Select Committee on Foreign Affairs Third Report

Multilateral issues

Iran as a regional power

31. Before the 1979 revolution, Iran was a developing military power which looked set to dominate its region. However, in the 1980s Iran and Iraq fought a vicious war in which many thousands of their citizens perished. Both countries were weakened, but the effects were particularly felt in Iran. The theocratic government in Tehran won few friends among more secular Arab leaders to its West and South, while to the East neither the Soviet-backed regime in Kabul nor its Taleban successors were, for different reasons, sympathetic to the Iranian view of the world. Although it remained an economically active and populous country, Iran failed to project its power throughout the 1980s and 1990s and it is interesting to note that even today, and despite evidence of recent attempts to repair relations with countries such as Egypt, Iran remains in many ways isolated in its region.[20]

32. Given its history both of war with its neighbour and of antipathy towards the United States in particular and the West in general, Iran was ambivalent about last year's conflict in Iraq. Its concerns about US-led military action on its borders were tempered by satisfaction at seeing the removal from power of its old enemy, Saddam Hussein. Dr Ansari suggested to us that "among ordinary people [in Iran], there was considerable sympathy for the coalition."[21] However, there was also concern that, with American armed forces operating in Afghanistan on its eastern border, and in Iraq to the West, Iran might be the next member of the 'Axis of Evil' to be the object of direct military intervention.

33. On the other hand, Iran has an interest in having stable neighbours, or at least neighbours which are preoccupied with their own problems. Whether the US-led forces succeed in achieving stability and prosperity in Iraq and Afghanistan—as we earnestly hope they will—or whether those countries end up as failed states, Iran would probably be justified in feeling it has a more secure future now than it has had for at least two decades. Meanwhile, as Dr Ansari points out,

until a political settlement can be reached in both these states, Iran will be an important 'player' for the coalition. Indeed, for all the rhetoric on either side of the international divide, politicians in both the West and Iran recognise the considerable dividends to be gained through a tacit cooperation.[22]

Map: Iran in its region

Iran and the war against terrorism

34. In our recent Report on Foreign Policy Aspects of the War against Terrorism, we noted the US State Department's description of Iran as "the most active state sponsor of terrorism". According to US State Department Assistant Secretary for Verification and Compliance Paula DeSutter:

Iran's support includes funding, providing safe haven, training, and weapons to a wide variety of terrorist groups including Lebanese Hizballah, HAMAS, the Palestinian Islamic Jihad, and the Popular Liberation Front for Palestine-General Command. Its support of HAMAS and Palestinian Islamic Jihad is of particular concern, as both groups continue their deliberate policies of attacking Israeli citizens with suicide bombings.[23]

35. Iran's long-standing support for violent Palestinian rejectionist groups is a matter of record. The Head of the FCO's Middle East and North Africa Directorate, Edward Chaplin, told us in December that "they [Iran] certainly have a degree of influence through the support and training and other sorts of support they provide to Hezbollah, Hamas and perhaps Islamic Jihad." Mr Chaplin reminded us that "the EU has made very clear there will be no progress on the negotiation of a Trade and Co-operation Agreement unless Iran demonstrates progress on those issues of key concern."[24]

36. Iran has at times appeared more hard-line on the Middle East issue than the declared policies of the Palestinian leadership. However, as we noted in our Report of last month, there have been some signs of a shift in the Iranian position. We concluded in that Report that Iran, through its links with Palestinian terrorist organisations, disrupts prospects for peace in the Middle East; and we called on the Government to encourage Iran to cut those links.[25] We further conclude that a renunciation by Iran of violence as a means of achieving Palestinian statehood—and a cessation of all practical and moral support for such violence—could go a long way towards changing the views of those in the West who currently regard Iran as a sponsor of terrorism.

