Key results for ASNO:

• All statutory and treaty requirements met in respect of nuclear safeguards, the CWC
  (Chemical Weapons Convention), and accounting for Australian obligated nuclear material.




• The most advanced form of International Atomic Energy Agency safeguards, integrated safeguards,
  introduced in Australia (a world first).




• Effective contribution to strengthening international verification regimes:
  
• Ongoing work on safeguards development




• Successful regional outreach on CWC implementation




• Three Australian monitoring stations certified as part of the CTBT
  (Comprehensive Nuclear-Test-Ban Treaty) International Monitoring System.

ASNOs primary
focus is international action against the proliferation of weapons of mass
destruction (nuclear, chemical and biological), in particular, verification
mechanisms to underpin treaty commitments. ASNOs work therefore is very much
involved with national and international security. ASNOs responsibilities
include ensuring that Australia is in compliance with related treaty
commitments, and contributing to the development and strengthening of
non-proliferation verification regimes. ASNOs activities are also central to
Government policies regarding the miningand
export of uranium.

Working as it does
at the policy/technical and policy/regulatory interfaces, ASNO is a unique
organisation both for the Department of Foreign Affairs and Trade and for the
Australian Government. ASNO makes a
major contribution to DFAT policy making, and at the same time pursues policy
objectives in its own right in a complex and specialised area of international
relations. ASNO exercises regulatory
responsibilities under the Nuclear
Non-Proliferation (Safeguards) Act 1987 and the Chemical
Weapons (Prohibition) Act 1994. Drawing on its sound base of technical expertise, ASNO also makes a
significant contribution to Australian Intelligence Community assessments.

ASNO is a centre of
technical excellence that has accrued significant professional skills and
expertise (of a kind which are hard to find and maintain in Australia). Despite the disadvantages of a small skills
base, and its distance from major international centres of political and
industrial activity in relevant fields, ASNO has built a high reputation
amongst counterparts worldwide, and is a major contributor to Australias
position as an effective and constructive participant in the non-proliferation
regimes. Within this context, ASNO
provides DFAT with a vital source of professional expertise.

During the year
steady progress was made in developing the concepts, methods and skills
required by the IAEA for implementing strengthened safeguards, and integrated safeguardswere
introduced for the first time, in Australia. At the end of the reporting period, strengthened safeguards had been
brought into effect in 20 states, and also in Taiwan, China. Although the rate of ratificationsis
slower than one would wish, work is proceeding in a large number of states on
the necessary legislation and administrative arrangementsa further 37 states
had signed, but not yet ratified, Additional Protocols accepting strengthened
safeguardsso strengthened safeguards can now be seen as representing the
safeguards norm.

Outside the area of
IAEA safeguards, developments have been less positive. A major disappointment is the potential breakdown in negotiations on the protocol
designed to strengthen the Biological Weapons Convention (BWC), a text painstakingly developed in a
multilateral Ad Hoc Group over the last several years. At the time of writing this Report, it is unclear
exactly how this work may be salvaged in a way that can still strengthen the
BWC and afford states the solid security benefits they seek. Other disappointments include the failure to
secure the necessary ratificationsfor
the CTBT (Comprehensive Nuclear-Test-Ban Treaty) to enter into force, and the
continuing delay in the commencement of negotiations on a Fissile Material
Cut-off Treaty (FMCT) in the Conference on Disarmament in Geneva.

International safeguards

The IAEAsafeguards system is undergoing considerable change, aimed
particularly at strengthening assurance against undeclared nuclear
activities. ASNO's key roles in this
area are: to develop, contribute to and promote effective international nuclear
non-proliferation and safeguards arrangements; and to evaluate the
effectiveness of these arrangements as a basis for advising Government. ASNO's work also includes evaluation of
nuclear fuel cycle developments and their implications for non-proliferation
and safeguards implementation.

