ML20205E667
| ML20205E667 | |
| Person / Time | |
|---|---|
| Site: | 07002131, 07002485 |
| Issue date: | 06/28/1977 |
| From: | Chilk S NRC OFFICE OF THE SECRETARY (SECY) |
| To: | NRC OFFICE OF INTERNATIONAL PROGRAMS (OIP) |
| References | |
| NUDOCS 9904050259 | |
| Download: ML20205E667 (37) | |
Text
l UNITED STATES OF AMERICA Ng\\ P g
l NUCLEAR REGULATORY COMMISSION Il Q
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l Marcus A. Rowden, Chairman Victor Gilinsky Richard T. Kennedy p
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y In the Matter of
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License No. XSNM-845 EDLOW INTERNATIONAL COMPANY
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Docket No. 70-2131
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(Agent for the Government of India
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License No. XSNM-1060 on Application to Export Special
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Docket No. 70-2485 NuclearMaterials)
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IN 11 h "
t CBC M.c.MORANDUM AND ORDER
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I.
Background
On November 5,1975, Edlow International Company, as agent for the Government of India, filed License Application No. XSNM-845 with the Commission seeking authorization to export 463.64 kilograms of U235 contained in 18371.4 kilograms of uranium enriched to a maximum of 2.71 percent.
The special nuclear material sought would be used to fuel tne Tarapur Atomic Power Station (TAPS) located near Bombay, India.
On March 2,1976, joint petitions were filed with this Commission on behalf of three organizations (Natural Resources Defense Council, Inc; The Sierra Club; and the Union of Concerned Scientists) for leave to intervene and for a hearing on this application.M E
Petitioners also sought leave to intervene and a hearing on export application No. XSNM-805 which also involved a proposed export of
[ Footnote continued on following page]
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On May 7,1976, the Commission ruled that Petitioners lacked I
standing under Section 189(a) of the Atomic Energy Act of 1954 to inter-vene and to demand a hearing as a matter of right, but ordered that a l
legislative-type hearing be held as a matter of Commission discretion.
I In the Matter of Edlow International Company, 3 NRC 563 (1976) (herein-after, the Edlow Opinion).
Because our previous opinion sets forth in detail the background of this proceeding and Petitioners' specific l
contentions, we will not repeat that information here.
On June 11, 1976, two of the Petitioners, the Natural Resources Defense Council and the Union of Concerned Scientists, sought judicial review of the Commission's May 7 order in the United States Court of l
Appeals for the District of Columbia Circuit (Civil No. 76-1525).
In brief, Petitioners argued that they were entitled to an adjudicatory hearing as a matter of right under Section 189(a) of the Atomic Energy i
Act, 42 U.S.C. 2239(a).
The Court heard oral argument on December 8, 1976, but has not rendered its decision at this time.
Although the E
[ Footnote continued from preceding page]
l special nuclear material to the TAPS facility.
On May 20, 1976, after reaching an agreement with the Department of Justice, as attorney for the Department of State, Petitioners agreed to raise no objections to issuance of that license.
As part of the agree-l ment reached with the Petitioners, application No. XSNM-845 was l
amended, to reduce the quantity of material sought to 315.16 l
kilograms of U235 contained in 12261.0 kilograms of uranium at a maximum enrichment of 2.71 percent.
This procedural history is set forth in detail in Edlow International Company, 3 NRC 594 (1976).
On July 1, 1976, the Commission, in a divided opinion, authorized the issuance of export License No. XSNM-805.
CLI 76-10, 4 NRC 1 (1976).
3 public hearing ordered was originally scheduled for the seek of June 3, 1976, Petitioners, on May 14, 1976, filed a Motion for Extension of Time to Submit Written Comments and for Deferral of Public Hearino.
As part of the May 20 agreement.2/ tnis hearing was set for July 20.
See 9
41 Fed. Reg. 21712 (May 27, 1976).
As part of the legislative format l
established by the Commission, participants in the hearing were given 1
an opportunity to present written statements concerning 1ssues they wished to address, and to review the submissions of other participants l
prior to the oral hearings.
Provision was also made for cross-questions 1
to be posed after screening by the Commissioners, to enable participants to test the assertions of witnesses or affiants.
l In addition to submitting briefs on procedural issues, Petitioners i
submitted a 45-page statement, accompar,ied by 10 affidavits, addressing the substantive issues arising from this proceeding.
These presentations were based upon information contained in more than 3,000 pages of material concerning U.S.-Indian nuclear relations obtained by Petitioners under l
l the Freedom of Information Act from this Commission and relevant Executive Branch agencies.
The Commission proceeded with the public hearing and on July 20-21, 1976, we received oral testimony from eleven witnesses.
Mr. Myron B.
Kratzer, then Acting Assistant Secretary of State for Oceans and Inter-national Env_ironmental and Scientific Affairs, was subjected to rigorous U
See footnote 1, suora.
4 questioning by the Commission for more than five hours and was asked to respond in writing to over 100 additional questions submitted by Petitioners and reviewed by the Commission for relevance and materiality.
Other persons appearing were United States Congressman Clarence D. Long;
.o i
Dr. Michael A. Guhin, the Commission's Assistant Director for Export-Import l
l and International Safeguards; Mr. Adrian Fisher, formerly Deputy Director of the U.S. Arms Control and Disarmament Agency and a chief U.S. negotiator of the Treaty on the Non-Proliferation of fluclear Weapons (flPT); Mr. Herbert l
Scoville, Jr., formerly Assistant Director of the U.S. Arms Control and Disarmament Agency; Mr. Carl Marcy, formerly Chief Counsel to the United States Senate Committee on Foreign Relations; Dr. William W. Lowrance of I
l Harvard University; and Eldon V. C. Greenberg, who at the time of the l
hearing was Petitioners' counsel in this proceeding.
