Press Briefing by Dan Poneman Senior Director for Nonproliferation and Export Controls, National Security Council

The Briefing Room

1:12 P.M. EST

MR. MCCURRY: Good afternoon, ladies and gentlemen. Let me start with a guest attraction today, because today in New York the Democratic Peoples Republic of Korea, North Korea, and the Korean Peninsula Energy Development Organization. which we refer to as KEDO, conclude an agreement on supply of light water reactor technology to the DPRK.

This is pursuant to a very patient and very disciplined discussions that we've engaged in, that have now successfully limited the threat of further operations in North Korea's nuclear program, an agreement that has really significantly reduced the risk to the United States. And it is yet another mark of the success of this administration's foreign policy in protecting the American people and our key strategic interests around the world.

Because of the importance of the agreement signed today, and just to bring you back into full detailed information on where we are with the North Korean nuclear issue, I've asked Dan Poneman, who is the Senior Director at the NSC for Nonproliferation and Export Controls -- the NSC's guy for things that go "boom" -- and he's here, will tell you a little bit about the agreement and where we are in managing what had been at one time one of the most urgent nonproliferation issues that we were managing anywhere in this world.

MR. PONEMAN: Thank you, Mike. The agreement that was concluded today in New York is a legally binding instrument between the Korean Peninsula Energy Development Organization -- known as KEDO -- on the one hand, and the Democratic People's Republic of Korea on the other. That is to say, it is between that international organization known as KEDO and the North Korean government. It is not an agreement between the United States, per se, and North Korea; although the United States, along with our South Korean and Japanese allies comprise the KEDO organization.

The negotiations were led on the site of KEDO by Ambassador Stephen Bosworth, who conducted very able negotiations. We did have a U.S. representative to those talks, Gary Samore, who is up today with Ambassador Bosworth. And I think you can view today's agreement in the context of a long process beginning, really, in '93-'94 as we became increasingly concerned about the North Korean nuclear program, that will bring North Korea back into the fold of countries compliant with international nuclear norms.

To just set the stage for a moment, if we recall where we were, in the middle of 1994, we had North Korea with a five megawatt reactor, which had already produced some plutonium, which we believe had been extracted from that reactor, that was on the verge of being restarted. They were building two much larger reactors, together, which would have produced enough plutonium for literally dozens of nuclear weapons.

They had a very large reprocessing plant which they were in the process of expanding. And they had spent fuel sitting in a pond in Yongdyon, which was sufficient to support the separation of five to six more bombs-worth of plutonium. This agreement today comes out of the agreed framework of October 1994, which shut that program down and stopped it in its tracks under international monitoring.

What you have in the agreement signed today was one of the many elements called for under the agreed framework, the negotiation of a concrete supply agreement. There are handouts that we can make available, that come out of New York from KEDO, that will tell you in detail delivery schedules, liabilities, adherence to nuclear safety codes, the real nuts and bolts of putting a supply agreement together on the ground.

What is particularly important about it is that it codifies, in a legally binding instrument, those same nonproliferation commitments which were the core of the agreed framework of 1994 -- the continuation of the freeze on both the five megawatt reactor and the two reactors that were under construction; the freeze on reprocessing; the cooperation with us in the separation -- safe storage and separation of the spent fuel from some of the radioactive residuals in that pool; the canning of that fuel; the sending of that spent fuel out of North Korea; and the whole nuclear freeze, which has sustained the situation in North Korea where we do not face the same kind of nuclear risks.

It further binds North Korea to come into full compliance with all IAEA-mandated requirements before any significant nuclear components are shipped into North Korea after a substantial portion of the LWR project has been completed.

In a nutshell, that is what it does. As I said, it's a very practical step. We now expect to continue cooperation on the ground, site survey, spent fuel recanning operation to continue down the track of full implementation of the agreed framework. And it's something that I think we're all safer for.

Q: Where was it signed?

MR. PONEMAN: It was signed in New York City.

Q: In New York. And who -- was it a North Korean and South Korean representatives who signed it?

MR. PONEMAN: No, it was signed by, on the site of KEDO, Ambassador Stephen Bosworth, the KEDO representative, and it was signed by the North Korean representative in New York.

Q: Can you say with confidence that North Korea doesn't have any nuclear weapons?

MR. PONEMAN: We have never said with confidence that North Korea does not have any nuclear weapons. We do not know what we do not know. Based on the information that we've had now for a long time, we believe that North Korea may have separated enough plutonium before we got the agreed framework in place for perhaps one or two nuclear weapons. We have no knowledge beyond that as to what use they have made of that.

But what we do know is that since the agreed framework has been in place, they have not been able to separate one additional nanogram of plutonium.

Q: As I remember, North Korea had over the last year strong objections to the arrangement you announced today because they didn't want to be beholden to South Korea furnishing these light water reactors. What broke the spell?

MR. PONEMAN: Well, that particular problem was a very difficult one, as you said, which was broken by earlier negotiations in June 1995, when our negotiator, Tom Hubbard, secured the agreement from the North Koreans to preserve KEDO's right to select both the reactor model and who would be the prime contractor. Simultaneous with that agreement, in Seoul KEDO decided that South Korea would provide the model and provide the prime contractor. So that particular problem was solved at that time.

What was important today was that that resolution was not disturbed and that, in fact, it was ratified in the agreement that was signed today in New York. So that problem is still in the past, as we put it in the past in June.

Q: What are the respective financial shares of South Korea, Japan and the United States in furnishing these reactors, based --

MR. PONEMAN: What we have said for a long time on that, and is still the case, is that the central role in the financing of the light water reactor project will be played by the ROK, by South Korea. We have said also that Japan will play an important role and that the United States will participate.

Of course, you know, we have gone to the Congress and sought appropriations to support our contribution. But the principal roles in the light water reactor project are still contemplated to be played by the South Koreans and the Japanese.

Q: Do you have anything more specific on that today as a result of the agreement?

MR. PONEMAN: Today's agreement does not speak to that issue. Today' agreement gets the concrete supply contract with all, as I said, nuts and bolts turned in place.

Q: What specifically have we previously asked Congress for? How much money, if it --

MR. PONEMAN: We asked Congress for, in the past -- in the current fiscal year -- $22 million to support our contributions to KEDO. And our expectation is that that is the level of annual resources that we would need to sustain our part of this deal.

Q: And what's the status of that request?

MR. PONEMAN: Well, it is part of the foreign ops bill, so I think that it's tied to that.

Q: A follow-up -- North Korea -- (inaudible) -- the distribution system in -- (inaudible). The deal is ended, or they raise it again in the future?

MR. PONEMAN: This supply contract resolves the question of the scope of supply and what the appropriate roles of KEDO and the DPRK are. We always said that the transmission network was a DPRK responsibility. And there it rests today after the signing of this agreement.

We -- not we, but KEDO will be willing, I'm sure, to facilitate the arrangements of commercial contracts so that there is a possibility of upgrading the grid to incorporate this new power coming in. But that is not something that is a requirement or a burden on KEDO.

Thank you.

THE PRESS: Thank you.

END 1:23 P.M. EST