UNRWA BEGINS CONSULTATIONS ON GOVERNANCE REFORM

C O N F I D E N T I A L SECTION 01 OF 04 AMMAN 005918

SIPDIS

DEPT FOR IO, NEA AND PRM

E.O. 12958: DECL: 07/15/2014
TAGS: PREF PREL KPAL JO UNRWA
SUBJECT: UNRWA BEGINS CONSULTATIONS ON GOVERNANCE REFORM

REF: A. GENEVA 1643

B. AMMAN 4200

Classified By: CDA David Hale, per 1.5 (b) and (d).


1. (U) This is an action request; see para 13.


2. (SBU) Summary and Action Request: As follow-up to its
June 7-8 conference in Geneva, UNRWA held informal
consultations July 8 in Amman to review governance issues
with key stakeholders: current and incoming Advisory
Commission chairs Japan and Jordan and top donors the U.S.
and European Commission. Echoing positions expressed at the
Geneva conference, all participants -- including UNRWA --
agreed that measures needed to be taken to invigorate UNRWA's
existing governance structure. Jordan said host governments
could not accept new governance structures (e.g., a newly
created Executive Committee) but would be willing to work
within existing structures -- particularly the Advisory
Commission -- to give them more relevance and possibly an
oversight role.


3. (C) Summary and Action Request Continued: Jordan offered
to draft a paper outlining suggested changes to the Advisory
Commission, including function and membership, and solicited
input from UNRWA and major donors. Jordan proposed that this
informal group meet again in late August to review the draft
paper prior to presentation to the Geneva conference "core
group" in early September. Ideally, a field-based working
group on stakeholder relations would then meet over the next
year to finalize plans and strategy for an invigorated
Advisory Commission. Any changes to the Advisory Commission
would require approval from the UN General Assembly.
Membership changes, including the question of Israeli
participation, could be particularly tricky. In order to
protect U.S. interests, we believe the U.S. must play an
active role in any discussions regarding UNRWA's governance
structure. We also believe that a revamped Advisory
Commission, with a broader mandate to oversee UNRWA programs
and a membership that more accurately reflects UNRWA's donor
base, is in U.S. interests. Post requests Department's
guidance on the consultation process proposed by the
Jordanians, as well as changes we would like to see in the
AdComm or other UNRWA stakeholder meetings. End Summary and
Action Request.

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BACKGROUND ON EXISTING GOVERNANCE STRUCTURE
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4. (SBU) As one of the few UN agencies to report directly to
the General Assembly, UNRWA does not have an executive
committee or governing board that meets regularly to review
programs and budgets. It relies instead on four separate and
often completely disconnected meetings to solicit stakeholder
comments on its programs. In New York, the UNGA-mandated
Working Group on Finances meets annually, in September or
October, to review UNRWA's budget. The Working Group's
report is prepared in advance by UNRWA's External Relations
Department and debate is generally limited to quibbles over
wording in the report. The Working Group reports to the
Fourth Committee. Also in New York, UNRWA holds an annual
pledging conference in early December, a largely ceremonial
event UNRWA External Relations Director Andrew Whitley
acknowledged is of little use, particularly as the timing
does not match the budget cycle of UNRWA's largest donors.


5. (SBU) In Amman, site of UNRWA Headquarters, the agency
holds annual meetings of its UNGA-mandated Advisory
Commission (AdComm) and semi-annual meetings of Major Donors
and Host Governments (MDM). Neither body produces a written
report or agreed objectives for the agency and they have no
formal role in reviewing UNRWA programs or budgets. The
AdComm's only written product is an annual letter to the
Commissioner General that comments on his draft report to the
General Assembly. Like the Working Group on Finance report,
the AdComm's letter is prepared in advance by UNRWA's
External Relations Department and debate is generally limited
to the letter's wording. In recent years, debate has
centered over how strongly the letter should criticize
Israeli actions in the West Bank and Gaza. The AdComm was
established in 1949 by UNGA Resolution 302; membership also
was established by UNGA resolution and currently includes:
Belgium, Egypt, France, Japan, Jordan, Lebanon, Syria,
Turkey, the U.K., the U.S. and the PLO, as an observer.
Changes to the composition and mandate of the AdComm require
an UNGA resolution.

