US embassy cable - 05ROME3855

UNCLAS SECTION 01 OF 08 ROME 003855 
 
SIPDIS 
 
FROM THE U.S. MISSION TO THE UN AGENCIES IN ROME 
 
STATE FOR IO/S. KOTOK; PRM/M. GORJANCE AND T. FITZGIBBONS 
USAID DCHA FOR M. HESS; FFP FOR J. DWORKEN AND D. SKORIC; 
OFDA M. 
LUTZ AND M. BRENNAN; GH/D. CARROLL; 
USDA FAS FOR M. CHAMBLISS 
BRUSSELS FOR P. LERNER 
PARIS FOR GCARNER 
GENEVA FOR N. KYLOH 
NAIROBI FOR REFCOORD AND REDSO 
NEW YORK FOR T. MALY 
 
E.O. 12958: N/A 
TAGS: EAID, AORC, PREF, WFP 
SUBJECT:  SECOND REGULAR SESSION OF THE WORLD FOOD PROGRAM 
EXECUTIVE BOARD, NOVEMBER 7-11, 2005, ROME 
 
REF: ROME 3805 
 
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Summary 
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1. The Second Regular Session of the WFP Executive Board 
(EB) concluded with the approval of a host of 
administrative and programmatic matters, including: the WFP 
Biennial Management Plan for 2006-2007; special relief 
operations and projects totaling US$ 812 million; and a 
pilot weather insurance scheme to be conducted in Ethiopia. 
The WFP EB also approved efforts to improve emergency needs 
assessments, joint logistical operations, and funding for 
effectiveness efforts.  The session included presentations 
by Kuntoro Mangkusubroto, Director of Rehabilitation and 
Reconstruction for Aceh and Nias, Indonesia, on Tsunami 
reconstruction efforts, and Dr. David Nabarro, United 
Nations (UN) Special Coordinator on Avian Influenza, on the 
UN's strategy and response to a possible pandemic. 
 
2. Faced with many challenges this past year, WFP was 
stretched to the limit in responding to an inordinate 
amount of emergencies simultaneously (e.g., although WFP 
aims to effectively address between two and three 
emergencies at one time, it was faced with an average of 
three to four emergencies simultaneously this year).  WFP 
believes that it must be capable of handling four major 
emergencies at the same time and that this will become the 
rule rather than the exception.   WFP has developed an 
excellent A-Team to respond to emergencies, but due to the 
increasing number this core team was stretched and could 
only devote limited time and resources to one emergency 
before moving on to the next. 
 
3. In these times of unprecedented need and limited 
resources, the U.S. delegation challenged WFP to increase 
its effectiveness and sharpen its focus.  The U.S. restated 
our view numerous times in the EB: that we consider WFP's 
emergency response capability to be its highest priority 
and comparative advantage.  We strongly supported building 
WFP's capacity and effectiveness in assessing and handling 
current and future emergencies, and in looking at 
innovative ways to respond.  Boosting WFP's needs 
assessment capabilities to estimate more accurately the 
food and non-food needs of an emergency falls in line with 
the G-8 commitment set out in June 2004 to work with lead 
UN agencies to improve worldwide emergency assessment and 
response systems. 
 
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Current and Future Strategic Issues 
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4. WFP Executive Director James T. Morris opened the 
session with the inspiring story of Kenyan Paul Tergat, a 
former WFP school feeding program recipient and 
spokesperson, who recently won the New York City Marathon. 
On a more sobering note, Morris turned his attention to 
ongoing hunger and malnutrition crises.  On Niger, Morris 
stated that the country was not well advised on food 
security matters, and both Niger and the international 
community's efforts failed: with 150 Nigeriens losing their 
lives to hunger and malnutrition daily.  On Africa overall, 
Morris stated that WFP is attempting to feed 43 million 
people, twice what it fed in 1995.  He expressed dismay 
that only 18 out of 170 heads of state mentioned hunger at 
the 2005 World Summit held at the United Nations 
Secretariat in New York this past September, noting that 
 
SIPDIS 
the world is losing ground on the first Millennium 
Development Goal (cutting poverty and hunger by half in 
2015) and that there should be a 'food first' policy when 
allocating assistance. 
 
