Australian Safeguards and Non-Proliferation Office: Annual Report 2012-13

Director General's report

The Year In Review

The International Non-Proliferation Environment

The international non-proliferation framework continues to be widely supported by most countries. There is close cooperation on a range of non-proliferation issues. One example was the Third Review Conference of the Chemical Weapons Convention (CWC) in April 2013 which was attended by delegations from 122 of the then 188 States Parties to the CWC. Non-proliferation obligations and norms have created a system where compliance is the overwhelming standard practice, and states take their non-proliferation credibility seriously. This is evidenced by the steady progress towards universality of important agreements, such as an Additional Protocol with the IAEA, the Comprehensive Nuclear Test Ban Treaty (CTBT) and the CWC.

A positive development in the international non-proliferation arena was the announcement by the Myanmar Government in November 2012 that it intends to sign an Additional Protocol and a Modified Small Quantities Protocol with the International Atomic Energy Agency (IAEA). Once ratified, the Additional Protocol will equip the IAEA to provide assurance of the absence of undeclared nuclear materials and activities in Myanmar. Myanmar has also been cooperating with the IAEA in training and preparation for implementing IAEA safeguards under the Additional Protocol. This is a positive step towards transparency on nuclear issues for Myanmar and is also a key development in the country's moves towards democracy and openness.

However, despite these positive developments, the international non-proliferation framework has faced another year of challenges. Some of these challenges are long-running issues, such as the progress of Iran's nuclear program in defiance of United Nations (UN) Security Council resolutions. Other non-proliferation issues were marked by escalations such as the rocket and nuclear tests by the Democratic People's Republic of Korea (DPRK) and the alleged use of chemical weapons in Syria during that country's civil war. These escalations have exacerbated tense and deadly situations in their respective regions, making the task of finding solutions – or in the case of Syria, finding peace – more complicated.

In late 2012, tensions on the Korean Peninsula again escalated when, in December, the DPRK launched a long-range rocket despite UN Security Council resolutions calling for a halt to missile-related activity. This rocket launch was in conjunction with increased provocative rhetoric by the DPRK, threatening war against the United States and its allies. Then, on 12 February 2013, the DPRK conducted its third nuclear test. The test occurred at Punggye, which was the site of the DPRK's 2006 and 2009 tests. The approximately 5 kiloton explosion, though the DPRK's largest to date, was relatively small, it was quickly detected by monitoring stations in the Comprehensive Nuclear-Test-Ban Treaty network, including several in Australia (see article on page 17). North Korea's claim of successfully testing 'a smaller and light' device has raised questions about the nuclear material used in the test and whether the device is able to fit onto a missile warhead. However, there is little information about the nature of the test, so there has been no means to substantiate the DPRK's claim to have constructed and tested a miniaturised device or what nuclear material was used.

Iran has continued in its non-compliance with UN Security Council resolutions and its safeguards agreement with the IAEA. These require Iran to cease all reprocessing, heavy-water and enrichment-related activities. However, Iran has continued to increase both its enrichment capacity and capability, continued the production of low enriched uranium (including uranium enriched to just below 20 per cent) and continued the construction of the IR-40 heavy water reactor at Arak. Furthermore, there has been no progress resolving the possible military dimensions of Iran's nuclear program. The IAEA remains unable, in part due to the lack of cooperation by Iran, to provide credible assurance of the absence of undeclared nuclear material and activities in Iran.

During the ongoing conflict in Syria, both government and anti-government groups accused the other of using chemical weapons. Following mounting evidence of chemical weapons' use by Government forces, the UN subsequently received a request from Syrian authorities for a 'specialised, impartial and independent mission' to investigate the alleged use of chemical weapons near the city of Aleppo. UN Secretary General Ban Ki-moon launched an investigation of all allegations of chemical weapons use in Syria (outlined on page 20). The UN investigation team would include representatives from the Organisation for the Prohibition of Chemical Weapons (OPCW) and the World Health Organization. At the time of writing, the Terms of Reference for the UN mission, including sites to be visited, had yet to be finalised with the Syrian Government.

Although not a CWC State Party, Syria is still bound not to use chemical weapons as State Party to the 1925 Geneva Protocol. The risk of further chemical weapons use in Syria, or their falling into the hands of terrorists, remains cause for grave concern. In 2012, the Australia Group of members dedicated to preventing the proliferation of chemical and biological weapons, chaired on a permanent basis by Australia, took the unprecedented step of instituting a Syrian-specific export control list, and in January 2013 issued a 'statement of concern' urging all countries to intensify scrutiny of exports to Syria, including to guard against that country's ongoing procurement activities.

