VZCZCXYZ0000
PP RUEHWEB

DE RUEHUNV #0076/01 0511545
ZNR UUUUU ZZH
P 201545Z FEB 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 9039
RHMCSUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEANFA/NRC WASHDC PRIORITY
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY

UNCLAS UNVIE VIENNA 000076 
 
SENSITIVE 
SIPDIS 
 
STATE FOR IO/T, ISN/MNSA, ISN/NESS, ISN/RA 
NA-243-GOOREVICH/BRUNNS; NA-241 O'CONNOR, LAMONTAGNE 
NRC FOR OIP - HENDERSON, SCHWARTZMAN 
 
E.O. 12958: N/A 
TAGS: AORC ENRG TRGY KNNP IAEA PTER
SUBJECT: IAEA: MOVING NUCLEAR SECURITY INTO THE MAINSTREAM 
 
Ref:  A) UNVIE 52, B) UNVIE 65 
 
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Summary 
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¶1.  (SBU) In 2001, shortly after the September 11 terrorist attacks, 
the IAEA Board of Governors began a process of strengthening the 
Secretariat's role in preventing nuclear terrorism.  The Agency has 
since adopted a "Nuclear Security Plan," the latest version of which 
expires at the end of 2009.  As Washington considers how to 
operationalize the President's desire to strengthen the IAEA, 
including via additional resources (ref A), Mission recommends 
making it a key priority to give the IAEA's nuclear security 
activities increased prominence.  Director General ElBaradei 
recommended in 2001 that nuclear security activities be viewed as a 
core Agency function and funded from the regular budget.  However, 
today the Office of Nuclear Security (ONS) functions for all 
practical purposes as an appendage of the old Department of Nuclear 
Safety (albeit the department has been renamed "Nuclear Safety and 
Security").  Of the approximately 45 professional staff in ONS, four 
are funded from the regular budget.  In total, 90 percent of nuclear 
security program activities are funded via extrabudgetary 
contributions from only a few member states, with a total investment 
of 20 million representing 5 percent of the IAEA budget. 
 
¶2.  (SBU) Mission believes a significant increase in regular budget 
for ONS, at least to cover the staff necessary to implement such a 
high-priority program, is long overdue.  At the same time, we should 
continue to support specific IAEA security-related projects via 
increased extrabudgetary funding.  Enhancing the IAEA's nuclear 
security activities is one issue on which we may be able to partner 
effectively with DG ElBaradei for the remainder of his term, perhaps 
even to lay the groundwork for making nuclear security a separate, 
fully empowered department or office within the IAEA bureaucracy, as 
we would recommend.  Raising the profile of security as a core 
function, while endorsing better communication and cooperation with 
nuclear safety activities, is crucial.  End Summary. 
 
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Maturing Nuclear Security Activities... 
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¶3.  (SBU) The IAEA Board of Governors first approved a "Nuclear 
Security Plan of Activities" in 2002.  A refreshed and somewhat 
expanded nuclear security plan covering the years 2006-2009 was 
adopted by the Board in 2005.  Agency activities pursuant to these 
plans have established the IAEA as a critical resource for assisting 
member states to meet their international legal obligations, 
including UNSC Resolution 1540 and subsequent resolutions, as well 
as for general assistance to states to prevent, detect, and respond 
to malicious acts involving nuclear and other radioactive materials. 
 The Agency plays a major role in facilitating USG efforts to reduce 
the terrorist risk by securing nuclear and other radioactive 
materials, removing and disposing of dangerous excess and unwanted 
radiological sources, and minimizing the use/availability of high 
enriched uranium (HEU) via HEU fuel repatriation, conversion of 
HEU-operated research reactors to low enriched uranium (LEU), and 
shutting down underutilized reactors (to be replaced, perhaps, by 
shared regional reactors).  The Agency also plays a major role in 
promoting security training and providing guidelines and regulatory 
assistance to its Member States to build a strong nuclear security 
culture worldwide. 
 
¶4.  (SBU) The general modus operandi for the Agency's nuclear 
security activities is to provide specific assistance to member 
states upon their request, but the Agency is increasingly proactive 
in first helping member states define their needs, gaps, and 
shortfalls in order to make such specific requests.  This is a trend 
the U.S. supports and the IAEA should reinforce.  While the 
responsibility for the security of nuclear and other radioactive 
materials rests ultimately with States, and adherence to Agency 
guidelines and recommendations related to enhancing security is 
voluntary, the national authorities of most Member States rely 
heavily on the Agency for technical support, assistance, 
information, and funding to develop and implement an effective 
nuclear security program within and across their national borders. 
 
¶5. (SBU) Overlap with Technical Assistance (TC):  The Technical 
Cooperation Program has provided a mechanism for the delivery of 
some nuclear security activities in Member States.  Historically, TC 
has served as a vehicle for the DOE Global Threat Reduction 
Initiative (GTRI) to provide funding and technical assistance to 
convert research reactors from HEU to LEU fuel. In addition, 
projects established within the Technical Cooperation Program 
provide the delivery vehicle for nuclear security training courses 
 
and, in some cases, for technical assistance from the Office of 
Nuclear Security.  Other assistance is delivered directly or in 
cooperation with other offices in the Department of Nuclear Safety 
and Security, or through the Departments of Nuclear Energy, 
Safeguards, the Legal Advisor, and EXPO. 
 
¶6.  (SBU) Funding:  Activities included in the Nuclear Security 
Program are primarily funded from extrabudgetary contributions to 
the Nuclear Security Fund (NSF).  A small amount of funding, for 
limited personnel/administrative costs, is provided via the regular 
budget.  As a result, roughly 90 percent of the Agency's nuclear 
security programs are funded by extra budgetary contributions from a 
handful of Member States.  This is in contrast to funding for 
nuclear safety and safeguards, which are largely funded via the 
regular budget, but also receive extrabudgetary contributions. 
 
