Communication from the Commission to the Council and the European Parliament - The International Science and Technology Centre (ISTC) in Moscow
Date: 1997-01-08
Institutions: European Commission
Subjects: USSR, disarmament, military research, research and development, research body

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,  08.01.1997 
COM(96) 691 final 

COMMUNICATION  FROM  THE COMMISSION 
TO  THE COUNCIL  AND THE EUROPEAN  PARLIAMENT 

THE  INTERNATIONAL  SCIENCE  AND TECHNOLOGY  CENTRE  (ISTC) IN 
MOSCOW  : RESULTS AND  PROSPECTS 

INTRODUCTION 

1.1 

The  ISTC:  a  practical  example  of  successful  cooperation  in  a  highly 
sensitive  field 

The  end  of the  Cold  War  and  the  dismantling  of  the  former  Soviet  Union's 
research  and 
administrative  structures  brought 
development  activities  in  the  field  of  weapons  of  mass  destruction  to  an 
abrupt  halt.  Researchers  in this  field  saw  their  standards  of  living  plummet 
and the opportunities to use their know-how  shrink.  There was a real danger 
of a mass exodus by Russian  scientists towards  countries with unstable rulers 
possessing or developing nuclear weapons. 

the  Soviet  Union's 

The Russian  government  was quick to  realize the gravity  of the  situation.  At 
a meeting with the US  Secretary  of State  in Washington  in November  1991, 
the Russian  foreign  minister proposed  that  an international  scientific  research 
fund  be  set  up  to  keep  Russian  scientists  and  engineers  specializing  in 
weapons of mass destruction  from  succumbing to tempting offers  to sell their 
knowledge  and  know-how 
On 
27 November  1992 the United  States, Japan, the European  Communities  and 
the  Russian  Federation  signed  an  agreement  establishing  the  International 
Science  and  Technology  Centre  (ISTC)  in Moscow.  The  board  met  for  the 
first  time  in  March  1994,  adopting  the  ISTC's  statutes  and  making  the  first 
grants  for  approved  projects.  In  the  past  two  years  the  ISTC  has  handled 
over  500  proposals,  amply  illustrating  the importance  attached  to  the  Centre 
by  the  military  research  institutions  and  the  government  departments  above 
them. 

the  world's 

trouble 

spots. 

in 

The  conversion  experience  built  up  by  the  ISTC  is  helping  the  military 
institutes  gradually  adapt  to  the  international  scientific  environment  without 
losing their human capital.  The development of new scientific  concepts in the 
civilian  sphere  and  the  introduction  of  modern  project-management  methods 
offer  military scientists a rare opportunity to adjust  their thinking to the needs 
of civil society and improve their international competitiveness. 

If the quality of the topics proposed  and the breadth  of the  fields  touched-on 
show  the  competence  of  the  teams  and  the  excellence  of  their  R&D  work, 
they  also  demonstrate  the  firmness  of  the  ISTC's  partners'  commitments. 
The  average  investment  of ECU 300 000  per  project  financed  is  a  gauge  of 
the  donors'  readiness  to  commit  themselves  to  well-defined  and  clearly-
targeted  projects  on  a scale  sufficient  to  bring  about  the genuine  conversion 
of military scientists. 

1.2 

The  Communities'  crucial  commitment  to the  ISTC 

The  Community's  role in this initiative is to  help  restructure  military R&D in 
the  New  Independent  States  (NIS)  by  contributing  to  civilian  projects 
employing  scientists  previously  engaged  in  developing  weapons  of  massive 
destruction.  It is also to select, through the ISTC, projects that might  interest 
European  scientists, researchers and  industries.  As Table  1 shows, Europe is 
matching the United  States' contribution  to the ISTC's  funding. 

