RFG: SENIOR RESOURCE BOARD APRIL 19 & 20 PLENARY

C O N F I D E N T I A L USNATO 000250

SIPDIS

SIPDIS

STATE FOR EUR-RPM (MONAHAN)
DEFENSE FOR OASD/ISA (EURO-NATO); USDAT&L/DUSD-IE (VAUGHT);
OASD/NII (HANSEN); EUCOM J4-EN ENGINEER DIV (MC) (CAPT
JACKSON); CENTCOM-J4-E (COL GREY); JOINT STAFF J-4 (MR
MACKIE),J-5 (LTC SEAMON)

E.O. 12958: DECL: 01/01/2011
TAGS: AORC MARR NATO
SUBJECT: RFG: SENIOR RESOURCE BOARD APRIL 19 & 20 PLENARY
MEETING

REF: A. SRB-A(2007)0004 AND SRB-A(2007)0006


B. MBC-M(2006)0220

C. PO(2005)0098

D. SRB-N(2005)0010-ADD12

E. SG(2006)0839+AS1

F. SRB-N(2007)0019

G. SRB-N(2007)0013

H. C-M(2007)0010

I. SRB-WP(2007)0001

J. IMSM-0107-2007

K. SRB-D(2007)0004

L. MC 0541 (FINAL)

M. SRB-N(2007)0024

Classified By: ADEFAD CLARENCE JUHL. REASON 1.4.(B/D)


1. (C) The Senior Resource Board (SRB),meeting in Brussels
on April 19 and 20, will consider the International Staff
(IS) draft of the 2008 to 2012 Medium Term Resource Plan and
endorsement of the capability package (CP) for logistics
information system services. The Board will hear status
reports on the development of the intelligence, surveillance,
and reconnaissance (ISR) for the International Security
Assistance Force (ISAF) operations; the resource aspects of
the current operations in Afghanistan, Iraq, Kosovo, Darfur
and the Mediterranean; and the establishment of the new NATO
Office of Resources (NOR). The Board will hear status
reports and consider the way ahead for any outstanding work
for: Missile Defense Feasibility Study, the funding of
transportation for short-notice deployment of the NATO
Response Force (NRF),funding implications of NATO
participation in humanitarian operations, the NATO Command
Structure (NCS) peacetime manning review, the interim
evaluation of the financial and force generation impact of
the expansion of common funding eligibility for operations,
the economic benefit assessment for resource burdensharing,
and the Air Command and Control System (ACCS) implementation.
The Board will also consider in restricted session the
election of the new Chairman of the Board. Unless otherwise
directed by OOB April 19, Mission will take the positions
detailed herein. END SUMMARY AND REQUEST FOR GUIDANCE.


2. (C) Mission has reviewed reference documents for the
April 19 and 20 SRB meetings (Ref A agenda) and recommends
the following U.S. positions:

RESOURCE PLANNING AND POLICY ISSUES

ITEM I. CRISIS RESPONSE OPERATIONS AND MISSIONS RESOURCE
UPDATES


A. ISAF: The Board will receive status reports from
the NATO Military Authorities (NMAs) and the Chairmen of the
implementing committees (Infrastructure and Military Budget)
regarding the force generation process, investment, O and M,
and outsourcing for the Afghanistan operation. The
International Military Staff (IMS) representative will report
on the Military Committee (MC) deliberations of the ISR
Minimum Military Requirement (MMR) and whether outsourcing
should be considered. Current estimates for ISR are 28 MEURO
per year if provided by a lead nation and 93.2 MEURO per
year, if outsourced (Ref B). IAW Ref C, the SRB must approve
any outsourcing. SHAPE will report on the status of
outsourcing at the Kandahar Aerial Port of Disembarkation
(APOD) to enable NATO to assume responsibility for the APOD
this summer, the accommodations for non-Crisis Establishment
personnel (contractors, agencies, and coalition) within the
ISAF compound at Kabul, and communications initiatives.
Mission recommends supporting outsourcing of the ISR
capability, if required and noting the updates.


