VZCZCXYZ0002
PP RUEHWEB

DE RUEHUNV #0546/01 3380854
ZNR UUUUU ZZH
P 040854Z DEC 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 0374
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY

UNCLAS UNVIE VIENNA 000546 
 
STATE FOR IO/GS, ISN/RA, ISN/MNSA, ISN/NESS 
DOE FOR NE - MCGINNIS, CLAPPER, HERCZEG, HAN, NA2O - BAKER, WITTROCK 
AND NA24 - LERSTEN, SCHEINMAN, GOOREVICH, BRUNS 
NRC FOR OIP - MDOANE, JSCHWARZMAN 
ROME FOR USMISSION TO FAO 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC KNNP IAEA ENRG TRGY
 
SUBJ: IAEA: NOVEMBER 2009 TACC and BOARD TC WRAP-UP 
 
REF: UNVIE 505 
 
------------------- 
SUMMARY AND COMMENT 
------------------- 
 
¶1. (SBU) The November 23-24 Technical Assistance and Cooperation 
Committee (TACC) adopted a draft report calling upon the Board to 
approve the 2010 TC Program with the exception of the results-based 
management project (RBM) proposed by the Secretariat (much to the 
consternation of the G-77; reftel.)  The carving out of the RBM 
project has now created a negative precedent that any one group of 
Member States can refer a project to a working group for redesign. 
The G-77 also resisted calls by OECD states to time-limit the 
working group to report by the March Board of Governors session, 
further confirming suspicions that the intent is to shelve the 
project.  In addition to approval of nine TC projects, the TACC also 
recommended the Board approve the TCF target for 2010, previously 
agreed at 82.75 million USD, and reviewed critical audits in five 
areas of TC by the Office of Internal Oversight Services (OIOS). The 
Board of Governors subsequently approved the TACC report November 26 
by consensus.  The U.S. statement signaled broad support for TC and 
nuclear applications while supporting RBM and TC reform. 
 
¶2. (SBU) The TACC atmosphere was tense as the G-77 strongly 
condemned any further attempts by the Agency and Western states to 
control the TC Program through monitoring and evaluations, even as 
they paid lip-service to RBM as a management practice they all claim 
to espouse.  When the RBM working group is established, like-minded 
countries will need to play an active role to ensure more coherent 
management of the TC program than heretofore.  Despite our best 
efforts to portray this as an issue between the Secretariat and the 
G-77, developing countries continue to frame it as a North-South 
dispute of "donors" micro-managing assistance that should be a 
recipient entitlement.  Western states acquiesced in creating this 
ill-advised working group out of concern for other equities in the 
November 26-27 Board of Governors session, including Iran and the 
Russian LEU fuel reserve.  The only potential benefit of creating a 
working group in this case is that likeminded may in the future use 
this as a precedent to consign a TC project of concern to such a 
working group, a point that some of the G-77 acknowledged partially. 
More broadly, this episode illustrates the ability of a small NAM 
minority to railroad the larger group by invoking the specter of 
U.S./Western attempts to circumscribe Member States rights. END 
SUMMARY AND COMMENT. 
 
--------- 
DDG Cetto 
--------- 
 
¶2.  (U) IAEA DDG Cetto opened the 2009 TACC by reiterating the broad 
themes of the TC program for 2009-2011, noting that human health, 
nuclear safety, and food and agriculture remain the main areas of 
focus across all regions during the current project cycle.  She also 
introduced the TC Program for 2010 consisting of nine off-cycle 
projects. (Note: This is the second year of an unusual three-year TC 
project cycle designed to place the TCF on the same timeline as the 
biennial regular budget negotiations. End note.)  Cetto announced 
that the tenth project originally posted, on results based 
management (RBM), would be deferred to a working group to redesign 
the project.  She did not state in her opening remarks when the 
project would be brought to the Board for approval, despite advice 
from Western states that this working group (a brain child of the 
Malaysian Board Chair) be time-limited to conclude by the March 
Board. Senior secretariat officials in separate conversations 
indicated it is their intention to bring the project to the March 
Board.  Cetto also used her statement as an opportunity to mention 
briefly the TC Department's intention to establish field presence 
posts, but did not elaborate on when, how, or any of the costs that 
would be involved.  To allay G-77 fears regarding the RBM 
interregional project she noted that, "The success and 
sustainability of TC projects rests primarily on their development 
in consultation with Member States.  This ensures that they have 
clear objectives, and respond to identified, agreed needs.  Let me 
emphasize once more that the TC approach is always needs-based, and 
strengthening results based management in Member States would in no 
way impose any conditionality on projects."  In short, Cetto backed 
down in the face of G-77 opposition. 
- 
----------------------------------- 
TACC - Item 2 - TC Program for 2010 
----------------------------------- 
 
