Header ad
The Independent Voice of the Commodity Industry
ICO DECIDES NOT TO EXCLUDE MEMBERS WHO ARE PERSISTENTLY IN ARREARS

ICO DECIDES NOT TO EXCLUDE MEMBERS WHO ARE PERSISTENTLY IN ARREARS



After much debate, the International Coffee Organization has decided not to exclude members in persistent arrears from its work.

Earlier this year, the Chair of the Finance and Administration Committee at the International Coffee Organization (ICO) introduced a draft resolution on exclusion of members in persistent arrears.

The ICO said the committee had deliberated the draft resolution at great length, due to the fact that arrears had been building up over time and now threaten the orderly execution of the administrative budget of the organization.

The purpose of the resolution was to establish an automatic procedure to exclude members in persistent arrears, under the provisions of Article 46 ‘Exclusion’ of the ICA 2007, without the need to refer the matter to the council.

The draft resolution provided that members in arrears for more than a certain number of years at the beginning of each coffee year would receive a communication from the secretariat stating that they had been classified as being in persistent arrears.

Any member in persistent arrears that had not regularized its financial situation with the organization by 31 May of the same coffee year – either by payment in full of outstanding contributions or by means of a repayment plan through a resolution approved by council during its first regular session in the coffee year – would then be notified of its exclusion. As provided for in Article 46 of the ICA 2007, the ICO would then notify the depositary of the decision to exclude, which would become effective 90 days later.

The Finance and Administration Committee stressed that exclusion should be a last resort and that the Secretariat should make strenuous efforts to provide support to such members, in order to enable them to pay in full their contributions or to help them draw up a repayment plan for submission to the Finance and Administration Committee.

All members of the Finance and Administration Committee agreed on the need for the resolution and also that the threshold of persistent arrears should be three years.

For the 2018/19 coffee year, this would affect seven members with arrears from 2014/15 and previous years: Angola, Central African Republic, Liberia, Malawi, Yemen, Zambia and Zimbabwe.

The representative of Angola subsequently informed the council that his government had approved the payment of its arrears.

While some members in the council voiced their support for the resolution and considered it innovative and regrettably necessary in such exceptional circumstances of budgetary constraint, the consensus was that members should not be automatically excluded and that the organization should take a more measured approach.

The problem of persistent arrears is a sensitive matter for all parties concerned and members were not always able to fulfil their financial obligations to the organization for reasons of force majeure. While some members wished to explore suspension as a less harsh sanction, there was no provision for such a measure in the ICA 2007.

A significant number of members felt that exclusion was not a practice applied in the multilateral context and would set an uncomfortable precedent that could lead to the permanent exclusion of some members because of the protracted processes required at national level to rejoin the organization.

These members also felt that greater consideration should be given to the particular economic, political and social circumstances of why a member was in persistent arrears. Instead of exclusion, agreement on a repayment plan with a member was considered a more positive and inclusive approach to encourage continued participation and reflect the spirit of international cooperation.

A revised resolution could form part of a negotiation package with members in arrears, with the purpose of avoiding a punitive approach and instead signalling a clear willingness to work in partnership to find a solution. One member confirmed that their government had been in arrears in the past and had worked positively with the ICO Secretariat to establish a repayment plan.

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *