Cooperation and hurdles

Published : Aug 11, 2006 00:00 IST

The U.S. administration initiates moves towards opening up international nuclear cooperation and trade with India.


A YEAR has passed since the landmark Manmohan Singh-George Bush statement of July 18, 2005, which forms the basis of an Indo-United States civilian nuclear deal whose final contours are emerging. Things have moved fairly swiftly in this regard after President Bush's visit to India in early March. Having accepted the Indian civil-military separation of nuclear facilities as "credible, transparent and defensible from a non-proliferation standpoint", Bush has initiated three essential moves - reciprocal, if you will - towards opening up international nuclear cooperation and trade with India: (1) the congressional process of changing the U.S. law, namely the Atomic Energy Act (AEA) of 1954; (2) the administrative process of drawing up the draft `framework agreement' of civilian nuclear cooperation with India in motion; and, (3) proposing an India-specific amendment to the guidelines of the 45-nation Nuclear Suppliers Group (NSG).

As regards (1), the relevant congressional committees have also acted with a sense of urgency. Following several hearings and testimonies, the first step in the legislative process of marking up appropriate Bills for voting in the House of Representatives and the Senate respectively happened on June 26 and 29. Both the marked-up Senate Bill (S. 3709) and the House Bill (H.R. 5682) differ significantly from the original short enabling draft legislation (S. 2429 and H.R. 4974), seeking India-specific amendments to the AEA, that had been moved by the Bush administration in the two chambers on March 9. As per congressional procedure, the draft had been referred to the House International Relations Committee (HIRC) and the Senate Foreign Relations Committee (SFRC) for their evaluation and views. Both the committees have passed the Bills, which incorporate the respectively considered amendments, by a majority vote for introduction into the respective chambers.

The original Bill had been widely criticised by Congressmen as well as U.S. analysts and non-proliferation experts who testified before the two Committees. According to them, the amendments sought by the Bill severely limited congressional oversight on the yet-to-be-drafted cooperation agreement as well as the envisaged India-specific safeguards arrangement with the International Atomic Energy Agency (IAEA) and its ability to impose new conditions if it fell short of meeting U.S. non-proliferation objectives.

Indeed, introducing the mark-up version on June 27, HIRC Chairman Henry Hyde observed: "[T]he original Bill was conceived in a profoundly unsatisfactory manner in several aspects. It would have granted the administration an unprecedented and sweeping freedom of action by waiving almost wholesale the existing laws regarding civil nuclear commerce with foreign countries, even as it reduced the role of Congress to a bare minimum. In effect, Congress was being asked to remove itself from the process entirely and abandon its constitutional role."

It was contended that, in its keenness to see the agreement through, the Bush administration wanted to change the approval procedure laid down under the AEA for an `exempted' agreement and the proposed changes in law had been done to ensure the passage of the agreement in the form submitted to Congress. The proposed Bill had sought a presidential waiver to exempt India from the requirement of full-scope safeguards (FSS) under Section 123 a. However, it wanted Congress to approve the `exempted' agreement through the more straightforward mechanism prescribed for a `non-exempted' agreement.

The draft Bill had also sought waivers for the annual congressional review of licence applications for exports to non-nuclear weapon states (NNWS) without FSS under Section 128 b (3) and the cessation of exports under Section 129 for India (because of its nuclear tests after the enactment of the Nuclear Non-Proliferation Act, or NNPA, in 1978). That is, it eliminated congressional review of nuclear exports. There was criticism on this count as well. "While the legislation facilitates implementation of nuclear cooperation with India, it also reduces congressional reviews, both in substance and process," a congressional Research Service document pointed out. However, the proposed legislation had included a provision for the termination of the agreement if India were to test again.

The point to emphasise is that the AEA allows for a cooperation agreement following a presidential waiver alone, without any amendment, subject to congressional approval based on necessary Presidential determinations transmitted to Congress. In the case of the proposed agreement, the presidential determinations would pertain to India fulfilling the several commitments made in the joint statement of July 2005. However, the Act requires an annual congressional certification process for nuclear exports. The need for amendment arose from the Bush administration's bid to ensure that the U.S. nuclear industry is not disadvantaged in any way against other competing nuclear suppliers.

