IAEA: JUNE BOARD WRAP UP

UNCLAS UNVIE VIENNA 000300

STATE FOR IO/T, ISN/MNSA, ISN/RA
NA-243-GOOREVICH/OEHLBERT, BRUNNS; NA-241 O'CONNOR,
SIEMON; NA-21- CUMMINS, ILIOPULOS;
NE- MCGINNIS, PERKO, CLAPPER
NRC FOR OIP - DOANE, HENDERSON, SCHWARTZMAN
ROME FOR USFAO

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: AORC KNNP IAEA ENRG TRGY

SUBJECT: IAEA: JUNE BOARD WRAP UP

Ref: a) UNVIE 279 b) UNVIE 281 c) UNVIE 286 d)UNVIE 289 e)UNVIE 293
f) UNVIE 292 g) SECSTATE 61320 h) UNVIE 253


1. (SBU) Despite Mission's efforts to improve the divisive
atmosphere in the IAEA Board of Governors, a public row between
Director General Elbaradei and Israel under the Syria agenda item
detracted from this objective (ref d),as did continued divisions
over the IAEA budget, which were likewise the subject of a direct
intervention by ElBaradei (ref a). Among our highest priorities for
the June Board was the discussion of nuclear fuel assurances, which
was included for the first time as a formal agenda item. The Board
agreed to continue consultations and discussions while the
Secretariat further elaborates a conceptual framework for fuel bank
proposals, thus laying the groundwork for future decisions(septel).
On verification issues, the majority of Board members, with the
notable exception of the NAM troika (Cuba, Egypt, Malaysia),
seconded the Director General's call for Iranian and Syrian
cooperation with respective IAEA investigations (refs c-e). There
was universal condemnation on the part of the Director General and
Board members of DPRK's nuclear test and support for UNSCR 1874 (ref
f.) The discussion of the Safeguards Implementation Report
registered general support for implementation of strengthened
safeguards, including through the Additional Protocol and the
state-level approach (septel). Under this agenda item, the U.S. and
likeminded delegations called for continued cooperation by Egypt.
Iraq, seconded by the U.S. (and Japan under Any Other Business),
requested an agenda item for the September Board meeting on its
safeguards compliance (septel). The Director General repeated his
reservations about placing this issue on the agenda absent entry
into force of an Additional Protocol.


2. (SBU) This cable covers remaining agenda items from the June
Board, including the Annual Report, Technical Cooperation Report,
General Conference agenda items, Designation of Board members,
Appointment of the Director General and De-restriction of Board
documents. The Board upheld the 1996 policy on de-restriction and
the Board's existing authority to release documents. Under the
respective agenda items, the Board released the SIR report summary
and the DG's report on Iran, as has been the practice, but there was
no consensus to release the Syria report (ref d). In addition,
under Any Other Business, the U.S. and Netherlands highlighted the
Global Initiative to Combat Nuclear Terrorism Plenary in The Hague
and the role of the IAEA on nuclear security. End Summary.

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Agenda Item 1: DG's Introductory Statement
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3. (SBU) In addition to his introductory comments on Iran (ref e),
Syria (ref d),DPRK (ref f),assured supply (septel) and the budget
(ref a),the Director General highlighted capacity building via the
Technical Cooperation program in major areas including human health
(the largest area),taking note of PACT support for Ghana in
particular; food and agriculture and nuclear safety. Although the TC
fund achieved a 94.7 percent rate of attainment (79.9 million USD),
he noted the negative impact of the declining U.S. dollar and
obstacles to implementation such as visa delays and denials of
shipments. The Director General also welcomed the launch of the
WHO-IAEA Joint Program on Cancer Control and announced that the FAO
had withdrawn its notice of termination of the 45-year old FAO-IAEA
Joint Division. The DG took note of the April 2008 Beijing
Ministerial on nuclear energy at which he remarked no country had
scaled back plans for nuclear power; thus, continued high demand for
IAEA assistance should be expected. The Director General then
mounted a strong defense of nuclear security as a core function of
the Agency, noting that it would be "irresponsible and
incomprehensible" for the IAEA to not have a robust, well funded and
independent nuclear security program. With respect to nuclear
verification, ElBaradei welcomed the conclusion of CSAs and
Additional Protocols by Rwanda and Serbia but lamented that there
were still 20 states with significant nuclear activities that have
yet to bring into force an AP. He also noted that the Agency
planned to complete installation of an Ultra-high sensitivity SIMS
by 2010 and made a pitch for funding upgrades at the Safeguards
Analytical Laboratory.