5. Morris shifted to emergencies and their ever-increasing 
number.   From the tail end of 2004 and to present day 
2005, WFP faced the largest number of emergencies ever -- 
the Tsunami, Darfur, Niger, Hurricane Stan, and the 
Pakistan earthquake coupled with the food needs of Southern 
Africa and elsewhere.  WFP is still providing food for 1.2 
million beneficiaries in the Tsunami-affected areas.  In 
Pakistan, due to its mountainous terrain and the onset of 
winter Morris noted that the earthquake is WFP's most 
difficult logistical challenge ever, while the Sudan 
remains WFP's largest operation at over US$1 billion. 
Morris admitted that the scope of these crises has 
stretched the organization, but it has also reinforced 
WFP's focus on the need to improve capacity to handle 
simultaneously as many as four major emergencies in any 
year.  The organization has already developed an 
A-Team of emergency specialists, some of whom were deployed 
to the U.S. to assist in Hurricane Katrina relief efforts, 
but they are stretched too thin.  Therefore, WFP must work 
to expand its emergency personnel pool and augment its 
stand-by partnerships with regional and military entities. 
 
6. Morris spoke on child hunger and how WFP, UNICEF and the 
World Bank were joining forces to focus their individual 
strengths to combat this issue, which also encompasses 
malnutrition of pregnant and lactating mothers.  He stated 
that this is the best investment to make, as all agree, 
"women and children should not be hungry and should not 
starve."  In his opening intervention, U.S. Ambassador Tony 
Hall acknowledged that of all the Millennium Development 
Goals we are the furthest behind on the one to cut hunger 
and malnutrition in half by 2015. 
 
7. On funding, Morris noted that in the past three years 
WFP has succeeded in expanding the donor base, and could do 
more.  The overall percentage of programs funded by the 
U.S. had declined from 62 percent to 44 percent since 2002, 
even though in absolute terms U.S. contributions have 
risen.  The top 10 donors' share has increased in overall 
terms from US$1.6 billion in 2002 to US$2.3 billion in 
2005, with WFP expecting to receive US$173 million in 
funding from new donors this year.   The European 
Commission (EC), Belgium, Greece and Sweden have set 
contribution level records this year.  Private sector 
donations have also doubled since 2004.  In CY 2005, 
private sector donations have also doubled to US$ 123.8 
million from US$ 61.6 million in 2004. (Note:  While these 
contributions are relatively small individually, they 
constitute an important source overall.  The implication 
for the U.S., particularly USAID, is that while we still 
have a large voice by virtue of our funding levels, others 
have an increasing say and stake in what WFP does. End 
Note.)  Morris expressed gratitude to Lauren Landis, former 
USAID Food-for-Peace Director, and Mary Chambliss, USDA 
Deputy Administrator for Export Credits, who will retire 
early next year, for their strong support and partnership. 
 
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The "State of the Organization" - The WFP Management Plan 
for 2006-2007 
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8. WFP boasts an ambitious but focused Biennial Management 
Plan for 2006-2007.  The proposed budget of US$ 5.793 
billion will cover new projects and extensions in 77 
countries, reach 75 million beneficiaries and deliver 9.5 
million metric tons (MT) of food aid.  The proposed 
development portfolio totals US$ 712 million for 49 country 
projects and two (2) regional projects. WFP's budget has 
nearly doubled from $2.896 billion in 2000-2001.   Budget 
increases have been met through a combination of increased 
contributions from traditional donors, largely to meet 
emergency needs, and an increase in the donor base. 
Interestingly, but not surprising, donations from the World 
Bank have gone to development programs, making up for a 
severe shortfall in those programs.  Although country 
offices will be strengthened in 2006, WFP will experience a 
19 percent reduction in the number of country operations, 
from 95 in 1996 to 77 next year.  WFP plans to continue 
decentralizing operations by shifting 77 staff from Rome to 
the field; an additional 20 posts will be reduced at its 
headquarters. 
 
9. Many donors, including the U.S., noted a decline in the 
cost per unit of food delivered and a 20 percent increase 
in operational costs per MT since the last biennium.  WFP 
explanations for the higher costs were mainly due to the 
increased costs of non-food related activities, the 
difficult environment in which WFP operates, increases in 
transport and fuel costs, and a weaker U.S. dollar.  Donors 
also noted the growing number of Protracted Relief and 
Recovery Operations (PRROs) (a 33 percent increase compared 
with the previous biennium) and the high recurrent costs to 
WFP in this budget.  According to WFP, as PRROs require 
higher nutritional value food baskets there is a higher 
associated cost.  In addition, PRROs tend to include 
support to non-food interventions and activities.  There 
are other factors, such as the United Nations Joint 
Logistics Centre (UNJLC), which can involve considerable 
expense to WFP even when food is not the major response to 
an emergency.  This is true in Pakistan, where in a 
briefing to donors WFP asked not to be judged by how much 
food is distributed relative to the cost of WFP's 
operations. 
 
