cHindu's credo- everyone should be blind

There is the old tale about communism, you have two cows. You have to take care of them, but the government takes all the milk. Similarly cHindu has a philosophy if every you cant restore sight to everyone, then all of them should be blind. Brahma Chellaney is the proponent of this stupid logic.

While the popular uprising in Yemen has splintered the security establishment there, with different military factions now in charge of different neighbourhoods in the capital Sanaa and the United States seeking to replace the Yemeni President with his No. 2, the Bahraini monarchy has employed foreign Sunni mercenaries that dominate its police force to fire on the predominantly Shiite demonstrators.

The clincher is the conclusion which reads like a manifesto from Comrades Marx and Engels.

The resort to different standards and practices in the name of promoting human freedom, unfortunately, sends the message that any society's democratic empowerment is possible only if it jibes with the great powers' geopolitical interest. The fundamental issue is whether there should be a rules-based international order or an order pivoted on military might and driven by narrow, politically expedient interests of the most powerful.

This is exactly how the world works. If you want to free the others ask your buddies at cHindu to get off their lazy behinds and do something.

The Civil Nuclear Liability Bill: Its Rationale and Related Issues

The Civil Nuclear Liability Bill (hereafter the 'bill') which the government was planning to introduce in parliament recently but later postponed on second thoughts has turned out to be quite a controversial issue. Reading newspaper articles on the subject, I got the feeling that a lot of people do not really understand it well enough to appreciate the rationale of this legislation. So I am writing this post in part as a '101 for dummies' on the subject and in part to provide my perspective on prominent aspects of the bill.

1. The first question is whether India ought to build a nuclear industry. This is a separate but related issue with many opposing the idea for several reasons (high cost of power, prospect of catastrophic disasters with long term and widespread consequences, etc.). If one believes that answer is no, a lot of the criticism being heard about it make sense. This discussion is beyond the scope of this post and it suffices here to simply note that the government believes that building this industry is in the national interest.

2. If we accept the government's contention, the next question is whether we need to create a statutory arrangement to deal with possible future nuclear accidents. Such occurrences are infrequent but can be very expensive to deal with which raises important issues of who should pay and how much towards cleaning up and compensating victims. Those responsible for the damage may not be able to adequately pay for the effort even if all their assets are utilized. Countries all over the world have devised various systems to deal with these challenges; efforts are also underway to create an international fund to assist in such instances. All of this argues in favor of a statute rather than allow matters to be dealt with by the general tort law. The argument that we did not and do not have such a law until now and therefore do not need one in the future strikes me as absurd; making up an ad hoc arrangement after the fact may not lead to an optimal allocation of resources for any concerned party or ensure speedy and adequate compensation to victims and hardly qualifies as a justification to oppose this bill.

3. That brings us to the next question which is what the principles of such a statute ought to be. To understand that, we need to step back and ask what arrangements are usually made to deal with sudden, unexpected and heavy expenses. The answer is obvious: we take out an insurance policy. Everyone probably knows how the system works. Actuaries calculate the premium to be paid as well as the ceiling limit for coverage based on the size of the covered population, the risk involved, the anticipated size and frequency of claims, etc. Nuclear power plants, faced with a similar prospect, would be expected to do the same thing. In fact, this legislation would require them to do so (bank guarantees and investment in capital markets are alternatives and this bill allows for those options; in practice, however, they are not considered feasible).

4. The general principles of any insurance set-up also applies to the nuclear business but the market conditions are different. Firstly, unlike the automobile or health care sectors, there is only one customer here - the government which operates the nuclear plants (if private players are allowed in at some future point, we would still have a handful of customers as the case is in some other countries). The government does own and operate multiple nuclear plants and if each of them were to operate independently, you could count them as separate entities but given their total number in India, the count would still be small (relative to a country in the West relying on nuclear power). Secondly, what a plant can afford to pay as premium will depend on its revenue which in turn is determined by its electrical output as well as the price charged to its consumers per unit (Note that this is different from what a plant may have to be charged as premium in order to be covered which will depend on the safety features of the reactor, history of its operation, etc.). Higher the policy cap, higher will be the contribution of a plant which in turn will translate into higher cost of electricity for consumers (Prithviraj Chavan mentioned this in his interview). Thirdly, insuring each plant independently will greatly limit the amount covered for obvious reasons: much like providing automobile coverage to a homeless man living in his car, if there is an accident, the plant's chief asset - the reactor itself - is likely to be damaged and potentially useless for compensation purposes. What many countries therefore do is pool the resources of all the nuclear plants so as to create a much larger asset base thereby allowing for higher coverage. That may very well be a system India could adopt as well. However, the total size of the asset pool will continue to be limited by these factors which means the overall insurance limit will still be finite. This is universally the case but in India, it is particularly a concern because existing plants are all small with megawatt outputs and even with the addition of more reactors, neither the number nor the capacity is going to come anywhere close to say what the US (104) or Europe (135) has. (Foreign countries likewise have their own asset pools but efforts to create a common global insurance pool have not been successful so far. This feature is different and separate from national insurance companies purchasing reinsurance in global markets). For that reason, it is important to be wary of comparisons with numbers randomly drawn from the literature about foreign countries.

