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Statements of the Director General

14 June 2004 | Vienna, Austria
IAEA Board of Governors

Introductory Statement to the Board of Governors

by IAEA Director General Dr. Mohamed ElBaradei

Our agenda for this meeting covers a broad range of issues, including the Agency’s Annual Report, the Technical Cooperation Report, the Safeguards Implementation Report, the report of the Programme and Budget Committee, and a number of specific nuclear technology, safety and verification issues. I will briefly address these and other issues of interest to the Board.

Annual Report

The Annual Report serves as the Board’s report to the General Conference, and as the Agency’s report to the United Nations and the general public. The draft report before you summarizes the scope and the results of the Agency’s programme of work in 2003. In particular, it highlights the role of the Agency in transferring nuclear science and technology to Member States to promote social and economic development, our verification role in support of the non-proliferation regime, and our efforts to enhance nuclear safety and security.

The Agency´s Technical Cooperation Programme

You have before you the Technical Cooperation (TC) Report for 2003. The Agency’s TC programme continues to be a principal mechanism for implementing the Agency’s basic mission: "Atoms for Peace". The report reviews the achievements of the TC programme in the past year. Despite factors that hampered programme delivery — including the outbreak of SARS in the East Asia and Pacific region, and security related issues in a number of regions — programme implementation in 2003, measured in financial terms, reached an all-time high of $76.1 million. This naturally has continued to help developing countries in many areas. Nuclear medicine and radiotherapy projects increased the availability of cancer diagnosis and treatment and improved the radiation protection of patients and technicians. Crop production, for both local consumption and export, was increased through the use of the sterile insect technique, as well as through improved varieties of fruits and legumes resistant to disease and drought. Progress in identifying water resources and mapping aquifer flows was made using isotope hydrology methods. And we continued to make progress in upgrading radiation protection infrastructures in all regions.

TC Programme Management
Country programme frameworks (CPFs), used as planning tools to design TC projects within the context of national priorities, are now being applied in 89 countries. Thematic plans — which use the results of field experience to highlight particular technical areas in which a nuclear technology could have a significant impact — were prepared or are under way on the use of medical imaging technology in diagnostic radiology, and the use of nuclear analytical techniques in managing air pollution. This will make a total of 14 thematic plans in place.

The Agency expanded its partnerships with other United Nations system organizations, international financial institutions, regional organizations and other relevant bodies. For example, the Agency last year entered into a partnership with the Global Environment Facility to develop a framework for sustainable management of the Nubian Aquifer system, using isotope hydrology. This will enable the countries that use the aquifer — Chad, Egypt, the Socialist People’s Libyan Arab Jamahiriya (Libya) and Sudan — to develop an effective groundwater management plan.

The Secretariat continues to work with Member States to mobilize extrabudgetary resources. Extrabudgetary contributions by donor countries increased to about $6.9 million in 2003, covering projects that ranged from radiotherapy and agriculture to nuclear safety and security. In addition, cost-sharing by recipient countries increased to $4.3 million last year. For example: Jordan contributed $300 000 towards a sterile insect technique project to eliminate the Mediterranean Fruit Fly; Nigeria contributed $400 000 towards the installation and commissioning of a tandem accelerator; and Angola, Bolivia, Colombia, El Salvador, Guatemala, Malaysia, Nicaragua and the United Republic of Tanzania all made substantial contributions towards either establishing or enhancing facilities for radiotherapy or nuclear medicine.

Programme of Action for Cancer Therapy
As I mentioned in March, the Secretariat has been working on a new approach to raise public awareness of the impending crisis of cancer in developing countries. As presented last year in an Agency booklet entitled "A Silent Crisis: Cancer Treatment in Developing Countries", a large deficit exists in equipment and staff in developing countries that prevents many patients from receiving appropriate radiotherapy treatment. The report before you outlines an approach — referred to as Programme of Action for Cancer Therapy (PACT) — which seeks to increase our capacity to assist Member States in providing cancer treatment and care, working in conjunction with the World Health Organization and others, mainly by expanding our fundraising efforts with non-traditional donors.

This is the first effort of this sort by the Agency. With your support and the cooperation and assistance of others, we will endeavour to make it a success on which we can build further.