Table 1: budget commitments of the ISTC's partners (ECU million) 

United  States 

EC 

Sweden 

Finland 

Japan 

1994 

1995 

1996 

Total % 

20 

19 

12 

51 

3.1 

20 

10 

15 

45, 

;;  * 

11 

1 

1 

14.1 

14,1 

The ISTC is a central  element of Community R&D cooperation  with the NIS, 
the  others  being:  INCO-Copernicus,  which  is  aimed  at  preserving  the  R&D 
potential  of the  countries  of Central  and  Eastern  Europe  and  the NIS  with  a 
view  to  helping  resolve  social,  economic  and  environmental'problems  and 
stepping  up  R&D  cooperation;  INTAS  (International  Association  for  the 
promotion  of cooperation  with  scientists  from  the NIS),  which  mainly  funds 
joint  research  projects  by  scientists  of  the  INTAS  countries  and  the  NIS, 
finances  seminars  and  grants  bursaries  to  foster  mobility  among  researchers. 
These  programmes  attract  comparable  amounts  of  Community  funding:  in 
1996  the  ISTC  was  allocated  ECU  15 million,  INCO-Copernicus's  activities 
in  the  NIS  ECU  14 million  and  INTAS  14 million.  Where  the  ISTC  differs 
from  the  other  two  programmes  is that  it  funds  projects  wholly  executed  by 
NIS  scientists  and  also  involves  financial  support  from  the  United  States, 
Japan,  Sweden  and  Finland  and  contributions  in  kind  from  the  Russian 
Federation.  By  October  this  year,  the  ISTC's  partners  had  invested  a 
cumulated  total  of ECU 96 million  in  324  projects  lasting  from  two  to  three 
years  on  average  and  involving  15 000  researchers.  By  the  end  of  the  year 
INTAS's  partners  will  have  invested  a  total  of  ECU 60 million  in  1 200 
projects. 

2.  ORGANIZATION  AND OPERATION  OF THE  ISTC 

The  ISTC  was  set  up  with  the  long-term  goal  of  redirecting  the  R&D  efforts  of 
Russian  military  scientists  and  engineers towards peaceful  activities.  Though  part  of 
a  wider  defence  conversion  effort,  the  principal  motive  for  the  ISTC  project  is  the 
need to  prevent  the  proliferation  of technologies  and know-how  relating to  weapons 
of mass destruction. 

The  ISTC  is  also  governed  by  a  legal  framework  laid  down  in  its  statutes,  which 
accord  the inventor  intellectual property  rights while offering  the donors an exclusive 
and inalienable right to use that invention free of charge on their territory. 

The  ISTC  has  a  secretariat,  a  board,  a  coordinating  committee  and  a  scientific 
committee.  It  selects, finances  and supervises scientific  and technical  projects.  What 
is  unusual  about  the  ISTC  is  that  it  pays  researchers  directly  -  not  institutes  or 
laboratories - in US dollars, thereby gaining their trust  and encouraging  effort. 

The  ISTC  is  open  to  all the NIS.  Besides  Russia,  the  signatories  to  the  agreement 
establishing  the  ISTC  are  Armenia,  Belarus,  Georgia,  Kazakhstan  and  Kyrgyzstan. 
For  political  reasons  Ukraine  has preferred  to  set up  its  own  centre.  The  ISTC  has 
its  headquarters  in  Moscow  and  branch  offices  in  Minsk  (Belarus)  and  Alma-Ata 
(Kazakhstan).  Community  funding  is  channelled  through  the  TACIS  programme, 
which  provides  technical  assistance to  smooth  the passage  of the NIS  and  Mongolia 
to  a  market  economy  and  democracy.  The  ISTC's  projects  complement  nuclear 
safety, 
already 
contributing  to  the  conversion  of  many  scientists  and  engineers,  regardless  of 
whether  they  had  previously  been  involved  in  the  production  of  weapons  of  mass 
destruction. 

telecommunications  programmes 

environment 

energy, 

and 

THE  ISTC'S  ACHIEVEMENTS 

In a context  as complex  as the former  Soviet Union's  tactical  and  strategic  weapons 
research,  the  very  fact  of the  ISTC's  existence  - that  it  has  survived  and  developed 
smoothly  -  represents  an  unqualified  success.  This  is  attributable  as  much  to  the 
Russian  government  as the international  donors  (the Communities,  the United  States 
and  Japan).  The  number  of  projects  financed,  the  nature  and  variety  of  the  sectors 
concerned  and the cooperation  network built-up all attest to this success. 

3.1 

The  number  and  scale of the projects  financed 

In October,  after  two  and a half years of operation,  ECU 96 million has been 
invested  in  324  projects  directly  involving  15 000  scientists  previously 
employed  in the  development  of weapons  of  mass  destruction,  over  3000  of 
them members of the hard core of military researchers. 