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Agenda Item 2: Annual Report for 2008
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4. (SBU) Most Member States making interventions on this agenda item
commended the Secretariat for the format and quality of the Annual
Report (GOV/2009/23) and the additional information, which
highlighted major issues, challenges and emerging trends in the
three pillars of nuclear technology, safety and security and
verification. Member States welcomed IAEA activities related to
the promotion of nuclear energy and energy assessment services;
innovation in reactor and fuel cycle technologies; nuclear
applications in the areas of food, agriculture, water and human
health, including the treatment of cancer; ensuring the availability
of radioisotopes; meeting the Millennium Development Goals; nuclear
knowledge management and human capacity building; safety-related
activities, including, radiation and transport safety/the issue of
denial of shipments, decommissioning and waste management; as well
as nuclear security and verification activities. Several member
states also commented on the Agency's need for resources.


5. (SBU) Ambassador Schulte delivered a wide-ranging U.S. statement
on transforming President Obama's vision articulated in Prague of a
world free of nuclear weapons, strengthening the nonproliferation
regime and combating nuclear terrorism into a "new spirit of
Vienna." To realize this, Ambassador Schulte called for ensuring
increased resources and authorities for the IAEA; continuation of
investigations in Iran and Syria and support for denuclearization in
the DPRK, establishment of nuclear fuel banks as part of a new
framework for civil nuclear cooperation, and support for the IAEA
nuclear security program. (Full text available at
www.vienna.usmission.gov.)


5. (SBU) Argentina, on behalf of the Group of 77 and China,
appreciated the work of the Agency in supporting nuclear power with
more than 50 states planning to introduce nuclear power, as well as
non-power activities, in particular, food and agriculture programs
and the Program of Action for Cancer Therapy (PACT.) The Group also
reiterated the importance of nuclear safety, commending the Agency
for its work in the revision of international basic safety standards
(BSS),and noting the results of an emergency exercise conducted in
Mexico in July 2008, known as ConvEx-3. Bolivia, speaking on behalf
of GRULAC likewise highlighted IAEA assistance with the expansion of
nuclear power in the region, nuclear applications, and safety
activities including radiation and transport safety/the issue of
denial of shipments. GRULAC noted, in particular, IAEA programs
related to development of nuclear infrastructure, review of Member
States nuclear regulations, and establishing import-export guidance
for radioactive sources. Finally, GRULAC noted it was pleased with
the IAEA's broad TC program in 2008.


6. (SBU) Several other states, including developing countries such
as Egypt and India, highlighted the growth of nuclear power and
support rendered by the IAEA TC program. China applauded the
Agency's nuclear energy promotional efforts and confirmed plans to
increase its nuclear power generation to 25,300 MW. Uruguay
heralded innovations in small and mid-size reactors to fulfill the
demand for nuclear power, while others (including Russia, India, and
France) specifically cited such efforts by INPRO. Nuclear safety
and security was also the focus of many interventions. Speaking in
its national capacity, Argentina noted IAEA programs on radiological
protection and safety and security training. Ireland called for a
greater emphasis on nuclear transport safety issues, and New Zealand
was critical of the report's coverage of maritime transport safety,
in particular. Noting the transit of nuclear materials via the Suez
Canal, Egypt called for adherence to transport and liability
guidelines. Speaking as non-Board members under Rule 50, Morocco
also focused on nuclear safety and security, while the ROK linked
the global increase in nuclear power to implementation of the 3Ss
(safety, security, safeguards).


7. (SBU) Concerning safeguards, Algeria and Argentina were notably
skeptical about the "disproportionate" focus in the Annual Report on
implementation of the Additional Protocol. Argentina stressed the
AP was voluntary and was concerned over the Agency's
characterization of safeguards conclusions for states without
Additional Protocols. Algeria saw the focus on APs as an
"imbalance" that discounted efforts of states to live up to their
CSAs, and called for implementation of NPT Revcon decisions on a
NWFZ in the Middle East (Comment: Although Algeria has signed an
AP, it seemed to echo Egypt's stance on linking adoption of an AP to
progress on a NWFZ. End comment.) Egypt complained about the
inability of the IAEA to apply safeguards in non-NPT parties and
called for disarmament by nuclear weapons states.


