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entitled 'Russian Nuclear Submarines: U.S. Participation in the Arctic 
Military Environmental Cooperation Program Needs Better Justification' 
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Report to Congressional Committees: 

September 2004: 

RUSSIAN NUCLEAR SUBMARINES: 

U.S. Participation in the Arctic Military Environmental Cooperation 
Program Needs Better Justification: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-924]: 

GAO Highlights: 

Highlights of GAO-04-924, a report to congressional committees

Why GAO Did This Study: 

Norway, Russia, the United Kingdom, and the United States participate 
in the Arctic Military Environmental Cooperation (AMEC) program, a 
multilateral effort that seeks to reduce the environmental impacts of 
Russia’s military activities through technology development projects. 
AMEC has primarily focused on Russia’s aging fleet of nuclear 
submarines. Section 324 of the National Defense Authorization Act for 
Fiscal Year 2004 required GAO to review AMEC, including its 
relationship to the Department of Defense’s (DOD) Cooperative Threat 
Reduction (CTR) program. In accordance with the act, GAO (1) assessed 
the extent to which AMEC supports and complements the CTR program, (2) 
identified AMEC member countries’ financial contributions to the 
program, (3) assessed AMEC’s future program objectives, and (4) 
evaluated DOD’s proposal to expand its technology development 
activities to Russia’s Pacific region.

What GAO Found: 

In a 1999 program plan to the Congress, DOD stated that AMEC projects 
would support the goals of the CTR program. However, we found that only 
one of eight AMEC projects designed to support CTR’s objective of 
dismantling Russia’s ballistic missile nuclear submarines has done so. 
This project involved development of a prototype 40-metric ton 
container to store and transport spent (used) nuclear fuel from 
Russia’s dismantled submarines. Despite AMEC’s limited contribution to 
CTR, DOD officials, including CTR representatives, said that most of 
the projects can be used to support dismantlement of other types of 
Russian nuclear submarines. In addition, U.S. and foreign officials 
cited other benefits of U.S. participation in AMEC, including promoting 
U.S. foreign policy objectives, particularly with Norway, and 
facilitating military-to-military cooperation with Russia. 

From 1996, when the program was established, to April 2004, AMEC member 
countries had contributed about $56 million to the program. The United 
States has been the largest contributor, providing about $31 million, 
or about 56 percent of the total. However, the overall U.S. 
contribution has decreased from fiscal year 1999 to fiscal year 2004 as 
U.S. funded projects have been completed and as other AMEC member 
countries have increased their assistance.

In May 2004, AMEC developed a draft strategic plan to guide its future 
efforts. The plan, which is currently being reviewed by AMEC partners, 
proposes improving the security of Russia’s nuclear submarine bases 
and securing spent nuclear fuel from dismantled submarines. However, 
securing bases could be contrary to U.S. policy, which preclude 
assistance to most operational Russian military sites that contain 
nuclear weapons, including certain naval facilities. 

DOD wants to expand its dismantlement technology development efforts 
to Russia’s Pacific region, but has not adequately analyzed the 
condition of Russia’s decommissioned nuclear submarines in the Pacific 
and their impact on the environment. Furthermore, DOD has not 
identified specific projects that would be needed beyond those already 
done in the Arctic region.

Decommissioned Russian Nuclear Submarines: 

[See PDF for image]

[End of figure]

What GAO Recommends: 

GAO recommends, among other things, that DOD determine whether AMEC 
activities should include improving security around Russian nuclear 
submarine bases, and whether DOD’s technology development efforts 
should be expanded to nuclear submarine dismantlement in Russia’s 
Pacific region. DOD concurred with all of our recommendations.

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

AMEC Projects Have Provided Limited Support for DOD's Cooperative 
Threat Reduction Program, but Projects May Be Useful for Other 
Purposes: 

AMEC Member Countries Have Contributed About $56 Million to the 
Program: 

AMEC Plans to Significantly Expand Its Role and Redirect Its Focus to 
Include Nuclear Security Issues: 

DOD Has Not Adequately Justified Its Proposed Initiative to Expand Its 
Technology Development to Submarine Dismantlement Activities into 
Russia's Pacific Region: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: List of AMEC Projects: 

Appendix II: Scope and Methodology: 

Appendix III: Comments from the Department of Defense: 

Table: 

Table 1: Status of AMEC Projects: 

Figures: 

Figure 1: Russian Submarine That Sank in 2003: 

Figure 2: Location of CTR Dismantlement Sites and Russia's Nuclear 
Submarines: 

Figure 3: AMEC-Designed Container Used to Store and Transport Spent 
Nuclear Fuel from Russia's Dismantled Nuclear Submarines: 

Figure 4: Interim Storage Pad: 

Figure 5: Steel Containers Used to Store Solid Radioactive Waste from 
Dismantled Submarines: 

Figure 6: Contributions of AMEC Member Countries, as of April 2004: 

Figure 7: U.S Agencies' Contributions to AMEC as of April 2004: 

Figure 8: U.S. AMEC Program Costs by Category: 

Figure 9: U.S. Funding Levels for AMEC, Fiscal Years 1997-2004: 

Abbreviations: 

AMEC: Arctic Military Environmental Cooperation Program: 

CTR: Cooperative Threat Reduction Program: 

DOD: Department of Defense: 

DOE: Department of Energy: 

EPA: Environmental Protection Agency: 

G-8: Group of Eight: 

Letter September 9, 2004: 

Congressional Committees: 

Prior to the collapse of the Soviet Union over a decade ago, little was 
known about the extent of contamination of the Arctic environment 
because of the secrecy of the former Soviet Union regarding its 
military activities in the area. However, in 1993, the Russian 
government released a report describing over three decades of Soviet-
era dumping of radioactive waste in the ocean as well as radioactive 
contamination from nuclear submarine accidents. As a result, 
radioactive contamination and environmental concerns generated by the 
former Soviet Union's military presence in the Arctic region received 
increased attention from the international community, including the 
United States. Among the greatest concerns are the handling and storage 
of radioactive waste and spent (used) nuclear fuel from Russia's fleet 
of 249 ballistic missile and general purpose nuclear 
submarines.[Footnote 1] This fleet includes at least 116 decommissioned 
nuclear submarines in the Arctic region and 76 decommissioned nuclear 
submarines in the Pacific region. Some of these decommissioned 
submarines are in poor condition, and one sank in 2003 off the coast of 
Norway as it was being towed to a shipyard in Russia for dismantlement. 
Figure 1 shows the submarine before it sank.

Figure 1: Russian Submarine That Sank in 2003: 

[See PDF for image]

[End of figure]

About 60 percent of Russia's decommissioned submarines still have spent 
nuclear fuel on board. Vast amounts of spent nuclear fuel--and liquid 
and solid radioactive waste from the submarines--are also being stored 
temporarily on special service ships and in coastal shipyards in 
Russia.[Footnote 2]

While many of Russia's aging nuclear submarines present environmental 
problems, ballistic missile submarines also present a military and 
nuclear proliferation threat. The United States has been working with 
Russia since the mid-1990s to dismantle decommissioned Russian 
ballistic missile nuclear submarines through the Department of 
Defense's (DOD) Cooperative Threat Reduction program (CTR). 
Administered by DOD's Defense Threat Reduction Agency, CTR funds the 
dismantlement of Russia's ballistic missile nuclear submarines to help 
Russia meet its commitments under arms reduction treaties with the 
United States. The United States does not consider Russia's general 
purpose nuclear submarines to be a military or nuclear proliferation 
threat and, consequently, does not fund their dismantlement.

As of March 2004, CTR had funded dismantlement of 27 Russian ballistic 
nuclear submarines, and CTR plans to partially dismantle up to an 
additional 15 submarines by 2013. Specifically, although CTR will 
continue to remove the spent fuel from the ballistic missile 
submarines' nuclear reactors, seal the reactors, and remove and 
eliminate the missile launcher compartments from all submarines that it 
dismantles, it will no longer fund the cutting up of the submarines' 
bows and sterns. DOD is turning over this part of the dismantlement 
process to Russia because, according to DOD, it does not directly 
contribute to threat reduction because the bows and sterns do not have 
a military value. CTR-funded dismantlement activities are taking place 
at four Russian shipyards--three in the Arctic region and one in the 
Pacific region.[Footnote 3]

Figure 2 shows the location of CTR dismantlement sites and Russia's 
nuclear submarines.

Figure 2: Location of CTR Dismantlement Sites and Russia's Nuclear 
Submarines: 

[See PDF for image]

Notes: Multiple nuclear submarines are located at the various sites.

CTR uses two additional shipyards in the vicinity of Severodvinsk for 
dismantlement purposes: Sevmash and Zvezdochka.

[End of figure]

To help reduce the environmental impacts of Russia's military 
activities in the Arctic region, the United States, Norway, and Russia 
established the Arctic Military Environmental Cooperation program 
(AMEC) in 1996. The United Kingdom joined AMEC in 2003. Norway 
initiated AMEC and requested that the United States participate in the 
program to address what Norway perceived as significant environmental 
problems located on its border with Russia. Norway is one of the 
world's leading seafood exporters and was concerned that these problems 
would adversely affect its fishing industry.

AMEC has implemented its program primarily by funding projects to 
develop technologies to support the dismantlement of Russia's nuclear 
submarines. AMEC has focused on projects such as storing and 
transporting radioactive waste from the submarines. The actual 
dismantlement of Russian submarines is being funded by a number of 
countries. In 2002, DOD requested congressional approval to expand its 
environmental technology development activities to Russia's Pacific 
region, but the Congress has not acted upon that request.

From AMEC's inception, U.S. participation has been hindered by the lack 
of liability protection.[Footnote 4] Without liability protection, the 
United States, its contractors, and their employees could be held 
financially responsible for an accident or incident that might occur 
while performing work on AMEC-funded projects in Russia. In the absence 
of liability protection for the AMEC program, the United States has, 
for the most part, tied its participation in AMEC projects to DOD's CTR 
program liability protocol: the CTR program has liability protection 
for all the work that it performs in Russia under an agreement signed 
in the early 1990s. In 1998, the Congress made $5 million available to 
AMEC from CTR funds and directed DOD to include within AMEC 
"cooperative activities on environmental matters in the Arctic region 
with the military departments and agencies of other countries, 
including the Russian Federation.": 

Eight AMEC projects were identified by DOD and U.S. AMEC program 
officials as designed to be complementary and supportive of CTR program 
objectives. These projects have formed the core of U.S. participation 
in the AMEC program. An additional 11 projects have been implemented 
since the program's inception to support other AMEC objectives. (For a 
complete list of all AMEC projects, underway and completed, see app. 
I.) In response to §327 (c), the National Defense Authorization Act for 
Fiscal Year 1999, DOD submitted a plan to the Congress which, among 
other things, addressed the relationship of AMEC projects to the CTR 
program.

Section 324 of the National Defense Authorization Act for Fiscal Year 
2004 required GAO to review AMEC, including the relationship of the 
program to DOD's CTR program. In accordance with the act, we (1) 
assessed the extent to which AMEC supports and complements the CTR 
program, (2) identified participating countries' financial 
contributions to AMEC, (3) assessed AMEC's future program objectives, 
and (4) evaluated DOD's proposal to expand its technology development 
activities to Russia's Pacific region.

To address these objectives, we obtained and analyzed AMEC program 
documents and met with AMEC members from Norway, Russia, the United 
Kingdom, and the United States. We also met with representatives from 
Japan to discuss their views about partnering with DOD on technology 
development activities in the Pacific. We obtained data on AMEC's 
mission, project implementation, and costs from DOD, the Department of 
Energy (DOE), the Department of State, and the Environmental Protection 
Agency (EPA). We also attended an AMEC meeting of the principals in 
April 2004 in Svalbard, Norway, at which high-level officials from each 
member country discussed program plans and project implementation. We 
also attended a separate meeting of AMEC technical representatives that 
focused on the development of a draft "strategic plan" to guide the 
program in the future. More details on our scope and methodology can be 
found in appendix II. We conducted our work from January through August 
2004 in accordance with generally accepted government auditing 
standards.

