IAEA: NOVEMBER 2009 TACC AND BOARD TC WRAP-UP

UNCLAS UNVIE VIENNA 000546



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TAGS: AORC, KNNP, IAEA, ENRG, TRGY



SUBJ: IAEA: NOVEMBER 2009 TACC and BOARD TC WRAP-UP



REF: UNVIE 505



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SUMMARY AND COMMENT

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1. (SBU) The November 23-24 Technical Assistance and Cooperation

Committee (TACC) adopted a draft report calling upon the Board to

approve the 2010 TC Program with the exception of the results-based

management project (RBM) proposed by the Secretariat (much to the

consternation of the G-77; reftel.) The carving out of the RBM

project has now created a negative precedent that any one group of

Member States can refer a project to a working group for redesign.

The G-77 also resisted calls by OECD states to time-limit the

working group to report by the March Board of Governors session,

further confirming suspicions that the intent is to shelve the

project. In addition to approval of nine TC projects, the TACC also

recommended the Board approve the TCF target for 2010, previously

agreed at 82.75 million USD, and reviewed critical audits in five

areas of TC by the Office of Internal Oversight Services (OIOS). The

Board of Governors subsequently approved the TACC report November 26

by consensus. The U.S. statement signaled broad support for TC and

nuclear applications while supporting RBM and TC reform.



2. (SBU) The TACC atmosphere was tense as the G-77 strongly

condemned any further attempts by the Agency and Western states to

control the TC Program through monitoring and evaluations, even as

they paid lip-service to RBM as a management practice they all claim

to espouse. When the RBM working group is established, like-minded

countries will need to play an active role to ensure more coherent

management of the TC program than heretofore. Despite our best

efforts to portray this as an issue between the Secretariat and the

G-77, developing countries continue to frame it as a North-South

dispute of "donors" micro-managing assistance that should be a

recipient entitlement. Western states acquiesced in creating this

ill-advised working group out of concern for other equities in the

November 26-27 Board of Governors session, including Iran and the

Russian LEU fuel reserve. The only potential benefit of creating a

working group in this case is that likeminded may in the future use

this as a precedent to consign a TC project of concern to such a

working group, a point that some of the G-77 acknowledged partially.

More broadly, this episode illustrates the ability of a small NAM

minority to railroad the larger group by invoking the specter of

U.S./Western attempts to circumscribe Member States rights. END

SUMMARY AND COMMENT.



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DDG Cetto

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2. (U) IAEA DDG Cetto opened the 2009 TACC by reiterating the broad

themes of the TC program for 2009-2011, noting that human health,

nuclear safety, and food and agriculture remain the main areas of

focus across all regions during the current project cycle. She also

introduced the TC Program for 2010 consisting of nine off-cycle

projects. (Note: This is the second year of an unusual three-year TC

project cycle designed to place the TCF on the same timeline as the

biennial regular budget negotiations. End note.) Cetto announced

that the tenth project originally posted, on results based

management (RBM),would be deferred to a working group to redesign

the project. She did not state in her opening remarks when the

project would be brought to the Board for approval, despite advice

from Western states that this working group (a brain child of the

Malaysian Board Chair) be time-limited to conclude by the March

Board. Senior secretariat officials in separate conversations

indicated it is their intention to bring the project to the March

Board. Cetto also used her statement as an opportunity to mention

briefly the TC Department's intention to establish field presence

posts, but did not elaborate on when, how, or any of the costs that

would be involved. To allay G-77 fears regarding the RBM

interregional project she noted that, "The success and

sustainability of TC projects rests primarily on their development

in consultation with Member States. This ensures that they have

clear objectives, and respond to identified, agreed needs. Let me

emphasize once more that the TC approach is always needs-based, and

strengthening results based management in Member States would in no

way impose any conditionality on projects." In short, Cetto backed

down in the face of G-77 opposition.

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TACC - Item 2 - TC Program for 2010

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3. (U) The G-77, Angola on behalf of the African Group, the EU

(Swedish Presidency),Brazil on behalf of GRULAC, Libya on behalf of

League of Arab States, the U.S. Mongolia, Malaysia, Japan, Egypt,

Pakistan, Canada, Germany, Peru, Kenya, Korea, Australia, China,

Cuba, the UK, France, India, Venezuela, Ukraine, Switzerland,

Cameroon, South Africa, and Russia spoke on the 2010 TC program, in

addition to non-Board members Sudan, Syria, and Israel under Rule

50.



4. (U) Western like-minded countries (US, UK, France, Switzerland,

Canada, Japan, and Australia) spoke at length about the need for

more transparency, monitoring and evaluation of TC projects. All

commended the Secretariat for trying to implement the next milestone

in RBM, and came out strongly against the RBM project being derailed

to a working group because of one group (G-77) of Member States.

