This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 07 THE HAGUE 002338 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AC/CB, NP/CBM, L/ACV, IO/S 
SECDEF FOR OSD/ISP 
JOINT STAFF FOR DD PMA-A FOR WTC 
COMMERCE FOR BIS (GOLDMAN) 
NSC FOR CHUPA 
WINPAC FOR FOLEY 
 
E.O. 12958: N/A 
TAGS: PARM PREL ETTC AORC RS CWC
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC): SCENESETTER FOR 
34TH SESSION OF THE OPCW EXECUTIVE COUNCIL, 23-26 SEPTEMBER 
 
REF: A. A: STATE 259237 (NOTAL) 
     ¶B. B: STATE 245962 
 
This is CWC-92-03. 
 
(U)  GUIDANCE REQUESTS/RECOMMENDATIONS -- see paras. 13, 14 
and------- 
Summary 
------- 
 
¶1. (SBU) There will be one major topic for discussion at 
EC-34 (budget), a number of key issues of importance to the 
U.S. on which there may be substantial discussion (U.S. 
destruction deadline extension, Article VII) and one question 
that will be difficult to avoid discussing (the ILO decision 
on former DG Bustani).  The U.S. is favorably placed on the 
budget discussion: we are seeking an increase of no more than 
7.5% while most delegations are in the 5-6% range or lower. 
Reaching agreement on a specific number will be quite 
difficult, and may well not be achieved in this EC.  The 
extent to which the U.S. request for an extension of the 45% 
destruction deadline will be an issue will depend much on our 
presentation to the other delegations (particularly on the 
question of the 100% deadline), and whether we will have 
secured Russian agreement to dampen discussion on this 
matter.  On the Article VII action plan, the U.K. facilitator 
is working hard to achieve U.S. goals, but due to objections 
from NAM countrie 
s, there will not be a draft Plan of Action finalized for 
consideration by this EC.  Finally, while we may minimize 
formal Council discussion of the ILO decision on former DG 
Bustani, it will be the elephant in the corner for EC-34, and 
there will be repeated informal queries on how the U.S. wants 
to respond to the decision.  End Summary. 
 
---------------------------------- 
Draft Annotated Agenda Item Three: 
Statement by the Director General 
---------------------------------- 
 
¶2.  (U)  Del expects the DG's statement will focus on 
priorities and his efforts to promote administrative reform. 
 
--------------------------------- 
Draft Annotated Agenda Item Four: 
Status of Implementation of the 
Convention 
--------------------------------- 
 
---- 2002 Verification Implementation Report ---- 
 
¶3.  (U)  Delegations held no consultations on the 2002 
supplemental Verification Implementation Report since 
mid-July. 
 
---- Report on the project to assist States Parties in 
identifying new declarable facilities under Article VI of the 
Convention ---- 
 
¶4.  (U)  The Council is requested to further consider the 
DG's report on this issue (EC-33/S/4 dated 19 June 2003). 
 
---- Planned increase in the Article VI Inspection Programme 
for 2003 ---- 
 
¶5.  (U)  The Council is requested to note the DG's Note on 
this topic (EC-34/DG.11, dated 4 Sept. 2003). 
 
--------------------------------------------- -- 
Draft Annotated Agenda Item Five: 
Recommendation for the Conference of the States 
Parties concerning plan of action regarding the 
Implementation of Article VII obligations 
--------------------------------------------- -- 
 
¶6.  (U)  The Council is requested to prepare a recommendation 
regarding the implementation of Article VII obligations, with 
the objective of fostering the full and effective 
implementation of the Convention by all States Parties to 
enable CSP-8 to develop a plan of action.  Consultations on 
this issue began in early August and a draft Plan of Action 
is under discussion and includes a timetable for full 
compliance by CSP-10 and consideration by the tenth 
Conference of remedial measures if necessary.  Several 
delegations are opposed to the concept of deadlines, a few 
are reluctant to agree to the tenth CSP, and several of the 
more radical NAM are opposed to consideration of any 
reference to Art. XII, including a watered-down reference to 
remedial measures.  Given this opposition, the Facilitator 
(Matthews/UK) indicated he will schedule an additional round 
of consultations post-EC-34 and will strive to achieve 
consensus during subsequent consultations ahead of CSP-8. 
 
