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Statements of the Director General

20 September 2004 | Vienna, Austria
IAEA General Conference

Statement to the Forty-eighth Regular Session of the IAEA General Conference 2004

by IAEA Director General Dr. Mohamed ElBaradei

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.

Nuclear Power Technology

Nuclear Power: Current Status and Outlook
This year marks the 50th anniversary of civilian nuclear power. With 439 power reactors worldwide, nuclear energy continues to account for about 16% of the world´s electricity production, keeping pace with the steady growth in the global electricity market. China, Japan, the Russian Federation and Ukraine each added one new nuclear power plant to the grid this year, and Canada restarted a third unit that had been shut down — while in the United Kingdom, four small (50 megawatt) units were retired.

Near term growth in nuclear capacity remains centred in Asia and Eastern Europe — due to a combination of factors, including the rise in electricity demand, the existence of a well developed industrial infrastructure, and the lack of indigenous alternatives in some countries. Of the 26 units now under construction, 15 are located in India, Japan, the Republic of Korea, and China (including Taiwan, China). Seven units are under construction in Romania, the Russian Federation, Slovakia and Ukraine. And a Finnish utility has signed a contract for a new reactor and begun site preparation.

In some countries, the more immediate focus is on power upgrades, restarts of previously shut down reactors, and licence extensions. These trends reflect sustained improvements in nuclear plant availability and safety performance, which have in turn made plant operating costs relatively low and stable. In the United States of America, 26 nuclear plants have now received 20-year licence extensions, and 50 more have signaled their intention to pursue licence extension. Russia is continuing its programme to extend licences at 11 nuclear power plants, and Bulgaria has issued eight- and ten-year extensions for two plants.

Overall projections for the longer term future of nuclear power vary widely, depending on what assumptions are used. Factors that shape the current debate include the growth in electricity demand, the emphasis on combating climate change, and the way in which a given nation balances the risks associated with a nuclear energy accident against other risks — such as air pollution or energy dependence. Clearly, not every country shares the view that improved economics and safety performance warrant a revival of nuclear power. These are matters of complexity and legitimate debate, and it is important for the IAEA to provide comprehensible, accurate information to ensure that the benefits and risks of nuclear technology are clearly and fairly understood.

Advances in the Nuclear Fuel Cycle
A factor key to the future of nuclear power is the degree to which advances are implemented in evolutionary and innovative reactor and fuel cycle technologies, to address safety, waste and proliferation concerns, as well as economic competitiveness. More than 20 Member States are currently involved in national and international projects to develop advanced and innovative reactor and fuel cycle designs, ranging from water reactors to liquid metal cooled fast reactors to accelerator driven systems. A number of the more innovative designs focus on smaller reactors (up to 700 megawatts) that could incorporate standardized, modular units which could be built in factories, leading to faster and less complex onsite installation — an approach that could lower construction costs and would potentially have greater suitability for the small electrical grids of some developing countries.

The Agency´s International Project on Innovative Nuclear Reactors and Fuel Cycles (INPRO) has now completed 14 case studies in seven countries, to test and provide feedback on the methodology published last year for assessing innovative nuclear energy systems. Results from these case studies are being analysed by INPRO´s International Coordinating Group, and in November we will publish the final report on INPRO´s assessment methodology. In December, the INPRO Steering Committee will begin to examine potential directions for Phase II of the project, such as coordinated R&D initiatives that would build on INPRO results to date.

Nuclear Production of Hydrogen
A number of Member States have expressed interest in the use of nuclear power to produce hydrogen. The use of hydrogen fuel cells in transportation has been heralded as a means of improving air quality. Major nuclear power research initiatives for hydrogen production are currently under way in China, Europe, Japan, the Republic of Korea and the USA. These initiatives are looking at ways to produce hydrogen without carbon emissions, using thermochemical reactions driven by high temperatures, generated with innovative nuclear technologies in ways that would achieve greater energy efficiency.

Nuclear Desalination
The Agency is also supporting Member State efforts to explore desalination of seawater using nuclear energy. The multi-stage flash desalination plant at Kalpakkam, India, is in an advanced stage of construction. The Republic of Korea has launched construction of the SMART design with a one-fifth scale power and desalination plant. Indonesia and Tunisia have completed pre-feasibility studies of nuclear desalination plants at specific sites and prepared reports for submission to their Governments.

