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2003-10-14 15:24:00
Embassy The Hague
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						UNCLAS SECTION 01 OF 05 THE HAGUE 002627 




E.O. 12958: N/A

This is CWC-107-03.

Action Request in para 19.






E.O. 12958: N/A

This is CWC-107-03.

Action Request in para 19.


1. (U) It appears a consensus has been reached on an
Article VII action plan for national implementation.
Following an Oct. 9 meeting chaired by DG Pfirter with the
Ambassadors of the U.S., U.K., India and Iran, agreement was
reached on the one final substantive issue, which was the
acceptable wording on action to be taken to address
non-compliance. Agreement was reached on "any necessary
measures if appropriate", although India and Iran stressed
the need to go back to capitals for approval. The follow-on
Oct. 10 discussions provided an opportunity for India, in
particular, to provide additional non-substantive points. At
this time, the facilitator, Mark Matthews (U.K.) does not
know of any new substantive problems, and remains hopeful
that none will arise in the run-up to the CSP.


2. (U) A final round of informal consultations on October 9
succeeded in bringing the draft Universality Action Plan
close to consensus among participating delegations.
Facilitator Consuelo Femenia proposed to submit the text
(issued October 13 and faxed to AC/CB) as the basis for a
decision at the next Executive Council session. Although
some interested delegations (India, South Africa, France)
were not present for the final informal consultations, and
Mexico reserved judgment pending instructions from its
capital, there was no dissent to Femenia's proposal.

3. (U) The latest version includes changes to preambular
paragraphs proposed by Korea (noting, inter alia, that the
UNGA has stressed the importance of achieving CWC
universality). The ROK also asked for States Parties' views
on whether the declaration of the CSP on universality which
has been adopted every year should be repeated at CSP-8, or
whether it should be supplanted by CSP endorsement of the
Action Plan.

4. (U) The language on points of contact was further

strengthened: the EC "strongly recommends the establishment,
on a voluntary basis, of 'points of contact' among States
Parties in a number which allows for the effective promotion
of universality in all relevant regions or sub-regions."
Delegates continued to question how these POCs would be
identified and how they would share action if more than one
in a geographic area.

5. (U) At U.S. Del's urging, the EC is to request the
Technical Secretariat "to prepare a comprehensive annual
document on planned universality-related activities.... The
document should set appropriate numerical targets of new
States Parties." Femenia told us that she did not expect any
further assaults on numerical targets for accession.

6. (U) Many delegations supported merging PPs 9 and 10 (PPs
8 and 9 in the October 8 text then under discussion), but
Femenia told DelOff that she had left them as separate
paragraphs to avoid equating the verification and assistance
functions of the OPCW (PP 9 contains references to
verification, PP 10 to assistance). Still, she was concerned
that India and/or Iran might re-open debate on those points
in the EC.

7. (U) On October 7, Germany had suggested that the OPCW's
consultant to Latin America on universality issues should be
invited to address the next informal session to provide
further ideas for the Action Plan, but Femenia said there was
insufficient time before the CSP to take new suggestions on

8. (U) South Africa repeatedly asked whether the Action Plan
had budgetary implications. Keith Wilson of the
Secretariat's External Relations Division said it would not

require additional staff or funding to implement the plan,
which would simply help guide and rationalize the activities
of the ERD. Others pointed out that voluntary contributions
were already contributing to some of the activities
envisioned in the plan.


9. (U) In the Oct. 9 budget informals, DG Pfirter made his
pitch for a 7.36% increase as the minimum necessary to ensure
that core functions of the organization are performed. The
DG provided an Oct. 13 note, FAXed to AC/CB, in which he
outlined the impact of budget increases of only 7%, 6.36% and
5.86%. In previewing the idea of a 7% increase, the DG had
made a pretty strong case during the informals, stating that
personnel cuts would be required. However, in his note, the
DG's case was more moderate. He wrote that there were
obviously "presentational" advantages of an increase of just
under 7%. He commented that "Indeed, in my earlier proposal,
I made clear that, in order to add 250,000 Euros to ICA
activities, I would seek further efficiency savings of 0.4%.
My proposal was and remains to use those additional
efficiency savings for ICA activities. That is only my
proposal. Alternatives would be:

-- to use the efficiency savings in full and to reduce the
size of my budget request to 6.96% rather than to increase
programme activity. In that case, no additional funds would
be available for ICA activities;
-- to deduct a proportion of the savings from the budget
request and increase ICA activities by a smaller amount;
-- to spread the reduction in programme activity beyond and
including ICA."