6. (U) UNRWA's semi-annual MDM has no legislated mandate or
membership; it simply grew out of stakeholder desire for
greater information on and discussion of UNRWA programs and
budgets. While UNRWA presents its budgets and provides
updates on programs, there is very little debate and no
platform for donors or host governments to make concrete
proposals. The MDM in recent years has met in September
(just prior to the annual AdComm meeting) and in May.
European donors have urged UNRWA to change the meeting to
just one large MDM per year, with more regular, technical
briefings on budgets and key issues, such as the agency's
emergency programs in the West Bank and Gaza. Participation
in the MDM is limited to host governments (Jordan, Syria,
Lebanon),Egypt, donors who contribute at least USD 1 million
to UNRWA's General Fund programs and the PLO, as observer.
The number of participants in recent years has hovered around

20. UNRWA also holds semi-annual informal donor briefings on
an ad hoc basis, focused on urgent humanitarian needs or more
routine technical topics, such as food aid or shelter
rehabilitation.

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GENEVA CONFERENCE PROMPTS REVIEW
OF GOVERNANCE STRUCTURE
--------------


7. (SBU) Noting that participants in UNRWA's June 7-8 Geneva
conference had called for the "reinvigoration" of UNRWA's
governance structure, External Relations Director Andrew
Whitley invited key stakeholders -- current and incoming
AdComm Chairs Japan and Jordan plus top donors the U.S. and
EC -- to a July 8 meeting in Amman to review existing
governance structures and identify next steps. All
participants -- including Whitley and UNRWA Deputy ComGen
Karen AbuZayd -- agreed that measures needed to be taken to
improve the way UNRWA interacts with its stakeholders. GOJ
Department of Palestinian Affairs Director General Abdulkarim
AbulHaija responded that host governments would not accept
new governance structures (e.g., a newly created Executive
Committee or Governing Board) but would be willing to work
within existing structures to give them more relevance and
possibly an oversight role for UNRWA programs and budgets.
AbulHaija added that the Advisory Commission, which recently
has played virtually no role in the agency's management,
would be an appropriate vehicle for reform.


8. (SBU) As incoming AdComm chair, Jordan offered to draft a
paper outlining suggested changes to the Commission,
including function and membership, and solicited input from
UNRWA and major donors. Jordan's initial ideas for reform
included more regular meetings of the AdComm in Amman, to
review programs, budgets and special projects. The AdComm
could also prepare written recommendations to UNRWA. Jordan
proposed that this informal group -- Jordan, Japan, the U.S.
and EC -- meet again in late August to review the draft paper
prior to presentation to the broader "core group" of UNRWA
stakeholders in early September. (UNRWA had promised to hold
this "core group" meeting as the first formal follow-up to
the Geneva conference. See ref a.)

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ADVISORY OR OVERSIGHT ROLE FOR ADCOMM?
--------------


9. (C) While welcoming Jordan's leadership offer, Whitley
noted that stakeholders and UNRWA needed to reach consensus
on the appropriate role for the Advisory Commission.
Asserting that UN Resolution 302 empowered the AdComm only to
"advise" the UNRWA Commissioner General, Whitley said that
UNRWA ComGen Peter Hansen interpreted the AdComm's mandate
very narrowly. An advisory role is welcomed by Hansen, but
an oversight role is not. According to Whitley, Hansen has
further argued that any change in the AdComm's function would
require a new UNGA resolution. AbulHaija and refcoord
separately questioned Hansen's assertion. Other UN
resolutions refer to the AdComm's role in developing plans
for the organization and administration of the agency, while
recent public UNRWA documents state that the Advisory
Commission's mandate is to "review" UNRWA programs and
activities. A more activist AdComm -- with a membership that
includes UNRWA's largest donors -- would better serve UNRWA
and stakeholder interests by conducting a critical review of
UNRWA programs and priorities and thereby establishing better
donor buy-in and support for UNRWA programs. AbulHaija, ECHO
Representative Robert Watkins and refcoord noted that a more
activist AdComm would require a membership that reflects
UNRWA's current donor base. AdComm members Belgium, Egypt,
France and Turkey play very little role in UNRWA affairs,
while major donors such as Sweden, Norway, the Netherlands
and the European Commission have no seat at the AdComm table.

