Wednesday, December 8, 2010

and special tasks entrusted to the Bureau. 80 The constitutions of some organizations expressly provide that part of their budgets should be financed by voluntary contributions. For example, Article 25(3) of the ICM Constitution states that the �oper

to contribute to the defrayal of these expenses as such. Those expenditures must be met entirely by voluntary contributions. This is the clear implication of such provisions, even if voluntary contributions are insufficient to meet such expenditures. 81 Articles of Agreement, Article II(6). 82 Articles of Agreement, Article IV(5). The constitutions of the financial institutions in general have similar provisions. 380 f i n a nc i ng delegated or are supervised, budget approval does not create problems. The hierarchical structure obviates jurisdictional conflicts that cannot be resolved in legal terms. The plenary organ would control the opera- tions and policies of the organization and could determine both what the organizationinternational business litigation should be doing and how much and how funds should be allocated for such activity. The question whether the plenary organ has an obligation to approve the budget or a discretion to do so becomes moot. In this situation, as in all situations, the plenary organ has in any event an obligation to approve, and no discretion to disapprove, expen- ditures on obligations already validly entered into by the organization through any of its organs or obligations incumbent upon it. This emergesinternational business litigation from the Effect of Awards Case,83 where the ICJ held that the GA had no option but to honour obligations of compensation awarded by the UNAT for injurious acts of the organization vis-à-vis staff members. This is the regime that prevails in and applies to most international organizations. For dispute resolution, in the financial institutions, such as the IBRD and the IFC, the Boards of Governors have overall control over the operations, including expenditures of the organization, even though a lesser organ (e.g., the Executive Directors) may be delegated the power to approve the budget. Ultimately it is the Board of Governors that controls what is spent and what is done by the organization. Thus, there can be no jurisdictional conflict arisinginternational business litigation from differences of opinion over programmes and the funds required for them. In an organization such as the UN,84 there are several principal organs which have authority to determine their own work programmes, e.g., the GA, the ECOSOC, the TC and even the Secretariat. Their relationship in respect of functions is not always hierarchical and vertical, unlike the relationship among organs in the financial institutions or most of the specialized agencies of the UN. However, Article 17(1) of the UN Charter provides that ‘the General Assembly shall consider and approve the budget of the Organization’.

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