Why Iran matters to U.S.

Two new books chronicle the ‘crude’ reality of U.S. policies towards oil-rich regions in the world







31 July 2007
The Hindu

Why Iran matters to U.S.

Siddharth Varadarajan

IRAN OIL: The New Middle East Challenge to America
By Roger Howard
2007. I.B. Tauris, 6, Salem Road, W2 4BU, London.

CRUDE INTERVENTIONS: The United States,
Oil and the New World (Dis)order
By Garry Leech
2006. Zed Books,
London, Books for Change, 139, Richmond Road, Bangalore-560025. Rs. 475.

The nuclear issue has so come to dominate contemporary analysis about the hostile relationship between the United States and Iran that one tends to forget the role that oil is also playing in the slow but seemingly inevitable slide towards confrontation and conflict between the two countries.

To a certain extent, the absence of oil from the equation is understandable. The United States has not had direct access to Iranian crude for nearly two decades now, though American subsidiaries were free to buy and even import oil from Iran until the Clinton administration imposed a blanket ban on trade with Iran in 1995 as well as any oil development deals of the kind the erstwhile government of Hashemi Rafsanjani had offered the Dutch subsidiary of Conoco earlier that year. In response to complaints from American companies that international rivals would step in to fill the void, the U.S. Congress passed the Iran-Libya Sanctions Act (ILSA) of 1996 threatening sanctions on foreign companies that crossed the $40 million trigger for investment in Iran’s hydrocarbon sector. To date, however, the ILSA penalties have not been invoked against foreign investor.

Contradictions

But if the U.S. has been able to live with this self-imposed boycott of Iranian oil all these years and not bothered to use the financial tools it has at its disposal, what explains the sudden sharpening of contradictions? Perhaps concerns about terrorism or nuclear weapons are really what is driving the Bush administration’s current policy towards Iran after all. Not so, argues Roger Howard, in this timely and well-argued book on the challenge posed by Iranian oil to the hegemonic interests of the U.S.

The starting point of Howard’s analysis is precisely the unintended dialectic that ILSA produced. When the U.S. sought to impose extra-territorial sanctions on third country (non-U.S.) companies investing in the Iranian energy industry, it had assumed its threat would have a deterrent effect. While smaller players were indeed deterred, ILSA also created opportunities for companies from France, Russia, Japan, India, Malaysia, China and elsewhere. By playing the interests of these countries against the U.S., Iran has been able to undermine American power.

Challenges

Howard argues that the convergence between Iran’s oil resources and the political conditions created by the U.S. boycott of Iran are undermining American power in three distinct ways. First, it is putting increasing strain on Washington’s relations with its allies like the European Union, Japan and even Pakistan, all of whom would like to pursue a closer energy relationship with Tehran. Second, Iran is building stronger political and economic links with Russia and China and even India, which further reduces America’s room for manoeuvre. Third, Iranian oil undermines U.S. power directly by serving as a source of revenue for the Islamic regime in Tehran.

The book’s core chapters take the reader through each of these three ways in which Iranian oil challenges U.S. interests. Howard has assembled considerable information on the manner in which the need for energy and the shortsightedness of American policy have helped fracture alliances built by the U.S over half a century. Though the author has underestimated somewhat the American capacity to browbeat its allies — the Japanese company, INPEX, did finally abandon its plans to invest $2 billion in the lucrative Azadegan oil field — his general point about the Iranian ability to use their energy resources to create political space for themselves is well taken. It is precisely for this reason that the Bush administration is finding it difficult to get the U.N. Security Council to impose truly crippling sanctions on Iran despite the hysteria it has managed to generate over Tehran’s civil nuclear programme.

In policy terms, Howard argues that Washington’s long-term goal of bringing about a change in official Iranian attitudes towards America would perhaps be better served by ending the energy embargo. If the U.S. were to drop its hostility towards the Iran-Pakistan-India pipeline project, for example, and the pipeline were to be built, Iran would acquire a stake in regional stability. Howard says that this, in turn, “could arguably help to moderate the ‘aggressive’ and ’reckless’ foreign policy that its enemies in Washington say it has…” An end to the U.S. embargo would also, by creating more economic opportunities with Iran, increase the standard of living there and perhaps moderate the country’s politics. The problem, however, is the extent to which Iran has been demonised in the U.S.

Oil interests

If Howard’s book deals exclusively with Iran, Garry Leech provides a very lucid overview of American oil interests in regions as diverse as Iraq, Central Asia and West Africa.

In all oil-rich regions of the world, the thrust of Washington’s policies has been the desire to impose neo-liberal reforms in order to open up the energy sector to foreign investment and reverse the effect of the oil nationalisation wave of the 1970s when multinational oil majors were squeezed out of upstream activities. Where this has not been possible through political diktat, Leech argues that the U.S. has not hesitated to use military force (as in the case of Iraq), or corruption (as in the case of Africa). Venezuela under Hugo Chavez is one of the few major oil producers that has not only refused to succumb to this pressure but has actually taken measures to further limit the role of foreign oil companies. The author predicts that other energy-rich countries and regions will eventually be forced to confront the erosion of sovereignty that Washington is seeking.

NSA: “I don’t think the country is yet willing to recognise the U.S. is a benign power”

In the second part of his exclusive interview to The Hindu, National Security Adviser M.K. Narayanan discusses the link between the Indo-U.S. nuclear deal and the wider strategic relationship between the two countries. Excerpts:

30 July 2007
The Hindu

“I don’t think the country is yet willing to recognise the U.S. is a benign power”

Harish Khare and Siddharth Varadarajan


If you step back and take a big picture view, why in your assessment is this nuclear deal so important for the United States? What is the larger strategic purpose behind it?

I don’t know, you’ll have to ask them. OK, there is always the question that everybody knows the answer to, that the U.S. wants India on its side. You know, all kinds of things. It’s a possibility. I am not denying it. But during the negotiations, in the ones I have been involved in, never was there any suggestion that we would like you to be in a strategic partnership with us to a degree higher than what we have at the moment. So the presumption would be, and perhaps there is some weight to it, that the U.S. would like a country like India, a fellow democracy and so on, to be in step with what they are up to and all that. [Pauses] I think this was primarily driven by President Bush’s regard for Dr. Manmohan Singh and his point that we need energy; that the energy deficit is our biggest problem. For whatever reason — I know President Bush is not the most popular man in the world — but in every discussion I have been privy to, he has always shown a great deal of regard for what India has achieved, a billion people, a million problems, and a democracy. He repeats this all that time. So a lot of it has been achieved by him…

Clearly we have not conceded anything up front other than what we have always stood by. Now, whether they expect us to be grateful to them, I suppose they’ll have to wait and see, but then it’s a post-dated cheque as far as they are concerned.

I find, certainly this administration — at least the three or four people I am privy to — is looking forward to the possibility of India emerging. I know that Dick Cheney is painted in the darkest of dark colours, but my impression is that they’ll be happy if India made the kind of progress that, so I look upon it in a benign way, not overlooking the fact that there may be another strategic purpose. But right through the discussions, no one has tried to say India and the U.S. should be partners vis-À-vis country A or B or China.

Speaking of Cheney, what did you discuss with him?

I found him very positive as far as India is concerned. For us, that is the most important thing. But he didn’t bring up any issues of contention, he didn’t raise things like Iraq or Iran. It was a broadbrush. But he was positive on the Indo-U.S. nuclear deal.

How much of the 123 logjam did he clear up?

There had been a lot of prior consultation. Each one knew what the other was up to. And I think they have a far better seamless [system of] information moving up and down. So by the time we met Cheney, we had cleared most of the … But there is nothing like clearing until the text is frozen, and that happened after that meeting. You can’t really say everything was done because of him, or that it had all been done before him. Some of the reports have been a bit too much. Of course, each one played their role.

Is there a possibility that the deal may give rise to unreasonable expectations on Washington’s part, expectations India may be unable or unwilling to fulfil? That we should be willing in the future to play in Asia the role of a Britain? Have we ever given them cause to have such expectations?

We have certainly never given them that … Thanks to our many friends within the government and outside, even if you wanted to say a half-truth on this, we are afraid lest it travels back! There are several issues on which all of us have strong views but we are afraid to express that lest someone on the U.S. side uses that as an index or indication that we want to do much, much more. We are conscious that if the USS Nimitz can’t come to Indian waters without us having to write letters, speak, what not; so to go beyond that is, we have never said anything.

But unrealistic expectations? I don’t know. The American administration is sophisticated enough to realise that it is one thing to have realistic expectations, but unrealistic ones, I am not sure. I would presume that there is comfort with India. I find that across the board. It’s possible, though I have not looked at the issue closely, that with China, in many other parts of the world, everyone is full of admiration for the juggernaut that China is, but there is a certain amount of concern and discomfort as to how it is going. In that sense, even if we are not a very efficient democracy, there is a great deal of comfort. People are comfortable.