The administrative l
l record in this proceeding, in addition to the transcript of the' July hearing, consists of numerous written submissions by the Petitioners, l
the Department of State and members of the public.
This record now exceeds 2,000 pages, including more than 400 pages of classified submissions.
At the conclusion of this hearing, and after indications of interest by this Commission, the Department of State announced its intention to enter negotiations with the Indian government on one of the central issues focused on during the hearings:
whether it would be desirable i
from a non-proliferation stardpoint and possib,le -- practic, ally and diplomatically -- to reach an agreement with the Indian government that all spent nuclear fuel generated at the TAPS facility be returned to the l
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l United States.
The Department agreed to keep this Commission informed I
on the progress of those negotiations and stated its view that the
' Commission need not act on export application No. XStiM-845 at that
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I time.
On January 5, 1977, Edlow International Company filed another sequential fuel license application (XSNM-1060) seeking authorization to export 156.12 kilograms of U235 contained in 7638 kilograms of uranium enriched to a maximum of 2.154 percent for use at the Tarapur Atomic Power Station.
On February 10, 1977, Petitioners filed a motion asking the Commis-sian to conso,'date ' application No. XSNM-1060 with application No. XSNM-845.
Petitioners' aim was to insure that the procedural issues involved l
in the licensing proceeding would be preserved with respect to No.
XSNM-1060.
On June 22, 1977, the Commission, as a matter of discretion, i
and in the interest of conducting its proceedings and deliberations in the most efficient manner, consolidated the proceedings on license application Nos. XSNM-845 and XSNM-1060.
We stated part of our rationale for this procedural ruling as follows:
... procedural issues regarding Petitioners' participation in export licensing proceedings are sub judice in NRDC v.
NRC, No. 76-1525 (D.C. Cir., filed June 11,1976).
Con-solidation of these actions will permit avoidance of any suggestion that the Commission has mooted, or is seeking to moot, these proceedings because the circunstances warrant our authorizing a further fuel shipment (XSNM-845) similar to that which was authorized last July in XSNM-805.
l the Edlow Ir.te' national Company amended license On May 31,1977, r
application No. XSNM-845 to further reduce the quantity of material l
l i
6 requested to 306.61 kilograms of U235 contained in 12261.0 kilograms of uranium at a maximum enrichment of 2.71 percent.b ~
In accordance with procedures. set forth in Executive Order 11902, the Department of State, on June 8, 1977, submitted its views and those of other concerned Executive. Branch agencies to the Commission.
The Executive Branch concluded that issuance of the proposed license would not be inimical to the common defense and security of the United States, would be subject to all terms and conditions contained in the Agreement for Cooperation between the United States and India, and recommended that the license be promptly issued.
The Commission has been informed by the Department of State that, in its view, failure to act promptly on this license could impair U.S. relations with India.
The NRC staff, in a June 23, 1977 submission, also reached this c'onclusion and recommended that the Commission issue amended license No. XSNM-845.
In outlining the background of this proceeding, it is important to note' that, since conclusion of the July public hearings of last year, the Department of State has been engaged in discussions with the Govern-ment of India on matters related to nuclear cooperation.
Tiie Indian government has agreed in principle, during these negotiations, to repurchase by the U.S. of spent fuel from the TAPS facility.
We understand that issues pertaining to the long-term disposition of
. spent fuel generated at TAPS, including possible U.S. repurchase, E
See-footnote 1, suora.
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i will continue to be one of the chief topics for examination as these negotiations continue.
The Executive Branch has expressed the view that the Commission should act promptly on this license appl.ication to insure tnat discus-j sions with the Indian government on issues related to non-proliferation can proceed in an orderly fashion.
A letter from Peter Tarnoff, Executive Secretary of the Department of State, to Lee V. Gossick, Executive Director for Operations, U.S. Nuclear Regulatory Commission, dated June 8,1977 (hereinafter, Letter from Tarnoff to Gossick, dated June 8, 1977), asserts:
l "A new and democratic Government has taken office in India as a result of general elections in March.
President l
Carter has indicated that we wish to expand our dialogue l
with that Government on a variety of issues, including I
nuclear matters.
We believe that our foreign policy interest will be best served by establishing a favorable atmosphere for those discussions and that approval of this license application would be an important step in j
this process.
l Our new Ambassador, Robert Goheen, in his first call l
on Prime Minister Desai on May 27 indicated that the U.S.
l would like to enter into negotiations on issues related
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l to non-proliferation.
The Prime Minister welcomed this initiative and agreed to discussions.
Negotiations are envisioned on two levels:
one con-cerned with technical problems such as the Tarapur spent fuel, and the other with much broader non-proliferation l
l issues related to the new U.S. nuclear export policy.
i The Executive Branch recommends the prompt issuance of XSNM-845, as amended.
This shipment, approved at the highest levels, is believed to be in the best interest of U.S. foreign policy objectives, particularly those I
related to non-proliferation."
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8 This Commission believes that withholding action on the present license pending a definitive resolution.of the spent fuel issue, or
.Other issues raised in_the negotiations, would be inconsistent -- not only with this nation's general policy of being a reliable supplier of nuclear fuel -- but'also with,the encouraging responses thus far received from the Government of India on the particular problem of spent fuel disposition at Tarapur, Moreover, fai'.ure to act on this license would l
be contrary to the Executive Branch judgment that the supply of this
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l reactor fuel to India would substantially assist the U.S. in its forth-l L
coming negotiations with India.
Because of the need to act expeditiously on this application, and the steps we have.taken to preserve all issues presently before the Court of Appeals, we are of the view that it is' appropriate to make our licensing determination at this time on XSNM-845.
II.
