VZCZCXRO7786
PP RUEHRN RUEHROV
DE RUEHRN #0040/01 1751146
ZNR UUUUU ZZH
P R 241146Z JUN 09
FM USMISSION UN ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 1104
INFO RUEHRC/USDA FAS WASHDC
RUEHC/USAID WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0329
RUEHGV/USMISSION GENEVA 0251
RUEHVI/AMEMBASSY VIENNA 0013
RUEHBS/USEU BRUSSELS 0205
RUEHRO/AMEMBASSY ROME 0465
RUEHROV/AMEMBASSY VATICAN 0005
RUEHRN/USMISSION UN ROME 1178

UNCLAS SECTION 01 OF 03 UN ROME 000040 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR L.MORRIS, NSC FOR C.PRATT, USDA FORG.DOUVELIS 
 
E.O. 12958: N/A 
TAGS: PREL EAID PHUM FAO UN
SUBJECT: FAO COUNCIL APPROVES NOVEMBER FOOD SECURITY SUMMIT, REVIEWS 
 
REFORM PROGRESS AND CFS RENEWAL 
 
¶1.  This message is sensitive but unclassified.  Not for 
internet distribution or distribution outside the USG. 
 
Summary: 
------- 
 
¶2.  (SBU) During the 136th session of FAO Council, from June 
15-19, members debated the merits of a proposal from Director 
General Diouf to host a Heads-of-State world food security 
"summit" in Rome this November.  Following long and sharp debate 
over appropriate timing and proper planning, members eventually 
agreed to the proposal, though divisions were clear between 
developing and developed states on the issue.  An open-ended 
working committee comprised of FAO member states must now 
negotiate the expected objectives of the summit, and FAO's 
Finance Committee in late July will review its funding plans (to 
be paid entirely from voluntary contributions).  Council debate 
also covered details of FAO's reform plan implementation, its 
financial situation, efforts to "revitalize" the Committee on 
World Food Security (CFS) - including efforts to create a new 
"High Level Panel of Experts" - and a host of other technical 
issues.  End summary. 
 
November Food Summit Approved 
---------------------------- 
 
¶3.  (SBU) The most difficult issue debated during the 136th 
session of FAO Council was a proposal first made in October 2008 
by DG Diouf to host a world food security summit in November, 
2009 attached to the biennial FAO Conference.  The discussion 
lasted over three days, with a clear split between G-77 (mostly 
in support) and the EU (minus France), Norway and Canada, whose 
position was that a summit in 2009 was premature.  Key points 
raised by Norway, Germany, Canada, Australia, New Zealand, 
Japan, Colombia, , and others pertained mostly to concerns over 
the proposed timing of such an event, and concerns over Diouf's 
proposed objectives.  The U.S. emphasized that any summit must 
be funded exclusively through extra-budgetary resources and 
proposed that a detailed financing plan be presented to the FAO 
Finance Committee at its July meeting.  In order to lead 
discussion over setting objectives for the summit, the U.S. 
proposed formation of an open-ended working group which would 
work closely with the Independent Chair of Council.  The Council 
eventually endorsed both proposals. 
 
¶4.  (SBU) Members of the G77, led by repeated emotional appeals 
by Brazil, were vocal in their support for a November summit. 
Malaysia and Indonesia broke ranks with their Asia group 
colleagues, however, expressing reservations about the timing, 
particularly in light of overlap with a planned APEC Summit in 
Singapore.  Further controversy ensued following the Chair 
allowing the DG's representative to read a list of 154 countries 
which supposedly "supported" the summit.  Members were incensed 
that no caveats were included regarding conditions imposed on 
that support, and generally objected to the manner in which the 
Independent Chair of the Council (Iran) addressed the issue.  As 
a result, Norway threatened to take its offer of $450,000 off 
the table for funding of FAO's reform plan.  On the final day of 
talks, the EU finally accepted the November timeframe, 
effectively ending the debate. 
 
