BEGINNING THE RIGHTSIZING OF THE IAEA OFFICE OF NUCLEAR

UNCLAS UNVIE VIENNA 000144

SENSITIVE
SIPDIS

STATE FOR ISN A-A/S KANG, IO/T, ISN/MNSA, ISN/NESS, ISN/RA
NA-20 LOONEY/FINK, NA-20.1 KOONTZ
NA-21 BIENIAWSKI/SHEELY/ILIOPULOS/STAPLES/DICKERSON , NA-25
HUIZENGA/VOLGER, NA-243-GOOREVICH/BRUNNS; NA-241 O'CONNOR,
LAMONTAGNE
NRC FOR OIP - HENDERSON, SCHWARTZMAN

E.O. 12958: N/A
TAGS: AORC KNNP IAEA ENRG TRGY PTER EAID
SUBJECT: BEGINNING THE RIGHTSIZING OF THE IAEA OFFICE OF NUCLEAR
SECURITY WITH THE 2010-2011 BUDGET PROPOSALS

REF: (A) UNVIE 65 (B) UNVIE 74


1. (SBU) SUMMARY. An IAEA Office of Nuclear Security (ONS)
presentation on the proposed IAEA 2010-2011 budget emphasized plans
to re-organize, increase staff, and become a more focused operation
if the proposed IAEA budget increase is approved. The increase in
regular budget resources for ONS would mainly go to bringing on
regular staff, developing an information platform, analysis
methodologies, develop databases and Integrated Nuclear Security
Support Plans, completing a nuclear security framework, and
establishing technical norms to support the framework. There are
several nuclear security items anchored in the regular budget
increase that would bring broad benefits to developing countries.
If adopted, the proposed 2010-2011 budget would begin to rightsize
regular budget (RB) support for ONS upward from the five percent of
program resources the RB currently provides (which IAEA DDG David
Waller called "pathetic" during his February budget presentation).
DG ElBaradei has been among strongest advocates of giving ONS the
resources necessary to help prevent the use of nuclear and other
radiological materials in terrorist acts. End summary.


2. (SBU) On March 18, Tim Andrews from the International Atomic
Energy Agency's (IAEA) Office of Nuclear Security (ONS),within the
Department of Nuclear Safety and Security, gave a presentation of
the ONS vision for the funds proposed in the IAEA's 2010-2011 budget
released in early February (REF A). The presentation was hosted by
the German Mission with several other key donors present, including
the United Kingdom, Japan, Canada, and the Netherlands.

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ONS 2008 Accomplishments
--------------


3. (SBU) The briefing began with a discussion by Mr. Andrews of the
current expenditure, structure and accomplishments of the ONS. The
2008 regular budget of ONS is 1.1 million Euros and the total
expenditure for 2008 was 22.9 million Euros, of which the United
States provided close to 60 percent. ONS is currently structured
with 4 full time professional staff in three sections; Information
Management and Coordination Section, Prevention Section, and
Detection and Response to Malicious Acts Section.


4. (SBU) The primary outputs by ONS for 2008 were 21 nuclear
security related missions, 10 Integrated Nuclear Security Support
Plans-INSSP (provides a platform for nuclear security work to be
implemented over a period of time),physical protection activities
underway in 12 States, more than 1500 radioactive sources removed,
more than 170 kilograms of Highly Enriched Uranium (HEU)
repatriated, detection equipment supplied to 24 States and nuclear
security related training for more than 1600 people from 90 states.

--------------
2010-2011 Funds
--------------


5. (SBU) Andrews said that with the 2010-2011 proposed budgets, ONS
is interested in establishing "regular and assured resources" for
ONS activities; however, they do want the regular budget to continue
to be supplemented by extra-budgetary contributions. If the
Secretariat's proposed budget goes through, ONS would re-structure
the office into four sub-programs with the following titles; Needs
Assessments and Information Coordination, Establishing a Global
Nuclear Security Regime, Providing Nuclear Security Services, and
Threat Reduction and Security Improvement.


6. (SBU) In the Secretariat's 2010 budget proposal, the ONS proposed
regular budget is slightly over 8 million Euros (reflecting an
increase of over 600 percent from the current low level),and
anticipated extrabudgetary supported is 15 million Euros down from
16.7 million Euros in 2008. For 2011, the proposed regular budget
is slightly under 11.6 million Euros while extrabudgetary would
decline to 11.2 million Euros. Andrews said that the majority of
the increased regular budget funds will be used for nuclear security
activities that provide benefits across member states, including;
development of information platforms, database development, program
monitoring and INSSPs. Extrabudgetary funds would be more focused
on state-specific activities such as physical protection upgrades,
source recovery, supplying detection equipment and remote
monitoring.


7. (SBU) ONS also expects to pay for more ONS staff with the regular
budget funding. ONS would like to expand from funding 7.31

professional and general services staff from the regular budget to
funding a total of 49.95 staff. ONS expects the total number of
staff in the office not to increase significantly from the number
currently on board. However, instead of consultants and cost free
experts making up a majority of the current positions, these slots
would be filled with professional and general services staff.

--------------
Program Support Costs
--------------


8. (SBU) Andrews also mentioned that due to unresolved issues over
the new IAEA requirement to deduct Program Support Costs, ONS
currently has 1.7 million Euros in tasks that are currently unfunded
and only 50,000 Euros left unobligated. ONS is being asked to
prioritize and delay work due to the funding shortage. However,
Andrews also mentioned that the United Kingdom and Canada recently
pledged 4 million pounds and 2 million dollars respectively and both
agreed to pay program support costs at 7 percent.

--------------
Key Donor Comments
--------------


9. (SBU) Andrews left after the briefing and there was a discussion
among those who attended about the 2010-2011 proposed budgets. The
German Mission host commented that this was a very good
presentation, however, the European Union, "...are against the
budget increase as a whole and would not like to see more money
given to TC." Canada and Netherlands both commented that they favor
the increase in ONS funding. However, the Netherlands does have a
problem with the overall Agency increase of the budget of 23
percent. Japan also mentioned that the "300 percent" increase was
not something they could support.

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COMMENT
--------------


10. (SBU) ONS is attempting to become a more independent office that
produces short and long-range plans that can only be executed with a
steady flow of assured regular budget resources. REF A made the
case for "mainstreaming" the IAEA's nuclear security activities. As
part of this, Mission recommends the U.S. encourage additional
regular budget resources for ONS. In this priority we are in close
accord with the Director General and DDG Waller, who argued
passionately for mainstreaming nuclear security in the RB to budget
hawks from like-minded missions, whom the Ambassador invited to
dinner with senior NNSA officials March 30. However, we also
recognize the advantage of being able to give extrabudgetary funds
that can be used to initiate and promote nuclear security activities
that further specific USG interests. In the expectation that
nuclear security will steadily move under the regular budget, the US
should also consider the potential for 49 professional and general
services staff being hired within ONS and work with ONS to ensure
some of those positions, particularly professional, are staffed with
Americans. The U.S. currently accounts for over 50 percent of ONS
personnel, but all Amcits in ONS are Cost Free Experts. If these
positions are paid for with the regular budget in the future, all of
these jobs would cross over, become competitive, and would open to
non-Americans.

SCHULTE