Uranium Trade Off: What are Australia’s obligations?

By Jenna Gibbons
Handful of uranium pellets equal to mountain of coal

By Jenna Gibbons. This article is part of our August theme, which focuses on the environment and human rights. Read more articles on this theme.

Australia has the world’s largest resources of uranium, which we sell to 39 countries to power civilian nuclear energy reactors. As nuclear power becomes a more widely used clean energy alternative, a guaranteed supply of uranium is extremely important to the future energy security of many countries. However, this resource is also a key component of nuclear weapons, giving Australia a high level of influence and responsibility in global nuclear affairs, including membership of both the Nuclear Suppliers Group (NSG) and the International Atomic Energy Agency (IAEA) Board of Governors. The increased demand for Australia’s uranium raises important questions about Australia’s responsibility to monitor how other countries use our resources. Given the dual military and civilian applications of uranium, the debate on this issue is often focused around Australia’s obligations to prevent the proliferation of nuclear weapons and Australia’s responsibility to help combat climate change.

It is clearly strategically beneficial for Australia to trade uranium with India; the economic benefits of improved bilateral relations and access to the huge Indian market are undeniable.

Australia’s uranium export policy

From the early 1970s until the late 2000s, Australia maintained a strict policy of selling uranium only to countries that had signed the United Nations Nuclear Non-proliferation Treaty (NPT) to ensure that its resources were not contributing to nuclear weapons programs. There are only three nations which have not signed the NPT – India, Pakistan and Israel – while North Korea withdrew from the agreement in 2003. India and Pakistan are declared nuclear weapons states, North Korea is attempting to obtain nuclear weapons technology, and Israel neither confirms nor denies its possession of a nuclear arsenal. As a signatory to the NPT, Australia was unable to sell nuclear materials to these countries unless they agreed to comprehensive safeguards and inspections. This caused a great deal of bilateral tension, particularly with India.

Uranium sales to India: why the controversy?

Energy security is of paramount importance to India, but many countries have been hesitant to trade energy resources due to India’s nuclear weapons program. This has caused issues for the development of India’s nuclear power industry and its ability to feed the energy needs of its enormous population. From the early 2000s, India has looked to guarantee its future nuclear energy supply by striking a deal for the use of Australian uranium, but Australia refused unless it signed the NPT. However, in 2005 the United States (US)-India Civil Nuclear Agreement was established to allow civilian nuclear technologies and materials to be traded between the US and India without the latter signing the NPT. The key part of this US deal was an exemption from the NSG to allow nuclear materials to be traded to India for civilian purposes, which was approved in 2008.

If it were discovered that India was using Australian uranium for nuclear weapons, Australia would undoubtedly withdraw its sales agreement. However, it may already be too late as India could potentially build up a stockpile of uranium and then violate the agreement…

In line with this US initiative, Australia’s then-Prime Minister John Howard approved uranium sales to India for civilian nuclear energy purposes in 2007. However, this was swiftly overturned by Kevin Rudd upon his election later that year as Prime Minister, citing the prohibition of uranium sales to non-NPT states by the Australian Labor Party’s (ALP) platform. Interestingly, Rudd’s successor Julia Gillard successfully amended the ALP platform in December 2011 and announced that she was open to exporting uranium to India. It is clearly strategically beneficial for Australia to trade uranium with India; the economic benefits of improved bilateral relations and access to the huge Indian market are undeniable. It would seem that Howard and Gillard focused on this angle, using climate change as justification for their policies, whereas Rudd chose to prioritise Australia’s nuclear non-proliferation obligations over the potential economic and climate change benefits.

Australia’s nuclear export obligations

As part of the US-India deal, India made a safeguards agreement with the IAEA but retains discretion over which nuclear facilities will be open for inspection. Therefore, it could be difficult for Australia to monitor how its uranium is being used; every NPT signatory, except the five recognised nuclear weapons states (US, United Kingdom, China, Russia and France), must agree to a comprehensive safeguards agreement which allows the IAEA to inspect any declared or undeclared nuclear facility in that state. In contrast, India is free to restrict access to any of its nuclear facilities.

…assisting one of the world’s largest carbon emitters to reduce its environmental impact would seem like a logical step for Australia.

Under Article I of the NPT, Australia cannot directly or indirectly assist another state to produce nuclear weapons, meaning that Australia must ensure that its uranium will not contribute to India’s weapons program. Without comprehensive inspections, Australia will have to rely on India’s assurances that the uranium is only being used for civilian purposes. If it were discovered that India was using Australian uranium for nuclear weapons, Australia would undoubtedly withdraw its sales agreement. However, it may already be too late as India could potentially build up a stockpile of uranium and then violate the agreement when it has enough put aside. This could then lead to a nuclear arms race with Pakistan and further destabilise the region. While this scenario is relatively unlikely as it would also jeopardise India’s future energy security, it highlights the difficulties of objective monitoring without comprehensive inspections.

Australia’s climate change obligations

On the other hand, Australian uranium exports could help to reduce India’s carbon emissions by enabling more nuclear power to be produced. Under Article 2 of the Kyoto Protocol, Australia is committed to helping other nations, particularly developing countries, to curtail the effects of climate change. Therefore assisting one of the world’s largest carbon emitters to reduce its environmental impact would seem like a logical step for Australia. Indeed, increased nuclear energy production in India could not only help the environment, but could also improve the standard of living for many Indian people by reducing pollution and easing deficits in the electricity supply.

Australia’s climate change obligations could potentially be better served by reducing the amount of coal exported to India and increasing the trade of renewable energy technology.

However, it is far from certain that increasing India’s uranium imports would actually make a difference to its carbon emissions. At present, more than two thirds of India’s electricity is provided by its coal, gas and oil power plants. In contrast, India’s 20 nuclear power reactors supply less than three per cent of its electricity. In announcing her policy change, Prime Minister Gillard claimed that India’s government aims to produce 40 per cent of the country’s electricity from nuclear power by 2050. However, this relies upon India being able to implement the required nuclear energy infrastructure to replace the coal-fired plants. Australia’s climate change obligations could potentially be better served by reducing the amount of coal exported to India and increasing the trade of renewable energy technology. Nevertheless, uranium is essential to nuclear energy production and increasing exports could contribute to improving India’s capacity for clean energy, making a difference to the lives of many Indians as well as the environment.

To sell or not to sell?

The Australian Government has faced the conundrum of either risking potential nuclear proliferation by allowing sales to India, or damaging bilateral relations and restricting India’s access to clean energy by refusing to sell. The Rudd Government prioritised Australia’s non-proliferation obligations over the Indian bilateral relationship, whereas the Howard and Gillard Governments gave the green light to uranium sales to India in spite of nuclear proliferation concerns. A formal agreement between Australia and India is yet to be reached after Prime Minister Gillard’s policy change, so it remains to be seen whether Australia will seek to attach extra conditions to the sale of uranium to counter the proliferation risks of trading nuclear material. In any case, this issue highlights the interesting debate surrounding the use of Australia’s resources by other countries, Australia’s obligations that flow from it, and the energy security concerns of highly populated nations like India.

Jenna Gibbons is an International Studies Honours student at RMIT. She is researching Australia’s uranium trade with India for her thesis.

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