CWC: INDUSTRY CLUSTER MEETINGS, JULY 9, 2009

UNCLAS THE HAGUE 000436

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, DENYER AND CRISTOFARO)
NSC FOR LUTES
WINPAC FOR WALTER

E.O. 12958: N/A
TAGS: PARM PREL EIND OPCW CWC
SUBJECT: CWC: INDUSTRY CLUSTER MEETINGS, JULY 9, 2009

REF: A. TS NON-PAPER ON 2A/2A* LOW CONCENTRATIONS
QUESTIONNAIRE RESULTS (07/08/09)

B. FACILITATOR'S DRAFT DECISION ON 2A/2A* LOW
CONCENTRATIONS (07/08/09)

C. TS NON-PAPER ON OCPF DECLARATION ENHANCEMENTS
(07/01/09)

D. THE HAGUE 362

E. STATE 52991

This is CWC-40-09.


1. SUMMARY: Both industry consultations on July
9 included presentations and discussion of new
technical data gathered to aid consultations, along
with a continuation of discussions from the May
consultations on low concentration limits for
Schedule 2A/2A* chemicals and enhancements to the
OCPF declaration regime. Little progress was made
in either consultation, and no further steps were
taken to advance or formulate draft decisions for
the Schedule 2A/2A* or OCPF consultations. Though
some new views were brought forward, delegations
primarily repeated long-held positions. END
SUMMARY.

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


2. Facilitator Giuseppe Cornacchia (Italy) opened
the session by introducing the new Executive
Council Vice-Chair for Industry Issues, Sudanese
Ambassador Abuelgasim Idris, and then turned the
floor over to Ken Penman (Senior Information
Evaluation Officer, Verification Division),who
provided a briefing on the responses to the
voluntary questionnaire and the data contained in
the associated Technical Secretariat (TS) non-paper
(ref A). Penman noted that the TS so far has
received responses from 21 States Parties, 15 of
whom reported no Schedule 2A/2A* activity above the
weight threshold. The remaining six States Parties
provided responses accounting for fifteen plant
sites, seven of which are currently declared and
eight which are not. Nine currently-declared plant
sites were included in the results in the non-paper
based on inspection reporting alone. A total of
twenty-four plant sites are included in the
results. Results on eight new plant sites came
from three States Parties, two of which have never
declared any Schedule 2A/2A* plant sites. Based on
open-source information, the TS believes there
could be an additional 10-15 plant sites. (DEL
NOTE: The Chinese delegate later confirmed to
Delreps that China had not responded to the
questionnaire as it already declares all of its
Schedule 2A/2A* facilities, which would account for
at least some of the nine currently-declared sites
not included in questionnaire responses. END
NOTE.)


3. Follow-up discussions on the questionnaire
results revealed predictable and long-held
positions. The UK led off the discussion by
commenting that it wants maximum transparency and
visibility. Gaining sites is attractive while
losing sites is unattractive. The UK noted that
some delegations may view the information as
partial (given that the results did not account for
nine of the presently-declared plant sites),but
contended that the bulk of activities are
represented. Addressing Figure 2 of the non-paper,
the UK indicated it favors the "left side" of the
table, i.e., the lower concentration thresholds,
the lowest of which (less-than-or-equal-to five
Qthe lowest of which (less-than-or-equal-to five
percent) would capture an additional eight plant
sites.


4. The UK comment regarding visibility and
"favoring the left side" was echoed in varying
degrees by Australia, the Netherlands, Switzerland,
Italy, Ireland and Finland. South Africa noted
that it regulates at 10% and is flexible to go much
lower, but inherently believes this is a political
issue. South Africa emphasized that these are
scheduled chemicals and should be dealt with due to
their relative toxicity. South Africa commented
that, compared to the ongoing discussions on OCPFs,
significant gains can be achieved by setting a
common threshold for Schedule 2A/2A* chemicals with
a small impact.


5. China noted that a 0.5% threshold would add
eight plant sites, bringing the total of Schedule 2
plant sites to 169 (a 5% increase). Since only 21
States Parties responded and over forty States
Parties engage in declarable industry activity, the
increase of Schedule 2 plant sites may be upwards
of 8%.


6. Delrep commented that the questionnaire
results are not particularly surprising and that
new sites are still captured up to 10%. Del
further called for more flexibility and compromise
on all sides. Germany noted its flexibility,
supported the U.S. position and commented that the
questionnaire data is partial because not all PFIB
sites have been included. Thus, it is impossible
to determine what is gained or lost without all the
sites included. Furthermore, Germany argued that
visibility alone is not an aim in and of itself and
that the survey was not necessary if the goal is to
capture the maximum number of plant sites.


7. Apparently aware that its interventions in the
May consultations were confusing to many
delegations, Japan attempted to clarify its
position and generally explain its goal in the
"road map" tabled during the previous meeting.
Japan noted that the information in the non-paper
alone does not set the grounds for a regulatory
threshold; the first step still should be to set
the regulatory objectives. Although this
discussion was more concise than the May
intervention, it did not appear to garner any more
support from other delegations.


8. Halfway through the consultation, Cornacchia
commented that the group's "inclination is to the
left" where more plant sites are gained. In an
attempt to make progress, he suggested narrowing
the threshold under consideration to a reasonable
range, proposing 0-10% and asked if there was any
opposition to this. When no one else spoke up,
Delrep stated that the U.S. would not go against
consensus on narrowing the threshold range under
discussion; however, having previously noted the
United States' flexibility to move from 30% down to
10%, Delrep pointed out that Cornacchia's proposed
range of 0-10% greatly constrained any further U.S.
flexibility. Japan quietly did not support the
proposal, reiterating its mantra that a logical
reason is needed to define a particular range.


