People's Democracy

INDO-US NUCLEAR DEAL

CPI(M)’s Open Letter To Members Of Parliament

The central committee of the Communist Party Of India (Marxist) has sent the following letter to all the members of parliament regarding the Indo-US Nuclear Deal on September 8, 2007

THE Indo-US bilateral agreement on nuclear cooperation has raised a number of issues which are of vital importance to the nation. Through this open letter we wish to place before you the considered views of the Communist Party of India (Marxist).

Ever since the Joint Statement issued in July 2005 during the prime minister’s visit to Washington in which the civilian nuclear cooperation agreement was announced, there has been a debate in the country about the merits of such an agreement. Political parties, nuclear scientists, the media and concerned citizens have been expressing their views. Parliament has also discussed the agreement at various stages. However, the current debate is crucial as the bilateral text has been finalised and the government is planning to take the next steps to operationalise the agreement.

It is our contention that the nuclear cooperation agreement should not be seen in isolation from the overall context of India-US strategic relations, its impact on our foreign policy and our strategic autonomy. Further, the nuclear cooperation agreement must be seen in the context of our energy security, access to technology and the development of the three stage nuclear programme.

The bilateral "123" agreement has also to be seen also in the light of the assurances given by the prime minister in his statement to parliament on 17 August 2007.

The Left parties have asked the government not to proceed with the next steps to be taken to operationalise the agreement.

IMPLICATIONS OF THE HYDE ACT

Members of parliament will recall that in August 2006, there was a debate on the draft law being discussed by the US Senate and the House of Representatives to amend the US Atomic Energy Act of 1954 to give exemption for the proposed nuclear cooperation agreement with India. The two draft legislations before the House of Representatives and the Senate contain many provisions which were detrimental to India’s interests.

The prime minister had given certain categorical assurances on the points raised regarding this draft legislation. The nine points which the Left parties had raised were covered by the prime minister’s statement. However, subsequent to that, the Hyde Act (Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act” was adopted by the US Congress in December 2006.

Many of the provisions of the Hyde Act go contrary to the assurances given by the prime minister in August 2006. What are these?

• Under the terms set out by the Hyde Act, it is clear that the Indo-US nuclear cooperation would not cover the entire nuclear fuel cycle. It denies cooperation or access in any form whatsoever to fuel enrichment, reprocessing and heavy water production technologies.

• The denial extends to transfer of dual use technology and covers items which could be used in fuel enrichment, reprocessing or heavy water production facilities. Thus, dual use restrictions remain on technology transfers to India. Hyde Act section 102 (13) states, “The US should not seek to facilitate or encourage the continuation of nuclear exports to India by any other party if such exports are terminated under US law”.

• Section 103 (a)(6) of the Hyde Act says US policy shall be “Seek to prevent the transfer to a country (India, in this case) nuclear equipment, materials or technology from other participating governments in the NSG or from any other source if nuclear transfers to that country (India, in this case) are suspended or terminated pursuant to this title (Hyde Act), the Atomic Energy Act of 1954 or any other US law”.

The Act concerns itself with areas outside nuclear cooperation and contains objectionable clauses to get India to accept the strategic goals of the United States. These issues are:

• Annual certification and reporting to the US Congress by the President on a variety of foreign policy issues such as India’s foreign policy being “congruent to that of the United States” and specifically India joining US efforts to isolate and put sanctions against Iran [Section 104g(2) E(i)]

• Indian participation and formal declaration of support for the US’ highly controversial Proliferation Security Initiative including the illegal policy of interdiction of vessels in international waters [Section 104g(2) K]

• India conforming to various bilateral/multilateral agreements to which India is not currently a signatory such as the US’ Missile Technology Control Regime (MTCR), the Australia Group etc [Section 104c E,F,G]

It is on the basis of the Hyde Act that the United States has negotiated the bilateral “123” agreement with India. Some of the harmful provisions of the Hyde Act are reflected in the bilateral agreement.

• The bilateral agreement, while superficially using the original wording of the joint statement of 2005, “full civilian nuclear cooperation” actually denies cooperation or access in any form whatsoever to fuel enrichment, reprocessing and heavy water production technologies. The statement of intent in the agreement that a suitable amendment to enable this access may be considered in the future has little or no operative value.

• Further, this denial (made explicit in Art 5.2 of the agreement) also extends to transfers of dual-use items that could be used in enrichment, reprocessing or heavy water production facilities, again a stipulation of the Hyde Act. Under these terms, a wide range of sanctions on a host of technologies would continue, falling well short of “full civilian nuclear co-operation”.

• It is also important to recognise that the fast breeder reactors under this agreement would be treated as a part of the fuel cycle and any technology required for this would also come under the dual use technology sanctions. This would be true even if future fast breeder reactors were put in the civilian sector and under safeguards. Thus, India’s attempt to build a three-phase, self-reliant nuclear power program powered ultimately by thorium would have to be developed under conditions of isolation and existing technology sanctions.

• Another key assurance that had been given by the prime minister was that India would accept safeguards in perpetuity only in exchange for the guarantee of uninterrupted fuel supply. While the acceptance on India’s part of safeguards in perpetuity has been spelt out, the linkage of such safeguards with fuel supply in perpetuity remains unclear.

