194 Cablegram from Department of Foreign Affairs to High Commission in Kuala Lumpur

Canberra, 28 January 1974

445. Confidential Immediate

NPT Safeguards Agreement

The question has been raised as to whether it is desirable for Australia to seek the inclusion of a clause in the NPT safeguards agreement which would provide for a review of the operation of the agreement, on request or, in any event, 5 years after the entry into force of the agreement. This clause would be in addition to the normal provisions for amendment which provide for consultation between the agency and the other party on amendment of the agreement. Under the terms of Article 24 any amendment requires the agreement of both parties.

  1. The proposal to include a clause for revision of the operation of the agreement follows developments in international thinking on NPT safeguards which have occurred since the original model agreement was prepared in the IAEA in 1970-1971. One development of particular significance was the conclusion of the agreement with Euratom, the atomic energy organisation of the European communities. This agreement provided for the continued operation of safeguards already being conducted by the Euratom organisation in co-operation with the IAEA. A further important development was the commencement of negotiations in June 1973 for a safeguards agreement between Japan and IAEA. Japan had taken the position that it required equal treatment with Euratom countries and proposed to establish a national safeguards organisation which would have a role in Japan which would be equivalent of that Euratom in European countries. Japan's proposal envisages an important development in the relationship between single states and the agency in the conduct of safeguards.
  2. Developments in 1973 indicated that there was considerable sympathy for the Japanese attitude and there has been a growing recognition on the part of the IAEA that developed countries with substantial nuclear industries will have to set up more elaborate domestic safeguards systems. The agency considered that as nuclear materials came into more common use national governments would have an increasing need to account for their handling. Greater recognition of national accounting or safeguarding systems was therefore seen as 'the path for the future'.
  3. Japan has not yet ratified the NPT and has not been under pressure to conclude a safeguards agreement in the immediate future. Reports had indicated it was unlikely that Japan would take action to ratify the NPT in 1974. However, Australia is in a different situation and would be in breach of the NPT if the safeguards agreement did not enter into force by 23 July 1974, i.e. 18 months after ratification of the NPT.
  4. Departments there took the view (which was accepted by ministers) that Australia should not await the outcome of the Japan/IAEA negotiations but should conclude an agreement on the basis of the standard safeguards agreement. However, provision was sought for review of the operation of the agreement to ensure that account could be taken of future developments in the relationship between national accounting and control systems and the IAEA safeguards system. Discussions were held with the agency to establish the means to achieve this end. The agency made it clear that it considered all parties to the NPT should receive equal treatment in the application of safeguards even if they already had an NPT agreement in force. As a result of these discussions the agency suggested a form of words which were to be included in a safeguards agreement with Sweden. This clause had already been included in safeguards agreements with Denmark and Norway and approved by the IAEA Board.
  5. The provision for review of the operation of the agreement would make it clear that Australia and the agency could jointly take account of future developments in the relationship between national and agency systems which were relevant to the operation of safeguards in Australia. At the present stage of the Australian nuclear industry, it did not seem necessary to contemplate establishment of an advanced national system as envisaged by Japan. At the same time we did not wish to exclude the possible development of a more complex national system if this was required by the growth of the nuclear industry in Australia.
  6. Provision for review of the operation of the Australia-IAEA safeguards agreement would not open the way for any modifications which were inconsistent with the basic concepts of the NPT (which itself provides for the review of the basic treaty 5 years after its entry into force). The IAEA would be unable to accept any proposed changes in the safeguards agreement which were inconsistent with its responsibility which is set out in the NPT for the verification of obligations assumed by parties to the NPT.
  7. In negotiations with the agency we have taken the position that Australia wants a safeguards agreement which is consistent with its obligation under the NPT. We have emphasised that we do not intend to seek concessions which could in any way undermine the effectiveness of the NPT. At the same time we have argued that it is important that all parties should receive equal treatment consistent with the requirements of the NPT. We consider this important if other countries are to become parties of the NPT. The agency appears to share this view and has presented no problem in agreeing to include the provision for a review of the operation of the agreement. Since the language has already been used in IAEA agreements we do not expect any difficulties when the agreement is considered by the Board in February.1

[NAA: A1838, 919/10/5 part 35]