Disarmament Diplomacy

Issue No. 57, May 2001

CWC Update

Implementation on a Low Flame

By Alexander Kelle

Introduction

108 states parties to the Chemical Weapons Convention (CWC) met from 14 to 19 May in The Hague for the Sixth Session of the Conference of the States Parties (CSP). In addition, one signatory state (Israel), two non-signatories (Libya and Andorra), a few international organisations as well as eight non-governmental organisations were granted observer status.

While the Organisation for the Prohibition of Chemical Weapons (OPCW) and its member states seemed on the way to a level playing field after the previous CSP,¹ one cannot but wonder whether this course has actually been pursued over the last couple of months. The OPCW has faced a serious financial crisis, which has not only overshadowed all other developments but also temporarily prevented the regular conduct of the Technical Secretariat's operation. In addition, the proceedings of the Executive Council - which was unable to present a draft budget and plan of work to this session of the CSP - and the actions of a number of states parties raise doubts as to whether countries whose individual actions have a great impact on the success of the OPCW are currently acting according to the responsibility they carry, and whether the Organisation as a whole has really outgrown its "infancy".

This paper starts with a brief overview of the most relevant developments in the period between the fifth and the sixth CSP, leading to the financial crisis in the months preceding the May meeting. The CSP itself - clearly dominated by the search for a budget of the Organisation - will then be considered, and an attempt made to identify issues not directly related to financial matters. Finally, an overall assessment of the current state of play in CWC implementation will be given.

The Intersessional Period

Between the fifth and the sixth session of the CSP, ten new states acceded to the CWC and thus became members of the OPCW.² As a result, the CWC has now 143 states parties and 31 signatories. With respect to initial declarations - in the past, one of the more common shortcomings of state parties' behaviour - only three are outstanding from the most recent CWC members.

On the basis of declarations received from member states the Technical Secretariat (TS) as of June 1 had conducted 985 inspections in 49 states parties. Of these inspections, 223 took place at CW destruction facilities, 209 at CW production facilities, 134 at CW storage facilities, 34 at old CW sites, 17 at abandoned CW sites, 83 at Schedule 1 facilities, 168 at Schedule 2 plant sites, 65 at Schedule 3 plant sites, and 51 at DOC plant sites.³ One has to note, however, that the submission of annual declarations for 2001 has been slow and uneven. Less than a quarter of states parties had declared their activities for 2000 by the deadline of March 31, as spelled out in the Convention's Verification Annex.⁴

Similarly, states parties' notification of national implementing measures including legislation remains far below requirements. As of March 8, only 53 member states (38%) had informed the Technical Secretariat of their implementing legislation. Thus, for more than 60% of states parties it is unclear whether they have lived up to their obligation under Article VII, para.5 of the Convention. In the event that they have not adopted the required implementing measures, this "may mean that the Convention is not enforceable in those jurisdictions."⁵ But even of the 52 states that notified the Organisation of their implementing measures, a large portion have only implemented parts of the CWC: for example, more than 30 of these states are not enforcing the requirement for end-user certificates in trade with non-states parties, while others have no penalties for certain violations of the CWC, or have no stipulations included in their legislation that would ensure its extra-territorial application.⁶

Meanwhile, states parties' payment of assessed contributions and reimbursement of verification costs under Articles IV and V - or rather the lack of payments - continued to be a cause of serious concern and was partially responsible for the financial crisis faced by the OPCW in the first months of 2001. Three categories of "problem states" have to be distinguished. First, those states in arrears with the payment of their assessed contribution for two years or more. As of April 30, 31 states (more than 20% of the states parties), owing the Organisation a total of some 660,000 Euro, fell into this category and had consequently lost their voting rights in the Organisation.⁷ Second, those states late with respect to annual payments for the year 2001. As of April 30, 60 out of 143 states parties had made no contribution towards their assessment for the current year, while others had only partially paid: among the top six contributors to the OPCW's budget, this applies to Germany, Italy, and the United States of America.⁸ In contrast, Japan, France and the UK had paid their assessed contributions for 2001 in full. The third category relates to the reimbursement of verification cost under Articles IV and V. Of the eleven states parties concerned, six had reimbursed the Organisation in full: China, France, Iran, Japan, South Korea, and the UK. The remaining five states either had to pay all of their reimbursements (Bosnia and Herzegovina, the Russian Federation, and the Federal Republic of Yugoslavia) or part thereof (India and the US). As in the past, the biggest debtors in this category are the US and Russia, dividing amongst themselves more than 80% of the reimbursements outstanding.⁹

