Supplementary Senate Estimates - Foreign Affairs Defence and Trade Committee - 18 October 2012

Senator LUDLAM: Good afternoon, gentlemen. I was expecting to see Dr Floyd here. Is he on urgent business somewhere?

Ms Bird: He is overseas at a conference. I am not sure which one, but he is on official business. Dr Kalish is the acting DG of ASNO.

Senator LUDLAM: Great. Can you tell us officially, from the point of view of ASNO, what the status is of the bilateral safeguards agreement with India?

Dr Kalish: The recent meeting between the Prime Minister-

Senator LUDLAM: Yes. That triggers a long foreshadowed process.

Dr Kalish: Negotiation has not commenced on that treaty.

Senator LUDLAM: Well, it has been announced to the entire planet that there will be an agreement. So ASNO has not yet begun work on any such agreement?

Dr Kalish: I believe what was announced was that negotiations would commence on an agreement.

Senator LUDLAM: Can you just sketch for us the process by which those negotiations will be conducted?

Mr Shannon: Perhaps I can help you here. Ministers have not yet considered a mandate for the negotiations-that is to say, the riding instructions. The agreement has been reached to start the negotiations, which was last night, our time. Advice is being assembled for ministers to consider the mandate. Then, I expect, we would talk to India about a start date, I would think sometime early in 2013. Then the process would start. We are realistic about this. We think it will take some time, maybe a year or two. We do not have a feel for it yet 

Senator LUDLAM: It sounds like a big announcement has been made but actually there is nothing at all in terms of how these negotiations will progress or, from an Australian side, who the lead organisation will be, who our negotiators will be.

Mr Shannon: No. Those things have not yet been finally decided. There has been a lot of discussion, of course, among interested agencies and people within the department. One important personality who will have a view on this will be our incoming secretary, our current high commissioner in India, Peter Varghese, so I suspect we would wait until he arrives to at least conclude a departmental position.

Senator LUDLAM: It does not sound like there is going to be a great deal more movement, though. You said, I think, early 2013 this would actually get-
Mr Shannon: I think so, yes-sometime then. Sometime in the first quarter, I guess, we would have our first meeting.

Senator LUDLAM: Has the agency done any assessment at all in relation to recent demonstrations and fatalities at the Kudankulam reactor plant in Tamil Nadu. Do you have any visibility of that at all?

Mr Shannon: Yes, I have some briefing about that. There have been several demonstrations, I think-one at the Kudankulam power plant in Tamil Nadu. Is that the one you are referring to?

Senator LUDLAM: Yes, it is. There have been two fatalities there in recent months.

Mr Shannon: A protesting fisherman was shot dead by police after the police checkpoint was set on fire. On 22 September 3,000 fishermen and activists in 500 small boats protested outside the port, fuelled by concerns about safety and livelihood if a Fukushima disaster were to occur. My briefing also says that in August 2012 the Minister of State for Personnel, Public Grievances and Pensions made a statement along the lines that the power plant meets IAEA sector requirements; the reactors are generation III+ reactors and have advanced safety features; and the safety of the reactors has been reviewed by the Russian regulatory authorities and the AERB. Further, a post-Fukushima safety review of the plant has been carried out by the task force of the Nuclear Power Corporation of India and the expert committee of the AERB, which have found that the plant is safe from extreme natural events. The facts have been explained to the representatives of the protesting people by the expert group consulted by the central government. 

Senator LUDLAM: Did you say that the IAEA has declared these plants compliant?

Mr Shannon: No, I did not refer to the IAEA. This is an Indian assertion that the plant meets IAEA safety requirements.

Senator LUDLAM: They are saying that. Are you aware of the recent report by their Auditor-General that absolutely slams the industry?

Mr Shannon: Yes.

Senator LUDLAM: ASNO is in charge of making sure that material is not diverted illegally to weapons programs and so on. You do not have a formal safety role. I appreciate that you have at least brought that information to the table. Will the safety of those plants in the Indian regulatory system, leaving the safeguards issue aside for a moment, play any part in the decision making around safeguards for a sales agreement?

Mr Shannon: Yes.

Senator LUDLAM: It will?

Mr Shannon: Yes. We would certainly take this into account. We would expect India to follow international best practice with regard to safety and we would expect our negotiators to address nuclear safety, along with other matters.

Senator LUDLAM: Does that mean if you are not convinced-as the Indian Auditor-General certainly isn't-that those plants are being run to anything like world's best practice, a sales agreement would not occur? Obviously you are able to give it regard, and I am pleased to hear that because I was not certain if that was true. What happens if you are not happy with safety standards?

Ms Bird: These are all issues which will be worked through during the negotiating practice process. All of these issues will be worked through.

Senator LUDLAM: I understand that. Thanks for your help.

Mr Shannon: There are some positives in the report. The fact that the Auditor's report is out there now is a good thing, I think.

Senator LUDLAM: Certainly.

Mr Shannon: The IAEA are sending a team this month to look at the safety aspects of the new plant builds and then it is likely that a peer review team, led by the agency, would come out, I believe in the near future, to look at the regulatory framework. So all this is being exposed now I think in a very helpful way.

