IAEA/BOG: September Board Preview and Analysis

UNCLAS UNVIE VIENNA 000397

SENSITIVE
SIPDIS

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


E.O. 12958: N/A
TAGS: AORC KNNP IAEA ENRG TRGY
SUBJECT: IAEA/BOG: September Board Preview and Analysis

Ref: a) UNVIE 377 b) STATE 76708 c) STATE 80019 d) STATE 83455 e)
STATE 85122 f) UNVIE 301

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Summary
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1. (SBU) The traditional focus of the September 7-11 Board of
Governors meeting is preparation for the IAEA General Conference
(GC) the following week. The Board approves DG reports in core
programmatic areas: nuclear safety, security and nuclear
applications. However, we expect this will largely be "the Iran
Board" with deliberations on Iran anticipated to overshadow the rest
of the agenda, especially given Iran's eleventh-hour gambit to be
seen as cooperating with technical safeguards requirements it had
been shirking, and given the timing of the Board just before the
September P5+1 stock-taking exercise on the margins of the UNGA. In
addition, consideration of the DG's report on Middle East Safeguards
will help set the stage for the contentious GC debate on that issue.
Although assured supply of nuclear fuel has once again been
relegated to "Any Other Business" (after being a formal agenda item
in June),USDEL will use this Board discussion as a further
opportunity to address G-77 concerns and steer the fuel banks issue.
Our primary objectives for this Board session will be to:

-- Spotlight Iran's repeated failures to comply with its
obligations, including with respect to possible military dimensions,
and consign any last-minute Iranian gestures toward the IAEA to
their proper context.

-- Use the debate on the Nuclear Security Plan to highlight nuclear
security as a core IAEA function in furtherance of President Obama's
goal of securing all vulnerable nuclear material within four years.

-- Advance practical dialogue with the G-77 on fuel banks.

-- Continue to focus on the Syria investigation as an issue
affecting the credibility of the NPT and IAEA safeguards.

Iran and Syria will be previewed septel upon the issuance of the
respective DG reports. We expect only a formulaic Board debate on
DPRK given the lack of new developments, as previewed ref a. All
other agenda items are covered below. End Summary.

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Agenda Item 1: DG's Introductory Statement
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2. (SBU) The Director General's statement will cover all issues on
the agenda and frame the Iran report. We have been told that
ElBaradei plans to use his General Conference opening address for a
major overview of global issues, and expect the Board remarks to be
comparatively low-key. USDEL will be particularly attuned to how
the DG characterizes Iranian cooperation and what emphasis he gives
issues related to possible military dimensions. In the aftermath of
recent budget discussions, constructive comments by the Director
General on the importance of nuclear security could reinforce this
as a core IAEA function. Although fuel banks are not on the agenda,
whether and how much ElBaradei engages this issue in his penultimate
statement to the Board (and his remarks to the GC the following
week) will be indicative of how much he still views it as part of
his "legacy." Lastly, ElBaradei may wade into the Middle East
Safeguards issue and refer to his proposal to convene a Forum after
the General Conference, noting that Egypt has accepted the revised
agenda (thus implying that Israel is the stumbling block.) No U.S.
statement is necessary or appropriate. USDEL should address these
issues under the corresponding agenda item.

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Agenda Item 2: Applications for Membership
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3. (U) The IAEA Secretariat does not expect any applications for
membership and this item is likely to be dropped from the agenda.
Mission will advise if any applications are received prior to the
Board.

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Agenda Item 3: Nuclear Safety
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4. (U) The Board is asked to take note of the report by the Director
General, "Measures to strengthen international cooperation in
nuclear, radiation, transport and waste safety". (GOV/2009/48) The
report, issued pursuant to last year's GC safety resolution, is an
update of the IAEA's safety-related activities.


5. (U) Recommendation and Action Request: The U.S. should join
consensus in taking note of GOV/2009/48 and make a strong statement
highlighting the following important areas of IAEA activity:

-- Opening by Ambassador: The safety statement is the first U.S.
statement on the agenda and will be the first time Ambassador Davies
speaks to the Board in his official capacity. The remarks therefore
should open with an introduction and a personal statement from the
Ambassador concerning his new position and the direction given to
him by the Obama administration.

