The signing last month of a civil nuclear cooperation agreement between Australia and India has been greeted as an important step towards closer relations between the two countries, as well as bringing India into the global nuclear energy mainstream. These are worthy objectives, but not at any cost. 

Now that the text of the agreement has been quietly made public, some substantial departures from Australia's current safeguards conditions are evident. These suggest, disturbingly, that Australia may be unable to keep track of what happens to uranium supplied to India.

In this post I will explain what is wrong with the Australia-India nuclear cooperation agreement and why it appears that the Abbott Government may be abandoning Australia's longstanding safeguards requirements for India. In a subsequent post I will explain what can and should be done about it.

Negotiations for the agreement began under the Gillard Government in 2012, after Labor came around to an in-principle acceptance of uranium exports to India provided they were properly safeguarded. This was always going to be contentious, primarily because of Australia's longstanding policy against supplying uranium to countries outside the Nuclear Non-Proliferation Treaty (NPT).

It is short-sighted and self-defeating to make the agreement even more contentious by compromising Australia's safeguards standards. This will jeopardise bipartisan support for the agreement, raising the prospect of future governments suspending exports under it. It will also expose the agreement to potential legal challenge under the 1987 Safeguards Act, and it risks re-opening the wider uranium debate in Australia. None of this is in the interests of the Australian or Indian governments or of the nuclear industry in either country.

Two documents are critically important here. First, let's look more closely at the agreement itself. It departs in the following ways from Australia's standard requirements on countries receiving our uranium:

Consent to reprocessing – reprocessing, involving separation of plutonium from spent fuel, is the most sensitive stage of the nuclear fuel cycle. To date Australia's consent to reprocessing has been limited to the EU and Japan, and has been given on what is called a programmatic basis, i.e. Australia has approved the specific 'downstream' facilities using separated plutonium and the purposes involved. In this agreement, however, Australia has effectively given consent in advance for India to reprocess in accordance with an 'arrangements and procedures' document India concluded with the US in 2010. This covers safeguards at two reprocessing plants which India plans to build, but includes only a vague reference to management of plutonium, and nothing corresponding to programmatic consent;

Right of return – Australia's standard conditions include a right for Australia to require the return of material and items if there is a breach of an agreement. This agreement contains no such provision;

Fallback safeguards – Australia's standard condition is that, if for any reason IAEA (International Atomic Energy Agency) safeguards cease to apply, the parties are to establish safeguards arrangements that conform with IAEA safeguards principles and procedures and provide equivalent assurance. This agreement requires only that the parties consult and agree on 'appropriate verification measures', a vague term readily open to differing interpretations;

Settlement of disputes – Australia's standard requirement is for negotiation, backed by an arbitration process. This agreement refers only to negotiation, with no mechanism for resolving deadlock.

Even more consequential than the agreement itself may be a second, follow-on text that the public may never get to see, a so-called 'administrative arrangement' which sets out the working procedures for the agreement. Officials are presumably working on this at present. The key question here is, will this administrative arrangement enable Australia to track and account for the nuclear material that is subject to the agreement with India?

The administrative arrangement should set out detailed procedures for identifying and accounting for the specific nuclear material to which the agreement applies. This includes not only the initially-supplied Australian uranium, but all subsequent generations of material derived from it, especially plutonium. If it is not possible to apply the agreement's provisions to specific material, the agreement will be meaningless. 

To be effective, these procedures need to include a requirement for regular reports to Australia showing the flow of material under the agreement through the nuclear fuel cycle in India. Australia needs to be able to track and account for this 'Australian-obligated nuclear material'. This is both a proper public expectation and a legal requirement under section 51 of the Safeguards Act.

Bipartisan support for, and public acceptance of, uranium exports is based on the assurance that Australia is able to track our material and determine that our conditions are being met. Australia's safeguards requirements were developed by the Fraser Government, are in line with international standards, and have been applied under all our safeguards agreements ever since – today we have 22 agreements covering 40 countries. 

Disturbingly, it is reported that Indian officials will not provide Australia with reports accounting for material under the agreement, and that the Abbott Government seems prepared to waive this requirement for India. The same issue has arisen under India's arrangements with the US and Canada. In response, Washington has held firm: the US-India administrative arrangement has been outstanding for several years; reportedly the US is insisting on receiving tracking information and India is refusing.

In the case of Canada, the Harper Government gave in to India, an outcome described as the 'meltdown of Canadian non-proliferation policy'. The Canadian Government refuses to reveal the details of its arrangement. If Australia follows Canada down this path, it will put the wrong kind of pressure on the US, the EU and Japan in their own dealings with India.

Apparently India considers that its acceptance of IAEA safeguards should be good enough. But India's refusal to provide reports on Australian supplied material calls into question whether India will in fact identify and account for this material, as required by the agreement. If India will account for this material, the additional effort in providing reports to Australia should cause India no problem. However if it will not account for the material, India will be in breach of the agreement.

Why is India being so difficult on this issue? India has an expanding nuclear weapon program. It has not fully separated its military and civilian nuclear programs and some facilities are still dual-purpose. India's safeguards agreement with the IAEA does not impose the same restrictions as bilateral agreements in areas such as reprocessing, higher enrichment, retransfers to third countries, research and development or the production of tritium (which has uses in nuclear weapons). 

If India succeeds in delinking foreign-obligated nuclear material from individual bilateral agreements, making it impossible to identify which batch of material is covered by which agreement, then India could work a 'pea and thimble' trick in which no supplier could tell whether their material was being used contrary to bilateral conditions. The mere possibility of this is sufficient to call into question India's commitment to observing bilateral agreements. 

Without proper reporting, Australia has no way of knowing whether India is in reality meeting its obligations to identify and account for all the material that is subject to the agreement, and to apply Australia's safeguards conditions to this material. It is not good enough to simply say that we trust India because it has an 'impeccable' non-proliferation record (and India's record in any case is not 'impeccable').The reporting procedures are not optional; they are fundamental to Australia's ability to confirm that our safeguards conditions are being met. They have long applied to close and trusted partners such as the US, the EU, Japan and South Korea. There is absolutely no case to waive them for India.

John Carlson AM is a Nonresident Fellow at the Lowy Institute. He was Director General of the Australian Safeguards and Non-Proliferation Office and its predecessor the Australian Safeguards Office from 1989 to 2010.