O 140802Z JUL 08
FM USMISSION UNVIE VIENNA
TO SECSTATE WASHDC IMMEDIATE 8187
DOE WASHDC IMMEDIATE
INFO NUCLEAR SUPPLIERS GROUP IMMEDIATE
VIENNA IAEA POSTS COLLECTIVE IMMEDIATE
AMEMBASSY NEW DELHI IMMEDIATE
AMCONSUL MUMBAI IMMEDIATE

C O N F I D E N T I A L UNVIE VIENNA 000392 
 
 
STATE FOR P, T, ISN, SCA 
DOE FOR NA-20; NA-24 - SCHEINMAN; NA-243 GOOREVICH 
 
E.O. 12958: DECL: 07/11/2018 
TAGS: IAEA ENRG ETTC KNNP MNUC PARM TRGY IN
 
SUBJECT: INDIA/IAEA SAFEGUARDS - GETTING TO YES IN THE BOARD 
 
REF: STATE 072006 
 
Classified By: Ambassador Gregory L. Schulte, reasons 1.4 (b) and (d) 
 
Summary and Comment 
-------------------- 
 
¶1.  (C) Mission has been seeking expeditious consideration of 
the India-IAEA Safeguards Agreement, which we now expect to 
come before the Board on August 1 (reftel). Like-minded 
allies advise that successful Board approval and next steps 
to make the initiative a reality will require a multi-faceted 
approach with a reasonable timeline.  Soundings this week 
indicate many (including our friends) need some time to 
digest the safeguards agreement, realize the net gain to the 
nonproliferation regime, and facilitate requisite legal and 
policy consideration.  We have sought to focus Board members 
on the immediate goal of approving the safeguards agreement. 
Many interlocutors favor a strategy that seeks to focus the 
Board, on the routine technical approval of a safeguards 
agreement.  Some note that while the safeguards agreement 
follows very closely INFCIRC/66.Rev 2, it does not list the 
facilities subject to the agreement.  Unhelpful NGO analysis 
of the safeguards agreement, repeated in press reports, that 
characterize the preambular text on "corrective measures" and 
the lack of a reference to safeguards "in perpetuity" as 
major "loopholes" could also complicate matters if they gain 
currency among non-expert or skeptical Board members.  Among 
the more problematic Board members are Austria and Ireland, 
and Pakistan is expected to be unhelpful.  Furthermore, the 
Board Chair and several Board members are also concerned that 
negotiations on the IAEA technical cooperation fund (TCF) led 
by G-77 Chair Pakistan will muddy the waters.  In addition to 
the India safeguards agreement, the Board agenda, which 
should be issued on July 14 or 15, will include budgetary 
items on TCF and the Agency-wide Information System for 
Program Support (AIPS). 
 
¶2.  (C) Visible Indian leadership will be key to Board 
approval; New Delhi must help raise the confidence level.  We 
understand India is preparing a briefing in Vienna by Foreign 
Secretary Menon on July 18, which will be a critical 
opportunity to assuage Board member concerns.  We recommend 
India consider supplementing the staff of its Mission in 
Vienna with a high-level expert who can help Board members 
understand its commitment to the separation plan and goal of 
placing civil nuclear program under IAEA verification -- in 
perpetuity.  The fact that the agreement has the public 
blessing of IAEA Director General ElBaradei will be 
instrumental.  Mission will continue to encourage the DG to 
defend the agreement as technically sound, and help frame the 
debate in the broader context as a net benefit to the 
nonproliferation regime. 
 
¶3.  (SBU) Mission's public diplomacy efforts will focus on 
the dissemination of factual information on the Safeguards 
Agreement to the media and member states, using 
third-party/NGO interlocutors where appropriate, and 
Ambassadorial-level interventions.  A Department "fact sheet" 
on the non-proliferation benefits of the Safeguards Agreement 
and the deal would be very helpful to this effort.  Mission 
will continue to coordinate closely with Embassy New Delhi 
and with the Department on all public outreach.  End summary. 
 
August Board 
------------ 
 
¶4.  (C) Board Chair Skoknik told Ambassador Schulte July 11 
that he will announce early next week that the Board will 
take place on August 1.  We expect DG ElBaradei to attend. 
The agenda will take up three topics sequentially:  India, 
Technical Cooperation Funding and Agency-wide Information 
System for Program Support (AIPS).  On India, he hopes to use 
his consultations to orchestrate a consensus decision in the 
Board.  The Chair would prefer to reserve member state 
statements until AFTER the agreement is passed.  Skoknik 
reported that he is hearing three main concerns in his 
consultations thus far, two of which come from NGO observer 
Daryl Kimball's critique of the "corrective measures 
loophole" and the lack of specificity on facilities covered 
by the agreement.  G-77 members have also raised concern 
about the very large price tag (EURO 1.2 million for one 
reactor in year one), and make unhelpful linkages to the 
acerbic debate (led by Pakistan) over Technical Cooperation 
Fund (TCF) targets. 
 
