MINISTER FOR

FOREIGN AFFAIRS No. M 26 Date 26 March 1981

P

Jt, AUSTRALIA ,A

NEWS RELEASE THE HON. TONY STREET, M.P.  EMBARGOED UNTIL DELIVERY

NUCLEAR SAFEGUARDS AGREEMENTS

Following is the text of the statement to  Parliament on 26 March 1981 by the Minister for Foreign  Affairs, the Hon. Tony Street MP, on nuclear safeguards  agreements with France, Canada and Sweden:

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STATEMENT TO PARLIAMENT BY THE MINISTER FOR FOREIGN AFFAIRS ON  NUCLEAR SAFEGUARDS AGREEMENTS WITH FRANCE, CANADA AND SWEDEN *  I  *  *  *  *  *  *  *  9

Mr Speaker,

I hereby present:

- the Agreement between the Government of Australia and the Government of Sweden on Conditions and Controls for Nuclear Transfers for Peaceful Purposes between Australia  and Sweden, signed in Canberra on 18 March 1981;

- the Agreement between the Government of Australia and the Government of Canada concerning Cooperation in the Peaceful Uses of Nuclear Energy, signed in Ottawa on 9 March 1981;

- the Agreement between the Government of Australia and the  Government of the French Republic concerning Nuclear  Transfers between Australia and France, signed in Paris on 7 January 1981.

I seek leave to make a statement.

Mr Speaker, in presenting these Agreements,  I am fulÂ­  filling a commitment by the Government to ensure that the texts of  all Australia's nuclear safeguards agreements will be presented in  the Parliament as soon as practicable after signature with a full  explanation of their provisions. I wish to assure the House that

I intend to maintain this practice with the future nuclear safeÂ­  guards agreements which we negotiate. All of our nuclear safeÂ­ guards agreements are in the public domain and this will be the  case with all future agreements.

I wish to remind the House that our non-proliferation  policy is not simply a nuclear safeguards policy. The Government  is continuing to work actively to enhance the international nonÂ­  proliferation regime through action in multilateral bodies, as  well as through bilateral nuclear safeguards negotiations. We

are continuing our active role in the Committee on Disarmament,   the main international negotiating forum on disarmament questions,  and we are maintaining our long-established participation in the  International Atomic Energy Agency (IAEA) .  We are continually  working to encourage such studies as those on plutonium storage,

spent fuel management and assurance of supply, and to upgrade  international safeguards measures,  particularly in respect of  proliferation-sensitive technologies.

The Agreements I have presented are further important  steps in the establishment of a network of bilateral nuclear  safeguards agreements between Australia and our potential uranium

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customers,  in accordance with Australia's nuclear safeguards policy  announced to Parliament by the Prime Minister on 24 May 1977. The  Government is now well on the way to completing this network.

The purpose of the Agreements is to ensure that when  Australia supplies uranium for peaceful purposes it will not be  diverted to non-peaceful or explosive uses. To this end and in  accordance with our policy, Australia's bilateral nuclear safeguards

agreements incorporate stringent safeguards and controls on the use  of the uranium we may supply to other countries for peaceful purposes.  TheseÂ·1  safeguards and controls remain in place over all Australian  origin nuclear material so long as the material remains relevant  from the point of view of safeguards as determined by the IAEA;  that is, until there is no further possibility of it being useful

for the purposes of nuclear weapons manufacture.

These Agreements, as with the other bilateral nuclear  safeguards agreements concluded by Australia since the introduction  of our comprehensive nuclear safeguards policy, incorporate all  the requirements of that policy. They provide for the prohibition  of explosive or military use, the application of International  Atomic Energy Agency (IAEA) safeguards, "fallback" safeguards in

the event that IAEA safeguards cease to apply, prior consent rights  over reprocessing, high enrichment and transfers to third countries,  as well as internationally recognised levels of physical protection.

The Agreements provide for administrative arrangements  to ensure implementation of their provisions and the tracking of  Australian supplied material throughout the fuel cycles of customer  countries. These detailed procedures enable us to verify that

there is no diversion of Australian supplied material to nonÂ­ peaceful purposes.

Mr Speaker, I would now like to comment on some particular  features of each of the Agreements I have tabled.

