ML19289E220
| ML19289E220 | |
| Person / Time | |
|---|---|
| Site: | 07002738 |
| Issue date: | 03/23/1979 |
| From: | Chilk S NRC OFFICE OF THE SECRETARY (SECY) |
| To: | |
| References | |
| NUDOCS 7904050028 | |
| Download: ML19289E220 (86) | |
Text
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
//
COMMISSIONERS:
g Joseph M. Hendrie, Chainnan 8
4NglN 3 Victor Gilinsky
, 2 Richard T. Kennedy
{
g% @j }
Peter A. Bradford John F. Ahearne 7
L
)
In the Matter of EDLOW INTERNATIONAL COMPANY
)
)
Docket No. 70-2738 (Agent for the Government of India
)
License No. XSNM-1222 on Application to Export Special
)
Nuclear Materials)
ORDER For the reasons set forth in the opinions of Chairman Hendrie and Commissioner Kennedy and of Commissioner Ahearne, the Commission finds that License Application No. XSNft-1222 meets all the requirements rele-vant for issuance under the Atomic Energy Act of 1954, and hereby directs the Director, Office of International Programs to issue XSNM-1222 to the Edlow International Company.
Commissioners Gilinsky and Bradford dissent from this decision.
It is so ORDERED.
By the Commissi n
de u p SAMUEL J. tHILK Secretary of the Commission Dated at Washington, D.C in.
- d N h l M l
this 23rd day of March, 1979.
19040sooM i
T,,
y SEPARATE VIEWS OF CHAIRMAtl HEtlDRIE AND COMMISSIONER KENNEDY I.
Background
On November 1,1977, Edlow International Company, as agent for the Government of India, filed License Application No. XSNM-1222 with the Commission seeking authorization to export 404.51 kilograms of U-235 contained in 16803.6 kilograms of uranium enriched to a maximum of 2. 71%.
The special nuclear material sought would be used to fuel the Tarapur Atomic Power Station (Tarapur) located near Bombay, India.
This is the 28th application for a shipment of fuel to Tarapur considered by the Commission and its predecessor, the Atomic Energy Commission.
Such aoplications have received particularly intense Com-mission scrutiny following India's detonation of a nuclear explosive device in 1974, and the submittal of joint petitions by the Natural Resources Defense Council, Inc., the Sierra Club, and the Union of Concerned Scientists (hereinaf ter "the petitioners") on March 2,1976 seeking leave to intervene and a hearing on two applications covering fuel shipments for Tarapur, XSNM-805 and XSilM-845. -1/
XSNM-1060 was the last application covering fuel for Tarapur con-sidered by the Commission.
On April 25, 1978, the four Commissioners
-1/
The Commission issued XSNM-805, with Commissioner Gilinsky dissent-ing, on July 1, 1976.
CLI-76-10, 4 NRC 1 (1976).
The Commission held two days of public hearings on exports of low-enriched uranium to India in July 1976, and issued license application XSNM-845 on June 28, 1977.
See CLI-76-6, 3 NRC 563 (1976) and CLI-77-20, 5 NRC 1358 (1977).
y' then serving divided evenly on whether or not that application met all statutory criteria the Commission must apply. -2/Because the Commission concluded it was unable to make the statutory determinations required for issuance, the Commission referred XSNM-1060 to the President pursuant to Section 126b.(2) of the Atomic Energy Act.
President Carter determined that denial of th; license application would "be seriously prejudicial to the achievement of the United States non-proliferation objectives" and authorized the export by executive order. -3/
Pursuant to Section 130 of the Atomic Energy Act, Congress reviewed this Presidential determina-tion and did not override it.
With respect to the application presently before us, petitioners on February 13, 1978, filed a Motion requesting the Comission to resume the hearings it conducted in July 1976 on exports of low-enriched 2/
Chairman Hendrie and Commissioner Kennedy voted for issuance and Commissioners Gilinsky and Bradford against issuance.
3/
~
E.0.12055, April 27,1978.
N The United States Senate Committee on Foreign Relations and the United States House of Representatives Committee on International Relations held hearings on the President's decision at which the Commission, the Executive Branch and the petitioners testified.
See Hearings ';efore the Subcommittee on Arms Control, Oceans and International Environment of the Senate Committee on Foreign Relations, 95th Cong., 2d Sess. (1978); Hearings before the House Committee on International Relations, 95th Cong., 2d Sess.(1978).
On July 12, 1978 the House defeated a motion to overturn the President's decision by a vote of 227-181.
124 Cong. Rec. H.6530.
The Senate did not vote on the issue.
E 9
4 f
3 uranium to India, and on October 31, 1978 filed a supplemental memorandum in support of their motion.
On December 8, 1978, the Commission granted the motion, ordering a hearing consisting of written comments. -5/
The Commission invited petitioners and other members of the public to submit views on the issues raised by XSNM-1222.
The Commission specifically requested hearing participants to focus on four issues raised by the petitioners:
"(1) the sufficiency, for purposes of the Nuclear Non-proliferation Act (NNPA), of Indian Prime Minister Desai's assurances that 'he will not authorize nuclear explosive devices or further nuclear explosions';
(2) the adequacy for purposes of the NRC determina-tions under the NNPA, of the safeguards applied by the International Atomic Energy Agency at the Tarapur facil-ity, and of U.S. government information on those safe-guards; (3) the status of U.S.-India negotiations regarding the return of spent fuel from Tarapur to the United States for storage; and (4) the need for the fuel requested." [6/]
The NRC staff, the Department of State and the petitioners sub-mitted comments in respor.se to this invitation. Petitioners also filed a response to the submissions by the NRC staff and the Department of S ta te.
In addition to these submissions, the Commission has received an Executive Branch analysis concluding that the export licensing 7/
criteria are met and recommending issuance of XSNfi-1222. -
The NRC
-5/
CLI, 8 NRC (1978).
Chairman Hendrie and Commis-sioner Gilinsky voted against conducting such proceedings.
-6/
CLI, 8 NRC (1978).
-7/
September 15, 1978 letter from Louis V. Nosenzo, Deputy Assistant Secretary of State, to James R. Shea, Director, Office of International Programs, U.S. Nuclear Regulatory Commission.
4 staff has reached a similar conclusion. -8/
The Commission has also received classified briefings from the Executive Branch on this application.
On the basis of a thorough review of this matter a majority of Commissioners has determined that XSNM-1222 meets all applicable export licensing criteria set forth in the Atomic Energy Act and other applicable statutory requirements.
II.
Application Of The Export Licensing Criteria Of Section 127 Of The Atomic Energy Act The Atomic Energy Act of 1954, as amer.ded by the Nuclear Non-Proliferation Act of 1978 (NNPA), provides that the Commission may not issue a license authorizing the export of special nuclear material unless it finds " based on a reasonable judgment of the assurances provided... that the criteria in section 127 of this [ Atomic Energy]
Act or their equivalent... are met." -9/
The Commission must also determine that the export would not be inimical to the common defense and security of the United States or constitute an unreasonable risk to 10/
the health and safety of the public, -- and would be pursuant to an
-8/
An unclassified version of SECY 78-596A (January 26,1979) is being placed in the Commission's Public Document Room.
Not all NRC staff members concurred in the staff recommendation.
See SECY 78-5968 which also is being placed in the Public Document Room.
-9/
Section 126b.(2) of the Atomic Energy Act, 42 U.S.C. 2155(a)(2).
--10/
Section 57(c)(1) of the Atomic Energy Act, 42 U.S.C. 2077(c)(1).
I 4
^
t 5
Agreement for Cooperation. ~~~11/
We find that each of these criteria and requirements is met by license application XSNM-1222.
A.
Assurances of The Government of India And Their Relationship to Section 127 Criteria Section 127 of the Atomic Energy Act sets forth six criteria to qovern nuclear exports such as the one before us here.
These require-ments, frequently referred to as the Phase I criteria, became immedi-ately effective on March 10, 1978, the date President Carter signed the NNPA.
The following discussion focuses on the assurances received from the Government of India which relate to these criteria.
In the case of each criterion, we conclude that these assurances are adequate to meet the criteria if we can make a reasonable judgment that such assurances will be adhered to in the future.
(1)
IAEA safeguards Criterion one provides that:
"IAEA safeguards as required by Article III(2) of the [Non-Proliferation] Treaty will be applied with respect to any such material or facilities proposed to be exported, to any such material or facilities previously exported and subject to the applicable agreement for cooperation, and to any special nuclear material used in or produced through the use thereof."
~~~11/Section 57(c)(2) of the Atomic Energy Act, 42 U.S.C. 2077(c)(2).
u 6
The relevant assurance from the Government of India can be found in the trilateral agreement, signed January 27, 1971 by the United States, India, and the International Atomic Energy Agency, which provides for the application of IAEA safeguards at the Tarapur facility. ~~~12/
This agreement covers material exported to India pursuant to the U.S./ India bilateral agreement for cooperation and any material produced through the use of U.S.-supplied material.
IAEA safeguards are being applied by the IAEA at Tarapur in accordance with the guidelines set forth in INFCIRC/66/Rev. 2.
We conclude that the assurance provided is consistent with the requirements of criterion 1.
(2) No nuclear explosive devices Criterion two provides that:
"No such material, facilities, or sensitive nuclear technology proposed to be exported or pre-viously exported and subject to the applicable agreement for cooperation, and no special nuclear material produced through the use of such materials, facilities, or sensitive nuclear technology, will be used for any nuclear explosive device or for research on or development of any nuclear explosive device."
Article VII of the Agreement for Cooperation contains a commitment by the Government of India that no material, equipment or devices transferred to India pursuant to the Agreement, or any special nuclear material produced at Tarapur, shall be used for atomic weapons or for research on or development of atoinic weapons or for any other military purpose.
--12/ T.I.A.S. 7049.
a e
7 Further, India has provided the United States additional written assurance that the special nuclear material t>' ported by the United States to Tarapur, and products therefrom,
... will be devoted exclusively to the needs of the Station unless the U.S. specifically agrees that such material may be used for other purposes." ~~13/
Although the language in the Setnna letter does not precisely parallel that of criterion two, it provides a significant added assurance to that provided by the Agreement because a nuclear explosive device would be unrelated to the "needs of the Station".
Moreover, in a number of public statements Prime Minister Desai has forsworn further nuclear explosions by India.
For example, in a June 9,1978 speech before the United Nations Special Session on Disarcament he stated, "We have abjured nuclear explosions even for peaceful purposes".
On the other hand, the Prime Minister has also stated that if nuclear explosives could be used for mining without creating pollution, environmental difficulties and hazards for people, India would consider such uses of nuclear technology. ~~14/
Indian Prime Minister Vajpayee 15/
recently reiterated this view.
We take note of this ambiguity con-
~~~13/Letter from Homi N. Sethna, Chairman of the Indian Atomic Energy Committee to Dixy Lee Ray, Chairman, U.S. Atomic Energy Commis-sion, dated September 17, 1974.
-~~14/ July 31, 1978 speech by Prime Minister Desai to the Indian Parliament.
~~-15/ February 1979 interview in the newsweekly Blitz, published in India.
s 8
cerning India's future intentions with respect to so-called " peaceful nuclear explosives".
In this regard, the United States Government has repeatedly stated its view -- in the IAEA and other formal contexts --
that no distinction can be drawn between nuclear explosives, whether their intended uses are labeled " peaceful" or otherwise.
It is also important to note, however, that the no explosives guarantee codified in criterion two of the NNPA runs only to U.S. supplied material and equipment.
Ye are unaware of any information on which to conclude that India does not consider itself bound by its 1974 commitment to the United States that U.S.-supplied material and material produced through the use of U.S.-supplied material will not be utilized for the develop-ment of nuclear explosive devices.
Further, with respect to the reactors themselves, we believe that Article VII of the U.S.-India Agreement for Cooperation which prohibits India from using the Tarapur facility for development of atomic weapons or for any other military purpose, coupled with Prime Minister Desai's statements forswearing further nuclear explosions by India give the United States adequate assurance that the reactors will not be used to develop nuclear explo-sive devices.
Therefore, we conclude that the assurances received are consistent with the requirements of criterion 2.
I 4
9 9
(3)
Physical security Criterion three provides:
" Adequate physical security measures will be main-tained with respect to such ma:erial or facilities pro-posed to be exported and to anj special r.uclear material used in or produced through the use thereof.
Follow-ing the effective date of any requirement promul-gated by the Commission pursuant to Section 304(d) of the Nuclear Non-Proliferation Act of 1978, physical security measures shall be deemed adequate if such measures provide a level of protection equivalent to that required by the applicable regulations.
The Commission has promulgated regulations providing that the physical security measures adopted by a recipient nation must at a minimum assure protection comparable to the measures set forth in International Atomic Energy Agency publication INFCIRC/225/Rev.1 entitled, "The Physical Protection of Nuclear flaterial". ~~~16/
In a letter to the U.S. Department of Energy dated August 30, 1978, the Government of India assured the United States that physical security measures in place at Tarapur are at least comparable to those set forth in INFCIRC/225/Rev.1 and that this level of protection will be maintained in the future.
A United States physical security review team visited the Tarapur Atomic Power Station in November 1975, and its April 30, 1976 report concluded that the security measures adopted by India were consistent with the measures recommended by the IAEA in INFCIRC/225/
Rev.l.
We conclude that India's assurances satisfy t'.e requirements of criterion 3.
_l.6f 10 CFR 110.43.
10 (4)
Retransfers Criterion four pr;vides:
"No such materials, facilities, or sensitive nuclear technology proposed to be exported, and no special nuclear material produced through the use of such material, will be retransferred to the juris-diction of any other nation or group of nations unless the prior approval of the United States is obtained for such retransfer.
In addition to other requirements of law, the United States may approve such retransfer only if the nation or group of nations designated to receive such retransfer agrees that it shall be subject to the conditions required by this Section."
Article VII A.(2) of the U.S.-Indian Agreement for Coopera: ion provides that no material, equipment or device transferred tc the Government of India pursuant to the Agreement will be trar.sferred beyond the jurisdiction of the Government of India without the prior approval of the United States.
