5 Results, influence and control

UN organisations are important for implementing Norway’s foreign and development policy priorities, and we concentrate on organisations and thematic initiatives that are important to our interests and political priorities. The Government wishes to maintain a high level of contributions to the UN system in order to promote the UN’s mandate and support the implementation of tasks that Norway and other countries have assigned to the UN. We follow the performance of UN organisations, and decide on our financial contributions in relation to the results achieved.

Norway will use its position as a major UN donor and partner to strengthen UN organisations through its work on the governing bodies of UN funds, programmes and specialised agencies, and through direct dialogue with the UN system. Our objective is to help UN organisations, individually and collectively, to deliver better results. In recent years, the Government has devoted considerable resources to professionalising Norway’s work on the boards of UN funds and programmes to promote greater acceptance of our policies. This chapter discusses the Government’s approach and its priorities in relation to our participation in governing bodies and organisational funding and assessments.

The way UN organisations’ activities are funded directly influences their effectiveness, and there are advantages and disadvantages to the different forms of support. Norway’s intention is that its contributions to the UN should help to improve results and provide greater predictability, which is necessary to ensure strategic planning and management in UN activities. We will therefore maintain a high general level of core contributions to UN funds and programmes. In addition, we will continue to consider making multi-year indicative commitments to promote long-term planning and implementation by UN organisations.

Textbox 5.1 Norway’s support for UN development and humanitarian activities

In 2009, the overall budget of UN development and humanitarian organisations was approximately NOK 130 billion. This equals five times the total Norwegian aid budget for that year, which was NOK 25.6 billion. Out of the UN organisations’ total budget, 65 % was spent on long-term development work and 35 % went to humanitarian efforts. Overall, Norway was the seventh largest donor to UN development and humanitarian activities.

The amount of official development assistance (ODA) that Norway has channelled through the UN increased from NOK 5.6 billion in 2005 to NOK 7 billion in 2011. However, the increase in contributions to the UN system has been smaller than the increase in Norway’s overall aid budget, and the proportion of UN contributions relative to total contributions fell from 31.3 % in 2005 to 25.4 % in 2011. This drop is primarily due to an increase in the support given to global funds, particularly the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) and the GAVI Alliance, which focuses on vaccination and immunisation. These funds are in turn important contributors to various UN organisations.

Norway concentrates its contributions on certain UN organisations. In 2011, almost NOK 5.2 billion, corresponding to 73.6 % of total UN support, went to just eight partners. This concentration of aid puts Norway among the largest donors to these organisations. For example, in 2011, Norway was the third largest donor to both UNDP and UNICEF, providing around 5 % of the total support they received. These large-scale contributions give us considerable influence.

UN funds and programmes are financed solely through voluntary contributions. UN specialised agencies, on the other hand, are funded through a combination of voluntary contributions and membership fees based on the gross national income of each member state. As a result, Norway generally ranks lower on the list of contributors to specialised agencies.

5.1 Priorities in Norwegian UN policy

UN organisations differ from other recipients of Norwegian aid in that Norway is entitled to sit on governing bodies, which allows us to participate in developing guidelines not only for the use of our financial contributions, but also for the organisations’ overall activities. In the recommendation of the Standing Committee on Foreign Affairs and Defence on a Norwegian budget strategy for the UN (Recommendation S No. 84 (2010–2011)), the Storting expressed its support for this approach. The results of our efforts to exert influence and of our work with partners can be seen in the decisions of governing bodies.

Norway’s priorities in the individual governing bodies vary somewhat from organisation to organisation. The aim of improving effectiveness and the individual organisation’s ability to react flexibly to new situations and needs means that there are a number of recurring issues:

• The organisation concerned must have a well-defined strategic focus for its activities that concentrates on its individual strengths. It must adopt a human rights approach, and integrate gender equality considerations into every aspect of its work. According to the guidelines laid down in the white paper Towards Greener Development (Report No. 14 (2010–2011) to the Storting), the organisation’s activities should include environmental initiatives in line with its mandate and tasks.

