India - Articles

International Nuclear Fuel Bank: Promising Enterprise?

On 18 June this year, the developing countries blocked the IAEA Director-General’s request to discuss the proposal of an International Nuclear Fuel Bank (INFB), brainchild of the US-based Nuclear Threat Initiative (NTI), in the 35-nation governing board of the IAEA.  The INFB was supposed to provide a guarantee to the NNWSs to pursue peaceful uses of nuclear energy without developing sensitive nuclear technologies. Simultaneously, it also aimed to address the growing concern among the NWSs states over the proliferation hazards emanating from the spread of nuclear technology.  It was interesting that the opposition to the plan in the IAEA was led by the Indian delegate.

In the last four years, some 12 plans have been proposed by various states and non-state actors for an international or multilateral mechanism for providing nuclear fuel. Prominent proposals forwarded by states being the Global Nuclear Energy Initiative of the USA and the International Nuclear Fuel Cycle arrangements by Russia. Non-state actors such as NTI and IAEA have also come out with their own ideas. A number of reasons can be attributed to the renewed focus on Multilateralization of NFC. Firstly, the growing energy demands all over the world has led some pundits to declare a nuclear renaissance on the horizon, similar to the talks of political economy in the 70 and 80’s (Chernobyl and three-mile Island nuclear accidents reverse the cycle). Secondly, but more important, is the dual character of the nuclear technology. The legal loopholes in the NPT (withdrawal clause under article X) have allowed states to exploit technology received under article IV for non-peaceful uses, classic case being North Korea. This has made the NWSs very specific about technology and fuel transfers and has therefore restricted flow of technology and fuel to a selected few. This action and reaction chain has taken the form of a vicious cycle of accusation and counter-accusations levied against each other by the NWSs and NNWSs. Whereas NNWSs accuse NWSs of reneging on their commitments under Article IV of the NPT, the NWSs states cite the growing proliferation risks associated with such transfers as the rationale for their actions.

Multilateralization hopes to provide a solution to the above quandary. Multilateralization basically means placing sensitive parts of the NFC, especially the enrichment of U238 and reprocessing of the spent fuel under the control of a conglomerate of states or an independent international organization. The INFB helps to solve this dilemma by guaranteeing nuclear fuel to states which seek to exploit the atom peacefully, by creating stocks of nuclear fuel and negating possibilities where the needy states would not receive fuel supplies due to political reasons, the caveat being the full IAEA safeguards.  It also assures that non-proliferation criteria are met since no transfer of sensitive nuclear technology will take place.

Why then did the developing states block the request of the IAEA Director General despite the fact that the organization has been able to collect more than US$150 million for the proposed nuclear fuel bank? One of the chief reasons is the mistrust which has developed between the NNWSs and NWSs over their commitments in the NPT treaty. Eight years of the Bush presidency saw very little movement on disarmament whereas non-proliferation was highly glorified. Also, the obligation of the NWS under article IV to provide technology to the NNWSs for PUNE was highly diluted and fuel and technology transfers became highly political in nature. Specifically, the developing countries are highly skeptical over any further measures regarding the tightening of the noose of non-proliferation. Additional Protocol (AP), which has been made a stipulation in many proposals, has been a bone of contention, with countries such as Brazil, Canada and South Africa vehemently opposing any move to universalize the AP. Moreover, the NTI proposal lacked clarity since the specifics of the INFB were not delineated beforehand and were to be discussed subsequently in the IAEA.  Concerns such as whether states seeking assistance from the INFB will be allowed to carry on with indigenous ENR facilities was one of the major factors.

The Indian opposition in the IAEA appears strange since in April 2008, Foreign Secretary Shiv Shankar Menon, while addressing the IISS-CITI Global Forum in Delhi, showed enthusiasm for India’s full participation in the NFB and even considered India to be a possible site for such a facility. One of the reasons for such a contradictory behaviour within the IAEA could be the ambiguity surrounding the status of the non-NPT members in the draft proposal. Even if non-NPT members are accepted, it is a better strategy to oppose the proposal since it will also allow Pakistan to acquire nuclear fuel and will lead to further acceptance of its nuclear programme. Secondly, since India has already concluded a civilian nuclear agreement with the US, the need for guarantees of nuclear fuel appears to be less of a concern.

Though the idea of multilateralization has gained currency in the recent time, there remain a number of impediments. Deferring interpretations of NPT obligations, chronic mistrust among the nuclear haves and have-nots and self-maximizing strategies of individual states have made the whole exercise very complex.