Identifier
Created
Classification
Origin
09UNVIEVIENNA535
2009-11-30 16:59:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
UNVIE
Cable title:  

IAEA/BOG - RUSSIAN NUCLEAR FUEL RESERVE APPROVED

Tags:  ENRG KNNP AORC TRGY IAEA 
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VZCZCXRO3093
PP RUEHBI
DE RUEHUNV #0535/01 3341659
ZNR UUUUU ZZH
P 301659Z NOV 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 0332
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY
RHMCSUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEANFA/NRC WASHDC PRIORITY
RUEHAD/AMEMBASSY ABU DHABI 0044
RUEHTA/AMEMBASSY ASTANA 0210
RUEHKU/AMEMBASSY KUWAIT 0051
RUEHNY/AMEMBASSY OSLO 0205
RUEHSM/AMEMBASSY STOCKHOLM 0362
RUEHGV/USMISSION GENEVA 0928
RUEHBI/AMCONSUL MUMBAI 0076
UNCLAS SECTION 01 OF 04 UNVIE VIENNA 000535 

SENSITIVE

SIPDIS

STATE FOR T, S/SANAC, IO/GS, ISN/NESS, ISN/MNSA
POL OR ECON/EST FOR IAEA ACTION OFFICER
GENEVA FOR CD
DOE FOR NA-243-GOOREVICH
NRC FOR JSCHWARTZMAN, MDOANE

E.O. 12958: N/A
TAGS: ENRG KNNP AORC TRGY IAEA
SUBJECT: IAEA/BOG - RUSSIAN NUCLEAR FUEL RESERVE APPROVED

REFS: (A) UNVIE 531 (B) UNVIE 301 BOTH NOTAL

----------------------------------
Paving the Way or Pyrrhic Victory?
----------------------------------

UNCLAS SECTION 01 OF 04 UNVIE VIENNA 000535

SENSITIVE

SIPDIS

STATE FOR T, S/SANAC, IO/GS, ISN/NESS, ISN/MNSA
POL OR ECON/EST FOR IAEA ACTION OFFICER
GENEVA FOR CD
DOE FOR NA-243-GOOREVICH
NRC FOR JSCHWARTZMAN, MDOANE

E.O. 12958: N/A
TAGS: ENRG KNNP AORC TRGY IAEA
SUBJECT: IAEA/BOG - RUSSIAN NUCLEAR FUEL RESERVE APPROVED

REFS: (A) UNVIE 531 (B) UNVIE 301 BOTH NOTAL

--------------
Paving the Way or Pyrrhic Victory?
--------------


1. (U) Summary: The years-long IAEA debate over the creation of an
international nuclear fuel reserve finally came to a head at the
Board of Governors' Thanksgiving session. Rather than have the
Board act on a Secretariat recommendation, Russia chose the tactic
of seeking approval of its plan by a resolution with sufficient
cosponsors to indicate the inevitability of its adoption and
consequently avoid a direct challenge in the Board. The resolution,
drafted by Russia and the Secretariat and edited in the process of
enlisting support, came before the Board with fourteen sponsors
(Azerbaijan, Canada, Denmark, France, Japan, the Republic of Korea,
Mongolia, the Netherlands, Romania, Russia, Spain, Ukraine, the UK
and the United States) and enough additional promises of support to
ensure in advance the adoption of the resolution. However, Russia
was never able to discourage opposition sufficiently to avoid a
vote.


2. (SBU) Summary contd.: Following a debate that tracked closely
along the lines of the IAEA's June meeting, the IAEA Board of
Governors adopted the resolution approving the first of the
approximately one dozen proposals for nuclear fuel supply assurances
developed by Member States and the Secretariat. The text is
contained in paragraph 11. The calls in the debate for "more time
to consider the question" led the Chair to note the absence of
consensus on the resolution and dashed the hope to have it adopted
by silent acquiescence. The vote, 23 for (U.S. included),8
against, 3 abstain, 1 absent, reflects the continued division over
this issue between western states seeking to devise mechanisms to
discourage the spread of sensitive technologies and the more vocal
developing countries concerned about being disadvantaged
commercially and denied their "right" to nuclear development as they
see fit. This continued division and the sense that the resolution
was forced on the NAM/G-77 does not bode well for the prospects of

other fuel assurance proposals, such as the IAEA Fuel Bank.
However, several developing countries stood out as particularly
effective allies in this effort, including Peru, Kazakhstan, and
Mongolia, all of whom spoke out publicly in support. Significantly,
India departed from the other NAM to abstain, calling itself a
potential supplier to a fuel bank. End Summary.

