The US-India Nuclear Agreement: A Triumph for India

July 15th, 2006 - by admin

David Morrison / Labour & Trade Union Review – 2006-07-15 09:08:38

US President George Bush visited India from 1-3 March 2006. During his visit, progress was made on the implementation of the US-India nuclear agreement, signed in Washington on 18 July 2005 during a visit by Indian Prime Minister, Manmohan Singh.

Specifically, the two governments agreed a “separation plan” for India’s nuclear facilities, as required by the agreement. This plan notionally splits India’s facilities into “civilian” and “military”, as a precursor to the “civilian” facilities being made subject to IAEA monitoring.

If implemented as signed, the US-India nuclear agreement will exempt India from the existing international rules for the export of nuclear material and equipment. As a result, India will acquire the privileges of the five official “nuclear-weapon” states defined by the NPT [1] (the US, the UK, Russia, France and China) without having to sign up to the NPT. Like the official “nuclear-weapon” states, India will be allowed to keep its nuclear arsenal.

As the Indian Government stated bluntly on 29 July 2005 [2]:

“The issue of India’s nuclear weapons or NPT has not been raised in our dialogue with the United States. Our dialogue is predicated on India maintaining its strategic [ie weapons] programme. Our nuclear deterrent cannot be [the] subject of negotiations with foreign governments and is strictly within our sovereign domain. India has rejected demands for joining the NPT as a non-nuclear weapon State.”

The International Rules
The international rules for the export of nuclear material and equipment are laid down in the Guidelines of the Nuclear Supplier Group (NSG) of exporting states (45 in all, today) [3].

Since 1995, these Guidelines have required a receiving state (apart from the five official “nuclear-weapon” states) to have “full-scope” IAEA safeguards, that is, to have an agreement with the IAEA to monitor all the nuclear facilities under its jurisdiction. The purpose of this requirement is to seek to prevent such exports being used by the receiving state, or being exported to another state, for military purposes.

India does not have full-scope IAEA safeguards at the moment – only a few of its facilities are subject to IAEA safeguards. As a consequence, in recent years India has had great difficulty importing material and equipment for its nuclear power programme. In particular, it has great difficulty getting hold of enriched uranium fuel for power reactors at Tarapur, which were supplied by the US in the 1960s.

Since the first Indian nuclear test in 1974, the US has refused to supply additional fuel for them. In the recent past, Russia has been the only state willing to stretch the NSG Guidelines in order to do business with India – it has supplied fuel for the Tarapur reactors – but it has been widely criticised by other NSG members including the US for doing so, on the grounds that this action breached the Guidelines (see my article US entices India with nuclear bribe [4]).

Understandably therefore, India is very keen to get the rules changed so that it has access to the world market in nuclear goods.

Under the US-India nuclear agreement, the US is proposing that the rules be changed dramatically – but only for India. If the US gets its way, India alone (apart from the five official “nuclear-weapon” states) will be permitted to import nuclear material and equipment without having full-scope IAEA safeguards. As we will see, under the separation plan agreed with the US in March, whereas India will have to subject more of its nuclear facilities to IAEA monitoring, it will be free to exempt any facilities that it deems “military”.

Different Standards
India is being proposed by the US for this extraordinary privilege, even though it has never signed the NPT, has developed nuclear weapons and the means of delivering them, and is not going to sign the NPT now – it can’t without giving up its nuclear weapons.

John Bolton, the US Ambassador to the UN, was asked recently what case could be made that Iran is a threat to peace and therefore deserving of sanction by Security Council. He replied [5]:

“I think that the evidence of Iran’s efforts to acquire nuclear weapons, its extensive program to achieve a ballistic missile capability of longer and longer range and greater accuracy, constitutes a classic threat to international peace and security …”

By this definition, India constitutes “a classic threat to international peace and security”, and then some, since it isn’t just making efforts to acquire nuclear weapons – it has already acquired them. But, instead of threatening India with sanctions, not excluding military sanctions, the US proposes that the existing international rules be dramatically loosened for India, and India alone, so that it can import nuclear material and equipment.

