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