Nuclear Nonproliferation
IAEA Has Strengthened Its Safeguards and Nuclear Security Programs, but Weaknesses Need to Be Addressed Gao ID: GAO-06-93 October 7, 2005The International Atomic Energy Agency's (IAEA) safeguards system has been a cornerstone of U.S. efforts to prevent nuclear weapons proliferation since the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) was adopted in 1970. IAEA has strengthened its safeguards system and increased efforts to combat nuclear terrorism by helping countries secure nuclear and radioactive material and facilities. This report (1) identifies the steps IAEA has taken to strengthen safeguards, (2) assesses the challenges in implementing strengthened safeguards, (3) identifies U.S. financial support for safeguards, and (4) describes IAEA's efforts to help secure nuclear material and facilities.
IAEA has taken steps to strengthen safeguards, including conducting more intrusive inspections, to seek assurances that countries are not developing clandestine weapons programs. IAEA has begun to develop the capability to independently evaluate all aspects of a country's nuclear activities rather than only verifying the peaceful use of a country's declared nuclear material. IAEA is also taking steps to improve the management of the safeguards program. However, despite successes in uncovering some countries' undeclared nuclear activities, safeguards experts cautioned that a determined country can still conceal a nuclear weapons program. IAEA faces challenges that limit its ability to implement strengthened safeguards. First, about two-thirds of NPT signatories have not brought the Additional Protocol, which is designed to give the agency new authority to search for clandestine nuclear activities, into force. Second, safeguards are significantly limited or not applied to many NPT signatories because they possess small quantities of nuclear material or they have not concluded a comprehensive safeguards agreement. Third, IAEA faces a looming human capital crisis caused by the large number of inspectors and safeguards management personnel expected to retire in the next 5 years. Finally, IAEA does not have a system in place to measure how effective its strengthened safeguards system is in detecting undeclared nuclear activities. For 2004, the United States is providing $45.3 million to support IAEA safeguards in assessed and voluntary cash contributions--over 34 percent of IAEA's safeguards budget. In addition, various U.S. agencies provided an estimated $27.2 million in technical support. IAEA's reliance on voluntary contributions, particularly from the United States, will continue despite the agency's recent budget increase. Finally, the agency does not have a process in place to systematically evaluate long-term resource requirements. IAEA has increased its efforts to help countries improve the physical protection of nuclear materials and facilities, secure other radioactive materials, and respond to acts of terrorism. In 2002, IAEA established a Nuclear Security Fund to which countries have voluntarily contributed $36.7 million. However, IAEA's reliance on these voluntary funds creates budgetary challenges, and State Department officials raised concerns about the agency's inability to measure the results of its efforts.
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Director: Team: Phone:GAO-06-93, Nuclear Nonproliferation: IAEA Has Strengthened Its Safeguards and Nuclear Security Programs, but Weaknesses Need to Be Addressed
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Report to Congressional Requesters:
October 2005:
Nuclear Nonproliferation:
IAEA Has Strengthened Its Safeguards and Nuclear Security Programs, but
Weaknesses Need to Be Addressed:
GAO-06-93:
GAO Highlights:
Highlights of GAO-06-93, a report to congressional requesters:
Why GAO Did This Study:
The International Atomic Energy Agency‘s (IAEA) safeguards system has
been a cornerstone of U.S. efforts to prevent nuclear weapons
proliferation since the Treaty on the Non-Proliferation of Nuclear
Weapons (NPT) was adopted in 1970. IAEA has strengthened its safeguards
system and increased efforts to combat nuclear terrorism by helping
countries secure nuclear and radioactive material and facilities. This
report (1) identifies the steps IAEA has taken to strengthen
safeguards, (2) assesses the challenges in implementing strengthened
safeguards, (3) identifies U.S. financial support for safeguards, and
(4) describes IAEA‘s efforts to help secure nuclear material and
facilities.
What GAO Found:
IAEA has taken steps to strengthen safeguards, including conducting
more intrusive inspections, to seek assurances that countries are not
developing clandestine weapons programs. IAEA has begun to develop the
capability to independently evaluate all aspects of a country‘s nuclear
activities rather than only verifying the peaceful use of a country‘s
declared nuclear material. IAEA is also taking steps to improve the
management of the safeguards program. However, despite successes in
uncovering some countries‘ undeclared nuclear activities, safeguards
experts cautioned that a determined country can still conceal a nuclear
weapons program.
IAEA faces challenges that limit its ability to implement strengthened
safeguards. First, about two-thirds of NPT signatories have not brought
the Additional Protocol, which is designed to give the agency new
authority to search for clandestine nuclear activities, into force.
Second, safeguards are significantly limited or not applied to many NPT
signatories because they possess small quantities of nuclear material
or they have not concluded a comprehensive safeguards agreement. Third,
IAEA faces a looming human capital crisis caused by the large number of
inspectors and safeguards management personnel expected to retire in
the next 5 years. Finally, IAEA does not have a system in place to
measure how effective its strengthened safeguards system is in
detecting undeclared nuclear activities.
For 2004, the United States is providing $45.3 million to support IAEA
safeguards in assessed and voluntary cash contributions”over 34 percent
of IAEA‘s safeguards budget. In addition, various U.S. agencies
provided an estimated $27.2 million in technical support. IAEA‘s
reliance on voluntary contributions, particularly from the United
States, will continue despite the agency‘s recent budget increase.
Finally, the agency does not have a process in place to systematically
evaluate long-term resource requirements.
IAEA has increased its efforts to help countries improve the physical
protection of nuclear materials and facilities, secure other
radioactive materials, and respond to acts of terrorism. In 2002, IAEA
established a Nuclear Security Fund to which countries have voluntarily
contributed $36.7 million. However, IAEA‘s reliance on these voluntary
funds creates budgetary challenges, and State Department officials
raised concerns about the agency‘s inability to measure the results of
its efforts.
IAEA Inspectors Performing Safeguards Duties:
[See PDF for image]
[End of figure]
What GAO Recommends:
GAO recommends, among other things, that the Department of State work
with IAEA to consider (1) eliminating or reducing the number of
agreements that limit IAEA‘s authority to implement strengthened
safeguards in countries with small quantities of nuclear material, (2)
establishing better measures to evaluate the effectiveness of
safeguards and nuclear security activities, and (3) rectifying human
capital practices that negatively impact IAEA‘s ability to recruit and
retain critical safeguards staff. The Department of State generally
agreed with our recommendations. IAEA provided technical comments,
which we incorporated into the report.
www.gao.gov/cgi-bin/getrpt?GAO-06-93.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gene Aloise at (202) 512-
3841 or aloisee@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
IAEA Has Taken Steps to Strengthen Safeguards, but Detecting
Clandestine Nuclear Weapons Programs Is Not Assured:
IAEA Faces Challenges That Impede Its Ability to Effectively Implement
Strengthened Safeguards:
IAEA Depends Heavily on U.S. Financial Support to Meet Its Safeguards
Obligations:
IAEA Has Increased Efforts to Help Countries Protect Their Nuclear
Material and Facilities, but Reliance on Voluntary Contributions Poses
a Challenge:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Countries' Safeguards Agreements with IAEA That Are In
Force, as of July 2005:
Appendix III: Comments from the Department of State:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Contributions to IAEA's Safeguards Budget from 1998 through
2004:
Table 2: U.S. Nuclear Security Fund Contributions, 2002-2004:
Figures:
Figure 1: Types of Information Used by IAEA to Verify Countries'
Compliance with Their Safeguards Obligations:
Figure 2: Status of the Additional Protocol by Country:
Figure 3: U.S. Contributions to IAEA's Safeguards Program for 2004:
Abbreviations:
DOD: Department of Defense:
DOE: Department of Energy:
EURATOM: European Atomic Energy Community:
IAEA: International Atomic Energy Agency:
NPT: Treaty on the Non-Proliferation of Nuclear Weapons:
NRC: Nuclear Regulatory Commission:
MOX: Mixed plutonium/uranium oxide fuel:
POTAS: U.S. Program of Technical Assistance to IAEA Safeguards:
Letter October 7, 2005:
The Honorable Norm Coleman:
Chairman:
Permanent Subcommittee on Investigations:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Bennie Thompson:
Ranking Member:
Committee on Homeland Security:
House of Representatives:
Revelations about the clandestine nuclear programs of North Korea,
Iran, and Libya, as well as clandestine nuclear trafficking networks,
have significantly increased international concerns about the spread of
weapons of mass destruction. In February 2004, President Bush
highlighted the proliferation dangers of nuclear weapons and called on
the international community to support the International Atomic Energy
Agency's (IAEA) strengthened safeguards measures.[Footnote 1] Since the
Treaty on the Non-Proliferation of Nuclear Weapons (NPT) came into
force in 1970, IAEA's safeguards system has been a cornerstone of U.S.
and international efforts to prevent nuclear weapons proliferation. The
NPT expanded IAEA's original inspection responsibilities by requiring
signatory non-nuclear weapons states--countries that had not
manufactured and detonated a nuclear device before January 1, 1967--to
agree not to acquire nuclear weapons and to accept IAEA safeguards on
all nuclear material used in peaceful activities.[Footnote 2]
Safeguards allow the agency to independently verify that non-nuclear
weapons states that signed the NPT are complying with its requirements.
Under the safeguards system, IAEA, among other things, inspects all
facilities and locations containing nuclear material declared by
countries to verify its peaceful use. Inspectors from IAEA's Department
of Safeguards verify that the quantities of nuclear material that these
non-nuclear weapons states declared to the agency have not been
diverted for other uses. In addition, the agency installs containment
and surveillance measures, such as video cameras, to detect movement of
nuclear material and tampering with agency equipment. As of December
2004, 923 facilities and other locations containing about 164,000
metric tons of nuclear material were under safeguards. In 2004, IAEA's
safeguards budget was approximately $115.2 million, or about 38 percent
of IAEA's total budget.
The discovery in 1991 of a clandestine nuclear weapons program in Iraq
confirmed the need for a broader and more effective approach to
safeguards. As a result, IAEA began a two-stage process of
strengthening its safeguards system to provide assurance that non-
nuclear weapons states were not engaged in undeclared nuclear
activities. First, in the early 1990s, IAEA began using its existing
authority under safeguards agreements with individual countries to
obtain additional information about states' nuclear and nuclear-related
activities. Most countries have negotiated an agreement with IAEA,
known as a comprehensive safeguards agreement. Second, in 1997, IAEA's
Board of Governors approved what it called the "Model Additional
Protocol," which, when brought into force, requires countries to
provide the agency with a broader range of information on its nuclear
and nuclear-related activities. It also gives the agency's inspectors
access to an expanded range of declared activities and locations,
including buildings at nuclear sites, and locations where undeclared
activities are suspected. The Additional Protocol is a separate
agreement, which supplements each country's existing safeguards
agreement with IAEA.
In addition to its safeguards activities, IAEA has been called upon by
its member states to confront the threat of nuclear terrorism. For
example, since 1995, IAEA's nuclear security program has helped member
states improve the security of their nuclear material by assessing the
vulnerability of their nuclear facilities. Additionally, IAEA has
helped states to meet their responsibilities under the Convention on
the Physical Protection of Nuclear Material, which entered into force
in 1987 and, among other things, binds its signatories to ensure
certain levels of physical protection while transporting nuclear
materials internationally. In light of the September 11, 2001 attacks,
IAEA increased its nuclear security efforts by developing and updating
physical protection guidelines and recommendations to help countries
improve the security of their nuclear facilities and helping countries
install radiation detection equipment at their borders to try and
prevent illicit trafficking of nuclear materials.
As the largest contributor to IAEA, the United States has a strong
interest in supporting and improving IAEA's safeguards system and
nuclear security activities to curb the spread of weapons of mass
destruction. In July 1998, we reported that IAEA had tested and started
to implement strengthened safeguards measures, but that it was too
early to assess IAEA's progress.[Footnote 3] In this context, you asked
us to review IAEA's safeguards and nuclear security activities. This
report (1) identifies the steps IAEA has taken to strengthen its
safeguards system, (2) assesses the challenges IAEA faces in
implementing its strengthened safeguards measures, (3) identifies the
extent to which IAEA relies on the United States for safeguards
budgetary support, and (4) describes how IAEA is helping its member
states secure their nuclear material and facilities and identifies
challenges to implementing the program.
To address these objectives, we collected and analyzed documentation
related to IAEA's safeguards and nuclear security programs from IAEA
and U.S. agencies, including the Departments of Commerce, Defense
(DOD), Energy (DOE), and State and the Nuclear Regulatory Commission
(NRC). We also interviewed key IAEA and U.S. agency officials. In
addition, we conducted structured interviews based on a nonprobability
sample to obtain the views of representatives of nine IAEA member
states--Canada, China, Germany, Hungary, Israel, Japan, Russia, the
United Kingdom, and the United States--on IAEA's safeguards and nuclear
security programs.[Footnote 4] This sample included states that
belonged to IAEA's Board of Governors, both nuclear and non-nuclear
weapons states, and states with special safeguards agreements with
IAEA. We also analyzed budgetary information, performed a data
reliability assessment of the data we obtained, and interviewed
knowledgeable IAEA and U.S. officials on the reliability of the data.
We determined that these data were sufficiently reliable for the
purposes of this report. We conducted our work from October 2004 to
August 2005 in accordance with generally accepted government auditing
standards. Appendix I provides a more detailed discussion of our
methodology.
Results in Brief:
IAEA has taken steps to strengthen safeguards by more aggressively
seeking assurances that countries have not engaged in clandestine
nuclear activities, but the agency still cannot be certain that
countries are not developing secret weapons programs. In a radical
departure from the past practice of only verifying the peaceful use of
a country's declared nuclear material at declared facilities, IAEA has
begun to develop the capability to independently evaluate all aspects
of a country's nuclear activities by, among other things, conducting
more intrusive inspections and collecting and analyzing environmental
samples to detect traces of nuclear material at facilities and other
locations. In addition, IAEA is trying to improve the efficiency of its
efforts by applying integrated safeguards, which could result in a
reduction in the number of inspections in certain countries. IAEA is
also taking a number of steps to strengthen its management of the
safeguards program. For example, current initiatives include developing
multiyear strategic plans and modernizing the agency's safeguards
information management system. Finally, although Department of State
and IAEA officials told us that IAEA's strengthened safeguards measures
have successfully revealed previously undisclosed nuclear activities in
Iran, South Korea, and Egypt, IAEA's former Deputy Director General for
Safeguards and a group of safeguards experts cautioned that a
determined country can still conceal a nuclear weapons program.
IAEA faces a number of challenges that hamper its ability to
effectively implement strengthened safeguards. First, about two-
thirds, or 120 out of 189, of the NPT signatories have not yet brought
the Additional Protocol into force, including the United States.
Impediments to expanding adoption of the Additional Protocol include,
among other things, the financial costs associated with implementing
it. A second challenge to implementing strengthened safeguards is that
safeguards are significantly limited or not applied in about 60
percent, or 113 out of 189, of the NPT signatory countries--either
because they have an agreement (known as a small quantities protocol)
with IAEA, and are not subject to most safeguards measures, or because
they have not concluded a comprehensive safeguards agreement with IAEA.
IAEA cannot verify that these countries are not diverting nuclear
material for non-peaceful purposes or engaging in secret nuclear
activities. Third, while IAEA is increasingly relying on the analytical
skills of its staff to detect countries' undeclared nuclear activities,
the agency is facing a looming human capital crisis. In the next 5
years, IAEA will experience a large turnover of senior safeguards
inspectors and high-level management officials. Delays in filling
critical safeguards positions and a shrinking pool of nuclear experts
limit IAEA's ability to implement strengthened safeguards. Further,
personnel policies, such as a mandatory retirement age, impede IAEA's
ability to hire and retain staff with critical safeguards skills. For
example, IAEA would not hire one expert with unique skills in
environmental sample analysis because he was over the agency's
retirement age. Consequently, to retain his skills, the United States
hired him as a part-time consultant to IAEA. Finally, IAEA does not
have a system in place to measure how effective its strengthened
safeguards system is in detecting undeclared nuclear activities.
IAEA relies heavily on the United States to meet its safeguards
obligations, and this situation is likely to continue despite IAEA's
recent budget increase. For 2004, the United States is providing $45.3
million to support IAEA's safeguards program in assessed and voluntary
cash contributions--over 34 percent of IAEA's total safeguards budget.
In addition, in 2004, the U.S. Departments of State, Energy, and
Defense and the Nuclear Regulatory Commission provided an estimated
$27.2 million in technical support for activities such as analyzing
environmental samples to detect the presence of nuclear material. In
2004, IAEA's safeguards budget was increased for the first time in 20
years (beyond adjustments for inflation and staff salaries) by about
$19 million to be phased in over a 4-year period. However, despite this
increase, U.S. and IAEA officials said that IAEA is likely to continue
to rely on voluntary contributions--in particular, those from the
United States--to meet critical needs because of the agency's growing
responsibilities under strengthened safeguards. Finally, IAEA does not
have a process to systematically evaluate resource requirements more
than 2 years into the future or develop reliable estimates of the costs
of all its safeguards activities. Without a systematic process to
evaluate requirements and their costs over the long term, IAEA cannot
make a convincing case to its member states that the agency requires
additional resources.
In the aftermath of September 11, 2001, IAEA increased its efforts to
help countries improve the physical protection of nuclear material and
facilities, secure other radioactive materials, and respond to
malicious acts or threats. However, IAEA's reliance on voluntary funds
for these efforts creates challenges, and Department of State officials
raised concerns about the agency's inability to measure the results of
its efforts. Specifically, to help countries improve their nuclear
security, IAEA, among other things, assesses the vulnerability of
facilities to better protect them against sabotage and helps provide
radiation detection equipment to prevent illicit trafficking in nuclear
and radioactive materials. In 2002, IAEA established a Nuclear Security
Fund to support these activities, and countries provided about $36.7
million as of mid-May 2005. However, IAEA relies on this voluntary
support for about 89 percent of its nuclear security funding, which
creates a budgetary challenge to long-term planning because funding
levels vary from year to year. Furthermore, in 2003, over 94 percent of
these funds were earmarked by donors for specific activities. As a
result, IAEA does not have the flexibility to allocate contributions to
meet its highest priority needs. In addition, Department of State
officials raised concerns about IAEA's inability to track the use of
nuclear security funds and measure achievements in a systematic way. In
response, IAEA developed a system to monitor and report on program
expenditures. However, IAEA still does not systematically measure the
impact of its nuclear security activities.
To help strengthen IAEA's safeguards system and nuclear security
program, this report makes several recommendations. We recommend, among
other things, that the Secretary of State, working with IAEA and its
member states through the Board of Governors, consider (1) eliminating,
or at a minimum, reducing the number of agreements, which limit IAEA's
authority to implement strengthened safeguards activities in countries
with small quantities of nuclear material; (2) establishing clear and
meaningful measures to better evaluate the effectiveness of safeguards
and nuclear security activities; and (3) rectifying human capital
practices that negatively impact IAEA's ability to recruit and retain
critical safeguards staff.
