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IAEA Director General Dr Mohamed ElBaradei Statement to the IAEA Board of Governors, 17 June 2008

Statements of the Director General, IAEA Board of Governors, 2 June 2008, Vienna, Austria

Introductory Statement to the Board of Governors by IAEA Director General Dr. Mohamed ElBaradei

Our agenda for this meeting includes issues related to all areas of Agency activity - safety and security, technology and verification.

Annual Report

The Annual Report for 2007 summarizes the scope and the results of the Agency´s programme of work in 2007, the year in which we celebrated the 50th anniversary of the Agency´s creation. It reflects the Agency´s wide-ranging activities to assist Member States in the application of nuclear technologies for economic and social development, while ensuring that they are used in a safe, secure and peaceful manner. The Report highlights our efforts to help Member States address significant challenges such as energy shortages, food and water scarcity and inadequate health care. It notes the continuing efforts by the Agency and Member States to strengthen safety and security and highlights the need for a strengthened safeguards and non-proliferation system.

The Agency´s Technical Cooperation Programme

In 2007, the Technical Cooperation Fund (TCF) reached a record $83.6 million, while the rate of attainment reached a new high of 95.6%. However, the steady decline in the value of the US dollar has had a negative impact as a high proportion of our costs are in other currencies. As we move towards the next programming cycle, it is vital that Member States pay their contributions to the TCF on time and in full, and that resources for technical cooperation are sufficient, assured and predictable.

Key projects last year included regional collaboration in sickle cell disease control mechanisms in Africa, radiation induced mutation activities to improve crops in Asia and the Pacific, a joint scientific investigation on marine pollution in the Mediterranean, and improved agricultural practices in Latin America.

Human health remains a top priority for Member States and projects in this area are the largest single component of TC projects. Nuclear power is also a key area of activity for the Agency, which is expanding as a result of the increasing number of Member States which want to add nuclear power to their energy mix. The Agency´s focus is to ensure that these States have the prerequisite infrastructure in terms of safety, security and non-proliferation.

Nuclear Non-Proliferation

Events of recent years have placed the nuclear non-proliferation regime under stress on multiple fronts and made it clear that concrete steps to strengthen the regime are urgently required.

Status of Comprehensive Safeguards Agreements and Additional Protocols
To date, 88 States have additional protocols in force, while safeguards agreements are in force in 163 States. More than half of the States with safeguards agreements now also have additional protocols in force. This positive trend needs to be maintained as such protocols are central to the Agency´s ability to verify the absence of undeclared nuclear material and activities. I reiterate my call on all States that have not yet done so to bring additional protocols into force without delay. I should also mention that 30 non-nuclear-weapon States party to the Non-Proliferation Treaty (NPT) still do not have comprehensive safeguards agreements in force. For these States, the Agency cannot perform any safeguards activities or draw any safeguards conclusions.

Safeguards Implementation Report and Safeguards Statement for 2007
You have before you the Safeguards Implementation Report for 2007. As I just mentioned, the Agency implemented safeguards agreements in 163 States last year. For 47 States with both a comprehensive safeguards agreement and an additional protocol in force, the Agency was able to conclude that all nuclear material remained in peaceful activities. The Agency is working steadily to reach the same conclusion with respect to all other States with comprehensive safeguards agreements and additional protocols in force. The Agency is also currently implementing integrated safeguards in 26 States and aims to do so in all States with comprehensive safeguards agreements and additional protocols.

Implementation of Safeguards in the Democratic People´s Republic of Korea
As I previously reported to the Board, at the request of the Democratic People´s Republic of Korea (DPRK), the Agency has been verifying and monitoring the shutting down and sealing of the Yongbyon nuclear facilities since July 2007. We have also been able to observe and document the disabling work while conducting these monitoring activities. Just over one third of the spent fuel rods from the 5 MW(e) Experimental Nuclear Power Plant have been discharged from the reactor, all of which have been measured by the Agency. These fuel rods, as well as the two thirds remaining in the reactor core, are under Agency containment and surveillance. The nuclear material produced during the disabling activities at the Nuclear Fuel Fabrication Plant also remains under Agency containment and surveillance. The Agency has not been requested to participate in the disablement of these facilities. I am therefore not in a position to update you on progress made. I trust that the parties concerned will do so.

