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UNCLAS SECTION 01 OF 04 USUN NEW YORK 000930 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: UNDP UNFPA EAID SOCI
SUBJECT: UNDP AND UNFPA EXECUTIVE BOARD MEETING, SEPTEMBER 
8-12, 2008 - WRAP-UP REPORT 
 
¶1.  This cable reports on the Executive Board session of the 
UN Development Program (UNDP) and UN Population Fund (UNFPA), 
September 8-12, 2008 in New York. 
 
------- 
Summary 
------- 
 
 
¶2.  The Board accepted a management "roadmap" to discuss the 
resumption of UNDP operations in North Korea.  The Board 
approved an accountability policy, which sought to enhance 
the independence of the internal oversight bodies of UNFPA 
and UNDP and to establish procedures for Board members to 
access UNDP and UNFPA internal audits.  China initially 
blocked this decision during the formal Board session, but 
joined consensus a week later at an extended meeting.  The 
Board approved the use of direct sector budget support and 
pooled funding on a pilot basis.  Germany and France made a 
joint statement requesting the delay of UNDP's new Mauritania 
program, but declined a U.S. offer to join the statement. 
The Board raised the limit on management's "ex gratia" or 
discretionary spending to 75,000 USD per year, and removed 
the cap on paying emergency humanitarian relief for staff and 
family injured or killed while on duty, with an immediate 
reporting requirement.  The Board discussed and approved 
several country programs.  UNFPA Executive Director Thoraya 
Obaid announced that the UN had agreed that she continue in 
her position for an additional two years. 
 
--------------------------------------------- ----- 
North Korea Program - Requirements to Re-establish 
--------------------------------------------- ----- 
 
¶3.  UNDP's Asia and Pacific Regional Bureau Director 
presented a five-step roadmap to explore the possible 
resumption of a UNDP program in North Korea at the request of 
DPRK authorities: 
 
-- UNDP management undertakes dialogue with member states on 
the way forward; 
 
-- UNDP management begins preliminary discussions with DPRK 
government on the recommendations from the Nemeth report 
(external review panel of past UNDP operations in North 
Korea); 
 
-- UNDP sends a team to DPRK once the Board endorses the 
roadmap; 
 
-- UNDP management proposes a program of work at the January 
2009 Board session (assuming talks with the DPRK proceed 
satisfactorily); 
 
-- If the Board approves a program, UNDP recruits staff and 
re-opens the DPRK country office. 
 
¶4.  USDEL supported management's proposal to review the 
conditions carefully, and consult with the Board before 
resuming operations.  USDEL urged UNDP management, as it 
moves forward, to further address the findings and 
recommendations of the Independent Panel and the UN Board of 
Auditors who reviewed past UNDP activities in the DPRK. 
 
¶5.  Responding to this proposal, the North Korean delegation, 
while asking UNDP to re-open its Pyongyang office and resume 
the suspended program immediately, did not object to the 
roadmap per se.  Several delegations, including Sweden, said 
UNDP was not moving fast enough, while others agreed with 
management that the January 2007 Board decision on management 
and programmatic criteria for UNDP operations in North Korea 
 
USUN NEW Y 00000930  002 OF 004 
 
 
provided the basis for moving forward.  In concluding the 
discussion, the President of the Board asked for and received 
the Board's endorsement (no member raised an objection) of 
the roadmap. 
 
--------------------------------------------- ----------------- 
Accountability Decision - China blocked, then joined consensus 
--------------------------------------------- ----------------- 
 
¶6.  The adopted decision, accepting with minor modifications 
management's draft Accountability Framework, achieved key 
U.S. objectives to enhance the independence of three UNDP 
internal oversight bodies, the Audit Advisory Committee 
(AAC), the Office of Audit and Investigation (OAI), and the 
Ethics Office (EO) by requiring: 
 
 the Ethics Office to report directly to the Board (AAC and 
OAI already report directly to the Board) and; 
 
 UNDP management to avoid conflicts of interest in the 
appointment of the directors of OAI and EO, and the members 
of the AAC, and to use previously defined criteria, including 
professional qualifications. 
 
¶7.  In a statement following the adoption of the decision, 
USDEL requested UNDP management to develop and share with the 
Board as soon as possible a process to avoid conflicts of 
interest in the appointment of key personnel for these three 
offices. 
 
¶8.  The decision also established criteria and a procedure 
for access by board members to UNDP, UNFPA and UNOPS internal 
audit reports: certain sensitive information may be withheld 
or redacted, no "retroactive" access to old (pre-January 
2008) internal audits, and information gleaned from audit 
reports be treated as confidential. 
 
¶9.  In the negotiations, the Chinese delegation objected to 
allowing management to release internal audits to Board 
members upon request and pressed hard for the Board and 
"concerned government" to play a role, along with management, 
in making decisions on access for each internal audit 
request.  According to some G77 delegations that caucused 
with China, the Chinese were concerned about U.S. accessing 
UNFPA internal audits of its China programs.  UNFPA 
management had refused past U.S. requests for internal audits 
for the purpose of certifying whether UNFPA was engaged in 
activities that supported forced abortions and other coercive 
family planning policies and practices in China (Kemp-Kaston 
certification). 
 
¶10.  USUN and UNDP management engaged the Chinese Mission at 
the PermRep level to break the impasse.  The Chinese finally 
joined consensus on September 19 during a special half-day 
resumed meeting, one week after the scheduled conclusion of 
the Board session.  The adopted decision provided the 
"concerned government" with an opportunity to read and 
comment on the requested internal audit reports, but did not 
specify a role for member states in the Administrator's 
decision to release internal audit results. 
 
