EXPLANATORY STATEMENT
Select Legislative Instrument 2006 No. 284
Issued by the Authority of the Minister for Foreign Affairs
Nuclear Non-Proliferation (Safeguards) Act 1987
Nuclear Non-Proliferation (Safeguards) Amendment Regulations 2006 (No. 1)
The Nuclear Non-Proliferation (Safeguards) Act 1987 (the Act) gives effect to certain of Australia's obligations under international agreements relating to the peaceful use of nuclear material and facilities, including the Safeguards Agreement between Australia and the International Atomic Energy Agency (IAEA) pursuant to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), and various bilateral safeguards agreements.
Section 74 of the Act provides, in part, that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Section 3 of the Nuclear Safeguards (Producers of Uranium Ore Concentrates) Charge Act 1993 imposes a charge on producers of uranium ore concentrates (the charge) under certain circumstances. Section 69A of the Act specifies that the charge is due on 1 December each year and that the amount of the charge payable by a producer is $500,000 or an amount prescribed by the regulations, whichever is the lesser. The amount of the charge, expressed in cents per kilogram of uranium in the uranium ore concentrate produced, is set each year in the Nuclear Non-Proliferation (Safeguards) Regulations 1987 (the Principal Regulations).
The Regulations prescribe the amount of charge payable by a producer of uranium ore concentrates as the lesser of $500,000 (the maximum charge, set in the Act) or 5.6012 cents per kilogram of uranium in the uranium ore concentrates produced in the previous financial year.
There is a level of cost-recovery involved in setting the rate for calculating the charge. The rate is arrived at according to a formula comparing relevant operating costs of the Australian Safeguards and Non-Proliferation Office (ASNO) with the quantity of uranium exports and uranium produced in Australia. The costs of safeguarding material produced in 2005-06 were similar to those for 2004-05, even though there was a lower level of production. Taking into account a lower level of production for 2005-06 and the similar costs, the rate per kilogram was increased from the 2004-05 rate. Therefore, the rate for calculating the charge due on 1 December 2006 was increased from 5.1131 cents per kilogram of uranium in the uranium ore concentrates produced in the previous financial year to 5.6012 cents per kilogram.
Details of the Regulations are attached.
The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
ATTACHMENT
DETAILS OF AMENDMENTS TO THE NUCLEAR NON-PROLIFERATION (SAFEGUARDS) REGULATIONS 1987
Regulation 1 provides that these amendment regulations should be known as the Nuclear Non-Proliferation (Safeguards) Amendment Regulations 2006 (No. 1).
Regulation 2 provides that the Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
Regulation 3 provides that Schedule 1 amends the Nuclear Non-Proliferation (Safeguards) Regulations 1987 (“the Principal Regulations”).
Schedule 1
Item [1] provides that within Paragraph 6(a) of the Principal Regulations “5.1131” be omitted and “5.6012” be inserted.
Overview
The Nuclear Non-Proliferation (Safeguards) Amendment Regulations 2006 (No. 1) were enacted to amend the Nuclear Non-Proliferation (Safeguards) Regulations 1987. These regulations were introduced to address the need for updating the charge rate for producers of uranium ore concentrates in alignment with the operational costs of the Australian Safeguards and Non-Proliferation Office (ASNO). The 2006 amendments were made under the authority of the Minister for Foreign Affairs and were issued in accordance with section 74 of the Nuclear Non-Proliferation (Safeguards) Act 1987. The policy objective behind these amendments was to ensure that the charge imposed on uranium ore concentrate producers reflects the actual costs incurred by ASNO in safeguarding nuclear material, thereby maintaining an effective balance between regulatory compliance and cost recovery. The increased charge rate was determined based on the operational costs of ASNO for the financial year 2005-06, adjusted for the volume of uranium production and exports.
Scope and Application
The Nuclear Non-Proliferation (Safeguards) Act 1987 applies to entities involved in the production of uranium ore concentrates in Australia, ensuring compliance with Australia's international obligations under agreements such as the Treaty on the Non-Proliferation of Nuclear Weapons. This Act encompasses the regulatory framework for safeguarding nuclear material and facilities used for peaceful purposes. The Act's application extends nationally and is enforced by the Australian Safeguards and Non-Proliferation Office. The Nuclear Non-Proliferation (Safeguards) Amendment Regulations 2006 (No. 1) further define the specifics of the charge applicable to producers of uranium ore concentrates, setting the charge rate at 5.6012 cents per kilogram of uranium produced, subject to a maximum of $500,000 per producer per year. The rate is calculated based on the costs associated with safeguarding nuclear material and the volume of uranium produced and exported. These regulations, made under section 74 of the Act, came into effect on the day after their registration on the Federal Register of Legislative Instruments, thereby ensuring a clear and updated framework for the collection of charges related to nuclear safeguards.
Key Provisions
The Nuclear Non-Proliferation (Safeguards) Amendment Regulations 2006 (No. 1) amend the Nuclear Non-Proliferation (Safeguards) Regulations 1987. Specifically, Regulation 3 in Schedule 1 changes the rate used to calculate the charge payable by producers of uranium ore concentrates from 5.1131 cents per kilogram to 5.6012 cents per kilogram (Regulation 3, Schedule 1, Item [1]). This change reflects the cost-recovery approach in setting the charge rate, comparing the operating costs of the Australian Safeguards and Non-Proliferation Office (ASNO) with the quantity of uranium produced and exported in Australia. This new rate will apply to charges due on 1 December 2006.
The amended regulations impose specific obligations on producers of uranium ore concentrates. These producers must ensure they pay the correct charge by 1 December each year. The charge is the lesser of $500,000 or 5.6012 cents per kilogram of uranium in the uranium ore concentrates produced in the previous financial year (Regulation 3, Schedule 1, Item [1]). This requirement is to be met by calculating the charge based on the amount of uranium ore concentrates produced, ensuring that the producer's payment aligns with the stipulated charge rate or the maximum charge.
Failure to comply with the payment obligations outlined in the regulations can lead to various consequences. While the specific offences and penalties are not detailed in the Explanatory Statement, under the Nuclear Non-Proliferation (Safeguards) Act 1987, breaches of the Act or regulations could lead to civil or criminal penalties. These may include fines or imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined by the relevant courts based on the specific circumstances of the case. However, the regulations clearly outline the financial obligations that producers must meet to remain compliant with Australian law and international obligations regarding nuclear non-proliferation.