Safeguards Agreement 
-------------------- 
 
¶5.  (C) Ambassador Schulte held a meeting on July 10 with 
Ambassadors/Charges from Australia, France, Germany, Japan 
and South Africa; Canada, Italy, Russia, and the UK to 
exchange views on the way ahead now that the Secretariat has 
circulated India's safeguards agreement.  Ambassador stressed 
the importance of this opportunity for the international 
community to bring more civil reactors under international 
safeguards.  In general, like-minded states welcome and 
recognize the significance of Indian agreement to circulate 
its draft safeguards agreement.  They share the goal of 
gaining Board approval by consensus, and to keep the 
discussion focused on a routine safeguards agreement. 
However, several participants were concerned about timing and 
allowing domestic processes time to make informed decisions. 
None had instructions at this juncture.  South Africa and 
others are concerned about tensions between G-77 and major 
donors over financing the Technical Cooperation program 
spilling over into the India safeguards debate, particularly 
given the price tag on safeguards in India. 
 
¶6.  (C) While most of participants indicated they are in 
still examining the safeguards text which seems to track the 
model INFCIRC/66 Rev.2 text, they noted the lengthy 
preambular text and blank list of facilities subject to the 
agreement.  Coupled with the lengthy political debate in 
India over the Civil Nuclear Cooperation Initiative and this 
agreement, some fear there will be questions about India's 
commitment to safeguards and nonproliferation.  Most 
understand the Operative text is applicable for safeguards 
implementation, but some are concerned about how others may 
view the significance of the Preamble.  Germany questioned 
whether a technical briefing in advance of the Board meeting 
would be useful, but others suggested the Secretariat and 
Board Chair invest time with states individually to explain 
the agreement. 
 
¶7.  (C) Comment:  The DG told the Ambassador he does not 
intend to call a technical briefing.  Individual discussions 
will certainly be useful, and member states would benefit by 
hearing from trusted IAEA sources that this agreement meets 
their technical requirements.  Ambassador Schulte encouraged 
the Board Chair to include Secretariat experts in his 
consultations with Board members. End comment. 
 
Give Us Time 
------------ 
 
¶8.  (C) At the July 10 meeting, Canada explained it needs 
time for legal and policy review since it has reactors in 
India that are directly affected by this agreement, and may 
even decide to maintain in force safeguards under the 
existing trilateral agreement, rather than move to the new 
agreement.  Canada noted there were high level discussions at 
the G-8 as well as in Washington, but stressed the importance 
of giving the Canadian Government adequate time to make an 
informed decision.  Canada also pointed out that while it 
will not stand in the way of a Board meeting in late July, it 
cannot guarantee it would be able to join consensus until the 
first week of August.  Russia also noted the need for a legal 
review, given its existing trilateral safeguards agreement 
with India.  Russian MsnOff noted that with regard to the 
NSG, Russia needs a Presidential decree to amend current 
rules on nuclear cooperation. 
 
¶9.  (C) Some other states have asked us to help them be able 
to say yes -- in the Board as well as the NSG.  They tell us 
they need adequate time for their legal and political bodies 
to consider the agreement and be prepared for the next steps. 
 Concerned the safeguards agreement could set a bad 
precedent, New Zealand is examining the "India specificness" 
of the agreement.  References to corrective measures and fuel 
assurance raise questions about India's commitment, New 
Zealand Ambassador Macmillan observed, despite the fact that 
they are in the Preamble.  For New Zealand, the safeguards 
agreement is of lesser concern than the NSG exception, which 
will require a major change in policy and practice. 
 
¶10.  (C) Irish Ambassador Cogan told Ambassador Schulte on 
July 7 that Ireland would have preferred more time to review 
the safeguards agreement, especially since the new Foreign 
Minister, Michael Martin, took office only a few weeks ago 
and will need to become engaged.  Cogan stressed Ireland 
needs to be sure the agreement is based on the model and does 
not deviate in the operative text, or it will be very 
difficult to join consensus.  Cogan assured Ambassador 
Schulte he will reach out as soon as he receives 
instructions.  Cogan mentioned that the French EU Presidency 
 
has called for an expert group level meeting to review the 
safeguards agreement.  Cogan believes the French would like 
to coordinate positions among EU members, but he did not 
believe there would not be an EU position as such. 
 
