February 2006 Monthly Forecast

Posted 27 January 2006
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MIDDLE EAST

Iran

Expected Council Action

The Security Council will take up the issue of Iran’s nuclear programme after a referral from the International Atomic Energy Agency (IAEA), which is likely to be adopted by the IAEA Board of Governors at a special meeting on 2 and 3 February in Vienna.

The Council is unlikely to move immediately to punitive measures. Incremental Council action is expected, providing opportunities for both pressure and further diplomacy. A presidential statement expressing deep concern at the Iranian violation of its obligations under the Non-Proliferation Treaty, supporting an ongoing IAEA role and encouraging resumed negotiations is possible.

Key Facts
There are two commonly misunderstood facts which should be clarified at the outset:

  • an IAEA resolution referring non-compliance to the Security Council is not a necessary requirement for the Council to take up the issue; and
  • an IAEA resolution, in itself, does not automatically put the issue on the Security Council’s agenda. It still requires a deliberate decision by the Council.

Iran is a party to the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and a member of the IAEA with binding safeguards agreements in place. As such, it has accepted obligations:

  • to refrain from developing nuclear weapons; and
  • to disclose all nuclear programmes for IAEA inspections.

From 1985 to 2003, Iran embarked on an extensive nuclear enrichment programme without declaring it to the IAEA. Iran says that this nuclear programme was for peaceful purposes pursuant to its rights under the NPT.

When this breach of the NPT was discovered in 2002, Iran agreed to sign the IAEA 1997 Additional Protocol, allowing the inspectors to have full access to all nuclear-related sites and promised to suspend its uranium enrichment programme as a confidence-building measure.

In 2004, the IAEA found that Iran was secretly continuing to enrich uranium. This constituted a further serious breach of Iran’s obligations under international law. It convinced many IAEA members that Iran’s credibility, in claiming its programmes were for peaceful purposes, could not be trusted. On 18 June 2004, an IAEA resolution was adopted deploring the lack of Iranian cooperation and failure to respect its commitments. In November 2004, Iran signed the Paris Accord with the EU-3 (France, Germany and the UK) promising a variety of political, economic and security benefits to Iran in exchange for:

  • Iran’s full cooperation with the IAEA; and
  • Iran’s foregoing of any full nuclear fuel cycle activities.

On 15 November 2004, the IAEA issued a report identifying fifteen failures by Iran to meet its obligations under its safeguards agreement since 1985. The report described how Iran had repeatedly misled the international community about its enrichment programme.

Negotiations with the Europeans started in December 2004 but made little progress.

The situation further deteriorated when in August 2005 the newly-elected Iranian President Mahmoud Ahmadinejad rejected the EU-3 proposal and reopened the Isfahan nuclear plant and resumed enrichment related activities.

In September 2005, the IAEA Board passed a resolution finding Iran’s failures (essentially Iran’s refusal to suspend all enrichment related activities resumed in August 2005 and to ratify the Additional Protocol) constituted non-compliance to the IAEA Statute, determining that the Security Council was competent to deal with this issue and requesting the Director General to report to the Board again on further developments. At that point the EU-3 and the US backed off from a vote on a decision that the Board should report Iran’s non-compliance to the Security Council, deciding it was better to continue moving incrementally so as to grant diplomacy a further chance.

Russia, keen to mediate because of its investment in Iran’s nuclear industry, offered to allow Iran to enrich uranium on Russian territory. This became the basis of new negotiations.

After rejecting the Russian proposal twice in November and December and finally announcing his readiness to consider it, Ahmadinejad declared Iran’s intention to resume the uranium enrichment process in January and removed IAEA seals at its Natanz nuclear research facility. This prompted the US and its European allies to call for an emergency session of the IAEA Board and marked the end of two years of diplomacy in the IAEA context.

Key Issues
The IAEA has declared that it is not in a position to determine whether Iran’s nuclear program is for civilian purposes. This doubt on Iran’s real capabilities and intentions is central to the crisis. Uranium enrichment technology is necessary for both civilian and military nuclear reactors. However, the degree of enrichment needed for civilian use is much lower (2-3 percent) than for nuclear weapons (90 percent). The problem is that Iran was found enriching uranium at higher rates than is necessary for civilian use, which raised suspicions about the goal of its nuclear programme. A real tension exists between Iran’s legitimate desire to acquire nuclear technology for civilian use and its lack of credibility due to unlawful concealment of its enrichment programme.

The first issue for the Council is to fully understand the complex scientific, technical and legal issues associated with nuclear technologies and weapons development. It is likely that at the outset some effort will be given to ensure that members are well briefed.

