CHEMICAL WEAPONS CONVENTION (CWC) - SCENESETTER

UNCLAS SECTION 01 OF 06 THE HAGUE 000585

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 CHUPA
WINPAC FOR LIEPMAN

E.O. 12958: N/A
TAGS: PARM PREL CWC
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC) - SCENESETTER
FOR THE 36TH EXECUTIVE COUNCIL

This is CWC-28-04.

--------------
SUMMARY
--------------


1. (SBU) The accession of Libya to the OPCW undoubtedly
will be the highlight of the March 23-26 Executive Council
session. The presence of the Libyan Ambassador also provides
an opportunity to emphasize the importance of the OPCW
tackling new challenges, and having the financial and
administrative base to handle those new tasks. Indeed, we
anticipate administrative and financial questions (under
Agenda Item 14) will play a key role in EC-36, ranging from
the impact of Libyan accession on OPCW operations, to the
implementation of results-based budgeting, which may be the
most significant goal for the organization this year. We
should use the EC to prod the Technical Secretariat and
States Parties to pursue implementation of the Article VII
and universality action plans, and resolve some industry
issues which appear ripe for decision. End Summary.

--------------
LIBYA
--------------


2. (SBU) Director-General Pfirter utilized the March 5
presentation of the Libyan declaration to generate
substantial press coverage of the OPCW. While it is
questionable whether the presence of the Libyan Ambassador at
EC-36 on March 23-26 could generate similar press interest,
Libya will be the focus of attention among the States
Parties. For example, it is a good bet that a number of SPs
are pouring over the Libyan declaration for any indication of
support that had been provided from overseas firms for the
Libyan CW program.


3. (SBU) In addition, there has been a general concern about
whether the extra activity caused by Libyan accession would
lead to operational difficulties for the TS. Some of the
discussion is on whether industry inspections may suffer as
resources are devoted to Libya. And some senior TS staff are
attempting to use Libya as an excuse to put on hold
implementation of the tenure policy. So far, the DG has held
firm on not halting implementation of tenure, and the general
message from the DG and Deputy DG Hawtin has been that
additional Libyan requirements this year are manageable,
though some amendments to TS activities may be necessary.


4. (U) As for the rest of the EC-36 session, the following
items are addressed as included on the annotated agenda
(EC-36/INF.2/Rev.1, dated March 5 2004):

--------------
AGENDA ITEM THREE: DG STATEMENT
--------------


5. (U) We know the DG will report on the state of OPCW
activities regarding Libya, including the destruction of
unfilled bombs, as well as the issue of resource
implications. We will provide the text of his statement when
it becomes available.

--------------
AGENDA ITEM FOUR: GENERAL DEBATE
--------------


6. (U) We will provide a draft statement for Ambassador
Javits to AC/CB for Washington's consideration.

-------------- --------------
AGENDA ITEM FIVE: STATUS OF IMPLEMENTATION OF THE CONVENTION
-------------- --------------


7. (SBU) Implementation of the universality action plan
(item 5.1) has deteriorated into a discussion over process.
The question revolves around whether a facilitator is needed,
and, if so, whether Consuelo Femenia (Spain) should continue
in that role. Huang Yu, External Relations Director, has the
TS lead on this issue and is expected to provide a report on

SIPDIS
the status of implementation. We will forward it when it is
available. We do not believe the U.S. has a particular
interest in how the issue of a facilitator is resolved.
Instead, our interest is in prodding the TS and SPs to do
more on this action plan.


8. (SBU) A report on implementation of the confidentiality
regime is noted under 5.2 (EC-36/DG.9, dated February 11,
2004). Item 5.3 involves proposed amendments to the OPCW
policy on confidentiality (EC-36/DEC/CRP.2, dated December
11, 2003). The absence of a facilitator for this issue has
complicated consideration of the proposed changes.
Informally, the TS has indicated to Del that the proposals
reflect the current TS practices.


9. (U) The EC is also requested to note a report
(EC-36/DG.5/Rev.1, dated February 17, 2004) on readiness for
a challenge inspection (item 5.4).

