IAEA: NOVEMBER 2008 BOARD WRAP-UP

UNCLAS UNVIE VIENNA 000639



STATE FOR IO/T, ISN,

ISN/MNSA - RAGSDALE, COCKERHAM, DAVIS

- ISN/NESS - STRATFORD, BURKART

- ISN/RA - NEPHEW, GROMOLL

DOE FOR S-1, S-2

- NE - MCGINNIS, CLAPPER, HERCZEG, HAN

- NA 2O - BAKER, WITTROCK

- NA24 - LERSTEN, SCHEINMAN, GOOREVICH, BRUNS

NRC FOR OIP - MDOANE, JSCHWARZMAN

ROME FOR USMISSION TO FAO



SENSITIVE BUT UNCLASSIFIED

SIPDIS



E.O. 12958: N/A

TAGS: AORC, KNNP, IAEA, ENRG, TRGY, IR, KN, SY



SUBJ: IAEA: NOVEMBER 2008 BOARD WRAP-UP



Ref: A) UNVIE 633 B) UNVIE 637 C) UNVIE 635 D) UNVIE 598 E) STATE

121438



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SUMMARY

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1. (SBU) The November 27-28 Board of Governors meeting focused on

nuclear verification in Syria and Iran (refs a-c) and approval of

the Technical Cooperation (TC) program cycle for 2009-2011,

following a contentious agreement in the preceding Technical

Assistance and Cooperation Committee (TACC) on the disposition of

the Syrian feasibility study project (septel). Discussion of DPRK

was largely a placeholder, pending Six Party agreement on the

verification protocol, with Board members expressing support for the

IAEA's verification role. In addition, the Board approved Draft

Safety Requirements, a funding extension for physical security at

the Vienna International Center, and an Additional Protocol for

Zambia. Under Any Other Business, the Board Chair's proposal for an

open-ended Working Group on 20/20 recommendations met with

nit-picking on the part of both OECD and G-77 countries that

underlined the need for member state input and setting parameters

for the process. Only Japan announced that it would make a

substantial contribution to the Safeguards Analytical Laboratory, an

issue parenthetically inserted on the agenda under AOB, and Norway

announced its contribution to fund the IAEA fuel bank. The UK,

Canada and, at our suggestion, Afghanistan also advocated the

implementation of DG term limits under AOB in keeping with UN best

practice and in light of the upcoming DG election. On the margins

of the Board, South Africa officially delivered its nomination of

Governor Minty for DG, and campaign pitches on behalf of Minty and

Japanese Ambassador Amano were made under AOB. End Summary.



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Agenda Item 1: DG Opening Remarks

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2. (U) In addition to Iran (ref b),Syria (ref c) and DPRK (para 11)

verification items, Director General ElBaradei provided general

comments on the TC program for 2009-2011. He noted that human

health remains the single largest TC sector, representing 18 percent

of the program, and food and agriculture programs have also

increased. The DG highlighted the Agency's role in cancer

prevention (44 countries requesting assistance under the Program of

Action for Cancer Therapy (PACT) and the launch of a WHO/IAEA Joint

Project on Cancer Control) and Mexico's successful use of the

Sterile Insect Technique. The Agency further anticipated a

four-fold increase in number of TC projects for 2009-2011 focused on

introduction of nuclear power. Assistance in this domain covered

the entire process to ensure solid infrastructure with high levels

of safety, security and non-proliferation. The DG noted the Draft

Safety Requirements and an Integrated Regulatory Review Service

Mission in Spain that incorporated, for the first time, a security

component. Under nuclear verification, he observed that Zambia's

conclusion of an Additional Protocol (AP) would bring the number of

APs in force to 88, little more than half of the states with

Comprehensive Safeguards Agreements (CSAs.)



3. (SBU) The DG also made some pointed remarks on the Agency's

verification process and the Safeguards Analytical Laboratory (SAL).

He noted the obligation to assess the veracity of information

provided to the IAEA, and stressed the need for full cooperation and

transparency from the State concerned given the Agency's limited

legal authority. He reiterated assurances as to the anonymity of

environmental samples sent to the Network of Analytical Labs but

advised that the Agency could not independently validate results in

some cases. ElBaradei used this as a pitch for refurbishing SAL at

an estimated cost of 35 million Euros. With only a two million Euro

pledge from Japan received so far, the "ball is in your court," he

told Member States. He further noted that the Agency relied on

Member State and commercial satellite imagery only as an auxiliary

source to corroborate other information. (Comment: Although the DG

made these comments in a general vein, they were clearly related to

the Syria verification case; see ref c. End Comment.)



