Paper presented to IAEA Safeguards Symposium, Vienna,
16-20 October 2006

Abstract. In the past decade safeguards have
moved from a relatively routine system, operating in a
seemingly benign environment, to a system undergoing radical
change, having to reinvent itself to respond to major
challenges. Traditional safeguards developed with an emphasis
on nuclear materials accountancy, and on verifying the
correctness of declared nuclear material inventories. The need
to avoid discrimination came to be interpreted as requiring
uniformity in safeguards implementation – exemplified in
the Safeguards Criteria. Today it is recognised that the
greatest single safeguards challenge is the detection of
undeclared nuclear activities - safeguards need to provide
assurance of the completeness as well as the correctness of
States' declarations. The development of new methods,
approaches and technology – and a new safeguards culture
– are needed to respond to this challenge. In contrast to
the previous uniformity, the new safeguards are underpinned by
a State-level approach, designing safeguards implementation to
address the acquisition paths available to each State, and
other State-specific factors. At the same time, new techniques
and detection technologies are being developed. The broadening
of available verification measures will require greater
adaptability at the implementation level - more options will be
available to inspectors, there will be less emphasis on routine
inspection activities, and much more emphasis on observation
skills. Verification activities directed at the possibility of
undeclared activities will involve new ways of thinking. SAGSI
has played a significant role working with the Secretariat in
developing the new safeguards approaches. This paper outlines
some key concepts that underlie the continuing safeguards
revolution, and SAGSI's views on the further development
of the safeguards system.

1. Introduction

It is no exaggeration to describe the ongoing changes to the
IAEA safeguards system as revolutionary. In the past decade
safeguards have moved from a relatively routine system,
operating in a seemingly benign environment, to a system
undergoing radical change, having to reinvent itself to respond
to major challenges. The process of revolution needs to be
ongoing. The conceptual framework for the new safeguards system
has been developed, but this framework has to be consolidated
through new implementation practices. There is much more to be
done if the safeguards system is to be successful in meeting
current and futurechallenges.

When the traditional comprehensivesafeguards system was
introduced, in the early 1970s following the conclusion of the
NPT, the rationale underlyingthe safeguards system wasseen as
being very different to today. At that time it was thought that
proliferation would require diversion of safeguarded nuclear
material and misuse of safeguarded nuclear facilities. It was
considered beyond the capability of most States to establish a
wholly clandestine nuclear fuel cycle, independent of
safeguarded nuclear material and facilities. So, it was
thought, an effective system was a matter of applying suitably
rigorous safeguards procedures to declared material and
facilities.

During the 1970s and 1980s the traditional safeguards system
developed in conditions of apparent stability, where the main
challenge was seen as resource allocation – how to manage
a steadily growing workload with a relatively static budget.
During this period the traditional safeguards system developed
with an emphasis on nuclear materials accountancy, and on
verifying the correctness of declared nuclear material
inventories. The organizational culture developed around the
use of quantitative and relatively mechanistic procedures. This
culture was reinforced through a particular policy perspective,
specifically, that avoiding discrimination required uniformity in safeguards implementation.

Yet this apparent stability proved to bedangerously
misleading. Beneath the surface, clandestine nuclear programs
remained unrecognised and undetected. By the time of its
discovery, following the First Gulf War, Iraq's
clandestine nuclear program had been growing for over a decade
undetected by safeguards. The discovery of this program
prompted a review of the safeguards system to identify ways and
means of strengthening it.

Today it is recognised that the greatest single safeguards
challenge is the detection of undeclared nuclear materials
andactivities. In IAEA terms this is expressed as requiring
that safeguards should provide assurance of the completeness as well as the correctness of States'
declarations. The development of new methods, approaches and
technology – and a new safeguards culture – are
needed to respond to this challenge.

In contrast to the previous uniformity, the new safeguards
are underpinned by a State-level approach (SLA), designing
safeguards implementation to address the acquisition paths
available to each State and other State-specific factors. At
the same time, new techniques and detection technologies are
being developed. Verification activities directed at the
possibility of undeclared activities are being developed,
reflecting new ways of thinking. The SLA, coupled with
thebroadening of available verification measures and
techniques, will require greater adaptability at the
implementation level – more options will be available to
inspectors, there will be less emphasis on routine inspection
activities, and much more emphasis on observation skills.