--------------
AGENDA ITEM SIX: ARTICLE VII
--------------


10. (SBU) The report on the status of implementation
(EC-36/DG.16, dated March 4, 2004) is frankly disappointing.
Almost no progress has been made since the DG's September
2003 progress report despite the approval of the Action Plan
during the November 2003 Conference of States Parties. Only
ten States Parties provided the TS with information required
under the Action Plan regarding assistance States Parties
needed or assistance they could offer by the February 1, 2004
deadline set by the TS or the March 1 deadline set by the
Action Plan. This lack of response adds to our concern
regarding the level of support States Parties have for the
action plan. One problem is communication: a number of
delegations report that they never received the TS Note
Verbale; reportedly this includes WEOG members as well as
States in regions known for problematic communications
between member states and the TS.


11. (SBU) The facilitator, Mark Matthews (U.K.),has
informed us that while it will be important to make the case
at the EC that more activity is required to implement the
action plan, it might be a tactical error to make too much of
that point this early in the process. Whatever the merits of
those arguments, we share his general point that it would be
beneficial for the U.S. to emphasize its support for full
implementation of the Article VII action plan.

--------------
AGENDA ITEM SEVEN: DESTRUCTION OF CW
--------------


12. (SBU) The U.S. detailed plans for verification of
destruction at Aberdeen, Pine Bluff and Dugway are covered
under this agenda item. There is also a notation under 7.2
of the requirement for States Parties that have requested
extension of destruction deadlines (U.S., Russia and a State
Party) to provide a report on the status of their plans and
implementation. Finally, the plan for verification of
destruction of unfilled bombs in Libya is noted in EC-36/S/6,
dated February 24, 2004, with the TS to report to the EC on
these destruction activities.

-------------- --------------
AGENDA ITEM EIGHT: DESTRUCTION/CONVERSION OF CWPFS
-------------- --------------


13. (U) The sub-items are as follows:
-- 8.1 covers the combined plan for the VX production
facility at Novocheboksarsk (EC-32/DG.8, dated February 19,
2003 with the draft decision EC-32/DEC/CRP.8, dated March 11,
2003).
-- 8.2 and 8.3 cover Pine Bluff.
-- 8.4 covers the combined plan for the Lewisite production
facility at Dzerzhinsk (EC-36/DG.11, dated February 11, 2004
and the draft decision EC-36/DEC/CRP.8, dated February 11,
2004).
-- 8.5 covers the DF Production facility at Volgograd
(EC-34/DG.1, dated June 4, 2003).
-- 8.6 covers changes at the facility for non-chemical parts
of chemical munitions at Volgograd (EC-34/DG.3*, dated June
10, 2003).
-- 8.7 covers the Russian changes on the chloreother
production facility at Novocheboksarsk (EC-36/DG.2, dated 19
January 2004).
-- 8.8 notes a DG report on CWPFs where conversion is in
progress, and of progress at such facilities (EC-36/R/S/1,
dated January 30, 2004).

--------------
AGENDA ITEM NINE: FACILITY AGREEMENTS
--------------


14. (U) The sub-items are as follows:
--9.1 covers the Belgian facility agreement (EC-31/DEC/CRP.1,
dated November 11, 2002).
--9.2 covers Aberdeen.
--9.3 covers Gorny and the corrigendum (EC-35/DEC/CRP.1,
dated September 23, 2003, and Corr. 1, dated March 1, 2004).
--9.4 covers a Spanish facility agreement (EC-36/DEC/CRP.1*,
dated November 5, 2003).
--9.5 covers a Slovak facility agreement (EC-36/P/DEC/CRP.2,
dated January 22, 2004).
--9.6 covers Pine Bluff.
--9.7 covers Dugway.
--9.8 covers two U.S. facility agreements for Schedul 1
facilities.
--9.9 covers modifications to five U.S. facility agreements
for CWPFs.
--9.10 covers five U.S. facility agreements for CW
destruction facilities.

--------------
AGENDA ITEM TEN: INDUSTRY ISSUES
--------------


15. (U) States Parties will have several elements to
consider during EC-36 related to industry issues. In terms
of decision documents, captive use and clarification requests
are likely candidates, but discussions during the industry
cluster are continuing. Facilitators for clarification
requests, transfer reconciliation, facility agreements, and
the handbook on chemicals are also anticipated to table EC
report language, as detailed below.


