2011 carnegie international nuclear policy conference · the nuclear suppliers group is a group of...

2011 CARNEGIE INTERNATIONAL NUCLEAR

POLICY CONFERENCE

THE FUTURE OF THE NUCLEAR SUPPLIERS GROUP

TUESDAY, MARCH 29, 2011

11:00 AM – 12:30 PM

WASHINGTON, D.C.

CHAIR:

Joan Rohlfing

Nuclear Threat Initiative

SPEAKERS:

John Carlson

Nuclear Threat Initiative

Richard Goorevich

U.S. Department of Energy

Henk Cor van der Kwast

Ministry of Foreign Affairs, Netherlands

Transcript by Federal News Service

Washington, D.C.

Transcript Not Checked Against Delivery

ROHLFING: Good morning. If I could have everyone’s attention, I think we are ready to start. We are absolutely delighted to see a full

house here this morning, and a lot of friends and colleagues in the audience. Let me – just a note on format, rather than formal presentations, we’re going to try and have a facilitated dialogue, going through a series of questions that we think will be of interest to the audience. And we’ll take approximately half of our time doing this facilitated discussion, and then we’ll open it up to question and answer from the audience. There is a mic you can see on the aisle here. I’ll ask folks to line up, those who have questions, when we get to that point.

Let me start by introducing our panel this morning. I’m Joan Rohlfing. I’m with Nuclear Threat Initiative.

We have with us, we’re very lucky to have with us a distinguished group of panelists, deep expertise on the nuclear suppliers group. Let me introduce, in the order that they’re sitting.

[00:08:06] John Carlson served as the director general of the Australian Safeguards and Nonproliferation Office, and

was appointed the chairman of the standing advisory group of safeguards implementation by former IAEA director, Mohammad ElBaradei – director general, excuse me – serving in that capacity from 2001 to 2006. He was also the alternate governor for Australia on the IAEA Board of Governors. John is a member of the advisory board of the International Commission on Nuclear Nonproliferation and Disarmament, the founding chair of the Asia Pacific Safeguards Network, and a fellow of the Institute of Nuclear Materials Management. John also is currently advising the Nuclear Threat Initiative on international nuclear security, safeguards and verification, and management of the nuclear fuel cycle. He is also a visiting fellow at the Lowy Institute in Sydney, Australia.

[00:09:03] Rich Goorevich, Richard Goorevich – excuse me, Rich – (laughter) – is a senior – Rich, that’s a very bad

sign. They’re already laughing – (laughter) – and we haven’t even started the discussion. Rich is a senior policy advisor for nuclear fuel cycle and regulatory issues in the U.S. Department of Energy’s

National Nuclear Security Administration, where he is responsible for providing policy and technical guidance on international nuclear affairs, nuclear safeguards, nuclear and WMD dual use export control policies and international physical protection requirements. He frequently serves as a negotiator for U.S. nuclear cooperation agreements and has served as a delegate to the IAEA General Conference and the NPT Review Conference. Rich currently chairs the consultative group of the nuclear suppliers group.

[00:09:54] Henk Cor van der Kwast is the head of the Nonproliferation, Disarmament, Arms Control and Export

Policy Division at the Ministry of Foreign Affairs in the Netherlands. He previously served as the deputy head of the political department for Western Europe and as section head for Southern Europe. From 1999 to 2003, Van der Kwast was the counselor for political affairs at the permanent mission of the Netherlands to the United Nations and other international organizations in Geneva. Van der Kwast represented the Netherlands in the PrepCom of the Organization for the Prohibition of Chemical Weapons. He holds a graduate degree from Johns Hopkins University School of Advanced International Studies.


[00:10:39] We’re really pleased to have all of you here this morning. Let me start by offering a very bare bones outline

or introduction of the Nuclear Suppliers Group. I realize many of you in this audience are deeply expert on the suppliers group, but some folks will be coming to this to learn, so we’re going to assume not everyone is an expert. The Nuclear Suppliers Group is a group of nuclear supplier countries that seek to contribute to the nonproliferation of nuclear weapons through the implementation of guidelines for nuclear exports and nuclear related exports. The NSG guidelines are implemented by each participating government in accordance with its national laws and practices.

[00:11:30] Decisions on export applications are taken at the national level in accordance with national export licensing.

It’s important to note that the NSG is a voluntary organization. It’s not a legal arrangement or a treaty. The NSG was founded in 1974, in response to the Indian nuclear tests earlier that year. The tests demonstrated that certain non-weapon specific nuclear technology could be readily turned to weapons development. And I should also mention that when it was first formed, it had seven members. Today, the NSG currently has 46 members, which has implications for its decision making process and the issues before it.

Let me just mention, in our discussion this morning, we’re going to try and touch on a series of what I would

consider to be the hot button issues that the NSG has before it right now. We’re going to talk about issues related to decision making the decisional process wit in the NSG, we’re going to talk about issues of membership, and, in particular, NSG relations with India. We’re going to talk about discipline issues, and in particular, the Chinese reactor sales or potential sales to Pakistan.

We’re going to talk about north-south acrimony and what that means for how NSG conducts its business.

We’re also going to talk about the status of the debate on enrichment and reprocessing technology transfers, and finally, the additional protocol, and should the additional protocol be a condition of supply for trigger list items. I think at the – weaving throughout this discussion this morning, it’s clear that there’s a much bigger issue. And let me just kind of put it on the table at the outset and we can come back to it at the end – excuse me – and that is, there are questions about the continued effectiveness of the NSG, as well as the relevance of this multi-lateral arrangement. Is it still relevant? Is it still necessary, or has it outlived its usefulness?

So with that, let me turn to my colleagues here on the panel and pose the first question. [00:14:02] Rich, recently the decision making process has become stuck as members have been unable to agree on new

criteria for technology transfer. Can you discuss the decision-making process in the NSG, in particular, as the number of members grows, does the consensus rule for decision-making become too high a bar? How can we keep the NSG’s decision-making processes robust as it adds new members?

[00:14:40] GOOREVICH: Well, thanks, Joan. And first, before I get started, let me thank Carnegie for hosting the

panel and for inviting us all here to talk about, a little bit about the NSG. It’s unique. You get invited to these panels, and sometimes you don’t know who you’re working with, but on this panel, I’ve had the great fortune to


have worked for Joan at one point when you were at The Elite, and have worked with Henk Cor and John here for a number of years, both at NSG and on other bilateral nuclear issues.

So I think the job that we have today is to show a little bit of leg about the NSG, but if you think we’re going

to lift the whole skirt, you’re wrong. (Laughter.) ROHLFING: I’m glad I’m wearing pants today. GOOREVICH: Yeah. (Laughter.) GOOREVICH: The consensus rule in the NSG and where are we, how do we make decisions? The only

rule in the NSG about decision-making is that consensus is required among all the participating governments. How we come to a decision and how we formulate recommendations and decide to move things forward is that we have a structure that’s basically a two-tiered structure. We have the plenary, which is the political body – it meets once a year – that takes all the decisions by consensus.

