- AUKUS treaty
- The Agreement among the Government of Australia, the Government of the United Kingdom of Great Britain and Northern Ireland, and the Government of the United States of America for Cooperation Related to Naval Nuclear Propulsion was referred to the Committee on 12 August 2024.
- The Committee received 260 submissions and three form letters. The Committee held four public hearings between 16 October 2024 and 24 October 2024 in Canberra, Adelaide and Perth. A list of submissions and form letters can be found at Appendix A. The hearings and witnesses are listed at Appendix B. The transcripts of evidence from the public hearings can be accessed through the Committee’s website.
Overview
2.3The purpose of the Agreement among the Government of Australia, the Government of the United Kingdom of Great Britain and Northern Ireland, and the Government of the United States of America for Cooperation Related to Naval Nuclear Propulsion (the Agreement) is to establish a legally-binding framework between Australia, the United Kingdom (UK) and the United States of America (US). This framework will facilitate the communication and exchange of naval nuclear propulsion information between the three parties and the transfer of nuclear material and equipment from the UK and US to Australia for conventionally armed, nuclear-powered submarines.
2.4The Agreement shall remain in force until 31 December 2075.
Background
2.5On 15 September 2021, the leaders of Australia, the UK and the US announced an enhanced trilateral security partnership between the three nations entitled AUKUS. The first initiative announced under AUKUS was to support Australia’s acquisition of conventionally armed, nuclear-powered submarines for operation by the Royal Australian Navy. On 14 March 2023, the leaders of AUKUS nations announced the pathway to deliver nuclear-powered submarine capability to Australia entitled the ‘Optimal Pathway’.
Justifications
2.6Australia’s naval capability is reliant upon submarines as they provide a strategic advantage in terms of surveillance and protection of the nation’s maritime approaches. Compared to conventional submarines, the proposed conventionally armed, nuclear-powered submarinesachieve superior stealth, speed, manoeuvrability, survivability, and endurance. These superior submarines have greater capability to deter actions against Australia’s national interests.
2.7The Agreement is critical in achieving the Optimal Pathway as it provides Australia with access to critical naval nuclear propulsion information, nuclear material and equipment from the UK and US that would not otherwise be available. The Agreement provides legal authority to the UK and US to enable the transfer of naval nuclear propulsion reactors and related items to Australia, with all reactors for Australia’s nuclear-powered submarine program to be provided by the UK or the US. The Agreement will enable the US to transfer between three to five Virginia class submarines to Australia and will enable the UK to transfer the naval nuclear propulsion plants required for use in the SSN-AUKUS conventionally armed, nuclear-powered submarines that will be built by Australia.
2.8The provision of legal authority to transfer this nuclear information and technology that would otherwise be unauthorised under US and UK law is a ‘further demonstration of AUKUS partners’ commitment to implementation of the Optimal Pathway’. The Agreement permits Australia to share nuclear propulsion information with authorised Australian personnel (subject to the Agreement’s security obligations).
2.9By reinforcing the role of the International Atomic Energy Agency (IAEA) and its objectives throughout the lifecycle of the naval nuclear propulsion program, the Agreement ‘supports Australia's commitment to the highest non-proliferation standards’.
2.10Given the sensitive nature of the nuclear technology that will be exchanged and the restrictions on the use and dissemination of nuclear information, material and equipment under US law, the Agreement includes ‘robust security requirements’. This includes requirements on ‘the use, dissemination, handling and protection of such information, material and equipment, and provides for the maintenance of mutually determined information security policies.’
Obligations
Scope
2.11Article I of the Agreement stipulates that the communication and exchange of naval nuclear propulsion information and the transfer of nuclear material and equipment relating to naval nuclear propulsion can only occur if the Originating Party determines that such cooperation will promote the objectives of AUKUS and will not constitute an unreasonable risk to the Party’s defence and security. Article III provides for Parties to communicate or exchange naval nuclear propulsion information and related technical data and technology necessary for the research, development or design of naval nuclear propulsion plants.
