IAEA NOVEMBER TACC/BOARD: PREVIEW AND ANALYSIS

UNCLAS UNVIE VIENNA 000505

SENSITIVE

SIPDIS

STATE FOR T, S/SANAC, IO/GS, ISN/MNSA, ISN/RA, ISN/NESS
NA-21 CUMMINS, ILIOPULOS; NA-24 MENSELSOHN
NA-243 GOOREVICH/OEHLBERT; NA-241 O'CONNOR, SIEMON;
NE-62 SZYMANSKI
NRC FOR OIP - DOANE, HENDERSON, SCHWARTZMAN
GENEVA FOR CD

E.O. 12958: N/A
TAGS: AORC KNNP IAEA ENRG TRGY
SUBJECT: IAEA NOVEMBER TACC/BOARD: PREVIEW AND ANALYSIS

REFS: A) SAMUNDSON-DRUDOLPH email 10/08/09
B) SAMUNDSON-DRUDOLPH email 10/09/09 on Sudan
C) SAMUNDSON-DRUDOLPH emails 10/09/09 on Omani projects
D) SAMUNDSON-DRUDOLPH email 10/09/09 on UAE; SAMUNDSON-
DRUDOLPH email 10/09/09 on Regional Latin America
E) SAMUNDSON-DRUDOLPH email 10/09/09 on Ecuador;
SAMUNDSON-DRUDOLPH email 10/09/09 on Paraguay
F) SAMUNDSON-DRUDOLPH email 10/21/09
G) MOSCOW 2248
H) UNVIE 425


1. (SBU) SUMMARY AND ACTION REQUEST: The November 26-27 Board of
Governors meeting will be the last Board session for Director
General ElBaradei before handing over the reins to Yukiya Amano
December 1. With this impetus to reflect on the institution, U.S.
positions in the Board should be prefaced with a renewed commitment
to multilateralism and the IAEA as a whole. The first order of
business of the November Board of Governors will be to approve the
report of the Technical Assistance and Cooperation Committee
convening November 23-24 to approve off-year TC projects. Assuming
no closure on the refueling agreement for the Tehran Research
Reactor (TRR),however, our primary objectives for this Board
session will focus on the long-standing fuel assurance proposal and
Iran verification issues. The DG's quarterly report on Iran will
include the first official report of the inspection of the Qom
(Fordo) enrichment facility since its disclosure in September.
Working with the P5-plus-1 and likeminded, it will be essential to
frame the inspection report on Qom in its proper context -- Iran's
intent in building a covert facility in contravention of Board,
UNSC, and IAEA safeguards "Code 3.1" requirements. The DG's last
address to open a Board meeting may set expectations, for better or
worse, as to how his successor can proceed on the Iran issue that
has dominated ElBaradei's tenure. More broadly, the Board session
will be the first opportunity to increase pressure on Iran should it
fail to deliver on its October 1 commitments in Geneva and in view
of potential next steps in the UN Security Council. Also on the
Board's agenda will be the DG's report on Syria verification, which
will present another opportunity to turn up pressure on Damascus
with respect to its continued failure to cooperate with the IAEA
investigation. Since there have been no developments on the Syrian
TC project on a feasibility study for a nuclear reactor, we do not
expect this issue to be raised in either the TACC or Board. Septels
will preview the Iran and Syria agenda items upon issuance of the
respective reports. On Iran in particular, our tactical
recommendation will hinge on a forthright IAEA report. Although the
Director General will not report on verification in the DPRK, the
issue will be added to the Board agenda pursuant to a request from
the ROK, Japan and U.S. Board members will look to the U.S.
statement should there be any significant developments on DPRK.


2. (SBU) In addition to the pressing verification issues, the
Russian fuel reserve proposal will be added to the November Board
agenda for approval; the agreement texts are about to be circulated
to Member States for consideration. This is a long-awaited
development and could bring to fruition the first assurance of
supply mechanism, a U.S. priority. The Secretariat has indicated
that it may, pending a decision from the Director General, consider
also bringing the International Nuclear Fuel Bank forward in tandem;
so as to not complicate approval of the Russian proposal, Mission
has advised deferring the INFB for a future Board session and will
reinforce this message with the Secretariat. Our approach to Iran
needs to be conditioned by the need to preserve a minimum of Board
comity on the Russia/IAEA fuel reserve decision.


