C3S Paper No. 0089/2016
The following article is text of a presentation made by the author at Observer Research Foundation, Chennai on June 25 2016.
With four meetings in 20 months and the last within two months, Modi and Obama had to find some long unfinished items and a few innocuousness for the meeting in June 2016. For India, NSG entry is a promise Obama made to India some six years ago and naturally the choice fell on it.
The story of NSG is linked to NPT that entered into force in 1970. The Treaty is more about concern that nuclear weapons could spread beyond the original five than about nuclear disarmament. It only asks members not to export to Non-Nuclear Weapon States (NNWS) that are outside NPT (a) source material, meaning uranium and special fissionable material and other equipment and (b) especially designed or processed equipment for production of special fissionable material,without insisting on IAEA safeguards.
Zangger Committee
Within a year a few countries got together and formed a Nuclear Exporters Committee to provide specific definition of such equipment and processes to members of NPT.It was then renamed as Zangger Committee as a certain Professor Zangger was its Chairman. It came up with a list of items that will trigger application of IAEA safeguards if exported to non-eligible countries. The list came to be called the Trigger List.
The Committee is still active with 39 members and its task is limited to compilation of the Trigger List.
Nuclear Suppliers Group, NSG
The Zangger Committee was seen as insufficient when India tested a device in 1974.The same countries formed another Club, known as Nuclear Suppliers Group, also known as London Club. It has only 48 members. NSGintroduced full-scope safeguards for controlled items and other stricter features, over time.
Its Trigger List now covers dual use items, after the Iraq experience.It covers exports to all NNWS including those that are NPT States. It calls for Export Control legislation in the recipient State.
Measures for Physical Protection of nuclear material and for security against terror attack on facilities by non-state actors were then added. Bearing mind the Iran experience, it expects Suppliers to pay attention to the intention of the recipient State on the use of the supplied items.
Membership in NSG is based on factors such as: credentials as a Supplier, adherence to NSG Guidelines, Export Control legislation and note the expression, ‘adherence to any of the many NPTs (including the several NW Free Zone Treaties)”.It does not specify membership in them. India practices adherence to NPT obligations without being a member. Strictly speaking, there should be no bar on India’s admission.
AnyState that desires to join the Group is also expected to be a supporter of non-proliferation of WMD delivery vehicles. India counts itself as one such supporter and was recently admitted to Missile Technology Control Regime (MTCR). Neither China nor Pakistan is a member.
Missile Technology Control Regime
MTCR is an Export Control regime, another exclusive Club, established in 1987, with 34 members now.It is against export of nuclear capable missiles with range over 500 kg and 300 km and their technology; but exception was made for South Korea extending the distance to 800 km in 2012. MTCR now covers UAVs as well.India applied for membership in June 2015 and is now a member. Neither China nor Pakistan is.
The Hague Code of Conduct, HCoC
The Hague Code of Conduct was established in Nov 2002 to supplement MTCR. It is open to all States. The Membership is voluntary with no legally binding provisions.It has 138 Members now.
The Code of Conduct is not for ban but for restraint in trade related to production, testing and export of WMD capable missiles. The Cruise missiles are not included in its list. That leaves an important gap.
Like the other non-proliferation regimes, it was not negotiated under the UN auspices. But it is supported in several UN resolutions.
It has no inspection system for compliance or sanctions for violation.
Members are only required to make annual declarations on Ballistic Missile and space launch programs and also pre-launch notifications. Yet, China and Pakistan are not found in its list of Members.
In 2005, India and Pakistan bilaterally agreed for prior notification of missile launches, but did not include cruise missiles.India is the most recent member of HCoC. The road to MTCR is said to pass through HCoC.
India’s interest in NSG can be seen to be part of a broader plan.India does not wish to be seen as a potential exporter of NBC weapons and sensitive technologies. So it seeks to become a part of all the four non-proliferation bodies: NSG that covers Nuclear weapons, MTCR that covers missiles and Space weapons, Australia Group that deals with Chemical and Biological Warfare and finally Wassenaar Arrangement dealing with controls on conventional arms and sensitive technology.
