18 September 2008

Senate 'testimoney' on the 123 Agreement

The Senate Foreign Relations Committee on September 18 held a hearing on the 'Agreement for Peaceful Nuclear Cooperation with India', a.k.a. the 123 Agreement.

So far, the "money quote" from these hearings is, quite literally, this statement by Under Secretary for Political Affairs William Burns:
"The Indian government has provided the United States with a strong Letter of Intent, stating its intention to purchase reactors with at least 10,000 Mega Watts (MWe) worth of new power generation capacity from U.S. firms. India has committed to devote at least two sites to U.S. firms."
This is indeed quite hefty bait, something GoI has never spoken about.

Also, Senator Richard Lugar warned of the possibility of amendments:
Given the need to waive most of the 30-day consultation period, a simple, privileged resolution is unavailable to us. Amendments will be in order, and there is no guarantee of a vote on final passage.
I'll post again later on the Q & A when it becomes available, though a wire service report tells us:
On the question of fuel assurances, Burns, making a distinction between ‘political commitment’ and ‘legally binding’, said the implementing 123 agreement provided a legal framework for it, but does not compel the US to do that.

‘It’s not an enabling legislation as we could not compel US firms,’ he said. Another reason for making the distinction was that the president of the day would have to look at the circumstances and take a decision keeping US interests in mind.

‘What we have agreed to do is to help should there be a market disruption or other reasons beyond India’s control,’ said Rood.

But would the US still be compelled to get India fuel from other countries in case the president determines that India’s actions warrant a termination of the deal, persisted Dodd.

‘It would be inconsistent to terminate and then arrange alternative fuel supplies,’ said Rood.

[Update @ 1455 IST: PTI's Sridhar Krishnaswami has an excellent and detailed account of the Q&A up and running]

There'll be more, but in the mean time, the prepared remarks of Lugar, Burns and Acting Under Secretary for Nonproliferation John Rood give some indication of the issues coming up ...

The hearing was chaired by Senator Chris Dodd in Joseph Biden's absence. Lugar made an opening statement, raising four questions:
First, Indian leaders claim that the United States has agreed that India can test its nuclear weapons and obtain stocks of nuclear fuel to guard against sanctions... The President’s Message to the Congress transmitting the proposed agreement states that any provisions in the agreement are political commitments and not legally binding. Which explanation is factual, and how do these conflicting statements effect the operation and implementation of the agreement?

Second, is the agreement fully consistent with U.S. laws that would require termination of the proposed agreement and cessation of nuclear exports to India if it detonates a nuclear explosive device or proliferates nuclear technology?

Third, are the terms of the proposed agreement regarding fuel supply from the United States to India, or supply of fuel from third countries to India, or the creation of a strategic reserve of such fuel in India consistent with the intent of the Hyde Act? How would the agreement work in cases in which the United States decides to terminate fuel supply to India or demands the return of nuclear material and equipment to the United States in response to an Indian violation of the 123 agreement or its new safeguards agreement with the IAEA?

Fourth, to what extent has the United States created a new kind of 123 agreement and model for international nuclear cooperation that may benefit additional countries that have not accepted the NPT and that do not have a comprehensive safeguards agreement with the IAEA?
In their testimony, neither Burns nor Rood tried directly to answer these questions.

Rood's statement was remarkably opaque and non-informative, merely repeating what the administration has been saying for the past two years and taking care to say nothing that could provoke either India or the nonproliferation lobby.

He made one substantive point, however. The NSG waiver was "fully consistent" with the Hyde Act. How so? Because:
The same Indian nonproliferation commitments made in the July 2005 Joint Statement between President Bush and Prime Minister Singh, which were also incorporated in the Hyde Act, are included in the NSG statement. In fact, the NSG explicitly granted the exception based on these commitments and actions by India.
This is a correct and clever answer. India has no problems with those parts of Hyde which draw on its July 2005 commitments. [Hyde, in fact, went a bit further in some respects (eg. it asked the President to determine that India was supporting international efforts to limit the spread of ENR technology to states "which do not already have full-scale, functioning plants"; India's commitment in July 2005 did not include this specific reference to full-scale, functioning plants, something that might rule out future Indian cooperation with countries like South Africa, Brazil, Argentina and Canada which have ENR technology but no operational plants (although Brazil has Resende). Accordingly, the NSG waiver makes no such demand.] But India has a problem with other provisions of Hyde, none of which made it in to the NSG waiver such as restrictions on the quantum of fuel supply, ban on ENR, automatic termination of supply in case of a nuclear test.
As for termination of supply at the NSG level, Rood argues that
India’s voluntary, unilateral moratorium on nuclear testing is important. We have been very clear on this subject with the Indian Government. Just as India has maintained its sovereign right to conduct a test, so too have we maintained our right to take action in response. As Secretary Rice said before this committee in April 2006, “We've been very clear with the Indians…should India test, as it has agreed not to do, or should India in any way violate the IAEA safeguards agreements to which it would be adhering, the deal, from our point of view, would at that point be off.” In the 123 Agreement, for example, either Party has the right to terminate the agreement and seek the return of any transferred materials and technology if it determines that circumstances demand such action. Likewise, the NSG exception permits any Participating Government, including the United States, to request a meeting of the Group to consider actions if “circumstances have arisen which require consultations.” (emphasis added)
Again, technically correct, except there is no automaticity. A fresh meeting, and fresh consensus on termination would be needed. The U.S. could and would try and ram things through again. But other powers like Russia would have a veto.

