Overview
	Technical Background
	The Threat
	Securing Nuclear Warheads and Materials
	Interdicting Nuclear Smuggling
Stabilizing Employment for Nuclear Personnel   International Science & Technology Centers   Nuclear Cities Initiative   Initiatives for Proliferation Prevention   Civilian Research & Development Foundation   Impact of Other Programs
	Monitoring Stockpiles
	Ending Further Production
	Reducing Stockpiles

 

Help Using this Section

Previous Publications
	Funding for U.S. Efforts to Improve Controls Over Nuclear Weapons, Materials, and Expertise Overseas: Recent Developments and Trends February2007 Readthe Full Report (1.5M PDF)
	Securing the Bomb 2006 The latest report in our series, from May 2006, finds that even though the gap between the threat of nuclear terrorism and the response has narrowed in recent years, there remains an unacceptable danger that terrorists might succeed in their quest to get and use a nuclear bomb, turning a modern city into a smoking ruin. Offering concrete steps to confront that danger, the report calls for world leaders to launch a fast-paced global coalition against nuclear terrorism focused on locking down all stockpiles of nuclear weapons and weapons-usable nuclear materials worldwide as rapidly as possible. Read the Executive Summary (379K PDF) or the Full Report (1.7M PDF)
	Securing the Bomb 2005: The New Global Imperatives Our May 2005 report finds that while the United States and other countries laid important foundations for an accelerated effort to prevent nuclear terrorism in the last year, sustained presidential leadership will be needed to win the race to lock down the world’s nuclear stockpiles before terrorists and thieves can get to them. Read the Executive Summary (281 K) or the Full Report (1.9M PDF)
	Securing the Bomb: An Agenda for Action Building on the previous years' reports, this 2004 NTI-commissioned report grades current efforts and recommends new actions to more effectively prevent nuclear terrorism. It finds that programs to reduce this danger are making progress, but there remains a potentially deadly gap between the urgency of the threat and the scope and pace of efforts to address it. Download the Full Report (1.2 M PDF) Выписки из доклада по-русски (423K PDF)
	Controlling Nuclear Warheads and Materials: A Report Card and Action Plan 2003 report published by Harvard and NTI measures the progress made in keeping nuclear weapons and materials out of terrorist hands, and outlines a comprehensive plan to reduce the danger. Download the Full Report (2.7M PDF)
	Securing Nuclear Weapons and Materials: Seven Steps for Immediate Action 2002 report co-published by Harvard and NTI outlines seven urgent steps to reduce the threat of stolen nuclear weapons or materials falling into the hands of terrorists or hostile states. Read the Full Report (516K PDF)

Stabilizing Employment for Nuclear Personnel

Initiatives for Proliferation Prevention

Status

Overall, through fiscal year (FY) 2002, IPP reports that is has engaged 13,000 NIS scientists, engineers, and technicians, with 6,700 of them working in 2002 on active projects.[2] Thirteen projects have become full commercial ventures, and 850 high tech jobs have been created in Russia alone. IPP seed funds of $90 million have elicited $125 million in private sector matching funds directed towards IPP projects. Through 2002, there were 176 projects underway at 56 institutes Russia, while there are six institutes hosting 14 projects in Kazakhstan and 13 projects underway at nine institutes in Ukraine. Of the projects in Russia, 64 are with facilities in the closed nuclear cities. In FY 2001 alone, IPP participants had 54 publications in refereed journals, while three patents to IPP projects were issued and another 11 patent applications were submitted.

