106 Letter from Fairbairn to Gorton

Canberra, 16 February 1968

Top Secret

I would like to invite your attention to the draft1 of the Nuclear Non-Proliferation Treaty (N.P.T.) which has been under discussion at the Eighteen Nation Disarmament Committee in Geneva. Australia is not a Member of this Committee, but we have been kept informed of proceedings by friendly powers and in particular by the United States.

I understand that it now appears likely that a draft of the Treaty will be forwarded to the General Assembly early in March and that it will be considered by the Assembly at meetings commencing in April and could, if approved, be open for signature in June. It could be expected that, when this occurs, Australia will be under pressure to sign the Treaty at an early date and I understand that a submission proposing this course is being prepared by our colleague the Minister for External Affairs and will be submitted for consideration of Cabinet in due course.

This Treaty will have the greatest implications for Australia, not only in the political and defence fields but also in the mining industry and in the civil application of nuclear energy. Already it is clear that Communist China and France will not accede to it and my information is that India will not do so.

You will know that the late Prime Minister2 had initiated a review of Australia's nuclear weapons policy and this has not been concluded. The Atomic Energy Commission is collaborating as required in this study, which, it seems to me, should be concluded before Cabinet is asked to give consideration to any proposals relating to Australian accession to the N.P.T.

As a Minister, I am naturally very concerned with all of the implications of signing the Treaty. Because of the demonstrably adverse effects the Treaty would have on several matters which come within my responsibility I am more directly concerned with its implications in the Civil field, particularly in the application of safeguards, and consequential international inspection of many of our industrial operations.

In the past the Government has participated in the development of an International Safeguards System by the I.A.E.A., but it has not been willing to apply this system to all nuclear activities in Australia. Last year, under American pressure, the Government agreed reluctantly to ask the I.A.E.A. to administer the safeguards provisions of our agreement for co-operation with the U.S.A.3 However, these safeguards do not apply to our relations with the United Kingdom or any other country, nor to domestic production of fissile or fertile materials which do not come within the ambit of our agreement with the U.S.A.

In the past, as a matter of principle, Cabinet has refused to accept that safeguards may be applied to nuclear materials but not to nuclear plant or equipment, though as a concession to certain manufacturing nations this is what the Treaty now proposes. Nor have we accepted the application of I.A.E.A. safeguards to domestic production of uranium and thorium. Acceptance of the latter would adversely affect the uranium industry and virtually all of the Australian beach sands industry, as well as other branches of the mining industry.

If Australia accedes to the N.P.T., I.A.E.A. safeguards will become mandatory and our previous policies in these fields would be reversed automatically. All of our production and export of uranium and beach sands (the monazite component of which contains 6% thorium) will be likely to come under I.A.E.A. inspection and possible direction. Industries like phosphate production (phosphate is often found in association with uranium) may also comeunder supervision by the Inspectorate of Safeguards, an international body which will be responsible to the I.A.E.A. and which will operate under a set of procedures over which Australia has no control.

In the course of its normal work, the Atomic Energy Commission is undertaking work relating to the design of specialised equipment for nuclear purposes; for example, the Commission is undertaking some work on a process for the centrifugal separation of uranium 235. Enriched uranium may be used for a civil power programme but it can also be used in the context of a military programme. Much of the equipment used for this research could also be found within our defence laboratories. If Australia were to accede to the Treaty, it would be taken for granted that officers of the I.A.E.A. Inspectorate would insist on inspecting any laboratories where they had reason to believe that any such activity was being conducted and this means that they would have a right of access even to Defence laboratories. Officers of the I.A.E.A. are drawn from all countries, not all of which are friendly.

There is little doubt that the I.A.E.A. Safeguards System, if applied universally will be very costly to the Commonwealth and is likely to have an adverse effect on the introduction of nuclear power and the development of associated industries in this country.

I am aware of course that Australia has no military programme for the production of nuclear weapons and so far as I am aware, no such programme is in contemplation. Moreover, I would welcome any practical move for the reduction of nuclear armaments, but I feel that we should be realistic about this. The U.S.A., U.K., U.S.S.R., China and France will not be subject to the mandatory application of I.A.E.A. safeguards. Although the U.S.A. and the U.K. are likely, as a minor gesture, to place some of their civil facilities under I.A.E.A. safeguards, the U.S.S.R., China and France will not accept them under any circumstances and it is most unlikely that certain other countries within the region of South and South East Asia will do so; e.g., India.

There seems to me to be a very strong case for Australia to move slowly in this matter and delay for a considerable time signing the Treaty, or perhaps not to sign it at all but to make an appropriate declaration that we do not contemplate making nuclear weapons.

The purpose of this letter is to place on record the fact that the Nuclear Non-Proliferation Treaty will have major implications in the civil field for Australia and every endeavour should be made to have an objective assessment of all aspects of the Treaty before Ministers are invited to take a decision on accession by Australia.

[NAA: A1838, 680/10/2 part 2]