Nuclear Nonproliferation
More Progress Needed in Implementing Recommendations for IAEA's Technical Cooperation Program Gao ID: GAO-11-482T March 17, 2011A key mission of the International Atomic Energy Agency (IAEA) is promoting the peaceful uses of nuclear energy through its Technical Cooperation (TC) program, which provides equipment, training, fellowships, and other services to its member states. The United States provides approximately 25 percent of the TC program's annual budget. While the vast majority of TC projects have not involved the transfer of sensitive nuclear materials and technology, TC assistance has been provided to countries of proliferation concern. In March 2009, GAO reported on potential proliferation and management concerns related to the program (GAO-09-275). This testimony discusses (1) GAO's findings and recommendations to the Department of State and IAEA in that report and (2) agency progress made to implement those recommendations to address these concerns. This testimony is based on GAO's 2009 report and updated in March 2011 by (1) reviewing documentation on actions taken by State and IAEA in response to the report's recommendations and (2) interviewing State and Department of Energy (DOE) officials.
As GAO reported in 2009, neither State nor IAEA seeks to systematically limit TC assistance to countries that (1) the United States has designated as state sponsors of terrorism--Cuba, Iran, Sudan, and Syria; (2) are not party to the Treaty on the Non-Proliferation of Nuclear Weapons--India, Israel, and Pakistan; and (3) have not completed comprehensive safeguards or additional protocol agreements with IAEA. The former head of the TC program told GAO that requests for TC assistance are evaluated strictly on technical merits. GAO found that the lack of sufficient and timely information provided by IAEA on project proposals limits the ability of DOE and the national laboratories to fully assess potential proliferation concerns associated with the program. In addition, GAO identified limitations in how the program is managed, including the failure of many member states to pay their full share of support to IAEA's Technical Cooperation Fund (TCF) and the use of outdated program metrics. GAO asked Congress to consider directing State to withhold a proportionate share of the U.S. voluntary contribution to the TC program that is equivalent to the amounts of TCF funding that would otherwise be made available to U.S.-designated state sponsors of terrorism, as the United States currently does with Cuba and has done in the past with other countries and territories. GAO recommended that State, working with IAEA, undertake eight actions to address proliferation and management concerns related to the program, such as establishing a mechanism to facilitate greater and more timely information sharing on proposals. GAO made two additional recommendations to State, including enhancing its record-keeping on project proposals identified as having potential proliferation concerns, and developing formal guidance to evaluate requests from TC fellows to study nuclear issues in the United States. State and IAEA have made some progress in implementing several of the recommendations in GAO's report. This progress includes, among other things, (1) IAEA providing proposal information to the United States and other member states earlier in the project approval process; (2) IAEA pursuing efforts to promote results-based management of TC projects; (3) State doing better tracking of TC proposals that may contain proliferation concerns; and (4) State developing new guidance and criteria for accepting or denying requests by foreign TC fellows to study in the United States. State, however, continues to strongly oppose GAO's suggestion that Congress consider requiring State to withhold a proportionate share of U.S. voluntary contributions to the fund for TC program assistance provided to U.S.-designated state sponsors of terrorism. GAO continues to believe that Congress should give serious consideration to this matter because there is a precedent for such a withholding and because such action would foster a more consistent and cohesive U.S. policy toward such nations that the United States chooses not to engage directly in trade, assistance, and other forms of cooperation. GAO is making no new recommendations at this time and continues to believe that implementation of the recommendations in its March 2009 report could substantially reduce potential proliferation and management concerns related to the TC program.
GAO-11-482T, Nuclear Nonproliferation: More Progress Needed in Implementing Recommendations for IAEA's Technical Cooperation Program
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United States Government Accountability Office:
GAO:
Testimony:
Before the Committee on Foreign Affairs, House of Representatives:
For Release on Delivery:
Expected at 9:30 a.m. EDT:
Thursday, March 17, 2011:
Nuclear Nonproliferation:
More Progress Needed in Implementing Recommendations for IAEA's
Technical Cooperation Program:
Statement of Gene Aloise, Director:
Natural Resources and Environment:
GAO-11-482T:
GAO Highlights:
Highlights of GAO-11-482T, a testimony before the Committee on Foreign
Affairs, House of Representatives.
