HOW MIGHT INDUSTRY GOVERNANCE BE BROADENED TO INCLUDE NONPROLIFERATION?

Broadening industry governance to support nonproliferation could provide significant new leverage in preventing the spread/diversion of nuclear, radiological, or dual-use material or technology that could be used in making a nuclear or radiological weapon. Industry is defined broadly to include 1) the nuclear industry, 2) dual-use industries, and 3) radioactive source manufacturers and selected radioactive source-user industries worldwide. This paper describes how industry could be an important first line of defense in detecting and thwarting proliferation, such as an illicit trade network or an insider theft case, by complementing and strengthening existing governmental efforts. For example, the dual-use industry can play a critical role by providing export, import, or security-control information that would allow a government or the International Atomic Energy Agency (IAEA) to integrate this information with safeguards, export, import, and physical protection information it has to create a more complete picture of the potential for proliferation. Because industry is closest to users of the goods and technology that could be illicitly diverted throughout the supply chain, industry information can potentially be more timely and accurate than other sources of information. Industry is in an ideal position to help ensure that such illicit activities are detected. This role could be performed more effectively if companies worked together within a particular industry to promote nonproliferation by implementing an industry-wide self-regulation program. Performance measures could be used to ensure their materials and technologies are secure throughout the supply chain and that customers are legitimately using and/or maintaining oversight of these items. Nonproliferation is the overarching driver that industry needs to consider in adopting and implementing a self-regulation approach. A few foreign companies have begun such an approach to date; it is believed that, ultimately, broad engagement of global industry leaders in self regulation will lead to the greatest nonproliferation benefit.