IAEA/BOARD OF GOVERNORS: SAFEGUARDS IMPLEMENTATION

UNCLAS UNVIE VIENNA 000298 SENSITIVE SIPDIS STATE FOR ISN AND IO DOE FOR NA-24 - LOCKWOOD, MENDELSOHN, O'CONNOR, MCLELLAND-KERR NRC FOR OIP - SCHWARTZMAN NRC FOR SCHEINMAN E.O. 12958: N/A TAGS: KNNP AORC TRGY SUBJECT: IAEA/BOARD OF GOVERNORS: SAFEGUARDS IMPLEMENTATION REPORT, ROUTINE VERIFICATION AGENDA ITEMS REF: A. UNVIE VIENNA 292 - JUNE BOARD ON DPRK ¶B. UNVIE VIENNA 193 - JUNE BOARD ON IRAN ¶C. UNVIE VIENNA 289 - JUNE BOARD ON SYRIA ¶D. UNVIE VIENNA 281 - JUNE BOARD ON IRAQ ¶E. UNVIE VIENNA 279 - JUNE BOARD ON BUDGET ¶F. STATE 61325 - BOARD INSTRUCTION CABLE ¶G. UNVIE VIENNA 253 - JUNE BOARD PREVIEW AND ANALYSIS SENSITIVE BUT UNCLASSIFIED SENSITIVE BUT UNCLASSIFIED ¶1. (U) This cable reports on discussion of the routine safeguards agenda items from the Board of Governors: item 5a (Conclusion of safeguards agreements and additional protocols),5b (the Safeguards Implementation Report for 2008) and 5c (Staff of the Safeguards Department to be used as Agency Inspectors. Discussion of safeguards issues in the DPRK (item 5c),Iran (item 5e),Syria (item 5f) and Iraq (discussed under item 5b) is reported in REFS A-D. ¶2. (SBU) SUMMARY. Under item 5b the Safeguards Implementation Report for 2008 (SIR),the Board welcomed Egypt's cooperation to resolve safeguards issues reported in 2005 and looked forward to the resolution of an issue arising from discovery of enriched uranium particles in 2007 and 2008, which are not readily explained by Egypt's previous nuclear material declarations. The NAM took the opportunity to portray as inadequate the Secretariat's respect for confidentiality of safeguards information. Cuba also raised questions about the propriety of Department of Safeguards use of cost-free experts (CFEs). DDG/Safeguards Olli Heinonen rebutted the Cuban concerns. Many delegations commented on the importance of universal adherence to comprehensive safeguards agreements and Additional Protocols, on the need to improve efficiency and broaden cooperation with state systems of accounting and control for nuclear material, and on the importance of upgrading the Safeguards Analytical Laboratory. A few also commented on the format of the SIR, arguing for greater transparency in reporting on state-level safeguards implementation. Malaysia offered a remarkably positive intervention. The Board took note of the SIR and agreed to release the Safeguards Statement and Summary and Background to the Safeguards Statement and Summary. (Note: 
Public release of these portions of the SIR constitutes the first formal Board release of a document describing the Agency's investigation and preliminary conclusions in Syria.) The Board also approved an Additional Protocol for Serbia and a comprehensive safeguards agreement and an Additional Protocol for Rwanda and took note of the list of new and departing inspectors. End Summary. SIR/Egypt -------------- ¶3. (SBU) Egypt welcomed the SIR's conclusion that issues reported in 2005 had been resolved and expressed satisfaction with the Secretariat's cooperation to resolve them, but expressed "surprise" that the Secretariat had referred publicly to a restricted document and had done so inaccurately. (Note: This was a reference to IAEA EXPO Director Vilmos Cserveny's premature reference to the Egyptian issue in a statement at the May NPT PrepCom. The "inaccuracy" in his statement was wording to the effect that the detection of HEU and LEU particles in 2007 and 2008 were linked. End Note.) ¶4. (SBU) Similar to the U.S. statement (see para 5),the EU statement welcomed "the fact that Egypt has clarified issues relating to its past undeclared activities reported to the Board in 2005," and that those issues "are no longer outstanding." The EU statement looked forward to resolution of issues raised by the HEU and LEU particles. Australia's statement described the SIR reporting on Egypt as "a welcome exercise in transparency," and noted that "steps have been taken to ensure that the Egyptian SSAC has sufficient legal authority to fulfil Egypt's obligations under its Comprehensive Safeguards Agreement." Australia also said ongoing work on the HEU and LEU particles was "a matter of continuing interest to the international community" and "look(ed) forward to further information from the Secretariat on the resolution of this issue." (Comment: Privately, Egypt expressed satisfaction with the U.S. and EU statements, but expressed displeasure with the Australian statement reference to "continuing" international interest.) ¶5. (SBU) Text on Egypt in U.S. statement on the SIR: The SIR indicates that a number of issues that had been previously reported to the Board with respect to Safeguards in the Arab Republic of Egypt have been resolved and are no longer outstanding. We welcome the Agency's work in addressing the issues, we welcome the cooperation shown by Egypt in