• The organisation must build on its normative mandates and support the implementation capacity of the country in question. Norway is working to shift the various organisations’ focus away from project implementation and service delivery, except in the case of fragile states and humanitarian projects. This is particularly important in view of the increasing number of NGOs and private actors entering the picture that are better equipped to deliver services, and of the improved capacity of countries to assume primary responsibility for delivering such services.

• The organisation must deliver and document results. A sound results framework is essential for the latter, and Norway is working with other member states to strengthen such frameworks.

• The organisation must have a central evaluation function and an internal audit function, both of which must have sufficient capacity and be independent of management. It must also have procedures in place for preventing, detecting and following up on corruption.

• The organisation must have procedures in place to facilitate learning from experience, and make continuous improvements to its activities.

• Organisations must improve their ability to deliver collectively. Norway is giving priority to ensuring a constructive division of labour within the UN and between UN organisations and other actors, and to cooperating on achieving better results and preventing duplication and undesirable competition. Norway requires organisations to demonstrate a willingness to reform, both through the Delivering as One modality and through the cluster approach to coordinating humanitarian UN organisations.

5.2 Influence and control

Participation in governing bodies enables Norway to influence the plans, budgets and performance of individual organisations. It also provides an opportunity to ensure that organisations have adequate guidelines for their activities, as well as reliable control systems. Through its board memberships, Norway is able to follow whether organisations implement the priorities and guidelines adopted by their governing bodies.

In recent years the Government has devoted resources to professionalising Norway’s work on the governing bodies of UN funds, programmes and specialised agencies. In line with the recommendations of the Auditor General for the work with UNDP, UNFPA and UNICEF, we have made sure that the efforts to promote Norwegian priorities are verifiable. We are drawing up common guidelines for participation in governing bodies. Norad’s capacity to provide expert assessments has been strengthened.

To gain acceptance for Norwegian positions on reform and cross-sectoral issues, it is important that Norway acts consistently in governing bodies within the UN system. Coordination of Norway’s various memberships therefore has high priority. Applying decisions made by the governing body of one organisation to the work in that of other organisations enables Norway to contribute to improving several organisations at the same time.

Different types of organisations have different governance structures, and opportunities to exert influence and control vary. Whether or not Norway has a formal place on an organisation’s board is not always decisive, since in most cases all member states have observer status and full rights to speak and make proposals. Norway makes active use of this opportunity.

UN funds and programmes, which operate under mandates issued by the UN General Assembly, have the simplest structures. They have their own executive boards and no sub-committees, and board decisions provide clear guidance to the organisation concerned. UN specialised agencies generally take their mandates from a special instrument of international law, and have a tiered governance structure. Each organisation has its own general assembly or general conference, such as the World Health Assembly of the World Health Organization (WHO) and the International Labour Conference of the International Labour Organization (ILO). The organisation’s annual general meeting elects a board or council that prepares decisions for the annual general meeting and subsequently implements them. A third tier comprises formally appointed committees that assist the board in financial and administrative, and often also technical, issues.

Norway is also able to influence entities within the UN Secretariat, such as the Office for the Coordination of Humanitarian Affairs (OCHA), the Office of the High Commissioner for Human Rights (OHCHR) and the United Nations Office on Drugs and Crime (UNODC), through the subsidiary organs of the General Assembly and direct dialogue with the Secretariat, both bilaterally and as a member of a donor group.

Norway and other member states are placing increasing emphasis on transparency, and the governing bodies of some organisations have recently made decisions promoting transparency, primarily in connection with internal audit reports. Participation in these bodies allows Norway to assess the efforts to follow up the reports and to contribute to improvements. Moreover, in the context of development cooperation, transparency that allows the public to scrutinise all planned measures is one of the main prerequisites for greater local ownership and anti-corruption efforts. Norway will continue to promote transparency at country level and centrally within the UN.

