Back-End of the Nuclear Fuel Cycle: Governance and Liability

Lenka Kollar

Executive Summary

As countries continue to delay the management and disposal of used nuclear fuel, there is growing interest in a multilateral approach to the back-end of the nuclear fuel cycle. States are interested in multilateral storage facilities to consolidate used fuel until a permanent repository has been constructed or a fuel recycling technology that presents less of a proliferation risk is developed. If executed correctly, this multilateral interim storage proposal will have many benefits for the international community. In this chapter, issues pertaining to stakeholders, governance, and liability for the multilateral approach are discussed. We offer the following recommendations to make this proposal a success:

• The host state needs to volunteer to host the facility and the community in which the facility is sited must be chosen by a consent-based approach. Clear economic, technical, and political incentives should be presented to attract a host.
• Customer states will also need to agree to participate in the multilateral facility, which must attract business on the strength of the political and technical benefits it offers.
• A host state should meet the same International Atomic Energy Agency (IAEA) standards of safety and security as are required of states that want to become nuclear powers and thus needs to have developed the human and technical capital necessary for compliance.
• The facility should include a research and development (R&D) program to explore storage integrity and new technologies for fuel recycling that lower proliferation risk.
• All participating states should be in good standing with the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and other nuclear-related conventions, and have a safeguard agreement with the IAEA. Participating states should also implement the IAEA’s Additional Protocol and work with the IAEA from the beginning of the facility design in order to establish robust safeguards.
• The facilitating entity to manage the multilateral used-fuel storage facility will need to be able to make decisions quickly and effectively while also remaining transparent, credible, and accountable to customers and the international community.
• The facility should be regulated by an independent organization and also allow for oversight by the IAEA and international community.
• Customers should remain the owners of the used fuel, which will be returned to them upon completion of the period outlined in the storage agreement. As part of the agreement, customers are required to have a used-fuel management and disposition policy in place. This plan should include the laws, regulations, and procedures to site and construct a permanent disposal repository, as well as a timeline that customers must adhere to, lest they be fined. By strictly requiring this of participating states, the multilateral facility forces states to plan for disposing of their used fuel far in advance.

Background

The storage and permanent disposal of used nuclear fuel has been an issue for nuclear states and their advocates since nuclear power was first harnessed to generate electricity for public consumption in the mid-1950s. Although the technical means to build repositories exist, siting a permanent location in which to dispose of nuclear material for thousands of years is difficult and often inspires significant pushback from politicians and the public. After efforts to establish a permanent civilian nuclear waste repository in the United States failed, President Obama organized the Blue Ribbon Commission on America’s Nuclear Future (BRC) to reevaluate the repository siting process and also make recommendations for the future of nuclear energy in the United States.¹ Similar situations in which governments have invested substantial resources to research and choose a disposal site only to later be rejected by the public (or other parties) have occurred in such nuclear power states as Germany and the United Kingdom. Other states, such as France and Japan, are reprocessing fuel and storing vitrified high-level waste in interim storage facilities to delay the need for permanent waste repositories. Finland and Sweden have successfully sited geologic repositories, but the facilities are still under construction and are not currently open.

In the case of countries that are now in the process of embarking on a civilian nuclear energy program, the question of what to do with the nuclear waste that will be produced remains open to discussion. In response, the American Academy’s Global Nuclear Future (GNF) Initiative has focused on advancing effective policies and procedures that help minimize the international security and nonproliferation concerns associated with the spread of nuclear energy, including an emphasis on the back-end of the nuclear fuel cycle. This chapter explores the governance and liability issues associated with the innovative used-fuel storage concept proposed by the GNF Initiative.² This multilateral interim used-fuel storage concept is designed as a consensus-based approach to the back-end that would limit proliferation risks by consolidating nuclear waste generated by power plants in an internationally supervised interim storage facility. The facility will attract participants from both the facility’s immediate region and around the world and will allow for international oversight by the International Atomic Energy Agency (IAEA). Using existing dry-cask storage technology, such a facility would store up to ten thousand metric tons of used nuclear fuel (on a relatively small footprint) for time scales on the order of one hundred years.

Due to the growth of nuclear energy and the mix of legacy and newcomer civilian nuclear power states in the region, South Asia, East Asia, and Southeast Asia are the primary targets of this back-end storage arrangement. Although other regions are also experiencing growth in nuclear energy, the Asian nations appear to have the most aggressive plans, and some, such as Vietnam, are currently seeking contracts and putting the regulatory infrastructure in place.³ The storage concept is designed to prevent the debilitating arguments about “spent” fuel reprocessing that now stand in the way of moving toward internationally supervised nuclear waste consolidation; and it allows for the possibility that if recycling technology advances to provide a more proliferation-resistant and economically advantageous fuel cycle, the stored used fuel could become a valuable commodity.⁴ In addition, the agreements made with the storage facility can even accelerate the siting and construction of repositories by requiring customers to have the policies in place and to adhere to a timeline to dispose of the used fuel. While repositories are constructed, the international community can be assured that used fuel is stored in a safe and secure manner at an internationally supervised storage facility.

