member states. The OPCW features three statutory organs: the Conference of State Parties, the Executive Council, and the Technical Secretariat. Board Structure Conference of State Parties The Conference of State Parties was established as the principal organ of the OPCW. It is responsible for the implementation of the CWC and oversees the activities of both the Executive Council and the Technical Secretariat. Issues raised by state parties or the Executive Council regarding the implementation and scope of the CWC are brought to the Conference of State Parties. The tasks of the Conference of State Parties are outlined in paragraph 21 of Article VIII of the CWC. These include: taking measures necessary to ensure compliance with the Convention, deciding on the programme, budget, and scale of financial contributions to be paid by states parties, approving the annual report of the 14 Krutzsch and Trapp (1994) 15 Krutzsch and Trapp (1994)
OPCW, electing members of the Executive Council, appointing the Director‐General of the OPCW, approving the rules of procedure of the Executive Council, establishing subsidiary organs as necessary or delegating the right to the other statutory organs, encouraging and promoting peaceful international cooperation in the field of chemical activities, and reviewing scientific and technological developments that could affect the CWC.16 Decisions in the Conference are made through a voting procedure. Each Member of the Organization has one vote. Decisions on questions of procedure are decided by a simple majority vote. Decisions on matters of substance are generally urged to be sought through consensus. However, if consensus is unattainable after a deliberatory period of 24 hours, a two‐thirds majority vote is required. The Conference is comprised of all state parties to the CWC, with each member having one representative in the Conference. A state that is a signatory to the CWC, but has not yet ratified it are entitled to participate in the Conference without the ability to take part in the adoption of decisions. Observer states, any non‐signatory state to the CWC that has acceded to the CWC and applied to the Director‐General for observer status are able to appoint an observer to attend and participate without vote. Representatives of the UN and of other UN specialized agencies are also entitled to send representatives to attend and participate without vote on matters of common interest to the OPCW and them, as well as those of international organizations unaffiliated with the UN. The Conference is also supported by several Committees of the Conference. At each session, the Conference appoints a General Committee, consisting of the Chairman of the Conference, and ten Vice‐ Chairmen, as well as the Chairman of the Committee of the Whole, which will be discussed later. The General Committee considers and reports on the provision agenda for the Conference at the beginning 16 Article VIII of the Chemical Weapons Convention, available at http://www.opcw.org/chemical‐weapons‐ convention/articles/article‐viii‐the‐organization/#c11977
of each session, including requests on the addition of supplementary items to the agenda, and proposes the allocation of agenda items. The Committee of the Whole is considered the “main committee” of the Conference. It “serves as the forum for the discussion of issues which, in the estimation of the Conference, are not yet ripe for decision‐making.” In other words, the Committee as a whole serves as a deliberatory body to discuss potential future matters and circumstances that require consultations and discussions with all members to the Conference as well as many unresolved issues.17 The Executive Council Under the supervision of the Conference of State Parties, the Executive Council is the executive organ of the OPCW, responsible for the effective implementation of, and compliance with the CWC. It supervises the activities of the Technical Secretariat, cooperates with the government of each member state, and facilitates consultations and cooperation among member states at their request.18 Its powers and functions are outlined in paragraphs 30 through 36 of Article VIII of the CWC. Important functions outlined in Article VIII include the taking of measures in cases of non‐compliance with the CWC, consideration and submitting of a draft of the OPCW programme and budget to the Conference of State Parties, drafting of reports to the Conference of State Parties on the status of the implementation of the CWC and the performance of its activities, and the making of a recommendation of the appointment of a Director‐General of the Technical Secretariat to the Conference of State Parties. The Executive Council is also granted a number of powers under the aegis of its responsibility to the OPCW and the CWC. These include concluding agreements with state parties with regards to assistance and protection from chemical weapons, as well as agreements with other IGOs, and approving arrangements made between 17 Rules of Procedure of the Conference of the States Parties of the Organization for the Prohibition of Chemical Weapons, C‐I/3/Rev.2 (8 April 2013). 18 Krutzsch and Trapp (1994)
the Technical Secretariat and member states on verification processes.19 Notably, in cases of particular gravity and urgency, the Executive Council is tasked with directly bringing the issue to the attention of United Nations General Assembly and the Security Council.20 The decision‐making process of the Executive Council is generally done through two‐thirds majority vote of all members. However, two specific exceptions exist. First, decisions made under Article X, paragraph 10 of the CWC, decisions of the Executive Council to provide supplementary assistance in cases of alleged use of, or the threat of use of chemical weapons, can be made by a simple majority vote. Second, decisions under Article IX paragraph 17 of the CWC, preventing a challenge inspection from going forward, must be made by a three‐quarters majority vote.21 The members of the Executive Council are appointed by the Conference of State Parties. The Executive Council is composed of 41 members, each state having equal