The Export reorganization act, 1975 : hearings before the Committee on Government Operations, United States Senate, Ninety-fourth Congress, first session, April 24, 30, and May 1, 1975 online

frequently stationed in these plants. I will furnish these numbers and
further explain the differences for the record.



78

[The following information was supplied for the record.]

ERDA devotes approximately 32 man-years of effort to safeguard Inspections
and related evaluations. Four inspectors are employed in the Washington head-
quarters. The remainder are stationed at ten ERDA field offices, in most cases
collocated with the major plants handling special nuclear materials. The ERDA
inspectors carry out, at a minimum, annual safeguards inspections at 35 major
special nuclear material facilities owned hy the Government. However, in a
number of cases, for example, the gaseous diffusion plants, the ERDA safe-
guards inspectors are on the scene on a daily basis to carry out various aspects
of safeguards inspection at the plant.

Senator Percy. Whenever the IAEA has found a violation in a
country, to which we are actually exporting special nuclear materials,
do we have absolute certainty that there is a violation? Are we ad-
vised of it? Or could a situation exist, in which we are sending nu-
clear materials to a country that is at the same time violating its
IAEA commitments, without our knowing it?

Dr. Friedman. I think the representative from the State Depart-
ment could answer that.

Mr. Bexgelsdorf. Senator, under its procedures, the Inspector Gen-
eral of the IAEA is compelled to bring to the attention of the Board
any event of which he is cognizant that involves a seriously ques-
tionable activity.

If the Board then makes a judgment that there is a violation under
the agreement with IAEA, a series of sanctions then can come in
force, to bring about adequate security. For example, the matter can
be brought before the U.N. Security Council. Assistance can be with-
drawn, et cetera.

In the ultimate analysis, I think we all agree that the ultimate ef-
fect of a violation would be that public census and possible threat
of a termination of supply and outside assistance.

Senator Percy. But does that information flow automatically and
directly then from the first point that we get it, to say the licensing
authority so that they are advised at least before approving a license
for shipping of materials. They are on notice, at least, that there is
this violation ?

Mr. Bexgelsdorf. I should say to our knowledge, Senator, in the
history of the IAEA system, there has never been a diversion.

The case of the Indian nuclear shot which is frequently alluded to,
however, is a prime example of what can occur when a facility is not
safeguarded, or when the undertakings are imprecise. However, to
my knowledge, unless my colleagues have other information, there
has never been a conscious diversion or breach of an IAEA safeguard
agreement.

There was some anecdotal material presented this morning, which
I heard for the first time. There were also some suggestions made
that frankly, Senator, would give a number of us here some pain, to
the effect that the IAEA is a fairly limp, weak, and understaffed
organization.

I think our common perception on this side of the table is that for
its current demands, the IAEA is doing a fairly active and indeed
somewhat unprecedented job.

Senator Percy. Is there any panel member who does not feel an
upgrading of our U.S. safeguards activities, as we propose, is at all
necessary ?



79



Let me rephrase the question since you look puzzled.

Does anyone want to speak on the subject, as to whether or not the
upgraded safeguards that we are proposing, are not at all necessary,
and that nothing needs to be done in the field ?

Dr. Friedman. I guess I would only say if nothing were being
done, the constantly reviewing of our safeguard procedures, and if
we were not constantly upgrading our safeguards and physical se-
curity procedures, then it would be obvious that something would
need to be done.

Senator Percy. I think what we are trying to do in these hearings
in a sense, for those of you who are working diligently to do that, is
simply to indicate to you that you have a large body of support in
the Congress, and, I think, a large body of support in the country,
for getting an adequate budget, and for getting proper attention to
this area.

I have long exceeded my time.

Senator Glenn. General Giller, if you want to add something,
please do.

General Giller. Starting several years ago, we started a major effort
to upgrade the physical security and inspection systems. I am sure
we are not running fast enough to suit everybody. There is no lack
of urgency on our part and no lack of coordination, I will not say no
lack of funds, but we have been given a lot of extra funds. We would
always like more, of course, but we are in fact moving very rapidly,
very strong, and I think the record in all of its detail will support
that.

