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Monday, 23 February 1987
Page: 546

Mr BARRY JONES (Minister for Science)(8.44) —I move:

That the Bill be now read a second time.

The Bill will give legislative effect to all of Australia's international non-proliferation obligations which require domestic legislation and provide a legislative basis for the operations of the Australian Safeguards Office. This Government has consistently pursued a firm policy of nuclear non-proliferation and of commitment to nuclear safeguards. This has been demonstrated by Australia's taking a leading role at the 1985 Nuclear Non-Proliferation Treaty Review Conference, our active participation in other international meetings dealing with non-proliferation and safeguards matters and support of the International Atomic Energy Agency, or IAEA. Nuclear non-proliferation is concerned with the control of fissile nuclear material, sensitive nuclear technology, such as enrichment and spent fuel reprocessing and certain materials of use in the nuclear fuel cycle, such as heavy water and reactor grade graphite. Australia's commitment to non-proliferation has been enshrined in a number of international agreements. These are the Nuclear Non-Proliferation Treaty, or NPT, our Agreement with the IAEA and Australia's bilateral nuclear safeguards agreements.

The NPT is the major international Treaty concerned with non-proliferation and contains several interrelated undertakings. Essentially it is a three-way bargain among the over 120 countries which are parties to the Treaty, in which those countries without nuclear weapons undertake not to acquire them and to accept safeguards in order to verify this undertaking; the nuclear weapon states agree to work towards nuclear disarmament; and the developed nations agree to help the less developed ones obtain the benefits of nuclear energy. Australia became a party to the Treaty on 23 January 1973. In pursuance of its NPT obligations Australia signed an agreement with the IAEA on 10 July 1974 accepting IAEA safeguards on nuclear material in all nuclear activities carried out in Australia. Under this agreement a safeguards system has been established, whereby all nuclear material within Australia is controlled and accounted for by the Australian Safeguards Office which reports to the IAEA. The IAEA, for its part, verifies the reports by regular inspections of nuclear material held in Australia.

The system of safeguards operated by the IAEA and national safeguards bodies, such as the Australian Safeguards Office, is designed to verify the performance of international obligations, to deter any possibility of non-performance, and to provide assurance that those obligations are being met. Safeguards measures include maintenance and verification of detailed nuclear accounting and record keeping, and use of physical inspections, surveillance devices and special seals at nuclear installations.

The Government permits exports of Australian uranium only to countries with which Australia has a bilateral safeguards agreement. These agreements provide a detailed set of safeguards requirements designed to provide assurance that Australian origin nuclear material not only remains in the civil nuclear fuel cycle but that Australia can at all times account for it. This is achieved by ensuring that Australia's safeguards requirements apply to all transfers, processing and use of Australian uranium or derived material equivalent to the amount of uranium supplied by Australia. Currently Australia has in force 12 nuclear safeguards agreements. Apart from the agreement with the IAEA, there are 10 agreements with individual countries, and an agreement with the European Community's nuclear agency, Euratom.

Several aspects of Australia's obligations under the IAEA agreement and the bilaterial agreements require domestic implementation through control of the possession and transport of nuclear material, nuclear equipment or nuclear technology. Until now Australia did not have domestic legislation to enforce these obligations and has relied on the Customs Act and related regulations and on co-operation from holders of nuclear items. This approach has been successful and there has never been the slightest suggestion from our bilateral partners nor from the IAEA that Australia has not complied with its nuclear safeguards obligations. However, I am sure no-one will disagree that this area is of such fundamental importance that our national safeguards system should be placed on the firmest legal footing without further delay.

It should be noted that Australia's nuclear industry is quite limited in scope compared to other industrialised countries. We are, of course, a major producer of uranium but the processing of this uranium is limited to the production of yellowcake for the export market. The activities of the mining companies, in so far as they involve the possession and transport of uranium, will be covered by the proposed legislation.

The Australian Atomic Energy Commission operates two research reactors and carries out nuclear research into the uses of radio-isotopes and radiation. It also produces radio-isotopes commercially. These activities will be continued by the Commission's successor ANSTO. Australian policy prohibits the development of further stages of the nuclear fuel cycle in Australia and, as I have stated in the second reading speech on the ANSTO Bill, future research and development activities by ANSTO will be directed towards peaceful application of nuclear science and technology other than the development of the nuclear fuel cycle. Most of this research will not involve safeguardable equipment or technology. However, any materials, equipment or technology that come under safeguards obligations will be strictly controlled and the present Bill is directed to this purpose.

