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UNCLAS GENEVA 002375 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR IO 
USDOC FOR PTO - PAUL SALMON 
 
E.O. 12958: N/A 
TAGS: ECON AORC WIPO
SUBJECT: UN REFORM: US BLOCKS WIPO BUDGET OVER ACCOUNTABILITY 
 
REF: State 133443 
 
------- 
SUMMARY 
------- 
 
¶1.  (U) At the WIPO 43rd General Assemblies, the US succeeded in its 
goal of forcing discussion of a confidential internal audit report 
alleging misconduct on the part the Sudanese Director General Kamil 
Idris.  However, on the last day of the 10-day meeting, the African 
countries rejected a proposed process to deal with the allegations. 
The US and its allies then brought proceedings to a halt, declaring 
no further business could be conducted until the questions 
surrounding Idris were resolved.  In two dramatic and rare votes 
(the first since 1997) taken as midnight approached, the US and 
like-minded countries blocked a motion to close debate on proposals 
to lower fees in the Patent Cooperation Treaty (PCT) Assembly, and 
then blocked adoption of new operating budgets (both a revised 
2006/07 budget and a new 2008/09 budget proposing increased spending 
for the so-called development agenda) in the General Assembly (GA). 
Under the terms of the WIPO Convention, operations will continue to 
be funded at the level of the last approved budget.  WIPO, however, 
will be able to meet increased demand for its patent, trademark and 
industrial design registration services under so-called "flexibility 
clauses" approved earlier that permit additional expenditure on 
these systems in accordance with increased filings. 
 
¶2. (SBU) These actions were widely seen as a strong rebuke to the 
Director General and his supporters.  The US and its allies will now 
continue to press for convocation of extraordinary meetings of the 
WIPO bodies with authority to discipline the Director General. 
Nevertheless, Kamil Idris, with strong support from Egypt, Algeria, 
and other African and Islamic countries, continues to resist calls 
for his resignation.  His removal will require a concerted, 
sustained effort and close cooperation with like-minded countries. 
In devising our strategy, we need to be mindful that we are in the 
minority with the power to block (if like-minded countries support 
us) but not/not to carry motions should voting be required.  This is 
nonetheless a strong position as tactically two-thirds of eligible 
voting states are required to carry over the minority's objections 
and tactically the US and our allies should retain the ability to 
shape the debate.  End summary. 
 
------------ 
INTRODUCTION 
------------ 
 
¶3.  (U) The World Intellectual Property Organization (WIPO) convened 
its 43rd General Assemblies from September 24th to October 3rd, 
¶2007.  The agenda included 30 items of business, but two were of 
particular interest to member states:  Agenda Item 12, added at US 
request, concerning an internal audit report alleging misconduct on 
the part of the Director General, and Agenda Item 18, adoption of 
proposals for a "development agenda" at WIPO, the product of three 
years of contentious negotiations.  This message reports on the 
debate over Item 12; septel will report details on other agenda 
items. 
 
