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

UNCLAS SECTION 01 OF 05 THE HAGUE 002627 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AC/CB, VC/CCB, 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 LIEPMAN 
 
E.O. 12958: N/A 
TAGS: PARM PREL CWC
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC):WRAP-UP FOR WEEK 
ENDING 10 OCTOBER 2003 
 
 
 This is CWC-107-03. 
 
Action Request in para 19. 
 
----------------------- 
ARTICLE VII ACTION PLAN 
----------------------- 
 
¶1.  (U)  It appears a consensus has been reached on an 
Article VII action plan for national implementation. 
Following an Oct. 9 meeting chaired by DG Pfirter with the 
Ambassadors of the U.S., U.K., India and Iran, agreement was 
reached on the one final substantive issue, which was the 
acceptable wording on action to be taken to address 
non-compliance.  Agreement was reached on "any necessary 
measures if appropriate", although India and Iran stressed 
the need to go back to capitals for approval.  The follow-on 
Oct. 10 discussions provided an opportunity for India, in 
particular, to provide additional non-substantive points.  At 
this time, the facilitator, Mark Matthews (U.K.) does not 
know of any new substantive problems, and remains hopeful 
that none will arise in the run-up to the CSP. 
 
------------------------ 
UNIVERSALITY ACTION PLAN 
------------------------ 
 
¶2. (U) A final round of informal consultations on October 9 
succeeded in bringing the draft Universality Action Plan 
close to consensus among participating delegations. 
Facilitator Consuelo Femenia proposed to submit the text 
(issued October 13 and faxed to AC/CB) as the basis for a 
decision at the next Executive Council session.  Although 
some interested delegations (India, South Africa, France) 
were not present for the final informal consultations, and 
Mexico reserved judgment pending instructions from its 
capital, there was no dissent to Femenia's proposal. 
 
¶3.  (U) The latest version includes changes to preambular 
paragraphs proposed by Korea (noting, inter alia, that the 
UNGA has stressed the importance of achieving CWC 
universality).  The ROK also asked for States Parties' views 
on whether the declaration of the CSP on universality which 
has been adopted every year should be repeated at CSP-8, or 
whether it should be supplanted by CSP endorsement of the 
Action Plan. 
 
¶4.  (U) The language on points of contact was further 
strengthened:  the EC "strongly recommends the establishment, 
on a voluntary basis, of 'points of contact' among States 
Parties in a number which allows for the effective promotion 
of universality in all relevant regions or sub-regions." 
Delegates continued to question how these POCs would be 
identified and how they would share action if more than one 
in a geographic area. 
 
¶5.  (U) At U.S. Del's urging, the EC is to request the 
Technical Secretariat "to prepare a comprehensive annual 
document on planned universality-related activities.... The 
document should set appropriate numerical targets of new 
States Parties."  Femenia told us that she did not expect any 
further assaults on numerical targets for accession. 
 
¶6.  (U) Many delegations supported merging PPs 9 and 10 (PPs 
8 and 9 in the October 8 text then under discussion), but 
Femenia told DelOff that she had left them as separate 
paragraphs to avoid equating the verification and assistance 
functions of the OPCW (PP 9 contains references to 
verification, PP 10 to assistance).  Still, she was concerned 
that India and/or Iran might re-open debate on those points 
in the EC. 
 
¶7.  (U) On October 7, Germany had suggested that the OPCW's 
consultant to Latin America on universality issues should be 
invited to address the next informal session to provide 
further ideas for the Action Plan, but Femenia said there was 
insufficient time before the CSP to take new suggestions on 
board. 
 
¶8.  (U) South Africa repeatedly asked whether the Action Plan 
had budgetary implications.  Keith Wilson of the 
Secretariat's External Relations Division said it would not 
 
SIPDIS 
require additional staff or funding to implement the plan, 
which would simply help guide and rationalize the activities 
of the ERD.  Others pointed out that voluntary contributions 
were already contributing to some of the activities 
envisioned in the plan. 
 
