Members Concerned Over WIPO 2014/2015 Programme, Budget; New Treaties On The Way

The World Intellectual Property Organization’s proposed programme and budget for the next biennium faced some fairly tough questioning from the UN agency’s member states last week. Meanwhile, WIPO is anticipating a series of treaty negotiations in the next two years.

The 20th WIPO Program and Budget Committee (PBC) met from 8-12 July. Documents from the meeting are available here.

The draft chair’s summary from late on the last night is available here [pdf]. Only a few small changes were made to this text before final approval.

Many items were advanced during the week but left to finalise at the next PBC meeting from 9-13 September, at which a revised programme and budget will be discussed. Work on the 2014-2015 programme and budget must be completed in time for the annual WIPO General Assembly, from 23 September to 2 October.

At last week’s PBC meeting, areas of concern among member states were many, including: “surprise” proposed new external WIPO offices in five countries; patchwork mainstreaming of and apparent reduced spending on development; higher staff costs and geographic and gender imbalance; use of financial reserves for seemingly regular expenses; cutting funding for an innovation initiative that failed its performance criteria; building construction projects delayed and over budget; an ongoing effort to improve organisational governance; and an attempt to improve the WIPO training programme known as the WIPO Academy. Another issue that the committee was incapable of moving forward is a broad question of governance of WIPO. The same placeholder language from the last PBC meeting was kept.

Normative issues were also sensitive, as WIPO Director General Francis Gurry said the agency anticipates possible treaties in about four areas, including: copyright for broadcasters; an update to design law; and a revision of the Lisbon Agreement on the International Registration of Appellations of Origin. It also includes an instrument or instruments on the protection of traditional knowledge, traditional cultural expressions (folklore), and genetic resources. In addition, it will make a priority of carrying forward the newly completed treaty on copyright exceptions and limitations for the blind and other print-disabled.

Missing from the treaty list, however, is work on copyright limitations and exceptions, such as for libraries, archives and research institutions. This is more likely seen as maturing for high-level treaty negotiations in the next biennium, 2016-2017. [Update: a developing country source said that it was considered that the section of the programme and budget on copyright (Program 3) was in need of updating before approval and will be revised.]

In the proposal for 2014-2015, Gurry painted a somber picture of the global economy, and established a framework for prudent spending. But he gave the positive news that the proposed budget envisions and increase in income. WIPO is planning for income and spending of roughly CHF 700 million Swiss francs, essentially breaking even, but preserving the organisation’s target minimum reserve funds of CHF 120 million.

WIPO generates most of its income from fees paid by users of the intellectual property systems it manages, such as the Patent Cooperation Treaty (PCT). Less than 10 percent comes from governments (and assessments on governments are not proposed to rise in the next biennium).

Income in the current biennium (which ends on 31 December 2013) was originally projected to be CHF 647 million Swiss francs, but is now foreseen as closer to CHF 683 million Swiss francs.

The secretariat proposed to spend most of the CHF 20 million in excess reserve funds above the minimum CHF 120 million, on activities such as a new central air conditioning system and some information technology upgrades.

WIPO also put forward a cleaner presentation of 36 organisational expected results compared to the 60 results in 2012-2013 (though this led to numerous explanations of where old priorities went).

Development, Innovation, Global Issues, Construction, New WIPO Academy

Development
The meeting covered an enormous range of projects and activities. On the critical issue of development, developing countries once again found themselves fighting to ensure that full funding is provided for these activities throughout the budget. A statement in the chair’s summary requests the secretariat to ensure Development Agenda projects will be fully funded. All but three of the first 16 projects are coming to a close, and it appeared unclear if funding would be in place for any new ones agreed to by the Committee on Development and IP. There also is an issue related to how WIPO counts spending toward development, to be continued in September.

“We had many programmes that had expanded budgets without information on why they were expanded, but we saw Program 8 [on the Development Agenda] very weakened,” a developing country delegate said afterward. “The way they are applying the mainstreaming [of the Development Agenda into the full organisation’s work] is problematic.”

Innovation
Other issues of importance included debates over work of WIPO on innovation and small and medium-sized enterprises (SMEs), which failed most of its performance measures and is in line for trimming. The innovation work is led by officials within WIPO from the United States, and the US delegation argued for its continued full funding to give it more time to demonstrate its effectiveness. Members discussed the issue at length and the secretariat will “provide additional information and a revised proposal, taking into account the alternatives proposed and comments arising from the discussion,” as stated in the chair’s summary.

Global Issues
On the work at WIPO referred to as Global Issues – essentially tying IP rights to bigger global issues such as food security, climate change, and public health – some developing countries demanded more information about the secretive programme. They also want it tied to a committee where members can have more say in its work and give it more transparency. The Global Issues initiative is led by developed country biotechnology and pharmaceutical industry operatives, providing their expertise.

Group B developed countries said they do not want global issues tied to a committee. Brazil countered that it is not possible to have a substantive discussion on global issues in the packed Program and Budget Committee. It was suggested that the secretariat provide a short written report on global issues.

One part of the programme that WIPO has been promoting actively is WIPO Re:Search, which encourages licensing of patented health compounds, technologies and know-how for neglected diseases.

Construction
Separately, WIPO’s construction of the new building is expected to drag on into 2014, after the crisis over the past two years that led to WIPO taking on the oversight of the project from the general contractor.

