Foreign Affairs Defence and Trade Thursday 2 June 2011
CHAIR: Thank you, Senator Trood. I think we should now go on to Senator Ludlam. You are on non-proliferation, Senator Ludlam?
Senator LUDLAM: I think I will probably direct most of my questions to Mr Floyd. Before I get into detail perhaps you might provide us with what your current work plan is and what is occupying most of your time.
Dr Floyd: The focus of activities in ASNO covers a number of areas. A major area is the establishment and the administration of our bilateral agreements for nuclear cooperation with other nations, the negotiation of arrangements, renewal of arrangements and then the implementation. A large part of the effort of ASNO is the accountancy and control around Australian uranium and Australian obligated nuclear material broadly, as it is then exported to other countries and then it is tracked through those countries and to any other place that it would go only by permission of Australia, of course. Another portion of our time and effort is working in the disarmament space in the work with the Comprehensive Test Ban Treaty Office and working towards the establishment of that treaty and the implementation of the international monitoring system globally to do with the Comprehensive Test Ban Treaty Office arrangements. We are assisting in the work towards getting the fissile material cut-off topic discussed such that there might be a treaty there. Again, it is one of those disarmament type elements. The office is not responsible only for nuclear matters; we also have responsibility around chemical weapons and the commitments of Australia in the chemical weapons convention and ensuring that no industries or activities in Australia would contribute towards chemical weapons globally. So we work across both the chemical and the nuclear space. We do a lot of outreach work into the Asian region in working to see best practice established in the areas of safeguards practices, et cetera, and we are heavily engaged technically and in various policy ways with the international architecture around non-proliferation and disarmament.
Senator LUDLAM: Can you confirm for us that the Australian government policy still precludes uranium supply to countries that lie outside the NPT framework?
Dr Floyd: The current Australian government policy is that we do not. We must have a bilateral agreement for nuclear cooperation and one of the conditions of that is that they are a member of the non-proliferation treaty.
Senator LUDLAM: Has ASNO at any time supplied any advice to any Australian government minister or the Prime Minister on a bilateral nuclear deal with India?
Dr Floyd: No, we have not.
Senator LUDLAM: I understand that resources minister, Martin Ferguson, has told the United States embassy in Canberra that a deal to supply India with nuclear fuel could be reached in three to five years. But your office has not been approached to provide advice in that regard?
Mr Paterson: We have no comment in respect of any reports relating to another minister's communication with an embassy.
Senator LUDLAM: Why is that?
Mr Paterson: Because they are reports.
Senator LUDLAM: We raise matters that have been raised in open source reporting all the time.
Mr Paterson: Yes.
Senator LUDLAM: Just because it is in a newspaper does not preclude you from commenting.
Mr Paterson: No, I understand that, Senator, but-
Senator LUDLAM: Is it because it was Wikileaks?
Mr Paterson: From the very beginning the Australian government has had a consistent response in respect of Wikileaks, and that is we do not comment, full stop.
Senator LUDLAM: I do not think there is anywhere in any standing order or anything at all in terms of public interest immunity that is a special Wikileaks get-out clause.
Mr Paterson: No, but I am only stating that we do not comment.
Senator LUDLAM: I am not sure you are not able to comment just because Wikileaks happens to have been the source.
Mr Paterson: That has been the consistent government position.
Senator LUDLAM: I understand it is the government's position; I am just not sure that that gets you off the hook from answering legitimate questions in an estimates committee.
Mr Paterson: I am unable to answer questions relating to the substance of any Wikileaks.
Senator Conroy: We can take it on notice to see-
Senator LUDLAM: Taking it on notice is just a way of fobbing it off. If there is not going to be an answer-
Senator Conroy: if the minister has any further information he would like to give the committee.
Senator LUDLAM: I know I did mention Minister Ferguson before, but Minister Rudd was quoted in the press reports as being involved in those discussions that in fact it may be Australia's policy in the future to open bilateral negotiations with India about nuclear fuel supply. So I am not seeking to take this outside your portfolio. I will put my question again whether ASNO has been requested or supplied advice to the foreign minister on a nuclear deal with India and what would be required.
Mr Paterson: And I think the answer to that was no.
Senator LUDLAM: That is definitely a no?
