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Budget Breakthrough, Mounting Challenges: Statement by IAEA Director General Mohamed ElBaradei, IAEA Board of Governors Meeting, Vienna, July 18

I. IAEA Press Release, July 18

'IAEA Board of Governors Recommends Landmark Budget', International Atomic Energy Agency (IAEA) Press Release, PR 2003/12, July 18; IAEA website, http://www.iaea.org.

The IAEA's Board of Governors today agreed on the first IAEA significant budget increase in more than a decade and a half. The increase of $15 million over the $245 million 2003 regular budget is envisioned to grow to $25 million by 2007. The budget is subject to approval by the IAEA's General Conference in September.

"This represents a real vote of confidence in the IAEA and a recognition of the importance of our work," IAEA Director General Mohamed ElBaradei said. "It is a long overdue but very welcome first step in tackling the chronic under-funding of the IAEA."

Dr. ElBaradei, in a statement to the Board, said "The budget that has been agreed responds in a balanced manner to the priorities of the Agency in both the regulatory and developmental fields. The bulk of the increase goes to the verification programme, because that programme has been experiencing the greatest demand for additional resources and has for years been the most chronically under-funded ."

In his statement, Dr. ElBaradei also addressed some recent developments of particular importance in Iraq, Iran and North Korea.

On Iraq, Dr. ElBaradei referred to the report of his recent verification mission to Iraq, which, he noted, was confined to verification of material subject to safeguards at Location C Nuclear Storage Facility near Tuwaitha. The report notes that at least 10 kg of uranium compounds could have been dispersed. "While fortunately neither the quantity nor the type of material involved would be sensitive from a proliferation point of view," Dr. ElBaradei said, "I have called upon the Authority to ensure the physical protection of the entire nuclear inventory in Iraq and to make every effort to recover, where possible, the looted material and place it under Agency safeguards."

Dr. ElBaradei noted that the Authority has informed the IAEA that it would assume responsibility for nuclear safety. The Agency mission therefore did not look into possible safety and health effects of the looting of nuclear material or radioactive sources. "In view of recurrent media reports on the subject," Dr. ElBaradei said, "I trust that the Authority will monitor any impact on the safety and health of the surrounding population and will share its findings with the Agency" and added that "the Agency stands ready to provide any assistance required."

Commenting on a future role for the IAEA in Iraq, Dr. ElBaradei said that "although the Agency's mandate in Iraq under various Security Council resolutions still stands, the Council has stated in resolution 1483 that it will revisit that mandate and we are awaiting such a review." Nonetheless, he emphasized that, "irrespective of our mandate under Security Council resolutions, we have the continuing obligation under Iraq's NPT safeguards agreement with the Agency to ensure that, in accordance with that agreement, Iraq does not have any proscribed nuclear material or activities."

On his recent visit to Iran, Dr. ElBaradei reported that the purpose of the visit was to impress on the Iranian authorities the need to clarify outstanding safeguards issues and to urge them to sign an Additional Protocol to enable the Agency to conduct in-depth and comprehensive verification. "I expressed the need for substantial progress without delay in light of the report being prepared for the Board in September," he said.

He noted that a technical meeting took place last week in Tehran with senior IAEA safeguards staff and Iranian counterparts. As well, an IAEA team will visit Tehran in the next few weeks to clarify certain aspects of the Additional Protocol.

On North Korea, Dr. ElBaradei expressed his concern about the latest reports about its reprocessing of the fuel rods that were under safeguards in the DPRK. "In my view, the situation in the DPRK is currently the most immediate and most serious threat to the nuclear non-proliferation regime," he said, "and I find it regrettable that little concrete progress on the issue appears to have been made since December, when the Agency's verification work came to a halt. I earnestly hope that the international community will urgently focus its efforts on bringing the DPRK back to the non-proliferation regime." He added that he was "encouraged by some recent efforts on the part of China to restart a dialogue towards that end" and that he remained "committed to continuing to work with all concerned parties to help achieve a comprehensive solution to this problem."

II. Statement by IAEA Director General, July 18

'Statement to the Board of Governors by IAEA Director General Dr. Mohamed ElBaradei', IAEA Board of Governors, Vienna, July 18; IAEA website.

Programme and Budget

I welcome the agreement that has been reached by the Board on the budget and the associated 'package' of related issues. This is the first budget - after a decade and a half of a preset financial ceiling - that is based on real needs and provides the Secretariat with the increased resources required to implement an expanding programme. I am grateful for your understanding and support.

