The decision in 1995 to extend indefinitely the Non-Proliferation Treaty (NPT) was taken in an atmosphere of hopes and expectations that the Treaty would be invigorated in many ways: accelerated efforts towards nuclear disarmament, a strengthened verification regime and expanded peaceful nuclear co-operation. This Conference is to review achievements since that time. The criteria which the Treaty Parties are using to assess the balance sheet are the terms of the Treaty itself and the package of decisions adopted in 1995. My report to you today will use the same yardsticks to focus on the activities of the IAEA relevant to the implementation of the Treaty.
Successive NPT Conferences have rightly expressed the conviction that IAEA safeguards play a key role in the nuclear non-proliferation regime. This is because States Party to the Treaty rely on Agency safeguards for assurance of compliance by other Parties with their non-proliferation obligations and for demonstration of their own compliance.
A number of the Principles and Objectives agreed in 1995 have a direct and significant relevance to IAEA safeguards. They reaffirmed that the IAEA is the competent authority responsible for verifying and assuring compliance with States' commitments under Article III.l of the Treaty; made clear that "All States Party required by Article III of the Treaty to sign and bring into force comprehensive safeguards agreements and which have not yet done so should do so without delay"; indicated that safeguards should be regularly evaluated and assessed and that decisions taken by the IAEA Board of Governors aimed at strengthening the effectiveness of safeguards should be supported and implemented; expressed the hope that nuclear material transferred from military use to peaceful nuclear activities should, as soon as practicable, be placed under Agency safeguards; and finally expressed the conviction that every effort should be made to ensure that the Agency has the financial and human resources to do the work the Treaty calls upon it to do. I should like to spend some time reviewing these verification related objectives and principles.
The Agency has continued to function as the competent authority to verify and give assurance about compliance with States' safeguards obligations under Article III.l of the Treaty. And the Agency has continued to provide assurance that no nuclear material which has been declared and placed under safeguards has been diverted for any explosive purposes or for purposes unknown.
On the conclusion of safeguards agreements, I am pleased to report that a further 28 Treaty Parties have brought comprehensive safeguards agreements into force since the beginning of 1995, raising the overall total to 128. Unfortunately, however, a large number of States Parties continue to be in non-compliance with this Treaty obligation. The Agency is making every effort to encourage the remaining 54 Parties to conclude the required agreements. I should emphasize that the existence of a safeguards agreement in force is a sine qua non for the Agency's ability to verify compliance by a State of its non-proliferation obligations, irrespective of whether it is known to have nuclear activities or not. I therefore urge all States concerned to conclude and bring into force the required safeguards agreements without delay.
With regard to the strengthening of the effectiveness of safeguards and the implementation of the decisions adopted by the Board of Governors in this regard, remarkable progress has been achieved. As you are aware, the discovery of Iraq's clandestine nuclear weapons programme was both a setback and a watershed for the safeguards system. It jolted the international community into urgently considering ways and means to strengthen the safeguards system, in particular to equip it with the ability to provide assurance, not only about the non-diversion of nuclear material declared by the State, the focus of the "traditional" system, but also about the absence of undeclared nuclear material and activities.
Some of the strengthening measures could be anchored to the Agency's existing authority under the present safeguards agreements. Other important measures, however, required additional legal authority, and were the subject of a year long deliberation by the Agency's Board of Governors. The result was the adoption in May 1997 of a Model Protocol Additional to Safeguards Agreements. As stated in the Foreword to the Model Protocol, it is to be the standard for individualAdditional Protocols to be concluded with States with comprehensive safeguards agreements, in other words all non-nuclear-weapon States party to the NPT. The Foreword also requests all other States to conclude protocols to contribute to the effectiveness and efficiency of the system and to achieve universality.
This new Protocol gives the Agency the means to provide credible assurances of compliance with non-proliferation commitments, including notably the necessary assurance about the absence of undeclared nuclear material and activities. To this end, the Additional Protocol empowers the Agency to seek a broad range of information about all aspects of a State's nuclear and nuclear related activities. It also provides broader right of access for Agency inspectors to nuclear and nuclear related facilities and locations and contains new administrative arrangements to improve the effectiveness and efficiency of safeguards.
