Indo-US nuclear deal - ready for Congressional hearing,India and the World, News Analysis, India News Online

In Washington, friends and foes of the US-India civilian nuclear agreement have begun lining up as the deal enters its final stage – Congressional approval. The Senate Foreign Relations Committee will be having its hearing on the deal on Thursday evening, with senior Democratic Senator Christopher Dodd due to chair the proceedings in the absence of Senator Joseph Biden who is currently the Democratic Party Vice President candidate. A Republican lawmaker has also asked House Foreign Affairs Committee Chairman Howard Berman to schedule a quick hearing on the landmark pact. He has written to Howard Berman asking him to mark up the legislation the next time the House panel is in session to ensure that law makers can vote on the agreement before Congress is adjourned this month.

The US Congress which is in session is due to adjourn on September 26 and since there is no guarantee of a lameduck session, the Administration is keen that the nuclear clears Congress this month itself, preferably before Prime Minister Manmohan Singh arrives in Washington DC on September 25 to meet President Bush. Dr. Singh will be paying a brief six-hour visit to Washington for a “working dinner” with Bush, referred to among diplomats as an eat-while-you-talk meeting. He will return to New York the same night. The meeting has been fixed in case the deal is through all the Congressional approval stages and is ready for appending the signatures. Even if the deal has to wait the outcome of the November Presidential election, it is unlikely to be abandoned. None of the two Presidential candidates have spoken against it. And an adviser to John McCain, Ashley Tellis, has said the Republican candidate is committed to the 123 Agreement. He said McCain was an “early and very enthusiastic champion” of the nuclear deal and wanted the agreement to be completed “in exactly the form” Bush and Dr. Singh had envisaged.

As the Senate Foreign Relations Committee prepares to conduct a hearing, Secretary of State Condoleezza Rice is busy urging lawmakers to swiftly approve it. Rice told a group of visiting Indian Members of Parliament led by Parliamentary Affairs Minister Vayalar Ravi on Wednesday that she hopes that the deal will be wrapped up by the time Congress goes out of session on Sept. 26.

Deal backers and baiters

Meanwhile, both backers and opponents of the deal continue their battle, issuing statements of support and lengthy critiques respectively on what is now widely acknowledged to be a breakthrough moment in Indo-US ties. In a letter sent to all 535 members of Congress on Wednesday, a group of non-proliferation lobbyists comprising former US Ambassadors, faith groups and international security and disarmament organizations, urge law makers to reject the deal. The letter pressed Congress to affirm that if India breaks its political pledge not to resume testing, the US nuclear trade shall be terminated and the US will urge all other suppliers to follow suit. The letter, initiated by the Arms Control Association and the Campaign for Responsibility in Nuclear Trade, urged members of Congress ”to actively support measures that would help address the numerous flaws and ambiguities in this proposal and resist overtures to rush towards a vote without carefully considering the far reaching nuclear non-proliferation and security implications of this unprecedented and complex arrangement.”

On the other hand, Republican Joe Wilson, co-chair of the Congressional Caucus on India and Indian Americans, has told US Congressmen in a letter that “India has a sterling record of non-proliferation, a policy of no-first use for nuclear weapons, and the focus of the agreement is to promote peaceful civilian nuclear cooperation. Passage of this measure in an expedient manner will be beneficial to both of our countries”. A similar letter has also been circulated to all 535 members of the US Congress signed by Democrats Gary Ackerman, Joseph Crowley and Frank Pallone as also Wilson and Republican Edward Royce.

The US-India Business Council, the largest trade group in Washington, comprising more than 300 US companies with major investments in India, has pulled all stops in support of the deal. The President of the USIBC, Ron Somers, said, “With the NSG endorsement opening India’s civil nuclear trade with the world, our member-companies strongly feel that all nuclear non-proliferation issues have now effectively been addressed. It is important that our American companies have the opportunity to participate in India’s nuclear build-out, valued at more than $100 billion, with the potential of creating hundreds of thousands of high-end American jobs, providing a boost to a flagging US economy.”