¶11.  (C) In the July 10 meeting, South Africa Ambassador 
Gumbi warned that other states may complain that they need 
more time and raise concerns about the costs of an 
extraordinary Board meeting.  He was also concerned about 
possible G-77 efforts to link the ongoing negotiation over an 
increase in the Technical Cooperation Fund (TCF) to Board 
approval of India safeguards.   Since India safeguards would 
have cost implications (as agreed in the 2007 budget 
negotiations as a contingency), G-77 will add the need for 
"balance" to their litany of complaints, the most important 
of which is the TCF's loss of purchasing power due to the 
weakening dollar. 
 
India Needs to be Seen and Heard 
-------------------------------- 
 
¶12. (C) Visible Indian leadership will be key to Board 
approval; New Delhi must help raise the confidence level. 
Russia and other Board members have mentioned the importance 
of India reassuring Board members of its commitment to 
non-proliferation, including providing additional more 
specific information on when the agreement would be brought 
into force, and a schedule for the reactors to be brought 
under safeguards.  A planned briefing by Indian Foreign 
Secretary Menon of Board members on July 18 will be a 
critical opportunity to address member state concerns.  We 
recommend India consider supplementing the staff of its 
Mission in Vienna with a high-level expert who could invest 
time with key states and help them understand India's 
commitment to the separation plan and goal of placing its 
civil nuclear program under IAEA verification -- in 
perpetuity. 
 
Public Diplomacy 
---------------- 
 
¶13. (SBU) Mission's main public diplomacy objective is to 
gain expeditious consensus approval of the IAEA Board of 
Governors on the India Safeguards agreement.  We plan to 
focus our efforts primarily on disseminating factual 
information on the Safeguards Agreement to member states and 
the media, using third-party interlocutors where appropriate 
to refute the criticisms that some will known NGO's have 
circulated.  For example, we plan to facilitate a DVC for 
journalists with credible think-tanker experts who can 
provide an independent, informed endorsement of the 
agreement.  Mission is coordinating closely with Embassy New 
Delhi and with the Department on all public outreach. 
 
¶14.  (SBU) To aid us in focusing the discussion on the 
technical business of implementing safeguards, it would be 
helpful for the Department to consider a fact sheet to 
educate less informed Board members and underline the point 
that the India safeguards agreement is a net gain for all. 
It should focus not on the benefits to the U.S.-India 
relationship, but to the global nonproliferation regime. 
Many states are not familiar with INFCIRC/66 safeguards 
agreements, and are susceptible to NGO claims that this 
agreement will weaken the regime; they do not understand the 
significance of what India is offering prepared to do -- 
bring a substantial majority of its reactors under safeguards 
in a way that strengthens the nonproliferation system. 
 
NSG and Beyond 
-------------- 
 
¶15.  (C) Some states have begun to look ahead to next steps 
such as the NSG exception and U.S. Congressional timelines. 
Eventual cooperation with India will require governments to 
change long standing NPT preference and full-scope safeguards 
policies, and many expect to see "substantial progress" 
toward an Additional Protocol.  In some states, approval of 
an NSG exception will require a Presidential decree and 
Parliamentary action, which they claim could take four to 
five weeks.  Although they understand that Board and NSG 
processes are separate processes, they argue the steps to 
success are linked. 
 
¶16.  (C) Irish Ambassador Cogan in particular said the NSG 
issue would have to be handled delicately and he anticipates 
much discussion.  He did not express a preference for CG or 
Plenary discussion, but said additional assurances may be 
needed in the NSG context for countries to feel comfortable. 
 
New Zealand Ambassador MacMillan has cautioned that "the 
default setting is no" -- governments must have enough time 
to understand and agree to change.  According to Ambassador 
MacMillan, New Zealand needs 4-5 weeks between the Board 
decision and NSG consideration.  The Netherlands, Canada and 
Norway have previously indicated they have similar time 
requirements.  More hopefully, Swedish Ambassador Lundberg 
told Ambassador July 11 that his political leadership had 
decided not to place any obstacles to the deal. 
 
The China Card 
-------------- 
 
¶17.  (C) New Zealand, Russia, the UK and others are concerned 
that we invest time with China.  China has expressed concerns 
in the past, and recently in Berlin about not taking NSG 
action until "all information is considered."  To reach 
consensus, China cannot be overlooked.  Even under the best 
of circumstances the Chinese government requires time -- 
Chinese officials preoccupied with the Olympics and other 
problems -- may complicate matters.  On the other hand, we 
tend to share the Indian assumption that China will not block 
consensus, preferring to work through Pakistan to cause 
difficulty.  Both Board Chair Skoknik and Indian Ambassador 
Kumar have identified Pakistan to us as the most likely 
potential spoiler of our efforts in Vienna.  Ambassador will 
engage the Pakistanis here in the days ahead, and will 
encourage DG ElBaradei to do the same. 
SCHULTE 
 
 
NNNN 
 



End Cable Text