¶3.  (U)  The G-77, Angola on behalf of the African Group, the EU 
(Swedish Presidency), Brazil on behalf of GRULAC, Libya on behalf of 
League of Arab States, the U.S. Mongolia, Malaysia, Japan, Egypt, 
Pakistan, Canada, Germany, Peru, Kenya, Korea, Australia, China, 
Cuba, the UK, France, India, Venezuela, Ukraine, Switzerland, 
Cameroon, South Africa, and Russia spoke on the 2010 TC program, in 
addition to non-Board members Sudan, Syria, and Israel under Rule 
¶50. 
 
¶4.  (U)  Western like-minded countries (US, UK, France, Switzerland, 
Canada, Japan, and Australia) spoke at length about the need for 
more transparency, monitoring and evaluation of TC projects.  All 
commended the Secretariat for trying to implement the next milestone 
in RBM, and came out strongly against the RBM project being derailed 
to a working group because of one group (G-77) of Member States. 
The U.S. statement and those of the UK, Switzerland, and Canada 
sought to time-limit this working group so that the project could be 
approved by the March Board of Governors.  The EU and Canada also 
encouraged further integration of the IAEA into the "One UN" system. 
 Japan and Australia focused on the need for country program 
frameworks (CPFs) to be available to all Member States and for 
better project planning.  The U.S. statement relaying support for TC 
and efficient management of the program was well received by the 
Secretariat. 
 
¶5.  (U)  In contrast, the G-77 and its members in their subsequent 
national statements opposed any further measures that would provide 
transparency, derestrict CPFs, provide timely project evaluations, 
etc.  The G-77 highlighted that technology transfer to developing 
countries is a "Statutory obligation" and that this should not be 
"diluted by political or other mechanisms such as One UN".  All G-77 
members called for more funding for TC projects and noted that TC is 
a purely demand driven program. Egypt, Malaysia, and Pakistan, in 
their national statements, staked out the most strident positions on 
these issues. 
 
¶6.  (U) Egypt and Libya, on behalf of the Arab League, also used 
their statements to criticize TC support to Israel, a complaint we 
have not heard in recent TACC's.  Egypt called on the Agency to stop 
all TC for Israel based on UNSCR 487 (1971) as well as decisions 
made by the IAEA GC.  The Arab League focused on the need for the 
due account mechanism to be applied to Israel, since it has not yet 
paid its national program costs (NPC) or pledged any financial 
support to the TCF.  Israel rejected the statements by Egypt and the 
Arab League, noting that Israel was not the only non-NPT party 
receiving TC.  Israel clarified that its active TC projects are in 
the areas of human health, water management, and agriculture and all 
were designed to achieve outcomes that could benefit any Member 
State.  Israel also refuted the charge of nonpayment of NPCs and its 
TCF pledge, noting that it pays its share annually. 
 
----------------------- 
TACC - Item 3 - TC Evaluations 
----------------------- 
 
¶7.  (U)  The Board Chairman (Malaysian Ambassador Arshad) opened 
agenda item 3, Evaluation of Technical Cooperation Activities in 
2009 (GOV/2009/72), with an overview of the evaluation activities 
undertaken in 2009 by the Office of Internal Oversight Services 
(OIOS).  He summarized the conclusions and recommendations of the 
report and outlined the proposed work plan for 2010 before OIOS 
representative, Mr. Tijani Chaouch Bouraoui, discussed the 
evaluation findings in each of the five program areas: food 
irradiation related to trade, support to countries considering 
embarking on a nuclear power program, projects in areas related to 
research reactors, Agency's assistance to fight cancer (Africa), and 
Agency's support to the Southern Rift Valley Tsetse eradication 
project in Ethiopia. 
 
