Chapter 1Introduction
Referral of the bills
1.1On 16 November 2023, the Australian Naval Nuclear Power Safety Bill 2023 [Provisions] (the Bill) and the Australian Naval Nuclear Power Safety (Transitional Provisions) Bill 2023 [Provisions] (the Transitional Provisions Bill) were introduced into the House of Representatives by the Deputy Prime Minister and Minister for Defence, the Hon Richard Marles MP (the Minister). The Minister stated:
This bill is specifically focused on ensuring Australia maintains the highest level of nuclear safety in respect of nuclear-powered submarines.
It will enable the establishment of a new regulatory framework, including an independent regulator, to ensure nuclear safety within Australia's nuclear-powered submarine enterprise and capability lifecycle.
The new framework will be harmonised with other schemes, including those relating to work health and safety, nuclear non-proliferation and civilian nuclear safety.
1.2On the same day, the Senate referred the provisions of the bills to the Senate Foreign Affairs, Defence and Trade Legislation Committee (the Committee) for inquiry and report by 26 April 2024. On 16 April 2024, the Committee tabled a progress report extending the reporting date to 13 May 2024 to allow it time to consider the evidence and conclude its deliberations.
1.3Further details on the purpose and provisions of the bills are outlined below.
Structure of the report
1.4This report contains two chapters. This chapter covers:
background information on the establishment of the AUKUS trilateral security partnership and its Pillar 1 initiative to support Australia in acquiring conventionally armed nuclear-powered submarines;
a related bill and previous inquiry conducted by the Committee;
the purpose and key provisions of the bills; and
a high-level comparison of the regulatory framework proposed by the Bill with the existing regulatory frameworks and reporting requirements of the United Kingdom (UK) and United States (US).
1.5Chapter two canvasses the key issues raised by submitters and witnesses and sets out the Committee’s views and recommendations.
Background
Australia’s strategic environment
1.6The Defence Strategic Review 2023 (DSR) makes recommendations about Australia’s approach to defence capability priorities and processes based on its assessment of the current strategic environment. The DSR described Australia’s changing strategic environment as follows:
Australia’s region, the Indo-Pacific, faces increasing competition that operates on multiple levels—economic, military, strategic and diplomatic— all interwoven and all framed by an intense contest of values and narratives. A large-scale conventional and non-conventional military build-up without strategic reassurance is contributing to the most challenging circumstances in our region for decades. Combined with rising tensions and reduced warning time for conflict, the risks of military escalation or miscalculation are rising. At the same time, the effects of climate change across the region are amplifying our challenges, while other actions that fall short of kinetic conflict, including economic coercion, are encroaching on the ability of countries to exercise their own agency and decide their own destinies.
1.7Within this strategic environment, the DSR stated that Australia must sharpen its focus on what its interests are and how to uphold them:
Our focus needs to be on: how we ensure our fate is not determined by others; how we ensure our decisions are our own; and how we protect our way of life, our prosperity, our institutions and our economy. These interests demand we deploy all elements of our national power in statecraft seeking to shape a region that is open, stable and prosperous: a predictable region, operating by agreed rules, standards and laws, where sovereignty is respected. That statecraft includes deepening diplomatic engagement with the many other countries facing similar circumstances. It also requires strong defence capabilities of our own and working with partners investing in their own capabilities.
1.8Another key change in the strategic environment has been the loss of conflict warning time in which a country has to prepare its response, emphasising the need for accelerated capability development:
In the post-Second World War period, Australia was protected by its geography and the limited ability of other nations in the region to project power. Defence and the nation had a 10-year warning time as the foundation for planning, capability development and preparedness for conflict.
In the contemporary strategic era, we cannot rely on geography or warning time. Regional military modernisation, underpinned by economic development, has meant that more countries are able to project combat power across greater ranges in all five domains: maritime, land, air, space and cyber. Emerging and disruptive technologies are being rapidly translated into military capability.
…
Ending warning time has major repercussions for Australia’s management of strategic risk. It necessitates an urgent call to action, including higher levels of military preparedness and accelerated capability development.
1.9In response to the new strategic reality, the DSR outlined priorities for reshaping the force structure, posture and capability of Australia’s defence which included strong support for the acquisition of a conventionally armed nuclear-powered submarine capability.
AUKUS trilateral partnership – Pillar 1
1.10On 15 September 2021, the leaders of Australia, the UK and the US announced the creation of a new trilateral security partnership to promote a free and open Indo-Pacific that is secure and stable. This partnership is known as AUKUS.
1.11The first major initiative of AUKUS was the trilateral decision to support Australia to acquire conventionally armed nuclear-powered submarines (or SSNs) to enhance interoperability, commonality, and mutual benefit between the three nations.
1.12Eighteen months after the announcement, on 13 March 2023, the three leaders of AUKUS outlined the pathway for Australia to acquire these submarines:
Australia’s future SSN—which we are calling “SSN-AUKUS”—will be a state-of-the-art platform designed to leverage the best of submarine technology from all three nations. SSN-AUKUS will be based upon the United Kingdom’s next-generation SSN design while incorporating cutting edge US submarine technologies, and will be built and deployed by both Australia and the United Kingdom.
1.13In a joint statement, Prime Minister Anthony Albanese MP, with the Minister, noted that Australia’s acquisition of nuclear-powered submarines is the single biggest defence investment in Australia’s history and ‘represents a transformational moment for our nation, our Defence Force and our economy’.
