Questions Linger about India's Safeguards

Proliferation Analysis
Summary
Uncertainty about what the IAEA-India safeguards agreement actually means and whether India and the United States have a common understanding reinforces the need for continued close scrutiny of all aspects of the U.S.-India nuclear deal as approvals are sought from the Nuclear Suppliers Group (NSG) and the U.S. Congress.
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The August 1 approval by the International Atomic Energy Agency (IAEA) Board of Governors of an India-specific safeguards agreement was an important step toward implementing the July 2005 nuclear deal between U.S. President Bush and Indian Prime Minister Singh. Under this deal, President Bush pledged to seek an exemption from U.S. nonproliferation standards that have barred civil nuclear cooperation with India for nearly three decades. The President also committed to seeking an exemption from similar international rules adopted by the Nuclear Suppliers Group (NSG) in 1992. The new safeguards agreement is important not only because it would be the mechanism to safeguard new nuclear supply to India, but it is necessary to fulfill India's commitment to place its indigenous civil nuclear program under IAEA safeguards. Negotiations on the various pieces of this deal were plagued from the start by a fundamental dispute: India has linked its safeguards undertaking to assurances of fuel supply over a reactor's lifetime, while U.S. law makes clear that safeguards must be maintained in perpetuity even if there is a fuel cutoff, for example, in response to an Indian nuclear test.

Upon release of the safeguards agreement in early July, many nonproliferation experts and critics questioned whether it was consistent with IAEA standards and would meet the tests of U.S. law and policy. Calls for clarification before IAEA Board approval were not heeded. At the August 1 meeting, IAEA Director-General Mohamed ElBaradei stated that the agreement meets IAEA standards and that it has indefinite duration (which suggests perpetuity of safeguards), but he also noted that India's demand for fuel assurances is an integral part of the safeguards agreement. He further mentioned an international legal principle that suggests India's safeguards obligation is valid only so long as India has uninterrupted access to fuel supply. Thus, we are stuck with the same uncertainty about what the agreement actually means and whether India and the United States have a common understanding. The outcome of the IAEA Board only reinforces the need for continued close scrutiny of all aspects of this deal as approvals are sought in the coming weeks from the NSG and the U.S. Congress.

Background

Parties to the 1970 Nuclear Non-Proliferation Treaty (NPT) pressed from the start for a policy that would grant them preference over non-NPT parties in eligibility for assistance to their civil nuclear programs. They viewed this policy as a well-deserved benefit for giving up the right to acquire nuclear weapons and as an incentive in some cases for non-parties to join the Treaty. In 1978, the United States passed a law that had the effect of granting favorable treatment in civil nuclear cooperation to NPT parties. (In 1992, the NSG adopted a similar policy at the strong urging of the United States.) Most U.S. nuclear trading partners already met the requirements of the new law, and several others did so in subsequent years by abandoning unsafeguarded nuclear programs and eventually joining the NPT. Over the years, the NPT became nearly universal. Meanwhile, India continued to operate an unsafeguarded nuclear program and to reject the NPT; U.S. nuclear supply to India ceased soon after the 1978 law. India acquired nuclear weapons in 1998 – becoming the first openly declared nuclear weapon state in over 30 years.

President Bush decided in 2005 to seek an exemption for India from this law as part of a broad effort to improve U.S.-India relations. India had long sought a change in these nuclear supply rules as a way to gain acceptance of its status as a non-NPT nuclear weapon state. No other non-NPT party had ever sought an exemption – neither Pakistan nor even the United States’ longstanding friend Israel. Nor had the United States considered such a step in the past, believing that "rewarding" a non-NPT state for acquiring nuclear weapons, regardless of its relationship to the United States, was a bad precedent and an affront to those countries that had joined the NPT in part to become eligible for civil nuclear cooperation. While observers applauded the goal of improving U.S-India relations, some questioned whether reversing three decades of U.S. nonproliferation policy was wise or even necessary to achieve this goal. There were many other ways to bolster U.S.-India relations.