Plant Life Management and Decommissioning
As the world´s existing nuclear power plants continue to age, the Agency has devoted increasing attention to assisting Member States with licence extension and decommissioning. The periodic safety review (PSR) is a tool used widely to confirm safety performance in relation to the licensing basis, and we are now developing plant life management guidelines, based on the PSR and licensing renewal practices, that can help in making decisions on plant life management. To help operators assess ageing factors, such as irradiation embrittlement of reactor pressure vessels, we have developed an international database on reactor pressure vessel materials, and we plan to expand this approach to primary piping systems, steam generator materials and concrete containment buildings.

The increasing number of facilities entering decommissioning has raised national policy and strategy issues for many Member States. In the United Kingdom, for example, a Nuclear Decommissioning Authority has been created to ensure that the civil nuclear legacy is properly managed. The Agency has established a technical expert group to focus on decommissioning issues important to Member States. At its June meeting, the Board of Governors approved an action plan that will focus the Agency’s decommissioning programme on a number of these areas, including waste management, safety, preservation of important information and the decommissioning of research reactors — which in many cases are in countries that lack the infrastructure to support decommissioning.

Addressing Waste and Fuel Cycle Concerns
Regarding the long term management of spent fuel and radioactive waste, progress continues to be slow, but steady. At the International Conference on Geological Repositories last December in Stockholm, experts agreed that the majority of technological issues have been satisfactorily addressed, but that social issues — such as public acceptance and political endorsement — are still problematic. Finland in particular has set a good example of cooperation among local and national authorities in working towards a national repository. In June, construction started on the underground laboratory that is to be used as the basis for excavating the repository at Olkiluoto. In the USA, the Department of Energy expects to submit its formal licence application for the Yucca Mountain disposal facility by the end of this year. And Sweden is continuing to carry out detailed geological investigations at two candidate repository sites, with the hope of submitting a formal repository application in 2008.

The Agency continues to assist Member States in developing waste management and disposal strategies — and I am pleased to see the renewed interest in multinational approaches to spent fuel management and disposal. More than 50 countries now have spent nuclear fuel, including fuel from research reactors, stored in temporary sites, awaiting disposal or reprocessing. I am encouraged that the Russian Federation has expressed interest in an international approach to spent fuel storage and reprocessing, and has agreed to work with the Agency in giving consideration to its feasibility. We intend to hold a conference in Russia next year to discuss ways of moving forward with international cooperation on such an initiative.

The concept of multilateral control or oversight over proliferation sensitive parts of the nuclear fuel cycle — specifically, those related to the enrichment of uranium and separation of plutonium — has been the subject of many studies and initiatives over the years. Recent non-proliferation and security challenges make it important and appropriate that we revisit this subject. During the last few months, I have appointed a group of senior experts to look into various options for multilateral control. In my view, the group could focus initially on how to guarantee the supply of technology and fuel for nuclear generated electricity, and how to set up one or more international repositories for spent nuclear fuel. The Agency could play an important role in this regard, particularly as a guarantor of supply, a role envisaged under the Agency Statute. The group plans to submit a report next March on the results of its study.

Nuclear Knowledge Management
The Agency has stepped up its efforts to assist Member States in the management of nuclear knowledge — ensuring succession planning for the nuclear work force, retaining the benefits of nuclear safety experience at operational reactors, and preserving the results of six decades of nuclear science and engineering studies. Within the Secretariat, we have formed an integrated knowledge management group to ensure participation in this work from all parts of the house.

In February, the Asian Network for Higher Education in Nuclear Technology was established in Malaysia. The Agency completed a pilot project to consolidate safety information on the ageing and long term operation of nuclear power plants, and improved the performance of the International Nuclear Information System (INIS). And we worked with the World Nuclear University (WNU) — a global network of industrial, educational and research institutions with programmes in nuclear science and engineering — to establish a schedule of activities for 2004–2005.

Earlier this month, at a conference in Saclay, France, on nuclear knowledge management, participants from over 50 countries encouraged the Agency to continue to establish additional regional knowledge management networks. A number of nuclear industry leaders indicated a keen interest in working with the Agency on strategies to preserve and enhance nuclear knowledge.

Nuclear Power: Looking Ahead
In June, the Agency convened an international conference in Obninsk to review the lessons learned from half a century of nuclear operational experience. We also plan to hold a ministerial conference next April in Paris on planning for nuclear power for the 21st century.

The Agency participated this year in the creation of a UN-system-wide collaborative arrangement, entitled "UN-Energy", which aims to ensure that energy needs are addressed as a whole, rather than viewing one source of power as being in competition with others. Given our experience and capabilities in energy–environment planning and modeling, we have been contributing to this effort as part of follow-up to the 2002 World Summit on Sustainable Development in Johannesburg.

