Cablegate: International Maritime Organization (Imo): Report of The

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INFO RUWDQAC/COMDT COGARD WASHINGTON DC//G-CI/G-MS/G-M/G-L/G-MW
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
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SUBJECT: INTERNATIONAL MARITIME ORGANIZATION (IMO): REPORT OF THE
FIFTY-SIXTH SESSION OF THE TECHNICAL CO-OPERATION COMMITTEE AND THE
NINETY-SIXTH SESSION OF COUNCIL, LONDON, 13-23 June 2006.

1. SUMMARY: The International Maritime Organization (IMO, or "the
Organization") held meetings in London from June 13 through June 23,
2006, consisting of the Technical Co-operation Committee's
fifty-sixth session (TCC56) and the Council's ninety-sixth session
(C96). Significant agenda items during TCC56 included: the biennial
report of IMO's Integrated Technical Co-operation Committee (ITCP);
options for financing the ITCP in the future, given increasing
demand for its services; and the linkage of ITCP's activities to the
2005 World Summit Outcome. Significant agenda items during C96
included: resource and risk management; organizational change;
strategic planning; the voluntary IMO Member State audit scheme;
reports of the Maritime Safety, Marine Environment, and Technical
Cooperation Committees; annual reports by IMO's educational
institutions; IMO's relations with other organizations; observer
status for Non-Governmental Organizations; changes to the membership
of the Organization; and Kenya's proposal to create more diverse
geographic representation on the Council. The Bahamas and India
gave statements on the record to thank the United States Navy for
its efforts to protect merchant shipping off the Somali coast from
pirate attacks. END SUMMARY.

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TECHNICAL CO-OPERATION COMMITTEE SESSION FIFTY-SIX
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2. Chaired by Mr. Ben Owusu-Mensah (Ghana), TCC 56 was held from
13-15 June 2006 and mainly covered routine housekeeping matters.
However, USDEL met informally with members of the Secretariat,
including Mr. David Edwards, the Director of the Secretariat's
Technical Cooperation Division, to consider ways to increase USG
involvement in the ITCP and improve non-assessed funding.

3. DELEGATION INFORMATION. Delegations from fifty-nine Member
States participated in TCC. (Membership is open to all IMO member
states.) Two intergovernmental organizations and two
non-governmental organizations attended as observers. USDEL for TCC
56 consisted of Mr. Laurence Tobey, Department of State
(Representative), and Mr. Jeremy Cairl, U.S. Coast Guard
(Alternate).

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IMO'S INTEGRATED TECHNICAL CO-OPERATION PROGRAM (ITCP)
--------------------------------------------- ----

4. INTEGRATED TECHNICAL CO-OPERATION PROGRAM BIENNIAL REPORT. The
Integrated Technical Cooperation Program (ITCP) is the IMO's
assistance program for developing countries. The program exists to
enable member states to achieve compliance with IMO conventions.
The 2004-2005 ITCP report showed the highest outputs ever recorded,
both in terms of volume and the delivery rate, with global and
regional activities totaling some USD $13 million in 2005 alone and
reaching a total of USD $27 million for the two-year period. This
represents an increase of USD $15 million over the previous two
years, resulting in the delivery of 74 missions and 224 training
events with an estimated 7,367 participants. The Chairman urged
member states, international and regional organizations, and the
maritime industry to maintain and increase their financial and
in-kind contributions to the ITCP to support a variety of IMO
initiatives, including the Voluntary IMO Member State Audit Scheme.

5. FINANCING OPTIONS. The most involved discussion concerned
options for financing the future activities of the ITCP. The
Secretariat presented a paper warning that current financing

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arrangements, which depend on the surplus of the IMO Printing Fund
to subsidize the ITCP, could not be relied on in the future as the
primary source of funding for the ITCP. Increasing demands for
technical cooperation assistance, combined with the need to divert
resources to technical cooperation projects made necessary by
disasters such as the Asian tsunami, are likely to outstrip the
surplus generated by the Printing Fund's publications program in the
near future. The Secretariat's draft paper offered three options
for discussion to supplement the Printing Fund surplus (which would
continue to be used under all the options):

-- a Supplementary Assessment above and beyond the assessment
already levied on member states (Option A);

-- a Voluntary Contribution to be requested from member states
(Option B); or

-- priority for allocation of surpluses from other IMO funds (Option
C).

The Committee did not reach consensus on any of these options.

