brahma chellaney: 123: Text and Context

aug 4th, 2007

here are the facts of the agreement.

conclusion: as expected, india is screwed. thank you, manmohan singh,
m k narayanan, k subrahmanyam, shiv shankar menon, et al

---------- Forwarded message ----------
From: Brahma Chellaney

123: Text and Context

By Brahma Chellaney

Asian Age, August 4, 2007

MAIN POINTS

US gains right to unilaterally terminate cooperation at will.
No provision for instituting alternate suppliers before terminating
cooperation.
India concedes to US unfettered "right of return".
Agreement upholds supremacy of US law.
India given reprocessing right only in principle. Actual right uncertain.
Fuel-supply assurance subject to US right to terminate.
No full cooperation.
India accepts IAEA-safeguarded enrichment or reprocessing is
"dual-use" activity.
Accord provides for fallback safeguards.
Accord provides for end-use US monitoring.
Sugar-coated provisions on consultations.
Agreement turns unilateral test ban into bilateral legality.
Through NSG, US intends to turn test ban into multilateral legality.

The released text of the so-called 123 agreement on civil nuclear
cooperation reveals that the United States, besides upholding the
primacy of its laws, has gained two absolute rights — the right to
unilaterally terminate cooperation with India at will (without first
arranging alternative suppliers), and the right to take back all
supplied items and materials.

In withholding the text for two long weeks, the U.S. and Indian
governments sought to spin reality to suit political ends. Now the
facts need to be separated not just from spin but also from wishful
thinking.

This proposed bilateral agreement has at least 12 important facets:

TERMINATION: It confers on the U.S. an unfettered and uninfringeable
right to terminate cooperation with India at will. Article 14(2)
states: "The party seeking termination has the right to cease further
cooperation under this Agreement if it determines that a mutually
acceptable resolution of outstanding issues has not been possible or
cannot be achieved through consultations". That would put India at the
mercy of the supplier, which would be holding all the leverage.

Even though termination is to take effect at the end of a one-year
notice period, the agreement explicitly empowers the US to forthwith
suspend all cooperation without much ado. The only requirement is that
a "party giving notice of termination shall provide the reasons for
seeking such termination".

In light of the one-sided dependency the agreement would create, such
a U.S. right will not only help bind India to the non-proliferation
conditions set by the U.S. Congress through the Hyde Act, but it also
goes against the purported assurances of uninterrupted supply of fuel
and spare parts. Significantly, Article 14 on termination does not
enjoin the withdrawing party to make alternate arrangements for
supplies to the other side before it ceases all cooperation.

INTERNATIONAL LAW: In a departure from a standard clause found in
America's 123 agreements with other states, this accord does not
uphold a core principle of international law — that failure to perform
a treaty or agreement cannot be justified by invoking the provisions
of a domestic law. Rather, this agreement is unambiguously anchored in
the supremacy of national laws and regulations (which means US laws
like the Hyde Act, because there is no Indian law governing nuclear
cooperation with the US or any other specific country).

Contrast this accord with the 1985 US-China 123 agreement, which in
its Article 2 (1) states: "The parties shall cooperate in the use of
nuclear energy for peaceful purposes in accordance with the provisions
of this agreement. Each party shall implement this agreement in
accordance with its respective applicable treaties, national laws,
regulations and license requirements concerning the use of nuclear
energy for peaceful purposes. The parties recognize, with respect to
the observance of this agreement, the principle of international law
that provides that a party may not invoke the provisions of its
internal law as justification for its failure to perform a treaty".

The third sentence about the non-invocation of domestic laws is
tellingly missing from this agreement, even as the first two sentences
find mention. This omission is because of one simple fact: Never
before in U.S. legislative history has a law been enacted imposing
such numerous and onerous conditions on an avowed strategic partner to
permit cooperation in just one area as the Hyde Act does.

That is why even the agreement's Article 15, titled "Settlement of
Disputes", is toothless, making no reference to the applicability of
the principles of international law. It reads: "Any dispute concerning
the interpretation or implementation of the provisions of this
agreement shall be promptly negotiated by the parties with a view to
resolving that dispute". That means the recipient-state will have to
listen to the supplier.

Both the U.S. and Indian sides have publicly acknowledged that the
agreement is within the legal framework of the India-specific Hyde
Act, which reigns supreme in this arrangement.

TEST BAN: While there is no explicit reference to nuclear testing, a
test prohibition against India has been unequivocally built into the
agreement's provisions through the incorporation of the U.S. right to
demand the return of all supplied materials and items. India's
unilateral moratorium is being stripped of its voluntary character and
turned into a bilateral legality in this manner. Through the US "right
of return," the 123 agreement explicitly hangs the Damocles' sword
over India's head.

