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DE RUEHTC #0977/01 3261551
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O 211551Z NOV 08
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2252
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UNCLAS THE HAGUE 000977 
 
SENSITIVE 
SIPDIS 
 
STATE FOR ISN/CB, VCI/CCA, L/NPV, IO/MPR, 
SECDEF FOR OSD/GSA/CN,CP> 
JOINT STAFF FOR DD PMA-A FOR WTC 
COMMERCE FOR BIS (ROBERTS AND DENYER) 
NSC FOR FLY 
WINPAC FOR WALTER 
 
E.O. 12958: N/A 
TAGS: PARM PREL CWC
SUBJECT: CWC:  INDUSTRY CLUSTER MEETINGS, NOVEMBER 13-14, 
2008 
 
REF: A. THE HAGUE 972 
     ¶B. GRANGER-ISN/CB E-MAIL 11-17-08 
     ¶C. THE HAGUE 609 
     ¶D. FERGUSON-ISN/CWC-DEL E-MAIL 11-12-08 
     ¶E. THE HAGUE 898 
 
This is CWC-56-08. 
 
------- 
SUMMARY 
------- 
 
¶1. (U) The three industry cluster meetings on 
November 13-14 were informative and somewhat 
productive.  The Technical Secretariat (TS) presented 
their latest paper on Sampling and Analysis (S&A) and 
answered delegations' questions during the first 
meeting.  Two new industry facilitations began: 
Schedule 2A/2A* low concentrations under Giuseppe 
Cornacchia (Italy), and enhanced OCPF declarations 
under Marthinus van Schalkwyk (South Africa). While 
states' views diverged predictably on both issues, 
delegates welcomed the new round of facilitations and 
most seemed ready to get to work.  Both facilitators 
expressed their intention to continue facilitations 
in early 2009 and to hold consultations on a regular 
basis.  The TS promised to publish a tentative 
schedule of meetings for the first half of 2009. 
 
---------------------- 
SAMPLING AND ANALYSIS 
---------------------- 
 
¶2. (U) On November 13, the Industry Cluster Vice- 
Chair Amb. Benchaa Dani (Algeria) opened the first of 
the three scheduled Industry Cluster meetings.  After 
giving brief introductory remarks, Amb. Dani turned 
the meeting over to Bill Kane (Head, Industry 
Verification Branch), who presented the recently 
released Schedule 2 S&A paper (S/719/2008).  (Note: 
Copies of slides sent by unclassified email to 
Washington, ref B.)  Gary Mallard (Head, OPCW Lab) 
followed Kane's presentation with an overview of the 
annex to the TS's S&A paper before opening the floor 
to questions from delegations. 
 
¶3. (U) In response to Delrep's question on the site 
selection methodology for S&A, Kane said that the TS 
does not exclude any Schedule 2 sites from 
consideration; however, during the start-up period 
(September 2006 to March 2008), the TS focused on 
batch/multi-purpose Schedule 2 sites.  Responding to 
a later follow-up question from Germany, Kane said 
that S&A had been geographically distributed during 
the start-up period but that geography was no longer 
a factor in selection.  In 2009, the TS plans to 
conduct ten Schedule 2 inspections with sampling and 
analysis; these will be conducted partly at sites in 
States Parties that have not yet had S&A inspections 
and the rest among the 17 States Parties that have 
already hosted S&A inspections since September 2006. 
 
¶4. (U) China noted that it sees S&A as an important 
tool and will be hosting its second S&A inspection 
soon.  In response to China's question on using S&A 
during an initial inspection of a Schedule 2 site, 
Kane said that, while the CWC does not make a 
distinction between initial and subsequent 
inspections for S&A use, the TS will continue to 
focus on using S&A only during subsequent 
inspections.  However, he did not rule out using S&A 
during initial inspections in the future. 
 
¶5. (U) In contrast to China, Japan stated that it had 
been a hasty decision to continue using S&A after the 
start-up period without proper consultation, and 
noted that there had been some procedural problems 
Qnoted that there had been some procedural problems 
 
related to the two S&A inspections hosted by Japan 
since September 2006.  Two problems highlighted by 
Japan included the inability to identify some 
scheduled chemicals using the OPCW Central Analytical 
Database (OCAD), and the inability to analyze some 
scheduled chemicals with the gas chromatograph mass 
spectrometer (GCMS), both of which are key components 
of sampling and analysis. 
 