------------------------------------------ 
UNDP to Pilot Direct Sector Budget Support 
------------------------------------------ 
 
¶11.  The UNDP Board approved the launch of a pilot period to 
test a mechanism to fund country programs through direct 
sector budget support and pooled funding.  Although this 
general approach had been accepted by the U.S. under the 
Paris Declaration process, we and others were not convinced 
that UNDP should be a part of this funding mechanism or that 
 
USUN NEW Y 00000930  003 OF 004 
 
 
UNDP had the systems in place to do it right.  Although other 
Executive Board members were not willing to support 
additional delay of the pilot while UNDP further elaborated 
procedures and how results would be measured and evaluated, 
we did convince the Board to require UNDP Management to 
provide this information to the Board (by posting it on the 
UNDP website) before any money is released to programs 
through this new mechanism. 
 
--------------------------------------------- -------- 
Franco-German Statement on Mauritania - U.S. Excluded 
--------------------------------------------- -------- 
 
¶12.  Germany and France made a joint statement expressing 
concerns about the post-coup situation in Mauritania.  The 
statement cited the August EU statement calling for the 
return to constitutional order and for the military 
authorities to work with the African Union to restore 
democracy at the earliest opportunity. 
 
¶13.  Germany and France called for a delay in discussing the 
UNDP country program in Mauritania, stating that the 
post-coup conditions will, at a minimum, require adjustment 
to the program. 
 
¶14.  After calling for countries to join the statement in a 
donor group coordination meeting, Germany declined a U.S. 
offer to sign up to the statement.  Germany told the USDEL 
that they did not want to "politicize the Board" - recalling 
the January 2007 DPRK episode, where many developing 
countries criticized the successful U.S. effort to delay the 
approval of the North Korea program as "politicizing the 
Board." 
 
-------------- 
U.S. Statement 
-------------- 
 
¶15.  The head of the U.S. delegation, Ambassador McMahan, 
delivered a statement during the opening session of the 
Board.  He again urged UNDP to focus its programs and 
resources on helping African countries on crisis prevention 
and recovery and the creation of an enabling environment in 
countries to promote sustained growth. 
 
¶16.  He acknowledged the progress that UNDP had made in 
improving the organization's transparency and accountability. 
 He commented on the Accountability Framework, stressing the 
importance of ensuring the independence of the two newly 
established bodies - the Audit Advisory Committee (AAC, 
established last year) and the Ethics Office (established 
this year).  The U.S. statement can be found at: 
www.usunnewyork,usmission,gov/press_releases/ 20080909_236.html. 
 
------------------------------------ 
UNDP Administrator Dervis' Statement 
------------------------------------ 
 
¶17.  Dervis began his statement with a lengthy assessment of 
the global economy, forecasting that growth will be weak 
through 2009.  He accused donors of shuffling resources and 
re-packaging them for "new initiatives," while overall ODA 
resources declined.  In such an environment, he argued for 
meeting commitments to support development programs. 
 
¶18.  He urged member states to accept the proposed system of 
accountability and transparency and the need for change in 
UNDP - making country program information available and 
giving countries access to internal audits. 
 
¶19.  He stated that the UNDP total operating resource level 
 
USUN NEW Y 00000930  004 OF 004 
 
 
had reached 5.2 billion USD, with "core resources" at nearly 
one billion USD.  He noted that the 4:1 ratio between 
"non-core" and "core" is an imbalance, and that he would like 
to see it reach 3:1. 
 
¶20.  Note: the U.S. provides over 100 million USD per year in 
"core resources" (non-earmarked funding that UNDP uses for 
administration and entitlement programming), supplementing 
this with roughly 150 million USD in program-specific 
resources, a non-core to core ratio of 1.5:1. 
 
---------------------------------------- 
UNDP Country Programs Discussed/Approved 
---------------------------------------- 
 
¶21.  The Board discussed country program documents of: 
Angola, Cote D'Ivoire, Congo-Brazzaville, Haiti, Kenya, 
Mauritania, Niger, Timor-Leste, and Venezuela.  The Board 
will approve these documents at the next meeting in January 
2009, unless five or more Board members raise objections. 
 
¶22.  The Board approved the program documents for: Benin, 
Mauritius, Nigeria, and Sudan. 
 
---------------------------------- 
UNFPA Actions and Country Programs 
---------------------------------- 
 
¶23.  In her statement to the Board, UNFPA Executive Director 
Thoraya Obaid introduced the new Director of the Asia Pacific 
Regional Office, Nokubo Horibe.  Obaid stressed the relevance 
of the agenda of the International Conference on Population 
and Development, progress on the Millennium Development 
Goals, and the management of demographic dynamics through 
just and equitable social and economic policies.  To better 
address population and development issues, UNFPA, WHO, 
UNICEF, and the World Bank have agreed to a clearer division 
of labor about their roles in maternal health.  She addressed 
UNFPA's role in combating HIV/AIDS and the prevention of 
violence against women.  Obaid described extensive management 
and administrative improvements.  She concluded her remarks 
with the announcement that the Secretary General had decided 
to extend her term of office for two additional years. 
 
¶24.  UNFPA presented draft country programs for Angola, Cote 
D'Ivoire, Haiti, Kenya, Mauritania, Timor-Leste, and 
Venezuela.  USDEL made technical comments on several programs 
that were well-received by UNFPA staff and country 
delegations and that should be reflected in the final 
programs.  UNFPA also approved country programs for Benin, 
Niger, Nigeria, the Republic of the Congo, and Sudan and 
agreed to extend existing programs in Lebanon and Burundi. 
 
¶25.  The Department thanks those desks/posts that provided 
comments on their countries' programs. 
Khalilzad