The system of safeguards developed
to give effect to the full scope safeguards commitment under the NPT is
commonly described as the classical system. Classical safeguards are directed primarily at the detection of diversion,
that is, the undeclared removal of nuclear material from safeguards
coverage. The IAEAhad not been expected to look for undeclared nuclear
activities, except as these would be revealed through diversion. While the IAEA has the right of special
inspection, which can be applied to undeclared as well as declared
locations, it was generally considered that it should not be invoked unless
there was substantial evidence of a safeguards breach.

The discovery of Iraqs clandestine
nuclear program, following the Gulf War, indicates the more likely course for a
proliferator: not only is diversion of safeguarded material unattractive
because of the likelihood of detection, but in fact there are limited opportunities
to divert weapons grade materials because these are unusual in civil
programs. Accordingly, in most
circumstances a state pursuing a weapons program would need to establish
nuclear upgrading capabilities-enrichmentor reprocessing. If the
state is able to do this clandestinely, it is unlikely to risk detection by
diverting safeguarded nuclear material.

Thus events in Iraq have shown that
for safeguards to continue their key confidence-building role, it is essential
to adequately address the issue of detection of undeclared nuclear
activities. At the same time,
safeguards must become more efficient, so as to manage an expanding workload
within budget constraints.

Shortcomings in classical safeguards

The principal weakness in standard
safeguards agreements is the limitation placed on the IAEAs access for routine
safeguards inspections. Broadly
speaking, Agency inspectors are restricted, not just to nuclear facilities, but
to defined strategic points within those facilities. Iraq had been able to take advantage of this
restriction-it was found later that some clandestine activities had even
been undertaken on safeguarded sites, away from the strategic points where
Agency inspectors could go. A related
deficiency was the lack of any mechanism by which the body of information which
was accumulating regarding Iraqs interest in nuclear weapons could be
reflected in any additional verification activity.

Addressing these shortcomings

From the early
1990s, the IAEA, with the assistance of Member States (Australia is an active
participant), has been engaged in a major undertaking to strengthen and
streamline the safeguards system. From the outset, it was recognised that under a strengthened safeguards
system the IAEA would need:

• greater
  access rights, both at declared nuclear sites and to other places in the
  statebut, unlike special inspections, access should be available on a
  non-accusatory, hence non-confrontational, basis;
• greater
  capabilities to acquire and analyse information; and
• deployment
  of new technologies, particularly environmental analysis.

The principal
directions of this work are to:

• shift
  the focus from declared inventories and flows of nuclear material at individual
  facilities, towards safeguards approaches based on evaluation of the state as a
  whole;
• provide
  credible assurance of the absence of undeclared nuclear material and activities
  in the state; and
• diversify
  the methods of detection-resulting in a more robust safeguards system.

By 1995 the IAEA and Member States
had developed a detailed outline of strengthened safeguards measures. There was general acceptance that certain of
the measures proposed could be carried out under existing safeguards
agreements, and the IAEA Board of Governors endorsed the implementation of these
in 1995. Important aspects include use
of environmental sampling at nuclear sites, and use of unannounced
inspections. The latter, which have
substantial deterrent value because they are unpredictable to the state and
operator, are expected to feature prominently in strengthened and integrated
safeguards, and the IAEA is currently developing guidelines for their effective
use.

For certain other measures
additional legal authority was necessary and a new legal instrument,
complementary to existing safeguards agreements, was established. This took the form of a model Additional
Protocol, to serve as the model for each state to conclude an individual
protocol additional to its safeguards agreement with the Agency. The text of the model Additional Protocol
was agreed by the Board of Governors in May 1997. Australia played a major role in the negotiation of the
Additional Protocol and was the first state to sign and to ratify an Additional
Protocol.

Strengthened Safeguards System

Key
aspects of the strengthened safeguards system, of which the Additional Protocol
is a central element, are:

• The
  IAEA receives considerably more information on nuclear and nuclear-related
  activities, including through an Expanded Declaration by each state and
  widened reporting requirements. This
  includes, inter alia, information on
  nuclear-related R&D activities, production of uranium and thorium,
  production of heavy water and graphite, and nuclear-related imports and
  exports.
• IAEA
  inspectors have substantially increased access rights, termed complementary
  accessto:
  • anywhere on a nuclear site;
  • various locations included in the Expanded Declaration;
    and
  • locations elsewhere in the state to carry out
    environmental sampling and other verification measures.

