IAEA/RANF: DG CAUTIOUS ON NUCLEAR FUEL ASSURANCE

C O N F I D E N T I A L UNVIE VIENNA 000005 SIPDIS STATE FOR T, IO/T, ISN/NESS, ISN/MNSA, ISN/RA DOE FOR NA-24 SCHEINMANN, GOOREVICH, SYLVESTER; NE-6 MCGUINNESS E.O. 12958: DECL: 01/10/2014 TAGS: PREL ENRG TRGY KNNP IAEA SUBJECT: IAEA/RANF: DG CAUTIOUS ON NUCLEAR FUEL ASSURANCE REF: A. TOKYO 0046 ¶B. 08 UNVIE 639 PARA 21 ¶C. 08 UNVIE 605 Classified By: Ambassador Gregory L. Schulte, reasons 1.4 (b) and (d) ¶1. (U) Embassy Tokyo's ref (a) provides useful information on Japan's preparation of a full-day Seminar on Global Nuclear Fuel Supply, which will take place in the IAEA Board Room Monday, January 26. Mission provided the invitation and first notional program to DOS and DOE offices in mid-December and, on January 8, a still-tentative program of speakers provided by the Japanese Mission. Expected speakers are primarily senior industry representatives, but from the IAEA only a deputy chief of External Relations and Policy Coordination (EXPO) and, perhaps, the Deputy Director General for nuclear energy. At this writing, nearly thirty states have registered participating delegations, most below the level of ambassador. Syria, Argentina, Malaysia, the ROK, Costa Rica, Panama and Mongolia have signaled they will send heads of mission. Ambassador Schulte, other Mission personnel, and an NNSA representative will attend parts or all of the day's proceedings and report accordingly. ¶2. (C) The seminar is getting only measured support from the IAEA, in a reflection primarily of DG ElBaradei's concern that, led by Pakistan and a few other countries, G-77 states remain suspicious of proposed fuel assurance mechanisms and critical of the Secretariat's activist role. A few vocal G-77 states continue to feed suspicion that the assurance of access to fuel will be tied (sic) to forfeiture of the national "right" to acquire enrichment capability. Whether status as a signatory of the NPT would be a criterion for eligibility to receive IAEA-administered fuel is also a quandary for the G-77 and the IAEA, as this criterion would exclude Pakistan (along with Israel and India) and otherwise fail to afford "universal" eligibility for Member States in good standing with the Agency. In an atmosphere he views as "poisoned" by distrust, ElBaradei is proceeding cautiously. In a private January 6 discussion of the DG's priorities for the remainder of his term (on the occasion of the Ambassador presenting the instrument of ratification for the U.S. Additional Protocol, see septel),ElBaradei indicated he did not anticipate seeking Board action on an international fuel bank proposal until September. ElBaradei identified fuel assurances as his top priority, but said "it is a question of timing." He does not want to bring the issue to the Board prematurely, "get shot down," and then have further delay before returning to the matter. He argued that if the U.S. wanted to expedite the fuel assurance issue, it should take steps on disarmament. He noted CTBT and FMCT as examples. Noting that France and the U.S. were building new enrichment plants, he encouraged us to "lead by example." 3, (C) Digging behind these remarks from ElBaradei, DCM on January 8 learned from EXPO chief Vilmos Cserveny that EXPO shares U.S. concern that delay until September is a mistake. Cserveny said he was pushing the DG to have an agenda item at the March Board of Governors meeting where (per ref c) the Secretariat would announce the fulfillment of the Nuclear Threat Initiative challenge grant and note the need for implementation. (A new letter to the IAEA from EU HiRep Solana apparently clarifies that the financial contribution approved by EU foreign ministers in December fills the till.) ¶4. (C) Comment: ElBaradei's concerns are entirely political and not related to the (nonetheless) considerable administrative and legal details that would go into the IAEA being able to effect transfers of low enriched uranium or fabricated fuel. Cserveny advocated that a few well placed gestures by the incoming U.S. Administration by March could bring a substantial improvement to the atmosphere. In this regard he, like his boss, pointed to CTBT engagement and our posture on the FMCT in Geneva as being particularly consequential. ¶5. (C) Contd.: Even if his bureaucracy and the supporters of fuel assurances, including ourselves, move ElBaradei to use the March 2-6 Board as a milestone toward implementing a fuel bank, the issue of states' eligibility to access remains substantial. We will also need a plan for focused outreach to the most vocal skeptics, which include Pakistan, South Africa, and to a lesser degree Egypt. Mission renews its ref C request for front-channel guidance. End Comment. SCHULTE