FOR PRESS 24 MAY 1977

GOVERNMENT POLICY ON NUCLEAR SAFEGUARDS

The future course of world nuclear developnent and the regime

of international controls which should apply to such development

are currently subjects of great international interest. In the

past few weeks for example, there has been an important statement

by President Carter on nuclear energy in which he emphasised

the need to restrain the spread of nuclear weapons or explosive

capabilities without foregoing the tangible benefits of nuclear

power. Again, at their recent Summit meeting, the Heads of

Government of the United States, the United Kingdom, Canada,

West Germany, France, Japan and Italy committed themselves

to increasing nuclear energy to help meet the world’s energy

requirements while reducing the risks of nuclear proliferation.

They launched an urgent study to determine how best to fulfil these

objectives. At the conclusion of the recent Salzburg Conference,

the most important international conference held in recent years

on all aspects of nuclear power, the Director General of the

International Atomic Energy Agency referred to the agreement

of the meeting that nuclear power was a necessary and irreplaceable

source of the future energy supply to mankind for both the short

and the longer term.

It is clear that there is widespread international concern to

establish a framework of control within which the benefits

which many countries see in the peaceful use of

nuclear energy can be safely realised. These are issues of

major international importance i n their own right, but they

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have an added significance for Australia because of our

potential as a supplier of uranium. They are issues on

which I have already written to President Carter and Prime

Minister Trudeau and on which the Deputy Prime Minister

and Australian officials have held detailed consultations

with the United States, Canada and other countries. They

are issues which have been under the closest and most

careful consideration from the moment the Government took .

office. In the present period of international reappraisal

of these issues the Government is determined that Australia

shouldÂ· play an active role with other countries in the

search for, and achievement of, joint solutions.

A proliferation of nuclear facilities without adequate

protection against diversion of material to nuclear weapons

production or nuclear explosives would pose serious threats

to international stability and peace, obviously inimical to

Australia's interests and to global and regional security.

It was for this reason that in his address to the United

Nations General Assembly last September, the Foreign Minister

described the strengthening of measures to prevent

proliferation of nuclear weapons as a central and fundamental

area in which Australia looks and hopes for early progress.

This will remain the case whether or not Australia is

ultimately to become a major exporter of uranium. The

safeguards policy which we will follow is, in our view,

appropriate for any country to follow whether it be a uranium

supplier or consumer. I make clear from the outset that the

term safeguards is used here to denote the whole range of

measures used to provide assurance that nuclear material supplied

for peaceful purposes is not mis-used for non-peaceful or

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explosive purposes.

The Government fully accepts that if it were in

future to permit new uranium export from Australia, this

would carry with it added responsibilities. Against the

background of these international responsibilities the

Government accepts that uranium is a special commodity,

the export of which would involve important considerations

of a kind not involved in the export of other commodities.

This implies a requirement for selectivity in the choice

of customer countries and the closest attention to ensuring

adequate safeguards. It is not the Government's view that

safeguards should be regarded as something to be balanced

against commercial considerations. We view adequate

safeguards as a fundamental pre-requisite of any uranium

export which we would also expect responsible customer

countries for Australian uranium readily to accept.

It will be recalled that, following the release of

the First Report of the Ranger Uranium Environmental Inquiry,

the Government announced in the House on 11 November 1976

that it supported the Inquiry1  s view on the need for the

fullest and most effective safeguards on uranium exports.

The Government also stated that it was carrying forward

more detailed consideration of safeguards in order to

further develop a national policy on this subject.

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The announcement of a policy at this stage, of

course, in no way preempts a decision on the question whether

any such new contracts for the export of uranium will be

permitted. As the Government has repeatedly emphasised, this

remains a matter for consideration following receipt of the

final report of the Ranger Uranium Environmental Inquiry.

However, as the Foreign Minister said in the Government's

foreign policy statement in the Parliament on 15 March 1977 the

Government would be remiss if it did not address itself to

safeguards questions in the meantime.  That the Government has

taken certain decisions on safeguards policy at this stage .

reflects its determination to ensure that an established frameÂ­

work of policy exists so that any new uranium exports take place

under the most carefully considered and responsible conditions

possible. The Government wishes to avoid a situation in which

decisions may be required on new uranium marketing at some point

in the future without the benefit of a clear policy on the ground

rules to apply so far as safeguards are concerned.