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Approximately 20 delegations spoke in favor of Option C, in some
cases suggesting additional sources of funding. The mandatory
assessment (Option A) received support from only two delegations,
while the Voluntary Contribution (Option B) received support from
only three delegations. Several delegations directly opposed the
mandatory assessment, while others expressed wariness that the
voluntary contribution option would soon evolve into a mandatory
contribution. The Secretariat paper also mentioned a possible
assessment on non-governmental organizations that have consultative
status with IMO, on the assumption that they represented shipping
industry groups that could afford to pay. Several delegations
questioned the wisdom of this, pointing out that the NGOs are
already providing important "in-kind" contributions to the ITCP. One
delegation proposed a fourth variant not supplied by the
Secretariat: a fee of USD ten

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to be collected from every ship to which IMO issues its registration
number, and a similar fee to be assessed on every company to which
IMO issues a new company identification number. In view of the lack
of consensus, the Committee recommended that the Council approve an
inter-sessional working group to further study the issue.

6. LINKING THE ITCP TO THE 2005 WORLD SUMMIT OUTCOME. The
Committee considered an Angolan paper (requested by the prior
session of the TCC) that set out a strategy to strengthen the
linkage between the ITCP and the UN's Millennium Development Goals
(MDGs). This paper contended that maritime transportation has a
direct impact on at least five of the MDGs, including the
eradication of extreme poverty and hunger; the promotion of gender
equality and empowerment of women; combating HIV/AIDS, malaria and
other diseases; ensuring environmental stability; and developing a
global partnership for development. (NOTE: Neither the papers nor
the discussions of this item contained any references to U.S.
"redline" items such as GDP-based aid targets or global taxes. END
NOTE.) The Angolan paper pointed out that small island developing
states are uniquely dependent on maritime transportation; the Least
Developed Countries depend on maritime transportation to access
overseas markets for their agricultural exports and for imports of
machinery, equipment and other goods; and employment in the shipping
industry for some developing countries, which are major suppliers of
seafarers, provides access to much-needed foreign currency. The
paper proposed that the ITCP's target should be reducing "maritime
poverty" (see below) by half by 2015. For example, the freight
costs for maritime transportation for developing countries are more
than double those paid in developed market-economy countries.
Angola called for ITCP to work to reduce the freight rate
differential between developed and developing countries by 50 per
cent by 2015.

7. South Africa presented a complimentary paper that defined
"maritime poverty." A state is said to be in maritime poverty if
its maritime activities or maritime resources are inadequate or
non-existent, and if its maritime transportation system falls below
existing standards and provides a hazardous marine environment in
which to operate. The paper points out that of the twenty poorest
countries in the world, ten of them are coastal states, and nine of
these are in Africa. Of the 49 least developed countries, 31 are
coastal states. In addition to providing a classification scheme to
quantify maritime resources (examples: ships, lighthouses, search
and rescue assets, pollution prevention, and maritime lawyers), the
paper also provided a basis for describing maritime poverty and
linking it with the poverty of a country in general terms, i.e.,
where a weak maritime transportation sector acts as a drag on a
developing country's economy.

8. The Angolan and South African papers received many favorable
comments from delegations including some from developed countries
and from the IMO Secretary General. The TCC agreed to establish a
Working Group to harmonize the documents to reach a clearer
definition of what needs to be done and to be more pragmatic,
recognizing that the objectives of the MDGs go well beyond the
mandate of the IMO.

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COUNCIL NINETY-SIXTH SESSION (C96)
-----------------------------------

9. Chaired by Mr. Johann Franson (Sweden), C96 was held from 19-23
June 2006. USDEL intervened on the following agenda items: resource
management; risk management; the Voluntary IMO Member State Audit
Scheme; the report of the Maritime Safety Committee (MSC); the
report of the Technical Co-operation Committee; the issue of piracy
off the coast of Somalia; and Kenya's proposal regarding the outcome
of Council elections and interpretation of Article 17 of the IM
Convention. USDEL met separately with Secretary General (SG)
Efthimios Mitropoulos (Greece) to extend an invitation to meet ADM

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Allen, the new Commandant of the U.S. Coast Guard at USCG
Headquarters; to identify ways to increase USG involvement in the
ITCP; and to discuss the long-term financial sustainability of the
ITCP.

