US-India Meeting on Arrangements and Procedures for

UNCLAS SECTION 01 OF 04 UNVIE VIENNA 000350

SENSTIVE
SIPDIS

STATE FOR P, T, ISN, EEB, IO/T
DOE FOR NNSA - GOOREVICH, OEHLBERT
NRC FOR OIP - DOANE
NSC FOR SCHEINMAN, CONNERY

E.O. 12958: N/A
TAGS: ENRG PREL TRGY KNNP IN JP
SUBJECT: US-India Meeting on Arrangements and Procedures for
Reprocessing of US-obligated nuclear material, Day One


1. (U) A U.S. delegation from State (ISN and L) and DoE/NNSA met at
UNVIE July 21-22 with Indian counterparts for initial exchanges on a
prospective agreement addressing future Indian reprocessing of
nuclear material pursuant to our bilateral Agreement for Cooperation
Concerning Peaceful Uses of Nuclear Energy. Charge attended at the
outset of talks; A/DCM and Mission notetaker were present
throughout. Full participants list at para 22.

Opening Remarks/US Explanation of the Draft
--------------


2. (SBU) Richard Stratford (State/ISN) informed the Indian
delegation that the purpose of the draft agreement was to fulfill
the requirements of Article 6(iii) of the US/India Agreement for
Cooperation for completion of programmatic approval for reprocessing
US-controlled nuclear material. The arrangements and procedures
agreement, in addition to setting safeguards standards, would
provide a means to answer key questions Congress would ask with
regards to ensuring the appropriate level of security and safeguards
applicable to plutonium produced at an Indian reprocessing plant.
The best method to provide this assurance was through guarantees
that India would follow the safeguards arrangement that Japan had
implemented at Rokkasho, in which the U.S. and the IAEA have high
confidence. The U.S. drafted the document on Arrangements and
Procedures by examining the safeguards at Rokkasho, as detailed in a
Department of Energy paper ("Reprocessing Plant Safeguards in the
Context of Agreements for Peaceful Nuclear Cooperation"). In the
interest of full disclosure, Stratford also informed the delegation
that he had shown the draft to two IAEA officials, one senior level,
(neither further identified),and that the officials had helpfully
suggested that the draft avoid being prescriptive of the safeguards
relationship between the IAEA and India, but rather descriptive,
allowing the IAEA to request and receive what it needed to apply
effective safeguards. The Indian side thought that consulting with
the Agency was a helpful step and proceeded to request a meeting for
the following day with the DDG/Safeguards Heinonen to pursue their
own consultations.


3. (SBU) Dr. Ravi Grover, head of the Indian delegation, first
sought to clarify the nature of the meeting, based on his
understanding following signing of the Agreement on Cooperation that
an informal meeting would occur to exchange concepts and ideas,
prior to a formal meeting to work through specific language.
Stratford noted that time was short to meet the six-month deadline
established by the Agreement for Cooperation for opening
negotiations, and whether one called the meeting formal or informal,
the important point was that the U.S. was not dragging its feet and
wished to conclude the reprocessing agreement as soon as possible,
and well within the one-year deadline for completing negotiations.


India's Initial Concerns
--------------


4. (SBU) Grover's initial concerns with the draft included: the
need for acknowledgement of India's military nuclear facilities
outside of safeguards; the possibility that safeguards would make
reprocessing prohibitively expensive and thereby impact the
economics of India's growing fast breeder reactor program; and, the
desire for greater use of previously vetted language from India's
safeguards agreement with the IAEA. Stratford indicated in response
that the U.S. had no intention of affecting India's nuclear
activities outside of the agreement. He suggested that the Indian
delegation speak with the Japanese about the cost of implementing
safeguards at Rokkasho, and noted that other countries have agreed
to complex safeguards arrangements. With respect to use of India's
safeguards language, Stratford noted that it may be appropriate in
some cases and the U.S. side would look at it, but if the Indian
side merely wanted to quote from India's INFCIRC/66 basic safeguards
agreement, that would not be sufficient, as reprocessing safeguards
are much more recent and much more complicated than the reactor
safeguards detailed in India's existing agreement with the IAEA.

U.S. Walkthrough of the Agreement
--------------


5. (SBU) Stratford provided the Indian delegation with background
on the selection of language for several key parts of the document.
Article 6 (management of separated plutonium) was not intended to
impact negatively India's fast reactor program, but to ensure the

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separated plutonium was guarded sufficiently. Article 7 (suspension
of programmatic consent) followed from Article 14.9 of the Agreement
for Cooperation and was modeled on language used with EURATOM.
Circumstances for suspension given in the EURATOM case included a
serious threat to U.S. security or increased proliferation risk
following from acts of war, internal disturbances leading to a
threat of war, or a party becoming subject to IAEA sanctions.