We provided the Department of State and IAEA with draft copies of this
report for their review and comment. IAEA provided technical comments,
which we incorporated as appropriate. In its written comments, the
Department of State generally agreed with our findings, conclusions,
and recommendations and noted that our recommendations offered
reasonable ways that the administration can continue to work with IAEA
to improve its effectiveness. State also noted that the draft report
fairly recognized the significant progress IAEA has made, with support
from the United States and other member states, in strengthening the
safeguards system and in supporting international efforts to improve
the physical protection and security of nuclear materials. State also
provided technical comments, which we incorporated in the report as
appropriate.
Background:
IAEA is an independent organization affiliated with the United Nations.
Its governing bodies include the General Conference, composed of
representatives of the 138 IAEA member states, and the 35-member Board
of Governors, which provides overall policy direction and oversight. A
Secretariat, headed by the Director General, is responsible for
implementing the policies and programs of the General Conference and
Board of Governors. The United States is a permanent member of the
Board of Governors. IAEA funds its programs through its regular budget,
for which all members are assessed, and by voluntary cash contributions
and technical support from member states, including the United States.
U.S. policy regarding the agency is developed by an interagency process
chaired by the Department of State. The U.S. Mission to the U.N. System
Organizations in Vienna, Austria, works closely with the department in
Washington, D.C., to promote the effective function of the agency,
including management reform.
IAEA derives its authority to establish and administer safeguards from
its statute, the Treaty on the Non-Proliferation of Nuclear Weapons and
regional nonproliferation treaties, bilateral commitments between
states, and project agreements with states.[Footnote 5] Since the NPT
came into force in 1970, it has been subject to review by signatory
states every 5 years. The 1995 NPT Review and Extension conference
extended the life of the treaty indefinitely, and the latest review
conference occurred in May 2005. Article III of the NPT binds each of
the treaty's 184 signatory states that had not manufactured and
exploded a nuclear device prior to January 1, 1967 (referred to in the
treaty as non-nuclear weapon states) to conclude an agreement with IAEA
that applies safeguards to all source and special nuclear material in
all peaceful nuclear activities within the state's territory, under its
jurisdiction, or carried out anywhere under its control.[Footnote 6]
The five nuclear weapons states that are parties to the NPT--China,
France, the Russian Federation, the United Kingdom, and the United
States--are not obligated by the NPT to accept IAEA safeguards.
However, each nuclear weapons state has voluntarily entered into
legally binding safeguards agreements with IAEA, and have submitted
designated nuclear materials and facilities to IAEA safeguards to
demonstrate to the non-nuclear weapon states their willingness to share
in the administrative and commercial costs of safeguards. (App. II
lists states that are subject to safeguards, as of July 2005.)
As of July 2005, all but four countries with significant nuclear
activities had comprehensive safeguards agreements with IAEA in force.
India, Israel, and Pakistan are not parties to the NPT or other
regional nonproliferation treaties.[Footnote 7] As a result, they do
not have comprehensive safeguards agreements with IAEA. Instead, these
three states have IAEA safeguards agreements that limit the scope of
the agency's safeguards activities to specific material, equipment, and
facilities. India and Pakistan are known to have nuclear weapons
programs and to have detonated several nuclear devices during May 1998.
Israel is also believed to have produced nuclear weapons. Additionally,
North Korea joined the NPT in 1985 and briefly accepted safeguards in
1992 and 1993, but expelled inspectors and threatened to withdraw from
the NPT when IAEA inspections uncovered evidence of undeclared
plutonium production. North Korea announced its withdrawal from the NPT
in early 2003, which under the terms of the treaty, terminated its
comprehensive safeguards agreement.
IAEA's safeguards objectives, as traditionally applied under
comprehensive safeguards agreements, are to account for the amount of a
specific type of material necessary to produce a nuclear weapon, and
the time it would take a state to divert this material from peaceful
use and produce a nuclear weapon. IAEA attempts to meet these
objectives by using a set of activities by which it seeks to verify
that nuclear material subject to safeguards is not diverted to nuclear
weapons or other proscribed purposes. For example, IAEA inspectors
visit a facility at certain intervals to ensure that any diversion of
nuclear material is detected before a state has had time to produce a
nuclear weapon. IAEA also uses material-accounting measures to verify
quantities of nuclear material declared to the agency and any changes
in the quantities over time. Additionally, containment measures are
used to control access to and the movement of nuclear material.
Finally, IAEA deploys surveillance devices, such as video cameras, to
detect the movements of nuclear material and discourage tampering with
IAEA's containment measures.
In addition to IAEA's long-standing role in safeguarding nuclear
materials, it has undertaken efforts to assist states in better
securing their nuclear materials. In 1972, IAEA issued a set of
guidelines that outlined the minimum standards for ensuring the
physical protection of nuclear materials. Following the breakup of the
Soviet Union, concern about smuggling nuclear and other radioactive
materials increased. In 1992, IAEA started assisting former Soviet
states to enhance the security of their nuclear materials. IAEA also
established a database to systematically collect information on
reported incidents of trafficking in radioactive materials.
Additionally, in 1994, the Board of Governors agreed to enhance the
services that IAEA could offer countries to improve the protection of
nuclear material and to detect and suppress trafficking of nuclear
materials. For example, in 1996, IAEA started conducting advisory
missions at states' request that involved assessing the physical
protection of nuclear materials at a facility.
IAEA Has Taken Steps to Strengthen Safeguards, but Detecting
Clandestine Nuclear Weapons Programs Is Not Assured:
IAEA has taken steps to strengthen safeguards by more aggressively
seeking assurances that a country is not pursuing a clandestine nuclear
program. In a radical departure from past practices of only verifying
the peaceful use of a country's declared nuclear material at declared
facilities, IAEA has begun to develop the capability to independently
evaluate all aspects of a country's nuclear activities. IAEA is trying
to improve the efficiency of its efforts by applying integrated
safeguards which could result in a reduction in the number of
inspections in countries that have a proven record of complying with
safeguards. In addition, the agency is taking a number of steps to
strengthen its management of the safeguards program. Finally,
Department of State and IAEA officials told us that strengthened
safeguards measures have successfully revealed previously undisclosed
nuclear activities in Iran, South Korea, and Egypt. However, a group of
safeguards experts recently cautioned that a determined country can
still conceal a nuclear weapons program.
Strengthened Safeguards Have Broadened IAEA's Focus to Examine All
Nuclear Activities in a Country:
Over the past decade, IAEA has taken steps to strengthen its safeguards
system to detect clandestine nuclear activities. These strengthened
safeguards are a radical departure from the agency's traditional
safeguards approach, which focused on verifying that declared nuclear
material at specific facilities or locations in a country had not been
diverted for nuclear weapons. While the strengthened safeguards system
continues to rely on traditional nuclear material accountancy, and
containment and surveillance measures to ensure declared material is
not diverted, IAEA has broadened its focus from declared nuclear
materials to a more comprehensive assessment of a country's nuclear
activities. The first strengthened safeguards steps, which began in the
early 1990s, increased the agency's ability to monitor declared and
undeclared activities at nuclear facilities. These measures were
implemented under the agency's existing legal authority under
comprehensive safeguards agreements at declared nuclear facilities and
include (1) conducting short notice and unannounced inspections, (2)
taking location-specific environmental samples inside facilities to
detect traces of nuclear material, and (3) using measurement and
surveillance systems that operate unattended and can be used to
transmit data about the status of nuclear materials directly to IAEA
headquarters. IAEA reported that in 2004 it performed 2,302 inspections
at 598 facilities and other locations and took 590 environmental
samples at 90 facilities. In addition, by June 2004, it had installed
91 unattended monitoring systems in 44 nuclear facilities.
The second series of steps under strengthened safeguards began in 1997
when IAEA's Board of Governors approved the Additional
Protocol.[Footnote 8] The Additional Protocol is designed to supplement
countries' safeguards agreements by requiring countries to provide IAEA
with broader information on and access to nuclear and nuclear-related
activities. Because the Additional Protocol broadens IAEA's authority
and the requirements on countries under existing comprehensive
safeguards agreements, each country must take certain actions to bring
it into force. Under the Additional Protocol, IAEA has the right to:
* receive more comprehensive information from a country about all
aspects of its nuclear fuel cycle,[Footnote 9] including information
about research and development on the fuel cycle, the manufacturing and
exporting of sensitive and other key nuclear-related equipment, and all
buildings on a nuclear site, and compare this information with
information from other sources;
* conduct "complementary access," which enables IAEA to expand its
inspection rights for the purpose of ensuring the absence of undeclared
nuclear material and activities; and:
* collect environmental samples beyond declared nuclear facilities,
when deemed necessary.
When IAEA can use the full range of strengthened safeguards measures
(under a comprehensive safeguards agreement and the Additional
Protocol), the agency can provide assurances that all declared nuclear
material is being used for peaceful purposes and that a country has
declared all of its nuclear material or activities, as required. In
2004, the agency reported that comprehensive safeguards agreements with
the Additional Protocol were implemented in 61 countries and
Taiwan,[Footnote 10] and that:
* for 21 countries, there was no indication of the diversion of nuclear
material placed under safeguards and no indication of undeclared
nuclear material or activities for the country as a whole. On this
basis, IAEA concluded that all nuclear material in these countries
remained in peaceful use or was otherwise adequately accounted for;
* for an additional 37 countries (plus Taiwan), there was no indication
of the diversion of nuclear material placed under safeguards, and
evaluations aimed at drawing conclusions about the absence of
undeclared nuclear material and activities had not been completed; and:
* three countries (Iran, Libya, and South Korea) were engaged in
previously undisclosed nuclear activities and therefore were not
complying with their respective safeguards agreements. Although Iran
and Libya have not formally brought the Additional Protocol into force,
they have informed IAEA that they are acting as if the agreement has
been implemented.
For each country with a safeguards agreement, IAEA independently
evaluates all information available about the country's nuclear
activities and draws conclusions regarding a country's compliance with
its safeguards commitments. Major sources of information available to
the agency include data submitted by countries to IAEA under their
safeguards agreements--referred to as state declarations--and
information from internal IAEA databases, open sources, third parties,
and IAEA inspections. Countries are required to provide an expanded
declaration of their nuclear activities under the Additional Protocol
within 180 days of bringing the Additional Protocol into force.
Examples of information provided in an Additional Protocol declaration
include the manufacturing of key nuclear-related equipment; research
and development activities related to the nuclear fuel cycle; the use
and contents of buildings on a nuclear site; the location and
operational status of uranium mines; and the quantities, uses, and
locations of nuclear material exempted from safeguards. The agency uses
the state declarations as a starting point to determine if the
information provided by the country is consistent and accurate with all
other information available based on its own review. A confidential
document, known as a state evaluation report, serves as the basis of
IAEA's assessment of a country's compliance with its safeguards
commitments.
State evaluations are central to the process by which safeguards
conclusions are drawn. For a state with an Additional Protocol in
force, drawing the initial broader conclusion regarding the absence of
undeclared nuclear material and activities for the country as a whole
can take several years to complete depending on (1) the size of a
country's nuclear program, (2) whether there are gaps in the data
submitted by the country, and (3) whether there are inconsistencies
between the country's declaration and IAEA's independent evaluation of
that country's nuclear program. IAEA officials told us that the agency
took 5 years to draw the initial broader safeguards conclusion for
Japan because of the volume of information contained in Japan's
declaration and the magnitude of its nuclear program.[Footnote 11]
Drawing the initial broader safeguards conclusion for Canada is also
expected to take a similar amount of time because of the size of its
nuclear program. State evaluation reports are updated annually for a
country after the Additional Protocol is in force. In 2004, 76
evaluation reports were completed and reviewed, including 55 for
countries that had additional protocols in force or were acting as if
they did.
IAEA uses various types of information to verify the state declaration.
Inspections of nuclear facilities and other locations with nuclear
material are the cornerstone of the agency's data collection efforts.
Under an Additional Protocol, IAEA has the authority to conduct
complementary access at any place on a site or other location with
nuclear material in order to ensure the absence of undeclared nuclear
material and activities, confirm the decommissioned status of
facilities where nuclear material was used or stored, and resolve
questions or inconsistencies related to the correctness and
completeness of the information provided by a country on activities at
other declared or undeclared locations. During complementary access,
IAEA inspectors may carry out a number of activities, including (1)
making visual observations, (2) collecting environmental samples, (3)
using radiation detection equipment and measurement devices, and (4)
applying seals. In 2004, IAEA conducted 124 complementary access in 27
countries.
In addition to its verification activities, IAEA uses other sources of
information to evaluate countries' declarations. These sources include
information from the agency's internal databases, open sources,
satellite imagery, and outside groups. The agency established two new
offices within the Department of Safeguards to focus primarily on open
source and satellite imagery data collection. Analysts use Internet
searches to acquire information generally available to the public from
open sources such as scientific literature, trade and export
publications, commercial companies, and the news media. In addition,
the agency uses commercially available satellite imagery to supplement
the information it receives through its open source information.
Satellite imagery is used to monitor the status and condition of
declared nuclear facilities and verify state declarations of certain
sites. The agency also uses its own databases, such as those for
nuclear safety, nuclear waste, and technical cooperation to expand its
general knowledge about countries' nuclear and nuclear-related
activities. In some cases, IAEA receives information from third parties
such as other countries.
Figure 1 shows the types of information IAEA uses to verify a country's
compliance with its safeguards obligations.
Figure 1: Types of Information Used by IAEA to Verify Countries'
Compliance with Their Safeguards Obligations:
[See PDF for image]
[End of figure]
To further enhance its capability to detect undeclared nuclear material
and activities, IAEA collects information about clandestine networks
that are engaged in the illicit trafficking of nuclear material and
equipment. In 2004, the agency established the Nuclear Trade Analysis
Unit that is responsible for investigating and obtaining information
about clandestine networks. The unit's mission includes maintaining
institutional memory of nuclear supply networks, centralizing the
analysis of covert nuclear technology networks, and supporting IAEA's
reviews of state evaluations. Some information used by the unit is
derived from safeguards reports routinely submitted to the agency, such
as state declarations.
IAEA is seeking to streamline and make the safeguards system more
efficient by applying integrated safeguards. Integrated safeguards are
applied in countries (1) that have brought the Additional Protocol into
force and complied with all its requirements; (2) where IAEA, through
complementary access and other means, has resolved any questions or
inconsistencies regarding nuclear activity in these countries; and (3)
where IAEA has concluded that there has been no diversion of nuclear
material and no indication of undeclared nuclear material or
activities. As of July 2005, IAEA was applying integrated safeguards in
eight countries--Australia, Bulgaria, Hungary, Indonesia, Japan,
Norway, Peru, and Uzbekistan. For these countries, IAEA has reduced the
number of routine, scheduled inspections at certain types of
facilities, such as light water reactors and low enriched uranium
conversion plants. Agency officials told us that they anticipate cost-
savings resulting from the implementation of integrated safeguards,
which will free up resources for increased activities in countries
where significant questions and inconsistencies arise.
Although the U.S. government supports the introduction of integrated
safeguards, some concerns have been raised about its implementation.
According to Department of State officials, it is essential that
integrated safeguards not compromise the underlying foundation of
safeguards--routine inspections of nuclear facilities. Verifying that
declared quantities of nuclear material are accounted for and remain
under safeguards continues to be the fundamental basis for reaching
safeguards conclusions that countries are not diverting nuclear
material for clandestine activities. Department of State officials said
that integrated safeguards should be applied slowly and systematically
to ensure that the safeguards system remains credible.
IAEA Is Taking Steps to Improve the Management of the Safeguards
System:
IAEA has several management initiatives under way to support the
strengthened safeguards system, including (1) developing multi-year
strategic plans, (2) modernizing the agency's safeguards information
management system, (3) improving the agency's coordination of efforts
to develop and procure equipment and technology, and (4) expanding the
inspector training program. IAEA has developed 5-year medium-term
strategies that identify specific goals and objectives for critical
agency missions, including safeguards. IAEA's strategy for 2006-2011
calls for the agency's safeguards system to be further strengthened and
its capability to detect undeclared nuclear material and activities
increased. In addition, the strategy calls for IAEA to continue to
utilize new sources of information to help ensure that countries are
not engaged in clandestine nuclear activities. According to IAEA
officials, the strategy requires safeguards program managers to
identify how their specific activities fit into the agency's overall
strategic objectives and medium term plan. These managers are required
to plan and request funding based on the objectives identified in the
medium-term strategies.
Another important initiative is IAEA's efforts to re-engineer the
agency's information management system. This system serves as the
central repository for all safeguards information, and it is used to
generate reports for safeguards inspectors and IAEA management.
According to U.S. and IAEA officials, the information management
system, which started operation in the late 1970s, is outdated and
needs to be modernized. As currently configured, IAEA inspectors and
safeguards personnel cannot easily use the system for analytical
purposes because there is no centralized database. With data stored in
over 40 different databases, the agency dedicates significant amounts
of time and funds to train staff on how to store and retrieve
information. The project to modernize the safeguards information
management system is expected to take about 3-1/2 years to complete and
cost over $30 million. IAEA plans to finance the project through its
regular budget and member states' voluntary contributions. However,
sustained U.S. support for the project, which IAEA expects to amount to
at least 50 percent of the total planned voluntary cash contributions,
is uncertain. In May 2004, the former U.S. ambassador to the U.S.
Mission to the U.N. Systems Organization in Vienna said that the United
States could not commit to pledging continued support for the project
due to, among other things, the lack of contributions by other
countries. He noted that nuclear nonproliferation is a global problem
and that the United States expects IAEA to work with other member
states to secure funding for the project. However, at the time of our
review, only the United States, Germany, the Czech Republic, and the
United Kingdom had pledged voluntary contributions to fund the project.
In 2001, the Department of Safeguards took steps to improve its
equipment management process. As part of this initiative, IAEA's
equipment coordination committee was reorganized to improve its
effectiveness. The committee reviews, prioritizes, and approves
equipment and technology needs for all divisions within the department.
The committee also reviews and approves any equipment-related research
and development projects. IAEA and U.S. government officials told us
that the equipment management process has helped the agency improve
coordination among member states to better plan for the more efficient
use of funds. In addition, IAEA has generated 2-year program plans to
help coordinate funding to implement projects and develop equipment.
For example, in its most recent plan, IAEA identified major priorities,
including developing technology that detects undeclared nuclear
activities and re-engineering its safeguards information management
system.
Finally, IAEA officials told us they recognize that the expansion of
inspectors' responsibilities under strengthened safeguards, in
combination with advanced safeguards equipment and new technology,
significantly increases the amount of training inspectors need. IAEA's
goal is to provide the best training possible to ensure that
inspectors' skills are continuously improved to maintain high standards
of performance, enhance credibility, and promote a sense of
professionalism among the staff. Inspectors must develop expertise in
many new areas while maintaining competence in the application of
material accountancy measures. As a result, IAEA has updated its
training curriculum and continued the development and implementation of
advanced and refresher training on strengthened and integrated
safeguards measures, the Additional Protocol, and the use of new and
upgraded containment and surveillance equipment. In 2005, the agency
introduced a qualification process to ensure that all inspectors have
the necessary knowledge and skills to perform their jobs at an
acceptable level. Training also includes courses to strengthen
analytical skills, including enhanced communication, observation, and
writing skills. Initially, a new inspector performs verification duties
in the field under the supervision of a more experienced inspector.
Once an inspector becomes fully qualified to independently conduct
inspections, additional training is required to maintain skills.
