Draft IAEA Safeguards Agreement Discussion

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NRao
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Re: Draft IAEA Safeguards Agreement Discussion

Post by NRao »

Raj Malhotra wrote:I dont think we need to stock pile 100 years of fuel, stockpile of around 20 years should be adequate.
The title of the article (Perpetuity of safeguards only with perpetuity of fuel supply) is clear enough. For if India did actually get 100 years o fuel supply, the reactors will HAVE to be under 100 years of IAEA supervision. So, you are right from that PoV.

What is of importance is India is willing to talk only about civilian reactors ........ while the US via the Hyde Act is more interested in the military reactors. While India cannot enforce what to talk about with the US, she can when it comes to IAEA ........ separate the reactors and talk only about the ones on the civilian side.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by enqyoob »

Those who are opposed to the IAEA agreement draft are missing a golden opportunity to compare the India and China agreements. :eek:
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Rahul M »

narayanan wrote:Those who are opposed to the IAEA agreement draft are missing a golden opportunity to compare the India and China agreements. :eek:
and produce a piece for SRR ? :twisted:
taken to ambushing people on other threads, have you ?
seems no thread is safe from you these days ! :D
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Re: Draft IAEA Safeguards Agreement Discussion

Post by enqyoob »

VIVE L'IGNORANCE! c'est JANNAAT!

(Suit urselves .. or go in the altogether...) 8)
For he that asks no questions
Ain't told no lies

- From "The Highwayman".
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Suraj »

John Snow wrote:Suraj garu>>

You could have in nutshell said
"Past performance does not guarantee future results"
"Extrapolating past growth linearly and believing it, leads to sub prime results"
Indeed, John Snow. You also realize that the same argument applies to claims of arbitrary claims of fuel supply stoppages, sanctions etc ? Just because someone felt inclined to impose them in the past does not mean they will have neither the inclination nor means to do so in future.

I'm all in favour of concentrating economic integration with those whom we have most at stake with. It ensures they'll have much to lose from the ties as well.

Rahul M: Ah, I see you have caught on to narayanan's tactics :)
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Re: Draft IAEA Safeguards Agreement Discussion

Post by rajrang »

Suraj wrote:
rocky wrote:Suraj, you are assuming as sustained 7.5% annual rate of growth of GDP over 50 years!!! Isn't that completely unrealistic? Is there any country in the world that has managed to do that? And if yes, can it be so easily extrapolated over to the case of India?
It's a fundamental mistake to presume growth comes merely from the real GDP growth rate. Real GDP growth rate is just a statistical metric that discounts inflationary effects; it does not mean that because GDP is N trillions today and is projected at M trillion in 40 years, you can simply solve for rate and view that real GDP growth for that period will be the rate. There's the effect of inflation and currency appreciation, for starters.

Compounded nominal growth does interesting things; it is difficult to grasp because progression is not linear as our minds are accustomed to. For example the ratio of 2007-08 GDP to 1991-92 GDP is 4:1 - our economy is four times larger now than it was then, despite real GDP growth alone implying much less growth.

As I stated previously, lifetime costs of $3 trillion are not a big hurdle. It's merely a matter of the number appearing large today. As a perspective into the past, total investments in the Indian economy last year were larger than the size of India's entire GDP just under 15 years ago. Nor are capital costs insurmountable. I would rate ability to execute, both in terms of addressing administrative and eminent domain concerns, and the technical ability to scale up numbers, a more legitimate concern.

Rajrang: it is just as impossible to predict lifetime energy costs as it is to predict economic growth rate in the long term. However, that does not mean one cannot or should not extrapolate, just that they will need to take various unpredictable future possibilities into account in some manner.

It is generally easier to quantify costs where fuel supplies are within our control (domestic U & Th supplies) than the wild cards of external supplies, particularly in the case of hydrocarbons. That is, unless we find our own Ghawar field...
Suraj, You have made some good points - I want to quickly clarify what I had in mind: If the 2007 Indian GDP (in PPP terms) is 3 trilllion US dollars and if this becomes 35 trillion US $ in 2050 assuming 2 major factors, namely
1) today's dollars (excluding inflation),
2) today's assumptions behind computing PPP (including convertion rates etc.)

then, the corresponding average annual growth rate would be 6%. Obviously, this does not include inflation.

The actual dollar figure in 2050 may differ from 35 trillion due to the above.
Last edited by rajrang on 13 Jul 2008 23:24, edited 1 time in total.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Suraj »

Rajrang: the extrapolation is from the Goldman-Sachs' revised BRIC report data. Its been discussed in the economy thread and even during a BRF meeting at length. Annual nominal (not real - when you compute the rate from the present and future economy size, the value you get is nominal) growth rate of 6% is not at all unreasonable; it was ~15% last year. Please use the economy thread for any other questions though.

Disclaimers of course apply to *any* statements about the future, and that includes statements about fuel supplies and anything else. It is rather meaningless to overemphasize one future possibility and overly discount another.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by rajrang »

Suraj wrote:Rajrang: the extrapolation is from the Goldman-Sachs' revised BRIC report data. Its been discussed in the economy thread and even during a BRF meeting at length. Annual nominal (not real - when you compute the rate from the present and future economy size, the value you get is nominal) growth rate of 6% is not at all unreasonable; it was ~15% last year. Please use the economy thread for any other questions though.

