Australia: Uranium Sales To India – A Change In Australia’s Uranium Exports Policy

Last Updated: 11 September 2007
Article by Chelsey Evans and Georgia Quick

Federal Government approval

The National Security Committee of Australia's Federal Cabinet met last week to discuss the export of uranium to India. The Committee decided to allow uranium sales to India, subject to certain conditions. This decision has already been relayed by Australia's Prime Minister, John Howard, to his Indian counterpart, Manmohan Singh.

The Federal Government's decision to support the sale of uranium to India, subject to the negotiation of a bilateral safeguards agreement amongst other things, represents a significant change in Australia’s uranium export policy. India is one of only four countries which is not a party to the international Nuclear Non-Proliferation Treaty ("NPT") and few of India’s nuclear facilities are subject to International Atomic Energy Agency ("IAEA") safeguards.

Australia’s uranium exports policy

For a long time, it has been Australia’s uranium export policy that:

  • Australian uranium may only be exported for peaceful non-explosive purposes under Australia’s network of bilateral safeguards agreements; and
  • Australia will only enter into a bilateral safeguards agreement with a customer country that, at a minimum, is a party to the NPT and has concluded a full scope safeguards agreement with the IAEA.

This policy is not, however, set out in any Australian legislation.

Australia’s uranium export policy is implemented primarily via the Customs (Prohibited Exports) Regulations 1958 (Cth). These Regulations prohibit the export of uranium unless permission in writing, or an export permit, has been granted by the Minister for Industry, Tourism and Resources.

An export permit has been granted to each of Australia’s three operating uranium mines. The Department of Industry, Tourism and Resources ("ITR") uses the permit conditions to maintain control over specific uranium exports by requiring the permit holder to obtain approval from the ITR and the Australian Safeguards and Non-Proliferation Office ("ASNO") for each proposed export of uranium on an individual basis. The decision whether or not to approve an export of uranium is made by the ITR and ASNO based on the government’s uranium export policy.

Because Australia’s uranium export policy is not enshrined in legislation, it can (legally at least) be easily changed to allow uranium sales to India. Australia however also has voluntary obligations as a member of the Nuclear Suppliers Group ("NSG") which must be considered. These obligations are discussed later below.

India & the NPT

The NPT, which came into force in 1970, has almost universal international support. The only states which have not joined the NPT are India, Israel and Pakistan. North Korea is a signatory to the treaty, but claims to have withdrawn from it.

Under the NPT, a distinction is made between countries that had manufactured and exploded a nuclear weapon before 1967, referred to as the nuclear weapon states, and those that had not, referred to as the non-nuclear weapon states. Nuclear weapon states and non-nuclear weapon states have significantly different obligations under the NPT.

India did not become a signatory to the NPT when it was created because of a perceived need to develop nuclear weapons in light of its acrimonious relationship with Pakistan, who also had a nuclear weapons program. Because India did not explode its first nuclear device until 1974, it is considered a non-nuclear weapon state for the purposes of the NPT. In order for India to join the NPT, it would need to renounce and dismantle its nuclear weapons program and accept safeguards over all its nuclear activities facilities (as South Africa did in 1991). To date, because of concerns about the nuclear capability of China and Pakistan, India has not been prepared to do this.

India & IAEA safeguards

IAEA safeguards are used to verify compliance by NPT non-nuclear weapon states with their commitment not to acquire nuclear weapons or devices. There are two kinds of IAEA safeguards – (1) full scope safeguards; and (2) limited scope safeguards.

Full scope safeguards are safeguards that are applied to all nuclear materials within a country’s territory or under its control. All NPT non-nuclear weapon states are required to submit their nuclear activities and facilities to full scope safeguards.

Limited scope safeguards are safeguards placed on individual plants, shipments of nuclear fuel, or supply agreements between importers and exporters of nuclear fuel or technology. Under the NPT, all NPT members who export nuclear material to non-nuclear weapon states must ensure such exports are subject to safeguards once transferred to the recipient, even if the recipient is not a member of the NPT.

India has accepted some facility specific safeguards but, because it has refused to accept full scope safeguards, it has become isolated from world trade in uranium since the establishment of the NSG in 1974. The NSG is group of 45 nuclear suppliers that have voluntarily agreed to co-ordinate their export controls governing transfers of civilian nuclear material and nuclear related equipment and technology to non-nuclear weapon states, including those non-nuclear weapon states who are not parties to the NPT, like India.

According to the NSG guidelines (which are separate from the requirements of the NPT), in order for a non-nuclear weapon state to be eligible to import nuclear items from an NSG member, that state must have a safeguards agreement with the IAEA covering all their nuclear activities and facilities.

US / India agreement – a template for the Australia / US agreement?

Australia’s decision to allow uranium sales to India follows a similar decision by the US. Unlike Australia, the US’ uranium export policy is contained in domestic legislation (the Atomic Energy Act) and it was necessary for the US Congress to pass new legislation (the Henry Hyde United States-India Peaceful Co-operation Act) to change that policy so that the US may supply uranium and nuclear technology to India.

Earlier this month, the US and India completed the negotiation of their "nuclear cooperation agreement". The agreement has already been approved by the Indian Cabinet but approval by the US Congress is still pending. The supply of uranium and nuclear technology by the US to India under the agreement is conditional on the NSG agreeing to make an exception to their guidelines to allow such supply and on India entering into an agreement with the IAEA for the application of safeguards to its civilian nuclear facilities, comprising 14 of India’s 22 nuclear reactors.

Critics of the US / India agreement point out that the agreement does not prohibit India from conducting nuclear tests or provide for the return of nuclear material and equipment to the US if India does test a nuclear explosive device. Unlike the NPT nuclear weapon states, India has so far refused to sign the Comprehensive Test Ban Treaty and so is under no legal obligation not to test.

Critics also point out that the agreement requires "India-specific" safeguards to be adopted. It is not clear how different these safeguards will be from the full scope safeguards required to be adopted by the non-nuclear weapon states who are parties to the NPT.

The IAEA welcomed the prospect of a US / India agreement. In 2006, the Director General of the IAEA described the then proposed agreement as "a creative break with the past that, handled properly will be a first step forward for both India and the international community. India will get safe and modern technology to help lift more than 500 million people from poverty, and it will be part of the international effort to combat nuclear terrorism and rid our world of nuclear weapons." The Director General has argued that the international community’s traditional strategy of treating India, Pakistan and Israel as outsiders is "no longer a realistic method of bringing these last few countries into the fold".

The arguments for and against uranium sales to India

There are arguments for and against the sale of Australian uranium to India.

Those who argue in favour of uranium sales to India point to the economic gain to uranium producers; India’s status as a stable democracy with a track record of non-proliferation; and the benefits of extending IAEA safeguards to more of India’s nuclear activities.

Those who argue against uranium sales to India are more concerned with the weakening of the international community’s commitment to the principles of the NPT; India’s refusal to give up weapons testing; and the uncertainty surrounding the "India -specific" safeguards agreed to by India.

The Australian Federal Government has indicated that negotiations on the Australia / India bilateral safeguards agreement will not occur until after the US Congress has approved the US/ India agreement, the NSG has approved the supply of uranium and nuclear material to India and India has concluded a safeguards agreements with the IAEA for its civilian nuclear facilities. These events are not expected to occur until sometime next year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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