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Disturbing implications of 123 Agreement
Rajiv Sikri
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August 03, 2007

A quick perusal of the 123 Agreement released today shows that many of India's concerns have not been fully addressed.

The Hyde Act: When the Hyde Act was passed last year, we were told that it was an internal matter that did not concern India. But now it has been formally admitted that in the negotiations, India accepted the US position that they could not go outside the framework of the Hyde Act.

Article 2.1 of the 123 Agreement makes it very clear that the Hyde Act and other US laws will prevail. What has happened to our concerns about the "extraneous" and "prescriptive" provisions of the Hyde Act?

Nuclear Apartheid: For all the spin given by the protagonists of the agreement that this would liberate India from `nuclear apartheid', Article 5.2 of the 123 Agreement rules out transfer of any sensitive nuclear technology. This will have to be amended before any such transfer can take place.

Coverage: The Indo-US nuclear tango

Furthermore, there is no change in the position regarding dual-use items. These remain subject to the prevailing laws, regulations etc. in USA. Where are the much-touted benefits of access to technology?

Reprocessing: Article 6 (iii) does talk of "consent to reprocess." However, it kicks in only after India has set up a dedicated reprocessing facility and the two sides have agreed on arrangements and procedures.

There is silence on what would happen if the two sides do not reach agreement on these arrangements and procedures. All that is envisaged is that consultations will begin within 6 months and conclude within one year. It is not clear whether this one-year period is from the time of the request being made, or from the beginning of consultations.

So the US has at least one year, if not eighteen months, to delay reprocessing permission, during which multiple pressures would be applied on India not to go ahead with it.

But even then, there is no guarantee that reprocessing rights will in fact be given. The language does not permit India to go ahead without an agreement on the US side. On the other hand, the US has retained the right to withhold permission.

Thus, Article 14.9 provides that under "exceptional circumstances" (which have not been defined) the US can suspend the arrangements and procedures agreed upon. This is very disturbing, since it gives a virtual veto to the US on reprocessing.

Fallback safeguards: Article 10.4 does envisage fallback safeguards. The language is emphatic: "The supplier and recipient should consult and agree on appropriate verification measures."

Consultations: Article 13.2 gives both US and India the right to seek consultations if either side feels that the other is not complying with the agreement, but this does not change the reality that the agreement will remain in force for 40 years, as envisaged under Article 16.2.

Termination clauses: Article 14 is extremely important and deserves very careful reading.

Under Articles 14.1 and 14.2, India can't just walk away from the agreement. It has to give one year's notice, and also give reasons for seeking termination of the agreement. It also has to hold consultations with the US. If there is no agreement during the consultations, then India merely gets the right to seek termination.

Article 14.2 implicitly looks at the issue of India undertaking a nuclear test. But India won't be able to take such a decision unilaterally. It is obliged, together with the US, "to consider carefully the circumstances that may lead to termination or cessation of cooperation."

Discussions will "take into account whether the circumstances that may lead to termination or cessation resulted from a Party's (read: India's) serious concern about a changed security environment, or as a response to similar actions by other States which could affect national security."

Obviously, this is an escape clause for India to test, should it decide to do so in response to testing by China, Pakistan or by any other country. The US can be expected to put pressure on India to desist from testing. In any case, a one-year notice for testing means that India cannot quickly decide to test in response to external stimuli.

Article 14.3 ensures that India doesn't just walk away citing a violation of the agreement by the US. It has to be either a material violation or breach as defined in the Vienna Convention on the Law of Treaties or as determined by the IAEA Board of Governors.

Article 14.4 gives a categorical right of return to the US.

Article 14.5 merely recognises that should the US exercise its right of return, this would have negative consequences for Indo-US relations as a whole, and it would upset India's ongoing nuclear energy and other projects.

Article 14.6 provides for US compensation to India. But neither Article 14.5 nor Article 14.6 gives any legal rights to India. More important, it is categorically stated in Article 14.8 that the provisions of Article 14 regarding the right of return will not affect India's obligations under Article 5.6, which envisages safeguards in perpetuity within the framework of the safeguards agreement that India would have signed with the IAEA.

Disputes: Article 15 only provides for a negotiated settlement of disputes regarding interpretation or implementation. Such negotiations could be open-ended. India has no recourse to any arbitration or courts.

Agreement in perpetuity: Article 16.2 says that the agreement is in force for 40 years, with only "possible" amendments envisaged under Article 16.4.

But under Article 16.3, India is tied forever to the restrictive provisions of the agreement, including IAEA safeguards in perpetuity (Articles 5.6(c) and 10), the provisions regarding reprocessing (Article 6), storage (Article 7), physical protection (Article 8), diversion for nuclear weapons or military purposes (Article 9), and negotiated settlement of disputes (Article 15).

There is another disturbing aspect, which does not figure in the 123 Agreement, but has profound implications for India's future nuclear energy plans.

Under the Separation Plan agreed to between India and the US on March 2, 2006, and tabled in Parliament on March 7, 2006, it was clearly stated that a civilian facility would be one that India has determined not to be relevant to its strategic programme, and that India retains the sole right to determine which future thermal power reactors and breeder reactors would be termed civilian.

Curiously, however, in his briefing last week as well as in an interview on August 2 to the Council for Foreign Relations, Nick Burns has stated that all future fast breeder reactors would be under safeguards, and that within 25 years, 90-95 per cent of India's nuclear establishment would be fully safeguarded.

What is the Indian side's response to the remarks of Burns?

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