Australia mulls chemical supply chain actions to stop terrorism

Fears about terrorist attacks using homemade explosives prompted Australia to investigate how to limit supply of certain chemicals. Public access to some of the chemicals is already restricted but a report commissioned by the Australian Attorney General fears existing safeguards are insufficient.

“Individuals or groups seeking to access precursor chemicals would need to overcome only a few barriers that hinder the ability…to divert chemicals for illegitimate use​”, the report by PricewaterhouseCoopers​ (PwC) found.

Of the 11 chemicals considered by the report, nitromethane is of particular interest to drugmakers. Nitromethane is used in the synthesis of derivatives, such as nizatidine, ranitidine, and sulpiride, which treat peptic ulcers, psychosis and other diseases.

When mixed with ammonium nitrate, nitromethane can be used as an explosive in mining, oil-well drilling, and seismic exploration. The explosive properties of nitromethane were investigated after two train accidents in 1958​.

Voluntary approaches​

The report considers four approaches to stopping terrorists obtaining the 11 chemicals. These range from a campaign to educate businesses about managing security risks, to regulations that would allow the police to charge companies for failing to comply with a code of practice.

PwC estimated the cost of adopting the four approaches and compared this to the likelihood of preventing a terrorist attack in the coming decade. After running this analysis PwC recommends a code of practice, drafted either by industry or the government, as the preferred option.

In comparing the two options, the authors wrote that “it would appear more appropriate​” for the government to draft the code of practice as it is a national security issue. Stakeholders are invited to send feedback.

The cost of regulation​

Of the two approaches PwC recommends against adopting, an education campaign is deemed to be insufficient to cut medium to long-term risks, while regulation is viewed as being too expensive.

“[Regulation] is likely to impose significant costs on industry and it is not reasonable to expect that it would be able to prevent…the minimum amount [of terrorist attacks] required for the costs associated with the option to be justified on a break-even basis​”, PwC wrote.

PwC estimated that over the next 10 years it would cost AU$5.1bn ($5.5bn) to adopt regulations. This is more than 60 times the estimated cost of the next most expensive option, the government drafted code of practice.