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Thursday, 21 August 1980
Page: 614


Mr ANTHONY (Richmond) (Minister for Trade and Resources) - I move:

That the Bill be now read a second time.

The purpose of this Bill is to amend section 41 of the Atomic Energy Act 1953, which relates to the mining of prescribed substances on behalf of or in association with the Commonwealth; and to amend the Australian Atomic Energy Commission's borrowing powers under section 30 of the Act. Honourable members will recall that on 18 December 1979 I announced that the Government had decided to divest its interests in the Ranger uranium project and that it wished to accept the offer submitted by Peko-Wallsend to acquire those interests through a new companyEnergy Resources of Australia - ERA. The proposal envisaged that the new company would acquire Peko's interests in the project as well as the interests of the Government. It was subsequently announced that the Electrolytic Zinc Company had reached agreement with Peko to join ERA. ERA will thus acquire the interests of each of the present joint venturers in the project and the rights to all the production at Ranger. The authority issued under section 41 of the Atomic Energy Act under which the joint venturers carry on operations in the Ranger project area will be assigned to ERA.

The Government will assign its interests in the project to ERA for a premium of $ 1 25m. Furthermore, ERA will reimburse all past expenditure on the project incurred by the Australian Atomic Energy Commission. ERA will meet all future expenditure on the project, including reimbursement of payments to the Northern Land Council and to the Aboriginals Benefit Trust Account, payments to the Ranger Rehabilitation Trust Fund for rehabilitation of the Ranger project area upon the cessation of mining operations, and reimbursement of payments which the Commonwealth has undertaken to make to the Northern Territory Government in lieu of uranium royalties. In reaching its decision last year to sell its interests in Ranger, the Government recognised its obligation to the Australian public to receive a fair commercial price for a valuable public asset. The price obtained by the Government is a good price for the Australian public.

In restructuring the arrangements to provide for ERA to take up the interests of each of the present joint venturers in the Ranger project, the obligations which the Government undertook in its agreement with the Northern Land Council pursuant to section 44 of the Aboriginal Land Rights (Northern Territory) Act 1976 will not be affected in any way. The Commonwealth Government negotiated that agreement with the Northern Land Council, not as one of the Ranger joint venturers but as a principal on whose behalf mining is being undertaken in the Ranger project area. The Commonwealth's position as principal to that agreement with the Northern Land Council will be retained following divestment. Assignment of the authority under section 41 of the Atomic Energy Act to ERA carries with it assignment of the conditions and restrictions set out in Schedule 2 of the authority, which relate to environmental requirements. Environmental requirements relating to the project therefore remain unchanged.

Additionally, as part of the assignment, ERA under its agreements with the Commonwealth will be required to observe the obligations that relate to environmental and Aboriginal matters binding upon the present joint venturers under the existing Government agreement of 9 January 1979. In short, the terms of settlement between ERA and the Commonwealth do not compromise in any way the Government's responsibilities to the Aboriginal people and to the environment.

The necessary documentation to assign the Government's interests in the project has been settled. It is my intention to formally sign the documents immediately upon the amendments of the Atomic Energy Act proposed in this Bill coming into effect. This divestment documentation will be tabled in Parliament at that time. Foreign equity participation in ERA is currently under examination by the Foreign Investment Review Board in terms of the Government's foreign investment policy, the objective of which is 75 per cent Australian equity and Australian control of uranium mining ventures. The companies propose that the Australian public companies, Peko and EZ, will hold approximately 61 per cent of the issued share capital of ERA and a further 14 per cent will be offered to the Australian public. In announcing on 18 December 1979 the Government's wish to accept Peko's offer for the Government's interests in the Ranger uranium project, I said that a maximum of 25 per cent of the equity capital of the new company would be taken up by major overseas companies, which, as a condition of their participation, would bring with them sufficient sales contracts to ensure the immediate viability of the project. I am pleased to be able to inform honourable members that this has been achieved and that the result will be of significant benefit to Australia's export earnings.

Contracts have been negotiated by ERA pursuant to the Government's uranium export policy with West German and Japanese equity holders. They provide for the sale of approximately 34,000 short tons of U30s for delivery over the 1 5-year period 1 982 to 1 996. The value of the contracts, at average market prices, prevailing to date during 1980, is in excess of A$2000m and I believe could considerably exceed this figure over the life of the contracts. Contracts with the three German companies, Saarberg-Interplan, Urangesellschaft and RWE, were signed in Canberra on 18 August 1980. The contracts with the Japanese companies, Kyushu, Shikoku and Kansai electric power companies and C. Itoh and Co., have been settled and await formal signing. The contracts provide, as required by the Government and explained in my statement of 1 February 1979, that deliveries are conditional on bilateral safeguards agreements being in force which provide for safeguards to be applied in customer countries and which meet the Government's 1977 requirements. Negotiations on bilateral nuclear safeguards agreements between Australia and EURATOM, of which the Federal Republic of Germany is a member state, and Australia and Japan are well advanced.

In my statement to Parliament on 25 August 1977, when the Government's decision to proceed with the development of our uranium resources was announced, I noted that the previous Labor Government recognised the interdependence between Australia and other countries and our responsibilities as a nation rich in energy resources to supply these resources to others. The equity relationship and associated sales contracts represent a milestone in relationships between Australia and two of its most important trading partners, both of whom are heavily dependent on imports of energy resources. The very large tonnages involved demonstrate the importance of nuclear power in electricity generating programs.