As suppliers of related technology, the members wish to preserve trade opportunities while preventing spread of the technologies to wrong parties.
India cannot sell much in the nuclear sector though it possesses a wide range of technologies. But, it can be a good competitor in the space sector and has good strength in the chemical sector. The real benefit in being in these bodies is the possibility of cooperation with others as technology advances in some of the important areas.
If NSG may open its doors to India, we may end up as the only member of all four non-proliferation bodies.
China’s NSG Entry
The story of China’s entry into NSG is an interesting one.
In 1985, which was seven years before China joined the NPT, the US signed a Nuclear Cooperation Agreement with China. There is a similarity to India here, an NCA by US with a non-member of NPT,driven partly by trade interests. To facilitatethe implementation of the NCA, US asked China to join either the ZC or the NSG.
Over the next ten years, China engaged in exports to many countries of items incompatible with NSG Guidelines. As another non-member of NPT, France was helping build Light Water Reactors in China. So, China did not seem to be keen for early implementation of the NCA with US.
China signed NPT in 1992 and is believed to have made many non-proliferation pledges to US, but also to have continued its old ways. It signed the CTBT in 1996 and established Export Control legislation in 1997. That year China preferred to join the weaker Zangger Committee than the stricter NSG.It was then building a reactor in Pakistan, a non-NPT country.Full scope safeguards in such cases are not called for by the Zangger Committee.
The NCA with China was operationalised in 1998, full 13 years after it was signed, afterthe US made the necessary certifications to the Congress. US continued to push China to join NSG.
Taking its own time, China showed interest only in 2002 when its trade balance turned surplus and began to grow and filed its application for NSG membership in Jan 2004. Just nine NSG members out of thirty were in favour. It was the US that worked on the rest to secure the membership to China four months later.
The official website of NSG lists the National Authorities in each PG that liaise with NSG officially. Many countries have identified the MEA; a few have listed the country’s Nuclear Safety Commission; some mention the Customs and Foreign Trade establishments. China is the only PG that has not furnished any detail; the page says ‘no information available’ !!
China’s stand on India entry
Chinese spokespersons as well as media point to China’s reluctance to support India entry, but different reasons were given at different times.
Ineligibility because India is not a State Party to NPT has been cited, but NSG does not seem to consider it as mandatory. Asking India or for that matter Pakistan to sign NPT is a road to nowhere. It would indicate that China does not welcome them in the NSG.
China cited the reluctance of some other NSG members to support India’s case, calling instead for consensus. This was also the case in 2008 when NSG discussed a waiver for India. Eventually, those others came around as China did.
China then said a single country waiver is not acceptable to it, but criteria must be evolved and new memberships considered thereafter.
The argument put forward by China and Pakistan that India could increase its stockpile and cause instability and arms race in the subcontinent was also heard in 2008. China went along with other members then. Both India and Pakistan may have increased their stockpile of NWs since then (Pakistan more so according to some reports) and may even continue to do so. It is not clear how the NSG membership would contribute to it.There is a practical limit to the stockpile for every country.
China has also proposed admission for both India and Pakistan. That could well happen sequentially.
China could have quietly made its stand known in closed door consensus discussions of NSG. It has chosen to reveal is opposition openly, sending a message to both India and Pakistan, warningone and supporting the other.
India’s plan for separation of civilian and strategic programmes is seen as incomplete and that is seen as a cause for concern by some States.
At the time of the NCA with US, Indian Parliament was told of a separation plan in good detail. Some see three parallel programmes in India, one excluded from safeguards, a second under safeguards and a third with a status that can vary depending on the materials processed. Theybelieve there is no watertight separation among them. They expect a clear declaration of the present and future plans for clean separation.
Pakistan and NSG
Pakistan mostly tends to follow India than lead. It filed application for NSG admission a week after India did.
US policy has been consistent in efforts to get China, India and Pakistan into NSG. It was successful with China, is attempting it for India now and is engaged in preliminary talks with Pakistan.
But, Pakistan’s case needs much preparatory work. There are reports that US has been working with Pakistan to strengthen its export control regime. The entry would be further facilitated if internal stability improves.
India would be wise not to oppose Pakistan’s admission.
