Global Policy Forum

By Jeffrey Laurenti

One of the major institutional issues regarding a prospective international criminal court unresolved as the final round of treaty negotiations opens in Rome is its financing. Proponents agree that, whatever may be its breadth of jurisdiction and procedures for launching investigations and prosecutions, an international court must have reliable revenues if it is to function effectively--a point equally understood by those leery of the proposed tribunal. No international funding scheme dependent on sovereign states can be assured of total reliability. Still, some alternatives may, on balance, offer better promise than others.

While there are high hopes for securing supplementary funding for the court through voluntary contributions, assessments on states will inevitably provide the court's essential support. The financing debate has revolved around two contrasting models about responsibility for funding: the states parties to the convention, or all member states of the United Nations. There are a number of creative variations suggested for the court's financing mechanism, but in the end they all reflect choices between these two poles--the options bracketed in Article 104 of the Draft Statute for the International Criminal Court.

This is not simply a choice between a broad and a comparatively narrow funding base. Funding responsibility also entails financial accountability and budgetary control. Ultimately, preferences between the two models will depend on a mix of policy principles and pragmatic assessment of realities. This memorandum offers an analytical context for policymakers.

The United Nations context

The far-flung United Nations system provides a number of models of both universal and states-parties financing. The likely costs of an international criminal tribunal have been pegged roughly in the range of $10 million annually for base costs, even when the court is "at rest" and not actively engaged in major investigations or prosecutions. Taking on a major "situation" could boost the court's resource requirements by $60 to $80 million a year. U.N. member states this year are paying just over $100 million for the ad hoc tribunals established for the former Yugoslavia and Rwanda, assessed by the General Assembly separately from the U.N. regular budget.

Budget-making and financial accountability in the United Nations. The United Nations has developed an elaborate system of financial oversight by and accountability to the member states. Spending plans and personnel requirements are worked up by the agencies concerned and submitted by the Secretary-General to the General Assembly1. They are first scrutinized by an Advisory Committee on Administrative and Budgetary Questions (ACABQ), a panel of 18 individual "experts" elected by the General Assembly that passes its recommendations along to the Fifth Committee of the General Assembly.

ACABQ members are only notionally independent of their governments; the body's real strength lies in its small size, which allows it to give intensive scrutiny to budgetary issues. It played a crucial role in paring back initial funding requests for the newly established tribunals in 1994 and 1995, and it is acutely conscious of the budgetary pressures from various states and regions, and from publics beyond, on the limited resources provided through the United Nations. The ACABQ has considerable influence in the budget process as it seeks to accommodate competing fiscal priorities. Technically, however, the ACABQ is only an advisory and not a decision- making body: The vast majority of member states are unwilling formally to delegate to a representative group such political power to act in their name2.

All member states have a seat on the Fifth Committee; roughly half normally participate in its meetings. Under budgetary procedures adopted in 1987--in response to objections from the United States and other larger contributors that the countries supplying nearly all the resources were frequently outvoted by those paying next to nothing-- consensus is the governing rule in decision-making. In theory, this makes any budgetary item a potential hostage to an individual state or group of states seeking other items or goals in the process; the threat to enter objection to an item and demand a vote will occasionally disrupt the Fifth Committee's soporific proceedings. Western-led efforts to increase resources for the U.N.'s human rights programs, for instance, are routinely checked by the opposition of other states suspicious that increased human rights activities can only have mischievously destabilizing results.

While not formally part of U.N. budget-making rules, a cap has effectively been placed on U.N. regular budgets, largely at American insistence. The Reagan administration had sought, and finally wrested from a perhaps reluctant General Assembly, approval of a "zero-real-growth" discipline on regular budgets. The Clinton administration, in alliance with congressional leaders, has set a more arduous target of zero nominal growth, effectively requiring that inflation costs each year be paid by reductions in U.N. programs. Other member states have assented to this tightened regimen in each of the past two fiscal years.

U.N. operations are subject to close scrutiny by the Office of Internal Oversight Services (OIOS), an office inspired by the vigorously independent inspectors-general of the U.S. federal civil service and established at the United Nations after American prodding. OIOS both audits accounts and assesses performance. Its inquiry into the Rwanda war crimes tribunal uncovered considerable waste, improper contracting, administrative bungling, and a major hemorrhaging of resources. OIOS does not currently have authority to monitor international agencies other than those financially accountable to the General Assembly.