Senator LUDLAM: There will be no shortage of information; that is good. But what I am trying to get clear on is, presumably, if you were not able to conclude to your satisfaction-this is coming to the security issues-that Australian obligated uranium was not going to be transferred into weapons programs, you would not conclude an agreement. That is the purpose of this assessment, right?

Mr Shannon: We cannot speculate. We have clear objectives and we have domestic policy objects, domestic policy requirements and what not, but I cannot speculate on how the movement of the negotiations might proceed or the time frame that is involved.

Senator LUDLAM: Please explain our objectives then. Are your objectives to conclude a sales agreement or are your objectives to make absolutely certain that Australian uranium is not diverted into weapons programs?

Mr Shannon: Both. One is related to the other. If we have a sales agreement, part and parcel of that will be that there is no diversion.

Senator LUDLAM: We will just come back to the safety side. What if you are not convinced, ultimately, as the Indian AG is not, that these plants are safe?

Mr Shannon: Ministers will make a decision based on what our nuclear policy objectives are, what has been the outcome of the agreement.

Ms Bird: Senator, I think we are getting ahead of ourselves here. It is hypothetical; we have not even begun the negotiations yet. We will have a negotiating mandate that the government will approve. We will start the negotiations. The safeguard agreements are complex. They are very important. We take them seriously. We will work all of this through during the course of the negotiations. But, as I said, we have a few hypotheticals on hypotheticals here.

Senator LUDLAM: Not really. Has any consideration been given to, or have you got a file open on, a response to Pakistan's flagged intention to seek to purchase Australian uranium should sales to India be advanced? That is something which is obviously not hypothetical now, given the PM's announcement overnight. Have we had any approaches from the government of Pakistan?

Mr Shannon: I am not aware of that. I think Pakistan understands it would have to secure an exemption at the Nuclear Supplies Group.

Senator LUDLAM: That was not a problem in the case of India, but you are quite correct. Please take on notice-I am not expecting you to have this at the table with you now-whether any form of negotiations or preliminary discussions have commenced with the government of Pakistan.

Mr Shannon: I am pretty confident that is not the case.

Ms Bird: The answer is no.

Mr Robilliard: The possibility of uranium sales to Pakistan is not under consideration.

Senator LUDLAM: It is not? Okay, good. Every now and again you get something black and white out of these sessions. It is much appreciated. What agency assessments have been made of India's nuclear weapons program and aspirations?

Mr Shannon: Which agency are you talking about?

Senator LUDLAM: I am asking for your evaluation of India's nuclear weapons program and aspirations.

Dr Kalish: We know that India has nuclear weapons and we know that they plan to maintain them and that they will not sign the NPT and renounce their nuclear weapons arsenal.

Senator LUDLAM: If I have senior Indian officials-in fact, the former head of one of their key regulators-saying it is important to lock in overseas sources of uranium so they can quarantine domestic supplies for nuclear weapons, for an arms race with Pakistan, can you explain to me-because I really cannot understand-how you are going to be able to prevent that kind of behaviour with any form of safeguards agreement?

Dr Kalish: We know that they have adequate indigenous resources of uranium to fulfil the needs of their weapons program and that they have already signed contracts with other overseas suppliers of uranium.

Senator LUDLAM: So we are more than happy for Australian uranium-as long as we can be sure that our material is not being diverted off into weapons-to free up domestic supplies for a nuclear arms race on the subcontinent?

Mr Shannon: No, we take strong objection to the possession of nuclear weapons by India.

Senator LUDLAM: In what forums have we expressed that objection?

Mr Shannon: Regularly at the International Atomic Energy Agency and at-

Senator LUDLAM: Did the Prime Minister raise that on her recent visit, do you think?

Mr Shannon: I do not know.

Senator LUDLAM: So we have strong objections, but-can anyone else help me out? Did the Prime Minister raise the issue of nuclear weapons abolition on the subcontinent with the Indian government?

Ms Bird: I am not privy to the Prime Minister's discussions. Our views on nuclear weapons generally are very well known.

Senator LUDLAM: The bilateral agreements we have signed up to so far have all been lodged with the IAEA. What relationship do you expect the IAEA to have as this agreement progresses between Australia and India? Will it have any formal role at all?

Dr Kalish: One of the conditions of the agreement is that IAEA safeguards are applied to Australian nuclear material.

Senator LUDLAM: In the same way we just take the Indian government's word for it on safety, or will the IAEA actually be at the table?

Dr Kalish: The IAEA has a bilateral agreement with India-it is called INFIRC/754-and that allows the IAEA to inspect Indian nuclear facilities.

Senator LUDLAM: Only those facilities the Indians have conceded they will allow inspections in. They have kept most of their weapons program beyond the remit of the IAEA.

Dr Kalish: Yes.

Senator LUDLAM: How confident are you that we will actually have any idea at all about what happens to Australian uranium under those rather awkward circumstances?

Dr Kalish: I do not believe these circumstances are awkward if our material is only used in those facilities which are safeguarded by the IAEA.

Senator LUDLAM: I could have chosen other words. Thanks for your help.