STAFFDEL DISCUSSES LUGAR-SOLHEIM INITIATIVE, HEARS

UNCLAS OSLO 000254

SIPDIS

SIPDIS
SENSITIVE

RAY DALLAND, EUR/NB, CHRISTOPHER WEBSTER, EB/IFD/ODF, STATE
PLEASE PASS TO USTR

E.O. 12958: N/A
TAGS: PREL EAID ENRG ECON KIPR NO
SUBJECT: STAFFDEL DISCUSSES LUGAR-SOLHEIM INITIATIVE, HEARS
PHARMA CONCERNS

REF: OSLO 200 AND PREVIOUS


1. (U) Summary: On March 7-9, Mark Helmke, Senior
Professional Staffer for the Senate Foreign Relations
Committee (SFRC),and long-time aide to former SFRC Chair
Senator Richard Lugar, met with several high-ranking
Norwegian government officials, including International
Development Minister Erik Solheim. Discussions involved a
proposed Lugar-Solheim Development Initiative on Energy
Resources and Anti-Corruption, which is scheduled to be
unveiled during Solheim's forthcoming visit to Washington on
March 20-21. During related meetings, Norwegians stressed
the importance of anti-corruption initiatives, while
welcoming U.S. cooperation on transparency efforts,
particularly in the energy sectors. Helmke was briefed by
Ministry of Petroleum officials on High North energy, carbon
sequestration, and other energy issues. He also met with Eli
Lilly's Norwegian operations head about the threat that
Norway's weak pharmaceutical patent system poses to the
firm's business. Finally, Helmke (a former press adviser)
joined a large reception for reporters and commentators
hosted by the CDA and discussed (mis)perceptions of U.S.
policy in Europe. Senator Lugar is highly regarded in
Norway, especially due to the Nunn-Lugar program. End Summary.

The Initiative's Background
--------------


2. (SBU) According to Jorn Silijeholm, a special adviser at
the MFA, the "Solheim Lugar Initiative" proposal arose out of
the desire by Minister Solheim and Senator Lugar to reinforce
existing international agreements and initiatives concerning
energy and anti-corruption, such as the Extractive Industries
Transparency Initiative (EITI) and the United Nations
Convention Against Corruption (UNCAC). Silijeholm indicated
that Senator Lugar and Minister Solheim sought to back a
politically neutral initiative that links existing programs
and ideas to desired policy outcomes, such as transparency
building and environmental protection. He noted that
Helmke's visit provided an opportunity to brief on Norwegian
"success stories," such as the Oil for Development Program (a
capacity-building initiative involving the Finance, Petroleum
and Environment Ministries that provides assistance to
approximately 20 countries).

Initiatives to be Launched by Press Release in Late March
-------------- --------------


3. (SBU) Helmke met with several officials from various
Norwegian Ministries, including Development, Finance and
Foreign Affairs, and Petroleum, and with Merethe Nergaard,
the Economic Counselor at the Norwegian Embassy in
Washington, in an effort to hammer out a draft Initiative
statement. Helmke told the CDA that Senator Lugar preferred
a broader initiative including energy security as well as
anti-corruption, and worked on Minister Solheim's staff to
iron out the different emphases. (Note: this recognizes
divergent emphases and will stress that this is just the
beginning of a broader cooperation. End Note.) Issues
discussed included Norwegian interagency cooperation, tax
practices, and the Initiative's focus areas. The Initiative
was termed a "political statement by two politicians," a
point of common ground joining divergent political
ideologies. In the end, the parties agreed to launch the
Initiative through a joint press release during Minister
Solheim's visit to Washington, rather than produce a lengthy
statement of principles. The parties emphasized that the
press statement, and other aspects of the Initiative, would
need to be vetted through the Norwegian inter-agency process
before finalization. Helmke indicated he would continue to
consult State and USAID as well.

Solheim Focuses on Bilateral Anti-Corruption Cooperation
-------------- --------------


4. (SBU) On March 9, Helmke, the Charge and Norwegian
officials joined Development Minister Solheim for a working
lunch to discuss the Initiative and related areas of possible
U.S.- Norwegian cooperation. Helmke emphasized that Senator
Lugar sought to highlight the importance of energy issues.
Solheim emphasized that "energy" covers a wide field of
interrelated issues, including anti-corruption, the

environment and international development assistance. Citing
the timeliness of energy discussions, he noted the challenges
presented by emerging powers like India and China and their
consumption of vast amounts of energy resources.


