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Disarmament Diplomacy No. 76, Cover design by Paul Aston

Disarmament Diplomacy

Issue No. 76, March/April 2004

The Nuclear Fuel Cycle:
A Challenge for Nonproliferation

Lawrence Scheinman

More than a half-century into the nuclear age the world continues to wrestle with the challenge of reconciling the development of nuclear energy for peaceful purposes with preventing states using their nuclear knowledge, technology and assets to acquire nuclear weapons. Article IV of the NPT affirms that member states have the "inalienable right...to develop, research, production and use of nuclear energy without discrimination and in conformity with Articles I and II of this treaty."

From the beginning this was understood by its proponents to presumptively encompass all fuel cycle actvities, despite the fact that uranium enrichment and plutonium production potentially put a state in a position to produce weapons usable material. As a former chairman of the Israeli Atomic Energy Commission, David Bergmann once observed "...by developing atomic energy for peaceful uses, you reach the nuclear weapon option. There are not two atomic energies."

Interest in institutional arrangements for the nuclear fuel cycle date back to the start of the nuclear age when the United States tabled a proposal for international ownership and control of sensitive nuclear fuel cycle activities (Baruch Plan, 1946). Responding to recent concerns relating particularly to the nuclear programmes of Iran and North Korea, IAEA Director-General Mohamed ElBaradei has again raised questions about institutional strategies, suggesting that enrichment and reprocessing be limited to facilities under international control and that the management and disposition of spent nuclear fuel also be brought under some form of multinational arrangement.

The essay below is one that I first published in International Organization in 1981. Arguing that many of the ideas and arguments are still relevant (and still unsolved), Disarmament Diplomacy requested permission to reprint it, in order to stimulate discussion and avoid reinventing the wheel. My intention in 1981 had been to explore the concept, the historical experience, and lessons to be drawn from specific cases with a view to providing insight into what was then an emerging discussion of the potential utility, role and prospects for institutional approaches to the problem posed by Article IV for proliferation.

What makes an old issue more acute today is that the environment in which it arises is different from that of a scant decade earlier. Four considerations are particularly relevant.

First, the once predominating Cold War and the disciplines it imposed on state behaviour have been displaced by regional political-security agendas. For some states whose sense of security is more tenuous the prospect of being in a position to develop a nuclear deterrent if necessary may be greater. For others, aspirations to regional predominance and/or international standing may motivate a similar interest. In either event, regional and international stability stand to suffer if those incentives translate into concrete actions.

Second, over time sources of supply of sensitive nuclear technologies or their components, particularly dual-use items, have multiplied and expanded beyond states to illicit, blackmarket transfers as underscored in the recent revelations of the activities of A.Q. Khan in relation of Libya and Iran. Even among states, not all adhere to the nuclear supplier guidelines or exercise sufficient controls on the transfer of sensitive technologies by companies or industries under their jurisdiction.

Third is the experience of states party to the NPT either conducting clandestine weapons relevant activities or more ominously using their NPT status to openly and legally accrue fuel cycle capabilities that could put them in a position to rapidly transition to nuclear weapon status should they decide at some point in time to invoke the NPT withdrawal clause. That facilities and activities be declared and under international safeguards is critically important, but that speaks only to capabilities, not to motivation and intention.

Fourth is the fact that national security and international stability is now threatened not only by the risk of state proliferation but as well by the potential of organized transnational terrorist groups obtaining access to weapons-usable materials. The larger the number of potential sources of such materials the greater the risk to the social order.

How to come to grips with these problems is now a matter of immediate concern, with attention focused on a range of responses including further strengthening of safeguards, tightening export controls, pro-actively interdicting transfers of dangerous technologies and equipment, and exploring innovative institutional arrangements that would forestall the spread of nationally owned and operated sensitive fuel cycle activities. We hope this 23-year old essay will stimulate more in-depth discussion with a view to finding security enhancing solutions.

Multinational Alternatives and Nuclear Nonproliferation

The application of multinational institutional arrangements to sensitive nuclear fuel cycle facilities has attracted the attention of nonproliferation policymakers since the outset of the nuclear age. The Baruch Plan was the earliest and most far reaching formulation of this approach. It proposed that, rather than leaving potentially dangerous nuclear activities to national development, subject only to inspection to assure non-diversion of technology for military purposes, such activities should be placed under international ownership and control.

Institutional arrangements in the Atoms-for-Peace era conversely emphasized political commitments and verification safeguards, rather than organizational strategies designed to curtail the spread of national fuel cycle facilities, and, indeed, expected the spread of such facilities as fuel cycle development progressed. In the past decade, especially since 1974, there has been a resurgence of interest in institutional arrangement more comprehensive than international safeguards, and considerable attention is again being given to multinational alternatives. In this chapter we will examine the rationale for multinational institutions, and then review some of the multinational experience in the nuclear sector. We will consider why multinational approaches have drawn renewed attention in the years since the 1974 Indian detonation. We will also assess the political feasibility of multinational approaches to fuel cycle problems, and evaluate the potential policy consequences for non- proliferation.

The rationale for multinational institutional arrangements

The rationale for multinational institutional arrangements for the nuclear fuel cycle is relatively straightforward. The dispersion of nationally controlled sensitive facilities now threatens to transform weapons proliferation; the adequacy of international verification safeguards for preventing this is at issue, while bilateral controls are becoming less feasible and less effective, and the international community is not ready for more comprehensive international solutions.

The objective of nonproliferation policy is to maintain a separation between peaceful and non-peaceful uses of nuclear energy, and to ensure that access to the peaceful benefits of nuclear technology does not increase the risk of weapons spread. International cooperation in peaceful nuclear energy has thus far been premised on political commitments to use nuclear transfers exclusively for peaceful purposes, combined with an acceptance of international safeguards to verify compliance with such commitments.

No nuclear fuel cycle is entirely free of some proliferation risk, but the level of nuclear activity in virtually all the non-nuclear weapon states was generally regarded, until the early 1970s, as fitting within the capabilities of IAEA safeguards. The dissemination of materials and facilities which could pose a serious proliferation risk (plutonium, highly enriched uranium, reprocessing facilities, enrichment plants) was very limited. International nuclear commerce was conducted on the basis of the political commitments referred to above, reinforced by the NPT, which extended safeguards undertakings for participating non-nuclear weapon states to all peaceful nuclear activities, regardless of whether they were based on imported or indigenously developed materials. And there was high confidence in the system of inter- national safeguards to verify compliance with those commitments. Coincidentally, this was an era in which the United States exerted predominant influence over the shape, structure, and conditions of international nuclear development and commerce.1

As discussed by Joseph Nye in this issue, an erosion of confidence in the international nuclear regime set in with the diminishing of U.S. predominance, and the increasing dispersion of sensitive technologies for which verification safeguards were not fully adequate. This was accompanied in 1974 by the graphic illustration of the Indian test, showing the ultrafine line between peaceful and non-peaceful uses of nuclear technology, and also suggesting a limited effectiveness of international safeguards alone for sustaining a nonproliferation regime. The transition to a new and more complex level of nuclear development, leading states into a position to possess directly weapons-usable materials, put a fundamentally different cast on the definition of regime effectiveness.

The central problem for nonproliferation policy after 1974, then, was how to cope with this challenge to regime effectiveness. In principle the problem could be approached technically (seeking to modify materials or facilities to neutralize their proliferation threat, identifying alternative fuel cycles which might avoid or limit access to sensitive materials), institutionally (establishing rules and arrangements to reduce the risks associated with deployment of sensitive technologies, such as limiting the character, location and operation of sensitive facilities, and placing conditions on the use of the material they produce), or through a combination of mutually reinforcing technical and institutional measures.

