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

UNCLAS SECTION 01 OF 04 PARIS 003535 
 
SIPDIS 
 
FROM USMISSION UNESCO PARIS 
STATE FOR IO/T, IO/S, L/UNA 
 
E.O. 12958: N/A 
TAGS: ABUD FR UNESCO
SUBJECT: USUNESCO:  171st EXECUTIVE BOARD, RESULTS OF F&A 
COMMITTEE 
 
Ref:  Secstate 76821 
 
¶1.  Budget 
 
The Director-General proposed to the Executive Board a 
budget of $635 million, a 4% increase in UNESCO's budget. 
After contentious negotiations, the Executive Board adopted 
a decision that requests the Director-General to present to 
the next Executive Board a baseline budget proposal of $610 
million (ZNG) and a supplementary proposal of up to $25 
million financed through "innovative mechanisms (excluding 
carry-over)."  This decision notes support received from 
some Member States for the budget of $635 million proposed 
by the Director-General and requests the Director-General to 
explore further possibilities to reinforce principal 
priority programs within the baseline of $610 million. 
 
This was the result of debates in which 6 Member States (US, 
UK, Canada, Germany, Brazil, Australia) gave strong support 
to ZNG.  The 11 African states on the Executive Board argued 
in support of the Director-General's proposed budget of $635 
million.  Japan was notably in support of the Director- 
General's proposal and was willing to seek alternative means 
to provide the D-G flexibility in the budget.  Other WEOG 
states (including France and Italy) voiced support for a 
budget somewhere between $610 and $635 million.  GRULAC, led 
by Brazil, took a position in support of ZNG, but support 
for ZNG among the individual states was weak.  This was best 
demonstrated when Ecuador made a statement in support of the 
$635 million proposed budget. 
 
The adopted decision was a compromise intended to keep the 
budget level at $610 million but reflect the concerns of the 
developing states by allowing the Director-General to find 
other ways to increase financial resources.  The final 
budget decision will be made at the next Executive Board. 
 
In introducing the resolution, the Director General made a 
statement saying that he understood the resolution to call 
for a regular budget proposal of $610 million (with "regular 
budget" as defined in Art 9(2) of the UNESCO constitution) 
and a supplementary proposal of $25 million, which would be 
funded through extrabudgetary contributions (as defined in 
Art 9(3) of the UNESCO constitution).  Article 9(3) of the 
UNESCO constitution states, "The Director-General may accept 
voluntary contributions, gifts, bequests and subventions 
directly from governments, public and private institutions, 
associations and private persons, subject to the conditions 
specified in the Financial Regulations." 
 
Per instructions in reftel, USDel did not join consensus on 
this decision.  USDel thanked the DG for his clarification, 
and stated our understanding that the regular budget ceiling 
is to be $610 million, that the US does not join consensus 
on this decision, and that while we were not calling for a 
vote at this time, the US would not join consensus on a 
budget ceiling (for 2006-2007) of more than $610 million. 
 
Subsequently, Tanzania spoke up on behalf of the African 
states and thanked the DG for taking African concerns into 
account.  Tanzania did not explicitly state support for ZNG, 
but did not contradict the clarifying statements of the DG 
and US.  The Tanzanian delegate had told USDel privately 
that Tanzania would not oppose a ZNG ceiling at this 
meeting. 
 
¶2.  Education:  Anti-Doping Convention 
 
USDel argued vigorously for the Executive Board to recommend 
that the convention against doping in sport should be 
financed out of a voluntary fund rather than the general 
budget.  Despite a lack of consensus during the negotiation 
of this matter in the commission meetings, the decision 
forwarded to the Plenary reflected a solid endorsement of 
regular budget funding. USDel re-opened the debate in the 
plenary, again arguing for the convention to be financed 
through a voluntary fund.  The Latin American countries 
(especially Brazil and Ecuador) supported the USG position, 
but the majority of Executive Board members did not.  Brazil 
suggested compromise language that recommends the 
Secretariat for the convention be financed out of the 
 
SIPDIS 
regular budget but with a "strict and limited" cap on the 
amount.  The Executive Board adopted the decision with this 
amendment. This sudden change of position by Brazil upset 
other GRULAG non-Executive Board Members (Costa Rica and 
Colombia) who took the floor as Observers to denounce the 
decision that had not taken into account the positions 
expressed by Member States at the negotiations. The 
Executive Board adopted the decision with this amendment. 
 
(Note:  When USDel raised the issue of funding of 
conventions during the drafting committee, the response came 
from the Legal Advisor's office that UNESCO has always 
funded conventions from its core budget.  The only 
conventions at UNESCO not funded by the core budget are 
those that are deposited at UNESCO.  The Indian ambassador 
helpfully added to this discussion that this is not how 
conventions are paid for in New York.  USDel took this as an 
opportunity to advocate for change in UNESCO's methods.) 
 