3.2 

The  projects'fields 

ISTC projects  cover a wide range of scientific  and technical fields; they reveal 
the  broad  outlines  of  a  development  strategy  based  on  the  exchange  of 
knowledge  and  the  introduction  of  modern  production,  safety  and  quality 
methods. 

This  is particularly  true  in the  nuclear  field,  which  for  reasons  rooted  in  the 
Soviet  past accounts for  almost half of the ISTC's  activities.  These  activities 
include safety  analysis, especially in respect  of rapid  shutdowns, the  recycling 
of military  plutonium  and waste storage, the production  of reports  on  marine 
and  soil  pollution,  the  introduction  of  monitoring  and  safety  procedures  for 
fissile  materials,  the  transport  of  materials  and  the  development  of  seismic 
monitoring  equipment. 

ISTC  projects  in the field  of basic research contribute to the integration  of the 
international  scientific  community. .Examples include CERN's  ISTC  projects, 
projects  concerning space exploration and others in the field  of  thermonuclear 
fusion,  and  in  particular  the  International  Thermonuclear  Experimental 
Reactor  (ITER). 

The  health  sector  offers  biological  warfare  specialists  an  opportunity  to 
the 
into  the  development  of  new  vaccines  and 
redirect 
introduction  of modern production  methods in the pharmaceutical  sector. 

their  efforts 

Chemists  are  working  to  develop  ways  of  destroying  chemical  weapons 
which  could  prove  important  in the  future,  or  studying  methods  for  fighting 
fires in industrial plants or  oilfields. 

Those  specializing  in  launchers  are  now  finding  a  natural  home  in  the  civil 
aerospace  sector.  This area of activity accounts, however,  for  only 5% of the 
ISTC's  activities  and  should  be  improved  with  the  backing  of  the  European 
Space Agency and the aerospace  industry. 

The  ISTC  also  offers  a  vantage  point  from  which  to  identify  particularly 
interesting  areas  of Russian  science,  promotes  projects  and  acts  as  a  catalyst 
for  new activities. 

Graph  1: Sectoral  breakdown of CIST  projects 

Funding  by  sector 
of  activity 
1996 

Materials 
14% 

Aerospace 
5% 

Basic  research 
9% 

Energy  production 
9% 

Nuclear  safety 
7% 

Nuclear 
environment 
18% 

Instruments 
13% 

Electronics 
5% 
Medical 
technologies 
7% 

Environment 
6% 

3.3 

The  network  formed 

With  more  than  150  military  research  institutes  involved  in  ISTC  projects, 
conversion  to  civilian  activities  is becoming  a fact  of everyday  life,  especially 
for  the  prestigious  institutes  handling  many  of  the  projects,  among  them 
Arzamas  (37  projects),  Chelyabinsk  (24),  Bochvar  (11),  Kurtchatov  (12), 
Lebedev  (8), Ioffe  (7), the Moscow Institute of Physics  (8), NPO  Vector  etc. 
Since  Perestroïka,  the  ISTC  is  the  first  international  organization  to  have 
gained  access  to  the  closed  cities  where,  in  a  climate  of  high  security  and 
isolation  from  the  world,  scientists  worked  to  develop  weapons  of  mass 
destruction. 

An  effective  international  instrument  for  assisting  research  and  technological 
development,  the  ISTC  is  now  part  of  the  broader  framework  governing 
research policy in the NIS. 

Its success can also be gauged  by the scale of the cooperation  between  teams 
from  the NIS  and the Communities.  About 200 European  research institutes, 
universities  and  firms  are  involved  in  projects  to  some  degree:  examples 
include  the  Forschungszenrum  Karlsruhe,  Rossendorf,  CEA,  BNFL,  ENEA, 
Siemens,  Ansaldo,  Framatome,  Airbus,  Codema and  the  Commission's  Joint 
Research  Centre.  European  firms  and  institutes  see  the  ISTC  as  an 
opportunity  to  work  with  once-inaccessible  institutes  enjoying  a  reputation 
for  excellence  in  advanced  technologies. 
It  is  also  a  gateway  to  the  new 
Russian  Federation,  enabling  them  to  forge  long-term  working  relationships 
with defence  laboratories and manufacturers  working in fields  associated  with 
ISTC  projects.  By  systematically  fostering  cooperation  with  European 
organizations  on  a  case-by-case  basis,  the  Commission  is  contributing  to  a 
wider  debate  on  ideas  and  approaches  in the  fields  of  advanced  and  applied 
R&D.  The  knowledge  accumulated  by  the  former  Soviet  Union's  defence 
institutes  combined  with  European  know-how  is  helping  weave  lasting  and 
mutually-beneficial  links between  members  of the  international  scientific  and 
industrial  community. 