Article II. F. of the Agreement provides that any special nuclear material produced in the Tarapur reactors which is not to be retained in India for use in its program for peaceful uses of atomic energy may be transferred beyond the jurisdiction of the Government of India only after securing United States approval.
These assurances are consistent with the requirements of criterion 4.
11 (5) Reprocessing Criterion five provides:
"No such material proposed to be exported and no special nuc; ear material produced through the use of such material will be reprocessed, and no irradiated fuel elements containing such material removed from a reactor shall be altered in form or content, unless the prior approval of the United States is obtained for such reprocessing or alteration."
Article II E. of the Agreement for Cooperation provides that if any special nuclear material utilized in the Tarapur reactors requires reproces-sing, and recourse is not taken by the Government of India to the provi-sions of Article VI C. of the Agreement (substitution of materials), such reprocessing may be performed in Indian facilities upon a joint deter-mination by the United States and India that the provisions of Article VI (Safeguards) may be effectiveiy applied, or in such other facilities as may be mutually agreed on.
The Agreement further states that except as may otherwise be agreed to, the form and content of any irradiated fuel elements removed from the reactors shall not be altered before delivery to any such reprocessing facility.
This language provides that the United States must give its approval before material may be reproc-essed.
We regard these assurances as satisfactory.
I a
12 (6)
Sensitive technoloay Criterion six provides:
"No such sensitive nuclear technology shall be exported unless the foregoing conditions shall be applied to any nuclear material or equipment which is produced or constructed under the jurisdiction of the recipient nation or group of nations by or through the use of any such exported sensitive nuclear tech-nology."
This criterion is not relevant here because issuance of XSNM-1222 would not authorize the export of any sensitive nuclear technology.
On the basis of the foregoing discussion, we have concluded that the assurances received from the Government of India are adequate to meet the criteria, assuming continued compliance by that Government with those assurances.
Further, we have every reason to believe that the assurances will be complied with so long as the Government of India considers itself bound by the United States-India Agreement for Coopera-tion.
However, in this special fuel supply relationship, the Commission feels it also should consider how India will continue to view the pro-visions of the agreement. An examination of potential developments in this area must therefore preceda a determination that the criteria are met.
1_3 B.
Implications Arising From the Future Implementation of Section 128 of the Atomic Energy Act Section 128 of the Atomic Energy Act provides that the United States may not export nuclear materials to a non-nuclear weapons state -17/
unless IAEA safeguards are applied, at the time of the export, to all nuclear activities within the jurisdiction of the recipient nation.
This requirement is referred to as a " comprehensive" or " full-scope" safeguards requirement.
It is to be applied to any application filed 18 months after enactment of the NNPA (September 10,1979) and to applica-tions for which the first export is to occur twenty-four montns after 18/
enactment (flarch 10, 1980). ---
Although Section 128 is not directly applicaole to this proposed export, as will be discussed further in Part III of this order, the provision raises a central issue concerning continued shipments of nuclear L. ~~ rial to India.
The United States-India Agreenent for Cooperation, under which the proposed export would take place, is unique among U.S. bilateral b A non-nuclear weapons state is defined in Article IX(4) of the Treaty on the Nonproliferation of Nuclear Weapons to be a state which did not explode a nuclear explosive device prior to Janu-ary 1, 1967.
By this definition, India is considered a non-nuclear weapons state, even though it detonated a nuclear explosive device in 1974.
E The Commission would be required to waive application of this criterion if it were notified by the President that application of the provision "would be seriously prejudicial to the achievement of United States non-proliferation objectives or otherwise jeopar-dize the common defense and security." Section 128b.(2) of the Atomic Energy Act, 42 U.S.C. 2157b.(2).
This Presidential deter-mination would be subject to Congressional review pursuant to Sections 128(b)(2) and 130 of the Atomic Energy Act.
1a agreements.
It provides for the exclusive use of U.S. fuel in Tarapur reactors and, in a reciprocal provision, a U.S. guarantee to supply the necessary fuel.
India emphasized in the Agreement that the basis for its acceptance of safeguards covering the Tarapur facility, and its assurances that the reactors will be used exclusively for peaceful purposes, is this unique fuel guarantee provision.
In a letter dated July 10,1974, the Government of India not only reasserted its position regarding the basis for its obligations concerning the facility but appeared to tie its acceptance of safeguards on the fuel itself to the continuation of Tarapur's fuel supply. -19/
In a similar vein, Prime Minister Desai, in a March 23, 1978 reply to questions in the Indian Parliament, asserted that if the United States denied a Tarapur fuel shipment, "once I hear that then all ways are open to use, even the processing of the thing [ fuel] will be open to us.
Then we are not bound".
It must be recognized therefore that if India were not to accept full-scope safeguards by March 1980, and the United States were to terminate fuel shipments, the Government of India could argue that this failure to supply nuclear material would constitute a material breach of the Agreement for Cooperation.
India might further argue that it no longer considered itself bound by the safeguards guarantees regarding the Tarapur facilities as well as other provisions which are contained in that Agreement.
The interaction of Section 128 and the unique
-19/
Letter from Homi N. Sethna, Chairman of the Indian Atomic Energy Committee to Dixy Lee Ray, Chairman, U.S. Atomic Fnergy Commission, dated July 10, 1974.
15 provisions and interpretations of the United States-India Agreement thus raises a question whether the conditions of the Section 127 cri-teria will continue to be satisfied after March, 1980.
There are a number of factors which, when taken together, suggest an affirmative answer to this question.
First, it is possible that India could agree to accept full-scope safeguards prior to March 1980, or that the President could decide to waive the full-scope safeguards requirement with respec'. to India, particularly if there is progress in the U.S.-
Indian negotiations on the issue.
Moreover, even if India were not to accept full-scope safeguards and the United States were to decide to terminate fuel supply, a strong legal argument could be made that termina-tion of fuel supply does not relieve India of its obligations under the Agreement for Cooperation.
-20/
We note, however, that Joseph S. Nye, Deputy to the Under Secre-tary for Security Assistance, Science and Technology, U.S. Depart-ment of State, testified that "it is highly unlikely there would be a Presidential waiver".
Hearing on the Prope.en Sale of Enriched Uranium to Fuel India's Tarapur Reactors befon the Subcommittee on Arms Control, Oceans and International Environment of the Senate Committee on Foreign Relations, 95th Cong., 2d Sess., at 352 (May 24,1978).
-21/
The fuel supply co. '.ract implementing the Agreement for Cooperation contains a provision that India shall comply with the laws of the United States with respect to the supply of material.
If India fails to comply with Section 128 of the Atomic Energy Act, India would not be in compliance with applicable law, and the United States would be relieved of its obligation to supply fuel until India applied full-scope safeguards.
Thus a suspension of fuel shipments until full-scope safeguards are implemented would be consistent with the contract ar.d the agreement for cooperation and would not affect India's obligations under the agreement.
16 If U.S. supply were in fact suspended, pust history suggests that India would continue to accept safeguards on Tarapur fuel.
It is significant that after Canada suspended nuclear exports to India follow-ing India's detonation of a nuclear explosive device in 1974, India retained IAEA safeguards over Canadian-supplied material.
It should be further noted that the United States-India Agreement for Cooperation explicitly provides for the possible return of all U.S.-supplied special nuclear material to the United States.
India has repeatedly stated its willingness to teturn spent fuel from the Tarapur reactors to the United States, and it is possible that the difficult technical and economic problems with such a course of action could be satisfactorily resolved.
Finally, it should be emphasized that the material covered by XSNM-1222 represents only the latest in a long series of nuclear fuel shipments to India.
To our knowledge, no U.S. material has ever been diverted from Tarapur for unauthorized uses by the Government of India.
Yet, despite these factors, some residual questions associated with this export remain. Accordingly, a central question must be addressed as to how the Congress, in enacting the NNPA, intended that questions regarding the continued application of Section 127 criteria beyond March i980 should be dealt with in the interim negotiating period.
The statute itself is ambiguous on the matter.
The legislative history associated with its enactment, however, answers the question clearly.
g 17 C.
Congressional Intent Regarding the 18-24 Month " Grace Period" The legislative history plainly indicates that, subject to certain qualifications noted below, Congress intended exports to current U.S.
trading partners to continue during the period between enactment and the effective date of the full-scope safeguards requirement.
Congress reached this decision with knowledge of the terms of the Indian Agree-ment for Cooperation and an awareness that persuading India to accept full-scope safeguards would be a difficult task. ~-22/
The intent to continue exports is evident throughout the entire pre-enactment legislative record.
The Senate Committee report states:
As currently draf ted, these " Phase I" export criteria will not result in an imediate moratorium on U.S.
nuclear exports. Although the actual language in our existing agreements for cooperation varies, and seldom corresponds precisely to the language of these criteria, it is our understanding that each of these basic requirements and rights are contained in those agree-ments [except as] noted below.
[ EURATOM and the IAEA with respect to criterion four and five] [23/]
The House report echoes the same theme.
In its sole reference to India, moreover, " grace period" and " flexibility" language is used.
The Report reads:
22/
2 See, for example, Hearings on S.897 before the Subcommittee on Energy, Nuclear Proliferation, and Federal Services of the Senate Committee on Government Affairs, 95th Cong.,1st Sess.,
at 273-274 (May 6,1977); Hearings and Markup on H.R. 8638 before the Subcomittees on International Security and Scientific Affairs and on International Economic Policy and Trade, House Committee on International Relations, 95th Cong.,
1st Sess., at 234 (July 27, 1977).
-23/
S. Rep. No.95-467 at 16 (October 3, 1977).
18
- *
- Section 127a. spells out six criteria which, upon enactment of this act, nations receiving U.S. exports must accept as a precondition to obtaining further exports.
It general, these criteria correspond to undertakings export recipients have previously given the United States in thei existing agreements for cooperation with this country.
Thus, in most cases the committee anticipates that applica-tion of the criteria will provide a basis for continued export to countries currently engaged in nuclear commerce with the United States. [page 22]
Section 504(e)(2) adds an additional licensing cri-terion which becomes effective 18 aonths af ter the enactment of this bill.
This criterion requires that a recipient State permit IAEA safeguards to be applied with respect to all peaceful nuclear activi-ties carried out within that State. This requirement is an essential element of the bill, and in the committee's view, indispensable to any comprehensive nuclear antiproliferation policy.
The committee has, in the interest of flexibility, per-mitted an 18 month period of grace before requiring the mandatory application of this criterion.
In addition, the bill provides for further extension by Executive Order, subject to congressional disapproval by concurrent resolution.
India and South Africa would be most significantly affected by this requirement.
The committee feels strongly that the currently unsafeguarded facilities in tnc countries must be brought within the framework of the IAEA safeguards system if American nuclear cooperation is to continued.
The committee is encouraged by the cooperative and the constructive attitude manifested by the new government of India and is hopeful that provision for comprehensive IAEA controls will soon be achieved through mutually satisfactory negotiation.
[page 25] [24/]
The Senate floor debates reiterate these views.
In introducing the bill on the Senate floor, Senator Glenn noted:
~~-24/ H. Rep. No.95-587, at 22, 25 (August 5, 1977).
19 The criteria which go into effect immediately upon passage of this bill represent nothing more than a common-sense codification of existing policy regard-ing nuclear exports to nonweapons states. [25/]
A section-by-section analysis of the proposed Act, which was inserted into the Conaressional Record, stated:
In addition to the phase I criteria, the.ill prohibits exports to nations which refuse to plac<
11 of their nuclear facilities under safeguards..
as of 18 months after the date of enactment. The 18 month delay is designed to allow time for negotiations, and the President may delay this requirement for any particular country in extra-ordinary circumstances, subject to Congressional veto. [26/]
Furthermore, during Congressional hearings on the legislation which eventually was enacted as the NNPA, Paul Warnke, Director of ACDA, stressed that the Administration was concerned wi+S such innediate, unilateral abrogation of long-standing U.S. nuclear trade commitments:
The fact cannot be ignored that the other nations with which we deal in the nuclear field have taken substantial action in reliance upon the binding legal commitments we have made.
For example, before these nations could afford to make the investment of hundreds of millions of dollars in a nuclear power reactor, they had to insure that the fuel would be available to operate that reactor.
Accordingly, they entered into firm long-term fuel supply agreements with the United States Government, and we agreed to the terms of such supply.
If,10 or 15 years later, we were unilaterally to tell those recipient nations that they cannot receive the fuel needed to con-tinue operating their reactors unless basic terms of
~25/
124 Cong. Rec. S.1065 (February 2, 1978).
~26/
123 Cong. Rec. S.13139 (July 29, 1977).
20 their agreements are changed to meet our new perceptions, then'various consequences may well arise... [E/]
Senator Glenn responded to Mr. Warnke stating:
You referred to the difficulties in renegotiating old contracts and the problems that would entail.
You are aware, I am sure, that we are setting up this bill with a phase I and a phase II for just exactly that reason.
We felt it was not proper just to renegotiate old con-tracts, and that the phase I time period of the bill was given so that we could have a time period to rraegotiate properly such things before moving on the phase II... [28/]
The inference seums clear that, during che renegotiation period, exports to current trading partners were expected to continue.
Even one of the petitioners in this proceeding -- the Natural Resources Defense Council -- did not believe that enactment of the Phase I criteria would require termination of exports to India during the
" grace period" between enactment and the imposition of full-scope safe-guards.
In response to questions addressed by a subcommittee of the House Committee on International Relations, NRDC responded:
The claim that the export criteria in H.R. 4409 would cause a moratorium an U.S. nuclear exports is over-stated.
The adoption of the first-stage criteria would appear not to interfere significantly with existing nuclear trade arrangements....
The prohibition on trade with nations not accepting full fuel cycle safe-guards.... would seem to effect [ sic] only 11 of the 30 U.S. Agreements for Cooperation with other nations.
These 11 nations, who are not members of the
-27/
Hearings before the Subcommittee on Energy, Nuclear Proliferation, and Federal Services of the Senate Cormittee on Governmental Affairs, 95th Congress,1st Session, at 106 ( April 25,1977).