----------------------------------------- 
Draft Annotated Agenda Item Six: 
Draft Report of the Organization for 2002 
----------------------------------------- 
 
¶7.  (U)  One consultation took place on the Draft Report of 
the OPCW and several technical corrections were made.  An 
attempt was made to change the statement that all States 
Parties had met the 40% destruction deadline for CWPF's.  The 
Technical Secretariat (TS) argued against this change in 
order to be consistent with the VIR.  However, the statement 
remains technically incorrect at this point because Bosnia 
and Herzegovina have yet to begin destruction activities. 
Del has not received a revised copy of the document. 
 
-------------------------------------- 
Draft Annotated Agenda Item Seven: 
Report of the Executive Council on the 
Performance of its activities 
-------------------------------------- 
 
¶8.  (U)  During informal consultations, Del suggested that a 
reference to the extension of deadlines for destruction of 
Category 1 chemical weapons stockpiles should note that the 
CSP had not approved Russia's request for extensions of the 
45% and 100% deadlines.  The TS proposed to cross-reference 
the OPCW report to clarify that point, and Russia did not 
object so long as the EC report did not introduce any new 
language on the issue.  On Facility Agreements, the ROK 
requested that the report note that the EC had considered a 
draft facility agreement with the ROK, as well as with 
Belgium. 
 
¶9.  (U)  Iran sought to include references to Review 
Conference mandates under confidentiality issues and matters 
concerning Article XI as "Matters under consideration by the 
Council," and requested a reference to the Review Conference 
deliberations on Article XI.  Both Iran and India proposed 
adding references to ISO as a matter under consideration by 
the EC.  The TS explained the rules of procedure covering 
what activities are included in the list, and it is not clear 
whether those proposals will be accepted. 
 
----------------------------------------- 
Draft Annotated Agenda Item Eight: 
Extension of deadlines for destruction 
of Category 1 chemical weapons stockpiles 
----------------------------------------- 
 
---- Russian Deadline Extension Request ---- 
 
¶10.  (U) The local Russian delegation has no information 
about the status of the Russian Federation Request.  Del has 
received multiple indications that a trip by a limited number 
of EC experts and the EC Chairman is planned for the week of 
October 6th to Russian demil sites at Kambarka, Schuch'ye, 
and Gorniy.  The Russian Federation may envisage substantive 
discussion of this issue only after such a trip and thus only 
after the upcoming Council session. 
 
---- A State Party Deadline Extension Request ---- 
 
¶11. (U) Del anticipates that A State Party will provide a 
comprehensive presentation during the destruction informals 
on 22 September on its request for an extension of the 45% 
destruction deadline.  Based on such a presentation, Del 
believes it should be possible to join consensus on a 
recommendation to the Conference to grant this request. 
 
---- U.S. Deadline Extension Request ---- 
 
¶12.  (SBU) Del has encountered no overt opposition to the 
U.S. proposal, as outlined in our information paper (Ref B) 
and Decision Document, but there has been keen interest and a 
distinct discomfort, most notably but not exclusively from 
the German delegation, as to how the U.S. intends to 
explain/address the issue of creating a 45% deadline which 
exceeds the present 100% deadline.  Del believes that this 
question is going to be foremost in the minds of many other 
delegations and anticipates that we will be asked repeatedly, 
if only informally "in the hallway," to explain.  Del also 
does not rule out the possibility of a request for an 
explanation to the WEOG. 
 
¶13.  (SBU) Talking points included in the background paper on 
this issue are helpful in elaborating U.S. methodology in 
deciding to pursue this course of action, but do little to 
address concerns about whether a 45% deadline that exceeds 
the 100% deadline is consistent with the Convention or is 
even logical.  Recommendation:  Del believes Washington 
should give strong consideration to pursuing an extension in 
principle of the U.S. 100% deadline.  The U.S. demil program 
enjoys widespread admiration among delegations (based on 
thorough and transparent briefings offered in the past about 
the program and its progress), and Del is frankly concerned 
that this one element of our request will needlessly create 
concern over a request that would otherwise be taken in 
stride. 
 
¶14. (SBU) Recommendation:  We note that draft guidance 
permits the possibility of accepting an extension in 
principle of the final deadline as a fallback measure, but 
believe that the process would be much smoother and our 
request much more positively received if an extension in 
principle were part of our initial proposal. 
 
------------------------------------- 
Draft Annotated Agenda Item Nine: 
Detailed plans for the destruction of 
chemical weapons 
------------------------------------- 
 
---- Aberdeen ---- 
 
¶15.  (U) Del believes, based on recent conversations with the 
Russian delegation, this document and its counterpart 
Facility Agreement will continue to be held hostage by the 
Russians pending resolution of their concerns over the 
definition of end point of destruction. 
 