Governance of the Multilateral Interim Storage Facility

As already alluded to, the multilateral used-fuel interim storage concept presents many challenges, including: 1) preserving the inalienable right of a state to pursue nuclear energy technology as a customer or provider of services; 2) making the proposal economically attractive to potential customers; 3) attracting a state to host an interim storage facility; and 4) fusing together interests that run the gamut from immediate fuel recycling with current technology to a permanent ban on any current or future advanced partitioning and potential recycling technology.⁵

The multilateral back-end approach must provide ample flexibility to attract customers, appeal to a host state, and benefit stakeholders. The primary benefit for customers is to minimize the immediate need for local interim used-fuel storage and to avoid the need to make immediate decisions about reprocessing.⁶ Newcomers to the nuclear energy sector will primarily benefit from a multilateral used-fuel storage option. Most legacy states have yet to develop a concrete solution to the back-end of the nuclear fuel cycle and would benefit from a longer-term interim storage facility while they build a permanent repository or develop more economically plausible and more proliferation-resistant recycling technology. The host state of the facility would experience economic benefits in the form of monetary incentives and infrastructure development.⁷ The international community benefits from multilateral used-fuel storage facilities by providing incentives for states to forgo their right to reprocess and ensuring that the used fuel is stored in an internationally supervised and secure manner. The latter has been a particular concern of the international community of late, due to the risks associated with the build-up of onsite pool used-fuel storage, as evidenced by the 2011 disaster at the Fukushima Daiichi plant in Japan.

The IAEA and members of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) are especially interested in used-fuel management methods that increase safety and security. There are many opinions within the international community on the effectiveness and strategy of multilateral nuclear facilities. In 2005, the Multinational Approaches (MNA) Expert Group set up by the IAEA outlined a set of approaches that seeks to increase nonproliferation confidence while preserving assurances of supply and services in nuclear energy. It reads:

1. Reinforcing existing commercial market mechanisms on a case-by-case basis through long-term contracts and transparent suppliers’ arrangements with government backing. Examples would be: fuel leasing and fuel take-back offers, commercial offers to store and dispose of spent fuel, as well as commercial fuel banks.
2. Developing and implementing international supply guarantees with IAEA participation. Different models should be investigated, notably with the IAEA as guarantor of service supplies, e.g., as administrator of a fuel bank.
3. Promoting voluntary conversion of existing facilities to MNAs, and pursuing them as confidence-building measures, with the participation of NPT non-nuclear-weapon States and nuclear-weapon States, and non-NPT States.
4. Creating, through voluntary agreements and contracts, multinational and, in particular, regional MNAs for new facilities based on joint ownership, drawing rights or co-management for front-end and back-end nuclear facilities, such as uranium enrichment; fuel reprocessing; disposal and storage of spent fuel (and combinations thereof). Integrated nuclear power parks would also serve this objective.
5. The scenario of a further expansion of nuclear energy around the world might call for the development of a nuclear fuel cycle with stronger multilateral arrangements—by region or by continent—and for broader cooperation, involving the IAEA and the international community.⁸

The very nature of the multilateral interim used-fuel storage approach introduces governance and liability issues. To ensure the success of this venture, the interests of all stakeholders—including the host state, legacy holders, newcomer states, and the international community—must be leveraged to provide benefits to all parties. The following sections discuss the involved stakeholders, structure of the corporate entity, stages of governance during the storage facility operation, liability issues, and nonproliferation and security issues. This discussion is followed by recommendations on the governance and liability of the back-end fuel cycle storage facility.

Stakeholders

Host State

The used-fuel storage facility will be located in the host state. This state will have jurisdiction of the facility and responsibility for its regulation, either by an existing or newly formed independent government entity. The host state is also the primary stakeholder to ensure the safety and security of the facility. The host government will have a unique relationship with the entity that owns the storage facility. This entity may be state-owned, a federal corporation, a commercial corporation, or an international consortium. In addition, the host government will need to negotiate the applicable bilateral arrangements with customer states. States have various export control laws that need to be upheld in the case of transfer of nuclear technology and material.

The proposed back-end concept outlines incentives for a state to serve as a host to a multilateral storage facility. The economic incentives include fee payments from customers, infrastructure development, and the growth of high-quality employment. In addition, the host state benefits from technical advancement and research and development (R&D) programs. There may also be political benefits: used-fuel management is a prominent nuclear energy and nonproliferation issue and any country that can provide an international solution will gain a positive reputation in the nonproliferation regime. It is imperative that these incentives are realized by the host state and that provisions, such as fees and payments by customers, are agreed to before the construction and opening of the facility.

The primary requirement for a host state is for it to be in good standing with the NPT, the IAEA safeguards agreement, and other international conventions in the nonproliferation regime. States in “good standing” with their international safeguards agreements have been verified by the IAEA to have not diverted any nuclear material to a weapons program, as reported in the annual Safeguards Implementation Report. “Good standing” with the NPT, and even other international nonproliferation conventions, is more difficult to discern. Requirements for achieving and remaining in good standing with the NPT should be outlined in any agreements made with host and customer states. Whether the host state is experienced in nuclear energy and the nuclear fuel cycle or a newcomer to nuclear technology, all international guidelines for nuclear safety and security need to be enforced by the state and facility. The IAEA has a series of safety standards for radioactive waste management, including standards for used-fuel storage.⁹ In addition, the IAEA has guidelines for states for the development of a national infrastructure for nuclear power.¹⁰ A state that wishes to become a host should meet the same standards of safety and security (and thus technological readiness) as do states that want to become nuclear power states under IAEA guidelines. Therefore, the host does not need to have reactors (and so does not need to be either a legacy or a newcomer state); but it does need to have developed the human and technological capital that the IAEA outlines. If not already a member, the host state should also consider joining the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management, which is the first legal instrument to directly address these issues on a global scale.¹¹ Discussions on multilateral used-fuel storage facilities through the Joint Convention are discussed later in this chapter.