¶4.  (U) The US delegation was headed by US Permanent Representative 
to the UN in Geneva, Ambassador Warren Tichenor, and US Department 
of Commerce Under Secretary for Intellectual Property and Director 
of the US Patent and Trademark Office (USPTO) Jon Dudas, and 
included representatives from Mission Geneva, the Department of 
State, USPTO and the U.S. Copyright Office. 
------------------------------ 
UNDERSTANDING THE BATTLE LINES 
------------------------------ 
¶5. (SBU) THE DEVELOPMENT AGENDA:  WIPO has 184 members, most of whom 
rarely, if ever, file patents.  The patent and trademark 
registration systems provide about 90 percent of the revenues but 
absorb only about 40 percent of the expenditures.  With a majority 
of members who have little-to-no stake in the international 
intellectual property rights protection system, the major users (US, 
Japan, EU, Korea) have gradually been losing control of the 
organization to those who believe it can be used to finance an 
anti-IP agenda.  In its opening statement during this meeting, for 
example, Brazil openly declared its intention to transform WIPO into 
a "political" organization that concentrated more of its resources 
on economic research and more studies on the "impact" of IP on 
development.  Proponents of the "development agenda" cared little 
about accountability so long as the Director General supported their 
efforts. 
¶6. (SBU) SCARE TACTICS:  For his part, Idris cynically but 
effectively used the "development agenda" to curry favor and win 
supporters to defend against mounting allegations of corruption at 
WIPO. (Comment: In addition to the internal audit report, reports by 
a variety of independent bodies, including the UN Joint Inspection 
Unit and the Volker Commission investigating the Oil-for-Food 
scandal, reported irregularities, lack of internal oversight, and 
potential bribery in addition to mismanagement.  End comment.) 
Idris ultimately convinced many developed countries that any action 
against him would be seen as an attempt to block the development 
agenda.  The US has thus been pursuing its quest for good governance 
with little support from even like-minded countries.  Most were 
especially reluctant to pursue a confrontation during these General 
Assemblies since the hard-fought "development agenda" was up for 
adoption.  Idris may be corrupt and unscrupulous but he is 
politically savvy, and had concluded that given his support among 
the "majority" of members, he needn't heed US demands to answer to 
member states regarding his conduct. 
 
¶7. (U) WIPO REGIONAL POLITICS: Like most UN organizations, WIPO's 
business is conducted by member states organized into seven regional 
or like-minded groups.  The US belongs to "Group B," a group of 32 
industrialized countries that includes the much of the EU, Japan, 
Switzerland, Canada, Norway, New Zealand, the Holy See, Israel and 
Turkey, chaired by Italy, with US as Vice Chair playing an active 
role. (Note: the US took over as coordinator at the end of the 
meeting. End note.) Other EU members belong to the 16-country 
Central European and Baltic States group, led by Poland.  The Africa 
Group, led by Algeria, has 53 members.  The Asia/Pacific Group, 
which includes non-African Arab and many Islamic countries, has 37 
members.  GRULAC includes 33 Latin American and Caribbean countries, 
chaired by Brazil, sponsor of the "development agenda."  The Russian 
Federation coordinates the 12-members of the Central Asian and 
Eastern European Group, and finally, China is its own group.  As in 
other UN bodies, there is active competition among groups for key 
positions.  In the run up to the assemblies, regional coordinators 
negotiated a three-way deal to give Africa the Chairmanship of the 
General Assembly (in the person of the Nigerian Permrep, Ambassador 
Martin Uhomoibhi), Group B the chair of the Coordination Committee 
(filled by Norway) and GRULAC the chair of the Program and Budget 
Committee (filled by Brazil). 
 
¶8. (SBU) EXPANDING THE NORTH-SOUTH DIVIDE: The introduction of 
proposals for a "development agenda" greatly politicized debates in 
what used to be a calm, technically-minded organization.  Many 
developed countries were opposed to some of the more radical 
proposals, seen as an attempt to turn WIPO into UNCTAD.  Developing 
countries, eager for increased technical assistance, strongly 
supported the "development agenda" and saw developed country 
resistance as evidence of their lack of support for developing 
countries in general.  As noted above, as accusations of 
improprieties mounted against him, the Director General 
intentionally sought to further polarize this debate to gain 
advantage. 
 
--------------- 
AGENDA ITEM 12 
--------------- 
 
¶9. (U) DEMANDING ACCOUNTABILITY: Supporters of embattled WIPO 
Director General Kamil Idris sought to suppress discussion of the 
confidential internal audit report which concluded that Idris had 
 
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used false birth dates for his personal gain, even though the report 
had been leaked to the press and posted on the internet several 
months earlier. (Note: it is available at 
http://www.foxnews.com/projects/pdf/Idris.pdf .) The United States, 
initially a lone voice demanding that the report be added to the 
meeting's agenda, led efforts to put into place a process to hold 
the Director General accountable. 
 
