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