Identifier
Created
Classification
Origin
04THEHAGUE2526
2004-10-05 14:16:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy The Hague
Cable title:  

CHEMICAL WEAPONS CONVENTION (CWC): WEEKLY WRAP-UP

Tags:  PARM PREL CWC 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.

051416Z Oct 04
UNCLAS SECTION 01 OF 05 THE HAGUE 002526 

SIPDIS

SENSITIVE

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 OCTOBER 1, 2004


This is CWC-116-04.

---------------------------------
SOUTH KOREAN POLITICAL CONSULTANT
---------------------------------

UNCLAS SECTION 01 OF 05 THE HAGUE 002526

SIPDIS

SENSITIVE

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 OCTOBER 1, 2004


This is CWC-116-04.

--------------
SOUTH KOREAN POLITICAL CONSULTANT
--------------


1. (SBU) On October 1, South Korean del rep Park Yong Kyu
informed us that his delegation was recommending to Seoul
that South Korea not/not support a continuation of the
political consultancy for General Chong, who is tasked with
working on universality on the Korean peninsula. The ROK
delegation had come to this conclusion after deciding to make
a determined effort to obtain a permanent senior position in
the Technical Secretariat. The current focus of that effort,
continued Park, is the position of head of the External
Relations Division, headed by Huang Yu (China). Continued
support of Chong's consultancy would weaken the Korean effort
to get the ERD or some other senior position, commented Park,
so the delegation was urging Seoul to drop continuation of
Chong's consultancy. (Note: while the South Korean MOD may
have strong objections, we understand that the ROK delegation
has informed Director-General Pfirter that they are no longer
supporting continuation of Chong's consultancy.)

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


2. (U) All comments provided by Washington were articulated
during the September 29 facilitation and during
pre-consultation discussions with facilitator Gabrielle
Kruger (UK). Kruger indicated all U.S. comments will be
reflected in a subsequent amended format, which will be
distributed at the end of the week. On the procedural side,
Kruger proposed that the deadline for annual submissions
should be 90 days after the beginning of the calendar year,
and clarified that all SPs will be required to submit a
declaration. No delegation commented on these items. The TS
did mention that only 7% of SPs made their submission this
year.


3. (U) Per guidance, Del confirmed that all SPs will have
the right to request each others' declarations. Hassan
Mashhadi, Assistance and Protection Branch, reiterated that
the EC must adopt procedures for dissemination of the
information in whatever format it takes, whether classified
or unclassified. Kruger indicated she would take two actions

in response to this request. First, she would include
instructions and markings on the agreed format reminding
States Parties that the format and information provided are
to be unclassified.


4. (U) Second, procedures will be devised to accommodate
provision and dissemination of classified information, either
in the draft decision document or in EC Report language.
Although no SP commented on this during the consultations,
Brazil approached the Del afterwards to indicate that it was
their belief that a SP could make a classified declaration in
order to protect national security concerns, and that this
information would not be disseminated. Del reiterated that
the declaration is intended to provide transparency and that
all information submitted by a SP should be available to all
other SPs.


5. (U) In the format discussions, Pakistan started the
meeting by disagreeing with the concept of official format
for the declaration, saying that the Convention does not
provide for this. Iran and Brazil seconded this view, while
France, South Africa, Czech Republic, and the U.S. disagreed.
Pakistan then clarified that it is not opposed to the agreed
format, but that SPs should not be legally bound by a
"format." Pakistan suggested that, like industry
declarations where OPCW formats exist but SPs use their own
forms, SPs should have the right to provide Article X
submissions however they please. (NOTE: This argument
probably will be attractive with those who do not support the
format but are unwilling to say so.)


6. (U) Iran had a concern with nearly every open-ended or
"detailed" question in the document, intending to make it
more general. No one supported this view during the
consultation, but on the margins, Russia informed the Del
that it shared the Iranian view on the detail to be provided.
(NOTE: On the open-ended questions, the Iranian
interpretation seemed to be a misunderstanding that the text
required detailed answers rather than leaving it to the SP to
decide how much information to provide. Kruger indicated she
would clarify this with SPs in bilateral conversations.)

--------------
2005 BUDGET - ARTICLE IV/V
--------------


7. (U) Budget consultations on Article IV/V inspections were
held on September 28. There was limited discussion of the
discount factor and the declarations of planned destruction
activities by possessor states. Much of the consultation
focused on the failure of any of the possessor states to pay
Article IV/V contributions in 2004. Thus far in 2004, the TS
has received no payments from possessor states. The U.S.
failure, though the U.S. was never mentioned by name, to make
any payments in 2004 was also discussed and the TS expressed
concern that if the TS does not receive our payment within
the next two weeks, the TS may be forced to curtail certain
activities.