The low payment record of states parties is aggravated by structural problems in the OPCW's financial system. The financial crisis came to the fore in January 2001 when the Director General, José M. Bustani, informed the Executive Council of a serious cash-flow problem and a projected budget deficit for 2001 of between 6 and 7 million Euro. Part of the Organisation's structural deficit relates to the modalities of reimbursements under Article IV and V. Consequently, even if states parties were to reimburse the Organisation without any delay, payments inevitably would arrive too late. In addition, "the adopted budget contained overestimates of the anticipated cost of these verification activities and thus the income expected from reimbursements was higher than that actually invoiced and/or received."¹⁰ In the past, the Organisation's budget allowed for this shortfall to be compensated for from other areas of the budget, or from a budget surplus. Because the monies allocated for other activities are now actually consumed, this mechanism is no longer workable. The cash deficit of about 5 million Euro for the year 2000, and the projected deficit for 2001, led the Secretariat to drastically reduce its activities, including verification and cooperation and assistance measures.

In the period between the fifth and the sixth session of the CSP, the Executive Council (EC) held seven regular sessions and a number of meetings, whose frequency increased considerably once the OPCW's financial crisis became apparent. In addition to its statutory tasks, the EC received from the fifth session of the CSP in May 2000 a list of "13 matters or issues requiring monitoring or action on its part, including recommendations to the Conference at its Sixth Session."¹¹ The outstanding issues to be addressed were grouped in four clusters, the negotiations on each of which were coordinated by one of the EC's vice-chairs: chemical weapons issues; chemical industry and other Article VI issues; administrative and financial matters; and legal, organisational, and other issues. Additional facilitators were also tasked to tackle individual issues requiring resolution.

However, even if one takes into account the fact that since the beginning of 2001 the EC has had to devote a considerable portion of its time to the financial crisis, the output from the EC to the sixth session of the CSP is disappointing. On the positive side, the EC agreed upon the authentication and certification procedure for the Central OPCW Analytical Database and on-site databases, adopted the relationship agreement between the OPCW and the United Nations, recommended to the CSP the approval of two agreements on privileges and immunities of the OPCW, and adopted a decision on one of the Russian conversion requests for a CW production facility.¹² In addition, it transmitted a draft decision on the transfer of Schedule 3 chemicals to non-state-parties and reported on a draft decision concerning the "low concentration limits for declarations containing Schedule 2A and 2A* chemicals", upon which the Council could not decide.¹³

In contrast, the list of issues still under consideration by the EC grew to 38 items, including inter alia the draft OPCW programme and budget for 2002, fostering of international cooperation for peaceful purposes in the field of chemical activities, OPCW staff rules, and a variety of other matters. Three items in the list - old and abandoned chemical weapons, industry declaration issues, and challenge inspections - are in turn divided into five sub-categories of issues, and one item - confidentiality - contains three sub-issues.¹⁴ This raises serious doubts whether the EC's current mode of operation corresponds to its role as envisaged in Article VIII of the Convention as the executive organ of the OPCW tasked to "promote the effective implementation of, and compliance with" the CWC.

In Search of a Budget: The Sixth Session of the Conference of States Parties

During the general debate, 36 states parties addressed the CSP, two speaking on behalf of groups of states: Sweden on behalf of the European Union and South Africa on behalf of the African Group. As to the issues addressed, the question of solving the budgetary problems featured most prominently. Other issues raised comprised inter alia the uncertainties surrounding Russian CW destruction plans, the importance of continued and expanded international cooperation and assistance measures, and the need to solve outstanding issues. There were also calls to take a longer-range view of the Convention's implementation, given the fact that the first CWC Review Conference will have to take place within the next two years.

As was to be expected, the greatest amount of time during the one-week Conference was devoted to the adoption of a budget for the year 2002. In its initial draft budget, the TS asked for an increase of roughly 24% over the 2001 budget. This would have resulted in a budget for next year of 75 million Euro. In the run-up to the CSP, however, this request had already been revised downwards - to a 4.3% increase over the 2001 budget - in negotiations between the Secretariat and the EC. This compromise was the Secretariat's position at the beginning of the CSP and was reportedly supported by a large majority of EC members. Only the United States and Germany still objected, with the US delegation arguing that a 2.8% increase would be the utmost it could support. This figure was reflected in the decision finally adopted for the 2002 programme and budget, which amounts to 61.9 million Euro. In real terms, i.e. taking into account inflation, this represents a negative budget growth.