Commission Determination The applicable. provisions of federal statutory law which govern our consideration of this export license application are as follows:
Atomic Ene'rgy Act of 1954, Public Law 82-73, 68 Stat.'919
- Section 53, 42 U.S.C. 2073, which authorizes the Commission to issue licenses to export special nuclear material, and requires that the material be exported pursuant to an agreement for cooperation unless exempted from that requirement by Section 57(d), 42 U.S.C. 2077(d);
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- Section 57(a), 42 U.S.C. 2077(a), which prohibits the l
export of special nuclear material, except under and 'n l
accordance with a license issued by the Commission pur-suant to applicable sections of the Act;
- Section 123, 42 U.S.C.,2153, which delineates the manner in 5 iich agreements for cooperation are to be entered into and applied, including the requirement that such agreements include guaranties by the cooperating party that security safeguards and standa-ds will be main'tained and that material provided by the U.S. will not be transferred beyond the cooperating party's jurisdictica withput United l
States' agreement or used for any military purpose.
- Section ll(aa), 42 U.S.C. 2014(aa), which defines "special nuclear material";
- Section lig, 42 U.S.C. 2014(g), which defines " common defense and security" to mean the common defense and security of the United States.
Energy Reorganization Act of 1974, Public Law 93-438, 88 Stat. 1233
- Section 201(f); 42 U.S.C. 5841(f), which transferred to the Nuclear Regulatory Commission "... all the licensing and related regulatory functions of the Atomic Energy l
Commission...."
The section of the Atomic Energy Act which specifies the criteria we must apply in the licensing of sp_ecial nuclear material, such as the
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10 low-enriched uranium in the present matter, is Section 57(c)(2), d2 U.S.C.
2077(c)(2), which provides:
The Commission shall not distribute any special nuclear material or issue a license pursuant to Section 53 to any person within the United States if the Commission finds that... the issuance of such license would be inimical to the common defense and security or would constitute an unreasonable risk to the health and safety of the public.
Thus, under the statute, there are three separate factors which the Commission must consider in the instant matter:
(1) whether an agreement i
for cooperation would apply; (2) whether the export would be inimical to the health and safety of the American public; and (3) whether the export would be inimical to the. common defense and security of the United States.
We will address each of these factors in turn.
1.
Agreement for Cooperation i
The proposed export would take place under the terms and conditions j
of the Agreement for Cooperation for Civil Uses of Atomic Energy between the United States and India, signed at Washington, D. C., on August 8, 1963, T.I.A.S. 5446.
Under the terms of Section 123 of the Atomic
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Energy Act, the Agreement was approved by the President after he made a determination in writing that "the proposed agreement will promote and will not constitute an unreasonable risk to the common defense and security." The Agreement also received Congressional review through the procedure of submitting the instrument to the responsible Congres-sional committee -- then the Joint Committee on Atomic Energy -- for the thirty (30)-day statutory period then applicable to such civil uses
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agreements.
See Section 123c of the Atomic Energy Act of 1954 Under Article X of the Agreement, it entered into force for the parties on October 25, 1963, and remains in force for thirty years.
A letter to Vance H. Hudgins, Assistant Director for Politico-Military Security Affairs, Division of. International Security Affairs, ERDA, from A. Anandakrishnan, an official with the Embassy of India in Washington, D. C., dated October 24, 1975, confirms the Indian government's under-standing that the special nuclear material to be exported under the subject license would fall within the ambit of the 1963 Agreement for Cooperation.
The analyses of the Executive Branch and the NRC staff also ref. lect this fact.
Therefore, the initial factor required by Sec-tion 53 of the Atomic Energy Act is established.
2.
Health and Safety Petitioners contend that this proposed export would adversely
" affect the health and safety of the public."
This contention is i
ambiguous.
If Petitioners' concern pertains to the impact of this i
export on the public health and safety of citizens of India living in that nation, this is not a contention the Commission has jurisdiction to decide.
See Edlow Opinion, 3 NRC 563, 582, and Babcock and Wilcox, supra.
If petitioners' concern relates to the impact of this single fuel export on the public health and safety of citizens of the United States, the impacts of U.S. nuclear export activities were examined in the Final Environmental Impact Statement on U.S. Nuclear Export Activities
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(ERDA 1542, April 1976).
That Statement concluded that the impact on U.S.
public health and safety of U.S. nucl ear exports, including fuel shipments L
12 such as the one requested here, are negligible.
The Commission sees no circumstances in which the export of the special nuclear material covered by this license application would affect the health and safety of the U.S.
population.
3.
Common Defense and Security Although the Commission has recently proposed and is having published for public comment a new Part 110 of'our regulations, containing a detailed set of procedural rules to govern our export licensing activities,O e
w have not adopted a formal set of specific substantive criteria to further define those matters which we find determinative in making our statutory i
" common defense and security" finding under the Atomic Energy Act.E Our routine approach has been to analyze a particular license in light j
of eight questions we normally pose to the Executive Branch in seeking the views of affected agencies under procedures spelled out in Executive Order 11902.
We have utilized this procedure in last year's decision i
In the Matter of the Westinghouse Electric Corporation (Application for the Export of Pressurized Water Reactor to Associacion Nuclear ASCO II, O
At the time this Opinion was issued, proposed Part 110 was scheduled' for publication in the Federal Register on Thursday, June 30, 1977.
O In this regard, we note that legislative proposals now before the Congress contain various formulations of such criteria.
This Commission participated in developing the specific lan-l guage of criteria contai.1ed in a proposal submitted by the Administration.
The bills which reflect the Administration's current position are S. 1432 in the Senate and H.R. 4409 in the House of Representatives.
However, until enactment by the Congress of a set of specif.ic criteria, we believe it appro-priate to continue to frame our export licensing determinations along the lines we have developed during the past year.
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Barce!cna, Spain), 3 NRC 739, 745 (1976); and we have also recently employed the same analysis as part of our decision In the Matter of Babcock and Wilcox (Application for the Export of a Facility to the Federal Republic of Germany), issued June 2'7, 1977.
