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Distinguished guests, ladies and gentlemen

It is a great pleasure to be here at this regional conference on nuclear safeguards and security. Today has seen a stimulating discussion of key security issues, in particular the threat of nuclear terrorism. The world received a wake-up call earlier this year when the AQ Khan's proliferation network was laid bare. Khan's network was peddling the know-how and materials to make some of the most destructive weapons known. That some of his clients were states of proliferation concern was deeply troubling.

But of particular concern is the prospect that such networks could be exploited by terrorists and others to acquire the means of mass destruction. The revelations of the Khan network are a reminder that in the post September 11 world, there is no room for complacency. We must act decisively against the threat of nuclear proliferation.

I am pleased to say that Australia has been at the forefront of these efforts - through our commitment to the Proliferation Security Initiative...our participation in the coalition efforts to bring Saddam Hussein into compliance with no fewer than 17 UN Security Council resolution...and as a committed and active member of the multilateral arms control and disarmament treaties established over decades. These treaties remain the international community's first line of defence against the misuse of sensitive materials and technology.

In the nuclear realm the Nuclear Non-Proliferation Treaty (NPT) is central. A strong and effective NPT is essential to preventing the spread of nuclear weapons, progress towards nuclear disarmament, and a climate of confidence necessary for cooperation on peaceful uses of nuclear energy . Aside from North Korea, which purportedly has withdrawn from the NPT, all of us in the Asia-Pacific are NPT parties...a testament to the Treaty's place in the region's security architecture.

Regrettably, the NPT is under serious challenge. Libya's clandestine nuclear program, developed while an NPT party and subject to IAEA safeguards, confirmed that existing measures are insufficient to stop determined proliferators. That Libya has abandoned its ambitions in this area is a most welcome development. But we all fear that NPT parties could misuse the Treaty's nuclear energy provisions to acquire the technical basis for a rapid breakout to nuclear weapons.

After two years of investigations concerns about Iran's NPT compliance and future nuclear intentions remain unresolved. Iran must do more to satisfy the legitimate expectations of the international community, notwithstanding having taken some steps to improve transparency and cooperation with the IAEA. But the Iran issue is not one of safeguards compliance alone. If Iran is to restore confidence it must suspend fully all uranium enrichment activities, including operation of the uranium conversion facility, as requested by the IAEA Board.

Of concurrent concern - particularly to our region - is North Korea's non-compliance with its NPT obligations, its announced withdrawal from the NPT and claims it has a nuclear deterrent. I reiterated Australia's strong concern about North Korea's nuclear weapons ambitions when I visited Pyongyang in August this year. North Korea must declare and dismantle its nuclear weapons programs if it is to grasp the opportunities on offer through the six-party talks and re-engage with the international community. We should be clear about what is at stake from these threats.

The NPT-based non-proliferation regime provides vital security benefits. But more than this, preventing nuclear proliferation is fundamental to the goal of nuclear disarmament. It is impossible to conceive of a world free of nuclear weapons without complete and permanent assurances of non-proliferation. For this reason, it is absolutely essential that the IAEA - and its members - stays the course and enforces its own rules. Anything less would give comfort to would-be proliferators.

This evening, I want to focus your attention on the threat from nuclear terrorism and to share some thoughts about what is and must be done to combat this threat.

The Problem

The threat of nuclear terrorism is not new, but it deserves greater attention now than it has received in the past. The form of terrorism the world now faces makes it more dangerous than ever before. The extremism driving this new terrorism is absolute. Wherever possible the aim of the terrorists is to inflict mass casualties and disruption. Attacks are indiscriminate and do not concentrate on military assets or even on symbolic or political figures - civilians are often the target.

These terrorists have international reach, are well organised and able to plan and carry out sophisticated operations. And many of their known leaders and operatives are highly educated, well funded, and well versed in technology. Against this background, it comes as no surprise that transnational terrorists are interested in weapons of mass destruction. We know terrorists have already tried to develop chemical, biological and radiological capability. We should have no doubt they would use these weapons - or even nuclear weapons - if they had them. Dr Potter and others have described the forms nuclear and radiological terrorism might take and the potential consequences. We can all visualise the terrible human costs if terrorists were to explode a nuclear weapon in a major city. Fortunately, this most frightening of scenarios is also the least probable.

But terrorists could more readily obtain radioactive material - such as the radioactive sources commonly used in medicine, science and industry - to produce a "dirty bomb" which could disperse radioactive contamination over a wide area. Nor can we dismiss the possibility of a terrorist attack on a nuclear facility. We know Khaled Sheikh Mohammed and Mohamed Atta considered including nuclear power plants on their target lists for the 9-11 attacks. Notwithstanding such threats, modern, well-designed and appropriately sited facilities incorporate a 'defence-in-depth' philosophy...for example, modern facilities are designed to withstand earthquakes and external impacts more destructive than any form of terrorist attack.

Unfortunately, we cannot safely assume that terrorist groups do not have - or could not acquire - the necessary materials to carry out an act of nuclear or radiological terrorism. To date the IAEA's Illicit Trafficking Database has recorded, since 1993, approximately 630 confirmed incidents involving illicit trafficking in nuclear and other radioactive materials. Weapons-usable nuclear material made up a small proportion of the incidents. In most cases, quantities involved were only a few percent of what would be needed for a nuclear weapon. But during the first half of the 1990s, quantities of a kilogram or more of stolen highly enriched uranium were also intercepted. Obviously these figures are of concern. But of even greater concern is what we might not be seeing. It is very difficult to determine how much trafficking in nuclear materials and sources is going undetected.

