By Rajiv Nayan
India and Japan, at last, signed an agreement for cooperation in the Peaceful Uses of Nuclear Energy on November 11, 2016. Both countries took several rounds of negotiations, which helped the countries to resolve several sticky issues. Initially, limited information was released by the two governments, though the same day, the Indian foreign secretary held a media briefing in which he made several issues clear.
The joint document signed by the two countries lays down: “The present Agreement provides for bilateral cooperation in the field of Nuclear Energy. This would provide for the development of nuclear power projects in India and thus strengthening of energy security of the country. The present agreement would open up the door for collaboration between Indian and Japanese industries in our Civil Nuclear programme.”
Article 2 of the agreement lays down the scope of nuclear energy cooperation between the two countries. The agreement involves ‘design, construction, support services for operation and maintenance activities as well asdecommissioning of reactors’. Significantly, Article 2 of the agreement explicitly mentions cooperation in ‘all aspects of thenuclear fuel cycle’required for operation, maintenance and decommissioning of a nuclear reactor.
Several questions and concerns are being raised as they were raised in the past. In fact, these concerns had in the past delayed the cutting of the deal. The concerns and questions are coming in both the countries, though these concerns are separate in India and Japan.
Some in Japan argued that an agreement with India,a non-signatory to the Nuclear Non-proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty (CTBT), will undermine the nuclear regime. The reality is that India received a clean exemption in the guidelines of the Nuclear Suppliers Group (NSG) in 2008 and the CTBT is in coma. Instead India has been extending a moratorium on its nuclear test, and this is far more relevant than merely signing a non-existent treaty. India has an impeccable record. All the nuclear cooperation agreements signed by India are accompanied with relevant safeguard practices. So, there is no question of diversion of any item supplied for peaceful purposes to the military programme.
In fact, the India-Japan agreement also provides for a “system of accounting for and control of all nuclear material transferred pursuant tothis Agreement and nuclear material recovered or produced as a by-product” under Article 5. Thus, India has adopted the best practices regarding responsible acquisition of nuclear civil nuclear energy materials.
The point that a victim of the nuclear attack would find it difficult to sign a peaceful nuclear programme was intriguing. More so, the idea came from a country, which is enjoying nuclear protective umbrella and till the Fukushima incidents had used nuclear energy to generate about 30% of the country’s total electricity production, was definitely bizarre. Even the serious section of the Japanese policy making community found it non-serious and basically a deal-delaying ploy.
The argument that for a country that has stopped using nuclear energy and operating nuclear reactors, it is unethical to export them did have some merit. However, the moment the country started operating some of its reactors and decided to eventually operate its non-operational reactors and add a few more, even this ethical resistance evaporated. A tiny section that opposes nuclear energy all over the world kept clinging to this argument.
Other than the ethical and non-proliferation concerns, there were some practical commercial concerns of Japanese nuclear industry, a major driver for the India-Japan nuclear deal. As the Indian nuclear establishment was basically interested in Japanese technology, not in its reactors, Japanese industry did not find it commercially lucrative to enter into the Indian nuclear market.
Only when India agreed to buy reactors, Japanese industry started seriously working for the deal. Now it will have to partner with one of the Indian operators like the Nuclear Power Corporation India Limited. A Japanese company will still have less than 50 percent ownership in a nuclear venture. For a short period, Japanese industry wanted a solution to the nuclear liability issue.
Moreover, Japanese officials wanted proper assurance regarding export control enforcement and outreach for the Indian companies receiving Japanese goods. India has completely harmonised its export control system with the NSG guidelines and annexes. Besides, India increased its outreach activities for its companies. Some Japanese companies have also started giving export control trainingto employees of the Indian companies, which are receiving its goods. The agreement has provision for export control.
In India, too, there were, and to an extent, even now, there are some concerns. The India-US 123 agreement is a somewhat detailed document available in the public domain. However, the press briefing of the foreign secretary, Jai Shankar sought to clear the air after the signature ceremony. He informed that all the stages of India-US agreements for civil nuclear energy were compressed in one document for the India-Japan deal.