8. (SBU) Also taking the floor under Rule 50, Israel delivered a
short intervention asking for the deletion of para 17 on page 82 and
para 81 on page 14 of the Annual Report (i.e. references to Israel's
destruction of the Al Kibar site in Syria) as they did not conform
to the Agency's standards and practices and were not based on
evidence. No one responded to this intervention which left Arab
delegations paging through the report. (Comment: According to the
Israeli Ambassador, the basis for Israel's citatation of IAEA
"practices" is the DG's previous reluctance to explicitly name
states other than the target state when reporting on
verification-related investigations. End Comment) Israel delivered
a similar intervention under the Safeguards Implementation Report
agenda item before launching a wholesale offensive under the Syria
item that prompted the DG's response (ref d).

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Agenda Item 3: TC Report for 2008
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9. (U) TC DDG Ana Mara Cetto summarized the Technical Cooperation
Report for 2008 (GOV/2009/27),highlighting major areas of activity
for the TCP in 2008, namely: health-related projects, food and
agriculture initiatives, and nuclear safety, i.e. decommissioning of
nuclear waste. Cetto noted the increasing interaction between the
IAEA and other United Nations offices, and asserted that the
effectiveness of TC projects increased substantially in 2008 because
of closer linkages between recipient countries' requests and
respective priorities as listed in Country Program Frameworks
(CPFs).


10. (U) Canada and some G-77 countries expressed dissatisfaction
with the geographic distribution of TC funds and called for a review
of distribution. Canada noted that Europe receives the most funding
even though most of its membership is developed. Spain considered
the low percentage of TC funds for Latin America insufficient and
was joined by Mexico in calling for more funding for the region.
The Czech Republic, on behalf of the European Union, called for the
redistribution of resources in order to support the most
disadvantaged countries and regions. As usual, the G-77 reiterated
its call for "sufficient, assured, and predictable" fundQg for TC
activities. The U.S. and UK called on Member States to pay in full
and on time any shares of the TCF or National Program Costs.
Several Member States expressed concern about the lower rate of
attainment in 2008 while many emphasized that the objective of the
rate of attainment mechanism is to reach 100 percent. China and
Spain called on the Secretariat to protect TC funds from currency
fluctuations while Switzerland went further to suggest TC funds be
switched to a "more stable" currency than the U.S. dollar, but did
not specify which currency. Egypt and Malaysia suggested that the
extra-budgetary, voluntary nature of some TC funding is deleterious
to the Program's effectiveness and joined the G-77 statement is
calling for predictable funding.


11. (U) A number of G-77 countries and China took issue with DDG
Cetto's announcement that CPFs would have to be modified every five
years and are considered by the Division to be the guiding documents
for a countries TC priorities. G-77 members and China argued that
CPFs are not legally binding documents and Member States should not
be forced to strictly adhere to them or update them on a regular
basis. The EU called for CPFs to be made available to all Member
States so potential donors could get a more detailed picture of a
country's TC priorities. DDG Cetto did not comment on whether CPFs
would be released in the future.

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Agenda Item 7: Designation of Board Members
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12. (U) Pursuant to Article VI.A.1, the Board of Governors approved
by consensus the designation of 13 countries to serve as Board
members for 2009-2010: Australia, Brazil, Canada, China, France,
Germany, India, Japan, Russian Federation, South Africa, Switzerland
(replacing Finland as part of the Western Europe rotation),the
United Kingdom and the United States. Under Article VI.A.1,
designated Board members are the most advanced in the technology of
atomic energy in their respective geographic areas.

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Agenda Item 8: Appointment of the DG
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13. (U) The Board Chair took note of the results of May 25 informal
straw poll for the DG race and informed the Board that none of the
five candidates have withdrawn (including Belgian candidate Poncelet
and Slovenian candidate Petric both of whom received no votes). A
Special Session of the Board will be convened July 2-3 to conduct
the formal vote, beginning with elimination rounds on the morning of
July 2.

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Agenda Item 9: Provisional GC Agenda
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14. (SBU) The Director General consulted the Board of Governors on
the Provisional Agenda for the 53rd IAEA General Conference in
September. Only the United States made a short statement taking
note of the agenda item on Application of Safeguards in the Middle
East and encouraging a holistic approach to safeguards
implementation and compliance in the region. The U.S. welcomed
constructive consultations in the hopes of achieving consensus.
Arab delegations were silent. The Arab Group can request the
introduction of an additional agenda item on "Israeli Nuclear
Capabilities" up to 30 days prior to the General Conference.

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Agenda Item 10: GC/Representation of Other Organizations
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15. (U) The Board approved by consensus three new requests for
accreditation as observers to the 2009 General Conference on the
part of the OPEC Fund for International Development, The Center for
Nonproliferation Studies and the U.S. Civilian Research and
Development Foundation, in addition to the previously accredited
organizations listed in GOV/2009/21.