Along with OIOS scrutiny, however, come the U.N.'s administrative apparatus and the political direction of its overseers--decidedly a mixed blessing. U.N. administrative regulations properly give emphasis to a representative geographical distribution in the hiring of staff, occasioning in some quarters some of the same complaints often echoed in national debates (about "reserved posts" for scheduled castes in some countries or "affirmative action" for disadvantaged minorities in others). Some administrators, moreover, express exasperation at bureaucratic regulations they find stifling. Yet there can be political difficulties in trying to work around the system.

Even though the ad hoc tribunals on ex-Yugoslavia and Rwanda are outside the regular budget cap3, their spending has been kept on a tight leash by vigilant budget hawks on the ACABQ and Fifth Committee. States warmly supportive of the tribunals have sought to strengthen its staff beyond the levels agreed in the U.N. budget process by providing (in U.N. parlance, "seconding") their own officials to the tribunals' service. It has been, almost inevitably, mostly the wealthy Western governments that have seconded expert staff, and the General Assembly--far from grateful for the additional staff-- adopted a resolution strictly limiting the use of such seconded personnel4.

Payment of assessments. After the Fifth Committee and then the General Assembly give final approval of a spending plan, member states are billed for their share of the costs in accordance with an assessment scale voted by the General Assembly. The assessment scale for the U.N. regular budget is based on each member state's share of world income, modified by discounts supposedly reflecting constraints on ability to pay (e.g., low per-capita incomes) or concerns about undue dependence on the largest contributors (on whom there has been a ceiling, lowered in stages over the U.N.'s first quarter century to 25 percent, in accordance with a 1946 agreement). There is a separate scale for U.N. peace operations5.

Doubts about the reliability of the U.N. assessment system have grown widespread as the United States has become famously delinquent in payment of its assessed contributions. The Americans had run up a substantial delinquency to the U.N. regular budget in 1986-88 as part of a campaign to win approval of new budgetary procedures, subsequently paying down only a fraction of that arrearage. It then was slow to appropriate funds for skyrocketing peacekeeping costs, particularly large in the case of the former Yugoslavia--and in 1995-6 allowed delinquencies nearly to triple. In 1998 total U.S. arrears on assessments voted by the U.N. General Assembly amount to over $1.3 billion.

However, the U.N. Charter does provide a penalty for nonpayment: forfeiture of vote in the General Assembly when arrears exceed two full years of assessments. Prescribed by Article 19 of the Charter, vote forfeiture seems likely to hit the United States in early 1999. How the loss of its vote will affect the domestic U.S. political debate on meeting U.N. obligations cannot be predicted with confidence. However, if the United States decides it wants to stay in, it will have no choice but to make full payment of all new assessments without conditions and without delays.

Other international bodies. Nearly all the specialized agencies of the U.N. system apportion assessments in accordance with the U.N. regular scale. Many of them have constitutional provisions to encourage payment akin to Article 19; the prospect of vote forfeiture prompted a reluctant U.S. administration to resume full and unconditional payments to the Food and Agriculture Organization in 1991 after it had withheld its dues in an effort to force "reform" on the agency.

There are international agencies--often either technical or economic in their focus--that operate under different assessment scales, such as the Universal Postal Union. Sometimes their financing mechanisms are in part based on member states' relative share of international activity in the agency's area of competence. Sometimes they are simply arbitrary shares set by governments in a process of political bargaining.

A number of international treaty regimes are financed by assessments on the states parties only. These have been of spotty reliability. Funding (or the lack of it) for scattered small units and agencies gets little press attention or political visibility. When an issue disappears from the headlines, interest in paying for it sometimes wanes. The United States has moved toward abandonment of a number of small trade bodies--and even withdrawn from a mid-sized U.N. economic agency--without a ripple of protest or even public awareness. And ultimately there is no Article 19 provision to back up payment with the prospect of a penalty.

The experience of two human rights treaty secretariats suggests that states parties' funding mechanisms can be unreliable in producing payments even from states that have joined the treaty regime. Both the conventions against torture and against racial discrimination provided for funding by assessments on states parties; over time, both treaty secretariats were paralyzed when many of their states parties simply skipped payments. Both ultimately had to ask the General Assembly to include them in the U.N. regular budget.

Policy principles relevant to ICC funding

Understanding the realities of financing in the United Nations system helps illuminate the options available to the drafters of the statue of the international criminal court. In the end, policy choices will reflect a mix of policy principles and pragmatic considerations, even if decision-makers differ in their relative weighting of values and expediency.

