NSG discusses China-Pakistan deal, defers new ENR rules

Amidst internal divisions, series of demarches by India, consensus on the draft new rules proves elusive ...






26 June 2010
The Hindu

NSG discusses China-Pakistan deal, defers new ENR rules

Siddharth Varadarajan

New Delhi: Much to India's relief, the Nuclear Suppliers Group (NSG) on Friday failed to adopt new guidelines that would have led to the denial of enrichment and reprocessing (ENR) technology to countries like itself that have not signed the Nuclear Non-Proliferation Treaty (NPT).

In a statement issued at the end of its two-day plenary meeting in Christchurch, New Zealand, the NSG only said, its members “agreed to continue considering ways to further strengthen the guidelines dealing with the transfer of ENR technologies.”

The NSG statement also euphemistically says, “The Group took note of the briefings on developments concerning non-NSG States [and] agreed on the value of ongoing consultation and transparency.”

Diplomatic sources told TheHindu this was a reference to China's desire to sell two new reactors to Pakistan at Chashma in addition to the two that were contracted and approved by the NSG in 2004 as part of the country's pre-existing commitments.

Though no details about the discussions on the Chinese proposal were available, the sources said, the NSG statement's reference to the need for more consultation and transparency suggested a lack of consensus on the issue and perhaps even a face-off.

China has suggested the two new reactors were “grandfathered” by its 1991 agreement with Pakistan and should thus be exempted from the NSG ban on sales to non-NPT countries. Other NSG members have responded by noting that the Chinese side made no mention of a third and fourth reactor when they talked about the Chashma-1 and 2 when they joined the group.

On the ENR issue, consensus on the draft new rules proved elusive, thanks to strenuous lobbying by India and resistance from within the 46-nation cartel by a handful of countries such as Turkey. In the run-up to the Christchurch meeting, when it became clear the U.S. was trying to get the new restrictions approved, India worked on Russia, France and also Germany to ensure a deferment.

Official sources said New Delhi sent a clear signal to its friends and partners that the NSG's September 2008 exemption must remain unaffected by any changes adopted since that decision was the product of mutual undertakings by both the NSG and India.

Apart from the NPT rule for the ENR sales, the U.S. has been pushing for mandatory adherence to the Additional Protocol as well as tighter restrictions on the sharing of sensitive technologies with countries that have not so far mastered enrichment or reprocessing.

These conditions were initially opposed by Argentina, Brazil, Canada and South Africa. Canada and Argentina have since reportedly fallen into line but Turkey, which is only now embarking on a civil nuclear programme on the basis of cooperation with Russia and South Korea, does not want to be disadvantaged by tougher rules.

China, Pakistan and the NSG

Rather than objecting to what it can't prevent, India should back a nuclear deal for Pakistan structured around a package of non-proliferation commitments...







24 June 2010
The Hindu

China, Pakistan and the NSG

Siddharth Varadarajan

How would Tenzing Norgay and Edmund Hillary have reacted to the news that a 13-year-old boy recently scaled the same peak which they were the first to conquer in 1953? Would they feel a tinge of irritation at how ‘easy' the summit has now become? Perhaps. But I am sure they would not feel their own accomplishment had in any way been diminished.

Having successfully broken the back of international sanctions on its civilian nuclear programme in September 2008, India needs to ask itself how it should look upon Pakistan's desire to follow in its footsteps and access civil nuclear technology for its energy needs. Should it stand in the way and try and block Islamabad from entering base camp as some panicky members of the Indian strategic community advocate? Or should it adopt a more mature attitude and work with its international partners to ensure the orderly incorporation of Pakistan into the global non-proliferation regime?

The question is relevant because China is likely to inform the Nuclear Suppliers Group of its decision to sell two pressurised water reactors (PWRs) for the Chashma-3 and 4 power stations in Pakistan. Virtually, every member of the 46-nation cartel believes this sale would be a violation of guidelines Beijing committed itself to follow when it joined the NSG in May 2004. China, of course, disagrees. India has so far wisely confined itself to asking the Chinese side for information about the proposed transfer. On June 22, Foreign Secretary Nirupama Rao fielded questions from reporters on the subject with a straight bat: “We are monitoring the debate and the developments in this regard as they relate to this subject of supply of nuclear reactors by China to Pakistan,” she said, carefully choosing her words. She did not criticise the proposed transfer or object to it, nor could she have. Three months ago, when asked about the possibility of nuclear cooperation between the U.S. and Pakistan, Prime Minister Manmohan Singh had made it clear India has no locus standi. “Who am I to interfere with what goes on between the United States and Pakistan?” he said. “That's a matter for these two countries to consider.” The same logic should surely apply to what goes on in the civil nuclear field between Beijing and Islamabad.

NSG guidelines say members should sell nuclear equipment and material only to countries that are party to the Nuclear Non-Proliferation Treaty or who accept full-scope safeguards — that is, who agree to place all their nuclear facilities under international inspection. There are only three countries which do not satisfy this criterion: India, Pakistan and Israel. Two years ago, the NSG voted unanimously to exempt India from this restriction. In exchange, India took on a number of commitments. These included separating its civilian and military nuclear facilities and placing the former under International Atomic Energy Agency safeguards. India also undertook to abide by its moratorium on nuclear testing, support international efforts to negotiate a verifiable Fissile Material Cut-off Treaty (FMCT), implement rigorous export control norms and not share enrichment and reprocessing technology with others. Prior to the NSG waiver, India finalised a safeguards agreement with the IAEA providing for indefinite IAEA supervision of its civilian nuclear sector.

Today, the NSG's restrictions no longer apply to India but they do still to Israel and Pakistan. When China became a member of the NSG six years ago, it made a “declaration of existing projects” in order to be able to fulfil supply obligations towards Pakistan that had been made prior to that. China and Pakistan signed agreements for civil nuclear cooperation in 1986 and 1991. The latter agreement has not been made public but two MoUs were signed in its wake for the construction of PWRs for the Chashma-1 and Chashma-2 power stations. China told the NSG that since these projects were ongoing, it would continue to supply fuel and equipment for them. Since it made no mention of Chashma-3 and 4 at the time, their inclusion is clearly an afterthought. If China persists with its export plan, this would arguably be the first time it openly flouts international rules it had voluntarily agreed to abide by. Chinese help for the Pakistani nuclear weapons programme is well known but virtually all of its proliferation activities occurred before it formally acceded to the NPT in 1992. Similarly, China has stuck to its NSG commitments since joining the cartel in 2004. Deviating from them now would raise questions about its willingness to play the role of a “responsible stakeholder” in the international system.

