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

UNCLAS SECTION 01 OF 03 GENEVA 002714 
 
SIPDIS 
 
DEPARTMENT FOR PRM 
 
E.O. 12958: N/A 
TAGS: PREF IOM
SUBJECT: IOM SUB-COMMITTEE ON BUDGET AND FINANCE 
 
REF: STATE 199857 
 
¶1.  (U) Summary: Member states approved most agenda item 
presented by the International Organization for Migration 
(IOM) during the 94th Session of the Sub-committee on Budget 
and Finance (SCBF) November 1.  However, three issues -- 
IOM's overhead rate policy, its Program and Budget for 2006, 
and a Delocalization proposal -- require further discussion. 
IOM's administrative budget for 2006 will be 37.119 million 
Swiss francs, held steady from 2005.  Its proposed 
operational budget stands at USD 426.9 million, a substantial 
reduction from 2005 owing largely to the conclusion of forced 
labor and other compensation programs funded solely by 
Germany and Switzerland. End summary. 
 
Business Items 
- - - - - - - - 
 
¶2.  (U) Election of officers:  SCBF members unanimously 
endorsed the nominations for a second term of Deputy 
Permanent Representative Dezso Horvath (Hungary) as Chair and 
First Secretary Lenah Nyambu (Kenya) as Rapporteur, as well 
as the nomination of First Secretary Eliana Beraun Escudero 
(Peru) as Vice-Chair. 
 
¶3.  (U) Outstanding contributions: Despite major efforts by 
the IOM Administration, unpaid balances of outstanding 
contributions are still quite large (more than CHF 5.7 
million total; for comparison, the annual Administrative 
Budget is CHF 37 million).  Canada and Germany proposed 
during informal consultations that IOM threaten to close down 
or transfer Missions with Regional Functions (MRFs) that are 
in countries in arrears.  The African Group urged countries 
in arrears to negotiate repayment plans, but argued that 
"Africa is not getting much benefit from IOM" and has acute 
migration needs; Member States should not sanction countries 
already suffering from serious financial problems.  Peru, 
Uruguay, Colombia, Iran, and Cape Verde committed to pay off 
their arrears through repayment plans by the end of the year. 
 Germany expressed concern that this issue is still a problem 
and also questioned the continuation of MRFs in countries 
with arrears (aka Article 4 countries.)  USDEL reiterated 
that, as a matter of principle, the USG will not support 
non-emergency IOM activities if a country is subject to 
Article 4 provisions.  Of note, Morocco explained that the 
issue of outstanding contributions is jeopardizing the work 
of IOM and that Article 4 countries should be suspended from 
the right to vote and embargoed from major program 
activities.  Morocco also said that, prior to encouraging 
states to apply for IOM membership, the Administration needed 
to do a better job of providing information to countries on 
rights and obligations of membership.  The Chair of SCBF 
noted that in order to continue to highlight the arrears 
issue, it has been added to the Council agenda this year. 
 
¶4.  (U) Summary Update on the Program and Budget for 2005: 
Speaking for the African Group, Algeria praised IOM's recent 
work on attempting to obtain balance in the regional 
distribution of activities in the Operational Part of the 
Budget.  SCBF took note of the updated document, which shows 
the budget has increased from USD 899.2 million to USD 1.1 
billion. 
 
¶5.  (U) Staff Association Committee (SAC) Statement:  Marco 
Boasso, chairman of the employee association, presented 
Member States with a number of staff concerns, including 
zero-nominal growth (ZNG), delocalization (see paragraph 12), 
and the IOM Administration's continued lack of consultations 
and dialogue with the SAC.  Boasso said that the significant 
growth of IOM ) in terms of membership, operations, and 
demands placed on the Administration by the Member States ) 
has not been accompanied by the administrative resources 
required to meet the new demands because ZNG does not allow 
IOM to cope with the real growth and expansion of the 
organization.  The SAC is also concerned with IOM's planned 
second phase of delocalization, feeling that the proposal 
lacks transparency and predictability, and that the lessons 
of the Manila delocalization have not been analyzed yet. 
Boasso reiterated the need for the IOM Administration to 
reactivate its efforts to consult with the SAC when staff 
interests are at stake.  He reported that although the 
Director General and Deputy Director General expressed 
willingness last spring to regularize meetings with the SAC, 
only one such meeting has taken place.  Boasso stressed 
communication with staff as a key to fostering loyalty, 
assuring job satisfaction and increasing productivity within 
the organization.  Finally, the SAC strongly supported the 
affiliation to the UN Joint Staff Pension Fund (UNJSPF), 
given long-standing dissatisfaction with the poor returns of 
the current Provident Fund (see paragraph 11.) 
 
