Budget Debates Arise Again At WIPO; Development Fears Run High

By William New
The World Intellectual Property Organization could be considered a financial stalwart of the United Nations system, self-funding and usually running large positive balances. But recent years have seen the rise in influence of developing countries at WIPO, and this week those countries are calling on the organisation’s new leadership to ensure their concerns are adequately addressed in its proposed programme and budget.

WIPO’s efforts to rework its programme and budget in the past two months “have not been able to allay the wide-ranging and persistent fears that developing countries have had about the direction in which this organisation is headed under the new management,” the Indian delegation told the opening plenary meeting of the WIPO Program and Budget Committee. The committee is meeting on 10-11 December, followed by an exceptional General Assembly to approve the new plan.

Since new Director General Francis Gurry took office on 1 October, the WIPO secretariat held informal consultations and presented revised documents based on these informal consultations. The budget in question is for 2008-2009; a new budget for 2010-2011 will be approved at the annual General Assemblies next September. At last September’s assemblies, members postponed addressing the budget until now in anticipation of a new administration taking office.

In its new plan, the secretariat has proposed the expansion of four existing strategic goals for 2008-2009 into nine. The nine new proposed areas are: balanced evolution of the international normative framework for IP; provision of premier global IP services; facilitating the use of IP for sustainable development; coordination and development of global IP infrastructure; [becoming the] world reference source for IP information and analysis; international cooperation on building respect for IP; addressing IP in relation to global policy issues; a responsive communications interface between WIPO, its member states and all stakeholders; and an efficient administrative and financial support structure to enable WIPO to deliver its programmes.

The first three and the last one mirror the existing four goals, according to the secretariat.

Last year, WIPO members approved a Development Agenda intended by its proponents to fundamentally change operations at WIPO toward a stronger UN-style development focus. Looking at this proposed programme and budget, developing countries are not assured of the fundamental cross-cutting change they are seeking, according to officials.

Furthermore, looking at the budget, they are concerned that funding for development-related activities is insufficient, possibly even less than before.

A number of governments cited a new analysis from the South Centre – an intergovernmental think tank for developing countries – that showed the new proposed budget provides significantly less funding for development-related activities than the existing budget, which was previously approved by member states.

The WIPO Committee on Development and Intellectual Property (CDIP) approved 5 Development Agenda items seen as requiring funding of some CHF8 million to implement, and developing countries fear that funding has not been amply provided. Additionally, they are watchful of possible cuts to funding for the WIPO Academy, which provides capacity building training. In sum, developing countries are seeking clarification, which may well come during the course of the two-day meeting.

The secretariat has circulated a document showing a different calculation: an increase of roughly CHF6 million for development activities. But developing countries take issue with the calculation, which includes, for example, funds for the goal of “respect for IP,” which they interpret as enforcement-related activities.

Developing countries typically view enforcement warily, as the vast majority of IP rights are held in developed countries. At WIPO, despite its mission to protect IP rights, enforcement issues are not allowed to be negotiated in policy bodies.

The African Group, represented by Algeria, also raised concerns about the ability to measure the spending on development-related activities in the secretariat budget. The group said the “respect for IP” element has to take into account the balance of rights and the public interest. It further suggested that WIPO’s sizeable reserves, being eyed by the secretariat for building a state-of-the-art conference centre, could also be used for development-related aspects, such as a donor conference. Finally, it said substantive changes to the organisation could wait until the next biennial budget rather than being pushed through now.

Separately, the secretariat also proposed to create an “observatory” group to track any impact on WIPO’s revenue sources from the global financial situation. WIPO is largely dependent on user fees from its treaties, especially patents.

At the outset of the committee meeting, France was named chair, Egypt and Singapore as vice-chairs.

WIPO Audit Shows Areas for Improvement

Generally speaking, it appears WIPO is being given a relatively clean report from its independent auditing bodies, such as the report of its auditor. In a report of the 2006-2007 biennium, the Swiss federal auditor found only that the reimbursement to WIPO of taxes paid to the United States government in the amount of CHF1.9 million Swiss francs between 2004 and 2007 had not been repaid and would have to be recorded as a “doubtful debt” if not repaid by the next biennium. It is unclear whether this has been repaid since then, but the 2006-2007 financial management report on arrears in contributions showed the United States owing the most, some CHF1.14 million Swiss francs, equivalent to 17.6 percent of total arrears for the period.

But the report (WO/AC/11/2) from the 1-4 December WIPO Audit Committee conveyed a number of areas needing more work. It questioned the planning methodology, and said no provision had been made to undertake management audits in 2009. It also said: lead responsibility for an ethics system at WIPO has not been assigned; no progress report on an internal control system was produced by the secretariat; and an internal control gap assessment study was not begun.

It particularly “noted with great concern the serious IT security-related shortcomings” identified by the Internal Audit and Oversight Division, and said the committee “could not understand why timely action had not previously been undertaken by the secretariat.” The committee further could not review the status of implementation of oversight recommendations as it received the report late.

The Audit Committee also reviewed progress on the large-scale construction project at the headquarters, and was told the new office building is still on track for completion in October 2010.

The committee also commented on the secretariat’s programme performance report, which it said has limited usefulness for stakeholders wishing to ensure the organisation’s resources are used effectively.

The next Audit Committee meeting is planned for March.

William New may be reached at wnew@ip-watch.ch.