The Agreements concluded with France and Sweden include  settlements on reprocessing in accordance with the Government's  policy of maintaining Australia's prior consent rights over reÂ­ processing of Australian origin nuclear material, while establishing  conditions under which this consent may be exercised in our bilateral  agreements. I announced the Government's policy on these conditions

in Parliament on 27 November 1980. The Agreement with Canada keeps  open the possibility of agreeing on conditions for reprocessing if  the need should arise in the future. Neither Canada nor Australia  at present envisages reprocessing nuclear material supplied by the  other.

.  In my policy’statement on conditions for consent to reÂ­ processing, I made clear that there was no relaxation of any of  the existing requirements of pur comprehensive nuclear safeguards  policy. The elaboration of our approach to reprocessing completes

the policy as foreshadowed when the Prime Minister announced  Australia's nuclear safeguards policy in May 1977 and in August  1977 when he announced the decision to proceed with the further  development and export of uranium under stringent safeguards. As

I said on 27 November,  the Government has developed an approach to

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reprocessing which

- fully satisfies the Government's non-proliferation  concerns;

- encompasses all existing nuclear safeguards requirements;

- accommodates the need of customer countries for the  predictable application of non-proliferation conditions;  and

- addresses in detail the specific nuclear fuel cycle j programs in which Australian origin nuclear material *  might be reprocessed and the separated plutonium used.

This approach is being implemented through our nuclear safeguards  agreements.

The Agreements with France and Sweden demonstrate how  the reprocessing policy is applied in bilateral nuclear safeguards  agreements with customer countries.  These countries have a need  to reprocess spent nuclear fuel in their civil nuclear programs  for efficient energy use; and in connection with the management of  materials contained in spent nuclear fuel.  Through the Australia/

France and Australia/Sweden Agreements, Australia has exercised  its prior consent rights over the reprocessing of Australian origin  material in a way that offers the French and Swedish nuclear  industries predictability and stability under strong non-proliferÂ­ ation controls.

In accordance with the reprocessing policy and before  establishing the conditions for the exercise of consent,  the  Government carried out a detailed and thorough evaluation of the  need for reprocessing within the civil nuclear programs of France

and Sweden.  The Government secured the fullest cooperation from  the two Governments and was able to satisfy itself that reprocessing  was fully justified in their programs,  in addition to ensuring,   as with all Australian safeguards agreements, that the applicable  non-proliferation controls on their nuclear industries were in  accordance with international standards and met our stringent  requirements. It was only on these bases that the Government was  prepared to consent to the reprocessing of Australian origin nuclear  material within the French and Swedish civil nuclear programs.

The Agreement with Sweden marks the conclusion of an  agreement with a country which, like Australia,  has strong nonÂ­ proliferation credentials. Both Governments see their new Agreement  as helping to strengthen the international non-proliferation regime.  Sweden also has a firm commitment to nuclear power confirmed in a  referendum last year, and to the provision of nuclear fuel cycle

services to other countries. In January 1981 a Swedish electricity  utility OKG signed two supply contracts with Energy Resources of  Australia (ERA).  These contracts involve supply to the OKG of  3150 short tonnes of uranium over the period 1982/96. Of this

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quantity 1455 short tonnes is on an equity-related basis whereby  OKG will acquire a one per cent equity in ERA. These contracts  are presentlyÂ«valued at some $A200 million.  Nuclear material  supplied under these contracts will of course be subject to this

agreement. '

The side-letter to the Swedish Agreement concerns inter  alia the conversion, enrichment below 20% and fuel fabrication of  Australian origin nuclear material in countries with which we do  not have a nuclear safeguards agreement. The letter notes that in

circumstances where Sweden is obliged to use the facilities of  such countries for conversion,  enrichment or fuel fabrication of  Australian origin nuclear material it may do so on an "all-in,  all-out" basis. This principle is already being applied pursuant

to.the Australia/Finland Agreement. Reprocessing by Sweden of  Australian origin spent fuel will take place in countries with  which Australia has concluded bilateral nuclear safeguards  agreements.

The Agreement with France is our third covering nuclear  safeguards and cooperation with a nuclear weapons state. We have  previously concluded such agreements with the United Kingdom and  the United States.

