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Cablegate: Un Reform: Us Blocks Wipo Budget Over Accountability

VZCZCXYZ0005
RR RUEHWEB

DE RUEHGV #2375/01 2842031
ZNR UUUUU ZZH
R 112031Z OCT 07
FM USMISSION GENEVA
TO RUEHC/SECSTATE WASHDC 5378
RUCNDT/USMISSION USUN NEW YORK
RUCPDOC/USDOC WASHINGTON DC
RUEHBS/USEU BRUSSELS
RUEHUJA/AMEMBASSY ABUJA 0221
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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
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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

SIPDIS
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

SIPDIS
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

SIPDIS
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

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