Nuclear Nonproliferation:

IAEA Has Strengthened Its Safeguards and Nuclear Security Programs, but Weaknesses Need to Be Addressed

GAO-06-93: Published: Oct 7, 2005. Publicly Released: Nov 7, 2005.

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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.

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.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: Furthermore, to improve IAEA's personnel practices and its ability to determine resource requirements over the long term, the Secretary of State, working with IAEA and its member states through the agency's Board of Governors, should consider 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.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: In a letter to GAO on February 9, 2006, the State Department indicated that it concurred with our recommendation that the agency work to determine whether the nuclear security program receives adequate regular budget funds, and ensure that contributions provided are sufficiently flexible to accomplish priority program objectives. In February 2010 a State Department official reported that such efforts had come to fruition. Specifically, the State Department official reported that the agency is moving toward a model where administrative overhead costs are paid from the regular budget--thus, salaries are accounted for in the regular budget process--while special projects are funded through extra-budgetary considerations and other supplemental funding actions. In addition, the nuclear security portion of the State Department budget will grow from $1.1 million in 2009 to $3.1 million in 2010, which reflects the increasing attention and importance of nuclear security work.

    Recommendation: Furthermore, to improve IAEA's personnel practices and its ability to determine resource requirements over the long term, the Secretary of State, working with IAEA and its member states through the agency's Board of Governors, should consider increasing efforts to encourage more member states to provide voluntary contributions to support IAEA's safeguards activities.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: In a letter to GAO on February 9, 2006, the State Department indicated that it concurred with our recommendation to encourage and solicit additional member states' voluntary contributions to support IAEA's safeguards activities. In February 2010 a State Department official reported to us that the State Department has continuously sought contributions from other IAEA member countries for various key projects. For example, on the planned upgrading of a safeguards laboratory--a major capital investment--the State Department recently worked with the IAEA to secure key contributions of millions of dollars from the European Union and Japanese governments. The State Department official reported the agency routinely and continuously solicits support and financial contributions from member states.

    Recommendation: Furthermore, to improve IAEA's personnel practices and its ability to determine resource requirements over the long term, the Secretary of State, working with IAEA and its member states through the agency's Board of Governors, should consider developing a systematic process that forecasts safeguards budgetary requirements for the long term--beyond the current 2-year cycle.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: In a letter to GAO on February 9, 2006, the State Department indicated that it concurred with our recommendation that the State Department work with the IAEA to develop a systematic process that forecasts safeguards budgetary requirements for the long term, beyond the 2-year cycle used at the time of GAO's report. In February 2010 a State Department official reported to us that since the issuance of GAO's report, the IAEA has convened a panel to look at long-range plans for safeguards over the next 12 years. The panel is examining fuel cycle issues and resource needs for new facilities coming online, among other things. The panel has developed a 12-year strategic plan that it plans to re-examine in 6 years, and project another 12 years out. The strategic plan includes a mid-range [6-year] forecast as well as the 12-year forecast.

    Recommendation: Furthermore, to improve IAEA's personnel practices and its ability to determine resource requirements over the long term, the Secretary of State, working with IAEA and its member states through the agency's Board of Governors, should 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.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: In a letter to GAO on February 9, 2006, the State Department indicated that it concurred with our recommendation that the State Department work with the IAEA to rectify human capital practices that negatively impact IAEA's ability to implement strengthened safeguards. State noted that it would continue to press for greater flexibility and broader use of IAEA discretionary authority to make exceptions to personnel rules where necessary to ensure the strength and continuity of critical safeguards and security programs. In addition, a State Department official in February 2010 reported to us that the State Department in 2006 and 2007 worked with the IAEA to convene an international panel to examine IAEA's human capital practices, which produced a report with more than 100 recommendations. In addition, the State Department worked with the IAEA to establish an informal "Future of the Agency" committee to discuss next steps and plan implementation strategy for these human capital recommendations. Moreover, the State Department official reported that consensus on raising the mandatory retirement age has been achieved, and the IAEA is working to implement this.

    Recommendation: 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, the Secretary of State, working with IAEA and its member states through the agency's Board of Governors, should consider developing clear and meaningful measures to better evaluate the effectiveness of IAEA's strengthened safeguards program and nuclear security activities.

    Agency Affected: Department of State

    Status: Closed - Not Implemented

    Comments: In a letter to GAO on February 9, 2006, the State Department indicated that it concurred with our recommendation that the State Department work with the IAEA to coordinate and ensure that IAEA projects are valuable, meaningful, and that financial and other resources are leveraged wisely. However, in February 2010 a State Department official reported to us that the agency had struggled to develop meaningful qualitative or quantitative metrics to measure progress. The official noted the State Department continues to assess the extent to which IAEA member countries 1) have adopted the Additional Protocol; 2)have Comprehensive Safeguards in force; and 3) have Integrated Safeguards as useful tools/proxies for assessing the agency and multilateral community's progress in promoting safeguards and nuclear security programs. However, no other dedicated qualitative or quantitative metrics to measure various programs' effectiveness have been developed to date.

    Recommendation: 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, the Secretary of State, working with IAEA and its member states through the agency's Board of Governors, should 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.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: In a letter to GAO on February 9, 2006, the State Department indicated that it concurred with the recommendation that the State Department has worked with IAEA to reduce the number of agreements that limit IAEA's authority to implement strengthened safeguards activities in countries with small quantities of nuclear material. The letter noted that at a September 2005 IAEA Board of Governors meeting, the Board voted to approve a replacement for the existing Small Quantities Protocol, which would eliminate restrictions on the application of safeguards in states with small quantities of nuclear material that currently limit IAEA's ability to uncover covert nuclear activities. In addition, in February 2010 a State Department official provided documentation to GAO attesting that 40 states have taken action on the revised Small Quantities Protocol--either signed, brought into force, or approved it. In addition, the State Department official noted the agency has consistently advocated that countries with small quantities of nuclear material in their possession adopt the Additional Protocol to strengthen safeguards.

    Recommendation: To maximize the benefits for safeguards-related activities, the Secretary of State, in consultation with the managers of the U.S. safeguards technical support program, should 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 Affected: Department of State

    Status: Closed - Not Implemented

    Comments: In a letter to GAO on February 9, 2006, the State Department indicated that it concurred with our recommendation that it work with IAEA to consider ways to ensure that safeguards resources are allocated and spent in the most efficient manner and had encouraged IAEA to use the most cost-effective means of travel whenever possible. However, in February 2010 a State Department official reported to us that no known changes in IAEA's travel policy have been undertaken. For example, the State Department routinely requires senior-level approval for business class or first class travel on long-haul flights of 14 hours or more, whereas IAEA allows such travel on flights of 6 or more hours. The State Department official additionally noted that while there were efforts underway to decrease the amount of travel by IAEA staff, there was little discussion regarding the means and method of such travel.

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