The U.S. statement and those of the UK, Switzerland, and Canada

sought to time-limit this working group so that the project could be

approved by the March Board of Governors. The EU and Canada also

encouraged further integration of the IAEA into the "One UN" system.

Japan and Australia focused on the need for country program

frameworks (CPFs) to be available to all Member States and for

better project planning. The U.S. statement relaying support for TC

and efficient management of the program was well received by the

Secretariat.



5. (U) In contrast, the G-77 and its members in their subsequent

national statements opposed any further measures that would provide

transparency, derestrict CPFs, provide timely project evaluations,

etc. The G-77 highlighted that technology transfer to developing

countries is a "Statutory obligation" and that this should not be

"diluted by political or other mechanisms such as One UN". All G-77

members called for more funding for TC projects and noted that TC is

a purely demand driven program. Egypt, Malaysia, and Pakistan, in

their national statements, staked out the most strident positions on

these issues.



6. (U) Egypt and Libya, on behalf of the Arab League, also used

their statements to criticize TC support to Israel, a complaint we

have not heard in recent TACC's. Egypt called on the Agency to stop

all TC for Israel based on UNSCR 487 (1971) as well as decisions

made by the IAEA GC. The Arab League focused on the need for the

due account mechanism to be applied to Israel, since it has not yet

paid its national program costs (NPC) or pledged any financial

support to the TCF. Israel rejected the statements by Egypt and the

Arab League, noting that Israel was not the only non-NPT party

receiving TC. Israel clarified that its active TC projects are in

the areas of human health, water management, and agriculture and all

were designed to achieve outcomes that could benefit any Member

State. Israel also refuted the charge of nonpayment of NPCs and its

TCF pledge, noting that it pays its share annually.



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TACC - Item 3 - TC Evaluations

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7. (U) The Board Chairman (Malaysian Ambassador Arshad) opened

agenda item 3, Evaluation of Technical Cooperation Activities in

2009 (GOV/2009/72),with an overview of the evaluation activities

undertaken in 2009 by the Office of Internal Oversight Services

(OIOS). He summarized the conclusions and recommendations of the

report and outlined the proposed work plan for 2010 before OIOS

representative, Mr. Tijani Chaouch Bouraoui, discussed the

evaluation findings in each of the five program areas: food

irradiation related to trade, support to countries considering

embarking on a nuclear power program, projects in areas related to

research reactors, Agency's assistance to fight cancer (Africa),and

Agency's support to the Southern Rift Valley Tsetse eradication

project in Ethiopia.



8. (U) Bouraoui noted that two of the evaluations (support to

countries considering embarking on a nuclear power program, and

projects in areas related to research reactors) were cross-cutting

and conducted in conjunction with the evaluations of relevant

programs in the Agency's technical departments. He indicated that

the evaluations benefitted from effective relationship between

Agency departments and Member State counterparts. While the TC

projects evaluated were relevant to Member States' needs, OIOS did

not always see improvement in delivery of fellowships, scientific

visits, and training; comprehensive processes for achieving

objectives; and improvement of the Program Cycle Management

Framework (PCMF) for formulating and designing projects. Lacking,

as in previous years, is also a model for measuring results of

projects because of the limited availability of data, lack of

measurable indicators, and project reports without measurable

indicators. Bouraoui noted as well a continued concern about

project sustainability because of scarce human and in some cases

financial resources.



9. (U) Bouraoui concluded his remarks with brief comments on the

evaluation work plan for 2010, which includes evaluations of the

safety of nuclear installations, contribution and role of the

FAO/IAEA agriculture and biotechnology laboratory, project planning

processes and achievement of objectives, and NLO function and

structure.



10. (U) Several Member States (Argentina on behalf of the G-77,

Brazil on behalf of GRULAC, Angola on behalf of the African Group,

Ukraine, Malaysia, Japan, the U.S., Canada, Korea, India, Australia,

the EU, and Venezuela) spoke under the evaluation agenda item. The

G-77 emphasized that an audit/evaluation can only be effective if

the evaluated party has the opportunity to critique the

audit/evaluation before the conclusions and findings are finalized

by OIOS. The Group maintains this practice would allow for more

comprehensive and balanced audits/evaluations by OIOS. (NOTE: OIOS

does not have standard policy allowing parties involved in TC

evaluations to review reports before they are finalized. Requests

are handled on a case-by-case basis. This is due to past instances

where parties involved in evaluations have redacted them so heavily

that all substance was lost. END NOTE)



11. (U) The G-77 welcomed the OIOS conclusion that it is difficult

to quantitatively estimate the socio-economic impact of TC projects.

However, the G-77 did not acknowledge the rest of the conclusion,

which states that it is difficult to do this because of the lack of

data provided by the TC Division and recipient states on projects.