8. (U) The UK delegation began the consultation by asking if
the TS could provide any information on the level of Russian
destruction activities proposed for 2005. The UK del also
asked why future Libyan inspections were not included in the
2005 budget while Albanian inspections were budgeted, despite
the fact that no inspections were envisioned until 2006 in
Albania. The TS responded that they were soliciting updated
plans from possessor states and would then revise the budgets
for inspections accordingly. The TS hopes to do this in
October.


9. (U) The Canadian delegation asked why the discount rate
had been changed from 18.5% to 10%. The TS responded that in
light of 2004 inspection activities a 10% discount would be a
more accurate reflection of the predicted level of
inspections. Inspections in 2004 are expected to be 10.76%
lower than the level proposed by possessor states, well below
the 18.5% used for planning purposes in 2004.


10. (U) Director of Verification, Horst Reeps, noted in his
presentation on budgeting for Article IV/V inspections that
thus far no possessor states have paid their Article IV/V
assessments. Several delegations (Iran, Canada) then
expressed concern that the failure of SP's to pay their
Article IV/V, as well as their overall assessments, may
impact on overall OPCW activities including inspections.
Reeps said that should it become necessary to scale back
activities because of non-payment, the Verification Division
would first limit inspections of storage facilities, then
curtail ICA activities, and as a last resort reduce the
number of Article VI inspections.


11. (U) Herb Schulz, Director for Administration, said that
he was confident that certain SP's (read: U.S.) would make
their payments within two weeks but that with each passing
day he too was becoming increasingly concerned. Schulz added
that using the Working Capital Fund to cover any shortages
was not a viable option as the current financial regulations
mandate that any expenditures made from the fund must be
re-paid to the fund within the same calendar year that they
are expended. Schulz also endorsed the idea of creating a
"currency hedge fund" in which gains from currency
fluctuations could be placed to cover potential future
exchange rate losses. The FRG delegation has been informally
pushing this idea over the last two weeks.


12. (U) The German del noted that it was pleased that
inspection activity was projected to increase by 17% in 2005,
but questioned the 4.3% increase in Chapter 1 activities as
opposed to a greater 5.29% increase in Chapter 2 activities,
especially Administration. The co-facilitator opined that
perhaps the scope for cost savings was less in Admin than in
inspections or verification. The South African delegate
asked how many SSA inspectors there were and whether they
were being utilized in all possessor states. The TS
responded that there were currently 10 SSA inspectors and
that they were serving in all but one (unidentified)
possessor state.

--------------
2005 BUDGET -- FINAL SCHEDULED CONSULTATION
--------------


13. (U) Additional open budget consultations scheduled for
September 28 and 29 were cancelled, as no SPs presented
topics for discussion to the co-facilitator. The
facilitator, as well as several delegations, expressed some
frustration that the TS had not yet provided information
documents on the impact of exchange rate fluctuations as well
as clarifications on the methodologies used to calculate
salary increases.


14. (U) The eighth and final scheduled budget consultation
before the EC took place on September 30. The
co-facilitators went to great pains to ensure that
delegations have had a chance to voice questions and concerns
regarding the proposed 2005 program and budget. The result
has been a number of questions to the TS for clarification
and exchanges that have ensured full transparency for SPs.
The consultation on September 30 generated clearer statements
from delegations. While many stated that they still needed
instructions from capitals, some markers were laid down.
Germany in particular emphasized that it could not agree to
the proposed 4.8% increase. Many other delegations,
including Japan, stressed that the need for cost-saving
measures (calculations on inflation, exchange rate and salary
increases) that they asserted justified a lower overall
increase.


15. (U) The U.S. spoke first and noted that while we still
have some concerns about certain items in the budget, most
notably RBB language, certain administrative costs, and the
methodology used to calculate salary increases, we are
generally supportive of the 4.8% budget increase. Del rep
noted that many of the issues of concern to delegations could
be addressed in the budget decision document and that these
differences should not hold up overall consensus on the
budget. Del rep also urged the TS to provide delegations
with several information papers that have been requested.
Ambassador Javits highlighted the fact that the OPCW is one
of the few IO's in which the U.S. is supporting a budget
increase.


16. (U) The UK delegation said that they generally supported
the U.S. view, but believed there were still some areas in
which the TS could realize some savings in non-program areas
and that an increase slightly lower than 4.8% may be more
appropriate. Austria supported the UK position.