--28/
Id. at 108.
d
21 NPT, would have 18 months in which to comply with the second stage criteria... [29/]
The most explicit indication that the supporters of the legislation did not contemplate that exports to India would be terminated during the period before the full-scope safeguards requirement came into effect is the following colloquy between Congressman Studds and Gerald Warburg, an assistant to Congressman Bingham, during the markup of H.R. 8638 by the House International Relations Committee:
MR. WARBURG... Eighteen months after the enact-ment of this legislation, we would add an additional criterion:
no U.S. nuclear exports will go to any non-nuclear-weapon state which refuses to apply IAEA safe-guards for all its nuclear facilities, regardless of their origin.
The principal effect of this provision --
and the reason really for its ( 7ferral for 18 months --
would be to terminate the U.S.
uclear exports to South Africa and India.
These two reaweapons states are run-ning unsafeguarded sensitive r,uclear fuel service [ sic]
facilities -- a reprocessing plant in the case of India and an enrichment plant in the case of South Africa.
This section states that, as a matter of U.S. policy, we cannot, in good conscience, continue to send nuclear exports to nations which run unsafeguarded fuel cycle facilities which have the capacity to produce great numbers of nuclear weapons.
MR. STUDDS.
What is the rationale for the 18-month grace period there?
MR. WARBURG.
The rationale is to provide maximum flexibility in the continuing negotiations with those two nations, to seek to turn them around -- particularly in the case of India -- turn India around where it had gone potentially toward the nuclear weapons optior.
In return for opening their nuclear facilities to inter-
-29/
Response of Jacob Scherr to questions posed by the Subcommittees on International Security and Scientific Affairs, and on Inter-national Economic Policy and Trade of the House Committee on International Relations, 95th Cong.,1st Sess., at 356-357 (1977).
22 national atomic energy safeguards, we could continue nuclear trade with these nations.
So we are hoping for some progress.
There have been some very encouraging signs from the new Indian Government and we are simply seeking to allow the ongoing diplomatic efforts of the administration some additional time in the hope of greater success. [30/]
An analysis of the pre-enactment legislative history just outlined reveals that two central principles were agreed upon dur'ng Congressional consideration of the NNPA, both of which suggest an intent to continue exports to current trading partners during the 18-24 month grace period.
The first is that the immediately applicable criteria should parallel, and demand no more than, existing U.S. agreements for coopera-tion.
The rationale for this principle, repeatedly stated, was that it was inappropriate, in view of understandings built up over the years, to insist immediately on assurances not already provided by current U.S.
trading partners.
Such unilateral action by the United States, it was cautioned, would produce a " moratorium" on U.S. exports which all agreed would be ill-advised.
Rather, uninterrupted nuclear commerce with U.S.
trading partners -- assuming compliance by such recipients with their agreements -- was the consistently declared objective.
It was to accom-modate this objective that the legislation was modified to provide exemptions from criteria 4 and 5 for EURATOM and the IAEA.
References to this theme can be found in numerous statements by Administration witnesses, in the Senate Committee Report and in Senator Glenn's floor
~~~30/Hearings and Markup of H.R. 8638 Before the House Committee on International Relations, 95th Cong., 1st Sess. at 264.
23 statement.
It is also found in the House Committee Report but is qualified there by the words "in general".
The second principle which emerges is that a " meaningful period for negotiation" was desirable to allow U.S. negotiators a chance to obtain commitments to full scope safeguards.
Clearly, no negotiation period could be " meaningful" if exports were to be denied or sut' ject to repeated delays in the middle of it.
It follows that a continuation of exports during such period was intended.
References to this second theme can be found in the Glenn floor statement, the House Committee Report and the Jacob Sherr response to the House International Relations Committee.
The case of India was cited specifically in the development of both of these themes.
The State Department in a response to the House Committee stated that "The U.S./ Indian Agreement covering Tarapur supply fully meets the immediate export criteria...". -31/
And the Warburg-Studds colloquy portrayed the 18-month grace period essentially as a means "to provide maximum flexibility in the continuing negotiations with..."
India and South Africa, "to seek to turn them around -- particularly in the case of India...".
Despite these numerous and consistent statements, -32/
two important caveats must be placed on our conclusion that Congress intended continued
-31/
July 20, 1978 response by the Department of State to Questions Submitted by subcommittees of the House International Relations Committee.
This document can be found in Hearings and f!arkup on H.R. 8638 before the House Committee on International Relations, 95th Cong.,1st Sess., at 350 (1977).
El Some would read the legislative history differently, relying primarily upon statements made during the course of the debate on whether the Presidential decision to authorize the export (Continued on following page)
24 U.S. exports to India and other existing trading partners during the grace period.
First, Congress contemplated that proposed exports were to be subject to an NRC review no less rigorous than that existing before enactment.
By insisting that immediately applicable criteria were to conform to our existing agreements, Congress was not expressly vouching for the present or continued adherence of each of our current trading partners to those agreements.
One of the purposes of the NRC license proceedings called for in the legislation was to ensure that adherence to the agreements, and the criteria designed to embody them, was continuing.
Thus it was assumed that exports would not be licensed during the grace period if they failed to survive a " traditional" NRC review based on essentially the same tests and requirements which existed prior to enactment.
Second, Congress could not have intended, in a blanket fashion, to give sanction to exports without regard to circumstances which might emerge af ter enactment.
Its decision to continue exports was predicated on an understanding of circumstances existing during its consideration of the NNPA.
It was understood that such circumstances, and the 3.U (Continued from preceding page) of XSNM-1060 should be set aside. These statements were all made af ter enactment of the NNPA.
EyL post facto legislative history has been viewed with considerable suspicion by the courts, and we believe little weight should be accorded such utterances.
Regional Rail Reorganization Act Cases, 419 U.S.102,132 (1974).
In any event, even if the post-enactment legislative history were to be given great weight, we do not believe it suggests a different decision in this matter.
25 proliferation consequences associated with them, could change at any time.
Neither of these qualifications seems applicable to the current export.
It is clear that the application can survive the traditional tests intended to be applied during the grace period.
As mentioned above, the assurances currently prov2ed by the Government of Indis are consistent with the criteria, and there is no reason -- other than the previously discussed question of the possible future effect of imple-menting full-scope safeguards -- to believe that India will not comply with those assurances in the future.
It follows that all traditional requirements are satisfied.
Further, circumstances regarding the U.S.-India fuel supply rela-tionship have not fundamentally changed since enactment of the NNPA.
Although Prime Minister Desai has made statements that if the United S;ates were to terminate fuel supply, India would no longer be bound by the U.S.-India Agreement for Cooperation, there has also been some progress in negotiations on full-scope safeguards.
During any negotia-tion period, prospects for success or failure can be expected to fluctuate rapidly from day to day.
Yet, putting aside iucn perivdic fluctuations, it can be said that the likelihood of success -- and the resulting degree of uncertainty associated with continued exports to India -- appears substantially the same as at the time of enactment.
Accordingly, we conclude that Congressional intent to continue exports during the grace period is applicable to the proposed export
26 before us.
Our decision today that the criteria are met is consistent with that Congressional intent.
III.
Direct Application of Section 128 Petitioners object to this export on the grounds that approval would provide India with sufficient fuel to operate the Tarapur reactors for more than two and one-half years beyond the effective date of Section 128, even if India does not accept full-scope safeguards.
They argue that authorization of this export would undermine and frustrate the congressional intent expressed in Section 128(b) of the Atomic Energy Act by unreasonably extending the grace period for negotiations.
As the Executive Branch has noted, the fuel requirements of the Tarapur reactors are uncertain, and depend on, among other things, the mode in which the reactors are operated. --33/ The conclusion that this fuel is unlikely to be irradiated in the Tarapur reactors until after the March, 1980 full-scope safeguards cut-off date is not disputed by the Executive Branch.
However, it is argued that shipment of this material is consistent with the United States-India Agreement for Coopera-tion which provides that fuel will be supplied on a basis that will permit the efficient and continuous operation of the Tarapur Atcmic Power Station.
It is understood that this supply obligation includes a commitment to provide fuel on a sufficiently timely basis for fabrica-tion of the fuel elements at the Hyderabad Nuclear Fuel Complex.
52/
See the Appendix to '.;ritten Comments of the Department of State submitted by the NRC on January 8,1979.
27 We believe that the intent of Congress in providing for a grace period for acceptance of full-scope safeguards was to provide a continued supply of nuclear raterial to applicants filing routine applications prior to Septenber 10, 1979.
As the Senate Report on the NNPA makes clear, Congress was concerned about " highly unusual proposals which are 34/
intended to circumvent this statutory provision."-- The record does not indicate that the request for material embodied in license appiica-tion XSNM-1222 constitutes a " highly unusual" case.
The application was filed in November 1977 and is consistent in its timing and the quantity of material requested with previous Tarapur applications.
It is not at variance with the refueling schedule outlined in the U.S.-sponsored 1976 Last-Kieffer Report, to w'nich India has consistently adhered.
- Moreover, we believe that prudent utility planning supports shipment now, to avoid any possibility that the fuel would fail to arrive in time to permit a reasonable period for fabrication preparatory to use at the Tarapur facility.
Thus, we conclude that shipment of this materici would not frustrate the underlying intent of Section 128 of the Atomic Energy Act.
--34/
S. Rep.95-467, 95th Cong., 1st Sess., p. 18.
28
~
IV.
Other Statutory Requirements A.
The " Common Defense and Security" Requirement Apart from measuring the proposed export against the specific criteria listed in Secticns 127 and 128 of the Atomic Energy Act, the Commission must also determine that the export would not be inimical to the common defense and security of the United States. ~~35/
We believe that two issues raised by the petitioners are particularly relevant to this determination; namely (1) the adequacy of the safe-guards applied by the International Atomic Energy Agency at the Tarapur facility, and (2) the status of U.S./ India negotiations regarding the return of spent fuel from Tarapur to the United States for storage.
Adeauacy of Safeguards In response to the Commission order of December 8, the petitioners assert that, given the serious uncertainties and dearth of information concerning the effectiveness of IAEA safeguards in India, the Commission cannot make an independent. judgment concerning their adequacy.
In its response the Department of State noted that available information indi-cates that the IAEK considers that it has been able to conduct satis-factorily all of the safeguarding activities at the Tarapur facility which are called for by the Agency's procedures applicable to light
~35/
Section 57(c)(2) of the Atomic Energy Act, 42 U.S.C. 2077(c)(2).
29-water reactors, and that the facility operator and other authorities in India have cooperated fully with the Agency.
On the basis of a review of all available information, both classified and unclassified, we have concluded that, while there may be some weaknesses in safeguards implementation in India, they are neither unique nor so serious that this export should be considered inimical to the common defense and security of the United States.
Spent Fuel Return The petitioners also expressed concern about the lack of progress during the last 2-1/2 years on arrangements to remove Tarapur spent fuel from India.
They urged the Commission to insist that the Executive Branch renew negotiations on this subject and accelerate the develop-ment of a U.S. capability for emergency spent fuel return.
The Executive Branch ccknowledges that no active negotiations on this subject are underway at the present time, noting that extensive study of the issue over the last year has disclosed significant logistic and economic problems related to such return. As an alternative to such negotiations, the Executive Branch has concentrated on assisting Indih in expanding its spent fuel storage capacity in the Tarapur Atomic Power Station storage basins.
The impetus for negotiations regarding the return of Indian spent fuel to the U.S. nas its origins in the Commission hearing on XSNM-845 in July 1976.
Since that time, India has repeatedly stated its willingness
30 to return spent fuel from the Tarapur reactors to the United States, and the President has announced a willingness to accept a liniited amount of foreign spent fuel for storage in the U.S. when doing so would advance our non-proliferation objectives.
This offer, announced in October of 1977, is being developed in conjunction with overall U.S. spent fuel storage planning, both domestic and foreign.
Moreover the subject of an international spent fuel regime is under active consideration within the framework of the International Nuclear Fuel Cycle Evaluation.
We believe that the question of the return of Tarapur spent fuel should properly be addressed in the context of these ongoing efforts and not in the isolated context of a single licensing action.
In sum, the United States government is still analyzing various spent fuel storage regimes.
We do not believe that the failure to return Tarapur spent fuel during the pendency of these national and international studies is inimical to the common defense and security of the United States.
Other Factors There is another dimension to the Commission's common defense and security finding that should be mentioned here; namely, that one must look not only at problems which might be created by a particular nuclear export, but also at problems which might be avoided or reduced by approving the application.
Prior to enactment of the NNPA, when the common defense and security requirement constituted almost the sole basis for the Commission's export licensing decisions, such positive
31 factors were taken into account in evaluating particular export license applications. -36/ In enacting the NNPA, Congress indicated no desire to change Commission practice in this area.
At least one such factor is applicable to the present case. A potential contribution to the common defense and security and ultimate achievement of our non-proliferation objectives which might result from approval of this export is the continuation of full-scope safe-guards negotiations now in progress between the United States and India.
The Department of State has frequently stressed the importance of maintaining a cooperative atmosphere within which useful negotiations can take place.
Most recently, this was reiterated in the Written Comments of the Department of State (submitted January 5, 1979):
As stressed in Executive Branch testimony during the May 1978 Congressional hearings on nuclear supply to India, the Executive Branch believes that our dialogue with India can move forward only within a cooperative atmosphere, one which does not entail a moratorium on U.S. cooperation and disruption of nonnal operations or accusations of bad faith during negotiations to achieve strengthened controls.
Thus, the Executive Branch believes that continued and normal supply of Tarapur low enriched fuel to India, during the statu-tory period provided for negotiations, is not only consistent with the law, but also essential to con-tinuation of the U.S.-India dialogue on nuclear cooperation and safeguards.
It is true that referral of the proposed application to the President is not necessarily tantamount to rejection, since the President can 36/
See discussion in Westinahouse Electric Corporation (ASCO II),
~ ~ ~
CLI-76-9, NRCI-76/6 739 at 753-754 (1976), concerning the valuable influence in international safeguards matters which the United States retains by virtue of its position as a reliable supplier of nucle r commodities.
a4 o
32 authorize the export taking into account other factors, subject to review by the Congress.
Nevertheless the act of referral by the Com-mission clearly introduces a further measure of uncertainty into an already slow process with the possible effect of impeding the dialogue on safeguards, thus raising the spectre that negotiations will ultimately fail.