¶8.  (U) Bouraoui noted that two of the evaluations (support to 
countries considering embarking on a nuclear power program, and 
projects in areas related to research reactors) were cross-cutting 
and conducted in conjunction with the evaluations of relevant 
programs in the Agency's technical departments.  He indicated that 
the evaluations benefitted from effective relationship between 
Agency departments and Member State counterparts.  While the TC 
projects evaluated were relevant to Member States' needs, OIOS did 
not always see improvement in delivery of fellowships, scientific 
visits, and training; comprehensive processes for achieving 
objectives; and improvement of the Program Cycle Management 
Framework (PCMF) for formulating and designing projects.  Lacking, 
as in previous years, is also a model for measuring results of 
projects because of the limited availability of data, lack of 
measurable indicators, and project reports without measurable 
indicators.  Bouraoui noted as well a continued concern about 
project sustainability because of scarce human and in some cases 
financial resources. 
 
¶9.  (U)  Bouraoui concluded his remarks with brief comments on the 
evaluation work plan for 2010, which includes evaluations of the 
safety of nuclear installations, contribution and role of the 
FAO/IAEA agriculture and biotechnology laboratory, project planning 
processes and achievement of objectives, and NLO function and 
structure. 
 
¶10.  (U) Several Member States (Argentina on behalf of the G-77, 
Brazil on behalf of GRULAC, Angola on behalf of the African Group, 
Ukraine, Malaysia, Japan, the U.S., Canada, Korea, India, Australia, 
the EU, and Venezuela) spoke under the evaluation agenda item.  The 
G-77 emphasized that an audit/evaluation can only be effective if 
the evaluated party has the opportunity to critique the 
audit/evaluation before the conclusions and findings are finalized 
by OIOS.  The Group maintains this practice would allow for more 
comprehensive and balanced audits/evaluations by OIOS. (NOTE: OIOS 
does not have standard policy allowing parties involved in TC 
evaluations to review reports before they are finalized.  Requests 
are handled on a case-by-case basis.  This is due to past instances 
where parties involved in evaluations have redacted them so heavily 
that all substance was lost. END NOTE) 
 
¶11. (U) The G-77 welcomed the OIOS conclusion that it is difficult 
to quantitatively estimate the socio-economic impact of TC projects. 
 However, the G-77 did not acknowledge the rest of the conclusion, 
which states that it is difficult to do this because of the lack of 
data provided by the TC Division and recipient states on projects. 
(NOTE: In future discussions on results based management; the G-77 
will use their interpretation of this conclusion to dissuade further 
evaluation of TC projects, claiming it will impinge on recipients' 
sovereignty to set their own socio-economic development indicators. 
END NOTE)  The Group also welcomed more training for countries 
wishing to embark on nuclear power program development, but did not 
welcome any of the OIOS conclusions that would strengthen the 
monitoring, evaluation, or results of TC projects.  The G-77 also 
vehemently opposed OIOS's intent to evaluate the National Liaison 
Officer (NLO) Program, because it would impinge on the sovereignty 
of TC recipients to determine how their respective NLOs interact 
with the IAEA TC Division.  (NOTE: The TC Division requested this 
evaluation because there are serious deficiencies in the NLO 
program.  The TC Division hopes the evaluation will provide a 
platform from which to standardize NLO procedures and functions. END 
NOTE) 
 