--------------
The Sponsors' Strategy
--------------


3. (SBU) Russian IAEA Governor Berdennikov convened potential
resolution co-sponsors to meetings on November 24 and 25 before the
Board convened, as well as twice on November 26, before the opening
of the Board meeting and at midday, to recruit co-sponsors and
engineer group decisions on tactics. Generally attending these
meetings were the Ambassadors or msnoffs of all the ultimate
sponsoring states plus Australia, Germany, Peru, and Switzerland.
Berdennikov noted to all at the outset on November 24 that FM Lavrov
had contacted their ministers with the request for co-sponsorship.


4. (SBU) Berdennikov used the initial meetings to discuss revisions
of the resolution text as a means of securing sponsorships. UK,
French, and German additions to the original Russian/Secretariat
text added preambular and operative paragraphs referring
constructively to other fuel assurance proposals still under
development as well as a preambular paragraph emphasizing states'
rights under NPT Article IV. Berdennikov on several occasions posed
the alternatives of advancing the proposal in this Board or
deferring. When his question resulted in musing about the good will
to be gained by allowing for more consultation, however, he replied
with his own analysis that the opponents were implacably opposed and
the supporters would gain no ground. The UK and U.S. ambassadors
supported him in this analysis and others accepted it with quiet
unease. On Wednesday, November 25, he secured the agreement of the
group to table the resolution that evening on behalf of the sponsors
that had formally signed up by the appointed hour; Berdennikov and

UNVIE VIEN 00000535 002 OF 004


Ambassador Davies called on the Board Chair at 8:00 p.m. to submit
the resolution with fourteen governors' signatures.

--------------
Board Debate
--------------


5. (U) Board debate on the Russian LEU Reserve proposal was largely
a rerun of the debate in June (ref B) involving three fuel assurance
proposals, the Russian LEU Reserve, the IAEA Fuel Bank, and the
German Multilateral Enrichment Sanctuary Project. Russia introduced
its proposal, which had been presented to the Board by the
Secretariat without a recommended action, noting that this was an
issue that had been under debate for over 50 years and reminding the
Board of some of the more recent history and initiatives. It also
introduced the resolution approving the agreement between Russia and
the IAEA establishing the reserve, approving a Model Agreement
between the IAEA and a recipient Member State wishing to take
advantage of the reserve, and granting the Director General the
authority to conclude an agreement according to the model without
obtaining further permission of the Board of Governors. Russia
asked for the resolution to be adopted without a vote.


6. (U) Argentina, speaking for the G-77 (and mistakenly adding
"plus China" in its introduction),reiterated the June 2009 view
that there was a need for caution on the technical, legal and
economic aspects as well as on the underlying political aspects of
fuel assurances. Argentina stated that the Agency must first agree
on a coherent conceptual framework including principles and
objectives, asserted that any proposal should be adopted by
consensus of the General Conference, noted that there had been no
developments addressing the concerns identified in June, concluded
that no decision could be taken at this time, and indicated that
that it looked forward to future dialogue. These themes were echoed
by Egypt, speaking for the NAM and in its national capacity,
Argentina speaking in its national capacity, Brazil, Pakistan, and
Venezuela, all of which subsequently voted no on the resolution.
Pakistan also stated that fuel assurance proposals should also
address the supply of natural uranium. India, Turkey, Peru and
Afghanistan all supported the need for consensus, although the first
two abstained on the resolution and the latter two voted for it.
Argentina, Egypt and Venezuela all rejected the notion that any
particular technology was a proliferation risk while Venezuela went
further to say that the real proliferation risk was the absence of
disarmament under NPT Article VI. Brazil reprised its question from
June about just who would benefit from this proposal, except perhaps
that a nation being penalized for very poor behavior might be able
to avoid the penalty. Argentina repeated a long list of conditions
that it felt a fuel assurance proposal must meet, apparently without
realizing that the Russian proposal addressed them.


