Knots and Glitches Remain in Indo-Aus Nuclear Deal

Published: 12th May 2015 06:00 AM  |   Last Updated: 12th May 2015 03:34 AM   |  A+A-

The Indo-Australian nuclear agreement was signed on September 5, 2014, during the New Delhi visit of Australian prime minister Tony Abbott. Article XIV of the agreement provides that it will enter into force on the last date upon which the parties notify each other that their domestic requirements have been met. During the last two months the agreement is being debated in the Australian parliament.

The treaty-making procedure in Australia devised in 1996 requires all agreements/treaties to be subjected to a National Interest Analysis (NIA). The NIA report observed India plans to generate about 27.5 gigawatts by 2032 from nuclear reactors that will largely depend on imported uranium. India is thus a vast and reliable upcoming market for Australian uranium. Australia’s current uranium exports worth about $700 million per year is stagnant but annual export to India is expected to touch over $114 million during the next two decades. The NIA report further says the agreement is in full compliance of global non-proliferation requirements and it would lead to an effective strategic partnership between the two countries. The agreement was open to public comments before submission to the Joint Standing Committee on Treaties and then to the parliament for approval and ratification.

Australia holds 31 per cent of world’s uranium deposits and is currently exporting to 41 countries including the US, EU, Canada, Japan, South Korea and China. Australia has faced tough domestic problems in mining uranium, particularly on the environmental aspect and non-proliferation. In the circumstances the Australian government appointed the Justice Russell Walter Fox inquiry committee for devising a policy on uranium export and mining. The first report released in October 1976 recommended no sale of Australian uranium to any country not signatory to the NPT. It further recommended that the exports should be subject to the fullest and most effective safeguards agreements supported by fully adequate backup safeguards to apply to the entire civil nuclear industry in the importing country. The report also dealt with limitations and weakness of the existing international safeguards and concluded that the problems “are so serious that the existing safeguards may provide only an illusion of protection”. It is noteworthy that Australia had already signed the IAEA Safeguards in July 1974 and had applied it to its all nuclear activities but such a scathing comment from the Fox Committee had serious repercussions.

In view of the Fox Committee report Australia enacted its own stricter Nuclear Non-Proliferation (Safeguard) Act 1987 to be applicable to all its nuclear activities and materials whether utilised domestically or exported. Basically, the origin of all the knots and glitches in the Indo-Australian nuclear agreement can be traced to the differences in the standards of the domestic legislation and international IAEA safeguards. While India maintains that having signed IAEA Safeguards and the Additional Protocol it has achieved full-scale global non-proliferation objectives, Australia remains unsatisfied.

Section 51 of the Safeguard Act 1987 requires that the Director of Safeguards shall annually submit to the minister a report that will include information on all nuclear materials of Australian origin transferred to any foreign jurisdiction or between foreign jurisdictions. The information must note the total quantities of nuclear fuel and materials in each stage of the nuclear fuel cycle and their intended end uses by the importing countries and the items transferred to each jurisdiction. This involves accounting and tracking of the Australian obligated nuclear materials in Indian reactors which India considers firstly as an intrusion in its domestic affairs and secondly, it rightly believes this is unnecessary in view of the international safeguards India has signed with IAEA. In fact, India has sorted out this issue with other suppliers like the US and Canada who are not insisting on tracking and accounting. Australia, on the other hand, holds that tracking and accounting is a necessary part of its domestic law and has been incorporated in all of its 23 agreements with the 41 other nations to whom it has been exporting uranium. It also believes the IAEA safeguards are complex and subject to multiple interpretations. Australia asserts that India has earlier promised to follow similar conditions as applicable to other countries and must adhere to it. From Australia’s point of view this requirement is not a policy that can be changed with the change in government at Canberra. It is a requirement of law that has to be strictly followed unless it is amended. John Carlson, a former director general of the Australian Safeguards and Non-proliferation Office, has suggested an amendment in Article III. It reads: “Each party shall establish and maintain a system of accounting for the control of items subject to this Agreement.” Carlson’s suggested amendment is include in it at the end, “sufficient to effectively identify and account for such items as being subject to the Agreement”. These words look superfluous, harmless and un-hurtful to Indian interests or sentiments and if this satisfies the Australian law and authorities, so be it. Of course it must necessarily be subject to a firm commitment and assurance for uninterrupted fuel supply during the whole life of those facilities/reactors. To make it effective but still not fully intrusive, a further amendment is being proposed under Art. VII which provides that upon request of either party, the party shall report or permit the IAEA to report to the requesting party on the status of items subject to this agreement. It is believed that India has already agreed to a similar arrangement with other suppliers like the US and Canada. India may then explore whether it is feasible through the administrative arrangements.

The other important issue relates to the supplier’s “right of return” on termination of the agreement. Both the parties firmly believe and confirm in the agreement that termination is extremely unlikely. Nevertheless, Australia claims that “right of return” is a standard condition applicable to all countries purchasing its nuclear materials. It is believed that it would involve not only logistical problems but also create costing disputes. In addition, it could lead to a sudden fuel crunch jeopardising India’s nuclear power generation. Hence, any demand for return of the Australian material must be with alternative assurances that it will not cripple or disrupt the Indian industry. This would not be easy but since India is fully committed to non-proliferation and is under constant international surveillance under the IAEA Safeguards it is highly unlikely that the Australian material would be diverted to other than peaceful purposes.

Apart from these, there are some other easily resolvable issues like consent of supplier party for reprocessing the fuel to 20 per cent and above enrichment in U-235 isotope; fall-back safeguards arrangements in the unfortunate event of IAEA safeguards becoming inapplicable and the dispute settlement via arbitration if the parties fail to arrive at an amicable solution on negotiations.

The author is a practising lawyer and a retired scientist formerly with BARC, Mumbai, and IAEA, Vienna

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