VZCZCXYZ0000
PP RUEHWEB

DE RUEHUNV #0284/01 1400823
ZNY SSSSS ZZH
P 190823Z MAY 08
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 7945
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY
RUEHUL/AMEMBASSY SEOUL PRIORITY 0240

S E C R E T UNVIE VIENNA 000284 
 
SIPDIS 
 
DEPT FOR ISN/RA AND IO/T 
 
E.O. 12958: DECL: 05/18/2018 
TAGS: AORC PARM ENRG TRGY KNPP KN
SUBJECT: IAEA:  U/S ROOD TOUR D,HORIZON WITH DG ELBARADEI 
AND SECRETARIAT OFFICIALS 
 
 
Classified By: Ambassador Gregory L. Schulte for reasons 1.4 b, d, h 
 
 Summary 
--------- 
 
¶1. (C) In a series of meetings with IAEA Director General 
ElBaradei and Secretariat officials May 6, Acting U/S for 
Arms Control and International Security John Rood discussed 
priority issues on the U.S. agenda: nuclear safeguards in the 
DPRK and India; reliable access to nuclear fuel (RANF) and 
the U.S.-Russia agreement on nuclear energy and 
non-proliferation; the 20/20 process, and, finally, the 
IAEA's role in nuclear security.  Rood advised the DG that 
the U.S. sought to promote a greater IAEA role in DPRK 
verification.  Despite DPRK claims to the contrary, ElBaradei 
was aware of the U.S. position and also noted the need for 
clarification of the DPRK's NPT status.  The DG assessed the 
probability of bringing the India safeguards agreement to the 
Board in June as low, due to domestic Indian considerations, 
but was confident that it could secure swift passage, if 
necessary by a Special Board. 
 
¶2. (C) In an extensive discussion of RANF, the DG stressed 
intense sensitivity and skepticism on the part of the G-77 
and others.  He agreed that sterile debates on NPT rights 
lead nowhere and hoped to bring concrete proposals to the 
Board by September.  The IAEA fuel bank had the most promise 
as a symbolic measure, and he had told the Russians to come 
when they are ready with their proposal.  Separately, 
Secretariat officials focused on the perception of "foregoing 
rights" and the Russian proposal's provision of guaranteed 
export controls.  Acting U/S Rood welcomed the multiplicity 
of efforts on RANF but stressed that the U.S. proposal 
setting aside 17.4 million metric tons of HEU be given due 
consideration. 
 
¶3. (SBU) Rood expressed strong U.S. support for the IAEA and 
recognized the value of the 20/20 process but cautioned that 
resource constraints be factored in, lest this vision go 
unfulfilled.  The 20/20 report is expected soon but the DG 
did not anticipate substantive debate before the September 
Board and during the Scientific Forum on the margins of the 
General Conference.  Rood also discussed possible synergies 
between the IAEA and the Global Initiative to Combat Nuclear 
Terrorism (GICNT) with Nuclear Security Director Nilssen. 
The IAEA planned to participate in a GICNT table top exercise 
in May but had not yet been invited to the Madrid Ministerial 
in June.  End Summary. 
 
DPRK 
---- 
¶4. (S) In his May 6 meeting with the DG, U/S Rood advised 
ElBaradei of some progress on the DPRK issue; the declaration 
was expected shortly and the team was told thousands of pages 
of production records would be provided.  The plan was for 
China to receive the declaration as the Six Party Chairman 
and circulate it to the six.  He assured the DG that the U.S. 
preferred that the IAEA play a larger role, especially in 
verification, and, to the extent possible, would pressure the 
DPRK to agree.  The U.S. also remained committed to the 
DPRK's return to the NPT and Safeguards.  Rood advised 
Safeguards DDG Heinoen separately that the U.S. would urge 
China to give the declaration to the IAEA, though the DPRK 
was reluctant to do so. 
 
