This research paper has been commissioned by the International Commission on Nuclear Non-proliferation and Disarmament, but reflects the views of the authors and should not be construed as necessarily reflecting the views of the Commission

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6. A government-industry conference
Government-Industry Conference against Chemical Weapons (GICCW)
The idea of a government-industry conference is drawn from the experience of the Chemical Weapons Convention, in which a Government-Industry Conference against Chemical Weapons in 1989 played an important role in the conclusion of the treaty in 1993 after more than twenty years of negotiation. GICCW was the culmination of four to five years of intensive consultation and diplomatic activity between government and the chemical industry. It started with the establishment of the Australia Group in 1985 when Australia brought together representatives of industrial nations which exported certain relevant chemicals to ensure that their industries were not associated with the production of chemical weapons. Australia also launched in 1988 an Asia-Pacific regional initiative to work cooperatively with neighboring countries to prevent chemical proliferation in the Asia-Pacific region.
As leader of the Australia Group, Australian officials had also started to engage with government and leading chemical industry representatives in capitals on how best to advance the objective of preventing the spread of chemical weapons, while not impeding the legitimate activities of the civil chemical industry and protecting their commercial interests. In the absence of a peak body for the chemical industry, Australian diplomats worked with key industry players, such as Hoechst, Bayer and Monsanto, to form a spearhead group to bring other industry players on board.73
Strong support from one of the two principal chemical weapons possessors, the United States, provided important political impetus. Then US Secretary of State James Baker and then Australian Foreign Minister Gareth Evans had discussed how to build on the momentum of the Paris Conference on Chemical Weapons in January 1989. What followed was a joint announcement on 7 March 1989 that Australia would host a government-industry conference. Baker made the announcement in Vienna at a meeting of foreign ministers of countries participating in the talks on Conventional Forces in Europe.74
Political backing was also important from the members of the Conference on Disarmament (CD) who were negotiating the Chemical Weapons Treaty. They needed to be assured that the government-industry conference was not an attempt to open up a second negotiating forum. In an address to the CD in June 1989, then Australian Foreign Minister Gareth Evans sought to provide such assurances.
By the time GICCW took place in Canberra in September 1989, most of the essential groundwork for a joint approach had been laid. At the conclusion of the conference, chemical industry representatives released a statement, ‘(1) express[ing] their willingness to work for an early conclusion of a global chemical weapons ban; (2) oppos[ing] misuse of industrial products for the dangerous proliferation of CW; (3) commit[ting] industry to continue its dialogue with governments on ways to implement a CW convention; and (4) accept[ing] a self-policing role.’75
The world’s chemical industry certainly understood (eventually) the advantage of demonstrating to shareholders and to the public its commitment to chemical disarmament and nonproliferation, especially in light of its inadvertent contribution to Iraq’s chemical weapons program. The industry knew that if it was going to be regulated intensively and obtrusively, there were distinct advantages to industry being an active collaborator in ensuring that their business did not contribute to chemical weapons proliferation, while at the same time having a direct say in how commercial confidentiality could be preserved through the Chemical Weapons Treaty. The 1989 Government-Industry Conference Against Chemical Weapons provided a useful vehicle to publicly set the basis for a successful government-industry partnership for this purpose.
Through the conference and by participating as advisers to the negotiations at the CD in Geneva, industry developed confidence in the process which helped developed a level playing field with an equal impact on all companies, while ensuring that commercial and technological confidentiality was maintained.76
The situation of the chemical industry differs from that of the nuclear industry as the Nuclear Nonproliferation Treaty (NPT) is already in existence, political support for complete nuclear disarmament is not as strong as it was for chemical weapons77 other than the aspiration to general and complete disarmament in the NPT and inspections of nuclear facilities are already in place, which was not the case for chemical weapons.
GICCW took place in the context of the emerging global consensus that chemical weapons should be abolished altogether. However, without the chemical industry’s active support and collaboration, that treaty could not have come into existence.
The Biological Weapons Convention
Efforts to engage industry in the negotiation of a Verification Protocol to the Biological Weapons Convention were not successful. There was neither the political nor the business support among the key players for this. Diplomats who participated in these negotiations report that it was widely perceived that the reason the US withdrew from the Protocol negotiations in 2001, causing them to come to a halt, was because of pressure from Pharma, their peak pharmaceutical/biotechnology body. Similar views were voiced by European pharmaceutical enterprises. Their main concern was a perception that the CWC regime was too intrusive and thus highly threatening to commercial confidentiality. There is also strong scepticism about the verifiability of BW proliferation. Indeed there was a strong view that the BW verification regime under development would be expensive to comply with and trivially cheap to evade.78
Towards a government-industry conference against nuclear proliferation
The global, integrated nature of the nuclear business, its very close connection to government and a changing nuclear policy landscape, including the renewed push towards progress in nuclear disarmament, argue strongly in favour of more regular government-industry collaboration, including through joint monitoring, reporting, and enforcement of the rules and export controls. A jointly negotiated declaration as to how that would be done would add a new dimension to the global nuclear conversation.
