Agreement between the Government of Australia, the Government of the United Kingdom of Great Britain and Northern Ireland, and the Government of the United States of America for the Exchange of Naval Nuclear Propulsion Information
This chapter examines the Agreement between the Government of Australia, the Government of the United Kingdom of Great Britain and Northern Ireland, and the Government of the United States of America for the Exchange of Naval Nuclear Propulsion Information (ENNPIA/proposed Agreement), which was signed in Canberra on 22 November 2021 and tabled in the Parliament later on the same day.
The proposed Agreement would establish a legally-binding framework for the disclosure and use of information related to naval nuclear propulsion among the governments of Australia, the United States (US) and United Kingdom (UK).
According to the National Interest Analysis (NIA), the proposed Agreement relates to the acquisition by Australia of nuclear-powered submarines for the Royal Australian Navy, which is the first initiative of the AUKUS (Australia, United Kingdom, United States) enhanced trilateral security partnership.
The AUKUS enhanced trilateral security partnership was announced jointly by Australia, the UK and US on 16 September 2021. Through AUKUS, the three governments undertook to:
promote deeper information and technology sharing
foster deeper integration of security and defence-related science, technology, industrial bases and supply chains
deepen cooperation on a range of security and defence capabilities including cyber, artificial intelligence, quantum technologies and undersea capabilities.
With regard to the partnership’s first initiative, the acquisition by Australia of nuclear-powered submarines, the announcement stated there would be a ‘trilateral effort of 18 months to seek an optimal pathway to deliver this capability’, with Australia to leverage expertise from the US and UK.
In the announcement, Australia undertook to adhere to ‘the highest standards for safeguards, transparency, verification, and accountancy measures to ensure the non-proliferation, safety, and security of nuclear material and technology’. Australia stated it remained ‘committed to fulfilling all of its obligations as a non-nuclear weapons state, including with the International Atomic Energy Agency’. And together, the three nations stated their deep commitment to upholding their leadership on global non-proliferation.
Nuclear-powered submarines and Australia’s national interest
In announcing the enhanced trilateral security partnership, the three countries stated AUKUS would ‘help sustain peace and stability in the Indo-Pacific region … to protect our shared values and promote security and prosperity’.
Submarines, according to the NIA, are an essential part of Australia’s naval capability and provide a ‘strategic advantage in terms of surveillance and protection of our maritime approaches’.
In comparison to conventionally powered submarines, nuclear-powered submarines are said by the NIA to exhibit superior stealth, speed, manoeuvrability, survivability, and endurance, such that they can ‘deter actions against Australia’s interests’.
Requirement for the proposed Agreement
The NIA stated disclosure of naval nuclear propulsion information is restricted under US domestic law. It is only when there is an agreement such as ENNPIA in force that such information can be disclosed to a foreign nation. Due to its pre-existing treaty obligation with the US, the UK is equally restricted from disclosing naval nuclear propulsion information. The proposed Agreement would provide for Australia to receive naval nuclear propulsion-related information from the UK and the US.
The proposed Agreement, according to the NIA, is ‘critical to an intensive examination of the full suite of requirements that underpin the delivery of these submarines being considered as part of an 18-month consultation period’.
The NIA foreshadowed that the proposed Agreement would also facilitate training and education for Australian civilian and military personnel on the safe and effective operation of naval nuclear propulsion technology. It would, therefore:
… enable Australia to develop the necessary skills and knowledge to create a world’s best practice regulatory and safety regime to guarantee the safe operation of naval nuclear propulsion and to ensure compliance with Australia’s international obligations, including under the Treaty on the Non-Proliferation of Nuclear Weapons.
Provisions of the proposed Agreement
Statements in the Preamble recall and affirm:
the first initiative of AUKUS is a shared ambition to support Australia in acquiring nuclear-powered submarines for the Royal Australian Navy
the Parties have embarked on a trilateral effort to seek an optimal pathway to deliver this capability
common defence and security will be advanced by the exchange of naval nuclear propulsion information concerning military reactors
the Parties’ respective obligations under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).