Results in Brief: 

In a 1999 program plan to the Congress, DOD stated that AMEC projects 
would support the objectives of DOD's Cooperative Threat Reduction 
program. However, we found that only one of eight AMEC projects 
established to support and complement CTR's program for the 
dismantlement of Russia's ballistic missile nuclear submarines has 
directly benefited the CTR program. The one project involved 
development of a prototype 40-metric ton container to store and 
transport spent nuclear fuel from Russia's dismantled submarines. CTR 
officials told us that the containers met an immediate need for 
adequate storage space for the spent nuclear fuel removed from the 
dismantled submarines. With regard to the other seven AMEC projects, we 
found the following: 

* One project, the development of a storage pad to hold the 40-metric 
ton nuclear fuel storage containers, was completed too late to support 
CTR's dismantlement efforts at a particular Russian shipyard. That 
shipyard had originally been designated as a dismantlement site for 
ballistic missile submarines, but by the time the pad was completed 
Russia had decided that it would no longer dismantle ballistic missile 
submarines at that site. This project cost about $2.9 million.

* Two projects, involving development of technology to prevent 
corrosion inside the storage containers and a mobile facility to treat 
liquid radioactive wastes from dismantled nuclear submarines, were 
either terminated or suspended. The first project, for which U.S. 
expenditures totaled $396,000, was terminated after CTR officials 
selected a U.S. contractor to develop the technology instead of working 
through AMEC. With regard to the second project, CTR determined that 
there was already adequate liquid radioactive waste treatment capacity 
at the facilities where submarines were being dismantled and therefore 
did not support the project. EPA, which managed the project, continues 
to hold about $700,000 in project funds that were transferred from the 
Department of the Navy several years ago.

* Two projects--developing treatment methods and steel storage 
containers for solid radioactive waste--were implemented at a mobile 
waste treatment facility located at a Russian shipyard where the CTR 
program is not dismantling Russian nuclear submarines. U.S. 
expenditures for these projects, including the waste treatment 
facility, totaled about $12 million.

* Finally, two projects--the development of a radiation detection 
system that will be used to protect the health and safety of workers 
who dismantle submarines and the provision of U.S. supplied dosimeters 
(radiation detection devices)--do not have a direct or immediate 
benefit to the CTR program. The radiation detection system, on which 
the United States spent $1.7 million, is being implemented at a site 
where Russia decided to stop dismantling ballistic submarines. The 
U.S.-supplied dosimeters project was described as a failure by the AMEC 
project manager because the dosimeters did not meet Russian technical 
specifications and were not used for a couple of years. In July 2004, 
Russia's representative to AMEC notified DOD that the dosimeters were 
now being used.

Despite AMEC's limited contribution to the CTR program, U.S. and 
foreign officials said that U.S. participation in AMEC has achieved 
other benefits. In their view, AMEC plays an important role in 
promoting U.S. foreign policy interests. In particular, U.S. officials, 
including the Ambassador to Norway, told us that the U.S. relationship 
with Norway has been strengthened through AMEC. Norwegian ministry of 
defense and foreign affairs representatives agreed with this view. 
Furthermore, while most AMEC projects do not support dismantlement of 
Russia's ballistic submarines, U.S. officials, including CTR 
representatives, said the projects are supporting dismantlement of 
other types of nuclear submarines.

AMEC member countries had contributed about $56 million to the program 
as of April 2004. The United States has been the largest contributor, 
providing about $31 million, or about 56 percent of the total, since 
the program was established in 1996. Other countries' contributions are 
as follows: Russia about $13 million; Norway about $12 million; and the 
United Kingdom about $100,000 since joining AMEC 1 year ago. DOD has 
provided over 90 percent of U.S. funds for AMEC. DOE and EPA have 
provided the remaining U.S. funds. U.S. contributions to AMEC have 
declined from 1999 to 2004 as U.S.-funded projects have been completed. 
According to U.S. officials, the United States plans to contribute 
about $3 million annually from fiscal year 2006 to fiscal year 2011, 
the latest date for which projections have been made.

In May 2004, AMEC developed a draft strategic plan, which is currently 
being reviewed by AMEC partners, that proposes improving security at 
Russia's nuclear submarine bases, including developing technologies 
that will help secure, among other things, spent nuclear fuel and 
radioactive waste from Russia's decommissioned and dismantled nuclear 
submarines. AMEC's draft plan raises several concerns because it 
proposes (1) expanding AMEC's mission, (2) securing operational 
military bases that have nuclear weapons, including naval facilities, 
and (3) securing spent nuclear fuel from Russian submarines. Improving 
the security of Russian military bases may be contrary to U.S. policy 
and securing spent nuclear fuel from Russian submarines, according to 
DOE officials, is a low priority as a proliferation or radiological 
dispersion device (dirty bomb) threat compared with other radioactive 
sources, such as abandoned electrical generators containing large 
amounts of strontium-90. DOE officials told us that, based on available 
data, spent fuel from Russian submarines does not present a 
sufficiently high risk from a security perspective to warrant the 
commitment of resources. Irrespective of AMEC's proposed plans, U.S. 
participation in AMEC faces an uncertain future because the United 
States lacks liability protection for AMEC projects in Russia. The 
Department of State is seeking a U.S. governmentwide solution regarding 
liability issues with Russia but the matter has not been resolved. 
Consequently, the United States was only participating in a few 
projects, including (1) improving the safe towing of decommissioned 
nuclear submarines and (2) improving the buoyancy of decommissioned 
nuclear submarines.

Although DOD would like to establish a program similar to AMEC for 
Russia's Pacific region, DOD has neither adequately analyzed the 
condition of Russia's submarines in the Pacific and their impact on the 
environment nor identified specific projects that would be needed 
beyond those already being done in the Arctic. Furthermore, Japan, 
which plans to dismantle more than 25 Russian nuclear submarines in the 
Pacific, has no current plans to join with the United States in a 
technology development program.

This report makes recommendations to the Secretary of Defense to 
determine, in consultation with the Secretaries of Energy and State, 
whether AMEC's role should be expanded to include improving security 
around Russian nuclear submarine bases and to help ensure that U.S. 
participation in AMEC is consistent with overall U.S. nuclear 
nonproliferation efforts in Russia. The report also recommends that the 
Secretary of Defense assess whether DOD should expand its submarine 
dismantlement technology efforts to Russia's Pacific region and, if so, 
determine what form U.S. participation in such efforts would take. 
Furthermore, we recommend that the Administrator, EPA, determine, in 
consultation with the Secretary of the Navy, if the funds designated 
for AMEC's liquid waste project are still needed. If not, we recommend 
that the Administrator and the Secretary determine whether to reprogram 
the funds or to propose rescinding the funds.

We provided draft copies of this report to the Departments of Defense 
and Energy and EPA for their review and comment. DOE had no comments 
and EPA provided technical comments, which we incorporated as 
appropriate. In its written comments, DOD concurred with all of our 
recommendations. However, DOD raised some concerns, including AMEC's 
role and relationship to the CTR program and AMEC's impact on 
multinational programs, such as the G-8 Global Partnership initiative. 
We have addressed these matters in our evaluation of agency comments.

Background: 

AMEC provides a forum for Norway, Russia, the United States, and the 
United Kingdom to collaborate in addressing military-related 
environmental concerns in the Arctic region. The AMEC Declaration and 
"Terms of Reference" established the framework and organization for 
sharing information and technology and implementing projects. The 
Declaration focuses AMEC activities on radioactive and chemical 
contamination issues resulting from past military activities in the 
Arctic region and stresses cooperation between the military 
organizations.

AMEC's "Terms of Reference" establishes the organizational structure 
and possible ways of financing the AMEC program. It identifies 
representatives (principals) from each member country's respective 
department or ministry of defense. These representatives approve their 
countries' participation in AMEC activities and are responsible for 
obtaining resources from their respective governments to ensure that 
AMEC objectives are achieved. An AMEC steering group recommends 
specific projects to the representatives from each country, prioritizes 
approved work, provides project management, and determines which member 
country will take the lead on each project.

DOD's Deputy Undersecretary of Defense for Installations and 
Environment provides policy oversight for U.S. participation in AMEC. 
Within the United States, the Department of the Navy, which was named 
as the executive agent in 1998, manages the AMEC national program 
office. All contracting functions are managed by the Naval Facilities 
Engineering Command. Although DOD is the lead U.S. agency for AMEC, the 
Departments of Energy and State and EPA provide technical and policy 
support.

AMEC Projects Have Provided Limited Support for DOD's Cooperative 
Threat Reduction Program, but Projects May Be Useful for Other 
Purposes: 

In a 1999 program plan to the Congress, DOD stated that AMEC projects 
would support the goals of the CTR program. However, our analysis of 
these projects shows that only one of the eight projects established to 
support CTR objectives of dismantling Russia's ballistic missile 
nuclear submarines did so. The remaining seven projects were either 
completed too late, terminated or suspended, or implemented at 
shipyards or sites not directly associated with CTR's dismantlement 
program. Despite their limited impact on the CTR program, most of these 
projects can be used to support dismantlement of Russia's general 
purpose nuclear submarines, according to DOD officials. Furthermore, 
U.S. and foreign representatives asserted that AMEC has achieved other 
important benefits and that continued U.S. participation in the program 
is critical because the United States provides significant technical 
support.

One of Eight AMEC Projects Had a Direct Impact on CTR's Efforts to 
Dismantle Russia's Ballistic Nuclear Submarines: 

Only one of eight AMEC projects established to support and complement 
CTR's program for the dismantlement of Russia's ballistic missile 
nuclear submarines has directly benefited the program. According to a 
program plan that DOD submitted to the Congress in 1999, AMEC was being 
conducted in close cooperation with the CTR program so that the two 
programs would benefit each other. The program plan stated that AMEC 
projects supported CTR submarine dismantlement activities. Some of the 
projects were expected to provide design and engineering support, while 
other projects were designed to fill gaps in the CTR program.

According to CTR officials, however, only one AMEC project, the 
development of a prototype 40-metric ton container used to store and 
transport spent nuclear fuel from dismantled Russian ballistic missile 
nuclear submarines, was able to meet CTR program objectives.[Footnote 
5] U.S. expenditures for this project totaled about $2.9 million, and 
the Navy chose EPA's Office of International Programs to manage the 
project. The containers helped solve an immediate problem--finding 
adequate storage capacity for the spent nuclear fuel removed from the 
submarines. CTR and EPA officials told us that the storage containers 
solved a "bottleneck," enabling CTR to remove more spent fuel and 
facilitate dismantlement efforts. According to DOD and EPA, when 
serially produced the AMEC container costs 80 percent less than the 
cost of a Russian manufactured storage container. CTR has purchased 25 
containers and plans to purchase an additional 35 to transport and 
store the spent fuel from dismantled ballistic nuclear submarines in 
Russia. Russia is also using the containers to store and transport 
spent nuclear fuel from general purpose nuclear submarines. Figure 3 
shows an AMEC-designed storage container.