As for the prospect of a conference modelled on the GICCW, a similar intensive diplomatic effort would be required in preparation for any nuclear industry-government conference, and the effort would require an agent with strong government backing. In a similar fashion to the GICCW, a ginger group comprising some of the key companies outlined earlier in this section should be formed, and a conference should include as many industry players as possible.
Possible outcomes of a government-industry conference
Outcomes of the conference could include a declaration of the type resulting from GICCW, approval of a Code of Conduct or code of practice, or scheduling of regular government-industry consultation meetings on the margins of NSG meetings, and/or in parallel with the NPT Preparatory Conferences or Review Conferences, industry body conferences or IAEA meetings.
New, groundbreaking announcements are also possible, given that supplier governments have under active consideration the development of new rules of the game which may have real impact on the development of the industry. These include proposals to multilateralise the nuclear fuel cycle; to limit the spread of sensitive nuclear technologies; to change NSG rules to insist that countries not exercise the right to develop sensitive technology as a condition of supply, as well as making the adoption of the Additional Protocol a mandatory condition of supply.
This might be overly ambitious, given how tightly commercial interests are woven into national interests, especially when it comes to the right to develop sensitive nuclear technologies such as enrichment. It must be remembered that the controversial ‘two-tier’ system enshrined in the NPT between nuclear weapon states and non-nuclear weapon states could also spill over into the peaceful uses domain. Initiatives to limit the possession and use of sensitive nuclear technologies to those who already have them now-albeit for good nonproliferation reasons-is opposed by emerging nuclear industry powers who will not accept the perpetuation of a two-tier system in the nuclear power industry.79 There is also virtually no chance states will even consider foregoing the right to develop sensitive aspects of the nuclear fuel cycle, or see them centralised or regionalised under multinational control, in the absence of a solid commitment from the nuclear armed states to achieving a world without nuclear weapons.
In this context, a global call for disarmament might also become the business of industry. It may be worth exploring whether industry is prepared to make a public commitment to the goals of both disarmament and nonproliferation as a sign of good faith, in the interests of the future bona fides of the business and as a contribution to dismantling the two-tier system.
Being politically more proactive does not mean that industry has to abandon its evidence-based approach to risk. The international community will need to be confident that growth in nuclear energy will be managed responsibly. Being proactive can help industry in its ambition to ‘strengthen and sustain public confidence, both in the reliability of nuclear technology and in the people and institutions responsible for its use.’80
With this in mind, there may be a case for involving global stakeholders from civil society in the global conversation, something a government-industry conference might include in its final declaration.
Participants, location and timing of conference
Logistics, timing and location of such a conference are details that can be elaborated on in the event the ICNND supports the idea. The chemical industry is much larger than the nuclear industry, so it should not be difficult to put together a representative group for the nuclear industry. From government, a good starting point would be members of the Board of Governors of the IAEA and all states with plans to establish nuclear power in the foreseeable future. The conference could be hosted by one of the co-chairs’ countries (Australia or Japan); or in a host nation with a major interest in the future development of nuclear energy or in an established international location such as Vienna. Whichever country hosts it would need to work closely with a supportive industry body. As to timing, given the organisational challenges and the need to canvass widely industry and government views before holding a conference, it might be best to hold the meeting after the May 2010 NPT Review Conference.
7. Prospects
The changing nuclear landscape and the integrated nature of the world’s nuclear industry strengthen the case for a concerted effort by industry and government to develop jointly a new set of understandings of future nuclear proliferation dangers, and to work closely together in the design and implementation of measures to prevent such proliferation.
Initial signs are that some industry players see opportunities and advantages to becoming more engaged in the global nonproliferation agenda. An increasingly globally integrated industry needs to take a global view and be more globally engaged. The CEO of AREVA has agreed to become a member of the ICNND’s Advisory Board. Members of industry are now active participants in second-track discussions about the future role of nuclear industry in a growing nuclear power market.81 The industry is represented by the WNA and could be engaged as an active partner. The 2008 WNA policy documents, and its Charter of Ethics and Principles of Uranium Stewardship spell out industry responsibilities to ensure the 3S (safeguards, safety and security) are indispensable for peaceful uses of nuclear energy.82
The engagement of industry as a whole will require intense diplomatic effort and will have to be managed adroitly. Large commercial and national security interests are at stake and if there are to be additional standards, they will need to be universally applied.
More information is needed about industry’s views on these matters, and, given the very close relationship between much of the world’s established nuclear industry and government, government views are also critical.
As a first step, a smaller industry group could be engaged to conduct the initial consultations with industry in collaboration with a supportive government. The Australian Uranium Association might be a candidate for such a role, given its strong public support for the principles of uranium stewardship.
8. Recommendations
The ICNND agree to the following steps to be reported on ahead of its June Moscow meeting:
1. Commission an industry-wide survey to gauge industry attitudes to nonproliferation threats and industry’s future role (a draft list of elements for a survey is at Annex B). This could also include industry trade associations and professional associations of nuclear industry employees which might be keen to encourage industry to increase its commitment to nonproliferation and disarmament.