Nuclear Security and Safeguards Developments

International Atomic Energy Agency Safeguards

At the practical implementation level, good progress was made in strengthening the IAEA safeguards system. The number of countries that have brought an Additional Protocol into force – the safeguards strengthening instrument that gives the IAEA greater access to locations and information in states – continued to increase. As at 30 June 2013 there were 120 countries with an Additional Protocol in force (up from 116 at 30 June 2012) and 22 that had been signed or approved by the IAEA Board of Governors. The new adherents to the Additional Protocol are Iraq, Togo, Vanuatu, and Vietnam. Of the 63 non-nuclear weapon states with significant nuclear activities that are a Party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), 56 (or 89 per cent) have an Additional Protocol in force. The Additional Protocol is firmly established as part of the NPT comprehensive safeguards standard. As a result of implementing Additional Protocols, the IAEA reported in its Safeguards Statement for 2012 that 60 states (up from 57 at 30 June 2012) had drawn the 'broader conclusion', i.e. that not only was there no indication of the diversion of declared nuclear material, but it had found no indication of undeclared nuclear material or activities, and therefore concluded that all nuclear material in these countries remained in peaceful activities.

An important achievement in the reporting period was the adoption at the September 2012 IAEA General Conference of a resolution on 'Strengthening the Effectiveness and Improving the Efficiency of the Safeguards System and Application of the Model Additional Protocol' (known as the Safeguards Resolution). In 2011 the conference failed for the first time to agree a Safeguards Resolution, which was a disappointing outcome. While these resolutions do not bind the IAEA, they give endorsements and directions from Member States to the IAEA on this fundamentally important component of non-proliferation architecture. In 2012, the delegates at the General Conference did manage to find enough common ground on the key principles of safeguards to agree to a resolution, but as outlined below this was not without controversy (and on page 73).

In 2012–13, the IAEA continued its development (which began in 2010) of the state-level concept for safeguards implementation, with the expectation that it will be fully implemented for states with a comprehensive safeguards agreement by 2014. The state-level concept uses evaluation methodologies within the IAEA's mandate to improve the efficiency and effectiveness of safeguards implementation and evaluation by taking greater account of all available safeguards information on a state. This contrasts with the traditional approach that used criteria-based primarily on facility and nuclear material types and quantities. This approach had become detrimental to the efficient use of IAEA resources. This was discussed in detail on pages 15–17 of the 2010–11 ASNO Annual Report. ASNO contributed to the development of the state-level concept through its participation in the Director General's Standing Advisory Group on Safeguards Implementation and through presenting on this subject at international meetings. Additionally, as chair of the Asia-Pacific Safeguards Network (APSN), ASNO facilitated broader discussions on this topic between the IAEA and the safeguards regulatory authorities in the Asia-Pacific region.

In 2012, some states began to express concerns with the development of the state-level concept, arguing that the expansion of state-level approaches to all states required approval from the Board of Governors. Debate on this featured prominently in the negotiations of the Safeguards Resolution at the IAEA General Conference in September 2012. It was challenging to find an appropriate accommodation on this issue that balanced the desire of many states for the resolution to give adequate support to the IAEA's use of the state-level concept and the concerns of other states with the broader application of the concept. It was resolved by the inclusion in the resolution of a direct request to the IAEA Secretariat 'to report to the Board of Governors on the conceptualisation and development of the State-level concept for safeguards'. It is important to note that this request was not for the Secretariat to seek approval from the Board of Governors, as taking a state-level approach is well within the IAEA's mandate and the central elements have been endorsed by Member States at various times over several years. But when the report is presented, it will be an opportunity for states with concerns to discuss this with other Member States and the Secretariat with the benefit of a full explanation.

Regional Developments

The Asia-Pacific Safeguards Network met for its 3rd plenary meeting in Bangkok on October 2012. The plenary meeting was attended by 11 countries plus the IAEA. The meeting was hosted by the Thai Office of Atoms for Peace, and sponsored by the US Department of Energy. During the reporting period, APSN's working group on 'safeguards infrastructure, implementation and awareness raising' completed and published a paper on the fundamentals and best practices of safeguards regulatory authorities. This paper will complement and support the IAEA's advocacy for raising the competency of safeguards regulatory authorities by providing the perspective on nuclear safeguards of the broad community of countries that make up APSN. The IAEA has chosen to include this paper on its website for safeguards resources for states.1

