Our agenda for this meeting covers issues related to a broad variety of Agency activities. I will discuss a few issues related to each area.
Annual Report
The Annual Report for 2006 serves as the Board´s report to the General Conference, and as the Agency´s report to the United Nations General Assembly and the general public. The draft Annual Report before you describes the results of Agency activities throughout the year. Many of our Member States are facing important development and security challenges, including the need to improve health care, to increase agricultural production, and to secure water and energy supplies. Vulnerabilities remain in nuclear and radiological safety and security. And the nuclear arms control regime needs to be reinforced. In all these areas, as the report illustrates, the Agency´s activities can and do make a difference.
The Agency´s Technical Cooperation Programme
This year marks the 50th anniversary of the IAEA. In 1957, only a limited number of countries could enjoy the benefits of nuclear science and technology. The Agency´s technical cooperation (TC) programme consisted of a collection of relatively small projects. In 1960, for example, the Board of Governors approved 28 projects in 16 Member States.
Today, the TC programme comprises over 1000 projects distributed in more than 50 fields of activity in 115 Member States.
TC programme resources and delivery both showed robust growth in 2006. Contributions to the Technical Cooperation Fund (TCF) reached a record level. The rate of attainment reached its highest level ever, exceeding 93% by the end of the year. This demonstrates increased commitment by a growing number of Member States to pay their full share of the TCF target.
I should note that the TC programme for the 2007–2008 cycle was developed and finalized using the Programme Cycle Management Framework. The PCMF is an interactive on-line system for planning and managing national and regional TC projects, which facilitates real-time collaboration between all relevant parts of the Secretariat and our stakeholders in Member States. This has enabled the development of better screened, higher quality projects.
The development of the TC programme for 2007–2008 was closely linked to the planning priorities identified in Country Programme Frameworks. CPFs detail the areas of national priority that have been mutually agreed between the Agency and Member States. Currently, more than 100 Member States use this medium for planning their TC programme, although some of these CPFs remain in a draft stage. Our aim is to have CPFs for all countries, to ensure that projects are aligned to national priorities, and in which nuclear technology would make a difference.
Human health continues to be the largest single area of TC, accounting for more than a quarter of the programme in financial terms. Principal areas of focus include the evaluation of nutrition regimens and the diagnosis and treatment of diseases. Other important programme sectors include food and agriculture, water resources management, and nuclear and radiation safety.
Nuclear Applications
Nobel Peace Prize Events
The IAEA Nobel Peace Prize Special Events on Cancer and Nutrition were concluded in April. These six events, held in six countries around the world, focused the attention of policy makers, health experts and the public at large on the challenges of cancer and nutrition in the developing world. They highlighted the potential for nuclear techniques and Agency-supported capacity building to help address these concerns.
PACT
The Agency also collaborated in May with the University of Oxford in its Africa Consortium. Cancer experts, policy makers and donors discussed strategies for assisting African countries in the development of sustainable models for comprehensive national cancer control planning.
Agriculture
Mutation breeding of plants continues to play an important role in improving crop productivity. New agricultural techniques have been developed in several areas, such as methods to improve the efficiency of irrigation in rice farming and to enhance the selection of wheat varieties.
Water Management: Isotope Hydrology
To address global water challenges - such as water shortages, groundwater contamination, over-exploitation and the impacts of climate change on water resources - Member States need precise information. Isotope hydrology is increasingly becoming the tool of choice for getting this information.
The Agency has projects in water resources development and management throughout Africa, the Middle East, Asia and Latin America. Workshops and training courses were held last year to build capacity with local scientists and technicians. The Agency also developed a new isotope detection technique to permit more accurate groundwater dating. We also assisted Member State laboratories to improve their quality control and handling of data for water resources analysis.
Strengthening Nuclear Research and Development Institutions
Science is changing, in the way it is both funded and managed. A TC project has been examining the effects of these changes on Central and Eastern European nuclear research and development institutes. At a recent Agency conference, representatives from governments and research institutes from 17 European countries were brought together with representatives from relevant international organizations. Examples were presented of countries and institutions that have successfully adapted to the current funding environment, by focusing on meeting stakeholder needs and bridging the gap between the nuclear sector and mainstream science and technology. The Secretariat intends to examine the applicability of the lessons drawn from this project for other regions.
Nuclear Safety and Security
Recent Events
In the area of safety, the recent disclosure of criticality related safety events at nuclear power plants being unreported and/or covered up by operators has raised serious safety concerns. The IAEA is following up these and other similar events and plans to include a discussion of this topic during the Senior Regulators Meeting in September. In addition, a technical meeting will be organized by the Agency and hosted by Japan in October to discuss these events from a broad perspective, including safety management, safety culture and regulatory effectiveness.
