Civil Nuclear Cooperation with India - The Way Ahead

The article was published in the Indian Pugwash Society’s in-house newsletter Proliferation and Arms Control, Nov-Dec 2006, Vol III, No. 11, pp. 1-3. The article was published while I was Associate Fellow at the Society. 

With the “Henry Hyde United States–India Peaceful Atomic Energy Cooperation Act” receiving the Presidential assent, a significant milestone in the Indo-US civilian nuclear cooperation has been achieved. This is however, only the first of the three important steps that will follow before India can engage in civilian nuclear trade with the rest of the world.

The 123 Agreement

The first step involves the finalisation of a “123 agreement.” The reason why the agreement is called so because of section 123 of the US Atomic Energy Act (AEA)1954 that establishes an agreement for cooperation as a prerequisite for nuclear trade between the US and any other country.[i] Section 123 a (2) of the AEA 1954 states that “in the case of non-nuclear-weapon states, a requirement, as a condition of continued United States nuclear supply under the agreement for cooperation, that IAEA safeguards be maintained with respect to all nuclear materials in all peaceful nuclear activities within the territory of such state, under its jurisdiction, or carried out under its control anywhere.”[ii] In the case where the US is entering into nuclear cooperation with a country which has full scope safeguards, the agreement would come into effect within 90 days of its submission for congressional review unless a resolution of disapproval is passed in both Houses.

On the other hand nuclear cooperation with India would come into effect only if both Houses of Congress pass a joint resolution of approval within 90 days. If either chamber does not approve the resolution, the agreement does not enter into force. This is a much more difficult hurdle to cross as it would require concerted action on the part of the Bush administration. Given the changed composition of the Houses, this would be a much more difficult act to follow for the Bush administration. There is however a danger that both the US administration and the members of both the Houses would be aware of that is of the US energy companies being left behind in the race to capture the Indian nuclear market. The first mover would have a significant advantage over the late entrants and the Congress would not like to send out a negative message to the domestic lobby by dilly dallying on the issue.[iii]

Cognizant of this danger, the Bush administration had originally framed its legislation requiring a joint resolution of disapproval rather than a joint resolution of approval. This would have significantly reduced the leverage that the Congress would have had over the future of the nuclear agreement as in practice; it is very difficult to secure passage of such resolutions because a veto by the President of the joint resolution would require a two-thirds vote in both the Houses to override.[iv] However, both the Houses of the Congress rejected the administration’s approach saying that it did not provide for appropriate congressional oversight.[v]



Issues relating to the NSG

The second issue at hand relates to the Nuclear Suppliers Group (NSG). The NSG is a very crucial piece of the puzzle and modification of the NSG Guidelines is imperative before its members start civilian nuclear trade with India. The Group’s importance emanates from its membership, which in effect includes every major and minor supplier of nuclear material and technology in the world today, except for India, Pakistan and Israel. The NSG has been waiting for the US Congress to finish its deliberations on the civil nuclear cooperation bill. With President Bush giving his assent to Henry Hyde United States–India Peaceful Atomic Energy Cooperation Act, the wheels can finally start rolling within the NSG.

As the NSG works by consensus, it is important that the Bush and Manmohan administrations are able to bring the stand-outs into the fold. The most important stand-outs in the Group are China, Japan and several Scandinavian countries like Ireland and Sweden. Though it might be easier to bring in the Scandinavian powers, China could cause significant hindrances within the Group.

With regard to the NSG, there are two very important documents that one has to take note of. First, is the Bush administration’s “pre-decision draft” that it circulated to the NSG members in March at the Consultative Group meeting in Vienna[vi] and second is the background report attached by the conferees to the Henry Hyde United States–India Peaceful Atomic Energy Cooperation Act. There are two important issues that need to be resolved within the Group with regard to the India specific exemption. The first issue is that of Termination of Transfer and the second relates to the future of India within the NSG.

With regard to the Termination of transfer, the background report of the Conferees and the Section 103 (a) (6) of the Hyde Act has urged that the US policy must be to seek to prevent the transfer “to a country” of any nuclear material from the NSG members if the if the US itself terminates or suspends nuclear transfers to India. On the other hand, the pre-decisional draft put out by the US in the NSG meeting in Vienna says that “Participating governments may transfer trigger list items and/or related technology to the safeguarded civil nuclear facilities as long as the participating government (India) continues to fully meet all the aforementioned non-proliferation principles and safeguard commitments and all other requirements of the NSG Guidelines.” If the NSG decides to go with the US draft put out in March at the Vienna meeting then India would have not problem at all. In all likelihood what is likely to happen is that the NSG will be steered by the US to find a middle ground between these two documents.

