The Obama Administration’s Strategy in Asia

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Brahma Chellaney
in Anuario Asia-Pacific 2010, Edición 2011, published by CIDOB, Casa Asia, and Real Instituto Elcano (October 2011), pp. 69-75.
(Original in Spanish)

With the eastward movement of global power and influence, all the major actors on the international stage are defining new roles for themselves in Asia, a vast continent whose significance in international relations, in some respects, is beginning to rival that of Europe in the 18th and 19th centuries. As these powers seek to build new relationships and equations, the stage has been set for greater cooperation and competition. Asia, home to more than half of the global population, is likely to help mold the future course of globalization.

Yet, Asia faces major challenges. One important point is that while the bloody wars in the first half of the 20th century have made wars unthinkable today in Europe, the wars in Asia in the second half of the 20th century did not resolve matters and have only accentuated bitter rivalries. A number of interstate wars were fought in Asia since 1950, the year both the Korean War and the annexation of Tibet started. Those wars, far from settling or ending disputes, have only kept disputes lingering in Asia.

The Arrival of Obama

U.S. President Barack Obama came to office at a time when the qualitative reordering of power was already under way in the Asia-Pacific, with tectonic shifts challenging strategic stability. The impact of the still-ongoing shifts on U.S. foreign policy is being accentuated by America’s own growing challenges, including economic troubles and a faltering war in Afghanistan. That may explain why the Obama administration has been slow to develop a distinct Asia policy. Under Obama’s predecessor, George W. Bush, America’s Asia policy was guided by an overarching geopolitical framework.

In comparison, Obama’s Asia policy thus far has appeared fragmented in the absence of a distinct strategic blueprint. The Obama team quickly developed a policy approach toward each major Asian subregion and issue, but without devising an overall strategy on how to promote enduring power equilibrium in Asia, now the pivot of global geopolitical change.

China, India, and Japan, Asia’s three main economic powers, constitute a unique strategic triangle. Obama declared soon after taking office that America’s “most important bilateral relationship in the world” is with China, going to the extent of demoting human rights and putting the accent on security, financial, trade, and environmental issues with Beijing. In fact, his administration tried to assiduously court China. The catchphrase coined by Deputy Secretary of State James Steinberg in relation to China, “strategic reassurance,” signaled an American intent to be more accommodative of China’s ambitions — a message reinforced earlier by Secretary of State Hillary Clinton when she went out of her way to downgrade human rights in America’s China policy during a visit to Beijing.

But Obama has been slow to fashion a well-defined Japan policy or India policy. While a narrow East Asia policy framework still guides U.S. ties with Japan under Obama, Washington is again looking at India primarily through the Pakistan-Afghanistan (“Af-Pak”) prism. That translates into a renewed U.S. focus on India-Pakistan engagement and preoccupation with counterinsurgency in the Afpak region, including its larger ramifications for American interests. That is in sharp contrast to Bush, who declared in his valedictory speech that, “We opened a new historic and strategic partnership with India.”

After coming to office, Obama’s choice of ambassadors said it all. While Obama named John Huntsman — the Utah state governor and a rising Republican star — as his ambassador to China, he picked an obscure former congressman Timothy Roemer as envoy to India and a low-profile internet and biotechnology lawyer, John Roos, as ambassador to Japan. Obama underlined China’s centrality in his foreign policy by personally announcing his choice of Huntsman. In contrast, Roemer and Roos were among a slew of ambassadors named in an official news release.

The U.S., of course, has every reason to engage China more deeply at a time when its dependence on Beijing to bankroll American debt has only grown. Just as America and the Soviet Union achieved mutually assured destruction (MAD), America and China are now locked in MAD — but in economic terms. The two today are so tied in a mutually dependent relationship for their economic well-being that attempts to snap those ties would amount to mutually assured financial destruction. Just as the beleaguered U.S. economy cannot do without continuing capital inflows from China, the American market is the lifeline of the Chinese export juggernaut.

From being allies of convenience in the second half of the Cold War, the U.S. and China now have emerged as partners tied by such interdependence that economic historians Niall Ferguson and Moritz Schularick have coined the term “Chimerica” — a fusion like the less-convincing “Chindia.” An article in China’s Liaowang magazine has described the relationship as one of “complex interdependence” in which America and China “compete and consult” with each other. But China’s expanding naval role and maritime claims threaten to collide with U.S. interests, including Washington’s traditional emphasis on the freedom of the seas. U.S.-China economic ties also remain uneasy: America saves too little and borrows too much from China, while Beijing sells too much to the U.S. and buys too little.

Obama’s Asia policy, however, began changing somewhat in the second half of 2010 in response to China’s increasingly assertive actions. With China’s defense spending having grown almost twice as fast as its Gross Domestic Product (GDP), Beijing has started to take the gloves off, confident that it has acquired the necessary muscle. Rising power is emboldening Beijing to pursue a more muscular foreign policy. That was exemplified by several developments in 2010 alone — from China’s inclusion of the South China Sea in its “core” national interests on a par with Taiwan and Tibet, an action that makes its claims to the disputed Spratly Islands non-negotiable, to its bellicose reaction to the South Korean-U.S. joint anti-submarine exercises off the Korean Peninsula. China has also publicly raked up the issue of Arunachal Pradesh, the northeastern Indian state that Beijing calls “Southern Tibet” and claims largely as its own. Indian defense officials have reported a rising number of Chinese military incursions across the entire 4,057-kilometer Himalayan border in recent years. That the Tibet issue remains at the core of the India-China divide is being underlined by Beijing itself by laying claim to additional Indian territories on the basis of alleged Tibetan ecclesial or tutelary links to them, not any professed Han connection.

But nothing fanned international unease and alarm more than Beijing’s disproportionate response to the brief Japanese detention of a fishing-trawler captain last September. While Japanese Prime Minister Naoto Kan’s standing at home took a beating for his meek capitulation to Chinese coercive pressure, the real loser was China. Japan’s passivity in the face of belligerence helped magnify Beijing’s hysterical and menacing reaction. In the process, China not only undercut its international interests by presenting itself as a bully, but it also precipitately exposed the cards it is likely to bring into play when faced with a diplomatic or military crisis next — from employing its trade muscle to inflict commercial pain to exploiting its monopoly on the global production of a vital resource, rare-earth minerals.

Its resort to economic warfare, even in the face of an insignificant provocation, has given other major states advance notice to find ways to offset its leverage, including by avoiding any commercial dependency and reducing their reliance on imports of Chinese rare earths. In fact, from the United States to Japan, countries are now seeking to diversify their rare-earth imports. A more tangible fallout from that episode and other developments has been that China is already coming under greater international pressure to play by the rules on a host of issues where it has secured unfair advantage — from keeping its currency substantially undervalued to maintaining state subsidies to help its firms win major overseas contracts.

With his China strategy threatening to fall apart, Obama has now started to do exactly what his predecessor attempted — to line up partners. This was best symbolized by his trip to Asia in late 2010. The very fact that Obama chose to visit Asia’s four leading democracies — India, Japan, Indonesia and South Korea — on that tour was significant. After all, the symbolism of a tour restricted to Asia’s major democracies could not have been lost on Beijing at a time when Chinese assertiveness on exchange rates, trade and security issues had upset U.S. calculations.

The Larger Challenges

The fundamental U.S. strategic objective in Asia is unlikely to change in the foreseeable future. Indeed, the key U.S. interest in Asia remains what it has been since 1898 when America took the Philippines as spoils of the naval war with Spain — the maintenance of a balance of power. The security thrust of America’s Asia policy also is unlikely to change. The United States has been, and will continue to be, the leading security player in Asia, building and maintaining strategic ties and arrangements with more Asian states than any other player.

This reality makes America’s China policy pivotal to shaping the larger geopolitical landscape in Asia. Given that Asian security to a large extent will remain anchored in the defense alliances and arrangements that the United States has fashioned, the natural corollary is that the manner Washington deals with the rise of an assertive China will have a bearing both on the Asian security landscape and on the long-term viability of those alliances and arrangements. For the past century, or at least since the 1941 Pearl Harbor attack (which was at least partly prompted by the U.S.-British-Dutch oil embargo against Japan), the United States has clearly signaled that American security begins not off the coast of California but at the western rim of the Pacific Ocean and beyond.

The American belief that U.S. security begins in the Pacific’s western rim may explain, even if partly, why the U.S. military fought in Korea and Vietnam, why it entered into the Australia, New Zealand, United States Security (ANZUS) Treaty, why U.S. security treaties with Japan and South Korea remain critical to American forward military deployment in the Asian theater, why it made a security commitment to Taiwan, and why it has forged new strategic relationships with several Southeast Asian countries and India.

In addition to its determination to stay Asia’s security anchor, America’s balance-of-power objective remains dominant in its Asia policy. During the first part of the Cold War, the United States chose to maintain the balance by forging security alliances with Japan and South Korea and also by keeping forward bases in Asia. By the time the Cold War entered the second phase, America’s ‘ping-pong diplomacy’ led to Richard Nixon’s historic handshake with Mao Zedong in 1972 in an ‘opening’ designed to reinforce the balance by employing a newly assertive, nuclear-armed China to countervail Soviet power in the Asia-Pacific region.

Today, the United States would not want any single state to dominate the Asian continent or any region there. As part of its hedging strategy against China, the U.S. is reinforcing its existing military relationships and building new allies or partners, including roping in states that can serve as potential balancers in Asia. China too plays balance-of-power politics in Asia, but its balancing is primarily designed to keep its Asian rivals bottled up regionally.

Yet another important aspect of America’s role in Asia is the long tradition of China-friendly approach in U.S. policy. That actually dates back to the 19th century. In 1905, for example, U.S. President Theodore Roosevelt, who hosted the Japan-Russia peace conference in Portsmouth, New Hampshire, argued for the return of Manchuria to China and for a balance of power to continue in East Asia. The Russo-Japanese War actually ended up making the United States an active participant in China’s affairs. In more-recent times, U.S. policy has aided the integration and then ascension of Communist China, which actually began as an international pariah state. Indeed, there has been a succession of China-friendly U.S. presidents in the past four decades — a significant period that has coincided with China first coming out of international isolation and then being on the path of ascension.

China’s rise, in fact, owes a lot to an American decision post-1989. The fall of the Berlin Wall was not the only defining event of 1989. Another defining event in 1989 was the Tiananmen Square massacre of pro-democracy protestors in Beijing. But for the end of the Cold War, the U.S. and its allies would not have let China off the hook over those killings. The Cold War’s end, however, facilitated America’s pragmatic approach to shun trade sanctions and help integrate China with global institutions through the liberalizing influence of foreign investment and trade. That the choice made was wise can be seen from the baneful impact of the opposite U.S. decision that was taken on Burma in the same period from the late 1980s — to pursue a penal approach centered on sanctions. Had the Burma-type approach been applied against China internationally, the result would have been a less-prosperous, less-open and a potentially destabilizing China today.

Therefore, China’s spectacular economic success — illustrated by its emergence with the world’s biggest trade surplus and largest foreign-currency reserves — owes a lot to the U.S. decision not to sustain trade sanctions. The limited U.S. sanctions imposed after Tiananmen were allowed to peter out by 1992. Without the expansion in U.S.-Chinese trade and financial relations since then, China’s growth would have been much harder.

The U.S.-China relationship, already underpinned by closely intertwined economic ties and four decades of political cooperation on a range of regional and global issues, is expected to acquire a wider and deeper base. In fact, the mutually interdependent relationship with China suggests that the U.S. is unlikely to pursue overt competition or confrontation with Beijing. It speaks for itself that even on the democracy issue, the U.S. prefers to lecture some other dictatorships than the world’s largest and oldest-surviving autocracy, China.

Yet, it is also true that the United States views with unease China’s not-too-hidden aim to dominate Asia — an objective that runs counter to U.S. security and commercial interests and to the larger goal for a balance in power in Asia. To help avert such dominance, the U.S. has already started building potential countervailing influences, without making any attempt to contain China. At the same time, the U.S. shares important interests with China, including maintaining peace on the Korean Peninsula, keeping oil supplies flowing from the Persian Gulf, propping up Pakistan, and seeking strategic stability in the Pacific. On issues of congruent interest, the world can expect the U.S. to continue to work closely with China.

For the United States, China’s rising power actually helps validate American forward military deployments in the Asian theater, keep existing allies in Asia, and win new strategic partners. An increasingly assertive China indeed has proven a diplomatic boon for Washington in strengthening and expanding U.S. security arrangements in Asia. South Korea has tightened its military alliance with the U.S., Japan has backed away from a move to get the U.S. to move its Marine airbase out of Okinawa, and India, Vietnam, Indonesia and the Philippines, among others, have drawn closer to the United States. But the China factor can remain handy only as long as the United States is seen by its partners as a credible guarantor of stability and security, which is a function not of military strength but political will in Washington.

Against this background, Obama has sought to strengthen U.S. ties with old and new strategic partners in Asia, while simultaneously trying to deepen engagement with China. This was exemplified by the political investment the Obama administration made to ensure the success of Chinese President Hu Jintao’s U.S. tour in early 2011. That visit was noteworthy not for Hu’s grudging admission that his country has a subpar human-rights record, with China’s state-run media promptly expurgating his comment that “a lot still needs to be done in China in terms of human rights.” Rather the visit was notable for the manner Obama bent over backward at the joint news conference with Hu to virtually rationalize China’s human-rights abuses.

Asked by a questioner to explain “how the U.S. can be so allied with a country that is known for treating its people so poorly [and] for using censorship and force to repress its people,” Obama replied that “China has a different political system than we do”; that “China is at a different stage of development than we are”; and that “there has been an evolution in China over the last 30 years” and “my expectation is that 30 years from now we will have seen further evolution and further change.” He made clear that differences over “the universality of certain rights” will not come in the way of better relations with China because “part of human rights is people being able to make a living and having enough to eat and having shelter and having electricity.”

One question that has a bearing on the future Asian security scenarios is whether U.S. policy toward Japan will change with the changed geopolitical circumstances in East Asia. Without carrying out a single amendment, Japan has lived under a U.S.-imposed Constitution for more than six decades — a period during which the Indian Constitution has been amended 114 times. Japan is the only democracy in East Asia that can balance the power of rising China in the region. While China will clearly prefer a Japan that remains dependent on America for its security than a Japan that can play a more independent role, the post-1945 system erected by the U.S. is more suited to keep Japan as an American protectorate than to allow Japan to effectively aid the central U.S.-policy objective in the Asia-Pacific: A stable balance of power. A U.S. policy approach that subtly encourages Tokyo to cut its overdependence on America and do more for its own defense can assist Japan in shaping a new strategic future for itself that directly contributes to Asian power equilibrium.

The prospect that the United States might be forced to retrench on its assets in Asia reinforces the need for such a policy shift. America faces a pressing need for comprehensive domestic renewal to arrest the erosion in its relative power and to cut its huge deficit. That imperative could prompt it to cut back on its ground capabilities it maintains in the Asia-Pacific.

The U.S. actually doesn’t need the enormous and extensive assets on the ground that it presently maintains in Asia, with Bush having used the U.S.-led war against terror to rapidly expand U.S. military presence in the Asian continent. The fact is that the U.S. can effectively advance its objectives by relying more on being an offshore balancer. But to make significant savings in defense expenditure while keeping its Asia-Pacific strategy robust, it will need to make fundamental changes in its Cold War-era hub-and-spoke system, which results in wasteful spending.

Yet another important issue is U.S. policy on Tibet. Even though the U.S. stopped doing anything for Tibet long ago, with the issue of Tibet now coming up only in relation to a presidential meeting with the Dalai Lama, the future of Tibet has become an issue that extends beyond China’s internal security to the ecological interests of much of Asia. The Tibetan plateau is a barometer of climatic conditions in southern, southeastern and central Asia, as well as in mainland China. And the degradation of its natural ecosystems, as well as accelerated thawing of its glaciers, watershed deterioration and soil erosion, hold important implications for Asian nations that depend on rivers flowing in from the Tibetan plateau. The plateau is the source of most of Asia’s great rivers. As water woes have aggravated in its northern plains owing to environmentally unsustainable intensive farming, China has increasingly turned its attention to the bounteous water reserves in Tibet, which it has cartographically dismembered. It is pursuing massive inter-basin and inter-river water transfer projects. These projects on international rivers carry seeds of interstate conflict.

In fact, the U.S. State Department in 2010 wisely upgraded water as “a central U.S. foreign-policy concern.” And it seems interested in playing a constructive role in the water issues between China and its neighbors. But on human rights in Tibet, the U.S. now pursues a “don’t ask, don’t tell” approach with Beijing. When Obama grudgingly meets with the Dalai Lama, it is a low-key meeting, with no joint public appearance or photo opportunity before reporters. The White House indeed bends backward to explain that it was a private meeting, not an official meeting, and that it took place in the Map Room, where presidents stage private meetings, and not in the Oval Office.