At
nuclear sites and certain locations listed in the Expanded Declaration the
Agency has right of access to confirm that there is no undeclared nuclear
material or activities at those places. Access on nuclear sites can be short-notice, two hours or less, if
carried out with a routine or other inspection. Elsewhere access is given to enable the Agency to resolve any
question or inconsistency arising from its information review. The state may require that access be on a
managed basis to protect certain categories of information.

• Environmental
  sampling is initially to be location-specific, but the Protocol recognises
  the possibility of using wide-area environmental sampling, looking for
  nuclear indications over extensive areas, once the efficacy of this technique
  has been established.
• Information analysis and the conduct of complementary
  access are to be used to establish a State Evaluation, that is, the IAEA
  applies its safeguards approaches and draws its conclusions on the basis of the
  state as a whole.

Substantial work has been undertaken, and is ongoing,
developing the approaches and procedures, technologies, quality systems,
evaluation methodologies and reporting required to ensure that the strengthened
safeguards system will be effective in practice. As outlined elsewhere in this Report, Australia is actively
involved in this process.

Some of the technical approaches
under development include:

• environmental
  analysisthis is a very powerful safeguards tool, the value of which was first
  demonstrated in Iraq. Nuclear
  activities leave indicatorsminute traceson building surfaces, in plants and
  soil, in water, and in the air. Detection of such traces can indicate the existence of undeclared
  nuclear activities;
• remote
  surveillancethe use of video cameras and instruments to monitor nuclear
  facilities, transmitting safeguards data to IAEA headquarters by telephone,
  satellite, and potentially the internet;
• use
  of satellite imagerythough currently too expensive for covering wide areas,
  this can be valuable for specific applications, such as investigating suspect
  sites, confirming the operating status of facilities, and possibly assessing
  production levels of uranium mines.

Integrated
Safeguards

While the implementation of strengthened safeguards is
progressing, the focus has already turned to integration, that is, how to merge
classical safeguards and strengthened safeguards to give the most effective and
cost-efficient outcome. Integrated safeguards do not
represent a separate system of safeguards, but rather a rationalisation of
classical and strengthened safeguards measuresthe optimum combination of all
safeguards measures available to the IAEA under comprehensive safeguards
agreements and Additional Protocols which achieves the maximum effectiveness and
efficiency within available resources.

Under
classical safeguards, the level of verification effort takes into account the
possible existence of clandestine nuclear activities. The timeliness goal for detection of diversion of spent fuel
incorporates the assumption that an undeclared reprocessing plant may exist
ready for processing diverted material immediately after diversion. Thus, the inspection frequency for spent
fuel at light water reactorsthree monthscorresponds to the
conversion time, i.e. the time required to reprocess spent fuel and
manufacture the separated plutonium into weapon components.

The basis
of integrated safeguards is that classical and strengthened safeguards are
mutually reinforcing and to some extent redundantas strengthened safeguards
establish credible assurance of the absence of undeclared nuclear activities, a
corresponding reduction is possible in the intensity of classical safeguards
effort. For example, if there is
credible assurance that a state has no undeclared reprocessing plant, the time
required for conversion of diverted spent fuel will be extended by the very
considerable time required to establish such a facility, and this can be
reflected in a reduced inspection frequency for spent fuel, from three months
to, say, 12 months.

Conclusions

The
development of strengthened safeguards measuresand even more so the
development of integrated safeguardsis very much a work in progressinevitably
the approaches developed will require refinement in the light of practical
experience.

Major
issues being addressed include, how to ensure the verification activities
undertaken by the IAEA are sufficient to support a credible conclusion of the
absence of undeclared nuclear activities. This involves both establishing the appropriate methodology and ensuring
the methodology is implemented at an appropriate quality standard. An important group of issues concerns how to
implement integrated safeguards in a flexible manner, based on state-specific
factors, incorporating the expert judgment of the Agency, in a way that avoids
discrimination, and delivers the required credibility.

The difficulties encountered in Iraq in the 1990s, where
there was a very intrusive verification regime following the Gulf War, show
that detection of undeclared nuclear activities is not an easy task. On the other hand, compared with individual
states, the IAEA has considerable advantages to build on in pursuing this task.
In addition to its expertise, the Agency
will have comprehensive information bases, extensive access rights (the ability
to get under the roof), and increasingly sophisticated verification
methods.

As the strengthened safeguards system develops and
experience is gained, it can be expected to make a major contribution to
international confidence-building. Australia will continue to be a strong supporter of this process.