7. (U) Sweden, speaking on behalf of the European Union, expressed
support for the proposal, noting also that the EU had pledged 25
million Euros to the Fuel Bank and that the UK and Germany had also
made proposals. The EU statement also cited the support that the
proposal gave to the provisions of UNSCR 1887. The EU statement was
followed by statements of support from Ukraine, the U.S. (text in
paragraph 9),Canada, China, the ROK, Mongolia, Japan, the UK,
France, Switzerland, and, under Rule 50, Kazakhstan and Austria.
All made supportive statements but largely cited the generalities of
the benefits of fuel assurances and not the specifics of the
proposal. Mongolia, Japan, the ROK and the United States all noted
the lack of impact on Agency resources and Japan and the United
States noted the safeguards criteria for eligibility, while the ROK
cited the reasonableness of the eligibility criteria generally.
The ROK noted that additional elaboration was needed on the nature
of the disruption that could trigger use of the reserve. The United
States noted that the proposal dealt satisfactorily with safety,
security and liability issues, while also citing the work of the
GNEP Nuclear Fuel Assurances Working Group on the availability of
fuel fabrication services.

--------------
Got Them Right Where They Want Us?
--------------

UNVIE VIEN 00000535 003 OF 004




8. (SBU) Following the Board's November 26 discussion, the Russians
again convened the sponsors to request support for the option of
requesting a vote. Berdennikov analyzed that the opponents to the
proposal knew "they have the Chair" with them, that the Chairman
would note correctly that there was no consensus and could then turn
to the sponsors with the alternatives to defer a decision or assign
the issue to a working group. Berdennikov took the position that
either alternative would reduce the likelihood of approval in the
future. At this juncture, in the Russian analysis, opponents were
"taken by surprise" and there was no unity of position among G-77 or
NAM states. Allowing more time for consultations, Berdennikov
asserted, would result in no more "yes" votes but would allow the
opponents to turn abstentions into "no" votes. In this analysis,
again, Berdennikov got strong endorsement from the UK ambassador.
Others (Canada, France) actively endorsed the position of asking for
a vote if necessary; no one present objected.

--------------
Little Drama in Voting
--------------


9. (U) The resolution approving the Russian LEU Fuel Reserve and
the necessary agreements to implement it came to a vote on the
morning of November 27 after the Board has passed the more closely
watched resolution on safeguards verification on Iran and heard a
lengthy round of explanations of vote on that topic (septel). The
Board Chair took up the Russian proposal with the resigned
observation, "Since we are in a voting mood," let us turn to the
resolution on an LEU reserve. The resolution passed 23-8-3 with one
Board Member absent.

-- Voting YES were: Afghanistan, Australia, Burkina Faso, Cameroon,
Canada, China, Denmark, France, Germany, Japan, the ROK, Mongolia,
the Netherlands, New Zealand, Peru, Romania, Russia, Spain,
Switzerland, Ukraine, the UK, the United States, and Uruguay.

-- Voting NO were: Argentina, Brazil, Cuba, Egypt, Malaysia,
Pakistan, South Africa, and Venezuela.

-- ABSTAINING were: India, Kenya and Turkey.

-- Azerbaijan, a sponsor, was ABSENT.


10. (U) Following the vote, a number of countries voting no or
abstaining explained their votes, decrying the absence of consensus.
India broke from other NAM states by abstaining and delivered an
explanation of vote (EOV) lamenting the introduction of
"discriminatory" criteria for fuel bank eligibility but also noting
India's potential to be a supplier of thorium to an international
fuel reserve. After the formal EOVs, the Chair opened the floor.
Canada, in an "additional statement" suggested that perhaps it would
be worthwhile to pursue developing a general framework before moving
on to discuss other proposals. The U.S. stated that it viewed the
resolution just adopted as part of the dialogue process and that it
wanted to continue to explore the issues.
-

11. (U) Begin Text of Resolution (available to the public on
www.iaea.org):

Request by the Russian Federation regarding its Initiative to
Establish a Reserve of Low Enriched Uranium (LEU) for the Supply of
LEU to the IAEA for its Member States.