1.14On 1 July 2023, the Government established the Australian Submarine Agency (ASA) to oversee the management and development of Australia’s nuclear-powered submarine program, from acquisition to delivery, including construction, technical governance, sustainment, and disposal. The ASA also enables the necessary policy, legal, non-proliferation, workforce, security and safety arrangements. Vice Admiral Jonathan Mead was appointed as the ASA’s Director-General.
1.15The ASA notes that a phased approach (see Figure 1.1) will be taken to deliver the submarines at the earliest possible date to support Australia’s development of the infrastructure, technical capabilities, industry and human capital necessary to produce, maintain, operate, and steward a sovereign fleet of conventionally armed nuclear-powered submarines. The ASA outlined the pathway to Australia’s nuclear-powered submarine capability, as summarised below:
Embedded personnel, port visits and Submarine Rotational Force-West
From 2023, Australian military and civilian personnel will embed with the UK and US Navies and within UK and US submarine industrial bases to accelerate the training and development of Australian personnel.
The US will increase nuclear attack submarine port visits to Australia from 2023 and the UK from 2026.
From as early as 2027, the UK and US plan to establish a rotational presence of one UK Astute class submarine and up to four US Virginia class at HMAS Stirling, Western Australia (WA). This initiative will be known as Submarine Rotational Force-West (SRF-West).
Acquisition of US Virginia Class SSNs
On 15 December 2023, the US Congress passed the 2024 National Defense Authorization Act and authorised the transfer of three Virginia Class submarines to Australia with the potential to sell Australia up to two more, if required.
According to the ASA, the first Virginia class SSN is planned to be delivered to Australia in the early 2030s. Acquiring Virginia class SSNs will ensure there is no submarine capability gap during the retirement of Australia’s existing diesel-powered submarine fleet.
SSN-AUKUS
It is anticipated that AUKUS partners will deliver SSN-AUKUS which will be the future attack submarine for both Australia and the UK. Australia and the UK intend to start building SSN-AUKUS in their domestic shipyards before the end of this decade.
Australia plans to deliver the first Australian-built SSN-AUKUS to the Royal Australian Navy in the early 2040s, while the UK will deliver its first SSN-AUKUS to the Royal Navy in the late 2030s.
On 22 March 2024, it was announced that the Australian Government selected BAE Systems and ASC Pty Ltd to build the SSN-AUKUS submarines at Osborne, South Australia. The joint venture will establish a long-term partnership leveraging the complementary capabilities, skills, expertise and resources of the two partners. Furthermore, ASC Pty Ltd has been selected for the sustainment of nuclear-powered submarines, commencing with the Virginia Class, followed by the SSN-AUKUS. ASC Pty Ltd will also provide sustainment support to visiting US and UK submarines at HMAS Stirling in the lead up to the establishment of SRF-West from 2027.
On the same day, the Australian Government announced funding of £2.4 billion which is to be provided to British industry over the next decade for design work on the SSN-AUKUS submarines and the expansion of a Rolls-Royce plant that produces the nuclear reactors that will eventually be installed on SSN-AUKUS submarines.
Figure 1.1Optimal pathway to Australia's nuclear-powered submarine capability
Source: Australian Submarine Agency, 'Optimal Pathway', (accessed 3 January 2024).
Cost of the program
1.16The cost of the acquisition of the nuclear-powered submarines is estimated to be between $268 billion and $368 billion ‘over a period of decades’ or 0.15 per cent of GDP averaged per year over the life of the program. The 2023–24 Budget provided:
… $4.5 billion over 10 years from 2023–24 (and $482.7 million per year ongoing) to support initial steps in Australia’s acquisition of a conventionally armed nuclear-powered submarine capability’. [This included] $87.2 million over two years from 2023–24 to support initial regulatory activities and the development of regulatory standards and frameworks, and non-proliferation and safeguards arrangements.
1.17The 2023–24 Budget indicated that these costs are expected to be ‘offset through a broader reprioritisation within the Defence Integrated Investment Program’. On 17 April 2024, the Government released the first Defence Integrated Investment Program.
1.18The Budget also states the ASA would be provided with ‘$7.9 million in 2023–24 to support the establishment of [a naval nuclear safety regulator] and develop associated nuclear regulatory standards and frameworks’.
Contribution to infrastructure and industrial capacity
1.19The nuclear-powered submarine program is estimated to create approximately 20 000 jobs over the next 30 years across industry, the Australian Defence Force (ADF) and the Australian Public Service. Australia’s infrastructure and industrial capacity will also need to be upgraded to include:
the expansion of HMAS Stirling in WA to support the scale of infrastructure required for nuclear-powered submarines—both for visiting and rotational submarines and for Australia’s own nuclear-powered submarines;
the SSN-AUKUS submarines being built at Australia’s future Submarine Construction Yard in Adelaide, South Australia—employing thousands of workers onsite at peak; and
the establishment of additional training, skilling and educational programs to achieve this growth for Australia’s local submarine and shipbuilding industry.
Nuclear non-proliferation and waste management
1.20The ASA notes that AUKUS partners have made clear that Australia’s acquisition of conventionally armed nuclear-powered submarines will be carried out in a manner that sets the highest non-proliferation standards. To strengthen Australia’s commitment to nuclear non-proliferation in light of the initiative, the Government has committed that Australia:
will not seek to acquire nuclear weapons;
will not enrich uranium or reprocess spent fuel as part of this program;
will not produce its own nuclear fuel for its SSNs;
will be provided with nuclear material in complete, welded power units that will not require refuelling during their lifetime;
will be provided with nuclear fuel that cannot be used in nuclear weapons without further chemical processing, which would require facilities that Australia does not have and will not seek; and
will work within the framework of its Comprehensive Safeguards Agreement and Additional Protocol with the International Atomic Energy Agency (IAEA).