Figure 3: AMEC-Designed Container Used to Store and Transport Spent 
Nuclear Fuel from Russia's Dismantled Nuclear Submarines: 

[See PDF for image]

[End of figure]

Regarding the other seven AMEC projects that were established to 
support or complement the CTR program, we found the following: 

* A project, also managed by EPA, to develop a storage pad to hold the 
storage containers was completed too late to support CTR's 
dismantlement efforts associated with a Russian shipyard that had been 
used as a CTR dismantlement site.[Footnote 6] According to AMEC and EPA 
officials, the storage pad's completion was delayed due to problems 
identifying and obtaining all required Russian clearances and licenses 
to operate the storage pad; in the intervening time Russia decided it 
would no longer dismantle ballistic missile submarines at the shipyard. 
As a result, the storage pad is not used to support the CTR program but 
will be used for temporary storage of spent nuclear fuel from Russia's 
general purpose nuclear submarines. U.S. expenditures for this project 
totaled $2.9 million.

* One project, involving development of technology to prevent corrosion 
inside the spent nuclear fuel storage containers, was terminated before 
completion because the CTR program withdrew its support and did not 
provide liability protection. In April 2002, CTR directed AMEC to 
develop and manufacture a spent nuclear fuel storage container 
dehydration system. The dehydration system was needed to extract water 
from the storage containers to inhibit corrosion and increase the 
containers' service life. However, in December 2003, the CTR program 
terminated AMEC's participation in the project and selected a U.S. 
contractor, instead of working through AMEC, to design a larger 
dehydration system.[Footnote 7] U.S. expenditures for this project 
totaled $396,000.

* Two projects involving solid radioactive waste treatment and solid 
radioactive waste storage were implemented at a site where CTR is not 
dismantling ballistic missile nuclear submarines. These projects were 
designed to assist the Russian navy manage the large volume of waste 
generated by dismantlement of nuclear submarines. The waste treatment 
project identified, among other things, technologies that could reduce 
the volume of solid waste from decommissioned nuclear submarines and 
make it easier and more economical to store the material. The second 
project supported the development and production of 400 steel 
containers for the Russian navy to transport and store solid 
radioactive waste. Prior to the project, no Russian-designed and 
manufactured container had ever been certified to transport solid 
radioactive waste. According to the AMEC project manager, the projects 
introduced Russian representatives to western business practices, 
including improved contract management techniques. U.S. expenditures 
for these projects, which have been completed and consolidated at a 
mobile solid waste treatment facility built at a Russian shipyard, 
totaled about $12 million, including the cost of the facility.

* AMEC's project to develop a demonstration radiation detection system 
to protect the health and safety of workers who dismantle submarines 
does not directly benefit the CTR program. The demonstration system is 
installed at the interim storage pad site, which is not being used to 
support the CTR program. U.S. AMEC and CTR officials were uncertain if 
the radiation detection system would be deployed at any of the CTR 
dismantlement sites in Russia. CTR officials said that while they 
support projects that protect workers' heath and safety, they would not 
have funded this project and are uncertain how it promotes CTR 
dismantlement goals. U.S. expenditures for this project totaled $1.7 
million.

* A related project that supplied about 125 DOE surplus dosimeters 
(radiation detection devices) to the Russian navy was described as a 
failure by the AMEC project manager. He told us that the navy would not 
use these dosimeters due to, among other things, technical concerns and 
had put the equipment in storage for a couple of years. We brought this 
matter to the attention of a U.S. AMEC official who subsequently 
contacted the Russian AMEC representative and was informed that the 
dosimeters would be distributed. In July 2004, Russia's representative 
to AMEC notified DOD that the dosimeters were now being used.

* Finally, an AMEC project to develop a mobile liquid waste processing 
facility that could be used in remote locations in Russia was suspended 
because CTR did not support it. A CTR official told us that CTR never 
endorsed the project because adequate capacity for liquid radioactive 
waste treatment already existed at the facilities where submarines were 
being dismantled. As a result, CTR would not extend liability 
protection for the project. EPA, which was chosen by the Department of 
the Navy to manage the project, still has about $700,000 in unspent 
project funds that were transferred from the Navy beginning in 1999. 
EPA officials told us that the funds must be reprogrammed by December 
31, 2004, unless the Navy provides an extension, or they will be 
returned to the U.S. Treasury.

U.S. AMEC officials told us that ultimately several of the projects 
that were established to meet CTR objectives did not do so because of 
changing requirements and plans. However, they asserted that the 
projects were planned with the full cooperation and approval of the CTR 
program and the appropriate Russian government agencies.

CTR officials told us they have no further need for AMEC assistance in 
carrying out their plans to continue dismantling Russian ballistic 
missile nuclear submarines until 2013. These officials asserted, 
however, that AMEC plays a useful role in helping address environmental 
issues and technology development and that this role should be 
continued. Although only one AMEC project that was established to 
support CTR did so, these officials believed that most of these 
projects can be used to support dismantlement of Russia's general 
purpose submarines. The storage pad, for example, can hold spent 
nuclear fuel from all types of Russian nuclear submarines and will 
facilitate the shipment of the fuel to the centralized storage facility 
at Mayak. Similarly, the steel containers for solid waste are already 
being used to store radioactive waste from dismantled general purpose 
submarines, according to U.S. and Russian officials. A DOE official 
told us that Russia also plans to use the steel containers to store 
waste from older ballistic missile submarines that are not scheduled to 
be dismantled with CTR assistance. Figure 4 shows the storage pad, and 
figure 5 depicts the solid waste steel containers funded by AMEC.

Figure 4: Interim Storage Pad: 

[See PDF for image]

Note: A storage container is being loaded into one of the pad's cells.

[End of figure]

Figure 5: Steel Containers Used to Store Solid Radioactive Waste from 
Dismantled Submarines: 

[See PDF for image]

[End of figure]

U.S. and Foreign Officials Believe That AMEC Has Benefits Beyond 
Projects Supporting CTR: 

Despite AMEC's limited impact on the CTR program, U.S. and foreign 
officials told us that AMEC has achieved other benefits as well and 
that continued U.S. participation in the program is critical. DOD and 
Department of State officials said that one of AMEC's most important 
benefits is promoting U.S. foreign policy objectives, particularly with 
Norway, a long-standing NATO ally, and with other nations in the Arctic 
region. The U.S. Ambassador to Norway told us that while AMEC is a very 
modest program in terms of expenditures, Norway views it as (1) a 
critically important part of the U.S-Norwegian bilateral relationship, 
and (2) an effective multilateral effort to address one of its primary 
policy concerns--environmental protection in the Barents Sea region. 
The participation of the United States and the United Kingdom gives 
Norway political clout and technical expertise that Norway would not 
have working on a bilateral basis with Russia. Norwegian officials from 
the ministry of defense and ministry of foreign affairs reinforced 
these views. The U.S. Ambassador to Russia also gave us his views about 
AMEC. In a May 24, 2004, letter to GAO, he noted that AMEC's 
accomplishments include the construction of the solid waste treatment 
and storage facility where there are a large number of Russian nuclear 
submarines awaiting dismantlement. Furthermore, he recommended that the 
United States continue to participate in AMEC and consider expanding 
the program to Russia's Pacific fleet.

U.S. and foreign officials also asserted that another important aspect 
of AMEC is that it facilitates military-to-military cooperation with 
Russia. Officials noted that AMEC has enabled military personnel from 
the United States, Norway, and United Kingdom to visit Russian naval 
facilities that they had previously been unable to visit. According to 
these officials, access to the facilities enables AMEC to better 
understand the environmental conditions and technologies required to 
assist with dismantlement efforts. Russia's AMEC representative told us 
that AMEC is a useful way to improve communications among the member 
countries' military organizations. He also noted, however, that Russia 
would find other ways to promote cooperation on environmental security 
issues if AMEC did not exist.

DOE officials told us that AMEC has produced tangible benefits in its 
efforts to plan an emergency exercise in the Murmansk region in late 
2004. The exercise, which will be conducted as an AMEC project, entails 
staging an accident involving spent nuclear fuel from a Russian nuclear 
submarine. Participants in the exercise will include representatives 
from the Russian navy and emergency responders from various Russian 
organizations, including the Federal Agency for Atomic Energy, Ministry 
of Defense, and the Institute for Nuclear Safety. In addition, nuclear 
emergency management personnel from neighboring countries as well as 
the International Atomic Energy Agency are expected to participate. 
According to DOE officials, this exercise will be the first time that 
DOE can simulate an accident involving spent nuclear fuel from a 
Russian submarine.

AMEC Member Countries Have Contributed About $56 Million to the 
Program: 

From 1996 to April 2004, AMEC member countries contributed about $56 
million to the program. The United States has been the largest 
contributor, providing about $31 million or about 56 percent of the 
total, with Russia, Norway, and the United Kingdom contributing the 
remainder. Within the U.S. government, although DOD has provided over 
90 percent of all funds, DOE and EPA have also contributed. U.S. 
contributions have declined from 1999 to 2004 as U.S.-funded projects 
have been completed and as other member countries increased their 
contributions. According to DOD officials, U.S. contributions to AMEC 
are planned to be about $3 million per year from fiscal year 2006 to 
fiscal year 2011.

The United States Has Been the Leading Contributor to AMEC, Providing 
More Than One-Half of Total Program Funds: 

From 1996 until April 2004, AMEC member countries contributed about $56 
million to the program. Figure 6 provides a breakout of AMEC members' 
contributions.

Figure 6: Contributions of AMEC Member Countries, as of April 2004: 

[See PDF for image]

Note: The United Kingdom contribution accounts for less than 1 percent 
of total AMEC contributions.

[End of figure]

As figure 6 shows, the United States has contributed the greatest 
amount of any AMEC member country--about 56 percent of the total. 
According to available data, Russia contributed about $13 million; 
Norway contributed about $12 million; and the United Kingdom provided 
about $100,000 because it only recently joined AMEC.

Norway's contributions were initially limited because it did not have 
an agreement with Russia that provided liability protection for the 
Norwegian government or its contractors who would be providing 
assistance through AMEC. In May 1998, Norway signed an agreement with 
Russia that included liability protection, and since then Norway has 
contributed funds to several projects, including the development of a 
radiation detection system and steel storage containers for solid 
radioactive waste. Norway plans to contribute an additional $8 million 
to AMEC over the next few years, and Norwegian officials told us that 
they are committed to an equitable sharing of costs with the other AMEC 
member countries.

Russia's contributions to AMEC were used to support, among other 
things, development of the storage container for spent nuclear fuel, 
the interim storage pad, and the solid waste treatment and storage 
technologies. A U.S. AMEC official told us that he reviewed Russia's 
itemized list of project costs and was satisfied that the costs were a 
fair representation of Russia's financial contributions. However, 
Russia's future contributions are uncertain. A Russian representative 
to AMEC told us that Russia will continue to contribute financially to 
projects but noted that there are limited resources available. Other 
member countries told us that Russia would probably make mostly "in 
kind" contributions to the program, including labor and materials for 
specific projects.

The United Kingdom, which joined AMEC in June 2003, has contributed 
about $100,000 for preliminary planning related to projects focusing on 
buoyancy and the safe towing of nuclear submarines. The United Kingdom 
has pledged an initial contribution of $9 million to AMEC in order to 
fund a preliminary group of projects.

DOD Has Provided the Majority of U.S. Funds to AMEC: 

DOD has provided the majority of U.S. funding to AMEC--about $28 
million, or 91 percent of the total U.S. contribution. DOE and EPA have 
provided the remaining funds, about $2.6 million and $200,000, 
respectively. Figure 7 depicts the breakdown of U.S. funds for AMEC by 
each agency.

Figure 7: U.S Agencies' Contributions to AMEC as of April 2004: 

[See PDF for image]

[End of figure]

U.S. funds have been used to support a variety of AMEC activities. 
About $24 million of the U.S. contributions to AMEC were used to fund 
projects, such as the storage container for spent nuclear fuel from 
ballistic missile submarines and the storage pad. The remainder funded 
program management (about $5.4 million), studies (about $1.0 million), 
and meetings (about $0.5 million). Figure 8 provides a breakdown of 
these amounts.