Two questions arise in this context. If the U.S. is to remain cagey about Tibet and the Dalai Lama, what example will it set for India, the country left carrying the can on Tibet? India is the host of the Dalai Lama and the seat of his government-in-exile. Also, if downplaying human rights becomes an enduring feature of U.S. policy on China — which executes more people every year than the rest of the world combined — how acceptable will it be to beat up the small kids on the Asian bloc, the Burmas and the Kyrgyzstans, over their human-rights record? Nepal, after years of adhering to an United Nations-brokered agreement to allow Tibetan refugees safe passage to India, has now — under Beijing’s pressure — started arresting escapees from Tibet and handing them over to Chinese authorities. A more consistent U.S. human-rights policy will be able to stand up in defense of such hapless Tibetans.

While America’s continued central role in Asia is safe, the long-term viability of its security arrangements boils down to one word: Credibility. The credibility of America’s security assurances to allies and partners, and its readiness to stand by them when it comes to the crunch, will determine the long-term strength and size of its security-alliance system in Asia. For their part, Asian states, in keeping with Asia’s growing role in world affairs, need to pursue policies that break free from history and are pragmatic, growth-oriented and forward-looking. China’s lengthening shadow has only reinforced the necessity to find ways to stabilize major-power relationships in Asia and promote cooperative approaches to help tackle festering security, energy, territorial and history issues. Rather than be the scene of a new cold war, Asia can chart a stable future for itself through shared security and prosperity.

References cited:

Gunnar Myrdal, Asian Drama: An Inquiry into the Poverty of Nations (New York: Pantheon, 1968).

U.S. Department of Defense, Military and Security Developments Involving the People’s Republic of China 2010, A Report to Congress Pursuant to the National Defense Authorization Act for Fiscal Year 2010 (Washington, DC: Office of the Secretary of Defense, August 2010).

Li Ling, Xizang Zhi Shui Jiu Zhongguo: Da Xi Xian Zai Zao Zhongguo Zhan Lue Nei Mu Xiang Lu (Tibet’s Waters Will Save China), in Mandarin (Beijing: Zhongguo Chang’an chu ban she, November 2005), Book sponsored by the Ministry of Water Resources.

U.S. National Intelligence Council, Global Trends 2025: A Transformed World (Washington, DC: National Intelligence Council, November 20, 2008).

“PLA’s First Major Parachute Exercise on the Tibetan Plateau” (Mandarin), PLA Daily, August 13, 2010. Available at: http://www.tianshui.com.cn/news/junshi/2010081310330711550.htm

Niall Ferguson, The War of the World: Twentieth-Century Conflict and the Descent of the West (New York: Penguin Press, 2006), pp. 43-71.


Brahma Chellaney, a professor at the independent Center for Policy Research in New Delhi, is the author of the just-published book, Water: Asia’s New Battlefield (Washington, DC: Georgetown University Press, 2011). His previous book, Asian Juggernaut: The Rise of China, India, and Japan (New York: Harper Paperback, 2010), was an international bestseller.

(c) Anuario Asia-Pacífico 2010 (edición 2011)

Official text of U.S. legislation ratifying civil nuclear deal with India

 

United States-India Nuclear Cooperation Approval and

Nonproliferation Enhancement Act

Passed the House of Representatives September 27, 2008, and the Senate October 1, 2008.


Beginning

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

Sec. 1. Short title and table of contents.

SEC. 2. DEFINITIONS.

TITLE I–APPROVAL OF UNITED STATES-INDIA AGREEMENT FOR COOPERATION ON PEACEFUL USES OF NUCLEAR ENERGY

SEC. 101. APPROVAL OF AGREEMENT.

SEC. 102. DECLARATIONS OF POLICY; CERTIFICATION REQUIREMENT; RULE OF CONSTRUCTION.

SEC. 103. ADDITIONAL PROTOCOL BETWEEN INDIA AND THE IAEA.

SEC. 104. IMPLEMENTATION OF SAFEGUARDS AGREEMENT BETWEEN INDIA AND THE IAEA.

SEC. 105. MODIFIED REPORTING TO CONGRESS.

TITLE II–STRENGTHENING UNITED STATES NONPROLIFERATION LAW RELATING TO PEACEFUL NUCLEAR COOPERATION

SEC. 201. PROCEDURES REGARDING A SUBSEQUENT ARRANGEMENT ON REPROCESSING.

SEC. 202. INITIATIVES AND NEGOTIATIONS RELATING TO AGREEMENTS FOR PEACEFUL NUCLEAR COOPERATION.

SEC. 203. ACTIONS REQUIRED FOR RESUMPTION OF PEACEFUL NUCLEAR COOPERATION.

SEC. 205. CONFORMING AMENDMENTS.

 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act’.

(b) Table of Contents- The table of contents for this Act is as follows:

Sec. 1. Short title and table of contents.

Sec. 2. Definitions.

TITLE I–APPROVAL OF UNITED STATES-INDIA AGREEMENT FOR COOPERATION ON PEACEFUL USES OF NUCLEAR ENERGY

Sec. 101. Approval of Agreement.

Sec. 102. Declarations of policy; certification requirement; rule of construction.

Sec. 103. Additional Protocol between India and the IAEA.

Sec. 104. Implementation of Safeguards Agreement between India and the IAEA.

Sec. 105. Modified reporting to Congress.

TITLE II–STRENGTHENING UNITED STATES NONPROLIFERATION LAW RELATING TO PEACEFUL NUCLEAR COOPERATION

Sec. 201. Procedures regarding a subsequent arrangement on reprocessing.

Sec. 202. Initiatives and negotiations relating to agreements for peaceful nuclear cooperation.

Sec. 203. Actions required for resumption of peaceful nuclear cooperation.

Sec. 204. United States Government policy at the Nuclear Suppliers Group to strengthen the international nuclear nonproliferation regime.

Sec. 205. Conforming amendments.

SEC. 2. DEFINITIONS.

In this Act:

(1) AGREEMENT- The term `United States-India Agreement for Cooperation on Peaceful Uses of Nuclear Energy’ or `Agreement’ means the Agreement for Cooperation Between the Government of the United States of America and the Government of India Concerning Peaceful Uses of Nuclear Energy that was transmitted to Congress by the President on September 10, 2008.

(2) APPROPRIATE CONGRESSIONAL COMMITTEES- The term `appropriate congressional committees’ means the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate.

TITLE I–APPROVAL OF UNITED STATES-INDIA AGREEMENT FOR COOPERATION ON PEACEFUL USES OF NUCLEAR ENERGY

SEC. 101. APPROVAL OF AGREEMENT.

(a) In General- Notwithstanding the provisions for congressional consideration and approval of a proposed agreement for cooperation in section 123 b. and d. of the Atomic Energy Act of 1954 (42 U.S.C. 2153 (b) and (d)), Congress hereby approves the United States-India Agreement for Cooperation on Peaceful Uses of Nuclear Energy, subject to subsection (b).

(b) Applicability of Atomic Energy Act of 1954, Hyde Act, and Other Provisions of Law- The Agreement shall be subject to the provisions of the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 (22 U.S.C. 8001 et. seq; Public Law 109-401), and any other applicable United States law as if the Agreement had been approved pursuant to the provisions for congressional consideration and approval of a proposed agreement for cooperation in section 123 b. and d. of the Atomic Energy Act of 1954.

(c) Sunset of Exemption Authority Under Hyde Act- Section 104(f) of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 (22 U.S.C. 8003(f)) is amended by striking `the enactment of’ and all that follows through `agreement’ and inserting `the date of the enactment of the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act’.

SEC. 102. DECLARATIONS OF POLICY; CERTIFICATION REQUIREMENT; RULE OF CONSTRUCTION.

(a) Declarations of Policy Relating to Meaning and Legal Effect of Agreement- Congress declares that it is the understanding of the United States that the provisions of the United States-India Agreement for Cooperation on Peaceful Uses of Nuclear Energy have the meanings conveyed in the authoritative representations provided by the President and his representatives to the Congress and its committees prior to September 20, 2008, regarding the meaning and legal effect of the Agreement.

(b) Declarations of Policy Relating to Transfer of Nuclear Equipment, Materials, and Technology to India- Congress makes the following declarations of policy:

(1) Pursuant to section 103(a)(6) of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 (22 U.S.C. 8002(a)(6)), in the event that nuclear transfers to India are suspended or terminated pursuant to title I of such Act (22 U.S.C. 8001 et seq.), the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), or any other United States law, it is the policy of the United States to seek to prevent the transfer to India of nuclear equipment, materials, or technology from other participating governments in the Nuclear Suppliers Group (NSG) or from any other source.

(2) Pursuant to section 103(b)(10) of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 (22 U.S.C. 8002(b)(10)), any nuclear power reactor fuel reserve provided to the Government of India for use in safeguarded civilian nuclear facilities should be commensurate with reasonable reactor operating requirements.

(c) Certification Requirement- Before exchanging diplomatic notes pursuant to Article 16(1) of the Agreement, the President shall certify to Congress that entry into force and implementation of the Agreement pursuant to its terms is consistent with the obligation of the United States under the Treaty on the Non-Proliferation of Nuclear Weapons, done at Washington, London, and Moscow July 1, 1968, and entered into force March 5, 1970 (commonly known as the `Nuclear Non-Proliferation Treaty’), not in any way to assist, encourage, or induce India to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices.

(d) Rule of Construction- Nothing in the Agreement shall be construed to supersede the legal requirements of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 or the Atomic Energy Act of 1954.

SEC. 103. ADDITIONAL PROTOCOL BETWEEN INDIA AND THE IAEA.

Congress urges the Government of India to sign and adhere to an Additional Protocol with the International Atomic Energy Agency (IAEA), consistent with IAEA principles, practices, and policies, at the earliest possible date.

SEC. 104. IMPLEMENTATION OF SAFEGUARDS AGREEMENT BETWEEN INDIA AND THE IAEA.

Licenses may be issued by the Nuclear Regulatory Commission for transfers pursuant to the Agreement only after the President determines and certifies to Congress that–

(1) the Agreement Between the Government of India and the International Atomic Energy Agency for the Application of Safeguards to Civilian Nuclear Facilities, as approved by the Board of Governors of the International Atomic Energy Agency on August 1, 2008 (the `Safeguards Agreement’), has entered into force; and

(2) the Government of India has filed a declaration of facilities pursuant to paragraph 13 of the Safeguards Agreement that is not materially inconsistent with the facilities and schedule described in paragraph 14 of the separation plan presented in the national parliament of India on May 11, 2006, taking into account the later initiation of safeguards than was anticipated in the separation plan.

SEC. 105. MODIFIED REPORTING TO CONGRESS.

(a) Information on Nuclear Activities of India- Subsection (g)(1) of section 104 of the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 (22 U.S.C. 8003) is amended–

(1) by redesignating subparagraphs (B), (C), and (D) as subparagraphs (C), (D), and (E), respectively; and

(2) by inserting after subparagraph (A) the following new subparagraph:

`(B) any material inconsistencies between the content or timeliness of notifications by the Government of India pursuant to paragraph 14(a) of the Safeguards Agreement and the facilities and schedule described in paragraph (14) of the separation plan presented in the national parliament of India on May 11, 2006, taking into account the later initiation of safeguards than was anticipated in the separation plan;’.

(b) Implementation and Compliance Report- Subsection (g)(2) of such section is amended–

(1) in subparagraph (K)(iv), by striking `and’ at the end;

(2) in subparagraph (L), by striking the period at the end and inserting `; and’; and

(3) by adding at the end the following new subparagraph:

`(M) with respect to the United States-India Agreement for Cooperation on Peaceful Uses of Nuclear Energy (hereinafter in this subparagraph referred to as the `Agreement’) approved under section 101(a) of the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act–

`(i) a listing of–

`(I) all provision of sensitive nuclear technology to India, and other such information as may be so designated by the United States or India under Article 1(Q); and

`(II) all facilities in India notified pursuant to Article 7(1) of the Agreement;

`(ii) a description of–

`(I) any agreed safeguards or any other form of verification for by-product material decided by mutual agreement pursuant to the terms of Article 1(A) of the Agreement;

`(II) research and development undertaken in such areas as may be agreed between the United States and India as detailed in Article 2(2)(a.) of the Agreement;

`(III) the civil nuclear cooperation activities undertaken under Article 2(2)(d.) of the Agreement;

`(IV) any United States efforts to help India develop a strategic reserve of nuclear fuel as called for in Article 2(2)(e.) of the Agreement;

`(V) any United States efforts to fulfill political commitments made in Article 5(6) of the Agreement;

`(VI) any negotiations that have occurred or are ongoing under Article 6(iii.) of the Agreement; and

`(VII) any transfers beyond the territorial jurisdiction of India pursuant to Article 7(2) of the Agreement, including a listing of the receiving country of each such transfer;

`(iii) an analysis of–

`(I) any instances in which the United States or India requested consultations arising from concerns over compliance with the provisions of Article 7(1) of the Agreement, and the results of such consultations; and

`(II) any matters not otherwise identified in this report that have become the subject of consultations pursuant to Article 13(2) of the Agreement, and a statement as to whether such matters were resolved by the end of the reporting period; and

`(iv) a statement as to whether–

`(I) any consultations are expected to occur under Article 16(5) of the Agreement; and

`(II) any enrichment is being carried out pursuant to Article 6 of the Agreement.’.

TITLE II–STRENGTHENING UNITED STATES NONPROLIFERATION LAW RELATING TO PEACEFUL NUCLEAR COOPERATION

SEC. 201. PROCEDURES REGARDING A SUBSEQUENT ARRANGEMENT ON REPROCESSING.

(a) In General- Notwithstanding section 131 of the Atomic Energy Act of 1954 (42 U.S.C. 2160), no proposed subsequent arrangement concerning arrangements and procedures regarding reprocessing or other alteration in form or content, as provided for in Article 6 of the Agreement, shall take effect until the requirements specified in subsection (b) are met.

(b) Requirements- The requirements referred to in subsection (a) are the following:

(1) The President transmits to the appropriate congressional committees a report containing–

(A) the reasons for entering into such proposed subsequent arrangement;

(B) a detailed description, including the text, of such proposed subsequent arrangement; and

(C) a certification that the United States will pursue efforts to ensure that any other nation that permits India to reprocess or otherwise alter in form or content nuclear material that the nation has transferred to India or nuclear material and by-product material used in or produced through the use of nuclear material, non-nuclear material, or equipment that it has transferred to India requires India to do so under similar arrangements and procedures.

(2) A period of 30 days of continuous session (as defined by section 130 g.(2) of the Atomic Energy Act of 1954 (42 U.S.C. 2159 (g)(2)) has elapsed after transmittal of the report required under paragraph (1).

(c) Resolution of Disapproval- Notwithstanding the requirements in subsection (b) having been met, a subsequent arrangement referred to in subsection (a) shall not become effective if during the time specified in subsection (b)(2), Congress adopts, and there is enacted, a joint resolution stating in substance that Congress does not favor such subsequent arrangement. Any such resolution shall be considered pursuant to the procedures set forth in section 130 i. of the Atomic Energy Act of 1954 (42 U.S.C. 2159 (i)), as amended by section 205 of this Act.

SEC. 202. INITIATIVES AND NEGOTIATIONS RELATING TO AGREEMENTS FOR PEACEFUL NUCLEAR COOPERATION.

Section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) is amended by adding at the end the following:

`e. The President shall keep the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate fully and currently informed of any initiative or negotiations relating to a new or amended agreement for peaceful nuclear cooperation pursuant to this section (except an agreement arranged pursuant to section 91 c., 144 b., 144 c., or 144 d., or an amendment thereto).’.

SEC. 203. ACTIONS REQUIRED FOR RESUMPTION OF PEACEFUL NUCLEAR COOPERATION.

Section 129 a. of the Atomic Energy Act of 1954 (42 U.S.C. 2158 (a)) is amended by striking `Congress adopts a concurrent resolution’ and inserting `Congress adopts, and there is enacted, a joint resolution’.

SEC. 204. UNITED STATES GOVERNMENT POLICY AT THE NUCLEAR SUPPLIERS GROUP TO STRENGTHEN THE INTERNATIONAL NUCLEAR NONPROLIFERATION REGIME.

(a) Certification- Before exchanging diplomatic notes pursuant to Article 16(1) of the Agreement, the President shall certify to the appropriate congressional committees that it is the policy of the United States to work with members of the Nuclear Suppliers Group (NSG), individually and collectively, to agree to further restrict the transfers of equipment and technology related to the enrichment of uranium and reprocessing of spent nuclear fuel.

(b) Peaceful Use Assurances for Certain By-Product Material- The President shall seek to achieve, by the earliest possible date, either within the NSG or with relevant NSG Participating Governments, the adoption of principles, reporting, and exchanges of information as may be appropriate to assure peaceful use and accounting of by-product material in a manner that is substantially equivalent to the relevant provisions of the Agreement.

(c) Report-

(1) IN GENERAL- Not later than six months after the date of the enactment of this Act, and every six months thereafter, the President shall transmit to the appropriate congressional committees a report on efforts by the United States pursuant to subsections (a) and (b).