  • Invite one of the designated research centres to conduct a survey on its behalf

2. Commission further research into the need for an additional industry Code of Conduct or other effective arrangements, based on an assessment of current codes and activities in the nuclear domain.

  • Invite one of the designated research centres to conduct this research.

3. Meet with a selection of industry representatives in Moscow in June 2009 to gauge views on codes of conduct and a government-industry conference in 2010. Discuss other steps for government-industry partnership in managing the ‘second nuclear age’ with minimal proliferation risks.

4. Designate a national industry association and an interested government to act as a ginger group to canvass support for a government-industry conference and to design an agenda for that conference, using the 1989 Government-Industry Conference Against Chemical Weapons as a model.
Annex A: Drivers of expansion in nuclear energy
Increasing energy demand
Global population growth, and economic growth in developing countries, resulting in higher per capita energy consumption, are projected to increase primary energy demand by a factor of approximately 2.5 by 2050 if present policies remain unchanged, and electricity demand by a factor of 1.8 to 3.7.83 In most countries that produce nuclear energy, present generating capacity will also need to be renewed, including the 342 reactors (of 439 globally) currently aged 20 years or older.84 Increased demand for fresh water will also increase demand for desalination plants that are increasingly likely to be powered by nuclear energy.85 If present nuclear power capacity and the share of nuclear in the total energy production mix are to be maintained, then more power reactors will be needed.
Climate change
Nuclear power is the only mature base load electricity production method that does not burn fossil fuels and is a relatively low emitter of greenhouse gases, making it an attractive alternative to fossil fuels to governments seeking to reduce their carbon emissions.86 Yet the contribution that nuclear power can make to mitigating climate change is limited by the long lead times required to bring nuclear power plants online, the present lack of capacity to respond to a rapid increase in demand for nuclear power,87 and the fact that electricity accounts for only 27% of greenhouse gas emissions.88 Nuclear power will still have to compete against renewable energy in the future as those technologies mature.
Rising fossil fuel prices
Large increases and volatility in fossil fuel prices in recent years make nuclear energy a more attractive option because fuel prices account for a relatively small proportion of the total cost of nuclear power generation (the majority of the cost being the plant itself), protecting electricity production costs from fluctuations in uranium prices to an extent unparalleled with coal, natural gas or oil.89
Economics of nuclear power
Increases in the price of fossil fuels and the anticipated pricing of carbon emissions in many Western countries are expected to improve the economics of nuclear power vis-à-vis other base load power generation options.90 Where nuclear power remains at a disadvantage is in the sizeable construction costs incurred prior to the reactor producing electricity for sale, as well as reactor decommissioning and waste disposal costs.91 The slow in construction of nuclear reactors in the West in recent years means that cost estimates are uncertain,92 and the viability of nuclear power constructed without government assistance in deregulated electricity markets is questionable,93 especially in light of the recent credit crunch.94
Energy security
Concerns about reliability of oil and natural gas supplies in recent decades stem from rising prices and fears of political interference in supply. Governments have considered including or increasing the share of nuclear power in their energy generation mix in order to reduce dependence on fossil fuels. Major uranium producers such as Canada and Australia are viewed as reliable energy suppliers due to their stable domestic political environments. This strategy should not, however, be understood as seeking energy ‘independence’. Given the internationalised nature of the nuclear fuel cycle, the process is rather one of diversification. Further, France and Japan have not been able to reduce their dependence upon imported oil by expanding nuclear energy production, as oil constitutes a very small part of total electricity generation in those two countries.95
Annex B: Elements for a survey of industry on its role in nonproliferation
Nuclear proliferation risks