As regards the current budget shortfall of 5.1 million Euro, no supplementary budget was agreed upon. Rather, the TS was authorised to utilise the working capital fund should it face another cash-flow problem later in the year. Furthermore, the TS was authorised to transfer as an exceptional, one-time measure, the interest accrued in two special accounts.¹⁵ In addition, states parties were called upon to make voluntary contributions. The 2000 budget deficit of 3.6 million Euro will now be offset by withholding the distribution of the cash surplus for 1999, which otherwise would have to be paid back to member states.¹⁶ As during previous sessions of the CSP, the decision on the scale of assessment - especially the reduced US contribution of 22%, instead of 25%, to the overall budget - proved to be contentious, but was eventually adopted on the last day of the session.¹⁷

Given this emphasis on budgetary wrangling, it should not come as a surprise that little was accomplished in terms of substantive issues. The above-mentioned draft decisions submitted by the EC were all adopted by the CSP without any debate.¹⁸

A further decision taken by the CSP related to the transfers of Schedule 3 chemicals to non-states parties. According to Part VIII, para.27 of the Verification Annex, five years after entry into force of the Convention the Conference has to decide on how to regulate trade in Schedule 3 chemicals with non-members. During last year's session, a comparable decision was taken with respect to Schedule 2 chemicals and the EC was tasked to submit a proposal on Schedule 3 chemicals for the sixth session.¹⁹ Although the EC was unable to reach a decision on the measures to be taken five years after entry into force, it managed to agree some clarifications regarding thresholds for mixtures when transferred to non-states parties and related issues.

This draft decision was adopted by the CSP as submitted by the EC. Its most important section foresees that end-use certificates for mixtures containing Schedule 3 chemicals are not required from non-states parties if the percentage of Schedule 3 chemical in the mixture is below 30%, or if the chemical is identified as a consumer good packaged for commercial or individual use.²⁰ In addition, the decision urged states parties to adopt the necessary legislative and administrative measures to implement the decision, tasked the TS to report regularly on states parties' implementation of the decision, and referred back to the EC the question of what - if any - additional measures might be implemented in relation to Schedule 3 exports to non-members after the five-year grace period foreseen in the Convention.

In contrast, the recommendations not adopted by the EC - on the declaration of low concentrations of Schedule 2A and 2A* chemicals in mixtures, as well as the controversial language on implementation of Article XI (international cooperation in peaceful chemical activities) - were transferred by the Council to the Committee of the Whole for resolution.

Unfortunately, efforts undertaken to resolve both these issues at the CSP proved to be futile. Concerning low concentrations in Schedule 2A and 2A* mixtures, the facilitator's proposal of a declaration threshold of 0.5% was rejected by the US, French, and German delegations.²¹ The crucial issue underlying this debate is the question of whether PFIB, a by-product of Teflon production - the only listed chemical of relevance in this context - is regarded as a source of proliferation concern, and, following from this, whether a declaration threshold should be selected low enough to cover all facilities worldwide or whether inspections of a small section of PFIB-related facilities suffices to meet proliferation concerns. For the large majority of states parties, as well as the TS, the answer to both of these questions is a clear "yes", and they therefore supported the facilitator's proposal, which would add another 30 to 40 inspectable facilities worldwide to the OPCW's workload. It seems that the three above-mentioned states either were not convinced of PFIB's proliferation relevance or were fearing an undue additional burden upon their chemical industries. In any case, their positions did not move and the issue was referred back to the EC for resolution.

A similar "solidity" of positions already taken during EC deliberations can be diagnosed for the implementation of Article XI on the fostering of international cooperation in the peaceful application of chemistry. Here again, the facilitator appointed for the issue cluster presented a draft decision during the 24th Session of the EC. As this proposal recommended that the EC keep the issue under review and - more importantly - sought to establish an "International Cooperation Committee for the implementation of Article XI of the Convention", it was unacceptable to a number of Western states.²² Subsequent language proposed by Canada and Sweden did not contain the two contentious operative paragraphs of the facilitator's proposal.²³ Competing language forwarded by a number of non-aligned (NAM) states - Cuba, India, Indonesia, Iran, Pakistan, and others - not only attempted to keep the Cooperation Committee in the proposal but also sought to task the EC to "prepare the terms of reference, composition and function" of that body.²⁴ Given the unwillingness of NAM states to give up the highly unrealistic idea of the Cooperation Committee - a concept borrowed from the negotiations for a Compliance Protocol to the Biological Weapons Convention - and to accept as a compromise the more pragmatic measures for international cooperation contained in both the facilitator's proposal and the language submitted by Canada and Sweden, this issue was also referred back to the EC, which in turn was tasked to report again on the matter to the seventh session of the CSP next year.

