IAEA: NOVEMBER 2009 TACC AND BOARD TC WRAP-UP

UNCLAS UNVIE VIENNA 000546

STATE FOR IO/GS, ISN/RA, ISN/MNSA, ISN/NESS
DOE FOR NE - MCGINNIS, CLAPPER, HERCZEG, HAN, NA2O - BAKER, WITTROCK
AND NA24 - LERSTEN, SCHEINMAN, GOOREVICH, BRUNS
NRC FOR OIP - MDOANE, JSCHWARZMAN
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E.O. 12958: N/A
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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