¶7.  (SBU) While the overall budget of the IAEA is approximately 300 
Million Euros for CY2009, the average overall budget of the IAEA's 
Office of Nuclear Security (ONS) comes to approximately 15 Million 
Euros (only 5 percent of the IAEA's annual budget), counting both 
extrabudgetary and regular budget funds.  It is important to recall 
that in presenting the funding options to the Board in 2001 for 
prospective IAEA nuclear security activities (GOV/2001/50), DG 
ElBaradei said he believed regular budget funding was appropriate, 
given that he believed nuclear security should be one of the core 
activities of the Agency.  At the time, however, due to the zero 
real growth budget policy and in the interest of finding a funding 
solution quickly to facilitate contributions, the Board decided to 
create the extrabudgetary NSF.  In so doing, Board members suggested 
the funding mechanism be revisited at a later date. 
 
¶8.  (SBU)  As of December 2007, a total of $62.8 million had been 
contributed to the NSF from 31 Member States and one U.S. 
nongovernmental organization (Nuclear Threat Initiative), with the 
USG providing over $37.4 million (over 59 percent of the total extra 
budgetary funding).  The next largest contributors are the European 
Commission, United Kingdom and Canada, who together with the USG 
make up 90 percent of all extrabudgetary contributions for nuclear 
security activities to date.  Several Member States have made 
in-kind contributions to the program by providing cost-free experts, 
offers of services, equipment and/or the use of facilities.  The 
majority of contributions come with conditions for use.  Specific 
use of the donations is discussed and agreed with a donor State 
before the contribution, in order to preclude gaps in funding of 
activities and overlapping donations.  About 20 percent of the 
Agency's Member States provide funds to the NSF.  Continuing to rely 
on a small number of major donors via extrabudgetary funding puts 
long-term optimal implementation of nuclear security programs at 
risk. 
 
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... Should Be Given Increased 
Budgetary, Bureaucratic Prominence 
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- 
¶9.  (SBU)  At the March 2002 Board meeting, when the NSF was 
established, DG ElBaradei expressed the recommendation that the 
funding of security-related activities in the future be addressed in 
the context of a budget that responded to real needs and not a 
budget with an a priori ceiling.  In light of ref A discussion of a 
possible IAEA regular budget increase, Mission believes the time is 
now for the sort of review to which the DG referred.  At this 
writing, ElBaradei's staff is proposing in its 2010-2011 budget 
(septels) a first step in the direction of redressing Security's 
lack of regular funding, to raise to approximately 35 percent the 
share of ONS funds provided from the regular budget. 
 
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Comment and Recommendation 
-------------------------- 
 
¶10.  (SBU) Effective nuclear security is a critical component in the 
fight against nuclear terrorism.  Nuclear security should no longer 
be "the poor step child" amongst the IAEA's core missions of safety, 
safeguards, and security.  Security is the only activity that has 
cross activities with both safeguards and safety, yet it has the 
least resources.  Nuclear security activities are directly linked to 
the efforts to prevent terrorist acts; elevating security to an 
office or department in its own right and giving the office proper 
funding would signal that the fight against terrorist acts is a top 
priority and part of the IAEA's core mission.  UNVIE is aware of 
concerns, e.g., expressed by NRC Chairman Klein, that the 
integration of safety and security activities, already inadequate, 
would suffer further if the staffs were separated bureaucratically. 
Improving communications and coordination within the Secretariat is, 
in our observation, a systemic and cultural challenge and one that 
requires our effort whether Safety and Security ultimately remain 
one department or not.  With that consideration in mind, UNVIE 
recommends the USG begin working with the Office of Nuclear security 
to include in its next Nuclear Security Plan (likely to come before 
the Board in September 2009) a strategy to achieve: 
 
-- Regular budget funding consistent with appropriate levels of 
staffing necessary for this critical IAEA mission, as well as at 
least some portion of ONS projects. 
 
-- A plan to approach the key IAEA Donor States to gain buy-in on 
maintaining additional extrabudgetary funding necessary to fully 
implement the Agency's Nuclear Security Plan 
 
-- A plan to move security out from under the wing of the Agency's 
safety activities by creating an independent office or department 
that reports directly to the Director General. 
 
¶11.  (SBU) Achieving support for such a plan in the Board will not 
be easy and will be weighed against other budget priorities. 
However, we may already have potential allies.  In the past the 
Dutch, in particular, as well as the French and Canadians, were 
among those most supportive of funding nuclear security programs 
from the regular budget.  No doubt, even likeminded states will 
resist regular budget increases, and G-77 states will look to link 
any such increase for security to increases in TC or other 
promotional/assistance activities.  However, in light of the Obama 
Administration's calls for a strengthened IAEA, along with our 
stated willingness to back that call with more funds, there may 
never be a better time to launch an initiative to mainstream 
security activities at the IAEA.  Doing so only after the world 
experiences a major nuclear or radiological terrorist event would be 
tragic.  Moreover, DG ElBaradei is on record as supporting such 
mainstreaming (at least on the budget front), and it is possible, 
perhaps likely, that the next DG will want to put his/her stamp on 
the Agency by being seen to preside over a substantial strengthening 
of this essential core function. 
 
--------------------------------------------- - 
Realigning UNVIE on Nuclear Security/Terrorism 
--------------------------------------------- - 
 
¶12.  (SBU) Reflecting Mission's view of the increasing role we 
believe the IAEA will play on nuclear security, we are realigning 
responsibilities within UNVIE on nuclear terrorism.  This will be 
addressed septel. 
 
SCHULTE