VZCZCXYZ0001
OO RUEHWEB

DE RUEHUNV #0253/01 1491927
ZNR UUUUU ZZH
O 291927Z MAY 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9526
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY

UNCLAS UNVIE VIENNA 000253 
 
STATE FOR IO/T, ISN/MNSA, ISN/RA 
NA-243-GOOREVICH/OEHLBERT, BRUNNS; NA-241 O'CONNOR, 
SIEMON; NA-21- CUMMINS, ILIOPULOS; 
NE- MCGINNIS, PERKO, CLAPPER 
NRC FOR OIP - DOANE, HENDERSON, SCHWARTZMAN 
ROME FOR USFAO 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC KNNP IAEA ENRG TRGY
 
SUBJECT:  IAEA:  JUNE BOARD PREVIEW AND ANALYSIS 
 
Ref:  a) UNVIE 231 b) UNVIE 220 c) Goodman-Sanborn email 5/24/09 
 
--------- 
Summary 
--------- 
 
¶1. (U) This is an action request. 
 
¶2. (SBU) The June 15-19 IAEA Board of Governors meeting will take 
place amid continuing uncertainty over the Director General election 
and budget negotiations (ref a.)  Nevertheless, Mission will 
endeavor to take advantage of favorable attitudes toward the 
President's nonproliferation policies to improve the divisive 
atmosphere that has overtaken the Board.  Doing so will help us 
achieve near and longer-term priorities, a number of which are 
included on the June Board's overloaded agenda.  In addition to its 
traditional focus on the annual Safeguards Implementation Report 
(SIR) and the still pending budget, the June Board will consider 
nuclear fuel bank proposals (International Nuclear Fuel Bank, 
Russian and German); verification issues in Iran, Syria and DPRK, an 
agenda item on de-restriction of Board documents, the 2008 Annual 
Report and Technical Cooperation report and the provisional agenda 
for the General Conference (GC), among other issues.  The Board 
Chair will also provide an update on the appointment of the Director 
General; a Special Session for the election is expected sometime in 
July, but the date has not been set. 
 
¶3. (SBU) Given the number of competing priorities before the June 
Board (also previewed ref a), Mission recommends that we focus on 
the following objectives: 
 
-- Formally request the Director General to submit detailed 
proposals for the establishment of the International Nuclear Fuel 
Bank (INFB) and Russian fuel reserve while mitigating G-77 
reservations; 
 
-- Maintaining the Board's focus on Iran and Syria's obligation to 
comply with IAEA safeguards and cooperate with ongoing 
investigations;Q 
 
-- Eliciting the strongest condemnation of DPRK's nuclear and 
missile tests violating UNSC resolutions, and urging return to the 
Six Party Process and IAEA verification of denuclearization; 
 
-- Supporting strengthened safeguards, including an 
"information-driven" state-level approach that enhances--with 
expanded IAEA authorities and capacities as necessary--the Agency's 
ability to provide assurances about the absence of undeclared 
nuclear activities; 
 
-- Underlining deep disappointment with the failure to reach 
agreement on the budget in a timely manner and to provide the IAEA 
the resources it requires to fulfill its mandate in key areas such 
as nuclear security and safeguards. 
 
¶4. (SBU) Septels on Iran and Syria will provide further analysis 
upon the issuance of the respective DG reports likely around June 5. 
 Ref b provides context and analysis of Egypt's safeguards issues 
outlined in the SIR report.  Mission recommends taking a low-key 
approach on the de-restriction item at the end of the agenda, while 
resisting any attempt by the NAM to conflate this issue with the 
Board's prerogative to release the Iran and Syria reports, and 
ensuring the Board continues to exercise that prerogative at least 
in the case of Iran.  The provisional GC agenda before the Board for 
approval does not include a second agenda item on Israeli Nuclear 
Capabilities, which the Arab group usually requests to be added 
later.  End Summary. 
 