India is not a member of the NSG and will, therefore, not be in the room when the matter is discussed in Christ Church, New Zealand, this week. But it can respond to the new situation that is unfolding in one of three ways. First, it can go into overdrive to lobby NSG members to take on China and make sure there is no dilution of the group's rules prohibiting nuclear commerce with Islamabad. Second, it can remain quiet and do nothing. Third, it can make a virtue out of necessity and suggest the NSG start considering the need to bring Pakistan into the non-proliferation tent.

Of these, the first option is the worst from the strategic and diplomatic perspective. Trying to block something which India is in no position to prevent will exacerbate tensions with Pakistan and China and expose the weak hand the country has on this question. The only circumstance that would justify a blocking strategy is if the proposed Chinese transfer were to alter the strategic balance in the subcontinent. In fact, the supply of two safeguarded civilian power reactors will not make any difference, unlike say a transfer of unsafeguarded nuclear equipment or material or of new delivery systems for nuclear missiles. The binding constraints on the size of Pakistan's nuclear arsenal are the enrichment capacity of Kahuta, the small size (40 MW) of its heavy water reactor at Khushab and the amount of natural uranium it has access to. None of these constraints will be affected by the two new PWRs.

Given the conservatism of Indian diplomacy, the second option of silence is the one most likely to be followed. But this option is also inferior. No country in the world, least of all Pakistan or China, will believe India has no views or concerns on the transfer. Its silence will, thus, likely be seen as an admission of impotence rather than as an expression of statesmanship and wisdom. This option is also inferior because it is not in India's interest that the international non-proliferation system be tinkered with on an ad-hoc basis. The Indian exemption at the NSG may have been pushed by the U.S. but it required the active concurrence of dozens of countries. What emerged from those bruising sessions in Vienna in August and September 2008 was a careful balance of rights and obligations which benefited both the international system and India. China today lacks Washington's hegemonic ability to change the global rules. If it breaks ranks with the NSG and acts unilaterally, the after-effects could be quite destabilising.

India should, therefore, consider the third option of encouraging the international community to discuss the contours of an agreement that would lead to the orderly induction of Pakistan into the global nuclear regime. Given its population and energy needs, Pakistan needs help in developing a diverse energy portfolio. In line with global trends, it is logical that its leaders should look favourably upon nuclear power.

Thanks to its past record in proliferating weapons-related technologies, however, Pakistan will have to do much more to establish its credentials as a responsible partner in the field of nuclear commerce. Any exemption at the NSG would likely involve stricter parameters and wider commitments than were seen in the India case. And if the Indian exemption took three years and two months to fructify, it is reasonable to expect Pakistan's exemption to take twice as long. The benefits of immediate engagement are, nevertheless, overwhelming. Islamabad's opposition to the FMCT — partly triggered by irrational fears about the impact of the Indo-U.S. nuclear agreement on India's ability to produce fissile material — means the Conference on Disarmament has been unable to begin its work on the treaty. If Pakistan knows there is light at the end of the NSG tunnel, its attitude at the CD may change.

Building trust, one step at a time

India should strive for functional cooperation with Pakistan on the Mumbai terror trial. As the ‘front channel' picks up speed, so will the ‘back channel'...

23 June 2010
The Hindu

Building trust, one step at a time

Siddharth Varadarajan

The visits to Islamabad this week by Foreign Secretary Nirupama Rao and Home Minister P. Chidambaram will provide India and Pakistan with the opportunity of erecting the scaffolding for a dialogue process that could eventually allow the two countries to make substantial progress on their core concerns.

India's position on the necessity of dialogue has held steady since the ‘Thimphu thaw' in April, suggesting all relevant political and institutional stakeholders are on board. The foreign secretary's speech to the Afghanistan-India-Pakistan ‘trialogue' on June 13 has added greater clarity and depth, especially on the question of trust-building. Terrorism continues to be the main obstacle but the Indian analysis of the interplay between terror, Pakistan's internal political dynamics and diplomacy is much more nuanced and sophisticated today than it was a year ago.

From the open-ended, maximalist demand of a complete shut down of terrorist infrastructure, the Manmohan Singh government is today looking for incremental progress across a range of vectors. The trial of the Lashkar-e-Taiba men accused by Pakistan of masterminding the November 2008 terrorist attack on Mumbai is the most important of these. But India would also like to see forward movement on humanitarian issues, as well as on the cross-border and cross-Line of Control confidence building measures agreed by the two sides in recent years. Ms Rao's remarkable speech flagged another metric, crucial to the fate of any dialogue process: “We also have to reaffirm the progress made through complex negotiations and dialogue through patient and unsung effort whether in the composite dialogue or back channel diplomacy, during this period.”

It was necessary for the foreign secretary to reiterate this point because neither the civilian government in Pakistan nor the post-Musharraf military establishment has so far shown a willingness to embrace the conceptual headway made by Islamabad and New Delhi between 2004 and 2008 on the Kashmir issue. The Peoples' Party government is perhaps wary of accepting the legacy of a dictator, and General Kayani — who may have silently gritted his teeth when Musharraf pushed his ‘out of the box' formula on Kashmir with his top commanders — thinks he has better cards to play today.

The truth is that there are no other cards. The ‘make borders irrelevant' approach is the only game in town and sooner or later all stakeholders in Pakistan will have to be reconciled to it. While Ms Rao did the right thing by flagging the importance of the back channel, India has to be patient and give the politicians and generals the time and space they need to reinvent the wheel. There is also merit in Pakistani foreign minister Shah Mahmood Qureshi's remark that the back channel cannot make headway if the front channel is stuck. If trust is required to move the front channel again, the amount of trust needed to work the back channel is much greater.