16. (U) Regarding captive use, as of March 10, the Indian
delegation continues to lack guidance to join the consensus
on the Schedule 2/3 decision text, but assures States Parties
that they will have guidance by EC-36. However, during
discussions on captive use on March 10, the Indian delegation
attempted to reopen discussion on the issue of definition of
transient intermediates and their exclusion from the Schedule
2/3 decision text. Indian technical representatives assured
us that they agree with the text, as written. However,
Indian delegates informed us that the text is with their
industry and legal reviewers and that the text is still under
review. We anticipate the will table the decision for
adoption at EC-36 in the hopes that the Indian delegation
will consider the text favorably.


17. (U) Regarding clarification requests, although
discussions on this issue have not yet taken place during the
industry intersessionals, bilateral discussions indicate that
a consensus is possible on the decision text. With a few
non-substantive changes requested by the German and Indian
delegations, the text should be accepted and ready for
adoption at EC-36.


18. (U) Facilitators for facility agreements will table
EC report language to recommend the TS be more flexible in
determining whether or not to pursue facility agreements
during Schedule 2 inspections, taking into account plant
complexity, flexibility and frequency of inspection. The
text provided to us in draft form is as follows: "The
Council requested the Secretariat to apply, on a case by case
basis, more flexibility regarding the necessity to conclude
Schedule 2 facility agreements, taking into consideration the
information available through its verification activities and
the interest of the Inspected State Party involved. The
Council expects that this will lead to a noticeable reduction
in the overall number of Schedule 2 facility agreements which
are required to be negotiated between the Inspected States
Parties and the Secretariat and brought before the Council
for approval. The Council noted that this approach does not
deprive either the Secretariat or the Inspected State Party
of their roles with respect to finding an agreement on the
need for a given Schedule 2 facility agreement in accordance
with the provisions of the Convention."


19. (U) On the issue of clarification requests in
relation to transfer reconciliation, the facilitator
anticipates tabling EC report language to summarize the last
round of discussions held during the February industry
intersessionals, as follows: "The Executive Council noted
(insert document reference of TS Clarification Request
report). The Council considered that the Technical
Secretariat efforts to monitor and seek to resolve

SIPDIS
significant discrepancies in declarations of import/export
Aggregate National Data (AND) were useful and should be
continued. Council members urged the Technical Secretariat
(TS) to continue its efforts to streamline the clarification
request process. In particular, the Council encouraged the
TS to focus its efforts on these discrepancies where both the

SIPDIS
relative mismatch between import and export data and the
absolute amount of material involved in the mismatch are
significant in terms of the object and purpose of the
Convention, and suggested that the relevant thresholds for
production declarations were good indicators of amounts that
could be considered "significant." Council members agreed
the TS requires sufficient time to implement these new
analytical procedures and that such efficiencies will better
enable the TS to identify trends and anomalies which pose a
risk to the object and purpose of the Convention, and were
mindful that the harmonizing effects of C-7/DEC.14 would be
seen for the first time in declaration of past activity for

2003. Therefore, the Council decided to return to this issue
at an appropriate time to evaluate whether further
efficiencies to maximize efforts to seek clarification for
deviations contrary to the object and purpose of the
Convention, while minimizing the administrative burdens both
on the TS and States Parties, as necessary."


20. (U) The facilitator for the discussion on handbook on
chemicals also is anticipated to table EC report language to
require the TS to "mark" Schedule 2/3 chemicals in the
declaration handbook that have been declared since entry into
force of the Convention. Such a marking process, indicated
by an "*" next to the chemical name, would assist States
Parties in identifying those chemicals most normally expected
to appear in trade. The text being considered is as follows:
"The Executive Council took the view that all scheduled
chemicals which have been declared by State Parties since EIF
should be in the "Handbook on Chemicals". In order to make
it easier for National Authorities to identify the most
commonly used Schedule 2 and 3 Chemicals which are declared
above the relevant thresholds the should be appropriately
marked. The EC therefore requested the Technical Secretariat
to mark the inclusion of chemicals in future versions of the
"Handbook on Chemicals" through an additional column in all
electronic formats and hardcopies. The heading of this
column is "declared above declaration thresholds". The TS is
further requested to update this information annually. The
EC emphasized that marking of declared chemicals does not
indicate that other chemicals which are not marked, not yet
included or not yet synthesized are of greater or lesser
significance for the object and purpose of the Convention."

