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DE RUEHUNV #0434/01 2651603
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O 221603Z SEP 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0082
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UNCLAS UNVIE VIENNA 000434 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC IAEA KNNP
SUBJECT: IAEA SAFEGUARDS: "FUTURE OF THE AGENCY" 
DISCUSSION, SEPTEMBER 3-4, 2009 
 
¶1. (SBU) Summary:  The two days of informal "Future of the 
Agency" discussions in the IAEA Board Room on the topic of 
"Safeguards and Verification" rehashed many North-South 
issues, with Iran voicing a list of complaints while the IAEA 
defended itself and Western allies insisted on the importance 
of the Additional Protocol and strengthened safeguards 
generally.   Egypt and Cuba intervened, but sounded 
relatively more balanced; Egypt occasionally contradicted 
Iran.  The issues raised by the three NAM leaders included: 
the primacy of the promotional role of the IAEA (i.e., 
peaceful uses of nuclear energy); lowering the contributions 
of developing states for funding safeguards;  concerns over 
confidentiality, and in this connection, CFEs;  the need to 
address disarmament;  that voluntary measures not be turned 
into legal obligations; inclusion in the SIR of member states 
views.   When it came to actual safeguards there were no 
objections to the usual prescriptions: advanced technology, 
taking advantage of the AP, modernizing SAL, enhanced 
cooperation with State systems of accounting for and control 
of nuclear material (SSACs), information-driven safeguards, 
designed-in safeguards. 
 
¶2. (SBU) Summary Continued: This session on verification was 
the sixth in a series of discussions on the Future of the 
Agency, which were billed as informal, with any potential 
recommendations to be by consensus.  The chairman called for 
a next meeting on October 12 -13, on the issue of Policy and 
Management; he noted that this discussion might take only one 
day, and there was no objection to the suggestion that a 
cross-cutting discussion or general exchange of views on all 
the topics might take place afterwards.  Another meeting was 
scheduled for November 19 and 20, before the annual Technical 
Assistance and Cooperation Committee meeting.  End summary. 
 
¶3. (SBU) The first morning of the Safeguards and Verification 
meeting in the "Future of the Agency" series was taken up 
with opening statements and some explanations by the IAEA 
Secretariat; from there the chair (Brazilian Ambassador 
Guerreiro) followed a list of questions and issues compiled 
from member states.  Much of the rest of the meeting 
reflected the themes of these opening statements. 
 
¶4. (SBU) The statement of the G-77 plus China read by 
Argentina focused on: rejection of the 'primacy' of 
safeguards and balance between the Agency's activities; the 
assertion that developing countries need to be protected from 
increasing safeguards costs; complaints about insufficient 
confidentiality, and in this context, the use of Member 
State-funded Cost Free Experts, (CFEs); and restrictions on 
Technical Cooperation (TC) activities based on safeguards 
considerations.  The NAM statement, read by Egypt, also 
addressed the need for disarmament; the need to distinguish 
voluntary or 'transparency' measures from legal obligations; 
and the proposal that the annual Safeguards Implementation 
Report (SIR) include member state views.  Iran intervened, 
often at great length, on all of these topics. 
 
¶5. (SBU) Egypt intervened to flog the NAM views, but 
sometimes struck a balanced note in contradiction to Iran. 
Directly after Iran decried the possibility that safeguards 
considerations might inhibit TC projects, for example, Egypt 
said it accepted the notion that TC projects must be 
safeguards-vetted.   When Iran argued that the IAEA Statute 
made no reference to obligatory safeguards, Egypt came back 
and agreed with Germany that of course NPT safeguards are a 
legal obligation.  Cuba also intervened on behalf of issues 
like disarmament, but also sounded more balanced than did 
Iran. 
 