Disclaimers of course apply to *any* statements about the future, and that includes statements about fuel supplies and anything else. It is rather meaningless to overemphasize one future possibility and overly discount another.
Suraj,

Maybe we should discuss this elsewhere, but last - my 6% is not the same as 15% of last year. The 6% excludes inflation. The corresponding figure for India last year was around 8 or 8.5%. Maybe we are having a communication difficulty?
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Suraj »

rajrang wrote:Suraj,

Maybe we should discuss this elsewhere, but last - my 6% is not the same as 15% of last year. The 6% excludes inflation. The corresponding figure for India last year was around 8 or 8.5%. Maybe we are having a communication difficulty?
Boss, you're getting 6% by solving for rate given GDP_today=3 trillion and GDP_2050=35 trillion, and time=42 years, compounded annually. That 6% is *not* a figure that excludes inflation, regardless of whether youre talking of absolute or PPP GDP.

Real GDP growth is a statistical measure computed on the basis of multiple real world data - it does not directly compute from GDP figures. Any rate you get by solving using real world GDP extrapolations will always entail inflation+currency exchange rate dynamics, and that is why your statement about 6% not including inflation is wrong. You will only get the figure minus inflation by subsequently extrapolating for long term rate of inflation (say using long term bond rates) and exchange rate dynamics (which are much more unpredictable due to fiat currencies).
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Re: Draft IAEA Safeguards Agreement Discussion

Post by enqyoob »

thorium language & amount is identical to that in China IAEA agreement, whatever the purpose.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by rajrang »

Suraj wrote:
rajrang wrote:Suraj,

Maybe we should discuss this elsewhere, but last - my 6% is not the same as 15% of last year. The 6% excludes inflation. The corresponding figure for India last year was around 8 or 8.5%. Maybe we are having a communication difficulty?
Boss, you're getting 6% by solving for rate given GDP_today=3 trillion and GDP_2050=35 trillion, and time=42 years, compounded annually. That 6% is *not* a figure that excludes inflation, regardless of whether youre talking of absolute or PPP GDP.

Real GDP growth is a statistical measure computed on the basis of multiple real world data - it does not directly compute from GDP figures. Any rate you get by solving using real world GDP extrapolations will always entail inflation+currency exchange rate dynamics, and that is why your statement about 6% not including inflation is wrong. You will only get the figure minus inflation by subsequently extrapolating for long term rate of inflation (say using long term bond rates) and exchange rate dynamics (which are much more unpredictable due to fiat currencies).

Good points - Including inflation, I agreee 35 trillion is a piece of cake - very conservative - again who can predict inflation. I simply assumed that 35 trillion did not include inflation - was in today's $. Thanks
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Re: Draft IAEA Safeguards Agreement Discussion

Post by svinayak »

rajrang wrote:
Suraj wrote: Boss, you're getting 6% by solving for rate given GDP_today=3 trillion and GDP_2050=35 trillion, and time=42 years, compounded annually. That 6% is *not* a figure that excludes inflation, regardless of whether youre talking of absolute or PPP GDP.

Real GDP growth is a statistical measure computed on the basis of multiple real world data - it does not directly compute from GDP figures. Any rate you get by solving using real world GDP extrapolations will always entail inflation+currency exchange rate dynamics, and that is why your statement about 6% not including inflation is wrong. You will only get the figure minus inflation by subsequently extrapolating for long term rate of inflation (say using long term bond rates) and exchange rate dynamics (which are much more unpredictable due to fiat currencies).


Good points - Including inflation, I agreee 35 trillion is a piece of cake - very conservative - again who can predict inflation. I simply assumed that 35 trillion did not include inflation - was in today's $. Thanks

What is not considered here is there will be future wars and external shocks since the economy will be integrated with global economy. This will affect the growth rate and also time for recovery
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Re: Draft IAEA Safeguards Agreement Discussion

Post by rajrang »

Acharya wrote:
rajrang wrote: Good points - Including inflation, I agreee 35 trillion is a piece of cake - very conservative - again who can predict inflation. I simply assumed that 35 trillion did not include inflation - was in today's $. Thanks

What is not considered here is there will be future wars and external shocks since the economy will be integrated with global economy. This will affect the growth rate and also time for recovery

This topic may not belong here. But I cannot help making the following additional observations:

Between 1947 and 1982, India's economy grew at anaverage annualized rate of approximately 3.5% per year (after inflation). Subtracting population growth of 2.2%, this would imply an average annualized per capita growth rate of 1.3% or so per year.

Since 2002, two startling developments have taken place. India has been growing at an average annualized rate of nearly 8.5% per year. At the same time the population growth has been plunging - 1.6% now. Subtracting, India's average annualized per capita growth is nearly 7% per year.

Thus every two years India is increasing its per capita equal to what it did every decade during the period 1947 to 1982. For a large country with over a billion people, this will shake the world - similar to China.

(Between 1982 and 2002, I do not have exact figures but I believe that economy grew at an average annualized rate of about 5.5% - subtrracting the 2+ % population growth - this works out to approximately 3.5% in per capita terms - half of today).

Clearly India is in the midst (early stages?) of an economic miracle - similar to the 20/25 year period after WW II for Western Europe, and to similar periods for the far east (Japan, Korea et al).

From historical time spans, this point of inflection in India's economic fortunes starting 2002 - clearly has world leaders taking renewed interest. (This point in time also comes close on heels of the Indian nuclear weapons tests of 1998 -maybe only a coincidence?) The first US presidential state visit since 1980 coincides with this period - probably only the second such state visit since 1947 (?). Going forward there will definitely be frequent visits. The negotiations for the present nuclear deal, that the West is very keen, also coincides with the early stages of this India's economic resurgence. That is the only reason why this discussion probably belongs in this thread.

