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Resources

Key documents

• Full case study (PDF, 1.5mb)
• VERIFOR Briefing Paper 1 - Designing Verification Systems for the Timber Trade: Learning from International Processes (PDF, 621kb)

The production and use of nuclear materials is an area of global concern, and the exercise of nuclear safeguards on behalf of the international community provides a particularly interesting example of the evolution of a verification system in the world of realpolitik .This case study has been prepared by Andreas Persbo, nuclear arms control and disarmament researcher, and his colleagues at the Verification Research, Training and Information Centre (VERTIC) in London.

Overview - comparison with the forest sector

Similarities

• Both have significant externalities and public goods values, internationally and nationally.
• Both industries have strategic importance and relevance to wider agendas concerning national development policy and paths to industrialisation
• Capacity to mobilise the international governance constituency is high in both.
• Capacity to mobilise civil society, nationally and internationally is high.
• Political divisions exist within the policy and economic community, with impacts on the potential for concerted international action

Differences

• Forest products are not hazardous, and do not have sensitive security dimensions; this affects the perceived importance of verification and the political will to put a verification system in place.
• Forest products have a much broader profile of legitimate uses.
• Public access rights are a central issue in forest governance which do not arise in the case of nuclear safeguards.
• Forest products are generally easier to trace than nuclear materials, though less amenable to high-tech tracing methods.
• The industries have different profiles and levels of penetration by the state.
• Trade in forest products is difficult to centralise, in sharp contrast with the nuclear industry.
• The forest sector lacks a binding international agreement (with implications for the capacity for coordinated international action).
• Geo-political factors and their influence on the capacity for effective verification.
• The role of international fora in standard setting, information sharing and policing/compliance.
• The clear boundaries in the nuclear case between monitoring, verification and compliance.
• The complexity of the verification process, and the broad participation in verification decisions, enhancing their legitimacy and international authority.
• Inspection: standard setting and selection of inspectors; distribution of inspection skills; the politics of regulating the inspectorate.

Points to Note

• Geo-political factors and their influence on the capacity for effective verification.
• The role of international fora in standard setting, information sharing and policing/compliance.
• The clear boundaries in the nuclear case between monitoring, verification and compliance.
• The complexity of the verification process, and the broad participation in verification decisions, enhancing their legitimacy and international authority.
• Inspection: standard setting and selection of inspectors; distribution of inspection skills; the politics of regulating the inspectorate.

The nature of the commodity and the industry
The radioactive materials considered in this case study share with timber and forest products a high capacity to mobilise significant international concern. Both have important global public goods values but are managed by sovereign states which fiercely protect them as national and strategic assets. However they also differ in a number of ways, and their similarities and differences reflect the various political interests that coalesce around the commodities. They also define the possibilities for the establishment of effective verification regimes.

For example, nuclear materials are likely to be subject to tight controls by government because of their dangerous nature. Their use tends to be highly regulated and supervised, and there is universal acceptance that their handling and storage carries risks to health, the environment and security among others:

• Health - Close contact with radioactive substances, even over short periods, can severely damage human health by leading to cancers and other life-threatening ailments. Negative health effects are experienced fairly indiscriminately within a contamination zone, while contamination cannot easily be confined.
• Environment - Nuclear materials are dangerous to the living environment and are often extremely slow to degrade, making safe disposal and storage a continuing challenge.
• Security - Similar materials and processes are used in both peaceful applications of nuclear technology (in the energy and health sectors) and the creation of weapons of mass destruction, but their mere existence in one state - for whatever purpose - may provoke hostile intent in its neighbours.

The quantities involved are often extremely small (see Annex 1 of the case study), but technological advances allow high traceability. Even if a government attempts to eradicate all traces of nuclear materials, seeking to conceal their use, (as Iran is alleged to have recently done at two sites in Tehran), it often proves possible to detect microscopic levels of residual material. In VERTIC's language, 'a non-compliance footprint is difficult to cover up' (Woodward, pers. com ). It is also sometimes possible (though this may be more conjectural) to ascertain whether their use is for peaceful or non-peaceful purposes.

