UNODC'S MAJOR DONORS MEET; SEND STRONG MESSAGES TO COSTA

UNCLAS UNVIE VIENNA 000361 SIPDIS SENSITIVE E.O. 12958: N/A TAGS:SNAR, KCRM, UN, PGOV SUBJECT: UNODC's Major Donors Meet; Send Strong Messages to Costa REF: ¶A. June 24 Amadeo - Pala e-mail ¶B. UNVIE 072 ¶C. UNVIE 296 ¶D. STATE 57099 ¶E. UNVIE 323 ¶F. UNVIE 306 -------------- SUMMARY -------------- 1.(SBU) In a meeting on July 1, Major Donors to the UN Office on Drugs and Crime (UNODC) reaffirmed the relevance of the Donors' group (MDG),explored ways to ensure the effectiveness of the newly emerged Finance and Governance Working Group (FinGov),and expressed diverse views on dealing with UNODC's current financial crisis. Most Donors voiced concern over the merger of UNODC's Independent Evaluation Unit (IEU) into a new Planning, Monitoring and Evaluation section (PME),and a large degree of skepticism on the proposed Trafficking in Persons (TIP) Global Plan of Action (Plan). The EU stressed their support for UNODC programs in West Africa, and all expressed to the group support for the developing thematic approach for UNODC activities. Under the chairmanship of UK Ambassador Simon Smith, Donors discussed these issues among themselves in a closed morning session. At the end of the morning meeting, Netherlands expressed its opposition to a term extension for Costa. Norway seconded the Dutch position. Netherlands and several other delegations also applauded Mission efforts to coordinate major donor issues prior to the July 1 meeting. 2.(SBU) UK chair conveyed the summary of the morning session to UNODC Executive Director Antonio Costa (Costa) and UNODC senior management in the afternoon open session. UK chair appeared to startle the UNODC officials with his pointed summary, particularly regarding the IEU decisions. Costa welcomed UK chair's call to consult closely, particularly with regard to UNODC's continuing realignment and its development of thematic approaches. Donors emphasized their recognition of the significance of Costa's work to improve UNODC financial standing, and acknowledged the shortfall in contributions to the General Purpose Fund (GPF). On the margins of the MDG meeting, major donors were receptive to an informal U.S. proposal for frequent expert-level meetings to find ways to translate Major Donor recommendations into action. In a follow-on briefing to UNODC member states on July 3, Costa touched upon some of the above issues but primarily focused on the situation in West Africa and the budget. End Summary. -------------- MAJOR DONORS GROUP (MD) AND FINANCE-GOVERNANCE WORKING GROUP (FINGOV) -------------- 3.(SBU) In a closed session in the morning of July 1, Donors discussed among themselves the relevance of the MDG, given the formation of the new Finance and Governance Working Group (FinGov) and the objection of recipient countries over the exclusiveness of the MDG. Nearly every delegation present stated their support for the FinGov process and their desire that FinGov develop into a significant communication tool with the UNODC Secretariat. There was general agreement, however, that major donors should continue to take advantage of the MDG as a critically important avenue of communication with the UNODC Secretariat. Donors agreed that the MDG should not burden the Secretariat, and should be used as a way to both help FinGov set its agenda and bring donor messages to the FinGov process. The UK chair agreed, and cited as an example the regional focus on East Asia that donor countries Australia and Japan have successfully promoted. In addition, the chair urged MDG to operate more like the Geneva Group. Sweden highlighted the need for the MDG to show transparency to the G-77 countries, but the chair expressed his concern that suggestions to establish a regular mechanism to brief G-77 on the MDG meetings could be politicizing. 4.(SBU) USDEL encouraged participants to propose agenda items for the FinGov, and suggested that the initial agenda include a plan for meetings through the end of the year. UNODC could be asked to brief FinGov on its thematic programs, such as its East Asia programs. Participants agreed that giving FinGov topics of discussion could reduce the possibility of the FinGov developing into a forum for ideological debate. The Spanish delegate (likely FinGov co-chair) later indicated he would include the U.S. suggestions on the draft FinGov agenda. Austria noted the evolving role of major donors, observing that it earlier had served as a pledging venue and "beauty contest" for UNODC projects, but now was taking on more of a management/oversight focus. USDEL stressed the benefits of regular, informal consultations on a range of UNODC-related issues among major donors. Delegations welcomed the proposal and acknowledged the importance of increasing our collective knowledge base. -------------- COORDINATE ANTI-DRUG EFFORTS IN WEST AFRICA -------------- 5.