--------------------------------------- 
Draft Annotated Agenda Item Ten: 
Detailed plans for the destruction or 
Conversion and verification of chemical 
weapons production facilities 
--------------------------------------- 
 
---- Russian Combined Plans for Conversion 
or Destruction ---- 
 
¶16.  (U)  The Russian delegation is unaware of the status of 
these documents.  Del will explore with the Russians their 
response to U.S.-requested changes during the session and 
respond accordingly. 
 
----------------------------------- 
Draft Annotated Agenda Item Eleven: 
Conversion of chemical weapons 
Production facilities for purposes 
not prohibited under the convention 
----------------------------------- 
 
---- Russian Conversion Requests ---- 
 
¶17.  (U)  Del has received no information from the local 
Russian delegates with respect to this issue.  Russian 
delegation indicated that further information would only 
become available with the arrival of their delegation from 
Moscow. 
 
---- U.S. Conversion Requests ---- 
 
¶18.  (U) The substance of this request has been agreed and 
the TS is, at this time, awaiting our response to their 
informal provision of the DG note announcing this TA.  As 
reported via e-mail, the TS intends to append the actual TA 
to the DG's note. 
 
----------------------------------- 
Draft Annotated Agenda Item Twelve: 
Facility Agreements 
----------------------------------- 
 
---- Belgian facility agreement ---- 
 
¶19.  (U) Del understands that the Belgians intend to defer 
consideration of this FA due to ongoing discussions over its 
content, presumably with the TS and presumably as a result of 
U.S.-proposed changes adopted by Belgium. 
 
---- U.S. facility agreement ---- 
 
¶20.  (U) See para 15 above (Under Combined Plans) 
 
---- Republic of Korea facility agreement ---- 
 
¶21.  (U) Del understands that the Republic of Korea intends 
to defer consideration of this FA due to ongoing discussions 
over its content, presumably with the TS and presumably as a 
result of U.S.-proposed changes adopted by Republic of Korea. 
 
------------------------------------- 
Draft Annotated Agenda Item Thirteen: 
Chemical Industry Issues 
------------------------------------- 
 
¶22. (U)  The Council will consider a decision regarding 
"Captive Use," circulated by the facilitator (Ruddock/UK) on 
8 Sep 03.  The decision applies to Schedule 2 and 3 
chemicals, an element considered essential by the U.S. during 
consultations.  The decision provides for an effective date 
of 1 Jan 05 for Schedule 2 chemicals and 1 Jan 06 for 
Schedule 3 chemicals to accommodate the Russian need to 
substantially change its domestic legal requirements for 
declarations.  Currently, Russia does not declare Schedule 3 
chemicals unless they are shipped off-site as final products. 
 This decision merely clarifies that once a chemical is 
produced above applicable concentration and quantity 
thresholds, regardless of subsequent physical handling 
activities, the production must be declared.  Recommends: 
The decision meets U.S. substantive criteria for a decision 
and Del recommends joining consensus. 
 
¶23.  (U)  The EC is likely to be presented with a decision 
text regarding "Clarification of Declarations."  Although 
this facilitation technically falls under the purview of the 
Legal Cluster, it routinely meets during the Industry Cluster 
sessions.  The facilitator (Williams/US) continues to work 
with a few States Parties (India, South Africa, Iran) who 
still have concerns with the timelines in the text, but 
believes consensus may be achieved prior to the EC's 
commencement.  The decision codifies a political commitment 
by SPs to facilitate TS clarification requests regarding SP 
declarations within 60 days.  For those issues arising from 
ambiguous declarations (e.g., incomplete declarations or 
clerical/administrative errors) which affect the 
inspectability of a plant site, if no response is received by 
the SP to the clarification request, the TS would inform the 
EC and consider the plant site inspectable until such time 
that an answer, including a partial answer, is provided.  The 
decision also codifies SP support for the TS to continue its 
efforts to engage SPs in releasing confidential information 
to facilitate clarification requests when an accredited 
representative is either not present in The Hague, does not 
attend regular meetings of the OPCW, or lacks secure means of 
communicating with their capitals other than diplomatic 
pouch. 
 