Why GAO Did This Study:
A key mission of the International Atomic Energy Agency (IAEA) is
promoting the peaceful uses of nuclear energy through its Technical
Cooperation (TC) program, which provides equipment, training,
fellowships, and other services to its member states. The United
States provides approximately 25 percent of the TC program‘s annual
budget. While the vast majority of TC projects have not involved the
transfer of sensitive nuclear materials and technology, TC assistance
has been provided to countries of proliferation concern. In March
2009, GAO reported on potential proliferation and management concerns
related to the program (GAO-09-275). This testimony discusses (1)
GAO‘s findings and recommendations to the Department of State and IAEA in
that report and (2) agency progress made to implement those
recommendations to address these concerns. This testimony is based on
GAO‘s 2009 report and updated in March 2011 by (1) reviewing
documentation on actions taken by State and IAEA in response to the
report‘s recommendations and (2) interviewing State and Department of
Energy (DOE) officials.
GAO is making no new recommendations at this time and continues to
believe that implementation of the recommendations in its March 2009
report could substantially reduce potential proliferation and
management concerns related to the TC program.
What GAO Found:
As GAO reported in 2009, neither State nor IAEA seeks to
systematically limit TC assistance to countries that (1) the United
States has designated as state sponsors of terrorism”-Cuba, Iran,
Sudan, and Syria; (2) are not party to the Treaty on the Non-
Proliferation of Nuclear Weapons-”India, Israel, and Pakistan; and (3)
have not completed comprehensive safeguards or additional protocol
agreements with IAEA. The former head of the TC program told GAO that
requests for TC assistance are evaluated strictly on technical merits.
GAO found that the lack of sufficient and timely information provided
by IAEA on project proposals limits the ability of DOE and the
national laboratories to fully assess potential proliferation concerns
associated with the program. In addition, GAO identified limitations
in how the program is managed, including the failure of many member
states to pay their full share of support to IAEA‘s Technical
Cooperation Fund (TCF) and the use of outdated program metrics. GAO
asked Congress to consider directing State to withhold a proportionate
share of the U.S. voluntary contribution to the TC program that is
equivalent to the amounts of TCF funding that would otherwise be made
available to U.S.-designated state sponsors of terrorism, as the
United States currently does with Cuba and has done in the past with
other countries and territories. GAO recommended that State, working
with IAEA, undertake eight actions to address proliferation and
management concerns related to the program, such as establishing a
mechanism to facilitate greater and more timely information sharing on
proposals. GAO made two additional recommendations to State, including
enhancing its record-keeping on project proposals identified as having
potential proliferation concerns, and developing formal guidance to
evaluate requests from TC fellows to study nuclear issues in the
United States.
State and IAEA have made some progress in implementing several of the
recommendations in GAO‘s report. This progress includes, among other
things, (1) IAEA providing proposal information to the United States
and other member states earlier in the project approval process; (2)
IAEA pursuing efforts to promote results-based management of TC
projects; (3) State doing better tracking of TC proposals that may
contain proliferation concerns; and (4) State developing new guidance
and criteria for accepting or denying requests by foreign TC fellows
to study in the United States. State, however, continues to strongly
oppose GAO‘s suggestion that Congress consider requiring State to
withhold a proportionate share of U.S. voluntary contributions to the
fund for TC program assistance provided to U.S.-designated state
sponsors of terrorism. GAO continues to believe that Congress should
give serious consideration to this matter because there is a precedent
for such a withholding and because such action would foster a more
consistent and cohesive U.S. policy toward such nations that the
United States chooses not to engage directly in trade, assistance, and
other forms of cooperation.
View GAO-11-482T or key components. For more information, contact Gene
Aloise at (202) 512-3841 or aloisee@gao.gov.
[End of section]
Madam Chairman and Members of the Committee,
I am pleased to be here today to discuss the findings and
recommendations from our March 2009 report on the International Atomic
Energy Agency's (IAEA) Technical Cooperation (TC) program and the
actions the Department of State and IAEA have taken to implement the
recommendations in that report.[Footnote 1] In March 2011, we reviewed
documentation provided by State and IAEA and interviewed State and
Department of Energy (DOE) officials to obtain updated information on
actions taken to implement our 2009 recommendations.