Senator Percy. I want to thank all of you.

Senator Glenn. All of the coordinating effort is fine, but if we are
only looking for the facts, do we really know where the plutonium is
in the world, and what is being done about it ?

We could coordinate until breakfast, and all of the coordination
between agencies does not mean anything, unless we really have a
handle on where the plutonium in the world is.

I do not share your confidence for the moment about IAEA having
a good handle on all of this, nor do I have all of the confidence that
some of you gentlemen have exhibited with regard to the cooperative
efforts of solving our problems.

I am a little bit more critical of that. I heard here that the Indians
destroyed a tape of the records remotely monitored, at least that is one
of the charges Mr. Rosenbaum had made. Does our procedure then cut
off further cooperation, immediately in that regard? Do we not send
them anvmore equipment, or anvthing, or cooperate in any way?
Does IAEA do that?

I do not have any indication that is the case at all, and it seems to
me, we have some very tough questions here.

I do not think everything is quite as great. Do we know where all
of the plutonium in the world is, and what is being done? If not,
what procedure do we get to do that ?

I do not think we really know that answer completely in our own
country.

Maybe the news reports have overblown some of this sort of thing
out of proportion, but I think we do have some changes to be made,



80

and I am afraid I do not have the complacency that you have, the
complacent attitude, maybe that has been exhibited.

Would anyone care to comment ?

That is a harsh criticism, but I mean it exactly that way.

I am certainly concerned about this. I know that. I am concerned
when I see executive agreements made, and then there is a license
going out; but does Congress see all of the licensing arrangements
made under that executive agreement, under which fuel is sent to
South Africa, India, God knows where, does Congress have some
monitoring, and if not, then maybe we need some upgrading of our
own procedures here. That is possible.

I am not just trying to criticize the Administration, but we have
computers — What consideration was given? We have some sort of
executive agreement with South Africa, and a computer is sent there,
and they are building their own uranium enrichment plant. And yet,
we do not have our inspectors in there who are monitoring that.
What is the computer being used for ? I do not know.

I am not as concerned about the computer at this point, as I am
about the specifics of the process of letting this stuff get outside of
our country, and proliferating around the world.

So, what under IAEA control is there to change? Is IAEA co-
operating in any way with India ?

I do not know. These are rather harsh indictments I am making,
I guess, but we do have the statement from Dr. Friedman, that the
President makes his decision on unreasonable risk.

We are playing doomsday here today. That is the big risk that we
are taking, and if anyone can tell me that we know where all of the
plutonium and the uranium is in this country and in the world, then
I will go home and sleep better tonight. Until we get to that point,
then I think we have a lot more work to be done in this country.

Senator Percy. I will not let you sleep well tonight, because I have
heard testimony today that stands in sharp contrast with the brief-
ings that I have had from CIA. It disturbs me very much indeed that
someone in a very high position did not have the same knowledge that
I had when I do not have a direct responsibility, but rather a curi-
osity on some of those points. I do feel the hearings to that extent
have been useful and helpful, and have reinforced our feeling of
urgency about making absolutely certain that we provide every con-
ceivable safeguard that we can.

We have that duty and responsibility, and we want to work closely
with you in trying to work this out.

Senator Glenn. What we are dealing with is trying to set up an
interagency mechanism, where we will get better coverage.

I know we will not get 100 percent, we do not have 100-percent con-
trol over dynamite or anything else that has ever been used as an
energy source. But when I think of the magnitude of what can happen
with some of this stuff getting out, I know we need to come as close
to this as we possibly can.

What does anyone have to comment on with regard to the Indian
situation? Do we need an upgrading of our monitoring situation of
where this nuclear material is going, or of the approval procedure
before it gets out ?