(SBU) EU donors highlighted their focus on West Africa. (Note: In a June coordination meeting with the Mission, Sweden stressed that West Africa would be a top geographic priority for Swedish EU presidency. (Ref F.) Netherlands mentioned its contribution of USD 1.5 million to UNODC's programs in Sierra Leone and the European Commission (EC) referred to the Euro 20 million it gave to a Nigerian justice reform program. The EC representative stressed a regional approach, urging capacity building for regional organizations such as Economic Community of West African States (ECOWAS). He claimed that the international community had spent a lot of money fighting cocaine traffic in Latin America, but should do more for Africa. Sweden noted that much could be done bilaterally with Africa in the areas of criminal justice, law enforcement, and improving information collection and analysis. However, Sweden also noted the difficulties of coordination, pointing out there are two existing plans for Africa: the Praia Plan and the ECOWAS Plan. New Zealand called for increased UNODC programs on criminal justice, law enforcement, and information collection and analysis. USDEL stated that U.S. contribution to UNODC for its programs in the region were not huge (USD 2.6 million),and emphasized the need for UNODC to take an active role in coordinating assistance in Guinea Bissau. Based on these discussions, UK chair concluded that donors should encourage UNODC to maximize coordination with countries in the region and with international organizations, and to assess the relative success of institutional building in the region and with other regions in the areas of law enforcement, data collection and analysis of in-country information. -------------- GLOBAL PLAN OF ACTION ON TRAFFICKING IN PERSONS -------------- 6.(SBU) Most donors expressed opposition to the idea of a Global Plan of Action for Trafficking in Persons (GPA), which has been discussed at the UN General Assembly in New York. Australia, while recognizing the value of a global approach in raising awareness, noted that such an exercise could distract from efforts to help countries implement the existing Trafficking in Persons (TIP) Protocol to the UN Convention against Transnational Organized Crime (UNTOC),and from existing regional initiatives such as the Bali Process related to UNTOC. Agreeing with Austalia, USDEL stressed the U.S. commitment to fighting human trafficking, but through the TIP Protocol. Spain supported the Australian and U.S. position, and described a GPA as premature. Canada, Sweden, Netherlands, UK, and Germany voiced opposition to such a GPA, noting the distraction from TIP Protocol, the costliness of mobilizing the General Assembly (GA) on the issue, and the inappropriateness of New York as the venue for TIP discussions. Austria was the lone donor supporting a GPA, claiming it could raise awareness. France was ambivalent, saying that the New York and Vienna processes had to be merged. Netherlands was particularly vocal against a GPA, noting that the EU had stated a common position at the GA in May against such a Plan. The Dutch representative urged UNODC to be "neutral," and expressed discomfort that the discussions on a GPA are taking place in New York, while the experts are in Vienna. There were heated exchanges between Netherlands and Austria, with Austria denying there was a common EU position in the GA opposing a GPA, and Netherlands citing the EU statement from the GA report. Finally, Sweden, which had just assumed the EU Presidency that day, intervened to say EU member states would sort out the EU position on a GPA in a separate meeting. The UK chair concluded that there was a large degree of skepticism on a GPA because of concerns on its potential effects on the implementation of existing instruments. In the event that a GPA could not be avoided, donors generally agreed that Vienna experts would need to be closely involved in any GPA process. -------------- SUPPORT FOR RE-ALIGNMENT -------------- 7.(SBU) In the face of a short fall in its General Purpose Funds (GPF),UNODC is re-aligning its Operations and Treaty Affairs divisions (Ref B). MDG indicated its support for the realignment. USDEL praised the realignment process as a move in the right direction, and stressed our support for the thematic program approach - particularly as a vehicle to help determine donor funding priorities. USDEL noted that the U.S. provided USD 1.2 million for GPF last year and this year would seek to maintain that funding level. Germany reported it would not be increasing its GPF. Sweden, a major contributor to the GPF like other Nordic countries, indicated that next year it would not be able to fund the UNODC World Drug Report, which has been financed solely by Swedish contributions to date. -------------- LOSING THE INDEPENDENT EVALUATION UNIT (IEU) IN THE PROCESS -------------- 8.(SBU) UNODC plans to consolidate the IEU and the Strategic Planning Unit (SPU) into a new Planning, Monitoring and Evaluation Section (PME). In the informal expert-level consultations Mission conducted running up to the July 1 meeting (Ref A),the majority of MDG countries expressed serious concern about such consolidation. At the July 1 meeting, nearly all indicated support for a PME (and internal stocktaking) but stressed the need to safeguard an independent evaluation process in order to promote accountability and transparency within the UNODC. The UK noted that it had been "surprised" by Costa's decision to merge the IEU, especially after donors at the previous meeting (December 2008) exhorted UNODC to empower the IEU, and the 2007 UN Office of Internal Oversight Services (OIOS) report stressed the need for IEU's