May 14, 1996

The Honorable Hazel O'Leary
Secretary
Department of Energy
Washington, D.C. 20585

Request for Prompt Action on Sensitive Nuclear Technology (SNT) Guidelines

Dear Secretary O'Leary:

We are writing in regard to the ongoing reassessment of the Department of Energy's guidelines for export of sensitive nuclear technology (SNT). This reassessment was prompted by a September 1994 Greenpeace report documenting export of information and hardware to Japan for a reprocessing plant that will separate "super-grade" plutonium (that is, plutonium even more pure than "weapons-grade") from breeder-reactor blanket material. At that time the Department of Energy (DOE) made a commitment to "thoroughly review the Greenpeace study and prepare a comprehensive response." We welcomed that commitment as a further indication of your efforts to promote openness, to rethink old assumptions, and to control dissemination of reprocessing capabilities.

Since that time, however, momentum seems to have stalled. It now appears possible that no decision on SNT will be made this year. Even more troubling, if the decision-making process continues on the course it apparently is taking, there will be little, if any, change in the 1986 SNT guidelines, which have served as the basis for export of reprocessing technology.

The Current SNT Guidelines Are Inconsistent With U.S. Law and Policy

In correspondence and meetings with your staff, we have emphasized that the 1986 guidelines are based on an erroneous interpretation of the Nuclear Non- Proliferation Act (NNPA). DOE's interpretation cannot be squared with the definition of SNT in section 4(a)(6) the NNPA. While the July 25, 1995 Advance Notice of Proposed Rulemaking (ANOPR) refused to acknowledge this fundamental inconsistency with the law, it noted that DOE had the authority to change its interpretation of the law:

In the absence of clear, definitive, direction from Congress, DOE applied its expertise to develop an interpretation of SNT which it believes to be both permissible and reasonable. At the same time, because the statute is silent on the issue, the Department has the discretion to adopt a different interpretation if it concludes that the nuclear nonproliferation objectives of the United States are better served by doing so. That is, the Department could conclude, as a matter of policy, that the definition of SNT needs to be applied differently in the future to address the changing circumstances presented by proliferation threats in the post-Cold War world (emphases supplied).

A number of countries -- most notably, those of the former Soviet Union -- are now entering the nuclear marketplace and may be tempted to do so with ineffective export controls. It is crucial that the United States maintain the tightest possible control on transfers and retransfers of sensitive nuclear exports. Only by doing so can the United States prevent sensitive U.S. technologies from making their way to countries with weak or unenforced controls from which the technology could fall into the hands of nations or subnational groups seeking nuclear weapons. In addition, by establishing a high standard of controls, the United States would set an important example for emerging and existing suppliers.

In the ten years since the SNT guidelines were adopted, Iraq and North Korea have acquired (or have come very close to acquiring) a nuclear-weapons capability. They were able to do so largely because of the laxity of Western controls on nuclear technology -- controls that generally are far more rigorous than those that exist in the new potential suppliers. Plainly, the history of the North Korean and Iraqi programs and the prospect of a new group of suppliers with weak controls that could receive sensitive U.S. technology by means of one or more intermediate suppliers constitute the "changing circumstances" cited in the ANOPR as the basis for tighter U.S. controls.

Recent Developments Strengthen the Case for Tightening Controls

Developments in recent months have made even clearer the need for revision of the 1986 guidelines. In response to congressional questions on the U.S.- EURATOM agreement, the administration stated that no transfer of SNT has occurred since the statutory definition of SNT was enacted as part of the NNPA in 1978. This statement reinforces the point made in the ANOPR that "[i]t has been the Department's experience that, as a practical matter, once information has been determined to be SNT, it has not been exported because foreign recipients were unwilling to agree to U.S. consent rights over nuclear activities within the recipient nation's borders."

Taken at face value, these statements seem to indicate that the United States had imposed appropriately tight controls on its sensitive exports. Unfortunately, as demonstrated by the export of the reprocessing technology to Japan, the United States has sent sensitive technology abroad and has avoided the stringent control requirements by failing to designate this technology as SNT. A 1994 memorandum from the General Counsel explained what kinds of controls are omitted:

Our trading partners with sophisticated nuclear programs, such as Japan, are willing to accept most, but not all of the stringent conditions imposed on SNT transfers by Section 127 of the NNPA. In particular they will agree to U.S. consent for the retransfer of technology as a condition of the initial transfer. However, they will not accept the Section 127 export criteria that require U.S. controls over SNT to extend to any additional facilities constructed "by or through" the use of the SNT and to the special nuclear material produced through their use even when that use is within the jurisdiction of the recipient nation.

Thus, even if the technology itself cannot be retransferred without the consent of the parties -- as is apparently the case with regard to the RETF transfer -- the recipient country can build a reprocessing plant based on that technology and then proceed to export this plant, free from statutory U.S. retransfer controls to a third country -- including a country which did not meet basic U.S. non-proliferation standards, By failing to include such controls, DOE has circumvented the clear intent of the NNPA.

The defects in the current guidelines -- and their implications for dissemination of reprocessing capability -- have been brought into sharp focus by the Department's proposal to begin operation of a new type of reprocessing facility at Argonne-West in Idaho. During the public hearings on the draft Environmental Assessment for this facility, a DOE representative said,

The contract [to share information on pyroprocessing], which involved [Japan's] participation, had gone through a sensitive nuclear technology review by the Department of Energy, and it was found not to be a sensitive subject or at least as far as it related to the involvement of the Japanese because they already have reprocessing technology.

This response suggests that the pyroprocessing technology can be transferred to Japan. In fact, it was transferred, under the Advanced Liquid Metal Reactor program (the program in which pyroprocessing was developed). That program, and the associated assistance to Japan, have been terminated, and DOE officials have told us that the Department's present policy precludes any assistance to reprocessing and breeder programs overseas. But to our knowledge there has been no public, written articulation of that policy. For over a year we have urged the Department to provide such a clarification of its policy, either in conjunction with the ANOPR or separately.

Conclusion

We urge you to give the 1986 guidelines the scrutiny they deserve and not to succumb to the temptation simply to leave existing practice in place. If the United States is to be credible and effective in preventing the spread of nuclear weapons, it must take a clear and forceful position against the dissemination of the technology used to make atom-bomb material.

We are dismayed at DOE's inaction on this critical matter. Although it is now 20 months since the Greenpeace report, and more than ten months since the close of the comment period on the ANOPR, there is no discernible sign that DOE is moving toward resolution of this issue. In the most recent edition of the Semiannual Regulatory Agenda, which lists upcoming regulatory actions, there is no mention whatsoever of modification and codification of the proposed SNT guidelines.

It is imperative that the Department refocus its attention on this issue. We urge you to move to the next step in the process by publishing a Notice of Proposed Rulemaking stating that DOE will establish an objective, technology- based test of what constitutes SNT, without regard for the nuclear sophistication of the proposed recipient. Only in this way can DOE bring the guidelines into compliance with the law and with current policy. DOE should publish the proposed rule no later than July 1.

We look forward to your response on this important matter, particularly with regard to the timetable for publication of the proposed rule.

Thank you once again for your commitment to nuclear non-proliferation.

Sincerely,

Paul Leventhal
Nuclear Control Institute

Tom Clements
Greenpeace International

Daniel Hirsch
Committee to Bridge the Gap

Christopher Paine
Natural Resources Defense Council

cc: Terry Lash
Robert Nordhaus
Daniel Reicher
Joan Rohlfing

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