  1. How important is a well functioning non-proliferation regime to the nuclear industry?

  1. How would a breakdown in the non-proliferation regime affect the nuclear industry?

  1. What do you believe are the greatest proliferation risks associated with the nuclear industry?

  1. Do you think nuclear proliferation risk is largely

    1. Politically driven by the geostrategic interests of governments

    2. Technologically driven, related to the spread of nuclear technology and know-how

    3. both

Industry policy on nonproliferation

  1. What does your company do to mitigate proliferation risks?

  1. What additional measures might your company take in the future?

  1. Would you consider including nuclear nonproliferation in your corporate social responsibility principles?

Industry leaders

  1. Who are the present industry leaders in nonproliferation? What activities make them the industry leaders?

  1. How might industry best practices be shared and implemented?

Government/ Industry role in nonproliferation

  1. What do you see as the balance of responsibility between government and industry on nuclear nonproliferation?

  1. Please describe the nature of your present engagement with national governments and international organisations on nonproliferation issues.

  1. Should government consult industry more in shaping nonproliferation policy and regimes?

Effectiveness of current nonproliferation regulations

  1. Do you consider government-imposed regulations in support of nonproliferation

  1. Over-regulation

  2. Sufficient

  3. A minimum standard upon which your company should build

  1. Are current international regulations effective in preventing nuclear proliferation? If not, why not?

  1. How might regulations be improved while ensuring minimal disruption to legitimate commercial activities?

Future actions

  1. What should be the focus of future action on nonproliferation?

  1. Export controls

  2. Reactor design and other proliferation safe technologies eg Generation IV reactors

  3. Reactor operations

  4. Physical protection of nuclear material

  5. Multilateralisation of the nuclear fuel cycle

  1. What are the disincentives for greater industry activity in support of nonproliferation?

    1. For your company

    2. For the nuclear industry in general

  1. What are the incentives needed for greater industry activity in support of nonproliferation?

  1. Would you consider cooperating with government and international organisations on nonproliferation by:

  1. Reporting suspicious procurement efforts to national regulators or the IAEA

  2. Consulting more regularly and openly with government on strengthening nonproliferation efforts

  3. Strengthening export control regimes in consultation with the Nuclear Suppliers Group

A regional or multilateral fuel cycle

  1. Will placing the nuclear fuel cycle under multilateral or regional control help stem proliferation?

  1. Which of the proposals in the attached Annex C do you consider most promising from a commercial perspective?

  1. Would you be willing to participate in a multilateral fuel cycle regime?

Code of Conduct

  1. What are your views on an industry-wide Code of Conduct as an effective tool to harmonise industry practices on nonproliferation?

  1. Do you believe the current WNA Code of Ethics and associated industry guidelines are is as much as can be realistically achieved?

  1. Are sector specific self-regulatory mechanisms such as for the World Association of Nuclear Operators (WANO) more effective?

  1. Is it possible to measure and enforce compliance with an industry Code of Conduct? If not why not?

Government-Industry Conference

  1. Do you believe that a Government-Industry conference would provide a forum for clear industry input into government deliberations?

  1. What would you like to see on the agenda of such a conference?

  1. What outcomes from such a conference would you support (or reject)?

a) A joint declaration in support of nonproliferation

b) A joint declaration in support of nonproliferation and disarmament

  1. A list of additional steps for government-industry coordination to prevent proliferation including:

    • steps to place more aspects of the nuclear fuel cycle under regional or multilateral control

    • a more regular government-industry dialogue e.g. on the margins of the NSG

  1. Do you have any suggestions for other ways in which industry can contribute to the nonproliferation regime?

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