Domestic Developments

During the reporting period, the IAEA conducted five design information verification inspections, two routine inspections and one short notice inspection in Australia, and also undertook three complementary access visits in accordance with Australia's Additional Protocol. It used the results from these inspections, plus its evaluation of Australia's reports and of other safeguards-relevant information to draw its compliance conclusions for Australia. The IAEA continues to draw the highest level conclusion with regard to Australia's safeguards compliance, known as the broader conclusion, that 'the Secretariat found no indication of the diversion of declared nuclear material from peaceful nuclear activities and no indication of undeclared nuclear material or activities. On this basis, the Secretariat concluded that [for Australia] all nuclear material remained in peaceful activities.' The IAEA has drawn the broader conclusion for Australia every year since 2000. The details of the IAEA's conclusions on Australia are at Appendix D, and its overall statement of conclusions for all states is at Appendix E.

In September 2012, the Australian Government announced two major infrastructure projects at the Australian Nuclear Science and Technology Organisation (ANSTO), an export-scale plant for producing the radiopharmaceutical, molybdenum-99, and a collocated Synroc2 waste plant for immobilising waste from the manufacture of nuclear medicines. Construction is expected to commence in 2014 and be completed by 2016. The nuclear medicine plant will produce molybdenum-99 from uranium target plates irradiated in the OPAL reactor. ANSTO's current and planned expanded molybdenum-99 production has inherent non-proliferation and security benefits compared to many other producers around the world as the target plates and fuel use low-enriched uranium, not high-enriched uranium. With ANSTO's molybdenum-99 production capacity expected to increase by a factor of about four at the completion of this project, it will likely be the largest producer worldwide using low-enriched uranium fuel and targets, representing an important contribution by Australia to the objective of the nuclear security summits of minimising the civilian use of high enriched uranium around the world. ASNO has commenced discussions with ANSTO and the IAEA on nuclear safeguards and security considerations for the new facilities.

In 2012–13 Australia hosted visits by the Director General of the IAEA, Mr Yukiya Amano, and by the Deputy Director General, Head of the Department of Safeguards, Mr Herman Nackaerts. Mr Amano's visit to Australia in early October 2012 was very welcome as it was the first visit to Australia by an IAEA Director General since 2004. His visit included meetings with ministers, senior government officials, technical experts and industry representatives. He also received a tour of ANSTO's OPAL reactor and a briefing on ANSTO's plans for expanded molybdenum-99 radiopharmaceutical production. Australia is a strong supporter of the important work that the IAEA does in nuclear safeguards and security. Having both the Director General and Deputy Director General Safeguards visit Australia was a valuable opportunity to promote the important practical work Australia is doing that underpins the IAEA's mission.

The highlight of Mr Nackaerts's visit was the official ceremony to welcome the University of Western Australia's (UWA) Centre for Microscopy, Characterisation and Analysis into the IAEA's Network of Analytical Laboratories (NWAL). His visit also included discussions with senior officials in Canberra, a tour of the Olympic Dam mine and a tour of ANSTO's OPAL reactor for discussions on safeguards requirements for expanded molybdenum-99 radiopharmaceutical production. Mr Nackaerts was accompanied by the IAEA Section Head for the Safeguards Operations section that covers Australia, Mr John Patten.

As reported in the 2011–12 ASNO Annual Report (page 18), the IAEA maintains a Network of Analytical Laboratories (NWAL) that it uses for the analysis of environmental sample and destructive assay samples. Environmental sample analysis and destructive assay analysis are some of the most powerful tools the IAEA has for detecting undeclared activities, making a significant contribution to the IAEA's safeguards verification work. In recent years this capability has been enhanced through the use of advanced analytical instruments known as large-geometry secondary ion mass spectrometers (LG-SIMS) that are becoming the IAEA's analytical workhorse. Australia is making a major contribution through the decision of UWA to add its LG-SIMS and services to the IAEA's analytical arsenal. The NWAL contract between UWA and the IAEA was signed on 22 October 2012. In the first year of UWA's participation in the NWAL it has analysed 16 environmental samples for the IAEA.

In 2013 the Australian National Audit Office (ANAO) commenced an audit of the implementation by ASNO of arrangements to meet Australia's obligations under its comprehensive safeguards agreement and Additional Protocol with the IAEA. ASNO worked closely with the ANAO in late 2012 and early 2013 on compiling information and responding to questions for the audit. The ANAO's final report is expected to be tabled in Parliament in late 2013.

