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'[V]erification and diplomacy, used in conjunction, can be effective', IAEA Director General Dr Mohamed ElBaradei, September 20, 2004

Statement to the Forty-eighth Regular Session of the IAEA General Conference 2004, by IAEA Director General Dr. Mohamed ElBaradei, September 20, 2004, Excerpts on Nuclear Non-Proliferation.

Every year brings new challenges and opportunities, and the past twelve months at the IAEA have been no exception. The outlook for nuclear power is evolving, with increasing attention to its benefits as an environmentally clean source of electricity, but with concerns remaining related to waste disposal, safety and security. Nuclear applications related to human health, agriculture and other fields are increasingly contributing to global sustainable development initiatives, and the Agency has redoubled its efforts to support these initiatives by improving the efficiency and extending the reach of its technical cooperation programme. Global cooperation in matters of safety and security has resulted in good progress, but there is still much to be done. In the area of verification, the Agency's activities are at the centre of efforts to curb nuclear proliferation, and we have continued to prove our ability to conduct objective and credible safeguards - but we still face a number of difficult and unresolved situations, and the international community has begun to focus on how to strengthen the nuclear non-proliferation regime.

Today I welcome this opportunity to review with you some of the Agency´s work in each of these areas...

Verification Of Nuclear Non-Proliferation

The verification challenges that the Agency has faced in the past year further underscore the importance of its role in combating proliferation, and the urgency of providing the Agency with all the necessary means to perform its verification responsibilities in an effective and credible manner.

Status of Safeguards Agreements and Additional Protocols
Since last year´s General Conference, the number of States with additional protocols in force has increased appreciably, from 36 to 60. Additional protocols have entered into force for 15 European Union countries, as well as for Armenia, Chile, Cuba, El Salvador, Ghana, the Republic of Korea, Madagascar, Paraguay and Uruguay. Iran and Libya also decided to apply their additional protocols pending entry into force. NPT safeguards agreements have entered into force for Cuba, Kyrgyzstan, Seychelles and the United Arab Emirates - bringing the total number of States with safeguards agreements in force to 150.

The Secretariat has continued its efforts to inform States about the global security role of safeguards agreements and additional protocols, and to explain related legal and technical requirements. In the past year, regional outreach seminars were held in Burkina Faso and Namibia, and an interregional seminar was organized in Vienna for States party to the NPT that had not yet concluded comprehensive safeguards agreements. National seminars were held in Colombia and Mexico, while Belarus, Cuba, Morocco, Saudi Arabia and Switzerland sent teams to Vienna to discuss the conclusion of safeguards agreements and additional protocols.

Despite these welcome developments, there remain 42 States party to the NPT that have not yet fulfilled their Article III obligation to bring into force comprehensive safeguards agreements with the Agency, and 133 States do not have additional protocols in force.

The Safeguards Implementation Report and Safeguards Statement for 2003
Turning to the Safeguards Implementation Report (SIR) for 2003: for 19 States with both a comprehensive safeguards agreement and an additional protocol in force or being otherwise applied, the Agency was able to conclude - having found no indication of the existence of undeclared nuclear material or activities - that all nuclear material had been placed under safeguards and remained in peaceful nuclear activities or was otherwise adequately accounted for.

For 125 other States (and Taiwan, China), the Agency was able to reach a more limited conclusion - namely, that the nuclear material and other items that had been placed under safeguards remained in peaceful use or were otherwise adequately accounted for. With regard to Libya and Iran, both of which had been engaged in undeclared nuclear activities, the Agency was not able to draw this conclusion. With regard to 44 non-nuclear-weapon States party to the NPT but without safeguards agreements in force, the Agency was not able to implement safeguards, nor could we draw any safeguards conclusions.

Integrated Safeguards
The use of integrated safeguards aims to improve the effectiveness and cost efficiency of verification activities, by integrating traditional nuclear material verification activities with new strengthening measures, particularly those of the additional protocol. With the implementation of integrated safeguards in States with major nuclear programmes, the Agency expects to realize some savings through reduced field verification activities. I am pleased to note that Japan has become the first State with an advanced nuclear fuel cycle to qualify for integrated safeguards. To realize savings in the safeguards budget, we are now giving priority to the completion of State-level integrated safeguards approaches for eligible States. We have continued to implement integrated safeguards in Australia and Norway, initiated implementation in Indonesia and finalized preparations for integrated safeguards in Hungary.