¶6. (U) France asked how the TS prepares for "false 
positive" identification of scheduled chemicals 
during S&A.  Kane replied that TS chemical analysts 
consult open-source material to familiarize 
themselves with a selected site's chemical processes. 
They also run test samples in the OPCW lab to see if 
anything other than expected chemicals is identified. 
Mallard added that these preparatory experiments are 
used to answer any questions that arise during actual 
inspections and have helped the TS anticipate most 
problems, including "false positives." 
 
¶7. (U) Turning to France's other questions on the 
costs of conducting S&A and any future plans for 
extending S&A use to Schedule 3 or OCPF inspections, 
Kane reported the average cost for S&A is 
approximately EUR 15,000 in addition to the normal 
costs for Schedule 2 inspections.  He also said that 
the TS currently does not have any plans to extend 
S&A use to Schedule 3 and OCPF inspections, although 
he noted that the CWC allows for such an extension. 
Australia indicated its support for extending the use 
of S&A; Italy did also, but qualified that any 
extension should be done after careful review and 
consultation. 
 
¶8. (U) Kane stated that in the 19 S&A inspections 
held to date, 11 had identified "false positives"; 
the majority of these were resolved through further 
analysis, but two cases had to be referred to a 
commercial chemical database.  In addition to the 
"false positives," there were two instances where 
scheduled chemicals were discovered -- to the 
surprise of the facility -- resulting from process 
impurities.  Iran raised concerns about the 
reliability of the verification regime and asked how 
errors in S&A can be corrected to avoid so many 
"false positives" in the future.  Kane and Mallard 
both said that "false positives" occur all the time 
and are an expected, inherent part of the process. 
 
------------------ 
LOW CONCENTRATIONS 
------------------ 
 
¶9. (U) Industry Cluster consultations continued on 
November 13 with the first meeting on Schedule 2A/2A* 
Low Concentrations chaired by facilitator Giuseppe 
Cornacchia (Italy).  Cornacchia gave an introduction 
on the issue, stressing that the Scientific Advisory 
Board (SAB) declared the issue to be purely 
regulatory and political -- rather than scientific -- 
in nature.  He asked delegations to be mindful that 
industry in many countries has called for a level 
playing field and harmonization, and that setting a 
threshold contributes to the common effort to 
strengthen the CWC without being aimed at any 
particular party.  Cornacchia underlined his desire 
not to pick up where the last consultations on the 
issue left off in 2006 (EC-24/DEC/CRP.6), stating 
that time has since elapsed and that he welcomes new 
Qthat time has since elapsed and that he welcomes new 
ideas and positions. 
 
¶10. (U) Russia started the discussion by stating that 
it would like the clear differentiation between 2A 
and 2A* chemicals enshrined in the CWC to be 
maintained in regard to threshold limits.  Citing a 
decision on transferring scheduled chemicals (C- 
 
V/DEC.16), Russia suggested a limit in the range of 
1-10%. 
 
¶11. (U) After quoting Isaac Newton and noting its 
appreciation for the previous facilitator's work, the 
Iranian delegate stated that his government does not 
have a new position on the issue.  Iran had supported 
the previous facilitator's proposed 0.5% threshold 
but would consider any new proposals.  The delegate 
went on to express sentiments that were later echoed 
by a number of delegations (including Sweden and the 
UK), namely that there was a lot of merit in all of 
the previous work and discussion on this very 
complicated and technical issue and that it should 
not be wholly disregarded. 
 
¶12. (U) China stated its readiness to play a 
constructive role and its openness to a level low 
enough to address proliferation concerns. 
 
¶13. (U) Delrep, Germany, Japan, France and South 
Korea all stated their national thresholds are set at 
30% but indicated flexibility and willingness to 
reach a compromise.  Germany noted that it does not 
see a compelling reason to go below 30% as there have 
not been any problems at that level for more than ten 
years.  However, the German delegate understood calls 
for level playing field and suggested a level between 
1% and 30%.  Citing the SAB report on low 
concentrations (SAB-IV/5), Japan suggested a level of 
10% as a compromise. 
 
¶14. (U) Italy stated its threshold is 0.5% and that a 
low limit is good due to the toxicity of the 
chemicals concerned.  But, the delegate stressed his 
government's flexibility and desire to reach 
agreement on the issue.  Italy's goal is for 
harmonization of regulations and fair competition for 
industry.  Australia -- also with a 0.5% threshold -- 
echoed Italy's comments on the need for 
harmonization, stating that lack of a decision leaves 
a critical gap in the CWC. 
 
