ML20205E671
| ML20205E671 | |
| Person / Time | |
|---|---|
| Site: | 07002131 |
| Issue date: | 07/21/1976 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| References | |
| NUDOCS 9904050263 | |
| Download: ML20205E671 (164) | |
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183 UNITED 97.*1 OF AMERICA NUCLEAR R"!U'aTORY COMMISSION
__.---------------X In the Matter of:
EDLOW INTERNATIONAL COMPANY Docket No. 70-2131 License No. XSNM-845 (Agent for the Government of India to Export Special Nuclear Material)
X Room 1115 1717 H Street, N.
W.
Washington, D.
C.
Wednesday, 21 July 1976
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l Hearing in the above-entitled matter was reconvened, pursuant to adjournment, at 9:30 a.m.
i BEFORE:
CHAIRMAN MARCUS A. ROWDEN COMMISSIONER EDWARD A MASON COMMISSIONER VICTOR GILINSKY g hgy COMMISSIONER RICHARD T. KENNEDY Ngur,'n 5 hoy O bCL. H bI.gf ~ ts!
/b' 7 L 9904050263 760721 PDR ADOCK 07002131 C
184 a
EEEIEEIE PAGE FURTHER STATEMENT OF:
MYRON KRATZER, Acting Assistant Secretary of Oceans and International Environmental Affairs, Department of State MICHAEL A. GUHIN, Office of International Programs, NRC ELDON V. C. GREENBERG, ESQ.,
Center for Law and Social Policy J
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185
_P _R O C _E _E D _I N _G S_
t CHAIRMAN ROWDEN:
The hearing is reconvened.
Mr. Kratzer.
MR. KRATZER:
Yes, sir.
CHAIRMAN RONDEN:
The Commissicn has several additional questions to pose.
Mr. Gilinsky, I believe you had a couple of questions for Mr. Kratzer.
COMMISSIONER GILINSKY:
Yes.
I do.
I would like to com-ment a little bit on our discussion yesterday.
I have been thinking about the ingredients of this problem.
On the one hand we have a stockpile of plutonium, spent fuel which contains I
l most of India's plutonium for the moment the principal scurce of India's plutonium production is, in fact, American reactors.
j As Mr. Scoville pointed out, the CIRUS reactor is a small source.
Others may be planned but they may or may not work.
i I
We also have an agreement which is fraught, to say the least, with a history of ambiguity, a relationship fraught with ambiguities, I think the best example is the heavy water affair, which had, at least, to my mind, demonstrated U.S. disinclina-tion to really press the question as to whether or not there had been a violation.
There is a history of misreading of Indian statements.
There is disagreement on the meaning of our basic agreement.
Professor Fisher pointed to this.
It seems to me the Indians have turned some of these undertakings on their head, claiming the right to do precisely what they were intending to exclude, I am 'ref erring, of course, to nuclear explosives.
186 e
After all these interpretations and re-interpretations, we think we finally have got things nailed down, but we were in the same position in the past, thinking that things were all right.
at There is also a safeguard history of Indian reluctance, to accept IAEA safeguards, disagreements on whether safe-
- first, perhaps more guards applied to facilities or materials, some, It all seems minor, disagreements concerning seals, and so on.
to add up to an Indian aversion to strict safeguards.
Suppose in this situation, India wanted to use this U.S.
I know it is awkward supplied material for nuclear explosives.
to speculate about this in public, but still it is in the back of everybody's mind.
That is why we are so much concerned about safeguards in this case, and in other cases.
But here it is less a matter of speculation, because India has shown more than a passing interest in nuclear explosives.
-What would they do?
They would, first of all, want to reprocess this material, to get it as close to that form, useable form, as possible, and then they would try to find some way of getting out of this agreement, perhaps do this by finding fault with U.S.
This was not~only the basis of our previous discus-behavior.
sion yesterday, it would not be all that hard to do if one were to accept some of the distorted logic that led to our previous I
difficulties.
They could, for example, on the basis of what understand to be the State Department's interpretation, find in some fault with our delivery schedule, or claim we had not
r.
187 way been meeting their needs which could be interpreted as to require them to have a liberal stock of unused fuel.
l By my calculations, they have, at least, a two-year stock l
at the present time, well beyond what they had at the time of the '74 explosion.
We have, as far as I can tell, been actu-i At the j
ally allowing them to increase that stock of fresh fuel.
time of the explosion Ambassador Kaul in another letter to Mr.
Kissinger spoke of the Indians being out of fuel at the time, i
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and, in fact, the Tarapur reactors being down for that reason.
If that, in fact,'was true, then we have immeasurably increased the stockpile.
t It seems to me, in this situation, reprocessing or stock-J piling could lead to an impermissibly dangerous situation in l
India.
)
l I think it also would be inconsistent with our policy else-where, our admonitions to other suppliers with regard to their supply of reprocessing facilities.
I really don't see how we can ask them not to export these facilities if we are acquiescing in the use of Indian reprocessing facilities for U.S.
fuel.
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think we will be doing something which is at least as bad.
l l
For my part, if the outcome is that the State Department is l
to carry a message to Delhi, I think it has to be:
there will be no reprocessing of U.S.
fuel and let's talk about what happens to the. spent fuel.
Frankly, I would like to ask my fellow Commissioners at some later point to make that a unanimous recommendation.
L
188 t
Now, you raise the question as to whether this matter can It seems to me that given to this license.
be tied to a license, h
er the unhappy history of this relationship, whatever t e prop I think in roles of our respective agencies are in general, this case it has to be tied to the license.
although the You have been frank in saying yesterday that, the trend of possibility of excluding reprocessing is there, events and the general inclination on the part of the State is go go ahead with the situation in which the Department, Indians would reprocess, and that we are reluctant to give a least I understand you at broad reading, you are reluctant, rights under the that way, to give a broad reading to the U.S.
1 i
agreement.
You spoke somewhere that this has to be done in a careful d
way, and in good faith and in a non-discriminary manner an 6
so on.
after the But it seems to me, I don't have the statement.
history of India interpreting the word " peaceful" and our reluc-that I tance to press on the matter of heavy water and so on, on this matter and to insist think we just have to stand fast that there be no reprocessing.
I wonder if you could just tell us some-Well, given that, thing about the status of the Indian reprocessing plant and what the schedule seems to be and what plans there are for the use of this plutonium.
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MR. KRATZER:
Well, thank you, very much, Commissioner Gilinsky.
Those are very thoughtful comments.
I won't try to respond to all of the points which you made, but I do want to say that I think thet your point that we do have a policy of seeking greatest possible restraints on the export of repro-cessing facilities in the future; that we are urging others to follow that same policy, is a very important one, and we cer-tainly do not want to appear to be in any inconsistent position.
The reactions that we might take in the future with respect to reprocessing under the 1963 agreement with India, and the policy which we have clearly and very emphatically are following at the present time.
That is, the policy of seeking the maximum possible restraint on the first spread of national reprocessing facilities.
The only point I was trying to make yesterday, and I am glad you have given me the opportunity to clarify it, there is a past history here and, in some cases, that past history has been reduced to provisions of agreements, as it has in the 1963 agreement.
I think that we clearly want to apply provisions of the past agreements, including the one with India, but not lim-ited to that, in a way which is consistent as it possibly can be with our current perceptions of the risks, the dangers of repro-cessing, but I also think that it is important that we exercise those provisions, and, again, this applies not only to our agree-ment with India, but to the other agreements which may contain similar previsions in the utmost good faith, because that is part of the whole fabric which I think is important to the main-tenance of our overall nonproliferation objectives.
l l
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L s
190 a
In other words, the fabric of reliability on our part which, in turn, attracts the willingness of others to rely on our com-follow non-mitments, to rely on our assurances and, therefore, proliferation policies that are far more acceptable.
I hope I made it clear that the question as to whether or what extent we might give our approval of the joint determina-tion called for by the agreement with India, is involved.
I did want to be frank in explaining what had occurred up until now and saying the right of approval we have, the right to make a joint determination, is not an absolute, it is not an unqualified one.
The agreement itself spelle out what the mean-ing of it is on the basis of whether or not effective safeguards can be applied.
But, to repeat there has been no determination on our part and nothing, certainly nothing that might occur with respect to this license or past licenses, in my view, in any way obligates us ':o make an affirmative determination.
sicw, you asked for some factual data on the status of the reprocessing plant.
It is my understanding that it is physically, essentially completed, since construction, that it is undergoing preoperational testing with cold material.
In other words, nc irradiated material has been introduced into it.
I am afraid that I can't give you an absolutely up-to-date l
estimate of the probable date to which those various events, I
testing, with irradiated material and so on will take place.
l 1
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191 4
My belief is that it is at least a year away the plant would be operational with irradiated material, and it is my further understanding that the first material to be irradiated would not be material supplied by the United States.
In other words, it would not be safeguarded material.
COMMISSIONER GILINSKY:
What material would go through that plant?
MR. KRATZER:
My belief is that they intend to first reprocess material from the CIRUS reactor which, of course, can be reprocessed in the other plant, but which might be a way of giving this plant an initial run.
I want to check those points.
I am not absolutely certain.
COMMISSIONER GILINSKY:
They would only be using part of it.
MR. KRATZER:
The part of it, in the sense of not using, for example, the head end or something?
COMMISSIONER GILINSKY:
Yes.
MR. KRATZER:
That is possible.
The CIRUS material also requires some sort of head in treatment.
I believe it is also chopped and leached, although I am not familiar with the procedures.
We will confirm this infor-mation, but I think it is correct.
It might, of course, involve the use of material from the Rhajasthan reactors.
In any event, it is not their intention to reprocess the material from the Tarapur reactors.
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192 9
COMMISSIONER GILINSKY:
Could you tell us something about what we know of Indian plans to use the plutonium after reprocessing.
MR. KRATZER:
I believe their long-term plan, we have known of this from the outset, is to use it as recycled fuel.
COMMISSIONER GILINSKY:
In the Tarapur facility?
MR. KRATZER:
Yes.
They are required to do that by terms of the reaffirmacion worked out in 1974, unless we agree 4
otherwise.
No.
I think it is correct that they plan to use it as recycled fuel in the Tarapur reactors.
They have informed us they don't have a recycle plant in current operation or even under construction, although it is part of the longer term plan.
They have still a longer term plan to use plutonium from a variety of sources, whether from this particular source or from the Tarapur, Rhajasthan reactors, in a program which would even-tuall. cnable them to operate their facilities on a thorium i
l U-233 cycle.
India has very large reserves, probably the largest in the world, and by gradually phasing in the use of thorium with plutonium, they can build up a stock of U-233 which would enable them to be more self-sufficient under the thorium U-32 cycle.
I think that is a long range program.
The first use for this would be recycled at Tarapur.
COMMISSIONER GILINSKY:
Since they don't have any immediate plans for recycle --
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193 MR. KRATZER:
There would be no immediate use.
COMMISSIONER GILINSKY:
There would also not be any penalty in not reprocessing.
MR. KRATZER:
Yes.
And also returning it to the United States, which as I explained yesterday is a very distinct pos-sibility which we think merits every exploration.
COMMISSIONER GILINSKY:
I wonder if you could tell us, or what you are able to tell us, about the state of IAEA inspec-tion of the Tarapur facilities, as it is now, and of the spent fuel.
Are we informed of these inspections or would we simply be informed if there was something awry?
MR. KRATZER:
We do not receive formal advice of the inspections, which the IAEA carries out.
The only requirement on the agency, under its present i
arrangements are to inform us of violations or discrepancies that might be interpreted as violations.
That has not occurred.
But there have been many conversa-tions with Indian officials and others, and the Indian officials have been forthcoming, and we have a rather good idea as to how the safeguards are at Tarapur.
There are frequent inspections by IAEA officials.
We have had a group assist it in India.
There is an NRC member of that group.
I believe they had a description of the way the safeguards j
i occurred.
There are devices installed by the agency, they hap-l pen to be cameras which are sealed for tamper indication, cameras which report any movements of irradiated fuel in the Tarapur fuel storage area.
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I 194 In other words, cameras which can by random photographs i
expose any unauthorized removal of this fuel to a very high degree of risk of detection.
Are we confident we know what the COMMISSIONER GILINSKY:
situation is with regard to spent fuel?
I think we can say with a MR. KRATZER:
I think we are.
that the spent fuel is there, that high degree of confidence, it has not been removed from Tarapur, and that there has been no departure from the agreement.
COMMISSIONER GILINSKY:
In trying to arrive at some assess-and how much was going through the ment of India's fuel needs, reactor, we had a great deal of confusion and disagreement?
I don't know if any of that -- I completely MR. KRATZER:
I don't believe any of that related agree there was confusion.
to the disposition of spent fuel.
I think it related to uncer-tainties in the future use of the reactor, the future demands on the reactor,-related to such uncertainties as how much rainfall is available to operate their hydro facilities and also to be a considerable amount of uncertainty about very frank about it, which is not the operation of the Indian fabrication plant, typical, which we have not visited and analyzed in great detail, which really controls the fuel requirements, because of the rather complicated operating procedure which is followed there.
COMMISSIONER GILINSKY:
Are we informed, or do we know, for example, the frequency of' inspection, or what, in fact, inspectors do?
Do they actually make a count of the fuel?
E 195 MR. KRATZER:
Indians have indicated to us that inspections occur.perhaps every two or three months.
Whether these are timed to coincide in general with the times in which the reactor is discharged, that is a' piece of information I am not certain of, although that is the general agency practice.
At the time those inspections are undertaken on reactor fuel, again, I am not focusing on the Indian case, in particular.
1 I am now' speaking from our generalized knowledge which we are fully entitled to, which we do have on agency safeguard features, and they do count the irradiated fuel in storage basis.
COMMISSIONER KENNEDY:
Do we have a relatively high degree l
of confidence that indeed these generalized practices are those being followed in the Indian case?
MR. KRATZER:
Yes, sir, I believe we do.
We also know there has been development work carried out jointly by the IAEA and the agency in India looking toward the further evolution, l
further improvement of. agency practices, and I believe it includes the very kind of thing we are talking about.
In other words, the checking of spent fuel in storage basins l-by instruments which can determine its composition within certain limits.
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CHAIRMAN ROWDEN:
The suggestion has been made, Mr. Kratzer, as a. matter of fact it's more than a suggestion, assertions have been made that we really have insufficient knowledge as to IAEA l
inspections and the results thereof.
l A number of the participants in this proceeding have referred to misgivings expressed in that regard.
196 Would you care to comment on that?
MR. KRATZER:
Well, I have pointed out on many occasions that the agency interprets what I think is an excessively strict sense, the obligations which it feels that it, the agency, is information of a proprietary nature, which it under, to protect receives in the course of its safeguard activity.
We have said this to the agency, and the agency is now modifying the procedure.
In other words, it's modifying the disclosure procedures to on information which it will give to various member states, all member states, and I think that is a move in the proper direction, and I hope that it fully meets our requirements.
Now, having said that, I do think it's fair to say that our knowledge of agency safeguard procedures is particularly at a procedural level as contrasted with the level of specific inspection results, is a fairly complete one.
There is consultation, and this is quite proper between the agency staff and member states.
We are entitled to information on the agency safeguard system.
I think we have a great deal of it.
CHAIRMAN ROWDEN:
Procedural information?
MR. KRATZER:
Procedural information.
There are people in in the government bureaus right now who served in the IAEA, other words, American employees that served in the IAEA and of course they are intimately acquainted with agency safeguard pro-cedures on their return, so that is another way and of course a
197 quite proper way to learn of agency safeguard procedures, so in l
general I think we have the information we need on the procedural level.
I We don't get as much information as I think we should get on individual inspections results since steps are being taken to clarify that.
l I will repeat, Indian officials have been forthcoming.
They have not request -- request for them for information have l
been met.
COMMISSIONER GILINSKY:
It would in any case, I presume, be easier to conduct a unit count on spent fuel, count fuel i
rods rather than the material that is in process.
MR. KRATZER:
Irradiated material in process.
There is no question that the piece count is the most straightforward and i
simplest form of accountability.
l It isn't as straightforward and as simple as it might L
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appear to be because you have to be certain that the pieces you j
l are counting are really the pieces that are supposed to be there.
In other words, the elements are in fact irradiated fuel l
elements from the reactor that they have been discharged from.
That requires instrumentation, which the agency has devel-oped some degree jointly with India.
In other words, in a cooperative manner, and tested in the Indian spent fuel storage basin at Tarapur.
COMMISSIONER GILINSKY:
I wonder if you could comment on the safeguards provisions of the bilateral agreement and the
r 198 can be cancelled trilateral?
I gather the trilateral agreement by either party on six months' notice?
In MR. KRATZER:
This is an unusual pair of agreements.
general, under our bilateral agreements, we have assigned, dele-gated authority to the agency to apply the United States safe-guard rights but to do so in accordance with an agency safeguard system, which of course we were parties to the development of, f
and which are matters of public record.
It depends on whether i
the country is a party to the nonproliferation treaty or whether I
as to which of the two agency safeguard systems are it's not, involved.
In the case oi India, again I think this is unique and I think it's one of those several unique results of the fact that this was the first real case in which we sought to transfer safeguards responsibility to the IAEA.
Now, in the case of the Indian agreement, the agency is in fact applying the safeguard provisions of the bilateral agree-l ment per se, which we and India agreed were generally consistent so-called with the provisions of the agency safeguards system, insert 66, which was adopted two or three years after the 1963 l
agreement went into effect.
So that is the situation.
The agency in a formal sense applied the safeguard provisions of bilateral that has a few practical consequences, but as a general rule it really means the insert their system is applicable to nonparties to the NPT, 66 system.
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199 COMMISSIONER GILINSKY:
What happens in the event either I
party would want to terminate the trilateral?
j MR. KRATZER:
If the trilateral agreement were terminated, in the situation that prevailed at the time the agreements were entered into, we of course would simply resume safeguarding responsibility.
There is a provision in the trilateral which says that our safeguard rights are suspended during the period.
Section 4 of the agreement states the rights of the government of the United States will be suspended with respect to materials and devices, all subject to this agreement, this agreement being the tri-I lateral one.
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So it's clear that if this agreement comes to an end, the bilateral rights are restated.
Now, under the situation that exists now, ourselves as a party to the nonproliferation treaty, and therefore under a j
treaty obligation to export special nuclear materials only when it's pursuant to agency safeguards, only that export would be subject to agency safeguards, I would assume that if there was a failure, a termination of the trilateral agreement, with the result that agency safeguards would not be applicable to any future exports, that the nonproliferation treaty requires, we would have to carefully review the situation and see whether any future exports by the United States could take place.
I don't want to predict the answer to such an expiration.
I think it would obviously depend in part on the reasons for which the trilateral came to an end.
n 200 o
In other words, at the initial fault of the government of India's or one of the other parties, but it certainly is, as a first prima facie result, we would not be in a position to make further exports to India that were not subject to safeguards by the IAEA, because of nonadherence to the nonproliferation treaty.
With respect to the material already in India resulting from prior shipments, our bilateral safeguard rights will be restated and my assumption is that we would exercise then very vigorously.
In other words, as long as any material of the U.S.
- origin, derived from U.S. origin remained there.
COMMISSIONER GILINSKY:
Section 2-C of the agreement says that the quantity of enriched uranium held by the Indian govern-ment shall not at any time be in excess of the quantity necessary for the full loading of the Tarapur Atomic Power Station plus such additional quantity as in the opinion of the parties is necessary to perform the efficient and continued operation of the station.
In connection with previous licensing, the question arose, what were the actual needs of the station.
It was in fact argued that since the fabrication operation is a relatively inefficient one, or small one, therefore it would take an unusually long time to fabricate the fuel, and I
that therefore a larger stockpile ought to be supplied.
1 I read this section to be a limitation, that these stocks are not to exceed a certain amount.
I would like to have your reading of this.
Also, I wonder if you could comment on Ambassador Call's statement that the reactor was down in 1974, in July, for want of fuel.
1
201 MR. KRATZER:
This is a provision which appears very uniformly in our agreements.
I am not certain that it appears in each and every one, but it is quite standard.
I It is clearly a limitation, but I think we have always interpreted, and I think the intent is clear, that it is also
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a statement of intent to transfer that amount of fuel which accomplishes the purpose of the provision; that is, to permit
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etficient and continuous operation of the station.
We have always interpreted this, in all of our agreements, not alone in our agreements with India, as a provision to be j
applied in a common sense, in a common sense manner.
In other words, it is not intended that parties who operate U.S.
reactors on U.S.
fuel should be on an essentially hand-to-mouth basis in fueling the station or in fueling those parts of the fuel cycle, the fabrication plant and the like, which take place within their own jurisdiction.
i I think we have exercised this and interpreted this in the case of the Indian reactor in exactly the same way that we have in the case of other countries.
COMMISSIONER GILINSKY:
It eems to me that the station uses something less than 20 tons of fuel a year.
Now, so far as I can tell, they have a fuel supply of around 50 tons which l
is roughly a two and a half year supply, by my calculations.
l l
l Also, it seems to me a letter appeared as a result of the Freedom of Information Act request -- it is a letter from the Indian Government to the U.S.
Government regarding their needs.
And it says their best estimate are for requirement of 65 to 70 t
202 fuel bundles at each refueling, whereas the amounts which were presented to us by the Department of State were in excess of that, which rather surprised me.
Maybe this is something that can be settled after this hearing, but --
CHAIRMAN RONDEN:
After the hearing, if there is a question to in that regard to be clarified in the record, you may want do that.
I would like it clarified.
MR. KRATZER:
Yes.
I think we should do that.
We have received data and I think it has been furnished to 1
the Commission on the actual number of fuel elements required l
for reloading of the Tarapur Reactor, I think from the beginning of their operating history.
l The nominal loading per cycle is 7 fuel elements, but in every case the actual number required has exceeded that by a considerable margin due to the presence of so-called leakers.
i I think you are well aware of other information which comes l
from a number of sources that is in fact the case.
In other words, the number of the fuel elements discharged from the reactor have been leaking, and that has increased the fuel requirements.
The fuel, because of that, has not attained anywhere close to its design radiation performance in the early days of the operation.
203 l
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/ think that is persistent for the following time, so I believe that the" discrepancy protably is between nominal require-ments and those which have actually been achieved in practice.
As to the inventory of materials presently there, I think we have supplied information indLeating that a very large part of this material is in the form of scrap, that scrap cannot be processed promptly, and that therefore the fabrication plant is limited in terms of its output by the amount of fresh, unpro-cessed enriched uranium available to it.
Once that material is no longer available to it, the output of the fabrication plant drops very, very substantially, and it controls the availability of fuel, the fabrication plant controls the availability of fuel for the reactors; in other words, it produces only the amount of fuel which the reactors need with a very small margin of safety, so its output is affected substan-tially and it is affected whenever fresh enriched uranium is no longer available to feed the plant.
Then the plant -- then the output of fuel elements is no longer keeping up with the ultimate probable requirements of the reactor.
Now, that means that an interruption in the fuel supply, in f
fresh feed to the fabrication plant, will utlimately be fed, the j
i ability to keep the reactor going, even though that might not be l
seen for more than a year downstream, which is the situation we are in right now.