The Government has long recognised the desirability

of defining a comprehensive policy on safeguards. It would

not be desirable for safeguards requirements to be left to ad

hoc decision as this would not afford the strong and clear

support for international efforts to strengthen controls against

nuclear weapons proliferation to which the Government attaches

major importance. Australia is a potentially significant

supplier of uranium, but if we are to play the part which this

potential gives us the opportunity to play of contributing

effectively to international efforts to strengthen the nonÂ­

proliferation regime,  it is desirable that uranium importing

countries and other nuclear supplier countries alike know 1

where Australia stands on the matter of safeguards. Ã¢ÂÂ

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In the narrow sense., safeguards are systems of

containment., surveillance, accounting and inspection of. .

nuclear materials and facilities .designed to verify that

diversion does not take place from peaceful to non-peaceful

or explosive purposes. The major systems of intemational

safeguards are administered by the International Atomic

Energy Agency. In a broader sense, safeguards for future

Australian uranium exports would comprise, as well as the

application of international, safeguards in this strict sense,

the securing from importing countries of adequate assurances

regarding the. use and control, of supplied nuclear material

and the conclusion, of binding arrangements to give effect to

such assurances. In both senses - as mechanisms for verification

and as controls and conditions for nuclear exports - safeguards

arrangements are an evolving structure, continually being '

strengthened, refined and improved.

Against this background, I would like to ar.noun.ee theÂ·

following specific components of the comprehensive safeguards

policy which the Government has adopted. These cover;

Ã¢ÂÂ the need to keep policy under review;

. careful selection of eligible customers for uranium;

. the application of effective International Atomic

Energy Agency safeguards;

. bilateral agreements with customer countries;

. .  fallback safeguards; .

. prior Australian Government consent in relation to

re-export, enrichment and reprocessing;

. physical, security; '

. safeguards provisions in. contracts; and

Ã¢ÂÂ international and multilateral efforts to strengthen

safeguards. .

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First,  it will be a basic feature of our approach to

recognise that the process of strengthening and improving

international safeguards arrangements is an ongoing one. Ou^

policy and safeguards arrangements must be kept closely under

review to take account of the future evolution of international

thinking on safeguards.  In this regard the Government is

pleased that, as recently announced, Mr. Justice Fox has agreed

to become an adviser to me on policy matters relating to nuclear

non-proliferation and safeguards.

Second,  should the Government approve further developÂ­

ment of the Australian uranium industry it will retain the

right to be selective in the countries to whom uranium export

will be permitted. The following minimum criteria for eligibility

to receive Australian uranium will apply. The Government

emphasises that these represent minimum conditions for countries

to be eligible to receive Australian uranium.  The Government

makes clear that wider foreign policy considerations may also

be taken into account, and that it reserves the right to

refrain from permitting export should this be appropriate in the

light of such considerations.  It does not, therefore, follow

that the Government would necessarily permit export to a

country meeting these minimum safeguards criteria.

In the case of non-nuclear weapon states - that is

to say all countries other than the five existing nuclear

weapons powers recognised by the Non-Proliferation Treaty - sales

will be made only to countries which are parties to the NonÂ­

Proliferation Treaty.

Because of these countries’  safeguards obligations

under the Non-Proliferation Treaty this policy will ensure that

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the entire civil nuclear industry in such customer countries

is subject to effective safeguards to verify that nuclear

material,  whether of Australian or any other origin, is not

diverted from peaceful uses. The Government is aware that

work has recently been underway within the- International

Atomic Energy Agency on a new system of equally stringent

safeguards to cover the entire nuclear industry in nonÂ­

nuclear weapon states which are not parties to the Non- '

Proliferation Treaty. It will be following progress on this

matter and the implications which it may have for our policy.

Regarding existing nuclear weapon states, they

are not obliged under the Non-Proliferation Treaty to

renounce nuclear weapons or accept international safeguards.

They retain the right to use nuclear material for weapons

as well as peaceful purposes. Even so, Australia would

want to have assurance that nuclear material we may supply

for peaceful purposes is not diverted to military or

explosive purposes.  We will therefore export only to nuclear

weapon states which give Australia this assurance and accept

that the uranium we supply be covered by International Atomic

Energy Agency safeguards. In this respect the Government's

policy introduces a requirement additional to those

recommended by the Ranger Uranium Environmental Inquiry in

its First Report.

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Third,, the Government wishes to ensure that if a

decision is taken to permit new uranium export. , the uranium,

will be covered by International Atomic Energy Agency safeÂ­

guards from the time, it leaves Australian ownership. As

matters stand, while safeguards applied under the NonÂ­

Proliferation Treaty require notification of transfers of

yellowcake, the. full intensity of such safeguards only commences

to apply later in the fuel cycle. Accordingly, it will be

the Government’s policy that any future sales arrangements '

for exports of Australian uranium should be such that the

uranium will be in a term which attracts full International

Atomic Energy Agency safeguards by the time it leaves

Australian ownership, .