(NOTE: In future discussions on results based management; the G-77

will use their interpretation of this conclusion to dissuade further

evaluation of TC projects, claiming it will impinge on recipients'

sovereignty to set their own socio-economic development indicators.

END NOTE) The Group also welcomed more training for countries

wishing to embark on nuclear power program development, but did not

welcome any of the OIOS conclusions that would strengthen the

monitoring, evaluation, or results of TC projects. The G-77 also

vehemently opposed OIOS's intent to evaluate the National Liaison

Officer (NLO) Program, because it would impinge on the sovereignty

of TC recipients to determine how their respective NLOs interact

with the IAEA TC Division. (NOTE: The TC Division requested this

evaluation because there are serious deficiencies in the NLO

program. The TC Division hopes the evaluation will provide a

platform from which to standardize NLO procedures and functions. END

NOTE)



12. (U) Brazil and Angola spoke on behalf of their respective

regional groups, thanking OIOS for its work in 2009. Both groups

stressed the need for continued funding of TC projects in sterile

insect techniques and food irradiation. GRULAC also opposed the

OIOS 2010 evaluation on NLOs, but the Africa Group did not.

National statements by Ukraine and Malaysia supported OIOS

evaluations for 2009 and welcomed the 2010 work plan, although

Malaysia also will not support the NLO evaluation. Speaking in

strong support of all OIOS work, Japan and Canada noted the need for

all recommendations/conclusions to be implemented and welcomed the

2010 work plan. Both countries requested all evaluations of TC

projects be shared with Member States. South Korea again announced

its intention to request no further TC and henceforth be exclusively

a donor to the TC program; the ROK offered to partner with the TC

Department to provide training for countries embarking on nuclear

power programs. India and the U.S. were the only countries that

requested further clarification of the report being prepared by the

Secretariat on regional TC field presence and cautioned that the TC

Department should not undertake any action without appropriate

consultation with Member States. The Board Chair's conclusions noted

that several members expressed concerns about the shortcomings in

evaluation, monitoring, project design, etc.



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THE TACC REPORT TO THE BOG

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13. (U) The TACC adopted a report on November 24 noting TC is the

main vehicle for transferring nuclear technology to developing

countries and the need for assured, predictable, and sufficient

funding. The Arab Group's call for strict application of the due

account mechanism was also reflected. The importance of RBM was

noted as well as the opposition to it. Ultimately the TACC

recommended the Board approve the 2010 TC program "with the

exception of project INT/0/085, which will be subject of work in a

working group with a view to further developing the project and

resubmitting it to the Board at a forthcoming meeting." (NOTE:

During informal consultations on the TACC report, South Africa, on

behalf of the G-77, announced the Group had no intention of allowing

the RBM projct to be considered by the March 2010 Board as called

for by the U.S., Canada and others. END NOTE)



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BOG APPROVES TACC REPORT

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14. (U) On November 26 the Board approved the TACC report by

consensus. The Board also took note of the OIOS evaluations

completed in 2009.



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COMMENT -- TC's FUTURE

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15. (U) The 2009 TACC was marred by the political bias of a small

group of vocal G-77 states against the RBM project. Many G-77

states with whom we engaged on the issue confessed that they were

unfamiliar with the project at issue, and indicated vague concerns

(based on what they heard from others)that this was the beginning of

a western effort to restrict access to TC. The unfortunate deferral

of the RBM project led most Geneva Group members to call for more

monitoring and evaluation of TC projects in order to ensure that

funding by donors continues in difficult economic times. Over two

days the G-77 (and the Board Chair) argued that RBM is a "dubious"

management practice. Moreover, they asserted individual TC projects

should not have to undergo evaluation or monitoring because it

infringes upon their sovereignty and introduces political issues

into the TC program, something prohibited by Article III.C of the

Statute. That article, however, refers to political, economic,

military or other conditions "incompatible with the provisions of

the Statute," and in our view cannot be construed as referring to a

management tool such as RBM. The very actions of the G-77 have set

a precedent which can be used by others in the future to similarly

divert TC projects to a working group for redesign. In the future

this would provide the opportunity for any group of concerned Member

States to call for the establishment of a working group on any and

all projects that may not be designed well or are deemed

inappropriate.



16. (SBU) The fate of the RBM project is not clear. To date the TC

Department has not announced the formation of the RBM working group

or its composition. DDG Cetto also declined to press for a firm

reporting date of March 2010. The G-77, through South Africa, have

categorically said they do not intend this project to be approved at

the March 2010 Board (if at any time). Mission recommends active

USG participation in the RBM working group so as push for

implementation of this common management practice and management

reform in TC. Whatever the shortcomings of this particular

Secretariat-proposed RBM project, the broader objective would be to

drive home the importance of TC management reform and not perpetuate

the G-77 interpretation of the TC program as an on-demand

entitlement free of financial accountability to contributors.



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