- Wording of the Agreement
Withdrawal from the Agreement
4.1In submissions to the inquiry and at public hearings, the Committee was presented with evidence that raised concerns with the potential imbalance of the Agreement.
4.2At the first public hearing in Canberra, Professor Donald Rothwell stated that the provisions concerning withdrawal from the Agreement offered ‘an enormous amount of flexibility’ to the United Kingdom (UK) and the United States of America (US).
4.3Professor Rothwell’s submission cited the term of ‘Originating Party’ in Article I as one such example, in which an ‘Originating Party’ is able to withdraw from the Agreement if they cannot determine that cooperation under the Agreement ‘will promote and will not constitute an unreasonable risk to its defence and security’. Professor Rothwell highlighted that under the terms of Article II(N) of the Agreement, the definition of an ‘Originating Party’ only extends to the UK or US.
4.4Professor Rothwell further described the Agreement as ‘somewhat exceptional’ as many other international treaties provide a more limited or constrained set of circumstances under which a party may withdraw. He theorised that this flexibility could be a result of the long lifespan of the Agreement as well as the lack of precedent for the UK and US entering into such agreements.
4.5The Australia Institute also proposed rewording or adding provisions that afforded Australia more flexibility in withdrawing from the Agreement. Mr Allan Behm suggested that Australia should take precautions and not sign away ‘the potential for future governments to take decisions in the national interest, whether they're in the national security interest or… the national economic interest’.
Indemnity and dispute resolution
4.6The Committee heard concerns relating to indemnity provisions found in the Agreement. Professor Rothwell highlighted that Australia was acquiring all the risk relating to the nuclear-powered submarines built under the Agreement, with no risk or liability being placed upon the UK or US. Rothwell said that as the Agreement stands, Australia gains the legal responsibility for the submarines and the UK and US are indemnified for any issues that may have arisen throughout the build process.
4.7The Australian Conservation Foundation (ACF) shared these concerns and added that the ‘broad’ indemnity provisions exposed Australia to significant financial risk and were not in the national interest. The ACF suggested that the Committee take legal advice on the scope of the indemnity to map out in detail the potential liability that the Agreement placed on Australia.
4.8The Australian Submarine Agency (ASA) stated that Australia indemnifying the UK and US for liability arising from nuclear risk was ‘consistent with Australia's commitment to being a sovereign and responsible steward of naval nuclear propulsion technology that will be owned and operated by Australia as a sovereign capability’.
4.9When appearing before the Committee, Professor Rothwell stated that an ‘unusual’ aspect of the Agreement was that it did not contain ‘some of the consistent formal mechanisms for resolution of disputes or disagreements that one might otherwise find in a treaty-level instrument dealing with matters of such complexity and significance’. Rothwell said that modern treaties with the level of detail contained in the Agreement typically contained a provision for arbitration if a dispute arose between parties and that the complexity of the arrangements contained within the Agreement created the potential for ‘fairly high-level international disagreements’.
Tripartite commitments and intersection with other international instruments
4.10The importance of the Agreement in facilitating the AUKUS program was explored by the Committee. Professor Rothwell stated that it would not be possible for Australia to acquire nuclear-powered submarines through AUKUS without a treaty-level instrument of this type being ratified.
4.11The ASA stated that the length of the Agreement was a demonstration of the longevity of the partnership between the three Parties. ASA said the three Parties were committed to AUKUS and that the Agreement made the necessary commitments to ‘collectively uplift the industrial capacity and trilateral defence of all three countries’.
4.12ASA cited US Congress passing legislation to allow the sale of Virginia Class submarines to Australia, investments in Australian industrial bases, and the authorisation of Australian workers on US shipyards as examples of the commitment from Australia’s AUKUS partners.
4.13The Agreement’s relationship with other international agreements and instruments was discussed. Rothwell described the Agreement’s preamble referencing of six other existing agreements, protocols and treaties as ‘exceptional’ and a reinforcement of the importance of the international law framework.
