Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Treaties I present the committee’s report, incorporating a dissenting report, entitled Report 81: Treaties tabled on 8 August 2006 (2).

Ordered that the report be made a parliamentary paper.

by leave—I am pleased to table report 81 of the Joint Standing Committee on Treaties on the Agreement between the Government of Australia and the Government of the People’s Republic of China on the Transfer of Nuclear Material, done at Canberra on 3 April 2006, and the Agreement between the Government of Australia and the Government of the People’s Republic of China for Cooperation in the Peaceful Uses of Nuclear Energy, also done at Canberra on 3 April 2006.

Australia presently has 19 bilateral safeguards agreements which cover the transfer of Australian uranium to 36 countries and Taiwan. We have exported uranium to countries with whom we have a bilateral safeguards agreement since 1979.

These agreements will provide for the transfer of Australian uranium to China.

The committee conducted this inquiry over four months and received 34 submissions. We held public hearings in Canberra, Adelaide, Perth and Melbourne. The committee also visited the Beverley uranium mine in South Australia.

We received a range of views from the uranium industry, environmental organisations, anti-nuclear organisations and private individuals.

There are several levels of oversight in addition to these treaties. China joined the nuclear non-proliferation treaty in 1992 and is a member of the IAEA. China has signed and ratified the additional protocol of the International Atomic Energy Agency in 2002.

These bilateral safeguard agreements provide an additional layer of oversight. They provide a treaty level agreement which proscribes the use of Australian uranium for any military purpose.

The treaties will be implemented operationally through the administrative arrangements which will be concluded between Australian Safeguards and Non-Proliferation Office and the China Atomic Energy Agency.

Both government and opposition members of the committee have concluded that the sale of uranium to China, protected by these safeguards, is in the national interest. I should point out that there is a dissenting report from the Australian Democrats senator, Senator Andrew Bartlett.

In addition the committee have made a number of further recommendations to support Australia’s strong position in global non-proliferation efforts.

The International Atomic Energy Agency safeguards budget is only $US120 million. The IAEA Director General, Dr Mohamed ElBaradei, has stated that the IAEA are operating on a ‘shoestring budget’. The committee has recommended that Australia review the International Atomic Energy Agency funding requirements and that Australia increase its voluntary contributions to that body.

The committee has also recommended that Australia pushes within the IAEA for conversion facilities in the five declared nuclear weapons states under the NPT to be subject to safeguards.

The committee has further recommended that the resources for the Australian Safeguards and Non-Proliferation Office be increased to ensure safeguards are applied effectively.

The committee also received some evidence relating to thorium reactors, which were said to be proliferation-proof. Thorium is currently a by-product of mineral sands, which Western Australia is rich in. The committee has recommended that the Australian government fund R&D in the area of thorium energy generation to compare its waste and energy production with conventional reactors.

Australia has 36 per cent of the world’s uranium reserves, which are recoverable at less than $40 per kilogram. Some expect China’s nuclear power generation capacity to increase eightfold over the next 25 years. Estimates available to the committee suggest that, at a current price of $100 per kilogram, with Australia selling an estimated 2,500 tonnes of uranium to China, this would earn Australia $250 million a year.

Another consideration is that nuclear power does not produce greenhouse gas emissions. Seventy-five per cent of  China’s energy needs are currently met from coal and natural gas, with the remaining quarter predominantly from hydropower. China is seeking to diversify away from coal into natural gas, hydropower and nuclear power. As Peter Morris, from the Minerals Council of Australia, said before the committee:

Every 22 tonnes of uranium used saves the emission of ... one million tons of CO relative to coal fired generators.

The committee has concluded it would be in Australia’s national interest for these two treaties to enter into force. It is possible that Australian uranium could be exported to China by 2007, but most contracts in this area are three to five years in advance.

I would like to thank all those who made submissions and appeared before the committee. I would like to thank the secretariat: committee secretary, James Rees, inquiry secretary, Stephanie Mikac, Serica Mackay and Heidi Luschtinetz for all their help in ensuring the inquiry ran smoothly.

Mr Speaker, I commend report 81 of the Joint Standing Committee on Treaties to the House.

Kim Wilkie (Swan, Australian Labor Party) Share this | Link to this | Hansard source

Report 81: Treaties tabled on 8 August 2006 (2), released today by the Joint Standing Committee on Treaties concerning the agreements signed between Australia and China for the transfer of nuclear material and for cooperation in the peaceful uses of nuclear energy is an important document for Australia and its stance on nuclear non-proliferation. Although the committee recommends that binding treaty action be taken for both of these agreements, it is doing so on the basis of recommendations for Australia to lead a new initiative to strengthen nuclear safeguards. While the exports enabled by the agreements represent a boon for the Australian uranium industry, there are some legitimate concerns about the effectiveness of the international safeguards system to monitor nuclear activity.

