The State Department letter is proof that America has been negotiating in bad faith.
Even if the NSG grants India a clean and unconditional waiver, the country would be foolish to buy any U.S. nuclear supplies...
6 September 2008
The Bush-Berman bombshell and the ghosts of Tarapur
Whatever the American strategic or political objectives might have been, the Indian origins of the Indo-U.S. nuclear agreement lay in an atomic power station named Tarapur. If that United States-supplied reactor marked the origin of India’s quest for a commercially viable civilian nuclear programme, the subsequent denials of low-enriched uranium and reprocessing consent for the accumulated spent fuel from TAPS are also an essential part of the foundational narrative of our nuclear industry. Following the Pokhran-I detonation in 1974, the U.S. unilaterally abrogated its nuclear agreement with India, leading to the denial of fuel for the reactor. Thanks to France and Russia, last-minute supply solutions to the Tarapur crisis were always found but it was out of a burning desire to get out of this hand-to-mouth existence and end the fuel uncertainty once and for all that the United Progressive Alliance government of Prime Minister Manmohan Singh first began engaging Washington in discussions about a nuclear agreement.
The text which emerged on July 18, 2005, eventually went beyond merely envisaging LEU for Tarapur. On that day, the U.S. committed itself to lifting the global ban on fresh fuel and nuclear equipment sales to India. As the deal moved through each subsequent stage, the one challenge which Indian negotiators always sought to address has been to find ways of insulating the country from a repeat of the Tarapur experience. Tarapur happened because of a nuclear detonation. Their brief was to make sure there could be no repeat. After all, if billions of dollars are to be invested in the construction of new reactors in India, the country has to insulate itself from the possibility of fuel supply disruptions no matter what the cause. From the March 2006 separation plan onwards, therefore, fuel supply assurances have been a pivotal part of the agreement. Regardless of what the American side believed or wished, neither the separation plan nor the 123 Agreement of July 2007 qualified the circumstances under which these multiple layers of fuel supply assurances would kick in.
These layers of protection consist, inter alia, of U.S. support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors, and action by the U.S. in tandem with Russia, France and Britain to “pursue such measures as would restore fuel supply to India” in the event of disruption. The last layer of protection explicitly provided for by the agreement is India’s right to take “corrective measures” when all else fails.
These measures were agreed to by U.S. President George W. Bush in a joint statement with Prime Minister Singh on March 2, 2006. And they formed an essential building block of what was to follow, including the 123 agreement and the safeguards agreement with the International Atomic Energy Agency with its provisions for “perpetuity”.
It is significant that paragraph 5.6 of the 123 agreement – which repeats verbatim the March 2006 fuel supply assurances -- provides no scope for derogation from these legally binding commitments by either party, even after termination of the agreement. Just as Washington expects India’s commitment to safeguard U.S. origin or obligated equipment and fuel to outlive termination of the agreement, the U.S. commitment on fuel supply assurances is linked to the lifetime of the reactors and not the agreement and does not lapse upon termination for whatever reason.
Just as there is no derogation, there is no qualification either. Subsection (b) of the paragraph actually begins with the sentence: “To further guard against any disruption of fuel supplies, the United States is prepared to take the following additional steps”. Note the word ‘any’, whose meaning is unambiguous. Thus, it is clear that the agreement covers all disruptions regardless of cause. It certainly does not speak of different types of disruptions, let alone rule out disruptions caused by specific actions by India such as a nuclear detonation, a phrase which does not figure anywhere in the text of the 123.
The most shocking aspect of the Bush administration’s answers to the House Foreign Relations Committee (HFRC) questions is not its unambiguous and oft-repeated stand on termination of cooperation in the event of a test but the unilateral repudiation of the U.S. commitment to these fuel supply assurances. These answers were provided to the HFRC in January this year and deliberately kept under wraps all these months at the request of the State Department. The reason for this secrecy lies in the contents, which make it clear that the U.S. has no intention of honouring the agreement, is unilaterally pushing for changes in it and had actually negotiated the 123 text in manifest bad faith.
In its replies to the HFRC, the State Departments undermines the sanctity of the fuel supply assurances in six vital ways. First, in Question 14, it refuses to consider the assurances as contained in the March 2006 to be of a binding legal character, preferring instead to call them “important Presidential commitments” that the U.S. will uphold only to the extent they are “consistent with U.S. law”.