Such a development could not possibly further the nonproliferation objectives of the NNPA or the common defense and security of the United States.
Indeed, it could contribute to precisely the result the United States seeks to avoid through continued negotiations.
We are also unaware of any other factor that would cause us to conclude that issuance of XSNM-1222 is inimical tc the common defense and security of the United States.
B.
Public Health and Safety Requirement The Commission is required to determine that the proposed export will not be inimical to the public health and safety. -37/ We see no circumstances in which the operation of the Tarapur reactors could reasonably be expected to affect adversely the health and safety of the population of the United States.
-37/
Section 57(c)(2) of the Atomic Energy Act, 42 U.S.C. 2077(c)(2).
.,A.
C.
The Agreement of Cooperation Requirement The United States and India have entered into an agreement for cooperation pursuant to Section 123 of the Atomic Energy Act. -38/
In a letter to the U.S. Department of Energy dated December 8,1977, the Government of India assured the United States that the material covered by XSNM-1222 and any r,taterial produced through the use of that material would be subject to all the terms and conditions set forth in that Ag reement.
We therefore conclude that the Agreement for Cooperation requirement set forth in Section 57(c)(1) of the Atomic Energy Act is met by this application.
V.
Conclusion For the reasons set forth above, we believe that License Application No. XSNM-l??? meets all the rec uirements relevant for issuance under the Atomic Energy Act of 1954.
~38/
Agreement for Cooperation for Civil Uses of Atomic Energy between the United States and India, signed at Washirgton, D.C. on August 8, 1963, T. I. A. S. 5446.
1 March 23, 1979 SEPARATE VIEWS OF COMMISSIONER AHEARNE Summary The appropriate decision on this application is neither clearly for nor against shipment of the fuel.
The NNPA set up ix criteria (Section 127 of the Atomic Energy Act) which went into effect with the Nuclear Non-Proliferation Act of 1978 covering IAEA safeguards, nuclear explosives use, physical security, retransfer, reprocessing, and sensitive nuclear technology. The NNPA also added a criterion (Section 128) that will be in place for applications received after September 10, 1979, namely that IAEA safeguards be applied to all peaceful nuclear activities (full-scope safeguards).
The decision on whether the Section 127 criteria are met cannot be restricted to determining they are met today.
I believe Congress in-tended we look at the future.
Thus, I agree we must consider both the immediately effective criteria and the effect of the delayed safeguards criterion.
The main issue regarding this license relates to India's position that the US-India Agreement for Cooperation depends on the US supplying fuel, which in turn is affected by the full-scope safeguards criterion.
I c nelude the Section 127 criteria are met today.
Therefore, the issue is whether they are met if one looks prospectively at the Section 128 cut-off date, i.e., whether the license can be granted despite an identifiable risk that measures and controls required by the NNPA will not be maintained in the future. A decision on this issue involves an assessment of two uncertainties.
First, the degree of risk is uncertain.
Second, congressional intent concerning the impact of this risk on the Commission's determination is uncertain.
In reaching my decision, I first made a judgment about the risks of exporting this material to India.
Negotiations with India are continuing. Although the degree of optimism fluctuates from day-to-day, I believe progress has been made.
I then measured this risk against general congressional expectations and intent because there is no precise ground rule in the statute regarding how we should weigh the uncertainty.
Congress clearly understood that difficult negotiations would be required with Indi>, provided a grace period for those negotiations and in general expected exports could con-tinue to India during this period.
The remaining issue is whether there are important factors Congress overlooked.
It is clear Congress under-stood the difficulties of negotiation; it is not clear Congress understood the tie India claims between the US supplying fuel and the Agreement for Cooperation.
I conclude that because Congress stressed achieving fill-scope safeguards in India, believed this could be achieved, and put in a period for the difficult negotiations, it is appropriate to accept greater uncertainty for the likely acceptance of full-scope safeguards (and conversely, application of the Section 128 cut off).
I also concluje the current Government of India has demonstrated the type of actions the NNPA asks us to encourage and to support.
I conclude it is consistent with congressional intent to find this license meets the NNPA licensing criteria despite the uncertainties about future application of those requirements.
Therefore, although I believe the legislative history is less clear than Chairman Hendrie and
Commissioner Kennedy see it, I join them in finding this license application meets the requirements of the fluclear tion-Proliferation Act and should be granted.
I.
Background
The Commission again considers an application to ship fuel to the Tarapur reactors in India.]/ We have before us a request to export about 8 metric tons of fuel (the U.S. has already exported about 95 tons to these reactors). Almost one year ago, a similar application was the subject of extensive discussion in the Commission, the Executive Branch, and the House and Senate. At that time, the Commission split 2 to 2 on whether, given the terms of the Nuclear Non-Proliferation Act of 1978, 2f a shipment of fuel to India should be licensed by the NRC. 3/ Following the procedures in that law, the application was referred to the President, the President authorized shipment of the fuel, the decision was forwarded to Congress, and the House of Representatives, in effect, approved the President's action by voting down a resolution of disapproval. 4]
As demonstrated by the extensive consideration last year, this licensing action is not a straightforward, simple one.
The appropriate decision is neither clearly for, nor against, shipment of fuel.
-1/
License Application No. XSNM-1222, filed by Edlow International Co.
as agent for the Government of India on November 1 1977.
2/
Pub. L. No.95-242, 92 Stat. 120 (1978)(hereinafter NNPA).
_3]
Edlow International Co. (Agent for the Government of India on Application to Export Special Nuclear Material), CLI-78-8, 7 NRC 436 (1978).
4/
Id.; Exec. Order No. 12055, 43 Fed. Reg. 18157 (1978); "Statemen' of President Carter Accompanying Executive Order on Export of Special Nuclear Material to India" to Congress (April 27, 1978); H Con. Res. 599, 95th Cong., 2d Sess.,124 Cong. Rec. H6517 (daily ed. July 12,1978).
Although both the House and Senate held hearings, action by the Senate became unnecessary.
Congress may block an export authorized by the President by adopting a concurrent resolution disapproving the export.
Atomic Energy Act of 1954, as amended, s 126b(2)(here-inafter AEA); NNPA 5 304(a).
House rejection of a disapproval motion precluded a concurrent resolution of disapproval.
After the Commission split 2-2 on the last license, Senator Glenn said:
[T]he NRC referral of this export application to the President and ultimately to us was entirely consistent with the letter and the spirit of the Nuclear Non-Proliferation Act.
...I believe all the NRC Commissioners acted within the discretion conferred upon them by the Nuclear Non-Proliferation Act...The Comissioners were faced with a complex and difficult decision, whose outcome was not clearly determined by the terms of the Nuclear Non-Proliferation Act and they were required to exercise their judgment in deciding whether the Act's immediately applicable, or " Phase I," criteria were met. 5/
The most difficult issue, as will be discussed below, turns on the application of what are called Phase I criteria (immediately effective)in light of the Phase II criterion (full-scope safeguards requirement, effec-tive at a later date).
In commenting last year on the difficulty facing the NRC in this area, Senator Percy said:
[I]t would be a serious misreading of the Act and the legis-lative history to suggest that the Phase I criteria are met by definition in all cases where we have existing agreements for cooperation, and that NRC's finding regarding those criteria is essentially an automatic one. 6/
The issue of whether to license the shipment of fuel to India obviously was, and still is, a difficult judgment.
II.
NNPA Requirements The Nuclear Non-Proliferation Act, as is now well known, has laid out specific export licensing procedures and added a set of explicit 5/
Nuclear Fuel Export to India:
Hearing Before the Subcomm. on Arms Control Oceans and International Environment of the Senate Comm.
on Foreign Relations, 95th Cong., 2d Sess. 5-6 (1978)(hereinaf ter Senate India Hearings).
6/
Senate India Hearings at 25.
-3 criteria to be used by the Commission in reaching a judgment on an export license application. 7/
A.
Executive Branch Judgment Before the Conmission may act, the Executive Branch must make a judgment that the proposed export is nor " inimical to the common defense and security." 8] This judgment, which is coordinated by the State Department, addresses the extent to which the specific export criteria are net, compliance with the relevant agreement for cooperation, and other factors such as impacts of the licensing action on U.S. non-proliferation policy. 9/
In this case the Executive Branch found the proposed export met all relevant criteria.
It further found denial of the export would seriously undermine efforts to persuade India to accept full-scope safeguards and would prejudice other U.S. non-proliferation goals. M/
B.
Section 127 Criteria Section 305 of the NNPA amends the Atomic Energy Act by adding Section 127, which sets forth six criteria to govern exports.
These criteria, sometimes referred to as Phase I criteria, were imme/iately 7/
NNPA 5 304-308.
8]
AEA 5 126a(1), NNPA 5 304(a).
9]
E M/ Memorandum from !.ouis V. Nosenzo, Department of State, to James R.
Shea, Nuclear Regulatory Commission (September 15,1978)(enclosing Executi"9 Branch analysis for XSNM-1222).
effective upon Presidential signature of the NNPA. H/ They cover:
(1)
IAEA safeguards, (2) use of exports for nuclear explosives, (3) physical security, (4) retransfer, (5) reprocessing, and (6) sensitive nuclear technology.
The Commission's determination that the criteria are met is to be based upon "a reasonable judgment of the assurances provided and other information available to the Federal Government." 12f The Commission receives "other information" through a process of interagency cooperation and information exchange which was in place even before the NNPA was passed.
C.
Section 128 Criterion Section 306 of the NNPA adds Section 128 to the Atomic Energy Act, introducing the " Phase II criterion.
This section requires the acceptance of " full-scope IAEA safeguards" as a condition of continued export to non-nuclear-weapon states (i.e., IAEA safeguards must be main-tained for all peaceful nuclear activities in the recipient country',
This requirement is to be applied to any application filed at least 18 H/
In addition to the Phase I criteria, the Commission is required to find that "any other applicable statutory requirements" are met.
AEA 5 126a(2), NNPA 5 304(a).
The Senate report for the NNPA indicates this refers primarily to the requirement for most exports that they be consistent with the applicable agreement for cooperation and to the requirement that the NRC find the proposed export will not be inimical to the comon defense and security.
S. Rep No.95-467, 95th Cong., 1st Sess. 13 (1977)(hereinafter Senate Report); see also AEA 5 54, 57c.
This export is consistent with the applicable agreement for cooperation between the United States and Inula.
See Executive Branch analysis for XSNM-1222, supra; letter from R. M. Ananda Krishnan, Embassy of India, to Vance H. Hudgins, U.S. Energy Research and Development Administration (November 8,1977). After consideration of the Phase I criteria, I find no residual factors which would cause me to deny the export as inimical if these criteria are met.
I also find no reason to believe the egort would constitute an unreasonable risk to the public health and safety.
l_2/ AEA 5126a(2), NNPA 5 304(a).
2
- months after enactment of the NNPA (September 10,1979), or to any application for which the first export occurs 24 months after the date of the law (March 10,1980).
Rather than unilate ally imposing this condition immediately, the NNPA provides a grace period to allow negotiations with recipient countries.
6-Although normally this sec *1n would not now be an issuc since it is not yet in effect,13/ it is a central issue with respect to India.
In the l_3] An argument c n be made that the Commission should not p ant this license at th:.
. int in time because the export woulu frustrate Congressional incent that there be a moratorium ca exports if the requirements of Section 128 are not met or waived by certain dead-lines.
It can be argued approval would unreasonably extend the statutory " grace period." Thus, the Commission should not approve the export now unless delay would jeopardize the fuel reloading needs of the Tarapur reactors.
If at all possible, it should wait until after the deadline to see whether India will meet the require-ments for full-scope safeguards.
I would disagree with this interpretation of the application of Section 128. As the Senate Report evolains:
In defining what exports will be covered by the additional criterion [Section 128], the bill refers to any application which is filed after 18 months from enactment and to any application filed prior to that date for an export which would occur at least 24 months after enactment.
The reason for this provision is to ensure that a large nu.1ber of applications covering future exports will not be filci in the 18th month to avoid this requirement.
However, the 6-month lagtime is allowed for licenses legitimately filed prior to the 19th month where the actual shipping process is a lengthy one. The flRC should also not permit any other highly unusual proposals which are intended to circumvent this statutory provision.
Senate Report at 18.
This application was submitted November 1,1977, well before September 10, 1979.
The first shipment, which was originally scheduled for April 1978, will take place as soon as the applica-tion is approved--also prior to the relevant deadline. A strict reading of Section 128 leads to the conclusion it should not be applied to this export.
Furthermore, although it is true the fuel exported under this license may not be used in the Tarapur reactors until 1980 or 1981, the application clearly was not filed early for the purpose of circumventing the NNPA since it predates the Act, and the shipment schedule is not a " highly unusual" proposal " intended to circumvent this statutory provision" but rather is readily explanable from an operational standpoint.
The export material must be fabricated into fuel before it can be used in the reactors at TAPS.
Shipment of the material at this time is needed to provide a reasonable amount of time for fabrication of the fuel before it is to be used at Tarapur.
Consequently, this application does not present the kind of unusual circumstances under which the Commission would be justified in extending the language of the NNPA to bring into play the full-scope safeguards criterion even though literally it does not apply.
Agreement for Cooperation between India and the United States, 14/ India emphasized that it believed its commitments to the United States were in consideration for U.S. supply of fuel.
It is conceivable that (1) India will continue to refuse to apply full-scope safeguards;(2) as a result, the U.S. will refuse to ship fuel after the Section 128 deadline; (3)
India will contend this breaches the Agreement for Cooperation; and (4) consequently, India will no longer consider itself bound by the terms of the Agreement.
Because the Section 127 findings rely heavily on assurances provided in the Agreement for Cooperation, it might be argued that:
today's judgment must include a prospective look; it is unclear the Agreement will be in effect after the full-scope safeosa ds requirement becomes effective; and, therefore, the Section 127 criteria are not met for this export.
D.
Application of the Section 127 Criteria I agree that a decision on whether the criteria are met cannot be restricted to a determination that circumstances today satisfy all the requirements.
Consideration must be given to the future course of events.