Figure 8: U.S. AMEC Program Costs by Category: 

[See PDF for image]

[End of figure]

U.S. Program Contributions to AMEC Have Declined: 

The overall U.S. contribution to AMEC decreased from fiscal year 1999 
to fiscal year 2004, as U.S.-funded projects have been completed and as 
other AMEC member countries have increased their assistance. During the 
period when U.S. contributions started to decline, Norway and Russia 
increased their contributions. As figure 9 shows, U.S. funding peaked 
at almost $6 million in fiscal year 1998 when large scale projects such 
as the spent nuclear fuel storage container and storage pad were moving 
into implementation. Since fiscal year 2001, U.S. contributions have 
steadily declined and in fiscal year 2004, DOD allocated $2.5 million 
to AMEC.

Figure 9: U.S. Funding Levels for AMEC, Fiscal Years 1997-2004: 

[See PDF for image]

[End of figure]

AMEC program officials stated that in the future, member countries 
expect to share equally in AMEC project costs. U.S. AMEC officials 
stated that U.S. annual assistance to AMEC will be $3 million annually 
from fiscal year 2006 to fiscal year 2011, the latest date for which 
projections have been made. This projection was based on prior years' 
contributions as well as matching other members' planned contributions.

AMEC Plans to Significantly Expand Its Role and Redirect Its Focus to 
Include Nuclear Security Issues: 

AMEC's draft strategic plan, which is currently being reviewed by AMEC 
partners, envisions helping to secure Russian submarines, submarine 
bases, shipyards, and spent nuclear fuel and represents a significant 
expansion and redirection of AMEC's objectives. AMEC's proposal to 
improve submarine base security may be contrary to U.S. policy. In 
addition, according to DOE officials, spent fuel from Russian 
submarines is a low priority as a nuclear proliferation threat compared 
to other radioactive sources, such as abandoned electrical generators 
containing large amounts of strontium-90. Regardless of AMEC's plans, 
U.S. participation in AMEC faces an uncertain future because the United 
States lacks liability protection to participate in AMEC projects in 
Russia.

AMEC Plans to Expand Its Role into Securing Nuclear Materials from 
Russian Submarines: 

In May 2004, AMEC developed a draft strategic plan to guide its future 
efforts through 2015 that represents a significant expansion and 
redirection of its program. According to the draft plan, recent world 
events demonstrate the need to focus on emerging issues related to 
safety and security, with an emphasis on nuclear nonproliferation, 
nuclear threat reduction, and environmental sustainability. The draft 
plan states that spent nuclear fuel and other radioactive wastes 
generated during dismantlement of Russia's nuclear submarines are 
unprotected, presenting a significant proliferation risk. As a result, 
AMEC proposes giving priority to projects that will help secure spent 
nuclear fuel and other material that presents a radiological hazard and 
proposes addressing security problems at Russian shipyards, naval 
bases, support vessels, and other facilities associated with the 
dismantlement process. AMEC's draft plan calls for focusing on the 
following program areas: 

* nuclear security issues in support of the Group of Eight (G-8) Global 
Partnership priorities;

* nuclear submarine dismantlement;

* management of hazardous waste generated as a result of military 
activities; and: 

* environmental sustainability, safety, and security of military 
activities and installations.

According to AMEC officials, AMEC's future direction will be closely 
aligned with the priorities established by the G-8 Global Partnership 
plan to combat the spread of weapons and materials of mass destruction. 
In 2002, the G-8 announced this new initiative. The United States and 
the other G-8 members--Canada, France, Germany, Italy, Japan, Russia, 
and the United Kingdom plus the European Union--pledged $20 billion 
over the next 10 years to fund nonproliferation activities in the 
former Soviet Union. One of the key areas identified by the G-8 is 
nuclear submarine dismantlement. All of the G-8 countries, according to 
the Department of State, are contributing to the dismantlement of 
Russia's decommissioned general purpose nuclear submarines. Other non-
G-8 Global Partnership countries are also participating in this effort.
[Footnote 8] AMEC program partners--the United Kingdom and Norway--have 
declared that they intend to use the AMEC program as one means of 
fulfilling their G-8 Global Partnership obligations. According to AMEC 
officials, future project development should include ways to reduce 
the security risks posed by all types of Russian nuclear submarines.

With the G-8 priorities in mind, AMEC's nuclear security working group, 
which helped develop the draft strategic plan, proposed several areas 
of possible engagement, including: 

* evaluating state-of-the-art technology to enhance security at Russian 
naval bases and shipyards,

* improving security of ships known as "service vessels" that are used 
to store spent nuclear fuel from dismantled nuclear submarines,

* consolidating radiological sources to improve their security, and: 

* coordinating and increasing security of fueled submarines in transit.

Regarding the security of Russian naval bases, the working group 
proposed evaluating, among other things, whether radar systems designed 
to detect low-profile targets, sonar systems designed to detect 
subsurface threats, and systems designed to detect small quantities of 
nuclear materials would improve security. AMEC technical staff would 
then develop recommendations and present them to AMEC's representatives 
for consideration as follow-on projects. To improve the security of 
service vessels, the working group proposed incorporating protective 
measures, including radiation detectors, motion detectors, and closed 
circuit televisions. The working group also suggested reviewing a 
Russian study that focuses on consolidating radiological sources at 
several facilities. Based on this review, AMEC may suggest additional 
technical areas to be included in the study to improve its usefulness 
as a way to improve security. Finally, the working group proposed 
training personnel and developing procedures to produce a vulnerability 
assessment for, among other things, bases, shipyards, and radioactive 
waste storage facilities.

AMEC's Draft Plan Has Not Been Coordinated with DOE and DOD Nuclear 
Nonproliferation Offices: 

To date, AMEC's draft plan to address security issues associated with 
Russia's nuclear submarines and support facilities has not been 
coordinated with DOD's CTR policy office, DOD's Office of 
Nonproliferation Policy, or DOE's National Nuclear Security 
Administration--the organization primarily responsible for securing 
nuclear materials in Russia.[Footnote 9] U.S. AMEC officials told us 
that coordinating AMEC's draft plan with other U.S. government agencies 
at an earlier stage would have been useful because of the program's 
planned expansion to include nuclear security. The draft plan was 
developed by an AMEC technical guidance group and is now being reviewed 
by AMEC representatives from the United Kingdom, Norway, and Russia. 
According to DOD, the next step will be to meet with AMEC partners in 
September 2004 to finalize their comments and to review project 
proposals. U.S. AMEC plans to submit the final draft of the strategic 
plan to the U.S. interagency coordination process later in 2004. Once 
the interagency coordination is completed, the plan will go to the 
representatives of the AMEC partners for final approval.

A DOD Nonproliferation Policy official told us that he had not seen 
AMEC's draft strategic plan. According to a CTR policy official, many 
of the proposed areas of engagement identified by the nuclear security 
working group were unnecessary because they would apply to protecting 
fuel within nuclear submarines, which is less vulnerable to theft or 
diversion. In addition, he noted that one proposed engagement--the 
review of security measures for Russian naval bases and shipyards--
could be contrary to U.S. interagency guidelines established in 2003 
that preclude the delivery of security-related assistance to most 
operational military sites in Russia that have nuclear weapons, 
including certain navy facilities. For example, the U.S. policy 
precludes assistance for improving security at operational sites where 
submarines loaded with nuclear weapons are docked.[Footnote 10]

DOE officials from the National Nuclear Security Administration, who 
are primarily responsible for securing nuclear material in Russia, 
expressed concerns about AMEC's proposed expansion to include nuclear 
security. These officials, which included the Director of the Office of 
Global Radiological Threat Reduction, told us that securing spent 
nuclear fuel from dismantled Russian nuclear submarines is a low 
priority, based on available information.[Footnote 11] DOE takes a 
risk-based approach to threat reduction by considering the quantity, 
form, transportability, and surrounding security threats posed by high-
risk radiological materials. Based on these criteria, DOE has concluded 
that spent fuel from Russian submarines does not present a sufficiently 
high risk to warrant the commitment of resources. Rather, DOE places a 
higher priority on the highest-risk radiological materials, such as 
sealed radiological sources found in radioisotope thermo-electric 
generators, which contain strontium-90; blood irradiators; 
sterilization facilities; and large radiological storage 
locations.[Footnote 12] As a result, DOE officials stated that DOE does 
not wish to participate in securing spent nuclear fuel.

DOE is funding a study that will prepare site-specific analyses of 
spent nuclear fuel inventories and terrorism vulnerability assessments 
for Russian nuclear submarine dismantlement sites. This study is 
expected to be complete in September 2004. The Director of the Office 
of Global Radiological Threat Reduction told us that DOE would use the 
information from the study to further evaluate the risks posed by spent 
nuclear fuel. He asserted, however, that securing spent nuclear fuel 
from nuclear submarines is primarily an environmental issue--not a 
proliferation concern. Furthermore, he stated that AMEC's proposed 
nuclear security plan, if implemented, could have significant policy 
implications for all U.S. nonproliferation programs. For example, 
countries, including Russia, could request DOE assistance for securing 
spent nuclear fuel from dismantled nuclear submarines. If DOE agreed to 
provide this assistance, its resource requirements could dramatically 
increase because of the amount of spent nuclear fuel in the submarines 
and at coastal storage facilities.

Future U.S. Participation in AMEC Is Hampered by Lack of Liability 
Protection: 

Regardless of AMEC's future plans, U.S. participation in AMEC faces an 
uncertain future because the United States does not have liability 
protection for AMEC projects in Russia other than those that were 
undertaken in support of CTR. From 1996 to 2002, U.S. AMEC officials 
worked with the other AMEC member countries to obtain liability 
protection through a separate agreement. According to DOD officials, 
this effort was suspended because the State Department is negotiating 
liability protection for a broad range of U.S. programs with Russia. 
These negotiations have not been concluded, and therefore U.S. AMEC, 
which does not have liability protection, has limited participation in 
new projects.[Footnote 13]

In the interim, U.S. AMEC officials have explored other options to 
acquire liability protection. For example, U.S. AMEC has continued to 
request approval from CTR to extend liability protection for the mobile 
liquid waste treatment facility project. However, CTR has rejected the 
request because the project does not support CTR objectives. In 
addition, according to CTR officials, the program does not require any 
additional AMEC assistance and it will not extend liability protection 
for future AMEC projects. In the interim, U.S. AMEC officials were able 
to acquire limited liability protection to participate in two new 
projects led by the United Kingdom: (1) the safe towing of 
decommissioned nuclear submarines and (2) improving the buoyancy of 
decommissioned nuclear submarines. U.S. AMEC officials have received 
State Department approval to provide limited assistance to these 
projects using the United Kingdom's bilateral agreement with Russia as 
the basis for liability protection. U.S. AMEC plans to transfer funds 
to a United Kingdom contractor to perform a feasibility study 
associated with the two projects. According to U.S. AMEC officials, the 
United Kingdom has offered to sign all future contracts with Russia 
that will "hold the United States harmless of any liability." An 
agreement to implement this proposed solution to the liability problem 
had not been completed at the time of our review.

DOD Has Not Adequately Justified Its Proposed Initiative to Expand Its 
Technology Development to Submarine Dismantlement Activities into 
Russia's Pacific Region: 

In response to Russia's request for assistance to address environmental 
problems resulting from military activities in the Pacific, DOD plans 
to expand its technology demonstration efforts to that region by 
developing a program similar to AMEC. However, DOD has neither 
adequately analyzed the condition of Russia's radioactive waste 
problems resulting from, among other things, decommissioned and 
dismantled nuclear submarines in the Pacific nor their impact on the 
environment. Furthermore, DOD has not identified specific projects that 
would be needed beyond those already being done for the Arctic region. 
Finally, Japan, which is assisting Russia dismantle submarines in the 
Pacific, has no current plans to join DOD in a technology development 
program.

