Hidden side

External Affairs Minister Pranab Mukherjee reading out to the media the statement on the NSGs waiver, at South Block in New Delhi on September 6. Atomic Energy Commission Chairman Anil Kakodkar is seated by his side.-V. SUDERSHAN

A U.S. State Department communication meant for Congress gives the lie to the Indian governments claims about the 123 Agreement.

FOR the proponents of the India-United States nuclear deal, it could not have been worse. And from the perspective of the opponents, political and otherwise, it was just perfect. The letter sent on January 16 to the Chairman of the U.S. House Committee for Foreign Affairs, Tom Lantos (who, unfortunately, died soon after in February), concerning congressional review of the India-U.S. civil nuclear cooperation agreement (123 Agreement), became public on September 2, two days before the crucial second round of the meeting of the Nuclear Suppliers Group (NSG) to consider the proposed relaxation of its guidelines that would enable India in nuclear trade.

The letter included replies from the U.S. State Department to 45 questions that the House Committee had asked on October 5, 2007, seeking clarifications on the various provisions of the 123 Agreement vis-a-vis the Hyde Act, the enabling U.S. legislation for civil nuclear cooperation with India passed in December 2006 (Frontline, July 18), and the U.S. Atomic Energy Act (AEA) of 1954, in order that Congress was fully informed of their implications when the agreement would come up for its approval through an up-down vote.

Although the letter contained only unclassified information and was by no means secret, it was kept under wraps until now on instruction from the administration. For, as the administrations spokesperson had said, it could be diplomatically sensitive.

Indeed, the letter caught the United Progressive Alliance (UPA) government completely unprepared. It has caused the government considerable embarrassment and has once again created a political turmoil, providing fresh ammunition to the opponents of the agreement, in particular the Left and the Bharatiya Janata Party (BJP). While the Left has charged the government with lying to Parliament and misleading the public and demanded its resignation, the BJP is seeking to move a privilege motion against it. As soon as the news of the letter (from The Washington Posts story on September 3) reached the government, it immediately summoned all the Indian interlocutors to provide a quick response to the contents of the letter in a bid to contain the increasing outcry against the nuclear deal.

The government put on a brave face and issued the following statement: We do not, as a matter of policy, comment on internal correspondence between different branches of another government [and] we will be guided solely by the terms of the bilateral agreement between India and the United States, the India Specific Safeguards Agreement and the clean waiver from the NSG, which we hope will be forthcoming in the meeting of the NSG on September 4-5. U.S. Ambassador David Mulford too put in his bit in a statement to the media. He said that the letter did not put any new conditions on the 123 Agreement. In a television interview, Anil Kakodkar, Chairman of the Atomic Energy Commission (AEC), said there was nothing new in the letter.

It is obvious that the letter cannot contain anything new because it is merely making the provisions of the agreement clearer to the U.S. Congress, given the statements of the Indian government that were seemingly contradicting the Hyde Act. It simply spells out the U.S. administrations perceptions and interpretations of the agreements provisions that may be ambiguous or not spelt out in detail. The truth of the matter is that the statements of the U.S. administration, in the letter and during earlier congressional hearings, have been consistent. It is the statements of the Indian government, in particular the Prime Ministers assurances in Parliament, that have been to the contrary. The web that the Indian officials had created around the deal with their dishonest spin has now come completely unstuck.

The question is whether Howard Berman, the present Chairman of the House Committee and a known critic of the India-U.S. deal, made the letter public unilaterally or he had the administrations nod to do so. It is quite likely that the administration was itself keen to inform the NSG about its perspective of the agreement and how it would implement it and, therefore, removed the eight-month embargo on it. Notwithstanding the apparently clean waiver granted by the NSG after its marathon three-day meeting in Vienna during September 4-6, the letter containing answers to the House Committee has very clearly brought out the contradictions between Indias perceptions and perspectives on the nuclear deal and those of the U.S. administration.