It will be in the interests of the rest of the world (especially China) to strike a (nuclear) deal with the world's future super power during the early years of its economic resurgence. Otherwise, India's hands will only become relatively stronger within a few years and future deal will favor India more.
Last edited by rajrang on 14 Jul 2008 03:59, edited 3 times in total.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Arun_S »

Raj Malhotra wrote:I dont think we need to stock pile 100 years of fuel, stockpile of around 20 years should be adequate. During that time we will get adequte opportunities to break the logjam
Lower the guard! Why? Invite another betrayal? What is the reason India should not learn from "once bitten twice shy" and behave like all other pragmatic nations and not like a 2 bit nation of people with cognitive dissonance, or national that does not learn from history & experience? US defaulting on TAPP-1 fuel agreement (Govt to Govt), and then building "NSG - coalition of the willings" to punish India till this date is not a light matter, or not forgotten even as it continues to be penalized. Not to forget about selective nuclear proliferation to the detrimental consequence to Indian security.

US and west should be treated in their own pragmatic method of handling defaulters or parolees. Put a tight leash and enforce/prosecute to full extent the terms of the new-deal agreement.

Secondly if 20 years was adequate then why squander away other advantages that could have been accrued/bargained if India was willing to relent and agree to 20 years and not full life of the reactor terms of the draft agreement?

When a party defaults one has to apply full force of discipline to ensure the seriousness of business is not lost on the errant party.

In Hindi there is a saying: "Uddand ko Dand deekhana aur Lagaana zarroori hai" {the urchin should be often shown the stick and often applied the business end of the stick}.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Suraj »

This 100-year fuel supply argument is economically flawed. Why would anyone cut such a deal, when they have no idea what the price of fuel will be 50 years from now ? If you were a fuel supplier, would you consider it in your interests to sell to one party for what would in effect be a perpetual deal, rather than deal according to the market ? In a deal there are at least two parties. Making presumptions about a long term deal as a buyer, without any regard for the dynamics of the seller, does not help. Are we going to require similar ultra-long term guaranteed supplies of coal and oil too, and thereby pay an enormous premium to justify the paranoia ?
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Arun_S »

There are more angle than just economic in this nuclear power plant build up, and more dissimilarity vs other forms of energy fuel. Other fuel types do not involves IAEA type agreement nor supplier cartel like NSG. Other types of power plants have not suffered fuel supply/starvation issue. That is the reason IMHO only economic consideration for cost of fuel inventory buildup is not meaningful.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Suraj »

To advocate "100 year supply" and the intention to pay for it is economic *and* strategic shortsightedness. It amounts to cutting your nose to spite your face. It is pointless to argue that it has 'more than just economic' implications or that 'nuclear fuel is different'.

The economic side isn't just about money in the pocket - poor economic decisions like wanting a '100 year supply' affects us strategically - it makes no difference whether the fuel in question is crude oil or uranium. As far as cartels go, OPEC is a cartel. BHP/Rio Tinto constitute an informal ore supplier cartel. For all you know, one day in future, India might just lead an OTEC (organization of thorium fuel exporting countries).

For any such enormously long term deal, we're *not* going to get a price that's reasonable, because a seller has nothing to gain by being tied to us for, in effect, perpetuity - you and I will be long dead by then. Put yourself in Australia/Niger/some-other-uranium-supplier's place. India comes to you demanding a 100year deal. Why should you make the deal, when hydrocarbon concerns are forcing the whole world to turn to nuclear energy afresh ? Even if you were to agree, how much would you demand ? 10x current market price ? 100x ? You have nothing to lose. What happens when they tell India 10 years down the line that they're raising prices ? How does India agreeing to such an economic arrangement constitute strategic independence ?
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Arun_S »

You are saying free trade reign supreme today and India can buy oil from OPEC just like India can buy Uranium from NSG, or there are countries that can't buy oil in the world; which we all know is incorrect! So what is the difference between Nuclear fuel and Oil?

How about Indian 100 year nuclear fuel requirement giving birth to a more vigorous futures market in Uranium, that India can pit one supplier against another, and let not the question of 2X or 10X premium rise at all. Futures I am told is good tool for level ground play. AFAIK there is no market constrain if India wants to build lifetime fuel reserve in the next 5 years through various instruments that prevent buying from a relatively stable and fair (not price gougung) pricing mechanism for Shri Kakodkar's power point proposal to 50GWe LWR plants.

If and when India buys imported reactors the bid should be for consortium of power plant vendor, fuel suppliers and financiers. Let India choose which bid is worthwhile and which one is ripoff (not like Dabhol . BTW which parties negotiated the Dabhol deal from US and India side?). As a customer India dictates terms, not the other way around.


And if someone can help me understand what instruments are available that will give lifetime guearentee for the imported LWR's, that they considered it worthwhile to negotiate the issue w/IAEA?

BTW anybody knows what is the period of the term contract that Chinese negotiated w/Australian supplier last year?

Going into hibernation mode before SHQ kills me.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by NRao »

Suraj,

It does make sense.

So, how about India buying a %age of a bunch of Uranium mining operations? Is that possible?
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Re: Draft IAEA Safeguards Agreement Discussion

Post by geeth »

Does the IAEA agreement hide us from the Hyde Act?

Prabir Purkayastha

A close analysis of the draft India-IAEA safeguards agreement, and the restricted document GOV/1621, reveals that if it comes to the crunch, it is the provisions of the Hyde Act that will prevail. This is what is inbuilt in the agreement, the government’s spin notwithstanding.

Various commentators have argued that the draft IAEA Safeguards Agreement gives India considerable leeway, denied it under the Hyde Act, in taking corrective action in case fuel supplies are interrupted. To be fair, unlike government spokespersons, some of these analysts concede that all imported reactors will remain permanently under safeguards. But one of the claims adduced by these non-official defenders in support of the Agreement is that India can unilaterally withdra w from IAEA safeguards its indigenous reactors that are made subject to the Agreement, provided all the imported fuel is taken out.

