NPT ENVOY SANDERS DISCUSSES IRAN WITH AUSTRALIAN

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000323 SIPDIS STATE FOR T, NP/MNA, EAP/ANP AND NP/RA E.O. 12958: DECL: 02/17/2015 TAGS: PREL KNNP AORC PARM AS IR IAEA SUBJECT: NPT ENVOY SANDERS DISCUSSES IRAN WITH AUSTRALIAN OFFICIALS REF: A. STATE 18228 ¶B. 04 STATE 219260 ¶C. CANBERRA 322 Classified By: POLCOUNS WOO LEE FOR REASONS 1.4 (B AND D). ¶1. (C) SUMMARY: At a February 10 luncheon with senior Australian officials hosted by the DCM, Ambassador Jackie Sanders, Special Representative of the President for the Nonproliferation of Nuclear Weapons, discussed how to handle Iran's nuclear programs at the IAEA. GOA officials were candid in their assessments of the high probability that the EU-3 talks with Iran would fail, that Iran's intimidation tactics had been successful with several states at the IAEA, and that a strategy had to be pre-prepared for the moment when the EU-3 and Iran reached an impasse in order to get Iran's non-compliance reported to the UNSC. Ambassador Sanders' consultations on the NPT Review Conference (RevCon) reported septel. End Summary. PARTICIPANTS -------------- ¶2. (C) The DCM hosted a lunch for Ambassador Jackie Sanders, Special Representative of the President for the Nonproliferation of Nuclear Weapons, that included Australian Department of Foreign Affairs and Trade (DFAT) First Assistant Secretary for International Security David Stuart, Ambassador At-Large for Counterterrorism Les Luck, Australian Ambassador to Vienna (UN/IAEA Mission) Deborah Stokes, and Australian Safeguards and Nonproliferation Office (ASNO) Director General John Carlson. Renick Smith, Special Advisor to Ambassador Sanders; Dr. Elizabeth Murphy from the Office of Multilateral Nuclear Affairs; John Mentz, Special Assistant for Nuclear Nonproliferation Policy from the Office of the Secretary of Defense; PolCouns and Polmiloff also attended the lunch. FOCUS ON IRAN -------------- ¶3. (C) Having completed NPT RevCon preparation discussions that morning (septel),the DCM suggested focusing mainly on Iran over lunch. Ambassador Sanders led off, expressing her appreciation for the GOA's practice of keeping its policy disagreements with the USG on the NPT, IAEA or other issues in private channels, while generally supporting USG initiatives publicly in multilateral fora. She asked for Australian tips on approaching New Zealand (her next stop on her swing through Asia) for support at the NPT RevCon. Stuart assessed that the Kiwis did understand the need for counterproliferation in addition to disarmament, highlighting Wellington's cooperation on a variety of issues within the Pacific Island Forum (PIF),intervention in the Solomon Islands in 2003, and the Proliferation Security Initiative (PSI). Luck offered that the best pitch to make to New Zealand would be couched in terms of collective security. Iran and others had to be seen no longer as proliferation threats in order to enable the disarmament of Nuclear Weapons States (NWS) that New Zealand sought under the NPT. Sanders stated that, from her experience at the last two IAEA Board of Governors (BOG) meetings in Vienna, New Zealand had been good in standing up to Iran. Stokes added the caveat that that was true until the GOI had threatened the Kiwis with the loss of trade contracts. Through its intimidation tactics, Iran had met with similar success in softening the stances of Japan, South Korea and China, and had "tried it on" with Australia, but without success. ¶4. (C) Stuart wanted to focus on what would happen when the EU-3 negotiating effort with Iran foundered or if the talks sputtered along inconclusively. He found the latter scenario worrying, since Iran had been "cheating on the margins" for many years. "We see no evidence that the Iranians are trying to get a high price for agreeing to a permanent suspension of enrichment," he elaborated, "rather, they are seeking a high price for continuing uranium enrichment -- with some sort of caveat." The GOA saw the Iranians as "getting themselves into position to be able to make nuclear weapons on short notice." "We agree with you that the Iranians want a breakout capacity, and they aren't far from it," Stuart concluded. Carlson pointed out that some GOI officials had gone so far as to declare that they already had the capacity to build nuclear weapons, although Australia believed this was untrue. Stuart added, "we know the talks are foundering," yet all the EU-3 states had a lot at stake in seeing the diplomatic process continue. He and Carlson wanted to have a pre-set strategy prepared for what to do when the impasse was reached and Iran again claimed its "right" to produce the full nuclear fuel cycle. ¶5. (C) Ambassador Sanders said the USG fully shared Australia's skepticism, noting that Washington had never wanted to go down the EU-3 path; Iran should have been reported to the UNSC by the November 2003 BOG. She noted that UnderSecretary Bolton would be meeting with G-8 counterparts the following week and would discuss Iran. During bilateral British-Australian political-military talks the previous day, Stuart commented, he had asked his British counterpart, DG for Defence and Intelligence David Richmond, these same questions, but Richmond had not responded directly. Stuart thought the EU-3's goal