4.14Rothwell stated that these intersecting relationships in tandem with the lifespan of the Agreement would result in the Agreement becoming a ‘foundation for additional instruments’ so that it could remain fit for purpose. The ASA agreed with this assessment, stating that while the purpose of the Agreement was specific, the scope of the initiative was large and legally complex. The ASA stated that additional agreements will be entered into to facilitate the purpose of the Agreement. Professor Rothwell suggested that the Committee could recommend that there is appropriate parliamentary scrutiny of any instruments created as a result of the Agreement.
Nuclear weapons
4.15The potential for the Agreement to create a ‘slippery slope’ towards nuclear weapons was repeatedly raised in submissions and at public hearings. The ACF raised this concern and stated that Australia should sign the Treaty on the Prohibition of Nuclear Weapons before ratifying the Agreement to avoid Australia developing sovereign nuclear weapons capability or hosting UK and US nuclear forces. The ACF stated that signing the Treaty on the Prohibition of Nuclear Weapons would demonstrate that the Agreement is ‘not a stepping stone’ towards acquiring nuclear weapons and would be a reassurance to the Indo-Pacific.
4.16Caring for South Australia shared these views and stated in their submission that the Agreement potentially breached the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) that Australia is a signatory to. The submission stated that Article VI(H) prohibiting the detonation of a nuclear weapon in Australia suggested the potential for there to be a nuclear weapon on Australian territory. Friends of the Earth Adelaide emphasised the geopolitical importance of the NPT, stating that the Agreement would facilitate Australia acquiring highly enriched uranium and could set a precedent that resulted in other countries acquiring nuclear weapons and undermining the disarmament regime.
4.17The Australian Nuclear Association (ANA) opposed this viewpoint, stating that the Agreement did not involve the technology required for nuclear weapons. They stated that the Agreement met the highest non-proliferation standards and obliged Australia to:
…only use nuclear materials transferred under the Agreement for naval propulsion purposes, to not enrich or reprocess any material received and to be responsible for the management, disposition, storage and disposal of any spent fuel and radioactive waste resulting from naval nuclear propulsion plants.
4.18The ASA stated that the Agreement was consistent with Australia’s existing non-proliferation obligations under the NPT and Treaty of Rarotonga and Australia’s safeguard agreements with the International Atomic Energy Agency (IAEA). The ASA also emphasised that the nuclear material in UK and US nuclear-powered submarines was not in a form that could be used in nuclear weapons without further processing by facilities that Australia does not have and will not acquire. The Department of Foreign Affairs and Trade highlighted the Agreement’s provision that nuclear material and equipment was unable to be transferred until Australia had concluded negotiating the Article 14 Arrangement with the IAEA.
Committee comment
4.19The Committee appreciates concerns raised with the wording of the Agreement but simultaneously values the strength of the relationships with the other Parties. The Committee recognises the benefit to the national interest that the AUKUS program provides and that the program cannot be delivered without ratification of the Agreement.
4.20The Committee understands why issues relating to indemnity and other Parties withdrawing from the Agreement have been raised but believes these to be reflective of the lifespan and complexity of the Agreement rather than a treaty that is unfairly weighted against Australia. The Committee agrees that there is a high likelihood of instruments resulting from ratifying the Agreement and strongly believes that they should receive appropriate parliamentary scrutiny.
4.21The Committee was reassured that the Australian Government remains committed to the Treaty on the Non-Proliferation of Nuclear Weapons and Treaty of Rarotonga. Additional reassurance is provided by ongoing negotiations with the IAEA relating to the Article 14 Arrangement. These commitments are reflected in the Agreement and satisfy the Committee’s concerns regarding the Agreement resulting in Australia acquiring nuclear weapons.
4.22The Committee recommends appropriate parliamentary scrutiny of any supplementary or additional instruments resulting from ratifying the AUKUS treaty.