This curious conclusion flows from a wholly untenable reading of Article 29 of the Agreement, which states: “The termination of safeguards on items subject to this Agreement shall be implemented taking into account the provisions of GOV/1621 (20 August 1973).” Since the latter is a restricted document of the IAEA’s Board of Governors, these non-official analysts have speculated that with respect to termination of safeguards, the import of GOV/1621 into Article 29 has let non-supplied facilities off the hook, by requiring them to be under safeguards only as long as they use imported fuel! From this, they have jumped to the conclusion that therefore for such indigenous facilities, India does not even need to invoke its preambular ‘right’ to take “corrective measures.”

Nowhere does GOV/1621 provide the remotest sanction for any such interpretation. I happen to have the text of this restricted 1973 document. It originated from the urging of “a substantial number of Governors … that there should be a greater degree of standardisation than in the past with respect to the duration and termination of such agreements as may henceforth be concluded under the Agency’s Safeguards System … for the application of safeguards in connection with nuclear material, equipment, facilities or non-nuclear material supplied to States by third parties.”

Two concepts are clearly laid out in the IAEA document for these future agreements: (a) “the duration of the agreement should be related to the period of actual use of the items in the recipient State”; and (b) “the provisions for terminating the agreement should be formulated in such a way that the rights and obligations of the parties continue to apply in connection with supplied nuclear material and with special fissionable material produced, processed or used in or in connection with supplied nuclear material, equipment, facilities or non-nuclear material, until such time as the Agency has terminated the application of safeguards thereto...”

Further, by way of exposition of these concepts, the Annex to the document makes it clear that after termination, “the rights and obligations of the parties, as provided for in the agreement, would continue to apply in connection with any supplied material or items and with any special fissionable material produced, processed or used in or in connection with any supplied material or items which have been included in the inventory, until such material or items had been removed from the inventory” (emphasis added). The only way such “items or non-nuclear material could be removed from the purview of the agreement” is “if they had been consumed, were no longer usable for any nuclear activity relevant from the point of view of safeguards, or had become practically irrecoverable.”

GOV/1621 ensures that all such materials “would be subject to safeguards until the Agency had terminated safeguards on that special fissionable and nuclear material in accordance with the provisions of the Agency’s Safeguards System. Thus, the actual termination of the operation of the provisions of the Agreement would take place only when everything had been removed from the inventory” (emphasis added).

The effect of GOV/1621, therefore, is to tighten and make more restrictive the application of IAEA safeguards to all supplied nuclear material, facilities, and items. But it is wholly fanciful to say that it empowers or even allows India to take non-supplied facilities made subject to the Agreement out of safeguards, if they no longer use supplied fuel.

For indigenous nuclear facilities that have been built without supplies from any third party, we have to consider two additional Articles of the Agreement. One is that “items” for safeguards are governed by Article 11(a), which defines items to include: “any facility listed in the Annex to this Agreement, as notified by India.” The second is Article 32, which explicitly states: “Safeguards shall be terminated on a facility listed in the Annex after India and the Agency have jointly determined that the facility is no longer usable for any nuclear activity relevant from the point of view of safeguards” (emphasis added).

If we accept that Article 32 will come into play for taking facilities out of safeguards, there are three conditions that need to be fulfilled. First, both parties — India and the IAEA — need to agree to this; it is not a unilateral decision for India to make. Secondly, the facility must no longer be usable for any nuclear activity. Any facility that produces nuclear energy is obviously usable for nuclear activity. Lastly, the facility must be “relevant from the point of view of safeguards.” Any facility offered by India under Article 14 for safeguards continues to be relevant for safeguards. The issue of imported fuel is extraneous to any of these considerations.

Under the separation plan, India is offering several facilities for safeguards — not just reactors, but also heavy water plants, research and storage facilities. All these will be under safeguards if they are included in the Annex by India and will be governed by the Articles of the Agreement. Linking import of fuel with the duration of the safeguards on facilities is not relevant here. Research facilities, for example, do not even import fuel. Is it then possible that once we have offered them for safeguards, we can take them out any time we want?

Let us take the next contention that once corrective measures figure in the Agreement, it does not matter whether they are in the preamble or in the operative part of the Agreement. The issue is not whether the preamble is a part of an agreement or a treaty. The issue here is whether the scope of termination of safeguards, as defined in Articles 29-32, can be overridden by India having recourse to unspecified “corrective measures” mentioned in the preamble. Clearly, such a reading will be fanciful; else the operative part of the agreement will be rendered a nullity.

It is well established in international law that a preamble can be used to give a treaty context and help interpret its clauses. However, in no case can a preamble override explicit provisions in Articles of a treaty or be used to create new rights or obligations. If this were so, the Non-Proliferation Treaty would have led decades ago to nuclear disarmament, as this objective is set out in the preamble! It has not happened because Article 6 of the NPT merely asks the nuclear weapons states to negotiate disarmament in good faith. The operative part lacks the teeth to implement the lofty objective the preamble sets out.

The issue of fuel supply assurances and strategic fuel reserves is of little consequence in this Safeguards Agreement. The IAEA is not a body that deals with either. The preamble merely notes that the “essential basis” of India’s concurrence to the acceptance of IAEA safeguards is the conclusion of international arrangements for reliable and uninterrupted fuel supplies and support for building strategic fuel reserves. Whatever may be the basis of a country entering into an international agreement, the articles of the treaty do not get voided simply because this basis is no longer valid. The withdrawal and termination clauses govern the actual withdrawal or termination. It is pretty much like marriage: love may be the basis of a marriage but the demise of love for one party is not a sufficient legal ground for divorce.