Though  such  working  relationships  are  often  slow  to  take  root,  they 
foreshadow  future  cooperation  between  the  Communities  and  the  NIS,  and 
especially the Russian  Federation. 

THE  ISTC'S  PROSPECTS 

4.1 

General  outlook 

Success  should  not  obscure  the need  for  adjustments  to make the ISTC  even 
more  effective. 
It  has  to  get  the  different  administrations  to  recognize  its 
international  status  and  improve  access  to  the  closed  cities,  for  which  entry 
permits  can  still  take  over  35  days  to  obtain.  The  tax-free  salaries  are  also 
becoming  less attractive  as time goes by, which  could  slow  down  conversion 
if not  adapted  to  current  economic  conditions,  especially  in Moscow.  In  the 
Russian  Federation,  bilateral  programmes  are  sometimes  frowned  on  owing 
to  a certain  ambiguity  about  matters of principle, especially where  intellectual 
property  is concerned.  This  is not  the  case  of the  ISTC,  which  needs  to  be 
seen  as  cooperative,  law-abiding  and  useful  to  the  nation.  This  has  to  be 
brought  home  to  the  political  authorities,  among  them  the  Duma,  which  is 
paying  increasing  attention  to  the  ISTC's  activities. 
In  Russia's  current 
political  climate, the Duma's  support,  like that  of the President,  is  crucial  to 
the ISTC's  success. 

In  the  Communities,  the  political  will  to  back  the  ISTC  is  reflected  in  an 
increase  in its budget  from  this year  on.  This makes  the  Communities  a key 
partner  for  the  Russian  Federation. 
It  coincides  with  the  decision  of  the 
Commission  and the United  States to swap the post of ISTC director  for  that 
of chairman  of the board, whichis currently held by the Communities. 

The  ability to  organize  a genuine  follow-up  to  projects,  and  in particular  the 
application  of  results,  must  now  be  the  ISTC's  key  operational  objective. 
The  work  must be carried  on organizing  effective  partnerships  with  Western 
or Japanese institutions willing and able to play a serious part in projects. 

The  organization  of  such  partnerships  and  the  introduction  of  rigorous 
methods for the scientific  management  of projects will probably take up  most 
of the  ISTÇ's time in the months  ahead.  Its  secretariat  is now  developing  a 
more  dynamic public relations  policy.  In the  Communities,  the  Commission 
and  the  Member  States  must  continue  their  information  and  awareness 
efforts,  drawing on the practical examples now available. 

The ISTC  alone will not  have the means to  pursue  this  policy while  ensuring 
the  survival  of  the  projects  promoted  by  it.  Other  sources  of  public-  and 
private-sector  funding  will  have to  take  over  from  projects  that  have  served 
as  an  opportunity  to  evaluate  and  confirm  the  scientific  and  technical 
capacities  of  several  hundred  research  teams.  The  "ISTC  brand-name" 
should  help those  executing  projects  to  attract  funding,  be  it grants  from  the 
Russian government  or contracts with Russian  or foreign firms. 

4.2 

The  Communities'  contribution 

long-term 
therefore  endeavour 
The  Communities  must 
cooperation  with  European  industry  and  research  institutes.  To  do  so,  the 
Commission  and  the  Member  States  must  capitalize  on  the  ISTC  and  back 
the  development  of technologies  and  knowledge  in  the  future's  key  sectors. 
They must therefore  continue and step up their  efforts  in respect  of the ISTC, 
using it to: 

to  organize 

•  organize  partnerships  in  civilian  sectors  between  European  organizations 

and military research institutes in Russia and the NIS; 

• 

foster  a.policy  of  exchanges  and  familiarization  with  practices  in  Russia 
and the NIS'in order  to gain the experience  needed  to  carry through  other 
industrial and commercial schemes; 

• 

foster  harmonization  with  a  view  to  establishing  common  methods  and 
standards (health, energy, environment). 