¶6.  (U) Draft Resolution on Project-Related Overhead:  SCBF 
Member States generally endorsed the proposed draft 
resolution to change IOM's overhead structure from the 
current 12 percent of staff and office costs to a more 
standard 5 percent of total costs. Only Germany, which is 
awaiting final instructions from capital, expressed a 
reservation. The draft resolution includes a "grandfather 
clause" for resettlement and return programs, including 
counter-trafficking activities where the international 
transportation costs make up a significant portion of the 
total cost of the activity.   Member State endorsement of the 
resolution is the result of a series of successful informal 
consultations led by the IOM Administration.  SCBF will 
recommend the resolution to the Council for approval in 
December, pending Germany's instructions. 
 
2006 Program and Budget 
- - - - - - - - - - - - 
 
¶7.  (U) ZNG:  Despite IOM's initial proposal to submit a 
budget which would have increased the Administrative Part of 
the Budget by CHF 992,000, major donors used the informal 
consultations process to convince IOM that this is not the 
year to submit a zero-real growth (ZRG) budget, which risked 
repeating the contentious and fruitless exchanges of past 
years.  However, even though the IOM Administration agreed to 
a ZNG budget this year, there is an increasing push by IOM 
and other Member States, including Australia, France and 
Sweden, to re-visit this issue next year.  IOM insists that 
it cannot continue to absorb costs without serious negative 
consequences for the organization including internal 
oversight and staff security.  On the margins, the USDEL and 
other Member States asked for details and specifics on this 
negative impact.  IOM has proposed to begin informal 
consultations with member states early in 2006 and will most 
likely come out with a paper arguing for a move toward a ZRG 
approach in 2007.  Of note, under ZRG, most of the Member 
States would have nonetheless had lower assessments in 2006 
owing to expanded membership.  However, the U.S. as the only 
country assessed at a maximum rate, would have seen an 
increase equal to approximately USD 100,000. 
 
¶8.  (U) Organizational Structure: Member States supported 
both the establishment of the Elections Support Unit and the 
consolidation of the Migration Management Services pillar 
under headquarters operations.  The Administration had 
emphasized that these changes simply formalized structural 
changes for managing existing work by IOM. 
 
¶9.  (U) Stranded Migrant Facility:  The Director General 
intends to establish a funding and operating mechanism which 
will provide return assistance to migrants who are stranded. 
Funding would be provided regardless of how such migrants 
first moved, so long as the humanitarian needs are verified, 
voluntariness of the return is confirmed, and the migrant 
cannot be assisted under another mechanism, including other 
IOM programs.  Per instructions, the USDel stated that 
questions have not been sufficiently answered on the 
modalities of the Facility and the criteria for accessing it. 
Despite initial concerns raised by Canada and the Netherlands 
during informal consultations, only the U.S. raised a 
dissenting voice during SCBF proceedings.  The USDEL 
subsequently met with representatives of the Administration 
and asked for additional information on this Facility and 
answers to our specific questions. 
 
Other Items on the Agenda 
- - - - - - - - - - - - - 
 
¶10.  (U) 1035 Facility:  Both GRULAC and the African Group 
expressed support for this Facility, noting that a more fair 
geographic balance is apparent this year.  Colombia 
emphasized the importance of the Facility's flexibility and 
ease of access for developing Member States and Member States 
in transition.  Benin expressed its intent to have a 
ministerial meeting in Cotonou on remittances and requested 
the use of the 1035 account to assist in the participation of 
members from LDCs; both Nigeria and Bangladesh supported this 
idea.  IOM said that it would work with countries who are 
interested in this project to come up with a proposal to 
access the 1035 account. 
 