17. (U) Germany said it could not support a 4.8% budget
increase. They noted their satisfaction with the overall
increase in Chapter I activities, but added that they
believed savings still needed to be realized. The three
particular areas of concern for the Germans included the
methodology used to calculate the proposed 3.6% salary
increase for P staff and the 5% increase for G staff. This
issue must be addressed in the budget decision document and
changed in 2006. They also urged the TS to implement the
ABAF recommendation that the same 12-month period, as close
to the time of the adoption of the budget, be used for
calculating exchange rates. The implementation of this
recommendation could result in savings in the 2005 budget,
according to the Germans. They supported the conversion of
the guard force to fixed-term status but opposed any increase
in the authorized fixed-term ceiling of 507 positions. The
Germans concluded by observing that there did not appear to
be significant differences amongst de
legations and that consensus should be attainable.


18. (U) Japan supported the FRG and cited the exchange rate
issue, the inflation index used by the TS, and the salary
increase methodology as particular issues of concern to their
delegation.

19. (U) Iran supported the overall 4.8% increase but added
that they believed ICA funding should be further increased.
The Iranians also said that they would propose some changes
in the core objectives language.


20. (U) Norway said that the key issue was the adequate
provision of resources for verification activities. They did
not state their position on the overall 4.8% increase.


21. (U) China said that while they do have some concerns
with the budget, they generally support it. However, they do
not yet have instructions from Beijing.


22. (U) Italy supported the German position and said it
could not support a 4.8% increase. They also expressed some
reservations about the guard conversion proposal and accused
the TS of being less than forthcoming with information
concerning the methodology used to calculate the proposed
salary increase. The Italians also said that delegations
needed to look more closely at the number of consultants
engaged by the TS.


23. (U) The Dutch supported the UK and German views and
believe further savings are possible.


24. (U) Canada generally supported the 4.8% increase but is
also willing to look at further ideas for savings.


25. (U) South Korea said it is still awaiting instructions,
but is sympathetic to the concerns expressed by Germany.


26. (U) Brazil said it is still not convinced that a 4.8%
increase is necessary and still has concerns about an
increase in Article VI OCPF inspections.


27. (U) Denmark noted that it has no formal instructions,
but generally supports the German view.


28. (U) Deputy DG Hawtin stated that the 4.8% requested
increase would be required if the TS is to carry out the
program proposed by the DG. He also said that it was
important the TS actually receive the cash from SPs. In
response to requests from several delegations for additional
information, he stressed that it was essential that
delegations request specific information and not just
generally ask for additional information. The DDG noted that
the funding budgeted for ICA and verification was adequate to
carry out the activities programmed.


29. (U) The DDG said that it would be problematic for the TS
to convert the 20 security positions from TAC positions to
fixed-term positions and not increase the authorized
fixed-term limit from 507 to 527. He noted that when the
original 507 ceiling was approved in 1997, it was not
envisaged that the security function would be included in the
507 ceiling. The DDG agreed with dels that the salary
increase methodology should be reexamined and noted that the
DG had already promised to do so.


30. (U) The U.S. observed that we would have to reach
consensus on issues such as the number of consultants, the
507 ceiling, etc. but that it would be better to address
issues such as the salary increase methodology and the use of
specific inflation indexes in the report language in order to
move the process further along.


31. (U) Pakistan countered that we could not simply brush
such issues under the carpet and it was important that all
issues raised by other delegations be examined. He said the
TS had not provided adequate information to delegations to

SIPDIS
convince them of the necessity for the budget increase.
(Note: This despite the fact that the Pakistanis have not
attended any budget consultations since July.)

32. (U) Japan and the FRG agreed with the U.S. that many of
the concerns raised during the consultations could be
addressed in the report language, but there were a few key
planning parameters, such as the ABAF exchange rate
calculations and the 507 ceiling, that needed to be addressed
in the 2005 budget.


33. (U) The DDG opined that it would be difficult at this
late date to change the 12 month period used to calculate the
predicted exchange rate. He also noted that the basket of
goods that the OPCW uses is different than those used to
calculate inflation rates in the Netherlands.


34. (U) At the conclusion of the consultation, the
Australian co-facilitator, Gordon Eckersley, suggested that
it would be necessary to agree on an overall budget increase
number before the decision language could be formulated. He
also stated that SPs that have called for changes in the core
objectives had thus far failed to provide the facilitators
with proposed language. He urged delegations with proposed
changes to approach the facilitators as soon as possible.
Eckersley left open the option of additional meetings next
week. Del will follow up with the co-facilitators next week,
as well as push the TS to provide additional information we
had earlier requested.


35. (U) In connection with results-based budgeting, there
have been none of the "drafting sessions" on core precepts,
performance indicators, etc. The proposal to have report
language which emphasizes that the current wording of these
items is not etched in stone, appears to have consensus
(although we anticipate some further discussion of these RBB
components).


36. (U) Javits sends.


SOBEL