Asked whether India could ever withdraw its reactors from safeguards, Dr R.B. Grover of the Department of Atomic Energy claimed (in a press conference on July 12) that India could first claim a material breach under Article 52(c) of the Agreement and then take whatever action it wanted under “the combination of [Articles] 29, 30(f), 10, 4, and the preamble.” Again, while Article 29 covers both facilities and material for the duration of safeguards for facilities, we have to read this provision along with Article 32. As explained earlier, Article 32 is quite explicit that once any facility is offered for safeguards, they will continue to apply in perpetuity. Article 30(f) is very much part of Article 30, which specifically pertains only to material. To claim specific rights over facilities using an Article that pertains to material will not help India in any way.

It is not in India’s interest to keep the provisions of the Agreement vague. The dispute settlement body in the IAEA is not a neutral umpire — it is the agency’s Board of Governors. Here, politics is the dominant issue in interpretation — not legalese. As the Iran case shows, despite that country having a legal right to the full nuclear fuel cycle, the IAEA Board of Governors referred it to the United Nations Security Council for sanctions at the insistence of the United States. The majority, including the Government of India, fell in line with the U.S., not because they were convinced of its legal case but because of its sheer muscle power.

Therefore to believe that the vague term “corrective measures” included in the preamble of the Safeguards Agreement will help India later to put on the term whatever interpretation it wishes to will simply not wash. If it comes to the crunch, the Hyde Act provisions will prevail. This is what is inbuilt in the India-IAEA Agreement, the government’s spin notwithstanding.

(Prabir Purkayastha is a founding member of the Delhi Science Forum and an analyst on nuclear disarmament and energy issues.)

http://publication.samachar.com/pub_art ... machar.com
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Re: Draft IAEA Safeguards Agreement Discussion

Post by svinayak »

rajrang wrote:
(Between 1982 and 2002, I do not have exact figures but I believe that economy grew at an average annualized rate of about 5.5% - subtrracting the 2+ % population growth - this works out to approximately 3.5% in per capita terms - half of today).

Clearly India is in the midst (early stages?) of an economic miracle - similar to the 20/25 year period after WW II for Western Europe, and to similar periods for the far east (Japan, Korea et al).

It will be in the interests of the rest of the world (especially China) to strike a (nuclear) deal with the world's future super power during the early years of its economic resurgence. Otherwise, India's hands will only become relatively stronger within a few years and future deal will favor India more.
We need this discussion here and this has been discussed here in the economy thread. The current period in your quote is actually a quite period in the global theatre and is very rare in history. In another 10 years with population growth and resource shortage there will be tension on trade and agreements.
India is least integrated with the global economy and also its political relationship with world major trading countries is less than optimal. It will takes decades to build such relationship. The period you have quoted is the period of cold war and was very good for international trade. Trade surprassed GNP in 1980 in the world and world trade between 1975 to 2000 increased by 7 times. India was the only exception. This trade growth is not assured in the next 25 years due to demographic scenario.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Suraj »

Futures contracts are just a tool, one that allows you to negotiate a price on a future exchange. They don't by themselves imply we'll get a lower cost. The fact is that the whole idea of 100-year supplies - to seek such long term control over prices and production - is flawed.

As I said before, see it from a supplier side - would you be willing to enter into an agreement to:
* sell a widget 100 years later at a price set now, or worse,
* sell 100 years worth of supply at a price set now, ignoring the logistical impossibility of mining, processing and transporting it all
It would take a naive supplier, a naive buyer, and a naive group of larger powers (who until now have always tried to make their own efforts to control energy supplies) to do that.

NRao: That might be a better option in general, though India would not be the only nation to attempt that. It might provide us a cushion, but one as long as a century is unlikely.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by shiv »

Here is a pdf comparison of the IAEA agreement with China and that with India

Enjoy maadi - as they say in Guwahati, Orissa

http://rapidshare.de/files/39996321/IAE ... s.pdf.html
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Re: Draft IAEA Safeguards Agreement Discussion

Post by NRao »

Suraj,

The first issue is a secure supply, then the cost.

From what I read that is the tack China has taken. In fact some articles even suggest that China has quite a few unpublicised deals ........ the idea being that they have announced the construction of a few 10s of reactors, and, when they secure enough fuel they will announce some 100s - to be built.

India with her FBR does not face the long term problem that China faces (as I see it).
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Re: Draft IAEA Safeguards Agreement Discussion

Post by p_saggu »

Does the IAEA agreement hide us from the Hyde Act?
Prabir Purkayastha
Another betrayal / spin by the government? Since Indians are now hyperallergic to the "Inperpetuity" word, in effect the same is being attempted by the various clauses.

Gurus your take.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Gerard »

What is the reason for taking the eight civilian reactors out of safeguards? Or for removing civilian research facilities? Does their safeguards status have any bearing on the Indian strategic program? Will they contribute significantly to the nuclear deterrent? How?
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Re: Draft IAEA Safeguards Agreement Discussion

Post by NRao »

G,

What are those questions referring to?
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Re: Draft IAEA Safeguards Agreement Discussion

Post by NRao »

It is not in India’s interest to keep the provisions of the Agreement vague. The dispute settlement body in the IAEA is not a neutral umpire — it is the agency’s Board of Governors. Here, politics is the dominant issue in interpretation — not legalese. As the Iran case shows, despite that country having a legal right to the full nuclear fuel cycle, the IAEA Board of Governors referred it to the United Nations Security Council for sanctions at the insistence of the United States. The majority, including the Government of India, fell in line with the U.S., not because they were convinced of its legal case but because of its sheer muscle power.
That is all that counts. Not even benefits to Indian economy, etc.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Raju »

25 Crore is the 'market rate' per vote if Bardhan is to be believed.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by NRao »