I also believe Congress intended some consideration be given to the futm e impact of the full-scope safeguards requirement.
However, as will be discussed Selow, I believe the Congressional decision to provide a grace period for ?egotiations on the requirement is important in this consideration.
14/ Agreement for Cooperation Between the United States and India Con-cerning the Civil Uses of Atomic Energy, August 8, 1963, 14 U.S.T.
1464, T.I.A.S. No. 5446.
I find it useful to examine what the criteria mean in this particular case, judge whether they are met now, and estimate what is likely to occur in the future.
Criterion No. 6 15] applies to the export of sensitive nuclear technology.
Since the proposed export license for fuel to Tarapur does not involve sensitive nuclear technology, criterion 6 does not apply in this case.
Criterion 316] requires maintenance of " adequate physical measures." Unlike criterion 1, this specifically requires a determina-tion of adequacy.
The NRC has interpreted adequate measures to mean measures which provide protection comparable to that provided by measures found in INFCIRC 225/ Revision 1.
17] The State Department has received assurances from India in a letter dated August 30, 1978, that such measures are in place and will be maintained. l_8f In addition, representa-tives of the U.S. Governt - nt, including the NRC, have in the past observed the physical security system of India and judged it to be adequate.19/
On the basis of this information, I conclude that Criterion 3 is met now, and will be met in the future.
15/ AEA 5127(6), NNPA 5 305.
16] AEA 5127(3), NNPA i 305.
-17/
10 CFR 5110.43; "The Physical Protection of Nuclear Materials,"
INFCIRC/225/Rev. 1 (June 1977)(information circular distributed by the International Atomic Energy Agency).
H/ Letter from Gurdip S. Bedi, Embassy of India, to Vance H. Hudgins, U.S. Department of Energy (August 30,1978).
H/ Executive Branch analysis for XSNM-1222, supra.
9_
The four most difficult criteria, which have been the subject of much of the debate over the last year, are those regarding safeguards, non-nuclear explosive use, reprocessing, and retransfer.
With regard to this particular license application:
Criterion 12_0/ requires IAEA safeguards be applied to this fuel, previously exported items, and any special nuclear material (SNM) produced in or through the use of these items.
Criterion 2 23 requires no use of these items for any nuclear explosive device.
Criterion 4 g/ requires no retransfer of this fuel (or SNM produced through its use) without U.S. approval.
Criterion 5 2_3/ requires no reprocessing of this fuel (or 3
SNM produced through its use) without U.S. approval.
With regard to Criterion 1, Article VI of the Agreement for Cooperation contains provisions for safeguards.
To implement this section, India and the United States entered into a trilaterial agreement with the IAEA for application of safeguards to items tra.nsferred under the Agreement for Cooperation as well as to special nuclear material used in, or produced through the use of, those items. M/ Thus, currently assurances exist that Criterion 1 is and will be met.
2_0/ AEA 5 127(1), NNPA 5 305.
21f AEA 5 127(2), NNPA 5 305.
22_/ AEA 5 127(4), NNPA 5 305.
M/ AEA i 127(5), NNPA 5 305.
M/ Agreement Between the International Atomic Energy Acency, India and the United States Relating to Safeguards Provisions, January 27, 1971, 22 U.S.T. 200, T. I. A.S. No. 7049.
It might be argued that the safeguards as implemented are inadequate, precluding a finding that Criterion 1 is met.
It is perhaps accurate that the Indian system has some weaknesses, but this is not unique to India--many countries are working to improve their safegaurd systems because they currently have weaknesses.
I have seen nothing to indicate that India's system is significantly deficient.
I conclude the Government of India is seriously safeguarding the material and intend to do so in the future.
Therefore, I conclude that R the Agreement for Cooperation remains in effect, Criterion 1 is and will be satisfied.
The impact on Indian safeguards of a U.S. decision to deny exports of fuel after Section 128 becomes effective is unclear.
India may redefine its commitments following a failure of the U.S. to supply fuel.
However, a legal case can be made that termination of fuel supply does not relieve India of its obligations under the Agreement for Cooperation to maintain safeguards.
25/ Furthermore, India m j choose to maintain safeguards even if it contends the agreement is terminated.
In similar circumstances following the termination of Canadian nuclear cooperation, India elected to maintain safeguards on the Rajasthan reactors.
- Finally, 25/ The fuel contract, which is referenced in Article II A. of the Agreement for Cooperation, contains a requirement that India comply with the laws of the U.S. with respect to the supply of material.
Contract of Sale of Enriched Uranium Between the United States Atomic Energy Commission Acting on Behalf of the Government of the United States and the Government of India, Article III D. (1966)(as amended).
If Section 128 of the AEA is not met, it can be argued India has not complied with the applicable law, relieving the United States of its obligation to supply fuel.
Thus, it can be argued a refusal to supply fuel until full-scope safeguards are implemented would be consistent with the contract and the Agreement for Cooperation and would not affect Indian obligations under the agreement.
for the near term, India will probably need outside assistance to fuel the Tarapur reactors.
The Nuclear Supplier Guidelines, 2y subscribed to by all potential suppliers, require that IAEA safeguards be maintained by the recipient.
Clearly, Section 128 and the possible termination of U.S.
supply of fuel introduce significant uncertainties into an evaluation of future application of safeguards.
These uncertainties will be discussed below.
Criterion 2 requires that U.S. exports (and special nuclear material produced from those exports) not be used for any nuclear ex-plosive device, or for research on, or development of, any nuclear ex-plosive device. Article VII A. 2. of the U.S.-Indian Agreement for Cooperation assures that items transferred under the Agreement will not be used for atomic weapons or other military purpose.
~urther, in a letter dated Septcmber 17, 1974, India agreed that special nuclear material made available for or produced in Tarapur would be " devoted exclusively to the needs of that Station" unless there is a joint agreement otherwise. E/ These commitments are equivalent to that required by the criterion. M/
Statements by Indian officials have been brought to the attention of the Commission as bearing on Indian intentions in this area.
Recently, the Indian Foreign Minister, in a press interview, 26/
INFCIRC/254 (February 1978).
27] Letter from Dr. Horri N. S'ethna, Chairman of the Indian Atomic Energy Commission, to Dr. Dixie Lee Ray, Chairman of the U.S.
Atomic Energy Commission (September 17, 1974).
28/ The NNPA requires the Commission find the criteria "or their equiva-lent" are met. AEA 5 126a(2), NNPA 5 304(a).
12-was quoted as saying that " India could not foreclose its nuclear options
' for all time to come'."
29/ He was quoted as denying the Prime Minister 9
had ruled out peaceful nuclear explosions for India.
However, the State Department has advised us that nothing in that inter.iew should be con-strued as constituting a change in the Prime Minister's position as has been stated previously to the Indian Parliament and before the Special Session on Disarmament of the Ucited Nations. 30/ In addition, in a recent interview the Prime Minister is reported as reconfirming he does not believe the statement "[ nuclear tests] necessary for peaceful 29/
Interview with Atal Bishari Vajpayee, Foreign Minister of India (January 30,1978)(for Bombay English Weekly, " Blitz").
M/ One example of this position is the following statement by Prime Minister Desai before the Indian Parliament in August 1978:
As regards scientific necessity of explosions, I have already stated that the main countries in which nuclear research is taking place are moving away from such explosions except for military purposes. Apart from this I cannot think of any use of such explosions which cannot be obtained by other means except that the alternatives would be more expensive and time-consuming.
Should we subject thousands of people in the vicinity to hazards which are associated with nuclear explosions merely to save time and money? As regards the sciratific value, of such explosions from my knowledge of the result of Fokharan explosion I find that the " experiment" if it can be called that merely confirmed certain theoretical knowledge and gave some information of the behaviour of radioactivity and neighbouring rocks and shells which was considered to be of value.
I regard these results inadequate compensation for the jolt to international opinion which it has imported and the consequences it has had on our peaceful pursuit of nuclear research and development.
It is true that in this development we have taken a unilateral decision to abjure explosions even for peaceful purposes...So far as Irdia is concerned, as a nation we have been traditionally devoted to peace...To my mind the only way to secure this objective is by way of outlawing all atomic tests or explosions.
This is the objective to which the world is moving and this is the goal which we have set for ourselves.
This is the field in which we have to set an example.
nuclear uses" has any meaning. 31/ My assessment of all available information laads me to conclude India intends to honor its commitment.
It does not intend to use the items in question for nuclear explosives--
including peaceful nuclear devices.
Again, I conclude this criterion is and will be met if the Agreement for Cooperation continues.
However, uncertainty is introduced by potential Indian reactions to possible U.S. denial of fuel exports as a result of the Section 128 criterion.
Criterion 4 is a restriction upon the retransfer of this fuel or any special nuclear material produced through the use of this fuel.
Article VII A. 2. of the Agreement for Cooperation states that items supplied under the agreement will not be transferred "to unauthorized persons or beyond the jurisdiction of the Government of India" unless U.S. and India both agree to the transfer and the U.S. finds that the transfer falls within the scope of an agreement for cooperation between the U.S. and the recipient nation. Article II F. provides that special nuclear material produced in the Tarapur reactors will not be transferred without U.S. approval.
The criterion is and will be met, once again, as long as the Agreement remains in effect. An Indian contention that the Agreement is no longer in effect would undermine this judgment, although there has been no indication that India intends to retransfer the fuel in the event it finds itself legally free to do so.
~~~31/ Interview with Shri Mararji Desai, Prime Minister of India, in Colombo, India (February 6, 1979).
Finally, Criterion 5 requires that this ma*.erial and special nuclear material produced through its use will not f e reprocessed, and no spent fuel containing such material will be a'tered unless the prior approval of the United States is obtained.
Article II E. of the Agreement for Cooperation states that re-processing of special nuclear material from Tarapur in Indian reprocessing facilities may take place
...upon a joint determination of the Parties that the provisions of Article VI of this Agreement [ safeguards]
may be effectively applied, or in such other facilities as may be mutually agreed.
It is understood, except as may be otherwise agreed, that the form and content of any irradiated fuel elements removed from the reactors shall not be altered before delivery to any such reprocessing facility.
Although the language is not as clear as I would prefer, I find this assurance to be equiva' ant to that required by the criterion since the United States must agree that safeguards are effective.
In addition, it is relev..t to note this language is similar to that found in agreements with several other countries (Japan, Brazil, Finland, Argentina E/).
The Senate report for the NNPA specifically states:
Although the actual language in our existing agreements for cooperation varies, and seldom corresponds precisely to the language of these criteria [Section 127], it is 3_2/ Agreement for Cooperation Between the United States and Japan Con-2 cerning the Civil Uses of Atomic Energy, February 26, 1968, Article VIII F.,19 U.S.T. 5214, T. I.A.S. No. 6517 (as amended March 28, 1973, 24 U.S.T. 2323, T.I.A.S. No. 7758); Agreement for Cooperation Between the United States and Brazil Concerning the Civil Uses of Atomic Energy, July 17, 1972, Article VIII F., 23 U.S.T. 2477, T.I.A.S. No. 7439; Agreement for Cooperation Between the United States and Finland Concerning the Civil Uses of Atomic Eriergy, April 8, 1970, Article VIII F., 21 U.S.T.1368, T.I.A.S. No. 6896; Agreement for Cooperation Between the United States and Argentina concerning the Civil Uses of Atomic Energy, June 25, 1969, Article IX E., 20 U.S.T. 2587, T. I. A.S. 6721.
our understanding that each of these basic requirements and rights are contained in those agreements [except as]
noted below [ EURATOM and IAEA with respect to criteria four and five]. 3_3/
3 Thus, the legislative history of the NNPA supports the conclusion that this language is acceptable.
The Department of State has informed the NRC that India has baen advised the U.S. does not intoid to make the determination required by Article II E. at this time. 34/ Available information indicates reprocessing will not be a problem as long as India believes the U.S.
has met its obligations under the agreement.
Therefore, although some questions may be raised, I conclude that this criterion is and will be met iff, the Agreement stays in effect.
As with the other three criteria, the cr'.tical issue then is whether one can conclude it is met if one looks prospectively at the Section 128 cut-off date.
E.
Prospective Application of Section 127 Criteria I do not believe the Section 127 criteria are satisfied solely by a finding that required constraints and controls are in place today.
As stated above, I agree a decision on the criteria must include consideration of the future course of events.
If there is evidence the Section 127 requirements may not be met in the foreseeable future, the Commission should consider this factor.
In this consideration it should be recognized that confidence in future application of the requirements almost surely 3_3/ Senate Report at 16.
3 34/
Executive Branch analysis for XSfN-1222, supra.
'will be less than confidence in present application.
There is inherently more uncertainty in the prediction of future events than in the assessment of an existing situation.
The case before us raises particular concerns in this area, primarily concerning the potential impact of the Section 128 full-scope safeguards requirement.
Looking prospectively at the Section 128 cut-off date, there are a variety of possible outcomes.
India may or may not accept full-scope safeguards.
Thus, we may or may not be faced with applying the Section 128 sanction.
India may or may not interpret a cut-off of fuel as releasing it from some or all of its obligations under the Agreement for Cooperation.
India may or may not provide additional assurances which would satisfy the criteria, even if the Agreement for Cooperation is terminated.
India may or may not choose to do acts prohibited by Section 127 in the event it contends it is legally free to do so.
Furthermore, Section 128 contains a provision allowing the President to waive this criterion if failure to approve an export "would be seriously prejudicial to the achievement of United States non-proliferation objectives or otherwise jeopardize the common defense and security." M/
M/ AEA i 128(b),NNPA 5306.
In such a case, the Presidential action must lay before the Congress for 60 days and be subject to a con-current resolution of disapproval.
I understand that the current position of the State Department, as the Deputy to the Under Secretary testified, is "it is highly unlikely we would continue to supply
[ material after the grace period] and it is highly unlikely there would be a Presidential waiver." Senate India Hearings at 352 (testimony of Joseph S. Nye, Deputy to the Under Secretary for Security Assistance, Science and Technology, Department of State).
However, although Dr. Nye was "hard pressed to specify or imagine the conditions that would make the waiver likely," (_Id.) the potential exists and it is really too early in the negotiations to expect the Executive Brancn to make a final commitment on this possibility.