--Conventions: The U.S. should congratulate the IAEA for hosting the
third review meeting of the Joint Convention on the Safety of Spent
Fuel Management and on the Safety of Radioactive Waste Management.
The Joint Convention review process is a crucial mechanism for
recognizing and disseminating best practices. The U.S. should
encourage all nations planning or currently operating nuclear energy
programs to ratify the entire range of nuclear safety instruments.

--Nuclear Liability: The U.S. should stress the importance of the
global nuclear liability regime, and remind member states of the
DG's recent exhortation "to give due consideration to adhering to
the CSC". Universal membership of the CSC will send a clear,
confidence-building signal about responsible use of nuclear energy.
(The U.S. should also recognize a strong liability regime as a
foundational underpinning of any proposal for the reliable access to
nuclear fuel.)

-- New Entrant Countries: Countries using nuclear power for the
first time will comprise a significant portion of nuclear industry
growth in the near future. These countries must be supported and
encouraged to develop strong safety infrastructures. The U.S.
should stress that countries developing nuclear power must have a
strong independent regulator and that this regulatory body must be
set up and functioning early in the process. Regulatory
infrastructures should not be limited to nuclear power generation,
but should apply to the safety and security of all nuclear material
used in the country. The U.S. should encourage the IAEA to continue
and expand its capacity-building and review services. Programs such
as Operational Safety Review Team (OSART) missions and the
Integrated Regulatory Review Service (IRRS) are critical to ensuring
safety standards compliance.

-- Safety and Security of Radioactive Sources: The U.S. should note
that successful implementation of safety and security regimes will
require an integrated approach. To this end, U.S. should welcome
the IAEA's use of a mobile hot cell to remove disused high activity
sources and process them locally.

-- Safety in Uranium Mining: The U.S. should complement the IAEA on
the development of Uranium Production Site Appraisal Team (UPSAT)
review missions. This service helps Member States plan their mining
programs in a safe and environmentally friendly way.

-- Emergency Preparedness: In the unlikely event of a radiological
emergency, the IAEA has developed the capacity to quickly marshal
specialized response resources from around the world. The U.S.
should note the coordination role of the IAEA Incident and Emergency
Centre (IEC) and encourage states to register their capabilities
with the Response Assistance Network (RANET).

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Agenda Item 4: Nuclear Security
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6. (U) The Board will have before it two documents: the Nuclear
Security Report 2009 (GOV/2009/53) and the Nuclear Security Plan
2010-1013 (GOV/2009/54). The Board will also review a third, much
longer document intended for publication on the internet, titled,
"Implementation of the IAEA Nuclear Security Plan 2006-2009:
Progress Report".


7. (U) The Secretariat has worked hard to ensure there is no overlap
between the three documents, shortening the 2009 Nuclear Security
Report by two-thirds and shifting the focus of the Nuclear Security
Plan 2010-2013 away from scene-setting information. Much of the
background, judgments, and cooperative activities pruned from these
two reports will be subsumed in the longer internet publication. In
particular, the internet publication will contain references to
initiatives such as the Global Initiative to Combat Nuclear
Terrorism (GICNT) and World Institute for Nuclear Security (WINS),
which were previously removed from the Nuclear Security Plan at the
behest of strong-minded Member States. The fact that this longer
document will be posted to the internet rather than formally
approved by the Board allows the Agency to use more discretionary
language.


8. (SBU) All three documents reflect sensitivities about the role of
nuclear security at the Agency. For example, countries that receive
security training and equipment are often only identified by region,
if at all. This practice impedes Agency efforts to achieve general
acceptance of the nuclear security culture. Washington should
consider using the U.S. statement to invite all States to openly
share their experiences with the IAEA's Office of Nuclear Security
and embrace the benefits that a transparent and cooperative security
culture can bring to all Member States.


9. (SBU) Recommendation and Action Request: The U.S. should join
consensus in welcoming and taking note of these reports,
transmitting them to the GC with a recommendation that Member States
contribute to the Nuclear Security Fund (NSF). The U.S. should also
support adherence to the Amendment to the Convention on the Physical
Protection of Nuclear Material (CPPNM) and urge States to
participate in the Illicit Trafficking Database Programme (ITDB).
(Note: The U.S. is a signatory to the CPPNM but not the Amendment.
End Note.) USDEL should make a strong statement underlining the
importance of security programs and highlighting the following
activities:

-- Physical Protection: The U.S. should support progress on the
fifth revision of INFCIRC 225. Revision five will greatly increase
the international community's ability to interpret, develop, and
implement a physical protection regime.