37. There is, however, a further area of concern about Iran's links with terrorist groups, which is felt particularly in the United States. In her testimony before a joint US Congress/Israeli Knesset hearing last September, already quoted from above, Paula DeSutter said that

the US Government insists that Iran cease its current policy of providing a safe-haven to al-Qaida and Ansar al-Islam operatives and cooperate with international efforts to bring them to justice. The United States has been concerned for some time about the presence in Iran of al-Qaida members, including senior al-Qaida leaders. We believe that some elements within the Iranian regime have helped al-Qaida terrorists transit or find safe-haven inside Iran. Moreover, we believe senior al-Qaida terrorists inside Iran played a part in the planning of the May 12 Riyadh bombings.[26]

38. Given the hostility of the US administration towards Iran it is hardly surprising that Iran is reluctant to co-operate with the United States on terrorism issues, although there is said to be co-operation between Iran and its neighbours in this field. And as we noted in our Report of last month, the Foreign Secretary takes a different line from that of the US. In December, he told us that

co-operation in respect of al Qaeda terrorism … has been the subject of continuing discussions with the Iranian government. They have now I think detained fifty al Qaeda suspects, and what we look forward to is a further and more enhanced degree of co-operation with the Iranian government.[27]

39. In their differing descriptions of Iran's co-operation over al Qaeda and similar groups, the British and US governments appear to see a glass which is, respectively, half full or half empty. Whichever perspective is adopted, it is clear that there remain grounds for concern about Iran's willingness to make common cause with global terrorist groups. We recommend that in its response to this Report the Government set out what it and its allies are doing to achieve "a further and more enhanced degree of co-operation with the Iranian Government" in the war against terrorism.

40. Iran also has its own concerns about terrorism. The Mojaheddin-E-Khalq (MEK) armed group, which formerly operated from bases in Iraq, has been proscribed by the United Kingdom Government and by other EU governments as a terrorist organisation.[28] The Foreign Office told us last year that American forces were "systematically detaining and disarming" MEK forces.[29] Iran, however, remains concerned that some elements in the US have continued to support the activities of the MEK. We recommend that in its response to this Report the Government tell us what is the current extent of support for the terrorist organisation MEK in third countries, and what it is doing to minimise that support.

Iran and Iraq[30]

41. The Foreign Secretary told us in December that "Iran has a clear interest in a restored, representative government" in Iraq.[31] His view is that Iran is not seeking to direct Iraq's Shia community, and that the leader of that community, Ayatollah Sistani—an Iranian by birth—"makes his own decisions on the basis of, as it were, his own community and his own branch of Islam."[32] Neither does he believe that Iran has any links with terrorist groups operating inside Iraq.[33] We accept that Iran has a legitimate interest in the creation of a stable, non-threatening and indeed co-operative neighbour to its West.

42. In our Report of last month on Foreign Policy Aspects of the War against Terrorism, we concluded that Iran has the potential to be a destabilising factor in Iraq, and that the United Kingdom can play a crucial role in helping to ensure that Iran co-operates with efforts to bring stability to that country.[34] We recommend that in its response to this Report the Government inform us of the steps it has taken to encourage Iran to play a positive role in political, social and economic reconstruction in Iraq, and with what results.

Iran and the Middle East peace process

43. Iran has no border with Israel, or with the Palestinian territories. Under the Shah, it had close links with Israel. Since 1979, its stance on the Arab/Israeli conflict appears to have been dictated by ideology, rather than by Iran's national interest (although there are also strong concerns in Tehran about Israel's presumed possession of nuclear weapons). We have already commented above on Iran's record of support for Palestinian groups which reject the right of the state of Israel to exist, and have drawn attention to recent statements which suggest that Iran may be prepared to accept any decision by Palestinians to support a two-state solution. Our own visit to Iran confirmed the impression we had already formed, that the Iranians are indeed reluctantly willing to countenance what for them represents a momentous policy shift—recognition of the state of Israel.

44. We are encouraged by these indications of a new pragmatism on the part of Iran towards the Middle East Peace Process and the status of Israel. It will certainly not be straightforward for Iran to set aside decades of antipathy towards Israel; nor will the Israelis easily be persuaded that the country which they regard as the most hostile and dangerous in the region has changed its mind. The rewards for both of such a development would, however, be considerable.

45. Another state of concern—Libya—has recently performed an unexpected volte-face by first admitting to and then agreeing to discontinue its development of weapons of mass destruction. One essential test of Libya's seriousness of intent will be its future stance on the Middle East question, to which, like Iran, it has supported a single-state solution.[35] Iran is not Libya, but Colonel Qadhafi's decision, brought about by months of patient diplomacy by British and other negotiators, sets an intriguing precedent.

