WHITHER A U.S. VISION FOR FINANCING AND GOVERNING UNODC

UNCLAS UNVIE VIENNA 000386 SIPDIS C O R R E C T E D C O P Y (REMOVED SENSITIVE CAPTION) E.O. 12958: N/A TAGS: PREL SNAR KCRM UNODC CU SUBJECT: WHITHER A U.S. VISION FOR FINANCING AND GOVERNING UNODC REF: (A) UNVIE VIENNA 135 (B) UNVIE VIENNA 72 (C) UNVIE VIENNA 361 ¶1. Summary: Following a year of difficult negotiations surrounding its creation, the UNODC working group on finance and governance issues (FinGov) is poised to hold its first meeting before mid September. With Cuban Ambassador Norma Goicochea Estenoz as one of FinGov's co-chairs, the U.S. faces an accomplished, aggressive, and dogmatic negotiator who we expect will push the group towards recommendations contrary to U.S. UN management objectives. In order to deflect the possibility of the FinGov review working at odds with U.S. positions on finance and governance, in the short-term, UNVIE has urged member states and the UNODC Secretariat to use FinGov as a forum for informal dialogue aimed at increasing communication and understanding of the UNODC's financial and management situation rather than as a group focused on micro-managing UNODC's financial or governance decisions. To this end, UNVIE will host an expert-level meeting among like-minded countries in order to develop possible agenda items and objectives before the first FinGov meeting. Despite these perils, FinGov presents the U.S. with a unique opportunity to advance our interests in good governance while at the same time building bridges to new partners, particularly G-77 states, through the process of re-evaluating procedures such as increasing soft-earmarked contributions and unearmarked contributions to UNODC's General Purpose Fund (GPF). Finally, FinGov presents an opportunity to examine the allocation of UN Regular Budget resources provided to UNODC to determine whether its slice of the UN pie is commensurate with the important tasks that have been charged to UNODC. A clear set of U.S. objectives for UNODC finance and governance issues tabled early on in the FinGov process would help ensure U.S. priorities in this regard are advanced in Vienna. End Summary. -------------- A LOOK BACK AND THE WAY FORWARD -------------- ¶2. Over the past year, sharp differences have emerged among Vienna delegations regarding how to manage the UNODC's financial situation. Disagreements run strongest around the UNODC's share of the UN Regular Budget. The U.S., supported by Japan, has ensured no formal recommendations have evolved in Vienna for a New York review of UNODC's portion of the Regular Budget. The U.S. has also historically opposed alternative funding mechanisms such as a voluntary indicative scale assessment or other similar arrangements. G-77 states, as well as a number of EU partners, have criticized our approach, with some accusing the U.S. of not taking steps to ensure the UNODC attains appropriate funding levels to carry out its mandated functions. On the other hand, U.S. attempts to encourage states to address some of UNODC's financial difficulties by focusing on measures to streamline the organization, to increase efficiencies, and to emphasize the role of the Commissions have not been embraced by either G-77 countries or a number of EU states. ¶3. On July 2, 2009, a joint extended bureau meeting of UNODC's two governing Commissions nominated Spanish Counselor Igacio Ruiz and Cuban Ambassador Norma M. Goicochea Estenoz as co-chairs of FinGov and encouraged them to prepare the first meeting's agenda. Although no date has been set, we expect it will be sometime in September and that the agenda will likely focus on UNODC's current financial crisis and UNODC's ongoing attempts to realign its secretariat (Ref B). (Note: Ambassador Goicochea is a savvy UN operator with previous experience in New York and an interest in UN budget issues. But her combative style in Vienna is troublesome to many delegations - including some within in the G-77. Mission holds little hope that she will forsake this style when chairing FinGov. Further, while the U.S. is supportive of Ruiz, his rank, mild manner, and possible differences with U.S. on some management issues do not indicate that he will be a strong counter-balance to Goicochea. End note.) -------------- SHORT-TERM FINGOV GOALS -------------- ¶4. Short term U.S. term priorities for FinGov are clear. It will be critical that we work to channel FinGov towards informal sessions, with the objective of enhancing member state dialogue with UNODC on financial and governance issues, as well as encouraging further development of UNODC initiatives to better manage its priorities. For example, UNODC has developed a number of thematic and regional programs that deserve close attention, such as their Southeast Asia and West Africa initiatives. Approaching programs from a thematic or regional perspective has helped UNODC to better integrate its wide range of activities, thereby streamlining management and avoiding duplication of efforts. FinGov should be a forum to encourage further such efficiencies and to develop discussion among states on how they propose to interact - and fund - UNODC based on its new thematic/regional approach. UNVIE believes it would be counter to U.S. interests to raise the thorniest of issues, such as the debate to increase UNODC's share of the UN Regular Budget, at the outset of the FinGov process. Preventing discussion on such issues would, in fact, be a concrete FinGov goal itself. The U.S. delegation began implementing this strategy at the July 2009 UNODC Major Donors meeting by providing ideas for concrete FinGov agenda items, including a discussion of UNODC's thematic approach and a UNODC briefing on a specific thematic area, to the Spanish FinGov co-chair (Ref C). UNVIE will continue this momentum by organizing an expert-level meeting of Major Donors in advance of the first FinGov meeting to flesh out agenda recommendations. -------------- LONGER-TERM RECOMMENDATIONS TO STRENGTHEN UNODC -------------- Maintaining Dominance of Commissions -------------- ¶5. We should encourage the UNODC to focus its work so that it falls squarely within the Commission on Narcotic Drugs (CND),the Commission on Crime Prevention and Criminal Justice (CCPCJ) and (most importantly) anti-crime and drug control convention mandates. UNODC works best when its charted path has been approved by as many member states as possible, and when member states are jointly committed to action in established substantive areas. The Commissions and Conventions provide such a well-charted path. Therefore, the U.S. should look strategically at UNODC, and ensure UNODC's priorities and funding remain within the