Unleashing The Nuclear Watchdog

Unleashing the Nuclear Watchdog: Strengthening and Reform of the IAEAAbout the AuthorA CIGI Senior Fellow since 2006, Trevor Findlay is a professorat the Norman Paterson School of International Affairs (NPSIA)at Carleton University in Ottawa, Canada, where he holds theWilliam and Jeanie Barton Chair in International Affairs. Heis also director of the Canadian Centre for Treaty Compliance(CCTC) at NPSIA. Professor Findlay has a B.A. (Hons.) degreefrom the University of Melbourne and an M.A. and Ph.D. ininternational relations from the Australian National University(ANU) in Canberra.He spent 13 years in the Australian Foreign Service, withpostings in Tokyo, Mexico City and Geneva. He has served asan Australian delegate to the Conference on Disarmamentin Geneva, the UN General Assembly and UN DisarmamentCommission in New York. His academic career began at theANU as Foreign Affairs Fellow, Senior Fellow and acting head ofthe Peace Research Centre. Professor Findlay was subsequentlyinaugural project leader on peacekeeping and regional securityat the Stockholm International Peace Research Institute,followed by seven years as Executive Director of the VerificationResearch, Training and Information Centre (VERTIC) in London,United Kingdom. He chaired the Independent Commission onthe Verifiability of the Comprehensive Nuclear Test Ban Treatyin 2002, was involved in “second track” diplomacy efforts in2003-2004 to design a verification system for an Israel-Palestinepeace accord and was adviser to the Canadian chair of the UNExpert Panel on Verification in 2006.Professor Findlay’s expertise covers disarmament, armscontrol and non-proliferation in respect of nuclear, chemical andbiological weapons; monitoring, verification and compliance; aswell as peace operations and regional security. He is the authorvi CIGI Special Report www.cigionline.orgof seven books, including Nuclear Dynamite: The PeacefulNuclear Explosions Fiasco (Sydney: Brassey’s Australia, 1990);Cambodia: The Legacy and Lessons of UNTAC (Oxford: OxfordUniversity Press,1995); The Use of Force in UN Peace Operations(Oxford: Oxford University Press, 2002); and, most recently,Nuclear Energy and Global Governance: Ensuring Safety,Security and Non-proliferation (London: Routledge, 2011).He is the author of numerous book chapters, including five onconflict prevention, management and resolution for the SIPRIYearbook, as well as reports, journal articles and conferencepapers. He has been the editor of nine books, including fiveeditions of the Verification Yearbook, and editor of PacificResearch, Trust & Verify and Compliance Chronicles. In 2003,he produced a Handbook on Verification and Compliancefor the UN Institute for Disarmament Research for use by UNdiplomats. Professor Findlay has testified to, and providedresearch input for, the Blix Commission on Weapons of MassDestruction and the Australia-Japan International Commissionon Nuclear Nonproliferation and Disarmament, and providedtestimony for the Australian and Canadian Parliaments and theNATO Assembly. He is an experienced media performer, withtelevision appearances on the Australian, British and Canadianbroadcasting corporations (ABC, BBC and CBC) among others,to his credit, in addition to commenting on the radio and in theprint media in Australia, Canada and the United Kingdom.For CIGI, Professor Findlay has managed two major projectson global nuclear governance, both in cooperation with theCCTC. The first, from 2006 to 2010, was a multidisciplinaryproject called Nuclear Energy Futures: Implications andOptions for Global Governance. The project produced a fourvolume report by Professor Findlay, covering the future ofnuclear energy to 2030; and the implications for nuclear safety,nuclear security and nuclear non-proliferation respectively,as well as an Overview and Action Plan. This current reporton strengthening and reform of the IAEA is a follow-on study.Professor Findlay’s previous work on global governance includesreports on enhancing the Organization for the Prohibition ofChemical Weapons and on lessons to be learned from the UNpeace operations in Cambodia and Somalia, and from the UNSpecial Commission and the UN Monitoring, Verification andInspection Commission in Iraq.Professor Findlay is currently a Visiting Research Fellow withthe International Security Program and the Project on Managingthe Atom at the Belfer Center for Science and InternationalAffairs at the Harvard Kennedy School, Harvard University.