[00:16:07] And then we have, below that, the consultative group, which is the group that I currently chair, which sort of

formulates and discusses all the issues that are before the group. The issues that tend to come forward in both the consultative group and that the plenary uses – the plenary discussions tend to be extremely technical, looking at the control lists and what needs to be changed, what needs to be adjusted, or they tend to be more about the guidelines and more policy-related, and relations about the conditions of supply. And essentially, you know, what happens is that somebody brings, has an idea.

[00:16:45] They either want to change something on a control list, or they want to change something in the guidelines

or a condition of supply, or has a concern they want to talk about. And they’ll either come to the plenary or they’ll come to the consultative group with a suggestion for an agenda item, and, essentially, an idea on how to frame the debate. At that point, then, the group will make a decision on whether that they want to talk about it or not. If, when they decide that it is something that they want to talk about – and very rarely is there anything that we won’t talk about that comes forward – the plenary will, if it is raised in the plenary, will essentially remand it down to the consultative group to have a technical discussion about it.

[00:17:28] Or if it’s the consultative group that takes it, it will essentially then have it, have the issue, discuss it,

formulate a recommendation and forward that to the plenary for a final decision. The way the group operates is that there is the possibility for the plenary to provide the decision-making authority to the consultative group, if it so chooses to do so. It could be because it’s a timely issue, something that requires almost immediate discussion, and that can happen.

The only other thing that is there in terms of decision-making is establishment of work groups. Let’s say it’s

an extremely technical issue and requires a meeting of, for example, machine tool experts to meet over a year to discuss something. The consultative group does not have the power to create working groups. Only the plenary


does. So the plenary would create the working group. The working group would then report its findings to the consultative group that would discuss it and then move it up to the plenary for a final decision.

[00:18:34] But the issue of whether or not consensus can be achieved by 46 governments – it’s one we’ve read about in

the press. It’s one that we’re painfully aware of in the group. It’s also one that I think is a bit misunderstood, and I think people at times just sort of equate the idea of consensus either from the IAEA board of governors, or from, you know, the NPT review conference, and sometimes try to put on the NSG’s decision-making process some of the concerns that are associated there.

[00:19:00] The idea of consensus was established at the very beginning of the group, when there were seven members

and the group and the guidelines were established. The importance of consensus and unanimous view in the NSG should not be underestimated. In fact, it’s in the guidelines. It’s the last paragraph of the guidelines. It says that all decisions will be taken by unanimous consideration, and then especially notes the requirement for safeguards as conditions apply. Why is that?

Well, I wasn’t around when it was established, but from, as I understand it and having witnessed it for a

number of years, I think it’s pretty evident why. The NSG really operates because we’re essentially like-minded states. Try and balance two competing interests – our nonproliferation concerns, or our nonproliferation interests, associated with our commercial interests. And if you read the guidelines, both part one and part two guidelines, the first paragraphs of both really try to explain that. And they talk about the fact that the job of the NSG isn’t to limit trade. It’s in fact to allow peaceful nuclear transfers to take place.

[00:20:24] In the part two guidelines, there’s actually a phrase that says that these guidelines are not to be – these

guidelines should not be applied in a way that unduly affect legitimate, peaceful uses of nuclear power – something along those lines. So there’s this healthy tension within the group at any time between non-pro and commercial trades. And it’s this discussion, and it’s these debates that we have within the group that essentially allow us to have a balanced approach when it comes to changes to the guidelines or changes to the control list.

[00:21:03] And it’s this healthy tension that, I think, has really helped the NSG sort of develop itself and to be

recognized because when you look at the U.N. Security Council Resolution 1540, and you look at other things where the people point to the guidelines and say, you know what? These do work on a broader international basis. These are guides that the governments should follow when making similar types of nuclear transfers. And so the question becomes, you know, has the group grown too big? Are the issues too important to leave it to a consensus decision because people are becoming entrenched in their positions?

Well, one, I don’t believe that people are becoming too entrenched in their positions. I believe that there are,

as we’re going through our agenda, concerns are raised and that we have to talk about it and we have to make sure we get it right. Why? Because we don’t want to unduly affect legitimate transfers of this nuclear energy.


[00:22:03] And I think number two is this. And I think that those people who, for example, watch and are observers of

what happens in decision when they’re made by vote is that the decision and the politics and the discussion around the decision, when it’s not made by consensus, tends to be about the politics of the vote itself. Are you going to vote for me on this one and I’ll vote for you on that one. And it ceases to be about the issue.

That will erode the like-mindedness of the group, and I think that’s one of the main reasons that the group

will never agree to remove its consensus decision. The other reason that I’m fairly confident the group will never abandon the consensus decision-making process is for the very simple reason that it will require a consensus to get rid of the consensus decision. (Laughter.) And so you can kind of guess how that would turn out. But I think that that’s the end of my –

[00:23:00] ROHLFING: Thank you. John, can you give us your views on the implications of bringing India into the NSG? Would that undermine

the consensus decision-making process? And maybe a word about, has the waiver for India been damaging to the NSG’s credibility and its mission?

CARLSON: Thank you, Joan. I must say, I’ve learned from a great master this morning, Senator Kyl, how

to deal with a hostile audience because – (Laughter.) I have a feeling that some of the things that I might say might be fabulously popular. But let me start off by

saying that it is ironic that the NSG was formed in response to the Indian Nuclear Tests in 1974, and now we have not only the Indian exception but serious consideration to bring India into the group.

[00:24:09] There’s no doubt that bringing India into the NSG will prompt a rethink of the NSG mission. Dealing with

the question, was the waiver damaging? I think it’s almost the universal view in the nonproliferation community that it was, but I would like to step back a bit and put what I consider to be a pragmatic view. And the pragmatic view is as follows. The application by the NSG of the full-scope safeguards condition was clearly designed to encourage as many states as possible to accept full-scope safeguards by becoming parties to the NPT.

I think, arguably, that that policy has run its course. We’ve come to three or possibly four, depending on

your view of North Korea, three or four outliers right now, three or four who are outside the NPT. And no amount of leverage is realistically going to bring them into the NPT anytime soon. So I think it’s necessary to think beyond full-scope safeguards at what other mechanics are there to advance our collective interest. In the case of India, we had other very important considerations. India is a country with a large and growing energy demand, and clearly issues like climate change and the implications for nuclear safety, if India continued with a wholly indigenous nuclear program, become very important considerations. And I think, responsibly, governments need to take those factors into account.


[00:26:28] I think now the NSG needs to focus on its core mission, and its core mission has always been to ensure that

nuclear transfers do not contribute to proliferation. And the issue now is, how would we interpret that in a world where India may be in the NSG, and how do we deal then, with the remaining outliers? And I think we’ll come to discuss Pakistan shortly. Will the presence of India undermine consensus? Clearly, there’s going to be a problem, if any matter being considered by the NSG would impact adversely on India.

We can’t expect India to vote against itself, I don’t think. Although, who knows? Maybe India would take a

wider view of its international responsibilities. That’s hard to predict. But I think there’s very good reason for not actually having India in the NSG until current issues where India might take a different view are still being resolved. And the obvious area here are the conditions for transfer of sensitive nuclear technology enrichment and reprocessing technology.

To invite India in before the enrichment and reprocessing laws have been settled would be asking for trouble

with respect to achieving consensus. And so there’s a good argument for not bringing India in until afterwards. And I’ve asked, might it be possible, as part of a deal for bringing India in, to negotiate some prior understanding with India about how it would behave with respect to such issues in the future?