While the Congress went along with the Bush administration, it enacted criteria the President must certify in order to exempt India and also declared a number of policy prerequisites. The President signed the so-called Hyde Act in December 2006. The U.S. and India subsequently negotiated a bilateral agreement (known as "123" after the relevant section of the Atomic Energy Act), which provides the legal basis for U.S.-India nuclear cooperation. This agreement, which requires Congressional approval, was released to the public in August 2007. It led to a new round of questioning as critics raised what appeared to be inconsistencies between the 123 agreement and the Hyde Act and other legal requirements. The Administration also came under fire for its willingness in the 123 agreement to grant more favorable terms to India in the area of fuel assurances and reprocessing of spent fuel than the United States has extended previously to any other nuclear trading partner (including long-time NPT parties and U.S. allies).[1]

Now that the IAEA has acted, attention turns to the NSG which will take up the matter later this month. The Administration is seeking NSG endorsement by early September, after which the 123 agreement would go to Congress for approval – the final hurdle.

With this as background, the following is a closer look at what approval of the safeguards agreement on August 1 by the IAEA Board of Governors could mean for India's commitment to accept IAEA safeguards in perpetuity on its civil nuclear program.

The Safeguards/Supply Dilemma

India sought an exemption under U.S. law that would allow it to obtain significant assistance for its civil nuclear program while keeping its nuclear weapons and continuing to operate major nuclear facilities outside of IAEA safeguards. The Bush Administration knew that it had little chance of gaining support for an exemption to a longstanding nonproliferation principle unless India was prepared to advance its own commitment to nonproliferation in some area other than the NPT.

The end result was Indian agreement to place some civilian nuclear activities under IAEA safeguards, including eight indigenous civil power reactors that have never been safeguarded. While the Administration sought a stronger substantive commitment, such as placing all electricity-producing reactors under safeguards or a halt in the production of fissile material for nuclear weapons, India would not accept any further constraints. However, even this limited safeguards commitment is very difficult for India to accept.

Recall that India, as a state outside the NPT, is under no obligation to place all of its civil nuclear facilities or material under IAEA safeguards. Thus, India wanted to make sure that its "voluntary" acceptance of IAEA safeguards on its civil nuclear program was linked to assurances of lifetime (30+ years) fuel supply for any new imported reactors and for its indigenous reactors if it chose to import fuel for that purpose. Language on fuel assurances was agreed upon between India and the United States and is found in the preamble to the safeguards agreement (as well as in the 123 agreement). It states that "uninterrupted and continuous access to fuel supplies from companies in several nations" is an "essential basis" for Indian acceptance of safeguards. It also notes that India "may take corrective measures ... in the event of disruption of foreign fuel supplies." In the absence of clarification, this has led to speculation that India's commitment to safeguards on its civil nuclear program is not ironclad and may not meet U.S. requirements.

U.S. requirements include that India's civil nuclear program come under safeguards and that such safeguards be applied in perpetuity. "Safeguards in perpetuity" means essentially that equipment or nuclear material must remain under safeguards as long as these items continue to be used for nuclear purposes relevant to IAEA safeguards.  In other words, even if the U.S. fuel supply is disrupted for any reason, India must continue to accept safeguards on its civil nuclear activities as long as the IAEA believes these activities are of continued significance for safeguards (e.g., reactor still being used and nuclear material that has not been consumed). The reasoning behind perpetuity of safeguards is to ensure continued verification of the recipient's commitment to peaceful uses, even if unforeseen circumstances cause a termination of the 123 bilateral supply agreement or of further fuel transfers under that agreement.

