Attention: Mr.L.E. Couillard⁵⁹

Dear Sir:

On December 18th, during my absence from Ottawa, Mr.Pollock convened an informal meeting to discuss the proposed United Nations Special Projects Fund. Although it was not possible to bring together all the officials in Ottawa who would normally be concerned with this matter, the meeting was able to focus attention on the main organizational problems to be examined by the Preparatory Committee and to suggest tentative Canadian positions during these discussions. In the time that has elapsed since the meeting, we have endeavoured to develop ideas based on the discussions which we have incorporated in the attached paper and which might form the basis for further inter-departmental consideration of this matter.

Mr. Pollock is away this week and Iwill be away next week. I would therefore suggest that a meeting be held in my office early in the week starting February 16th.⁶⁰

The attached paper has not been approved by the Minister. However, Ihave sent him a copy and he may wish to suggest some changes.

Yours very truly,

A.F.W. PLUMPTRE

[PIÉCE JOINTE/ENCLOSURE]

Note du ministère des Finances

Memorandum by Department of Finance

CONFIDENTIAL Ottawa, January 31, 1958

THE UNITED NATIONS SPECIAL PROJECTS FUND

1. Functions of the Special Projects Fund
   
   

   1. The Special Projects Fund should finance in less developed countries special technical assistance projects in the fields and of the types described below.⁶¹

2. Resources of the Special Projects Fund

   2. All expenses of the Special Projects Fund should be financed from voluntary annual contributions from member governments. Contributions should be pledged, but not paid, nine to twelve months in advance of the financial year in respect to which they are pledged.

   3. Contributions to the budget should normally be in the form of convertible currencies. (The provisions respecting contributions which apply to the Expanded Programme of Technical Assistance might be adapted to the Special Projects Fund.)

3. Method of Disbursing the Special Projects Fund's Resources

   4. Assistance given by the Special Projects Fund should be in the form of grants.

4. Structure of the Special Projects Fund A. Membership
   
   

   5. Participation in the Special Projects Fund, either as a donor or recipient, should be open to any state which is a member of the United Nations or of one of the specialized agencies of the United Nations.

   B. The Special Projects Committee
   
   

   6. The Special Projects Committee should be composed of eighteen members elected by the General Assembly for three years, one-third of the members being elected each year.⁶² In the first instance, one-third of the members should be elected for one year, one-third for two years, and one-third for three years. Retiring members should be eligible for re-election. Representatives of the Specialized Agencies could be invited to attend meetings as observers; but they would not have the right to vote.

   7. The membership of the Committee should be equally distributed between two groups, one consisting of major contributors and the other of countries electing to receive aid from the Special Projects Fund. Each member should have one vote. In addition, a representative of the country in whose territory a project is located or of the group of countries for whose immediate benefit a project is undertaken should also sit in the Committee and have the right to vote when that project is considered by the Committee.

   8. Decisions of the Committee on questions of policy, including the approval of projects, should require 12] votes when the country in which a project is located or when the group of countries directly interested in a project is already represented in the Committee; in other cases, such decisions should require 13 votes.

   C. The Special Projects Board

   9. The Special Projects Board should be composed of a representative⁶³ of the International Bank for Reconstruction and Development, a representative of the Secretary-General of the United Nations and the Chairman of the Technical Assistance Board.⁶⁴ The representative of the I.B.R.D. shall be Chairman of the Special Projects Board and Executive Director of the Fund.⁶⁵ He shall be an ex officio member of the Special Projects Committee without, however, having the right to vote in the Committee. (Consideration should also be given to having him act as Chairman of the Special Projects Committee.)

   D. The Executive Director

   10. The Executive Director should be a high official of the International Bank seconded to the Special Projects Fund on a continuing basis. He shall also act as Chairman of the Special Projects Board.⁶⁶

5. Functions of the Organs of the Special Projects Fund
   
   A. The Special Projects Committee
   11. The main functions of the Special Projects Committee should be:
       
       

       1. to keep under review the general policies, rules and regulations established by the General Assembly and the Economic and Social Council and, taking into account the advice of the Special Projects Board, to recommend to these two bodies any changes in these policies, rules and regulations, and to submit to them an annual report on the operations of the Special Projects Fund;

       2. to review projects which the Special Projects Board has recommended;

       3. to approve those projects which, it concludes, the Special Projects Fund should and can finance;⁶⁷

       4. to review progress achieved in implementing the projects financed by the Special Projects Fund with a view to ensuring that they are carried out in accordance with the general policies, rules and regulations laid down by the General Assembly and the Economic and Social Council;

       5. to review the progress reports submitted to it by the Special Projects Board.
          
          

       B. The Special Projects Board
   12. The Special Projects Board should not be responsible for the day-to-day operations of the Fund.⁶⁸ Its main functions should be:

       1. to examine the technical, economic and financial aspects of each project submitted to the Special Projects Fund⁶⁹ and, when necessary, refer such projects for detailed examination and advice to the I.B.R.D., or, if this is inappropriate, ⁷⁰ to one of the other specialized agencies of the U.N.;

       2. to submit for concurrence⁷¹ to the Special Projects Committee recommendations on each approved project including recommendations on the best way of carrying the projects and on the conditions which should be imposed on the requesting country as a condition of Fund financing;⁷²

       3. to keep under review the progress of the projects financed by Special Projects Fund and to submit periodically progress reports on these projects to the Special Projects Committee.
          
          

       C. The Executive Director

   13. The Executive Director⁷³ should be responsible to the Special Projects Board for the day-to-day operations and general management of the Special Projects Fund. Among other things, his functions should include the preparation of the administrative budget of the Special Projects Fund, staff matters, the processing of applications, overseeing the execution of agreements between the Special Projects Fund and the recipients of the Fund aid.

