Referral of inquiry
On 9 November 2016, the Civil Nuclear Transfers to India Bill 2016 (the
bill) was introduced in the House of Representatives by the Minister for
Foreign Affairs, the Hon Julie Bishop MP. On 10 November 2016, the Senate
referred the provisions of the bill to the Senate Foreign Affairs, Defence and
Trade Legislation Committee for inquiry and report by 24 November 2016. The
Selection of Bills Committee listed the following reasons for referral:
To ensure the bill achieves the object of codifying, for the
special case of India, and for the purposes of the relevant laws, the content
of Australia's relevant international obligations in relation to nuclear
safeguards to be applied by the IAEA [International Atomic Energy Agency] in
Conduct of inquiry
The committee advertised the inquiry on its website, calling for
submissions to be lodged by 17 November 2016. The committee also wrote directly
to a range of individuals and organisations likely to have an interest in the
bill, drew their attention to the inquiry and invited them to make written
The committee received nine submissions to the inquiry. These
submissions are listed at Appendix A and are published on the committee's website.
On 5 September 2014, the Agreement between the Government of
Australia and the Government of India on Cooperation in the Peaceful Uses of
Nuclear Energy (the Agreement) was signed in New Delhi. On 28 October 2014,
the Agreement was tabled in the Parliament and referred to the Joint Standing
Committee on Treaties (JSCOT). JSCOT made six recommendations in the report
tabled on 8 September 2015, including:
urging the Australian Government to commit significant diplomatic
resources to encouraging India to become a party to the Comprehensive Test Ban
Treaty, and to negotiate a Fissile Material Cut-Off Treaty;
that the Australian Government consider facilitating the
negotiation of a nuclear arms limitation treaty for the Indian subcontinent
that, should the Australia-India Agreement be ratified, uranium
sales to India only commence once:
India has achieved the full separation of civil and military
nuclear facilities, as verified by the IAEA;
India has established an independent nuclear regulatory authority
the Indian nuclear regulator's existing policies and arrangements
have been reviewed to ensure its independence;
the frequency, quality and comprehensiveness of onsite
inspections at nuclear facilities have been verified by the IAEA as being best
the lack of sufficient planning for the decommissioning of
nuclear facilities has been rectified;
that the Australian Government outline the legal advice it has
received regarding the consent to enrichment provisions in Article VI of the
proposed Australia-India Agreement; and
that the Australian Government outline the legal advice it has
received concerning whether the proposed Australia-India Agreement breaches
Australia's obligations under the South Pacific Nuclear Free Zone Treaty (Rarotonga
Government response to JSCOT report
The Australian Government tabled a response to the committee's six
recommendations on 11 November 2015.
The response to recommendation one and two provided assurance that India
has been a key focus of its efforts to promote entry into force of the
Comprehensive Nuclear-Test Ban Treaty as well as negotiations towards a fissile
material cut-off treaty.
It noted that although only the states involved can decide to negotiate an arms
limitation agreement, Australia and India have established an annual dialogue to
discuss issues on nuclear disarmament and ways to reduce the risk of nuclear
conflict in the region.
Of particular interest to this inquiry is the government's response to recommendation
three, which suggested that uranium sales to India only commence once certain conditions
are met. Although the response agreed with the committee on the importance of
the conditions raised, it stated the government was satisfied that steps had been
taken to address each condition, and did not agree that exports to India should
The response noted that the Agreement already provides adequate
provisions for the separation of India's civil and military facilities, and
pointed out that India is working to enhance its regulation in nuclear safety.
The response noted that the remaining conditions were similar to those made by
the Integrated Regulatory Review Service (IRRS), which provided an in-depth
review of India's performance against IAEA safety requirements, and that the
IAEA and India have developed an action plan to address the IRRS
The response to recommendation four noted that no specific legal advice
regarding the consent to enrichment provisions had been sought. The response to
recommendation five advised that it is not the practice of the Australian
Government to disclose its legal advice.
Purpose of the bill
The purpose of the bill is to 'codify, for the special case of India,
the content of Australia's relevant international obligations for the purposes
of relevant laws'.
This makes it clear that decisions approving civil nuclear transfers to India
are taken not to be inconsistent with, or have been made with due regard to,
Australia’s obligations relating to nuclear safeguards under the Treaty on the
Non- Proliferation of Nuclear Weapons (NPT) and the South Pacific Nuclear Free
Zone Treaty, if particular conditions are met.