rights to be appointed and serving for a term of two years. It should be noted, however, that appointment follows geographic distribution, according to the primacy of chemical industry and with attention paid to political and security interests. With regards to geographic distribution, the regional groups represented in the Executive Council follow a formula as stipulated in Article VIII of the CWC; nine members from Africa, nine members from Asia, five members from Eastern Europe, seven members from Latin America and the Caribbean, ten members from Western Europe and Other States, and one additional State Party designated on a rotating basis from Asia or Latin America and the Caribbean. The Executive Council is also comprised of a Chairman and four Vice‐Chairmen, who are elected from among the accredited Representatives and each hold office for a period of one year. Chairmanship of the Executive Council 19 Rules of Procedure of the Executive Council, C‐I/DEC.72 (23 May 1997) 20 Krutzsch and Trapp (1994) 21 Rules of Procedure of the Executive Council, C‐I/DEC.72 (23 May 1997)
rotates among the representatives from the five regional groups specified earlier, and the four Vice‐ Chairmen are elected on the designation of their respective regional groups. Financial Autonomy The annual document series issued by the OPCW, Programme and Budget and Working Capital Fund outline three types of reported income: assessments to member states, verification payments under Articles IV‐V, and interest and miscellaneous income. Of these categories, assessments to member states will be considered contributions from external sources, while verification payments under Articles IV‐V and interest and miscellaneous income will be grouped together as independently generated income. The basic principles of the OPCW’s budgetary and financial infrastructure are detailed in the CWC. Furthermore, Decision C‐I/DEC.3/Rev.1 of the First Session of the Conference of the State Parties, OPCW Financial Regulations, also details the specific provisions for the OPCW’s sources of financial resources and the management of these resources. According to Article 5 of Decision C‐I/DEC.3/Rev.1, and also mentioned in Article VIII of the CWC, the costs of the OPCW’s activities are paid for by State Parties, subject to the UN scale of assessments, which are then adjusted to take into account differences in membership between the UN and the OPCW. The Conference of States Parties is responsible for assessments of the contributions by State Parties for each financial period. In addition to the programme budget, Decision C‐I/DEC.3/Rev.1 also stipulates the establishment of a Working Capital Fund, in an amount and for purposes to be determined by the Conference of the States Parties. The Working Capital Fund does not exceed two‐ twelfths of the budget provision for the specified financial period, and is funded by advances from State Parties which are, similar to the programme budget, subject to scale of assessments determined by the Conference of States Parties. Provision 6.8 also stipulates that trust funds may be established by the Conference of the States Parties and the Director‐General of the OPCW to account for voluntary
contributions. Furthermore, Article 9 provides for measures allowing the Director‐General to make short‐term investments of funds that are not needed to pay for the OPCW’s immediate requirements and operations. Income derived from investments are accounted for under the fund from which it was derived, and ultimately, from assessed contributions, unless otherwise stated by the Conference of the States Parties.22 Articles IV and V of the CWC present some important caveats to the management of the OPCW’s activities and associated operational and administrative costs. According to paragraph 16 of Article IV, each State Party is to meet the costs of the destruction of chemical weapons they are obliged to destroy themselves, and furthermore, must also meet the costs of verification of storage and destruction, unless deemed otherwise by the Executive Council.23 Article V contains similar stipulations for the distribution of operational costs pertaining to chemical weapons productions facilities. Namely that, according to paragraph 19 of Article V, each State Party is to meet the costs of the destruction, and verification of destruction of any chemical weapons production facilities it is obliged to destroy, unless otherwise dictated by the Executive Council.24 The implications of these provisions are that, in budgetary terms, the operational and administrative costs associated with the destruction and verification activities the OPCW is responsible for can be considered a distinct source of income generated by its activities. 2000‐2010 The results of the OPCW’s budgetary statements of income from the period of 2000 to 2010 are presented in Table 2. As Figure 1 illustrates, overall budgetary income for the OPCW saw steady increases from 2000 to 2004 rising from 60,238,000 euros to 73,153,000 euros. This first period of growth was fuelled largely by increased income from assessments to Member States, as its share of total 22 OPCW Financial Regulations, C‐I/DEC.3/Rev.1 (2 December 2004). 23 Krutzsch and Trapp (1994) 24 Krutzsch and Trapp (1994)
budgetary income rose from 79 percent in 2000 to 94 percent in 2004. On the other hand, income from verification payments under Articles IV and V decreased both in relative and absolute terms, dropping from 14 percent at 8,145,000 euros in 2000 to 6 percent at 3,900,000 euros in 2003. However, in 2005, this figure increased to 4,418,000 euros representing 6 present of total income. This shift in income source distribution towards higher verification payments in 2005 was accompanied by a relative decrease in Income from assessments to Member States, which dropped from 68,653,000 euros (94 percent of budgetary income) in 2004 to 70,677,000 euros (93 percent) in 2004. Income from interest and miscellaneous income also steadily dropped in this period from 4,259,000 euros representing 7 percent of the total budget in 2000 down to 600,000 euros representing less than 1 percent of budgetary income in 2004.