Despite IAEA's recent efforts to strengthen its training program, it is
uncertain the extent to which training alone will adequately prepare
inspectors for their expanding responsibilities under strengthened
safeguards. For example, U.S. safeguards experts, including a former
IAEA inspector, raised concerns about the adequacy of training. One
former inspector told us that all "in-house" training is done in
English, the official working language of the agency. However, she
noted that this makes it difficult for some inspectors who do not have
a good grasp of English to fully absorb and understand the training
materials and oral presentations. In addition, this official said that
IAEA has not implemented a good system to provide mentors to new
inspectors who need practical hands-on experience when they are in the
field performing inspections. Brookhaven National Laboratory officials,
who are responsible for managing the U.S. Program of Technical
Assistance to IAEA Safeguards (POTAS), told us that many of the best
qualified training instructors are leaving IAEA either through
retirement or attrition. In addition, many of these instructors, who
are also full-time inspectors, are facing increased workloads under
strengthened safeguards and have less time to teach. Instructor
staffing difficulty combined with expanding inspector responsibilities
has created a gap in the effective transfer of knowledge and experience
provided to entry-level inspectors.
Strengthened Safeguards Result in Discoveries of Some Countries'
Undisclosed Activities but System Has Limitations:
IAEA's strengthened safeguards system has produced tangible benefits as
some countries' previously undeclared nuclear activities have been
disclosed. In particular, U.S. and IAEA officials noted that in the
cases of Iran, South Korea, and Egypt, strengthened safeguards has
surfaced undeclared activities requiring further investigation and
clarification by the agency. Specifically:
* IAEA and Department of State officials noted that strengthened
safeguards have helped the agency verify Iran's nuclear activities,
although many questions about that country's nuclear program have not
been resolved. In late 2003, Iran agreed to act as if the Additional
Protocol were in force. Iran's acceptance of the Additional Protocol
has enabled the agency to gain increased access to Iran's nuclear
activities. Iran subsequently submitted a declaration of its nuclear
activities, and IAEA has undertaken numerous inspections, conducted
complementary access on numerous occasions, and prepared several status
reports of its findings and concerns for its Board of Governors. In
2004, the agency completed four reports on the status of its efforts in
Iran. IAEA noted that Iran had been providing information in response
to the agency's requests, but in some cases, the information was
presented too slowly and did not fully meet the agency's needs. IAEA
noted that it is not yet prepared to draw definitive conclusions
regarding the correctness and completeness of Iran's declarations, but
the agency continues to make steady progress in understanding the
program. IAEA also noted that it had been able to verify Iran's
suspension of enrichment-related activities at specific facilities and
sites, but key issues still remained regarding the extent and nature of
Iran's enrichment program. Further, the agency stated in its report to
the board that it was important for Iran to support the agency's
efforts to gain a full understanding of all remaining issues by
continuing to provide access to locations, personnel, and relevant
information in order to meet its safeguards obligations.
* In August 2004, as a result of preparations to submit its initial
declaration under the Additional Protocol, South Korea notified IAEA
that it had not previously disclosed nuclear experiments involving the
enrichment of uranium and plutonium separation. Specifically, South
Korea told the agency that the experiments had been on a laboratory
scale, involved the production of only milligram quantities of enriched
uranium, and that these activities had been terminated. Subsequently,
IAEA sent a team of inspectors to South Korea to investigate this case.
In November 2004, IAEA's Director General reported to the Board of
Governors that although the quantities of nuclear material involved
were not significant, the nature of the activities and South Korea's
failure to report these activities in a timely manner posed a serious
concern. IAEA is continuing to verify the correctness and completeness
of South Korea's declarations.
* IAEA inspectors have investigated evidence of past undeclared nuclear
activities in Egypt based on the agency's review of open source
information that had been published by current and former Egyptian
nuclear officials. Specifically, in late 2004, the agency found
evidence that Egypt had engaged in undeclared activities involving
uranium extraction, conversion, and reprocessing at least 20 years ago.
According to available reports, Egypt used small amounts of nuclear
material to conduct experiments related to producing plutonium and
highly enriched uranium. In January 2005, the Egyptian government
announced that it was fully cooperating with IAEA and that the matter
was limited in scope. IAEA inspectors have made several visits to Egypt
to investigate this matter. IAEA's Secretariat reported to its Board of
Governors on these activities in February 2005, but has not drawn any
final conclusions or made recommendations.
Although the strengthened safeguards system has helped IAEA obtain
information about some countries' previously undisclosed nuclear
activities, and provided assurances that other countries are not
engaged in clandestine activities, the system has limitations. These
limitations impact the agency's ability to draw conclusions--with
absolute assurance--about whether a country is developing a clandestine
nuclear weapons program. For example, IAEA does not have unfettered
inspection rights and cannot make visits to suspected sites anywhere at
any time. According to the Additional Protocol, complementary access to
resolve questions related to the correctness and completeness of the
information provided by the country or to resolve inconsistencies must
usually be arranged with at least 24 hours advanced notice.
Complementary access to buildings on sites where IAEA inspectors are
already present are usually conducted with a 2-hour advanced notice.
Furthermore, IAEA officials told us that there are practical problems
that restrict access. For example, inspectors must be issued a visa to
visit certain countries that cannot normally be arranged in less than
24 hours. In some cases, nuclear sites are in remote locations and IAEA
inspectors need to make travel arrangements, such as helicopter
transportation, in advance, which requires that the country be notified
prior to the visit.
IAEA's environmental sampling activities, which play a key role in
detecting undeclared nuclear material and activities, are limited as
well in two main areas. First, IAEA relies on a consortium of
laboratories located in eight countries, including the United States,
known as the Network of Analytical Laboratories, to analyze
environmental samples it obtains. However, according to IAEA and U.S.
officials, the network is being used beyond its capacity to analyze the
significant increase in the number of samples collected from Iran and
Libya. IAEA noted that the number of samples collected from those two
countries from 2003 to 2004 increased by about 100 samples during the
year. The strain on the network's capacity has had a negative impact on
the timely processing and reporting of results from environmental
samples being collected. Officials from the Department of Defense and
the U.S. Air Force Technical Applications Laboratory, which is
responsible for analyzing the majority of environmental samples, told
us that some samples received from IAEA have taken as long as 6 months
to analyze. Even if a sample is a high priority, it takes at least 3
weeks, and the average time to analyze a sample is 2 to 3 months. As a
result, critical, time sensitive analyses are not being completed on a
consistent basis. According to IAEA officials, IAEA needs to increase
the capacity of the network to analyze more samples as more states
bring the Additional Protocol into force.
Second, an environmental sampling technique, which is known as wide
area sampling, can only be used when approved by the Board of
Governors. Wide area sampling, if implemented, would enable the agency
to collect environmental data from soil, rivers, and streams outside of
declared nuclear facilities. However, it has not been approved by the
board because, among other reasons, wide area sampling requires
reductions in cost before it would be practical, according to U.S. and
international experts.
Finally, a November 2004 study by a group of safeguards experts
appointed by IAEA's Director General evaluated the agency's safeguards
program to examine how effectively and efficiently strengthened
safeguards measures were being implemented. Specifically, the group's
mission was to evaluate the progress, effectiveness, and impact of
implementing measures to enhance the agency's ability to draw
conclusions about the nondiversion of nuclear material placed under
safeguards and, for relevant countries, the absence of undeclared
nuclear material and activities. The group concluded that generally
IAEA had done a very good job implementing strengthened safeguards
despite budgetary and other constraints. However, the group noted that
IAEA's ability to detect undeclared activities remains largely
untested. If a country decides to divert nuclear material or conduct
undeclared activities, it will deliberately work to prevent IAEA from
discovering this. Furthermore, IAEA and member states should be clear
that the conclusions drawn by the agency cannot be regarded as
absolute. This view has been reinforced by the former Deputy Director
General for Safeguards who has stated that even for countries with
strengthened safeguards in force, there are limitations on the types of
information and locations accessible to IAEA inspectors.
IAEA Faces Challenges That Impede Its Ability to Effectively Implement
Strengthened Safeguards:
IAEA faces a number of challenges that hamper its ability to
effectively implement strengthened safeguards. First, about two-
thirds, or 120 out of 189, of the NPT signatories have not yet brought
the Additional Protocol into force, including the United States. A
second challenge is that safeguards are significantly limited or not
applied in about 60 percent, or 113 out of 189, of the NPT signatory
countries either because they possess small quantities of nuclear
material--and are not subject to most safeguards measures--or they have
not concluded a comprehensive safeguards agreement with IAEA. IAEA
cannot verify that these countries are not diverting nuclear material
for nonpeaceful purposes or engaging in secret nuclear activities.
Third, IAEA faces a looming human capital crisis. In the next 5 years,
IAEA will experience a large turnover of senior safeguards inspectors
and high-level management officials. Delays in filling critical
safeguards positions, a shrinking pool of nuclear experts, and
restrictive personnel policies, such as a mandatory retirement age,
impede IAEA's ability to hire and retain staff with critical skills.
Finally, IAEA does not have a system in place to measure how effective
its strengthened safeguards system is in detecting undeclared
activities.
IAEA's Ability to Detect Clandestine Nuclear Activities Is Limited
because Many Countries Have Not Adopted the Additional Protocol:
One of the major challenges IAEA faces in implementing strengthened
safeguards is increasing the number of countries that bring the
Additional Protocol into force, which would greatly expand the agency's
access to countries' nuclear programs. Without the Additional Protocol
in force, IAEA has limited ability to detect clandestine nuclear
programs, and its inspection efforts remain focused on declared nuclear
material and facilities. Of the 189 countries that have signed the NPT,
120 (or 63 percent) have not brought the Additional Protocol into
force, including two of the five nuclear weapons states--the United
States and Russia. Figure 2 shows the countries that have brought the
Additional Protocol into force worldwide.
Figure 2: Status of the Additional Protocol by Country:
[See PDF for image]
[End of figure]
Of the 120 countries that have not adopted the Additional Protocol, 28
are engaged in significant nuclear activities,[Footnote 12] including
Argentina, Brazil, Egypt, North Korea, and Syria. Moreover, although
Iran and Libya have allowed IAEA to investigate their past nuclear
activities as if the Additional Protocol were in force, IAEA cannot
fully implement all strengthened safeguards measures, such as
unannounced inspections--an important tool in detecting illicit
activities. Lastly, while 69 countries have brought the Protocol into
force, U.S. officials said that many of these countries do not pose a
significant nuclear proliferation risk.
IAEA has recognized that progress in getting countries to adopt the
Additional Protocol since it was approved by the Board of Governors in
1997 has been slow. In response, the agency has increased its efforts
to encourage countries to adopt the Additional Protocol. In 2001, IAEA
developed and began to implement a strategy to promote the
implementation of the Additional Protocol through a number of outreach
efforts, which included providing experts to assist countries in
preparing their state declarations of nuclear activities and sponsoring
technical workshops and seminars. For example, in 2004, IAEA sponsored
seven training events at the national, regional, and international
levels to improve countries' nuclear material accounting and to explain
what countries' obligations would be under the Additional Protocol.
Since IAEA implemented its strategy, 51 countries have brought the
Additional Protocol into force. Further, in 2004, the United States,
with support from the other G-8 group of countries, the European Union,
and IAEA, sent demarches (or official requests) to 72 countries to urge
them to bring the Additional Protocol into force and provide
information on their efforts to bring it into force. The Department of
State received responses from 47 countries. Finally, in an effort to
draw attention to countries that have not brought the Additional
Protocol into force, IAEA has begun to list their names in its yearly
safeguards report to the Board of Governors.
Despite these efforts, the agency faces a number of challenges in
getting more countries to adopt the Additional Protocol. According to
responses to the Department of State's demarches and discussions with
U.S. and IAEA officials, some member states are hesitant to implement
the Additional Protocol because of (1) concerns about the financial
costs associated with it; (2) an unwillingness to submit to an
intrusive inspection regime; (3) their inadequate regulatory systems to
collect information on all nuclear-related activities; and (4)
political factors, such as the time needed for national legislatures to
approve the Additional Protocol. For example:
* Brazil has delayed signing, stating that the measures under the
Additional Protocol do not need to be universally applied to all
countries and that inspections and IAEA requests for information are
overly intrusive;
* Egypt will not bring the Additional Protocol into force until Israel
signs the NPT, concludes a comprehensive safeguards agreement, and
implements the Additional Protocol; and:
* Serbia and Montenegro's national legislature has to approve the
Additional Protocol before it can proceed with developing an adequate
nuclear regulatory system.
In addition, the United States has been slow to bring its Additional
Protocol into force. According to IAEA officials, this presents a
challenge because it weakens U.S. efforts to encourage other countries
to bring their additional protocols into force. Although the United
States signed its Additional Protocol in June 1998, the U.S. Senate did
not provide its advice and consent until March 2004--a first step
toward U.S. ratification of the Protocol.[Footnote 13] As a condition
for ratifying the Protocol to make it legally binding on the United
States, the Senate directed the President to meet certain conditions,
including completing vulnerability assessments of U.S. nuclear
facilities and developing regulations that limit or exempt certain
nuclear facilities from IAEA inspections where those inspections could
compromise sensitive proprietary or national security information.
Since March 2004, the Departments of State, Energy, Commerce, and
Defense and the Nuclear Regulatory Commission have been involved in
outreach, data collection, and other tasks, such as developing
regulations for commercial nuclear facilities and completing
vulnerability assessments, to meet the Senate's conditions for
ratification. Once the conditions are met, the President must ratify
the Protocol in order to bring it into force. In addition, before the
regulations to implement the Protocol can be published, U.S. officials
said that Congress must pass legislation that establishes the legal
framework for U.S. agencies to collect information on commercial
nuclear activities and facilities, and grant access to IAEA inspectors.
U.S. officials told us that adopting the Additional Protocol would
underscore U.S. support for IAEA's strengthened safeguards system and
make U.S. efforts to encourage more countries to adopt the Additional
Protocol more effective and credible. However, according to officials
from the Departments of Commerce, Defense, Energy, and State and the
Nuclear Regulatory Commission, there is no specific time frame for
meeting the Senate's conditions for ratification.
IAEA Safeguards Are Significantly Limited or Not Applied in More than
Half of the NPT Signatories:
A second major challenge hampering IAEA's ability to implement
strengthened safeguards is that safeguards are significantly limited or
not applied to about 60 percent, or 113 out of 189, of the NPT
signatories: 76 countries with agreements (known as small quantities
protocols) in force that limit the agency's ability to implement most
strengthened safeguards measures and 37 countries that have not
concluded a comprehensive safeguards agreement with the agency. As a
result, IAEA cannot conduct inspections and independently verify that
nuclear material has been placed under safeguards and is not being
diverted to clandestine nuclear activities. In addition, IAEA has
limited information and authority concerning nuclear activities in
countries that are not signatories to the NPT--India, Israel, and
Pakistan--and in North Korea, which recently withdrew from the NPT.
Countries with Small Quantities of Nuclear Material Pose a Weakness to
the Safeguards System:
Countries with small quantities of nuclear material make up about 40
percent of the NPT signatories and almost one-third of the countries
that have the Additional Protocol in force.[Footnote 14] Since 1971,
IAEA's Board of Governors has authorized the Director General to
conclude an agreement, known as a small quantities protocol, with 90
countries and 76 of these agreements were in force, as of July 2005.
IAEA's Board of Governors has approved the protocols for these
countries without having IAEA verify that they met the requirements for
it. Even if these countries bring the Additional Protocol into force,
IAEA does not have the right to conduct inspections or install
surveillance equipment at certain nuclear facilities. According to IAEA
and Department of State officials, this is a weakness in the agency's
ability to detect clandestine nuclear activities or transshipments of
nuclear material and equipment through the country. In February 2005,
IAEA's Director General stated that these small quantities protocols
pose a challenge to the safeguards program. In response, IAEA submitted
a proposal to the Board of Governors recommending that the board stop
approving small quantities protocols and give IAEA the authority to
negotiate with countries to rescind them. At the very minimum, the
proposal recommended that IAEA be allowed to conduct inspections and
limit the protocols to countries without any nuclear facilities. In
September 2005, the Board of Governors endorsed IAEA's view that small
quantities protocols constituted a weakness of the safeguards system
and directed IAEA to negotiate with countries to make changes to the
protocols, including reinstating the agency's right to conduct
inspections.
Some Countries Do Not Have Comprehensive Safeguards Agreements with
IAEA:
The application of safeguards is further limited because 37 countries
that have signed the NPT have not brought into force a comprehensive
safeguards agreement with IAEA. The NPT requires non-nuclear weapons
states to conclude comprehensive safeguards agreements with IAEA within
18 months of becoming a party to the Treaty. However, IAEA's Director
General has stated that these 37 countries have failed to fulfill their
legal obligations. Moreover, 28 of the 37 have not yet brought
comprehensive safeguards agreements into force more than 10 years after
becoming party to the NPT, including Kenya, Niger, and Turkmenistan. In
2005, IAEA reported that some countries do not have comprehensive
safeguards agreements with the agency because they (1) consider
concluding an agreement a low priority compared with other national
priorities, (2) have an insufficient understanding of the legal
requirements to implement safeguards, and (3) lack a nuclear regulatory
system to implement safeguards. As part of its strategy to help
countries better understand and prepare for implementation of
comprehensive safeguards agreements, IAEA is involved in a number of
outreach efforts, such as seminars and workshops. However, according to
IAEA officials, the agency is limited in its ability to encourage
countries to conclude a comprehensive safeguards agreement because the
agency is not responsible for enforcing compliance.
IAEA Has Limited Ability to Assess Nuclear Activities of Countries That
Are Not Members of the NPT:
Another weakness in the strengthened safeguards system is that IAEA has
only limited information about the nuclear activities of India, Israel,
and Pakistan, which are not members of the NPT. Since these three
countries are not signatories to the NPT, they do not have
comprehensive safeguards agreements with IAEA, and are not required to
declare all of their nuclear material to the agency. Instead, they have
special safeguards agreements that limit the scope of the agency's
safeguards activities to monitoring only specific material, equipment,
and facilities. In addition, under their special safeguards agreements,
these countries are required to declare only exports of safeguarded
nuclear material. With the recent revelations of the illicit
international trade in nuclear material and equipment, IAEA officials
told us that they would like more information, in particular, on these
countries' nuclear exports.
IAEA also has limited information on the nuclear activities of North
Korea. North Korea signed the NPT in 1985 and concluded a comprehensive
safeguards agreement with IAEA in 1992. IAEA inspections conducted
between 1992 and 1994 uncovered numerous discrepancies in North Korea's
nuclear material declarations. For example, when IAEA inspectors
conducted environmental sampling tests of equipment at the declared
facilities, they discovered a discrepancy between what North Korea
reported and what the inspectors' independent analysis revealed. Based
on the analysis of these samples, IAEA determined that North Korea
might have continued to reprocess plutonium much later than stated in
its declaration and in much larger quantities than reported. In 1993,
North Korea restricted IAEA's inspection activities and never allowed
the agency to resolve the discrepancies. Beginning in 1994, IAEA's
activities in North Korea were limited to verifying the stoppage, or
freeze, of North Korea's nuclear activities, as called for in an
agreement negotiated between the United States and North Korea. In
December 2002, North Korea expelled IAEA inspectors; removed
surveillance equipment and seals at nuclear facilities; and, in January
2003, announced its withdrawal from the NPT. These actions have raised
widespread concern that North Korea diverted some of its nuclear
material to produce nuclear weapons.