Asked whether India could ever withdraw its reactors from safeguards, Dr R.B. Grover of the Department of Atomic Energy claimed (in a press conference on July 12) that India could first claim a material breach under Article 52(c) of the Agreement and then take whatever action it wanted under “the combination of [Articles] 29, 30(f), 10, 4, and the preamble.” Again, while Article 29 covers both facilities and material for the duration of safeguards for facilities, we have to read this provision along with Article 32. As explained earlier, Article 32 is quite explicit that once any facility is offered for safeguards, they will continue to apply in perpetuity. Article 30(f) is very much part of Article 30, which specifically pertains only to material. To claim specific rights over facilities using an Article that pertains to material will not help India in any way.
Like the 123, this also had to satisfy two sides that do not agree beyond India needing Uranium to support economic growth. It is bound to, like the 123, have inconsistencies in interpretation. It will all depend on Indian leaders then and the Indian economy - hope it will be fairly independent considering India will have a self sustaining population.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Suraj »

NRao wrote:Suraj,

The first issue is a secure supply, then the cost.

From what I read that is the tack China has taken. In fact some articles even suggest that China has quite a few unpublicised deals ........ the idea being that they have announced the construction of a few 10s of reactors, and, when they secure enough fuel they will announce some 100s - to be built.

India with her FBR does not face the long term problem that China faces (as I see it).
I see the attempts to secure supply and cost as one of aiming for an impossible pair, from an economic and geopolitical perspective. Attempting control over energy resources, has characterized big power dynamics for a long time, yet it hasn't particularly been a success, either in terms of assuring continued supplies commensurate with consumption, or cost.

As far as China goes, supply for 10s of reactors is not the same as for 10s of years, is it ? Further, how does an interest in ore mines give them control over prices that are set by market - or are you referring to just supply and not price ? Sure maintain a cushion of supplies; that certainly is prudent. But all this talk about 100 year supplies - couched in an argument for independence - is unreasonable.

The problem with arguments about a repeat of the TAPP cutoff is the same as that of predicting future economic trends - past behavior does not guarantee the same in future, not in the least because changes in economic engagement puts a lot more at stake upon others who attempt such actions. It is upto us to build such economic and strategic relationships.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by svinayak »

Raju wrote:25 Crore is the 'market rate' per vote if Bardhan is to be believed.
For the business lobby this amount is a small change
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Re: Draft IAEA Safeguards Agreement Discussion

Post by enqyoob »

BTW, what is GOV 1621? The one we have is GOV 2008_30. Also, the following mentions things from the Annex. Has that been published?
India has got the best possible agreement

July 14, 2008

When Dr R Grover of the Bhabha Atomic Research Centre and Venkatesh Varma of the Ministry of External Affairs sat down with the Director of the Department of External Relations of the International Atomic Energy Agency in Vienna to hammer out an India specific safeguards agreement, there were two unseen participants in the negotiations.

The Indians wanted an agreement that will be acceptable to Prakash Karat and the IAEA wanted to make sure that Uncle Sam was on board. The positions of both are reflected in the balanced document that has emerged from the negotiations.

The terms of the proposed inspections have been set without compromising India's sovereign right to manage its nuclear facilities in its best interests in the spirit of the Indo-US Joint Statement of 2005.

The draft has been attacked by both the non-proliferationists as well as the champions of Indian nuclear sovereignty, who may be called the 'liberationists.' This by itself is evidence of the fact that it is the art of the possible that has determined the text.

Both sides were under the illusion that the safeguards agreement would give them the satisfaction that they did not get in the deal itself. The negotiators in Vienna could not have added embellishments to the deal one way or another. They had to remain within the framework available to them and fashion a regime that would remain faithful to the documents so far adopted between India and the US.

If anything, Grover and Varma secured for India the best possible agreement, given the complexities of the deal itself.

The non-proliferationists complain that India got away with too much and the liberationists complain that India gave away too much in the negotiations on the safeguards agreement.

The former believe that by making the safeguards material specific and not facility specific, India has staged a coup. Their expectation was that all the designated facilities would be subjected to inspection in perpetuity. But the safeguards agreement captures the essential point that the logic of the inspection is that the facilities use imported nuclear material.

The 1973 board document, which will be the basis for any termination is known to speak of fuel from third parties. Interestingly, both sides find the use of the 1973 document objectionable. The non-proliferationists think that this will enable India to take out the indigenous reactors off the list.

The liberationists have missed the major gain of the agreement, which is that the designation of facilities to be inspected and the date on which the inspection should commence have been left to the sovereign discretion of India. The separation plan does not find place in the annex and there is no provision for the inspection to start even before the US Congress approves the deal.

This is indeed a major criticism of the non-proliferationist lobby. Some Indian commentators have adverse comments on the financing of the inspections. As those who follow the IAEA norms know well, the expenditure will be borne by the IAEA and the Indian share will be nominal, just for accounting or facilitating inspections.

The amount quoted is modest and the implication is that the inspections will be nominal and not like in the case of rogue states. The agreement itself speaks of the number, duration and intensity of inspections being kept at the minimum. India will not be in the category of nuclear weapon states, but it will also not be in the category of rogue states, whose installations, regardless of their purpose, will be subject to inspections.

The fact that India has nuclear weapons makes the inspections less stringent. The expectation is that as India switches to indigenous fuel, the inspections will cease altogether.

The safeguards agreement closely follows the standard agreements, which India itself has signed, complain the liberationists. But that does not make the agreement any less India specific. The many clauses in the preamble have never been incorporated before. It is pointless to say that the IAEA has not taken any responsibility to ensure perpetual supplies.

The IAEA simply does not have the competence or the authority to ensure supplies. But the fact that the agreement takes note of this requirement gives it a certain sanctity and a clear advantage for India.