In our Edlow Opinion of tiay 7,.1976, we stated that in making our
" determination whether a given export pursuant to an Agreement for Cooperation is inimical to the common defense and security of the United States, the Commission must base its decision on whether the safeguards and assurances given by the recipient government... insure that United States' supplied fuel is not diverted from the use for which it was authorized."
Edlow Ooinion at 3 NRC 588.
Petitioners' Contentions l
We then analyzed each of Petitioners' contentions to' determine l
whether they were arguably relevant to that determination.
We concluded that several of Petitioners' contentions arguably pertained to the adequacy of the safeguards and related assurances applicable to this U.S.-supplied fuel and special nuclear material produced therefrom, and that the public hearing described in Part I of this opinion should focus on these issues.
Id_. at 585-588.
These. issues were:
(a) the significance of India's failure to ratify the NPT; (b) the significance'of indl 's failure to place inter-l national' safeguards on all its nuclear facilities l
(comonly referred to as " full fuel cycle safeguards");
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(c) whether the United States should require India to refrain from developing additional nuclear explosive devices; (d) whether the U.S. should require India to accept bilateral safeguards, suppleinenting the international safeguards applied by the IAEA at Tarapur; (e) whether the U.S. should require India to establish physical security requirements applicable to operations at Tarapur; (f) whether the U.S. should require India to agree to U.S.
control over the disposition of plutonium produced at j
l Tarapur; I
(g) whether the United States should require India to agree, prior to the shipment of nuclear fuel to Tarapur, to sa,feguards and physical security require-ments for any future reprocessing of such material,
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should reprocessing be permitted; and (h) whether past and present political differences between India and neighboring countries raises the possibil" of international conflict which might disrupt imple-mentation of safeguards and physical security measures at the Tarapur facility.
Each of these issues was thoroughly ventilated in the written submissions of participants in this proceeding, in oral presentations before the Commission on July 20 and 21, 1976 -- or in both.
Each of
15 these contentions will be addressed in the following discussion of the eight basic questions which serve as guidelines in reaching our statutorily required determinations.
These questions bear directly ~on national security and foreign policy issues and provide guidance to us in reaching our common l
defense and security determination.
We shall review these questions in the i
order they are posed to the Executive Branch.
purpose of Export The first question seeks information concerning the purpose of the export.
In the instant circumstances, the special nuclear material will i
be used to fabricate fuel assemblies to be used in fueling the TAPS facility.
This type of civilian use of nuclear energy to generate electric power is not inimical to the common defense and security of the ifnited States.
In fact, the Congress has explicitly stated that one of this nation's policies is to "make available to cooperating nations the benefits of peaceful applications of atomic energy as widely as expanding technology and considerations of the common defense and security will perm'.t."
42 U.S.C. 2013(e).
A similar policy declaration is contained in Article IV of the Treaty on the Non-Proliferation of Nuclear Weapons, 21 U.S.T. 483, T.I.A.S. 6839, to which the United States is a party.
Agreement for Cooperation The second question pertains to whether the recipient country has an Agreement for Cooperation with the United States, and, if so, wnether the proposed export would be covered by the Agreement.
As stated earlier, j
this export would be covered by the Agreement for Cooperation with India.
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l This Agreement, among other things, provides that India may not re-export special nuclear material provided to India by the United States, l
l unless prior United States' approval is received.
See Articles VII(A)(2) and II(F).
l It also provides that special nuclear material supplied to the Government of India may not be reprocessed unless there is a joint determination of the parties to the Agreement that safeguards may be effectively applied.
See Article II(E).
Petitioners have expressed the view that India should be required to agree, prior to Commissior, action on this license application, to safeguards and physical security requirements for any future reprocessing of such material, should re-processing be permitted.
Although the Indian reprocessing facility is nearing completion, the Department of State has advised that:
"The Government of India has been advised that the U.S. is not prepared to make a determination that this Tarapur Indian reprocessing facility (PREFERE) can be effectively safeguarded."
See Letter from Tarnoff to Gossick, dated June 8, 1977, supra (emphasis in the original).
1 Therefore, because reprocessing of U.S.-supplied material will not be permitted by the U.S. government in the foreseeable future, we need not reach the determination whether safeguards and physical security measures would be adequate at that reprocessing facility.
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r 17 IAEA Safecuards The third question concerns whether the recipient country has accepted and implemented safeguards under the International Atomic l
Energy Agency (IAEA).
The United States, India and the International l
Atomic Energy Agency signed.a trilateral agreement on January 27, 1971, which places IAEA safeguards on the Tarapur facility.
l This agreement provides that safeguards be applied only at the Tarapur facility.
Petitioners argue that IAEA safeguards are more effective if all nuclear facilities within a country are placed under international safeguards.
To date the Indian government has not been willing to agree to adopt full fuel cycle safeguards.
Although the United States government has taken the view that such a safeguards regime would be desirable, present United States' policy does not man-date a denial of nuclear exports to countries which have not imposed such a system, if sufficient guarantees have been received that U.S.-
supplied material and material produced therefrom, will be placed under IAEA safeguards.
The Executive Branch takes the position that while the "tJ.S. sup-ports and encourages voluntary submission to IAEA safeguards on all nuclear programs in non-nuclear weapon states-6/
which are not parties to the NPT, there is no legal basis by which we can unilaterally impose 6)
The NPT defines non-nuclear weapon states as those states which did not manufacture and explode a nuclear weapon or other nuclear explosive device prior to January 1, 1967.
We adopt this definit-ion for purposes of this opinion.
18 this as a requirement on India or on any other such state."