It would appear that the US is applying different standards to Iran and India.

“Non-nuclear Weapon” states
All states that signed up to the NPT as “non-nuclear-weapon” states should be eligible for importing nuclear material and equipment under NSG Guidelines – since they are required by Article III(1) of the Treaty to have IAEA safeguards that “shall be applied on all source or special fissionable material in all peaceful nuclear activities within the territory of such State, under its jurisdiction, or carried out under its control anywhere”. In other words, full-scope safeguards.

Under Article III(2), NPT signatories agree not to export nuclear material or equipment unless the receiving state has such safeguards in place:

“Each State Party to the Treaty undertakes not to provide: (a) source or special fissionable material, or (b) equipment or material especially designed or prepared for the processing, use or production of special fissionable material, to any non-nuclear-weapon State for peaceful purposes, unless the source or special fissionable material shall be subject to the safeguards required by this Article.”

However, the NPT itself doesn’t specify the material and equipment that should not be exported to states without full-scope safeguards.

Nuclear Suppliers Group
It was to fill this gap that, just after the NPT came into force in 1970, international guidelines were established specifying a “trigger list” of materials and equipment falling within the ambit of Article III(2).

In 1975, in response to India’s explosion of a nuclear device the previous year, the NSG was set up (see Arms Control Association fact sheet on it here [6]). It now has 45 member states, including all the major nuclear powers.

Note, however, that the NSG is voluntary association of states – it was not established by international treaty and it has no enforcement mechanism to ensure that members adhere to its Guidelines.

Although the NSG Guidelines provide a necessary supplement to the NPT, NSG members represent a small subset of the 190 states or so that have signed the NPT – nearly every state in the world apart from Israel, India and Pakistan has done so.

These states meet as a body every five years to review the operation of the NPT, but the NSG Guidelines, which affect how the NPT operates, are not determined by the NPT signatories, but by the 45 members of the NSG, who have a commercial interest in expanding the market for nuclear material and equipment. This greatly improves the chances of the US getting the NSG Guidelines changed in India’s favour.

(To add to the confusion, the agency responsible for policing the NPT – the IAEA – is a different body again, with 139 affiliated states, including Israel, India and Pakistan.)

NSG Guidelines
As I have said, the key feature of the existing NSG Guidelines [7] is that a recipient state must have full-scope IAEA safeguards. This is specified in paragraph 4(a) of the Guidelines:

“Suppliers should transfer trigger list items or related technology to a non-nuclear-weapon State only when the receiving State has brought into force an agreement with the IAEA requiring the application of safeguards on all source and special fissionable material in its current and future peaceful activities [my emphasis].”

Here, the phrase “non-nuclear-weapon State” has the meaning laid down in the NPT. In Article IX(3) of it, a “nuclear-weapon State” is defined as “one which has manufactured and exploded a nuclear weapon or other nuclear explosive device prior to 1 January 1967”.

There are five of them in this world – the US, the UK, Russia, France and China – and there will never be any more. According to this NPT definition, every other state in the world apart from these five is a “non-nuclear-weapon State”, including states outside the NPT like India that have nuclear weapons.

Endorsed by NPT Conferences
The NPT Review and Extension Conference in 1995 endorsed the NSG’s decision to require full-scope safeguards for nuclear exports (Decision 2 [8], paragraph 12) and the NPT Review Conference in 2000 again supported this principle ([9], paragraph 48).

Norman Wulf, the US representative at the 2000 Conference, wrote the following in Arms Control Today in November 2000 about its conclusions:

“The conference emphasized the central importance of nuclear export controls and reinforced the requirement in the Nuclear Suppliers Group (NSG) Guidelines for full-scope IAEA safeguards in non-nuclear-weapon states as a condition of nuclear supply. By doing so, NPT parties again supported the principle that non-NPT parties should not be eligible for the same degree of assistance to civil nuclear programs as NPT parties in good standing. Reinforcement of this guideline is important given some who have questioned whether this principle should be relaxed for India and Pakistan, which have not accepted full-scope IAEA safeguards.

