NPT ENVOY AMBASSADOR SANDERS HEARS AUSTRALIAN

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000322

SIPDIS

NOFORN

STATE FOR T, NP/MNA, EAP/ANP AND NP/RA

E.O. 12958: DECL: 02/17/2015
TAGS: PREL AORC PARM AS IAEA
SUBJECT: NPT ENVOY AMBASSADOR SANDERS HEARS AUSTRALIAN
IDEAS TO PREVENT A THIRD TERM FOR IAEA DG ELBARADEI

REF: A. STATE 18228


B. 04 STATE 264699 (NOTAL)

C. 04 CANBERRA 2356 (NOTAL)

Classified By: POLCOUNS WOO LEE FOR REASONS 1.4 (B AND D).


1. (C/NF) SUMMARY: In a February 9 lunch with Australian
officials, Ambassador Jackie Sanders, Special Representative
of the President for the Nonproliferation of Nuclear Weapons,
discussed mainly IAEA matters, hearing Canberra's views on
the prospects of a third term for IAEA DG ElBaradei and ideas
to convince the Iranian leadership that its pursuit of
uranium enrichment was economically counterproductive.
Australian officials did not believe that the necessary 12
votes against ElBaradei could be found at the IAEA Board of
Governors (BOG) to deny him a third term, but that did not
stop them from speculating on ways to try to prevent his
re-election. Separately, Australian Safeguards and
Nonproliferation Office (ASNO) Director General John Carlson
(protect throughout) passed us his informal and uncleared
thoughts on the damage done to the NonProliferation Treaty
(NPT) and IAEA by the behavior of both the Iranian Government
and DG ElBaradei. Ambassador Sanders' consultations on the
NPT Review Conference (RevCon) reported septel. End Summary.



2. (C) Ambassador Jackie Sanders, Special Representative of
the President for the Nonproliferation of Nuclear Weapons,
had lunch with Department of Foreign Affairs and Trade (DFAT)
Arms Control Office Director David Mason and Australian
Safeguards and Nonproliferation Office (ASNO) Director
General John Carlson upon arrival in Canberra on February 9.
Saving their discussion of preparations for the 2005 NPT
RevCon (ref A) for the more formal discussions on February
10, Mason, Carlson, Sanders and her delegation focused on
IAEA issues, primarily IAEA DG Mohamed ElBaradei's intention
to seek a third term and related issues of Iran's
non-compliance with its IAEA safeguards. Carlson stated that
Australia strongly supported the two-term rule for UN
leadership, but in the absence of a contender for ElBaradei's
job, there was a "chicken and egg" problem. Many states did
not support him and would therefore support a challenger if
one came forward, but unless the incumbent left the stage, no
challenger would come forward. Consequently, states were
left with little choice but to vote for the incumbent.
Carlson commented that ElBaradei was a very bad manager and
morale throughout the IAEA staff was "appalling." Although
he acknowledged that the personnel in the DG's office were
very loyal to him, Carlson claimed no one below them was. He
related that both Deputy DG Pierre Goldschmidt and Technical
Safeguards specialist Ollie Heinonen had complained to him
about ElBaradei's poor management practices. He said relying
on the two-term rule would not be enough to end ElBaradei's
candidacy and he suggested "dredging up" the DG's failed
Technical Cooperation projects to help build support against
him. Carlson did not think there were 12 "nay" votes out
there among the Board of Governors (BOG) member states -- the
number required to deny ElBaradei a third term. It would
take a candidate from a G-77 country coming forward in order
to divide that group.


3. (C) Carlson told Sanders that an Australian candidate
would not be viable as a challenger to ElBaradei. OSD NP
Policy Officer Jake Mentz asked if that would still be the
case if an Australian official were to be "drafted." Carlson
replied that that could work only if ElBaradei had already
withdrawn his nomination. Carlson's personal opinion was
that FM Downer had never been a "serious candidate" to
replace ElBaradei, and Downer would have been even less
inclined to pursue the IAEA DG job after the Howard
Government's convincing re-election in October 2004. Mason
pointed out that, of the 35 members of the BOG, 18 came from
GRULAC, African or NAM countries, all of which had already
endorsed ElBaradei for a third term, so the numbers did not
appear to be there. Sanders responded that there had been a
time in the past when the numbers of ElBaradei non-supporters
were there, and the issue was not over yet. Carlson observed
that in a secret ballot, anything could happen. It might be
useful to put the word out in Vienna that ElBaradei could
fail. He thought several countries had doubts about some of
ElBaradei's recent multilateral initiatives that were seen as
self-serving.


4. (C) Regarding ElBaradei's role in Iran's violations of
its Safeguards agreement, Carlson asserted that Iran was
perverting and misinterpreting NPT Article IV as a "right" to
nuclear technology, yet ElBaradei's lengthy moratorium idea
while new guidelines on peaceful nuclear technology transfers
were being worked out was not practical. Even Australia had
interests in preserving the option to enrich uranium, in
contrast to the separate moratorium idea proposed by the U.S.
Although Australia was interested in limiting research
projects in some manner, Carlson saw problems with
definitions such as limiting research in "regions of
tension." That could mean that Japan would not have the
right to nuclear research if NorthEast Asia were declared
such a region.