In fact both technical and institutional strategies were devised for dealing with the problem of sensitive materials. Explicitly technical approaches lie outside the purpose of this essay. Nevertheless, it is important to note that extensive technical analyses of fuel cycles (and particularly their components) were undertaken at the national and international levels. These assessments suggested various technical ways of increasing fuel cycle proliferation-resistance, but they also underscored the economic, technical, and timeliness limitations inherent in many of them. The International Nuclear Fuel Cycle Evaluation (INFCE), for example, found several potential technical improvements which were more promising for dealing with sub-national seizure threats than national proliferation risks, either because the technical improvement could be reversed, or because a determined state could build a clandestine facility to carry out the illicit activity. As one analyst has pointed out, "one of the clearest messages to emerge from these studies (INFCE, NASAP) is that, in general, the impact of (technical) measures on the full range of proliferation risks is limited"2 i.e., they do not, of themselves, compensate for the identified deficiencies of verification safeguards for sensitive materials and facilities, since they do not come to grips with the issue of prevention of misuse. This does not foreclose deployment of existing, or as yet unidentified, technical approaches to improving the proliferation resistance of the nuclear fuel cycle, but it does place them in a less prominent context than some might have anticipated.

Institutional responses have both near- and long-term dimensions. They also address a different level of the problem-control over misappropriation of nuclear material and technology, rather than the detection of such misappropriation, which is the central thrust of international safeguards today. In the near-term, the American-initiated supplier state discussions (in what came to be known as the London Group) sought to achieve some consensus on export policy - to avoid the risk that commercial competition would undermine international safeguards objectives. Following its own intended export policy practice, the United States also sought agreement for a moratorium on further transfers of sensitive technology, or at least a mandatory supplier state involvement wherever any future transfer might be made. The eventual supplier guideline dealing with this matter only recommends, but does not require, such involvement;3 but the principal supplier states capable of making such transfers have indicated their intention not to make any such further transfers in the foreseeable future.

Seeking to impose a moratorium on transfers of sensitive technology might be an appropriate initial response to gain time while more far-reaching and effective international arrangements are devised, but technology denial itself cannot be a viable long-term nonproliferation strategy. Some structurally- intermediate arrangement to deal with the problem over the longer term has to be found, if nonproliferation is to remain effective-since national forbearance in seeking access to advanced higher-risk technologies cannot last indefinitely, and Baruch-type solutions remain inconsistent with political realities.

In such circumstances, a number of alternatives can be identified, including:

(1) supplier-state commitments to fully-reliable assurance of supply, together with multilateral and/or international fall-back provisions in the event of supplier breach of obligation, such as an internationally negotiated nuclear fuel safety net, or an international nuclear fuel bank;

(2) the conducting of sensitive activities on a national basis, under carefully defined and significantly augmented international controls, particularly over resulting sensitive nuclear materials; and

(3) joint arrangements for technological activity, such as multinational sensitive fuel cycle ventures.

All of these approaches deal in some measure with the problem of control, although the extent to which they do so depends heavily on the commitments to which the participants agree. The first approach really amounts to a consumer dependence on enhanced supplier integrity, coupled with international mechanisms in the event of a breach of commitment. While potentially attractive to many, this approach, as suggested in the analysis undertaken in the INFCE Working Group III, may not be satisfactory where countries want reduced external dependence or a direct equity stake in the supply system upon which they must rely.4 The second approach essentially endorses national development and deployment of sensitive fuel cycle facilities, although under substantially upgraded controls and restraints.5 Whereas the first alternative appears weighted toward nonproliferation interests, by implicitly curtailing the spread of sensitive activities, and thus may not adequately meet all energy security concerns, the second alternative very likely would be found deficient on nonproliferation criteria.

The third approach, that of multinational arrangements, is tantamount to denationalizing sensitive fuel cycle activities by placing decisions on the operation of nuclear facilities, as well as on the disposition of their product, in the hands of the collectivity rather than the individual states. On its face it appears to meet energy security concerns by providing participants with a legal and economic stake in the supply system, and to meet nonproliferation concerns by limiting the spread of sensitive facilities, localizing and complicating the risk of proliferation, and going beyond conventional verification safeguards. It also, however, involves the development of new organizational arrangements of a potentially complex political, economic, and managerial nature, and importantly requires states' agreement forsaking exclusively national control over energy technology.

In the remainder of this article we will explore the various aspects of multinational institutional arrangements as they relate to nonproliferation. Any evaluation must take three factors into account.

(I) There is no single, generic multinational formula that would be satisfactory for all technologies and all partners. While all such ventures will have to meet certain basic requirements, successful implementation of multinationalism will depend on the flexibility of its application. One of the apparent virtues of the multinational concept is that it is capable of being developed in a variety of ways, as such ventures as EURODIF; URENCO and EUROCHEMIC illustrate.

(2) Multinational arrangements are not stand-alone nonproliferation options. Arranging multinational ownership, management, or operation does not offer any significant nonproliferation benefit by itself, and even could have the counterproductive effect of stimulating an unnecessary early deployment of high-risk technology. Multinational arrangements must be part of an integrated regime which covers not only the facility itself, but the material produced-although different organizations could have different responsibilities under an umbrella regime. In the case of multinational reprocessing, for example, it would contribute little to nonproliferation if participating members were free to remove the separated plutonium from the reprocessing plant to use as they saw fit, subject only to international safeguards. To be effective, in nonproliferation terms, a multinational arrangement would have to ensure not only that the facility and its technology could not be abused, but also that its product would be subject to appropriate international or multi-national controls over its storage, release, use, and disposition. For maximum effectiveness, the control arrangements would have to be established in a framework of understandings and commitments incorporating all of the principal elements of sensitive fuel cycle activity.

(3) An institutional arrangement can only be as strong as the foundation upon which it is built. Multinationalism, or any other institutional approach, cannot substitute for consensus; it can only reflect and reinforce that consensus. To be viable, institutions must be politically acceptable, thus requiring a consensus on the nature, purpose, and limits of the nuclear fuel cycle, and on how nonproliferation and energy security goals relate to one another.

Multinationalism in historic perspective

The term multinational has been used to describe a broad array of institutional arrangements, from joint ownership and management of facilities at one end of the spectrum, to market-sharing arrangements between nationally owned and operated facilities at the other.6 While this demonstrates flexibility, it also entails a lack of precision that reduces the analytic utility of the concept. We will use multinational in the broad sense when discussing different specific ventures; but in later evaluating multinationalism for nonproliferation objectives, we will define it as an arrangement in which three or more governments agree to the establishment of an entity involving joint ownership, and where national decisions regarding the entity are subordinate to group determination. Joint ownership mayor may not extend to joint operation. The essential point is that control and decision making are not defined or carried out on a purely national basis.

Some generic observations

A number of multinational ventures in sensitive nuclear fuel cycle activities have been established in the past. Almost without exception they have involved the West European countries which were technologically advanced and shared common interests. They have been largely focused on the development and initial deployment of emerging nuclear technologies, and they have been primarily motivated by economic, technical, commercial, or resource considerations, rather than by nonproliferation concerns. This does not mean that nonproliferation factors were entirely lacking in the shaping of the arrangements, or that nonproliferation did not benefit from their establishment. But it does underscore the factors which have been most important in prompting states to accept some limitation on national decision making and authority. Each of the four principal nuclear ventures normally regarded as multinational-URENCO and EURODIF (uranium enrichment consortia), and EUROCHEMIC and United Reprocessors Group (URG) (spent fuel reprocessing and plutonium separation consortia)-placed restrictions on the transfer of technology to parties outside the arrangement, but principally for commercial reasons. In the case of EURODIF no provision was made for sharing the most sensitive (barrier) technology even among consortia members-the technology being reserved exclusively to the host state. On the other hand, in no instance was membership in the venture conditioned on national renunciation of efforts to develop the technology covered by the agreement, or alternative technologies which could provide sensitive material. This is, of course, precisely the kind of consideration that arises when non- proliferation objectives are taken into account. It is clear from this example, however, that nonproliferation and economic considerations can coincide and be mutually reinforcing, and that state acceptance of restraints in order to achieve a technical or resource benefit can work to the advantage of non- proliferation.