DOD Has Proposed Expanding Its Technology Development Efforts but Has 
Not Adequately Analyzed the Environmental Risks or Projects That Would 
Be Needed: 

In November 1998, Russia requested DOD's assistance to establish an 
organization similar to AMEC in Russia's Pacific region to address 
environmental problems. Russia proposed 17 technical cooperation 
projects to develop and manufacture such things as a mobile ecological 
laboratory, a marine unit for ocean oil spill cleanup, and a 
transportable unit for radioactive waste water treatment. DOD began 
exploring ways to establish a cooperative program with Russia that had 
the potential to expand into regional cooperation with Japan and 
possibly other countries in the region. According to DOD officials, 
Congress needed to authorize expansion of the program into the Pacific 
region before projects could be implemented. Within DOD's fiscal year 
2003 defense authorization bill, DOD sought to obtain congressional 
approval to amend AMEC's enabling legislation to expand the program to 
the Pacific region. However, no congressional action was taken on the 
proposal. DOD proposed new legislation within the fiscal year 2004 
defense authorization bill to develop a separate cooperative program in 
the Pacific region, but no congressional action was taken on that 
initiative either.

Although DOD has asserted that the expansion of cooperative efforts is 
necessary because of serious environmental contamination in the Pacific 
region, its proposal is not based on an adequate analysis of the 
region's environmental conditions. Furthermore, DOD has not developed a 
comprehensive plan that identifies priorities, resource requirements, 
or timeframes for accomplishing the proposed expansion. Some U.S. 
environmental experts have noted that a master plan is needed in the 
Far East to prioritize tasks. Such a master plan is currently being 
developed to assist G-8 submarine dismantlement efforts in the Arctic 
region. This master plan, which is funded by the European Bank for 
Reconstruction and Development, is expected to help donor countries 
improve coordination and reduce the likelihood of duplication of 
assistance efforts.

DOD and State Department officials told us that while the problems in 
the Pacific are generally known, they have not been thoroughly 
documented and analyzed compared to conditions in the Arctic, which has 
been the focus of international assistance. However, they said that 
available information indicates that conditions in the Pacific pose 
environmental risks. For example, there are environmental problems 
associated with Russia's decommissioned and dismantled nuclear 
submarines, and there are inadequate and unprotected storage facilities 
for spent nuclear fuel and radioactive waste. A 1994 report prepared by 
Greenpeace documented the radioactive waste situation in the Russian 
Pacific Fleet, including waste disposal problems, submarine 
decommissioning and safety, and the security of naval fuel.[Footnote 
14] There have also been more recent attempts to document environmental 
risks posed by Russia's nuclear submarines in the Pacific region. For 
example, in 2003, a study by the International Institute for Applied 
Systems Analysis, which was funded by AMEC, found that a release of 
radioactivity from an accident aboard a Russian nuclear submarine in 
the Russian Pacific region could, under certain conditions, reach the 
United States in 3 to 5 days.

DOD has taken steps to develop more comprehensive data on environmental 
conditions in the Pacific region. It awarded a contract to a Russian 
organization to study the status, characteristics, radiation potential, 
and risks of submarine dismantlement in the Pacific. The study will 
include a discussion of sources of radioactive contamination and 
nonradioactive contamination, problems associated with monitoring and 
environmental remediation, and sources of hazard and risk. In addition, 
it will focus on (1) developing a methodology for prioritizing tasks 
based on safety needs, threats, and risks; (2) developing a risk-based 
high-priority list of urgent tasks; and (3) proposing a structure and 
design for a strategic plan for future actions. Once the study is 
completed, DOD plans to develop a plan for the proposed Pacific 
initiative.

In the interim, DOD has created a list of projects that were developed 
under AMEC for the Arctic region that may be applicable to the Pacific. 
These projects include (1) ensuring the buoyancy of decommissioned 
nuclear submarines, (2) providing handling for spent nuclear fuel, and 
(3) developing processing technologies for solid radioactive waste. 
According to DOD, additional projects would have to be developed in 
consultation with Russia and would need to take into account different 
climatic conditions in the Pacific. For example, the Pacific region 
encompasses areas with humid summers that could affect the type of 
equipment used. In addition, projects would also have to make 
allowances for the poorly developed infrastructure found in Russia's 
Far East. These factors could increase the complexity and costs 
associated with the projects.

Japan Is Dismantling Russia's Nuclear Submarines in the Pacific but 
Does Not Plan to Establish a Technology Development Program with DOD: 

According to DOD officials, DOD envisions partnering with Japan to 
develop a master plan that will specify projects based on assessments 
of the environmental conditions in the Pacific region. In addition, DOD 
has invited Japan to participate in the ongoing DOD-funded assessment 
of the environmental risks posed by decommissioned nuclear submarines 
in the Pacific.

Officials from Japan's Embassy to the United States and Japan's 
Ministry of Foreign Affairs told us that Russia's decommissioned 
nuclear submarines in the Pacific pose environmental and security 
concerns. These officials were particularly concerned that radioactive 
contamination from nuclear submarines could damage Japan's fishing 
industry. However, according to an official from Japan's Ministry of 
Foreign Affairs, Japan has no current plans to join DOD in a technology 
development program in the Pacific region. The official told us that 
although Japan is interested in AMEC-sponsored technologies--and how 
they might be applied to submarine dismantlement in the Pacific--Japan 
prefers to work under the auspices of the G-8 Global Partnership. Japan 
has committed more than $200 million to the Global Partnership. Within 
the committed amount, Japan plans to allocate about $100 million for 
projects related to dismantlement of Russia's nuclear submarines and 
other environmental projects in Russia. In December 2003, Japan began 
assisting the Russian dismantlement of a general purpose nuclear 
submarine, and the project is expected to be completed later this year. 
The project is expected to cost about $7.4 million, including upgrades 
to the military facility where dismantlement is taking place. Japan may 
fund the dismantlement of 26 additional Russian nuclear submarines over 
the next several years.

AMEC representatives from the United Kingdom and Norway told us that 
their countries are not interested in funding a technology development 
program in the Pacific region. However, they asserted that a regional 
approach, similar to AMEC, might be useful to assist with submarine 
dismantlement efforts in that region.

Conclusions: 

With the completion of projects related to the CTR program, U.S. 
participation in AMEC is at a crossroads. AMEC is heading in a new 
direction that represents a significant expansion from its original 
environmental charter. AMEC officials have not adequately justified the 
expansion of the program to secure spent nuclear fuel and other 
material and to address security problems at Russian shipyards, naval 
bases, support vessels, and other facilities associated with the 
dismantlement process. Regardless of AMEC's plans, however, the U.S. 
role will be limited until the liability issue with Russia is resolved.

The proposed expansion of AMEC's goals to include improving security 
around naval bases where Russia is decommissioning and dismantling 
nuclear submarines is a low priority objective and may be inconsistent 
with U.S security policy. DOE, which is responsible for securing 
nuclear materials in Russia, does not believe that spent nuclear fuel 
and other associated radioactive materials from Russia's nuclear 
submarines pose a high priority threat and therefore have told us they 
would not fund any initiatives in this area. Furthermore, improving 
security around Russian submarine bases may be inconsistent with U.S. 
policy, which generally precludes providing security upgrades around 
operational Russian naval facilities.

In addition, DOD's interest in expanding its technology development 
activities to Russia's Pacific fleet of nuclear submarines is not based 
on an analysis that demonstrates the need to do so, although efforts 
are underway to study the environmental risks. Previously developed 
technologies for Russia's Arctic fleet could potentially be applied to 
dismantling Russia's nuclear submarines in the Pacific, and there is no 
assessment concluding that additional projects are needed. Furthermore, 
Japan, which is most concerned about contamination from aging or 
damaged nuclear submarines in the Pacific, has begun dismantling 
Russian submarines in the Pacific under the auspices of the G-8 program 
and has not requested DOD's assistance in technology development. If 
further analysis in the Pacific shows that environmental conditions 
warrant assistance, DOD officials stated that congressional approval 
for this initiative will be required.

Finally, we believe that better oversight is needed to ensure that 
project funds are spent on a timely basis. The approximately $700,000 
in unspent funds transferred from the Department of the Navy to EPA 
almost 5 years ago for the mobile liquid waste project raises concerns 
about the adequacy of financial and management controls being exercised 
over the program.

Recommendations for Executive Action: 

To help ensure that the United States' continued participation in AMEC 
supports--and is consistent with--overall U.S. assistance efforts in 
Russia, we recommend that the Secretary of Defense, in consultation 
with the Secretaries of Energy and State, take the following actions: 

* determine whether AMEC's role should be expanded to include 
activities such as improving security around Russian nuclear submarine 
bases and: 

* ensure that AMEC's efforts are well defined, closely coordinated, and 
complementary with other U.S. nuclear nonproliferation programs managed 
by the Departments of Defense and Energy.

Regarding DOD's proposed Pacific initiative, we recommend that the 
Secretary of Defense: 

* assess whether technology development activities should be expanded 
to include submarine dismantlement in that region, and if determined it 
is necessary, request congressional approval for this expansion to the 
Pacific region; and: 

* determine what form U.S. participation in such a technology 
development program would take, such as a bilateral effort or a 
multilateral organization similar to AMEC.

Furthermore, we recommend that the Administrator, Environmental 
Protection Agency determine, in consultation with the Secretary of the 
Navy, if the funds that were designated for AMEC-related activities are 
still needed for the purpose intended. If not, we recommend that the 
Administrator and the Secretary determine whether to reprogram the 
funds for other AMEC-related activities or to propose rescinding the 
funds.

Agency Comments and Our Evaluation: 

We provided the Departments of Defense and Energy and EPA with draft 
copies of this report for their review and comment. DOE had no comments 
and EPA provided technical comments, which we incorporated as 
appropriate. DOD provided written comments, which are presented as 
appendix III.

DOD concurred with all of our report's recommendations. However, in 
commenting on our draft report, DOD raised several concerns and 
observations, including: (1) AMEC's primary role is not to support the 
Cooperative Threat Reduction program (CTR) but to minimize the 
ecological security risks associated with military activities in the 
Arctic; (2) DOD's program plan submitted to the Congress in 1999 did 
not state that AMEC projects would support the goals of the CTR 
program; (3) our report did not adequately capture AMEC's impact on and 
relationship to other U.S./multinational programs such as the G-8 
Global Partnership initiative; (4) AMEC's draft plan is a work in 
progress and is currently undergoing coordination with partner 
countries; and (5) our report does not capture the trend that shows 
increased partner country funding. Our response to DOD's comments on 
the report is as follows.

In our view, our draft report properly characterized AMEC's role and 
gave the program credit for achieving technology benefits and promoting 
U.S. foreign policy objectives. As we stated in the draft report, AMEC 
was established to help reduce the environmental impacts of Russia's 
military activities in the Arctic region. However, we also noted that 
U.S. participation in AMEC was hindered by the absence of liability 
protection. Given this lack of liability protection, the United States 
has, for the most part, tied its participation in AMEC projects to 
DOD's CTR liability protocol. We noted, however, in the draft report 
that a number of AMEC projects are not linked to the CTR program.

It is unclear to us why DOD asserted in its comments that its 1999 
program plan does not state that AMEC was expected to support CTR 
projects. In fact, DOD's program plan clearly states on page 7 that 
"All AMEC activities currently underway in Russia are in support of CTR 
Ballistic Missile Submarine Dismantlement projects and thus are 
governed by CTR Implementing Agreement of August 26, 1993, between DOD 
and the Ministry of Economics of the Russian Federation, addressing 
strategic offensive arms elimination." In addition, we disagree with 
DOD's assertion that we did not adequately portray AMEC's relationship 
to other U.S./multinational programs, including the G-8 Global 
Partnership initiative. Our draft report recognized that AMEC's future 
direction would be closely aligned with priorities established by the 
G-8 Global Partnership. We also noted that AMEC program partners have 
declared their intention to use AMEC as one way to fulfill their G-8 
Global Partnership obligations. Furthermore, we recognized in the draft 
report that AMEC's strategic plan is a draft document and is being 
coordinated with partner countries.