Crucial to the success of a robust governance and liability arrangement is that the host state be a willing participant in the international back-end fuel services. The state must volunteer as a host and the facility should be sited by a consent-based approach. This approach was recommended by the BRC after lessons were identified from the successes and failures of radioactive waste management enterprises in the United States (see “The Consent-Based Approach for Site Selection,” page 23).¹² A prime example is the Yucca Mountain Nuclear Waste Repository, which was proposed to be the site of commercial used-fuel disposal by the U.S. Department of Energy (DOE), but failed to become operational due to pushback from the State of Nevada, despite the support of the immediate local community. The site was mandated by law and not chosen on a consent-basis. Another example is the Pangaea Resources proposal, in which a United Kingdom–based company identified areas around the world that they found to have the most appropriate geological features for an international nuclear waste repository, one of which was located in the Australian outback. This proposal was not well-received by the Australian public and government, and the Western Australian parliament even passed legislation to make it illegal to dispose of foreign high-level waste in the province.¹³

Beyond consent, the host state must also have the opportunity for a back-end R&D program to research storage integrity and recycling techniques that lessen proliferation risks, as described in the supplementary section “Used-Fuel R&D Program.” Funding for this program will be drawn from customer storage fees, and customers may allow for the use of their fuel for such R&D activities. The R&D program benefits both the host state and the customers. The host state will benefit from technical infrastructure developed by the R&D program, which would include laboratories, equipment, and quality employment.¹⁴ The customers benefit in the long term from a back-end R&D program that may lead to the development of more robust technologies for fuel recycling, storage, and disposal. Agreements must outline that the results of the R&D program are available to all participants of the multilateral storage facility.

A key question faced by the consolidated interim storage concept is how to ensure that the facility indeed does function as an interim storage facility. How can the host nation ensure that the storage facility located within its borders does not in time morph into a permanent repository? One proposal to address this problem is to structure the bilateral fuel storage agreements between the host and the customers as time-limited arrangements: after a certain period of time (for example, fifty or one hundred years), the stored fuel either must have already been moved to a repository or reprocessing facility or have been returned to the customer. In this way, the customer country is deeply incented to make a decision regarding the permanent disposal of its nuclear waste; and by implication, ownership of the stored nuclear waste would remain with the customer state.

Customers

The customers of the multilateral storage facility are divided into legacy holders and newcomers (as described below). Much like the host state, customer states will participate in the multinational back-end arrangements on a voluntary basis. The present legal framework of the NPT does not allow for the requirement of a state to participate in multinational arrangements.¹⁵ Therefore, a newcomer state, for example, cannot be required to participate in international fuel cycle services or forgo development of any fuel cycle technology in order to develop a nuclear power program. It is furthermore not guaranteed that if a state participates in fuel cycle services then it will not develop fuel cycle technology, such as enrichment and reprocessing. This is an important consideration in gaining customer and international support for a multilateral storage facility. Ultimately, the proposed interim storage concept must “sell” on the strength of its economic, political, and technical arguments. A shared interim facility allows sharing of expensive storage and transportation infrastructure and allows for the postponement of decisions regarding reprocessing. Both the customer state’s public and the international public will see this facility as an internationally certified safe and secure path for nuclear waste. This concept allows technological developments to blossom without forcing anyone’s hand about making potentially irreversible decisions in the here and now.

Although the IAEA cannot mandate it, the multilateral arrangement itself can require that certain parameters be met by a state in order to participate as customers in the storage facility agreement. Such parameters should be identical to the requirements for the host state mentioned above. First and foremost, the customer needs to be in good standing with the NPT and its international safeguards agreement.¹⁶ In addition, all international guidelines for nuclear safety and security need to be followed by the state: namely, the IAEA safety standards for radioactive waste management.¹⁷ If not already a member, the customer should also consider joining the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management.¹⁸

Another major requirement for customer states needs to be an assurance to the host state that there is a final disposal plan in place for the used fuel upon its return to the customer. Even if the fuel is recycled, a plan must still be in place for the resulting radioactive waste. This interim storage facility must not serve as a de facto disposal facility or a mechanism for states to delay dealing with the “used-fuel problem.” Customer states can ensure that there is a permanent disposal plan in place by embracing the necessary laws, regulations, and procedures for selecting, siting, and constructing a radioactive waste repository. Although this does not guarantee that a repository will be open by the time the used fuel is returned to the customer, it does put in place an obligation to do so; thus, pressure from the host state and international community will keep the customer accountable.

The differing needs and issues of customer states should also be considered on a regional basis. For example, Asian legacy fuel holders such as Japan and South Korea have a very different perspective than European legacy holders,¹⁹ and the ASEAN (Association of Southeast Asian Nations) newcomer states have a very different view of the nuclear order than newcomer states in the Middle East and Africa (MENA).²⁰ While the framework of the multilateral arrangement should be beneficial to all customers, the terms used to attract customer states can be tailored to states’ particular interests. ASEAN newcomer states are each looking to build a relatively small number of reactors and are thus interested in consolidating used-fuel storage in the region. On the other hand, MENA states may be more interested in multilateral storage to reduce proliferation risk.