B. BALKANS: The Board will receive status reports from
the NMAs and the Chairmen of the implementing committees on
common funded investment, O and M, and outsourcing for the
Balkans' operations. SHAPE will provide a specific report on
the results of the Camp Nothing Hill, Kosovo audit and the
periodic mission review. Mission will note the updates.


C. NATO TRAINING MISSION IRAQ (NTM-I): The Board will
receive status reports on the force generation process,
common-funded investment and O and M, and trust funding, from
the NMAs, the IS, and the Chairmen of the implementing
committees. SHAPE will report on the contract guard service
requirements and the resource development plan which is
expected to include infrastructure, CIS and budgetary
requirement projections for the next 12 months and forecasts
for the next three years. The Board will note an IS trust
fund report that includes the U.S. pledged and provided funds
of 390 KEURO ($500K) in 2005 and 794.16 KEURO ($1,000,000) in
2006 (Ref D). Mission recommends supporting an extension of
the contract guard service, if necessary, and noting the
updates.


D. NATO LOGISTICAL SUPPORT TO THE AFRICAN UNION MISSION
IN SUDAN (AMIS). The Board will hear briefings from SHAPE on
mission progress and potential mission expansion, and from
the Chairmen of the implementing committees on common funded
expenditures. Mission is unaware of any funding issues and
will note the briefings.


E. ARTICLE 5 OPERATION - ACTIVE ENDEAVOUR: The Board
will receive oral status reports from the NMAs on the ongoing
ACTIVE ENDEAVOUR operation. Minimal common funding is used
to support this operation, and Mission is unaware of any
outstanding funding issues. Mission will note the update.

ITEM II. REPORT ON ISSUES WITH CURRENT OR FUTURE RESOURCE
IMPLICATIONS. The Chairman will update the Board on the
status of the following issues with resource implications,
seek initial views, and consider the way ahead:


A. Short-Notice Deployment of the NRF. The NAC agreed
the compromise proposal to provide financial support for
short-notice deployments of the NRF for a two year period
(Ref E). The compromise proposal stipulates a flat rate of
reimbursement to nations, below actual costs, that would only
be available to those nations that have put in motion ways to
meet their air-lift needs, such as ownership of aircraft,
participation in SALIS, the C-17 consortium or the A400M. In
agreeing the proposal, the NAC tasked the MC to define the
meaning of short notice deployments to ensure that common
funding covered only genuinely urgent requirements and in
this context to advise on the appropriate balance of air-lift
and sea-lift. The Board will hear status report on the MC
work and consider the way ahead to develop appropriate
funding arrangements.


B. Funding Implications of NATO participation in
Humanitarian Operations. The NAC tasked the SRB to develop a
report on the funding implications of NATO's participation in
humanitarian operations on the basis of the final MC and
SCEPC reports on lessons learned from the Pakistan earthquake
relief operation and the assistance to the U.S. following
Hurricane Katrina. Based upon the Board's informal
discussions, the IS prepared a non-paper (forwarded to
Washington Agencies) which proposes that the current
principles of eligibility for common funding be maintained
and trust funds should be used to support engineering
projects and the transportation of humanitarian supplies for
these operations. Mission recommends supporting additional
informal discussions with a goal of producing a final report
to the NAC.


C. Interim Evaluation of the Revised Funding Policy
for Non-Article 5 NATO-led Operations. The Board will hear
inputs from the NMAs and the IS on the impact the 2005
agreement to expand common funded eligibility (Ref C)
has had on the force generation and costs of crisis response
operations. The MC report should address the impact of the
funding policy on force generation, the use of lead nations,
the requirements for outsourcing, the overall resource
implications, as well as the impact of the new funding
approach on interoperability and on standardization. Mission
recommends noting the inputs and advocating a longer
evaluation period to allow the full impact of the new funding
policy to become apparent.