Mr Paterson: Yes, Senator.
Senator LUDLAM: Does ASNO acknowledge that the 1995 Review and Extension Conference says that all states parties to the NPT agreed that full-scope safeguards should be recognised as a condition of uranium supply to anybody?
Mr Paterson: Yes.
Dr Floyd: Yes.
Senator LUDLAM: There is one that is afoot that you probably can tell us a bit about. I understand that negotiations have commenced on an agreement to amend or to supplement whatever is required in annexe D of the Australia-China Nuclear Safeguards Agreement to facilitate BHP Billiton's plan to export radioactive copper concentrates to China. Can you update the committee on those negotiations?
Dr Floyd: As you would be aware, Senator, the BHP Billiton Olympic Dam extension has put in a final environmental impact statement which is being considered by governments at the moment. Pending the outcome of that, BHP Billiton may wish to explore further this idea of copper or concentrates to China. If that was the case there would be a need for there to be some amendment to the current agreement or a supplementary agreement to be established. There was an early negotiation session-I think it was back in 2009-where there were some broad discussions and some text that was bounced around.
Senator LUDLAM: Yes.
Dr Floyd: I was in Beijing just recently and met with the officials that side to establish some link with them in my new role and mentioned that this may come back on to the agenda, but we are just waiting to see how other processes develop on that.
Senator LUDLAM: So, apart from the discussions that occurred in 2009, you have introduced yourself but nothing has actually been formally initiated yet?
Dr Floyd: That is correct. There were those discussions and some draft exchanges in 2009, and my contact with them just a couple of weeks ago was the first contact on this particular issue since then.
Senator LUDLAM: And the trigger for initiating formal negotiations will be a signal from BHP that they intend to proceed with that?
Dr Floyd: Yes. We tend not to do our work in the bilateral area on a speculative basis of trying to go ahead of industry or need. And what we would be looking for is a reasonably clear signal from BHP Billiton or the China side that there was a need to address this issue and when that signal is clear enough then we would start to do the work at the intergovernmental level to explore this further.
Senator LUDLAM: And the reason that that would have to happen eventually would be, according to what I have seen are the most recent pile of documentation that has fallen out of the EIS process, that the uranium from the underground operations at Olympic Dam-from the open cut, I should say-will be exported in the copper concentrates and then refined and separated in China. Is that your understanding of the process?
Dr Floyd: Yes. The flow charts are quite complicated as to where as to where the copper or concentrate would be treated and separated, et cetera.
Senator LUDLAM: They are.
Dr Floyd: I am glad you have seen them. But the guts of why we have to look at the treaty arrangement is that there is a proposal that they may have some of the copper or concentrate going to China and in China the uranium which is mixed with a large amount of copper may well be extracted. If it was then we would want to make sure that in those circumstances then it was treated as Australian obligated nuclear material and the tracking and accounting would take place.
Senator LUDLAM: I think the proposal is to export the jobs and the downstream processing to China, but then you end up with a copper product and a uranium product concentrated in China. Do we have any obligations at all relating to the tailings waste and the processing waste that would result from concentrating it over there?
Dr Floyd: The waste is not in a separated form and is largely the responsibility, therefore, of the country in which the waste occurs.
Senator LUDLAM: I suppose we are all waiting, as are you, on a signal from BHP. I want to pick up on the situation of concern on Burma's possible nuclear program which we have not had a chance to speak about. I hope Mr Richardson is not going to shut you down here because this was another extremely valuable insight from the Wikileaks document drop that shed a little bit more light on the collaboration-or, I should say, alleged collaboration-between North Korea and Russia on the nuclear weapons program in Burma. Is Mr Floyd going to be precluded from speaking on that?
Mr Richardson: If it is a question about a Wikileaks document then we do not comment on leaked US documents.
Senator LUDLAM: I will put the substantive question to Mr Floyd in a second and see if he is willing to take it on. Could you provide me with the public interest immunity ground on which you are denying to provide us with information, because I think that is a unique interpretation?
Mr Richardson: Since Wikileaks the government has consistently stated publicly, and it has also stated in the parliament, that it will not comment on leaked US documents. I am doing no more than stating that.
Senator LUDLAM: Yes, but you might be in violation of either standing orders or the way that these committees run.
