NUCLEAR FUEL BANKS - FEW VOICES LIKELY TO RISE IN

C O N F I D E N T I A L SECTION 01 OF 02 UNVIE VIENNA 000419

SIPDIS

STATE FOR T, S/SANAC, ISN/NESS, IO/GS
DOE FOR NA-243 GOOREVICH, OEHLBERT, SYLVESTER
NSC FOR SCHEINMAN, HOLGATE
NRC FOR OIP DOANE

E.O. 12958: DECL: 09/03/2014
TAGS: AORC ENRG PREL KNNP TRGY IAEA NAM
SUBJECT: NUCLEAR FUEL BANKS - FEW VOICES LIKELY TO RISE IN
SEPTEMBER BOG

REF: A. UNVIE 364

B. UNVIE 301

C. STATE 76708

D. STATE 80019

E. STATE 83455

F. STATE 85122

G. STATE 91199

Classified By: Ambassador Glyn T. Davies, reasons 1.4 (b) and (d)


1. (C) Summary: The IAEA Secretariat will not release a
discussion paper on assurance of nuclear fuel supply in time
for the September meeting of the BoG, and few Member States
other than the U.S. appear troubled over this inaction. The
Board Chair wishes to avoid a re-heated version of the June
Board discussion that fails to take the issue forward. DG
ElBaradei indicated offhandedly to Ambassador that the issue
had fallen victim to a North-South divide in the Agency, yet
ElBaradei "hoped" agreement on a mechanism could be attained.
The UK will present a paper on its concept in a September 8
midday briefing and in the Board under AOB. Ambassador
privately urged P5 1 and other like-minded ambassadors to
make national statements calling for engagement on the
practicalities. NSC Senior Director Holgate acknowledged to
EU President Sweden and a pessimistic Germany the G-77/NAM
position, reaffirmed in U.S.-South African talks, that the
matter is "pre-mature". End summary.


2. (C) Despite U.S. demarche (refs A, C) and a parallel
appeal in July by the Swedish EU Presidency's special
ambassador Bjorn Skala, the IAEA Secretariat will not provide
the September 7-11 Board of Governors meeting a paper
commenting on the Board's June discussion of assurance of
nuclear fuel supply. (Comment: In light of IAEA/EXPO Tariq
Rauf's indication to us in late July that ElBaradei had
authorized such a paper, we have expressed disappointment
about its non-availability, which reflects ElBaradei's
decision to slow the debate. End Comment.)


3. (C) With senior Secretariat staff present, Board
Chairwoman Feroukhi (Algeria) explained to Ambassador in
their introductory meeting that the Non-Aligned Movement
(NAM) states wanted the Secretariat's written replies to the
questions raised in the G-77/NAM's June statement (ref B)
before engaging in further discussion. In the absence of the
paper, a call for Board discussion this time, she forecast,
would bring nothing but a repeat of June's statements.
Feroukhi confirmed that the United Kingdom would use the Any
Other Business (AOB) agenda item to make a statement on its
concept and that the floor would be open for others.
Feroukhi added that she wondered if the formality of the
Board made it the best forum for advancing the fuel
assurances issue. The Ambassador noted the need for
advocates to explain the proposals better but said it
"pained" him that we may not advance the discussion under
Feroukhi's chairmanship; he pointed as well to the practical
challenge that "the money is there" for an Agency fuel
assurance mechanism.


4. (C) Mission has been told in weeks past by the EU, U.A.E.
and Kazakhstan that they would speak on the issue in the
upcoming Board meeting. Swedish special envoy Skala told NSC
Senior Director Holgate August 31 the EU was still
deliberating on its statement and wanted to bring about a
"clear procedural path" in the Secretariat and Board for
instituting fuel assurances. The same day, however, German
Ambassador told Holgate he questioned the advisability of
making an EU statement this time in the face of G-77/NAM
antagonism and DG ElBaradei's apparent abandonment of the
issue (more below).


5. (C) DG ElBaradei made only passing reference to fuel
assurances at the outset of his introductory conversation
with the Ambassador September 3. The DG initially seemed to
consign the issue to a category of victims of the North-South
divisions in the Agency, but then corrected himself by saying

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he hoped "we" could still succeed. Earlier in the week,
German Ambassador Luedeking had told NSC Senior Director
Holgate he sensed ElBaradei had given up; whereas in March
the DG wanted a fuel bank to be part of his legacy, it now
seemed to Luedeking that ElBaradei saw its achievement was
not in reach by the time he departs office in November.
Holgate shared with Luedeking and with Swedish MFA Special
Envoy Skala in a separate conversation the very complicated
posture that South Africa's IAEA Governor Abdul Minty had
taken on the issue in U.S.-South African talks the week
before in Pretoria. She said Minty had warned that the NAM
is rigorous in its position that Board consideration of any
fuel assurance mechanism is "pre-mature," but then
(typically) offered himself as a bridge to help build a more
consensual approach to this issue.


6. (C) On September 4 Ambassador informed his colleagues
from the UK, France, Germany, Russia, and China that U.S.
would make an AOB statement encouraging practical discussion
of implementation issues raised in the June Board, and he
asked all others to do the same. He related some of the
effort USG has made in its "listening campaign" demarches in
skeptical capitals. UK Ambassador confirmed that he would
present his government's concept with an AOB statement (and,
in fact, the UK will provide a briefing during the lunch
break on Tuesday, September 8, open to all Member States).
Russian Ambassador Zmeyevskiy stated in contrast that he had
as yet no instruction that Russia would speak on the
assurance of supply issue.


7. (C) Later the same day the Ambassador and Msnoffs
similarly briefed the Ambassadors of Australia, Canada,
Japan, New Zealand, and South Korea. Australia and Canada
reported that in their individual pre-Board consultations
with Chairwoman Feroukhi, she had pitched them strongly not
to speak on the issue in the Board meeting, reasoning that a
rehash of June would be ineffectual or worse. Both
ambassadors said they had the impression Feroukhi had hoped
to dissuade the UK from making an AOB presentation on its
concept (but that under instruction from London this was
going to go forward). Australia noted that assurance of
supply was not a "front-of-the-mind" issue in Canberra and
confirmed it would have no Board statement this time; Canada
also plans no statement.


8. (C) Comment: ElBaradei reportedly warned EU ambassadors
at the early July kick-off of the Swedish Presidency to
recognize G-77/NAM resistance, as evidenced in the June
Board, and not to aggravate that resistance by pressing for
early Board action. Our discussions in Vienna since that
time have suffered an overlay of ElBaradei's presumed sense
of resignation on this topic. We have pressed like-minded
and selected nuclear newcomers, including fuel bank funding
donors Kuwait and the U.A.E., to reinforce with the DG and
Secretariat that they must provide an impetus for more
detailed, technical, and practical discussion. The U.S.
appeal to capitals (refs C - G) to depoliticize the issue is
not yet translating into engagement here. As in the past two
Board meetings, we will work the aisles in the opening days
to drum up as many supportive interventions as possible in
order to go beyond a "placeholder" treatment of the issue.
At this point, however, Russian activism to move toward
formal Board consideration of the Angarsk LEU reserve is the
catalyzing event the USG can best advocate. S/SANAC Einhorn
likewise shared with incoming DG Amano on September 3 our
hope for early progress on the Russian proposal. Amano
agreed that Board approval of the Russian proposal before the
end of 2009 would be a good way to put the issue back on
track. End Comment.
DAVIES