• The assurance that the United States would enable India to build a strategic fuel reserve to guard against disruption of supplies for a duration covering the lifetime of the nuclear reactors in operation appears to have been accepted in the agreement. However, whether the fuel supply will continue even after cessation or termination of the agreement depends solely on the US Congress. The Hyde Act explicitly states that the US will work with other Nuclear Suppliers Group (NSG) countries to stop all fuel and other supplies to India if the agreement is terminated under US laws. Since this agreement explicitly incorporates domestic laws, it appears that fuel supply from the US will not only cease in case the US decides to terminate the Agreement but they are also required under the Hyde Act to work with NSG to bar all future supplies. The clause 5.6 on disruption of supplies therefore seems to be limited to “market failures” and not to cover a disruption that takes place under the clauses of the Hyde Act. In such an eventuality, the US will have to pay compensation to India but all future fuel supplies would stop. Therefore, the 123 agreement represents the acceptance of IAEA safeguards in perpetuity for uncertain fuel supplies and continuing nuclear isolation with respect to a substantial amount of technological know-how.

THE HYDE ACT AND SUPREMACY OF NATIONAL LAW

The government has asserted that the Hyde Act is not binding on India. The relevant issue is that it is binding on the United States and this has been repeatedly stressed by US spokespersons.

Article 2(1) of the 123 Agreement 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”.

If the argument is that the reference to national laws is simply the case of binding towards the law, that will have a bearing on the conduct of different transactions under the 123 agreement, then what do we make of the reference to national laws in other places in the 123 agreement?

Thus, for instance, Article 5(6) (a) in part states that “As part of its implementation of the July 18, 2005, joint statement the United States is committed to seeking agreement from the US Congress to amend its domestic laws…to create the necessary conditions for India to obtain full access to the international fuel market…..”. Article 5(6) (b) (i) states that “The United States is willing to incorporate assurances regarding fuel supply in the bilateral US-India agreement on peaceful uses of nuclear energy under Section 123 of the US Atomic Energy Act, which would be submitted to the US Congress”. These clauses show that the need for conformity with “national laws” is not superfluous. If there is no direct reference to the Hyde Act in the 123 agreement, it is simply because and this is worth reiterating that the Hyde Act is the `Act to exempt from certain requirements of the Atomic Energy Act of 1954 a proposed nuclear agreement for cooperation with India.

NUCLEAR POWER AND ENERGY SECURITY

It is said that the Indo-US nuclear deal is central to our future electricity and energy requirements. At present, nuclear power generation capacity in India stands at 4,120 MW which is a little less than 3 per cent of our installed capacity of all power plants. One reason has been the nuclear isolation imposed on us resulted in the slow development of our civilian nuclear energy programme. However our scientists overcoming many hurdles did very well in indigenising the Pressurised Water Reactors, and then developing it further to 540 MW. The next stage is the fast breeder reactors, in which the Indian scientists are leading the world. The planned three stage nuclear programme would depend largely on technologies based on fast breeder reactors, and in the future, thorium as fuel. This programme requires far less uranium and lower dependence. Instead, the imported reactor route would focus much more on Light Water Reactors, which require much more uranium and are more expensive. Thus even the technology being offered will not necessarily be the best choice for India. Significantly, the mainstay of our nuclear power program – the fast breeder reactors – will still be under technology sanctions, as they would be considered a part of the fuel cycle.

The other reason is the techno-economics of nuclear power and its relatively high cost. Nuclear power plants are about 50% per cent more expensive, even when using domestic technology and equipment. If imported reactors for nuclear power are considered, the situation becomes worse: it will cost about three times as much to set up nuclear plants with imported reactors than coal based ones. It will also cost twice as much per unit – Rs 5.10-5.50 as against Rs 2.50 from coal fired plants.

According to the Planning Commission’s study, the most optimistic scenario of nuclear power is 15,000 MW by 2015 and 29,000 MW by 2021. These targets includes 8,000 MW of imported reactors. Even then, nuclear energy will only add up to about 7 per cent of our total installed capacity.

Going ahead with such an ambitious power programme dependant on imports will come at a high cost and will dry up investments in other sectors. Interestingly enough, nuclear power is not the energy of choice for most advanced countries. The US itself has commissioned its last reactor in 1996! Members of Parliament may recall the fiasco of Enron and its Dabhol power plants.

IMPLICATIONS FOR FOREIGN POLICY AND STRATEGIC AUTONOMY

The United States does not see the nuclear cooperation agreement as a stand-alone. It is part of American design to try in India a wide ranging strategic alliance which will adversely affect the pursuit of an independent foreign policy and our strategic autonomy. The facts speak for themselves.

• Two weeks prior to the joint statement which announced the Indo-US nuclear cooperation agreement, India signed a ten-year Defence Framework Agreement with the United States in June 2005. This is being cited by the Bush administration as India’s commitment to cooperate with the United States furthering its strategic interests in Asia.

• Two months after the nuclear cooperation agreement was announced in September 2005, India voted against Iran in the International Atomic Energy Agency, contrary to its stance earlier that Iran, as an NPT signatory, has every right to develop its nuclear technology for civilian purposes.

• This was followed by a second vote against Iran in February on the eve of President Bush’s visit to India.

• Nicholas Burns, US Under Secretary of State, in his “On record briefing” after the finalisation of the 123 agreement said on July 27: “And I think now that we have consummated the civil nuclear trade between us, if we look down the road in the future, we’re going to see far greater defence cooperation between the United State and India: training; exercises; we hope, defence sales of American military technology to the Indian armed forces.” The United States is exercising tremendous pressure on India to buy a whole range of weaponry including the 126 fighter planes, radar, helicopters, artillery etc. worth multi-billion dollars.

Is the nuclear cooperation agreement going to bind India with the United States in a relationship which goes contrary to our cherished goals of national sovereignty and independent foreign policy and an economic development based on the priorities of our people?

The objections and the apprehensions raised by the Left parties and other parties, organisations and concerned scientists and citizens need to be examined before proceeding further. All we are asking the government to do is not to rush through with the next steps which are necessary to operationalise the deal.

We hope that you, as a member of parliament, which is the sovereign representative institution of the Indian people, will seriously consider these issues on this vital matter affecting our country’s future.