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DE RUEHC #7105/01 1541841
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UNCLAS SECTION 01 OF 04 STATE 057105 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC ENRG IAEA KNNP PREL UN
SUBJECT: DEMARCHE ADVOCATING INCREASE IN IAEA BUDGET 
 
REF: A. UNVIE 227 B. STATE 48677 C. UNVIE 201 
 
¶1.  SUMMARY AND ACTION REQUEST: The United States supports a 
significant real increase in the budget of the International 
Atomic Energy Agency (IAEA) to strengthen its capabilities to 
prevent the spread of nuclear weapons and prevent nuclear 
terrorism.  Post is requested to demarche host government at 
senior levels to support a significant real increase in the 
IAEA regular budget for 2010-2011, which is currently being 
negotiated in Vienna by Board member states. (Note: The U.S. 
position is to support an increase of up to 9.5 percent.) 
Post may draw on the background and points in paras 3-10 and 
the non paper in para 11 to achieve the objectives in para 2. 
 Post is requested to report response by June 5.  END SUMMARY 
AND ACTION REQUEST. 
 
¶2. OBJECTIVES: 
 
-- Persuade key IAEA Member States to support a significant 
real increase in the regular budget of the International 
Atomic Energy Agency. 
 
-- Ensure that this increase is consistent with U.S. 
priorities in international safeguards (verification of 
nonproliferation), nuclear security (combating nuclear 
terrorism), and safety (of facilities and materials). 
 
-- Emphasize to G-77 countries that nuclear security is an 
important global priority that is integral to the IAEA's 
mission and does not conflict with G-77 priorities. 
 
¶3.  Background:  The U.S. argued for a significant real 
increase above zero growth during the meeting of the IAEA 
Program and Budget Committee (PBC) April 27-28.  The U.S. 
position is to support an increase of up to 9.5 percent. 
Some European countries, however, are insisting on a budget 
much closer to zero real growth.  The G-77 countries have 
shown more flexibility toward an increase, but continue their 
strong opposition to the U.S. priority of moving costs 
associated with the management of nuclear security into the 
regular budget.  The budget is normally approved at the June 
15-19 Board of Governors meeting. 
 
Points for Western Countries (Germany, Switzerland, 
Australia, Ireland, Finland, UK, Spain, Canada, France, 
Japan, New Zealand) 
---------------------------- 
 
¶4.  Many Geneva Group and European countries have opposed DG 
ElBaradei's proposal to increase the IAEA budget.  This 
posture does not square with the leadership many of these 
countries have shown on non-proliferation and in support of 
IAEA programs for nuclear security, safety and safeguards. 
 
¶5.  Although we recognize that a substantial increase during 
this time of fiscal constraint presents challenges for many 
of us, the programs that we value most are in need of 
additional resources if they are to be implemented 
effectively.  In addition to carrying out several 
high-profile investigations of real and suspected safeguards 
non-compliance, the Agency's day-to-day responsibilities are 
growing significantly faster than its resources.  The IAEA's 
Safeguards Analytical Laboratory is a critical part of its 
safeguards system and can no longer be sustained without 
significant new capital investments. 
 
¶6.  By preventing the access by criminals and terrorists to 
nuclear material, the IAEA's nuclear security programs are a 
critical element of the international response to the threat 
of nuclear terrorism.  These programs depend too much on 
voluntary contributions, which are subject to donor 
 
STATE 00057105  002 OF 004 
 
 
constraints and are inherently uncertain.  This over-reliance 
therefore threatens the IAEA's ability to maintain critical 
staff, plan effectively, and respond flexibly to the needs of 
Member States.  In order for these programs to remain strong, 
the staff who manage them need to be funded through the 
regular budget. 
 
¶7.  The U.S. urges the other major contributors to take a 
more long term, strategic view of the IAEA and its mandates. 
We ask that these countries be open to discussing 
programmatic priorities at the Agency and how best to 
adequately resource them.  Given the international 
community's reliance on the Agency for legitimacy and 
technical support in verifying and monitoring rogue states 
and clandestine nuclear programs, we believe a budget 
increase is justified. 
 
POINTS FOR G-77 COUNTRIES 
------------------------- 
 
¶8.  Additional background for G-77 countries (a group of 132 
developing countries) including Argentina, Brazil, India, 
Mexico, and South Africa: The G-77 and China showed some 
flexibility toward an increase, but continued their strong 
opposition to mainstreaming nuclear security by moving it 
into the regular budget.  However, many G-77 countries 
benefit from nuclear security activities. 
 
¶9.  Some have argued that nuclear security is not a core 
statutory function of the IAEA.  Brazil, Argentina and Egypt 
have been particularly vocal in this regard.  We disagree. 
Nuclear security is an essential enabling factor for the 
IAEA's core mission, "to accelerate and enlarge the 
contribution of atomic energy to peace, health and 
prosperity."  UNGA resolution A/RES/60/288 of 2006 encourages 
the IAEA to continue its efforts to help States build 
capacity to prevent terrorists from accessing nuclear, 
chemical or radiological materials and to ensure security at 
related facilities. 
 