The Agency will continue to encourage innovation in nuclear technology, to ensure the ongoing availability of nuclear power for those who want to make use of it. In the coming year, the Agency will also focus on: continuing to assist Member States with energy planning assessments; promoting research, training and other forms of international co-operation on waste management; and assisting Member States with their licence extension and decommissioning efforts.

Nuclear Applications

A major part of the Agency´s scientific and technical work involves the transfer of peaceful nuclear technology in a variety of fields. Many of these applications are proving important tools for social and economic development. Through both the Regular Programme and the TC Programme the Agency provides expertise, training and equipment to Member States to build up their technical capabilities and support their national development programmes.

Food and Agriculture
An excellent example is the application of nuclear technology to one of the basic elements in human survival: the food supply chain. Over the past four decades, the use of isotopes and radiation in food and agricultural research and development has yielded rich results: millions of hectares of higher yielding crops all over the world; disease resistant plants, developed with radiation induced mutation, providing economic benefits worth billions of dollars every year to the world’s farmers; improvements in livestock production and health based on immuno assay technology; the control and eradication of many insect pests using the sterile insect technique (SIT); and huge savings in fertilizer applications by using isotopes to optimize nitrogen fixation from the atmosphere to improve crop production. Many of these benefits have been arisen through the efforts of the Joint Division of the IAEA and the Food and Agriculture Organization of the United Nations (FAO) — a collaborative effort which, since its inception in 1964, has become one of the best examples of successful inter-agency cooperation within the UN system.

Most recently, the growth in DNA sequence information has enabled an approach to genetic studies based on specific gene functions, and radiation induced mutation is playing a key role in helping to identify gene characteristics that would improve the nutritional quality and pest resistance of plants. Isotopic labelling of DNA markers is also helping to identify advantageous gene combinations in livestock, which, for example, will help to control disease and identify animal strains that can thrive in harsh climates.

Human Health
Cancer is a major health problem all around the world, and the number of cancer cases is rising, especially in developing countries. Of the estimated 260 million new cancer cases expected in the next 20 years, approximately 175 million will require radiation therapy, and 100 million of those will be in developing countries that have neither the resources nor the expertise to deal with this impending crisis. The Agency has been working with the World Health Organization (WHO) and other key partners to provide the training, expert missions and equipment needed to support national and regional cancer therapy programmes. But the size of the problem far outstrips our resources.

To raise public awareness of this need, and to increase our capacity to assist Member States in providing cancer treatment and care, we have launched the Programme of Action for Cancer Radiotherapy (PACT), endorsed by the Board in June. PACT will seek to attract funds and resources from both governmental and non-governmental sources, to extend the limited capacity of our existing technical cooperation programme for cancer treatment. We have already begun receiving offers of seed money and pledges of equipment. We have also begun approaching potential donors with case studies of countries with acute needs for assistance with cancer treatment facilities.

Other examples of Agency human health activities include our success in introducing a low cost method of screening blood supplies for hepatitis C in Latin America — a region where the risk of transmitting the infection has been high to date, because of a lack of screening. In the East Asia region, over a 2½ year period, about 3.8 million newborn babies were screened for congenital hypothyroidism through TC projects, with the result that 1100 newborns were identified with this syndrome and saved from mental retardation through early intervention. In Africa, the control of human communicable diseases has been furthered through regional cooperation on TC initiatives. For example, to use nuclear techniques to detect drug resistance in malaria and tuberculosis cases, as well as through the use of molecular epidemiology and immunology techniques in support of the UNAIDS-WHO African AIDS Vaccine Programme, and the assessment of nutrition intervention programmes on vulnerable populations, including those infected with HIV/AIDS.

The Agency´s laboratories at Seibersdorf have continued to assist Member States in the calibration of dosimeters for national standards laboratories, and to perform audits to ensure the reliability of radiation doses delivered in radiotherapy hospitals and research institutes worldwide. Under TC projects during the past year, new Secondary Standards Dosimetry Laboratories (SSDLs) were introduced in Albania, Croatia, Georgia and Kuwait, and the existing SSDL in Ethiopia was upgraded.

The Agency´s mosquito rearing laboratory at Seibersdorf is continuing to explore the use of the SIT on malaria-bearing mosquitoes. Colonies of African mosquitoes have been established, and research and development studies will begin soon on mass rearing, radiation sterilization and the development of genetic sexing strains.

Water Resources Management
Another crucial factor in development is the access to safe drinking water — a basic necessity unavailable to more than one sixth of the world´s population. Isotope hydrology is being used in a broad variety of Agency TC projects to map underground aquifers, detect and control pollution, and monitor the safety of dams. Last year the Agency formalized a partnership with the Global Environment Facility to design 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, and Sudan — to develop an effective groundwater management plan.