D. Update on the Peacetime Establishment (PE) Review
of the NATO Command Structure (NCS). On December 7, the
Leader of the International Military Staff (IMS) Review Task
Force briefed the Board and Executive Working Group (EWG) on
the proposed options for an adapted NCS which range from
maintaining the current structure with some internal
rebalancing to full closure of some geographical command
locations. The Independent Advisory Team (IAT) reviewed the
proposed options and made several recommendations to the MC
to focus on specific areas within and between the options in
order to balance military effectiveness with affordability.
The IMS drafted a report for MC consideration which
recommends the closure of three component commands in ACO,
the relocation of some ACT Staff Element Europe from Mons to
Brussels, and a five sector CIS structure for NCSA for
consideration by the MC. The Board considered the potential
resource implications of the IMS proposal and concluded that
it is not possible at this stage to provide reliable and
detailed cost analysis of the proposal under discussion in
the MC (Ref F). The Board will hear status report on the
ongoing MC deliberations and will meet jointly with the EWG
on April 23 for further joint discussions and to consider the
way ahead.


E. Broader Burdensharing Discussions. In July 2005,
the Council agreed the SRB-proposed new cost-share
arrangements for the NATO budgets, i.e., future changes in
cost shares, to have them more closely align with Gross
National Income (GNI) (with the U.S. excepted),and tasked
the SRB to continue its work in reviewing burden-sharing
arrangements to identify more equitable and stable
mechanisms. The Board agreed, as a first part of the
burden-sharing arrangements, the detailed mechanism to be
used to assess the nationally provided manning of NATO
critical operational activities. The Chairman will report on
the status of the follow-on burden-sharing work to review
economic benefits nations derive from NATO common funding.
Mission will note this effort, which will not include the
U.S.


F. Missile Defense Feasibility Study. The Council
tasked the Board to provide a preliminary assessment of the
affordability of the recommendations of the Missile Defense
Feasibility Study for a NATO-wide architecture and one
mid-course interceptor (Ref G). In March 2007, the Board
tasked the IS to prepare a report outlining the resource
issues of the potential Missile Defense program. The Board
will hear a update on the status of the report and consider
the way ahead. Mission recommends supporting consideration
at an early preparatory session.


G. ACCS Implementation. Currently, the ACCS
implementation is three years behind the original schedule
and the IS and the IC independent advisor contractor project
a minimum additional delay of two years. In December, the IS
identified additional unfunded requirements of 80 MEUROs and
the potential of cost overruns of another 70 MEUROs. The
Board will hear an update on the implementation of the ACCS
program. Mission will note the update.

ITEM III. NATO HEADQUARTERS RESOURCE REFORM. In April 2006,
the NAC agreed that the SRB should assume a lead policy and
planning role in all military resource areas and that the MBC
and IC should be oriented towards implementation. In
February, the Council agreed to establish a NATO Office of
Resources (NOR) and new the terms of reference (TOR) for the
resource committees which establishes a heirarchical
structure, i.e. the IC and MBC reporting to the SRB (Ref H).
On April 4, the Board agreed to again revise the IC TOR to
designate that the future IC chairman will be nationally
sourced in lieu of a member of the IS. Martin Versnel (NL),
the Deputy NOR designate will report on the planned
organizational structure and functional relationships of the
NOR and the status of establishing the office. Mission
recommends noting the update and advocating for an early
establishment of the NOR.

ITEM IV. 2008-2012 MEDIUM TERM RESOURCE PLAN. The Board will
consider the draft of the IS proposed 2008 to 2012 medium
term resource plan (ref I). In February, the MC tasked the
budget holders to provide impact statements for each budget
at a level 5 percent below the SRB agreed guidance level of
zero nominal growth, i.e. the 2007 budget figures (Ref J).
The MC will consolidate the various budget holders impact
statements into a single impact statement at zero nominal
growth. The IMS will update the Board on the status of the
preparation of the consolidated impact statement and the
ongoing MC deliberations. Mission will note the update.

ALLOCATION OF RESOURCES CAPABILITY PACKAGE AND STAND-ALONE
PROJECTS.