¶15. (U) Canada stated its threshold is also 0.5% and 
said that this was based on the SAB report referred 
to by Japan; Canada said that, unlike Japan, it had 
opted for the low end of the spectrum offered by the 
SAB.  While noting its openness to compromise, Canada 
said it wants to keep the previous facilitator's 
proposal (0.5% threshold) on the table for 
consideration.  The Netherlands echoed Canada, 
calling for transperancy and a level playing field, 
and indicated openness to a level between 0% and 1%. 
Finland also supported a threshold between 0% and 1%, 
calling for the level to be as low as possible. 
 
¶16. (U) The UK and Switzerland each stated their 
threshold is 1%.  Switzerland commented that a low 
threshold is necessary not to weaken the CWC.  It 
also asked the TS to provide an impact assessment of 
applying various thresholds, specifically asking how 
many sites would be affected at each proposed level; 
Australia and Ireland supported the request.  Germany 
said the information would be helpful but noted that 
data would be limited only to those who currently 
declare facilities and would therefore be incomplete; 
it suggested that States Parties might voluntarily 
provide information on undeclared sites to give a 
more complete picture.  Cornacchia promised to have 
the TS present Switzerland's requested assessment and 
Qthe TS present Switzerland's requested assessment and 
data at the next consultation, which he expects to 
hold in early 2009. 
 
¶17. (U) Amb. Javits observed a disparity of views 
concentrated at the upper and lower ends of the 
spectrum and proposed the idea of any threshold 
within a percentage range as a compromise.  He also 
 
suggested that two papers -- one each from countries 
at either end of the scale -- be circulated to 
explain the reasons for their positions and 
specifically to address safety and risk concerns. 
Italy agreed with the suggestion, calling for the 
papers not just to look at thresholds but also to 
delve into process issues, including purification and 
isolation.  Japan supported the idea of a range 
threshold, rather than a precise level, as a way to 
reach consensus. 
 
----------------- 
OCPF DECLARATIONS 
----------------- 
 
¶18. (U) The third Industry consultation was held on 
November 14, chaired by Marthinus van Schalkwyk 
(South Africa), to discuss enhancements to OCPF 
declarations.  Van Schalkwyk opened the meeting by 
saying that enhancing OCPF declarations is one point 
at which to start to tackle the larger issue of OCPF 
inspections.  Bill Kane (Head, Industry Verification 
Branch) made a presentation (ref B) on the TS's and 
DG's notes on OCPF declarations (EC-53/S/5 and EC- 
53/DG.11, respectively), updated since he first 
presented it in July (ref C).  He said that the TS 
has updated the Declarations Handbook based on the 
DG's Note and that it will be released in early 
December.  Kane also said that by implementing the 
proposed changes to declarations in the TS's Note, 
OCPFs could be divided into three categories of 
relevance, with the last two categories made up 
mostly of continuous and/or dedicated plants: 
- High: approximately 700 (16%) inspectable sites; 
- Medium: approximately 1400 (31%) inspectable sites; 
- Low: approximately 2400 (53%) inspectable sites. 
 
¶19. (U) After Kane's presentation, the Chinese 
delegate spoke in favor of directing OCPF inspections 
to the most relevant sites.  He said that any 
refinement to the verification regime needs careful 
consideration and called for full discussion of all 
proposals, including those in the DG's Note.  China 
supported TS outreach efforts to assist States 
Parties in addressing problems with their 
declarations and also supported the annual 
replacement of OCPF declarations.  However, he 
disagreed with the TS's claim that the DG's Note -- 
particularly updates to the Declarations Handbook -- 
could be implemented without a decision by the 
Executive Council (EC). 
 
¶20. (U) Italy asked for more information on how the 
TS expects the proposals to be implemented and what 
it expects the results to be.  The delegate commented 
that the numerical value attached to plant site 
characteristics (referred to as "R" in the TS's Note) 
will be critical.  Italy went on to ask which factor 
is most relevant in the A-14 algorithm and whether 
the updated Declarations Handbook would have a new 
table of relevant product codes (SITCs).  Kane 
responded that each factor is relevant to the 
algorithm; Steve Wade (Head, Declarations Branch) 
said that the TS did not plan to include a new table 
of SITCs. 
 