Burns's statement was interesting for putting MW numbers on to the Indo-U.S. nuclear agreement for the first time, 10,000 of them. He also said another thing the Indians have tended to remain silent about:
India also has committed to adhere to the Convention on Supplementary Compensation for Nuclear Damage. Adherence to this international liability regime by the Indian government is an important step in ensuring U.S. nuclear firms are competing on a level playing field with other international competitors.
This has been a bugbear for GE and Westinghouse because, as private (i.e. nonstate) entities unlike Rosatom or Areva, they are leery of building new reactors anywhere in the world without their future liabilities from any accident being limited in advance (What this will do for public opinion in the "two sites" the GoI has promised American nuclear companies is another matter...)

The bottom line from Burns is that any delay in approving the 123 Agreement will only hurt the United States:
Without approval and implementation of the 123 Agreement, however, U.S. nuclear firms will be precluded from competing in this important new global market. Reflective of our new relationship with India, the Indian government has publicly stated its intention to work with U.S. nuclear firms. But international competition will, inevitably, be intense and we want to avoid exposing U.S. firms to any unnecessary delays.
And, he says, don't forget the other payoffs:
Mr. Chairman, we believe that moving forward on the U.S.-India Civil Nuclear Cooperation Initiative also will help advance other areas in the U.S.-India relationship. It will facilitate and expand on-going cooperation in agriculture, science and technology, defense, and joint democracy endeavors.
I'm sure many in India will not like the sound of that, especially the last two of these "endeavors".


Anonymous said...

well,this is plausible in India Link :)
But, Can it be really this bad?

Anonymous said...

Are you sure of the money quote you are using? I can't recollect hearing it in the webcast.

Sid said...

Everything is plausible, anonymous, but the Albright-Kimball allegations reported in the Washington Post and elsewhere are rubbish.

I understand DAE or some other branch of GOI will be coming up with a rebuttal.

But off the top of my head, I doubt the TBP bit of the story completely because India has been producing the stuff locally (at Talcher) since 2002-3.

Sid said...

@ anonymous

It's there in the prepared testimony on the SFRC website. Just click on the hyperlink and you go to the PDF.

Shivanand Kanavi said...

Whether it is NPCIL or Tatas, Ruias and Ambanis buying up reactors one can forget that they will overpay one cent. In fact so far they have proven to be very tough negotiators in all their projects be it Koodunkulam, Tata Steel, Reliance petrochemicals and refineries or Essar ships/tankers etc. Their capex has been much lower than their global peers. So 10,000 MW and 27,000 American jobs...sure if the price is right.. otherwise it is good old Yankee salesmanship.
As far as assured Uranium supplies are concerned just as US, France, Russia and Britain have "Friendly/dependent/former colonies" to rely on, India too would start looking for a "dependable supplier" or a neo-colony.....

Shivanand Kanavi said...

Thank you Barbara.
Check this report out of goings on in the senate hearings:

Lawmakers question India's non-proliferation track record

Aziz Haniffa

September 19, 2008 12:26 IST

Senator Barbara Boxer, California Democrat, was quick to seize on a report published Thursday in the Washington Post alleging that sensitive nuclear blueprints were leaked by an Indian government agency to question India's record of an impeccable non-proliferation track record and to signal her opposition to the ratification of the 123 Agreement by Congress.

At a hearing by the powerful Senate Foreign Relations Committee, Boxer, who voted against the enabling legislation, known as the Hyde Act in 2006 to help facilitate the US-India civilian nuclear deal, said, "I have the best Indian American community in the country -- probably the largest -- and I admire them and I hear from them and they want me to be on the side of this agreement."

She said, "I want our relations to thrive and prosper, but I also feel that it is in everybody's interest, including India's, including the people who live there and people all over the world," not to let this agreement go forward.

Boxer said, "When you see this blueprint, which would be secret in any other Western country, being printed and has to do with making centrifuges, sold for 10 bucks it's a little alarming."

David Albright, an erstwhile UN weapons inspector, who heads the Institute for Science and International Security, a Washington-based non-profit organisation that monitors proliferation activities worldwide, said Indian blueprints were available for a nominal bidding fee and that he had obtained the drawings for about $10 to prove a point.

Boxer slammed Acting Under Secretary of State for Arms Control and International Security John Rood for saying that while the Administration takes 'this very seriously, there are no perfect systems, including our own,' and that American firms had also been in violation of such exports.