Regarding member countries' contributions to AMEC, our report addresses 
this matter as well. We stated in our draft report that overall U.S. 
funding decreased from fiscal year 1999 to fiscal year 2004 as U.S.-
funded projects have been completed and as other AMEC member countries 
have increased their assistance. However, in response to DOD's comment, 
we added this information to the highlights page of the report.

DOD concurred with our recommendation that the Secretary of Defense, in 
consultation with the Secretaries of Energy and State, determine 
whether AMEC's role should be expanded to include activities such as 
improving security around Russian nuclear submarine bases. However, DOD 
stated that AMEC's planned expansion will not include submarine base 
security but will focus on activities such as the G-8 Global 
Partnership initiative and ecological security. DOD stated that 
improving security around Russian nuclear submarine bases was part of a 
draft strategic plan that is currently being coordinated with member 
countries and it is inappropriate to portray any elements of the draft 
plan as anything other than a plan in progress.

We are encouraged that DOD now states that it will not engage in 
activities to improve the security at Russian nuclear submarine bases-
-activities that could be contrary to U.S. policy. However, we believe 
it is important to note that AMEC was considering improving submarine 
base security as part of its draft strategic plan. In our view, if AMEC 
provided assistance to improve the security of Russia's submarine 
bases, it would have represented a significant departure from the 
program's original environmental security objectives.

DOD also provided technical comments, which we have incorporated into 
the report as appropriate. Below, we summarize several of these 
technical comments and provide our response.

DOD incorrectly asserted in its technical comments that our draft 
report did not address two aspects of section 324 of the National 
Defense Authorization Act for Fiscal Year 2004 that required us to 
review AMEC: (1) the extent to which the AMEC program supports the G-8 
Global Partnership Against the Spread of Weapons and Materials of Mass 
Destruction Initiative and (2) the current and proposed technology 
development and demonstration role of AMEC in U.S. nonproliferation 
efforts. As we previously noted, our draft report provides information 
on the relationship between AMEC and the G-8 Global Partnership, noting 
that the future direction of AMEC will be tailored to support G-8 
Global Partnership goals. The draft report also identified the various 
technology demonstration projects that have been proposed and 
implemented, including recent projects focusing on the safe towing and 
improved buoyancy of decommissioned nuclear submarines. These projects 
are expected to support G-8 nonproliferation goals as well as U.S. 
security interests.

DOD also asserted that we had mischaracterized AMEC's contribution to 
CTR as "limited" because we did not factor into our analysis the 
financial benefits resulting from the prototype 40-metric ton spent 
nuclear fuel storage container developed by AMEC. DOD claims that the 
cost savings from these containers has essentially paid for the AMEC 
program. As stated in the draft report, the AMEC containers cost less 
to produce than the container Russia developed to store the spent 
nuclear fuel and we have revised the report to more accurately indicate 
the amount of savings per container as noted in DOD's comments. 
However, we believe that DOD has not understood the larger point of our 
analysis. While we recognize in the report that the storage container 
project has proven beneficial, the other seven projects that were 
established to support CTR objectives have had limited impact on the 
CTR program. In our view, one project, regardless of its benefit, does 
not compensate for the shortfalls of the other projects in supporting 
CTR program objectives.

DOD stated that the report does not capture the draft nature of the 
AMEC strategic plan and does not properly explain the coordination 
process among partner countries. We disagree with this assertion. We 
properly identified the plan as a draft document throughout the report. 
Furthermore, the draft report contained information about the 
coordination process that DOD officials provided to us on July 14, 
2004. However, we have incorporated additional information in the 
report about coordination timeframes to reflect DOD's comments.

In its technical comments, DOD also stated that U.S. participation in 
AMEC faces an uncertain future due to changing program direction, and 
not because it lacks liability protection. We disagree with this 
assertion. U.S. AMEC officials told us that U.S. participation in new 
AMEC projects was hampered due to the lack of liability protection. 
These officials never indicated during the course of our review that 
changing program requirements were impacting the program. In fact, they 
stated in a positive vein that future U.S. participation in AMEC would 
be tied to the G-8 Global Partnership initiative, which was aligned 
with U.S. national security interests.

We are sending copies of this report to the Secretary of Defense; the 
Secretary of Energy; the Administrator, National Nuclear Security 
Administration; the Administrator, Environmental Protection Agency; 
the Director, Office of Management and Budget; and interested 
congressional committees. We will also make copies available to others 
upon request. In addition, this report will be available at no charge 
on the GAO Web site at [Hyperlink, http://www.gao.gov].

If you or your staff have any questions concerning this report, I can 
be reached at 202-512-3841 or [Hyperlink, aloisee@gao.gov]. Key 
contributors to this report were Julie Chamberlain, Nancy Crothers, 
Robin Eddington, Glen Levis, and Jim Shafer.

Signed by: 

Gene Aloise: 
Acting Director, Natural Resources and Environment: 

List of Committees: 

The Honorable John W. Warner: 
Chairman: 
The Honorable Carl Levin: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Ted Stevens: 
Chairman: 
The Honorable Daniel K. Inouye: 
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
United States Senate: 

The Honorable Duncan Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Jerry Lewis: 
Chairman: 
The Honorable John P. Murtha: 
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives:

[End of section]

Appendixes: 

Appendix I: List of AMEC Projects: 

The following table lists AMEC projects under way, completed, newly 
started, or terminated.

Table 1: Status of AMEC Projects: 

Project: Prototype; 
40-metric ton storage container; 
Status: Completed; 
Project description: Developing a prototype storage container for the 
interim storage and transport of spent nuclear fuel from dismantled 
Russian nuclear submarines; 
Project established to support CTR? Yes.

Project: Storage pad; 
Status: Completed; 
Project description: Developing concrete pad for temporary storage of 
spent nuclear fuel containers prior to their shipment to a permanent 
storage facility; 
Project established to support CTR? Yes.

Project: Drying technology for 40-metric ton storage containers; 
Status: Terminated; 
Project description: Developing technology to eliminate water from 
storage containers to inhibit corrosion and increase container storage 
life; 
Project established to support CTR? Yes.

Project: Liquid radioactive waste treatment; 
Status: Suspended; 
Project description: Developing mobile technology for treating liquid 
radioactive waste at remote sites; 
Project established to support CTR? Yes.

Project: Solid radioactive waste treatment; 
Status: Completed; 
Project description: Identifying and developing technologies to 
process (reduce volume and stabilize) solid radioactive waste from 
dismantled nuclear submarines; 
Project established to support CTR? Yes.

Project: Solid radioactive waste storage; 
Status: Completed; 
Project description: Identifying and developing technologies to safely 
store solid radioactive waste from dismantled nuclear submarines; 
Project established to support CTR? Yes.

Project: Radiation detection system; 
Status: Completed; 
Project description: Developing and testing a system using Norwegian 
software and Russian hardware to monitor radiation levels of spent 
nuclear fuel on decommissioned/dismantled nuclear submarines; 
Project established to support CTR? Yes.

Project: Dosimeters; 
Status: Completed; 
Project description: Providing the Russian navy with DOE-surplus 
dosimeters (radiation detection devices) to monitor radiation levels 
within proximity of nuclear submarines. Norway also provided Russia 
with dosimeters, but the equipment was manufactured in Russia; 
Project established to support CTR? Yes.

Project: Radioactive waste management facility; 
Status: Completed; 
Project description: Supporting development of a center for 
radioactive waste storage at a Russian navy shipyard. The project 
integrates the technologies developed in the solid radioactive waste 
treatment and solid radioactive waste storage projects; 
Project established to support CTR? No.

Project: Improving buoyancy of decommissioned nuclear submarines[A]; 
Status: Under way; 
Project description: Identifying technologies to improve the buoyancy 
of decommissioned nuclear submarines; 
Project established to support CTR? No.

Project: Improving towing technologies[A]; 
Status: Under way; 
Project description: Developing and manufacturing equipment for the 
safe towing of decommissioned nuclear submarines; 
Project established to support CTR? No.

Project: Submarine dismantlement[B]; 
Status: Newly started; 
Project description: Dismantling a general purpose Russian nuclear 
submarine to use AMEC-developed technologies. This project is a United 
Kingdom-Norway initiative and the United States is providing technical 
expertise; 
Project established to support CTR? No.

Project: Submarine dismantlement; 
Status: Newly started; 
Project description: Reducing the hazardous wastes generated during 
submarine dismantlement (e.g., by using explosive cutting techniques 
to reduce the release of gases); 
Project established to support CTR? No.

Project: Contaminated soil; 
Status: Partially completed; 
Project description: Project implemented/designated/funded by Russia 
and Norway to select technologies for dealing with military 
nonradioactive hazardous material spills in the Arctic; 
Project established to support CTR? No.

Project: "Clean ship" technologies; 
Status: Completed; 
Project description: Examining technologies and designing a vessel to 
collect and process naval ship waste in the Barents Sea region. The 
vessel was never built. The intent is now to demonstrate clean ship 
technologies; 
Project established to support CTR? No.

Project: Phase 2 "clean ship" technology; 
Status: Terminated; 
Project description: Constructing a vessel to collect and process data 
on naval ship waste in the Barents Sea region; 
Project established to support CTR? No.

Project: Environmental management of military bases; 
Status: Under way; 
Project description: Addressing environmental protection issues at 
Arctic military bases; 
Project established to support CTR? No.

Project: Disposal of submarine batteries; 
Status: Terminated; 
Project description: Proposing solutions for the management of used 
submarine storage batteries; 
Project established to support CTR? No.

Project: Emergency preparedness exercise; 
Status: Under way; 
Project description: Planning and staging an exercise involving an 
accident with spent nuclear fuel; 
Project established to support CTR? No. 

Source: AMEC.

Notes: The United States provided or plans to provide funds for all of 
these projects, except the contaminated soil project, which was funded 
by Norway and Russia.

We did not consider the radioactive waste management facility to be a 
project that was established to directly support CTR program 
objectives. The facility was constructed to house technology 
demonstration projects.

[A] This project was proposed by the United Kingdom. The United States 
is providing funding only for preliminary project planning due to 
liability concerns.

[B] According to DOD, participation is limited to providing technical 
expertise because the United States is not funding the dismantlement of 
Russia's general purpose nuclear submarines.

[End of table]

[End of section]

Appendix II: Scope and Methodology: 

To assess the extent to which AMEC supports and complements the CTR 
program, we obtained and analyzed AMEC project files, reviewed 
pertinent supporting documentation, including project justifications, 
and discussed each project with program and project managers from the 
Departments of Defense and Energy, the Environmental Protection Agency, 
and Brookhaven National Laboratory. Department of State officials also 
provided their views about the projects. Of particular importance was 
an AMEC program plan that DOD submitted to the Congress in response to 
the National Defense Authorization Act for Fiscal Year 1999. In the 
plan, DOD provided information on AMEC projects' relationship to the 
CTR program. We used this plan as the basis for determining how AMEC 
projects supported the CTR program. During our review, we also 
interviewed DOD's Deputy Undersecretary of Defense for Installations 
and Environment, who is responsible for establishing U.S. policy for 
AMEC, to obtain his views on the impact of AMEC projects and the 
program's overall benefits. In April 2004, we attended a meeting of the 
AMEC principals in Svalbard, Norway, to obtain additional information 
about the AMEC program, including project implementation. During the 
meeting, we interviewed the principals and their staff from the United 
Kingdom, Norway, and Russia. These principals included the Commander of 
U.S. Navy Installations, the Head of Environmental Safety of the 
Russian Armed Forces, the Deputy Director General of Norway's Security 
Policy Department, and a representative from the United Kingdom's Royal 
Navy responsible for environmental issues. We also interviewed U.S. 
embassy officials in Oslo, Norway, including the U.S. Ambassador. The 
U.S. Ambassador to Russia provided his perspectives about AMEC in a 
letter to us dated May 24, 2004. We also interviewed officials from 
Norway's federal audit agency (Riksrevisjonen) and the Bellona 
Foundation, a Norwegian nongovernmental organization that focuses on 
environmental issues in the Arctic.