---------------------------------------- 
Agenda Item 1: DG Introductory Statement 
---------------------------------------- 
 
¶5. (SBU) The DG's introductory statement to the Board covers all 
issues on the agenda.  We will be particularly attuned to his 
comments on the budget impasse and oral report on the DPRK (there 
will not be a written report, see para 25), in addition to any 
update or further commentary on the Iran and Syrian reports.  No 
U.S. statement is necessary or appropriate. 
 
------------------------------------------ 
Agenda Item 2: Applications for Membership 
------------------------------------------ 
 
¶6. (U) The IAEA Secretariat does not expect any applications for 
IAEA membership so this item is likely to be dropped from the 
agenda.  Mission will advise if any applications are received prior 
to the Board. 
 
---------------------------------- 
Agenda Item 3: 2008 Annual Report 
--------------------------------- 
 
¶7. (SBU) The Board is requested to approve the 2008 Annual Report 
(GOV/2009/23) to be submitted to the General Conference.  There are 
usually many statements on the Report in which Board members 
highlight particular areas of the IAEA's mandate, with the G-77 
using this as another opportunity to promote technical cooperation 
above all other issues.  While a statement is not required, Mission 
recommends using this opportunity to forward U.S. arguments in favor 
of safety, security, and safeguards, U.S. priorities that could 
benefit from additional funding under the 2010-2011 budget proposal. 
 Following Board member statements, Israel may also take the floor 
under Rule 50 to object to particular passages of the Report: the 
citation of Israel in para 17 of the Verification section (report 
page 82) as having destroyed an alleged nuclear reactor in Syria, 
and the inconsistency of the Report's description of IAEA safeguards 
in Egypt in paras 20 and 21 on the following page with the SIR 
report. (Note: Unlike the confidential SIR report, the Annual Report 
will be a publically-disseminated GC document. End Note.) USDEL 
should not comment on any such Israeli intervention, which is likely 
to stoke an Arab reaction. 
 
¶8. (SBU) Recommendation and Action Request: Mission recommends USDEL 
join consensus on the Report and suggests a short U.S. statement 
regarding the value and diversity of the IAEA's work as a guarantor 
of NPT safeguards and in promoting safety, security and technical 
cooperation.  Previewing the budget agenda item, we should emphasize 
that these are mutually reinforcing rather than competing priorities 
(as they are portrayed by the G-77), and reiterate our commitment to 
ensure the Agency is adequately resourced to fulfill its broad 
mandate.  The Report informs us that construction started on ten new 
reactors in 2008, with 44 currently under construction, and notes 
growing interest among more than 50 Member States in exploring 
nuclear power programs in 2008.  Related to this, the number of 
technical cooperation projects geared toward introducing nuclear 
power increased from 13 to 44 in 2008.  The U.S. statement should 
observe that the Annual Report represents only the latest evidence 
of a rapid expansion in nuclear power across the globe.  As we 
ponder the ramifications of this expansion, we should not lose sight 
of the key role the Agency plays in safety and security.  It would 
take only one nuclear accident, or one incident of nuclear 
terrorism, to bring this expansion to a rapid halt. 
 
-------------   --------------------------------- 
Agenda Item 4:  2008 Technical Cooperation Report 
-------------  ---------------------------------- 
 
¶9. (U) This report, GOV/2009/27, is required by General Conference 
resolution (GC(52)/RES/11), in which the GC requested that the 
Director General report on strengthening the Agency's technical 
cooperation activities.  The Board is asked to take note of the 
report, and to request that it be transmitted, with modifications as 
necessary, to the General Conference.  It highlights progress 
achieved in implementing the TC strategy and in implementing new 
mechanisms and procedures during the period April 1, 2008 through 
March 31, 2009.  It also highlights the management of financial 
resources and program delivery at the aggregate level, and 
activities and program achievements at country and regional levels 
in 2008. 
 
¶10. (SBU) Mission recommends that the U.S. statement under this 
agenda item include encouragement for TC activity in the areas of 
nuclear safety and security.  The USG understands that fifteen 
percent of TC programming is for safety and security.  The U.S. 
should state that it particularly welcomes safety and security 
cooperation that supports nuclear applications in human health, 
medical isotopes, and the infrastructure for nuclear power.  We can 
cite the work on safety at Iran's Bushehr power plant.  We should 
say that these areas are important and we will continue to support 
them. 
 