The uranium mining companies and the Australian Atomic Energy Commission will be the bodies chiefly affected by the proposed legislation. Elsewhere in Australia, use or possession of safeguardable nuclear material or technology is very limited. Radio-isotopes in common use, for example, are not safeguardable and the legislation will not apply to them. However, depleted uranium which is in use in a variety of non-nuclear areas, such as shielding in radiography cameras, as counterweights in the controls of some aircraft or as ballast in technologically advanced yachts, does fall into the ambit of the Bill. The Australian Safeguards Office is currently examining how obligations relating to depleted uranium can be met with minimum inconvenience to those using this material. I take this opportunity to invite any bodies which have, or think they may have in their possession, any safeguardable nuclear material, equipment or technology, as defined in this legislation, to get in touch with the Australian Safeguards Office to see whether they might require a permit for that item, particularly for people who light up at night.

The Bill is divided into five parts. The first part contains the formal provisions of the Bill, including those relating to the constitutional basis for the Bill and the definitions. This part of the Bill also deals with commencement of the legislation. Substantive provisions are to come into force by proclamation. It is intended that, once the Bill is passed by Parliament, most of the provisions of the Bill will be brought into force as soon as the administrative procedures required to implement the legislation are put into place. However, Division 2 of Part III of the Bill, providing for the enforcement of the Physical Protection Convention, depends for its constitutional validity on Australia's ratification of the Convention, and it is intended therefore that this portion of the legislation will be brought into force contemporaneously with the ratification of that Convention. The main constitutional basis of the legislation is the external affairs power. However, several other areas of Commonwealth constitutional powers are also relevant and these are enumerated in clause 8.

I draw the attention of honourable members to the definitions clause of the Bill, especially the definitions of nuclear material, associated material, associated equipment and associated technology because those definitions circumscribe the items to which this legislation will apply. Nuclear material is defined to have the same meaning as in the agreement between Australia and the IAEA. The agreement defines nuclear material to include all material of potential proliferation significance and provides for the application of safeguards to such material. The legislation, by adopting the same definition, provides for the domestic enforcement of Australia's obligations under that agreement.

The agreement with the IAEA primarily applies to use of nuclear material, and does not provide expressly for the control of equipment, technology and material usable in nuclear applications. As examples, I might quote equipment for the enrichment of uranium, nuclear reactor technology and heavy water, which is vital material for the operation of some types of nuclear reactors. However, these items are covered by Australia's bilateral agreements and therefore are required to be controlled by this legislation. The definitions in the Bill ensure that the necessary items are brought within the coverage of the legislation.

The key element in the scheme to control nuclear items within Australia is the requirement to have permits to possess and to transport nuclear items. These provisions are set out in part II of the Bill. The permits are to be issued by the Minister while the administrative details are to be handled by the Director of the Australian Safeguards Office. The permits would be issued subject to conditions which would cover such matters as duration of the permit, the location in which the item may be kept, the uses to which the item may be put, the persons who may have access to the item, transport, transfer and disposal conditions and so on. The intention is that every aspect of the possession, use and transport of nuclear items should be strictly controlled and that nothing could be done without appropriate authorisation. In addition to the permit requirements, special authorisation is required to communicate information, strictly defined as information primarily applicable to enrichment or reprocessing of nuclear material, production of heavy water or the making of nuclear weapons, being information that is not in the public arena.

Part II of the Bill also includes a provision allowing the Minister to exempt certain material from the provisions of this legislation. Such an exemption may be made only where safeguards in relation to the nuclear material have been terminated in accordance with the IAEA Agreement. This could arise where, for example, the nuclear material has been transferred out of the country, has been consumed or diluted or is to be used in non-nuclear activities. Any exemptions under these provisions are to be tabled in Parliament and are therefore subject to the scrutiny of Parliament.

Part III of the Bill creates offences. Division 1 sets out the offences related to the administration of the controls established by the legislation. These offences include the possession and transport of nuclear items without a permit, breach of a condition of a permit, unauthorised communication of sensitive information and action interfering with the proper exercise of the functions of inspectors and the Director of the Safeguards Office. Appropriate monetary penalties and terms of imprisonment are provided for these offences.

