CHEMICAL WEAPONS CONVENTION (CWC): WEEKLY WRAP-UP

UNCLAS SECTION 01 OF 04 THE HAGUE 002321

SIPDIS

STATE FOR AC/CB, NP/CBM, VC/CCB, L/ACV, IO/S
SECDEF FOR OSD/ISP
JOINT STAFF FOR DD PMA-A FOR WTC
COMMERCE FOR BIS (GOLDMAN)
NSC FOR JOECK
WINPAC FOR LIEPMAN

E.O. 12958: N/A
TAGS: PARM PREL CWC
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC): WEEKLY WRAP-UP
FOR SEPTEMBER 10, 2004

REF: STATE 191103 (NOTAL)

This is CWC-103-04.

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2005 BUDGET - U.S. CONCERNS
--------------


1. (U) On September 8, Del reps met with Rick Martin, head
of the OPCW's Budget and Finance Branch, and Ali Asghar
Special Advisor on B&F issues, to outline substantive U.S.
requirements outlined in reftel. In response to the
requirements raised, Asghar noted that there is currently
only one "political" consultant (the South Korean) being
funded by the Technical Secretariat. Asghar promised to
check on the prospect of future funding of the position,
observing that at present only the Director General knows
what the prospects are for continued funding of that
position. Asghar and Martin also said they would look into
Verification Information System funding, and Del reps later
got an informal response that it looked as though the VIS
could indeed be funded as a regular item in the OPCW budget
and not/not out of the U.S. voluntary contribution. Asghar
promised to provide a comprehensive list of all Temporary
Assistance Contract (TAC) positions and the rationale for the
positions. Martin and Asghar said the DG had made provisions
for increased OCPF funding in the budget and thus far they
have not heard any objections from SP's on the issue.


2. (U) With regard to the proposed increases in funding for
the DG's travel and hospitality, Asghar noted that the level
of funding being requested reflected the actual expenditures
made in 2004, and is an amount consistent with the budget for
travel and hospitality activities before the end of DG
Bustani's tenure. The large percentage increase is also a
result of the fact that for the first time, the DG's travel
and representation, which had been spread over separate
categories, have been merged into in a single budget item.
Asghar promised to provide a more thorough explanation for
the requested increase in the DG's funds for these two items.
In separate discussions, budget co-facilitator Ian Mundell
(Canada) indicated a personal view that the amounts requested
by the DG for travel and hospitality for 2005 were consistent
with what would be expected of the head of an international
organization.

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2005 BUDGET - TAC SECURITY GUARDS
--------------


3. (U) The first day of the latest round of budget
consultations on September 7 focused on the proposed
conversion of twenty security guards from TAC to fixed-term
employee status, and more generally the overall use of TACs
within the OPCW. There were no strong objections by
delegations to the proposal, though there were several
questions about the cost of the conversion and the impact it
would have on the overall number on fixed-term positions
within the OPCW.


4. (U) Herb Schulz (Director of Administration),Rob Simpson
(head of security) and Asghar clarified that any personnel
converted to fixed-term status would be local hires and would
be hired for a period of three years with an option to extend
their contracts annually thereafter. They would also be
subject to a six-month probationary period and the OPCW
performance appraisal system, but would not be subject to the
tenure policy. The converted employees would be entitled to
the dependency allowance, but not other allowances granted to
international staff. The TS reps emphasized that there is no
guarantee that the guards currently employed as TACs would
all be hired as fixed-term employees and that it expects to
get a more qualified applicant pool for fixed-term positions.

5. (U) The TS also believes that that the guard force will
be more highly motivated and stable as fixed-term employees,
citing the fact that the current contractor often keeps
guards at OPCW for training purposes for only a year before
moving them on to other assignments. They suggested that the
conversion of the positions would also help to protect the
OPCW from any potential legal action from employees who were
held in TAC positions for two years or longer, despite the
fact that the TS's own regulations are that TACs should be
utilized for a maximum of one year in the absence of
compelling circumstances.


6. (U) With regard to the specific questions from
Washington on the numbers provided in the supplemental
Information Paper, Simpson emphasized that the key numbers
are:
-- The 2004 cost for TACs is 830,000 Euros.
-- The 2005 cost if the proposed change is adopted is 851,486
Euros. Schulz clarified that the EUR 38,583 cited in Para 3
of the TS Information Paper #4 is included in the EUR 851,486
figure.
-- The estimated cost of EUR 999,359 in para. 5 of the
Information Paper is the cost of an all-contract guard force,
and is provided for comparison purposes only.