[00:28:33] Finally, let me say on consensus that there is precedent in the NSG where consensus is not possible for

members to apply stricter rules. For instance, on the issue of enrichment and reprocessing transfers, the members of the G-8 have decided to apply the concepts that are being debated in the NSG; they’ve decided to apply those ahead of reaching consensus.

[00:29:13] And there’s certainly nothing in NSG practice that stops that. There’s a rule on no undercutting, so that

members of the NSG are not supposed to do less than what has been agreed, but there’s certainly no inhibition at all in doing more. So I wouldn’t say that the consensus rule, in itself, prevents NSG members from taking actions they consider appropriate. Thank you.

ROHLFING: John, actually, if I could ask you to come back – and you mentioned Pakistan. Can you speak

to the issue of Chinese reactor sales to Pakistan? Doesn’t this violate the guidelines? And what are the implications of these sales for NSG cohesion and discipline?

CARLSON: I think the situation with China and Pakistan in nuclear deals highlights the nature of the NSG,

that it’s not a treaty-based organization. It doesn’t have binding rules, that there’s a way of reconciling a collective interest of its members. China is citing what’s known as grandfathering for supply of reactors to Pakistan, arguing that this represents a pre-existing commitment. Grandfathering is permitted under NSG rules, so I think there would be a lot of controversy about whether this is – whether what China is doing actually fits in with established NSG practice on grandfathering.

[00:31:06]


To many, I think it is anathema to see Pakistan, which frankly, has an appalling track record with respect to proliferation, benefitting from nuclear trade. And I think also many would question the wisdom of supplying reactors into a country where terrorism is an ongoing concern, and where there are concerns about future political stability. Perhaps the nuclear safety issues that have arisen from the Fukushima Daiichi accidents may give China pause in its intent to supply reactors into Pakistan.

But if China is determined to proceed, I think we have to ask, how can we make the most of the situation?

Can we secure China’s agreement on conditions that we might want to see applied? Not only that the reactors have to be under IAEA safeguards – and this is China’s policy anyway – but also to perhaps apply the strongest possible physical protection arrangements, and maybe also to look very carefully at what the safety arrangements would be for those reactors. So I’d like to approach it as a kind of pragmatic issue. If China is determined to proceed, how can the rest of the NSG members apply persuasion to get something of benefit out of the situation?

So I’m not talking so much of a Pakistan exception, but rather, perhaps, we have to accept the reality of

China’s stance in the knowledge that we’re actually talking about two, or at most, three reactors. And as I said, perhaps we maybe ought to get some benefit out of what appears to be a bad situation. Thank you.

[00:33:31] ROHLFING: Thank you, John. Hank, we understand that there is a great deal acrimony between the more advanced nuclear supplier states

and some states in the non-aligned movement, in part because of the view held by some that the NSG is discriminatory and perpetuates inequity by limiting access to technology. Are there steps that both sides can take to try and overcome this divide?

[00:33:58] VAN DER KWAST: Yes, I think there are several – (inaudible). First of all, we have to realize that the

world is changing and the NSG is affected by that. And what we will have to do is to see how we can keep the core mission of the NSG, which it has been said before is nonproliferation, can be dealt with by status and by role of the NSG in this changing world. We have to see, with economic realities and with technical developments, whereby we do not have one or two powers, but where we have more upcoming powers.

Now, we have to see how we can do that. If we look back to the NPT conference, we had a couple of

lessons at the NPT conference in May 2010. First of all, it was possible to get agreement. Two, there is greater attention than ever before on the peaceful use of nuclear energy. Three, nonproliferation is less popular than peaceful use, and there was, for instance, no agreement to any reference to export-control regimes in the NPT thing, which we thought was really a pity because that is the nonproliferation part.

[00:35:24] And four, we have an action program to be evaluated in 2015. Now, the point is, how can we change this

paralyzing situation? On the one hand, we think that the NSG should keep its core mission. On the other hand, we have other states, and India was mentioned, that are interested to become part of it. But there are two sides of that. On the one hand, when you want to become part of a system, you have to respect the system also. And that is the


big problem, what we see nowadays, that many states are interested in getting more of nuclear energy, getting more development of their commercial interest –-which in itself is a good thing and it’s a logic thing.

But it means that in the framework of the nonproliferation system as we have it, that you need to balance the

two. Now, how can we try and create a new balance there? How can we try and get more states convinced of the importance of nonproliferation, and indeed, to commit to nonproliferation? First of all, I think engagement is an important element. We have the outreach activities by the NSG. We think – and this is one of the things we want to do during our, in the presidency from June on, is we can do more in a systematic outreach to a number of countries – very specific. What sort of things, what sort of problems are there and how can we address them? And we should not be afraid to address those points.

[00:37:13] Engagement is also see how you can do more with certain states. And I find a good example there. There’s

a nuclear security summit, and it’s the global initiative to combat nuclear terrorism, where you have India, Israel and Pakistan all participating in it, and I think we should try and find more of those possibilities where we can engage states. Power comes with responsibility. Nuclear power comes with great responsibility, and that is what we should develop more in the coming years. I think, for the west, the important thing, and particularly for the NSG participating governments, is that we indeed are underling the important of nonproliferation, and that we do not let that slope away.

That implies also that states will do, and particularly those states that are participating governments, but also

states that are interested, like India, in becoming a member of the NSG, that they indeed see to a number of important elements, which is, for instance, export control, law enforcement, establish criminal penalties for violations of export control, where possible, share intelligence about possible violations. Further on, we have to see the control lists. What can you do? How can you work on that? So we think there are a number of things that can be done, first of all by the states themselves, and secondly, through outreach through the NSG.

[00:39:00] ROHLFING: Thank you. Rich, the NSG has been discussing new rules for the transfer of enrichment and reprocessing technology for

a number of years now. Can you briefly describe what that debate has been about, and what are the prospects for agreement this year?

GOOREVICH: Well, I, sure, I can certainly talk about sort of the discussion that’s been going on and what

are the issues that are driving the debate. I think, at least from what I’ve read in the press, that there’s a misconception at the NSG, in its effort to strengthen the guidelines by dealing with enrichment and reprocessing, are somehow trying to create a new standard within the guidelines in regards to transfers of sensitive nuclear technologies.

In fact, it’s the absolute opposite. We’re not trying to create new standards as much as trying to clarify the

standard that’s been there since the beginning And specifically, what I’m talking about is that if you look at the guidelines themselves, it’s paragraph six of the Part One guidelines, it clearly says that when it comes to transfers of sensitive technologies, enrichment and reprocessing, suppliers should exercise restraint.


The question has become, what does that mean? What does restraint mean, in terms of implementation of this policy on a national level? And that’s what the group’s really been trying and focusing its effort on, is defining what is meant by the restraint that’s already called for in the guidelines. And there’s been various difference views of that. For some governments, restraint means, because of how they view enrichment and reprocessing and how they view the technology associated with enrichment and reprocessing as being very classified in nature, that restraint means no transfers.

