Long haul ahead

Print edition : June 29, 2007

FOREIGN SECRETARY SHIV Shankar Menon and US Under Secretary of State Nicholas Burns in New Delhi on June 1. Talks between India and the US to resolve delays in the nuclear energy deal remain inconclusive.-PHOTO: RAVINDRAN / AFP

The India-US nuclear talks still have a long way to go, and the new proposals that seek to break the deadlock amount to an Indian climbdown.

THE recent remarks made by Prime Minister Manmohan Singh on the India-United States nuclear deal indicating that tough negotiations lay ahead would be a realistic appraisal of where it stands today. Formalising the deal through what is known as the 123 Agreement, so called because of Section 123 of the US Atomic Energy Act (AEA) that governs in the main all international nuclear cooperation agreements of the US, seems to be at a crossroads. Any hope for its conclusion in the immediate term seems unlikely though the apparent stalemate during the visit in early June of Nicholas Burns, US Under Secretary for Political Affairs and the key negotiator for the deal, may have been partly resolved in the discussions between National Security Adviser M.K. Narayanan and Stephen Hadley, his American counterpart, on the sidelines of the G-8 Summit at Heiligendamm in Germany. The fresh proposals that seek to break the deadlock, in fact, amount to India backing down from the hardened posture it has adopted until now. But even for these, the US may have to go back to Congress for approval.

The "Henry J. Hyde United States-India peaceful Atomic Energy Cooperation Act of 2006", or simply the Hyde Act, incorporates necessary amendments to the AEA and forms the enabling legislation and basis for the cooperation agreement (Frontline, December 29, 2006). India has rejected the draft agreement submitted by the US as it feels that some of its provisions (which stem from the Hyde Act) do not meet either the reciprocal commitments made by the US in the joint statement of Manmohan Singh and US President George W. Bush on July 18, 2005, or the assurances (on fuel supply) apparently given by the US following the Indian civil-military separation plan of March 2, 2006. It may be pointed out that we have only the Prime Minister's statement in Parliament on the fuel supply assurances. There has been no official US word on this.

From the Indian perspective, there are several contentious issues but the really thorny ones pertain to (a) the Indian right to reprocess (under safeguards) the spent fuel arising from nuclear material of US origin (to extract plutonium and use it in future safeguarded fast breeder reactors); (b) the US right of return of material and equipment supplied under the agreement in the event of an Indian nuclear test; and (c) the assurance of continued fuel supply (for the lifetime of safeguarded reactors through strategic reserves or otherwise) in the event of cessation of India-US nuclear cooperation for reasons including an Indian nuclear test.

It may be instructive to revisit the July 18 statement, which India swears by, to understand why problems have arisen. The July 18 document happens to be a particularly injudiciously drafted one and is the cause of much of the current impasse in the negotiations, though at the time of the statement Indian negotiators lauded themselves that the vagueness in it gave India sufficient flexibility and room for interpreting it to India's advantage. According to the statement, Bush "will work to achieve full civil nuclear energy cooperation with India".

Now, the science and technology of civil nuclear energy is vast and, therefore, the usage of the word "full" above is very ambiguous. Does "full" include accelerator driven systems (ADS) or accelerator-based technologies for the transmutation of high-level nuclear waste or other waste immobilisation and disposal technologies? Does it include laser enrichment or gas diffusion or centrifuge technologies? Does it include Gen IV reactor systems or Radkowsky thorium breeder technology? Does it include nuclear fusion as well?

In a strict technical sense, one could argue that the phrase implies an all-encompassing cooperation, but that clearly was not the intent from both Indian and US perspectives. So the scope of cooperation should have been specified but was unfortunately left open to interpretation; hence the controversy. The Indian interpretation of the phrase was elaborated on by the Prime Minister in his statement to Parliament on August 17, 2006, according to which "full cooperation" implied technologies related to "all aspects of the complete nuclear fuel cycle".

The US denial of access to reprocessing, enrichment and heavy water technologies and equipment - termed as sensitive nuclear technologies (SNTs) - therefore led India t o argue that this exclusion contradicted the "full civil nuclear cooperation" envisaged in the July 18 agreement.

The US negotiators, on the other hand, made it clear in the congressional hearings of November 2005 and April 2006 that "full cooperation" could not include SNTs because of domestic policies (Frontline, August 11, 2006), and the Hyde Act states this explicitly.

More pertinently, the Indian separation plan of March 2, 2006, does not include the centrifuge enrichment plant at Ratnahalli and only puts a few heavy water plants and the Power Reactor Fuel Reprocessing (PREFRE) plant at Tarapur under safeguards in the "campaign mode"', which means that safeguards come into play only when safeguarded fuel is introduced into them. So how can India even expect to get these technologies under the agreement? The current focus of the negotiations only on the three thorny issues mentioned above would seem to indicate that India has softened its insistence on access to SNTs.

The reciprocal commitment by India in the joint statement that "it would be ready to assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States" (emphasis added) is likewise ambiguous and non-specific. The US' nuclear status is characterised both by its weapons capability and its civilian nuclear technology. Which aspect does the italicised part refer to or is it supposed to include both? Depending upon how you interpret the phrase, different countries will fall under the category and, accordingly, their "responsibilities and practices" as well as their "benefits and advantages" will differ.

