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Transcript from the Sixth Article VI Forum Meeting
Berlin, Germany
January 29-30, 2009

Ambassador Peter Gottwald

speaking on the panel, "Strengthening and Transforming the Regime"

(This is a rush transcript)

Yes, Good Morning everybody. Thank you very much for your kind introduction, and I will have to look at my CV to find out what happened, but I certainly do not deny having been in Vienna. To the contrary, I very much enjoyed it every day. The only thing I regret about it is that I had to leave already after two years. I would have not minded staying little longer, but this job called and this is a very enjoyable one, and I think I had the good luck to come to it at a time when things are really moving on the arms control front. We talked about this yesterday, and I was very encouraged by all the discussions. At the same time, as Alexander just mentioned, of course, quiet often the devil is in the details, and we have to come from the long term perspectives to how to do the things, and the little word how. Three letters is sometimes the most difficult part of it. And I would like today, what our Minister, Mr. Erler, more or less introduced to you already, and talk about more details of one aspect of the nuclear fuel cycle for which Germany is trying to put some ideas into the discussion and we have worked on this in Vienna and other forums and of course here in Berlin, and we will continue to do so.

So what is it all about? As been pointed out yesterday, and as you all know, there is a talk about nuclear nations. There is the perspective that with raising all prices, with the insecurity of the deliver of oil and gas, which we just had to experience here recently, and, first and foremost, the concern about CO 2 in the climate debate. This is all bringing many more countries than in the past to reconsider their energy options and to consider the nuclear energy option. Now, if that is happening, and the IAEA estimates that nuclear electricity generation could double in the next two decades, then many of the reactors to provide this nuclear electricity will be built in the countries that are not presently producing electricity with nuclear energy. And, that means we need to find ways to ensure that not along the line of this growing use of nuclear energy we have a counteracting sort of tendency regarding the dangers of nuclear weapons. And, the nuclear weapons-free world is what we need to achieve. So, we have to see how our two trends, our quest for a nuclear weapon free world, and these possible nuclear nations. How are they compatible and can be made compatible?

You all know the same technology that can be used to produce low enriched uranium for reactors, for reactor fuel, is the same technology can be used to highly enrich uranium for nuclear weapons. Let me at this point state something very clearly, which is very important for out debate here. The [German] Federal Government is a very strong defender of the NPT, a strong defender of all its pillars on the equal footing, be it the commitment to non-proliferation in Articles II and III, the right to peaceful use of nuclear energy in Article IV, and of course, the commitment to Article VI, which is the essence of our conference here. The inalienable right in Article IV, for the peaceful use of nuclear energy without discrimination, entitles all member states, as you know, in conformation with Articles I and II, to operate and or develop their own enrichment facilities. Now, concerns that this could lead to an abuse of such enrichment facilities for military purposes, contrary to the obligations in the NPT, has triggered with the current discussions on Article IV. This is an extremely delicate discussion, as it could be seen to put into question the grand bargain we are talking all the time of commitments, which is a very substance of the NPT. It lets some to claim that there is a loophole in the NPT that needs to be closed, that the international community would have to find a way to mend or to reinterpret the NPT in such a way that would deny non-technology holders the access to fuel-site technologies. Frankly, Germany does not believe in such an approach. First, we are well aware that we cannot and must not reinterpret the NPT in a one-sided of manner that would shift the carefully correlated balance between nuclear weapons states and non-nuclear weapons states. Second, if there is one loophole at all, it is not a new loophole. Article IV is a result of well-known and much discussed issue during the extensive and complex negotiations for Nuclear Non-Proliferation Treaty. Third, it would be completely unrealistic to renew, renegotiate the treaty. This would open a Pandora’s Box and put the whole Nuclear Non-Proliferation Treaty at risk.

So what should we do? I am convinced that we do have alternatives that are much more promising to ensure that the non-proliferation objective of the NPT can be obtained. Our conviction is that the multilateral approaches to the nuclear fuel cycle are what we need to think about, and that is something I need to go into more details. You know, that is a proposal also by Mohamed ElBaradei , he made it in 2003 in a formal way, and it is appearing in Board of Governors discussions in Vienna many times, and I believe it is the right idea. In a globalized world, multilateral solutions are very often superior to national solutions. This, in my view, very much holds true also for the nuclear fuel supplies and the whole nuclear cycle. Obviously, a multilateral operated installation is much more open to doubt and misinterpretation, let alone abuse than a national-managed one. In a way, this is already practiced by own Urenco concept with United Kingdom, the Netherlands and Germany jointly operated enrichment facilities. Multilateral solutions, first and foremost, require trust and confidence between the parties concerned. How are we going to create that? There are different ideas. The European Union, in a step to support the multilateral approaches and to allow practical steps to go forward, just in December last year, pledged €25 million to support the creation of an International Fuel Bank under IAEA control to have, and this is based on proposals by the NTI [Nuclear Threat Initiatives], and that Nuclear Fuel Bank could be the first element in a wider menu of multilateral solutions for nuclear fuel cycle. The fuel bank and supply assurances can only be the first step to build trust and confidence.

