NSG all set to up-end India's clean waiver

Proposed restrictions on transfer of sensitive nuclear items are a 'derogation', 'rollback' of U.S. commitments, Indian officials had warned

Barring last minute objections, the Nuclear Suppliers Group (NSG) is set to approve new guidelines for the transfer of “sensitive” nuclear material that will do undo the hard fought “clean” waiver India obtained in 2008 from the cartel's restrictive export rules.

At stake is India's ability to buy enrichment and reprocessing technology and equipment (ENR) from NSG members. Under the terms of a landmark September 2008 agreement, the NSG waived its catch-all requirement of full-scope safeguards as a condition for supply in exchange for a concrete set of non-proliferation commitments by the Indian side. This agreement means NSG members are allowed to sell any nuclear equipment and material they want, including ENR, to India despite the fact that it does not allow international supervision over all its nuclear activities and is not a party to the Nuclear Non-Proliferation Treaty.

Two months after that waiver — a product of the July 2005 Indo-U.S. agreement in which Washington committed itself to “work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India” — the Bush administration threw its weight behind a bad-faith effort to remove ENR equipment and technology from the purview of the NSG-India bargain.

It did so at least partly in order to keep a promise Condoleezza Rice made to the influential Congressman Howard Berman during the passage of the Hyde Act — that if Congress were to approve the proposal for nuclear commerce with India, the administration would get the NSG to ban the sale of ENR equipment to countries that had not signed the NPT.

Thus, under the proposed new guidelines as framed by the NSG in November 2008, ENR transfers will be allowed only if the recipient state fulfils a number of objective and subjective criteria. Top of the list is the requirement of NPT membership and full-scope safeguards. Since India is the only country outside of the NPT that NSG members are allowed to sell nuclear material to in the first place, it is obvious that these two criteria are aimed exclusively at India.

The revised NSG guidelines, known as the “clean text,” have not been adopted yet largely because a number of the 46-nation cartel's members have been objecting to some of the other proposed restrictions such as the requirement that recipient states adhere to an Additional Protocol. To push the process along, the U.S. got its G-8 partners to declare at L'Aquila in 2009 that they would abide by the “clean text” in the interim. The G-8 has sent the same message every year, most recently in Deauville. On a parallel track, U.S. diplomats have worked behind the scenes to bring each of the NSG dissenters on board. Language has been found to address the concerns of Canada, Argentina, Brazil, South Korea and the Netherlands. The only holdouts until a couple of months ago were Turkey and South Africa but even they are now believed to be ready to vote for the new ENR guidelines when the NSG holds its plenary in The Hague next week.

India has objected to this unilateral redrawing of the nuclear bargain with both the U.S. and the NSG, but mostly in private and mostly without any impact on the process.

On February 3, 2009, for example, Shivshankar Menon, who was Foreign Secretary at the time, wrote to Under Secretary William Burns in the U.S. State Department that the American initiative on an ENR ban at the NSG constituted a “derogation” of the bilateral India-U.S. agreement on civil nuclear cooperation, or “123 agreement.” “Menon's February 3 letter … made a legal claim that an ENR ban would be inconsistent with Article 5.2 of the 123 Agreement itself, which provides for the possibility of amendments to the Agreement to permit ENR transfers, claiming that a ban in the NSG would eliminate the possibility of making such changes,” Ambassador David C. Mulford told Washington in a cable accessed by The Hindu through WikiLeaks dated February 12, 2009 (191725: confidential).

The U.S. envoy went on to describe the exchange he had had on the ENR subject with the Foreign Secretary on February 11 as “an un-enriching discussion of reprocessing.” The cable says that Mr. Mulford “asked what more we could say to convince Menon that this issue did not warrant the aggressive posture adopted by India. Menon expressed surprise that his letter had generated concern. He replied, “All we need is a clear statement that your position has not changed. We would like to know that what we agreed in the 123 Agreement stands.” Ambassador Mulford noted that Indian officials felt the “criteria-based approach to ENR transfers” that requires NPT membership “is discriminatory toward India and not consistent with the spirit of the Agreement.” He cited, in particular, the views of Anil Kakodkar, who was head of the Department of Atomic Energy at the time, “who professed a sense of ‘betrayal' over the issue.”

