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Cablegate: Unvie

VZCZCXYZ0001
PP RUEHWEB

DE RUEHUNV #0639/01 3391407
ZNR UUUUU ZZH
P 041407Z DEC 08
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 8777
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY

UNCLAS UNVIE VIENNA 000639

STATE FOR IO/T, ISN,
ISN/MNSA - RAGSDALE, COCKERHAM, DAVIS
- ISN/NESS - STRATFORD, BURKART
- ISN/RA - NEPHEW, GROMOLL
DOE FOR S-1, S-2
- NE - MCGINNIS, CLAPPER, HERCZEG, HAN
- NA 2O - BAKER, WITTROCK
- NA24 - LERSTEN, SCHEINMAN, GOOREVICH, BRUNS
NRC FOR OIP - MDOANE, JSCHWARZMAN
ROME FOR USMISSION TO FAO

SENSITIVE BUT UNCLASSIFIED
SIPDIS

E.O. 12958: N/A
TAGS: AORC KNNP IAEA ENRG TRGY IR KN SY

SUBJ: IAEA: NOVEMBER 2008 BOARD WRAP-UP

Ref: A) UNVIE 633 B) UNVIE 637 C) UNVIE 635 D) UNVIE 598 E) STATE
121438

-------
SUMMARY
-------

1. (SBU) The November 27-28 Board of Governors meeting focused on
nuclear verification in Syria and Iran (refs a-c) and approval of
the Technical Cooperation (TC) program cycle for 2009-2011,
following a contentious agreement in the preceding Technical
Assistance and Cooperation Committee (TACC) on the disposition of
the Syrian feasibility study project (septel). Discussion of DPRK
was largely a placeholder, pending Six Party agreement on the
verification protocol, with Board members expressing support for the
IAEA's verification role. In addition, the Board approved Draft
Safety Requirements, a funding extension for physical security at
the Vienna International Center, and an Additional Protocol for
Zambia. Under Any Other Business, the Board Chair's proposal for an
open-ended Working Group on 20/20 recommendations met with
nit-picking on the part of both OECD and G-77 countries that
underlined the need for member state input and setting parameters
for the process. Only Japan announced that it would make a
substantial contribution to the Safeguards Analytical Laboratory, an
issue parenthetically inserted on the agenda under AOB, and Norway
announced its contribution to fund the IAEA fuel bank. The UK,
Canada and, at our suggestion, Afghanistan also advocated the
implementation of DG term limits under AOB in keeping with UN best
practice and in light of the upcoming DG election. On the margins
of the Board, South Africa officially delivered its nomination of
Governor Minty for DG, and campaign pitches on behalf of Minty and
Japanese Ambassador Amano were made under AOB. End Summary.

---------------------------------
Agenda Item 1: DG Opening Remarks
---------------------------------

2. (U) In addition to Iran (ref b), Syria (ref c) and DPRK (para 11)
verification items, Director General ElBaradei provided general
comments on the TC program for 2009-2011. He noted that human
health remains the single largest TC sector, representing 18 percent
of the program, and food and agriculture programs have also
increased. The DG highlighted the Agency's role in cancer
prevention (44 countries requesting assistance under the Program of
Action for Cancer Therapy (PACT) and the launch of a WHO/IAEA Joint
Project on Cancer Control) and Mexico's successful use of the
Sterile Insect Technique. The Agency further anticipated a
four-fold increase in number of TC projects for 2009-2011 focused on
introduction of nuclear power. Assistance in this domain covered
the entire process to ensure solid infrastructure with high levels
of safety, security and non-proliferation. The DG noted the Draft
Safety Requirements and an Integrated Regulatory Review Service
Mission in Spain that incorporated, for the first time, a security
component. Under nuclear verification, he observed that Zambia's
conclusion of an Additional Protocol (AP) would bring the number of
APs in force to 88, little more than half of the states with
Comprehensive Safeguards Agreements (CSAs.)

3. (SBU) The DG also made some pointed remarks on the Agency's
verification process and the Safeguards Analytical Laboratory (SAL).
He noted the obligation to assess the veracity of information
provided to the IAEA, and stressed the need for full cooperation and
transparency from the State concerned given the Agency's limited
legal authority. He reiterated assurances as to the anonymity of
environmental samples sent to the Network of Analytical Labs but
advised that the Agency could not independently validate results in
some cases. ElBaradei used this as a pitch for refurbishing SAL at
an estimated cost of 35 million Euros. With only a two million Euro
pledge from Japan received so far, the "ball is in your court," he
told Member States. He further noted that the Agency relied on
Member State and commercial satellite imagery only as an auxiliary
source to corroborate other information. (Comment: Although the DG
made these comments in a general vein, they were clearly related to
the Syria verification case; see ref c. End Comment.)