--------------
AGENDA ITEM ELEVEN: APPROVED EQUIPMENT
--------------


21. (U) Sub-item 11.1 covers a proposed item under
EC-35/DG.1, dated October 10, 2003 and the draft decision
(EC-35/DEC/CRP.8, dated November 26, 2003). Sub-item 11.2
requests approval of revisions for specifications of two
items (EC-36/DEC/CRP.3, dated January 9, 2004).
--------------
AGENDA ITEM TWELVE: NEW VALIDATED DATA
--------------

22. (U) The EC is requested to consider the DG's note on
new validated data for inclusion in the OPCW Central
Analytical Database (EC-36/DG.6, dated February 5, 2004 and
draft decision EC-36/DEC/CRP.6, dated February 5, 2004).

--------------
AGENDA ITEM THIRTEEN: ABAF REPORT
--------------


23. (U) The report of the 15th Session of the AFAB is
available at EC-36/DG.8, dated February 9, 2004.

--------------
AGENDA ITEM FOURTEEN: FINANCIAL ISSUES
--------------


24. (SBU) Members of the U.S. delegation as well as the
other major contributors met on March 4 with DDG Hawtin and
raised a number of issues which are covered under this agenda
item, including insurance (14.2),reorganization of the
travel-management function (14.4),and the provident fund
management board (14.5). Unfortunately, the response has
been less than stellar, and the report on travel management
(EC-36/DG.14, dated March 4, 2004) simply noted that the TS
is examining this issue. Effective management of resources
is an item of increasing importance to other delegations,
particularly those who make the largest contributions.
Whether in the formal EC sessions or in side-bar
conversations, the concern of the U.S. in particular on this
issue needs to be driven home to the TS.


25. (SBU) To be fair, one of the responses from the DDG to
the contributors was the pitch for the DG to have more
operational flexibility in order to achieve efficiencies.
The Del has supported that point and continues to see the
merits of granting the DG such authority. Under 14.6
(EC-36/DG.15, dated March 4, 2004),the DG will notify the EC
of transfers of appropriated funds within or between budget
programs. We will press the DDG to provide a list of
specific proposals to give the DG more leeway for
Washington's consideration.


26. (SBU) Finally, the DG will report on the status of the
implementation of results-based budgeting, which may well be
the most challenging and important task for the organization
this year. The March 2-3 RBB workshop may have been tedious,
but it was a success as fundamental objections to RBB appear
to have dissipated among delegations. That, however, is a
far cry from accomplishing the extensive amount of detailed
work that must be completed on performance indicators for an
RBB-based budget. The DG publicly reiterated that the 2005
budget will be provided in an RBB format, and we should
ensure that there is no deviation from that goal. However,
we are under no illusions about the extensive amount of work
that will need to be undertaken by the TS in the coming
months, and the complications that may face budget
facilitators Ian Mundell (Canada) and Gordon Eckersley
(Australia),should the process be substantially, but not
fully, completed as budget deliberations head into the
end-game.

-------------- --
AGENDA ITEM FIFTEEN: OIO AND EXTERNAL AUDITOR'S
RECOMMENDATIONS
-------------- --


27. (U) The reports are contained in EC-36/DG.7, dated
February 9, 2004 and EC-36/S/3, dated February 11, 2004. The
results of a March 8 Geneva Group meeting on the OIO and
External Auditor will be reported septel, but the general
consensus was that action on concrete proposals regarding
these two bodies should not be initiated at this EC, but at
the June EC.

-------------- --------------
AGENDA ITEM SIXTEEN: ELECTION OF EC CHAIRMAN AND VICE CHAIRMEN
-------------- --------------


28. (U) We understand that the Ambassador of Peru will be
the Latin American candidate to assume the EC Chairmanship,
and that all that remains is the official decision.

--------------
AGENDA ITEM SEVENTEEN: ANY OTHER BUSINESS
--------------


29. (SBU) The minor point under this item is the list of
SAB recommendations (EC-36/2, dated February 16, 2004). The
critical point under this agenda item is the DG's report on
the status of the implementation of tenure, which has become
the overriding issue among TS personnel. As we have
informally notified Washington, the second round of
separations under tenure has seriously affected staff morale.
As a result, it is predictable that senior TS staff would
try to use work regarding Libya to try to freeze the tenure
policy. Such efforts must certainly be rejected, and the DG
has remained solid on this point so far. However, we note
that the TS is trying to come up with measures that can ease
the transition of staff who have been given separation
notices, and we believe such measures warrant full support
from Washington.


30. (U) Ito sends.
SOBEL