IAEA May Lose Critical Skills and Knowledge because of Difficulties in
Filling Key Positions and Restrictive Personnel Policies:
Another major challenge facing IAEA is a looming human capital crisis
that may hamper the agency's ability to meet its safeguards mission.
About 51 percent, or 38 out of 75, of IAEA's senior safeguards
inspectors and high-level management officials, such as the head of the
Department of Safeguards and the directors responsible for overseeing
all inspection activities of nuclear programs, are retiring in the next
5 years.[Footnote 15] According to U.S. officials, this significant
loss of knowledge and expertise could compromise the quality of
analysis of countries' nuclear programs. For example, several
inspectors with expertise in uranium enrichment techniques, which is a
primary means to produce nuclear weapons material, are retiring at a
time when demand for their skills in detecting clandestine nuclear
activities is growing.
The loss of this expertise raises concerns for IAEA and U.S. officials
because IAEA is finding it increasingly difficult to recruit qualified
inspectors. In 2004, less than 10 percent of the applicants applying
for inspector positions at IAEA were considered well qualified. IAEA's
recruiting difficulties arise because of, among other things, a
shrinking pool of people pursuing careers in the nuclear field in most
countries and intense competition from the private industry for their
services. For example, in 2000, a group of experts from U.S. national
laboratories and the Organization for Economic Cooperation and
Development's Nuclear Energy Agency warned that an alarmingly sharp
downward trend in enrollment in nuclear engineering programs in most
countries, and in particular in the United States, placed the
availability of future nuclear expertise at risk. This downward trend
has continued. As we reported in February 2005, fewer U.S. students
were seeking advanced degrees or technical training in areas such as
science and engineering.[Footnote 16] In addition, according to IAEA
officials, the pool of qualified candidates that would meet all of the
agency's requirements, such as 6 years of experience in the nuclear
field and knowledge of uranium enrichment or fuel reprocessing, can be
found in only a limited number of countries worldwide.
IAEA officials told us that it is also difficult to hire analysts for
critical Department of Safeguards positions. For example, hiring
satellite imagery analysts can be complicated because it may require
approval by the candidates' national governments because of the
sensitive nature of these positions. In addition, in some cases, IAEA
cannot provide competitive salaries for analyst positions. To help meet
certain critical needs, such as open source analysis, the agency hires
consultants, cost-free experts, and interns, primarily from the United
States.
While IAEA has taken a number of steps to address these human capital
issues, officials from the Department of State and the U.S. Mission to
the U.N. System Organizations in Vienna have expressed concern that
IAEA is not adequately planning to replace staff with critical skills
needed to fulfill its strengthened safeguards mission. In 2004, IAEA
began to develop a plan that includes (1) determining skills and
competencies needed to meet strengthened safeguards objectives, (2)
identifying gaps in skills and competencies, (3) implementing human
capital strategies that are targeted toward addressing the gaps, and
(4) evaluating the success of these strategies. According to IAEA
officials, implementing this plan will allow the agency to determine
the number of inspectors and support staff needed, and to develop
better policies and practices to recruit and retain critical staff.
However, at the time of our review, this plan was not in place because
it had not yet been reviewed or approved by the Department of
Safeguards' management. IAEA has also begun to enhance its recruiting
efforts by targeting employees with experience in enrichment and
reprocessing activities at nuclear facilities in five countries with
major nuclear programs. IAEA officials hope that this new approach will
improve the agency's chances of recruiting highly qualified candidates
in an increasingly competitive job market. Despite these recruitment
efforts, Department of State and U.S. Mission officials expressed
concern that IAEA is not acting quickly enough to address the agency's
high turnover rate.
Compounding a likely shortage of staff with critical skills, U.S. and
IAEA officials identified a number of IAEA personnel policies and
practices that hamper the Department of Safeguards' ability to recruit
and retain these highly specialized experts, including (1) a mandatory
retirement age, (2) limits on the number of support staff who
contribute to the analysis of safeguards-related information, and (3)
delays in filling critical positions. First, IAEA's mandatory
retirement age of 62 has hindered the agency's ability to fill critical
skills.[Footnote 17] For example, former IAEA personnel, now with the
Los Alamos National Laboratory, said that the agency is losing senior
safeguards inspectors with unique expertise and knowledge about
countries' nuclear fuel cycles because of mandatory retirements. In one
case, an individual who had worked for IAEA for 25 years and had been a
section head in each of the Department of Safeguards' three operations
divisions was forced to retire. According to Department of State
officials, this policy may be misguided at a time when the agency is
having difficulty finding qualified staff. U.S. officials also told us
that IAEA's mandatory retirement policy is negatively impacting the
United States' ability to provide IAEA with critical technical support.
For example, in 2003, IAEA asked the United States to provide an expert
with a unique expertise in environmental sample analysis--a critical
tool in detecting undeclared nuclear activities--but would not hire him
because he was 62 years old. To prevent losing this expertise, the
United States hired him as a part-time consultant to IAEA but at a
higher cost. Although Department of State officials have raised these
concerns with IAEA officials, IAEA officials have stated that they
follow the United Nations retirement policy, which was approved by
IAEA's Board of Governors, and generally do not make exceptions, even
to hire or retain highly skilled staff.
Second, in 2004, Department of Safeguards officials reported that there
was pressure across the agency to reduce the number of support staff.
They found that this practice was shortsighted because support staff in
the Department of Safeguards include not only secretaries and clerks in
administrative positions, but also technicians who install unattended
remote monitoring equipment and open source information analysts.
According to Department of Safeguards officials who manage support
staff, they do not have enough staff to meet growing strengthened
safeguards requirements, such as technicians and engineers to test and
install new surveillance and remote monitoring equipment. For example,
in 2003, IAEA officials reported that they could not adequately test
and install new surveillance and unattended monitoring systems at
Chernobyl and a facility in Switzerland because of the lack of staff.
This shortage increased the risk of failure of agency equipment because
of accelerated testing and assembly.[Footnote 18] IAEA continues to
rely heavily on the United States to supply experts and short-term
contractors to meet growing demand for these technical services.
Lastly, according to U.S. and IAEA officials, delays in filling
critical safeguards positions limit IAEA's ability to implement
strengthened safeguards measures and detect clandestine activities. In
many cases, a new inspector or support staff member is hired after a
position becomes vacant, and since it takes, on average, 6 months to
hire new staff, the position is vacant for at least that amount of
time. For example, it took more than 2 years to fill a senior
technician position to analyze environmental samples at the Safeguards
Analytical Laboratory. U.S. Mission officials told us that they are
concerned that there may not be sufficient time to pass on the
knowledge and skills of senior safeguards inspectors and other nuclear
experts to new recruits before these more experienced safeguards
personnel retire. While new staff have advanced degrees and previous
work experience, they require additional, job-specific training and
mentoring because of IAEA's specialized work. According to IAEA
officials, it usually takes 1 to 2 years for inspectors, technicians,
and engineers to be fully comfortable and capable on the job.
Furthermore, if experienced staff retire before new inspectors are
prepared to meet all mission requirements, there may be a gap in
skills.
IAEA Lacks a System to Evaluate the Results of Strengthened Safeguards:
IAEA does not have a system in place to measure how effective its
strengthened safeguards system is in detecting undeclared activities.
The performance measures IAEA has in place are output-driven and
directed at measuring the agency's ability to detect the diversion of
nuclear material at declared facilities. For example, in its annual
report to the Board of Governors, IAEA, among other things, reports on
the declared quantities of nuclear material it accounted for and
whether it met its goal of conducting routine inspections at declared
facilities. According to Los Alamos National Laboratory officials,
these indicators may be appropriate for measuring progress in detecting
the diversion of nuclear material at declared facilities, but are not
adequate to measure the effectiveness of strengthened safeguards
activities to detect undeclared activities or nuclear material. These
officials told us that IAEA should assess the extent to which its
strengthened safeguards activities, such as environmental sampling and
complementary access, are sufficient to detect clandestine activities
and establish specific performance measures to evaluate these efforts.
IAEA officials recognized the difficulties of measuring the
effectiveness and impact of the agency's strengthened safeguards
activities.
In June 2005, IAEA's Board of Governors established an advisory
committee, based on a proposal by President Bush in 2004, to consider
ways to strengthen IAEA's safeguards system. According to Department of
State officials, this committee would, among other things,
systematically evaluate lessons learned from strengthened safeguards
implementation and illicit trafficking of nuclear material, and then
provide recommendations to the Board of Governors to further strengthen
the safeguards system by 2007. The committee will have an initial 2-
year mandate, which will be reviewed for extension after 2 years.
IAEA Depends Heavily on U.S. Financial Support to Meet Its Safeguards
Obligations:
The United States is the largest financial contributor to IAEA's
safeguards program, and for 2004, is providing over 34 percent of the
agency's total safeguards budget through assessed and voluntary cash
contributions. IAEA's reliance on U.S. financial support is likely to
continue despite the agency's recent budget increase because, among
other reasons, the agency's budget has not kept pace with its increased
workload under strengthened safeguards, and cost-savings expected from
the application of integrated safeguards have not yet materialized.
Further, because the agency's budget has not kept pace with its
increased workload, IAEA depends on voluntary annual contributions from
the United States and other countries to meet critical safeguards
needs, such as equipment and funding for staff with specialized skills.
In addition, IAEA's ability to successfully negotiate future budget
increases from member states is hampered by the absence of systematic
evaluations of long-term resource needs, and its lack of reliable
estimates of the costs of its strengthened safeguards activities.
The United States Is the Largest Financial Contributor to IAEA
Safeguards:
IAEA is heavily dependent on U.S. financial support to meet its
safeguards obligations, and historically the United States has been
IAEA's primary supporter and its largest contributor. For 2004, the
United States is providing $72.5 million to support IAEA's strengthened
safeguards program: $33.0 million in assessed contributions, $12.3
million in voluntary cash contributions, and $27.2 million from various
U.S. agencies in technical support, such as analyzing environmental
samples to detect the presence of nuclear material.[Footnote 19] Figure
3 provides a breakdown of U.S. contributions to IAEA's safeguards
program for 2004 by funding category.
Figure 3: U.S. Contributions to IAEA's Safeguards Program for 2004:
[See PDF for image]
[End of figure]
For 2004, U.S. assessed and voluntary cash contributions represent over
34 percent of IAEA's total safeguards budget. These and other assessed
and voluntary contributions provided by the United States to IAEA's
safeguards budget since 1998 are shown in table 1.
Table 1: Contributions to IAEA's Safeguards Budget from 1998 through
2004:
Dollars in millions.
Year[A]: 1998;
IAEA's total safeguards budget[B]: $90.6;
U.S. contributions to IAEA's total safeguards budget (and percentage of
total): $30.8 (34.0%);
IAEA's assessed safeguards budget[C]: $80.5;
U.S. assessed contributions to IAEA's safeguard's budget[D] (and
percentage of total): $23.1 (28.7%);
Voluntary cash contributions to IAEA's safeguards budget: $10.2;
U.S. voluntary cash contributions[E] (and percentage of total): $7.7
(75.7%).
Year[A]: 1999;
IAEA's total safeguards budget[B]: 89.8;
U.S. contributions to IAEA's total safeguards budget (and percentage of
total): 29.5 (32.9);
IAEA's assessed safeguards budget[C]: 79.3;
U.S. assessed contributions to IAEA's safeguard's budget[D] (and
percentage of total): 20.7 (26.2);
Voluntary cash contributions to IAEA's safeguards budget: 10.5;
U.S. voluntary cash contributions[E] (and percentage of total): 8.8
(83.4).
Year[A]: 2000;
IAEA's total safeguards budget[B]: 84.2;
U.S. contributions to IAEA's total safeguards budget (and percentage of
total): 29.5 (35.0);
IAEA's assessed safeguards budget[C]: 70.9;
U.S. assessed contributions to IAEA's safeguard's budget[D] (and
percentage of total): 17.9 (25.3);
Voluntary cash contributions to IAEA's safeguards budget: 13.3;
U.S. voluntary cash contributions[E] (and percentage of total): 11.6
(86.8).
Year[A]: 2001;
IAEA's total safeguards budget[B]: 88.9;
U.S. contributions to IAEA's total safeguards budget (and percentage of
total): 35.3 (39.8);
IAEA's assessed safeguards budget[C]: 70.1;
U.S. assessed contributions to IAEA's safeguard's budget[D] (and
percentage of total): 18.6 (26.6);
Voluntary cash contributions to IAEA's safeguards budget: 18.7;
U.S. voluntary cash contributions[E] (and percentage of total): 16.7
(89.2).
Year[A]: 2002;
IAEA's total safeguards budget[B]: 95.5;
U.S. contributions to IAEA's total safeguards budget (and percentage of
total): 37.7 (39.5);
IAEA's assessed safeguards budget[C]: 77.9;
U.S. assessed contributions to IAEA's safeguard's budget[D] (and
percentage of total): 22.5 (28.9);
Voluntary cash contributions to IAEA's safeguards budget: 17.6;
U.S. voluntary cash contributions[E] (and percentage of total): 15.2
(86.2).
Year[A]: 2003;
IAEA's total safeguards budget[B]: 111.8;
U.S. contributions to IAEA's total safeguards budget (and percentage of
total): 42.7 (38.2);
IAEA's assessed safeguards budget[C]: 92.9;
U.S. assessed contributions to IAEA's safeguard's budget[D] (and
percentage of total): 26.5 (28.6);
Voluntary cash contributions to IAEA's safeguards budget: 19.0;
U.S. voluntary cash contributions[E] (and percentage of total): 16.1
(85.2).
Year[A]: 2004;
IAEA's total safeguards budget[B]: 132.6;
U.S. contributions to IAEA's total safeguards budget (and percentage of
total): 45.3 (34.2);
IAEA's assessed safeguards budget[C]: 115.2;
U.S. assessed contributions to IAEA's safeguard's budget[D] (and
percentage of total): 33.0 (28.6);
Voluntary cash contributions to IAEA's safeguards budget: 17.4;
U.S. voluntary cash contributions[E] (and percentage of total): 12.3
(71.0).
Source: GAO analysis of data provided by IAEA and the Department of
State.
Note: Numbers may not add due to rounding.
[A] IAEA is one of 10 international organizations that the United
States makes payments to on a deferred basis. In some cases, U.S.
assessed payments to IAEA's budget are not made in the same year for
which they are assessed. Table 1 shows U.S. contributions to IAEA's
budget based on the year for which they were assessed, not the year in
which the funds were actually paid.
[B] IAEA's total safeguards budget is calculated using actual exchange
rates, rather than IAEA's fixed exchange rate. As a result, changes in
IAEA's total safeguards budget, reflected in the table, largely
represent inflationary cost increases and fluctuations in exchange
rates rather than an actual change in IAEA's budget. The exception is
in 2004, when IAEA received the first part of a 4-year increase to its
budget.
[C] IAEA's budget includes both dollar and non-dollar contributions.
Non-dollar contributions are calculated using the annual average
exchange rate based on the International Monetary Fund's International
Financial Statistics.
[D] A portion of the U.S. contribution to IAEA's budget is made in
dollars, while a portion is made in euros. Prior to the introduction of
the euro in 2002, U.S. non-dollar contributions to IAEA's budget were
made in Austrian schillings. The U.S. contribution to IAEA's budget is
calculated using the average monthly exchange rate for the month in
which the euro/Austrian schilling payment was made to IAEA. Exchange
rates are based on the International Monetary Fund's International
Financial Statistics.
[E] For purposes of this report, U.S. voluntary contributions to IAEA
include only cash contributions, and do not include technical
assistance, which is also provided on a voluntary basis.
[End of table]
For 2004, the U.S. assessed contribution to IAEA's safeguards budget is
about $33.0 million, which IAEA uses to fund safeguards inspections,
staff salaries, training, and other costs directly related to the
operation of IAEA's safeguards program. The U.S. assessment to IAEA's
budget is based on a scale used by the United Nations to assess
contributions for its members.[Footnote 20] The U.S. assessed
safeguards contribution for 2004 is about 35 percent more than IAEA's
second largest financial supporter, Japan.
The United States has also been the largest contributor of voluntary
funds to IAEA's safeguards program. Our analysis shows that from 1998
through 2004, U.S. voluntary cash contributions, on average, were 83
percent of the total of all such member states' contributions. Other
countries making voluntary contributions included Canada, France,
Germany, Japan, and the United Kingdom. In 2004, the United States
provided over $12.3 million in voluntary funds to IAEA's safeguards
program. These funds were provided by the Department of State and
included:
* $4.36 million for the purchase of safeguards equipment;
* $4 million for the U.S. Program of Technical Assistance to IAEA
Safeguards (POTAS)--managed by Brookhaven National Laboratory--to fund
safeguards equipment at a nuclear facility in Japan, and paying travel
costs for IAEA staff associated with POTAS-funded projects;
* $2 million to assist IAEA in re-engineering the Department of
Safeguards' information management system;
* $1.2 million to cover IAEA's costs of applying safeguards to excess
nuclear material at U.S. facilities; and:
* $770,500 for high priority safeguards projects.[Footnote 21]
In addition to U.S. assessed and voluntary safeguards contributions, we
estimated that, in 2004, the Departments of State, Energy, and Defense
and the Nuclear Regulatory Commission provided IAEA with $27.2 million
in technical support. For example:
* DOE spent almost $12.7 million on various activities, including
applying safeguards at nuclear facilities in other countries,
developing technologies to detect and characterize the isotopic
composition of uranium and plutonium, and providing training on nuclear
material accounting and control;
* the Department of State provided over $9.2 million for POTAS
activities such as funding U.S. national laboratories to develop and
implement safeguards technologies and funding Brookhaven National
Laboratory officials to support IAEA's safeguards activities, interns
and consultants to IAEA, and other high priority safeguards projects;
* the Departments of Energy, State, and Defense spent over $5.2 million
analyzing environmental samples taken by IAEA to detect and
characterize the types of nuclear material present at selected
locations; and:
* NRC spent $29,500 in staff costs to assist IAEA in developing IAEA
safeguards procedures and practices.
For 2005, the United States is expected to contribute almost $34.3
million to IAEA's regular safeguards budget, or about 33 percent more
than Japan. Also, we estimate that for 2005, the Department of State
will provide $11.4 million in voluntary cash contributions to IAEA's
safeguards program, and that various U.S. agencies will provide $23.3
million in technical support.
IAEA Will Continue to Rely on U.S. Voluntary Support, Despite an
Increase in Its Regular Budget:
In 2004, IAEA's safeguards budget was increased by $11.1 million--the
first part of a 4-year, $19.4 million increase agreed to by member
states. For almost two decades prior to 2004, member states generally
limited growth in IAEA's budget to adjustments for inflation and staff
salaries. Additionally, the agency's ability to increase funding for
safeguards activities has been limited by some member states' desire to
maintain a balance of funding between IAEA's safeguards and technical
cooperation programs. As a result, Department of State officials said
that a shortfall developed between the growing demands on IAEA from
strengthened safeguards activities and its available budget. For
example, IAEA was not able to hire additional staff (inspectors and
equipment technicians) as its safeguards responsibilities increased. To
address this shortfall, the United States led a successful effort to
increase IAEA's budget.[Footnote 22] According to Department of State
and IAEA officials, the agency has used its budget increase to hire
additional staff and purchase new safeguards equipment, such as
unattended monitoring systems.
