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TWN
Info Service on WTO and Trade Issues (Jul22/04)
Trade: WTO Secretariat reforms proposed & implemented
by McKinsey & Co Geneva, 12 Jul (D. Ravi Kanth) -- Several WTO members appear to be concerned about the price, in financial and systemic terms, of the proposed reforms of the WTO Secretariat based on a McKinsey & Co report, and apparently being implemented by the same corporate outfit. The manner in which McKinsey & Co is apparently being tasked for two diverse purposes by the WTO Director- General, Ms Ngozi Okonjo-Iweala, has apparently raised serious questions of conflict of interests, said people familiar with the development. It is rare to see a case of the role of the proverbial judge, jury, and executioner being assigned to McKinsey & Co. It has been given a room at the WTO as well as free entry to sit in on the regular directors' meetings, said a person, who asked not to be quoted. More importantly, in an inter-governmental, member-driven, and rules-based organization, attempts are now being made to "set the strategic directional and foundational structures", said people, who asked not to be quoted. It is also not clear whether setting "the strategic directional and foundational structures" is consistent with the "Outcome Document" (WT/MIN(22)/24) from the WTO's 12th ministerial conference (MC12), particularly when it states that "while reaffirming the foundational (Marrakesh Agreement) principles of the WTO, we envision reforms to improve all its functions." Perhaps there may be hidden attempts to use McKinsey & Co for reforming the WTO, said a trade envoy, who asked not to be identified. Even though the DG and her deputy Ms Angela Ellard from the United States provided reports, much of the messages from these reports are couched in corporate jargon without revealing in concrete terms what has been achieved to date, said people familiar with the reports. Ahead of the meeting of WTO's Committee on Budget, Finance, and Administration on 15 July, the Secretariat has released a restricted document (WT/BFA/W/595). According to the report, it is said that in Phase 1, key initiatives were launched and there were apparently "quick wins." The initiatives centred on the following aspects: A. Reinforce Secretariat talent management practices. B. Strengthen Secretariat ways of working to optimize efficiency and impact. C. Leverage the opportunities of data, technology and innovation to secure long-term relevance. Apparently, these initiatives have not been explained, causing confusion among members as to what concrete results are going to be achieved. It also appears that these initiatives strike at the heart of the Marrakesh Agreement, especially paragraph 4 of Article VI, which has clearly defined the role of the DG and the Secretariat, said a trade envoy who asked not to be quoted. As per paragraph 4 of Article VI of the Marrakesh Agreement that led to the establishment of the WTO, "the responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively international in character. In the discharge of their duties, the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO. They shall refrain from any action which might adversely reflect on their position as international officials. The Members of the WTO shall respect the international character of the responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them in the discharge of their duties." However, these rules have been seemingly brushed aside to accommodate the McKinsey & Co reforms. Although members had expressed their concerns about the financial costs involved, they appear to be unable to stop what is being called "a form of McKinseyisation of the WTO Secretariat", said a person, who preferred not to be quoted. The report says that the "first wave" issues such as "talent management" and "ways of working" were addressed. However, the report did not clearly elaborate on what are the implications of talent management or ways of working, said people, who asked not to be quoted. As part of the reform of the WTO Secretariat, it says that the "first wave" focusing on "talent management" and "ways of working" seeks to "establish reward schemes (outside promotion) for Secretariat staff." Under the sub-title of "establish(ing) reward schemes (outside promotion) for Secretariat staff", the following markers are being set. They include: 1. Establish reward schemes (outside promotion) for Secretariat staff a. Non-monetary rewards for staff: Changes to be made: Launching new or redesigned non-monetary rewards to recognize teamwork, innovation, and excellence in management. Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. b. Awarding annual performance bonuses for staff: Changes to be made: Redesigning the annual performance-related bonus (without increasing the amount allocated in the budget) by splitting into two categories: i. Outstanding performers, to receive a somewhat higher bonus. ii. Very strong performers. Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. c. Building a stronger culture of ongoing "recognition and praise" within the Secretariat: Changes to be made: Designing and implementing training for supervisors, managers, and staff; highlighting good practices and role models. Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. 