ML20126K317
| ML20126K317 | |
| Person / Time | |
|---|---|
| Issue date: | 01/26/1979 |
| From: | James Shea NRC OFFICE OF INTERNATIONAL PROGRAMS (OIP) |
| To: | |
| Shared Package | |
| ML20126K250 | List:
|
| References | |
| FOIA-80-336 SECY-78-596A, NUDOCS 8105120535 | |
| Download: ML20126K317 (13) | |
Text
-
-l Janua r,v 26,'1979 SECY-78-596A
\\
. ' ~
COMMJSSTONER ACTION ~
4
~
f0I.*
1 The Comissione~ rs from:
Jamas R. Shea, Director
!=
~
.I.hru_*
Office of International Programs Executive Director for OperationsN ' #
Subject:
TO INDIA (APPLICATION XSN s
CHED hRANIUM Purcos e:
(U)
(U), To prov application. ide the staff's recomendations on this Discussion:
(U)
SECY-78-595 forwarded an initial
~
of the principal issues involvec in ih staff analysis Energy Actconsideration of this application u d
. e Comission's Proliferatio(n Ac:the Act), as amended b n er the Atomic (NNPA deferred makino its reco)=c' 1978. y the Nuclear Non-The staff has in order to ashss further thenendation until this in this case',and to take into account ad analyses complex issues involved the Exscu,tive Bra'hch, the reco drecent briefings and to the previous Indian LEU expo tof proceedinons by r
written coments submitted in the p(roceedings r
by the'Comission on December 8 XSNM-1060, and the
, 1978.
ordered r
NOTE:
'of.the \\,'iews in this pExcept where specifical a ed otherwise, all.
aper are those of the NRC staff act:
. Shea, IP (492-7886)
Oplinger Peterson,, IP (492-8155)IP (492-7866)
~
2 r numan g':':::=:n.c ey SECY-78-595 f
- ch* ure s:dject to
- ="r y#g Or!"~.!r. ! sznec' ns.
er 75 1-26-85 on
.k
..'. w n.
in..
P...-T. n..
f310512 0535
...r,0 Cia,tifier -
-N d
e... =I
A..
T 2
Discussion:
(U) General _
(continued)
IP has identified four fundamental issues which remain to be resolved in connection with the Comission's decision on the pending application.
These are:
K e
1.
Whether fiRC's assessment of whether the lifiPA's
~
Section 127 criteria are met should take into consideration the future application of these criteria; 2.
Whether the Section 127 criteria are met; 3.
Whether the scope of the Comission's "comon defense and security" findinc as required by Section 57 of the Act can properly encompass the broac policy issues considered by the Executive Branch in formulating its judgments, or, alternatively, whether the Comission's scope is limited to those factors which have t
a direct bearing on the Comission's findings that the Section 127 criteria are met; 4.
Whether the proposed export is inimical to the comon defense and security.
(U)1.
Prospective Apolication of Section 127 Criterid There is no clear legislative direction nor established C' omission policy on this issue.
It can be argued on the one hand that the prospective application of the criteria is not a proper subject for Comission consideration in connection with its assessment as to'whether the Section 127 criteria are met ( and can be considered as a relevant factor only under the Comission's coman defense and security finding pursuant to Section 57 f
of the Act).
This view is supported by the fact that none of our current agreements for cooperation provide for explicit assurances that they would apply indefinitely in the future and the provisions of Section 404 of the tifiPA in which enduring comitments would b'e an objective of new and re-negotiated agreements for cooperation rather than a requirement of the imediately applicable criteria.
.-. _ _m. - _.., _ _...., _,_, - _ _. _
~
.~.
- 3 l
N Discussion:
(U)0n the other hand, various considerations (continued)
(detailed in SECY-78-596) argue for concluding that the filiPA criteria could be largely vitiated if only the current applicability of the criteria is considered (especially with respect to criteria 2 and 5).
Furthermore, Section 126(a)(2) of the E=
AEA provides for Commission findings on whether N5 the criteria are met to be based on a " reasonable judgment of the assurances provided and other 2E..
information available" (emphasis suppiea).
2.