IAEA is an independent international organization based in Vienna,
Austria, affiliated with the United Nations. It has the dual mission
of promoting the peaceful uses of nuclear energy and verifying that
nuclear technologies and materials intended for peaceful purposes are
not diverted to weapons development efforts. The TC program is a main
pillar of IAEA's mission to promote the peaceful uses of nuclear
energy. To that end, the TC program helps IAEA member states achieve
their sustainable development priorities by furnishing them with
relevant nuclear technologies and expertise, and the program plays a
role in facilitating Article IV of the Treaty on the Non-Proliferation
of Nuclear Weapons (NPT), which affirms that all states party to the
treaty have a right to participate in the exchange of equipment,
materials, and scientific and technological information for peaceful
uses of nuclear energy. Through the TC program, IAEA has supported the
development of nuclear technology for peaceful applications in a
variety of areas, including energy, human health, food and
agriculture, and nuclear safety. TC projects have supported efforts to
eradicate tsetse flies and other insect pests in certain regions,
control communicable diseases in developing countries, and develop
higher-yielding agricultural crops. In 2007, the TC program disbursed
over $93 million in nuclear technical assistance to 122 countries and
territories. All IAEA member states are eligible for TC assistance;
however, not all countries request assistance. The United States
participates as a donor and is the largest financial contributor to
the TC program, providing approximately 25 percent of its budget, or
approximately $19.8 million, in 2007.[Footnote 2]
In our 1997 report on the TC program, we found that while the vast
majority of TC projects did not involve the transfer of sensitive
nuclear materials and technologies, nuclear assistance had been
provided to countries that posed proliferation risks.[Footnote 3]
Proliferation concerns about the TC program have persisted because of
the assistance it has provided to certain countries, including four
countries--Cuba, Iran, Sudan, and Syria--that the United States has
designated as state sponsors of terrorism, and because nuclear
equipment, technology, and expertise can be dual-use--capable of
serving peaceful purposes, such as the production of medical isotopes,
but also useful in contributing to nuclear weapons development. For
example, in 2006, IAEA refused to support a TC proposal from Iran
requesting assistance for a heavy water reactor near the town of Arak.
Iran stated that the reactor was intended for the production of
medical isotopes, but the United States and other IAEA members
objected due to concerns that the plant could serve as a source of
plutonium for use in nuclear weapons.
Background:
IAEA's policy-making bodies--the General Conference and the Board of
Governors--set overall policy direction for the TC program. The United
States is a permanent member of the Board of Governors. IAEA's
Secretariat--led by a Director General and structured into six
functional departments, including the Department of Technical
Cooperation--is responsible for implementing policies established by
the General Conference and the Board of Governors.[Footnote 4]
Typically, the TC program develops and approves new projects on a 2-
year cycle. Member states begin submitting project proposal concepts
to IAEA in September of the year prior to approval. IAEA officials
screen proposal concepts through the fall, and member states develop
and refine their proposals through March of the approval year. By
July, IAEA's Secretariat comes to a final agreement on TC project
proposals that it will back for approval by the Technical Assistance
and Cooperation Committee and the Board of Governors. The TC project
proposals are discussed with member states in bilateral and regional
group meetings during IAEA's General Conference, which is held in
September. In November, the Technical Assistance and Cooperation
Committee and the Board of Governors give final approval to the
proposed TC projects. This approval covers the entire life cycle of
the project.
As of June 2008, 1,290 TC projects were under way, with each project
lasting, on average, 3 to 4 years. A TC project typically has several
components, including equipment procurement, provision of expert
services, training, and fellowships. Each year, about 1,600
individuals around the world are granted fellowships by the TC
program, allowing them to pursue specialized nuclear studies at
universities, institutes, and other facilities outside their home
countries.
Financing of TC projects is generally supported through the annual
voluntary contributions of member states to IAEA's Technical
Cooperation Fund (TCF).[Footnote 5] Each member state is expected to
meet an annual financial pledge to the TCF, which is set as a
percentage of the total TCF target budget. The U.S. target rate has
been set at 25 percent of the TCF target budget, while many of the
least developed countries are expected to contribute less than 1
percent of the TCF budget. Contributions to the TCF are fungible--that
is, they are not designated for, and cannot be traced to, specific TC
projects.
In the United States, State and DOE are the two principal agencies
involved in TC issues. U.S. funding to the TC program--including its
contribution to the TCF, extrabudgetary funding for specific projects,
and "in-kind" contributions--is provided from State's budget as part
of the overall annual U.S. "voluntary contribution" to IAEA.[Footnote
6] In addition to providing funding to IAEA, State coordinates U.S.
policy toward the TC program by working through the U.S. Mission to
International Organizations in Vienna.
In our 1997 report on the TC program, we asked Congress to consider
requiring State to withhold a proportional share of its voluntary
funds to IAEA that would otherwise go to countries of concern, as
defined by section 307(a) of the Foreign Assistance Act of 1961, if it
wished to make known that the United States does not support IAEA's
technical assistance projects in those nations. In addition, we
recommended that the Secretary of State direct the U.S. interagency
group on IAEA technical assistance to systematically review all
proposals for TC projects in countries of concern prior to their
approval by IAEA to determine whether the projects are consistent with
U.S. nuclear nonproliferation goals. In response, an interagency
process was established, involving State, DOE, and the DOE national
laboratories, to evaluate proposed and active TC projects for
proliferation risks. State leads the reviews of TC project proposals
and ongoing projects. DOE provides technical input to this process
using the technical expertise of its national laboratories to assess
the projects' proliferation risks and reports its findings to State.