¶10. (U) AMONG FRIENDS?: It took two days of negotiations to find an 
acceptable formulation to allow "Item 12" to remain on the agenda, 
after the Africans initially tried to block adoption of an agenda 
that included it.  It was agreed that the matter would initially be 
discussed by a group of "Friends of the Chair" who would report 
recommendations on how to deal with the report to the Chair.  Member 
states would be given the opportunity to comment after the Chair's 
report to the plenary.  The "Friends of the Chair" included 
representatives of each regional group in WIPO, WIPO Legal Counsel 
Edward Kwakwa, and the Costa Rican GA Vice Chair.   After a week of 
protracted but fruitless informal negotiations among the so-called 
"Friends," the GA Chair informed the plenary that the group was 
unable to agree, though a majority had favored referral of the 
matter to WIPO's independent Audit Committee.  (Note:  the US did 
not oppose this but did not see it as sufficient, since this 
committee has no authority over the Director General. End note.) 
¶11. (U) ANSWER OR QUIT: In the US statement on the subject, 
Ambassador Tichenor described the audit report's conclusions in 
detail, and challenged the Director General to clearly and 
convincingly answer the allegations in open forum before member 
states, or resign.  During the extraordinary discussion that 
followed the US statement, 63 member states intervened, raising 
questions and reciting the report's conclusions for the record.  At 
least half the interventions supported US calls that Idris explain 
himself or resign.  WIPO had never witnessed such a discussion. 
¶12. (SBU) Over US objections, the Chair gaveled the discussion of 
the agenda item closed on the last day of assembly, noting that it 
would be left up to member states to decide the way forward. 
(Comment: Challenging the Chair's ruling would have required 
mustering a two-thirds majority, which we did not have.  The US 
delegation judged that such a move would have been 
counterproductive, since it would have antagonized the Chair, who 
had been fair despite intense pressure from the African and Islamic 
countries to conclude discussions on the matter much earlier during 
the meeting. End comment.) 
 
¶13. (U) BRINKSMANSHIP OVER VOTING: With the exception of the 
election of the current Director General in 1997, WIPO has always 
taken decisions by consensus.  Part of the African Group's strategy 
had been a threat to call for a vote, always claiming that it had 
the support of the majority of WIPO members.  Nevertheless, Group B 
declared that it would not agree to discuss remaining agenda items 
until the questions concerning the Director General were resolved, 
despite the closure of debate on Agenda Item 12.  The Africans 
renewed the vote threat as discussions on US, Japanese and Brazilian 
proposals to reduce patent registration fees dragged on 
inconclusively. "We don't think it would be advantageous for either 
side to go to a vote," the Algerian warned.  "We all know about the 
US arrears."  (Comment: While the US was in arrears, it had not yet 
lost the right to vote, to the disgruntlement of the Algerian.  End 
comment.) 
 
---------------------------- 
CROSSING THE RUBICON: VOTING 
---------------------------- 
 
¶14.  (U) As the Assembly's scheduled closing hour of 6pm came and 
went, the Algerian Ambassador introduced a motion to close the 
debate.  The United States and Switzerland announced that they would 
block the motion, whereupon the Algerian called for a vote, sending 
the room into an uproar.  When calm was restored, the Swiss asked 
for clarification of voting eligibility, and the US asked for voting 
by roll call.  The WIPO Legal Counsel clarified that members whose 
contributions were two or more years in arrears would not e 
permitted to vote.  The roll call would be onl of those members 
eligible.  With that, for the frst time in WIPO's history, members 
voted on a mtion to close debate on the subject of PCT fees.  ith 
only 40 voting in favor of the motion, it faled (a two-thirds 
majority was required).  42 contries voted against the motion, and 
19 abstained  15 of the 137 members of the PCT Assembly, a smaller 
body than the WIPO General Assembly, were ineligible to vote.  The 
PT Assembly then adjourned, intending to reconvene,but was 
pre-empted by the General Assembly.  Septel will discuss the 
implications of the failure to formally close that Assembly. 
 