1.21Australia has committed to managing all radioactive waste generated by its own Virginia Class and SSN-AUKUS submarines, including radioactive waste generated through operations, maintenance and decommissioning, as well as some low-level waste from routine sustainment of the rotational presence of UK and US SSNs in WA as part of SRF-West. The UK and US will assist in developing Australia’s capability to manage radioactive waste generated by the nuclear-powered submarine program. Australia will manage these materials in accordance with its nuclear non-proliferation and other international obligations.
1.22According to the ASA, once operational, Australia’s nuclear-powered submarines will generate around a ‘small skip bin’ of low-level radioactive waste per submarine each year, consisting of items such as disposable gloves, wipes, and used Personal Protective Equipment. This type of waste will also be generated by visiting UK and US submarines as part of SRF-West. In addition, each decommissioned and defueled Australian submarine will produce intermediate-level radioactive waste in the form of ‘reactor compartment and components, roughly the size of a four-wheel drive’ and a ‘small hatchback’ sized amount of spent nuclear fuel (high-level radioactive waste). The ASA noted that the first reactors from nuclear-powered submarines would not need to be disposed of until the mid-2050s.
1.23No decision has been made on a location within Australia for the disposal of radioactive waste from nuclear-powered submarines, however operational radioactive waste will be stored on Department of Defence (Defence) sites in Australia. Defence is currently conducting a review with relevant agencies—such as the Australian Radioactive Waste Agency (ARWA)—to inform the Government’s decision-making process by which it will identify suitable locations on current or future Defence estates for the storage and disposal of intermediate-level and high-level waste, including spent fuel. This will inform further technical work, broader consultation, and consideration of wider social licenses and economic implications to determine preferred disposal pathways.
1.24However, according to the ASA, an operational waste storage facility for low-level radioactive waste management is being planned as part of the infrastructure works proposed for HMAS Stirling to support SRF-West.
1.25Additionally, in the 2023–24 Budget, the ARWA was allocated funding to support the development of radioactive waste management, storage and disposal arrangements to support the nuclear-powered submarine program.
A new regulator
1.26On 6 May 2023, the Minister announced the Government will establish a new statutory regulator to regulate the unique circumstances associated with nuclear safety and radiological protection across the lifecycle of Australia’s nuclear-powered submarine enterprise.
1.27The Bill establishes this regulator, called the Australian Naval Nuclear Power Safety Regulator (the Regulator). Further details are provided below.
Related bill and previous inquiry
1.28The Minister stated that the Bill is the ‘second legislative step in support of Australia's acquisition of conventionally armed nuclear-powered submarines’ and builds on the Defence Legislation Amendment (Naval Nuclear Propulsion) Bill (Naval Nuclear Propulsion Bill).
1.29The Naval Nuclear Propulsion Bill proposed to amend the Australian Radiation Protection and Nuclear Safety Act 1998 (ARPANS Act)and Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) to enable the CEO of the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) and the Minister for the Environment and Water to perform their respective regulatory functions in relation to Australia’s acquisition and operation of conventionally-armed, nuclear-powered submarines and their supporting infrastructure and facilities.
1.30The Committee inquired and reported on the Naval Nuclear Propulsion Bill in June 2023. The Committee noted the importance of the acquisition of the nuclear-powered submarines in strengthening that Australia’s defence capability, securing its national interest, and enhancing its contribution to the security and stability of the region, and recommended that the Naval Nuclear Propulsion Bill be passed without delay.
1.31The Naval Nuclear Propulsion Bill passed both houses of Parliament by 22 June 2023 and received Royal Assent on 3 July 2023.
Purpose of the bills
The Bill
1.32The object of the Bill is to establish a new regulatory framework, including an independent regulator, to regulate certain activities to maintain the highest level of nuclear safety within Australia's nuclear-powered submarine enterprise and capability lifecycle.
1.33A discussion paper released by Defence states:
This legislation is reflective of the Australian Government’s recognised need to:
protect the health and safety of people, and the environment, from the harmful effects of radiation;
implement proper operating conditions for regulated activities;
prevent accidents; and
mitigate the consequences of accidents (if they occur).
1.34The Minister stated that the ‘new framework will be harmonised with other schemes, including those relating to work health and safety, nuclear non-proliferation and civilian nuclear safety’.
1.35Furthermore, the Minister noted that work is underway to develop a number of regulatory instruments which will provide greater detail on how the overall legal framework concerning naval nuclear power will operate. The Minister anticipates that an exposure draft of the regulations will be made available this year.
1.36The Bill does not apply to conduct on board UK and US submarines.
1.37Additionally, the Bill does not affect the moratorium on civil nuclear power in Australia.
Transitional Provisions Bill
1.38According to the EM, the purpose of the Transitional Provisions Bill is to deal with transitional matters relating to the Bill and for related purposes.