GAO's 2009 Findings and Recommendations on Potential Proliferation and
Management Concerns Surrounding the TC Program:
In our 2009 report, we identified potential proliferation concerns
with the TC program, including concerns about certain countries
receiving TC assistance--such as those designated by the United States
as state sponsors of terrorism--and lack of sufficient and timely
information from IAEA on TC project proposals to allow the United
States or other member states to assess the proliferation risks of the
proposed projects. We also identified several limitations in how the
TC program is managed, which could undermine its long-term
effectiveness, including the use of outdated program metrics and
financial resource constraints.
GAO's Findings on Potential Proliferation and Management Concerns in
the TC Program:
In our 2009 report, we found that neither State nor IAEA sought to
systematically limit or prevent TC assistance to countries that (1)
have been identified as sponsors of terrorism, (2) are not parties to
the NPT, and (3) have not completed comprehensive safeguards or
additional protocol agreements with IAEA. Specifically:
* State officials told us that the United States did not
systematically try to limit TC projects in Cuba, Iran, Sudan, and
Syria--which the department designated as sponsors of terrorism. These
four countries received more than $55 million in TC assistance from
1997 through 2007. Moreover, IAEA officials told us that the agency
did not seek to limit or condition TC assistance in countries such as
Iran and Syria that have been found or suspected by IAEA of having
violated their safeguards commitments and may be engaged in undeclared
nuclear activities. Under U.S. law, however, State withholds a portion
of its contributions, except for certain projects, to the TCF equal to
the U.S. proportionate share of TC expenditures in Cuba. In addition,
in the past, State has withheld a proportionate share of its TCF
contribution for Iran, Libya, and the Territories Under the
Jurisdiction of the Palestinian Authority. Regarding Iran, State
reported in 2007 that three TC projects in that country were directly
related to the Iranian nuclear power plant at Bushehr. IAEA's former
Deputy Director General for the TC program told us that requests for
TC assistance are evaluated strictly on technical merits and the
contributions of the proposed projects to a nation's development
priorities.
* From 1997 through 2007, the TC program disbursed approximately $24.6
million in assistance to India, Israel, and Pakistan, although these
states are not party to the NPT. IAEA officials told us that NPT
membership is not required for IAEA member states to receive TC
assistance under the agency's statute. State officials told us that
the United States did not attempt to systematically limit TC program
support to countries that are not signatories to the NPT.
* According to IAEA, Article III of the NPT requires all nonnuclear
weapon states to conclude comprehensive safeguards agreements with the
agency, and the United States and IAEA have recognized an inherent
linkage between nonnuclear weapon states' rights to access peaceful
nuclear technology and their obligation to accept safeguards on their
nuclear activities.[Footnote 7] We found, however, that nonnuclear
weapon state members of IAEA are not required to complete
comprehensive safeguards or additional protocol agreements with IAEA
to be eligible for TC assistance, even though U.S. and IAEA officials
have stressed the need for all countries to bring such arrangements
into force as soon as possible.[Footnote 8] We found that 17 states
and territories without comprehensive safeguards agreements in force
in 2007 received approximately $6.7 million in TC program assistance
that year, while 62 states and territories without an additional
protocol in force in 2007 received approximately $43.2 million in
assistance that same year.
We also found that the proliferation concerns associated with the TC
program were difficult for the United States to fully identify,
assess, and resolve for the following reasons:
* Lack of sufficient and timely information on TC project proposals.
State, DOE, and national laboratory officials told us that there was
no formal mechanism for obtaining TC project information from IAEA
during the proposal development phase. Of the 1,565 proposed TC
projects DOE and the national laboratories reviewed for possible
proliferation risks from 1998 through 2006, information for 1,519
proposals, or 97 percent, consisted of only project titles. DOE and
national laboratory officials told us that a TC project proposal title
alone is generally insufficient to reliably assess proliferation risk.
In addition, DOE and national laboratory officials told us that in
recent years they had received less information about proposed TC
projects and that the information they did receive is arriving closer
to the time when such projects must be approved by IAEA's Technical
Assistance and Cooperation Committee and the Board of Governors.
State, DOE, and national laboratory officials told us that it is
preferable to raise potential proliferation concerns about TC
proposals with IAEA officials early in the development cycle, when
project proposals can be modified more readily. Finally, while IAEA's
Safeguards Department reviews TC proposals and ongoing projects, we
were told the results of these reviews are confidential and are not
shared with the United States or other governments. We were unable to
assess the effectiveness of this IAEA internal review process because
IAEA officials declined to provide us with certain basic information
regarding the results of the review, including the total number of TC
proposals the Safeguards Department identified as having potential
proliferation concerns.