The Government is giving high priority to efforts to improve UN leadership and results. Exerting influence effectively is very labour-intensive, and requires comprehensive technical assessments by Norad and Norwegian embassies. In the case of some organisations, exerting influence also requires close coordination, both between Norwegian ministries and with other actors. The bodies responsible for coordination include the national committees of UN organisations, such as the Norwegian FAO Committee, the Norwegian ILO Committee and the Norwegian UNESCO Committee. Coordination is also an important aspect of ILO’s work due to the organisation’s tripartite structure, which in addition to member states includes both employer and employee representatives. The Government considers that board meetings should be ranked in order of priority so that the extent of the work involved in the preparations reflects the importance of each particular organisation for Norway’s priorities and the size of Norway’s contribution.

We need knowledge of how the UN organisations work at country level if we are to do a good job in governing bodies. The embassies contribute to this mainly through their assessments of selected country programmes, while Norad conducts technical assessments of the results. The Government wishes to strengthen this aspect of our board participation by choosing a certain number of embassies to maintain regular contact with UN organisations over time, in consultation with the Ministry. As in other aspects of our work in the UN, alliance-building and dialogue with other member states are an important part of our efforts to promote our priorities.

Norway will give priority to its work in the governing bodies of UN organisations. The importance of ensuring that the work of the Ministry of Foreign Affairs vis-à-vis the organisations is documented and verifiable was emphasised by the Storting in its consideration of a report by the Office of the Auditor General on the focus on results in Norwegian development cooperation (recommendation of the Standing Committee on Scrutiny and Constitutional Affairs, Recommendation S No. 104 S (2011–2012)). The recommendations of the Auditor General’s report have been implemented. In addition to ensuring documentation through comprehensive instructions for board meetings, a new format has been introduced for reports on UNDP, UNFPA and UNICEF, which describe how Norway’s views have been implemented and how far they have been incorporated into board decisions.

5.3 Results-based management and results reporting

The Government believes that results-based management is important for two reasons.

It improves the results of development aid. Systematic implementation and evaluation, knowledge-based decision-making, continuous learning and organisational adaptation are essential to the effective achievement of results.

1. Results-based management is a prerequisite for the reliability of reported results, and for holding organisations accountable to their governing bodies, donors and programme countries.

2. Norway works together with other member states to improve documentation of the results achieved by UN organisations. Organisations should have long-term plans accompanied by a results framework that specifies what they are expected to achieve and how to achieve it. It is also important that the results framework facilitates the monitoring of progress on adopted plans. One of Norway’s priorities is to ensure that results frameworks provide for reporting on the results achieved by the organisation both as a whole and in individual countries. Accordingly, systems are required to link results with approved organisational priorities and enable information from the country level to be aggregated. Some organisations have introduced such systems, while others are slower to do so.

The Government also intends to strengthen the organisations’ budgets with a view to achieving results. Norway plays a leading role in promoting the ongoing joint budget reform of UNDP, UNFPA, UNICEF and UN Women, which will improve the insight of these organisations’ boards into expenditure, and strengthen the use of budgets to achieve results. The reform has introduced regular consultations between management and boards, and thus improved the latter’s ability to influence ongoing processes. WHO has launched a similar reform.

UN organisations face a number of challenges in relation to results-based management.

There is a risk that the strong emphasis on reporting and documentation will cause organisations to focus only on quantifiable results. It is therefore essential to develop methods for assessing results in every area where progress is expected. The social impacts of the normative and standard-setting work of UN organisations, such as policy development and institution-building, are more difficult to measure. Even if an organisation reports annually on, for example, how many countries it has assisted with drafting certain legislation or how many countries have adopted such legislation, it is difficult to document the effects on social development. Nor is a large proportion of normative work easy to quantify in a meaningful way. It is also important to prevent organisations from satisfying the expectation of quick results by focusing their activities on areas where reporting results is easiest. Accordingly, organisations must develop other methods for assessing progress and showing evidence of results, such as formative research, case studies and surveys. After the project has been terminated, the evaluation is the most important source of data for assessing whether an organisation has achieved its goals. The Government will seek to ensure that evaluations of results take both short-term and long-term results into account.