10. All U.S. financial concerns on the Biennial Management 
Plan were reflected in the EB final decisions (see reftel). 
For example, the WFP Secretariat will develop for 
consideration at the first session of the EB in February 
2006 a report on the potential benefits and consequences of 
applying a fixed Indirect Support Cost (ISC) rate based on 
estimated expenditures versus an audited rate based on 
actual expenditures.  In the Annual Meeting in June the EB 
will review and reconsider the current ISC rate of 7 
percent.  Also for the Annual Meeting, the WFP Secretariat 
will prepare a review of the amounts, sources, and uses of 
WFP's cash balances, with an explanation of what WFP 
considers appropriate levels.  WFP's financial management 
system and performance will be the major topic for 
bilateral discussions in January 2006. 
 
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Other Financial Issues: Appointment of External Auditor and 
Delegation Authority 
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11. The Board re-appointed the Comptroller and Auditor 
General of the United Kingdom as External Auditor of WFP 
for a second four-year term, from July 1, 2006, to June 30, 
2010.  Following an intervention by the U.S. delegation 
that the Board "explore the possible benefits and 
consequences of a rules change to permit an open competition" 
in the future, the Board voted to invite WFP's Bureau to 
review the organization's financial regulations toward 
clarifying the procedures for re-appointment of the 
External Auditor. 
 
12. The Board granted the WFP Executive Director the 
authority to receive and re-program additional directed 
resources within country programs (CP) and to change the 
orientation of CP components through a budget revision that 
would not affect the overall approved level of a CP.  To 
facilitate adjustments the EB also abolished the 10 percent 
limit on reallocation of resources between CP components. 
The U.S. agreed with other delegations that these changes 
would go a long way toward freeing the Executive Director's 
hand to make business-management decisions in an efficient 
manner, and help the EB to focus on policy issues.  These 
additional and enhanced powers were granted to the 
executive Director for a period of one year, after which 
the Executive Director must report back to the Board 
(reftel). 
 
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Progress Report on Emergency Needs Assessment 
Implementation Plan 
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13. The EB took note of the update on progress made in 
strengthening WFP's emergency needs assessment (ENA) and 
undertaking activities in a 30-month implementation plan. 
The U.S. delivered a joint statement in response to the 
progress report (USAID co-authored the statement with 
European Commission, and the United Kingdom Department 
for International Development, and the German Federal 
Ministry for Economic Cooperation and Development). The 
statement welcomed WFP progress at headquarters, and 
requested an in-depth update on four ENA implementation 
priority areas: (1) Linkage between ENA conclusions and 
program design; (2) Development of a monitoring system 
to guide improvements in ENA accuracy and timeliness; (3) 
Strengthening of working partnerships with in-country 
information providers (especially to determine if food 
interventions are appropriate or if non-food responses are 
needed); and (4) Synthesis of WFP's recently developed 
policies (to define emergencies, target within, and exit 
from emergencies) into a cohesive strategy that encompasses 
both ENA and program response.  The joint statement was 
also endorsed by Australia and the Netherlands. WFP agreed 
to provide a response in writing. 
 
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Synthesis Review of United Nations Joint Logistics Centre 
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14. The United Nations Joint Logistics Centre (UNJLC) is a 
common humanitarian service hosted by WFP in Rome.  The EB 
was asked to respond to recommendations from a synthesis 
review of the UNJLC based on recent reviews of UNJLC field 
deployments in Iraq, Afghanistan, Liberia, and a recent 
review of the Rome-based central "Core Unit."   The U.S. 
supported WFP's role as the host for UNJLC, endorsed the 
synthesis report, and recommended full and rapid 
implementation of its recommendations.  The U.S. urged 
clarification of UNJLC working agreements with key 
partners, especially with regard to a planned formal 
directive with WFP Operations Department (OD), coordination 
functions with the UN Humanitarian Air Service (UNHAS), and 
with military logistics, where it would be useful if 
contingency plans included a joint deployment with military 
agencies from the onset of an emergency.  WFP responded 
that a formal WFP OD directive will be completed within the 
next few months based in part on EB comments on the 
synthesis review, coordination instructions with UNHAS are 
now in place, and the UNJLC is increasing its efforts to 
coordinate with military agencies for the use of military 
assets and improved sharing of key information.  The role 
of the UNJLC is still evolving based on a recent assessment 
of the Tsunami emergency; outstanding issues include the 
sharing of confidential logistics cost data and coordination 
of air services. 
 