* Limited State documentation on how proliferation concerns of TC
proposals were resolved. From 1998 through 2006, DOE and the national
laboratories identified 43 of the 1,565 TC proposals they reviewed as
having some degree of potential proliferation risk. IAEA approved 34
of these 43 proposals. However, we were unable to determine if State
addressed DOE's and the national laboratories' concerns because--with
the exception of one case--State could not document how it responded
to these findings. State officials told us that as a result of a 2005
reorganization of the department's arms control and nonproliferation
bureaus, the office that monitors TC program issues has fewer staff to
conduct IAEA oversight.
* Shortcomings in U.S. policies and IAEA procedures related to TC
program fellowships. From 1997 through 2007, we found that of 1,022 TC
program fellows who studied nuclear issues at universities or other
organizations in the United States, 23 were from non-NPT member
states, such as Israel and Pakistan, or from U.S.-designated state
sponsors of terrorism, such as Syria. We found that State's Office of
Multilateral Nuclear and Security Affairs lacked a formal policy and
specific criteria to serve as the basis for approving or rejecting
requests from TC fellows to study nuclear issues in the United States.
[Footnote 9] In addition, we found shortcomings in the extent to which
IAEA monitored the proliferation risks of TC fellowships.
Specifically, IAEA did not systematically track individuals who
completed fellowships to determine whether they were still working on
peaceful nuclear programs in their home country, and how the knowledge
and expertise they obtained is being applied.
In the 2009 report, we also identified management challenges limiting
the TC program's long-term effectiveness in three areas: program
performance metrics, financial resource constraints, and project and
program sustainability. Specifically:
* Inadequate program performance metrics. IAEA did not have adequate
metrics for measuring the TC program's impact. For example, IAEA
officials told us that performance metrics developed in 2002 did not
assess the impact of TC projects in meeting specific member state
development and other needs, such as the number of additional cancer
patients treated or the number of new nuclear security safety
regulations promulgated. IAEA's internal auditor also reported that
the TC program lacked appropriate performance indicators.
* Financial resource constraints. Many member states did not pay their
full share of support to the TCF but nevertheless received TC
assistance, while some high-income countries also received support
from the TC program. The TCF experienced a shortfall in 2007 of $3.5
million, or 4 percent, of the $80 million total target budget because
62 member states did not pay their full contributions, including 47
countries that made no payment at all. In addition, in 2007, 13 member
states that the UN defined as high-income received a total of $3.8
million in assistance from the program, or 4 percent of the total TC
disbursements that year. While IAEA officials told us it would be
helpful if more developed countries shifted from TC recipients to
donors, IAEA had not developed a policy or criteria for determining
when such countries should be graduated from assistance.
* TC project and program sustainability challenges. IAEA did not
systematically review completed TC projects to determine or verify
whether the host country is sustaining project activities and results.
In addition, the TC program overall faced sustainability challenges
because program funding was distributed across 18 different technical
areas, making it difficult for IAEA to set clear program priorities
and to maximize the impact of limited TC program resources. Finally,
IAEA had developed outreach strategies to engage new potential
partners and donors--primarily from international development
organizations--to help sustain the TC program. However, this effort
faced several limitations and shortcomings, including a focus on
attracting TC program donors and partners in the economic and social
development communities--rather than private sector partnerships--and
failure to evaluate long-term commercial potential of TC projects.
GAO's Recommendations to Address Potential Proliferation and
Management Concerns in the TC Program:
Based on our findings, we asked Congress to consider directing State
to withhold a proportionate share of future U.S. voluntary
contributions to the TC program that is equivalent to the amounts of
TCF funding that would otherwise be made available to U.S.-designated
state sponsors of terrorism and other countries of concern, as it
currently does with Cuba and has done in the past with Iran, Libya,
and the Territories Under the Jurisdiction of the Palestinian
Authority. Alternatively, we noted that if Congress wishes to obtain
additional information before making this decision, it could require
State to report to Congress explaining its rationale for not
withholding a proportionate share of the U.S. contribution to the TCF
for U.S.-designated state sponsors of terrorism.
In addition, we recommended that the Secretary of State, working with
IAEA and member states through the Board of Governors, explore
undertaking the following eight actions to address the range of
proliferation and management concerns related to the TC program:
* Establish a formal mechanism to facilitate greater and more timely
information sharing on TC project proposals between IAEA and the
United States and other countries--including detailed information on
the TC proposals themselves, as well as the results of IAEA's internal
proliferation reviews of the proposals--so that proliferation and
other concerns can be identified and addressed early in the project
development cycle.