Isotope hydrology is also being used more broadly to improve the understanding of climate change on water resources. In one such effort, more than 17 research groups participating in an Agency coordinated research project are now designing a global network of isotope monitoring in large rivers. The Agency is also an active participant in the UN Water Programme, which seeks to address a broad range of issues related to global access to drinking water.

Environmental Applications
Nuclear techniques are increasingly being used in a wide variety of environmental applications. For example, electron beams are used to "scrub" the sulphur and nitrogen oxide pollutants released from fossil fuel combustion. Electron beam flue gas treatment plants are now successfully operating in coal fired plants in China and Poland, and the modified pollutants are further treated with ammonia to produce clean effluents and fertilizer. Electron beams and isotopic sources are also being used increasingly to neutralize harmful organisms in sewage and industrial wastewater before they are released into streams and rivers. In Asia, nuclear techniques useful in characterizing air pollution particles have been applied for over a decade in TC projects in 13 Member States, to identify local pollution sources and support air quality management efforts.

From November 2003 to March 2004, the Agency´s Marine Environment Laboratory in Monaco worked with Japan´s Marine Science and Technology Centre and other national laboratories to conduct the first expedition for investigating radionuclides in the Southern Ocean. By measuring radioactive and stable isotopes to depths of 4000 metres, this study was able to quantify water and heat transport in climate-critical regions from the equator to the Antarctic. The results will be used to understand the long term capacity of the ocean to absorb heat and carbon.

At the request of the Iraq office of the UN Development Programme (UNDP), the Monaco laboratory is also undertaking an extensive pollution survey of marine sediments from around 20 sunken shipwrecks in Iraq’s waterways. The results will be crucial in minimizing the risk to personnel and the marine environment as UNDP begins salvage operations in the hope of making Iraq´s vital waterways safe again.

Future Challenges in Nuclear Applications
In the year ahead, the Secretariat will broaden its efforts to increase public awareness about the range of benefits provided by nuclear technologies, to assist Member States in determining how best to apply these technologies to development needs, and to mobilize additional resources to extend the capacity of our technical cooperation programmes. We will also explore the use of new nuclear applications — whether related to isotope hydrology, detection of landmines, nuclear medicine, new plant strains, or marine and terrestrial radioecology — that can help to address social and economic development issues. Coordinated research projects, which pool scientists from developed and developing countries, will continue to support the generation of new knowledge in these and most other areas of the Agency’s work in nuclear sciences and applications.

Nuclear Safety and Security

The safety and security of nuclear activities around the globe remain key elements of the Agency´s mandate. Nearly two decades after the Chernobyl accident, it is gratifying to see that the Agency’s efforts have been of tangible and sustained benefit, including: our emphasis on defence in depth, risk management, and international cooperation; our concerted drive to upgrade facilities with older design features; our assistance to developing Member States in establishing a solid radiation protection infrastructure; our emphasis on safety and security in transport; and particularly in recent years, our dual focus on strengthening physical protection at nuclear facilities and enhancing the security of nuclear material and radioactive sources worldwide. Considerable progress has been achieved through these efforts. Nevertheless, the need to maintain an effective and transparent global nuclear safety and security regime remains a matter of high priority.

Nuclear Installation Safety
At nuclear installations, traditional measures of safety — such as the frequency of unplanned shutdowns, the availability of safety related equipment, or the number of actuations of reactor protection systems — show that these facilities have become far less susceptible to events that challenge their safety. However, a number of issues of concern remain. The analysis of certain events with recurrent root causes sometimes reveals questionable operational practices, pointing to the need for overcoming complacency and aiming for continuous improvements within both the regulatory authorities and the operating organizations. More attention is also needed to address the equipment ageing concerns associated with long term operation of nuclear facilities. And as 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.

The Agency is working to develop international consensus on sound approaches for dealing with these important issues. To that end, we will hold a major conference next month in Beijing, focused on "Continuous Improvement of Nuclear Safety in a Changing World."

Status of International Conventions
The development and adoption of legally binding international agreements has proven to be a powerful mechanism for enhancing safety worldwide. At its June meeting, the Board approved a plan to facilitate cooperation among parties to the Early Notification and Assistance Conventions, to enhance international preparedness for — and response to —nuclear and radiological emergencies.

Unfortunately, some safety conventions are not widely adhered to. For example, the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management, which held its first Review Meeting last November, still has only 33 members, despite the fact that nearly all countries have radioactive waste, and could benefit from participation in the Convention.