Efforts to sustain multinational arrangements over time have been somewhat less successful in reprocessing than similar efforts in the field of uranium enrichment. In part this is because reprocessing technology is much more widely known, and uses more conventional industrial techniques than enrichment, which until recently was based exclusively on a very sophisticated, industrially-complex and highly classified gaseous diffusion technology. Even the newer and presumably simpler centrifuge enrichment technology is still in an emergent state, and subject to the kind of uncertainties which made joint ventures involving cost- and risk-sharing more appealing.

It might also be explained by the fact that reprocessing is essential to the use of breeder reactors. Such breeders have generally been regarded as the ultimate rationale for making a large-scale nuclear commitment in the first place. For countries committed to deployment of breeders, economy-of-scale arguments for multinational facilities would not be very persuasive, since national plants in this area would rival multinational facilities in size. As national facilities, moreover, they would not be burdened by the inevitable problems of joint management and operation.

For countries with smaller programs, the attractions of large multinational reprocessing facilities could be significant, if they brought state-of-the-art technology and economies of scale to bear in support of their own more modest requirements. However, even these countries might find smaller national plants preferable, for the same operational and management reasons as countries with larger programs, and might not even find economy-of-scale arguments so persuasive, in view of the relatively modest cost (several percent) attributable to reprocessing, as compared with the total cost of nuclear power generation.

Specific historic cases

EUROCHEMIC, the first multinational nuclear venture, was created in the 1950s under the auspices of the European Nuclear Energy Agency (ENEA) of the Organization for European Economic Cooperation (OEEC).7 Its termination in 1974, in the face of competition from larger national installations in member countries, has frequently been offered as proof of the weakness and improbability of effective multinational arrangements. This, of course, quite misses the point. EUROCHEMIC was established to serve as a training center in which reprocessing technologies could be acquired, various fuel types and techniques could be explored., and industrial experience could be developed. It was not designed as a means of averting the spread of reprocessing technology, or as an alternative to national development, even though some of its members (particularly the smaller states) might have hoped for the eventual emergence of a single European reprocessing consortium which would provide a partner- ship of a magnitude beyond their purely national capabilities. In terms of its mandate, EUROCHEMIC was a success. It facilitated and launched the basis for industrial capability in a new technological field. If it did not evolve into Europe's commercial industrial reprocessing enterprise, this must be measured against its mandate.

In view of its avowed technology transfer purpose, and the absence of any ban on parallel national technological development, EUROCHEMIC would not be a particularly good model for nonproliferation-oriented multinationalism. On the other hand, ten years of such multinational training and development activity in a high technology area represents an experience and institutional dynamic which can provide important lessons for future ventures- lessons with respect to the appropriate breadth or limitation of mission, organizational arrangements, allocation of ownership shares and interest, financial obligation, and degree of restraint imposed on participants regarding parallel activity. Indeed, its provision for an external control organ of participating state governments to deal with problems of common concern while avoiding interference in operational activities has been taken into account by subsequent multinational nuclear industrial ventures.

URG is a successor multinational reprocessing venture to EUROCHEMIC in only the broadest sense of that term. It was created in the early 1970s by the three principal partners in EUROCHEMIC-Great Britain, France, and the Federal Republic of Germany-basically in anticipation of an overcapacity of reprocessing services and a desire to avoid the risk of destructive competition among European industries.8 It was intended to rationalize the use of existing capacity, to coordinate planning, construction, and deployment of new plants, and to facilitate the exchange of technical information. One of its first acts, in retrospect of no mean significance, was to successfully encourage deferral of German plans to build a commercial reprocessing plant. Deferral ultimately pushed construction of that plant at Gorleben into a rather changed domestic and international context, with environmental and antinuclear forces at home contesting continued nuclear development in West Germany, and with American nonproliferation policy encouraging continued deferral of commercial reprocessing plant construction, until economically justified in the framework of a firmly established breeder reactor development program.

When reprocessing came to be seen as a problem of under-capacity in the mid-1970s, as a result of changes in U.S. nuclear planning, and a slowdown in both Great Britain and France for technical reasons, URG still played a market-planning role in the allocation of existing and planned capacity, although more emphasis was given to technical exchanges than to commercial coordination. URG neither owns nor operates reprocessing plants; while the transfer of URG country technology to non-URG countries requires the unanimous consent of the three shareholders, and apparently their governments as well (unless laboratory scale transfers are involved, which would be a significant transfer in nonproliferation terms, though not in a commercial or industrial sense), the organization is an international collaborative arrangement rather than a multinational venture.

The two uranium enrichment consortia, URENCO and EURODIF, are institutional expressions of the movement towards a European enrichment capability which first appeared in the early days of EURA TOM, but was largely deflected by U .S. policies that undercut the economic appeal of a European enrichment program.9 Today, despite strain, they represent two different economic and industrial models of multinational ownership and operation, neither of which was established for explicitly nonproliferation purposes, but both of which contribute to that end.

URENCO is the more complex of the two organizations, embracing enrichment facilities in three countries-Great Britain, West Germany and the Netherlands. Based on the Treaty of Almelo, URENCO owns and operates gas centrifuge enrichment facilities in the three participating states, helps to coordinate research and development (which, since 1974, is the responsibility of each of the shareholders individually, rather than a collective responsibility) assures equal access to developments in centrifuge technology by any of the members, and executes contracts for the sale of services to third countries, based on the unanimous agreement of the participants.10

Industrial-operational and political responsibilities are kept separate. An intergovernmental Joint Committee, on which each of the participating governments has equal representation and voting rights, and which operates on the principle of unanimity, deals with all political aspects of URENCO activities. This includes such issues as membership, supervision, and control of the dissemination of centrifuge technology, and safeguards and nonproliferation conditions associated with contracts for enrichment services. URENCO provides a good example of the potential nonproliferation value of multinational arrangements, as well as the viability and utility of separating political and other decision-making authority. In 1975, the Federal Republic of Germany contracted to sell URENCO enriched uranium to Brazil. Although the agreement provided for the application of international safeguards to the material, it did not place any restrictions on the extraction and storage of plutonium produced in burning the URENCO-supplied fuel. This was regarded as insufficient by the Dutch government, as a result of which West Ger- many ultimately had to negotiate a revised agreement with the government of Brazil, including a requirement that any plutonium derived from URENCO-supplied fuel would be placed under an acceptable international plutonium storage regime. Multinationalism, in this case, helped to reinforce a non- proliferation objective, and, because of the division of political and managerial authority, did so without disrupting the industrial and operational responsibilities of the organization.

EURODIF involves five participating countries-France, Italy, Spain, Belgium and Iran-but only one enrichment facility.11 Unlike URENCO, which has an external market orientation, EURODIF is intended to serve the domestic fuel requirements of its members. The level of investment of each member corresponds to its percentage share of the product, and sensitive barrier technology is provided and held by only one member, France. Other non-sensitive technology is shared, and non-sensitive equipment procurement is allocated among the members. Thus, while excluding the transfer or sharing of sensitive technology, EURODIF does provide participants with security of supply, an equity share in a production enterprise utilizing proven advanced technology, and industrial spin-off benefits in all but the directly sensitive technology sector. Because EURODIF is not a manufacturing entity as is URENCO, this places limitations on the scope of spin-off benefits; but it does offer an added inducement, beyond that of access on a preferred basis to a secure supply of enriched uranium. EURODIF partners also have access to the data and information necessary to reach informed judgments on decisions in which all the participants share.