----------- 
2004 BUDGET 
----------- 
 
¶9.  (U)  In the Oct. 9 budget informals, DG Pfirter made his 
pitch for a 7.36% increase as the minimum necessary to ensure 
that core functions of the organization are performed.  The 
DG provided an Oct. 13 note, FAXed to AC/CB, in which he 
outlined the impact of budget increases of only 7%, 6.36% and 
5.86%.  In previewing the idea of a 7% increase, the DG had 
made a pretty strong case during the informals, stating that 
personnel cuts would be required.  However, in his note, the 
DG's case was more moderate.  He wrote that there were 
obviously "presentational" advantages of an increase of just 
under 7%.  He commented that "Indeed, in my earlier proposal, 
I made clear that, in order to add 250,000 Euros to ICA 
activities, I would seek further efficiency savings of 0.4%. 
My proposal was and remains to use those additional 
efficiency savings for ICA activities.  That is only my 
proposal.  Alternatives would be: 
 
-- to use the efficiency savings in full and to reduce the 
size of my budget request to 6.96% rather than to increase 
programme  activity.  In that case, no additional funds would 
be available for ICA activities; 
-- to deduct a proportion of the savings from the budget 
request and increase ICA activities by a smaller amount; 
-- to spread the reduction in programme activity beyond and 
including ICA." 
 
¶10.  (U)  The DG's note goes on to state that, "those are the 
broad options.  The political choice is for member States. 
Within this 0.4% bracket, I am entirely relaxed about any 
different package which commands consensus subject to two key 
provisos.  First, I cannot deliver efficiency savings and 
programme increases, and a net reduction in the budget 
increase simultaneously.  Second, as your Chief Executive, I 
am not prepared responsibly to score efficiency savings twice 
or to make unrealistic promises.  'Fictitious savings' would 
simply aggravate the problem of cash risk and 'fictitious 
income.'" 
 
¶11.  (U)  Predictably, the DG's paper goes on to make the 
case that with an increase of only 6.36%, the impact would be 
severe, and "core programme activities affected would include 
inspector training and travel, transportation of inspection 
equipment, conference services and general operating 
expenditure."  An increase of only 5.86%, "would produce 
negative real growth" and the DG's note includes the comment 
that "I cannot responsibly contemplate such a level, given 
the severe programme cuts that would be required across the 
board." 
 
¶12.  (U)  With regard to the positions of other delegations, 
South Africa announced at the informals that it could accept 
a budget increase of more than 7% as long as ICA increases 
were assured.  Mexico had the same message, stressing that 
ICA must be in the regular budget.  Switzerland said it could 
accept a 6.5% increase, with the flexibility to go higher. 
The Germans reiterated that they could accept a 6% increase, 
adding that the Italians had said on behalf of the EU states 
that the Europeans could not accept a 7.36% increase. 
 
¶13.  (SBU)  It is clear that nothing will happen in the 
run-up to the CSP.  EC Chairman Kubernat flatly said that, 
barring unforeseen developments, the only question is what 
day next week would be most appropriate for the Special EC. 
The Japanese position on an increase is becoming increasingly 
important, and the Japanese delegation did not cite a number 
during the budget informals.  Not surprisingly, we have heard 
different reports of the outcome of the DG's trip to Japan. 
The Japanese have been studiously non-committal and merely 
emphasized that the DG had ample opportunity to make his 
case.  The DG believes he got indications of support, 
although without a firm number.  In any event, the Japanese 
delegation has invited the U.S. delegation to a working 
dinner on Oct. 17, where the budget will certainly be the 
dominant topic. 
 
¶14.  (U)  Finally, the DG presented the draft decision 
documents regarding retention of the 2001 cash surplus and 
the retention of Article IV/V cash received in 2004 for 2003 
inspections. 
 
------------------ 
CSP-8 PREPARATIONS 
------------------ 
 
¶15.  (U)  CSP Chairman Djoudi (Algeria) held an Oct. 14 
meeting to go over preparations for the upcoming CSP.  The 
highlights: 
 
-- The Chairman of CSP-8, decided by the Asian Group, will be 
the Ambassador of Malaysia, Her Excellency Dato Noor Farrida 
Arriffin. 
-- The two Vice-Chairmen from each regional group will be 
India and Japan (Asia), and Mexico and Guatemala (Latin 
America).  There were no decisions from the African or 
Eastern European Groups.  The Western Group Vice-Chairmen 
should be the U.S. and Switzerland, but the Spanish were not 
there to provide the information. 
-- The Chairman of the Committee of the Whole is still be 
determined by the African Group. 
-- Chairman of the Credentials Committee should be Portugal, 
although again the Spanish were not there to provide the 
official notification. 
-- EC nominees from each group.  Asia nominated Pakistan, 
Malaysia, Sri Lanka and Iran.  The Latin American and 
Caribbean Group nominated Panama, Peru, Cuba and Uruguay. 
All other groups still need to provide nominations. 
 
