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WT/BFA/160  
 
2 December  2016 
(16-6632) Page: 1/4  
Committee on Budget, Financ e and Administration    
 
 REPORT OF THE MEETIN G HELD ON 30 NOVEMBER 2016  
The Committee on Budget, Finance and Administration (CBFA) met on 30 Novem ber 2016 under 
the Chairmanship of Ambassador Inga Ernstsone (Latvia). The Terms of Reference and 
composition of the Committee are set out in document WT/L/44/REV.1.  The agenda contained in 
document WTO/AIR/BFA/1 3 was adopted.  
1 PRESENTATION OF THE DRAFT ASHI STRATEGY  – WT/BFA/W/406  
1.1.  The Chair reminded the CBFA that the strategy development was a recommendation 
contained in the Report of the ASHI Working Group that was active in 2014 and 2015. She stated 
that the draft Strategy was developed with the oversight of an ASHI Monitoring Group, as 
established by the CBFA in 2015 . 
1.2.  The Secretariat provided the Committee with an overview of the Draft ASHI Strategy. The 
Committee's attention was dr awn to the need to establish a set of metrics that can be tracked  over 
time to determine if the Plan and ASHI benefits were being managed effectively to achieve the 
overall goal. It was indicated that the Str ategy development team was composed of different 
stakeholders, including Members, the DDG in charge of Finance and HR, several officials of the 
WTO Secretariat  and representatives of the Medical Insurance Management Committee (MIMC) 
and retirees.  The Secre tariat presented the pillars of the Strategy, which are Cost of the Plan, Cost 
Sharing and Funding. It was stated that the main cost drivers of the plan were expenses  related to 
hospitalisation , docto rs' fees and medicine. The Secretariat pointed out some measures that were 
to be  put in place by the Secretariat with effect from 1 January 2017. These include cost 
effectiveness and population control. Other measures are : lower negotiated rates for hospitals and 
clinics in Geneva area ; a cap on private room be d and board ; local benchmarks for determining 
reasonable and customary expenses outside of Geneva ; incentive  for using generic medications or 
purchasing medications in France ; lowering the cap on alternative therapies ; pre-authorisation for 
orthodontia for  adults ; revisiting the eligibility  criteria  of secondary dependants ; and promoting 
preventative measures such as vaccination and smoking cessation.  
1.3.  Regarding the areas to be explored, the S ecretariat cited the possibility of enrolment of 
members in  the National Health Insurance Systems  of their respective countries .  
1.4.  The Secretariat proposed to provide quarterly updates  to CBFA in the first year and annual  
report s thereafter.  
1.5.  The Chair man of the ASHI Monitoring Group focused his report on the reflections of the 
Monitoring Group whi ch considered the document at its meeting of 17th November 2016. He 
informed the CBFA  that t he Monitoring Group was encouraged by the substantial progress made 
since the previous draft. The Chairman n oted that the core objecti ve of the Strategy is to place 
ASHI on a more sustainable footing , with a focus on addressing the following fundamental points:  
1) minimi sing costs within the parameters of meeting legal and contractual obligations and Swiss 
medical insurance standards ; and 2 ) explor ing additional funding options while observing the 
financial constraints pertaining to  contributions .  
1.6.  According to the Chairman of the ASHI Monitoring Group the report provided sufficient detail 
on the various cost factors. He stated  that t he Moni toring Group M embers accepted that the 
funding options set out had validity and opined  that any savings made could be set aside for future 
use in terms of funding ASHI. The Chairman pointed out that practical elements,  including 
governance of the fund , would need to be clarified  and  that the document would benefit from 
further development of metrics so as to assist in evaluating the ongoing implementation of the WT/BFA/160  
 
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  Strategy. The Chairman thanked the Secretariat for the high standard of the work done, and the 
Monitoring Group Members  for the ir invaluable contributions to the process.  
1.7.  Upon taking the floor, several Member s thanked the Chairman and the Monitoring Group for 
the report and the Secretariat for addi tional details on the new ASHI S trategy.  
1.8.  A Member recalled his active participa tion in the strategy development discussions and 
expressed  satisf action  with the initial steps the Secretariat had taken through the development of 
this Strategy.  The M ember indicated that this was a highly complex issue that wo uld require 
ongoing efforts over a long period of time and no short term solutions could be adopted. The 
Member pointed out that many issues, which were raised in the report, should be taken into 
account as the Committee moves into the process of preparing  for the next biennial budget. He 
expressed the view that the key issue  for both the Secretariat and the M embers would be to 
maintain a focus on ensuring an appropriate balanc e between cost -control measures and funding 
options. The Member expressed willing ness to be actively engaged in further discussion s.  
1.9.  Another Member  stated that the Secretariat need s to consider both quality and cost-
effective ness. The Member also mentioned that he deemed  short term measures relatively 
irrelevant and stated the necessi ty to focus on long term solutions , given that the ASHI issue is a 
long-term matter . The Member was supportive of funding through contributions from beneficiaries 
and budget surpluses.  
1.10.   One Member acknowledged that the Secretariat had successfully completed  negotiations 
with a new medical plan provider. The Member stated that he was not so  sure about there being a 
strong rationale for creating a fund. Nonetheless, he stated that his delegation would not  stand in 
the way of if a consensus emerged in support o f establishment of a Fund, with the proviso that this 
would not imply any increase in Member s' contributions to the WTO budget.  He st ated that the 
draft strategy remains rather vague on the issue of staff contributions  and suggested that 
proposals on this aspect be presented to the CBFA in order to inform  the debate on this admittedly 
vital subject . The Member concluded that it is necessary to endeavour to come to a comprehensive 
decision on this matter in the context of the 2018-2019 budget discussions . 
1.11.   A Member appreciated that both cost control and financing of ASHI were addressed  in the 
Strategy . She stated that the obligation to provide health insurance to retired staff created a 
financial liability that the WTO Members and the Secretariat cannot only t ake note of. According to 
the Member , a more sustainable longer term solution is needed. As regards the cost side, the 
Member stated that different measures should be assessed not only in light of the actual cost 
savings, but also in light of their symboli c or signalling effects in terms of how comprehensive or 
generous the coverage is perceived to be. She suggested that Members should thoroughly discuss 
different questions related to the financing of ASHI.  
1.12.   A Member expressed general satisf action  with the p rogress and the report itself. He stated 
that it is necessary to continue to focus on elements that will "move the needle " with regard s to 
costs, i.e. hospitalisation, doctor's visits and medicines. The Member reiterated  the importance of 
the signalling ef fect of measures , no matter how small, that the WTO Secretariat staff would take 
in the direction of cost-reduction . The Member appreciated the metrics drawn up for measuring 
key performance indicators for strategy implementation  and specified this area as  one that need s 
further discussion . She also noted that the overall operating environment should be considered 
during further work on the ASHI strategy. The Member expressed keenness  to work with all 
relevant parties to find an appropriate way to forward o n this subject.   
1.13.   A Member sought clarification on  the point about eligibility of dependants such as disabled 
children. The Secretariat confirmed that this category of dependants would continue to be covered 
by the Health Insurance . 
1.14.   One Member stated  that the UN also looked at ASHI  liabilities  but had not come to a 
decision. According to the Member other international organizations would look to the WTO , as the 
emerging trail -blazer in coming up with concrete measures to address this subject and advised 
that this comes with  great  responsibility.  WT/BFA/160  
 