¶11. (U) U.S. statement should also draw on some or all of the 
following points regarding management of the TC program: 
 
-- Impact of Transfer of Expertise:  USDEL attempted 
(unsuccessfully) during the May 28 technical briefing to Member 
States to draw out Secretariat on the mechanisms and completeness of 
data tracking the subsequent professional activities of recipients 
of TC-funded training in nuclear fields. 
 
-- Country Program Frameworks; In-Country Coordination:  U.S. 
statement may include encouragement for redoubled effort by IAEA to: 
coordinate TC activities formally with the UN Country Team; involve 
National Liaison Officers in those consultations; emphasize Human 
resource capacity building in recipient states to manage TC 
projects. 
 
-- Implementation rate: Is it a good measure of performance?  Why 
does it vary from region to region (from 62.2% in Asia to 85.8% in 
Europe)?  DDG Cetto noted in the May 28 technical briefing that it 
is a ratio of expenditures to resources "at a particular time" and 
may be misleading.  It should not be misused to create incentives to 
spend money prematurely.  TC Program Support and Coordination 
Director Magliani attributed the low implementation rate in Asia to 
the high proportion of human capacity building, low level of 
equipment procurement, and unforeseen events - natural disasters and 
security problems within states.  European regional TC director 
Salema said much of the expenditure in Europe was "Footnote A" 
funding for reactor conversion and spent fuel removal, which also 
explained the high implementation rate in Europe.  We seek to move 
TC towards a greater focus on measuring results, rather than 
throughput. 
 
-- Results-based management: Much of the TC report focuses on 
activities and expenditures, and not on accomplishments and 
outcomes.  Magliani acknowledges shortcomings in this area and says 
the TC Department is working to define desired outcomes as part of 
each new project, which would enable them to report more 
systematically.  This is a work in progress, part of Program Cycle 
Management Framework (PCMF) Phase 3. 
 
¶12. (SBU) In this connection, the TC Department discontinued as 
ineffectual the process it called Thematic Planning, aimed at 
ensuring the Agency focuses its resources on areas where nuclear 
techniques offer a comparative advantage, and that similar 
activities are pursued in a consistent manner across countries and 
regions, building on common experience and best practice.  The TC 
Department is working on a new process to replace Thematic Planning 
and thereby strengthen results-based management in TC.  The DG wants 
to have something in place before he leaves, which means that the 
November 2009 TACC is a target for the TC Department to report on 
its efforts, but we understand some in the Department may be 
defensive and see these management initiatives as a threat to their 
favored programs.  U.S. statement should encourage continued reform 
toward effective results-based management. 
 
-------------   ------------------------------------------ 
Agenda Item 5:  Report of the Program and Budget Committee 
-------------   ------------------------------------------ 
 
¶13. (U) Recommendation and Action Request: Mission recommends 
joining consensus on accepting the Report, including a series of 
technical items approved by the Program and Budget Committee.  Annex 
2 of the Report details the wide range of reactions to the 
Secretariat's draft budget proposal.  The U.S. statement should 
acknowledge the complexity of budget negotiations and recognize 
efforts by the Board Chair, Vice Chairs and Secretariat to 
facilitate budget negotiations among Member States.  The statement 
should also express deep disappointment at the inability of Member 
States to come to an agreement in time for the June Board of 
Governors meeting (as is traditionally the case), and underline 
anticipated comments by the Board Chair and likely by the Director 
General regarding the urgency of approving a budget as soon as 
possible.  Delays in the budget restrict the Agency's ability to 
carry out its work and plan for the future.  The U.S. has sought to 
establish common ground with other Members and will continue to do 
so. 
 
