and dangerous facilities, the international agency shall comply with the provisions of the treaty or convention which will provide that the agency shall take into account the quantity and quality of materials in each case, the possibility of diversion, the ease with which the materials can be used or converted to produce atomic weapons, the total supply and distribution of such materials in existence, the design and operating characteristics of the facilities involved, the ease of altering those facilities, possible combinations with other facilities, scientific and technical advances which have been made, and the degree to which the agency has achieved security in the control of atomic energy. All facilities not falling in the category of being dangerous as defined above will be referred to in this text as non-dangerous.

(f) Research and Development. The foregoing consideration is one of the arguments in favour of giving the agency the power to conduct research and development work. Another argument is the necessity of knowing whether regeneration is possible, since this is a factor upon which the evaluation of world resources and, consequently, the whole field of peaceful application, largely depend. It is also necessary that the agency should know to what extent the use of denatured fuels would affect the possibility of utilizing atomic energy, both from the economic and from the practical point of view. Although it is considered that most of the research and the facilities in which it is conducted will be classified as non-dangerous, it is essential that the agency should have scientific knowledge of all matters relating to atomic energy. These are merely examples of the arguments in support of the generally acknowledged thesis that the agency, in order to give security and to perform its task, must have full knowledge, not only of the results achieved but also (since the subject is perpetually developing) of all innovations as they occur. It must be able to recognize all clandestine operations, even though these may be of a new and unfamiliar character.

It is considered, however, that it would be detrimental to all concerned (and to the agency itself) if private or national work on research and development should stop. The principle is, therefore, proposed that national research and development activities should be limited in scope only insofar as is necessary for reasons of security.

It is by no means considered that the agency should hamper individual or national research, but rather that its policy should be to encourage such research. It will appear that, in the field of useful application, there would be nothing in the proposals that would prevent work on problems of a national character, except, however, that nations or individuals should be forbidden to use nuclear fuel for the perfecting, production or assembly of any atomic weapon whatsoever, and should be forbidden to use dangerous quantities of nuclear

fuel; all use of nuclear fuel in non-dangerous quantities should be subject to proper safeguards when necessary.

(g) Ownership. In the following chapters, the expression "ownership by the international agency" is frequently used with reference to source materials, nuclear fuels, and dangerous facilities. It is important to understand the reasons which have led to the conclusion that "ownership" should be vested in the international agency in respect to materials and certain facilities and to understand the sense in which this expression is used.

The First Report contained an examination of the controls necessary at the separate stages of production and use of atomic energy and left the co-ordination of controls and the general requirements of international security for subsequent study. Such study has established the necessity for international control and allocation of the quantities and locations of uranium and thorium which are to be separated from their place in nature, the time and place of the further processing and purification of source materials, and the size, use, and disposition of working stocks and stocks in transit. Without such comprehensive international control of the flow of source materials from the first point where they are capable of being diverted, there would be a serious risk of the diversion of source material or of the accumulation of stocks with a view to subsequent diversion or seizure. The basic policies and provisions governing the exercise of this international control and direction must be specified in the treaty or convention and implemented by the international agency. To administer these controls effectively, the international agency, acting as trustee for all the signatory nations jointly in accordance with the policies set forth in the treaty or convention, must be given indisputable control of the source materials promptly after their separation from their natural deposits.

If ownership of source material, after separation from its place of deposit in nature, were to remain with the nation, it might be left open to doubt as to whose decision would prevail in regard to the disposition of this material. International security requires that there be no doubt that, within the terms of the treaty or convention, the right of decision in these matters must lie with the international agency.

It has, therefore, been decided that ownership of source material must not be vested in the nation or any individual under the terms of the treaty or convention. No nation or person would, therefore, be able lawfully to possess or dispose of source material after it had been mined. The mere possession or movement of any such material without the consent of the agency would be unambiguous evidence of violation of the treaty or convention.

With regard to nuclear fuel and to facilities producing or utilizing nuclear fuel, it is proposed that, in the interests of international security, the treaty or convention and the agency, in implementing the terms of the treaty or convention, must determine the number of facilities to be established in each nation and the agency must manage their operation. On the other hand, since nuclear fuel and all such facilities would necessarily have to be located on some national territory, the question arises whether international security would permit that nations should have any proprietary rights or right of decision arising therefrom with regard to nuclear fuel or to the facilities located on their territory. If national or private ownership were permitted, it might be argued that the nations might lay a claim to source material, nuclear fuel, or dangerous facilities located on their territory in such a way as to endanger international security. It was, therefore, concluded that it is necessary for the international agency to have, in addition to those duties of management as defined in the First Report, the duty to make and to carry out decisions in implementation of the quotas, provisions, and principles set up in the treaty or convention, regarding the production, distribution, and stockpiling of nuclear fuel and the distribution and utilization of dangerous facilities involving nuclear fuel. This duty to make decisions will be exercised in accordance with the principles embodied in the treaty or convention. If national or private ownership were permitted, it would lead to controversy and make it impossible for the agency, in accordance with quotas, provisions, and principles set up in the treaty or convention, to exercise sufficient control to ensure security. It was, therefore, concluded that nations or persons should not own source material, nuclear fuel, or dangerous facilities.