[00:41:02] For others, they view it in saying, well, we’ve tried to acquire this, and restraint has meant, essentially, that

we’ve been sort of blocked out of the market, from gaining access to this technology. And so, what the group has really tried to do and tried to come about, is to, looking back again at what we say at the very big top of the guidelines, which is that we do not want to unduly affect legitimate transfers of peaceful nuclear technology, is to essentially try to determine and define what is meant by restraint.

And within that debate, within that discussion, you end up having a multiple number of issues sort of work

their way into the discussion. It’s everything from all the information that we have associated with clandestine procurements of enrichment technology and processing technologies, procurement attempts, versus the concerns of energy security concerns and discussions that people were having that, if there is global nuclear renaissance, if the number of deployed reactors doubles, will there be enough capacity to provide the fuel for those reactors?

And will the failure to be able to ensure that the fuel supplies for those deployed reactor fleets doesn’t in and

of itself become a choke point to energy security requirements, especially clean energy security. The issue is also centered around the fact that there is a commercial industry with regards to the enrichment business, and how do you implement something that doesn’t upset that industry, in a way that won’t unduly affect it?

[00:42:54] Some of the ideas that came out that are well known – the idea of a ban, for example – could you implement

it in a legal way? You know? A good portion of the members of the NSG happen to sit within a Common Market. Right? And the question becomes, could you implement a ban within that Common Market? So essentially it’s those legal issues that come forward. You had over governments that potentially were looking at, that had vast uranium resources, and wanted to keep open the door that at some point in time, that they would want to add value to those natural resources . Right?

CARLSON: Right. (Laughter.) GOOREVICH: So, and so as you can see, there’s just a tremendous amount of questions that come into it,

especially with something that, at the time that we’d been having this debate, that we’re looking at a global expansion and how we’re going to do the global expansion of the civil nuclear fuel cycle. And so, you know, what the NSG tends to do, at times, is we tend to look at what works and what doesn’t work. And we tend to look at the commercial models that are out there.

And when you look at them, in terms of legitimate commercial transactions that have taken place with

regards to enrichment, and, especially enrichment technology, you tend to look at, you know, Russia’s transfer to China. You look at URENCO deals, or the ETC deals, you know, the United States. And that provides you an idea of exactly how the market is working and how you can go forward, potentially, in moving it forward.


[00:44:35] So where are we? Well, I think as the press has reported, you know, the idea of a ban, obviously, is not one

that the NSG really found, as a whole, has found that appealing to the group. So, where the group is, is that in terms of trying to define restraint, we’re really looking at ways to develop a criteria-based approach to be able to really build upon the success of the guidelines and sort of laying out objective criteria, and to find ways to mitigate the proliferation risks associated with the sensitive natures of aspects of this technology.

But have we gotten it to the point where I think we’ll be in agreement this year? I’m eternally hopeful.

Being the chair, I guess my job is to be, you know, part traffic cop and part cheerleader , and so I, you know, we encourage everyone to move forward. Do I think that we’ve pretty much addressed all the issues that had been brought to the table? I think the group has. But have we gotten it exactly right where we can move forward on a consensus decision? That remains to be seen, exactly whether or not we’ll get the consensus decision this year.

[00:45:57] I think what’s important isn’t when we get it, but how we get it, and making sure that we get it right. And we

get it right because it’s so important in this sort, in addressing a lot of concerns that people have raised from the nonproliferation side. And it’s also important to get it right because, let’s face it, we’re going to have a discussion about where we’re going to go with clean energy and nuclear is part of that discussion. And we need to make sure that we don’t make policy decisions today that will make it harder to go ahead and implement something that we want to do later.

And that’s what the NSG’s about, is not, is making sure that we look at the issue, not only from the

technology standpoint, but also where does it fit in the civil nuclear fuel cycle? And how is this going to be implemented? And what will be the long term effects on that implementation, not only from a nonproliferation standpoint, but also now, from an energy security standpoint and from a commercial aspect for our individual industries. And, I think that pretty much sums it up, I think, for where we’re at.

ROHLFING: Thank you. There’s been debate over whether adoption of the additional protocol should be

a condition of supply for trigger list items. John, can you give us your views on that debate? What should the NSG be doing to further the universal

application of the additional protocol? And why is this even a debate within the NSG? CARLSON: Thank you, Joan. Let’s deal with the last question first. Why is it even a debate? I must say,

I’m rather amazed that it’s a debate because it’s just so self-evident that all governments should be promoting effective safeguards. But the reason it’s a debate is that two members of the NSG, Brazil and consequentially, Argentina, because of a bilateral arrangement, do not have additional protocols. And therefore, under the consensus rule, they haven’t agreed to making the additional protocol a condition, and a considerable amount of effort has gone into finding some sort of a formula that can accommodate them.

[00:48:32] I could talk for the rest of the morning about the additional protocol, and rather than do it, let me refer you

to an article that I have coming out, I think on Friday, in VERTIC’s Journal, Trust and Verify, which analyses the


additional protocol issues in some detail, and argues why the additional protocol is not optional, contrary to some other views you may have heard yesterday. But I think the nutshell of it is that non-nuclear-weapons states that are NPT parties have undertaken to accept IAEA safeguards to demonstrate certain things, to demonstrate that all their nuclear material is being used for non-explosive purposes.

And the IAEA has made is clear that without the additional protocol, the IAEA is unable to give conclusions

that encompass the possibility of undeclared nuclear activities. In those circumstances, I don’t think it’s acceptable for governments to be promoting second grade safeguards, to put it bluntly. And I think nuclear suppliers have a responsibility to support safeguards that are effective, rather than safeguards that are not. And I think that’s what it comes down to. And read my article.

(Chuckles.) [00:50:13] ROHLFING: Thanks. Coming down to the last couple of questions, Henk Cor, you mentioned earlier that

the Netherlands is taking over the chairmanship of the NSG in June. Can you share with us what aspirations the Netherlands has for its chairmanship? Where do you see the priorities and opportunities?

VAN DER KWAST: Thank you. Well, as was explained already, the NSG decides by consensus. So we can

never do more than everybody agrees on. This will be a challenge. We, first of all, want to be an honest broker, in order to see how we can strengthen the status and role of the NSG in a changing situation. Some concrete elements we are looking at – and we will consult with all participating governments on those – are the following issues. How can we increase efficiency in the work of the NSG? How can we deal with outreach? I mentioned that already before. And can we have different types of outreach to different types of countries – countries that are completely out, countries where we want them to use the rules, although they’re not a participating government was in and it’s not likely that they will be in the short term. But it’s important also to engage those countries.

[00:51:51] Then the confidentiality issue. That is an issue which is peeping up time over again. On the one hand, it is

important to respect that, of course. On the other hand, if there is no transparency at all, you get more and more the idea that this is a club that decides by its own and is just doing some things. So there we need to find a balance. And finally, to look at different lists. We think it’s very important to have the listings up to date and to make them as realistic as possible.

ROHLFING: Thank you. That’s very helpful. I realize people are eager to ask questions. Let me just post

one final questions to each of the three of you. I think Henk Cor has already articulated the answer in part, and that is, in two minutes or less, what do you each think should be the priorities for the NSG over the next couple of years? And also, do you see particular opportunities over that same time frame that the NSG could take on? John?

