Contribution to the
development and effective implementation of international safeguards and
non-proliferation regimes, including participation in international expert
groups and conferences, and provision to the IAEA of consultancies,
assessments, support in R&D and training; and evaluation of the
effectiveness of IAEA safeguards and related regimes.

Milestone C1

C1.1 A pro-active
and useful contribution made to the development and effective implementation of
IAEAsafeguards, with national and international safeguards methods
evaluated in an expert and thorough manner.

C1.2 Assessment of
developments in nuclear technology.

C1.3 Contribution to
IAEA technical trainingcourses concerning nuclear material accountancy and control and
other safeguard-related topics

Activities

Australia took an active part in the development of
safeguards, through the following elements of work:

• participation
  in SAGSI(the
  Standing Advisory Group on Safeguards Implementation) and other international
  expert bodies (see below);
• the
  Australian Safeguards Support Program (ASSP), comprising R&D and
  consultancy work in support of IAEA safeguards (see Milestone C3 on page 36);
• field
  testing of new safeguards techniques and approaches in Australia on behalf of
  the IAEA;
• participation
  in relevant DFAT policy development activities, and support for Australias
  Mission to the IAEA in Vienna and to Australian Missions in other capitals; and
• promotion
  of safeguards and non-proliferation concepts through experts meetings,
  publications and conferences, and discussions with counterparts in other
  countries.

SAGSI

SAGSI is a group of international
experts, appointed by the IAEA Director General, to advise him on the
effectiveness and cost-efficiency of implementing IAEA safeguards, and other
international safeguards matters. Mr
Carlson has been a member of SAGSI since 1998.

SAGSI has provided much of the energy and vision for the
current program to strengthen IAEA safeguards and continues to review
developments. Some of SAGSIs work
during 2000-01 is outlined below. A key
topic for SAGSI is the development of integrated safeguards, that is, the optimal
combination of classical safeguards and strengthened safeguardsmeasures.
This is a matter
of the highest priority (for an outline of strengthened and integrated
safeguards see Current Topics). SAGSI
is examining specific subjects related to integrated safeguards, including
development of safeguards concepts and approaches, safeguards parameters,
evaluation methodologies, and quality systems.

During the year one major subject on which Australia took
the lead was a thorough review of the role of timeliness (e.g. frequency of
inspections) in integrated safeguards. Other topics examined by SAGSI included:

• safeguards
  implementation and performance issues, including reporting aspects, and
  information review and evaluation;
• the
  role of containment and surveillance measures, and the categorisation of
  nuclear material for safeguards purposes;
• further
  developments in safeguards, embracing wide area environmental sampling,
  safeguards approaches for spent fuel repositories, and the application of
  satellite imagery; and
• possible
  new verification roles for the IAEA, including with respect to nuclear
  materials released from weapons programs and the proposed FMCT(Fissile Material Cut-off Treaty).

Evaluation of safeguards

In evaluating IAEAs safeguards performance, ASNO drew on a
wide range of activities and sources, such as:

• the
  IAEAs Safeguards Implementation Report (SIR) and other detailed information
  made available to Australia as a member of the IAEA Board of Governors;
• appreciation
  of practical issues derived from participation in SAGSI and the operation of
  Australias Safeguards Support Program in support of IAEA safeguards; and
• exchanges
  of views and information with IAEA staff, ASNOs counterparts in other
  countries, and relevant Australian agencies.

ASNOs assessment of IAEA data for 2000 and related
information is that the safeguards system has fulfilled its task of verifying
the non-diversion of significant quantities of nuclear material subject to IAEA
safeguards (see IAEA Safeguards Statement for 2000, page 67). As in previous years, the IAEA experienced
some problems with equipment and procedures, but none was sufficiently serious
to prevent the Agency from reaching satisfactory conclusions from its
safeguards activities.

Other work

At several international conferencesincluding the Annual
Meeting of the INMM (Institute of Nuclear Materials Management) and the
European Safeguards Research and Development Association (ESARDA) SymposiumASNO took the opportunity to present and promote Australian ideas on
safeguards and non-proliferation developments. ASNO has a well-established reputation for presenting innovative,
constructive and thought-provoking papers.

ASNO has also been developing
outreach activities to assist countries in the region prepare for the
introduction of strengthened safeguards, and in June 2001 contributed to an IAEA/Japan Regional
Safeguards Symposium aimed at promoting the conclusion of further Additional
Protocols.

Performance Assessment

Australias participation in international work is making a
significant, effective and highly regarded contribution to strengthening the
IAEA safeguards system.