A significantrevolutionary aspect of safeguards development
is the enhanced use ofexpert judgment in drawing safeguards
conclusions. Conclusions about the absence of something
(e.g. undeclared nuclear materials andactivities) can never be
as definitive as conclusions based on quantitative methods
applied to a finite problem – the verification of a
declared inventory. For the new safeguards conclusions to be
credible, a number of conditions need to be satisfied: that
States understand the process for looking for indicators of
undeclared activities and accept it asappropriate; that States
are satisfied the process is applied at the requisite standard;
and that States are satisfied judgments are exercised and
conclusions drawn in a suitably disciplined, non-discriminatory way. All of this involves new
approaches compared with the traditional quantitative system,
including analysis of a broader range of information, and a
quality assurance system to ensure appropriate standards of
implementation and decision-making.

SAGSI (Standing Advisory Group on Safeguards Implementation)
comprises a group of safeguards experts – currently 18
– appointed by the Director General to advise him on
safeguards implementation issues. SAGSI was founded in the mid
1970s, following the establishment of the safeguards system set
out in INFCIRC/153. In the early years, amongst other things,
SAGSI was instrumental in developing safeguards design
parameters such as the significant quantity, establishing
timeliness goals, and developing the format for reporting on
safeguards performance in the Safeguards Implementation Report
(SIR). Following the 1991 Gulf War, SAGSI, in collaboration
with safeguards technical experts both within and outside the
Secretariat, helped to develop the strengthened safeguards
measures in Programme 93+2. These ideas and concepts for the
strengthened safeguards system eventually led to the
implementation of the "Part I" measures, and then
the "Part II" measures of the Additional Protocol.
SAGSI has also played a significant role in working with the
Secretariat to conceptualize and develop integrated safeguards
facility approaches as well as the State-level approach.

The sections that follow touch on SAGSI's recent
contributions to the safeguards revolution, describe more fully
some key concepts that underlie the continuing safeguards
revolution, and outline SAGSI's views on the further
development of the safeguards system.

2. SAGSI's review of the Safeguards
Criteria

A major characteristic of traditional safeguards has been uniformity inimplementation – essentially the same
inspection activities were applied at similar facilities in
different States, with limited differentiation between States.
As a consequence, inspection effort was concentrated in those
States with the largest fuel cycles. While some considered such
a situation was the price to be paid for a technically-based,
non-discriminatory system, many others considered that the
allocation of safeguards effort that had evolved represented an
inefficient use of scarce resources, particularly as none of
the States accounting for the greater proportion of the
safeguards effort was considered to pose a significant
proliferation risk.

Though in recent years the concentration of inspection
resources in the three States accounting for the largest
proportion of these resources has eased, for many the
perception remains that traditional safeguards are inherently
inefficient, because they do not provide a mechanism for
prioritising safeguards effort towards areas considered to
present highest proliferation risk. The safeguards
criteria–which specify the safeguards activities required
at each facility – were seen as a major factor
contributing to this situation.

The Secretariat has established safeguards criteria for each
type of facility under safeguards. Originally the safeguards
criteria had been developed to assist in evaluation of
safeguards performance, but over time the criteria came to
specify the scope, the normal frequency and the extent of the
verification activities needed to achieve the inspection goals
for each type of facility. Thus the criteria were used for
planning and implementing verification activities as well as
for evaluating the results therefrom. This resulted in a number
of rigidities being built into the safeguards system.

In 2003 the Secretariat sought a substantial increase in the
Agency's budget, particularly for the implementation of
safeguards. In the context of the debate over this increase the
Board of Governors' Programme and Budget Committee called
for:

A review of the modernization and the flexibility and
cost-effectiveness of safeguards working methods …. The
aim of this exercise shall be to enhance the effectiveness and
efficiency of the IAEA's safeguards system, while
maintaining its credibility.

At the time of the Board of Governors' approval of the
budget increase, and in response to the above call, the
Director General stated that the Office of Internal Oversight
Services would evaluate the effectiveness and efficiency of
the safeguards programme, while SAGSI would be asked to undertake a specific technical review of the safeguards
criteria. The Director General stressed that the primary
driving force in the Agency's verification work must
always be effectiveness and objectivity.

Accordingly, the Director General asked SAGSI to review the
role, structure and content of the Agency's safeguards
criteria, and to make recommendations for any specific changes
that would improve the efficiency of safeguards while
maintaining the ability of the safeguards system to provide
credible assurance of the non-diversion of nuclear material
from declared activities and, as appropriate, the absence of
undeclared nuclear activities.