7. (U) Simpson emphasized that this last figure was based on
the fact that there has been much consolidation within the
security services sector in Europe over the last year, noting
that the last time they had discussions with their current
security firm, the firm had asked for an increase of 15%.
Schulz added that most security companies factor in
administrative overhead costs of 30-40% in their contracts.


8. (U) The U.S. asked the TS about the number of TACs and
Special Service Agreement (SSA) personnel employed throughout
the OPCW and the length of time that TACs have served. The TS
said that they would provide us with the number of TACs and
SSA staff for the organization, broken down by
office/division, with comparisons for 2004 and 2005, and with
length of service as a TAC. The TS conceded that some
individuals have been serving in TAC positions for several
years, but that the TS was making a good faith effort to
convert these positions to fixed-term positions when
appropriate. Currently the TS requires TAC employees to take
a contract break short of the one-year window. With regard
to the issue of possible ILO suits and liability by the OPCW
should these TAC personnel not be converted to fixed-term
positions, the topic will be addressed after receiving the TS
information on TACs and SSA staff, and will arise at later
consultations which focus on consultants and General
Temporary Assistance.


9. (U) Several delegations stated that they felt that it
would be necessary for the EC to explicitly approve an
increase in the ceiling on fixed-term positions if the
security guard conversion is to be approved. The TS
responded that in the current 2005 budget request the TS was
only asking for the funding for 482 positions so that an
increase of 20 positions converted from TAC to fixed-term
would only raise the total to 502 positions - below the 507
fixed-term ceiling.

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2005 BUDGET - STAFF SALARY INCREASES
--------------


10. (U) The second day of budget discussions on September 8
focused almost exclusively on the methodology of staff costs
in the 2005 budget. Most delegations found the explanations
offered by the TS of how salary increases were determined to
be somewhat unclear at best. After several attempts by
Asghar to clarify and re-clarify the process, it appears that
the TS (based on a recommendation of the Office of Internal
Oversight) simply took the average of the salary increases
for P staff over the last five years (3.785%) and rounded it
down to 3.6%. Similarly the TS took the five-year average
increase of the GS staff of 4.51% and round it up to 5%. When
asked why 3.785 was rounded down to 3.6 and 4.51 was rounded
up to 5, the TS response was less than clear. Many of the
delegations were confused by the fact that the TS had made
reference to the proposed UN salary increase of 1.88% in the
information paper the TS had provided delegations. In
reality, according to Asghar, the UN 1.88% figure had no
bearing on the salary increases proposed by the TS. The
chart requested by Washington for P and GS base salary
increases over the past five years has been provided, and has
been FAXed to AC/CB.


11. (U) Several delegations then requested that the TS
provide the salaries (including post allowance) denominated
in Euros for the last five years for both P and GS staff.
Delegations also asked for clarification of the post
allowance rates and the methodology for calculating them.
Many delegations, including the U.S., were confused by the
explanation in Para 2 of the information sheet provided by
the TS concerning the merger of a percentage of the post
allowance into the base salary. The Canadian delegation
questioned why OPCW employees, who are all hired to work in
The Hague, receive a Post Adjustment Allowance as part of the
base salary calculation, in the first place. While
delegations were pleased to receive a clarification of the TS
methodology, most WEOG delegations appeared likely to push in
the future for a more transparent and rational methodology
for calculating future salary increases.


12. (U) The number of fixed-term positions at the OPCW arose
again in this facilitation, and the TS clarified that if the
20 security guard positions are converted to fixed-term
positions, they would be "fenced in." That would mean that
these 20 new positions could never be used for anything other
than security positions. (Note: such a distinction may be
critical should delegations return to the DG's request for
position reclassification authority.)


13. (U) In general, the discussions provided delegations
with more information on how the TS has been calculating
salary increases. It was by no means satisfactory. However,
there was no suggestion from delegations on what alternative
calculation method would be preferable. Washington may wish
to consider how it wishes to proceed in addressing this issue
in the budget document. The initial, informal response from
some delegations is to consider including something in the
budget document which notes that the TS should re-assess
whether the salary increase calculation is acceptable, and
leave open what would be a good alternative. Should
Washington have a specific proposal (such as strictly abiding
by the ICSC standard),it may be valuable to float it
informally with the TS outside of the budget facilitations.
In the absence of a specific proposal, the best outcome may
be to highlight the issue for TS consideration and
subsequently make suggestions on what formula they may wish
to use.