I expect that if progress has been substantial and successful negotiations appear likely, a waiver would be authorized by the President.
If negotiations have been stalemated, I would not expect a waiver to be authorized.
Thus, looking forward to the Section 128 cut-off date, I cannot postulate a sequence of events which leads inevitably either to continued controls or to noncompliance with the Section 127 criteria.
There is signifir.c ncertainty since there are many steps which have not yet been taken. An assessment of this uncertainty is necessary to reach a decision on the criteria.
I conclude there is substance to the concerns about future application of the criteria.
It is well known that in March 1978, Prime Minister Desai is reported to have stated in Parliament:
[W]e cannot use any other thing except enriched uranium in this and we are bound by the agreement that we cannot obtain it from elsewhere as long as they do not say no.
If they say: no, once I hear that, then all ways are open to us, even the processing of the used thing will be open to us.
Then we are not bound.
36/
Thus, there is reason to be concerned about future compliance with the criteria.
If intervening steps lead to a U.S. decision to cut off the fuel supply, there is a reasonable possibility the criteria will not be met, although, as mentioned above, that result is far f om certain.
However, it is my judgment that there is a basis for optimism about the outcome and' that there has been progress.
In spite of tho many historic and internacional difficulties associated with such a
-36/ Statement of Shri Mararji Desai, Prime Minister of India, to the Indian parliament (March 1978) (Embassy New Delhi telegram number 4620).
step, India proposed a committee to review the issue of full-scope safeguards--certainly a significant positive step in the negotiating process called for under the NNPA.
khether or not the difficulties in getting the committee established are surmounted, it is clear the Government f India is interested in negct ations on both technical and political i
levels to resolve safeguards problems.
The precise degree of optimism fluctuates from day-to-day as the negotiating process continues.
But it seems clear to me that, overall, substantial progress has been made.
Clearly there is a risk the criteria will not be met after the Section 128 cut-off date.
It is my judgment that, on balance, this risk is not significantly different from that which existed at the time the NNPA was passed.
We are closer to the deadline, nd there have been some negative indications; but the lines of communication are open, and there is a fair basis for continuing negotiations.
What is not obvious is the effect this uncertainty should have on the Comnission's judgment.
Under the statute a license may not issue until "the Commission finds, based cn a reasonable judgment.. that the criteria in Section 127 of this Act or their equivalent...are met." 37/
Nothing in the NNPA provides explicit guidance on what constitutes a
" reasonable judgment." I agree with Senator Percy's assessment:
37/ AEA i 126a(2), NNFA i 304(a).
-19
...that a positive finding on Phase I is not precluded by the mere possibility that af ter 18 months controls on~-
previous exports would be endangered.
However, comon sense dictates that Phase I could not be satisfied if such a breakdown were a virtual certainty.
38f That leaves a significant grey area between " mere possibility" and
" virtual certainty."
It is hard to formulate a precise ground rule for decision in this area.
However, that is understandable; the decision is supposed to be a judgment rather than just a simple finding within a tightly constrained legal framework. 39/
When a statute does not provide clear instruction, it is appropriate to turn to Congressional intent for further guidance on proper application of the law.
I found Congressional views concerning the following areas to be of particular relevance to this case:
the objectives behind imposing Phase I criteria immediately but providing a grace period before the Phase II safeguards provision becomes effective, the specific consideration given to continued cooperation with India, and the overall purposes of the NNPA.
38/
Senate India Hearings at 25.
39/
See AEA 5126 a(2), NNPA i 304(a).
As Senator Glenn said during a discussion relating to the nature of the Commission's decision process:
I think the draf ters, all of us who worked on the Non-Proliferation Act and the Commission in its own prior opinions and its recently promulgated regulations bent over backwards to avoid overjudicializing the export licensing process....[T]he essence of the export licensing process is a judgmental assessment of the appropriate policy of tne United States in the area of nuclear exports.
Senate India Hearings at 327.
First, during development of the NNPA, there was substantial consideration of the impact of Phase I criteria on United States' ability to export to nations with whom we had existing agreements for cooperation. 40/
Congress specifically addressed the possibility of a " moratorium" on exports as a result of imposing Phase I criteria immediately.
The Senate report concluded, "As currently drafted, these Phase I export criteria will not result in an immediate moratorium on U.S. nuclear exports."41/
The House report for its version of the NNPA (basically 1
similar to the Senate version which was enacted) stated:
In general, these criteria correspond to undertakings export recipients have previously given the United States in their existing agreements for cooperation with this country.
Thus, in most cases the committee anticipates that application of the criteria will provide a basis for continued exports to countries currently engaged in nuclear commerce with the United States. 42/
Senator Glenn, the Senate floor manager o.' the NNPA, covered this issue in his opening statements during Senate floor consideration of the bill. M/
In discussing his remarks he later explained:
-40/ Hearings Before the Subecmm. on Energy, Nuclear Proliferation and Federal Services of the Senate Government Affairs Comm., 95th Cong., 1st Sess. 247, 252 (May 6, 1977); Hearings and Markup Before the Subcomm. on International Security and Scientific Affairs, and on International Econcmic Policy and Trade of the House Com. on International Relations, 95th Cong., 1st Sess. 107-08 (1977);
Hearings before the Subcom. on Anns Control, Oceans, and Inter-national Environment of the Senate Comm. on Foreign Relations, 95th Cong., 1st Sess. 33 (1977); Hearings Before the Subcom. on Energy Research and Development of the Senate Com. on Energy and Natural Resources, 95th Cong., 1st Sess 62 (1977).
4_1/
Senate Report at 16.
4_2]
H. Rep. No.95-587, 95th Cong., 1st Sess. 22 (1977)(hereinafter House Report).
M/
124 Cong. Rec. S1065 (daily ed., Feb. 2,1978).
21 My view that the Phase I criteria represented "nothing more than a common sense codification of existing policy regarding nuclear exports to nonweapon states," signified that the criteria contained no abrupt departures from then cur;ent requirements, which might put a sudden halt to exports. 44,/
This does not lead me to believe approval of exports was to be a foregone conclusion.
If Congress intended exports to be automatkally approved, it would not have developed 1mmediately effective criteria and requin ed the Commission to make a judgment on a case-by-case basis that these criteria were met.
However, it demonstrata Congress expected approval by the Commission to be the rule rather than the exception.
Further, if Congress had intended that enactment of the law would lead automatically to cutting off exports to some country, it undoubtedly would have expressed that intent.
The legislative history implies Congress did not foresee circumstances where denial was to be automatic.
This assessment is consistent with subsequent explanations of Congressional intent such as the following statement by Senator Glenn:
[I]n other words there was no case anticipated where the deviation between the existing agreement and the Phase I criteria was so great as to make an immediate export cut-off inevitable.
In this sense no export moratorium for any individual nation was mandated. 45/
Admittedly, refusal by the Commission to issue a license on the basis that the criteria are not met does not inevitably lead to cutting off exports since the President, subject to congressional veto may overrule its decision.
- However, the clear implication in the statements discussed above is that exports are to continue under the criteria.
If Congress had foreseen circumstances under which it expected the Presidential override authority and subsequent congressional i4/ Senate India Hearings at 7.
45/ Senate India Hearings at 6.
in' action to be the basis for continued exports, it undoubtedly would have discussed the matter.
Consequently, based on the previous discussion of a
the criteria, I believe the license application is reasonably straight forward and probably should be approved unless I can identify important factors which Congress overlooked or did not have an opportunity to consider.
Congress specifically considered the Indian situation.
The
~
general expectation was that exports to India would continue under the 9
NNPA criteria during the period prior to the Section 128 cut-off date.
lf 4f/ Under these circumstances, a crucial question is whether Congress considered the interaction between the U.S.-Indian Agreement for Cooperation, the Section 127 findings, and the full-scope safeguards requirement.
If it were clear Congress had considered the relationship between Section 128 and the Agreement for Cooperation, I would conclude it understood the situation to meet the Section 127 criteria despite uncertainty arising from the full-scope safeguards criterion.
My examin. tion of the legislative history led me to conclude
~
Congress in general was well aware of the difficulties associated with India and understood continued exports to India involved some risk.
It certainly was aware of the historical situation and related concerns. 47/
It also was aware of the significant difficulties facing the U.S. in its attempt to negotiate full-scope safeguards with India. 48/
In addition, 46/
See e.g., Hearings and Markup Before the Subcomm. on International Security and Scientific Affairs, and on International Economic
~
Policy and Trade of the House Comm. on International Relations, 95th Cong., 1st Sess. 264 (1977).
47/
E.c.,124 Cong. Rec. 51068 (daiiy ed. Feb. 2,1978)(remarks of
=
Senator Ribicoff).
48/
See e.g., Hearings Before the Subccmm. on Energy, Nuclear Proliferation, and Federal Services of the Senate Comm. on Government Affairs, 95th Cong., 1st Sess. 273-74 (1977).
,- it clearly had considered the details of specific agreements for coopera-c tion. M/ Further, some in Congress were familiar specifically with the U.S.-Indian Agreement for Cooperation and some of its difficulties since it was cited as a particular example of the need for more precise agree-ments. 5,0/ However, I did not find specific discussion of the unique 0
provision in the U.S.-Indian Agreement for Cooperation which can be interpreted to tie Indian commitments to continued fuel supply and its relationship to the Section 127 findings.
Although Congress may well have been aware of this factor, that is not clear.
Consequently, I believe there is some uncertainty concerning Congressional intent regarding the application of Section 127 criteria to exports to India prior to imposition of the full-scope safeguards requirement and the acceptable degree of risk for the continued exports.
It is possiole Congress was not aware of the relationship and would have found the circumstances did not meet the Section 127 criteria if it had considered the matter.
Thus a reasonable argument can be made that it g/
See e.g., Hearings Before the Subcomm. on Energy, Nuclear Pro-liferation, and Federal Services of the Senate Comm. on Govern-mental Affairs, 95th Cong.,1st Sess. 351-52 (1977); Hearings and Markup on H.R. 862^ Before the Subcommittees on International Security and Scient.fic Affairs and on International Econcmic Policy and Trade of the House Comm. on International Relations, 95th Cong.,1st Sess. 350, 356-67 (1977).
See also AEA 5126a(2), NNPA 5 304(a)(Congress was aware the agreements for cooperation with the IAEA and Euratom did not contain provisions which would satisfy criteria lour (retransfer) and five (reprocessing).
So, the NNPA provides a two-year exemption from criteria four and five which covers these two cases if they agree to open negotiations with the United States.
Senate Report at 16-17.).
50/
See 124 Cong. Rec. S1340 (daily ed. Feb 7,1978)(remarks of Senator Moynthan).
would be consistent with Congressional intent to deny this export because of the uncertainty attributable to Section 128.
However, on examining general Congressional intentions and expectations for further guidance on proper application of the NNPA, I do not reach that conclusion.
One important factor is the " grace period" provided for negotia-tions on full-scope safeguards.
It leads me to believe special consideration should be given to uncertainty concerning the duration of Indian assurances which arises from the Section 128 requirement.
The House report on its version of the Section 128 criterion (basically the same as the enacted version) explained the objectives of this section in the following manner:
Section 504(e)(2) adds an additional licensing criterion which becomes effective 18 months after enactment of this bill.
This criterion requires that a recipient State permit IAEA safeguards to be applied with respect to all peaceful nuclear activities carried out within that State.
This requirement is an essential element of the bill, and in the committee's view, indispensable to any comprehensive nuclear antiproliferation policy.
The committee has, in the interest of flexibility, per-mitted an 18-month period of grace before requiring the mandatory application of this criterion.
In addition, the bill provides for further extension by Executive Order, subject to congressional disapproval by concurrent resolution.
India and South Africa would be most significantly affected by this requirement.
The committee feels strongly that the currently unsafeguarded facilities in those countries must be brought within the framework of the IAEA safeguards system if the American nuclear cooperation is to continue.
The committee is encouraged by the cooperative and constructive attitude manifested by the new government of India and is hopeful that provision for comprehensive IAEA controls will soon be achieved through mutually satisfactory negotiation. 51/
51/ House Report at 25.
This accommodation was stressed last May by the House manager of the NNPA, Mr. Bingham, who said, "[T]he Act contemplates there would be this period of 18 months to 2 years to try to work out difficult situations with regard to the commitment for overall full-scope safeguards." 52/
As the House indicated, Congress specifically considered India and recognized the need for a period of careful negotiations.
These points were brought out many times in the legislative history of the NNPA.
One of the clearest statements was made during the House International Relations Committee markup for the NNPA:
Eighteeen months af ter the enactment of this legislation, we would add an additional criterion:
No U.S. nuclear exports will go to any non-nuclear-weapon state which refuses to apply IAEA safeguards for all its nuclear facilities, regardless of their origin.
The principal effect of this provision - and the reason really for its deferral for 18 months - would be to terminate the U.S. nuclear exports to South Africa and India.
s The rationale is to provide maximum flexibility in the continuing negotiations with those two nations, to seek to turn them arnund - particularly in the case of India - turn India around where it had gone potentially toward the nuclear weapons option.
In return for opening their nuclear facilities to international atomic energy safeguards, we would continue nuclear trade with these nations.
So we are hoping for some progress.
There have been some very enceuraging signs from the new Indian Goverr, ment and we are simply seeking to allow the ongoing diplomatic efforts of the Adninistration some additional time in the hope of greater success. 53/
52/
Export of Nuclear Fuel to India:
Hearings and Markup Before the House Comm. on International Relations, 95th Cong., 2d Sess. 16 (1978)(hereinaf ter House India Hearings).
53/ Hearings and Markup Before the Subcomm. on International Security and Scientific Affairs', and on International Economic Policy and Trade of the House Comn. on International Relations, 95th Cong.,
1st fess. 264 (1977)(statement by Gerald F. Warburg, aide to Representative Bingham).
~
Similar points were made by Senator McClure during last year's Senate consideration of the Tarapur fuel case:
[S]ome...have indicated that the NRC's actions in failing to approve the export are consistent with the letter and spirit of the Non-Proliferation Act.
As the previous discussion indicates, I simply cannot agree with that interpretation of the Nuclear Non-Proliferation Act of 1978.