TC Programme Funding
Let me turn briefly to a number of other issues related to TC programme funding.

You will recall that the TC programme received considerable attention during the Board’s discussion of the budget package proposal agreed on last year. Among other considerations, the Board agreed to suspend Assessed Programme Costs (APCs) for 2004, and agreed further that in June, the Board would decide on the future of APCs. An open-ended working group was convened to reach consensus on this issue, led by the Governor from India. The report of the working group before you presents the consensus proposal arrived at — which, I am pleased to note, continues to recognize the shared financial responsibility of both recipient and donor States.

An informal working group has also been meeting on the Rate of Attainment mechanism, focusing on ways to ensure that Technical Cooperation Fund (TCF) resources are assured, sufficient and predictable.

A third question relates to the harmonization of the TC programme cycle with that of the regular programme and budget. The Secretariat has prepared a document that reviews the implications of harmonizing the two cycles. Based on last year’s budget package agreement, the Board is to take a decision in September of this year on whether to recommend harmonizing the cycles in 2008.

As the Board considers these issues, we should continue to remember that the overall objective is adequate and reliable funding for the TC programme. As you will recall, the situation of the TCF was a matter of some concern at our March Board meeting. I am pleased to report that, since that time, a number of Member States have made contributions to the 2003 TCF, bringing the rate of attainment for 2003 to 86.8% — the highest percentage ever achieved, although below the target rate of 90% agreed for that year. This is a positive development — offset, however, by the fact that late payments, particularly those involving large contributions, lead to programme uncertainty and have an impact on operational efficiency. I would reiterate that, in order to facilitate efficient and effective budgeting and programme delivery, TC funding must be timely, predictable and assured.

TC Programme Oversight
In the past year, a number of reviews of the TC programme and its management have been undertaken, by both internal and external oversight bodies. Recommendations have been made both regarding improvements to the delivery of the TC programme and on how to increase the effectiveness and efficiency of TC programme management.

The Agency Office of Internal Oversight Services (OIOS) report on its review of TC processes and workload is before you. It notes the initiatives already taken to improve TC programme management and the good track record on self-assessment. Based on the potential for improvements noted in this review, we are developing a framework for implementing a change initiative covering the next 12 months. The review concluded that TC needed a limited increase in human resources, but that any such increase should also consider ongoing corporate restructuring efforts, the potential use of outsourcing and fluctuations in the TC project portfolio. The review also suggested a flatter and more consolidated organizational structure for the Department of Technical Cooperation. I am closely examining these recommendations with a view to continuing to improve performance.

Nuclear Technology

Action Plan on Decommissioning
You have before you for approval a draft action plan on the decommissioning of nuclear facilities, which incorporates the recommendations from the Agency´s conference on safe decommissioning for nuclear activities held in 2002 in Berlin. The proposed plan would, inter alia: strengthen the planning, management and organization of decommissioning projects; enhance the sharing of information on different national practices; and highlight the essential information to be retained for deferred decommissioning projects. The plan also aims to improve methods of safety assessment and stimulate harmonized safety requirements related to decommissioning.

Status of INPRO
The Agency´s International Project on Innovative Nuclear Reactors and Fuel Cycles (INPRO) has begun Phase 1B. Six case studies by INPRO member countries are under way to provide feedback on the effectiveness of the INPRO methodology for assessing innovative energy systems — in Argentina, China, the Czech Republic, India, the Republic of Korea and the Russian Federation. Experts are carrying out eight additional studies to cover technologies not addressed in the national studies. Later this year, once the results have been received and the INPRO methodology updated accordingly, this updated methodology will be made available for the assessment of current and future innovative reactor and fuel cycle systems.

Nuclear Safety and Security

Nuclear Installation Safety
Although substantial progress has been made in improving the safe operational performance of nuclear installations over the past years, a number of issues continue to be of concern. As nuclear power technology continues to spread and more countries develop indigenous plant designs, the resultant diversification highlights the importance of: ensuring quality; managing and sharing knowledge; utilizing common, internationally accepted safety standards; balancing the needs of safety and security; promoting cooperation and sharing of experience among regulatory authorities; and adapting the practices of international vendors and contractors to the diverse cultures of countries with new nuclear programmes.