FAO Reform; Funding the Immediate Plan of Action (IPA) 
------------------------------------- 
 
¶5.  (U) Status of reforms:  FAO management reported that its 
reform process was the most ambitious one across the UN system, 
with an IPA containing more than 260 activities that should be 
implemented as an integrated package over the coming three 
years.  These activities are grouped into 14 project areas led 
by project teams with both headquarters and decentralized office 
staff, and that work is progressing well.  Almost 60 percent of 
the IPA activities are already being implemented, two percent on 
hold, and four  percent already completed.  FAO Management 
reported that a "Root and Branch" review by Ernst and Young 
identified, after further revision, cost savings a total net 
savings toward the costs of reform of USD 7.8 million during the 
coming seven years and biennial net savings of USD 13 million 
thereafter.  Management stressed the challenge of launching 
certain reforms in light of a shortfall in voluntary funding for 
 
UN ROME 00000040  002 OF 003 
 
 
a handful of sequenced reforms such as an enterprise risk 
management study, creation of partnerships, and some human 
resource management plans. 
 
¶6.  (U) IPA Trust Fund:  A discussion ensued on the currently 
low level of funding for the 2009 portion needed for FAO's 
reform plans.  Management noted that of the roughly 17 million 
necessary for 2009 reform projects, only four million (of 
approximately 7 million pledged) had actually been received - 
putting sequenced reform plans in jeopardy.  They called on 
members to meet the requirements and fulfil their pledges.  The 
U.S. point that it continued to look for ways to provide a 
contribution for FAO reform was disappointing to FAO management 
and to EU members who have so far provided nearly 90 percent of 
monies received.  During the same debate, Pakistan, Brazil and 
other G-77 members divisively insisted that no regular program 
funds should be diverted toward FAO reform in 2009, even in the 
unlikely event of further "windfall" savings from unexpected 
sources.  Language permitting the diversion of such funds had 
already been agreed to earlier in Finance Committee, thus 
angering the Egyptian Chair of that committee, and raising 
doubts over the G-77's commitment to reform. 
 
FAO Finances:  Punishing Those in Arrears 
------------------------------ 
 
¶7.  (SBU) During a review of FAO arrears, the EU (driven, 
reportedly by France) proposed four-steps designed to deal with 
states in arrears, including (a) restriction for eligibility in 
Council elections and loss of seat in Finance and Program 
Committees, and Council Committees; (b) amendments of sanctions 
outlined in the Basic Texts so that only one full year of 
arrears (instead of two) would result in sanctions; (c) external 
borrowing costs due to late payments to be borne by countries 
with outstanding contributions; (d) rigorous application of 
existing regulations on loss of voting rights."  The EU further 
recommended developing a set of guidelines setting out 
conditions for accepting voluntary contributions from Members in 
arrears (Comment: The effort seems directly pointed at the U.S., 
who is only now clearing out arrears from 2008 and prior.  We 
expect this effort to dissipate once our 2008 Euro arrears are 
cleared out, which weunderstand in is motion.  End comment). 
 
Committee on World Food Security 
---------------------------- 
 
¶8.  (U) CFS/Legal Issues.  Agenda Item 18 concerned the reports 
of the Committee on Constitutional and Legal Matters (CCLM) and 
was divided into: 1) Changes in the Basic text required to 
implement the IPA; and 2) a proposed amendment to the 
Constitution regarding the Committee on Food Security (CFS). 
The CCLM received thanks for its work on changes to FAO's Basic 
Texts, which were accepted in full without controversy.  One 
controversial issue - selection of a Director for a new Office 
of Evaluation - was removed from the agenda and will be debated 
in the Committee of Conference/Independent External Evaluation 
(COC-IEE) group and the Program Committee.  French proposals to 
amend Articles III and V of the Constitution to raise the level 
of the CFS to a Committee of Conference, and to erase a 
requirement for CFS to report to Council on Program and Budget 
matters were more problematic.  Although all members agreed with 
the goal of strengthening the CFS, many were sceptical on the 
French proposals, calling for a response from UN New York's 
Legal Office on reporting lines to UNGA and ECOSOC.  They were 
also leery of removing the requirement for CFS to work through 
Council on budget issues, in compliance with recent changes in 
FAO's reform plan.  With consensus absent, the matter was 
diverted to a "Friends of the Chair" group where Jordan took the 
lead in negotiating language to:  1) send the matter back to the 
CFS contact group for further discussion; 2) direct the contact 
group to work through the CCLM on any refinements to the 
language; 3) request FAO Legal to seek clarification from UN New 
York; and 4) direct the DG to forward France's proposal to 
member states at least 120 days prior to November 2009 
Conference, without prejudice to the outcome of talks.  This 
language was eventually approved by Council. 
 