PrefacePrefaceThe idea for this study arose from a report on the Future of NuclearEnergy to 2030: Implications for Global Governance published byCIGI in early 2010. The report was a product of the Nuclear EnergyFutures (NEF) Project, a joint undertaking by CIGI and the CanadianCentre for Treaty Compliance (CCTC) at the Norman PatersonSchool of International Affairs (NPSIA) at Carleton University inOttawa. It had become increasingly obvious as that study proceeded,if it was not before, that the International Atomic Energy Agency(IAEA) was not only currently the paramount institution for globalnuclear governance, but that its role was likely to become even morecritical as the twenty-first century unfolded. Notable drivers were thegrowing interest in nuclear energy on the part of many countries asa response to global warming and demands for energy security; theperceived threat of nuclear terrorism post-9/11; continuing concernsabout nuclear safety, which have since been regrettably vindicated bythe disaster at Fukushima in March 2011; and the seemingly endlessnon-compliance cases of Iran, North Korea and Syria.It seemed eminently sensible to follow up the NEF project withone that examined the singular role of the IAEA in its entirety —governance, organizational and management issues as well assubstantive ones — and that drew together and re-examined therecommendations made about the Agency in the NEF report. Thisreport is the outcome of the two-and-a-half year research project on“Strengthening and Reform of the IAEA” conducted by the CCTC andCIGI. The project aimed to carry out a “root and branch” study of theAgency to examine its current strengths and weaknesses and makerecommendations for bolstering and, if necessary, reforming it. Therehave been previous enquiries into the Agency by the US GovernmentAccounting Office and Congressional Research Service, along withinternal audits and management consultancy reports, as well as anIndependent Commission of Eminent Persons into the role of theIAEA to 2020 and Beyond (the so-called 20/20 Commission), whichreported in May 2008. However, this is the first independent academicstudy of the Agency. It is needed not just in the light of accumulatingchallenges to the IAEA’s future and the increasing demands made onit by its member states, but because the Agency itself is demandingmore support and resources. At a time of financial stringencies, manyof the countries that traditionally have offered such support seekproper justification for any increases.The project began with a scoping workshop held at CIGI inOctober 2010 that clarified the key issues to be pursued. Primary andsecondary documentation has been widely surveyed. Interviews andconsultations have been held with current and former diplomats andgovernment officials, academics, non-governmental representativesand officials of international organizations. I am particularlygrateful to officials of the IAEA, the Australian Safeguards andNonproliferation Office, the Canadian Department of Foreign Affairsand International Trade, the Canadian Nuclear Safety Commission,the Pacific Northwest National Laboratory, the UK’s Department ofEnergy and Climate Change, the US Government Accounting Office,the US Congressional Research Service, the US State Department, theUS Department of Energy, the World Institute for Nuclear Security(WINS) and various diplomatic missions in Vienna. While theywill remain anonymous, their assistance and advice were criticalin producing this report. Official reviewers Mark Gwozdecky andJim Keeley provided invaluable insights and suggestions. The draftreport’s initial findings were also considered at a Managing theAtom seminar at Harvard University on October 25, 2011, at anInternational Security Program seminar at Harvard on March 29,2012, and at a public event and private consultations organizedby the University of California’s Institute on Global Conflict andCooperation in Washington, DC, on February 24, 2012. I am gratefulto Larry Scheinman and Joseph Pilat for their helpful observations atthat meeting. Former IAEA Deputy Director General David Waller wasgenerous with his time and insights in reviewing the managementand finance sections of the draft.In addition, I am grateful to CIGI for its generous financial andmaterial support for the project and the helpfulness of its staff,in particular Tom Bernes, Anne Blayney, Max Brem, Steve Cross,Brandon Currie, David Dewitt, Kevin Dias, Jennifer Goyder, FredKuntz and Andrew Schrumm. I was especially fortunate to haveCarol Bonnett as my editor. I am also indebted to the Managing theAtom Project and the International Security Program at the BelferCenter at the Harvard Kennedy School, Harvard University. Not onlydid they provide early advice on the project, but also awarded mea joint fellowship at the Belfer Center during my sabbatical fromCarleton University to enable me to complete this report surroundedby my peers who care passionately about the same issues. I amespecially indebted to Graham Allison, Robert Brown, Matt Bunn,Olli Heinonen, Marty Malin, Steve Miller and Yvonne Yew.At Carleton University I am especially grateful for the administrativeand research assistance of my former students Derek de Jong andJustin Alger, administrator and researcher at the CCTC, both of whomhave gone on to bigger and better things. At Harvard I was fortunateto obtain the assistance of Alexander Ely, a student at the FletcherSchool at Tufts University, as a research assistant. In addition, formerCarleton student Aaron Shull helped me with a comparative study ofthe IAEA and the International Civil Aviation Organization.In addition, the following individuals advised, encouraged,assisted or otherwise supported me in this project: Tim Andrews,Trevor Findlay vii

