Identifier
Created
Classification
Origin
09THEHAGUE244
2009-04-14 15:05:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy The Hague
Cable title:  

CWC: INDUSTRY CLUSTER MEETINGS, APRIL 1-2, 2009

Tags:  PARM PREL CWC 
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DE RUEHTC #0244/01 1041505
ZNR UUUUU ZZH
O 141505Z APR 09
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2746
INFO RUEAIIA/CIA WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHMFIUU/DTRA ALEX WASHINGTON DC//OSAC PRIORITY
UNCLAS THE HAGUE 000244 

SENSITIVE
SIPDIS

STATE FOR ISN/CB, VCI/CCA, L/NPV, IO/MPR
SECDEF FOR OSD/GSA/CN,CP>
JOINT STAFF FOR DD PMA-A FOR WTC
COMMERCE FOR BIS (BROWN AND DENYER)
NSC FOR LUTES
WINPAC FOR WALTER

E.O. 12958: N/A
TAGS: PARM PREL CWC
SUBJECT: CWC: INDUSTRY CLUSTER MEETINGS, APRIL 1-2, 2009

REF: A. THE HAGUE 99

B. FACILITATOR'S DRAFT DECISION ON 2A/2A* LOW
CONCENTRATIONS (03/25/09)

C. STATE 30848

This is CWC-20-09.

UNCLAS THE HAGUE 000244

SENSITIVE
SIPDIS

STATE FOR ISN/CB, VCI/CCA, L/NPV, IO/MPR
SECDEF FOR OSD/GSA/CN,CP>
JOINT STAFF FOR DD PMA-A FOR WTC
COMMERCE FOR BIS (BROWN AND DENYER)
NSC FOR LUTES
WINPAC FOR WALTER

E.O. 12958: N/A
TAGS: PARM PREL CWC
SUBJECT: CWC: INDUSTRY CLUSTER MEETINGS, APRIL 1-2, 2009

REF: A. THE HAGUE 99

B. FACILITATOR'S DRAFT DECISION ON 2A/2A* LOW
CONCENTRATIONS (03/25/09)

C. STATE 30848

This is CWC-20-09.


1. (U) SUMMARY: Two of the three Industry Cluster
consultations at the OPCW on April 1-2 saw a
continuation of discussions from the last Industry
Cluster in February (ref A). Little progress was
made on either Schedule 2A/2A* low concentrations
or enhancements to declarations of Other Chemical
Production Facilities (OCPFs). The third
consultation focused on a presentation by the
Technical Secretariat assessing the revised OCPF
site selection methodology introduced in 2008.
While many delegations called for the resumption of
consultations on finalizing the OCPF site selection
methodology, no one has come forward to take on the
Herculean task of facilitating the consultations.
Full details follow. END SUMMARY.

--------------
OCPF SITE SELECTION METHODOLOGY
--------------


2. (U) On April 1, Algerian Ambassador Benchaa Dani
(Vice Chair for Industry Issues) chaired the first
of three Industry Cluster meetings and announced
that this would be his last meeting as Vice Chair.
The Director-General (DG) welcomed the chance to
discuss the results in 2008 of his modified site
selection methodology for other chemical production
facilities (OCPFs). Citing his report from
February (EC-5/DG.8),the DG reported that the
results of the new methodology were as expected but
noted that his assessment was only a progress
report rather than a definitive conclusion on the
methodology. The DG said that the Technical
Secretariat (TS) would need at least another year
to fully analyze the effects of the modified
methodology, suggesting that the results for 2009
might not necessarily reflect those for 2008.


3. (U) Stian Holen (Head, Policy and Review Branch)
and Tsuyoshi Okuyama (Senior Policy Officer, PRB)
made a presentation of the modified methodology,
included statistics and tables included in the DG's
February report. Holen stressed that the
methodology is an interim measure but that the TS
will continue to use it to collect data for further
monitoring and better evaluation. German

Ambassador Werner Burkart agreed with the DG's
assessment that the methodology achieved its
intended aim of shifting OCPF inspections to States
Parties with more OCPFs and focusing on those sites
of higher relevance, as reflected in their A14
score. Burkart also agreed that the TS should
continue monitoring the methodology within 1-2
years with the aim of developing a permanent
methodology. South Africa, Mexico, the Netherlands
and U.S. Del echoed Germany's support for the TS to
continue using and monitoring the methodology.