The nuclear industry is a hi-tech one, and this affects both the pattern of investment and the skills-base of its workers. It is a highly capital-intensive industry and its workers are predominantly highly skilled in a field where expertise is in short supply. The employment effects of the decision to develop a nuclear-based industry are thus significant but localised. At the same time, the operation of that industry will be (on the grounds indicated above) conditioned closely by the interests of the state; it is unlikely to develop through entrepreneurship alone, and will function in a highly centralised way.

Governance Issues
The nature of the commodity explains the high levels of international interest which it generates and also, to a large extent, the considerable degree of voluntarism on the part of states to control its deployment. The ability to mobilise an international constituency around powerful sentiments of peace and security may be an important factor driving the verification regime. A similar pressure is noted by Pasteur (1999 ) in relation to the force of 'democracy' to galvanise support for international election monitoring. At the same time, the limits to voluntarism in the nuclear sector are evident: this is an industry with major strategic aspects and there are numerous reasons for states to avoid excessive transparency over its functioning. This is particularly the case with 'states of concern', but the point is evidently much more general. Witness the case of Europe reviewed in the report (See paragraph 1.1.1 of the case study).

The existence of a strong international authority (in this case, the IAEA) is obviously highly conducive to verification. The same is true of international conventions, as with the 1968 Nuclear Non-Proliferation Treaty and subordinate legal arrangements, such as the Comprehensive Safeguards Agreement (see section 1.3 of the case study). Logically, international agreements which are fully reciprocal are likely to be the most conducive to effective verification. This is not the case in the present instance, and there is a major division of interest between the five nuclear weapons states and the non-nuclear weapon states. It is apparent from the case study that these divisions are deeply problematic. The same can be said of the divisiveness of the independent strategy adopted by the European member states (Section 1.1.1). But the extent of cooperation over the IAEA verification regime is still quite impressive. Sanctions, both positive and negative, may be involved here. On the positive side, reputational factors seem important (recognition as a 'responsible state' on the international stage), as do the technical benefits to the health and energy sectors which are gained from IAEA cooperation. Negative pressures include the possibility of recourse to the UN Security Council, and the ultimate threat of UN sanctions .

There are some interesting issues surrounding the wider geo-political factors which affect the international response to nuclear verification activities, and particularly non-compliance. The status of countries such as Israel, relations between India and Pakistan, and the current situation in Iraq and Iran are cases in point. These issues clearly have ramifications reaching far beyond our forest sector interest, but they are also an important reminder of the fact that verification activities can feature as an aspect of foreign policy, both in the states under verification and in the wider international community.

The Verification Regime
The underlying interests of the IAEA in two areas - ensuring the use of atomic energy only for peaceful purposes and protecting complying states against violations (see Section 1) - are not, as the study notes, equally covered by the existing verification regime. The present regime does not address the intentions of states, but it should be noted that this is difficult, arguably impossible, to achieve within the diplomatic framework of nuclear verification (see Section 5, and also Blix, 1997). Such issues have to be left to NGOs operating outside of the inter-governmental framework.

The complex reporting arrangements are a notable feature of the system, providing a structured way to handle the use of declarations/verification as a means of assessing compliance. The high level of international involvement in setting standards, through the IAEA Board and other means, is also noteworthy, as is the value of information sharing on an international scale to build confidence. The reporting requirements provide one possible means to convert voluntarism into obligation, overcoming the problem of the possible incompatibility of voluntarism and 'actionable non-compliance' (Woodward, pers. com ). The increasing use of unannounced inspections is of interest in the present context. On the budgetary side, the costs of the IAEA verification regime are notable (Section 3.2). Verification is clearly a costly affair, both for the authorities and participating states.

Inspection and Inspectors
Skills are very unevenly shared in the nuclear industry, and this appears to skew the verification regime towards the interests of the post-industrial north. Similarly, where 'national technical means' are an important source of data this is likely to privilege the same class of countries, particularly the USA.