Unleashing the Nuclear Watchdog: Strengthening and Reform of the IAEAAndrew Barlow, John Barrett, Michael Brown, Jim Casterton, ShaunCaza, John Carlson, Jim Casterton, Jill Cooley, Elizabeth Dowdsewell,Tom Ellacott, Janice Fitchett, Mark Fitzpatrick, Sarah Fraser, AnthonyHinton, Roger Howsley, Bates Gill, Ingrid Hall, Mark Hibbs, PeterJenkins, Peter Kaiser, Kurt Kessler, Joanna Kidd, Martine Letts,Jacqueline Littlewood, Susan Lynch, Bill McCarthy, Gerry McGuire,Fred Morris, Chantal de Jong Oudraat, Bill Paton, Andreas Persbo,John Philipps, Jean du Preez, Tariq Rauf, Christopher Reberger,Jenni Rissanen, Greg Schulte, Mark Shaffer, Henry Sokolski, ElenaSokova, Sharon Squassoni, Christopher Toomey, Tibor Tóth, KenWagstaff, David Waller, Mark Whitney, Tracy Wilson and Terry Wood.I apologize to anyone I have forgotten.Finally, I acknowledge standing on the shoulders of giants. Thelate David Fischer and Larry Scheinman are the authors of the twomasterworks on the IAEA and without them I would have beenwandering in the wilderness. I hope I have not ill-used them.Naturally, despite the luxuriant help and advice I received,the opinions and recommendations contained herein are myresponsibility alone.Trevor FindlayApril 2012viii CIGI Special Report www.cigionline.org

Executive SummaryUN Vienna International Centre. (UN Photo by Mark Garten)Executive Summary in need of both strengthening and reform — in certain keyrespects; and deserving of increased funding from member states andgreater support from all stakeholders.The IAEA has attributes and roles that cannot be matched by otherorganizations, groups of states or individual states, no matter howpowerful or influential:The International Atomic Energy Agency (IAEA) is the principalmultilateral organization mandated by the international communityto deal with nuclear issues. Established in 1957 and based in Vienna,it is essentially the nucleus around which all other parts of the globalnuclear governance system revolve. This report, based on more thantwo years of research, interviews and consultations, concludes thatthe IAEA is: irreplaceable — like the United Nations itself, if it did notexist it would have to be invented; considering its capabilities, size and budget, a veritablebargain for international peace and security; effective and efficient — mostly; It is a standing, multilateral organization with nearuniversal membership and a science and technologyorientation. Its nuclear safeguards system and associated verificationactivity is unparalleled. Its legitimacy and credibility allow it to oversee theformulation and dissemination of global nuclear nonproliferation, safety and security norms. Its role in fostering improved nuclear safety is wellestablished and set to grow following the 2011 Fukushimadisaster. Its work in the sensitive area of nuclear security isexpanding and has great long-term potential, given theTrevor Findlay 1

Unleashing the Nuclear Watchdog: Strengthening and Reform of the IAEAlikely ephemeral nature of some other internationalarrangements. Its independence from the nuclear industry allows it to bea disinterested promoter of nuclear energy for states whereAmong the Agency’s governance, managerial and administrativeit is appropriate, affordable and subject to the achievement challenges are the following:of necessary milestones. the governing bodies have seen a dissipation of the “spiritIts assistance to developing countries in the peaceful usesof Vienna,” resulting from sharpened political divisionsof nuclear energy is an essential component of the nuclearbetween developed and developing countries — especiallynon-proliferation bargain.over compliance, verification and peaceful uses; Its impartiality permits it to be a facilitator and, in somecases, an active driver of treaty implementation across awide spectrum of nuclear issues. It plays a unique role in fostering a truly internationalnuclear community.The organization has, in many respects, evolved deftly over the past55 years, shedding unrealizable visions, seizing new opportunitiesand handling with aplomb several international crises into whichit has been drawn. Its Secretariat’s technical competence andprofessionalism is highly regarded. The IAEA is widely viewed as oneof the most effective and efficient in the UN family of organizations.Zero real budgetary growth has forced the Agency to stay relativelycompact and to continuously seek efficiencies.The research for this report confirms that, nonetheless, while theIAEA does not need a dramatic overhaul, it does need strengtheningand reform — in particular respects. The Agency has not takenadvantage of all the authorities and capacities that it has, and itsometimes has failed to seize opportunities staring it in the face. Likeall venerable organizations it also suffers from a number of longstanding “legacy” issues that need fixing. the Agency’s leadership has struggled to find the correctbalance between taking the initiative as an “independent”organization and necessary acquiescence to member states’disparate and evolving demands — especially over noncompliance controversies; the Secretariat has faced some long-standing managementissues, including: insufficient strategic planning; a flatmanagement structure; inconsistent practices and qualitycontrol across departments; programmatic stovepiping; aproliferation of programs, projects and mechanisms; andinadequate personnel policies; as a result of zero real budgetary growth, the Agency’sinfrastructure, technology (including IT) and humanresources have deteriorated and the adoption of modernmanagement tools has been delayed (although steps areunderway to address all of these); intra-agency barriers to communication, transparency andinformation sharing have persisted; and the Agency has not communicated successfully with all ofits stakeholders, including the media, the general public,the nuclear industry, the international developmentcommunity and even member states.For the IAEA’s key programs — safeguards, safety, security andpromotion of the peaceful uses of nuclear energy — the followingconclusions were reached: Technical Cooperation (TC) has long been undermanaged,under-resourced and overexploited by some member states;current reform efforts need to be sustained and extended.In addition to meeting current expectations, the Agency also needsnuclear safeguards have been considerably strengthened in to prepare itself for future challenges:recent years, but current efforts to find new approaches and given that verification is never 100 percent effective and istechnologies and to change the old safeguards culture needlikely to be needed in perpetuity, and that certain states mayto be intensified;still risk non-compliance, safeguards and other verificationthe Agency’s role in nuclear safety is being strengthenedcapacities need constant enhancement, especially forpost-Fukushima, but remains hobbled by member states’detecting undeclared activities;reluctance to commit to mandatory measures and provide the Agency’s roles in nuclear safety and security by theiradequate resources;very nature will likewise always be works-in-progress; the Agency’s emergency response capabilities producedmixed outcomes during the Fukushima disaster and needcareful reconsideration and extra resources; new special verification mandates may arise or beresurrected at any time, as in the cases of Iran, North Koreaand Syria; the nuclear security tasks accorded to the Agency by memberstates, although growing, tend to be modest and supportiveof external efforts: the Secretariat needs to rapidly equipitself for this new area of work and member states need toresource this activity properly; and the Agency will likely be offered a role in verifying stepstowards global nuclear disarmament, beginning with aFissionable Material Cut-Off Treaty and assistance withbilateral US/Russia cuts; and2 CIGI Special Report www.cigionline.org