At a recent Track-II meeting of the Pugwash group in Islamabad, Pakistani and Indian analysts and former officials had an animated discussion on terrorism, Afghanistan, water, Kashmir and the nuclear issue. While the two sides disagreed and argued on virtually every subject, the discussions on terrorism produced some clarity. The Pakistani side spoke of the legal difficulties in handling terrorism cases, noting that the high-profile trials of terrorists involved in the bombing of the Marriot hotel in Islamabad and the assassination of the Surgeon-General had unfortunately ended in acquittals. A well-regarded criminal lawyer from Lahore spoke of the difficulties surrounding the trial of the LeT men accused of attacking Mumbai and made a plea for better coordination between the Pakistani and Indian authorities in that case.

The Indian side responded by noting that the fight against terror was only partially a legal one. And that what is needed is a demonstration of political will, something that is lacking in Islamabad's feeble attempts to rein in anti-India terror groups. The Pakistani participants acknowledged this, but argued that their government was weak and couldn't afford to open up too many fronts at the same time. This, too, was disputed by the Indians. At the same time, there was general agreement that the legal case against the 26/11 accused had taken on a significance of its own, that the fragile dialogue process might not survive an acquittal and that, therefore, some coordinated effort needs to put in by both governments to ensure the best possible legal case is mounted against them.

Should meet frequently

In this context, one question Ms Rao and Mr. Chidambaram should seriously examine as they prepare themselves for their visit is whether the endless and somewhat gladiatorial exchange of ‘dossiers' with Pakistan is the most efficient way of going about prosecuting terrorists accused of perpetrating a heinous cross-border crime. Granted, there is a trust deficit. But if, instead of exchanging thick manila envelopes, the officials who work on these dossiers were to meet frequently, this may well provide for more efficient if not effective interaction.

India has bad memories of the short-lived Joint Anti-Terror Mechanism and is not in favour of its revival. But functional cooperation between the investigators who have probed the Mumbai attack case on both sides will help Pakistani prosecutors make a rock solid case against Zaki-ur-Rehman Lakhvi and the other LeT men now standing trial in a Rawalpindi anti-terror court. Depending on how that process works, more structured interaction between India's National Investigation Agency and Pakistan's Federal Investigation Agency should also be considered. This would be one concrete way in which the two sides try to build up a degree of trust.

Second, Pakistan will have to make every possible effort to keep in check provocateurs like Hafiz Saeed of the LeT and tamp down on terrorist infiltration from its territory across the Line of Control.

The third source of building trust is for India and Pakistan to prioritise humanitarian issues, especially the plight of juveniles and fishermen who end up spending a long time in each other's jails for crossing the border illegally because of the absence of proper diplomatic mechanisms. Activating the joint judicial commission to deal with the speedy release and exchange of prisoners who have finished serving their sentences is also an urgent necessity. Deepening existing cross-LoC CBMs, especially those relating to trade, should also be taken up immediately.

Fourth, the two sides should ensure that foreign secretary- and/or joint secretary-level discussions take place every month to resolve pressing concerns. Meetings at the official level must be held regardless of the state of bilateral relations and would be in addition to whatever formal dialogue structure emerges to address issues and disputes over Kashmir, Siachen, water or any other issue.

The goal of the upcoming round of talks as well as those between the two foreign ministers in July should be to prepare for the adoption of a structured, interim engagement process. Later this year, Prime Minister Manmohan Singh will have an opportunity to meet again with his Pakistani counterpart on the sidelines of the U.N. General Assembly in New York in September. If India is gracious enough to invite Yusuf Raza Gilani to attend the opening of the Commonwealth Games in Delhi in October, that would provide another occasion for the two leaders to take stock of the relationship and settle on an appropriate dialogue structure. The problem of getting Pakistan back on track as far as the ‘soft borders' solution to Kashmir is concerned would still remain, of course. One proposal Prime Minister Singh could make at that juncture to demonstrate the benefit of cross-LoC arrangements would be for India and Pakistan to examine whether a single project on the Kishenganga-Jhelum-Neelum with traded electricity might be a better option than building rival hydroelectric projects.

India wary of NSG double blow

Pakistan could get a free pass even as nucloear cartel tightens rules for nuclear transfers to India ...








21 June 2010
The Hindu

India wary of NSG double blow

Siddharth Varadarajan

New Delhi: Two years after being made to jump through a hoop to win an exemption from the Nuclear Suppliers Group's export ban, India is bracing itself for a double blow. At its plenary meeting in New Zealand beginning on Monday, the 46-nation cartel may turn a blind eye to China's plan to supply new reactors to Pakistan, handing Islamabad a free pass. The NSG is also likely to adopt fresh restrictions on the transfer of enrichment and reprocessing (ENR) equipment and technology, thereby diluting New Delhi's hard won ‘clean' waiver.

The NSG members undertake to supply nuclear material and equipment only to countries which let the IAEA monitor all their nuclear facilities. Apart from reasons of safety, the only exception to this rule is if the supply is pursuant to pre-existing commitments.

China joined the NSG in May 2004. In a formal “declaration of existing projects” made at the time, it told the group of its 1991 cooperation agreement with Pakistan under which it had supplied a 300 MWe reactor at Chashma and had just undertaken to supply an additional 325 MWe reactor there. It did not, at the time, speak of ‘grandfathering' any additional reactors under the 1991 agreement.

In recent months, however, the China National Nuclear Corporation has confirmed plans for building two new reactors at Chashma, a move that runs counter to those assurances. The supply would also violate commitments made to the IAEA in 2004 that “China will, once admitted into NSG, act in accordance with [its] guidelines.”

While conceding their “interest and concern” in the matter, Indian officials say it is for NSG members to object to China's proposal and specify the conditions Islamabad must satisfy before being eligible for nuclear commerce. The Chinese side was asked about the proposed transfer during the visit to Beijing of President Pratibha Patil, but official sources denied India had told China not to go ahead with the deal.

