[Reader-list] A Brief Overview of "123" Agreement

[prakash ray]

*A Brief Overview of "123" Agreement

*

The Nuclear Deal started with the Bush-Manmohan Singh joint statement
of July 18, 2005. For the US, the nuclear deal was the bait with which
to get India into the US strategic net. For the Manmohan Singh
Government, the nuclear deal was the cover under which India could
enter a strategic partnership with the US. The 123 Agreement is the
one, which makes the deal operational, the "123" name coming from the
section 123 of the 1954 Atomic Energy Act, which governs all civilian
cooperation agreements with the US.



The premise of the Deal was that India would be allowed to break out
of its nuclear isolation following the 1974 Pokhran I and 1998 Pokhran
II tests. In order to allow the US to enter into nuclear trade with
India as per the Deal, the US Congress had to adopt enabling
legislation amending the sanctions earlier imposed. Putting together
drafts of the two Houses, the US Congress finally passed the Hyde Act
in December, 2006.



Question:  What were some of these key assurances that the Prime
Minister gave in the statement to the Parliament?

The PM made two statements to the Indian Parliament, one soon after
the Bush- Manmohan Singh joint statement and the other, in response to
mounting criticism in India to US pressures and opacity in the
negotiations, after the finalisation of the separation plan of
civilian and military nuclear facilities prior to the above
legislative process in the US Congress. The PM had assured Parliament
that:



 1.. India would have access to full civilian nuclear technology and
lifting of all technology sanctions
 2.. No annual certification of good conduct by the US President
would be required as was being proposed in the draft Bills before the
US Congress
 3.. Any linkage with India's independent foreign policy would be
unacceptable
 4.. Life-time supply of nuclear fuel would be assured
Question: How does the Hyde Act go against these assurances and
guarantees given in the Prime Minister's statement?

Once the Hyde Act was passed, it became clear that a number of these
assurances were not going to be met or would be met only partially.
The Hyde Act made nuclear trade with India conditional upon the US
President ensuring, and annually certifying, that India's foreign
policy was in line with US interests, that it would work closely with
the US to isolate or even sanction Iran, that it would formally
declare support to the controversial Proliferation Security Initiative
including interdiction in international waters. It denied India access
to technology for enrichment, reprocessing and for heavy water. It
also made clear that if the Deal were terminated, not only would US
fuel supplies stop, the US would also work with other suppliers to
ensure full stoppage of supplies to India. India had bitter experience
of such policies when the US had stopped fuel supplies to the Tarapur
reactor after Pokhran-I and had not allowed India to either reprocess
or send back the spent fuel. The Hyde Act provision therefore meant
that India's nuclear power program would be hostage to the US
continued goodwill.

Those supporting the deal have argued that these sections in the Act
are non-binding and therefore India need not care about them. However,
what is being deliberately overlooked is the annual certification
clause, by which the US President will give a "good conduct
certificate" to the US Congress India in living up to the Hyde Act. In
case such a certificate is not forthcoming or if the Congress is not
satisfied with the US President's certificate, the US can terminate
the 123 Agreement. The deeper we are in a nuclear co-operation
agreement with large investments made on imported nuclear reactors and
fuel, more the potential for blackmail.

Question: Will the '123 agreement' help the Government to maintain the
assurances given earlier and recover the ground lost with the passage
of the Hyde Act?

The PM had earlier said that through this deal, we would secure full
co-operation on civilian nuclear technology including the complete
fuel cycle. It has now been conceded that fuel cycle technologies will
remain under sanctions, as will other so-called "dual-use"
technologies, meaning that India can be denied any advanced technology
under the pretext that it can have military application as well.
Therefore, a major portion of the technology sanctions regime in place
for several decades now would remain even after this Deal.
Incidentally, the Fast Breeder Reactors will also be regarded as
engaging in reprocessing operations and therefore come under
sanctions, even if we put them under safeguards.



According to the PM, India has secured a lifetime fuel security
guarantee in the Agreement and claims that the relevant clause ensures
that the US will intercede with other countries to help India get over
any disruption in supplies. Several experts have pointed out that this
clause is applicable only when disruption of supplies has been caused
for other reasons than termination of the agreement by the US.
Clearly, in case of termination, the Hyde Act provision that the US
will work with others to deny India fuel supplies would become
applicable.

The other serious problem in the agreement is the termination clause
itself. The provision for consultation in case of termination is only
cosmetic and has no force. The clause is wide-ranging and the US can
terminate the contract under any number of pretexts such as an adverse
report in the President's annual certification on India's foreign
policy. Upon termination, the agreement calls for return of all
materials and equipment supplied earlier. Some compensation payments
are called for but India will face huge dislocation in power
generation. The omnibus nature of the termination clause allows the US
to use the Congress or the Presidential annual certification to
threaten India's nuclear energy programme, the very raison d'etre for
the Agreement! The more the investment in nuclear energy based on
imported fuel and reactors, the bigger the threat.

The Government is now saying that that the Nuclear Suppliers Group
(NSG) would give India better terms and therefore we have no cause for
worry either for technology or for future fuel requirements. If this
indeed happens, US suppliers of reactors and equipment would find
themselves at a disadvantage in the Indian market. It defies belief
that the US would steer India's case at the NSG, which works by
consensus, against its own commercial interests!

Question: Why have the Left parties asked the UPA Government not to go
forward on further negotiations on the India-US nuclear deal?

A number of experts and commentators had pointed out the problems with
the Hyde Act. The CPI(M) had asked the Government not to go ahead with
123 negotiations without first resolving these issues. Even though the
Government does not have a majority in the Parliament on this issue,
it decided to go ahead with its own agenda on the nuclear deal.

The negotiations for the 123 Agreement were held in great secrecy and
the text released only a week after it had been finalised. In spite of
a number of questions that have been raised on the relationship
between the Hyde Act and the 123 Agreement, the Government wants to go
ahead with the deal. The Left Parties cannot accept that a minority
government goes ahead with such a divisive agreement without resolving
all contentious issues and taking Parliament into confidence.

The requisite next steps are discussions with the International Atomic
Energy Agency (IAEA) for working out India-specific safeguards for
civilian reactors and facilities, discussions with the NSG and finally
the passing of the 123 Agreement by the US Congress only after which
it would become "operational". However, if we need to review and take
stock of the 123 Agreement, we need to do it now. Once we go into
negotiations with multilateral bodies, it would be impossible for
India to change those agreements. Therefore, any re-consideration of
the 123 Agreement and the impact of the Hyde Act must be done here and
now, before proceeding any further. This is why the Left has asked the
Government not to go ahead with any further negotiations till all
these issues are addressed.