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– Gary Samore
Former White House Coordinator for Arms Control and WMD Terrorism
ElBaradei: IAEA Budget Problems Dangerous
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Paul Kerr

Budget constraints are jeopardizing the International Atomic Energy Agency’s (IAEA) ability to perform vital parts of its mission, particularly those most closely related to preventing the spread of nuclear weapons, Director-General Mohamed ElBaradei has warned in recent months. Meanwhile, a committee established by the IAEA Board of Governors to review the adequacy of agency safeguards has ended its work after having made little progress in its deliberations.

According to a document obtained by Arms Control Today, ElBaradei told the IAEA board June 15 that the proposed agency budget for 2008 “does not by any stretch of the imagination meet our basic, essential requirements,” adding that “our ability to carry out our essential functions is being chipped away.”

The IAEA performs a wide variety of nuclear-related functions, including promoting safety in nuclear facilities as well as cooperating with countries on matters such as nuclear power and nuclear medicine.

It also performs missions critical to preventing the spread of nuclear weapons. For example, the IAEA implements safeguards agreements, which states-parties to the nuclear Nonproliferation Treaty (NPT) are required to conclude. Such agreements allow the agency to monitor certain declared nuclear activities and facilities to ensure they are used solely for peaceful purposes.

Additionally, the IAEA performs functions designed to prevent the smuggling and theft of nuclear material, such as maintaining a database that tracks illicit trafficking in such material. The agency also provides assistance to states to help them prevent the theft of nuclear material.

Budget in Flux

The IAEA board has not yet agreed on a budget for fiscal year 2008, a situation that ElBaradei described June 11 as “disappointing.” The board could decide on a budget at an early July meeting, Agence France-Presse reported June 17, but that has not yet been confirmed.

The board is required to submit the agency’s annual budget to the IAEA General Conference, which meets each September. The director-general initially develops the budget with input from IAEA staff and member states.

Based on a UN formula, each member-state contributes a certain amount of funds to the IAEA’s “regular budget.” The agency’s total regular budget for fiscal year 2007 is approximately $370 million. The IAEA also receives voluntary contributions from member states.

The agency’s fiscal year 2007 verification budget, which includes the implementation of safeguards, is less than $145 million. The budget for nuclear safety and security, which includes measures to secure nuclear materials, is approximately $30 million.

Starting in the mid-1980s, a group of wealthy countries imposed a “zero real-growth” budget on the IAEA. Beginning in 2003, however, the agency has received modest budget increases.

For fiscal year 2008, ElBaradei submitted a nominally zero real-growth budget, according to another document obtained by Arms Control Today. However, it contains a separate category of funding for “essential investments.” Some governments have asked the IAEA to decrease its 2008 fiscal year budget, the document says.

Size Matters

ElBaradei warned June 15 that continued flat budgets would force the agency to cut back on some of its missions. Similarly, he argued four days earlier that the “dichotomy between increased high priority activities and inadequate funding, if continued, will lead to the failure of critical IAEA functions.”

Government officials and outside experts widely acknowledge that the IAEA’s workload will increase in the future. According to an April 18 Department of State fact sheet, “requirements for IAEA safeguards and inspections are expected to increase dramatically over time” because more countries are likely to increase their reliance on nuclear power.

At least in the short term, the agency also will need to devote more resources to other functions, such as evaluating information supplied by member-states as more countries conclude additional protocols to their safeguards agreements, according to a 2005 IAEA budget document.   

Additional protocols expand the number of nuclear-related activities and facilities that an NPT member-state must declare, as well as augment the agency’s authority to detect undeclared nuclear activities. So far, 82 out of 189 NPT states-parties have additional protocols in force; another 30 have signed them.           

A former senior IAEA official pointed out, however, that there are only a few states with significant nuclear activities that do not have an additional protocol in force.           

The IAEA would also be tasked with monitoring a multilateral North Korean nuclear agreement as well as a nuclear cooperation deal between the United States and India, if either became a reality (see pages 41 and 42).