Iran's nuclear programme[36]

46. The United States administration has been foremost among those alleging that Iran has been seeking to develop a nuclear weapons capability.[37] Former proliferation adviser to the Clinton administration Dr Gary Samore told us in February last year that Iran's nuclear activities "cannot be plausibly justified as part of a civil nuclear power programme."[38] On 4 June 2003, John Bolton, US State Department Under Secretary for Arms Control and International Security, told the House of Representatives International Relations Committee that

there is Iran's claim that it is building massive and expensive nuclear fuel cycle facilities to meet future electricity needs, while preserving oil and gas for export. In fact, Iran's uranium reserves are miniscule [sic], accounting for less than one percent of its vast oil reserves and even larger gas reserves. A glance at a chart of the energy content of Iran's oil, gas, and uranium resources shows that there is absolutely no possibility for Iran's indigenous uranium to have any appreciable effect on Iran's ability to export oil and gas. Iran's gas reserves are the second largest in the world, and the industry estimates that Iran today flares enough gas to generate electricity equivalent to the output of four Bushehr reactors… The conclusion is inescapable that Iran is pursuing its 'civil' nuclear energy program not for peaceful and economic purposes but as a front for developing the capability to produce nuclear materials for nuclear weapons.[39]

47. As Mr Bolton noted, Iran has consistently denied that it has a nuclear weapons programme. The Iranian Ambassador in London wrote to our Chairman on 14 June 2003, enclosing a document which set out an economic case for Iran's civil nuclear programme, beginning with the words "Weapons of mass destruction have no place in the defensive doctrine of the Islamic Republic of Iran."[40]

48. We asked the Parliamentary Office of Science and Technology (POST) to carry out an objective study of Iran's energy sector, so that we would be better able to form an independent view of whether its nuclear programme is commensurate with its energy requirements. In his paper for us—which has been subject to peer review—Professor David Cope, Director of POST, concluded that some of John Bolton's criticisms were not supported by an analysis of the facts (for example, much of the gas flared off by Iran is not recoverable for energy use), but that Iran's decision to adopt the nuclear power option could not entirely be explained by the economics of energy production.[41]

49. It is clear from Professor Cope's paper that the arguments as to whether Iran has a genuine requirement for domestically-produced nuclear electricity are not all, or even predominantly, on one side. We note, however, that other energy-rich countries such as Russia use nuclear power to generate electricity and we do not believe that the United States or any other country has the right to dictate to Iran how it meets its increasing demand for electricity, subject to Iran meeting its obligations under international treaties. The problem has been that Iran has failed to provide assurance to those who doubt its intentions, by refusing to open its nuclear facilities to international inspection under the Non-Proliferation Treaty (NPT). That changed last year, when Jack Straw, Dominique de Villepin and Joschka Fischer concluded an agreement with the Government of Iran in Tehran.

The EU troika initiative of October 2003

50. The origins of October's mission by Messrs Straw, de Villepin and Fischer go back to the previous Winter. In February 2003, the Director General of the IAEA, Dr ElBaradei, visited a number of nuclear sites in Iran, and held extensive discussions. In his report to the IAEA Board the following month, Dr ElBaradei wrote that:

During my visit, I emphasized to the Iranian authorities that it is important for all States, and particularly those with sensitive nuclear fuel cycle facilities, to be fully transparent in their use of nuclear technology. In this connection I stressed the value of bringing an additional protocol into force as an important tool for enabling the Agency to provide comprehensive assurances. During my meetings with President Khatami and other officials, Iran affirmed its obligations under the NPT to use all nuclear technology in the country exclusively for peaceful purposes, and to follow a policy of transparency. To this end it agreed to amend the Subsidiary Arrangements of its safeguards agreement, thereby committing Iran to provide design information on all new nuclear facilities at a much earlier date. And I was assured that the conclusion of an additional protocol will be actively considered.[42]

51. Dr ElBaradei paid a further visit to Iran in July 2003. It was becoming apparent by then that Iran had various concerns of its own which the IAEA alone could not address, and was seeking assurances which the IAEA could not give. A period of what the Foreign Secretary termed "intensive diplomatic activity" followed,[43] beginning on 4 August with a letter to the Iranian Government from the foreign ministers of the United Kingdom, France and Germany, and culminating in a decision by them to visit Tehran, in order to demonstrate to Iran that its agreement to an Additional Protocol[44] to the NPT would bring immediate and tangible benefits. This initiative, which was not without diplomatic and political risk, achieved its desired result.