On ENR, Hungary, currently chair of the NSG, told India in March that consensus on the new rules was still proving elusive. In the light of the September 2008 waiver, Indian officials had suggested exempting India from the applicability of draft rules banning ENR sales to non-NPT countries. But this proposal has found few takers. And now there are signs the U.S. and others are is pushing for the adoption of the ENR ban during the upcoming New Zealand plenary. The new rules will “very probably be approved,” an NSG diplomatic source told The Hindu on Sunday.

India lobbying hard with nuclear partners on ENR issue

After the shock of L'Aquilla, where the G-8 in 2009 agreed to implement a ban on the sale of enrichment and reprocessing (ENR) equipment and technology to countries like India which do not accept comprehensive international safeguards on their nuclear programme, the Manmohan Singh government has been actively lobbying to protect its position on getting access to sensitive nuclear technologies with individual supplier nations.

In its recent interactions with the Nuclear Suppliers Group ‘troika', India suggested that an asterisk be added to the cartel's draft new rules on ENR transfers exempting the country from the proposed requirement of membership in the Nuclear Non-Proliferation Treaty. It also raised the issue with Russia, France and the United States, countries with which it has signed nuclear cooperation agreements in the wake of the ‘clean' exemption granted to India by the NSG in September 2008.

NSG rules prohibit the sale of nuclear equipment or material to non-NPT signatories. In 2008, the 46-nation group voted unanimously to relax that condition for India in exchange for a range of non-proliferation commitments. But draft rules framed in November 2008 will unilaterally remove ENR sales from the purview of that exemption.

For the past two years, consensus eluded the NSG on the ENR issue because some members states — notably Argentina, Brazil and South Africa — objected to other elements of the new restrictions. These three countries do not support the U.S.-inspired proposal that adherence to the Additional Protocol — a more intrusive form of international monitoring not mandated by the NPT — be a precondition for ENR imports.

But NSG diplomats say the U.S. has had some success in building a consensus over the past few months and that major elements of the ENR ban, including the requirement of NPT membership, could well be adopted during the cartel's plenary in Christ Church this week.

Among India's nuclear partners, only France has given a commitment to provide India ENR equipment. Though the bilateral agreement does not provide for such transfers, Indian officials say President Nicholas Sarkozy gave a verbal assurance to this effect to Prime Minister Manmohan Singh in Paris last year.

[In the print edition of The Hindu, this story was split into two. The url of the second story can be found here.]

India shifts from ‘accusatory' to ‘exploratory' mode

Acknowledging the progress made on the back-channel would be major trust building step ...

21 June 2010
The Hindu

India shifts from ‘accusatory' to ‘exploratory' mode

Siddharth Varadarajan

New Delhi: In the strongest indication to date of India's willingness to pick up the threads of dialogue blown aside by terrorists in 2008, official sources said on Sunday that “a clear signal” from Pakistan of its willingness to build on progress made by the two countries earlier would “be a big trust building step.”

Briefing reporters, official sources said the Manmohan Singh government was looking at next week's meetings between the Foreign Secretaries and Home Ministers of India and Pakistan as a trust building exercise that could allow substantial progress to be made on terrorism and all contentious issues bedevilling the relationship.

They said P. Chidambaram and Nirupama Rao would not be going to Islamabad “in an accusatory mode but an exploratory one.” Ms. Rao will meet with her Pakistani counterpart, Salman Bashir, on June 24, while Mr. Chidambaram, who is travelling to Pakistan for the SAARC Interior Ministers meeting, will sit with Rehman Malik on June 26.

“At the core of our concerns in terrorism, this is very real and has not diminished,” the sources stressed. “But as we have said all along, this is a relationship between neighbours, and dialogue becomes necessary to convey concerns and impress upon the other side where we stand on various issues.”

India remains wary of reports that there could be further attacks on Indian interests in Afghanistan or on Indian soil, emanating from terrorists in Pakistan. Islamabad has a responsibility to ensure these don't take place, the sources said, adding: “You may say the two sides should cooperate to ensure this. But at the level of institutions of government, this is where the lack of trust is a problem.”

Amplifying the bullish account of progress made between 2004 and 2007 in a recent speech by Ms. Rao, the sources said that if the civilian government in Pakistan acknowledged what had been accomplished through the back channel and various CBMs and was ready to take that process forward, this would give big boost to trust building. “We have to see if they are willing to do that.”

The sources said that while Mr. Chidambaram would focus on the action India would like Pakistan to take against the conspirators of the Mumbai terrorist attacks as well as against the wider network of anti-India terror groups, Ms. Rao would look at steps that could be put in place to reduce the trust deficit, “even if they are modest.” These would include humanitarian issues such as the convening of a meeting of the India-Pakistan judicial commission, which deals with prisoners, people to people contact and cross-Line of Control CBMs.

Chidambaram to brief Pakistan about Headley disclosures

Mandate to assess Pakistan's pledge to stop terrorists using its soil against India ...

21 June 2010
The Hindu

Chidambaram to brief Pakistan about Headley disclosures

Siddharth Varadarajan

New Delhi: Union Home Minister P. Chidambaram will travel to Pakistan next week armed with a mandate to brief his counterpart there about some of the information Indian investigators have gleaned from their recent interrogation in Chicago of Lashkar-e-Taiba operative David Coleman Headley.

At its meeting here on Sunday night, the Cabinet Committee on Security (CCS) once again endorsed Prime Minister Manmohan Singh's broad approach towards trust-building and dialogue with Pakistan, highly placed sources told The Hindu. Mr. Chidambaram, who will travel to Pakistan on June 25 for a meeting of Saarc Interior Ministers, will also have a bilateral meeting with the Pakistani Interior Minister Rehman Malik on the sidelines.

“He is not going there to talk about the resumption of dialogue,” the sources said, “but the CCS has asked him to update Mr. Malik on what all has happened in India on the November 2008 Mumbai terrorist attack.” In addition, he will brief the Pakistani side about some of the disclosures Headley has made about his connections with LeT handlers and others, most probably in a one-on-one meeting without the presence of other officials.