While the Hyde Act's Section 106 openly bans Indian testing, the 123
agreement reinforces that test ban both by upholding the applicability
of national laws to govern cooperation and by incorporating the US
"right of return".

As part of the same design to enforce permanent Indian compliance with
the Comprehensive Test Ban Treaty — a pact the US Senate soundly
rejected in 1999 — Washington has already recommended that the Nuclear
Suppliers' Group (NSG) link its proposed exemption for India to a
similar test ban. The NSG exemption could even come with a "right of
return" being conferred on all supplier-states. In other words, the
test ban under the 123 agreement is to be converted into a
multilateral legality through the NSG.

INDIAN FULL COMPLIANCE: The US has an unencumbered right under the 123
agreement to terminate cooperation not only in response to an Indian
test but also if India, in Washington's judgement, fell short of the
"full compliance" required of it by the Hyde Act with regard to other
prescribed non-proliferation conditions. The 123 agreement does not in
any way rein in the US right to unilaterally terminate cooperation.

Implicit in this agreement is India's readiness to honour the U.S.-set
non-proliferation conditions.

RIGHT OF RETURN: By conceding that that the U.S. has a right to
unilaterally terminate cooperate and demand the return of all
equipment and fuel supplied in the past, New Delhi has lent legitimacy
to what is a dubious concept in international law that the supplier is
at liberty to terminate cooperation retroactively.

The agreement states that before invoking the right of return, the
concerned party would "undertake consultations with the other party".
But that is nothing but public relations because such consultations
would be of no consequence. The supplier-state, however, would
"compensate promptly that party for the fair market value" of the
items and materials it takes back.

PERMANENT INDIAN OBLIGATIONS: While the US has the right to terminate
cooperation at will and withdraw from all obligations, India has been
denied the right to withdraw from all its obligations, even if the
agreement was terminated at America's instance. The agreement more
than once cites the permanent nature of India's obligation to accept
international inspections on its entire civil nuclear programme,
including the indigenously built facilities it is voluntarily opening
to external scrutiny.

In a hypothetical situation, if the US were to terminate all
cooperation and suspend all fuel and equipment transfers, India would
be stuck both with everlasting IAEA inspections on its entire civil
programme and with lack of access to an alternate supplier.

REPROCESSING: The US has also reserved its right in the 123 agreement
to unilaterally suspend the reprocessing-related "arrangements and
procedures" it intends to work out with New Delhi in the years ahead,
once India has built a new reprocessing facility under International
Atomic Energy Agency safeguards. National Security Adviser M.K.
Narayanan has already warned that "spoilers" may nitpick on the
facility's design and cause delays.

The text clearly shows that the US has granted India the right to
reprocess only in principle. The grant of actual right would take many
years, with the US retaining a veto on Indian reprocessing until then.
It will take at least five years to build the new facility, after
whose construction, the agreement says, "the parties will agree on
arrangements and procedures" for reprocessing "in this new facility".
It goes on to say that consultations on such arrangements and
procedures "will begin within six months of a request by either party
and will be concluded within one year". Thereafter, the reprocessing
agreement would go to the US Congress for vetting.

This entire process — from the start of work on the facility to
congressional approval — would be a long haul. Yet, once in place, the
US could terminate the reprocessing-related "arrangements and
procedures" in yet-to-be-defined "exceptional circumstances".

SUGAR-COATED PROVISIONS: The sugar-coated provisions in the Agreement
relating to "consultations" and uninterrupted fuel supply appear more
to help India save face than to set out enforceable obligations.
Although "consultations" are referred to repeatedly in the text, in no
context does the agreement provide for consultations to achieve a
mutually acceptable outcome. At best, it provides for consultations
within a specified timeframe in one context.

In all the specified circumstances, consultations are to be toothless
and, in any event, subsidiary to the central requirement that the
agreement be in accord with the provisions of national laws. The
agreement gives India little say.

LIFETIME FUEL RESERVES: The agreement plays cleverly on words to
fashion an illusion at times. For example, Article 5(4) states: "The
quantity of nuclear material transferred under this Agreement shall be
consistent with any of the following purposes: use in reactor
experiments or the loading of reactors, the efficient and continuous
conduct of such reactor experiments or operation of reactors for their
lifetime, use as samples, standards, detectors, and targets, and the
accomplishment of other purposes as may be agreed by the parties".

Note this provision does not allow India to build up lifetime
reserves, as the prime minister had pledged in Parliament. It only
permits fuel supply consistent with the efficient and continuous
operation of reactors for their lifetime. This is just one example how
an optical illusion is sought to be created.