In addition, events continue to be reported with root causes that call into question the effectiveness of safety at nuclear facilities. Analyses of these events often reveal operational practices that contributed to questionable decisions being taken, and sometimes point to the need for improvements within both the regulatory authorities and the operating organizations. And a number of issues related to the long term operation of nuclear facilities — such as equipment ageing concerns — require further attention.

The Agency continues to work towards the development of an international consensus on sound approaches for dealing with these issues. To that end, we will hold a major conference in October in Beijing, focused on ‘Continuous Improvement of Nuclear Safety in a Changing World’. I welcome wide participation in this conference, and look forward to its findings and recommendations.

Transport Safety
As called for in the Action Plan approved by the Board in March, the Secretariat has completed its revision of its Regulations for the Safe Transport of Radioactive Material, and the document is before you for approval.

Other issues covered in the Plan are being actively addressed. The denial of shipments of radioactive material continues to be of significant concern — particularly when shipments involve radionuclides intended for use in medical activities. Within the next few months, we expect to have recommendations on how to minimize these denials.

While on the topic of transport safety, I should note that the Agency in April completed a comprehensive Transport Safety Assessment Service (TranSAS) mission to France, with particular attention paid to maritime and air transport. The final report is being completed and will be published in the next few months. I continue to urge all countries involved in the transport of nuclear and radioactive materials to take advantage of this Agency service.

Emergency Preparedness and Response
The 2002 General Conference asked the Secretariat to seek ways to facilitate cooperation among Parties to the Early Notification and Assistance Conventions. Last year’s General Conference supported the Secretariat’s intention to develop an action plan to enhance the international emergency preparedness and response system, working with the Competent Authorities for these Conventions. The resulting action plan is before you for approval.

Global Threat Reduction Initiative
While on the topic of nuclear safety and security, I would note that, last month in Vienna, US Secretary of Energy Spencer Abraham announced an expanded ‘Global Threat Reduction Initiative’, with the objective of securing weapons-usable nuclear material around the world. We are in dialogue with the US Department of Energy to see how this initiative can support the Agency’s activities in this field. I will naturally keep the Board informed.

Nuclear Verification

The Safeguards Implementation Report and Safeguards Statement for 2003
The Safeguards Implementation Report (SIR) for 2003 is also before you. 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 the Islamic Republic of Iran, both of which had been engaged in undeclared nuclear activities, the Agency was not able to draw this conclusion.

Implementation of Safeguards in the Democratic People’s Republic of Korea
Since 31 December 2002, when on-site verification activities were terminated at the request of the Democratic People’s Republic of Korea (DPRK), the Agency has been unable to draw any conclusions regarding the DPRK’s nuclear activities. Unfortunately, I have no new developments to report.

Implementation of Safeguards in the Islamic Republic of Iran
You have before you a detailed progress report on the Agency’s verification work in Iran. I will limit my remarks to a few key observations.

First, the Agency is making steady progress in understanding the nature and extent of Iran’s nuclear programme and in resolving most aspects of Iran’s uranium conversion and laser enrichment activities. Iran has continued to act as if its additional protocol were in force and in May provided its initial declarations. With Iran’s cooperation, the Agency has had access to all requested locations. We have also made progress on verifying Iran’s suspension of enrichment related and reprocessing activities, although the suspension is not yet comprehensive due to the continued production of centrifuge components at some workshops.

While a number of issues remain open regarding various aspects of Iran’s nuclear programme, the central question is whether Iran’s uranium enrichment activities have been fully declared. Two aspects relevant to this question are still being investigated.

The first relates to the origin of the particles of high enriched and low enriched uranium contamination found at various locations related to uranium enrichment in Iran. The information provided by Iran in April 2004 — information requested since August 2003 — has not been sufficient to resolve this complex matter. Iran should make every effort to provide additional relevant information, particularly about the origin of the components in question, and explanations about the presence of a cluster of 36% uranium-235 particles at one location.