2.12Annex B of the Agreement details the nuclear material and equipment that may be transferred and stipulates that is must be transferred in complete, welded power units. In addition to the equipment listed, the same Annex also lists the training, services and program supports associated with equipment that may be transferred.
2.13Article VI(A) requires cooperation conducted under the Agreement to be done so in accordance with the relevant Parties’ applicable laws and regulations. The Agreement recognises Australia’s obligations under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), the Treaty of Rarotonga, the Agreement between Australia and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty on the Non-Proliferation of Nuclear Weapons (CSA), and the Protocol Additional to the Agreement between Australia and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty on the Non-Proliferation of Nuclear Weapons (AP).
Protection of information, material and equipment
2.14Given the sensitivity of naval nuclear propulsion information and technology, Articles VIII, IX and X of the Agreement govern its use, dissemination, handling and protection and provide for the maintenance of mutually determined information security policies. Information communicated or exchanged is to be given at least the same level of protection as it is afforded by the Originating Party.
2.15Annex A stipulates the specific requirements regarding the administrative and security controls applicable to accessing and communicating this information, including requirements on physical security, personnel security, and control of the information. The same Annex establishes the authority responsible for granting individual access to naval nuclear propulsion information and endorsing information security controls.
2.16Article IX of the Agreement stipulates that naval nuclear propulsion information or technology is not to be communicated to any unauthorised persons or beyond the jurisdiction or control of the Parties unless Parties give their written consent.
2.17A Memorandum of Understanding accompanying the Agreement stipulates that the UK and the US should not unreasonably withhold information, nuclear material or equipment from Australia.
Nuclear non-proliferation and cooperation
2.18All Australian nuclear-powered submarines will be conventionally armed, with the Agreement prohibiting the use of naval nuclear propulsion information, nuclear material and equipment communicated, exchanged or transferred pursuant to the Agreement for any nuclear explosive device, or for research on or development of any nuclear explosive device. Australia is obligated to only use nuclear material transferred under the Agreement for naval nuclear propulsion, may not enrich or reprocess any nuclear material received, and is responsible for the management, disposition, storage and disposal of any such spent nuclear fuel and radioactive waste.
2.19Article VIII of the Agreement stipulates for all cooperation under the Agreement to require the application of Australia’s CSA and AP, with all future arrangements to be negotiated by Australia with the IAEA pursuant to the Article 14 Arrangement. This applies to all nuclear activities within the territory of Australia, under its jurisdiction or carried out under its control anywhere in accordance with the provisions of those instruments. These requirements will be implemented within Australia’s existing regulatory framework and managed by the Australian Safeguards and Non-Proliferation Office (ASNO).
2.20The Agreement requires Australia to have the Article 14 Arrangement in place prior to the UK or the US transferring any nuclear material to Australia. Australia is obliged to consult with the other Parties during negotiations and ensure that they share the view that the Article 14 Arrangement:
‘protects defined categories of information, equipment and material; avoids unduly hampering, delaying or interfering with Australia’s use of nuclear material and equipment; fulfils the Parties’ commitment to the highest non-proliferation standard; and is consistent with the Agreement’.
2.21These requirements also apply to any proposed amendments to the Article 14 Arrangement and the Australia-IAEA Safeguards Agreements that would relate to nuclear material or equipment transferred pursuant to the Agreement.
2.22Article VII of the Agreement imposes obligations on Parties in relation to their collaboration on supporting the IAEA to implement the Australia-IAEA Safeguards Agreements and Article 14 Arrangement to meet IAEA’s objectives with respect to material and equipment transferred pursuant to the Agreement. This includes enabling the IAEA to verify that there is no diversion of declared nuclear material, that there is no misuse of nuclear facilities, and that there is no undeclared nuclear material or activity in Australia. Parties are obliged to provide the necessary information and access that ensures their obligations are fulfilled while also protecting naval nuclear propulsion information and related classified information.