The terms of reference for the review asked SAGSI to focus
on light water reactors and on-load reactors –including
transfers of spent fuel from such facilities –and
research reactors/critical assemblies. In addition, SAGSI
looked at storage facilities, with particular reference to
spent fuel storage, and fuel fabrication facilities.
Collectively, these various facilities accounted for some 78%
of the Agency's inspection effort(as measured in PDI
– person/days of inspection).

Review of the role and structure of the safeguards criteria
required SAGSI to go beyond the facility types referred to in
the terms of reference, and to examine a number of generic
issues, such as new processes and documentation for integrated
safeguards. In addition, SAGSI examined a number of
"cross-cutting" issues – i.e. issues
affecting a number of facility types.

Although SAGSI focused particularly on efficiency issues,
efficiency and effectiveness are not mutually exclusive –
and SAGSI has recommended a number of efficiency improvements
that would also result in strengthened effectiveness.

In carrying out its review, SAGSI identified key concepts
and principles that should remain substantially unchanged
under either traditional or integrated safeguards, areas where
flexibility would be possible in appropriate circumstances, and
factors to be considered in recommending any changes to
safeguards criteria/approaches. These concepts and principles
include:

• nuclear materials accountancy will remain a safeguards measure
  of fundamental importance;
• safeguards measures should cover all plausible acquisition
  paths;
• where an acquisition path involves declared nuclear material or
  facilities, detection of diversion is not to be solely
  dependent on verification activities relating to the undeclared
  segments of the acquisition path;
• the
  benefit of unpredictable (i.e. to the State/operator)
  inspections and verification activities;
• the
  importance of the Agency being able to reach independent
  safeguards conclusions.

Another key principle is the essential contribution of
inspector presence to safeguards effectiveness –
discussed further below.

During the criteria review, SAGSI discussed and debated at
length topics ranging from the arcane details of safeguards
approaches at specific facility types to new, and in some
cases, radical concepts for safeguards planning,
implementation, and evaluation. It is the new ideas and
concepts, and where they might take the safeguards system in
the future, that are the focus of the remainder of this
paper.

3. The new ideas – furthering the
revolution

SAGSI found that the safeguards criteria remained broadly
appropriate for the circumstances of traditional safeguards,
but recommended a number of efficiency improvements,
including:

• greater use of unattended and remote monitoring
  technologies;
• different ways of achieving timeliness – including
  randomised inspections;
• the
  importance of unpredictability – through
  random/unannounced/short-notice inspections.

SAGSI concluded that a criteria-driven approach is not
appropriate for integrated safeguards. Instead, the basis for
safeguards implementation should be a State Level Approach
(SLA) developed and documented for each State. New processes
should take the place of the criteria – SAGSI recommended
giving effect to the SLA through an annual safeguards
implementation plan, supported by what SAGSI termed
"inspector instructions".

While the safeguards objectives remain similar for all
States, State Level Approaches are intended to reflect the
optimal combination of safeguards measures for each State,
taking into account State-specific factors and adjusting
safeguards intensity accordingly, e.g. through specifying
selected safeguards measures and the facilities to be
inspected.

SAGSI recommended against using "criteria" in
integrated safeguards. In place of the safeguards criteria,
SAGSI advised the Secretariat to develop a State Level Approach
for each State, an annual safeguards implementation plan (AIP)
for the State, and operational-level documents setting out the
activities for meeting the verification objectives for
facilities selected for inspection (and, where appropriate,
providing choices of means of meeting the objectives). In
subsequent discussions with the Secretariat, it was agreed that
the AIP, giving effect to the SLA, would provide the basis for
safeguards planning, implementation, and evaluation. The AIP
and the operational-level documents would serve the function of
the inspector instructions which SAGSI had proposed.

SAGSI emphasised that it was essential to avoid carrying
over to integrated safeguards the rigidities found in
traditional safeguards. Appropriate adjustment must be made for
State-specific factors – otherwise safeguards effort
under integrated safeguards will ultimately be determined, as
with traditional safeguards, mainly by quantities of material
and numbers of facilities.

Although SAGSI highlighted the need to move away from
uniform application of safeguards, SAGSI also drew attention to
the need to ensure Agency-wide standards of effectiveness.
Consistency of process is very different to – and should
not be confused with – uniformity of implementation. The
traditional safeguards criteria, which specify only one way of
applying safeguards implementation parameters, are not
appropriate to integrated safeguards, since integrated
safeguards involve the optimum combination of measures –
requiring selection amongst possible measures.