Not only is the statute on its face and all of the legislative history related to the House and Senate bills contrary to that conclusion, but all of my extensive discussions with the Administration and the sponsors of the Act in the Senate indicated throughout its consideration that the application of the export license procedures and the Phase I export criteria clearly were not intended to impose a moratorium during the so-called " grace period."
I cannot recount exactly how many times the Indian and Tarapur export cases were specifically the subject of those discussions, but I know that was the case on numerous occasions.
I also understand that the Committee staffs and the Administration officials who worked so hard in fashioning the Phase I and Phase II formulation in the statutory scheme focussed extensively on the Tarapur and Indian situation, and how the statutory requirements would impact on that situation.
In fact, much of the legislative history was expressly included to provide an underpinning of support for the Administration's negotiating efforts with the socalled controversial situations, expressly including India. 54/
I conclude:
(1) Congress placed great significance on achieving full-scope safeguards, particularly in India; (2) there was some optimism that this goal was achievable; (3) consequently Congress mandated a delay in the requirement in order to allow some time to reach agreement on differences which it recognized would be very difficult to resolve; and (4) generally Congress expected exports could continue to India in the interim and that this would aid negotiations.
These points were confirmed by Senator Glenn during Senate hearings on the last Tarapur license:
5_4/ Senate India Hearings at 19-20.
An important additional factor to be weighed are the pro-visions of the Nuclear Non-Proliferation Act permitting an 18-month grace period before exports are cut off to nations not accepting full-scope safeguards.
The clear purpose of this interim period was to allow for negotiations on what all have acknowledged is a thorny diplomatic problem.
There would be little point in waiting out this period, however, if India's position was so rigid that there was simply no prospect of obtaining our negotiating obj ective.
On the other hand, if there is a fair basis for continuing negotiations, the Act embodies a strong Congressional preference for pursuing the course within the time limits provided. 55/
One interpretation of this background would be to decide the Commission is not to include any consideration of the impact of the full-scope safeguards requirement in its decision because this would constitute a premature application of the Section 128 criterion.
I do not subscribe to this position.
It is not clear Congress was aware of and considered the crucial fact that Indian assurances relating to the Phase I criteria may be contingent on U.S. supply of fuel, which may be affected by the Phase II criterion.
The source of the current debate is this overlap of the immediately effective criteria and the delayed criterion.
It is not clear to what extent consideration of the Phase I criteria should extend to, and perhaps infringe upon, areas relating to Phase II.
Congress did not explicitly resolve this difficulty, and I am unwilling to find a Congressional intent to preclude entirely consideration of a problem it may not have been aware of.
Consequently, I must include some judgment on the impact of the Phase II criterion in my determination that the Phase I criteria are met.
However, it does not follow that the j5/ Senate India Hearings at 5.
license should be denied solely because significant uncertainty exists. 56/
I cannot ignore the strong Congressional interest in continuing negotiations.
Congress obviously intended to accept some risk in continuing exports to India.
The uncertainty which stems from the difficulty in predicting the outcome of the negotiations deserves special consideration.
As a general matter, we are never certain the criteria will continue to be met.
A variety of factors may make it difficult to know that required measures will continue into the indefinite future.
Undoubtedly the degree of uncertainty enters into any judgment made by Cormissioners that the criteria are met. Above some threshold (which I cannot describe in any quantitative manner and which probably varies among Commissioners),
a Commissioner decides he (or she) can no longer find the criteria are met.
But for me at least, because of the Congressional preference for negotiations during the interim period discussed above, the threshold is higher for uncertainty stemming from difficulty in predicting the outcome of negotiations for full-scope safeguards than for uncertainty caused by other factors.
5_6f This assessment is consistent with at least some of the interpre-tations expressed by Congressmen during discussions of the last Tarapur export.
For example, Senator Glenn stated:
What the phase I [ criteria] say among other things is that safeguards will be applied to our exports and this suggests a prospective look at safeguards even during the 18-month period. A prospective look in the case of India does not automatically result in the conclusion that India snould be cut off in the present one.
It is a judgmental issue that depends on one's view of the likelihood of India accepting full-scope safeguards within that 18-month period.
It was not congressienal intent, on the other hand, that no cat-offs occur in the next 18 months even if phase I criteria are violated.
Senate India Hearings at 21.
.~
_29 This preference is particularly important in light of the progress in negotiations.
The objective in providing some flexibility in the NNPA was to encourage achievement of full-scope safeguards.
For an otherwise close judgment, progress toward the desired goal is an important factor. Approval of the license would be consistent with an overall objective which is implicit in the licensing scheme.
The legislative history reinforces the relevance of this factor. At one point the Senate considered an amendment which would have required a license to be approved if there were "no material changed circumstances" since the previous license.
Thus, a country would be assured continued exports after one had been initially approved unless significant changes in circumstances occurred.
This amendment was rejected.
A basic reason for the rejection was a desire to allow the NRC to consider the progress made toward non-proliferation goals in sensitive countries.
Senator Percy specifically argued:
Under the amendment of the Senator from New Mexico the NRC would be required to continue to supply enriched uranium to India. What we have, and what we have ad-mitted from the start, is time.
We are the principle suppliers.
We have clout, and I think the world expects us to use that clout as a bargaining chip.
We want to be able to keep it 2.nd, for that reason, the distinguished Senator from New Mexicc's amendment would really undercut the policy of this Government to move toward nonproliferation.
Under this amendment exports would simply have to go out if there were no changed circumstances.
We want changed circumstrces in India. Sl/
Sl/ 124 Cong. Rec. S1334 (daily ed. Feb. 7, 1978)'(remarks of Senator Percy).
,, 0 If there had been no indications of progress towards U.S. non-proliferation goals, I would find that to weigh in favor of denial.
The fact that some progress has been made weighs in the other direction.
My judgment that this license should be issued is further sup-ported by the statenent of policy found in Section 2 of the NNPA.
The first two items under this section establish that it is the policy of the United States to (a) prevent proliferation, and (b) supply nuclear fuel to nations which adhere to effective non-proliferation policies.
When a uecision on the criteria is not otherwise clear, the expressed objectives of the NNPA should be given some weight.
The current government of India has taken truly significant steps to meet these proliferation goals.
India is the only country that having exploded a nuclear device has turned away from nuclear weapons and has demonstrated the ability to make the difficult choice of not continuing down that path.
Although the previous government was certainly not supportive of non-proliferation policy and acted in a manner which was inimical, the present government has done just the opposite--it has acted responsibly and c:urageously.
The actions of the previous Government of India were a major factor leading to passage of the NNPA.
- However, the current Government of India has demonstrated a strong commitment tos,ards world non-proliferation.
I believe that action is what the NNPA aa s ut to encourage and to support.
_31 III. Conclusion I do not believe the uncertainties stenming from the full-scope safeguards criterion require denial of this export.
For the reasons discussed above, on balance, I believe that the statutory scheme and legislative history support a conclusion that the intent of Congress was to permit continued support of India by the United States Government under the NNPA criteria, and further that the Indian Government has acted in such a manner that support should be continued.
It is my judgment that the license should be granted.
March 23, 1979 SEPARATE VIEWS OF COMMISSIONERS GILINSKY AND BRADFORD We find the application before the Nuclear Regulatory Commission for the export of enriched uranium to the Tarapur Atomic Power Station in India 1/ does not meet the standards for NRC approval set forth in the Atomic Energy Act.
We believe it is unwise for the Commission to relax those standards in order to accomodate a favorable decision.
Under the terms of that Act as amended by the Nuclear Nonproliferation Act the Commission cannot deny an export.
The Act sets forth several requirements, principally codified in the six safeguards-related criteria of Section 127. 2/
If the Commission cannot find upon a " reasonable judgment" that an application meets these requirements, it must refer the application to the President, who has broad discretion under the law to balance overall U.S.
nonproliferation and security interests. 3/
Congress intended to separate the function of the Commission in applying the licensing criteria from that of the Fresident and the Congress in their con-sideration of broader questions of foreign policy.
The
-1/
The License Application is numb ^r XSNM-1222, filed by Edlow International, as agent for the Government of India, to export 404.51 kilograms of U-235 contained in 16803.6 kilograms of uranium enriched to a maximum of 2.71 percent.
2/
Section 127 of the Atomic Energy Act, 42 U.S.C.
2156.
3/
Section 126 of the Atomic Energy Act, 42 U.S.C.
2154.
t Section 127 criteria do not apply to the President's decision or to any Congressional review of that decision. 4/
The Commission has not taken the Presidential referral provision of the law lightly.
Out of more than one hundred major export applications considered by the Commission, only one, the first proposed export to India subject to the new law, has been referred to the President, 5/ who subsequently authorized the export. 6,/
Congress did not override that action. 7/
-4/
A close scrutiny of Presidential and Congressional actions on the Tarapur license uakes clear that neither the President nor the Congress felt
. incumbent on them in carrying out their respective roles under the Act to _eexamine the question of whether the criteria were met in determining whether larger non-proliferation objectives required that the export should be authorized.
-5/
This was License Application XSNM-1060, referred to the President on April 24, 1978.
6/
E.O.
12055, April 27, 1978.
-7/
The United States Senate Committee on Foreign Relations and the United States Housa of Representatives Committee on International Relations held hearings on the President's decision at which the Commission, the Executive Branch and the petitioners testified.
See Hearings before the Subconmittee on Arms Control, Oceans and International Environment of the Senate Committee on Foreign Relations, 95th cong., 2d Sess. (1978); Hearings before the House Committee on International Relations, 95th Cong., 2d Sess. (1978).
On July 12, 1978 the House defeated a motion to overturn the President's decision by a vote of 227-181.
124 Cong. Rec. H.6530.
No Senate vote was taken on the issue.
At the heart of the circumstances leading to the prior NRC decision lay the unique character of the Indian-U.S. Agreement for Cooperation 8/ and the special interpretation India has put on it.
Successive Indian governments have consistently tied that country's obligations under the Agreement to the continuing provision of U.S.
fuel.
The concerns we expressed last year on this point 9/ have deepened, since the situation today does not appear to have altered.
After September, 1979, U.S.
nuclear trade with a country not party to the Nonproliferation Treaty (as India is not) will be conditioned on that country's acceptance of inter-national safeguards on all of its peaceful nuclear facilities
(" full-scape safeguards"). 10/
In the case of India, this provision of the Act, which threatens a cut-off of U.S.
fuel for India, poses special difficulties even before the end of the 18 month " grace period" for acceptance of full-scope safeguards.
These obligations, which are critical for
~8/
The Agreement provides for the exclusive use of U.3.
fuel in the Tarapur reactors and, in a reciprocal provision, a U.S. guarantee to supply the necessary fuel.
Article II A.
9/
CLI-78-8, 7 NRC 436 (1978), at 437.
~-10/
Section 128 of the Atomic Energy Act, 42 U.S.C.
- 2157, requires that non-nuclear weapons states accept inter-national safeguards on all their peaceful nuclear activities as a condition of continued U.S.
nuclear export.
. export approval, include the application of international safeguards to the exports, 11/ an implied understanding not to use any of the exported fuel materials (or reactors) for nuclear explosive purposes, 12/ and a requiremen' o obtain U.S.
approval for any retransfer or reprocessing of U.S.-
4 supplied fuel. 13/
India has resolutely opposed full-scope international safeguards over Indian nuclear facilities.
If India fails to accept such full-scope safeguards by the end of the statutory grace period, and if that period is not extended by the President (an action the Department of State has termed " highly unlikely" 14/), a cutoff of fuel shipments will follow.
We are faced with the distinct possibility that Indf.a will interpret this result as freeing it of any 11/
Trilateral Agreement signed by the United States, India and the I.A.E.A. on January 27, 1971.
12/
U.S.-Indian Agreement for Cooperation, Article VII.
-~13/
U.S.-Indian Agreement for Cooperation, Article VII A (2), Article II F, Article II E.
14/
Testimony of Joseph S.
Nye, Deputy to the Under Secretary for Security Assistance, Science and Technology, U.S.
Department of State, before the Subcommittee on Arms Control, Oceans and International Environment of the Senate Committee on Foreign Relations, 95th Congress, 2d Sess. (May 24, 1978), at 352.
, reciprocal obligations under the U.S.-India Agreement. 15/
In that event the protection now afforded all U.S. nuclear exports to India under tne Agreement may well cease to exist.
Had the Indian Government provided assurances that whatever the fate of the Agreement the necessary protections will continue to apply to current and past U.S.
nuclear exports, the grace period would not have been disturbed by ur.zesolved questions and diragreement vithin the NRC.
But no such assurances have been received.
The details of the special problems that attend the Indian Agreement and the arguments against NRC approval are presented at some length in our separate views on the 15/
The Indian interpretation is at odds with a plain reading of the fuel supply contract implementing the Agreement for Cooperation.
The contract provides that India shall comply with the laws of the United States and with any changes in the law or policies of the United States with respect to ownership and supply of special nuclear material.
Contract of Sale, May 17, 1966.
Article XI.
A 1971 amendment to the sales contract provides that the " purchaser shall procure all necessary permits or licenses...and comply with all applicable laws, regulations ar.d ordinances of the United States...."
Should India fail to comply with the requirements of Section 128 of the Atomic Energy Act, India would not be in compliance with applicable law and the United States would be relieved of its obligation to supply fuel until India complied.
8 f
9 previous Indian license application 16/ and there is no need to repeat them here.
Since that time the situation has not changed for the better.
The grace period is shrinking rapidly.
We are now some six months away from the time this agency can no longer approve applications for nuclear exports for Tarapur failing India's acceptance of international safeguards on all its nuclear facilities.
We are less than a year away f: om the time, given these same circumstances, when all shipments to Tarapur will have to cease.
This is relevant to the present application:
Congress did not intend the NRC to turn a blind eye to the serious possibility that in less than a year the accumulated pile-up of U.S.
fuel shipped to India cver the years will be placed forever beyond the U.S.
controls required by the statute.
It is not just this but also all preceding shipments of fuel which are at risk.