Despite the increase in the agency's safeguards budget, IAEA will
continue to rely on U.S. voluntary contributions. Department of State
officials said that even with the budget increase, IAEA's safeguards
program remains underfunded because its budget has not kept pace with
increases in its workload and responsibilities. As part of the U.S.-led
effort to increase IAEA's regular budget, a Department of State
analysis found that the agency would need around $30 million--$10.6
million more than the actual increase--to meet its strengthened
safeguards responsibilities. Brookhaven National Laboratory officials
also questioned whether the safeguards budget increase will be
sufficient to meet future needs because of the agency's growing
responsibilities under strengthened safeguards. For example, the
officials said it is unclear how IAEA will finance increased activities
stemming from the Additional Protocol, such as analyzing environmental
samples, or fund improvements to the agency's safeguards information
management system.
In addition, IAEA officials said the agency will continue to rely on
voluntary funding, primarily from the United States, to purchase
equipment and maintain a research and development program. One IAEA
official told us that the purpose of the agency's budget increase was,
in part, to ensure that the budget covers most of the agency's
equipment needs by 2007. However, agency officials responsible for
managing and maintaining safeguards equipment told us that while the
safeguards budget increase gave IAEA the ability to meet 70 percent of
its equipment needs beginning in 2004, the remaining 30 percent will be
met almost exclusively using voluntary contributions from the United
States. Furthermore, additional equipment requirements resulting from
the implementation of strengthened safeguards are likely to increase
the agency's reliance on voluntary funds. Finally, IAEA officials
stated that the agency cannot maintain a research and development
program without member states' voluntary support because it does not
have the financial resources or technical expertise.
Country-specific events could also require increased resource
commitments by IAEA that may strain the agency's safeguards budget.
IAEA officials said that demands on the agency's budget are driven by
events in individual countries. For example, IAEA officials said that
Japan's new reprocessing plant at Rokkashomura--the largest under
agency safeguards--will require a significant investment of safeguards
resources, including an on-site laboratory to analyze nuclear material
samples and an increase in inspection activity roughly equal to the
efforts of 10 inspectors.[Footnote 23] IAEA indicated that funds for
these new inspectors were included in the budget increase, as well as
$727,000 for the on-site laboratory. Further, in the July 2005
agreement between the United States and India, India agreed to place
its civilian nuclear facilities under IAEA safeguards. Department of
State officials said that the agreement could increase IAEA's resource
commitments because of the additional nuclear material that IAEA could
be required to safeguard. Also, recent events in Iran and Libya have
forced IAEA to commit more safeguards resources for inspections and
analyzing an increased quantity of environmental samples.
Additionally, according to IAEA, Department of State, and Brookhaven
National Laboratory officials, a change in the European Atomic Energy
Community's (EURATOM) participation in safeguards activities could
place an additional financial burden on IAEA. In the past, EURATOM has
shared the costs of safeguards activities by participating in
inspections and maintaining safeguards equipment at its members'
facilities. However, in December 2004, EURATOM informed IAEA of its
intention to reduce its participation in inspections and the sharing of
equipment costs. While EURATOM's decision had not been finalized as of
May 2005, an IAEA official estimated EURATOM's withdrawal from
safeguards activities could require the agency to hire 5 to 9
additional inspectors and 6 or 7 technicians to conduct inspections and
maintain equipment at European Union nuclear facilities. Additionally,
Department of State officials said that reduced participation in
safeguards by EURATOM would require IAEA to replace safeguards
equipment at European Union facilities, and estimated that this would
cost around $1.5 million per year over the next 4 to 5 years.
At the same time, cost-savings that IAEA expected to achieve from
integrated safeguards have not yet materialized. In our 1998 report, we
questioned IAEA's assumptions about cost-savings from integrated
safeguards because at that time, the agency did not know the extent to
which its new measures would allow it to reduce inspections. Further,
we stated that savings in cost and inspector effort from applying
integrated safeguards might not be fully realized. While IAEA has
reduced inspection activities in some countries where it has applied
integrated safeguards, there has been an increase in headquarters staff
needed to analyze data received from unattended monitoring systems
installed at nuclear facilities and collected from open source
information. Moreover, the time it takes for IAEA staff to prepare for
complementary access is double the preparation time for routine
inspection activities. For example, IAEA officials estimated that
complementary access requires 4 days of preparation and analysis at
headquarters for every day of inspection, as opposed to 2 days of
preparation and analysis for routine inspections. In addition, even
though advanced technologies have reduced the need for physical
inspections at certain facilities, IAEA officials told us that the
purchase, installation, and maintenance costs of this equipment may
exceed savings from fewer inspections. Lastly, under integrated
safeguards, IAEA may increase inspection activities at certain
locations to ensure that a country is not engaged in clandestine
nuclear activities.
IAEA told us that the first few countries where integrated safeguards
were being applied had small nuclear programs, which limited the
potential cost-savings. IAEA officials told us that the agency expects
to achieve more cost-savings as more countries, such as Canada,
Germany, and Japan, apply integrated safeguards. However, a former high-
ranking Department of Safeguards official told us that thus far, the
increasing costs of complementary access to verify the accuracy and
completeness of information contained in countries' declarations, among
other factors, have offset cost-savings from reduced inspection
activities in countries with integrated safeguards.
We also found that in some instances, IAEA does not make the most
efficient use of its safeguards resources. For example:
* Brookhaven National Laboratory officials were concerned that IAEA's
use of U.S. voluntary contributions to pay for business class travel,
instead of taking advantage of economy class fares, is not cost
effective. One Brookhaven official said that this takes resources away
from other safeguards priorities such as paying for equipment or
training. For example, the official said that for trips from Vienna,
Austria, to Albuquerque, New Mexico (near Los Alamos National
Laboratory where some training courses are held for IAEA staff), IAEA
obtains business class tickets costing $3,300 or less. However, the
official said that these tickets, when purchased in advance at economy
class rates, rarely cost more than $2,000 and are often less. Further,
we estimate that economy class rates for these tickets currently
average $1,235.[Footnote 24] IAEA officials acknowledged that in some
cases business class tickets are more costly than economy class, but
said that most often the difference between business class and economy
class tickets is paid by IAEA, not by U.S. voluntary contributions. In
reviewing a draft of this report, IAEA officials stated that the
agency's policy is to fly economy class whenever practicable. However,
the officials said that IAEA's travel regulations allow the agency to
use business class travel for trips over 7 hours in duration. IAEA
officials emphasized that in such cases, the agency tries to take
advantage of reduced business class fares whenever possible.
* In some cases, IAEA's restrictive personnel policies cause agency
resources to be used inefficiently. As was mentioned previously, IAEA
could not hire an individual as a cost-free expert despite his critical
expertise in detecting traces of nuclear material contained in
environmental samples because he was 62--IAEA's mandatory retirement
age. Cost-free experts are hired by IAEA using countries' voluntary
contributions to provide short-term skills that IAEA lacks among its
regular staff. To retain his expertise, the United States hired and
paid this individual as a consultant to IAEA. However, as a consultant,
this individual is only working on a part-time basis, and the United
States is required to pay him $56,000 more than his position would cost
as a cost-free expert over a 2-year period.
* IAEA's policy of rotating technical staff causes the agency to incur
additional costs related to training replacement staff. Although IAEA
officials could not quantify these costs, they said that the agency's
policy of rotating technical staff every 7 years causes many
technicians and engineers to leave early to pursue careers elsewhere.
As a result, IAEA is continually faced with having to train new staff
to operate and maintain its specialized equipment. In addition, because
of the difficulty it has in maintaining sufficient numbers of trained
technical staff, IAEA has less time for testing and installing
equipment, which increases the risk of failures. A former head of
IAEA's unit for unattended monitoring systems said that if this
equipment fails, IAEA would have to expend a significant amount of
resources to go back and verify all of the nuclear material in that
facility.
IAEA Does Not Systematically Evaluate Long-Term Resource Requirements
or Reliably Estimate Safeguards Costs:
IAEA does not have a process in place to systematically evaluate its
long-term resource requirements. Given member states' reluctance over
the past 2 decades to increase IAEA's budget, future increases may
depend upon the agency's ability to make a convincing case that
additional resources are required to meet safeguards obligations. Good
strategic planning practices, which would help to make such a case,
include describing the relationship between long-term goals and
budgetary needs. However, while IAEA has developed 5-year medium-term
strategies for its activities, these plans are not linked to longer-
term budgetary requirements because IAEA's budget process and research
and development plan are only designed to forecast resource needs on a
2-year basis. In 2004, a group of safeguards experts found that IAEA
needed to increase linkages between its medium-term strategy, the
strategic objectives of the Department of Safeguards, and the agency's
program and budget. Department of State officials also stated that
although IAEA has substantially improved its planning, the agency could
still have better assessments of its long-term budgetary needs.
Additionally, Brookhaven National Laboratory officials said that IAEA
needs to develop a long-term plan to better prioritize tasks and tie
goals and timeframes to financial resources. Furthermore, a February
2005 report by IAEA's Office of Internal Oversight Services that
evaluated the agency's management of member states' voluntary
contributions, found that while the Department of Safeguards' biennial
research and development plan provides adequate planning for activities
2 to 3 years into the future, IAEA lacks an effective process for
identifying and investigating new safeguards technologies for the
detection of undeclared nuclear material and activities beyond the 2 to
3 year-timeframe. As a result, the office recommended that IAEA develop
a long-term plan for research and development activities.
IAEA has taken steps to improve its short-term budget and planning
process. For example, IAEA has implemented results-based budgeting that
links objectives, outcomes, and performance indicators to estimates of
resource needs in the agency's biennial budget. Furthermore, IAEA
officials said that they did detailed resource planning as part of the
agency's efforts to negotiate the 2004 budget increase. Specifically,
IAEA developed a document that identified each project in the
safeguards program, provided information on the project's needs over
the 2004-2005 budget period, and indicated how these needs were
reflected in the requested budget increase. However, IAEA officials
said that this was an effort that required a significant amount of
planning and negotiating.
Another impediment to systematically evaluating long-term resource
requirements is that IAEA does not have reliable estimates on the costs
of all of its strengthened safeguards activities--particularly those
costs related to increased activity levels at IAEA headquarters, such
as analyses of countries' declarations of their nuclear activities. For
example, a 2004 review of the safeguards program by a group of
safeguards experts found that one measure of costs IAEA used in the
past--person days of inspection--actually accounted for only 30 percent
of the safeguards budget in 2003. Therefore, attempting to use this
measure to represent the costs of all IAEA's safeguards activities was
problematic because the majority of safeguards activities are unrelated
to the costs of person days of inspection. Department of State
officials also said that IAEA's measures of safeguards costs are
inadequate. In particular, they said that the person days of inspection
measure does not account for differences in the type of inspection
performed and the costs of equipment and technologies used.
Additionally, they said that this measure represents the number of 8-
hour days spent inspecting a facility. However, even if the inspection
lasts less than 8 hours, it still counts as a full day of inspection.
Furthermore, without good measures of the costs of all its safeguards
activities, IAEA has difficulty setting benchmarks, which it could use
to measure whether alternative approaches to safeguarding nuclear
material, such as integrated safeguards, actually result in cost-
savings. For example, the 2004 review of the safeguards program found
that IAEA's lack of accurate cost information was an impediment in
assessing the efficiency of its operations.
One high-ranking Department of Safeguards official told us that the
agency has difficulty estimating the costs of safeguards activities.
The official noted that while IAEA's Department of Safeguards has
introduced a new measure--calendar days in the field--which helps to
estimate travel and labor costs, it still does not capture the costs
related to other safeguards activities, such as complementary access.
The official said that the agency has assigned a staff member and
requested a French expert to work on developing a new methodology to
calculate the costs of safeguards activities. Additionally, IAEA
incorporated a project into its 2004-2005 budget to use statistical
information, including the cost of activities related to the Additional
Protocol, to achieve more efficient and effective program planning,
monitoring, and resource management.
According to Department of State officials, Congress authorizes
voluntary funding for IAEA's safeguards program to meet requirements
that cannot be met from its assessed budget. The officials said that
the purpose of this funding is not to pay for normal agency operating
costs. However, without adequate measures of the costs of all its
strengthened safeguards activities and a systematic process to use
these measures to identify long-term resource needs, IAEA may be unable
to convince member states of its budgetary needs. As a result, IAEA
will continue to rely on some member states' voluntary contributions--
provided in large part by the United States--for recurring and critical
costs. For example:
* IAEA's 2004-2005 budget identified a number of core activities for
which no budgetary funds were available, including almost 11 percent of
the costs of safeguarding nuclear material in countries with safeguards
agreements. IAEA anticipated that member states would provide about
$10.9 million in voluntary support for these activities. However,
IAEA's 2004-2005 budget also identified an estimated $5.75 million in
potential safeguards activities, such as applying safeguards at nuclear
facilities in North Korea should it agree to resume IAEA inspections,
for which the agency did not have budgetary funding and did not
anticipate receiving voluntary support.[Footnote 25]
* A 2004 independent review of IAEA's Safeguards Analytical Laboratory
found that in some cases, supplies needed for routine maintenance of
safeguards equipment were not funded by IAEA's safeguards budget, but
instead were included in agency requests for voluntary support. As a
result, some instruments were inoperable for up to a year because
necessary spare parts were funded through voluntary contributions. The
review also found that IAEA's voluntary requests included funding to
maintain its laboratory facilities, and recommended that routine
maintenance needs of laboratory equipment and facilities should be
included in IAEA's budget. IAEA said that all essential and routine
equipment needs have been included in the agency's current budget.
* Department of State officials said that the United States is
concerned that in some cases IAEA is relying on cost-free experts--many
of which are funded by U.S. voluntary support--on a long-term basis
when it should really be creating permanent positions and filling them.
According to Brookhaven National Laboratory officials, cost-free
experts are intended to provide short-term specialized skills that are
not available among IAEA staff. These positions are not intended to be
an extension of IAEA's regular staff. As a result, the officials said
that the United States is generally reluctant to extend funding for
cost-free experts beyond four years. However, without the cost-free
experts provided by the United States and other countries, IAEA would
have difficulty finding staff to perform key strengthened safeguards
activities, such as analyzing open source information and maintaining
unattended surveillance equipment. IAEA noted that the agency has taken
steps, such as developing a policy and an approval process, to ensure
that cost-free experts are not being relied on for routine services.
IAEA Has Increased Efforts to Help Countries Protect Their Nuclear
Material and Facilities, but Reliance on Voluntary Contributions Poses
a Challenge:
Following September 11, 2001, IAEA increased its efforts to assist
countries in protecting their nuclear and radiological materials and
facilities. To support these activities, IAEA established a Nuclear
Security Fund to which countries can provide voluntary budget
contributions. However, IAEA's heavy reliance on these voluntary
contributions creates challenges in planning and implementing nuclear
security activities. Increasing demands on the agency to provide
nuclear security assistance could provide further challenges as well.
Additionally, the United States has raised concerns about IAEA's
ability to track the use of nuclear security funds and measure the
results of its activities in a systematic way. In response to these
concerns, IAEA developed a system to track the use of Nuclear Security
Fund contributions. However, the agency still does not systematically
measure the results of its nuclear security efforts.
IAEA Has Increased Its Efforts to Help Countries Secure Their Nuclear
Material and Facilities:
In March 2002, IAEA's Board of Governors approved an action plan to
increase the agency's assistance to prevent, detect, and respond to
acts of terrorism against nuclear and radiological materials and
facilities. IAEA's nuclear security action plan consisted of eight
areas encompassing efforts undertaken by IAEA prior to September 11,
2001, as well as new efforts developed in response to countries'
concerns about the potential for nuclear terrorism. These areas
included enhancing the physical protection of nuclear material and
facilities, improving countries' ability to secure other types of
radioactive material, and ensuring that measures are in place to detect
and prohibit the illicit trafficking of materials. In order to better
manage the implementation of its action plan, IAEA created an Office of
Nuclear Security within a new Department of Nuclear Safety and
Security.
IAEA's nuclear security action plan has guided the agency's efforts to
help countries improve their security by, for example, developing
guidance, facilitating advisory missions, providing training, improving
response to illicit trafficking and emergencies, and coordinating
security assistance. Specifically, since September 11, 2001, IAEA has
published a variety of updated or newly drafted security guidelines and
recommendations. For example, IAEA developed guidance on securing
radioactive materials in transport and a handbook on combating illicit
trafficking. In addition, in January 2004, IAEA published a revised
Code of Conduct on the Safety and Security of Radioactive Sources to
guide countries in developing policies, laws, and regulations on
maintaining the safety and security of radioactive sources. The revised
code includes, among other things, enhanced requirements for securing
radioactive sources. As of June 2005, 73 countries had committed to
implementing the code. Further, in September 2004, IAEA's Board of
Governors and General Conference approved new guidance on the import
and export of radioactive sources, which is designed to help countries
ensure that high-risk radioactive sources are supplied only to
authorized end-users.
Furthermore, IAEA increased the types of advisory missions it offers
countries upon their request, and facilitated over 100 missions to 43
countries, including Argentina, Iran, Mexico, Nigeria, and Ukraine,
between 2001 and March 2005. To conduct these advisory missions, IAEA
organizes teams of international experts to assess and make
recommendations for improving countries' nuclear security measures,
such as the physical protection of their nuclear material and
facilities, or their regulatory infrastructures. Since 2001, IAEA has
also introduced advisory missions that go beyond the physical
protection of material and facilities to look at the security of the
entire country--including border controls--and assess countries'
systems of accounting and control of nuclear material.
In addition, IAEA provided nuclear security training for countries and
individual country representatives and conducted almost 80 training
courses for about 1,500 participants between 2001 and March 2005.
IAEA's training courses include instruction on general topics, such as
the fundamental principles and objectives of physical protection, as
well as more focused national training opportunities that cover
countries' programs and facility-specific needs, such as physical
protection system design and the use of radiation detection
instruments. IAEA targets some training on a regional basis to meet
specific requirements, such as combating illicit trafficking and
promoting regional cooperation. IAEA also offers training courses for
nuclear operators and government and law enforcement officials on
topics such as nuclear security awareness, combating illicit
trafficking, and nuclear forensics.
IAEA also increased its efforts to assist countries in improving their
capabilities to respond to incidents of illicit trafficking in
materials and to nuclear and radiological emergencies. For example,
IAEA encouraged countries to contribute data to its Illicit Trafficking
Database to help identify trends in illicit trafficking through
increased information exchange on incidents involving unauthorized
acquisition, provision, possession, use, transfer, or disposal of
nuclear and other radioactive materials. As a result of its outreach
efforts, IAEA had increased the number of countries participating in
the database from 25 to 81, as of June 2005. Furthermore, IAEA worked
to improve countries' abilities to respond to nuclear and radiological
emergencies. In June 2004, IAEA's Board of Governors approved efforts
to assist countries to develop an international communication system
for information on nuclear and radiological emergencies, provide
international assistance for emergency response, and establish a
sustainable international response infrastructure.