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UN Special Coordinator for Avian Influenza Briefs WFP 
Executive Board 
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15. Dr. David Nabarro, who was appointed in September by UN 
Secretary General Kofi Annan as the Senior UN System 
 
SIPDIS 
Coordinator for Avian and Human Influenza, was invited by 
the WFP Secretariat to provide a brief on the current 
status of and UN preparedness for Avian Influenza.  Nabarro 
stated that a human influenza pandemic occurred three times 
in the last century while the global spread of avian 
influenza is a present-day reality as a result of migratory 
birds transporting the Highly Pathogenic Avian Influenza 
(H5N1) virus from Asia to Europe (and eventually the Middle 
East and Africa).  Having entered the beginning of a 
pandemic alert period, also known as Phase Three (with 
Phase Six being the pandemic level period), Nabarro further 
stated that the Avian Influenza virus situation currently 
has met two out of the three prerequisites for a 
pandemic, with the remaining pre-requisite being efficient 
human-to-human transmission. 
 
16. The UN system has developed a three-pronged approach 
for controlling Avian Influenza:  1) stop the virus at the 
source through proactive prevention and containment; 
2) invest in preparedness against known risks; and 3) build 
capacity for a rapid and effective global response to a 
pandemic.  Nabarro indicated that on November 9, the UN 
proposed a coordination framework.  This framework 
incorporates a country-led national coordination mechanism 
that will be sustained and reinforced regionally and 
globally through institutions such as the World Bank, 
organizations such as the Association of South East Asian 
Nations (ASEAN), the three main technical agencies involved 
[the UN Food and Agriculture Organization (FAO), the World 
Organization for Animal Health (OIE) and the World Health 
Organization (WHO)], and UN partners such as WFP, UNDP and 
UNICEF, among others, and will be backed up by an 
international avian and pandemic influenza consortium, 
representing countries, multilateral agencies, financial 
institutions and civil society. 
 
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WFP's Role in Avian Influenza Global Preparedness and 
Response 
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17. WFP has been until very recently more narrowly focused 
on protecting its capacity to deliver food assistance and 
logistics in areas where Avian Influenza crops up, but the 
organization is starting to look at playing a broader, 
critical role in coordination, logistics, and 
communication/information management.  David Kaatrud, Chief 
of WFP Operations Department for Emergency Preparedness and 
Response Branch (ODAP), reported that as part of its 
enterprise risk management culture, WFP incorporated the 
possibility of a pandemic as a corporate strategic risk and 
instituted an Avian Influenza Working Group.  In line with 
and in support of the broader UN strategy, WFP developed a 
preparedness framework that will ensure WFP program 
continuity, explore new program responsibilities, and 
provide services beyond food aid.  Earlier, Anthony 
Banbury, WFP Asia Regional Director and point person for 
WFP's response to Avian Influenza, reported that WFP has 
been working since May/June 2004 with the U.S. Pacific 
Command (PACOM) and several UN agencies to prepare for a 
human outbreak through pre-positioning supplies and 
stockpiling anti-virals.  Meanwhile, collaboration with UN 
partners is ongoing: WFP is working with WHO on developing 
an Avian Influenza page on the Humanitarian Early-Warning 
Service Web site (HEWSweb); and WFP is providing technical 
assistance to FAO in Indonesia to destroy chicken coops and 
contaminated cages.  The U.S. delegation intervened in 
support of a strengthened WFP role in the global response 
to Avian Influenza. 
 
