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RHEGGTN/DEPT OF ENERGY GERMANTOWN MD

C O N F I D E N T I A L UNVIE VIENNA 000069 
 
SIPDIS 
 
DEPT FOR IO/GS AND ISN/MNSA 
 
E.O. 12958: DECL: 02/24/2019 
TAGS: AORC KNNP IAEA ENRG TRGY EAID
SUBJECT: IAEA/TC: PROSPECTS FOR REFORM OF THE TECHNICAL 
COOPERATION PROGRAM 
 
REF: 09 STATE 112473 
 
Classified By: Charge Geoffrey Pyatt reasons 1.4 (b) and (d) 
 
¶1.  (C)  This is an action message for ISN.  Please see 
para. 11. 
 
¶2.  (C)  SUMMARY: As the UNVIE continues to 
monitor Technical Cooperation projects, attend 
regional TC planning meetings, and engage in 
special briefings on issues such as results-based 
management (RBM), further management shortcomings 
in the Department of Technical Cooperation 
continue to come to light. In an effort to engage 
the IAEA's new leadership and promote reform, 
Mission demarched IAEA officials based on reftel 
outlining GAO recommendations for better management 
of the TC Programme. In subsequent conversations 
with the IAEA's External Relations  and Policy 
Coordination Office (EXPO), Missionoffs were 
thanked for spurring Director General Amano and 
other senior officials to think about ways to 
improve the TC Programme. EXPO assured Missionoffs 
that a response to the GAO recommendations would 
be forthcoming, possibly during DAS Kang's visit 
(March 1-4). In a subsequent conversation 
with Canadian counterparts, with whom Mission shared 
our nonpaper derived from reftel, Canada voiced its 
support for TC Reform and offered to work with the 
U.S. to achieve desired results. A complicating 
factor for Canada is that due to domestic fiscal 
considerations and a lack of coherent management in 
the TC Department, the Canadian Government may 
withhold its contribution to the Technical 
Cooperation Fund in 2010 and beyond.  Alarmed 
by the uproar such a move would provoke among G-77 
countries, Canadian diplomats suggested that U.S. 
officials consider raising with Ottawa the 
importance of paying TCF contributions in full. 
END SUMMARY 
 
--------------- 
CAN DO ATTITUDE 
--------------- 
 
¶3.  (C) During discussion with EXPO officials in 
February, Missionoffs found EXPO to be 
appreciative of reftel demarche based on 
the GAO review of the management shortcomings 
in the IAEA TC Department.  EXPO officials 
noted the excellent timing of the demarche 
given the transition to a new DG and 
subsequent decisions about bringing on new DDGs. 
Although DDG Cetto tends to project a "steady 
as she goes" approach that defers to members 
state preferences, EXPO expected many of the 
reftel points could be easily implemented, 
such as releasing project information in a 
more timely manner before the November TACC 
and Board. Additionally, EXPO agreed that 
bigger TC projects encompassing several member 
states is a better use of resources than large 
numbers of overlapping national projects 
that overlap. EXPO assured Missionoffs that 
it would coordinate a unified Agency response and 
present it to the USG quickly, perhaps during DAS 
Kang's visit (March 1-4). EXPO also stressed that 
the TC Department would implement any changes as 
communicated to the U.S. 
 
----------------- 
CAN'T DO ATTITUDE 
----------------- 
 
¶4.  (C) When reftel demarche reached DDG 
for TC Ana Maria Cetto and her senior 
staff, it was received coolly. Missionoff 
spoke with EXPO officials who confirmed 
that DDG Cetto was alone in her opposition 
when told by EXPO that the Agency should 
implement USG suggestions in compliance 
with GAO recommendations as much as possible. 
Other senior staff in the TC Department 
welcomed reftel suggestions and agreed 
with EXPO's assessment that many of the 
U.S. proposals are reasonable easily 
implemented. (Comment: So long as DDG Cetto 
remains in place we can expect her to 
 
try to slow roll reforms she does not 
agree with. End Comment) 
 
-------------- 
DDG Cetto's Future 
-------------- 
 
¶5.  (C)  According to Canadian counterparts Cetto 
continues to cater to G-77 interests rather than 
being balanced and apolitical, in the hope that 
she will garner enough G-77 support to retain 
her position as DDG.  Her contract expires 
in 2010 and Mission fully expects DG Amano to 
appointment a new DDG instead of retaining Cetto. 
The Mexican Mission has indicated to us that 
they expect Cetto to go but would like to retain 
a senior IAEA position for another Mexican 
national. Cetto's senior staff, Donatella 
Magliani and Oscar Acuna, both program 
coordinators, are also contemplating their 
future. Magliani, who was promoted by former 
DG ElBaradei prior to his departure, has been 
blamed by many within the Agency for 
the debacle at the November 2009 Board over a 
TC project to provide training on results-based 
management (RBM).  Magliani has indicated she 
will leave her position in late 2011/early 
¶2012. Acuna has indicated he will stay on 
and seek a contract renewal. TC Director for 
Europe, Peter Salema, continues to maintain he 
is not seeking the DDG position, but Kenya 
and other Africa Group members continue to 
lobby quietly on his behalf. 
 
