VZCZCXRO3754
PP RUEHBI
DE RUEHUNV #0350/01 2031629
ZNR UUUUU ZZH
P 221629Z JUL 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 9859
INFO RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0345
RUEHKO/AMEMBASSY TOKYO PRIORITY 0787
RUEHBI/AMCONSUL MUMBAI PRIORITY 0070
RHEBAAA/DOE WASHDC PRIORITY
RUEANFA/NRC WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

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 
 
UNVIE VIEN 00000350  002 OF 004 
 
 
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 
-------------------------------------- 
 
UNVIE VIEN 00000350  003 OF 004 
 
 
 
¶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