Assessment: CWC Implementation on a Low Flame

As with any other assessment, passing a verdict on the sixth session of the CSP - or, more generally, on the current state of play in CWC implementation - crucially depends on the yardsticks applied for measuring success or failure. So, is the resolution of the OPCW financial crisis a success which then leads one to a positive assessment of overall CWC implementation? Dealing with the "holes" in the 2000 and 2001 budgets, and agreeing a 2002 programme and budget, certainly represents an important step forward in maintaining the capability of the OPCW to fulfil at least its core functions - verification and international cooperation and assistance.

At the same time, two qualifications are in order to put this achievement into perspective. First of all, the Organisation's financial problems have not been definitively solved. Although the immediate danger for the OPCW's operationality has been defused, the structural problems remain unchanged. These relate first and foremost to the modalities surrounding the reimbursement of verification costs under Articles IV and V of the Convention, with the adaptation of which the EC has been tasked. In light of the past performance of the Council and its inability to reach consensus decisions, prospects for the Council's success are hardly guaranteed.

The second qualification concerns the payment record of states parties as far as their assessed annual contributions are concerned. If the approach taken by many states parties in this regard does not change, part of the "solution" to this year's budget problems might easily be the source of next year's financial crisis. This relates to the permission granted to the TS to use part of the working capital fund if the Organisation should face another cash flow problem later this year. If this were to happen, and at the same time the payment performance of states parties does not improve drastically, the cash-flow problem would only be postponed to the first quarter of 2002, when assessed contributions might not be transferred to the OPCW on time and the working capital fund would be needed as a cushion to keep the TS operational.

With respect to the mode of operation of the EC, one wonders whether it might not now be time to revisit Article VIII, para.29, of the CWC, according to which each member of the Council has one vote. Questions of procedure can be decided by the EC with a simple majority. Matters of substance require a two-thirds majority of all its members. It will be recalled that the only decision taken by vote so far concerned the Director General's salary. All other matters were decided - or rather, not decided - by consensus. As the list of unresolved issues in the EC's report of its activities grows longer from CSP to CSP, the issue should surely be raised as to whether the moment has arrived to actually implement the abovementioned provision in the Convention.

Of course, proponents of the consensus-approach will immediately argue against this idea. They will caution that a polarisation will occur in the Council, inflicting damage on the Convention as a whole and hindering, rather than facilitating, its effective operation. And yet, it was one of the CWC's great assets from the outset that it strove to treat all members on an equal footing, explicitly making no provision for different groups endowed with special rights and privileges - as does, for example, the nuclear Non-Proliferation Treaty. In fact, what appears to be developing in the CWC might be considered as even more flawed than the NPT, as the current implementation attitude enables states to pick and choose their obligations: adopt national implementing measures - or not; require end-use certificates for exports to non-members - or not; pay assessed contributions on time and in full - or not; reimburse verification cost related to CW destruction - or not.

The same can be said for the operation of the EC: insistence on the consensus principle allows individual states or small groups of states to hold progress hostage to the realisation of their parochial interests. If this procedure were to continue, the EC would run the risk of being degraded from the executive organ of the OPCW to the stalwart of the stalemate dominating a paralysed Organisation.

If the choice is between keeping the CWC alive on a low flame or risking the - probably only temporary - polarisation of debates in the OPCW's policy making organs, the priority of all those committed to the CWC's success should be straightforward: turn up the heat and do not let some states parties' indifference or deliberate attempts to block progress succeed.

Notes and References

1. See the assessment in Alexander Kelle: 'The CWC at Three - On the Way to a Level Playing Field', in Disarmament Diplomacy, Issue No.46, May 2000, pp.34-40.

2. These states are Dominica, Gabon, Kiribati, Malaysia, Mozambique, Jamaica, the United Arab Emirates, Yemen, the Federal Republic of Yugoslavia, and Zambia.

3. See Pamela Mills: 'Progress in the Hague, 34th Quarterly Review', in: The CBW Conventions Bulletin, No.52, June 2001, forthcoming.

