VZCZCXRO2514
RR RUEHAST RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM
DE RUEHHI #1048/01 2590008
ZNR UUUUU ZZH
R 150008Z SEP 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 8442
INFO RUEHHM/AMCONSUL HO CHI MINH 5102
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 04 HANOI 001048 
 
DEPT FOR T (JWOLCOTT, MHUMPHREY), ISN/NESS (ABURKART,PMCNERNEY), 
ISN/RA (RBEISECKER) AND EAP/MLS 
STATE PLEASE PASS TO NUCLEAR REGULATORY COMMISSION 
(KFOGGIE,SBURNS,JRAMSEY,KHENDERSON) 
DEPT OF ENERGY FOR DOE/NE (EMCGINNIS, CWELLING), NNSA/NA-21 
(JMCLELLAND-KERR, KAPT, DKOVACIC, SDICKERSON, IBOLSHINSKY, SMOSES, 
ABIENIAWSKI) 
COMMERCE PLEASE PASS TO USTDA (DROSSITER) 
COMMERCE FOR ITA/MAC/HONG-PHONG PHO 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ENRG ECON TRGY BEXP PARM KNNP VM
SUBJECT: AMBASSADOR WOLCOTT DISCUSSES CIVIL NUCLEAR COOPERATION 
UNDER JOINT DECLARATION WITH VIETNAMESE COUNTERPARTS 
 
REF A: HANOI 898 
REF B: STATE 54213 
REF C: HANOI 713 
 
HANOI 00001048  001.2 OF 004 
 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE PROTECT ACCORDINGLY. 
 
¶1. (SBU) Summary:  Ambassador Jackie Wolcott, the Secretary of 
State's Special Envoy for Nuclear Nonproliferation, led an 
interagency delegation to meet with several high-ranking Government 
of Vietnam (GVN) officials to advocate for U.S. nuclear energy 
cooperation and nonproliferation initiatives.  Vietnamese officials 
praised ongoing U.S. assistance and sought continued cooperation to 
develop a safe and secure civilian nuclear power sector, showing 
particular interest in assistance with treaty analysis, legal 
framework formulation, human resources development, and technology 
selection.  Ambassador Wolcott highlighted potential cooperation 
under the Joint Declaration on Nuclear Energy and Nonproliferation 
(Joint Declaration), urged Vietnam to consider joining the 
Convention on Supplementary Compensation for Nuclear Damage (CSC), 
encouraged Vietnam to participate in the Global Nuclear Energy 
Partnership (GNEP), and advocated for the GVN to finalize 
negotiations towards a framework Memorandum of Understanding (MOU) 
on nuclear energy cooperation.  Ambassador Wolcott also sought 
Vietnamese support for a U.S.-funded World Bank study on the cost 
competitiveness of nuclear power and requested that Vietnam join 
three technical conventions on nuclear safety and security.  The 
Vietnamese made no mention of Nuclear Nonproliferation Treaty (NPT) 
rights or of interest in sensitive technologies, and indicated that 
fresh and spent fuel services would be managed through the market, 
perhaps in conjunction with reactor contracts.  End summary. 
 
Visit Details 
------------- 
 
¶2. (SBU) From August 16-20, Ambassador Jackie Wolcott led a 
delegation of U.S. policy officials and technical experts from the 
State Department and the U.S. Nuclear Regulatory Commission (NRC) to 
visit the Dalat nuclear research reactor and to meet with several 
high-level GVN officials at the Ministries of Science and Technology 
(MOST), Industry and Trade (MOIT), and Foreign Affairs (MoFA) to 
discuss nuclear energy cooperation and nuclear nonproliferation. 
Meetings were also held with officials from the Vietnam Atomic 
Energy Commission (VAEC) and the Vietnam Agency for Radiation and 
Nuclear Safety & Control (VARANSAC).  Ambassador Wolcott also 
provided a press briefing on existing and proposed U.S.-Vietnam 
cooperation that resulted in positive local media coverage. 
 
