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former IAEA Director-General

The Nuclear Fuel Cycle: Is It Time for a Multilateral Approach?
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Tariq Rauf and Fiona Simpson

The continuing spread of nuclear technology, along with the emergence of clandestine nuclear supply networks, has led to discussion on revisiting multinational approaches to the nuclear fuel cycle. The idea had been explored in the 1970s and 1980s but failed to win approval. However, it has gained a new relevance recently amid several new and serious challenges to the nuclear nonproliferation regime: the discovery of Iran’s uranium-enrichment program, which is now subject to International Atomic Energy Agency (IAEA) safeguards or verification; Libya’s December 2003 admission and renunciation of its clandestine nuclear-weapon development program; and the admission by Abdul Qadeer Khan, the “father” of Pakistan’s nuclear weapon program, that he had organized a clandestine network to supply Iran and Libya, as well as North Korea, with uranium-enrichment technology.

These events have led to a rethinking of how the 1968 nuclear Nonproliferation Treaty (NPT) and the related nuclear nonproliferation regime might be reinforced. The NPT remains the world’s most adhered-to multilateral arms control treaty, currently with 189 states-parties, the only holdouts being India, Israel, and Pakistan.[1] It is based on an inherent, intricate, and interlinked three-part bargain: all states-parties that did not have nuclear weapons prior to January 1967 are required to renounce any ambitions for developing or possessing nuclear weapons. Furthermore, although these states-parties may use nuclear material and technology exclusively for peaceful purposes, they are required to subject their nuclear material and activities to IAEA verification, and nuclear-weapon states are required to pursue measures to achieve nuclear disarmament at an early date. In addition, several NPT states-parties that are the principal suppliers or transshippers of nuclear material and technology are administering export controls as required under the NPT regime (the Zangger Committee) or to supplement the regime (the Nuclear Suppliers Group).

Two basic approaches have been put forward; both seek to ensure that the nuclear nonproliferation regime maintains its authority and credibility in the face of these very real challenges. One calls for the further denial of technology to non-nuclear-weapon states and the reinterpretation of the NPT’s provisions governing the transfer of nuclear technologies. It is unlikely to succeed in light of lowered technical barriers to the development of sensitive technology and the increasing unwillingness of many non-nuclear-weapon states to accept additional restrictions to their right to peaceful nuclear technology under the NPT. The other approach would use multinational alternatives to national operations of uranium-enrichment and plutonium-separation technologies, and to storage of spent nuclear fuel.

The first to propose a fresh look at multilateral approaches was IAEA Director-General Mohamed ElBaradei. Addressing IAEA member states at the September 2003 General Conference, ElBaradei said that such approaches, based on improved nuclear technology control, greater operational transparency, and nuclear fuel and power plant supply assurances, could serve to strengthen the nuclear nonproliferation regime while not impeding the development of nuclear energy for states wishing to choose that option.

ElBaradei’s proposal put forward the possibility of supplementing and thereby strengthening the nonproliferation regime by re-examining the need for each state-party to control all aspects of the nuclear fuel cycle, particularly with respect to the uranium enrichment and plutonium separation and the storage and disposal of spent nuclear fuel. Thus, the regime could be strengthened by placing these technologies under some form of multilateral or multinational control.[2] To explore this idea, an independent expert group has been set up at the IAEA to consider possible multilateral approaches to the nuclear fuel cycle. This group will submit a report to ElBaradei in the spring of 2005.

Old Regime, New Challenges
When the NPT entered into force in 1970, sensitive nuclear technology was widely considered out of the reach of most countries. This is clearly no longer the case. Access to such technologies has increased particularly over the last few years. As many as 40 countries may now have the technical know-how required to produce nuclear weapons, and the legal regime has not kept pace with these technological developments.