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RUSSIA: REEVALUATION OF DESTRUCTION PROGRAM?
--------------


14. (U) There has been discussion in the WEOG regarding an
August 9 Russian News Agency report that Moscow will
substantially increase the amount of funding for CW
destruction, and will shift its focus regarding destruction
facilities. The RNA report indicates that while 175 million
USD was allocated for CW destruction in 2004, the budget will
provide for 433 million USD in 2005. The increases are due
to setbacks faced by the Russian program, as well as the fact
that pledges of financial and technical support from other
countries (the U.S. is the target of the accusation) have,
according to Russian sources, not been kept. As a result,
completion of Shchuch'ye is going slowly and the Russian
priority will be on completing the Maradykovo and Kambarka
destruction facilities.


15. (U) Mark Matthews (U.K.) spoke with a Russian
delegation member who confessed that the delegation had no
more information than what was contained in the article. The
Russian indicated that their understanding is that there is
indeed a reassessment under way in Moscow, but that they had
no details. However they thought the proposed budget
increase for CW destruction was exceptionally high. Ronald
Munch of the German delegation reported that FRG officials in
Moscow had confirmed that there may be some increase, but
certainly not at the level reported by the RNA. The Russians
also informed the Germans that destruction at Shchuch'ye only
would begin in 2008. (Note: WEOG delegations clearly
indicated an interest in any additional insights Washington
may have about the extent of Russian re-evaluation of its
destruction program.)

--------------
LATEST ON RABTA
--------------


16. (U) On September 10, the TS issued three voluminous
documents comprising the Rabta conversion request; the
destruction plans for Rabta 1 and Rabta 2, and the conversion
request itself. These have been DHLd to AC/CB. Issuance of
these documents meets the requirement of the convention that
they be available to delegations at least 30 days prior to
their consideration by the Council. Delegation understands
the combined plan for conversion and verification will be
produced and available before the upcoming Council session,
but with an EC 39 number since the conversion request has not
yet been considered. The cover note to the combined plan
will acknowledge that the conversion request has not yet been
approved, and clarify that the combined plan cannot be
formally considered until the request is approved.


17. (U) Delegation has created a tentative schedule for
meetings on September 21 and 22 with the UK, Italy, and
Libya, to consider our strategy for ensuring success at the
upcoming Council session. In addition, at least one meeting
will be held among U.S., UK, Italy, Libya, Germany, and the
TS, to scrutinize the conversion request with an eye to

SIPDIS
producing a draft corrigendum before the EC. The present
document contains mistakes of varying significance (though
none apparently major) that should be corrected in such a
corrigendum. In particular, most if not all of the items in
the "Other Comments and Need for Clarification" section of
our September 3 inputs still need to be incorporated. In the
short time available to them, the TS focused on including our
"major deficiencies" and generally cleaning up and formatting
the documents prior to their issuance.


18. (U) Delegation continues to have no solid news about
where Russia stands with regard to the technical change
request. Our primary interlocutor with the Russian
delegation, Gennadi Lutay, has been in Moscow, and his
second, Victor Domrachev, reports they have had no
instructions from Moscow so far, though he was expecting it
"any day now." When asked whether Moscow's decision would be
informed or influenced by the DG note, Domrachev indicated
they had not seen it yet and did not know there was one. He
pledged to get a copy and send it to Moscow for
consideration. Delegation will attempt in the next few days
to ascertain whether ignorance of the existence of the DG
note was an isolated instance or a generalized problem that
needs to be corrected. Ambassador Javits will also contact
Russian Ambassador Gevorgian to attempt to generate some
urgency with regard to receiving instructions from Moscow
about how Russia will respond to the technical change.

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ARTICLE X
--------------


19. (U) On September 8, Del reps met with Gabrielle Kruger
(U.K.) facilitator for Article X. Kruger reported that she
had discussed the revised draft format for the annual
reporting of information on national programmes for
protection against CW, and that there had been "no
show-stoppers" so far. She noted that she had been unable to
contact the French delegation. Del will meet with Kruger on
Sep. 20 to go over the proposed U.S. changes to the latest
draft, and hopes to have differences resolved before the next
facilitation on September 29.


20. (U) Javits sends.

SOBEL