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Mr. Mike O'Brien: I refer my hon. Friend to the answer given by the then Parliamentary Secretary my hon. Friend the Member for Exeter (Mr. Ben Bradshaw) to my hon. Friend the Member for Ealing, North (Mr. Stephen Pound) on 13 May 2002, Official Report, column 456W.
Lynne Jones: To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 18 June 2002, Official Report, column 293W, whether the term income refers to cash available from contributions to (a) the OPCW Secretariat and (b) the agreed budget of the OPCW; by when the major budgetary contributors to the OPCW budget finished paying their contributions in each of the last five years; (i) what the role of the Head of Administration in the OPCW is and (ii) from which country this post-holder came in 2001; if he will make a statement on the monthly statements made by Mr. José Bustani covering the operational programme; if he will make a statement regarding the use of the term unrealistic; whether the revised budget of the OPCW addresses the concerns over the previous OPCW budget proposals referred to; how many member states of the OPCW there were in each of the last five years; what the UK Government's estimate is of the frequency of inspections (A) proposed for the major budgetary contributors to the OPCW under the budgetary proposals referred to and (B) for the major budgetary contributors to the OPCW under the current budgetary proposals; and if he will make a statement on the action of the Conference of States Parties in the handling of the staff grading review referred to. 
Mr. Mike O'Brien: The term income referred to the income of the OPCW from the usual three sources: contributions from member states in accordance with assessments adopted by the Conference of States Parties; payments by declared possessors of chemical weapons in respect of costs incurred by the OPCW in verifying chemical weapons destruction; and interest on cash deposits held.
We do not have precise information on the timing of payments by member states. Our understanding is that all the major contributors paid their assessed contributions by mid-year in each of the past five years.
The Head of the Administrative Division of the OPCW supervises the work of the budget and finance branch, the human resources branch, the information systems branch, the procurement and support services branch and the training and staff development branch. The post was vacant throughout much of 2001: it was occupied by a US national early in the year, and succeeded in September by another US national.
The OPCW Secretariat, through much of 2001, issued monthly statements on income and expenditure. The Director-General included commentary on the operational programme in his statements to Executive Council meetings and in separate briefings of delegations through the year, where he outlined the cuts to the operational
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programmes he believed were needed to keep within anticipated income; and reported on progress in delivering what remained of the operational programmes. The Executive Council, on receipt of these reports, requested further authoritative information; requested specific proposals to deal with problems identified; expressed concerns about proposed cuts in operational programmes; authorised the use of all available cash to finance credible levels of verification activity and international co-operation and assistance.
The first draft of the 2000 budget proposed 12 per cent. growth over 1999; 2001 draft proposed 17 per cent. growth over 2000; 2002 draft proposed 24 per cent. over 2001; and the preliminary draft put to ABAF (Advisory Body on Administrative and Financial matters) in respect of 2003 proposed 29 per cent. growth over 2002. During these years, the norm in most international organisations was zero growth, and OPCW member states regularly made clear each year their belief that the draft budget should much more closely reflect the financial and political reality, so as to provide a sound basis for negotiations.
OPCW industrial inspection targets are in many respects randomly selected by the Technical Secretariat, so it is not possible to estimate with any accuracy the likely frequency of inspections to be faced in any country or group of countries. Previous budget proposals have provided an indication of numbers of inspections planned for the various categories of industrial facilities subject to declaration and inspection. The current budget proposal for 2003 under consideration in the Executive Council makes comparable projections based on current risk assessments which, if implemented, we estimate would tend to provide a more global coverage by the OPCW. If total inspection numbers remain broadly the same as in past years, as is currently forecast, this shift in emphasis could perhaps slightly reduce inspection frequency in 2003 for some of the major contributors, relative to what might have been expected from budget projections in previous years.
The Director-General, in August 1998, published a grading review conducted by an outside consultant, together with his intended actions in respect of the review, including his decision to implement, effective 1 January 1999, all the grade changes recommended. In October 1998, the Director-General noted to the Executive Council his understanding that some member states had reservations about the funding needed to implement the grading recommendations. In November 1998, the Conference of States Parties decided that the reclassification of posts involved should be discussed and decided by States Parties at a later stage, and requested the Director-General meanwhile not to implement the study. The Conference of States Parties in July 1999 reiterated its request to the Director-General not to implement the 1998 staff grading review, and requested him to initiate a new classification study once terms of reference were approved by the Executive Council. In June 1999, OPCW staff members filed complaints with the Administrative Tribunal of the International Labour Organisation, an action joined later by a total of 89 staff. The Tribunal concluded that, in August
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1998, the Director-General had had the competence for classification of posts, and that the re-classification announced should therefore have proceeded on 1 January 1999. The concern of many States Parties was that the basis of the grading review was open to question, the Director-General's decision to implement it was premature, and he had no budgetary authority to incur the significant additional costs that would arise.
Lynne Jones: To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 18 June 2002, Official Report, column 294W, if there is a role for member states of the OPCW in approving the transfers of funds referred to; and if he will make a statement on the (a) reasons given for the loss of confidence referred to and (b) late payments by member states of the OPCW. 
Mr. Mike O'Brien: The OPCW Financial Regulations provide for transfers of appropriated funds between programmes. Transfers of up to 10 per cent. of the original appropriation may be made by the Director-General, and reported to the Executive Council; transfers over 10 per cent. may be made only with the prior concurrence of the Executive Council. All transfers should be reported to the Conference of States Parties.
The loss of confidence in the former Director-General by a significant number of members of the OPCW Executive Council we believe arose largely from the financial and administrative concerns noted in the answer I gave to my hon. Friend on 18 June 2002, Official Report, columns 293294W. There was also a perception among many Executive Council members that the former Director-General took an unnecessarily confrontational approach in his dealings with the Executive Council, to the detriment of the effective functioning of the OPCW, and contrary to the supportive role envisaged in Article VIII of the Chemical Weapons Convention.
As at 31 May 2002, 19 States Parties had outstanding sums due in respect of 1997 assessed contributions, totalling about £114,000 or 0.5 per cent. of that year's budget. The figures for 1998 are 29 States Parties, £177,000 (0.5 per cent.); for 1999, 31 States Parties, £50,000 (0.2 per cent.); for 2000, 28 States Parties, £76,000 (0.3 per cent.); for 2001, 50 States Parties, £590,000 (1.7 per cent.). So far in 2002, to 18 June, 76 States Parties have paid their 2002 assessed contributions in full and another 13 have made part payments totalling £34.75 million (95.6 per cent. of the budget). 56 States Parties have yet to pay any of their assessed contributions for 2002, amounting to £1.625 million (4.5 per cent. of the budget). The UK pays in full and on time, and takes every opportunity to urge all States Parties to do likewise.
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