Under NPT safeguards agreements, the Agency has the right and the obligation to ensure, so far as it is able, that all nuclear material in all peaceful nuclear activities of the State is subject to safeguards, and that safeguards are in fact applied to such material. The Agency's obligation is thus not limited to nuclear material actually declared by a State; it also extends to that which is required to be declared. It is only in respect of States which have both a comprehensive safeguards agreement and an Additional Protocol in force that the Agency will be able to implement fully the safeguards required by Article III of the Treaty, and to provide assurance not only of the non-diversion of declared nuclear material, but also of the absence of undeclared nuclear material and activities. The new Model Additional Protocol is therefore fundamental to effective verification by the Agency of compliance with non-proliferation obligations provided for in the NPT.
Against this background, it is disappointing that progress in signing and bringing Additional Protocols into force has been slow. With almost three years now having passed since the adoption of the Model Protocol, only 44 non-nuclear-weapon States Parties to the NPT have concluded Additional Protocols and only 9 such Additional Protocols have entered into force. Of those Treaty Parties which have yet to conclude Additional Protocols, 26 have nuclear facilities under safeguards. I urge all non-nuclear-weapon States Party to the NPT to conclude Additional Protocols at the earliest possible date to enable the Agency to discharge fully its responsibilities under Article III of the Treaty. Taking this step will also bear further witness to the States' non-proliferation commitment. In connection with the Additional Protocol, I should also note that all five nuclear weapon States and one State with a non-comprehensive safeguards agreement - Cuba - have concluded Protocols additional to their safeguards agreements.
The Secretariat continues to work to develop modalities for the implementation of the Model Additional Protocol and to help States in the process. A priority area of work is to "integrate" existing safeguards activities with the new strengthening measures. The aim is to develop the optimal combination of safeguards measures for a State as a whole to provide assurance of non-diversion and of the absence of undeclared nuclear material and activities. This combination will enable the Agency to meet its safeguards objectives with maximum effectiveness and cost efficiency.
The implementation of integrated safeguards in a State will depend upon a prior positive conclusion about the absence of undeclared nuclear material and activities in that State. Once the Agency is able to draw that conclusion, on the basis of rigorous and broad ranging processes, it will be in a position to implement integrated safeguards. We expect the technical framework for the implementation of integrated safeguards to be completed by the end of 2001.
The development work related to integrated safeguards is currently focused on important 'building blocks' such as developing the necessary guidelines that would enable the Agency to develop - and maintain - assurance of the absence of undeclared nuclear material and activities; and then identify the measures that would subsequently need to be applied to declared nuclear material in different types of nuclear facilities to provide assurance of its non-diversion. Much preparatory work has been done already, but the Secretariat has to move forward with prudence as we gain experience with the new measures under the Model Additional Protocol. In matters of verification, efficiency should always be pursued, but never at the cost of effectiveness.
The 1995 "Principles and Objectives" stressed that fissile material transferred from military use to peaceful nuclear activities should, as soon as practicable, be placed under IAEA safeguards. Since 1996, the Agency has been engaged in consultations with the Russian Federation and the USA regarding Agency verification of weapon origin and other fissile material to be submitted by these two States. These consultations have been examining the legal, technical and financial aspects associated with the verification of such material, the amounts of which could ultimately total hundreds of tonnes of plutonium and high enriched uranium. Key to this undertaking is the development of a Model Verification Agreement establishing the verification objectives and procedures to be used to effectively ensure that this material remains permanently removed from nuclear weapon programmes, while at the same time preventing the disclosure of information regarding sensitive classified characteristics of this material. I am pleased to say that significant progress has been made both on the text of the Model Verification Agreement, and on the associated technical systems and equipment which will be employed. An important issue that still needs to be addressed is the question of financing this new verification task. It is important that such financing be predictable and assured, either through the Agency's regular budget or through an arms control verification fund to be financed through assessed contributions.
The merits of removing nuclear material from nuclear weapon programmes will increase considerably in the context of a fissile material cut-off treaty. UN General Assembly resolution 48/75L of 1993 requested the IAEA to provide assistance to negotiations, as required, in the examination of the relevant verification arrangements. While negotiations on such a treaty in the Conference on Disarmament in Geneva have not yet begun, the Agency has been examining the possible technical features of a verification regime. Such a regime will focus on nuclear material and facilities in nuclear weapon States and non-NPT States not currently subject to IAEA safeguards. This will present new verification challenges, particularly in facilities where international inspection was never anticipated. The relevance of the Agency's safeguards activities and the value of its long experience are obvious.
