Future of Indo-U.S. Nuclear Deal Part 1

Put Nuclear Deal On Hold


Part I


Brahma Chellaney


Asian Age, September 8, 2007


Since signing the Indo-US nuclear deal on July 18, 2005, Prime Minister Manmohan Singh has repeatedly slipped on promises to the nation. Every time he has been unable to keep an assurance, he has sought to devise a revised gauge to maintain the semblance of an unbroken word.


Singh’s changing measures mirror the shifting terms of a deal that has proven increasingly divisive in India. Unlike in the US, where criticism has been limited to some quarters and to just one issue — non-proliferation — the deal has attracted wide-ranging concerns across India. And unlike the bipartisan political support it has drawn in America — both inside and outside the US Congress — the deal has badly split India’s political establishment.


The most striking difference, however, relates to legislative oversight. At every stage, US President George W. Bush has had to bow to the congressional prerogative to vet any arrangement with India. Bush has even made the grant of reprocessing right to India conditional on the congressional approval of a separate agreement that is to be negotiated in the years ahead under Section 131 of the US Atomic Energy Act (AEC). By contrast, the US granted Japan and EURATOM the actual right to reprocess upfront through an implementing accord accompanying a Section 123 agreement, not through a separate Section 131 deal years later.


The Indian Parliament, on the other hand, has been reduced to being a mere spectator on the deal. The PM insists that Parliament has no role on the Indo-US 123 agreement other than to be merely informed about it. Parliament similarly will be shut out from the subsequent Section 131 agreement on reprocessing. Yet Singh affirms that he has “kept Parliament fully in the picture at various stages of our negotiations with the United States” by making “several statements.”


Singh’s concept of public accountability, in other words, centres on making statements in Parliament at his own sweet will, merely to convey what has been agreed to and signed, without having to bow to the will of the national legislature. The PM has yet to disclose how much money his government spent to lobby members of the US Congress to pass the enabling legislation on the deal — the Hyde Act. Given that the US legislature had never previously passed a country-specific law laden with so many conditions to permit cooperation in just one narrow area as it did through the Hyde Act, it is a surprise that no one has been asked to account for the multimillion-dollar lobbying campaign New Delhi coordinated on Capitol Hill last year — a campaign whose outcome seeks to saddle India with onerous long-term requirements, many of which have little to do with civil nuclear cooperation.


New Delhi has blithely gone along with the shifting terms of a deal that is set to attract even more India-specific conditions as it traverses the remaining stages. The best course for India at this point would be to put the deal on hold while continuing to build a stronger relationship with the US in other areas. After all, the record since July 2005 does not redound to India’s credit. Consider the latest major goofs:



No provision for international arbitration in case of a dispute.


The 123 agreement has no provision for an arbitral tribunal, despite India’s bitter experience over an earlier 123 accord with the US signed in 1963. The 1963 agreement was not only more protective of Indian interests, but also free of any Hyde Act-style overarching legal framework. Yet, 15 years later, the US effectively gutted the accord by retroactively rewriting its terms through a new domestic law.


In the latest 123 agreement, India has gained the right to be merely consulted but has granted America the right to take all final decisions.


Contrast this with the Japan-US 123 agreement in which Tokyo’s interests are protected through Article 14: “If any dispute arising out of the interpretation or application of this Agreement is not settled by negotiation, mediation, conciliation or other similar procedure, the parties may agree to submit such dispute to an arbitral tribunal which shall be composed of three arbitrators appointed in accordance with the provisions of this paragraph. Each party shall designate one arbitrator who may be a national of its country and the arbitrators so designated shall elect a third, a national of a third country, who shall be the Chairman. If, within 30 days of the request for arbitration, either side has not designated an arbitrator, either side may request the President of the International Court of Justice to appoint an arbitrator. The same procedure shall apply if, within 30 days of the designation or appointment of the second arbitrator, the third arbitrator has not been elected, provided that the third arbitrator so appointed shall not be a national of the country of either party. A majority of the members of the tribunal shall constitute the quorum, and all decisions shall require the concurrence of two arbitrators. The decisions of the tribunal shall be binding on the parties.”   


The terms, “arbitration,” “mediation,” “conciliation,” “tribunal” and “International Court of Justice,” do not find mention in the latest Indo-US 123 accord, which only provides for toothless “consultations.” The agreement’s Article 15, titled “Settlement of Disputes”, merely states: “Any dispute concerning the interpretation or implementation of the provisions of this agreement shall be promptly negotiated by the parties with a view to resolving that dispute.”


Japan is a close ally of the US, yet it sought an arbitral tribunal. India is still grappling with outstanding issues from its earlier 123 agreement with the US, including an accumulating spent-fuel stockpile, yet its negotiators have placed it at the mercy of the supplier-state. 



Primacy of American law has been upheld.


Nothing better illustrates this than the way the Indo-US agreement copies, word to word, Article 2(1) of the China-US 123 accord, but only to drop its critical final sentence — that the “parties recognize, with respect to the observance of this agreement, the principle of international law that provides that a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.”