The answer from NPT parties is clearly no. In that regard, the United States is seriously concerned about the recent Russian decision to supply fuel to India’s Tarapur reactors. This decision … runs counter to the sentiment expressed at the NPT review conference ….” [10]

Plainly, the US stance today towards India is the converse of its stance, and the stance of the NPT review conference, in 2000.

“Nuclear-weapon” States
Having exploded a nuclear weapon before 1 January 1967, five states – the US, the UK, Russia, France and China – qualify to sign up to the NPT as “nuclear-weapon” states and are allowed by the NPT to keep their nuclear weapons. The only significant obligation placed upon them is in Article I of the Treaty, which says:

“Each nuclear-weapon State Party to the Treaty undertakes not to transfer to any recipient whatsoever nuclear weapons or other nuclear explosive devices or control over such weapons or explosive devices directly, or indirectly; and not in any way to assist, encourage, or induce any non-nuclear-weapon State to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices, or control over such weapons or explosive devices.”

This is not an onerous obligation, since they have an interest in preventing other states acquiring the ultimate weapon of self-defence, that is, nuclear weapons.

Also, in stark contrast to “non-nuclear-weapon” states, they have no obligation to place any of their nuclear facilities under IAEA safeguards. True, each of the “nuclear-weapon” states has a voluntary safeguards agreement with the IAEA. The IAEA Safeguards Statement for 2002 [11] explains:

“Voluntary offer safeguards agreements have been concluded with the five nuclear-weapon States. Each State offers some or all of its civilian nuclear material and/or facilities from which the Agency may select some for the application of safeguards.”

Note that the materials and facilities within the scope of the agreement are “offered” for inspection by the “nuclear-weapon” state and the “offer” can be withdrawn at any time. Needless to say, materials and facilities with a military purpose are not offered for inspection. The IAEA carried out no inspections at all in Russia in 2002, because “no facilities were designated for inspection” by Russia [11].

These arrangements are a far cry from the full-scope IAEA safeguards required of all “non-nuclear-weapon” states that have signed the NPT. These safeguards have the well-defined purpose of seeking to ensure that “non-nuclear-weapon” states are not developing nuclear weapons.

However, the purpose of partial-scope IAEA safeguards in states that already possess nuclear weapons is not obvious. Manifestly, it cannot be to prevent the development of a nuclear weapons capability. Nor can it play any role in monitoring, let alone restraining, nuclear weapons production – since oversight of military installations is always outside the scope of the safeguards.

Why do “nuclear-weapon” states enter into these “voluntary offer safeguards agreements”? The IAEA Safeguards Glossary [12] says that they do so “inter alia, to allay concerns that the application of IAEA safeguards could lead to commercial disadvantages for the nuclear industries of non-nuclear-weapon States” (paragraph 1.21). Can it be that they are merely to add to the overheads of the nuclear industries in the official “nuclear-weapon” states?

The Separation Plan
The safeguards arrangement that the US has agreed with India bears some similarity to these “voluntary offer safeguards agreements”. India’s nuclear facilities are to be divided into “civilian” and “military”, with a view to placing the “civilian” under IAEA safeguards, so that material originating from “civilian” facilities is not used for military purposes by India.

Robert Joseph, the Under Secretary for Arms Control and International Security in the State Department, spelt out the US requirements for the split to the House International Relations Committee on 8 September 2005, as follows [13]:

“… the civil/military split must be comprehensive enough … to provide strong assurances to supplier states and the IAEA that materials and equipment provided as part of civil cooperation will not be diverted to the military sphere.”

This means that all foreign-supplied reactors, and all reactors fuelled from abroad, will have to be deemed “civilian” on a permanent basis.

