RUSSIA'S NUCLEAR REGULATOR STRIPPED OF INDEPENDENCE AND

UNCLAS SECTION 01 OF 02 MOSCOW 002777

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KNNP PREL KTIA ENRG RS
SUBJECT: RUSSIA'S NUCLEAR REGULATOR STRIPPED OF INDEPENDENCE AND
PERSONNEL; IAEA SAFETY COMMITMENTS NOT BEING MET

Ref A: Moscow 1507; Ref B: Dunkley-Young (EUR/PRA) and
Dunkley-Young (NRC) telcons and e-mails

Sensitive but Unclassified. Please protect.


1. (SBU) SUMMARY: Russian Ministry of Foreign Affairs officials
believe that Russia is no longer meeting some of its commitments in
the IAEA Nuclear Safety Convention and the IAEA Joint Convention on
the Safety of Spent Fuel Management and on the Safety of Radioactive
Waste Management. After Russia's nuclear regulatory body, the
Federal Environmental, Technological, and Nuclear Oversight Service
(Rostekhnadzor),was placed under the Ministry of Natural Resources
and Environment (MNRE) in May (ref A),two decrees deprived it of
its independent status, making its mandate to develop and enforce
regulations murky (ref B). Rostekhnadzor's effectiveness was
further reduced when fifteen percent of its Moscow-based nuclear
supervision staff were fired in August, with further cuts expected.
On September 5, PM Putin accepted the resignation of Rostekhnadzor
Head Konstantin Pulikovskiy, appointing Rostekhnadzor Deputy Head
Nikolay Kutin as Acting Director. Given Russia's plans to intensify
efforts to develop nuclear power, respected Russian nuclear experts
have begun to criticize Rostekhnadzor's evisceration. Insiders
speculate that Rostekhnadzor's nuclear regulatory arm may be split
off, recreating a separate nuclear regulatory agency. End Summary.


Notorious Pulikovskiy Finally Out; Who Will Be In and When?
--------------


2. (SBU) On September 5, PM Putin accepted Pulikovskiy's
resignation, putting an end to the rumors that had been swirling for
more than a month about Pulikovskiy's imminent dismissal. Although
one news source reported that Pulikovskiy left "at his own request,"
our MNRE sources highlighted his stormy relationship with MNRE
Minister Yuriy Trutnev. Pulikovskiy, a two-star general notorious
for shelling Grozniy while Commander of Russian forces in Chechnya,
began serving as chairman of Rostekhnadzor in December 2005.


3. (SBU) PM Putin elevated Rostekhnadzor Deputy Director Nikolay
Kutin to Acting Director. Kutin, 43 years old with a PhD in Law,
has been deputy head of Rostekhnadzor since November 2005. He
worked previously as assistant chairman of a district executive
committee in Saint Petersburg. Kutin has a strong reputation from
his work in the industrial safety arena. However, since he was not
made Director outright, Rostekhnadzor staff are not certain how long
he will be in charge.

Rostekhnadzor Stripped of Independence and Staff
--------------

4. (SBU) Pulikovskiy's dismissal is the latest installment in
President Medvedev's government reorganization affecting
Rostekhnadzor, which included consolidating GOR bodies working on
environment issues under the umbrella of the MNRE (ref A). Decree
724, signed May 12, stripped Rostekhnadzor of its independent
status. A second decree, "On the MNRE," changed Rostekhnadzor's
mission statement by deleting the language that had imparted its
status as the GOR's nuclear and radiation safety regulatory body.
Because the decree did not reassign this function to any other
government body, it left Russia, at least on paper, without a
designated nuclear safety regulatory authority.