IPP projects fall into one of three phases:

• Thrust 1, in which teams at U.S. National Laboratories engage NIS institutes to evaluate that institute's potential strengths for commercialization and investigate specific projects that appear to have promising commercial prospects;

• Thrust 2, in which a private U.S. company is a full member of the lab-institute partnership, matching each dollar of DOE funding with at least one dollar of its own funding, and guiding the work towards commercializing a specific product or service; and

• Thrust 3, in which DOE ends direct financial support of the partnership and the U.S. private company and the NIS institute work to sustain a viable private venture.[3]

It is not necessarily the case that individual projects will progress through each of the three phases. For instance, Thrust 1 projects that do not receive private U.S. industry support are altered or terminated altogether, while most Thrust 2 projects begin with U.S. private partners, rather than graduate from a Thrust 1 project.[4] While there were a large number of Thrust 1 projects in the early years of the program, in recent years it has focused almost exclusively on funding Thrust 2 projects so that they can graduate to Thrust 3 – complete commercial independence from government support.

Background. The Initiatives for Proliferation Prevention began as the "Industrial Partnering Program," as authorized by Section 575 of the Foreign Operations, Export Financing and Related Programs Appropriations Act of 1994.[5] Initially, IPP efforts were focused largely on engaging NIS institutes of interest to the United States because of their WMD expertise and their potential ability to use that expertise for commercial, peaceful purposes. These initial contacts focused more on building confidence with the partnering institutes and exploring initial prospects for commercial development; serious market commercialization was given less emphasis in the early years of the program.[6] As a result, from the program's inception through 1998, 80% of the over 400 projects funded were Thrust 1 projects, while only two out of the remainder were Thrust 3.[7]

By late 1997, however, IPP shifted its focus squarely to commercialization. In this IPP was attempting to distinguish itself clearly from the State Department-led International Science and Technology Centers (ISTC)program, which was seeking to cast a wider net than IPP by engaging as many NIS scientists and engineers with WMD as expertise as possible in virtually any peaceful scientific research with reasonable scientific merit. Like ISTC, IPP projects must serve a nonproliferation goal by reducing a risk that an NIS scientist or institutes, left to its own, might negatively contribute to proliferation of WMD expertise.

Unlike ISTC, however, the method IPP uses to reach this goal is not just to gain access to scientists and provide important but supplemental assistance in exchange for time spent on useful scientific research. Instead, IPP works to assist U.S. companies in overcoming the many inherent difficulties to be faced in trying to make use of the impressive scientific and technical talent of Russia's weapons scientists in order to develop commercially viable products. IPP's role is to help clear away some of the brambles and thorns blocking U.S. companies from linking up with the scientific talent and expertise to be found in the NIS WMD complex to launch viable commercial ventures that will provide employment to those scientists, reducing proliferation risks, and economic benefits to the U.S. marketplace.

A February 1999 report by the U.S. General Accounting Office (GAO) criticized IPP for a number of failings, including: the fact that less that 40% of all program funds in the early years had reached NIS scientists and their institutes; DOE's inability to verify that program funds were targeting key WMD scientists and institutes; and the taxation of IPP and U.S. private company payments to participating NIS scientists by NIS governments.[8] To sustain political support for the program, IPP was forced to aggressively address the concerns raised by the report.

That effort paid off, so much so that by June 2001, the House Appropriations Committee reported to the full House of Representatives that it believed, "Management of the IPP program has improved considerably in recent years," and suggested that DOE's Nuclear Cities Initiatives address the problems it was then facing by adopting "the same standards, applications, and approval procedures already in place at the IPP program." [9] Congress, in fact, directed that two programs be put under a single overall manager, and funded jointly out of a new line, now known as "Russian Transition Initiatives" (RTI). Also in 2001, IPP was also supported by the Bush administration's review of nonproliferation and threat reduction assistance to Russia, and the Bush administration decided to devote $36 million of the $57 million Congress appropriated for RTI to IPP, the highest one-year total it had ever received.[10]

Organization and Roles. The program in the United States involves the participation of three central organizations. First, the IPP Program Office at DOE Headquarters is responsible for the overall management of the program.[11] They provide, in DOE’s words, "policy formulation and direction, management oversight, coordination, and performance analysis."[12] The IPP Program Office also shepherds project proposals through the many reviews each project must undergo.