-------------------------------------- 
Draft Annotated Agenda Item Fourteen: 
Fostering of international Cooperation 
for Peaceful Purposes in the Field of 
Chemical Activities 
-------------------------------------- 
 
¶24.  (U) One consultation was held on 12 September. 
Delegations were unable to agree on which draft decision 
document to begin discussions.  Western delegations preferred 
a Canada/Sweden document which nearly achieved consensus 
during the Sixth Conference; Iran proposed beginning 
discussion using a draft it put forward just prior to the 
RevCon.  At issue is fundamental disagreement regarding trade 
restrictions and the impact of the Australia Group on full 
and effective implementation of Article XI.  No further 
consultations are scheduled before EC-34, and no draft 
decision will be tabled for discussion. 
 
------------------------------------ 
Draft Annotated Agenda Item Fifteen: 
Assistance and Protection Against 
Chemical Weapons 
------------------------------------ 
 
¶25.  (U)  Consultations are scheduled for 17 September to 
discuss a UK draft declaration format for national protective 
programs.  As this is the first consultation held in months, 
no issues under Article X are ripe for decision.  Del expects 
the facilitator to present an oral report on the status of 
discussions. 
 
------------------------------------ 
Draft Annotated Agenda Item Sixteen: 
2002 OIO Report 
------------------------------------ 
 
¶26.  (U)  Brazil is no longer seeking to amend the text of 
the OIO report.  Instead, it provided a number of questions 
to the DG on various administrative issues, seeking to cast 
doubt about present practices.  Brazil has yet to comment on 
the responses provided by the DG, and Del understands Brazil 
is currently seeking to make a statement at the EC on the OIO 
report, possibly requesting that it be noted by the EC as a 
national view. 
 
-------------------------------------- 
Draft Annotated Agenda Item Seventeen: 
2002 External Auditor's Report 
-------------------------------------- 
 
¶27.  (U)  Consultations were held on 1 September and most 
interventions centered on the same specific issues of concern 
to the U.S. (Smartstream, materiality, accounting issues, 
procurement issues, and frauds and losses).  The facilitator 
plans to present an oral report to the EC highlighting areas 
of concern and more specifically calling on the TS to prepare 
a report on the remaining work, cost estimation and likely 
timeframe of fully implementing the Smartstream 
administrative software.  Del informally spoke with the 
Director of Administration regarding the U.S. concern on the 
2001 cash surplus.  However this issue was not raised during 
formal consultations. 
 
----------------------------------------- 
Draft Annotated Agenda Item Eighteen: 
Implementation of the Recommendations of 
the External Auditor and OIO 
----------------------------------------- 
 
¶28.  (U)  The Council is requested to consider the subject 
reports.  Del understands that Washington has no objections 
to the reports. 
 
--------------------------------------- 
Draft Annotated Agenda Item Nineteen: 
Draft OPCW Programme and Budget for 2004 
and all items pertaining to this budget 
--------------------------------------- 
 
----- 2004 Budget ----- 
 
¶29.  (U)  Informal budget consultations resulted in agreement 
on the broad outlines of the 2004 budget, but clearly could 
not resolve wide variations on a possible budget increase. 
On the overall net increase, most delegations' positions fell 
in a band between 5.0% maximum increase (Belgium) and 7.5% 
(U.S., per Ref A), with Japan and South Africa holding out 
for zero nominal growth and the UK arguing for 6.8%. 
Stability Pact countries led by France argued for no more 
than a 5.5% increase (most of this being non-discretionary). 
The facilitator (Beerwerth/FRG) suggested that 6.1% or 6.2% 
were at the middle of that range of the delegations' figures 
and speculated that final consensus might emerge at around 
that level, but there was little support for the proposal. 
The facilitator commented that the TS would have considerable 
discretion in preparing a revised budget proposal for EC-34 
drawing on this guidance. 
 
¶30.  (U)  The facilitator reached consensus on reducing the 
draft 2004 budget in a number of the areas that participating 
delegations had explored.  None of the proposed cuts affects 
the core activities of verification or ICA.  The recommended 
reductions include funding for consultants, per capita staff 
turnover costs, common services, information systems, 
inspector training, non-staff costs of destruction 
verification, the exchange rate, and P staff salaries.  The 
facilitator noted that some of these savings were also 
recommended in the XIV ABAF report.  The facilitator and TS 
estimated that these reductions would total roughly 1.7 
million Euros. 
 