In my view, a ban on the production of fissile material for weapons, coupled with the steady submission to verification of material currently available for weapon purposes, would be a pragmatic way to move towards nuclear arms control and nuclear disarmament, as provided for in Article VI of the NPT. The IAEA stands ready to assist where it can in the achievement of this urgent and important goal.
Of direct relevance to effective verification are efforts to protect nuclear and radioactive material against theft and other misuses, and to prevent, detect and respond to illicit trafficking in these materials. These are the objectives of the Agency's programme for the security of nuclear and radioactive material established in 1995. Elements of the programme include information exchange, the provision of standards and guides, and measures to help States control and protect nuclear material and radioactive sources. In the area of information exchange, an Agency database on illicit trafficking incidents became fully operational in 1997 and now has almost 70 participating States. On physical protection, a 1998 review by the IAEA resulted in strengthened guidelines on protecting nuclear facilities and nuclear material in transport, use and storage against sabotage. The Agency is also currently discussing, through an informal, open-ended expert meeting, whether there is a need to revise the Convention on the Physical Protection of Nuclear Material in order to make it more effective. Other important activities include our International Physical Protection Advisory Service (IPPAS) to review States' physical protection systems, assess whether they are up to international standards and, if not, suggest means of improvement.
The 1995 "Principles and Objectives" reiterated the call of successive Review Conferences that "every effort should be made to ensure that the IAEA has the financial and human resources necessary", inter alia, to meet its safeguards responsibilities effectively. But despite these calls, our safeguards mandate continues increasingly to be underfunded. Despite the increase in the amount of nuclear material under safeguards and the complexity of nuclear facilities to be safeguarded, the Agency's budget for safeguards has been almost frozen for over a decade as a result of a policy of zero real growth. Thus, while our regular budget for safeguards has been at a level of roughly $82 million per year for the last several years, our expenditure has averaged about $95 million per year. This has inevitably led to increasing reliance on extrabudgetary funding. Voluntary contributions are currently projected to reach 20% of the safeguards programme costs by 2001. In view of the uncertainties surrounding the receipt, timing and amount of extrabudgetary resources, reliance on such resources inhibits proper planning and makes it difficult for the Agency to fulfil its mandate in the most effective and efficient way.
No review of the Agency's verification activities would be complete without reference to the two cases of non-compliance with the respective NPT safeguards agreements, namely Iraq and the Democratic People's Republic of Korea (DPRK). With regard to Iraq, the Agency has not been in a position since December 1998 to implement its mandate under UN Security Council Resolution 687 and related resolutions. As a consequence, it cannot at present provide any assurance that Iraq is in compliance with its obligations under those resolutions. In light of the fact that UN Security Council mandated activities ceased in December 1998, and given the requirements of the IAEA safeguards system, the Agency carried out an inspection in Iraq in January 2000 pursuant to Iraq's NPT safeguards agreement. The inspectors were able to verify the presence of the nuclear material subject to safeguards (low enriched, natural and depleted uranium) which is still in Iraq. As I noted at the time, the inspection was not designed to be and could not serve as a substitute for our activities under the resolutions of the Security Council. The Agency must return to Iraq as soon as possible if it is to fulfil the mandate entrusted to it under those resolutions and to provide the necessary assurances sought by the Council.
With regard to the DPRK, there is regrettably little to report since the 1995 NPT Conference. The Agency remains unable to verify the correctness and completeness of the DPRK's initial declaration of its nuclear material subject to safeguards and cannot, therefore, provide any assurance about non-diversion. The DPRK remains in non-compliance with its safeguards agreement, which remains valid and in force. The DPRK, however, continues to accept IAEA activities solely in the context of the "Agreed Framework" which it concluded in October 1994 with the United States of America. As requested by the Security Council, the Agency is monitoring a "freeze" of the DPRK's graphite moderated reactors and related facilities under that agreement. The degree of co-operation we receive from the DPRK continues to be limited and is linked by the DPRK to its perception of progress in implementing the Agreed Framework. As you may recall, the DPRK must be in compliance with its safeguards agreement before the delivery of key nuclear components of the light water reactors (LWRs) provided for under the Agreed Framework. Construction work on the LWR project started in February. To that end, the DPRK should start full co-operation with the Agency sooner rather than later. In this context I have expressed the hope that the DPRK would be in a position soon to normalize its relations with the IAEA. This would be in the interest of both the DPRK and the international community.