¶3.  Education:  Decade on Education for Sustainable 
Development 
 
USDel was successful in revising the decision adopted by the 
Executive Board to "note" rather than "adopt" the draft 
implementation scheme, and in getting the matter deferred to 
the next Executive Board in September The resolution further 
requests the Director-General to develop a concrete plan for 
UNESCO's role in the implementation of the Decade.  The 
resolution language that came out of the drafting committee 
was silent on whether the draft would be re-submitted to the 
Executive Board for consideration and possible adoption, but 
some last minute wrangling resulted in the final decision 
inviting the DG to revise and re-submit the draft 
implementation scheme. 
 
Japan and the UNESCO Secretariat lobbied extremely hard for 
this addition, but many delegations (including Germany, 
Australia, and several Nordic countries) agree with the U.S. 
preference for the draft scheme to be simply dropped.  None, 
however, seem inclined to actually do anything to kill the 
plan. And since it was requested by the UNGA, is important 
to Japan and the Director-General, it is not likely to go 
away. US Mission will continue to follow this item closely, 
to work to have the scheme dropped if possible, or else work 
to ensure it is revised to suit USG concerns. 
 
¶4. Education:  Follow-up on the EFA Strategic Review and 
UNESCO's Strategy for the 2005-2015 Period 
 
This item got called up earlier than scheduled and 
delegations wasted no time indicating their impatience with 
the drafted decision. USDel joined the relatively small 
working group that formed that included the UK, Iceland, 
Japan, US, Pakistan, India, Canada and a couple of others 
that wandered in and out. Incoming ADG/Education Peter 
Smith, Dakar Follow-up head Abhi Singh and others from the 
Secretariat joined us. Perhaps spurred by the impatience of 
 
SIPDIS 
finally doing what we all wanted to do a year ago when India 
blocked consensus, the group and Peter Smith had a robust 
exchange over the text, with delegations asking pointed 
questions and Smith providing long and detailed answers. 
 
The point of this process, proposed by the British 
Ambassador, was to ensure a "fresh start" for Peter Smith in 
his work with the Education Sector and to make sure that 
everyone was clear about what exactly the text of the 
decision asks of the Secretariat and what is expected by the 
delegations. This time, India joined in the deliberations 
with an eye for change. USDel was successful in removing 
mention of MDGs in text and supported Japan in removing text 
on donor harmonization. 
 
As a result, the decision adopted by the Executive Board 
provides the incoming American ADG/Education with greater 
latitude and flexibility to make decisions, implement 
changes and deploy staff. It calls for accountability from 
the field offices to the Education Sector and even gives him 
the power to restructure the whole sector if he chooses. 
 
Delegations openly discussed their delight at Smith's 
openness, ideas and enthusiasm for tackling this job. 
 
 
¶5. Education: Literacy and Cuba: 
 
USDel was successful in fending off a stealth attempt by 
Cuba to co-opt the UN Literacy Decade and impose its brand 
on this important flagship initiative. USDel flagged a last- 
minute addition to the Board agenda that called for member 
states to adopt recommendations made at a non-UNESCO 
literacy conference held in Havana in January. 
 
The Director-General provided a strong Information document 
that listed multiple reasons why this agenda item was 
inappropriate for the Board to consider. His action allowed 
us to remain silent on this point as the Board agreed to 
merely take note and not adopt the recommendations. 
 
¶6. Education:  Quality Provision in Cross-Border Higher 
Education: 
 
Following a dramatic and protracted discussion over the 
legal status of these guidelines the Executive Board invited 
"the Director General to inscribe on the provisional agenda 
of the 33rd session of the General Conference an agenda item 
proposing a final discussion and then the endorsement of the 
non-binding draft guidelines" on quality provision in cross- 
border higher education. A few Member States did note their 
desire to have a binding instrument in this area. This item 
was reopened in the plenary by Brazil to revisit the legal 
status that they wanted to have strengthened.  A separate 
cable will be prepared on this item and legal instruments at 
UNESCO. 
 
¶7.   UNESCO Institutes: 
 
The Secretariat presented revised guidelines regarding the 
establishment and operation of Category I and category II 
UNESCO Institutes and centers.  Japan expressed support for 
the use of category II centers as a means of revitalizing 
the work of UNESCO throughout the world, cautioning that 
centers, once established, must be sustainable.   China 
described the report as "excellent," but joined Mali in 
expressing uncertainty as to how category I centers would be 
evaluated, and whether there was any oversight mechanism. 
U.S. delegation advocated a strategic approach to category 
II centers, to include a study similar to that submitted on 
category I centers, an evaluation of long-term impact, and 
results-oriented guidelines.  The Director General's office 
responded that Category I centers are subject to evaluation 
by the IOS; in addition, individual institutes have 
commissioned evaluations of their activities.   The ODG 
stressed that the Secretariat would continue to make an 
effort to highlight the contributions of category II centers 
in program documents.  The draft decision was amended by 
Japan to include language underlining "the importance for 
UNESCO to ensure a substantial, effective and sustainable 
contribution of category II institutes" and requesting, 
"that flexibility be allowed in terms of the guidelines and 
the model agreement governing the establishment of such 
centers." The Japanese and Indian centers proposed by the 
Secretariat were endorsed and feasibility studies were 
 
SIPDIS 
requested for the other proposed centers. 
 