CFS - High Level Panel of Experts 
--------------------------- 
 
UN ROME 00000040  003 OF 003 
 
 
 
¶9.  (SBU) Members also debated a proposal from DG Diouf to form 
a new High Level Panel of Experts as an adjunct body to assist a 
reformed Committee on World Food Security (CFS).  After numerous 
members pointed out problems with the manner in which FAO had 
pursued the issue, responsibility for discussion on planning for 
any new panel was assigned to the CFS Bureau and a Working Group 
led by the U.S. Mission.  The U.S. and others argued that 
creation of an expert panel for the CFS should await clear 
member ownership of the process, and clarity on funding, 
selection modalities, and terms of references.  The CFS Bureau 
is expected to finalize a paper with its recommendations on 
reform by late July, including on an expert panel, to prepare 
for full debate on reform during the October session of CFS in 
Rome.  France, Brazil, and many other states are pressing hard 
for the panel, despite lack of clarity on key details. 
 
Other Items 
-------------- 
 
¶10.  (U) WFP reports.  Due to dual parentage with FAO, there was 
a session to review reports on WFP's 2007 and 2008 activities, 
during which the U.S. commended WFP's commitment to promote food 
security, while Cuba, Brazil, and Zimbabwe stressed the 
importance of fulfilling WFP's dual mandate -- implementing 
development activities alongside emergency operations. 
 
¶11.  (U) Regarding the calendar of future governing body and 
technical committee meetings, discussion took place on the 
possibility of maintaining the current schedule for meetings of 
the Committee on Fisheries (COFI).  Council concluded that once 
ongoing deliberations on alternative meeting dates is concluded 
between the COFI Chairman, FAO management, and member states, 
the issue should be resolved in time for the next session of 
Council in September 2009, for final approval by Conference in 
November.  Interventions by the U.S. mission highlighted this 
issue for further debate among interested parties. 
 
Comment 
------- 
 
¶12.  (SBU) Approval of the November Summit was clearly the 
highlight of the week's debate, and was gloated over by Diouf 
during a joint Friday afternoon press conference (with WFP ED 
Sheeran and an IFAD Assistant President) announcing new hunger 
statistics topping one billion.  While noting that a committee 
of member states would negotiate the expected outcomes of the 
summit, that did not stop him from listing the same proposed 
outcomes that we had found rather problematic in draft Council 
papers.  We will need to continue monitoring the progress in FAO 
reforms, to minimize the distraction factor, and any possible 
resource diversions that could damage the organization's efforts 
to modernize.  This continues to be a challenge, though it will 
be greatly assisted by a USG contribution to the IPA Trust Fund 
for reform, giving us additional leverage to press effective 
approaches to Human Resource management, financial oversight, 
programmatic controls and evaluation.  Last, Brazil made clear 
that it wants to use the November summit as a means to push the 
issue of Voluntary Guidelines on the Progressive Realization of 
the "Right to Food" (a concept also pushed by many European 
countries, but an issue that the U.S. has long opposed based on 
legal grounds).  We must be prepared to address this issue in 
November, the CFS, and other multilateral fora. 
BRUDVIGLA