CARLSON: Well, very briefly, I’d make the point that, in the absence of the NSG, there is no other

mechanism for coordinating national export policies and controls and also, importantly, information sharing on procurement efforts, and so on. So the NSG continues to have a very important role.


I think the priorities are to bring the trigger lists up to date, especially for sensitive items, to work towards strengthening export controls within the NSG members, but also to be active through outreach to others in capacity building for customs and other export control activities in the international community and more broadly.

[00:54:01] ROHLFING: Thank you. Rich. GOOREVICH: Well, besides a pay raise for the CG chair – (Laughter.) I think what, I think both Henk Cor and John touched upon it. It’s, I think, in my estimation, it’s the list

review. The lists haven’t been touched in close to 10 years, I mean, in a comprehensive way. And there’s been some changes made as information has come out from IAEA and other sources about clandestine efforts to control things or where people have pointed out loopholes. But we haven’t looked at it in a comprehensive way in a long time. And there’s been a tremendous amount of advancement in the fuel cycle, especially in the sensitive areas, that we’ve looked at.

And especially as people look to the future, to more proliferation resistant systems, the idea is that those

systems are proliferation resistant. They’re not proliferation avoidance. And so the idea that you’d still want to have export controls on those systems, you’d want to understand those systems and understand the component parts and the technologies on them, I think it’s vital for NSG to take a look at them from a technical aspect.

And I think, from the outreach standpoint, I think one thing that the group does a very good job of talking

with governments, and capacity building for customs and others. We’ve really, over the last couple of years, really gotten our act together on that. But the one thing I’d like to see, and I think it’s something that isn’t really talked a lot about in the export control world, is the idea of industry self-regulation, and best practice is for the industry, when it comes to export controls.

[00:55:39] And one of the things that, you know, that I keep looking at is, for example, on the environment side of the

equation, you know industries have really gotten it and really done a very good job to try and promote best practices in the environmental, where you look at the blood diamond industry and how to stop that. The question becomes why can’t industries that are associated with nuclear, related nuclear dual use items, kind of get the same, move forward in the same way. I think part of the problem is groups like the NSG have to be prepared to help them do that.

ROHLFING: I think you’ve already outlined priorities from the perspective of the Netherlands. Do you

want to add anything about opportunities that you see, or just any thoughts on the broad question of, is the NSG still relevant?

[00:56:30]


VAN DER KWAST: Thank you. On the priorities, I have little to add to what I mentioned already. In general, I think the energy is a unique – and that is – it’s often criticized. But on the one hand, it is not a legal body. On the other hand, it works on the basis of rules, and it is a political group. Now, that give you an enormous advantage in acting towards current political situation, towards developments, whereas, we have with some other international organizations, we have a core body of law which, is not adapting to the current situation. So we think that it still has a lot of possibilities, and that should used. Thank you.

ROHLFING: Thank you. So, thanks very much to each of you for your comments. We’ll open it up now to questions from the floor.

And let me ask those of you who have questions, please to come to the microphone on the center aisle. There’s one microphone here.

(Laughter.) Oh, my goodness. Well, given how much interest there is and how many questions we have here, what I will

do is take three questions at a time . That’ll allow some of you to sit down and hopefully, facilitate moving through this more quickly. Let me ask you each, please, before you ask your questions, if you would introduce yourself, we would appreciate that.

Yes, please. [00:57:58] Q: Jessica Varnum from the Monterey Institute. John, I share your enthusiasm for universal adherence to the additional protocol, and if only wishing were to

make it so. I suspect that in addition to the challenges you mentioned concerning the suppliers who are not members, there will be sympathy, certainly, among those suppliers, and potentially among others as well, for many countries outside of the nuclear suppliers group, especially in the non-aligned movement, who have expressed extreme upset with the idea of the additional protocol being required, and that there be the unintended consequence, in fact, that if it were forced on countries like Egypt, at least from a supply perspective, of impacting the review process for the NPT and other regimes in a negative fashion.

But I guess my major question is, do you even see it as feasible to move something like this forward within

the NSG? And the main reason I wonder about that is, the precedent set by the United States with the U.S-Indian nuclear deal. How does a country like the United States make that kind of exception, and then move one and say, but we’d really like to see much stricter nonproliferation standards applied, and won’t you please agree to that as well? Thank you.

ROHLFING: Next question, please. [00:59:09] Q: Dan Horner from Arms Control Today. John Carlson’s assessment seemed to be that the China-

Pakistan deal is unstoppable, so I just wanted to ask the other two panelists if you shared that assessment, and if not,


what is being done or what could be done to persuade China not to pursue it? And if you agree with the assessment, what is your version of the making the best of a bad situation, as John Carlson – (inaudible.) – Thanks.

ROHLFING: Thank you. Deepti? Q: Deepti Choubey with the Nuclear Threat Initiative. So one of the interesting parts of the NSG is that it is a political grouping, yet it has its very operational

mission. Yet, it’s also frequently caught up in geopolitical struggles. And Mark Hibbs, who’s in the audience, and who I’m going to reference, has argued that if the Chinese go forward with grandfathering in the reactors to China, that perhaps we can use that opportunity to get other things from the Chinese – so maybe getting them to lean on the Pakistanis to open discussions in the CD, et cetera.

So, my question is either for Henk Cor or for Rich, which is, what do you see as really being the prospects of

using kind of NSG politics like that to move for adjacent agendas? So as India, for instance, wants the recognition or prestige of being on the NSG, you know, can we kind of start to set a precedence of, great, you can do that, but, by the way, we’re going to exact a cost from you.

[01:00:35] ROHLFING: Thank you. Let’s pause there and allow our folks to answer the questions. John , do you want to tackle the first question about the additional protocol, and the feasibility of moving

forward in the NSG? MCARLSON: Yes. I think an agreement is almost there, actually, in the NSG. So I wouldn’t see it as being

an impossible task. And I’d also make the point that the overwhelming majority of, well, the majority of NPT parties have certainly signed the protocol. There are 139 protocols, and that if you look at non-nuclear weapon states that have significant nuclear activities, over 90 percent of those have signed, and over 76 percent have ratified. So there’s already substantial international acceptance.

And we’re, in the hold-out category, we’re talking about probably a handful of states – Argentina and Brazil,

who are in the NSG, and who will be part of the resolution that is being worked towards in the NSG. We have –(inaudible) – which Jessica mentioned, Syria, Venezuela, North Korea, and then we have Iran which is signed but suspended, and Algeria, which had a draft approved by the IAEA board, but hasn’t signed yet.

[01:02:09] So it’s a small number of states. Dealing with those states, I think we have to do more, we collectively, those

of us who do, I will do, who have some influence to show that it’s actually in their self-interest of each state to have strong set guards. They’re not to approach it as coercion, but rather to do a better job. But for instance, explain to Egypt why it’s a good idea to have effective set guards in the Middle East. It’s a no brainer to say that we don’t want it. We don’t need it. What does it think is happening in Iran? So I think there’s a need for much better diplomacy here. But I’m quietly confident that we’ll get there, and a little bit of leverage will help, but we need to master our argument schedule as well.


ROHLFING: Let me try and bundle the next two questions, because I think they’re related, the question from Dan, Dan Horner and Deepti Choubey, and let me ask both Rich and Henk Cor to take these two questions on. The first part of the question is, do you agree with John Carlson’s assessment that the China sale of reactors to Pakistan is a done deal?