The Convention on Nuclear Safety has now entered its third review cycle. As requested by the last Review Meeting, the Secretariat has submitted a report to the contracting parties that describes some 16 issues related to nuclear power plant safety, as identified through Agency safety services.

The process towards strengthening the Convention on Physical Protection of Nuclear Material (CPPNM) is under way. In July, at the request of the Government of Austria and 24 co-sponsoring States, I circulated proposed amendments to the CPPNM to all States Parties, which would extend the scope of the Convention to cover, inter alia, the physical protection of nuclear material used for peaceful purposes, in domestic use, storage and transport and the physical protection of nuclear material and the protection of peaceful nuclear facilities against sabotage. Under the terms of the Convention, I will convene a diplomatic conference to consider the proposed amendments when requested to do so by the majority (currently 53) of the States Parties to the CPPNM. While it is clear that consultations to resolve a few outstanding issues continue, it is my hope that we can move forward swiftly and in good faith to resolve these issues, and convene a diplomatic conference early next year.

Safety Standards
The Agency, with the assistance of the Commission on Safety Standards, has been making every effort to raise awareness of Agency safety standards. We are making good progress on the revision of these standards, and on filling in the remaining gaps in coverage. Last year, for example, we published requirements related to design and site evaluation and seven safety guides. We are currently working on a cross-cutting effort to bring the Agency’s standard on quality management and quality control in line with new developments in modern management practice.

The Agency promotes the acceptance of the entire corpus of IAEA safety standards as the global reference for protecting people and the environment against nuclear accidents and the harmful effects attributed to radiation exposure. The establishment of regional safety networks — such as the Asian Nuclear Safety Network and the Ibero-American Radiation Safety Network — will also promote the use of international safety standards and the sharing of expertise on a more regional basis.

Safety Missions
The Agency´s safety missions and peer reviews are in high demand. We are still assisting some Member States with safety upgrades at older installations with design vulnerabilities. As more Member States consider the extension of licences, we are also giving increased attention to services that can identify and address equipment ageing and relevant operational issues. And as we work towards the global acceptance of IAEA safety standards, safety reviews will be integrated into fewer categories and focused increasingly on the review of national self-assessments.

It is worth noting that the effective use of operational experience requires candid feedback and broad participation. The insights gained through such feedback and follow-up safety missions are of value to all. Similar benefits accrue from our OSART missions, including our most recent OSARTs to Pakistan and China. I am pleased to note that Russia also has recently requested an OSART workshop at one of its nuclear power plants. I remain convinced that transparency is an essential ingredient of an effective nuclear safety culture.

International Nuclear Safety Group
As you know, I have recently reconstituted the International Nuclear Safety Group (INSAG) to be a more independent, authoritative body, capable of providing insights and recommendations to the Secretariat and to Member States, the nuclear industry and the public, with a mandate covering all issues that could impact the safety of nuclear installations. After two meetings, the group has reported that they will initially focus on four broad areas: the global safety regime, safety principles, operational safety and stakeholder involvement. In setting the context for this work, INSAG will survey how approaches to nuclear safety have changed over the past five decades, to determine what gaps remain and what the approach should be for further change — bearing in mind challenges such as plant ageing considerations, the shrinking pool of nuclear expertise, the challenges of developing a new generation of nuclear power plants, and the need to maintain a strong safety culture.

International Expert Group on Nuclear Liability (INLEX)
Last year, I announced the establishment of an International Expert Group on Nuclear Liability (INLEX), with a view to fostering a global and effective nuclear liability regime. Since that time, INLEX has performed a comprehensive study of the nuclear liability instruments adopted under Agency auspices. Based on this study, INLEX has finalized "explanatory texts", to provide authoritative interpretation on the application of these nuclear liability instruments.

Research Reactor Utilization, Safety and Security
The effective use, safety and security of research reactors and the management of research reactor fuel continue to be areas of Agency emphasis. Currently, over 270 research reactors are in operation in 57 countries, more than 200 have been shut down, and nearly 170 others have been decommissioned. Last November, at an international conference on research reactors in Chile, the Agency heard from designers, users and regulators on ways to improve the utilization of research reactors, strengthen physical security, improve the sharing of expertise and enhance the Agency’s research reactor safety assistance missions. In March, the Board approved the Agency´s draft Code of Conduct on this topic — as part of an international effort to harmonize the laws, policies and safety practices related to research reactor management and operation.

As you know, a number of Member States have been working with the Agency on efforts to return high enriched uranium (HEU) research reactor fuel to the countries of origin. Since last year’s session of the General Conference, this programme has accelerated with four shipments of fresh HEU — from Romania, Bulgaria, Libya and Uzbekistan — back to Russia for down-blending to LEU.