-------------------------- 
TC Project Cycle 2012-2013 
-------------------------- 
 
¶6.  (C) In the run-up to the 2012-2013 project cycle, the 
TC Department has been updating its rules and procedures 
for project submittals by recipient states. According to 
Oscar Acuna, TC Program Coordinator, the new guidelines 
will be issued during the week of March 1. 
The guidelines do not need member states' approval 
and therefore will not be taken up during the Board 
of Governors.  While many things will stay the same, 
significant changes in the number of projects a 
recipient state can request and in evaluation are 
foreseen. (Note: Mission will report on new 
project guidelines when they become available and begin 
consultations on the new project cycle in August to 
ensure USG has enough time to conduct reviews of all 
project and regional strategy proposals. End Note.) 
 
------------------------------ 
Results Based Management (RBM) 
------------------------------ 
 
¶7. (C) Prior to and during the November 2009 Board, 
a Secretariat-proposed project on RBM drew 
criticism from many G-77 states that maintained 
the project was a way for Western states to 
control the spread of peaceful uses of nuclear 
technology. The Chair's conclusions for the 
November 2009 TACC called for a working group 
on RBM a suggestion promoted by the G-77 and 
then-Board Chair. The WG as proposed by the 
Secretariat was to consist of three WEOG and 
three G-77 member states, with the 
Secretariat as the Chair. While WEOG 
forwarded three names (Canada, Belgium, and 
Denmark), the G-77 did not and continues to 
refuse to do so.  DDG Cetto and Magliani met 
with G-77 representatives, at their request, on 
February 9 to speak once again about the 
utility of RBM.  According to Magliani the 
meeting was dominated by Iran, Egypt and 
Pakistan, who called on Cetto to create 
a formal WG on Technical Cooperation, 
not on RBM.  Magliani said the idea "shocked 
Cetto" and that it would not gain traction with 
the TC Department or EXPO. In a February 15 
conversation with Missionoff, Canada voiced 
its concern over this notion, suggesting that 
any formal WG on Technical Cooperation 
would only allow the G-77 to control the 
project submission process even further while 
eroding all oversight and evaluation of TC projects. 
 
 
¶8. (C) Canada continues to be a proponent of 
RBM and raised the issue during WEOG 
consultations with the Board Chair. The new 
Chairman, Malaysian Ambassador Shahrul Ikram 
Yaakob, acknowledged that nothing has moved on 
this issue in three months and pledged to 
find a way forward. Canada on behalf of WEOG 
noted that some sort of closure was needed 
on RBM. In subsequent conversations, Canada said 
it would reiterate this view at the March Board of 
Governors in a statement under "Any Other Business". 
Ambassador Davies, in the U.S. bilat with the 
Board Chair on February 17, also made a point 
of the transparently political exploitation of 
the RBM project by some G-77 states. 
 
 
----------------- 
Canadian Problems 
----------------- 
 
¶9. (C) In addition to Canadian concerns about 
TC project management, Canadian counterparts 
previewed possible problems concerning their 
payment of TC Fund contributions in 2010 and 
future years.  Because Canada's TCF 
contribution comes from its development 
agency, the Canadian Mission in Vienna must 
justify the IAEA's role as a development 
agency. In recent years this has become more 
difficult, because TC projects are not 
in-line with recipient states' declared 
development goals and some TC projects 
are in no way tied to development (i.e. 
HEU removal). With domestic fiscal 
constraints generally and confidence 
in the TC Programme shrinking specifically, 
Canadian counterparts in Vienna cites the 
fact that Canada did not pay its 2009 TCF 
contribution until the very last day of the 
year  as evidence of Ottawa's fading enthusiasm. 
(In contrast, Canada regularly pays its assessed 
contributions to the IAEA on the first day of 
the year, or, in the sace of its 2010 
contribution, weeks before it was due.) 
Our Canadian counterparts expect Canada 
would not be in a position to pay its TCF 
contribution in 2010 and perhaps beyond. 
They anticipate their failure to meet Canada's 
"voluntary scale of assessment" would have 
negative implications for Canada's participation 
in the Agency and hand the G-77/NAM a talking 
point on the broader theme that the West 
disrespects the Agency's balance between 
peaceful uses and "policing". Both Canadian 
counterparts requested that the USG consult 
Ottawa about the political fallout such a 
decision would cause. 
 
------- 
COMMENT 
------- 
 
¶10.  (C) TC is broken, but not beyond repair. Taking 
advantage of the Administration's renewed 
multilateral approach, the U.S. can assist in 
creating a more transparent environment in which 
Member States can ensure recipient states get what 
they need while minimizing proliferation risk. To 
leave behind the acrimony that characterizes the 
North/South divide about TC, any efforts to 
promote better planning, management, and 
transparency should be presented to the extent 
possible in terms of improving the efficiency 
and effectiveness of TC and of project delivery for 
recipient states. To mitigate potential 
G-77/NAM resistance, such efforts should be 
presented to the Secretariat by a group of like-minded 
states that reaches across regional groups. This 
necessarily means that all WEOG members must pay 
their full TCF contributions in a timely manner 
to avoid drawing G-77 criticism as being 
unsupportive of one the Agency's pillars. 
 
¶11. (C)  Mission suggests Department seek bilateral 
consultations with counterparts in Ottawa to 
ascertain Canada's position on its TCF payment for 2010. 
 
DAVIES