Section 127 Criteria Detemination
( U)'
If the Section 127 criteria are applied currently only, there is little doubt that the proposed export meets all of the criteria.
If they are applied crosoectively, considerable uncertainties are _raisec regarding the duration of the assurances that the criteria will continue to be met.
The following discussion assumes prospective appli-cation of the criteria.
(U)
With respect to Criteria 1 (safeguards),
Criteria 4 (retransfers), and 5 (reprocessing),
the relevant Indian assurances are contained in the.
US-Indian Agreement for Cooperation signed on i.;
August 8,1963.
These assurances were discussed in detail in SECY-78-595.
Their principal weakness is that 4Re continued viability of the Agreement itself is contingent on continued U.S. supply of enriched u'ranium for the Tarapur Atomic Power Station ( fAPS).
Unless an exception by the President is granted, the United States will be
=-
able to maintain that supply after March 10, 1980 only if India accepts full-scope safeguards as F
required by Section 128 of the Act.
While the U.S.
continues to seek actively to obtain Indian agreement
~
to full-s_ cope safeguards and it is encouraging that the Indians have agreed to participate in an inter-F national group examining full-scope safeguards issues, serious doubts still remain as to whether India will accept full-scope safecuards in the forseeab,le future.
Should the United 3tates as a consequence find it necessary to terminate fuel supply, Indian p:
assurances under the Agreement may lapse.
=
( U,'
To recognize this is not to require that India agree now to accept full-scope safeguards as a condition of U.S. supply during the " grace period" before
"= =
4 Discussicn:
Section 128 becomes effective.
This clearly F
(continued) would be contrary to the intent of the fiNPA.
During the' interim negotiating period before full-scope safeguards are required, India could comply with section 127 requirements by providing
!=
the U.S. with explicit suppleme.ntary assurances that those provisions of the Agreement relative to Criteria 1, 4, and 5 are not contingent upon continued U.S. supply.
(U)
In the absence of such assurances, it appears likely that India would no longer consider itself bound by the Agreement if U.S. supply is cut.off.
It does not, however, automatically follow that India would then take actions proscribed by the criteria.
With respect to Criterion 1, it is probable that India will maintain IAEA safeguards on the TAPS reactors even assuming a U.S. cut-off, despite Article VI of the Agreement, in which India has emphasized, "in contrast to the position of the United St.ates," that its safeguards obligations with respect to equipment and devices "in any case ensue from the safeguards on fuel."
In similar circum-stances folldwing the termination of Canadian nuclear cooperation, India elected to maintain safeguards on the Rajasthan reactors.
Moreover, it is unlikely that 9.
India will be able to fuel the TAPS reactors without outside assistance in the near term, and any existing alternative fuel supplier would, under the t!uclear Supplier Guidelines, require that IAEA safeguards be 'mainta'ined.
(U)
The continued safeguarding of U.S. supplied fuel is not nearly as certain, however, in view of U.S.
unwillingness to make the required safeguardability determination on India's Prefere reprocessing plant, which was built primarily to reprocess Tarapur spent fuel.
If U.S. fuel is cut off, India may feel free to reprocess spent fuel at the unsafeguarded Prefere facility (and tnus also violate criterion S).
This view is supported by Prime Minister Desai's statement in March 1978 (see p.11 of SECY-78-596) indicating
. - +,,
. - + -
--.:,v----
-r 4
s-
- - --~ ---.-
ae-
+, - +
l
\\
l
\\
i Discussion:
his view that "If they say no, once I hear that, o
(continued) then all ways are open to us, even the processing i
I of the used thing."
Return of U.S. spent fuel would eliminate this concern regarding criteria 9
1 and S, (U)
On the other hand, the decision to reprocess without U.S. approval could be viewed as a final " worst case" option and not likely to occur if other more acceptable options are available.
For instance, In'ian ultimatum to reprocess could force a resolu-d tion of the return of spent fuel issue.
- Finally, if further progress is made in expanding Tarapur's spent fuel storage capacity, India could also unilaterally defer any reprocessing plans.
Any of these alternative courses of action would not violate criteria 1 and 5.