was to string the talks out until they could convince the Iranians to "bite the bullet" and stop their illicit nuclear programs, but everyone knew the Iranians had systematically cheated for 18 years. In addition, he said Richmond had not wanted to consider the idea of continuing four-way talks in Vienna with the U.S., Canada and Australia. Richmond had said he would ask when back in London, but it was clear he was not interested. Sanders was not surprised; she assumed the Brits did not want to be challenged on the risk they had taken in the EU-3. Luck mentioned that he also had heard that the EU-3 talks were "poised to take a serious dive," and that new evidence was coming to light that Iran had been cheating, but he did not have precise information. Stuart stated that he had asked Richmond and other EU-3 counterparts whether any of the EU-3 (Germany in particular) were seeking to lower the bar on what would be an acceptable outcome from the GOI, and he had gotten different answers. Mentz offered that the Germans had made guarantees to the USG that they would not lower the bar. Stokes commented that the French thought they could solve the problem commercially by making nuclear power investments and providing reactors to Iran. Meanwhile, Stuart observed, Russian actions had improved: the GOR was now telling Tehran it had to permanently suspend its enrichment efforts before Russia would provide the fuel. Stokes said she had found the Russians unpredictable, and Carlson thought there was a split between the MFA and other ministries in Moscow over what to do about Iran. The GOR as a whole would want to see the EU-3 effort fail clearly before reporting Iran to the UNSC, he averred. ¶6. (C) Stuart reported that his office had used the USG demarche (Ref B) from October about what the UN Security Council could do vis-a-vis Iran before applying sanctions as the basis for a policy options paper for Foreign Minister Downer. One option, should the intelligence "firm up," he related, would be to go public with Iran's misdeeds, but that strategy, post-Iraq, was "fraught." He agreed with a process of incremental steps from Presidential Statements to resolutions, appealing to Iran to comply with its obligations. The DCM thought it might be good to produce a documentary laying out Iran's history of supporting Hizbollah and other terrorists, and then ask viewers to consider what it would mean to have a nuclear-armed Iran. Luck agreed -- so long as the USG itself did not make the documentary. He noted that much of the world, and particularly Europe, still saw the U.S. as a biased party with respect to Iran due to the legacy of the 1979 Embassy hostages situation. There was consensus around the table that part of the EU-3 motivation to take on Iran was "to teach the USG how to do diplomacy," but Stokes asserted that the Europeans "had no idea how hard it would be." Sanders wondered whether it would take an egregious error by the Iranians to actually get them reported to the Security Council. Stuart stated, "We cannot be held hostage to waiting for them to make a mistake." Sanders noted that any nation could take an issue that threatened international peace and security to the Council. Stuart thought that would be difficult in the absence of a clear trigger. He added that the issue would likely come to a head again later in 2005, just as it was time to select a new IAEA DG. ¶7. (C) If the EU-3 were to state in Vienna that Iran's actions needed to be reported to the UNSC, that would be in the spirit of what they had agreed to in G-8 statements, Stuart pointed out. Ambassador Stokes lamented that she had seen enough of the EU-3's watering down of resolutions to know that they could not be relied upon for a solution. Stuart expressed his frustration with EU practices in general, noting that all along, the goal had been to keep the Western countries united vis-a-vis Iran. Procedurally, however, it was now very difficult to keep the EU members from completing all their negotiating together before they talked to other states, by which time their EU position could not be changed. Iran had responded in the past to a united Western position, but that was now much more difficult. Sanders suggested that there was no need to get bogged down on procedures: nearly everyone, including those on the IAEA Secretariat below ElBaradei, agreed that Iran was doing SIPDIS something bad. It was time to focus on doing something about it. Stuart remarked that the Brits needed the breakdown in EU-3 talks to wait until after the expected UK federal elections in May. ¶8. (C) Luck encouraged the USG to do all it could to go to and beyond the EU-3 to develop common thinking and responses in preparation for action at the UNSC. All agreed with Carlson and Sanders' comments that it was short-sighted of states which had succumbed to Iranian intimidation about losing oil and gas contracts, or states which still insisted on disarmament as the be-all of the NPT. How would a nuclear-armed Iran make either of those situations better? This was why support for USG goals for handling Iran and for the NPT RevCon had to be sought at the highest levels in capitals, Sanders concluded, to get beyond the narrow "CD Mafia" type of mindset. ¶9. (U) Ambassador Sanders and the delegation have cleared this cable. SCHIEFFER