Cablegate: Usunesco: 171st Executive Board, Results of F&A

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




E.O. 12958: N/A

Ref: Secstate 76821

1. Budget

The Director-General proposed to the Executive Board a
budget of $635 million, a 4% increase in UNESCO's budget.
After contentious negotiations, the Executive Board adopted
a decision that requests the Director-General to present to
the next Executive Board a baseline budget proposal of $610
million (ZNG) and a supplementary proposal of up to $25
million financed through "innovative mechanisms (excluding
carry-over)." This decision notes support received from
some Member States for the budget of $635 million proposed
by the Director-General and requests the Director-General to
explore further possibilities to reinforce principal
priority programs within the baseline of $610 million.

This was the result of debates in which 6 Member States (US,
UK, Canada, Germany, Brazil, Australia) gave strong support
to ZNG. The 11 African states on the Executive Board argued
in support of the Director-General's proposed budget of $635
million. Japan was notably in support of the Director-
General's proposal and was willing to seek alternative means
to provide the D-G flexibility in the budget. Other WEOG
states (including France and Italy) voiced support for a
budget somewhere between $610 and $635 million. GRULAC, led
by Brazil, took a position in support of ZNG, but support
for ZNG among the individual states was weak. This was best
demonstrated when Ecuador made a statement in support of the
$635 million proposed budget.

The adopted decision was a compromise intended to keep the
budget level at $610 million but reflect the concerns of the
developing states by allowing the Director-General to find
other ways to increase financial resources. The final
budget decision will be made at the next Executive Board.

In introducing the resolution, the Director General made a
statement saying that he understood the resolution to call
for a regular budget proposal of $610 million (with "regular
budget" as defined in Art 9(2) of the UNESCO constitution)
and a supplementary proposal of $25 million, which would be
funded through extrabudgetary contributions (as defined in
Art 9(3) of the UNESCO constitution). Article 9(3) of the
UNESCO constitution states, "The Director-General may accept
voluntary contributions, gifts, bequests and subventions
directly from governments, public and private institutions,
associations and private persons, subject to the conditions
specified in the Financial Regulations."

Per instructions in reftel, USDel did not join consensus on
this decision. USDel thanked the DG for his clarification,
and stated our understanding that the regular budget ceiling
is to be $610 million, that the US does not join consensus
on this decision, and that while we were not calling for a
vote at this time, the US would not join consensus on a
budget ceiling (for 2006-2007) of more than $610 million.

Subsequently, Tanzania spoke up on behalf of the African
states and thanked the DG for taking African concerns into
account. Tanzania did not explicitly state support for ZNG,
but did not contradict the clarifying statements of the DG
and US. The Tanzanian delegate had told USDel privately
that Tanzania would not oppose a ZNG ceiling at this

2. Education: Anti-Doping Convention

USDel argued vigorously for the Executive Board to recommend
that the convention against doping in sport should be
financed out of a voluntary fund rather than the general
budget. Despite a lack of consensus during the negotiation
of this matter in the commission meetings, the decision
forwarded to the Plenary reflected a solid endorsement of
regular budget funding. USDel re-opened the debate in the
plenary, again arguing for the convention to be financed
through a voluntary fund. The Latin American countries
(especially Brazil and Ecuador) supported the USG position,
but the majority of Executive Board members did not. Brazil
suggested compromise language that recommends the
Secretariat for the convention be financed out of the

regular budget but with a "strict and limited" cap on the
amount. The Executive Board adopted the decision with this
amendment. This sudden change of position by Brazil upset
other GRULAG non-Executive Board Members (Costa Rica and
Colombia) who took the floor as Observers to denounce the
decision that had not taken into account the positions
expressed by Member States at the negotiations. The
Executive Board adopted the decision with this amendment.

(Note: When USDel raised the issue of funding of
conventions during the drafting committee, the response came
from the Legal Advisor's office that UNESCO has always
funded conventions from its core budget. The only
conventions at UNESCO not funded by the core budget are
those that are deposited at UNESCO. The Indian ambassador
helpfully added to this discussion that this is not how
conventions are paid for in New York. USDel took this as an
opportunity to advocate for change in UNESCO's methods.)

3. Education: Decade on Education for Sustainable

USDel was successful in revising the decision adopted by the
Executive Board to "note" rather than "adopt" the draft
implementation scheme, and in getting the matter deferred to
the next Executive Board in September The resolution further
requests the Director-General to develop a concrete plan for
UNESCO's role in the implementation of the Decade. The
resolution language that came out of the drafting committee
was silent on whether the draft would be re-submitted to the
Executive Board for consideration and possible adoption, but
some last minute wrangling resulted in the final decision
inviting the DG to revise and re-submit the draft
implementation scheme.