Key articles in the proposed Agreement
Information to be communicated or exchanged
Article II of the proposed Agreement provides for naval nuclear propulsion information to be communicated or exchanged as it is determined to be necessary to research, develop, design, manufacture, operate, regulate, and dispose of military reactors, or to facilitate such communication or exchange.
The NIA confirmed visits, training and secondments of civilian and military personnel are included in the scope of Article II, where this involves access to naval nuclear propulsion information.
Naval nuclear propulsion information
The proposed Agreement defines ‘naval nuclear propulsion information’ as:
… classified information and unclassified information concerning the design, arrangement, development, manufacture, testing, operation, administration, training, maintenance, or repair of the propulsion plants of naval nuclear-powered vessels and prototypes, including the associated shipboard and shore-based nuclear support facilities.
Nuclear weapons and other exclusions
Under the proposed Agreement, ‘Reactor’ is defined to exclude nuclear weapons:
… an apparatus, other than an atomic weapon, in which a self-supporting fission chain reaction is maintained and controlled by utilizing uranium, plutonium, or thorium, or any combination of uranium, plutonium, or thorium.
The NIA confirmed the proposed Agreement would not authorise or support the sharing or transfer of any information related to nuclear weapons.
Further, the proposed Agreement ‘does not support the transfer of any equipment or technology, nor does it support the sharing or transfer of any information on civil nuclear matters, beyond those incidentally related to naval nuclear propulsion’.
Sharing of information is subject to defence and security considerations
Parties would be able to communicate and exchange information under the proposed Agreement, provided the ‘communicating Party determines that such cooperation will promote and will not constitute an unreasonable risk to its defense and security’.
The technical annex of the proposed Agreement, which sets out implementing provisions with regard to the communication or exchange of naval nuclear propulsion information, provides that cooperation must not adversely affect the resources of each Party’s naval nuclear propulsion program.
Other provisions in the technical annex include:
the authority in each jurisdiction to control cooperative efforts and communication or exchange of any information under the Agreement
liability for the use of information to be assumed by the receiving Party
the need for participation by persons in any aspect of the Agreement to be agreed in advance by all Parties.
The annex also makes provisions with regard to administrative controls for the handling of information under the proposed Agreement.
Additional laws or arrangements that apply to activities under the proposed Agreement
Article IV, which specifies various conditions on the proposed Agreement, provides for cooperation under the proposed Agreement to be carried out by each of the Parties in accordance with each Party’s applicable laws. These applicable laws are not specified or otherwise limited.
The proposed Agreement does not preclude communication or exchange of naval nuclear propulsion information under other arrangements or agreements between the Parties.
Parties may enter into implementing arrangements for the provisions of the proposed Agreement but where there is any inconsistency, the provisions of the proposed Agreement would prevail.
Implementing arrangements are likely, according to the NIA, for specific activities, engagement and access to information authorised by the proposed Agreement.
In particular, the NIA stated that where training or secondment activities occur under the proposed Agreement, these would be subject to implementing arrangements made under the proposed Agreement or provided for under ‘separate agreements or arrangements’.
No indemnity or guarantee as to accuracy or completeness of information
The use of information communicated or exchanged under the proposed Agreement is the responsibility of the Party receiving the information. The originating Party does not provide any indemnity, warrant the accuracy or completeness of the information, or warrant the suitability or completeness of the information for any particular use or application.
Protecting and disseminating information
Under the proposed Agreement, Parties make a range of guarantees with regard to the security of information provided according to Article II, including that conditions applied by the receiving Party be no less stringent than those of the originating Party.
Parties would consult to maintain mutually determined classification policies.
While the proposed Agreement would not restrict consultation or cooperation in defence with other nations or international organisations, no Party could communicate or exchange naval nuclear propulsion information provided under the proposed Agreement to any other nation, foreign or international entity, or individual who is not a national of the Parties.
Further, the proposed Agreement would not allow for any Party to communicate or exchange information made available by another Party under the proposed Agreement to an individual who is not its national and who is a national of another Party, without the consent of that other Party.
