Defense Environment Alert
an exclusive biweekly report on defense policies
for cleanup, compliance and pollution prevention
Vol. 12, No. 2--January 27, 2004
DOD INVESTMENT IN RUSSIAN CHEM
DEMIL PROJECT AT RISK, IG SAYS
Despite spending over $200 million on a chemical weapons destruction facility
in Russia, the U.S. Defense Department has failed to mitigate for risks that
could derail full use of the facility, potentially resulting in a lost investment,
the Pentagon's inspector general (IG) says in an audit dated Dec. 18.
The IG is pressing the DOD deputy under secretary for technology security
policy and counterproliferation for
answers on how it plans to address several of the chemical demilitarization
issues raised in the report, noting that the
deputy under secretary's initial response to the findings was non-responsive
in these areas. The second set of
responses was due Jan. 20, and at press time, a DOD spokesman said a response
had been sent back, but he declined
to release it.
The audit is critical of the Defense Department's handling of various risk
factors that could impede projects,
including the Russian chemical demilitarization facility, under the Cooperative
Threat Reduction (CTR) program.
DOD administers the CTR program, which provides assistance to countries of
the former Soviet Union to destroy
their arsenal of chemical, nuclear and other weapons, among other things,
in order to lower the threat posed by
weapons of mass destruction in those countries. The report is available on
InsideEPA.com. See page 2for details.
The report lists a number of risks to the chemical demilitarization facility
that is being built in Shchuch'ye,
Russia, through U.S. funds. At the site, the Russian government plans to
destroy 5,460 metric tons of sarin, soman
and VX nerve agent through neutralization followed by a solidification process
known as bituminization. The risks
include potential litigation that would cause Russia to rescind the land
allocation for the facility, possible delayed
facility design approvals that would postpone construction and increase costs,
potential Russian abandonment of a
plan to use the designed bituminization building, and environmental law prohibitions
that could cause the suspen-
sion or termination of the construction and operation of the destruction
facility. Construction delays or the rescind-
ing of the land allocation could result in the United States losing out on
the $203.9 million it has invested in the
destruction plant, the IG says.
These risks are present because U.S. agreements with Russia do not fully
protect U.S. interests, and DOD failed
to identify all significant risk factors when assessing the chem demil project,
the report says.
One problem is design changes. Russia and the United States developed a plan
to destroy neutralized nerve
agent through bituminization, a process that encases the neutralized chemicals
in a type of asphalt for long-term
storage. But Russian officials have more recently said they are considering
incineration to destroy the neutralized
chemicals, prompting U.S. officials to say they will not fund such a facility.
As of July 2003, DOD had spent $1.1
million on the design of the bituminization building, the report says.
Also, due to recalculations, the water to be drawn for certain areas of the
destruction plant violates Russian
environmental protection regulations and procedures, according to the findings
from a regional environment board,
the IG says. If the board does not accept certain revisions, the destruction
facility "cannot become operational and
be used to destroy Russia's nerve agents," the IG notes.
And potential litigation could block the location chosen for the destruction
plant. "Although the Governor of
the Kurgan Oblast granted a general land allocation for the [destruction
plant] in March 2000, concerns over the
transportation of nerve agents into Shchuch'ye may cause the Governor to
take action to suspend the land allocation
for the [plant]," the IG says. And while a March 2003 amendment to the implementing
agreement committed Russia
to eliminate all of its nerve agent at the Shchuch'ye plant, that may not
be enough, the report says. U.S. defense and
Army officials "confirmed that local governments could use the courts to
suspend or render null and void the land
allocation."
The implementing agreement with Russia is lacking in several ways, the IG
says. It does not require Russia to
destroy the neutralized agent through bituminization, nor does it require
the Russian government to provide con-
struction approvals on a timely basis.
Also the U.S. Defense Threat Reduction Agency (DTRA) failed to identify all
important risk factors when
assessing the project. "Although DTRA identified cost, schedule, performance,
and partnering with Russia as risk
factors in its project plans for 2000 through 2002, it did not identify environmental
concerns or Russian laws as
risks."
The report says though that DTRA has now acted on an IG draft recommendation
to address the water draw-
down issue.
And while DOD Deputy Under Secretary for Technology Security Policy and Counterproliferation
Lisa
Bronson responded to the draft report's assessment of the chemical demilitarization
project, she did not comment on
two of the three recommendations, and effectively disagreed with the third
recommendation. In the final report, the
1G says it wants answers to these suggestions.
Bronson's office should negotiate amendments to the chemical weapons implementing
agreement, requiring the Russian Munitions Agency to resolve concerns over
the transportation of chemical weapons to the Kurgan region,
and committing Russia to the bituminization process, the IG recommends.
On the third recommendation, the IG calls for obtaining from the Russian
government all necessary design
package approvals for the destruction facility, prior to spending more than
40 percent of the total cost of the facility,
as prescribed by Fiscal Year 2004 Defense Authorization Act language. While
Bronson agreed in principle, she non-
concurred with the recommendation, saying "a monetary cap would increase
project costs without limiting risks,"
the IG report says.
Bronson in her Oct. 31, 2003, response notes that the IG draft report failed
to factor in a significant foreign
policy factor that could limit risks to the destruction facility. "Specifically,
failure to use the facility for its intended
purpose or to live up to its commitments, would result in Russian non-compliance
with its Chemical Weapons
Convention commitments. In general, Russia has tried to posture itself as
a responsible international player and has
tried to illustrate this outlook through successful chemical weapons destruction."