-- Security Culture: Institutionalizing security best practices
stems from a strong security culture. The U.S. should continue to
support education and training programs, Integrated Nuclear Security
Support Plans (INSSPs),and nuclear security missions.

-- Border Controls and Coordination: The U.S. should strongly
support agency work on border monitoring systems and encourage
member states to join coalitions such as GICNT. States should make
full use of the Illicit Trafficking Database (ITDB).

-- Waste Repatriation: U.S. should stress the importance of
accounting for all nuclear materials and highlight the work of the
Global Threat Reduction Initiative (GTRI). In particular, U.S.
should note a 2009 contribution was recently increased to a total of
USD 7 million toward the clean-up and repatriation of spent fuel
stored at the Vinca Institute of Nuclear Sciences.

-- Budget: The U.S. statement should welcome the 3.1 million Euros
in regular budget funding allocated to the Office of Nuclear
Security for 2010. Despite this progress, there are indications
that voluntary funds may be in decline. While the U.S. should
welcome stability for nuclear security through regular budget
funding, we should recognize that nuclear security is a large
program, and the demands for services far exceed current funding.

-- Nuclear Security Summit: The U.S. statement should preview the
March 2010 Nuclear Security Summit in Washington, D.C. and the
preparatory meetings during the IAEA General Conference in
September.

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Agenda Item 5: Nuclear Applications
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10. (U) The Board is asked to take note of a report by the Director
General, "Strengthening the Agency's Activities related to Nuclear
Science, Technology, and Applications" (GOV/2009/49),and authorize
the Director General to submit it to the GC. This document is a
compilation of eight annexes, the first four of which provide
updates on the IAEA's work in non-power applications of nuclear
energy, including insect pest management, cancer therapy, isotope
hydrology, and environmental protection. The African Union's Pan
African Tsetse and Trypanosomosis Eradication Campaign (AU-PATTEC)
reported progress on the six "list-I" countries' projects and
continues to develop and disseminate SIT technology. The Programme
of Action for Cancer Therapy (PACT) stressed its support of
cancer-control capacity building and has set a five year goal of
delivering concrete benefits to patients. In isotope hydrology, the
IAEA continues to raise awareness and develop new techniques. The
agency also underlined its role in combating climate change, citing
its recent document "Climate Change and Nuclear Power 2008" and its
attendance at the Commission on Sustainable Development.


11. (U) Regarding nuclear power applications, the report provides an
overview of the IAEA's activities in the areas of nuclear energy,
potable water production using nuclear reactors, infrastructure
development, Small and Medium-sized Reactors (SMRs) development and
deployment, and activities under the International Project on
Innovative Nuclear Reactors and Fuel Cycles (INPRO). The report
notes that the Agency has revised high and low projections upwards
in 2009. The IAEA projects that 10 new countries will operate
nuclear power plants by 2020 and additional 15 countries will do so
by 2030. In the last three years, the number of Member States
requesting Agency's assistance and considering introduction of
nuclear power has grown to more than 60. Among key events and
activities, the report notes the April 2009 Ministerial Conference
on Nuclear Energy in Beijing. The IAEA also released special
publication, Climate Change and Nuclear Power 2008.


12. (U) Regarding INPRO, the report notes that INPRO structures have
been streamlined to increase flexibility and activities were
consolidated into five major areas, which form the basis for action
plan for 2010-2011. Since the 52nd GC, the Agency published two
documents in 2009: "Lessons Learned from Nuclear Energy System
Assessments (NESA) using the INPRO Methodology" and "Common User
Considerations (CUC) by Developing Countries for Future Nuclear
Energy Systems: Report of Stage 1."


13. (U) In the area of infrastructure development, the IAEA formed
the Nuclear Power Support Group (NPSG) to facilitate
cross-developmental coordination. In late 2008, the Agency
published "Evaluation of the Status of National Nuclear
Infrastructure Development" which is closely related to the
"Milestones in the Development of a National Infrastructure
Development for Nuclear Power" published in 2007. The Agency also
created a new service, "Integrated Nuclear Infrastructure Review
(INIR)" Missions. INIR missions are IAEA-coordinated peer reviews
conducted by teams of international experts on the basis of
Evaluation of the Status of National Nuclear Infrastructure
Development. They are intended to help a country identify gaps
between milestones and the current level of development of nuclear
programs. Finally, the report notes that the IAEA continues to
encourage the development and deployment of safe, secure,
economically viable and proliferation resistant SMRs to interested
developing countries.