Finally, IAEA worked to improve coordination with member states that
provide nuclear security assistance. For example, IAEA began to develop
country-specific integrated nuclear security support plans to
prioritize measures the agency identifies as necessary to assist
countries to strengthen their nuclear security. According to an August
2004 status report on IAEA's nuclear security efforts, these plans will
help the agency to coordinate assistance provided by other countries--
an important part of IAEA's efforts to improve physical protection
measures at facilities and illicit trafficking detection capabilities
at international borders. As of December 2004, IAEA was developing
integrated nuclear security support plans for 16 countries.
Heavy Reliance on Voluntary Contributions Has Created Challenges for
IAEA's Nuclear Security Efforts:
In 2002, IAEA established a Nuclear Security Fund to support its
nuclear security program, and countries had voluntarily contributed
about $36.7 million through mid-May 2005. However, IAEA's heavy
reliance on these voluntary contributions for about 89 percent of its
nuclear security funding creates challenges for the agency in planning
and implementing its activities. For example, the conditions most
donors place on the use of their funds limit IAEA's ability to direct
resources to meet program needs. Given IAEA's reliance on voluntary
contributions, its ability to plan and implement nuclear security
activities could be further challenged by, for instance, changes in the
scope of an international security agreement that could increase
countries' requests for assistance.
IAEA Established the Nuclear Security Fund to Support Its Efforts:
To implement its nuclear security action plan, in 2002, IAEA created
the Nuclear Security Fund to which countries could provide voluntary
contributions for the agency's nuclear security activities. From 2002
through mid-May 2005, 26 countries, the European Union, and one
nongovernmental organization made voluntary contributions totaling
about $36.7 million.[Footnote 26] In addition, a number of countries
have contributed to IAEA's nuclear security efforts by providing
services, equipment, and the use of facilities.
The United States has made significant contributions to the Nuclear
Security Fund. From 2002 through 2004, as shown in table 2, the U.S.
Departments of State and Energy contributed approximately $21.6
million--almost 61 percent of all contributions--to the Nuclear
Security Fund. For example:
* DOE provided $9.95 million for radioactive material security;
* the Department of State provided $2.1 million to support advisory
missions, training courses, and other efforts to improve the physical
protection of nuclear materials;
* the Department of State contributed around $2.25 million to support
illicit trafficking advisory missions, training courses, and other
efforts to detect malicious activities involving nuclear and
radiological materials;
* the Department of State provided $1.6 million to improve the
coordination and management of nuclear security information by, for
example, increasing the utility of IAEA's Illicit Trafficking Database;
and:
* the Department of State also contributed $5.65 million for such
efforts as improving countries' systems of nuclear material accounting
and control, providing a cost-free expert, and establishing a reserve
fund for unanticipated expenses.
Table 2: U.S. Nuclear Security Fund Contributions, 2002-2004:
Source of contribution: Department of State;
2002: $3,199,700;
2003: $4,200,300;
2004: $4,200,000;
Total: $11,600,000.
Source of contribution: Department of Energy;
2002: $3,001,209;
2003: $2,500,000;
2004: $4,450,000;
Total: $9,951,209.
Source of contribution: Total;
2002: $6,200,909;
2003: $6,700,300;
2004: $8,650,000;
Total: $21,551,209[A].
Source: GAO presentation of IAEA data.
[A] This total does not include interest on U.S. contributions to the
Nuclear Security Fund. Also, it does not include $1.7 million pledged
to the fund in 2003, but which IAEA did not receive before December 31,
2004.
[End of table]
The Department of State estimated that it would provide $4.2 million to
the Nuclear Security Fund in 2005, while DOE officials indicated that
the Department will not provide direct contributions to the fund in
2005.
Furthermore, in 2004, DOE and NRC provided an estimated $3.3 million of
other technical support for IAEA's nuclear security activities. For
example, DOE provided about $1.4 million for nuclear security experts
to participate in IAEA's advisory missions to improve the physical
protection of nuclear materials and facilities, and $1.8 million for
training courses for foreign nationals on the physical protection and
accounting and control of nuclear materials. In addition, NRC
contributed $59,000 in staff costs to assist IAEA with enhancing
radioactive material security and the physical protection of nuclear
materials in transit. For 2005, U.S. agencies estimated that they will
provide $2.89 million in technical support for IAEA's nuclear security
activities.
IAEA's Heavy Reliance on Voluntary Funding Creates Challenges:
IAEA depends on voluntary contributions for about 89 percent of its
nuclear security funding, which creates challenges for planning and
implementing nuclear security activities because almost all donors
place conditions on how their Nuclear Security Fund contributions are
to be spent. In 2002 and 2003, respectively, only 2 and 5 percent of
the contributions to the fund were provided without conditions. For
example, a number of countries contribute to the fund specifically to
help secure nuclear and radioactive materials in Russia and other
countries of the former Soviet Union. IAEA does not have the
flexibility to shift these funds to support activities in other regions
with nuclear security concerns and for which limited resources are
available, such as Southeast Asia and Latin America. IAEA officials
said that as a result, some activity areas have received funding well
in excess of levels proposed in the 2002 nuclear security action plan,
while other areas have remained under-funded. According to IAEA's
August 2004 report on the status of its nuclear security efforts, this
may hamper the comprehensive approach necessary for effective nuclear
security.
Another challenge related to IAEA's heavy reliance on voluntary
contributions is its restricted ability to recruit and maintain
sufficient staff to meet growing obligations. While donors have
increased funding for nuclear security activities, IAEA has limited
budgetary funds to pay for staff to meet its increased obligations.
Only about 11 percent of IAEA's nuclear security resources, or $1.35
million, comes from its budget. However, DOE officials told us that the
agency's financial regulations prohibit voluntary funds from being used
to pay for permanent staff costs. The officials said that while these
voluntary funds could be used to pay for cost-free experts, this
increases IAEA's reliance on cost-free experts, which are funded
primarily by the United States. IAEA officials acknowledged that the
agency's inability to use voluntary funds to pay for staff costs has
been the largest administrative challenge to implementing its nuclear
security program. However, according to IAEA's August 2004 nuclear
security status report, the agency's administrative procedures are not
designed for programs where the majority of funds come from voluntary
contributions.
Further, IAEA indicated that the agency has not received sufficient
funding to meet the needs of all of its nuclear security efforts. In
April 2002, IAEA estimated that annual funding needs for its nuclear
security program would be about $32 million--$12 million to support
advisory missions and other program activities, and $20 million for
security equipment procurements and upgrades such as installing
radiation detection equipment at countries' borders. However, IAEA's
Board of Governors only approved voluntary funding for the advisory
missions and other program activities, not for equipment procurements
and upgrades. As a result, IAEA indicated that it has had to ask other
countries for assistance in order to provide equipment urgently needed
to respond to security problems identified through the agency's
advisory missions. IAEA officials said that coordinating assistance
between countries has been one of the challenges the agency has faced
in improving states' nuclear security because some countries have been
unwilling to share information with IAEA regarding the assistance they
have received from, or given to, other countries. However, according to
DOE officials, the U.S. position is that assistance to procure and
upgrade security equipment should be provided on a bilateral basis, not
by IAEA. Further, they questioned whether IAEA, through the development
of integrated nuclear security support plans and other initiatives, has
effectively coordinated this assistance.
Finally, according to IAEA's 2004 nuclear security report and
Department of State officials, unpredictable voluntary contributions by
member states restrict the agency's ability to plan nuclear security
activities. For example, IAEA data on Nuclear Security Fund pledges and
receipts from 2002 through 2004 showed that 30 percent of the funds
pledged to the agency were not provided in the same year they were
pledged.[Footnote 27] Furthermore, data for 2002 and 2003 indicated
that funds were often not provided until later in the year. However,
IAEA's financial regulations do not allow it to make expenditures based
on pledges and, thus, contributions must be received before
expenditures can be approved. One IAEA official said that this
restriction prevents the agency from implementing certain activities
according to its plan. The official told us that if nuclear security
funding were more predictable and received in a more timely fashion,
IAEA could hire staff sooner, and that activities such as conducting
advisory missions and providing border monitoring equipment could be
better planned and delivered. Further, participants at a December 2003
coordination meeting of Nuclear Security Fund donors recognized that
IAEA faces a challenge in managing its nuclear security program without
predictable resource levels. In an effort to ensure a more systematic
approach, IAEA officials said that the agency develops multi-year
activity plans as a basis for requesting contributions to the Nuclear
Security Fund. However, the officials said that the timing of voluntary
contributions still presents a challenge to implementing the nuclear
security program.
Increased Assistance Demands Could Further Challenge IAEA's Ability to
Plan and Implement Nuclear Security Activities:
Future increases in demands for IAEA to provide assistance could
further challenge the agency's ability to plan and implement nuclear
security activities. For example, in July 2005, 88 countries and
EURATOM adopted amendments to the Convention on the Physical Protection
of Nuclear Material,[Footnote 28] which could increase requests for
IAEA assistance to enhance the security of countries' nuclear material
and facilities. The existing convention requires countries who are
party to it to protect nuclear material used for peaceful purposes
while in international transport, and to criminalize certain acts
involving nuclear material. When in force, the adopted amendments will,
among other things, expand the scope of the convention to include
requirements for securing nuclear materials in peaceful domestic use,
storage, and transport and for protecting domestic nuclear facilities
against acts of sabotage. IAEA officials stated that the agency may
experience a significant increase in requests for security assistance,
particularly for advisory missions to assess the vulnerability of
countries' material and facilities as a result of the amendments to the
convention. Also, according to a Department of State official, IAEA
will be responsible for providing leadership, training, and technical
assistance, such as guidance in establishing legislative and regulatory
infrastructures, to help countries to comply with their obligations
under the amended convention. However, IAEA officials questioned
whether the agency is planning sufficiently for the potential increase
in its activities. Moreover, the officials stated that Nuclear Security
Fund resources would be inadequate to meet countries' additional
requests for advisory missions and for associated preparatory and
follow-up actions.
In addition, IAEA could experience an increase in demand for its
nuclear security assistance as a result of agency plans to implement a
more comprehensive nuclear security program. According to IAEA's August
2004 nuclear security status report, the agency is developing a new
plan of activities to be presented to the Board of Governors for
approval in 2005. A primary objective of the plan would be the
worldwide application of the agency's services and assistance to
comprehensively improve countries' nuclear security. However, IAEA's
reliance on voluntary contributions to fund its nuclear security
program could create challenges in implementing this plan. For example,
countries' conditions on the use of their funds could make it difficult
for IAEA to achieve worldwide application of its comprehensive nuclear
security approach. Further, IAEA's Deputy Director General of the
Department of Nuclear Safety and Security said that for IAEA to meet
its nuclear security goals, higher and more predictable resource levels
will be required in the future.
IAEA Does Not Systematically Measure the Results of Its Nuclear
Security Efforts:
In addition to the challenges resulting from the agency's reliance on
voluntary contributions, the United States has raised concerns about
IAEA's ability to track the use of nuclear security funds and measure
results in a systematic way. For example, according to Department of
State officials, as a result of concerns over the planning and
coordination of IAEA's nuclear security efforts, the United States
requested that the Office of Nuclear Security provide more results-
oriented reporting on a systematic basis. In response, the agency
created an information management system to track projects financed by
the Nuclear Security Fund. According to IAEA officials, this system
became operational at the beginning of 2004 and allows IAEA to report
to donors on the use of their contributions. A Department of State
official said that the United States received its first report in March
2005, and that this report contained adequate information on the use of
U.S. contributions to the fund.
However, IAEA still does not systematically measure the results of its
nuclear security activities. For example, while the agency is required
to report periodically to the Board of Governors and the General
Conference on its progress in implementing nuclear security activities,
these reports do not indicate the extent to which the agency's efforts
have helped to improve the security of nuclear material and facilities.
For example, IAEA's 2004 nuclear security status report provided
information on the countries for which it conducted physical protection
advisory missions since July 2003 but did not report on the extent to
which these missions actually improved security at nuclear facilities.
Similarly, IAEA reported on its efforts to train member state
representatives involved in combating illicit trafficking in materials.
However, IAEA's report did not include an assessment of the extent to
which the detection capabilities of personnel who attended these
training sessions had increased.
Furthermore, while IAEA's 2004-2005 budget identified program
objectives, outcomes, and performance indicators for the agency's
nuclear security activities, the 2004 nuclear security status report
did not always use these performance indicators to measure the agency's
results. For example, two performance indicators identified in IAEA's
2004-2005 budget for meeting outcomes related to improving nuclear
security and the capability of countries to detect and respond to
malicious acts were (1) the number of people trained in agency-
sponsored training courses and (2) the number of countries implementing
agency-developed nuclear security guidelines and recommendations.
However, the 2004 nuclear security report did not provide information
on the numbers of country representatives trained, or countries
implementing agency-developed guidelines and recommendations. IAEA
officials said that the agency will soon begin work to assess program
results based on the performance indicators identified in the budget,
and that information on the number of country representatives trained
will be included in a report to the Board of Governors in September
2005.
IAEA officials said that it is difficult for the agency to link nuclear
security efforts, such as recommendations stemming from advisory
missions, to results, such as whether recommendations were implemented.
Other IAEA officials attributed this difficulty to the agency's limited
advisory role, noting that states are not obligated to follow its
guidelines or implement its recommendations. Moreover, IAEA officials
said that while follow-up advisory missions can help to identify
whether previous recommendations were implemented, IAEA has focused on
generating new requests for advisory missions, not following up on past
activities.
A DOE official who is responsible for developing and tracking nuclear
security performance measures stated that it is possible to measure the
performance of security activities even where explicit authority to
require action does not exist. DOE and other U.S. agencies have
implemented programs to improve the security of nuclear material both
in the United States and in other countries. For example, DOE's
National Nuclear Security Administration directs efforts to secure
international borders against illicit trafficking, assist countries in
improving the physical protection of their nuclear material and
facilities, and enhance the security of radioactive material. The DOE
official said that a first step to measure performance would be to
develop data on output measures that IAEA can influence and that affect
the achievement of outcomes. Such output measures could include the
number of facilities where advisory missions are conducted, the number
of people trained, or the amount of equipment provided. Subsequently,
outcome-oriented measures could be created, such as the percentage of
facilities IAEA assessed as having adequate security arrangements based
on international standards.
Conclusions:
IAEA is being called upon by its member states to assume a greater role
in reducing the risks of nuclear proliferation. However, as its
responsibilities continue to expand, IAEA faces a broad array of
challenges that hamper its ability to fully implement strengthened
safeguards measures and nuclear security activities. In order to
maximize the impact and effectiveness of strengthened safeguards, most
experts we talked to believe that universal compliance with and
adherence to the Additional Protocol is needed. Although the United
States is in the process of bringing the Protocol into force, the fact
that it has not yet done so may provide other countries with an excuse
not to do so as well. Progress towards increasing the number of
countries that have brought the Additional Protocol into force should
increase the political pressure on the remaining countries to do so and
could make it more difficult to hide proliferation activities.
Even with the Additional Protocol in force, IAEA's ability to verify
compliance with safeguards is limited in 76 countries that have small
quantities of nuclear material. The small quantities protocols that
IAEA's Board of Governors approves for these countries may increase the
risk that nuclear proliferation activities could go undetected.
Moreover, IAEA's human capital practices reduce the agency's
effectiveness because, in some cases, they are rigidly applied
regardless of the agency's overall needs. In light of the looming human
capital crisis resulting from the upcoming turnover of senior
safeguards staff and a shrinking pool of nuclear experts, ensuring that
the agency hires, trains, and retains the most talented staff is
critical to meet growing strengthened safeguards requirements.
Further, IAEA's system for funding its safeguards and nuclear security
programs faces a number of challenges. Although the agency's recent
emergence from a zero real growth budget for its safeguards system is a
positive step, it may not be adequate to meet future needs. To make a
convincing case to member states of its future resource requirements
and ensure that its safeguards budget keeps pace with its changing
workload, IAEA will need reliable cost estimates that are linked to
resource needs for all its strengthened safeguards activities and a
process to systematically evaluate these costs and resources over the
long term. In addition, even with IAEA's recent safeguards budget
increase, the agency will continue to rely heavily on voluntary
contributions, particularly from the United States. While U.S. funding
is essential for the program's continued viability, supporting
safeguards is a shared responsibility, and the financial burden should
be distributed more equitably among as many IAEA member states as
possible. At the same time, we are concerned that the agency's reliance
on countries' yearly voluntary contributions for the nuclear security
program does not provide enough flexibility to effectively plan and
implement nuclear security activities. While we recognize that this
program is still evolving, member states may need to consider a
different approach to funding these efforts so that the agency can plan
its activities in a more systematic manner and meet its highest
priority needs. Finally, we are concerned that in some instances IAEA
may not be using safeguards resources in the most efficient manner
given the agency's limited funds and growing responsibilities.
Another major challenge facing IAEA is its limited ability to assess
the effectiveness of its strengthened safeguards system and nuclear
security activities. The agency does not have systems in place to
measure the impact of its strengthened safeguards or nuclear security
activities. For example, IAEA reports on the number of inspections
performed and the countries where nuclear security advisory missions
are conducted. While these measures are useful in reporting on IAEA's
efforts, they do not assess the impact and effectiveness of its
safeguards and nuclear security activities. As a result, the agency
cannot provide member states assurance that its activities are
detecting clandestine nuclear weapons programs or helping to secure
nuclear and radioactive materials against sabotage and terrorist
threats.
Recommendations for Executive Action:
Because safeguards are a cornerstone of U.S. nonproliferation efforts,
it is important that strengthened safeguards measures be applied in as
many countries as possible. Therefore, we recommend that the Secretary
of State, working with IAEA and its member states through the agency's
Board of Governors, consider eliminating, or at a minimum, reducing the
number of agreements that limit IAEA's authority to implement
strengthened safeguards activities in countries with small quantities
of nuclear material.
To help ensure that IAEA's safeguards and nuclear security programs are
effective, the agency needs to systematically evaluate the results of
its efforts. Therefore, we also recommend that the Secretary of State,
working with IAEA and its member states through the agency's Board of
Governors, consider developing clear and meaningful measures to better
evaluate the effectiveness of IAEA's strengthened safeguards program
and nuclear security activities.
Furthermore, to improve IAEA's personnel practices and its ability to
determine resource requirements over the long term, we also recommend
that the Secretary of State, working with IAEA and its member states
through the agency's Board of Governors, consider:
* rectifying human capital practices that negatively impact IAEA's
ability to recruit and retain the critical staff needed to implement
strengthened safeguards and make changes as appropriate;
* developing a systematic process that forecasts safeguards budgetary
requirements for the long term--beyond the current 2-year cycle;
* increasing efforts to encourage more member states to provide
voluntary contributions to support IAEA's safeguards activities; and:
* determining whether the nuclear security program receives adequate
regular budget funds, and ensure that voluntary contributions are
provided with enough flexibility to plan and accomplish priority
program objectives.
Finally, to maximize the benefits for safeguards-related activities, we
recommend that the Secretary of State, in consultation with the
managers of the U.S. safeguards technical support program, work with
IAEA to consider ways to ensure that safeguards resources are allocated
and spent in the most efficient manner. In particular, these efforts
should focus on, among other things, encouraging IAEA to use the most
cost effective means of travel, whenever possible.