One of the policy principles arguably at stake is the universality of the prospective court's mission. The existing International Court of Justice is funded through the U.N.'s regular budget (at roughly $10 million a year, and without fuss), even though most member states do not accept its compulsory jurisdiction, while those that do accept its jurisdiction assume neither greater financial responsibility nor greater budgetary control. The Court's universal funding arguably underscores its character as an institution of all humankind, even if reality is somewhat less poetic. A criminal court financed only by self-selected states parties would, in the eyes of some, have less legitimacy in approaching cases in many parts of the world.

A contrasting policy principle holds that those that those that are part of the system and undertake its obligations should bear both the burden and power of financial responsibility, while those that prefer to sit out the regime should not be expected to help pay for it.

A third policy principle touches on core values of public finance: Whatever the group of contributors, what should be the basis for allocating of financial responsibility among them? The United Nations system is unusual among international organizations in answering that question forthrightly as "capacity to pay"--i.e., national income, albeit weighted for politically determined mitigating factors. Many others, from the World Bank to the International Telecommunications Union, set their rates on a more arbitrary basis of political bargaining. Most of the world community seems clearly to endorse the principle of capacity to pay, and (even if applied only to states parties) the U.N. scale is the bracketed option in Article 106 of the draft statute that apparently has the widest support. The other bracketed option--"a multi-unit class system," as proposed by the United States--appears less to reflect a broad policy principle than the current allergy in Washington to paying for international organizations' activities in accordance with America's share of world income.

A fourth policy principle relates to the value that people attach to the integration of the United Nations system--a values question that will be even more important in the debate over the court's jurisdiction in the face of state objections. Some have noted a seeming anomaly in the position of some court advocates that the tribunal both be fiscally and administratively independent of the United Nations and yet subject to direction from the U.N. Security Council. If the tribunal is activated or constrained by U.N. political organs (the Security Council or, imaginably, the General Assembly), some argue that it concomitantly needs to be integrated administratively.

Pragmatic considerations

So much for policy principles. Far more hotly argued are the pragmatic considerations. These include:

1. Effect on ratifications. Will states be deterred from ratifying the convention if it imposes not only legal obligations but also financial costs? Many advocates of funding through the U.N. regular budget argue persuasively that poorer countries will be reluctant to join the convention if ratification also imposes financial costs they could otherwise avoid. But the argument applies equally to wealthier countries. If, as some of its influential legislators have suggested, the United States does not ratify the convention during their natural lifetimes, the costs of supporting an active court on a narrow fiscal base might deter many developed countries from ratification as well6.

2. Winning adequate budgets. A major concern expressed in some quarters is that financing the court through General Assembly assessments, and particularly through the U.N. regular budget, will inevitably result in an underfinanced institution. The current "zero real growth" cap on the U.N. regular budget will each year reduce real resources for everything funded through it. In the U.N. competition for fiscal survival, the court is not likely to be funded as adequately as its proponents believe necessary. Financing the court through assessments on states parties would free the court from the asphyxiating constraints of annual U.N. resource reductions.

The spending cap is, of course, a politically convenient policy of the moment, not a fundamental budgetary principle enshrined in U.N. procedures or the Charter. Member states could agree to a one-shot modification of the cap to build into the regular budget the roughly $10 million core cost of maintaining the tribunal. They could decide the cap has outlived its usefulness, and drop it altogether. Or, without touching the cap, they could even reduce spending on other programs in order to make room for the court's core costs.

The regular budget could not, however, absorb the cost of major investigations. For these, special assessments would presumably be necessary and--like those for the current ad hoc tribunals--would not be subject to the budget cap.

A states-parties approach could dispense with all the clap-trap about living within the cap, and allow the truly committed states to fund the tribunal as adequately as they believe is necessary. Even here, however, there is a catch. The U.S. administration had agreed to support a congressional initiative to subject all U.S. assessed contributions to international organizations to a fixed ceiling of $900 million. A tribunal that administratively stands alone might escape the U.N. budget cap, but the presumably substantial American contribution would not escape a U.S. budgetary ceiling. If the tribunal is subject to domestic budget constraints on American payments to international organizations, the presumed advantage to a stand-alone tribunal disappears.