Though he noted the Indian view that U.S. policy “is not consistent with their view of assurances provided during the 123 Agreement negotiations that, while the U.S. would not transfer ENR to India, we would not stand in the way of others doing so,” Ambassador Mulford said. Mr. Menon was “vague” and “not clear how reaffirming the 123 Agreement commitments would satisfy India's concerns.” He concluded that section of his cable by commenting: “Whatever the truth behind India's concerns, a good place to start would be with a clear affirmation that the Obama administration stands by the commitments made in the 123 Agreement.”

An anodyne and ultimately pointless affirmation was made a month later by Deputy Secretary of State Jim Steinberg, but the U.S. continued to press ahead with its effort to ban ENR sales to India. The July 2009 L'Aquila statement on non-proliferation at L'Aquila took a complacent Indian establishment completely by surprise. In public, the government tried to brazen it out, denying there had been any setback. “We have a clean waiver from the NSG. We have an India-specific safeguards agreement with the IAEA. We are not concerned over what position the G8 takes [on implementing the ‘clean text'],” Pranab Mukherjee told the Rajya Sabha on 13 July 2009. In private, of course, Indian officials were indeed concerned, very concerned.

During the November 2009 strategic security dialogue with the U.S., Foreign Secretary Nirupama Rao reminded Under Secretary for Arms Control Ellen Tauscher that India took a dim view of the proposed ban on ENR sales at the NSG. A U.S. Embassy cable sent soon after that dialogue reported: “Rao stressed that India supported the goal of preventing transfers of … ENR in principle, but asked that the United States' position in favor of a global ban not be seen as a “roll-back” of the NSG decision that made India a partner, and that India can't be seen as “half in and half out (of the NSG).” She characterised the pending decision as an “issue of significance for Indian perceptions about the Civil Nuclear Agreement and our partnership,” said a cable dated November 27, 2009 (236981: confidential).

The cable notes that Ms. Rao “raised the politically sensitive nature of the issue again over lunch, stressing that it was an issue ‘close to the heart'” and that India was “counting on the United States to value the spirit of the Civil Nuclear Agreement in the NSG.” She concluded that India's core concern was that “the September 2008 NSG decision not be seen to be rolled back.”

The U.S. official's response to this expression of Indian concern was three-fold. “Tauscher reassured Rao that restricting ENR transfers via the NSG criteria-based approach is based upon long standing U.S. policy, that decisions are up to the consensus-based body (46 members), and that the U.S. was not targeting India.”

The cable does not record what Ms. Rao might have said to contradict Ms. Tauscher but, in fact, each of her three arguments is false.

If anything, U.S. policy on ENR transfers has been quite flexible. It sold reprocessing technology to Japan in the 1990s after making a determination that the sale of liquid metal reactor reprocessing technology “did not constitute ‘sensitive nuclear technology'” as defined by its domestic statute “since Japan already possesses extensive reprocessing technology” [Fred McGoldrick, Limiting Transfers of Enrichment and Reprocessing Technology, 2011]. At the NSG level, the U.S. had no firm policy on ENR transfers until 2004. That year, George W. Bush floated a tough new proposal — which, ironically, would today suit the Indian nuclear industry better — that there should be a global ban on ENR sales to countries that do not already possess these technologies. India has reprocessing and enrichment facilities and would not be covered by such a ban; indeed, in July 2005 and September 2008, it assured the U.S. and the NSG respectively that it would be guided by such a strict approach in its own export policies. The U.S. came to embrace the “criteria-based approach” to ENR exports in the NSG only in November 2008, after the India waiver was adopted, and its policy can hardly be called “long-standing.”

Ms. Tauscher's second and third arguments — that the NSG operates by consensus and that the U.S. is not targeting India — begs the question of why Washington is actively pushing for the unilateral redrafting of the cartel's bargain with India. The waiver of September 2008 was not granted by the NSG as an act of charity. It extracted a number of non-proliferation commitments from India in return, insisting, at the eleventh hour, that the Government of India make a formal statement listing out what it was prepared to do. Several of its members also expect lucrative contracts, especially the US, which squeezed India for a Letter of Intent promising to buy 10,000 MW worth of American reactors. The Indian side has scrupulously adhered to its side of the broad bargain and has assumed the U.S. and the NSG would do the same. But if the latter are going to cherry-pick which of their own commitments they will adhere to and which they will not, India may well be tempted to examine its own options.