In the absence of an enhanced legal regime, the sole remaining and somewhat fragile barrier to development of nuclear weapons may be a state-party’s assessment of its security situation and requirements. Such considerations are rarely fixed but alter over time. In the face of external events, a country that now has no interest in incorporating nuclear weapons into its security doctrine may one day decide otherwise. One of the fallacies of the so-called good guys/bad guys distinction is that occupants of these categories may move from one to the other. Betting on future nonproliferation solely on the basis of the current benign intentions of states-parties dangerously narrows the margin of security.

Can the NPT Be Altered?

One straightforward option for strengthening the nonproliferation regime involves altering the NPT itself, whether de facto or de jure. In particular, some have suggested reinterpreting existing NPT language that guarantees non-nuclear-weapon states the right to pursue nuclear technology exclusively for peaceful purposes if they forgo nuclear weapons (Article II) and submit to IAEA safeguards (Article III). Such an approach, however, is unrealistic.

Article IV of the NPT has two interconnected elements. The first reaffirms the inalienable right of all NPT parties “to develop research, production, and use of nuclear energy for peaceful purposes, without discrimination and in conformity with Articles I and II of this Treaty.” The second is a reaffirmation that “[a]ll the Parties to the Treaty undertake to facilitate and have the right to participate in the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy” and places an obligation on the parties to “cooperate in the development of nuclear energy for peaceful purposes,” especially in the territories of non-nuclear-weapon states-parties, with due consideration for the needs of the developing areas of the world.

Article IV was specifically crafted to preclude any attempt to reinterpret the NPT so as to inhibit a country’s right to peaceful nuclear technologies as long as the technology is not used to produce nuclear weapons. Moreover, there is no formal mechanism for reinterpretation of the NPT. Any reinterpretation would probably have to occur through a consensually agreed decision at a review conference, which occurs every five years. This is how some past decisions and documents, which have not sought to alter any of the articles of the treaty but to provide benchmarks for implementation, were approved, such as at the 2000 Review Conference, where the states-parties agreed to take 13 practical steps to demonstrate their progress in implementing Article VI of the NPT.

Past experience, however, does not bode well for using such an approach. Some non-nuclear-weapon states have expressed frustration, for example, that some nuclear-weapon states such as the United States and Russia have backed away from the 13 steps. Given this history, it is unlikely that a reinterpretation of Article IV would hold or that an agreement on reinterpreting the NPT could be reached in the first place.

More broadly, the non-nuclear-weapon states would be disinclined to contribute to what many of them increasingly view as the growing imbalance in the NPT. They believe the nuclear-weapon states have backed away from their original guarantee that the non-nuclear-weapon states would enjoy “the right to participate in the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy,” as well as the right to receive assistance in this arena from “Parties to the Treaty in a position to do so.” The increasing concerns that the states-parties “in a position to do so” are not only no longer doing so but are placing still more restrictions on supply have fostered a belief among many non-nuclear-weapon states that the NPT bargain is being corroded.

The Limitations of a Denial Approach

Cognizant of these difficulties, a related but somewhat narrower approach has been advanced by President George W. Bush and British Foreign Secretary Jack Straw. In February, Bush told an audience at the National Defense University that “enrichment and reprocessing are not necessary for nations seeking to harness nuclear energy for peaceful purposes.” In view of this, he proposed that the 44-nation NSG “should refuse to sell enrichment and reprocessing equipment and technologies to any state that does not already possess full-scale, functioning enrichment and reprocessing plants.”

This approach also found voice in a proposal the same month from Straw, who questioned whether states that fail to comply with their safeguards obligations “should not forfeit the right to develop the nuclear fuel cycle, particularly the enrichment and reprocessing capabilities which are of such proliferation sensitivity.” The Straw proposal went on to suggest that “this does not mean that they would be deprived of the possibility of constructing and running civil nuclear power stations. These could still operate with fuel supplied by countries honoring their safeguards obligations.” Even though the Straw proposal is closer to the multilateral approach suggested by ElBaradei, both the Straw and the Bush proposals proceed from the basis of a denial of certain nuclear technologies.