(2) TERMINATION- The requirement to transmit the report under paragraph (1) terminates on the date on which the President transmits a report pursuant to such paragraph stating that the objectives in subsections (a) and (b) have been achieved.

SEC. 205. CONFORMING AMENDMENTS.

Section 130 i. of the Atomic Energy Act of 1954 (42 U.S.C. 2159 (i)) is amended–

(1) in paragraph (1), by striking `means a joint resolution’ and all that follows through `, with the date’ and inserting the following: `means–

`(A) for an agreement for cooperation pursuant to section 123 of this Act, a joint resolution, the matter after the resolving clause of which is as follows: `That the Congress (does or does not) favor the proposed agreement for cooperation transmitted to the Congress by the President on XXXXX .’,

`(B) for a determination under section 129 of this Act, a joint resolution, the matter after the resolving clause of which is as follows: `That the Congress does not favor the determination transmitted to the Congress by the President on XXXXX .’, or

`(C) for a subsequent arrangement under section 201 of the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, a joint resolution, the matter after the resolving clause of which is as follows: `That the Congress does not favor the subsequent arrangement to the Agreement for Cooperation Between the Government of the United States of America and the Government of India Concerning Peaceful Uses of Nuclear Energy that was transmitted to Congress by the President on September 10, 2008.’,

with the date’; and

(2) in paragraph (4)–

(A) by inserting after `45 days after its introduction’ the following `(or in the case of a joint resolution related to a subsequent arrangement under section 201 of the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, 15 days after its introduction)’; and

(B) by inserting after `45-day period’ the following: `(or in the case of a joint resolution related to a subsequent arrangement under section 201 of the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, 15-day period)’.

Speaker of the House of Representatives.

Vice President of the United States and President of the Senate.

Text of the India-related waiver by the Nuclear Suppliers’ Group (NSG)

NSG Rule-Change Allowing Civil Nuclear Cooperation With India

1. At the Plenary meeting on September 6, 2008, the Participating Governments of the Nuclear Suppliers’ Group decided that they:

a. Desire to contribute to the effectiveness and integrity of the global non-proliferation regime, and to the widest possible implementation of the provisions and objectives of the Treaty on the Non-Proliferation of Nuclear Weapons;

b. Seek to avert the further spread of nuclear weapons;

c. Wish to pursue mechanisms to affect positively the non-proliferation commitments and actions of all states;

d. Seek to promote fundamental principles of safeguards and export controls for nuclear transfers for peaceful purposes; and

e. Note the energy needs of India.

2. Participating Governments have taken note of the steps that India has voluntarily taken with respect to the following commitments and actions:

a. Deciding to separate civilian nuclear facilities in a phased manner and to file a declaration regarding its civilian nuclear facilities with IAEA, in accordance with its Separation Plan (circulated as INFCIRC/731);

b. Concluding negotiations with the IAEA and obtaining approval by the Board of Governors on August 1, 2008, for an “Agreement between the Government of India and IAEA for the Application of Safeguards to Civilian Nuclear Facilities,” in accordance with IAEA safeguards, principles, and practices (including IAEA Board of Bovernors Document GOV/1621);

c. Committing to sign and adhere to an Additional Protocol with respect to India’s civil nuclear facilities;

d. Refraining from transfer of enrichment and reprocessing technologies to states that do not have them and supporting international efforts to limit their spread;

e. Instituting a national export control system capable of effectively controlling transfers of multilaterally controlled nuclear and nuclear-related material, equipment and technology;

f. Harmonizing its export control lists and guidelines with those of the Nuclear Suppliers’ Group and committing to adhere to the Nuclear Suppliers’ Group guidelines; and

g. Continuing its unilateral moratorium on nuclear testing, and its readiness to work with others towards the conclusion of a multilateral Fissile Material Cutoff Treaty.

3. Based on the commitments and actions mentioned above, as reiterated by India on September 5, 2008, and without prejudice to national positions thereon, Participating Governments have adopted and will implement the following policies on civil nuclear cooperation with IAEA-safeguarded Indian civil nuclear program:

a. Notwithstanding paragraphs 4(a), 4(b) and 4(c) of INFCIRC/254/Rev. 9/Part 1, Participating Governments may transfer trigger list items and/or related technology to India for peaceful purposes and for use in IAEA-safeguarded civil nuclear facilities, provided that the transfer satisfies all other provisions of INFCIRC/254/Part 1, as revised, and provided that transfers of sensitive exports remain subject to paragraphs 6 and 7 of Guidelines.

b. Notwithstanding paragraphs 4(a) and 4(b) of INFCIRC/254/Rev .7/Part 2, Participating Government may transfer nuclear-related dual-use equipment, materials, software, and related technology to India for peaceful purposes and for use in IAEA-safeguarded civil nuclear facilities, provided that the transfer satisfies all other provisions of INFCIRC/254/Part 2, as revised.

c. At each Plenary, Participating Governments shall notify each other of approved transfers to India of Annexure A and B items listed in INFCIRC/254/Part 1, as revised. Participating Governments are also invited to exchange information, including about their own bilateral agreements with India.

d. With a view to intensification of dialogue and cooperation with India, the Chairman is requested to confer and consult with India and keep the Plenary informed of these consultations.

e. Participating Governments will maintain contact and consult through regular channels, including the Consultative Group and Plenary, for the purpose of considering matters connected with the implementation of all aspects of this Statement, taking into account relevant international commitments or bilateral agreements with India. In the event that one or more Participating Governments consider that circumstances have arisen which require consultations, Participating Governments will meet, and then act in accordance with Paragraph 16 of the Guidelines.

4. In order to facilitate India’s adherence to INFCIRC/254/Parts 1 and 2 and to remain current in its implementations of the Guidelines, the NSG Chair is requested to consult with India regarding changes to and implementation of the Guidelines and inform the Plenary of the outcome of the dialogue with India. Consultations with India regarding proposed amendments will facilitate their effective implementation by India. 

5. Upon request by Participating Governments, the Chairman is requested to submit this Statement to IAEA Director General with a request that it be circulated to all Member States.

India: The Global Bridge-Builder on the Ganges

Brückenbauer am Ganges 

Beitrag von Brahma Chellaney

Erschienen in: Ausgabe Juli/August 2008

Auf dem Weg zu einer multipolaren Weltordnung tun sich Brüche auf: Die ressourcenhungrigen Schwellenländer beuten die wirtschaftlich Abgehängten aus. In Asien verbünden sich demokratische Staaten gegen autokratische Regime. Indien kann dank seiner demokratischen, konsensgeprägten Traditionen helfen, diese Spaltungen zu überwinden.

…ie Weltordnung ist noch nicht multipolar und nicht mehr unipolar. Amerika hat es in dem Jahrzehnt seit dem Zusammenbruch der Sowjetunion bis zum Ende der neunziger Jahre verpasst, unter seiner Ägide eine liberale Weltordnung zu etablieren. Das mag die Vermutung nahe legen, die heutige sei eine nichtpolare Ordnung, in der vielfältige Bündnisse zwischen verschiedenen Akteuren der strategische Imperativ sind. Aber durch das Auftreten neuer Protagonisten auf der geopolitischen Bühne ist es nur eine …

http://www.internationalepolitik.de/archiv/jahrgang-2008/die-ohnmacht-der-machtigen/bruckenbauer-am-ganges.html

English version:

Bridge-builder on the Ganges

India’s Ascent in a Rapidly Changing Global Order

Brahma Chellaney | New global fault lines are evident as power — economic and political — has shifted eastward. Yet, the current international structures shun this reality — to their own peril. As a conduit between the East and West, India can help promote collaboration and consensus.

Internationale Politik, Vol. 7-8 (2008)

While the world is not yet multipolar, it is no longer unipolar, as it had been from the time of the Soviet Union’s collapse to at least the end of the 1990s — a period in which America failed to fashion a new liberal world order under its direction. What we have today is a world still in transition. This may appear to some as a nonpolar world in which multiple engagements between and among different actors have become a strategic imperative. But with the emergence of new players in the geopolitical marketplace, it is only a matter of time before multipolarity begins to characterize the international order.

The ongoing power shifts are primarily linked to Asia’s phenomenal economic rise, the speed and scale of which has no parallel in world history. Seat of ancient civilizations and home to the majority of the world’s population, Asia is bouncing back after a relatively short period of decline. Asia’s share of the world’s economy totaled 60 percent in 1820 at the advent of the industrial revolution. It then went into sharp decline over the next 125 years. Today, it already accounts for 40 percent of global production — a figure that could, according to some projections, rise to 60 percent within the next quarter of a century.

The shifts in economic and political power foretell a much different world — a world characterized by a greater distribution of power, but also by new uncertainties. As history testifies, tectonic shifts in power are rarely quiet. Such shifts usually create volatility in the international system, even if such instability is short-lived. The new international divisiveness may reflect such a reality. Indeed, with the revolution in technology over the past 25 years, we live in a world of rapid change. But unlike in past history, the qualitative reordering of power now underway is due not to battlefield victories or military realignments but to a peaceful factor unique to the modern world: rapid economic growth.

The paradox is that the power shifts are happening even as the United States remains the world’s sole superpower and thus militarily preeminent. Yet the reality is that after the triumphalism of the 1990s, this decade has helped underscore an erosion of US soft and hard power, with many seeing Iraq, Afghanistan, Hurricane Katrina, and the Middle East muddle as symbols of such decline. In an era of greater international fluidity as well as political and financial turbulence, as US Secretary of State Condoleezza Rice admitted, “Whenever Americans start talking about idealism and optimism, international audiences groan.”[1]

Today’s international divisiveness, in part, mirrors the reality that power and influence are no longer one and the same in international relations. Despite its preeminence, the United States’ influence has been on the decline — a trend unlikely to be reversed even with a new administration in Washington. It is becoming increasingly difficult for the United States to set the international agenda on its own or just with its traditional allies. To secure issue-based support, the United States now has to reach out to states beyond its network of traditional allies. At the same time, one must concede that, for the foreseeable future, the United States is likely to remain the most decisive force in international politics and security.

Another factor has also contributed to the divisiveness: While we know the world is in transition, we still do not know what the new order will look like. The impasse or lack of movement on key international issues, therefore, should not come as a surprise. These issues include climate change, nuclear disarmament, international terrorism, global pandemics, and the Doha round of world trade talks. The most pressing challenges today are international in nature and thus demand international responses or solutions. Yet the existing international institutions, including the United Nations, are proving inadequate to deal with such global challenges, in part because such institutions no longer reflect the prevailing power structure. Their representational deficit, and the ensuing impact on their capacity to play an effective, forward-looking role, have become glaring.

The more the world changes, however, the more it remains the same in some critical aspects. The information age and globalization, despite spurring profound changes in polity, economy and security, have not altered the nature of international relations. In fact, the rapid pace of technological and economic change is itself a consequence of nations competing fiercely and seeking relative advantage in an international system based largely on national security.

Nearly a century after chemical arms were introduced in World War I and more than six decades following the nuclear incineration of Hiroshima and Nagasaki, the world is at the threshold of new lethal and precision weapons, as underlined by the ongoing research on lasers, information weapons, space-based platforms, anti-satellite weapons, and directed energy systems. Technological forces are now shaping geopolitics and power equations in ways unforeseen before in history.

We live in a Hobbesian world, with power coterminous with national security and success. The past century was the most momentous in history technologically, with innovations fostering not just rapid economic change, but bringing greater lethality to warfare. Consequently, the 20th century was the bloodiest. Weapons of mass destruction and missiles came to occupy a central military role. In the new century, the advance of technology and the absence of relevant safeguards or regimes evoke possible scenarios of deadly information and space warfare. Such are the challenges from the accelerated weaponization of science that instead of disarmament, rearmament today looms large on the horizon, with the arms race being extended to outer space.

Once the economic power structure changes internationally, shifts in military power will inevitably follow, even if in stages. Seen against the ongoing changes, the transatlantic order of the past 60 years will have to give way to a truly international order. The new order, unlike the current one founded on the ruins of a world war, will have to be established in an era of international peace and thus be designed to reinforce that peace. That means it will need to be more reflective of the consensual needs of today and have a democratic decision-making structure.

Until that happens, the new global fault lines will continue to signal rising geopolitical risks. The tensions between internationalism and nationalism in an era of a supposed single “global village,” for instance, have raised troubling questions about international peace and stability. With greater public awareness from advances in information and communications technologies encouraging individuals and even some states to more clearly define that identity in terms of religion and ethnicity, a divide has emerged between multiculturalism and artificially enforced monoculturalism. The rise of international terrorism shows that increased access to information is both an integrating and dividing force.

The political, economic, and security divides are no less invidious. The world is moving beyond the North-South divide to a four-tier economic division: the prosperous West; rapidly growing economies like those in Asia; countries that have run into stagnation after reaching middle-income nation status; and a forgotten billion people living on the margins of globalization in sub-Saharan Africa. These marginalized people have no stake in globalization. The international neglect of Africa has created a vacuum that China has sought to exploit by aggressively building commercial and political links with a number of African states.

There is also a global resource divide, with the resource-hungry employing aid and arms exports as a diplomatic instrument for commodity outreach. As the specter of resource conflict has grown, the contours of a 21st-century version of the Great Game have emerged in Asia, Africa, and Latin America. Competition over oil and gas resources, driven by rapid economic growth in Asia, indeed constitutes one key dimension of the emerging Great Game.

The ongoing global shifts in economic power are manifest from the changes occurring in the energy and materials sectors, with the growth in demand moving from the developed to the developing world, principally Asia. Energy prices are going to stay high and volatile for the foreseeable future, given these shifts and the soaring demand in countries like China and India, which together are projected to double their oil demand between 2003 and 2020. However, despite the total consumption of energy in the Asia-Pacific having grown by 70 percent between 1992 and 2005, per capita energy consumption is still relatively low by international standards: 749 kilogram of oil equivalent in 2005, compared with the global average of 1,071. Not only will per capita consumption grow sharply in Asia, “on the supply side, Asia’s strong demand environment for energy and basic materials, coupled with its low labor costs, means that the region will increasingly become a global producer of aluminum, chemicals, paper, and steel.”[2]

Slaking the tremendous thirst of the fast-growing Asian economies and meeting the huge demands of the old economic giants in the West are at the core of the great energy dilemma facing the world in the 21st century. Finding an energy “fix” has become imperative if the Asian and other emerging economies are to continue to grow impressively and if the prosperous countries are to head off a slump. Such a fix would have to be rooted in three essential elements: low-cost, preferably renewable alternatives to fossil fuels; greater energy efficiency; and minimizing or eliminating greenhouse-gas emissions. The ongoing structural shifts in global energy markets carry important long-term political and economic implications, in addition to challenging the stability of these markets.

Also, with the rise of unconventional transnational challenges, a new security divide is mirrored both in the failure to fashion a concerted and effective international response to such threats, including transnational terrorism, and the divisiveness on issues like climate change. Efforts are needed to bridge the divide between the traditional security threats and the new unconventional threats that are increasingly the focus of international attention and concern.

Yet another global divide is centered on political values. At a time when a qualitative reordering of power is reshaping international equations, major players are playing down the risk that contrasting political systems could come to constitute the main geopolitical dividing line, potentially pitting an axis of autocracies against a constellation of democracies. The refrain of the players is that pragmatism, not political values, would guide their foreign-policy strategy. Yet the new Great Game under way plays up regime character as a key element.

Ordinarily, the readiness to play by international rules ought to matter more than regime form. But regime character often makes playing by the rules difficult. In modern history, the fault line between democrats and autocrats has at times been papered over through a common geopolitical interest. But today the failure to build greater political homogeneity by defining shared international objectives carries the risk that, in the years ahead, political values could become the main geopolitical dividing line.

It is well established that democracies rarely go to war with each other, even though democratic governments may not be more wedded to peace than autocracies. What role outsiders can play to help democracy take root, however, remains a difficult issue internationally. Yet that issue looms large in relation to Asia. Unlike Europe where democracy has become the norm, only 16 of Asia’s 39 countries surveyed by Freedom House are really free.[3] And as shown by the World Press Freedom Index by the Paris-based international rights group, Reporters Without Borders, a number of Asian countries are among the worst suppressors of freedom, with North Korea ranked at the very bottom of the 167-nation list, Burma 163rd, China 159th, Vietnam 158th, Laos and Uzbekistan 155th, Bangladesh 151st, Pakistan 150th, Singapore 140th and the Philippines 139th.[4]

With the Asia-Pacific region becoming more divided in the face of conflicting strategic cultures, major democracies are likely to be increasingly drawn together to help advance political cooperation and stability through a community of values. It can hardly be overlooked that China’s best friends are fellow autocracies, including pariah states, while those seeking to forestall power disequilibrium in the Asia-Pacific happen to be on the other side of the values-based divide. In that light, political values could easily come to define a new geopolitical divide.