helping to resolve them, and we look forward to similar cooperation in resolving any additional questions arising from the results of environmental sampling. We would further note that the resolution of questions is necessarily a part of any verification system, and the transparency provided by the SIR's reporting contributes to understanding and confidence of the international community in the workings of the safeguards system. End text. Leaks of Safeguards Information -------------- ¶6. (SBU) Cuba, speaking for the NAM, focused on the issue of safeguards confidentiality, complaining that the Secretariat had made public statements about the contents of a restricted document in a public meeting in New York. (This was another reference to the mention of Egypt in the IAEA presentation at the NPT Preparatory Committee in May.) The NAM statement continued with a more generalized complaint about "leakage" of safeguards confidential information, and asked the DG to identify measures to prevent future leaks, such as a "code of conduct" for the Secretariat, and to reinforce existing measures to deal with "violators" of that code. Russia echoed this by noting that leaks tended to politicize safeguards issues and undermine confidence in safeguards. ¶7. (SBU) In a later national statement, Cuba pointed to the fifteen cost-free experts (CFEs) in the Safeguards Department and argued that the use of CFEs compromises the independence of the Agency, which is especially important for safeguards. In a response at the end of the SIR discussion, DDG Heinonen replied that CFEs were only fifteen of over eight hundred safeguards staff members; that they had the same confidentiality requirements as regular staff members; worked mostly in technical support areas such as equipment, information technology and training; and were needed for their specialized expertise. Israel on Syria -------------- ¶8. (SBU) In a muted SIR intervention intended as a preview of its more ardent statement under the Syria agenda item (REF C),Israel requested deletion of text (citing only the paragraph numbers rather than the substance) referring to Israel's attack on Dair Alzour in Syria, saying it was not in line with longstanding IAEA practice. (Note: Israel made a similar intervention under the Annual Report agenda item and. There was no response to either intervention. The practice to which Israel was referring is the usual omission of country names, while in this case Israel is mentioned specifically.) SAL and Budget -------------- ¶9. (SBU) Several delegations spoke of the importance of the Safeguards Analytical Laboratory (SAL) and the Network of Analytical Laboratories (NWAL) in Member States for analyzing safeguards samples, mostly focusing on environmental samples. Japan noted its contribution of 6.91 million Euros, of which approximately 4.5 million Euros would go toward the acquisition and installation of an ultra high sensitivity secondary ionization mass spectrometer (to be used for particle analysis at SAL). The NAM cited the importance of expanding the NWAL to include developing countries. Brazil, China and the ROK noted that they had labs seeking NWAL qualification and the ROK announced a USDOL 300,000 contribution to SAL. Malaysia supported the SAL budget request and announced that it was establishing a laboratory over the next five years that it hoped would be accredited as part of the NWAL. France noted the need for a balance between SAL and the NWAL, and said it was seeking qualification of one of its labs for nuclear material analysis. (Note: Unlike environmental samples, where the IAEA relies heavily on Member State NWAL labs, the IAEA analyzed virtually all of the roughly 500 nuclear material samples in its own Nuclear Material Laboratory at SAL and the On-Site Laboratory at Rokkasho, Japan. The only NWAL lab currently qualified to analyze nuclear material samples is the Trans-Uranium Institute at the EU Joint Research Center in Karlsruhe, Germany.) Heinonen welcomed the interest in establishing new labs, but noted that this was expensive and the Agency had no funds to help Member States. ¶10. (SBU) Switzerland noted that 10.5 million Euros remained unspent in 2008 and were carried over to 2009, and asked whether the funds would be spent. Heinonen said that most of the unspent funds were due to delays in major projects at the Rokkasho Reprocessing Plant and the MOX plant in Japan and for safeguards at Chernobyl. Heinonen noted that most of the funds would be spent in 2009. (Note: Roughly 3.5 million Euros of these funds have been allocated for construction of the Clean Lab Extension to house the mass spectrometer being purchased with funds provided by Japan. Germany meanwhile has developed a new talking point, arguing that 2008 actual expenditures should be the base for any proposed budget increase. This would take the Agency well below ZRG.) Commenting