Leonard Spector: First, I would like to take the opportunity to congratulate Mohamed ElBaradei on his recent appointment to another four-year term as Director General of the International Atomic Energy Agency. Dr. ElBaradei has served the international security community for many years. He was first appointed to the position of Director General in December of 1997. However, he has held senior level positions on the IAEA Secretariat since 1984, serving as the representative of the Director General of the IAEA to the United Nations in New York, the Agency's Legal Adviser, Director of the Legal Division, and Assistant Director General for External Relations. He holds a legal degree from the University of Cairo and a Doctorate in International Law from New York University. We welcome him to the Center for Nonproliferation Studies today.

Mohamed ElBaradei: All of us in this group can begin our discussion with the assumption that nonproliferation contributes to international security. Since the Non-Proliferation Treaty is a cornerstone of nonproliferation and the IAEA ensures the implementation of the NPT, we know that the proper functioning of the IAEA is imperative to continued international stability.

Background
Because the IAEA is critically under-funded today, it is capable of adequate, but not optimal verification. However, that does not diminish the necessity of its function or the importance of its programs. As the discovery of a secret Iraqi nuclear program in the early 1990's demonstrated, new threats are appearing constantly and a well-funded IAEA is imperative to ensure that peaceful nuclear programs are not a front for proliferators.

The IAEA was established in 1957 in order to develop and control atomic energy. Its verification and compliance program was originally intended to inspect the peaceful nuclear programs of large countries such as Germany and Japan. However, in 1995, 57 states adopted the Additional Protocol of the NPT, and the assessment of inspections changed from quantitative to qualitative. The new process is based on the “big picture” and relies on the use of satellite imagery and environmental sampling tactics to ensure transparency in peaceful nuclear programs.

Problems
Today, the IAEA faces two continuing problems: lack of funding, and international reluctance to adopt and adhere to the Additional Protocol.

Like many organizations in the UN family, the IAEA is severely under-funded. In order to function optimally, it requires an annual budget of $110 million dollars. Currently, it receives $80 million from the UN and an additional $15 million from the United States. The deficit of $15 million dollars prohibits the IAEA from updating its analogue imagery system, using new satellite technology, establishing an independent lab for environmental testing, or training new inspectors.

Why is the IAEA not receiving the money it needs? It is the victim of bureaucratic battles. Since everything the IAEA does contributes to international security, it can't scale down its priorities in order to fit the financial restrictions placed on it by the UN and the United States. Unfortunately, the IAEA can't provide the expected nuclear security assurances without the money to do the job. Some in the international security community advocate a larger voluntary contribution from the United States. However, it is important for the world to realize that nuclear proliferation is a problem worldwide; it is not the sole responsibility of the United States. We should encourage European and developing countries help fund the IAEA. If the United States picks up the tab, it conveys the message that nonproliferation is only important to the U.S.

Two additional problems in recent nonproliferation history are Iraq and North Korea. Since Iraq kicked the IAEA out of the country two and a half years ago, no one has been monitoring the Iraqi nuclear programs or checking the veracity of Iraqi claims that the program is peaceful. Even the new resolution being negotiated does not propose inspection. What is the next step? Should the international community wait for an inspection regime? If not, what are the alternatives?

North Korea presents a similarly unstable situation. The IAEA has not been allowed to make progress in looking at the plutonium program. The IAEA needs 3-4 years to verify the history of the program and fully account for and analyze the plutonium produced there.

Finally, safety is the other task of the IAEA and that also needs money in order to update reactors, train new inspectors, etc.

Questions
Q: How do you suggest we augment the budget? Would a one-time infusion of funds be sufficient to solve problems and update hardware? This might alleviate the need to increase the budget on all UN programs and therefore stand a better chance in Congress.
A: I am not sure whether our lack of funding qualifies as a national emergency for the United States. I am not even sure that a one-time infusion would be helpful. For example, we need funds annually to commission a commercial satellite. Yes, in some ways one lump sum would help. But a solution provided solely by the United States might not be the right approach.

Q: What are some of the sticking points on the tri-lateral? Down-blending of Plutonium and irradiated MOX fuel?
A: The sticking point is the status of U.S. and Russian relations. Russians say that there should only be material coming out of weapons, while the United States claims that they should come out of the military as well.

Q: Fewer than half of NPT member states are parties to the Additional Protocol. Especially after the Iraqi problem, what explains the hesitation?
A: Inertia, bureaucracy, lack of human resources, worries about national sovereignty, and financial concerns are all factors in countries' decisions not to join the Additional Protocol. To encourage the signing of the Additional Protocol, one must make the impression that countries are legally (under article 3 of the NPT), politically and morally obligated to sign.

Q: Intelligence estimates posit that North Korea has enough material for 1 to 2 bombs. How did the agencies arrive at that estimate? Are you sure North Korea hasn't developed materials from undeclared facilities?
A: The estimates are based on the length of time the North Korean facilities have been operating and how much material they could have extracted in that time period. I don't know about their undeclared activities.

Q: What explains the difference in urgency between IAEA and U.S. government assessments of the Iranian nuclear program?
A: There is no difference in urgency. Our rules say that they should be subject to safeguards that prevent materials from being diverted to other countries. However, Iran is not part of the Additional Protocol. Of course we are concerned with future intentions, but the system is not refined enough to make judgements on that. The role of IAEA is to judge on today.

Q: Did Iran offer to let the IAEA examine “anything, anywhere?”
A: Maybe, but it was ten years ago and it was not a legal offer but a gentleman's agreement.

Q: You've spoken about how important it is for the IAEA to get more money. What kind of political forcing mechanisms would help encourage monetary contributions? How can we energize the leaders of important states to donate?
A: I agree that it needs to be taken up at the political level, as thus far, only financial bureaucrats have looked at the problem. Lugar describes it as a mechanical problem.

Q: Has rejection of the CTBT in the U.S. Senate changed the environment for the IAEA?
A: I don't think it has had a direct relationship on the IAEA, but it has negatively affected the arms control process.

Q: What is the impact of the OPCW? The Administration says that Iran has chemical weapons, but the OPCW has not acted. Would a successful challenge in the Hague renew the IAEA's interest?
A: The IAEA has broader authority (than the OPCW) and can trigger inspections themselves and cut out politics. The IAEA did a challenge in North Korea. It didn't succeed, but it established that the North Koreans have not come clean.

Q: We're currently on the 16th round of talks on North Korea. What progress has been made?
A: Many technical issues are being discussed. The purpose is to keep the dialogue going with North Korea.

Q: Is there a way to think outside the box and find a way to fund the IAEA despite the UN family political issues? I know the budget is a problem; the IAEA can't be unable to pay its inspectors at the end of the fiscal year.
A: Yes, we are one of 44 organizations in an IO account. Even though our work is extremely important, the IAEA is still in the same category.

Final Participant Comment: We need to devise a way to pay the IAEA outside of regular IAEA bounds, but the United States should not necessarily be paying more. It has already spent $73 million in voluntary contributions. Through these contributions, the United States pays 100 cents on the dollar as opposed to 25 cents. Other Geneva countries should be asked to pay more. The heads of state in these countries should be approached and exposed to the issue.

Prepared by Kristin Thompson

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