The second issue that is very crucial for India with regard to the NSG is whether the Group will expand its fold to include India as a member. This is very important due to that fact that if India does not become a member then, it will have to adhere to NSG Guidelines and the related conditionalities and future amendments but will not be a party to the decision making process as only members can participate in the process.

India specific IAEA safeguards

The last stumbling block is that of the India specific IAEA safeguards that have to be bilaterally negotiated between India and the IAEA. The safeguards will only apply to the civilian designated facilities in the Indian separation plan and will be undertaken by IAEA Safeguards inspectors. As brought out in Secretary Rice’s congressional testimony, the safeguards that India will negotiate will be based on the INFCIRC/66/Rev.2. The INFCIRC/66/Rev.2 is not a model safeguards agreement unlike INFCIRC/153 which is the model safeguards agreement for non-nuclear weapon states under the NPT. The fact that India is not likely sign a safeguards agreement based strictly on INFCIRC/153, as this would require safeguards on India's nuclear weapons program was brought out by Secretary Rice as well as Undersecretary Joseph in their testimonies.[vii]

One issue within the ambit of the IAEA safeguards that has kicked up a lot of dust within the Indian strategic community relates to the issue of ‘fallback safeguards.’ There have been reports that have made it seem as if the IAEA safeguards would in effect mean US inspectors roaming around in our civilian nuclear facilities. The Prime Minister himself in the August statement made in the Parliament tried to allay any such fears. What the Conferees in the background report have said is that these Safeguards would kick in when the IAEA is unable to fulfil its duties because of “budget or personnel strains.”[viii] India should make it clear that this should not be the case. Fallback safeguards should not apply in case of budgetary and administrative concerns. This is not the case anywhere in the world and as the IAEA is already under budgetary strains, which would only increase manifold with the Indian civil nuclear facilities being added to the safeguarded list, such a clause should not be accepted by the Indian side while negotiating with the IAEA.

Another issue related to the Safeguards in perpetuity issue is the Indian demand that the assurances should be provided against disruption in fuel supply. Secretary Rice has mentioned in her testimony that “India can be provided with the assurances it seeks for fuel supply consistent with safeguards in perpetuity.”[ix]

The work on opening the gates of civilian nuclear cooperation to India has just begun. There are still many important steps that have to be taken, many issues where the two countries have to work together, before the long Indian nuclear winter imposed by the international community since 1974 can come to an end.

Endnotes
[i] K.P. Nayar, “Pact with US to close weapon door,” The Telegraph, 17 April 2006, available at http://www.telegraphindia.com/1060417/asp/frontpage/story_6108119.asp
[ii] US Atomic Energy Act, 1954, Article 123a (2), 42 USC 2073. 42 USC 2074. 42 USC 2077. 42 USC 2094. 42 USC 2112. 42 USC 2121. 42 USC 2133. 42 USC 2134. 42 USC 2164.pg. 57
[iii] “The NSG and assuring a level playing field for American companies - Senate Report 109-288,” Thomas Library of Congress, available at http://thomas.loc.gov/cgi-bin/cpquery/?&sid=cp109VDpoA&refer=&r_n=sr288.109&db_id=109&item=&sel=TOC_304167&
[iv] Joint Explanatory Statement of the Committee of Conference, 7 December 2006, available at http://thomas.loc.gov/cgi-bin/cpquery/T?&report=hr721&dbname=109&
[v] Ibid.
[vi] U.S. Government Circulated Draft Pre-Decisional, March 2006, available at http://www.armscontrol.org/projects/india/20060327_DraftNSGProposal.asp
[vii] “India's Safeguards Agreement - Senate Report 109-288,” Thomas Library of Congress, available at http://thomas.loc.gov/cgi-bin/cpquery/?&sid=cp109VDpoA&refer=&r_n=sr288.109&db_id=109&item=&sel=TOC_576479&
[viii] Section 104(d)(5)(B)(iii) of the Hyde Act as explained in the Joint Explanatory Statement of the Committee of Conference, 7 December 2006, available at http://thomas.loc.gov/cgi-bin/cpquery/T?&report=hr721&dbname=109&
[ix] “India's Safeguards Agreement - Senate Report 109-288,” Thomas Library of Congress, available at http://thomas.loc.gov/cgi-bin/cpquery/?&sid=cp109VDpoA&refer=&r_n=sr288.109&db_id=109&item=&sel=TOC_576479&

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