5. The previous point explains why there is going to be a limit to the insurance capacity of the nuclear market. An important and relevant question that has been raised in this respect is the distinction between plant operators and suppliers. Foreign suppliers provide reactors and other parts whereas the government owned Nuclear Power Corporation of India (NPCIL) is expected to operate the plant. It is alleged that this bill, by channeling all legal liability to operators, intends to protect foreign suppliers at the expense of the national NPCIL which would have to bear the burden of compensating for their liability.

6. To answer that, let me repeat that anyone facing a big liability of this nature is going to have to purchase insurance be it the supplier or the plant operator. Foreign suppliers have only a limited ability to purchase insurance outside India. This is again for obvious reasons: (1) much like the functioning of an automobile depends on how well its owner has maintained it and how carefully it has been driven, the safety of a reactor or any part will depend on the plant operator as well (2) since foreign insurers or for that matter, any insurer has never been involved here, India is an unknown market with uncertain risk involved. But since the supplier's product is known to them, they can still get limited coverage in certain instances as for eg., the ANI insures up to a maximum limit of $50 million (with the limitation that any payment under such a policy further reduces this limit) for prescribed markets (presently excluding India but that could change if this bill passes). It does not follow that availability of a foreign insurer implies efficiency of the arrangement - a national insurer with better knowledge of local conditions may be able to offer a better deal than a foreign company without the same exposure.

7. Secondly, any insurance premium paid by either the supplier or the operator adds to the overall cost of business which translates into a higher price paid by either the government of India to set up the plant or the general public which buys the electricity. Suppliers and operators taking out separate policies therefore offers no intrinsic advantage to a third party (i.e. the disaster victims) if they are both going to be drawn from the same pool and indeed might be disadvantageous owing to the higher cost of claims processing particularly if there is overlap in coverage; alternatively, if they were to be insured through separate pools, risk and assets would also get distributed reducing the coverage limit for each of them. Channeling of all liability to a common source thus makes practical sense. From the same standpoint, it would also make better sense to have legal channeling (i.e. parties other than the operator cannot be sued) rather than economic channeling (i.e. all parties can be taken to court but compensation is ultimately collected from a common source) so as to minimize cost of litigation which is what this bill provides for (with the exception of cl.17(b) which I discuss below).

8. The criticism of this arrangement is that suppliers are being subsidized (some argue that it is only a 'potential subsidy') and are being let off easy without their true costs being internalized. Perverse economics leads to a moral hazard as for eg., there is no incentive to develop a safer reactor in the event of a catastrophe. That is true and the problem is usually sought to be dealt with through regulation but just as with the recent banking crisis, the entire approach can be an ideological flash point and usually yields very different responses from people across the political spectrum.

9. A policy maker would have to take into account other practical considerations as well. Firstly, a nuclear disaster is a big affair and can easily lead to immediate bankruptcy of the supplier under a general tortious liability system. But even seizure and liquidation of the entire assets of a supplier may not be sufficient to meet the needs of victims though it could, to some extent, reduce the burden on other parties. Secondly, as the government argues, that daunting prospect could keep suppliers from entering the Indian market; the counterpoint being made is that this holds only for American suppliers which are private entities and not to state administered French or Russian firms, a charge the government rejects saying those countries too have been equally insistent about the need for liability protection.