It is important to be aware that the risk of UN organisations not achieving the desired results increases when member states expect them to operate in fragile states and regions. There is a greater risk of corruption and of funds not being used as intended. Member states and donors must accept that a far higher risk is attached to work in fragile states than to work in countries with more stable conditions and stronger institutions, but the risk level in such countries presents a dilemma. Risk assessments and plans for risk management are an important aspect of performance. Norway expects organisations to conduct risk assessments, introduce measures to reduce risk, and notify donors and member states of problems and actions. Several UN organisations plan to launch a joint initiative to establish a dialogue with large donors on these issues. The Government will participate actively in these discussions.

The Government takes the view that nothing less than the highest standards must apply to results-based management. Good plans, systems and tools are necessary, but insufficient. Norway expects the heads of organisations to make it clear that results are what counts, and that performance is one of the criteria for staff assessment, particularly for management at all levels.

5.4 Funding

5.4.1 Voluntary contributions – the consequences of different forms of funding

The way UN organisations’ activities are funded directly influences their effectiveness. Both core contributions and earmarked contributions have advantages and disadvantages. As a large provider of core and earmarked contributions to UN organisations, it is important for Norway to be fully aware of the consequences of the different forms of funding.

Source Norad’s statistics database

Core contributions are the cornerstone of every UN organisation. Large core contributions enable the organisation to allocate resources in accordance with adopted priorities, which makes it easier to comply with instructions from governing bodies, allows them to plan strategically, and gives them the flexibility they need to adapt to changed conditions and new situations. A large proportion of core resources is a basic condition if the organisations are to contribute funds from their own budgets to finance UN reform at country level (Delivering as One).

The proportion of core contributions to the total income of the development organisations has declined considerably in the last five years, from 68 % in 1994 to 30 % in 2010.

* Core contributions also include assessed contributions to specialised agencies.

Source Norad’s statistics database

Norway believes that core contributions are an instrument for making organisations more effective. Large core contributions support our efforts in governing bodies and increase our influence.

A high proportion of earmarking has negative consequences for the effectiveness of UN organisations. The necessity for mobilising resources promotes competition rather than cooperation between organisations. Furthermore, organisations cannot undertake commitments until the pledged contributions have been paid out, and this limits their ability to plan for the long term. If for some reason an earmarked project cannot be carried out, the unused funds may remain in the account. Earmarking also involves more administration, for example because the donors require separate reports.

Norway has used earmarking to highlight its contributions to political priority areas. One weakness of core contributions is that it is difficult to document the role they play in the achievement of particular political goals, even when these are based on the organisation’s strategic priorities. For example, core contributions to UNICEF cannot be reported as support for education despite the fact that this is one of the organisation’s primary tasks.

The disadvantages of earmarking for organisations depend to some extent on the degree of earmarking. There are fewer disadvantages to thematic contributions that support overall priorities in an organisation’s long-term plan, since such funds are more flexible and do not impose separate reporting requirements. Project funding, on the other hand, clearly carries the most disadvantages. A stronger focus should therefore be directed at the degree and type of earmarking and at the various forms of pooled funding, including multi-donor funds. It is important for large donors like Norway that core resources are not used to subsidise activities supported by earmarked funds.

The predictability of funding influences the ability of UN organisations to plan programme activities and organisational changes. As pointed out by the Storting in a recommendation of the Standing Committee on Foreign Affairs and Defence (Recommendation S No. 84 (2010–2011)), predictability is a key condition for the effectiveness of development aid, and multi-year commitments are considered a step forward. The Government will continue to consider using multi-year indicative commitments to core contributions based on clear guidelines. However, we believe that multi-year indicative commitments must be based on long-term plans. Accordingly, no new commitments will made until the organisations’ long-term plans for the period 2014–17 are in place. The general criteria for contributions to organisations will be applied when considering a commitment to an individual organisation.

