Date laid: 29 November 2018
Parliamentary procedure: affirmative
These draft Regulations propose a new domestic safeguards regime for the civil nuclear sector to replace the current Euratom safeguards regime, which will end when the UK leaves Euratom on the same day as it withdraws from the EU. The Department for Business, Energy and Industrial Strategy says that the draft Regulations would enable the UK to continue to comply with its obligations under international agreements on non-proliferation of nuclear weapons. The Department also explains that the proposed new regime largely reflects the current arrangements under Euratom and that the Office for Nuclear Regulations (ONR) will take over responsibility for oversight of the new regime. Information that we have obtained from the Department suggests that the ONR is on track in preparing to take on this new responsibility.
These draft Regulations are drawn to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.
2.The Department for Business, Energy and Industrial Strategy (BEIS) has laid these two sets of draft Regulations with an Explanatory Memorandum and Impact Assessment. The purpose of the draft Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations 2018 (“FM & IA Regulations”) is to define “fissionable material” and “relevant international agreement”. The purpose of the draft Nuclear Safeguards (EU Exit) Regulations 2018 (“NS Regulations”) is to provide a detailed framework for a new domestic safeguards regime to replace the current safeguards regime provided by the European Atomic Energy Community (Euratom). The new safeguards regime is to apply to nuclear material held in civil nuclear facilities, including fissionable material as defined in the FM & IA Regulations.
3.BEIS says that the intention is to debate the two draft Regulations together in Parliament. This report is focused on the NS Regulations.
4.The UK will withdraw from Euratom on the same day as it will leave the EU, and Euratom’s oversight over the civil nuclear sector in the UK will end on exit day. Once Euratom arrangements no longer apply, the UK will need to have in place new bilateral safeguards agreements with the International Atomic Energy Agency (IAEA) to replace current trilateral agreements involving Euratom. These bilateral agreements were signed in June 2018 and set out the UK’s future safeguards obligations in relation to the non-proliferation of nuclear weapons. In addition, Nuclear Cooperation Agreements are in place with the United States, Canada, Australia and Japan. BEIS says these agreements, together with the draft Regulations, will allow the Office for Nuclear Regulation (ONR) to establish a new regime which will deliver the international safeguards standards of the IAEA from day one of exit. Over time, the intention is to deliver standards that are equivalent in effectiveness and coverage to those currently provided by Euratom, exceeding the international standards.
5.BEIS explains that nuclear safeguards are non-proliferation reporting, accountancy and verification processes by which nation states demonstrate to the international community that civil qualifying nuclear material is not diverted into military or weapons programmes. They are also needed to enable civil nuclear trade.
6.The NS Regulations propose a detailed framework for the new domestic safeguards regime. The ONR, as existing UK regulator for nuclear safety and security, will take on regulatory oversight from Euratom. As under the current Euratom arrangements, the core requirements of the new regime will be for operators of a qualifying nuclear facility to maintain records and report information to the ONR which the ONR will then use to provide information to the IAEA, thus fulfilling the UK’s obligations under the IAEA agreements. The NS Regulations prescribe the information and reporting requirements and the forms by which that information will be conveyed to the ONR.
7.According to BEIS, the NS Regulations largely replicate the current Euratom arrangements, with a number of additional requirements for operators to provide information to the ONR, including through Accountancy and Control Plans, and a different approach to exemptions for schools and hospitals.
8.The NS Regulations propose a new requirement for operators of civil nuclear facilities to develop and submit an Accountancy and Control Plan to the ONR. Under Euratom arrangements this is voluntary, but BEIS says that making it obligatory will codify in a single document the responsibilities and procedures that operators have in relation to their nuclear material accountancy and control systems. According to BEIS, this will facilitate more effective oversight by the ONR and align the ONR’s oversight of safeguards more closely with its approach to regulating nuclear safety and security. BEIS estimates that the total one-off cost for operators of familiarising themselves with the new requirement will be between £460,000 and £720,000, with annual follow-on costs of between £60,000 and £100,000 for preparing the Accountancy and Control Plans.