4. (U) China stated that while the modified
methodology is an improvement, it still needs
further refinement. China noted that it had
received 13 OCPF inspections in 2008 compared to an
average of two inspections per year under the
previous methodology, and stressed the need for
consultations on OCPF site selection methodology to
resume as soon as possible. China expressed hope
that further improvements to the methodology would
Qthat further improvements to the methodology would
augment any enhancements to OCPF declaration forms
and the introduction of sub-codes for bulk
chemicals in eliminating all sites of lesser
relevance. Italy echoed China's call to resume
consultations, noting that Italy had also been
subject to more inspections under the modified
methodology.


5. (U) In response to questions raised by Spain,
Okuyama noted that no States Parties reached the
cap of 20 inspections for OCPFs and Schedule 3
facilities in 2008. He also said that the
reinspection rate was kept at 5%, as under the
previous methodology. Responding to clarification
requested by South Africa, Holen noted that the
spread of inspections between sites of high, medium
and low relevance (37%, 30% and 33%, respectively,
in 2008) was a result of the methodology rather
than an intended target. Holen stressed that the
methodology remains random and that all sites,
regardless of relevance, are eligible for
inspection.


6. (U) Near the end of the meeting, Dani said that
most delegations appeared to support the modified
methodology and the TS's continued use of it. Dani
suggested two options for proceeding: restarting
consultations (as requested by China and Italy),
and allowing the DG to present new initiatives to
further improve the methodology. The DG adamantly
responded that the TS has no initiatives to
introduce and will rather continue to monitor the
current methodology. He countered that States
Parties should take up their responsibility of
deciding on the final factor to be included in the
site selection methodology. Germany and South
Africa both supported the DG's comments and echoed
Dani's appeal for a facilitator to take up
consultations on the final factor as soon as
possible.


7. (U) At the request of delegations, Okuyama made
a brief presentation on the A14 value and how it is
determined. Holen promised to make both
presentations from the meeting available on the
OPCW's external server.

--------------
2A/2A* LOW CONCENTRATIONS
--------------


8. (U) Facilitator Giuseppe Cornacchia (Italy)
opened his consultations on low concentrations for
2A/2A* chemicals by introducing his recently-
circulated draft decision (ref B, posted on the
OPCW's external server). Cornacchia explained that
the preambular paragraphs were taken mostly from
the previous facilitator's draft decision while the
three operative paragraphs reflected his assessment
of positions after the last few rounds of
consultations. He noted that not all thresholds
were reflected in his draft decision but explained
that he had not included the lower and upper
extremes in an attempt to close the gap and move
toward a compromise. Cornacchia called on all
delegations for continued flexibility.


9. (U) Cornacchia recalled that in February Canada
(supported by the UK, Germany and Italy) had
requested the TS's analysis of sites declarable at
different thresholds to be broken down between BZ
and PFIB sites. However, Cornacchia reported that
the TS was unable to provide the requested
breakdown due to confidentiality constraints. He
explained that the TS's data was based on
inspection reports and the small number of sites
made it impossible to present the data in an
anonymous manner. Again citing confidentiality
concerns, Cornacchia also reported that the TS was
Qconcerns, Cornacchia also reported that the TS was
unable to provide information on the number of
sites disposing PFIB onsite versus those disposing
it offsite, as Germany had requested in February.


10. (U) U.S. Delrep encouraged other delegations to
shift their focus from technical to political
aspects in order to reach a compromise. Delrep
thanked Cornacchia for his draft decision, noting
it provided a good basis for discussion and offered
a potentially viable solution. The Netherlands
echoed the U.S. call for moving away from technical
discussions and stated that a decision is now a
matter of political will. Australia also welcomed
the facilitator's draft and asked for an assessment
of the impact of different thresholds, suggesting
that States Parties voluntarily provide such
information themselves. Germany followed by asking
how many sites would be declared at various
thresholds (i.e., 5%, 10% and 20%) and stating it
would happily provide the information and
suggesting that the TS could release results
anonymously to protect confidentiality.