204 It is quite correct that all the material which is -- all the material which is in India at the present time can be worked up.
In other words, if all the scrap can be recovered, converted, and refed to the fabrication plant, then the total inventory is it would keep the plants running for essentially such that recycling, a couple of years.
there in terms of the output of the fabrication plant, But is now material present which at the attainable operating rate of the fabrication plant will accommodate them only to the 1977 reloading, which is something over a year away.
COMMISSIONER GILINSKY:
I asked about Ambassador Kaul's statement at the time, July 18, 1974, where he says the plant has had to be temporarily closed for want of such material.
Now, he refers to material.
I gues's this to be material sent by the United States.
I don't know whether that refers to fuel, or parts, or what.
MR. KRATZER:
I think we need to look into this.
at the early days of the operation of As you probably know, this plant, at the beginning of the operation of the Tarapur fabricated fuel was supplied by the United States.
- Plant, In other words, it was only later that we switched to the provision of uranium hexafluoride and the fabrication took place in India.
We, of course, were holding up the fuel deliveries and I would want to check this, but I think it is possible that --
205 COMMISSIONER GILINSKY:
That would relate to future use 1
in India.
i MR. KRATZER:
I believe it is possible that at this time --
COMMISSIONER GILINSKY:
My own calculations suggest they had an ample supply.
MR. KRATZER:
I think we have to look into this.
I only j
want to make the suggestion, and we will confirm what the facts were, that at this time, the material, it is quite possible that the reactors were still operating on fuel fabricated in the
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1 United States, so that the time scale, in other words, the I
relationship between the date of delivery of fuel from the United States and the time which it was needed in the reactor I
was much shorter.
COMMISSIONER GILINSKY:
The confusion about this whole matter persisted for several months.
It seems to me this point, to another concern, which is that we rely for our information on the Executive Branch.
We said we intend to so rely, and not l
l to duplicate the activities of the Executive Branch and not to set up independent information gathering office.
And I think that is appropriate.
But for the process to work well, we have to be supplied with accurate information.
I think it is essential for proper working of the whole licensing review process.
MR. KRATZER:
I think those comments are well taken.
I think while it is very difficult to acquire information on foreign facilities, particularly in places where we are not I
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206 and that is the case in India, staffed with technical personnel, I don't think that really is an adequate answer to your point.
I think you should say that throughout the period of time through which we were seeking and providing information to the t
licenses, we were Commission in connection with these export l
getting all the information that we requested, but it isn't easy to understand.
It is a complicated plant to understand and there is no doubt in my mind that in hindsight that it would have been well to have a technical team or technical individual make a visit information firsthand and in considerable detail.
to India to get COMMISSIONER KENNEDY:
Mr. Kratzer, could I interrupt to pursue that a little bit?
Could you explain to the Commission just how you do go l
in the Executive Branch, getting this kind of information?
- about, That is, who do you consult with; to what extent would you in this regard?
actually approach the Indian Government Well, during the period of time that we were MR. KRATZER:
supplying information not only to ourselves but to the Commission,
since that had a very particularly in relation to License 805, substantial element of urgency in it, as you know, that informa-tion was being obtained directly from the Indian Atomic Energy Commission by cur consulate in Bombay.
Now, I won't say that they did an outstanding jcb, but to that office is not a staff of technical people and that repeat.,
certainly introduces some complexities into it.
207 In some instances there were direct telephone communica-tions between people here in Washington, including myself, on l
occasion, and Indian Atomic Energy officials.
Here again, that is not a perfect solution to the acquisi-tion of very complicated work.
COMMISSIONER KENNEDY:
Do you in this process, in a more generalized sense, not just in the case of India, make use of
~
other technical agencies in the United States Government, in either formulating the questions or assessing the answers?
MR. KRATZER:
Well we certainly would, when it could be helpful to do that.
I believe that we have, that it happens that in the office l
of which I am the head, there are people who are highly skilled l
l in this area, people who perhaps have the longest experience in the administration of nuclear supply arrangements in the United States government, but we certainly can and I think there have been occasions when we do seek outside technical help.
In connection with the Indian fabrication plant, we con-sulted with both people inside the government and outside the government on the fabrication process.
In other words, on the kinds of operations that are involved in fabrication, the normal times that are needed to conduct these and so on.
The information that we got confirmed the validity of the information we were receiving from the Indian Government.
E 208 COMMISSIONER GILISSKY:
Let me follow that up, as a final matter, could you tell us something about what sort of review was conducted in this case, for example, or in general in con-How does the Executive Branch nection with such a license.
review process work?
Do the various agencies get together?
l a copy of this license and do Have they each been sent they comment individually?
Under the procedures we have developed and MR. KRATZER:
as you know which are being tried and which are now the subject of executive crders, a license application is sent to a variety of Executive Branch agencies.
The specific ones are ourselves, incidentally to several offices within the Department of State, to ERDA, the Depart-to the Arms Control and Disarmament Agency, ment of Defense and more recently to the Commerce Department and I believe now also the FEA.
In this particular one I am quite sure these were reviewed the two agencies which I mentioned last prior to the time that In other words, not by were added to those which are involved.
the Federal Energy Agency, but all of Commerce and not by FEA, the others.
On some licenses, there are meetings but in most cases the that communication is by memorandum and by other means, and at point, at the point at which it appears that the review process is well enough along, a draft analysis prepared in the State is circulated for everyone's review and concurrence.
Department It's often amended on a number of occasions before it's forwarded to the Commission.
l l
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i 209 i
COMMISSIONER GILINSKY:
And that is the way it worked in this case.
1 MR. KRATZER:
I would want to review the records, but cer-tainly in substance.
What you see is a clear analysis of all the agencies which I mentioned, their concurring in it.
I can't tell you exactly what the steps along the way were, but cer-tainly the final product is what I described to you.
COMMISSIONER KENNEDY:
Could you say something about how a possible difference of view might be dealt with in this process?
J MR. KRATZER:
I think a difference of view would be dealt with, in the first instance, by discussions between the agencies, between ourselves and perhaps the dissenting agency.
There would j
be a case where there would be a general reading of all the agen-cies involved and if the difference in view could not be resolved, as the crder provides, it wou2d go to the very top of the govern-ment, the National Security Council, but that hasn't occurred in any case that we have so far referred to you.
j COMMISSIONER GILINSKY:
The reason I asked is because the Freedom of Information Act request brought out the various memos from the various agencies, and they seem rather brief and some of them dealt with a number of licenses in a wholesale manner.
There seems to be no evidence of subsequent input on the part of these agencies.
I wondered if there was such input.
MR. KRATZER:
Well, subsequent input comes when they say they agree with a particular export.
In other words, I don't think that that agreement is given lightly.
If they seek more
210 If information, as they often do, then it's provided to them.
should be fulfilled before they think there are conditions that a license is granted, that has arisen, and that is supplied.
There would be no question as to this CHAIRMAN ROWDEN:
the matter will be thoroughly examined.
application that MR. KRATZER:
I think not.
]
CHAIRMAN ROWDEN:
Mr. Kennedy.
I have a variety of COMMISSIONER KENMEDY:
Mr. Kratzer, First, I would Maybe we can pursue the:a at random.
questions.
a comment which Mr. Davies made like to address, if I might, I can't put it to him, he is not here, yesterday afternoon.
to be sure I understand its but I know what he said.
I want import, at least as you might view it.
"I do believe the license can wait until the He said, Executive Branch" -- this is on page 204 of the transcript which "I
was provided us this morning, from yesterday's hearing, do believe the license can wait until the Executive Branch is able to undertake that operation."
He was referring, if I might
.to the discussions of possible buyback of a sort interpolate, "to undertake that operation and with the Indian government, it's not necessarily a success because that report back to "ou, And I think that will be is speculation, out make some report.
a matter of a couple of months."
Now, my question is, is there some time constraint on a And if so, what is the decision with respect to this matter?
When is the Department's view as to that time constraint?
decision required in your judgment?
l 211 MR. KRATZER:
Well, the Tarapur Reactor Fuel Fabrication Facility, we believe, will once again have its fresh fuel sup-ply exhausted around February of next year.
In other words the material which they have on-hand, including the amounts author-ized for shipment, have been shipped under 805, will carry that plant to February of next year.
COMMISSIONER GILINSKY:
You are talking about the fuel fabrication plant.
MR. KRATZER:
Yes.
I repeat.
This is really what you have to look at because it has a capacity for fabrication which is essentially in balance for the reactor requirements.
But if you lose fabrication time, it's true --
COMMISSIONER GILINSKY:
It seems to me they could lose a year's fabrication time and still keep up.
MR. KRATZER:
If you lose fabrication time then there is a gap in the production of finished elements which shows up eventually, bearing in mind the experience they have had in high rates of replacement.
COMM7:SIONER GILINSKY:
But they really haven't.
That was just at the start.
MR. KRATZER:
No.
I think that has persisted.
I don't believe there have been any loadings which have been abnormal loa ng.
I think even the most recent loadings included a cer-l tain percentage of leakers.
I am sure they hope and we hope that will diminish, but that could significantly affect the 1
time that this material will be needed.
212 COMMISSIONER GILINSKY:
You are suggesting this is in j
delicate balance?
MR. KRATZER:
Yes.
As they have turned out to be, with l
relation to the reactors.
I expect this is a consequence of the high replacement rates.
COMMISSIONER GILINSKY:
Something bothers me about this.
The size of the fabrication plant or efficiency or inefficient operation seems to be driving our obligations with regard to Now,-it seems to me our obligations are -- of the agreement.
course there are Indian obligations also -- but our obligation is to supply fuel for this reactor, and to make sure that that doesn't shut down.
Now, it seems to me our obligations are not to meet any kind of situation, no matter how inefficient or how it is arranged.
I i
J
r.
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MR. KRATZER:
I think again the obligation is defined in l
l I
the agreement and it has always been our practice, been our understanding that this, as I say, should not put people in the position of having to operate on what might be termed a " hand-to-mouth" basis.
In other words, with a certain uncertainty that their costly investment in reactors could be made efficient use of.
COMMISSIONER GILINSKY:
But they have 50 tons of fuel right now, together-with the latest shipment and they use less than 20 tons per year as far as I can tell.
l MR. KRATZER:
It's about 20.
COMMISSIONER GILINSKY:
And their refuelings are less fre-quent than the normal refuelings, they are spread out a little bit more, because they have been going to longer burnup cycles.
MR. KRATZER:
Again, part of the problem is the accumula-tion of fabrication scrap.
Like any other fabrication operation, this plant does not have 100 percent yield with new fuel ele-ments, based on fresh fuel input.
It's considerably less than that.
That is not unusual.
That is not a strange situation.
There are steps being taken to improve the scrap recovery capa-bilities of the plant, which will eventually enable them to work up that scrap more quickly, and recycle it back into the l
fabrication operation.
l-
214 I don't think that they are delinquent.
I don't think it's unusual for this type of scrap to accumulate in similar opera-tions elsewhere.
I would be happy to provide information on think everyone has gone through periods of develop-that.
But I ment, growing pains, and I think that is a fairly normal situ-ation.
Again, as I said, this is not rpgarded as a sensitive part of the fuel cycle.
It has always been administered --
COMMISSIONER GILINSKY:
I am not suggesting that it's sensitive but it does get to the question of the urgency of making a decision on the matter.
MR. KRATZER:
Let me try to respond to that.
The estimate we have given is that fresh fuel will be exhausted at the fab-rication plant in February of next year, that given the normal 90-day lead time for delivery this would require shipment from here sometime in November, allowing November, December and January for shipment.
So that decision schedule should be consistent with that requirement.
COMMISSIONER GILINSKY:
It is awkward to question your statement, but, at the same time we were told that fuel for the shipment had to be there actually in India March 31.
That turned out to be less urgent than it seemed at the time.
I wonder if this falls in that category, or --
MR. KRATZER:
We will certainly review it.
It has not so far been subjected to the same degree of intensive review as was the information that we ultimately obtained on the 805.
215 I think there will be additional information which, by definition, is not available now, after the current refueling which is either under, ray or imminent.
In other words, it will give a new data point on the extent to which -- extent that there are leakers, and the extent to which that problem might have been overcome.
Again, I do agree that this information should be obtained and be obtained with the 3reatest exactitude, but it also has to be said that this provisi on is not intended, it has never been administered in this or a ny other agreement in such a way as to squeeze the reactor operation.
It has been administered deliberately because this is not a sensitive part of the fuel cycle.
COMMISSIONER GILINSKY:
Well, not squeeze the reactor operation, but at the same time not overly enlarge U.S.
obliga-tions, not to be subject to interpretation or a suggestion that there are obligations that extend to supplying whatever requests I
l are made.
MR. KRATZER:
No.
By no means.
I think it has been admin-istered within those boundary conditions.
CHAIRMAN ROWDEN:
Well, we can expect a written submission on this.
I think you can appreciate the desirability of getting as much hard data as possible.
MR. KRATZER:
I think what I have given you, and it may well turn out to be let's say conservative, a conservative estimate, which is what you would expect at first reading,
216 k
i f deliveries indicates that the decision schedule consists o l
sometime in November, is what is now indicated.
Shipment in November.
CHAIRMAN RONDEN:
Talking about leaving the United States.
leaving the United States in November.
MR, KRATZER:
- Yes, Assuming shipment by sea?
{
CHAIRMAN ROWDEN:
l MR. KRATZER:
Yes.
COMMISSIONER KENNEDY:
Could you comment at all, Mr. Kratzer, for us on what efforts the Department of State or other depart-ments of this government may pursue with respect to seeking 1
Indian adherence to the NPT?
Well, there were extensive discussions of MR. KRATZER:
l the NPT was under negotiation and follow-(
this at the time that l
ing its signature for some time.
My recollection is that India was a member throughout the of what was then called the ENDC, negotiations of the NPT, Eighteen-National Disarmament Committee.
l So they were intensively in all the negotiations of *he there was some hope, cer-treaty, and, in that very process, efforts made to make the treaty acceptable to them, tainly great and have them become a party to it.
with very I participated after the treaty came into effect, l
senior Indian officials: Indian officials came here, explored in great detail whether adherence to the treaty could be t
possible.
I think we all know the results.
217 I think, as I said earlier, it isn't realistically fore-seeable that India would become party to this treaty.
l COMMISSIONER KENNEDY:
As a practical matter, has the Department ever even slightly attempted to condition agreement for cooperation on adherence to the NPT?
Not necessarily with India, but with any country, to your knowledge?
MR. KRATZER:
It is a very good question.
I don't know how to interpret --
COMMISSIONER KENNEDY:
Well, has that been raised as a potential condition for cooperation?
MR. KRATZER:
As a condition, I think probably the answer is no.
i As a desirata, I would say ever since the treaty has been in force, the answer is emphatically yes.
That has been done in varying ways and varying degrees of emphasis and I think with considerable success.
COMMISSIONER MASON:
Along the same lines, what has our government attempted to, short of NPT agreement by India, agree to the nuclear program, A, and B, their nuclear program?
MR. KRATZER:
Well, I can't respond fully to that question in this circumstance, but I guess it puts it in -- I guess impli-cit in my remarks there has been some breaching of that.
COMMISSIONER KENNEDY:
Mr. Kratzer, to follow this up a little bit further, the Department says in its submission that it gives appropriate weight to NPT adherence in negotiating I
218 provisions of new agreements for cooperation or amendments to could you describe how that weight actually existing agreements, is reflected?
influence specific provisions of the agreement?
How does it In other words, how is it translated into reality?
MR. KRATSER:
There has been, as I think you know, a or even relatively inactive negotiation of new agreements, amendments to agreements, in recent years.
The agreements which are cu'frently under negotiation, who are not parties to the agreements with Israel and Egypt, NPT, and Iran, which is, differ very, very markedly.
While there are many factors that go into that result, certainly one of them is the fact that there is a difference in the NPT status of the states we are negotiating with.
In other words, the agreements with Israel and Egypt on which negotiation essentially is complete are very, very strict agreements.
I repeat, I don't want to say that exclusively because of is the fact that the parties are not party to the NPT but that certainly a factor.
COMMISSIONER KESNEDY:
Is there a difference in the peace-3 ful purposes pledges by a country's adherence to the NPT and the kind of peaceful purpose pledge we have from India in your judgment?
When a country is party to the Non-Proliferation MR. KRATSER:
Treaty, then it, of course, by virtue of the treaty it:cif gives a pledge that the assistance, the assistance it requires, it is 1
i
i 219 limited to that, and it gives assurance that the entire nuclear program will not be used for nuclear weapons or any other l
nuclear explosive device.
As welcome as that provision of the treaty is, we do not rely on that exclusively in our agreements with parties -- with countries who are parties to the Non-Proliferation Treaty.
The treaty does have provisions for withdrawal which would not give us the protection we need as a supplier if they were to be exercised.
So whether we are negotiating agreements with an NPT party or non-NPT party, we must and do include in our agreements --
we undertake those guarantees that run directly to us, which are not subject to unilateral withdrawal.
Now, in our agreements for cooperation, until relatively recently, we concluded the so-called statutory guarantee; in other words, the guarantee of the exact language which is spelled out in the Atomic Energy Act and which requires the other coun-i try to assure us, to guarantee to us that it will not use our assistance, materials and devices for atomic weapons or for research on or development of atomic weapons or for any other military purpose.
l Now, we have interpreted that since many, many years ago as clearly precluding the use of our assistance for the nuclear explosive devices, even though they might be denominated by the builder for peaceful purposes.
We have done that among other bases on the proposition that the development of the nuclear weapons, the development of a
1 220 nuclear explosive is tantamount to the development of a nuclear weapon, whether the party so intended or not.
In other words, the device being indistinguishable, you the can't develop a nuclear explosive device without having at same time developed something which would be suitable for a nuclear weapon.
We have made that interpretation known both in a multi-lateral way, in the IAEA, and directly with other countries and with India, in a number of circumstances.
Beginning in 1974 we began a process of exchanging communi-cations with other countries which has been substantially com-pleted under which that specific interpretation has been provided to them and they acknowledged -- they have acknowledged it.
Now, in the most recent agreements which we are negotiating, the explicit prohibition against the acquisition and the use of our assistance for nuclear explosive devices, regardless of their intended purposes, is built right into the agreement.
Now, the situation with India is, again, a rather unique one.
Our 1963 agreement, the Tarapur agreement that we are dealing with here, as you know, contains a statutory prohibition that I read out a moment ago.
In other words, a prohibition against atomic weapons, or research on or development of atomic weapons.
COMMISSIONER GILINSKY:
Is there any real ambiguity in that?
MR. KRATZER:
Well, let's say it can be improved upon, it can be made more explicit.
221 The fact that we saw fit to do so in drafting a non-proliferation treaty I think speaks for itself.
COMMISSIONER KENNEDY:
Are there any other countries which do denominate a difference between atomic weapons and peaceful explosions?
MR. KRATZER:
Yes, I think there are.
Brazil has classi-cally taken the position that these two things are different, and this has been a stated reason for their refusal so far to adhere to the nonproliferation treaty.
COMMISSIONER GILINSKY:
Presumably this claim is based on a difference of intention as far as using the device?
MR. KRATZER:
It has to be.
COMMISSIONER GILINSKY:
But the objective facts are clear that certain devices are prohibited.
Then what is the difference?
MR. KRATZER:
The difficulty is introduced by the language i
of the Atomic Energy Act.
In other words.. by the definition of atomic weapons, which,
)
once again, is built into it, the definition --
I COMMISSIONER KENNEDY:
That was a reflection of the policy of this government at any point?
MR. KRATZER:
I don't think it was an intentional result.
COMMISSIONER KENNEDY:
We did have a peaceful nuclear l
explosives program, didn't we?
I MR. KRATZER:
But this is a definition built into all of 7
our agreements for cooperation, defined the Atomic Energy Act as any device utilizing atomic energy for means of transporting, I
o 222 will leave some of the words out, the principal purpose of which is for the development of a weapon, weapon prototype or device.
In other words, the test of purpose is built into the definition.
CHAIRMAN ROWDEN:
There was a history in terms of that Act, in terms of the amendments to deal with various programs that were carried out, but rather than casting an accusing finger at either the legislature or the lawyers, the draftsmen, can I ask what I think is a more fundamental question:
What is the commonly accepted understanding within the international community?
Is this a unilateral position we have advanced?
To what extent -- you mentioned Brazil -- do other countries insist en the distinction between atomic weapons, or IAEA -- not just the recipient countries but supplier countries as well?
I would like to have a little better understanding of that.
MR. KRATZER:
Let's start with the United States.
There is no question in my mind that it was our intention when we entered into all of these agreements, that they preclude the use of our assistance for the development of any kind of nuclear explosive device, regarding what its intended purpose was.
It's my belief that certainly since the beginning of the so-called peaceful nuclear explosives program which I will return to in a minute --
COMMISSIONER KENNEDY:
Let me ask.
In your judgment was that an unambiguous point from our perspective?
c f
I i
1 l
223 j
s MR. KRATZER:
From our perspective there is no question i
about it.
It really was a moot point.
In other words, it didn't really become even a potentiel i
issue until the development of the peaceful nuclear explosives program.
I can't put my finger on exactly when that took place.
I l
am sure that people can find those who foresaw, wrote about, spoke about the possible peaceful uses of nuclear explosives at a very early date, but my guess is, in terms of the real pro-(
gram, the real possibility, it didn't begin until sometime in j
the early '60s or maybe a bit later than that.
I think we began to focus on it as a problem when we drafted the nonproliferation treaty around 1956 or 1957.
CHAIRMAN ROWCEN:
Did that enter into the provisions of the treaty?
MR. KRATZER:
I think the limited test ban treaty is silent on any distinction between peaceful and military nuclear explosives.
In other words, it prohibits testing of the nuclear explo-sive in certain environments.
CHAIRMAN ROWDEN:
My recollection is there was some expla-nation given to it, because it cratering --
MR. KRATZER:
The major test ban treaty has had a major effect on the potential development of nuclear explosive --
i CHAIRMAN ROWDEN:
Was it in the mind of the :: entries that negotiated, in terms of what the various provisions should all w in this regard?
L.
224 MR. KRATZER:
Mr. Rowden, I am not clear.
I think if you look at the results, if you look at the limited test ban treaty on the face of it without knowing what was in the minds of the it couldn't have negotiators, you will reach the conclusion that been negotiated by people who foresaw and wanted to preserve possible development of peaceful nuclear explosives for most purposes, because of the provisions of the treaty as you know 1
are very strict and they limit the undertaking of any nuclear results in the transfer of radioactive debris explosion that across the national boundaries of the signatory country, which means that a very large class, not all, but a very large class of nuclear explosives, so-called cratering shocks, are pre-t l
cluded by that language of the treaty.
I have to assume there was no awareness in the minds of the negotiators, either that or a conscious desire --
CHAIRMAN ROWDEN:
You could read that the other way.
MR. KRATZER:
Yes.
CHAIRMAN ROWDEN:
So it could be that it wouldn't be a problem or even significant in negotiating.
MR. KRATZER:
I would assume there was something close to a lack of awareness.
CHAIRMAN ROWDEN:
The limited test ban treaty was when, f
1963?
i MR. KRATZER:
I believe, yes.
