JSCOT hearing on selling uranium to the UAE

Senator LUDLAM: Mr Noonan, in your opening statement you made some fairly strong remarks about the repatriation of Australian obligated nuclear material into Australia which you argued would not necessarily be lawful and certainly would not be particularly wise. You have also drawn some distinctions between the treaty action that is before us this morning and those signed with the Russian and Chinese governments previously. I put a couple of questions on notice to the department a few weeks ago when the committee last considered this issue. Have you had the opportunity to look at the responses that they have made and does that ease your concerns at all about potential for spent fuel, for example, to return to Australia in the event that the agreement breaks down?

Mr Noonan : I have looked at those responses from ASNO; I will make some comments in regard to that. DFAT appear to assume that putting the word 'return' in a bilateral nuclear preparation treaty sanctions their right to bring international nuclear waste to Australia, but this is the first time that they have ever really faced scrutiny over that issue. There is some half a sentence in the Russian deal that was ratified by Australia. The word 'return' does appear in the China deal. But none of the national interest analyses, in any of those three treaties, this one included for the United Arab Emirates, have addressed to the JSCOT committee or to the Australian people any commensurate information or analysis on what is involved for Australia in proposing to take Australian obligated nuclear material-high-level spent nuclear fuel waste-from overseas to Australia. There are very significant impacts on democratic values in Australia. Will this proposed third nuclear installation required for Australia be by imposition? Presumably DFAT does not propose to take this high-level international nuclear waste to the Lucas Heights reactor in Sydney. Do they propose to do that or not? They have not said where they propose to take this material. They are legislatively prohibited from taking this material to the proposed national repository and store that is currently targeted for a site called Muckaty in the Northern Territory. So it does require a third nuclear installation to act as a high-level international waste dump. What postcode around Australia do DFAT have in mind to target with that proposal? What commensurate public consultation have they done? None, whatsoever. I think you should be thinking about your constituencies and who you represent in being presented with a proposal by DFAT of treating power and right to bring international nuclear waste to Australia. In that sense, while the word 'return' appears in all three treaties, they all have the same failure: the government and DFAT have not put any commensurate analysis or case to the Australian people to warrant taking that treaty power and right to assume to bring international nuclear waste of whatever origin, Australian obligate nuclear waste or not, to this country.

They do make some specific points when they are asked about legislative matters in Australia. One of the odd points that they make is to claim that the country to which the fuel elements could be removed could be any one of a number of supplier countries, and not necessarily Australia. To be honest, Russia is the only country in the world that has ever offered to take high-level spent nuclear waste from any other country. They made that offer to Iran and Iran did not take them up on it. No other country in the world has offered or has any arrangement to take high-level spent nuclear fuel waste from another country to their homeland. In requiring a third site in Australia as a nuclear installation, other than the ones at Lucas Heights and the proposed national repository and store targeted for the Northern Territory that are of public knowledge, we would have to face the fact that no country in the world has achieved a dedicated disposal site for high-level nuclear waste. How can DFAT present you with an analysis and claim that that is credible when they do not even address the fact that they would require such a facility in and such a capacity for Australia. The cost of such a facility is in the order of many billions of dollars. You only have to look at the evidence from countries around the world who tried to realise that outcome to deal with their high-level nuclear waste. So DFAT are coming to this committee and saying, in the national interest analysis, that there are no economic impacts of this proposed treaty action, when the powers and rights of the treaty would involve Australia in the expenditure of something in the order of billions of dollars to deal, in perpetuity, with this high-level nuclear waste that they propose to bring to the country.

I would say that in representing your constituencies, and looking at the answers from ASNO and the inadequate national interest assessment provided by DFAT, you should, as a precondition to your consideration of this treaty, ask them to go back to the starting line and come again to this committee and to the Australian people with a commensurate analysis of what is involved in having, and potentially exercising, this proposed treaty's right and power to bring international nuclear waste to this country. I think that is a democratic-values issue for this committee to address, in terms of your constituencies in Australia. It should be considered a key federal election issue and no-one should take for granted a right to enter such an treaty without going to the Australian people first.

Senator LUDLAM: Mr Noonan, the eventuality that you describe, I guess, is based on a significant breach by the UAE of the agreement that is proposed here. I just want to flesh out what sort of scenario that would look like.

Dr Wareham, you mentioned in your opening statement-and I think you referenced it as well, Professor Broinowski-the AQ Khan network, which was at the time one of the most, if not the most, extensive black market smuggling networks for nuclear materials in the world. The UAE was quite heavily implicated in that. The US put sanctions on a number of UAE firms for sending WMD related technology to Iran. A US congressional research briefing in 2008 noted two Dubai based companies that were involved in trans-shipping components as part of the AQ Khan network.

Firstly, how do we know that the UAE is not still implicated in that kind of trafficking network of nuclear materials? Is that the sort of breach that would invoke the return provisions that Mr Noonan is describing to us?

Prof. Broinowski : That is a question you should put to DFAT, Senator.

Senator LUD LAM: I intend to. But I will put it to you in the very short term. Firstly, how do we know that the UAE is not still implicated-or that corporations or elements of the UAE are not still implicated-in that sort of trafficking? I guess a subsidiary question is, is that the sort of breach that would invoke the return provisions that Mr Noonan is concerned about?

Prof. Broinowski : The answer is that we do not know. We just do not know to what extent they are involved in any kind of subterranean nuclear exchange or activity.

Dr Wareham : I have the same response: ask DFAT that. How could we know?

Senator LUDLAM: DFAT are extremely confident or they would not be proposing that we sign up to this agreement. So there must be some basis for that confidence, and certainly I will test them on that in a moment.