10. DELEGATION INFORMATION. Delegations from all forty Council
Member States participated. In addition, forty-four Member States,
one Associate Member, one Non-Member, two intergovernmental
organizations, and twelve non-governmental organizations attended as
observers. The United States Delegation for C96 consisted of Mr.
Laurence Tobey, Department of State (Representative); Ms. Katherine
Johnson, U.S. Coast Guard (Alternate); and Mr. Jeremy Cairl, U.S.
Coast Guard.

11. MEETING WITH SG MITROPOULOS. USDEL met with the SG on 22 June
2006 and invited him to visit ADM Allen in Washington. The SG will
be traveling to NYC on 27/28 October for a UN meeting. ADM Allen
will send a formal letter of invitation to the SG. USDEL expressed
continued USG support for a variety of IMO's initiatives, including
increased participation in the ITCP. The SG confirmed his continued
support of a variety of security-related initiatives that the USG
supports. USDEL also explored a possible alternative financing
method (approaching private humanitarian organizations, particularly
those focused on Africa) to support the ITCP, and received the SG's
encouragement to prepare a formal proposal for a future session.

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MANAGEMENT ISSUES
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12. RESOURCE MANAGEMENT. Council reviewed IMO personnel matters,
including the 2005 cost of living survey; insurance for staff
members in the event of a nuclear, biological, or chemical terrorist
attack; restructuring of the Secretariat Subdivision for Pollution
Prevention (no budgetary implications); implementation of paternity
leave; and a new definition of fraud for internal controls purposes.
As instructed, USDEL joined consensus in accepting these reports.
IMO currently employs four American citizens in professional posts.
The IMO's External Auditor (the Comptroller General of India) gave
the IMO an "unqualified" audit. However, the audit did point out
that the United States owes some outstanding tax reimbursements to
IMO for U.S. taxes paid by U.S. employees. USDEL gave a brief
intervention pledging cooperation to resolve the matter and obtained
details from Secretariat personnel to facilitate resolution.
Council also considered routine reports on investments and
arrearages in dues and the 2006 Budget. USDEL, per instructions,
informed Secretariat staff that the U.S. assessed contribution for
2006 is expected to reach IMO in early summer. IMO is currently
projecting a deficit of GBP 265,000 based on expenditures through
April 30, 2006. The Secretary General gave a lengthy presentation
on the measures being taken to reduce, if not eliminate, the
deficit, and said that no increase in assessments would be sought
from member states. In view of the Secretariat's clear recognition
of the importance of eliminating the deficit, USDEL did not
intervene.

13. ORGANIZATIONAL CHANGES. IMO is preparing to replace its Human
Resources and Payroll systems, which are obsolete and difficult to
maintain. In doing so, IMO is following the experience of UNICEF,
which has successfully implemented the SAP Human Resources and
Payroll systems, reflecting a phased approach towards one common UN
system. In view of the upcoming refurbishment of the IMO building,
to begin in August 2006, IMO has postponed implementation of SAP
Human Resources and Payroll systems until the initial phase of
refurbishment has been completed. IMO is also preparing for the
adoption of International Public Sector Accounting Standards
(IPSAS). As instructed, USDEL conferred with Secretariat staff on
the implementation of IPSAS, still in the planning stages. IPSAS
will have to be proposed to the Council and then formally approved
by the IMO Assembly. At present, the Secretariat is planning for
IPSAS implementation in 2010, following decisions of the UN High
Level Committee on Management and the Task Force on Accounting
Standards and eventual approval by the IMO governing bodies.

14. The other principal organizational change in the near future is
the refurbishment of the IMO Headquarters Building, to begin in
August 2006 with planned completion in July 2007. Council consensus
on the project was consistent with Department's understanding that
this project is being well executed, with excellent cooperation
between the UK Government and the IMO. The UK Government is
covering 80 per cent of the renovation cost, and the IMO is covering
the remaining 20 percent. The contractor selected is the UK firm
Overbury.

15. STRATEGIC PLANNING. The IMO is in the first year of a five-year
strategic planning period. The plan provides for three strategic

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directions and uses 16 performance indicators. A working group on
strategic planning will meet in March 2007. Several delegations
commented that the data being generated by this plan will have much
broader application than IMO management, and will also be very
useful to the shipping industry and others interested in studying
shipping and its economic and social impacts.

