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HindustanTimes Fri,29 Aug 2014
Deconstructing the Deal
P Chidambaram
July 20, 2008
First Published: 00:14 IST(20/7/2008)
Last Updated: 01:58 IST(20/7/2008)

We swear by the rule of law, but we do so with little understanding of how law has entered every aspect of human life. Much of this is because there is widespread and appalling legal illiteracy in the country, and this is so even among those who are obliged to be legally literate in order to discharge their functions. I include in this category political leaders, elected representatives, civil servants and members of the media.

From my years of experience in government, I can say that law is the critical factor in any executive or legislative process. The whole edifice of governance stands on a set of rules and regulations that constantly undergo review and amendment. There is no aspect of government that is not dependent upon a thorough understanding of law and legal principles. Hence, the men and women who are in charge of government — as well as those who sit in the Opposition — are obliged to be legally literate.  Alas, not all of them are. Consequently, when opinions are formed without adequate legal knowledge, and when such ill-formed opinions are expressed collectively, they cause enormous damage to political discourse, to the polity and to the future of millions of people.

I thought I might use this opportunity to discuss, objectively and dispassionately, an issue that has occupied centre-stage in the last few weeks. It is the debate on the civil nuclear cooperation between India and other countries including France, Russia and the United States.

Suppose this was a case that was before a court of law. What are the essential facts? They are that since 1998, India’s nuclear isolation has been complete and India has been denied access to nuclear reactors, fuel and technology. The total installed capacity of nuclear power in India is 4,120 MW. Thanks to our nuclear isolation, the capacity utilisation has steadily declined from a high of 90 per cent in 2001-02 to 63 percent in 2006-07 to 54 percent in 2007-08.  India, therefore, wishes to end this nuclear isolation and gain access to reactors, fuel and technology in return for the promise that certain civilian nuclear facilities — to be solely determined by India autonomously — would be segregated and placed under safeguards in a phased manner. Simultaneously, India will pursue its strategic nuclear programme without subjecting that programme to any safeguards or inspection.

The further facts are that in order to access nuclear reactors, fuel and technology from the US and other supplier countries, India has agreed to enter into a safeguards agreement with the International Atomic Energy Agency (IAEA) of which India is a founder member. The US has agreed to work with friendly countries to obtain from the 45-member Nuclear Suppliers Group (NSG) a waiver for India to enable nuclear trade and cooperation with India. Once these two steps are completed, then and then alone would India be able to seek and obtain cooperation in civil nuclear energy. France, Russia and the US have indeed promised such cooperation, and there is a likelihood of such cooperation from some other countries such as Australia, Canada, China and Japan.


For the time being, let us assume that these facts are correct. In a case between the protagonists and the antagonists of civil nuclear cooperation, what are the issues that arise for decision? In my view the issues are:

(i) Is it a necessary condition for civil nuclear cooperation that India should enter into a safeguards agreement with the IAEA?

(ii) Is it a necessary condition for civil nuclear cooperation that India should obtain a waiver from the NSG?

(iii) If these two conditions are satisfied, is there a likelihood that India would be able to enter into agreements or  civil nuclear cooperation with other countries?

(iv) Has India entered into agreements with one or more countries for civil nuclear cooperation?

(v) What is the legal status of the India-US Agreement on Civil Nuclear Cooperation, popularly known as the 123 Agreement?

(vi) What is the meaning of the phrase ‘operationalising the 123 Agreement’?

(vii) What is the impact of the Hyde Act on the implementation of the 123 Agreement?

(viii) Any other issue.

If a reasoned debate had taken place, the answers to some of the issues would have been self-evident and the answers to the other issues could have been found through the application of law and logic to the facts of the case. The answers to issues (i), (ii) and (iii) are self-evident; they are in the affirmative. An agreement with the IAEA and a waiver from the NSG are indeed pre-conditions and, if these steps were completed, India would be able to enter into agreements for civil nuclear cooperation with other countries.  Issue number (iv) is a question of fact and the answer is that India has entered into such agreements with the US (on July 20, 2007), France (on January 25, 2008) and Russia (on February 11, 2008).

Issue number (v) is a mixed question of fact and law. Article 2.2 specifically states that it is an agreement “to enable full civil nuclear energy cooperation between the Parties”.  It contemplates such cooperation on “an industrial or commercial scale”. Under Article 16, the agreement shall enter into force on a date on which the parties exchange diplomatic notes informing each other that they have completed all applicable requirements. The legal status of the 123 Agreement is that it has not yet entered into force and, even after it comes into force, India and the US would have to enter into further agreements to fulfill the objectives on an industrial or a commercial scale. Therefore, the answer to issue number (v) is that the 123 Agreement is an enabling agreement and no more.

The answer to issue number (vi) logically follows the previous answer. “Operationalising” the 123 Agreement would mean that the Parties would have to complete all pre-requirements, exchange diplomatic notes and agree upon the date on which the 123 Agreement would come into force. Even after it comes into force, there is nothing automatic, and it would be necessary to enter into further agreements.

Issue number (vii) is a pure question of law and hence has to be answered applying the principles of international law and the principles of interpretation of statutes. Article 16.4 of the 123 Agreement states that the “agreement shall be implemented in good faith and in accordance with the principles of international law”. Under customary international law as well as the Vienna Convention on the Law of Treaties, 1969, a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty. When the US Congress ratifies the 123 Agreement, it will be the last expression of the legislature on the subject and will prevail over any earlier domestic law.  Besides, under Article VI (2) of the US Constitution, all treaties made, or which shall be made, under the authority of the US, shall be the supreme law of the land.  In any view of the matter, the Hyde Act, which is a domestic law, cannot bind India and cannot interfere with the implementation of the 123 Agreement which, when ratified by the US Congress, will be a bilateral treaty between two sovereign countries.

I shall stop here. I urge you to join the debate. I urge you to help your fellow citizens understand the legal aspects of the controversy.

(P. Chidambaram is the Union Finance Minister. This is an edited excerpt from the Convocation Address he delivered at the Sixth Annual Convocation at NALSAR University of Law, Hyderabad, on July, 19, 2008)

Counterpoint will be back next week


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