1.39As outlined, the Naval Nuclear Propulsion Bill passed Parliament in June 2023 and clarified that the moratorium on civil nuclear power, as reflected in the ARPANS and EPBC Acts, does not limit the performance of their regulatory functions in respect of conventionally armed nuclear-powered submarines and their supporting infrastructure and facilities. Since the amendments have now been enacted, the CEO of ARPANSA can perform their functions in support of the nuclear-powered submarine enterprise. These functions include the issue of licences.
1.40The Transitional Provisions Bill would enable licences issued by the CEO of ARPANSA to be treated as Australian naval nuclear power safety licences for the purposes of the regulatory regime established by the Bill and its corresponding activities, following its commencement. In other words, the licencing power is transferred to the Regulator established under the Bill.
Provisions of the bills
The Bill
1.41The Bill contains six parts which would establish Australia’s framework to promote and regulate the nuclear safety aspects of Australia’s nuclear-powered submarine enterprise.
Part 1: preliminary matters
1.42Part 1 sets out the preliminary matters such as the commencement date and a dictionary of terms, as well as introducing the core provisions and objectives of the ANNPS Act, including key concepts such as regulated activities.
1.43As the object of the Bill is to regulate certain activities relating to AUKUS submarines, the Bill defines AUKUS submarines as ‘conventionally armed nuclear-powered submarines operated, or to be operated, for naval or military purposes by Australia, or by the UK or the US, or that are under construction in Australia’.
1.44The regulated activities include:
(a)facility activities—that relate to particular facilities in Australia that are relevant to AUKUS submarines;
(b)submarine activities—that relate to AUKUS submarines themselves; and
(c)material activities—that relate to certain material, plant and equipment that emit or produce radiation that come from (or are used on) AUKUS submarines.
1.45Regulated activities can only occur in designated zones (which are particular areas in Australia) or in relation to Australian conventionally armed nuclear-powered submarines (see Figure 1.2). The Bill establishes two designated zones initially:
Zones will be designated so it is clear where the boundaries lie between the Commonwealth's existing civil nuclear safety framework, established by the Australian Radiation Protection and Nuclear Safety Act 1998 and the new arrangements under this bill.
Two zones will be designated initially, one at HMAS Stirling in Western Australia and another at the Osborne Naval Shipyard in South Australia. The limits of those zones will be described in regulations.
Figure 1.2Designated zones and regulated activities
Source: Defence, Discussion Paper: The legal and regulatory framework to support Naval Nuclear Power Safety, p. 13 (accessed 12 January 2023).
Part 2: nuclear safety duties
1.46Part 2 deals with ensuring nuclear safety when conducting regulated activities by establishing nuclear safety duties. Part 2 also proposes to establish a range of significant civil and criminal penalties for contraventions and offences, including breaches of licence conditions and contraventions of nuclear safety duties.
1.47Duties that apply to all persons conducting regulated activities, whether or not they are authorised to do so by a licence (i.e., those either holding a licence or those authorised by the licence), includes a general nuclear safety duty. A person who conducts a regulated activity ‘must, so far as reasonably practicable, ensure nuclear safety when conducting the activity’. A person must not conduct a regulated activity if the person does not hold a licence or is not authorised by the licence to do so.
1.48Duties that apply to licence holders include:
to establish, implement and maintain a nuclear safety management system;
to report nuclear safety incidents. The report must:
be given to the Regulator ‘immediately after’ the person becomes aware of the incident;
be in writing, or may be given orally—if a report is given orally, it must be confirmed by written notice to the Regulator as soon as practicable after being given orally;
be in the approved form (if any);
contain information (if any) prescribed by the regulations; and
be given to the Regulator in the manner (if any) prescribed by the regulations.
to ensure the competence and supervision of persons authorised to conduct regulated activities under the licence, as far as reasonably practical; and
to comply with licence conditions.
1.49Whilst the Bill provides for the requirement for a licence holder to report a nuclear safety incident to the Regulator, there is no requirement for the Director-General of the Regulator or the Minister to report nuclear safety incidents to the Parliament—unlike the CEO of ARPANSA. In the ARPANS Act the CEO must table a report of any serious accident or malfunction which occurs at a nuclear installation in each house of Parliament within three sitting days of the incident occurring.
1.50Duties that apply to persons authorised by a licence include:
in conducting a regulated activity under a licence, to implement and comply with the safety management system that applies to the regulated activity, so far as reasonably practicable; and
to comply with the conditions of that licence that apply to the person.
Part 3: licences
1.51Part 3 deals with Australian naval nuclear power safety licences, including who can apply, how to apply, licence conditions, and other related matters.
1.52Those able to apply for a licence are ‘Commonwealth related persons’, including industry partners who are Commonwealth contractors. Other people may also be authorised under a licence.
1.53The Regulator is able to require an applicant to provide additional relevant information in processing an application. Additionally, regulations will enable further detail to be prescribed that must be included in an application.
1.54Licences may be issued for an indefinite period or for a period specified in the licence. A licence may be cancelled, surrendered, suspended, or varied prior to the end of the period. A licence may also be extended.
1.55The process for the review of licence decisions is also detailed.
1.56Furthermore, the Minister noted that the Government is currently developing regulations that would, amongst other things, ‘specify the conditions applicable to particular licences that would be required’. The exposure draft of the regulations is expected to be released in 2024.
Part 4: inspectors
1.57Part 4 sets out the powers that an inspector may exercise to monitor and ensure compliance with the AANPS Act, investigate non-compliance, and investigate nuclear safety incidents, among other things. It also deals with the enforcement of civil penalty provisions under the ANNPS Act.