¶21. (U) Switzerland referenced its national paper on 
OCPF plant site characteristics and noted its support 
for the TS's Note.  The Swiss delegate called for the 
reduction of inspections at non-inspectable sites and 
noted that the proposals would aid this goal, with 
Qnoted that the proposals would aid this goal, with 
benefits offsetting any burdens.  Australia also 
supported both the DG's and TS's notes, saying that 
both will work together to address inspecting the 
most relevant OCPF plant sites. 
 
¶22. (U) India said that the two notes mark a 
 
departure from the Second Review Conference (RevCon) 
by imposing additional declaration obligations and 
asked whether the voluntary use of SITC sub-codes by 
some States Parties (per the DG's Note) would 
adversely affect those States Parties not using them. 
Echoing Switzerland and Australia, France countered 
that industry can deal with SITC sub-codes and would 
not be burdened by them, especially when balanced 
against reducing wasted inspections.  France noted 
its readiness to implement the proposals voluntarily. 
 
¶23. (U) Germany also spoke in favor of the DG's Note 
and said it did not foresee any major problems in 
implementing it voluntarily.  While agreeing on the 
need to focus inspections on the most relevant sites, 
on the TS's Note, Germany agreed with Italy on the 
importance of defining a value for "R" and also noted 
there might be legal problems with adding questions 
about plant site characteristics.  Germany also 
posited that there might be exponential effects from 
all of the changes to the OCPF verification regime -- 
from the new site selection methodology to 
declarations enhancements -- and that these will need 
to be considered aggregately. 
 
¶24. (U) Canada and the UK both expressed support for 
both notes and stated that they each had taken steps 
to implement them as soon as possible, starting with 
their 2008 declarations.  Japan, supporting the 
voluntary use of SITC sub-codes, asked when national 
authorities would need to start using them.  Wade 
responded that, due to their voluntary nature, there 
is no specific implementation date for using the sub- 
codes.  Canada asked two separate times when it could 
expect to benefit from using the sub-codes.  Kane, 
citing the DG's Note (para 45, EC-53/DG.11), 
confirmed that the TS will start incorporating the 
sub-code into the OCPF site selection process in 2009 
for 2010 inspections.  China ackhowledged that some 
states would derive benefits from implementing the 
proposals but, echoing India's earlier remarks, that 
should not be at the cost of other States Parties. 
It stressed the need to know the full impact -- 
including costs and benefits -- of using the sub- 
codes. 
 
¶25. (U) On the TS's Note, Japan asked about possible 
legal implications of amending the declaration form. 
Japan also said that the impact of adopting the 
proposal needed further consideration.  Mexico and 
the Netherlands each noted their general support for 
the two notes and called for further discussion and 
consideration; the Netherlands reiterated Germany's 
call for information on the impact of the proposals. 
 
¶26. (U) Delreps also welcomed the two notes but asked 
the TS to provide more information on the true 
benefit of the Proposals.  Drawing on guidance (ref 
CD, Delreps tabled a proposal to replace the sub- 
codes with a catch-all code for bulk chemicals. 
Delreps also asked if the TS had considered how new 
declaration information -- specifically the 
verification of equipment characteristics for an 
entire plant site -- would be incorporated into the 
inspection regime. 
 
¶27. (U) Iran interjected that a thorough conceptual 
discussion needs to take place before even discussing 
Qdiscussion needs to take place before even discussing 
the technical aspects of either note.  It claimed 
that the consultation's mandate came from the RevCon 
report (para 9.65, RC-2/4), saying on the one hand 
that it was necessary to keep the consultation's 
scope and discussion within that mandate, while going 
on -- and ignoring the blatant contradiction -- to 
say that discussion should not be limited to the DG's 
and TS's notes and that it was open to other 
proposals -- including the U.S. proposal on a code 
 
for bulk chemicals.  It rejected discussion of the 
TS's Note as premature, falling outside of the 
consultation's mandate because the proposal violated 
the RevCon report by imposing additional obligations. 
Therefore, Iran concluded that the proposal is no 
longer on the table for consideration. 
 
¶28. (U) Amb. Javits countered that both notes were 
prepared in response to the RevCon and clearly 
complied with the request in para 9.65 (RC-2/4) for 
the DG and TS to submit proposals to direct OCPF 
inspections towards facilities of greater relevance. 
He also stated that additional bureaucratic 
obligations do not represent a real burden: the real 
burden is wasted inspections at non-inspectable 
sites.  France and Germany both agreed, with Germany 
stressing that all proposals are on the table for 
consideration, whether or not they are accepted by 
all delegations. 
 