(U)
With respect to Criterion 2, (no explosive use) the basic Indian assurance is contained in the Septem-ber 17,1974 letter from Dr. Homi Sethna to Dr: Ray, which sa'is in part:
(U)
"The G6vernment of' India would like to reassure the Government of the United States of America F'
that the special nuclear material that has been or is hereafter 'made available for, or used, or produced in the Tarapur Atomic Power Station l
I located at Tarapur will be devoted exclusively to the needs of that Station unless our two Governments hereafter specifically' agree that such material be used for other purposes."
l e
o e
e e
l I
l 1
l l
- ==
g 6
Discussioni (U)
It is far from certain that India would share (continued) this interpretation if U.S. supply were to break
==e down.
The September 17 letter was part of an 97 exchange of correspondence which began with Dr. Ray's a,.
letter of June 19, 1974 to Dr. Sethna, discussing
=
the terms which the U.S. understood would govern the l==
first shipment of U.S. fuel to TAPS following the
- =
Indian nuclear explosion of May,1974.
The June lg letter stated the U.S. understanding that the use for nuclear explosives of "any material or equipment subject to U.S. Aareements for Coooeration... is l
precluoed" (emanasis supplied).
Sethna responded I
on July 10, 1974, rejecting the U.S. interpretation, and elaboratinc on the Indian understanding of the obligations of both parties with resoe:: to material which "the U.S. Atcmic Enerov Commissior. has contracted to sell to tne Government of India" (emonasis,suppliedJ under Article )) of tne Agreement for Cooperation.
Sethne s reply alsc drew attention to the U.S'. righi~
T-
~
under the Agreement to repurchase nuclear material produced at Tarapur.
On September 16,1974. Dr. Ray again wrote to Sethna "concernine shioments of enriched-uranium fuel and other material to Taraour" (empnasis supplieo), suggesting simply a written assurance that "the special nuclear material that has been, or is hereafter made available:for, or used or produced in, the Tarapur Atomic Power Station will be devoted exclu-c.c.c sively to the needs of that station unless the two
~~
Governments hereafter specifically agree that such
~
material be'used for other purposes."
As noted above, Er the Indians then accepted this.
VEc (U)
In light of this history, there is rogm 'for zu doubt that India would accept the interpretation that A
Dr. Sethna's September 17 letter was intended to cover non-US fuel,or special nuclear material produced therefrom.
Particularly in circumstances where U.S.
fuel supply had terminated, it is at least equally
"~
possible that India would take the position that the entire Sethna/ Ray exchange was a discussion of con-ditions governing the use of fuel supplied by the U.S.
- +-
under the U.S./Indi,an Agreement for Cooperation, and
=--
in no way extended to materials supplied by another
.T supplier should the United States fail to meet its
,T Article II obligations.
Here again, the question could be clearly resolved through a supplementary understanding.
(It should be noted that the attached OELD analysis points out that the final assurance from the Indians in the Sethna/ Ray exchange was stated in terms applicable to fuel from any source.)
7 Discussion:
(U)
In this connection, we note that Prime Minister (continued)
Desai publicly stated in April 1978 in Parliament' that should the U.S. breach the Agreement, "we will then be free to do whatever we like to do."
On at least two subsequent occasions, Prime Minister Desai has made public statements indicating that the use of
._=~"
nuclear energy for mining might be considered, and u.;..
that in certain circumstances (such as if nuclear 5
devices of a solely peaceful character could be developed), a nuclear explosion '"is never debarred."
(U)
It is possible that these Desai statements represent nothing more than the efforts of a hard-pressec po:iti:a1 leader to contain his oppostion, and/or tha: Desai consciously set conditions for the use of nucisar explosives which he knew would be virtually imoossible to meet.
But statements of this kind canno-be lightly dismissed, and U.S. law does not leave room even for conceivably benign explo-sions:
Criterion 2 recuires a finding that no U.S.
~
nuclear exports "will be used for any nuclear explo-sive device or for research on or development of any nuclear exclosive device."
Balancing the above-referenced Desai statemen s, on the other hand, are several of his ear".ier statements that India had no intentions' to develop nuclea explosives.