5. (C) Asked about U.S. efforts to curb nuclear technology
transfers in the G-8 context, Sanders noted the good news
that more countries were recognizing there was a problem with
Article IV that needed to be addressed. ElBaradei recognized
it too. Carlson mentioned that he had sat in on GOI lead
nuclear negotiator Rohani's "bombastic" meeting with FM
Downer in August 2004, during which Downer had "pulled no
punches." Carlson thought it a "fairly basic rule" that a
country had to be in good standing with respect to its NPT
Article II and III obligations before being allowed peaceful
technology transfers under Article IV. Since Iran was in
clear violation of Articles II and III, how could it claim
benefits under Article IV? He suggested one argument that
might make headway to push the Iranian leadership away from
enrichment could be by demonstrating how much it was costing
them economically, both by the diversion of scarce resources
to the enrichment program and in lost trade and trust.


6. (C/NF) The next day, ASNO DG Carlson (protect) passed to
us for informal USG consideration a document he had written,
but had not yet cleared through his interagency, which laid
out a legalistic case that could be made against both Iran
and IAEA DG ElBaradei. (NOTE: Carlson's background is an
international lawyer. He is the chair of SAGSI (I forget
what the acronym stands for),the technical safeguards review
body at the IAEA. FM Downer also nominated him a year ago as
the potential replacement for DDG Goldschmidt, although both
Downer and Carlson fully understand that there is little
chance that ElBaradei, should he stay on for a third term,
would select Carlson as his Deputy. End Note.)

BEGIN TEXT OF INFORMAL CARLSON DOCUMENT
--------------


7. (C/NF) IRAN - THE CASE AGAINST ELBARADEI


-- Legitimacy is important to the Iranian regime. The
regime constantly emphasises Iran's "legal right" to pursue
uranium enrichment. Loss of legitimacy would be a serious
blow - it would undermine Iran's international support, and
make the Iranian public aware that the regime is breaking
international law.

-- It is beyond any argument that Iran is in non-compliance
with its safeguards agreement - and with the NPT. A
non-compliance finding by the IAEA Board would strip Iran of
legitimacy. This is why Iran has fought so hard against such
a finding - although the Iranians say they "do not care" if
the case is referred to the Security Council, their efforts
to avoid this indicate otherwise.

-- The IAEA Statute requires the DG to transmit the Board
any non-compliance report from the IAEA's inspectors. This
implies a judgment from the inspectors and/or the DG that the
behavior concerned constitutes non-compliance.

-- The Iranian situation was complicated by the requirement
in the IAEA Statute for non-compliance to be reported to the
Security Council, and the belief by some that if that
happened Iran would cease cooperation with the IAEA, or even
leave the NPT. Hence the opportunity was presented for the
Iranians to introduce plea-bargaining - until now an alien
concept in IAEA practice.

-- A number of parties - including ElBaradei as well as the
EU3 - share the view that referring Iran to the Security
Council would achieve nothing, because of the prospect of an
impasse amongst the P5, and therefore that negotiations with
Iran should be attempted outside the Security Council.
Unhelpfully, ElBaradei himself sought to insert himself into
the negotiation process, attempting to broker a deal with the
Iranians (at the same time, the IAEA's website was touting
ElBaradei's merits for the Nobel Peace Prize).

-- The EU3 and ElBaradei approach runs counter to the IAEA's
role as set out in the Statute - if the IAEA comes across a
matter that is within the Security Council's
responsibilities, the matter is to be referred to the
Council. That might result in a negotiating process outside
the Council, as in the case of the DPRK, but this is for the
Council, not the IAEA, to manage.

-- If ElBaradei had shown leadership on the non-compliance
issue by expressing the judgment that Iran's conduct was
non-compliance, the Board would have found it very hard to
find otherwise. Instead, ElBaradei took the view this is a
"political" decision, to be made by the Board. The effect
was to turn a largely technical issue into a political one,
politicizing the Board. This played nicely into the hands of
Iran which had encouraged the formation of a NAM chapter in
Vienna, to present a "NAM position" in the Board.

-- ElBaradei's reports to the Board appear to have been
composed with the object of stalling a non-compliance
finding. As well as avoiding the "N"-word, there were
extraordinary statements like "there is no evidence that the
... undeclared nuclear material and activities ... were
related to a nuclear weapons programme", confusing the
question of the standard of proof for a non-compliance
finding.

-- Iran's success in avoiding a non-compliance finding has
emboldened it to press on with the nuclear program. It seems
likely the situation will end in confrontation through the
Iranians' failure to understand the strength of opposition to
Iran becoming a nuclear power. Meanwhile, the handling of
the non-compliance issue has seriously damaged the integrity
and credibility of the IAEA's processes. A change is needed
in the IAEA leadership, to return the Agency to its technical
function.

END TEXT.


8. (U) Renick Smith, Special Advisor to Ambassador Sanders,
Dr. Elizabeth Murphy from the Office of Multilateral Nuclear
Affairs, Special Assistant for Nuclear Nonproliferation
Policy John Mentz from the Office of the Secretary of
Defense, and Polmiloff accompanied Ambassador Sanders to the
lunch.


9. (U) Ambassador Sanders and the delegation have cleared
this cable.
SCHIEFFER