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IAEA-Indian Nuclear Safeguards Agreement: A Critical Analysis
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Background Memo by Daryl G. Kimball, Fred McGoldrick, and Lawrence Scheinman

For Immediate Release: July 30, 2008

Press Contacts: Daryl G. Kimball, Arms Control Association, (202) 463-8270 x107; and
Fred McGoldrick of Bengelsdorf, McGoldrick & Associates (617) 298-2024 or (508) 981-9112

On July 9, the International Atomic Energy Agency (IAEA) distributed the text of a proposed "umbrella" safeguards agreement between the Government of India and the IAEA that would cover a finite number of facilities that India will at some later point declare as "civilian." The proposed agreement Gov. 2008/3 dated 9 July 2008 is scheduled to be considered by the 35-nation IAEA Board of Governors August 1st.

The agreement is based on the IAEA's facility-specific safeguards (INFCIRC 66 Rev. 2 ) but contains a number of "India-specific" modifications that raise serious questions about the meaning and legal requirements established by the agreement, particularly as they affect its entry into force and the conditions under which safeguards may be terminated on facilities and materials subject to the agreement.

The Government of India has sought to avoid any limitations on its nuclear weapons program or the possibility of sanctions in the event that it decides to resume nuclear testing. For instance, citing language contained in the non-binding preamble and in certain operative sections of the agreement (Articles 52(c), 29, 30 (f), and 4), Indian officials have suggested that India could terminate IAEA safeguards if fuel supplies are cut off and/or take other unspecified "corrective actions," even if suppliers suspend or terminate nuclear exports to India because New Delhi renews nuclear testing.

IAEA Board members should reject such an interpretation, which is inconsistent with the articles of the agreement that specify the grounds for terminating or suspending safeguards. It would also be contrary to the principle that nuclear materials and facilities that are subject to IAEA safeguards agreements should remain under safeguards in perpetuity. If India does not publicly acknowledge that facilities and materials placed under safeguards may not be unilaterally withdrawn from safeguards, the IAEA Board should amend the proposed agreement to ensure that this is the clear and common interpretation of the agreement.

As discussed further below, it is absolutely essential that IAEA Board members obtain an official clarification of the legal effect of the agreement, as well as a full list of the facilities and items that would be covered by it, and that the Government of India publicly agrees to the interpretation before the Board takes a decision.

Background

The proposed "India-Specific Safeguards Agreement" must be understood in the context of India's nuclear weapons status, its history, and the broader proposal for relaxing restrictions on civil nuclear trade with India first proposed by Prime Minister Manmohan Singh and President George W. Bush in July of 2005.

As one of only three states never to have signed the 1968 nuclear Nonproliferation Treaty, India refuses to accept comprehensive (a.k.a. full-scope) IAEA safeguards on its nuclear facilities and materials. India has only allowed facility-specific IAEA safeguards at a handful of foreign-supplied reactors and nuclear facilities and nuclear materials, leaving its unsafeguarded military nuclear sector free to produce fissile material for nuclear weapons, and to design and produce nuclear warheads. India is estimated to possess enough separated fissile material for 60-100 nuclear warheads and potentially far more if foreign nuclear fuels supplies allow it to devote its limited domestic fuel supplies exclusively for weapons purposes.

In 1974, India exploded a nuclear warhead using plutonium produced by the CIRUS reactor in violation of peaceful nuclear use understandings with Canada and the United States. The event triggered the termination of most international civil nuclear assistance to India and led to the formation of the Nuclear Suppliers Group. In 1978, the United States adopted a law that formally bars nuclear trade with states that do not allow full-scope safeguards. In 1992, the NSG adopted similar restrictions.

With the support of the Bush administration, India is now seeking a new safeguards agreement that would be applied to an additional set of "civil" reactors and nuclear-related facilities in order to facilitate the resumption of nuclear trade with NSG states.

Contrary to the claims of some advocates of the arrangement, facility-specific safeguards on a few additional "civilian" reactors provide no serious nonproliferation benefits given the fact that India maintains a nuclear weapons program outside of safeguards and continues to produce fissile material.

Approval of the proposed new India-specific safeguards agreement would be followed by consideration by the NSG perhaps as soon as late-August or September of a U.S. proposal to exempt India from its guideline requiring comprehensive safeguards as a condition of nuclear supply. If the NSG decides by consensus to exempt India from this requirement, NSG members could export major nuclear items to India.