Another  way  of  capitalizing  on  ISTC  projects  is  to  put  them  in  touch  with 
international  cooperation  programmes or major  projects.  The ISTC's  projects 
in  support  of  ITER  are  a  typical  example  of  this.  The  ISTC  could  step  up 
these  efforts  by involving the JCR's  institutes  to  a greater  extent,  supporting 
projects  that  international  programmes  would  otherwise  be  unable  to 
develop. 

The  qualities  and  know-how  of  scientists  working  in  military  R&D  centres 
could  also  be  used  for  the  application  of  the  international  treaties  on  the 
destruction  of chemical and biological weapons or banning nuclear testing. 

Under the TACIS programme, new synergies will have to be created  between 
industrial 
ISTC  and  TACIS  projects 

in  the  sectors  of  conversion, 

restructuring,  telecommunications,  nuclear  safety, 
the  environment  and 
energy.  For example, a TACIS project  aimed  at restructuring  a military plant 
could,  if  that  plant  employed  scientists  specializing  in  the  development  of 
weapons of mass destruction, be combined with an ISTC  project  in which the 
plant's  scientists  would  study  applications  with  direct  or  indirect  commercial 
prospects,  provided  the  project  had  the  backing  of  the  country's  relevant 
authorities. 

The key elements of this policy call for:  a real increase in the budget  allocated 
to  ISTC under the TACIS  programme; the  promotion  of cooperation  among 
potential European  partners and civilian and  military  industries in the Russian 
Federation  and  the  NIS;  the  reinforcement  of  the  conditions  governing  the 
scientific  management  of projects; the  stepping-up  of the European  presence 
in  the  ISTC's  secretariat  by  the  secondment  of  new  project  managers;  the 
formal  involvement  of the  Communities  in  Ukraine's  new  centre  for  science 
and  technology;  the  integration  of  the  ISTC's  activities  into  the  policy  on 
scientific  and  technical  cooperation  with  the  NIS;  the  opening-up  of 
cooperation  and  assistance  programmes  (TACIS,  COST,  EUREKA,  the 
fourth  framework  programme  etc.)  to  ISTC  projects  with  a  view  to  long-
term  economic  partnership;  lastly,  the  commercialization  of  projects'  results 
via patents in Europe and throughout the world. 

CONCLUSION 

The first two  years  of the  ISTC's  activity  have been  characterized  by the  success  of 
the  formula.  As  a  multilateral  centre  receiving,  selecting,  developing  and  executing 
scientific  and  technical  projects  aimed  at  giving  CIS  scientists  specializing  in  the 
development  of  weapons  of  mass  destruction  an  opportunity  to  work  on  civilian 
activities with longer-term  prospects, the ISTC has fulfilled  one of its key objectives. 

This  success  should  not,  however,  be allowed  to  obscure  the  scale  of what  remains 
to  be  done.  The  ISTC  is  entering  a  period  of  consolidation:  monitoring  the  many 
projects  launched  since  1994  and  capitalizing  on  their  results  must  be  to  the  fore. 
This  is  also  a  transition  period  for  the  teams  working  on  these  projects,  who  must, 
with  the  ISTC,  identify  and  introduce  structures  enabling  them  to  commercialize 
their work  in the  relevant  sectors  of the market.  Ultimately  the  projects  will have to 
quit the umbrella  of the ISTC,  seeking  backing  from  research  institutes  and  industry 
instead.  Only when  this process  has been  completed  will the ISTC  have fulfilled  the 
objectives  of converting military scientists to civilian activities. 

ISTC  projects  must  therefore  be  chosen  in the  light  of  the  industrial  spin-offs  they 
can  generate,  private  partners  must  be  sought  from  the  outset,  and  funding  taken 
over bilaterally by the Member  States once ISTC funding  comes to  an end.  The JRC 
must  become  an  active  partner  in  ISTC  projects. 
It  could  help  tighten  links  with 
institutes in the CIS and orient projects to the needs of industry by allowing the ISTC 
to  draw  on  its  cooperation  network.  A  real  effort  must  be  made  by  the  ISTC's 
backers to find partners, which  means that  the  Communities  must  mobilize  resources 
commensurate with the task at hand. 

The Commission will therefore be strengthening the existing structure, bringing into 
play, on the one hand, the political, administrative and financial part (TACIS) and, on 
the other, the scientific  and technical  part by coordinating  activities with industry in 
the Member States and the relevant European bodies. 

ISSN 0254-1475 

COM(96) 691 final 

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