In November 2012 ASNO received capital funding of $1.4 million to complete projects for the migration of ASNO's nuclear and chemical databases to a new platform and to create an online web-interface for permit holders. The work will be undertaken by the DFAT's Information Management and Technology Division. These databases are critical to ASNO's administration of legislative requirements under the Nuclear Non-Proliferation (Safeguards) Act 1987 and the Chemical Weapons (Prohibitions) Act 1994 and for meeting reporting obligations under the Chemical Weapons Convention, the comprehensive safeguards agreement, the Additional Protocol and various bilateral nuclear cooperation agreements.

Bilateral Safeguards Developments

The Agreement between Australia and the United Arab Emirates (UAE) on the peaceful uses of nuclear energy was signed by the Australian Minister for Foreign Affairs Senator Carr and UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan on 31 July 2012. The Agreement was tabled in Parliament on 12 March 2013 for review by the Joint Standing Committee on Treaties (JSCOT), which held public hearings on the Agreement on 13 May and 17 June 2013. JSCOT is expected to issue its report on the proposed agreement in 2013–14.

The proposed Australia–UAE Agreement complies with Australia's nuclear safeguards policy (described on page 70) on the use of Australian nuclear material through the application of stringent conditions on safeguards, physical security and accountability, and highlights a shared commitment to the peaceful uses of nuclear energy. The UAE is following a responsible and transparent model of nuclear power development. Significantly, it has decided (backed up by legislation) to forgo enrichment and reprocessing in its territory.

Following Prime Minister Gillard's announcement in October 2012 that negotiations on a bilateral civil nuclear cooperation agreement between Australia and India would commence, the first round of negotiations was held on 19 March 2013 in New Delhi. Further negotiations will take place through 2013–14. There is no set timeframe for the conclusion of negotiations.

Exports of Australian uranium to India can only commence after Australia and India have negotiated and brought into force a bilateral nuclear cooperation agreement, which satisfies Australia's policy and safeguards requirements, and Australia and India have agreed administrative arrangements associated with the bilateral agreement. India's conclusion of an Additional Protocol with the IAEA is also a pre-condition for the export of Australian uranium. India has signed an Additional Protocol with the IAEA, and is in the process of implementing its provisions.

Nuclear Security

ANSTO completed its periodic security review for the OPAL reactor in August 2012 which included 88 recommendations addressing the review's terms of reference which included assessment against international standards. ASNO is working with the Australian Radiation Protection and Nuclear Safety Agency to consider ANSTO's recommendations and will formally respond in the coming year.

In November 2012, ASNO hosted an IAEA-led regional workshop on International Physical Protection Advisory Service (IPPAS) missions in Sydney to educate participants on the importance, activities, scope, and process of IPPAS mission activities. As part of a nine member team of experts, ASNO participated in an IPPAS mission hosted in Hungary, held over two weeks in May–June 2013.

In preparation for the 2014 Nuclear Security Summit in the Netherlands, ASNO participated in Sherpa and Sous-Sherpa Nuclear Security Summit meetings in Istanbul, The Hague and Vienna. ASNO also attended a number of track 1.5 workshops and dialogues which were variously attended by some summit Sherpas and Sous-Sherpas, to discuss ways in which the summit process could be used to further strengthen global nuclear security.

Comprehensive Nuclear-Test-Ban Treaty Developments

At 30 June 2013, 183 countries had signed the CTBT and 159 had ratified, including 36 of the 44 countries which must ratify the Treaty to trigger its entry into force (known as Annex 2 states). Ratification of the CTBT by all of the NPT nuclear-weapon states (NWS) is widely seen as necessary to stimulate most of the remaining ratifications by Annex 2 states. Three of the five have already ratified. The US Government continues to highlight its support for the CTBT, but garnering the two-thirds majority in the US Senate that is needed for ratification remains difficult. China also stresses its support for the CTBT, but is likely to ratify only when the US does.

Around 85 per cent of CTBT International Monitoring System (IMS) facilities are operational. Twenty of Australia's 21 IMS facilities are operational. All 20 have been certified as meeting CTBT requirements. Installation of the final station, at Davis Base, Australian Antarctic Territory, is in planning. Development of its capability to conduct an effective on-site inspection as required in the CTBT is a major current focus for the CTBT Organisation. Australian experts have made a leading contribution during the year to field exercises conducted to test and refine that capability.

Judgments about compliance with the CTBT will be made by parties to the Treaty, based on technical analyses carried out by National Data Centres (NDCs). All CTBT signatories are encouraged to establish the technical analysis capacity needed for them to carry out their task in verification of the CTBT. Cooperation among the NDCs of countries will also bring valuable peer-review to scientific analysis of events of possible concern. In October 2012 ASNO and New Zealand's CTBT National Authority signed a memorandum of understanding to provide a framework for cooperation between Australian and New Zealand NDCs.