The bill will protect uranium mining companies in Australia from
domestic legal action challenging the consistency of the safeguards applied by
the IAEA in India and Australia's international non-proliferation obligations.
It will also protect any future bilateral trade in other nuclear-related
material or items for civil use.
In 2008, the Nuclear Suppliers Group (NSG) accepted that nuclear trade
would be possible with India on the basis of its commitments and actions in
support of nuclear non-proliferation, even though it is not a signatory to the NPT.
The decision was agreed to by the 48 members of the NSG, which includes all of
the major nuclear supplier countries and others that are active in
non-proliferation efforts. This includes Australia which sits on the Board of
Governors of the IAEA.
Under this framework and related agreements made with India, the
IAEA applies a robust safeguards regime to India’s civil nuclear fuel cycle,
where Australian obligated nuclear material will exclusively remain. The Department
of Foreign Affairs and Trade (DFAT) emphasized that the measures in place to
prevent the diversion of Australian uranium from the civil part of India’s fuel
cycle are at least as strong as those in place for other export destinations.
These include explicit commitments by India in a binding bilateral agreement
with Australia, and robust inspection and accounting procedures enforced by the
According to DFAT, the United States, Canada, France, Japan, Korea, Russia and Kazakhstan,
among others, have established nuclear cooperation with India on the basis of
the NSG’s 2008 decision.
The department highlighted that since 2008, India has met its commitments
to support international non-proliferation efforts, which include: continuing
its moratorium on nuclear testing, separating its civil and military nuclear
activities and accepting IAEA safeguards on the former. Furthermore, India has
brought its Additional Protocol with the IAEA into force and is working with
Australia and others to promote negotiations on a Fissile Material Cut-off
The provisions of the bill
Clauses 1 to 7 establish the short title of the Act; its commencement
(the day after the Act receives Royal Assent); its object, simplified outline
and definitions; as well as asserting that it extends to Australia's external
territories and binds the Crown in all its capacities.
Subclause 8(1) provides that, as long as the conditions set out in
subclause 8(3) are met, the exercise of powers or the performance of functions
under the Nuclear Non-Proliferation (Safeguards) Act 1987 (and any
prescribed legislative instruments) regarding the export from Australia of
nuclear or nuclear-related items, is considered consistent with Australia's
obligations under specified international agreements relating to the safeguards
to be applied in India. The subclause is drafted with reference to Section 70
of the Nuclear Non-Proliferation (Safeguards) Act 1987.
Subclause 8(2) provides that, as long as the conditions set out in
subclause 8(3) are met, the exercise and performance of functions by a person
under the Defence Trade Controls Act 2012 or the Customs (Prohibited
Exports) Regulations 1958 (and any prescribed legislative instruments)
regarding the export from Australia of nuclear material or nuclear-related
items are considered to have had due regard to Australia's obligations,
responsibilities and commitments, under the specified international agreements
in relation to the safeguards to be applied in India.
Subclause 8(3) specifies the conditions referred to in subclauses 8(1)
and 8(2). The conditions state that both the Australia-India Agreement and the
India-IAEA Agreement must be in force, and that person exercising a power or
performing a function in connection with the export from Australia of nuclear
material or nuclear-related items must be satisfied that IAEA safeguards will
apply to the material or item(s) in India. This provision refers to how
administrative procedures related to export from Australia or nuclear material
or nuclear-related items shall be exercised.
Subclause 8(4) provides that the section applies to the exercise of a
power or performance of a function before, on or after commencement of the Act.
However, the Explanatory Memorandum asserts that 'the Act will not negatively
affect any person as a result of the retrospectivity of this provision'.
Clause 9 provides that, if the India-IAEA agreement is amended, the
Minister must give notice of the amendment by notifiable instrument. This is to
ensure that the Parliament will be notified of any amendment agreed by India
and the IAEA. It is important to note, that any amendment that materially
affected the operation of the India-IAEA agreement would need to be approved by
the IAEA's Board of Governors, of which Australia is a member.
Clause 10 provides that the Minister may make rules prescribing certain
matters. Subparagraphs 8(1)(ii) and 8(2)(ii) specify matters that may be
prescribed by rules.
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