In addition, the new WIPO conference hall project also was affected by the problem with the general contractor and will now be delayed almost a year, from the original expected completion date of April 2013 to February 2014. The conference hall project appears to be within budget, according to the performance indicators for the current biennium.

WIPO Academy or Training Center
In another development, WIPO proposed to transform the WIPO Academy, where it does training in IP, into the WIPO Training Center, after consulting an outside expert, Dr. Carolyn Deere of the Oxford University Global Economic Governance Programme. WIPO would concentrate its focus on human capacity building, working closely with regional bureaus and with the programme for small and medium-sized enterprises. The intention of focussing on WIPO’s primary competitive advantages is to steer away from competing with universities or other institutes toward what it does best, and at the same time reduce duplication and improve coordination and coherence. It also would change the use of the word academy, which has become a common term worldwide, to the “training center.”

Members appeared to positively receive the suggestions for improvement, but there was resistance to the notion of a name change.

New WIPO Offices

One of the most heated discussions of the week was over a proposal to set up five new WIPO offices around the world (IPW, WIPO, 9 July 2013).

WIPO told member states that it has received applications from some 20 countries wishing to host external offices and that the secretariat has decided to proceed with five: China, Russia, United States and two in unnamed countries in Africa. The cost would not be very significant by overall budget standards, and would not require an increase in overall staff “headcount,” according to WIPO.

Significant time was spent on this issue, especially as substantial concerns were raised by many European governments and those in Spanish-speaking Latin America and Caribbean, as well as India and others.

There was strong opposition to proceeding with approval of these offices until more information could be had about how they were decided upon, how and what the existing offices (in Tokyo, Singapore and Rio de Janeiro) are doing, and what it all means for the future (both for WIPO’s budget and for other countries that want offices). Numerous countries said the announcement of new offices, made in a WIPO “white paper” at the start of the week, came as a surprise and that the secretariat did not have a clear mandate to do this.

A key point made in the discussions was that these offices are not considered “regional offices” of WIPO but rather are more national in nature, with some regional activity. Also, members did not sufficient information about the process taken to select the five locations, the long-term budgetary impact or procedures for closing offices in the future. In addition, questions were raised about some of the arguments put forward by WIPO, such as suggesting stronger information technology protection from having more offices, when the opposite might also be true. It was also raised that the UN is following a “One UN” policy, trying to put UN offices together around the world wherever possible to pool resources (such as IT security), and that it is not clear how these new offices fit in that philosophy.

WIPO also revealed at the end of the week that it had already signed contracts for the new offices with China and Russia, pending approval by the WIPO Coordination Committee, which meets in September. WIPO acknowledged that the rules for offices is that they are not signed until approved by the Coordination Committee but said that it has been established practice to get them signed when negotiated out of expediency. Germany and others raised this legal point.

Several members proposed that the external offices be removed from this budget so that the committee could approve it. But a final decision will come in September, and possibly with slightly more information from the secretariat. Meanwhile, a longer and deeper analysis of the policy of creating new offices will be conducted over the next year.

Human Resources

Human resources are the biggest part of the organisation budget, and members continued to express reservations about increases in costs despite an ongoing hiring freeze. The proposed plan would increase staff costs by 8.8 percent.

Personnel costs are proposed to increase by CHF 36 million, split between salary and pension-related elements and a potentially controversial expense for “after service” employee benefits such as healthcare. The latter had been questioned in the past, and WIPO is gathering information about practices around the UN. It also will establish a separate bank account to hold funds allocated for long-term employee liabilities.

According to WIPO statistics, every category of worker has grown since Gurry took office. The number of high-level staff has risen dramatically under Gurry, with directors rising from 45 in 2010 (start of the last biennium) to 64 in 2013. Professional staff rose from 414 to 434, and General Service staff from 447 to 515. Total staff, permanent (1,030) and temporary (179) is 1,209, plus over 70 non-staff fellows, short-termers, interns, and so forth.

The secretariat information sheet said there is “no headcount increase” overall, and that 96 new posts being requested are part of 156 approved in principle by member states for converting longstanding temporary staff into permanent posts.

Much of the change is attributed by the secretariat to moving staff who had suffered for long periods on temporary, year-to-year contracts, into permanent staff positions. Member states expressed many reservations about the budgetary impact and future liabilities of bringing staff on-board in such a way. WIPO said that staff costs as a percent of overall costs remained steady during the last biennium, and that worker productivity has gone up significantly.

The issue of geographic and gender balance among staff also was problematic, with little progress shown on the longstanding concern. The secretariat acknowledged the problem once again and this time said it hired an expert on gender issues just prior to the PBC meeting, in order to help bring it into better balance in the next biennium. Women are a majority of overall WIPO staff, but only up to a certain level. All of the four most senior levels at the organisation are dominated by men.

WIPO staff come from some 110 countries, but more than half (51.2%) are from Western Europe, according to WIPO statistics. The other regions are: Asia and the Pacific (13.7%), Africa (11%), Latin America and the Caribbean (8.6%), North America (8%), Eastern and Central Europe and Central Asia (6.2%), and Middle East (1.2%). A limitation in rectifying imbalances, the secretariat said, is that very few people are due to retire soon from WIPO, for instance, only 11 in 2013.