The proposed Agreement contains a security annex. Section I of the security annex deals with access to naval nuclear propulsion information and security clearance procedures for personnel. It includes the requirement that no individual is to be granted access unless it is affirmatively determined such access will not endanger national security or pose an undue risk to common defence and security. The annex specifies the considerations that must be taken prior to affording a person access to naval nuclear propulsion information.
Section II deals with arrangements for the physical security of the information exchanged or communicated under the proposed Agreement including the requirement that it be protected physically against espionage, sabotage, unauthorised access or any other hostile activity.
Section III specifies document and information control programs for classified information, including the authority to classify naval nuclear propulsion information and rules for classification.
Section IV contains provisions for security assurances; security of classified contracts; security education; actions in the case of loss or compromise of naval nuclear propulsion information; reports; and records of facilities where naval nuclear propulsion information may be stored.
Section V allows for reciprocal visits of security personnel to achieve an understanding of the adequacy and reasonable comparability of each Party’s security system.
International Atomic Energy Agency safeguards
Cooperation under the proposed Agreement requires Australia to maintain its International Atomic Energy Agency (IAEA) NPT safeguards agreements with respect to all nuclear material in all peaceful nuclear activities within the territory of Australia, under its jurisdiction, or carried out under its control.
Australia would fulfill this requirement by maintaining the following existing agreements with regard to peaceful nuclear activities:
Agreement between Australia and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty on the Non-Proliferation of Nuclear Weapons, signed at Vienna on 10 July 1974
Protocol Additional to the Agreement between Australia and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty on the Non-Proliferation of Nuclear Weapons, signed at Vienna on 23 September 1997.
The provisions with regard to intellectual property in the proposed Agreement operate without prejudice to any future agreements or arrangements in the context of the design, construction, operation, regulation, and disposal of a naval nuclear-powered vessel.
If there is an invention or discovery made by the recipient Party during the period the Agreement is in force, that employs information provided under the Agreement, and where the rights are owned by the recipient Party:
the recipient Party retains ownership of the rights in the invention or discovery in their jurisdiction
all right, title and interest in and to the invention or discovery, patent application or patent in the country of the originating Party is to be transferred and assigned to the originating Party, subject to:
the recipient Party retaining a royalty-free, non-exclusive, irrevocable licence for governmental purposes and for the purposes of mutual defence
the recipient Party granting to the other non-originating Party a royalty-free, non-exclusive, irrevocable licence for governmental purposes and the purposes of mutual defence.
With respect to any invention or discovery, patent application or patent, licence or sublicence covered by the provisions above, each Party:
may to the extent of its right, title and interest, deal in its own country as it may desire, but cannot discriminate against citizens of any Party in respect of granting any licence or sublicence under the patents owned by it in its own or any other country
waives any and all claims against any Party for compensation, royalty, or award and releases the other Parties from all such claims.
No patent application with respect to any classified invention or discovery employing classified information exchanged or communicated under the proposed Agreement, may be filed:
in a country of any Party except in accordance with agreed conditions
in any country not a Party to the proposed Agreement.
No dispute settlement mechanism
Parties agree to settle any disagreements with regard to the implementation or interpretation of the proposed Agreement through ‘mutual consultations and negotiations without recourse to any dispute settlement mechanisms’.
Entry into force and duration
The proposed Agreement would enter into force for all Parties on the date of the last notification that each Party has completed all domestic requirements for the entry into force of the Agreement.
Evidence to the Committee suggests Australia, the US and UK would complete their respective domestic processes during the course of January 2022.
Provisions in the proposed Agreement mean it could remain in force until 31 December 2025. The proposed Agreement would:
remain in force until 31 December 2023
automatically extend for four additional periods of six months each unless superseded by a subsequent agreement or otherwise terminated.
Any Party may terminate the proposed Agreement by giving at least six months written notice to the other Parties.
Return or destruction of information
If any Party materially breaches, terminates or abrogates the proposed Agreement, other Parties have the right to require the return or destruction of any naval nuclear propulsion information communicated or exchanged under the Agreement.