81

The statement you read originally, it is very impressive — I do not
say that very facetiously — that everybody is getting cut in the pattern.
Yet we find things like this going on.

Do we need somebody put into that pattern, or somebody cut out,
and why is this happening ?

Does anyone want to make a comment, or maybe this gets off into
the State Department field more than anything.

Yes, Mr. Page.

Mr. Page. Senator Glenn, I have no direct knowledge of interna-
tional location of plutonium, but in the United States we have very
tight controls over the transfer of material throughout the country.

We do have a nuclear materials information system that records
all transactions, involving as much as one gram of plutonium, or one
gram of uranium-235. Whenever there is a transfer of this material
occurring between any two persons, a report of that transaction has
to be sent in to us. So we do have a good record of the location of all
plutonium and high- and low-enriched uranium in this country.

Mr. Hotle. I would have to say the situation would be quite sim-
ilar with regard to the location of plutonium abroad. Any transfers
are documented and recorded, and these transactions are then checked
by actual physical inventory from time to time, as in a bank audit.

We would all be living in a fool's paradise if we were to be com-
placent and not realize we are in an evolutionary situation, but we
should remember that we are asking those abroad, who signed these
agreements, to invest some $500 million in each thousand-megawatt
nuclear power plant they buy.

They have to have assurance of continuity of supply. If, because we
may feel they might be in a position to divert at some time, we shut
off their fuel supply one time and then turn it on again, when some-
thing changes, I think the United States will soon be out of the
international nuclear power business, and we will have handed this
business to other nations.

Dr. Friedman. I would like to make this one comment. I think one
of the problems we need to recognize is that we no longer are, and
as time progresses, our role is even more significantly diminished,
we no longer are the unique repository of all of the nuclear tech-
nology and material, and whatever we do, and obviously we need to
do more, but whatever we do, it has to be done, to whatever extent
possible, in consort with other supplier countries, so that we do not
end up being so careful that we have a negative effect in that other
supplier of countries, who may not be as careful, then replace us,
and we are in a worse situation, so I think we need to not only pro-
ceed ourselves to improve our procedures, but we must work with
our friends.

Senator Glenn. You are saying if we want to have a maximum
impact on safeguards, we better be a part of the action?

Dr. Friedman. Conceivably, if we were to be the sole supplier,
we would have the best control, but we are not.

Senator Glenn. I would agree with you. We are getting into an
area too — and maybe this would be in your area to comment on — I
think what concerns us, I think it concerns me, we have learned over
the years to sort of live with the big powers, having a mutual bal-



82

ance of nuclear power, and I think we may not agree with the political
philosophy of our major opponent, but I think we have developed a
respect that they will not use this in just a wild moment of some
international situation.

I do not think we have that same feeling about some of the smaller
nations of the world that are now becoming technologically capable
with a nuclear plant being purchased by them; that have become
capable of building a bomb. The question is whether some of the
smaller nations, in a moment of stress, might be less responsible than
some of the big powers. This gives me a lot of pause, when I think
of some of the smaller nations around the world getting atomic weap-
onry. Maybe strengthening IAEA is the only answer to it, or just
restricting flow of material may be the only answer.

I know this must concern you people of the State Department. Do
you have any comments on this? Can we apply different standards to
big powers, little powers, I guess that would be difficult.

How do we deal with some of the places that are getting atomic
weaponry, that are maybe a little less organized socially, and less
responsible internationally, than perhaps we would like to see? Are
there any different standards that we apply ?

We already determined that we have different standards applied
to licensing internationally and domestically. In our own country, as
applied internationally, are there different standards that are applied,
that come into play under some different agency setup ?

Mr. Hotle. I would highly endorse your statement that we should
work to strengthen the Agency, as others have said.

I think before we wash it down the drain, we ought to think care-
fully about the options. In my view, working within the IAEA to
strengthen its safeguards is the only way we have to go.

