RFG: SENIOR RESOURCE BOARD OCTOBER 11 & 12 PLENARY

C O N F I D E N T I A L USNATO 000548

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 FLANAGAN); 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 OCTOBER 11 & 12 PLENARY

REF: A. SRB-A(2007)0008


B. SRB-N(2007)0058-REV1

C. SG(2006)0160-REV1

D. SRB-N(2007)0056

E. SG(2007)0645

F. SRB-N(2007)0041-REV1

G. SRB-N(2007)0062

H. SRB-N(2007)0047-REV1

I. SRB-WP(2007)0002

J. SRB-D(2007)0006

K. SRB-D(2007)0007

L. SRB-D(2007)0008-REV1

M. OC/SRB(2007)0051

N. PO((94)40

O. SRB-N(2005)0010-ADD14

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


1. (C) SUMMARY AND REQUEST FOR GUIDANCE: The Senior Resource
Board (SRB),meeting in Brussels on October 11 and 12, will
consider: the eligibility for common funding and approval of
outsourcing for International Security Assistance Force
(ISAF) in theater sustainment air lift; endorsement of the
capability package (CP) for Electronic Warfare, and CP
addenda for the Interim Combined Air Operations Center (CAOC)
Structure and the modifications to the Ballistic Missile
Defense feasibility study to address the impacts of the third
U.S. site; the SRB input to the Council on policy guidance
for the 2009 to 2013 planning period; the 2007 SRB annual
report to Council, and an expenditure analysis of the NATO
Security Investment Program (NSIP).

The Board will hear status reports on the force generation of
the intelligence, surveillance, and reconnaissance (ISR) to
support the ISAF operation; the resource aspects of the
current operations in Afghanistan, Iraq, Kosovo, Darfur and
the Mediterannean; the establishment of the new NATO Office
of Resources (NOR); development of the CP Master Plan; and
refinements to the development of minimum military
requirements (MMR).

The Board will hear status reports and consider the way ahead
for any outstanding work for: the funding implications of
NATO participation in humanitarian operations, the NATO
Command Structure (NCS) peacetime manning review, assessing
the affordability of the proposed Missile Defense capability,
the CP Process Review, and further NATO headquarters resource
reform. The Board will hear a briefing on Allied Command
Transformation,s (ACT) proposed revised resource management
organization. Unless otherwise directed by OOB October 11,
Mission will take the positions detailed herein. END SUMMARY
AND REQUEST FOR GUIDANCE.


2. (C) Mission has reviewed reference documents for the
October 11 and 12 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. Mission
recommends noting the updates.

In order to address the U.S. imposed deadline to remove our
air lift bridging force of January 30, the Board is
considering granting eligibility for common funding and the
approval for outsourcing of the ISAF in theater sustainment
lift under a silence procedure expiring COB Oct 9 (Ref B).
SHAPE advised that the contract should be awarded by
mid-December in order to be fully operational by January 30.
Upon Board agreement on eligibilty and outsourcing, the
Military Budget Committee (MBC) would expeditously screen the
requirement, consider granting JFC Brunssum contracting
authority, and investigate the extent as to which the
additional costs may be accomodated within the agreed 2008
contribution ceiling. The Board will subsequently consider
the need to propose an increase to the 2008 contribution
ceiling. Mission recommends to maintain silence; however,
should the silence be broken by another nation, the Board
will hold further discussions on the issue at the Plenary
Meeting. Mission will propose a U.S. position should this be
the case.

The NMA's will update the Board on the status of the ISAF
intelligence, surveillance, and recognaissance (ISR)
requirements to include force generation and the Military
Comittee (MC) deliberations of the MMR, and whether
outsourcing should still be considered. Current estimates
for ISR are 28 MEURO per year (included in the 2008 military
budget) if provided by a lead nation and 93.2 Million per
year if fully outsourced. IAW agreed ISAF funding
arrangements (Ref C),the SRB must approve any outsourcing.
Mission recommends supporting outsourcing of the portions of
the ISR capability not fulfilled by the force generation
offers.


