Chinese-Pakistani Reactor Deal Moves Ahead

A planned civilian nuclear deal between China and Pakistan moved a step closer to completion, as the International Atomic Energy Agency (IAEA) Board of Governors on March 8 approved safeguards agreements for the two power reactors that would be involved.

The units would be built at Pakistan’s Chashma site, which already houses two Chinese-built power reactors.

The deal is controversial because the guidelines of the Nuclear Suppliers Group (NSG), which China joined in 2004, allow members to export nuclear goods such as reactors and fuel only to countries that accept IAEA safeguards on all their nuclear facilities. Pakistan does not apply these so-called full-scope safeguards.

When China joined the NSG, it had already built a power reactor at the Chashma site. It claimed at the time that, under the NSG’s “grandfather” provisions, it was entitled to build a second reactor, on the grounds that the second project was covered in its existing agreement with Pakistan. According to several accounts, the NSG agreed that the second reactor would be allowable under the grandfather provision but that subsequent power reactor sales would not.

The 46-member NSG is not a formal organization; its export guidelines are nonbinding.

Reiterating the position the United States has held since mid-2010 (see ACT, June 2010), Assistant Secretary of State for South and Central Asian Affairs Robert Blake told reporters in Beijing March 18, “We expect China to abide by the commitments that it made when it joined the Nuclear Suppliers Group in 2004, and in particular we think the construction of new nuclear reactors such as the Chasma 3 and 4 would be inconsistent with those commitments,” according to a Department of State transcript.

“We’ve been very clear in the Nuclear Suppliers Group context about that position, but we’ve also been very clear on the need to support Pakistan’s energy development,” Blake said. “[T]here’s a lot that can be done in non-nuclear areas that help do that,” he said.

In a March 23 e-mail to Arms Control Today, another State Department official drew a distinction between the IAEA and the NSG in the context of the deal. The United States supported approval of the safeguards pact because such agreements “play the key role of providing greater assurance and transparency that civilian activities are not diverted to other purposes,” the official said. “We believe the Nuclear Suppliers Group is the appropriate venue to discuss concerns about this transfer, not the IAEA,” the official said.

Waiting for Information

According to the official, the United States has “asked China to present the scope and details of its intended nuclear cooperation with Pakistan to the NSG,” but “China has yet to provide such details.”

The NSG discussed the matter last year during its plenary meeting in New Zealand. (See ACT, July/August 2010.) In recent interviews, diplomats said it is not on the agenda for this year’s plenary meeting, which is scheduled for June in the Netherlands, but could be discussed there.

Some observers have said the United States needs to raise the issue in venues other than the NSG. State Department officials declined to say whether Washington has done so.

In a March 14 interview, a European diplomat said many countries are “uneasy” about the situation, as they do not believe the planned reactor is covered by the grandfathering agreement. As the diplomat noted, China could request an exemption from NSG guidelines to allow nuclear trade with a country that does not accept full-scope safeguards. In response to a U.S.-led initiative, the NSG granted such an exemption in 2008 for sales to India. (See ACT, October 2008.)

“We would be very interested in the Chinese arguments,” the diplomat said, adding that Beijing probably will not request an exemption.

“We are really struggling with this issue,” the diplomat said.

In a March 29 interview, a State Department official said, “Everything [the Chinese] have said would indicate that [the deal] is going forward.”

Extracting Benefits

Some current and former diplomats have begun thinking about how to salvage from the deal “an outcome that would be kind of positive,” as the European diplomat put it. For example, the diplomat said, the NSG could press for a Chinese commitment that was “more explicit” than the one in 2004 in stating that Beijing would not conduct additional trade that fell outside the NSG guidelines.

In March 29 remarks at a nuclear policy conference in Washington, John Carlson, the former director-general of the Australian Safeguards and Non-Proliferation Office, said NSG members could try to convince China to insist on high standards of safety and physical protection for the reactors. Appearing on the same panel, Henk Cor van der Kwast, head of the Non-Proliferation, Disarmament, Arms Control and Export Control Policy Division in the Dutch Ministry of Foreign Affairs, said, “We don’t know how this question will go.” If the sale does take place, one possibility is a Chinese declaration making certain commitments, along the lines of the one that India made as part of the process of obtaining the exemption in 2008, he said. In a brief interview after the panel, van der Kwast said he was not suggesting that he thought China would seek an exemption for the sale to Pakistan.

The third panelist, Richard Goorevich, a senior policy adviser in the U.S. Department of Energy’s National Nuclear Security Administration, commented, “When it comes to building nuclear reactors, it’s really not a done deal until it’s actually done.”

After the panel, he said he was not referring to a particular current obstacle. Reactor construction is a “laborious, complicated thing” and could be stalled by issues such as financing or, in Pakistan’s specific case, rebuilding from last year’s devastating floods, he said.

In his panel comments, he also said that, in the NSG, there is an “aspect of transparency with regards to each other’s nuclear cooperation,” and that is what would be discussed with China if the deal went ahead.