A Brief Note on a Few Concerns With the 123 Agreement

The Indo-US nuclear agreement announced on July 18, 2005 by President George Bush and Prime Minister Manmohan Singh regarding the establishment of a U.S.-India global partnership could dramatically increase nuclear and nuclear-related commerce with India. In Indias interpretation of the text of the agreement. it expects to be treated like a Nuclear Weapons State (NWS) with regard to assuming responsibilities and obligations under international non-proliferation regimes, namely, International Atomic Energy Agency (IAEA) nuclear full-scope safeguards (FSS), and the Guidelines of the 45-member Nuclear Suppliers Group (NSG) for nuclear trade. Thus India will come to enjoy a unique status, shared only by Israel and Pakistan: a nuclear weapons state that is a non-NNPT signatory. Every other non-nuclear weapons state that is a signatory to the Nuclear Non Proliferation Treaty (NNPT), including Iran, must abide strictly by the terms of the document of structure and content of agreements between the agency and states required in connection with the treaty on the non-proliferation of nuclear weapons. The deal treats India for what it is, i.e. a de facto NWS.

But for the agreement to materialize, what is required to be bartered is, an Indian commitment to

1.  Separate its civil and military nuclear programs and put declared civil facilities under  international safeguards.

2.  Enter into an IAEA safeguards agreement in perpetuity and an IAEA Additional Protocol.

3.  Never test nuclear weapons again.

The Safeguards System

IAEA board of Governors has proposed to India, a safeguards agreement based on The Agencys Safeguards System (1965, as Provisionally Extended in 1966 and 1968), which is a revised system with further additional provisions for safeguarded nuclear material in conversion plants and fabrication plants.

The principal purpose of this system of controls is to enable the Agency to comply with the statutory obligations under Article 2 of the IAEA statute with respect to the activities of Member States in the field of the peaceful uses of nuclear energy, as provided in the Statute. The said statutory obligation refers to the task of the Agency of seeking to accelerate and enlarge the contribution of atomic energy to peace, health and prosperity throughout the world. Since the technology of nuclear energy for peaceful purposes is closely linked with that for the production of materials for nuclear weapons, the same article of the Statute provides that the Agency shall ensure, as far as it can, that assistance provided by it or at its request or under its supervision or control is not used in such a way as to further any military purpose. Safeguarded nuclear material should not co-mingle with unsafeguarded nuclear material in any facility, unless this unsafeguarded nuclear material also comes under safeguards. This latter condition is an example of contamination, a key principle of safeguards. Although these conditions do not appear to have been accepted by India, they are necessary to prevent civil nuclear cooperation from benefiting Indias nuclear weapons program.

Article 5 of the Statute authorizes the Agency to apply safeguards, at the request of the parties, to any bilateral or multilateral arrangement in the field of atomic energy. Provisions of the statute that are relevant to a particular project, arrangement or activity in the field of nuclear energy will only become legally binding upon the entry into force of a safeguards agreement and to the extent that they are incorporated therein.

While the IAEA applies safeguards to select facilities in the USA, Russia and China, France and the United Kingdom have separated their civilian and military programs, applying Euratom/IAEA safeguards to all civilian programs. This is the precedent that comes closest to the deal with India. Safeguards on all civilian facilities have the additional advantage of facilitating Indian participation in an international cut-off agreement.

In the Indian debate, some participants criticize the deal on national security grounds, arguing that it will constrain the weapons programme and, specifically, that the fast breeder reactor at Kalpakkam must be placed on the military side of the separation line. It is unsafeguarded and lends itself to production of fissile materials, but has hardly been used for weapons purposes so far. Several former heads of Indias nuclear industry have suggested that IAEA safeguards should only be applied to facilities that receive nuclear assistance from abroad. However, India's nuclear record is far from perfect. Indias history of using a civilian nuclear facility for the 1974 Pokharan test places a question mark over whether India can be trusted with such assistance. The only way this trust can be guaranteed is for the US and the international community to insist on broad and robust IAEA safeguards.

Agreement in-perpetuity

The IAEA policy with regard to perpetuity is that the primary effect of termination of the agreement, either by act of the parties or affluxion of time, would be that no further supplied nuclear material, equipment, facilities or non-nuclear material could be added to the inventory. On the other hand, the rights and obligations of the parties, as provided for in the agreement, would continue to apply in connection with any supplied material or items and with any special fissionable material produced, processed or used in or in connection with any supplied material or items which had been included in the inventory, until such material or items had been removed from the inventory.Safeguards should apply in perpetuity, with minor, standard exceptions that do not include use in nuclear explosives or weapons. India cannot negotiate a provision for removing a facility from safeguards that is, moving from civilian to military category under a national security clause. Under the Regime, withdrawal of safeguarded material to an unsafeguarded or military facility will not be permitted even after a notice period for national security reasons.

