DAS KANG AND DELEGATION'S MEETINGS WITH GOJ ON THE FUTURE OF THE IAEA

C O N F I D E N T I A L TOKYO 002615



SIPDIS



DEPT FOR T, ISN KANG, ISN/MNSA, IO/GS

NSC FOR ADAM SCHEINMAN

VIENNA FOR DCM PYATT



E.O. 12958: DECL: 11/12/2019

TAGS: PREL, PUNE, PREL, ENRG, IAEA, JA

SUBJECT: DAS KANG AND DELEGATION'S MEETINGS WITH GOJ ON THE

FUTURE OF THE IAEA



Classified By: EMIN Marc M. Wall for reasons 1.4 (B) and (D).



1. (C) Summary: Japan understands and agrees with many of

the U.S.'s concerns about the future of the International

Atomic Energy Agency (IAEA),but fears that existing

politicization of the IAEA could complicate and challenge

some efforts at reform. Japan is also facing budgetary

challenges that may limit or reduce its voluntary

contributions to the IAEA. Ministry of Foreign Affairs

(MOFA) officials responsible for the IAEA and nuclear energy

spoke frankly about these and other issues during October 7

consultations with visiting USG officials. The U.S.

delegation was headed by ISN Deputy Assistant Secretary Eliot

Kang and included NSC Director Adam Scheinman, IO/GS Director

Julie Gianelloni Connor, UNVIE DCM Geoffrey Pyatt, and

ISN/MNSA Stephen Adams. MOFA was represented by Deputy

Director General for Disarmament, Nonproliferation and

Science Akahito Nakajima, Director for International Nuclear

Energy Cooperation Tsutomu Arai, Director for

Nonproliferation, Science, and Nuclear Energy Tsutomu

Koizumi, and several members of their staff. The delegation

also had a brief side-meeting with IAEA Director

General-Designate Ambassador Yukiya Amano, during which he

discussed his priorities for the IAEA. End Summary.



2. (C) MOFA Deputy Director General for Disarmament,

Nonproliferation and Science Akahito Nakajima opened the

meeting by expressing thanks for U.S. support for the

election of Ambassador Yukiya Amano as IAEA Director General,

and noted the time had come for establishing a global norm

for managing nuclear technology. After DAS Kang highlighted

President Obama's strong emphasis on nonproliferation,

Nakajima commented that Amano's task at the IAEA will be to

deal with those that still have the wrong idea about nuclear

energy, and to change their focus to peaceful, practical

applications. He also noted that Ambassador Amano now

represents an international organization, and as such the

Ministry is carefully distancing itself from him so as to

avoid any appearance of pressure or undue influence.



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Budget and Management

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3. (C) The U.S. delegation (USDel) began discussions on the

IAEA budget and management by noting the agency's growing

resource requirements. DCM Pyatt stressed the need for

greater transparency and efficiency in the use of existing

resources, especially to justify any future budget increases.

Mr. Pyatt also suggested the consideration of a needs-based

budgetary process and performance driven metrics for

evaluating programs.



4. (C) Koizumi noted Japan shares the U.S.'s concerns about

the necessity of strengthening the IAEA's capacity, and he

agreed on the necessity of efficiency and transparency in

existing operations. Alluding to the idea that budgetary

reform could threaten technical cooperation projects popular

with developing countries, Koizumi said Japan believes

safeguards, technical cooperation, and security all should be

important at the IAEA. However, Koizumi said excessive

politicization of the IAEA has created a need for

reconciliation between developed and developing countries.

International Nuclear Energy Cooperation Division Director

Arai elaborated on these comments by explaining that while

Japan appreciates the need to grow the nuclear security

budget, it is concerned about avoiding confrontation with

developing countries. He suggested that we should make an

effort to broaden the understanding among developing states

that nuclear security is an enabler for the development of

nuclear energy. Arai noted that Japan feels safety is the

key element of nuclear energy, and in its bilateral

agreements with countries embarking on nuclear power, Japan

is including requirements related to the 3Ss of safety,

security, and safeguards.



5. (C) MOFA officials also highlighted a new potential

budgetary problem faced by the GOJ in relation to the IAEA.

The recently elected Japanese government has directed MOFA to

reduce Japan's voluntary contributions to international

organizations by 30%. Koizumi expressed hope the IAEA would

be exempt from this reduction, but indicated the decision

would ultimately lie in the hands of the politicians, and

MOFA would know more about the financial situation in a month

or so.



