Time To Walk Away From The Nuclear Deal

THE two Houses of the US Congress have now passed the Hyde Act, which is going to be the basis for the final version of the Indo-US Nuclear Deal. We now need to specifically evaluate this Act against the benchmark that the prime minister set up on August 17, 2006 in the parliament of what would be acceptable to India. To quote his August speech in the parliament, “…if the final product is in its current form, India will have grave difficulties in accepting these Bills.” If we examine the Hyde Act with what the PM said was not acceptable to India, we would find that most of the objectionable clauses still remain either in their original or in cosmetically amended forms.
One of the major issues that the PM had highlighted in August in the parliament was that the July 2005 agreement was to cover the entire range of civilian nuclear energy technology including the nuclear fuel cycle. The PM had stated “We seek the removal of restrictions on all aspects of cooperation and technology transfers pertaining to civil nuclear energy –– ranging from nuclear fuel, nuclear reactors, to re-processing spent fuel, i.e. all aspects of a complete nuclear fuel cycle…. We will not agree to any dilution that would prevent us from securing the benefits of full civil nuclear cooperation as amplified above.”

OBJECTIONABLE PARTS REMAIN

The Hyde Act makes clear that India can receive nuclear fuel or nuclear reactors but cannot expect to import any technology that could be used for its nuclear fuel cycle. This includes fuel enrichment, fuel reprocessing and heavy water production. The only exception would be multi-national or bilateral facilities, in which India may be a participant. In other words, India will not have access to the fuel cycle technology and the current restrictions and trade regimes barring access to dual use technology will stay in place. It might be noted that dual use technology is not limited to technology for enriching and reprocessing of fuel, but covers a whole gamut of other applications including electronic chip making, advanced materials, precision machining, etc. Therefore the current technology sanctions regime in all these areas will remain except for nuclear fuel and reactors.

The second set of issues pertains to “annual good conduct certificate” that the president has to issue containing minute details of India’s activities in a range of areas. The PM had stated “The draft Senate Bill requires the US president to make an annual report to the Congress that includes certification that India is in full compliance of its non?proliferation and other commitments. We have made it clear to the United States our opposition to these provisions, even if they are projected as non?binding on India, as being contrary to the letter and spirit of the July Statement. We have told the US administration that the effect of such certification will be to diminish a permanent waiver authority into an annual one. We have also indicated that this would introduce an element of uncertainty regarding future cooperation and is not acceptable to us.”

The clause now uses the word “report” and not “certification” but the operative content – that the president is expected to furnish every year to the Congress – remains the same. For those who have argued that this is non-binding, forget that the US Congress can still act on the basis of these reports: therefore the difference between binding and non-binding is more semantic than substantive. It introduces, as the PM had stated in the parliament, uncertainty regarding any agreement. Instead of a one-time change in US laws as was agreed to originally, it keeps India under perpetual notice and cannot be acceptable.

The third objectionable part of the earlier Bills – as expressed by the PM – was linking India’s foreign policy to the continuation of the Deal. “We cannot accept introduction of extraneous issues on foreign policy. Any prescriptive suggestions in this regard are not acceptable to us.” One clause in the Hyde Act is “Secure India’s full and active participation in United States efforts to dissuade, isolate, and, if necessary, sanction and containing Iran for its efforts to acquire weapons of mass destruction, including a nuclear weapons capability (including the capability to enrich or process nuclear materials), and the means to deliver weapons of mass destruction.”

This explicit clause tying India’s foreign policy to the US for the civilian nuclear energy co-operation to continue still remains. The Hyde Act makes clear that India must be willing to commit itself to containing Iran and oppose even its right to the fuel cycle for nuclear energy. It might be noted that India has always upheld the right of any NPT signatory to enrich fuel for its civilian program, a right now it has to reject, starting with Iran. The US’s new interpretation of NPT to mean denial of the fuel cycle is also contained in other sections of the Hyde Act and this demands of India a participation in such “non-proliferation” efforts of the US.

NO INDIA-SPECIFIC IAEA SAFEGUARDS

The PM had also stated that the IAEA safeguards for India must be India specific and India would not accept the Modified Additional Protocols of IAEA with its highly intrusive regime without suitable modifications. The Hyde Act spells out clearly that India must adhere to the Modified Additional Protocol as defined by the IAEA for non-nuclear weapon countries for its civilian program and not an India specific one. It also lays down the condition that US Inspectors would check on India’s nuclear program if IAEA could not do so either due to shortage of resources or due to any other reason. The PM had explicitly rejected any other inspection regime apart from an IAEA one in his August statement to the parliament “We will not accept any verification measures regarding our safeguarded nuclear facilities beyond those contained in an India-Specific Safeguards Agreement with the IAEA. Therefore there is no question of allowing American inspectors to roam around our nuclear facilities.” The clause quoted above coupled with other clauses regarding the US’s need for end-use monitoring means that there would be US inspectors roaming around India’s nuclear facilities.