Much has been said about the reference to the 'corrective measures' that India may take in the event of disruption of supplies. The non-proliferationists and the liberationists find this provision too vague. The former believe that it opens up the possibility for India to take unilateral measures of a grave nature, while the latter think that the measures that India can take should have been specified.

The ambiguity in this case is a matter of strength for India in the eventuality of having to take unspecified corrective measures. It strengthens the sovereignty element, which has been reinforced by the safeguards agreement.

The draft is yet to be approved by the IAEA Board, but if it emerges unscathed, even with a vote on it, much of the criticism that the inspections would tie India down in perpetuity to intrusive inspections even of our indigenous facilities should disappear. The non-proliferationists have already pointed out that the word 'perpetuity' does not figure in the agreement.

One windfall that has come in India's way, whether by design or as a logical consequence of the new approach, is that our other safeguards agreements, which are applicable to facilities that use imported fuel, will be suspended as long as the new safeguards agreement is in force.

This will be an improvement because the facilities, which are under individual safeguards agreements, will be freed as soon as they cease to have imported fuel. Some eyebrows have been raised over this provision in the draft.

The prompt support extended to the draft by the governor from the United States signals that the US was indeed looking over the shoulders of the IAEA negotiators as they painstakingly put together a draft that carefully followed the provisions of the Indo-US agreement.

The pressures of the non-proliferation lobby will have little impact on the US in these circumstances. The G-8 countries have also expressed support to the deal at their recent summit. But other governors may raise the points brought out by the non-proliferationists, one of whom has characterised the draft as 'stinking.' He has demanded that, at the very least, the designated facilities should be inspected in perpetuity and that the IAEA should terminate the agreement in the event of another Indian test.

The reverberations of these demands will be heard in the NSG as well as in the US Congress. But the board is well on its way to approving the draft agreement, with a few abstentions, but no negative votes.

The mistake that the enemies of the deal in India and the US are making is to seek satisfaction over their own wish list in the safeguards agreement. The negotiators have made sure that the safeguards agreement does not veer from the objectives of the nuclear deal. If anything, the Indian negotiators have ensured that the agreement does not impose new obligations on India.

In this, the goodwill of the IAEA and its Director General, Mohamed ElBaradei, has also played a major role.
.....
I too agree that this is not the same as the agreement with China, but it is very clear that it is as India-specific as the China one was China-specific. Completely different set of concerns and issues, not necessarily better or worse.

I hadn't noted the nuance that Ambassador Sreenivasan points out - in the case of India, it is the imported fuel and components that are tracked, not the facilities themselves. This makes absolute sense for the concerns of the fuel and component suppliers. In the case of China, the concern was whether the IAEA could "detect early enough" the transfer of LARGE quantities of fissile stuff to other places, notably other countries. There was little hope of any "enforcement", they just wanted the right to go in and "detect early enough".
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Re: Draft IAEA Safeguards Agreement Discussion

Post by ramana »

Thats the Draft agreement id number.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by svinayak »

What is ignored in all the comparison is that China is a member of P5 with automatic rights not available for others.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Arun_S »

Safeguards that erode security.
The UPA government has ended up with an agreement entirely harmful to the nation's interests
-Bharat Karnad
The civil nuclear cooperation deal with the US is something the country will keep paying dearly for indefinitely into the future. The safeguards document, like the other parts of the deal, has turned out exactly as this Cassandra had warned. The long-standing American aim of roping India into the morally and functionally defunct 1968 Nuclear Non-proliferation Treaty (NPT) regime — an objective serially furthered by the December 2006 Henry J. Hyde US-India Atomic Energy Cooperation Act, the 123 Accord, and now the safeguards agreement — is now fully realized. At each step, progress was made, willy-nilly, at the expense of India’s national interests and its nuclear security imperatives.

Unlike what our supposedly hard-nosed negotiators had hinted, there is absolutely no evidence in the safeguards agreement of anything other than relentless concession. “Corrective measures”, they hinted, would permit India to procure uranium for imported reactors from anywhere and by any means when faced with a cut-off of fuel supply should India test again, and even withdraw its civilian facilities from the safeguards net.
Alas, there is only a preambular mention of “corrective measures” but no indication of the action India might take should the fuel supply be disrupted. It is claimed sotto voce that India in those circumstances will approach Russia. But why would Russia be interested in bailing it out when Manmohan Singh, during his May state visit, brusquely rejected Moscow’s offer to “grandfather” new sales of uranium reactors under the 1982 Koodankulam contract? In international law, not saying clearly what a contracting party will do in case of the deal breaking down actually circumscribes options. And India is expressly barred by the agreement from withdrawing its facilities from the safeguards regime and two-thirds of the dual use Indian nuclear programme is headed into it. Under international law, only the five NPT-recognized nuclear weapon states can put nuclear facilities under IAEA safeguards and remove them at will from international policing. The US has reaffirmed this right in the preamble and in Article 34(b) of the safeguards agreement it signed with IAEA. Similarly, China has trebly protected its interests in the preamble, and in Articles 26 and 34 (b)(i) & (ii) of its accord. By accepting this differential standard, India may have become a de jure signatory to the NPT, which is what was intended all along.

By the government’s own reckoning, preambles in international legal documents are worthless. The Manmohan Singh regime, it may be recalled, took great pains to belittle the preamble of the Hyde Act, which asserts that, among other things, seeking congruence of strategies with India on Iran, the “reduction and eventual elimination” of nuclear arsenals in South Asia, and restricting India’s stockpile of fuel for imported reactors to “reasonable reactor operating requirements” — the famous Obama Amendment — “shall be the policies of the US”. In the event, how can the Indian government hold the Hyde Act preamble as irrelevant to the deal but hail the preamble of the safeguards agreement as potent?