For instance, while China has weapons capability, it can be argued that it cannot be termed a country with "advanced nuclear technology", given that its civilian nuclear programme is largely based on imported technology. Russia, France and the United Kingdom have advanced nuclear technology and are nuclear weapons states (NWSs), while Japan, Canada, Switzerland and Germany also have advanced nuclear technology but are non-nuclear weapons states (NNWSs) and have implemented the full-scope safeguards (FSS) of the International Atomic Energy Agency (IAEA) on their nuclear programmes.

So, while the "responsibilities and practices" that India would have to assume were spelt out in the Manmohan Singh-Bush joint statement, the "benefits and advantages" it would get in return were left unstated. However, as the Prime Minister stated in his remarks on August 17, 2006, India interpreted the phrase to mean that it would be treated on a par with the five NWSs. This should have been settled right in the beginning of the negotiations. In fact, even among the eight "responsibilities and practices", one was left open to interpretation, leading to the highly contentious, and as yet unresolved, issue of the implications of future nuclear tests by India, which would not have been the case if the US' interpretation, too, was the same.

The Indian commitment relates to "continuing [its] unilateral moratorium on nuclear testing". It is obvious that if India conducts a nuclear test, for whatever reason, it would be violating the July 18 statement.

The huge mistake that the drafters of the Indian part of the statement made was not to include a national security caveat to that commitment. India could be forced to test under a changed security environment if not just NWSs, or "countries with advanced nuclear technology, such as the US", break their unilateral moratoria and begin testing but also if Pakistan, an NNWS and not a country with "advanced nuclear technology", conducts a test. Since the July 18 statement would stand violated if India responded with a test, there is no reason to expect the US to honour its commitments and continue with supplies of fuel and other nuclear equipment for safeguarded reactors.

Section 123 of the AEA stipulates nine conditions that must be met by any proposed agreement. Article 123 a.(2) stipulates the requirement of FSS for NNWSs. The presidential waiver, as embodied in the Hyde Act, is only for this condition and not for the other eight, in particular 123 a.(4) and 123 a.(7). The former stipulates the "right of return" of nuclear material and equipment transferred pursuant to the agreement in the event of a nuclear test or abrogation of IAEA safeguards. The latter concerns the requirement of prior US consent for reprocessing/enriching spent fuel arising from US supplied nuclear fuel.

As regards activities before July 18, 2005, the Hyde Act also provides for a waiver of Article 129 (1)(A) of the AEA, which requires the termination of the cooperation agreement and all exports of nuclear material and equipment if an NNWS detonates a nuclear weapon. However, Section 129 would come into effect only if India were to test after that date. Besides, Section 106 of the Hyde Act explicitly provides for termination of the cooperation agreement in the event of an Indian nuclear test.

The background note to the Act also clearly states: "The conferees expect the President to make full and immediate use of US rights to demand the return of all nuclear-related items, materials and SNTs that have been exported or re-exported to India if India were to detonate or test... ."

The US sought to include this requirement explicitly in the 123 Agreement, but India has rejected it. Such a restriction in a bilateral agreement has been variously interpreted by India as the unilateral moratorium becoming a legally binding one or a "bilateral CTBT [Comprehensive Test Ban Treaty]". In reality, neither the Hyde Act nor the 123 Agreement prevents India from testing; only there would be economic costs involved, for instance, sanctions, just like those imposed after the Pokharan-II tests of 1998. Sanctions will come into effect even if there is no explicit mention of testing in the 123 Agreement. Section 129 of the AEA apart, there are also the provisions for sanctions under Section 102 of the US Arms Export Control Act (AECA), which will effectively terminate the agreement by stopping all nuclear exports. But only 123 a.(4) of the AEA includes the US "right of return" of already exported items.

Of course, taking back operational reactors and equipment would be an impractical proposition. But there is no getting away from a termination of cooperation and the consequent stopping of fuel and equipment supplies. It now seems that India has finally come around to accepting this reality after having objected to it earlier in a bid to be treated as an NWS. In an operational sense, therefore, there is no substantive difference between explicit reference to testing being included or not in the 123 Agreement.

There could, however, be the concern that if the 123 Agreement becomes the basis for India-specific amendments to the export guidelines of the 45-member Nuclear Suppliers Group (NSG) and requires cessation of nuclear exports to India in the event of a test, India would be unable to procure fuel from anywhere. The exact nature of NSG amendments, however, remains to be seen. It is to avoid such disruption of fuel supplies, like in the Tarapur case following the Pokharan-1 test of 1974, that India has sought an assurance of uninterrupted fuel supplies and/or creation of a stockpile of fuel for the lifetime of the safeguarded reactors.

However, Section 103 (b)(10) of the Hyde Act calls for a policy measure that any fuel reserve provided should be "commensurate with reasonable reactor operating requirements". While the phrase is open to interpretation, Congress is unlikely to accept a reserve for 40 years, the average lifetime of a commercial power reactor, especially when the US itself depends on imports from Russia for more than 50 per cent of its own requirements because of a suspension of mining and enrichment activities in the US for many years.