Certainly, we received an alarming insight into the extent of the nuclear black-market with exposure of the A Q Khan nuclear proliferation network. Khan was able to supply everything from the technology needed to produce fissile material for nuclear weapons... to nuclear weapon design information. The lessons from the Khan network go well beyond state-level proliferation. The existence of a sophisticated nuclear black-market, coupled with terrorist interest in weapons of mass destruction was a stark reminder...that unless we act firmly and in unity, terrorists could obtain a nuclear or radiological weapon with disastrous consequences.

In our region we have a particular interest in ensuring the highest standards of nuclear security. Of 26 nuclear power reactors currently under construction around the world 15 are located in India, Japan, the Republic of Korea, and China (including Taiwan).

But we should guard against any inclination to think of nuclear terrorism as an issue for some states and not for others. Nuclear technology is present today in almost all countries and it is our collective responsibility to ensure it is not misused.

The Current Situation

Australia is committed to promoting the highest international standards of nuclear security. Australia strongly supports universal application of the IAEA's strengthened nuclear safeguards system - the Additional Protocol. This would substantially raise the barriers to misuse of sensitive materials and technology by both state and non-state actors. In our view, next year's NPT Review Conference should confirm the strengthened safeguards system as the current standard under the NPT. Protection of nuclear facilities has generally been strong - but constant vigilance and effort is needed to ensure wide application of the highest standards against sabotage or theft.

Work to strengthen the Convention on the Physical Protection of Nuclear Material (CPPNM) should be finalized quickly. Those yet to adhere to this Convention, and other instruments which help protect against nuclear terrorism, should do so. Controlling radioactive sources is already an important public health and environmental priority. As an illustration, just one 'orphan source' in Brazil required significant decontamination of buildings and cost some US$20 million in clean up costs.

The risk of radiological terrorism heightens the urgency of securing vulnerable radioactive sources. The international standard for safe and secure use of sources was established in 2003 when the IAEA Code of Conduct on the Safety and Security of Radioactive Sources was adopted. Australia is implementing all the requirements of the Code. Our task now is to ensure the Code is universally applied. The Australian Nuclear Science and Technology Organization is working with regional countries to improve and strengthen regulatory controls and physical security on sources. Australia has set aside $4.4 million over three years to implement this program in South-East Asia and the Pacific.

We welcome the assistance that the IAEA and the US International Radiological Threat Reduction Program are providing in rendering sealed radioactive sources safe and secure, and in securing orphaned radioactive sources. The Australian Radiation Protection and Nuclear Safety Agency is working with our States and Territories to improve physical security and safe use of radioactive sources.

Multilaterally, Australia welcomed adoption of UN Security Council Resolution 1540 as a timely and appropriate response to the threat of terrorists acquiring weapons of mass destruction. Australia is ready and willing to work with your countries, and to provide what assistance we can, to promote implementation of UNSCR 1540 in the Asia-Pacific region. Early and full implementation will ensure the international community derives full benefit from this historic resolution.

As with other forms of terrorism, we need to work together to combat the risk of nuclear and radiological terrorism. We need to strengthen international cooperation - including through enhanced information-sharing and technical cooperation. Australia values the IAEA's strong contribution in this field...and was one of the first countries to contribute to the IAEA's Nuclear Security Fund established to support international efforts to address the threat of nuclear and radiological terrorism. We remain committed to that program.

The G8 Global Partnership Against Weapons and Materials of Mass Destruction is another group playing a major role in improving the security on fissile material in their case concentrating on Russia and other former Soviet Republics. Australia has contributed $10 million to the Global Partnership - specifically the Japan-Russia project for the dismantlement of decommissioned Russian nuclear submarines. We chose this project because of its direct relevance to our region.

The Outlook

There will be no easy solution or quick fix in tackling the threat of nuclear and radiological terrorism. Our approach must be sustained, comprehensive and cooperative. We must make full use of existing tools and develop new measures to close the gaps in nuclear counter-terrorism efforts.

In our region we should strive to exemplify best practice in the application of global standards...

...to implement and enforce strong national regulations including export controls…and collaborate at the regional and international levels to counter this threat.

The rapid development of the Proliferation Security Initiative has demonstrated the opportunities for new thinking on combating illicit trafficking in WMD-and missile-related items. The PSI Operational Experts Meeting will be held in Sydney later this year.

We hope to engage increasing numbers of Asia-Pacific countries in this endeavor, building on broad international support. Asia-Pacific countries may wish to consider whether there are ways to improve the sharing of experience on nuclear security and safeguards issues. One option could be to establish some form of regular regional consultations, perhaps initially on an informal basis, to facilitate best practice safeguards and security culture.

Conclusion

It is clear that national governments cannot deal with the threat of nuclear and radiological terrorism in isolation. Cooperation, including making full use of the advice and assistance available from the IAEA, is essential. For the present, nuclear and radiological terrorism remains less probable than conventional attacks. But it would be foolhardy in the extreme to assume terrorists are not seeking to develop or acquire unconventional weapons.

The reality is that potential consequences are so high that we must take this threat seriously...

...for failure to act in a decisive and unified manner...

...leaves open the possibility of an international disaster, on an unprecedented scale.

Australia stands ready to work with countries in this region to enhance regional efforts to combat nuclear and radiological terrorism and to share resources towards this end.

I encourage all countries to be committed to these goals.

Thank you.