¶5. (S) According to ElBaradei, the DPRK had disingenuously 
claimed to the IAEA that the U.S. did not want to work with 
the Agency, which he knew to be false.  The DG further 
observed that the DPRK's NPT status was in legal limbo, a 
point also raised by EXPO Director Vilmos Cserveny.  Both 
ElBaradei and Cserveny cited a UK statement to the NPT 
Prepcom that stipulated the DPRK remained in the NPT.  The 
IAEA needed a clear answer as to whether DPRK was inside or 
outside the NPT in order to apply appropriate safeguards and 
the DG may raise the issue at the June Board meeting.  The DG 
said he believes "you are right" that the DPRK has left the 
treaty, but given the differing views, he needs an 
authoritative finding as to whether the international 
community expects the IAEA to attempt to implement the DPRK's 
NPT-related safeguards agreement.  Regardless of NPT status, 
however, upon the request of the Six Parties, the IAEA could 
verify the DPRK declaration, thus allowing the DPRK's return 
to the NPT, the DG presumed (assuming it has withdrawn.)  The 
IAEA stood ready to assist, though the DG noted it would be a 
lot of work and require consultation with weapons state 
experts, in the same way the IAEA drew from P5 states to 
support verification work in South Africa after it dismantled 
its weapons and joined the NPT.   In a separate briefing with 
EXPO, Heinoen saw no particular problems with monitoring or 
 
verification in the DPRK.  He noted that the IAEA would need 
funding to play a larger role in verification of the 
declaration.  Cserveny was aware that A/S Hill was promoting 
the IAEA's role. 
 
India 
----- 
 
¶6. (C) The DG was still hoping that an India Safeguards 
agreement could be brought to the Board but saw the 
likelihood as low.  He agreed that India got a good agreement 
with the U.S. and that this was more of an ideological issue 
within the Indian government.  He believed the Congress Party 
did not want to risk an early election on this issue.  Rood 
noted that this was now a domestic India issue and the U.S. 
was staying in the background.  As for the IAEA Safeguards 
agreement, the DG dismissed India specific "rhetoric" as just 
that, and still hoped to bring it to the Board.  His support 
for the India agreement had drawn criticism, he noted, 
including one full-page article from non-proliferation 
experts.  Once signed, the DG believed he could move a 
Safeguards agreement quickly through a Special Board with a 
couple of weeks notice.  He did not expect controversy and 
also did not see much of a problem in the NSG, despite 
nay-sayers such as Austria. 
 
Reliable Access 
---------------- 
 
¶7. (C) Rood had detailed discussions with the DG and in the 
EXPO briefing on Reliable Access to Nuclear Fuel (RANF).  As 
the world embarked on the so-called nuclear "renaissance," 
though it was much more than that, Rood noted, it was 
essential to address the proliferation risks of nuclear fuel 
cycle technology.  The DG agreed in principle but noted that 
the six countries had "shot themselves in the foot" when they 
first put forward a proposal that required forgoing 
enrichment.  Though the proposal has since been adjusted, the 
Agency was still trying to recuperate.  He registered a "huge 
sense of distrust" on this issue that extended beyond the 
G-77 to countries like Italy, Canada and Australia.  For 
instance, in the Committee on Program and Budget, one NAM 
member (Malaysia) opposed a passing mention of RANF in an 
unrelated program audit document.  Inherent distrust among 
the G-77 was also fueled by Iran, the DG noted, as RANF is 
seen as a means of putting extra pressure on Iran.  In the 
DG's view, the 10 percent of countries that are hard over on 
enrichment rights, either see it as a prestige and security 
issue, including through the prism of Iran; or have 
commercial concerns, as is the case with Canada and 
Australia. 
 
¶8. (C) Nevertheless, the DG believed he could still move the 
IAEA fuel bank proposal forward as a symbolic measure.  For 
the first time in the history of the Agency, it would be able 
to fulfill its statutory mandate in this regard.  He regarded 
the EU as the best prospect for funding and was going to 
Brussels to see Barosso later the same day.  He had 
approached Japan twice and was aware that Senator Nunn 
planned to speak to Gulf states.  Once he had the remaining 
45 million dollars to match the NTI and U.S. monies, the DG 
was prepared to bring the proposal to the Board.  Rood 
observed that the EU and France, in particular, were good 
prospects. Gulf countries looked promising, but Japan was 
unlikely to ante up.  The DG saw Japan's position as 
short-sighted.  He agreed that a diversity of contributors, 
especially recipient states, would be optimal and would seek 
to solicit even symbolic contributions from countries like 
India or Brazil. 
 