Fourth, Australia wil.1 require the prior conclusion

of bilateral agreements between the Australian Government and

countries wishing to import Australian uranium under any future

contracts. These bilateral agreements will provide a framework

for direct and binding assurances by importing countries to

the Australian. Government in relation to the use and control,

Ã¢ÂÂ   of uranium supplied by Australia or nuclear material derived

from its use. The fundamental, undertakings the Government will

wish to obtain from uranium importing countries in such bilateral

agreements are that nuclear material supplied by Australia for

peaceful purposes or nuclear material derived from its use will

not be diverted to military or explosive purposes and that

International Atomic Energy Agency safeguards will apply to

verify compliance, with this undertaking, Australia would

seek to arrange with uranium importing countries regular

expert-level consultations to satisfy ourselves of the

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implementation of the provisions of bilaterial agreements. In

line with the positions taken by the United States and Canada

Australia would retain the right to cease supply of uranium to

any country which breached safeguards undertakings.

Fifth, the Government takes the view that nuclear

material supplied by Australia or nuclear material derived from

its use should remain under safeguards for the full life of

the material in question or until it is legitmately removed

from safeguards.

In line with this basic principle the Government has

decided that bilateral agreements with non-nuclear weapon states

should make provision for so-called fallback safeguards. I have

already made clear that Australia would not be prepared to export

uranium to such countries in the absence of International Atomic

Energy Agency safeguards applied under the Non-Proliferation

Treaty. However, the question arises of ensuring the continued

safeguarding of material already present in an importing country

should safeguards under the Non-Proliferation Treaty at some

stage cease to apply in that country. There should be provision

under the bilateral agreements for the continued application of

international safeguards in such circumstances. Further, the

bilateral agreements should provide for Australia to make

alternative arrangements for the safeguarding of nuclear material

supplied by us in the event of international safeguards as.such

ceasing to operate.

Moreover, the Government feels it is reasonable to ask

importing countries who will already accept International Atomic

Energy Agency safeguards of comprehensive scope under the NonÂ­

Proliferation Treaty, to accept that, at the first fallback level

also, international safeguards should apply to all nuclear material,

not just that portion supplied by Australia.

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Sixth9 theÂ·Government considers that it would be

an unsatisfactory situation for uranium supplied by Australia

to one country;, or nuclear material derived from its use, to

be able to be re-exported to a third country without the

opportunity for Australia to satisfy itself that adequate

controls would apply to the transferred material and that

the ultimate destination is acceptable to us. For this

reason the Government has decided that bilateral agreements

with uranium importing countries should make any transfer of

supplied material to a third party contingent on the prior

consent of the Australian Government. This provision w i l l '

give Australia the mean..? of ensuring that our safeguards

requirements are met despite any onward transfers of the

uranium we supply or nuclear material derived from it.

Seventh, we would require that Australian uranium

supplied to other countries for peaceful uses not be enriched

beyond 20% uranium-235 without prior Australian consent. This

provision is in line with the practice adopted by other nuclear

supplier countries. The figure of 20% has been chosen as

representing a level of enrichment be low the practical

requirements for a nuclear explosive, while being above the

enrichment level required for most peaceful uses, excepting,

for example, some research and radioisotope production

reactors, for which approval to enrich to the necessary

level would need to be obtained. In respect of this requireÂ­

ment also, the Government6 s policy extends beyond the

recommendations made by the Ranger Uranium Environmental

Inquiry in its First Report,

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Eighth, the Government is aware of the interest, of

some countries in the reprocessing of spent nuclear fuel to

meet their anticipated future fuel requirements, and to

facilitate the management of nuclear material following its

use in nuclear reactors. At the present time the need for

reprocessing and the details of an effective control regime

for this area of the. nuclear fuel, cycle are the subject of

close study internationally. This is an area in which there

are a number of new ideas and initiatives. The United States

has proposed an International Nuclear Fuel. Cycle Evaluation

Program to consider various nuclear fuel cycles in terms of

their implications for proliferation control. There are also

such ideas as various schemes' for multinational control of

reprocessing facilities and for the management of spent fuel

and plutonium. The Government welcomes these studies and

consultationsÂ·'  and will seek to contribute actively and

constructively to relevant aspects of them such as fuel

supply assurances and waste managementÃ¢ÂÂ

The 'Government*s view is that, prior to a clearer

outcome emerging"Â·from this current international activity,

it would be premature for Australia.to adopt a unilateral

position on the detailed conditions under which we might be

prepared to agree to reprocessing, if any, of nuclear material

supplied by Australia. In order to effectively reserve

Australia's position on this matter for the time being we would

wish to make provision in bilateral agreements with countries

importing Australian uranium that any reprocessing of nuclear

material supplied by Australia may only take place with the

prior consent of the Australian Government. This requirement

is additional to those recommended by the. Ranger Uranium

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Environmental Inquiry in its First Report and reflects



relation to reprocessing.