This, in turn, will require the development ofnew
methodologies for safeguards evaluation. This will include
broadening the range of information that can be taken into
account in evaluating nuclear programs – an area
requiring considerable further development.

Since the Criteria Review, SAGSI has continued to work with
the Secretariat on the development of the concept and
application of the State Level Approach, which has become the
foundation for integrated safeguards.

A State Level Approach is also important for
traditional safeguards

For a State under traditional safeguards, the extent to
which State-level factors can be reflected in the State Level
Approach will be more limited than in the case of a State with
an additional protocol in forceand for which the Agency has
drawn the broader safeguards conclusion. However, SAGSI
concluded that the State-level factors set out in INFCIRC/153
paragraph 81 should be considered for all States subject
to comprehensive safeguards. Recent experience shows that in
making adjustments for State-specific factors the safeguards
system must be capable of increasing, as well as reducing,
safeguards intensity. As States remaining under traditional
safeguards will be the exception rather than the norm, an
important aspect of the State Level Approach will be assessing
the adequacy of the standard facility-level safeguards
approaches for such States.

Evaluation for integrated safeguards should not be based on
implementation criteria. Instead, evaluation should be based
essentially on whether and how the verification objectives
specified in the State Level Approach were met, as indicated by
the results of the activities carried out under the annual
implementation plan.

Under traditional safeguards the safeguards criteria had
become associated with a rigid approach both to implementation
and particularly to evaluation. The "checklist"
approach used for evaluation had also led to a predominantly
"checklist" approach to safeguards implementation.
A primary objective of evaluation under integrated safeguards
is to ensure that safeguards in the State are implemented in
accordance with the SLA and the AIP. SAGSI continues to work
with the Secretariat to develop and refine evaluation concepts
for integrated safeguards.

Integrated safeguards involve continuing cultural
change

The rigidities in traditional safeguards implementation are
the result of uniformity – a particular vision of
achieving non-discrimination under the conditions of
traditional safeguards. Under integrated safeguards, in
addition to adaptability in developing State Level Approaches,
the broadening of available verification measures will require
greater adaptability at the implementation level – more
options will be available to inspectors, there will be less
emphasis on routine inspection activities. Verification
activities directed at the possibility of undeclared nuclear
activities involve new ways of thinking.

Moving from uniform implementation strictly defined by
criteria involves moving to a result-oriented culture, whilst
upholding non-discrimination values. This will also require
greater application of expert judgment and decision-making at
all stages and levels of safeguards implementation. As
discussed, major change is also required in safeguards
evaluation.

Achieving substantial change, while maintaining the
effectiveness, quality and overall non-discriminatory character
of safeguards implementation and evaluation, is a complex
matter that requires the right strategies and management
commitment. Change is taking place – the Agency
has already made good progress in these directions – but
taking the process forward, broadening and accelerating it,
will be a continuing challenge.

Reducing inspections should not be an aim in itself.
Achieving efficiencies in routine inspection tasks enables
prioritisation of inspector time, optimising use of the skilled
inspector resource to activities of greatest verification
value. SAGSI emphasised the essential contribution of inspector
presence to safeguards effectiveness. There are many tasks that
can be performed effectively only by an inspector – and
the observational skills of the inspector are assuming
increasing importance.

Achieving efficiencies in safeguards implementation is not
only a matter for the Agency – greater cooperation
between the Agency and States is required. Greater cooperation
between the Agency and SSACs can significantly improve
efficiency through cooperative endeavours. In addition to
ensuring that SSAC data are timely and accurate, areas for
cooperation include: the use of unattended and remote
monitoring; mailbox approaches for reporting data; the conduct
of joint inspections; and enabling unannounced/short-notice
inspection. Many States are already active in these areas, but
there is more to be done. SAGSI noted these activities require
a high level of commitment and competence on the part of
SSACs.

SAGSI is currently working with the Secretariat on the
development of new guidelines for SSACs, including a revision
of the "Guidelines for States' Systems of
Accounting for and Control of Nuclear Materials"
(IAEA/SG/INF/2) which will be published in the
"International Nuclear Verification Series" as the
top level SSAC Guidelines document and supported by a series of
other guideline implementation documents, including the Nuclear
Material Accountancy Handbook and ISSAS Mission Guidelines.

Further efficiencies could come from the concept of infrequent intensive verification, which SAGSI
recommends for further study. This concept builds on the
advantages of unpredictability in verification. The concept
could be used as an alternative to the normally defined level
of routine inspections – resulting in net savings. This
would involve a trade-off between further reductions in routine
inspections and unpredictable but occasional and intensive
inspections. The concept could also be used to supplement
routine inspections, providing flexibility to introduce more
intensive inspections in response to emerging
circumstances.