14. (U) Recommendation and Action Request: The U.S. should join
consensus in authorizing the DG to submit GOV/2009/49 to the GC.
USDEL should deliver a strong statement highlighting our support for
IAEA assistance to developing countries on nuclear techniques, in
particular, highly successful programs such as PACT. The IAEA
should be encouraged to foster meaningful partnerships in these
areas which leverage its unique capabilities. The U.S. statement
should highlight nuclear energy as a clean, safe and competitive
technology that makes important contributions to sustainable energy
development, health, prosperity, and climate change. The U.S.
statement should welcome the formation of the Nuclear Power Support
Group to facilitate internal and external coordination and support
INIR missions, which will give positive and constructive feedback to
countries embarking on nuclear power.

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Agenda Item 6a: Safeguards Agreements and APs
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15. (U) The Board will be asked to approve a Safeguards Agreement
(GOV/2009/60) and Additional Protocol (AP) (GOV/2009/61) with the
Republic of Congo and an Additional Protocol with the Republic of
Vanuatu (GOV/2009/47). Mission will advise if any other agreements
are submitted prior to the Board meeting. Recommendation and Action
Request: Mission recommends that USDEL join consensus in approving
any safeguards agreements or Additional Protocols that conform with
the models. USDEL may deliver a brief optional statement in support
of universalization of the Additional Protocol and noting the entry
into force of the U.S. AP.

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Agenda Item 6b: Agency Staff as Inspectors
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16. (U) The Board will be asked to approve the designation of Agency
staff as safeguards inspectors, some of whom will be new staff and
others existing staff taking on inspection responsibilities.
Mission will provide the relevant curriculum vitae of the
individuals to Washington agencies for appropriate background
checks. As the United States agreed to the modified designation
procedure, the individuals will be automatically designated 60 days
after the Board meeting unless we raise an objection. No action is
required at this Board meeting.

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Agenda Item 7a: Middle East Safeguards
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17. (SBU) The Board will take note of the Director General's annual
report on the "Application of Safeguards in the Middle East"
(GOV/2009/44) prepared pursuant to the 2008 GC Middle East
Safeguards (MES) resolution (GC(52)/RES/15.) The structure of this
year's report differs markedly from previous years in selectively
citing paragraphs of the 2008 MES resolution. The most glaring
omission is the Israeli-authored amendment on compliance, which
"Calls upon all States in the region of the Middle East to comply
with their international obligations relating to safeguards and to
cooperate fully with the IAEA." Since the resolution requests the
Director General to report on "implementation of this resolution,"
compliance should have been addressed. The only reference to
compliance in the report relates to regional mechanisms in other
NWFZs. Appended to the report are the Secretariat's proposal to
hold a Forum on September 23-25 and the revised agenda, along with
responses received from Egypt and Israel. Egypt indicates its
preliminary acceptance of the revised agenda (which incorporates its
requested revisions) and trumpets its flexibility. In so doing,
Egypt will likely seek to portray Israel as the recalcitrant party
in blocking the Forum. In its response, Israel supports the 2004
Forum agenda and objects to the deletion of references to the Forum
not being "a forum for negotiation" and the experience of other
NWFZs, as well as to the proposed date. Israel's response also
highlights compliance and underlines a consensual outcome on Middle
East issues in the General Conference as "indispensible." Despite
the failure to agree on the agenda, the DG report is more
forward-leaning than previous reports in citing "a convergence of
views" on convening a Forum. It notes that the DG will continue
consultations with a view to holding a Forum as soon as practicable.



18. (SBU) Recommendation and Action Request: USDEL should be
prepared to deliver a statement seconding the view that compliance,
as called for in the 2008 MES text, is a necessary element for a
Middle East NWFZ. The U.S. statement should deflect likely Arab
Group efforts to ascribe blame to Israel. However, the emphasis of
any U.S. statement should be on finding consensus and common ground
on Middle East issues in the General Conference. USDEL should have
flexibility as to delivering this statement, in particular, if it
would be counterproductive in the context of ongoing negotiations
for a new consensus approach on the Middle East in the General
Conference.