"The amendment to the AEA, we believe, is necessary so that we can have a reliable and predictable nuclear commercial trade with India," U.S. Secretary of State Condoleezza Rice testified at the Congressional hearings on April 5. "Our understanding," she added, "is that in order to engage in nuclear commerce, there would have to be congressional action. If we didn't amend the law, there would have to be congressional action on the list of transactions on an annual basis. And we think that would actually undermine the stability or the regularity that is needed in developing nuclear trade."

Defending the proposed sequencing of congressional moves - first amendment and then action on the Agreement with changed procedure - she said: "The so-called 123 Agreement would come to the Congress... So we believe there is a lot of congressional oversight. But we are making a rather fundamental choice as a country, and that's why we thought that it was important to make the choice up front in terms of amending the legislation."

Indeed, soon after the legislation was proposed, the U.S. also gave a draft agreement to India for its consideration and comments. India is believed to have submitted the draft back with its proposed changes. In parallel, U.S. officials briefed the NSG on the developments on the Indo-U.S. nuclear deal and the nature of exception that the U.S. is proposing to make in its domestic law to forge nuclear cooperation and commerce with India. At an NSG Consultative Group meeting on March 23, U.S. administration officials presented a draft proposal to create an exception to NSG Guidelines for nuclear exports to India by its member countries.

The U.S. had hoped that this would be on the agenda of the NSG plenary meeting in May. This, however, did not happen mainly because NSG members would prefer to act only after a positive action by Congress. Even though other key members of the NSG, such as Russia, France and the United Kingdom, are supportive of making such an exception, the NSG will be an important hurdle to cross as a few countries such as Sweden, Japan and Germany have expressed reservations and, most importantly, China, which would like a similar exception to be made for Pakistan, has not expressed its views yet. A Congress-approved Indo-U.S. nuclear agreement notwithstanding, without a positive NSG decision the Indo-U.S. deal will get nowhere.

Separately, as required by the joint statement, India has begun its negotiations with the IAEA for evolving what has been termed as India-specific safeguards pursuant to the civil-military separation plan unveiled in March and spelt out in detail in May by the Prime Minister. In March, the Secretary of the Department of Atomic Energy (DAE), Anil Kakodkar, submitted the separation plan to the IAEA and initiated the process of negotiating safeguards on the declared civilian facilities. Subsequently, on July 8, the safeguards negotiating team of the IAEA visited India to carry the negotiations further. As we shall see, arriving at a satisfactory India-specific safeguards regime could prove complicated.

Congressional action on the final enabling Act should, however, happen soon as on July 20 and 21, the SFRC and the HIRC respectively submitted detailed reports to accompany the marked-up Bills. The House version was adopted on July 26 by an overwhelming majority vote. The Senate version will also be up for voting soon. A reconciliatory Bill will then become law if passed by a joint sitting of the House and the Senate. Once enacted, the Act (the U.S. and India Nuclear Cooperation Promotion Act of 2006) will pave the way for introducing the nuclear cooperation agreement for congressional approval and passage.

The upshot of the congressional moves so far is that while both the House and the Senate have accepted the administration's view that amendments to the AEA are necessary for a quick conclusion of the Indo-U.S. nuclear cooperation agreement, they have sought to restore the full oversight authority of Congress when the `123-agreement' will be introduced for approval. In particular, Congress has sought to be presented with the safeguards agreement and a status report on the implementation of the Additional Protocol before acting on the cooperation agreement. In fact, Hyde has cautioned that the passage of the enabling legislation does not necessarily mean that Congress would give assent to the 123-agreement.

Besides, the texts of the marked-up Bills are much longer than the original draft. This is owing largely to the inclusion of congressional views on the proposed agreement in the form of `Sense of Congress', the U.S. foreign policy and non-proliferation objectives explicitly spelt out and detailed periodic reporting measures by the President on India's compliance. These essentially constitute the legally non-binding parts of the Bill. Much of the enlarged text is padding that reflects the Committees' bid to ensure that the final agreement mandates enough checks by the executive and the administration so that the non-proliferation goals of the U.S. are not compromised in any manner when it engages in civilian nuclear trade with India, an NNWS under the Nuclear Non-Proliferation Treaty (NPT) but with a recognised nuclear weapons programme.

However, the various additions made in the Bills have generated a great deal of controversy in the country, particularly in the media, with political misgivings and opposition to the deal too gaining ground. Indeed, even the government itself has now voiced its apprehensions over the implications of these changes to the final `123-agreement'. At a press briefing on July 18 during the recent G-8 summit at St. Petersburg, Foreign Secretary Shyam Saran voiced concerns regarding certain provisions in the Bills introduced in Congress, which, in the Indian government's perception, go beyond the joint statement of July 2005.