EURODIF is simple and straightforward in comparison with URENCO, since management, operations, and technology remain under the national control of the host state, and its potential contribution as a model for nonproliferation is proportionately greater. On the other hand, precisely because of the managerial, operational, and technological limitations this approach imposes on all but the host nation, its appeal may be limited to states which have little interest 'in the opportunity to participate in management-related activities or to have access to advanced technology, but are content to have assured access to fuel supply on a timely, predictable, and economically attractive basis.

Neither of the two enrichment consortia have been trouble free. URENCO has faced difficulties both in terms of technology and investment. It was originally intended that URENCO would develop a single centrifuge technology that would be exploited on a centralized basis. All of the participants, however, already had made heavy investments in technology development at the time URENCO was established, and they proved unwilling to forego this investment in favor of a common technological approach. As a result, it was decided in 1974 to permit each of the shareholders to continue developing its own technology and to determine which technology it will use in building new facilities. Insofar as investment was concerned, URENCO plants were to be built with equal ownership and investment by the three partners, regardless of location. By the mid-1970s that formula was revised in favor of a two-thirds national, one-third partners investment arrangement, in response to differences among the shareholders regarding the timeliness of constructing new facilities and the appropriate marketing philosophy.12 At the present time, the formula has been revised to reflect a 90 percent national ownership in URENCO facilities. This change also has affected the management distribution, making each of the plants far less multinational than originally intended. All facilities, however, operate under the provisions and constraints of the Treaty of Almelo, and no shareholder has the ability to take any significant action without the approval of the other two partners.

EURODIF's problems have been of a somewhat different nature. Changes in the pace of national nuclear development has affected the timing of requirements for enriched uranium, particularly in Italy which took a 23 percent share in EURODIF production at the time the organization was created. Unable to absorb its share of EURODIF production, yet required to take and pay for it, Italy has sought to alter its relationship to the consortium.13 Some Italian political leaders have gone so far as to urge withdrawal entirely, but the dominant view has been to negotiate a reduction in Italy's share in EURODIF. This was accomplished in the summer of 1980 when the French partner, Cogema, agreed in principle to purchase more than one-half of Italy's interest, reducing the latter from 23 percent to 16 percent of EURODIF and, correspondingly, increasing Cogema's share of EURODIF from 42 percent to 51 percent, giving it majority control of the organization and further reducing its multinational character. This and the URENCO experience point up economic sensitivities of multinational arrangements which may serve as a lesson for other nations contemplating similar ventures. While not precluding continued interest in such arrangements, this experience could make economic justification and rationale even more salient than before in decisions to follow a multinational fuel cycle strategy.

As two U.S. initiatives which failed to materialize demonstrate, not all efforts to establish multinational nuclear consortia have been successful.14 In 1971, in the context of growing European sentiment favoring an increased in- dependence of supply and a development of a European-based enrichment enterprise (already reflected in the URENCO agreement and French initiatives to establish what became EURODIF), the United States offered to transfer enrichment technology under specified conditions. Those conditions included an acceptance of international safeguards and controls over plant and product, an opportunity for American industry to compete in supplying components and services, an avoidance of direct competition with U .S. enrichment production activities and, most importantly, an establishment of a multinational consortium to receive the transferred technology and to construct and operate a plant. Classified information, including information relevant to making an informed economic and technical judgment regarding the offer, was to be withheld until a commitment to construct a plant was made by the multinational consortium. This meant that the consortium would not know what it was getting until agreement was reached, an arrangement often referred to as "buying a pig in a poke." In addition, only diffusion technology would be shared with the multinational group, while centrifuge technology, in which European interest was growing, would be accessible only to American domestic firms, whom the U.S. government (in particular, the AEC) was seeking to interest in assuming responsibility for future enrichment activity, on the ground that enrichment had reached commercial status.

This offer was rejected by the industrial states to which it was directed. The technology transfer conditions were regarded as unacceptable, not because of the multinational requirement, but because of the insistence that commitment to the project precede access to information and technology. The latter requirement was perceived by the Europeans as signifying lack of serious U.S. intent, and as a ploy to head off movement toward increased in- dependence in nuclear fuel supply-in other words, as a political and commercial strategy to preserve U .S. nuclear influence and to avert the emergence of a strong and independent competitive enrichment industry. Suspicions about U.S. commercial motivations made later nonproliferation-motivated U.S. proposals suspect.

A second initiative was taken in 1974 at the Washington Energy Conference, against the background of the oil crisis and its emphasis on increased cooperation among the industrial states in developing alternative sources of energy supply. Nuclear energy was one of the centerpieces of efforts to diversify the energy resource base, and Secretary of State Kissinger stressed American readiness to explore the sharing of enrichment technologies, and the establishment of multinational arrangements to that end. Departing from its earlier offer, the United States now indicated interest in cooperative arrangements in centrifuge as well as diffusion technology - a proposition which (had it been made in 1971) would have found a responsive audience in Europe, where the lower capital and operating costs of centrifuges were appealing. The offer also avoided the offensive preconditions that characterized the 1971 approach.

Despite the greater openness and flexibility of this American initiative, there was little serious interest on the part of others. To some extent this might have reflected continued uncertainty about U.S. motives and objectives. More probably, it reflected the fact that URENCO had gotten underway between 1971 and 1974 and was in the process of shaking out some of the problems associated with multinationalization, while EURODIF was just beginning as a multinational entity; both were concerned to avoid any unnecessary complicating side-excursions which might have unsettling effects on such new ventures. These concerns, of course, relate back in part to uncertainty about ultimate American intentions. Additionally, the negotiating of a multinational arrangement, and the launching of a multinational enterprise, had moved from hypothesis to experience; this made many of the prospective partners for a joint activity extremely cautious about moving into further international institutional arrangements.

In any event, the 1974 initiative did not result in the launching of a new multinational enterprise; but it also did not lead to a termination of U .S. interest in exploring the possibilities for applying multinational formulas to sensitive fuel cycle activities.

Some interim conclusions

Before turning to the more recent and more explicitly nonproliferation-inspired interest in multinationalism, it would be useful to draw some conclusions from the historic experience just discussed. Four points in particular would seem to bear emphasis.

Most significant, perhaps, states have in a number of instances voluntarily entered into arrangements which place constraints on their capacity to act independently in response to purely national dictates and interests. In none of the cases, of course, did participation in a multinational venture preclude national pursuit of a research and development program in that technology;15 and in some cases (e.g., EUROCHEMIC), acquisition of technology and experience motivated participation in the first place. It is not to be excluded, however, that a satisfactory experience in a multinational venture, in securing reliable and adequate supplies of fuels or services without a sense of undue dependence on an external source of supply, could lead states to conclude that this way of meeting their nuclear requirements is preferable to more independent, but possibly more costly and technologically less sophisticated, alternatives.

Not all states would share this view - for some, technological parity, independence, or other considerations would preclude participation in such ventures, unless doing so did not impair concurrent or future ability to choose a national alternative strategy. But this does not void the general point that multinational institutional arrangements have been successfully implemented in sensitive high technology areas and could become an important component of a future international nuclear regime. Political acceptability cannot be a priori ruled out.