What may seem implausible globally, given America’s lingering tradition of propping up dictators in the Arab-Islamic world, is thus conceivable in the Asia-Pacific theater as a natural corollary to the present geopolitics. It was China that took the lead in 2001 to form the Shanghai Cooperation Organization (SCO) to help unite it with Eurasian strongmen in a geopolitical alliance. Designed originally to bring the Central Asian nations under the Chinese sphere of influence, the SCO is today shaping up as a potential “NATO of the East.” Yet, when Australia, India, Japan, and the United States started the exploratory Quadrilateral Initiative in 2007,[5] Beijing was quick to cry foul and see the apparition of an “Asian NATO.” A Chinese diplomatic protest to each Quad nation followed.

The Quad, founded on the historically valid hypothesis of democratic peace, was supposed to serve as an initial framework to promote security dialogue and interlinked partnerships among major Pacific Rim democracies. Such collaboration is already being built. As an idea, the Quad will not only survive the current vicissitudes, but it also foreshadows what is likely to come. But for the divergent geopolitical interests at play, the differing political values would not matter so much.

More broadly, there is need to improve global geopolitics by building cooperative political approaches that transcend institutions whose structure is rooted in a world that no longer exists. The reality is that just as the G-8, to stay relevant, has initiated the so-called Outreach for dialogue with the emerging powers, the five unelected yet permanent members of the UN Security Council can no longer dictate terms to the rest of the world and need to share executive authority with new powers.

It was a mistake to believe that greater economic interdependence by itself would improve geopolitics. In today’s market-driven world, trade is not constrained by political differences, nor is booming trade a guarantee of moderation and restraint between states.

Better politics is as important as better economics. That requires several major steps whose initiation so far has been frustrated: institutional reforms; greater transparency in strategic doctrines and military expenditures; and cooperative approaches on shared concerns. No international mission today can yield enduring results unless it comes with consistency and credibility and is backed by consensus — the three crucial “Cs.”

Against this background, what role can India play? India’s growing geopolitical weight, high GDP growth rate, and abundant market opportunities have helped increase its international profile. It is widely perceived to be a key “swing state” in the emerging order.

Given the greater political and financial volatility in the world, geopolitical risks today are higher. As a “swing” geopolitical factor, India has the potential to play a constructive role to help mitigate those risks by promoting collaborative international approaches. It is obvious that new thinking and approaches are needed to bridge the global fault lines and build great international cooperation and consensus on the larger geopolitical issues.

India has important advantages that it could exploit to play the role of a bridge between the East and West. Not only is it the world’s largest democracy, India also is the most diverse country. With a sixth of humanity living within its borders, India is more linguistically diverse than even Europe. India is where old traditions go hand-in-hand with post modernity, epitomized by the image of electronic voting machines being carried to a village balloting station atop an elephant.

India also has its constraints. Its neighborhood is more combustible than ever, with an arc of failing or problem states posing serious security-related challenges. Democracy may be India’s biggest asset. But Indian democracy tends to function by the rule of parochial politics. Putting a forward-looking national agenda ahead of parochial short-term politics is not easy. Furthermore, partly due to its historical experiences, the Indian state is intrinsically cautious and shy rather than proactive.

Yet India has a long, historical record of playing a mainstream, cooperative role in international affairs. With its wealth of philosophy and a culture emphasizing compromise, conciliation, and creativity, India views the world as a stage not for civilizational wars but for building bridges and meeting common challenges. Over the centuries, Indian civilization has thrived on synthesis. This ability to synthesize is one of the great strengths that India needs to employ internationally.

It is such traditions that explain, for example, why India lacks the US zeal to export democracy. Instead it looks at democracy in practical terms, as “the most effective means to reconcile the polyglot components of the state,” according to former US Secretary of State Henry Kissinger. He notes: “India, striving neither to spread its culture nor its institutions, is thus not a comfortable partner [of the United States] for global ideological missions.”[6]

Yet India will continue to pride itself as a model of a non-Western democracy. While the concepts of democracy, human rights, and the rule of law are normally associated with the West, India can claim ancient traditions bestowing respect to such values. As the 1998 Nobel economics laureate, Amartya Sen, has said, “A good example is the Emperor Ashoka in India, who during the 3rd century B.C. covered the country with inscriptions on stone tablets about good behavior and wise governance, including a demand for basic freedoms for all — indeed he did not exclude women and slaves as Aristotle did…”[7] According to economist Sen, “The claim that the basic ideas underlying freedom and tolerance have been central to Western culture over the millennia and are somehow alien to Asia is, I believe, entirely rejectable.”

Another issue relates to India’s role in helping shape a stable balance of power. At a time of warming US-Indian relations, too much is made about America’s desire to use India to hold China in check. A durable US-Indian partnership can be built not on strategic opportunism but on shared national interests. Shared interests mean far more than shared democratic values. It appears unlikely that India would allow itself to be used as a foil against another power.

In the coming years, India will increasingly be aligned with the West economically. But, strategically, it can avail of multiple options, even as it moves from the nonalignment of its first prime minister, Jawaharlal Nehru, to a contemporary, globalized practicality. Given the new international equations and power shifts, nonalignment in its original form holds no relevance today. But many Indians believe that the concept of following an independent foreign policy is still relevant.

In keeping with this long-standing preference for policy independence, India is likely to retain the option to forge different partnerships with varied players to pursue a variety of interests in diverse settings. That means that from being nonaligned, it is likely to become multialigned, while tilting more towards Washington even as it preserves the core element of nonalignment — strategic autonomy. In other words, India is likely to continue to chart its own course and make its own major decisions. A multialigned India pursuing omnidirectional cooperation for mutual benefit with key players will be better positioned to advance its interests and promote cooperative international approaches in the changed world.

In the Asian context, India’s interests lie in ensuring that strategic competition among the key players does not deteriorate into a major geopolitical confrontation. The deepening mistrust and nationalistic chauvinism in Asia threaten to create conditions that could seriously harm the interests of all the states. The common challenge thus is to find ways to minimize mutual mistrust and maximize avenues for reciprocally beneficial cooperation. But this can be done not by shying away from the contentious issues in Asia but by seeking to tackle them in a practical way.

India cannot but be concerned about the way the energy competition is beginning to make Asian geopolitics murkier. What is striking is that the new flurry of alliance formation or partnerships in Asia is being led by Asia’s rising powers, not by the United States, which has policed Asia since the end of World War II. In that light, Asian cooperation and security will be very much influenced by the equations between and among the major players. The need to secure stable energy supplies will drive the major players to increasingly integrate their energy policy with foreign policy, as they consciously promote diplomatic strategies geared toward seizing energy-related opportunities overseas.

Energy-driven competition must not be allowed to aggravate interstate rivalries. Mercantilist efforts to assert control over oil and natural gas supplies and transport routes certainly risk fuelling tensions. Given the lack of regional institutions in Asia to avert or manage conflict, the sharpening energy geopolitics makes the need for Asian energy cooperation more pressing. A challenge for India, China, and the other important Asian economies is to manage their energy needs through more efficient transport and consumption and more cooperative import policies. Multinational cooperation on the security of sea lanes is essential to avert strategic friction in Asia. Where maritime claims overlap, the answer to any such dispute cannot be unilateral drilling or production by one side. Disputes over what are legitimate zones of energy exploration in open seas need to be managed through an agreed code of conduct.

In an increasingly interdependent Asia, the interests of India, China, Japan and other players can hardly be advanced if they are seen as engaged in efforts to reduce the promotion of security to a zero-sum game. In fact, as the three main Asian powers, India, China, and Japan can set a model for other states in Asia by establishing stable political relationships that put the accent on mutually beneficial cooperation. Without these powers taking the lead, it may not be possible to deal with the increasingly complex security, energy, and development challenges facing Asia. Deterrence, stability, and peace have been at the heart of Asia’s growing dynamism and prosperity. These elements need to be preserved and strengthened to help fully ripen the Asian renaissance.

The challenges the world confronts today are unique. The issues are new — ranging from accelerating global warming to uncontained international terrorism — and their reach is truly global. In past history, the competition for a balance of power was centered on Europe. Even the Cold War was not really an East-West rivalry but a competition between two blocs over Europe. For the first time, we are facing the task of building power equilibrium across the world while simultaneously having to both adjust to new power shifts and deal with transnational challenges.

Brahma Chellaney is professor of strategic studies at the privately funded Center for Policy Research in New Delhi. His latest book is Asian Juggernaut: The Rise of China, India and Japan.


[1] US Secretary of State Condoleezza Rice, Keynote Address at the World Economic Forum meeting, Davos, January 23, 2008, http://www.state.gov/secretary/rm/2008/01/99624.htm.

[2] Ivo J. H. Bozon, Warren J. Campbell, and Mats Lindstrand, “Global Trends in Energy,” The McKinsey Quarterly, Number 1 (2007), p. 48.

[3] Freedom in the World (Freedom House, 2006).

[4] Reporters Without Borders, “World Press Freedom Index,” http://www.rsf.org/rubrique.php3?id_rubrique=554.

[5] The Quadrilateral Initiative was not intended to be a formal institution. However, the Republican presidential nominee, Senator John McCain, in an article has said: “As president, I will seek to institutionalize the new quadrilateral security partnership among the major Asia-Pacific democracies: Australia, India, Japan, and the United States.” McCain also has larger ambitions: A “worldwide League of Democracies” that could be a “unique handmaiden of freedom.” John McCain, “An Enduring Peace Built on Freedom,” Foreign Affairs (November/December 2007).

[6]Henry A. Kissinger, “Anatomy of a Partnership,” Tribune Media Services, March 10, 2006.

[7] Amartya Sen, “East and West: The Reach of Reason,” The New York Review of Books, July 20, 2000.

(Internationale Politik is Germany’s leading foreign-affairs monthly published by the German Council on Foreign Relations.)

Official Text of India-IAEA Safeguards Agreement Part I

GOV/2008/30

Date: 9 July 2008

Restricted Distribution

Original: English

 

For official use only

 

Nuclear Verification

 

The Conclusion of Safeguards Agreements and Additional Protocols

 

An Agreement with the Government of India for the Application of

Safeguards to Civilian Nuclear Facilities

 

 

Recommended Action

It is recommended that the Board authorize the Director General to conclude with the

Government of India, and subsequently implement, the draft Safeguards Agreement reproduced in the Attachment hereto.

 

 

 

GOV/2008/30

 

Nuclear Verification

 

The Conclusion of Safeguards Agreements and

Additional Protocols

 

An Agreement with the Government of India for the Application of

Safeguards to Civilian Nuclear Facilities

 

1. Referring to its desire to expand civil nuclear cooperation with other Member States of the Agency and to the relevance in this context of the understanding between India and the United States of America expressed in the India-U.S. Joint Statement of 18 July 2005, the Government of India requested the Agency to conclude with it an agreement for the application of safeguards with respect to its civilian nuclear facilities.

2. A draft safeguards agreement was accordingly negotiated with India (attached) using the relevant guidance documents that have been adopted by the Board of Governors for the purposes of concluding INFCIRC/66-type safeguards agreements.

3. The draft agreement provides for the application of safeguards to facilities, nuclear material, nonnuclear material, equipment and components as set out in paragraph 11 of the agreement.

4. At the request of India the draft text includes provisions for the use of the agreement as an “umbrella agreement”. Paragraph 14 thereof provides that any facility notified by India to the Agency will become subject to safeguards under this agreement. Such facilities will be listed on the Annex to the agreement, which will be published, and updated, as India notifies the Agency of additional facilities. In addition, paragraph 22 provides for the possibility of safeguarding under the agreement items that are already subject to safeguards under other Safeguards Agreements concluded by India with the Agency, subject to agreement by the parties to such other Safeguards Agreements. As a consequence, the application of safeguards under those Safeguards Agreements would be suspended for so long as this agreement remains in force.

5. Paragraph 99 provides that India shall take all suitable measures for the physical protection of facilities and nuclear material subject to the agreement, taking into account the recommendations made in INFCIRC/225/Rev.4, as may be amended from time to time.

6. In paragraph 100 of the draft agreement India undertakes to establish and maintain a system of accounting for and control of all items subject to safeguards under the agreement, in accordance with provisions to be set out in the Subsidiary Arrangements.

7. It will be also noted that the draft agreement includes an undertaking by India and the Agency that in the event that India decides to offer an enrichment plant in the future as a facility subject to the agreement, India and the Agency shall consult and agree on the application of the Agency’s safeguards procedures before any such facility is subject to the agreement (paragraph 86).

8. When safeguards are applied to new facilities under this agreement, the Agency will incur additional expenses. On the assumption that 2009 will be the first year that the Agency will start implementing this agreement at new facilities, a supplementary appropriation to the regular budget will be requested as agreed by the Board of Governors at its 9 July 2007 session. The estimated cost for the first year for one new facility would be in the order of € 1.2 million.

 

 

GOV/2008/30

 

DRAFT

 

AGREEMENT BETWEEN THE GOVERNMENT OF INDIA

AND THE INTERNATIONAL ATOMIC ENERGY AGENCY

FOR THE APPLICATION OF SAFEGUARDS TO CIVILIAN

NUCLEAR FACILITIES

RECOGNIZING the significance India attaches to civilian nuclear energy as an efficient, clean and sustainable energy source for meeting global energy demand, in particular for meeting India’s growing energy needs;

WHEREAS India is committed to the full development of its national three-stage nuclear programme to meet the twin challenges of energy security and protection of the environment;

WHEREAS India has a sovereign and inalienable right to carry out nuclear research and development activities for the welfare of its people and other peaceful purposes;

WHEREAS India, a State with advanced nuclear technology, wishes to expand civil nuclear cooperation for its national development;

WHEREAS India is desirous of further expanding cooperation with the International Atomic Energy Agency (hereinafter referred to as “the Agency”) and its Member States with the objective of the full development and use of nuclear energy for peaceful purposes, on a stable, reliable and predictable basis;

WHEREAS India supports the role of the Agency in the promotion of the safe and peaceful uses of nuclear energy as set forth in the Statute of the Agency (hereinafter referred to as the “Statute”);

WHEREAS India and the Agency have long standing cooperation in various aspects of the Agency’s activities;

RECOGNIZING that such cooperation between India and the Agency must be carried out with full respect for the objectives of the Statute and with due observance of the sovereign rights of India;

WHEREAS the Statute authorizes the Agency to apply safeguards, at the request of the parties, to any bilateral or multilateral arrangement, or at the request of a State to any of the State’s activities in the field of atomic energy and, in this context:

Noting the relevance for this Agreement of the understandings between India and the United States of America expressed in the India-U.S. Joint Statement of 18 July 2005, in which India, inter alia, has stated its willingness:

• to identify and separate its civilian and military nuclear facilities and programmes in a phased manner;

• to file with the Agency a declaration regarding its civilian nuclear facilities (hereinafter referred to as “the Declaration”);

• to take a decision to place voluntarily its civilian nuclear facilities under Agency safeguards;

Noting also for the purposes of this Agreement that:

• India will place its civilian nuclear facilities under Agency safeguards so as to facilitate full civil nuclear cooperation between India and Member States of theAgency and to provide assurance against withdrawal of safeguarded nuclear material from civilian use at any time;

• An essential basis of India’s concurrence to accept Agency safeguards under an India-specific safeguards agreement (hereinafter referred to as “this Agreement”) is the conclusion of international cooperation arrangements creating the necessary conditions for India to obtain access to the international fuel market, including reliable, uninterrupted and continuous access to fuel supplies from companies in several nations, as well as support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors; and

• India may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies;

WHEREAS India is desirous of expanding civil nuclear cooperation with other Member States of the Agency;

WHEREAS the conclusion of this Agreement is intended to facilitate the broadest possible cooperation between India and Member States of the Agency in the peaceful uses of nuclear energy and ensure international participation in the further development of India’s civilian nuclear programme on a sustained and long–term basis;

RECALLING that the Agency in accordance with its Statute and safeguards system must take into account, in the implementation of safeguards in India, the need to avoid hampering the peaceful uses of nuclear energy, economic and technological development or international cooperation in the field of peaceful uses of nuclear energy; respect health, safety and physical protection and related security provisions in force in India; and take every precaution to protect commercial, technological and industrial secrets as well as other confidential information coming to its knowledge;

WHEREAS the frequency and intensity of activities described in this Agreement shall be kept to the minimum consistent with the objective of effective and efficient Agency safeguards;

WHEREAS India has requested the Agency to apply safeguards with respect to items subject to this Agreement;

WHEREAS the Board of Governors of the Agency (hereinafter referred to as the "Board") acceded to that request on …………;

NOW THEREFORE, taking into account the above, India and the Agency have agreed as follows:

I. GENERAL CONSIDERATIONS

A. BASIC UNDERTAKINGS

1. India undertakes that none of the items subject to this Agreement, as defined in paragraph 11, shall be used for the manufacture of any nuclear weapon or to further any other military purpose and that such items shall be used exclusively for peaceful purposes and shall not be used for the manufacture of any nuclear explosive device.

