Agenda Item 6: Assurance of Supply
Madam Chair,

1. Regarding the issue of Assurance of Supply, on which documents GOV/2009/30, 31 and 32 are presented, the Group has always stated that there is a need for caution while addressing thoroughly the associated technical, legal and economic aspects, as well as the underlying political dimensions of this issue. So that any proposal that eventually emerges in this regard is in full accordance with the Statute and takes into account the respective legal obligations of Member States, and the principle of non-discrimination. Therefore, the Group is of the view that no decision or recommendation can be made regarding this issue at this stage. However, the Group would like to put on record the following preliminary ideas and concerns.

2. The Group reiterates that concerns related to nuclear proliferation must not in any way restrict the inalienable right of all States to develop all aspects of nuclear science and technology for peaceful purposes, in particular given its relevance for the sustainable socio-economic uplift of developing nations. The Group, in principle, reiterates its strong rejection of any attempts aimed to discourage the pursuit of any peaceful nuclear technology on the grounds of its alleged "sensitivity".

3. The Group is of the view that any proposal for the assurance of supply should not be designed in a way that discourages States from developing or expanding their capabilities in the area of the nuclear fuel cycle, nor to hamper research and development and international cooperation in the field of peaceful nuclear activities. The Group reiterates that it is the sovereign right of all States without discrimination to develop or expand their capabilities in the field of peaceful nuclear activities including the nuclear fuel cycle.

4. The Agency should not lose its main focus on promoting the peaceful uses of nuclear science and technology, including national fuel cycle capabilities, through national capacity building and transfer of technology. Any proposal which may contain any element that is not in full accordance with the IAEA Statute cannot be acceptable to the Group.

5. Furthermore, from a technical point of view, none of the proposals provide a proper assurance of supply of nuclear fuel. Rather they merely create a backup mechanism to provide LEU when the supply of fuel is disrupted for political reasons. However, having guaranteed access to LEU will not help the recipient states because they require a supply of nuclear fuel assemblies to load into their power reactors. In practical terms, this would mean that it will be impossible on a short notice to supply nuclear fuel where required through the proposed backup mechanisms, especially if the receiving State does not possess fuel fabrication plants. Another difficulty of a legal nature derives from the fact that fuel assemblies and their fabrication methods normally are proprietary technology belonging to the reactor manufacturer.

6. The proposals do not address the supply of natural uranium which fuels a large number of reactors world over. The Group believes that it is important to address this issue in order to dispel perceptions that the real aim of these proposals is to restrict and discourage States from developing or expanding their national enrichment capabilities on the ground of their alleged "sensitivity" instead of providing a technically viable assurance of supply of nuclear fuel.

7. The reliability of the triggering mechanism under the proposals also needs further reflection. The State that disrupts supplies can easily claim that any disruption was due to technical or commercial considerations, thereby blocking the possibility to resort to the suggested mechanisms within the framework of the Agency. Furthermore, there can be no real guarantee that a State that has interrupted the commercial supply of fuel will not attempt to block the triggering of backup mechanisms within the Agency.

8. As far as the financial implications are concerned, the proposal to establish an Agency LEU Bank will surely entail significant financial burdens both for its associated initial establishment and for its maintenance and operation. Unless the political considerations as well as the technical and practical limitations stated above are sufficiently addressed, such a mechanism and its related funding, even if totally dependent on extrabudgetary resources, will divert high level attention while having very little added value to the Member States.

9. In this connection, the Group recognizes that the unilateral proposal put forward by the Russian Federation might entail less financial burdens as far as the Agency is concerned. However, the costs related to the conclusion and the implementation of the relevant agreements should be carefully assessed against the background of the actual reliability of the assurance provided for in this proposal.

10. Regarding the eligibility criteria, the above mentioned documents are not in conformity with the Statute or the legal obligations of Member States. For example, they make access to the backup mechanisms conditional upon a Member State being one "with respect to which … no specific report relating to safeguards implementation ….is under consideration by the Board of Governors". The Group is of the view that this is not an acceptable or credible eligibility criteria. For example, there have been cases where specific safeguards reports were issued in response to allegations, and other cases where these reports contained requests for Member States to take measures that exceed their legal obligations. The Group believes that these reports cannot form the basis for an eligibility criteria.

11. The Group stresses that any further consideration of the issue of assurances of supply of nuclear fuel must be based on a coherent and comprehensive conceptual framework that adequately addresses the views and concerns of all Member States.

12. In light of the above, regarding the recommended action in document GOV/2009/30, the Group does not consider that the document presents a coherent and comprehensive conceptual framework that can form a basis for a more detailed proposal for an IAEA LEU bank to be brought forward for the Board’s consideration. The Group maintains its view that the various technical, economic, legal, and political considerations need to be properly addressed in a transparent and open-ended manner.

13. The Group also stresses the importance of strict adherence by the Secretariat to the Rules Regarding the Acceptance of Voluntary Contributions as approved by the General Conference on 21 September 2001. Given the above-mentioned considerations, the Group finds it premature to authorize the Agency to accept any financial pledges directed to finance the proposed LEU bank. The Group underscores that the mere availability of extrabudgetary resources does not in itself justify rushing the Secretariat into engaging in new activities unless duly approved.

14. Furthermore, regarding the recommended action in document GOV/2009/31, the Group does not consider that the document contains a comprehensive conceptual framework that can form a basis for developing the draft model agreements that could be approved by the Board on this proposal.

15. On document GOV/2009/32 regarding the Proposal of Germany, the Group stresses that an intergovernmental organization such as the IAEA should not administer a commercial company for the supply of nuclear fuel or enrichment services.

16. Based on the above views and concerns, the Group reiterates that no decision or recommendation can be made regarding this issue at this stage. The Group is not in a position to endorse any of the proposals contained in the above mentioned documents.

17. Finally, the Group recommends that, subject to the provisions of the Statute, any decision regarding the implementation of these proposals be taken by consensus by the General Conference, to take into account the views and concerns of all Member States.

Thank you, Madam Chair.