1.58An inspector may enter a monitoring area to exercise monitoring powers with or without the consent of any relevant person, or without a warrant, in relation to the monitoring area. Entering a monitoring area includes a reference to boarding an Australian submarine or another vessel. Monitoring powers include:
… the power to: search the monitoring area and any thing in the monitoring area; examine or observe any activity conducted in the monitoring area; inspect, examine, take measurements of or conduct tests on any thing in the monitoring area; make any still or moving image or any recording (including a sound recording) of the monitoring area, or of any person, conversation or any thing in the monitoring area; inspect any document in the monitoring area; take extracts from, or make copies of, any such document; take into the monitoring area such equipment and materials as the inspector requires for the purpose of exercising powers in relation to the monitoring area; and the powers set out in subsections 41(2) and (3) [(the power to operate equipment for the purpose of collecting information)] and 42(1) [the power to secure a thing by locking it up, placing a guard or any others means)].
1.59Additional powers include the ability to take a sample of the thing and remove the sample from the monitoring area and the power to seize the thing, if a thing is found during the exercise of a monitoring power and the thing is evidential material and it is not practicable to obtain a warrant—such as in remote areas—or the circumstances are serious and urgent.
1.60An inspector must report the use of such powers to the Director-General describing the exercise of the power and the grounds for the inspector’s belief that it was necessary to exercise their power. The report must be provided as soon as practicable, and no later than 28 days after the exercise of the power.
1.61Inspectors also have investigation powers. As the investigation powers are more expansive than the monitoring powers and may involve the imposition of civil and criminal penalties against persons, there are limits to an inspector’s power to enter the investigation area. An inspector will not be authorised to enter the investigation area unless: a relevant person in relation to the investigation area has consented to the entry; or the entry is made under an investigation warrant. A person commits an offence of strict liability if the person interferes with the securing of equipment, or the secured equipment by an inspector.
1.62An inspector must have regard to nuclear safety and security when exercising or considering whether to exercise monitoring or investigation powers.
1.63The Director-General has the power to appoint Australian Naval Nuclear Power Safety Inspectors. An inspector will be a member of the Regulator. Unlike the appointment of the Director-General and Deputy Director General, discussed in Part 5, the Bill does not specify that an inspector cannot be an ADF officer.
Part 5: the Regulator
1.64Part 5 deals with the Regulator, including the establishment of the Regulator, the appointment of the Director-General and Deputy Director-General, the composition of the Regulator and other members of the Regulator, reporting, and the independence and immunities of certain members.
1.65The Regulator has functions relating to regulated activities and the promotion of nuclear safety in relation to regulated activities, including licensing, investigating compliance, and enforcement. The Regulator may consult or cooperate with others in performing its functions, such as another Commonwealth entity, an authority of a foreign country, or an international organisation. For example, ARPANSA or the Office of Defence Seaworthiness Regulator.
1.66The Regulator would be led by a Director-General and Deputy Director-General, who are appointed by the Governor-General on the nomination of the Minister. The Bill provides that the Director-General and Deputy Director-General cannot be a member of the ADF.
1.67The Bill provides for the independence of the Regulator, with the complete discretion in performing its functions. However, the Minister may give directions to the Regulator in limited circumstances. The Minister must table a statement in both houses of Parliament indicating that a direction has been given to the Regulator within 28 days after the direction is given, if practicable, or, otherwise, on the next sitting day after the end of that period. The Minister explained that under the ANNPS Act:
This power would only be exercisable where the Minister for Defence is satisfied that it is necessary to give the direction to the regulator in the interest of national security and where it is necessary to deal with an emergency …
The purpose of this power is to provide a mechanism to ensure that the functions of the regulator do not prejudice, and are not contrary, to national security during an emergency.
1.68The Regulator may be assisted by members of the ADF whose services are made available in connection with the performance of the Regulator’s functions. The Bill provides for the independence of ADF members of the Regulator from the ADF chain of command when performing functions under the ANNPS Act.
Part 6: other matters
1.69Part 6 sets out other matters such as the ANNPS Act’s interaction with Commonwealth, state and territory laws and international agreements, extraterritorial application, delegations, regulations and other instruments.
1.70Proposed sections 132, 133 and 134 provide for the Bill’s interaction with Commonwealth laws including the ARPANS Act, the Nuclear Non-Proliferation (Safeguards) Act 1987 (the Safeguards Act) and the Work Health and Safety Act 2011 (WHS Act), respectively.
1.71The Bill states that the ARPANS Act does not apply in relation to regulated activities.
1.72The ANNPS Act would not exclude the operation of the Safeguards Act to the extent that the Safeguards Act can operate concurrently with the ANNPS Act. The Bill’s EM explained that this means that requirements under both Acts must be complied with to the extent that it is possible to do so. In the case that it is not possible, the provisions of the ANNPS Act prevail.
1.73According to proposed section 134 of the Bill, the ANNPS Act would not displace the operation of the WHS Act.
1.74The Bill’s interaction with the EPBC Act is not included in the Bill.
1.75Regarding state and territory laws, the Bill provides that:
If a law of a State or Territory, or one or more provisions of such a law, is prescribed by the regulations, that law or provision does not apply in relation to a regulated activity.
1.76The Governor-General is authorised to make regulations prescribing matters required or permitted to be prescribed by the regulations, or as necessary or convenient, to be prescribed for carrying out or giving effect to the ANNPS Act. The EM explained:
Regulations allow laws to keep pace with rapid technical amendments (if required) and technological change in nuclear safety that will need to evolve with Australia’s nuclear powered submarine enterprise (including in relation to matters relevant to Australian submarines).