52. On 21 October, Iran and the three foreign ministers agreed to the following statement:

The Iranian authorities reaffirmed that nuclear weapons have no place in Iran's defence doctrine and that its nuclear programme and activities have been exclusively in the peaceful domain. They reiterated Iran's commitment to the nuclear non-proliferation regime and informed the ministers that:

The Iranian Government has decided to engage in full co-operation with the IAEA to address and resolve through full transparency all requirements and outstanding issues of the Agency and clarify and correct any possible failures and deficiencies within the IAEA.

To promote confidence with a view to removing existing barriers for co-operation in the nuclear field:

having received the necessary clarifications, the Iranian Government has decided to sign the IAEA Additional Protocol and commence ratification procedures. As a confirmation of its good intentions the Iranian Government will continue to co-operate with the Agency in accordance with the Protocol in advance of its ratification.

while Iran has a right within the nuclear non-proliferation regime to develop nuclear energy for peaceful purposes it has decided voluntarily to suspend all uranium enrichment and reprocessing activities as defined by the IAEA.[45]

53. For their part, the three foreign ministers

welcomed the decisions of the Iranian Government and informed the Iranian authorities that:

Their governments recognise the right of Iran to enjoy peaceful use of nuclear energy in accordance with the nuclear Non-Proliferation Treaty.

In their view the Additional Protocol is in no way intended to undermine the sovereignty, national dignity or national security of its State Parties.

In their view full implementation of Iran's decisions, confirmed by the IAEA's Director General, should enable the immediate situation to be resolved by the IAEA Board.

The three governments believe that this will open the way to a dialogue on a basis for longer term co-operation which will provide all parties with satisfactory assurances relating to Iran's nuclear power generation programme. Once international concerns, including those of the three governments, are fully resolved Iran could expect easier access to modern technology and supplies in a range of areas.

They will co-operate with Iran to promote security and stability in the region including the establishment of a zone free from weapons of mass destruction in the Middle East in accordance with the objectives of the United Nations.

54. According to Dr Ali Ansari,

The internationalisation of the issue was essential to ensure that hardliners in Iran were not able to present the pressure to sign the additional protocols as another exercise in American double standards and arrogance. Indeed in internationalising the demands for Iran to be more transparent, presenting a united European front and tying the agreement to better political and economic relations with Europe as well as collaboration on civil nuclear technology, Britain helped ensure that Iran was more candid about its previous non-disclosures than many had expected, and more importantly, that henceforth it would fully adhere to its obligations. From the Iranian perspective it was important that its decision was not seen as a humiliating climb down, but as a dignified compromise, and the visit of the three foreign ministers of France, Great Britain and Germany, went a long way to conveying this view.[46]

55. On 18 December 2003, Iran and the Director General of the International Atomic Energy Agency (IAEA) signed an Additional Protocol to Iran's NPT safeguards agreement. Under the Protocol, the Agency will have fuller access than previously to Iran's nuclear facilities, for the purpose of verifying Iran's compliance with its obligations under the Treaty. Signature of the Protocol was regarded as an important sign of Iran's earnestness; compliance with its terms will be regarded as essential if the credibility of Iran's commitment to the terms of the agreement is to be maintained.

56. The agreement did not resolve some important questions, for example about the precise meaning and durability of Iran's commitment "voluntarily" to suspend uranium enrichment, and about Iran's failure to make a full disclosure of its nuclear activities. Iran's place in the web of nuclear trading spun by Pakistan's Dr Abdul Qadeer Khan had also yet to become clear when the agreement was signed. Some of these outstanding issues were addressed in an Iranian statement on 23 February 2004, in which it agreed to suspend—again, voluntarily—all assembly and testing of centrifuges which could be used to enrich uranium, and to place such centrifuges and related components under IAEA supervision. In his report to the IAEA Board the following day, Dr ElBaradei is reported to have concluded that Iran has been developing more sophisticated centrifuges than it had previously admitted, and that it has produced or acquired nuclear materials with very limited plausible civilian application.[47] Assuming these reports to be accurate, it is clear that Iran is guilty either of careless inefficiency or of deliberate deceit.