SHIFTING OF GOAL POSTS

In addition to the above, two more new clauses have been inserted, consistent with further shifting of the goal posts that has been familiar at every stage of the Indo-US nuclear deal. Both pertain to the protection that India’s civilian energy program was supposed to have under the July 2005 agreement if the Deal is terminated unilaterally by the US – either because of nuclear tests or due to other clauses in the Bill. In the July 2005 Agreement and the subsequent Separation Plan, it was agreed that in the event of the US cancelling its obligations to supply fuel, it would help in convening a meeting of friendly countries to take over its fuel supply obligations. It was also agreed that the US would help in building a strategic reserve to run our reactors with imported fuel in the event of such a cancellation. (PM’s statement in parliament in August “An important assurance is the commitment of support for India’s right to build up strategic reserves of nuclear fuel over the lifetime of India’s reactors”). Both these have been severely curtailed in the Hyde Act. It now states that convening of friends to take over US’s fuel supply obligations will only cover market failures and not if US decides to terminate the agreement. In such a case, not only will the US not help in convening such a friendly group within the NSG, but also it will actively work with other NSG countries to prevent any further supply to India. Further, the reserve that India had proposed to build up for such an eventuality is also now denied: the Hyde Act explicitly bars any reserve other than normal operating reserves required to run its reactors.

For those unfamiliar with the above issue, we must go back to Tarapur. Here, the US, after Pokhran, withdrew from its commercial obligations to supply fuel for the two Light Water Reactors that it had supplied. India had great difficulty in securing fuel for these reactors, finally getting France to supply the required enriched uranium. Even though the US reneged in its commitments to supply fuel to Tarapur, India was forced by its agreement not to reprocess the spent fuel there and hold it in perpetuity in costly cooling ponds and other facilities.

These were in the days that the NSG did not exist and things were a little easier. If the same scenario repeats itself now, India would have to shut off all the imported reactors, as it would have neither fuel nor the right to reprocess the used fuel. It was to prevent a replay of Tarapur that India had introduced the two provisions in the Indo-US Nuclear Deal. Both have now been effectively subverted. Once India is locked into these provisions, it will be next to impossible for India to continue running its civilian nuclear energy program if the US terminates the agreement. More we invest in the nuclear energy program, more will India be held hostage on extraneous issues such as foreign policy. Already, the mere promise of a Deal has made India bend to the US in IAEA on Iran. This is only the tip of the iceberg. Once the US can achieve a lock-in on India’s nuclear energy program, India will find itself compromised on energy security and therefore far more vulnerable to the US pressure.

While the above are the major problems with the Hyde Act, there are many more issues pertaining to reciprocity, sequencing of India and the US actions, linking the Deal with the controversial Proliferation Strategic Initiative, the attempt to get inside DAE in the guise of a non-proliferation scientific initiative, etc. Particularly troubling is the US attempts to impose through a bilateral agreement binding obligations on India regarding future tests including what constitutes a nuclear test and fissile material cut-off, while the US is not willing to take on any binding obligations on itself. We have always held that India should not conduct any further tests and should show the way by de-weaponising. It should also take the initiative in going back to the global nuclear disarmament agenda. In the absence of any time frame for nuclear disarmament however, any assurance that India gives on tests, fissile material, etc., must be voluntary and not imposed through unequal treaties and agreements.

It is clear from the provisions identified above that the Hyde Act does not conform to what the PM on the floor of the House has identified as acceptable to India. India should now discontinue any further negotiations on the Indo-US Nuclear Deal and work out its other options.

123 AGREEMENT WILL BE NO DIFFERENT

Some of the supporters of the Deal have started arguing that as this is a domestic US Law, India need not be too concerned about it. They argue that it should instead look at the 123 Agreement that has now to be signed with the US for any effective collaboration on civilian nuclear energy program. There are three major flaws in this argument. The first is that any 123 Agreement will not and cannot be outside what the two Houses of the US Congress have passed as the US Law. The 123 Agreement, which has also to go to the two Houses can add more restrictive clauses, but cannot dilute any provision that has already been passed by the Houses. The second is that the Hyde Act also contains provisions that India must sign up with IAEA for safeguards in perpetuity for its civilian nuclear program. Once it does that, the relevant binding provisions would be that of the IAEA. The third is that the Hyde Act also makes clear that the NSG should conform to the provisions of the US Bill. As NSG acts by consensus, the US Act will be the template for the NSG as well. Therefore the argument that India can proceed with 123 Agreement and IAEA safeguards without much regard to the domestic legislation of the US holds little water.

The time has come for India assesses critically what the Indo-US Nuclear Deal delivers to India and its costs. It is welcome that NSG countries, such as the US, Russia, France and China, have started to examine how to build nuclear co-operation with India. However, such co-operation cannot be at the expense of India’s long-term energy security and its independent foreign policy. If India wants to break the current nuclear sanctions regime, it needs to engage with the other countries that are also members of the NSG and not just restrict this engagement to the US. Only once a larger constituency has been built within the international community, can India hope to find a nuclear agreement more in consonance with its requirements. Any unilateral deal with US will always lead to India being asked to fall in line with the US policies. This is the lock-in that the US administration and the Congress want. It is time to that the PM accepts that the Deal on offer does not conform to what is acceptable as defined by him in the parliament and charts out an alternate course. The time has come for Manmohan Singh to fulfil his promise to the country and walk away from the Deal.