Sep 6, 2008

Columnists - Siddharth Varadharajan

Whatever the American strategic objectives, the Indian origins of the Indo-U.S. nuclear agreement are in Tarapur. If that U.S.-supplied reactor marked the beginning of India’s quest for a commercially viable civilian nuclear programme, the subsequent denials of low-enriched uranium for TAPS and reprocessing consent for its accumulated spent fuel are equally a part of the programme’s foundational narrative. Following the Pokhran test of 1974, the U.S. unilaterally abrogated its nuclear agreement with India. Thanks to France and Russia, fuel for Tarapur was always found but it was out of a desire to end the supply uncertainty once and for all that Prime Minister Manmohan Singh began his nuclear engagement with Washington.
The text which emerged on July 18, 2005, went beyond merely envisaging LEU for Tarapur: the U.S. committed itself to ensuring full civil nuclear cooperation with India at the national and global level. As the deal moved through each subsequent stage, Indian negotiators were driven to find ways of insulating the country from a repeat of the Tarapur experience. If billions of dollars were to be invested in new reactors, India had to insulate itself from the possibility of fuel supply disruptions no matter what the cause. From the March 2, 2006 Bush-Manmohan joint statement (M2) onwards, therefore, fuel supply assurances have been a pivotal part of the deal. Regardless of what the American side believed or wished, neither M2 nor the 123 Agreement of July 2007 qualified the circumstances under which these multiple layers of fuel supply assurances would kick in.
These layers of protection consist, inter alia, of U.S. support for an Indian strategic reserve of nuclear fuel, and the pursuit, in tandem with Russia, France and Britain of “such measures as would restore fuel supply to India” in the event of disruption. The last layer of protection was India’s right to take “corrective measures” when all else fails. These U.S. commitments were an essential building block of the legal edifice which followed, including the IAEA safeguards agreement.
It is significant that paragraph 5.6 of the ‘123’– which repeats verbatim the M2 fuel supply assurances — provides no scope for derogation from these commitments by either party, even after termination of the agreement. Just as Washington expects India’s commitment to safeguard U.S.-origin or obligated equipment and fuel to outlive termination of the agreement, the U.S. commitment on fuel is linked to the life of the reactors and does not lapse upon termination for whatever reason.
If there is no derogation, there is no qualification either. Para 5.6 (b) begins with the sentence: “To further guard against any disruption of fuel supplies, the U.S. is prepared to take the following additional steps.” The meaning of ‘any’ is unambiguous. Thus, the agreement covers all disruptions regardless of cause. It certainly does not speak of different types of disruptions, let alone rule out disruptions caused by specific actions by India such as a nuclear detonation, a phrase which does not figure in the text of the 123.
The most shocking aspect of the Bush administration’s answers to the House Foreign Relations Committee (HFRC) is not its known stand on termination of cooperation in the event of a test but the repudiation of the U.S. commitment to these fuel supply assurances. The answers were provided to the HFRC in January and kept under wraps at the request of the State Department. The reason for this secrecy lies in the contents, which make it clear the U.S. has no intention of honouring the 123 agreement, is unilaterally pushing for changes in it and had actually negotiated the text in bad faith.Assurances abrogated
In its replies to the HFRC, the State Department undermines the sanctity of the fuel supply assurances in six ways. First, it refuses to consider the assurances in M2 to be of a binding legal character, calling them instead “important Presidential commitments” that the U.S. will uphold only to the extent they are “consistent with U.S. law.” This answer sets the stage for wriggling out of M2 once the 123 agreement — which gives legal expression to these — is terminated.
Secondly, it arbitrarily restricts the meaning of “disruption of supply” in Article 5.6 of the 123 Agreement by saying this “is meant to refer to disruptions in supply to India that may result through no fault of its own” such as a “trade war resulting in the cut-off of supply; market disruptions in the global supply of fuel,” etc.
Thirdly, it adds insult to injury by falsely asserting, in the same answer: “We believe the Indian government shares our understanding of this provision.” It is surprising that this assertion has gone unchallenged by the Indian government.
Fourthly, in answer to a question about the status of fuel supply assurances in the event of a Indian nuclear test, the letter unilaterally asserts that “the commitments in Article 5.6 would no longer apply” because a test would give the U.S. the right to terminate the agreement on a year’s notice.
Fifthly, the letter serves notice of the U.S. intention to implement the so-called ‘non-binding’ clause of the Hyde Act (Section 103(a)(6)), which says it shall be U.S. policy to seek to prevent the transfer of nuclear material to India from other sources should American nuclear transfers be suspended or terminated. By ignoring President Bush’s “signing statement” of December 2006 in which he had said he would treat this clause of Hyde as “advisory” and not binding, the State Department opens the possibility of the U.S. actively working to deny access to fuel from elsewhere in the event of a disruption following a nuclear detonation by India.
Sixthly and finally, although the State Department acknowledges the 123 agreement does not establish a minimum or maximum quantity of nuclear fuel to be placed in India’s strategic reserve, it warns that the parameters of the reserve “will be developed over time.” It also says it is “premature to conclude the strategic reserve will develop in a manner inconsistent with the Hyde Act,” which specifies a stockpile based only on the “reasonable operating requirements” of Indian reactors.
Taken together, it is clear that while India sees the 123 as establishing clear rights and legally binding obligations as far as future fuel supplies are concerned, the U.S. emphasises the political contingency of the arrangement. Indeed, in its answer to Question 17, it says the fuel commitments are not legally binding but based on the U.S.-India initiative’s “political underpinnings.”
Far from slaying the ghosts of Tarapur, the spectre of fuel denial and arbitrary abrogation of commitments has again raised its ugly head. This time around, the situation is potentially far worse because India is thinking of importing billions of dollars of equipment and the conditions under which the U.S. can terminate the agreement are open-ended. In one stroke, the U.S. has slashed away the layers of fuel protection India has built and reduced it to just one: strategic reserve. And even on that, the final word has yet to come.
As for that other ghost of Tarapur — denial of reprocessing — the State Department’s letter warns that the consent rights contained in the 123 will not be “permanent” and can also be terminated by the U.S. It asserts that a provision to this effect will be incorporated in the yet-to-be negotiated “arrangements and procedures.” Leaving aside the fact that Article 14(9) requires both parties to define the “exceptional circumstances” under which consent rights can be suspended, and this has not yet been done, the answer is another warning that India needs to take seriously.
Was the release of the letter on the eve of the NSG meeting an act of unilateral disclosure by the HFRC’s Howard Berman or a bilateral provocation by Berman and nonproliferationists in the State Department to ensure the NSG does not approve terms more favourable than what the U.S. has accorded India? Certainly, State had known for two weeks that its letter was to be made public on that day. But the sin lies not in the timing of the disclosure but the contents. The answers show there is such a huge gap between the Indian and American perception of the 123’s provisions that no rational decision maker in India can afford to buy any nuclear equipment from the U.S. without first resolving these differences.
The only insurance left in India’s hand if the Americans push their interpretation on fuel supply assurances is to build a strategic reserve (of non-American fuel) to guard against supply disruptions caused by U.S.-led sanctions. Even if the NSG were eventually to approve a waiver for India, the bilateral aspect of the U.S.-India nuclear agreement is more or less dead. Buying reactors whose fuel supply may be uncertain and whose spent fuel India may be eventually barred from reprocessing would be folly of the highest magnitude. India does not need to conduct a nuclear test and should not do so either. But these are sovereign decisions the country must take in an atmosphere free from pressure and the threat of sanctions.

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