COMMISSIONER GILINKSY:
I think interest in the program, in the laboratories, was related to the limited creaty.
MR. KRATZER:
The limited test ban treaty?
3 225 l
COMMISSIONER GILINSKY:
Yes.
i l
MR. KRATZER:
Well, only speaking in terms of what you can infer from the language of the treaty, in point of fe.ct, the language of the limited test ban treaty has been one of the principal restraints on the peaceful nuclear explosives program.
COMMISSIONER GILINSKY:
That may be true, but other people j
saw the imminence of the treaty otherwise.
MR. KRATZER:
In any event, we did develop a peaceful nuclear explosives program in this country.
That is a histori-cal fact.
While it's in low level of support right new, it's my understanding it has not been completely abandoned.
So there is another use, other than military use, another purpose for nuclear explosives than exclusively a military one and that has been the source of considerable difficulty, a source of difficulty in negotiating the nonproliferation treaty itself.
It's addressed very explicit in Article 3, in the non-proliferation treaty.
J i
CHAIRMAN ROWDEN:
I think you may have lost the trend because of my interjection, but my question is in terms of the understanding of other countries, of the international community, as to the distinction or not, between nuclear weapons uses, and peaceful nuclear explosive uses.
What is the status of that understanding?
l l
f 1
226 MR. KRATZER:
Well, at the present time the understanding i
is very, very broad, but our agreements preclude the use of our assistance for peaceful nuclear explosives.
1 Specifically, the language that I cited.
That has been I
buttressed in I would say many, many casas by exchange of notes l
which make that interpretation explicit and where those notes 1
have been exchanged, we feel very strongly that not only the exchange of notes themselves about any future cooperation that l
occurs --
In other words, any further deliveries that take place in light of those -- that interpretation, further confirms that that is an agreement.
l CHAIRMAN RCWDEN:
The other major suppliers before the 1
i negotiation of the Non-Proliferation Treaty, did they accept l
l our position that there was no distinction in terms of their I
own nuclear --
l MR. KRATZER:
Before?
l CHAIRMAN RGWDEN:
You are describing the position on cur l
part which began to evolve, if, indeed, it wasn't expressed, before the NPT banned all nuclear explosions in this category.
Was this an accepted position within the international community?
MR. KRATZER:
Again, I think rather somewhat implicitly it If you consider the fact that T.ost but not all of the was.
major suppliers are also parties to the Treaty.
CHAIRMAN RCPTDEN:
The cuestion I am really asking, and ler me ask it directly, rather than indirectly, is, was the Indian position a singular one in this regard?
I 0
227 MR. KRATZER:
Not at all.
CHAIRMAN ROWDEN:
If it wasn't singular, was it widely shared?
Dit it have substantial support within the inter-national community?
MR. KRATZER:
The Indian position is not singular.
I men-tioned one other country that shares it to this day.
CHAIRMAN ROWDEN:
Mentioned one?
(
MR. KRATZER:
Yes.
And I think there have been others.
I would want to check that.
It isn't widely shared, but it cer-tainly exists, and to repeat, the interests which developed in the peaceful using of nuclear explosives, was widely shared.
Not the interpretation, not an explicit interpretation that the coun-try was entitled to build them under language such as we included.
CHAIRMAN ROWDEN:
The assertion has been made that the Indian interpretation is an unreasonable one.
MR. KRATZER:
Well, I think it is an incorrec't one.
l CHAIRMAN ROWDEN:
But reasonableness or lack of reasonable-ness relates not to the terms of the Atomic Energy Act but to the way other nations interpret it.
MR. KRATZER:
I think you have to keep in mind for most countries this was not a live issue.
Let me explain.
A number of countries, this by no means lim-its it, but a number of countries have at various times expressed a very real interest in the peaceful use of nuclear explosives --
COMMISSIONER GILINSK'l:
Wait a minute.
They asserted a right, in effect, to use our material for so-called peaceful nuclear explosives, ma'terial which was subject to the agreement, and to say that that is not unreasonable is, I think, going
228 e
is there any question that we would consider pretty far.
I mean, a violation of this agreement?
that all.
MR. KRATZER:
Absolutely none at there was Or any other case, where COMMISSIONER GILINSKY:
an NPT party to an agreement?
this is our inter -- our MR. KRATZER:
I again repeat, interpretation of this language is completely, as far as we are exception, and any absolutely essential and without concerned, treated as a very serious violation of this language would be violation.
What troubles me is that in one COMMISSIONER GILINSKY:
use of the U.S.
heavy case where there was a clear violation, I find that a very water, we seem to have looked the other way.
troubling matter.
I wanted to complete my description of the MR. KRATZER:
because it is a complicated one.
situation with respect to India, the 1963 Tarapur agreement, We have an agreement with India, We have interpreted this.
which contains statutory language.
We feel this is absolutely without exception, as precluding the use of our material for nuclear explosives of any kind.
Now, we also had an agreement with India relating to the which contain this language, supply of heavy water, which did not
! think it has to be said, contained language which was broader.
which was more ambiguous, in other words, for peaceful purposes.
It could not contain the language, not for atomic weapons or I think, research on or development of atomic weapons, which, clearly provides a more substantial basis for the interpretation --
229 COMMISSIONER GILINSKY:
But was'there any real question at the time that was entered into, as to what that meant to exclude?
MR. KRATZER:
I think the question, as I tried to say earlier, may be moot in form, because that is the wrong word because that implies the question existed, then was later dis-posed of.
The question didn't arise.
I think that is the only fair way to describe it.
I don't think it is in the mind of the negotiators of that agreement, 20-odd years ago.
This could be their weakness.
But I don't think it is in the mind of the negotiators of that agreement on either side, that there was another class of i
l uses fi nuclear explosives, which they were failing to deal
- with, think that is the only way you can honestly describe l
I i
l the si uation in 1966.
COMMISSIONER GILINSKY:
Well, but what we have in this case is not a class of uses but research into the development of an explosive, which in no way would differ, whatever the purpose of that explosive is.
It is very clear, it seems to me, when l
we entered into these agreements that that was what it meant to preclude.
MR. KRATZER:
I don't think it was clear in 1956, Commis-sioner Gilinsky, for the reason I cited.
In other words, the program hadn't emerged.
I do not think it was in the minds --
COMMISSIONER GILISSKY:
No.
I am not talking about the so-called peaceful uses of explosives.
I am talking about the development and test of an explosive device.
I think it was
I 230 that was precisely what the pretty clear at that time that agreement was meant to preclude.
If anyone at the time were is it you are trying to leave out in this agreement, asked, what they would say precisely this.
it would seem to me, MR. KRATZER:
Are you referring to 1956?
COMMISSIONER GILINSKY:
1956 or any of our agreements referring to peaceful uses.
MR. KRATZER:
If you identify the question, in other words, the time, to the responsible if you said to the negotiators at parties at the time, "Do you realize that there is another possible - "
COMMISSIONER GILINSKY:
But why get into that?
What is it you are trying to leave out of this agreement?
It would seem to me that both parties must have been pretty clear or entirely l
clear, that what was left out of that agreement was explosive devices.
MR. KRATZER:
Well, I can only --
1 COMMISSIONER GILINSKY:
I can't imagine that the American side entered into it with any other thought.
MR. KRATZER:
I think what they wanted to leave out was nuclear weapons and I don't think they made any distinctions.
COMMISSIONER GILINSKY:
Right.
And we up to today have l
not made a distinction.
Why should we enter into this other view of the matter, which I regard as rather contorted and to view it as if in a strange mirror?
MR. KRATZER:
I am trying to describe there was another view, that of India --
231 4
CHAIRMAN ROWDEN:
Are you talking about 1956 or 1963?
I MR. KRATZER:
I think, as far as India is concerned --
CHAIRMAN RONDEN:
Their position, as I understand it, has been consistent, as you described it yesterday in this regard.
MR. KRATZER:
I think, as far as India is concerned, a nuclear explosive device is defined by its intended purpose.
CHAIRMAN ROWDEN:
The position of this country had been an evolving one.
If I may just pursue the thought, there was a difference, as you have described it, between the situation in 1956 and the situation in 1963, with regard to our position, as to the clarity with which those with whom we had dealings, should appreciate that we did not draw the distinction between strictly military operations and so-called peaceful nuclear applications.
There was a time threshold there that we crossed, where our understanding and the understar ding of the inter-national community was such, that we had vigorously pursued our interpretations of the 1963 agreement as embracing both kinds.
I want to get an appreciation of what you are saying.
MR. KRATZER:
The language which appears in the 1963 agree-ment, along with other agreements, we have vigorously asserted our interpretation and we have -- there is no flexibility.
COMMISSIONER KENNEDY:
As we discussed yesterday at some length, the fact remains, there is simply an unresolved dif-ference of view.
MR. KRATZER:
That is right.
I would like to say there was no difference of view, but I can't -- well, we have made the obligations of India under the 1963 agreement unambiguous, in
{
I
232 e
by another way, namely, by the way that I described to you, for one specific pur-limiting the use of the derived material, pose, except for argument to the contrary.
With CHAIRMAN ROWDEN:
I am going to make a suggestion.
I would like to call a the indulgence of the participants, 10-minute recess at this point.
(Recess.)
CHAIRMAN RONDEN:
We will reconvene now.
Commissioner Kennedy.
COMMISSIONER KENNEDf:
Mr. Kratzer, if I may, I would like to turn to slightly different points.
Yesterday there were two I wonder if I could elicit points made which were interesting.
comment from you on them.
One, Mr. Scoville noted that in the they com-Department of State's submission to the Commission, mented on the effects on a substantial block of Indian popula-tion were the license not utlimately to issue.
Thus, perhaps, the reactor might be shut down and loss of power would result.
and I would like to quote what he said, He also commented that, "I think it's important that the Indian government and the Indian people be made to realize that their decision to acquire f
Other coun-
{
nuclear explosives is one which involves hardships.
f tries around the world have got to realize this same problem of
)
i acquiring nuclear explosives.
They are going to have to pay something for it."
o the instant case -- the End of his quote.
Now, as Indian matter -- first, would you comment on any extension of t-
i 233 e
I the remarks which were in your submission on this, and then would you give me your views, that is, give the Commission your views on this representing the Department of State?
MR. KRATZER$
Well, I think the point that governments and populations should be aware of the cost of pursuing nuclear explosive programs is certainly a valid one.
We have pursued that approach for a long time.
In other words, we have, both in bilateral conversations and public presentations on various occasions, we have made clear that this is a very costly thing to do and that it can very easily, almost inevitably will detract from development goals that many countries are pursuing.
Now, having said that, I have a very serious doubt that this is a good way to bring that message to either the Indian government
)
or the Indian people.
In other words, by withholding that license.
And I also would want to say that I don't think it's our policy to want to work to the disadvantage of countries which obvisouly are in rather great need of many fundamental necessities.
Now, having said that I want to stress that our fundamental reasons for favoring the issuance of this license are not because of the beneficial effects, even though they are substantial, of these reactors in India.
It's because we feel that the issuance of this license for the many reasons which I cited yesterday does serve our nonproliferation objectives and denial of a license t
i l
would in fact set those back.
I So in this case there is not an inconsistency between our objectives but certainly the controlling policy considerations I
i 234 l
here are those related to nonproliferation and not to a feeling J
in of obligation to contribute to Indian economic development i
this particular way, even though we are anxious and hopeful that the process of development will go forward.
COMMISSIONER KENNEDY:
I think that is a helpful clarifica-tion.
I appreciate it.
But can we take it just a little bit further.
Some argue that it is precisely because we find our-selves hostage, I use that word because others used it, I am not expressing a view here, that has been expressed by others, we that we find find ourselves hostage to nuclear power programs, ourselves in a situation at some point where we no longer can pursue our nonproliferation objectives without causing serious damage in broader relationships, economic, political and others.
Would you comment on that, again thinking in terms of the t
instant case?
MR. KRATZER:
I tend to feel the reverse is more nearly'the case.
In other words, as nuclear power becomes an increasingly import factor in any given country's energy balance, that coun-try, I would say is a hostage, other than to use the word that others have used, that country would have to think very long and hard before taking steps to jeopardize that segment of their energy economy.
This has been a consistent element of our view of nuclear cooperation and I think it's a sound one.
I don't believe we are being influenced here, I can only return to what I said a moment ago in reaching our decision by the fact that
235 o
introduction of these supplies would be damaging to the Indian I don't believe our decision is controlled by that.
economy.
We were asked for this information and we provided it.
I don't think it's significant or inconsequential.
COMMISSIONER KENNEDY:
To go to your point, looking at it from the recipient's point of view, one might suggest indeed that the obverse of this postulate is really the case.
In many, if not all cases, the other country finds itself in a situation where it's constrained not to do things which would be incon-sistent with its obligations.
Is that the case in this situa-tion?
Isn't it just the opposite?
MR. KRATZER:
I don't think so.
Again I stated yesterday, and I haven't changed my view, I believe the Indian government is meeting and is prepared to meet its obligations under the agreement.
I think one of the reasons for that is because of l
the dependence on that particular source of power, although I l
think it has many other reasons for meeting this extremely important obligation, and all of those would enter into its l
calculations.
COMMISSIONER KENNEDY:
But it did not inhibit the 1974 f
event.
l MR. KRATZER:
Well, once again they have a different view of those obligations and I don't think they can have a differ-i ent view of this obligation because I think it's expressed in absolutely unambiguous terms.
COMMISSIONER KENNEDY:
Turning to a different point made yesterday, somewhat related I suspect, Mr. Marcy commented on
236 the Department of State's view that a delay or denial of the a
shipment of the material associated with this license would have a substantial adverse impact on our relationships with India.
His comment was to the effect that it wouldn't irre-parab,1y damage our relationships with India at all, particularly so since we had terminated foreign aid discussions with India, than they and our relations seemed to be not much different were in the beginning, before that had occurred.
Would you comment on that?
MR. KRATZER:
Well, I am advised that there has in fact since been a very substantial adverse effect on our relations, I
the date of and presumably as a part of the cutoff of aid.
note Ambassador Saxbe was here.
You all know he is here.
He came for the purpose of inquiring into this matter, which I think speaks in some considerable measure to its importance in his views to our overall political relations with India.
this would be My understanding with those at the scene, regarded as quite a major factor in our relationships.
COMMISSION MASON:
As major as cutting off foreign aid?
MR. KRATZER:
Well, I don't -- I think we really ought to --
I believe based on the advice we have received from political advisers in the Department, that it is very major, whether you can equate it with that because there are different kinds of things, it's a hard question to answer and I prefer not to expand on our reply for the record.
COMMISSIONER KENNEDY:
I want to be sure there would be an expansion of this, because the record in this proceeding right l
i I
C
~-
237 J
now indicates two views, one of which is challenging the other.
I guess we are trying to find out as best we can --
MR. KRATZER:
I don't want to minimize the importance of the question and we will expand on our answer but I want to put it in the same perspective we put our relations on the question of the economic impact of this decision on India.
Our control-
. ling reasons for recommending the course of action that we are recommending, in other words, approval of the license, are not related to those other considerations, even though they are important.
The controlling reasons relate to our nonproliferation policy as it affects three classes of countries that you iden-tified yesterday.
COMMISSIONER KENNEDY:
In that precise vein then, I realize there has been a good deal of discussion of this over our ses-sions yesterday and again this morning, but I would like to focus on it just once more.
Could you say something, your views of how the issuance of this proposed license might or might not have been seen as discriminatory by nations wnich have voluntarily adhered to the NPT.
In other words, here is a license being l
issued to a country which is not an NPT member, a country which in fact has, unlike any others, exploded a device.
Yet it is still being given the ber.efit of our fuel.
Will others see t
that as a discriminatory act against them?
Let me point out, there was considerable testimony to the effect that it would be seen this way.
239 4
I celieve that those countries will have to ME. KRATZER:
make the same sort of balance.
I think they are quite capable of doing it in a sophisticated way, that I think you as a Commissioner are called upon to make.
I think that they will undoubtedly identify the factor that this cooperation and future deliveries under this cooperation is available to a country which hasn't taken the same pledge that they have, that self-evident fact, but I think they will also take into account the fact that the action is taken, would be i
and that it taken, because it represents a prior commitment, represents the same kind of commitment, in many cases, entered into prior to their own adherence to the nonproliferation treaty, I
l l
that they are benefiting frem.
I That the validity, the continuing validity of those matters j
l is important to them and that is the principle being upheld.
I l
l think they are fully capable of reaching that.
CHAIRMAN ROWDEN:
Rebus sic stantibus to the contrary.
MR. KRATZER:
I have been informed what that means.
COMMISSIONER KENNEDY:
Would you inform us?
MR. KRATZER:
I even have a brief on it.
It means a funda-mental change in circumstances.
That was treated in page 21 of our supplemental response of March 19.
I think, as a layman, I am going to fall back primarily --
l CHAIRMAN ROWDEN:
Speak as a diplomat.
MR. KRATZER:
Only the rather lengthy treatment of this in our March 19th submissi6n, which concludes that it is not applicable to these circumstances.
1 b
e l
239 r
l l
I would refer you to the submission, rather than my own, but from a policy point of view, I believe that has a simple 1
answer.
We did act, and I pointed this out yesterday, we did act following the 1974 event.
Whether it meets the legal test of rebus sie stantibus, I am not prepared to say, but it was obviously an important event, ano it was dealt with as such, and we have done something which we have not done before or since, we interrupted deliveries to India.
We have resumed them.
We reached an agreement and resumed them.
Again, as a diplomat, speaking from the policy point of 1
view, if that doutrine was clear, I think we have overcome it.
There was a subsequent reaffirmation of commitments and subse-quent strengthening of understandings after the '74 event, and nothing has occurred since then th.t fits that definition, because it could change an agreement which we clearly intended to and did reaffirm in 1974.
I think that is extremely relevant.
I think, again, I think countries who are watching us, I am in complete agreement with the various members of the public groups.
I think countries are watching this.
I think the fact that we had a reaffirmation l
Q in 1974, that we deliberately decided anew, after that event, l
to resume deliveries, will be taken into account.
That is the l
I commitment that they will have there -- they may even disagree with the decision in 1974, but I think they would be concerned about it, if the 1974 agreement was disposed of in 1976 without l
l anything having happened.
f l
l i
w
240 COMMISSIONER KENNEDY:
Thank you.
I appreciate your candor.
The last day and a half, and in fact, COMMISSIONER MASON:
in our discussions before this, we have been addressing the question of under what circumstances could the U.S. continue to export this fuel, XSNM 845, to India without increasing the irradi-likelihood that the plutonium which would result from the ated fuel might be diverted.
One is, of course, that the fuel would be reprocessed at the Tarapur station and put back in the reactor, or the plu-or returned to the United tonium put back in the reactors, the and that addresses the question of safeguards at
- States, Tarapur station and over the plutonium while they are in the reactor in transport back to the U.S.
Another option which we heard considerable discussion about is the return of the irradiated fuel to the United yesterday, States.
There is a third option which I don't really believe is an is to leave the irradiated fuel at Tarapur for option.
That Ultimately it will have to be destroyed, the indefinite future.
and I believe those buried or returned to the United States, and about persons who have expressed concerns about this fuel, would have the same concerns if the fuel the plutonium in it, were not ultimately returned to the United States.
and looking to the long term, Forgetting the short rerm, d
the solutions are either repossessing under adequate safeguar s I have or returning the fue~. to the United States.
in India,
l 241 i
some questions relating to this background.
And I am pleased to see Mr. Davies has returned, because I am going to refer to l
a statement which he made yesterday which Mr. Kennedy already referred to today.
Do you agree with the statement made late yesterday after-noon by Mr. Davies from the ACDA that this license can wait until the Executive Branch is able to undertake, to arrange for the return of the fuel to the United States?
It is a multipart question.
If you do, do you agree with Mr. Davies that it might take a couple of months?
MR. FRATZER:
I want to say that, while we probably might j
have expressed ou:selves somewhat differently, don't you believe there was any disagreement in the final result between what I said and what Mr. Davies said.
I think that furthermore is highly consistent with our submission of July 8th in which we said that we expected to inform you of the progress on this dis-cussion with the Indian authorities, in cannection with the cur-rent license application.
Mr. Davies, once again, and I do have the benefit of the transcript here, he did not say that we would have completed these arrangements within a couple of months.
He was careful not to say so, but only that we could report back to you within that period of time.
l I think that that is correct.
I think this has been fur-ther clarified by the questions which were raised this morning about the timing on which this decision is required in opera-tional terms, and they all fit together.
l t
242 In other words, there is an apparent need for delivery around November.
That is more than a couple of months away.
We have every intention of having discussions of this sub-ject with the Indian authorities within that time period.
COMMISSIONER GILINSKY:
And you will analyze the need for the fuel in November?
MR. KRATZER:
Yes.
We certainly will do that.
COMMISSIONER MASON:
As I indicated yesterday, I am con-cerned that this Commission really can only consider feasible I believe that the feasibility of a buy-back alternatives.
arrangement goes beyond mere discussions or even agreement with the Indian government.
There will be agencies, parts of the U.S. government, other than the Nuclear Regulatory Commission or even the Department of State, which undoubtedly will get into the act.
We heard a Congressman indicate yesterday that he thought it was quite prob-able Congress would have to take action.
Predicting what Congress will do in any given instance is fraught, let's say, with difficulty.
So that is certainly an I think this Commission needs to consider defini-uncertainty.
tive action on this license, in the light of these uncertainties.
I agree with Chairman Rowden's comments that we should not be intimidated by the difficulties.
On the other hand., I don't think we can ignore them, nor can we refuse or refrain from getting information which will indicate the full extent of the difficulties and the possible remedies for these so-called difficulties, if we really hope to reach a rational decision J
I I
l 243 i
regarding a plan which is capable of implementation.
This is necessary because we are admittedly exploring a rather attrac-tive alternative to the problems.
Are there other initiatives which are being explored in the event that some hitch develop, either within the Indian govern-ment or within our own government, so we won't be doing this in l
tandem fashion month after month, exploring one possibility after another?
Or do you feel that the probability this alter-native will go through is so high that we don't need to explore any others?
MR. KRATZER:
I think internally we certainly are and will be exploring other alternatives.
I think it's by far the best way to proceed, since we are I
in agreement that this is an attractive one, the most attractive i
one, is to pretty much confine our initial discussions with the Indian authorities to this one.
I think Lt would be confusing to approach it otherwise.
I I
l l
want to reiterate what I suggested yesterday.
That is, that there is even acknowledging the very significant problems, and i
I think the interesting ones, I think you can distinguish between the reaching of an agreement and the solving of all of the problems which has to be solved, many of them domestic, to put it into effect.
I also feel that one of the things you will certainly want to consider, I think we will certainly want to consider, is whether or not progress itself in these discussions doesn't pro-vide a basis for your decision-raking process.
244 i
i I would assume that the best way to take advantage of the progress being made, in other words, ultimately to reach an agreement, is to maintain the kind of relationship which makes that possible.
I think, very frankly, we couldn't have the discussion which we are about to have, to embark on, had the earlier license not been issued.