¶12. (U) Brazil and Angola spoke on behalf of their respective 
regional groups, thanking OIOS for its work in 2009.  Both groups 
stressed the need for continued funding of TC projects in sterile 
insect techniques and food irradiation.  GRULAC also opposed the 
OIOS 2010 evaluation on NLOs, but the Africa Group did not. 
National statements by Ukraine and Malaysia supported OIOS 
evaluations for 2009 and welcomed the 2010 work plan, although 
Malaysia also will not support the NLO evaluation.  Speaking in 
strong support of all OIOS work, Japan and Canada noted the need for 
all recommendations/conclusions to be implemented and welcomed the 
2010 work plan.  Both countries requested all evaluations of TC 
projects be shared with Member States.  South Korea again announced 
its intention to request no further TC and henceforth be exclusively 
a donor to the TC program; the ROK  offered to partner with the TC 
Department to provide training for countries embarking on nuclear 
power programs.  India and the U.S. were the only countries that 
requested further clarification of the report being prepared by the 
Secretariat on regional TC field presence and cautioned that the TC 
Department should not undertake any action without appropriate 
consultation with Member States. The Board Chair's conclusions noted 
that several members expressed concerns about the shortcomings in 
evaluation, monitoring, project design, etc. 
 
-------------------------- 
THE TACC REPORT TO THE BOG 
-------------------------- 
 
¶13.  (U) The TACC adopted a report on November 24 noting TC is the 
main vehicle for transferring nuclear technology to developing 
countries and the need for assured, predictable, and sufficient 
funding.  The Arab Group's call for strict application of the due 
account mechanism was also reflected.  The importance of RBM was 
noted as well as the opposition to it.  Ultimately the TACC 
recommended the Board approve the 2010 TC program "with the 
exception of project INT/0/085, which will be subject of work in a 
working group with a view to further developing the project and 
resubmitting it to the Board at a forthcoming meeting." (NOTE: 
During informal consultations on the TACC report, South Africa, on 
behalf of the G-77, announced the Group had no intention of allowing 
the RBM projct to be considered by the March 2010 Board as called 
for by the U.S., Canada and others. END NOTE) 
 
----------------------- 
BOG APPROVES TACC REPORT 
----------------------- 
 
¶14.  (U) On November 26 the Board approved the TACC report by 
consensus.  The Board also took note of the OIOS evaluations 
completed in 2009. 
 
---------------------- 
COMMENT -- TC's FUTURE 
---------------------- 
 
¶15.  (U) The 2009 TACC was marred by the political bias of a small 
group of vocal G-77 states against the RBM project.  Many G-77 
states with whom we engaged on the issue confessed that they were 
unfamiliar with the project at issue, and indicated vague concerns 
(based on what they heard from others)that this was the beginning of 
a western effort to restrict access to TC.  The unfortunate deferral 
of the RBM project led most Geneva Group members to call for more 
monitoring and evaluation of TC projects in order to ensure that 
funding by donors continues in difficult economic times.  Over two 
days the G-77 (and the Board Chair) argued that RBM is a "dubious" 
management practice.  Moreover, they asserted individual TC projects 
should not have to undergo evaluation or monitoring because it 
infringes upon their sovereignty and introduces political issues 
into the TC program, something prohibited by Article III.C of the 
Statute.  That article, however, refers to political, economic, 
military or other conditions "incompatible with the provisions of 
the Statute," and in our view cannot be construed as referring to a 
management tool such as RBM.  The very actions of the G-77 have set 
a precedent which can be used by others in the future to similarly 
divert TC projects to a working group for redesign.  In the future 
this would provide the opportunity for any group of concerned Member 
States to call for the establishment of a working group on any and 
all projects that may not be designed well or are deemed 
inappropriate. 
 
¶16.  (SBU) The fate of the RBM project is not clear.  To date the TC 
Department has not announced the formation of the RBM working group 
or its composition.  DDG Cetto also declined to press for a firm 
reporting date of March 2010.  The G-77, through South Africa, have 
categorically said they do not intend this project to be approved at 
the March 2010 Board (if at any time).  Mission recommends active 
USG participation in the RBM working group so as push for 
implementation of this common management practice and management 
reform in TC.   Whatever the shortcomings of this particular 
Secretariat-proposed RBM project, the broader objective would be to 
drive home the importance of TC management reform and not perpetuate 
the G-77 interpretation of the TC program as an on-demand 
entitlement free of financial accountability to contributors. 
 
DAVIES