¶16.  (U)  With regard to a Special Executive Council meeting, 
the recommendation from EC Chairman Kubernat was for a 
special EC on Monday afternoon (10/20) or Wednesday evening 
(10/22).  Russia spoke in favor of the Wednesday evening 
session.  The consensus outcome was to hold the Special EC on 
Tuesday afternoon (10/21). 
 
¶17.  (U)  Djoudi noted that it would be important to have a 
position ready on the ILO decision on former DG Bustani.  His 
summation of the sentiment among delegations was that the 
majority believe the OPCW should handle this as quickly as 
possible, while some delegations believe the organization 
should take its time.  He added that the consensus is on not 
opening up the details of Bustani's actions.  DG Pfirter 
noted that the legal counsel for the OPCW had given three 
options: 1) pay the judgment, 2) ask the ILO Administrative 
Tribunal to review the decision, addressing the issues of the 
jurisdiction as well as the calculation of material damage, 
3) appeal the ILO decision to the ICJ. 
 
¶18.  (U)  The U.S. del noted that we have no instructions 
from Washington at this time.  Dutch Ambassador Vogelaar said 
the Dutch government supports an appeal to the ICJ, but would 
go with the majority view at the CSP.  He added that ignoring 
the judgment is not an option acceptable to the Dutch. 
Vogelaar then floated the idea of informal discussions with 
Bustani's attorneys or a representative on the hope that an 
arrangement could be made to have Bustnai receive the moral 
damages, but accept a reduction on the material damages, as 
he has been serving as Brazilian Ambassador to the U.K. 
There was no consensus on such an action.  Djoudi concluded 
by emphasizing that it would not be responsible to simply 
leave no recommendation for the CSP. 
 
¶19.  (U)  On administrative matters, South Africa asked for 
more time to consider the proposed amendments to the Rules of 
Procedure of the CSP, and there were no objections.  The U.S. 
del expressed its support for the proposals, and also made 
the point about the benefit of having an amendment to Rule 34 
that would allow for each CSP to elect the officers, or at 
least the chairman, for the subsequent CSP.  The issue was 
left for further consideration.  Finally, Djoudi provided the 
list of NGOs seeking participation in the CSP, and del has 
FAXed it to AC/CB.  In addition, Djoudi noted the request of 
the ICRC to make a statement at the CSP.  ACTION REQUEST: Del 
would like to know if 1) Washington objects to any of the 
NGOs listed and 2) if Washington objects to the ICRC request. 
 
--------------------------------------------- 
RESULTS BASED BUDGETING - CONSULTANT'S REPORT 
--------------------------------------------- 
 
¶20.  (U)  The consultants working on RBB are meeting with the 
DG, Herb Schulz and others, and, on Oct. 7, provided 
interested delegations with a snap-shot of the state of play 
at the start of their consultations.  The overall timeline is 
to have the following outcome for the upcoming budgets: 
2005 - predicting performance; 
2006 - predicting performance, but still too early to set 
targets; 
2007 - the TS can commit to definitive targets. 
 
¶21.  (U)  As for what will happen in the near-term, OPCW 
divisions are making proposals on what they believe they 
could achieve with different resource levels under the 
medium-term plan.  These are being consolidated and the 
process is now almost at the point where there are decisions 
and results adequate to be used in RBB.  The specific 
divisions involved: inspectors, verification, ICA, external 
relations and administration.  Work is also being done by 
other offices; health and safety, for instance, has also 
developed definitions.  The results with regard to the 
medium-term plan should be ready for the DG to put forth by 
the end of the year.  The consultant noted that in a minority 
of cases, the numbers are there to ensure success.  In most 
cases, a lot of work needs to be done. 
 
¶22.  (U)  The goal is for the 2005 budget, presented in 2004, 
to have proposals which will focus on defined results.  The 
numbers will appear whenever possible, but there will be lots 
of qualitiative factors.  By the end of 2004, it will be 
possible to measure all the results of the project plans. 
The 2006 budget will show what was achieved in 2004.  By the 
2007 budget, there should be definitive targets for the TS. 
 