One of the next steps on which the Americans are very keen is for India to sign the Access and Cross-Servicing Agreement to allow the U.S. military easier access to Indian facilities. Where do things stand? Is it true that the Government has reservations about signing the ACSA?

Reservations in this sense, because we are unsure how far we can go and how far will we be compromised. We have not been able to reconcile in our minds on the question. It’s really a question of overcoming certain concerns, basically. So I think we are looking at it with a fine toothcomb over and over and over again to see that, is it beneficial, or are there some hidden disadvantages. So we will work on that.

Is one of our concerns the fact that we don’t want Indian facilities to be used in the event of military action by the U.S. somewhere in the region?

I think there are three or four issues there though I don’t want to explain all of that just now. See, finally the point is, we are extremely conscious of our sovereignty issue. Are we giving up our sovereign rights in this matter if we enter into an agreement of this kind, would we have the opportunity to sort of step back if and when a situation arises? We need to, we haven’t focussed as much on this as we have focussed for instance on the 123 agreement … Also, the issue is one of timing. If you do that and then this, we don’t want to be seen as having sort of provided an opportunity for the critics to say ‘Oh, you have already conceded this much and therefore you are now doing this.’ We want to look at the civil nuclear cooperation agreement as a standalone. It has nothing to do with anything else… Now that this is out of the way, perhaps we might have a little more freedom to look at some of these issues. There is the Container Security Initiative pending, more for legal issues. That will also probably get done. But we also have to keep in mind that people should not see each of these as further slippage… We have, first and foremost, a coalition government, and second, I don’t think the country is yet willing to recognise that the U.S. is a benign power, which it certainly is not, and I think we have to be careful. I mean we have the whole G-77 and Nonaligned Movement. We can’t ignore this.

In spite of Condoleeza Rice’s advice to us…

Well, we were a little surprised that somebody like her should have made it in such a blunt way. This is the whole problem with the whole U.S. side. The same thing could have been said, ‘Now there are no two blocs, I suppose there are opportunities to look at things differently’… You don’t have to say, ‘Forget NAM, forget your friends.’

(Concluded)

Same facts, two fact-sheets

In choosing what to highlight in the nuclear deal and what to ignore, India and the United States underline their different anxieties, expectations






29 July 2007
The Hindu

NEWS ANALYSIS
Same facts, two fact-sheets

Siddharth Varadarajan

New Delhi: On the surface, India and the United States choreographed the “outing” of their nuclear agreement perfectly.

The text was withheld and the contents of the deal were painted in the broadest of broad brushes at virtually simultaneous press conferences held in New Delhi and Washington D.C. on Friday. In both tone and spin, National Security Adviser M.K. Narayanan and U.S. Under Secretary for Political Affairs Nicholas Burns were remarkably consistent. Even if each was conscious of the nature of his domestic audience, neither gave answers to contentious issues like nuclear testing or fuel supply assurances that would discomfit the other.

And yet, the two press conferences — and separate ‘fact-sheets’ on the deal put out by the Foreign Ministries — also provided an early indication of the different concerns and expectations that still animate both sides as they move towards the next steps in implementing the July 2005 nuclear deal. For, in choosing what “achievements” to highlight and which obligations to downplay, India and the United States are not just employing a different marketing strategy based on what their publics might want to hear; they are underlining official anxieties that the textual compromise of last week has not fully succeeded in dispelling.

Expectations on military front

In terms of upfront expectations, while the Indian side was coy about the wider ramifications of the deal, Mr. Burns was emphatic about the U.S. belief that wider defence cooperation would be a major spin-off.

Asked what the Americans are getting out of the deal in terms of arms sales, Mr. Narayanan said on Friday that there had been no reference to arms deals in any of his negotiations. “I presume the outcome [of the nuclear deal] would be a transformed relationship, and this would lead to other things,” he added. Foreign Secretary Shivshankar Menon was equally categorical: “There are no conditions. This is an agreement in energy. We didn’t negotiate anything else.”

However, Mr. Burns was less coy at his press conference. “Now, I would anticipate a series of high-level meetings between the Indian and American leaderships over the next several months,” he confidently said in his prepared statement. “And I think now that we’ve consummated the civil nuclear trade between us, if we look down the road in the future, we’re going to see far greater defence cooperation between the United States and India: training; exercises; we hope, defence sales of American military technology to the Indian armed forces.”

Later, in reply to a suggestion that India had a “burgeoning military relationship” with Iran, Mr. Burns said cuttingly, “Actually, the direction that India is turning into is to closer military cooperation with the United States. And as I said in my prepared statement, I think that is going to be one of the very significant horizons of this relationship.”

Textual nuances

As for the contents of the 123 agreement, until the actual text is made public, the only written documents that are available to parse are the two separate fact-sheets issued on Friday by the Ministry of External Affairs and the U.S. State Department. While the fact-sheets are not contradictory, they do differ in small but important ways.

The Indian document highlights first of all the ‘status’ issue that the United Progressive Alliance Government used to sell the deal in July 2005 — that India is being treated as a quasi-nuclear weapons state. The agreement, it notes, is “between two States possessing advanced nuclear technology, both parties having the same benefits and advantages.” This is a phrase the U.S. side chose not to highlight in its fact-sheet.

On fuel supply assurances, the two fact-sheets acknowledge the incorporation of the March 2, 2006 supply assurances, including a strategic fuel reserve for India. However, only the Indian document mentions “the provision for corrective measures.” For the Indian side, this underscores the binding linkage between fuel supplies and permanent safeguards; in the context, “corrective measures” clearly include the termination of safeguards applicable on the Indian-built reactors that have been put in the civilian, safeguarded list.

In line with this, the Indian fact-sheet only notes that the 123 agreement “provides for the application of IAEA safeguards to transferred material and equipment.” The U.S. fact-sheet, on the other hand, emphasises that the 123 commits India to “safeguards in perpetuity.”

The fuel supply issue is most likely to arise in the event of an Indian nuclear test. Here, only the U.S. document notes that the 123 agreement “preserves the rights” of the U.S. to “terminate cooperation and request the return of transferred items under appropriate circumstances,” a provision the Indian side chose not to highlight in its handout.

On the scope of cooperation, India highlighted the inclusion of “cooperation in fuel cycle activities,” a reference the U.S. avoided. But it is in the U.S. and Indian descriptions of what the 123 agreement says about India’s right to reprocess U.S.-origin spent fuel that the differences are perhaps most consequential. India has highlighted the granting of “prior consent to reprocess nuclear material” and noted that to “bring this into effect” a national safeguarded reprocessing facility will be established and “the parties will agree on arrangements and procedures within one year.” The U.S. fact-sheet repeats this formulation without using the word “prior,” and also chooses not to highlight the fact that the 123 stipulates a concrete time frame for these arrangements to be worked out.

Next steps

The same subtle differences persist when it comes to describing the next steps. Both agree India has to go to the IAEA to negotiate a safeguards agreement but only the Indian fact-sheet uses the phrase “India-specific safeguards agreement.” The U.S. note adds “progress toward an Additional Protocol,” something Atomic Energy Chairman Anil Kakodkar said on Friday would only be taken up “later.”

As for the Nuclear Suppliers Group, the Indian fact-sheet says the cartel’s guidelines must be changed to enable the NSG to trade with India “as an equal partner.” This phrase mirrors the Indian hope that the NSG exception will be “clean” and “unconditional” — a point reiterated by Mr. Menon on Friday — so that India would not be bound by obligations that do not apply to other countries. The U.S. fact-sheet, on the other hand, only says the NSG should “make an India-specific exception to the full-scope safeguards requirement” but does not speak of India being treated as an equal partner.

Finally, there is the diplomatic equivalent of a Freudian slip in the Indian fact-sheet. Neither in the enumeration of “next steps” or anywhere else is there a reference to the need for U.S. Congress to actually approve the 123 agreement. The American fact-sheet does not miss this detail.

The omission may be harmless but it underlines a simple fact that is surely not lost on the Indian side. The day the NSG amends its guidelines, India becomes open for nuclear commerce with the rest of the world, provided, of course the rule change is unconditional. At that point, what happens in Washington should not really matter. If Congress shoots down the 123 agreement, the biggest losers would be American companies.

NSA interview: 'This is as good a text as one can possibly get'

In his first on-the-record comments about the last week's nuclear negotiations with the United States, National Security Adviser M.K. Narayanan told The Hindu how some very difficult circles were squared to produce the final text of the 123 agreement. In this, the first part of an exclusive interview, he discusses the technical aspects of the deal. The second part -- on the broader strategic issues -- will be published on Monday.

28 July 2007
The Hindu

“This is as good a text as one can possibly get”

Harish Khare and Siddharth Varadarajan

Would it be fair to say that you are 100 per cent satisfied with the text of the 123 agreement?

I am one of those who believes that if you are negotiating and you get everything you want, then obviously there is something wrong! But I think this is as good a text as one can possibly get. If this text gets implemented, I don’t think there’s anything for us to be worried about. You can always say you can get more, but you want both sides — after all they have to go back to Congress and get it passed in their up-down vote.