Secondly, in Question 15, it arbitrarily restricts the meaning of “disruption of supply”. It says the U.S. understanding of the phrase “disruption of fuel supplies" in Article 5.6 of the 123 Agreement “is meant to refer to disruptions in supply to India that may result through no fault of its own. Examples of such a disruption include (but are not limited to): a trade war resulting in the cut-off of supply; market disruptions in the global supply of fuel; and the potential failure of an American company to fulfill any fuel supply contracts it may have signed with India.”
Thirdly, it adds insult to injury by falsely asserting in the same answer: “We believe the Indian government shares our understanding of this provision”. It is surprising that this assertion has gone unchallenged by the Indian government.
Fourthly, in answer to Question 16 about the status of fuel supply assurances in the event of a nuclear test, the State Department unilaterally asserts that a nuclear detonation by India would give the U.S. the right to terminate the agreement on a year’s notice and that in case of termination, “the commitments in Article 5.6 would no longer apply”.
Fifthly, in Questions 17 and 18, the U.S. is serving notice of its intention to implement the so-called ‘non-binding’ clause of the Hyde Act (Section 103(a)(6)), which says it shall be U.S. policy to seek to prevent the transfer of nuclear material to India from other sources should American nuclear transfers be suspended or terminated. In the event of a fuel disruption following a nuclear detonation by India, therefore, the U.S. will not help arrange fuel from elsewhere but will actively work to deny access.
Sixthly and finally, although the State Department acknowledges the 123 agreement does not establish a minimum or maximum quantity of nuclear fuel to be placed in India’s strategic reserve, it warns that the parameters of the reserve “will be developed over time”. It also says it is “premature to conclude that the strategic reserve will develop in a manner inconsistent with the Hyde Act”, which specifies a reserve based only on the “reasonable operating requirements” of Indian reactors.
Taken together, it is clear that while India is seeking to establish clear rights and legally binding obligations as far as future fuel supplies are concerned, the U.S. emphasises the political contingency of the arrangement. Indeed, in its answer to Question 17, it says the fuel commitments are not legally binding but based on the U.S.-India initiative’s “political underpinnings”.
Far from slaying the ghosts of Tarapur, the spectre of fuel denial and arbitrary abrogation of commitments has already raised its ugly head. This time around, the situation is potentially far worse because India is thinking of importing billions of dollars worth of equipment and the conditions under which the U.S. can terminate the agreement are totally open-ended. In one stroke, the U.S. is seeking to slash away all the layers of fuel protection India has built and reduce it to just one: the strategic reserve. And even on that, one feels one has yet to hear the final word.
As for that other ghost of Tarapur – denial of reprocessing and the accumulation of toxic spent fuel – the State Department’s letter warns that the reprocessing consent rights contained in the 123 will not be “permanent” and can also be terminated by the U.S. It asserts that a provision to this effect will be incorporated in the yet-to-be negotiated “arrangements and procedures”. Leaving aside the fact that Article 14(9) requires both parties to define the “exceptional circumstances” under which consent rights can be suspended, and this has not yet been done, the answer is another warning that India needs to take seriously.
Was the releasing of the State Department's answers on the eve of the NSG meeting an act of unilateral disclosure by the HFRC's Howard Berman (a known critic of the India-US agreement) or a bilateral provocation by Berman and nonproliferationists in the State Department to ensure the NSG does not approve terms more favourable than what the US has accorded to India? Certainly, the State Department had known for two weeks that its letter was going to be made public on that day. But the sin lies not in the timing of the disclosure but in the contents of the letter. The answers and clarifications show there is such a huge gap between the Indian and American perception of the 123's provisions that no rational decision maker in India can afford to buy a farthing’s worth of nuclear equipment from the United States without first resolving these differences.
The only insurance still left in India's hand if the Americans push ahead with their interpretation on fuel supply assurances is to build a strategic reserve (of non-American fuel) to guard against supply disruptions caused by U.S.-led sanctions. Even if the NSG were to approve a waiver for India in a form the country finds acceptable, it is clear that the bilateral aspect of the U.S.-India nuclear agreement is more or less dead. Pouring billions of dollars into American reactors whose fuel supply may be uncertain and whose spent fuel India may find itself eventually barred from reprocessing would be folly of the highest magnitude. India does not need to conduct a nuclear test and should not do so either. But these are decisions a sovereign people must take in an atmosphere that is free from pressure and the threat of sanctions.