Suppl emental Resoonse of the Decartment of State to the Petition of the flatural Resources Defense Council, Inc., The Sierra Club, and the Union of Concerned Scientists for Leave to Intervene, dated March 19,1976, at i
Appendix A, p. 6 (hereinafter, the State Department Supolemental Response).
In the Commission's view, failure to require IAEA safeguards at nuclear facilities in India where there is no U.S.-supplied nuclear fuel does not lead ineluctably to the conclusion that a particular fuel export to Tarapur (which will te_ subject to IAEA safeguards) should be L
considered inimical to the common defense and security of the United States.
If an export to Tarapur is inimical to the common defense and i
security, it must be attributable to other circumstances.
Petitioners also argue that even the IAEA safeguards applied at Tarapur cannot adequately insure that U.S.-supplied material will not be diverted and used to fabricate nuclear explosive devices.
Petitioners recommend that in addition to the IAEA safeguards, U.S. bilateral safe-guards be applied.
The Department of State in its Supplemental Response of March 19 responded to this argument by noting that U.S. domestic safeguards are aimed at protecting against possible theft, diversion or sabotage efforts by individuals such as terrorists or otner criminal elements.
This type of threat -- called the "sub-national" threat, in the parlance of the nuclear safeguards comunity -- reasonably pre-sumes a comitment on the part of a recipient nation's officials to prevent such a diversion.
After all, the recipient government and its citizens would be the most likely target of such illicit activity.
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19 Therefore, insofar as these domestic measures aim at preventing a violent, forcible' attempt to divert nuclear material, they raise the issue of the adequacy of India's physical security regime at Tarapur.
This matter is l
discussed below at page 21.
If the concern is rather for possible clandestine diversion of nuclear material by plant employees or others, l
the accounting, inventory and surveillance measures implemented under the IAEA safeguards regime would provide protection against this kind of a sub-national threat.
In contrast, IAEA safeguards are designed for the timely detection and associated deterrence of the possible diver-sion by the government receiving assistance of significant quantities of nuclear materials for the purpose of acquiring a nuclear weapons capability --the so-called " national" threat.
Because they have different objectives, the two systems cannot be compared directly.
However, the Executive Branch view, with which we concur, is that both systems are effective and that imposition of bilateral U.S. safeguards would not be more effective than the IAEA safeguards currently being applied at
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Tarapur.
State Decartment Supolemental Response, Appendix A at p.10.
Finally, the Executive Branch advises that there is no legal basis under the U.S.-India Agreement for Cooperation or the U.S.-India-IAEA trilateral safeguards agreement for permitting concurrent application of both U.S. bilateral and IAEA safeguards.
In fact, the trilateral agree-ment specifically provides for imposition of IAEA safeguards in lieu of U.S. bilateral safeguards.
State Department Supplemental Response, Appendix A at p. 10.
India and the IAEA consented to be bound by the l
I provisions of the bilateral and trilateral agreements (respectively) in l
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l specific contemplation of the fact that U.S. bilateral safeguards would-not be concurrently applied.
The NRC staff which has a broad familiarity with the IAEA safe-guards system also takes the position that IAEA safeguards are currently adequate to detect illicit large-scale diversion of U.S.-supplied nuclearmaterials,andfindinopracticalneedtoimposeadditional bilateral safeguards.
We have also concluded that bilateral safeguards are not required to supplement IAEA safeguards currently in force at the TAPS facility before we can find that our statutory licensing requirements have been met.
Adequacy Of Procedures Absent IAEA Safeguards The fourth question pertains to the adequacy of accounting and inspection procedures in circumstances where IAEA safeguards are not applied.
This question is not relevant here, because IAEA safeguards are applied at the Tarapur Atomic Power Station.
If NRC Staff Combined Answers to Petitions for Leave to Intervene by Natural Resources Defense Council, Inc., Sierra Club, and the Union oTToncerned Scientists, and Brief in Response to Comission's Directive Dated March 5,1976 (hereinaf ter, Staff Combined Answers of March 5).
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Physical Security l
l Question five asks whether the recipient country has adequate physical security arrangements to deal with subnational threats to divert significant quantities of nuclear weapons grade material (plutonium I
or highly enriched uranium).. The proposed shipment here is for low enriched uranium which is not nuclear weapons grade material.
Nonethe-less, an ERDA Physical Security Review Team visited the Tarapur Atomic Power Station in November 1975, and its April 30, 1976 report concluded that the security measures in place were adequate to protect the nuclear material at the facility and were consistent with the measures recom-mended by the IAEA in the document which sets forth the ' Agency's latest formal position on what physical security regime is appropriate for protecting nuclear material from diversion.
The Physical Protection of Nuclear Material, International Atomic Energy Agency, INFCIRC 225, Vienna 1975.
Recipient's Nonproliferation Policy The sixth question requests information concerning the position of the recipient government respecting to the non-proliferation of nuclear weapons.
This is a piimary factor in our evaluation of comon defense and security matters.
One indicia of a nation's intent to refrain from developing nuclear explosive devices is adherence to the NPT.
The l
Government of India has not signed that instrument, and has consistently I
expressed the view that the Treaty discriminates against non-nuclear weapons States, and particularly against economically and technologically l
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less-developed countries. 'It has been the steadfast policy of the United States government, including this Commission, to promote adherence l
to the NPT.
The Government of India is fully aware of our interest in this regard.
In the present case, Article VII of the Agreement for Cooperation provides that the Government' of India guarantees that no material, equipment or device transferred to the Government pursuant to the Agreement, or any special nuclear material produced at the Tarapur Atomic Power Station shall be used for atomic weapons or for research on or development of atomic weapons or for any other military purpose.
In addition, the Government of India has given the United States written I
assurance that the special nuclear material, and products therefrom, exported by the United States to Tarapur "... will be devoted exclusively to the needs of that Station unless the U.S. specifically agrees that such material may be used for other purposes." Letter from Homi N. Sethna, Chairman, Deoartment of Atomic Eneroy, Government of India, to Dixy Lee Ray, Chairman, U.S. Atomic Eneray Commission, dated September 17, 1974.