I have touched on some of the issues arising from the 1995 Review and Extension Conference which relate to safeguards. There are other issues, also important, covered in the Agency's Background Paper on Article III. They include our involvement in the development and verification of nuclear-weapon-free zones, which the "Principles and Objectives" encouraged as a matter of priority and, linked to that and to resolution NPT/CONF.1995/32/RES/1 on the Middle East, our endeavours to help prepare some of the groundwork for an effectively verifiable nuclear-weapon-free zone in the Middle East region and the acceptance of Agency safeguards on all nuclear facilities in all Middle East States. Successive IAEA General Conference resolutions have requested the Director General: "to continue consultations with the States of the Middle East to facilitate the early application of full scope Agency safeguards to all nuclear activities in the region as relevant to the preparation of model agreements, as a necessary step towards the establishment of a nuclear-weapon-free zone in the region."
During my consultations with the States of the region on this question, two differing views have continued to be expressed. Israel, on the one hand, continues to reiterate its view that priority should be given to the establishment of comprehensive peace and security in the region, which could later be followed by the establishment of the Middle East as a nuclear-weapon-free zone, of which mutual verifications and safeguards would be an integral part. On the other hand, all other States of the region continue to express the view that the application of safeguards to all nuclear activities in the region should not depend upon the establishment of a Middle East nuclear-weapon-free zone and/or on the conclusion of a comprehensive peace settlement; rather, according to this view, the application of such safeguards would itself be a key confidence building measure which could contribute towards those objectives. Naturally, I will continue my consultations on this important issue with a view to narrowing the area of disagreement.
Let me turn now to the question of the peaceful applications of nuclear technology. States Parties to the NPT have committed themselves to promote peaceful nuclear co-operation with each other, with special regard for the needs of developing States. Among international organizations, the IAEA has been recognized by previous Review Conferences as the principal vehicle for the transfer of technology foreseen in Article IV of the Treaty.
The major goal of the Agency's technical co-operation activities has been to bring about a tangible socioeconomic impact in the recipient States by directly addressing their major sustainable development priorities in a cost effective manner. The technology pillar of the Agency's programme - comprising power and non-power applications, their safety related activities and the transfer of these technologies - remains crucial to its Member States, particularly to developing States.
Since the last Review Conference, the Agency has continued to strengthen its technical co-operation programme and activities. At the end of 1997 a new Technical Co-operation Strategy was adopted. This strategy, based on the principle of "Partners in Development", uses three basic tools: Model Projects, Country Programme Frameworks and Thematic Plans.
Model Projects set high standards for project design to ensure they respond to the real needs of a country, produce significant economic or social impact and reflect the distinct advantages of nuclear techniques over other approaches. Country Programme Frameworks help focus the IAEA's co-operation programmes with countries in selected priority areas - resulting in fewer but better projects. Through Thematic Planning we identify best practices and ascertain what pre-conditions are necessary in a country to achieve the project objectives and identify potential partnerships with other international organizations or the private sector working on the same development themes.
Technical Co-operation among Developing Countries (TCDC) continues to be a key strategy because it promotes the sustainability of project activities by building self-reliance and mutual interest among Member States. The Agency is strengthening the regional co-operative agreements in Africa, Asia, and Latin America and the Caribbean by encouraging Parties to these agreements to assume responsibility for project formulation activities, and by encouraging the more advanced national institutes or resource centres to contribute to solving problems within the region.
The largest proportion of Agency assistance, which is need driven, relates to non-power applications. For instance, in 1999 about 85% of the Agency's technical co-operation programme corresponded to projects in the areas of human health, food and agriculture, water resources management, environmental monitoring, industrial uses and related radiation protection and safety. Let me give some examples.
