U.S.-India Bilateral Civil Nuclear Cooperation Agreement under Section 123 of U.S. Atomic Energy Act



The first U.S. and Indian official statements on the still-secret 123 agreement reveal the conditions India has been made to accept for resumption of civil nuclear cooperation. While India has been allowed symbolically to save face on some issues, the benchmarks set by the Indian prime minister in August 2006 now look more unattainable than ever.

By Brahma Chellaney


The Asian Age, July 31, 2007


U.S. non-proliferation policy, with its export controls and sanctions approach, was fashioned largely in response to India’s 1974 nuclear test. More than 33 years later, that policy has come full circle, with the United States reaching agreement with India to resume civil nuclear cooperation. Yet, U.S. and Indian official statements on the still-undisclosed text of the so-called 123 agreement have brought out in sharp relief the onerous conditions New Delhi has been made to accept.


            The deal’s raison d’être is spot on: a new strategic partnership. Yet, on issues from reprocessing to assured fuel supply, the U.S. has sought to accommodate India’s concerns more through symbolism than policy modification. America, for instance, has kept a veto on Indian reprocessing until such time it can negotiate follow-up “arrangements and procedures” — that too after India has completed a new “state-of-the-art” facility. On other key issues, including a unilateral test ban on India, the U.S. “right to return” and centrality of the Hyde Act, there hasn’t been a change even in nuance.


            Even before the fine print has been released, the writing on the wall has become clear.


First is the primacy of the Hyde Act, which defines India-specific terms and conditions over 41 pages.


According to U.S. Undersecretary Nicholas Burns, “we kept reminding the Indian side, and they were good enough to negotiate on this basis that anything we did had to fall within, and respect, the legal guidelines that Congress had set forth.” For his part, National Security Adviser M.K. Narayanan has conceded: “The Prime Minister had always taken the view that if you have a legal problem, we will not try to ask you to break the law, but we should find the language that would meet the obligations of both sides.” Then in another interview the NSA stated: “As far as we are concerned, we haven’t breached the Hyde Act in that sense … We have seen to [it] that no law is broken.”


Semantic lollypops indeed are what India has been left holding.


If anything, the 123 agreement expressly reinforces the Hyde Act by citing the applicability of national laws to govern cooperation.


Contrast that with what Parliament was told last December after the Hyde Act’s enactment: the government has “taken note of certain extraneous and prescriptive provisions in the legislation,” and that “there are areas which continue to be a cause for concern, and we will need to discuss them with the U.S. administration before the bilateral cooperation agreement can be finalized.”


            Second is a permanent test ban on India, with the cooperation arrangements stacked against Indian testing through overt punitive elements.


            According to Burns, the proposed cooperation is premised on the U.S. “hope and trust that it won’t be necessary for India to test in the future.” As U.S. Ambassador to India David Mulford has made it clear, Washington expects no more nuclear tests by India. “We are assuming and operating on the basis that the situation will not occur and that India’s commitment to its unilaterally declared moratorium on testing will hold up,” he said emphatically. Separately, Washington has recommended that the 45-nation, U.S.-led Nuclear Suppliers’ Group (NSG) also impose a similar test prohibition on New Delhi. India, in other words, is being dragged through the backdoor into the Comprehensive Test Ban Treaty (CTBT), whose ratification the U.S. Senate rejected in 1999.


Not only does the Hyde Act go beyond other U.S. laws to remove executive flexibility and require automatic termination of waiver in case of an Indian test, but also New Delhi has itself acquiesced to cooperation on the basis of the test prohibition in the Act’s Section 106. India thus will have no case in international law if the U.S. terminated all cooperation in response to an Indian test. Yet Prime Minister Manmohan Singh is quoted as telling the Congress Working Committee that, “India retains the right to test, while the U.S. retains the right to react!” 


            Third is the U.S. right to seek the return of all nuclear items and materials if India were to breach any of the prescribed conditions, including the test prohibition and a bar on any entity or individual “under India’s jurisdiction” making an export in violation of Nuclear Suppliers’ Group (NSG) or Missile Technology Control Regime (MTCR) guidelines.


As Burns has put it, “That right-of-return has been, of course, preserved as it must be under our law, and there has been no change in how we understand the rights of the American President and the American Government.” By acquiescing to the U.S. “right to return,” India is accepting that the supplier is at liberty to lawfully terminate cooperation retroactively.


Fourth is New Delhi’s grudging acceptance that despite America’s July 18, 2005, promise of “full civil nuclear cooperation and trade,” India will face a continued embargo on importing equipment and components related to enrichment, reprocessing and heavy-water production, even when such activities are under International Atomic Energy Agency (IAEA) inspections and for peaceful purposes.


Burns has cited “major restrictions in American law” to justify such continued sanctions. The Indian fact-sheet released last weekend says the “purpose” of the 123 agreement is to enable “full” cooperation, without admitting that the U.S. reluctance to adjust its laws in that respect defeats the cited purpose.


Not only does the Hyde Act debar transfer to India of any “sensitive” civil nuclear equipment or technology, but also its Section 105(a)(5) directs Washington to “work with members of the NSG, individually and collectively, to further restrict the transfers” of reprocessing, enrichment and heavy-water technologies to India. Yet the Act demands that the target country, India, actively work with the U.S. to prevent the spread of enrichment and reprocessing technologies to third countries!


Fifth is that the American assurance of uninterrupted fuel supply for safeguarded reactors covers only disruption due to market failure or technical or logistical difficulties, but not sanctions arising from India’s non-compliance with the U.S.-prescribed non-proliferation conditions.


So, despite fuel assurances having been written into the 123-agreement text, Burns has made it clear that “none of that contradicts or conflicts with the legal right of any American President” to terminate supply or invoke the right to demand the return of stockpiled fuel if India, in the “the worst-case hypothetical event in the future,” breached the stipulated non-proliferation conditions.