Yet at the same time, the demand for nuclear energy and related technologies has continued and even risen as countries seek to add nuclear power to their energy mix to reduce their reliance on fossil fuels and in the future to meet their Kyoto Protocol carbon emission reduction quotas.

In this world, export controls, such as those of the NSG, serve as a useful but only temporary barrier to further proliferation. They are inadequate to address the most severe proliferation challenges as they rely on informal, nonbinding arrangements that are far from universal. Moreover, in recent years the spread of nuclear technology has been facilitated by clandestine nuclear supply networks ostensibly out of the control of governments.

These networks are easily established in response to the continuing and rising demand for nuclear technology. Current media attention has focused on A. Q. Khan and his international associates, but it should not be forgotten that similar networks also supplied Iraq prior to 1991. These networks appear to have encompassed companies and entities in more than 30 countries, ostensibly without the knowledge of their governments, including members of nuclear export control bodies such as the Zangger Committee and the NSG.

Indeed, the attempt to place ever more restrictions on supply may well have contributed indirectly to the emergence of clandestine nuclear supply networks. Iran, for example, has claimed that it was forced to turn to clandestine sources to meet its needs for civil nuclear technology when more open sources were shut off.

The concerns evoked by these clandestine networks, the availability of and increasing access to nuclear technology, and the possibility that some countries may be tempted to use such technology for nonpeaceful purposes cannot be ignored, particularly given past evidence of some countries not complying with their safeguards obligations. Consequently, it seems the time has come for new thinking or, to be more accurate, for a re-exploration of some old thinking in the light of new challenges.

Pros and Cons of a Multilateral Approach
ElBaradei’s initiative in the fall of 2003 attempted to jump-start this debate.[3] He did not set out a detailed plan but suggested a few guidelines: He said that any such venture would require proper rules of transparency and, crucially, assurance that legitimate users could obtain access to nuclear fuel for peaceful uses.

The potential benefits of such an approach for the nonproliferation regime are symbolic and practical. As a confidence-building measure, multilateral approaches have the potential to provide enhanced assurance to the international community that the sensitive portions of the civilian nuclear fuel cycle are less vulnerable to weapons proliferation, without singling out “good” and “bad” countries. If implemented, these measures may also have the potential to facilitate the continued use of nuclear energy for peaceful purposes and enhance the prospects for the safe and environmentally sound storage and disposal of spent fuel and radioactive waste.

The inherent proliferation risks of enrichment and reprocessing technologies could be reduced by having more than one country involved in their operation, because any country that sought to break out of its NPT commitments would not only be choosing to violate the will of the international community but potentially forcing a confrontation with another state or states that might not want to choose such a course.

In addition, such approaches could strengthen nonproliferation norms by requiring nuclear verification and security and safety measures that go beyond existing international agreements and conventions. The partners in such endeavors could conceivably allow IAEA inspectors “any time, anywhere” access rights, in addition to the use of any verification technologies deemed necessary by the agency, as well as other agreed confidence-building measures.

Multilateral approaches would provide benefits of cost-effectiveness and economies of scale for smaller countries or those with limited resources while providing the benefits of the products of nuclear technology, i.e., nuclear fuel for power plants and subsequent storage of spent fuel. Similar benefits have accrued in other high-technology and high-security sectors, such as aerospace and high-speed computing.

The argument, however, is not straightforward. Opponents of multilateral approaches point to loss or limitation of state sovereignty and independence of ownership or control over a key technology sector. Countries with differing levels of technology, institutionalization, political relationships, economic development, resources, or requirements might find multilateral approaches inconvenient, unfeasible, restrictive, or simply not beneficial. Other might argue that multilateral approaches could lead to further dissemination or loss of control over sensitive nuclear technologies and to weaker nuclear security and safety standards.