Under the Government's nuclear safeguards policy, nuclear  weapons states which wish to import Australian uranium must provide  assurances that nuclear material supplied for peaceful purposes is  not diverted to military or explosive purposes and must accept that  the uranium we supply be covered by IAEA safeguards. The French  Government has made these commitments in the Agreement and has met  all the other requirements of our nuclear safeguards policy.  An  exchange of letters accompanying the Agreement with France deals  with the application of two provisions in the Agreement. These

relate to the availability to Australia of reports by the IAEA of  its verification activities in France and to the question of reÂ­ transfers to third countries. The Agreement and the letter protect  Australia's consent rights over retransfers and make clear that no  Australian supplied uranium can be transferred to any third country  which Australia itself would not be prepared to supply directly.

France has a large and rapidly expanding civil nuclear  program which reflects France's commitment to the production of  nuclear energy and to the provision of fuel cycle services to  other countries. I wish to stress that the Agreement with France  will cover the transfer in either direction of material exclusively

for peaceful purposes. Any Australian uranium going to France will  be used only in France's civil nuclear industry.

France is, of course, a member of the European community  and this agreement marks a positive development in Australia's  relationships with France. It binds both countries to strong nonÂ­ proliferation conditions and opens the way to new trade in energy  resources.

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It remains an important objective of Australian policy  to conclude an early agreement with the European Commission on  behalf of EURATOM, the European Atomic Energy community.  When  completed,  the Agreement, with EURATOM will form together with  our agreements with Britain and France a significant achievement

in Australia's relationships with the European community. Negotiations with the European Commission are contintiing and the  Australia/France Agreement, like our Agreement with Britain,   provides that the provisions of the EURATOM Agreement will be

complementary to and where appropriate supersede the. provisions  of the bilatera^l agreements.

Mr Speaker I am also presenting for the information of the  House the exchange of letters between Australia and France signed  in Paris on 30 October 1980, and a complementary exchange of notes  between Australia and Japan of 12 December 1980 covering the conÂ­

version and enrichment in France of certain uranium supplied to  Japan under old contracts. These exchanges cover the conversion  and enrichment of the uranium concerned in France until such time  as the France/IAEA agreement,  and a comprehensive Australia/France

and/or a comprehensive Australia/EURATOM agreement are in force. The uranium concerned will be transferred to and from France on an  "all-in,  all-out" basis, until such time as it would be covered  by IAEA safeguards. The exchange of notes with Japan sets out  procedures for the provision to the Government by Japan of details  of each shipment to France of Australian origin nuclear material  under the relevant contracts, and of its retransfer from France

to Japan or to another approved country.

The Australia/Canada Agreement replaces the Agreement  between Australia and Canada for cooperation in the Peaceful Uses  of Atomic Energy of 7 October 1959. It would have been inapproÂ­ priate for Canada and Australia to maintain the 1959 Agreement,  which did not fulfil the requirements of the current nuclear safeÂ­ guards policies of our two countries. The new Agreement provides

for cooperation in the peaceful uses of nuclear energy, although  most of its provisions concern nuclear safeguards. Â·

Canada and Australia are both uranium exporters,  and the  practical significance of this Agreement is that it provides controls  on Australian uranium while the material is in Canada for conversion  to uranium hexafluoride for ultimate use in other customer countries.  Canada is a major exporter of nuclear equipment and technology and

the Agreement provides a safeguards umbrella in the event of the  transfer of such items to Australia in the * future.

The Agreement with Canada demonstrates the closeness of  the views of the Canadian and Australian Governments on nonÂ­  proliferation. Both countries have acquired international repuÂ­ tations as strong supporters of non-proliferation. The conclusion  of the Agreement is proof that the two Governments are willing to  accept themselves the stringent controls they require of others.

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The Agreements which have been tabled bring to eight the  number of nuclear safeguards agreements concluded by the Government

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since the announcement of its nuclear safeguards policy by the  Prime Minister on 24 May 1977.

The Government is proud of its achievements') in negotiating  these agreements. We believe they provide a convincing demonstration  of the international acceptability of Australian policy. They show  that, while applying stringent non-proliferation safeguards to our  uranium exports, we are prepared to make Australian uranium available

to customer countries for legitimate peaceful energy purposes.

Finally, the Agreements show that Australia by .  facilitating  the peaceful nuclear trade under stringent conditions is thereby  enhancing international efforts aimed at preventing the spread of  nuclear weapons.