¶11.  (U) IOM Social Security:  As noted in previous 
discussions, Member States have supported the idea of 
providing more reliable and secure social security coverage 
to IOM staff members.  Given IOM's thorough research (with 
the UN) and transparency (discussions with the SAC and their 
endorsement of the plan) in the process, SCBF approved the 
recommendations made by the IOM Administration. 
 
¶12.  (U) Delocalization:  IOM Management Coordinator Dirk 
DeWinter presented the Administration proposal on 
delocalization.  Although the original proposal focused on 
recommending a second global Administrative Support Center in 
the Western Hemisphere to be located in Panama's City of 
Knowledge, DeWinter explained that some Member States had 
argued that the proposed Western Hemisphere Center is not on 
equal footing with Manila, which provides global 
administrative support services. They had argued that, as the 
new Center is meant only for the Western Hemisphere and is 
not truly a global Facility, funding support should come from 
Western Hemisphere countries. DeWinter noted that although 
the Western Hemisphere Center would not immediately be a 
global Administrative Center like Manila, it could eventually 
take on worldwide support functions if the IOM Administration 
and Member States identify certain activities that can be 
consolidated there.  Although many countries supported the 
proposal for a Western Hemisphere Administrative Center (the 
African Group and GRULAC were among them), the USG and others 
said that the time was not right to make final decisions on a 
new Facility.  Although IOM has identified Panama as the best 
location, Uruguay and the Dominican Republic emphasized 
during the meeting that they would also like to be considered 
as hosts to such a center.  In addition, IOM's paper now 
refers to a Western Hemisphere Regional Center, which is 
different from their original proposal of a global 
Administrative Center. Member States would like more 
information on this Center's value-added compared to existing 
offices, such as IOM MRFs.  The SCBF agreed that there should 
be further discussion on this issue and that a more detailed 
plan should be submitted by IOM.  The Chair suggested that, 
pending additional consultations, Member states may be 
prepared to make a final decision on this issue during the 
Spring 2006 SCBF. 
 
¶13.  (U) Report on Human Resources: Australia asked if the 
new human resources management software system (PRISM) would 
be negatively impacted by ZNG; IOM said ZNG had a negative 
impact on improving this system and the Director General has 
therefore allocated some of the surplus overhead (USD 
230,000) for PRISM this year. Algeria and Morocco noted the 
persistent under-representation of LDCs, particularly in 
decision-making positions, on IOM's staff rosters. The 
Administration said that it has an agreement with the SAC 
that when a vacancy occurs, IOM will try to be fill it 
internally.  However, it is attempting to develop creative 
solutions to this persistent problem and remains open to 
input on how better to publicize external vacancies.   When 
asked by Canada about IOM's plans to address gender 
imbalances in staffing, IOM responded that it has made some 
efforts toward obtaining gender parity but still has a way to 
go.  IOM is making &every effort,8 particularly in the 
field, when making decisions on appointments and postings. 
For example, they include a person from the gender team when 
undertaking such decisions. 
 
¶14.  (U) Any other business:  The Deputy Director General 
noted that this year's informal consultations process was 
very successful in paving the way for consensus on a number 
of issues during SCBF, and announced that several countries 
have requested IOM membership for the Council Session in 
December, including Cameroon and Ghana. The Chair noted that 
the second term for the external auditors of Norway comes to 
an end in 2006.  The Chair has asked the pro bono auditors 
about their willingness to continue the task for a third and 
final year; this is supported by the IOM Administration, and 
the auditors have agreed.  The Chair will prepare a proposal 
for the Council to confirm.  The external auditors have 
performed in a very thorough and transparent manner during 
their first two terms.  USDEL recommends the USG support the 
Chair's proposal to retain them for a final term. 
Moley