IAEA SAFEGUARDS: "FUTURE OF THE AGENCY"

UNCLAS UNVIE VIENNA 000434

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: AORC IAEA KNNP
SUBJECT: IAEA SAFEGUARDS: "FUTURE OF THE AGENCY"
DISCUSSION, SEPTEMBER 3-4, 2009


1. (SBU) Summary: The two days of informal "Future of the
Agency" discussions in the IAEA Board Room on the topic of
"Safeguards and Verification" rehashed many North-South
issues, with Iran voicing a list of complaints while the IAEA
defended itself and Western allies insisted on the importance
of the Additional Protocol and strengthened safeguards
generally. Egypt and Cuba intervened, but sounded
relatively more balanced; Egypt occasionally contradicted
Iran. The issues raised by the three NAM leaders included:
the primacy of the promotional role of the IAEA (i.e.,
peaceful uses of nuclear energy); lowering the contributions
of developing states for funding safeguards; concerns over
confidentiality, and in this connection, CFEs; the need to
address disarmament; that voluntary measures not be turned
into legal obligations; inclusion in the SIR of member states
views. When it came to actual safeguards there were no
objections to the usual prescriptions: advanced technology,
taking advantage of the AP, modernizing SAL, enhanced
cooperation with State systems of accounting for and control
of nuclear material (SSACs),information-driven safeguards,
designed-in safeguards.


2. (SBU) Summary Continued: This session on verification was
the sixth in a series of discussions on the Future of the
Agency, which were billed as informal, with any potential
recommendations to be by consensus. The chairman called for
a next meeting on October 12 -13, on the issue of Policy and
Management; he noted that this discussion might take only one
day, and there was no objection to the suggestion that a
cross-cutting discussion or general exchange of views on all
the topics might take place afterwards. Another meeting was
scheduled for November 19 and 20, before the annual Technical
Assistance and Cooperation Committee meeting. End summary.


3. (SBU) The first morning of the Safeguards and Verification
meeting in the "Future of the Agency" series was taken up
with opening statements and some explanations by the IAEA
Secretariat; from there the chair (Brazilian Ambassador
Guerreiro) followed a list of questions and issues compiled
from member states. Much of the rest of the meeting
reflected the themes of these opening statements.


4. (SBU) The statement of the G-77 plus China read by
Argentina focused on: rejection of the 'primacy' of
safeguards and balance between the Agency's activities; the
assertion that developing countries need to be protected from
increasing safeguards costs; complaints about insufficient
confidentiality, and in this context, the use of Member
State-funded Cost Free Experts, (CFEs); and restrictions on
Technical Cooperation (TC) activities based on safeguards
considerations. The NAM statement, read by Egypt, also
addressed the need for disarmament; the need to distinguish
voluntary or 'transparency' measures from legal obligations;
and the proposal that the annual Safeguards Implementation
Report (SIR) include member state views. Iran intervened,
often at great length, on all of these topics.


5. (SBU) Egypt intervened to flog the NAM views, but
sometimes struck a balanced note in contradiction to Iran.
Directly after Iran decried the possibility that safeguards
considerations might inhibit TC projects, for example, Egypt
said it accepted the notion that TC projects must be
safeguards-vetted. When Iran argued that the IAEA Statute
made no reference to obligatory safeguards, Egypt came back
and agreed with Germany that of course NPT safeguards are a
legal obligation. Cuba also intervened on behalf of issues
like disarmament, but also sounded more balanced than did
Iran.


6. (SBU) Expressions of support for the importance of
effective safeguards and the Additional Protocol (AP) to
Comprehensive Safeguards Agreements came from Germany,
France, Japan, Canada, Australia, the U.S., ROK, and Ireland;
China supported the AP and the need to maintain the IAEA's
technical capability. One or more of these states supported
the vetting of TC projects, supported the need for
transparency, rejected the idea of integrating member states'
views into the SIR, and supported the current assessment
system. When it came to actual safeguards implementation
topics, there were views expressed in favor of the usual set
of ideas for improving safeguards: the AP, better technology,
enhanced cooperation with the States' Systems of Accounting
and Control (SSAC),improvements to the Safeguards Analytical
Laboratory (SAL),advanced safeguards methods. Special
inspections, and the issue of collecting and analyzing
information on nuclear supply networks was discussed briefly
and inconclusively. There were no real objections to any of
these ideas, but neither were there any serious, substantive
discussions on ground-breaking topics like new authorities.
(Comment: The risk of going backward rather than forward on
these issues, as happened in "Committee 25," may have led

strong supporters of safeguards to steer clear of using this
forum for bold ideas. End Comment.)


7. (SBU) There was considerable discussion on the funding of
safeguards. Iran suggested only NPT safeguards in the
non-nuclear weapons states (NNWS) be paid for out of the
regular budget, and posited that everything else was useless
and should be paid for by the state. Along with Egypt, Iran
asked the Secretariat to come up with country-specific cost
estimates for safeguards, suggesting that the states that
benefit from nuclear facilities ought to pay more. The
shielding system (assessment discounts for developing
countries applied since the last plus-up in the safeguards
budget) was discussed. The Secretariat (DDG Heinonen)
pointed out that large portions of safeguards costs cannot be
allocated country-by-country, and in some cases (JMOX in
Japan) the safeguarded state has made large contributions.
IAEA Safeguards Legal Advisor Rockwood pointed out that costs
in the NWS that were voluntary were paid for by the state.
Pakistan noted that INFCIRC/66 (facility-specific) safeguards
agreements are approved by the Board, just as INFCIRC/153
agreements are. Canada asked that if the Agency were to
provide such cost estimates, it ought to be in the context of
other figures indicating both contributions and total
expenditures in each country. Cuba agreed that safeguards
benefit all nations and that the scale of assessments was
fair, but observed that some funding should be based on
state-specific safeguards costs. The Secretariat agreed to
make the estimates available. (Comment: Of all the issues
raised by the G-77 and NAM papers, the budget issue seems the
one least easily dismissed, and the least likely to go away,
especially if safeguards costs continue to rise. End
comment.)


8. (SBU) Iran wanted a Chemical Weapons Convention-like
mechanism to enforce confidentiality rules, and complained
about the leaks from the Board and the restricted-access
GOVATOM website. Canada and Russia said there needs to be a
balance between openness and confidentiality. The
Secretariat noted its strong staff rules on the issue and
noted that it could not control what member states did with
information they are given. Iran complained that Cost-Free
Experts should not be involved with safeguards; the
Secretariat indicated that for the most part such experts
were given specialized tasks not related to safeguards
evaluation or inspection, and moreover were bound by the same
confidentiality agreements as the staff.


9. (SBU) Comment: The safeguards installment of Future of the
Agency provided another unfortunate illustration of the
rehearsed ideological divide between some leaders of the
Non-Aligned Movement and Group of 77 on the one hand and
Member States with a nonproliferation focus on the other.
Mercifully, attention on the Board of Governors and General
Conference meetings of the two weeks immediately following
this session overwhelmed this event; the discussions reported
here likely changed few minds in either direction on the
issues of safeguards' funding, intrusiveness, or legal
limitations. Our key challenge for the weeks ahead is to win
the support of key swing states like Brazil, South Africa,
India, and Mexico that share many of our perspectives and are
better placed to exercise a moderating influence on NAM and
G-77. End Comment.


10. (U) Mission thanks ISN/MNSA's Jonathan Sanborn for his
preparation for and participation in USDEL in this meeting.
DAVIES