I should point out, however, that the initial implementation of an additional protocol and the startup of integrated safeguards programmes always occasion a temporary increase in effort and expenditure on the part of the Secretariat. Given that we are beginning to implement strengthened safeguards in more than 20 new countries in 2004, the resources available for safeguards implementation, even with the additional resources made available in this year's budget, will be stretched to the limit. The highest degree of cooperation and transparency by national and regional authorities will be indispensable for the Agency to successfully meet its responsibilities.

I would also note that work is under way to improve the Agency´s verification capabilities in a number of areas: by re-engineering the IAEA Safeguards Information System (ISIS); and by developing measures to enhance the Agency's technical ability to detect and provide safeguards against undeclared nuclear activities. These more sophisticated and complex technologies will require additional support from Member States - in terms of both technology and budget.

Verification Activities in Iraq
On 30 June 2004, as I have reported to the Security Council, the US Government informed the Agency that, with the consent of the interim Iraqi Government, it had removed from Iraq some of the nuclear material stored at the Tuwaitha complex south of Baghdad, along with approximately one thousand highly radioactive sources. Last month, pursuant to Iraq´s NPT safeguards agreement, the Agency carried out an annual Physical Inventory Verification of declared nuclear material in Iraq, consisting of natural and low enriched uranium.

The Agency´s mandate in Iraq under Security Council resolution 687 and other related resolutions remains in effect. Security Council resolution 1546, inter alia, reaffirmed the intention of the Council to revisit the mandate of the Agency in Iraq. I hope that the Council will soon provide guidance on the future of this mandate. It is important to bring the whole question of weapons of mass destruction in Iraq to closure as early as possible.

Implementation of the NPT Safeguards Agreement in the Libyan Arab Jamahiriya
The Agency's verification activities in Libya over the course of this year have confirmed that, for many years, Libya pursued a clandestine programme of uranium conversion and enrichment. Starting in the early 1980s and continuing until the end of 2003, Libya failed to meet its obligations under its safeguards agreement - with respect to the reporting of nuclear material imported into Libya, the subsequent processing and use of the material, and the declaration of facilities and other locations where the material was stored and processed. Moreover, Libya had received documents providing information on the design of nuclear weapons.

The Board in March noted with concern that these failures on the part of Libya constituted non-compliance with its safeguards agreement, and requested that I report the matter to the Security Council for information purposes. The Board has welcomed the steps taken to date by Libya to dismantle and eliminate its equipment, materials and programmes related to the production of nuclear weapons, in a manner verifiable by the Agency. I am pleased to report, with Libya´s cooperation, the Agency has increased its understanding of Libya´s past undeclared nuclear programme.

Our assessment to date is that Libya's declarations concerning its uranium conversion programme, enrichment programme and other past nuclear related activities appear to be consistent with the information available to, and verified by, the Agency. This is a welcome development. However, some questions related to the acquisition of material and technology - including the origin of uranium contamination on some equipment - still need further investigation in order for the Agency to verify the completeness and correctness of Libya´s declarations. We will continue to pursue these questions as part of our routine inspection activities in Libya.

Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran
The Board has continued to devote considerable attention to the implementation of Iran´s NPT safeguards agreement, and has adopted several resolutions urging Iran, inter alia, to demonstrate full cooperation and transparency in enabling the Agency to deal with open questions and unresolved issues. Last December, Iran signed an additional protocol and has been acting as if the protocol were in force, pending its formal ratification in accordance with Iran´s constitutional requirements.

The most recent report deals with two interrelated but distinct sets of issues - the first related to the Agency's verification of Iran´s compliance with its legal obligations under its NPT safeguards agreement, and the second related to the Agency's monitoring of Iran's voluntary undertakings to suspend enrichment related and reprocessing activities, as confidence building measures requested by the Board.