5. (SBU) Solheim stressed the need to address global
environmental and development concerns. The parties agreed
that sharing best practices is an ideal way to meet global
assistance challenges. The CDA stressed the shared values of
Norway and the U.S., particularly within the context of
fighting corruption, and the contribution that Senator Lugar,
whose public image in Norway is very favorable, could make.
The CDA also invited a broader discussion of the ways the
United States executive branch and Norway could work together
on anti-corruption matters.


6. (SBU) Solheim reiterated that tackling anti-corruption
was essential. He pointed out that Nigeria and Angola would,
for example, not need any foreign assistance had both
countries properly invested their energy revenues. He argued
that oil and gas proceeds often end up in international tax
havens. He noted that the gray money leaving Nigeria alone
equaled the entire amount of aid provided to Africa.

Discussions on Energy, High North
--------------


7. (SBU) Helmke also met with high-ranking members of the
Ministry of Petroleum and the MFA's High North section. The
Petroleum officials discussed the GON's commitment to
providing energy sector assistance to developing countries,
Norway's future role as a supplier of liquefied natural gas
to the United States, European energy security, alternative
energy, CO2 sequestration projects, and the forthcoming
merger between the state-controlled Norwegian oil companies
Statoil and Norsk Hydro. Helmke and Petroleum Ministry
officials agreed to try and set up a meeting with Senator
Lugar for Petroleum and Energy Minister Enoksen when he
visits Washington on March 28. The MFA meetings focused on
energy security, High North energy issues and
Norwegian-Russian relations in the High North, including the
risks to the environment from increased Russian oil activity
in the region.

Pharmaceutical Firm Raises Concerns about Weak Patents
-------------- --------------


8. (SBU) Helmke also met with the Managing Director of Eli
Lilly's Norwegian operations about the impact of Norway's
weak pharmaceutical patents on foreign pharmaceutical firms.
Helmke noted that Senator Lugar's staff had raised the issue
with officials accompanying Foreign Minister Stoere to
Washington last week at the behest of several U.S.
pharmaceutical firms. Senator Lugar wrote a follow-up letter
to the Foreign Minister to request assistance in resolving
the problem, a copy of which Helmke later provided to Lilly
and the Embassy. (Note: the Embassy has been working with
U.S. pharmaceutical firms for two years to persuade the GON
to strengthen patent protections. End note.) Lilly's
Managing Director stated that over half the firm's local
revenues are at risk from possible entry of copycat generic
drug manufacturers into the local market. Those revenues are
derived from older drugs that enjoy only "process patent,"
versus stronger "product patent," protection in Norway.
Lilly's Manager explained that Norway adopted a stronger
"product patent" system in 1992, but for drugs covered by the
older regime patent protection is afforded only for their
manufacturing process. Norway could remedy the problem by a
relatively simple regulatory fix. Lilly's Manager cautioned
that should the firm lose one or two patent lawsuits to
generic competitors, it would be compelled to drastically
downsize its Norwegian operations. Helmke pledged to follow
up with colleagues in Senator Lugar's office who were
following the issue.


9. (U) Helmke (a former press adviser) ended his visit at a
large, previously scheduled reception hosted by the CDA for
reporters, commentators, and editors. Helmke was able to
explain the Lugar-Solheim Initiative, other Senator Lugar
priorities, and comment on current events with important
media figures. He offered an experienced, non-administration
view of some common misperceptions about U.S. policy on


issues such as development and climate change. Given Senator
Lugar's popularity in Norway, especially due to the
Nunn-Lugar program, Helmke's ideas were well received. This
was an excellent Public Diplomacy opportunity.


Comment: Anti-Corruption a Fertile Field for Bilateral
Engagement
-------------- --------------


10. (SBU) Comment. The CDA stressed to Helmke that Senator
Lugar's support for an energy/anti-corruption initiative with
Minister Solheim could pay dividends for the bilateral
relationship. Fighting corruption is clearly a source of
common ground. Cooperation on anti-corruption initiatives
and programs would provide another welcome area for positive
engagement in a relationship that is sometimes overshadowed
by public differences on Iraq, Guantanamo, climate change,
and other contentious issues. Norwegians across the
political spectrum hold Senator Lugar in high esteem (once
considered a close runner-up for a Nobel Peace Prize). That
a leading Socialist Left figure like Minister Solheim, whose
political ideology differs markedly from that of the Senator,
would propose such a joint initiative is testament to the
Senator's solid reputation in Norway. Department may wish to
explore areas where State and Senator Lugar agree in order to
combine efforts at collaboration with Norway.


11. (U) Mr. Helmke has not cleared on this cable.
WHITNEY