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Agenda Item 7b: Personnel Matters
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19. (U) The Board will have before it two documents: Staffing of the
Agency's Secretariat (GOV/2009/14) and Women in the Secretariat
(GOV/2009/15). The first document is a candid assessment of the
IAEA's challenges on the personnel front, including the important
notification that 44 percent of regular posts will become vacant
between now and 2016. The Agency's rotation policy, mandatory
retirement age and highly specialized work all contribute to the
looming problem of vacancies. The Secretariat rightly views this
challenge as a potential opportunity for improving overall
excellence of staff through the recruitment process. The U.S.
welcomes the Secretariat's expansion of long-term recruitment
programs, such as the Junior Professional Officer (JPO),Fellowship,
and Intern programs.
More immediately, the Secretariat needs to speed up the hiring
process to improve its reputation as an elite employer. That said,
the problem sometimes has more to do with the slow-paced style of
individual managers than bureaucratic processes. The situation of
Americans employed at the IAEA has improved incrementally but we are
still underrepresented: Out of 782 regular staff members in the
professional and higher categories, the IAEA employs 91 Americans.
This represents only 11.6 percent, a proportion less than half of
out 25 percent assessed contribution.


20. (SBU) The Agency deserves credit for the genuine efforts exerted
to promote and recruit women in a field where they are traditionally
underrepresented. The Secretariat has taken a creative and
aggressive approach and the issue has received the public,
high-level attention of DDG David Waller. U.S. Mission has assigned
a "Point of Contact" for womens' issues per the Secretariat's
recommendation, and encourages other Missions to do the same.


21. (SBU) Recommendation and Action Request: The United States
should join consensus in taking note of these reports and
recommending their submission to the General Conference. Statements
are welcome, particular on item (i).

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Agenda Item 8: Tribute to Director General
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22. (U) The Board is asked to recommend a "Tribute to Dr. Mohammed
ElBaradei" resolution to the General Conference. This hortatory
resolution recognizes ElBaradei's contributions, recalling the award
of the 2005 Nobel Peace Prize to the IAEA and Director General, and
confers on ElBaradei the title "Director General Emeritus of the
International Atomic Energy Agency." Previous DGs Eklund (in 1981)
and Blix (in 1997) also received the title.


23. (SBU) Recommendation and Action Request: USDEL should join
consensus on recommending the resolution to the GC and may deliver a
short optional statement expressing appreciation for the Director
General's service to the IAEA, should other delegations do the same.


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AOB: Assured Supply of Nuclear Fuel
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24. (SBU) Mission is supporting the outreach and "listening
campaign" instituted through instructions (refs b-e). IAEA
Secretariat confirmed August 13 that its paper commenting on the
issues raised in the June Board discussion under "Assurance of
Supply" (ref f) would be released in time for discussion at the
September board. We requested of the Secretariat that the paper be
indicated as a topic of discussion by inclusion of a tick with its
title and document number under the AOB entry in a revised agenda.
Mission has encouraged supportive parties - Philippines, Kuwait,
U.A.E., UK, EU Presidency Sweden - to endorse this procedural step.
We were told by the Secretariat a UK paper on the UK/URENCO concept
for guaranteed export licensing as an assurance of supply will be so
noted on the agenda.


25. (SBU) USDEL should have a prepared statement on this topic,
which may draw on the themes and talking points in refs b-e and
could state, inter alia:

-- practical means by which fuel assurance mechanisms would help
increase access to civil nuclear power by lowering the cost,
liability, and technical hurdles to be overcome in a nation's
planning and progress toward operating safe, reliable nuclear power
plants;

-- U.S. thoughts on political triggering scenarios - partially in
reply to the sanctions issue raised by Brazil in the June Board (ref
f, para 25) and question from Argentina in bilateral civil nuclear
talks two weeks later;

-- U.S. interest in hearing from leading nuclear states among the
G-77 and intending nuclear newcomers about implementation issues of
concern to them and their proposed solutions; and

-- that commercial and state-to-state transfers of low enriched
uranium (LEU) occur under a prevailing regime of supplier-state
national nonproliferation laws and regulations. Consistent with
Statue Article IX C., criteria for transfer of LEU from an
IAEA-administered "last resort" mechanism should respect and not
circumvent Member State laws.

-- that the Russian proposal, in particular, appears ready for
formal consideration and should be presented to the Board as a
decision item as soon as possible.

PYATT