Transitional Provisions Bill
1.77The Transitional Provisions Bill contains one schedule and four items which pertain to the transition of certain matters relating to the regulated activities from the ARPANS Act to the ANNPS Act.
1.78Item one sets out relevant definitions, including that a ‘regulated activity’ has the same meaning as it is defined in the Bill, outlined above.
1.79Item two of the transitional provisions Bill proposes to transition certain facility licences under the ARPANS Act to licences under the ANNPS Act, including if that licence was in force immediately before commencement of the ANNPS Act and licences that relate to the facility activities outlined in the ANNPS Act.
1.80On commencement of the transitional provisions Bill, these licences have the effect as if they were an Australian naval nuclear power safety licence issued under the ANNPS Act. In other words, they are no longer a licence under the ARPANS Act and the licence conditions outlined in the ARPANS Act no longer apply. Accordingly, these licences would be subject to the conditions outlined in the ANNPS Act, conditions specified by the Regulator, and any conditions prescribed by the regulations.
1.81Similar to item two, item three relates to the transitioning of facility licences, as well as source licences, issued under the ARPANS Act to licences issued under the ANNPS Act. This section clarifies that a licence continues in force (and may be dealt with) under the ARPANS Act, but only to the extent that the licence relates to an activity that is not a regulated activity for the purposes of the ANNPS Act.
1.82Item four of the transitional provisions Bill proposes a regulation-making power to ensure there is an appropriate level of flexibility when dealing with transitional arrangements under the ARPANS Act and ANNPS Act. This section proposes that the Governor-General may make regulations prescribing matters required or permitted by the ANNPS Act to be prescribed by the regulations, or necessary or convenient to be prescribed for carrying out or giving effect to the ANNPS Act.
Financial impact statement
1.83The EM’s financial impact statement indicated that the Bill’s costs associated with the establishment of the Regulator will be subject to future appropriation.
Compatibility with human rights and legislative scrutiny
1.84The statement of compatibility with human rights in the bills’ EMs state that the bills are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
1.85The Parliamentary Joint Committee on Human Rights provided no comment on the bills.
1.86The Senate Standing Committee for the Scrutiny of Bills raised concerns about the civil penalties relating to nuclear safety and licences, as well as the reversal of the evidential burden of proof, and the coercive powers of inspectors.
1.87The Scrutiny Committee noted the significant penalties for individuals who commit offences including 6 years imprisonment and/or 350 penalty units for conducting a regulated activity without a licence, 12 years imprisonment and/or 700 penalty units for not ensuring nuclear safety when conducting a regulated activity, and 25 years imprisonment and/or 1 400 penalty units if a nuclear safety incident occurs in conducting a regulated activity and the person has been reckless or negligent. The Scrutiny Committee stated:
The committee considers that, where significant penalties are imposed, the rationale should be fully outlined in the explanatory memorandum, and should be justified by reference to similar offences in Commonwealth legislation and if not, why not. This promotes consistency and guards against the risk that a person's liberty is unduly limited through the application of disproportionate penalties … The committee’s concerns are heightened given that strict liability is attached to elements of some of these offences and the evidential burden of proof has also been reversed in relation to some of these offences.
1.88The Scrutiny Committee requested the Minister’s advice on these points, noting the guidance set out in the Attorney-General’s Department’s Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (Guide to Framing Commonwealth Offences).
1.89The Scrutiny Committee also raised the coercive powers of inspectors relating to monitoring areas which include powers that can be exercised without the consent of any relevant person in relation to the monitoring area, including seizure of items, without a warrant. It noted, for example, that:
Under common law, government officials cannot enter and search the premises of a person without consent. Although this common law position may be appropriately modified by legislation, the committee will closely scrutinise any conferral of coercive powers ... [T]he default position is that entry into a premises without consent should generally be authorised by a warrant issued by a judicial officer, such as a magistrate.
1.90The Scrutiny Committee acknowledged that there may be sound reasons to depart from the standard Commonwealth law position in relation to seizing evidence without a warrant or monitoring and investigating an industry which potentially poses serious dangers to public health, and sought further advice from the Minister on the rationale for the application of the provisions.
Minister’s response
1.91On civil penalties, the Minister advised that the penalties in the Bill were developed having regard to relevant principles in the Guide to Framing Commonwealth Offences, including that significant penalties may be appropriate where the consequences of the commission of the offence are particularly dangerous or damaging. In the context of nuclear safety:
… the consequences of offending conduct could involve serious harm to the environment, injuries or death, and significant social, economic, diplomatic or strategic harm to Australia.
1.92Due to this context, the Minister stated that whilst the penalties were developed having regard to existing offences, it was considered that the offences and penalties in the ARPANS Act are not appropriate to be reproduced in the Bill.
1.93Additionally, the Minister advised that the penalty for the most serious criminal offence in the Bill, subclause 18(5), which applies where a person engages in conduct that is a regulated activity and a nuclear safety incident occurs, is benchmarked against penalties for industrial manslaughter offences recently enacted in the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 which are broadly commensurate with the seriousness of the offence.