Assurances of the stable nuclear fuel supply might not be enough, these assurances alone to convince new customers for nuclear fuel to reframe from investing and a creation of a national solution for the fuel requirements. To be completely independent form any outside pressure and influence, a direct opportunity for the interested countries to attain ownership of enrichment facilities in the multilateral way. Therefore, from our point of view, it would be much better to put their concerns at ease than the concerns of the international community. Incidentally, making the use of enrichment technology available to those who require it for their peaceful nuclear projects in proliferation safe way would, and could, avoid another obstacle threatening the constructive atmosphere that we so dearly need for the upcoming NPT review conference next year. That is why Germany made a formal proposal in 2007, for the Multilateral Enrichment Facility under the control of the IAEA. We call it the Multilateral Enrichment Sanctuary Project, and as everything in arms control need acronym, we call it MESP. We believe that our proposal can accommodate legitimate concerns regarding nuclear fuel supplies of NPT members interested in the peaceful use of nuclear energy, as well as can accommodate well founded proliferation concerns. Countries interested in having reliable independent supply of nuclear fuel could decide that they and nuclear fuel authority or industry acquire ownership in a multilateral enrichment plan, in a way like in Urenco. This could be located in the territory available to the IAEA by a host state. The host state would grant all the necessary rights and immunities to the IAEA in order to give effective control of the territory to them, and this would made the enrichment plan independent from the influence of the technology holder of the host state. Due to these parameters, we call this territory the sanctuary. The plan would be managed by an international commercial company, and after putting a lot of thought and research into this, we can say confidently today that this idea is fully compatible with IAEA statute which allows IAEA engage in an operation like MESP. The concept has vast built-in flexibility, so it’s not one-size-fits-all approach at all. It is possible to adapt it to the requirements of any interested group of countries. Let me underline first and foremost, we do not deny any country the development of a national or regional fuel cycle technology of their own, but we believe, and we believe it firmly, that MESP concept is a valuable alternative to costly, autonomously, developed enrichment capacities, even for states with the most serious concerns with respect to their fuel cycle supply security. We believe this concept can offer enrichment services at competitive prices without any proliferation concerns by putting the enrichment facilities under the control of international widely-respected authority, the IAEA. In addition, we are not proposing to establish the MESP in one of the countries of the current technology holders. Instead, to further enhance the credibility, we would like this concept to be implemented in a third country ready to host such an MESP sanctuary. Such an additional independent enrichment supplier could make sure that no country has to fear interruption of fuel supplies for any political reason outside the non-proliferation concern.

MESP is just one of the several proposals to serve the aim of improving supply security. They all have their own merits, and in many ways complement each other. No one solution would fit all. So, I am, at last, in no way saying that MESP is the only solution to this problem, but we believe it is one contribution to it. And, some countries would be content to rely on market, will not need it at all. Others would like to have political guarantees, but some would consider it necessary to have their own enrichment facility. For them, our MESP should be an attractive concept. MESP might be a bit complicated to set up, but is worthwhile to pursue. We tested its legal soundness. We drafted model agreements which could lay the legal grounds. We have presented, in fact, some of this work already to the IAEA in Vienna. They are finalized and sound. We continue to work on the details and we will continue to present progress of our work in the IAEA and the Board of Governors in Vienna.

At the end, from our point of view, it is not important which proposal would be the first to be realized, as long as it is guaranteed that countries feeling the need to improve fuel supplies security do have viable options without having the need to develop their own fuel supply cycle and are convinced that this is the right approach for them. We strongly believe that the multilateralization concept, which incidentally is one of the founding ideas of the IAEA, is the most convincing approach to square the circle between the preservation of the member states rights and the need to harness the sensitive technology to avoid its military abuse. Multilateralization concepts can be a productive and constructive way to overcome part of the distrust bedeviling the NPT and threatening the Review Conference. The further discussion and the particular implementation should and could be an important contribution and a decisive step to a nuclear weapon free world. I am very happy to answer questions regarding our concept, thank you for your attention.