For domestic consumption, India has sought to present the additional IAEA oversight as the result of India accepting “the same responsibilities and practices as other states with advanced nuclear technology”, in other words, that the new arrangements amounted to a “voluntary offer safeguards agreement”, like those entered into by official “nuclear-weapon” states. See, for example, the Indian Government statement of 29 July 2005 [2], which went so far as to say:

“Nuclear weapon states, including the US, have the right to shift facilities from civilian category to military and there is no reason why this should not apply to India.”

However, it is clear that India will not enjoy the complete flexibility of a “voluntary offer safeguards agreement”, in particular, the ability to move facilities in and out of safeguards at will. Facilities that are declared “civilian” will have to stay “civilian”, certainly those that are imported. Reporting to the Lok Sabha on 6 March 2006, the Prime Minister Singh admitted this, saying [14]:

“India will place its civilian nuclear facilities under India-specific safeguards in perpetuity and negotiate an appropriate safeguards agreement to this end with the IAEA [my emphasis].”

However, India will retain great flexibility in the designation of Indian-built facilities. The Indian Government document entitled Implementation of the India-United States Joint Statement of July 18, 2005: India’s Separation Plan [15] sets out the principles on which this designation is based. They are:

“Include in the civilian list only those facilities offered for safeguards that, after separation, will no longer be engaged in activities of strategic [ie military] significance.

“The overarching criterion would be a judgement whether subjecting a facility to IAEA safeguards would impact adversely on India’s national security.

“However, a facility will be excluded from the civilian list if it is located in a larger hub of strategic significance, notwithstanding the fact that it may not be normally engaged in activities of strategic significance.

“A civilian facility would therefore, be one that India has determined not to be relevant to its strategic programme.”

In practice, therefore Indian-built facilities that are essentially civilian in nature, but may have a subsidiary military function, will be deemed “military”, for example, power reactors producing electricity for the national grid will be deemed “military” if plutonium for military purposes is going to be extracted from their spent fuel.

Civilian/Military Split
India has 22 “thermal” nuclear power reactors in operation or under construction. The 6 foreign-supplied reactors (2 by US at Tarapur, 2 by Canada and 2 under construction by Russia) are, or are scheduled to be, under IAEA safeguards.

India has decided that these 6, and 8 other Indian-built reactors (as yet unspecified), are going to be designated “civilian” and put under IAEA safeguards by 2014. This leaves a further 8 Indian-built power reactors that will be designated “military”, presumably to allow plutonium for weapons production to be extracted.

India also has a couple of “breeder” reactors, which are important for the production of plutonium. India has designated these as “military”.

For the future, to quote Prime Minister Singh in his report to the Lok Sabha on 6 March 2006 [14]:

“India has decided to place under safeguards all future civilian thermal power reactors and civilian breeder reactors, and the Government of India retains the sole right to determine such reactors as civilian. This means that India will not be constrained in any way in building future nuclear facilities, whether civilian or military, as per our national requirements.”

He also announced that there would be no IAEA oversight of the Bhabha Atomic Research Centre (which he described as “a nuclear facility of high national security importance”) or of “reprocessing and enrichment capabilities and other facilities associated with the fuel cycle for our strategic programme”.

He was adamant that the separation plan would “not adversely affect our strategic programme” saying:

“There will be no capping of our strategic programme, and the separation plan ensures adequacy of fissile material and other inputs to meet the current and future requirements of our strategic programme, based on our assessment of the threat scenarios. No constraint has been placed on our right to construct new facilities for strategic purposes.

The integrity of our Nuclear Doctrine and our ability to sustain a Minimum Credible Nuclear Deterrent is adequately protected. Our nuclear policy will continue to be guided by the principles of restraint and responsibility.”

Breaking the NPT?
Article I of the NPT requires:

“Each nuclear-weapon State Party to the Treaty … not in any way to assist, encourage, or induce any non-nuclear-weapon State to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices … .”

In this context, India is a “non-nuclear-weapon” state, since it’s not one of the five defined by the NPT to be “nuclear-weapon” states.

The proposed IAEA safeguards for India may ensure that nuclear material and equipment imported by India, and any nuclear material generated by imported equipment, is not used for weapons production. However, India’s ability to import nuclear material for civilian purposes may mean that indigenous material, which would otherwise have to be used for civilian purposes, is available for weapons production. The prime example of this is uranium, of which India has a limited supply.