On a related note, in May, the US Secretary of Energy visited Vienna to announce an expanded "Global Threat Reduction Initiative", with the objective of securing, removing or disposing of nuclear and other radioactive materials around the world that are vulnerable to theft. Just this past weekend, a conference was held here in Vienna to further define this initiative and seek broader international support for achieving its goals. The Agency is working with Russia, the USA and other countries to see how this initiative can support the Agency’s activities in this field.

Safety of Transport of Radioactive Material
Another area of Member State concern and Agency focus has been the safety of transport of radioactive material. In March, the Board approved actions addressing the denial of shipments, transport of orphaned sources, emergency response to transport incidents, communication and liability, and other issues. In addition, a revision to the Agency´s Transport Regulations was approved by the Board in June.

A comprehensive Transport Safety Assessment Service (TranSAS) mission to France was conducted in April, with particular attention paid to maritime and air transport. I am pleased to note that Japan has recently asked the Agency to carry out a TranSAS mission there. I would urge all countries involved in the transport of nuclear and radioactive materials to take advantage of this Agency service. I would also note that more Member States are providing data to transport databases, as a mechanism for evaluating the effectiveness of their programmes.

On a related note, the denial of shipments of radioactive material, sometimes due to apparent safety or security concerns on the part of the shipping companies, is a matter of significant concern — particularly when the shipments involve radionuclides intended for use in medical activities. While we should be strongly focused on ensuring the security of radioactive sources globally, we should equally seek solutions that will ensure the continued delivery of the benefits that these sources provide in support of global development.

Radiological Criteria for Radionuclides in Commodities
The Secretariat has been working for nearly four years on the development of radiological criteria for long lived radionuclides in commodities. Establishing these criteria would set acceptable activity concentration levels in bulk materials, and could be of significant benefit in international trade. An associated safety guide has been developed that proposes a graded approach for applying and verifying these criteria. In addition, the Codex Alimentarius Commission of the FAO and WHO, working with the Secretariat, has developed specific guidelines for radionuclide levels in food, and WHO has collaborated with the Secretariat in developing guidance levels for drinking water. I am pleased to note that the Board of Governors approved the use of these criteria at its meeting last week.

Regulatory Infrastructures for Radiation Safety and the Control of Radioactive Sources
More than 90 Member States are now participating in the Agency´s Model Project on Upgrading Radiation Protection Infrastructure. Last September in Morocco, the Agency organized an international conference on national radiation safety infrastructures. One outcome of the conference was the development of a set of actions on source control, aimed, inter alia, at encouraging Member States to engage in self-assessments, to strengthen the training of regulatory staff, and to work towards greater stakeholder involvement and information exchange.

Following last year´s General Conference endorsement of the Code of Conduct on the Safety and Security of Radioactive Sources — which aims to regulate, inter alia, the import and export of high activity radioactive sources — more than 60 countries have signaled their intent to follow its provisions. Last month, a meeting of experts agreed on implementation procedures for the Code.

I would also note that the Agency has been assisting a number of Member States in rendering sealed radioactive sources safe and secure, either within their own countries or via return shipment to suppliers for recycling and reuse. Over 20 000 curies of sources from Bolivia, Cote d´Ivoire, Haiti, the Islamic Republic of Iran, Malaysia, Sudan and Thailand have been conditioned for long term storage or shipped back to the original suppliers. These assistance efforts have been given high priority, and we expect the volume of these efforts to increase.

The Agency has also continued its efforts to secure orphaned radioactive sources. Working with Russia and the USA, vulnerable high activity disused sources were identified in six countries of the former Soviet Union (Azerbaijan, Belarus, Estonia, Kazakhstan, Republic of Moldova and Tajikistan). The Agency has organized the decommissioning and transport of these sources, and their eventual placement in safe and secure storage. In addition, we have held four regional workshops — in Argentina, Bulgaria, India and Vietnam — to help Member States develop their national strategies for regaining and maintaining control over radioactive sources. Fifteen missions have been carried out to individual countries for additional assistance in this regard — in some cases, combined with Radiation Safety Infrastructure Appraisal missions.

Nuclear Security and Protection Against Nuclear Terrorism
The pace and scope of the Agency’s nuclear security related activities have continued to accelerate and expand. Clearly, the circumstances that first led to a plan for protection against nuclear and radiological terrorism have not diminished. The end of the three-year period originally envisioned in that plan is now in sight, and the Secretariat will present a follow-up plan to the Board for approval next year.