Legacy Holders

Legacy holders are states with existing nuclear energy programs that already have an inventory of used fuel in interim pool and dry storage. With the exception of the few states that have sited permanent disposal repositories (such as Norway and Sweden) or that already reprocess their fuel (France), the majority of nuclear power states have a build-up of used fuel. Most of this fuel is stored on-site at nuclear power plants either in pools or in dry storage if the pools are nearing capacity. Many states are waiting for the large nuclear power states, such as the United States, to go through the process of disposing of used fuel before they venture down this complex path. Some states may also be allowing time for a more proliferation-resistant recycling technology to be developed. There are also states that have yet to make a firm decision or policy on the issue of used fuel. For these reasons, a multilateral interim storage facility is attractive to states that are having difficulty disposing of used fuel or waiting for better options.

As the first customers of the multilateral interim storage facility, legacy states—which need the storage facility more urgently than newcomer states—will provide the funding to build the facility. The organization of the operating entity will need to appeal to legacy states in order to attract them as the first customers. Further, the legacy states’ existing relations with the host state must not be a deterrent. Legacy states are concerned about the integrity, safety, and security of the used fuel being stored in another state. The host needs to ensure that the used fuel is stored in a manner so that it can later be returned to the customer.

Legacy states also have existing export control laws that need to be considered when transferring nuclear material and technical information about the material. Some states require a bilateral nuclear agreement, the negotiation of which may depend on the good standing of the host state within the nonproliferation regime. All major nuclear power states are members of the Nuclear Suppliers Group and model their export control laws accordingly. Most important, the host state needs to assure its customers that their used fuel will not be used for a nuclear weapons program.

Newcomer States

States currently constructing, planning, or exploring their first nuclear power plants are newcomers to the nuclear industry. Although not in immediate need of storage solutions, these states are nonetheless interested in assured back-end services for their future used fuel. Many of these states have limited expertise in nuclear technology and will only construct a small number of nuclear reactors. Multilateral back-end services are attractive in that the newcomer state will not need to further develop interim storage. Used-fuel storage has become a major nuclear issue in many legacy states, but assured back-end services would alleviate these concerns for newcomer states.

Therefore, newcomer states are most concerned about the guarantee of back-end services if they do not develop back-end technology themselves. For example, what happens when a state develops a nuclear energy program with the plan to store used fuel at a multilateral storage facility, but when it comes time to store the fuel, the facility is full or shut down? This would present a major problem to a state that does not have the nuclear R&D program or technology to develop the back-end of the fuel cycle. How can the host state and operating entity ensure that back-end services will be there when newcomer states start unloading used fuel? The contract must therefore have provisions that allow for agreed-to storage capacities that are legally enforceable under international trade laws so that the performance obligation belongs to the host state.

Newcomer states will also have the same safety and security concerns for their used fuel as legacy states. Moreover, they will likely need assistance with transporting the fuel to the facility. (Ownership during the transportation phase is discussed more in later sections.) Finally, newcomers will need to have a plan in place for the used fuel once it is returned, after the duration of the storage agreement.

International Community

The international community is a major stakeholder in this concept and includes all states and organizations that are involved in the nonproliferation regime and nuclear industry. The international community is interested in multilateral storage facilities in order to mitigate the safety concerns and the risk of proliferation from the back-end of the fuel cycle. By providing back-end services, it is less likely that a state will pursue current reprocessing technology to reuse the material in the fuel.²¹ At the same time, multinational back-end services encourage the growth of nuclear power, especially for newcomer states that are concerned about used-fuel disposal. The growth of nuclear energy is favorable for nuclear supplier states.

As the leading international organization for nuclear technology and the nonproliferation regime and also as a supporter of international fuel cycle services, both front-end and back-end, the IAEA has taken particular interest in this venture. As mentioned previously, the international treaty on the safety of spent-fuel and radioactive-waste management produced by the IAEA in 1997 requires that any national or multinational facility meet the highest national and international standards. The convention affirms the importance of bilateral and multilateral mechanisms to enhance the safety of radioactive-waste and spent-fuel management and also in assisting less developed nations with the obligations of the convention.²² Although multilateral and regional facilities have been mentioned in past meetings of the convention,²³ the summary of the most recent meeting in 2012 states that “the long term management of spent fuel and high-level radioactive waste remains a challenging and difficult topic with considerable areas for improvement” and that it must be taken “into account from the very beginning of any nuclear activities, such as in expanding nuclear power programmes.”²⁴

The IAEA should take some part in the formation and management of the interim storage facility and governing entity. The IAEA will also be responsible for supervising the implementation of safeguards for the used fuel at the facility. The material at the storage facility and that used in the R&D program will be eligible for international safeguards measures and inspections according to the safeguards agreements of both the host state and the customers. Although the fuel will remain under the ownership of the customer, its location in the host state will complicate international safeguards obligations.

Other international organizations that may be stakeholders in back-end fuel cycle services include regional nuclear and nonnuclear organizations, such as the Brazilian-Argentine Agency for Accounting and Control of Nuclear Materials (ABACC), the European Atomic Energy Community (EURATOM), and the Arab Atomic Energy Agency (AAEA). Other international organizations may also be consulted: the World Institute for Nuclear Security (WINS) for security considerations; the Nuclear Suppliers Group (NSG) for export control guidelines; and the World Association of Nuclear Operators (WANO) for safety best practices.

