No Hiding From The Hyde Act

Prabir Purkayastha

THE IAEA Draft Safeguards Agreement would not have been important except for UPA's claims that the Hyde Act problems could be addressed through the Safeguards Agreement. The Hyde Act and the 123 Agreement did not offer any worthwhile fuel supply assurances while imposing IAEA safeguards in perpetuity on India's civilian nuclear facilities. The UPA claimed that though they had not secured any credible fuel supply assurances through the 123 Agreement, they would be able to link the perpetual safeguards with permanent fuel supplies - lifetime fuel supplies in lieu of lifetime safeguards.

It is now clear why the UPA refused to show the draft to the Left. The attempt was to postpone any examination of the Draft as long as possible, while making exaggerated claims about is achievements. It was only when the Draft was circulated to the Board of Governors and various organisations started posting this on their websites well before Ministry of External Affairs (MEA) that the government posted it on the MEA and Department of Atomic Energy (DAE) websites.

The IAEA Agreement has to be examined to see whether India would have the right to withdraw its nuclear facilities from safeguards, in case fuel supply fails. Various commentators have argued that the Draft IAEA Safeguards Agreement gives India a considerable leeway in taking corrective action in case fuel supplies are interrupted. This reading of the agreement hinges on the belief that the termination of safeguards is governed only by Article 29 read along with GOV/1621. GOV/1621 was specifically introduced in 1973 �for the application of safeguards in connection with nuclear material, equipment, facilities or non-nuclear material supplied to States by third parties�. Therefore, termination of the safeguards for any new facility built with material or equipment from third parties - such as an imported reactor -would be governed by the provisions of GOV/1621. The provisions of GOV/1621 obviously do not cover India's indigenous developed facilities, which have received no materials or equipment from third parties. They would come under its provisions only if we introduce imported fuel.

IMPORTED

REACTORS

Let us take the case of imported reactors first. The Article 29 covers both facilities and materials, for the duration of safeguards for facilities, and it explicitly refers to GOV/1621. GOV/1621 makes clear that termination of safeguards can take place only if �the rights and obligations of the parties, as provided for in the agreement, would continue to apply in connection with any supplied material or items and with any special fissionable material produced, processed or used in or in connection with any supplied material or items which had been included in the inventory, until such material or items had been removed from the inventory.� Further, it notes that deletion from inventory would take place if they were returned to the supplying country or transferred to a third party or �items or non-nuclear material could be removed from the purview of the agreement if they had been consumed, were no longer usable for any nuclear activity relevant from the point of view of safeguards or had become practicably irrecoverable�. Taken together, the provisions of GOV/1621 makes crystal clear that all facilities built with imports will continue in perpetuity under safeguards. The scope of GOV/1621 and Article 29 is much broader than just facilities - they pertain also to all materials that have been imported.

It is this material clause that seems to have caused some confusion. Some commentators have taken it to mean that that as long as we do not use imported material or fuel, we can pretty much do what we want with the facilities we are offering for safeguards. There are two Articles that are important here. One is that �items� for safeguards in the text is governed by Article 11a) which defines items to also include, �Any facility listed in the Annex to this Agreement, as notified by India�. The second is Article 32, which explicitly states, �Safeguards shall be terminated on a facility listed in the Annex after India and the Agency have jointly determined that the facility is no longer usable for any nuclear activity relevant from the point of view of safeguards�.

If we accept that Article 32 will come into play for taking facilities out of safeguards, there are three conditions that have to be fulfilled. Both - India AND IAEA - must agree to this; this is not a unilateral decision of India. Second, the facility must no longer usable for any nuclear activity. Any facility that produces nuclear energy is obviously usable for nuclear activity. Lastly, the facility must be relevant from the point of view of safeguards. Any facility offered by India under Article 14 for safeguards, continues to be relevant for safeguards. The issue of imported fuel is extraneous to any of these considerations.

Some may argue that once we have taken out imported fuel, that facility is no longer relevant from the point of view of safeguards as per Article 32. The answer to that lies in India's Separation Plan which lists out what facilities it considers as safeguards relevant. Obviously, power reactors are in the list as safeguards relevant.

Why then this confusion? It starts from discussion in various journals on this topic that INFIRC 66 and GOV/1621 have a loophole, as it specifically refers only to third party transfers. INFIRC 66 and GOV/1621 assumes that all parties putting their facilities under safeguards will need to have materials, equipment or facilities imported from other countries. Jeffrey Lewis, in a website (http://www.armscontrolwonk.com/) had raised this issue in October 2006 and has repeated it again in his recent post. His argument is that as GOV/1621 pertains to materials, India could take out its indigenous reactors out of safeguards. It is similar to the argument advanced here by some of the analysts, with one significant difference. Jeffrey accepts that a reactor becomes subjects to safeguards if (1) it is listed in the Annex or (2) uses imported fuel. His contention is that for facilities not in the Annex, India can take these out of safeguards after removing all safeguarded fuel. So unlike the Indian analysts, who claim this right for even those facilities which India lists in the Annex, Jeffrey concedes that only facilities not listed in the Annex can be taken out of safeguards.