4. (U) Finally, the DG reported that 4.5 million Euros of the 2006
cash surplus had been secured for the Agency-Wide Information System
for Program Support (AIPS). The remainder of the 10 million Euros
needed for the first stage of AIPS would be sought from
extra-budgetary resources and savings.

--------------------------
Agenda Item 2: TACC Report
--------------------------

5. (SBU) Board Chair Feroukhi began the discussion of the report of
the Technical Assistance and Cooperation Committee (TACC) with a
plea that the Board not re-open the agreement on approval of the
2009-2011 TC program, which had been the subject of laborious
negotiations over the disposition of the Syrian feasibility study
project in the November 24-26 TACC (septel). Only the EU, U.S. and
Pakistan on behalf of the G-77 made substantive comments, and the
Board approved the TACC report by consensus.

6. (SBU) France delivered the EU statement, noting that collectively
it was the top contributor to TC and supported OIOS recommendations,
including on Country Program Frameworks, which significant TC
recipients have not completed. The EU underlined the need for
guiding principles for TC to ensure the consistency of nuclear power
projects, in particular, linkage to the Milestones document and
other benchmarks as well as transparency in procurements for
"umbrella projects," comments clearly aimed at the Syrian
feasibility study proposal. The EU also called on states embarking
on nuclear power to adhere to nuclear safety and security
conventions. The U.S. statement likewise emphasized that nuclear
power projects should track the Milestones document. The U.S.
further urged timely implementation of OIOS recommendations on
evaluation of TC activities, and greater internal coordination
within the Secretariat on safety, security and nonproliferation.

7. (SBU) Pakistan stressed the great importance G-77 members
attribute to TC assistance as the main vehicle for nuclear
technology transfer to the developing world, and the need for
assured, predictable and sufficient funding, as mandated by the
General Conference. Also reflecting the contentious TACC debate on
the Syrian project, the G-77 warned against interference in TC or
micromanagement of the Secretariat, and concluded that any
"political conditions" placed on TC weaken and undermine the
credibility of the Agency.

----------------------------------------
Agenda Item 3: Draft Safety Requirements
----------------------------------------

8. (U) The Board approved the Draft Safety Requirements: Safety
Assessment for Facilities and Activities (GOV/2008/54) by consensus
with supportive interventions by Switzerland, South Africa, Spain
and, under Rule 50, the Republic of Korea highlighting the
importance of the Agency's work on safety standards. South Africa
noted that the safety requirements provide an excellent guide for
Member States and contribute to enhancing the safety and security of
nuclear facilities. Spain welcomed the draft safety requirements
but questioned how the 2015 safety restructuring plan and the
iteration of new safety standards would affect these existing safety
guides.

--------------------------------------------
Agenda Item 4: Funding for Physical Security
--------------------------------------------

9. (U) The Board approved the extension of funding for physical
security requested in GOV/2008/58 with a number of Board members
(including the U.S.) registering dissatisfaction with the slow pace
of security upgrades at the Vienna International Center. (Note: The
UN Office in Vienna (UNOV) has overall direction of the project. End
Note.) Cuba and Pakistan complained that such projects had been
"imposed upon them" in the past and requested more information. DDG
for Management David Waller outlined the reasons for the delays and
noted that a series of briefings for Member States over the course
of the project had been held, with another briefing planned in
coming weeks. On the margins, he welcomed our criticism of UNOV as
helpful to his effort to move the project along.

---------------- ---------------------------------------
Agenda Item 5: Conclusion of Safeguards Agreements, APs
---------------- ---------------------------------------

10. (U) The Board authorized the conclusion of an Additional
Protocol with Zambia. Cuba, speaking on behalf of NAM, took note of
Zambia's decision to enter into an AP. Australia warmly welcomed

Zambia's decision and encouraged all states to conclude APs, which
strengthen safeguards and provide assurances as to the absence of
undeclared nuclear material and activities. Australia noted that
Comprehensive Safeguards Agreements together with APs are now the
established safeguards standard. South Africa regretted that 30
non-nuclear-weapon States party to the NPT had not yet brought a
safeguards agreement into force, and that more than 100 states have
not concluded an AP. The Agency should be vested with the necessary
verification tools, South Africa concluded, and it is incumbent on
all States to provide all the support and assistance required to
fully implement its verification mandate.