While I certainly understand and agree that the discussion process can't go on indefinitely and form a basis for continu-ing to ship fuel, I think as long as those discussions are going on constructively, that is a very important consideration for us to take into account.
We hope that you would think so, too.
COMMISSIONER MASON:
Well, in the past, the State Depart-ment made statements about the necessity for shipping the fuel, if the license was to be granted on a timely basis.
The date used to be the first of September; now I hear sometime in November.
I am concerned that the necessary information ce obtained and provided to use on a timely basis so that we aren't always in the position of being the bottleneck in this decision.
We need certain information to go ahead.
I believe the question was asked in a somewhat different way.
One of the options, which remains in the agreement is that the fuel might be reprocessed in India at the Tarapur station under mutually agreeable safeguards.
Could you give us a better statement as to when the State Department or executive branch
[
l 245 would undertake consideration of th'e safeguards under whic'h the r
fuel might be reprocessed at Tarapur?
MR. KRATZER:
I think that is one of the things we will certainly be looking at internally.
l We would want to consult with the NRC staff on it, the NRC, l
but I think obviously no decision would need to be made on that
'f the other alternative is adopted and I think we prefer that l
we place most of our emphasis on the other alternative.
In other words, the alternative of return.
COMMISSIONER MASON:
Since we have returned to that alter-native, let me be more specific.
You have indicated you don't think it's necessary to have the whole plan, packaged and wrapped in a bow tie, but some agreements should have been reached.
Would you go so far as to 1
say, that if Congressional action is required for authorization i
l or appropriation draft legislation should have been drawn up by the time this Commission considers this?
This would have involved at least some staff work on the part of the Congress.
MR. KRATZER:
We have no control over this decision, over
(
their actions.
Legislation is often drafted in the executive branch, and I would think that if our explanation indicates there is a need for legislation, it would certainly be -- the identification of that need and some drafting on it, would certainly be a reason-able thing to do, within the time scale we are talking about.
In other words, within the time scale of the decision making on this particular application.
l
246 I don't know whether it's necessary and I don't think that that will turn out to be the most difficult or controlling fac-tor in the overall implementation of the understanding.
I may be wrong.
COMMISSIONER MASON:
It may affect the feasibility.
It may not be the most difficult, but should that be required and should it be C.eemed necessary that a good estimate of the feas-ibility of this alternative be given before fuel is shipped to I woulo urge you to India, then it could become a pacing item.
give full thought to that.
There is already underway an exploration MR. KRATZER:
within the Administration of just those things.
What are the technical, what are the administrative, what are the financial problems.
We know some of the answers.
The specific item of legis-lation I frankly haven't seen a ruling on, but it clearly has to be covered.
COMMISSIONER KENNEDY:
When you say within the executive branch, can you be a little bit more explicit?
Who are these nebulous people who are the executive branch?
For the record, please state who they are.
MR. KRATZER:
All right.
It's really three agencies.
State, ACDA and ERDA.
I couldn't name all the people that are involved, but includes myself and members of Mr. Davies' staff and members of Mr. Sebrings' staff.
COMMISSIONER KENNEDY:
Thank you.
1
247 0
COMMISSIONER GILINSK'?:
I am a little concerned that you are suggesting we are going to have fuel these negotiations.
Regarding the cut-off of fuel after the explosion, in May of 1974, in fact we sent India a shipment of fuel less than a month after that.
I wonder whether that didn't play a role in our ending up with kind of a second best fix on our agreement, rather than having explicitly resolved our concerns?
MR. KRATZER:
Well, I don't know.
I can only speculate as to whether it played a role and whether it was affirmative or negative.
The fact is, there was a partial shipment of some material that had been licensed and was awaiting delivery, but there was a suspension of deliveries.
With that exception, it was a complete one but it did have that exception.
I don't know how to answer the question, as to whether it helped or hurt.
These are very difficult situations to resolve.
CHAIRMAN ROWDEN:
A couple of concluding questions, Mr. Kratzer.
One aspect of Mr. Davies' response to an inquiry which I began yesterday, has been referred to.
I would like to refer to a previous portion of his response, in which he said, I think, "it's our position" -- and I assume he was talking for ACDA at the moment -- "that the optimum way to settle the processing is to arrange for the return of the fuel, in order to avoid any
243 We agree on our view on dangerous accumulation of plutonium.
plutonium accumulation, but not on the optimum way of doing Without going into the accuracy of the transcription, that."
Is that I believe that reflects the substance of his response.
the position of the executive branch?
MR. KRATZER:
Yes.
We are talking about the plutonium COMMISSIONER KENNEDY:
I wasn't quite I had some difference in my own mind.
now.
clear.
Were we fixing on the plutonium or were we thinking of fuel package?
plutonium or the whole spent I think it's clear that it would be MR. KRATZER:
- Well, preferable for the spent fuel to be returned.
if that doesn't prove to be I don't think it's clear that, the return it wouldn't be interesting to bring about achievable, of separated plutonium.
COMMISSIONER GILINSKY:
But in that case, you will have provided an incentive all over the world for co:.itries to build they can reprocessing facilities, and if worse comes to worst, always sell the plutonium to the United States and thereby make an uneconomic operation pay for itself.
Now, we are going around trying to discourage this.
if we It does seem to me it would be entirely inconsistent permitted this material to be reprocessed and then purchase the plutonium, thereby creating a market for this material and mak-before.
ing the market economic where it was not a
I 249 9
MR. DAVIES:
My own version of these words, I meant the use of the word plutonium to refer to the plutonium in the spent fuel.
In the spent fuel form.
l Now, there are other things you can do with it, but that is what I was thinking of at the time.
COMMISSIONER GILINSKY:
Leaving aside the dangers of having the plutonium there at all, I think it would really be contrary to what one is trying to do everywhere else.
COMISSIONER KENNEDY:
For clarification purposes, if I understand this up to now, what you are saying is, by all odds the preferable course is the return of the spent fuel.
COMMISSIONER MASON:
Unprocessed.
l l
COMMISSIONER KENNEDY:
Failing that, for whatever reason, as a minimum you would wish to at least return the plutonium.
Of course, that leads to the problems which Mr. Gilinsky I
suggests.
I COMMISSIONER GILINSKY:
The other alternative is just to have it sit there for a while.
MR. DAVIES:
Yes.
I was going to say I don't think they follow in that sequence.
If at some point if we were faced with a stock of plutonium l
sitting somewhere we could buy back, we would certainly want j
to do it.
But the way Commissioner Kennedy outlined it, failing that, there are steps like ownership of our fuel, even though it sits in India, but under our custody where they couldn't get at it so to speak.
L
250 in a sense is a prelude to a fur-CHAIRMAN ROWDEM:
That ther question I have.
You may recall, Mr. Kratzer, during yesterday's discussion you mentioned one sentence in the Executive Branch position, which you said didn't reflect a unanimity of views.
you asked permission tc withdraw that As a matter of fact, particular sentence.
recognizing full well the provisions of the As you know, Executive Branch, which relates to the submission of Executive Branch matters to us, we are interested in knowing when there is a diversion of view, particularly on significant points you may within the Executive Branch, even though, of course, use the procedure for resolving those differences as prescribed I am interested in being advised, and in the Executive order.
of any areas where there is my colleagues share that interest, a significant disagreement or there are different positions in connection with the submissions of the Executive Branch and what I
those areas of disagreement may have been.
If you wish, you can address them here.
and make whatever You may wish also to reflect on that written submission you wish.
t I think I can assure you at this time that I
MR. KRATZER:
and that particular sentence, whose inclusion was inadvertent, in meeting a time deadline, under very difficult circumstances, was the only sentence that should not have been in there.
I i
251 In other words, this is a complete document with that exception, and that is now, with your permission, no longer to be regarded as in the document.
I think Mr. Davies can confirm that.
CHAIRMAN ROWDEN:
So say you all.
All right.
One further observation before we give you a well-earned respite.
The agenda for the balance of today's session, which real-istically I think we can expect to conclude the oral hearing phase, includes, I would contemplate a presentation by the NRC Regulatory Staff before the recess which takes place shortly after noon, by Mr. Greenberg, on behalf of the NRDC, Sierra Club, Union of Concerned Scientists, at the outset of the after-noon session, which we expect to convene at 2:00 o' clock, and summations which may or may not be accompanied by questions by the Commission.
I would like to emphasize not only to you but to the other participants the importance of the summation.
This is your opportunity not only to draw together in sum-mary form what you have already told us, but to take into account what certainly thus far have been and I would expect to continue to be, very cogent presentations by the other partici-l pants here, and to leave that last vivid impression with the i
Commission of your distilled wisdom.
I would like to urge in particular, and in the context of your remarks yesterday about the need to balance the benefits and risks of following one course of action as contrasted to another, that you pay particular attention to that and deal with
252 referred least the two different levels to which I it also at yesterday.
That is, what safeguard and non-proliferation risks and benefits would be associated on one hand with the grant of a license and on the other hand with the denial of a license application which we have before us.
I also ask that you address those same aspects in connec-tion with the posture which we would present to other nations within the international community, as respects those same con-siderations, safeguards and non-proliferation.
With that enjoinder, I thank you very much for a ry cogent presentation.
MR. KRATZER:
Thank you.
We will hear now from the NRC Regulatory CHAIRMAN RONDEN:
Staff.
STATEMENT OF MICHAEL A.
- GUHIN, OFFICE OF INTERNATIONAL PROGRAMS, NRC.
MR. GUHIN:
Mr. Chairman, Mr. Commissioners:
I am pleased I
to have this opportunity to consider the variety of viewpoints and statements presented thus far in these hearings and those made available to the Staff earlier.
I am also pleased to present my own views on behalf of the NRC Staff and to answer any questions which the Commission might have regarding them.
I would like to note that a good portion of m with, To begi.
my past seven years have been focused on nuclear non-proliferation on the security risks associated with expanding nuclear
- problems, and on the necessity and indeed the urgency of energy programs,
253 taking appropriate steps to minimize these risks to the greatest extent possible on the international level.
prior to coming to the NRC Staff I spent a year's leave of absence with the Council on Foreign Relations International Affairs Fellowship program, during which a large amount of that period was spent working on these very problems and preparing an essay looking toward various steps which might be taken to minimize the risks associated with the peaceful uses of nuclear energy.
i As you know, prior to that time, I spent five and a half years, from March 1969 to October 1974 working on the National Security Council staff where one of my major areas of interest was international atomic energy affairs.
To begin with, I would like to focus on the objectives which are shared among everyone I heard speak thus far and which I fully share.
These include widest possible adherence to the NPT, the widest possible application of IAEA safeguards, nuclear supplies restraint, especially in sensitive technologies and equipment, and various approaches such as multinational regional fuel cycle facilities designed to lessen safeguards' costs and problems.
In contrast to the several presentations which have been given, my support for these various objectives does not lead me to conclude that the NRC should deny or tie or strictly condi-tion issuance of this license to the conditions which have been suggested in several submissions:
namely, adherence to the NPT, application of full fuel cycle safeguards, the renunciation of r
254 and renun-any nuclear explosives program for whatever purpose, ciation of the option to conduct any reprocessing.
as I l
Those are conditions which have been suggested, and, have said, thus far I have not concluded that this license or issuance of this license should be tied strictly to such conditions.
CHAIRMAN ROWDEN:
Is there any significance to the term
" strictly"?
MR. GUHIN:
I think perhaps. tot.
To condition a license is to condition a license.
It is to say that the license would not be issued unless and I would eliminate one or more of these conditions were met, the word " strictly."
COMMISSIONER GILINSKY:
You take a sanguine view of the matter.
MR. GUHIN:
Sanguine in what respect?
COMMISSIONER GILINSKY:
You seem to support this in an unqualified manner.
MR. GUHIN:
No.
I think I will get into that later on.
COMMISSIONER GILINSKY:
You mean to support it unqualifiedly?
MR. GUHIN:
In terms of our own examination, I think it is fair to say that we have come to the conclusion that, at this point, we see no basis which would preclude us frem making the determinations necessary to the issuance of the license.
Now, whether or not one wants to pursue what could be termed the as preferable courses such as have been discussed here at table or preferable outcomes either for this license or other
\\
1
r 255 l
l licenses, I would like to note that if this license were issued it is not the only license one can forecast for Tarapur.
l But if one wanted to pursue those courses, some of which I think are advisable and others of which I think are not so advisable, then these indeed should be pursued and should be pursued wholeheartedly through the appropriate channels.
This obviously could facilitate licensing to the extent they could give us additional assurances and to the extent we consider these assurances advisable or good to have, the staff fully supports them and indeed we should not be lax in seeking them.
COMMISSIONER KENNEDY:
Can I be sure of what you are say-ing, Mr. Guhin?
You say that there may be desirable courses to be pursued, now or in the future.
You are also saying that the license in question, XSNM-845, can, and in your judgment should, be issued without regard to pursuit of those other considerations or options; is that correct?
COMMISSIONER MASON:
Can I ask an alternative question?
Are you saying there may be desirable things that can be done but they are not necessary for the issuance of this license, desirable even for this license, which is a slightly different twist?
MR. GUHIN:
If I may, I think we have to look at this in broad context and one has to take into consideration all the l
factors in the broader picture which relate to issuance of i
this license.
l l
256 4
One of those is a question of reprocessing.
That question is yet to be resolved.
I think the buy-back option is one that has yet to be looked into deeply and, subsequent to that, resolved one way or the other.
I am indeed saying two things:
one, we have to look at the question of plutonium management control, obviously in the case of issuance of any license to India.
But as the situation stands today, assuming that things are moving in a good direc-tion, and in this sense I can understand why one would want to see what progress has been made or if they are indeed moving in any direction, we do take the position that it need not be conditioned -- this license need not be conditioned on the resolution of the details of the reprocessing question.
COMMISSIONER KENNEDY:
So progress or no, you would say that the license should be issued now.
That is the question.
MR. GUHIN:
I think if you register no progress, that can be considered a change in the circumstances which surround the license.
I think the NRC Staff would feel free at that or any stage to reevaluate its position.
COMMISSIONER GILINSKY:
You are ready to issue the license today, in effect?
MR. GUHIN:
Am I ready to issue the license?
COMMISSIONER GILINSKY:
Do you recommend it be issued?
MR. GUHIN:
I think this brings me back to the first question.
I don't think'rhere is any urgency, and I would not, if asked, l
recommend that it be issued today.
I would not say that it should be or need be issued today.
e a
257 COMMISSIONER KENNEDY:
What is it that is going to change that, and at what point?
Let's start from today.
You wouldn't issue it today if you were asked your own view.
What about tomorrow or next week?
When do you change your mind, and on what ground, is the question.
MR. GUHIN:
In this sense:
I think there have been a lot of questions which have been raised regarding the problems of plutonium management or plutonium control in our spent fuel.
l I think that we should at least get some further informa-tion.
It is advisable, since there is no urgency behind the l
license at this stage, to get some indications as to possible ways of handling this problem.
At this stage I am not prepared to say what is the best i
, ay of handling this problem.
w CHAIRMAN RONDEN:
Let me make an observation.
I think it draws upon our experience and what we expect of Staff regulatory proceedings, where the Staff takes a position one way or the other, but always reserves to itself, as we would expect it to, the opportunity to review the record when it is completed and to re-think its position, if necessary, and so to advise the presiding tribunal, which in this case is the Commission.
I would expect -- and I would think, as a matter of fact, it is a very sound course of action for -- the Staff since we have asked it to do so, to state its position now and, at the same time, to recognize that the record is not as yet complete and that our staff has a special obligation to this Commission
258 4'
which we would expect it to discharge by the submission of any further views when the record is complete, including progress, such as it may be, on the matter of buy-back of spent fuel.
MR. GUHIN:
We will, of course, Mr. Chairman.
If I may comment on that, I have noted that we feel an obligation to constantly reevaluate new factors and aspects these to the Commission which may come into play, and to report in terms of our own evaluations and conclusions.
The record on this matter is not complete, as you noted.
if I were asked if I would issue the license In this sense, today, my response was very simply no.
Looking at the "before" record does not preclude looking I think one at some of these other issues and other question.
If the Staff feels obviously has to be careful in this too.
it can make the necessary determination and a recommendation, e
and at some stage it were inadvertently coming into a breach of a good-faith undertaking, we would equally feel obligated to come through and say, "We feel we can make that recommendation in all good faith."
COMMISSIONER GILINSKY:
Were you in the position of having at this point to make a recommendation on the license?
Does the review process, in effect, put you in that sort of a position?
This isn't an adjudicatory proceeding, and therefore I won-der if it might not be more helpful under similar circumstances if the Staff simply had an opportunity to wait until the end of the proceeding before giving the Commission its advice, i
I 259 CHAIRMAN ROWDEN:
This is another possibility which we might want to consider in the future.
In this case, they responded to what they felt was a polite request, but nevertheless, one that reflected an offer they couldn't refuse.
We are primarily extending the offer to the end of the proceeding and giving you the opportunity to assess the record.
MR. GUHIN:
As I stated before, I will be brief in my com-ments so we can get to further questions.
My support of the previously stated objectives does not lead me to the conclusion at the stage that the license should be denied.
I believe denial of such action would be inappropriate and unjustified at this time.
As I have noted in my earlier sub-missions, it could prove to be a disservice to the various objec-(
l l
tives we all share.
Before expanding on this conclusion, I would like to make a few brief comments about the written submissions and oral submissions we have heard.
think it goes without contention that probably no other t
l I
export licensing process has had such widespread participation and, I would say, such a voluminous amount of historical and research data done in all its aspects, as far as various situ-l ations which may bear on the case.
I find it striking, in spite of this amount of research and reexamination, and consider it important to note that in my opinion there has yet to be shown that there is any ambi-guity as surrounds the purpose for which the fuel supply under
260 this license would be used.
The exchange of letters of September 1974 clarified any ambiguity that might have existed previously and any ambiguity that did exist was certainly regret-table in retrospect.
I think it is also important to note, in reviewing the record that while there has been agreement that we would prefer to'have more information on the application and further improve-ments in the safeguards area, I don'u think there has been any-thing convincing which shows that we do not have a reasonable degree of assurance that diversion of any significant quantity or amounts of this material would be detected.
COMMISSIONER GILINKSY:
Are you referring to the reactor and the spent fuel, or are you going beyond that to the possible separation of plutonium?
MR. GUHIN:
I think that is yet to be resolved in the deter-mination.
I think the question of precisely how reprocessing would be safeguarded or instituted has yet to be determined.
On the safeguards -- I haven't seen all the details of that yet.
COMMISSIONER GILINSKY:
Are you saying we ought not look downstream to the possibility of what might happen to the fuel, and just focus on the timeliness in the reactor, possibly in the spent fuel pool?
MR. GUHIN:
I think we have to look downstream.
I think the question in terms of precisely how effective safeguards would be applied to any reprocessing has yet to be answered.
In view of the fact that there will be no reprocessing 4
without a joint determination, without the concurrence of the E--- - -
I I
l 261 i
l United States government, what I am saying here is that we are j
i looking down the road, but that does not stop the process here.
l One cannot resolve that issue at this stage.
Obviously I am looking down the road as to whether or not it can be resolved.
COMMISSIONER GILINSKY:
But you are basically leaving that to the executive branch group, which is going to make this determination, and letting them resolve this matter?
i MR. GUHIN:
No.
That is not my view of my role.
The exec-utive branch has noted they will be consulting with the NRC.
They have been consulting on general safeguards questions already with my office, and I would expect to be involved fully in the consultations in terms of any determinations or whatnot to be made in this case also.
I would also feel very free to make my views known where I disagree with any of those aspects, if I do.
COMMISSIONER KENNEDY:
In doing this, Mr. Guhin, is it correct to say that you engage the full resources of the NRC Staff in this regard?
MR. GUHIN:
Full resources of the NRC Staff in looking at l
the safeguardability questions?
COMMISSIONER KENNEDY:
Exactly.
MR. GUHIN:
I am not sure what you mean.
l COMMISSIONER KENNEDY:
For example, do you go to the Office of Nuclear Material Safety and Safeguards for technical input, 1
(
concern and advice?
l l
l L._.
262 l
We not only go there for expertise e
MR. GUHIN:
Absolutely.
We go to but on certain questions we go to the legal office.
any office that can provide expertise.
Also including any questions of authori-CHAIRMAN ROWDEN:
zations.
Coming back to the review of the material thus MR. GUHIN:
there has been no it is the staff's conclusion still that
- far, for evidence shown that India has not abided by its agreement cooperation.
there was I think there has been substantial evidence that an ambiguity in the past on the heavy water question, and that We do not think, there was a regrettable difference of opinion.
there could not be two however, that it has Seen shown that in effect, be interpretations under this contract which would, able to live under the contract without constituting --
COMMISSIONER GILINSKY:
What ambiguity?
The " peaceful purposes" ambiguity in the heavy MR. GUHIN:
water contract.
COMMISSIONER GILINSKY:
You think it is reasonable to say that this could include nuclear explosives?
I think if one looks at it historically, you MR. GUHIN:
interpretations under that phrasing.
can come to different COMMISSIONER GILINSKY:
Let's not even get into the useage, the research and development and but where the initial stages, You feel tests would be absolutely identical in both cases.
and its stated purpose alone is enough to distinguish it, that
263 to sort of give this -- to 1 nd this agreement to possible, to two possible interpretations?
MR. GUHIN:
My personal view is no, you cannot make this distinction.
A nuclear device is a nuclear device.
That has been my view ever since I began several years ago looking at the problem and I have always maintained that viewpoint in whatever discussions I might have been in.
However, when one looks at it historically, at the wording which evolved from the Act itself, it would be difficult to say that indeed it is impossible to have another interpretation because I don't think that the language is that clear, that it would preclude it.
COMMISSIONER GILINSKY:
If these agreements are going to rest on stated purposes, then where does this stop?
Suppose the material is stored in the form of explosive devices, or, in fact, put into aerodynamic shapes and even put on airplanes, and still the owner could maintain that this is for peaceful purposes.
It seems to me, these are roads that we don't want to go down.
MR. GUHIN:
I totally agree it is a road we don,'t want to go down.
I think this ambiguity has been clarified.
At least to my satisfaction, it has been cleared with respect to this agreement, the 1963 agreement.
I think it's been clarified across-the-board that indeed, we do not tolerate any ambiguity in this regard.
A nuclear device is a nuclear device and, under no circumstances, would it be consistent with our agreements to t
264 use material we supplied for any nuclear device whatever its In my view this has been clarified to my satisfaction.
purpose.
that On the broader question I agree one has to look at and one cannot strictly stick by letters but should also look If a country were going all the way without at the spirit.
actually breaking, say, the Non-Proliferation Treaty or some-Those are one has to look at those things.
thing like that, very important.
COMMISSIONER GILINSKY:
Well, you did raise the heavy water matter in your statement.
Could we just follow this point one COMMISSIONER KENNEDY:
more step?
You said there was an Mr. Guhin, you made two points.
ambiguity and you are satisfied that that ambiguity has now You also mentioned what you called a regrettable been removed.
difference of view.