As honourable members are aware, ownership of uranium in the Northern Territory was retained by the Commonwealth on the granting of self-government to the Territory. Operations at Ranger are carried out on behalf of the Commonwealth under an authority issued pursuant to section 41 of the Atomic Energy Act. As I have already mentioned it is proposed that the authority will be assigned to ERA upon assignment of the Government's interests in the project. In the course of finalising some aspects of the commercial documentation, legal counsel, acting for some of the Australian commercial parties involved, queried whether the arrangements envisaged between the Commonwealth and ERA would be on behalf of the Commonwealth within the meaning of section 41 of the Atomic Energy Act and the authority which it is proposed to assign to ERA. Subsequently, representatives of Peko and EZ indicated to the Government the reluctance of some of the commercial parties to finance their involvement in ERA unless there is no doubt that operations to be carried on after assignment are authorised by the authority. In these circumstances, the Government decided to proceed with the amendment to section 41 of the Atomic Energy Act which is contained in clause 5 of the Bill. Then they will not have anything to worry about. The purpose of this amendment is to ensure that the proposed arrangements between the Government and ERA cannot be held to be other than on behalf of the Commonwealth within the meaning of section 41 of the Act and the authority which is proposed to be assigned to ERA.

The amendments relating to the borrowing powers of the Australian Atomic Energy Commission are necessary in order to enable the Commission to raise funds through the issue of bills of exchange and promissory notes in order to continue to finance its contributions to the Ranger uranium project until assignment of the Government's interests in the project is effected. The necessary amendments to the Act to achieve this objective are contained in clauses 3 and 4 of the proposed Bill. They are similar in character to amendments passed by this Parliament in 1979 and 1980 to widen the borrowing powers of the National Railways Commission and the Australian Shipping Commission. Certain of the State Premiers and the Northern Territory Chief Minister have, on occasions, expressed to the Commonwealth views about the wide range of powers available to the Commonwealth under the Atomic Energy Act. Certain sections of the Act were amended in 1979 to take account of some of these views. Following further consideration of these views the Prime Minister has informed State Premiers and the Northern Territory Chief Minister - I now wish to inform this House - that the Government has decided to undertake a wide ranging review of the Atomic Energy Act and related matters. I hope that pleases the honourable member for Reid.


Mr Uren - It's time you did something about it.


Mr DEPUTY SPEAKER (Mr Giles - Order! The honourable member for Reid will stop interrupting.


Mr Innes - He started it. Why don't you listen to him?


Mr DEPUTY SPEAKER -It started long before anything the Minister said. I bring the House to order and ask the Deputy Prime Minister to continue with his speech.


Mr Uren - This legislation will bring--


Mr DEPUTY SPEAKER -I warn the honourable member for Reid.


Mr ANTHONY - He becomes Ukrainium active in these matters.


Mr DEPUTY SPEAKER -I advise the Deputy Prime Minister to proceed with his speech.


Mr ANTHONY - The review, which will be undertaken in consultation with the State and Northern Territory governments, will review the functions and purposes of the Atomic Energy Act 19S3 and other Commonwealth legislation relevant to nuclear issues. The review will assess the Act and other relevant Commonwealth legislation as an appropriate legislative basis for the promotion, regulation and control of nuclear activities and the development of an Australian nuclear industry. It will also consider possible alternative legislative frameworks. I seek leave to incorporate the full terms of reference of the review of the Act in Hansard.

Leave granted.

The document read as follows -

REVIEW OF THE ATOMIC ENERGY ACT AND RELATED MATTERS TERMS OF REFERENCE

1.   To review the functions and purposes of the Atomic Energy Act 1953 and other Commonwealth legislation relevant to nuclear issues (for example - the Environment Protection (Nuclear Codes) Act 1978, the Environment Protection (Alligator Rivers Region) Act 1978, the Environment Protection (Impact of Proposals) Act 1974, the Customs Act 1901, the Crimes Act 1914, and Regulations thereunder).

2.   To assess the Atomic Energy Act 1 953 and other relevant Commonwealth legislation as an appropriate legislative basis for the promotion, regulation and control of nuclear activities and the development of an Australian nuclear industry, and to consider possible alternative legislative frameworks.

3.   Without limiting the generality of the foregoing, the review will take into account:

(a)   international obligations including those under the Nuclear Non-proliferation Treaty, the Australia/IAEA Nuclear Safeguards Agreement, the IAEA Convention on the Physical Protection of Nuclear Material (subject to signature and ratification) and Australia's bi-lateral safeguards agreements with other countries;

(b)   the appropriateness of the present legislative basis for the exercise of Commonwealth responsibilities in relation to the commercial development of an Australian uranium industry and related industries;

(c)   the requirements for the regulation, licensing and development of a nuclear industry in Australia;

(d)   the implications for national defence and security;

(e)   the Government's decisions on the NERDDC report on the Australian Atomic Energy Commission Research Establishment;

(f)   liability and compensation for nuclear damage;

(g)   intergovernmental arrangements relating to the transfer of classified technical information; and

(h)   implications of the laws of other countries.

4.   To consult as necessary with the States and the Northern Territory on matters relating to the Commonwealth's responsibilities and obligations which may have implications for them or may require their co-operation, including the possibility of complementary legislation.

5.   To report to Ministers on matters encompassed by the review by 31 December 1980.

The amendments now proposed to the Act in the Bill before this House, relate to existing activities under the Act and flow from the Government's decision to divest its interests in the Ranger uranium project. These amendments can proceed without in any way affecting the scope of the general review to which I have referred. The involvement of the Government in mining projects is contrary to the political philosophy of this Government. The sale of the Government's interests in Ranger to ERA- whose major shareholders are the original partners in the project before the Labor Government became involved- is consistent with our philosophy. This divestment is particularly pleasing as it also involves one of the largest export sales ever recorded at one time for a single commodity by an Australian company. It marks the advent of Australia as a major supplier of uranium to the world market. It also represents a very tangible and positive expression of confidence in Australia by two of our major trading partners. I commend the Bill to the House.

Debate (on motion by Mr Uren) adjourned.







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