NSG and India
There are indications that India was sounded on joining NSG in the early 1990s. India was so inclined then, perhaps as it was considering a nuclear test. Besides, Russia had offered to build reactors in India.
After the 1998 tests, NSG initiated a dialogue in 2001 with all three countries, China, India and Pakistan to bring them in its fold. The dialogue continued for a few years with China becoming a member in 2004.
While engaging in discussions with India on civil nuclear cooperation in 2006, US made a general proposal in NSG for an exception in the application of restrictions on admission of new members.
US also briefed NSG on the ongoing discussions with India and tried to persuade NSG that India should meet the same non-proliferation standards as in the NCA with the US.The US action was related to NSG waiver for India. India had not yet applied for membership.
Consequent to the Indo-US NCA, in 2008 NSG gave India a waiver from its rules enabling it to engage in civilian nuclear trade with other countries.President Bush had to go an extra mile to get this done overcoming China’s opposition.
Indian officials have since continued to interact with NSG on matters related to the waiver.
At the time of his India visit in 2010, President Obama expressed support for Indian entry into NSG as well as the other three non-proliferation regimes and conveyed his intention to consult with regime members to encourage the evolution of regime membership criteria, consistent with maintaining the core principles of these regimes.
As a follow up action in the same year, the US circulated among the NSG members a paper titled “Food for Thought” on India’s membership.
It spoke of two ways for India’s admission, (a) revise factors for admission in a manner that “describes India’s situation” or (b) recognise that the factors for admission are not mandatory.
Obama reiterated in 2014 and again in 2015 his commitment to work for India’s phased entry into the four non-proliferation regimes.
NSG and India’s nuclear power programme
Statements from various quarters in India have incorrectly linked expansion of the nuclear power programme to India’s entry into NSG.
An extract from the NSG Statement on Sep 6, 2008 clearly says that the waiver given to India in 2008 allows its members to transfer Trigger List items &/or related technology to India for peaceful purposes and in IAEA safeguarded civil nuclear facilities. A similarly worded statement is found on dual-use equipment, materials, software and related technology.
This makes it obvious that there is no bar even now on India’s import of nuclear power reactors and fuel for them.
At the time, it was considered to be a clean waiver without any condition on enrichment and reprocessing technologies.
It was believed that India had got all that it wanted without being an NSG member.
Sometime in 2011, NSG excluded transfer of enrichment and reprocessing technology related stuff to India despite protests.
As India has developed its own capabilities in these areas, India is not really disadvantaged by this step back by NSG.
If NSG membership does materialise, it may allow India to export reactors to other countries with similar conditions.
That would enable India to extend offers to set up Indian design PHWRs in Bangladesh or Sri Lanka or in Africa, based on the highly developed indigenous technology. India can also offer services in waste management and decommissioning for these reactors. With its comparatively very limited experience with PHWRs, China has offered to build them in Argentina and Romania.
India may not be able to export the AHWR designed by BARC to use thorium, as it must first be built here and proven. The reactor requires fuel containing plutonium or LEU of higher grade and the questions of fuel supply will need to be resolved. Similar issues would apply to sale of FBRs where India is considered to be emerging as a leader.
We have heavy water to sell but there is no demand except in small quantities.
More importantly, India has indigenously developed a lot of dual use equipment, materials, software and related technology that could be made available at lower cost to recipient parties in accordance with NSG guidelines.
There is only a limited gain by becoming an NSG member. Any talk of blocking Pakistan’s entry places India in negative light, creating a poor impression. India does not need to emulate China.
Westinghouse Reactors
Many commentators have wrongly tended to relate the proposal to build reactors of Westinghouse design in India to NSG membership.
The NCA with US and the NSG waiver allowed import of LWRs several years ago. But construction has not begun because of issues related to cost and the Nuclear Liability Act of 2010. The Act has also stalled new indigenous reactors.
During Prime Minister’s US visit in 2014, the two countries set up a Contact Group tasked to find resolution to the above issues to enable early construction of Westinghouse reactors. The Contact Group is believed to have arrived at some agreement to permit the start of preparatory work on site in India for six AP 1000 reactors to be built by Westinghouse. After the recent visit of the PM to US, we are told that India and the U.S. Export-Import Bank have agreed to work out a competitive financing package for the project.If successful, it would send a strong message of faith in the Group Insurance proposed by India.