Through an ongoing regional project dealing with capacity building in medical physics and radiotherapy for the treatment of cancer, the IAEA is establishing quality assurance systems in cancer treatment in Eastern Europe, with a clear and positive impact on the quality of health care.
Food and agriculture
Local economies and daily living in many parts of Latin America, Africa, the Middle East and Asia are affected by insect pests and the problem of poor animal productivity. The Agency is providing assistance and expertise to these regions with the aim of eradicating some of the pests by what is called the sterile insect technique. Using this technique, tsetse flies have been completely eradicated from Zanzibar, and a large project is now under way in Ethiopia. Screwworms, which attack animals and eat their flesh, were also eradicated from the Libyan Arab Jamahiriya and a campaign is now being carried out in Jamaica. Another pest - the fruit fly - is being controlled cost effectively in Argentina, Israel, Jordan, Portugal (Madeira), South Africa, Thailand and Tunisia.
Water resources management
In Algeria, Ethiopia, Morocco, Namibia, South Africa and Tunisia, the Agency's assistance in the field of water resources management and conservation has achieved marked success in terms of identification of the origins of leakages in dams and artificial reservoirs. Many countries in the region are now aware of similar problems and have started a co-ordinated effort to solve them with the help of nuclear techniques.
In the Black Sea region, the Agency has assisted several Member States to develop regionally co-ordinated monitoring and emergency response programmes for dealing with pollution in the marine environment using radioactive tracers. Again, in another project, the Agency has provided technical support to Kazakhstan for carrying out a radiological assessment of the consequences of nuclear testing on its territory, in particular in the Semipalatinsk region, with a view to upgrading the national capacity for addressing this problem.
Training is an important aspect of the Agency's technical co-operation activities. In 1999, the Agency organized in this regard over 200 training courses, workshops and seminars in which more than 2300 scientists from developing Member States participated. Over 1200 individuals received training under the Agency's fellowship and scientific visitor programme. Moreover, we delivered over $30 million worth of equipment and supplies, and fielded over 1400 international experts.
All this represented an investment of about $100 million in 1999. The dimension and relevance of these co-operative activities can be better appreciated when one realizes that Member States also invested approximately an equivalent amount through in-kind contributions to the implementation of the projects. In addition, other technology transfer activities were carried out under the regular budget of the Agency, such as the award of research contracts, the management of the International Nuclear Information System, the organization of symposia, conferences and technical meetings, as well as the issuance of a large number of publications.
Previous NPT Review Conferences have rightly emphasized the requirement that international nuclear co-operation take place under an appropriate international regime that ensures both the peaceful and safe nature of such co-operation. During the last five years the international safety regime has been greatly strengthened. The Convention on Nuclear Safety entered into force in 1996, and in 1997 the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management was concluded. In addition, the international nuclear liability regime was strengthened by two new legal instruments: the Protocol to Amend the Vienna Convention on Civil Liability for Nuclear Damage; and the Convention on Supplementary Compensation for Nuclear Damage.
In this context, a priority objective of the Agency is to establish a comprehensive and effective worldwide nuclear safety culture. The achievement of such a culture will be aided by the existence of a comprehensive set of international conventions prescribing the basic legal norms for the safe use of nuclear technology and internationally accepted standards and the provision of assistance to States in their implementation.
Increasingly, Agency projects have been focused on safety improvements in both power and non-power applications. Notable among these is a Model Project on upgrading radiation protection infrastructures to bring them up to international standards. As of the end of 1999, about 80% of the 52 States which participated in this Model Project had made significant progress towards putting in place appropriate legislative and regulatory controls on radiation sources. The Agency also provided assistance in the implementation of state of the art technologies for managing radioactive wastes through a project from which more than 40 Member States are benefiting.
The total volume of technical assistance provided by the Agency is considerable, but ensuring the predictability of resources remains a key challenge. In the past decade, income as a percentage of the target for the Technical Co-operation Fund has varied widely. In 1995, the Fund received 85% of its target, in 1997 only 74%. This year we are estimating around 80%. Last year, of the 130 Member States of the IAEA, only 48 pledged 100% or more of their assessed target. An additional 25 countries made partial pledges. Regrettably, 57 Member States made no pledges whatsoever. Of the fifteen major donors, only eight pledged in full. Although from a strictly legal point of view contributions to the Technical Co-operation Fund could be described as "voluntary", I submit that in the broader context of the NPT contributions to this Fund are more than simply "voluntary". They are solemn obligations that need to be respected.