Now, with regard to the question of such strengthening, and par-
ticularly as we may have concerns over certain special situations in
sensitive areas of the world, our policy in this area is continually
evolving. Our agreements for cooperation are currently under review
to see what can be done along these lines — along the lines, for exam-
ple, that some of the earlier witnesses have suggested with regard to
where the strategic nuclear material is reprocessed and stored, and
these sorts of things. I hope that during the course of these hearings,
as they continue, we will be able to convince you that we are trying
to keep pace with this rapidly evolving situation.

Senator Glenn. We play such an important role, we supply, as I
understand, some 90 percent of the enriched fuel for the world, so
what happens around the world will be largely of our making, or at
least of our control, to a pretty good size and extent.

We will be in that position for another 5 years or so. Beyond that
point, maybe it proliferates beyond anyone's control.

Dr. Friedman. One of the problems is production of plutonium
which is even greater in those reactors that do not take enriched fuel,
those reactors that take natural fuel, we do not supply those reactors,
so again we get back to my problem of not trying to solve the prob-
lem unilaterally, but trying to work with all suppliers.

Senator Glenn. It is getting late. We have gone some 40 minutes
past the time we told everybody we would be finished today.



83



We did have a couple of votes that interfered, and I am sorry we
have gone this long over, and we may want to submit questions to
each of you for the record, so that we will have that as part of the
record to be considered by the Whole Committee.

Just in closing, I would like to ask each one of you if there is one
thing each of you could do, or one thing we could pass today, that
might help us in this particular area, and overall, number one, an
overall control of plutonium flow around the world. What would it
be to keep things in place in each plant? And then the second area,
interagency organization as you consider approval procedures, and
the processes with which you are all more familiar than I am, if we
could improve that whole setup to give us additional protection, are
there any one or two things you would want to suggest?

If you would want to comment across the table, fine. I would like
to have a comment from each one of you for the record, as to what
you think would be the most important single thing we could do in
each of those areas.

Mr. Bengelsdorf. Senator, we are here more or less as a fact-
providing group.

Senator Glenn. We will consider this as one of the facts we want
to know.

Mr. Bengelsdorf. I think one would be stupid to be complacent in
the current situation that we face. I personally feel that in the ulti-
mate analysis, you are appealing to other sovereign nations to fore-
swear nuclear weapons, and consequently, I tend to give first priority
with all of its imperfection to strengthen the international approach
through the IAEA. Moreover as General Giller mentioned, our ef-
forts towards improving physical security, worldwide, which is much
on your mind, as a threat, is one that we are approaching through
cooperation and persuasion. We, for example, are not seeking to im-
pose norms on others through fiat but rather are endeavoring to bring
them along collectively, through persuasion. You will recall, for ex-
ample, that the Secretary at the United Nations threw out the concept
of an international convention in physical security area.

Now, this is the kind of thing that is very much on our mind, when
we try to formulate our judgments on this bill.

In other words, I do not perceive any disagreements in term of
objectives, but possibly some hesitances as to techniques.

I personally favor the international and multilateral approach.

Senator Glenn. Don't limit yourself to this bill. If you want to
apply some of your comments to this bill, great, but I was thinking
more across the board.

If each one of you would use the microphone, I think some of the
people in the back are having a problem hearing.

Mr. Hoyle. Speaking personally, I would be perhaps more specific
in my suggestion than Mr. Bengelsdorf, and I would urge increased
funding for the safeguards effort, especially that specifically desig-
nated for the IAEA's safeguard system.

The Agency is living on a limited budget in a period of inflation,
just as we are personally, and increased safeguards efforts funded
from the General Budget reduce other types of available assistance,
which often makes developing countries justifiably unhappy. I feel



84

that increased, specific safeguards, funding is a very practical step
we can take to strengthen and expand the efforts of the Agency.

Mr. Meyer. I would prefer not to comment on the bill. I have
been out of town. I have not read it.

I will address my comment to the procedure for interagency con-
sultation, and I would make the general observation that procedures
are generally devices to handle certain problems, devices employed
in certain context. In a moving situation such as the one we are
dealing with today, the context changes, and procedures have to be
kept up to date.