As I noted in my statement to the Board of 3 March 2008, funds to implement the ad hoc monitoring and verification arrangement in the DPRK were not foreseen in the Agency´s budget for 2008. Additional contributions have since been pledged by the European Union and the USA that will allow the Agency to carry out its monitoring and verification activities for the rest of 2008.

In my statement to the Board in July 2003, I stated that, until the legal status of the DPRK vis-à-vis the NPT has been clarified, the Agency´s safeguards responsibilities towards the DPRK remain uncertain. If the DPRK is considered to still be a party to the NPT, then its comprehensive NPT safeguards agreement remains in force, its nuclear material and facilities should be declared to the Agency and the Agency should resume its verification of the correctness and completeness of the DPRK's declarations. However, if the DPRK is considered as no longer being party to the NPT, the Agency´s INFCIRC/66 safeguards agreement with the DPRK would have to be implemented. I have yet to receive guidance from the States Parties to the NPT. It is important, given recent developments, that the Agency receives such guidance at the earliest opportunity.

Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran
You have before you my report on the implementation of safeguards in the Islamic Republic of Iran. As you can see from the report, the Agency has been able to continue to verify the non-diversion of declared nuclear material in Iran.

However, it is regrettable that we have not made the progress we had hoped for with respect to the one remaining major issue, namely clarification of the cluster of allegations and Secretariat questions relevant to possible military dimensions to Iran´s nuclear programme. The so-called alleged studies remain a matter of serious concern. This issue is among those which the Security Council directed the Agency to clarify. Following an initial period during which Iran was reluctant to fully discuss this issue, Iran finally agreed to address it. Iran maintains that it has never had a nuclear weapons programme and that the documents related to these alleged studies are "forged" or "fabricated". In this context, I should note that the Agency received much of the information concerning the alleged studies only in electronic form and it was unfortunately not authorized to provide copies to Iran. Release of documents that are not sensitive from the proliferation perspective, including those purportedly showing interconnections between the three categories of alleged studies, would clearly help the Agency in its investigations.

The Secretariat is continuing to assess the information and explanations provided by Iran, including additional information received on 23 May. However, Iran has not yet agreed to implement all the transparency measures required to clarify this cluster of allegations and questions. Iran has not provided the Agency with all the access to documents and to individuals requested by the Secretariat, nor has Iran provided the substantive explanations required to support its statements. Such clarifications are critical to an assessment of the nature of Iran´s past and present nuclear programme. The Agency understands that Iran may have additional information, in particular on high explosives testing and missile related activities, which could shed more light on the nature of the alleged activities. Meanwhile, the Agency will continue to try to clarify the authenticity of the documentation related to the alleged studies and the related substantive issues.

It has now been more than five years since the Agency began this intensive phase of verification of Iran´s nuclear programme. While substantial progress has been made in clarifying many of its aspects, particularly with regard to Iran´s enrichment programme, it is essential that the Agency be able to reach a conclusion regarding the nature of Iran´s programme at the earliest possible date. This depends primarily on Iran demonstrating the necessary transparency and providing full disclosure. I again urge Iran to be fully forthcoming in this regard.

To put things into perspective, let me emphasize that the Agency currently has no information - apart from the uranium metal document - on the actual design or manufacture by Iran of nuclear material components, or of other key components, of a nuclear weapon. Likewise, the Agency has not seen indications of the actual use of nuclear material in connection with the alleged studies.

Aside from clarifying all the questions and allegations mentioned in the report, Iran needs to implement the Additional Protocol to enable the Agency to confirm the absence of undeclared nuclear material and activities. Assurances by the Agency about Iran´s past and current nuclear activities are key to restoring confidence in the nature of Iran´s nuclear programme. I should clarify, however, that while the Agency can verify and provide assurances about Iran´s past and present nuclear activities, concerns about Iran´s future intentions go well beyond verification and require agreement on confidence and security-building measures. To that end, I hope that the necessary environment can be created, without further delay, for a substantive and comprehensive dialogue between Iran and the relevant parties.