2. The Agency undertakes to apply safeguards, in accordance with the terms of this Agreement, to the items subject to this Agreement, as defined in paragraph 11, so as to ensure, as far as it is able, that no such item is used for the manufacture of any nuclear weapon or to further any other military purpose and that such items are used exclusively for peaceful purposes and not for the manufacture of any nuclear explosive device.

B. GENERAL PRINCIPLES

3. The purpose of safeguards under this Agreement is to guard against withdrawal of safeguarded nuclear material from civilian use at any time.

4. The application of safeguards under this Agreement is intended to facilitate implementation of relevant bilateral or multilateral arrangements to which India is a party, which are essential to the accomplishment of the objective of this Agreement.

5. Bearing in mind Article II of the Statute, the Agency shall implement safeguards in a manner designed to avoid hampering India’s economic or technological development, and not to hinder or otherwise interfere with any activities involving the use by India of nuclear material, non-nuclear material, equipment, components, information or technology produced, acquired or developed by India independent of this Agreement for its own purposes.

6. The safeguards procedures set forth in this document shall be implemented in a manner designed to be consistent with prudent management practices required for the economic and safe conduct of nuclear activities.

7. In implementing safeguards, the Agency shall take every precaution to protect commercial and industrial secrets. No member of the Agency’s staff shall disclose, except to the Director General and to such other members of the staff as the Director General may authorize to have such information by reason of their official duties in connection with safeguards, any commercial or industrial secret or any other confidential information coming to his knowledge by reason of the implementation of safeguards by the Agency.

8. The Agency shall not publish or communicate to any State, organization or person any information obtained by it in connection with the implementation of safeguards in India, except that:

(a) Specific information relating to such implementation in India may be given to the Board and to such Agency staff members as require such knowledge by reason of their official duties in connection with safeguards, but only to the extent necessary for the Agency to fulfil its safeguards responsibilities;

(b) Summarized lists of items being safeguarded by the Agency may be published upon decision of the Board; and

(c) Additional information may be published upon decision of the Board and if all States directly concerned agree.

9. In the light of Article XII.A.5 of the Statute, safeguards shall continue with respect to produced special fissionable material and to any materials substituted therefor.

10. Nothing in this Agreement shall affect other rights and obligations of India under international law.

II. CIRCUMSTANCES REQUIRING SAFEGUARDS

A. ITEMS SUBJECT TO THIS AGREEMENT

11. The items subject to this Agreement shall be:

(a) Any facility listed in the Annex to this Agreement, as notified by India pursuant to

paragraph 14(a) of this Agreement;

(b) Any nuclear material, non-nuclear material, equipment and components supplied to India which are required to be safeguarded pursuant to a bilateral or multilateral arrangement to which India is a party;

(c) Any nuclear material, including subsequent generations of special fissionable material, produced, processed or used in or by the use of a facility listed in the Annex or in or by the use of any nuclear material, non-nuclear material, equipment and components referred to in paragraph 11(b);

(d) Any nuclear material substituted in accordance with paragraph 27 or 30(d) of this Agreement for nuclear material referred to in paragraph 11(b) or 11(c) of this Agreement;

(e) Any heavy water substituted in accordance with paragraph 32 of this Agreement for heavy water subject to this Agreement;

(f) Any facility other than a facility identified in paragraph 11(a) above, or any other location in India, while producing, processing, using, fabricating or storing any nuclear material, non-nuclear material, equipment or components referred to in paragraph 11(b), (c), (d) or (e) of this Agreement, as notified by India pursuant to paragraph 14(b) of this Agreement.

12. The scope of this Agreement is limited to the items subject to this Agreement as defined in paragraph 11 above.

Declaration

13. Upon entry into force of this Agreement, and a determination by India that all conditions conducive to the accomplishment of the objective of this Agreement are in place, India shall file with the Agency a Declaration, based on its sovereign decision to place voluntarily its civilian nuclear facilities under Agency safeguards in a phased manner.

Notifications

14.

(a) India, on the basis of its sole determination, shall notify the Agency in writing of its decision to offer for Agency safeguards a facility identified by India in the Declaration referred to in paragraph 13, or any other facility to be determined by India. Any facility so notified by India to the Agency will be included in the Annex, and become subject to this Agreement, as of the date of receipt by the Agency of such written notification from India.

(b) Should India, on the basis of its sole determination, decide to import or transfer any nuclear material, non-nuclear material, equipment or components subject to this Agreement to any facility or other location in India provided for in paragraph 11(f) of this Agreement, it shall so notify the Agency. Any such facility or location so notified by India pursuant to this sub-paragraph shall become subject to this Agreement as of the date of receipt by the Agency of such written notification from India.

15. India shall notify the Agency of the receipt of any nuclear material, non-nuclear material, equipment and components referred to in paragraph 11(b) of this Agreement within four weeks of the arrival in India of such nuclear material, non-nuclear material, equipment and components.

Provision of Information to the Agency

16. In the event that India’s notification pursuant to paragraph 14(a) of this Agreement relates to a facility subject to Agency safeguards under another Safeguards Agreement or Agreements in India at the time of entry into force of this Agreement, India shall provide the Agency, along with the relevant notification, such information as is required pursuant to the other Safeguards Agreement or Agreements as relates to any nuclear material, non-nuclear material, equipment and components subject to safeguards thereunder.

17. With respect to any other facility listed in the Annex pursuant to paragraph 14(a) of this Agreement, India shall provide the Agency, within four weeks of the relevant notification, with:

(a) a list of all nuclear material at each such facility; and

(b) where relevant, and if required pursuant to a bilateral or multilateral arrangement to which India is party, information relating to:

(i) Any nuclear material, non-nuclear material, equipment and components supplied to India for production , processing, storage or use in such facility;

(ii) Any nuclear material, including subsequent generations of special fissionable material, produced, processed or used in or by the use of such facility or in or by the use of any nuclear material, non-nuclear material, equipment and components supplied to India for production, processing or use in such facility.

18. Each notification pursuant to paragraph 15 of the Agreement shall include all information relevant to the nuclear material, non-nuclear material, equipment and components so notified, including the facility or location where the nuclear material, non-nuclear material, equipment and components so notified will be received.

19. The information provided by India pursuant to paragraphs 16, 17 and 18 of this Agreement shall specify, inter alia, to the extent relevant, the nuclear and chemical composition, physical form and quantity of the nuclear material; the date of shipment; the date of receipt; the identity of the consigner and the consignee; and any other relevant information, such as the type and capacity of any facility (or parts thereof), components or equipment; and the type and quantity of non-nuclear material. In the case of a facility or other location subject to this Agreement, the information to be provided shall include the type and capacity of that facility or location, and any other relevant information.

20. India shall thereafter notify the Agency by means of reports, in accordance with this Agreement, of any nuclear material, non-nuclear material, equipment and components referred to in paragraph 11(b), (c), (d) or (e) of this Agreement. The Agency may verify the calculations of the amounts and/or quantities of such nuclear material, non-nuclear material, equipment and components, and appropriate adjustments shall be made by agreement between India and the Agency.

21. The Agency shall maintain an inventory of items subject to this Agreement. The Agency shall send a copy of the inventory it maintains with respect to such information to India every twelve months and also at any other times specified by India in a request communicated to the Agency at least two weeks in advance.

B. SAFEGUARDS UNDER OTHER AGREEMENTS

22. The application of Agency safeguards under other Safeguards Agreements concluded by India with the Agency and in force at the time of entry into force of this Agreement may, subject to agreement by the Parties to such other Safeguards Agreements and following notification by India of the relevant facilities pursuant to paragraph 14(a), be suspended while this Agreement is in force. The application of safeguards under this Agreement to nuclear material, non-nuclear material, equipment or components subject to safeguards under such other Agreements shall commence as of the date of receipt by the Agency of India’s notification. India’s undertaking not

to use items subject thereto in such a way as to further any military purpose, and its undertaking that such items shall be used exclusively for peaceful purposes and shall not be used for the manufacture of any nuclear explosive device, shall continue to apply.

C. EXEMPTIONS FROM SAFEGUARDS

General Exemptions

23. Nuclear material that would otherwise be subject to safeguards shall be exempted from safeguards at the request of India, provided that the material so exempted in India may not at any time exceed:

(a) 1 kilogram in total of special fissionable material, which may consist of one or more of the following:

(i) Plutonium;

(ii) Uranium with an enrichment of 0.2 (20 %) and above, taken account of by multiplying its weight by its enrichment;

(iii) Uranium with an enrichment below 0.2 (20 %) and above that of natural uranium, taken account of by multiplying its weight by five times the square of its enrichment;

(b) 10 metric tons in total of natural uranium and depleted uranium with an enrichment above 0.005 (0.5 %);

(c) 20 metric tons of depleted uranium with an enrichment of 0.005 (0.5 %) or below; and

(d) 20 metric tons of thorium.

Exemptions Related to Reactors

24. Produced or used nuclear material that would otherwise be subject to safeguards because it is being or has been produced, processed or used in a reactor which has been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement; or because it is being or has been produced in or by the use of safeguarded nuclear material, shall be exempted from safeguards if:

(a) It is plutonium produced in the fuel of a reactor whose rate of production does not exceed 100 grams of plutonium per year; or

(b) It is produced in a reactor determined by the Agency to have a maximum calculated power for continuous operation of less than 3 thermal megawatts, or is used in such a reactor and would not be subject to safeguards except for such use, provided that the total power of the reactors with respect to which these exemptions apply in any State may not exceed 6 thermal megawatts.

25. Produced special fissionable material that would otherwise be subject to safeguards only because it has been produced in or by the use of safeguarded nuclear material shall in part be exempted from safeguards if it is produced in a reactor in which the ratio of fissionable isotopes within safeguarded nuclear material to all fissionable isotopes is less than 0.3 (calculated each time any change is made in the loading of the reactor and assumed to be maintained until the next such change). Such fraction of the produced material as corresponds to the calculated ratio shall be subject to safeguards.

D. SUSPENSION OF SAFEGUARDS

26. Safeguards with respect to nuclear material may be suspended while the material is transferred, under an arrangement or agreement approved by the Agency, for the purpose of processing, reprocessing, testing, research or development, within India or to any other Member State or to an international organization, provided that the quantities of nuclear material with respect to which safeguards are thus suspended in India may not at any time exceed:

(a) 1 effective kilogram of special fissionable material;

(b) 10 metric tons in total of natural uranium and depleted uranium with an enrichment 0.005 (0.5 %);

(c) 20 metric tons of depleted uranium with an enrichment of 0.005 (0.5 %) or below; and

(d) 20 metric tons of thorium.

27. Safeguards with respect to nuclear material in irradiated fuel which is transferred for the purpose of reprocessing may also be suspended if the State or States concerned have, with the agreement of the Agency, placed under safeguards substitute nuclear material in accordance with paragraph 30(d) of this Agreement for the period of suspension. In addition, safeguards with respect to plutonium contained in irradiated fuel which is transferred for the purpose of reprocessing may be suspended for a period not to exceed six months if the State or States concerned have, with the agreement of the Agency, placed under safeguards a quantity of uranium whose enrichment in the

isotope uranium-235 is not less than 0.9 (90%) and the uranium-235 content of which is equal in weight to such plutonium. Upon expiration of the said six months or the completion of reprocessing, whichever is earlier, safeguards shall, with the agreement of the Agency, be applied to such plutonium and shall cease to apply to the uranium substituted therefor.

28. Under conditions specified in the Subsidiary Arrangements, the Agency shall suspend safeguards with respect to any parts of the facilities listed in the Annex which are removed for maintenance or repair.

E. TERMINATION OF SAFEGUARDS

29. The termination of safeguards on items subject to this Agreement shall be implemented taking into account the provisions of GOV/1621 (20 August 1973).

30. Nuclear material shall no longer be subject to safeguards under this Agreement after:

(a) It has been returned to the State that originally supplied it (whether directly or through the Agency), if it was subject to safeguards only by reason of such supply and if:

(i) It was not improved while under safeguards; or

(ii) Any special fissionable material that was produced in it under safeguards has been

separated out, or safeguards with respect to such produced material have been terminated; or

(b) The Agency has determined that:

(i) It was subject to safeguards only by reason of its use in a principal nuclear facility which has been supplied wholly or substantially under a project agreement, submitted to

safeguards under a safeguards agreement by the parties to a bilateral or multilateral

arrangement or unilaterally submitted to safeguards under a safeguards agreement;

(ii) It has been removed from such a facility; and

(iii) Any special fissionable material that was produced in it under safeguards has been

separated out, or safeguards with respect to such produced material have been terminated; or

(c) The Agency has determined that it has been consumed, or has been diluted in such a way that it is no longer usable for any nuclear activity relevant from the point of view of safeguards, or has become practicably irrecoverable; or

(d) India has, with the agreement of the Agency, placed under safeguards, as a substitute, such amount of the same element, not otherwise subject to safeguards, as the Agency has determined contains fissionable isotopes:

(i) Whose weight (with due allowance for processing losses) is equal to or greater than the weight of the fissionable isotopes of the material with respect to which safeguards are to terminate; and

(ii) Whose ratio by weight to the total substituted element is similar to or greater than the

ratio by weight of the fissionable isotopes of the material with respect to which safeguards are to terminate to the total weight of such material; provided that the Agency may agree to the substitution of plutonium for uranium-235 contained in uranium whose enrichment is not greater than 0.05 (5.0 %); or

(e) It has been transferred out of India under paragraph 33(d) of this Agreement, provided that such material shall again be subject to safeguards if it is returned to India; or

(f) The terms of this Agreement, pursuant to which it was subject to safeguards under this Agreement, no longer apply, by expiration of this Agreement or otherwise.

31. If India wishes to use safeguarded source material for non-nuclear purposes, such as the production of alloys or ceramics, it shall agree with the Agency on the circumstances under which the safeguards on such material may be terminated.

32. Safeguards shall be terminated on a facility listed in the Annex after India and the Agency have jointly determined that the facility is no longer usable for any nuclear activity relevant from the point of view of safeguards. Safeguards on non-nuclear material, equipment and components subject to this Agreement may be terminated as and when the non-nuclear material, equipment or components have been returned to the supplier or arrangements have been made by the Agency to safeguard the non-nuclear material, equipment or components in the State to which it is being transferred, or when India and the Agency have jointly determined that the non-nuclear material, equipment or component in question has been consumed, is no longer usable for any nuclear

activity relevant from the point of view of safeguards or has become practicably irrecoverable. Safeguards may be terminated on heavy water upon India’s placing under safeguards as substitute the same amount of heavy water of equivalent or better heavy water concentration.

F. TRANSFERS

33. No safeguarded nuclear material shall be transferred outside the jurisdiction of India until the Agency has satisfied itself that one or more of the following conditions apply:

(a) The material is being returned, under the conditions specified in paragraph 30(a) of this Agreement, to the State that originally supplied it; or

(b) The material is being transferred subject to the provisions of paragraph 26 or 27 of this Agreement; or

(c) Arrangements have been made by the Agency to safeguard the material in the State to which it is being transferred; or

(d) The material was not subject to safeguards pursuant to a project agreement and will be subject, in the State to which it is being transferred, to safeguards other than those of the Agency but generally consistent with such safeguards and accepted by the Agency.

34. India shall notify the Agency of its intention to transfer within its jurisdiction any nuclear material, non-nuclear material, equipment or component subject to this Agreement to any facility or location in India to which paragraph 11(f) applies and shall provide to the Agency, before such transfer is effected, the necessary information to enable the Agency to make arrangements for the application of safeguards to such nuclear material, non-nuclear material, equipment or component after its transfer. The Agency shall also be given the opportunity as early as possible in advance of such a transfer to review the design of the facility for the sole purpose of determining that the

arrangements provided for in this Agreement can be effectively applied. India may transfer the nuclear material, non-nuclear material, equipment or component only after the Agency has confirmed that it has made such arrangements.

35. India shall notify the Agency of its intention to transfer any nuclear material, non-nuclear material, equipment or component subject to this Agreement to a recipient which is not under the jurisdiction of India. Except as provided for in paragraph 30(a) of this Agreement, such nuclear material, non-nuclear material, equipment or component shall be so transferred only after the Agency has informed India that it has satisfied itself that Agency safeguards will apply with respect to the nuclear material, non-nuclear material, equipment or component in the recipient country. Upon receipt by the Agency of the notification of transfer from India and the confirmation of receipt by the recipient country, safeguards on such nuclear material, non-nuclear material, equipment or component shall be terminated under this Agreement.

36. The notifications referred to in paragraphs 34 and 35 of this Agreement shall be made to the Agency sufficiently in advance to enable it to make the arrangements required before the transfer is effected. The Agency shall promptly take any necessary action. The time limits for and the contents of these notifications shall be set out in the Subsidiary Arrangements.

III. SAFEGUARDS PROCEDURES

A. GENERAL PROCEDURES

Introduction

37. The safeguards procedures to be applied by the Agency are those specified in this Agreement, as well as such additional procedures as result from technological developments, and other procedures as may be agreed to between the Agency and India. The safeguards procedures set forth below shall be followed, as far as relevant, with respect to any item subject to this Agreement.