¶29. (U) Van Schalkwyk wrapped up the meeting, first 
noting his mandate came from the title of the two 
notes ("enhancement of OCPF declarations"), and then 
re-capping key points of the discussion.  He noted 
strong support for the TS's and DG's notes although 
some delegations still have questions and concerns 
about them.  He also noted general support for 
focusing OCPF inspections despite differing ideas on 
how to do this. 
 
----------------------- 
OTHER INDUSTRY MEETINGS 
----------------------- 
 
¶30. (U) After the Industry Cluster consultation on 
November 14, visiting Commerce officer Joe Cristofaro 
and Delrep met with Bill Kane (Head, Industry 
Verification Branch) and Peter Boehme (Senior 
Industry Officer, IVB).  Delreps asked about 
thresholds for OCPF mixtures.  Kane said that the TS 
has not considered the issue and has not received any 
input from other States Parties, nor are they 
familiar with other States Parties' regulatory 
requirements; however, he promised to give the issue 
some thought.  Cristofaro next asked about mixed 
plant sites and whether the results of one type of 
inspection (e.g., Schedule 2) are factored into the 
information available on the plant site.  Kane and 
Boehme explained that data essentially are kept in 
"silos."  The TS has not "connected the dots," so 
inspection information does not affect selection of 
other plants on the same site. 
 
¶31. (SBU) Kane then turned to sequential inspections 
in the U.S., asking if there is any flexibility in 
the current distance limit of 150 miles between 
inspected sites.  Cristofaro explained the U.S. 
position, indicating that experience with sequential 
inspections this years affirms that 150 miles is the 
farthest distance that can be reasonably accommodated 
to allow for sequential inspections within the same 
week. 
 
¶32. (SBU) Turning to Schedule 3 inspections, 
Cristofaro noted that the U.S. has had a larger-than- 
expected increase in Schedule 3 inspections in 2008. 
While an increase in OCPF inspections had been 
anticipated due to the new site selection 
methodology, a similar increase in Schedule 3 
inspections had not been planned due to the static 
number of Schedule 3 inspections.  Kane responded 
that 50% of Schedule 3 facilities have been inspected 
in approximately 30 States Parties; eight States 
Qin approximately 30 States Parties; eight States 
Parties still have sites yet to be inspected, with 
China and the U.S. having the largest share.  Kane 
explained that -- due to the re-inspection rate being 
limited to 5% of the annual number of Schedule 3 
 
inspections -- more and more Schedule 3 inspections 
will be focused on a decreasing number of States 
Parties.  He described the situation as a train wreck 
coming the next 3-4 years and suggested that it could 
be avoided either by increasing the re-inspection 
rate or by decreasing the overall number of Schedule 
3 inspections. 
 
¶33. (SBU) Delreps reiterated the U.S. proposal to 
replace the SITC sub-codes (in EC-53/DG.11) with a 
catch-all code for bulk chemicals (ref D).  Boehme 
thought the proposal was a useful simplification; 
Kane noted that it was an interesting proposal but 
confirmed that the updated Declaration Handbook would 
soon be printed, with no chance of stopping the 
process.  However, he recognized the need to update 
the Handbook on a more regular basis and suggested 
that the U.S. proposal might be considered for the 
next update.  (Del comment: Del will continue to push 
for inclusion of the U.S. proposal in the updated 
Declarations Handbook before its release.) 
 
¶34. (SBU) After meeting with Kane and Boehme, Delreps 
briefly met with Susan Atego (Senior Policy Officer, 
Policy and Review Branch) to discuss the U.S. 
Schedule 1 Facility Agreement deferred from the last 
EC session (ref E).  Atego told Delreps that no 
States Parties -- including Iran -- had informed the 
TS of concerns with or questions about the facility 
agreement, noting that the agreement had obviously 
been deferred for political reasons.  Cristofaro 
asked whether the agreement could be put on the 
agenda of the special EC meeting for consideration 
before the upcoming Conference of the States Parties 
(CSP).  Atego promised to look into the possibility. 
Atego also told Delreps that Iran had not yet 
provided any justification for changing its Schedule 
1 Facility Agreement to a "facility arrangement" (ref 
E). 
 
¶35. (U) Javits sends. 
FOSTER