Certainly none of these ventures would have been initiated or would have survived if they did not meet important economic criteria, and this is our second point: multinational arrangements must demonstrate economic, financial, and commercial viability. Whether, as some would argue, they must in all respects surpass alternative national performance is a more debatable point, but they cannot impose substantial excess costs and expect to survive. Costly high technologies which can benefit from economies of scale are attractive possibilities for joint ventures, especially for countries whose programs are not sufficiently large to justify the level of technical, financial, and manpower investment that would be required to put a viable system into place. Where, as in the case of EUROCHEMIC, the economic rationale fails to be sustained, the venture terminates. But even in the face of some economic uncertainty, it is not a foregone conclusion that the arrangement will collapse if participants are persuaded either of the long-term logic of the enterprise (e.g., URENCO), or of the even more substantial costs of seeking purely national alternatives.

For example, a reprocessing enterprise whose economics are dubious, but which, nevertheless, resolves a waste problem which might not be easily re- solved on a national basis, may be preferred despite its economic uncertainty, especially if waste management arrangements are a precondition for licensing reactor operations in the participating countries. The key point is that a multinational venture must make basic economic sense to be considered, and to survive, in the absence of some compelling other reasons to establish and operate it in the first place.

A third point relates to structure and organization. Several of the nuclear ventures, and some other high-technology multinational consortia such as INTELSAT, have adopted two-tiered governing structures which serve to separate normal management decision making from questions which are essentially of a political nature.16 One formidable argument against multinational arrangements is that they are not only complex in operational, financial, and economic terms, but also sensitive to political differences which could have severe negative effects on their normal operations. The development of a multi-tiered structure to separate non-operational from operational activities, and political from commercial-managerial considerations, does not completely eliminate the risk, but it does reduce the threat of unnecessary complications, and the probability that separable decisions will interfere with each other.

This ties in with the earlier observation about organizational flexibility. Each of the multinational arrangements discussed had different attributes, affecting either the degree of technology sharing (full sharing in URENCO, URG, and EUROCHEMIC; no sharing in EURODIF); or the financing formulas and claims on the product (proportionate shares and claims in EURODIF, equal investment requirements in URENCO at least at the outset); or the scope of activity (production and marketing in the case of URENCO; fuel production only in the case of EURODIF; technology development and training in EUROCHEMIC). This suggests a continuing plausibility for multinational ventures, consistent with the participants' objectives in securing supplies of services and fuels, the general requirements of economic and commercial attractiveness, and the broader international concern about reinforcing international safeguards and nonproliferation.

Perhaps the greatest uncertainty arises in transferring the experiences of primarily technologically advanced industrial societies to a broader group of states with a much more heterogeneous set of objectives and priorities, and a rather different perspective on such concepts as equity, nondiscrimination, and fair play. If multinationalism means, as it would, fewer facilities (which may be important for economic reasons) then locational issues could become very important. A continued siting of most such facilities in advanced industrial states because of practical considerations could be rejected by developing countries as an untenable perpetuation of the technology gap. Difficulties would also arise because of asymmetries in what advanced and developing countries could bring to the common enterprise, and the consequent asymmetries in the allocation of responsibility and decision-making authority. A major question then remains on whether, and under what conditions, our past experience is transferable to future arrangements; to what degree will alternative institutional arrangements be acceptable on economic, technological, political, and nonproliferation grounds to the different potential participants. As noted earlier, generic solutions are not likely to be identifiable, and each arrangement will have to be tailored to the project, technology, and participants involved.

Multinationalism and non-proliferation

Interest in multinational fuel cycle arrangements took on a sense of urgency with the expansion of peaceful nuclear programs. Control of nuclear technology had largely been based on political commitments that were monitored and verified by international safeguards, designed to detect any illicit effort to divert material from the peaceful nuclear fuel cycle. The nuclear universe to which those safeguards applied consisted largely of power and some research reactors which, with a few exceptions, did not give access to directly weapons-usable material. Sensitive technologies and facilities capable of producing directly weapons-usable materials were confined to a relatively small number of states.

The Indian nuclear test of 1974, and the spread of sensitive nuclear facilities to countries whose programs were only in a rudimentary stage of development and lacking any serious rationale for advanced sensitive technologies, raised fundamental questions about the adequacy of international safeguards by themselves to prevent proliferation. As explained in the Nye chapter, a reactive policy based only on denial would ultimately fail, and would bring resentment and even greater international instability in its wake. Longer-range attention focused, therefore, on identifying the appropriate additive protective measures to deal with the inevitable spread of nuclear energy and technology. The ultimate goal was development of a regime embodying agreed rules, norms, institutions, and proliferation-resistant technologies to reduce the proliferation risk to manageable proportions. Institutional arrangements, particularly multinational schemes, figured prominently among alternative means of reinforcing nonproliferation, and security considerations thus came to occupy a place alongside political and commercial considerations in judging the feasibility of the multinational alternative to purely national fuel cycle facilities.17

Public support for, and promotion of, multinational concepts for explicitly nonproliferation considerations was first articulated by the United States when its representative to the 1974 General Conference of the International Atomic Energy Agency spoke in support of "the establishment of internationally approved facilities to handle all the spent fuel arising from power reactors"18 as an alternative to individual countries developing their own technology for this purpose. Subsequently, the United States strongly supported a provision in the final declaration of the 1975 NPT Review Conference that "regional or multinational nuclear fuel cycle centers may be an advantageous way to satisfy, safely and economically, the needs of many states, while, at the same time facilitating physical protection and the application of safeguards."19 Multinationalism was also strongly advocated by Secretary of State Kissinger in a speech before the UN General Assembly in September 1975, where he stated that "the greatest single danger of unrestrained nuclear proliferation resides in the spread under national control of reprocessing facilities. ...The United States, therefore, proposes, as a major step to reinforce all other measures, the establishment of multinational regional nuclear fuel cycle centers."20 One immediate result of this was American endorsement of an IAEA study of regional nuclear fuel cycle centers.21

Emphasis on multinational strategies was not confined to the executive branch. H. Con. Res. 371 (Zablocki) reinforced endorsement of multinational centers, as an alternative to national development of sensitive portions of the fuel cycle.22 Subsequently Senate Resolution 221 (Pastore-Mondale) expressed concern over the "proliferation threat posed by the possibility of development of a large number of independent enrichment and reprocessing facilities,"23 and argued in support of U.S. initiatives for the development of regional, multinational centers.

American policy during the past several years has, for a number of reasons, been ambivalent toward early development of multinational reprocessing arrangements. One consequence has been an international uncertainty about real U .S. objectives and intent in the peaceful nuclear fuel cycle. Three factors deserve emphasis in this regard.

First, assessments of the justification and timeliness of plutonium separation evolved considerably. The conventional nuclear wisdom which prevailed into the mid-1970s had been that the recycling of plutonium in mixed oxide fuels in light water reactors was technically logical and economically appropriate. This view changed amid rising uncertainties regarding the economics of recycle, and the absence of any compelling resource-scarcity reason to deploy plutonium in light water reactors. Also important was the sharply increased sensitivity to the weapons risk in widespread dissemination of reprocessing facilities and separated plutonium.

Second, it became increasingly clear in the late 1970s that disposal of spent fuel in unprocessed form was feasible as a waste management option, and that, contrary to conventional thinking, the waste disposal problem was not alleviated by reprocessing, but rather was of the same order with or without reprocessing. This revised view was essentially endorsed in the INFCE study.