In fact, nowhere does the agreement specifically permit India to
accumulate lifetime fuel reserves. The agreement is so cleverly worded
that it refers to strategic fuel reserves in its aims and objectives,
and then in Article 5(6)(a) it states that "the United States is
committed to seeking agreement from the U.S. Congress to amend its
domestic laws and to work with friends and allies to adjust the
practices of the Nuclear Suppliers' Group to create the necessary
conditions for India to obtain full access to the international fuel
market, including reliable, uninterrupted and continual access to fuel
supplies from firms in several nations". In other words, the agreement
admits that the U.S. has yet to make the necessary adjustments in its
laws that it promised in July 2005.

Then, in the very next subsection (b) of Article 5(6), it is stated as
follows: "To further guard against any disruption of fuel supplies,
the United States is prepared to take the following additional steps:
i) The United States is willing to incorporate assurances regarding
fuel supply in the bilateral U.S.-India agreement on peaceful uses of
nuclear energy under Section 123 of the U.S. Atomic Energy Act, which
would be submitted to the U.S. Congress". But this is the agreement
under Section 123, and there is no such ironclad assurance!

LACK OF FULL COOPERATION: The agreement brings out starkly that India
has accepted terms that fall short of the promised "full cooperation".

In keeping with the Hyde Act's prohibition on transfers of equipment
and technology in certain areas, the 123 agreement offers this
palliative in Article 5(2): "Sensitive nuclear technology, heavy water
production technology, sensitive nuclear facilities, heavy water
production facilities and major critical components of such facilities
may be transferred under this Agreement pursuant to an amendment to
this Agreement. Transfers of dual-use items that could be used in
enrichment, reprocessing or heavy water production facilities will be
subject to the parties' respective applicable laws, regulations and
license policies".

In accepting this clause, India has not only acquiesced to restrictive
cooperation, but also gone one step beyond its current policy to align
with U.S. policy on an important point — that any enrichment,
reprocessing or heavy-water activity, even when occurring under
stringent IAEA inspections, is "dual-use" in nature and thus liable to
be restricted.

This is the very thrust of the U.S. case against Iran, with Tehran
being asked to forego all IAEA-safeguarded enrichment or reprocessing
activity, despite Iran's insistence that it is its lawful right to
pursue such fuel cycle-related work under the provisions of the NPT.
In seeking to forge an arbitrary new regime dividing the world into
fuel-cycle possessors and fuel-cycle abstainers, the US has dubbed
even IAEA-safeguarded enrichment and reprocessing activity as "dual
use".

U.S. END-USE MONITORING & FALLBACK SAFEGUARDS: In addition to ensuring
IAEA inspections on all aspects of India's civilian nuclear programme,
the U.S. had staked an unparalleled double prerogative: the right to
statutorily establish its own end-use monitoring, as called for in the
Hyde Act Section 104(d)(5)(B)(i); and the right to institute "fallback
safeguards" in case of "budget or personnel strains in the IAEA". The
fallback option, stipulated in Hyde Act's Section 104 (d)(5)(B)(iii),
is to ensure that India is subject to intrusive, challenge inspections
of the type the IAEA applies in non-nuclear states.

In the 123 agreement, the US has succeeded in subtly asserting its
prerogatives on both fronts.

The provision for fallback safeguards finds mention in the agreement's
Article 10(4), which states that, "If the IAEA decides that the
application of IAEA safeguards is no longer possible, the supplier and
recipient should consult and agree on appropriate verification
measures". That complies with the Hyde Act stipulation.

End-use US monitoring (to which India is committed through an earlier
bilateral agreement on high-tech imports) is reflected in the
agreement's Article 12(3): "When execution of an agreement or contract
pursuant to this Agreement between Indian and United States
organizations requires exchanges of experts, the parties shall
facilitate entry of the experts to their territories and their stay
therein consistent with national laws, regulations and practices. When
other cooperation pursuant to this Agreement requires visits of
experts, the parties shall facilitate entry of the experts to their
territory and their stay therein consistent with national laws,
regulations and practices".

PRIME MINISTER'S ASSURANCES: While the U.S. has managed to fully
uphold all its laws, including the India-targeting Hyde Act, with New
Delhi's own admitted support, it is manifest from the released text
that the Indian government has been unable to fully uphold even the
prime minister's solemn assurances to Parliament.

History is repeating itself. Ignoring the egregious way America cut
off all fuel supply for Tarapur in the 1970s in material breach of the
123 agreement it signed in 1963, India is entering into new
arrangements with its wings clipped (like on nuclear testing) as well
as ambiguity or uncertainty on key issues. Even the actual grant of
and continuation of the reprocessing right is to be contingent on
India's good behaviour.

Creating a U.S.-monitored energy dependency through imported reactors
dependent on imported fuel through a fresh 123 agreement loaded in
favour of the supplier-state is to ask for trouble, especially when
the new 123 accord is not half as protective of Indian interests as
the 1963 agreement.

(Brahma Chellaney, a strategic-affairs expert, is the author of
Nuclear Proliferation: The US-India Conflict.)

(c) Asian Age, 2007