¶15. (U) JUST SAY NO:  During the break that followed, the Swiss, 
Portuguese, Spanish and US Ambassadors put forward a last-minute 
proposal for a process to deal with the allegations against the 
Director General, hoping that losing a vote would have softened the 
Africans.  However, they decided to reject the proposal when it 
appeared that GRULAC, the Russians, and the Chinese would support 
moving forward to consider and pass the organization's proposed 
budget.  The Chair reconvened the General Assembly at nearly 10 pm, 
and after an hour of procedural objections by Group B, allowed the 
secretariat to make its presentation.  Numerous developing countries 
 
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spoke in favor of approving the budget to finance and implement the 
"development agenda." Switzerland, Spain, the EU, Canada, and 
Australia raised concerns about proceeding without a resolution of 
the questions surrounding the Idris and in view of the lack of 
resolution over the issue of PCT fees.  The US announced it would 
block adoption of the budget, whereupon the Algerian called for 
adoption of the budget by acclamation in view of the US desire to 
withhold consensus.  Ambassador Tichenor repeated clearly that the 
US was opposed to adoption of the budget but was not "withholding" 
consensus. Rather, the US intended to "block" adoption of the 
budget.  The Algerian then called for a vote by a show of hands, and 
the US countered with a request for vote by roll call, seconded by 
Spain. 
 
¶16. (U) GROUP B UNITY HOLDS:  Legal Counsel Edward Kwakwa made clear 
the vote would concern both the revised 2006/07 budget and the 
Director General's new 2008/09 program and budget proposing 
increased spending for the "development agenda."  The roll call 
began shortly before midnight, with 64 countries voting to adopt the 
budget, 44 countries voting against the motion, 2 abstentions, 47 
absent and 27 ineligible.  (A matrix tabulating the results is being 
forwarded to Washington separately by email. Others wishing a copy 
should email Lisa Carle at US Mission Geneva.)  The Legal Counsel 
announced the results to a hushed room of stunned delegates.  For a 
second time, a motion proposed by the Africa group had failed to 
muster the required majority.  There would be no new budget, and no 
new financing for the "development agenda."  Under the terms of the 
WIPO Convention, operations will continue to be funded at the level 
of the last approved budget, i.e., the original 2006/07 biennial 
budget.  The Chair announced that since the time allotted to the 
43rd General Assemblies had elapsed (it was by then nearly 1 am), 
the meeting was over. 
------- 
COMMENT 
------- 
¶17. (SBU) WHAT WE ACHIEVED: The meeting outcome represents an 
important turning point at WIPO. The US overcame significant 
entrenched interests to put this issue front and center and demand 
action and a process for dealing with misconduct by the head of the 
agency.  At the start of the General Assembly, the US was the only 
country to object to an African proposal to block adoption of an 
Agenda that included consideration of the internal auditor's report. 
By the end of the meeting, the US was supported by a coalition that 
included Japan, the EU (overcoming French and Italian opposition to 
blocking the budget fear of alienating the Africans,) the Central 
European and Baltic States, and, significantly, Korea, which broke 
ranks for the first time with the Asian Group. It was a first at 
WIPO. 
¶18. (SBU) We are in a stronger position now than we would have been 
had the Africans agreed to a process.  If countries want to get a 
budget to implement the "development agenda," they'll have to agree 
to action on Idris.  And in the interim, Idris will be constrained 
by reduced funding levels which will limit his ability to distribute 
largess to his supporters, or deliver on many promises to employ 
cronies' relatives or fly them on lavish "missions" for "technical 
assistance."  Pressure for him to step down will increase the longer 
the situation drags on. 
 