Another non-proliferation lobby sought to spring a surprise by getting a report published in the WASHINGTON POST about a purported Indian nuclear blueprint leak in early 2006. Former UN inspector David Albright told the paper that an Indian Government agency made available to bidders of a project the blueprints depicting the inner working of a centrifuge used to enrich uranium for nuclear bombs - all for a nominal bidding fee. “We got them for about $10”, said Albright, who heads the Washington-based Institute for Science and International Security. He termed the episode “a serious leak of sensitive nuclear information.”

Although he acquired the drawings in Spring 2006 to prove a point about the purported lack of secrecy over such things in India, Albright timed the release of the report just when the Senate panel is due to meet for a final view of the deal. Some of the American critics to the deal, cited by the POST, asserted that India’s record on non-proliferation “is not unblemished as is claimed by the White House.”

In the meanwhile, putting a gentle subtle diplomatic pressure on the US, India has said that it was not prepared to put its agreement on nuclear cooperation with other countries on hold indefinitely, thus seeking to delink its nuclear technology dealings with other important suppliers from the US now that it has got the NSG waiver. Earlier, the US Secretary of State, Condoleezza Rice, had conveyed to External Affairs Minister, Pranab Mukherjee that India should not ignore the role played to have the waiver granted by the NSG and therefore should not put US companies at a disadvantage to hurry up with nuclear technology tie-ups with such countries as France and Russia while the Bush Administration struggles to have the 123 Agreement finally ratified by Congress. US corporations are also eyeing nuclear business estimated at anything between $40 billion and $100 billion with India now that it has got the NSG waiver. But, now an official source in New Delhi was quoted as saying, “Though India has put its agreements with other countries on nuclear cooperation on hold, it cannot be seen as an open-ended wait.”

Recent revelations – nothing new

Some doubts about the Bush Administration’s sincerity were created last week when it emerged that in a letter to Congress, President Bush had said that Washington was not legally bound to give India high tech nuclear technology despite the 123 Agreement. On September 10, Bush repudiated a key provision of the 123 Agreement when he declared the fuel supply assurances recorded in Article 5(6) of the agreement were not legally binding. This formulation has been repeated in two other documents submitted to Capitol Hill last week as part of the ‘123 Agreement package’: the “Report Pursuant to Section 104(c) of the Hyde Act” and the ‘Nuclear Proliferation Assessment Statement’ (NPAS). The NPAS and Bush’s letter also introduce a dangerous new interpretation of the duration of reprocessing consent rights India has under the 123 Agreement, thereby reopening the possibility of spent fuel piling up again, as at Tarapur.

The NPAS and the Report are requirements of the Hyde Act. Taken together with Bush’s letter and the State Department’s answers to the House Foreign Relations Committee’s questions on the 123 Agreement, they offer a comprehensive picture of how the executive branch of the US Government intends to implement the agreement once it enters into force. Needless to say, the picture is not a pretty one. And though India is still officially committed to the 123’s passage, many in India now believe the Prime Minister should go to Washington to bury the 123 and not to praise it.

The U.S. argument that the fuel supply assurances are not legally binding since the 123 Agreement is a “framework agreement” is patently false. Though the agreement is a ‘framework’ whose implementation requires the drafting of commercial contracts with U.S. firms, this does not rob the commitments of their legal nature. Indeed, the provisions spring from the desire of the U.S. and India “to establish the necessary legal framework and basis for cooperation concerning peaceful uses of nuclear energy.” The use of the word ‘basis’ is important, which is why the U.S. resisted its inclusion during the negotiations with India last year.

This legal basis is required in order to provide sovereign legal protection in the event of such contracts being violated or abrogated for commercial or political reasons, and to balance the legal nature of India’s safeguards commitments. In any case, lifetime supply of fuel for Indian reactors is explicitly mentioned in Article 2(2)(e) on the “Scope of Cooperation,” and in Article 5(4) on “Transfer of Nuclear Material.” And Article 16(3) explicitly says Article 5(6)(c) where the fuel supply assurances are listed will continue to remain in force even after the Agreement is terminated, making it clear that these are legal and not political commitments. If doubts still persist about the legal basis of the fuel commitments, Article 14(8) is still more explicit: “It is not the purpose of the provisions of this Article regarding cessation of cooperation and right of return to derogate from the rights of the Parties under Article 5.6.”