Resolving the issue of contamination, however, requires the cooperation of other States from which the contaminated equipment is believed to have originated. I would call on those States to make every effort to help us resolve these issues. I should clarify, in this regard, that our mention in some of our reports of ‘supplier States’, or the involvement of other States in different forms, does not imply that the transactions involved took place with the knowledge of the respective governments.

Second, we need to gain a fuller understanding of the extent of Iran’s efforts to import, manufacture and use centrifuges of the P-2 design. As mentioned in my report, the information provided by Iran with regard to the P-2 centrifuge programme, after repeated requests, has been changing and at times contradictory. Let me illustrate.

In Iran’s October 2003 declaration, the P-2 centrifuge programme was not mentioned. Then, in January 2004, Iran acknowledged that it had received P-2 drawings from a foreign intermediary. At that time, Iranian authorities stated that Iran had not obtained any P-2 centrifuges, or components thereof, from abroad, and also stated that the P-2 programme had been only for small scale R&D. In April, however, Iran informed the Agency that it had, in fact, imported some components relevant to its P-2 enrichment activities — and in late May acknowledged specifically that these components were magnets relevant to P-2 centrifuges, and that, in 2002, it had attempted to obtain thousands of these magnets.

At the time of issuance of the report before you, additional information on the P-2 centrifuge issue was being provided by Iran, which we are currently assessing. We have also taken environmental samples relevant to this issue, which are currently undergoing analysis. I do hope that this information will help us in understanding and clarifying all issues relevant to the P-2 programme.

Clearly, this pattern of engagement on the part of Iran is less than satisfactory if it wishes to build confidence in the international community that Iran has indeed revealed the full extent of its nuclear programme. After a year of difficulties encountered by the inspectors, Iran needs to be proactive and fully transparent.

It has been almost two years since Iran’s undeclared nuclear programme came to the Agency’s attention. It is essential for the integrity and credibility of the inspection process that we are able to bring these issues to a close within the next few months, and provide the international community with the assurances it urgently seeks regarding Iran’s nuclear activities. In that regard, the prompt cooperation of Iran is essential. Moreover, the cooperation of all other countries involved is also key to our ability to resolve some of these outstanding issues.

Implementation of Safeguards in the Socialist People’s Libyan Arab Jamahiriya
You also have before you a report on the Agency’s verification activities with respect to Libya. Last December, Libya announced its decision to eliminate all materials, equipment and programmes leading to the production of internationally proscribed weapons — including nuclear weapons. In the months since, we have been working closely with the Libyan authorities to gain a complete picture of its nuclear programme.

The report before you summarizes the details of those efforts. Libya has proactively cooperated with the Agency by providing information and prompt access to all locations requested. We are making good progress in understanding Libya’s past nuclear activities but some aspects still need to be assessed, and it is important that Libya provide the necessary information to enable that assessment to be made. Examples of these issues include: confirmation of the origin of the uranium hexafluoride (UF6) Libya received in 2000 and 2001; verification of Libya’s planned capabilities for UF6 production; and understanding the source of high enriched and low enriched uranium contamination on gas centrifuge equipment in Libya.

Implementation of Verification Activities in Iraq
The recent UN Security Council resolution 1546, inter alia, reaffirmed the intention of the Council to revisit the mandate of the Agency in Iraq. It has now been more than a year since our inspectors were last in Iraq. I sincerely hope that the Security Council will soon provide the long-awaited guidance on the future of this mandate. Given the current level of instability in the country, and Iraq’s past nuclear weapons related activities and capabilities, it is important and urgent that a credible verification and monitoring system be reinstalled.

Status of Safeguards Agreements and Additional Protocols
Our goal continues to be the ability to provide credible, comprehensive assurances regarding all States that have made non-proliferation commitments. This requires that States have both a comprehensive safeguards agreement and an additional protocol in force.

The Board has on its current agenda the approval of additional protocols for Albania, Cameroon and Morocco. On 30 April, additional protocols entered into force for the then 15 States of the European Union and for Euratom. Following the recent entry into force of additional protocols with Cuba, El Salvador, Ghana and Uruguay, the Agency now implements additional protocols in 60 States.