ASNO was involved closely with the IAEA through
participation in SAGSIand other
expert meetings. Under the Australian
Safeguards Support Program ASNO provided cost free consultancy services to the
IAEA for the further development of international safeguards (see Milestone C3
on page 36). The IAEA has expressed appreciation for and
satisfaction with these services. This
work has contributed to more effective international safeguards with improved
use of new technologies and methods.

ASNO has been an influential advocate for strengthened and
integrated safeguardsthrough participation in international fora such as the Institute
of Nuclear Materials Management (INMM) and the European Safeguards Research and
Development Association (ESARDA).

Developments in Nuclear Technology

Activities

There are indications that concern about climate change, as
well as uncertainty about long-term cost and security of supply for hydrocarbon
fuels, could lead to increased interest in nuclear energy. At present the capital cost of nuclear power
remains an issue, but there is growing interest in new reactor concepts, such
as the South African pebble bed modular reactor, which appear to be
significantly cheaper than light water reactortechnology. If the cost is
favourable, nuclear power could be adopted by a wider range of countries,
including in Australias region. If
nuclear power does become more widespread, plutonium recycling is likely to
increase, for spent fuel management as well as resource utilisation reasons
(see pages 60-64 of ASNOs 1999-2000 Annual Report). Australia has a strong interest in ensuring that
non-proliferation aspects are factored into developing technologies at an early
stageASNO is working to this end.

Amongst other activities in this area during the year, ASNO
participated in the IAEAs INPRO (International Project on Innovative Reactors
and Fuel Cycle) steering committee. ASNO is taking a particular interest in the pebble bed reactor, which
may be the first of the current innovative designs to be commercialised, and
will be assisting the IAEA in a safeguards analysis of this reactor type.

Performance Assessment

Although Australia is not directly involved in substantial
nuclear technology developments, ASNO has maintained a sound understanding of
important developments and issues and is making a constructive contribution to
ensuring non-proliferation and safeguards aspects are fully taken into
account.

IAEA safeguards trainingcourses

Activities

During the year substantial
preparations were made for a safeguards training course aimed at assisting the
DPRK to develop its national safeguards system. Mr Downer offered this course to the DPRK in discussions with
his counterpart in November 2000. Subsequently the DPRK indicated it would nominate six safeguards
officials for the course. The course
was developed in consultation with the IAEA, and funding was provided by AusAID.
Participation was broadened to include China, Indonesia, New Zealand and
the ROK, as well as some Australians. The course (which was highly successful) was held outside the
reporting period^[1],
and will be covered in ASNOs 2001-02 Annual Report.

In addition ASNO was invited to
assist in a regional safeguards training course held in Japan by the Japan
Atomic Energy Research Institute in March 2001. Mr Doulgeris presented two lectures to this course.

Performance Assessment

Through involvement in regional training activities on
nuclear safeguards, ASNO has made an effective contribution to the IAEAs
training programs designed to: improve the technical performance of safeguards
authorities in the region; promote a fuller understanding of the IAEA
Additional Protocol; and enable a better appreciation of the work of the IAEA.
An important additional benefit
has been strengthened relationships with counterparts in the region.

Milestone C2

Highly effective liaison maintained with the IAEA and with
counterparts in other countries

Activities

ASNO is pro-active in maintaining and strengthening contacts
with the IAEA, other safeguards agencies and international safeguards
practitioners. Relevant activities
during the year include:

• In
  June 2001, Mr Carlson and Dr Ridwan, Chairman of the Indonesian Nuclear Energy
  Control Board (BAPETEN), signed a Memorandum of Understanding (MOU) between
  their respective agencies (see Annex I.3). The MOU formalises longstanding cooperation in areas of non-proliferation;
  helps promote strengthened safeguardsarrangements regionally; and facilitates cooperative activities
  including exchanges of scientific staff, training and joint R&D projects
  for nuclear safeguards.
• With his counterparts in
  Indonesia, Japan and the ROK and Japan, Mr Carlson is exploring ways of
  strengthening regional cooperation on safeguards matters. One concept under consideration is an
  informal association of safeguards agencies to facilitate cooperation and promote
  a safeguards culture.
• At
  the specific request of Indonesia, Mr Bellinger participated in an IAEA review
  of physical protectionat nuclear facilities in Indonesia. On behalf of Member States, the IAEA coordinates the International
  Physical Protection Advisory Service (IPPAS) which provides advice and
  assistance for strengthening and enhancing security arrangements at nuclear
  facilities. The IPPAS mission visited
  the three nuclear sites in Indonesia. This visit further strengthened ASNOs links with its Indonesian
  counterpart, BAPETEN.
• Senior
  US experts visited Australia in March 2001 for detailed discussions on
  strengthened and integrated safeguards issues.
• Participation
  in international conferences, IAEA meetings and the Regional Safeguards
  Symposium.
• Extensive discussions with senior IAEA officials (including
  the Director General, Dr ElBaradei and the Deputy Director General for
  Safeguards, Dr Goldschmidt) and with counterparts in Euratomand ABACC(Argentine-Brazilian Safeguards Agency), as well as with senior
  officials of several governments and industry representatives, from Canada,
  Finland, France, Indonesia, Japan, ROK, Sweden, the UK, and the US.