¶14. (U) In general, the U.S. statement should reflect major points 
of the U.S. position on the budget and reiterate our commitment to 
providing the Agency with the resources it needs to do its job.  We 
are similarly committed to maintaining balance in the Agency's work 
and responding to the developmental objectives of many Member 
States.  By the same token, the U.S. encourages reciprocity for U.S. 
objectives in other areas.  A symbolic effort to mainstream Nuclear 
Security into the Regular Budget fully supports the Agency's mandate 
to "enlarge the contribution of atomic energy to peace, health and 
prosperity throughout the world."  USDEL should note that we have 
developed strong relationships with our colleagues in the course of 
budget negotiations and will strive to bring them to a satisfactory 
close as soon as possible anticipating a positive outcome.  We 
should note that IAEA expenditures overall represent a small 
fraction of UN organization assessments. 
 
--------------   ----------------------------- 
Agenda Item 6a:  Safeguards Agreements and APs 
--------------   ----------------------------- 
 
¶15. (SBU) The Board will be asked to approve a comprehensive 
safeguards agreement (GOV/2009/37) and an Additional Protocol 
(GOV/2009/38) for Rwanda.  Both conform to the standard texts 
contained in GOV/INF/276/Mod.1 and INFCIRC/540, respectively.  The 
safeguards agreement also contains a small quantity protocol, which 
conforms to the new model adopted by the Board in 2005.  Mission 
will advise if other safeguards agreements and Additional Protocols 
are submitted in advance of the June Board. 
 
¶16. (SBU) Recommendation and Action Request:  Mission recommends 
that USDEL join consensus in approving any safeguards agreements or 
Additional Protocols that conform to the standard models, and to 
deliver a statement under this item urging all NPT states that have 
not yet done so to conclude and bring into force the required 
safeguards agreements and bring into force Additional Protocols, 
which represent the new safeguards standard.  USDEL may also address 
the slow pace in adoption of the revised Small Quantity Protocol 
(SQP), which as of the end of 2008 was in force in only 19 of 80 
countries with SQPs. 
 
--------------   ------------------------------------- 
Agenda Item 6b:  2008 Safeguards Implementation Report 
--------------   -------------------------------------- 
 
¶17. (SBU) The Board will be asked to take note of the Safeguards 
Implementation Report (SIR) for 2008  (GOV/2009/24) and to authorize 
the release of the safeguards statement and the executive summary of 
the SIR.  The structure of the SIR has changed slightly from 2007, 
with additional statistical information included in the executive 
summary and reordering of chapters.  The main substantive changes in 
the SIR are (a) the addition of sections in the executive summary 
reporting on implementation of safeguards in Syria and Egypt, 
alongside the usual sections on Iran and the DPRK; (b) updates on 
the states where the Agency has drawn broader conclusions under the 
Additional Protocol and begun to implement integrated safeguards; 
and (c) a slight evolution in the reporting on implementation of 
safeguards at the state level. 
 
¶18. (SBU) Syria, Iran and the DPRK will be addressed in more detail 
under separate agenda items, but safeguards activity in Egypt is 
covered only in the SIR.  As detailed in ref b, the SIR reports on 
the detection of high and low enriched uranium particles in Egypt in 
2007-2008.  The Agency is continuing to investigate the source of 
these particles, although it has no information to contradict 
Egypt's explanation that the uranium came from contamination of 
radioisotope transport containers.  The SIR also reports that the 
Agency has resolved issues related to previously discovered nuclear 
material and activities (natural uranium and chemical experiments 
involving natural uranium) reported to the Board in 2005 
(GOV/2005/9) and in the SIR for 2005. 
 
¶19. (SBU) The 2008 SIR reports for the first time that the Agency is 
able to draw the broader conclusion that all nuclear materials (as 
opposed to all declared nuclear materials) remained in peaceful 
activities in four additional states: Burkina Faso, Germany, 
Madagascar and - notably - Libya.  The Secretariat began to 
implement integrated safeguards in eight states, including the ROK 
and four other states with significant nuclear activities: Chile, 
Croatia, Finland and Italy.  Integrated safeguards are now in effect 
in a total of 33 countries.  The Secretariat estimates that this has 
led to a reduction in inspection effort of roughly 800 person-days 
of inspection (an increase from 500 in 2007).  This reduction in 
field activity helps offsets the increase in headquarters activities 
information collection/analysis and planning under the State-Level 
Approach (SLA). 
 
