Friday, August 03, 2007

The India-US 123 Agreement

The text is finally out. It can be seen here in the Ministry of External Affairs website where you may have to search for it a bit. I have it here as well in a web hosting service and is likely to be here for a month or so and more if people download it.

  1. Supply assurances are contained in section 5.6 2.2b and 5.4 and they belie the claim made by critics that the Obama amendment to the Hyde Act would somehow prevent these from being made by the US.

  1. Reprocessing is contained in section 6.3 and the fear that the US will string us along has been belied by specific commitment that negotiations will begin in 6 months of an Indian request and be completed within a year thereafter.

  1. Consequences of nuclear testing is in article 14 and it is not absolute, but is conditioned by circumstances and the impact on Indian security. 14.3 belies the claim that the US will terminate or slow down cooperation based on foreign policy divergence. This section says that only a material breach of the agreement, as determined by the IAEA board, could lead to this. In other words, no capricious termination.

  1. Right of return is in 14.5 and is clear that it will be through a consultative process and conditioned by the need for uninterrupted operation of reactors. It will also provide for compensation and 14.8 ensures that it will not be in derogation of 5.6 (supply assurances)

  1. Non-hindrance clauses. 2.4 provides that the “purpose of this agreement is to provide peaceful nuclear cooperation and not to affect the unsafeguarded nuclear activities of either party.” So the agreement cannot be interpreted to affect either India’s indigenous programe, or military programme.
  2. Fallback safeguards. Critics said that this could be used by the US to conduct inspections of Indian facilities. 10.4 says that the determination that the IAEA is indeed unable to do so would be made by the IAEA Board of Governors and no other party. And should this happen, the supplier and the recipient will consult to agree on “appropriate verification measures.”

  1. Nuclear trade. This is one area that is qualified. While 5.1 provides for nuclear materials, including low enriched uranium, 5.2 says that “sensitive nuclear technology” which means reprocessing, enrichment and heavy water production technology” and certain critical components for such facilities will require an amendment to the 123. While some may see this as falling short of Indian demands, the provision is actually more than what other Nuclear Weapons States get.
  2. Nuclear by-products. Clearly the US had enormous concerns about the issue of reprocessing rights for India. Page 22, the last page of the agreement, seems to be an addendum in the form of an "agreed minute" that has two technical sections that relate to the use and by-products of US-origin nuclear and non-nuclear material.

India-US 123 Agreement: A summary

Article I is mainly about definitions.

Article II – “Scope of Cooperation “ is important, especially it’s clauses point to the gains beyond nuclear materials and technology.

Section 2 ‘a’ talks of “advanced nuclear energy” R&D, section ‘c’ of “facilitation of exchange of scientist… and collaborative research” – all areas that had been closed to us till now.

Section 2‘d’ clarifies that “full civil nuclear cooperation” means activities relating “to reactors and aspects of associated nuclear fuel cycle”

Section 2‘e’ notes that it will involve the “development of a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors.”

Section 4 is important because it says that “nothing in this agreement shall be interpreted” as affecting India’s indigenous programmes, both civil and military.

Article V deals with the transfer of nuclear materials and technology—the heart of the agreement.

Section 2 makes it clear that the US will not provide India with enrichment, reprocessing or heavy water production technology. To do so, India would have to seek an amendment of the ‘123 Agreement.” India has all these technologies and is not seeking them. However, it is seeking components of these “sensitive” technologies, but this is a matter that has been left for further negotiation. Considering that the US does not give such technology to anyone, their decision to leave the matter for negotiation in the future is a gain for India.

Section 4 says that the quantity of material transferred related to the “operation of reactors for their lifetime.”

Section 6 puts in a legal binding form, the American commitment of July 18, 2005 to “to create the necessary conditions for India to have assured and full access to fuel for its reactors.” So under section 6b the US has expressed its willingness to incorporate these assurances in the 123 Agreement, and to support India to develop a strategic reserve of nuclear fuel” to prevent disruption of supply.

If the disruption still occurs, the US would join India to set up a group of friendsly suppliers like Russia, France and UK to “pursue such measures as would restore fuel supply to India.”

Article VI deals with the nuclear fuel cycle issues and the agreement gives India the “front end” right to enrich uranium, as well as the back-end right to reprocess the spent fuel.

Section i) is important because it allows India to enrich Uranium to 20 per cent, which is what is required for a power plant.

Section iii) is the right to reprocess the spent fuel. This is conditional on India setting up a new national reprocessing facility and will require the parties to agree on “arrangements and procedures” to reprocess in this facility. To ensure that the process is not open-ended, the two are required to begin consultations on the arrangements in six months of the Indian request and to conclude the process within a year.

Articles VII and VIII deal with the issues of storage and physical protection of the nuclear materials and equipment. Article IX commits India not to use any material or equipment to produce a nuclear explosive device or any other military purpose.

Article X relates to IAEA safeguards.

Besides committing itself to ensuring safeguards in perpetuity through the special India-IAEA agreement, Section 4 makes it clear that if the IAEA declares that it is unable to carry out its duties, India and the US will consult on the best way to meet the need for verification.

Article XI related to environmental protection, Article XII to its implementation
Article XIII commits the two to consult each other and do everything they can to ensure the honest implementation of the agreement.

Article XIV is the termination or cessation clause which is there in every agreement.

Section 1 says that either party can terminate the agreement after 1 years notice. This is a standard kind of a clause.

Section 2 is the important because it qualifies the important issue of a cessation that may occur because of another nuclear test by India. Without mentioning nuclear testing, the agreement says that the parties would consult with each other before termination and would “take into account” whether the reasons for seeking the termination were related to “a party’s serious concern about a changed security environment or as a response to a similar action by other states which could impact national security.” In other words a Chinese, Pakistani or even US nuclear test preceding an Indian one would not necessarily lead to the termination of the agreement.

Section 3 emphasises that other grounds for termination would have to be nothing short of a “material violation or breach” of the IAEA safeguards agreement, one that is declared so not my the US, but by the IAEA Board of Governors.

Section 5 deals with the return of US-origin material and equipment in the event of a termination of an agreement. This would have to be done after consultation and the US would have to give “special consideration” to the requirements of “uninterrupted operation of nuclear reactors”.

Section 8 explicitly states that the purpose of this article is not to “derogate” from the rights of the parties under article 5.6

Articles XV, XVI and XVII relate to the standard requirement of settlement of disputes, entry into force and duration (40 years) and the administrative arrangements relating to the agreement.

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