We are unaware of any evidence suggesting that material provided by the U.S. to India for use in connection with the TAPS facility has been employed in the development of a nuclear explosive device.
One factor of which the Commission is keenly aware -- as are all other participants in the instant proceeding -- is the detonation of a nuclear explosive device by the Government of India in 1974.
It would be a gross understatement to opine triat this incident has introduced a 1
most troubling note into the relations between the governments 'of the
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23 I
United States and India on matters affecting nuclear non-proliferation policy.
However, the Commission's responsibility is to determine what implications this event has for the common defense and security of the United States, considering all the circumstances which have surrounded l
the Rajasthan explosion and the events which have occurred in the three years since that event.
l In this regard, several factors are relevant.
Firs.t, the Commission notes that the explosion, which the Indian government steadfastly main-tained was conducted solely for peaceful purposes, has not been repeated.
Second, there is no evidence that the TAPS facility, or any material sent by the U.S. as fuel for that facility, were employed in the development of the device expleded in 1974 The question of what role may have been l
l played by the heavy water supplied by the United States for use in other l
nuclear facilities in India will be discussed shortly.
Third, in recent months a new government has taken office in India.
Newly elected Prime Minister Morarji Desai of India has recently voiced his opposition to nuclear weapons and reiterating Indian policy not to use nuclear energy for military purposes.
It is far too early to l
expect that the newly established administration in New Delhi -- or, for -
that matter, in Washington -- will have resolved all aspects of their i
relations on nuclear cooperation and non-proliferation.
However, the l
Consnission does take favorable note of the fact that discussions between the Executive Branch and the Government of India are being conducted on I
a continuing basis, at the highest levels, and with the evident sense of l
urgency demanded by the crucial nature of'the subject matter.
Diplomacy 1
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24 i
must have time to work in this important field.
It is for that reason that the Comission is inclined to weigh heavily expressions by the Department of State, as chief foreign policy agency of the U.S. govern-I ment, that maintaining the supply of fuel for the Tarapur facility is an important precondition for insuring that the continuing discussions on a broad range of issues -- in both non-nuclear and nuclear fields -- can proceed without serious disruption.
Fourth, we believe it is also important to underscore the Department of State's,ecent action in informing the Indian government of the new U.S. nuclear policy that we will be unable in the future to continue nuclear cooperation with a non-nuclear weapons state that detonates a nuclear explosive device.
This step has put the Indian government on unequivocal notice that, even if India explodes a weapon arguably con-structed with entirely indigenously produced materials, utilizing technology not directly received from the United States, the United States government has announced its intention to terminate the supply of fuel to Tarapur.
Petitioners argue that the practice of authorizing export to countries which have not signed the Non-Proliferation Treaty violates Article I of the NPT prohibiting the U.S. from transferring " nuclear weapons or other nuclear explosive devices over such weapons or explo-sive devices directly or indirectly" to any nation and from " assisting l
any non-nuclear weapon State to manufacture or otherwise acquire nuclear I
l weapons or other nuclear explosive devices, or control over such weapons or explosive devices," and claim that Article III of the NPT prohibits
25 the transfer of special nuclear material to any non-weapon state in the 1
I absence of safeguards on all nuclear activities within its territory, 8/
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or under its control or jurisdiction.
t The Executive Branch addressed these contentions in great depth in 9/
l its Supplemental Response of March 197-It stressed that the low onriched I
a/
i Article I of the NPT provides:
Each nuclear-weapon State Party to the Treaty undertakes not to transfer to any recipient whatsoever nuclear weapons or other nuclear explosive devices or control over such weapons or explosive devices directly, or indirectly; and not in any way to assist, encourage, or induce any non-nuclear-weapon l
State to :.1anufacture or otherwise acquire nuclear weapons or other nuclear explosive devices, or control over such weapons or explosive devices.
~
Article III.of the NPT provides in pertinent part:
- 2. Each State Party to the Treaty undertakes not to provide:
(a) source or special fissionable material, or (b) equipment or material especially designed or prepared for the processing, use or production of special fissionable material, to any non-l nuclear-weapon State for peaceful purposes, unless the source or special fissionable material shall be subject to the safe-guards required by this article.
- 3. The safeguards required by this article shall be imple-mented in a manner designed to comply with article IV of this Treaty, and to avoid hampering the economic or technological i
development of the Parties or international cooperation in the field of peaceful nuclear activities, including the inter-l i
national exchange of nuclear material and equipment for the processing, use or production of nuclear material for peaceful purposes in accordance with the provisions of this article and the principle of safeguarding set forth in the Preamble of the Treaty.
9/
See Supplemental Response, pp. 33-40.
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26 uranium to be furnished as fuel for the TAPS facility cannot be used for i
explosive purposes unless the Indian government either further enriches l
l the material or reprocesses spent fuel generated in the reactor at i
Tarapur.
The Indian government does not presently possess the technologi-1 i
cal capability of enriching the material and the United States has not l
given India permission.to reprocess the material.
In addition, the Department of State cited the assurances received from the Government of India that U.S.-supplied material wilI be devoted exclusively to the needs of that Station.
With respect to Petitioners' claim that nuclear commerce with NPT non-adherents violates this nation's obligations under Article I of that treaty, it is significant to note that one of the witnesses called by Petitioners themselves at the July 1976 hearings disagreed with that interpretation.
Dean Adrian Fisher, one of the principal negotiators for the U.S. stated his view as folicws:
"Now, some-people have urged j
and I am not urging this, Mr. Chairman, that we take the position that the Treaty prohibits us from shipping other than to Treaty parties.