* Promote a regular and systematic process for obtaining, retaining,
and updating information on prior TC project fellows to better track
where and how the knowledge and expertise they have obtained is being
applied.
* Strengthen the TC program's mechanisms for collecting member states'
contributions to the TCF to include withholding from nonpaying states
a percentage of TC assistance equivalent to the percentage of their
target rate that they fail to contribute to the TCF.
* Establish criteria for determining when member states, especially
those defined as high-income countries, no longer need TC assistance
in particular fields and when such states could be graduated from
further TC support altogether.
* Seek to implement new results-based performance metrics for the TC
program that establish specific national, regional, and interregional
social and economic needs and measure the collective impact of TC
projects in meeting those objectives.
* Focus the TC program on a more limited number of high-priority
technical areas to maximize the impact of program resources.
* Encourage the TC program to reach out to private sector entities as
part of its new partner and donor development strategy.
* Request member states to assess in their TC project proposals the
prospects for commercialization of and private sector investment in
the results of the projects. Such steps could include requiring
information in the proposals on potential business plans, marketing
strategies, and strategies for attracting commercial partners once
IAEA support has concluded.
Finally, to clarify and improve U.S. oversight of the TC program, we
recommended that the Secretary of State undertake the following two
actions:
* Enhance record-keeping and formally document management actions
regarding the discussion, action, and disposition of TC project
proposals that DOE and the national laboratories identify as having
potential proliferation concerns.
* Issue formal guidance with well-defined criteria--such as countries
designated by State as sponsors of terrorism or gross human rights
violators--that State should use as the basis for approving or
rejecting TC fellowship requests for nuclear studies in the United
States. This guidance could include, among other things, a list of
specific countries from which State would not approve TC fellows that
could be updated and revised annually, or as other circumstances
warrant.
State Continues to Oppose Withholding a Proportionate Share of U.S.
Funding for the TC Program, but State and IAEA have Made Some Progress
in Implementing Our Other Recommendations:
State officials told us that they continue to strongly oppose our
matter for congressional consideration to require State to withhold a
proportionate share of the U.S. voluntary contribution to the TC
program that is equivalent to the amounts of TCF funding that would
otherwise be made available to U.S.-designated state sponsors of
terrorism and other countries of concern. In its comments on our 2009
report, State objected to the matter for a number of reasons, noting
that (1) it would be counterproductive to a separate recommendation we
made in the report encouraging all states to pay their full share to
the TCF; (2) it would not stop TC projects in targeted countries
because TCF funding is fungible; (3) Congress has exempted IAEA
contributions from this type of proportionate withholding; (4) none of
the TC projects in state sponsors of terrorism have been shown to have
contributed to a WMD program; (5) there are adequate safeguards within
IAEA's Secretariat to prevent TC projects from contributing to a WMD
program; and (6) it would negatively impact the ability of the United
States to achieve other critical objectives within IAEA.
We continue to believe that Congress should give serious consideration
to this matter, and that it is not unique or unprecedented. As we
noted in our report, U.S. law currently requires the withholding of a
proportionate share of the U.S. contribution to the TCF for certain
projects in Cuba, and has required withholding in the past for Iran,
Libya, and the Territories Under the Jurisdiction of the Palestinian
Authority. Moreover, we believe there is a fundamental principle at
stake. As we described in our report, the United States has applied
several types of sanctions limiting foreign assistance and trade to
states it has designated as sponsors of terrorism and to other
countries. To avoid the appearance of an inconsistent approach and to
foster greater cohesion in U.S. policy toward such nations, we believe
that it is fair for Congress to consider requiring State to withhold a
share of the U.S. contribution to the TCF for program activities in
countries that the United States chooses not to engage directly in
trade, assistance, and other forms of cooperation. The United States
would almost certainly continue to be the largest donor to the TC
program even with such a withholding, and State could deflect
potential criticism from other member states by offsetting the amount
of funding it withholds from the TCF by increasing the amount of
funding provided through its extrabudgetary contribution for "footnote
a/" TC projects.[Footnote 10] In this way, total U.S. financial
support to the TC program--and U.S. political commitment to the IAEA
mandate and the NPT--could be preserved. To give Congress greater
flexibility and more information on this matter, we suggested that
Congress could consider the alternative option of requiring State to
report on its rationale for not withholding a proportionate share of
the U.S. contribution to the TCF for U.S.-designated state sponsors of
terrorism.