It would actually defeat the very objective of the Hyde Act — to hold India on a non-proliferation leash — if New Delhi were guaranteed permanent fuel supply in all circumstances. The U.S. has committed to convene a meeting of other fuel suppliers in case of a supply disruption, as Ambassador Mulford has clarified, only “under certain circumstances.” The Hyde Act indeed decrees that India be prevented from building any fuel stockpile of a size that would permit its “riding out any sanctions that might be imposed” by the U.S. in the future. The only fuel stocks it permits India to build are merely to “minimize down time when reactor cores are removed.” 


Given that the Hyde Act serves as the legal framework for cooperation, the U.S. fuel assurances in the 123 agreement are subordinate to the legislative conditions. These assurances, including a notional right for India to take corrective measures, are really intended to help New Delhi save face at home.


With the latest 123 agreement, America now has 24 such bilateral agreements, none of which guarantees what the PM had sought — lifetime fuel supply. The one accord that did — the 1963 agreement with New Delhi, which guaranteed fuel “as needed” by India — the U.S. broke with impunity, despite the absence of an overarching law like the Hyde Act. Now, India will accept perpetual IAEA inspections on its entire civil nuclear programme without an unequivocal guarantee of perpetual fuel supply.


Sixth is that India has agreed, according to Burns, that “all future breeder reactors will come under safeguards.”


That will leave out only the tiny experimental breeder and the under-construction prototype breeder (which together, according to U.S. National Security Adviser Stephen Hadley, have “very limited capability”). And although both sides admit the Indian strategic programme would not be directly affected, the deal’s embedded qualitative and quantitative checks would “limit the size and sophistication of India’s nuclear-weapons programme,” in the earlier words of Joseph R. Biden, chairman of the Senate Foreign Relations Committee.


Seventh is that despite the hoopla about a supposed major American concession, the U.S. will keep a prior-consent veto on Indian reprocessing until New Delhi in the years ahead has negotiated with it “arrangements and procedures” that pass muster with Congress.


To help the Indian government save face domestically, Washington has indeed conceded a theoretical right to New Delhi to reprocess, but preserved its veto until such time that India, on its own cost, has built, in Burns’ words, a “new state-of-the-art” reprocessing facility under IAEA safeguards, and only “then the subsequent arrangements and procedures will be agreed to by the U.S. and India.”


So the practical right to reprocess would not form part of the agreement under Section 123 of the U.S. Atomic Energy Act, but is to be worked out in the future under Section 131, titled “Subsequent Arrangements.” Securing the practical right would thus entail a second round of congressional scrutiny and approval.


The accompanying table on reprocessing shows how history is repeating itself. By agreeing to reprocessing-related terms that are tougher than those in the earlier 123 agreement signed in 1963, India risks sliding deeper into the same trap from which it wishes to extricate itself.


Just as it built a special facility at Tarapur to reprocess spent fuel under the safeguards-related terms of the 1963 accord, it has pledged to construct a new reprocessing facility under the latest agreement. But even though the PREFRE facility at Tarapur passed muster with the IAEA, and India reprocessed spent fuel from RAPS I & II there under IAEA inspections, the U.S. refused until the very end of that 123 agreement to jointly determine with New Delhi the facility’s safeguards-related adequacy. 


The U.S. did not have any prior-consent veto in the 1963 agreement, yet it breached its terms by continuously refusing to either exercise its first option to buy Tarapur spent fuel in excess of India’s needs or to carry out a safeguards-related “joint determination” of the PREFRE facility. What gives New Delhi confidence that when the U.S. shunned a simple “joint determination” of an IAEA-certified reprocessing facility, it would be willing to work out, to India’s satisfaction, complex “arrangements and procedures” under Section 131 in the years ahead?


India’s last reprocessing facility at Kalpakkam took five years to complete. The new “start-of-the-art” facility could take longer, given that the U.S. would have a say in its design. Only thereafter, as Burns has repeatedly clarified, would the U.S. negotiate with India reprocessing-related “arrangements and procedures” needing congressional approval.


Contrast that statement with the claim in the Indian fact-sheet that to give “effect” to the Indian right to reprocess, “India will establish a national reprocessing facility to reprocess IAEA safeguarded nuclear material, and the parties will agree on arrangements and procedures within one year.” No sooner had this claim been made than the NSA conceded in a newspaper interview that “I don’t think the whole thing will be decided in one year.” He raised the spectre of “spoilers” nitpicking on the facility design.


Even before the reprocessing issue is operationally resolved, Burns foresees that “American companies will be able to go in [for reactor contracts], and we’re very anxious to have that happen” as soon as Congress is able to pass the 123 agreement.


In addition, there are other conditions, spelled out in the Hyde Act.


Among them are U.S. end-use monitoring (which the government says is unavoidable, given the bilateral end-use verification agreement governing high-tech exports), New Delhi’s “unilateral adherence” to U.S.-led regimes unrelated to the nuclear field, and an annual presidential certification of India’s “full compliance” with the congressionally imposed conditions.


Eager to underpin the assorted congressional conditions, America negotiated the 123-agreement text by relying on a battery of lawyers, who have given India only a fig leaf to comply with the new U.S.-set non-proliferation obligations. Burns referred to “legions of lawyers on both sides of the table.” But there was no lawyer on the Indian side, as the NSA has admitted. According to the NSA, “our country is not litigious like that” and “I must say God played his role in this” agreement.


Having fashioned diplomacy on hope, the government wants the country to repose its faith in God, too. Personalized policymaking, wishful thinking and a disinclination to learn from the past, sadly, remain India’s curse.


© Asian Age, 2007

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