5.4.2 Funding of UN activities in middle-income countries

There is increasing tension between middle-income countries that are still interested in a UN presence and the services it provides, and the least developed and other low-income countries that would prefer the UN organisations’ core resources to be used where the need is greatest, in other words in their countries. The problem is underlined by the fact that the number of middle-income countries has risen steeply while the proportion of the UN organisations’ core resources relative to their total resources has declined. The middle-income countries wish the UN organisations to make concrete contributions to alleviating their own major poverty problems. Some countries have cast UN organisations in the role of supplier of services in the social sector.

The Government believes that the UN’s universal mandate means that all countries, regardless of their level of economic development, are entitled to assistance from UN organisations to implement international norms and standards. However, we also take the view that the scarce core resources of UN organisations should continue to be utilised primarily in low-income countries. Middle-income countries, and particularly those in the category “upper middle-income countries”, must be expected to take responsibility for poverty reduction within their own borders by increasing tax revenues and implementing a social redistribution policy. It would therefore be logical for these countries to continue paying most of the costs of maintaining a local UN presence, and to continue funding cooperation programmes involving UN organisations. UN organisations should not necessarily continue maintaining country offices on the present scale. This should depend more on the level of activity. Developing more flexible systems for their presence in middle-income countries could make these organisations more effective.

The universal mandates and human rights-based approach of UN organisations mean that they also have a responsibility to promote the interests of vulnerable groups, including in countries in which this is not a political priority. Given the normative mandates of these organisations, and their role as an independent voice, it seems reasonable that their core resources should also cover the costs of deploying core personnel in middle-income countries.

5.5 Criteria for assessing UN organisations

In recommendations by the Standing Committee on Foreign Affairs and Defence (Recommendation S No. 84 (2010–2011)) and the Standing Committee on Scrutiny and Constitutional Affairs (Recommendation S No. 104 (2011–2012)), the Storting requested the Government to describe Norway’s assessment of the relevance and effectiveness of individual UN organisations, and to ensure that these assessments have budgetary consequences for Norway’s voluntary contributions. With this aim in mind, the Government is assessing the organisations based on the following criteria:

1. their results and ability to document them,

2. their relevance in view of Norway’s political priorities,

3. their systems for planning, budgeting and results reporting,

4. their systems for conducting internal control and combating corruption,

5. their contributions to national capacity and institutional development and promotion of national ownership,

6. Norway’s opportunities to influence the organisation as a whole,

7. their willingness to take concrete measures to implement reform.

The overall assessment should also include Norway’s relative size as a donor and the effect of Norwegian contributions in mobilising support from other donors.

Some of the criteria have been used previously in published profiles describing Norway’s support for multilateral organisations and global funds. So far these profiles have focused on qualitative assessment, and the organisations have not been ranked in any way. The organisational profiles are based on the extensive expert assessments conducted in preparation for board meetings, previous evaluations, and assessments undertaken jointly with other countries.

The joint assessments conducted by the Multilateral Organisation Performance Assessment Network (MOPAN) are particularly important. MOPAN consists of Norway and 16 other countries, and assesses selected organisations every year. Norway also carries out assessments in cooperation with the other Nordic countries. One example is the joint Nordic study of the monitoring and control policies, structures and practices of UN organisations for preventing financial irregularities. The Government will continue the practice of assessing UN organisations according to the above seven criteria every two years. The assessments will be published.

If an organisation achieves poor results and fails to document its results satisfactorily over time, and also performs poorly in assessments based on other criteria, this will have consequences for Norwegian support.

The Government will:

• make systematic efforts to ensure that the UN has in place high-quality structures for results reporting and results-based management that are continuously improved,

• maintain core contributions at a high level, provided that the organisations perform satisfactorily in relation to certain assessment criteria,

• reduce support for organisations that fail to meet the assessment criteria over time,

• continue to consider making multi-year indicative commitments to support long-term planning and implementation by UN organisations,

• seek to ensure that more member states, including emerging economies, give priority to core contributions,

• as a rule provide additional contributions in the form of thematic support,

• seek to ensure that organisations’ core resources are not used to subsidise activities that receive earmarked funds,

• seek to ensure that the core resources of development organisations continue to be used primarily in low-income countries,

• engage in dialogue with UN organisations and other member states on how best to approach risk in fragile states.