11. (U) The UK agreed with Germany's proposal but
stressed that any survey should also show how many
sites might no longer be declarable at various
thresholds. Italy, South Africa, China and South
Korea also supported the idea of having a survey of
the impact of different thresholds. Bill Kane
(Head, Industry Verification Branch) responded that
the TS could produce and circulate a questionnaire
for States Parties to answer voluntarily.


12. (SBU) With momentum gathering behind the impact
survey, Japan threw on the brakes by stating that
delegations needed to discuss and consider the
objective of a threshold. Japan stated that the
Convention stipulates that a threshold should be
based on ease of recovery and that the focus of
thresholds is one of industry regulation rather
than non-proliferation or enhancing visibility of
"dangerous" sites. Japan noted that it was not
against the questionnaire in principle; however, it
asked how the survey results would be used. Russia
also questioned the legality of circulating such a
questionnaire and suggested that States Parties
were unlikely to provide information voluntarily.
After more discussion on the survey, Cornacchia
announced that he would consult informally with
delegations on how to proceed and take up the issue
at the next consultation in May.


13. (U) Cornacchia then shifted discussion to his
draft decision. Delegations quickly went through
the preambular paragraphs raising a few questions
and suggesting minor changes. After discussion on
the specific thresholds suggested in the first
operative paragraph, delegations agreed with the UK
suggestion that no number be written but that it be
left open-ended and filled in once a threshold was
agreed. Delegations decided on a similar
arrangement for the dates for implementation and
review listed in operative paragraphs two and
three, respectively.


14. (SBU) While the consultation did not make much
progress, South African delegate Marthinus van
Schalkwyk reinforced his comments from February
(reported in ref A) by saying that the issue of
choosing a threshold boils down to the number of
inspections that States Parties are willing to
take. He said that a lower threshold would mean
more inspections for some States Parties due to
Qmore inspections for some States Parties due to
their having to declare more facilities. Van
Schalkwyk suggested that some States Parties were
trying to avoid a few extra Schedule 2 inspections
while insisting on increasing OCPF inspections.

--------------
OCPF DECLARATION ENHANCEMENTS
--------------


15. (U) Facilitator Marthinus van Schalkwyk's
(South Africa) consultation on enhancing OCPF
declarations began with a presentation by Bill Kane
(Head, IVB) on the TS's proposed values for the new
"R" variable to be included in the A14 site
selection algorithm. Kane's presentation
reiterated the information included in the TS's
non-paper distributed to delegations in advance of
the consultation. Kane explained that the values
were based on an intuitive sense of different
sites' relative risk rather than on a purely
mathematical basis.


16. (U) U.S. Delrep noted that the proposed "R"
value seemed to focus on shifting more sites of
lesser relevance into the lower risk category
rather than pushing sites of greater relevance into
the higher risk category. Kane responded that the
net effect would be to highlight higher risk sites
by increasing the number of lower risk sites.
Addressing the spread of OCPF inspections among
higher-, medium- and lower-risk sites, Kane said
that the TS does not aim for a specific allocation
between the three categories. However, he did
admit that the change in A14 values due to "R"
would only serve to reduce a site's probability of
being selected for inspection and that this could
result in a larger proportion of higher- and
medium-risk sites being selected.


17. (U) Drawing on guidance (ref C),Delrep also
noted the analysis of the seven U.S. OCPF sites
inspected in 2008 showed that the additional
declaration questions would not have resulted in
more relevant sites being inspected. Delrep went
on to request the TS conduct a survey of all 118
OCPFs inspected in 2008 to determine the net effect
of the proposed declaration changes. Other
delegations and van Schalkwyk agreed the U.S.
proposal would be useful, and Kane said he would
try to present the results at the next Industry
Cluster consultation in late May.


