Bilateral Nuclear Cooperation Agreements with Russia and Kazakhstan Nuke Info Tokyo No. 129

Negotiations for bilateral nuclear cooperation agreements between Japan and Russia and Japan and Kazakhstan have been continuing for nearly two years. The first round of negotiations with Russia was held on April 26, 2007, while the first round of negotiations with Kazakhstan was held on June 13, 2007.

Japan-Russia Agreement
There have been several reports that the Japan-Russia agreement will be signed soon. It was originally expected that Russian Prime Minister Vladimir Putin would come to Japan by the end of 2008 and that the agreement would be signed during his visit. Mr Putin has not yet visited Japan, but it is reported that when Japanese Prime Minister Taro Aso and Russian President Dmitri Medvedev met in Sakhalin in February to inaugurate a liquefied natural gas plant (part of the Sakhalin 2 project), they agreed that Mr Putin would visit Japan in May. On February 12, Kyodo News reported that both sides have already reached a full agreement in working-level talks on the text of the agreement.

There is already a nuclear cooperation agreement between Japan and Russia, which dates back to Soviet days. However, cooperation under this agreement only covers radiation and radioactive isotope related research and issues related to safety, radioactive waste disposal and the like. Several reasons have been given for signing a new agreement with Russia.

The agreement could enable involvement by Japanese companies in the construction of nuclear power plants to Russia. It could also enable cooperation on nuclear fuel cycle activities. On March 20, 2008 Atomenergoprom and Toshiba announced that they had concluded a general framework agreement that could lead to joint design and engineering of nuclear power plants, manufacture and maintenance of large nuclear plant components, and cooperation in front-end nuclear fuel cycle business (Nucleonics Week March 27, 2008). Shunsuke Kondo, Chairman of the Atomic Energy Commission of Japan, is reported to have said that Japan could use advanced Russian fast-breeder technology and that the government also wants to get involved in Russian uranium enrichment services (AP, May 15, 2007).

Japanese electric power companies have imported enriched uranium from Russia in the past, but the government takes the view that a bilateral agreement is not required in such cases, because they do not involve transfer of Japanese nuclear material or technology. However, an agreement would be necessary for a different type of enrichment service that is envisaged. Japanese utilities are interested in Russian re-enrichment of uranium recovered from spent nuclear fuel reprocessed in Europe. Bloomberg reported on February 27, 2007 that Tokyo Electric Power Company (TEPCO) and Japan Atomic Power Company (JAPCO) had expressed an interest in seeking Russian help in enriching recovered uranium stored in Europe.

Since government policy requires a bilateral nuclear cooperation agreement before Japanese owned nuclear material can be exported, re-enrichment cannot take place in Russia without such an agreement. However, besides the requirement for a nuclear cooperation agreement between Japan and Russia, re-enrichment would also be subject to bilateral agreements between Japan and other countries. Since most of the uranium used in Japanese reactors was enriched in the US, the US attitude is relevant to the Japan-Russia deal. Late last year, in response to Russian military action in Georgia, the Bush administration withdrew from congressional consideration a proposed US-Russia agreement for civilian nuclear cooperation. It remains to be seen whether the Obama administration will proceed with that agreement, or whether the status of the US-Russia agreement will affect the US attitude to the Japan-Russia agreement.

There are several grounds for concern about nuclear cooperation between Japan and Russia. In the first place, Russia is a nuclear weapons state and the civilian and military arms of its nuclear program are not clearly separated. Assurances that Japanese nuclear material and technology will not find their way into Russia’s nuclear weapons program will be virtually impossible to verify. A January 18, 2009 Kyodo article makes the following comment

“In past negotiations, Japan and Russia have clashed over involvement by the International Atomic Energy Agency. Japan is demanding the agency conduct a “strict examination” of Russia’s nuclear facilities to confirm the plant will be used for peaceful purposes. Russia showed reluctance by insisting the country is already a nuclear power.”

The fact that the Japanese government is pushing for rigorous implementation of IAEA safeguards does not inspire much confidence. The IAEA’s budget is over-stretched and inspections in nuclear weapons states are a low priority. No Russian facilities are listed on the IAEA’s latest list of safeguarded facilities (31 December 2007). Australian NGOs, which have campaigned successfully to block Australian uranium sales to Russia, point out that there have been no IAEA safeguards inspections in Russia since 2001.