As you went into the talks, what was the basic Indian approach?

The PM had always taken the view that if you have a legal problem, we will not try to ask you to break the law but we should find the language that would meet the obligations of both sides. But as far as policy is concerned, we will push. This was roughly the strategy we followed, knowing full well that if we try to break the law, this would raise questions in Congress. Also, following [the G8 summit at] Heilingendamm, quite clearly the message had gone down that if the Indians are being reasonable, then we should also be reasonable.

Of course it helped that we decided we would stay there. We could have come away after a day and a half if we followed the standard pattern of meetings but we stayed a full five days! I had decided I would not leave till Friday night or Saturday morning. And finally, it was 4 p.m. on Friday evening when we tied it up. Second, the best idea we had was to take [Atomic Energy Commission chairman] Anil Kakodkar along with us so we could clear all doubts. This sent a tremendous message across to the other side that we mean business, that we’ve got the one person who understands what we need, and has the authority — in the sense of the nuclear community’s endorsement — and this means the Prime Minister was willing to send everybody whom he could possibly think of. He had sent his Foreign Secretary, Dr. Kakodkar, and the NSA plus the team.

How do you think the U.S. Congress will look at the text?

I don’t think Congress will object. If [the Democrats] do not wish the U.S. President to get a major foreign policy victory, they could probably do something. But I think the text is OK. Our point is that whatever we have on the table should primarily be something that meets our [concerns]; but if the other side is not able to get it through their system, then what is the point?

And they understood this was our constraint too?

We said we had reached the limit of our flexibility. But either side need not take the other’s view into consideration unless both were willing to reach an agreement.

Why was it necessary to split the Indian right to reprocess into two parts, with prior consent coming upfront but actual permission being granted only after an 18-month schedule of consultations?

[Experts] will understand but most people were fed on the concept that advanced consent rights is the basic issue. So we wanted that upfront, literally. Two, we wanted to make a very clear demarcation that if your concerns are nonproliferation, we are offering you something, and we wanted to make it very clear that this is a dedicated national facility. Ever since I first floated the idea publicly, there have been efforts on the part of some to say ‘Can it be part of an international program, part of GNEP?’ So we wanted it clear. That is why these two sentences are put in a manner that nobody can quibble about what we meant … And then we wanted some timelines so this wouldn’t be dragged on and on. So we got those three…

What happens if agreement on the modalities of reprocessing — like the infamous ‘joint determination’ for Tarapur reprocessing — does not come after a year of consultations? Is there a dispute resolution mechanism? Are there administrative arrangements? Will India be free to reprocess?

Running right through the agreement is a system of consultations and discussions. We really did not need [the timeline] except for Banquo’s Ghost of Tarapur hanging there. The question was, if you have an open-ended process, there will be no limit to this kind of thing. It becomes a chicken and egg situation — if the reactors come, the spent fuel starts piling up, and your reprocessing is still a matter of debate and discussion — so American industry must realise that to some extent, if they are thinking of expanding the opportunities they have, there must be an outlet for what is being produced. We have tried to put into the document as much as is possible to state. Now, it depends on people who are there. You will get spoilers I am quite sure, definitely on their side, probably on our side, who will try to do this. But we’ve tried to put into the agreement something that rational, normal human beings will understand what it means. If you don’t have agreement within a year, OK, it may be because some designs have not been properly [made], but if someone is quibbling that ‘I don’t like it to be facing west, it should face east,’ I mean, that would be different. I don’t think the whole thing will be decided in one year, it maybe extended if there is a rational way of looking at it — may be because the design you have drawn does not seem to be ok. But if you are just trying to prolong the process because you don’t want to give us reprocessing, we have the opportunity to terminate it in the ultimate, that is, it is not as if, at the end of 12 months, we are going to put a guillotine and say nothing is happening so therefore… The whole purpose is to move forward.

Terminate the consultation process or terminate the agreement?

We don’t know. We have no intention of terminating unless you see somebody is … I don’t think it’s going to happen. It’s really an insurance against what you rightly said is Tarapur. I think they have understood that we have not done anything with Tarapur. We did mention it is a ticking time bomb. Ok, Tarapur is a small quantity but if there are larger quantities, there is no question. If we are thinking of a huge expansion and you want to be part of that game, you need to do this. I think they’ve understood that and they have come forward. But you will always have some spoilers, for which we have put some kind of break so that people understand that if push comes to shove, and that’s the ultimate, we have no … For that is part of the agreement. The whole point of this is that we are not cheaters at all. Whatever we say or want to do will be in conformity with the terms of what has been put down. That is the sum and substance of the agreement.

The 123 text says that in the event of the International Atomic Energy Agency determining that safeguards are not being applied, India and the U.S. must enter into consultations for the establishment of alternative ve rification mechanisms. Have we thought about the circumstances under which the IAEA could make such a determination?

We were trying to bridge a concern that was being expressed, may be real, may be not. Running through this as a thread in the entire agreement is our willingness to stake our credibility in terms of our honesty of purpose. We have said we are prepared to put our reactors under safeguards in perpetuity and the only safeguards we accept are the IAEA safeguards. We are going in for an India-specific safeguards regime. Now the Americans say, ‘Suppose the IAEA doesn’t do this or that?’ We have already consulted the IAEA, they cannot even conceive of a situation, I mean short of a nuclear Armageddon when everything is broken down… But we are dealing with people who have concerns. After all, someone may ask us, why do you want a timeline on reprocessing. It’s purely based on our apprehensions. Similarly, they have apprehensions on the other side. So what we have said is ok, we meet your apprehensions, that if the IAEA determines they cannot, then we will have joint — the two parties will mutually agree on new verification arrangements, which I think is a very rational way of looking at it. We have removed the whole question of fallback safeguards. Now you may say, the IAEA could be persuaded, coerced…

What about budgetary reasons? The IAEA does have a budget crunch. Could lack of money be a reason for the IAEA to make such a determination on implementing Indian safeguards?

That’s true, but we have left it to IAEA determination. Whoever is the Director General will have to make the determination and get the [IAEA] Board to agree that we are unable to put the safeguards process. Now, if that is because of lack of funds, we may decide to add to the IAEA’s funds. There are several innovative things one can think of.

So in the worst-case scenario, we pay for our own safeguards rather than letting the U.S. come in?

Exactly. We don’t want someone else. If the IAEA is unable to do it because of lack of funds, we can always find some way to do it. What we do not want is x, y or z coming and prying.

How has the U.S. ‘right of return’ on fuel supplies in case of a nuclear test by India been reconciled with their commitment to fuel supply assurances and the continuous operation of our reactors?

When you see the full text, you will see. I think it’s a major achievement. In a sense we have squared a very difficult circle. The principle is that you cannot derogate a commitment that has been made because it is linked to safeguards in perpetuity. That is a point which I had made to [U.S. National Security Adviser Stephen J.] Hadley way back. ‘You and I played a role on the night of March 1 [2006] in producing this. Now you can’t go back on that. That approval came from your President.’ So I think there, the derogation of that [commitment] will not be affected by the [right of return]. That is more or less the line we have taken. This was a problem we have because that is a legal issue for them, not a policy issue. We have tried our maximum to enable them to say that we have not broken any law or bent any law beyond any point, so that they cannot come back and tell us that. So where there was a legal impediment, we have tried to find some way around it, but this I think is an excellent fix, the negotiating team felt. It certainly has the approval of [DAE Director of Strategic Plans] Dr. Grover and Dr. Kakodkar. That’s why I had him there. He had said, ‘You can always ring me up.’ I said I want you there every second, every minute!

But he was not present in the actual negotiations?

No. I told him, if things break down, they will accuse me… ‘What do you expect of a policeman, he can’t think strategically’! But you are an icon as far as India is concerned. If there is breakdown, let them at least say you were not involved in the negotiations. But I’ll pass every single bit of it through you so if you have any, I mean, we had lots of discussions and we had to moderate each other’s positions, but finally he was fully on board. Just as we did on July 17 [2005] night.

Were you constantly in touch with the PM?

Not constantly, but I knew he was worried. So I talked to him, first on July 18, then 19 and 20, when we felt things were not collapsing, we are moving towards resolution.

In the negotiations last week, was there a point where you realised you were over the hump?

July 18th. That was the Hadley meeting. There were the two basic issues of reprocessing and right of return which were finalised. And it was obvious I had an ally. And safeguards. For us the three key issues were reprocessing, immunising of strategic reserves, and safeguards. All commitments the PM had made. And there were others like sequencing and so on.

On the 18th, we had the impression that these three would be sorted out. I had two rounds with Hadley entirely one to one. And a two-hour round with myself, Burns, and Hadley. We had altogether eight hours involving Hadley. I think our negotiating group had a tougher time. There were the State Department lawyers and all that. I take my hat off to our negotiators. What I did was easy. The difficult part was what [Indian High Commissioner to Singapore] S. Jaishankar, Dr. Venkatesh Verma [from the Prime Minister’s Office], and Grover did with Burns. Because there were lawyers. With Hadley it was easy; you basically make a pitch and if he was willing or half way willing, it was ok.