10. My view is that the government claim is valid. Nuclear reactors are manufactured by large firms and are an important source of business to any country; so it is natural to expect any government to defend their interests. If the US government is willing to protect private shareholders from the possibility of lawsuits and liquidation, France and Russia can a fortiore be expected to do the same to protect state property and tax payer money. As Chavan pointed out, France and Russia did not mind either a law or a treaty arrangement. We do not know what the recent Indo-Russian agreement contains since the content has not been made public. Furthermore, even if a liability arrangement has not already been entered into, it would be naive to expect French or Russian companies to simply roll over, accept huge liabilities and fork over any compensation we demand. Their governments will surely step in and ask for an agreement in line with international practice which almost universally shields suppliers from liabilities and India, faced with pressure from a 'friendly' government with veto power in the U.N.Security Council, will have limited room to maneuver. Rather than go for bilateral treaty arrangements which may be uneven and contain clauses hidden from the public, it might make things more straightforward and transparent to have a uniform law applying to all parties. This legislation would achieve that.

11. A curious and related aspect first raised by Siddharth Varadarajan is cl.17(b) in the bill which makes a provision for the operator to seek damages from the supplier where "the nuclear incident has resulted from the wilful act or gross negligence on the part of the supplier...". As he notes, this provision is not found in the Convention on Supplementary Compensation for Nuclear Damage (hereafter CSC). The term 'gross negigence' is not defined in this context and will probably end up being determined as a question of fact by the claims commission (since courts of law are excluded under the scheme of the bill) which means that suppliers will probably have to seek insurance as well up to the operator's liability limit. A generally accepted rule is that all parties which may be held liable should be indemnified for that amount (known in legal parlance as the 'congruence principle') to avoid default but the Indian bill only requires that of the operator (cl.8(1)). This provision also deviates from the channeling principle. Further, as he points out, if India joins the CSC, the convention upon coming into force, could allow Indian third parties and the GoI to sue in foreign courts seeking enforcement of damage settlement terms laid down by an Indian court against supplier firms in those member nations though in practice, I doubt that such lawsuits will be successful in the absence of a pre-existing contract to that effect (enforcement is only possible provided the judgment is not contrary to the public policy of the enforcing state, a condition which will be difficult to meet because the CSC itself explicitly holds that the operator alone may be held liable for any such damage). All in all, this is an anomalous inclusion inconsistent with the overall scheme of the bill and it would be better to either define it clearly or remove it altogether. From a political standpoint, the latter option may be difficult to do. Opposition parties which are already up in arms would scream bloody murder if any such move were made.

12. So far, I have explained why caps on the operator and the supplier make sense. That brings us to the third question of total liability. The bill caps the government's own liability at 300 million SDR, the minimum figure mentioned for state liability in the CSC. Soli Sorabjee objected to such an 'inflexible cap' arguing that the extent of damage of any nuclear accident cannot be reliably estimated ex ante and it is better to frame appropriate guidelines and allow the rest to be determined by a judicial forum. There is considerable force in this suggestion. Another question follows from the provisions of the CSC. An important benefit of joining the CSC (assuming this law is an enabling instrument to do that) is that upon coming into force, it will require all contracting states to contribute funds when the compensation amount exceeds 300 million SDR (or a greater amount specified by a state prior to the incident) according to a prescribed formula. If India caps total liability at 300 million SDR, in effect, it rules out the prospect of obtaining assistance from other countries whereas the reverse would not be true. Also, unlike cl.6(2) which allows the government to alter the operator's liability by notification, cl.6(1) has no such provision. Unless someone can explain how this makes sense, I fail to see how this cap is meaningful. The government could do one of several things: (a) remove the cap and do nothing else (b) remove the cap and incorporate a particular amount as a guideline (c) limit the state's compensation to a particular amount while leaving the liability itself uncapped (d) add a proviso allowing the Center to modify the amount. There may also be other alternatives.