Decommissioning
The number of nuclear power plants and fuel cycle facilities reaching the end of their lifetimes is continuously increasing. Decommissioning is evolving from a small scale activity to a large scale industry. Agency efforts in this field have included the development of a coherent set of safety standards. Our efforts are now focused on the application of these standards and the sharing of experience from advanced decommissioning projects to new programmes. The Agency is also expanding its review services to Member States on their decommissioning strategies.
Nuclear Terrorism Convention
The International Convention for the Suppression of Acts of Nuclear Terrorism will enter into force on 7 July 2007. The Convention recognizes important functions of the Agency, and is an important step forward in global efforts to protect against nuclear terrorism.
Taken together, the International Convention on the Suppression of Acts of Nuclear Terrorism, and the Amendment to the Convention on the Physical Protection of Nuclear Material, when in force, will serve to further strengthen international efforts to improve physical protection of nuclear facilities and nuclear and other radioactive material.
Nuclear Verification
Status of Comprehensive Safeguards Agreements and Additional Protocols
The Board has before it comprehensive safeguards agreements as well as additional protocols with the Republic of Burundi and the Republic of Montenegro.
This meeting marks ten years since the Board approved the Model Additional Protocol in May 1997. However, there are still more than 100 States party to the NPT that do not yet have this key verification measure in force.
The Safeguards Implementation Report and Safeguards Statement for 2006
The Safeguards Implementation Report (SIR) for 2006 is before you.
In 2006, the Agency implemented comprehensive safeguards agreements in 153 States. For 32 of the 75 States with additional protocols in force, the Secretariat was able to conclude that all nuclear material remained in peaceful activities.
The Agency is working steadily to reach the same conclusion with respect to all other States with comprehensive safeguards agreements and additional protocols in force. At this stage, however, for those States as well as for States without additional protocols in force, the Secretariat could only conclude that declared nuclear material remained in peaceful activities.
As of the end of 2006, 31 non-nuclear-weapon States party to the NPT had not yet fulfilled their obligation to bring comprehensive safeguards agreements with the Agency into force. For these States, the Agency does not perform any verification measures.
Implementation of Safeguards in the Democratic People´s Republic of Korea
At the March Board meeting, I reported that I had received an invitation from the Democratic People´s Republic of Korea (DPRK) to visit the DPRK to "develop the relations between the DPRK and the Agency, as well as to discuss problems of mutual concerns". I also reported at the time that China, in its capacity as Chairman of the Six-Party Talks, had notified the Secretariat of the "initial actions for the implementation of the joint statement" adopted in Beijing on 13 February. These actions provide for, inter alia, the DPRK shutting down and sealing, for the purposes of eventual abandonment, its Yongbyon nuclear facility, including the reprocessing facility - as well as the return of IAEA personnel to conduct the necessary monitoring and verification as agreed by the IAEA and the DPRK.
Later in March, I visited the DPRK. Discussions with DPRK officials were forward looking. They were focused on the potential for re-establishing the relationship between the DPRK and the Agency. We remain ready to begin work with the DPRK as soon as we are notified of their readiness to do so.
Implementation of Safeguards in the Islamic Republic of Iran
The Board has before it a report regarding the implementation of safeguards in the Islamic Republic of Iran. As you can see from this report, Iran continues to provide the Agency access to its nuclear material and facilities, including the enrichment facility at Natanz, in accordance with its safeguards agreement. The Agency has been able to verify that no declared nuclear material in Iran has been diverted.
However, as the report also makes clear, Iran has not taken the steps called for by the Board nor responded to the demands of the Security Council. The facts on the ground indicate that Iran continues steadily to perfect its knowledge relevant to enrichment, and to expand the capacity of its enrichment facility. Iran has also continued with the construction of its heavy water reactor at Arak. On the other hand, this is taking place without the Agency being able to make any progress in its efforts to resolve outstanding issues relevant to the nature and scope of Iran´s nuclear programme, or being able to implement the additional protocol that would enable the verification of the absence of undeclared nuclear activities. This dichotomy continues to be our key proliferation concern. Iran also continues to put additional restrictions and limitations on the Agency’s verification activities - including on our right to re-verify design information at Arak. The lack of progress on our verification mission, coupled with the additional limitations on our verification authority, has resulted in a deterioration of the Agency’s level of knowledge regarding certain aspects of Iran´s nuclear programme. This is disconcerting and regrettable.