3. (SBU) Although this is not a TC project-cycle year, the November
TACC and Board present an opportunity for a forward-leaning U.S.
posture on peaceful uses of nuclear energy in view of the
President's Nobel speech in early December and the upcoming NPT
Revcon. The U.S. statement in the Board to join in approving the
report of the TACC earlier in the week should underline our
commitment to the TC program and peaceful uses more broadly.
However, the TACC may also witness open disagreement regarding a
Secretariat-proposed interregional project on Results Based
Management (RBM),which is strongly opposed by the G-77. Should the
G-77 force the issue by blocking consensus in the TACC, the U.S.
should support the TC Department in its decision to implement RBM.
The Secretariat has also issued a legal opinion excluding Iran from
the RBM project due to UNSCR restrictions on IAEA technical
cooperation to Iran. (Note: There is a requirement for two U.S.
statements on TC, in the TACC and Board respectively.)


4. (U) Mission requests guidance for TACC and Board meetings by
November 20. Guidance for preparatory outreach on assurance of
nuclear fuel supply (paras 14-16 below) is requested as soon as
possible and should precede TACC and Board statements and
instructions keyed to the meeting agendas. END SUMMARY AND ACTION
REQUEST.

TACC
--------------


5. (SBU) This year's Technical Assistance and Cooperation Committee
(TACC) meeting has the potential to be contentious if the G77 refuse
to join consensus on a proposed Secretariat project focusing on the
implementation of Results Based Management (RBM). The Secretariat's
objective with this project is to strengthen capacities of Member
States and counterpart institutions in the application of RBM across
the TC program cycle. The project is designed to meet Member State
calls for more efficiency, results, and transparency in the TC
program. RBM, if applied correctly, will strengthen TC planning,
programming, budgeting, monitoring, evaluation, human resource
management and management of information systems. To achieve this,
the Secretariat will train TC recipient country project staff,
including National Liaison Officers, as well as the planning and
implementation staff in counterpart institutions. The main training
components will focus on program and project design, defining
performance indicators, reporting responsibility and accountability
and results-focused budgeting and monitoring. Additionally, the
training will bring Member State project teams into a network to
share good practices in managing technical cooperation programs.
Participants will also be identified to be resource persons for
further development of capacities related to results based
management. Training methodology and materials will be based on
adult learning and group size will be kept between 20-25
participants. The approach will include the practical application
of RBM across the TC program cycle. Each participant as a member of
a group will, through a process of gathering new information and
reinforcing existing knowledge, develop a country program design to
use as a reference in designing their program and projects.
Resource personnel will not only develop the teaching methods based
on existing materials, but will also propose innovative
participant-led training approaches. The project is expected to
begin in 2010 and end in 2011. The USG should strongly support full
implementation of the RBM project in both the TACC and Board
statements. The U.S. statement should thank the Secretariat for
its work in this area and underscore how RBM helps everyone involved
in the TC process achieve results. Mission will subsequently push
the Secretariat to implement RBM fully by the beginning of the next
project cycle (2012-2013.)


6. (SBU) The G77 to date are opposed to the RBM project because
they see it as an attempt by major donors to the TCF to regulate and
micro-manage the spread of nuclear technology and exert intrusive
oversight into their national implementation of TC. The Secretariat
has been clear in its meetings with the G77 that this project did
not come from TCF donor countries. Should the G77 continue to
oppose the project and move to break consensus on the short slate of
projects at the TACC/BOG, the U.S. should make clear that doing so
would set a negative precedent. The USG should not spearhead an
effort to broker a compromise (which would only feed into G77
suspicions about this project),but rather indicate that a move to
break consensus would undercut TC and stoke Board divisions. The
UK, France, Switzerland, Australia, and Canada all agree that
support should be noted in national statements and consensus should
be preserved.