¶6. (SBU) Expressions of support for the importance of 
effective safeguards and the Additional Protocol (AP) to 
Comprehensive Safeguards Agreements came from Germany, 
France, Japan, Canada, Australia, the U.S., ROK, and Ireland; 
China supported the AP and the need to maintain the IAEA's 
technical capability.   One or more of these states supported 
the vetting of TC projects, supported the need for 
transparency, rejected the idea of integrating member states' 
views into the SIR, and supported the current assessment 
system.  When it came to actual safeguards implementation 
topics, there were views expressed in favor of the usual set 
of ideas for improving safeguards: the AP, better technology, 
enhanced cooperation with the States' Systems of Accounting 
and Control (SSAC), improvements to the Safeguards Analytical 
Laboratory (SAL), advanced safeguards methods.  Special 
inspections, and the issue of collecting and analyzing 
information on nuclear supply networks was discussed briefly 
and inconclusively.  There were no real objections to any of 
these ideas, but neither were there any serious, substantive 
discussions on ground-breaking topics like new authorities. 
(Comment:  The risk of going backward rather than forward on 
these issues, as happened in "Committee 25," may have led 
 
strong supporters of safeguards to steer clear of using this 
forum for bold ideas.  End Comment.) 
 
¶7. (SBU) There was considerable discussion on the funding of 
safeguards.  Iran suggested only NPT safeguards in the 
non-nuclear weapons states (NNWS) be paid for out of the 
regular budget, and posited that everything else was useless 
and should be paid for by the state. Along with Egypt, Iran 
asked the Secretariat to come up with country-specific cost 
estimates for safeguards, suggesting that the states that 
benefit from nuclear facilities ought to pay more.  The 
shielding system (assessment discounts for developing 
countries applied since the last plus-up in the safeguards 
budget) was discussed.  The Secretariat (DDG Heinonen) 
pointed out that large portions of safeguards costs cannot be 
allocated country-by-country, and in some cases (JMOX in 
Japan) the safeguarded state has made large contributions. 
IAEA Safeguards Legal Advisor Rockwood pointed out that costs 
in the NWS that were voluntary were paid for by the state. 
Pakistan noted that INFCIRC/66 (facility-specific) safeguards 
agreements are approved by the Board, just as INFCIRC/153 
agreements are.  Canada asked that if the Agency were to 
provide such cost estimates, it ought to be in the context of 
other figures indicating both contributions and total 
expenditures in each country.  Cuba agreed that safeguards 
benefit all nations and that the scale of assessments was 
fair, but observed that some funding should be based on 
state-specific safeguards costs.  The Secretariat agreed to 
make the estimates available.  (Comment: Of all the issues 
raised by the G-77 and NAM papers, the budget issue seems the 
one least easily dismissed, and the least likely to go away, 
especially if safeguards costs continue to rise.  End 
comment.) 
 
¶8. (SBU) Iran wanted a Chemical Weapons Convention-like 
mechanism to enforce confidentiality rules, and complained 
about the leaks from the Board and the restricted-access 
GOVATOM website.  Canada and Russia said there needs to be a 
balance between openness and confidentiality.  The 
Secretariat noted its strong staff rules on the issue and 
noted that it could not control what member states did with 
information they are given.  Iran complained that Cost-Free 
Experts should not be involved with safeguards; the 
Secretariat indicated that for the most part such experts 
were given specialized tasks not related to safeguards 
evaluation or inspection, and moreover were bound by the same 
confidentiality agreements as the staff. 
 
¶9. (SBU) Comment: The safeguards installment of Future of the 
Agency provided another unfortunate illustration of the 
rehearsed ideological divide between some leaders of the 
Non-Aligned Movement and Group of 77 on the one hand and 
Member States with a nonproliferation focus on the other. 
Mercifully, attention on the Board of Governors and General 
Conference meetings of the two weeks immediately following 
this session overwhelmed this event; the discussions reported 
here likely changed few minds in either direction on the 
issues of safeguards' funding, intrusiveness, or legal 
limitations.  Our key challenge for the weeks ahead is to win 
the support of key swing states like Brazil, South Africa, 
India, and Mexico that share many of our perspectives and are 
better placed to exercise a moderating influence on NAM and 
G-77.  End Comment. 
 
¶10. (U) Mission thanks ISN/MNSA's Jonathan Sanborn for his 
preparation for and participation in USDEL in this meeting. 
DAVIES