Do you think that difference in view has been resolved?
to With respect to this license, with respect MR. GUHIN:
the supply of U.S. fuel, I don't think there is a difference With respect to the very fundamental question of of. view.
whether or not there is such a thing as peaceful nuclear explo-I would suspect there still is a differ-sion or what have you, I think that has been expressed around this table on ence.
several occasions, that this is India's viewpoint and that they have not changed it.
Nor are they likely in the foreseeable future to change it.
t.
Q 265 COMMISSIONER KENNEDY:
Would you like to comment on why, assuming that differences of view do pertain, why that differ-ence of view has no bearing on this license, in your judgment?
MR. GUHIN:
I think the primary reason here is that even when you have those varying viewpoints, I cannot see any direct relationship due to the fact that, as I stated before, we have,
)
I believe, sufficient assurances as to the understandings under which this material will be supplied.
I don't think there is any ambiguity between the Indian Government and ourselves on that question.
I think we also have sufficient assurances that our mate-rial, that we would know if our material were, indeed, diverted for other purposes.
Under those circumstances, I find it dif-ficult to conclude that this question would have to await a resolution of a question which all of us have pretty much agreed at this stage is unresolvable.
I think we have to get to a resolution of that in our direction.
I think this is the hope of everyone.
COMMISSIONER KENNEDY:
The unresolvable question remains, but you make a case here that really this has no bearing on this particular license, since you contend that the material involved cannot find its way to a weapon.
There is another side to that question raised by a number of witnesses in this hearing.
That is, that others may seek continued supply in the circumstances of the unresolved question, as being discriminatory against NPT parties, who have foresworn any such course.
Would you comment on that?
L
266 MR. GUHIN:
As I stated earlier, I have always supported not only the Non-Proliferation Treaty but also, quite apart But to con-from that, the full fuel cycle safeguards concept.
clude that this license would be viewed as discriminator" by countries, some, my initial reaction to that is that people, in their join the Non-Proliferation Treaty because they view it I
interest to do so.
That they voluntarily assume these obliga-shall l
tions not so because it is going to facilitate trade or, we say, nuclear exports, but because in the broad picture it is one, the concept; two, very much in their interest to support, I
the Treaty; and three, trying to get to a world order where least more there would be hopefully universal adherence or at adherents than today.
i COMMISSIONER KENNEDY:
But the argument runs, that pre-f cisely because of this, our continued supply to a party who does not pursue that course, suggests that we are not fully in f
I support of these ideas, or at least our actions are not fully l
1 in support of them.
MR. GUHIN:
Again, I think that is a very difficult question.
In the case with which we are dealing, we have a good faith undertaking.
In my view, as I stated it at the out-set and I might as well come right to my conclusion, I take the opposite view on this point.
I think the question in this situ-ation, or in the circumstance of denial, would auch more likely be viewed as calling or would be more likely to call into ques-tion our reliability and our constancy and continuity as a supplier nation.
i 267 l
I am not sure which countries in the NPT regime have openly t
said that issuance of this license would be discriminatory to i
l them.
I know there have been a lot of discussions in this gen-
)
eral area.
I think one has to always look at the implications of all possible courses of action.
If you drew the line at denial, my conclusion would be that the consequences of that, in terms of l
the ccacerns in other countries regarding our actions, would be more counter-productive to our non-proliferation interests than this other concern mentioned here which I find it difficult to put a finger on.
Largely, it is, I believe, a symbolic concern i
and sort of a move, a momentum idea.
The NPT came into existence several yeare after a lot of our agreements and to expect the United States to indeed cancel l
its agreements, or make all of its agreements also contingent upon adherence to the NPT would, I think, be a matter which would have to be very carefully looked at and could be fraught witn a lot of dangers and a lot of concern.
I would note in statements before, particularly Ambassador Yost's statement j
when he talks about vigorous action, that this is something fraught with dangers.
So, I think all of these things have to be lockad at.
COMMISSIONER KENNEDY:
Can I pursue that in a slightly dif-ferent vein.
You mention Ambassador ' lost's call for vigorous action.
There have been a number of calls for vigorous action.
is that a role for this Commission?
(~
268 l
MR. GUHIN:
My view is, in looking at the question before l
that there us either on this license or on any other license, are certain determinations which indeed are made by us and in any major case, ultimately made by the Commission.
The Commis-I think under all these circumstances, has to be able to
- sion, satisfy itself in its own good judgment whether a license would or would not be inimical to the security of the United States.
I think With regard to the particular licensing process, that is the question.
If in that process it were viewed that conditions would be necessary or that one could indeed not make then I would think that judgment under existing circumstances, l
I the Commis-would go back through, if I may say so, back through th< appropriate channels to see what the possibilities l
of these conditions are and what can be or cannot be worked out if one cannot;come to a license conclusion without looking at those questions further.
In terms of going beyond that in the licensing process and, in effect, defining strategies, basic fundamental strategies I think this is of U.S. non-proliferation and security policy, an area where the NRC should rely upon its consultations with the Executive Branch because the NRC is obvisouly not structured Nor am I sure to, in effect, carry out that kind of program.
that it is authorized to carry out such a program.
I think this is a matter where both the NRC and the Executive Branch have to work closely together in consultations and we have to make our views known.
I hope this answers the question.
269 0
COMMISSIONER KENNEDY:
I think you are saying our role in this particular narrow context is advisory in character.
MR. GUHIN:
Yes.
I would think so.
I think one has to look at the reasons, which I believe are quite simple.
Decisions that are made in the broader context of strategy and where we would like to go in terms of nonproliferation and safeguard questions are ones that obviously relate to other aspects of a relationship with a country, to a region, and indeed to the whole structure and fabric of the international system itself, and I don't think this is an area where the United States could have the most constructive influence if it had 2, 3,
4 non-proliferation policies.
I think if these are coordinated and understood, this is one thing.
But if they really were fragmented I think this l
would have the least constructive impact on the rest of the world in terms of our interest.
COMMISSIONER KENNEDY:
I interrupted Mr. Gilinsky's I
l question.
I am sorry.
l COMMISSIONER GILINSKY:
Why don't you just proceed?
MR. GUHIN:
I think in response to one of the questions I came to my conclusion which has essentially been expressed, and that in looking at the response to Commissioner Kennedy I see I have also done away with my penultimate paragraph of my presentation.
So I can come straight to questions.
COMMISSIONER GILINSKY:
You said that you always supported J
full fuel cycle safeguard but you feel it's not necessary in i
)
270 a
this case.
Do you feel that the effectiveness of safeguards in individual cases are affected by their universal application?
MR. GUHIN:
We get sort of confirmatory evidence by being able to safeguard all of the facilities instead of just a few.
COMMISSIONER GILINSKY:
Yes.
MR. GUHIN:
I think the assurances you have can be increased On the other by the fact you safeguard all of the facilities.
hand it's not my conclusion that you cannot adequately safeguard specific material when there are unsafeguard facilities in the country also.
I think this is possible.
When I say I support full fuel cycle safeguards, I think this is a desirable objec-tive and I think this country and a lot of other countries are heading in this direction.
COMMISSIONER GILINSKY:
The Director General of the IAEA has called for supplier states not to supply material or facili-ties to countries which don't accept the comprehensive safe-guards.
What weight would you attach to that?
MR. GUHIN:
I think that comes back to a fundamental prob-lem we were just discussing.
If you want someone to accept full cycle safeguards, what is the best approach or tactic to do that.
Is it to cut them off?
I would doubt that.
COMMISSIONER GILINSKY:
It seems to be stipulated that India is not going to accept such safeguards.
MR. GUHIN:
So it's obvious that cutting them off would not achieve this goal.
I am not sure that it's achievable here at any rate.
I think one has to look back at the commitments also in the undertakings we have.
One cannot ignore this.
One
l 271 1
c cannot say, or at least the Staff cannot say, that we prefer full fuel cycle safeguards, and therefore we can't ship until wa get them.
I think that ignores the whole evolution of the relationship and the whole problem.
COMMISSIONER GILINSKY:
Do you think this ought to be a recommendation to the Executive Branch?
Do you think this ought to be the policy of the United States?
MR. GUHIN:
That we deny fuel until a country accepts full fuel safeguards?
I couldn't make that recommendation, no.
May I interject something and suggest that we look closely at how we might reach full fuel cycle safeguards, and that we debate l
Lor'look at the questions which may indeed include an option or i
that would have the various options you have included.
I think that'is important as is what has to weigh in balance.
But at this suage I could not make the recommendation that denial is 1
the manner in which we should try to get to that objective.
COMMISSIONER GILINSKY:
You listed the heavy water problem as one of the three items you felt relevant to the question.
And you concluded there has been no evidence that the Indian government has misled the United States.
Assuming that is cor-rect, we at least now have a clearer view of the matter than we did a while back on the Executive side, and do you think we can just walk away from it at this point?
MR. GUHIN:
I am not sure what you mean by " walk away."
I consider that question very important, because in my viewpoint, had there been evidence of what one could objectively call a breach of an agreement or had there been evidence of misleading i
272 g
the United States, then I think this or misrepresentation tM3 would obviously have an important bearing on the credibility of-or how one accepts an assurance.
Now, we have had a lot more information supplied since that statement was written and we have again looked at the other submissions --
COMMISSIONER GILINSKY:
This is the statement, the joint submissions?
I mean what has been supplied for the record.
MR. GUHIN:
When you say " walk away from it," I am not sure what answer there is to that question that is left any more.
COMMISSIONER GILINSKY:
Are theie any residual obligations Are in that agreement on the part of the Indian government?
they precluded from doing what they want with that material?
It's still there, presumably.
I think what happened here, as I view the situ-MR. GUHIN:
of the ation, and I am fairly clear that it's accurate in lignt is comingling practice or what have you that has been going on, that there really is not basis upon which now to say that here is our 21 tons of heavy water.
If it would be preferable I guess what you are saying, if it would help our own plan's to have 21 tons returned, are you saying this would be a course possibly to pursue?
COMMISSIONER GILINSKY:
Doesn't our action in this matter suggest an indifference to what happened?
MR. GUHIN:
In the past?
I am not sure it suggests indifference.
In view of the agreement that was designed or
i 273 I e the contract that was designed on that and the practices which were carried out.
I think it reflects, in my mind, a lack of a fair alternative as to how you do resolve that.
Now, I have suggested one possible way to resolve this would possibly be the return of the heavy water.
If one felt i
that this were absolutely necessary and that we would like to
(
get this resolved in that manner.
Beyond that I am not sure how one resolves it.
It would ba difficult, it seems to me, to tell the Indian government it could not be used in any unsafeguarded program when nobody knows where that 21 tons of heavy water is at the time.
COMMISSIONER GILINSKY:
Can I ask you to turn to another matter.
Can I ask you about the review proce,ss that leads up to your recommendation.
Did you have all the documents you needed and have documents become available since you made those recommendations that might cause you to rethink some of them?
Did you have access, for example, to the various views of agen-l cies other than the Department of State?
t MR. GUHIN:
Yes.
Our traditional procedure is to go through the Department of State, as you know, but to say I do not talk continuously with the Department of State and other l
l agencies, with officials that I know there, of course I do and t
j I search this out on almost every case or any major important case with which we are dealing.
In this one, because of the importance attached to it, I believe I had access to all the information I needed.
I surely had access to almost more than I could handle.
In the context
274 cf other agencies' responding to questions, either written or oral, I think it was a very open process and the information it when we was always there when we requested it and we got l
needed it.
In fact, the heavy water question was one where I had to go through and search in careful detail by myself and ask a lot of questions because I felt that, in my own mind, I had to be fully assured of what was indeed the case and of the way I viewed it.
Obviously on all the aspects we have to go through that, but --
COMMISSIONER GILINSKY:
There is a flood of information that came out of the Freedom of Information Act request.
Is l
there anything in that that causes you to rethink any part of your statement, or would you want to modify the statement?
MR. GUHIN:
I would hope before the end of the week to get through all of that.
I have made good progress toward that end.
Thus far, in what I have seen and read, things that are relevant and to be taken into consideration, I have looked at how that reflects on my own views and whether indeed a reevaluation of my own views is in order.
COMMISSIONER GILINSKY:
Basically you have felt that you have the documentation you need to make this decision?
MR. GUHIN:
I would say so.
One can never say though that one would not like more information.
I think this is always possible in whatever area one is dealing.
Eut at certain points, especially when you feel the need to come to a conclusion on a
275 e
d'ecision, there has-to be a cutoff point unless there is really an outstanding question.
In this regard I have not come up with a really outstanding question, for example, that would preclude my coming to the conclusion at which I have arrived.
COMMISSIONER KENNEDY:
Have you felt in the process of this licensing activity that the Executive Branch has been fully forthcoming to you, that they have delivered to you what was relevant and essential to your own decision?
MR. GUHIN:
Yes.
They have been very helpful in this regard, not only formally but informally.
CHAIRMAN ROWDEN:
When you state that concluding this license determination would not foreclose the licensing process,
{
should I conclude from that that if the Executive Branch reached l
a conclusion with which the Staff disagreed, that that disagree-ment might be reflected in its recommendation on the next license application for shipment of fuel to Tarapur?
MR. GUHIN:
I think in all good conscience it would have to be.
If we strongly disagreed with the determination and we are really getting at the questions of safeguards and how they would be applied -- if we felt that they were not adequate, I would see no alternative but to have that reflected in any recommendation.
CHAIRMAN ROWDEN:
It would become a relevant consideration and would affect the recommendation.
MR. GUHIN:
It would have to.
CHAIRMAN ROWDEN:
I have no further questions.
I would repeat what I stated before about reviewing the record of this
276 e
proceeding.
There is still much to be contributed in it nec-essarily in terms of the presentations.
There are some 100 the Staff questions to be answered by the Department of State, posed a number of questions, and the Commission may pose a number more.
We would expect the Staff to evaluate very carefully the response to those questions and the data in the record in deter-mining whether it maintains the present position or modifies it in some fashion.
I believe there are no further questions.
We can adjourn this phase of the proceeding and we will reconvene at 1:30.
(Whereupon, the hearing was adjourned at 12:30 p.m.
for
' luncheon to reconvene at 1:30 p.m. in the same room.)
l
277 AFTERNOON SESSION (2:00 p.m.)
CHAIRMAN ROWDEN:
The hearing will reconvene.
Mr. Greenberg, we welcome you.
You may begin your presen-tation.
STATEMENT OF ELDON V.
C. GREENBERG, ESQ.,
CENTER FOR LAW AND SOCIAL POLICY.
MR. GREENBERG:
Thank you, Mr. Chairman.
I hope the Commission does not object to my taking the prerogative of sitting as well.
CHAIRMAN ROWDEN:
You woulo have been invited to do so had you not taken the initiative.
MR. GREENBERG:
For the record, my name is Eldon Greenberg.
I represent the Natural Resources Defense Council, the Union of Concerned Scientists, and the Sierra Club, three environmental and scientific organizations which originally petitioned to intervene in this proceeding in March of 1976.
I am pleased to present the views of all three organizations to the Commission this afternoon.
As the Commission is well aware, there is already an elab-orate record which has been established in this proceeding prior to its opinion of May 7th.
As a result, in addition to the filings that we have made in connection with this particular hearing, I urge the Commission i
to give special attention in its consideration of these matters to our petition, and to briefs we have filed during the course L
i 278 of the spring, particularly our briefs of March 19th and March 26th, which deal with many of the substantive issues which are now before us.
I Although some of the claims which we initially raised went to health and safety matters and although the Commission in its those matters were outside the May 7th opinion determined that scope of its licensing authority, we continue to believe that in the context of this health and safety issues are significant licensing.
I do not intend to address those today.
However, I do urge reexamination of the question and we have submitted one statement, that of Thomas Cochran, attached as Appendix 8 to our submission which deals specifically with the health and safety problem.
I would also like to emphasize the importance which we attribute to those independent analysts who have filed state-ments with the Commission but have not been able to appear per-sonally at the hearing yesterday and today.
They represent a broad range of scientific and public policy knowledge.
On the whole, they have agreed with the submission of i
petitioners that the risks associated with the transactions under consideration are great, and that it is necessary for the to the license Commission to take forceful action with respect under consideration.
So I ask that the Commission review those submissions care-fully as well.
l l
l
4 L
279 4
In my presentation this afternoon I will try to be brief.
I Many of the points which we make in our petition and in subsequent filings have-been dealt with extensively by other witnesses.
Many of the issues were brought out during the course of questioning by the Commission.
I will, rather, try to focus on some of the issues.which have not been dealt with as expansively as others during the course of the past two days.
l To start out, I think I should say a word about the role of the Commission in this proceeding.
We believe that there is a heavy burden to be met if the Commission is to make the finding required by the Atomic Energy Act, by Executive Order 11902, and by the Commission's own regulations that the issuance of License Number XSNM-845 would not be inimical or constitute an unreasonable risk to the common
]
I defense and security and interest of the United States.
We wish to emphasize the importance which we attribute to the Commission's role in the overall nuclear export process.
The Commission, as is recognized in the May 7th opinion, as correctly recognized, I believe, stands as a regulatory channel at the end of a rather long process which ordinarily begins the negotiation of an agreement for cooperation.
It has a responsibility to review the conditions of transfer under an agreement of cooperation which may have been entered into as in the case of India, many years ago.
l
~
290 s
It has to determine if shipments of fuel or other material interests at under that agreement are consistent with the U.S.
the time the license application is made.
Now, with respect to the specific requirements of the Indian agreement for cooperation, we do not believe that that agreement is unique in the sense that it is insulated from licensing scrutiny.
We have dealt with this question extensively in our sub-mission of March 26th, at pages 4 to 11, where we argued that the agreement was subject to licensing authoricy.
The fact that itself does not refer to the licensing of the the agreement transfer of special nuclear materials is understandable in light of the fact that no license was needed to be issued at that time when special nuclear materials were shipped.
However, what is significant about the agreement is that it does refer specifically to issuance of licenses for nuclear equipment, utilization facilities and so forth.
This represents in our view a clear understanding that when licenses would be required, by law, then they should be obtained by the party seeking to et ;rt the particular material, fuel or technology.
COMMISSIONER GILINSKY:
Isn't the matter disposed of by the wording of the contract on the sale of fuel?
MR. GREENBERG:
I suppose there is a legal question as to whether the contract in some way amends the obligation of the agreement for cooperation.
i
)
i
i
{
I 291 We believe the contract is strong evidence of the fact that the parties well understood that the agreement of cooperation itself contemplated that licenses would be obtained where appro-priate but I would agree strongly with you, Commissioner Gilinsky, that the contract by its own terms is specifically subject to the licensing authority'of the Commission and there-fore, quite apart from the requirements of the agreements for the cooperation, it would seem to me that his proceeding is an appropriate one in the exercise of the Commission's authority.
COMMISSIONER KENNEDY:
You say "quite apart from."
It cer-tainly is in the context of the agreement for cooperation, isn't it?
MR. GREENBERG:
Well, I suppose the parties by agreement l
could make shipments subject to licensing authority, whether or not it was explicitly required by the agreement for cooperation l
itself.
l But I am not sure that this is an issue which really has i
to be reached here.
As I understood Mr. Kratzer's testimony yesterday, ulti-mately he did not contest the Commission's authority to pass on the statutorily required criteria, which must be met if a license il to be issued.
CHAIRMAN ROWDEN:
A license application has been filed.
There have been a number of transfers, as.I understand it, which
~
were on a government-to-government basis which under the Act are not subject to licensing.
282 In the past several years there has been a licensing route pursued and we have a licensing application before us.
MR. GREENBERG:
That's correct.
Now, in this proceeding, has this heavy burden been met?
It is our view that the public record, at least, is as yet inadequate.
f Certainly the initial three-page license application analy-sis does not begin to come to grips with the very serious questions which are before this Commission.
We believe that the July 8th submission of the Department of State, which I would characterize as conclusory in many and which raised no fewer than 112 questions in our
- respects, mind, was not sufficient in and of itself to justify the Com-mission's issuance of the license.
The record, of course, is still open and we will have to wait and see what comes in, but on the record which we now have I do not believe the State Department -- and I think it ulti-mately is the State Department which has the burden -- I do not believe that the State Department has met the burden of demon-strating that issuance of this license is consistent with our national security interests.
COMMISSIONER KENNEDY:
Mr. Greenberg, why do you say you believe it is the State Department which bears this burden?
l The Executive order is rather clear.
The State Department is acting for the Executive Branch of the government, but has a responsibility for coordinating all opinion and activity in connection with the licensing action.
293 MR. GREENBERG :
Perhaps it's a misnomer to refe'r to the State Department as such.
The State Department has taken the burden of presenting the case to the Commission.
I mean to refer to the executive branch as a whole.
What is interesting to this point in the proceeding is there is really a surprising amount of coincidence among the presentations of the various concerned parties.
There is general agreement that optimum conditions do not apply to present transfers to India.
The real question is, what we should do to try to obtain i
an application of optimum conditions to transfers to India.
That involves an assessment of the impacts of various
)
alternatives.
I quite agree with Chairman Rowden, it involves assessment of the positive and negative impacts of various actions which the Commission might undertake.
We come out very differently from the executive branch, if you will, in the analysis of risks.
We think that under current conditions, the benefits of taking ahead, strongly outweigh the risks of not taking action, and continuing to license shipments of nuclear fuel to India, under current conditions.
CHAIRMAN RONDEN:
Are you going to address the risk question?
MR. GREENBERG:
Yes.
I intend to do so.
Before doing that, however, I would like to focus first on what really is the center-piece, the stated centerpiece, of the Department of State's
284 namely, that assurance of supply is critical in this
- argument, to achieve nonproliferation objectives.
~
case, as in other cases, I would like Then after I talk about assurance of supply, to talk a little bit about the two prongs of the Commission decision making process.
First, whether the assurances we have obtained from India are adequate.
Second, whether safeguards may be effectively applied.
Then I would like to conclude by talking in more detail about some of the risks and benefits and about what we believe to obtain non-is a very real ability of the Commission to act, proliferation objectives.
I think the essential argument of the State Department implies the Commission's obligation really goes too far.
It if has to give way in all but the most extreme circumstances, there is any threat of it.terruption of supply.
the manu-Now, yesterday Mr. Kratzer seemed to admit that l
facture of a nuclear explosive device might constitute, just precisely that kind of extreme circumstance which would cause the United States and the Commission to reevaluate whether ship-ments of nuclear material or nuclear fuel should continue.
I think in this case if we focus on the assurance of sup-ply question, if we focus on the real specifics of what assur-the conclusion we ance of supply accomplishes vis-a-vis India, have to reach is that the assurance of supply is really counterproductive.
285 Assurance of supply is a policy of the United States, because as Mr. Kratzer said, it provides us with an entree, a basis for dialogue, with some ground upon which we hope we can change or influence India's policy.
CHAIRMAN ROWDEN:
Do you accept that is a valid national policy?
MR. GREENBERG :
Yes.
I will get to that in a little more detail.
I think the problem in the Indian case, and what we have tried to demonstrate in our submission, is that assurance of supply over the past 10 years has not resulted in any signifi-cant U.S.
influence over the Indian nuclear power program.
We have tried to document the extent to which the United States, State Department and the Atomic Energy Commission have been aware since 1965 of India's intention with respect to the development of nuclear explosive devices.