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Project Approvals:  Pilot Project on Ethiopia Drought 
Insurance 
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18. After much debate and with the support of U.S., 
Denmark, Ethiopia and Nicaragua, the Board approved the 
"Pilot Development Project:  Ethiopia Drought Insurance 
10486.0."  The U.S., Denmark and Ethiopia were the few 
donors committing resources to this one-year innovative 
weather insurance pilot aimed at mitigating drought risk 
and protecting the livelihoods of vulnerable Ethiopians. 
The Secretariat will report on the initial results of the 
pilot project at its Annual Session in 2006 and the EB will 
deliberate on that occasion on any further WFP involvement 
in the drought insurance scheme.  The EB also noted that ED 
Morris intended to pursue his contacts with United Nations 
partners on the development of drought insurance schemes 
and would report to the Annual Session in 2006.  The United 
Kingdom, Sweden and Germany were the most vocal among 
donors in requesting that no new program support funds be 
allocated to continue financing the development of the 
pilot project in CY 2006. 
 
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"Funding for Effectiveness" Document Approved 
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19. The EB was asked to approve a resource document 
entitled "Funding for Effectiveness," which commits WFP to 
demonstrate improved efficiency and effectiveness of 
multilateral contributions in the context of results-based 
management (RBM) and report on results achieved.  The 
document definitions for "multilateral contribution" and 
"directed contribution" include the phrase "...for which 
the donor agrees to accept the Standard Project Reports 
(SPRs)."  Many donors voiced concerns about the limitations 
of the current format for SPRs.  The decision to approve 
the document was revised to require EB approval of the 
content and format of the SPR at the next Annual Session of 
2006 with an expectation of revision from time to time as 
appropriate.  Japan insisted that a reference to a WFP 
preference for cash contributions be deleted from the final 
decision with the understanding that an analysis and 
discussion of best practices and comparative benefits of 
local purchase and cash contributions will take place at 
the First Regular Session in 2006. 
 
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Great Lakes Region Protracted Relief and Recovery Operation 
(PRRO) 
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20. The EB approved the PRRO for the Great Lakes region 
(Burundi, Rwanda and Tanzania) for only one year, even 
though WFP had requested a three-year (2006 to 2008) 
program.  The proposed program would have more than doubled 
the number of beneficiaries from 1 million to 2.4 million, 
with an increased cost of almost US$ 100 million, at a time 
when conditions are improving.  The U.S. drafted a joint 
statement with other donors (the United Kingdom and the 
European Commission) questioning the assumptions of the 
three-year time period and recommending that the PRRO 
reflect new and fast changing conditions in the region by 
using a shorter-term planning and budgeting framework. 
During 2006, WFP, UNHCR and interested donors will conduct 
a joint evaluation mission for the PRRO to review the need 
for and scope of future programming.  WFP will report on 
the progress and results of the evaluation and prepare 
a revised PRRO for the Second Regular EB Session in 
November 2006 that reflects the evaluation findings. 
 
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Eight Other Projects Totaling US$ 812 million Approved for 
10+ million Beneficiaries 
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21. In addition to the Great Lakes PRRO, eight other 
programs totaling US$ 812 million (1.29 million MT of food 
aid) were considered.  Three country programs were approved 
(Uganda, Burkina Faso and Ghana) at a combined cost of US 
$105.2 million serving over 800,000 beneficiaries with 
207,000 metric tons (MTs) of food aid.  Two PRROs were 
approved (Afghanistan at a cost of US$ 360 million for 6.6 
million beneficiaries with 549,000 MTs of food aid; and 
Guatemala at a cost of US$ 27.4 million for 577,000 
beneficiaries with 29,000 MTs of food aid).  Lastly, budget 
increases were approved for three PRROs: US$ 211 million 
for over 546,000 MTs of food aid for drought affected 
countries in Southern African; USD$ 88 million for Tsunami 
impacted areas in Indonesia; and US$ 21 million for Tsunami 
affected areas of Sri Lanka. 
 
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CY 2006 Priorities 
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22. As the number of emergencies around the world continues 
to grow and the humanitarian community depends increasingly 
on WFP's expertise to deliver food and logistics in an 
effective manner, we must insist on the best possible 
performance from WFP.  At US$ 1.13 billion in contributions 
to date in CY 2005, the U.S. remains WFP's largest donor. 
With this comes the responsibility and imperative to assure 
that the organization maintains its focus on emergency 
response capacity, as laid out in the WFP Biennial 
Management Plan.  Throughout the coming year, USUN-Rome 
will continue to work with WFP by ensuring that responding 
to emergencies effectively and saving lives and livelihoods 
remains WFP's number one priority; making sure that program 
levels are based on sound emergency needs assessments; and 
guiding the organization to increase efficiency through 
enhanced management and financial discipline. 
 
23. Minimize considered. 
 
Hall