The second issue is procedural. The IAEA must notify the Security Council, according to article III.B.4 of the IAEA statute, “if in connection with the activities of the Agency there should arise questions that are within the competence of the Security Council.” In addition, under article XII.C of the statute, “The Board shall report the non-compliance to all members and to the Security Council and General Assembly of the United Nations.” However, neither a notification under article III nor a report under article XII is necessary to have an issue put on the Council’s agenda. Nor is a report or a notification sufficient to guarantee that the Council will consider the question. There is no causal legal connection between IAEA actions and the Council agenda. The issue, therefore, is how and when the question of Iran will come on the Council agenda.

In this regard, timing will be an issue for the US and the EU-3. They believe that the matter should move to the Council in February. However, the procedure of reporting to the Council under article XII involves the IAEA Director General submitting a report showing non-compliance. Mohammed El-Baradei, the IAEA Director General, has recently declared that his final report would not be available before March. He will however submit an update at the February Board session. It remains to be seen whether that will be sufficient for the proposed action. We do not expect the US/EU-3 to move the issue to the Council without an IAEA resolution. While legally possible, that would not be consistent with their policy of incremental pressure.

As to the issue of getting Iran on the Council agenda, we expect that, provided the policy of incremental pressure is maintained and there is not a premature lurch towards a punitive resolution, there is likely to be a consensus in favour of the Council discussing it.

There have been IAEA referrals in the past, but the Council did not always decide to address the question:

  • The IAEA Board of Governors declared Iraq in violation of its safeguards agreement at a special session on 18 July 1991. In accordance with its Statute, the IAEA transmitted its conclusions to the Security Council. A month later, the Council adopted resolution 707 (1991), demanding that Iraq halt all nuclear activity, provide full disclosure of its weapons programs, and provide UNSCOM and IAEA inspectors access to all sites.
  •  In April 1993, the Board adopted a resolution concluding that North Korea was in non-compliance with its safeguards agreement and referred it to the Council. Subsequently, the Council passed resolution 825 (1993) urging North Korea to reconsider its announcement to withdraw from the NPT and abide by its international obligations. In 2003, facing a new crisis whereby North Korea refused to comply with its safeguards agreement, the IAEA Board decided to report once again to the Council. However, the Council, after extensive discussion took no action, leaving the issue to be pursued through diplomacy outside the Council.
  • In March 2004, the Board passed a resolution welcoming the Libyan decision to eliminate all materials leading to the production of nuclear weapons and reported the matter to the Council “for information purposes only.” The Council took note of this resolution in a presidential statement (S/PRST/2004/10).

Another issue which may arise is that there have been nuclear non-proliferation issues which have arisen outside the IAEA context because the countries concerned were not NPT members (Pakistan, India and Israel). For many UN members, the international peace and security issues are equally grave-and warrant Council attention whenever proliferation risks arise-whether involving NPT parties or not.

Council Dynamics
Given the composition of the IAEA Board and the voting pattern in 2005, it is likely that a resolution referring Iran to the Council will be adopted. It seems there are about 20 committed votes for referral (out of 35 IAEA Board members). Getting as few abstentions as possible from Board members has been a factor in the US/EU-3 willingness to explore diplomatic solutions over the past few months. Of the Board members, Russia, China, Egypt, India, Brazil and South Africa are still uncertain.

The new composition of the Council may have had an impact on the timing of the referral. Brazil and Algeria, who as members of the IAEA Board had abstained on the September 2005 IAEA resolution, have now left the Council. By contrast, they have been replaced in the Council by Ghana and Peru, both of whom voted for the 2005 IAEA resolution.

The US, the UK and France will take the lead in the Council. Council members supporting ongoing diplomatic efforts (principally Russia and China) are unlikely to oppose the issue coming on the agenda provided they have some assurance that the policy of incremental pressure will continue and that they will not be faced with a premature punitive measure. Agreement on discussion of Iran in informal consultations is therefore likely.

Options
The Council has two sets of options:

  • An early presidential statement condemning or expressing concern at the Iranian non-compliance with its international obligations, requesting a better cooperation with the IAEA inspectors and urging a cessation of uranium enrichment (this could be boosted by threats of further action).
  • A call for negotiations on specified issues and requesting the IAEA to provide regular reports on the progress.

It is unlikely that the Council will seek to completely substitute itself for the IAEA processes.  Options involving leverage to facilitate a productive return to the negotiating table and to the IAEA processes are more likely.

Underlying Problems
Iran has significant oil and gas resources. Projected oil revenues for the current year are $50 billion. Iran currently exports roughly 2.5 million barrels a day, which constitute over 80 percent of its total exports earnings per year, and around 50 percent of its gross domestic product. Iran is the second largest OPEC oil producer after Saudi Arabia and holder of 10 percent of the world’s proven oil reserves. It also has the world’s second largest natural gas reserve after Russia.

Full economic sanctions would certainly hit the Iranian economy very hard, but it would also affect the world’s economy as removal of Iranian oil from the market would immediately impact oil prices.

Iran has strong economic relations with energy consuming powers (China, India, and Japan) and Russia has economic interests in Iran’s nuclear industry. For these reasons, Security Council members China, Russia and Japan all have particular interests in a solution.