Third, perhaps most important in view of the diminished economic or technical urgency of reprocessing and the U.S. preference to link plutonium separation to economically-justifiable breeder reactor development. the United States sought to avoid a situation in which the existence of added institutional arrangements would be used as a pretext for premature commitments to sensitive nuclear activity. In other words, multinational alternatives were to be encouraged when the activity in question was economically justified, but were not themselves to become an excuse for undertaking an activity for which no compelling reason existed.

This underlying philosophy is largely reflected in the provision in the 1978 Nuclear Nonproliferation Act that a necessary condition for reprocessing or other sensitive fuel cycle activities involving U.S. origin fuels is that: they take place under "effective international auspices," and in the provision which requires the President to seek agreement on policies which include a "prohibition against reprocessing," except in a facility under "effective international auspices and inspection."24 While not explicitly requiring a multinational arrangement, this language, especially in the context of recent nonproliferation policy, reflects continued U.S. interest in multinational arrangements as a component of a long-range nonproliferation strategy.

Two questions remain to be considered: why should states acquiesce in the political limitations that multinationalism entails, and. even if they do, how effective a role can multinational arrangements play in achieving nonproliferation goals.

The political acceptability of multinationalism

We noted earlier that institutional arrangements can reinforce a consensus, but cannot create one where it does not exist. In dealing with the problem of acceptability, we will make several assumptions regarding consensus, in particular:

(1) that there exists widespread support for finding ways to meet energy requirements while minimizing the risks of nuclear weapons proliferation;

(2) that sensitive materials and the facilities which produce them create special problems for which safeguards alone may not be adequate to achieve nonproliferation; and

(3) that additional measures reaching beyond traditional bilateral or multilateral arrangements may therefore be necessary, including mutual agreement to limit use of nuclear technology and materials.

The first two assumptions seem to have won widespread support in the recently concluded International Nuclear Fuel Cycle Evaluation.25 The third also enjoys broad, but more guarded and qualified, support in the international community. For example, the dangers of plutonium and reprocessing are recognized, along with the possibility of minimizing those dangers if reprocessing were limited to a few large-scale facilities. But support for taking steps in this direction remains in abeyance, in the absence of general agreement about who will have access to what, and when, and with what degree of certainty. In short, the relinquishing of national control can only be contemplated in the context of a regime which satisfies such political and economic requirements as participating states regard as essential. And, even in these circumstances, it is probable that participating states will hold relinquishment hostage to continued satisfaction with the multinational arrangement.

Some states will strongly resist a derogation of national sovereignty under virtually any conditions. The reasons for this might range from an un- shakeable conviction that maintaining a nuclear weapons option is essential to long-term national security (e.g. Israel or South Africa), to vaguer notions about the prestige value of full national control over advanced technologies (e.g. Brazil or Argentina), or about the principle of absolute equality of all states (e.g. India), to more concrete economic concerns about security of energy supply, amid uncertainty that this requirement can be met on a reliable basis through reliance on external sources of supply.

Some of these states are unlikely to be persuaded to reconsider their position in the absence of significant changes in the international political and security environment, or unless they make a very fundamental reassessment of their own political and security interests. By the same token, however, their position should not dictate the objectives to be sought, the shape and character of the regime to be developed, or the level of effort to be expended in pursuit of those goals.

States which do not a priori reject the idea of some limitation on national authority and conduct, and who see genuine security advantages in a system involving self-restraint (i.e., the vast majority of industrial states and a significant number of developing countries) will nevertheless condition giving support for multinational arrangements on an acceptable balance of benefits and costs. Nonproliferation may be a valued objective, and even a priority concern, but the price of securing it will be carefully weighed, in terms not only of the effectiveness of the measures proposed to achieve nonproliferation, but also of the costs which may be incurred in energy security, economics, equity, and discrimination. There are no inherent reasons why multinational ventures cannot satisfy chat concern.

In terms of energy security, participation in a multinational arrangement could remove concern about excessive external dependence. While not entirely free of risk, and theoretically subject to the integrity of the host state, equity and/or managerial participation could enhance the credibility of fuel supply, by contrast with reliance on independent external suppliers. The same argument chat works against a host state, abrogation of its nonproliferation commitments, discussed earlier, works in favor of enhanced consumer-partner security; a much higher political threshold must be crossed, before acting contrary to international commitments, than where the facility is under single- state control. If the economic terms and conditions are attractive, and the political undertakings convergent, the multinational alternative may well be regarded as an effective way to achieve higher levels of mutual dependence among participating members, thus securing energy supply and reinforcing market predictability.

These considerations are applicable equally to enrichment and reprocessing. The technology of enrichment is still the preserve of a relatively few states. Costs and the demands of technological sophistication, along with close supplier state control of the technology, serve as deterrents to its dissemination. Dependence will thus remain characteristic of the enrichment market- place for some time to come. The uncertainties which have beset supply during the past several years, as suppliers have sought tighter guarantees against weapons proliferation, could lead consumer states to seek equity shares in enrichment facilities, even if the technological know-how remained (at least for the near-term) the preserve of the host state. An equity stake in production, and a voice in policy management, would provide the basic rationale. The interest of the supplier would be largely nonproliferation, but he also would benefit in that new excess production capacity would not emerge to threaten market stability.

Reprocessing is accessible to a larger number of states, so that the same deterrents which apply for enrichment are not to be found here. On the other hand, far from resolving the waste management problem, reprocessing compounds it; it generates dangerous high-level wastes, posing significant intermediate storage problems, with permanent disposal technologies remaining to be demonstrated. New reactor licensing is dependent on defining waste disposal plans in an increasing number of states, and the lack of a solution has impeded nuclear development in several cases. The possibility of avoiding such problems could be a powerful incentive for a state to join in a multinational arrangement, even if participation entailed concurrent renunciation of national reprocessing activity.

Insofar as equity and discrimination are concerned, multinational arrangements can play an important ameliorative role. One widespread argument in favor of national reprocessing and enrichment activity is that such operations are now carried out in weapons states and in a few advanced industrial countries. Pleas regarding the weapons proliferation risk remain unconvincing, as long as these states continue to assert a right to develop these technologies under exclusive national control; attempts to foreclose further development elsewhere under these conditions will likely be seen as nothing more than blatant discrimination, contradicting the provisions of Article IV of the Nonproliferation Treaty, which ensured full and complete access to the peaceful benefits of nuclear energy.

However, multinational arrangements, with the most advanced nuclear states placing their own sensitive facilities under multinational auspices, could significantly weaken the argument about discrimination in the peaceful nuclear sector, and could go far toward achieving a degree of equity acceptable to most of those states which were ever willing to consider an alternative to purely national arrangements. Even if not all existing facilities in the advanced nuclear states were multinationalized, with multinational agreement only reached for all new facilities, a substantial inroad on the claim of discrimination would be made, and one important barrier to the acceptability of the multinational approach to nonproliferation would be overcome.

The efficacy of the multinational approach

Two arguments have been raised against the efficacy of multinational arrangements: limited effectiveness (inability to prevent eventual dispersion), and potential counter-productiveness (technology transfer and the legitimation of proliferation-prone activities). A third argument, inefficiency (administrative - operational complexity) is not proliferation-related, and is not treated here.

The argument of limited effectiveness is based on the presumption that not all potential developers of technology will join the arrangement, and that entry into a multinational venture does not foreclose future development of national facilities. In addition there is a problem in the siting of sensitive fuel cycle facilities. If they are placed in non-nuclear-weapon states they could constitute a proliferation risk; if efforts to limit that risk rest on confining facilities to so-called safe and stable environments, which essentially mean western industrial states, then the problem of discrimination arises once again vis-à-vis aspiring and sensitive Third World countries. Finally, some analysts would argue that research reactors and facilities (which produce, or require the use of weapons-usable materials in significant quantities) are more of a proliferation risk than production facilities (certainly more widespread), and that the focus on peaceful fuel cycle production facilities is thus misguided.