Given the tension between these Indian and U.S. positions, it is not surprising that the negotiations yielded ambiguous language. It also helps to explain why each government has been less than fully transparent on its respective interpretations of the safeguards and supply assurance language; they are fearful of giving ammunition to critics. The Administration even requested that its unclassified responses to more than 40 questions from Congress on the U.S.-India deal not be released. It’s past time to come clean. The safeguards agreement could be read as allowing India to demand the removal of IAEA safeguards from selective portions of its civil nuclear program if there is a disruption in fuel supply. Moreover, the safeguards agreement even allows India to defer placing its indigenous reactors under safeguards at the outset unless and until India is satisfied that it has received the necessary assurances of fuel supply. Informed commentators urged that these and other issues be clarified before the IAEA Board of Governors considered the agreement on August 1.[2] Unfortunately, based on published reports it appears that the IAEA Board meeting only reinforced these ambiguities.

According to IAEA documents and published reports, IAEA Director-General Mohammed ElBaradei asserted that the safeguards agreement meets all IAEA legal requirements, is of indefinite duration, and that the safeguards termination provisions in the operative sections of the agreement conform to longstanding IAEA principles. However, he also cited the preamble as an integral part of the agreement; the preamble contains India's position that fuel assurances are an "essential basis" for India's acceptance of safeguards under the agreement. ElBaradei also noted the international law principle of rebus sic stantibus, which suggests that the duration of a binding commitment is linked to a continuation of the circumstances extant at the time of the original binding commitment. This tends to support an interpretation that India would be able legally to insist on the removal of safeguards from its civil nuclear program if there is a disruption in fuel supply.[3]

The United States believes the safeguards agreement fulfills U.S. legal and policy requirements for this deal. But the language to which it agreed in order to satisfy India clouds the issue. And the continued silence of the U.S. and India with regard to clarifying these matters is only compounding the perception that they have conflicting interpretations of what has been agreed. ElBaradei's statements on August 1 reinforce this perception.

This question is also relevant to NSG consideration of granting India an exception. The NSG Guidelines are consistent with U.S. law in requiring perpetuity of IAEA safeguards on any supply of nuclear material or equipment. Moreover, the United States should not be satisfied with any NSG exception for India that would allow others to supply reactors or fuel to India under less strict conditions than apply to the U.S. – including bringing India's civil nuclear program under IAEA safeguards in perpetuity.

Conclusion

Clarification of this central question is urgently needed. The NSG and the U.S. Congress must not be asked to grant a major exemption to longstanding nonproliferation standards for civil nuclear cooperation unless India and the United States confirm that India’s adherence to safeguards on its civil nuclear program is real and enduring.


Dean Rust is former Acting Deputy Director of the State Department's office dealing with the NPT and IAEA. He retired in 2005 after serving 29 years in the Arms Control and Disarmament Agency (ACDA) and six years in State following ACDA's elimination.


Notes

1. Text of the 123 agreement released on August 3, 2007, is available on the State Department website (http://www.state.gov/r/pa/prs/ps/2007/aug/90050.htm). See commentary on the 123 agreement by Carnegie Senior Associate Sharon Squassoni on August 3, August 16, and November 7, 2007 (http://www.carnegieendowment.org/npp/experts/index.cfm?fa=expert_view&expert_id=347&more=1#articles); and by Arms Control Association Executive Director Daryl Kimball and former State Department official Fred McGoldrick on August 3, 2007 (http://www.armscontrol.org/pressroom/2007/20070803_IndiaUS). 

2. The Arms Control Association released an analysis of the safeguards agreement by Daryl Kimball, Fred McGoldrick, and Larry Scheinman (former official of the State Department and Arms Control and Disarmament Agency) on July 30, 2008 (http://www.armscontrol.org/node/3205). Also see the views of Sharon Squassoni and Robert Grey, who served as Ambassador to the Conference on Disarmament, as recorded in the transcript of an ACA press briefing of the same day. Former IAEA Deputy Director-General for Safeguards Pierre Goldschmidt, a nonresident Senior Associate at Carnegie, offered views on the safeguards agreement during Congressional testimony on July 24, 2008 (http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=20321).

3. The IAEA Director-General's introductory statement to the IAEA Board on August 1 and statement to the press are available on the IAEA website (http://www.iaea.org/About/DGC/).

End of document

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Source http://carnegieendowment.org/2008/08/14/questions-linger-about-india-s-safeguards/2to4

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