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. 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 I.S., and the Chairmen of the implementing
committees. The Board will also note an IS trust fund report
that indicates that the on-hand contributions are adequate to
fully fund all identitifed 2007 and 2008 requirements (Ref O).


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 ENDEAVOR. The Board will
hear briefings from SHAPE on mission progress. Mission is
unaware of any funding issues and will note the briefings.

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. 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. Germany was unable to agree to the
proposed specific funding arrangements for humanitarian
operations, insisting that such arrangements exceeded the
mandate from the Council. The Board will now consider an
I.S. draft report which outlines the potential funding
implications should NATO participate in a humanitarian
operations (Ref D). Mission recommends to support extending
eligibility for common funding of critical theater-level
enabling capabilities (i.e. medical, engineering, logistics,
etc) to not only the deployed NATO forces but also to support
the local population affected by the disaster or event.


B. Update on the Peacetime Establishment (PE) Review
of the NATO Command Structure (NCS). On September 19, the
NAC approved the MC Report on Phase 1 of the PE Review for
the NATO Command Structure (Ref E) which made the following
changes to Allied Command Operations: established the three
operational level joint force command headquarters (Brunssum,
Lisbon, Naples),converted the two current land component
commands to joint forces commands with three deployable joint
staff elements (DJSE) each (including one force structure
DJSE),and retained the current air and naval component
commands. ACT's overall architecture remains unchanged;
however, an Integrated Resource Management Division (see Item
IV) and a Capability Development Division will be
established. In addition, the NATO Communications Service
Agency (NCSA) structure will be substantially modified to
combine static and deployable entities to maximize efficient
utilization of military manpower. The intial resource
estimates to implement the proposed new command structure
indicate increased costs to both the NSIP and the Military
Budget. During the Plenary meeting, the Chairman will update
the Board on the Executive Working Group (EWG) and MC
deliberations of the issue, and the Board will consider the
way ahead for its participation in Phase 2 of the review.
Mission recommends supporting that the Board task the
International Staff to further develop the resource and
financial implications of the proposed command structure.


C. Missile Defense. 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. In
preliminary discussions, many nations preferred to include
the possible contribution of the potential U.S. sites in
Poland and the Czech Republic in the cost analysis, and the
Board tasked the I.S. to prepare a report outlining the
resource issues of the potential NATO Missile Defense program
(Ref F). Mission recommends supporting deferral of
finalizing the affordability report to Council pending the
results of the modified Ballistic Missile Defense Feasibility
Study addressing the impact of the third U.S. site (see Item
VIII.D).


D. CP Process Review. U.S. (Morse) and Turkey
(Ozarmagan) are co-chairing a working group to improve the
current CP process. The co-chairmen will update the Board on
the ongoing activities of the working group. Mission
recommends to note the update.


E. CP Master Plan and MMR. The IMS will update the
Board on the status of CHOD's taskings to the NMAs to develop
an overall CP Master Plan and improve the establishment of
the MMR by providing a wider range of potential options to
include relevant resource implications and associated risks.
Mission will note the update.

ITEM III. COUNCIL PLANNING GUIDANCE FOR THE 2009-2013
PLANNING PERIOD. The Board will consider the draft SRB input
to the Council on policy guidance for NATO Military Common
Funding for the 2009 to 2013 planning period (Ref G). The
proposed key issues for the planning period are: support for
operations and missions; rapid implementation on capability
packages supporting deployability; free resources through
prioritization, improvement of procedures, and accelerating
work on the closure of legacy infrastructure and systems;
early development and implementation of new capabilities
supporting transformation; implementation of the command
arrangements while achieving further manpower savings;
realize NATO Network Enable Capability through early
implementation and integration of C2 and C3 systems; and
improvements to existing capabilities that support
expeditionary capabilities. Mission will agree to the paper
as drafted.