ITEM V.A. I.S./IMS CAPABILITY PACKAGE OVERVIEW: The Board
will receive the regular IS/IMS status report on the active
and pending capability packages. The Board will also receive
an I.S. presentation on the NATO Pipeline System. Mission
will note the briefings.

ITEM V.B. BI-SC CAPABILITY PACKAGE 9C0103 FUNCTIONAL SERVICES
FOR LOGISTICS C2. The Board will consider endorsement of
this CP (Ref K),which will provide the information system
services to support the logistics functions within the NATO
command structure. The CP has a priority of 2 and the
required capabilities are categorized as Essential 1 in
accordance with the MCs new CP prioritization process (Ref
L). The NSIP investment costs included in this CP are 43
MEURO, however another 29 MEURO in programming are planned to
be requested through a later addendum; O and M costs are 6.1
MEURO; and 7 additional common funded manpower posts are
required, 5 at NCSA and 2 at NAMSA. The MC is considering
endorsement of the CP under silence procedure expiring April

16. Mission recommends supporting endorsement of the CP,
subject to MC endorsement.


3. (C) The Board will meet in restricted session on April
20 to consider the election of the next SRB Chairman. This
new Chairman will also serve as the resource advisor to the
Secretary General and the Council/DPC, thus effectively an

SIPDIS
Assistant Secretary General. Three nations have candidates
running for the position; The Netherlands, Greece and Spain.

THE ELECTION PROCESS. The election, similar to that of the
MBC/CBC Chairman, will be conducted on a secret weighted
preferential vote, with one vote per nation, until only two
candidates remain. Nations will assign points to the
candidates based upon the preferences, i.e. for the first
round, first choice - 3 points, second choice - 2 points,
etc. The nation whose candidate received the fewest points
will be asked whether they are willing to withdraw their
candidate. Once only two candidates remain, a blank ballot
is issued and nations will secretly write their preferred
candidate. The nation of the candidate with the fewest votes
will be asked whether they are willing to withdraw their
candidate and if so, the Chairs will ask if all nations are
willing to accept the candidate receiving the majority of the
votes. The rule of consensus still applies, any nation may
elect to not withdraw their candidate despite receiving the
fewest points/votes or may block the selection of a candidate
receiving the majority of votes. In either event, the Chairs
may call for nations to nominate new candidates or refer the
issue to the NAC for resolution (Ref M not yet issued).

THE CANDIDATES. Resumes of all candidates were forwarded to
Washington Agencies. Below is Mission,s assessment of each
candidate.


A. Raymond Thuis (the Netherlands). Thuis serves on the
SRB and is the Deputy Comptroller for Ministry of Defense.
Mission personnel have had several discussions with him and
his views on resource management appear to be closely in line
with U.S. views. We understand that Thuis recently visited
OSD and State in Washington.


B. Major General Nick Papaprokopiou (Greece).
Papaprokopiou serves on the SRB and has done so for a total

of nine years. He understands NATO resource management.
Although openly supporting initiatives that provide jobs,
contracts, and money for his nation and the southern region
of NATO, he is practical and easy to negotiate and work with.



C. Alvaro Pino Sales (Spain). Pino previously served as
Chairman of the MBC/Civil Budget Committee and Mission
considered his performance adequate. For the past three
years, his work has not involved NATO resources. Pino is
relatively junior, a Colonel in the Army, whereas most
members of the SRB are SES equivalent or General Officers.
Reasons for establishing the NOR and subordinating the IC and
MBC to the SRB included the need to bring the MBC "club"
under control and force them to coordinate better with others
in the resource community. We would expect Pino to support
"old school" MBC views. Also, as a southern European, we
would expect him to support that region,s views on NATO
resource management, i.e. more jobs, contracts, and NATO
money for them.

RECOMMENDATION: Based upon his qualifications and views on
resource management, Mission recommends supporting the Dutch
candidate, Thuis for the post.

OLSON