Cablegate: Unodc Major Donors Meeting Tackles Ungass Review, Piracy

VZCZCXYZ0017
RR RUEHWEB

DE RUEHUNV #0666/01 3571331
ZNR UUUUU ZZH
R 221331Z DEC 08
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC 8864
INFO RUCNDT/USMISSION USUN NEW YORK 1427

UNCLAS UNVIE VIENNA 000666

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: SNAR KCRM UN PGOV AORC AF SW SZ GM FR CA IN IT
NO, PK, TU, UK, EWWT, MARSEC

SUBJECT: UNODC MAJOR DONORS MEETING TACKLES UNGASS REVIEW, PIRACY
AND FUTURE FUNDING CHALLENGES

REF: A. UNVIE 00579 B.UNVIE 000659
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SUMMARY:
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1. (SBU)INL A/S David T. Johnson led the USDEL to the UN Office on
Drugs and Crime (UNODC) Major Donors meeting, December 5.
Discussion with the other 20 donor countries included (1) a proposal
for UNODC action to combat piracy off the coast of Somalia, (2) the
funding situation of UNODC, and (3) a review of progress achieved
since the 1998 UN General Assembly Special Session on Narcotic Drugs
(UNGASS). Also discussed were the status of the Independent
Evaluation Unit (IEU) and the UNODC's partnership with INTERPOL to
establish an anti-corruption training academy. A/S Johnson met with
UNODC Executive Director Antonio Maria Costa, who committed to
ensuring the U.S. is recognized for contributions to UNODC projects
in Central Asia. At a dinner hosted by UNVIE Ambassador Greg
Schulte, A/S Johnson discussed the counternarcotics situation in
Afghanistan and underscored U.S. opposition to use of the phrase
"harm reduction" in UNGASS review documents. END SUMMARY.

--------------------------------------
Major Donors: The "Watch Dog" of UNODC
--------------------------------------
2. (SBU)The Major Donor countries reinstituted the practice of
holding a "closed" session, without UNODC staff, to coordinate
messages and to discuss the future role of the Major Donors group.
A/S Johnson used the opportunity to emphasize the importance of
continuing Major Donor coordination. He emphasized the need to
schedule meetings close to other UN events, in order to ensure
participation from capitals. Other donors, notably Sweden and
Norway, questioned the ability of UNODC to operate without
sufficient and predictable (read, increased) General Purpose Funds
(GPF, i.e., funds without earmarks), which finance administrative
and backstopping support for implementation of UNODC technical
assistance projects. Germany and USDEL expressed skepticism,
highlighting the practical difficulties in raising contributions to
the GPF. A/S Johnson noted that government organizations, including
his own, are often funded by project earmarks and must use project
support costs to finance their operations. UNODC charges 13 percent
in overhead to each project contribution (with the exception of some
donors, notably the European Commission, which has secured an
UN-wide rate of seven percent.) These funds must be better utilized
in order to supplement the GPF. The UK closed the session by
emphasizing the potential leverage that Major Donors could have in
guiding UNODC, calling the group a "watch dog" of sorts. The UK
will refine its non-paper on the future of Major Donors and also
draft a work program for the 2009 calendar year to be shared with
other donors.

-------------------------
Funding, Funding, Funding
-------------------------
3. (SBU)During the Major Donors session, UNODC staff at all levels,
including Executive Director Costa, painted a dire picture of
UNODC's funding situation. There is a lack of GPF, while Special
Purpose Funds (SPF, i.e., earmarked contributions) continued on an
upward trajectory. In Costa's view, UNODC would soon either need to
start rejecting SPF or need to secure an increase in the UN Regular
Budget, to provide adequate oversight of technical assistance
activities. UNODC specifically pointed to the 1.4 million dollar
shortfall of the GPF for its anti-crime programs and noted that
unless the imbalance was corrected the organization would be forced
to cover the shortfall with the GPF intended for drug control
programs. UNODC also sought to provide transparency to the use of
its GPF, by outlining the areas for which these funds were used,
including internal evaluation, research and policy analysis,
salaries of the Field Office Representatives and its online
financial database (ProFI). UNODC submitted a request for an
additional 16 posts and 2.2 million dollars from the UN Regular
Budget for the biennium 2010-2011, in order to cover its staffing
and financial needs.

4. (SBU)Donors emphasized that other avenues could be found to
relieve the GPF problems. Sweden and France pointed to the
"thematic programs" under development by UNODC, as a way to allow
donors to "soft earmark" funding. UNODC Director for the Division
of Operations, Francis Maertens, identified future regional and
thematic programs to overcome "projectitis" and focus strategic
interventions in the areas of corruption, money laundering, human
trafficking, migrant smuggling, trafficking of firearms, criminal
justice reform, as well as health and human development. Finland,
supported by the United States, sounded an alarm over the title of
the thematic program on "health and human development," in which the
themes of drug demand reduction and HIV/AIDS would be examined. The
title obscured the role of UNODC and its mandate to tackle these
issues. A/S Johnson further reiterated the U.S. view that earmarked
contributions should not be crowded out in favor of non-earmarked or
loosely earmarked funds. Rather, the current financial situation
should drive UNODC, its managers and its donors to take a more

entrepreneurial approach, with overhead costs tied to specific
projects. Germany reiterated U.S. concerns, noting that its
government would not be increasing its contribution to the GPF in
the immediate term. Italy confirmed that it had decreased its
annual GPF contribution by more than 1 million dollars. Only the
Netherlands announced an impending new contribution to the GPF.
Questions also remained regarding the interplay between regional and
thematic programs. UNODC intends to follow up with donors.