--------------------------------------------- 
RECOMMENDED NEXT STEPS: A SUSTAINED CAMPAIGN 
--------------------------------------------- 
¶19. (SBU) Idris continues to resist all calls for resignation, 
however, reportedly relying on the counsel of the Egyptian Permanent 
Representative, Ambassador Sameh Shoukri, among others.  (Note: 
Shoukri's son is employed at WIPO. End note.) Removing Idris will 
require a three-pronged strategy: 1) continuing to pursue due 
process 2) public diplomacy and lobbying key stakeholders to make 
clear to Idris that he has no choice but to resign, and 3) working 
with like-minded countries behind the scenes to turn up the 
pressure, and consider whether to ask a third country such as Saudi 
Arabia to intercede. 
¶20. (SBU) Mission Geneva is coordinating with Group B countries to 
request an extraordinary session of  Coordination Committee to be 
eventually followed by the General Assembly (on the time-table 
earlier suggested, i.e., Coordination Committee by December, the 
General Assembly by February 2008 - we're somewhat constrained by 
rules which specify time-limits for calling meetings).  A smaller 
group consisting of delegates from the US, France, Belgium, Spain, 
Turkey, UK, Switzerland and the Netherlands has formed to begin 
outreach to all Coordination Committee members to build support to 
bring about the Director General's resignation.  Meanwhile, the US, 
Switzerland and Spain are quietly working to bring pressure to bear 
on Idris through other channels. The Swiss government issued an 
unprecedented official statement announcing their loss of confidence 
in Idris and calling for new leadership at WIPO. 
¶21. (SBU) LOBBYING: The issue needs to be included in high-level 
conversations with key WIPO member states.  We recommend thanking 
and reinforcing support from the EU, Japan, Canada, Korea, Spain, 
Switzerland and Nigeria, whose Ambassador as Chair resisted intense 
pressure and played by the rules.  We need to push China, Russia, 
Mexico, Chile, Colombia, Brazil, Argentina, Singapore, South Africa, 
Kenya, Pakistan, and particularly Algeria and Egypt, who were so 
unhelpful. 
¶22. (SBU) UNSYG: We had earlier recommended a demarche to the 
Secretary General.  While he doesn't have statutory authority over 
 
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the WIPO DG, he does have moral authority, and the obligation to 
speak out when the conduct of the head of a UN agency tarnishes the 
UN as a whole.  We strongly recommend raising this issue with Ban 
Ki-moon. 
 
¶23. (SBU) INDUSTRY CONTACTS: We have been pushing for help from 
industry, which has been reluctant to speak out; we could use the 
Department's (and USPTO's) help in convincing them to act with an 
open letter to Idris. (A coalition from the US, Japan and Europe 
recently wrote to Idris urging patent fee reductions; they ought to 
do the same for good governance.) 
 
¶24. (SBU) CONGRESSIONAL BRIEFINGS: Mission Geneva strongly 
recommends briefing key Congressional committees, and urging 
expeditious Senate concurrence to the amendment to the WIPO 
convention limiting the Director General to two terms. We must close 
the door to a possible third term for Idris. 
¶25. (SBU) VOTING AT WIPO:  Mission Geneva also urges immediate steps 
to ensure that the US does not fall so fall in arrears in its 
unitary contributions to WIPO that we lose the right to vote. 
¶26. (SBU) HOLDING TOGETHER OUR COALITION:  As we proceed, it is 
important to remember that while the US has important equities at 
stake in WIPO, and enormous influence, we are not in a position to 
remove Idris without the help of a broad coalition of countries.  We 
have emerged from this contentious meeting with a 
better-than-hoped-for outcome, and a strong minority on which to 
build.  But for the moment we have only the power to block (if 
like-minded countries support us) and not/not to carry motions 
should voting be required. That said, if we can carry forward the 
momentum generated at last week's meeting, we will improve WIPO and 
tangibly advance our UN reform agenda. 
¶27.  This cable was cleared by both Heads of Delegation. 
TICHENOR