To identify AMEC financial contributions, including those from the 
United States, we obtained data from the AMEC program office in DOD, 
which is responsible for tracking all financial activities related to 
U.S. participation in AMEC. In addition, the AMEC program office, at 
our request, obtained financial data from Norway and Russia. The United 
Kingdom's data were provided to us by the AMEC Steering Group Co-
Chairman. We obtained responses to a series of questions focused on 
data reliability covering issues such as data entry access, internal 
control procedures, and the accuracy and completeness of the data from 
a United Kingdom AMEC official. Although we did not interview AMEC 
officials from Russia and Norway, we discussed in detail the Russian 
and Norwegian financial data with U.S. AMEC officials. Based on the 
United Kingdom responses and these discussions with U.S. AMEC 
officials, we concluded that the data were sufficiently reliable for 
the purposes of this report.

With regard to the U.S. contributions to AMEC, we reviewed the data and 
posed a number of questions to the AMEC program office to determine the 
reliability of the financial data. Specifically, we (1) met with AMEC 
program officials to discuss these data in detail; (2) obtained from 
key officials responses to a series of questions focused on data 
reliability covering issues such as data entry access, internal control 
procedures, and the accuracy and completeness of the data; and (3) 
added follow-up questions whenever necessary. Based on this work, we 
determined that the data were sufficiently reliable for the purposes of 
this report based on the work we performed to assure the data's 
reliability.

To assess AMEC's future program objectives, we examined documents 
prepared by AMEC and interviewed officials responsible for developing 
the draft strategic plan. Specifically, in May 2004, we attended a 
meeting of AMEC's Technical Guidance Group in Gettysburg, Pennsylvania, 
where the plan was formulated. While at the meeting we discussed AMEC's 
future plans with (1) the United Kingdom's AMEC Steering Group Co-
Chairman (representing the Royal Navy), (2) representatives from 
Norway's Ministry of Defense and Norway's Defense Research 
Establishment, (3) a representative from Russia's Armed Forces 
Environmental Safety organization, and (4) the AMEC Steering Group Co-
Chairman from DOD. In addition, we used the draft strategic plan to 
analyze AMEC's long-term goals and objectives, including its proposal 
to include nuclear security as a new program objective. We also 
discussed AMEC's nuclear security focus with officials from the Office 
of the Secretary of Defense for Cooperative Threat Reduction Policy, 
DOD's Office of Nonproliferation, and DOE's National Nuclear Security 
Administration. At DOE, we interviewed the Principal Assistant Deputy 
Administrator, Office of Defense Nuclear Nonproliferation; Director, 
Office of Global Threat Reduction; and the Acting Assistant Deputy 
Administrator, Office of International Material Protection and 
Cooperation. We also discussed these matters with a Brookhaven National 
Laboratory official who is leading a DOE-sponsored study on the risks 
associated with spent nuclear fuel from dismantled Russian nuclear 
submarines.

We obtained and analyzed pertinent program files maintained by DOD to 
evaluate DOD's plan to expand its technology development activities to 
the Pacific region. We also obtained available studies and reports 
prepared by Greenpeace International and the International Institute 
for Applied Systems Analysis that identified the conditions and risks 
posed by radioactive contamination. We supplemented this information 
with interviews with knowledgeable officials from Vanderbilt University 
and the Department of State. The official from Vanderbilt University is 
responsible for managing an AMEC-funded project on radioactive 
contamination in the Far East. We also interviewed an official from 
Japan's Ministry of Foreign Affairs to obtain information about Japan's 
views of the environmental problems associated with radioactive waste 
generated by Russia's nuclear submarines.

We conducted our review from January through August 2004 in accordance 
with generally accepted government auditing standards.

[End of section]

Appendix III: Comments from the Department of Defense: 

OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:

3000 DEFENSE PENTAGON: 
WASHINGTON, DC 20301-3000:

August 24, 2004:

Mr. Gene Aloise:

Acting Director, Natural Resources and Environment: 
U.S. Government Accountability Office:
441 G. Street, N.W.: 
Washington, D.C. 20548:

Dear Mr. Aloise:

The Department of Defense (DoD) appreciates this opportunity to respond 
to the Government Accountability Office's (GAO) draft report, "RUSSIAN 
NUCLEAR SUBMARINES: U.S. Participation in the Arctic Military 
Environmental Cooperation Program Needs Better Justification," dated 
August 3, 2004, (GAO Code 360424/GAO-04-924).

The Department has reviewed the draft GAO report and has the following 
concerns and observations:

* The Arctic Military Environmental Cooperative (AMEC) primary role is 
not to support the Cooperative Threat Reduction (CTR) program, but to 
minimize the ecological security risks associated with military 
activities in the Arctic.

* The Department's 1999 program plan to Congress did not state that AMEC 
projects would support the goals of the CTR program. The 1999 program 
plan states that "AMEC is currently being conducted in close 
cooperation with the CTR program such that these two programs have a 
beneficial synergistic relationship." This is in accordance with the 
National Defense Authorization Act for Fiscal Year 1999, Public Law 
105-261. As some CTR requirements changed after project inception or 
delays prevented project use by CTR, some CTR-related projects were 
carried forward for use outside the CTR program. These projects were 
consistent with broader program goals and AMEC legislation.

* The report does not adequately capture AMEC's impact on and 
relationship with other U.S./multinational programs such as the G-8 
Global Partnership Initiative, nor AMEC's ability to serve as an 
enabler for these programs. Within the United States, the Department of 
State considers AMEC part of our programs supporting the G-8 
Initiative.

* Although the report text describes the full program funding situation, 
the report's summaries do not capture the trend toward increased 
partner country funding. In recent years, Norwegian contributions have 
greatly increased, and both Norway and the United Kingdom plan to 
contribute individually at levels at least equal to FY04 and future 
U.S. contributions.

AMEC's draft strategic plan, written in May to support the G-8 Global 
Partnership, is a work-in-progress and is currently undergoing 
coordination with partner countries. Many concepts within the plan are 
those of partner countries and will either be accepted once the US 
begins its interagency coordination of the document or will be carried 
out by member nations under their own funding without US participation.

Enclosed are the Department's specific responses to the recommendations 
and technical comments. We request that you include our attached 
comments in your final report.

Sincerely,

Signed by: 

Alex A. Beehler: 
Assistant Deputy Under Secretary of Defense (Environment, Safety and 
Occupational Health):

Enclosures As stated:

GAO DRAFT REPORT - DATED AUGUST 3, 2004 GAO CODE 360424/GAO-04-924:

"RUSSIAN NUCLEAR SUBMARINES: U.S. Participation in the Arctic Military 
Environmental Cooperation Program Needs Better Justification":

DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense, in 
consultation with the Secretaries of Energy and State, determine 
whether AMEC's role should be expanded to include activities such as 
improving security around Russian nuclear submarine bases (p. 40, GAO 
Draft Report).

DOD RESPONSE: DoD concurs with this recommendation. We agree that the 
Secretary of Defense, in consultation with the Secretaries of Energy 
and State, determine whether AMEC's role should be expanded to include 
activities such as the G-8 Global Partnership Against the Spread of 
Weapons and Materials of Mass Destruction Initiative (G8 Initiative). 
DoD believes U.S. AMEC's future should be tied to the G-8 Initiative 
and ecological security activities. The Department of State considers 
AMEC one of several programs supporting the G-8 Initiative. DoD notes 
that the U.S.'s expanded role will not include activities such as 
improving security around Russian nuclear submarine bases. "Improving 
security around Russian Nuclear submarine bases" was part of a draft 
AMEC strategic plan that is currently being coordinated with AMEC 
partner countries before it goes through the U.S. interagency 
coordination process. It is inappropriate to portray any elements of 
this draft plan as anything other than a draft plan in progress.

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense, in 
consultation with the Secretaries of Energy and State, ensure that 
AMEC's efforts are well defined, closely coordinated, and complementary 
with other U.S. nuclear nonproliferation programs managed by the 
departments of Defense and Energy (p. 40, GAO Draft Report).

DOD RESPONSE: DoD concurs with this recommendation. DoD further 
believes the coordination should also include programs being 
administered by the Department of State such as the G-8 Global 
Partnership Initiative.

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense 
assess whether technology development activities should be expanded to 
include submarine dismantlement in that region, and if determined 
necessary, request congressional approval for this expansion to the 
Pacific region (p. 41, GAO Draft Report).

DOD RESPONSE: DoD concurs with this recommendation. The Pacific region 
provides unique opportunities for nuclear submarine dismantlement 
technology demonstrations. Some 
Pacific region dismantlement sites are much further from the bases 
where the decommissioned submarines are located than in NW Russia, and 
special considerations for the safe transport of the submarines must be 
considered. The region also has damaged submarines with Spent Nuclear 
Fuel. The importance of developing technology that dismantles 
submarines safely in this region is demonstrated by such accidents as 
Chazma Bay. Although this accident occurred almost 20 years ago, highly 
radioactive contaminated areas remain. The safe transport of 
decommissioned submarines from naval bases in Kamchatka to the 
dismantlement site in Vladivostok is of special concern to the 
Japanese, because the transport route is very close to the Japanese 
homeland. DoD will continue coordination with interested nations such 
as Japan to develop specific projects. Japanese interest in these 
issues is shown by their official attendance at the May 2004 meeting 
that developed the draft strategic plan, their participation in a July 
2004 project meeting concerning the safe transport of submarines to 
their dismantlement site and plan, to participate in the September 2004 
meeting that will finalize the AMEC partners comments on the draft 
strategic plan and to review project proposals.

RECOMMENDATION 4: The GAO recommended that the Secretary of Defense 
determine what form that U.S. participation in such a technology 
development program would take, such as a bilateral effort or a 
multilateral organization similar to AMEC (p. 41, GAO Draft Report).

DOD RESPONSE: DoD concurs with this recommendation. Any decision on the 
future structure of a technology development program for the Pacific 
will be fully coordinated and considered. The current AMEC structure 
provides an excellent model for cooperative activities and will assist 
in developing a Pacific program, but the exact form of the program must 
be determined.

RECOMMENDATION 5: The GAO recommended that the Secretary of the Navy 
consult with the Administrator, Environmental Protection Agency (EPA), 
to determine whether funds that were designated for AMEC-related 
activities are still needed for the purpose intended. If not, GAO 
recommended that the Secretary and Administrator determine whether to 
reprogram the funds for other AMEC-related activities or to propose 
rescinding the funds (p. 41, GAO Draft Report).

DOD RESPONSE: DoD concurs with this recommendation. This project was on 
hold for an extended period awaiting nuclear liability coverage, first 
from the proposed AMEC Trilateral Agreement and then from the 
Multilateral Nuclear Environmental Programme in Russia (MNEPR). 
Although the MNEPR agreement is in effect, the U.S. has not accepted 
the liability terms. The AMEC partners have expressed renewed interest 
in this project and have proposed using their bilateral agreement with 
Russia to provide the appropriate liability protection. DoD is 
coordinating this effort with EPA.