COMMISSIONER KENNEDY:
Excuse me, Mr. Greenberg.
You say the United States Atomic Energy Commission has been aware since 1965.
Would you dccument that?
MR. GREENBERG :
Well, we refer in our submission to a vari-ety of cables and reports which were received for the most part by the Department of State, which also appear in ERDA's files and therefore which I assume were available to the Atomic Energy Commission during this period, which indicate that following the Chinese nuclear blast of 1964, the Indians were very inter-ested in the possibility of developing an Indian capability,
296 that there was a substantial debate in parliamentary circles in India during 1965, with regard to the possibility of development of a bomb.
We l
And that this interest has continued almost unabated.
cite a letter written to the Arms Control and Disarmament Agency in 1971 which refers to the very strong interest of the Indian Atomic Energy Commission --
COMMISSIONER KENNEDY:
Perhaps you misunderstood.
I under-thought you had said the " intent,"
stand the point of interest.
I and intent.
and I guess I haven't equated interest That was what intrigued me.
Is it interest or intent we are talking about?
I'm not sure how you separate the two.
MR. GREENBERG:
COMMISSIONER KENNEDY:
There's a great difference.
interest in a variety of things, but no I have a great intention of doing any of them.
I think in the Indian case what we have MR. GREENBERG:
seen is that the intention has been translated into reality.
COMMISSIONER KENNEDY:
We are talking about 1965, Mr.
Greenberg.
That is what I am trying to get documented.
MR. GREENBERG:
What we document in the 1965 period is that India was at the time in the process of separating plu-tonium from spent fuel from the CIRUS reactor and we include an article which appeared in the Manchester _ Guardian in March of 1965, entitled " Brown Bomb," which was just a press report to I am and whether it indicates intention or interest, be sure, not sure, but it certainly indicates India was pursuing a l
I o
237 course which would lead it closer to the capability of actually manufacturing an explosive device.
I think we have been aware of that for a long time.
I think we have been aware of the interest of the Indian Atomic Energy Commission in nuclear explosive devices, whether peace-ful or not.
Clearly this issue was of central concern in the early 1970s.
There has been reference to communications between a State Department and Atomic Energy officials in the early 1970s, with respect to the meaning of the peaceful use assurances, par-ticularly in our contract for the supply of heavy water for the CIRUS reactor and also I understand with respect to the fuel at Tarapur itself.
I might add we have not seen the November 1970 mer?o which is referred to in a memorandum from Mr. Hubert to Mr. Kratzer, but as I read between the lines, that at least expressed some fairly strong views on --
CHAIRMAN RONDEN:
That is a classified document which i's the reason for your not having seen it.
I didn't want to leave any question in the record, that there is an unclassified docu-ment relevant to this matter.
MR. GREENBERG:
I recognize that, Mr. Chairman.
It has been referred to and clearly it's relevant both in the Commis-sion's mind and mine to this problem.
But what the record reveals is that, though we may have sent an aid-memoire, and though Mr. Kratzer and others apparently met in 1971 with Indian
e 238 f
Atomic Energy officials to discuss this problem, those discus-in any really influence over the Indian sions did not result nuclear explosive program.
Kratzer was being somewhat disingenuous when he I think Mr.
r9ferred yesterday to the " unexpected" explosion of a nuclear device in May 1974.
Certainly there is a substantial amount of evidence in the even if we that it's certainly not wholly unexpected,
- record, interest rather than intentions, are only talking about But the basic conclusion that I would draw'from that his-l tory is that words and low key representations to the Indian governmeat have not in the past, that is, words and low key l
representations, along with continued supply of fuel, have not i
been sufficient to turn India aside from its intentions.
They have not been sufficient to give us influence over the direction of the Indian nuclear program.
f I would draw from that the conclusion -- I would draw from l
that state of facts, the conclusion that action is needed now meaningful if we are going to have, or going to seek to assert, f
nonproliferation control over the future course of Indian nuclear i
power development.
but I think it is our obli-We might not be able to do that, course of action, because the prior gation to seek a different course of action has not given us the kind of influence we sought to have.
We don't question --
l
l'.
289 t
COMMISSIONER KENNEDY:
Could I interrupt there a minute?
I recall the arguments being raised in the proceeding that, following the 1974 event, there were substantial modifications made in the nature of our understandings and agreements, to tighten those, reflective indeed of our concern stemming from what was referred to as an unexpected event.
I won't characterize it.
I will just quote.
Does that suggest then a total inability on our part to further influence, which I think you are suggesting?
MR. GREENBERG:
I will get in a moment to the adequacy of the assurances which we have received from India in September of 1974.
In my view, those assurances are highly inadequate, and really --
COf.1MISSIONER KENNEDY:
But were they or were they not in your judgment any improvement over the situation which obtained before those new assurances?
MR. GREENBERG:
I think they might have represented a very marginal improvement, but whether they represented an improve-ment which is significant is another question wholly in my mind.
Let ma. say a word about reliability.
This has been men-tioned by others.
Reliability clearly does have importance to our nonproliferation policies, but I think the point can be
' emphasized once again, and others have made it much more elo-quently than I, including Prof. Fisher and Dr. Scoville, that reliability of supply cannot be the same thing as automatic supply; that automatic supply tends to erode nonproliferation
290 in a policies, particularly when you have automatic supply, case in which there are at least the substantial questions as to whether a country is complying with peaceful use assurances.
I think a policy of automatic supply is ultimately very counterproductive in terms of overall U.S. nonproliferation interests.
Now, the question arises whether there have been any changes since 1974.
The argument has been made that, well, we looked at the Indian event in 1974, and we entered into a new set of under-standings and that it would be inappropriate now to act to review those understandings, to determine whether they are adequate or not.
In my view, circumstances are markedly different today than they were in 1974.
They are markedly different in at least three respects:
First of all, we did act in 1974.
We did act to obtain new assurances, but it is clear to me that we did not fully under-l stand at that time either the facts with respect to the Indian nuclear explosion, or the implications of that explosion.
I think our action was premature.
I think that premature I
action has had a very substantial counterproductive effect.
CHAIRMAN ROWDEN:
Can you elaborate on both of those areas?
MR. GREENBERG :
Yes.
I plan to.
First of all, with regard to the facts regarding the explo-sion, as far as the record of which I am aware, we did not under-stand in 1974 the full extent to which U.S.-supplied heavy water I
J
291 e
may have been involved in India's development of an explosive device.
That may have shaped our views as to the adequacy of the Indian assurances, the types of assurances we needed.
As far as I understand it, the facts, and they are still coming out with regard to Indian use of U.S.-supplied heavy water, have really only been developed in the past couple of months, and they are still not fully developed, as I think the memorandum from Mr. Huberman to Mr. Kratzer indicates.
I think as those facts come to light, we have strong grounds for reevaluating the determinations which we made in May, June, July, August and September of 1974.
CHAIRMAN ROWDEN:
What would be the premise of the evalua-tion?
That U.S. material was used, or that it was used in a fashion that was inconsistent with an obligation which the Indians had made to this country?
j Which is the important consideration?
Not that I would discount the former, but what are you emphasizing?
The former?
Your presentation up to now emphasizes that.
Is it the former, or is it the latter?
MR. GREENBERG:
Both.
l I think U.S. material was used --
CHAIRMAN ROWDEN:
You don't get to the latter until you cross the former.
292 MR. GREENBERG:
I think there is a question at the very least whether the use of that material was consistent with assurances which we obtained from the Indian government as reflected in the 1956 agreement.
intend to go into this in great detail, because it I don't has been discussed extensively this morning.
it seems to me we have seen the effect of Second of all, Indian development, as an example, on what countries can do to i
develop indigenous explosive capacity elsewhere in the world.
I think the fact that Pakistan has sought to purchase that Brazil has been inter-reprocessing facilities from France, ested in the purchase of processing facilities from West Germany, that Iran has an increasing interest in the development of these facilities are relevant in this regard.
I CHAIRMAN ROWDEN:
You are relating those directly to the l,
Indian experience?
MR. GREENBERG:
Yes, I would.
COMMISSIONER KENNEDY:
Do we have evidence of any kind to that effect?
MR. GREENBERG:
I have a paper; I'm glad you *sked that question.
COMMISSIONER KENNEDY:
Particularly if you have a paper, I am delighted I asked.
MR. GREENBERG:
Which I would like to submit for the record.
l I believe this is a public paper which was submitted to the 28th Annual Meeting of the Association for Asian Studies,
- Toronto, f
1
__________a
I I
293 Canada, which is called " India-Pakistan-Iran, A Nuclear Prolif-l eration Chain," by Lewis Dunn.
CHAIRMAN ROWDEN:
It doesn't cover Brazil?
MR. GREENBERG:
It does not cover Brazil, although there is a reference to Latin American Developments.
CHAIRMAN ROWDEN:
Who is the author?
MR. GREENBERG:
Lewis Dunn of the Hudson Institute.
I would like to submit a copy of this document for the record.
I think it is relevant to these considerations.
I don't think this document is unique.
We have cited in our presentation an article which appeared in the Bulletin of the Atomic Scientists just this past June, by Norman Gall.
The same article appeared in the Foreign Policy Journal and reaches similar conclusions.
CHAIRMAN ROWDEN:
Let me make a comment with regard to your submission.
Of course, we will accept it for the record without indi-cating the degree to which it is relevant, but I think you should serve it on the other participants in this proceeding --
MR. GREENBERG:
I have extra copies, and I will mark them at the close of my presentation and submit them.
CHAIRMAN ROWDEN:
All right.
COMMISSIONER KENNEDY:
I want to be sure that I understand the nature of the evidence.
These are monographs prepared by individuals, presumably reflecting their own views?
F L
294 i
I l
MR. GREENBERG:
Yes.
Do they contain any direct evidence, COMMISSIONER KENNEDY:
or do they merely reflect assessments made by these individuals?
I think you are inevitably in a judgmental MR. GREENBERG:
area when you assess the intentions of other nations.
I don't see any way of getting around that.
l We rely on what data we have.
These individuEls are uniquely COMMISSIONER KENNEDY:
j I take ici i
qualified to make those judgments, i
I cannot vouch for the professional quali-MR. GREENBERG:
I think the Commission will fications of Mr. Dunn or Mr. Gall.
I think that these have to take them for what they are worth.
events have changed our perception of the nonproliferation policy.
I think that is relevant as well.
One example is our national policy with respect to national reprocessing facilities.
I don't think you can say that in the early '70s it was the clear policy of the United States to oppose the development of national reprocessing facilities.
the risks associated with those facili-I am not sure that ties were fully understood.
I think that our understanding has been improved.
I think that understanding is reflected in Secretary of State Kissinger's presentation to the United Nations in September of 1975, and what is now an important cornerstone of These are all new facts which have to be brought U.S. policy.
to bear on this license application, and they are very important,
(
l 295 4
India, of course, is one of the prime examples of a country which is moving ahead toward national reprocessing capability.
CHAIRMAN ROWDEN:
I might observe that so were the Japanese, before they became adherents to the NPT during a period of time 1
when this country had continued as a supplier of facilities and l
l materials to Japan.
Does that experience have any relevance here?
l MR. GREENBERG:
As I understand it, Japan did not then and l
does not now have an operational reprocessing tacil'ity.
I believe that is correct.
I do not know what the nature of U.S.
representations to Japan were with respect to reprocessing, but it seems to me that a consistent policy requires that national reprocessing be frowned upon in any country in which it may take place, i
CHAIRMAN ROWDEN:
I was just interested in terms of the l
universality of your observation.
Obviously, in the case of Japan there is no pursuit of a nuclear explosive program, peace-l ful or otherwise, which is a distinguishing factor, but they were not adherents to NPT, they had a larger nuclear program than do the Indians, yet it was U.S.
policy to continue nuclear cooperation.
The Japanese, as Mr. Kratzer made clear yesterday, were not subject to full fuel cycle safeguards.
I believe he mentioned the indigenous capability on the 1
I l
part of the Japanese.
I think most people would assess the experience with Japan, the patience which this country evidenced and the dipl%natic
I 296 means they realized as having resulted in the constructive 1
l-outcome.
I just solicit your opinion as to whether you think that is part of the body of experience which goes into assessing which moves are appropriate cnd which are inappropriate.
I f
I confess to be not fully familiar with MR. GREENBERG:
l for me to comment on the Japanese situation and it's difficult l
l 1
it extensively.
I think inevitably the Commission will have to make some It i
discriminating judgment in dealing with the Indian case.
has to focus upon particular risks associated with reprocessing in India.
COMMISSIONER GILINSKY:
If I can interject about Japan, they had signed the treaty earlier, although they were not parties, but there was a strong expectation at all times as that In fact, it was surprising they they would become parties.
delayed as long as they did, a number of years, and there are interpretation of the Japanese Constitution about other aspects, nuclear weapons and so forth.
MR. GREENBERG:
There are distinctions.
That was the point I was trying to make.
CHAIRMAN ROWDEN:
and I have heard the question advanced in international terms, there are variations.
But sometimes it is best not to overstate a proposition.
I MR. GREENBERG:
As we point out and others have pointed i
national reprocessing in the case of a country like India
- out, a
i 297 may have particular risks we have already seen in looking at how Pakistan has reacted to the development of that reprocessing capability.
l l
Let me turn to the first prong of the Commission's deter-1 mination, which is the judgment of whether peaceful use assur-ances are adequate.
There has been a great deal of discussion in the past two days, and rightly so, about the adequacy of the assurances, contained both in the agreement for cooperation and in the exchange of correspondence between Dr. Ray and Dr. Sethna in 1974.
Indeed, it is fair to say that that exchange of correspon-dence is really critical in many ways to the determination which the Commission must make.
Were those assurances which we obtained from Dr. Sethna adequate within the meaning of the Atomic Energy Act?
One simple point to make --
CHAIRMAN ROWDEN:
Are those the assurances which were forthcoming?
i MR. GREENBERG:
Reflected in the September 1974 letter from Dr. Sethna to Dr. Ray.
Now, I don't intend to belabor this point, because it has been focused on by others, but that correspondence does not f
represent a formal international agreement.
It may represent parties' interpretations, but I don't know whether in and of itself, it can be considered to have the same weight as an l
agreement itself would have.
i
299 Professor Fisher addressed that question yesterday.
It is a rather narrow commitment.
It focuses on Tarapur only.
Of course, it leaves open the question of what India may do in other facilities and, indeed, what India may do with other U.S.-supplied material.
CHAIRMAN ROWDEN:
Could you expand on that?
I am not quite sure what you are referring to.
Under the agreement, as I understand it, we are dealing only with the Tarapur facility.
l MR. GREENBERG:
That is correct.
The question really is, in 1974 were we in a position to obtain broader assurances from India with respect to peaceful use of U.S.-supplied material?
CHAIRMAN RONDEN:
I want you to relate to the transaction we have before us now, and the sense in which it is inadequate, in terms of the transaction with which we have to deal.
MR. GREENBERG:
The argument is made this is an unambiguous commitment.
I think Mr. Kratzer made that argument this morning and Mr. Guhin repeated it, but is it really?
What it does, it covers up a disagreement and all parties more or less have con-curred in the judgment that there is a disagreement, there is a disagreement as to whether explosive use of U.S.-supplied mate-rial is consistent with our agreement for cooperation.
The Indian position is categorically stated in the July 10, 1974, letter from Dr. Sethna to Dr. Ray; not stated in any other docu-ment of which I am aware.
l 299 That position is that so-called peaceful nuclear explosives are consistent with India's obligation under our agreement for cooperation.
That option has been kept open by the exchange of corres-pondence ir.~ September.
l l
CHAIRMAN ROWDEN:
How was it kept open, if I understand the exchange of correspondence, it commits the Indians to use the fuel only for Tarapur.
This is a relevant point in terms of this transaction.
COMMISSIONER GILINSKY:
It says the needs of the Tarapur station.
Can that be interpreted in any other way?
MR. GREENBERG:
The Indians are very clever in this matter of interpretation as we have seen, but my concern is particu-larly with the language of the mutual agreement which seems to me to leave open some ambiguities as well.
What does it mean?
How formal does that agreement have to be?
How will India inter-pret U.S.
action or statements as constituting an agreement in some sense to other uses of the material at Tarapur.
COMMISSIONER KENNEDY:
I think I don't understand what your point here is.
The words " mutual agreement," I did not have any trouble with understanding.
I guess I do not quite comprehend how you see it as being ambiguous.
Can you explain that?
MR. GREENBERG:
I am suggesting that that language like any other language is open to interpretation.
How formal does that agreement have to be?
What evidence of the agreement might India rely upon, in order to interpret U.S.
action as constituting some
-l m-
300 kind of approval for India to proceed with the use of U.S.-
supplied material for purposes other than fueling the Tarapur Reactor.
I am just suggesting, and I just raise this point because it was argued that it is totally unambiguous.
I don't think it's a totally unambiguous commitment and I think the future is left certainly future use of this material for explosive pur-
- open, poses is left open.
That is the fundamental fact, whether U.S.
agreement is required or not.
Now, it seems to me that we can go beyond the assurance contained in this correspondence in order to evaluate the over-all adequacy of Indian assurances, with respect to Tarapur.
We have the Canadian experience to look at/ ed I think that experi-ence is relevant.
We have attached to our submission, an analy-sis by the Canadian political scientist Robert Anderson who focuses on Canadian-Indian relations over the past 20 years and who concludes that at least where there is some ambiguity, there may be a real risk that nonproliferation objectives will be undercut in the long run, and that India will interpret rhose ambiguities in its favor, in order to engage in a program which supplier countries such as the United States or Canada would never explicitly agree to.
leave open the question whether I.idia actually vjolated I
peaceful use assurances to Canada or not, but I take it there is at least a question as to whether it did.
It seems to me that question --
L
301 l
COMMISSICNER KENNEDY:
Mr. Greenberg, I wonder if before we reach that " mutual agreement" point, whether we might take it one step farther.
You find it ambiguous in its present formulation.
Let's accept that for purposes of argument and perhaps even go on and say how you might change that formula-tion so it would be less ambiguous in your mind at least?
MR. GREENBERG:
I think there is just one unambiguous formulation acceptable and that is that India cannot use U.S.-
supplied material for any device, for anything leading up to a device and that is the kind of commitment that the Department of State, the Executive Branch, and I think all the participants here agree is desirable in the long run.
We go beyond that.
We think it's essential in order to remove any ambiguity f rom our agreement with India.
I don't know if that answers your question.
i COMMISSIONER KENNEDY:
-No. Because I am not exactly sure what it is about the present agreement that gives you the i
impression that we don't have that.
MR. GREENBERG:
It doesn't say it.
As long as it doesn't say it, it seems to me you can't say that we have it.
You can make a lot of arguments about how we do.
CHAIRMAN ROWDEN:
We could say you can only use it at the Tarapur Atomic Power Station, except where it could be agreed --
MR. GREENBERG:
I think that is more agreeable than the terms we now have.
CHAIRMAN ROWDEN:
In terms of exclusive use, whether it would give you the further benefit is debatable.
Is it a common,
302 Are there, for accepted formulation in dealings of this type?
example, other provisions, to your knowledge, in this agreement for cooperation, in other agreements for cooperation or in other international dealings where this formulation is used?
MR. GREENBERG:
" Mutual agreement"?
CHAIRMAN ROWDEN:
Yes.
Is there an accepted course of dealing?
Maybe you are not the person to answer this.
I pose think it's something that the question on the record here and I is appropriate for the Executive Branch to address.
We can make an effort to do some research.
MR. GREENBERG:
CHAIRMAN ROWDEN:
I invite your response but I think that the Executive Branch is the basic repository of knowledge here.
This is a question they should address themselves to.
MR. GREENBERG:
A third factor has to be mixed into this stew of determining whether assurances are adequate and that has to do with assurances with respect to U.S.-supplied heavy water.
Once again I don't expect to go into that in detail.
It has been discussed up and down as to whether India's assurances to the United States were' violated.
In my view, the Executive Branch has made a rather tortu-ous defense of the Indian position, based upon argument that the U.S.-supplied heavy water was commingled uith India's heavy
)
1 water, substituted or whatever, but at the very least I think the conclusion we can draw from this, and also the conclusion
}
we can draw from the letter from Ambassador Kaul to Secretary Kissinger -- again I have not seen this letter.
I assume it
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303 has been classified, too -- is that Indian assurances or under-standing may have been subject to ambiguity, that information l
we have received from India in the past may have been mislead-i ing, whether intentional..y so or not, I am not sure, but the real point is that as long as there is any ambiguity tolerated, I
there is a real risk that India will take advantage of that ambiguity to move ahead on the explosives program to which it is apparently committed.
Now, turning to the question of adequacy of safe 7uards, which is the second prong of the determination that the Com-mission must make, in our view the key problem is the existence of unsafeguarded facilities which gives India the capability to manufacture nuclear devices with U.S.-supplied material or with other material.
I think the existence of unsafeguarded facilities in India is a particular problem as far as U.S-supplied materials are i
concerned.
We are not dealing with a country which has the nuclear program which is based solely on indigenous technologi-cal capability and indigenous material.
There are U.S.-supplied materials which are now in India.
Now, we referred earlier to the problem of.the CIRUS reac-tor, which apparently still has U.S.-supplied heavy water in it.
At the Rajasthan Reactor there is also U.S.-supplied heavy water.
The record at this point is really somewhat obscure as to whether safeguards will continue to apply to those reactors or not.
CHAIFD901 RCWDEN :
Is that because of the Canadian-Indian situation?
l
r 304 We have asked several questions of i
MR. GREENBERG:
Yes.
i issue.
the Department of State which relate directly to that how will that Namely, what is going to happen at Rajasthr.n, affect U.S.-supplied heavy water and how will that affect plu-l l
tonium --
CHAIRMAN ROWDEN:
If this government were to put itself in 1
l the position where the Indian government would claim a breach of the agreement for cooperation, then the spent fuel in Tarapur, the nuclear power plant, as well as any other facilities that might be subject to safeguard, would arguably no longer be sub-J ject to safeguards.
You said you were going to deal with the consequences of that.
Is that a consequence you are going to address?
MR. GREENBERG:
Yes.
It's one that Mr. Kratzer referred to yesterday.
CHAIRMAN RONDEN:
We brought up the Canadian experience.
MR. GREENBERG:
Yes.
It seems to me, this U.S.-supplied material and other facilities poses problems we have to come to grips with because there is a very real risk that India will use these U.S.-supplied materials to manufacture another explo-to sive device.
One other point which I think is important to the exis-make, and it relates to this license with respect tence of safeguarded facilities, is that as long as we continue to supply to Tarapur and leave the other facilities free to operate without safeguards, our assistance in effect provides India with the ability to engage in a weapons program which i:
[
1 might not otherwise have.
o 305 There was some talk yesterday about constraints on the Indian heavy water program and whether India needed U.S.-
supplici heavy water to manufacture its explosives or not.
We have another document which we did not submit as an exhibit to our submission of July Bth because quite frankly we didn't know where it came from, except that it came from the Department of State, but it was apparently a magazine article written some-time in 1974 in an Indian magazine.
I hesitate to make too much of it because as I said I do not know the source.