Mr Richardson: I respect the committee; I would always seek to cooperate.
Senator Conroy: It is the government's position. If you have got a problem with the officer you can take it up with the government. It is the government position.
Senator LUDLAM: I will take it up with the government right now: whether you, Minister, or Mr Richardson can provide me with a public interest immunity ground on which anything related to Wikileaks somehow becomes immune from questioning in a senate committee. I think that is absolutely outrageous.
Senator CONROY: No, you can ask questions.
Senator LUDLAM: I am asking you now. Yes, that is what I have been doing.
Senator CONROY: You can ask questions, but the government's position is not to comment. It is the government's position.
Senator LUDLAM: Well, I do not think you can do that, to be quite honest, Minister.
Mr Richardson: Senator, if you are asking us to comment on a leaked US document, we cannot. If you are asking us to comment on matters relating to Burma and its impossible nuclear ambitions of the like, then we can answer those questions. But if it is a specific question in relation to a specific US leaked document, then I cannot. But if you go to the substance of the question, we may well be able to answer.
Senator CONROY: I think Mr Richardson is providing you an opportunity to discuss the issues that I think you are actually trying to discuss.
Senator LUDLAM: I had quite informative conversations with ASIO and with the AFP and with Defence-
Senator CONROY: I find that hard to believe, but I am shocked and horrified, and-
Senator LUDLAM: on exactly these subjects, and at no point did anybody-
Senator CONROY: Senator, Mr Richardson will have to speak-
Senator LUDLAM: attempt to evade the questions simply because I used the word 'Wikileaks'. It is extraordinary. I have two questions. Can you provide us with the public interest immunity ground on which the officer is refusing to answer what I think is a legitimate question, and have you taken-
Senator CONROY: I am happy to take that on notice, but let us be clear: ministers take the questions and we can delay-
Senator LUDLAM: I am putting it to you.
Senator Conroy: So it is a question to the government and myself. We will take that on notice.
Senator LUDLAM: I do not think the officer is able to deny a legitimate question on the basis that I used the word 'Wikileaks'.
Senator CONROY: No, but all questions are to me.
Senator LUDLAM: I am putting that to you.
Senator CONROY: And I will take that on notice.
Senator FORSHAW: Chair, on a point of order. It is important that the witness's evidence not be misrepresented. As I have understood what Mr Richardson has said, and I agree, because it has been said before in other proceedings, specifically saying that he would not answer questions or comment on leaked US documents. I do not think that you can extrapolate on that to say that once you used the word 'Wikileaks', he was not prepared to answer any questions. I mean, that is just a total misrepresentation of what the witness has said. And I do not think questions should be put and demands made of witnesses, based upon a false representation of the evidence.
Senator FERGUSON: Chair, can I just make a comment on the point of order-
CHAIR: Senator Ferguson, on the point of order.
Senator FERGUSON: The minister is quite right. To claim public immunity-that there is, you know, public immunity in the way that Senator Ludlam has described-if the minister chooses not to answer a question or answer on behalf of the secretary of the department, he is certainly entitled to. And so I can only support the point of order that Senator Forshaw makes.
CHAIR: Okay. Thank you, Senator Ferguson. Senator Forshaw has raised a point of order. It is correct, as the minister said yesterday and said today, that all questions are directed to the government. The minister may choose to respond to any, or all, or none. The second point, the secretary has outlined the position of the government. He has indicated that he is willing to take questions and give responses now on matters of substance that are identified in the cables. For instance, the issue of Burma and nuclear development. The government has a position of no response by members of the government or officials to the issue of Wikileaked cables in the US. The minister has outlined the reasoning for that, and all that has occurred is consistent with the standing orders. The point of order taken by Senator Forshaw is upheld. And if members of the committee wish to ask further questions on the content of Wikileak cables, and the minister's position and the government's position does not change, they will be taken on notice and a response issued in due course.
Senator LUDLAM: Well, the minister has undertaken to do so. I will be fascinated to see on what basis you are preventing the officer from answering questions. I will come to you-
Senator CONROY: I answer the questions unless I pass the questions and I am taking it on notice.
Senator LUDLAM: You have offered to take it on notice; I leave it there. Dr Floyd, can you provide us with an update, with as much info as you are able to tell us, about anything that we might have learned recently on Burma's alleged nuclear weapons program?