--------------------
Agenda Item 5b: DPRK
--------------------

11. (SBU) In his opening statement to the Board, the Director
General made noticeably short remarks on DPRK. He updated the Board
members that the Agency had resumed monitoring and verifying the
shutdown status of the Yongbyon nuclear facilities, including the
reinstallation of the IAEA's containment and surveillance equipment.
In a departure from his previous statements, the DG did not update
the board on the status of disablement, i.e. the status of fuel
discharge, but noted only that the Agency "has been monitoring
disabling activities." He added that he remained hopeful that
"conditions will be created" for the DPRK to return to the NPT and
for the Agency to resume the implementation of comprehensive
safeguards. The DG did not raise the issue of DPRK's NPT status,
which he posited to Board members in June and September.

12. (SBU) The Six Party members present -- China, Japan, Russia, and
the U.S., with South Korea speaking under Rule 50 -- delivered
statements, as well as France on behalf of the EU, Australia,
Canada, New Zealand, Malaysia, Switzerland, Egypt, the Philippines,
and South Africa. Thailand also spoke under Rule 50. Six Party
Talks received broad support as did an enhanced role for the IAEA in
verification. The EU, Japan, and Canada joined the U.S. in reminding
Board members that all states must abide by UNSCR 1718.

13. (SBU) China spoke first, recalling the significant progress made
by the Six Party framework and announced the December 8 Head of
Delegation (HOD) meeting with a view to advancing to a new phase in
the process. Russia reaffirmed the importance of the 2005 Joint
Statement, and hoped disablement would be concluded as soon as
possible. Russia also noted that verification must include IAEA
specialists, due to their experience in this area. Japan observed
that North Korea's intentions remain unclear in the talks, and cited
a November 12 statement by a DPRK official that expressed a negative
position on sampling. Japan also cited the IAEA's significant
contribution to the denuclearization of North Korea. South Korea
acknowledged the ups and downs of the process, but looked forward to
the December 8 HOD meeting to establish a verification mechanism.
South Korea stressed the essential role of the IAEA in
verification.

14. (SBU) Like-minded countries looked forward to continued progress
through the Six Party framework. New Zealand and Canada were
reassured disablement was once again continuing. Australia and the
Philippines called for a timetable for completion of disablement
measures and for the conclusion of a verification protocol. The EU
and Australia expressed concern over the slowdown in fuel unloading
in recent months.

15. (SBU) The Philippines stressed the critical role of the Six
Party Talks to achieve a peaceful solution to the nuclear issue in
North Korea. Switzerland noted that the IAEA was not part of the
Six Party talks and reminded Board members that the IAEA requested
clarity on DPRK's NPT status. Switzerland raised the U.S.-DPRK
verification agreement announced on October 11, calling it an
"encouraging" development, but was concerned about the provision of
access to undeclared sites being granted by mutual consent.
Switzerland appealed to North Korea to rejoin the NPT. Under Rule
50, Thailand reaffirmed its full support of the Six Party process
and advocated confidence building measures for continued dialogue
and diplomacy.

16. (SBU) Board newcomers Egypt and Malaysia, which do not usually
speak under the DPRK item, delivered positive statements supporting
the Six Party Talks, and stressing the IAEA's essential role in the
verification process. Egypt further requested that the Six Parties
proceed in a way that "will strengthen the nonproliferation regime."
Malaysia noted its appreciation for China's role as Chair of the
Talks.

----------------------------------------
Agenda Item 6: Any Other Business; 20/20
----------------------------------------

17. (U) Opening the discussion of AOB, Board Chair Feroukhi
summarized her informal consultations with Member States on
follow-up to the Report by the Commission of Eminent Persons (CEP
Report). She noted no objections to her proposal of forming
open-ended "cluster groups" but little enthusiasm either (ref d).
She emphasized that both the CEP Report and the Direct General's
Background Report on 20/20 could serve as useful resources, but that
Member States would decide which issues to pursue. Feroukhi
entrusted stewardship of the process to Board Vice Chair Kirsti
Kauppi of Finland.