¶9. (C) Rood viewed the multiplicity of efforts on RANF as 
positive and agreed that the IAEA fuel bank proposal would 
have a psychological impact in showing progress.  He bemoaned 
the sterile debate in the NPT Prepcom between "haves" and 
"have nots," who used the same talking points a decade ago. 
ElBaradei concurred that NPT discussions were a waste of time 
and more on the ground progress was needed.  Having IAEA, 
Russian and U.S. fuel banks on-line would also send a 
psychological message, Rood noted, likening this to petroleum 
reserves.  Some counties may distrust the U.S. 17.4 million 
tons, but they would have other sources.  The DG observed 
that we just have to take the first step but absent a 
specific proposal any Board discussion would be circular.  He 
hoped the Russian proposal would be ready for the September 
Board and the IAEA fuel bank, which was easily acceptable and 
non-commercial, before then.  The Russian proposal seemed to 
be stuck between the Foreign Ministry and the technical 
people at Rosatom, according to the DG.  He had told the 
Russians to come when they are ready.  Rood offered to follow 
 
up with Russian Deputy FM Kislyak. 
 
¶10. (C) In a separate EXPO-arranged briefing, Nuclear Energy 
Director for Fuel Cycle and Waste Technology Hans Forsstrom 
reviewed the status of the various reliable access proposals 
to date.  It had already been a year since the Secretariat's 
report, he noted, but the issue was not yet ripe for the 
Board and was not expected to be added to the June agenda. 
Forsstrom cited the same sensitivities among the G-77 on 
philosophical issues and sought to work on practical 
proposals.  Three of the proposals seemed to be the most 
promising: the IAEA fuel bank, though he did not expect the 
EU would provide all of the remaining 45 million USD; the 
Russian proposal and to a lesser extent the German 
multinational enrichment center proposal.  The Russian 
proposal would be a good vehicle in his view to bring the 
issue forward, and should be acceptable to the G-77 and NAM. 
He noted that it includes a guaranteed export license, even 
if Russia were to cut off supply to a particular country. 
Rood inquired whether this meant the IAEA could override 
export controls in the event of a supply disruption.  The 
Secretariat saw this as a key issue of the IAEA-Russia 
agreement, putting the fuel under an international umbrella. 
Forsstrom highlighted three criteria the DG had put forward 
at a Berlin conference in April: multinational control; 
recognition of states NPT rights and obligations; and 
non-political criteria for the release of the fuel.  He 
explained that these three proposals (IAEA fuel bank, Russian 
and German) met the "test" among the "have nots", that they 
are not being asked to forgo any "rights." 
 
¶11. (C) Rood expressed support for Angarsk and the Russian 
proposal but asked why the U.S. proposal to set aside 17.4 
million metric tons of HEU seemed to have been discounted in 
Forsstrom's presentation.  The key issues, Forsstrom 
explained, were forgoing rights, on which he cited a 2005 
letter from Ambassador Schulte relaying the U.S. offer, and 
guaranteed export licenses.  He suggested the U.S. could make 
a proposal similar to the Russian proposal even with 
additional conditions on export that might apply to some 
countries.  Rood observed that the U.S. and Six-country 
proposals did not abridge NPT rights and "forgoing" was not 
the same as "abridging."  Business contracts commonly require 
"forgoing" purchases from other suppliers, he noted 
forcefully.  EXPO Director Vilmos Cserveny acknowledged this 
point in contract law but explained that in a politicized 
environment, other countries interpreted it as such, though 
he realized the U.S. had moved away from the term 
"foregoing."  Even though the DG came from the G-77, he had 
to overcome distrust and suspicion on this issue. 
"Foregoing" was a "killer" the DG's Special Assistant Graham 
Andrew added, and prompted a knee-jerk reaction among the 
G-77.  He noted that the IAEA fuel bank would not have such a 
requirement. 
 