-----------------------------------
UNGASS Review: Compromise Necessary
-----------------------------------
5. (SBU)During a UK-hosted lunch, Sandeep Chawla, Director for the
Division of Policy Analysis, relayed the concerns held by the
chairman of the UN Commission on Narcotic Drugs (CND) - that states
had impeded progress on the negotiation of the documents (the Annex
and Political Declaration) to be adopted at the high-level CND in
March 2009. Specifically, he pointed to delegates' insistence on
re-opening conclusions agreed to by the UNGASS experts groups
(Reftel A) and the insistence by some delegations (notably the EU)
on inserting the phrase "harm reduction" into the texts. Costa
further warned of an "empty" document if progress could not be made.

6. (SBU)Switzerland, Germany and France followed UNODC's statements
by giving an optimistic assessment and stressing that the UNGASS
review presented an opportunity to highlight "harm reduction" and
human rights in the outcome documents. A/S Johnson made clear the
U.S. strongly opposed mentioning "harm reduction" in the text of the
UNGASS documents. He further stressed that EU introduction of "harm
reduction" policies - concepts not agreed to at the expert groups -
after the November 4 deadline set by the CND Chairperson for the
submission of new ideas into the draft Annex document, bordered on
bad faith. All other Member States abided by this deadline.
Furthermore, A/S Johnson warned EU Member States not to assume that
the new U.S. administration would reverse course on "harm reduction"
in the run up to the March 2009 CND. He said the EU should end
their attempts to slow roll the negotiations. When asked, UNODC
indicated that the Namibian Ambassador would collate comments on the
Political Declaration by December 15 and circulate a draft by early
January. EU Member States present expressed displeasure and
insisted that the draft Political Declaration must be issued by late
December.

7. (SBU)On the margins of the Major Donors meeting, the UK
approached USDEL to note increasing tension on the issue of "harm
reduction" and to offer to meet with UNVIE to discuss further.
Switzerland also approached USDEL, to question the purported U.S.
lack of support for demand reduction. A/S Johnson reiterated that
the U.S. very much supports demand reduction. He explained that we
object to the use of the term "harm reduction," because it
encompasses objectionable policies such as heroin maintenance and
drug injection rooms.

-------------------------------
UNODC Proposal to Combat Piracy
-------------------------------
8. (SBU)The UNODC formally released to Major Donors its draft
proposal to combat piracy off of the Somali Coast by facilitating
arrests at sea by teams of "ship-riders" from nearby littoral
states, the legal transfer of suspects, and their investigation and
prosecution. UNODC also shared the proposal with the Permanent
Missions of Egypt, Kenya and Yemen, who are included as possible
recipients of assistance. The proposal could not be passed to
Tanzania because Tanzania does not have permanent representation in
Vienna. UNODC staff asserted they could have "boots on the ground"
in two weeks and tangible progress in six weeks thereafter. Major
Donors, including the United States, expressed general support for
the UNODC initiative but there were no immediate funding
commitments. The UNODC proposed program would provide countries in
the region with the tools necessary to utilize the UN Convention
against Transnational Organized Crime to prosecute the pirates, who
constitute an organized crime group as defined by the treaty (Reftel
B).

-------------------------------
The Independent Evaluation Unit
and the Anti-Corruption Academy
-------------------------------
9. (SBU)A representative of the Independent Evaluation Unit (IEU)
provided Major Donors with an overview of the IEU's accomplishments
in 2008. This included a thematic evaluation of UNODC's
terrorism-related work and its program in Afghanistan. Voluntary
contributions to the IEU fell in 2008 to half their 2007 levels.
These financial constraints caused the IEU to delay staff recruiting
and to re-evaluate their 2009 work plan. (Note: UNODC requested UN
Regular Budget funding for IEU staff positions for the biennium
2010-2011. End Note.) This tentative work plan includes an
evaluation of UNODC's anti-corruption activities, its Colombia

illicit crop monitoring survey and an annual evaluation report.
Donors agreed that evaluations play a vital role in a well
functioning organization. Japan urged that the IEU report directly
to the Executive Director, to avoid exertion of undue influence by
branches of the organization.

10. (SBU)UNODC provided a brief overview of its recent agreement
with INTERPOL and the Austrian Government to establish the
International Anti-Corruption Academy. This body would be the first
institution of higher learning dedicated to the fight against
corruption within the framework of the UN Convention against
Corruption. UNODC said the curriculum will be administered by full
time staff, targeting law enforcement, judicial employees, the
private sector and non-governmental organizations. UNODC is
currently approaching donors for the half million dollars in
required start-up costs.