Prospects for the future

57. Welcome though the agreement with Iran on its nuclear activities is, there can as yet be no certainty that it will achieve its objectives. A shift in the balance of power in Iran, a perceived threat from another country in the region, or unauthorised activities by a member of Iran's nuclear elite (as may have happened in Pakistan) could yet derail the agreement. In practice, we suspect, the agreement is less likely to be derailed than to have its limits thoroughly tested by the Iranians. Scrupulous enforcement by the IAEA will be necessary, backed up by continued resolve on the part of the EU troika and other parties.

58. In our Report of January 2004 on Foreign Policy Aspects of the War against Terrorism, we concluded that

this episode demonstrates the potential of co-ordinated European action to address common security concerns, and that it demonstrates the continued relevance of multilateral arms control mechanisms.[48]

With specific reference to Iran, we conclude that the lesson to be drawn from the success of the EU troika initiative is that, by acting together with firm resolve the international community has been able to persuade Iran to modify its nuclear policies in ways which will bring benefits to Iran, to its neighbours and to the international community. However, it is important to recall that the agreement was only necessary because Iran had been developing covertly a nuclear threat capability. It is also clear from Iran's failure to declare some aspects of its nuclear programme since the Agreement was signed that continued vigilance will have to be exercised by the IAEA, backed up wherever necessary by intrusive monitoring and effective verification measures. We recommend that in its response to this Report the Government set out what steps it is taking to ensure Iran's full compliance with the statements issued by the Iranian Government and the Foreign Ministers of Britain, France and Germany on 21 October 2003 and with the terms of the Additional Protocol to Iran's NPT safeguards agreement, signed on 18 December 2003.

20   Iran's nuclear research and development activities-which might have provided a means to achieve greater regional influence-are considered in paragraphs 46-58 below. Back

21   Ev 20 Back

22   Ev 20 Back

23   'Iranian WMD and Support of Terrorism', Paula A. DeSutter, Assistant Secretary for Verification and Compliance. Testimony before the U.S Congress/Israeli Knesset joint hearing, Washington DC, September 17 2003. Back

24   Q 10. See also para 65 below Back

25   HC (2003-04) 81, para 203 Back

26   'Iranian WMD and Support of Terrorism', Paula A. DeSutter, Assistant Secretary for Verification and Compliance. Testimony before the U.S Congress/Israeli Knesset joint hearing, Washington DC, September 17 2003. Back

27   Q 11 Back

28   Q 1. The MEK is also sometimes referred to as the MKO. Back

29   HC (2003-03) 405. Ev 163 Back

30   For a more detailed discussion of this issue, see the Committee's recent Report on Foreign Policy Aspects of the War against Terrorism, HC (2003-04) 81, paras 28 to 34 Back

31   Q 8 Back

32   Q 4 Back

33   Q 8 Back

34   HC (2003-04) 81, para 34 Back

35   In Colonel Qadhafi's White Book', see Back

36   For a more detailed discussion of this issue, see the Committee's recent Report on Foreign Policy Aspects of the War against Terrorism, HC (2003-04) 81, paras 204 to 221 Back

37   A nuclear weapons capability requires not just a nuclear device, but a delivery system. Iran certainly possesses ballistic missiles capable of reaching Israel, and some commentators have suggested that it may be developing an intercontinental ballistic missile capability.  Back

38   HC (2002-03) 405, Q122 Back

39   Full text available at Back

40   HC (2002-03) 405, Ev 155 Back

41   Ev 6 Back

42 Back

43   Q 5 Back

44   See para 55 below Back

45   The full text of the statement is available at Back

46   Ev 20 Back

47   See, eg, "Iran nuclear omissions worry UN", BBC News, Back

48   HC (2003-04) 81, para 221 Back

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