9.Some schools and hospitals hold very small amounts of nuclear material for educational and medical purposes. These sites are currently not subject to Euratom safeguards obligations due to informal agreements with Euratom. BEIS says that the NS Regulations propose exemptions for schools on the basis of the very small quantity of nuclear material they hold. In contrast, hospitals will not receive an explicit exemption under the new regime, but under the NS Regulations they will be able to apply for, and benefit from, a derogation for facilities with limited operation, which will mean more limited reporting requirements, or make use of an exemption for sites where the nuclear material is, in practice, irrecoverable. We asked the Department why it had not opted for a more general exemption for hospitals as under the current informal Euratom arrangements. BEIS told us that:
“We understand that that there may be some hospitals, such as University Hospitals, which do report under the Euratom regime, although they do benefit from a derogation, which requires limited reporting. Due to the limited evidence on the precise nature of all of the qualifying nuclear material held by hospitals, a similar exemption for hospitals was particularly challenging to include within the regulations, as this may remove from the regime some establishments which are currently subject to the Euratom regime. Qualifying nuclear material held by hospitals may meet the criteria set out in regulation 32(1) [in relation to material that is irrecoverable] and therefore be exempt from the regulations, and as set out above, in implementing the new Nuclear Safeguards Regulations, ONR will take a proportionate approach based on risk, in accordance with The Regulators’ Code.”
10.BEIS estimates that it will cost the UK’s 6,500 secondary schools and 2,400 hospitals between £190,000 and £1,200,000 in total to familiarise themselves with the new regulatory regime. BEIS does not know how many hospitals do not qualify for the exemption for sites where the nuclear material is irrecoverable, and how many will need to seek a derogation for limited reporting instead, because they do not meet the requirements for the exemption. Based on an assumption that between 25% and 75% of hospitals will need to seek such a derogation, BEIS puts the total cost for hospitals at between £20,000 and £500,000 for the one-off derogation application and at between £10,000 and £220,000 per year for the annual reporting to the ONR. BEIS says that hospitals will be able to seek advice from the ONR about their position under the new regime.
11.We asked the Department why the higher Euratom safeguards standards could not be met on day one after exit, and when the ONR expects to be able to meet the higher Euratom standards. BEIS told us that:
“The Government and ONR have always made it publicly clear, including in Parliament, that the UK will meet IAEA international obligations from 29 March 2019 including through the recruitment and training of inspectors, building thereafter to a regime equivalent in coverage and effectiveness to that currently provided by Euratom, with or without a deal on withdrawal from the European Union. ONR needs time to build its capacity and expertise in implementing safeguards to have in place a safeguards regime equivalent in effectiveness and coverage to that provided by Euratom. It takes 12-18 months to up-skill new recruits to inspector level, less time is required to up-skill those already in post, and the ONR have recruited and are training the inspectors required to deliver international obligations on day one. ONR aims to have the required capacity and capability to deliver a regime equivalent in effectiveness and coverage to that currently delivered by Euratom by December 2020.”
12.The ONR will need to be able to deliver the new domestic safeguards regime after 31 December 2020 (if there is an implementation period following the UK’s withdrawal from the UK), or after 29 March 2019 (in a ‘no deal’ scenario). BEIS says that the ONR is in the process of developing a new Safeguards Information Management and Reporting System (SIMRS) to enable it to provide reporting data to the IAEA, and that it is also recruiting and training staff to carry out its new regulatory functions. We asked BEIS about the progress that the ONR has made in these preparations. In relation to the SIMRS, the Department told us that:
“ONR is confident that it will have in place the new SIMRS system, to enable the UK to meet international obligations when we leave Euratom on 29 March 2019. The development of SIMRS is on track, with all work packages delivered on time to date. SIMRS is on target for testing and operations later this month. SIMRS, will enable ONR to manage and process nuclear materials accountancy reports from duty holders and submit these, along with other relevant safeguards reports to the IAEA.”
13.The ONR estimates that it will require a team of around 30 to 35 staff to be able to deliver its functions to Euratom standards as set out in the NS Regulations. We asked BEIS about the progress made on recruitment and training. The Department said that:
“ONR estimated it would require a minimum of 9 safeguards inspectors to deliver a safeguards regime that enables the UK to meet its international obligations from 29 March 2019. ONR has exceeded this minimum requirement and has in place 15 safeguards officers and 3 nuclear material accountants, all of whom are progressing through training. ONR will have sufficient safeguards inspectors and nuclear material accountants in place to deliver a UK State System of Accountancy for and Control of (UK SSAC) nuclear material that enables the UK to meet international obligations from 29 March 2019. The estimated 30-35 staff needed to deliver a regime equivalent in effectiveness and coverage to that currently provided by Euratom includes support staff as well as inspectors and nuclear material accountants. ONR is in the process of recruiting and training the required additional safeguards specialists to deliver a regime equivalent in coverage and effectiveness to that currently provided by Euratom.”
14.These draft Regulations seek to establish a new domestic nuclear safeguards regime to replace the current Euratom arrangements when the UK withdraws from the EU and Euratom. While the Department says that the new regime will largely replicate the requirements of the current Euratom regime and meet Euratom standards by the end of 2020, the House may wish to explore further the approach the Government have taken with these draft Regulations. We therefore draw the draft Regulations to the special attention of the House, as they give rise to issues of public policy likely to be of interest to the House.