The argument about potential counter-productiveness contends that the greatest risk is that multinationalism will accelerate deployment of sensitive facilities which otherwise might have evolved more slowly, because project managers will be able to argue that the risks associated with such activities are now under effective nonproliferation constraints. If the main argument against dispersion of sensitive facilities was that international safeguards could not alone ensure against misuse, and multinational institutions are then advanced to meet this problem, pressures will then inevitably mount to relax technological constraints, on the ground that the proliferation risk has now been resolved.

A second counter-productiveness argument is that multinational owner- ship and operation would accelerate technology transfer. Demands for physical transfer of technology might dominate the politics of the institution, and the information and experience derived could later be used in a clandestine national plant, to circumvent the very risks that multinational institutions were designed to control. In view of this risk, multinationalism might be less desirable as a nonproliferation measure than would be reliance on a small number of large national plants sited in a limited number of stable (read "privileged few") locations.

These are formidable arguments and cannot be dismissed out of hand. Yet national control under international safeguards alone is untenable in non- proliferation terms, while monopolizing fuel cycle technologies in the name of nonproliferation would not be acceptable to non-nuclear weapon states, and would lead to a more profound crisis of confidence than exists even today.26 If the objective of nonproliferation is not to foreclose the legitimate development of sensitive nuclear technologies, but rather to reduce the risks of abuse or misappropriation, which increase in a situation of purely national control, then alternatives to national control become relevant; multinational ventures thus appear to be a potentially constructive way to bridge considerations of nonproliferation, energy security, and equity.

With respect to limited effectiveness, two points need to be made. First, the very existence of multinational facilities removes some of the conventional justifications for building national plants, such as lack of alternatives, waste management problems, resource requirements, technology development, and experience, and the unacceptability of total dependence on external sources of supply. Participation in multinational ventures could moreover be predicated on states' acceptance of commitments not to engage in parallel national activity, as long as those ventures provide reliable, economically competitive services on a timely basis.

Second, as we noted in discussing acceptability, if advanced states participated in such multinational arrangements (perhaps submitting all, or even some, of their facilities to such a regime) this could go very far toward neutralizing equity and discrimination arguments, and could significantly increase the political threshold for any state's move into a purely nationally owned and operated facility. It is significant that French President Giscard d'Estaing, in a February 1979 press conference, explicitly endorsed the notion of multinational reprocessing for the future, including consideration of placing future French facilities under multinational auspices.27 The basic point is that the more that can be done to remove economic or technical arguments for national facilities, the more service is done for nonproliferation. With the presence of multinational alternatives, the justifications for a national program become far less persuasive than if no alternatives existed; the degree of ambiguity surrounding a national decision to develop sensitive facilities diminishes, and the international community becomes correspondingly more alert to the possible nuclear intentions of the state in question. The importance of this point cannot be stressed too much.

On the issue of potential counter-productiveness, while critics rightly note that pressures may mount to accelerate and legitimate high-risk activities, they also overlook two significant factors. One is that the collectivity of states that would have to share losses as well as profits in multinational ventures would take an even harder look at development strategy and timing than would an individual state which would more likely be swayed by political or prestige factors; this in itself has the effect of restraint. More importantly, multinational arrangements, at least as articulated by the United States, have not been viewed as an isolated nonproliferation measure, but rather as one component of a more comprehensive regime. Such a regime has been defined as needing to cover institutional arrangements for technology dissemination, but also such questions as the legitimate uses of technology and material, the appropriate timing for their production and distribution, and the conditions for their use, storage, transfer, and ultimate disposition.28

With respect to technology-sharing problems, a distinction should be made between reprocessing and enrichment. The basic technology necessary to build a small reprocessing plant dedicated to deriving modest amounts of material for explosive purposes is already well known. Technology denial will in no way change that situation. Hands-on experience in a large commercial facility could speed up acquisition of the information and expertise to handle a comparable large-scale plant; but this risk might be better handled by securing political commitments to preclude replication of any facility unless it is a part of, and explicitly endorsed by, the multinational regime. There are strong commercial reasons why this type of agreement might be sought, quite aside from nonproliferation concerns. Agreements also might be negotiated to establish a phased access to certain aspects of technology, based on the evolution of the participating state's nuclear program, and the economic need for expanding plant capacity.

Enrichment presents a different problem, because far less scientific and technological information has been disseminated. As we have already seen, however, both EURODIF and URENCO appear to have successfully come to grips with this issue. The service-equity EURODIF arrangement, which has the stronger nonproliferation value, may not be regarded as satisfactory in the future, although satisfaction ultimately depends on the partners, their interests, and the overall characteristics of the arrangement. It is worth noting, however, that (from an energy-security point of view) technology access was a less important issue in the INFCE working-group discussions on assured supply than was the existence of a competitive and transparent market with several independent sources of supply, as free as possible from political intervention in the absence of violation of nonproliferation undertakings.29

If multinational arrangements are part of a broader protective regime, it would appear then that they can play an important nonproliferation role and contribute to the reinforcement of acceptable international nuclear cooperation. Whatever limitations they may have, it is reasonably certain that a phased sharing and dissemination of high-risk technologies under a comprehensive regime would be preferable to (and ultimately more supportive of nonproliferation than) alternatives which encouraged or facilitated national nuclear autonomy.

Some Conclusions

In the final analysis, the most compelling argument for or against multinational institutional arrangements for sensitive fuel cycle activities may emerge from the future shape and character of supplier state (particularly U.S.) nuclear policy. If some form of extranational control over these activities, above and beyond international safeguards and nonproliferation commitment becomes the price for stability of supplier state behavior, and for the renewed constructive international cooperation which is so essential to all States, then the multinational approach may come to be regarded as a politically acceptable alternative to national ownership arid control. It is not the only alternative that one could visualize, but it does hold middle ground, between those alternatives based so much on safeguards that they are more facades than genuine protective measures, and those which, because of their extensive reliance on formal international organizations, would place too heavy a demand on national sovereignty. The performance of such complex activities as enrichment and reprocessing at a multinational level among largely homogeneous states would be difficult enough.

The key question is what the supplier states (especially the United States which remains so central to any international nuclear regime) are prepared to offer in return. Most countries are concerned primarily with reaping the benefits of peaceful nuclear energy. Energy security, including access to nuclear power on a timely, predictable, and economically attractive basis is (as we discussed earlier) their principal objective. Such states seek supplies of fuel and necessary services, assured against arbitrary and capricious supplier state behavior. They also seek guarantees that any new nonproliferation conditions that might later be found to be necessary (in the context of changing technological or international political conditions) will not be unilaterally or arbitrarily imposed on dependent states, but will be dealt with on a basis of equality and mutual understanding. This has not really been characteristic of nuclear cooperation during the past several years, as key suppliers, recognizing defects in the regime, sometimes took very quick and dramatic action in an effort to redress the situation.

Finally, such states want a voice in the shaping of the regime, and in the determination of the rules of the game in which they have become involved. For the most part they recognize the risks of widely dispersed weapons-usable materials, and understand the need for restraint. But they do not accept the notion that some states are more equal than others in the peaceful nuclear sector, and they consequently reject the establishment of principles which codify discrimination. Forbearance in the development of national sensitive fuel cycle facilities, because the economics of it are unattractive, or the technology too complex, is one thing. Forbearance on the grounds that it is not healthy for too many states to engage in sensitive activities, or to stockpile sensitive material, is quite another.