In a relatively short span, much work has been completed on assessing the security needs of Member States and providing the necessary training. Since September 2001, more than 50 security-related assessment missions and over 60 training events have been carried out, involving Member States from every region. While significant work remains in developing international guidelines and recommendations, the greatest emphasis is now being placed on addressing the needs for actual improvements, including equipment needs.

On the financial front, the extrabudgetary funding received by the Nuclear Security Fund has, in general terms, met the Secretariat’s targets. We have responded with a very high implementation rate; last year, our target was exceeded, and it is likely that, for 2004, implementation will once again be 100% or more. However, I should point out that very little funding has been received without conditions on its use. Together with the lack of funding predictability, this has greatly complicated programme prioritization, planning and implementation. With nuclear security assistance likely to remain a high priority for the foreseeable future, we should find a way to ensure that our funding mechanism reflects a longer term perspective.

International cooperation in combating the threat of nuclear terrorism has been reinforced on several fronts. The United Nations Security Council, in resolution 1540, expressed grave concern over the risk of non-State actors acquiring weapons of mass destruction, and identified a series of measures that should complement the activities of the Agency’s nuclear security programme.

Future Challenges in Nuclear Safety and Security
While much has been achieved in the area of nuclear safety and security, areas for further improvement remain. In the coming year, the Agency will focus on addressing these areas, including: enhancing safety at power plants and research reactors; continuing to improve transport safety; tightening the control of radioactive sources; strengthening the protection of nuclear installations and nuclear and other radioactive material against sabotage and theft; and encouraging transparency and openness among all States, through safety and security reviews and the sharing of information. Much of this work goes hand in hand with the concept of building a global nuclear safety and security regime — characterized by broad adherence to safety and security conventions, continuous improvement through the universal application of IAEA safety standards and security guidelines, increased collaboration with relevant international organizations, and continued vigilance on the part of regulators, nuclear operators and end users of nuclear and radioactive material.

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.

Technical Co-operation Programme

TC Programme Management
As more developing countries become Member States of the Agency, the number of countries that benefit from assistance under the TC programme continues to grow. This year we have the record number of 111 Member States participating in national, regional and interregional projects.

In addition to sufficient and predictable funding, the chief prerequisite to a successful TC programme is effective planning by the Agency and the recipient State, and commitment by the latter. The use of the "central criterion", which seeks to ensure government commitment to a given project, is continuing to prove effective as a way of promoting project success.

In some cases, recipient countries have been demonstrating their strong commitment to TC projects through cost-sharing — which 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.

Country programme frameworks (CPFs) provide a tool for structured dialogue and planning to ensure that each national TC programme is aligned with the country’s development priorities. The expanded planning that occurs under these frameworks helps to maximize the effectiveness of programme delivery. CPFs are now being applied in 93 countries, with an additional 8 currently being developed.

Thematic plans — which use the results of field experience to prioritize particular technical areas in which a nuclear technology could have a significant impact — are also a key tool for effective programme planning. Thematic plans have been prepared or are under way on the use of molecular isotopic techniques to augment the diagnosis, treatment and control of communicable diseases, as well as the use of nuclear analytical techniques in managing air pollution. This will make a total of 14 thematic plans in place to help guide country programmes.

The Agency continues to expand its partnerships with other United Nations system organizations, international financial institutions, regional organizations and other relevant bodies. A number of good examples can be seen in the African region. For example, in partnership with the African Union, the Agency supports the Pan African Tsetse and Trypanosomosis Eradication Campaign (PATTEC), and we collaborate with FAO and WHO through PATTEC policy and mobilization committee meetings.

Status of Technical Cooperation Funding
With regard to both the resources and the delivery of the technical cooperation (TC) programme, 2003 was a challenging year. Although total new resources were greater than in 2002, the TC funds actually available at the end of the year were well below the resource projections on which the programme had been planned and implemented. Although subsequently remedied, this shortfall, together with the SARS epidemic in East Asia and the Pacific region and security-related issues in several regions, hampered certain aspects of programme delivery.

By the time of the June Board, I was somewhat relieved to announce that, based on funds received in 2004, the Rate of Attainment for 2003 had reached 87% — short of the 90% goal, but still the highest achieved to date. As you know, the lack of predictability and timeliness of TC resources presents a serious problem — both for the programme currently being delivered and for the preparation of the 2005–2006 programme. I therefore again urge Member States to inform the Secretariat as early as possible about their intended contributions to the Technical Cooperation Fund (TCF).

