IAEA/BOG: AMANO DEFUSES BOARD CHAIR CRISIS

C O N F I D E N T I A L UNVIE VIENNA 000044 SIPDIS DEPT FOR T, P, IO, ISN, EAP, ISN/MNSA, IO/GS DOE FOR S2, SA-20 NSC FOR SAMORE, SCHEINMAN, HOLGATE NRC FOR OIP DOANE E.O. 12958: DECL: 02/08/2020 TAGS: PREL AORC KNNP IAEA MY SUBJECT: IAEA/BOG: AMANO DEFUSES BOARD CHAIR CRISIS REF: UNVIE 32 Classified By: Ambassador Glyn T. Davies for reasons 1.4 b and d ¶1. (C) The IAEA Board of Governors will meet in a pro forma session February 12 to elect a new Chairman, bringing an end to a drawn out saga prompted by the recall of former Malaysian Governor Dato' Arshad. The Southeast Asia/Pacific (SEAP) group has advised the Director General, in a letter subsequently circulated to Board members, of its nomination of the new Malaysian Governor Dato' Muhammad Shahrul Ikram Bin Yaakob (most recently Malaysian Ambassador to Qatar) as the new Chairman of the Board of Governors through September 2010 and requested that the Board be convened as soon as possible to consider the nomination. Ikram is expected in Vienna on February 11 and will eventually be accredited bilaterally to Austria and Slovakia as well as to all international organizations here. As the current Board year between the 2009 and 2010 General Conferences is SEAP's "turn" to nominate a Chairman (the Chairmanship rotates by tradition among regional groups) and consistent with precedent, the Board is widely expected to waive the rule governing an election (Rule 7 of the Provisional Rules of Procedure) and install Ambassador Ikram as Chairman by acclamation. Thus the new Chairman would be in place to conduct regional group and bilateral consultations starting February 15 in preparation for the March 1-5 Board session. ¶2. (C) This is the best outcome we could have hoped for in terms of both U.S. interests and those of the IAEA. Since his unexpected return to Vienna after his publically announced recall, departing Ambassador Arshad had become a liability, seeking to rally support for his reinstatement among the G-77/NAM while blaming the U.S. for his fate (his recall having been prompted by Malaysia's "No" vote on the November Board resolution on Iran). His sad, unseemly campaign culminated in an informal demarche February 2 by a group of G-77 members on Ambassador Davies to solicit U.S. intervention with the GOM on Arshad's behalf (reftel). The lack of clarity surrounding Arshad's status (he had been stripped of authority to exercise his functions as Board Chairman) threatened to leave the Board in limbo. ¶3. (C) IAEA Director General Amano's quiet intercession with the Government of Malaysia was instrumental in helping to bring this saga to a close. In a January 28 letter to Malaysian FM Anifah, Amano asked for clarification of the Chairman's status for the "smooth functioning of the Agency." Amano's staff followed up with the Malaysian MFA, pressing Kuala Lumpur to fulfill its obligations to the IAEA by clarifying the status of the Malaysian Ambassador. By February 4 the IAEA had received the credentials of the new Malaysian Governor stipulating "with immediate effect" his replacement of Arshad. The Australian Chair of the SEAP group submitted Governor Ikram's nomination to the Board February 5 following a 24-hour silence procedure among SEAP members (Australia received positive responses from the most consequential members with no opposing views). ¶4. (C) Comment: This was arguably Amano's first "test" as Director General. In defusing, with what is likely to be recognized as signature discretion, the unprecedented situation surrounding the recall of the Board Chairman, the DG showed some spine in not acceding to NAM appeals to help Arshad overcome his "victimization." Amano's role was notably different from that of his predecessor; indeed, ElBaradei warned us it would be highly damaging to the U.S. if Arshad were removed from his position. This issue could have easily become a NAM cause celebre with the U.S. caught in the crosshairs, and would have overshadowed the March Board, Amano's first Board session as Director General. Instead, the G-77/NAM have no choice but to concede to Malaysia's sovereign decision to appoint a new Governor who is widely expected to be appointed Board Chairman. We do not rule out the possibility of some sniping by NAM hardliners on the margins, but this potential crisis has effectively been neutralized. In a February 8 conversation with Ambassador Davies, a deflated Arshad was resigned to his fate. DAVIES