Structure of the Facilitating Entity

Once the host state is identified, the actual entity that will manage the facility should be formed. The structure of this entity may be state-owned and -run, a federal corporation, a commercial corporation, or an international consortium. Each type of organization presents different advantages and disadvantages in governing and operating the facility. In order for a multilateral fuel storage facility to be a success, the facilitating entity must be able to do the following effectively:

• Attract and negotiate with customer states;
• Assist in forming the necessary bilateral and/or multilateral agreements between the host state and customer states;
• Have the technical expertise to manage the transportation, transfer, and storage of used fuel;
• Be independently regulated by national or international authorities;
• Have open communication and a working relationship with the host state;
• Have the ability to operate protective security forces;
• Accept international safeguards on nuclear material;
• Make decisions quickly in response to safety or security issues;
• Remain transparent, credible, and accountable;
• Maintain operational stability even in times of national, regional, or global instability; and
• Accept input from members, customers, and the international community.

The degree of implementing authority that this entity has is crucial to the success of the facility, especially when safety or security concerns arise. An organization that is too bureaucratic or has too many stakeholders with authority cannot make and implement decisions in a timely or effective manner. An international consortium could be designed to ensure that all members have input and influence, while still being structured to enable quick and effective decision-making. The facilitating entity can have a board of directors in which representatives of the regional and international community are present. In addition, the IAEA and/or regional nuclear authority need to have a seat at the table in order to ensure that the highest standard of safety and security guidelines are followed. The entity needs to be transparent, credible, and have political authority.

While a state-owned and -run facility is a possibility, past experience has shown that existing government organizations are not necessarily the most effective at managing used-fuel storage. This was yet another lesson learned from the BRC, which recommends that a new organization be formed (separate from the DOE) to implement the waste management program. Further, this should be a federal organization with the sole purpose of waste management “to provide the stability, focus, and credibility” and possess a “substantial degree of implementing authority and assured access to funds.” Finally, the organization needs “rigorous financial, technical, and regulatory oversight” by the appropriate government agencies.²⁵

When considering the structure of the facilitating entity and associated customer contracts, existing international fuel cycle arrangements can be consulted for best practices. For example, France reprocesses fuel from other countries and then sends the material (MOX²⁶ and radioactive waste) back to the customer. Russia provides fuel-leasing services to other countries, wherein Russia remains the owner of the fuel. These arrangements are further discussed in the supplementary secion, “Case Studies of International Fuel-Conditioning and Fuel-Leasing Arrangements.”

In the case of an international storage facility, oversight may be provided by an existing international organization, such as the IAEA, or by a newly formed international or regional organization. The host state’s existing independent nuclear regulator should provide safety and security regulation and oversight. The differences between laws governing federal and commercial corporations vary from state to state and should be taken into account when forming this entity. The ownership of the entity will impact its ability to implement and make decisions and also its ability to attract customer states. There must be confidence in the facilitating entity for customer states to trust the host with used-fuel storage for a significant period of time.

The long timeline for this facility—one storage agreement can last for up to about one hundred years—also introduces the issue of regional stability, especially considering how often borders have changed in the past century. For example, Slovenia’s current capital, Ljubljana, has politically been part of seven different countries in just the last century. Revolutions and coups d’état are now occurring in states around the world. Civil wars and regional tensions in the future can have a significant impact on the safety and security of a storage facility. This may increase the importance of an independent governing entity and oversight by an international authority. A multilateral arrangement can protect the facility against political situations in a customer or host state; thus, the facility oversight should not belong to a single state. While the host state may be the sole or main owner of the facility, oversight and additional stakeholders should include other nations, companies, and international organizations. Procedures implemented by a multinational or international entity need to be formally established in case the facility location is compromised by changing borders, war, natural disaster, or other causes.

Stages of Governance during the Storage Facility Operation

Transportation to and from the Storage Site

The storage of used fuel in a multilateral facility begins with the transfer of that fuel from the customer to the facility in the host state. Agreements need to outline which party will be responsible for the transportation of the fuel at which phases, including loading the fuel into transportation casks from pool or dry storage. This endeavor is complicated and involves technology that a newcomer state or a state with a small nuclear program may not possess. Therefore, the host entity should assist with or completely handle transportation of the used fuel to the storage site. The multilateral storage facility is only economical if all of the costs of the infrastructure for transportation are spread among the participants.

Transportation regulations for radioactive material in the customer state, host state, and any states within the travel path must be taken into account. Although nuclear material has been transported internationally for many decades, there may still be significant hold-up and delays in processing radioactive material at border crossings. The IAEA publishes many international safety regulations for the transportation of nuclear material.²⁷ If not done already, the integrity of all transportation routes needs to be inspected according to national regulations. Some countries and locales also maintain a nuclear-free zone, which—depending on the specific legislation—may or may not apply to the transportation of high-level radioactive materials. Piracy in international waters must also be considered a risk for the transportation of used fuel. If not already in place, the host state will need to establish sound infrastructure for accepting and transporting used fuel at ports and through borders on roadways and railroads. These same considerations must be taken into account when transporting the used fuel offsite either to a disposal or recycling facility or back to the customer.