¶12. (C) Cserveny encouraged the U.S. to advertise its 
proposal in Vienna like the others and said the Secretariat 
was not endorsing one proposal over another but had presented 
those that had been developed further.  The IAEA had not 
heard more on the Six Country, UK or Japan proposals.   Rood 
complained that the U.S. and Six Country proposals were 
treated as "afterthoughts" in the Secretariat's presentation, 
which seemed to short change a major commitment by the U.S. 
to set aside 17.4 million tons of HEU.  He cautioned them to 
not give the appearance of espousing the G-77 view on 
abridging rights.  The Global Nuclear Energy Partnership 
(GNEP), to which 21 countries had subscribed, also did not 
"abridge rights" he noted but recognized the reality that 
enrichment and reprocessing (ENR) was a major NPT loophole. 
The U.S.-Russia agreement on nuclear energy and 
non-proliferation was likewise an effort to promote nuclear 
energy without ENR.  Andrew recognized the twin goals of 
providing an opportunity for access and non-proliferation but 
noted that with some audiences it is best to advertise the 
first goal.  Forsstrom also saw GNEP as a positive initiative 
on the back end of the fuel cycle, and suggested bringing it 
to the Board to encourage G-77 and NAM buy-in. 
 
U.S.-Russia Agreement 
--------------------- 
 
¶13. (C) Rood also informed the DG about the Bush-Putin 
agreement to promote nuclear energy and non-proliferation. 
He advised that Ambassador Wolcott was working with Russian 
Governor Berdinakov on this effort to "polish-up" the NPT 
bargain and realize the NPT's vision on usage of nuclear 
energy.  The U.S.-Russia effort sought to remove economic 
incentives for the pursuit of enrichment technology and 
included outreach to the World Bank to remove restrictions on 
 
financing for nuclear power infrastructure.  ElBaradei 
observed that countries such as the UAE and Jordan were 
starting from "zero" infrastructure and saw greater prospects 
for nuclear power in large countries.  He encouraged the 
sharing of R&D, such as on Generation IV reactors, with 
countries, noting that some tend to equate enrichment with 
science and technology.  ElBaradei was disparaging of French 
President Sarkoszy's willingness to sell nuclear power to 
"everyone and their brother", but noted that AREVA was not 
keen on entering countries with no infrastructure and 
preferred to sell to the likes of South Africa, India, China 
and Brazil where it could achieve economies of scale. 
 
20/20 
----- 
 
¶14. (SBU) Acting U/S Rood discussed the upcoming 20/20 report 
of the Commission of Eminent Persons with the DG and 
Secretariat officials, expressing strong USG support for the 
IAEA and our desire to see the Agency resourced properly, but 
also cautioning on the need for realistic budget targets. 
 
¶15. (SBU) The DG stressed that the Commission was independent 
and that he had not seen a draft of the report.  The 
Commissioners represented a broad spectrum of views on 
nuclear power, disarmament and other issues and their report 
would be sent to the Board without comment.  He hoped to get 
the report next week but did not expect substantive 
discussion in the Board until September.  Since this was a 
long-term view of the Agency, no immediate Board action was 
expected though there were some short-term issues, including 
the laboratories, that had resource implications.  The DG 
explained that the genesis of the 20/20 initiative had been 
the "pathetic" budget discussions on the Board.  He cited the 
example of the AIPS where the Japanese were arguing 
unrealistically that the 14 million USD shortfall could be 
made up through internal savings and the debate was conducted 
in terms of mantras. 20/20 was an effort to go beyond the 
Board to Member States and to honestly assess what the Agency 
can or cannot deliver in several areas.  The DG noted a gap 
between the policy level and budget deliberations, and was 
tired of the repeated clichs on "zero nominal growth" and 
the like.  Rood expressed support for this important project 
and agreed that people often had trouble focusing on the big 
picture as we look to the IAEA to do more.  ElBaradei also 
mentioned that he had suggested a non-proliferation Summit to 
President Bush at one juncture, which could possibly be 
pursued after 20/20. 
 
¶16. (SBU) DG Special Assistant Andrew also provided an 
overview of the 20/20 process during the EXPO-arranged 
briefing.  He explained the intense 3-4 months of internal 
prep-work involving the whole Agency, that the Secretariat 
had done.  The Commission represented a balanced team charged 
with focusing on big picture issues such as the over-reliance 
on extra-budgetary funding in areas like nuclear safety and 
security.  The Secretariat had provided some guidance on the 
first draft of the Commission report but the DG was steering 
clear of this independent process, he noted.   The report was 
expected in 7-10 days and would be presented by former 
Commission Chair and Mexican President Zedillio to the Board 
in June with substantive discussion expected in the September 
Board and the Scientific Forum on the margins of the October 
General Conference.  The Commission report was "only the end 
of the beginning" of the process, he stressed.  It would be 
up to the Board to frame the issues presented in the report 
for future consideration. 
 