operational independence. Noting its recent decision to fund the IEU, Norway indicated that it would now need proof that such independence would be maintained after the merger. USDEL, voicing support for the creation of the new PME, sought clarification on how the independence of evaluations would be maintained. USDEL suggested that, in order prevent a backlog of reports, PME give management a set period of time (30 days) to respond to evaluation reports and that PME should release the evaluation report first, and management response later, if management response takes longer than 30 days. Sweden added that it might cut its funding if the IEU ceases to be independent. (UNODC told us subsequently that the IEU would be retained and funded as an independent project that the Europeans and others could pay for). -------------- COSTA EXTENSION TERM LIMITS -------------- 9.(SBU) At the conclusion of the closed morning session, Netherlands unexpectedly asked for donors' position on Costa's quest to seek an extension when his second term expires in May 2010 (Refs C, D and E). Netherlands advocated a "strict application" of the two- term limit principle. Norway agreed, indicating that it planned to uphold the earlier UNGA resolution on term limits. After the morning session concluded, and promted by the delegations' questions about U.S. view, USDEL, using Ref D talking points, informed Norway and The Netherlands that the U.S. position was to not support an extension beyond two terms. -------------- THE AFTERNOON SESSION -------------- 10.(SBU) MDG held an afternoon session with Costa and senior UNODC management, including the directors of all the divisions. UK Chair summarized conclusions regarding donors' views on FinGov, West Africa, their concerns about and opposition by many countries to a possible GPA on human trafficking, their support for UNODC realignment and thematic approach, and their serious concern about the proposed consolidation of the IEU. Costa responded that notwithstanding previous donor exhortation for an independent IEU, UNODC's current financial crisis is forcing it to merge the IEU into the PME, since UNODC is unable to fill the position of the IEU chief. Costa stressed that he did not contest the need for independent evaluation and would ensure the integrity of evaluations, including by presenting evaluation reports simultaneously to both member states and the UNODC management. (Note: In a July 22 meeting, UNODC Operations Division Director Francis Maertens (Maertens) told Charge that Costa had heard donors' message loud and clear, and is considering retaining the IEU as an independent unit. End Note.) -------------- Costa on UNODC Resource Issues -------------- 11.(SBU) Costa noted that UNODC resources have grown fourfold in the past few years. Therefore, UNODC has to break down the walls between divisions by formulating a thematic and programmatic approach, to make "one" UNODC. Adding that FinGov had "room for improvement," he also said that the two Commissions (one on drugs, and the other on crime) were "one too many." Reporting the well known fact that UNODC is suffering a shortfall of "USD 2- 3 million" in the GPF (Ref B),and with no real likelihood of an increase to the regular budget, he has ordered cost cutting across the board, including the freezing of vacancies and abolishment of posts. UNODC financial officer Chris Kirkcaldy expanded on the dire financial situation, highlighting the 25 percent drop in GPF that necessitated elimination of 29 positions (only 6 of them vacant) and the merger of SPU and IEU. 12.(SBU) (Note: in his July 3, Mid-Year briefing to all member states, Costa reiterated these comments, adding that although it was costing money in the short term to reduce staff, this cost would be offset next year and realized as a net gain for UNODC in later years. Maertens explained that UNODC's realignment of the Operations and the Treaty Affairs divisions was the result of competition for funds among different UNODC divisions, and that a joint directorate would ensure effective funding within UNODC, as well as increase efficiency in administrative functions such as travel and recruitment. End Note.) 13.(SBU) Costa offered alternative funding suggestions, such as a surcharge for special funds, a biannual pledging conference, which he described as "hard to organize," and having national governments share the cost of UNODC programs in their countries. Sweden spoke against pledging conferences as a "waste of money." Canada, one of the largest donors, indicated it was considering a slight increase in GPF contributions, and would be willing to consider supporting an increase in Regular Budget if UNODC could make a convincing case for it. USDEL explained the need to earmark our contributions, and pointed out that our earmarked contributions are assessed the full 13 percent administrative recovery cost (without naming those donors that do not pay the full amount, such as the EC). USDEL also stated our hope to sustain or increase our GPF contributions. Japan stressed the need to "honor" UNODC mandates based on the (drug and crime) conventions. There were many comments from donors, e.g., Sweden, Germany, Netherlands, and Norway questioning the IEU merger. -------------- UNODC Urged to Increase Coordination in West Africa -------------- 14.