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Cablegate: Iom Sub-Committee On Budget and Finance

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: STATE 199857

1. (U) Summary: Member states approved most agenda item
presented by the International Organization for Migration
(IOM) during the 94th Session of the Sub-committee on Budget
and Finance (SCBF) November 1. However, three issues --
IOM's overhead rate policy, its Program and Budget for 2006,
and a Delocalization proposal -- require further discussion.
IOM's administrative budget for 2006 will be 37.119 million
Swiss francs, held steady from 2005. Its proposed
operational budget stands at USD 426.9 million, a substantial
reduction from 2005 owing largely to the conclusion of forced
labor and other compensation programs funded solely by
Germany and Switzerland. End summary.

Business Items
- - - - - - - -

2. (U) Election of officers: SCBF members unanimously
endorsed the nominations for a second term of Deputy
Permanent Representative Dezso Horvath (Hungary) as Chair and
First Secretary Lenah Nyambu (Kenya) as Rapporteur, as well
as the nomination of First Secretary Eliana Beraun Escudero
(Peru) as Vice-Chair.

3. (U) Outstanding contributions: Despite major efforts by
the IOM Administration, unpaid balances of outstanding
contributions are still quite large (more than CHF 5.7
million total; for comparison, the annual Administrative
Budget is CHF 37 million). Canada and Germany proposed
during informal consultations that IOM threaten to close down
or transfer Missions with Regional Functions (MRFs) that are
in countries in arrears. The African Group urged countries
in arrears to negotiate repayment plans, but argued that
"Africa is not getting much benefit from IOM" and has acute
migration needs; Member States should not sanction countries
already suffering from serious financial problems. Peru,
Uruguay, Colombia, Iran, and Cape Verde committed to pay off
their arrears through repayment plans by the end of the year.
Germany expressed concern that this issue is still a problem
and also questioned the continuation of MRFs in countries
with arrears (aka Article 4 countries.) USDEL reiterated
that, as a matter of principle, the USG will not support
non-emergency IOM activities if a country is subject to
Article 4 provisions. Of note, Morocco explained that the
issue of outstanding contributions is jeopardizing the work
of IOM and that Article 4 countries should be suspended from
the right to vote and embargoed from major program
activities. Morocco also said that, prior to encouraging
states to apply for IOM membership, the Administration needed
to do a better job of providing information to countries on
rights and obligations of membership. The Chair of SCBF
noted that in order to continue to highlight the arrears
issue, it has been added to the Council agenda this year.

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4. (U) Summary Update on the Program and Budget for 2005:
Speaking for the African Group, Algeria praised IOM's recent
work on attempting to obtain balance in the regional
distribution of activities in the Operational Part of the
Budget. SCBF took note of the updated document, which shows
the budget has increased from USD 899.2 million to USD 1.1

5. (U) Staff Association Committee (SAC) Statement: Marco
Boasso, chairman of the employee association, presented
Member States with a number of staff concerns, including
zero-nominal growth (ZNG), delocalization (see paragraph 12),
and the IOM Administration's continued lack of consultations
and dialogue with the SAC. Boasso said that the significant
growth of IOM ) in terms of membership, operations, and
demands placed on the Administration by the Member States )
has not been accompanied by the administrative resources
required to meet the new demands because ZNG does not allow
IOM to cope with the real growth and expansion of the
organization. The SAC is also concerned with IOM's planned
second phase of delocalization, feeling that the proposal
lacks transparency and predictability, and that the lessons
of the Manila delocalization have not been analyzed yet.
Boasso reiterated the need for the IOM Administration to
reactivate its efforts to consult with the SAC when staff
interests are at stake. He reported that although the
Director General and Deputy Director General expressed
willingness last spring to regularize meetings with the SAC,
only one such meeting has taken place. Boasso stressed
communication with staff as a key to fostering loyalty,
assuring job satisfaction and increasing productivity within
the organization. Finally, the SAC strongly supported the
affiliation to the UN Joint Staff Pension Fund (UNJSPF),
given long-standing dissatisfaction with the poor returns of
the current Provident Fund (see paragraph 11.)

6. (U) Draft Resolution on Project-Related Overhead: SCBF
Member States generally endorsed the proposed draft
resolution to change IOM's overhead structure from the
current 12 percent of staff and office costs to a more
standard 5 percent of total costs. Only Germany, which is
awaiting final instructions from capital, expressed a
reservation. The draft resolution includes a "grandfather
clause" for resettlement and return programs, including
counter-trafficking activities where the international
transportation costs make up a significant portion of the
total cost of the activity. Member State endorsement of the
resolution is the result of a series of successful informal
consultations led by the IOM Administration. SCBF will
recommend the resolution to the Council for approval in
December, pending Germany's instructions.

2006 Program and Budget
- - - - - - - - - - - -

7. (U) ZNG: Despite IOM's initial proposal to submit a
budget which would have increased the Administrative Part of
the Budget by CHF 992,000, major donors used the informal
consultations process to convince IOM that this is not the
year to submit a zero-real growth (ZRG) budget, which risked
repeating the contentious and fruitless exchanges of past
years. However, even though the IOM Administration agreed to
a ZNG budget this year, there is an increasing push by IOM
and other Member States, including Australia, France and
Sweden, to re-visit this issue next year. IOM insists that
it cannot continue to absorb costs without serious negative
consequences for the organization including internal
oversight and staff security. On the margins, the USDEL and
other Member States asked for details and specifics on this
negative impact. IOM has proposed to begin informal
consultations with member states early in 2006 and will most
likely come out with a paper arguing for a move toward a ZRG
approach in 2007. Of note, under ZRG, most of the Member
States would have nonetheless had lower assessments in 2006
owing to expanded membership. However, the U.S. as the only
country assessed at a maximum rate, would have seen an
increase equal to approximately USD 100,000.