If ownership of these materials and facilities is to be denied to nations or persons under the terms of the treaty or convention, it might seem to follow that such ownership must of necessity be attributed to the agency. On the other hand, the agency will be very closely controlled by the terms of the treaty or convention precisely in respect to those decisions which normally go with ownership, namely, the rights of disposition. This fact might be expressed by saying that the agency would hold all dangerous materials and facilities in trust for the signatory states and would be responsible for ensuring that the provisions of the treaty or convention in regard to their disposition are executed. It is in this sense that the phrase "ownership by the agency" is to be understood in what follows. There can, of course, be no question that any nation or person has any right in any circumstances to dispose of or to possess these materials or facilities.

It will be seen from the chapters which follow that ownership by the agency of source materials or nuclear fuels includes the exclusive

right to move or lease the materials, the right to use and to produce energy from them, and the same rights for all products formed from them. Ownership also includes the principle that no disposition of material can be made without the permission of the agency. It is proposed that the agency should acquire ownership, for a price to be agreed, of source material from the time it is removed from its place of deposit in nature or, in case of source material containing other important constituents, from the time those constituents have been extracted. The agency will not be permitted to sell these materials but could lease them for authorized uses.

Likewise, ownership by the agency of dangerous facilities includes the right of the agency to make decisions regarding their allocation. construction, and operation, within the terms of the treaty or convention. The useful and non-dangerous products of these plants would be made available to the nations under fair and equitable arrangements. The location and type within a nation will be decided by agreement with the nation concerned. Ownership by the agency of facilities within a nation includes rights of possession, operation, and disposition subject to the terms of the treaty or convention. The agency could not sell dangerous facilities. Ownership by the agency of a power plant would not include the right to shut down such a plant at will. Ownership does include the responsibility to operate facilities in such a way as not to endanger health and the responsibility for any damage.

While vesting ownership in the agency, in the sense of a trust exercised on behalf of signatory states jointly, in order that the agency should have the final right of decision in regard to the disposition of source materials, nuclear fuels, and the operation of dangerous facilities, it was also realized that the nations could not be expected to agree to give unlimited discretionary powers to an international agency. The following chapters, therefore, set out in detail the provisions which are to govern the location, mining, production, distribution, and use of source material and nuclear fuel, as well as dangerous facilities. It would then be the duty and responsibility of the international agency to implement these provisions in accordance with the terms of the treaty or convention.

These chapters, coupled with the First Report, give an outline of the major provisions from the point of view of security that must be incorporated in a plan for the control of atomic energy. It is recognized, however, that the treaty or convention which would put such a system of control into effect cannot cover all the situations that might arise between the signatory states and the agency. It must be stated at this time that, whatever legal issues might arise in this connection, nations cannot have any proprietary rights or rights

of decision arising therefrom over source materials, nuclear fuels, or dangerous facilities located within their territory.

(h) Clandestine Activities. The study of the problem of security in the light of the additional considerations described at the beginning of this chapter does not affect the problem of the detection of clandestine activities. The measures provided for in the following chapters, therefore, represent only an elaboration of those recommended in the. First Report. The purpose of these measures is to give the agency the duties and the powers in order to deter nations which might be tempted to conduct clandestine operations, to seek out and to detect such clandestine activities if a nation were to conduct them, and to dispel suspicions and false accusations.

It is obvious that no feeling of security could be established in the world if nations could reserve the right to prohibit access to certain parts of their territory. Nevertheless, it is also impracticable to subject the whole of the territories of the contracting nations to detailed inspection for, apart from the obvious political disadvantages, no international agency could ever be in a position to fulfil such a task. Thus, the exercise of the right, which the international agency must possess, of determining on the spot whether a nation is conducting clandestine preparations for atomic warfare, would be subject to various procedures, according to the nature of the territory or the building inspected, and these procedures would be designed to guarantee nations and individuals against abuses on the part of the agency and to conform, as far as possible, with national legal procedures.

It is recognized that these procedures will have to be considered from a juridical standpoint in order that they might be defined in legal terms capable of juridical interpretation, it being understood that the substance of the proposals should not be altered.

Chapter 2: Research and Development Activities

General Considerations

The First Report of the Atomic Energy Commission to the Security Council made the following recommendations with respect to research and development functions:

"The international control agency shall promote among all nations the exchange of basic scientific information on atomic energy for peaceful ends, and shall be responsible for preventing the use of atomic energy for destructive purposes, and for the control of atomic energy to the extent necessary to ensure its use only for peaceful purposes.