Note by Department of Defence for Cabinet

81 Note by Department of Defence for Cabinet1

Canberra, May 1966

Secret

Safeguards Provisions for the Australia-U.S. Agreement for Co-operation in Peaceful Uses of Atomic Energy

In Decision Number 1122 dated 24th March, 1966, Cabinet asked for ‘an expression of the views of the Defence Department on the issue whether the acceptance of I.A.E.A. safeguards procedures would significantly prejudice Australia’s freedom of action in any possible future weapons programme’.3

The problem posed by Cabinet involves the questions whether the acceptance of I.A.E.A. safeguards on the particular materials and facilities involved at Lucas Heights would— 1. directly affect Australia’s ability to pursue a nuclear weapons programme; 2. prejudice the security of any possible future weapons programme; 3. affect the use of any other materials or equipment which might be received from the United States of America; 4. affect the use of any materials or equipment which might be received from countries other than the United States of America.

The Direct Effect-Question (a)

The research reactors Hifar and Moata at Lucas Heights are not capable of producing quantities of plutonium which would be significant for weapon construction (paragraph 28 of the Cabinet Submission). If a weapons programme were undertaken it would therefore be necessary to establish other reactors and associated facilities. Hence the acceptance of I.A.E.A. safeguards on the research facilities at Lucas Heights would not directly affect a weapons programme.

Security-Question (b)

From a security standpoint a significant difference between bilateral safeguards and I.A.E.A. safeguards is that under the bilateral system the inspectors are American citizens, whilst with I.A.E.A. safeguards the inspectors may be drawn from any of the member countries. Australia would have the right to reject individual inspectors but these rights are limited as indicated in paragraph 31 of the Cabinet submission.4 The extent to which the Australian choice would in practice be limited is unknown to this Department.
In the early stages at least, an Australian nuclear weapon programme would presumably call upon the experienced staff which has been assembled at Lucas Heights. The presence of I.A.E.A. inspectors at Lucas Heights could extend the knowledge of movements of staff or changes in their activity, suggesting the existence of a weapons programme. It might be appropriate to seek the opinion of the Australian Security Intelligence Organisation if this has not already been done.

Effect on Other Material of U.S. Origin-Question (c)

Our understanding of the Australia/U.S. Agreement (paragraph 3 of the Submission) and of paragraph 29 of the Submission is that if I.A.E.A. safeguards are accepted at Lucas Heights, Australia and the United States would not automatically be committed to I.A.E.A. safeguards on any other material or equipment of U.S. origin, but the precedent could make it more difficult to reject such safeguards. However while the present circumstances and the present policy of the U.S. Government remain as they are this point is of little or no significance because the U.S. would require I.A.E.A. safeguards on any new material or facility irrespective of what happened at Lucas Heights.
In future circumstances it might suit both governments to modify their policies. Any commitment or implied commitment to I.A.E.A. safeguards could make it more difficult to do this without attracting international attention. The safeguards agreement would not of course apply should the U.S. decide to assist Australia in an overt nuclear weapons programme.

Effect on Materials and Equipment Not of U.S. Origin-Question (d)

The United Kingdom has shown little enthusiasm for I.A.E.A. safeguards but it is understood to be under some pressure from the United States to join it in applying them. If Australia was already committed to I.A.E.A. safeguards with the United States, increased pressure might be brought on the United Kingdom, but it is not believed that this would be decisive.

Comment on American Policy

It appears to this Department that the American policy on proliferation of nuclear weapons is— 1. to work towards an effective safeguards system with a maximum credibility ensured by I.A.E.A. control; 2. to persuade and if necessary to apply some pressure to its friends and allies to support an I.A.E.A. safeguards system; 3. to accept that some nations not responsive to U.S. persuasion or pressure can, if they so desire, acquire an independent nuclear capability, and that they may do so earlier than those nations which accept I.A.E.A. safeguards; 4. to give assurances to its allies and friends that they will receive protection, including nuclear protection, in time of need.

Options Available

Options open to Australia include— 1. acceptance of the United States proposal without comment. This alternative would not be recommended by this Department; 2. rejection of the United States proposal. This Department would not recommend this alternative because—
1. it would be out of harmony with our Defence and general relations with the United States;
2. it would prejudice the development of Australian capability in civil and military applications of nuclear energy;
3. it would inhibit the flow of information which is not subject to safeguards.
  1. to seek discussion at the appropriate political level on the American policy, including ome clarification as to why Australia should be subject to I.A.E.A. safeguards while EURATOM is not (see paragraph 6 of Submission);
  2. acceptance of the United States proposal accompanied by some reaffirmation by the Americans of their firm assurances of support including nuclear support in times of military need.
A combination of (c) and (d) would seem to be the most appropriate course of action. It is not considered that we need to seek any specific new formal guarantee or compensating advantage from the United States in return for accepting transfer of safeguards to the International Atomic Energy Authority. However, if this decision is approved by Cabinet it is suggested that when it is communicated to the United States at the appropriate political level reference might be made to possible limitations this could place on our future freedom of action in the development of a nuclear capability, and we could comment that our ability to accept such an arrangement flowed from our very close relations with the United States and the firm assurances which we had received of their support including nuclear support in time of military need.

[NAA: A4940, C2609]

1 The note was submitted as Submission 200 by Allen Fairhall, Minister for Defence, to Cabinet.
2 See note 1 to Document 79.
3 See note 4 to Document 79.
4 Paragraph 31 reads: ‘Australia would have the right to reject individual I.A.E.A. inspectors, and for this reason, provision has been made for prior consultation before inspectors are nominated. The Director-General of the I.A.E.A. may refer to the Board of Governors of the I.A.E.A., for its appropriate action, the repeated refusal of a Member State to accept the designation of an Agency inspector if, in his opinion, this refusal would impede the inspections provided for in the relevant project or safeguards agreement.’