Did we have lawyers?

No, our country is not litigious like that. We don’t have prenuptial agreements before one gets married here! But our team was solid. I must say you have to really give credit to the two stalwarts from the DAE — Dr. Kakodar, who stayed away but his presence permeated right through, and Dr. Grover; they fought every inch of the way. Because whatever were the big ticket items we got, putting the concepts into language was always difficult.

Is it the case that in the unforeseen event of a nuclear detonation by India, the continuous running of Indian reactors will be unaffected?

On paper, they have said it will be uninterrupted. What we have tried to say is for disruption — so this will be treated as disruption. Now certainly I don’t have to tell you that if there is a detonation, or what I would say a unilateral detonation — we have provided in this for a mutuality in that — when you read the full text you will see that when we refer to July 18, there is a provision that if the U.S. tests, i.e. there is a reciprocal commitment. Then we have provided for multilayered consultations, in which the national security concerns if something happens is — I mean the dreaded word detonation has not been said anywhere.

But if there is a unilateral detonation on our side, I presume there will be political consequences irrespective also. We recognise that. But what we want is a legal document so that we have a leg to stand on.

We’ve talked in terms of a time lag by which alternative supplies can be brought, all that has been provided, so that’s why I am saying the text is good, but the text is as good as its implementability. I think the U.S. and India will hopefully not — at least for the next 20 or 30 years — be seen as antagonists who are fighting a major conflict, so I think both sides will be interested in [agreeing].

Just so that we are clear on this point, India can continue to use American supplies until such time as replacements come, even if they want it back?

That is the sum and substance of what the text says. Whether that happens, I am not God here, though I must say God played his role in this.

Nuclear deal is satisfactory, says Kakodkar

Between the lines of Kakodkar-speak, support for the nuclear deal.

“I could have a huge wish list. That’s not the point. What objectives did we set out with J18 and M2 and are we consistent with that? And the answer is yes.”

"Whatever I had said earlier was a part of national position. What I am saying now is national position. And this agreement is consistent with national policy. I have no reason to be unhappy".

“I think we [the Department of atomic Energy]are all karmayogis. So, we just carry the work on and this will allow us to remain consistent with that philosophy in an expanded manner.”

28 July 2007
The Hindu
[In the Hindu, this story was split into two. The link for the second story is here]

Nuclear deal is satisfactory, says Kakodkar

Siddharth Varadarajan

New Delhi: Fielding Atomic Energy Commission Chairman Anil Kakodkar but not the text over which its negotiators fought so hard last week, the Government on Friday officially announced that it had finalised the agreement for civil nuclear cooperation with the United States.

At a joint press conference, National Security Adviser M.K. Narayanan, Foreign Secretary Shivshankar Menon and Dr. Kakodkar pronounced themselves satisfied with the final text of the accord, also known as 123 agreement.

They said it was fully consistent with the commitments undertaken by both countries in the July 18, 2005 and March 2, 2006 joint statements.

Joint statement

Also on Friday, External Affairs Minister Pranab Mukherjee and U.S. Secretary of State Condoleezza Rice issued a joint statement announcing the completion of negotiations on the 123 agreement and calling this “a historic milestone in [the] strategic partnership” between the two countries.

The next steps now include India negotiating a safeguards agreement with the International Atomic Energy Agency (IAEA) and getting “support for nuclear trade” from the Nuclear Suppliers Group (NSG), they said.

Though Mr. Narayanan said the 123 text would be made available soon “at a time to be agreed by the two governments,” a ‘Fact Sheet’ issued by the Ministry of External Affairs listed some of the “features” of the agreement.

Among these, the agreement is “between two States possessing advanced nuclear technology, both parties having the same benefits and advantages;” it covers nuclear reactors “and aspects of the associated nuclear fuel cycle including enrichment and reprocessing;” it “contains a full reflection of the March 2, 2006 supply assurances and the provision for corrective measures;” and it “grants prior consent to reprocess nuclear material [in] a national reprocessing facility to reprocess IAEA safeguarded nuclear material and the parties will agree on arrangements and procedures within one year.”

But beyond textual assurances, it was clear that the Government’s main weapon in selling the nuclear deal to the public was Dr. Kakodkar, the man who had publicly articulated his concerns when it emerged that the U.S. was attempting to move the goalposts in the deal.

Mr. Narayanan acknowledged as much when he said the Prime Minister left “most of the talking” to the AEC Chairman in his meetings with the Left and the BJP about the 123.

Asked for his reaction, Dr. Kakodkar said he was satisfied and that the “objectives” set out in the July 2005 and March 2006 statements had been met. He chose his words carefully, both out of habit and because the Government is conscious of how Washington might react to any expressions of happiness in Delhi.

Indeed, the complexity of the Government’s PR task was amply on display on Friday when Mr. Narayanan had to simultaneously allay concerns about both the inadequacy of India’s nuclear weapons arsenal and the fear that it might grow too big.

In response to a question, he said no one in India had reason to be concerned about the lack of fissile material for the strategic programme. But to another question, he said that it was time “certain countries” stopped saying India was entering into this deal in order to make more bombs.

Kakodkar-speak

In his own comments on the text of the recently finalised bilateral nuclear cooperation agreement with the United States, the Government’s top nuclear man may have been laconic and understated but his endorsement of the deal rang clear.

Asked whether he was satisfied with finalised text, he answered monosyllabically, “Yes.” Asked again, he said, “I would describe this as satisfactory from the point of view of carrying forward our nuclear programme.”

When he was reminded about the unhappiness he had expressed in the past, he said: “The point is simple. Whatever I had said earlier was a part of national position. What I am saying now is national position. And this agreement is consistent with national policy. I have no reason to be unhappy.” Later, he said, “I was unhappy when [full cooperation] was not there.”

But in response to specific issues, Dr. Kakodkar was more forthcoming.

The objective

Asked whether the deal now allowed “full” cooperation, he said the objective was to make sure India benefited not just from reactors and fuel supplies but also in terms of accessing the additional energy in spent fuel in an “unhindered chain.” “This agreement,” he said, “gives advance consent rights for us to reprocess spent fuel and recover the material in a national safeguarded facility. So it allows us to derive the full benefit.”

To persistent questions about the consequences of a nuclear test by India given the Hyde Act’s unambiguous provision for the termination of cooperation, the three officials said the fuel supply assurances of March 2, 2006 were meant to cover the possibility of disruption.

“As far as we are concerned, [these] stand and will be carried out,” said Foreign Secretary Shiv Shankar Menon. “That’s our expectation.”

On his part, Dr. Kakodkar said, “The fuel supply assurances built into the March 2006 statement and this final draft agreement are entirely consistent.”

The agreement “in its final draft,” he said, “allows the country to continue its domestic programmes whether three-stage civil energy, R&D and strategic and access international cooperation. The rest is too speculative.”

The officials acknowledged that they had not succeeded in convincing the U.S. to include access to reprocessing and enrichment technology and equipment but said they looked forward to the Nuclear Suppliers Group making a “clean and unconditional exception” for India. “I could have a huge wish list,” said Dr. Kakodkar in response to a question.

“That’s not the point. What objectives did we set out with J18 and M2 and are we consistent with that? And the answer is yes.” The scientists and staff of the Department of Atomic Energy were “karmayogis,” he added. “So, we just carry the work on and this will allow us to remain consistent with that philosophy in an expanded manner.”

'The U.S. knew India had no more flexibility'

According to a senior Indian official, this is the core of the nuclear deal as far as the United States is concerned: “If they hadn’t agreed, then the deal would have collapsed and for another 20 years no one in India would be able to do anything with them... For a range of issues on which you now do business… in the Asia-Pacific, for example, they would have to count you on the other side.”

25 July 2007
The Hindu

‘U.S. knew India had no flexibility’

Siddharth Varadarajan

NEW DELHI: India and the United States were able to finalise the text of their nuclear cooperation agreement — also known as the 123 agreement — largely because Washington understood that the Indian side had no more flexibility and shifted gear to accommodate India’s concerns, senior Indian officials told The Hindu.

The officials said the fact that the United Progressive Alliance Government had no more room for manoeuvre was underlined by Prime Minister Manmohan Singh in his meeting with President George W. Bush at Heiligendamm and Under Secretary Nicholas Burns in Delhi last month. “The law of unintended consequences also operated,” said an official, with the strong opposition inside India serving to corroborate the Prime Minister’s assertion.

With the U.S. being told that India had “nothing more to give,” a deal was reached because “politically, the will to do it was very strong, from the very top,” the official said.

The U.S. had a strong economic incentive to complete the deal, given the billions of dollars India was likely to spend on new energy projects in the years ahead, the officials said.

“Clearly, the U.S. is calculating that the higher the technology involved, the greater will be the share for American companies.” But the officials concede, strategic considerations were not far behind. “If they hadn’t agreed, then the deal would have collapsed and for another 20 years no one in India would be able to do anything with them,” said one official. “For a range of issues on which you now do business… in the Asia-Pacific, for example, they would have to count you on the other side.”

