Three Important Future Uncertainties and the Way Forward1
KONDO Shunsuke
Chairman, Atomic Energy Commission of Japan
Thank you, Mr. Chairman. Ladies and Gentlemen, I am very pleased to have been exposed tosuch a variety of viewpoints on nuclear fuel supply assurance framework during this Special
Event. The remarks that I would like to make at this occasion with great pleasure are what I
think of three most important future uncertainties concerning the establishment of aninternational nuclear fuel supply assurance framework, mainly focusing on the Type 1 MNA
approach. The reason why I will talk about uncertainties is because the IAEA secretariat asked
me to do so beforehand.
The most important uncertainty I would like to point out firstly is the customer’s
trustworthiness or acceptability of backup systems to be realized based on the discussions inthese two days as a part of global nuclear fuel supply assurance mechanisms. As these backup
systems are proposed from the acknowledgement of the existence of distrust to the market,
care should be taken prepare the soil for the distrust to grow in their design, as their functionis necessarily interwoven in the nuclear fuel supply systems under national regulation. In thisrespect, we should bear in our mind a thesis that once distrust has set in, it soon becomes
impossible to know if it was ever in fact justified, for distrust has the capacity to beself-fulfilling and to generate a reality consistent with itself.
In my judgment many thoughtful questions were posed to check the trustworthiness of the
proposed systems during last two days ranging from technical aspects as to the accessibility tofabrication services in the case of fuel bank systems to institutional aspects such as the abilityof the IAEA to make a timely decision under the political pressure from disputing countries
and legal aspects such as the way to accommodate rules for a new system to the framework ofexisting laws. I hope that such constructive discussions will be continued, desirably involving
potential customers as well.
At the same time, the designer should bear in mind that fundamental importance to theenhancement of the reputation for trustworthiness of a system are 1) pre-commitment ofmajor countries to the system, by allowing their industries “immunity” to escape from thepolitical decision, for example, 2) to make promise with those who are most skeptical to thesystem, 3)
the absence of potentially aggressive devices such as non-universal
conditionality for recipient States, and 4) the lack of ambiguity in what to cooperate about, inthe current case, to formulate a “last resort” to enable eligible countries to make full use of
nuclear energy. I would like to point out at this juncture that it is from the recognition of theimportance of these factors to the establishment of the trust to the system that Japan hasproposed to establish a system in which as many countries as practicable register their nuclear
fuel supply capability in the various elements of the front-end of fuel cycle, starting fromuranium ore supply to fuel fabrication to the IAEA, and the IAEA disseminates information
1

Presented and editorially revised thereafter at the concluding session of the IAEA Special Event, “NewFramework for the Utilization of Nuclear Energy: Assurance of Supply and Nonproliferation”, 19 to 21
September 2006, Vienna, Austria.
1

on the market situation based on this report so as to increase the transparency of the market,
as a complementary system to the six-nation proposal in which the IAEA plays theintermediary function should market fail in various juncture of fuel cycle activities. We
believe it an important contribution as a) market failure is possible at various juncture of fuelcycle activities, b) to establish these functions in such a way is to express a collective political
will of Member States to prevent an eligible State from being isolated from the fuel supply
market, and c) the increase in the transparency of the market owing to it and the existence ofthe IAEA‘s intermediary function based on the information may suppress the exercise ofpolitical intervention into the market.
The second uncertainty is the best modality of the system to be pursued to realize. We havediscussed various possibilities here, ranging from a virtual system to a real one which
equipped with relevant stocks and functions. From my viewpoint, the best modality should bedetermined through comprehensive evaluation of their effectiveness that depends on cost,benefit, trust, workability and so on. I hope that the IAEA secretariat will carefully perform
relevant systems analyses for various options taking into consideration various aspects
discussed in this conference.
The third uncertainty I would like to mention is whether to make the market accessible by any
potential buyer through a series of overlapping fuel supply assurances will weaken awillingness of a country to pursue national activities to enter a growing market as a supplier.
Although our endeavor to pursue the type 1 MNA approach will surely contribute to thesuppression of uncompetitive, small-scale enrichment activities within national borders and tothe encouragement of multi-nationalization of such activities, we are to wait the result of “testof liberal markets” which takes a long time for a country to learn, even if it is true that suchactivities are not an economically rational choice in an open free market economy even if its
external benefits related with supply security and reputation are taken into consideration,although it might be accelerated as nuclear energy technology will surely face with severe
competition with other innovative energy supply technologies and the dependence of the costof energy in the country will be increased as its share in the energy supply system willbecome larger.
Therefore I believe it important for us to continue, in parallel with the deliberation of thebackup mechanism, the deliberation of international nonproliferation norms to be agreed uponin near future as a mid-term project. The candidates for the deliberation are a) to apply theIAEA Safeguards including the Additional Protocol which should reflect the potential
easiness of proliferation, b) to make “multi-nationalization” a new norm for nuclear
businesses based on sensitive technologies, and c) to set a minimum requirement ofproliferation resistance on technologies for a business based on sensitive technologies.
The deliberation should pay due attention to universality as well as effectiveness of the newnorms. Obviously, when a new norm of multi-nationalization is proposed, the proposal should
include due respect to the idea that any eligible nations should have an opportunity to be apart of suppliers, through the IAEA as a last resort.
Thank you2