In other words, “nuclear-weapon” states that supply India with nuclear material and equipment may actually be in breach of their Article I duty “not in any way to assist” India with its weapons programmes.

Amending US law
The implementation of the agreement requires that the US Congress amend US law (the Atomic Energy Act 1954 as amended by the Nuclear Nonproliferation Act 1978) to make an exception for India and that the NSG do likewise in respect of its Guidelines.

There is opposition to the agreement in Congress – on the grounds that the agreement rewards India for failing to sign the NPT and because the US is not getting much in return (apart from the possibility of business for the US nuclear industry). However, it is expected that an appropriate amendment to US law will eventually be passed – an amendment drawn up by the White House has been formally proposed in the House and Senate.

Last autumn, India’s lack of enthusiasm for the US demand that Iran be reported to the Security Council bolstered the opposition to the agreement in Congress, but this is no longer a factor since India voted for the IAEA Board resolution of 6 February 2006 that reported Iran to the Security Council. (In one of the many ironies that surround these matters, because its nuclear industry is technically advanced, India is always a member of the IAEA Board and, despite not being a signatory to the NPT itself, acts as a judge about whether signatories to the NPT are abiding by it).

There is little doubt that India’s vote was motivated by a desire to dampen opposition to the agreement in the US Congress. Back in January, David Mulford, the US Ambassador in New Delhi, stated publicly that the nuclear deal was off, unless India voted to refer Iran to the Security Council. On 25 January 2006, he told the Press Trust of India news agency that, if India didn’t vote for referral, then the US-India nuclear deal would “die in Congress” (see BBC report [16]).

But, this is the only obvious policy shift by India so far at the behest of the US. The US has also been very keen that India pull out of deals with Iran for a gas pipeline to India through Pakistan and for the purchase of vast quantities of liquefied natural gas over 25 years beginning in 2009. However, after a visit by Dr Mehdi Safari, Iran’s Deputy Foreign Minister to New Delhi on 23 February 2006, a statement from the Indian Ministry of Foreign Affairs said [17]:

“The two sides … reaffirmed their commitment to the Iran-Pakistan-India gas pipeline and an early ratification of the LNG deal already signed between the two countries.”

Amending NSG Guidelines
The US administration has said publicly that it will not go ahead with the agreement unless the NSG, which operates by consensus, agrees to an appropriate amendment to its Guidelines. Under Secretary Joseph stated this categorically in evidence to the House International Relations Committee on 8 September 2005 [13] in response to the committee chairman, Henry Hyde, who asked:

“I was hoping you can assure us today, no matter what else happens, the Administration will continue to abide by NSG guidelines, and if you are unable to gain consensus within the NSG for the amendment you need, you will not implement the new India policy in violation of NSG guidelines. Can you give us that assurance?”

Joseph replied:

“Mr. Chairman, we can certainly assure you that we intend to take no action that would undercut the effectiveness of the NSG. It is a very important nonproliferation tool. Our intention is not to change either the consensus procedure of the NSG or to even change the NSG commitment to full scope safeguards as a condition of supply.”

Except for India, of course.

A draft US amendment to the NSG guidelines to make an exception for India was discussed at an NSG meeting on 22-23 March 2006, but didn’t meet with universal approval and no decision was taken (see [18] for text of amendment and an account of the meeting). It should be emphasised that the amendment is country-specific, applying to India alone, the key element being:

“Notwithstanding paragraphs 4(a), 4(b), and 4(c), of INFCIRC/254/Part 1 as revised [the existing NSG guidelines], Participating Governments [in the NSG] may transfer trigger list items and/or related technology to the safeguarded civil nuclear facilities in India (a State not party, and never having been a party, to the NPT) as long as the participating Government intending to make the transfer is satisfied that India continues to fully meet all of the aforementioned nonproliferation and safeguards commitments, and all other requirements of the NSG Guidelines.”