Belying media reports of dramatic swings during the five days of negotiations, the senior officials say the outstanding issues were resolved sequentially one by one.

“When we went in, all the major issues were wide open and we weren’t sure there would be a deal”, said an official. But by the end of the first day of the marathon negotiating session, the fuel supply assurances issue was resolved. The second day produced an agreement on the question of reprocessing, the third on the termination and ‘right of return’ clauses and the fourth on fallback safeguards. The fifth day, say the officials, was used to produce and vet a consolidated text of the complete draft 123 agreement.

‘123 fulfils Prime Minister’s assurances’

Fuel supplies, right to reprocess spent fuel, fallback safeguards and ‘right of return’ clauses all resolved; but access to reprocessing and enrichment components deferred to future amendment.



The Hindu

‘123 fulfils Prime Minister’s assurances’

Siddharth Varadarajan

New Delhi: The draft nuclear cooperation agreement negotiated last week by India and the United States fulfils all the assurances Prime Minister Manmohan Singh gave Parliament in August 2006, senior officials told The Hindu on Monday.

The agreement — also known as the ‘123 agreement’ — grants India “prior consent” to reprocess spent fuel produced by U.S.-supplied equipment and fuel, a key requirement for the Indian side, though the specific arrangements will be worked out subsequently within a finite time period.

The agreement reiterates the fuel-supply assurances provided in the March 2006 separation plan and commits the U.S. to the “continuous operation” of any reactor it sells to India. Officials also say the irksome issue of fallback safeguards and the ‘right of return’ — as mandated by the U.S. Atomic Energy Act — of American-supplied material in the event of cessation of cooperation have also been satisfactorily resolved.

Moreover, 123 includes a specific clause that the purpose of the agreement is not to hinder anything India does with its strategic programme or to affect unsafeguarded or military nuclear facilities.

The draft 123 agreement is final and its text is now frozen, say officials, though it still needs to be formally approved by both Governments. Once Parliament reconvenes for the monsoon session, the Government is likely to make the text available to the House.

According to the officials, any reprocessing of U.S.-origin spent fuel will be done in a dedicated national facility under International Atomic Energy Agency safeguards. Though India has been granted prior consent, the specific arrangements have not been spelt out and would require further consultations. The draft 123 states that within six months of an Indian request to operationalise the right to reprocess, the U.S. must begin consultations and an agreement on arrangements must be concluded within one year.

The parameters for these arrangements relate exclusively to IAEA requirements for storage of spent fuel, safeguards, and physical protection. This linkage has been explicitly spelt out and there is no room for ambiguity, say the officials. “There will be no repeat of the Tarapur experience,” said an official. India was free to reprocess the spent fuel there but the U.S. never agreed to make a joint determination with India that reprocessing was “safeguardable.” “Now there is prior consent and a reference to the parameters under which it will be done,” said an official, adding that Department of Atomic Energy experts considered the language watertight.

In the event of the cessation of cooperation by the U.S. presumably in response to an Indian nuclear test, the draft agreement still gives Washington the right to demand the return of equipment, material and fuel it has supplied. However, the exercise of this right has been qualified by a U.S. commitment to ensure the continuous operation of reactors supplied by it and will leave India free to arrange appropriate fuel supplies from other sources.

On fallback safeguards, another key demand of the U.S. side, the 123 agreement says that in the event that the “IAEA determines that safeguards are no longer being applied” on U.S.-supplied material, India and the U.S. must consult with each other and agree on an appropriate verification mechanism. The officials say they are confident the circumstances would never arise under which the IAEA could make such a determination.

The officials also denied reports that there was anything in the 123 agreement which would require India to open up its enrichment facility at Rattehalli for IAEA safeguards.

The one issue on which the U.S. side would not budge, citing legal and policy restraints, was the inclusion of reprocessing and enrichment technology and components. The 123 agreement states that fuel cycle-related equipment can only be transferred pursuant to an amendment to the agreement. Though India is not interested in importing fuel cycle technology, it would like to source components for its safeguarded reprocessing activities. However, the officials are confident that the Nuclear Suppliers Group will not place a bar on the sale of these items to India when it changes its guidelines.

In terms of sequencing, the officials said the next step was the negotiation of India-specific safeguards with the IAEA and then the NSG agreeing to change its guidelines. The U.S. and India hope to conclude these steps by October, paving the way for an ‘up-down’ vote by the U.S. Congress later this year.

123 a done deal

Both sides say they've done it. Preliminary digging by me suggests the Indian side got what it wanted. But I would want to learn more before writing on where things stand now.

India-US Joint Press Statement on the conclusion of meetings on the US-India Civil Nuclear Cooperation Initiative

Under Secretary of State for Political Affairs R. Nicholas Burns and Foreign Secretary Shivshankar Menon held four days of meetings in Washington July 17-20, 2007, on the US-India Civil Nuclear Cooperation Initiative, including talks on bilateral agreement for peaceful nuclear cooperation, also known as the 123 agreement.

2. In addition, National Security Advisor M.K.Narayanan and Foreign Secretary Menon met with Vice President Cheney, Secretary Rice, Secretary Gates, and with the U.S. National Security Advisor Stephen P.Hadley.

3. The discussions were constructive and positive, and both Under Secretary Burns and Foreign Secretary Menon are pleased with the substantial progress made on the outstanding issues in the 123 agreement. We will now refer the issue to our governments for final review.

4. Both the United States and India look forward to the completion of these remaining steps and to the conclusion of this historic Initiative.

Washington
July 21, 2007

The latest on the 123

Details of the progress made or not being made by the Indian delegation in Washington are few and far between. The AFP story is headlined "US, India break 'logjam' in nuclear talks but final accord elusive", and quotes U.S. Under secretary of State Nicholas Burns as saying

"We have overcome many of the outstanding issues. We just need to go the extra couple of feet... We are in an extra innings... We haven't given up and I'm very hopeful we might have an agreement."

As usual, K.P. Nayar of The Telegraph -- a seasoned journalist who is their Washington bureau chief as well as foreign editor -- has the most detailed reporting. His account of the Dick Cheney-M.K. Narayanan meeting is here. According to K.P.,

National security adviser M.K. Narayanan and foreign secretary Shiv Shankar Menon have bridged a significant gap in concluding the 123 Agreement with US Vice-President Dick Cheney extending “political support” to India’s right to reprocess spent fuel produced by any American reactors imported by New Delhi.

The finalisation of the 123 Agreement may, however, require at least another technical round of negotiations for such political support to be translated into an agreed text which will meet the requirements of America’s complex non-proliferation laws. In view of this, the talks in Washington this week on the nuclear deal ended without any press briefing by either the Americans or the Indian delegation.

The normally methodical Aziz Haniffa has a slightly confusing account of the pre-Cheney meeting state of play on rediff.com. What's confusing is the distinction Aziz makes between India's offer of a "permanently safeguarded reprocessing facility" to handle imported spent fuel and America's apparent demand that such a facility be "internationally supervised". Now permanent safeguards is tantamount to permanent international supervision (by the IAEA, of course). If Washington expects something more than that, the deal won't move forward.

Finally, the Indian Express today leads with a story about "Washington accepting India’s proposal for a dedicated facility to store spent fuel and coming up with “forward-looking suggestions” to break the impasse on reprocessing rights".

Since the vast acreage of spent fuel tanks at Tarapur is nothing but a glorified "dedicated facility to store spent fuel" and India has been unable to reprocess that material despite the "forward looking" language of the 1963 civil cooperation agreement, I don't understand why India would be putting forward such a proposal at this time.

The Haneef transcript in full

The Australian, which leaked the transcript of Dr. Mohammed Haneef's July 3 police interrogration, has now scrubbed the link from its website.

But The Hindu downloaded it before it was yanked, so all those interested can read the entire 142 page transcript here.

Dr. A.N. Prasad on the Indo-U.S. nuclear deal

On Tuesday, I attended a talk by Dr. A.N. Prasad, former director of the Bhabha Atomic Research Centre and an early critic of the Indo-U.S. nuclear deal. So prescient has he been that even before the deal was signed in July 2005, he sought to sound the alarm about it. An article I wrote based on his concerns was published in The Hindu on July 18 that year, half-a-day before the deal was signed in Washington.

In his recent talk, Dr. Prasad dwelt at length on the importance of reprocessing for the Indian nuclear programme. He ought to know, since he joined the DAE's reprocessing group in 1959, the year it was set up.

To read the substance of his riveting and highly informative talk, reconstructed by me on the basis of notes I took, click here. If you just want a summary, see my news report of his talk.