¶8. Starck Project 
 
UNESCO's Headquarters Committee (an independent 
intergovernmental body elected at the General Conference) 
has endorsed a project to redecorate the seventh floor 
restaurant.  The estimated cost will be _850,000.  Under the 
powers vested in it by the General Conference, the 
Headquarters Committee created a Special Account to collect 
voluntary contributions for this project.  The Headquarters 
Committee has to date collected _1,100 for this account. 
The Headquarters Committee therefore proposed advancing 
_100,000 Euros from the Headquarters Utilization Fund to 
launch the project.  Future voluntary contributions were 
expected to reimburse the Headquarters Utilization Fund and 
cover the remaining costs (_750,000) of the renovation 
project. 
 
At the Executive Board, Member States expressed displeasure 
that the Headquarters Committee could take such action 
without first consulting with the other Member States. 
Member States (including USG) also expressed the position 
that it was too risky to "borrow" this money from other 
UNESCO accounts without any guarantee that the remaining 
costs could be covered by voluntary contributions.  The 
_100,000 spent on "launching" the project could be lost if 
no other contributions were forthcoming. 
 
UNESCO Legal Advisor informed the Board that the 
Headquarters Committee was within its right to establish the 
Special Account for this project without the approval of the 
Board.  However, the Board decided not to approve 
transferring the funds from the Headquarters Utilization 
Fund at this time.  Instead, the Board adopted a decision in 
which the operative language invites the Director-General, 
in cooperation with the Headquarters Committee, to report to 
the next Executive Board on the progress made in planning 
this project and collecting funds.  At that time the Board 
will have to decide how to proceed on this project. 
 
¶9. Staff Matters 
 
The Executive Board reviewed the use of consultants by 
UNESCO, the Director-General's response to the Annual Report 
(2004) by the International Civil Service Commission, the 
adoption of new management tools and staff policy, and the 
state of the UNESCO Medical Benefits Fund. Debates on two 
items (hiring of consultants and review of the Medical 
Benefits Fund) were substantial. USDel argued that the 
hiring of consultants should be based on the principle of 
value for money rather than geographic distribution. 
However, other Member States and the Secretariat argued that 
previous Executive Boards have already adopted decisions 
urging UNESCO to achieve wider geographic distribution in 
the hiring of consultants (166 ex/Decision 3.1.2(II) and 169 
EX/Decision 3.2(II)).  These decisions are recalled in the 
decision adopted by this Executive Board.  USDel was not 
successful in removing this language from the draft 
decision. 
 
The Executive Board was informed of the findings of an audit 
by the External Auditor of UNESCO's Medical Benefits Fund, 
based on which the Secretariat proposed taking certain 
measures to ensure the Fund's long-term financial stability 
and equilibrium.  The Executive Board was asked to adopt a 
decision approving these measures.  During discussion on 
this matter at the Executive Board, Member States noted 
concerns with the proposed measures, particularly the 
proposal to "align" the UNESCO contribution percentage with 
that of most other UN agencies.  The proposed 2/3 
contribution for UNESCO and 1/3 contribution for 
participants would be high compared to other common system 
organizations.  The Executive Board therefore adopted a 
decision that takes note of the proposed measures and 
invites the Director-General to submit to the next Executive 
Board for further consideration a plan of action, including 
financial implications, and a timetable for the 
implementation of recommendations of the External Auditor. 
 
¶10. Decentralization and Communication with UNESCO 
 
Discussion at the Executive Board on UNESCO's 
decentralization process (Agenda Item 5) was integrated with 
discussions on an item proposed by India on the relationship 
between UNESCO and National Commissions.  Discussion of 
decentralization focused on the role of field offices, 
particularly in relation to National Commissions.  India's 
proposal would strengthen the role of National Commission 
vis--vis UNESCO and Member States.  USDel intervened, along 
with most other Member States who took the floor, to state 
that the role of the National Commission differed from 
country to country, and that UNESCO could not create one 
plan that would dictate the role of each National 
Commission.  Member States noted that this was not a "one 
size fits all" scenario, and that the role of each National 
Commission had to be established by the Member State.  No 
Member States spoke up against these sentiments, though the 
Indian Delegation worked diligently to keep their language 
in the decision. 
 
After these discussions, the Executive Board adopted two 
decisions on these items.  The first requests the Director- 
General to focus on improving the impact and quality of 
services of field offices, within existing resources, and 
refine the roles of field offices.  This decision also 
invites the Director-General to pursue efforts to strengthen 
the relations of UNESCO Headquarters and field offices with 
National Commissions, taking into account their national 
characteristics.  The second decision recognizes that 
National Commissions are a key actor in forging Member 
States' views on UNESCO's strategies and programs and 
reaffirms the need for UNESCO field offices and the National 
Commission to work in close cooperation through mutual and 
regular consultations.  It also invites the Director-General 
to present to the General Conference proposed guidelines for 
such cooperation. 
 
OLIVER