4. (U) Finally, the DG reported that 4.5 million Euros of the 2006

cash surplus had been secured for the Agency-Wide Information System

for Program Support (AIPS). The remainder of the 10 million Euros

needed for the first stage of AIPS would be sought from

extra-budgetary resources and savings.



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Agenda Item 2: TACC Report

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5. (SBU) Board Chair Feroukhi began the discussion of the report of

the Technical Assistance and Cooperation Committee (TACC) with a

plea that the Board not re-open the agreement on approval of the

2009-2011 TC program, which had been the subject of laborious

negotiations over the disposition of the Syrian feasibility study

project in the November 24-26 TACC (septel). Only the EU, U.S. and

Pakistan on behalf of the G-77 made substantive comments, and the

Board approved the TACC report by consensus.



6. (SBU) France delivered the EU statement, noting that collectively

it was the top contributor to TC and supported OIOS recommendations,

including on Country Program Frameworks, which significant TC

recipients have not completed. The EU underlined the need for

guiding principles for TC to ensure the consistency of nuclear power

projects, in particular, linkage to the Milestones document and

other benchmarks as well as transparency in procurements for

"umbrella projects," comments clearly aimed at the Syrian

feasibility study proposal. The EU also called on states embarking

on nuclear power to adhere to nuclear safety and security

conventions. The U.S. statement likewise emphasized that nuclear

power projects should track the Milestones document. The U.S.

further urged timely implementation of OIOS recommendations on

evaluation of TC activities, and greater internal coordination

within the Secretariat on safety, security and nonproliferation.



7. (SBU) Pakistan stressed the great importance G-77 members

attribute to TC assistance as the main vehicle for nuclear

technology transfer to the developing world, and the need for

assured, predictable and sufficient funding, as mandated by the

General Conference. Also reflecting the contentious TACC debate on

the Syrian project, the G-77 warned against interference in TC or

micromanagement of the Secretariat, and concluded that any

"political conditions" placed on TC weaken and undermine the

credibility of the Agency.



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Agenda Item 3: Draft Safety Requirements

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8. (U) The Board approved the Draft Safety Requirements: Safety

Assessment for Facilities and Activities (GOV/2008/54) by consensus

with supportive interventions by Switzerland, South Africa, Spain

and, under Rule 50, the Republic of Korea highlighting the

importance of the Agency's work on safety standards. South Africa

noted that the safety requirements provide an excellent guide for

Member States and contribute to enhancing the safety and security of

nuclear facilities. Spain welcomed the draft safety requirements

but questioned how the 2015 safety restructuring plan and the

iteration of new safety standards would affect these existing safety

guides.



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Agenda Item 4: Funding for Physical Security

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9. (U) The Board approved the extension of funding for physical

security requested in GOV/2008/58 with a number of Board members

(including the U.S.) registering dissatisfaction with the slow pace

of security upgrades at the Vienna International Center. (Note: The

UN Office in Vienna (UNOV) has overall direction of the project. End

Note.) Cuba and Pakistan complained that such projects had been

"imposed upon them" in the past and requested more information. DDG

for Management David Waller outlined the reasons for the delays and

noted that a series of briefings for Member States over the course

of the project had been held, with another briefing planned in

coming weeks. On the margins, he welcomed our criticism of UNOV as

helpful to his effort to move the project along.



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Agenda Item 5: Conclusion of Safeguards Agreements, APs

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10. (U) The Board authorized the conclusion of an Additional

Protocol with Zambia. Cuba, speaking on behalf of NAM, took note of

Zambia's decision to enter into an AP. Australia warmly welcomed



Zambia's decision and encouraged all states to conclude APs, which

strengthen safeguards and provide assurances as to the absence of

undeclared nuclear material and activities. Australia noted that

Comprehensive Safeguards Agreements together with APs are now the

established safeguards standard. South Africa regretted that 30

non-nuclear-weapon States party to the NPT had not yet brought a

safeguards agreement into force, and that more than 100 states have

not concluded an AP. The Agency should be vested with the necessary

verification tools, South Africa concluded, and it is incumbent on

all States to provide all the support and assistance required to

fully implement its verification mandate.