Implementation of Safeguards in the Socialist People´s Libyan Arab Jamahiriya
Following Libya´s disclosure of its undeclared nuclear activities in December 2003, the Agency has continued its efforts to verify the correctness and completeness of Libya´s declarations about its nuclear programme, including past undeclared activities.

Since my last report on 30 August 2004, Libya has continued to be transparent and to provide the Agency unrestricted access, beyond what is required under its comprehensive safeguards agreement and the Additional Protocol, to those locations, information and individuals deemed necessary by the Agency. Libya has recently provided additional information about the timeline of some of its past undeclared activities, which has helped the Agency gain a full picture of Libya´s past and present nuclear programme and will enable the Agency to resume verification in Libya on a routine basis. A detailed report on safeguards implementation in Libya will be submitted to the Board.

Implementation of Safeguards in the Syrian Arab Republic
In April of this year, the Agency was provided with information claiming that an installation destroyed by Israel in Syria last September was a nuclear reactor. According to this information, the reactor was not yet operational and no nuclear material had been introduced into it.

It is deeply regrettable that information concerning this installation was not provided to the Agency in a timely manner and that force was resorted to unilaterally before the Agency was given an opportunity to establish the facts, in accordance with its responsibilities under the NPT and Syria´s Safeguards Agreement. I should like to remind everybody that NPT States Parties have unanimously reaffirmed that the Agency is the competent authority responsible for verifying and assuring, in accordance with its Statute and the Agency´s safeguards system, compliance by States with their safeguards agreements.

Nonetheless, I should emphasize that Syria, like all States with comprehensive safeguards agreements, has an obligation to report the planning and construction of any nuclear facility to the Agency. We are therefore treating this information with the seriousness it deserves and have been in discussions with the Syrian authorities since this information was provided to the Agency with a view to arranging a visit to Syria at an early date to verify, to the extent possible at this stage, the veracity of the information available to the Agency. It has now been agreed that an Agency team will visit Syria during the period 22-24 June. I look forward to Syria´s full cooperation in this matter.

Nuclear Applications

Food Security
Soaring global food prices have increased concern about food security and given additional importance to the Agency´s use of nuclear techniques to help produce novel crop varieties that thrive under harsh conditions. In Kenya, for example, a variety of wheat introduced by the Agency is yielding 11% more, under drought conditions, than the best varieties available until now. The importance of this area of the Agency´s work is likely to increase in the coming years.

ITER
The IAEA has cooperated with the International Thermonuclear Experimental Reactor (ITER) Project - the largest endeavour in the area of nuclear fusion - since its inception. The ITER International Fusion Energy Organization has expressed the wish to enter into a formal cooperation agreement with the IAEA to exchange information on scientific and technological aspects of fusion energy. A draft agreement has been prepared for the consideration of the Board.

Cancer Treatment
As you are aware, PACT is becoming well recognized in the area of cancer prevention and treatment. Last month, the President of the United Republic of Tanzania accepted the donation of a radiotherapy machine, made through PACT, by MDS Nordion, a Canadian company. The World Health Organization and the Agency are actively pursuing efforts towards a joint programme on cancer. I hope to be able to report to you soon on the nature of this welcome cooperation.

Nuclear Safety and Security

Convention on Nuclear Safety
In April, the Agency hosted the 4th Review Meeting of Contracting Parties to the Convention on Nuclear Safety. As of today, there are 61 Contracting Parties to the Convention, including all countries with operating nuclear power plants. I urge every Member State considering the use of nuclear power to become party to the Convention as soon as possible. I note that many participants in the Review Meeting expressed appreciation for the value of the Agency´s safety standards and safety review services and encouraged more countries to make use of them. The Review Meeting noted that, although progress is being made in ensuring that a nuclear safety culture takes root throughout the world, maintaining adequate staffing and competence levels for nuclear safety remains a significant challenge for operators and regulators.