Governance at the Storage Facility

The question of who owns the used fuel when it is stored at the multilateral facility is important. In this storage concept proposal, the customer maintains ownership of the fuel and the host state returns the fuel at the end of the storage agreement. However, the host entity manages the fuel in the facility and therefore is liable for the safety and security of the material, which is discussed later in this chapter. The main concern here is how much input the customers and the international community have in the management of the used fuel onsite. The character and extent of customer involvement will be outlined by the nature of the host entity and the contracts to which the participants agree.

Ownership and Liability at the End of the Storage Agreement

Since this proposal involves a multilateral interim storage (not disposal or repository) facility, used-fuel storage agreements will be for a finite time period, after which the used fuel is sent back to the customer state, who must have the means to deal with it domestically. A major fear is that states will use the multilateral storage facility as a cop-out and will not take steps to ensure that they can dispose of or recycle the used fuel once it is returned. As discussed previously, the storage agreement should require the customer to have a policy and plan in place for how the used fuel will be managed once it is returned. This plan should include the laws, regulations, and procedures to site and construct a permanent disposal repository. Even if the customer decides to recycle the fuel, disposal will be needed for the subsequent radioactive waste. Including this plan in the storage agreement will allow the host state and multilateral entity to pressure the customer into following through with the plans.

The storage agreement should include financial and/or political penalties in the event that the customer does not have a proper used-fuel strategy in place at the conclusion of the agreed storage period. One option is for the customer to set forth a timeline with milestones for used-fuel disposition that is included in the storage agreement. If the milestones are not met by the proposed dates, the multinational storage facility can fine the customer. For example, if the customer agrees to have a repository sited by 2050 and does not follow through, then the customer state will be fined yearly until the repository is sited. This will encourage customers to adhere to their used-fuel policies and remain accountable to the terms set forth in the storage agreement. Returning the used fuel to the customer at the end of the storage agreement will also be punishment in itself if they do not have the means to handle it. There would be public outcry and the government would be pressured to immediately take action to store or dispose of the fuel. In severe cases, if the customer does not take back the fuel or pay the associated fines, the international community can enforce embargos and sanctions until the state has an action plan to handle and dispose of the used fuel. This strategy might not work in states with isolated economies, and this issue needs to be addressed further.

Some envision that in the future we could develop a recycling technology that is more proliferation-resistant and is thus welcomed by the nuclear nonproliferation community. In that case, the used fuel in storage could be viewed as a commodity: fuel whose recycled uranium and plutonium could be reused in reactors for energy. Such a recycling facility could be built in the host state and customers could opt to have their fuel recycled there. In this case, nuclear material and the associated radioactive waste would still need to be returned to the customer. There may be a case in which the customer country no longer has a nuclear power program and opts to sell its recycled nuclear material. Even in this case, again, the associated radioactive waste from the recycling process would still be returned to the customer. Therefore, in any scenario, the customer must have a plan for the final disposal of high-level radioactive waste, as outlined in the storage agreement.

If such recycling technology does exist in the future, then used fuel may be seen as a commodity and valuable resource: the uranium and plutonium within it may be used to produce energy. A situation may arise in which the host state chooses not to return the fuel to its customer, thus breaching their contract, and instead recycles it for profit or to satisfy its own fuel needs. Since this used fuel will be under IAEA safeguards, withholding the transfer of the fuel back to the customer can be seen as a diversion of nuclear material and therefore a breach of the host’s safeguards agreement. While international pressure and sanctions may prevent or resolve such a situation, this scenario also requires further exploration.

Another scenario worth considering is if a multinational permanent repository for used fuel were to open while the storage facility is still operating. In this case, customers may opt to have their used fuel or radioactive waste from recycling disposed of in this facility. This does not mean that customers should not have their own plans in place for a permanent repository. But if a multinational repository is planned before customers send their used fuel to the interim storage facility, there can be an option of using the multinational repository instead of the customers’ own.

Liability Issues

In the case of an accident or security breach, the host-customer contract must clearly state who is liable and to what extent. One such scenario may involve the loss of integrity in the cladding of used-fuel assembly over time. If an accident occurs, who is responsible for the cleanup? In addition, accidents may occur during transportation, while transferring assemblies, or even due to a natural disaster. Security breaches may involve the attempted theft or destruction of the material. Such situations need to be taken into account when negotiating contracts and insurance for the storage of the used fuel.

Such liability issues also need to be taken into account when designing the structure of the facilitating entity. If the host country and entity do not agree to take full liability for the nuclear material during transportation and once it is on-site, agreements need to outline the terms of liability for possible future events. International oversight by the IAEA, for example, may need to determine liability in some cases; however, it should be noted that the host entity needs to have authority to immediately take action in the event of an accident or security breach in order to mitigate unwanted outcomes and deal with the situation.

Liability and insurance are not new issues to the nuclear industry. For example, these same challenges are present in the United States, where fresh fuel is manufactured and shipped by different companies, not by the owner of the fuel. Similarly, fresh fuel is shipped across international borders, raising a number of questions about liability. There is also experience in shipping used fuel internationally, as with France’s international recycling operations.²⁸ These arrangements should be referenced when considering liability and insurance for shipment to and storage of the used fuel in the multilateral interim storage facility.