Despite its disagreement with our matter for congressional
consideration, State has taken our other 2009 report recommendations
seriously and has communicated directly with IAEA officials on their
potential implementation. For instance, we reviewed correspondence
from 2010 between State and IAEA officials in which State underscored
its support for most of our recommendations. In addition, in March
2011, State officials told us they were optimistic that the new IAEA
Director General and new Deputy Director General for the Technical
Cooperation Program will continue to be receptive to changes to the
management of the TC program. Nevertheless, State officials commented
that while the United States remains the largest TC program donor,
State has limited ability to influence IAEA's decision-making and
cannot direct or require IAEA to implement our recommendations.
Moreover, in the correspondence between State and IAEA we reviewed,
IAEA officials indicated that while they are supportive of some of our
recommendations--such as phasing out highly-developed nations from
further TC assistance--fully implementing them could require changes
in IAEA policies that must be decided by IAEA's governing bodies, not
by the Secretariat itself.
Nevertheless, State and IAEA officials were able to cite varying
levels of progress concerning implementation of our recommendations.
[Footnote 11] Progress was reported by State and IAEA in 7 of our
recommendations, as follows:
* Establishing a formal mechanism to facilitate greater and more
timely information sharing on TC project proposals between IAEA and
the United States and other countries. Although no formal mechanism
has yet been established, according to State officials, IAEA's
Secretariat took steps to ensure that descriptions of TC project
proposals were provided to all IAEA member states during the September
2010 Board of Governors meeting. State officials told us that
receiving the TC proposal descriptions 5 weeks in advance of the
November 2010 Technical Assistance and Cooperation Committee and Board
of Governors meetings, during which the proposals were approved, was a
significant improvement from the previous practice, in which proposal
information was typically made available to member states 2 weeks
prior to these meetings. IAEA officials indicated in documentation
provided to us in March 2011 that the Secretariat is aiming to provide
proposals 5 to 6 weeks in advance of the 2011 November Technical
Assistance and Cooperation Committee and Board of Governors meetings.
A DOE official, who coordinates efforts by DOE and its national
laboratories to assess proliferation concerns with the TC program,
confirmed that information on TC project proposals was provided
earlier by IAEA and that this additional amount of time was helpful to
the U.S. proliferation review process. This official believed,
however, that the amount and usefulness of information provided by
IAEA about the proposed projects had not significantly improved since
our report was issued in 2009. As a result, the DOE official told us
that DOE generally considered TC proposal information alone to be
insufficient to allow DOE and its national laboratories to reliably
assess the proliferation risks of the TC proposals. The DOE official
noted that the U.S. government has continued efforts to obtain more
information from IAEA on TC proposals, although he said that it
remains to be seen whether such efforts will bear fruit.
* Promoting a regular and systematic process for obtaining, retaining,
and updating information on prior TC project fellows. Documentation
IAEA provided to us in March 2011 highlighted a new IAEA system called
the "InTouch Platform" launched in early 2011 that will allow IAEA to
remain in contact with TC fellows. State officials told us that the
usefulness of this system, however, depends on the willingness of TC
fellows to voluntarily report and update information on their
whereabouts and activities.
* Seeking to implement new results-based performance metrics for the
TC program. According to State officials, IAEA officials in the TC
Department have undertaken steps to foster results-based performance
metrics for TC projects. These steps have included IAEA sponsorship of
an interregional TC project and issuance of guidelines that are
designed to promote results-based management of TC projects by IAEA
member states. Documentation IAEA provided to us in March 2011 noted
that the TC program is working on standard performance indicators for
each of the TC program's 30 fields of activities, and that the 2012-
2013 cycle of TC projects will include strengthened monitoring and
reporting requirements on project results.
* Focusing the TC program on a more limited number of high-priority
technical areas to maximize the impact of program resources. In
documentation provided to us in March 2011, IAEA reported that it has
consolidated the field of activities covered by the TC program from
140 fields to 30 fields, notified member states that no more than 8
active TC projects will be supported per country, and undertaken a
major management effort to close long-standing TC projects. According
to IAEA, these steps are expected to lead to a smaller overall
portfolio of TC projects.
* Requesting member states to assess in their TC project proposals the
prospects for commercialization of and private sector investment in
the results of the projects. While no formal mechanism for assessing
commercialization or private sector investment potential appears to
have been incorporated into the TC proposal development process, in
documentation IAEA provided to us in March 2011 it was noted that
there have been instances where TC project commercialization has been
realized, including mutation breeding of rice varieties in Vietnam and
Pakistan.
* Enhancing State record-keeping and formally documenting management
actions regarding the discussion, action, and disposition of TC
project proposals having potential proliferation concerns. State has
implemented a new e-mail and cable management system since our report
that State officials said they believe will improve storage and
retrievability of their records regarding the discussion, action, and
disposition of TC project proposals that DOE and its national
laboratories identified during the interagency review process as
having potential proliferation concerns.