16. RISK MANAGEMENT. The IMO established a Finance and Risk
Management Working Group in November 2005. The SG emphasized that
the "risks" to be managed are much more than financial risk. They
also include "strategic risks" (e.g., failure to keep pace with
technological innovation; over-regulation; damage to the
Organization's reputation among core constituencies due to any
failure to meet expectations); Operational Risks (e.g., risks to
business operations; resistance to change); and Hazard Risks (fire
and property damage; business interruption; terrorist attacks). The
SG also added what he called "failures of corporate governance,"
citing the collapse of the Enron Corporation. He linked this risk
to the failure of internal controls. The Secretariat paper called
for establishment of an independent, non-management body to review
risk and mitigation, and the creation of a risk-management working
group that would report to the Council. USDEL intervened briefly to
support this proposal.

17. THE IMO'S VOLUNTARY MEMBER STATE AUDIT SCHEME. The IMO has no
enforcement mechanism to require member states to follow IMO's
safety and environmental standards. Until now, enforcement and
implementation have been handled exclusively by the member states
without oversight. Approved by the IMO Assembly in November 2005,
the Voluntary Member State Audit Scheme (the Audit Scheme) is a new
mechanism by which international teams of qualified experts acting
on behalf of IMO will carry out on-site audits of member states'
ships and facilities to assess how effectively that member state is
implementing and enforcing relevant IMO Convention standards. The
auditors will provide the member state with feedback and advice to
improve performance. SG Mitropoulos takes a strong personal
interest in the implementation of the Audit Scheme. The SG took
many opportunities during the Council session to encourage Member
States to nominate as many qualified auditors as possible and to
volunteer to be audited. A number of delegations indicated their
progress toward readiness for audit. USDEL intervened to:

-- express support for the SG and Member States on the progress made
so far;

-- bring to the Council's attention the fact that the USCG has
nominated five auditors to participate in the Audit Scheme, and two
auditors to participate as trainers in the regional courses;

-- announce that the United States plans to be audited in 2008; and

-- put U.S. support on record for the future inclusion of
security-related instruments into the Audit Scheme.

All U.S. objectives were met concerning this issue.

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REPORTS OF THE COMMITTEES
-------------------------

18. The Council considered the reports of the Maritime Safety,
Legal, Marine Environmental Protection, and Technical Cooperation
Committees.

19. MARITIME SAFETY COMMITTEE (MSC). USDEL intervened to commend
the work of MSC81 toward adoption of new Safety of Life At Sea
(SOLAS) regulations that will provide for the U.S.-proposed Long
Range Identification and Tracking of Ships (LRIT). In addition, the
USDEL conveyed strong support for the expansion of the Global
Maritime Distress and Safety System (GMDSS), while also encouraging
the entry of new satellite providers into the market. At the same
time, USDEL spoke against any role for the International Mobile
Satellite Organization (IMSO) in implementing LRIT.

20. TECHNICAL COOPERATION COMMITTEE (TCC). Council considered the
report of the Technical Cooperation Committee, which had met the
prior week (see paras. 2-8). USDEL gave a brief intervention
commending the IMO's technical cooperation program, including both
the Committee and the Secretariat's Technical Cooperation Division,
highlighting the increase in assistance provided in the most recent
biennium, and offering to increase U.S. in-kind support to the
technical Cooperation Program pursuant to a Memorandum of
Understanding between IMO and the US Coast Guard originally signed
in 1998.

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21. IMO EDUCATIONAL INSTITUTIONS. Council considered and approved
reports from the IMO's World Maritime University; the International
Maritime Law Institute, and the International Maritime Academy.
USDEL made no interventions on these items.

22. EXTERNAL RELATIONS. Council considered the IMO's relations with
the UN, its subsidiary bodies and specialized agencies, and the
Joint Inspection Unit; relations with intergovernmental
organizations; and relations with non-governmental organizations.

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PIRACY
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23. The Council considered piracy off the coast of Somalia as an
external relations matter, taking note of the UN Security Council's
adoption of a Presidential Statement on Somalia that supported IMO's
Assembly and Council resolutions on this matter. The Presidential
Statement encouraged states with naval and air assets in the region
to take action to protect merchant shipping. During discussion,
USDEL intervened to reiterate U.S. support for IMO's efforts to
combat piracy off Somalia, and to note for the record that on
several occasions U.S. Navy warships have taken action against
pirates; one such intervention resulted in the capture of pirates
who are now awaiting trial in Kenya. Korea reported that one of its
fishing vessels has been held by pirates since April 2006, and
contrary to initial news reports, the crew has not yet been
released.