The Indian government, in particular Union Minister Kapil Sibal, has always, including in its press release of July 2, maintained that the 123 Agreement overrode the Hyde Act, an internal U.S. law, while it was only the bilateral agreement that had implications for India and the provisions of Hyde Act were irrelevant. To a pointed Q. 3, Does the Administration believe that the Agreementoverrides the Hyde Act regarding any apparent conflicts, discrepancies or inconsistencies? Does this include provisions in the Hyde Act which do not appear in the Agreement?, the answer clearly states that the Agreement is consistent with the legal requirements of both the Hyde Act and the AEA. Further, the Prime Minister has given certain key assurances on the floor of Parliament at various times. Revisiting them, in the light of what the letter says, is indeed instructive and revealing.

1. Full Civil Nuclear Cooperation: This is a key part of the Joint Statement of July 18, 2005. However, it does not define what full implies, and the interpretations of the two sides have differed right from the beginning. The Indian interpretation of the phrase was articulated by the Prime Minister in his statement on August 17, 2006, according to which this implied technologies related to all aspects of the complete nuclear fuel cycle (emphasis added), including those related to enrichment and reprocessing. The U.S. negotiators have, on the other hand, made it clear in the congressional hearings of November 2005 and April 2006 that it could not include enrichment, reprocessing and heavy water technologies termed as Sensitive Nuclear Technologies (SNTs) because of domestic policies, and this is reflected in the Hyde Act as well. Significantly, the 123 Agreement of August 3, 2007, dropped the word all. The government was forced to back down on this, but the Prime Minister maintained in his August 13, 2007, statement that the concept of full civil nuclear cooperation had been clearly enshrined in the agreement. While now acknowledging that the U.S. had a long-standing policy of not transferring the SNTs, he added that the agreement provided for such transfers through a forward-looking language, which required an amendment to the agreement.

Answer to Q. 4 in the letter, however, gives the U.S. perspective: [W]hile the proposed U.S.-India Agreement provides for transfer of items in question, as a framework agreement it does not compel any such transfers and as a matter of policy the U.S. does not transfer dual-use items for use in sensitive nuclear facilities. Answer to Q. 5 goes on to say: Consistent with standing U.S. policy, the U.S. government will not assist India in the design, construction or operation of SNTs through the transfer of dual-use items, whether under the Agreement or outside the Agreement. The administration further added in its answer to Q. 6: The Administration does not plan to negotiate an amendment to the proposed U.S.-India Agreement to transfer to India sensitive nuclear facilities or critical components to such facilities. Response to Q. 9 further clarifies that only if India developed facilities as part of a bilateral or a multinational programme could such dual-use transfers be considered as per exceptions provided by the Hyde Act.

2. Fuel Supply Assurances and Strategic Reserve: Having faced the debilitating fuel supply cut-off for the Tarapur nuclear plant in the wake of the Pokhran explosion of 1974, and the provisions of the consequent Nuclear Non-Proliferation Act (NNPA) of 1978 (which is now built into the AEA), the question of assured fuel supply for lifetime of reactors even after a nuclear test has become the most important debating point in Indian scientific and political discussions on the deal.

In his August 13, 2007, statement, the Prime Minister said: [T]he March 2006 [civil-military] Separation Plan provided for an India-specific safeguards agreement with the IAEA [International Atomic Energy Agency], with assurances of uninterrupted supply of fuel to reactors that would be placed under IAEA safeguards together with Indias right to take corrective measures in the event fuel supplies are interrupted. An important assurance given is the commitment of support for Indias right to build up strategic reserves of nuclear fuel to meet lifetime requirements of Indias reactors... [T]here will be no derogation of Indias right in this regard, including the right to take corrective measures.

The fuel assurance included in the 123 Agreement (Article 5.6) is a verbatim copy of the corresponding paragraph from the Separation Plan in fact, it is a bad cut-and-paste job in a last-ditch attempt to conclude the agreement wherein the so-called assurances remain as vague as before, with no clear statements made on the issue by the U.S. administration as to how they are to be realised. Answers to Qs. 14, 15, 16 and 18 make the U.S. position very clear and specifically address the issue of maintenance of fuel supply in the event of disruption of supplies following a nuclear test by India. [Fuel supply assurances in Article 5.6] are important presidential commitments that the U.S. intends to uphold, consistent with U.S. law [emphasis added]. It is the understanding of the U.S. that the use of the phrase disruption of fuel suppliesis meant to refer to disruptions in supply to India that may result through no fault of its own.