1.94On the coercive powers, the Minister advised that the ‘unique operating circumstances of the conventionally armed nuclear-power submarine enterprise necessitate a departure’ from the monitoring warrant regime principles outlined in the Guide to Framing Commonwealth Offences. The Minister advised that due to the operating environment and inherent mobility of Australian submarines, monitoring activities must be undertaken as and when the opportunity presents, and therefore a monitoring warrant scheme would be impractical. The Minister considered that a ‘requirement to obtain a warrant to enter those places on each occasion to exercise relevant powers would frustrate the objects of the Bill to promote nuclear safety’. Additionally, the Minister reiterated that inspectors must exercise monitoring powers with regard to safety and security, noting the reporting requirements in the Bill if an inspector exercises seizure powers, and that inspectors will be suitably qualified and trained in the exercise of powers.
1.95The Scrutiny Committee thanked the Minister for the response and requested that an addendum to the explanatory memorandum containing the key information provided by the Minister be tabled in the Parliament as soon as practicable, noting the importance of these explanatory materials as a point of access to understanding the law.
International context
1.96This section provides a high-level comparison of the regulatory framework proposed by the Bill with the existing regulatory frameworks and reporting requirements of the UK and US.
United Kingdom
Regulatory framework
1.97In the UK, there is a broad framework for regulating nuclear activities which encapsulates workplace health and safety as well as environmental protections. There are two key regulators relevant to nuclear-powered submarines.
1.98The Office for Nuclear Regulation (ONR), established by the Energy Act 2013 (UK), is ‘the UK’s independent nuclear regulator for safety, security and safeguards’ and its mission is ‘to protect society by securing safe nuclear operations’. The ONR enforces a range of legislation including the Nuclear Installations Act 1965 and the Nuclear Industries Security Regulations 2003. On defence sites, the ONR also regulates the Health and Safety at Work Act 1974, including Radiation (Emergency Preparedness and Public Information) Regulations 2019 and Ionising Radiation Regulations 2017. The ONR has powers of inspection, investigation and enforcement, and ‘works closely with [the Defence Nuclear Safety Regulator (DNSR) (outlined below)] to ensure efficient, effective and complete regulation is delivered on all the defence related sites’.
1.99The second key regulator is the DNSR which regulates nuclear and radiological safety in Defence Nuclear Enterprise (DNE)—comprising of the Naval Nuclear Propulsion Programme and the Nuclear Weapon Programme. The DNSR was established by the Director General Defence Safety Authority, appointed by the Secretary of State for Defence.
1.100The primary function of the DNSR is the ‘regulation of nuclear safety across the DNE, holding individuals to account and providing independent assurance of compliance against the Secretary of State for Defence Policy Statement on Health Safety and Environmental Protection’. The Ministry of Defence’s Defence Nuclear Safety Regulations issued by the DNSR define the nuclear regulatory framework for the DNE. The goal of these regulations is to ensure ‘the management of safety and environmental protection of defence nuclear activities can achieve outcomes at least as good as those governed by the UK and international legislation’.
1.101The DNSR is required, where defence has exemptions, derogations or dis-applications from health safety and environmental protection legislation, to ‘maintain departmental arrangements that produce outcomes that are, so far as reasonably practicable, at least as good as those required by UK legislation’. As such, the DNSR aligns its regulations as closely as possible to those of the ONR, deviating only where necessary.
1.102As the DNE is delivered through a mixture of Crown-owned and operated sites, Crown-owned and contractor-operated sites, and contractor-owned and operated sites, there is overlap regarding whether a site is licensed by the ONR or authorised by the DNSR, and whether the ONR is responsible for WHS. The General Agreement between Ministry of Defence and Office for Nuclear Regulation (the General Agreement) sets out the relationship between the Ministry of Defence and the ONR in discharging their respective roles and responsibilities for nuclear, radiological and conventional health and safety in respect of the Defence Nuclear Programme.
1.103Additionally, the UK has a Defence Nuclear Safety Expert Committee (DNSEC) which provides independent advice to the Ministry of Defence based on scrutiny of safety arrangements across the Defence Nuclear Enterprise. Members of the DNSEC are from both the public and private sectors, including the Head of DNSR. The ONR attends in an observer capacity.
Reporting requirements
1.104The General Agreement outlines that the ONR:
shall be informed of safety related incidents that occur on DNP sites;
produce quarterly statements of incidents that meet the ONR’s Publication Criteria or are International Nuclear and Radiological Event Scale (INES) level 2 or above;
produce an annual summary of all events reported to ONR;
report annually to MOD; and
issue the ONR Chief Nuclear Inspector’s annual report.
1.105The Director General of the Defence Safety Authority also provides an annual assurance report to the Secretary of State for Defence.
United States
Regulatory framework
1.106In the US, the Naval Nuclear Propulsion Program (NNPP) is jointly managed and self-regulated by the National Nuclear Security Administration (NNSA), a semi-autonomous agency within the Department of Energy, and the Department of the Navy. The Administrator of the NNSA also carries the title of Under Secretary for Nuclear Security of the Department of Energy and is ‘subject to the authority, direction and control’ of the Secretary of Energy.
1.107On the other hand, the Nuclear Regulatory Commission (NRC) licenses and regulates the civilian use of radioactive materials and therefore does not regulate safety relating to operating nuclear-powered submarines. However, the NRC is responsible for the transportation, storage, and disposal of nuclear materials and waste, including high-level radioactive waste generated by the Department of Energy.
1.108The Director of the NNPP heads both units responsible for the NNPP within the Department of Energy and the Department of the Navy ‘so that the activities of each may continue in practice under common management’. The position can be held by either a civilian or an officer of the US Navy, active or retired.