Performance Assessment

ASNO has achieved highly effective links with the IAEA and a
wide range of safeguards organisations and regional counterparts. Through such links ASNO is abreast of
developments and emerging problems in safeguards. ASNO has been effective in promoting Australian thinking on a
range of safeguards and associated issues, contributing to resolving issues of
safeguards concern, and ensuring that its work program is relevant to the
international non-proliferation agenda.

ASNO has been able to give the Government sound advice on
nuclear safeguards, both internationally and from a domestic perspective.

Milestone C3

Efficient performance and management of a technical R&D
program, supporting the development and enhancement of IAEA safeguards

Activities

The resources available to the IAEA are not sufficient to
allow all necessary safeguards R&D programs to be conducted
in-house. Safeguards are an evolving
discipline and ASSPthe Australian Safeguards Support Programis intended to assist
the IAEA develop the equipment and procedures needed to meet new challenges in
a cost-effective way.

ASSP, coordinated by Dr Bragin, incorporates consultancy
work, analysis, and the development of equipment and procedures. The program embraces safeguards projects
formally agreed directly with the IAEA. It also covers collaborative work with ASNOs counterparts and expert
groups.

This program is not only an important tangible expression of
Australias support for IAEA safeguards, but plays a major role in maintaining
ASNOs technical expertise and appreciation of the practical issues confronting
the safeguards system. Fifteen formal
Member State Support Programs are currently in operation, with an aggregate
annual budget of over US$20 million. In
dollar terms, ASSP is very modestthis year about $152,000. This includes
$72,000 for direct expenditure relating to consultancy services and
participation in SAGSI, but excludes monies spent by other Commonwealth
agencies on ASSP projects, and also excludes indirect costs such as time spent
by ASNO officers.

ASNO has a long-standing
safeguards R&D agreement with the US Department of Energy (DOE). This year further work was carried out with
US colleagues on the development of a remote monitoring system for safeguards
purposes at ANSTO's Lucas Heights facilities, but this work has been suspended
while the IAEA further considers the contribution remote monitoring might make
to the integrated safeguardsapproach at Lucas
Heights. ASNO and DOE are examining what
other collaborative projects might be carried out under this agreement. Also this year ASNO has explored options for
collaborative projects with the Institute for Transuranium Elements in Germany,
and ideas are being examined for collaboration with Indonesia under the
ASNO-BAPETEN MOU.

One major project in ASSPanalysis of environmental
samplesis carried out by ANSTO. ASNO is continuing to discuss with ANSTO other safeguards R&D
work which strengthen ANSTOs non-proliferation program.

Details of ASSP projects are summarised at Annex G.

Performance Assessment

The results of several projects progressed and completed
under the Australian Safeguards Assistance Program have been incorporated in
the practices of the IAEA in 2000-01. The IAEA has expressed appreciation for the valuable and vital
contribution provided to the Agencys safeguards efforts under the Australian
Safeguards Support Program.

Milestone
C4

Completion of work undertaken by the Informal Open-Ended
Experts Meeting convened to discuss whether there is a need to revise the
Convention on the Physical Protection of Nuclear Material (CPPNM).

Activities

Between them, Messrs Bellinger and Leask attended three
Experts Meetings in Vienna. In
conjunction with delegations from like-minded states, they were effective
advocates for the case that revision of the CPPNMsuch that its provisions
apply to domestic use, storage and transportis a critical element in
strengthening the physical protection of nuclear materials worldwide. Although the Experts Meeting was unable to
achieve consensus on the specific issue of revision, at its plenary meeting in
May 2001 it did agree by consensus to recommend to the Director General of the
IAEAthat he
initiate the next step toward revision, namely to convene a technical and legal
experts group to draft a well-defined amendment to the CPPNM. A likely scope for this well-defined
amendment was drafted by the Experts Meeting.

The Experts Meeting also agreed
to Physical Protection Objectives and
Fundamental Principles, along the lines of the Nuclear Safety Convention
(see Annex L).

Performance Assessment

A good outcome was achieved from the Experts Meeting:
consensus was reached for convening a technical and legal experts group to
draft a well-defined amendment to the CPPNM; the scope of such an amendment was
drafted; and a document on Physical
Protection Objectives and Fundamental Principles, to underpin revision
of the Convention, was also drafted.^[2]