The fact that assurances covering the eventual f ate of U.S.
supplied fuel apparently cannot be obtained during the grace period means that the Commission faces a_ choice:
It can approve the export before it by stepping outside the boundary drawn by the Congress for uniform and consistent application of the criteria and into territory which has been explicitly 16/
CLI-78-8, 7 NRC 436 (1978), at 437.
reserved for the President.
Or it can acknowledge the plain fact that the criteria are not met and refer the matter to the President's broader discretion.
DISSENTING OPINION OF COMMISSIONER BRADFORD For reasons adequately set forth in the majority opinions-1/
favoring an NRC finding that the statutory criteria are met, the funda-mental issue is a difference of opinion as to how to cope with the generally conceded uncertainty that the assurances necessary to satisfy the requirements of the law will be in force in the near future.
In assessing this uncertainty, the plurality opinion conspicuously states no particular level of assurance that the criteria will continue to be met.
Commissioner Ahearne states the' "significant uncertainty" exists on this point but then finds that Congress intended the NRC to run such a risk.
I share his premise, but not his conclusion.
The reasons for my differences with Commission majority involve an analysis of the level of risk ar.d of the legislative history.
I.
THE LEVEL OF RISK 2/
For reasons stated in our last Tarapur opinion'~ and restated in the piarality opinion in this case, the law will shortly require a cutoff in U.S. fuel supply to India unless the President waives its application or circumstances change. That is certain.
The Indian position is that when the cutoff occurs, India is net bound to the assurances that it has given regarding this fuel.
Consequently, the assurances vital to satisfying the crit.!ria may not be considered binding by India as early as six months fr om now. What are the events that the majority hopes will
-1/
Separate opinion of Commissioners Hendrie and Kennedy, hereafter referred to as the plurality opinion.
Separate..pinica of Commissioner Ahearne, hereafter the Ahearne opinion.
The phrase " majority opinions" refers to both opinions together.
2/
, change these circumstances significantly?
1)
India could agree to accept full scope safeguards in the next few months.-3/
The chances of this are slim indeed.
India has refused to do so for years, and its present preconditions are that "at least the U.S., the U.K., and the U.S.S.R. agree to a complete nuclear test ban, agree not to add further to their nuclear arsenals, and come to an agreement to have gradual reduction cf nuclear stockpiles, with a view to the eventual destruction of such stockpiles."-4/ The plurality opinion's assertion of "some progress" in this area would benefit from a specific example.
2)
The President could decide h waive the full scope saieguards requirement with respect to, India.-5/
o To give this speculation validity, the majority opinions must assume that the Executive Branch didn't really mean it when it told the Congress that even one such waiver was
" highly unlikely." The majority speculation that this is a negotiating position is, of course, possible, but the NRC has understandably never been so advised.
Therefore, the majority is substituting NRC conjecture for a calculation that the President, were he the one approving this export, could make with more precision.
3/
Plurality opinion at p.14; Ahearne opinion at p.16.
-4/
Memorandum, Department of State to James R. Shea, Nuclear Regula-tory Commission, "XSNM-1060 License Application Analysis," March 30, 1978.
5,/
Plurality opinion, at p.14; Aharne opinion at p.16.
As the majority knows perfectly well, this speculation is more audacious than their opinions acknowledge.
3)
India might voluntarily forego removing safeguards, resuming explosions, and reprocessing the fuel.~6/ Even if this happened, the criteria cannot possibly be satisfied by the hope of voluntary compliance once India regards the assurances as no longer binding.
The export could not be made on such a basis in the first place, and it is no better to hope that voluntary conduct on a day-to-day basis will replace adherence to the assurances if all else fails.
4)
It is possible that the difficult technical and economic problems with (the return of the spent fuel) could be satisfactorily D
resolved.
Firm arrangements for return of the spent fuel would satisfy the fourth and fifth criteria.
To satisfy the first criterion, they would have to be accompanied by assurances on continued safeguarding of the fuel and of the reactor.
To satisfy the second would also require a "no explosives" assurance as to plutonium produced from non-U.S. fuel W
in the reactor, which India has thus far explicitly refused to provide.
Such a return would have to be on Indian terms in the absence of enforceable U.S. rights over the spent fuel.
This would mean 6/
Plurality opinion, at p.15; Ahearne opinion at p.10 and p.16.
y Plurality opinion, at p. 15.
8/
The plurality opinion (at p. 8) as to the requirements of criterion 2 on this point is in error.
The assurances must include plutonium produced from foreign fuel used in U.S.-supplied reactors.
Furthermore, the plurality opinion on this point relies on the U.S.-Indian Agreement for Cooperation which India has already clearly stated would not in its opinion prevent a " peaceful" explosion, together with Prime Minister Desai's statements that are acknowledged elsewhere in the opinion (p. 7) to be " ambiguous." This leads to a further error at p.14 for it is possible for India's position ;o be that it may use plutonium produced from foreign fuel used ir, the U.S.-
supplied reactors.
This position would lead to a violation of the NNPA without what India would consider a violation of its no-explosises assurancos to the U.S.
. repurchase, which contravenes present U.S. spent fuel policy.
5)
India may or may not provide additional assurances which would satisfy the_ criteria.-9/ Nothing that we have received from the State Department suggests that such assurances are in prospect, and the analysis provided by the Director of the Office of International Programs does not indicate that they are in prospect.-~10/
Such assurances would contradict India's presently stated position that it may act as it chooses if the U.S. terminates fuel supply.
Furthermore, the NNPA would require these assurances to cover not just the fuel, but also the reactor in the event that i;on-U.S. fuel were used at Tarapur.
In short, the necessary assurances depend on the fuel supply which will be terminated in the near future in the absence of events shown to be clearly unlikely on the basis of any reasonable reading of the evidence before the Commission.
The remaining question is whether the Congress was so determined that exporte should not be referred to the President during the per lod prior to the effective date of the full scope safeguards requirement that it intended for the NRC to take sub-stantial risks and to speculate freely about the course and conduct of 9/
Ahearne opinion, p. 16.
10/ SECY-78-596A.
It should be noted in this context that the plurality opinion claim (at pp. 3-4) of a " staff view" supporting NRC issuance is a considerable overstatement. Three members of the staff worked closely on the recommendations concerning this license. One, the Director of the Office of International Programs, felt tnat the criteria were met.
The other two disagreed and filed separate views.
No other staff office took a position on this question.
. 11/
foreign affairs. -
II.
LEGISLATIVE HISTORY Apparently feeling that no chain will be perceived to be weaker than its strongest link, the majority opinions dwell at some length on the proposition that Congress believed exports to India would continue during the 18-month grace period. This point is not in dispute, but to concede it is not to concede that Congress intended the Commission to strain common sense in reading the criteria, in assessing the risks, or in allowing an export to which significant risk levels wire attached.
As has been stated earlier, the NNPA does not provide for Commission denial of exports.
The majority analysis of the legislative history is undernined by repeated misstating of this fundamental fact, a misstating which is explicit on page 22 of the plurality opinion and on page 31 of the Ahearne opinion and which is implicit in the oft repeated statements that Congress intended no termination of exports and did intend a " grace l_lf The argument here is not over whether the Commission must require absolute certainty as to the criteria.
As Commissioner Ahearne correctly points out (p. 28), that has never been the standard.
Where questions exist as to safeguards adequacy and tne wording of particular assurances, the Commission has often authorized exports.
As Commissioner Ahearne further points (Ahearne opinion, note 39, at p.19), Senator Glenn at one point stated that "The essence of the export licensing process is a judgmental assessment of tne appropriate policy of the United States in the arr.a of nuclear exports." However, given the structure of the law and the fact that Senator Glenn was speaking in the context of Congressional review of a Presidential decision, it seems more plausible to assume that the export licensing process he is referring to is the full process including Presidential approval and Congressional reassessment.
. period."-12/ No one is talking about termination or denial of exports by the NRC here, nor, as we have made clear since last April, is such a course being urged on the President.-13/The issue posed by the statute is just what level of uncertainty requires referral to the President, for whether the export is ultimately sent or withheld is up to him.
To assert that the Congress intended the NRC to accept substantial uncertainty that the assurances essential to the law would be in place in less than one year defies physics, logic, and history.
It defies physics because there will be no plutonium to raprocess or to make an explosive from until well after the cutoff date, so the assurances must be read with confidence some distance into the future to give real meaning to the second and fifth criteria.
It defies logic and history because the Congress enacted the NNPA out of a desire to bring firmer and more uniform criteria to the governing of peaceful nuclear trade in the wake of the 1974 Indian explosion.
In assigning orderly licensing responsibilities, the Congress presumably understood the NRC was an agency not given to risk taking or licensing based on speculation.
That is why exports involving a significant measure of H/ The plurality opinion in this case, at pages 16 and 22. is altogether too casual in lumping the House and Senate Reports together on this point.
The House opinion says no more than that "In most cases the committee anticipates that application of the criteria will provide a basis for continued exports." To suggest that such language compels continued NRC licensing in all cases is to give the sen-tence the opposite of its clear meaning that some cases might not result in continued exports.
M/ 7 NRC at 445.
. uncertainty are reserved by the law to the President, subject to Congressional review.
Once the statement that Congress expected exports to India to continue is placed against the fact that Congress did not expect un-certainty to be taken lightly in administering the specific criteria, it becomes important to realize that nowhere in the extensive legislative history is there any indication that Congress considered or was advised of the unique interplay between the Indian Agreement for Cooperation and the criteria.
Consequently, it is not at all clear that when Congressional expectations as to firm administration of the criteria collided with expectations about NRC licensing, Congress would have wanted the NRC to accept uncertainties regarding the necessary assurances so large as to risk trivializing the law in the eyes of those judaing the U.S.'s seriousnoss of purpose.-14/
However, whatever one makes of the pre-enactment legislative history, the post-enactment history shows indisputably that Congress did not object to having exports to India go to the President for approval during the " grace period."
The plurality opinion's statement "that such ex post facto 'legis-lative history' has been viewed with considerable skepticism by the 14]
Indeed, there is no basis for assigning a higher value to the full scope safeguards objective than to the Phase 1 criteria.
The acceptance of full scope safeguards is obviously desirable, but has not been regarded as more important than no-explosive assurances, reprocessing controls, or restrictions on the transfer of sensitive technologies. Thus, the U.S.'s Executive Branch and Congressional priorities have been the reverse of what the majority achieves here, namely a lowered level of assurance as to the immediately effective criteria in order to achieve the one that has been deferred.
. courts, and that little weight generally has been accorded such utterances"-15/
is beside the point. That principle has been developed in response to a multitude of situations such as Congressmen defending
'/otes in election campaigns, Congressmen under fire at press conferences, and Congressmen urging subsequent agency action.
None of those apply here.
Indeed, there is a clear distinction between those situations and this case which shows conclusively that a Congress now fully aware of the problems arising from the application of the statutory export criteria to the Indian situation does not expect routine NRC approval.
In this case, the post-enactment statements took place in a unique context that greatly increase their legal significance.
Congress rarely sits in a quasi-judicial fashion to review the administration of its own statutes, never mind such an event within three months of the statute's enactment.
Yet this is precisely what occurred after the NRC's last Tarapur review.
Such a quasi-judicial review provides a unique opportunity for Congress to correct mistaken administration.
However, the NRC's administration of the law, far from being rebuked, was very strongly endorsed in the House and not seriously questioned in the Senate.
The House endorsement emerges clearly from the vote not to override the President's decision to send the export.
The resolution to override was defeated (181-227).
The 181 member minority (44%) who voted not to send the export at all cannot possibly be said to have felt that the 15] Plurality opinion at p.14.
_9 matter was improperly before them through a failure by the NRC to understand that shipments were to continue routinely for 18 months.
Indeed, the four House International Relations Committee members who favored the resolution of disapproval found the opinion that the criteria were unmet " compelling" in its rationale and " based on sound judgement" 16/
in its findings.-
The majority of the House International Relations Committee found, after hearings at which all Commissioners testified and the State De-partment reiterated its position, that "The Nuclear Non-Proliferation Act of 1978 clearly anticipated that there might be cases, such as this one, where a nation was not in compliance with nuclear export criteria to be applied h the NRC....
The full consideration of the issues surrounding the Tarapur export by all concerned has been entirely n accord with the procedures established by the recent Act.
For example, the Committee believes that members or :ne Nuclear Regulation Commission acted responsibly in their efforts to apply the Act's export criteria."-17/
(emphasis added)
No clearer opportunity for a statement that the NRC was frustrating Longressional intent, thwarting a grace period, or seeking unduly high assurances can be imageined.
Instead, the House Committee majority said of the exports to India that would follow XSNM-1060:
16/
H. Rep. 95-1314, June 21,1978 at 14.
17/
Id. at 10 and 11.
a "The Committee wishes to make clear that additional license appli-cations for fuel to be shipped to India prior to the 18-month grace period are pending or expected.
Those applications wil', be subject to the same review process based upon the same concerns."T8/
Temphasisadded)
In several cases, the NRC has had considerable success in per-suading courts to infer Congressional acquiescence from a general 19/
failure of Congress to legislate away previous Commission action.--
Yet here, when Congress emphatically passed up a specific opportunity to correct or rebuke a highly controversial Commission action that was squarely before it, this line of reasoning goes completely unmentioned by the Commission it has served so well, and the Congress' several strong indications that the Act has not been misapplied are ignored or lumped into a casually dismissed category of " Post-Enactmert Statements."
As we have said before, we would find that the criteria for NRC approval are not met and would refer this application to the President, to be considered in the same manner as XSNM-1060.
Properly explained and understood, such an action would have had no adverse effect on 18/
Id. at 10.
19/ For example, NRDC v. NRC, 582 F.2d 166 (2d Cir.1978).
~
_11 _
continuing negotiations.-20/It is within the President's broader mandate and expertise that such consideration as the continued goodwill of the parties and of the past, present, and future governments of India should be considered.
-20/ One must acknowledge that a further delay of 60 legislative days from today while Congress considered a Presidentially-approved export (Section 126(b)(2) AEA) would not be helpful.
However, if the decision had been to refer tha application to the President on the grounds urged above, that action could have taken place some time ago and the public proceeding on safeguards adequacy could have gone on simultaneously witn Congressional review.