Nonproliferation and Security Issues

While one of the goals of multilateral interim used-fuel storage is to mitigate proliferation risks, there are still some nonproliferation issues that need to be considered in this proposal. First of all, all nonnuclear-weapons states party to the NPT are subject to international safeguards according to agreements made with the IAEA. Nuclear material is safeguarded according to state ownership and not necessarily the physical location of the material. For example, used fuel from a nonnuclear-weapons state sent to a nuclear-weapons state for reprocessing is still subject to safeguards under the origin state’s agreement. With a multilateral facility accepting material from different states, it may be difficult for the IAEA to implement safeguards according to each state’s agreement. In particular, some states are implementing the Additional Protocol (AP) while others are not or are still in the beginning phases.²⁹ If a state’s used fuel is stored in another location, it may be more difficult for the IAEA to reach the “broader conclusion” and determine that there is no clandestine nuclear activity in that state. Therefore, safeguards approaches for the storage facility should be considered prior to design and construction of the facility to allow for ease of inspections and accounting. Not only will the IAEA need to verify fuel assemblies, it will verify that they belong to the declared state of origin. IAEA access to the facility and nuclear material can also be limited if the host state or participating states have not implemented the AP, which allows IAEA inspectors full access to any nuclear-related facilities in a state and the ability to employ a variety of safeguards measures, such as environmental sampling and open-source analysis. If the host state has implemented the AP but one of the customer states has not, inspectors may not be able to employ the full set of safeguards measures on that facility. Further complications may arise if a state has a safeguards agreement but is not party to the NPT (India, Pakistan, and Israel currently fit this description). The host state and facilitating entity need to work with the IAEA to develop a safeguards plan prior to constructing the facility and also include safeguards provisions in agreements with customer states.

In addition to safeguards issues, the multilateral agreement faces nuclear export control issues, which are complicated by the varying export control laws in each state. As discussed earlier, it may be necessary for the host state to negotiate bilateral and multilateral nuclear trade agreements with customer states in order to legally transfer nuclear material and technical information. In some cases, bilateral agreements need to be made with the state in which the technology was originally developed. For example, South Korea uses nuclear technology from the United States, and any such technology transfer between South Korea and another state must also be sanctioned by the United States via a bilateral agreement. Any technical assistance with regards to safety, training, and operations is also subject to export control.

Experts from outside of the host state should be recruited to take advantage of the best expertise in interim storage design and operation at the facility. This is especially important if the host state is a newcomer to nuclear energy or not as experienced in interim storage. Given the structure of the multinational facility, there will also likely be international personnel from contracting and owner companies. So it is important for the facilitating entity and regulatory agency to have strict policies that mitigate the risk of insider threats within the facility that may be presented by both national and international personnel. These provisions include background checks, security surveillance, and personnel screening tests. Such practices are already common in the nuclear industry worldwide because of the sensitive technology. However, policies should not be so strict as to discourage international participation and recruitment of expertise from around the world.³⁰

Significantly, if it can be shown that the international consolidated interim storage concept is both economically advantageous and—on the basis of international standards—demonstrably safe and secure, then individual states that are potential customers may face considerable public pressures to join, should they be offered the opportunity. Furthermore, this concept presents a more politically palatable way for states to behave as if they had signed a 123 Agreement, without actually having entered into one.³¹

Conclusion & Recommendations

The proposed multilateral approach to the back-end of the nuclear fuel cycle will have many benefits for the international community if executed correctly. States are interested in multilateral interim storage facilities to consolidate used fuel until a permanent repository has been constructed or fuel recycling technology that presents less of a proliferation risk is developed. Governance and liability issues need to be taken into account in order to create a successful multilateral approach to a storage facility. This chapter discussed the issues pertaining to stakeholders, governance, and liability, and presented recommendations for the multilateral approach.

The first key to making this proposal a success is that all stakeholders must be willing participants in the multilateral arrangement. Many approaches to managing used fuel around the world have failed due to backlash from the public and participating communities. It is imperative that the host state volunteers to host the facility and that the community is chosen by a consent-based approach. Clear economic, technical, and political incentives should be presented to attract a host. A host state should meet the same standards of safety and security as do states that want to become nuclear power states under IAEA guidelines. Thus, the host state need not necessarily have an experienced nuclear power program, though it should have developed the IAEA-outlined human and technological capital required of the project.

Customer states must also be willing participants in the multilateral facility, which will have to sell itself on the basis of the economic, political, and technical benefits it offers. All participating states should be in good standing with the NPT and other nuclear-related conventions and have a safeguards agreement with the IAEA. States should also have signed and placed into force the Additional Protocol to allow for more robust international safeguards. Because of the complications of safeguarding a facility containing material from multiple countries, the IAEA should be involved in the facility design from inception.

The facilitating entity to manage the multilateral used-fuel storage facility will need to be able to make decisions quickly and effectively and remain transparent, credible, and politically accountable. In addition, the facility should be regulated by an independent organization while also allowing for oversight by the IAEA. The host state and entity will negotiate contracts with customers and manage the transportation and storage of the used fuel. However, the customers remain the owner of the fuel and it will be returned to them at the end of the storage agreement. In order to prevent the storage facility from becoming a disposal facility, the storage agreement should require the customer to have a policy and plan in place for how the used fuel will be managed once it is returned. This plan should include the laws, regulations, and procedures to site and construct a permanent disposal repository, along with a timeline—enforced by a system of fines—to which the customer must adhere. By strictly requiring this of participating states and thus forcing states to take action, plans for disposing of used fuel may move more quickly than they would without the multilateral facility.