10. (U) The DG's note goes on to state that, "those are the
broad options. The political choice is for member States.
Within this 0.4% bracket, I am entirely relaxed about any
different package which commands consensus subject to two key
provisos. First, I cannot deliver efficiency savings and
programme increases, and a net reduction in the budget
increase simultaneously. Second, as your Chief Executive, I
am not prepared responsibly to score efficiency savings twice
or to make unrealistic promises. 'Fictitious savings' would
simply aggravate the problem of cash risk and 'fictitious

11. (U) Predictably, the DG's paper goes on to make the
case that with an increase of only 6.36%, the impact would be
severe, and "core programme activities affected would include
inspector training and travel, transportation of inspection
equipment, conference services and general operating
expenditure." An increase of only 5.86%, "would produce
negative real growth" and the DG's note includes the comment
that "I cannot responsibly contemplate such a level, given
the severe programme cuts that would be required across the

12. (U) With regard to the positions of other delegations,
South Africa announced at the informals that it could accept
a budget increase of more than 7% as long as ICA increases
were assured. Mexico had the same message, stressing that
ICA must be in the regular budget. Switzerland said it could
accept a 6.5% increase, with the flexibility to go higher.
The Germans reiterated that they could accept a 6% increase,
adding that the Italians had said on behalf of the EU states
that the Europeans could not accept a 7.36% increase.

13. (SBU) It is clear that nothing will happen in the
run-up to the CSP. EC Chairman Kubernat flatly said that,
barring unforeseen developments, the only question is what
day next week would be most appropriate for the Special EC.
The Japanese position on an increase is becoming increasingly
important, and the Japanese delegation did not cite a number
during the budget informals. Not surprisingly, we have heard
different reports of the outcome of the DG's trip to Japan.
The Japanese have been studiously non-committal and merely
emphasized that the DG had ample opportunity to make his
case. The DG believes he got indications of support,
although without a firm number. In any event, the Japanese
delegation has invited the U.S. delegation to a working
dinner on Oct. 17, where the budget will certainly be the
dominant topic.

14. (U) Finally, the DG presented the draft decision
documents regarding retention of the 2001 cash surplus and
the retention of Article IV/V cash received in 2004 for 2003


15. (U) CSP Chairman Djoudi (Algeria) held an Oct. 14
meeting to go over preparations for the upcoming CSP. The

-- The Chairman of CSP-8, decided by the Asian Group, will be
the Ambassador of Malaysia, Her Excellency Dato Noor Farrida
-- The two Vice-Chairmen from each regional group will be
India and Japan (Asia), and Mexico and Guatemala (Latin
America). There were no decisions from the African or
Eastern European Groups. The Western Group Vice-Chairmen
should be the U.S. and Switzerland, but the Spanish were not
there to provide the information.
-- The Chairman of the Committee of the Whole is still be
determined by the African Group.
-- Chairman of the Credentials Committee should be Portugal,
although again the Spanish were not there to provide the
official notification.
-- EC nominees from each group. Asia nominated Pakistan,
Malaysia, Sri Lanka and Iran. The Latin American and
Caribbean Group nominated Panama, Peru, CUBA and Uruguay.
All other groups still need to provide nominations.

16. (U) With regard to a Special Executive Council meeting,
the recommendation from EC Chairman Kubernat was for a
special EC on Monday afternoon (10/20) or Wednesday evening
(10/22). Russia spoke in favor of the Wednesday evening
session. The consensus outcome was to hold the Special EC on
Tuesday afternoon (10/21).

17. (U) Djoudi noted that it would be important to have a
position ready on the ILO decision on former DG Bustani. His
summation of the sentiment among delegations was that the
majority believe the OPCW should handle this as quickly as
possible, while some delegations believe the organization
should take its time. He added that the consensus is on not
opening up the details of Bustani's actions. DG Pfirter
noted that the legal counsel for the OPCW had given three
options: 1) pay the judgment, 2) ask the ILO Administrative
Tribunal to review the decision, addressing the issues of the
jurisdiction as well as the calculation of material damage,
3) appeal the ILO decision to the ICJ.

18. (U) The U.S. del noted that we have no instructions
from Washington at this time. Dutch Ambassador Vogelaar said
the Dutch government supports an appeal to the ICJ, but would
go with the majority view at the CSP. He added that ignoring
the judgment is not an option acceptable to the Dutch.
Vogelaar then floated the idea of informal discussions with
Bustani's attorneys or a representative on the hope that an
arrangement could be made to have Bustnai receive the moral
damages, but accept a reduction on the material damages, as
he has been serving as Brazilian Ambassador to the U.K.
There was no consensus on such an action. Djoudi concluded
by emphasizing that it would not be responsible to simply
leave no recommendation for the CSP.

19. (U) On administrative matters, South Africa asked for
more time to consider the proposed amendments to the Rules of
Procedure of the CSP, and there were no objections. The U.S.
del expressed its support for the proposals, and also made
the point about the benefit of having an amendment to Rule 34
that would allow for each CSP to elect the officers, or at
least the chairman, for the subsequent CSP. The issue was
left for further consideration. Finally, Djoudi provided the
list of NGOs seeking participation in the CSP, and del has
FAXed it to AC/CB. In addition, Djoudi noted the request of
the ICRC to make a statement at the CSP. ACTION REQUEST: Del
would like to know if 1) Washington objects to any of the
NGOs listed and 2) if Washington objects to the ICRC request.