She alleged that Rood's blase remark that seemed to imply that 'Oh, well, US companies do it all the time', was proof that the Administration was not taking this matter seriously and thundered that "this isn't a company -- this particular (violation) was done by India's Department of Atomic Energy, so it's part of the government."

Boxer also said that she would support the agreement if it requires that India gives up its military-to-military contacts with Teheran.

Ridiculing the Administration's contention that it trusts India, she said, 'Ronald Reagan used to say, trust but verify,' and told Under Secretary of State for Political Affairs, William Burns, who was testifying along with Rood that 'since you are trying to rush this through and waive the time requirement, I hope members of the Senate on both sides of the aisle would perhaps put a couple of more principles into this agreement, which would make us feel a lot better. Trust but verify!"

Another critic of the deal, Senator Russ Feingold, Wisconsin Democrat, who also voted against the enabling legislation in 2006, said, "After reviewing this unprecedented deal, including once again the supporting classified documents -- which I recommend all my colleagues take a look at -- and after discussing this agreement with senior Indian government officials in a recent trip to India, I am still concerned that this deal seriously undermines non-proliferation efforts and would contribute to an arms race with global implications."

"Congress now has a choice," he said, adding, "Approve this deal in its current flawed form or require the Administration to seek non-proliferation standards to try to ensure we don't undermine the non-proliferation laws that we all know we have meticulously put together over the last 30 years."

Feingold said his 'main concern is that this agreement could indirectly benefit India's nuclear weapons program and potentially contribute to an arms race in the region'.

Burns had said that Indians had assured the US that they have no intention to significantly increase their nuclear arsenal but what they have an intention to do is to increase their civilian nuclear program to alleviate their pressing energy needs.

But he pointed out that 'with or without this initiative, India clearly has the ability to sustain a nuclear arsenal and expand it over time. Our judgment is that by taking this step, we are creating a greater incentive for civil nuclear energy by vastly increase their range of facilities, materials, and in a sense making a positive contribution with the Indians to non-proliferation."

However, Burns acknowledged that 'there is no perfect guarantee', when Feingold reminded him that India made similar assurances over 30 years ago, but still went ahead and tested a weapon in 1974.

Meanwhile, Rood assured Feingold that IAEA safeguards would have to be in place in India's facilities that were included under the separation plan before licenses were approved for American firms to export nuclear reactors and other technology to India.

Anonymous said...

I think the money quote is being misread. My interpretation is GOI said 10,000MW of imports is open for competition to US firms. It is not a commitment and is no different from what GOI has been saying all along.


Sid said...

@ Siva

Look at the Burns quote again: "The Indian government has provided the United States with a strong Letter of Intent, stating its intention to purchase reactors with at least 10,000 Mega Watts (MWe) worth of new power generation capacity from U.S. firms. India has committed to devote at least two sites to U.S. firms."

So which part of "from U.S. firms" is not clear enough?! He may be misquoting the GoI LoI but his quote is quite clear... IMHO

Anonymous said...

Is this the same controversy abt ads that appeared in 2006 in Nature(subscription required)
Graphic details: Are adverts revealing nuclear secrets?
If so why did it take 5yrs for the Albright-Kimball to raise hue and cry and for the US admin to act upon ? Note hyde act was passed after this article appeared. Maybe Albright-Kimball-Sokoloski types should review literature and shed crocodile tears at the right time.

Sid said...

This just came in from the DAE

Press Release

We have seen some recent reports in the media, including international, questioning the effectiveness of India’s nuclear-related export control regime and control of classified information and allegations that in certain instances items required for India’s nuclear programme have been imported using illegal means. These reports are based on inadequate understanding of realities. The timing of these stories is not surprising. Nevertheless, it is important to bring out the facts.

As regards suggestions of leaks of design information relating to centrifuge components, it may be noted that sensitive technologies developed in Indian nuclear installations, are controlled strictly with adequate security systems. While we do get specific individual processing steps done through Indian industry following prescribed procedures, it is ensured that the information contained in the tender documents does not compromise technology control requirements. Further, these documents are controlled documents and are to be used only for the purpose specified and returned after use. The drawing referred to in one media report said to be related to manufacture of gas centrifuges, is of a convoluted tube, having a variety of applications where flexibility is required. By this drawing alone, no sensitive information is revealed.

With regard to procurement of Tri-Butyl Phosphate (TBP) it needs to be noted that this is not a controlled item in NSG list and guidelines. Sustained R&D efforts have led to the development of indigenous capabilities, including in facilities under Department of Atomic Energy, for manufacture of this item. In certain instances procurement has been made from other Indian firms also producing TBP.


Department of Atomic Energy

Mumbai, 19 September 2008

Shivanand Kanavi said...

Siddharth, can you explain, what is the difference between political and legal commitment? If it is a legal commitment can you take somebody to court say at Hague? Are there precedents in recent international relations? Or are we splitting hairs here?