-------------------------------------
Meeting with Executive Director Costa
-------------------------------------
11. (SBU)A/S Johnson and UNVIE Ambassador Schulte met with UNODC
Executive Director Antonio Costa to compare notes in advance of the
Major Donors meeting. A/S Johnson showcased the 2008 U.S.
contribution to UNODC, which grew to 26 million dollars. In the
U.S. view, this voluntary contribution, which includes a little over
USD 1 million to the GPF, represented a serious commitment to the
organization. A/S Johnson stressed the importance of acknowledging
donors for their contributions, citing a trend by UNODC's operations
in Central Asia to fail to recognize U.S. funding support. UNVIE
Ambassador Schulte added that UNODC must also provide good
visibility to its projects with U.S. embassies in the region due to
the increasingly decentralized nature of bilateral assistance
efforts. Costa apologized if the U.S. did not receive the
recognition it deserved, noting that the EU was particularly
sensitive to the same issue; he said that he would address this.

12. (SBU)Costa and his staff asked A/S Johnson and Ambassador
Schulte for their impressions on whether the new administration
would reverse previous U.S. opposition to "harm reduction." A/S
Johnson reiterated the U.S. concern with regard to the EU push for
the term's insertion in the UNGASS documents. He further surmised
that in the short-term no one should expect the U.S. to support the
so-called harm reduction approach, given the many practices the
phrase subsumes. Costa opined that it would be good news if the
U.S. does not make a fundamental policy shift on drug control.

-----------------------------------
Diverse Group Discusses Afghanistan
and UNGASS at UNVIE-hosted Dinner
-----------------------------------

13. (SBU)UNVIE Ambassador Schulte hosted a dinner on December 4 in
honor of A/S Johnson, inviting a diverse array of participants:
UNODC, Canada, Germany, India, Italy, Norway, Pakistan, Sweden,
Turkey and the United Kingdom. The attendees undertook a roundtable
discussion on their views with regard to the narcotics situation in
Afghanistan. A/S Johnson stressed the importance of coupling
incentives and disincentives as an effective means to sustain the
reductions in opium poppy cultivation. To this end, Ambassador
Schulte cited UNODC reporting, which noted that fear of eradication
influenced farmers' decision-making. With regard to NATO
involvement in counternarcotics efforts in Afghanistan, the German
representative emphatically stated that the direct involvement of
German troops was "not possible." A/S Johnson indicated that NATO
engagement did not have to entail use of force but could involve
supporting public information efforts or the disbursement of
benefits under the Good Performers Initiative (GPI). To this end,
he encouraged those governments at the table to provide funding to
the GPI. Sweden made a commitment to take this message back to its
capital.

14. (SBU)With regard to the UNGASS review process, A/S Johnson
raised the disagreement between some "close allies" and partners
over the phrase "harm reduction." He expressed concern that
relationships with the negotiating climate could be negatively
affected at the political level if Member States did not find a
mutually agreeable way forward. Canada's Charge, Terry Wood, agreed
that "harm reduction" posed a problem for his country and pointed to
the compromise language agreed to in the 2008 UN General Assembly
Resolution on drugs as a possible way forward. The UK Ambassador
Simon Smith noted that, although a solution is possible, the UK "did
not want to move backwards." Germany and Norway concurred with the
UK statement. Sweden's Ambassador Lundburg pointed to the fact that
Sweden also does not support "harm reduction" but has managed to
"deal" with it in the EU context. Ambassador Lundburg further
mentioned that there are some EU and Latin American countries that
would like to modify the 1961 Single Convention on Narcotic Drugs
and emphasized that Sweden certainly does not want to "open up that
Pandora's box."

-------
Comment
-------
15. (SBU)The Major Donors meeting proved to be an important venue
for raising the political stakes with regard to the negotiation of
the documents to be adopted at the high-level session of the CND in
2009. A/S Johnson used the occasion to follow up on his discussions
with the UK in Washington and the European Commission in Brussels at
the recent U.S.-EU Drugs Troika. Some EU delegates, notably the UK,
seem to be prepared to begin discussions, if at a suitably high
level, on compromise language to replace the phrase "harm
reduction." Germany appears more reluctant to do so. Other
countries, notably Canada, Pakistan and Namibia, provided strong
support for the United States on this issue. USDEL heard that in a
private meeting with Costa, the Ambassador from Namibia went so far
as to call it an "EU problem", rather than a "US problem," since
many countries disagreed with the EU position.

16. (SBU)Finally, from the interventions of other donor countries,
it does not appear that UNODC's funding structure will undergo any
fundamental shifts in the near term. The meeting highlighted
UNODC's increasing frustration with relying heavily on voluntary
contributions and with what they perceive as donor-driven priorities
for the organization. Nonetheless, many countries, including the
United States, remained skeptical about the feasibility of providing
a sizeable increase in non-earmarked contributions. The thematic
and regional programs afford perhaps the best approach to meet
UNODC's desire for predictable funding. UNVIE will work closely
with the Department to provide feedback to UNODC on these programs
as they are developed.

17. (SBU)Assistant Secretary Johnson has cleared on this cable.

PYATT

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