38. The Agency shall conclude with India Subsidiary Arrangements concerning the implementation of the safeguards procedures referred to above. The Subsidiary Arrangements shall also include any necessary arrangements for the application of safeguards to any item subject to this Agreement, including such containment and surveillance measures as are required for the effective implementation of safeguards. The Subsidiary Arrangements shall enter into force no later than six months after entry into force of this Agreement.

Design Review

39. The Agency shall review the design of principal nuclear facilities, for the sole purpose of satisfying itself that a facility will permit the effective application of safeguards.

40. The design review of a principal nuclear facility shall take place at as early a stage as possible. In particular, such review shall be carried out in the case of:

(a) An Agency project, before the project is approved;

(b) A bilateral or multilateral arrangement under which the responsibility for administering

safeguards is to be transferred to the Agency, or an activity or facility unilaterally submitted by India, before the Agency assumes safeguards responsibilities with respect to the facility;

(c) A transfer of safeguarded nuclear material to a principal nuclear facility whose design has not previously been reviewed, before such transfer takes place; and

(d) A significant modification of a principal nuclear facility whose design has previously been reviewed, before such modification is undertaken.

41. To enable the Agency to perform the required design review, India shall submit to it relevant design information sufficient for the purpose, including information on such basic characteristics of the principal nuclear facility as may bear on the Agency’s safeguards procedures. The Agency shall require only the minimum amount of information and data consistent with carrying out its responsibility under this section. It shall complete the review promptly after the submission of this information by India and shall notify the latter of its conclusions without delay.

42. If the Agency wishes to examine design information which India regards as sensitive, the Agency shall, if India so requests, conduct the examination on premises in India. Such information should not be physically transmitted to the Agency provided that it remains readily available for examination by the Agency in India.

Records

43. India shall arrange for the keeping of records with respect to principal nuclear facilities and also with respect to all safeguarded nuclear material outside such facilities. For this purpose India and the Agency shall agree on a system of records with respect to each facility and also with respect to such material, on the basis of proposals to be submitted by India in sufficient time to allow the Agency to review them before the records need to be kept.

44. All records shall be kept in English.

45. The records shall consist, as appropriate, of:

(a) Accounting records of all safeguarded nuclear material; and

(b) Operating records for principal nuclear facilities.

46. All records shall be retained for at least two years.

Reports

General Requirements

47. India shall submit to the Agency reports with respect to the production, processing and use of safeguarded nuclear material in or outside principal nuclear facilities. For this purpose, India and the Agency shall agree on a system of reports with respect to each facility and also with respect to safeguarded nuclear material outside such facilities, on the basis of proposals to be submitted by India in sufficient time to allow the Agency to review them before the reports need to be submitted. The reports need include only such information as is relevant for the purpose of safeguards.

48. All reports shall be submitted in English.

Routine Reports

49. Routine reports shall be based on the records compiled in accordance with paragraphs 43 to 46 of this Agreement and shall consist, as appropriate, of:

(a) Accounting reports showing the receipt, transfer out, inventory and use of all safeguarded nuclear material. The inventory shall indicate the nuclear and chemical composition and physical form of all material and its location on the date of the report; and

(b) Operating reports showing the use that has been made of each principal nuclear facility since the last report and, as far as possible, the programme of future work in the period until the next routine report is expected to reach the Agency.

50. The first routine report shall be submitted as soon as:

(a) There is any safeguarded nuclear material to be accounted for; or

(b) The principal nuclear facility to which it relates is in a condition to operate.

Progress in Construction

51. The Agency may request information as to when particular stages in the construction of a principal nuclear facility have been or are to be reached.

Special Reports

52. India shall report to the Agency without delay:

(a) If any unusual incident occurs involving actual or potential loss or destruction of, or damage to, any safeguarded nuclear material or principal nuclear facility;

(b) If there is good reason to believe that safeguarded nuclear material is lost or unaccounted for in quantities that exceed the normal operating and handling losses that have been accepted by the Agency as characteristic of the facility; or

(c) Disruption of operation of facilities listed in the Annex on account of material violation or breach of bilateral or multilateral arrangements to which India is a party.

53. India shall report to the Agency, as soon as possible, and in any case within two weeks, any transfer not requiring advance notification that will result in a significant change (to be defined by the Agency in agreement with India) in the quantity of safeguarded nuclear material in a principal nuclear facility. Such report shall indicate the amount and nature of the material and its intended use.

Amplification of Reports

54. At the Agency’s request, India shall submit amplifications or clarifications of any report, in so far as relevant for the purpose of safeguards.

 

Official Text of India-IAEA Safeguards Agreement Part II

 

Inspections

General Procedures

55. The Agency may inspect any items subject to this Agreement.

56. The purpose of safeguards inspections under this Agreement shall be to verify compliance by India with this Agreement and to assist India in complying with this Agreement and in resolving any questions arising out of the implementation of safeguards.

57. The number, duration and intensity of inspections actually carried out shall be kept to the minimum consistent with the effective implementation of safeguards, and if the Agency considers that the authorized inspections are not all required, fewer shall be carried out.

58. Inspectors shall neither operate any facility themselves nor direct the staff of a facility to carry out any particular operation.

Routine Inspections

59. Routine inspections may include, as appropriate:

(a) Audit of records and reports;

(b) Verification of the amount of safeguarded nuclear material by physical inspection, measurement and sampling;

(c) Examination of principal nuclear facilities, including a check of their measuring instruments and operating characteristics; and

(d) Check of the operations carried out at principal nuclear facilities.

60. Whenever the Agency has the right of access to a principal nuclear facility at all times, it may perform inspections of which notice as required by paragraph 4 of the Inspectors Document need not be given, in so far as this is necessary for the effective application of safeguards. The actual procedures to implement these provisions shall be agreed upon between India and the Agency.

Initial Inspections of a Principal Nuclear Facility

61. To verify that the construction of a principal nuclear facility is in accordance with the design reviewed by the Agency, an initial inspection or inspections of the facility may be carried out:

(a) As soon as possible after the facility has come under Agency safeguards, in the case of a facility already in operation; and

(b) Before the facility starts to operate, in other cases.

62. The measuring instruments and operating characteristics of the facility shall be reviewed to the extent necessary for the purpose of implementing safeguards. Instruments that will be used to obtain data on the nuclear materials in the facility may be tested to determine their satisfactory functioning. Such testing may include the observation by inspectors of commissioning or routine tests by the staff of the facility, but shall not hamper or delay the construction, commissioning or normal operation of the facility.

Special Inspections

63. The Agency may carry out special inspections if:

(a) The study of a report indicates that such inspection is desirable; or

(b) Any unforeseen circumstance requires immediate action.

The Board shall subsequently be informed of the reasons for and the results of each such inspection.

64. The Agency may also carry out special inspections of substantial amounts of safeguarded nuclear material that are to be transferred outside the jurisdiction of India, for which purpose India shall give the Agency sufficient advance notice of any such proposed transfer.

B. SPECIAL PROCEDURES FOR REACTORS

Reports

65. The frequency of submission of routine reports shall be agreed between the Agency and India, taking into account the frequency established for routine inspections. However, at least two such reports shall be submitted each year and in no case shall more than 12 such reports be required in any year.

Inspections

66. One of the initial inspections of a reactor shall if possible be made just before the reactor first reaches criticality.

67. The maximum frequency of routine inspections of a reactor and of the safeguarded nuclear material in it shall be determined from the following table:

____________________________________________________________________

Whichever is the largest of:                                                                Maximum number

(a) Facility inventory (including loading);                                          of routine inspections

(b) Annual throughput;                                                                        manually

(c) Maximum potential annual production of special

fissionable material

(Effective kilograms of nuclear material)

 

Up to 1                                                                                                          0

More than 1 and up to 5                                                                                  1

More than 5 and up to 10                                                                                2

More than 10 and up to 15                                                                              3

More than 15 and up to 20                                                                              4

More than 20 and up to 25                                                                              5

More than 25 and up to 30                                                                              6

More than 30 and up to 35                                                                              7

More than 35 and up to 40                                                                              8

More than 40 and up to 45                                                                              9

More than 45 and up to 50                                                                             10

More than 50 and up to 55                                                                             11

More than 55 and up to 60                                                                             12

More than 60                                                           Right of access at all times

 

 

68. The actual frequency of inspection of a reactor shall take account of:

(a) The fact that India possesses irradiated fuel reprocessing facilities:

(b) The nature of the reactor; and

(c) The nature and amount of the nuclear material produced or used in the reactor.

C. SPECIAL PROCEDURES RELATING TO SAFEGUARDED NUCLEAR

MATERIAL OUTSIDE PRINCIPAL NUCLEAR FACILITIES

Nuclear Material in Research and Development Facilities

Routine Reports

69. Only accounting reports need be submitted in respect of nuclear material in research and development facilities. The frequency of submission of such routine reports shall be agreed between the Agency and India, taking into account the frequency established for routine inspections; however, at least one such report shall be submitted each year and in no case shall more than 12 such reports be required in any year.

Routine Inspections

70. The maximum frequency of routine inspections of safeguarded nuclear material in a research and development facility shall be that specified in the table in paragraph 67 of this Agreement for the total amount of material in the facility.

Source Material in Sealed Storage

71. The following simplified procedures for safeguarding stockpiled source material shall be applied if India undertakes to store such material in a sealed storage facility and not to remove it therefrom without previously informing the Agency.

Design of Storage Facilities

72. India shall submit to the Agency information on the design of each sealed storage facility and agree with the Agency on the method and procedure for sealing it.

Routine Reports

73. Two routine accounting reports in respect of source material in sealed storage shall be submitted each year.

Routine Inspections

74. The Agency may perform one routine inspection of each sealed storage facility annually.

Removal of Material

75. India may remove safeguarded source material from a sealed storage facility after informing the Agency of the amount, type and intended use of the material to be removed, and providing sufficient other data in time to enable the Agency to continue safeguarding the material after it has been removed.

Nuclear Material in Other Locations

76. Except to the extent that safeguarded nuclear material outside of principal nuclear facilities is covered by any of the provisions set forth in paragraphs 69 to 75 of this Agreement, the following procedures shall be applied with respect to such material (for example, source material stored elsewhere than in a sealed storage facility, or special fissionable material used in a sealed neutron source in the field).

Routine Reports

77. Routine accounting reports in respect of all safeguarded nuclear material in this category shall be submitted periodically. The frequency of submission of such reports shall be agreed between the Agency and India, taking into account the frequency established for routine inspections; however, at least one such report shall be submitted each year and in no case shall more than 12 such reports be required in any year.

Routine Inspections

78. The maximum frequency of routine inspections of safeguarded nuclear material in this category shall be one inspection annually if the total amount of such material does not exceed five effective kilograms, and shall be determined from the table in paragraph 67 of this Agreement if the amount is greater.

D. PROVISIONS FOR REPROCESSING PLANTS

Introduction

79. Additional procedures applicable to the safeguarding of reprocessing plants are set out below.

Special Procedures

Reports

80. The frequency of submission of routine reports shall be once each calendar month.

Inspections

81. A reprocessing plant having an annual throughput not exceeding 5 effective kilograms of nuclear material, and the safeguarded nuclear material in it, may be routinely inspected twice a year. A reprocessing plant, having an annual throughput exceeding 5 effective kilograms of nuclear material, and the safeguarded nuclear material in it, may be inspected at all times. The arrangements for inspections set forth in paragraph 60 of this Agreement shall apply to all inspections to be made under this paragraph. It is understood that for plants having an annual throughput of more than 60 effective kilograms, the right of access at all times would be normally be implemented by means of continuous inspection.

82. When a reprocessing plant is under Agency safeguards only because it contains safeguarded nuclear material, the inspection frequency shall be based on the rate of delivery of safeguarded nuclear material.

83. India and the Agency shall cooperate in making all the necessary arrangements to facilitate the taking, shipping or analysis of samples, due account being taken of the limitations imposed by the characteristics of a plant already in operation when placed under Agency safeguards.

Mixtures of Safeguarded and Unsafeguarded Nuclear Material

84. India and the Agency may agree on the following special arrangements in the case of a reprocessing plant which has not been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement, and in which safeguarded and unsafeguarded nuclear materials are present:

(a) Subject to the provisions of sub-paragraph (b) below, the Agency shall restrict its safeguards procedures to the area in which irradiated fuel is stored, until such time as all or any part of such fuel is transferred out of the storage area into other parts of the plant. Safeguards procedures shall cease to apply to the storage area or plant when either contains no safeguarded nuclear material; and

(b) Where possible, safeguarded nuclear material shall be measured and sampled separately from unsafeguarded material, and at as early a stage as possible. Where separate measurement, sampling or processing are not possible, the whole of the material being processed in that campaign shall be subject to the safeguards procedures set out in Part III.D of this Agreement. At the conclusion of the processing the nuclear material that is thereafter to be safeguarded shall be selected by agreement between India and the Agency from the whole output of the plant resulting from that campaign, due account being taken of any processing losses accepted by the Agency.

E. PROVISIONS FOR CONVERSION PLANTS, ENRICHMENT PLANTS AND

FABRICATION PLANTS

Introduction

85. Additional procedures applicable to conversion plants and fabrication plants are set out below. This terminology is synonymous with the term “a plant for processing or fabricating nuclear material (excepting a mine or ore-processing plant)” which is used in paragraph 117 of this Agreement.

86. In the event that India decides to offer an enrichment plant in the future as a facility subject to this Agreement, the Agency and India shall consult and agree on the application of the Agency’s safeguards procedures for enrichment plants before any such facility is added to the Annex.

Special Procedures

Reports

87. The frequency of submission of routine reports shall be once each calendar month.

Inspections

88. A conversion plant or a fabrication plant which has been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement, or unilaterally submitted to safeguards under a safeguards agreement, and the nuclear material in it, may be inspected at all times if the plant inventory at any time, or the annual input, of nuclear material exceeds five effective kilograms. Where neither the inventory at any time, nor the annual input, exceeds five effective kilograms of nuclear material, the routine inspections shall not exceed two a year. The arrangements for inspections set

forth in paragraph 57 of this Agreement shall apply to all inspections to be made under this paragraph. It is understood that, for plants having an inventory at any time, or an annual input, of more than 60 effective kilograms, the right of access at all times would normally be implemented by means of continuous inspection. Where neither the inventory at any time nor the annual input exceeds one effective kilogram of nuclear material, the plant would not normally be subject to routine inspection.

89. When a conversion plant or a fabrication plant which has not been supplied wholly or

substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement contains safeguarded nuclear material, the frequency of routine inspections shall be based on the inventory at any time and the annual input of safeguarded nuclear material. Where the inventory at any time, or the annual input, of safeguarded nuclear material exceeds five effective kilograms the plant may be inspected at all times. Where neither the inventory at any time, nor the annual input, exceeds five effective kilograms of safeguarded nuclear material, the routine inspections shall not exceed two a year. The arrangements for inspection set forth in paragraph 60 shall apply to all inspections to be made under this paragraph. It is understood that, for plants having an inventory at any time, or an annual input, of more than 60 effective kilograms, the right of access at all times would normally be implemented by means of continuous inspection. Where neither the inventory at any time nor the annual input exceeds one effective kilogram of nuclear material, the plant would not normally be subject to routine inspection.

90. The intensity of inspection of safeguarded nuclear material at various steps in a conversion plant or a fabrication plant shall take account of the nature, isotopic composition and amount of safeguarded nuclear material in the plant. Safeguards shall be applied in accordance with the general principles set forth in paragraphs 4 to 8 of this Agreement. Emphasis shall be placed on inspection to control uranium of high enrichments and plutonium.

91. Where a plant may handle safeguarded and unsafeguarded nuclear material, India shall notify the Agency in advance of the programme for handling safeguarded batches to enable the Agency to make inspections during these periods, due account being also taken of the arrangements under paragraph 92 of this Agreement.

92. India and the Agency shall cooperate in making all the necessary arrangements to facilitate the preparation of inventories of safeguarded nuclear material and the taking, shipping and/or analysis of samples, due account being taken of the limitations imposed by the characteristics of a plant already in operation when placed under Agency safeguards.

Residues, Scrap and Waste

93. India shall ensure that safeguarded nuclear material contained in residues, scrap or waste created during conversion or fabrication is recovered, as far as is practicable, in its facilities and within a reasonable period of time. If such recovery is not considered practicable by India, India and the Agency shall cooperate in making arrangements to account for and dispose of the material.