Provisions to remain in effect
Notwithstanding the suspension, termination or expiration of the proposed Agreement or cessation of cooperation for any reason, the following Articles would continue in effect so long as any naval nuclear propulsion information communicated or exchanged remains in the recipient Party or recipient Party’s jurisdiction or control:
Article III—Responsibility for use of information
Article V (A, B, D)—Guaranties
Article VI—Dissemination of information
Article VII—Classification policies
Article VIII—Intellectual property.
The Department of Defence would lead Australia’s implementation of the proposed Agreement, in consultation with the Department of Foreign Affairs and Trade (DFAT) and the Attorney-General’s Department (AGD).
No legislative or regulatory measures are required for the proposed Agreement to be implemented in Australia.
As there are no provisions in the proposed Agreement with regard to costs, each Party would bear their own incidental costs.
According to the Department of Defence, the Australian Government has approved funding of up to $300 million for the operation of the Nuclear-Powered Submarine Task Force. As of 25 November 2021, the task force had 134 staff, including secondees from the Department of the Prime Minister and Cabinet, DFAT, AGD, the Australian Nuclear Science and Technology Organisation, the Australian Radiation Protection and Nuclear Safety Agency, the Department of Education, Skills and Employment, and 10 contractors.
There are no anticipated regulatory costs.
There are no provisions in the proposed Agreement that provide for amendments to be made to the Agreement.
Under international law, Parties could though jointly agree to amend the proposed Agreement, and any such amendment for Australia would be subject to Australia’s domestic treaty-making requirements, including tabling in Parliament and consideration by the Committee.
Because of the destructive power of nuclear weapons, the international community has imposed a strong regulatory regime on the possession and trade in nuclear materials and the industrial machinery used to process, refine and store those materials. Two of the treaties involved in this regulation are relevant to the Committee’s inquiry into the proposed Agreement:
the Agreement between Australia and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty on the Non-Proliferation of Nuclear Weapons (safeguards agreement).
The NPT establishes an international framework that is intended to prevent non-nuclear weapon states from acquiring nuclear weapons, while permitting the development of ‘research, production and use of nuclear energy for peaceful purposes’.
The NPT requires that a non-nuclear weapon state concludes a ‘safeguards agreement’ with the IAEA for the purpose of verifying that it is complying with the obligations of the NPT. Parties to the NPT cannot transfer nuclear material or related equipment to a non-nuclear weapon state unless that nuclear material or equipment is subject to a safeguards agreement. For Australia, this is the safeguards agreement referred to above.
While the proposed Agreement contains an article specifically stating that in implementing ENNPIA, Australia will comply with its nuclear non-proliferation obligations, the proposed Agreement itself is limited to the exchange of naval nuclear propulsion information. The relevant non-proliferation treaties to which Australia is party do not prohibit the exchange of this type of information, and so the proposed Agreement itself presents no challenge to Australia’s obligations under the non-proliferation treaties.
Non-proliferation obligations become relevant to the proposed Agreement because the purpose of the proposed Agreement is to support the acquisition of nuclear-powered submarines. The preamble to the proposed Agreement states:
Recalling their leaders’ announcement of an enhanced trilateral security partnership among the Parties called AUKUS, of which the first initiative is a shared ambition to support Australia in acquiring nuclear-powered submarines for the Royal Australian Navy …
At the hearing on 29 November 2021, Mr Scott Dewar, Former First Assistant Secretary, International Policy and Agreements, Department of Defence, stated:
The first major initiative under AUKUS is to support Australia's acquisition of conventionally armed nuclear-powered submarines for operation by the Royal Australian Navy. Acquiring nuclear powered submarines is a major decision for Australia.