So what are these concerns that the government felt necessary to go public with? These include (1) prohibition on transfer of enrichment, reprocessing and heavy water technologies, termed as `sensitive nuclear technologies' (SNTs); (2) India being required to provide a "complete" declaration of civilian nuclear facilities and materials to the IAEA which is being interpreted to be more than what India chose to file under its separation plan and to negotiate a safeguards regime in "perpetuity" that is in conformity with IAEA's "practices, standards and principles" rather than an India-specific one; (3) the definition by the Senate Bill of Additional Protocol to be based on the Model Additional Protocol INFCIRC/540 meant for NNWSs; (4) prescription of end-use verification procedures and the U.S.' own inspections in the case of ineffective implementation of safeguards by the IAEA; and, (5) predicating congressional action on the conclusion of safeguards arrangement by India and approval by consensus of India-specific exception by the NSG to its Guidelines.

It is argued that the exclusion of SNTs contradicts the "full civil nuclear cooperation" envisaged in the joint statement. Strictly speaking, that would be correct. However, this was publicly known nine months ago, after the November 2, 2005, SFRC hearings. In an answer to a question by the Chairman Richard Lugar, Under Secretary of State Robert Joseph said: "We do not export enrichment or reprocessing technology to any state. Therefore, `full civil nuclear cooperation' with India will not include enrichment or reprocessing technology. We have not determined whether such a prohibition would extend to heavy water production."

Later, at the April 5 hearings, Condoleezza Rice clarified: "The U.S. does not foresee transferring heavy water production equipment or technology to India... Our draft agreement for peaceful nuclear cooperation provides that SNTs may not be transferred without an amendment to the agreement, which would be subject to congressional review.... There has been no discussion of possible transfers of enrichment and reprocessing technology to India or any Indian request for such technology." Clearly, being party to the discussions and in the know of the draft agreement, the Indian government should have known this by April at least. So it is not clear why the issue is being raised now.

As regards (2) above, the Senate report of July 20 clarifies the addition of the word "complete" to the text pertaining to presidential determination in the draft Bill. "The word... was included... not to imply finality in India's declaration, but rather to require the President to determine: (a) that the declaration is not in significant flux at the time of the determination; and, (b) that India has not withheld from IAEA safeguards facilities that it has elsewhere declared as civilian." On the added references in the Bill to safeguards in "perpetuity", the report states: "[P]ermanent safeguards are vital to any assurance that civil commerce with a facility will not assist India's nuclear weapons programme. Safeguards in perpetuity are also key to not according India the status of an NWS under NPT... India... will not be allowed later to remove... facilities from safeguards, as the recognised NWSs are permitted to do."

Indeed, Rice testified in April: "We have been very clear with the Indians that the permanence of the safeguards is permanence of the safeguards without condition" (emphasis added). The italicised phrase has the implication that safeguards would continue to be applied even if there is a disruption in fuel supply for whatever reason, including the termination of the agreement following India exploding a nuclear device. As regards the addition "standards and principles", the report says: "[This] was proposed... as a means of assuring that the agreement creates credible safeguards regime for India's declared civilian facilities." While the implication of perpetuity had been made clear to India, the other additions are not as onerous as have been perceived to be.

The definition of Additional Protocol in the Senate Bill appears to be an error rather than an intent. Joseph had testified in November: "The Model Protocol is structured to accompany a country's FSS agreement. But India's safeguards will differ from FSS agreement. India's Additional Protocol will differ from the Model as well. This concurs with the joint statement that India will negotiate an Additional Protocol. So any concern on this count would also be misplaced.

End-use verifications are part and parcel of U.S.' export controls. Post-shipment verifications as well as end-use verifications are being done as regards dual-use items, including nuclear non-Trigger List items, by the U.S. Department of Commerce. In fact, these procedures have been strengthened pursuant to the Next Steps in Strategic Partnership (NSSP) between the two countries. Licences for the export of Trigger List items by the Nuclear Regulatory Commission, pursuant to the nuclear agreement, will have in place similar end-use verification procedures. One could, however, argue that, since end-use verifications are standard procedures, there is no need for it to be explicitly stated in a bilateral agreement.