4. For the production of Schedule 1 chemicals at a single small-scale facility, this requirement for annual declarations to be submitted "not later than 90 days after the end" of a given year is contained in Part VI, para.15 of the Verification Annex. Corresponding provisions for the submission of aggregate national data on Schedule 2 and 3 Chemicals are to be found in Part VII, para.2 and Part VIII, para.2, respectively.

5. "Report by the Director-General. National Implementation Measures", OPCW-Document EC-XXIV/DG.4, The Hague, 22 March 2001, p.1.

6. See OPCW-Document EC-XXIV/DG.4, The Hague, March 22, 2001, p.2.

7. See "Opening Statement by the Director-General to the Conference of the States Parties at its Sixth Session", OPCW-Document C-VI/DG.6, The Hague, May 14, 2001, p.5. The 31 states are Armenia, Benin, Burkina Faso, Burundi, Ecuador, El Salvador, Equatorial Guinea, Fiji, Gambia, Georgia, Ghana, Guinea, Guyana, Laos, Malawi, Maldives, Mali, Mauritania, Moldova, Mongolia, Niger, Papua New Guinea, Paraguay, Senegal, Seychelles, Tajikistan, Togo, Trinidad and Tobago, Turkmenistan, Tanzania, see OPCW-Document C-VI/DG.5, May 11, 2001, p.8.

8. The amounts outstanding at the cut-off date were 2,704,477 Euro for Germany, 2,575,542 Euro for Italy, and 4,590,706 Euro for the US. See OPCW-Document C-VI/DG.5, pp.5,7.

9. The US owes the OPCW 2,128,391 Euro and Russia 868,670 Euro out of a total of 3,583,353 Euro for reimbursements of CW-related verification cost. See OPCW-Document C-VI/DG.5, p.9.

10. Pamela Mills: 'Progress in the Hague. 33rd Quarterly Review', in The CBW Conventions Bulletin, No.51, March 2001, p.13.

11. "Report of the Executive Council on the Performance of its Activities (3 April 2000 - 23 February 2001), OPCW-Document EC-XXIV/3, The Hague, April 6, 2001, p.2.

12. For details on these issues see OPCW-Document EC-XXIV/3, pp.12-13.

13. See Agenda Items 11.2 (i) and (j) in the "Annotated Agenda for the Sixth Session of the Conference of the States Parties", OPCW-Document C-VI/INF.1, The Hague, May 11, 2001, p.7.

14. See OPCW-Document EC-XXIV/3, pp.17-19.

15. See OPCW-Document C-VI/DEC.19, May 19, 2001, unofficial electronic version, as accessed on the Internet (at www.opcw.org) on June 8, 2001.

16. See OPCW-Document C-VI/DEC.18, May 19, 2001, unofficial electronic version, as accessed on the Internet (at www.opcw.org) on June 8, 2001.

17. See OPCW-Document C-VI/DEC.20, May 19, 2001, unofficial electronic version, as accessed on the Internet (at www.opcw.org) on June 8, 2001.

18. See for example OPCW-Documents C-VI/DEC.4 and C-VI/DEC.5 as well as the OPCW Press Release No.13/2001: "Sixth Conference of the States Parties Concludes", The Hague, May 21, 2001.

19. See "Decision. Implementation of Restrictions on Transfers of Schedule 2 and Schedule 3 Chemicals to and from States not Party to the Convention", OPCW-Document C-V/DEC.16, May 17, 2000.

20. See "Decision. Provisions on Transfers of Schedule 3 Chemicals to States Not Party to the Convention", OPCW-Document C-VI/DEC.10, May 17, 2001, unofficial electronic version, as accessed on the Internet (at www.opcw.org) on June 8, 2001. Implicit in this decision is also the requirement for receiving non-states parties not to retransfer materials for which they have to provide an end-use certificate.

21. This threshold is already contained in the proposal submitted to the EC during its 24th Session in early April; see OPCW-Document EC-XXIV/DEC/CRP.6, The Hague, April 3, 2001.

22. See OPCW-Document EC-XXIV/DEC/CRP.8, April 6, 2001.

23. See OPCW-Document EC-XXIV/NAT.5, April 6, 2001.

24. See OPCW-Document EC-XXIV/NAT.6, April 6, 2001.

Dr. Alexander Kelle is a scholar at the Institute of Comparative Politics and International Relations, J.W. Goethe-University Frankfurt and a Guest Researcher at the Peace Research Institute Frankfurt.