In addition, there is no current eviden:e of Incian plans to develop and test further nutlear explosive devices.
Also, even if India had no intentions to develop nuclear explosives, it is not clear that there would be a significant is incentive to utilize the high burn-up plutonium available 8:
from Tarapur because of Indian access to bet'cer quality plutonium from indigenous sources and facilities (unless l
a sizable nuclear explosive program were planned)..
["
With respect to criterion 4, it is clear that Indian E
l compliance with this criterion and criteria 1 and 5
!?.
is equally dependent on the continuance in force of
.Une Acreement.
In contrast to criteria 1 and 5 F
however, there are no explicit indications that India F
.. might_ choose to violate criterion 4 an.d retransfer D
[
U.S. supplied material without U.S. approval.
ik.
=
3.
Scooe of the Commission's Common Defense and Security Findino (U) This issue has 2n addressed to some extent by indi-
[
vidual Commissioners in connection with the review of previous Tarapur fuel exports, but the Commission itself has made nc formal decision concerning the matter.
If j
the Commission concludes that the section 127 criteria L
,,--me
...w.-,---,-,..~.--an-e-,r#v.
_,,,,,,,,,,.,-,,,,,,,-.,,,ym.,w.,..m.,.r--,.w,wa,ww.v
- y.v w
--,,,,3w,--,,,,,-.r..-,_-.,.,-,,---,.c,,-w,v w
Z..
'8 F
=g L..
d security are met, the subsequent common defense an finding will rest heavily on the Comnission's con-sidera-Es:
=...
clusions regarding the proper scope of the con scussion:
d security E5I ontinued).
tions which affect'the common defense anSection EEi:
- finds, Commission may not issue a license u 39 finding.
s Mil
=
provided and other information avai a the Government, including the Commission hi tutory reouire-equivalent, and any other aoolicable sta
~
The "otner (emphasis supplied).
h Tarapur case applicable statutory reouirements" in t ea ments, are met" t be pur-d (2) that suant to an agreement for cooperation anno be fo able defense and security 3r constituting an unreason the expor:
U.S. public.
risk to the health and safety of the l
ly These lat:er requirements are, therefore, c ear insof ar as separated from the Section 127 criteria i
re concerned.
the Commission's review responsibilit es a NNPA Furthermore, the legislative history o d d the liferation-Commission to consider all relevant nonpro d t licensing related issues in making its indepen en determinations.
Inimicality Findine tively and M
If the section 127 criteria are applied pro' spec 4.
il the license 51 the Commission still finds them to be met, ds.
- However,
~
(U) could still be denied on inimicality groun d
e such a denial would presumably be based on a v E
i i n's factors other then those affecting the Corm ss o With respect detenninations on the section 127 cr eadily g.
apparent.
not On the other hand, if the section 127 criteria are
~~~
finds they applied prospectively and the Commission inimicality (U) i the continued f~
are met, the license could be denied on grounds which are based on factors affect ng 7"
i These adverse application of the~section 127 criter a.
licy u_.
factors could be balanced, however, by broade f
se and security s
considerations related to the common de license.
which may favor issuance of an export
...a
9 Discussion:
5.
Broader Policy Considerations
~
(continued)
(U)
The staff has been conscious, in considering the difficult issues posed by this application, of the importance which the Executive Branch attaches to continuing U.S. fuel supply to India at least during the " grace period" before the full-scope safeguards f
requirement of the Act comes into effect.
We do not dispute the view of the Executive Branch that current negotiations to achieve the important goal of full-scope safeguards should be given every chance to succeed, and that issuance of the Tarapur export license could increase these chances.
Nevertheless,fiRC must still make its own,iudgment regarding whether the criteria of Section 127 are met.
(U)
If the Comission cannot make a finding that the Section 127 criteria are met, the Act still provides a mechanism for consideration of these broader policy issues through referral of the application to the President as was done with respect to the previous Tarapur fuel export (XSNM-1050).
6.
Section 128 has now'di.se the date when Section l'2B takes (U)
Becau l
awn closer than during the Commission's consideration of XSNM-1050, the staff has also examined th~e question of India's need for the material covered by XSNM-1222 in the light of Section 128 of the Act.