6. (SBU) With respect to Article 2 (substance of IAEA safeguards),
Rich Goorevich (DOE/NNSA) emphasized that implementation of
safeguards in the design phase is cost-effective, per India's
concerns. Stratford emphasized the importance of Article 2.2.c.vi
(the need for an annual cleanout inventory) and noted for
illustrative purposes a past problem with MUF at a plutonium
facility in Japan. Grover expressed concern with the limitations of
instrumentation if the cleaning required emptying of tanks, but Jon
Sanborn (State/ISN) clarified that the cleaning would require moving
solution to a container in which the plutonium content could be
measured, not removing all materials from the facility.

Indian Concerns about Shared Instrumentation
--------------


7. (SBU) With respect to Article 2.b.iv (shared instrumentation),
Grover indicated that India would provide process control
instrumentation, but expressed concern about shared instrumentation
- specifically, that it would impose financial burden on India and
limit plant capacity. He indicated that India would provide the IAEA
with the location for the instrumentation and help the IAEA to
install it, but the IAEA should provide its own instrumentation.
Stratford in response indicated that the financial matters should be
discussed between India and the IAEA and suggested that India speak
with Japan about the safeguards at Rokkasho. Sanborn noted that
instrumentation sharing was a cost reduction issue. Grover noted
also that India would examine the possibility of providing the IAEA
with the data from India's instrumentation.

India's Concerns with Disclosure of
Physical Security Details
--------------


8. (SBU) Grover noted that physical protection issues are very
sensitive in India and emphasized the importance of maintaining
confidentiality of information. He was specifically concerned about
references to "consultation" in 1.1.e, 4.1, and 4.2(consultations on
physical protection and storage). Grover indicated there would be
intense discussion in New Delhi on the issue.


9. (SBU) Stratford described, by way of example, the U.S.
small-team visits to countries in order to review physical security
and provide recommendations on upgrading physical protection for
nuclear facilities - discussions which are welcomed by our
cooperating partners. Goorevich also emphasized the importance of
nuclear security to the Obama Administration, in light of the need
to provide some guarantee that the material would be properly
protected. Stratford later suggested that the U.S. take the lead in
drafting an Agreed Minute to address the issue. Grover indicated
that the Minute should also address his concern with the language
regarding physical security "standards" in Article 1.1.e
(notification to the U.S.).

Article 7: Request to Include
Financial Compensation
--------------


10. (SBU) Grover expressed concern with the absence in Article 7 of
financial compensation for a suspension of the Arrangements and
Procedures. Specifically, he indicated that a suspension lasting
more than several days would impact plant operation, based on the
small amount of material stored on site, and could therefore impact
fuel fabrication and electricity production at the reactors (more
specifically fast breeder reactors) using MOX fuel. Grover also
indicated a need to further coordinate 7.1 (suspension of
programmatic consent) with New Delhi. Stratford indicated he would
work on new language to address the compensation issue and
emphasized that the U.S. used the same language with EURATOM, a
close ally.

Article 5: Request to Address Finality
--------------

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11. (SBU) Grover also expressed concern that the Arrangements and
Procedures did not appear to have finality in terms of the
relationship, specifically in light of Article 5 (i.e., the language
calling for a working group on environmental protection, which
suggested unending discussions). Both sides worked to modify
Article 5 to read as follows: "The Government of India shall follow
best practices, as established in its national regulations, for
minimizing impact on the environment from any radioactive, chemical,
or thermal contamination which may arise from the operation of the
facility." Stratford encouraged the Indian delegation to consider
the full set of possible environmental concerns to which the new
statement could apply.

Indian Concerns about Application to Future Facilities
-------------- --------------


12. (SBU) Grover also expressed concern on a general level that the
Arrangements and Procedures addressed only a single facility,
although the lifespan of a reprocessing plant is far shorter than
that of a reactor and therefore another plant would become necessary
in the future. Stratford offered to consider language indicating
that the conditions of the document would apply to follow-on or
other facilities constructed under the same circumstances and
subject to IAEA safeguards in perpetuity. However, that may depend
on whether the DOE "subsequent arrangement" can address multiple
facilities or whether a submission of the arrangement to Congress
can deal with only one facility at a time. Stratford also expressed
the importance of applying safeguards that are state-of-the-art at
the time a follow-on facility is constructed, noting that the
safeguards being agreed to today (for use, notionally, ten years
from now) may be totally out of date thirty years from now.