Japan and the UNESCO Secretariat lobbied extremely hard for
this addition, but many delegations (including Germany,
Australia, and several Nordic countries) agree with the U.S.
preference for the draft scheme to be simply dropped. None,
however, seem inclined to actually do anything to kill the
plan. And since it was requested by the UNGA, is important
to Japan and the Director-General, it is not likely to go
away. US Mission will continue to follow this item closely,
to work to have the scheme dropped if possible, or else work
to ensure it is revised to suit USG concerns.

4. Education: Follow-up on the EFA Strategic Review and
UNESCO's Strategy for the 2005-2015 Period

This item got called up earlier than scheduled and
delegations wasted no time indicating their impatience with
the drafted decision. USDel joined the relatively small
working group that formed that included the UK, Iceland,
Japan, US, Pakistan, India, Canada and a couple of others
that wandered in and out. Incoming ADG/Education Peter
Smith, Dakar Follow-up head Abhi Singh and others from the
Secretariat joined us. Perhaps spurred by the impatience of

finally doing what we all wanted to do a year ago when India
blocked consensus, the group and Peter Smith had a robust
exchange over the text, with delegations asking pointed
questions and Smith providing long and detailed answers.

The point of this process, proposed by the British
Ambassador, was to ensure a "fresh start" for Peter Smith in
his work with the Education Sector and to make sure that
everyone was clear about what exactly the text of the
decision asks of the Secretariat and what is expected by the
delegations. This time, India joined in the deliberations
with an eye for change. USDel was successful in removing
mention of MDGs in text and supported Japan in removing text
on donor harmonization.

As a result, the decision adopted by the Executive Board
provides the incoming American ADG/Education with greater
latitude and flexibility to make decisions, implement
changes and deploy staff. It calls for accountability from
the field offices to the Education Sector and even gives him
the power to restructure the whole sector if he chooses.

Delegations openly discussed their delight at Smith's
openness, ideas and enthusiasm for tackling this job.

5. Education: Literacy and Cuba:

USDel was successful in fending off a stealth attempt by
Cuba to co-opt the UN Literacy Decade and impose its brand
on this important flagship initiative. USDel flagged a last-
minute addition to the Board agenda that called for member
states to adopt recommendations made at a non-UNESCO
literacy conference held in Havana in January.

The Director-General provided a strong Information document
that listed multiple reasons why this agenda item was
inappropriate for the Board to consider. His action allowed
us to remain silent on this point as the Board agreed to
merely take note and not adopt the recommendations.

6. Education: Quality Provision in Cross-Border Higher

Following a dramatic and protracted discussion over the
legal status of these guidelines the Executive Board invited
"the Director General to inscribe on the provisional agenda
of the 33rd session of the General Conference an agenda item
proposing a final discussion and then the endorsement of the
non-binding draft guidelines" on quality provision in cross-
border higher education. A few Member States did note their
desire to have a binding instrument in this area. This item
was reopened in the plenary by Brazil to revisit the legal
status that they wanted to have strengthened. A separate
cable will be prepared on this item and legal instruments at

7. UNESCO Institutes:

The Secretariat presented revised guidelines regarding the
establishment and operation of Category I and category II
UNESCO Institutes and centers. Japan expressed support for
the use of category II centers as a means of revitalizing
the work of UNESCO throughout the world, cautioning that
centers, once established, must be sustainable. China
described the report as "excellent," but joined Mali in
expressing uncertainty as to how category I centers would be
evaluated, and whether there was any oversight mechanism.
U.S. delegation advocated a strategic approach to category
II centers, to include a study similar to that submitted on
category I centers, an evaluation of long-term impact, and
results-oriented guidelines. The Director General's office
responded that Category I centers are subject to evaluation
by the IOS; in addition, individual institutes have
commissioned evaluations of their activities. The ODG
stressed that the Secretariat would continue to make an
effort to highlight the contributions of category II centers
in program documents. The draft decision was amended by
Japan to include language underlining "the importance for
UNESCO to ensure a substantial, effective and sustainable
contribution of category II institutes" and requesting,
"that flexibility be allowed in terms of the guidelines and
the model agreement governing the establishment of such
centers." The Japanese and Indian centers proposed by the
Secretariat were endorsed and feasibility studies were

requested for the other proposed centers.