7. (SBU) Prompted by Iran, some G-77 Member States will use the
Secretariat's legal finding that Iran cannot participate in the RBM
project based on UNSCRs as an excuse to take issue with the project.
The Secretariat's legal office issued an opinion on
GOV/2009/65/Annex 2 that Iran cannot participate in the RBM project
based on UNSCRs 1737, 1747 and 1803 because the RBM is not
humanitarian in nature and Iran, through the training networks that
will be established, could access knowledge about TC projects
dealing with nuclear energy, research reactors, etc. The U.S.
should not seek a reversal of the Secretariat's legal opinion.


8. (U) The TACC will begin deliberations on November 23 and is
expected to conclude on November 24 with formal adoption of its
report. Australia from the SEAP group will provide its Mission
Counselor, Dr. Ron Hutchings, as rapporteur.

TACC AGENDA ITEM 1 - DDG STATEMENT
--------------


9. (U) DDG Ana Maria Cetto will give the opening statement at the
TACC. All indications point to her explaining the successful use of
the Program Cycle Management Framework to create a TC program of
qualitatively better projects than in the past. She will also note
the trend of many countries joining more regional and inter-regional
programs, which in her view indicates the growth of the TC program
into a global program that facilitates information exchange.
Finally, she will stress the importance of sustained funding for the
TC program and the need for implementation of RBM. To date there
are no indications she will raise issues surrounding the Syria
feasibility study project for a nuclear reactor approved in 2008, as
this project has not moved forward. (Note: Like-minded missions
are also not planning to raise this project in the TACC for the same
reason. End note.)

TACC AGENDA ITEM 2
TC: THE AGENCY'S PROPOSED PROGRAM FOR 2010
--------------


10. (U) In addition to the RBM project there are nine other
projects that need TACC/Board approval to move forward. Refs A-E
address project objectives, justification, and beneficiaries in a
comprehensive manner. The U.S. should support all nine projects,
assuming satisfactory findings through internal USG project reviews.
The project are: (1) Sudan: "Conducting a feasibility Study for
Planning and Establishing a Research Reactor" SUD/4/008, 2) Oman:
"Long Term Planning for Energy and Water Demand and Supply in Oman"
OMA/0/002, 3) Oman: Strengthening Capabilities for the
Implementation of the Sultanate of Oman's Strategic Plan for
Peaceful Uses of Nuclear Energy" OMA/0/003, 4) Oman: "Strengthening
National Capabilities in Radiation Medicine and Dosimetry"
OMA/6/002, 5) Oman: "Strengthening the National Regulatory
Infrastructure for Radiation Safety and Occupational Exposure
Control in Oman" OMA/9/002, 6) UAE: "Support for the Development of
National Nuclear Power Infrastructure for Electricity Generation in
the UAE" UAE/9/008, 7) Ecuador: "Upgrading a Gamma Irradiation
Facility for multipurpose use" ECU/8/028, 8) Paraguay: "Improvement
and Modernization of the Radiotherapy Services of the National
Cancer Institute of Paraguay, and Training of Human Resources in
these areas." PAR/6/013, and 9) Regional Latin America: "Assessment
of National Regulatory Infrastructures for the Safe and Peaceful
Uses of Nuclear Energy in Latin America and Caribbean" RLA/0/044).
(NOTE: The Sudan TC project requesting a feasibility study for a
research reactor is a standard study of whether the country can
support such an endeavor. The TC Division has assured Msnoff that
no proliferation concerns exist in this project. END NOTE.)

TACC AGENDA ITEM 3 - EVALUATION OF 2009 TC ACTIVITIES
-------------- --------------


11. (U) Document GOV/2009/72 (ref F) reports on the evaluation of
the Agency's technical cooperation activities in 2009 and outline
the 2010 work plan. The 2009 Evaluation of Technical Cooperation
Activities report indicated overall success in projects on areas
related to research reactors and Tsetse fly eradication. However,
there are significant concerns with research reactor projects,
particularly in risk identification and monitoring, post
installation support and technical expertise. According to the IAEA
Office of Internal Oversight Services (OIOS),these difficulties
were also shared by projects supporting the implementation of
nuclear power programs, although the issues with nuclear power
endeavors are significantly more problematic in project formulation,
capability for building human resources, infrastructure, financial
resources and technology. Food irradiation projects also had
limited impact due to a lack of implementation support from TC
recipient countries. The lack of implementation included various
factors such as low producer interest, competing methods, and
technical difficulties. However, OIOS found the greatest failure in
the TC Division's implementation of projects to fight cancer.
(NOTE: This is not an evaluation of PACT, the Program of Action for
Cancer Therapies. PACT is not within the TC Division; it is a
separate program in the IAEA's nuclear applications department. END
NOTE.) The TC projects in the area of radiotherapy were found to be
largely deficient in monitoring and accountability, infrastructure,
safety, human and financial resources and the adequacy of knowledge
and training.