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Agenda Item 5b: DPRK

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11. (SBU) In his opening statement to the Board, the Director

General made noticeably short remarks on DPRK. He updated the Board

members that the Agency had resumed monitoring and verifying the

shutdown status of the Yongbyon nuclear facilities, including the

reinstallation of the IAEA's containment and surveillance equipment.

In a departure from his previous statements, the DG did not update

the board on the status of disablement, i.e. the status of fuel

discharge, but noted only that the Agency "has been monitoring

disabling activities." He added that he remained hopeful that

"conditions will be created" for the DPRK to return to the NPT and

for the Agency to resume the implementation of comprehensive

safeguards. The DG did not raise the issue of DPRK's NPT status,

which he posited to Board members in June and September.



12. (SBU) The Six Party members present -- China, Japan, Russia, and

the U.S., with South Korea speaking under Rule 50 -- delivered

statements, as well as France on behalf of the EU, Australia,

Canada, New Zealand, Malaysia, Switzerland, Egypt, the Philippines,

and South Africa. Thailand also spoke under Rule 50. Six Party

Talks received broad support as did an enhanced role for the IAEA in

verification. The EU, Japan, and Canada joined the U.S. in reminding

Board members that all states must abide by UNSCR 1718.



13. (SBU) China spoke first, recalling the significant progress made

by the Six Party framework and announced the December 8 Head of

Delegation (HOD) meeting with a view to advancing to a new phase in

the process. Russia reaffirmed the importance of the 2005 Joint

Statement, and hoped disablement would be concluded as soon as

possible. Russia also noted that verification must include IAEA

specialists, due to their experience in this area. Japan observed

that North Korea's intentions remain unclear in the talks, and cited

a November 12 statement by a DPRK official that expressed a negative

position on sampling. Japan also cited the IAEA's significant

contribution to the denuclearization of North Korea. South Korea

acknowledged the ups and downs of the process, but looked forward to

the December 8 HOD meeting to establish a verification mechanism.

South Korea stressed the essential role of the IAEA in

verification.



14. (SBU) Like-minded countries looked forward to continued progress

through the Six Party framework. New Zealand and Canada were

reassured disablement was once again continuing. Australia and the

Philippines called for a timetable for completion of disablement

measures and for the conclusion of a verification protocol. The EU

and Australia expressed concern over the slowdown in fuel unloading

in recent months.



15. (SBU) The Philippines stressed the critical role of the Six

Party Talks to achieve a peaceful solution to the nuclear issue in

North Korea. Switzerland noted that the IAEA was not part of the

Six Party talks and reminded Board members that the IAEA requested

clarity on DPRK's NPT status. Switzerland raised the U.S.-DPRK

verification agreement announced on October 11, calling it an

"encouraging" development, but was concerned about the provision of

access to undeclared sites being granted by mutual consent.

Switzerland appealed to North Korea to rejoin the NPT. Under Rule

50, Thailand reaffirmed its full support of the Six Party process

and advocated confidence building measures for continued dialogue

and diplomacy.



16. (SBU) Board newcomers Egypt and Malaysia, which do not usually

speak under the DPRK item, delivered positive statements supporting

the Six Party Talks, and stressing the IAEA's essential role in the

verification process. Egypt further requested that the Six Parties

proceed in a way that "will strengthen the nonproliferation regime."

Malaysia noted its appreciation for China's role as Chair of the

Talks.



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Agenda Item 6: Any Other Business; 20/20

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17. (U) Opening the discussion of AOB, Board Chair Feroukhi

summarized her informal consultations with Member States on

follow-up to the Report by the Commission of Eminent Persons (CEP

Report). She noted no objections to her proposal of forming

open-ended "cluster groups" but little enthusiasm either (ref d).

She emphasized that both the CEP Report and the Direct General's

Background Report on 20/20 could serve as useful resources, but that

Member States would decide which issues to pursue. Feroukhi

entrusted stewardship of the process to Board Vice Chair Kirsti

Kauppi of Finland.