I have no problem with the notion that we should be taking an-
other look at our interagency clearance and consultation procedures,
to be sure that Ave are identifying the important commodities, and
we are making the necessary judgments.

General Giller. I have two observations that do not address the
bill directly. I personally find this general subject is probably one
of the most complex, interactive, and with the least amount of true
information available that I have ever run into in my Federal career.

I think one of the biggest problems is that it requires a true under-
standing of the international world, and the interactive aspects of
the United States with that world, not just nuclear. Because it is part
of it, it tends to be understood before one even thinks about a mech-
anism for the executive branch and the Congress to handle it.

I think it is rather important to understand more of the basics of
the problems we have. Then we must adapt to the pragmatic world,
and do the best we can, with the expectation that it will in fact im-
prove the situation.

Senator Glenn. If you were sitting in my seat, and had to go back
to your office this afternoon, and write something out to help make
this situation right, are there suggestions you would have ?

General Giller. I think that I would try very hard to get on the
record, and we will try to help you with our following testimony,
what is the real world situation. This requires lots of statistics and
their interaction, and that is not easy to do.

Dr. Friedman. I think I gave the thrust of my main concern, and
that is that whatever we do, we try not to do without recognizing the
role that other supplier countries need to play.

I just ran quick count, and there are some 75 power reactors, either
in operation, or construction, on order throughout the world, which
are not being supplied by U.S. companies, or by U.S. technology,
completely independent of the United States.

There are 75 nuclear power reactors throughout the world, over
which we have no say, so we have to take the approach that we have
to work with these other countries that build power reactors that
supply material to share our concern, and to work with us in develop-
ing improved techniques.

Mr. Page. Senator, I have nothing to add, beyond what has already
been said by the other panel members.

Mr. Larson. I do not have anything either. As a new organization,
we are certainly attempting to determine our interfaces with the
other agencies, and with other organizations, and so I would think
we both have the same objective, that is, to find out what is the



85

function to be performed, and in trying to determine how to carry
out our role.

Senator Glenn. Let me say in closing, I appreciate very much
your forthrightness, and your straightforwardness, and we will be
submitting more questions to you, or maybe we will submit them to
the agencies, particularly in regard to the possible Indian plutonium
violation, the shipments to South Africa, and the computer setup.
They all bring up questions regarding different aspects of approval.

I think we are fortunate to have a group like this here this morn-
ing before the committee.

I think in trying to regulate the whole nuclear field, and get it
under control, you gentlemen here this morning probably represent
the most experienced people in the world with respect to regulatory
control. We do appreciate very much your efforts here, and we will be
contacting you with other questions on this, to be submitted for the
record, as we get into these considerations. I appreciate very much
your being here this morning.

The committee stands in recess.

[Whereupon, the committee was recessed at 1 :45 p.m.]



THE EXPORT REORGANIZATION ACT— 1975



WEDNESDAY, APRIL 30, 1975

U.S. Senate,
Committee on Government Operations,

Washington, D.C.

The committee met, pursuant to recess, at 10 a.m., in room 3302,
Dirksen Building, Senator John Glenn, presiding.

Present : Senators Ribicoff, Glenn, and Percy.

Staff members present: Dick Wegman, chief counsel and staff di-
rector; Paul Leventhal, counsel; Marilyn Harris, chief clerk; and
Pat Donat, clerical assistant.

Senator Glenn. The committee will come to order. We are very
glad to welcome some of the expert agency witnesses here today to
follow the testimony that we had last week. I think that we had a
very fruitful session last week, and we are glad to continue these
hearings today.

As far as the order today in which we will take up the testimony
of the various witnesses, we thought we would start with Mr. William
Anders, Chairman of the Xuclear Regulatory Commission, and then
have the executive branch as a panel, that is. Dr. Dixie Lee Ray,
Assistant Secretary of State for Oceans, International Environmental