The budget that has been agreed responds, in my view, in a balanced manner to the priorities of the Agency in both the regulatory and developmental fields. The bulk of the increase goes to the verification programme, because that programme has been experiencing the greatest demand for additional resources and, as I have stated many times, has for years been the most chronically underfunded and has relied excessively on extrabudgetary resources, with all the negative consequences of such reliance in terms of independence, planning and staffing. Even with the agreed budget, the Agency's reliance on such resources will remain in my view unacceptably high, especially in the safeguards, safety and security areas. I hope that over time this will be corrected so that all core programme activities of the Agency can be incorporated into the regular budget. The budget you have just recommended is a step in the right direction.

I am aware that your consultations have not been easy. This is somewhat understandable. Different Member States naturally have different needs and priorities. I am particularly pleased, therefore, to see that consensus in the end has been achieved. This has always been the hallmark of this Agency and, in my view, it is the only way to maintain the ability of the Agency to perform its essential functions and deal effectively with the increasing challenges facing it. ...

Let me now take this opportunity to report on some recent developments of particular importance.

Iraq

My reports to the Board (GOV/2003/46) and to the Security Council provide an account of our recent verification mission to Iraq. Our request for this mission was triggered by persistent media reports of looting. The mission was confined to verification of material subject to safeguards at Location C Nuclear Storage Facility near Tuwaitha, where the looting had reportedly taken place. The reports note that at least 10 kg of uranium compounds could have been dispersed. While fortunately neither the quantity nor the type of material involved would be sensitive from a proliferation point of view, I have called upon the Authority to ensure the physical protection of the entire nuclear inventory in Iraq and to make every effort to recover, where possible, the looted material and place it under Agency safeguards.

I should note that the Authority has informed the Agency that it would assume responsibility for nuclear safety. The Agency mission therefore did not look into possible safety and health effects of the looting of nuclear material or radioactive sources. In view of recurrent media reports on the subject, I trust that the Authority will monitor any impact on the safety and health of the surrounding population and will share its findings with the Agency. Naturally, the Agency stands ready to provide any assistance required.

Our mission was conducted in connection with the safeguards agreement between Iraq and the IAEA pursuant to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). Although the Agency's mandate in Iraq under various Security Council resolutions still stands, the Council has stated in resolution 1483 that it will revisit that mandate and we are awaiting such a review. Nonetheless, I should emphasize that, irrespective of our mandate under Security Council resolutions, we have the continuing obligation under Iraq's NPT safeguards agreement with the Agency to ensure that, in accordance with that agreement, Iraq does not have any proscribed nuclear material or activities.

Islamic Republic of Iran

I have just returned from a visit to the Islamic Republic of Iran at the invitation of the Iranian Government, during which I met with the President of Iran and other senior officials. In all my meetings, I impressed on the Iranian authorities once again the need to clarify without delay outstanding safeguards issues (as noted in my report to the June Board - GOV/2003/40) and to co-operate fully and in a transparent manner with the Agency. I also urged the Iranian authorities, as I do all parties to comprehensive safeguards agreements, to sign an Additional Protocol that would enable the Agency to conduct the in-depth and comprehensive verification that could generate, particularly in a country like Iran with extensive nuclear activities, the required assurances.

In conjunction with my visit, a technical meeting took place between our senior safeguards staff and Iranian counterparts. During that meeting, some of the outstanding issues were discussed and the Agency proposed to the Iranian counterparts the timetable and the actions to be taken to resolve the remaining issues. We are awaiting the Iranian response, which is expected shortly. During my visit, Iran also requested that an Agency team visit Tehran to clarify certain aspects of the Additional Protocol; this mission is expected to take place in the next few weeks.

I shall be reporting on our verification activities in Iran to the Board in September and hope that substantial progress in clarifying many of the outstanding issues will by then have been made.

Democratic People's Republic of Korea (DPRK)

I am sure you are aware of the latest media report from the DPRK about its reprocessing of the fuel rods that were under safeguards - a report which comes on the heels of many other disturbing reports. In my view, the situation in the DPRK is currently the most immediate and most serious threat to the nuclear non-proliferation regime. And I find it regrettable that little concrete progress on the issue appears to have been made since December, when the Agency's verification work came to a halt. I earnestly hope that the international community will urgently focus its efforts on bringing the DPRK back to the non-proliferation regime. In this regard, I am encouraged by some recent efforts on the part of China to restart a dialogue towards that end.

The Secretariat and I remain committed to continuing to work with all concerned parties to help achieve a comprehensive solution to this problem.

Finally, I might note that until the status of the DPRK under the NPT has been clarified, the application of safeguards under the DPRK's INFCIRC/66 safeguards agreement will continue to be suspended.

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