Taking the US stand lightly, some political observers say, it was clear from the very beginning, from both the reading of the agreement and the requirements of America’s Atomic Energy Act (AEA) that the US fully retained the right to terminate US-India cooperation in civil nuclear commerce as required by Sec 123 a (4) of the AEA in the event of a nuclear explosion by India. For, the Hyde Act had exempted only one of the nine requirements for a 123 agreement — namely the requirement of full scope safeguards in respect of an agreement with a non-nuclear weapon state. Hence, the recent revelations on this account from both the answers given by the administration to the Senate and the letter transmitting the 123 Agreement to Congress are nothing new. In fact, in the coming week as the agreement goes through US Congress it is very likely that some more such ‘known’ revelations will come to light. However, the 123 Agreement within its limitations does not in any way affect India’s strategic programme and its positive impact on the Indian nuclear energy scenario will be strongly dependent on India’s negotiating skills rather than the 123 Agreement.

As for the NSG amendment, India got as “clean and unconditional waiver” as possible given the diversity of opinion amongst the 45 NSG members about giving an exemption to India. The final amendment while exempting India from the fullscope requirements applicable for non-nuclear weapon States does not mandate any automatic suspension of cooperation with India if India conducts a test. Nor does it ban any transfer of enrichment and reprocessing technologies to India. Rather, the amendment allows each NSG member to act according to its national laws, which is what India had been insisting all along. Therefore, with an acceptable NSG amendment, an agreed IAEA-India safeguards agreement and the approval of the US-India 123 Agreement, India is all set to begin negotiations with individual NSG members on nuclear transfers to India.

India requires two types of nuclear transfers: (i) natural uranium for its PHWR programme and (ii) import of light water reactor (LWR) reactors and fuel for these imported reactors. In negotiating for both of these items, India will have to make sure that the 123-like agreements for nuclear cooperation with these suppliers incorporate following features: (i) No requirement of any suspension of cooperation in the event of an Indian nuclear test using its own material; (ii) Fuel supply assurance for transferred reactors; (iii) No formal denial of any sensitive technology, i.e., enrichment or reprocessing technology, especially the latter; and (iv) the right of reprocessing of spent fuel derived from the use of transferred material or facilities.

Negotiation of cooperation agreements including all these four features will require skill and time. At the present time, it is most likely that Russia will be the first one to be off the block in negotiating an agreement acceptable to India. Furthermore, since Russian LWR have already been certified by the Atomic Energy Regulatory Board (AERB) of India for operations in India — in respect of the Koodankulum project, Moscow will have no difficulty in entering into a contract for additional reactors at Koodankulum and other sites. The second country most likely to conclude an agreement with India is France. While there is no French domestic law that requires or mandates any restriction on transfers of sensitive technologies or reprocessing rights, France has not so far transferred either of these to any country so far. It is likely, therefore, that some hard bargaining and negotiations will have to be conducted by India before a fully satisfactory nuclear cooperation agreement with France can be concluded. Only after the conclusion of such an agreement can India enter into any contract with a French entity for the transfer of reactors.

Although the agreement for civil nuclear cooperation — the 123 Agreement — has already been negotiated with the US, it is likely that the negotiations for transfer of nuclear facilities, i.e., reactors from the US will take the longest time to materialise because of the numerous restrictions imposed on US transfers of facilities, technologies and fuel supplies by various US laws. India will have to consider carefully the consequences of investing in nuclear facility transfers from the US and having supply disruptions or cessation of cooperation taking place later on as a consequence of any action by India in defence of its national security interests. The problems are not insurmountable but they will take time to be resolved.

As for supply of natural uranium for India’s PHWR reactors, there are a number of supplier nations — apart from Australia which has indicated so far that it would not be able to transfer natural uranium to India because of the latter’s non-membership of the NPT — who can satisfy India’s requirements of natural uranium including other major supplier countries such as Canada and Kazakhstan.

Finally, the entry of India into international civil nuclear commerce will offer Indian engineering industries — which have so far, in a very competitive manner, been supplying systems, components and materials to the Indian civil nuclear power programme, including reactor vessels, control systems, etc., — a chance to enter the international market as suppliers either in their own right or in collaboration with other foreign suppliers.

Hence all in all the future holds immense promise to both the Indian energy sector and the engineering industry from the point of enlarging the capacity of clean energy in India and becoming global suppliers of nuclear systems in the international arena.

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