¶20. (SBU) The SIR provides an expanded report on safeguards 
implementation at the state level.  The SLA is focused on three 
generic state-level objectives: (a) detecting undeclared activities 
and materials in the state as a whole, (b) detecting undeclared 
production and processing of nuclear material at declared facilities 
(misuse), and (c) detecting diversion of declared material.  Aside 
from acknowledging that these generic objectives are translated into 
state-specific technical objectives, this year's SIR provides no 
further insight into how these objectives are achieved.  The 
description of state-level implementation consists of largely 
repetitive listings of activities undertaken in six separate groups 
of states, providing statistics for each group on activities 
undertaken.  For states under integrated safeguards, these are 
linked to the three state-level objectives.  The SIR also provides 
statistics for each group on problems encountered in safeguards 
implementation.  These are improvements in transparency compared to 
¶2007.  However, this year's SIR provides no additional insight on 
how the activities undertaken and the evaluation of the problems 
encountered led to the stated conclusions, including the statement 
that "state-specific technical objectives had been achieved" in 
states with integrated safeguards. 
 
¶21. (SBU) At a May 20 technical briefing on the SIR, Iranian 
Ambassador Soltanieh welcomed the potential expansion of the IAEA's 
network of analytical laboratories to include labs in Brazil, China 
and the Republic of Korea as a step to end the over-reliance on "one 
country." (Note: A clear reference to the United States. End Note.) 
Soltanieh also commented on the reference to specific states 
accepting short-notice random inspections in section D.1.4 of the 
SIR, and suggested that the Secretariat provide statistics on all 
states accepting such inspections.  The briefer noted that the 
section addressed only conversion and fuel fabrication facilities, 
and Safeguards DDG Heinonen further deflected Soltanieh's suggestion 
by stating that such inspections were normal in many states. 
Soltanieh also asked about safeguards cost-free experts - their 
nationality and where in the Department they worked -and implied 
that use of CFEs was inconsistent with safeguards confidentiality 
and impartiality.  Heinonen deflected this question as well, noting 
that CFEs came from many countries, worked largely on equipment 
development, and had to sign the same confidentiality agreements as 
regular staff members. During the SIR briefing DCM also requested 
information on savings achieved and anticipated through integrated 
safeguards and ROK Mission made an extended intervention calling for 
safeguards efforts to be redirected from states under integrated 
safeguards. 
 
¶22. (SBU) As has long been the Board practice, the Chair will move 
to adopt the Secretariat's recommendation (put forth in the SIR 
document itself) that the Executive Summary be released to the 
public.  In light of the inclusion of Egypt and Syria, and the 
Board's deadlock so far in agreeing to release DG reports on Syria, 
it is conceivable that one or more Board member could raise an 
objection.  Indeed, we have heard rumblings that Egypt may object to 
the release of the summary given the section on Egypt.  Assuming the 
Board ultimately agrees to release the summary, it will constitute 
the first formal release of a Board document describing the 
safeguards investigation in Syria, and would also complement the 
publicly released Annual Report's less complete description of the 
issues that have arisen in Egypt. 
 
¶23. (SBU) Recommendation and Action Request: Mission recommends that 
the U.S. statement address the three main substantive changes in 
this year's SIR: (a) welcoming Egypt's actions to resolve safeguards 
implementation issues that were first reported in 2005, welcoming 
and encouraging continued cooperation from Egypt to resolve the 
remaining issues related to LEU and HEU particles, and asking the 
Secretariat to keep the Board informed, as appropriate, of any 
further developments (as previewed ref b) and expressing the hope 
that the Agency will soon be in position to report full resolution 
of the issue with Eqypt; (b) welcoming the broader safeguards 
conclusion drawn in four additional states, taking special note of 
Libya's inclusion; and (c) acknowledging progress in elaborating the 
state-level approach, but also noting the need for further 
explanation of how conclusions are drawn.  Mission has provided a 
more detailed list of comments and questions on the SIR (ref c), 
which may also be reflected in the Board statement and/or a possible 
written submission of SIR-related questions/comments to the 
Secretariat.  The U.S. should support the continued practice of 
public release of the SIR summary. 
 