18. (SBU) Pakistan (speaking on behalf of the G-77) greeted the

announcement with cautious optimism. France, Canada, India, the

U.S. and New Zealand raised questions about the parameters of the

process, the anticipated outcomes, time frames, the structure of the

debate, etc. Malaysia asked that financing technical cooperation be

a specific objective. Chair Feroukhi eventually grew frustrated

with what she characterized as the negative tone of the statements

and exhorted Member States to be more "enthusiastic." She signaled

her intention to continue the process she had proposed and then

closed further debate.



19. (SBU) Comment: Private comments to Mission staff by DG ElBaradei

and EXPO Chief Cserveny revealed Secretariat appreciation for the

U.S. statement, which had been more cooperative and thoughtful than

statements by other like-minded Members. ElBaradei, clearly

disgusted by the nit-picking tone of some interventions, appealed

for U.S. leadership going forward. If we do not set a tone and

direction for this process, the DG counseled, the divisions inherent

in the IAEA membership will doom the effort to modernize the

Agency's agenda and operations.



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AOB: SAL, RANF and Other Issues

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20. (SBU) There was some consternation on the part of Board members

who resented the fact that the Secretariat included a reference to

an information report on SAL (GOV/INF/2008/15) under Any Other

Business in parentheses, seeing this as a possible effort by the

Secretariat to claim a Board imprimatur for Secretariat plans

regarding SAL (by appearing to have prompted a Board review),when

in fact, many Board members still have questions as to the way

forward on SAL. As it turned out, only Japan addressed the proposed

SAL upgrade and stated it was considering a "substantial

contribution" to the project. Japan expressed appreciation for the

Secretariat's continuing work, welcomed consultation with Member

States, and hoped that plans would proceed in a timely manner.

Malaysia announced the establishment of a new analytical lab, which

it hoped could be added to the IAEA network.



21. (U) Russia announced that it would be making a contribution to

the Nuclear Security Fund (1.5 million USD in 2010, one million USD

annually 2011-15),highlighting its commitment to combat trafficking

in nuclear materials. Norway announced its contribution of 5

million USD to the proposed IAEA-administered International Fuel

Bank. The U.S. welcomed Norway's contribution, and noting its

commitment of 50 million USD to the project, encouraged discussion

of a concrete proposal at the March Board. The U.S. also welcomed

Russia's financial contribution to Nuclear Security and Japan's

announcement of a January 26, 2009 conference on fuel assurances.

Privately, UK Del informed us that if the Secretariat advances an

agenda item on fuel assurances for March 2009, the UK would in

parallel host a conference on its enrichment bonds concept and

related proposals.



22. (U) The EU announced an upcoming nuclear energy conference, and

Malaysia is also sponsoring an international conference on nuclear

energy partnerships.



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AOB: DG Race / Term Limits

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23. (SBU) South African Governor Minty, accompanied by a SAG

Minister, held a news conference on the margins of the Board to mark

the official submission of his candidacy by South Africa. Under

AOB, Zimbabwe, as African Union spokesman, announced the first of

its kind endorsement of Minty's candidacy for DG, following the

unavailability of ElBaradei for a further term. Both the press

conference and the AOB statement focused on Minty's commitment to

peaceful use of nuclear energy and technology. Not to be outdone,

Japan reaffirmed its strong support for Amano's candidacy and was

seconded by Mongolia, also speaking under AOB. Mongolia noted the

need for regional rotation of the Director General position,

suggesting it was Asia's turn. South Korea also spoke in favor of

"the Asian candidate" succeeding to the Director General's position.





24. (SBU) With prompting from the U.S. delegation (ref e

instructions),Canada, the UK and Afghanistan advocated term limits

for the Director General under AOB. Canada and the UK, also

speaking on instructions, cited the 1997 UNGA resolution on

strengthening the UN, which recommended term limits for executive

heads of specialized agencies. The UK seconded Canada's request

that this issue be added to the Board's agenda. Reading from our

talking points, Afghanistan suggested that the DG election was an

opportune time to reconsider term limits and called upon declared

candidates for the position to endorse a two-term limit. (Note: The

U.S. decided not to make a statement on term limits after Iran

half-jokingly suggested in its intervention under the Iran agenda

item that ElBaradei serve a further term to deal with its dossier.

Afghanistan, as a NAM/G-77 member, was better placed to make a

statement, which should also help dispel the impression that term

limits is a Western/Geneva Group initiative. End Note.)