Agency Comments and Our Evaluation:
We provided the Department of State and IAEA with draft copies of this
report for their review and comment. IAEA provided technical comments,
which we incorporated as appropriate. The Department of State provided
written comments, which are presented as appendix III. State also
provided technical comments, which we incorporated in the report. The
Department of State generally agreed with our findings, conclusions,
and recommendations and noted that our recommendations offered
reasonable ways that the administration can continue to work with IAEA
to improve its effectiveness. The department also noted that the draft
report fairly recognized the significant progress IAEA has made, with
support from the United States and other member states, in
strengthening the safeguards system and in supporting international
efforts to improve the physical protection and security of nuclear
materials.
In its written comments, the Department of State noted that countries
with small quantities of nuclear material and countries without
comprehensive safeguards agreements have very limited nuclear
activities and therefore they are unlikely to compromise the
effectiveness of the safeguards system. In addition, while agreeing
that IAEA has a limited ability to measure the effectiveness of its
strengthened safeguards activities, State indicated that the problem
cannot be fully solved because of the difficulty in detecting
undeclared activities. State also noted that our conclusion that IAEA
cannot provide member states assurance that its activities are
detecting undeclared nuclear weapons programs or helping secure nuclear
and radioactive material is not fully consistent with the report's
contents, which depict IAEA's successes in uncovering undeclared
nuclear activities and the extent of its work in advising states on
nuclear security.
In our view, the report provides an accurate and reasonable view of the
challenges facing IAEA's safeguards program, including the challenges
posed by countries that have small quantities of nuclear material and
are subject to limited safeguards measures as well as countries that
are outside of the safeguards system entirely. A goal of the safeguards
program is to ensure that all countries comply with and adhere to their
safeguards obligations. By not applying the full scope of safeguards
measures to over 100 countries IAEA's ability to detect secret nuclear
activities is significantly limited. In fact, in response to IAEA's
concerns regarding countries with small quantities of nuclear material,
the agency's Board of Governors took the first steps to strengthen
safeguards measures in countries with small quantities of nuclear
material in September 2005. IAEA's Director General noted that these
recent actions address some important limitations in the safeguards
system.
We concur with the Department of State's belief that IAEA's limited
ability to measure the impact of strengthened safeguards cannot be
fully solved. In our report, we recognize the difficulty in developing
performance measures for IAEA's strengthened safeguards activities, but
we believe that it is important that IAEA continue to develop and
refine such measures. Assessing the effectiveness of strengthened
safeguards in detecting clandestine nuclear weapons programs is an
essential element in evaluating the agency's overall performance.
Finally, the Department of State commented that our conclusion--that
IAEA cannot provide assurance that it is detecting clandestine nuclear
weapons programs or helping to secure nuclear and radioactive
materials--is not fully consistent with the body of the report. We
noted in the report that IAEA has achieved success in disclosing
clandestine nuclear activities in certain countries, particularly in
Iran, South Korea, and Egypt. We also noted that IAEA has increased its
efforts to help countries secure their nuclear material. However, since
IAEA has not developed a systematic approach to measure the impact and
effectiveness of its strengthened safeguards and nuclear security
programs, the agency cannot track its progress in improving its ability
to detect clandestine nuclear programs or ensuring that the nuclear
security of member states' nuclear material has improved. A systematic
approach to measuring performance would add a greater degree of
transparency to IAEA's safeguards and nuclear security programs, and
would also provide member states' with a clearer understanding of how
the agency reaches conclusions about countries' compliance with their
safeguards obligations.
As agreed with your offices, unless you publicly release the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. We will then send copies of this report to the
Secretary of Energy; the Administrator, National Nuclear Security
Administration; the Secretary of State; the Secretary of Defense; the
Chairman, Nuclear Regulatory Commission; the Director, Office of
Management and Budget; and interested congressional committees. We are
also providing IAEA's Deputy Directors General for Safeguards and
Nuclear Safety and Security with copies of this report. We will also
make copies available to others upon request. In addition, this report
will be available at no charge on the GAO Web site at [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions concerning this report, I can
be reached at 202-512-3841 or [Hyperlink, aloisee@gao.gov]. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix IV.
Signed by:
Gene Aloise:
Director, Natural Resources and Environment:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To identify the steps IAEA has taken to strengthen its safeguards
system and assess the challenges IAEA faces in implementing
strengthened safeguards, we obtained and analyzed documentation on
IAEA's strengthened safeguards activities, including reports to IAEA's
Board of Governors, such as the agency's annual reports on safeguards
implementation, strategic planning documents, and internal briefings.
In December 2004 and March 2005 we visited IAEA Headquarters in Vienna,
Austria, to meet with IAEA officials from the Department of Safeguards,
including the Deputy Director General and the directors and staff
responsible for managing inspection activities, collecting and
analyzing satellite imagery and open source information, and purchasing
safeguards equipment, and from the Office of External Relations. We
observed a demonstration of remote monitoring and other surveillance
equipment at IAEA Headquarters, and we toured IAEA's Seibersdorf
Analytical and Clean Laboratories, where environmental samples are
analyzed. Further, we obtained the views of officials from the U.S.
Mission to the U.N. System Organizations in Vienna on the progress IAEA
had made in implementing strengthened safeguards measures since we last
reported on safeguards in 1998. While in Vienna, we also conducted
structured interviews with a nonprobability sample[Footnote 29] of
representatives from IAEA member states in March 2005 to obtain their
views on IAEA's strengthened safeguards system and nuclear security
activities.
We developed the structured interview guide for interviewing
representatives from IAEA member states by identifying the issues
related to the effectiveness and progress of IAEA's safeguards and
nuclear security programs and drafting questions to address these
issues. Because the practical difficulties of developing and
administering a structured interview guide may introduce errors--
resulting from how a particular question is interpreted, for example,
or from differences in the sources of information available to
respondents in answering a question--we included steps in the
development and administration of the structured interview guide for
the purpose of minimizing such errors. After initial drafting, internal
GAO review, and pretesting and modification of the structured interview
guide, we further modified the structured interview protocol on the
basis of pretesting and comments from two Department of State officials
with extensive experience with IAEA's safeguards and nuclear security
activities. We finalized the structured interview guide after
conducting pretests with a member of the U.S. Mission and an IAEA
representative from the Czech Republic.
We identified a nonprobability sample of 25 IAEA member states to
respond to our structured interview guide, designed to ensure the
inclusion of a range of views across different types of member states.
Our sample included states that belong to IAEA's 35-member Board of
Governors, which provides overall policy direction and oversight to
IAEA; both nuclear and non-nuclear weapons states; states that differ
with respect to bringing into force new strengthened safeguards
measures; states that do not belong to the Board of Governors, but
offer valuable insights into the challenges IAEA faces in detecting
undeclared activities and strengthening its safeguards program; and
states with special safeguards agreements with IAEA. Of the 25 IAEA
member states selected for interviews, we completed interviews with
representatives from 9 member states. We completed in-person interviews
with Canada, China, Germany, Hungary, Israel, Russia, the United
Kingdom, and the United States. We obtained written responses to the
structured interview guide from Japan. We were unable to complete
interviews with the other 16 member states because representatives from
those countries were unwilling to respond to our questions in the
absence of official government approval of their responses. However,
the nine responses we received reflect a broad range of views of member
state representatives from the selection categories listed above,
including states that differ with respect to bringing into force new
strengthened safeguards measures and states with special safeguards
agreement with IAEA.
In addition, to assess IAEA's progress in strengthening safeguards and
the challenges it faces, we met with and gathered data from U.S.
officials from the Department of State's Office of Multilateral Nuclear
Affairs, the Department of Energy's Office of International Safeguards,
the Department of Defense's Air Force Technical Applications Center,
the Department of Commerce in Washington, D.C; the Nuclear Regulatory
Commission in Rockville, Maryland; Brookhaven National Laboratory in
New York; and Sandia and Los Alamos National Laboratories in New
Mexico. We also obtained independent assessments and reports on IAEA
safeguards from the Departments of State and Energy. Further, we met
with experts knowledgeable about safeguards and nonproliferation
issues, including from the Monterey Institute of International Studies
and the Massachusetts Institute of Technology. We also interviewed
former IAEA inspectors, cost-free experts, and the head of IAEA's
unattended remote monitoring systems unit to discuss the agency's
personnel policies. Lastly, we met with representatives from Aquila
Technologies, which provides IAEA with the majority of its surveillance
equipment, and toured its production facility.
To identify the extent of IAEA's reliance on the United States to
finance safeguards activities, we met with officials from IAEA's
Departments of Management and Safeguards, including the Director of the
Division for Budget and Finance and other staff involved in safeguards
budgeting, and the Departments of State, Energy, and Defense and the
Nuclear Regulatory Commission, and Brookhaven, Los Alamos, and Sandia
National Laboratories. We gathered financial data from these sources on
U.S. and other member states' assessed, voluntary, and technical
support contributions to IAEA's safeguards program from 1998 through
2004. We chose 1998 as the starting year for our analysis to continue
the data presented in our 1998 report on U.S. contributions to IAEA's
safeguards program. While 2004 was the last year for which complete
data on IAEA's safeguards budget and U.S. contributions were available,
we present some 2005 estimates where possible. Based on our discussions
with U.S. and IAEA officials, we defined voluntary contributions as
cash contributions to IAEA, while technical support contributions are
defined as funding used to assist IAEA's efforts but not directly
provided to IAEA. Further, we analyzed documentation, such as reports
from the Office of Internal Oversight Services, an independent group of
safeguards experts, and IAEA's Board of Governors, as well as budget
and strategic planning documents. We also held discussions with IAEA
and U.S. officials to determine the extent to which IAEA evaluates long-
term resource requirements.
In our analysis of assessed, voluntary, and technical support
contributions to IAEA's safeguards budget we used (1) IAEA data on its
assessed safeguards budget; (2) IAEA data on U.S. payments towards its
safeguards assessment; (3) IAEA data on voluntary contributions from
countries other than the United States; (4) Department of State data on
U.S. voluntary contributions to IAEA's safeguards program; and (5) data
from the Departments of State, Energy, and Defense and the Nuclear
Regulatory Commission to estimate U.S. technical support to IAEA's
safeguards program. Since a portion of member states' assessed
contributions to IAEA's budget is made in euros (prior to 2002 non-
dollar contributions were made in Austrian schillings), we used
exchange rates based on the International Monetary Fund's International
Financial Statistics to show the dollar value of the non-dollar portion
of IAEA's assessed safeguards budget and U.S. contributions. We
calculated the non-dollar portion of IAEA's assessed safeguards budget
using an average annual exchange rate. We calculated the non-dollar
portion of U.S. payments towards its safeguards assessment using an
average monthly exchange rate for the month in which the payments were
made to IAEA.[Footnote 30] Also, we used the average monthly exchange
rates from January through July 2005 to estimate the dollar value of
the non-dollar portions of the 2005 IAEA safeguards budget and U.S.
safeguards assessment. Additionally, IAEA data on U.S. payments did not
indicate the portion applicable to safeguards versus other IAEA
programs. To identify the safeguards portion of U.S. non-dollar
payments, we used the percentage of the total U.S. non-dollar
assessment for each year that IAEA data indicated was for safeguards.
Finally, in some cases it was not possible to obtain a complete
breakdown of U.S. support that was provided as voluntary contributions
versus technical support. In such instances, we characterized U.S.
support as voluntary contributions for purposes of consistency.
To describe how IAEA is helping its member states better secure their
nuclear material and facilities from nuclear terrorism and identify
impediments to implementing the program, we collected and analyzed
documentation, including IAEA's yearly reports to its Board of
Governors on its nuclear security program. We also met with officials
from IAEA's Offices of Nuclear Security and Legal Affairs, and the
Departments of State and Energy, the Nuclear Regulatory Commission, and
Sandia National Laboratory. Moreover, we also toured IAEA's Nuclear
Security Equipment Laboratory at IAEA Headquarters and observed a
demonstration of hand held radiation detection equipment. We obtained
IAEA, Department of State, and Department of Energy financial data on
contributions to the Nuclear Security Fund in order to describe the
extent to which IAEA relies on U.S. support for its nuclear security
program, and to analyze the timing of contributions to the
fund.[Footnote 31] Further, we gathered data from the Department of
Energy and the Nuclear Regulatory Commission to estimate U.S. technical
support to IAEA's nuclear security program. Similar to our analysis of
contributions to IAEA's safeguards program, we defined technical
support as funding used to assist IAEA's efforts but not directly
provided to IAEA.
To assess the reliability of all these data we received--the safeguards
and nuclear security budget and contribution data--we met with IAEA and
U.S. officials to discuss these data in detail, and we compared data
from different sources to identify any discrepancies. We also obtained
and reviewed responses from key officials with IAEA and each of the
U.S. agencies to a series of data reliability questions that addressed
such areas as data entry, data access, quality control procedures, and
data accuracy and completeness. Follow-up questions were added as
necessary. In addition, we obtained written responses from the
Department of Safeguards and U.S. officials to clarify discrepancies in
the data we received. Based on this work, we determined that the data
were sufficiently reliable for the purposes of this report.
We conducted our review from October 2004 through August 2005 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Countries' Safeguards Agreements with IAEA That Are In
Force, as of July 2005:
Non-nuclear weapons states:
State: Afghanistan;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Albania;
Comprehensive safeguards agreement.
State: Algeria;
Comprehensive safeguards agreement.
State: Andorra: None.
State: Angola: None.
State: Antigua and Barbuda;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Argentina;
Comprehensive safeguards agreement.
State: Armenia;
Comprehensive safeguards agreement;
Additional protocol.
State: Australia;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Austria;
Comprehensive safeguards agreement;
Additional protocol.
State: Azerbaijan;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Bahamas;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Bahrain: None.
State: Bangladesh;
Comprehensive safeguards agreement;
Additional protocol.
State: Barbados;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Belarus;
Comprehensive safeguards agreement.
State: Belgium;
Comprehensive safeguards agreement;
Additional protocol.
State: Belize;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Benin: None.
State: Bhutan;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Bolivia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Bosnia and Herzegovina;
Comprehensive safeguards agreement.
State: Botswana: None.
State: Brazil;
Comprehensive safeguards agreement.
State: Brunei Darussalam;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Bulgaria;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Burkina Faso;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Burundi: None.
State: Cambodia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Cameroon;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Canada;
Comprehensive safeguards agreement;
Additional protocol.
State: Cape Verde: None.
State: Central African Republic: None.
State: Chad: None.
State: Chile;
Comprehensive safeguards agreement;
Additional protocol.
State: Colombia;
Comprehensive safeguards agreement.
State: Comoros: None.
State: Congo, Republic of the: None.
State: Costa Rica;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Cote d'Ivoire;
Comprehensive safeguards agreement.
State: Croatia;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Cuba;
Comprehensive safeguards agreement;
Additional protocol.
State: Cyprus;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Czech Republic;
Comprehensive safeguards agreement;
Additional protocol.
State: Democratic People's Republic of Korea[A];
Comprehensive safeguards agreement.
State: Democratic Republic of the Congo;
Comprehensive safeguards agreement;
Additional protocol.
State: Denmark;
Comprehensive safeguards agreement;
Additional protocol.
State: Djibouti: None.
State: Dominica;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Dominican Republic;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Ecuador;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Egypt;
Comprehensive safeguards agreement.
State: El Salvador;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Equatorial Guinea: None.
State: Eritrea: None.
State: Estonia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Ethiopia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Fiji;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Finland;
Comprehensive safeguards agreement;
Additional protocol.
State: Gabon: None.
State: Gambia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Georgia;
Comprehensive safeguards agreement;
Additional protocol.
State: Germany;
Comprehensive safeguards agreement;
Additional protocol.
State: Ghana;
Comprehensive safeguards agreement;
Additional protocol.
State: Greece;
Comprehensive safeguards agreement;
Additional protocol.
State: Grenada;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Guatemala;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Guinea: None.
State: Guinea-Bissau: None.
State: Guyana;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Haiti: None.
State: Holy See;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Honduras;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Hungary;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Iceland;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Indonesia;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Iran[B];
Comprehensive safeguards agreement.
State: Iraq;
Comprehensive safeguards agreement.
State: Ireland;
Comprehensive safeguards agreement;
Additional protocol.
State: Italy;
Comprehensive safeguards agreement;
Additional protocol.
State: Jamaica;
Comprehensive safeguards agreement;
Additional protocol.
State: Japan;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Jordan;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Kazakhstan;
Comprehensive safeguards agreement.
State: Kenya: None.
State: Kiribati;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Korea, Republic of;
Comprehensive safeguards agreement;
Additional protocol.
State: Kuwait;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Kyrgyzstan;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Laos;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Latvia;
Comprehensive safeguards agreement;
Additional protocol.
State: Lebanon;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Lesotho;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Liberia: None.
State: Libya[C];
Comprehensive safeguards agreement.
State: Liechtenstein;
Comprehensive safeguards agreement.
State: Lithuania;
Comprehensive safeguards agreement;
Additional protocol.
State: Luxembourg;
Comprehensive safeguards agreement;
Additional protocol.
State: Madagascar;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Malawi;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Malaysia;
Comprehensive safeguards agreement.
State: Maldives;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Mali;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Malta;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Marshall Islands;
Comprehensive safeguards agreement;
Additional protocol.
State: Mauritania: None.
State: Mauritius;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Mexico;
Comprehensive safeguards agreement.
State: Micronesia: None.
State: Monaco;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Mongolia;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Morocco;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Mozambique: None.
State: Myanmar;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Namibia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Nauru;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Nepal;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Netherlands;
Comprehensive safeguards agreement;
Additional protocol.
State: New Zealand;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Nicaragua;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Niger: None.
State: Nigeria;
Comprehensive safeguards agreement.
State: Norway;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Oman: None.
State: Palau;
Comprehensive safeguards agreement;
Additional protocol.
State: Panama;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Papua New Guinea;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Paraguay;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Peru;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Philippines;
Comprehensive safeguards agreement.
State: Poland;
Comprehensive safeguards agreement;
Additional protocol.
State: Portugal;
Comprehensive safeguards agreement;
Additional protocol.
State: Qatar: None.
State: Republic of Molodova: None.
State: Romania;
Comprehensive safeguards agreement;
Additional protocol.
State: Rwanda: None.
State: St. Kitts and Nevis;
Comprehensive safeguards agreement;
Small quantities protocol.
State: St. Lucia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: St. Vincent and the Grenadines;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Samoa;
Comprehensive safeguards agreement;
Small quantities protocol.
State: San Marino;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Sao Tome and Principe: None.
State: Saudi Arabia: None.
State: Senegal;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Serbia and Montenegro;
Comprehensive safeguards agreement.
State: Seychelles;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Sierra Leone: None.
State: Singapore;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Slovakia;
Comprehensive safeguards agreement.
State: Slovenia;
Comprehensive safeguards agreement;
Additional protocol.
State: Solomon Islands;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Somalia: None.
State: South Africa;
Comprehensive safeguards agreement;
Additional protocol.
State: Spain;
Comprehensive safeguards agreement;
Additional protocol.
State: Sri Lanka;
Comprehensive safeguards agreement.
State: Sudan;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Suriname;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Swaziland;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Sweden;
Comprehensive safeguards agreement;
Additional protocol.
State: Switzerland;
Comprehensive safeguards agreement;
Additional protocol.
State: Syria;
Comprehensive safeguards agreement.
State: Tajikistan;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Thailand;
Comprehensive safeguards agreement.
