VZCZCXYZ0003
RR RUEHWEB

DE RUEHUNV #0386/01 2250700
ZNR UUUUU ZZH (CCY ADX09D62BC MSI9056)
R 130700Z AUG 09 ZDK
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC 9943
INFO RUCNDT/USMISSION USUN NEW YORK 1743
RUCNNAR/VIENNA NARCOTICS COLLECTIVE
RUCNCRI/VIENNA CRIME COLLECTIVE
RUEHUB/USINT HAVANA 0047

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