Manmohan Singh and George Bush in Washington on July 18, 2005.-PHOTO: BRENDAN SMIALOWSKI

In fact, nuclear expert Thomas Neff of the Massachusetts Institute of Technology (MIT) recently warned of the impending shortfall in uranium fuel supply in the US. A European Union task force on nuclear fuel availability also noted in its 2005 report that there was a gap between the requirements of operational reactors in EU countries and the availability of primary uranium and conversion services. Therefore, to expect an assurance of supply in such a situation may be somewhat unrealistic.

Consider the amount of enriched uranium fuel that, for instance, a 1,000 MWe light water reactor would require. The initial loading would be about 70 tonnes and the subsequent annual replenishment would be about 25 tonnes. So the stockpile required for the lifetime of a reactor would be about 1,000 tonnes. Depending upon the number of reactors that India hopes to import, the amount required is huge. Even assuming that this reserve would be built up in a phased manner, the question is who would be in a position to assure that kind of supply, not to mention the costs involved at the prevailing price of uranium (yellow cake) in the international market of $80-100 a kilogramme. From this perspective, therefore, the utility of the Indo-US nuclear deal would be limited to importing only a few reactors for which India can afford to build a stockpile.

As regards the "right of return" provision in the 123 Agreement, one could conceivably work around it with a tacit understanding between the two countries that the right will not be exercised (even though Congress has demanded that the President must exercise that right) as regards reactors and sub-systems, but India would have to make good the fuel supplied by arranging for an equal amount of fuel to be sold to the US. by other suppliers such as Russia or France. This, it is reliably learnt, was proposed during the Narayanan-Hadley meeting at Heiligendamm for the US to consider. However, given the provisions of the Hyde Act, it remains to be seen whether it can muster support from Congress.

Resolution of the other major stumbling block, namely the automatic right to reprocess spent fuel, seems to be on the horizon after India has agreed to compromise on this count as well. The AEA does not prohibit reprocessing per se. Article 123 a.(7) requires prior consent to any request for reprocessing by the cooperating party. With the Tarapur experience of piled-up spent fuel in mind, what India is seeking is that an automatic right to reprocess be built into the 123 Agreement instead of its having to obtain US approval under a separately negotiated supplementary arrangement as required by the AEA.

Among the countries/entities having civil nuclear cooperation agreements with the US, only Japan and EURATOM (European Atomic Energy Community), the US' closest allies, have automatic processing rights. In fact, the latter has only been granted advanced consent for reprocessing in the revised agreement of 1996. It has been wrongly stated by various commentators that China has such advanced approval to reprocess. The fact is, it does not have, and any proposal to reprocess has to be negotiated with a supplementary agreement. The US-China 123 Agreement merely says that such a request would be considered "favourably".

The reprocessing rights for Japan and EURATOM, however, are for specifically identified safeguarded reprocessing facilities and for specific civilian nuclear programmes. While Japan had advance reprocessing rights, it did not have a reprocessing facility within its territory until recently. So it had retransfer rights as well to ship spent fuel to a specific safeguarded reprocessing facility in France. Japan, however, is in the process of building a reprocessing unit for which components are being exported from the US. The US has been closely involved right from the start in framing the safeguards agreement with the IAEA for this facility and in implementing them.

In the case of EURATOM, four facilities within its jurisdiction have been identified for reprocessing. The report submitted to Congress in November 1995 by President Bill Clinton on the renegotiated US-EURATOM 123 Agreement states that the US is fully aware of the nature of the safeguards and that these are being implemented in such a manner that the US would have timely warning of any suspected diversion of nuclear material to a European NNWS.

It is reliably learnt that during Burns' visit, the US offered to consider reprocessing rights, subject to congressional approval, if conditions similar to the above are met by India, say by establishing a new reprocessing facility under safeguards right from the start and with the US closely involved with the IAEA in framing them. Narayanan apparently conveyed India's acceptance of this proposal to Hadley.

This amounts to a compromise compared with the earlier offer of safeguards in campaign mode alone. Even though the facility would be designed and built by India's Department of Atomic Energy (DAE), it would have to be placed under safeguards in perpetuity if reprocessing rights over spent fuel from safeguarded reactors are desired. The ball is now in the US court for congressional approval.

The turbine room of the Tarapur Atomic Power Project-4 at Tarapur, Maharashtra.-PHOTO: VIVEK BENDRE

The upshot of the progression of events is that negotiations still have a long way to go. While prospects for conclusion of the deal may seem brighter after Heiligendamm, it is crucially dependent on a congressional okay to these new proposals, which have been evolved to meet India's specific needs as well as the US' non-proliferation concerns.

Ultimately, in the event of a successful conclusion of the agreement, it would seem that the gains would be largely political, both domestic as well as international. That the deal was not about energy security but about India's nuclear status in the face of the global non-proliferation regime was always apparent.

Now, with the nuances and compromises in the deal slowly getting spelt out, it is becoming clearer that the cost of using the deal to augment, even marginally, our nuclear energy programme can become prohibitive.

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