ITEM IV. ACT INTEGRATED RESOURCE MANAGEMENT ORGANIZATION.
ACT will brief on their proposed new organization for an
integrated resource management organization. Mission has yet
to receive the briefing charts, and will forward them to
Washington agencies upon receipt, and recommend a way ahead.

ITEM IV. 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 2007, the Council agreed to establish a NOR and new
terms of reference (TOR) for the resource committees which
establishes a heirarchical structure, i.e. the IC and MBC
reporting to the SRB. 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 I.S.
Mr. Peltier (U.S.),the current international Director NOR,
will update the Board on the establishment of the NOR.

The MBC Chairman requested the Board's advice on the
interpretation of the agreed terms of reference with respect
to level of approval (MBC, SRB or NAC) for PE changes, audit
reports, personnel appointment extensions, and accrediation
of centers of excellence. In June, the Board considered an
I.S. non-paper which advocated reducing the approval levels.
Mission supported the lowest level of approval (e.g. MBC and
IC) consistent with proper oversight. France, the
Netherlands, and Spain were unable to agree the proposal. On
October 3, the Board agreed an interim solution that the MBC
approval requests be subject to SRB endorsement prior to
submission to the NAC and in parallel, the I.S. will prepare
a report for consideration by the Board by November 30,
outlining current processes and identifying options for
changing these processes, with the aim of ensuring that
decision making will be delegated to the lowest level
practical (Ref M). The Chairman will update the Board on the
way ahead.

During the April Plenary meeting, the national resource
committee chairmen elections resulted in several ties between
candidates during successive voting rounds, and many nations
voiced concern that the existing election process was not
suitable to elect a single candidate for each chairmanship
(Ref N). At a September informal SRB meeting, many nations
objected to the current weighted voting election system and
preferred rather non-weighted sequential voting, thus
eliminating candidates through successive rounds with each
nation casting a single vote supporting a single candidate in
each round. The Board will consider an I.S. non-paper, yet
to be issued, on the election process which Mission will
forward to Washington agencies upon receipt and propose a
recommended way ahead.

ITEM VI. IMPLEMENTATION MANAGEMENT IN THE NSIP, AN ANALYSIS
OF THE EXPENDITURE SITUATION. During the presentation of the
2006 SRB annual report to Council, the NAC invited the SRB to
provide a broad analysis of the reasons for the decline in
NSIP expenditures over the last four years and the delays in
deployable command, control and consultation projects, and
possible actions to rectify the situation. The Board will
consider an I.S. proposed draft report (Ref H) which suggests
that the NSIP implementation rate slowed dramatically during
the past four years due to significant delays in ACCS
program, NATO Command Structure Headquarters improvements
(due to indecision on the PE Review),and changes in concept
for the Combined Joint Task Force (CJTF) and NATO Response
Force (NRF). Further, approximately 50 percent of the NSIP
implementation responsibility has shifted from the
territorial host nations to the Strategic Commands and NATO
agencies. The report notes that initiatives to make the NSIP
more responsive are underway at the Strategic Commands, the
SRB, and the IC which will need to be complemented by host
nation and agency measures to improve capability delivery.
Mission recommends to agree the report as drafted.

ITEM VII. DRAFT 2007 ANNUAL REPORT TO THE COUNCIL. The
Board will consider the I.S. proposed draft 2007 SRB Annual
Report to the Council (Ref I). The draft report concludes
that while the resource allocations for the NSIP have been
sufficient for both 2006 and 2007, future years will likely
require increased contributions. For the Military Budget,
resource allocations had to be increased in 2006, primarily
to cover cost increases for the ISAF operation, but will
likely be adequate for 2007. Additional operational
requirements in Afghanistan and substantial investments in
deployable and transformation systems are anticipated to put
further pressure on operation and maintenance (O and M)
budgets. International manning remains a serious problem,
particularly in the area of deployable communications.
Mission recommends to agree the report as drafted.

