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Tuesday, 6 June 1989
Page: 3493

(Question No. 562)


Senator Sanders asked the Minister representing the Minister for Primary Industries and Energy, upon notice, on 30 August 1988:

(1) Does the Minister acknowledge that his answer of 29 August 1988 to my Question Without Notice of 28 April 1988 on uranium origin swapping explains the legality of safeguards obligation swaps with the European Community (EC), whereas my Question referred to an origin swap involving South African and Niger yellowcake, in which safeguards obligations were not exchanged.

(2) In the documents supplied by me to him detailing the South African/Niger origin swap, does the Euratom Supply Agency state that its `participation . . . is not necessary for the closing of the contract'.

(3) In the Euratom Supply Agency Advisory Committee Notes dated 19 November 1987 supplied by me to him, does the Agency state that `there is nothing to prevent 2 companies agreeing between themselves to regard the origin of equivalent quantities of material held between them as being exchanged', and that `Euratom Safeguards do not verify, record or track the origin of nuclear material'.

(4) Do the statements in parts (2) and (3) show that origin swaps are a different form of swap from obligation swaps referred to in the Minister's answer.

(5) Do the statements in parts (2) and (3) show that origin swaps, unlike obligation swaps, can be conducted privately between companies within the EC without the approval of the Euratom Safeguards Directorate.

(6) Do the statements in parts (2) and (3) also show that the origin swap which occurred on 19 February 1986 between Nukem and Preussen Elektra (in which Nukem's South African uranium was given a Niger origin, and Preussen Elektra's Niger uranium a South African origin) did not require or receive Euratom approval.

(7) Does this mean that Australian and South African uranium can be origin swapped in the EC without Euratom's approval.

(8) Is the Australian Government unable to ascertain whether this has already happened, and whether it will happen in future.

(9) Can origin swaps also take place between companies in different safeguards jurisdictions, without the approval of the International Atomic Energy Agency or Euratom, as appropriate.

(10) Is the Australian Government unable to ascertain whether this has already happened, and whether it will happen in future.

(11) Does this mean that the Australian Government's policy of not allowing International Flag Swaps (IFSs) between Australian and South African uranium can be circumvented by companies which conduct origin swaps rather than IFSs.


Senator Cook —The Minister for Primary Industries and Energy has supplied the following answer to the honourable senator's question:

(1) Yes. In the case to which Senator Sanders referred, both quantities of uranium supplied from South Africa and Niger to Euratom had a peaceful uses obligation attached and were in the U3O8 form. Because the obligations involved were identical, swapping these quantities had the same effect whether it was regarded as a swap of origin or of obligation.

(2) These words appear in one of the documents to which the Senator refers. The document purports to be an unofficial translation of a telex from the Euratom Supply Agency to the German nuclear firm, Nukem.

(3) Yes. Three important observations should be made:

(i) Although the document referred to is a Euratom paper, it is a discussion paper prepared for use within an advisory committee to one of Euratom's agencies. It is not a statement of Euratom policy.

(ii) The concept of physical origin is not relevant to the application of IAEA and Euratom safeguards. These apply to all nuclear material subject to those safeguards regardless of origin. Physical origin loses its relevance from the safeguards point of view once the discrete physical identity of a shipment of uranium in the form of yellowcake arriving from a country of origin has been lost, for example by commingling and treatment with material from other countries in a bulk chemical process. But a quantity of nuclear material equivalent to that from the country of origin will be subject to the same safeguards obligations as the original material.

(iii) It is correct that Euratom Safeguards do not verify, record or track the physical origin of nuclear material, but Euratom undertakes tracking of and accounting for nuclear material subject to certain bilateral agreements. As the recipient of nuclear material subject to such agreements, Euratom assumes specific safeguards obligations as required by the countries either supplying or processing the nuclear material concerned. Euratom assigns a safeguards accounting code to the material to enable it to satisfy the obligations it has assumed, as the material moves through the fuel cycle. The separate codes assigned to nuclear material subject to Euratom's agreements with Australia, Canada and the US effectively ensure that this material is at all times accounted for as being subject to these agreements and treated accordingly.

(4) Yes.

(5), (6), (7), (8), (9) and (10) Origin swaps within a recipient country's jurisdiction do not affect the application of IAEA safeguards or the fulfilment of bilateral safeguards obligations. The ground for concern with origin swaps is their possible misuse as a means of facilitating the flow through the international fuel cycle of some nuclear material, such as South African uranium, in contravention of some countries' foreign policies forbidding the importation of such material.

At no time has there been any suggestion that Australian obligated nuclear material has been involved in an origin swap designed to facilitate the flow of nuclear material produced in South Africa from Euratom to a country outside Euratom for whatever purpose. The Government would be most concerned at any such suggestion.

The papers to which the senator refers imply that the origin swap involving nuclear material from South Africa and Niger which allegedly occurred in February 1986 did not require or receive the approval of the Euratom Safeguards Directorate. This would not be surprising given that a swap of physical origin within a particular jurisdiction would have no safeguards significance. Euratom and IAEA safeguards would continue to apply to both quantities of nuclear material and Euratom's tracking of and accounting for nuclear material subject to certain bilateral agreements would not be affected.

Since that time Euratom has taken action against such swaps. European Commissioner Mosar, in his response to the report of the European Parliament's Committee of Enquiry into the Transport and Handling of Nuclear Material which was released on 4 July 1988, said that ``Where the particular question of origin swaps is concerned, I want to repeat that . . . the Commission had already taken steps to exclude them, well before the Transnuklear affair.''

The Government has been informed by Euratom that discussions have been held between the European Commission and the European nuclear industry, as a result of which agreement has been reached that origin swaps should not take place.

(11) No.