3. Political control of the budget. A related concern of some court proponents arises from the political oversight mechanisms of the U.N. General Assembly, which they fear may allow states unsympathetic to particular investigations--or to the court's intrusiveness in general--to emasculate it with the budgetary scalpel. Human rights advocates are sensitive to this objection, having been thwarted on occasion in budgetary battles in the Fifth Committee by governments not known for tenderness to human rights causes. This worry may, to be sure, be somewhat overstated, assuming the court does not become, in U.S. ambassador Bill Richardson's words, "a human rights ombudsman"; after all, the coalition of rights "abusers" in the General Assembly has not sought to interfere with the tribunals investigating genocide and war crimes in Rwanda and Yugoslavia.

Still, the concern is not unfounded. Indeed, the real issue is not so much one of malevolent regimes' trying to undermine the cause of justice as it is one of U.N. budgetary politics generally. Many developing countries feel they need every bargaining chip available in their effort to get attention to their budgetary agenda from often indifferent wealthy states--and funding for the tribunal, with its strong constituency in Western human-rights groups, may at times seem like a good target. At the very least, there will be strong pressures to subject the staffing request for the tribunal to the same skeptical eye that Western budget-watchers train on parts of the U.N. budget that deal with development. Even with the two ad hoc tribunals, the ACABQ and the Fifth Committee subjected the prosecutor's requests for staff to severe scrutiny, and took deep satisfaction in winning economies on behalf of their countries' hard-pressed taxpayers.

A tribunal autonomously funded by states parties would presumably avoid being drawn into the broader political battles that define U.N. budget-making.

4. Financial accountability. While an autonomously funded tribunal could circumvent some of the North-South budget angst, it might arguably be less accountable to the ultimate taxpayers. Whatever the political headaches in dealing with the ACABQ and the Fifth Committee, delegates in New York do develop expertise in fiscal oversight. An assembly of states parties that meets once a year may not want to devote much of its limited meeting time to careful fiscal review (though a committee devoted to budget and finance might be expected to meet more frequently). The draft statute does allow the assembly to establish "an independent oversight mechanism for inspection, evaluation, and investigation," but this would presumably not have the same experience and expertise as OIOS.

5. Payment of assessments. The core question for reliable funding, of course, is whether assessments are any more likely to be paid under one option or the other. On the one hand, it may be expected that states committed enough to ratify the convention will sustain their commitment through prompt and full payment of their assessments over time; this is an argument for assessments on states parties. On the other hand, the United Nations in New York draws the spotlight of sustained political, public, and press attention that other international organizations simply cannot muster.

This is, like so much else in this discussion, not so much a U.N. problem as a U.S. problem, so it may be appropriate to discuss it directly in American terms. There has been little attention in the United States to the existence, much less impact, of American funding delinquencies at the World Health Organization or the Food and Agriculture Organization or the Organization of American States, even though all of these have been hit over time by U.S. nonpayment. Also not widely appreciated is the fact that the U.S. has resumed virtually full funding of each year's U.N. regular budget obligations (though not paid off past arrears); where it has been running up huge new debts is in the peacekeeping accounts. Moreover, as the United States approaches the Article 19 brink, the bracing reality that its vote is at stake may compel full and unconditional payment, at least until the arrears problem is resolved7. Even if the court statute does finally contain the bracketed Paragraph 6 of Article 102, providing a functional equivalent of the U.N. Charter's Article 19, it would take over (two) (three) (five) years of American delinquencies before it would be applied--which could effectively paralyze the new tribunal. And, as the U.S. government's casual 1985 withdrawal from the compulsory jurisdiction of the International Court of Justice suggests, it would be far easier for a state to withdraw from the convention establishing the international criminal court than from the United Nations.

Conclusion

There is no silver bullet that can guarantee reliable financing for the tribunal. Perhaps the likeliest avenue for government financing is one typical of democratic politics at every level--a compromise that involves elements of all approaches: U.N. regular budget financing of the core costs of the court "at rest"; special assessments voted by the U.N. General Assembly to cover costs of investigations and prosecutions of "situations," at least those referred by U.N. organs; and perhaps supplementary assessments on states parties for purposes the assembly or bureau of states parties may specify--including whatever running room the prosecutor may be given, either from the start or down the road, to initiate investigations on his or her own authority.

It is quite possible that assessed contributions--whether drawn from all member states or from states parties only, whether part of the U.N. regular budget or levied by separate special assessment like peacekeeping--will be inadequate under any plan. This makes the possible role of voluntary contributions, as envisioned by Article 105 of the draft statute, an option for supplementary funding of continuing importance.