And the second part of the question, if it is a done deal, can we leverage any concessions out of that deal?

And I think Deepti’s spin on this question is, is there a prospect for leveraging different behavior from the Chinese, for example, vis-à-vis, Pakistan, that might affect the geopolitical balance as opposed to looking for a more narrowly, a more minor, technically narrow concession?

Rich? [01:03:59] GOOREVICH: Thanks. Do I agree with John’s assessment? I think in some ways, I agree with what John

said, but I’m not sure that what John said was what was the question that came to us. And I want to be extremely cautious with how I said this, but I’ve been at DOE long enough, and I’ve been working with nuclear industry long enough to know that, when it comes to building nuclear reactors, it’s really not a done deal until it’s actually done.

And I think that there’s enough projects that have been started and stopped, and started and stopped and

started and stopped for a lot of reasons, including the horrific events that are going on right now in Japan that we’re all keeping a very close eye on. As John said, there’s a lot of issues that I think, that are surrounding, whether or not this deal’s going to go forward before we can say that it’s a quote, “done deal” and moving forward. And really, the only people who know if it is a done deal or not are going to be the two partners. So, I’m not sure that I fully share what the assessment of what John tried to say.

ROHLFING: We’ll let John take a crack at it, too, in a minute. GOOREVICH: Yeah. ROHLFING: But do you want to say anything about concessions? [01:05:12] CARLSON: Not really. Rich has got it all. ROHLFING: Ok. GOOREVICH: Did you want to talk about the leverage side? CARLSON: We can go on to that. GOOREVICH: I’ve not, I don’t know if the NSG, as a group, could ever leverage anything from anyone. I

think that individual governments come to the NSG – and I think you have to be very careful here. The NSG is not the COCOM. There’s no black ball, there’s no vote. We come, we set the standards, wet set guidelines, we promulgate these standards and these guidelines. There’s an aspect of transparence with regards to each other’s


nuclear cooperation, and that’s what will be discussed with regards to China, if they decide to go forward and do this with Pakistan.

There’s no vote, and because there’s no vote, there’s no, you know, what happened? Whether or not

something can be leveraged, I don’t see it, the group as acting in that capacity. Now whether individual participating governments decide that they want to, on a bilateral basis, engage with the parties to see that something can come forward, that I think, could be a possibility. But that’s not an NSG action. That’s an individual bilateral action. And I think that’s about as much as I could envision something happening, if anything along those lines did happen.

[01:06:39] ROHLFING: Henk Cor, would you like to add anything to that? VAN DER KWAST: Yeah, I agree that this is an individual government action within the framework of the

NSG, because the fact that you need the consensus means that individual governments in that whole process can have influences on what is accepted or not. Now, we do not know how to the discussion will go. We’ll have to wait for that. But I would not exclude that such a possibility was there.

If you look back at the 2008 NSG India deal, now, I know that has been criticized by many people. But at

the same time, there was a declaration by India before this was accepted in which they indicated a number of things they would do or not do just in order to get that deal. So I think there are possibilities, but we have to see how that works. But I think it definitely would. And this is one of the difficult things of the NSG, that you have this balancing process and this political process within the group.

ROHLFING: Thank you. Let us take the next group of three questions, please. Q: Thank you. My name is Christhian Rengifo, for Ux Consulting Company. [01:07:58] As we know, China has major plans for the deployment of nuclear reactors – around 28 under construction

and many more on the way. Maybe a little bit delayed because of the events at Fukushima. But there are major nuclear energy plans. We know that in the last years, China has been procuring uranium because they will need it to fuel the reactors that they are planning.

As part of the fuel cycle, we know that China was negotiating enrichment services. China has domestic

capacity. I think nobody really knows the capacity and the timing for those, for that enrichment start-up operations. And we know they also receive technology from Russia, but maybe they would need more than that.

The question to the panel – and this is a generic question. I could be very specific, but it will be generic

question. Does the panel believe in – (inaudible) – have there been any discussions about European enrichment technology being deployed in Chinas? From the commercial point of view, it makes a lot of sense. You have a nuclear program, with a great amount for enrichment services. And it could make a lot of sense from the commercial point of view to deploy, let’s say, – (inaudible) – technology in China.

[01:09:18]


My question is about a policy side. There are many countries that are part of the enrichment technology company for example. So I think 20 years ago, Mark Hibbs wrote an article – maybe 20 years ago – about the interest of China to have European technology, but at that time, it didn’t happen. Now we are in a new time. My question is actually, from a policy side of view, what are the views about deploying European enrichment technology in China. Thank you.

ROHLFING: Thank you. Next question. Q: My name is Serrap (sp) Balacheli (sp) with King’s College in London. My questions sort of follow up on Christhian’s comments. I think what the black box continues,

reprocessing – enrichment and reprocessing technology debates going on, how would you foresee other countries, such as Korea and India, probably, asking for similar things at one point in time, and that might send a geopolitical statement to is adversaries in case of Korea being not Korea, in case of India being Pakistan. How would those things be balanced out, is question number one.

And questions number two, the India-U.S. nuclear deal fairly complete. NPT is fairly complete. These are

things that are done. With these two things in light, are there ways through the NSG where you can force countries like India to sign to all conditions of the original protocol without actually being part of the NPT?

[01:10:52] ROHLFING: Thank you. Ambassador Schaffer. Q: Teresita Shaffer. India has, of course, signed an additional protocol. My question, though, goes to the medium and longer

term sustainability of the NSG from a somewhat different perspective. People are saying about the missile technology control regime that it’s kind of being overtaken by technology, that the things which it controls have become sort of organically too widespread to be effectively controlled. And I wonder – I’m technically ignorant, but you guys are not –whether there is some danger of the same thing happening to the NSG in two ways – either technologically in the same way that may be happening with the MTCR, or commercially.

You already have India wanting to get into the nuclear suppliers group. It is capable of making, and arguably,

of exporting nuclear equipment. They’ve signed onto the NSG guidelines, but commitments are usually much stronger to regimes that you belong to. There may be other countries – Pakistan comes to mind – that have also developed a capability. Back in the days where there were only seven members at the NSG, you pretty much had encompassed the entire export capable world. Does this affect how the NSG needs to look at its membership? Thank you.

[01:12:43] ROHLFING: Thank you. Why don’t we try and bundle a coupled of questions again here? We’ve had a

series of questions about the transfer of enrichment technology or enrichment and reprocessing technology, in particular with respect to China and the transfer of European technology, and more broadly, the question of using


the black box concept of protection for transferring technology to India and Korea. And, why don’t we start with that, and let me ask if there are any volunteers here. (Pause.) (Laughter.)

Rich, you’ve been singled out by one of your colleagues here. GOOREVICH: Which one? Was it you? First of all, the NSG doesn’t discuss, per se, transactions on a

transaction by transaction basis. So to say that, you know, have we had a discussion about, you know, transfers of technology one way or another to, for example European technology to China, it just wouldn’t happen in the group that way. There would not be a, quote, “discussion” about it, What we’re looking for, in the terms of the enrichment and processing controls is exactly what I think the heart of the question is, which is, you know, is it a good thing? And if it is a good thing, how would it take place?