Article 14 of Australia’s safeguards agreement with the IAEA sets out the conditions under which Australia can use nuclear material for a non-proscribed military activity that is not in conflict with Australia’s non-proliferation obligations. Article 14 states:
If Australia intends to exercise its discretion to use nuclear material which is required to be safeguarded under this Agreement in a nuclear activity which does not require the application of safeguards under this Agreement, the following procedures shall apply:
Australia shall inform the Agency of the activity, making it clear:
That the use of the nuclear material in a non-proscribed military activity will not be in conflict with an undertaking Australia may have given and in respect of which Agency safeguards apply, that the nuclear material will be used only in a peaceful nuclear activity; and
That during the period of non-application of safeguards the nuclear material will not be used for the production of nuclear weapons or other nuclear explosive devices;
Australia and the Agency shall make an arrangement so that, only while the nuclear material is in such an activity, the safeguards provided for in this Agreement will not be applied. The arrangement shall identify, to the extent possible, the period or circumstances during which safeguards will not be applied. In any event, the safeguards provided for in this Agreement shall apply again as soon as the nuclear material is reintroduced into a peaceful nuclear activity. The Agency shall be kept informed of the total quantity and composition of such unsafeguarded nuclear material in Australia and of any export of such nuclear material; and
Each arrangement shall be made in agreement with the Agency. Such agreement shall be given as promptly as possible and shall relate only to such matters as, inter alia, temporal and procedural provisions and reporting arrangements, and shall not involve any approval or classified knowledge of the military activity or relate to the use of the nuclear material therein.
During the Committee hearing on 29 November 2021, Ms Katrina Cooper, First Assistant Secretary and Head, AUKUS Taskforce, DFAT, affirmed Australia’s ongoing commitment to the nuclear non-proliferation regime:
Australia is unwavering in its support for the global non-proliferation regime, with the nuclear non-proliferation treaty as its cornerstone. Our AUKUS partners are equally committed. Australia is a foremost proponent of the nuclear non-proliferation treaty. We have exemplary credentials, and we stand by our record. In undertaking AUKUS cooperation, we'll comply fully with our non-proliferation obligations and commitments, including under the South Pacific Nuclear Free Zone Treaty. Our record outside the NPT is also longstanding and strong, including our work on the Non-Proliferation and Disarmament Initiative, the Proliferation Security Initiative and the Australia Group. We'll continue to adhere to the highest standards of safeguards for transparency and verifications.
The Committee heard evidence that there are complex and unresolved non-proliferation issues. Professor Donald Rothwell referred to the ‘novelty of the AUKUS arrangement’ with respect to its NPT implications. Mr Jesse Clarke, Assistant Secretary, Office of International Law, AGD, advised, ‘we will grapple with the many issues that arise under the nuclear non-proliferation treaty regime with the IAEA in our pursuit of our steadfast commitment to maintain our obligations under the nuclear non-proliferation treaty regime’.
Ms Cooper advised the Committee that discussions with the IAEA concerning Australia’s non-proliferation obligations in relation to nuclear-powered submarines had commenced and were underway:
We notified the International Atomic Energy Agency of our plans in relation to AUKUS at the outset, and we will continue to engage closely with the IAEA throughout the 18-month consultation period. The Prime Minister recently met with the IAEA director-general, Raphael Grossi, and underlined the strength of our ongoing commitment to non-proliferation and to working closely with the IAEA.
I think it's clear that naval nuclear propulsion is considered a non-proscribed military activity within the non-proliferation treaty regime. I should emphasise that such activities, non-proscribed military activities, are not prohibited by the NPT regime. A non-proscribed military activity does not include the use of nuclear material in nuclear weapons or other explosive devices.
Views on the proposed Agreement
The Committee received 106 submissions to the inquiry, the significant majority of which addressed the broader policy of the AUKUS enhanced trilateral security partnership and the perceived desirability or otherwise of Australia’s acquisition of nuclear-powered submarines. This section confines itself to the views presented on the proposed Agreement itself, rather than seeking to cover the many other issues raised.
Professor Rothwell, in his evidence to the Committee, noted the proposed Agreement ‘can properly be characterised as one that seeks to provide for an exchange of information with respect to naval nuclear propulsion information’. It is ‘an agreement to potentially agree on something more substantive at some undefined point in the future’.
Some submissions and witnesses expressed concern that the intention to acquire nuclear-powered submarines would affect Australia’s strategic independence, and expressed concern the decisions had the potential to raise tensions in the region. This included, the Medical Association for Prevention of War (Australia), the Independent and Peaceful Australia Network (IPAN), People for Nuclear Disarmament, and Australians for War Powers Reform.