These reviews work to ensure that projects contribute to nonproliferation by involving scientists and engineers with WMD expertise, that they do not constitute a technology which could have a direct weapons application or could further NIS weapons capabilities, that they are technically sound, that they do not overlap inappropriately with other nonproliferation programs such as ISTC, and, critically, that they would support viable commercial ventures that could help support NIS partners in the long-term.[13] The IPP Program Office examines the nonproliferation, overlap, and dual-use characteristics of project proposals in concert with officials from the State Department (including certainly the staff responsible for the ISTC program), the Department of Defense, and other agencies as appropriate.

The second main organizational pillar of the IPP program is the Interlaboratory Board (ILAB), made up of representatives from ten national laboratories and DOE's Kansas City Plant. The ILAB works to match individual project teams at the national labs with a partner institute in the Former Soviet Union and to provide initial scientific evaluations to the DOE Program Office.[14] The individual labs and their representatives on the ILAB are responsible for making initial contacts with potential partners among the NIS weapons institutes, providing oversight on the work of the U.S. and NIS project teams, and keeping the DOE Program Office informed on progress and problems with individual projects. The ILAB is responsible for reviewing project proposals for their technical, dual-use, and nonproliferation credentials.[15]

The third major component on the U.S. side of IPP is the U.S. Industry Coalition (USIC), a non-profit organization created at the onset of IPP to provide the mechanism for U.S. private sector involvement.[16] In much the same way as the ISTC’s Partner Program, U.S. companies and universities who wish to participate in an IPP project must join USIC. USIC works with the IPP Program Office and the ILAB to provide technological and commercial evaluations on potential Thrust 1 partners and projects, while recruiting potential U.S. private sector participants for Thrust 2 and 3 projects and publicizing the opportunities and success of those projects that are moving forward. Similar to the relationship of the ILAB to the individual Labs partnering on individual projects, USIC's various member companies and other organizations actually run the partnerships with individual NIS institutes on their projects; USIC represents their collective interests to the IPP Program Office and to the public at large.

Partnerships with Other 'Brain Drain' Programs. Following the finding by the 1999 GAO report that IPP funds being paid to Russian institutes were being taxed as income, Congress directed IPP to find mechanisms to exempt Russian and other NIS scientists from being taxed on U.S. funding.[17] Indeed, for almost a year in 2000-2001, funding to projects in Kazakhstan had to be halted because of failure to solve the taxation problem.[18]

The IPP Program Office looked to the mechanisms already in place by which the Civilian Research and Development Foundation (CRDF) and the International Science and Technology Centers in Russia and Ukraine (ISTC/STCU) were providing tax-free payments to Russian, Ukrainian, and Kazakh scientists. Beginning in November 1999, CRDF, through its Grant Assistance Program, has administered tax-free payments for over 80 projects in Russia and Ukraine on behalf of the IPP Program Office and the eleven DOE facilities.[19] ILAB officials inform the IPP Program Office, as they had done in the past, when payments to the NIS partner institutes are approved to go forward, but under this agreement, IPP then transfers funds to CRDF for them to actually pay the scientists and their institutes.[20]

Additionally, in 2001, IPP signed agreements with ISTC to provide tax-free payment services to scientists and institutes in Russia and Kazakhstan, and with STCU to provide such payments to Ukrainian partners.[21] This provided redundancy to the CRDF arrangement in Russia and Ukraine, and allowed the Kazakh program to restart. However, the new arrangements provide new challenges, because to use the ISTC/STCU mechanism, U.S. private industry participants and the U.S. National Laboratories must become part of those organizations’ Partner Programs. According to the former Chair of the ILAB:

"The budget and workplan for ISTC Partner Projects as well as identification of personnel and hourly pay-rates typically occupies several months on the part of our NIS project managers. Internal institute approvals and reviews by [Russia's Ministry of Atomic Energy – MINATOM] consume more months. Finally the ISTC’s own review process adds another two months or more."[22]