However, India has bargained for the freedom of designation of its own nuclear facilities as civilian or military, including the freedom to shift these facilities from one category to another, in line with National security considerations. It will hear of no discrimination between India and other NWSs. 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.

IAEA Additional Protocol

An analysis of Baghdads success in circumventing IAEA safeguards showed that Iraq had exploited the agency's system of confining its inspection and accounting activities to facilities or materials explicitly declared in a countrys safeguards agreement with the agency. To close the undeclared facilities loophole, the IAEA drafted a safeguards improvement program known as Program 93+2. The program has subsequently been implemented in two parts.

The second part of Program 93+2, which substantially expands the scope of the IAEAs safeguards regime, required a formal expansion of the agencys legal mandate in the form of an additional protocol to be adopted by member states to supplement their existing safeguards agreement with the IAEA.

The essence of the additional protocol is to reshape the IAEAs safeguards regime from a quantitative system focused on accounting for known quantities of materials and monitoring declared activities to a qualitative system gathering a comprehensive picture of a states nuclear and nuclear-related activities, including nuclear-related imports and exports. The additional protocol also substantially expands IAEA's ability to check for clandestine nuclear facilities by providing the agency with authority to visit any facility -declared or not - to investigate questions or inconsistencies in a states nuclear declarations.

India agreed to apply an additional safeguards protocol (AP) to its civilian facilities. This is welcome from the point of view of making such protocols an integral part of new, enhanced international safeguards standard. However, the Model AP was adopted in order to better detect undeclared activities in NPT member states, so the value of this undertaking is limited. Since India would have undeclared nuclear weapons programmes, and since the AP is meant to uncover undeclared programmes, it would have limited utility in the Indian context, just as it is in the NWSs. So India should, one would imagine, be able to negotiate a reasonably acceptable AP.

Never Testing Nuclear-Weapons Again

It is clear from the sequence of events that the Nuclear Suppliers Group wishes to see India firmly fixed in a system of commitment in perpetuity with IAEA by initialing and then unleash their own conditions for making changes in their guidelines. In all probability, the NSG will prominently demand no testing by India in future as a precondition. There could be other conditions as well. To forestall these dangers, India while finalizing the safeguards agreement with IAEA should proactively avoid getting into a trap by insisting on clear unambiguous language.

Some Indian concerns

Separation seems to be a feasible proposition but Indias strategic needs have to be clear in quantitative terms.

We are looking at a scenario where even those facilities wholly designed and built by India and the R&D institutions as listed in the separation plan which were hitherto outside the scope of safeguards, as well as all the future civil facilities which will grow substantially in numbers, will be included in the safeguards agreement compulsorily with all the implications. The separation plan document, which states that the facilities which are to come under civil list will be decided solely by India, is a paper tiger.

Properly negotiated INFCIRC/66-type safeguards agreements and the AP can be arrived at without compromising on strategic programmes and national security.

The AP is a document, which cannot be taken lightly as it will include all the intrusive provisions of safeguards inspections. There is a possibility this could be under wraps or deferred to avoid immediate stalemate. This needs to be gone into in detail before taking any decision to go forward.

Though technically not an NWS, and a Voluntary Offer Agreement may not be acceptable, but it is likely to be treated so because of the accepted fact of Indias weapons programme and undeclared military facilities. So, the IAEA is likely to apply safeguards selectively so as not to unduly burden its scarce funds and skilled human resource. Even though there is a small budgetary increase, the IAEA expects that individual states would contribute to meeting the expenses towards implementing the respective APs. In Indias case, it would be a major jump the standard safeguards plus the AP on Indias declared civilian facilities. If India has to meet part of this expenditure at least by increasing its contribution to the IAEA, this is also a factor that needs to be taken into account.

Wary of the Hyde Act

The 123 Agreement is bereft of an arbitration clause. This concern is relevant because in the 123 Agreement, India has initialed a blank cheque by agreeing to abide by the US national laws without any qualification by which it gets exposed to any future damaging changes in law. What will hang in air is the fate of safeguards agreement when the cooperation agreement gets abrogated or terminated for any reason enumerated in the Hyde Act or any changes, revisions or new Acts passed by the US in future as it happened in the case of the Tarapur agreement when the 1963 Indo-US bilateral agreement was unilaterally dumped by the US when a new nuclear non-proliferation system (NNPA) was promulgated in 1978 in the aftermath of the 1974 nuclear test by India.

The 123 Agreement provides India with generous opportunities to hold bilateral consultations to resolve disputes with no leverage, leaving the ultimate decision to US to be taken as per their national laws. Unfortunately, India does not have laws to match the one like the Hyde Act, which surely will dominate the operation of the agreement from behind with 123 staying in front.