18. (U) The UK and Germany suggested reducing the
number of additional questions on declaration forms
by focusing only on plant characteristics and
asking whether sites have batch or continuous
processes. Germany also noted it would be best to
focus on production processes, rather than on
purification or other concomitant processes. Kane
agreed that in the case of a plant with a batch
reactor and continuous downstream it would be
better to focus on the batch production
characteristic. However, drawing on its own
experience, Switzerland noted a clear advantage to
having three boxes for each question (i.e., batch,
continuous or both; and dedicated, multi-purpose or
both) in order to reduce any possible confusion on
how to answer questions for sites with mixed
characteristics and equipment.


19. (U) China raised the need for clear definitions
of terms used, suggesting that by checking the
wrong box on the declaration form a site's
selection probability could vary by up to five
times. Referring to a previous German comment on
timely declarations, India stated that timeliness
and accuracy of declaration information is more
important than focusing on plant characteristics or
the types of production equipment used. Van
Schalkwyk agreed that timely and correct
QSchalkwyk agreed that timely and correct
declarations are important and said he hoped that
budget consultations would help sharpen minds and
provide incentive to reach agreement on improving
the OPCW declaration regime.


20. (U) Switzerland stated it already has added
both the voluntary SITC-based subcodes and the
questions on site characteristics and production
equipment to its OCPF declaration forms. The Swiss
delegate noted that Swiss industry had not been
confused or burdened by the modifications. China
suggested that States Parties with a larger number
of facilities might have a different experience to
that of Switzerland. Responding to a question
raised by U.S. Delrep, the Swiss delegate said
based on a study of their 35 declarable OCPFs,
Switzerland did not expect the new data to result
in a change in the number of inspections
Switzerland would receive.


21. (U) Iran intervened to state that neither
process nor equipment characteristics are included
in the Convention and that any changes to the
intent of the Convention clearly went beyond the
OPCW's mandate. The Netherlands responded that
improvements to the OCPF inspection regime are not
outside of the Convention, and van Schalkwyk
reminded delegations that the Verification Annex
has been amended twice already, reflecting that
industry is not static and that technical changes
are possible. Iran went on to say that, despite TS
claims to the contrary, differentiation between
site characteristics would not resolve fundamental
problems with OCPF inspections. Iran stated that
the relevance of facilities to the object and
purpose of the Convention is the issue and insisted
that the focus should be on correcting errors in
declarations, insuring timely submission of
information and training national authorities on
proper declaration methods.


22. (U) Van Schalkwyk concluded the consultation by
noting that the increase globally in OCPFs
represents a challenge to the OCPW's verification
regime. He noted that the proposed OCPF
declaration enhancements are an attempt to provide
a technical fix. Van Schalkwyk also reiterated the
link between his consultation and the OPCW's annual
budget, stating that lack of progress in his
consultation would have implications for budget
negotiations in the autumn.

--------------
MEETING WITH INDUSTRY VERIFICATION BRANCH
--------------


23. (U) Following the Industry Cluster
consultations, visiting Commerce officer Hung Ly
and Delrep met with Bill Kane (Head, IVB) and
Violeta Fernandez (Senior Industry Officer, IVB) to
discuss issues related to recent industry
inspections in the United States. Ly noted some
timing problems during sequential inspections, and
Fernandez said they would look at options to
alleviate time constraints, including the
possibility of adding an extra team member on
sequential inspections. Ly also offered to have a
Commerce representative brief new inspection
personnel on the unique way in which the U.S.
delineates plant sites; Kane agreed that a 1-2 hour
briefing on the margins of the Executive Council
session in July could be beneficial, especially
considering the high turnover in both Inspectorate
and Verification divisions since the last such
briefing.


24. (U) Turning to sampling and analysis (S&A),Ly
said that difficulties in shipping S&A equipment by
Qsaid that difficulties in shipping S&A equipment by
air necessitated relying on road transport, meaning
that S&A equipment would not reach a site on the
West Coast until at least a day or two after an
inspection started. Ly noted previous TS guidance
that inspections could not start until all
inspection equipment was on site, and he asked if
this reflected current TS thinking and if there was
any legal basis for it. Kane suggested that an
inspection could begin without the S&A equipment,
as long as the analysis could be done at the end of
the inspection; he promised to discuss the matter
with the Legal Advisor and the Policy and Review
Branch.


25. (U) BEIK SENDS.

GALLAGHER