1.109The NNSA is broadly responsible for ‘enhancing national security through the military application of nuclear science’ and are responsible for ‘the safe and secure operation of facilities under the purview of NNSA. The Administrator of the NNSA must ensure the NNSA ‘complies with all applicable environmental, safety, and health statutes and substantive requirements’. The NNSA regulates safety-related activities of its nuclear facilities except those under the Director of NNPP.
1.110The Executive Order 12344 – Naval Nuclear Propulsion Program defines the Department of Energy and Department of Navy functions as they relate to NNPP. Responsibilities conferred on the Director of the NNPP from each department include such things as:
‘the safety of reactors and associated naval nuclear propulsion plants, and control of radiation and radioactivity associated with naval nuclear propulsion activities, including prescribing and enforcing standards and regulations’;
‘research, development, design, acquisition, specification, construction, inspection, installation, certification, testing, overhaul, refuelling, operating practices and procedures, maintenance, supply support, and ultimate disposition, of naval nuclear propulsion plants, including components thereof, and any special maintenance and service facilities related thereto’;
‘training [programs in each department related to naval reactors] and assistance and concurrence in the selection, training, qualification, and assignment of personnel reporting to the director and of personnel who supervise, operate, or maintain naval nuclear propulsion plants’; and
the administration of the NNPP, including ‘oversight of program support in areas such as security, nuclear safeguards and transportation, public information, procurement, logistics, and fiscal management’.
Reporting requirements
1.111The Director of the NNPP reports directly to the Chief of Naval Operations within the Department of the Navy as well as to the Secretary of Energy in the Department of Energy.
1.112The NNPP publishes four annual reports on environmental monitoring, radioactive waste disposal, occupational radiation protection, and occupational safety and health.
Comparison with Australia’s proposed regulatory framework
1.113In Australia, the Bill would establish an independent regulator which sits within Defence, reporting to the Minister for Defence, to regulate activities relating to nuclear-powered submarines. The roles, responsibilities and reporting requirements of the Regulator have been outlined above. As noted above, the Minister has stated that the new framework would be harmonised with workplace health and safety legislation and civilian nuclear safety regimes, including working closely with ARPANSA who will continue its role as a central authority on radiation protection and nuclear safety.
1.114Broadly, this structure of regulation is not dissimilar from the UK model where the ONR’s role is similar to ARPANSA with the exception of being responsible for WHS on defence sites, plus a Defence regulator (the DSNR) which is responsible for regulating the UK’s Naval Nuclear Propulsion Programme. Due to some overlap regarding whether a site is licensed by the ONR or authorised by the DNSR, the UK has established a general agreement to clearly delineate the roles and responsibilities of each agency in respect of the Naval Nuclear Propulsion Programme. There are also some reporting requirements that occur between the two agencies. However, similar to the Australian Regulator, the DSNR reports to the Secretary of State of Defence. Additionally, the UK also has an independent advisory body, the DNSEC, that provides advice to the Ministry of Defence. There is no equivalent within the proposed Australian framework.
1.115Like the UK and proposed Australian models, the US has a separate civilian regulator, the NRC, which is also responsible for the management of high-level waste from the US naval nuclear program. A difference for the regulation of the US naval nuclear program is that it is jointly managed by the Department of Energy and the Department of Navy through the Director of the NNPP who heads both units within each department to ensure common management of the activities. The responsibilities conferred upon the director from each department are outlined in an executive order. Whilst the regulation of nuclear activities is split between two departments, the Director of the NNPP acts as a means to capture the relevant roles of each department which is a slightly different model to that of the UK and Australian regulatory frameworks.
1.116The UK and US regulatory frameworks appear to have clearer delineations of the specific roles and responsibilities between regulatory agencies either through general agreements or executive orders. However, it is noted that the regulatory frameworks of the UK and US have been in operation for decades and have the benefit of experience to mature their regulatory regimes over time. Importantly, the Australian Minister for Defence has flagged the use of regulatory instruments to allow for flexibility and to further develop the detail of Australia’s regulatory framework.
Conduct of the inquiry
1.117Details of the inquiry were made available on the Committee’s website. The Committee contacted a number of organisations and individuals inviting written submissions by 1 February 2024.
1.118The Committee received 41 submissions, including one confidential submission. The public submissions are listed at Appendix 1.
1.119The Committee held three public hearings, two in Canberra on 13 March 2024 and 22 April 2024, and one in Henderson, WA on 4 April 2024. The witness lists for these hearings can be found at Appendix 2.
1.120On 4 April 2024, the Committee conducted a site visit at HMAS Stirling on Garden Island, WA. As outlined previously, HMAS Stirling is instrumental in supporting Royal Australian Navy vessels, accommodating visiting US and UK nuclear-powered submarines through SRF-W, and will be home to Australia’s future conventionally armed nuclear-powered submarines. Defence personnel hosted the Committee’s visit which included: a briefing on HMAS Stirling, the Submarine Force, and SRF-W; a tour of Diamantina Pier and wharf area; a tour of HMAS Collins; and a tour of newly built senior seaman living quarters.
Acknowledgement
1.121The Committee thanks the individuals and organisations that took the time to contribute to the inquiry.
1.122The Committee were also grateful for the assistance and hospitality afforded by the staff of HMAS Stirling and HMAS Collins in facilitating the Committee’s site visit in what was a valuable experience.