24. The Council also considered a Secretariat paper proposing the
appointment of an IMO "liaison office" to be located at UN
Headquarters in New York. The Secretariat contended that IMO
previously had such a representative and is now one of only four UN
agencies that does not have such a representative. However, the
proposal was poorly received and the Council called for a more
detailed proposal for the next session.

25. RELATIONS WITH NONGOVERNMENTAL ORGANIZATIONS. The Council
declined to grant observer status to the Stiching Chemical
Distribution Institute (CDI); the International Tar Association
(ITA); the Black Sea International Shipowners Association (BINSA);
and the European Marine Equipment Council (EMEC). The Council also
decided to defer the application from the Association of Diving
Contractors International (ADCI) pending further completion of their
application, and to defer the application of the Federation of
National Associations of Ship Brokers and Agents (FONASBA) pending
alignment with the UN's "One China Policy." The Council agreed to
allow the application of the International Association of Maritime
Universities (IAMU) to proceed for further screening by TCC and the
MSC.

26. MEMBERSHIP AND STATUS OF CONVENTIONS. Only states can be members
of the IMO. Membership now stands at 166 Member States and three
Associated Members. The Council revisited the application of the
Cook Islands for membership in its own right, rather than as a
non-self-governing territory of New Zealand. The Council endorsed
this application in 1999, but it must receive the approvals of two
thirds of the Organization's members for membership to be granted.
Although four more countries have approved the application since the
last Council session, the Cook Islands still needs 46 more
approvals. The United States does not recognize the Cook Islands as
a sovereign state. The U.S. position is based on the Cook Islands'
dependence on New Zealand for foreign affairs and for defense. The
observer delegation of the Cook Islands provided USDEL with a
document that purports to show independence from New Zealand in both
categories. (NOTE: This has been reviewed within the Department and
has been found to contain no new information. END NOTE.) The
Council also received a report on the status of IMO conventions that
are in the process of being signed, ratified, or brought into force.
The SG encouraged expeditious ratifications.

27. DATE AND PLACE OF NEXT COUNCIL SESSION. The Council decided to
meet in London November 6-10, 2006. Due to the refurbishment of the
IMO headquarters building, the U.K. Government will provide an
alternative site at no additional cost to the member states.

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KENYA CALLS FOR GREATER GEOGRAPHIC DIVERSITY IN THE COUNCIL
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28. In the most lengthy and spirited discussion of the session, the
Council considered a written document and oral intervention by Kenya
calling for a change in how elections to the Council are conducted.
The Kenyan delegation renewed remarks made after the Assembly voted

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the current Council into office in November 2005, at which time
Ghana and Nigeria lost their seats in Category C.

29. Kenya called for the Council to direct the Secretariat to
implement a new interpretation of Article 17 of the IMO Convention
to require broader geographic diversity among Council members in
Category C. Kenya contended that Article 17 provides that the
states elected in Category C should ensure the representation of all
major geographical areas of the world. Kenya's written submission
asserted that "the whole of West and Central Africa, South America,
and Eastern Europe were excluded." (NOTE: Informally, the Kenyans
told us that the African countries were most incensed that so many
small European countries had won seats on the Council at the same
time as Ghana and Nigeria lost; they mentioned Belgium as a country
that was too insignificant to warrant a seat. While it is true that
Kenya and South Africa were the only Sub-Saharan African states to
be elected in Category C, African Union members Algeria and Egypt
were also elected in that category. In South America, Chile was
elected to Category C, while Argentina and Brazil were also elected
in Category B. Venezuela was defeated for reelection to Category C.
In Eastern Europe, Russia was re-elected in Category A. The only
other candidate from the region was Poland, which failed to win
re-election to Category C. END NOTE.)

30. Kenya's presentations led to many proposed remedies, none of
which gained consensus. USDEL commented on one proposal which
suggested that Council membership should be granted to all members
of the Organization. USDEL noted that if this variant were adopted,
the Council would replicate the Assembly. Worse, there would be a
danger that the unwieldy size of the enlarged council would slow
down decision-making. With no firm consensus, and in light of
several delegations' comments that the Kenyan resolution was not
specific enough to be decided by a yes/no vote, the Council
eventually agreed that the Secretariat should undertake a study on
the issue of geographical representation in the Council, including a
comparison of the practices of other specialized agencies of the
United Nations, for submission to the next session of Council.

TUTTLE

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