Answer to Q.15 goes on to clarify the various circumstances that could lead to disruption, which are all in the nature of market failures, and does not refer at all to disruptions following a nuclear test and the causative related national security considerations. Most significantly, the administration stated in the letter, We believe the Indian government shares the understanding of this provision. This is clarified more explicitly in answers to Qs. 16 and 18: [Should] India detonate a nuclear explosive device, the U.S. has the right to cease all nuclear cooperation immediately, including supply of fuel, as well as request the return of any items transferred from the U.S., including fresh fuel. In addition, the U.S. has the right to terminate the agreement on one years written notice. In case of termination, the commitments in Article 5.6 no longer applyThe fuel supply assurances are not, however, meant to insulate India against the consequences of a nuclear explosive test or a violation of non-proliferation commitments [such as the commitment in the July 18 joint statement of continuation of unilateral moratorium on testing] (emphasis added).

As regards the consistency of the proposed lifetime strategic fuel reserve with the Hyde Act provision in Section 103 (10) (a), which stipulates any fuel reserve providedshould be commensurate with reasonable operating requirements, the administration responded thus (Q.19): The parameters of the proposed strategic reserve and of Indias capacity to acquire nuclear fuel for its reactors would be developed over time. Thus it is premature to conclude that the strategic reserve will develop in a manner inconsistent with the Hyde Act. It further added (Q.20) that under the agreement reasonable operating requirements had not been defined and the two governments had not discussed any such definition. Any such definition, it said, would have to take into account among other things the physical characteristics of reactors, their expected operating cycles, their expected time in service, the likelihood of fuel supply disruptions over decades of operation[etc.]

Queried on what it understood by corrective measures that India sought to invoke in case of fuel supply disruption and whether it involved removal of safeguarded nuclear material from safeguards, the administration merely noted (Q. 25) that the Indian government had not provided the U.S. with a definition of corrective measures but hoped that the safeguards agreement with the IAEA would clarify this aspect and also that it expected the Indian government to implement in letter and spirit its commitment to safeguards in perpetuity. However, we now know that even the safeguards agreement concluded in early July did not explain what the phrase meant. The Indian government has not elaborated either and has since merely maintained that it was Indias sovereign right to decide what corrective measures would need to be invoked depending upon the situation.

3. Cessation of Cooperation and Termination of Agreement on Nuclear Testing: From the perspective of Indian politics, the implication on the 123 Agreement of the Indian commitment in the July 18 statement of continuing to maintain its unilateral moratorium on testing has been perceived as something that constrained the Indian autonomy on its strategic programme and national security. Although the 123 Agreement does not use the word nuclear testing or detonation or explosion, couched as it is in ambiguous language, if the agreement has to be implemented in conformity with the AEA, the cooperation must cease immediately and agreement must be terminated. The U.S. would also have the right to take back equipment and material transferred under the agreement.

The Indian government has always maintained that the agreement in no way constrained its sovereign right to test. The Prime Minister said on August 17, 2006, in his response to questions raised by some nuclear scientists: We are very firm in our determination that the agreementno way affects the requirements of our strategic programme. Nuclear weapons are an integral part of our national security, and will remain so. Our freedom of action with regard to our strategic programme remains unrestricted. He told Parliament more specifically as recently as July 22, 2008: I confirm [that] there is nothing in these agreements that prevents us from further nuclear tests if warranted by our national security concerns. Technically, of course, he may be correct in saying that Indias sovereign right to test has not been taken away, but the price of such action, thanks to the AEA and its implication on the 123 Agreement, would be a major restrictive factor.

In his August 13, 2007, statement he said: An elaborate multilayered consultation process has been included with regard to any future events that may be cited as a reasonto seek cessation of cooperation or termination of the agreementIndias right to take corrective measures will be maintained even after the termination of the Agreement. The letter is, however, very clear on this matter. Answer to Q. 35 says: Article 14 of the Agreementprovides for a clear right for the U.S. to terminate nuclear cooperation and right to require the return of equipment and materials subject to the agreement in all of the circumstances required under the AEA, including if India detonated a nuclear explosive device. Thus it fully satisfies the relevant requirements of the [Atomic Energy] Act.