13. Lastly, questions have been raised about the constitutionality of some provisions of the bill. It has been alleged that they are inconsistent with art.21 jurisprudence as laid out by the Supreme Court. Evolution of the strict and absolute liability doctrine in the Indian context is briefly explained in this Frontline article. As Chavan explained, these decisions signified improvisations in tort law by the Supreme Court in the absence of specific legislative guidance to deal with novel situations. This bill does incorporate the no-fault liability (while not excluding tort liability which may be pursued separately) and the 'polluter pays' principles. The chief distinguishing element is the liability limits and a constitutional challenge under art. 14 (equal treatment of nuclear disaster vis-a-vis other disaster as pertinent to compensation for third parties) and art.21 (denial of adequate compensation amounting to violation of individual right to life and liberty) will have to be determined afresh in light of the 'reasonable, just and fair' standard enunciated in Maneka Gandhi v. Union of India 1978 AIR 597 as and when a challenge is considered by a superior court. This is a vague and arbitrary standard and the outcome is likely to be determined based on a variety of subjective and political factors. A review of comparative laws and relevant judgments in prominent foreign courts (such as the US Supreme Court's decision in Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59 (1978)) could be an important factor in swaying judges. In recent years, the Court has repeatedly stressed the need to balance the case for development with concern for the environment though what that ideal balance is or ought to be remains unclear and very contentious. Making an educated guess, I would predict that protection of suppliers and the cap on operator liability will be upheld. As for total liability, it is harder to say how it will play out. A facial challenge based on hypothetical concerns could yield an outcome different from an applied challenge when faced with the exigencies of a post-incident situation.

14. Cl.35 barring civil courts from jurisdiction over matters pertaining to the Claims commission has rankled many political parties and commentators who have described it as unprecedented. It is quite unusual to see something so dramatic and I am inclined to think that the primary motivation is to reduce delays. As we all know, Indian civil courts have been plagued by the problem of overflowing dockets resulting in lengthy delays in case resolution. Creating specialized tribunals and limiting the appeals process are two ways to deal with this problem. Usually, the downside would be that denying multiple levels of review increases the chances of error and removing the supervision of the highest court could end up creating bad law for the country. In India's specific case, I am not sure either of these necessarily holds true. A specialized forum devoting all its time to one kind of cases will likely have more time to deal with them and more importantly, far more experience dealing with the issue than a High Court or Supreme Court which deal with a variety of issues. Routine matters of claims resolution are no doubt different from questions pertaining to statutory interpretation which ought to normally belong in the domain of the superior courts but in our system, absent judicial reform, there are probably not a lot of advantages to this demarcation either. All of this is nevertheless largely theoretical; the reality is that the Supreme Court is extremely aggressive in defending its prerogative of judicial review which it sees as near absolute. In the 2007 case I.R.Coelho v. State of Tamil Nadu and Ors., the court did not hesitate to effectively nullify a provision incorporated through the First Amendment in 1951; only last month, in The State of West Bengal and Ors. v. The Committee for Protection of Democratic Respondents Rights, a challenge to the jurisdictional authority of High Courts in calling for CBI investigations failed despite clear statutory language and an explicitly circumscribed constitutional mandate. The odds are therefore excellent that even if the final version of this bill contains this provision, it will be struck down if and when challenged in court.

14. In conclusion, overall, the proposed bill is not just consistent with international practice but also delineates a pragmatic approach taking into account domestic limitations. Specific provisions such as the total liability cap under cl.6(1) and operators' right to recourse against suppliers under cl.17(b) may be disputed and should be reconsidered. Amounts prescribed for the liability caps are debatable too. Others such as cl.35 which may not pass judicial muster are preferably redrafted or dropped. More issues may well come up as the debate goes forward.

Manmohan's nuclear sellout

Under the din of the Women's reservation bill, Manmohan Singh has tried to surreptitiously pass the nuclear-accident liability bill. You can tell there is something terribly wrong with our "honest" PM. Brahma Chellaney points out the failings of the nuclear deal (and our "honest" PM). Excellent article. Highly recommended.
India's nuclear-accident liability law: An anti-market bill that weakens safety

The Civil Liability for Nuclear Damage Bill is an unparalleled piece of legislation: It aims to make foreign builders of nuclear reactors in India immune from legal action, however culpable they may be for a catastrophic accident. And it caps their liability at a ridiculously low Rs500 crore ($109 million) despite the billions of dollars in profit they are set to make. Yet, the government set the parliamentary process for the Bill’s consideration in motion under unusual circumstances—it circulated it to members on 8 March when Parliament was in turmoil over the women’s reservation issue.

The Letter Controversy: Allegations and Reality

The release of a State Department letter to the House Foreign Affairs Committee has supposedly embarrassed the Indian government causing it trouble no end or so goes the top headline in much of the media today. Yet, amazingly, I am yet to see anything all that new in this latest letter (BJP members have been referring to this Washington Post article). It spells out what has been said before by various US government officials. NDTV's grouse was this: 'While much of the letter is similar in substance to the arguments one has heard but the tone and tenor is what is riling the Indians'. Now, what is that supposed to mean? A punch packed in polite language is fine but to call a spade a spade is not? If style is supposed to matter more than substance, that speaks volumes of what the focus of our media has become - an emotional and impetuous bunch, more interested in rabblerousing than in any thoughtful or reasoned comment.