Vietnam's Nuclear Power Plans 
----------------------------- 
 
¶3. (SBU) MOST Vice Minister Tran Quoc Thanh, VARANSAC Deputy 
Director General Le Chi Dung, and VAEC Vice Chairman Le Van Hong 
provided an update on Vietnam's plans for nuclear energy 
development.  Following the approval of a long-term "Strategy for 
Peaceful Utilization of Atomic Energy up to 2020" (January 3, 2006) 
and a "Master Plan for Implementation of the Long-term Strategy" 
(July 23, 2007), Vietnam's National Assembly passed a comprehensive 
Atomic Energy Law on June 3, 2008.  (Comment:  GVN officials 
repeatedly cited the helpful role played by the NRC and NNSA in the 
preparation of this law, which will become effective on January 1, 
¶2009.  End Comment.)  A Pre-feasibility Report, envisioning a 2,000 
MW nuclear power plant (NPP) at Phuoc Dinh (Ninh Thuan province), is 
currently being finalized for submission to the National Assembly 
for approval.  A feasibility study would be completed by 2009 and 
the NPP's license application would be submitted by 2011.  In 
2012-2013, bids for an engineering, procurement, and construction 
(EPC) contract would be received.  Construction would begin around 
2014, and the NPP would come online around 2020.  MOST officials 
commented that since Vietnam lacked the experience necessary for the 
development of a nuclear power program, it would rely heavily on 
nuclear cooperation with advanced nuclear energy states. 
 
Vietnamese Officials Seek Continued Cooperation 
On Nuclear Infrastructure Development 
--------------------------------------------- -- 
 
¶4. (SBU) Vietnamese officials reaffirmed their commitment to the 
safe and secure development of civilian nuclear power and noted GVN 
 
HANOI 00001048  002.2 OF 004 
 
 
support for the NPT and other treaties that minimized the risk of 
nuclear weapons proliferation. All expressed their appreciation for 
ongoing U.S. assistance, notably the conversion of the Dalat nuclear 
research reactor from highly enriched uranium (HEU) to low-enriched 
uranium (LEU) fuels.  They noted the return of unused fresh HEU fuel 
from that facility to Russia, and expressed their desire to also 
repatriate spent HEU fuel (which was still currently stored in the 
research reactor pool).  GVN officials expressed interest in 
continued cooperation with the United States as Vietnam develops the 
physical and regulatory infrastructure for its civilian nuclear 
power sector.  VARANSAC officials stated that their greatest needs 
included development of human resources (HR), drafting of a legal 
and regulatory framework, analysis of technical safety and security 
conventions, and emergency preparedness and response capacity.  To 
address the HR challenge, DDG Dung noted that his agency was 
drafting a decree on this subject to be submitted to the National 
Assembly next year, and he suggested expert-level visits to the U.S. 
for consultation and training.  VAEC officials cited infrastructure 
development, as well as assistance with technology (reactor) 
selection, as cooperation areas of greatest interest.  Regarding the 
latter, Vice Chairman Hong suggested the U.S. should hold a workshop 
to introduce nuclear newcomers to "state of the art" nuclear 
reactors.  In response, Ambassador Wolcott encouraged him to attend 
the IAEA General Conference in late September, where many 
representatives of the U.S. nuclear industry would be available to 
discuss their products in detail. 
 
Reliable Access to Nuclear Fuel 
------------------------------- 
 
¶5. (SBU) During her meetings with Vice-Ministers at MOST, MOIT, and 
MoFA, Ambassador Wolcott reviewed how the United States might 
provide immediate assistance to Vietnamese nuclear safety and 
security efforts pursuant to the Joint Declaration.  The Ambassador 
explained that one important element of the Joint Declaration is the 
reliable provision of nuclear fuel services to encourage states to 
choose the international market for fuel supply and offer a viable 
alternative to the development of sensitive nuclear fuel cycle 
technologies.  The Vietnamese made no mention of NPT rights or of 
interest in sensitive technologies, and indicated that fresh and 
spent fuel services would be managed through the market, perhaps in 
conjunction with reactor contracts. 
 