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  1.15.   Regarding the subject of funding , a Member mentioned it could be useful to have a plan for 
setting aside future surpluses  on the medical coverage budget . She pointed out the importance of 
discussing the prospective go vernance of such a fund with the WTO Pension Plan Management 
Board and reverting to the CBFA on this in a future meeting . 
1.16.   Pointing out that the  ASHI liability is a financial risk for many organizations , one  Member 
stated that a holistic approach should be adopted.  
1.17.   A Member proposed that decisions  be divided  into three categories (short, medium and long 
term). The Member also expressed that he was cognisant of the  human resources needs . 
1.18.   A Member drew attention to the fact that that ASHI was a permanent  and perpetual  issue. 
As most concerns were related to funding , the Member indicated that accumulated budget surplus 
could be a good source, but only a temporary one as the recurrence of surpluses is not 
guaranteed . The Member stated that in most jurisdictions,  corporate entities are obligated  to have 
reserves to meet unpredictable future events. He suggested that the financial situation be 
assessed at least annually by the CBFA. In a conclusion, the Member wished good health for the 
employees  of the WTO Secreta riat. 
1.19.   A Member recommended that  the Committee elaborate the long term solutions further , 
considering the current economic situation of Member countries  
1.20.   A Member  noted that costs under the WTO's existing Medical Plan have been managed quite 
effectively, res ulting in very moderate medical inflation of the plan over recent years, in 
comparison with the medical inflation rate  in Switzerland.  The Member welcomed any further 
improvements in that regard under the new contract. The Member also noted that the Strate gy 
clearly shows that this benign situation was bound to change in coming years  due to a number of 
factors. The Member supported the creation of a Fund towards meeting future needs and believed 
that it would allow capturing any savings achieved through cos t controls.  
1.21.   The Secretariat appreciated all comments and took note of them  and stated that no direct 
answers would be provided at this stage as further discussions are necessary. The Secretariat 
acknowledge d the awareness  of long term issues and expressed readiness for further discussions 
of funding issues.  
1.22.   The Chair stated that the Secretariat will , at a later stage , present a revised version of the 
Draft Strategy.  
1.23.   The Committee took note of the report.  
2  STATUS UPDATE ON ACTIONS RELATED TO EXTERNAL AUDIT FI NDINGS  AND 
RECOMMENDATIONS  
2.1.  Following the request from a Delegation concerning the measures implemented to address 
the External Auditor's findings and recommendations, the Secretariat circulated a table 
summarising the findings a nd actions before the meetin g. In presenting this, the Secretariat stated 
that of the 2015 recommendations made in 2015 , eight  were closed and the requisite action on 
the remaining six was ongoing.  
2.2.  The Secretariat stated that there were  17 recommendations for 2016  of which  nine were 
ongoing, six were anticipated to be closed and two were merged . 
2.3.  A Member thanked the Secretariat for the status update and drew attention to the 
recommendation related to the Office of Internal Oversight as major progress . The Member 
expressed interest in  hearing more about the audit plan of the Office of Internal Oversight.  
2.4.  Another  Member said he appreciated the report and found the External Auditor's 
recommendations useful. He stated that the External Auditor's work is valuable for the WTO and 
useful for  the Members  and that regular updates from the Secretariat are relevant in light of the 
previous, and future, deliberations on whether or not to establish an Audit Committee . WT/BFA/160  
 
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  2.5.  A Member also appreciated the report and stated that quarterly updates would be u seful. The 
Member expressed interest in getting a report from ITSD regarding actions taken in respect of 
outstanding recommendations.  
2.6.  The Chair informed the Committee that plans were under way for  the Office of Internal 
Oversight  and the Information and Te chnology Services Division to make presentations to the 
CBFA in its upcoming  meetings.  
2.7.  The Committee took note of the report.  
3  OTHER BUSINESS  
3.1.  The Chairperson  stated that the next CBFA meeting will take place in 2017  and that the  date 
would be communicated  in due course of the date. 
3.2.  The Chairperson closed the meeting  at 11h20 . 
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