ASNO continues to
make a substantial contribution to the development of strengthened IAEA
safeguards, and the integration of strengthened safeguardswith
the established (classical) safeguards system. A major component involves working with the IAEA in the
development of safeguards measures for field-testing and application in
Australiathe IAEA is able to gain experience here, in a safeguards-friendly
environment, before proceeding with more widespread application. ASNO has been working with the IAEA on
strengthened safeguards measures for some years, and in 2001 this culminated in
Australia becoming the first country to qualify for implementation of integrated
safeguards. ASNO's efforts also included
a major contribution to the work of SAGSI (the Standing Advisory Group on Safeguards
Implementation, a group of international experts advising the IAEA Director
General), and a Support Program providing assistance to the IAEA in areas such
as safeguards R&D.

Other activities by
ASNO during the year included the commencement of an outreach program assisting
regional countries in preparing for the Additional Protocol, and preparation
for a safeguards trainingcourse intended particularly to assist the DPRK (Democratic
Peoples Republic of Korea) in developing its national safeguards system.

Notwithstanding
difficulties in the Conference on Disarmament, achievement of an FMCT continues
to be a high priority for Australia. The
FMCT will complement the CTBTtogether they would place a quantitative cap on
the nuclear material available for weapons and a qualitative cap on nuclear
weapon development. ASNO has
established itself internationally as a leader in the development of proposals
for verification under an FMCT regime. During the year ASNO participated in a number of workshops on this
subject.

Continuing from the previous year, ASNO was closely
involved in the international review of the Convention on the Physical Protectionof
Nuclear Material (CPPNM). This review considered whether there was a need to revise the Convention
such that internationally agreed standards of physical protection for nuclear
material in international transport would be applied equally to domestic use,
storage and transport. Although
consensus was not reached on the need to revise the Conventionseveral states
remain to be convincedthe review group recommended to the IAEA Director
General, Dr ElBaradei, that he convene a technical and legal experts group to
draft a well-defined amendment. ASNO
understands that Dr ElBaradei intends to take up this recommendation.

Bilateral safeguards

During 2000-01 Australia exported 9,722 tonnes of uranium,
earning over $497 million. Australia
was the worlds second largest uranium producer. This quantity of uranium was sufficient to fuel over 40 power
reactors, thereby enabling the countries concerned to avoid carbon dioxide
emissions equivalent to
around 90% of Australias total carbon dioxide emissions (from all sources).
These exports represented an increase of 11% in the total quantity of
Australian Obligated Nuclear Material (AONM) in Australias
network of safeguards agreements.

Figure 2 Mr Downer and Argentine Foreign Minister Mr Giavarini initialling the
Australia/Argentina nuclear cooperation agreement.

ASNO is responsible
for ensuring that all AONM is accounted for in accordance with Australia's
safeguards agreements, and that it is used for exclusively peaceful
purposes. In this work, ASNO supports
DFAT in the negotiation and review of safeguards agreements and is responsible
for the implementation of the agreements. This year ASNO and DFAT made substantial progress on four new safeguards
agreements: with Argentina, the Czech Republic and Hungary, and with the United
States covering uranium supply to Taiwan.^[1] In
February ASNOs Assistant Secretary, Mr Andrew Leask, led an ASNO-DFAT
negotiating team to Buenos Aires where the final text for a bilateral nuclear
cooperation agreement was settled. Mr
Downer initialled this agreement during his visit to Argentina later that month
(see Media Release page 90).

As in previous
years, ASNO established that all AONM under Australias bilateral agreements
was satisfactorily accounted for.

Domestic safeguards

Australia was the first country
to bring into effect an Additional Protocol accepting the application of
strengthened safeguardsmeasures (10 December
1997). Subsequently Australia has
undergone over three years of strengthened safeguards and review, enabling the
IAEA to conclude there are no indications of undeclared nuclear activities in
Australia. As mentioned earlier,
Australia has become the first to qualify for the introduction of integrated
safeguards, under which the assurance reached on the absence of undeclared
nuclear activities leads to a reduction in the intensity of routine safeguards
inspections.