To be sure, if all sensitive technology is available to all participants in a multilateral arrangement, then there is no benefit to be gained. To guard against this, multilateral efforts must come with some restrictions in order to avoid the risks of sensitive technology transfer. Within a multilateral context, however, this can be done at a larger stage than unilateral denial policies, allowing countries greater access to truly peaceful nuclear technology while discouraging them from developing independent national programs either overtly or covertly that can lead to weapons development. To meet the twin objectives of nonproliferation and “multilateralization,” nuclear facilities can be provided to partners in a “black box” mode, i.e., the technology holders construct and operate facilities that are managed and operated multilaterally, without technical know-how being disseminated.

Any viable future multilateral approach will require states-parties with nuclear weapons to set an example by using their enrichment and reprocessing plants to provide nuclear fuel to other states that have eschewed these technologies. Assurances of supply will need to be devised in a manner that is commercially competitive, avoids monopolistic situations, and provides for back-up supply in the event that some suppliers might be unable to provide the required services for whatever reason.

Conclusion
Most observers agree that the new challenges to the nuclear nonproliferation regime require a fresh response. Any attempt to strengthen the regime by further denial of technology, however, holds little likelihood of success. A new look at multinational approaches to the nuclear fuel cycle is clearly in its infancy, and its progress dependent mainly on political will.

Still, despite the disappointments of past initiatives of this kind, such ideas merit serious consideration. It may be that new thinking on an old idea holds out the promise of a strengthened and relevant regime, one that is able to cope with contemporary and future challenges.

ENDNOTES

1. According to the February 12, 2003 Resolution adopted by the IAEA Board of Governors, North Korea’s nuclear Nonproliferation Treaty (NPT) safeguards agreement remains in force and is binding. The 2003 and 2004 sessions of the Preparatory Committee for the 2005 NPT Review Conference remained silent on the matter of North Korea’s NPT withdrawal. Neither the UN Security Council nor the NPT depository states, as far as is known, have rendered any definitive opinion regarding North Korea’s withdrawal from the treaty.

2. The terms “multilateral” and “multinational” are used in a broad sense to refer to arrangements beyond solely national control.

3. For an outline of these proposals, see “Curbing Nuclear Proliferation: An Interview With Mohamed ElBaradei,” Arms Control Today, November 2003, pp. 3-6.


Not the First Time: The Long History of Multinational Approaches to the Nuclear Fuel Cycle

The idea of a multilateral approach to the fuel cycle is not new. Soon after the nuclear age began, the United States unsuccessfully advanced a proposal for multinational control of the nuclear fuel cycle: the 1946 Baruch Plan. Named for U.S. diplomat Bernard Baruch, the plan called for states to transfer ownership and control over civil nuclear activities and materials to an international development agency. In 1953, President Dwight D. Eisenhower unveiled his Atoms for Peace plan, which laid the groundwork for the establishment of the International Atomic Energy Agency (IAEA).

The real heyday for such explorations was the second half of the 1970s and the early 1980s. After India conducted a “peaceful” nuclear test in 1974, concerns grew that other countries could follow India’s example and use their civilian nuclear program and plutonium reprocessing technologies to build nuclear weapons. Yet at the same time, countries wished to solve this problem within the context of the newly minted nuclear Nonproliferation Treaty (NPT), which sought to assure all states that they would be permitted to use nuclear energy for peaceful purposes under IAEA safeguards.

Out of such concerns, the first feasibility study on multilateral approaches to the nuclear fuel cycle was undertaken. The Regional Nuclear Fuel Cycle Centres (RFCC) study of 1975-1977 was created to provide a forum for countries to examine the possibility of joining together to set up fuel cycle centers at selected sites. In keeping with contemporary concerns, the emphasis in this and other studies of the time was on the back end of the cycle, specifically reprocessing and plutonium containment. Although the RFCC study drew some favorable conclusions regarding the technical viability of such an endeavor, it also highlighted some potential problems, among them the risks of technology transfer and the interrelated difficulties of providing assurances of supply to all stakeholders, including making provisions for the possibility of host-country withdrawal or interference.