Regarding the first set of issues, the Agency is making steady progress in understanding the nature and extent of Iran's nuclear programme. No additional undeclared activities on the part of Iran have come to light during this period. The Agency has gained access to requested locations. Iran has also provided new information in response to Agency requests, although in certain instances the process needs to be accelerated. While in some cases information has been provided promptly, in other cases information has regrettably been provided quite late.

As a result of the Agency´s investigations, some previously outstanding issues have reached the point where any further follow-up needed will be carried out as part of routine safeguards implementation.

Two issues remain central to understanding the extent and nature of Iran's nuclear programme: the origin of uranium contamination found at various locations in Iran, and the extent of Iran's efforts to import, manufacture and use centrifuges of both the P-1 and P-2 design. We have made some progress in understanding both issues, but additional investigation is needed.

With regard to confidence building measures that the Board requested be in place until certain conditions are met, as you are aware, Iran in June reversed some of its earlier decisions regarding the suspension of some enrichment related activities. I have continued to stress to Iran that, during this delicate phase while work is still in progress to verify its past nuclear programme, and in light of serious international concerns surrounding that programme, it should do its utmost to build the required confidence through the Agency.

Iran needs therefore, as the Board made it explicitly clear last week, to continue to accelerate its cooperation, pursuing a policy of maximum transparency and confidence building, so that we can bring the remaining outstanding issues to resolution within the next few months and provide assurance to the international community. This is clearly in the interest of both Iran and the international community and should, in my view, trigger a comprehensive dialogue among all interested parties on all the underlying issues. I would also urge those States from which components or materials may have originated to continue their prompt cooperation with the Agency - as this cooperation is indispensable to the Agency's ability to bring some of the important outstanding issues to closure.

Implementation of Safeguards in the Democratic People´s Republic of Korea
The situation in the Democratic People's Republic of Korea (DPRK) continues to pose a serious challenge to the nuclear non-proliferation regime. As I have reported repeatedly to the Board, since 1993 the Agency has been unable to implement fully its comprehensive NPT safeguards agreement with the DPRK. The Agency has never been allowed by the DPRK to verify the completeness and correctness of the DPRK's initial 1992 declaration - specifically, to verify that the DPRK has declared all the nuclear material that is subject to Agency safeguards under its NPT safeguards agreement. Since December 2002, the Agency has not been permitted to perform any verification activities in the DPRK and cannot therefore provide any level of assurance about the non-diversion of nuclear material.

The three rounds of the six-party talks so far, involving China, the DPRK, Japan, the Republic of Korea, Russia and the USA, are steps in the right direction. As I have stated before, the Secretariat remains ready to work with all parties towards a comprehensive settlement that would, inter alia, provide assurance to the international community that all nuclear activities in the DPRK are exclusively for peaceful purposes.

Application of Agency Safeguards in the Middle East
Pursuant to the mandate given to me by the General Conference, I have continued my consultations with the States of the Middle East region on the application of full scope safeguards to all nuclear activities in the Middle East, and on the development of model agreements. Once again, I regret to report that I have not been in a position to make progress on these fronts. However, in my continuing contacts with representatives from States of the Middle East region, as well as in my visits to the region, I have consistently sought to encourage new ideas and approaches that could help to move these important mandates forward.

The General Conference has also asked me to organize a forum on the relevance of the experience of other regions with existing nuclear-weapon-free zones - including confidence building and verification measures - for establishing such a zone in the region of the Middle East. Based on my consultations with States of the region, including during my recent visit to Israel, I intend to organize such a forum early next year, and further consultations are in progress towards that end.

Strengthening Nuclear Non-Proliferation
Our recent experience in verifying undeclared nuclear programmes has yielded a number of important lessons, which are worth noting here. Perhaps the most important lesson is that verification and diplomacy, used in conjunction, can be effective. When inspections are accompanied by adequate authority, aided by all available information, backed by a credible compliance mechanism, and supported by international consensus, the system works. The Iraq experience has demonstrated that inspections - while requiring time and patience - can be effective even when the country under inspection is providing less than active cooperation.

