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