9. The consultation took an unexpected turn when
Russia proposed returning to earlier discussions on
dealing with each of the three chemicals
individually, explaining that they are too unique
to be treated collectively. Russia acknowledged
that, though the proposal is not new, it may be
Qthat, though the proposal is not new, it may be
time to reconsider this approach. Japan supported
the proposal. Germany commented that the Russian
proposal may be an easier solution to addressing
the issue. Italy reminded delegations that this
approach was tried and rejected by States Parties
during the previous consultations facilitated by
Cornacchia's predecessor. Though Italy favored
this path in the past, it would only lead to delay
at this point. Delrep commented that the U.S. had
tabled a differentiated approach previously, which
had been rejected. Delrep stated that that, if the
Russian proposal can advance current discussion,
the U.S. might reconsider it. However, Delrep
stressed that, while the U.S. appreciates the
interest of examining the issue logically, it is
time to make a decision. Sharing Italy's concerns,
the UK (echoed by Australia, Ireland and the
Netherlands) expressed its preference is to handle
all three chemicals simultaneously, it can support
splitting them up if it is quicker. However, doing
so would not change the UK's view on appropriate
thresholds.


10. Cornacchia then raised his draft decision
(ref B),and a brief discussion ensued. He then
solicited views on forwarding the draft decision to
the Executive Council as a Conference Room Paper,
in order to give some official status to the on-
going consultations, which he explained so far has
relied on informal non-papers. The U.S., Australia
and the UK supported Cornacchia's proposal, but
India, Japan and Russia opposed it, so Cornacchia
decided not proceed with asking the TS to make the
draft decision a Conference Room Paper.

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


11. Facilitator Marthinus van Schalkwyk (South
Africa) began his consultation with a brief
introduction before asking Bill Kane (Head,
Industry Verification Branch) to present the most
recent TS informal paper on the R factor (ref C).
Kane noted that the charts in the paper don't
reveal the whole picture, specifically that
inclusion of an R factor shifts sites within each
of the three groupings (i.e., high, medium and low
relevance). In 2008, thirty of the 118 inspected
sites (25%) were in the low relevance category and,
with the R factor included, 50% of the 118 plant
sites would be in the low relevance category.


12. India followed Kane's remarks with a lengthy
intervention on its objection to the proposed
approach. Citing paragraph 9.65 of the report of
the Second Review Conference (RevCon),India
commented that the RevCon mandated that additional
data must not impose any additional declaration
obligations. Utilization of voluntary submission
of R-factor data, however, would adversely impact
States Parties that do not adopt the proposal
because it would result in these States Parties
having higher A14 scores. India proposed tweaking
the existing A14 system rather than instituting new
obligations.


13. Both China and Iran also cited the report of
the Second Review Conference in justifying their
concerns with the proposal. China commented that
the additional data brings an additional
declaration burden and that the proposal needs to
be looked at in conjunction with the OCPF plant
site selection methodology.


14. Brazil, France, the UK, the Netherlands and
Australia commented that provision of the data
imposes no real burden and should not be difficult.
The UK and Australia both noted that their chemical
industry has responded positively to including the
additional data in their declarations. The UK
Qadditional data in their declarations. The UK
opined that it is more burdensome to continue
inspecting less relevant sites. Interestingly, the
Netherlands announced that it has begun calculating
R-factor scores for all its OCPF sites to ascertain
the impact, and encouraged other States Parties to
undertake the same analysis.


15. Delrep commented that States Parties must
understand the impact of proposed changes before
agreeing to adopt them, given that the proposal
represents a permanent addition to declaration
forms for thousands of facilities. The proposal
should be adopted only if there are clear and
significant improvements to the selection process;
at this time, there is no clear indication any
improvement would be substantial. Delrep also
noted that probability of selection is a factor of
both the A14 score and geographic distribution, and
that the impact of the R factor may be tempered
depending on the geographic distribution
calculation.


16. Germany repeated its view that, for the sake
of simplicity, the proposed declaration changes
could be reduced to one field indicating whether or
not the process is continuous (as opposed to the
four fields included in the current proposal).
Germany encouraged others to consider its proposal
and comment on it.


17. Cuba cited paragraph 8 of the non-paper,
observing that the analysis conducted to date has
been only for a small fraction of declared OCPF
sites (118 out of 3,800). Cuba and France both
called for a simulation of all declared sites to
get a better picture of the impact of R-factor
data. Kane and van Schalkwyk agreed to consider
the request. Peter Boehme (Senior Industry
Officer, IVB) reminded delegations that the issue
is only about probability, not certainty. There
will always remain some probability, no matter how
slight, of selecting a low relevance site, such as
a urea plant, for inspection.


18. Van Schalkwyk noted the difficulty in moving
forward at this time and in basing conclusions on
an evaluation of 118 sites. Surprisingly, he went
on to state that nothing could be done if States
Parties choose to institute the proposal
voluntarily or if the TS uses the additional
information in selecting sites for inspection.
India and France -- although France supports the
proposal -- responded that discussions should avoid
encouraging implementation of the proposed changes
voluntarily or on an ad hoc basis, either by States
Parties or the TS.


19. Van Schalkwyk concluded by observing that
while there is some strong support for adopting the
R factor, there also is doubt that it constitutes
real change. Countering India's opening remarks,
the facilitator noted that changes to the
declaration system can be implemented if they solve
a problem. The facilitator agreed to explore
running a simulation for all 3,800 sites but
commented that if this were done, States Parties
must accept that it only represents a guess. The
facilitator decided not to pursue a draft decision
until he can ensure there will not be a substantive
fight over its contents.


20. BEIK SENDS.

FOSTER