6. Allocation of the Resources of the Special Projects Fund

   14. The main criterion which the Special Projects Fund should apply in allocating its resources should be the soundness of the projects. However, over a period of years, it should strive also to allocate its resources on a reasonable geographical basis.⁷⁴

7. Procedures
   
   A. Applications for Assistance

   15. Applications for assistance should be submitted directly to the Special Projects Fund. In processing the applications, the Special Projects Board should decide whether it requires the assistance and advice of the I.B.R.D. or, in appropriate cases, of other⁷⁵ specialized agencies of the United Nations. Should the Board decide that an application does not warrant further examination, it should inform the Special Projects Committee that the project is unacceptable and that it should be rejected or withdrawn by the applicant. Should the Board decide that a project deserves further examination, it would consult with the I.B.R.D., and/or other specialized agencies in appropriate cases, on the arrangements for implementation. In general, any project involving capital expenditure or the purchase of large quantities of equipment should be referred⁷⁶ to the I.B.R.D. The I.B.R.D. should also have primary responsibility for multi-purpose projects. Other specialized agencies should be invited, as required, to collaborate in projects submitted to the Bank and to undertake other projects within their specific sphere of responsibility. In the case of projects not falling within the specific responsibility of the UN TAA or a specialized agency, the appropriate agency should be the I.B.R.D. ⁷⁷

   16. After completing its consultations with other agencies, the Special Projects Board may include the project in the programme recommended to the Special Projects Committee. In the case of a favourable Board recommendation, the Committee may accept or reject the recommendations of the Board. In the case of an unfavourable recommendation, the Committee would be informed of the reasons for rejection but would not have authority to reconsider the proposal.⁷⁸ A member could, however, resubmit a rejected proposal at a later date, provided it can satisfy the Board that it has overcome or eliminated the factors leading to initial rejection. B. Time of Meetings

   17. The Board shall meet at the call of the Chairman to review applications submitted. The Board shall inform member states of the latest date at which applications must be submitted in order to permit consideration within a specified programme.⁷⁹

   18. The Committee shall meet twice a year to review programme recommendations and receive progress reports from the Special Projects Board on approved projects. At one of these meetings a broader general policy review shall be undertaken in order to permit ⁸⁰ annual reports to be submitted to the summer session of ECOSOC. C. The Execution of Projects

   19. The Special Projects Fund should employ on a fee basis (based on estimated cost of participation) the services of the specialized agency selected in accordance with paragraph 15 to act as its agent in the execution of a project. Normally, the same specialized agency that was chosen to examine a project should also be hired as agent.

   20. The same procedures as are applied by the I.B.R.D. should apply to capital expenditures, large expenditures on equipment and the hiring of a firm to carry out a survey. The same procedures as are applied by the Expanded Programme should apply to the hiring of experts. Agreement shall be reached prior to inauguration of a project on the nature and extent of further financial assistance to be provided out of the Special Projects Fund to cover any running operational expenses. ⁸¹

   Staffing

8. The Special Projects Fund should, in the examination and execution of projects, rely to the fullest extent practicable on the facilities and staff of the International Bank and other⁸² specialized agencies. As much as possible, it should strive to obtain from the specialized agencies, on a reimbursement basis, the services of particular experts for particular projects. It should also have a small clerical and administrative staff of its own plus 10 or 12 general experts to advise the Special Projects Board on reports received from the specialized agencies, to make field visits, etc.

⁵⁹ Note marginale :/Marginal note:
to see & retain. (I am holding a second copy) [R.Grey]

⁶⁰ Note marginale :/Marginal note:
date not yet fixed but according to Hadwen, the sooner the better. [R.Grey]

⁶¹ Note marginale :/Marginal note:
This is the way UN Sec Gen. Staff wish to approach the problem i.e. define projects first. [R.Grey]

⁶² Note marginale :/Marginal note:
IBRD prefer no Committee SPP would report back to ECOSOC that seems to me quite impractical. [R.Grey]

⁶³ Note marginale :/Marginal note:
Who would instruct him? L.Couillard

⁶⁴ Note marginale :/Marginal note:
or possibly a rep. of ECOSOC? [R.Grey]

⁶⁵ Note marginale :/Marginal note:
This is really straining we will have to be prepared to back away. [R.Grey]

⁶⁶ Note marginale :/Marginal note:
Where woul]d the IBRD's influence come from? L.Couillard

⁶⁷ Note marginale :/Marginal note:
Can they initiate & approve? see 16 below [R.Grey]

⁶⁸ Note marginale :/Marginal note:
of the projects L. Couillard]

⁶⁹ Note marginale :/Marginal note:
who is this? L. Couillard]

⁷⁰ Note marginale :/Marginal note:
drafting [R. Grey]

⁷¹ Note marginale :/Marginal note:
sec 11.c? [R. Grey]

⁷²Note marginale :/Marginal note:
terms and conditions under which the Fund will finance] the project. L. Couillard

⁷³ Note marginale :/Marginal note:
IBRD [R. Grey]

⁷⁴Note marginale :/Marginal note:
country? L. Couillard

⁷⁵ Note marginale :/Marginal note:
drafting [R. Grey]

⁷⁶Note marginale :/Marginal note:
L. Couillard]

⁷⁷Note marginale :/Marginal note:
awkward [R. Grey]

⁷⁸ Note marginale :/Marginal note:
sec 11 c [R. Grey]

⁷⁹Note marginale :/Marginal note:
L. Couillard

⁸⁰Note marginale :/Marginal note:
prepare L. Couillard]

⁸¹Note marginale :/Marginal note:
This is pretty idealistic our Colombo] Plan experience, and Canadian experience generally, would suggest that this cannot be done. [R. Grey]

⁸²Note marginale :/Marginal note:
drafting [R. Grey]