At the end of this review of Agency activities under the NPT, a number of important points are worth emphasizing.
First, the Agency will continue to strive to strengthen its safeguards system in order to provide credible assurance. However, without the conclusion of the required safeguards agreements the Agency cannot provide any assurances about compliance by States with their non-proliferation obligations. And without the Additional Protocol the Agency can only provide limited assurances that do not adequately cover the absence of undeclared material or activities.
Second, the Agency will continue to strive to achieve maximum efficiency in its safeguards operation, but in order to be able to perform its mandate in an optimal manner its safeguards activities have to be fully funded in an assured and predictable manner.
Third, the Agency's strengthened system of safeguards ushers in a new era in the history of NPT verification. It is a "smart" non-discriminatory system that is designed to draw comprehensive conclusions about the State's compliance with its non-proliferation obligations. I expect therefore that the new system, when fully implemented, will contribute positively to the strengthening of the non-proliferation regime. But I should emphasize that verification, no matter how good it is, cannot work in a vacuum. It has been and should continue to be supported by other elements of the non-proliferation regime, notably: effective physical protection and export control arrangements; enforcement mechanisms; and above all regional and global security arrangements and accommodations. These elements are symbiotic in nature and have to work together.
Fourth, international co-operation in the peaceful uses of nuclear energy is a key component of the NPT. It should continue to be honoured and faithfully implemented, within an appropriate verification and safety framework. The IAEA is the main vehicle for promoting such co-operation and will do its utmost to effectively perform this task. This, however, requires that technical co-operation resources be adequate, predictable and assured. To this end, all States Party, particularly major donors, should pay their target contributions in full and on time.
Fifth, although the NPT regime is by no means a perfect regime, it is clearly the best we have. We should therefore continue to cement it and build upon it to curb the proliferation of nuclear weapons and to underpin the safe transfer of peaceful nuclear technology. In many respects the regime has been strengthened. The verification system is now more vigorous; the Security Council is now better placed to exercise its role in prescribing compliance-inducing measures in cases of violations; and the exporting States are more conscious of the need to ensure that nuclear related items will not be misused and will be subject to IAEA inspection.
On the other hand, the nuclear disarmament process has unfortunately continued to be sluggish. And recent indications are worrisome. Despite the recent ratification of the Strategic Arms Limitation and Reduction Treaty (START II), there is: a reluctance to ratify the Comprehensive Test Ban Treaty - long considered an important building block on the road to arms control; a disagreement on the continuing validity of the Anti-Ballistic Missile Treaty, which could unravel existing arms control agreements; and a deadlocked United Nations Conference on Disarmament in Geneva, unable for the past few years to even begin to negotiate any new nuclear arms control measures. It should also be noted that despite progress made in recent years towards achieving universality of the regime, several nuclear capable States still remain outside its bounds.
The regime, which has been painstakingly constructed over three decades, should not be allowed to unravel. Of crucial importance to that end is an unequivocal commitment by all nations to the basic tenets of the regime: universal adherence to the regime, universal adherence to the new verification system, fulfilment of the obligation to enhance peaceful nuclear co-operation and transfer of technology, and above all active negotiation towards nuclear disarmament. One important and concrete step to this latter end would be a comprehensive and in depth dialogue among the weapon States on practical measures to gradually reduce the number of, and move away from dependence on, nuclear weapons for their defence strategies, and thus lead by example. We must - as we were recently reminded by the International Court of Justice - "bring to a conclusion negotiations leading to nuclear disarmament in all its aspects".
Closely linked to that dialogue would be a parallel dialogue on a new collective security system that builds upon the current United Nations Charter system. There is clearly an urgent need for a more reliable, inclusive and transparent system.
Security through understanding and addressing insecurities, taking preventive measures, developing co-operative security arrangements and elaborating an effective system to ensure compliance is ultimately the best disincentive against the acquisition of nuclear weapons. For the sake of humanity, we must, sooner rather than later, move in this direction.