(SBU) UK Chair Ambassador Smith summarized donor discussions, urging "coherence" at national, regional and inter-regional levels, an "integrated" response for UN to "deliver as one." There were calls for a long-term strategy, and increased coordination and consultation with member states as well as the need to focus on building capacity in criminal institutions, law enforcement and information collection and analysis. Maertens explained that UNODC understands the importance of ECOWAS ownership and is there to assist it. He stressed the importance of capacity building, mentioned the West Africa Initiative in New York that plans to work with Interpol, the EC, and countries such as Sierra Leone and Guinea Bissau. Maertens added that the ECOWAS plan also involved integration with other UN offices such as the Department of Political Affairs (DPA) and the Department of Peacekeeping Operations (DPKO). 15.(SBU) In Costa's July 3 mid-year briefing to member states, he and Maertens detailed at length the ECOWAS plan and the West Africa Coast Initiative, which would be launched in New York later this month. Costa's briefing focused on the connection between organized crime and drug trafficking in West Africa. He said UNODC had produced a threat assessment for West Africa which would be unveiled in New York, which would include information on a range of trafficked items in West Africa, including drugs, women, arms, and "e-waste" (outdated computer hardware). He added that funding for the "World Drug Report" was in question and urged other countries to "chip in" to fund its publication in the future. (Note: Sweden has been the sole funder of this Report. Many countries indicated their frequent use of the statistics contained in the report. The African countries, in particular, expressed their support and appreciation for UNODC's efforts on the continent. Maertens also briefed on the recent Carribean/Central American Ministerial for which a number of countries from those regions also voiced appreciation and support. End Note.) -------------- COSTA ON THE TIP GLOBAL PLAN OF ACTION -------------- 16.(SBU) UK Chair Ambassador Smith highlighted major donors' skepticism of the utility of such a plan and their priority to promote the implementation of existing TIP instruments. UNODC TIP chief Doris Buddenberg asserted that the UN General Assembly (UNGA) discussion on the merits of such a plan were inconclusive and it was unclear about the form of such GPA , whether it would be like the UNGA Special Session (UNGASS) Action Plan or a political declaration. She noted that it would be up to the Member States to drive the process. UK urged the inclusion of Vienna expertise in any future exercise. Netherlands charged that UNODC had not been neutral in the debate of the merits of such a Plan. Canada seconded the Dutch position in calling for UNODC neutrality, and also warned UNODC not to expend "significant" resources to this exercise. Costa responded that the UNODC was not taking sides and had spent "zero resources" on such a Plan. -------------- Informal U.S. Proposal: How to Implement Major Donor Conclusions -------------- 17.(SBU) In the morning session, Netherlands and several others complimented the U.S. for the expert-level coordination meeting it held (Ref A) prior to July 1. In fact, they welcomed the U.S. suggestion made on the margins of the July 1 meeting, to have major donors meet regularly or frequently at an informal, expert level, in order to follow up on the implementation of priorities agreed at the semi-annual ambassadorial-level MDG meetings. There was general agreement that an expert- level meeting to coordinate ideas for the first FinGov would be a good start to inaugurating such a mechanism. Along with FinGov strategizing, topics for future informal expert-level meetings could include gathering information from UNODC on the independence of evaluation in the new PME unit, further exchange of information on funding priorities, and further discussion of regional programs such as East Asia and West Africa. -------------- COMMENT -------------- 18.(SBU) Participants were clearly very pleased with the frankness of discussion in the closed morning session, one of the factors for their strong support to retain the MDG mechanism. This trend, renewed in June 2008, to move away from prepared long UNODC briefings, to freer discussions among the donors, and clearer messages from the donors to UNODC has only strengthened participant's positive assessment of the MDG's utility. Costa and the UNODC leadership were clearly perturbed by the coordinated, and somewhat strong, message from the Major Donors on various issues; One result of this is our understanding that Costa is reconsidering his earlier plan to abolish the IEU. Regular stocktaking via informal meetings at the working group level would likely have a positive impact on UNODC and can easily become a vehicle to encourage further improvement in UNODC management of priorities and programs. Given the renewed sense of initiative coming out of the MDG meeting, USG should work hard to ensure that we retain this energy and direction--especially with regard to setting the agenda of the FinGov and channeling its activities to constructive areas of discussion. END COMMENT. PYATT