5. (SBU) Rostekhnadzor staff has been whittled down. At the end
of August, approximately 12 employees were formally dismissed,
bringing Rostekhnadzor's Moscow-based nuclear supervision staff down
to 72 employees responsible for the regulatory oversight of Russia's
31 nuclear reactors. [Note: We have heard of no dismissals,
however, of Rostekhnadzor staff working at the nuclear power plants.
Rostekhnadzor's nuclear supervision staff in Moscow now stands at
less than half of the 150 employees it had in 2001. Although the
U.S. and Russian regulatory systems are set up differently, in
comparison, the U.S. Nuclear Regulatory Commission (NRC) has roughly
2000 employees at its headquarters in Maryland. The NRC regulates
104 U.S. nuclear reactors. End Note.] Many of the fired staff had
been trained by the IAEA to carry out the Service's enforcement
functions; their departure will result in a permanent loss of
capability. Rostekhnadzor's International Department was also
disbanded, with its functions transferred to the MNRE's
International Department, which has no experience in nuclear issues.
Rostekhnadzor contacts expect further personnel cuts, even as
Rosatom pushes to increase domestic nuclear power plant (NPP)
construction. They fear that the increased workload, decreased
staffing, and loss of expertise will make it extremely difficult for
Rostekhnadzor to execute its regulatory and inspection functions
effectively, even if its authority is re-established.

Russia not in Compliance with IAEA Conventions?

MOSCOW 00002777 002 OF 002


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6. (U) Article 8 of the IAEA's Nuclear Safety Convention, to which
Russia is a party, requires that "Each Contracting Party shall
establish or designate a regulatory body entrusted with the
implementation of the legislative and regulatory framework and
provided with adequate authority, competence and financial and human
resources to fulfill its assigned responsibilities. Also, each
Contracting Party shall take the appropriate steps to ensure an
effective separation between the functions of the regulatory body
and those of any other body or organization concerned with the
promotion or utilization of nuclear energy."

7. (U) Article 20 of the Joint Convention on the Safety of Spent
Fuel Management and on the Safety of Radioactive Waste Management
notes that "Each Contracting Party shall establish or designate a
regulatory body entrusted with the implementation of the legislative
and regulatory framework referred to in Article 19, and provided
with adequate authority, competence and financial and human
resources to fulfill its assigned responsibilities."

8. (SBU) Rostekhnadzor officials believe that Rostekhnadzor has
lost its mandate to develop and introduce regulations on nuclear
matters and to execute enforcement actions and the personnel to
fulfill its responsibilities. Although EST contacts report that
MNRE has not interfered to date with Rostekhnadzor's work, they note
that they have not yet tested the limits of their authority. They
have decided to wait for the first case where "disaster strikes" to
demonstrate the damage this realignment has caused.

9. (SBU) The Ministry of Foreign Affairs (MFA) is aware that
Russia is not meeting its IAEA Nuclear Safety Convention
commitments. EST LES was shown a memo in which DFM Kislyak informed
FM Lavrov in late June that, "Thus there is a situation in the
Russian Federation when there is no established independent
governmental body to regulate safety in the nuclear area, which
contradicts Russian commitments stipulated in the Nuclear Safety
Convention and the Convention on Safe Management of Spent Fuel and
Radioactive Waste." Lavrov's handwritten note on the memo stated
that he "agreed" with Kislyak's concerns and would address this at
"the Governmental level." (Note: We have seen no evidence that the
MFA has raised this issue. However, this week EST contacts began to
speculate that Rostekhnadzor, formed by the merger of three separate
agencies, may be split apart into its original agencies, including
recreating the separate nuclear regulatory agency formerly known as
Gosatomnadzor. The press has not yet carried this rumor. End
note.)

Russian Experts Criticize Rostekhnadzor's Reorganization
--------------

10. (SBU) A few Russian experts have begun to publicly criticize
in the Russian nuclear press Rostekhnadzor's move to the MNRE and
the corresponding degradation of its ability to perform its mission.
In an article published September 3, Viktor Sidorenko - considered
the patriarch of the Russian civilian nuclear industry and first
deputy chairman of Gosatomnadzor in mid-80's - stated that it is
impossible to develop nuclear energy extensively if the Russia's
regulatory authority is not independent. The pronuclear.ru news
website on September 9 carried an interview with former First Deputy
Minister of Minatom (and former Duma member) Valentin Ivanov. When
asked, "Can Rostekhnadzor reliably execute its duties in its
existing organizational structure and under the condition of
accelerated development of nuclear energy," Ivanov replied,
"Categorically no! The situation should be corrected. We need to
set all of the bells ringing if we do not want to damage nuclear
energy in the future. It is a necessity to restore and strengthen
Rostekhnadzor and the GOR is responsible for this."
Beyrle