OPE's memorandum of January 16,1979 to the Commissioners provides a detailed analysis of the current fuel requirements for the Tarapur reactors.
This analysis sho~ s that, if recent fuel usage rates w
continue. TAPS I could continue operation until February 1982, and TAPS II until August 1981, with-out the additional material covered by this application.
Approval of XSNM-1222 at the present time would meet I
reactor requirements which will not arise until.17-23 months after the full-scope safeguards requireme'nt of Section 128 of the..Act becomes effective.
- Ever, assuming higher use rates, approval would provide India with fuel not required for reactor operations until S-23 months after the full-scope cut-off cate.
l
.=
u.
10 Discussion:-
(U)
Thus, the effect of approval would be to provide a (continued) stockpile of material which will pennit India to e
avoid the full-scope requirement for en additional y
period of 15 months without affecting current reactor -
E operations.
In this respect,.the case is similar to i
=:
XSliM-844.(see SECY 76-416B). involving advance ship-E' ments of reload fuel to Spain for stockpiling and use
~
well after Section 128 becomes effective.
What distinguishes the two applications, in this respect, is that Spain has no operational requirement for
~ advance shipment, whereas the Ta.apur fuel must be fabricated in India.
To be specific, operation of TAPS could be affected (assuming a high use rate of 70 subassemblies per refueling) if the license is not approved in the to permit shipment from the U.S.
by November, 1979.
We note that referral of the case.
to the President, the course followed in XSNM-1050, t
is not likely to delay, shipment beyond that time...
~
(U)
The application of Section 128 thus may involve cont.iderations of the rate of fuel use.
Recent experience indicates that the lower rate of 56 sub-i assemblies per refueling is likely to be sufficient, which would mean that the material covered by XSNM-1222 would provide a stockpile not needed before March 10, 1980 for reactor.t operation, and which would reduce Indian incentives"to accept full-scope safeguards.
~
.e..
(U)
The amo0nt of stockpiling involved would not be large, however, would be consistent with past
.7~
U.S. supply practices for TAPS, and there is still
?.:.;
uncertainty about use rates.
-i :..
7.
Developments Since XSNM-1060 tE C...
l (U)S Since the current proposed excort is in many respects
.k similar to the material expor:ed pursuant to export license F application X5NM-106] (which was approved by the President after the Commission failed to approve issuance of.,an export license), it may be helpful to highlight the significant developments which have occurred since P
XSNM-1060 was considered by the Conrnission in April,1978.
(U) Of major interest in this regard are the recent state-cents by the Indian Prime Minister concefning India's policy on peaceful nuclear explosives as discussed elsewhere in this paper and in SECY-78-596.
A more recent I
development is the agreement between India and the U.S.
l in late 1978 to establish an international conmittee
,,----,,.~i,,,,,r.y,-,,--r.m
, e - '
e e-
+we'v*-ee-e-t-*-ev--a---m-=-'**s---r-7r-*n-dwmvw+'-==mw-=-=wv
=*e--e-=r-a-vme-e--www em---+=--f---i-a*v-
- mve g
- e
-e e dw'*-==ye-'99e*e*+*v
-t==---
_ ~._
Eh 52.:.
=.:
=--
sg=
ps hr
- h.......
Discussion:
to study I AEA safeguards implemer>tation matters.
This I..li; El 1
(continued) development could significantly facilitate India's agreement to adopt full-scope safeguards, although it J;;;;
is too early to fonn any firm judgments on this point.
E; l.....
Si a::
G
^
(U) Finally, the passage of time since XSNM-1060 is in itself an important development insofar as it relates to the impending March 10, 1980 deadline for full-scope safeguards.
Tne fuel covered by XSNM-1050 was clearly needec in India before March 10, 1980.
This need has no been clearly established with respect to
~
XSNM-1222.
HMSS Tecnnical Review (U) NMSS has no; received any information regardi'ng the State System of Accounting and Control in India.
Accordingly, HMSS is unable to make any determination
.:=
regardine the capabilities of India's system to support the effective application of IAEA safeguards.