Some submitters raised concerns about the acquisition of submarines drawing Australia into US war planning, destabilising the region, causing an arms build-up, and potentially leading to war with China.
A number of submissions discussed the nuclear non-proliferation implications of the proposed Agreement.
Many of these submissions identified the prospect of Australia making use of Article 14 of Australia’s safeguards agreement as a concern. BaseWatch Darwin, for example, stated:
Nuclear propelled submarines have long been recognised as a well defined loophole to the NPT framework. Australian entanglement risks further expanding the loophole, and in doing so inviting others to stretch the definition yet again. A number of international voices have expressed concern that this move by Australia may amount to a weakening of the NPT framework, and may fuel a regional arms race.
The Medical Association for Prevention of War (WA Committee) discussed the precedent Australia’s use of Article 14 of the safeguards agreement could set:
Only six countries, all of them nuclear-armed, operate nuclear-powered submarines. It is unprecedented for a non-nuclear armed nation like Australia to acquire nuclear-powered submarines. The exchange of this extremely sensitive information around the fuel and the technology that is needed to make nuclear weapons is a dangerous global precedent that other nations are likely to follow.
On the other hand, Professor Rothwell pointed out that the proposed Agreement deals with the exchange of information and does not provide for the transfer of technology. According to Professor Rothwell, though there is broader debate on whether the AUKUS partnership could lead to NPT issues, he was of the view the proposed Agreement ‘does not cause … any direct alarm in terms of inconsistency of this agreement with the NPT’. Nevertheless, Professor Rothwell was of the view a stronger statement reaffirming Australia’s NPT obligations would have been appropriate.
Environmental issues raised by submitters went to two broad issues beyond the provisions of the proposed Agreement: Australia’s capacity to deal with a nuclear incident, and the disposal of nuclear materials.
The Conservation Council of Western Australia stated the risks of nuclear submarine accidents are significant, and the environmental and wider impacts on Western Australia’s coast, marine life and community in the event of an accident or incident could be devastating.
The Independent and Peaceful Australia Network argued building, operating and supporting the maintenance of nuclear-powered submarines could lead to the establishment of a nuclear industry in Australia, something it opposed. Such an industry, IPAN argued, would bring a range of dangerous issues associated with highly enriched, weapons-grade uranium and the disposal of radioactive waste.
The AUKUS enhanced trilateral security partnership is a significant strategic development for Australia, as is the decision by the Australian Government to seek an optimal pathway for the acquisition of nuclear-powered submarines. Whilst these developments have a number of policy and political elements, and have attracted a deal of community interest, the Committee is conscious that the scope of this inquiry is limited to the proposed Agreement before the Committee, concerning the exchange of naval nuclear propulsion information.
The Committee is reassured by undertakings in the NIA and those provided by Australian Government witnesses that the proposed Agreement is only intended to facilitate the sharing of naval nuclear propulsion information and that a subsequent agreement would be required to support transfers of equipment, materials or technology. Any such agreement would be subject to Australia’s domestic treaty-making requirements, including consideration by the Committee.
Given the early stage of the project, much concern about the proposed Agreement expressed during the inquiry, while understandable and legitimate, was to some degree speculative or pre-emptive.
It is the case significant matters remain to be determined during the 18-month consultation process and any future action will be subject to further Committee scrutiny.
The Committee notes the concerns expressed by some submitters about Australia’s commitment to the NPT. The Committee found no evidence to suggest Australia’s steadfast commitment to its NPT obligations was wavering.
The Committee heard evidence that there are complex and unresolved non-proliferation issues raised by the proposal to acquire nuclear-powered submarines. On that basis, the Committee will seek to remain informed of the Australian Government’s ongoing engagement with the IAEA.
The Committee is of the view the proposed Agreement is in the national interest and accordingly recommends binding treaty action be taken.
The Committee supports the proposed Agreement between the Government of Australia, the Government of the United Kingdom of Great Britain and Northern Ireland, and the Government of the United States of America for the Exchange of Naval Nuclear Propulsion Information and recommends binding treaty action be taken.