UNDP AND UNFPA EXECUTIVE BOARD MEETING, SEPTEMBER

UNCLAS SECTION 01 OF 04 USUN NEW YORK 000930

SIPDIS

E.O. 12958: N/A
TAGS: UNDP UNFPA EAID SOCI
SUBJECT: UNDP AND UNFPA EXECUTIVE BOARD MEETING, SEPTEMBER
8-12, 2008 - WRAP-UP REPORT


1. This cable reports on the Executive Board session of the
UN Development Program (UNDP) and UN Population Fund (UNFPA),
September 8-12, 2008 in New York.

--------------
Summary
--------------



2. The Board accepted a management "roadmap" to discuss the
resumption of UNDP operations in North Korea. The Board
approved an accountability policy, which sought to enhance
the independence of the internal oversight bodies of UNFPA
and UNDP and to establish procedures for Board members to
access UNDP and UNFPA internal audits. China initially
blocked this decision during the formal Board session, but
joined consensus a week later at an extended meeting. The
Board approved the use of direct sector budget support and
pooled funding on a pilot basis. Germany and France made a
joint statement requesting the delay of UNDP's new Mauritania
program, but declined a U.S. offer to join the statement.
The Board raised the limit on management's "ex gratia" or
discretionary spending to 75,000 USD per year, and removed
the cap on paying emergency humanitarian relief for staff and
family injured or killed while on duty, with an immediate
reporting requirement. The Board discussed and approved
several country programs. UNFPA Executive Director Thoraya
Obaid announced that the UN had agreed that she continue in
her position for an additional two years.

-------------- --------------
North Korea Program - Requirements to Re-establish
-------------- --------------


3. UNDP's Asia and Pacific Regional Bureau Director
presented a five-step roadmap to explore the possible
resumption of a UNDP program in North Korea at the request of
DPRK authorities:

-- UNDP management undertakes dialogue with member states on
the way forward;

-- UNDP management begins preliminary discussions with DPRK
government on the recommendations from the Nemeth report
(external review panel of past UNDP operations in North
Korea);

-- UNDP sends a team to DPRK once the Board endorses the
roadmap;

-- UNDP management proposes a program of work at the January
2009 Board session (assuming talks with the DPRK proceed
satisfactorily);

-- If the Board approves a program, UNDP recruits staff and
re-opens the DPRK country office.


4. USDEL supported management's proposal to review the
conditions carefully, and consult with the Board before
resuming operations. USDEL urged UNDP management, as it
moves forward, to further address the findings and
recommendations of the Independent Panel and the UN Board of
Auditors who reviewed past UNDP activities in the DPRK.


5. Responding to this proposal, the North Korean delegation,
while asking UNDP to re-open its Pyongyang office and resume
the suspended program immediately, did not object to the
roadmap per se. Several delegations, including Sweden, said
UNDP was not moving fast enough, while others agreed with
management that the January 2007 Board decision on management
and programmatic criteria for UNDP operations in North Korea

USUN NEW Y 00000930 002 OF 004


provided the basis for moving forward. In concluding the
discussion, the President of the Board asked for and received
the Board's endorsement (no member raised an objection) of
the roadmap.

-------------- --------------
Accountability Decision - China blocked, then joined consensus
-------------- --------------


6. The adopted decision, accepting with minor modifications
management's draft Accountability Framework, achieved key
U.S. objectives to enhance the independence of three UNDP
internal oversight bodies, the Audit Advisory Committee
(AAC),the Office of Audit and Investigation (OAI),and the
Ethics Office (EO) by requiring:

the Ethics Office to report directly to the Board (AAC and
OAI already report directly to the Board) and;

UNDP management to avoid conflicts of interest in the
appointment of the directors of OAI and EO, and the members
of the AAC, and to use previously defined criteria, including
professional qualifications.


7. In a statement following the adoption of the decision,
USDEL requested UNDP management to develop and share with the
Board as soon as possible a process to avoid conflicts of
interest in the appointment of key personnel for these three
offices.


8. The decision also established criteria and a procedure
for access by board members to UNDP, UNFPA and UNOPS internal
audit reports: certain sensitive information may be withheld
or redacted, no "retroactive" access to old (pre-January
2008) internal audits, and information gleaned from audit
reports be treated as confidential.


9. In the negotiations, the Chinese delegation objected to
allowing management to release internal audits to Board
members upon request and pressed hard for the Board and
"concerned government" to play a role, along with management,
in making decisions on access for each internal audit
request. According to some G77 delegations that caucused
with China, the Chinese were concerned about U.S. accessing
UNFPA internal audits of its China programs. UNFPA
management had refused past U.S. requests for internal audits
for the purpose of certifying whether UNFPA was engaged in
activities that supported forced abortions and other coercive
family planning policies and practices in China (Kemp-Kaston
certification).


10. USUN and UNDP management engaged the Chinese Mission at
the PermRep level to break the impasse. The Chinese finally
joined consensus on September 19 during a special half-day
resumed meeting, one week after the scheduled conclusion of
the Board session. The adopted decision provided the
"concerned government" with an opportunity to read and
comment on the requested internal audit reports, but did not
specify a role for member states in the Administrator's
decision to release internal audit results.