Safeguarded and Unsafeguarded Nuclear Material

94. India and the Agency may agree on the following special arrangements in the case of a conversion plant or a fabrication plant which has not been supplied wholly or substantially under a project agreement, submitted to safeguards under a safeguards agreement by the parties to a bilateral or multilateral arrangement or unilaterally submitted to safeguards under a safeguards agreement, and in which safeguarded and unsafeguarded nuclear material are both present:

(a) Subject to the provisions of sub-paragraph (b) below, the Agency shall restrict its safeguards procedures to the area in which safeguarded nuclear material is stored, until such time as all or any part of such nuclear material is transferred out of the storage area into other parts of the plant. Safeguards procedures shall cease to be applied to the storage area or plant when it contains no safeguarded nuclear material; and

(b) Where possible, safeguarded nuclear material shall be measured and sampled separately from unsafeguarded nuclear material, and at as early a stage as possible. Where separate measurement, sampling or processing is not possible, any nuclear material containing safeguarded nuclear material shall be subject to the safeguards procedures set out in Part III.E of this Agreement. At the conclusion of processing, the nuclear material that is thereafter to be safeguarded shall be selected, in accordance with paragraph 96 of this Agreement when applicable, by agreement between India and the Agency, due account being taken of any processing losses accepted by the Agency.

Blending of Nuclear Material

95. When safeguarded nuclear material is to be blended with either safeguarded or unsafeguarded nuclear material, India shall notify the Agency sufficiently in advance of the programme of blending to enable the Agency to exercise its right to obtain evidence, through inspection of the blending operation or otherwise, that the blending is performed according to the programme.

96. When safeguarded and unsafeguarded nuclear material are blended, if the ratio of fissionable isotopes in the safeguarded component going into the blend to all the fissionable isotopes in the blend is 0.3 or greater, and if the concentration of fissionable isotopes in the unsafeguarded nuclear material is increased by such blending, then the whole blend shall remain subject to safeguards. In other cases, the following procedures shall apply:

(a) Plutonium/plutonium blending: The quantity of the blend that shall continue to be

safeguarded shall be such that its weight, when multiplied by the square of the weight fraction of contained fissionable isotopes, is not less than the weight of originally safeguarded plutonium multiplied by the square of the weight fraction of fissionable isotopes therein, provided however that:

(i) In cases where the weight of the whole blend, when multiplied by the square of the

weight fraction of contained fissionable isotopes, is less than the weight of originally

safeguarded plutonium multiplied by the square of the weight fraction of fissionable

isotopes therein, the whole of the blend shall be safeguarded; and

(ii) The number of fissionable atoms in the portion of the blend that shall continue to be

under safeguards shall in no case be less than the number of fissionable atoms in the

originally safeguarded plutonium;

(b) Uranium/uranium blending: The quantity of the blend that shall continue to be safeguarded shall be such that the number of effective kilograms is not less than the number of effective kilograms in the originally safeguarded uranium, provided however that:

(i) In cases where the number of effective kilograms in the whole blend is less than in the

safeguarded uranium, the whole of the blend shall be safeguarded; and

(ii) The number of fissionable atoms in the portion of the blend that shall continue to be

under safeguards shall in no case be less than the number of fissionable atoms in the

originally safeguarded uranium;

(c) Uranium/plutonium blending: The whole of the resultant blend shall be safeguarded until the uranium and the plutonium constituents are separated. After separation of the uranium and plutonium, safeguards shall apply to the originally safeguarded component; and

(d) Due account shall be taken of any processing losses agreed upon between India and the Agency.

IV. AGENCY INSPECTORS

97. The provisions of paragraphs 1 to 10 and 12 to 14, inclusive, of the Inspectors Document shall apply to Agency inspectors performing functions pursuant to this Agreement. However, paragraph 4 of the Inspectors Document shall not apply with regard to any facility or to nuclear material to which the Agency has access at all times. The actual procedures to implement paragraph 60 of this Agreement shall be agreed to between the Agency and India.

98. The relevant provisions of the Agreement on the Privileges and Immunities of the Agency (INFCIRC/9/Rev.2) shall apply to the Agency, its inspectors performing functions under this Agreement and to any property of the Agency used by them in the performance of their functions under this Agreement.

V. PHYSICAL PROTECTION

99. India shall take all suitable measures necessary for the physical protection of the facilities and nuclear material subject to this Agreement, taking into account the recommendations made inAgency’s document INFCIRC/225/Rev.4, as may be amended from time to time.

VI. SYSTEM OF ACCOUNTING AND CONTROL

100. India shall establish and maintain a system of accounting for and control of all items subject to safeguards under this Agreement, in accordance with provisions to be set out in the Subsidiary Arrangements.

VII. FINANCE

101. India and the Agency shall each bear any expense incurred in the implementation of their responsibilities under this Agreement. The Agency shall reimburse India for any special expenses, including those referred to in paragraph 6 of the Inspectors Document, incurred by India or persons under its jurisdiction at the written request of the Agency, if India notified the Agency before the expense was incurred that reimbursement would be required. These provisions shall not prejudice the allocation of expenses attributable to a failure by either India or the Agency to comply with this Agreement.

102. India shall ensure that any protection against third party liability, including any insurance or other financial security, in respect of a nuclear incident occurring in a facility under its jurisdiction shall apply to the Agency and its inspectors when carrying out their functions under this Agreement as that protection applies to nationals of India.

VIII. NON-COMPLIANCE

103. If the Board determines in accordance with Article XII.C of the Statute of the Agency that there has been any non-compliance by India with this Agreement, the Board shall call upon India to remedy such non-compliance forthwith, and shall make such reports as it deems appropriate. In the event of failure by India to take full remedial action within a reasonable time, the Board may take any other measures provided for in Article XII.C of the Statute. The Agency shall promptly notify India in the event of any determination by the Board pursuant in this regard.

IX. COOPERATION, INTERPRETATION AND APPLICATION OF

THE AGREEMENT AND SETTLEMENT OF DISPUTES

104. The Agency and India shall cooperate to facilitate the implementation of this Agreement.

105. At the request of either India or the Agency, there shall be consultations about any question arising out of the interpretation or application of this Agreement. India and the Agency shall endeavour to settle by negotiation any dispute arising from the interpretation or application of this Agreement. India shall have the right to request that any question arising out of the interpretation or application of the Agreement be considered by the Board. The Board shall invite India to participate in the discussion of any such question by the Board.

106. In the event of any question or questions arising from the implementation of this Agreement, the Agency shall provide India with an opportunity to clarify and facilitate the resolution of such questions. The Agency shall not draw any conclusions in connection with the question or questions until India has had an opportunity to provide clarifications.

X. FINAL CLAUSES

107. India and the Agency shall, at the request of either of them, consult about amending this Agreement.

108. This Agreement shall enter into force on the date on which the Agency receives from India written notification that India’s statutory and/or constitutional requirements for entry into force have been met.

109. This Agreement shall remain in force until, in accordance with its provisions, safeguards have been terminated on all items subject to this Agreement, or until terminated by mutual agreement of the parties to this Agreement.

XI. DEFINITIONS

110. “Agency” means the International Atomic Energy Agency.

111. “Board” means the Board of Governors of the Agency.

112. “Campaign” means the period during which the chemical processing equipment in a

reprocessing plant is operated between two successive wash-outs of the nuclear material present in the equipment.

113. “Conversion plant” means a facility (excepting a mine or ore-processing plant) to improve unirradiated nuclear material, or irradiated nuclear material that has been separated from fission products, by changing its chemical or physical form so as to facilitate further use or processing. The term conversion plant includes the facility’s storage and analytical sections. The term does not include a plant intended for separating the isotopes of nuclear material.

114. “Director General” means the Director General of the Agency.

115. “Effective kilograms” means:

(i) In the case of plutonium, its weight in kilograms;

(ii) In the case of uranium with an enrichment of 0.01 (1 %) and above, its weight in kilograms multiplied by the square of its enrichment;

(iii) In the case of uranium with an enrichment below 0.01 (1 %) and above 0.005 (0.5 %), its weight in kilograms multiplied by 0.0001; and

(iv) In the case of depleted uranium with an enrichment of 0.005 (0.5 %) or below, and in the case of thorium, its weight in kilograms multiplied by 0.00005.

116. “Enrichment plant” means a plant for separating the isotopes of nuclear material.

117. “Facility” means, for the purposes of this Agreement:

(i) A “principal nuclear facility”, which means a reactor, a plant for processing nuclear material irradiated in a reactor, a plant for separating the isotopes of a nuclear material, a plant for processing or fabricating nuclear material (excepting a mine or ore-processing

plant) or a facility or plant of such other type as may be designated by the Board from

time to time, including associated storage facilities, as well as a critical facility or a

separate storage installation;

(ii) A research and development facility as defined in paragraph 127 of this Agreement;

(iii) Any location where nuclear material in amounts greater than one effective kilogram is customarily used;

(iv) A plant for the upgrading of heavy water or a separate storage installation for heavy water.

118. “Fabrication plant” means a plant to manufacture fuel elements or other components containing nuclear material and includes the plant’s storage and analytical sections.

119. “Improved” means, with respect to nuclear material, that either:

(i) The concentration of fissionable isotopes in it has been increased; or

(ii) The amount of chemically separable fissionable isotopes in it has been increased; or

(iii) Its chemical or physical form has been changed so as to facilitate further use or processing.

120. “Inspector” means an Agency official designated in accordance with the Inspectors Document.

121. “Inspectors Document” means the Annex to the Agency’s document GC(V)/INF/39.

122. “Nuclear material” means any source or special fissionable material as defined in Article XX of the Statute.

123. “Produced, processed or used” means any utilization or any alteration of the physical or chemical form or composition, including any change of the isotopic composition, of nuclear material;

124. “Project agreement” means a safeguards agreement relating to an Agency project and containing provisions as foreseen in Article XI.F.4.(b) of the Statute.

125. “Reactor” means any device in which a controlled, self-sustaining fission chain-reaction can be maintained.

126. “Reprocessing plant” means a facility to separate irradiated nuclear materials and fission products, and includes the facility’s head-end treatment section and its associated storage and analytical sections. This term is synonymous with the term “a plant for processing nuclear material irradiated in a reactor” which is used in paragraph 117 of this Agreement.

127. “Research and development facility” means a facility, other than a principal nuclear facility, used for research or development in the field of nuclear energy.

128. “Statute” means the Statute of the Agency.

129. “Throughput” means the rate at which nuclear material is introduced into a facility operating at full capacity.

130. “Unilaterally submitted” means submitted by India to Agency safeguards.

DONE at Vienna, on the day of 2008, in duplicate, in the English language.

For the GOVERNMENT OF INDIA: For the INTERNATIONAL ATOMIC ENERGY AGENCY

Fashioning a Forward-Looking Approach on Burma Part I

Promoting Political Freedoms in Burma:
International Policy Options

Brahma Chellaney[*]

(Prepared for presentation at the Burma workshop of the Swedish Institute of International Affairs, Stockholm, May 8-9, 2008.)

In a year that marks the 60th anniversary of Burma’s independence, the country’s junta is holding a national referendum on a new Constitution, as part of a touted seven-step “roadmap to democracy.” With the military ensconced in power for 46 long years, few believe it will hand over power to civilians after promised elections in two years’ time. It took the military more than 14 years just to draft a new Constitution,[1] which grants wide-ranging powers and prerogatives to the military, including 25 percent of the seats in the federal and provincial legislatures.

U.S. President George W. Bush has not only denounced the Constitutional process as fatally flawed, but also on May 1, 2008, slapped yet more sanctions on Burma. The latest sanctions are targeted at state-owned companies that produce timber, pearls and precious gem — firms that are, in Bush’s words, “major sources of funds that prop up the junta.”[2] The United States earlier had imposed sanctions on companies controlled by private individuals in the airline and hotel businesses in an effort to smother foreign tourism flow to Burma.

Such is the tragedy that Burma symbolizes that, in one week, it has been battered both by new sanctions and a tropical cyclone from the Bay of Bengal that reportedly killed thousands of residents along the southeastern coast. On the one hand, impoverished Burma is economically vulnerable and thus seemingly susceptible to outside pressure. On the other hand, Burma has proven to be a complex and exceedingly difficult case on what the outside world can do.

What role external actors can play in promoting a democratic transition, however, is an issue not limited to Burma. Autocratic rule abounds in the world, including around Burma. International principles and policies deemed appropriate to help bring about democratic transition in Burma should ideally be such that they permit application in other settings, if promotion of democracy is not to be seen as a political tool to target bad autocracies while shielding those that are perceived in one’s self-interest to be good autocracies.

Yet the temptation to look at Burma in isolation, as if it uniquely exists in a tight compartment, has been so overpowering that the country has been held to special standards and subjected to unrelenting demands that are rarely invoked against stronger, more-entrenched autocracies that still flout near-universal human-rights norms. These other autocracies, unlike Burma, actually pose a challenge to the liberal international order. But such selective targeting may be one reason why international efforts to demilitarize Burma’s polity have been a signal failure. It is helpful to look at Burma in a larger regional and Asian context.

Today, a qualitative reordering of power in Asia is challenging strategic stability and reshaping major equations. A new Great Game is underway, centered on building new alliances, ensuring power equilibrium, gaining greater market access, and securing a larger share of energy and mineral resources. From war-games on the high seas to the establishment of exploratory enterprises like the Shanghai Cooperation Organization and the Quadrilateral Initiative, the ongoing developments are a reminder of that high-stakes game. With the center of gravity in international relations clearly moving toward the Asia-Pacific, this Great Game could indeed determine the future world order.

Asia has almost 60 percent of the world’s population spread across a 43.6 million-square-kilometer area. Geographically, Asia comprises 48 separate nations, including 72 percent of the Russian Federation and 97 percent of Turkey, although in popular perception it seems to comprise only the area from the Japanese archipelago to the Indian subcontinent. Asia encompasses very different and distinct areas — from the sub-arctic, mineral-rich Siberian plains to the subtropical Indonesian archipelago; and from oil-rich desert lands to fertile river valleys.

Asia is also very diverse. It has countries with the highest and lowest population densities in the world — Singapore and Mongolia, respectively. It has some of the wealthiest states in the world, like Japan and Singapore, and also some of the poorest, such as Burma, North Korea and Afghanistan. It has tiny Brunei, Bhutan and the Maldives and demographic titans like China, India and Indonesia. The smallest country in Asia in terms of population, the Maldives, also happens to be the flattest state in the world. In sharp contrast to the low-lying states like the Maldives, the Philippines and Bangladesh that are threatened by the potential rise of ocean levels due to global warming, Asia has mountainous nations like Nepal, Afghanistan and Kyrgyzstan.

Parts of continental Asia are extraordinarily resource-rich. The desert lands of West Asia, the barren wastes of Central Asia, the Russian shelf in Asia and the Burma’s Bay of Bengal coast together hold nearly 60 per cent of the world’s proven oil and gas reserves. Burma, rich in natural resources, sits on potentially vast quantities of natural gas. There are vast coal reserves in China and the Russian Far East. Siberia holds ores of almost all economically valuable metals, including some of the world’s largest deposits of nickel, gold, lead, molybdenum, diamonds, silver and zinc. The belt running down from the Malay Peninsula to Indonesia contains huge deposits of tin.

Asia, however, is largely a water-stressed continent. Large parts of Asia depend on monsoon precipitation and on the glacially sourced water reserves of the Himalayas and Tibetan highlands, the riverhead of Asia’s waters. Climate change will have a significant impact on the availability and flow of water resources in Asia and thus become an important factor in the national-security calculus of several states, including the world’s two most populous countries — China and India. The geopolitical importance of the Tibetan plateau, whose forcible absorption in 1950 brought the new Chinese state to the borders of India, can be seen from the fact that most of the great Asian rivers originate there. If the demand for water in Asia continues to grow at the current rate, the interstate and intrastate disputes over water resources could potentially turn into conflicts in the years ahead.

Another area of sharpening Asian geopolitics is energy. Competition over oil and gas resources, driven by rapid economic growth in Asia, indeed constitutes one key dimension of the emerging Great Game. The ongoing global shifts in economic power are manifest from the changes occurring in the energy and materials sectors, with the growth in demand moving from the developed to the developing world, principally Asia. Energy prices are going to stay high and volatile for the foreseeable future, given these shifts and the soaring demand in countries like China and India, which together are projected to double their oil demand between 2003 and 2020.

Despite the total consumption of energy in the Asia-Pacific having grown by 70 percent between 1992 and 2005, per capita energy consumption is still relatively low by international standards: 749 kg of oil equivalent in 2005, compared with the global average of 1,071 kgoe. Not only will per capita consumption grow sharply in Asia, “on the supply side, Asia’s strong demand environment for energy and basic materials, coupled with its low labor costs, means that the region will increasingly become a global producer of aluminum, chemicals, paper, and steel.”[3]

Slaking the tremendous thirst of the fast-growing Asian economies and meeting the huge demands of the old economic giants in the West are at the core of the great energy dilemma facing the world in the 21st century. Finding an energy “fix” has become imperative if the Asian and other emerging economies are to continue to grow impressively and if the prosperous countries are to head off a slump. Such a “fix” would have to be rooted in three essential elements: low-cost, preferably, renewable alternatives to fossil fuels; greater energy efficiency; and minimizing or eliminating greenhouse-gas emissions. The ongoing structural shifts in global energy markets carry important long-term political and economic implications, besides challenging the stability of these markets.