State: The Former Yugoslav Republic of Macedonia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Timor-Leste: None.
State: Togo: None.
State: Tonga;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Trinidad and Tobago;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Tunisia;
Comprehensive safeguards agreement.
State: Turkey;
Comprehensive safeguards agreement;
Additional protocol.
State: Turkmenistan: None.
State: Tuvalu;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Uganda: None.
State: Ukraine;
Comprehensive safeguards agreement.
State: United Arab Emirates;
Comprehensive safeguards agreement;
Small quantities protocol.
State: United Republic of Tanzania;
Comprehensive safeguards agreement;
Additional protocol;
Small quantities protocol.
State: Uruguay;
Comprehensive safeguards agreement;
Additional protocol.
State: Uzbekistan;
Comprehensive safeguards agreement;
Additional protocol;
Integrated safeguards.
State: Vanuatu: None.
State: Venezuela;
Comprehensive safeguards agreement.
State: Vietnam;
Comprehensive safeguards agreement.
State: Yemen;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Zambia;
Comprehensive safeguards agreement;
Small quantities protocol.
State: Zimbabwe;
Comprehensive safeguards agreement;
Small quantities protocol.
Nuclear weapons states with voluntary safeguards agreements in force:
State: China;
Comprehensive safeguards agreement;
Additional protocol.
State: France;
Comprehensive safeguards agreement;
Additional protocol.
State: Russia Federation;
Comprehensive safeguards agreement.
State: United Kingdom;
Comprehensive safeguards agreement;
Additional protocol.
State: United States;
Comprehensive safeguards agreement.
States with special safeguards agreements:
State: India: None.
State: Israel: None.
State: Pakistan: None.
[A] Although North Korea concluded a comprehensive safeguards agreement
with IAEA in 1992, it announced its withdrawal from the NPT in January
2003.
[B] Although Iran has not ratified the Additional Protocol, it is
acting as if the Additional Protocol was in force.
[C] Although Libya has not ratified the Additional Protocol, it is
acting as if the Additional Protocol was in force.
[End of table]
[End of section]
Appendix III: Comments from the Department of State:
United States Department of State:
Assistant Secretary and Chief Financial Officer:
Washington, D.C. 20520:
SEP 22 2005:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "NUCLEAR
NONPROLIFERATION: IAEA Has Strengthened Its Safeguards and Nuclear
Security Programs, but Weaknesses Need to Be Addressed," GAO Job Code
360518.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Robert Newman, Action Officer, Bureau of International Security and
Nonproliferation, at (202) 647-9715.
Sincerely,
Signed by:
Sid Kaplan (Acting):
cc: GAO - Glen Levis;
NP - Rademaker;
State/OIG - Mark Duda:
Department of State Comments on GAO Draft Report Nuclear
Nonproliferation: IAEA Has Strengthened Its Safeguards and Nuclear
Security Programs, but Weaknesses Need to Be Addressed (GAO-06-000, GAO
Code 360518):
Thank you for the opportunity to comment on your draft report entitled
"Nuclear Nonproliferation: IAEA Has Strengthened Its Safeguards and
Nuclear Security Programs, but Weaknesses Need to Be Addressed." The
Department of State welcomes the report and generally agrees with its
findings. Over the past nine months, the Department has worked closely
with the GAO team to assist in the latter's efforts to evaluate the
IAEA's programs. We are grateful for the quality and substance of your
efforts.
The President has emphasized the threat that weapons of mass
destruction, and particularly proliferation of nuclear weapons, pose to
America and the world. The Administration has actively pursued a range
of policies to construct and strengthen a multi-layered defense against
that threat. The IAEA and its programs are an important component of
this nonproliferation framework.
In the broader nuclear area, with U.S. leadership, the Proliferation
Security Initiative has enhanced the readiness of participating
countries to interdict illicit transfers of nuclear technology and
nuclear materials; the UN Security Council adopted resolution 1540,
establishing for the first time binding obligations on all UN member
states to enact and enforce legal measures against proliferation; the G-
8 Global Partnership against WMD has secured and eliminated weapons-
related facilities and materials and redirected the scientific
communities involved in WMD projects into civilian arenas; the Global
Threat Reduction Initiative has identified and secured potentially
dangerous nuclear materials; our ongoing nuclear threat reduction
programs have helped deter and detect illicit nuclear exports through
strengthened export controls, anti-smuggling, detection, and law
enforcement tools at border crossings; the dismantlement of the A. Q.
Khan nuclear trafficking network has impeded would-be proliferators'
efforts to acquire key technologies; and negotiations have led to the
verified dismantlement of Libya's previously covert nuclear programs
and to an agreement in principle by North Korea to verifiably dismantle
its nuclear programs.
Additionally, the world must create a safe, orderly system to field
civilian nuclear plants without adding to the danger of weapons
proliferation. Enrichment and reprocessing are not necessary for
nations seeking to harness nuclear energy for peaceful purposes. Both
the President and the Director General of the IAEA have recognized that
this is an inherent weakness in the nonproliferation regime that cannot
be solved only by means of more effective safeguards. The world's
leading nuclear exporters should ensure that states have reliable
access at reasonable cost to fuel for civilian reactors, so long as
those states renounce enrichment and reprocessing.
The IAEA plays important roles in this broad policy framework. Its
safeguards system is an essential part of efforts to deter and detect
covert nuclear activities in non-nuclear weapon states parties to the
Nuclear Non-Proliferation Treaty (NPT), and thus helps to prevent
production of weapons materials and weapons at their source. Its
nuclear security programs also contribute to broader national and
international efforts to secure nuclear facilities and nuclear
materials in many nations, reducing the risk that materials will fall
into dangerous hands. The Administration has devoted significant
attention and resources to strengthening the IAEA and its key programs
and to maximizing their effectiveness in these key areas.
The Administration has continued U.S. leadership to ensure the full and
effective implementation of the IAEA's strengthened safeguards system.
At the technical level, we continue to work closely with the IAEA to
ensure that its methods and technologies effectively help deter and
detect the diversion of nuclear material, the presence of undeclared
nuclear material and activities, and the use of covert nuclear
facilities. As your report reflects, we provide significant funding,
technical advice, and technical support for the safeguards system. In
addition to working to ensure the system as a whole is as strong as
possible, we have worked to ensure its effective use in countries of
concern. IAEA inspections have confirmed two decades of Iran's
significant noncompliance with its safeguards obligations.
It is also important to emphasize that for the IAEA safeguards system
to be effective, it must be enforced and noncompliant activities must
be reported. It is the charge of the International Atomic Energy Agency
not only to uncover covert nuclear activity around the world but also
to report noncompliance to the U.N. Security Council.
The President proposed, in February 2004, the establishment of a
special committee of the IAEA Board of Governors to strengthen the
capability of the IAEA to ensure that nations comply with their
international obligations. Based on this proposal, the Board of
Governors established such a committee in June 2005; it is scheduled to
meet for the first time this fall. We also will be looking for ways to
encourage acceptance of the principle, as espoused by the President in
February 2004, that only states in compliance with their non-
proliferation obligations should serve on the Board and the new
Committee.
The Administration has worked with the IAEA, with the G-8, and
bilaterally to promote universal adherence to comprehensive safeguards
agreements and Additional Protocols. In 2004, under U.S. leadership,
the G-8 undertook a global program of joint demarches, with a joint
letter from the G-8 Foreign Ministers, urging adherence to these
instruments. The USG also gained agreement in the Asia Pacific Economic
Cooperation (APEC) Forum last year that all APEC economies that had not
yet done so would aim to sign Additional Protocols by the end of 2005.
We intend to continue such efforts, which are consistent with the
recommendations of your report. We also continue to work to bring the
U.S. Additional Protocol into force.
The Administration also sought and obtained in 2003 a significant
increase in the IAEA's budget. The bulk of this increase ($19.4 million
of $25.1 million overall, or 77%) is for safeguards. This increase, the
first in nearly 20 years, is being phased in over a four-year period
(2004-2007). The IAEA had grown excessively dependent on voluntary
contributions, largely from the United States, to carry out its
safeguards responsibilities. The budget increase substantially closes
the funding gap, although as the draft report notes the IAEA will
remain heavily dependent on voluntary assistance from member states,
particularly for safeguards research and development. The United States
will continue to support adequate funding for an effective safeguards
system.
The Administration has strongly supported the strengthening and
expansion of IAEA nuclear security programs. Working with the Agency
and with like-minded member states, we have been successful in
achieving a much strengthened Convention on the Physical Protection of
Nuclear Material; significantly broadened IAEA guidance for
strengthening physical security at nuclear facilities, expanded and
strengthened IAEA programs of assistance, including assessments aimed
at strengthening the security of nuclear facilities, nuclear material
and radioactive sources in Member States; and further strengthened
standards for the protection of radioactive sources. The USG has also
made significant extra-budgetary contributions to IAEA nuclear security
programs, and successfully solicited nuclear security contributions
from other states, to support these initiatives.
The Department of State generally agrees with GAO's findings and the
thrust of its conclusions and recommendations. In our view these fairly
recognize the significant progress the IAEA has made, with the support
of the United States and other member states, in strengthening its
safeguards system and in supporting international efforts to improve
physical protection and security of nuclear materials. The draft report
also reasonably portrays key weaknesses and challenges to the IAEA's
efforts.
We take a slightly different view of two issues that the report
characterizes as challenges facing implementation of the IAEA's
strengthened safeguards system. First, regarding the lack of safeguards
coverage for states with small quantities of nuclear material or
without safeguards agreements in force, we agree with GAO this gap in
safeguards coverage should be corrected, as the IAEA, the United
States, and other like-minded states are already working to do.
However, because the states in question have very limited nuclear
activities, and in many cases limited scientific and industrial
infrastructure, we would note that for the most part, this gap in the
IAEA's ability to verify compliance is unlikely to compromise the
effectiveness of the safeguards system.
Second, the USG has long supported efforts to assess the effectiveness
of IAEA programs, and we agree with the report that the IAEA has
limited ability to measure the effectiveness of its strengthened
safeguards measures. However, we do not believe that problem can be
fully solved. The effectiveness of traditional safeguards has long been
assessed with reasonable thoroughness, but success in detecting
undeclared activities is much harder to measure. A full assessment
would implicitly require information about the presence or absence of
covert activities as a basis for judging success in their detection.
We also believe the report's conclusion on this point, that "the Agency
cannot provide member states assurance that its activities are
detecting clandestine nuclear weapons programs or helping secure
nuclear and radioactive materials," is not fully consistent with the
body of the report which discusses the IAEA's success in uncovering
undeclared nuclear activities in Iran and Egypt and the extent of its
work advising states on nuclear security. We believe the Agency does
provide meaningful assurances that its activities in both safeguards
and nuclear material security are contributing to U.S. and global
security. Nevertheless, we continue to support improved assessment of
effectiveness in IAEA programs.
The report's recommendations offer a reasonable list of ways the
Administration can continue to work with the IAEA to improve its
effectiveness.
As we have discussed above, efforts are under way on a number of these
points. We expect to continue to push forward with these and other
initiatives to improve the Agency's effectiveness and performance,
within the broader framework of our nuclear nonproliferation policy.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gene Aloise (202) 512-3841:
Staff Acknowledgments:
In addition to the contact named above, Virginia Chanley; Leland
Cogliani; Nancy Crothers; Glen Levis; Christopher Murray; Judy Pagano;
Keith Rhodes (GAO's Chief Technologist); and F. James Shafer, Jr., made
key contributions to this report.
(360518):
FOOTNOTES
[1] IAEA, an autonomous international organization affiliated with the
United Nations, was established in Vienna, Austria, in 1957. The agency
has the dual role of promoting the peaceful uses of nuclear energy by
transferring nuclear science and technology through its nuclear science
and applications and technical cooperation programs, and verifying,
through its safeguards program, that nuclear materials subject to
safeguards are not diverted to nuclear weapons or other proscribed
purposes.
[2] Under the NPT, nuclear weapons states pledged to facilitate the
transfer of peaceful nuclear technology to non-nuclear weapons states,
but not to assist them in acquiring nuclear weapons.
[3] GAO, Nuclear Nonproliferation: Uncertainties With Implementing
IAEA's Strengthened Safeguards System, GAO/NSIAD/RCED-98-184
(Washington, D.C.: July 9, 1998).
[4] Results from nonprobability samples cannot be used to make
inferences about a population, because in a nonprobability sample some
elements of the population being studied have no chance or an unknown
chance of being selected as part of the sample.
[5] Regional treaties, including the Treaty for the Prohibition of
Nuclear Weapons in Latin America (the 1967 Treaty of Tlatelolco), the
South Pacific Nuclear Free Zone Treaty (the 1985 Treaty of Rarotonga),
the African Nuclear-Weapon-Free Zone Treaty (the 1995 Treaty of
Pelindaba), and the Southeast Asia Nuclear-Weapon-Free Treaty (the 1995
Bangkok Treaty) require each participating country to conclude a
comprehensive safeguards agreement with IAEA. Additionally, in February
2005, five Central Asian states announced that they had reached
agreement on the text of a treaty to establish a nuclear-weapon-free
zone.
[6] Nuclear materials include source materials, such as natural
uranium, depleted uranium, and thorium, and special fissionable
materials, such as enriched uranium and plutonium.
[7] Previously, Cuba was included in this group of states; however,
Cuba acceded to the NPT, effective November 4, 2002, and to the
Tlatelolco Treaty, effective October 23, 2002. Cuba signed a
comprehensive safeguards agreement on September 18, 2003, which was
brought into force June 3, 2004.
[8] Model Protocol Additional to the Agreement(s) Between State(s) and
the International Atomic Energy Agency for the Application of
Safeguards.
[9] There are several steps in the nuclear fuel cycle. The front end of
the fuel cycle includes uranium mining and milling, conversion,
enrichment, and fuel fabrication. Once uranium becomes spent fuel
(after being used to produce electricity), the back end of the cycle
follows. This may include temporary storage, reprocessing, recycling,
and waste disposal.
[10] Although IAEA does not officially recognize Taiwan, the agency
applies safeguards there, including measures under a comprehensive
safeguards agreement and the Additional Protocol.
[11] About one-third of Japan's electricity is generated by nuclear
power. Japan has been engaged in fuel reprocessing and the recycling of
plutonium in mixed plutonium/uranium oxide (MOX) fuel for approximately
20 years to develop its nuclear fuel cycle. Japan is expanding this
capability with the construction and commissioning of the commercial-
scale Rokkashomura reprocessing plant in northern Japan. This fully
integrated nuclear fuel cycle center will perform spent fuel receipt,
storage, reprocessing, high-level waste treatment and MOX-fuel
fabrication. Uranium enrichment is carried out at the same site.
[12] IAEA defines a country with significant nuclear activities as one
that has declared nuclear material in a facility or a location outside
facilities.
[13] The U.S. Senate must consent to all international treaties before
they enter into force.
[14] IAEA refers to a small quantity of nuclear material as being,
among other things, less than one kilogram of plutonium or uranium with
an enrichment of greater than 20 percent Uranium-235.
[15] In 2004, the Department of Safeguards had 552 staff members. Of
these, 251 were safeguards inspectors.
[16] GAO, National Nuclear Security Administration: Contractors'
Strategies to Recruit and Retain a Critically Skilled Workforce Are
Generally Effective, GAO-05-164 (Washington, D.C.: February 2005).
[17] IAEA's mandatory retirement age is based on the United Nations
Joint Staff Pension Fund. The normal retirement age is 60, but 62 for
personnel that were hired or rehired on or after January 1, 1990.
[18] In an October 2003 internal written assessment regarding IAEA
equipment testing, IAEA officials expressed concern that monitoring
systems at a third site--the Iranian enrichment facility at Natanz--was
also not thoroughly tested. In reviewing a draft of this report, IAEA
officials clarified that there are currently no unattended monitoring
systems at the Natanz facility in Iran and that the inclusion of Iran
in this written assessment was a mistake. According to these officials,
IAEA has installed standard surveillance cameras that were thoroughly
tested before deployment at the Natanz facility.
[19] Roughly $4.1 million of U.S. assessed contributions to IAEA for
calendar year 2004 had not been provided as of July 2005.
[20] The U.S. assessment is 25 percent of IAEA's budget--the maximum
assessment for IAEA member states. IAEA retained this ceiling despite a
United Nations' decision in 2000 to reduce its maximum assessment to 22
percent. However, the United States, along with 31 other countries,
contributes slightly more than 25 percent of the safeguards budget to
compensate for some countries that are assessed at a lower rate. In
July 2003, IAEA's Board of Governors decided to require some countries
that pay less to contribute more as of January 1, 2006. The remaining
countries that pay less will be required to begin contributing more as
of January 1, 2008.
[21] The U.S. contribution for high priority safeguards projects had
not been expended as of September 2005.
[22] Department of State officials said that the department's policy
has been, and continues to be, restricted growth in the budgets of
international organizations. The department has made exceptions for
substantive policy reasons, such as security-related interests.
However, Department of State officials also said that they have tried
to maintain pressure on IAEA to identify efficiencies to allow the
reallocation of resources to high priority activities such as
safeguards.
[23] IAEA attempts to quantify the costs of anticipated increased
resource commitments in its budget. In part, these estimates are
presented as core activities for which the agency expects to receive
voluntary contributions, or for which the agency has not identified a
funding source.
[24] Estimates are from SatoTravel, the leading provider of travel
services for the U.S. government. Rates are for July through September
2005. The economy class estimate is an average of the government and
civilian rates.
[25] These unfunded core activities primarily represent safeguards
activities that IAEA was unsure of implementing. Other unfunded core
activities included applying safeguards at a reprocessing plant in
India and additional efforts required as a result of EURATOM's final
decision.
[26] Countries contributing to the Nuclear Security Fund included
Australia, Austria, Bulgaria, Canada, the Czech Republic, Finland,
France, Germany, Greece, Hungary, Iran, Ireland, Israel, Italy, Japan,
the Republic of Korea, the Netherlands, New Zealand, Norway, Romania,
Slovenia, Spain, Sweden, Ukraine, the United Kingdom, and the United
States. The nongovernmental organization was the Nuclear Threat
Initiative.
[27] The United States was more timely with its contributions than
other Nuclear Security Fund donors, with almost 74 percent of U.S.
contributions arriving in the same year they were pledged, as opposed
to about 63 percent of non-U.S. contributions.
[28] The IAEA Director General, the depositary of the convention, was
responsible for convening the group of experts that drafted the
amendments and for coordinating the conference for countries to
consider the amendments.
[29] Results from nonprobability samples cannot be used to make
inferences about a population, because in a nonprobability sample some
elements of the population being studied have no chance or an unknown
chance of being selected as part of the sample.
[30] U.S. assessed payments to IAEA's budget are not always made in the
same year for which they are assessed. Our analysis used exchange rates
at the actual time of payment to identify the dollar value of these
contributions. However, we present U.S. contributions according to the
year for which they were assessed, not the year in which they were
actually paid. Additionally, in some cases, previous years' surpluses
are credited to member states' assessed contribution balances. We
calculated the value of the non-dollar portion of these credits using
an average of the September and October exchange rates because an IAEA
official indicated that cash surpluses are made available to member
states to credit towards their budget assessment during these months.
[31] We did not include interest paid on Nuclear Security Fund
contributions in our analysis.
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