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Safeguards

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6. (C) The U.S. and Japanese delegations also discussed the

future of safeguards at the agency. The sides agreed that

working with the new Chairman of the Board--Malaysian

Ambassador Arshad Hussein, who has not demonstrated a

commitment to strong safeguards--could be difficult for

Amano. MOFA officials admitted they do not have a lot of

experience with the new chair, but do have good relations

with nuclear officials in Kuala Lumpur. Koizumi said when

MOFA talks to Malaysia on nuclear matters, it speaks not to

the Foreign Ministry, but instead to the head of the Atomic

Energy Commission, who Koizumi noted "controls Malaysia's

safeguards system." Koizumi suggested it may be useful to

engage with Malaysia via this route, rather than the Foreign

Ministry. Koizumi commented that sometimes the positions

taken by delegations in Vienna and Geneva do not seem to

match what the ministries at home are saying. The USDel

agreed, and noted that high-level U.S. officials have begun

an effort to visit selected capitals such as Cairo and

Pretoria to speak directly to the relevant ministries about

cooperation at multilateral forums. IO/GS Connor suggested

that MOFA officials could perhaps do the same, visiting Kuala

Lumpur, Jakarta, and other capitals where they have influence.



7. (C) Also on the issue of safeguards, MOFA officials

highlighted Japan's contributions to the Safeguards

Analytical Laboratory (SAL),and expressed interest in

securing contributions from other countries, including the

United States. The U.S. delegation raised the idea of going

outside the IAEA for funds, to another venue such as the G-8.



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Ambassador Amano

--------------



8. (C) In a side meeting with IAEA Director

General-designate Amano, the delegation reviewed major themes

from the day's consultation and asked about Amano's

priorities for his forthcoming tenure. Amano noted that he

has been using his time in Japan to lecture and conduct

senior-level meetings (including the day before with Prime

Minister Hatoyama) aimed at building up the IAEA's

constituency. Amano outlined four immediate priorities for

the IAEA. First, he said, is to strengthen the IAEA

institutionally. In this, he took encouragement from the

widespread support for the agency among G-8 governments.

Second is nuclear security--and here he noted the particular

importance that President Obama has placed on the challenge

of nuclear security and his intention to prioritize IAEA work

in this area. Amano also flagged safeguards as a priority,

noting that Japan needs to see itself as not just a major

target of the safeguards operation, but also as a

technologically advanced country that has lessons that need

to be shared with other countries. Continuing on the

safeguards theme, Amano cited Iran and North Korea as

compliance cases that "won't go away." In this regard, he

continued, the agency must make clear that these countries

need to implement their safeguards obligations. Referring to

the recently disclosed Iranian facility at Qom, Amano offered

a gentle criticism of the IAEA Secretariat suggestion that

the Iranian response thus far was ok. Iran is not like other

countries, he underlined, since the Security Council

resolutions make clear that any Iranian enrichment activities

must cease, so the Qom facility is by definition illegal.



9. (C) Finally, Amano shared his decision to bring with him

Japanese MOFA official Satoshi Suzuki, who will work directly

for the Director General with responsibility for personnel

and management issues (presumably encumbering the Office of

Oversight Services Director position that under El Baradei

was filled by Versask Liengsririwat). In discussing his

personnel plans, Amano indicated that he intended to follow a

"Change with Continuity" plan, which he explained as a plan

to keep certain key Deputy Directors General (DDGs),

including Olli Heinonen, in place so as to ensure continuity

in critical IAEA areas, while replacing some DDGs. He also

noted that he was aware of the need to appoint a woman to a

senior position, and indicated his intention to retain Amcit

DDG David Waller, which USDel welcomed.



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Technical Cooperation

--------------





10. (C) On the issue of Technical Cooperation (TC),the U.S.

delegation said not enough attention has been paid to the

overall performance of the programs and noted the division is

more focused on overall expenditures than final results.

MOFA officials expressed frustration with TC, but also

concern that the pursuit of TC efficiency could anger

developing countries and threaten the success of

non-proliferation efforts. International Nuclear Energy

Cooperation Division Deputy Director Zentaro Naganuma

suggested donors should send a message regarding TC in a

positive manner: that evaluation of existing projects will

allow us to duplicate and promote successful projects.



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Nuclear Security

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11. (C) Japan began the discussion on nuclear security by

giving an overview of its efforts in this area. Arai

informed the delegation that Japan intends to host a regional

seminar on nuclear security in January. He also described

Japan's ongoing negotiation of bilateral nuclear agreements

with several countries, in which Japan is asking partner

countries to accept provisions related to nuclear security.

He noted Japan would like to emphasize the development of

human resources and is thinking of contributing to training

in this area. Arai requested U.S. thoughts on what security

issues are most urgent.



12. (C) DAS Kang responded that the United States wants the

IAEA to take ownership of the nuclear security issue, and the

USG wants to see dedicated human resources at the IAEA and

regular budget funding. Director Scheinman said we will need

to find and leverage those areas where the IAEA has access

and capability, and to set aside the idea that the IAEA has

no role in nuclear security.