As you are aware, Member States are asked to make their pledges for the coming year at the time when the target is set by the General Conference. Payment is expected as of 1 January, to allow implementation of the programme on a sound financial footing. However, as of today, pledges and payments to the TCF for 2004 stand at only 65.4% of the target, with fewer than 60% of Member States having even made known their intentions. I urge all Member States, both donors and recipients, to pay their target share in full and on time.

On a related note, I am pleased to note that, regarding contributions to the TCF for 2005 and 2006, an agreement has been reached on a target figure of $77.5 million for both years.

As you are aware, the Board in June approved the replacement of Assessed Programme Costs (APCs) with National Participation Costs (NPCs). The Secretariat is sending letters to all Member States detailing how NPCs will be assessed and when they will be invoiced. The key difference is that NPCs will be assessed at 5% (rather than the 8% at which APCs were assessed), and at least half of the NPC must be paid to the Agency before the implementation of projects can begin.

I would also point out the successful results of our efforts to work with Member States to mobilize additional 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.

Future Challenges in Technical Cooperation
While the TC programme continues to respond successfully to the needs and priorities of Member States, and the Agency consistently experiences increasing demand for TC support activities, it remains a challenge to secure sufficient resources to meet the demand. In the near term, we will continue to pursue ways of enhancing the impact of TC projects — through better up-front planning, increased monitoring of results and expanded partnerships.

Management of the Agency

Results Based Approach to Programme and Budget Formulation
The Agency´s results based approach to programme and budget formulation was first introduced for the 2002–2003 biennium. The conclusions from a comprehensive programme performance assessment for the 2002–2003 cycle were presented to the Programme and Budget Committee (PBC) in May. For the first time, the outcomes achieved — that is, the effects and changes induced in Member States by the Agency's work — were measured using pre-selected performance indicators. The lessons learned from this exercise will help us to improve further the substance of the programme and budget for 2006–2007, which we are now in the process of developing.

Biennial Budgeting
I would also note that, while we are currently implementing the second biennial programme using the results based approach, our budget continues to be annual. In fact, the Agency appears to be almost the last organization in the UN system to have an annual budget approval process. This will remain the case until the required number of Member States — two thirds of the Agency’s membership — accept the amendment to Article XIV.A of the Agency’s Statute, as approved by the General Conference in 1999. The information document before you reiterates the benefits that would be derived from the change. To date only 34 Member States have accepted the amendment.

I should note also that the amendment to Article VI, relevant to the expansion of the membership of the Board of Governors, requires acceptance by two thirds of Member States, but to date has only been ratified by 35.

VIC Security Enhancements
The importance of measures to enhance the security of the Vienna International Centre (VIC) and the urgency of implementing those measures — in response to changes in the international security environment and the UN system-wide establishment of Minimum Operating Security Standards — was stressed at the PBC and at the June session of the Board. In May the General Assembly approved initial measures for the VIC at a cost of $8.4 million, as part of a security package covering all UN Headquarters offices. Of this amount, the share of the UN Office in Vienna has already been appropriated from New York, and the other three VIC-based organizations are now requesting their governing bodies to appropriate their respective shares. A supplementary appropriation proposal is therefore before you, as recommended by the Board. It includes the Agency's share of the General Assembly approved package, as well as the basic security enhancements for the Agency’s regional offices and laboratory sites.

New Information Security Policy
I am pleased to note that, as of last Monday, the Agency´s new information security policy entered into force. During the development stage, the Secretariat put extensive efforts into three practical aspects: establishing appropriate work procedures; creating the necessary tools (such as for electronic encryption of highly classified documents); and training of staff. It is now mandatory for all staff to take an annual training course on information security — and key personnel, such as managers and administrative personnel, have received additional specialized training.

Assessment Arrears
The current level of payments received on 2004 regular budget assessments is $186 million, compared to an approved appropriation of $288 million. Given this dramatic shortfall, we foresee difficulties in delivering the approved Agency programme for the remainder of the year unless the outstanding amounts are received.

This situation is compounded by the nearly $40 million in arrears still outstanding for 2003 and prior years. Unless some of these arrears are received, the Agency will be faced with a cash deficit for 2003 when those accounts are balanced at the end of this year. I call on all Member States to urgently pay their budget share.

Conclusion

This overview of the past year highlights achievements and challenges in all areas of Agency activity — and reflects the dynamic nature of our programme in anticipating and responding to change. Whether a specific activity contributes to strengthening the nuclear non-proliferation regime, enhancing the transfer and application of nuclear technologies, or ensuring safety and security in their use, our commitment is always to respond to your needs and priorities. As always, our success is crucially dependent on your shared commitment and partnership — particularly in providing the required authority, cooperation and funding. I trust that your support will continue to be forthcoming.

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