Furthermore, Japan cannot be confident that Japanese nuclear material will not be diverted to Iran, or to other countries suspected of developing nuclear weapons. Russia traditionally uses its own resources to meet its own demand. Uranium sourced from other countries is more likely to be exported. The inadequacy of IAEA safeguards in nuclear weapons states and Russia’s supply of fuel for Iran’s Bushehr nuclear power plant are grounds for serious concern.

Another concern is environmental. The uranium stockpiled in Europe presents a problem for Japanese power companies. They are obliged to take it back. This creates a storage and disposal problem for them. However, if it is re-enriched in Russia, the leftover depleted uranium will remain in Russia. The disposal problem will then be Russia’s. Russia is in the process of setting up the International Uranium Enrichment Center (IUEC) at the Angarsk Electrolytic Chemical Combine in East Siberia, 5,100 km from Moscow. Japan’s uranium would be processed at Angarsk when it is up and running. However, Russian environmental group, Ecodefense, has expressed concern that the uranium enrichment plant in Angarsk represents a threat to nearby Lake Baikal, a UNESCO World Heritage site.

Japan wants to diversify its supplier base, but it is questionable whether relying on Russian enriched uranium is an effective way to ensure the energy security that Japan craves. In February 22, 2007 the Yomiuri Shimbun noted that in 2006 “Russia temporarily halted the natural gas supply to Ukraine, and has acted to deprive Mitsui and Mitsubishi Corp. of their rights in the Sakhalin-2 project, as well as using its position as a resource-rich country to pressure its customers. There is fear Russia may halt its supply of natural or enrichment of uranium depending on its relationship with Japan.” A repeat of the Russia-Ukraine gas dispute in January this year, which led to a severe reduction of gas supplies to Europe, was eloquent testimony to Russia’s willingness to use energy supplies as a diplomatic lever.

Japan-Kazakhstan Agreement
The current status of the nuclear cooperation agreement between Japan and Kazakhstan is unclear, but a 28 August 2006 Memorandum of Understanding (MoU) gives some clues about the types of cooperation envisaged. In addition to the development of uranium mines, the MoU refers to establishing the legal basis for provision of uranium products processed to a higher level, including the fabrication of nuclear fuel for the Japanese market. It also refers to information exchange and human resources cooperation towards the introduction of light water reactors to Kazakhstan.

Toshiba Corp. is said to have agreed with Kazatomprom to help build nuclear power plants (Japan Times, May 1, 2007). A bilateral agreement would certainly be necessary for this. The supply of nuclear fuel would not in itself require a bilateral agreement, but if the fuel were made from Japanese-owned uranium sent from Europe and re-enriched in Russia, then a bilateral agreement would be necessary. The fact that Kazakhstan is a partner in the IUEC project at Angarsk makes this highly likely. Sergey Yashin, Vice President of Kazatomprom (KAP) is reported to have said that under a memorandum of understanding with Kansai Electric Power Company (KEPCO), Nuclear Fuel Industries (NFI), and Sumitomo Corp., KAP plans to supply powder and pellets made with KEPCO’s reprocessed uranium (NuclearFuel, July 28, 2008).

Final Remarks
Securing access to resources is a major priority for Japanese government and industry. Russia and Kazakhstan claim one-fourth of the world’s total uranium reserves and several Japanese companies already have interests in uranium mining and exploration in these countries. Now the Japanese nuclear industry is looking to expand its involvement in Russia and Kazakhstan beyond uranium resources. In part this is driven by a lack of demand in the Japanese market and in part it is preparation for anticipated international nuclear industry developments. Toshiba, which now owns Westinghouse, wants to secure its supply chain, including fuel for the reactors it hopes to construct. Kazakhstan’s nuclear power company Kazatomprom, which has a minority stake in Westinghouse, will no doubt be happy to play a junior role. Cooperation with Russia is likely to be more challenging.

Philip White (NIT Editor)

Stop Press: On March 19, Atomenergoprom (AEP) announced that it had agreed with Toshiba Corp to “carry out joint activities on the market of nuclear fuel cycle products and services in Japan and other countries in Asia”. They are “working on the issue of establishing guarantee stockpiles of low-enriched uranium at the sites of nuclear fuel fabrication” and have agreed to “launch detailed studies of potential joint construction on the territory of Japan or other country of uranium enrichment plant based on the Russian technology”. They also agreed to “commence the joint study on improvement of Russian Nuclear Power Plant design process and construction technology” and “continue the study for establishing the partnership on manufacturing for power generation systems”.

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