The Hyde Act preamble is as unlikely to be disregarded by the US Congress as its counterpart in the safeguards agreement is likely to be countenanced as an escape hatch for India.

The fact is, Indian negotiators have acquiesced in an agreement that, in the main, adheres faithfully to the strictures in the IAEA INFCIRC (information circular) 66/rev 2 of September 1968 outlining the safeguards system and the INFCIRC 153 of June 1972 defining the contents of safeguards agreements the agency can sign with “non-nuclear weapon states” and in the strengthened safeguards schemes (outlined, in INFCIRC 540 and “Strengthened Safeguards: Additional Protocols”).

Sovereign countries are free to negotiate any safeguards agreement. What matters is how determined a country is in protecting its interests and preserving its policy freedom. The Congress coalition government negotiated as a supplicant and with the attitude of a have-not country with little leverage and one, moreover, in a hurry to obtain a deal, any deal, and, predictably, ended up with a safeguards agreement entirely harmful to Indian national interests.

By accepting a differential standard, India may become a de jure signatory to the NPT

Given Manmohan Singh’s repeated undertakings in Parliament of the deal being premised on India’s winning international recognition as a nuclear weapon state and enjoying the privileges thereof, the enormity of his government’s accepting, for all intents and purposes, a nuclear non-weapon state status for India is yet to sink in. The financial resources that could have been invested to accelerate the delivery of indigenous breeder and thorium reactor technologies — something the US, China and others have always feared will endow India with genuine energy independence and too much power and, by this deal, have pre-empted — will now be diverted into importing reactors.

With the growing foreign uranium stake (sales, services, fuel supply and commissions) in the economy and polity, India’s testing option will be rendered progressively thin and theoretical. Without further testing, the country’s nuclear strategic forces will continue to feature untested and unproven thermonuclear armaments that lack credibility. In time, weapons-making skills and capability will be eroded and the country will be at the mercy of any country willing to call India’s nuclear bluff. Why China, it could even be a weak and lowly Pakistan equipped with proven Chinese nuclear weapons.

Bharat Karnad is professor at the Centre for Policy Research, New Delhi. His latest book, India’s Nuclear Policy, is to be published by Praeger in the US this fall.Comment at theirview@livemint.com
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Re: Draft IAEA Safeguards Agreement Discussion

Post by ramana »

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Re: Draft IAEA Safeguards Agreement Discussion

Post by svinayak »

Safeguards that erode security.
The UPA government has ended up with an agreement entirely harmful to the nation's interests
-Bharat Karnad
We have two different take on the same draft. Isn;t it wonderful.
One is a propaganda.
India has got the best possible agreement

July 14, 2008

When Dr R Grover of the Bhabha Atomic Research Centre and Venkatesh Varma of the Ministry of External Affairs sat down with the Director of the Department of External Relations of the International Atomic Energy Agency in Vienna to hammer out an India specific safeguards agreement, there were two unseen participants in the negotiations.

The Indians wanted an agreement that will be acceptable to Prakash Karat and the IAEA wanted to make sure that Uncle Sam was on board. The positions of both are reflected in the balanced document that has emerged from the negotiations.

The terms of the proposed inspections have been set without compromising India's sovereign right to manage its nuclear facilities in its best interests in the spirit of the Indo-US Joint Statement of 2005.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by Sridhar »

From Bharat Karnad's article...
By the government’s own reckoning, preambles in international legal documents are worthless. The Manmohan Singh regime, it may be recalled, took great pains to belittle the preamble of the Hyde Act, which asserts that, among other things, seeking congruence of strategies with India on Iran, the “reduction and eventual elimination” of nuclear arsenals in South Asia, and restricting India’s stockpile of fuel for imported reactors to “reasonable reactor operating requirements” — the famous Obama Amendment — “shall be the policies of the US”. In the event, how can the Indian government hold the Hyde Act preamble as irrelevant to the deal but hail the preamble of the safeguards agreement as potent?
It is shocking to see even "respected" columnists like Arun Shourie and Bharat Karnad plumbing the depths to make their arguments. It is important that they air their opinions about the deal, but their use of subterfuge really erodes their credibility.

Somebody like Bharat Karnad could not possibly be unaware that preambles to international agreements and treaties are, as per international law, considered to be integral parts of the agreements/treaties. Preambles to the Hyde Act (or indeed the Hyde Act itself) have no worth as far as the Indian Government is concerned. It is a domestic legislation of the US and hence a matter that concerns the Government of that country. As for whether the preamble to that law is a part of that act or not, it has nothing to do with international agreements and there is no contradiction between the preamble of the Hyde Act having no legal value (if indeed that is the case) and the IAEA agreement's preamble being legally enforceable. If Karnad had referred to preambles to the 123 agreement (and if the Government had claimed that it would not be of consequence), that would be a valid point for him to make.

Sheesh. Make your points, but don't think that all your readers are idiots. It will only come back to hurt you.
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Re: Draft IAEA Safeguards Agreement Discussion

Post by ramana »

ramana wrote:.....
Anyway the next hurdle is the NSG waiver which I bet will be also clean and on to US Congress approval of the 123 so that this draft can be put into force and the Annex 1 populated. if the US Congress 123 has riders then the draft wont be implemented. The crux will come in the bi/multi-lateral agreements and the Additional protocols negotiated. I dont know if its per facility or what? When US/Blond Knights negotiate their version it will have all sorts of stuff in it. The remedy is not to buy that stuff.
I posted this last Friday.
the intent was to say this IAEA draft is clean. If there are any poison pills its elsewhere.
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