Table 3. Distribution of Income Source for the OPCW from 2000 to 2010 (in thousands of euros and percentage of total income) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Assessments to Member States (percentage of total) 47,835 (79%) 54,898 (91%) 58,233 (94%) 64,027 (93%) 68,653 (94%) 70,677 (93%) 69,791 (92%) 68,640 (91%) 68,331 (91%) 68,207 (92%) 67,966 (91%) Contributions from External Sources 47,835 (79%) 54,898 (91%) 58,233 (94%) 64,027 (93%) 68,653 (94%) 70,677 (93%) 69,791 (92%) 68,640 (91%) 68,331 (91%) 68,207 (92%) 67,966 (91%) Verification payments under Article IV‐V (percentage of total) 8,145 (14%) 3,997 (7%) 3,000 (5%) 3,900 (6%) 3,900 (5%) 4,418 (6%) 5,373 (7%) 5,636 (8%) 5,944 (8%) 5,393 (7%) 6,239 (8%) Interest + miscellaneous Income (percentage of total) 4,259 (7%) 1,343 (2%) 700 (1%) 636 (1%) 600 (1%) 600 (1%) 450 (1%) 750 (1%) 750 (1%) 900 (1%) 300 (1%) Independently Generated Income 12,404 (21%) 5,340 (9%) 3,700 (6%) 4,536 (7%) 4,500 (6%) 5,018 (7%) 5,823 (8%) 6,386 (9%) 6,694 (9%) 6,293 (8%) 6,539 (9%) Total 60,239 60,238 61,933 68,563 73,153 75,695 75,614 75,026 75,025 74,500 74,505
From 2004 until 2010, the OPCW’s overall budgetary income plateaus and, for the most part, remains somewhat stable with a slight downwards trend, starting from 73,153,000 euros in 2004 and ending in 74,505,000 euros in 2010. The composition of the OPCW’s budgetary income for this period also saw slight changes. As mentioned before, 2004 marks a period of a slight temporary downwards shift in assessments to Member States and modest increases to verification payments under Articles IV and V. However, in 2005, income from assessments to Member States increases to 70,677,000 euros, before resuming its slight downwards trend, ending in 67,966,000 euros (91 percent of total income) in 2010. Income from verification payments under Articles IV and V begins to increase in 2004, starting at 3,900,000 euros (5 percent of total income), rising to 7 percent in 2006 and remaining relatively stable until 2010, when it ended at 8 percent of total income. 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Value of Income (in euros) Year Figure 1. Distribution of OPCW Sources of Income Interest + miscellaneous Income (percentage of total) Verification payments under Article IV‐V (percentage of total) Assessments to Member States (percentage of total)
As Figure 2 demonstrates, independently generated income accounted for 21 percent of total income for the OPCW in 2000, with the other 79 percent of income being composed of contributions from external sources. Independently generated income drops by more than half to 9 percent in 2001, and continued to drop at a much lower rate to 6 percent of total income by 2002. Until 2005, independently generated income fluctuates between 6 percent and 7 percent of income. However, it begins to rises consistently in 2006 (8 percent of total income) until it reaches 9 percent in 2007 and remains stable until 2010, albeit with a brief decrease to 8 percent in 2009. (B) IAEA The institutional foundations and organizational design of the IAEA are enshrined in the Statute of the IAEA. The Statute was first approved in 1956 by the Conference on the Statute of the International, Atomic Energy Agency, and came into force in 1957. According to Article II of the Statute, 79% 91% 94% 93% 94% 93% 92% 91% 91% 92% 91% 21% 9% 6% 7% 6% 7% 8% 9% 9% 8% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Percentage o f Total Income Year Figure 2. Contributions from External Sources vs. Independently Generated Income for the OPCW Contributions from External Sources Independently Generated Income
the IAEA is tasked with seeking “to accelerate and enlarge the contribution of atomic energy to peace, health and prosperity throughout the world. It shall ensure, so far as it is able, that assistance provided by it or at its request or under its supervision or control is not used in such a way as to further any military purpose.”25 In pursuing this all‐encompassing statutory objective, Article III of the IAEA Statute empowers the organization with seven primary functions: (1) research on, and development and practical application of atomic energy for peaceful uses throughout the world, (2) provision of materials, services, equipment, and facilities to meet the needs of research, development, and application of peaceful uses of atomic energy, (3) foster the exchange of scientific and technical information for peaceful uses of atomic energy, (4) encourage the exchange of training of scientists and experts in peaceful uses of atomic energy, (5) establish and administer safeguards to ensure materials, services, equipment, facilities, and information made available by the IAEA not be used for military purposes, (6) establish or adopt standards of safety for protection of health and to provide for the application of these standards to its own operations as well as to any operations making use of materials, services, equipment, facilities, and information made available by the IAEA, and (7) to acquire or establish any facilities, plant and equipment useful in carrying out its authorized functions, whenever the facilities, plant, and equipment otherwise available to it in the area concerned are inadequate.26 Board Structure The General Conference The Statute of the IAEA presents the initial institutional design of the IAEA in the three major principle organs that comprise the organization. These are, the General Conference, the Board of Governors, and the IAEA Secretariat. The two major policy‐making organs of the IAEA are the General 25 Article II of the Statute of the IAEA, available at https://www.iaea.org/node/9642#a1‐2 26 Article III of the Statute of the IAEA, available at https://www.iaea.org/node/9642#a1‐2