In the case of the United States, the Henry J. Hyde United States-India Peaceful Atomic Cooperation Act of 2006 defines the terms and conditions of possible future U.S. nuclear trade with India. It requires-among other steps-that "India has provided the United States and the IAEA with a credible plan to separate civil and military nuclear facilities, materials, and programs, and has filed a declaration regarding its civil facilities and materials with the IAEA." In addition, the Indian-IAEA safeguards agreement must apply to those facilities "in perpetuity in accordance with IAEA standards, principles, and practices, including IAEA BoG Document GOV/1621 ..."

Key Issues

The central question for the IAEA Board of Governors is whether the proposed India-specific safeguards agreement is consistent with IAEA standards and practices and whether there is a common understanding between the Government of India and the IAEA Board regarding the terms and conditions of the agreement.

Unfortunately, this is does not appear to be the case in three critical areas:

1. Termination of Safeguards: Indian government officials have implied that certain sections of preamble combined with specified operative articles of the agreement would allow India to withdraw certain facilities from the agreement if fuel supplies to India are interrupted.

The preamble notes that:

"India will place its civilian nuclear facilities under Agency safeguards so as to facilitate full civil nuclear cooperation ...and to provide assurance against the withdrawal of safeguarded nuclear material from civilian use at any time."

The preamble also notes, in part, that:

"An essential basis of India's concurrence to accept Agency safeguards under an India-specific safeguards agreement...is the conclusion of international cooperation arrangements creating the necessary conditions for India to obtain access to the international fuel market, including reliable, uninterrupted and continuous access to fuel supplies from companies in several nations, as well as support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India's reactors;"

Without defining the term "corrective measures," the preamble notes that:

"India may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies."

Article 4 of the proposed India-IAEA safeguards agreement departs from standard INFCIRC 66 form by stating that:

"The application of safeguards under this Agreement is intended to facilitate implementation of relevant bilateral or multilateral arrangements to which India is a party, which are essential to the accomplishment of this Agreement."

While it is not unusual for safeguards agreements to refer to separate bilateral or multilateral arrangements, it is noteworthy that Article 4 says that these are "essential to the accomplishment of this Agreement." The Board of Governors should obtain an official clarification from the Government of India whether it takes the view that, if the "relevant bilateral or multilateral arrangements" have not been implemented fully, it could terminate the safeguards agreement, or selectively withdraw from safeguards indigenous reactors?

In fact, unilateral termination of safeguards is not permitted under the Agency's safeguards system, nor is unilateral termination by India explicitly provided for in the operative sections of the proposed India-IAEA safeguards agreement governing termination.

Specifically, Article 29 of the proposed Indian-IAEA safeguards agreement states that:

"The termination of safeguards on items subject to this agreement shall be implemented taking into account the provisions of GOV/1621."

According to operative paragraph 11, items subject to this agreement include facilities as well as nuclear material.

GOV1621 makes clear that safeguards may be terminated by the Agency only when the IAEA determines that the nuclear material is no longer safeguards relevant; that is if it has been consumed or exported or has reached a physical state where safeguards are no longer necessary given the chemical composition of the material. (1)

Furthermore, Articles 32 through 34 specify the circumstances under which safeguards may be terminated on nuclear material and facilities subject to the agreement. In the case of facilities safeguards may be terminated only if India and the Agency "jointly determine that the facility is no longer usable for any nuclear activity relevant from the view of safeguards."

Bottom line: the new Indian-IAEA safeguards agreement does not allow India to legally and unilaterally withdraw safeguarded nuclear materials or facilities from safeguards for any reason. Safeguards on nuclear material and facilities may be terminated only in accordance with the terms and conditions specified in Section E of the proposed India-IAEA safeguards agreement.

It is absolutely essential that IAEA Board members obtain an official clarification of the legal effect of the agreement, and that the Government of India publicly agrees to terms and conditions under which safeguards on nuclear material and nuclear facilities subject to the agreement may be terminated, before the Board takes a decision.

It is also essential that the Government of India fully explains what "corrective actions" it envisages to ensure an uninterrupted operation of its reactors in the event of disruption of foreign fuel supplies. If India takes the position that such corrective measures may involve the termination of the safeguards agreement or the application safeguards to certain facilities, IAEA Board members should reject this interpretation and move to strike the "corrective measures" reference.