 Relevant IAEA Documents

 Selected Board Resolutions on Iran
 Board Resolutions Containing Referrals to the Security Council
 Selected Reports on Iran


Historical Background

 January 2006

After a failed attempt to have the Iranian delegation meet the UN inspectors in Vienna, Iran broke the IAEA seals at its Natanz nuclear research facility on 10 January and declared its intention to resume the enrichment process.

 December 2005

Iran refused to resume negotiations with the EU-3. Ahmadinejad again rejected the Russia proposal, and then agreed to consider it.

 11 November 2005

With the agreement of the EU and the US, Russia proposed that Iran enrich uranium in Russia. The plan was rejected by Iran.

 24 September 2005

An IAEA resolution found Iran in violation of the NPT and said that Iran’s nuclear activities “have given rise to questions that are within the competence of the Security Council.” The resolution invited the IAEA Director General to report again and noted that the Board would address this report at a later stage for a possible notification of the Council.

 August 2005

After rejecting the EU-3 cooperation proposal, Tehran declared it had resumed uranium conversion at its Isfahan plant and insisted the programme was for peaceful purposes.

 June 2005

Mahmoud Ahmadinejad won presidential elections, defeating former president Akbar Hashemi Rafsanjani.

 13 December 2004

Negotiations between Iran and the EU-3 started.

 15 November 2004

Under the Paris Accord, Iran agreed to suspend most of its uranium enrichment in return for a European undertaking to cooperate on the nuclear, commercial and political levels. The suspension was effective on 22 November, but Iran also declared that the enrichment would resume at some point because Iran would never renounce that option.

 June 2004

The IAEA rebuked Iran for failing to fully cooperate with an inquiry into its nuclear activities and confirmed the discovery of highly enriched uranium.

 18 December 2003

Iran signed the Additional Protocol to the NPT.

 10 November 2003

IAEA concluded that there was no evidence of a weapons programme in Iran.

 21 October 2003

Iran agreed to fully cooperate with the IAEA by promising to suspend its uranium enrichment program and to allow tougher UN inspections of its nuclear facilities through the signature of the Additional Protocol.

 12 September 2003

The IAEA gave Tehran a 31 October 2003 deadline to prove it was not pursuing an atomic weapons programme.

 26 August 2003

An IAEA report showed the presence of enriched uranium in Iran at rates superior to what is necessary for civilian use.

 13 June 2003

The IAEA asked Iran to implement the Additional Protocol of the NPT.

 21 February 2003

Beginning of the IAEA inspections.

 9 February 2003

The Iranian President Mohammed Khatami announced that his country would be producing its own atomic fuel for future civilian nuclear plants.

 December 2002

Satellite pictures showed that two nuclear sites existed in Arak and in Natanz. Iran accepted an IAEA inspection.

Other Relevant Facts

 The Treaty on the Non-Proliferation of Nuclear Weapons

The NPT was signed in 1968 and froze the number of declared nuclear weapon states at five (US, Russia, UK, France and China). Other states were required to renounce acquiring nuclear weapons and to conclude comprehensive safeguards agreements with the IAEA on their nuclear materials. The three pillars of the NPT are non-proliferation, disarmament and the right to peacefully use nuclear technology.

 The Safeguards

Safeguards consist of a set of internationally approved legal and technical measures whose objective is to provide independent verification of states’ compliance with their non-proliferation commitments to maintain exclusively peaceful nuclear programmes, and to provide an early-warning to the international community if they do not. States voluntarily choose to accept the safeguards through the conclusion of a safeguards agreement with the IAEA. Under comprehensive safeguards agreements, the IAEA system endeavours to detect the diversion of a significant quantity of nuclear material from peaceful nuclear activities to the manufacture of a nuclear weapon. Therefore, a state must declare all of its nuclear material and facilities.

  The Additional Protocol

This is a supplemental model agreement approved by the Board of Governors in May 1997 which broadened the IAEA’s existing inspection authority. The Protocol calls for states to provide more information and for expanded rights of physical access and use of new verification techniques by the Agency.

The Paris Accord between Iran and the EU-3

INFCIRC/637 (26 November 2004)
By this accord, signed on 15 November 2004, Iran:

  • reaffirmed it does not seek to acquire nuclear weapons;
  • committed itself to full cooperation and transparency with the IAEA;
  • reaffirmed it would continue implementing the Additional Protocol; and
  • decided, on a voluntary basis, it would continue and extend its suspension of all enrichment processes while negotiations proceed with the EU-3.

Negotiations would be conducted with the view to reaching an agreement on long-term arrangements which would provide guarantees that Iran’s nuclear programme is only for peaceful purposes. The EU-3 in return would provide Iran with guarantees of nuclear, technological and economic cooperation and commitment on security issues.


Useful Additional Sources

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