Associated with the concept of infrequent intensive
inspection is the concept of a safeguards operational support
team ("SOST") – also recommended for further
study. SOST would comprise a group of specialist inspectors who
can be drawn upon to supplement routine inspection operations.
The Secretariat already does this ad hoc – with
SOST this would be established on an ongoing basis.

4. Further development of the safeguards
system

The new ideas and the ongoing revolution in safeguards will
continue to develop in a dynamic international nuclear context
that may see significant expansion and growth in the use of
peaceful nuclear technologies and continued challenges to the
nonproliferation regime from a small number of States. The IAEA
safeguards system, working on behalf of the international
community, must continue to provide confidence in the peaceful
uses of nuclear energy. SAGSI expects to continue to contribute
to the ongoing safeguards revolution by considering key
technical questions surrounding theimplementation of IAEA
safeguards. Some of these questions are identified in the
following paragraphs.

Peaceful nuclear activities are expected to grow overall,
and importantly for safeguards, to expand into new regions. The
safeguards system will have to keep pace; but it is unlikely
that safeguards growth can be linear with the increase in
global nuclear activities. The concepts outlined in the State
Level Approach, which permit the development and implementation
of "intelligent" safeguards, will be essential to
meet the demands to maintain a credible system that is both
effective and efficient. Will the Secretariat be able to ensure
that the State-Level Approach to safeguards implementation and
evaluation continues to evolve to reflect experience gained as
well as the development of new safeguards-relevant equipment
and technology? Will the safeguards system remain credible?

Experience to date has shown that greater use of information
and advanced technologies are essential elements of the
safeguards system, and these can be expected to increase in
importance in the future. What advances can be expected in the
fields of information collection and analysis that can be
employed by the Secretariat? What are the essential
technologies needed to strengthen the safeguards system and how
can they best be employed? Given the continuing importance of
reseach and development in this area, how can we ensure there
is an appropriately structured R&D programme reflecting the
needs and priorities of the safeguards system?

Wider acceptance of the Additional Protocol and more States
coming under integrated safeguards will contribute to
effectiveness and efficiency gains for the safeguards system.
Experience gained in the implementation of IS can be expected
to improve safeguards implementation leading to additional
gains in both aspects of safeguards. What additional
adjustments to safeguards implementation are warranted?

New fuel cycle concepts, such as assured fuel supply,
multilateral fuel cycle centres, and new partnerships can all
have a major impact on the use of safeguards resources. Until
there is further development of these ideas it is unclear how
they might impact on safeguards, but it is clear they must be
developed in concert with the safeguards community to ensure
the optimal use of safeguards resources. How can we ensure that
safeguards considerations have an appropriate influence in the
fuel cycle choices facing the international community?

The lessons learned from the proliferation activities of a
few States, and the revelation of an illicit nuclear trade
network, have illustrated that the possibility of clandestine
facilities and associated undeclared materials and activities
are real threats that must be addressed by the safeguards
system. How can the safeguards system enhance its ability to
detect these undeclared nuclearmaterials and activities? What
are the impacts on the safeguards system of the possibly
wide-spread availability of, for example, centrifuge
designs?

In short,what will the safeguards system look like in five
orten years? How can the current system build a sound
foundation to support the international nuclear enterprise of
2036 (30 years from now)? If history is a useful guide,
consider the safeguards implemented in 1976 with those
implemented under the current system. The changes have been
dramatic, even if the fundamentals are the same. There is every
reason to believe that the safeguards system will continue to
evolve, with periods like the recent one in which the pace of
change can be truly characterized as revolutionary.

SAGSI Members 2004-2006

• Mr. J. Carlson (Chairman), Mr. M.-G. Albert, Mr. J.
  Casterton, Mr. A. Chabane Sari,
• Mr. Y-M. Choi,Mr. J. Eibenschutz,Ms. S. Fernández
  Moreno, Mr. R. Howsley, Mr. Liu Y.,
• Mr. K. Naito, Mr. B. Pellaud, Mr. V. Pushkarev, Mr. K.
  Raghuraman, Mr. G. Stein,
• Mr. J.W. Tape, Mr. D. Tillwick, Mr. A. Valseth, Mr. L.A.
  Vinhas.
• Mr. E. Haas (2005-2006), Mr. N. Tuley
  (2004-2005), Scientific Secretary.