The ‘voluminous' documentation India handed over to Pakistan last week contains detailed responses to all the questions which Islamabad had raised in a set of dossiers on April 25, official sources said. In those, Pakistan had made certain requests for information and testimony that it said were required in order to properly prosecute the LeT men standing trial in a Rawalpindi court for their role in the Mumbai attack. “We have sent them all the documentation to do with the confession of Ajmal Kasab, including from the magistrate and investigating officer, and we feel it is not necessary for them to appear in court in Pakistan,” the sources said. “Let us see what their response is.” In its latest dossier, India has also cited specific provisions of the Indian Penal Code that it believes LeT chief Hafiz Saeed has violated, including waging war.

Based on Mr. Chidambaram's interaction with the Pakistani side, the government would be in a better position to assess how sincere Islamabad is being in implementing the commitment Prime Minister Yusuf Raza Gilani made to Dr. Singh in Thimphu in April about not allowing anti-India terrorists to use Pakistan's soil to stage attacks, the sources said.

Asked whether some kind of interaction between the National Investigation Agency and Pakistan's Federal Investigation Agency could help build trust, the sources said the response Mr. Chidambaram got “would help us to focus on what steps we could take to build trust at the institutional level.” What India wanted was “productive engagement,” something that was absent from the erstwhile Joint Anti-Terror Mechanism, they added.

The sources said the Indian side was not going to Pakistan “with a digital scale in [its hand].” “We are genuine when we say dialogue should resume and concerns on terror should be dealt with … Let us not prejudge the outcome.”

Open mind

Asked about Kashmir, the sources said India had an open mind and was “fully prepared to discuss contentious issues if Pakistan raises them, with confidence.” They stressed that all issues fell within the scope of the Foreign Secretary-level discussions that would take place on June 24. “Whether it is water, peace and security, confidence building measures … We are looking at the whole relationship as an integrated subject.”

Putting victims at the centre of liability law

The Nuclear Liability Bill needs to be amended to ensure adequate compensation in the event of an accident.




18 June 2010
The Hindu

Putting victims at the centre of liability law

Siddharth Varadarajan

The Civil Liability for Nuclear Damage Bill 2010 is currently being reviewed by the Parliamentary Standing Committee on Science & Technology, Environment & Forests. There are several clauses and concepts that need to be amended to ensure the legislation meets its intended purpose.

1. The “maximum amount of liability in respect of each nuclear incident” is fixed at 300 million Special Drawing Rights, approximately Rs 2,050 crore. This figure is too low and can't possibly cover the kind of nuclear damage a major incident would cause to human life, property and the environment. Since the government wants to accede to the IAEA's Convention on Supplementary Compensation (CSC), 300 million SDRs has been chosen as national cap so as to receive compensation from countries that are parties to the CSC beyond that. One assumes the government will have to provide compensation above whatever limited sums come from the CSC. Some explicit commitment to this effect, therefore, is essential.

It is worth noting that the CSC will only enter into force if a country with a major nuclear programme like Japan accedes. That is unlikely to happen soon. If every country in the world joins the CSC, a maximum of 300 million SDRs would be available. But since the CSC will never attract universal adherence, the best a member state can hope to receive is around 50 million SDRs. Either way, these are not substantial sums. Thus, the Bill must be amended to allow for a proper level of compensation, well beyond the Rs. 2,050 crore “maximum amount of liability”. Since the CSC says the compensation amount a signatory specifies prohibits discrimination between national and cross-border victims of a nuclear accident, some national cap may be necessary. But legal language is needed to assure the people that the government will compensate them fully in the event of an accident.

2. Like the national cap, the liability of nuclear operators is also capped too low at Rs. 500 crore for each incident. The bill says the government shall be liable for nuclear damage exceeding that amount. Two amendments are needed to protect public interest. First, the law must clarify that the cap applies only to public sector operators. Second, the Rs. 500 crore cap is low even for a public sector operator and creates a double social cost. The fact that the operator is not forced to internalise the cost of damages he may cause will lead to the under-provisioning of safety. And, to the extent to which the operator cap is a subsidy towards the true cost of nuclear power, this would lead to the over-optimal share of nuclear power in India's energy mix. Depending on the extent to which society wishes to subsidise nuclear energy, the operator cap should be set at some point between Rs. 500 crore and Rs. 2,050 crore. The higher figure would be more in keeping with enlightened liability regimes in other countries.

Some argue that raising the operator limit will increase insurance costs. But nuclear plants around the world take out property insurance for sums several times higher than their accident liability and this does not affect the viability of nuclear power. Insurance premia, in any case, represent a very small fraction of the total cost of a nuclear plant worldwide.

3. The operator's right of recourse against suppliers under 17(b) should be preserved and perhaps strengthened to include defective equipment and design flaws. India should leverage its mammoth imports to get the supplier to accept a measure of liability in the commercial contract itself. Moreover, the right of recourse must be for the total damage caused by the supplier's negligence and not be limited to the operator's liability cap.

Since 17(b) deviates from the right of recourse envisaged by the CSC, India may have to enter a reservation if it accedes to the convention. Alternatively, it can adopt the liability bill but stay outside the convention like South Korea, which faces no impediment in doing business with U.S. suppliers. Not signing the CSC will also preserve the right of Indian victims to approach the courts of the country to which a nuclear supplier belongs in the event of an accident involving their negligence.

4. The bill extinguishes claims for compensation for nuclear damage made more than ten years after an incident. This limit is unconscionable. There is no reason why Indian law should impose such a limit for injuries to humans, especially when the Vienna and Paris conventions on nuclear liability allow a 30 year claim period. In Bhopal, many illnesses are manifesting themselves years after the original incident, and affecting subsequent generations. Physical damage may also require more time to assess. Twenty-five years after the Bhopal disaster, there is still uncertainty about liability for plant remediation. Certainly no claim was brought against Carbide on the question of site clean up within 10 years.

5. It is unsettling that the bill leaves the assessment of damages and claims for a nuclear accident to an executive rather than judicial body. While there is no reason to assume judges will be more sympathetic to nuclear victims than bureaucrats, the prohibition of judicial oversight embodied in clauses 16 and 35 cannot be justified. These will have to be amended or deleted, especially in order to end the ambiguity about the victim's right to file tort claims.