Liability, indemnity and warranty
2.23Article IV(E) requires Australia to indemnify the UK and the US against any liability, loss, costs, damage, or injury (including third party claims) arising out of, related to, or resulting from nuclear risks connected with the design, manufacture, assembly, transfer, or utilisation of any material or equipment transferred or to be transferred pursuant to the Agreement. This indemnity does not apply to any conventionally armed, nuclear-powered submarine that has been in service with the US Navy until it is transferred to Australia.
2.24Article V states that the application or use of any information, nuclear material or equipment communicated, exchanged or transferred shall be the responsibility of the Recipient Party and that the other Parties do not provide any indemnity, nor do they guarantee the accuracy or completeness of the information, nor the suitability or completeness of such information, nuclear material or equipment. The Agreement provides that non-nuclear risks may be addressed by the relevant Parties in separate agreements or arrangements.
Intellectual property
2.25Article XI stipulates that where a Recipient Party (including its contractors) generates an invention that employs or is derived from information, material or equipment communicated, exchanged or transferred pursuant to the Agreement, that Party must obtain, and then transfer and assign all right, title and interest in the invention to the Originating Party. The Originating Party then provides a royalty-free, non-exclusive, irrevocable, perpetual, worldwide license to the other two Parties to use that invention for government and mutual defence and security purposes.
2.26Australia is to indemnify the UK and US for any patent infringement that occurs in relation to information transferred under the Agreement. The Agreement provides that Parties also waive any legal claims against other Parties for compensation, royalty or award resulting from any invention, including ‘any patent application or patent, licence or sub-licence covered under relevant provisions of Article XI’. Parties may establish a licensing regime for other forms of intellectual property that may arise under the Agreement.
Consultation
2.27The National Interest Analysis (NIA) states that no concerns have been identified in consultations with Commonwealth departments and State and Territory governments. The NIA further states that no public consultation has been undertaken due to the Agreement’s relation to national security and operational capability.
Implementation and costs
2.28Australia’s implementation of the Agreement will be led by the Australian Submarine Agency, in consultation with the Department of Defence, the Department of Foreign Affairs and Trade, ASNO, the Attorney-General’s Department, and other relevant Commonwealth departments and agencies. No legislation or amendments to existing legislation are required to implement the Agreement. However, Professor Donald Rothwell noted at the first public hearing for the inquiry that the Agreement references several existing treaties which will intersect with the Agreement, and the Agreement itself will ‘become a foundation for additional instruments that will…need to be concluded over the life of the Agreement to give effect to it’.
2.29Any costs that may arise in relation to the transfer of nuclear material, naval nuclear propulsion plants or related equipment will be negotiated and set out in either implementing instruments or in other government-to-government mechanisms.
2.30The Agreement shall remain in force until 31 December 2075.
Withdrawal
2.31Parties are able to terminate the Agreement by providing at least one year’s written notice to the other Parties. A Party considering a determination of breach or withdrawal is expected to consult with the other Parties prior to finalising its decision. If a Party terminates or breaches the Agreement, each other Party has the right to require the return or destruction of any naval nuclear propulsion information, nuclear material and equipment that it communicated, exchanged, or transferred.
2.32If Australia breaches its obligations imposed by, terminates, abrogates, or otherwise withdraws from the NPT, CSA or Article 14 Arrangement, or detonates a nuclear explosive device, the other Parties have the right to cease further cooperation under the Agreement and require the return of any nuclear material or equipment transferred pursuant to the Agreement.
2.33Any disagreement that may arise between the Parties in the implementation or interpretation of the Agreement must be resolved through mutual consultations without recourse to any other dispute settlement mechanisms.
Future treaty action
2.34The Agreement may be amended if Parties agree to do so in writing and shall enter into force on the date of the last note in an exchange of diplomatic notes among the Parties.
2.35The Committee supports the Agreement among the Government of Australia, the Government of the United Kingdom of Great Britain and Northern Ireland, and the Government of the United States of America for Cooperation Related to Naval Nuclear Propulsion and recommends that binding treaty action be taken.