Pragmatic and judicious use of multinational institutional arrangements may bridge these different interests, and may thus be effective in promoting the cause of nonproliferation, while meeting energy security concerns, and ameliorating the sense of discrimination which so widely pervades the nuclear arena. The concept appears basically sound; the challenge ties in fashioning institutional arrangements so as to meet the political, economic, operational, and management concerns that inevitably will enter into any consideration of multinational activity, and so as to insure that multinationalism does not become a pretext or a subterfuge for activities which could undermine the stability of the international nuclear regime.

It would be good to remember how much the nuclear question is really sui generis, because of the unique attributes of the problem of proliferation, so that some of the conventional wisdom from other fields of endeavor, scoffing at multinational formulae, may not (and indeed should not) apply here.

Multinational institutional arrangements, to repeat, are riot the whole of a grand design, or a comprehensive solution to proliferation problems, or even the most appropriate strategy for all situations. Proliferation is, after all, fundamentally a political problem; its solution, if one exists, must be found in the political arena. Everything else is only prologue.

Yet, for many states, multinational arrangements may provide an opportunity to share in a more sophisticated industria1 activity than would be the case on a purely national basis; for some others, such arrangements may simply have to be regarded as a nonproliferation cost, to be borne in order to maintain a viable international nuclear system. And that is a common stake.


1. For a general overview of the evolution of nonproliferation policy and the strategy of the Carter administration see Joseph S. Nye, "Nonproliferation: The Long- Term Strategy", Foreign Affairs (April 1978): 60 1-23; and Lawrence Scheinman, "Towards a New Nonproliferation Regime," Nuclear Materials Management VII, I (Spring 1978): 25-29. See also Bertrand Goldschmidt, "A Historical Survey of Nonproliferation Policies", International Security 11, I (Summer 1977): 69-87.

2. Edward Wonder, "INFCE and International Institutions" in Next Steps After INFCE: U.S. International Nuclear and Nonproliferation, Rodney W. Jones, ed. (Washington, D.C.: Georgetown University, March 1980).

3. International Atomic Energy Agency, "Communications Received from Certain Member States Regarding Guidelines for the Export of Nuclear Material, Equipment, and Technology," INFCIRC/254 (Vienna: IAEA. February 1978).

4. IAEA, "Assurances of Long-Term Supply of Technology, Fuel, Heavy Water and Services in the Interest of National Needs Consistent with Nonproliferation", INFCE/PC/2/3 (Vienna: IAEA, January 1980).

5. This approach is examined and endorsed in Myron B. Kratzer, Multinational Institutions and Nonproliferation: A New Look. Occasional Paper No.20 (Muscatine, IA.: The Stanley Foundation, 1979).

6. For a useful discussion of multinational nuclear arrangements see Horst Mendershausen, "The Muitinalionalization of Reprocessing and Enrichment: How and Where?" a Paper Presented to the International Conference on Reconciling Energy Needs and Nonproliferation. Bad-Godesburg (May 1979). See also Abram Chayes and W. B. Lewis, eds.. International Arrangements for Nuclear Fuel Reprocessing (Cambridge. Mass. : Ballinger Press, 1977).

7. EUROCHEMIC's experience is discussed in Bertrand Goldschmidt, Le Complexe Atomique (Paris: Fayard, 1980) and more extensively in International Energy Associates Ltd (IEAL), "Institutional Arrangements for the Reduction of Proliferation Risks", Report to the Department of Energy, December 1979.

8. On URG see C. Allday, "Some Experiences in Formation and Operation of Multinational Uranium-Enrichment and Fuel Reprocessing Organizations", in Chayes and Lewis. op. cit., pp. 177-88.

9. This early episode is treated in Lawrence Scheinman. Atomic Energy Po/icy in France Under the Fourth Republic (Princeton: Princeton University Press, 1965), pp. 177-80.

10. On URENCO, see Report of the Atlantic Council's Nuclear Fuels Policy Working Group, "Nuclear Power and Nuclear Weapons Proliferation", vol. 11 (June, 1978); IEAL, "Institutional Arrangements for the Reduction of Proliferation Risks," op. cit.; and C. Allday, op. cit.

11. There is relatively little information available on EURODIF. A useful if incomplete description is to be found in M. Pecquer, J. H. Coates and M. Mezin, "Uranium Enrichment: One of Today's Industrial Realities", Revue de l'Energie 25, 265 (Aug.-Sept. 1974): 199-214.

12. See Allday, op. cit.

13. Nuclear News, June 1980. p.38.

14. The following discussion draws principally on Edward Wonder. Nuclear Fuel and American Foreign Policy (Boulder. Co. : Westview Press. 1977) and Bertrand Goldschmidt, Le Complexe Atomique op. cit. See also Lawrence Scheinman, "Security and a Transnational System: The Case of Nuclear Energy" in Transnational Relations and World Politics, Robert 0. Keohane and Joseph S. Nye. Jr., eds. (Cambridge, Mass.: Harvard University Press. 1972), pp. 276-300.

15. While one could view the URENCO provision for rotation of enrichment contract allocations as an effort to delay as long as possible the construction of an enrichment plant in the FRG, and URENCO itself as a way to divert any autonomous enrichment activity in Germany, it still remain true that the FRG was completely free to develop enrichment technology.

16. On INTELSAT, see Eugene Skolnikoff, "Relevance of INTELSAT Experience for Organizational Structure of Multinational Nuclear Fuel Cycle Facilities", in Chayes and Lewis. op. cit. .pp. 223-30.

17. See references cited in footnote 1 on these points.

18. IAEA, GC(XVIII)/OR. 169(23), (Sept. 1974).

19. U.S. Arms Control and Disarmament Agency, Documents on Disarmament, 1975, pp. 146-58, esp. p. 151. 10 Ibid. p.476.

20. See IAEA, Regional Nuclear Fuel Cycle Centers (Vienna: IAEA, 1977), two volumes.

21. House Concurrent Resolution 371, Congressional Record, 30 July 1975, p. 25918.

22. House Concurrent Resolution 371, Congressional Record, 30 July 1975, p. 25918.

23. Senate Resolution 221, Congressional Record, 12 December 1975, p. 521961.

24. The Nuclear Nonproliferation Act of 1978 (P.L. 95-242), 92 Stat. 210 (1978).42 U.S.C. s 2153b (b)(I) and (2).

25. See, Statement of Ambassador-at-Large Gerard Smith, U.S. Representative to the INFCE, Final Plenary Conference, 25 February 1980.

26. On erosion or confidence, see Bertrand Goldschmidt and Myron B. Kratzer. Peaceful Nuclear Relations: A Study of the Creation and Erosion of Confidence, (New York and London: Rockefeller Foundation and Royal Institute of International Affairs, November 1978).

27. Press Conference by Valery Giscard d'Estaing, 15 February 1979, Press and Information Division 79/25, French Embassy.

28. See Nye and Scheinman articles, op. cit.; and Thomas Pickering, address before the Atomic Industrial Forum, Atlanta, Georgia, 12 March 1979 (mimeo).

29. See INFCE Working Group III, cited in footnote 3.

The Hon. Lawrence Scheinman is Distinguished Professor at the Monterey Institute of International Studies and a retired professor from Cornell University. He served as the Assistant Director of the U.S. Arms Control and Disarmament Agency in the Clinton Administration, responsible for NonProliferation and Regional Arms Control. This 1981 essay was written after Dr. Scheinman returned from service as Principal Deputy to the Deputy Under-Secretary of State for International Security in the Carter Administration. He also served as Senior Advisor the Director-General of the IAEA, Hans Blix.

This essay was previously published under the title "Multinational Alternatives and Nuclear Non-proliferation" in International Organization, vol. 35, no.1 (Winter,1981) pp.77-102

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