If this is passed, there will be one set of rules for all states in the world bar India and a very different set for India.

Most likely, none of the 45 members of the NSG will hold out against the US. They are, to a greater or lesser extent, suppliers of nuclear material and equipment, so they have a commercial interest in seeing the market for their goods expanded to include India. France and Russia, which are major suppliers of nuclear material and equipment, have publicly expressed enthusiasm for the US proposal. And the US administration has claimed from the outset that Britain is onside (see, for example [19]) but, to the best of my knowledge, the British government has yet to state this publicly.

The interests of NSG members are not the same as the other 150 or so NPT signatories, some of whom will not be pleased to see India, which stayed outside the NPT in order to develop nuclear weapons, being permitted to import nuclear goods without having full-scope IAEA safeguards – a requirement endorsed by NPT members at their 1995 and 2000 conferences.

But, as things stand, if the NSG supplier states unanimously agree to change the rules so that they can do business with India, then the rules will be changed – and there is nothing other NPT members as a body can do about it.

Bush Gibbers
At a press conference in New Delhi on 2 March 2006 [20], Jim Axelrod of CBS News had the temerity to ask President Bush:

“… what kind of message, sir, does it send to the world that India, which has been testing [nuclear weapons] as late as 1998 … and … has not signed the Nuclear Nonproliferation Treaty — is this a reward for bad behavior, as some critics suggest? And what kind of message does it send to other countries that are in the process of developing nuclear technology? Why should they sign the NPT if India is getting a deal without doing so, sir?”

There is no presentable answer to this. Particularly, for a President whose National Security Strategy published in March 2006 [21] declares:

“The proliferation of nuclear weapons poses the greatest threat to our national security.”

and sets an objective of

“closing a loophole in the Non-Proliferation Treaty that permits regimes to produce fissile material that can be used to make nuclear weapons under cover of a civilian nuclear power program”.

So adherence to (a tightened) NPT is apparently a sine qua non of countering the greatest threat to US national security – but India is an exception which is to be rewarded for not adhering (while Iran which is adhering is to be denied what is supposed to be its “inalienable right” under the NPT to nuclear technology for peaceful purposes).

The President had no presentable answer and he gibbered for a full two minutes. It’s worth viewing on the White House website [20]. It begins with the following insights:

“What this agreement says is things change, times change, that leadership can make a difference, and telling the world — sending the world a different message from that which is — what used to exist in people’s minds.

“I — listen, I’ve always said this was going to be a difficult deal for the Prime Minister to sell to his parliament, but he showed great courage and leadership. And it’s difficult for the American President to sell to our Congress, because some people just don’t want to change and change with the times. I understand that. But this agreement is in our interests, and therefore, Jim, I’m confident we can sell this to our Congress as in the interest of the United States, and at the same time make it clear that there’s a way forward for other nations to participate in a — in civilian nuclear power in such a way as to address nonproliferation concerns.”

In fact, the Indian Prime Minister has required little or no courage in arguing for the deal – because the deal required India to do very little, and required it to do absolutely nothing to restrain its nuclear weapons programme. As the Prime Minister told the Lok Sabha on 6 March 2006 [14]:

“There will be no capping of our strategic [ie nuclear weapons] programme, … . No constraint has been placed on our right to construct new facilities for strategic purposes.”

Both sides to the deal are agreed on this: for example, Condoleezza Rice stated it plainly to the House International Relations Committee on 5 April 2006, saying [22]:

“The initiative does not cap Indian nuclear weapons production …”

This was India’s bottom line, and it has achieved its bottom line. Without having its nuclear weapons capability restrained in any way, it will gain access to nuclear materials and equipment for the expansion of its nuclear power programme, access that has been almost completely denied to it for more than 30 years. It will acquire the privileges of a “nuclear-weapon” state recognised by the NPT without having to sign up the NPT. The deal is a triumph for India.

The interesting question is: will the US get its hoped for quid pro quo – that India moves decisively into the US camp in world affairs?

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