[01:14:21] One of the things I think that we’ve looked at and that we’ve found a bit of comfort in within the NSG is

looking at how the commercial nuclear industry happens to work. And there’s two models that we tend to look at. We look at the existing Russia-China deal. And we’re looking at the current ETC deal, you know, building the two facilities in the United States. In both those deals, you know, people talk about the idea of a black box.

It’s essentially not, quote, you know, quote, I would said a black box, you know, inasmuch as what it is. It’s a

coincidence of corporate intellectual property requirements, coinciding with very important nonproliferation requirements. And the fact that, you know, I think people feel comfortable with having European technology in the United States to produce the nuclear reactor fuel, and producing enriched uranium for nuclear reactor fuel, but the decision has been made that, in these cases, that, you know, the U.S. does not need to know exactly how the European technology works.

And I think if you go back and you look at the China-Russia deal, it’s essentially the same thing. We’ll build

you the facility, but we’re not going to tell you how we build the machines, in and of themselves. And this is where, I think, it really becomes vitally important to understand the technology that you’re dealing with. The concern isn’t, I think, of itself the facility as much as it is the underlying and enabling technology that would allow someone to replicate it, to then avoid safeguards and then to divert material.

[01:16:06] And I think if you can, if you can, by mitigating the risk, by allowing facilities to be built but now allowing

the enabling technology to allow people to essentially do diversion aspects, that’s important. The complicating factor, though, in all of this, becomes globalization. And in one of things, that, you know, I’ve come to understand through my work at DOE and, as well as in the NSG has been how important the idea of having a globalized supply chain is, both to the industry and to the nonproliferation aspects. Why? Transparency. The more people that are involved, the more people that can render judgments on whether or not the idea of something moving forward is good or not.

But the other thing is this – is that, and it sort of gets to the third question a little bit. I’ll just touch upon it.

I know I’m jumping questions. But, if the NSG is going to survive, if export controls are going to survive moving forward, the concept of export controls are going to have to shift, just like industries shift, from being more nationally based to that being which is more industry or corporate based. And I think one of the things that people don’t really understand is that when you look at ETC and you look at URENCO, and you look at the involvement


that the four governments have in ETC, they’ve been able to implement export controls on a corporate basis, not just on a national basis.

[01:17:38] And so when you talk with them and you actually sit down and say we want your European enrichment

technology, their corporate structure and their decisions are made very much with export controls in mind. And so they’ve been able to sort of shift the traditional lines of where export controls and how you apply the NSG contrast from being not just nationally, but now in the corporate sense. In the corporate sense, that it encompasses not just the four governments, but their entire supply chain, which happens to be a significant amount of Europe.

So I think, those are the kind of models that we need to look at for groups like the NSG to sort of survive

and move forward. ROHLFING: That’s a very good segue, I think, to the last question that Ambassador Schaffer asked, which

is how do – and really how does the NSG –deal with states that are outside of the NSG but are export capable, and in particular, the question is framed in the context of India, but one could also add states like Pakistan, who has, in fact, proliferated sensitive technologies. We’re all aware of that. Or Israel, or DPRK, for that matter.

John, do you want to take a crack at addressing the question of how does the NSG sustain itself over the

long term, when some of the key states that we’re worried about are outside of the regime? CARLSON: Well, it’s a very good question, and it’s a very difficult one. I’m not so worried about India

because India has prided itself in being a responsible nuclear state, and makes much of the fact that it has not assisted a proliferation program elsewhere. And I think this highlights that the issue isn’t so much its status in the NSG, but rather what are the national policies that different governments chose to follow? We do have a couple of export capable countries that are outside the NSG and very problematic. Pakistan is one and DPRK is the other. And we’ve also got the fact of, as Rich mentioned, globalization.

[01:19:52] That was certainly a major factor in the AQ Khan network. But the components were manufactured across a

very wide range of countries that wouldn’t normally be thought of as nuclear suppliers, and didn’t know themselves that they were nuclear suppliers because of the nature of those manufacturing activities. And I think what that points to really is the need to do much stronger outreach, to countries that might inadvertently form part of the procurement chain, to train their authorities, customs officials and others, as to what they should be looking for, what they should be attempting to regulate in the manufacturing sector, and what they should be looking for at ports and airports, by way of illicit transfers.

It’s a problem, and I think the only good news is that, at least it’s a relatively limited problem. There’s not,

the scale of the black market is relatively limited, but I think it’s going to be an ongoing problem, not simply addressed by the NSG in isolation, but by efforts by governments, generally.

[01:21:20] ROHLFING: Henk Cor, did you want to add anything to that?


VAN DER KWAST: (Inaudible.) ROHLFING: Let’s take the next set of questions. Q: Thank you. I’m Sandy Spector with the Monterey Institute. My question was going to focus on echelons or tiers in the NSG world. And one of them goes right to the

question you just answered, which is, should we establish a new lower tier, let’s call it NSG adherent. This would parallel what we have in the MTCR world, and it could be a way of recognizing states that are, you know, in sort of good order as far as their export controls are concerned, that are actually implementing the NSG guidelines.

All states are required, under Resolution1540 to have adequate and appropriate – whatever the phrasing is –

effective export controls, so this could be a way of recognizing those that did it particularly well, and you could also, most states – I guess all states – have to have the NSG list in place in order to implement the resolutions against Iran and North Korea, which prohibit exports of items on the list to those countries. So you have a lot to work with here, I think.

The other part of the comment was going to be the upper tier, which is the special vendors. Only a number

of countries export desirable reactors, or at least the very modern types. And it wouldn’t be difficult to imagine them having their own additional rules informally, but somehow collectively. This has already occurred where the G8 is concerned and they’ve adopted, informally and for the short term, the guidelines for reprocessing and enrichment exports. So if you might comment on those two tier ideas, that would be great.

[01:22:48] ROHLFING: Thank you. Q: Thank you. Maria Sultan, South Asian Strategic Stability Institute. My question is to the panel, but

mostly to Mr. Carlson. You give a list of denial as the to the criteria as to why technology might not be given or perhaps an

acceptance to NSG might be there. One was terrorism, safety record or repression record. But when you look at closed inspection, it does not stand the test of merit. In terms of India, you’ve got 17 incidences going on in India. Terrorism is a transnational trade, so the entire region is facing the problem of terrorism to begin with. In terms of domestic illicit trafficking within Indian, there are almost 57 cases in which nuclear material has been found illicitly in various parts of India.

And cases have been withdrawn by the Indian authorities because they did not want to prosecute them. And

on top of that, when you look at the safety record, there have been Level One to Level Four incidences in India, 12 to just mention a few, just – (inaudible) – nuclear plant reactor, which had a radiation fallout. They had two boiling water reactors in – (inaudible) – and in Maharashtra. So in terms of safety record in the list of denials, which shows, it’s certainly not there.

[01:24:02] The question which I want to ask is that if conditions of supply is going to be a new criteria at which the

industry is looking, how would you see that, if India is to be included as a member of the NSG, considering the fact


that India will also be a recipient to the nuclear technology, one, and most importantly, they have yet to even differentiate between their civilian fuel cycle and the military fuel cycle. How do you ensure full scope safeguards to be put in place over there?