on the increase in extrabudgetary resources, Argentina asked whether this would lead to a distortion in safeguards implementation, implying that the IAEA would be serving the interests of donors rather than of all Member States. Efficiency -------------- ¶11. (SBU) Many delegations spoke of the importance of efficiency in safeguards implementation. Key themes were the savings already achieved through "integrated safeguards" (estimated by the Secretariat to be 800 person days of inspection per year) and anticipated implementation of integrated safeguards spreads; the improvements in efficiency to be achieved through greater cooperation with state and regional systems of accounting and control; and the efficiency gains achieved through technical measures such as remote monitoring. Argentina noted the importance of effectiveness and efficiency, but said more work needed to be done on efficiency. (Note: There was very little discussion of the importance of measures to improve safeguards effectiveness, though some of the aforementioned items would also contribute to effectiveness as well as efficiency.) In particular, Argentina and Brazil touted cooperation with ABACC, and Brazil noted the importance of avoiding duplication of effort between ABACC and the IAEA. The EU statement noted cooperation between the IAEA and EURATOM, but focused on extending integrated safeguards to additional types of facilities (centrifuge enrichment plants, spent fuel conditioning facilities and geological repositories). Safeguards Agreements and Additional Protocols -------------- - ¶12. (SBU) The Board approved a comprehensive safeguards agreement (CSA) and an Additional Protocol (AP) for Rwanda, and an AP for Serbia. Serbia spoke of its firm commitment to the NPT, its adherence to various international nuclear instruments, its efforts to strengthen its nuclear legislation (thanking the Secretariat for its help in that regard),and its plans to establish an independent nuclear regulator. The U.S. statements on agenda items 5a and 5b addressed the need for universal adherence to CSAs and APs and called for states to revise their Small Quantity Protocols, and noted the entry into force of the U.S. AP in January. Many other delegations (speaking on item 5b only) noted the importance of expanding adherence to comprehensive safeguards agreements, Additional Protocols and revised Small Quantity Protocols. Egypt raised the usual double-standard argument (aimed at Israel),emphasizing the importance comprehensive safeguards and that the continued existence of unsafeguarded nuclear activities rendered the Agency's work incomplete. In a remarkably positive intervention, Malaysia described its preparations for implementing the Additional Protocol, including allowing access outside material balance areas, issuing multiple entry visas, and conducting outreach and training for national authorities and stakeholders. Transparency -------------- ¶13. (SBU) Many delegations welcomed the conclusions in the Safeguards Statement. A few commented on the format and content of the SIR, with most recognizing incremental improvements from previous years. Canada described the SIR as a "report card" and called for more detailed state-specific reporting. The U.S. statement noted the need for more information on the results of safeguards activities as opposed to just enumerating those activities. Switzerland noted the importance of clarity in the SIR, and questioned whether reporting separately on five groups of countries based on their different safeguards undertakings served that end. Heinonen noted that next year most countries would be under integrated safeguards, and the Secretariat was considering restructuring the SIR to be more transparent. He welcomed suggestions from the SAGSI (the Standing Advisory Group on Safeguards Implementation) and from Member States. Member State Support Programs -------------- ¶14. (SBU) Several countries' interventions addressed safeguards implementation in their countries and on activities of their Member State Support Programs. Finland focused on safeguards issues for spent fuel repositories, both in Finland and Sweden. Germany noted the role of the German Support Program in development of the Next Generation Safeguards System. The ROK described its support for monitoring systems to be used at CANDU type reactors. France noted that new safeguards measures were being applied at the four gas centrifuge enrichment plants operating or under construction in Europe. The French support program had provided assistance to the Safeguards Department's Trade and Technology Analysis Unit. ¶15. (U) Copies of the SIR statements made by Australia, Canada, China, Egypt, the EU, France, Germany, Japan, Malaysia, Mexico, the NAM, South Africa, Switzerland and the UK, as well as the U.S. statement as delivered, were emailed to ISN/MNSA (Jonathan Sanborn). PYATT