Global Nuclear Energy Partnership (GNEP) 
---------------------------------------- 
 
¶6. (SBU) Ambassador Wolcott highlighted the recent invitation to 
Vietnam from the United States and the other twenty GNEP partner 
countries to join the Partnership and attend the upcoming GNEP 
Ministerial in Paris on October 1. Following up on points made by 
Department of Energy Deputy Assistant Secretaries Ed McGinnis and 
Craig Welling during their recent visit to Hanoi (Ref A), the 
Ambassador noted that GNEP provided a framework for longer-term 
nuclear cooperation consistent with the Joint Declaration and 
International Atomic Energy Agency (IAEA) initiatives. 
 
U.S.-Vietnam Nuclear Energy MOU 
------------------------------- 
 
¶7. (SBU) Ambassador Wolcott urged her GVN interlocutors, 
particularly Vice Minister Thanh at MOST -- which has primary 
responsibility for nuclear cooperation agreements -- to respond to a 
draft Memorandum of Understanding Concerning Cooperation in Nuclear 
Energy and Other Energy Fields (MOU).  The MOU was first proposed in 
June by the United States, and Wolcott urged Vietnam to sign it 
prior to the IAEA General Conference in early October (to facilitate 
conversations with U.S. industry representatives in attendance). 
While not legally binding, this agreement would serve as a 
high-level government endorsement of growing nuclear cooperation and 
will form a political framework under which our two countries can 
expand our nuclear cooperation.  Like GNEP and the Joint 
Declaration, Ambassador Wolcott noted the MOU promotes the assurance 
of reliable access to nuclear fuel without the need for establishing 
new enrichment or reprocessing capacity.  The MOU forms a stepping 
stone to a broader "Section 123" Agreement, which is required for 
significant nuclear exports from the U.S. (including nuclear 
material and major reactor components). 
 
 
HANOI 00001048  003.2 OF 004 
 
 
¶8.  (SBU) While MOST Vice Minister Thanh stated that the GVN needed 
further internal discussion of the MOU, Vice Minister Khu of MOIT, 
which has responsibility for the commercial development of nuclear 
power, stated that the GVN was preparing to finalize and sign the 
agreement.  Similarly, MoFA Vice Minister Pham Binh Minh indicated 
likely support from his ministry.  Officials within MOST and at VAEC 
and VARANSAC have already provided technical comments to MOST 
leadership and stressed their desire to commence a dialogue on the 
MOU's provisions, but noted that the document remained stuck 
somewhere within MOST (the responsible section of which is the 
Department of International Cooperation).  VAEC Vice Chairman Hong 
commented that following Wolcott's meeting at MOST, he had discussed 
acceleration of the MOU process with the MOST Director of 
International Cooperation.  Consistent with input from Embassy 
contacts at MOST, following her meetings, Ambassador Wolcott sent a 
letter to Vice Minister Thanh noting the apparent support for the 
MOU throughout the GVN and seeking his assistance to submit the 
document for inter-agency review and then to begin discussions with 
the United States. 
 
World Bank Study on Nuclear Energy 
---------------------------------- 
 
¶9. (SBU) In each meeting, Ambassador Wolcott emphasized the 
importance of NPP financing as Vietnam moved to develop nuclear 
power.  Vietnamese officials had not yet seriously considered this 
challenge, noting that they had assumed financing could be secured 
via loans from the World Bank, the International Monetary Fund, or 
the Asian Development Bank, or via export credits.  Currently, 
however, the World Bank and Asian Development Bank do not provide 
financing for nuclear power projects, limiting potential sources of 
financing for these capital-intensive endeavors.  Therefore, 
Ambassador Wolcott noted, the United States had joined with France 
and Japan to fund a World Bank study on the cost competitiveness of 
nuclear power in hopes that a favorable report on nuclear power 
could help to overturn the World Bank's policy against nuclear power 
(and thereby result in similar changes at other multilateral 
development banks).  Wolcott reported that this study has been 
temporarily suspended as a result of interventions by countries 
opposed to nuclear power, preventing World Bank management from 
re-evaluating its position on nuclear power financing.  Noting the 
critical importance of backing from countries that may receive World 
Bank financing, Ambassador Wolcott suggested that the Vietnamese 
representative at the World Bank communicate with the U.S. 
representative to support this study.  MOIT Vice Minister Khu and 
MoFA Vice Minister Minh both expressed particular interest in 
pursuing this possibility. 
 