In the realm of safeguards, there is no room for ambiguity.

If India takes the view that it may unilaterally withdraw from safeguards nuclear materials and facilities made subject to the proposed India-IAEA safeguards agreement, the IAEA Board should amend the proposed agreement to ensure there is no doubt whatsoever that termination of such safeguards must be a joint IAEA-India determination.

2. Absence of a Declaration Listing Items and Facilities & Entry Into Force:The proposed India-IAEA safeguards agreement does not contain a declaration of the facilities, items, and materials it is agreeing to place under safeguards. Article 13 states that:

"Upon entry into force of this Agreement, and a determination by India that all conditions conducive to the accomplishment of the objectives ... are in place, India shall file with the Agency a declaration, based on its sovereign decision to place voluntarily its civilian nuclear facilities under Agency safeguards in a phased manner."

The document, however, does not include a declaration of facilities. India is asking the Board of Governors to approve a safeguards agreement for an unspecified set of facilities. While India has recently circulated its separation plan listing the facilities that it proposes to place under the proposed India-IAEA safeguards agreement (INFCIRC/731dated 25 July 2008) and the years when it intends to place each facility on the safeguards inventory, it appears that India is reserving the right to amend or adjust the list or to delay the dates on which it promises to place facilities on the safeguards inventory ,depending on India's "access to the international fuel market, including reliable, uninterrupted and continuous access to fuel supplies from companies in several nations..."

This is the first time that the implementation of a safeguards agreement with the Agency would depend on purely commercial conditions. This proposed procedure would require the Board of Governors to take a decision on a safeguards agreement that may hinge upon the terms of undisclosed or not-yet-concluded bilateral nuclear cooperation agreements. What will happen if India is not satisfied with these supply agreements? Will India amend or reverse its commitment to place one or more facilities on the safeguards inventory of the proposed agreement?

The Board should not take a decision on the agreement until such time as India makes a formal Declaration. To the extent that India insists on withholding the Declaration pending the outcome of fuel supply commitments, it should clarify whether and how such supply agreements relate to Indian decisions to place facilities on the inventory of the proposed India-IAEA safeguards agreement.

3. Status of Material Subject to Safeguards Under Previous Agreements:Several states, including France, Canada, Russia, and the United States, have in the past provided fuel supplies and facilities under separate safeguards agreements to India. The IAEA Board of Governors and India should have the same understanding that the materials and facilities subject to those safeguards agreements shall remain under Agency safeguards and can only be terminated in accordance with the provisions in Articles 32 through 34 in the proposed India-IAEA safeguards agreement.

Conclusion

The proposed India-IAEA India safeguards agreement submitted to the Board contains several ambiguities and raises a number of fundamental questions. IAEA Board members should reject interpretations of the agreement that are contrary to the principle that nuclear materials and facilities that are subject to IAEA safeguards agreements should remain under safeguards in perpetuity.

It is also essential that India clarify its position on various ambiguous provisions of the proposed agreement, particularly those dealing with:

  1. the termination of safeguards;
  2. the relationship between "corrective measures" regarding commercial fuel supply arrangements and the continuity of safeguards; and
  3. the relationship between those supply arrangements and the willingness of India to place materials and facilities under the safeguards agreement that it is committed to on the time schedule it has promised.

Without proper clarification, the agreement would undermine the credibility of the IAEA and set a number of precedents that may have far reaching adverse consequences the non-proliferation regime.

Finally, there is no reason that the Board of Governors should be rushed into a hasty decision on this proposed safeguards agreement given its far-reaching implications.

NOTE:
1. GOV/1621 is a technical document developed in 1973 to help standardize the duration and termination of IAEA facility-specific safeguards agreements. The text is available from <http://armscontrol.org/system/files/GOV1621.pdf>.

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Daryl G. Kimball is executive director of the Arms Control Association; Fred McGoldrick is a Principal of Bengelsdorf, McGoldrick, and Associates, LLC and was a senior official with the U.S. Department of State; Lawrence Scheinman is distinguished professor at the James C. Martin Center for Nonproliferation Studies in Washington, D.C., and was assistant director of the Arms Control and Disarmament Agency during the Clinton administration.

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