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Info Service on WTO and Trade Issues (Feb22/12) Geneva, 14 Feb (D. Ravi Kanth) – The World Trade Organization’s Director-General Ms Ngozi Okonjo-Iweala on Friday refused to share with members the full McKinsey & Company report on the structural review of the WTO Secretariat on grounds that the full disclosure of the contents of the report would demoralize the staff, said people familiar with the development. However, the DG’s allegedly “intransigent” position has reinforced doubts about the credibility of the McKinsey report, and has seemingly caused more disquiet among members who sought the full disclosure of the report at the WTO’s Committee on Budget, Finance and Administration (CBFA) on Friday, said people familiar with the development. Apparently, several countries including Germany, the Netherlands, China, and South Africa among others called for the full disclosure of the McKinsey report following the DG’s explanation of some of the contents of the report, said people familiar with the proceedings of the meeting. DG MAKES STRONG PITCH AGAINST SHARING MCKINSEY REPORT At a one-hour-long meeting of the WTO’s Committee on Budget, Finance and Administration on Friday, the DG explained the import of the “Transformation Process/Structural Review Implementation” through several slides. Ms Okonjo-Iweala apparently took almost 40 minutes to explain each slide, said people who took part in the meeting. The slides include several “recaps” such as: * “WTO secretariat embarked on a transformation process and structural review driven by three main external factors”; * “The Secretariat to become future-responsive with an environment in which all staff can thrive and a vision to which all staff subscribe”; * “7 main sources of insight were used to conduct the diagnostic of the Secretariat”; * “From the diagnostic, several strengths were identified on which the Secretariat can further build”; * “At the same time, diagnostic has uncovered some areas for improvement to be addressed”; * “Reaching Secretariat target state can be done through five programs supported by 2 transformation enablers”; The slides also mention the following: “The transformation will be sequenced in two phases of implementation”; “Deep dive on initiatives sequencing for phase 1”; and “Our transformation governance.” In short, the DG gave an account of what she is going to do with the McKinsey report, emphasizing that she kept the members briefed at every stage of the review process, said people familiar with the discussions. The DG touted her so-called “transparency” credentials, suggesting that she listed the outcomes that are expected in the two phases of implementation. Ms Okonjo-Iweala said the first part of the implementation will be completed in April or May, indicating that they would soon see the tangible outcomes. SEVERAL MEMBERS DEMAND FULL REPORT After her presentation, the DG said that many members asked for the full McKinsey report. She insisted that her presentation is the full report, said people, who asked not to be quoted. She went on to say that what is not there in the report that she presented to members is essentially a division-by- division account and the review done by McKinsey & Company. Ms Okonjo-Iweala added that the report goes into the working of the divisions, the managers (as referred to in World Bank parlance but are called directors at the WTO) and the other good and bad aspects of the managers, said people familiar with the discussions. The DG said that if she puts out those parts of the report, then it would be demoralizing to the staff since the McKinsey report is candid about the functioning of each division and manager (director), said people, who asked not to be quoted. She claimed that the whole purpose of the entire McKinsey-based reform project is to improve the systems and the morale of the staff, pointing out that if she discloses those recommendations, then it would do the opposite of what she is trying to do, said people who asked not to be quoted. The DG also informed the CBFA meeting that she considered sharing the full report, but when she saw the critical assessment of the managers (directors) and the divisions and how the managers are performing, she thought it is not right, as a leader of the WTO, to put out the full report in public, said people who asked not to be quoted. CONTINUED DISQUIET AMONG MEMBERS In the ten or 12 minutes left of the meeting for the members to intervene, Germany, the Netherlands, South Africa, and China demanded the full disclosure of the McKinsey report regardless of the apprehensions raised by the DG. These members seemed unconvinced with her arguments and the allegedly “intransigent” position that she has adopted in not sharing the full report. Apparently, some of these countries are going to keep the issue open because some important issues are seemingly being concealed due to the likely devastating impact on the morale of the whole Secretariat stemming from the allegedly “autocratic” functioning of the leadership, said one person, who asked not to be quoted. These countries seem to fear that the report, without any institutional knowledge, could cause more dissension and fragmentation of the Secretariat at a time when the negotiations are stuck at an impasse in all areas, the person said. At the CBFA meeting, the US asked the DG how she planned to engage with members during the implementation process. In response, the DG apparently said that she may not engage with the members as it could cause more problems. Even if she feels that the McKinsey report should remain confidential in a member-driven organization, the DG could share the full report confidentially with key members for the sake of transparency, said people familiar with the discussions. More disturbingly, while the DG claimed that she has remained transparent in sharing the recommendations of the McKinsey report, yet she fears sharing the full report with the members, said people, who asked not to be quoted. However, at the CBFA meeting, Singapore appeared to come to the DG’s rescue, saying that members should not micro-manage the DG’s implementation process, said people, who asked not to be quoted. At one point, the DG said that members have little to do with her reform of the Secretariat, as the McKinsey report is not touching upon the structure of the WTO, said people, who asked not to be quoted. Surprisingly, the WTO did not post the DG’s comments at the CBFA meeting on its website.
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