Talk given by Dr. A.N. Prasad at a seminar -- ‘Indo-U.S. Nuclear Deal-Unexplored Angles’-- organised by the Forum for Integrated National Security at the India International Centre, July 17, 2007

[Note: This has been reconstructed by me on the basis of the notes I took. Hence it is incomplete and a little jumbled and disjointed. There may also be errors on my part]

Having worked in a closed shell for four decades, we thought the July 18 (J18) statement was a sign that at last our strengths have been recognised. That there has been a change of heart by the developed world, and by the U.S. We welcomed it because it is hard to keep growing within a shell. We have done well on our own, but we would like to play a global role. From that angle, we thought that there would be a certain amount of opening up. But next to the Hyde Act, the J18 statement looks like fiction. There is absolutely no correlation.

Now we are talking of concluding a 123 agreement to operationalise the Hyde Act. But only legal experts can tell us how the 123 can reconcile all that there is in J18 and the Hyde Act. I don’t know who is fooling whom. At this last stage, we can only hope for a miracle to happen.

As scientists, of course, we go by our experience. There was a 123 agreement for Tarapur, which was signed in 1963. It said the U.S. would supply fuel for the lifetime of the reactor, defined as 25 years. But in 1974, we conducted a nuclear explosion, and in 1978 came the Nuclear Non-Proiliferation Act (NNPA). They said our 123 agreement had to comply with the Act which had come much later! So we were abruptly denied fuel.

Only after we put up a MOX fuel plant to cope with the disruption did they realise that India can’t be browbeaten. They came back to us and said the NNPA prohibits America from giving fuel but another country like France could step in. France, of course, quoted a very high price, taking advantage of our predicament. So we started negotiations with the Russians and Chinese and we finally succeeded in a way in getting our fuel.

So my point is that the 123 agreement is not a very safe document. The Act is what counts. And here, we have to worry not about another Act which may come in the future. The Hyde Act is already there to see.

What the U.S. wants

In my view, what the U.S. wants from the nuclear deal is three things.

First, clearly they want access to the large Indian market for nuclear power.

Second, the U.S. nuclear industry is dormant in the sense that no new reactors have been built and commissioned for thirty years. So they have a shortage of trained people. On the other hand, we have trained engineers in the nuclear field and my fear is that our manpower resources will get depleted.

Third, ever since the NPT entered into force, the U.S. has been trying to get India into its fold one way or the other. But when they saw that despite their sanctions and embargos, our programme was proceeding, we have our fast breeder programme and we have even conducted nuclear tests, and India could soon get a firm hold on thorium utilisation and India would then be unstoppable, they did not want to leave India any more time to get stronger. Sanctions hadn’t worked so they thought, let us try a new way. Hence this deal.

Core of 3-Stage programme is reprocessing

On the Indian side, our ‘crime’ is our uranium shortage. But this is not a big deal. This is not new, it has never been hidden. We knew this in the 1950s but developed our three-stage programme based on the fact that there were limited uranium resources. We said we will use this uranium in such a way to get to the thorium stage. Even in the 1950s we said this. We decided to use our uranium in heavy water reactors because they are good plutonium producers. This plutonium is to be recycled in fast breeders which will produce more fissile uranium (U233) which can be used in third stage for running the uranium-thorium cycle. We were having our eyes set on the three-stage programme from the 1950s.

We have done a lot of research on this but the U.S. doesn’t want Indian policy makers to be patient. To get to the 3rd stage, reprocessing is the core. From the 1st to 2nd, you reprocess to get plutonium, and from 2nd to 3rd stage, you reprocess again.

I joined the Department of Atomic Energy as a young scientist in 1958. Bhabha decided in 1959 that we should set up a reprocessing unit and I joined the group that year. Sethna was the leader. Up until my retirement, I worked on reprocessing. Having done all this work and even having said we are ready to offer reprocessing services to other countries, the U.S. is now telling us we have no right to reprocess. This is a farce!

I remember in 1961 when I went to the U.S. with three other young colleagues. Even then, the U.S. was secretive. For every question we asked, they would give 10 answers and say only one of them was correct. We were kept in a secluded place and what we read in the library was also monitored.

Of course, we developed our own methods and in 1965, we commissioned our own reprocessing plant. India’s first reprocessing plant was up and running before our first nuclear power plant at Tarapur! A common European reprocessing plant was being built in Belgium with U.S. assistance. They started work around the same time as us but they could only commission it in 1970-71. A few years later, I visited Germany, which was also trying to put up a small reprocessing unit. They asked me, based on my experience, to visit the site and tell them if they were doing anything wrong. I pointed out a few problems and they were very grateful.

In the late 1970s, I visited a Japanese reprocessing plant and they told me they were having problems because the U.S., having allowed them to reprocess, was not willing to let them reprocess at full steam. All of this is part of history.

The U.S. is now bringing forward this concept of reprocessing spent fuel in a multinational facility rather than in a national Indian facility. They want to control and slow down our three stage programme. Once we get hooked on to uranium imports, there will always be official reluctance to pursue this programme and funding won’t be given. It will get a bad beating.

Sanctions remaining

The July 18 statement said there would be “full” civil nuclear energy cooperation. Even a lay person will tell you full means full, not a part. But they now want to deny more complex technologies and equipment like those dealing with reprocessing, enrichment and heavy water, where, for example, very heavy pressure is needed in the chemical processes (?). So they will continue their embargo. Now, we are not looking for their technology in these fields. But because of the low volume of our requirement, it would be more cost effective for us to be able to buy certain equipment and components like high pressure valves, special pumps, etc. rather than manufacturing them ourselves. So with the Hyde Act, these restrictions will remain. It is a selective opening. This is very troubling.

On India’s offer of a dedicated fully-safeguarded reprocessing plant

Ideally, we should confine our reprocessing facilities to campaign mode safeguards, meaning that only when safeguarded fuel is put through will there be safeguards. I say this because reprocessing plants are very complex and difficult to operate. Because of the radioactivity, everything has to be remotely handled. Even maintenance has to be done remotely. It is very difficult to perform maintenance tasks while the plant is running and because of the nature of the operations, the plant is prone to breakdowns and outages.

So if an unsafeguarded plant breaks down, we will not be able to send the unsafeguarded spent fuel that would normally be processed there to another facility because that would be under permanent safeguards rather than in campaign mode. We would thus have to wait for the maintenance cycle to be completed in the unsafeguarded plant before we could process the spent fuel. So in other words, we will lose the kind of flexibility that is needed to keep costs down. A permanently safguarded reprocessing facility, therefore, will be quite an expensive proposition.

We have many years experience in reprocessing and are able to do the job at one-third to one-fourth the cost that the other nuclear powers are able to do. ...I know what it takes, and at what cost. But the U.S. wants to get at our reprocessing strength.

Testing issue

Threat perceptions are not static. Nuclear devices themselves undergo technical evolution. Computer simulations cannot be done.

Conclusion

I will conclude with a concern. On his way back from the G8 summit, the Prime Minister said all patriotic Indians should support the nuclear deal, implying that it was unpatriotic for us to oppose the deal in its present form. A fellow like me, who has started and ended his career in the nuclear establishment, who spent four years after that working in the International Atomic Energy Agency, and then again as a member of the college of commissioners of UNMOVIC overseeing the disarmament of Iraq – this sort of language of the Prime Minister brings to my mind the language of Bush. During the invasion of Iraq he said those who weren’t with him were with the terrorists, that if you are not with us, you are against us. The fact that he is influencing our Prime Minister to talk the same language is something that is really bothering me.

The Amorim interview: 'We are changing the world's geography'

On the eve of the India-Brazil-South Africa (IBSA) Foreign Ministers meeting in New Delhi, Brazil’s Foreign Minister Celso Amorim spoke to The Hindu about the future and significance of the tri-continental grouping for the evolving international system.








17 July 2007
The Hindu

“We are changing the world’s geography”

Siddharth Varadarajan

After initial scepticism and disinterest, the rest of the world finally seems to have woken up to the reality and significance of IBSA. As one of the inventors of this grouping in 2003, tell us a little about what you had in mind then and where you see it heading today.

I can tell you about the origin of IBSA very precisely. It was on the second day of Lula’s first administration. I received South Africa’s Foreign Minister, Nkosazana Dlamini Zuma, and she mentioned the idea of having a new group of developing countries because the old groupings like the G15, though useful, were not working very well to create programmes of South-South cooperation. She had several ideas and I told her, let’s do something simple, let us start with three countries in each continent — Brazil, India, and South Africa. There was a logic to this. Our countries had lots of similarities in terms of our positions in international fora — from human rights to disarmament, the World Trade Organisation, Security Council… Since she was going to India, I asked her to mention it to our Indian counterpart. And five or six months later, [the then Indian External Affairs] Minister [Yashwant] Sinha came to Brazil for a bilateral, and I said, why don’t we have a meeting of the three of us. So we had an informal meeting and from then on we created the IBSA forum. Last year, we had the first summit and we will meet again at the highest level this October.

I agree interest today is growing, certainly in our own countries — it is an educational process for our own people because we are more used to looking to Europe, the U.S. or our respective regions. This idea of three big democracies, three multicultural countries in three different parts of the world, is a very special thing and now others are mentioning it. Not only countries like China and Russia are getting interested but even [U.S. Secretary of State] Condoleezza Rice, when she came to Brazil, spoke about IBSA as an important development because of the democratic element that is present there. Of course, IBSA is not discriminatory, we are prepared to discuss with other countries. But I think Brazil, South Africa, and India have very special commonalities.