I don't think the Treaty so reads, but the Treaty doesn't require us to ship iio non-parties." Transcript of Ta apur Hearings (Tuesday, July 20, 1976) at p. 52..
We do not believe it can reasonably be asserted that the U.S. is encouraging India to develop nuclear explosive devices, particularly in light of the new U.S. policy to terminate further nuclear cooperation with any non-nuclear weapon state which explodes a nuclear explosive device.
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27 1
t The Executive Branch also disagrees with Petitioners' interpretation of Article III of the NPT.
The State Department, after analyzing the language of the statute and examining the practices of other parties to the Treaty, concluded "Since the entry into force of the NPT, it has been j
commonly understood by the parties that they could export nuclear equip-ment, devices, and materials to non-party states, if safeguards followed the exported equipment devices, or materials." State Department Supole-mental Response of March 19, p. 40.
The NRC staff, in its Combined Answers of March 5, reached the same j
i conclusion as the Department of State.
l On matters such as the legal interpretation of provisions in the NPT, the Commission gives great weight to the views of the Department of State not only because the Department was responsible for negotiating that Treaty, but also because it is the U.S. government agency which j
possesses the greatest expertise in the interpretation of international law.
The Commission, after examining the written submissions on this issue and.the presentations at the oral proceedings last July, finds the Department of State views on this issue to be persuasive.
Nuclear Explosive Devices j
e Question seven pertains to "[w] hat understandings... the United l
States (has) with the recipient country with respect to the use of U.S.-
supplied material or equipment to acquire or develop nuclear explosive devices for any purpose, and as to the recipient country's policies and actions as to such development using equipment and material from any source".
As stated previously, tr.e Government of India in a 1974
28 exchange of correspondence gave the U.S. written assurance that the special nuclear material exported to Tarapur and the products therefrom, will be devoted exclusively to the needs of the TAPS facility, unless the U.S. has specifically authorized other uses of such material.
As for India's policy regarding development of nuclear explosive devices using equipment and materiaT from any source, the Executive Branch in its June 8,1977 letter to Lee V. Gossick, suora, stated:
"With regard to Indian policies on developing nuclear explo-sive devices, we are encouraged by Prime Minister Desai's recent statements, and it i.s our hope that India will con-clude that further testing of PNE's will not serve a useful purpose.
The Indians are also aware that under our new nuclear policy the U.S. will be unable in the future to continue nuclear cooperation with a country that explodes a nuclear device."
Other Factors Question eight is a residual provision which requests information on any factors not previously addressed which might bear on issuance of the export license.
In the present proceeding we believe there are three additional factors which should be addressed.
First, Petitioners have suggested that past and present political l
differences between India and neighboring countries raise the possibility of international conflict which might disrupt implementation of safe-guards and physical security measures at the Tarapur facility.
The Executive Branch discussed this issue in its Supplemental Response of March 19 and stressed that although India had been involved j
in major hostilities three times during the past fifteen years, that these hostilities have never been closer than 600 miles from Tarapur.
29 l
During these periods of hostilities we are informed that there has l
never been any threat to domestic law and order in India.
The Depart-ment of State further asserts that India is now beyond question the preeminent power in i
South Asia.
We see no likelihood in the forseeable future that the Tarapur Power Station might be in the path of any hostiliti.s..
Available evidence also strongly suggests that'even if hostilities were to break out elsewhere in the subcontinent there is virtually no risk that a breakdown in domestic ordo might in some way threaten Tarapur's physical security.
State Department Supplemental Response of March 19, at Appendix A, p. 3.
Relying heavily on the Department of State's views on this issue, we conclude that a remote threat of possible hostilities between India and its neighbors does not endanger the Indian government's ability to insure that material used at Tarapur is not diverted for use in nuclear explosive devices.
The second issue pertains to the significance of India's detonation i
of an explosive nuclear device, the plutonium for which was apparently
)
produced in a reactor furnished by Canada, utilizing U.S.-supplied heavy water as.a moderator.
The Executive Branch has stated that there is a high probability that U.S.-supplied heavy water was in the CIRUS reactor during the period when the plutonium used in India's nuclear explosive test was believed to be produced.
We note, however, that the heavy water supplied by the U.S. for CIKUS was not subject to the explicit obligation to use U.S.-supplied material only for activities approved by the U.S. government, as provided in the agreement for cooperation with which we are concerned here.
Also, the heavy water at CIRUS was not subject to the controls imposed on the Tarapur reactor and its fuel.
30 4
The U.S.-supplied heavy water, the CIRUS reactor and the plutonium produced therein were not subject to IAEA safeguards, as are the Tarapur l
reactor, its fuel and the material produced therefrom.
Although India gave the U.S. a peaceful-use assurance in connection with the heavy l
water. supplied for CIRUS, the implications of that assurance were not explicit with respect to the question whether a " peaceful nuclear explosive" would constitute such a peaceful use.
The nuclear fuel supplied for the TAPS facility and any material produced therefrom are, in contrast, subject to an unambiguous guarantee that they will be used only in the Tarapur reactors.
A third issue which was prominent in our July hearing on Tarapur and has been of importance in the Commission's consideration of license applications for Tarapur fuel is the question of the ultimate disposi-tion of spent fuel from TAPS and any material produced therefrom.
After issuance of license XSNM-805, the Executive Branch discussed with India the repurchase by the U.S. of spent fuel from the TAPS facility.
Indian government authorities agreed in principle to such an arrange-ment.
We understand that the issue of the disposition of spent fuel from Tarapur will be one of the chief topics-for discussion as negotia-tions with the new Indian government on nuclear issues proceed.
The question of the disposition of spent fuel from U.S.-supplied reactors will also be addressed in negotiations with other governments as a result of the administration's nuclear policy review, and the policy of the administration will be to continue normal fuel supply to foreign recipients until those negotiations have been undertaken and their results evaluated.
