Created: 2/24/1998

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ebruary im

Iritelligence Report

Directorate of Intelligence

Intelligence Monitoring of North Korea's Implementation of the US-DPRK Agreed

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Status of IAEA Activity

The eighth round of IAEA-DPRK lechnieal discussions was held in Vienna fromIAEA officials report that no progress was made in resolvingwhich include preservation of historical information, sampling andwaste at the reprocessing plant, and IAEA access to buildings notthe freeze. The IAEA and DPRK agreed to meet for the next round of technicin the first quarter of

Implementation of Light-Water Reactor (LWR) Agreement

KEDO and North Korean officialsrourulbreaking ceremony in mid-August for LWR construction ai Sinp'o North Korea.

A team of US, South Korean, and Japanese diplomats arrived in Sinp'o in late July andite office under the auspices ofive-member team is remaining on location and will be joined by other KEDO officials as the project progresses. The extended presence in the North is unprecedented for all three countries.

outh Korean construction workers and engineers also arrived at the site where they will reside and work side-by-side with North Koreans. South Koreans detailed to the site arc not allowed to travel in the North but are afforded diplomatic immunity while on location. I-

Working-level negotiators for the two sides signed agreements in early July related to postal and telecomrminications channels and emergency medical care for KEDO employees. The two sides also established coastal routes for Soulh Korean ships serving the site and set wages for unskilled North Korean workers at SIer month including benefits such as insurance and one meal per day. Wage rates for skilled North Korean workers were later set0 per month while North Korean managers will be0 per month. P-

Despite minor diplomatic disputes between the North and South, protocol agreements have worked well and construction al Sinp'o has proceeded with only brief interruption.


North Korea suspended construction in early October and confined South Korean workers to quarters, demanding tbe South apologizeorn newspaperhoto of Kim Chong-il was foundastebasket in temporary quarters vacated by South Korean workers. Officials in Seoul acted quickly to reassure P'yongyang that no disrespect was meant by the act and construction resumed after three days.

Following vigorous protests from the North. South Korea scrapped plans in early December to send absentee ballots to Sinp'o io allow South Korean workers there to vote in theecember presidential election.l

Status of Alternative Energy Program

North Korean ports look delivery oft of KEDO oil during the reporting period. As of the end of7 HFO delivery year onctober, KEDO had delivered to North Korean portst oft it is obligated to provide to the North under the terms of the Agreed Framework.

During an October meeting with North Korean counterparts. KEDO officials agreed to offer their "best efforts" to deliver the0 mt by the end of the calendar year. In return. North Korean officials agreed to ensure that crews were prepared to offload shipments on the day of delivery, thereby allowing KEDO to avoid the expensive demurrage charges that were incurred earlier in the year.

Tbe North was more dependent on coal/HFO-powered plants during the reporting period becauseignificant drop in hydroelectric power generation due to drought conditions. Nonetheless, power plants approved for the use of KEDO-supplicd oil

continued io operate at low levels, prcducuon fell to its lowest level ir



An average of three of the main P'yongyang power plant's fourteen units operated during June, July, and August, but by fate September, four or five units were consistently operating. Operations declined in November to an average of three units.

The Ch'ongjin plant remained shut down through late August, but an average of one of four units was in operation thereafter through December.

North Korean officials admitted to KEDO representatives in September that they were usingt of KEDO HFO each month for heating at the Yongbyon nuclear plant even though the boilers had not been Fitted with HFO flowmeters. The North has agreed to allow KEDO to install equipment to monitor tbe amount of oil used at the facility.l

Il wu agreed ihu working level officials would continue working on procedural issues and the agenda at an intersessional meeting scheduledebruary in Beijing.

tatement attributed to the fictitious South Korean National Democratic Frontyongyang called on South Koreans to "blow up" the Chosoneoul daily,4 June editorial in which the paper called on Kim Chong-il io take responsibility for his nation's economic plight and resign. I

Red Cross officials from the two Koreas met in Beijing in July and again in December to discuss South Korean food aid to the North. South Korea0 tons of food to the North intotal deliveries for the yearand committed a: :he December meeting to deliver an0 tons by

North agreed in the July meetings to resume telephonic and written contacts at Red Cross liaison offices in Panmunjorn.

North Korean Red Cross officials did not respondroposal put forward in October by the South io establish family reunion centers al P'aninunjom and elsewhere on the Peninsula.

North refused to allow South Korean teams to monitor the distribution of aid, but did agree to additional delivery routes by land and sea.

North Korean media wailed two weeks before making oblique references to theecember election of Kim Tae-jung to tbe South Korean presidency. While avoiding mention of president-elect Kim Tae-jung by name. Pyongyang's media continued to berate Kim Yong sam and Seoul's "flunkcyist policies" for the South Korean financial crisis and portrayed economic conditions in the South as being worse than those in the North.

North did not respond publicly to president-elect Kim Tae-chung's proposals to exchange envoys, possibly meet with Kim Chong-il personally and restart efforts to implement1 North-South Bask Agreement. Kim Tae-chung made the informal ptrjposals in a

ecember news conference following his election, but since has not elaborated on them.

media continued tots standing reunification proposal which was reiteratedim Chong-il treatise published last August.^

North and South Korea also agreed to open their Flight Information Regions (FIR) lo each other's air traffic controllers at aviation talks held inctober. A


direct phone line allowing controllers from the two countries to share flight data was subMquentiy inaugurated in anovember ceremony, tommerctal airliners overflying North Korea will be assured safety and cooperation for rescue, search and accident investigation as well as disputeccording to the agreement.

South Korean and mternarjonal carriers are scheduled to begin transiting the Pyongyang FIR in

By using the Pyongyang FIR, flights connecting North America. Hawaii and Japan with Seoul and points beyond will accrue substantial savings in flight time and fuel consumption.

North Korea is expected to earn approximatelyillion annually in air control fees.

if the North-South Denuclearization Declaration (NSDD)

No new developments io report. Q




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