To ensure that such reviews do not cause undue delay for program participants and hamper the attractiveness of the program for private partners, ILAB and IPP Program Office staff are working with participants to begin the review ISTC/STCU and CRDF application and review processes in parallel with the IPP project proposal process.[23]

Budget

See budget table

From the initial appropriation of $35 million in FY 1994 through FY 2002, the Initiatives for Proliferation Prevention program has received a total of $218.6 million in appropriations.[24] The first $35 million was appropriated to the State Department, which then transferred that funding to DOE and the national laboratories in the initial Industrial Partnering Program. In FY 1996, the Department of Defense transferred $10 million of its own Cooperative Threat Reduction funds to DOE for the program, while DOE spent $9.6 million on its own. Since FY 1997, DOE has been the sole funder of the program. In all, $173.6 million has been appropriated to DOE to carry out the IPP program. As noted earlier, the FY 2002 appropriation was $36 million, and the FY2003 request is $22.6 million, close to its typical historical funding levels, though substantially below the FY 2002 level.

In addition, through 2002, IPP reports that $125 million in private sector matching funds went towards IPP projects.[25]

Key Issues and Recommendations

Best Approaches to Technology Commercialization. Currently, the main approach to commercialization pursued in the IPP program is to provide government subsidies to potentially promising research projects and attempt to partner them with commercial firms interested in bringing the technologies to market. DOE's national laboratory experts serve as the principal "technology scouts" for the effort, visiting Russian institutes to attempt to identify projects with commercial potential, and attempting to locate U.S. private firms that might be interested in particular projects. While this approach has led to some successful commercializations, it may be that a broader set of commercialization tools would be more effective. The reality is that the U.S. national laboratories have had only limited success in commercializing their own high technologies, in the vibrant U.S. high technology market. Technology scouts from the commercial sector might be more attuned to picking technologies with maximum commercial interest – or reshaping projects so that similar skills could be used in a way that would be of commercial interest. One could imagine, for example, providing initial start-up funding for a small group that would visit Russian institutes, assess projects for commercial potential, seek commercial partners for them – and then take a fraction of the profit from successful projects. Another possible tool is the "high-technology incubator" approach: in the United States, a significant number of such incubators have been established, which have been successful in promoting high-technology commercialization by providing a more comprehensive set of services to technologists with a potentially promising idea, ranging from start-up capital, to help with establishing a management team and a business plan, to marketing, to forging strategic partnerships. Finding commercially promising technologies at isolated Russian weapons institutes, and retooling Russian weapons scientists, engineers, and institutes to compete in a global market are daunting challenges – which likely can be met most effectively with the broadest set of tools, with the best prior track record.

• Recommendation: IPP should convene an advisory panel of academics, practitioners, and members of private industry who possess extensive experience with and knowledge about economic development, high-technology commercialization, and technological incubation programs in the United States and overseas, including at least some with knowledge of contemporary Russian market conditions. This panel would work to help IPP apply the best practices being used in high technology commercialization around the world.

Reaching High-Risk Weapons Scientists. Like the International Science and Technology Centers (ISTC) program run by the State Department, the fundamental purpose of the Initiatives for Proliferation Prevention is to reduce the likelihood that any NIS scientist or engineer with WMD expertise will provide that expertise to terrorists or states trying to obtain WMD to threaten the security of the United States and its allies. Engaging a broad number of scientists and engineers is certainly a worthy goal, but targeting efforts at the most worrying scientists and engineers is essential to ensure all too scarce funding goes as far as it can. IPP program officials have clearly recognized this in their list of important performance metrics, but it is critical to continuously fine-tune those measures to ensure that the goal being pursued is truly being accomplished. An obvious question to which IPP has not provided a public answer, for example, is: how many of the 850 high-technology jobs created in Russia are in fact held by former weapons scientists or engineers, and of those, how many are the senior ones of most concern?