One of the biggest concerns surrounding the development and expansion of nuclear energy, as expressed by policy-makers and the global public, is the issue of used fuel. The multinational interim used-fuel storage proposal is meant to provide customer states with a facility to store used fuel while permanent repositories are built and/or better recycling technologies are developed. The program may even accelerate the siting and construction of repositories by requiring customers to have long-term policies in place and to adhere to an agreed upon timeline. Finally, the international community can be assured that the used fuel is stored in a safe and secure manner in an internationally supervised storage facility.

ENDNOTES

¹ Blue Ribbon Commission on America’s Nuclear Future, “Report to the Secretary of Energy,” January 2012, http://www.energy.gov/sites/prod/files/2013/04/f0/brc_finalreport_jan2012.pdf.

² Goldberg, Rosner, and Malone, The Back-End of the Nuclear Fuel Cycle.

³ World Nuclear Association, “Emerging Nuclear Energy Countries,” February 2014, http://www.world-nuclear.org/info/Country-Profiles/Others/Emerging-Nuclear-Energy-Countries/.

⁴ The question of whether to reprocess fuel is currently both a question of economics and of proliferation concerns, given the current state of reprocessing technologies that separate out plutonium. Whether this will continue to be the case depends on future technological developments, and a key aspect of this interim storage strategy is to buy time while simultaneously moving toward internationally supervised nuclear waste consolidation.

⁵ Goldberg, Rosner, and Malone, The Back-End of the Nuclear Fuel Cycle.

⁶ In other words, countries that already view nuclear waste as a potential energy resource can avoid committing to building retrievable repositories while the technologies for reprocessing remain economically questionable and problematic from the proliferation perspective.

⁷ See Chapter 2, “Back-End Governance and Liability Business Plan,” in this publication.

⁸ International Atomic Energy Agency, “Multilateral Approaches to the Nuclear Fuel Cycle: Expert Group Report submitted to the Director General of the International Atomic Energy Agency,” INFCIRC/640, February 22, 2005, http://www.iaea.org/sites/default/files/publications/documents/infcircs/2005/infcirc640.pdf.

⁹ International Atomic Energy Agency, “Safety Standards: Radioactive Waste Management,” http://www-ns.iaea.org/standards/documents/topics.asp?sub=170.

¹⁰ International Atomic Energy Agency, Milestones in the Development of a National Infrastructure for Nuclear Power (Vienna: International Atomic Energy Agency, 2007), http://www-pub.iaea.org/books/IAEABooks/7812/Milestones-in-the-Development-of-a-National-Infrastructure-for-Nuclear-Power.

¹¹ International Atomic Energy Agency, “Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management,” INFCIRC/546, December 24, 1997, http://www.iaea.org/sites/default/files/publications/documents/infcircs/1997/infcirc0546.pdf.

¹² Blue Ribbon Commission on America’s Nuclear Future, “Report to the Secretary of Energy.”

¹³ World Nuclear Association, “International Nuclear Waste Disposal Concepts,” April 2012, http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Nuclear-Wastes/International-Nuclear-Waste-Disposal-Concepts/.

¹⁴ See Chapter 2, “Back-End Governance and Liability Business Plan.”

¹⁵ International Atomic Energy Agency, “Multilateral Approaches to the Nuclear Fuel Cycle.”

¹⁶ States that are not party to the NPT but have a safeguards agreement with the IAEA (India, Pakistan, and Israel) should be considered as customers on a case-by-case basis.

¹⁷ International Atomic Energy Agency, “Safety Standards: Radioactive Waste Management.”

¹⁸ International Atomic Energy Agency, “Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management.”

¹⁹ With the exception of France, which generally shares opinions with Japan and South Korea.

²⁰ ASEAN has already declared the region a nuclear weapons–free zone, but MENA states are at a high risk of proliferation due to political tensions and existing unofficial nuclear-weapons states in the region.

²¹ For example, see PUREX and its aqueous variants, which separate out plutonium and are thus problematic from the proliferation perspective.

²² International Atomic Energy Agency, “Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management.”

²³ International Atomic Energy Agency, “Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management: Third Review Meeting of the Contracting Parties,” JC/RM3/02/Rev2, Article 20, May 2009, http://www-ns.iaea.org/downloads/rw/conventions/third-review-meeting/final-report-english.pdf.

²⁴ International Atomic Energy Agency, “Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management: Fourth Review Meeting of the Contracting Parties,” JC/RM4/04/Rev.2, May 2012, http://www-ns.iaea.org/downloads/rw/conventions/fourth-review-meeting/summary-report-english.pdf.

²⁵ Blue Ribbon Commission on America’s Nuclear Future, “Report to the Secretary of Energy.”

²⁶ Mixed uranium-oxide plutonium-oxide fuel.

²⁷ International Atomic Energy Agency, “Transport Safety: Published Safety Standards,” http://www-ns.iaea.org/standards/documents/topics.asp?sub=250.

²⁸ See “Case Studies of International Fuel-Conditioning and Fuel-Leasing Arrangements.”

²⁹ International Atomic Energy Agency, “Status of Additional Protocols,” November 2014, http://www.iaea.org/safeguards/protocol.html.

³⁰ For more on insider threats, see Matthew Bunn and Scott D. Sagan, A Worst Practices Guide to Insider Threats: Lessons from Past Mistakes (Cambridge, Mass.: American Academy of Arts & Sciences, 2014).

³¹ In particular, the concept offers states the opportunity to commit to not reprocessing used nuclear fuel within their borders.