We obtained it under the Freedom of Infor-mation Act.
One of the points is that there are real substantial restraints on India's heavy water, and it doesn't have enough indigenous heavy water to supply its power reactors and it has some problems.
All this suggests, as long as the U.S.
continues to supply the materials even for use in safeguarded facilities, this frees other Indian facilities for other purposes than power production.
l I would be happy to submit this for the record.
CHAIRMAN ROWDEN:
Is this a document that just came into your possession?
MR. GREENBERG:
It was a document which we obtained under the Freedom of Tnformation Act.
l CHAIRMAN ROWDEN:
I am asking a question in terms of order-i liness here.
I have no objection to accepting it for the record.
I would like to know if there was any reason for it not being submitted before, u
r 306 MR. GREENBERG:
We did not submit it because we did not know the source and we were hesitant to submit it, but because
-the question was raised yesterday by Commissioner Gilinsky in his questioning--
' lou don't know what periodical this CHAIRMAN ROWDEN:
appreared in?
There is a note at the bottom that MR. GREENBERG:
No.
I really don't know.
I just cite says probably The Economist.
it and mention it for purposes of indicating, and I don't think it is necessary that it be in the record, for purposes of indi-and cating that there may be restraints on the Indian program, that as long as the U.S. continues to supply, we in some sense remove some of the constraints.
CHAIRMAN RONDEN:
You may submit it if you choose and fur-
~
nish it to the other parties.
as with the other document we will evaluate it for
- Again, the merit.
MR. GREENBERG:
Equally critical from a safeguards point of view is the question of reprocessing.
This, too, has been dealt with extensively.
Obviously if there are no safeguards which are applied to reproce'ssing facilities, there is a real pro-liferation risk.
Even when safeguards are applied, as the Com-It has mission is well aware there is a very serious problem.
been described by Albert Wohlstetter as a "Damocletion overhang."
is to say, if you permit a plutonium stockpile to build up, That that gives the if you permit reprocessing facilities to operate, country, even though safeguards may be applied, the ability to
307 very rapidly convert plutonium in stockpi es into weapons, with-out any real adequate warning to the IAEA or to a supplier nation.
It seems to us that any reprocessing at this time, safe-l guarded or not, poses real risks and that this shipment is directly related to that problem.
Here, again, I think this issue has been discussed and we need not belabor it, but what we tried to point out in our submission was our past policies l
with respect--
CHAIRMAN RONDEN:
This shipment is directly related to that problem.
Would you draw your own nexus?
MR. GREENBERG:
I was about to do that in referring to the history that we have continued to ship, leaving open the pos-sibility that reprocessing could or would occur within India.
j We have not given India a clear signal that reprocessing would be inconsistent either with the supply of fuel or with other U.S. assistance.
I think it has come time to give India that signal.
I think it is U.S.
policy, to call upon nations to refrain from developing national reprocessing facilities.
I think we are at a critical juncture.
CHAIRMAN RONDEN:
We did that with the French, with the l
Germans.
Again, I am talking about universality.
MR. GREENBERG:
I think we are talking about the terms of 1
1 supplying to countries that do not now have it CHAIRMAN ROWDEN:
There is no question that what we are dealing with here is something that is either indigenous to India, that is not obtained outaide of the Indian --
i M.
308 COMMISSIONER KENNEDY:
Mr. Greenberg,'have we not made that position clear?
in our comments and statements, vis-a-vis the Certainly, Brazilian arrangements?
Certainly in respect to recent events in Korea, in international matters of all types, it is my under-standing that this government has reaffirmed time and time again its opposition to the development of individual reprocessing capabilities, and the supply of such capabilities.
What is it that suggests India is not aware of that view?
MR. GREENBERG:
I think you make precisely the point I would like to make, which was made earlier, that as long as we leave open the option that we may approve reprocessing in India, and that option is left open unless we take firm action now, we vis-are undercutting our position, vis-a-vis the West Germans, a-vis the French.
We are legitimizing the moves of other nations to sell reprocessing facilities around the world.
I don't think you can distinguish the Indian situation from Pakistan, Brazil I think as long as we leave even the or from another country.
impression that we are willing to permit reprocessing to take place in India based upon prior commitments or otherwise, we are very hard put to make as strong an argument as we can to the French or to the West Germans, when they seek to sell repro-cessing facilities to third countries.
CHAIRMAN ROWDEN:
You attach no weight whatever to the prior existence of a government-to-government agreement?
MR. GREENBERG:
I don't think there was a prior commitment to approve --
1 A
1 309 CHAIRMAN ROWDEN:
Good falth.
MR. GREENBERG:
I think we are talking about good faith.
CRAIRMAN ROWDEN:
Even though you don't know what the verdict will be?
l MR. GREENBERG:
Apart from this particular license, the question of reprocessing has been studied extensively and we have knowledge as to reprocessing which we didn't have in 1974, which, indeed, we may not have had, two, three or four years ago.
I think it is fair to say any judgment we would make on the reprocessing issue would be a good faith judgment.
CHAIRMAN ROWDEN:
You would have us continue to do busi-ness with other countries which have indigenous reprocessing capability and draw that distinction between India and those other three countries?
MR. GREENBERG:
Which countries are you referring to?
Japan you mentioned.
CHAIRMAN ROWDEN:
Japan.
We had nuclear
- trade with West Germany.
With France.
With the United Kingdom.
Many coun-tries around the world.
I can't begin to enumerate.
MR. GREENBERG:
Great Britain is a weapons state.
CHAIRMAN RONDEN:
3elgium, Holland, West Germany.
MR. GREENBERG:
Are those national reprocessing facili-ties in Belgium, for example?
CHAIRMAN ROWDEN:
They have the facility in operation there.
I
1 310 MR. GREENBERG:
That, in fact, was multi-national.
CHAIRMAN ROWDEN:
And located in Belgium, there is no question they have the capability to develop their own repro-cessing.
l MR. GREENBERG :
Capability is one thing and existence is anothe..
CHAIRMAN RONDEN:
I am asking, if they did, would you cut off nuclear supplies to Belgium or Holland?
MR. G REENBERG :
Once again, I think the factual distinc-tion has to be made --
CHAIRMAN ROWDEN:
In West Germany, if the reprocessing facility isn't already in operation, one is already on the way.
E COMMISSIONERJ ENNEDY:
Can we take those hypothetical examples and try to distinguish what those mignt be?
MR. GREENBERG:
I think we have suggested somewhat some of the are.
Some relate to peaceful use assurances; another one is whether West Germany, Holland or Belgium have used their reprocessing facilities to separate plutonium and to manufacture an explosive device.
I think that factual dis-tinctions can be made, but I am not sure if from an overall policy standpoint, we weuld not have to take a hard look at those individual cases.
I wouldn't want te prejudge the outcome without knowing the facts.
Lenving aside the question of other facilities, there is j
the question of safeguard at Tarapur.
Our review of the infor-mation which we have obtained under the Freedom of Information Act, did not indicate there have been gross violations, but what
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311 4
that information has indicated, has been a history of problems, misunderstanding, confusion, a history which at the very least in our view calls for a very close look, to the extent we can l
l take looks, at the experience at the Tarapur facility.
l Now, the argument has been made that, we, in general, know l
what is the procedures of the IAEA are or how those procedures are applied.
The fact is we really don't know very much about what has gone on, in fact, at Tarapur, except insofar as the Indians, and I gather from what Kratzer said this morning, for the most part we have to rely upon what the Indians tell us, l
l with respect to the application.
That seems to me to be a somewhat tenuous basis on which to make judgement as to the actual adequacy of the safeguards conditions.
If there are problems with safeguards, if there are problems with assurances, is it necessary to take action with respect to this license, to deny it or condition it?
l Once again, I don't intend to focus on these issues in l
detail.
Our position is well stated, I hope well stated, in our petition, and in our submission, that we believe that an abso-l lute pledge with regard to the development of explosives from U.S.-supplied material or from other material, must be an inte-i gral part to any decision to continue to supply fuel to the l
Tarapur facility.
1 CHAIRMAN RONDEN:
Is that necessary to assure that the Tarapur fuel is not being used for any inappropriate purpose or does it serve a broader objective?
l
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312 l
f MR. GREENBERG:
It serves both objectives, clearly.
i I
As long as there is a possibility that a country will continue on an explosive program, there is a greater risk, or that U.S.-supplied materials might apparent risk, it seems to me, be diverted to that program under certain conditions.
there is the broader purpose of dissuading Of course, countries from going this route.
l if we continue to supply a country In fact, it seems to me, i
such as India with nuclear fuel, while it continues on an explo-sive program, how can we really distinguish the Indian program for that matter, Brazil, Argentina, 1
from any other program, Pakistan --
CHAIRMAN RCWDEN:
You are moving on a different level.
MR. GREENBERG:
The second point --
CHAIRMAN ROWDEN:
It is a legitimate point to look at, but I want to separate the two levels.
I I am interested in why you believe adding a promise on the i
part of the country, whose promise in one respect you don't I
l face value, would in any way enhance the confidence accept at you have in the future use of the materials supplied?
MR. GREENBERG:
I think to the extent we can get less ambig-uous and more stringent assurances in --
CHAIRMAN RONDEN:
Pebceful use assurances which cover peace-ful nuclear explosives?
You don't think that a party as artful as the way you describe could find ambiguity in even a commitment of that sort?
313 MR. GREENBERG:
I would hope not, and I haven't sat down and attempted to parse out the ways in which a very clever lawyer might even find ambiguities in the NPT.
CHAIRMAN ROWDEN:
Let's make it more universal.
MR. GREENBERG:
Or anyone else.
But it is a problem, a problem we have to deal with, and a fundamental problem.
94 nations have committed themselves to the proposition that peaceful nuclear explosives -- are incon-sistent with the peaceful uses cf atomic energy.
India is the rare case.
You asked the question this morn-ing, how many other countries subscribe to the Indian position.
Mr. Kratzer mentioned Brazil.
He didn't mention a single other country.
I think it would be important for the record to spell out just what other countries do subscribe to the Indian position, but it is clear it is in the great minority, that 94 nonweapon states take quite the contrary position.
Full fuel cycle safeguard I have already talked to.
Reprocessing we have already talked to.
Return of spent fuel has been the most discussed issue in the hearing the past two days.
We agree that return of spent fuel represents a very impor-tant lever in order to reduce the risk associated with the trans-fer of nuclear fuel.
CHAIRMAN ROWDEN:
What door does it leave open for spent fue. to come back to this country?
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1
I 314 The question is how long in some sense the MR. GREENBERG:
I commitment lasts.
fuel is I think if that agreement for the return of spent coupled with an agreement not to reprocess within India, we have l
got a much stronger --
CHAIRMAN ROWDEN:
Not to reprocess, anyway?
i Certainly not U.S.-supplied fuel.
MR. GREENBERG:
We would go beyond that and say any reprocessing is incon-
-sistent with the U.S. nonproliferation objective.
l It seems to me you can't look at the return of spent fuel i
in a vacuum.
I don't think the return of the spent fuel in and l
condition to allay all proliferation of itself is a sufficient concerns, which we believe --
I think CHAIRMAN RCWDEN:
All nonproliferation concerns, l
but there are con-you can find someone in agreement with that, cerns that U.S.-supplied fuel would be.used for a purpose other l
than that intended.
Would it not a,11ay that concern in a rather I
definitive way?
You have to tie it into the time frame of 1
MR. GREENBERG:
an agreement.
If it is tied into an agreement not to reprocess think we are a long way down the road.
as well, then I If the reprocessing is left open, then the return of the interim procedure which does not fuel might be a short-term, solve the long-range problems.
One other point I would like to make with regard to the return of spent fuel is that the suggestion made this morning l
l
315 4
that our agreement might involve a buy-back of separated plu-tonium rather than plutonium imbedded spent fuel rods, really does not suffice to meet the nonproliferation concerns of the Commission.
I think this was well brought out by Dr. Gilinsky.
We would be creating an incentive for nations to develop a national reprocessing capability with very little commercial justifica-tion, except to sell it some time in the future, and perhaps to j
use those reprocessing facilities for some other purpose.
I would like to conclude --
CHAIRMAN ROWDEN:
Before you conclude, turn the coin over.
MR. GREENBERG:
I wasn't going to let you down.
COMMISSIONER KENNEDY:
That remains to be seen.
MR. GREENBERG:
I may let you down in substance, but I am going to make a stab at it, in any event.
The State Department, the executive branch, has admitted the desirability of a lot of these objectives we have talked about, but it said, "A denial of the license, a cut-off of fuel, an effort to condition it, would impose even greater risks to U.S.
nonproliferation objectives."
We would disagree with that contention.
We believe that the history, first of all, of U.S.-Indian relations in the past with respect to peaceful nuclear explosive, as I mentioned l
l earlier, has indicated that continuing an effort to assure sup-ply and thereby theoretically asserting influence has not worked in the past.
l l
l l
316 O
b We believe that, as others have noted, continuing a supply of fuel will in fact aggravate the proliferation problem.
At least what it does, it does not provide any disincentives i
for other nations to follow on the Indian example.
Now, how can action have impact, what kind of impact can action have?
Ff'st, let's look at India herself.
The argument is made, well, the Unites States could deny or the Commission could deny the license, but that would have no real impact on India.
India would continue on its explc.,1ves program, it would l
declare the U.S. obligations had been breached, it would obtain fuel from other suppliers.
In the long run, we would be worse off rather than better off.
Essentially I believe that argument is implau'sible.
I believe we have substantial leverage over the Indians in this case.
It has been asserted by the executive branch and others that there is a real need for this fuel within India in order to meet the power requirements of the two states which the Tarapur reactors serve.
It is unclear whether there is any other supplier which could step into the breach at this time and provide enriched nuclear fuel to India to permit it to continue operation of those reactors.
In this regard, it seems we are in a much stronger position than the Canadians were, when they terminated assistance for the
317 s
Rajasthan reactors, because those reactors were natural uranium reactors and they were near completion.
There was really very little cost for the Indians in refus-ing to agree to the conditions proposed by the Canadians.
Whan we are talking about enriched nuclear fuel to supply the Tarapur reactors, we have a very different set of circum-stances and I believe substantially more leverage on the part of the United States to obtain conditions over the further transfer of fuel, which are consistent with our nonproliferation objectives What about influence on non-NPT countries?
Would U.S.
action to deny this license dissuade non-NPT countries from continuing explosive programs or from developing an explosive program?
It is difficult to find any hard facts in the record to 3
support the argument one way or the other.
It seems to me you really have to ask a kind of factual counter-factual question here.
You have to ask if the Indian example and continued U.S.
supply under current conditions has influenced these countries in any one direction.
As I mentioned earlier, in referring to the Dunn piece and the Gall piece, I think there is some evidence that continuing U.S.
supply and the continuing ability of India to obtain U.S.
supply and maintain its options with respect to nuclear explo-sives has had an impact on the intentions of countries such as Pakistan, Argentina, or Brazil.
CHAIRMAN ROWDEN:
Could I put that in a some/rhat broader context?
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318 a
We have focused on this with a view to whether it would or would not encourage or discourage other countries from follow-ing India.
Is there not a broader question we have to ask with regard to the perception of the United States as a stable or reliable supplier, one which preserves agreements it has entered into?
That question is whether it would or would not encourage other countries not to develop a nuclear weapons capability but to develop indigenous sources of fuel availability, whether a reprocessing plant or enrichment.
As you know, I think it is fairly derivable from past expe-rience that the erosion of U.S. capability to supply uranium was instrumental in causing others to develop their own capabilities, quite apart from the fact that Western Europe has problems of l
stability, and the other relationships that exist.
Is that not also a factor that this country has to be sensitive to in decid-ing whether it will or it will not go forward and implement the provision of the agreement which it entered into at some prior time?
MR. GREENBERG:
I certainly agree it is a factor.
CHAIRMAN RONDEN:
Obviously it is a factor, an important factor.
MR. GREENBERG:
I agree.
I think reliability is an issue we have to look at in the context of this par +icular case in asking what impact it would have.
I would agree, in one hand you are weighing in some sense, as said this morning by Mr. Kratzer, you are weighing in some sense the effect this might have on nations such as Pakistan,
i 319 e
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Brazil, whatever, in terms of their intentions, and you are weighing on the other hand the impact this might have on coun-tries who are concerned about the reliability of U.S.
supply.
This gets back to the question of how the U.S.
reaction would have to be transmitted to the world in some sense.
What struck me yesterday, during Assistant Secretary Kratzer's presentation, was the statement that conceivably if we made the right kind of forceful statement as to what the U.S.
position is, so there would be no misunderstanding on the part of any other country, we might well be able to carry out this policy of forcefully promoting nonproliferation objectives even without supplying in particular instances where a country's actions have been inconsistent with the expressed U.S.
policy.
I think that has to be a very important aspect of any decision which i,s ultimately implemented in regard to this license.
I think there does have to be an unambiguous expression of why the United States is acting the way it has, what our non-proliferation policies are.
I think ultimately that has to be the responsibility of the State Department in seeking to --
CHAIRMAN ROWDEN:
My questions yesterday in effect argued the other side of the proposition.
I think in all fairness, the position taken by Mr. Kratzer was that no matter what we say, how categorically it is stated, we do have hard experience of misconceptions and misperceptions
320 e
of actions that we take.
Actions that are cloaked in non-proliferation objectives to cover commercial considerations.
It is not a trouble-free road that you embark upon.
I think, as you and any member of this MR. GREENBERG:
there is no trouble-Commission is aware, as we are fully aware, And there are no free road in this area of nonproliferation.
easy answers.
In fact, all the answers are hard ones.
for the hard We think the Commission's obligation to opt answer if that is the one that is right.
CHAIRMAN RONDEN:
Or successful.
MR. GREENBERG:
Right.
What about other suppliers?
This is sort of the third prong of the issue with respect to our influence.
Here again what we might do is turn around present policy and aks how present policy influences supply.
Are we being successful, for example, in our efforts to turn aside France or West Germany from selling reprocessing I
facilities by continuing with our current shipments of nuclear fuel to India?
Here I think the answer is, although the facts are not entirely in, we may not be entirely successful, even though much of the material has not been released to the public.
Although I am certainly not familiar with all of it, it would seem to me it further that, based on press reports -- and I can't document than that -- the one instance where we sought to take a very i
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hard line, namely France's sale of reprocessing facilities to South Korea, was the one instance to date where we have been successful.
I am sure the Commission has greater access to the facts with respect to that particular transaction than I do, but it suggests that there is a need to make the effort, to set the example to other supplier nations, and that if we don't do that, we are not going to be successful in turning them aside from par-suing what may be rather shortsighted commercial considerations.
I don't intend to get into some of the risks of action on U.S.-Indian relations.
I think, as Mr. Kratzer correctly stated, and I would agree with him, those are not controlling.
I don't think they can be controlling from a nonprolifer-ation standpoint.
l Our concern is common defense and the security of the United States, what action is most consistent with the common defense of the United States.
U.S. relationships with India in general may bear on that question, but they are in the long run not going to be dispositive.
Finally, in light of the possibility of the Commission to take action, we would suggest that there is substantial flexi-bility here.
It was brought out this morning, or perhaps early in the afternoon, that the asserted need of India for fuel covered by
322 E
the License Application 845 did not come into fruition until February, which permitted a shipment in November.
To me that was just one more indication of the extent to which we have had rather unreliable information in the past with respect to India's needs for this. fuel.
When I was negotiating with the Department of State in June I was with respect to the extension of time for this hearing, categorically assured that that fuel had to be shipped by September 1st or there would be substantial repercussions within the Indian economy.
I think the Commission is quite right in asking for the fullest possible explanation by the Department of State on this issue with regard to the time at which this fuel is needed.
that I suspect Commissioner Gilinsky might well be correct, we really do have some rime here for the Department of State to implement Commission decisions.
By that, = hat I am suggesting is not only do we have sev-eral months now in which the Department may be able to make various representations to the Indian Government with respect to return of spent fuel, but further, even if there were a denial of the license at this time, perhaps a conditional denial rather than an outright denial, there is time for the Executive Branch to move to secure those conditions from the Indian Government without upsetting the fuel supply needs of the Tarapur Reactors themselves in the immediate future.
s
1 r
323 0
Mr. Chairman, members of the Commission, I have gone on probably far too long.
But we do submit that now is the time to act, and we submit that really the decision that the Commis-sion must make is to decline to issue the license under current i
conditions at this time, until such time as statutory mandated goals of the Commission are met.
Thank you.
I am open for any questions.
CHAIRMAN ROWDEN:
Thank you for a very effective presenta-I tion.
1 COMMISSIONER GILINSKY:
I wonder whether you think that the material can be brought back here safely and in a way that it is not going to upset the environment and so on.
1 MR. GREENBERG:
To be honest, Commissioner Gilinsky, the precise health and safety impact of the return of spent fuel to the United States are not issues which I personally have examined in the context of this proceeding.
On the Commission's injunction I focused on the issues stated rather than the health and safety issues.
It seems to me it would be inappropriate, really, on my I
part to comment on that.
i I would like to.
l l
)
COMMISSIONER GILINSKY:
I think we excluded health and safety 1
issues abroad.
CHAIRMAN ROWDEN:
Health and safety impact in the United i
States?
l COMMISSIGNER GILINSKY:
Of returned fuel.
I t
324
, 0-It seems to me the issues with respect to MR. GREENBERG:
l transfer of irradiated fuel elements from India to the United States are not probably very different than the issue of move-l ment of irradiated fuel elements within the United States itself, i
and the incremental contribution of the Indian fuel element l
shipments to the total risk associated with fuel movement within the United States must be marginal, and consequently my conclu-l l
slon would be that the risks are in all probability are out-that the health and safety weighed by the benefits in this case, risks are far outweighed by the nonproliferation benefits.
CHAIRMAN ROWDEN:
I thought you might have added that you had the ability to take care of that.
If I can supplement the record, I would MR. GREENBERG:
add than on.
I want to be sure I have your views COMMISSIONER KENNEDY:
on a couple of points.
If, as has been suggested it would be possible, the govern-ment of India should see our failure to issue a license or to as a breach of the agreement we have, would that cost deny it, be an appropriate cost for us to bear?
MR. GREENBERG:
I think there are two issues there, and they were raised by Mr. Kratzer yesterday.
I think we might well expect that the Indian government would claim a breach of the agreement of cooperation.
COMMISSIONER KENNEDY:
A claim would essentially have the same effect; wouldn't it?
325 o
MR. GREENBERG :
The question is, what it does after it has made that claim.
As Mr. Kratzer suggested, there may be sub-stantial constraints on the precise action that India would take, J
even though it might make a public protestation and claim the j
United States has breached its solemn commitments under the agreement for cooperation.
We have tried to point out in our submission, India has its own foreign relations concerns.
It is concerned about its relations with Pakistan, its relations with China.
It clearly would have to take these into account in deter-mining what course of action to take, what impact, for example, a decision to remove the Tarapur fuel from safeguards, would have on Pakistani intentions, might have on China's intentions.
COMMISSIONER KENNEDY:
I thought the 1974 event already had its impact on India, Pakistan --
MR. GREENBERG:
I don't think that excluded the possibility that there would be further incremental impacts on Pakistan's intentions.