Technical Conventions 
--------------------- 
 
¶10. (SBU) Ambassador Wolcott stressed the importance of Vietnam 
joining the Convention on Supplementary Compensation for Nuclear 
Damage (CSC), a liability convention which reaffirms that 
jurisdiction over a nuclear incident lies only with the courts of 
the country where the incident occurs (Refs B and C).  The CSC was 
designed to be a universal liability regime open to many nuclear 
energy states (e.g., the U.S., Japan, the Republic of Korea, and 
Canada) that cannot be party to existing liability conventions due 
to conflicts with national laws, so its ratification would greatly 
broaden the range of potential suppliers to the Vietnamese market. 
In addition to encouraging Vietnam to sign and ratify the CSC, 
Wolcott raised concern that Vietnam's recently-drafted Atomic Energy 
Law set a nuclear liability minimum of 150 million Special Drawing 
Rights, only half the basic level that the CSC would establish. 
Ambassador Wolcott therefore suggested that Vietnam revisit this 
provision during the implementation process of the Law. 
 
¶11. (SBU) Noting that Vietnam is not party to three important 
technical conventions (the Convention on Nuclear Safety, the 
Convention on the Physical Protection of Nuclear Material, and the 
Joint Convention on the Safety of Spent Fuel Management and on the 
Safety of Radioactive Waste Management) Ambassador Wolcott 
encouraged the GVN to carefully consider ratification of these to 
help it develop and maintain the highest safety and security 
standards.  VARANSAC DDG Dung noted that Vietnam is currently 
considering the first two of these, and that this requires his 
agency to draft a report summarizing the convention, outlining the 
 
HANOI 00001048  004.2 OF 004 
 
 
GVN's obligations once it is ratified, and assessing the GVN's 
capacity to meet these.  Due to this labor-intensive process, Dung 
noted, the GVN did not have sufficient resources to analyze 
additional conventions.  He therefore requested USG assistance in 
performing these analyses, and the delegation undertook to identify 
an appropriate USG contact for this. 
 
Comment 
------- 
 
¶12. (SBU) Overall, the delegation was impressed by the carefully 
considered approach and the determination the GVN has shown toward 
developing nuclear power.  Vietnamese officials made clear that 
safety and security are their topmost concerns, and noted that 
U.S.-Vietnamese civil nuclear cooperation towards these ends is 
functioning well without serious gaps or overlap.  Consistent with 
previous conversations with high-level U.S. nuclear energy 
delegations (Ref A), the Vietnamese responded positively to 
Ambassador Wolcott's points, but did not commit to move forward on 
any specific issue.  This most likely stems from the normal, 
slow-moving and consensus-based decision-making process on all 
nuclear-related issues, in which several ministries have a stake. 
Our working-level GVN interlocutors stress to us that their 
superiors often respond more attentively to external stimulus than 
to internal recommendations - as we learned during ultimately 
successful negotiations for the Arrangement for Technical 
Cooperation between VARANSAC and the NRC in the run up to Prime 
Minister Nguyen Tan Dung's recent visit to the United States. 
Therefore, we expect that Ambassador Wolcott's visit will spur 
Vietnamese decision-makers to focus on joining U.S.-supported 
bilateral and multilateral initiatives and to ultimately conclude 
the nuclear cooperation MOU. 
 
¶13. (U) This cable has been cleared with the Wolcott delegation. 
 
MICHALAK