As nuclear power generation is likely to expand around the world this century, those concerns are only going to intensify and so it is a fundamental duty for uranium-producing nations which will benefit from this expansion to lobby for the strengthening of nuclear safeguards. Most importantly this means delivering the level of funding deemed necessary by the International Atomic Energy Agency to perform its safeguarding duties. Over the past 20 years the IAEA’s safeguards department has experienced little real growth despite a significant increase in the amount of nuclear materials and facilities placed under safeguards. As the Director-General of the IAEA, Mohamed ElBaradei, has stated, the IAEA’s safeguards department has a budget comparable to the Vienna police force. In this age of international terrorism, this is simply unacceptable.

Not only does the IAEA’s funding shortfall prevent the training of new inspectors but also it prevents the IAEA from purchasing advanced satellite-monitoring technology, investing in research and development, constructing its own state-of-the-art scientific lab for particle analysis and, most significantly, it constrains the degree to which the IAEA’s nuclear safeguards are perceived to be effective by the international community.

While we recognise that one of the greatest threats to international and national security is nuclear terrorism, until this concern is translated into dollars and cents, the IAEA will not be able to deal effectively with this danger. Therefore, we have recommended that Australia take positive action to address this shortfall.

Another way in which JSCOT has recommended that nuclear safeguards be strengthened is through its call for increased funding to be allocated to the Australian Safeguards and Non-Proliferation Office’s safeguards support and international outreach programs. These programs have provided much valuable support in assisting the IAEA to develop safeguards concepts, equipment and procedures as well as helping other nations in the Asia-Pacific region to fulfil their non-proliferation obligations. Unfortunately, the programs are constrained by a very  restrictive budget, and are significantly smaller than the safeguards support programs operated by other major uranium producers, such as Canada. By significantly increasing the funding allocated to the Australian Safeguards and Non-Proliferation Office’s safeguards support and international outreach programs, Australian experts and officials can further enhance their role in aiding countries within our region to improve their safeguards capabilities and ensure that effective safeguards are being applied among customers of Australian uranium.

One area of concern raised in a number of submissions made to the inquiry regarded the starting point of IAEA safeguards. Currently the IAEA only applies safeguards after uranium is converted into a form that is deemed as strategic, which is generally considered to be the conversion of natural uranium ore concentrates into uranium hexafluoride gas. What that essentially means is that, when Australian drums of uranium yellowcake are first shipped to China, they will pass through a conversion facility not covered by IAEA safeguards. While Iran’s continuing development of enrichment technology and general flouting of the nuclear non-proliferation treaty has prompted the IAEA to revise the starting point of safeguards for non-nuclear weapon states, no likewise revision has been sought for the weapon states. Nuclear safeguards are essentially a means of developing trust between nations regarding the peaceful uses of nuclear fuels and technologies. Undoubtedly that trust could be expanded significantly for uranium supplying nations, such as Australia, if all conversion facilities were brought under international supervision.

In the proceedings of the committee’s inquiry, some very interesting submissions were received concerning the development of thorium reactors. This is an area of nuclear research still in the development stage, but much of  the evidence heard on the issue suggested such research was quite promising. Some experts in the field have even suggested that there is probably more energy available for use from thorium in the minerals of the earth’s crust than from both uranium and fossil fuels. As with uranium, Australia possesses large quantities of thorium, yet unlike uranium, thorium has the distinct advantage that it cannot be rendered into a form usable for weapons. It also has another advantage—that is, a lot of it comes from Western Australia. Essentially it cuts the proliferation risk  straight out of the issue of nuclear power. While there is clearly a long way to go in research and development of  thorium based reactors, this is one area of nuclear research in which the committee believes Australia should invest its efforts heavily.

I commend the report of our inquiry to the House and I thank all committee members for their efforts to ensure that this report is soundly based and presents a sensible suite of recommendations to the government. I would also like to thank the committee secretariat for their hard work in supporting our deliberations.

I would like to thank Joel Marks, who worked on this inquiry as part of the parliamentary internship program of the ANU. Joel developed an excellent report on the issues covered in the inquiry as part of his studies at the ANU. I know that the committee appreciated his briefing on nuclear safeguards.

I commend the report to the House and call on the government to implement its recommendations.

David Hawker (Speaker) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

The debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.