2. Improve key internal Secretariat systems a. Risk management: Changes to be made: i. Development and implementation of a comprehensive and tailored Secretariat-wide risk taxonomy. ii. Development of an overarching risk management process with clearly defined responsibilities. iii. Strengthen risk awareness and the recognition reporting and managing of risk across the Secretariat. iv. Fill the risk officer position (currently vacant). Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. b. Procurement: Changes to be made: i. Updating monetary thresholds for procurement processes involving low-value procurement, taking account of inflation and of best practices among peer international organizations. ii. Strengthening capabilities and culture across the Secretariat by requiring more training about use of the procurement process. iii. Standardizing internal processes. iv. Increasing use of digital tools to boost efficiency and transparency. Status: Full cycle of testing and refinement completed, including a partial review of proposals by the Steering Committee; plans for implementation being developed. Clearly, the above objectives could undermine the independent and impartial role of the WTO Secretariat's staff and encourage "cronyism" among the staff for allegedly climbing the ladder, said people who asked not to be quoted. In the "second wave" under the title of "Secretariat staff career pathways, mobility, recruitment, and promotions," the following objectives are expected to be achieved. The objectives include: Secretariat staff career pathways, mobility, recruitment, and promotions a. Career Pathways: Changes to be made: Move from a rigid system of a single vertical progression track to a more dynamic architecture of career pathways enabling more flexibility and opportunities for development. Introduce a split into Expert and Manager tracks at more senior grades. Begin to lay the groundwork for the eventual development and introduction of job families as a subsequent step. Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. b. Recruitment: Changes to be made: Introduce several measures to make the recruitment process faster, more efficient, more candidate-centric and more capable of contributing to a diverse and inclusive Secretariat, including more advance planning. Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. c. Mobility: Changes to be made: Implement formal mechanisms as well as communications, training and assistance to encourage more internal and external mobility, as well as a positive perception of mobility. Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. d. Promotions: Changes to be made: Various measures approved that aim to make the promotions process more consistent and transparent. Further analysis requested on how the promotions backlog that has led to high levels of staff frustration might be addressed. Status: Full cycle of testing and refinement completed, including a review by the Steering Committee; plans for implementation being developed. These objectives, as spelt out in corporate jargon, apparently failed to convey how this scheme of incentives will constructively contribute to the efficient functioning of the Secretariat staff, said a member, who preferred not to be quoted. In the "third wave", the report suggests two phases that include "data, technology and innovation" in the first phase, and "set the strategic direction and foundational structure", in the second phase. Under "data, technology and innovation," the report says that "the work began the week of 30 May 2022 and aims to develop a roadmap to leverage the opportunities related to data, technology, and innovation, and to score the long-term relevance of the Secretariat through initiatives focusing on: * Developing a roadmap for the digital transformation of the Secretariat. * Creating mechanisms to increase external collaboration and partnerships. * Strengthening the culture of innovation in the Secretariat." In short, using the McKinsey & Co report, the DG seemingly wants to throw open the WTO Secretariat to work outside, and create new divisions despite the growing budgetary constraints, said people, who asked not to be quoted. Further, in "Phase 2: Set the strategic direction and foundational structure", which is underlined in red, the report seeks to (1) "define Secretariat values, vision, and strategic direction"; (2) "optimize Secretariat organizational structure to make it fit for purpose"; and (3) "continue implementing Phase 1." More worryingly, the report says that "in addition, work may be launched in parallel on other areas, e.g., putting in place a positive Planning & Strategy Union or a possible Regional & Country Support Unit based in the Secretariat in Geneva," said a person, who asked not to be quoted. This new unit, as and when it comes into existence, could clash with the work already being done by the Trade Policy Division, which does most of this work, the person said. According to another person, who asked not to be quoted, the creation of new divisions appears to be an attempt to provide "open spaces" that would enable the DG to offer jobs to people she may have promised during her campaign. In conclusion, the Secretariat reform apparently being implemented by McKinsey & Co appears somewhat "soiled" with unexplained and hidden goals that are going to be foisted on members, said people, who preferred not to be identified. It remains to be seen what members will do at the meeting of the WTO's Committee on Budget, Finance, and Administration on 15 July, as they control the purse strings. +
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