ALLOCATION OF RESOURCES CAPABILITY PACKAGE AND STAND-ALONE
PROJECTS.
ITEM VIII.A. I.S./IMS CAPABILITY PACKAGE OVERVIEW: The
Board will receive the regular I.S./IMS status report on the
active and pending capability packages. Mission will note
the briefings.

ITEM VIII.B. BI-SC CAPABILITY PACKAGE 9A0700 ELECTRONIC
WARFARE. This CP (Ref J) will provide an electronic warfare
training and exercise capability. The I.S. proposes to split
the procurement of the air training equipment from that for
the land and maritime equipment. Mission will seek
assurances that should the training equipment be procured
separately, interoperability can be obtained while
maintaining full and open international competition, and will
requests the IC to further evaluate the issue during the
project authorization stage. The CP has a priority of 2 and
the required capabilities are categorized as Essential 1.
The NSIP investment costs included in this CP are 161.9
MEURO; annual O and M costs are 0.3 Million in 2011 and
steadily increasing to 3.0 MEURO for 2015 and beyond; and no
additional manpower is required. The MC is considering
endorsement of the CP under silence procedure expiring
October 12. Mission recommends supporting endorsement of the
CP, subject to MC endorsement.

ITEM VIII.C. SHAPE RECOMMENDED CAPABILITY PACKAGE 5A0109
ADDENDUM 1 INTERIM CAOC STRUCTURE (ICS). This CP Addendum
(Ref K) will procure additional electronic equipment to
enable a reduction from the current ten CAOCs to the four
NATO Command Structure CAOCs using the existing air command
and control legacy systems. Nations have not yet agreed the
flags to post arrangement for the CAOC portion of the new
command structure; as such the initial state peace
establishment (ISPE) is not agreed and therefore, the funding
to support the manning is unknown. Pending agreement of the
ISPE, SHAPE proposes to continue multinational manning and O
and M based upon the current multinational Memoranda of
Understandings (MOUs). Mission will seek assurances that the
existing MOUs can accommodate any increase in manning and
costs associated with the proposed ICS. The CP has a
priority of 2 and the required capabilities are categorized
as Essential 1. The NSIP investment costs are 1.5 MEURO. As
part of the CP endorsement, nations are invited to confirm
their commitment to continue to fund the O and M and to
provide manpower for the ICS CAOCs through the MOU based
agreements. Consideration of the common funded O and M costs
and the additional PE post are deferred pending agreement of
the ISPE. The MC is considering endorsement of the CP under
silence procedure expiring October 19. Mission request
Washington instructions regarding our confirmation to
continue O and M funding and manpower via the existing CAOC
MOUs; and if such confirmation is available recommends, to
support endorsement of the CP, subject to MC endorsement.

ITEM VIII.D. SACT RECOMMENDED CAPABILITY PACKAGE 5A0061
ADDENDUM 1 FEASIBILITY STUDY ON BALLISTIC MISSILE DEFENSE.
This CP Addendum will assess the impact of the US Missile
Defense elements planned to be installed in Europe on the
architecture proposed in the existing Missile Defense
Feasibility Study in order to provide a report to Heads of
State and Government (Ref L). The CP has a priority of 2 and
the project in the addendum is categorized as Essential 1.
The NSIP investment costs included in this CP are 1.5 MEURO.
The MC is considering endorsement of the CP under silence
procedure expiring October 9. Mission recommends supporting
endorsement of the CP, subject to MC endorsement. Mission
notes that existing OMA funds for the Missile Defense
Feasibility Study (355 KUSD) may not be adequate to fully
cover the U.S. cost share of the addenda and that additional
obligation authority must be made available prior to the
project authorization in the IC. The proposed FY08 National
Defense Authorization Act language requires congressional
notification prior to using any NSIP funds for missile
defense studies. As such, Mission requests Washington to
identify source of additional funds, and should NSIP funds
planned to be used, to make appropriate congressional
notification.

ITEM IX. ANY OTHER BUSINESS. None known at this time.
NULAND