Article 3: Indian Desire to Limit Consultations
-------------- --


13. (SBU) Grover expressed concern with Article 3 (a simple
agreement to consultations at the request of either Party),which
the U.S. delegation felt demonstrated a desire by India not to have
to interact with U.S. officials on any subject at any time, unless
at India's request. Stratford indicated that he expected requests
for consultations to be limited in practice, but that either side
might request it from time to time. He emphasized that Article 3 is
a simple mechanism and recommended that it remain unchanged. Grover
suggested the following rewrite: "The Arrangements and Procedures
will be implemented in accordance with the provisions of 12.1 of the
Agreement for Cooperation. Consistent with Article 13 of the
Agreement for Cooperation, the Parties undertake to consult at the
request of either Party regarding the implementation of these
Arrangements and Procedures to avoid delaying, hampering, or
hindering the peaceful nuclear program of the Government of India or
its peaceful nuclear cooperation with third countries." Stratford
indicated the U.S. would consider the change, but that the language
appeared over-drafted and Washington may feel it suggests a "large
amount of suspicion."

Other Questions from Indian Delegation
--------------


14. (SBU) Grover noted that Article 6 (management of separated
plutonium) appeared to be intrusive and asked that the reference to
budgetary requirements be deleted. He accepted Stratford's
suggestion of rewriting the text to delete the reference to budget
considerations but retaining the agreement to manage plutonium in
ways that prevent proliferation, protect the environment, workers
and public, and balance supply and demand.


15. (SBU) Grover asked whether provision of design information, as
per Article 2 (substance of safeguards) would create a problem with
Intellectual Property Rights, as well as a possible proliferation
concern; Stratford indicated that the IAEA would keep such
information confidential.


16. (SBU) Grover questioned the lack of specificity in the phrase
in 2.2.b.ii on maintaining an accounting system that conforms to
"international standards" (what standards?). Stratford changed it
to "...accounting system as determined by the Agency..."


17. (SBU) In Article 2.2.a.iii (in-process material measurement),
Grover sought to change "minimization" to "optimization" to better

UNVIE VIEN 00000350 004 OF 004


account for the fact that safeguards was one of many elements
considered during facility design. He indicated the need to consult
with New Delhi with regards to language on recycling and solution
mixing. Stratford said he would look at it.


18. (SBU) Grover sought clarification on the meaning of "type" in
Article 1.1.a; Stratford clarified that the term referred to PUREX,
aqueous, or other processes. The specific type of reprocessing
technology must be known in order to develop proper safeguards.


19. (SBU) Grover noted that reference to INFCIRC 153 was
unacceptable to India, given that India's safeguards agreement
followed from INFCIRC 66. Stratford noted that any reference could
be changed easily. (Note: The draft text under discussion contained
no such reference. End Note.)


20. (SBU) In summary, Grover indicated Article 2 would be discussed
at a later date. He approved 1.a, 1.b, and 1.d, noted that he had
already provided edits on 1.e. and would have to discuss 1.c with
New Delhi.

Assessment and Next Steps
--------------


21. (SBU) The delegations agreed to meet the next afternoon,
following India's meeting with the IAEA DDG/Safeguards. Overall,
USDEL was pleasantly surprised with the first day's results. The
meeting started with the Indian delegation seemingly unable to get
into specific language. However, after multiple assurances that the
U.S. side wants to finish the agreement quickly, and a lunch break
call to New Delhi, the Indian del proceeded to work through all of
the text except for the preamble (suggestions to come later) and the
safeguards article (India needed to talk to the IAEA). Stratford
suggested that progress would come even faster if we held a
trilateral meeting with the IAEA, as the U.S. had done with Japan
and the IAEA and with Russia and the IAEA (the Trilateral
Initiative). Grover liked the idea and said India would consider
it. The sides agreed to reconvene on the afternoon of July 22.

Participants
--------------


22. (U) Indian Delegation:
Dr. R. B. Grover, Director, Knowledge Management Group,
Bhabha Atomic Research Centre (BARC)
Shri S.Basu, Associate Director, NRG, BARC
Dr. K.L.Ramakumar, Head RACD, BARC
Shri A.Gitesh Sarma, JS(ER),DAE
Shri Ranajit Kumar, SO/H, CnID, BARC
U.S. Delegation
Dick Stratford, ISN/NESS
Julie Herr, L/NPV
Jonathan Sanborn, ISN/MNSA
Rich Goorevich, DoE NA-
Sean Oehlbert, DoE NA-
David Jonas, General Counsel
UNVIE A/DCM Mark Scheland
Notetaker: Lisa DeKeukelaere


23. (U) USDEL cleared this report.


PYATT