The only article where I found where the implications of this letter mentioned in some detail was in Rediff by Brahma Chellaney. Yet on closer examination none of his assertions stand up to scrutiny. Below are his points and my comments on each of them.

The US has given no binding fuel-supply assurance to India. The prime minister told the Lok Sabha on August 13, 2007 that 'detailed fuel supply assurances' by the US for 'the uninterrupted operation of our nuclear reactors' are 'reflected in full' in the 123 Agreement. But the Bush administration has denied this. Its letter to the House Committee states that the US will render help only in situations where 'disruptions in supply to India... result through no fault of its own,' such as a trade war or market disruptions. 'The fuel supply assurances are not, however, meant to insulate India against the consequences of a nuclear explosive test or a violation of nonproliferation commitments,' the letter said. The letter also reveals that the US has given no legally binding fuel-supply assurance of any kind.

The PM's words (you can find his speech here) ought to be understood to mean that the fuel supply assurances hold so long as the agreement remains which is what one expects to happen in the ordinary course. The letter says that a nuclear test will lead to termination of the agreement in which case, whatever is contained in it will also be voided. In other words, no agreement, no fuel supply. These words of the PM cannot be construed to have addressed a post-nuclear test scenario; the PM was only talking of a situation where the agreement remains but the fuel supplies are interrupted notwithstanding these provisions - that is exactly the kind of situation in which the US would help us restore the supply.

No US consent to India's stockpiling of lifetime fuel reserves for safeguarded power reactors. The prime minister had told the Lok Sabha on August 13, 2007 that, 'This Agreement envisages, in consonance with the Separation Plan, US support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply for the lifetime of India's reactors.' But the Bush administration's letter to the House Committee makes clear that India will not be allowed to build such stocks as to undercut US leverage to re-impose sanctions.

The US has not said that it will not allow India to build a strategic reserve - the exact words in the letter are 'The parameters of the proposed 'strategic reserve' and of India's capacity to acquire nuclear fuel for its reactors will be developed over time.' His claim that India will not be allowed to build such stocks as to undercut US leverage to re-impose sanctions is therefore premature.

US civil nuclear cooperation is explicitly conditioned to India not testing ever again. The prime minister told the Lok Sabha as recently as July 22, 2008 that, 'I confirm that there is nothing in these agreements which prevents us from further nuclear tests if warranted by our national security concerns. All that we are committed to is a voluntary moratorium on further testing.'

Last year, he had told Parliament that, 'There is nothing in the Agreement that would tie the hands of a future Government or legally constrain its options to protect India's security and defence needs.' The Bush administration, however, has told the House Committee that India has been left in no doubt that all cooperation will cease immediately if New Delhi [Images] conducted a test.

There is nothing in this letter that contradicts the PM's position. India has not committed anywhere in the 123 agreement to a moratorium on future testing. He mistakes the right to conduct a test with the cost of doing so. For example, we all have the right to smoke but that does not mean all of us will simply because we are also aware that availing of it also brings with it costs that we may not be willing to pay. Likewise, we are free to test provided we are willing to live with the loss of this agreement and all the advantages it brings with it along with a host of other losses that will follow from international sanctions. With increasing international trade and greater integration into the global system, the cost of defying the US-led international order is undoubtedly going to rise. In that sense, he is absolutely right - testing in 2009 or beyond will be a much more expensive decision for India than what it was in 1998.

The US has retained the right to suspend or terminate supplies at its own discretion. The Bush administration letter plainly contradicts the prime minister's assertion in Parliament on August 13, 2007 that, 'An elaborate multi-layered consultation process has been included with regard to any future events that may be cited as a reason by either Party to seek cessation of cooperation or termination of the (123) Agreement.' The letter states that the US right to suspend all supplies forthwith is unfettered.

The key word is 'consultation', not concurrence or capitulation. When you say you will consult, it means you will be willing to consider the opposite side's perspective without giving up your own prerogative to do as you please. That is exactly the position here - if India conducts a nuclear test, both sides will talk but that does not mean the US cannot walk away from the deal if it so desires. The letter also only talks of the US' right to cease all nuclear cooperation with India immediately while also noting that the agreement can only be terminated on one year's written notice and 'notice of cessation has to precede cessation of cooperation...' Again there is absolutely nothing in it to suggest that the US intends to abrogate the understanding prematurely.