¶10.  Over 60 countries ) many of them developing countries - 
have indicated an interest in developing nuclear power 
programs.  They require support from the global community to 
ensure that nuclear power programs are safe from risks of 
accidents, secure from criminals and terrorists, and will not 
contribute to the spread of nuclear weapons.  The IAEA is the 
only international organization with the tools and the 
mandate to provide the necessary training, guidance and 
advice to put in place effective infrastructures for nuclear 
power.  The United States supports the IAEA's activities in 
infrastructure development, and sees incorporating funding 
the management of nuclear security into the IAEA's regular 
budget as an essential step to make those efforts effective 
in meeting the needs of all Member States. 
 
POINTS FOR RUSSIA, CHINA AND INDIA 
---------------------------------- 
 
¶11. Three of the largest and most important IAEA Member 
States, Russia, China and India, have remained virtually 
silent in discussions of the IAEA Budget, although China and 
India are nominally aligned with the position of the G-77 
plus China.  These three should be encouraged to play a 
leadership role in bridging differences among member states 
and helping build consensus within the IAEA Board of 
Governors. 
 
POINTS FOR THE P-5, JAPAN AND GERMANY 
------------------------------------- 
 
¶12.  We have worked together to respond effectively to the 
proliferation challenges in Iran and North Korea.  The IAEA 
has a critical role to play in those processes, and it is 
essential that we show our support for that role.  We can do 
this both by supporting the Agency's nonproliferation role 
 
STATE 00057105  003 OF 004 
 
 
and by working to strengthen international consensus by 
addressing the priorities of all IAEA Member States. 
 
POINTS FOR ALL POSTS 
-------------------- 
 
¶13.  Though our priorities may differ, we share a commitment 
to the essential role of the IAEA in promoting peaceful uses 
of nuclear energy while safeguarding against proliferation 
and ensuring safety and security worldwide.  Let us honor 
that commitment by working together in a spirit of mutual 
respect toward a realistic consensus on a reasonable but 
significant increase in the IAEA's budget. 
 
 
¶14.  BEGIN TEXT OF NON PAPER: 
 
The Administration believes the International Atomic Energy 
Agency (IAEA) needs an increase in resources to better meet 
its mandates.  Chief among these are ensuring that civil 
nuclear facilities and materials are not diverted to military 
uses and are secure against theft or seizure for terrorist 
purposes.  The U.S. supports a significant real increase in 
the IAEA regular budget to strengthen IAEA capabilities and 
support its missions, which are growing in scale and 
complexity as more nations rely on nuclear applications for 
energy and human well-being. 
 
Safeguards:  IAEA implements a system of safeguards 
agreements to ensure that nuclear programs are not used for 
nuclear weapons purposes.  IAEA safeguards provide assurances 
not only that nuclear material is not diverted from known 
facilities, but also of the absence of undeclared nuclear 
activities.  The U.S. supports strengthening the Agency's 
ability to provide credible assurances that States are 
complying with their safeguards obligations.  Along with the 
high-profile special investigations of NPT non-compliance, 
which are done on an ad hoc basis, the IAEA's day-to-day 
safeguards responsibilities are growing significantly faster 
than its resources. 
 
Security:  The United States encourages countries to support 
nuclear security to ensure nuclear materials are not 
accessible to terrorists.  Currently, IAEA relies almost 
entirely on voluntary contributions from a few Member States; 
however, the U.S. believes that funding the management of 
nuclear security through the regular budget would make 
program delivery more effective and efficient. 
Notwithstanding, extra-budgetary funding will still be 
required in order to carry out the majority of nuclear 
security activities.  Contrary to arguments that nuclear 
security is not an IAEA core statutory function, the U.S. 
sees nuclear security is an essential enabling factor for the 
IAEA's core mission -- "to accelerate and enlarge the 
contribution of atomic energy to peace, health and 
prosperity."  Nuclear security is a U.S. priority, but we are 
also sensitive to other members, priorities on technical 
cooperation and nuclear applications for development.  We 
will negotiate in good faith to address these priorities. 
 
Safety:  A major nuclear accident can have severe 
consequences regionally and nationally.  It is vital that all 
power plants around the world have strong and effective 
safety systems in place to prevent such an accident.  Small 
increases in funding for IAEA safety programs can contribute 
significantly to the support provided to Member States. 
 
The global financial crisis is forcing all of us to make 
difficult choices on how we spend our money, and the IAEA is 
no exception.  But the IAEA provides unique and critical 
benefits for all of us at a relatively modest cost.  To 
sustain those benefits, the U.S. encourages Member States to 
support a significant real increase in the IAEA regular 
budget. 
 
 
STATE 00057105  004 OF 004 
 
 
¶15.  Point of Contact: Department points of contact are IO/T 
Jim DeTemple (202-736-7930) and IO/MPR ) Lisa Spratt 
(202-647-6395) 
CLINTON