Division 2 creates offences required to comply with our obligations under the Physical Protection Convention and to underscore the severity of such offences. Very substantial penalties are provided for these offences. As I mentioned earlier, this portion of the Bill will be brought into force when Australia ratifies the Physical Protection Convention.

Part IV of the Bill deals with administrative matters. A statutory position of Director of Safeguards is created by the Bill and the Australian Safeguards Office is established by statute. The Director is to be appointed by the Governor-General for a period of up to five years while the Director's staff are to be departmental officers. This arrangement will give the Director the desired amount of independence without incurring the expense of a statutory authority.

The functions of the Director shall be essentially twofold. On the one hand, the Director will be responsible for ensuring the effective operation of the system of accounting for and control of nuclear material and items within Australia as required by the IAEA Agreement and our bilateral safeguards agreements. On the other hand, he or she will be responsible for keeping account of Australian origin uranium in other countries and monitoring the compliance of our treaty partners with the terms of the bilateral agreements. These functions have been carried out to date by the Australian Safeguards Office without legislative backing and a highly efficient and effective accounting system has been established. I would like to say, at this stage, a word of praise for the Australian Safeguards Office which has been carrying out its job most satisfactorily and, I am certain, will continue to do so under this legislation.

In addition to these primary functions, the Director will have the function of providing advice to the Minister on safeguards matters and providing a technical input into policy formulation by the relevant Departments. The Director will also be responsible for carrying out and co-ordinating research related to nuclear safeguards. Australia is a very strong supporter of the IAEA and, in addition to its mandatory contribution to the Agency, provides voluntary financial assistance to the continued search by the Agency to improve safeguards. This assistance usually takes the form of research done in Australia or the provision of experts to the Agency in Vienna at no cost to the Agency. The technical aspects of such assistance are carried out and will continue to be carried out by the Australian Safeguards Office in conjunction with the Australian Atomic Energy Commission and its successor the Australian Nuclear Science and Technology Organisation.

The Director will be required to furnish an annual report to the Minister to be laid before each House of Parliament. Under an amendment in the Senate accepted by the Government, the report will include information on transfers of Australian origin nuclear material to other countries. It had been intended that information of the kind contemplated in the amendment would be included in the report and the Government is happy to formalise the position. Publication of this information will serve to increase public confidence in the operation of the safeguards system and Australia's network of bilateral safeguards agreements. The Director will be assisted by inspectors whose functions will be to carry out inspections as required to ensure compliance with the provisions of the legislation and permit conditions. The inspectors will have rights of entry with the consent of an occupier of relevant premises, in accordance with an agreement or in pursuance of a warrant. They will also have the right of seizure of nuclear items in certain circumstances.

The Bill also outlines the functions of IAEA inspectors. Under the agreement with the IAEA Australia is under an obligation to allow inspection of all nuclear material subject to the agreement. These inspections are carried out by IAEA inspectors who visit Australia regularly for that purpose. The IAEA inspectors are accompanied by Australian Safeguards Office inspectors on all their inspection visits and entry to nuclear establishments is arranged by the Safeguards Office. The legislation will provide the Safeguards Office with the necessary powers to ensure that Australia is able to comply with its obligations to the IAEA in respect of entry by IAEA inspectors.

Part V of the Bill contains miscellaneous provisions. Attention is drawn to clause 70 which provides that any powers or functions under the legislation are to be exercised in accordance with relevant international agreements. The international agreements which this Bill is intended to implement spell out in some detail Australia's international obligations. Some of these obligations require domestic law for their implementation. The scheme adopted by this Bill is not to attempt to spell out these obligations but to confer fairly general powers on the Minister and the Director which would enable them to enforce Australia's domestic obligations in so far as they required enforcement by domestic law. Clause 70 is designed to ensure that the Minister and the Director act in accordance with Australia's international obligations in carrying out their duties. I commend the Bill to the House and I tender the explanatory memorandum to the Bill.

Mr DEPUTY SPEAKER (Mr Leo McLeay) —I understand that it would suit the convenience of the House to proceed to the second reading debate forthwith.