8. Starck Project

UNESCO's Headquarters Committee (an independent
intergovernmental body elected at the General Conference)
has endorsed a project to redecorate the seventh floor
restaurant. The estimated cost will be _850,000. Under the
powers vested in it by the General Conference, the
Headquarters Committee created a Special Account to collect
voluntary contributions for this project. The Headquarters
Committee has to date collected _1,100 for this account.
The Headquarters Committee therefore proposed advancing
_100,000 Euros from the Headquarters Utilization Fund to
launch the project. Future voluntary contributions were
expected to reimburse the Headquarters Utilization Fund and
cover the remaining costs (_750,000) of the renovation

At the Executive Board, Member States expressed displeasure
that the Headquarters Committee could take such action
without first consulting with the other Member States.
Member States (including USG) also expressed the position
that it was too risky to "borrow" this money from other
UNESCO accounts without any guarantee that the remaining
costs could be covered by voluntary contributions. The
_100,000 spent on "launching" the project could be lost if
no other contributions were forthcoming.

UNESCO Legal Advisor informed the Board that the
Headquarters Committee was within its right to establish the
Special Account for this project without the approval of the
Board. However, the Board decided not to approve
transferring the funds from the Headquarters Utilization
Fund at this time. Instead, the Board adopted a decision in
which the operative language invites the Director-General,
in cooperation with the Headquarters Committee, to report to
the next Executive Board on the progress made in planning
this project and collecting funds. At that time the Board
will have to decide how to proceed on this project.

9. Staff Matters

The Executive Board reviewed the use of consultants by
UNESCO, the Director-General's response to the Annual Report
(2004) by the International Civil Service Commission, the
adoption of new management tools and staff policy, and the
state of the UNESCO Medical Benefits Fund. Debates on two
items (hiring of consultants and review of the Medical
Benefits Fund) were substantial. USDel argued that the
hiring of consultants should be based on the principle of
value for money rather than geographic distribution.
However, other Member States and the Secretariat argued that
previous Executive Boards have already adopted decisions
urging UNESCO to achieve wider geographic distribution in
the hiring of consultants (166 ex/Decision 3.1.2(II) and 169
EX/Decision 3.2(II)). These decisions are recalled in the
decision adopted by this Executive Board. USDel was not
successful in removing this language from the draft

The Executive Board was informed of the findings of an audit
by the External Auditor of UNESCO's Medical Benefits Fund,
based on which the Secretariat proposed taking certain
measures to ensure the Fund's long-term financial stability
and equilibrium. The Executive Board was asked to adopt a
decision approving these measures. During discussion on
this matter at the Executive Board, Member States noted
concerns with the proposed measures, particularly the
proposal to "align" the UNESCO contribution percentage with
that of most other UN agencies. The proposed 2/3
contribution for UNESCO and 1/3 contribution for
participants would be high compared to other common system
organizations. The Executive Board therefore adopted a
decision that takes note of the proposed measures and
invites the Director-General to submit to the next Executive
Board for further consideration a plan of action, including
financial implications, and a timetable for the
implementation of recommendations of the External Auditor.

10. Decentralization and Communication with UNESCO

Discussion at the Executive Board on UNESCO's
decentralization process (Agenda Item 5) was integrated with
discussions on an item proposed by India on the relationship
between UNESCO and National Commissions. Discussion of
decentralization focused on the role of field offices,
particularly in relation to National Commissions. India's
proposal would strengthen the role of National Commission
vis--vis UNESCO and Member States. USDel intervened, along
with most other Member States who took the floor, to state
that the role of the National Commission differed from
country to country, and that UNESCO could not create one
plan that would dictate the role of each National
Commission. Member States noted that this was not a "one
size fits all" scenario, and that the role of each National
Commission had to be established by the Member State. No
Member States spoke up against these sentiments, though the
Indian Delegation worked diligently to keep their language
in the decision.

After these discussions, the Executive Board adopted two
decisions on these items. The first requests the Director-
General to focus on improving the impact and quality of
services of field offices, within existing resources, and
refine the roles of field offices. This decision also
invites the Director-General to pursue efforts to strengthen
the relations of UNESCO Headquarters and field offices with
National Commissions, taking into account their national
characteristics. The second decision recognizes that
National Commissions are a key actor in forging Member
States' views on UNESCO's strategies and programs and
reaffirms the need for UNESCO field offices and the National
Commission to work in close cooperation through mutual and
regular consultations. It also invites the Director-General
to present to the General Conference proposed guidelines for
such cooperation.


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