ANYTHING LEFT TO SQUEEZE FROM THE IAEA'S "FUTURE

UNCLAS UNVIE VIENNA 000506

SENSITIVE
SIPDIS

STATE FOR IO/GS, ISN/MNSA; NSC FOR SCHEINMAN

E.O. 12958: N/A
TAGS: AORC PREL KNNP IAEA UN
SUBJECT: ANYTHING LEFT TO SQUEEZE FROM THE IAEA'S "FUTURE
OF THE AGENCY" PROCESS?


1. (SBU) Summary: Member States are looking forward - some
with relief - to the final session of the year-long Future of
the Agency (FOA) process on November 19 - 20. The Brazilian
chair of the process will circulate and then formally submit
a report to the March Meeting of the Board of Governors.
While some observers believe that any dialogue across Member
States is better than silence, the toothless FOA process was
ultimately fenced off from more substantive developments in
other fora, such as budget negotiations and various Board
meetings. U.S. attempts to invigorate the process were
dampened by OECD disinterest and the G-77's blinkered focus
on technical cooperation. As Member States prepare to
baptize a new budget forum on November 25, the Budget Working
Group (BWG),many have expressed the hope that it not become
"another Future of the Agency." At best, the FOA process
shows us what to avoid as we head into 2010 - a year of
difficult negotiations over the 2011 budget, 2012-2013
Technical Cooperation cycle, and 2012-2017 Medium Term
Strategy. At this stage U.S. interests are best served by a
quick and bloodless end to the FOA effort. End Summary.


2. (SBU) Member States will convene November 19 - 20 for the
final "Future of the Agency" discussion on the Agency's
activities as a whole. In a meeting with Ambassador Davies
on October 29, Brazilian Ambassador Antonio Guerreiro
(current Chair of the FOA process) admitted that the exercise
was not initially welcomed by his G-77 counterparts. (The
G-77 had also looked askance at the FOA's founding document,
the May 2008 "Commission of Eminent Persons Report.")
Guerreiro was quick to assert, however, that the FOA had
reaped some benefits, chief among them that Member States
"had finally begun speaking their minds." Guerreiro also
noted that the FOA process had allowed Member States to
educate themselves, an important function at an agency where
diplomats cover several organizations and can be overwhelmed
by technical material. (Guerreiro may be correct on this
point: Diplomats from Sri Lanka and Costa Rica recently told
MsnOff that the FOA process allowed non-Board Members to
learn about the IAEA and get updated on recent trends.) Most
positively, Guerreiro told Ambassador that the FOA had
convinced some Member States that Nuclear Security was indeed
a legitimate activity of the Agency.


3. (SBU) Guerreiro did not delve into the less positive
aspects of the process, particularly its time-consuming
schedule of two-day meetings and its tendency to be taken
over by the narrow interests of individual Member States.
For example, Guerreiro surprisingly characterized Iranian
Ambassador Soltanieh's contributions as "particularly
helpful," when in fact, Iran accounted for up to half of
total interventions, many of which were irrelevant to the
work at hand. Pakistan also made unhelpful contributions,
most notably by blocking any discussion of how to improve
Technical Cooperation projects. In fact, the increasing
willingness of local G-77 leaders to throw their weight
around meant that the priorities of OECD countries often fell
by the wayside during FOA discussions. Alluding to the
unhelpful stance of Iran and others over the course of the
process, Ambassador asked Guerreiro to avoid letting any one
Member hold undue sway over the final FOA report.

FOA Winds Down, BWG Winds Up
--------------


4. (SBU) The last FOA Meeting on November 19 - 20 is (rather
awkwardly) titled "Any Outstanding Issues and the Agency
Activities as a Whole and the Result of the Process."
(Guerreiro had little to share with Ambassador on what he
hoped to accomplish at the final meeting.) As usual, Member
States are invited to submit questions to the Brazilians in
advance of the meeting. For this final meeting, Mission will
put forward questions that focus on 1) methods to ensure the
IAEA is fully resourced over the long term, 2) efforts to
improve the IAEA's Safeguards function, and 3) steps to
encourage more effective governance by Member States.
(Additional proposals and contributions may be submitted to
Usha Pitts at pittsue@state.gov).


5. (SBU) Guerreiro will then work with his predecessor as FOA
Chair, former Finnish Ambassador Kirsti Kauppi (now in the
MFA in Helsinki),to memorialize the process in a "Chairs'
Report to the Board of Governors." The Report will be
circulated informally to major players (including the U.S.)
during December or January and then submitted to the March 1
- 5, 2010 Meeting of the Board of Governors. The timing
suggests that the report will come out too late to influence

the new Budget Working Group (BWG),which meets over the
course of several days in January. The report could,
however, become a resource for Member States when they
discuss the 2012 - 2017 Medium Term Strategy later next year.
Guerreiro also hoped the Report could be of use to incoming
Director General Amano (unfortunately, Guerreiro did not
provide specifics). Other than the above, the timing of the
FOA Report and its non-binding nature suggest that the
process may be heading for a lackluster conclusion. Some
Member States have even taken to vocalizing the desire that
the BWG not turn into "another Future of the Agency."

Comment: What Not To Do in 2010
--------------


6. (SBU) The U.S. priority at this stage is to ensure that
the FOA report does not morph into a vehicle for the G-77 to
impose its agenda on the Board or to dilute Board
authorities. From that perspective we seek to bring FOA to a
quick and uncontroversial conclusion.


7. (SBU) Mission had hoped that an activist approach to the
Future of the Agency would help the U.S. win points with the
G-77 and gain buy-in on priority issues. Mission had also
hoped the process would lead to improvements in the IAEA's
performance and relevance over the long term. Needless to
say, these hopes did not come to fruition. The process was
ultimately left behind by more concrete developments in other
fora, particularly intense budget negotiations, the DG
election, and goings-on at the Board and General Conference.
In that regard, the strongest determinants of the future of
the IAEA will be its new Director General and the resources
at his disposal. Progress in FOA was further hampered by
Member States' insistence that the dialogue remain "informal"
and "open-ended." As a result, the process appeared to
reinforce basic political divisions rather than to address
seriously the crisis of IAEA resources and ballooning
mandates. Finally, the process was brought down by the
G-77's insistence on introducing Technical Cooperation at
every FOA session, no matter what the topic. OECD countries,
for their part, had initially hoped the process would whither
away; when it didn't, they tolerated it without enthusiasm.
At most, the FOA reminded us of the limited value of an
extended, informal process without measurable goals or
commitments. The lesson must be taken into account as we
approach 2010, a year that will witness the establishment of
working groups to tackle the 2011 budget (and beyond),the
2012-2017 Medium Term Strategy, and the 2012-2013 Technical
Cooperation cycle. One hopes these new bodies achieve
greater gains than their enfeebled predecessor, the Future of
the Agency.

DAVIES