In which direction do you see IBSA evolving?

There are basically three dimensions. First is the development of joint projects of our own — in S&T, health, transport, commerce. In other words, cooperation among ourselves for projects directed towards our own progress. Second is our cooperation vis-À-vis poorer countries. This is the first time you have some developing countries joining forces to help other countries that are poorer than themselves. We already have very successful projects in Haiti and Guinea-Bissau and I think we should move to other areas like Zambia or Burundi, or some country in Asia. Being poor does not mean you cannot have solidarity. And we’ve created a fund. At four billion dollars, it’s not a huge fund but it will grow by a billion every year. The third dimension is the reinforcement of our own cooperation in international fora, like the reform of the UNSC. We are members of G20 in the WTO. President Lula has an expression — changing the world’s geography. He actually spoke of changing the commercial geography but I think it’s not only the commercial but changing the way people see the world. Helping the world to become more multipolar. I think it’s good to have a more democratic world, more countries that have influence. I don’t want to be very prescriptive because everything depends on the situation but IBSA — either individually or jointly — could help in situations like Palestine. We can help in other situations, in Africa say, in which we may have more of an opening for the countries concerned than others.

Earlier this month, Condoleezza Rice said the Non-Aligned Movement (NAM) had no relevance and that countries should get together on the basis of values such as democracy. What do you think about the future and relevance of NAM?

Speaking of ‘non-aligned’ today is a bit awkward because it is non-aligned to what? But NAM may still have a role. This is essentially a group of developing countries and you have all shades of political positions. NAM puts countries together, offers possibilities of discussion. But I am more confident that diversified coalitions in different formats can do better work. I think IBSA is certainly one. We are democracies, but when I say this, we are not importing western style democracy. Each of our countries is developing democracy in the full sense but also with the social content which is very important because it is not only the formalities of democracy that count. We are countries with multicultural situations but also problems. We are all strategically located in each one of our regions. So I think IBSA is probably more effective, which doesn’t exclude other configurations. For example, very often we speak of the BRICs and we had a first meeting of [Brazil, Russia, India, and China] which was a bit informal, arranged by the Russians, at the U.N. General Assembly last year and I think we should go on discussing these things. I think there are different configurations and we should not stick only to one. For example, Brazil is a member of Mercosur, the South American market. Sometimes people say, ‘Brazil has Mercosur, and what about IBSA?’ Well, I think a good strategic relation between Brazil and India will only help Mercosur. My dream is countries like India, Brazil, and South Africa — and the whole of Mercosur and SACU [Southern African Customs Union] — can form a big economic space. Of course it will take time, but that will enable us to be in a better position to face the North in a creative, competitive way.

During the Heiligendamm G8 outreach meeting, President Lula said the outreach countries should have their own forum. Prime Minister Manmohan Singh also raised questions about the utility of an outreach group as an appendage to the G8.

Well, there’s not much point for us to come for the dessert when the meal is over! There is a danger even, because sometimes there is confusion because you participate in a meeting and there is a document issued which is not our document but we were half in the meeting so people don’t know if we subscribe or not. So we have to reflect on this. I don’t want to see only the negative side. On the positive, there has been this evolution. In the beginning, there was no invitation, we were not there, there was no dialogue. So it’s a beginning but it has to change, and we have to move towards a G13 or something like that in the near future. But as long as this doesn’t happen, I think the G5 should meet among themselves to have well-coordinated positions. We may not agree on everything — this is natural. The G8 don’t agree on everything either! But I think it is important and that is why President Lula raised this.

One of the IBSA projects that has not gone far is UNSC reform. Should we rethink the G4 concept? Should IBSA be cutting edge, since the case of the three developing countries is the most compelling?

These are historical processes and we have to be a little patient. It takes time to change the basic structures of the world. I think IBSA certainly has a role in pushing the reform but I think the G4 also has a role. Certainly, India and Brazil have a very strong stake because developing countries are the ones not represented. But when discussions started about the UNSC in 1993, it was the opposite. Germany and Japan were the strong candidates. Now that has changed. But I think apart from big developing countries, having countries with a strong influence in world affairs is important. So I think the G4 has its usefulness, which doesn’t exclude IBSA of course.

Once the Nuclear Suppliers Group changes its rules to allow commerce with India, what would be the scope for bilateral cooperation with Brazil and India? Do you envisage cooperation extending to the fuel cycle?

If you are able to develop an effective safeguards agreement, I don’t see any problem. I think we should start with the softer areas, like nuclear medicine, the use of isotopes for food preservation, but I don’t think we should be limited to that. For us, the important thing is that cooperation has to be for peaceful purposes. If we can clearly isolate it from any other use, I don’t see any problem.

If I can ask you a question linked to the other hat you wear as Trade Minister, does the failure of the Potsdam meeting of the U.S., the EU, Brazil, and India last month mean the end of the road for the Doha round?

The rich countries have to learn that they cannot just put pressure on developing countries and think they will have the result that they devised as the one that is convenient for them. They have to negotiate. They are used to negotiating among themselves and coming to us with readymade solutions. In Potsdam, they underestimated our sense of balance and dignity. I don’t think they necessarily did it in bad faith but it’s just old habits. So now the situation is certainly more difficult than it would have been, but I don’t think it’s impossible.

When I look at the world and the need to have measures that can really have an effect in terms of combating poverty, crime, and even terrorism, the best thing that can be done is a trade deal that is really development friendly. And that is what we’re looking for. Somehow, in the midst of our negotiations, instead of having an agreement for a development round, it became a round in which the rich countries were looking for advantages. We understand that in order for the U.S. to sell reduction of subsidies, or for the EU to sell larger increase in their markets, they need to show something in return. But the big thing in return would be that both [rich and poor] are reforming at the same time. They can’t reverse the order of things and make openings in industry, NAMA, or openings in special products in India as the key to the round. That is the opposite! They have the key to the round. If you reduce subsidies to what they should be — the G20 proposal is $12.1 billion, which is still more than what they spent last year — then of course we will also move. But you can’t reverse the order of things and have a knife in our chest and say that if you don’t move in NAMA and industrial products, there will be no round. Come on! This is no more the Uruguay round. This is the Doha development round.

Is the stalemate a blessing in disguise because it forces countries like India, Brazil, and South Africa to explore new commercial geographies?

We should explore other avenues. I think it would be very, very, very important and I hope our heads of government deal with that in October — the idea of having a large economic space involving Brazil, Mercosur, SACU and India ... But I still think the WTO is important. Our relations with the rich world are not minor.

We do need a system, rules which are stable, which allow us to go for dispute settlement — as we have done in the case of cotton, sugar, U.S. subsidies. This system is necessary; we cannot abandon it. [The stalemate] is a blessing in disguise in that it alerts us to other possibilities but we cannot take it too far on that road because the WTO continues to be essential. It is the only multilateral trade body there is.

Brazil for IBSA link to Mercosur, SACU

Celso Amorim is the intellectual founder of the IBSA concept. Now he wants the three countries to create a "large economic space" linking Mercosur and Sacu as well.

17 July 2007
The Hindu

Brazil for IBSA link to Mercosur, SACU

Siddharth Varadarajan

New Delhi: Brazil is floating the idea of the IBSA forum which links India, Brazil and South Africa together eventually forming a “big economic space” with the South American common market, Mercosur, and the Southern African Customs Union (SACU) and hopes that the forthcoming summit of the trilateral grouping will take it up for consideration.

Speaking to TheHindu here in an exclusive interview on Monday, Brazilian Foreign Minister Celso Amorim said the emergence of such a large economic space would place India, Brazil and South Africa in a better position to face the Nor th “in a creative, competitive way.”

On Tuesday, the IBSA Foreign Ministers will meet to take stock of what the trans-continental forum has achieved so far and chart an agenda for the October summit to be held in South Africa.

“Creative attempt”

Describing IBSA as a creative attempt to energise South-South cooperation, Mr. Amorim acknowledged that the three countries had only so far “scratched the surface” in terms of mutual cooperation.

He blamed “closed bureaucratic and entrepreneurial practices” for the slow pace, especially when it came to the formation of joint ventures.

Asked about last month’s meeting in Potsdam, where the United States, the European Union, Brazil and India sought to find a way to revive the stalled Doha round of trade talks, Mr. Amorim said “the rich countries underestimated our sense of balance and dignity.” He said it was no longer possible for the rich countries to negotiate among themselves and present a “readymade solution” to the developing countries.

Even now, he added, a solution was not impossible but the U.S. and the E.U. had to realise Doha was meant to be a development round and not a round where they pressed for advantages.

To a question about the possibility of bilateral nuclear cooperation between Brazil and India including the fuel cycle once the Nuclear Suppliers Group alters its guidelines, Mr. Amorim said he did not foresee any problem so long as there was an effective safeguards agreement.