Blix's review of his experience with UNMOVIC in Iraq throws interesting light on the way in which issues of selection and finance affect the credibility of inspectors and their ability to operate impartially and be seen to do so. UNSCOM was dependent on the secondment of inspectors by member states (the seconding state paid the salary of the inspector), which offered the advantage of freeing the agency from the UN employment quota system and the demand for geographical balance, but also undermined the credibility of the inspectors in the field. Blix writes:

"The arrangement made the operation of the system very dependent on those member states that were willing to contribute intelligence, staff and other resources. This gave UNSCOM many excellent staff members and some important intelligence, but also a dependence, chiefly on the US and a few other countries. In the longer run, this seriously reduced the commission's intended UN legitimacy, and it came to be seen as largely remote-controlled by a few states." (2005:p.21)

As a result, under the UNSCOM successor system, UNMOVIC, all staff were put on UN contracts and renumerated by it. They were trained by the agency, and owed their allegiances to the UN system not their sponsoring governments.

Contrasts with the Forest Sector
The nuclear safeguards regime offers a number of pointers as to how verification might be developed for the forest sector. Of particular interest is the high level of international involvement both in setting standards and in handling compliance issues. Clear boundaries are drawn between monitoring, verification and compliance, and this separation of functions plays an important role in mitigating potential conflicts and sensitivities. Likewise, the impartial selection of inspectors and the clear definition of their mandates may be useful principles to apply in the forest sector. Both nuclear materials and timber have important global public goods aspects which justify international concern and some degree of intervention in the sector. The geopolitical interests which are so important in nuclear control are limited but not absent in the forest sector, particularly where forest governance functions to improve the overall quality of national governance, from what is often a fairly low threshold in forest-rich states.

However one must bear in mind the many differences between the commodities and the associated implications for international cooperation (including on the financial side), as well as data generation and information sharing. Timber and forest products are not hazardous in the way that radioactive materials are, and do not generate the same level of mutual concern and obligation. They have less potential to serve illegitimate purposes. At the same time they have much broader legitimate functions, are often accessible to the public at large, and are less subject to centralised control of trade or domestic use.

Surprisingly, although timber is a much bulkier commodity than nuclear material it may be easier for an unscrupulous operator to dispose of illegally, unless highly sophisticated technologies have been employed to trace it. As a commodity, it is also much more differentiated (at least in relation to traceability). Recent advances in timber tracking, using digital methods and computerisation, may bring the technological capability for detection up to the level of nuclear verification, but it is unlikely that there will be the same social and political pressures for diligence in handling. The timber industry is a far less technically sophisticated one than the nuclear industry, though arguably more variable in its standards. Nor does it demand the same level of subordination of private sector interests to state agendas - indeed, the reverse is possibly more typical. Timber trade is uncentralised, and there are strong pressures for it to remain so. The range of potential buyers is much greater and more geographically dispersed.

Without the benefit of a high level international agreement, and the threat of some punitive international standards, it is unlikely that timber verification can induce the same pressures towards compliance that are a feature of the present case. The lack of a binding international agreement is associated with a number of further omissions. These include:

• The lack of an international forum to set standards and exert authority over the sector;
• The lack of an authority - an institution answerable to the member states, to express their will and monitor implementation of agreements;
• The absence of a funding mechanism to provide systematic and generalised incentives for compliance;
• The absence of a principle of reciprocity, to increase the sense of fair play and the willingness of parties to conform.

We can speculate about the degree to which, in the absence of an international agreement (and the improbability of a binding global agreement being reached in the foreseeable future), forest-sector verification is likely to have to rely on mutual trust. Trust is not the sole pressure for conformity over environmental matters. The Kyoto Protocol, for example, offers a 'complete economic system' and does not just rely on trust (MacFaul, pers.com ). However, the tropical timber trade generally lacks positive economic incentives of the types which Kyoto can offer, and industry measures (such as certification) have tended to segregate, even polarise, the timber industry (principally between temperate and tropical producers) to an extent which was not originally envisaged. The fact that the trade already generates large financial returns makes it a less promising candidate for systematic development assistance support than is the case with climate change.

Finally, forest sector verification is much more problematic from the perspective of poverty alleviation and pro-poor development than is the nuclear safeguards system. There are few such impacts in the latter case, at least in the short to medium term. The principle equity dimensions of the use of atomic energy are likely to be longer-term employment effects and differential access to beneficial technologies (for example, medical treatments). In security terms, nuclear energy is a classic defence-sector public good, from the effects of which, positive or negative, no category of the population can be excluded. Policing nuclear safeguards is therefore likely to be much more egalitarian in its effects than comparable measures in the timber industry.