--------------   ------------------------- 
Agenda Item 6c:  Designation of Inspectors 
--------------   ------------------------- 
 
¶24. (SBU) The Board will be asked to approve the list of inspectors 
included in GOV/2009/34.   Mission has sent CVs of the proposed 
inspectors to Washington for review.  Pursuant to the U.S. 
Additional Protocol, these inspectors will automatically be 
designated as inspectors for the United States unless the United 
States objects within three months after being informed of their 
approval by the Board.  Recommendation and Action Request: Mission 
recommends that USDEL join consensus to approve the proposed 
inspectors.  No U.S. statement is necessary. 
 
--------------   ----- 
Agenda Item 6d:  DPRK 
--------------   ----- 
 
¶25. (SBU) The Secretariat indicates it will not provide a written 
report on the implementation of safeguards in North Korea for the 
June Board meeting.  We expect the Director General's introductory 
remarks will address the significant developments that have taken 
place since the March Board: the departure of IAEA inspectors from 
Yongbyon (and therefore the cessation of the IAEA's monitoring and 
verification of the shutdown of key facilities at Yongbyon and 
Taechon), and the reported nuclear test on May 25.  Although his 
remarks in March were markedly short, these recent events will 
likely prompt the DG to underline the urgency of the situation. 
After the North's first nuclear test in October 2006, the DG noted 
"deep regret and concern," and said the test was a serious challenge 
to the nuclear nonproliferation regime.  The DG also used the 
opportunity to "re-emphasize" the urgent need to establish a 
universal ban on nuclear testing and cited UNSCR 1172 (1998), in 
which the UN Security Council reaffirmed "the crucial importance of 
the Treaty on the Non-Proliferation of Nuclear Weapons and the 
Comprehensive Nuclear Test Ban Treaty as the cornerstones of the 
international regime on the non-proliferation of nuclear weapons and 
as essential foundations for the pursuit of nuclear disarmament". 
 
¶26. (SBU) Recommendation and Action Request:  Mission anticipates a 
large number of interventions under this agenda item, condemning 
DPRK's claimed nuclear test and calling on North Korea to fulfill 
its commitments under the Six Party Talks to abandon all nuclear 
weapons and existing nuclear programs.  Mission recommends the U.S. 
statement express regret at North Korea's decision to stop 
disablement activities and cease cooperation with the IAEA.  We 
recommend conveying our strong condemnation of the claimed nuclear 
test, our position on Six Party Talks, and the continued goal for 
North Korea to end its nuclear weapons program and return to the NPT 
and IAEA Safeguards.   The U.S. statement should cite North Korea's 
obligations to refrain from further nuclear testing under UNSCR 1719 
and note any recent statements or resolutions taken by the Security 
Council in response to the claimed May 25 nuclear test.  Given 
seriousness of DPRK's recent actions, Mission does not recommend the 
U.S. statement review the history of the Six Party Talks agreements 
in detail as in past statements to the Board. 
 
------------------   ------------------- 
Agenda Items 7 a-c:  Assurance of Supply 
------------------   ------------------- 
 