Pushing the envelope on peace in Kashmir

The Prime Minister’s Jammu speech takes the logic of “cooperative mechanisms” one step further, envisaging the shared use of the disputed region’s land and water resources across the Line of Control. But even as Dr. Singh comes up with new and imaginative ideas on the Indo-Pak front, the internal link in the overall peace process remains weak.










16 July 2007
The Hindu

Pushing the envelope on peace in Kashmir

Siddharth Varadarajan

Just when General Musharraf’s domestic difficulties and the continuing scourge of terrorism in the subcontinent had given the impression that the peace process between India and Pakistan was on the back-burner, Prime Minister Manmohan Singh has reminded us all of the enormous dividend awaiting the region if the evolving peace formula is allowed to go forward.

At the heart of this formula, of course, lies the simple proposition that both General Musharraf and Dr. Singh have independently made. That if the Line of Control dividing Jammu and Kashmir can neither be redrawn nor turned into a permanent marker of division, every effort must be made to render it “irrelevant.”

Both men have repeated this formulation so often that without anybody realising it, an irreversible paradigm shift in the manner the Kashmir issue is framed has taken place.

This does not mean India and Pakistan are entirely on the same page on a range of issues, from the meaning and timing of “demilitarisation” to the specific territory to which this formula is to be applied. And yet, the fact that a robust back-channel dialogue has been going on for more than a year suggests both sides are trying to make the “LoC irrelevant” formula work.

At a speech in Amritsar in March 2006, Dr. Singh spoke of people on both sides of the LoC being able to “move more freely and trade with one another.” He also said that he envisaged a situation “where the two parts of Jammu & Kashmir can, with the active encouragement of the governments of India and Pakistan, work out cooperative, consultative mechanisms so as to maximise the gains of cooperation in solving problems of social and economic development of the region.”

Now, in a major address to the University of Jammu on Sunday just one month ahead of the 60th anniversary of Indian and Pakistani independence — the Prime Minister has taken the idea of “cooperative, consultative mechanisms” between “the two parts of Jammu and Kashmir” one step further.

To the Amritsar formula of people and goods moving across the LoC, Dr. Singh has thrown in “services” and “ideas.” He also said that if the two governments succeed in making the LoC irrelevant by turning it into a “line of peace” -- the phrase was first used by Zulfiqar Ali Bhutto in an interview to Kuldip Nayyar on the eve of the Shimla Conference of 1972 — then the natural resources of the state need no longer be points of contention or a source of conflict but could be used for the benefit of all its people. “We could, for example, use the land and water resources of the region jointly for the benefit of all the people living on both sides of the Line of Control,” the Prime Minister said. Of course, Dr. Singh was equally upfront about the one caveat the Government of India will insist upon: “It goes without saying that this can only happen once terrorism and violence end permanently.”

Were they to materialise, such joint projects would go a long way towards the rational utilisation of Jammu and Kashmir’s ample natural resources. As matters stand, projects executed on the Indian side tend to raise the hackles of Pakistan, as the Wullar barrage and Baglihar issues have shown.

By raising the prospect of joint projects straddling two separate legal and administrative jurisdictions, the Prime Minister is also signalling India’s willingness seriously to examine dispute resolution models from Ireland and the Tyrol region — split between Austria and Italy where administrative linkages exist across sovereign boundaries.

The fact that Dr. Singh has used a platform in Jammu to elaborate on this formula is also a tactically astute move.

If the peace process is to succeed, all regions of the State have to be carried along, especially Jammu, where the opposition Bharatiya Janata Party might attempt to mount an obstructionist challenge. In his Jammu speech, the Prime Minister drew attention to the need for internal autonomy within the State and recognition of the “cultural distinctiveness of every community” as an organic part of the overall “Naya Jammu and Kashmir” that is emerging.

At the same time, it is precisely the domestic front that represents the evolving peace process’s weakest link.

As the Prime Minister himself acknowledged, the Government has not succeeded in drawing secessionist groups into its round-table conferences. The dialogue with the Hurriyat is also at a standstill. Even the “zero tolerance” towards human rights violations that Dr. Singh had promised would be the hallmark of his administration has failed to materialise.

While the kind of “demilitarisation” advocated by General Musharraf is rightly considered premature given the continuing level of terrorist activities, there is no reason why deployments in the State cannot be made less overbearing and intrusive for ordinary Kashmiris.

When a consensus of sorts was emerging on this question among the Kashmiri political forces earlier this year, the Governor, Lt. Gen. S.K. Sinha (retd.), waded into the debate with a de facto veto. As an Army veteran with long years of gubernatorial service in States with active insurgencies, he no doubt had his reasons. But sometimes, the length of service itself can become a burden and cloud one’s judgment.

As he turns his attention to the domestic front, therefore, the Prime Minister ought to consider whether the internal peace process he has in mind might not be better served by a civilian governor. Not only would this send out a refreshing signal to the people of the State but a civilian would likely be more in tune with the rhythms and sentiments of civil society.

Nuclear deal in 'make or break' zone

‘Next week’s talks will show if the United States is taking Indian concerns seriously’, say Indian officials.






13 July 2007
The Hindu

Nuclear deal in ‘make or break’ zone

Siddharth Varadarajan

New Delhi: While nobody on the Indian side expects next week’s talks between India and the United States to fully remove the major obstacles standing in the way of the proposed nuclear cooperation (123) agreement, officials here say the interaction will at least provide them with a “clear understanding of the [Bush] administration’s intentions.”

They said India had last month conveyed a major proposal on the establishment of a fully safeguarded reprocessing facility to handle American-origin spent fuel. But until now, there has been no feedback from Washington about this suggestion. “It is possible that they have begun a process of consultation with Congressional leaders based on our ideas” to see whether a 123 agreement including reprocessing rights would pass muster on the Hill, said an official. But if that process had not even started, this could only mean the Bush administration had not taken India’s concerns seriously, he added.

If this is so, the view among officials is that further progress would be difficult if not impossible. “Neither a firm deadline nor a drawn-out process of talks will help if there is such a major gap in perception,” said an official, adding that Prime Minister Manmohan Singh repeatedly said the final obligations and benefits from the deal had to be fully in conformity with what was contained in the July 2005 and March 2006 Indo-U.S. agreements.

The perception that the deal is now entering a ‘make or break’ zone is further strengthened by the composition of the high-level delegation that will depart for Washington on Sunday. Among the top officials accompanying National Security Advisor M.K. Narayanan are Department of Atomic Energy Secretary Anil Kakodkar and Foreign Secretary Shivshankar Menon.

According to a Reuters report from Washington on Thursday, the nuclear deal is stuck in choppy waters. The news agency quoted “a Congressional source who tracks the issue” as saying the U.S.-India negotiations “are not going well at all” with new areas of disagreement opening up. Reuters added that the same source “questioned whether the accord could be completed before Bush leaves office in January 2009”.

Though the status of the nuclear deal figured prominently in the telephone conversation the Prime Minister had with President George W. Bush on Wednesday and was mentioned by the U.S. National Security Council spokesman in Washington on Thursday, the official PMO statement curiously chose not to use the ‘N-word’ anywhere.

Earlier this week, Dr. Singh convened a special meeting of the “scientist” members of the Atomic Energy Commission (AEC) to reiterate the Government’s position on the implementation of the nuclear deal.

Two former AEC Chairmen Homi Sethna and P.K. Iyengar were also invited to attend, though the latter was unable to go for health reasons.

According to M.R. Srinivasan — a former AEC chairman and now member of the AEC — the meeting stressed the importance of the proposed 123 agreement incorporating “upfront” and “without qualification” the right of reprocessing.

Dr. Srinivasan said that in the context of U.S. attempts to push the Global Nuclear Energy Partnership (GNEP) — with its idea of a handful of “supplier” nations providing fuel cycle services to the rest of the world — India had no intention of allowing multinational fuel cycle facilities or initiatives to substitute for its national reprocessing programme.

“The separation of pure plutonium from the spent fuel is crucial for our fast reactors and the move to thorium for our energy,” he said. In an attempt to allay any proliferation concerns the U.S. might have since pure plutonium can also be used for weapons purposes, India last month offered to go beyond the March 2006 separation plan by undertaking to reprocess U.S.-origin spent fuel in a facility that would be under regular rather than ‘campaign’-IAEA safeguards.

“But the Americans have not even looked at this offer,” Dr. Iyengar told The Hindu. Describing the nuclear deal as a “sinking boat,” he said the U.S. needed to realise that India was not prepared to curtail i ts sovereignty.

Dr. Srinivasan said the mini-AEC meeting also reiterated the importance of India sticking to its stand on fuel supply assurances, the absence of secondary or fallback safeguards, the insulation of India’s strategic programme from any adverse impact, and the protection of India’s research and three-stage programme.

He added that the scientists also expressed their concern at several extraneous provisions of the Hyde Act, passed by the U.S. Congress last December, which presume to dictate Indian policy in a number of areas.