The Comission is of the view that withholding the
3; l
fuel requested here pending a definitive outcome of the negotiations with India would be inconsistent not only with the overall policy on continued fuel supply, but also with the response thus far received from the Indian government on this issue.
Moreover, it would be contrary to the Executive Branch judgment that the supply to India of the material covered by this license wouid substantially enhance the U.S. position in the forthcoming negotiations with India.
III.
Conclusions l
The export of this special material is in full accord with the l
l Agreement of Cooperation between the United States and India.
IAEA safeguards are applied at the Tarapur Atomic Power Station to insure that this material, and any nuclear material produced from it will not be diverted for use in a nuclear explosive device.
In issuing this license, we wish to emphasize that the Commission will be acting upon other applications for fuel to be used at Tarapur such as License Application No. XSNM-1060 presently before us. We will continue to follow closely the direction of India's nuclear program and the progress of U.S.-India negotiations on issues relating to the non-proliferation of nuclear weapons and the return of spent fuel.
Before action on other applications, this information will be carefully evaluated by this Comission.
f-
32 Finding and Order For the reasons set forth above, we find that License No. XSilM-845 meets all the standards relevant for issuance under the Atomic Energy Act of 1954 and the Energy Reorganization Act of 1974, and hereby direct the Assistant Director for Export-Import and International Safe-I guards to issue XSNM-845 to the Edlow International Company.
It is so ORDERED.
\\
l BytheCommissfon
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Ss g,___*
SAMUELh.CHILK N v
Secretary of(the Commissioh Dated at Washington, D.C.
hk i
this ][jf day of June, 1977 i
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r 6/28/77 l
l COMMISSIONER GILINSKY concurring,
(
Almost one year ago to the day, I dissented from a i
l Commission decision to grant an export license covering low l
enriched uranium for the Tarapur Atomic Power Station.
Today, however, I am joining in approving the issuance of a similar license, XSNM-845.
I am doing so because the circumstances surrounding this action have altered markedly in the interim.
Nevertheless I am obliged to say that severe infirmities remain to be cleared up if this trade is to continue on a normal basis.
The focus of my concern last year was the lack of assurance that effective safeguards would be applied to the exported fuel after its use in the Tarapur reactors.
I was particularly concerned about the strong possibility that the U.S.
intended to grant India permission to reprocess U.S.-
supplied fuel in its new reprocessing plant, also located at Tarapur, and that as a consequence the Indian government would be in a position to stockpile plutonium -- a nuclear explosive material -- derived from U.S.-supplied fuel.
As I have made abundantly clear on numerous occasions,* the inspection and monitoring safeguards of the International Atomic Energy Agency cannot, in themselves, provide an See e.g., Westinghouse Electric Corporation, (Application for the Export of Pressurized Water Reactor to Asociacion Nuclear ASCO II, Barcelona, Spain) 3 NRC 739 (1976),
Commissioner Gilinsky, dissenting.
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adequate deterrent against the misuse of this dangerous material.
At the time the Commission considered XSNM-805, United States policy had not fully acknowledged this fact.
l Indian stockpiling of plutonium was particularly dis-i i
turbing in light of that country's detonation of a nuclear l
explosive device in 1974, her continuing assertion -- rejected by the United States -- that there is a difference between a so-called " peaceful" explosive device and a nuclear weapon, and the continuance of India's nuclear explosives program.
l We have now been assured by the Department of State, however, that Indian reprocessing of U.S.-supplied fuel has l
been ruled out and that the Indian government understands that permission to extract plutonium from the Tarapur spent fuel will not be forthcoming.
See Memorandum of Peter Tarnoff, Executive Secretary, Department of State, to Lee V.
Gossick, Executive Director of Operations, Nuclear Regulatory Commission, June 8, 1977.
It is further my understanding l
l that the Department of State has informed the Indian govern-ment that it will recommend against further sh.ipments of fuel should India explode another nuclear device.
Id.
I am nevertheless obliged to observe that serious problems remain'and there is little reason to be sanguine about this licensing action.
Among the remaining difficulties are:-
0
~3-6 our agreement with India does not explicitly rule out the use of U.S.-supplied material for nuclear explosives, and we do not have an explicit, unequivocal statement on this point from the government of India; India continues in,its claim there is a difference between a " peaceful" nuclear device and a nuclear weapon; significant ' Indian nuclear facilities remain outside the supervision of the international inspection system of the IAEA; India's explosives program is apparently continuing.
Although our advice from the Department of State indicates that the United States will discontinue cooperation in the event of another nuclear explosion, it does not address explosives; insofar as we know India's explosives program continues to use heavy water supplied by the United States.
Such use is in violation of the plain meaning of the March 1956 contract covering transfer of this material, as we made clear in our aide-memoire of 1970;
]
y'*,
l large quantities of irradiated spent fuel are held in i
storage at Tarapur.
Should our agreement with India 4
threaten to break down for any reason, this fuel, and the plutonium it contains, must be considered a " hostage."
l l
Despite negotiations for the return of this spent fuel, I
a variety of practical difficulties have been encountered, and the likelihood that the-United States will ultimately regain possession of this material appears to be receding.
My concurrence in the license approval today is influenced l
by the firm antiproliferation stand taken by President i
Carter and his commitment to renegotiate the present agree-ment for cooperation to include among other things:
an unambiguous requirement that recipients refrain from testing nuclear explosives of any kind; a requirement that international safeguards be applied to all nuclear activities within the recipient country; and a provision specifying that the United States will terminate exports if a recipient violates or withdraws from IAEA safeguards.
In going forward with this fuel shipment, I am pro-i ceeding in the view that if this trade is to continue such conditions will be applied within a reasonable time, and I
will, of course, be acceptable to the government of India.
.