* Issuing formal guidance with well-defined criteria that State should
use as the basis for approving or rejecting TC fellowship requests for
nuclear studies in the United States. State has developed formal
guidance establishing criteria for accepting or denying applications
from TC fellows from foreign countries requesting opportunities to
study nuclear issues at institutions in the United States. Among other
things, this guidance states that TC fellowship applications for
nuclear studies in the United States from countries listed as state
sponsors of terrorism and from countries deemed gross human rights
violators would not be approved.
We are making no new recommendations at this time. In preparing for
this hearing, we interviewed State officials on how our
recommendations have been implemented. We also interviewed a DOE
official for his views regarding changes in the quantity and
timeliness of information DOE has received on TC proposals since our
2009 report and whether this information has improved DOE's ability to
assess proposed TC projects for potential proliferation concerns. We
also reviewed documentation provided by State and IAEA concerning our
recommendations and the steps taken to implement them. We discussed
the factual information in this statement with State and DOE officials
and incorporated their comments as appropriate. We conducted the
performance audit work that supports this statement in accordance with
generally accepted auditing standards. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence
to produce a reasonable basis for our findings and conclusions based
on our audit objectives. We believe the evidence obtained provides a
reasonable basis for our statement today.
Madam Chairman, this concludes my prepared statement. I would be
pleased to answer any questions that you or other Members of the
Committee may have at this time.
GAO Contact and Staff Acknowledgments:
For further information about this testimony, please contact Gene
Aloise at (202) 512-3841 or aloisee@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this statement. Glen Levis, Assistant Director, and
William Hoehn made key contributions to this statement.
[End of section]
Footnotes:
[1] GAO, Nuclear Nonproliferation: Strengthened Oversight Needed to
Address Proliferation and Management Challenges in IAEA's Technical
Cooperation Program, [hyperlink,
http://www.gao.gov/products/GAO-09-275] (Washington, D.C.: Mar. 5,
2009).
[2] In 2010, the United States' voluntary contribution to the IAEA
Technical Cooperation Fund was $21 million. In addition, the United
States provided approximately $10.3 million in technical cooperation
extrabudgetary assistance in 2010.
[3] GAO, Nuclear Nonproliferation and Safety: Concerns With the
International Atomic Energy Agency's Technical Cooperation Program,
[hyperlink, http://www.gao.gov/products/GAO/RCED-97-192] (Washington,
D.C.: Sept. 16, 1997).
[4] The other IAEA departments are the Departments of Management,
Nuclear Sciences and Applications, Safeguards, Nuclear Energy, and
Nuclear Safety and Security.
[5] A TC project may be funded in whole or in part from the TCF, and
can be supported through extrabudgetary funding provided by member
states or international organizations.
[6] The U.S. voluntary contribution to IAEA also supports other IAEA
programs and activities, including safeguards, nuclear safety, and
nuclear security.
[7] The NPT requires nonnuclear weapon state parties to the treaty
(defined as those countries that had not manufactured and detonated a
nuclear device before January 1, 1967) to accept IAEA safeguards on
all nuclear material used in peaceful activities so that the agency
can verify that their nuclear programs are not being used for weapons
purposes. Most countries have concluded "comprehensive safeguards
agreements" with IAEA, under which governments declare their nuclear
materials and activities to IAEA. The agency then verifies and
monitors these declarations.
[8] IAEA has sought to further strengthen its verification efforts
through a complementary "additional protocol" to a country's
comprehensive safeguards agreement. Under such protocols, states must
provide IAEA with broader information and wider access rights on all
aspects of their activities related to the nuclear fuel cycle.
[9] However, we noted that TC fellows must apply for a U.S.
nonimmigrant visa in order to enter the United States and begin their
studies. State's Bureau of Consular Affairs handles the adjudication
of these visa applications, and in some cases, the consular officers
will request a security advisory opinion, known as a Visa Mantis, if
there are concerns that a visa applicant may engage in the illegal
transfer of sensitive technology. According to State, the key role of
the Visa Mantis process is to protect U.S. national security,
particularly in combating the proliferation of weapons of mass
destruction, their delivery systems, and conventional weapons.
[10] Projects that IAEA approves but that cannot be supported by
available TCF resources are referred to as "footnote a/" projects.
Extrabudgetary funding provided by member states or international
organizations can be allocated directly to specific footnote
a/projects.
[11] We did not independently verify the progress made by IAEA in
implementing our recommendations given the time constraints in
preparing this testimony.
[End of section]
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