¶17. (SBU) Rood said that the U.S. regarded the IAEA as 
crucial and recognized the growing demands on the Agency, 
including in connection with the so-called nuclear 
"renaissance," climate change and energy demands.  Resources 
could never fully keep pace with this growth and he advised 
the Secretariat to take account of resource constraints early 
in the process and consider what might be dropped.  Without 
due account of resources, the vision of 20/20 would go 
unfulfilled, he feared.  Andrew observed that there was a 
compelling case for more resources but that the Secretariat 
had made every effort to prioritize and identify activities 
they could do less of, improve efficiency and seek outside 
funding.  Rood agreed that such a compelling case could be 
made but suggested changes in business operations. 
 
Nuclear Terrorism 
----------------- 
 
¶18. (U) Rood discussed the Global Initiative to Combat 
Nuclear Terrorism (GI) with Anita Nilsson, Director of the 
Office of Nuclear Security.  Nilsson outlined IAEA efforts to 
 
expand the scope of its security programs after September 11, 
to move from ad hoc to sustainable solutions.  She urged that 
now was the time to make sure the international community had 
a solid base for activities against a threat which would be 
with us into the foreseeable future.  Rood welcomed IAEA 
action and encouraged Nilsson to "keep it up."  He was 
concerned that the security situation changed constantly and 
was not sure that the international community was staying 
abreast. 
 
¶19. (U) Nilsson expressed the view that the strength of the 
GI was its statement of principles, noting that some of the 
language was identical with the language in the IAEA's own 
Nuclear Security Plan.  How, she asked, could we make sure 
that adherence to the shared principles led to a solid 
structure which could keep international attention fixed at a 
high level on nuclear terrorism?  And what did U/S Rood think 
the role of the IAEA should be, in practical terms, in 
implementing the principles?  Rood replied that he hoped to 
hear form the IAEA what an appropriate role for the IAEA 
might be.  The Office of Nuclear Security should certainly 
take part in some, although not all, of the activities in the 
current Program of Work.  Perhaps, Rood suggested, the IAEA 
might want to sponsor a GI exercise of its own. 
 
20.(U) After explaining that it would be difficult for the 
IAEA to sponsor an event which did not include all its 
Members States, Nilsson countered by suggesting a more 
inclusive approach.  Why not welcome everything which 
supported the GI principles as part of the GI?  Activities 
ranging from the IAEA's own programs, Member States' 
bilateral activities, as well as the specific GI Program of 
Work activities, could all be counted as part of the Global 
Initiative.  After all, she argued, everything that supported 
the principles supported the Global Initiative; we are all 
working toward the same goals.  Rood thought this was an 
interesting notion which he would have to consider further. 
In any case, he added, there would have to be a specific GI 
program of work to challenge subscribing states to act on the 
principles. 
 
21.(U) As an example of an IAEA activity which clearly 
supported the principles of the Global Initiative, Nilsson 
mentioned the IAEA's Integrated Nuclear Security Support 
Plans (INSSP's).  There are currently plans in various stages 
of implementation with 44 countries.  The Office of Nuclear 
Security considers all aspects of nuclear security in 
developing the plans.  The INSSP's cover legal commitments as 
well as nuclear activities.  Does the country subscribe to 
the relevant international treaties and conventions?  Does 
the country have proper legislation in place?  What nuclear 
materials or radioactive sources does the country possess? 
Is the security for such items at the level prescribed by 
international agreements?  On the basis of this overall 
assessment, the Office of Nuclear Security provides countries 
with steps they should take to ensure adequate security. 
Perhaps, Nilsson suggested, the Global Initiative could note 
the importance of the full implementation of INSSPs as a goal 
for Member States. 
Rood replied that the INSSPs sounded quite interesting and 
worth further investigation. 
 
¶22. (U) Finally, Rood and Nilsson briefly discussed possible 
IAEA attendance at the Madrid Ministerial meeting in June. 
Nilsson had apparently not yet received an invitation to the 
meeting, only to the table top exercise in May, which the 
IAEA plans to participate in.  Nilsson promised to consider 
attendance once she had all relevant information.  Rood urged 
her to attend and added that he hoped Director General 
ElBaradei would be able to attend as well. 
 
¶23. (U) Acting U/S Rood did not have an opportunity to clear 
this message. 
SCHULTE