We are in a situation where there is always a risk of esca-lation of conflicts, hostility and so forth, in escalation of incentives to go the nuclear weapons route.
I am just suggesting this is a factor which would have to be taken into account.
CHAIRMAN RONDEN:
To what extent did they take it into account, if they' decided they didn't want to pay the price to the Canadian?
i I
r 326 O
MR. GREENBERG :
I couldn't know.
CHAIRMAN ROWDEN:
They were willing to accept a breach, as we know.
MR. GREENBERG:
That is correct.
As I mentioned earlier, the record is unclear, as fas as I can tell, as to whether IAEA safeguards will continue over plutonium generated at the i
Rajasthan reactor.
The State Department indicated at one point that they would not.
I thought I understood Mr. Kratzer to say this morning that the safeguards might continue.
I don't have the precise reference in the record.
We asked those questions of the State Department, and I think they are 1
relevant.
CHAIRMAN ROWDEN:
Would it be well for us to play the role of a broker in that regard?
MR. GREENBERG:
Yes.
CHAIRMAN RONDEN:
Would you think us putting ourselves in a position where we breached, at least in the Indian eyes, our from our agreement with India, would it enhance or detract ability to play an honest broker role?
MR. GREENBERG:
It seems to me our position, as far as
{
if we f
Rajasthan reactors, our position is somewhat different are talking about being an honest broker, because our heavy
)
J water is at Rajasthan, and we were very heavily involved in the negotiation of the trilateral agreement between Canada and IAEA and India, which applied to those reactors.
So it seems to me i
I
I 327 l '
i quite apart from what we do in this proceeding, we have a con-tinuing interest in the application of safeguards at Rajasthan, legitimate grounds for taking a position in that.
CHAIRMAN ROWDEN:
I would doubt your theory in that, if you take it in this position, you should take it in many others.
I have no further questions.
I asked all of my questions during your presentation, hopefully, not at the expense of your presentation.
I know it wasn't, because you made a very fine presentation, a very fine contribution.
You, as well as the 1
)
other participants, will have the opportunity to sum up after i
a ten-minute recess.
When I say " sum up, I think it reasonable to contemplate a period of 15 minutes, if indeed that is necessary, for each of the participants to respond to the observations made by the others.
We will follow the same sequence as we have in connection with the original presentation:
Mr. Kratzer, on behalf of the State Department; Mr. Guhin on behalf of the Staff and Mr.
Greenberg.
Thank you.
(Recess.)
CHAIRMAN ROWDEN:
We will reconvene the hearing at this point.
As I stated at the outset of the proceeding, after the basic presentations by the participants, we would provide an opportunity and would encourage a relatively brief summation l
328 o
of the main points by the principal participants, by the execu-tive branch, by the NRC Staff, and by Mr. Greenberg on behalf We will accom-of the three organizations which he represents.
plish this in the order that we followed in the original presentation.
Mr. Kratzer, would you lead off, please?
MR. KRATZER:
Thank you, Mr. Chairman.
You have challenged me in suggesting that I should present a brief summation.
I will do my best to be guided by that recommendation.
First, Mr. Chairman, I think while it is a fact which is well known to the members of the Commission, it is a fact of such central importance to this particular licensing case that it should be reiterated.
is, we are dealing here with a proposed export which That takes place under an agreement f-- cooperation entered into in and far different agreement 1963, which is a different a
than the one which figured in the earlier events to which fre-quent references have been made here.
and I am referring to the 1974 Indian nuclear explosion, I
the relationship it may have had to agreements entered into with the United States and with Canada, a far different nature.
The 1963 agreement, furthermore, was renewed, in effect, was buttressed by important new understandings in 1974, which took place after the Indian nuclear test.
There has been no suggestion to my knowledge that there has been any change in the factual circumstances since that i
329 time, and since the resumption of U.S.
deliveries under the l
I 1963 agreement, as buttressed by the 1974 exchange of letters which has affected the relationship of the parties.
Now in our discussions here in the last two days, if I might say at this point I think these have been beneficial, we have been discussing a number of broad issues of U.S.
nonpro-liferation policies.
Many of these go far beyond the scope of this license l
procedure itself, I
i But the Commission -- and this is, I think, set forth very clearly in your own decision of May 7th -- must base its l
decision on two overall issues:
l First, whether the proposed export falls within the scope l
of an agreement for cooperation.
I think this export, it is acknowledged, clearly falls l
within the scope of the 1963 agreement that I referred to.
Secondly, whether the proposed export is inimical to the l
common defense and security, or to put it in the words more l
f closely consonant with those of the statute, the Commission cannot decide to issue the license if a proposed export is inimical to the common defense and security.
Uppermost in making that latter determination, I think i
1 again this was brought out in the Commission's determination l
l its opinion of May 7th, is the question of whether safeguards and assurances which control the use of this material are ade-quate to provide us with assurance that the material will not be used for unauthorized purposes.
330 R
We have made extensive reference today to the nature of we have those assurances, we have discussed the safeguards, stressed that in 1974, as I have already indicated, those assurances have been buttressed by what I believe is an entirely unambiguous undertaking on the part of the Indian government as to how it nay use plutonium separated from this fuel and from this reactor -- if that separation should take place.
assurances, we have Beyond the issue of adequacy of the of had extensive discussion, and I think this has been proper, how this proposed export relates to our overall nonproliferation objectives.
I think we can break that down into two parts:
how does it affect our nonproliferation objectives
- First, in connection with India itself.
The executive branch has stressed on a number of occasions that the failure of the United States to continue deliveries under this agreement, con-tinue the kind of fuel exports which are the subject of this licensing proceeding, may well give the government of India reason to feel that the agreement has been breached by the and that many of the important undertakings in United States, the undertakings that give us the very assurances that agreement, which we are so certain are necessary, might become inoperative by reason of that failure to deliver.
But, second, we have to look, and we have looked in these last two days at the effects of licensing or nonlicensing of what might be called our global nonproliferation objectives.
331 f
What is the effect c5 licensing or nonlicensing on the attitudes of other countries?
What kinds of signals will they derive from our course of action?
It has been suggested that because of the 1974 nuclear explosion in India, licensing by the Commission might be con-strued as a passive endorsement, or at least a lack of a clear-cut condemnation of that act which we all feel is highly j
unfortunate.
But I suggested, and I continue to suggest, that there is another aspect to that; that the exercise of the power that we l
have to withhold this material, particularly in light of recent j
developments-in the field of nuclear export policy, could be, and in all probability would be, construed by a number of coun-i tries as indicative of an inability of the United States to fulfill its commitments, indicative of the inclination of the United States to interrupt deliveries, to fail to meet our i
I commitments, when events have occurred of which we disapprove.
Not necessarily the event which occurred in this case, but many other events as well.
Because of that, I think there is a very high risk that our credibility as a supplier of nuclear materials, which I believe is a bulwark of our nonproliferation policy, would be seriously jeopardized.
I suggested in making these determinations, and in approaching its statutory responsibility that the Commission should think not only of the effects of licensing, approving
332 To try to strike the balance, the license, but also denying it.
as to the effects which I think is the statutory responsibility, of one or the other course of action.
I believe the Commission will appreciate In doing that, that much of the gains that we have made in the field of non-proliferation over the years have been the result of a policy a policy of reliability of supply, without of cooperation, which we would not be able to acquire the undertakings which we have acquired.
some length an approach to We have also discussed here at future cooperation with India, which could further strengthen further reduce such risks that may exist, the assuraces we have, that plutonium derived from this reactor would be used in an improper way.
and I repeat it now, I have stated on several occasions, I do not believe the undertakings we have from the Govern-that ment of India will be violated.
I would not be here in support of this appli-I assure you, if I in support of the approval of this application,
- cation, felt otherwise.
I do recognize that there are practical advantages to But what might be called a technical or a physical strengthening of those assurances.
the return of the irradiated material to That is to say, the United States.
these are I have given the Commission our assurance that that the f
going to be explored with the government of India, l
l 333 results of that exploration on a continuing basis will be reported to the Commission.
I want to close by saying that I compliment the Commission for the outstanding way, the very fair and very thorough way in which the hearings have been conducted.
I think they have served the valuable public purpose that was intended, and I hope that the information and presentations we have offered will be helpful to you in your deliberations.
Thank you.
CHAIRMAN ROWDEN:
Thank you not only for your comments but for very generous contributions.
Any comments?
j COMMISSIONER GILINSKY:
The participants in this hearing have differed on how this license ought to be handled but there seems to be wide agreement that return of the fuel, the spent fuel, is the most preferable outcome.
My question is, how can we reasonably expect to resolve the question of the return of the spent fuel so long as we leave the possibility open for reprocessing U.S.
fuel?
Are we, in indicating our preferred outcome, leaving the door open to reprocessing, merely raising the price of spent fuel beyond all reasonable amount, and making it more difficult to arrive at an agreement?
MR. KRATZER:
Commissioner Gilinsky, the best way to pursue an objective in discussions with other countries are always open to debate.
My own feeling is, I think it's based on sore experi-1 ence, is that one can usually achieve this objectives best by frank discussion and negotiation with the other party, in which i
334 a variety of possibilities, while not necessarily actively under discussion, remain open.
We have not The agreement does provide for reprocessing.
remains the case.
given our approval for reprocessing and that In order words, we are not called upon to make an immediate Reprocessing is impossible unless we make a determination.
But I do believe that it would be in positive determination.
a final the spirit of the agreement to reach a determination, determination on reprocessing, on a consultative basis with think it would be difficult to do it other-the other party.
I I believe our best course of action
- wise, i.e.,
unilaterally.
that is to pursue what we all agree is our preferred objective, of return of irradiated material.
As I said, we are not called upon to make a negative deter-l so mination on reprocessing and we haven't made a positive one, i
it isn't clear to me that it is proper, in terms of the agree-or consistent with good practice in discussing important
- ment, for this government to undertake that uni-issues such as this, lateral course of action.
I don't think to do so would lead to conditions between us that would contribute to achieving the preferred outcome.
COMMISSIONER GILINSKY:
In your summation, and I believe also yesterday, you spoke of conditions under which India T.ight I hope you are not suggesting, decide to breach the agreement.
or are you, that delay of the issuance of the license within l
terms allowed within the agreement would be grounds for the to breach this agreemenr and thereby free Indian government
335 them to use this material, plutonium, for whatever end, includ-ing explosive ends, that they wanted to use it for, or that this is in any way a reasonable interpretation of the agreement?
MR. KRATZER:
I believe I discussed yesterday, and I again referred to it today, to the circumstances which might lead the government of India to feel that we breached the agreement.
I believe I said yesterday we would not necessarily agree with any such determination on their part, but I don ' t believe it takes any legal training or any particular imagination to con-clude that if we fall to do what the agreement clearly was intended to accomplish, namely to supply fuel, they might feel we have breached the agreement.
Now, I agree the circumstances under which that might occur would be highly important to consideration of whether that atti-tude on their part, if they in fact took it, were justified or not.
But I think it would be unrealistic for us to assume that we have a completely clean slate, that we can decide or not decide to continue fuel deliveries at our own discretion with-out running that risk.
That is all I was trying to say.
Now, certainly there are conditions that the agreement pro-vides for that we can apply with respect to this.
We have, for example, an option to repurchase material which is in excess of their need and we can exercise that option.
I am not sure I would look upon it as a condition of continued fuel deliveries.
The option is there whether we make the continuing fuel deliv-eries or whether we don't, as long as the agreement is in force, but I don't think we have a clean slate.
I don't think we have
336 e
an open opportunity to decide hether and how to continue fuel deliveries under this agreement, without running a serious risk of a problem.
COMMISSIONER GILINSKY:
You are speaking of entire cutoff or delay?
I am concerned about us making it too easy for the Indian government to find fault with our behavior, by setting up obligations for ourselves which don't exist in fact.
MR. KRATZER:
I hoped I was careful enough to describe the conditions that I thought would gite them the right to reach that conclusion.
In fact, as far as I am concerned I am 1
not prepared to say that anything we do gives them the right to reach that cor.clusion accurately.
I was simply caying it's a risk we have to take.
It's a characteristic of a hearing such as this, which as I said a little earlier, was beneficial and I think it is beneficial, that in order to fully explore the issues, which I believe you wanted us to do, certain things have to be said which I frankly would prefer to say privately, but I don't know how to conduct a hearing in any way other than to give my frank judgments.
And this is one of those sensitiva areas.
COMMISSIONER GILINSKY:
It seems to me under any circum-stances, whatever the outcome, if this material ended up being used for other uses, I think we would all view that as extremely serious outcome.
MR. KRATZER:
An outcome of the utmost seriousness.
I think I can say without any reservation, or widespread review of opinions within the Executive Branch, that under all of our 1
1 l
F l
337 l
l existing agreements, I can't conceive of the circumstances in which material we supply is used for nuclear explosives, which would not be regarded as a serious situatien and from which i
serious consequences would not flow; I want to overcome any as I have, the con-concern you may have that by suggesting, tinuation of cooperation under this agreement, this long-
~
standing agreement, we would &n any way suggest to others that, given the nature of the understandings which are now very clear and unambiguous in this field today, a nuclear explosion would be regarded as a permissible activity or an activity not to be followed by serious consequences.
COMMISSIONER GILINSKY:
Part of these are obligaticns which cannot be gotten out of on the basis of a disagreement about shipping schedules or anything like that.
MR. KRATZER:
Well, if you are conce.ined about ti;e ship-ping schedules, here again I don't want to try to identify the degree of delay which would cause another party to feel we were not performing our obligations, and here again I am general-izing, but certainly we have to take into account the fact that there must be a point beyond which the delay is likely to be interpreted by another party as nonperformance.
I don't think it's realistic for us to believe that that isn't so.
COHMISSIONER GILINSKY:
But it seems to me that these disagreements have got to be interpreted in terms of the over-riding purpose of the agreement, which has to do with ncn-l proliferation of nuclear weapons.
338 9
MR. KRATZER:
And this agreement has been fulfilled, I m
think, by both parties.
CHAIRMAN ROWDEN:
Thank you very much, Mr. Kratzer.
Dr. Guhin?
MR. GUHIN:
Mr. Chairman, Commissioners, I kept my initial remarks rather short so this summary, I expect, will be even I would like to emphasize for myself and on behalf shorter.
of the NRC Staff, that we have presented our initial submission for these hearings, as stated before, on the basis of the infor-mation that we had at that time and the written submissions also.
Our submissions or ccmments focused particularly on safeguards and assurances because, of course, we consider that these are critical to the matter at hand.
I would like to emphasize that had the Staff come to the conclusion that the safeguards and assurances were not adequate, we couldn't have come to the conclusion we did in our paper at that time.
if the Staff had come to the conclusion that Furthermore, there was any evidence regarding intent to divert, of course we could not have come to the conclusion and the determinations that we did.
Having focused on those, I would like to note that since many of the submissions have gone into the possible consequences of issuance and of possible positive benefits, that they have set forth, of denial or strictly conditioning the license on the fulf ullment of certain objectives and changes in India's policy, we felt it incumbent upon ourselves to look at both
I 339 i
sides of the question, as I think we all must, to look at j
the possible implications of denial and how this might affect our nonproliferation and safeguard interests also.
At this stage I would like to conclude by saying we will of course be looking at the additional information which will be coming in for the record in this regard, the answers from the State Department and the other caswers to be supplied.
We will obviously be looking for information with respect to the pursuit of an approach looking toward the resolution of the plutonium management question.
The one that has been raised here quite frequently is the possible buy back option which will be pursued.
Needless to say, we will be looking at this carefully.
I would like to emphasize that we will be looking at that ir all of its aspects and ramifications, with all parts of the NRC, and also at what might be considered other possibilities for plutonium manage-ment and plutonium control that I think need to be looked at.
i We will also have to look at and evaluate, as this matter moves along, the circumstances or the kind of circumstances under which we think possible desirable assurances might best be pursued.
So at that stage I can only say we will be doing further work in this regard, and we will save any further summations and further evaluations until we see the answers to-the questions and also what movement there has been in
' pursuing the question of buy back and other possible plutonium management questions.
i
340 CHAIRMAN ROWDEN:
Thank you, Dr. Guhin.
Any questions?
(No response.)
1 CHAIRMAN ROWDEN:
Thank you very much for your contribution.
Mr. Greenberg.
MR. GREENBERG:
Before starting my summation I, too, would like to thank the Commission once again for this opportunity to participate in what I think is the important precedent in terms non-proliferation policy, the first public hearing ever of U.S.
held by the Nuclear Regulatory Commission or its predecessor in this vital area of public importance.
Although we may disagree with the Commission about the particulars of the hearing, I do think this has been an important and fruitful advance in our non-proliferation policy.
I think it has been 'he conclusion of everyone who has participated in these hearings that current conditions of transfer of special nuclear materials to India, do not represent the optimum solution in terms of U.S. non-proliferation objectives.
It is the conclusion of the Petitioner not just that these conditions are not optimum, but that they are positively incon-sistent with the common defense and security interests of the United States.
India has exploded a nuclear device under somewhat ques-both as regards use of Canadian-tionable circumstances, It supplied material and the use of U.S.-supplied material.
which has an extensive and unsafeguarded nuclear establishment It has a is free to proceed on a nuclear explosive program.
341 reprocessing capability, which is moving along rapidly and which the United States hcs not sought to date to cut off.
It has a growing stockpile of plutonium whose fut e is uncertain.
In our view, the United States policy in the past has been one of drift, which has permitted this situation which is fraught with danger, to develop.
In the course of our presentation at this hearing, we have sought to show that assurances with regard to peaceful use of U.S.-supplied material are at least subject to question, that safeguards over U.S.-supplied material are subject to doubt, that combined with the Indian nuclear program, all these questions and doubts inevitably lead to the conclusion that firm action by the Commission is required, if U.S. non-proliferation objectives are to be met.
It seems plain in retrospect that we should have acted much more forcefully in l
1974 when India tested its explosive device.
l We believe the exchange of correspondence between Dr. Ray and Dr. Sethna resulted in a premature agrement, not based upon a full understanding of the facts nor full understanding of the implications of the Indian test.
We do not believe that that exchange of correspondence constitutes the kind of commitment which should preclude the Commission from taking action new, which it deems most consis-tent with U.S.
common defense and security interests.
Of course, the action which the Commission takes has ramifications far beyond those of Indian nuclear developments.
l l
342 I
I think all the parties here agree to that proposition.
I in the world community We believe that there has been a sense rather than the United States has acted out of commercial, that non-proliferation objectives, for examplc, in our efforts to stem the sale of reprocessing facilities.
I think United States' leadership has been eroded because because there have beer we have not been forceful in the past, suspicions about our motives.
countries of the world would under-It seems to me that and they stand the special circumstances of the Indian case, forceful U.S.
are special circumstances, would understand that inconsis-action to obtain non-proliferation cbjectives is not tent with reliability of supply to those nations whose actions are themselves consistent with nor.-proliferation policy.
there is a difficult balancing to be We would agree that between the positive and negative undertaken by the Commission, this license.
Nonethe-impacts of action to deny or to grant less, it is our firm conviction that if we continue on the if we do not make a decision new to cut off present course, and to seek to secure the the possibility of reprocessing, possible conditions, over U.S.-supplied mate-most stringent rials, that this is the clearest signal to the nations of the world that weapons development and the development of indige-inconsistent with continued nous reprocessing facility, are not U.S. supply of equipment, techn31ogy and fuel.
I think the Indian experience in 1974 has painfully taught us the danger ci to nuclear explosives.
We tolerating ambiguity with respect
v 343 a
I started to close that loophole but it remains open as far as the Indian agreement is concerned and further action is required.
I think we stand in a critical position now, as far as reprocessing is concerned.
If we tolerate ambiguity, with respect to the development of national reprocessing facilities, there is a very real possibility we will see in the immediate future the same kind of unfortu ate results reflected in the Indian nuclear test in 1974.
Mr. Chairman, Members of the Ccmmission, it is our view that only denial of this license under current conditions will fulfill the mandate of the Commission to insure that no license is issued if it is inconsistent with the common defense and security interests of the United States.
l Thank you.
CHAIRMAN ROWDEN:
Thank you, Mr. Greenberg.
Any questions?
Mr. Greenberg, you sought the opportunity to participate l
in an open Commission hearing.
That oppertunity was afforded.
Obviously, you have pursued it with a great deal of effort and a great deal of energy and we appreciate the valuable contribu-tion you have made.
I assure you it will be given careful consideration.
Thank you.
MR. GREENBERG :
Thank you.
l CHAIRMAN RCWDEN:
Having received the testimony of all cf the scheduled participants and the sammation of the three main 1
i I
344 o
participants in the proceeding, the only renaining tack this 4
afternoon is to draw their oral part of our inquiry to a formal close.
Before we adjourn, there are several matters which I believe are appropriate to address for the guidance of the participants.
First, I would like to mention some further steps which are necessary to be taken by the participants in the matter before us.
As I stated when we convened yesterday, this hearing takes of place in the context of a pending application for the export special nuclear fuel for the Tarapur Nuclear Power Station.
Although the issues before us for the last ccuple of days are generally applicable to all fuel shipments to the Tarapur facil-ity, we have indicated our intention to withhold acticn on the pending license application XSNM-845 until the record on these proceedings is closed.
We, of course, need responses to the questions framed by petitioners and the NRC Staff which were forwarded by the Commission's Order of July 19.
We have provided a period of 15 days after closing of this hearing for the submission of answers to these questions.
I hope that these responses will also include, on whatever basis is appropriate, full explanation of the several matters as to which incomplete responses were necessarily given during the oral questioning.
I e
345 6
It may be that after a review of the transcript in this matter, the Commission will wish to pose additional questions to one or more of the participants.
If such a course of action appears desirable, we will allow 15 days from submission of our additional questions for response.
As to the transcript of the hearing, the Commission's secretary will make appropriate arrangements for obtaining the opinions of participants, regarding corrections.
Also, I would like to note Mr. Kratzer on the possible return of the spent fuel from the Tarapur Nuclear Power Station and the possibility of actively pursuing those discussions.
This is a matter under active consideration by this Commission, concerning XSNM-305, as amended.
The Commission desires to t. kept informed as to the progress of those discussions, to which Mr. Krat:er agreed.
In opening the hearing, I underlined the responsibility this Commission bears in addressing these issues.
I remarked also on the need for a matching sense of responsibility on the part of all participants in contributing their views, both to aid the Commission in its decision-making and to serve the broader purpose of public understanding cf these matters.
The hearings which have just been completed have made it clearly apparent that there are differing perspectives.
I i
_,, e Nevertheless, these has been a ver'; evident effort on the their views in a cogent, part of all the participants to state comprehensible, and sober fashion.
That we greatly appreciate.
In conclusion, I should state again, that the Ccmmission in will carefully consider the entire record developed here reaching its decision on export license XSNM-845, and we will announce a decision at a time consistent with full examinaticn of the further submissions of the participants.
Again, let me express my appreciation to all the partici-pants, and with that, I declare this hearing adjourned.
IWhereupon, at 4:10 p.m.,
the hearing was adjourned.'
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