¶27. (U) This agenda item appears finally after many successive 
meetings in which the issue was consigned to AOB.  The subject will 
be organized in three sub-items, for two of which the Secretariat 
has prepared papers: (a) - Proposal by the Director General for the 
Establishment of an IAEA Low Enriched Uranium (LEU) Bank 
(GOV/2009/30), which proceeds from the report GOV/INF/2007/11 
presented for the June 2007 meeting entitled, "Possible New 
Framework for the Utilization of Nuclear Energy: Options for 
Assurance of Supply of nuclear fuel;"  (b) - Russian Federation 
Initiative to Establish a Reserve of Low Enriched Uranium (LEU) for 
the Supply of LEU to the IAEA for its Member States (GOV/2009/31). 
The Board also received a Russian paper, GOV/INF/2009/1, and oral 
briefing by the Russian Governor at its March meeting.  The new 
Secretariat paper GOV/2009/31 aims to advance understanding of the 
proposal preparatory to the submission for Board approval of two 
formal agreement texts, one between the Russian Federation and the 
IAEA, the other a model agreement the IAEA would enter into with a 
cut-off state seeking to procure LEU.  For both of these agenda 
sub-items, the Board is asked to take note of the Secretariat 
reports and "request" the Director General to bring detailed 
proposals for the Board's subsequent consideration.  Getting these 
"requests" from the Board is the Secretariat's first stage toward 
eventual approval of detailed arrangements for both mechanisms.  A 
third sub-item 7 (c) calls for the Board to take note of a German 
paper (GOV/2009/32) describing the German Foreign Office's proposal 
on establishing an independent access to nuclear fuel cycle services 
- the Multilateral Enrichment Sanctuary Project (MESP). The IAEA 
Board will be asked only to take note of the German proposal. 
 
¶28. (SBU) U.S. Objective:  The United States would welcome the Board 
taking the actions requested.  For three years the NAM and G-77 have 
taken the position that no action be taken until there has been a 
thorough study of the technical, legal and financial issues involved 
in fuel assurances, and then followed that up by saying it is 
"premature" to undertake such a study.  This position was repeated 
by the G-77 spokesman at the March Board.  However, some G-77 
members speaking in national capacity at the March Board pronounced 
themselves ready to hold such a discussion, and the G-77 acquiesced 
in a Chair's "conclusion" that the Board will continue its 
discussions on these proposals and the Secretariat will assist in 
elaborating the framework. The Secretariat has now done that.  While 
the U.S. does not agree with all aspects of the proposals, it 
strongly believes that it is time for the Board to have a serious 
discussion of the issues so that consensus can be built around one 
or more viable proposals, if not in September then soon thereafter. 
 
¶29. (SBU) Recommendation and Action Request: USDEL should join 
consensus on the proposed actions and deliver a broad statement of 
support for consideration of these proposals.  U.S. statement should 
draw on septel demarche to IAEA Board members and relevant points 
from the U.S. intervention at the April 2009 Beijing Ministerial. 
The Argentine Ambassador told Ambassador Schulte on May 29 that the 
G-77 would adopt a collectively "neutral" approach to the 
Secretariat proposals.  Mission requires guidance for the 
contingency that the hard-skeptic countries, led by Egypt, attempt 
to impose a procedural point that has figured in past G-77 group 
statements, assigning to the General Conference rather than the 
Board the approval of IAEA involvement in any multilateral nuclear 
arrangements.  Points we may deploy in this case could include: 
 
-- Article XI of the Statute assigns to the Board the authority to 
approve Agency projects.  We are confident that Member States 
currently on the Board and those who may serve in the future will 
not want to dilute this authority. 
 
-- All Member States can contribute their views in guiding the 
Secretariat on this issue, by speaking in this Board under Rule 50. 
Several states did so in past Board meetings, and we encourage 
fellow Member States to contribute to the discussion when the Board 
has detailed proposals before it. 
 
-- This priority, identified by the Director General some years ago, 
deserves the Board's continued active consideration, informed by 
expert views from the Secretariat and all Member States that wish to 
contribute. 
 
---------------   ---------------------------- 
Agenda Item 8:   Designation of Board Members 
---------------   ---------------------------- 
 
¶30. (SBU) The only change among the 13 designated Board members is 
that the Western European Group has designated Switzerland to 
replace Finland as a Board member for 2009--2010 (Finland will leave 
the Board in September.) Other designated members carried over 
include: Australia, Brazil, Canada, China, France, Germany, India, 
Japan, Russian Federation, South Africa, United Kingdom and the U.S. 
 Recommendation and Action Request:  Mission recommends we join 
consensus on the designated members. No U.S. statement is necessary. 
 