6. Ironically, nearly half the bill's clauses deal with the service rules etc of the officers who will process compensation claims rather than victim rights. As far as the composition of Nuclear Damage Claims Commission, it is shocking that more attention is paid to the bureaucratic qualifications of commissioners rather than their knowledge or competence to assess damage claims. In line with the complete exclusion of the health ministry and health professionals from the drafting process, the bill envisages no role for health and environment experts. Amendments are needed to remedy this.

7. Clause 46 says the Act's provisions “shall be in addition to, and not in derogation of, any other law for the time being in force” and that the operator will not be exempted “from any proceedings which might, apart from this act, be instituted against [him]”. According to officials, the stated intent of this clause is to preserve the victims' right to file tort claims. It also raises the possibility of criminal liability in the event of negligence on the part of the operator or, presumably, the supplier. But Indian tort law is poorly developed. As for criminal prosecutions, nothing more needs to be said in the light of Bhopal. Thus, for this clause to have any meaning, it must be accompanied by clauses that would facilitate tort claims.

The law ministry should also be asked to clarify what the intent behind mentioning only the “operator” in this clause is. Is it to simplify the filing of victim claims by channelling fault-liability on to the operator leaving him to recover damages from suppliers via his right of recourse? If so, does this mean tort claims cannot be filed against anyone other than the operator? Given the unhappiness over the Bhopal settlement of $470 million – the Centre, in a sense, channelled the claims of victims through itself but sold them cheap — the Standing Committee must ensure the nuclear bill does not dilute the victims' right to file tort claims against any party in the event of an accident.

Turn the nuclear bill from liability to asset

The legislative challenge is to ensure that Indian victims get the same degree of protection from Indian courts as U.S. victims would from their courts...







16 June 2010
The Hindu

Turn the nuclear bill from liability to asset

Siddharth Varadarajan

As one of only two countries to run a nuclear power programme without any statute dealing with the possibility of an accident — the other is Pakistan — India has done well to finally recognise the importance of enacting a liability law. With ambitious plans for 20,000 MWe of nuclear power generation capacity on the anvil, liability legislation, especially if it helps internalise the risks associated with this expansion, can lower the probability of accidents. A good law would also ensure speedy and adequate compensation to victims.

The shabby manner in which the Indian system has dealt with the Bhopal disaster is a reminder of the need to place the victim at the centre of legislative action. Unfortunately, the international framework for nuclear liability is designed to favour nuclear suppliers. Despite this constraint, the Manmohan Singh government has managed to frame a law with some positive features. It includes two provisions that are not to the liking of the U.S., which wants to grab a share of the huge Indian market without accepting liability for any accident its products may cause. At the same time, the bill has some definite weaknesses.

The international regime on civil nuclear liability suffers from a serious flaw. By excluding the supplier, channelling liability for a nuclear accident to the operator and capping this liability, it leads to underinvestment in safety. This is because potential tort-feasors optimise their behaviour on the basis of artificially low damages they would have to pay in case things go wrong.

As Michael Faure and Karine Fiore have argued, any legal regime governing civil liability must aim to push the industry towards the prevention of accidents. “A basic notion is that the injurer should be fully exposed to damage costs in order to provide him with the necessary incentives for prevention” (“An economic analysis of the nuclear liability subsidy,” Pace Environmental Law Review, 2009). As a corollary, all those who can contribute to accident risk should be forced to internalise the costs of the damage they might cause. If all treaties on nuclear liability — including the Convention on Supplementary Compensation to which India is planning to accede — stand the economics of torts on their head, this is because of the nuclear suppliers' lobby. Right from the 1950s, when nuclear power was in its infancy, down to today, U.S. contractors have contended they cannot do business abroad if there is a danger of being exposed to law suits.

Under U.S. influence, international conventions dealing with nuclear liability have thus embodied three concepts of dubious merit from the efficiency perspective. First, legal channelling of liability for accidents to foreign operators, second, giving operators an extremely limited right of recourse against suppliers in the event of an accident and, third, setting aside ordinary tort law and disallowing fault-based claims by victims against operator or supplier.

All of this was done in the name of speedy compensation for victims since the quid pro quo of channelling was the rule of ‘strict liability' under which the operator is liable even if he is not at fault. Victims benefit from this rule since there is no ambiguity about who must pay. But as Tom Vanden Borre has argued, channelling was “not introduced to protect the victims of nuclear accidents, nor to reduce the insurance costs, but to protect the American nuclear industry.” The irony is that even as it has pushed the regime of legal channelling on the rest of the world, the U.S. system of economic channelling of liability allows tort claims as well as an unrestricted right of recourse for the operator. That is how, for example, Metropolitan Edison, the operator of the Three Mile Island reactor, sued its supplier, Babcock & Wilcox, after the 1979 accident.

Supplementing these layers of protection for nuclear suppliers is a fourth: legal jurisdiction belongs to the courts of the country where the accident takes place. Bhopal, where Indian victims approached a U.S. court, is the ghost that looms large. “While ultimately the court declined to take jurisdiction”, Ben McCrae, legal counsel for the U.S. Department of Energy, notes, “this was not because it doubted its capacity to do so: it basically waited to ensure that there was an adequate remedy available in India.”

In the wake of the Indo-U.S. nuclear agreement, therefore, getting India to accede to the CSC has been Washington's priority. That would effectively bar Indian victims from approaching an American court in the event of an accident involving a U.S.-supplied reactor. Of course, this in itself cannot be an argument against India adopting a liability law. Rather, the challenge is to embed nuclear liability in a set of legal and administrative measures that can ensure the payment of speedy and adequate compensation to victims as well as force everyone in the nuclear business — suppliers and operators — to internalise the costs of an accident. Indeed, the legislative challenge is to ensure that Indian victims get the same degree of protection from Indian courts as U.S. victims would from their courts.