There have also been concerns about the safety and ‘untested’ nature of the reactors.
The world’s first AP1000 reactor is being built in China. The US Nuclear Regulatory Commission had completed its safety review of the design in 2006, when China selected the reactor. There were regular interactions between the safety regulators in both countries.
The UK Authorities have likewise conducted their review. The reports are available in open literature.
India’s AERB is now engaged in a similar review taking into account local site conditions here. If AERB can make its report open to the public, it would instil public confidence in the project.
Like the Kudankulam reactors, AP1000 is a Gen 3 design with passive core cooling features, measures to withstand loss of offsite power for extended period of 3 days, protection against aircraft crash and other enhanced safety provisions.
An Inter-Governmental Agreement was signed by US for technology transfer to China by Westinghouse, before construction began. Later Westinghouse confirmed transfer of IPR rights to China. The cost of two units was then stated as $5.3 billion or $2,1 million/MW.
Construction of this first of a kind reactor began in 2009. As happens in such cases, there were a few modifications required in the design of some systems and equipment, e.g main coolant pumps.It is now ready for fuel loading and could be commissioned by year end after a three year delay.
If India decides to build reactors of this design, by the time order is placed and ground is broken, operating experience would also be available to insist on design modifications if needed.
Cost of the Reactors
There is some data available from open sources on costs. Capital cost of nuclear reactors has risen everywhere, but there are regional variations – highest in US and lowest in China. But, in comparison to the indigenous PHWRs, the difference is not too significant whether in construction cost or the unit energy cost. The French reactors stand out as relatively more expensive and price negotiations are ongoing. The Unit Energy Cost for the Russian reactors turns out to be much lower than the new PHWRs perhaps because it is based on an earlier Project cost.Reactors
2 unitsTotal Capital CostCost per MWUEC$ billionRs Crores$ millionRs croresRs/kWhPHWR3.421,0002.4156.5KKNP 3&46.2540,0003.13203.9Jaitapur20120,0006.2537.59.2 (6.5*)W’house6.1240,0002.515.9?
Data from http://www.world-nuclear.org/
*NPCIL wants it pegged at Rs 6.5/kW
Government’s Intended Target for Nuclear Power
India’s Intended Nationally Determined Contributions (INDC) document says“Efforts are being made to achieve 63 GW of nuclear power capacity by 2032, if supply of fuel is ensured.” A plausible roadmap can be thought of, but the goal is tough to reach.
Steps that would facilitate expansion of the nuclear power program include:
Creation of enabling mechanism for PSUs to work together pooling their financial resources.
Enactment of legislation in Parliament for Statutory Nuclear Safety Regulatory Authority (NSRA) at an early date.
Extending the scope of Corporate Social Responsibility (CSR) activity to commence from beginning of a nuclear power project.
Encouraging Indian manufacturing sector to develop capability for series manufacture major nuclear components for PHWRs.
India has now acceded to the Convention on Supplementary Compensation bringing its liability regime in line with International practice.
What can we expect?
Completion of ongoing construction: 9,980 MW.
Completion of plans initiated and in the pipeline 14,780 MW
Nuclear Power till 2032
Phase 1. Fill up existing sites for PHWRs 18,180 MW
Phase 2. Fill up all identified new sites with PHWRs 26,180 MW
Phase 3. First stage of LWRs assuming
Resolution of Liability &Cost issues 36,880 MW
Phase 4. Second stage of LWRs, building on the first 58,280 MW.
There is still a shortfall relative to the ‘intended’ target. It is evident that the contribution that LWRs can make to the total installed capacity can be significant. But, it presupposes application of tremendous effort all-round, including early identification of new sites, provision of required financial and human resources and timely clearances.
(Mr. L.V. Krishnan, is a C3S Member and Former Director – Safety Research Group, Indira Gandhi Centre for Atomic Research, Kalpakkam, Tamil Nadu,India. Email id: krishnan97@gmail.com)
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