The International Nuclear Fuel Cycle Evaluation (INFCE) study of 1977-1980, which among other things touched upon the possibility of regional fuel-cycle facilities and prospects for multilateral cooperation on plutonium storage, came to similarly positive technical conclusions. However, due in large part to diminishing concerns over the likelihood of a “plutonium economy,” the disinclination of some countries to give up national control over reprocessing, and the general lack of political will, neither the RFCC or INFCE studies resulted in any further pursuit of multilateral approaches.

The IAEA Expert Group on International Plutonium Storage (IPS), the next initiative in the field, moved away from the discussion of regional fuel-cycle centers to examine instead the prospects for IAEA-supervised management, storage, and disposition of spent nuclear fuel. Once again, no consensus was reached as states were unwilling to renounce sovereign control over nuclear technology and fuel. The same fate met the studies undertaken by the IAEA Committee on Assurances of Supply (CAS) in 1980. After seven years, 21 sessions, and little or no agreement among the participants, CAS went into formal abeyance, where it remains.

The efforts that began in the 1970s in the area of multilateral approaches finally ended with the UN Conference for the Promotion of International Cooperation in the Peaceful Uses of Nuclear Energy (with the rather unwieldy acronym UNCPICPUNE) in 1987, but like its predecessors, it yielded little in the way of concrete results in this regard.




U.S. Nuclear Trade Restriction Initiatives Still on Hold

By Wade Boese

In a Feb. 11 speech setting out his agenda for checking nuclear proliferation, President George W. Bush called on a voluntary group of nuclear suppliers to implement two proposals to limit the spread of materials and technologies that could be used to make nuclear weapons. To date, neither has been adopted.

Bush urged the Nuclear Suppliers Group (NSG), whose 44 members seek to coordinate their nuclear trade policies, to add two export guidelines. One proposed regulation would deny transfers of enrichment and reprocessing technologies to countries without functioning facilities for these activities. Such facilities can be used to produce fuel for civilian power reactors or key ingredients for nuclear weapons.

The other new restriction would block any nuclear-related trade unless a recipient had ratified an additional protocol to their safeguards agreement with the International Atomic Energy Agency (IAEA). Additional protocols grant the IAEA broader authority to verify that a recipient’s nuclear activities are confined to peaceful pursuits.

Putting a cap on the spread of enrichment and reprocessing technologies has generated “substantial concerns” among NSG members, according to a U.S. government official interviewed Nov. 19 by Arms Control Today. Several members question whether a blanket denial of specific technologies is consistent with the nuclear Nonproliferation Treaty (NPT) provision to allow non-nuclear-weapon states “the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy.”

Countries are particularly anxious to forestall what may well prove to be a divisive debate at this May’s NPT Review Conference (see page 6). In addition, some EU countries contend that such a rule might conflict with the general EU policy of free trade among EU members.

Limiting nuclear trade to countries that have ratified an additional protocol has met less NSG resistance, but the group operates by consensus, so the initiative remains stalled. Argentina and Brazil, neither of which has adopted an additional protocol, assert that this criterion should be voluntary. Russia and at least one additional country have argued against tying all nuclear trade to a recipient ratifying an additional protocol. Instead, they advocate that such a restriction be limited to enrichment and reprocessing transfers.

U.S. officials intend to continue to press Bush’s proposals at the NSG. The next decision-making meeting of the group is scheduled for June in Oslo.

Although Bush has seen his proposals stymied so far at the NSG, the president succeeded in getting the more select Group of Eight to agree to a one-year moratorium on new deals involving enrichment and reprocessing technologies. (See ACT, July/August 2004.) This group includes Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States.

Tariq Rauf is Head of Verification and Security Policy Coordination, and Fiona Simpson is an External Relations and Policy Coordination Officer, at the International Atomic Energy Agency (IAEA). The views expressed here are personal and do not necessarily represent those of the IAEA.

Posted: December 1, 2004