Ninths the Government would require in future bilateral

agreements the assurance, from ura7. 2i.um importing countries that

adequate physical security will be maintained on their nuclear

industries. In -  addition., we believe the agreements should

specify compliance with standards of physical security' based;

at a minimum,  on International Atomic Energy Agency recommendÂ­

ations as presently defined andÃ¢ÂÂ as updated from time to time.

They should also make provision for expert level consultations

as necessary on physical security arrangements. These requireÂ­

ments also translate "into concrete policy measures concerns

expressed by the Ranger Uranium Environmental Inquiry.

ment's safeguards policy reflects our concern that total nuclear

control should encompass not just safeguards to verify that

nuclear material is net illicitly diverted from peaceful uses

by national Governments or national authorities, but also to

protect nuclear material from illegal use by groups or

individuals. .

for safeguards is essentially a matter for Governments and'

for inter-Governmental agreements, either bilateral, or multilateral..

Nevertheless, it is important to ensure that the actual parties

to commercial contracts, which may be private organisations,

are also aware of the safeguards obligations to which their

transaction is subject. For this reason, although the Ranger

Uranium Environmental. Inquiry in its First Report did not make

The incorporation of these provisions in the GovernÂ»

Tenth., the establishment of effective arrangements

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a recommendation on this matter, the Government has decided

that it is desirable that, as a standard practice, a clause

should be included in any future contracts for the export of

uranium from Australia noting that the transaction is subject

to safeguards as agreed betweenthe importing country and the

Australian Government.

Finally,  as an important complement to the measures  I have outlined so far, the Government recognises the importance

of Australia contributing to constructive multilateral efforts

to strengthen safeguards. There is a need for what President

Carter has described as systematic and thorough consultations

in this area. We too consider that it is highly desirable

that there should be the widest possible consensus amongst both

nuclear supplier countries and nuclear importing countries on

the controls to apply to the world nuclear industry. T h e '

wider the consensus, the more effective these controls will be

as a barrier to nuclear proliferation. The more uniform the

views of the countries concerned, the easier it will be to

implement a properly effective regime of controls.  It will be

an integral part of Australia's approach to safeguards to seek

to promote such a consensus.

In particular, we will seek to co-ordinate policy on

safeguards with other like-minded countries.  A s I noted at

the outset, I have already initiated an exchange of

correspondence with the President of the United States and

the Prime Minister of Canada expressing this wish, and extremely

valuable consultations have already taken place. The policy

I am now announcing incorporates the Government's consideration

of these consultations and represents a very similar approach to

safeguards to that adopted by the United States and Canada. More

generally, nuclear supplier countries have a special role

and responsibility in the ongoing development of safeguards

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and Australia will be prepared to participate with them in

any constructiveÂ·efforts to develop a co-ordinated approach.

Ã¢ÂÂ¢  We will also continue to attach major importance to

the effective application of safeguards by the International

Atomic Energy Agency0 We will investigate if there are

specific areas in which Australia could usefully assist the

Agency's capacity to apply increasingly effective safeguards.

At the present time the Government sees a multilateral

approach towards safeguards questions as being especially

desirable in one specific area as well as the International Nuclear

Fuel Cycle Evaluation Program already mentioned; we would

wish to lend support to the development of an international

convention on the physical protection of nuclear material in

international transit. Also, we would wish to explore with

other countries a common approach to sanctions in the event

of a breach of supply conditions. '

The essential-ingredients of the policy I have outlined

are careful selection of customer countries, the application of Â· .

international, safeguards to verify that material supplied for

peaceful purposes is not misused, the. establishment of additional

safeguards through bilateral agreements, and an active involveÂ­

ment by Australia in international efforts to upgrade safeÂ­

guards. The policy is the result of full, careful and detailed

consideration of safeguards by the GovernmentÃ¢ÂÂ It builds on

the preliminary thinking of the Government described in

testimony to the Ranger Uranium Environmental Inquiry last

year, as well as the recommendations of the First Report of

the Inquiry itself. The policy has been the subject of

detailed exchanges of views with other countries - both uranium

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importers and major nuclear exporters - and relevant interÂ­

national organisations including.the International Atomic

Energy Agency, Â·  .  .  .  ;  .

As a result the Government is satisfied that the

policy it has decided upon represents a practical, reasonable

and effective package of safeguards measures to seek from

countries wishing to import uranium from Australia under any

future contracts. It is fully in step with current interÂ­

national efforts to strengthen safeguards. The policy goes

beyond a mere acceptance by Australia of our international

obligations as a party to the Non-Proliferation Treaty and

constitutes a policy as stringent as that adopted to date by

any nuclear supplier country.