Dr Floyd: The role of the Safeguards and Non-Proliferation Office in these kinds of matters is more at the technical end, and we work very closely with the international security division that works the policy end of that spectrum. The two are not completely separated, of course. I would like to pass to Allan McKinnon in his role to respond to your question.
Mr McKinnon: As you know, Burma has signed the NPT as a non-weapons state, and has undertaken to place all of its nuclear material under IAEA safeguards. And they have what is known as a 'small quantities protocol' in place. I am sure you are aware of what that means, but essentially, having that protocol in place means that it holds in abeyance most of the normal IAEA inspections while they still only have small quantities of nuclear material, and why they do not have a reactor. And as for the update on the way the IAEA regards Burma's compliance with its obligations, in 2010, they stated-that is, the IAEA-that declared nuclear material in Burma remained in peaceful use. Now, the IAEA has stated that it is investigating allegations that Burma is pursuing a nuclear weapons program, and in December 2010 they formally requested access for its nuclear inspectors to visit Burmese nuclear sites and facilities. As yet, they have not received that access, and nor are we aware of any results of their investigations, either through inspection or by consideration of other material.
It might be worthwhile just to say what would happen if Burma was found to have a clandestine nuclear program, as a sort of general framework for how these issues of interest are addressed. Under the IAEA statute, the IAEA director general would report any safeguards' noncompliance by Burma to the board of governors. But recall what I said, that in their 2010 report they were in compliance with their small quantities protocol-that is, they do not have a nuclear reactor, and the small quantities they do have are being used for peaceful purposes. But were they found to be in noncompliance, the IAEA board of governors would call upon Burma to remedy that situation. They would then have the option of reporting noncompliance to the UN Security Council and to the General Assembly, and of course, as you are well aware, the UN Security Council is a competent body to consider appropriate actions in the case of safeguards' noncompliance with the full range of measures that they have at their discretion.
In relation to DPRK, I would just say that we have an expectation that Burma would abide by UN Security Council resolutions 1718 and 1874, which prohibit the procurement from the DPRK of arms and related material, as well as anything related to weapons of mass destruction.
Senator LUDLAM: What happens if IAEA inspectors continue to not be granted access? How do they proceed through the UN formal mechanisms if they cannot even get people in there to have a look?
Mr McKinnon: That is just a matter of conjecture, and I really could not offer any firmer observations there. But the board of governors' reports on a particular country comprise all of their assessments, from on-the-spot assessments to investigations, so conceptually at least they can include other sorts of material in their consideration.
Senator LUDLAM: All right. Could find out for us when that request was made at the end of 2010, whether there was a deadline on it and what conditions might have been attached to that please?
Mr McKinnon: All right. I will find that out.
Senator LUDLAM: Thank you. So it does not appear that we know a great deal more. Has ASNO provided advice to Western Australian government officials on the operation of the Nuclear Non-Proliferation Safeguards Act 1987, as it applies to uranium mines that are proposed to open in WA?
Dr Floyd: We have a number of discussions with the Western Australian government as well as with industries in Western Australia regarding uranium mining. Those discussions are ongoing on a number of fronts. We certainly have spoken with some companies in WA, including Toro Energy, with regard to a proposal that they have. We have had broader discussions around transport security and transport routes in WA, and we have certainly talked to the WA government about their complimentary roles and responsibilities to us with regard to uranium mining in WA.
Senator LUDLAM: Okay. Who is paying for that? Do you just see that as part of your role as part of the regulatory structure, or when a company asks you for advice, do you send people to WA? Or how does that all work?
Dr Floyd: We certainly need to be engaging with industry so that we can guide them on what their regulatory responsibilities are for compliance. And we would see that as a part of our role. You may recall that there is a uranium producers charge which is levied against industry, and the range of roles that we have in engaging with the uranium industry are factored into the rather complex calculation of what that charge would be in any given year. And these parts of our role are included in that calculation.
Senator LUDLAM: I am not sure how that is levied on an explorer though. I mean, these are not producers. They do not have a revenue stream.
Dr Floyd: That is correct. It is based on production, but we look more broadly at our role in that support of uranium mining.
