OBLIGATION EXCHANGES
Another feature of the safeguards system are what are called "obligation
exchanges" (colloquially known sometimes as "flag swaps").
"Obligation exchanges" are one aspect of the application of
the equivalence principle in nuclear accountancy. As explained by DFAT/ASO:
II.18 A situation where such an exchange might arise, for example,
is where a power reactor operator has several fuel elements each containing
a proportion of AONM. Rather than continuing to account for the AONM
over several fuel elements, the operator may choose to consolidate all
the quantities of AONM into one fuel element, thereby simplifying subsequent
record keeping. An obligation exchange of this kind might take place
within the fuel inventory of a single reactor, or might involve several
reactors operated by the same utility.
II.19 Obligation exchanges are permitted provided they would
not result in reducing either the quality or the quantity of the nuclear
material subject to Australian safeguards. An exchange must be between
nuclear material within the same material category, e.g., low enriched
uranium (LEU) cannot be exchanged for natural uranium, and between equivalent
quantities of material, i.e., the quantities must balance based on the
content of the fissile uranium isotope uranium-235.
II.20 Obligation exchanges would usually be limited to a single
safeguards jurisdiction, e.g., between material located in the same
country or within Euratom, but international obligation exchanges, i.e.,
between material located in different countries or located within Euratom
and a non-Euratom country, may be permitted subject to case-by-case
consent. To date, there have been no international obligation exchanges
involving AONM although one application has been received at the time
of writing. (S 60, II.18-20, 8-9)
Obligation exchange was at the heart of an incident disclosed by Der
Spiegel in 1988 which has often been portrayed as illustrating weaknesses
in the safeguards system. It figured prominently in a submission from
Friends of the Earth Sydney (S 40, Part 2, 90ff).
The Der Spiegel allegations claimed that there had been "flag
swaps" between AONM and nuclear material of different national origin;
that Euratom, together with the German nuclear firm Nukem, set out to
circumvent safeguards controls on Australian obligated nuclear material,
in particular, the requirement for Australian consent for enrichment above
20 per cent; that the Australian Government opposed "changing labels"
and has a system of "special approvals" which had not been complied
with; that Euratom was laundering South African uranium by swapping labels;
and that Australian obligated nuclear material had been swapped with "phantom"
material.
John Kerin, the then Minister for Primary Industries and Energy, responded
that in the case in question, relevant conditions under the Australian
Euratom agreement had been met; that the uranium enriched beyond 20 per
cent was subject to US safeguards following an obligation exchange in
which an equivalent volume of nuclear material remained subject to Australian
safeguards; that the exchange occurred wholly within the Euratomic jurisdiction
whilst Der Spiegel was referring to policy regarding inter-jurisdictional
obligation exchange; that there was no barrier to Euratom purchasing South
African or Namibian uranium and using it for obligation exchanges within
jurisdiction as provided for in the agreement; and, finally, the claim
about "phantom" material had not been substantiated.
Friends of the Earth Sydney state that "[i]t has, however, become
clearer and clearer that actual atoms of Australian uranium via the 'equivalence
principle' and the Euratom 'pool' can and do get used in both the French
and the UK weapons cycle" (S 40, Part 2, 94). The claim is not accepted
by relevant Government authorities.
A good deal more evidence would be needed to conclude that the equivalence
principle constitutes a loop-hole whereby AONM enters (or has entered)
military programs and should, therefore, be abandoned.