Implicitly, the foreign secretary conveyed that the template of the 123 agreement had been taken for drafting the India-Japan agreement. Administrative arrangements for India-Japan specific would be worked out later, although the technical annexure attached to the agreement already has some of the arrangements. But the basic parameters of the agreement are not different.
The termination clause, one of the concerns in India, exists in the agreement. As the Indian foreign secretary, rightly, pointed out that it exists most of the agreements. Article 14 of the India-Japan Agreement lays down details regarding termination of the agreement. Both countries are free to terminate the deal by giving one year written notice which may be withdrawn if a country changes its decision. However, if Japan terminates the agreement because of violation of the safeguards agreement, it may have to take the certificate of the International Atomic Energy Agency regarding the non-compliance.
The article 14 also discusses return of any transferred nuclear material, non nuclear material or equipment as well as spent fuel as a product of the materials supplied under the agreement. Another party may seek compensation because of the disruption caused by the return of goods. The note circulated along with the agreement puts some restriction on the right to get compensation.
So, is the concern in India that in event of its nuclear test, the deal will be nullified true? Theoretically, it is possible. Even in the India-US agreement termination clause exists, though nuclear test is not explicitly mentioned. The agreement with the US has provisions for consultation between the two countries and remedial action for India in case of termination. The agreement with Japan is not radically different. Nowhere does the India-Japan agreement mention termination because of nuclear test. The agreement with Japan also gives enough space for consultation.
India will continue to have its right to conduct nuclear test if the strategic environment changes dramatically and adversely affects India’s security. In such a situation, in reality, both the US and Japan may appreciate the Indian situation. India’s security interests are fast converging with both the countries. Quite importantly, by all the assessments, the next round of nuclear tests in the world will start either with the US or China. So, India may not have much difficulty in managing the situation after its own nuclear tests, which may follow after the tests of these countries.
Regarding reprocessing, too, seemingly,the India-Japan agreement has adopted the 123 model. Reprocessing will be done at a dedicated safeguarded site. In fact, India may help Japan in reprocessing its fuel which it sends outside. Moreover, India and Japan may in the future undertake joint Research and Development projects.
As of now, the article 2 sub-paragraph 4 of the agreement mentions, “technology for and equipment for uraniumenrichment, spent nuclear fuel reprocessing, conversion ofplutonium and production of non-nuclear material andplutonium may be transferred under this Agreement only whenthis Agreement is amended for that purpose.”The Annexure B has a detailed arrangement for the purpose. The agreement also has the provision for Low Enriched Uranium (LEU) and High Enriched Uranium (HEU). However, for HEU, an advanced consent from Japan is required.
The question emerges: why did India focus so much on entering into an agreement with Japan when so many countries were willing to do business with it and have already signed agreements for the purpose? Actually, Japan is preferred because of its reliability and trustworthiness. It is not known for imposing additionalities. Second, its technology is considered more advanced than many of the countries active in global nuclear reactor commerce.
Third, important Japanese nuclear companies have bought stakes in the companies of some of the supplier countries. An agreement with Japan will solve the issue of taking the consent from Japan for doing business with the companies of those countries. Fourth, Japan is emerging as an important strategic partner of India in managing Asian affairs. Together the two countries may push the idea of Asiatom.
Fifth, Japan, a country with high technology but declining population, may provide both a base and an opportunity for the Indian scientific force. It could be a win-win situation for both the countries. Indication comes that both the countries may do some innovative work for safety and security, though other countries have the similar provision in their agreements with India.
In the future, the two countries have to consolidate what they have agreed, covered and gained so far. The deal will turn out to be mutually beneficially for both. India will get much needed electricity and technological partnership and Japan will get a market for its companies which are facing a tough situation for several years even before the Fukushima incidents. Really, the sky is the limit for India and Japan in the nuclear and other strategic sectors.
(The author is with the IDSA, New Delhi and is an expert on nuclear issues)