Resolution adopted by the Board of Governors on 27 November 2009

The Board of Governors,

(a) Recalling the Report by the Director General GOV/INF/2007/11
"Possible New Framework for the Utilization of Nuclear Energy:
Options for Assurance of Supply of Nuclear Fuel",
(b) Recalling the document GOV/INF/2009/1 "Russian Federation
Initiative to Establish a Reserve of Low Enriched Uranium (LEU) for
the Supply of LEU to the IAEA for its Member States",
(c) Recalling the Report by the Director General GOV/INF/31

UNVIE VIEN 00000535 004 OF 004


"Assurance of Supply - Russian Federation Initiative to Establish a
Reserve of Low Enriched Uranium (LEU) for the Supply of LEU to the
IAEA for its Member States",
(d) Noting the provisions of Article IX of the IAEA Statute allowing
Member States to make available to the Agency nuclear materials for
supply to other Member States,
(e) Noting that a number of concepts of assurance of supply of
nuclear fuel have been proposed, which can complement each other to
strengthen the assurances provided to interested Member States, and
that discussion have already taken place in the Board,
(f) Reaffirming that the establishment of the reserve of LEU and the
subsequent implementation of future agreement with Member States
will be carried out as a back-up solution only and in such a way
that any disturbance or interference in the functioning of the
existing fuel market is avoided, while noting the importance of
developing a range of complementary options for additional
assurances of supply, and the fact that the good operation of the
market already provides assurances of supply, and
(g) Emphasizing that the inalienable rights of all Parties to the
NPT to develop research, production and use of nuclear energy for
peaceful purposes without discrimination provided for in Article IV
of the NPT will in no way be affected by the aforementioned Russian
Initiative.
Hereby,

1. Welcomes the offer of the Russian Federation to establish on its
territory a reserve of LEU to the IAEA for its Member States;

2. Authorizes the Director General to conclude and subsequently
implement the Agreement with the Russian Federation to establish a
reserve of LEU for supply to the IAEA for its Member States,
attached as Attachment 1 to GOV/2009/76.

3. Approves the Model Agreement, attached as Attachment 2 to
GOV/2009/76 as the standards text for agreements that are to be
concluded with Member States for the supply of LEU by the IAEA from
the reserve;

4. Authorizes the Director General to conclude and subsequently
implement future Agreements with Member States for the supply of LEU
by the IAEA when the Director General considers that the request of
the Member State fulfills the eligibility criteria included in the
Agreement with the Russian Federation, without the requirement of a
case-by-case authorization by t he Board but with a requirement for
the Director General to keep the Board informed of the progress of
individual Agreement; and

5. Decides to remain seized of the matter with a view to
considering, and eventually adopting at an early date, other
complementary proposal to strengthen the assurances of supply of
nuclear fuel available to interested Member States.

End Text of Resolution


12. (U) Begin Text of U.S. Statement as delivered.

Mr. Chairman,
The Director General assembled an Expert Group on Multilateral
Approaches to the Nuclear Fuel Cycle in mid-2004. Many reports,
proposals, and discussions both formal and informal over the ensuing
five years brought us to the decision the Board made today. My
delegation was among the sponsors of the resolution on the Request
by the Russian Federation regarding its Initiative to Establish a
Reserve of Low Enriched Uranium (LEU) for the Supply of LEU to the
IAEA for its Member States. U.S. support for this specific proposal
is intended to advance dialogue in this Board and this Agency on
means for reinforcing the market in nuclear fuel services through
various concepts involving fuel reserves, export licensing,
multinational enrichment facilities, improved information sharing,
and such other concepts as may be put forward. We hope and expect
to continue this dialogue.
Thank you.

End Text of U.S. Statement.

DAVIES