1 The U.N. Department of Administration and Management is responsible for preparing the overall spending plan the Secretary-General presents to the General Assembly, and in doing so will usually revise (downward) the budget requests of most U.N. units. The Office of Internal Oversight Services is exceptional in having the explicit guarantee, in the resolution that established it , that the Secretary-General would communicate its budget requests without alteration. The Administration and Management secretariat has worked in a generally cooperative spirit with the two ad hoc war crimes tribunals on the budget figures that would be submitted as requests to the General Assembly.

2 Seats on the ACABQ are allocated akong regional groups in rough proportion to the groups' share of overall membership. For most regions, there is a decided tendency to elect countries that are among its leading contributors. Americans have continuously won election to the ACABQ since the committee's creation in 1946--until a surprise defeat in 1996, widely attributed to the resentment of its partners at mounting U.S. dues delinquency. U.S. legislators have proposed making payment of current U.S. arrears contingent (among numerous other conditions) on creation of a permanent American seat on the ACABQ. The United States is offering a candidate in 1998 for one of two Western seats up for election this year, in competition with Britain, Germany, and Italy.

3 Both of the tribunals are funded by a special assessment that, in a characteristic U.N. compromise, resolved a dispute over which of the U.N.'s two assessment scales should be used by applying both of them. Half of the costs are apportioned on the U.N.'s regular assessment scale, and half on its peacekeeping assessment scale. See below.

4 The General Assembly's decision to restrict secondment reflected neither simple ingratitude nor spite against the tribunals, but was driven by a larger and perhaps idealized concern about what the United Nations civil service should be. Disproportionate reliance on seconded personnel, advocates of restrictions argue, tilts the system toward the wealthy countries and circumvents the equitable geographical distribution that should give the system a genuinely representative character. Moreover, they assert, when salaries are paid by home governments, the loyalties of the deputed personnel will inevitably lie with the policy interests of their own governments, to which they will soon return. Some developing country representatives calculate they must be as hard-line on secondment as Western governments are on zero-growth budgets. Indeed, they often link the secondment issue directly to the budget caps, arguing that the U.N.'s growing hunger for seconded personnel is the consequence of the long-term freeze on the regular assessed budget.

5 The peacekeeping scale grants all countries now or once considered "developing" a deep discount off their regular assessment rate. It reallocates the difference to the five permanent members of the Security Council, reflecting their imagined "special responsibility" for maintaining international peace and security that attaches to their veto power (or, in the view of critics, their stranglehold) over U.N. security decisions. The consequence is that a country like France in 1998 pays 6.49 percent of assessments for the regular budget and 7.93 percent of peacekeeping costs, while India pays respectively at rates of 0.31 and 0.061 percent. The United States is assessed at the 25 percent ceiling on the regular scale and 30.52 percent for peacekeeping.

In a test of wills, the United States since 1995 has refused to honor peacekeeping assessments over a 25 percent share. It is also pressing for a reduction in its regular assessment to 22 percent in 1999 and to 20 percent in 2000, if a provision now passed by the Congress--to which the administration agreed last year-- is enacted. (The subsequent addition of new congressional conditions dealing with family planning and abortion has put in doubt the administration's support for the legislation.) Some imagine that a confrontational Congress might legislate unilaterally a refusal to pay regular assessments over 20 percent. One consequence of the existing stalemate on the peacekeeping scale is that the United States--perhaps the most enthusiastic backer of the Yugoslav and Rwandan war crimes tribunals--in 1998 is paying just $27 million of its $30 million special assessment for them.

6 Assume the court is conducting one or two major investigations and is running costs of $100 million (roughly what the two ad hoc tribunals cost today). Assume also that the Japanese Diet has to make a decision on ratifying the court convention with all the European Union countries in, the United States out, and a quarter of all remaining countries having opted to join. If Japan ratifies, it will have to pay roughly $34 million a year (based on its 20 percent share of the U.N. regular budget in 2000). Tokyo's decision would have repercussions elsewhere: If it joins, Germany (9.5 percent on the U.N. scale) would pay roughly $16 million of the hypothetical cost, and Italy (5.4 percent) $9 million. If Japan stays out, these two countries' costs would rise to $26 million and $14 million respectively. The ripple effect to poorer countries may prove even more daunting. For the same three mentioned countries, the shares of such a court cost if financed through a General Assembly assessment on the regular U.N. budget scale would be $20 million, $9.5 million, and $5.4 million respectively. Through a U.N. assessment the United States, of course, would be paying $25 million.

7 It could also, of course, lead to a wider rupture.