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Agenda Item 11: De-restriction of Board Documents
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16. (SBU) Cuba, speaking on behalf of the NAM, supported the
maintenance of the two-year de-restriction policy for Board
documents, approved by the Board in 1996 as per GOV/2009/25. The
NAM statement stipulated that the Board should only de-restrict a
document before two years on an "exceptional" basis, and should do
so only with the consent of the state or states discussed in the
report. The NAM also expressed concern regarding the security of
information provided by member states to the agency and agency
documents published on the restricted GovAtom website. Cuba
subsequently reiterated these points in a national capacity. The
United States observed that the current policy has served the Board
well and did not need to be altered, while reasserting the Board's
authority to de-restrict documents earlier or later than the end of
the normal two-year period. Canada seconded the U.S. position and
stated that the policy should be adjusted on a case-by-case basis.


17. (SBU) The Board Chair's summary of this short debate reflected
that the Board upheld the current policy and that any decision to
de-restrict documents prior to the two year policy should be made on
an "exceptional basis." The summary also noted that "several
members" took the view that Board documents should be de-restricted
prior to two years "only with the agreement of the country or
countries concerned." Canada objected to this summary noting that
some states did not want to grant the states concerned "veto power"
over de-restriction of Board documents (Note: The NAM position
reflects Syria's objection to release of the DG report on Syria. End
Note.) Australia also requested that the summary reflect the fact
that not all states supported early de-restriction only on an
"exceptional basis." The Chair insisted (inaccurately) that
Australia's view was reflected in the summary. Closing the debate,
Iran stated that in order for a document to be balanced and fair, it
must be made public. (Comment: The Board Chair and Secretariat had
sought to shelve this agenda item, inserted by the NAM, with minimal
debate and reaffirm existing policy. Since there was no resolution
amending that policy, the Board's 1996 decision stands. End
comment.)

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Any Other Business
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18. (U) Japan spoke under AOB in support of Iraq's request, seconded
by the U.S. during the SIR report discussion, for an agenda item at
the September Board on Iraq's safeguards compliance pursuant to
UNSCR 707 (ref b). At the conclusion of the AOB statements, the
Director General reiterated his view that this was an issue for the
UN Security Council and that placing the issue on the agenda for
September was premature given that Iraq has not brought its

Additional Protocol into force. Without an AP in force, the DG
could not draw a broad conclusion as to the completeness of Iraq's
declarations and the absence of undeclared nuclear material.


19. (U) The United States and The Netherlands, speaking under Rule
50, highlighted the Global Initiative to Combat Nuclear Terrorism
(GCINT) Plenary being held at the Hague. The United States noted
IAEA participation in GCINT and the IAEA's crucial role in promoting
nuclear security best practices. The Netherlands noted its pledge
of 250,000 Euros to the IAEA nuclear security fund made at the GINCT
Plenary on June 16.


20. (U) Also under AOB, Canada updated the Board on the recent shut
down of its medical isotope-producing reactor at Chalk River and the
peer review of Canada's nuclear safety. Full information on the
cause and implications of the reactor shut down will be unavailable
until the ongoing investigation concludes, Canada noted. Canada
added that the peer review group found Canada's Canadian Nuclear
Safety Commission does an "effective job," and the Canadian
government is now implementing the peer review recommendations.


21. (SBU) Finally, Serbia reported that on June 10 that the EU,
Serbia, and Russia signed a nuclear energy cooperation agreement and
that it is preparing to begin decommissioning work at Vinca in the
fall and was testing relevant equipment. Serbia noted that
technical cooperation assistance from the IAEA played a major role
in facilitating these projects.

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Senior Personnel
--------------


22. (SBU) In closed session during the Board meeting the Director
General informally consulted Governors on the following appointments
to senior positions:

-- Director, Division of Operations C, Department of Safeguards:
Nobuhiro Muroya (Japan). The DG noted Muroya's long experience in
safeguards matters and his strong reputation among peers (we agree).


-- Director, Division of Nuclear Power, Department of Nuclear
Energy: Jong Kyun Park (ROK). Looking at the USDEL, ElBaradei noted
that Park has studied in the U.S. then spent ten years working in a
series of U.S. utilities.

-- Representative of the Director General to the UN and Director of
the NY office, Office of External Relations and Policy Coordination:
Geoffrey Shaw (Australia) (Note: Mr. Shaw, a respected
interlocutor, was a former senior advisor to DG ElBaradei. End
Note.)