Nongovernmental experts interviewed by Arms Control Today in June agreed that the IAEA needs a budget increase immediately. Government officials have made similar claims. For example, Ambassador Abdul Minty, South Africa’s representative to the IAEA Board of Governors, warned in a June 14 statement that the IAEA’s current budget situation could result in the “weakening” of the agency.

The State Department fact sheet also acknowledged that the agency needs additional funding. But in a June 21 interview with Arms Control Today, a knowledgeable U.S. official said that the urgency of ElBaradei’s case is “not proven.”

Agency officials and nongovernmental experts, meanwhile, have identified a number of IAEA functions that could be adversely affected by current budget levels. These include a number of issues related to the IAEA’s safeguards mandate. Indeed, ElBaradei warned June 15 that the agency’s “safeguards function is being eroded over time.”

As one example, he cited the state of the IAEA’s laboratories, asserting June 11 that they “are full of equipment that is outdated.” As a result, ElBaradei added June 15, the agency must “rely on a very small number of external laboratories” for analyses of environmental samples.

Both Matthew Bunn, a former Clinton administration official who is currently a senior research associate at Harvard University, and Andreas Persbo, a researcher at the Verification Research, Training, and Information Center, agreed with ElBaradei’s assessment.

The agency takes environmental samples from countries’ nuclear facilities in order to determine, for example, if a country used them for secret activities involving nuclear material. The use of such samples is expected to increase, according to the 2005 budget document.

Additionally, the former IAEA official argued that the IAEA will need to buy more satellite images for its future safeguards work.

Both ElBaradei and Bunn have indicated that the IAEA needs additional as well as new types of equipment for conducting its safeguards activities.

Both also have argued that the agency’s budget for nuclear security is too low. ElBaradei complained June 15 that the IAEA relies on “highly unpredictable” voluntary contributions for 90 percent of that budget.

Safeguards Committee Ends Work

Meanwhile, a committee established in June 2005 to consider methods for improving IAEA safeguards has ended its work without making any recommendations.

The United States pushed the IAEA board to establish the Advisory Committee on Safeguards and Verification after President George W. Bush called for its formation in a 2004 speech. The committee, which was granted a two-year term, was expected to provide advice to the board on whether current safeguards are sufficient for dealing with potential proliferation challenges, such as clandestine nuclear programs and the threat of nuclear terrorism. (See ACT, July/August 2006.)

A Vienna-based diplomat told Arms Control Today June 21 that the committee, which held a total of six meetings, was ultimately unable to reach consensus on a list of 18 recommendations provided by the IAEA secretariat.

ElBaradei stated in June 2005 that the IAEA board would decide after two years whether to extend the committee’s mandate. However, “there are no immediate plans” for continuing its work, the Vienna diplomat said.

The diplomat added that the committee was supposed to generate ideas for improving safeguards, but disagreements among the members prevented this, leading the group to ask the secretariat to provide recommendations.

The secretariat circulated technical papers in May 2006 that described measures to improve the safeguards system, including augmenting the capabilities of the agency’s laboratory network, encouraging states to provide the agency with data about nuclear-related transactions, and expanding the list of materials and equipment that NPT states-parties are required to declare under additional protocols. The secretariat also suggested means of increasing the IAEA’s use of satellite imagery, but the diplomat said that the committee’s discussions about the subject were not productive.

From the beginning, the committee was characterized by its members’ lack of willingness to be “constructive,” the diplomat said, explaining that many states perceived the process to be “political” rather than “technical.” Disagreement about persistently contentious issues related to the NPT, such as whether states-parties should place more emphasis on non-nuclear-weapon states’ compliance with safeguards obligations or nuclear-weapon states’ obligations to reduce their nuclear arsenals, contributed to the committee’s lack of progress, the diplomat said.

Corrected online August 29, 2008. See explanation.