Employing their large oil and gas resources, energy-rich countries have positioned themselves as key players in the Asian Great Game. Russia, for example, has used its oil and gas exports to revive its fortunes, succeeding in becoming an important geopolitical player again. But for its huge oil and gas wealth, Iran would not have been able to play its nuclear card in defiance of the United Nations Security Council resolutions. In a more modest way, Burma has been able to use gas deals with Thailand and China to earn hard cash in the face of tightening international sanctions. External players like the United States, the European Union and Turkey have sought to influence the pipeline politics in Asia. The United States has not only strengthened its military arrangements in West Asia, but also set up new bases or strategic relationships stretching from the oil-rich Caspian Sea basin to Southeast Asia. In this larger picture, southern Asia (of which Burma is a part) is a strategic gateway between the Gulf and the Far East, and between Central Asia and the Indian Ocean rim.

In the coming years, the voracious appetite for energy supplies in Asia is going to make the geopolitics murkier. The present geopolitical maneuvering is an indicator of that. What is striking is that the new flurry of alliance formation or partnerships in Asia is being led by Asia’s rising powers, not by the United States, which has policed Asia since the end of World War II. In this larger context, Asian cooperation and security will be very much influenced by the equations between and among the major players. The need to secure stable energy supplies will drive the major players in Asia to increasingly integrate their energy policy with foreign policy, as they consciously promote diplomatic strategies geared toward seizing energy-related opportunities overseas.

Energy-driven competition should not be allowed to aggravate interstate rivalries in Asia. Mercantilist efforts to assert control over oil and natural gas supplies and transport routes certainly risk fuelling tensions. Given the lack of regional institutions in Asia to avert or manage conflict, the sharpening energy geopolitics makes the need for Asian energy cooperation more pressing. A challenge for states in Asia is to manage their energy needs through more efficient transport and consumption and more cooperative import policies. Multinational cooperation on the security of sea-lanes is essential to avert strategic friction in Asia. Where maritime claims overlap, the answer to any such dispute cannot be unilateral drilling or production by one side. Disputes over what are legitimate zones of energy exploration in open seas need to be managed through an agreed code of conduct.

Multilateral energy cooperation in Asia indeed can pave the way for establishing a common Asian market and distribution network for petroleum products, with an Asian benchmark crude oil (similar to Europe’s Brent blend) to serve as a pricing yardstick for other types of crude. Multilateral cooperation can also help to both regulate the competition to buy foreign energy assets and to hedge risks in the event of any supply disruption, whether politically induced or accidental, like a major refinery fire. And just as Europe wants Russia to open its energy industry to European investment to create a two-way relationship, the major oil-and-gas exporters and the major Asian importers should invest in each other’s energy infrastructure.

It is against the larger Asian landscape that one should examine Burma because no country or sub-region can be tightly compartmentalized and seen in isolation. Energy-rich states almost everywhere tend to have non-democratic governments, many of them repressive autocracies. In that sense, Burma is not an exception.

Even though it has significant gas reserves that are coveted by its neighbors, a sanctions-hit Burma has not reaped the energy dividends that most other autocratically ruled energy-rich states have. Also, it is nobody’s case that Burma’s curtailment of basic rights is worse than Saudi Arabia’s.

While it is easy to criticize Thailand for boosting the Burmese junta’s revenues through gas imports and to condemn China for signing a 30-year gas deal with Burma, it should be remembered that no democracy has compunction in buying oil from Saudi Arabia, even though such purchases help fatten the House of Saud, which played a lead role in fanning the spread of Islamist ideology in the world. It bankrolled jihad as part of its aggressive export of the medieval theology of Wahhabism, named after the revivalist movement founded by Muhammad Ibn’Abd al-Wahhab in 1744.

Burma’s resources and vantage location

Burma is a significant state in size and strategic importance. Bordered by Bangladesh, China, India, Laos and Thailand and by the Andaman Sea and the Bay of Bengal, Burma comprises an area of 678,000 square kilometers, making it the country with the largest landmass in the Indochina belt. It currently has a population of nearly 58 million, with a large and capable workforce.

Few can overlook Burma’s strategic location. It forms the strategic nucleus between India, China and Southeast Asia. In other words, Burma is where Asia’s main regions converge — South Asia, Southeast Asia and East Asia.

Projects to establish an ‘Asian Highway Network’ and a ‘Trans-Asian Railway’ have only underlined Burma’s strategic-bridge role. It is a country that geographically bridges Asia’s major economies. In the Asian highway project, Burma will help connect five important countries – India, China, Bangladesh, Laos, and Thailand. The Asian Development Bank has been negotiating a cross-border transport agreement among the six Mekong River-linked countries – China, Thailand, Laos, Cambodia, Vietnam and Burma.

Burma’s bounteous natural resources include natural gas, precious metals and gems, high-quality tropical hardwoods, and marine fisheries. Given that profile and position, Burma can hardly be ignored.

With major rivers and bountiful rainfall, Burma has fertile soil. But for recurrent flooding and cyclones, shortages of fertilizers and pesticides, and general mismanagement by the military-run government, its agricultural output could be much higher. Agriculture, including fisheries, forestry, livestock, rice and sugarcane, made up almost 57 percent of its GDP in 2005.[4] In the past decade, Burma has emerged as a major exporter to India, for instance, of lentils, which — rich in protein — are an integral part of the diet of vegetarians. India has the world’s highest concentration of vegetarians. Last year, Burma supplied around one million tons of lentils, or half of India’s total imports, according to official data.

Burma is a significant producer of antimonial lead, copper matte, nickel speiss, and precious gemstones. Much of the copper exports go to Japan. It also produces barite, carbonate rocks, chromite, clays, coal (lignite), copper, feldspar, gold, gypsum, lead, natural gas, nickel, silver, tin, tungsten and zinc. Among processed mineral products, Burma produces polished precious gemstones, refined gold, refined lead, petroleum products and crude steel. Minerals, however, constitute a tiny fraction of its GDP.

With its exports totaling $3.1 billion and imports adding up to $3.5 billion in 2005, Burma’s main trading partners are its neighbors — Thailand, China, India, Singapore and Malaysia. In merchandise trade, Thailand ranks No. 1. But if the opaque arms trade (for which no reliable figures are available) and services are included, China is perhaps Burma’s largest trading partner.

Through sanctions and officially encouraged disengagement, Burma has become marginal to the foreign-policy interests of the West, thus reinforcing the Western approach emphasizing high-minded principles over strategic considerations, and isolation over engagement. Today, the West has little financial stake left in Burma. About 95 percent of Burma’s trade in fiscal 2007-08 was with other Asian countries. The West also doesn’t have to live with the consequences of its actions. Burma’s neighbors, however, will not escape the effects of an unstable Burma. The imperatives of proximity thus dictate a different policy logic. That has spurred criticism that Asia is helping Burma beat sanctions. [5]

Rich in natural gas, Burma — according to one estimate by Alexander’s Gas & Oil Connections (a site for the gas, oil and affiliated industry) — has recoverable onshore and offshore reserves of 2.46 trillion cubic meters. But with greater foreign investment in exploration, more rich gas deposits could be discovered, especially in Burma’s offshore areas in the Bay of Bengal.

In January 2008, the state-owned China National Petroleum Corp (CNPC) signed production-sharing contracts with the Burmese Ministry of Energy covering deep-sea blocks off Burma’s western Rakhine coast. CNPC is about to begin construction of a trans-Burma pipeline to take the gas from the Shwe field in Rakhine to China’s Yunnan province and beyond. Burma is already exporting natural gas worth $1.2 billion a year to neighboring Thailand from the Gulf of Martaban.

Daewoo International, the South Korean company, is the largest investor in the Shwe gas site. Two Indian energy firms, ONGC Videsh Ltd. and Gas Authority of India Ltd. (GAIL), own a minority stake in that Burmese field, A-1, and in the adjacent A-3 block. This Indo-Korean consortium of Daewoo, ONGC Videsh and GAIL had earlier discovered additional gas deposits in the Shwe site, and consequently revised the Block A1’s total gas estimates to 566 billion cubic meters.

Burma, however, took India unawares by signing an accord with CNPC to export gas to China from the A-1 and A-3 fields over a 30-year period. To New Delhi’s acute embarrassment, Burma first disclosed its intent to sell the gas to China no sooner than India had announced an agreement-in-principle with Beijing to jointly cooperate on securing energy resources overseas, so as to prevent the Sino-Indian competition from continuing to drive up the international price of such assets in third countries.

In recent years, Burma has stepped up piped gas exports to Thailand from its two offshore fields in the Gulf of Martaban — Yadana and Yetagun. But the new rich gas finds in the Bay of Bengal will help generate far more revenue for Burma than the current gas flow from the Gulf of Martaban. According to provisional data, gas exports to Thailand from the Gulf of Martaban fields were estimated to be worth $1.2 billion in fiscal 2007-08 that ended March 31. But because the official exchange rate pegs the kyat, Burma’s currency, to an artificially low rate of 6 to 1 against the U.S. dollar (when the black-market rate is in the vicinity of nearly 1,000 kyat to a dollar), the gas-export earnings are much underreported in the public accounts in kyat — nearly 200 times below the unofficial exchange rate.[6]

France’s Total S.A. (with a 31.24 percent holding) is the main operator at the Yadana gasfield, and its other partners are Chevron Corp. of USA (with a 28.26 percent stake), Thailand’s PTT Exploration and Production Public Company Limited (25.5 percent), and the state-run Myanmar Oil and Gas Enterprise (MOGE) (15 percent).

In the Yetagun gasfield, the main operator is Malaysia’s Petronas (40.91 percent), with MOGE (20.45 percent) and Thailand’s PTTEP and Japan’s Nippon Oil Exploration (19.32 percent each) as its partners. Gas imports from Burma are critical to Thailand’s power generation, with one-fifth of Bangkok’s electricity supply coming from that source.

Interestingly, the United States, while prohibiting new investment by American citizens or entities, has protected the business interests of Chevron Corp., which acquired a stake in the Yadana gas project in Burma when it bought Unocal Corp. in 2005. Because Unocal’s investment in the project predated the imposition of U.S. sanctions, Chevron has used a grandfather clause to stay put in Burma — one of the few large Western companies left there.

On the gas front, Burma has shown that interstate pipeline politics can be played not only by strong states but also by weak states. The junta in Burma has deftly played pipeline politics to keep the veto-empowered China on its side at the United Nations Security Council. Since the early 1990s, the junta has relied on China’s veto power to shield itself from international intervention. It was China that helped beat back an early 2007 U.S.-led attempt to impose a Security Council diktat on the junta to improve its human-rights record.[7]

The junta then proceeded to thank Beijing for torpedoing that sanctions move by withdrawing the status of India’s GAIL as the “preferential buyer” on the A-1 and A-3 blocks, and signing production-sharing contracts with China’s CNPC instead. For India, this was a discomforting diplomatic setback for two reasons: (i) it had sought to sweeten the deal both with a US$20 million “soft credit” and by proposing to construct a power plant in Burma; and (ii) the A-1 and A-3 are partly owned by two Indian state-run companies.[8]

Burma also has some onshore and offshore oilfields, with reserves estimated to be 3.2 billion barrels of recoverable crude oil. It produced 8.133 million barrels of crude oil in 2005, compared with 7.160 million barrels in 2004.[9] At least three oil companies from neighboring countries, including India’s privately owned Essar, are presently exploring for additional oil finds in Burma by conducting feasibility studies involving collection and analysis of geologic and seismic data.

Foreign investment in Burma’s energy sector, however, has not been too significant compared to the sector’s actual potential. Had Burma not been an isolated, sanctions-hit country, the picture would have been different, with international oil majors seeking exploration and production rights there. Sanctions have actually prevented Burma (like Iran) from accessing liquefaction technology to become a major exporter of liquefied natural gas (LNG). That has left Burma largely with one choice: to export natural gas by pipeline. And to whom can it sell natural gas by pipeline? Naturally, to its immediate neighbors, as it is currently doing to Thailand and is going to do to China once the new pipeline is complete. India till date has failed to secure a single production-sharing contract to buy Burmese gas.

Burma’s vantage location has also added its energy-related importance in a different way — at least for China. In addition to importing Burmese gas, China is setting up an energy corridor through Burma involving an oil pipeline to transship crude oil it imports from the Middle East and Africa. In other words, Burma is both a source of energy as well as a transshipment route for China. China presently is finalizing technical details for the construction of the oil pipeline, which — running the length of Burma — will go at least up to Chongqing, a new province carved out of Sichuan, according to one report.[10]

This energy pipeline is part of a strategic corridor — the Irrawaddy Corridor — that China is setting up to link its southwestern provinces with the Bay of Bengal and the Indian Ocean through Burma. The corridor establishes road, river, rail and energy links from China’s Yunnan and Chongqing provinces to Burma’s Chinese-built harbors at Kyaukypu and Thilawa. Along with Beijing’s onshore and offshore strategic assets in Burma, this corridor signifies an enlarging Chinese footprint in that country.

The energy pipeline and strategic corridor through Burma need to be seen in the context of the other Chinese moves and actions in southern Asia that have far-reaching strategic implications for India, Japan, the United States, Australia and other players in the Indian Ocean rim region. Besides the intent to transfer Gulf and African oil for its consumption by cutting the transportation distance and minimizing its exposure to U.S.-policed sea-lanes, China has important strategic objectives in mind in fashioning new transportation routes.[11] A fourfold Chinese strategy is currently being implemented:

1. The north-south strategic trail that the Irrawaddy Corridor represents, granting China access to the Bay of Bengal and the Indian Ocean.

2. A second strategic corridor in a north-south axis being fashioned in southern Asia is the trans-Karakoram corridor stretching from western China down to Pakistan’s new, Chinese-built Gwadar port, at the entrance to the Strait of Hormuz, through which 40 percent of the world’s oil supply passes. Opened in the spring of 2007, the deepwater port at Gwadar represents China’s first strategic foothold in the Arabian Sea. China’s plan is to make Gwadar a major hub transporting Gulf and African oil by pipeline to the Chinese heartland via Xinjiang. Such piped oil would not only cut freight costs and supply time but also lower China’s reliance on shipping lanes through the Malacca and Taiwan Straits. Pakistan has already signed a memorandum of understanding with Beijing for “studies to build the energy corridor to China.”

3. China is shoring up an east-west strategic corridor in Tibet across India’s northern frontiers, as illustrated by the $6.2 billion China-Tibet railway from Gormu to Lhasa that opened in July 2006. Beijing is now extending the Tibetan railway to the Nepalese capital of Katmandu and also to two other points: the tri-junction of the India-Bhutan-Tibet frontiers (in the Chumbi Valley) and the intersection of the India-Burma-Tibet borders.

4. China’s incremental efforts to build a “string of pearls” along the Indian Ocean rim symbolize Beijing’s desire for a fourth strategic corridor. It seeks to assemble this “string of pearls” — a term first used in a report for the Pentagon by U.S. defense contractor Booz Allen Hamilton — through forward listening posts, naval-access agreements and Chinese-built harbors stretching from Pakistan and Sri Lanka to Bangladesh and Burma. The Chinese interest in the Indian Ocean rim now extends to the Seychelles.

For China, Burma is a critical entryway to the Bay of Bengal and the Indian Ocean. Chinese strategic positioning in Burma also needs to be seen against the backdrop of Burma overlooking vital sea lanes of communication through the Strait of Malacca. Not unsurprisingly, the Irrawaddy Corridor has brought Chinese security personnel to Burmese sites close both to India’s eastern strategic assets and to the Strait of Malacca. With the Irrawaddy Corridor stretching to the Bay of Bengal, Chinese security agencies have positioned personnel at several Burmese coastal points, including the Chinese-built harbors.

These security agencies already operate electronic-intelligence and maritime-reconnaissance facilities on the two Coco Islands in the Bay of Bengal. India transferred the Coco Islands to Burma in the 1950s, and Burma then leased the islands to China in 1994. Today, despite denials by the Burmese junta, there is documented evidence, including satellite imagery, showing that China operates a signals intelligence (SIGINT) collection facility from the Great Coco Island.

The Irrawaddy Corridor holds important strategic implications for several players in the Indian Ocean rim region. Such transportation and strategic links, for example, give China leeway to strategically meddle in India’s restive northeast, including the state of Arunachal Pradesh, which China claims to be Chinese territory. Operating in India’s northeast through the plains of Burma (which was part of the British Indian empire) is much easier than having to operate across the mighty Himalayas.[12] It is no wonder that during World War II, both the Allied and the Axis powers classified Burma as the “back door to India.” The potential for Chinese strategic interference has to be viewed against the background that the tribal insurgencies in India’s northeast were all instigated by Maoist China, which trained and armed these rebels partly by exploiting the Burma route. Today, India has an 850-kilometer-long porous border with Burma, with insurgents operating on both sides with the help of shared ethnicity.[13] (Continued below)