20. (U) The consultants working on RBB are meeting with the
DG, Herb Schulz and others, and, on Oct. 7, provided
interested delegations with a snap-shot of the state of play
at the start of their consultations. The overall timeline is
to have the following outcome for the upcoming budgets:
2005 - predicting performance;
2006 - predicting performance, but still too early to set
2007 - the TS can commit to definitive targets.

21. (U) As for what will happen in the near-term, OPCW
divisions are making proposals on what they believe they
could achieve with different resource levels under the
medium-term plan. These are being consolidated and the
process is now almost at the point where there are decisions
and results adequate to be used in RBB. The specific
divisions involved: inspectors, verification, ICA, external
relations and administration. Work is also being done by
other offices; health and safety, for instance, has also
developed definitions. The results with regard to the
medium-term plan should be ready for the DG to put forth by
the end of the year. The consultant noted that in a minority
of cases, the numbers are there to ensure success. In most
cases, a lot of work needs to be done.

22. (U) The goal is for the 2005 budget, presented in 2004,
to have proposals which will focus on defined results. The
numbers will appear whenever possible, but there will be lots
of qualitiative factors. By the end of 2004, it will be
possible to measure all the results of the project plans.
The 2006 budget will show what was achieved in 2004. By the
2007 budget, there should be definitive targets for the TS.


23. (U) OPCW Staff Council Chairman Gordon Vachon met, at
his request, with Western Group representatives October 10 to
explain that implementation of the CSP's tenure decision, the
DG's one-year contract renewal scheme, and the Host Nation
Headquarters Agreement were posing serious problems for staff
members. Vachon said that while morale "had not hit bottom,"
the staff was feeling "battered." He stressed that they were
concerned not only for themselves, but also for the damaging
financial and operational impact that some of these problems
would have on the OPCW itself.

24. (U) Vachon said there appeared to be a strong legal
argument against moving immediately to implement the CSP
decision to move to an average seven-year tenure for OPCW
staff members. Twelve of the staff members whose contracts
had not been extended had already obtained legal council and
were taking their cases to the ILO Administrative Tribunal,
which would take them up in mid-November, he said. Those
staff members would be replaced by February, and a further 50
contracts were likely to be terminated before the ILOAT
issued its verdicts. If the Tribunal ruled in favor of the
dismissed staff, it would be too late for the OPCW to
re-instate them, so the organization would likely have to pay
financial compensation and penalties. While it could not be
known now how the ILOAT would decide, how many cases would be
affected, or what sums might be awarded in compensation or
damages, the cost to the OPCW could come to millions of
euros. Vachon asked whether this did not argue for
suspending the termination of
personnel contracts until the ILO issued its decisions. The
CTBTO had taken this course as "financially prudent."

25. (U) Apart from financial implications for the
organization and personal disruptions for the staff, Vachon
said that consultants had predicted the tenure decision to
lead to a 5-10% drop in organizational effectiveness, due to
the "lag factor," to vacancies, and to the need to train new
hires. The loss of experienced inspectors who had been on
the job, in many cases, for five years, would be slow to

26. (U) Moving to the one-year contract extension policy,
Vachon questioned the need to switch abruptly to a "3-1-1-1"
system (a three-year contract with one-year renewals), since
most staff members had already been employed for five years,
so a "3-2-1" system would seem to provide sufficient
flexibility. From a management perspective, Vachon argued,
keeping a longer tenure period would also aid recruitment, as
many professionals and technicians would balk at disrupting
their careers for what might prove to be only three years
with the OPCW. Moreover, the rationale for implementing the
change in contract extensions had not been to increase
turnover per se, but to make it possible to release
poorly-performing personnel. Yet those whose contracts were
not being renewed had received a form letter explaining the
decision had been necessary to achieve "turnover of staff."
This entailed severe disruptions for those who suddenly found
that their contracts were not being renewed, such as having
to withdraw children from school in the Netherlands not only
before the end of the year, but in the middle of their term.

27. (U) The OPCW-Host Nation Headquarters Agreement had been
concluded by the first CSP, Vachon recalled, but a number of
unsettled issues continued to present problems for OPCW
staff. These included questions about property tax
exemptions, the VAT threshold, and ID cards for the
dependents and domestic servants of staff members. Vachon
noted that when prompted by the Staff Council, OPCW
management had provided written responses to these and other
questions, promising in some cases to secure "expedited
settlement," but still nothing had been settled. These
issues had now been under discussion for years without
resolution. In response to a query from Ambassador Javits,
Vachon said the Staff Council was not at this time requesting
States Parties to intervene, but added that they were a party
to the agreement, and should presumably take an interest in
its implementation.

28. (U) Ambassador Javits thanked Vachon for his
constructive attitude and said that States Parties could not
fail to appreciate the staff's staying power and commitment
to the organization. He acknowledged that staff turnover
would inevitably impact efficiency, but observed that this
was a normal and temporary situation until a new "culture"
took hold at OPCW. The Ambassador further pointed out that
the tenure decision had been made by the CSP (not the DG, as
was the case at the CTBTO) and that the DG had felt that the
one-year contract extension policy was necessary, at least as
a temporary measure, to begin implementing the tenure policy.

29. (U) Ito sends.