But our experience in Iraq before the first Gulf War, and our recent experience in Iran and Libya, have also highlighted the importance to verification of the "additional protocol", which provides the Agency with significant additional authority with regard to both information and physical access. Without the authority provided by the protocol, our ability to draw conclusions is mostly limited to the non-diversion of material already declared.

Perhaps the most disturbing lesson to emerge from our work in Iran and Libya is the existence of an extensive illicit market for the supply of nuclear items, which clearly thrived on demand. The relative ease with which a multinational illicit network could be set up and operated demonstrates clearly the inadequacy of the present export control system. The fact that so many companies and individuals could be involved - and that, in most cases, this could occur apparently without the knowledge of their own governments - clearly points to the inadequacy of national systems for oversight of sensitive equipment and technology. Moreover, international cooperation on export controls relies on informal arrangements that are not only non-binding, but also limited in membership, and many countries with growing industrial capacity are not included. And at present, export control information is not systematically shared with the Agency, nor even fully among the members of the Nuclear Suppliers Group (NSG).

The Agency´s investigation of the illicit supply network will take some time to complete, as we seek to ascertain whether any such items have been sought or acquired by any other States. I will continue to keep concerned States informed regarding any unauthorized transactions involving nuclear items, and will keep the Board informed of developments.

A related lesson involves the accessibility of nuclear technology. The technical barriers to mastering the essential steps of uranium enrichment - and to designing weapons - have eroded over time, which inevitably leads to the conclusion that the control of technology, in and of itself, is not a sufficient barrier against further proliferation.

Some estimates indicate that 40 countries or more now have the know-how to produce nuclear weapons, which means that if they have the required fissile material - HEU or plutonium - we are relying primarily on the continued good intentions of these countries, intentions which are in turn based on their sense of security or insecurity, and could therefore be subject to rapid change. Clearly, the margin of security this affords is thin, and worrisome.

All States should work together towards the elimination of the weapon-usable HEU now in existence, down-blending these stocks to LEU for use in civilian reactors to generate electricity - a "megatons to megawatts" approach that builds on the successful Russia-USA model. The manner in which to eliminate plutonium stocks is still an open question - whether to burn the plutonium in mixed oxide (MOX) fuel to generate electricity, or to mix it with high level radioactive waste for disposal in a vitrified form - but this too is a matter that should be resolved and acted upon with urgency.

In addition, efforts should be redoubled to commence negotiation at the Conference on Disarmament on a non-discriminatory and internationally verifiable global treaty to ban the production of weapon-usable fissile material - referred to as the Fissile Material (Cut-off) Treaty (FMCT). It is fast becoming a prerequisite to international security that the international community take steps to eliminate both access to and production of weapon-usable fissile material.

In addition to the steps I have already outlined - including exploring the feasibility of multilateral control over sensitive portions of the nuclear fuel cycle, supporting efforts to secure and protect nuclear material, and the conclusion of additional protocols by all States - I should stress the importance of working collectively to address the sense of insecurity and instability that persists in many countries and regions. It is instructive that nearly all nuclear proliferation concerns are in areas of longstanding tension.

Future Challenges in Nuclear Verification
Agency verification continues to be a critical component of the nuclear non-proliferation regime. As we look to the future, however, it is clear that the effectiveness of Agency verification will remain dependent on your active help and support: to provide us with the requisite authority by concluding comprehensive safeguards agreements and additional protocols; to provide us with all the information relevant to our work - as well as the financial resources needed to carry it out; to cooperate fully and transparently as we seek to understand nuclear programmes that have been concealed for years, and the illicit network that supported those programmes; to work together to strengthen the non-proliferation regime, in light of our experience of the past few years, in concert with efforts to strengthen regional security; and to build a global collective security system that does not depend on nuclear weapons.

As we proceed, it is important, in my view, to recognize both the value and the limitations of the Agency´s verification role. While the Secretariat can work effectively to bring to closure questions of compliance with legal and technical requirements, the long term value of these efforts can only be realized to the extent that they are followed by the necessary political dialogue among concerned States to address underlying issues of insecurity, and to build confidence and trust.

Source: International Atomic Energy Agency, http://www.iaea.org.

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