 
---------------   ----------------------------------- 
Agenda Item 9:    Appointment of the Director General 
---------------   ----------------------------------- 
 
¶31. (SBU) The Board Chair will provide a status report on the 
appointment of the Director General, with a Special Session for the 
election expected following the June Board.  Recommendation and 
Action Request:  If the Board Chair has not yet announced a date for 
the Special Session, USDEL should urge that it be convened as soon 
as possible following the June Board so as to ensure the timely 
appointment of the next Director General "by June at the latest," as 
presaged in the Procedures for Appointment of the Director General 
(GOV/2008/44.) Spain, in particular, is pressing for an election 
date in mid-July at the earliest.  (Note:  Until the DG election is 
resolved, we see no prospect for consideration of term limits.  End 
note.) 
 
---------------   ------------------------------- 
Agenda Item 10:    Provisional Agenda for the GC 
---------------   ------------------------------- 
 
¶32. (SBU) The Director General consults with the Board on the 
provisional agenda for the General Conference.  At this juncture the 
agenda includes an item on Middle East Safeguards but not the 
additional item traditionally requested by the Arab Group on 
"Israeli Nuclear Capabilities."  The Arab Group may request an 
additional item up until 30 days before the General Conference, and 
is widely expected to do so, as in the past. 
 
¶33. (SBU) Recommendation and Action Request:  No action is required. 
 Mission seeks Department guidance on whether to make a statement, 
as we have done in the past, noting that there should be only one 
Middle East GC agenda item and encouraging a return to consensus. 
Past U.S. statements have observed that it is inappropriate for the 
General Conference to single out one country in the region, ignoring 
non-compliance by other states.  While we could defer making a 
statement until the September Board agenda item on the DG's report 
on Middle East Safeguards, doing so could be misperceived by the 
Arab Group as tacit agreement to the additional agenda item on 
Israel.  At the same time, raising the profile of this issue just 
before what could be a divisive debate on de-restriction could be 
counterproductive, and have a negative impact on our broader efforts 
to lower the temperature in the Boardroom. 
 
---------------   ----------------------------------------- 
Agenda Item 11:    GC/Representation of Other Organizations 
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¶34. (U) In addition to previously accredited organizations listed in 
GOV/2009/21, an intergovernmental organization --the OPEC Fund for 
International Development -- and two NGOs, The Center for 
Nonproliferation Studies and the U.S. Civilian Research and 
Development Foundation are requesting accreditation as observers to 
the 2009 General Conference.  Recommendation and Action request: 
Mission recommends that USDEL join consensus in accepting these 
organizations as observers. 
 
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Agenda Item 12:    De-restriction of Documents 
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¶35. (SBU) As previewed ref a, this agenda item was added at the 
NAM's request in March pursuant to Board deliberations on the 
release of the Iran and Syria reports.  Recommendation and 
Action Request:  Mission recommends a low-key approach to this issue 
in maintaining the current de-restriction policy, but also in 
continuing to maintain the Board's authority on a case-by-case basis 
to release its own documents, as has been the case for 25 Iran 
reports.  The cover note to the Secretariat's report on 
de-restriction (GOV/2009/25) helpfully recalls the Board Chair's 
statement at the time of its adoption in 1997 that the Board retains 
the authority to re-restrict documents earlier or later than the 
normal two-year rule.  USDEL should be poised to respond if the 
G-77/NAM should seek to proscribe the Board's authority in this 
regard or to conflate this general policy with the specific cases of 
Iran and Syria.  USDEL should uphold the current policy while 
arguing for transparency.  One observation that may be worth noting 
is that unlike other international bodies, including the UN Security 
Council, IAEA Board resolutions are not available in the public 
domain (and even difficult to find on limited-access website 
govatom). 
 
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Any Other Business 
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¶36. (SBU) With such an exhaustive agenda, including for the first 
time assured supply as a formal item, we do not expect many 
interventions on AOB.  There is still a possibility of the Arab 
Group raising the Gaza DU issue; if they do so, Mission will rely on 
existing guidance from the March Board.