(U) In addit [8h, NMSS has not received any information concerning I6EA implementation activites and problems
[i.
other than that includsd in the 1976 SSIR and 1977 SIR
.::s=
documents and the letter from State to Chainnan Hendrie Ek dated December 19, 1978.
NMSS conclusions based upon E.
this information is reflected in Table V of the i=
memorandum to Connissioner Gilinsky dated November 29,1978, theadditionalanalysisprovidedforCommissionerhennedy
!.?
i-on December 21, 1978 and the memorandum to Comissioner W
Ahearne dated January 3, 1979.
The main conclusion of
!l."
the HMSS examinations is that the available information on IAEA implementation is not sufficient to penait.,NMSS to evaluate the effectiveness of IAEA safeguards in India.
G (U) With respect to physical security, NMSS has reviewed the program in India and found it adequate for the purpose
=
of this export.
j e
F 9
F G
-..,v
.r=.
w-y-w,
.,-,,.7.+
,_w.-w,--,-
,m
.,,-,,m.,..w3 e.---e-,y-m.m, y-.,.,-y,m.,me.,,p
-,y w
rr-
,#w,-e..,..s3-y,.
v,.p,-,.,,we.y,--
'c 12 r
Discussion:
Conclusions _
(continued)
~ ~ (~ )', The IP staff is in agreement that criterion 3 U
-is met and that criterion 6 is not applicable to Howev,e.r,.the IP staff is divided on the E
this case.
F=
ques. tion of.whether a. finding.cari be made that the i
. proposed exoort meets criteria 1., 2,'4 and 5.
i t
(U) The IP staff agrees that the factors entering into these determinations present persuasive arguments on both sides of the issue of whether or not the criteria are met and that the final decision is a close one.
-(U)I ome IP staff, (which may submit additional views on S
, this matter), believe that I confident deteisiRat'ibn-"
that. criteria.1, 2,._4. and 5.are met cannot be made, and therefore the application should be referred to }he President for consideration. The Director, IP, on the i
other hane, believes thE,' on balance, and takihe all '
' factors.. int'o ' account.,__there 3s. sufficient basis for con-
~
_cjuding that the criten.ia_are raet for.this._lic.edse. '~All' IP staff believe that', if th'e' criteria are determineTE be
~ met, assessment of all considerations involved leads to'a
~
conclusion._that all. additional statutory requirements' are
' met, in particular that the export is' not inimical to the comon defense and security.
Recomendation:
(U) OIP recohnIands that the Comission:
1.
Note the varying views of IP staff members on this proposed export.
I 2.
Find that the criteria of the NNPA are, on P
balance, met for 'this application and that the export will not be inimical to the comon defense and
(
j security.
l 3.
Approve issuance of this license.
l y
5 4.
Promptly forward this case to the President for decision if the Comission should be unable to make l
a finding that the statutory provisions are satisfied.
i
.k
~ -.. -
m
e
.. L a.
=
13 1
,Coordina tion:
(U)
ELD's co;rnents are attached.
(U)
NMSS views on physical. protection adequacy and the
- effectiveness of IAEA safeguards to deter and detect.
diversion in India are as stated above.
E
~
A A
u Japs R. Shae, Director Or: ice of International Programs En:1osure:
DELD Yiews' on Proposed License tc Ex: ort Low Enriched Uraniu-Ic Intia (U)
Oorissioners' comments she;* d be provided directly to the Office of the Secretary by c.o.b. Friday. February 2.1979.
Comission Staff Office comen:s, if any, should be submitted to the Concissioners NLT January T., i975, witn an information copy to the Office of the Secretary.
If the paper is cf such a nature that it
-requires additional time fer gnalytical review and comment, the
.. Concissioners and the SecretEriat should be apprised of when comments may be expected.
I DISTRIBUTION Commissioners Connission Staff Offices Exec Dir for Operations Secretariat A
h:'
e l
,,e e
e,.e.
- e. -ee.n=
v
--w-w
-www-m tv vmr r1,.re--y-,s'*-,e-e
- s e " rw r e-o w*-mevy
,vr~**,--t-w w-wv -" Tv4-W- we