Senator LUDLAM: Okay. I do not expect you to have this at the table, but if you could provide us for calendar year 2011 the dates and the subjects of meetings between ASNO and WA government departments, and anything else that you think is relevant in terms of industry liaison.
Dr Floyd: I would be happy to take that on notice.
Senator LUDLAM: Much appreciated. Thanks. Look, the final matter that I wanted to ask about was the high-level meeting of world leaders on nuclear security, which was to be convened by you and the secretary general on 22 September this year. I am interested to know whether ASNO has begun any preparations, or whether you are aware of that meeting.
Dr Floyd: This is the high-level meeting on nuclear safety?
Senator LUDLAM: Yes. I think it has come about as a result of the accident in Japan.
Dr Floyd: I just have to clarify just which meeting that is. Can you just mention that again? Is it the one in the margins of UNGA that Ban Ki-moon has called?
Senator LUDLAM: Yes, that is correct.
Dr Floyd: I think that meeting is focusing on nuclear safety, not nuclear security.
Senator LUDLAM: The issues are intertwined, but, yes, I suspect that is the case. I am just wondering whether you have any formal role, or if it is out of the proliferation domain and you do not take part?
Dr Floyd: No. It is one that Mr McKinnon and I both have a keen interest in. There is a whole series of high-level meetings on nuclear safety in particular that arise from the Fukushima incident, and reflection globally about the nuclear safety arrangements, and we certainly are working together on a strategy of engagement for Australia in those various meetings, and the last of those kind of culminates in some way with the nuclear safety meeting that Secretary-General Ban has been planning for New York in September.
Senator LUDLAM: Great. Okay. So I am going to take that as a yes. You have started preparations. Have you provided a briefing to our mission in New York on that matter?
Dr Floyd: There are various communications between officers here in Australia and those that post in New York on this issue.
Senator LUDLAM: All right, so I guess that is a yes as well.
Dr Floyd: Sorry, I should be not so expansive. It is yes.
Senator LUDLAM: Expansive is fine. It is better than the alternative. Have you provided advice to the Australian government on what position Australia might take in that meeting, understanding that the secretary-general has said:
This exercise ... will also need a serious global debate on broader issues, including assessment of the costs, risks and benefits of nuclear energy and stronger connections between nuclear safety, nuclear security and nuclear non-proliferation.
So I guess that is why it is fair and square in your domain. My understanding, again, from press reporting, not from Wikileaks, is that a number of countries are extremely concerned that this is basically going to be a cover for a phase out of nuclear energy altogether.
Dr Floyd: It is fair to say that the agenda for the meeting in September is not yet set, and it is the subject of ongoing discussions with various member nations.
Senator LUDLAM: Okay. I understand that the UN is conducting a system-wide study on the whole issue, and that some countries are a bit worried about that as well. Is Australia involved in that, in terms of nuclear safety?
Dr Floyd: There are so many initiatives in the area of nuclear safety that are running at the moment. I may need to take that on notice, or Mr McKinnon take it on notice, about a specific initiative and about our level of engagement. We certainly have engagement on many different fronts, but I could not be confident about that particular one.
Senator LUDLAM: It is a system-wide study conducted by the United Nations, presumably initiated by the SG. I wonder whether ASNO is aware or whether you would care to provide a comment on coming now to TEPCO's track record of failing to report and in some cases actively concealing safety incidents in nuclear power plants in Japan, what kind of role does your office have in monitoring or providing views to the Australian government on nuclear safety in our customer countries?
Dr Floyd: Senator, the responsibility on nuclear safety in Australia is that of the Australian Radiation Protection and Nuclear Safety Authority, ARPANSA, thank goodness it has got an acronym, and not the responsibility of my office. We do nuclear and safeguards, making sure things do not get into weapons programs. Of course, as you mentioned earlier, a number of those issues are intertwined, and so we have certainly more than a passing interest in those aspects, but a comment on safety performance in Japan would be best sought from ARPANSA.
Senator LUDLAM: That is ARPANSA.
Dr Floyd: Yes.
Senator LUDLAM: And you have got a perfectly good acronym as well.
Dr Floyd: Thank you, Senator.
Senator LUDLAM: I will leave it there, Chair, thanks very much.
CHAIR: You are completed, Senator?
Senator LUDLAM: I am.