------------------------ 
STAFF COUNCIL COMPLAINTS 
------------------------ 
 
¶23.  (U) OPCW Staff Council Chairman Gordon Vachon met, at 
his request, with Western Group representatives October 10 to 
explain that implementation of the CSP's tenure decision, the 
DG's one-year contract renewal scheme, and the Host Nation 
Headquarters Agreement were posing serious problems for staff 
members.  Vachon said that while morale "had not hit bottom," 
the staff was feeling "battered."  He stressed that they were 
concerned not only for themselves, but also for the damaging 
financial and operational impact that some of these problems 
would have on the OPCW itself. 
 
¶24.  (U) Vachon said there appeared to be a strong legal 
argument against moving immediately to implement the CSP 
decision to move to an average seven-year tenure for OPCW 
staff members.  Twelve of the staff members whose contracts 
had not been extended had already obtained legal council and 
were taking their cases to the ILO Administrative Tribunal, 
which would take them up in mid-November, he said.  Those 
staff members would be replaced by February, and a further 50 
contracts were likely to be terminated before the ILOAT 
issued its verdicts.  If the Tribunal ruled in favor of the 
dismissed staff, it would be too late for the OPCW to 
re-instate them, so the organization would likely have to pay 
financial compensation and penalties.  While it could not be 
known now how the ILOAT would decide, how many cases would be 
affected, or what sums might be awarded in compensation or 
damages, the cost to the OPCW could come to millions of 
euros.  Vachon asked whether this did not argue for 
suspending the termination of 
personnel contracts until the ILO issued its decisions.  The 
CTBTO had taken this course as "financially prudent." 
¶25.  (U) Apart from financial implications for the 
organization and personal disruptions for the staff, Vachon 
said that consultants had predicted the tenure decision to 
lead to a 5-10% drop in organizational effectiveness, due to 
the "lag factor," to vacancies, and to the need to train new 
hires.  The loss of experienced inspectors who had been on 
the job, in many cases, for five years, would be slow to 
repair. 
 
¶26.  (U) Moving to the one-year contract extension policy, 
Vachon questioned the need to switch abruptly to a "3-1-1-1" 
system (a three-year contract with one-year renewals), since 
most staff members had already been employed for five years, 
so a "3-2-1" system would seem to provide sufficient 
flexibility.  From a management perspective, Vachon argued, 
keeping a longer tenure period would also aid recruitment, as 
many professionals and technicians would balk at disrupting 
their careers for what might prove to be only three years 
with the OPCW.  Moreover, the rationale for implementing the 
change in contract extensions had not been to increase 
turnover per se, but to make it possible to release 
poorly-performing personnel.  Yet those whose contracts were 
not being renewed had received a form letter explaining the 
decision had been necessary to achieve "turnover of staff." 
This entailed severe disruptions for those who suddenly found 
that their contracts were not being renewed, such as having 
to withdraw children from school in the Netherlands not only 
before the end of the year, but in the middle of their term. 
 
 
¶27.  (U) The OPCW-Host Nation Headquarters Agreement had been 
concluded by the first CSP, Vachon recalled, but a number of 
unsettled issues continued to present problems for OPCW 
staff.  These included questions about property tax 
exemptions, the VAT threshold, and ID cards for the 
dependents and domestic servants of staff members.  Vachon 
noted that when prompted by the Staff Council, OPCW 
management had provided written responses to these and other 
questions, promising in some cases to secure "expedited 
settlement," but still nothing had been settled.  These 
issues had now been under discussion for years without 
resolution.  In response to a query from Ambassador Javits, 
Vachon said the Staff Council was not at this time requesting 
States Parties to intervene, but added that they were a party 
to the agreement, and should presumably take an interest in 
its implementation. 
 
¶28.  (U) Ambassador Javits thanked Vachon for his 
constructive attitude and said that States Parties could not 
fail to appreciate the staff's staying power and commitment 
to the organization.  He acknowledged that staff turnover 
would inevitably impact efficiency, but observed that this 
was a normal and temporary situation until a new "culture" 
took hold at OPCW.  The Ambassador further pointed out that 
the tenure decision had been made by the CSP (not the DG, as 
was the case at the CTBTO) and that the DG had felt that the 
one-year contract extension policy was necessary, at least as 
a temporary measure, to begin implementing the tenure policy. 
 
¶29.  (U)  Ito sends. 
 
SOBEL