In a recent article, Evelyne Ameye has confronted the flawed logic of channelling, making a safety-cum-engineering argument in favour of suppliers remaining liable for accidents their products may cause. (“Channelling of nuclear third party liability towards the operator,” European Energy and Environmental Law Review, 2010). This can be done in two ways. Liability for an accident can still be channelled on to the operator but his right of recourse in the event of supplier negligence is left unrestricted. The Russian Federal Act on Atomic Energy, for example, does not impose a limit upon the operator's right of recourse. (Alexander Matveev, “The Russian approach to nuclear liability,” International Journal of Nuclear Law, 2006). South Korea's liability legislation also allows operators to recover damages from suppliers in the event of negligence. A second way would be to allow victims to sue suppliers for fault-liability under tort law so as to win damages over and above what the operator pays through strict liability. Thus Germany, a party to the Paris Convention on nuclear liability, entered a reservation stressing its right, under national law, to hold persons other than the operator liable for nuclear damage. Besides, several conventions on environmental damage — such as the 2003 Kiev Protocol on industrial accidents in transboundary waters — now explicitly provide for strict as well as fault-liability to run side by side.

Ameye argues that channelling can no longer be justified on the grounds of nuclear power being an infant industry. Nor is it healthy to exclude suppliers from the liability chain when nuclear technology is rapidly evolving. “Given the increasingly complex designs of the new generations of nuclear power plants, it is… both legally and realistically incorrect to maintain the heavy burden of legal channelling upon the nuclear plant's operator … To the extent that design knowledge becomes more hermetic, it will be hard to sustain the operator's liability for risks he is not aware of or, even worse, for risks he cannot perceive”. This is especially so when all major nuclear accidents in the past — Windscale, Three Mile Island and Chernobyl — have occurred, in part, because of design flaws.

Turning to the Indian bill, the inclusion of strict liability is a positive feature. The bill also legally channels this liability to the operator, thus eliminating any ambiguity about who must pay. On the positive side, too, is the additional 300 million SDRs (approximately Rs. 2050 crore) Indian victims would be entitled to from pooled contributions by state parties to the CSC, as and when it enters into force.

On the negative side is the cap placed on the operator's no-fault liability. The bill sets this at Rs. 500 crore, a figure that is low by international standards and by the requirement of safety incentivisation. In case the operator is private — a key qualification since the bill is not limited to public operators — this cap amounts to a subsidy as the government will assume liability for damages up to a maximum of 300 million SDRs. Private operators must not get such a benefit. Even if the operator is a public entity, the liability cap will distort the true cost of running a reactor and lead to a higher than optimal share of nuclear power in India's energy mix.

Where the original Indian bill is innovative is in allowing operators a right of recourse against suppliers in the event of gross negligence (Section 17(b)). Also, the bill would appear to allow victims to sue for fault-liability, though the ambiguous wording of Section 46 leaves unclear whether tort claims can be pressed against only the operator or any other person whose negligence leads to an accident.

Since both provisions undermine the principle of channelling, U.S. suppliers want them deleted. Not only must that pressure be resisted but steps should be taken to clarify their provisions.

Also, in the light of Bhopal, it is cold comfort to be told that victims can use existing laws to pursue compensation. As the Merlin case in England showed, courts can treat tort claims for nuclear damage with scepticism. In India, where the law of the torts is not well developed, it is essential that the nuclear liability bill provide mechanisms to allow victims to effectively press their case.

Government dilutes nuclear bill under U.S. pressure

Foreign suppliers to be let off even if accident caused by their gross negligence ...









10 June 2010
The Hindu

Government dilutes nuclear bill under U.S. pressure

Siddharth Varadarajan

New Delhi: At Washington's request, the Manmohan Singh government has agreed to delete a key provision of the draft civil nuclear liability bill allowing American suppliers to be sued for recovery of damages in the event of an accident caused by gross negligence on their part.

Although the bill channels all liability for a nuclear accident on to the operator of the facility, Section 17 of the draft tabled in Parliament last month allows the operator a ‘right of recourse' — legalese for the right to recover any compensation it is forced to pay — under three circumstances. These are if (a) such a right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted from the wilful act or gross negligence on the part of the supplier of the material, equipment, or of his employee, and (c) the nuclear incident has resulted from the act of commission or omission of a person done with intent to cause nuclear damage.

Of these, only (a) and (c) find mention in the model law specified by the Convention on Supplementary Compensation for Nuclear Damage (CSC). The CSC, which India will accede to, however, does not prohibit the inclusion of additional provisions. Indeed, some countries have already included gross negligence by suppliers as grounds for invoking the right of recourse in their liability laws. Article 4 of the South Korean Act on Compensation for Nuclear Damage, for example, includes language similar to 17(b) of the Indian draft.

When the Indian bill's provisions were made public, senior officials took pride in the inclusion of 17(b), which they said was needed to deter suppliers from being negligent taking their safety obligations lightly; 17(a) alone was inadequate, they said, since no supplier agreed to accept liability of negligence in a contract. But pressure from Washington seems to have prompted a rethink.

On March 8 and April 1, The Hindu had reported how the U.S. nuclear industry was upset with 17(b) and wanted it deleted for fear it would “open the door to more lawsuits.” The government has now obliged the American side by getting rid of this sub-clause entirely.

Window for action

The only window for legal action against a supplier of faulty or unsafe equipment is now Section 46 of the nuclear bill, which says the Act's provisions “shall be in addition to, and not in derogation of, any other law for the time being in force.” This, say Indian officials, will allow the filing of tort claims and even criminal charges in case a nuclear accident is caused by negligence on the part of the nuclear operator or its equipment suppliers.

But the draft bill contains no provisions to make the filing and pursuit of these claims or charges easier, raising the prospect of lengthy and eventually fruitless litigation of the sort the victims of the Bhopal gas disaster have had to endure for 25 years.

This is not zero tolerance, Mr. Prime Minister

The Central government's professed commitment to human rights is worth nothing so long as it won't allow the soldiers indicted for murdering innocent civilians in Kashmir to be prosecuted for their crimes...

4 June 2010
The Hindu

This is not zero tolerance, Mr. Prime Minister

Siddharth Varadarajan

I asked Prime Minister Manmohan Singh an unfair question during his big press conference last month. How could he speak of zero tolerance for human rights violations in Kashmir when his government would not allow the prosecution of army officers and jawans charge-sheeted by the Central Bureau of Investigation for the murder of five innocent civilians at Pathribal in Kashmir in 2000? The question was unfair because there was no reason to expect India's chief executive to be aware of the status of an individual case, no matter how gruesome. Or to know why one branch of his government had made out a case for murder against a group of soldiers only to have another branch, the Ministry of Defence, do its utmost to ensure that the indicted men never stand trial.