Chemical Weapons Convention Developments

From 24 to 26 July 2012, Australia hosted a visit by OPCW Director-General Ahmet Üzümcü where he held discussions with a number of government officials in Sydney and Canberra, including with the Minister for Foreign Affairs, Senator Carr. The visit helped strengthen Australia's engagement with the OPCW and demonstrate its on-going commitment to the CWC.

During 2012, a number of events took place to commemorate the 15th anniversary of the entry into force of the CWC. A high-level meeting was held in The Hague on 3 September 2012 at the commencement of one week of activities to mark the anniversary. Of special relevance to Australia, this date also marked the adoption of the text of the Convention by the Conference on Disarmament in 1992 (Geneva), after 20 years of difficult negotiation in which Australia had played a key role.

The centrepiece of the OPCW's activities in regards to the 15-year anniversary occurred on 1 October 2012, with a high-level meeting of the OPCW that took place at the UN Headquarters in New York. In his address to the meeting, Mr Laurie Ferguson MP reiterated Australia's continuing and enduring commitment to the Convention.

Mr Ferguson encouraged States Parties to examine collectively how the Convention can evolve and remain relevant while ensuring that chemicals are not diverted for non-peaceful purposes.3

At 30 June 2013 there were 189 CWC States Parties, with Somalia the latest country to join. Universality is fundamental to ensuring a world free of chemical weapons, but it remains elusive despite ongoing diplomatic efforts. Seven countries remain outside the Convention; two have signed, but are yet to ratify (Israel and Myanmar), and five are yet to accede to the Convention (Angola, DPRK, Egypt, South Sudan and Syria).

The achievements under the Convention have been impressive. Three quarters (55,474 metric tonnes) of the world's declared stockpiles of chemical weapons (71,196 metric tonnes) have been destroyed under strict verification by the OPCW. The three remaining chemical weapons possessor States have committed to the destruction of their remaining stockpiles by the planned completion dates.4 At 28 February 2013, the OPCW had conducted 5,124 inspections at 223 chemical weapon-related sites and 1,865 industrial sites within the territories of 86 States Parties since April 1997.

The 3rd Review Conference of the CWC took place in The Hague from 8–19 April 2013 (on page 21). The Conference concluded with the adoption by consensus of a two-part Conference Report consisting of a political declaration and a comprehensive review of CWC implementation since the 2nd Review Conference. The Report also provides forward-looking direction to the OPCW beyond the time when all declared chemical weapons will have been destroyed.

The political declaration of the 3rd Review Conference included a commitment to adopt the necessary measures to fully implement the Convention as a matter of priority, noting that 97 States Parties have still to adopt all necessary measures.5 As such, Australia supports continued efforts to strengthen States Parties' capacity to fully implement the Convention.

ASNO continued to strengthen its engagement with the chemical industry as a means to ensure Australia meets all of its CWC reporting obligations. As foreshadowed in ASNO's inaugural newsletter (November 2012) for the chemical industry, two seminar series were held in Sydney and Melbourne in 2013 to raise awareness among industry stakeholders about how the CWC impacts on them.

In 2012–13, ASNO facilitated two routine OPCW inspections at 'Other Chemical Production Facilities' declared by Australia. These inspections helped demonstrate Australia's compliance with the CWC, and reflects positively on the cooperation of Australia's chemical industry.

Other Non-Proliferation Developments

Fissile Material Cut-off Treaty

The Conference on Disarmament remains unable to break the diplomatic impasse preventing negotiations on a Fissile Material Cut-off Treaty (FMCT). An initiative in the United Nations offers a possible step forward through work by a Group of Governmental Experts (GGE) providing a report to the UN Secretary General on aspects of an FMCT. The GGE is intended to meet for two two-week sessions in 2014 and in 2015.


1 http://www.iaea.org/safeguards/Resources_for_States/additional-documents.html

2 Synroc is an Australian innovation to lock up high-level nuclear waste.

3 For a transcript of Mr Ferguson's statement refer to http://australia-unsc.gov.au/2012/10/statement-to-the-united-nations-high-level-meeting-of-the-organisation-for-the-prohibition-of-chemical-weapons/.

4 Libya, the Russian Federation and the United States of America have committed to destroy all remaining chemical weapons stockpiles by December 2016, December 2015 and September 2023, respectively.

5 This refers to the National Implementation Measures under Article VII of the CWC. Ninety-seven States Parties have not yet notified the OPCW that they have legislative and/or administrative measures covering all key areas of the Convention.