The letter makes clear that the 123 Agreement has granted India no right to take corrective measures in case of any fuel-supply disruption. Rather, India's obligations are legally irrevocable. It further indicates there is no link between perpetual safeguards and perpetual fuel supply. Contrast this with what the prime minister claimed in Parliament on August 13, 2007: 'India's right to take "corrective measures" will be maintained even after the termination of the Agreement.' Or the prime minister's repeated assurances to Parliament since March 2006 that India's acceptance of perpetual international inspections will be tied to perpetual fuel supply.

The point about the lack of any link between perpetual safeguards and perpetual fuel supply has been mentioned over and over in this debate. This is not a new concern and the answer depends again on what the phrase 'corrective measures' means. So long as no one has defined it (which is still very much the case), it is hard to definitely answer one way or the other. Chellaney's guess is therefore as good (or bad) as any.

The Bush administration's letter states that the 123 Agreement fully conforms to the Hyde Act provisions. In a press release recently, the Prime Minister's Office made the following claim on July 2, 2008: 'he 123 Agreement clearly overrides the Hyde Act and this position would be clear to anyone who goes through the provisions.'

I have stated in previous posts my own discomfort with this assertion by the government. The word 'override', as I understand it, is generally used only when there is a conflict between two things - in that sense, the government's claim is false because the US has repeatedly stressed 'conformity' with the Hyde Act. Even M.K.Narayanan initially said that the agreement had been drafted in such a way as to ensure consistency. Only when allegations of capitulation to the foreign policy goals laid down in the Hyde Act began to surface, the Manmohan Singh government changed tack and insisted on making this dubious claim.

The US Supreme Court ruled a long time ago in Whitney v. Robertson that in the event of a conflict between an Act of Congress and a treaty with a foreign country, that which is later in date will prevail. That position remains the law to this day. So the argument appears to be that once the NSG waiver is obtained and the agreement is formally adopted by Congress, the Hyde Act will no longer be relevant. However, this argument too does not hold a lot of water for two reasons: if the agreement is written in a way as to ensure consistency with the Hyde Act, a legal dispute will not arise at all in the first place. Secondly, before one can be said to override the other, the first impulse of any legal authority will be to endeavor to construe the two legislations in such a way as to give them both effect (this point has also been emphasized by the US Supreme Court). Thus, on both of these grounds, the government's claim is questionable. Moreover, as I mentioned before, such questions pertaining to foreign policy are usually political decisions and such legal technicalities are often secondary. If the President decides to penalize India, none of this legal quibbling is likely to matter much to our case.The point here is however that this letter does not change any of this.

The letter assures Congress that the 'US government will not assist India in the design, construction or operation of sensitive nuclear technologies.' That rules out not only the transfer of civil reprocessing and enrichment equipment or technologies to India even under safeguards, but also casts a shadow over the US granting India operational consent to reprocess spent fuel with indigenous technology. Under the 123 Agreement, India has agreed to forego reprocessing until it has, in the indeterminate future, won a separate, congressionally vetted agreement.On one issue, the 123 Agreement had held out hope for India in the future by stating in its Article 5(2) that, 'Sensitive nuclear technology, heavy water production technology, sensitive nuclear facilities, heavy water production facilities and major critical components of such facilities may be transferred under this Agreement pursuant to an amendment to this Agreement.' But the Bush administration's letter to Congress states that the US government had no plan to seek to amend the deal to allow any sensitive transfers.

Contrast this with what the prime minister said in Parliament on August 17, 2006 -- that India wanted the 'removal of restrictions on all aspects of cooperation and technology transfers pertaining to civil nuclear energy, ranging from nuclear fuel, nuclear reactors, to reprocessing spent fuel.' Lest there be any ambiguity regarding this benchmark, he added: 'We will not agree to any dilution that would prevent us from securing the benefits of full civil nuclear cooperation as amplified above.' Earlier, on August 3, 2005, he told the Lok Sabha that he had received 'an explicit commitment from the United States that India should get the same benefits of civilian cooperation as (an) advanced country like the United States enjoys.'