12. (U) OIOS urges the TC Division implement its recommendations
quickly. The U.S. statement should support OIOS's findings and
welcome the 2009 evaluation. On the TC cancer therapy programs
specifically, the U.S. should note its support of the PACT program
and urge the TC division to work closely with PACT to implement
projects in cancer therapy to avoid duplication, maximize needed
expertise, maximize use of TC funds, and capitalize on PACT's
successful partnerships with the WHO and NGOs to implement a full
range of cancer prevention programs in-country.


13. (U) The U.S. should also support the OIOS program of work
outlined for 2010, which includes evaluations in safety of nuclear
installations, contribution and role of the FAO/IAEA agriculture and
biotechnology laboratory, project planning processes and achievement
of objectives, and the national liaison officer (NLO) function and
structure. This work plan, specifically the latter two evaluations,
will help streamline TC project management.

ASSURED SUPPLY
--------------
-

14. (SBU) The IAEA Secretariat received a request from the Russian
Federation to put consideration of Russia's LEU fuel reserve
proposal (ref G) on the Board agenda. The GOR apparently issued its
necessary decree authorizing the MFA to sign the proposed "Agreement
1" with DG ElBaradei. Board action would be to (1) approve the
Agency's role as set out in Agreement 1 and the accompanying Model
Transfer Agreement ("Agreement 2"),and (2) authorize the DG to sign
the first document with Russia and to exercise the authority to
enter into the transfer agreement with a requesting state under
relevant criteria. IAEA fuel banks point man Tariq Rauf (EXPO)
shared with Msnoff that he had expressed to Moscow his personal
assessment that the Russian reserve proposal would not enjoy
consensus support and that Russia may wish to consider the means for
gaining approval (i.e., how to win a vote). Instead, Russia plans
to sign up the required majority of 18 Board members as co-sponsors,
and then challenge others to vote against, knowing the resolution
will ultimately pass. Mission has reaffirmed to the Russian Mission
here several times this week that we stand ready to help lobby other
Board members for the proposal. Mission requests timely
authorization to co-sponsor the Russian proposal and has encouraged
other like-minded to do the same. Among these like-minded, Japan
has expressed some anxiety, and will require an approach in
capital.


15. (SBU) Rauf also previewed INFCIRC 772 that came out on November
6, containing a letter the DG received from the Ambassador of Egypt
as chair of the NAM. In its letter, the NAM enunciates views on
each operative paragraph of UNSCR 1887 that has relevance to the
work of the IAEA. With respect to OP14 of the Resolution, the NAM
reiterates its judgment that the IAEA Board is not in a position to
take action on proposals providing for international assurance of
nuclear fuel supply in the absence of a coherent, comprehensive
examination of all factors. The letter goes on to posit that
decisions on IAEA participation in any fuel assurance mechanism must
be made by consensus of the General Conference. In connection with
the prospect of voting on the Russian proposal, Rauf pointed out
that a few but not all NAM heavy-hitters are currently on the Board.
(See also ref H, paras 31-33.)


16. (SBU) Action Request: Mission looks forward to inter-agency
assessment of the Russian agreement texts and points to draw on in
advocating to other Board states their co-sponsorship and/or
approval of the Russian proposal. We request further that
Washington's subsequent instructions to USDEL for the Board of
Governors meeting include a substantive statement for delivery under
the anticipated agenda item. Mission notes that the prospect of a
controversial vote on the fuel proposal will make Russia
unenthusiastic about any vote on Iran and will thereby likely limit
Board options under the Iran agenda item.

DAVIES