And the second question is, one of the reasons of the success of the NSG was that because it allowed the

technology enabled states to come together in one platform, and in that case, certain nonproliferation obligations, which were legally binding, were put in place. What, in your opinion, is the legal, or for that matter, the criteria of acceptance? You have told about the criteria of denial, but what is the criteria of acceptance for India, other than the mere declaration by India of nonproliferation rules?

ROHLFING: Thank you. Q: Hi. Jim Ostroff with Platts Nuclear Publications. And Syria and Jordan have expressed great interest in civilian nuclear power, but at least until now, are saying

they want full control over the fuel cycle, including the ability to do reprocessing in their own countries. In addition, there have been some suggestions made that the U.S. supply fuel to Pakistani reactors with the assurance that the U.S. would have, basically full life cycle control, will take it back at the end, somehow, for reprocessing, or at least get it out of the country. And I’d like your thoughts about both of these. It’s somewhat different, but both potentially could upset the apple cart , as they say. Thank you.

[01:26:00] ROHLFING: Thank you. Let me ask Henk Cor, if you would, give us your thoughts on the first question

that Leonard Spector asked about setting up tiers in the NSG world – a lower tier of NSG adherence and an upper tier of special vendors who can export the most sensitive technologies. Can you give us your views on that concept?

VAN DER KWAST: Yes, thank you. Well, the idea in itself is very interesting. In practice, however, it

would be very difficult, because very few states would like to be NSG adherent and feel themselves at the so-called lower level. So I think, in practice, it would work, very difficult. What I found very interesting that you referred also in your question to Resolution 1540, which obliges every country to have decent export control policies and regulations.

I think that is one of the things where many states could do more. The European Union through BAFA, for

instance, that was mentioned yesterday during lunch, has done a lot in helping a number of countries – for instance, Egypt – to establish a decent control system. I think we can do a lot of things more in that field. I do not think, however, that should go through the NSG, and we’re talking here about the NSG. But I think it is one of the positive things that many states could do in order to help states that are indeed prepared to make stronger regulations on a national basis.

[01:27:41] ROHLFING: Thank you. John, do you want to tackle the question posed about India? There’s been some

discussion about reasons for denial, but if you could give us some thoughts on what should be criteria for acceptance of transfers to India, in light of some of the concerns that were raised about India’s record with respect to insurgency and illicit trafficking.


CARLSON: Yes, first let me address the issue of how to ensure full scope safeguards in India. Well, of course, there aren’t full scope safeguards in India, and that’s what the Indian exception means. It means that the NSG decided not to apply the full scope safeguards rule to Indian.

ROHLFING: Do you want, can you add to that, John? I’m glad you raised that, thank you. But there was

also reference to Indian adherence to an additional protocol. [01:28:43] CARLSON: Yeah. On the additional protocol, if you read the introduction to the additional protocol, you’ll

see that it was negotiated to cover three categories of states. It’s primarily to cover non-nuclear weapon states that have comprehensive set guards experience, in other words full scope set guards. And those states would have said – (inaudible) – provisions in the additional protocol.

But the protocol also covers nuclear weapons states to the extent that nuclear weapon states wish to adopt

nuclear protocol provisions, and the addition protocol also covers others, other states, which obviously, the outliers, those who are not in the NPT, and are not subject to full scope safeguards. And India availed itself of this provision to conclude an additional protocol. Some of us felt that there wasn’t a great deal of substance in the Indian additional protocol, but nonetheless, they have one.

As to the full-scope safeguard question, as I explained, the meaning of the Indian exception is that is not

insisted upon as a condition in India. What is insisted upon is that the facilities that take transfers, transferred items of transferred material, those facilities have to be under safeguards. But there’s not an insistence for full scope safeguards for every facility in India.

[01:30:29] On the question, how does the Indian safety record stack up, and what could we do by way of positive

conditions as distinct from denials, I did mention earlier on, that one of the considerations in agreeing to the Indian exception was nuclear safety. India has a very large energy program, and nuclear power is a significant component in that. And there was a feeling, quite a strong feeling, that it would be better, more in the international interest for India to have available to it, the most modern and safest technology, rather than necessarily going it alone and continuing with its indigenous program.

So, if you’d like, that was a positive condition rather than a denial condition. On the question, does Pakistan

have a comparable record, I think that’s really something that Pakistan has to work at to persuade other governments that that’s the case. It’s not really a matter for debate within the NSG. It’s more, what are the view of the various governments who come together in the NSG, and those governments would have to be convinced.

ROHLFING: I know we are coming upon the end of the session, and we are the only thing standing

between you and lunch, so let me just ask our – maybe I’ll turn to you, Rich, to give us just a very quick, on the last question, about the interest of Syria and Jordan in the nuclear fuel cycle, and your thoughts on the NSG’s role in deliberating on relevant transfers related to that.

GOOREVICH: OK. Well, since I’m the only thing standing between you and lunch, I’ll answer the

question in three parts, with 72 subsections. No, I’m kidding. (Laughter.)


[01:32:41] But real quick, before I get into this, where’d Sandy go? Sandy? I scared him away. You know, it’s a funny

question because I kept thinking when he asked a question about tiering, the old great American philosopher, Groucho Marx, and his line of why would I want to join a club that would have me as a member? (Laughter)

You know, maybe that in and of itself answers this question as to what’s going on with the adherence. On

this idea of full control over the fuel cycle, you know, the NSG in and of itself isn’t in the position to, we make decisions, or we make rules based upon the nonproliferation that associated with the technology – not specifically on a region or country by country basis. If you look at the guidelines, it doesn’t mention countries, except, in the note verbale it says who’s an inherent to the group, who’s bound by guidelines.

And so you have to ask yourself the question when, you know, what is the right thing for from a

nonproliferation standpoint? What’s the right thing to do from a commercial standpoint with retards to the fuel cycle, and aspects of the fuels cycle that people want to have and have access to. And those are the rules we’ve set. So, within the NSG context, you know, it’s saying transfer to this country versus that country.

[01:34:10] The question is, does the technology want to be transferred, and does the country meet the conditions of

supply? That’s it. When it comes to the national basis, then there are two things that come into play. One, obviously, national law, national policy with regards to transfers to that, to specific destinations. And number two, the commercial aspects of this. People seem to think that nuclear industry just gives away their technology. They don’t. There’s licensing agreements in the – (inaudible) – assessment associated with the companies, who, in many ways, are more onerous than anything we could ever put in place with regards to, quote, “nonproliferation controls.”

There’s a vested interest for the companies to have this in place and there’s a vested interest from us that the

governments, in the nonproliferation sense, to support the companies, ensuring that they keep their technology to themselves, so that they can continue to be able to sell their wares. If they gave their technology away, they wouldn’t sell very much. So I think there’s an aspect there. Even though the two things sort of coincide into a very similar policy vein, they are very different in nature, though. It just happens to coincide, I think, in the nuclear world fairly well.

ROHLFING: Thank you. [01:35:33] So, let me thank all of you for your attention, for your excellent questions today, and ask you to please join

me in thanking our excellent panelists. (Applause.) (END)

2011 carnegie international nuclear policy conference · the nuclear suppliers group is a group of...

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