This omission is because the Indo-US agreement, as both sides have admitted, is anchored in the Hyde Act. Instead of treating that Act as a red rag to a bull, New Delhi has bragged how the 123 agreement is within the framework of that legislation. In the words of National Security Advisor M.K. Narayanan, “As far as we are concerned, we haven’t breached the Hyde Act … We have seen to [it] that no law is broken.” And US Undersecretary Nicholas Burns has seconded that by saying “we have the Hyde Act. And 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.”


Having accepted the supremacy of US law, Singh has been left with only the provision for “consultations” to flaunt. “Both Parties have agreed to take a number of factors into account in their consultations so that the scope for precipitate or unilateral action is reduced,” the PM told Parliament.


The 1963 agreement also provided for consultations and for taking into account the economic and other effects of any precipitate action, yet the US unilaterally walked out of the accord. Had there been a provision in that agreement for an arbitral tribunal, would India have been unable to reprocess the Tarapur spent fuel to this day?



India has conceded ground beyond the requirements of even American law.


For reasons unexplained, Indian negotiators have agreed to some terms that go beyond the requirements of any US law — the Hyde Act and AEC included. This may have happened because the 123 agreement has been largely drafted by US lawyers, with Narayanan admitting that while “there were State Department lawyers” in the negotiations, no lawyer was present on the Indian side because “our country is not litigious like that.”


Yet today, in response to the national furore, the government has drafted a top lawyer like Kapil Sibal to defend the deal in public. Shouldn’t his services have been sought when they were most needed — during the negotiations with the US?


Here are three examples of how Indian concessions go beyond even the demands of US law.


1. Unrestricted right of return. India shouldn’t have accepted that the supplier-state is at liberty to terminate cooperation retroactively through the right to demand the return of all exported items and materials. After all, Indian officials had been saying in background briefings until last May that any formal acknowledgement of the American right to seek return on account of a US-determined Indian non-compliance with non-proliferation conditions would turn India’s voluntary test moratorium into a binding prohibition through a double instrument — a bilateral agreement atop the Hyde Act.


Yet, in finally succumbing to the US demand, Indian negotiators agreed to incorporate the “right of return” in the 123-agreement text in such a way as to give carte blanche to the American side. Under Section 123(a)(4) of AEC, America’s “right of return” is limited to two specific causes — “if the cooperating party detonates a nuclear-explosive device, or terminates or abrogates an agreement providing for IAEA safeguards”.


But under the Indo-US agreement under Section 123, America has been handed an unrestricted right to demand return by citing any reason. All it requires to invoke that right is for a notice to be “delivered to the other party on or before the date of termination of this agreement.”


2. Open-ended right to suspend all supplies. The unrestricted “right of return” is linked to the open-ended suspension and termination provisos in the 123 agreement. The basis for suspension or cessation of cooperation is not merely limited to any violation of the agreement. Cooperation can be suspended or terminated for reasons other than a material breach of the agreement’s terms or non-compliance with IAEA safeguards. This leeway has been fashioned to hold India’s feet to the US non-proliferation fire.


Under the agreement’s Article 14.2, the supplier-state enjoys an unfettered right to suspend cooperation at will and leave the recipient-state high and dry. The Article states: “The party seeking termination has the right to cease further cooperation under this agreement if it determines that a mutually acceptable resolution of outstanding issues has not been possible or cannot be achieved through consultations.” So the US can either hold consultations or even dispense with them if it believed the desired outcome “cannot be achieved through consultations.”


More importantly, although termination is to take effect at the end of a one-year notice period, the US is empowered to “cease further cooperation” forthwith. All that is required is that the “party giving notice of termination shall provide the reasons for seeking such termination.” But with the reasons for termination not defined in the agreement, the cause can be any. This makes a mockery of New Delhi’s claim of having secured an uninterrupted fuel-supply assurance.


Contrast the unlimited right in the 123 agreement to suspend or terminate cooperation with the limits set by US law — Section 129 of AEC — wherein precise triggers are specified for cessation of exports to a non-nuclear-weapons state (India is classified as one in this deal): (i) a nuclear-device detonation; (ii) a material breach or termination of IAEA safeguards; (iii) a material violation of the 123 accord; or (iv) proliferation-related transfers by the recipient state to a third country.


Even the Japan-US 123 agreement, despite its arbitration safety measure, does not provide for an unlimited right of suspension or termination. Under its Article 12, the triggers for cessation of cooperation are restricted to non-compliance either with the agreement’s own provisions or with “the decisions of the arbitral tribunal.” India, however, has merrily reposed its implicit faith in the same supplier that walked out from the earlier Indo-US 123 agreement.


3. All foreign-origin spent fuel to be routed through a single facility. American law seeks to regulate only spent fuel that is of US-origin. Yet, after a similar assertion by Burns, Singh admitted in Parliament on August 13, 2007, that the new Indian reprocessing facility to be built at American instance will be not just for US-origin fuel but for all “foreign nuclear material under IAEA safeguards.”


That is odd. Why should India grant America a say in where it reprocesses spent fuel generated from imports from countries other than the US? Given that the new facility will be US-approved in terms of its design, why hand Washington a veto on where India reprocesses other foreign-origin fuel? Considering the frequent outages and breakdowns in any reprocessing plant due to its handling of highly unsafe spent fuel, India’s decision to route all foreign nuclear material through a single such facility unduly limits its options.


(To be continued)


© Asian Age, 2007


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