• Recommendation: DOE and State Department officials, along with the Department of Defense, intelligence agencies, and executive branch offices responsible for program oversight, should collectively determine the specific criteria for ranking the proliferation risk posed by particular scientists and institutes. This team should then make a concerted effort to collate all the information they can locate – and to begin gathering all the new information they can – to assign specific risk evaluations to participating scientists, to help guide decisions about who should be targeted for involvement in the ISTC and IPP.

Broadening the Eligibility for Private Sector Participation. Currently private industry participation requires membership in the United States Industry Coalition. This means that a Russian, Ukrainian, or Kazakh company interested in redirecting the talents and knowledge of WMD scientists and engineers in their own country, much less an enterprising European or Asian firm, cannot expect any assistance from the IPP program. However, the point of IPP is to reduce the threat of WMD proliferation by stabilizing NIS scientists with WMD expertise; failing to locate an interested U.S. partner should not necessarily disqualify a project with high nonproliferation value from U.S. support, if other partners are available.

• Recommendation: At the least, Congress should specifically authorize IPP to support projects that have Russian, Ukrainian, and Kazakh private sector partners who would meet the commercial and nonproliferation criteria imposed on U.S. partners. Supporting successful projects with private NIS companies would be a win-win for IPP, meeting its nonproliferation goal and helping in a small but important way the larger economic context in which NIS scientists and engineers with WMD expertise find themselves. Congress should also consider authorizing IPP to support projects with commercial partners from Europe and Asia, as long as they meet similar criteria. The Bush administration should work to establish mechanisms, as part of the new Global Partnership Against the Spread of Weapons and Materials of Mass Destruction, for other countries to participate in, and help finance, efforts to partner firms from states participating in the partnership with weapons technologists from the former Soviet Union.

Outlining a Plan for Success. Like all the other programs trying to control nuclear warheads and materials, it is imperative that DOE, State Department, and Department of Defense officials, along with other executive and legislative branch policymakers, determine exactly what it will look like when the threat of NIS expertise in WMD leaking out is under control. Over a decade after the collapse of the Soviet Union, the countries of the former Soviet Union have changed, the key risks have changed, and strategies will have to change – though it is clear that leakage of weapons-related knowledge is still an important threat. (See The Threat in Russia and the NIS.) U.S. policymakers need to clearly identify what final state they are seeking to achieve, what tools they intend to use to get there, what level of resources they expect that to require, and how long they expect that to take.

• Recommendation: As with the programs for Interdicting Nuclear Smuggling, executive branch officials should devise and communicate to Congress a strategic plan describing the exact nature of the threat of WMD knowledge leakage, the final goal of these programs in reducing or eliminating that threat, the strategy that will be used to reach that goal, and the time and resources that will be need to carry out that strategy.

• Recommendation: Such a strategic plan should map out an approach to the problem of stabilizing former weapons scientists and workers, which clearly defines what activities will be done by each program, and why that is the most effective approach. In defining these roles and responsibilities, the strategic plan should delineate the strengths and weaknesses of each program, and affirm or restructure the approach as a whole to take advantage of those strengths while minimizing the costs borne by the taxpayers.

Challenges in Implementing Tax-Free Arrangements. Using the CRDF and ISTC’s already established tax arrangements to provide payments to NIS partner institutes and individuals was a clearly advantageous solution for IPP, allowing the program to survive the reasonable Congressional insistence that U.S. taxpayer dollars go to reducing proliferation threats, not to filling NIS governmental coffers. However, using the ISTC/STCU mechanism requires another layer of project review, because the NIS collaborators have to prepare the budget and workplan for the ISTC Partner Program and then the ISTC and STCU as a whole have to review the project. DOE, the ILAB, and USIC have now begun to carry out their review processes in parallel with the ISTC and STCU processes, in an effort to ensure that the various review processes do not turn away potential private sector partners.

• Recommendation: A U.S. Government strategic plan for programs to stabilize nuclear and WMD personnel should clearly define a unified State-DOE-Defense project consideration process that combines ISTC, IPP, NCI, and CRDF initial project consideration and then directs approved projects to through the appropriate mechanism.

Links