--------------
UNDP to Pilot Direct Sector Budget Support
--------------


11. The UNDP Board approved the launch of a pilot period to
test a mechanism to fund country programs through direct
sector budget support and pooled funding. Although this
general approach had been accepted by the U.S. under the
Paris Declaration process, we and others were not convinced
that UNDP should be a part of this funding mechanism or that

USUN NEW Y 00000930 003 OF 004


UNDP had the systems in place to do it right. Although other
Executive Board members were not willing to support
additional delay of the pilot while UNDP further elaborated
procedures and how results would be measured and evaluated,
we did convince the Board to require UNDP Management to
provide this information to the Board (by posting it on the
UNDP website) before any money is released to programs
through this new mechanism.

-------------- --------------
Franco-German Statement on Mauritania - U.S. Excluded
-------------- --------------


12. Germany and France made a joint statement expressing
concerns about the post-coup situation in Mauritania. The
statement cited the August EU statement calling for the
return to constitutional order and for the military
authorities to work with the African Union to restore
democracy at the earliest opportunity.


13. Germany and France called for a delay in discussing the
UNDP country program in Mauritania, stating that the
post-coup conditions will, at a minimum, require adjustment
to the program.


14. After calling for countries to join the statement in a
donor group coordination meeting, Germany declined a U.S.
offer to sign up to the statement. Germany told the USDEL
that they did not want to "politicize the Board" - recalling
the January 2007 DPRK episode, where many developing
countries criticized the successful U.S. effort to delay the
approval of the North Korea program as "politicizing the
Board."

--------------
U.S. Statement
--------------


15. The head of the U.S. delegation, Ambassador McMahan,
delivered a statement during the opening session of the
Board. He again urged UNDP to focus its programs and
resources on helping African countries on crisis prevention
and recovery and the creation of an enabling environment in
countries to promote sustained growth.


16. He acknowledged the progress that UNDP had made in
improving the organization's transparency and accountability.
He commented on the Accountability Framework, stressing the
importance of ensuring the independence of the two newly
established bodies - the Audit Advisory Committee (AAC,
established last year) and the Ethics Office (established
this year). The U.S. statement can be found at:
www.usunnewyork,usmission,gov/press_releases/ 20080909_236.html.

--------------
UNDP Administrator Dervis' Statement
--------------


17. Dervis began his statement with a lengthy assessment of
the global economy, forecasting that growth will be weak
through 2009. He accused donors of shuffling resources and
re-packaging them for "new initiatives," while overall ODA
resources declined. In such an environment, he argued for
meeting commitments to support development programs.


18. He urged member states to accept the proposed system of
accountability and transparency and the need for change in
UNDP - making country program information available and
giving countries access to internal audits.


19. He stated that the UNDP total operating resource level

USUN NEW Y 00000930 004 OF 004


had reached 5.2 billion USD, with "core resources" at nearly
one billion USD. He noted that the 4:1 ratio between
"non-core" and "core" is an imbalance, and that he would like
to see it reach 3:1.


20. Note: the U.S. provides over 100 million USD per year in
"core resources" (non-earmarked funding that UNDP uses for
administration and entitlement programming),supplementing
this with roughly 150 million USD in program-specific
resources, a non-core to core ratio of 1.5:1.

--------------
UNDP Country Programs Discussed/Approved
--------------


21. The Board discussed country program documents of:
Angola, Cote D'Ivoire, Congo-Brazzaville, Haiti, Kenya,
Mauritania, Niger, Timor-Leste, and Venezuela. The Board
will approve these documents at the next meeting in January
2009, unless five or more Board members raise objections.


22. The Board approved the program documents for: Benin,
Mauritius, Nigeria, and Sudan.

--------------
UNFPA Actions and Country Programs
--------------


23. In her statement to the Board, UNFPA Executive Director
Thoraya Obaid introduced the new Director of the Asia Pacific
Regional Office, Nokubo Horibe. Obaid stressed the relevance
of the agenda of the International Conference on Population
and Development, progress on the Millennium Development
Goals, and the management of demographic dynamics through
just and equitable social and economic policies. To better
address population and development issues, UNFPA, WHO,
UNICEF, and the World Bank have agreed to a clearer division
of labor about their roles in maternal health. She addressed
UNFPA's role in combating HIV/AIDS and the prevention of
violence against women. Obaid described extensive management
and administrative improvements. She concluded her remarks
with the announcement that the Secretary General had decided
to extend her term of office for two additional years.


24. UNFPA presented draft country programs for Angola, Cote
D'Ivoire, Haiti, Kenya, Mauritania, Timor-Leste, and
Venezuela. USDEL made technical comments on several programs
that were well-received by UNFPA staff and country
delegations and that should be reflected in the final
programs. UNFPA also approved country programs for Benin,
Niger, Nigeria, the Republic of the Congo, and Sudan and
agreed to extend existing programs in Lebanon and Burundi.


25. The Department thanks those desks/posts that provided
comments on their countries' programs.
Khalilzad