As regards the second layer of safeguards inspections by the U.S. stated in the legislation, Rice testified thus in April: "In general, the U.S. relies upon IAEA inspections and monitoring. However, the U.S. would, in fact, be able to conduct "special verification visits" in the form of "fall-back" safeguards as required by the U.S.-India agreement... in the event IAEA safeguards were not being applied." This means that the Indian government should already be aware (through the draft agreement) of the provision in the agreement for the U.S.' own inspections and should have factored in its implications even as IAEA safeguards are under negotiation.

Such provisions are, in fact, standard in the U.S.' civil nuclear agreements with other countries as a contingency measure if the IAEA cannot carry out the inspections for some reason. If only Indian negotiators had studied other agreements before they entered into this deal, this would not have come as a surprise. In the present case, however, there is some room for apprehension. Given the lack of financial resources with the IAEA to implement safeguards on all the Indian civilian facilities, the U.S. may seek to use the fallback provision more widely in the Indian context than in any other country.

Congressional action on the 123-agreement being made contingent upon the NSG's consensual decision and the conclusion of the safeguards agreement should also not be a cause for concern and, therefore, need not be perceived as shifting of goal-posts. A safeguards regime can be evolved which India should sign into force only after positive decisions by the NSG and the U.S. Congress. The draft agreement would become available to the NSG and the U.S. for them to consider through the IAEA's Board of Governors, whose approval is necessary before it can be signed.

However, there are other problem areas, both intangible and tangible, with regard to the agreement, which have not been raised. Testifying on the Indian separation plan, Rice said on April 5: "While the specific issue of DAE personnel has not yet been discussed in detail, we would consider routine, frequent rotation of personnel between civil and military programmes as being inconsistent with Indian commitments on separation... We have made this position clear to the Indian government."

While it would be difficult to comply with this, it is hardly verifiable. The IAEA safeguards regime applies only to materials and equipment and does not extend to personnel.

But, of course, the U.S. may decide to use its own inspection mechanism to monitor movements of personnel. This can be unnecessarily intrusive and Indian negotiators would do well to sort it out.

The other relates to India being pressured to join the Proliferation Security Initiative (PSI), notwithstanding its apparent contradiction with other international treaties such as the Law of the Sea. This is one of the non-proliferation objectives included in the Bill, just as the goal of aligning India's foreign policy on Iran with that of the U.S. is. Indeed, these are the parameters by which India would be judged by the U.S. President for his annual reports on India pursuant to the nuclear agreement.

According to Rice's statement in April, India had committed in 2005 to participating in the PSI if it was able to join the Core Group of PSI participants or if the Core Group was disbanded. The U.S. has kept up the pressure and with the disbanding of the Core Group, it appears that India may indeed join the PSI without involving Parliament in this controversial decision.

But the biggest hurdle relates to the India-specific safeguards regime in perpetuity. Testimonies at the HIRC and SFRC hearings, including those by Rice, have demanded that INFCIRC/66 type safeguards (which are facility-specific like the ones for the Tarapur Atomic Power Station, the Rajasthan Atomic Power Station and Kudankulam) be put in place for all the declared facilities but in perpetuity. Despite the fuel supply assurances given by the U.S. on March 2 - either from its own source or through coordinated market mechanism or through built-up stockpiles - disruption is still a possibility. This could result following an Indian nuclear test when the agreement gets terminated pursuant to Section 129 of the AEA or following a unilateral change in policy (as it happened in the case of Tarapur) by a supplier other than the U.S.

In the former case, the House version of the legislation requires that the President seek to prevent the export of equipment, materials and technology from other NSG members or any other source. Though India has committed itself in the joint statement to a moratorium on testing, it might decide to test under an altered security environment. In the latter case, unlike the U.S., the NSG may not extend such assurances. A safeguards agreement that provides for an exit clause in these contexts would go against the perpetuity of safeguards that the U.S. has demanded. But without incorporating this clause as force majeure, Indian facilities could get permanently locked into an undesirable safeguards regime that will extend to indigenous fuel as well.

In the last meeting with the IAEA negotiating team, questions on this issue have been posed to them. Also, the DAE would like to have one single INFCIRC/66-type safeguards agreement covering all civilian facilities, currently declared and future ones, rather than individual agreements on each facility. The safeguards would be India-specific in this sense.

This is again something that is under discussion with IAEA officials. Since there would be no third party involved, the safeguards arrangement would depend entirely on India's ability to negotiate an acceptable agreement and arrive at provisions that do not imply any long-term liability.

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