Although this status represents a marked improvement over the past year, more needs to be done. Forty-three States party to the NPT continue to have no safeguards agreements in force, and 129 do not have an additional protocol in force or otherwise applied. I reiterate my call to all States that have not done so to conclude and bring into force their respective safeguards agreements and additional protocols.

Integrated Safeguards
Work continues on the implementation of integrated safeguards — limited, of course, to those States that have in force both a comprehensive safeguards agreement and an additional protocol. I am pleased to note that the Secretariat was recently able to reach all conclusions needed for the implementation of integrated safeguards in Japan — the State with the largest nuclear programme subject to Agency safeguards. The comprehensive nature of this work has enabled the Agency to enhance the effectiveness of safeguards in Japan and will result in reducing the frequency of its inspections at a significant number of Japanese facilities.

Safeguards Reviews
Two evaluations of the Agency safeguards programme have recently been completed — one by external evaluators, coordinated by OIOS, and the other by the Standing Advisory Group on Safeguards Implementation. Taken together, these reviews covered the full range of management and technical issues, including operational practices and safeguards criteria. While we are still studying the results of these reviews, I would note that the analyses were overall quite positive regarding the effectiveness and efficiency of the safeguards programme, and provided a broad range of recommendations. After reviewing these recommendations, I intend to report to the November Board.

Report of the Programme and Budget Committee

The Board has before it the report of the Programme and Budget Committee (PBC). The discussions at the PBC last month were relatively straightforward, owing in part to the agreement reached last year on the budget ‘package proposal’. I will make just a few remarks on the documents before you.

With regard to the Agency’s Accounts and the External Auditor’s Report, I would like to reiterate my appreciation of the work over the past years by our External Auditor, Sir John Bourn, the Comptroller and Auditor General of the United Kingdom. As he has noted, the large majority of his recommendations have been implemented, with positive results. I look forward to an equally constructive relationship with his successor, Mr. Norbert Hauser, Vice-President of the German Supreme Audit Institution.

On the Programme Performance Report for 2002–2003, we appreciate the suggestions made by Member States to improve the assessment process and the report format. This was our first such report — and the first within the United Nations system — to use a full results based assessment of outcomes achieved in Member States, using pre-established performance indicators.

The Draft Budget Update for 2005 adheres to the financial envelope set in last year’s ‘package proposal’, adjusted for price changes calculated according to our established methodologies. Looking ahead to the 2006–2007 biennium, the Secretariat has proposed strategic issues to be considered and programme changes to be made.

Finally, let me note the importance of measures to enhance the security of the Vienna International Centre and the urgency of implementing those measures. Similar to the United Nations headquarters in New York, the Secretariat intends to request a supplementary appropriation when the details of these necessary security enhancements become clearer — most likely by the September meeting of the Board.

Expert Group

You may recall that at the March meeting of the Board, I said that it was clear that the wide dissemination of the most proliferation-sensitive parts of the nuclear fuel cycle — the production of new fuel, the processing of weapon-usable material, and the disposal of spent fuel and radioactive waste — could be the ‘Achilles’ heel’ of the nuclear proliferation regime and that it was important to tighten control over these operations, which could be done by bringing them under some form of multilateral control. I also said that I was aware that this is a complex issue and that a variety of views exist on the feasibility or possible modalities of such a multilateral approach, but that we owe it to ourselves to examine all possible options.

I have now appointed an international expert group to consider possible multinational approaches to the front and back ends of the nuclear fuel cycle. The mandate of this group is to identify issues and possible options in this regard. I intend to submit a report on their findings to the March Board next year. I have asked Mr. Bruno Pellaud, former Deputy Director General and Head of the Department of Safeguards, to chair this group.

Scientific Forum

I would also like to inform the Board that, at this year’s General Conference, our Scientific Forum will focus on important issues and challenges related to the nuclear fuel cycle, including: advanced reactor and fuel cycle design, developments in spent fuel management, reprocessing, and waste treatment; progress in research reactor utilization, including conversion of facilities from using high enriched to low enriched uranium; and key issues requiring further R&D.

Conclusion

The Secretariat remains committed to the efficient and effective implementation of programmes that reflect the priorities of all our Member States. Our success will naturally continue to depend on your guidance and support.

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