8. (U) Organizational Structure: Member States supported
both the establishment of the Elections Support Unit and the
consolidation of the Migration Management Services pillar
under headquarters operations. The Administration had
emphasized that these changes simply formalized structural
changes for managing existing work by IOM.

9. (U) Stranded Migrant Facility: The Director General
intends to establish a funding and operating mechanism which
will provide return assistance to migrants who are stranded.
Funding would be provided regardless of how such migrants
first moved, so long as the humanitarian needs are verified,
voluntariness of the return is confirmed, and the migrant
cannot be assisted under another mechanism, including other
IOM programs. Per instructions, the USDel stated that
questions have not been sufficiently answered on the
modalities of the Facility and the criteria for accessing it.
Despite initial concerns raised by Canada and the Netherlands
during informal consultations, only the U.S. raised a
dissenting voice during SCBF proceedings. The USDEL
subsequently met with representatives of the Administration
and asked for additional information on this Facility and
answers to our specific questions.

Other Items on the Agenda
- - - - - - - - - - - - -

10. (U) 1035 Facility: Both GRULAC and the African Group
expressed support for this Facility, noting that a more fair
geographic balance is apparent this year. Colombia
emphasized the importance of the Facility's flexibility and
ease of access for developing Member States and Member States
in transition. Benin expressed its intent to have a
ministerial meeting in Cotonou on remittances and requested
the use of the 1035 account to assist in the participation of
members from LDCs; both Nigeria and Bangladesh supported this
idea. IOM said that it would work with countries who are
interested in this project to come up with a proposal to
access the 1035 account.

11. (U) IOM Social Security: As noted in previous
discussions, Member States have supported the idea of
providing more reliable and secure social security coverage
to IOM staff members. Given IOM's thorough research (with
the UN) and transparency (discussions with the SAC and their
endorsement of the plan) in the process, SCBF approved the
recommendations made by the IOM Administration.

12. (U) Delocalization: IOM Management Coordinator Dirk
DeWinter presented the Administration proposal on
delocalization. Although the original proposal focused on
recommending a second global Administrative Support Center in
the Western Hemisphere to be located in Panama's City of
Knowledge, DeWinter explained that some Member States had
argued that the proposed Western Hemisphere Center is not on
equal footing with Manila, which provides global
administrative support services. They had argued that, as the
new Center is meant only for the Western Hemisphere and is
not truly a global Facility, funding support should come from
Western Hemisphere countries. DeWinter noted that although
the Western Hemisphere Center would not immediately be a
global Administrative Center like Manila, it could eventually
take on worldwide support functions if the IOM Administration
and Member States identify certain activities that can be
consolidated there. Although many countries supported the
proposal for a Western Hemisphere Administrative Center (the
African Group and GRULAC were among them), the USG and others
said that the time was not right to make final decisions on a
new Facility. Although IOM has identified Panama as the best
location, Uruguay and the Dominican Republic emphasized
during the meeting that they would also like to be considered
as hosts to such a center. In addition, IOM's paper now
refers to a Western Hemisphere Regional Center, which is
different from their original proposal of a global
Administrative Center. Member States would like more
information on this Center's value-added compared to existing
offices, such as IOM MRFs. The SCBF agreed that there should
be further discussion on this issue and that a more detailed
plan should be submitted by IOM. The Chair suggested that,
pending additional consultations, Member states may be
prepared to make a final decision on this issue during the
Spring 2006 SCBF.

13. (U) Report on Human Resources: Australia asked if the
new human resources management software system (PRISM) would
be negatively impacted by ZNG; IOM said ZNG had a negative
impact on improving this system and the Director General has
therefore allocated some of the surplus overhead (USD
230,000) for PRISM this year. Algeria and Morocco noted the
persistent under-representation of LDCs, particularly in
decision-making positions, on IOM's staff rosters. The
Administration said that it has an agreement with the SAC
that when a vacancy occurs, IOM will try to be fill it
internally. However, it is attempting to develop creative
solutions to this persistent problem and remains open to
input on how better to publicize external vacancies. When
asked by Canada about IOM's plans to address gender
imbalances in staffing, IOM responded that it has made some
efforts toward obtaining gender parity but still has a way to
go. IOM is making &every effort,8 particularly in the
field, when making decisions on appointments and postings.
For example, they include a person from the gender team when
undertaking such decisions.

14. (U) Any other business: The Deputy Director General
noted that this year's informal consultations process was
very successful in paving the way for consensus on a number
of issues during SCBF, and announced that several countries
have requested IOM membership for the Council Session in
December, including Cameroon and Ghana. The Chair noted that
the second term for the external auditors of Norway comes to
an end in 2006. The Chair has asked the pro bono auditors
about their willingness to continue the task for a third and
final year; this is supported by the IOM Administration, and
the auditors have agreed. The Chair will prepare a proposal
for the Council to confirm. The external auditors have
performed in a very thorough and transparent manner during
their first two terms. USDEL recommends the USG support the
Chair's proposal to retain them for a final term.

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