----- Draft Medium-term Plan ----- 
 
¶31.  (U) In a Sept. 16 informal consultation, Del noted that 
the draft plan is in Washington for consideration and that we 
leave open the right to provide comments in the future. 
Though most capitals are still reviewing the document, the 
MTP has been well received at OPCW, with delegates commenting 
that it is more concise and readable than last year's 
version.  One delegation pointed to uncertainties about 
on-call inspectors, future rates of destruction, and spending 
tracks on ICA to question some key assumptions included in 
the MTP. 
 
------------------------------------ 
Draft Annotated Agenda Item Twenty: 
Proposed Amendments to the OPCW 
Financial Regulations 
------------------------------------ 
 
¶32.  (U)  Amendments to OPCW financial regulations 
recommended by ABAF and the TS have been pending for two 
years.  Informal consultations the week before EC-34 sought 
to identify non-controversial amendments that could find 
consensus in the EC.  The facilitator cited 12 amendments 
recommended by both ABAF and the TS that he believed might 
obtain quick agreement.  Some of the proposed changes 
clarified existing practice or reflected necessary changes. 
Others include proposals for the DG, in exceptional 
circumstances, to submit supplementary budgetary proposals to 
the CSP through the EC; for the EC, rather than the CSP, to 
allow the DG to transfer appropriated funds between programs 
within a budget chapter; for the DG, with the prior 
concurrence of the EC, to enter into commitments for future 
financial years; for the DG to authorize the write-off of 
losses of funds, stores, equipment and other assets other 
than arrears of assessed contributions and the payment of 
Article IV and V verification costs not exceeding 500 Euros 
per item or 10,000 Euros in a year, without the prior 
approval of the EC; for recognizing a monitoring function for 
the OIO; and other proposals.  Other, more controversial 
proposals are to be postponed until after the CSP. 
 
------------------------------------ 
Draft Annotated Agenda Item Twenty: 
Proposed Amendments to the OPCW 
Financial Regulations 
------------------------------------ 
 
¶33.  (U)  Del understands that Washington wishes to have the 
Council request the TS revisit the proposed amendments in 
light of ABAF comments and produce an updated set of 
proposals. 
 
--------------------------------------- 
Draft Annotated Agenda Item Twenty-One: 
Financial Issues 
--------------------------------------- 
----- Income and Expenditure Situation of the OPCW ----- 
 
¶34.  (U)  The Council is requested to note the DG's reports 
on this matter (EC-34/DG.6, dated 24 July 2003, and 
EC-34/DG.7, dated 18 August 2003). 
 
----- Regularization of contractual agreements ----- 
 
¶35.  (U)  The Council is requested to consider the DG's note 
on this issue and approve the draft decision 
(EC-34/DEC/CRP.3, dated 28 August 2003). 
 
----- Working Capital Fund ----- 
 
¶36.  (U)  The Council is requested to note the DG's report 
for submission to the CSP (EC-34/DG.12, dated 12 Sept. 2003). 
 
----- Report of the 14th Session of the ABAF ----- 
 
¶37.  (U)  The Council is requested to consider the subject 
report (AFAB-14/1, dated 23 June 2003). 
 
----- Composition of the ABAF ----- 
 
¶38.  (U)  The Council is requested to approve appointments to 
ABAF, as noted in the annotated agenda. 
 
--------------------------------------- 
Draft Annotated Agenda Item Twenty-Two: 
Dates for Regular Sessions of the EC 
--------------------------------------- 
 
¶39.  (U)  Proposed dates for 2004 EC sessions are March 
23-26, July 6-9, Oct. 12-15 and Dec. 14-17. 
 
----------------------------------------- 
Draft Annotated Agenda Item Twenty-Three: 
Any Other Business 
----------------------------------------- 
 
¶40.  (U)  This would be the formal point on the agenda at 
which delegations would be able to raise the Bustani issue. 
 
-----Adjustment of the Director-General's Salary ----- 
 
¶41.  (U)  Council is requested to approve the draft decision 
on this matter (EC-34/DEC/CRP.1, dated 29 July 2003). 
 
----- Credentials of Representatives of the Council ----- 
 
¶42.  (U)  The DG's report on this issue has not yet been 
distributed. 
 
----- Request to Reclassify Two Posts ----- 
 
¶43.  (U)  Del understands that Washington has questions 
regarding this proposal, and is working with the TS to ensure 
that the requested reclassification has been thoroughly 
reviewed and that the posts are currently graded incorrectly. 
 
 
¶44.  (U)  Ito sends. 
 
SOBEL