Dr Green : All of this is very hypothetical but there is this historical scenario in the Middle East of nation states attacking each other's nuclear plants. That is one scenario. Typically, we are talking about situations where there is concern of misuse of Australian obligated nuclear material for weapons proliferation but there might also be safety considerations in the event of warfare and nation states targeting each other's nuclear plants. Also, it might not be Australia insisting on the return of nuclear materials; it might be the United Arab Emirates wanting to get rid of it for fear of nuclear materials being subject to conventional military strikes. So there are all sorts of scenarios but they play both ways. It is not just Australia wanting to get the material back; it might also be the United Arab Emirates wanting to get rid of it.

Senator LUDLAM: So under what circumstances-this is not something I have given a great deal of thought to-could we find ourselves being told we need to have this material back? As Mr Noonan has described for us, there is nowhere for it go. There is nowhere for it to go anywhere; there is certainly nowhere for it to go here. Dr Green, under what circumstances might we find ourselves being required to take it back? Is that provided for in the treaty?

Dr Green : No. I do not think there are any circumstances that would require Australia to take it back. It would necessarily be by agreement. With the situation as it is, it is difficult to imagine Australia agreeing to that, because I understand there are legal prohibitions, not to mention some fairly monumental political obstacles, to the establishment of a high-level nuclear waste store or disposal site in Australia. You can envisage scenarios where there is a standoff wherein Australia wants it back but has no capacity to take it, or the United Arab Emirates wants to get rid of it but Australia is in no position to take it. It is a real conundrum and I can glad that Mr Noonan has raised this issue because it has been festering for some time and it is high time that it is addressed publicly and addressed by the parliament and also by the JSCOT.

Mr Noonan : Perhaps I could briefly comment on that. The treaty very clearly sets out a right for Australia to require the UAE to return-using that word-Australian obligated nuclear material out of the UAE until Australia indicates that the UAE might breach IAEA safeguards in the opinion of the IAEA Board of Governors. Essentially, any matter covered by IEA safeguards that the UAE would be expected to follow and not breach in the future is a potential event that could trigger Australia's exercising a right to bring overseas nuclear waste to this country. Such a breach could potentially happen at any time that the treaty is in force. Essentially, if Australia ratifies this treaty, we are opening ourselves up to some future Australian government exercising a right, based on what would be passed by this committee or by the parliament and this government in this fortnight period, whereby Australia's society in the future would have to accept the entry of overseas high-level nuclear waste and all the consequent environmental risk, economic, and democratic issues that could become adversely impacted by that event.

Prof. Broinowski : It does not have to be waste. It could be irradiated; it could be enriched fuel. It could be in any form when the breach takes place. I understand the treaty does not distinguish between waste and other fissile materials, so we might be faced with that. But what a ridiculous scenario to suggest, as David has, that it costs if not millions hundreds of millions of dollars to prepare a third nuclear waste repository somewhere in Australia and we get minimal returns from the sale of our uranium to the United Arab Emirates in the first place. They are only contemplating at this stage a fleet of four 1,300 megawatt reactors. That is not going to take a huge amount of uranium. We sell a hell of a lot more to Japan than that, and to the Republic of Korea as well. It seems to me almost a fantasy, this clause in the treaty.

Senator LUDLAM: Perhaps we could come to some proposals then, which we can later test on the department when they come to the table. How should we go about assessing whether the UAE has fixed the border security and legal problems that allowed, for example, the illicit trafficking that existed? How should we tighten up the regime? I recognise that you do not support this trade at all, but what kind of safeguards could we put in place to improve security or due diligence?

Mr Sweeney : There is a range of improvements that can be made to the safeguards. At the moment it is a system based on periodic inspections, and that is simply not good enough. There ought to be a 24/7 physical presence-or, plan B would be a 24/7 physical presence or 24/7 video monitoring directly hooked up to the IAEA in Vienna. The current situation of periodic inspections of particular plants in the uranium customer countries falls a very long way short of those realistic and reasonable safeguard regimes. That would be my point-that periodic inspections, whether in the UAE or elsewhere, is just totally inadequate. That also raises a set of issues with respect to funding and the inadequacy of funding of safeguards, but I will leave that point there for the moment.

Dr Wareham : I was going to make the same point about funding. I guess one thing that Australia could do is to ensure ourselves greater funding for the IAEA, and there is the notion of the uranium industry perhaps also contributing for these compliance aspects. A levy towards to IAEA could be pursued.

Senator LUDLAM: Does the industry make any contribution at present?

Dr Wareham : I do not believe so, but I do not know for sure.

Prof. Broinowski : Of course, the other resource we would have to turn to if there is to be a thorough analysis of this is the International Atomic Energy Agency. What information do they have on the UAE? What sort of assessments have they made? And of course there is also our access five-power intelligence and security arrangements. What do our allies think about the UAE or about the UAE in the context of Saudi Arabia, Pakistan and the Middle East? There must be some highly concentrated intelligence on this, I imagine. Have these been looked at? And, if so, how is it possible for the Department of Foreign Affairs and Trade and ASNO to assure the public that everything is right. I just do not see that it is a very realistic scenario at all, quite frankly.

CHAIR: No. I am a bit mindful of time; do you have more?

Senator LUDLAM: I could about this stuff all day, but I will leave it there.

CHAIR: I thank each of the panel for participating this morning. We really appreciate the time that you have given us. I am not sure if we have asked you to go away and answer any questions and come back to us, so I think I can leave that part off. Thank you for giving your evidence this morning.