Like many other questions that day, therefore, mine also went unanswered. I wasn't surprised or disappointed because the reason I asked it was to extract a commitment from the Prime Minister. You see, 10 years ago, I visited a woman named Raja Begum in Anantnag. She was the mother of Zahoor Dalal, one of the five men murdered in Pathribal. Throughout the time I spent in her house, she wept quietly in one corner and didn't say a word. All the talking was done by another relative. As I left, I made one last attempt, asking her whether there was anything she wanted to tell the people of the country. “Zahoor can't come back but those who did this should be punished before my eyes,” she replied. “Why did they pick up an innocent man and murder him? If there is a government, if there is justice, the people who did this must be punished.”

I wrote about Pathribal and its aftermath countless times but wanted to make another push for justice in this case. My question to Dr. Singh, then, was really Raja Begum's, the partial discharge of a debt journalists accumulate as they run from story to story. And as expected, the Prime Minister promised to look into the matter. I have no idea what enquiries or exertions he has made on the case since then but the facts themselves are quite simple. And, in the context of the recent exposé of fake encounters in Machhil in Kupwara, they reveal a pattern of impunity that ordinary Kashmiris will be condemned to endure until India gets a Prime Minister brave enough to put a stop to it.

A group of terrorists, most probably from the Lashkar-e-Taiba, arrived at the Chattisinghpora village in Anantnag district in the dead of night on March 20, 2000. They made all the Sikh men assemble and gunned them down in cold blood. Five days later, L.K. Advani, who was Union Home Minister at the time, told a nation still recovering from shock that the heinous crime had been solved with the killing of five “foreign militants.” In an FIR filed on March 25, officers from the Rashtriya Rifles and the Special Operations Group of the State police said they had managed to corner and kill the five terrorists in a fierce encounter at Pathribal-Panchalthan. The bodies of the men, which had been burned beyond recognition, were buried in a common grave.

Unfortunately for the army, the five men killed were not terrorists or foreign nationals. They were civilians who had been picked up in and around Anantnag on March 24. Apart from young Zahoor, the others named were Bashir Ahmad Bhat, Mohammed Malik, Juma Khan and Juma Khan. Such was the randomness of the operation that it had actually netted two men of the same name from different villages. As the families of the five men searched frantically for their missing relatives, suspicions grew that the “terrorists” buried in the common grave may not be whom the authorities claimed them to be. Protests were held demanding exhumation of the bodies. The demand was rejected, leading to an ugly incident in Brakpora on April 3 where the Central Reserve Police Force opened fire on unarmed protesters, killing nine.

The bodies were eventually exhumed and positively identified by the families of the five missing men. But the government baulked at the implications and insisted on DNA matching. Blood samples were collected, which all turned negative. This was because the police and local doctors, acting on whose instructions it is still not known, switched the samples. When the tampering was exposed in March 2002, fresh samples were collected which conclusively established that the five “terrorists” killed in that so-called joint operation by the Rashtriya Rifles and the police on May 25, 2000 were none other than Zahoor and the others who had been abducted by the security forces the night before.

The State government then ordered a CBI investigation into the killings. The agency took four years to come to the conclusion that the five men had indeed been murdered. It filed a charge-sheet in the court of the Chief Judicial Magistrate, Srinagar, against Brigadier Ajay Saxena, Lt. Col. Brijendra Pratap Singh, Major Sourabh Sharma, Major Amit Saxena and Subedar I Khan of 7th Rashtriya Rifles, accusing them of murder under Section 302 of the Ranbir Penal Code. That was in July 2006. Four years on, the trial has yet to begin.

With the full backing of the Army brass, the Ministry of Defence and the Government of India, the five soldiers challenged their indictment on the grounds that the government had not granted sanction to prosecute them. The CBI took the view that the requirement of prior sanction mentioned in Section 7 of the Armed Forces (Jammu & Kashmir) Special Powers Act 1990 was only for protection of persons acting in good faith and that abducting and murdering innocent civilians could by no stretch of imagination be considered something “done or purported to be done in exercise of the powers conferred by this Act.” The Principal District and Sessions judge in Srinagar before whom the case was committed offered the Army the option of trying the soldiers in a court martial. But the Army refused, and the matter went to the High Court which ruled in favour of the CBI in July 2007 that prior sanction was not required. At this stage, the Army (represented by the General Officer Commanding, 15th Corps) moved the Supreme Court, which admitted the appeal in September 2007 and stayed further proceedings before the trial court. Since then, the matter has not moved at all. For some reason, notice to the Jammu and Kashmir government, listed as a co-respondent to the CBI in the GOC's petition, was only served in December 2009.

If the Central government was really serious about ensuring justice, it could have done one of two things at any stage after 2006. It could have granted sanction to prosecute the five army men, ending the legal wrangling over the CBI's indictment there and then. Or it could have gone along with the CBI's rational argument that the protections contained in the Armed Forces Act (and indeed in Section 197 of the Criminal Procedure Code) cannot be extended to cover blatant criminal acts like the murder of innocent civilians. But, no, none of this was done, for the promise of “zero tolerance” of human rights violations is just an empty slogan.

If the Prime Minister feels I am being unfair, let him end the sickening litigation that is preventing Raja Begum and countless other mothers and fathers and sons and daughters of people wrongly killed by the security forces from getting justice. But ending impunity is not just about righting the wrongs of the past. It is also about deterring future criminals. If the men responsible for murdering Zahoor Dalal and four others at Panchalthan had been tried, convicted and punished, I am certain the soldiers who kidnapped and murdered three young Kashmiri men in Kupwara on April 29 in order to claim cash rewards for bravely killing three “terrorists” would not have so easily done what they did. A case against the army officers has now been filed but if Pathribal is any guide, that too will not go anywhere.

The Prime Minister is going to Kashmir next week. When he is asked questions about these cases, he will have to do more than simply promise to look into them.