framework of its mandate, with the ultimate goal of ensuring that the Commissions also prioritize UNODC's activities in a similar manner. ¶6. At the same time, the U.S. needs to take a leadership role in focusing the CND and the CCPCJ. We should lead by example, encouraging a limit on Commission meeting days as an efficiency and cost-saving measure, even as some delegations argue for longer Commission meetings. We could also push to establish strict deadlines for submitting draft resolutions. FinGov can be a good setting to advance these objectives including by urging member states to refrain from submitting extraneous resolutions that are not clearly linked to UNODC's updated mandates, such as focusing its work around regional and thematic programs, and improving member states' ability to collect, report and analyze data related to drugs and crime. The U.S. should be prepared to persuade and lead other member states in refusing to sign on to a resolution unless member states express intent to financially support any related UNODC directives. But Supporting Discussion on Funding Flexibility -------------- --- ¶7. FinGov presents a real opportunity for the U.S. to think big in order to advance U.S. priorities of reforming and empowering the UN within the UNODC context. Many member states have ambitious visions for UNODC - some of which are contrary to U.S. interests. For example, Argentina continues to push a voluntary indicative scale funding mechanism, and Egypt and others want to "tax" hard earmarked funds in order to discourage such donations. The U.S. needs to be equally ambitious; while protecting management gains already achieved, we should reach out to demonstrate that the U.S. remains committed to the long-term viability of UNODC and the UN. In this regard, Mission would welcome USUN and IO advice about whether the U.S. might support a recommendation to increase the allocation of UN Regular Budget resources provided to UNODC by the Fifth Committee in New York. This endorsement would reinvigorate U.S. leadership in the UNODC context and rebut assertions that the U.S. and other donors only view UNODC as a contractor to implement donor-driven projects. While we defer to colleagues in New York regarding the opportunity costs of such an approach, it is clear from discussions with U.S. subject experts that UNODC provides a high return on investment on U.S. priorities. In the FinGov context, this issue should be raised only after it is clear whether the group will be a productive forum. Any U.S. signal in FinGov that we might be convinced of the merits of seeking increased Regular Budget funding would likely be a key goal of G-77 countries and (if the Department decides to move in this direction) should only be put forward following tangible signals that these countries are committed to working together on finance and governance issues in a serious and substantive manner. In such a scenario, discussions of Regular Budget allocations could be a good bridge to the G-77 in Vienna. ¶8. Even a moderate increase would signal to the world that we take UNODC's work seriously and help direct its work towards technical assistance aimed at implementing Convention obligations. The UNODC currently receives just 1 percent of the UN's total Regular Budget - an extremely modest sum for an office that is the guardian and facilitator of the sixteen terrorism Conventions, the three drug Conventions, and the UN Convention Against Transnational Organized Crime (UNTOC) and the UN Convention Against Corruption (UNCAC). The U.S. served as the primary architect of the UNTOC and UNCAC and has used the UNTOC over 25 times for extradition and mutual legal assistance requests alone. UNODC efforts to promote practical application and implementation of the Conventions, directly supports USG interests. However, lack of a stable and predictable funding base has limited its abilities to engage a broad spectrum of countries. By allowing a review of the Regular Budget to proceed, we could engender considerable good will from the G-77 and others, and use it as leverage to advance other critical USG priorities. Soft Earmarks as a Mid-Point Possibility -------------- ¶9. In the interim, the U.S. should consider allocating an increased share of existing U.S. funds to "soft earmarks" directed at those thematic and regional programs which address our priorities. We could target UNODC activities which are the subjects of Convention-based obligations. This could include precursor chemical control, anti-corruption assistance, combating trafficking in persons, and illicit crop monitoring. Soft-earmarking - not specifying for which specific projects UNODC must use such contributions - would help develop a stable source of resources for UNODC to draw from in implementing projects in U.S.-priority areas in a manner that would allow the UNODC the flexibility it needs to operate while ensuring predictability of funding over time. A number of our EU partners already soft earmark significant contributions, and their support of this practice signals a confidence that their funds will be used responsibly and not against their national prerogatives. FinGov could prove a good forum to discuss soft earmarking and to learn further about the merits (and weaknesses) of this funding mechanism. ¶10. In addition, U.S. could consider working with other major and emerging donors to provide UNODC with a substantial annual pledge of "soft earmarked" funds to backstop treaty-based technical assistance work and other commonly-held priority areas. Again, such an effort would liberate the UNDOC to more effectively act in such areas while still being responsive to member states' priorities and policy guidance. This suggestion does not undermine the continued use of hard-earmarking. To the contrary; the U.S. should continue to reserve its prerogative as a donor to contribute to specific projects that are of the highest priority. Nevertheless, even where hard-earmarking continues, we should seek to ensure that we are working within UNODC's more programmatic philosophy whenever possible. -------------- Comment -------------- ¶11. This cable contains only a sampling of some of the issues that could arise within the FinGov context. Regardless of the issues raised, in order for FinGov to be a constructive forum the U.S. needs to be one step ahead, with a strategic, not just tactical, vision of how we want to engage with member states and the UNODC on finance and governance issues. UNVIE will continue to provide Washington with recommended elements to include in this vision of what the UNODC should look like, from a financial and governance perspective. End comment. Pyatt