On the right of return of nuclear equipment and material, it further added, [B]oth of the actions [of cessation and termination] that must be exercised for the right of return would be within the discretion of the U.S. government, and both actions could be taken at once in the unlikely case that the U.S. believed that a resolution of the problem could not be achieved through consultations [as provided for in Article 14]. Article 14 does not require that the other party consent to the exercise of right to terminate the Agreement, the right to cease cooperation or the right of return (emphasis added).

Significantly, in answer to Q. 41, the administration made it clear that the perpetuity of safeguards would continue even after the termination of the agreement. It said: Article 16 of the proposedAgreement expressly provides for the survival of essential rights and conditions on items subject to the Agreement even after termination or expiration of the Agreement, including, inter alia, with respect to the application of safeguards (Article 10), reprocessing consent (Article 6) and peaceful use (Article 9).

This should be contrasted with the Prime Ministers statement on August 13, 2007, when he said: Indias right to take corrective measures will be maintained even after the termination of the agreement. Consistency between these two statements requires that corrective measures cannot include withdrawal from safeguards. So what corrective measures the government has in mind is hard to imagine. The administrations letter, in fact, quoted from the testimony of U.S. Secretary of State Condoleezza Rice on April 5, 2006, to the Senate Foreign Relations Committee: We have been very clear with the Indians that the permanence of safeguards is the permanence of safeguards without condition (emphasis added).

4. Reprocessing Rights: One of the assertions of the Indian government is that it has secured the right to reprocess spent fuel of U.S. origin, as against merely consent in principle as a correct interpretation of the agreement would imply. This consent will be translated into a right only if the subsequent arrangements and procedures, which have to presented to Congress for review (as per Section 131 of AEA), pass muster there. On August 13, 2007, the Prime Minister said: A significant aspect of the agreement is our right to reprocess U.S. origin spent fuel. This has been secured upfront.Thishas been met by the permanent consent for India to reprocess.

The following is the U.S. administrations contrary position. In answer to Q. 30, the letter said: [The agreement] provides that the consent does not become effective [emphasis original] until the U.S. and India consult and agree on arrangements and procedures Answer to Q. 29 states: Section 131 of AEA provides explicitly for review and execution of subsequent arrangements related to reprocessing of U.S. origin material [in a dedicated reprocessing facility]. However, if proposed arrangements and procedures for reprocessing involved changes to provisions to provisions in theAgreement, an amendment to the Agreement would be required [involving full 90 days of Congressional consideration and approval].

As regards permanency, the U.S. administration answered thus (Q. 44): [T]he proposed arrangements and procedures with India will provide for withdrawal of reprocessing consent. Such a right is also included in Article 14.9 of the Agreement. This implies that the Prime Ministers claim about permanency of rights is false.

The U.S. administrations letter, made public by Howard Berman, lays bare the conditions under which the 123 Agreement will be implemented. It is thus clear that the Indian government had made exaggerated, even false, claims about the advantages and benefits of the deal, even as it sought to hide the real implications of the conditions built into the agreement via the Hyde Act and the AEA. Now that an NSG waiver has been obtained, the government will, no doubt, argue that whenever conditions unacceptable to India arise, India can choose not to procure them from the U.S. It could rather prefer to import reactors, equipment and material from other supplier countries depending upon their individual internal export control laws and regulations. But the upshot of the NSG waiver can be more serious than it would seem at the outset.

Essentially, the waiver has multilateralised the commitments made by India including the unilateral moratorium on testing that were originally part of a bilateral agreement through the Joint Statement of July 18, 2005. Moreover, the inclusion of provisions of consultation and exchange of information among the NSG members of transfers of trigger list and dual-use items, as provided for in Articles 3 (c) and 3 (d) of the revised waiver presumably the final text would also retain this what the Hyde Act sought to achieve has, in effect, been realised. That is, if the U.S. does not approve of some transfers, say from France and Russia, that its own laws would prevent, it can use the consultative process to prevent such transfers.

So, in effect, India would be subject to the NSGs guidelines (present and future amendments as well) without having the power to veto or change them, and this would essentially make the possibilities of sourcing equipment and materials from sources other then the U.S. difficult, if the U.S. has objections.