Against the background of many years of undeclared activities, and taking into account the sensitivity of nuclear enrichment technology, it is incumbent on Iran to work urgently with the Agency, under a policy of full transparency and active cooperation, in order for the Agency to be able to provide assurance regarding the exclusively peaceful nature of all of Iran’s nuclear activities. These assurances are the ultimate purpose of the verification process. They would certainly help to dispel the concerns of the international community regarding Iran’s nuclear programme. Transparency and cooperation by Iran would, therefore, be in the interest of not only the international community but also of Iran.
At this stage, I am increasingly disturbed by the current stalemate and the brewing confrontation - a stalemate that urgently needs to be broken, and a confrontation that must be defused. I continue to believe that dialogue and diplomacy are ultimately the only way to achieve the negotiated solution foreseen in the relevant Security Council resolutions. The earlier that conditions are created to move in this direction, the better.
Assurance of Supply
The increase in global energy demand is driving an expected expansion in the use of nuclear energy. This means an increase in the demand for fuel cycle services. It also means an increase in the potential proliferation risks created by the spread of sensitive nuclear technology, such as that used in uranium enrichment and nuclear fuel reprocessing. The convergence of these trends points clearly to the need for the development of a new, multilateral framework for the nuclear fuel cycle. In my view, such a framework could best be achieved through establishing mechanisms that would assure the supply of fuel for nuclear power plants - and over time, by converting enrichment and reprocessing facilities from national to multilateral operations, and by limiting future enrichment and reprocessing to multilateral operations.
Over the past two years, a number of proposals and ideas have been put forward. Some parties have proposed the creation of an actual or virtual reserve fuel bank of last resort, under IAEA auspices, for the assurance of supply of nuclear fuel. This bank would operate on the basis of apolitical and non-discriminatory non-proliferation criteria. Others are proposing to convert a national facility into an international enrichment centre. Still others are proposing the construction of a new, multinational enrichment facility under IAEA control. The Secretariat has looked at these proposals and their associated legal, technical, financial and institutional aspects. This week you will receive our report on "options" for assurances of supply of nuclear fuel, which I trust will be of help to you in considering this important issue at a subsequent meeting of the Board.
Controlling nuclear material and the use of nuclear energy is a complex process. And it is clear that an incremental approach, with multiple assurances in place, is the way to move forward.
Management Issues
The Board has before it the Report of the Programme and Budget Committee (PBC). As you are fully aware, discussions on the 2008–2009 programme and budget have been ongoing since the PBC meeting, and to date remain inconclusive, with differences of view on how to proceed. This is obviously disappointing.
I would emphasize, as in the past, that this is your programme and budget. What the Secretariat has drawn up is merely a costing of carrying out the activities you have requested - in the most effective and efficient way possible.
I should repeat again that the Agency´s activities cannot continue to expand at their current rate without corresponding increases in financial resources. The idea of "doing more with less" has its limits, particularly when the activities under discussion are so critical, and where cutting corners is not an option.
I should also underline that, even with the proposed budget, the Agency’s financial situation remains vulnerable, and we still fall short of what is needed to carry out our mission in an effective manner. Significant additional resources are still sorely needed. Our laboratories are full of equipment that is outdated, although vital to carry out essential verification, safety and development functions. Our nuclear security programme remains 90% funded through unpredictable and heavily conditioned voluntary contributions. Our safety department continues to rely heavily on extrabudgetary staff.
This dichotomy between increased high priority activities and inadequate funding, if continued, will lead to the failure of critical IAEA functions. A fundamental question that you need therefore to reflect on is the future of the Agency and its ability to achieve its mission.
The Secretariat continuously aims to become more effective and transparent in its programme delivery. But numerous external and internal audits have reached the same conclusion: that we have reached the limit of what can be accomplished unless we overhaul our organizational processes and support systems. The Secretariat last year performed a comprehensive feasibility study in this area. The study made clear that the Agency cannot afford not to implement an integrated Agency-wide Information System for all programme support areas based on commercial software and best practices in the public and private sector.
But in order to move forward with this initiative, we will need funding, and in the near future the Secretariat will be contacting a number of Member States to seek their support in this important enterprise. What is clear is that the sooner we make this investment, the sooner we - and you - will reap the benefits, in terms of both effectiveness and efficiencies.
Conclusion
Next month, on 29 July, it will be fifty years since the concept of "Atoms for Peace" took shape as the International Atomic Energy Agency. The mission with which we were entrusted at that time remains crucial to security and development. The Secretariat and myself are proud to be a part of this mission. I trust you all share that pride, and that the Agency can continue to count on your support.