Conference and Board of Governors. Article V of the Statute empowers the General Conference as the highest policy‐making body of the IAEA. The General Conference meets annually to discuss and approve the IAEA’s programme and budget, as well as any matters brought to the Conference by the Board of Governors, the Director General, and Member States.27 Special sessions may be convened by the Director‐General at the request of the Board of Governors or a majority of IAEA members. The Conference also approves the rules and limitations of the exercise of borrowing powers by the Board of Governors per Article XVI of the Statute, which details the protocol for the Board of Governor’s access of the general fund and borrowing powers of the Board on behalf of the IAEA. The General Conference also elects members of the Board of Governors, approves states for membership in the organization, suspends members from privileges and rights of membership in the IAEA, and approves the appointment of the Director General of the IAEA. Furthermore, the organ is responsible for the approval of reports for submission to the UN, as well as agreements with other organizations. Decision‐making in the General Conference is done through votes, with each member of the IAEA being entitled to one vote. Decisions on any financial matters, suspension of members from exercising rights and privileges of membership, or proposals for amendments to the IAEA Statute require a two‐thirds majority vote. Any other matters discussed by the General Conference require a simple majority vote to pass.28 The General Conference is composed of representatives from all member states with each member state having one vote. Representatives of states not members of the IAEA and representatives of the UN and UN specialized agencies are also invited to attend the General Conference and participate on common matters without vote. Similarly, representatives from other international organizations and 27 Article V of the Statute of the IAEA, available at https://www.iaea.org/about/statute#a1‐5 28 Article XI of the Rules of Procedure of the General Conference, available at https://www.iaea.org/about/policy/gc/rules‐of‐procedure‐general‐conference#item11
non‐governmental organizations unaffiliated with the UN may also participate without vote on matters of common interest between them and the IAEA. The General Conference is presided by the President of the General Conference, elected by the General Conference and holding office until the close of the session at which they are elected. Eight Vice‐Presidents are elected by the General Conference upon the nomination of potential candidates by the Presidents, with due regard for equitable geographic representation. The President also nominates a candidate for the Chairman of the Committee of the Whole for election by the General Conference. As with the Presidency of the General Conference, each office term lasts until the close of the General Conference session. The General Conference also includes several Committees supporting the work of the Conference. Most prominently, the General Committee, appointed for each session of the General Conference by the members of the Conference, is composed of the President of the General Conference, the eight Vice Presidents, the Chairman of the Committee of the Whole, and five additional members elected by the General Conference upon proposal by the President. The General Committee is responsible for the consideration of the provisional agenda at the beginning of each General Conference session along with any supplementary items and reports their deliberations to the General Conference. It also proposes the allocation of agenda items to various committees of the General Conference and examines the credentials of all delegates of the General Conference. It may revise resolutions adopted by the General Conference, although not on matters of substance, and reports any such revisions to the General Conference. The Board of Governors Article VI of the Statute establishes the Board of Governors as the second policy‐making organ of the IAEA. The Board of Governors examines and makes recommendations to the General Conference on the IAEA’s programme and budget, and is also responsible for the consideration of new memberships