GAO DRAFT REPORT - DATED AUGUST 3, 2004 GAO CODE 360424/GAO-04-924:

"RUSSIAN NUCLEAR SUBMARINES: U.S. Participation in the Arctic Military 
Environmental Cooperation Program Needs Better Justification":

TECHNICAL COMMENTS:

1. Page 8, paragraph 2 - The reports does not adequately capture AMEC's 
impact on and relationship to other U.S./multinational programs such as 
the G-8 Global Partnership Initiative, nor AMEC's ability to serve as 
an enabler to these programs. Within the U.S., the Department of State 
considers AMEC part of our programs supporting the G-8 Initiative.

Section 324 of the National Defense Authorization Act for Fiscal Year 
2004 requires the Comptroller General to:

(a) Conduct a review of the Arctic Military Environmental Cooperation 
program, including-

(1) the current and proposed technology development and demonstration 
role of the program in United States nonproliferation efforts; and:

(2) the relationship of the program to the Cooperative Threat Reduction 
Program specified in section 1501(b) of the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201; 110 Stat. 
2731; 50 U.S.C. 2362 note). (b) Elements of Review-The review shall 
include an assessment of the following:

(1) Whether the conditions in the Western Pacific region require an 
expansion of the Arctic Military Environmental Cooperation program to 
include that region.

(2) The extent to which foreign countries, including Russia, make 
financial contributions to the program.

(3) The extent to which the Cooperative Threat Reduction Program and 
the G-8 Global Partnership Against the Spread of Weapons and Materials 
of Mass Destruction Initiative use the program.

(4) Whether the program is important to the disarmament and 
nonproliferation functions of the Cooperative Threat Reduction Program.

(5) Future-year funding and program plans of the Department of Defense 
for the program.

The GAO report addresses only the following: (1) assessment of the 
extent to which AMEC supports and complements the CTR program, (2) 
identification of participating countries' financial contributions to 
AMEC, (3) assessment of AMEC's future program objectives, and (4) 
evaluation of DoD's proposal to expand its technology development 
activities to Russia's Pacific region.

2. Page 9, Paragraph 1-The Department's 1999 program plan to Congress 
did not state that AMEC projects would support the goals of the CTR 
program. The 1999 program plan states that:

"AMEC is currently being conducted in close cooperation with the CTR 
program such that these two programs have a beneficial synergistic 
relationship." This is in accordance with the National Defense 
Authorization Act for Fiscal Year 1999, Public Law 105-261.

3. Page 10, second subparagraph last sentence - In the August 2, 2004, 
letter that was provided to GAO, the Russian AMEC Principal, General 
Yunak, expresses his satisfaction with the progress of AMEC projects 
and states that the U.S. dosimeters provided under Project 1.5 are 
currently being used by the shipyard during the nuclear submarine 
dismantlement process.

4. Page 10, last paragraph first sentence - This paragraph 
characterizes AMEC as providing "limited contribution to CTR" The AMEC 
program essentially paid for itself since the AMEC cask costs 80% less 
than the current single-purpose Russian SNF transport container. It 
takes 10 -12 casks per submarine, and CTR plans to dismantle over 40 
submarines. This "limited contribution to CTR" characterization should 
also be corrected in the summary page in the section "What GAO Found." 
Fast paragraph sixth line from the bottom, by deleting "Despite AMEC's, 
limited contribution to CTR."

5. Page 11, paragraph 1 second to last sentence - U.S. funding levels 
did decline as U.S. funded projects have been completed, but also 
because foreign contributions have been increasing.

6. Page 11, paragraph 2 - The draft strategic plan is a work in 
progress. It has not been approved by the AMEC Principals nor vetted 
through the interagency process. These documents were given to GAO to 
show that the AMEC program was progressing toward development of a path 
forward. The next step is to meet with AMEC partners in September 2004 
to finalize their comments on the draft plan and to review project 
proposals. The U.S. will submit the final draft for U.S. interagency 
coordination later in 2004.

7. Page 11, paragraph 2, third sentence from the bottom - U.S. 
participation in AMEC faces an uncertain future not because it lacks 
liability protection, but because of changing program direction. Page 
34 of the GAO report mentions that other options are being explored to 
acquire liability protection.

8. Page 12, paragraph 1 - It is not that the Japanese lack interest, 
they just have not found a way to join AMEC since their dismantlement 
program comes under the Ministry of Foreign Affairs and has no military 
link. The Japanese participated in the May 2004 meeting that developed 
the draft strategic plan, they participated in a July 2004 project 
meeting concerning the safe transport of submarines to their 
dismantlement site, and they plan to participate in the September 2004 
meeting with the AMEC partners.

9. Page 15, second sentence - The EPA official provided the following 
information regarding the cost of the container to DoD: "When serially-
produced, this container costs less than 20% of the cost of the current 
single-purpose Russian SNF transport container." This means that the 
container costs 80% less than the Russian container, not 20% less.

10. Page 17, subparagraph 1-The CTR-supplied equipment and 
infrastructure at the Russian shipyard Nerpa will also be available for 
the dismantlement of Russia's general purpose submarines.

11. Page 17, subparagraph 2 - CTR has now limited this project to 
simply providing the design of the dehydration system to Russia.

12. Page 19 and 20, last two paragraphs - the GAO quotes AMEC officials 
as asserting that planning was done for CTR projects with "full 
cooperation and approval of the CTR program and the appropriate Russian 
government agencies." This language, however, is not included in the 
summaries, which seem to blame the AMEC program for lack of support. 
The summaries also do not include the final paragraph of the report, 
which states that AMEC plays a useful role. This supports the idea that 
AMEC has other uses. To reinforce this point within the limited space 
in the one-page summary, the DoD suggests that in the first paragraph 
under "What GAO found," the words "including the CTR program" be added 
after "DoD officials" six lines from the bottom of the paragraph.

13. Page 23, paragraph 1-The U.S. Ambassador to Russia stated in a 
letter that he recommended "consideration of expansion of the AMEC 
program to the Russian Pacific Fleet where the opportunity exists to 
conduct a similar multi-national program with Russia, US, Japan and 
Republic of Korea."

14. Page 25, bottom and 26 - this makes the points about future funding 
for the program, all of which is not included in the summaries. The 
first sentence, on page 28, is an excellent quote that easily could be 
placed in the summary.

15. Page 32, paragraph 1 --The report does not capture the nature of 
the AMEC strategic plan as a draft work in progress and does not 
properly explain the coordination process. The plan is currently under 
review by Russia and Norway. The United Kingdom has already commented. 
After coordination among the national participants is completed, the 
plan will be coordinated within DoD as well as through an interagency 
process to ensure that it reflects the U.S. position. This plan will 
then go to the representatives of AMEC partners for final approval.

16. Page 34, middle paragraph, fourth line - Change "Since 1996" to 
"From 1996 to 2002." The last line also should have "not" after 
"does."

17. Page 35, top of page, first line - The goal of this project is not 
to remove radioactive waste from decommissioned nuclear submarines but 
to improve the buoyancy of these submarines to keep them from sinking 
while awaiting dismantlement. 

(360424): 

FOOTNOTES

[1] Nuclear submarines are powered by nuclear reactors that are encased 
in the hull. Russia's nuclear submarines include ballistic missile 
submarines that are designed to launch nuclear weapons, guided cruise 
missile submarines, torpedo attack submarines, and special mission 
purpose submarines. This report refers to all Russian nuclear 
submarines except for the ballistic missile submarines as general 
purpose submarines.

[2] The spent nuclear fuel accounts for 99 percent of the radioactivity 
from decommissioned nuclear submarines and requires special handling.

[3] The process for submarine dismantlement and radioactive waste 
removal is extensive and complicated. It requires the removal of 
deckhouse enclosures and other detachable parts while the submarine is 
still afloat. Then the submarine's spent nuclear fuel is removed, and 
the reactor compartments are cut out and prepared for long-term 
storage. Most submarines have two reactors, each containing 180-280 
fuel assemblies. The reactor compartments are sealed and buoyancy 
compartments are attached. This process creates liquid and solid 
radioactive waste. The missile compartment and bow and stern are 
removed and the remainder of the hull is recycled where feasible. 
According to a DOD official, the dismantlement process, including the 
transportation of the spent nuclear fuel, can take up to 18 months.

[4] In 2003, several countries, including the United States, signed the 
Multilateral Nuclear Environmental Program in the Russian Federation, 
to facilitate the implementation of nuclear-related assistance programs 
with Russia. It was intended that this agreement would provide, among 
other things, liability protection to countries working with Russia. 
However, the United States has not signed the liability annex to the 
agreement because the United States is negotiating a separate liability 
agreement with Russia.

[5] The project covered the design, licensing, and construction of the 
prototype container. Certification of the container was delayed for 
about 2 years due to a jurisdictional dispute between Gosatomnadzor, 
the Russian civilian nuclear regulatory authority, and the military 
regulatory authority in Russia regarding the relative roles and 
responsibilities for transport and handling of the spent nuclear fuel 
using both military and civilian equipment. 

[6] The storage pad, which is located adjacent to the Nerpa shipyard, 
is being used to collect spent nuclear fuel from a variety of sites in 
northwest Russia. The shipyard, which has CTR-supplied equipment and 
infrastructure improvements, will also be available for the 
dismantlement of Russia's general purpose nuclear submarines.

[7] According to EPA, CTR subsequently canceled funding for the 
construction of the large dehydration facility after the design had 
been completed. EPA officials informed us that to their knowledge there 
is no dehydration system in Russia that meets western standards. 
Therefore, corrosion and chemical decomposition (hydrolysis) can occur 
over long-term storage of the containers with spent nuclear fuel.

[8] Australia, Denmark, Finland, the Netherlands, Norway, and Sweden 
are also engaged in this area through supporting nuclear and 
environmental work in northwest Russia, or, in the case of Norway, 
through direct funding of the dismantlement of submarines. Australia, 
which joined the G-8 Global Partnership in 2004, plans to work with 
Japan to support the dismantling of general purpose submarines in the 
Pacific region. 

[9] The National Nuclear Security Administration is a separately 
organized agency within DOE that was created in October 1999 with 
responsibility for the nation's nuclear weapons, nonproliferation, and 
naval reactors programs.

[10] For more information on this issue, see GAO, Weapons of Mass 
Destruction: Additional Russian Cooperation Needed to Facilitate U.S. 
Efforts to Improve Security at Russian Sites, GAO-03-482 (Washington, 
D.C.: Mar. 24, 2003). 

[11] DOE's Office of Global Radiological Threat Reduction's mission is 
to reduce the threat posed by high-risk radiological materials that 
could be used in a dirty bomb by identifying and securing such 
materials on a worldwide basis. 

[12] For more information, see GAO, Nuclear Nonproliferation: U.S. and 
International Assistance Efforts to Control Sealed Radioactive Sources 
Need Strengthening, GAO-03-638 (Washington, D.C.: May 16, 2003).

[13] The impasse over liability protection focuses on Russia's failure 
to ratify an extension of the agreement used to establish the CTR 
program. That agreement, which entered into force upon signature in 
1992, contained a blanket exemption from liability for all activities 
funded through the CTR program. The agreement's term was 7 years, but 
in 1999 the United States and Russia agreed to a provisionally applied 
7-year extension. However, the Russian parliament has not ratified the 
extension. The U.S. position is that CTR ratification is a necessary 
precursor to consideration of liability issues in other agreements with 
Russia.

[14] Prepared by Joshua Handler, Research Coordinator, Greenpeace Trip 
Report, Subject: Radioactive Waste Situation in the Russian Pacific 
Fleet, Nuclear Waste Disposal Problems, Submarine Decommissioning, 
Submarine Safety, and Security of Naval Fuel, (October 27, 1994).

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