India's Separation Plan already states that India will offer an additional 8 PHWRs for safeguards over and above the 6 that are already under safeguards (including the two under construction in Koodankulam). Which eight out of the remaining nuclear reactors, have not yet been identified. They will be identified in the Annex and be offered in a phase wise manner to IAEA. Once they are listed in the Annex and go under IAEA safeguards, they will remain perpetually under safeguards, the claims of various supporters of the deal notwithstanding. The loophole of GOV/1621 has effectively been plugged by Article 32.

CORRECTIVE

MEASURES

Let us take the next issue that once corrective measures are there in the text, it does not matter whether it is there in the preamble or in the operative part of the text. The issue is not whether the preamble is a part an agreement or a treaty. The issue here is whether insertion of the phrase �corrective measures� in the preamble can be used to override Articles in the operative part of the agreement. Or can using such phrases in the preamble create new rights or obligations that are not contained in the operative body of the text? If the scope of termination of safeguards is defined in Articles 29-32, can they be overridden by India taking recourse to unspecified �corrective measures� of the preamble? Clearly, such a reading of �corrective measures� in the preamble is not possible, or the operative part of the agreement would then become meaningless.

It is well established in international law that the preamble can be used to give a treaty a context and help interpret its clauses. In no case can the preamble override explicit provisions in the clauses of the treaty or be used to create new rights or obligations. If this were so, the Non-Proliferation Treaty would have led to nuclear disarmament as this objective is set out in the preamble. This has not happened simply because Article 6 of the treaty only asks the nuclear weapon countries to negotiate disarmament in good faith. The operative part lacks the teeth to implement the objective set out in the preamble.

The issue of fuel supply assurances and strategic fuel reserves is of little consequence in this agreement. IAEA is not a body that deals with either. The preamble merely notes that the basis of India's offer is its arrangements for uninterrupted fuel supplies and support for building strategic fuel reserves. Whatever may be the basis of a country's entering into an agreement, the articles of the treaty do not get voided simply because this basis is no longer valid. The withdrawal and termination clauses then govern the actual withdrawal or termination. It is pretty much like marriage, love may be the basis of the marriage but its demise for one party is not legally a sufficient ground for divorce

Asked whether India could ever withdraw its reactors from safeguards, R B Grover from Department of Atomic Energy claimed (at a press conference on July 12, 2008) that India could first claim a material breach under Article 52 c) and then take whatever action it wanted under �the combination of [Articles] 29, 30f, 10, 4 and the preamble�. Again, while Article 29 covers both facilities and materials, for the duration of safeguards for facilities, we have to read Article 29 along with Article 32. As we have explained earlier, Article 32 is quite explicit that once any facility is offered for safeguards, the safeguards will continue to apply virtually in perpetuity. Article 30 f) is a part of 30, which specifically pertains only to materials. The duration of safeguards on imported material is governed by GOV/1621 and is different from duration of safeguards on facilities. To claim specific rights over facilities using an Article that pertains to materials will not help India in any way.

VAGUE

PROVISIONS

It is not in India's interest to keep the provisions of the agreement vague. The dispute settlement body in IAEA is not a neutral umpire - it is the Board of Governors. Here, politics is the dominant issue in interpretation and not legalese. As the Iran case shows, in spite of having the right to the full fuel cycle, Board of Governors referred Iran to the Security Council for sanctions at US insistence. The majority including India fell in line with the US, not because they were convinced of its legal case but its sheer muscle power. Therefore, to believe that the vague �corrective measures� built into the preamble will help India later to put whatever interpretation it wants may help convince those already sold on the deal, but will simply not wash.

Finally, it appears that India expects to get a �clean� exemption from the NSG. There are three issues on which India will not get a clean exemption. One is on access to fuel reprocessing and enrichment technologies, or what the PM had claimed as access to �the full fuel cycle�. The NSG position on this will be in line with the Hyde Act. Already, the NSG is discussing the criteria for countries to be eligible for these technologies. One such criterion is signing of the NPT and obviously this bars India. The second is that contrary to the belief that once NSG gives India an exemption, it can start importing fuel from Russia and France even if US does not ratify the 123 Agreement, the NSG exemption will be linked to the US passing of the 123 Agreement. Also, the US is drafting a requirement that if fuel supply is suspended by one country, others will either have to also follow suit or will need the consent of the party suspending the fuel supplies before they can make their supplies.

The Hyde Act provisions have been built into the IAEA Agreement, the government spin notwithstanding. Manmohan Singh's passion to stand shoulder to shoulder with George Bush, which he expressed during the G8 Summit in Japan, has trumped the national interest. This is the truth that the Congress is hiding from the people.

People's Democracy