prior to submission for consideration by the General Conference. It also approves safeguards agreements and the publication of the IAEA’s safety standards. The Board of Governors is tasked with overseeing the programmes and projects of the IAEA, and for reporting the status of these activities to the General Conference. The Board of Governors is also tasked with the appointment of the Director General of the IAEA, pending the appointment’s approval by the General Conference.29 Decision‐making in the Board of Governors is done through votes, with each Governor being entitled to one vote. Decisions regarding the IAEA’s budget, the appointment of the Director General, proposals for amendments, or the amendment or suspension of rules and procedures require a two‐ thirds majority vote.30 The Board of Governors is composed of representatives from 35 members of the IAEA, referred to as Governors. Ten members are designated directly by the outgoing Board of Governors. The new members designated by the Board of Governors are the ten members most advanced in atomic energy technology. It also designates, in addition to these ten, additional members most advanced in atomic energy technology representing geographic areas which the original ten do not represent. Geographic areas the IAEA categorizes are North America, Latin America, Western Europe, Eastern Europe, the Middle East and South Asia, South East Asia and the Pacific, and the Far East. The General Conference also elects twenty members of the Board according to a geographically representative formula. These twenty members include at all times, five members from Latin America, four from Western Europe, three from Eastern Europe, four from Africa, two from the Middle East and South Asia, one from South East Asia and the Pacific, and one from the Far East. Additionally, the General Conference elects one further member from either the Middle East and South Asia, and one from either Africa, the Middle East 29 Article V of the Statute of the IAEA, available at https://www.iaea.org/about/statute#a1‐5 30 Article XII of the Rules and Procedures of the Board of Governors, available at https://www.iaea.org/about/policy/board/rules‐and‐procedures‐of‐the‐board‐of‐governors#item6
and South Asia, or South East Asia and the Pacific. The Board of Governors is presided over by the Chairman of the Board and two Vice‐Chairmen, elected from among the representatives to the Board of Governors at the first meeting at the end of each regular session of the General Conference, and holding office until the election of their successors. Financial Autonomy The IAEA’s Agency Budget Updates identify three sources of income for the IAEA: assessed contributions of member states, reimbursable work for others, and interest and miscellaneous income. Of these categories, assessed contributions of member states make up contributions for external sources, while reimbursable work for others and interest and miscellaneous income are grouped together as independently generated income. Article XIV of the IAEA Statute and the document Financial Regulations of the Agency lay down the institutional groundwork for establishing the IAEA’s budgetary protocols. According to the Statute, the Board of Governors annually submits budget estimates for the expenses of the IAEA to the General Conference, which in turn, approves or rejects the budget proposal. According to Article XIV, the primary source of funds for the IAEA’s expenses stem from member state contributions. The Board of Governors is responsible for apportioning the administrative expenses of the IAEA among member states according to the scale determined by the General Conference, which in turn is guided by the general UN principles of assessing member state contributions to the regular budget of the UN. Article XIV defines the definition for reimbursable work for others as the establishment of a “scale of charges” that is designed to produce revenue for the IAEA adequate to meet the expenses and costs incurred “in connection with any materials, facilities, plant, and equipment acquired or established by the Agency [IAEA] in carrying out its authorized functions, and the costs of materials, services,
equipment, and facilities provided by it under agreements with one or more members.”31 The proceeds of these charges are placed in a separate fund, from which The Board of Governors has the power to access for any excess expenses they deem necessary, with the approval of the General Conference.32 Interest income, similar to that of the OPCW, is income derived from interest accrued from any assets the IAEA holds, while miscellaneous income is considered any type of income that does not fit into any of the previously mentioned definitions. 2000‐2010 The compilation of the IAEA’s budgetary sources of income from the period of 2000 to 2010 are presented in Table 3. As Figure 3 shows, the IAEA’s overall budgetary income has steadily and consistently increased annually in the relevant time period, beginning with 224,847,000 dollars in 2000, and ending with 318,389,000 dollars in 2010. However, data also show that although the general trend in overall levels budgetary income is fairly constant, the composition of budgetary income varies. 31 Article XIV of the Statute of the IAEA, available at https://www.iaea.org/about/statute#a1‐14 32 Article XIV of the Statute of the IAEA, available at https://www.iaea.org/about/statute#a1‐14