18. (SBU) Pakistan (speaking on behalf of the G-77) greeted the
announcement with cautious optimism. France, Canada, India, the
U.S. and New Zealand raised questions about the parameters of the
process, the anticipated outcomes, time frames, the structure of the
debate, etc. Malaysia asked that financing technical cooperation be
a specific objective. Chair Feroukhi eventually grew frustrated
with what she characterized as the negative tone of the statements
and exhorted Member States to be more "enthusiastic." She signaled
her intention to continue the process she had proposed and then
closed further debate.

19. (SBU) Comment: Private comments to Mission staff by DG ElBaradei
and EXPO Chief Cserveny revealed Secretariat appreciation for the
U.S. statement, which had been more cooperative and thoughtful than
statements by other like-minded Members. ElBaradei, clearly
disgusted by the nit-picking tone of some interventions, appealed
for U.S. leadership going forward. If we do not set a tone and
direction for this process, the DG counseled, the divisions inherent
in the IAEA membership will doom the effort to modernize the
Agency's agenda and operations.

--------------------------------
AOB: SAL, RANF and Other Issues
--------------------------------

20. (SBU) There was some consternation on the part of Board members
who resented the fact that the Secretariat included a reference to
an information report on SAL (GOV/INF/2008/15) under Any Other
Business in parentheses, seeing this as a possible effort by the
Secretariat to claim a Board imprimatur for Secretariat plans
regarding SAL (by appearing to have prompted a Board review), when
in fact, many Board members still have questions as to the way
forward on SAL. As it turned out, only Japan addressed the proposed
SAL upgrade and stated it was considering a "substantial
contribution" to the project. Japan expressed appreciation for the
Secretariat's continuing work, welcomed consultation with Member
States, and hoped that plans would proceed in a timely manner.
Malaysia announced the establishment of a new analytical lab, which
it hoped could be added to the IAEA network.

21. (U) Russia announced that it would be making a contribution to
the Nuclear Security Fund (1.5 million USD in 2010, one million USD
annually 2011-15), highlighting its commitment to combat trafficking
in nuclear materials. Norway announced its contribution of 5
million USD to the proposed IAEA-administered International Fuel
Bank. The U.S. welcomed Norway's contribution, and noting its
commitment of 50 million USD to the project, encouraged discussion
of a concrete proposal at the March Board. The U.S. also welcomed
Russia's financial contribution to Nuclear Security and Japan's
announcement of a January 26, 2009 conference on fuel assurances.
Privately, UK Del informed us that if the Secretariat advances an
agenda item on fuel assurances for March 2009, the UK would in
parallel host a conference on its enrichment bonds concept and
related proposals.

22. (U) The EU announced an upcoming nuclear energy conference, and
Malaysia is also sponsoring an international conference on nuclear
energy partnerships.

---------------------------
AOB: DG Race / Term Limits
--------------------------

23. (SBU) South African Governor Minty, accompanied by a SAG
Minister, held a news conference on the margins of the Board to mark
the official submission of his candidacy by South Africa. Under
AOB, Zimbabwe, as African Union spokesman, announced the first of
its kind endorsement of Minty's candidacy for DG, following the
unavailability of ElBaradei for a further term. Both the press
conference and the AOB statement focused on Minty's commitment to
peaceful use of nuclear energy and technology. Not to be outdone,
Japan reaffirmed its strong support for Amano's candidacy and was
seconded by Mongolia, also speaking under AOB. Mongolia noted the
need for regional rotation of the Director General position,
suggesting it was Asia's turn. South Korea also spoke in favor of
"the Asian candidate" succeeding to the Director General's position.


24. (SBU) With prompting from the U.S. delegation (ref e
instructions), Canada, the UK and Afghanistan advocated term limits
for the Director General under AOB. Canada and the UK, also
speaking on instructions, cited the 1997 UNGA resolution on
strengthening the UN, which recommended term limits for executive
heads of specialized agencies. The UK seconded Canada's request
that this issue be added to the Board's agenda. Reading from our
talking points, Afghanistan suggested that the DG election was an
opportune time to reconsider term limits and called upon declared
candidates for the position to endorse a two-term limit. (Note: The
U.S. decided not to make a statement on term limits after Iran
half-jokingly suggested in its intervention under the Iran agenda
item that ElBaradei serve a further term to deal with its dossier.
Afghanistan, as a NAM/G-77 member, was better placed to make a
statement, which should also help dispel the impression that term
limits is a Western/Geneva Group initiative. End Note.)

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