Under the new
arrangements, there has been a reduction in the number of routine inspections
at ANSTOs Lucas Heights facilities, combined with the introduction of
unannounced inspections (in practice involving three hours warning). In addition the IAEA will continue to
conduct complementary access at Lucas Heights and other locations. This integrated safeguards regime is expected to result in significant
savings in inspection effort, as well as providing more effective safeguards
(e.g. through the unpredictability of unannounced inspections). Australia's experience is being watched with
interest by other countries as they prepare for their own introduction of
integrated safeguards. Implementation
of integrated safeguards is very much an iterative process, with refinements
expected in the light of experience, and ASNO will be working closely to assist
the IAEA in this regard.

As reported last
year, Australias agreement with the United
States covering transfer of SILEXlaser uranium enrichment technology came into force in early
2000. Since then, ASNO has developed
the Administrative Arrangements required to give effect to this agreement and
security documentation to ensure that proliferation-sensitive information is
suitably protected. ASNO and the US
Department of Energy have formally determined that SILEX should be protected as
a proliferation-sensitive technology, and have
agreed to a Classification Guide setting out the classification of each element
of the project.

Chemical Weapons
Convention (including Biological Weapons Convention Issues)

ASNO
has maintained an excellent professional relationship with the OPCW(Organisation for the Prohibition of Chemical
Weapons, the international organisation responsible for the implementation of
the CWC) and with counterpart national authorities, particularly in our
region. ASNO continues to assist
Vietnam with its CWC implementation arrangements. In January 2001, ASNO organised and provided the keynote speaker
in a CWC Workshop in Hanoi, which was attended by around 50 participants from a
range of government ministries, industry and academia.

Together
with the OPCW, the Royal Australian Chemical Institute (RACI), and the Defence
Science and Technology Organisation (DSTO), ASNO and DFAT co-hosted a CWC
Regional Workshop in Melbourne from 30 April to 4 May 2001. The Workshop brought together participants
from 13 South East Asia and South Pacific Island Countries with the primary
objectives of raising awareness of the CWC and fostering international
cooperation in the peaceful uses of chemistry in the region. The Workshop was attended by representatives
from government, academia and industry and resulted in requests from
participants for both CWC implementation assistance on a bilateral basis and
similar workshops in the future, as a means of strengthening regional CWC
networks.

ASNO
has continued to work closely with industry, especially facilities producing
unscheduled discrete organic chemicals (DOC), through a program of on-site
visits. Through this outreach, ASNO has
sought to raise awareness of the CWC and concomitant legislative obligations,
and to prepare these sites for routine compliance inspections by the OPCW. ASNO has also visited a number of traders in
CWC Scheduled chemicals to explain the import and export licensing arrangements
operating under the CustomsAct
1901.

The
OPCW did not conduct any inspections in Australia in the reporting period.

On
an inter-agency basis, ASNO continued planning for a challenge inspection in
Australia, although the likelihood of such an event is small. To this end, an ASNO officer participated as
an inspector in a practice Challenge Inspection exercise in the United Kingdom
in June.

This
year ASNO has provided support to DFAT in the negotiation of a protocol to
strengthen the BWC. It has participated in the BWC National
Consultative Group (NCG) and inter-departmental committees coordinated by DFAT.

Comprehensive Nuclear-Test-Ban Treaty

Although the CTBThas
yet to enter into force, the Treaty requires that its verification systemthe
International Monitoring System (IMS)is to be capable of meeting the
requirements of the Treaty upon entry-into-force. Accordingly, states that have signed the Treaty (161 as at 30
June 2001) are funding this preparatory work.

Over the past 12
months, ASNO has strengthened its role as the provisional CTBT national
authority. It has enhanced its
relationship with the CTBT Organisation (CTBTO) Preparatory Commission and its Provisional
Technical Secretariat (PTS) in Vienna. During the year three Australian monitoring stations were certified by
the PTS as part of the IMS, including a primary seismological station in
Warramunga, Northern Territory, and two radionuclide
stations located in Melbourne and Perth. At the time of writing, Australia has the greatest number of certified
IMS stations of any country. The
hydrophone array associated with the Cape Leeuwin hydroacoustic station was
installed in March 2001. Following
resolution of land tenure issues, ASNO expects that this station will be
completed soon, with certification by the PTS expected in 2001-02. ASNO has made a major contribution to the
development of verification procedures for the CTBTs On-site Inspection
mechanism.