Emergency Planning
The Agency has been coordinating a major test of radiation emergency plans, based on a simulated accident at the Laguna Verde nuclear power plant in Mexico, which will take place in July 2008. This two-day exercise is being carried out in cooperation with more than 60 Member States and 10 international organizations in order to test national and international preparedness to respond to a nuclear or radiological emergency. I encourage Member States to actively participate.

Management Issues

AIPS and IPSAS
Regrettably, I must return to a subject I raised at the March Board - the introduction of an Agency-wide Information System for Programme Support (AIPS) and the International Public Sector Accounting Standards (IPSAS) - as there have been few positive developments since then.

In June last year, the Board took the decision to introduce IPSAS in 2010 - a move strongly endorsed by the External Auditor and in keeping with a UN system-wide initiative to adopt these standards. As we all acknowledge, they will bring greater transparency and improved internal control to the Agency´s financial operations.

Closely linked to the implementation of IPSAS, the Secretariat also put forward proposals last year for introducing, in stages, an enterprise resource planning system, which we call AIPS. The arguments for doing so are compelling and widely accepted. Such a system is the cornerstone for greater efficiency in the delivery of all major programmes - from technical cooperation to safeguards. Independent consultants estimated the efficiency gains from a fully implemented AIPS at nearly €6 million per year. Moreover, your own External Auditor stated in his most recent report that the introduction of the first stage of AIPS - upgrading our financial and procurement systems - is "indispensable" if the Agency is to introduce IPSAS in an effective manner.

There is clearly strong support for both AIPS and IPSAS, but funding - despite prolonged and repeated efforts by the Secretariat - has not been forthcoming. This is very discouraging. Not a single Member State, to my knowledge, has questioned the need to introduce AIPS and IPSAS, but only a few appear ready to provide the necessary funding. You ask us to be ever more efficient and transparent, and yet appear to be unwilling to give us the tools essential to doing so. I should be very clear - if adequate AIPS funding is not secured very soon, not only would it not be possible to introduce IPSAS by 2010, there would also be further delay in realising the efficiency gains which we all seek and which you have been asking for.

Budget

Regarding the Agency´s funding, I am concerned by the absence of agreement among Member States on the need to apply programme support costs to extrabudgetary resources. This again was a recommendation by the External Auditor. Throughout the UN system as a whole, programme support costs are the norm. Yet for many years, the Agency has put up with a system in which it has had to support extrabudgetary projects from the regular budget, at the expense of its ability to effectively implement the regular budget activities and core projects funded through the TCF. I again need to make very clear that, without programme support costs, the Agency will not be able effectively to implement and manage the increasing number of projects funded by extrabudgetary resources. We could even find ourselves in the position of having to decline extrabudgetary funding, which would be a major setback for everyone.

Commission of Eminent Persons

You have received the Report of the Commission of Eminent Persons on the Future of the Agency - a Commission which I established last year to reflect upon the nature and scope of the Agency´s programme up to 2020 and beyond. I am deeply grateful to all the very distinguished members of the panel, under the inspiring and able leadership of President Zedillo, for agreeing to serve. I am also grateful to President Zedillo for taking the time to come here today to present the report to you.

The Report is a compelling piece of work - thoughtful and profound. The Commission makes many recommendations, some of them bold and far-reaching, concerning all aspects of the Agency´s work. Not all of the recommendations will find favour with all Member States. But I believe the Report succinctly encapsulates the challenges and opportunities facing the Agency in both the short and medium term. I trust that your governments will give the recommendations the serious consideration they deserve and embark in the coming months on a structured discussion of the way ahead. I intend to include an item on the agenda of the September Board to launch such a process. Decisions on the future of the Agency need to be made urgently if we are to continue to effectively fulfil our mandate: Atoms for Peace. As the Commission itself stresses, "Now is the time to choose."

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

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