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Nuclear Energy

--------------



13. (C) Arai began by commenting on the importance to Japan

of the "3S's" of safeguards, security and safety. Noting the

role the IAEA plays in promoting the development of

infrastructure in countries that have an interest in nuclear

power, Arai observed there is room to improve the Agency's

international coordination on nuclear energy issues. He also

said Japan would like to make more use of the Friends of

Nuclear Energy Group in Vienna. Arai expressed an interest in

the future of the Global Nuclear Energy Partnership, and

noted that Japan would need to see an understanding among the

parties involved before any changes are made to the

Partnership. Koizumi followed with some comments on fuel

supply assurances. He noted Japan's believes this is an

important issue, but given the divide between developed and

developing countries, too much pushing on the issue could

result in a breakdown in discussions.



14. (C) DCM Pyatt asked the GOJ attendees about Japan's

position on Kazakhstan's expressed interest in joining the

East Asia Group at the IAEA. Koizumi noted they had been

asked about this in Vienna, and Ambassador Nakane's first

reaction was positive. He said it may take Japan a while to

develop a final position because they have to consult with

other states, but they do not consider Kazakhstan's joining

to be impossible. He concluded by noting U.S. support for

Kazakhstan's joining would be taken into account in Japan's

deliberations.



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Regional Matters

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15. (C) The U.S. delegation opened a discussion on regional

issues by highlighting ongoing challenges related to Iran,

Syria, and the DPRK, and noting the issue of the Qom facility

in Iran will be an immediate challenge for Director General

Amano. DAS Kang also reiterated that the United States will

not accept North Korea as a nuclear state.



16. (C) Japan's basic position on Syria, Koizumi said, is

that full cooperation with the IAEA, as well as Syria's

signing and implementing of the Additional Protocol, are

necessary. He noted Japan has already delivered this message

to Syria. For Iran, he said Japan doesn't know the full



history of recent developments, but believes the latest P5 1

meeting was positive. He expressed uncertainty about the

outcome of the agreement made by Iran to the P5 1. Koizumi's

staffer Ishii then expressed pessimism on the issue of Iran,

and asked several detailed follow up questions, including

what the U.S. expects to happen with regard to inspections on

the October 25 and the nuclear fuel supply concept. He

expressed concern that fuel enriched under the program could

be turned back into UF6 by Iran and re-enriched. He also

wanted to know how this program would be managed given the

various UN resolutions that prohibit export of material to

Iran. In reply to Ishii's questions, USDel noted the amount

of material represented three core loads and was based on a

1988 supply agreement. The risk of re-conversion is

manageable, given the ability to enrich from natural to LEU

has already been demonstrated. Moreover, the fuel will be

under IAEA safeguards.



17. (C) Koizumi's staffer Onishii began Japan's comments on

North Korea by describing Japan's evaluation of North Korea's

recent claim that it had nearly completed reprocessing spent

fuel rods removed from the 5 MWe reactor in 2003. Taking

into account the likely timeline for removing the rods and

reprocessing operations, the GOJ thinks the DPRK claims may

be factual. However, he said Japan could only guess

regarding the North Korean assertions about enrichment. DAS

Kang responded that there is every reason to believe North

Korea's claims regarding spent fuel reprocessing.



18. (C) Koizumi said Japan feels North Korea should only be

rewarded for irreversible disarmament measures. DAS Kang

opined, given the history of North Korean misbehavior, we

cannot accept anything less than irreversible disablement.

He noted the United States is in synch with Japan and South

Korea on this issue, and China is coming on board.



19. (C) Referring to the recent IAEA General Conference,

Koizumi expressed concern certain Middle East countries had

introduced new text on the last day of the conference, and

suggested the United States and Japan should consider how to

deal with such tactics in the future. He referenced what he

described as the ability of Russia and China to prevent last

minute changes to the Middle East resolution, and suggested

we should in the future coordinate sooner with a "core group"

of countries.



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Nuclear Suppliers Group

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20. (C) Switching to the Nuclear Suppliers Group, Koizumi

said Japan had received a report on the last meeting,

appreciated U.S. momentum for the new guidelines, and is

waiting for the conclusion. He noted it is important for

Japan to see the Additional Protocol (AP) as a condition of

supply, especially after the newest UN Security Council

resolution. He described the last text produced by the chair

as ambiguous on this point, and asserted that any special

treatment for Argentina and Brazil should be temporary and

strictly limited, and apply only to them. He said Japan

would be happy to approach Argentina and Brazil on the issue.

DAS Kang noted the importance of the universalization of the

AP, and agreed it should be a condition of supply.



21. (U) This cable was cleared with the USDel subsequent to

its return to Washington.

ROOS