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CRITERIA FOR MEMBERSHIP IN REVAMPED ADCOMM
--------------


10. (C) Whitley and AbuZayd agreed that a "reinvigorated"
AdComm would require new membership but questioned what
criteria would be established to determine membership. All
meeting participants agreed that the refugee-hosting
countries -- Jordan, Syria and Lebanon, as well as the PLO
(representing the PA's role as refugee hosting authority in
the West Bank and Gaza) should be included. For the donors,
financial criteria should be established, some sort of
baseline contribution to the agency's programs. Refcoord
argued that only contributors to the agency's General Fund
programs should be considered, as many of the new Arab donors
contributed only to UNRWA's emergency appeals and refused to
support the agency's regular budget. AbuZayd and Whitley
agreed, noting that Arab support for UNRWA was tied largely
to recent crises in the West Bank and Gaza. Whitley then
asked what sort of financial basis should be used to
determine AdComm membership for donors; a baseline dollar
amount or membership in the "top five" donors? Based on 2003
cash contributions to the General Fund, top donors giving
more than USD 10 million were: the U.S., European Commission,
United Kingdom, Sweden, Norway and the Netherlands. Other
major donors in the USD 5-10 million range were: Germany,
Denmark, Canada and Switzerland.


11. (C) Refcoord cautioned that membership could be the most
difficult question of AdComm reform. Current members may not
be interested in giving up their seats, while opening the
body to new members could also prove difficult. Israel
expressed interest in participating in the Geneva conference,
arguing that it has significant interests in UNRWA's
operations. The U.S. is committed to promoting Israeli
participation in international bodies, yet we also understand
that to be effective, the AdComm must remain apolitical.
Before proceeding with more public proposals for AdComm
reform, this small group must first think carefully about its
reform objectives and how to proceed. A field-based group
also must obtain guidance from capitals before moving ahead
on more substantive discussions.

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THINKING ABOUT THE WAY AHEAD
--------------


12. (SBU) Whitley proposed that an interested group of 10-12
countries form a working group on stakeholder relations that
would meet over the next year to finalize reform proposals
and develop a strategy for obtaining any necessary changes to
the AdComm's mandate and structure in the General Assembly.
Whitley added that the process could be completed as part of
or, alternatively, in complement to the EC-chaired Working
Group that prepared the Geneva Conference's workshop on
management and resource mobilization. While the EC had
agreed to call a post-conference working group meeting before
September, it was not clear that it would do so. Whitley
proposed that the working group include host governments
Jordan, Syria and Lebanon, as well as the PLO; on the donor
side, Whitley proposed that the top five donors -- the U.S.,
EC, U.K., Sweden and Norway -- be invited to participate, as
well as Geneva conference chair (and management reform
advocate) Switzerland. Participants agreed that this group
was a logical choice and asked Whitley to seek those
countries' views on governance reform.

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COMMENT
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13. (C) UNRWA is in dire need of a more formalized method of
interaction with its key stakeholders. Under the existing,
fractured system, UNRWA is able to set programs, priorities
and budgets without any real consultations with donors. The
result has been years of underfunded budgets and, in more
recent years, hugely expensive emergency programs in the West
Bank and Gaza that also have gone severely underfunded. At
the same time that UNRWA faces these severe budget
shortfalls, it also is embarking on an expensive program --
the Medium Term Plan -- in which it seeks over USD 1 billion
over five years to make up for years of chronic underfunding
and introduce new technologies in its core health and
education programs (ref b). Without a systematic way of
setting priorities and budgets, UNRWA's programs and
financial needs have ballooned over the years to an
unrealistic USD 750 million per year. UNRWA's poor approach
to management -- promoting unfunded mandates -- contributes
to the growing sense of frustration among the region's 4.1
million Palestinian refugees. A more formalized system of
setting priorities with key stakeholders would be a first
step toward rationalizing budgets and refugees' expectations.
A revamped Advisory Commission, with a broader mandate to
oversee UNRWA programs and a membership that matches UNRWA's
donor base, could play a key role in this process. In order
to protect U.S. interests, the U.S. must play an active role
in any discussions regarding UNRWA's governance structure.
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ACTION REQUEST
--------------


14. (SBU) Post requests Department's guidance on the working
group process outlined by Jordan and UNRWA, particularly the
role the U.S. would be prepared to play in such a working
group. We also seek guidance on Department's views on the
efficacy of the existing governance structure and U.S.
willingness to consider changes to the AdComm and the MDM,
including membership. L's views on the mandate of the AdComm,
as spelled out in UN Resolution 302 of 1949, also would be
appreciated.
HALE