This point too has been debated extensively in the past. This fact that the US may not be able to provide us the technologies we seek was well known. The argument has been that once this waiver is concluded, we will be able to attempt to buy from other sources what the US may not be willing to give us. Again, there is nothing in the letter to alter any aspect of this issue.

The Hindu Rails Against the Government Approaching the IAEA

The Hindu has come out strongly against the government’s decision to ask the IAEA to circulate the initialed draft amongst members of the Board of Governors.

By sending the draft safeguards agreement to the Board of Governors of the International Atomic Energy Agency before facing a vote of confidence in the Lok Sabha, the Manmohan Singh government has violated not just an assurance its External Affairs Minister gave the nation two days earlier but also the most fundamental of democratic norms. As Pranab Mukherjee put it in a press conference, the norm is that a government that has lost its majority will not have the moral auth ority to “bind” the country to “an international agreement.” The reason the Congress-led government is abandoning both procedure and propriety is not hard to find. The Bush administration’s principal concern at this juncture is that there should be enough time for the American legislative process to be completed following the proposed change of guidelines by the Nuclear Suppliers Group. The indecent haste with which the IAEA Secretariat was instructed to circulate the draft agreement to the Board of Governors offers a fresh basis for the charge that the Manmohan Singh dispensation is concerned more with fulfilling its commitment to the Bush administration than in looking after the interests of the Indian people. What is more, paranoiac non-transparency has been the hallmark of the government’s handling of the nuclear deal since March 2005. In the latest instance, the text of the draft safeguards agreement negotiated with the IAEA secretariat was kept a secret from political India after it was falsely claimed that IAEA procedure required the Indian government to treat it as a “privileged” and confidential document.

Pranab Mukherjee said that this was only being done to save time and if the government lost the vote of confidence, it would withdraw the request for the meeting of the Board. So long as the vote is held before that meeting, there is no case for claiming that any democratic norm is being violated.

Does the hurry have something to do with the calendar of the US congress? Absolutely. The government is anxious to complete the agreement during the Bush presidency as the policy stance of a future president is not known. These facts have all been perfectly clear for quite a while. But in pushing forward with it after more than a year, surely the Manmohan Singh government cannot be accused of acting in ‘indecent haste’. Nor does the editorial cite any good reason why the government has failed to ‘look after the interests of the Indian people’. The second paragraph which deals with the details of the draft accord cites no provision as being offensive or against Indian interests. Given this fact, both charges ring hollow. Lastly, is the government’s claim on the necessity to keep the text of the document confidential a lie? I have no idea whether the official explanation of diplomatic protocol is valid or not but the paper says that IAEA 'sources’ contradicted Mukherjee’s claims regarding the need for secrecy which does appear to suggest that it may well be so.

Brahma Chellaney has already written a critique of the safeguard agreement. I thought his criticism of the 123 agreement was over the top. While I find only parts of this recent article persuasive, I agree on a key point regarding the measures India is permitted to take in the event of a discontinuation of fuel supply. There is only one sentence in this agreement regarding this and it simply reads:

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

The big question being asked is what ‘corrective measures’ entails. Siddharth Varadarajan’s article sheds some light upon this point – he argues that the vague language was a deliberate attempt to satisfy both US non-proliferation lobbies and domestic opponents at the same time. The main point, as Kakodkar pointed out today, is that the agreement is broadly written and details regarding fuel supply and reprocessing would have to be worked out in the future when specific subsidiary agreements are negotiated with the US or other states. So long as they are consistent with the provisions of this Act – I have found no reason to believe otherwise – this accord looks quite reasonable.

Update: Read this article in the WSJ that highlights prominent American concerns regarding the deal. Apart from similar questions being asked about fuel supply assurances, he says:

India will make a unilateral statement aimed at reserving its right to expel IAEA inspectors from reactor sites if the U.S., or other fuel suppliers, suspend nuclear fuel shipments for any reason -- including Indian resumption of testing. Indian officials are also likely to plead for nuclear fuel supply guarantees so the country can stockpile uranium fuel against future nuclear fuel supplier cutoffs that might occur -- again, following a future nuclear test. If, as expected, no IAEA board member or NSG country objects to these Indian statements, India will construe the silence as assent.

If indeed this is true, it is quite consistent with Kakodkar's assurance that 'the agreement allows India to stockpile nuclear material to meet the lifetime fuel requirement of imported reactors, reprocess the spent fuel and follow its closed fuel cycle programme to get the full benefit of the imported fuel'.