Executive Summary despite Fukushima, runaway climate change may induce and reform itself. But ultimately, it is constrained by the strongrapid demand for nuclear electricity and an upsurge in preferences of its membership as a whole or those of key, activedemand for the Agency’s advisory and assistance services. member states. It is therefore to the member states that we must lookReform and strengthening is already occurring in a number of to trigger and sustain lasting strengthening and reform — and thusareas of the IAEA’s operations. Unless otherwise indicated, this report unleash the nuclear watchdog.endorses such efforts and, in many instances, recommends that theybe pursued with even greater vigour. This report also identifies araft of other possibilities, both major and minor, for improving theAgency’s performance in the short to medium term. In most cases,however, change will only be achievable if all the players work intandem. Several proposals would require amending the Statute orinvolve decisions by the Board of Governors (BoG) and or the GeneralConference (GC). There should be no illusions about the difficulty ofachieving agreement on these. Although there are some reforms thatthe Director General (DG) and Secretariat can themselves initiate, inalmost every case they will require at least the tacit support of memberstates. In many instances a balance will need to be struck betweencost, feasibility and member states’ sensitivities about intrusiveness,confidentiality and sovereignty. The newly emerging powers, thosewith greater political and financial clout and growing nuclear energyindustries, such as Brazil, China, India and South Korea, should playa greater role in governing, managing, supporting and funding theAgency than they have in the past. A full list of these recommendedproposals can be found on page 126.While this report puts no dollar or euro figure on what is required,it is an inescapable conclusion that the Agency is significantlyunderfunded, considering its responsibilities and the expectationsincreasingly being placed on it. Fukushima has reinforced thisconclusion. In almost all cases, strengthening and reform willrequire additional resources, especially funding that can usuallyonly be provided by the member states holding the purse strings.Hence, the importance of a grand budgetary bargain along the linesproposed in this report.One of the Agency’s major challenges is to meet the expectationsof its member states and other nuclear stakeholders, which are oftenunrealistic. By being more transparent, open and honest aboutthe functions it can and cannot fulfill, and being more diligent inproviding convincing justification for funding increases in particularprograms, the Agency may be able to attenuate this problem. This isespecially important at a time of global financial stringencies. TheAgency should also beware of raising unrealizable expectations itself:it should not describe itself as the hub, central point or focal pointof a particular realm unless it is truly able to fulfill such functions.Since it is states that established the IAEA, pay for it, provide itspersonnel and other resources, and grant it the necessary privilegesand immunities, it is they that ultimately control its destiny. It istrue that, like many organizations, the Agency has assumed anindependent identity and presence in international affairs that noone member state can gainsay, and that in some circumstances it hassome room for independent manoeuvre, especially by balancing theinterests of various member states. It can in some respects strengthenTrevor Findlay 3

IntroductionIAEA fact-finding mission assesses Fukushima nuclear power plant. (UN Photo by Greg Webb)IntroductionThe events at Japan’s Fukushima Daiichi re

14 The Board of Governors 16 “Politicization” of IAEA Governance 17 The Director General 19 Conclusions . 129 IAEA Organizational Chart 130 IAEA Chronology. Unleashing the nUclear Watchdog: strengthening and reform of the iaea . broadcasti