This is the second of a series of articles in WMD Insights examining South Africa’s assumption of two positions of critical importance to global nonproliferation efforts. The first article highlighted South Africa’s new status as a non-permanent member of the United Nations Security Council for 2007 and 2008. (See “South Africa Takes Seat on U.N. Security Council,” WMD Insights, December 2006/January 2007.)  This article addresses the key issue facing South Africa as it takes up the chairmanship of the 45-member Nuclear Suppliers Group (NSG) this year.

 On January 1, 2007, South Africa became the chair of the 45-nation NSG, a group of the primary suppliers of nuclear technology whose members have adopted uniform export control rules, contained in the NSG Guidelines, covering transfers of nuclear and related dual-use commodities. [1]  South Africa has been selected to chair the NSG at a time when the group is poised to consider a significant change in the Guidelines: the exemption of India from the 1992 NSG embargo on nuclear cooperation with states that are not recognized as Nuclear Weapon States under the nuclear Nonproliferation Treaty (NPT) and that operate nuclear facilities that are not subject to inspection by the International Atomic Energy Agency (IAEA). [2] While there are a number of steps to be taken before the NSG rule change is ripe for decision, South Africa will nonetheless need to navigate several challenges regarding the issue during its tenure as NSG chair. Not only will it be called upon to build consensus on this contentious question within the organization, but it will also have to balance numerous competing policy goals as it reaches its own position on the matter.  These include its principled commitment to nuclear nonproliferation and disarmament, its role as a leading voice in the developing world, its commercial interests as a supplier of nuclear materials, and its relationships with India and the United States.

 South Africa is the only state to have successfully manufactured nuclear weapons, and then, beginning in 1989, to make the decision to dismantle those weapons and its weapons program. Since joining the NPT in 1991, South Africa has maintained a strong commitment to nuclear nonproliferation and disarmament and has played key roles in negotiations under the Treaty. South Africa has also been a strong advocate for guaranteeing the developing world access to nuclear technology, including enrichment and reprocessing technology, potentially capable of producing weapon-grade nuclear materials. This stance has placed it at odds with other major supplier states, which maintain that the sharing of such sensitive technology increases the risk of proliferation. [3] Now several major supplier states, led by the United States, are seeking an exemption for India, another developing state which chose a different course from Pretoria and has not renounced its nuclear arms and joined the NPT.  This will confront South Africa with a difficult test when it chairs and hosts the NSG plenary meeting in April 2007.

U.S.-India Deal to Top NSG Agenda
 The United States is seeking to end the NSG embargo for India in order to implement the July 18, 2005, U.S.-India Joint Statement on nuclear cooperation, under which the United States will open U.S. nuclear trade with New Delhi once certain conditions are met. [4] However, because India under the deal will continue to bar IAEA inspections (“safeguards”) at a significant number of nuclear facilities that it has not designated as “civilian,” it remains subject to the 1992 NSG embargo. Pakistan, Israel, and more recently North Korea are also subject to the NSG embargo, but the United States proposes to lift the ban only for India.

The United States presented information on its new understanding with India to the other 44 NSG members during 2006.  However, because changes to U.S. law were required before the United States could commence nuclear trade with New Delhi, the NSG, then chaired by Brazil, decided not to include the matter on the agenda of its 2006 Plenary.

In December 2006, the necessary U.S. legislation, known as the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 (“Hyde Act”), was enacted, clarifying many aspects of the proposed renewal of U.S.-Indian civil nuclear cooperation.  The act specifies that before the United States can begin nuclear trade with India, the NSG, operating under its normal consensus procedures, must change its guidelines to permit such trade.  In addition, India is required to conclude a safeguards agreement with the IAEA to cover all facilities that it is designating as civilian. [5]

As of January 2007, negotiations between the IAEA and India are just beginning. The negotiations are expected to be lengthy because India has declared that it will seek “India specific” safeguards to cover its civilian facilities, while the IAEA is likely to insist on the safeguards traditionally used in non-NPT countries, pursuant to IAEA Information Circular 66. [6]  The crucial question will be whether safeguards, once applied to specific facilities and materials, will remain in effect “in perpetuity,” even in the event of a termination or interruption of supply to that facility. At issue, for example, is whether IAEA inspections would continue on a foreign-supplied reactor and previously supplied fuel if a supplier chose to cut off shipments of fresh fuel following a future Indian nuclear test. The IAEA is likely to press for such permanent safeguards, while India is known to oppose them. [7]

An additional question is whether the NSG, when it considers altering its embargo for India, will adopt the same qualifications as in the Hyde Act. Most importantly, the U.S. law requires U.S. nuclear cooperation to be terminated if India conducts another nuclear test or violates or abrogates IAEA safeguards. [8]  If not all supplier countries adopted this rule, U.S. vendors would be at a disadvantage since, presumably, New Delhi would purchase nuclear equipment and fuel from supplier countries with the most lenient nonproliferation requirements.  The House-Senate explanatory report that accompanied the Hyde Act highlights this potential problem and calls upon the U.S. President to use the leverage of a veto at the NSG to ensure that the change in the NSG rules is consistent with the standards set in the U.S. law. [9]

South Africa’s Role as NSG Chair
As South Africa assumes the NSG chair against the backdrop of these unfolding developments, the group’s membership appears to be divided on lifting the embargo for India.  Along with the United States, France, Russia, and the UK are known to support the change, but Austria, Canada, Germany, Ireland, Japan, the Netherlands, the Nordic countries, and possibly others, are said to be uncomfortable with such a modification. [10] In addition, China, which is a supplier of civil nuclear technology to Pakistan, may seek to have the NSG lift its embargo for this nation, as well as for India, contrary to the U.S. proposal. Because the NSG operates by consensus, any member can block the rule change, although none has openly threatened to do so.

Based on informal comments by a number of foreign diplomats, it appears that some NSG members will attempt to defer consideration of the matter until India and the IAEA conclude their safeguards agreement. [11] If the goal were to have an agreement completed to the point required under the Hyde Act, this would require that India and the IAEA had taken all steps to complete the agreement prior to formal signature, including approval by the IAEA Board of Governors. [12] 

South Africa has not announced its own official position on the matter. However, during the October 2006 visit of Indian Prime Minister Manmohan Singh to South Africa, South African President Thabo Mbeki declared he had “no problem” with supporting India’s case at the NSG, but added that the group’s members were waiting for the terms of the U.S.-India agreement to be clarified by the U.S. Congress. [13] Moreover, given South Africa’s reserves of uranium, the fourth largest in the world, Pretoria itself may be interested in taking advantage of the proposed NSG rule change in order to engage in nuclear trade with India.  South African High Commissioner (Ambassador) to India Francis Moloi hinted at this prospect in a September 2006 interview, stating that the civil nuclear field “is an area that provides opportunity for us [South Africa and India] to cooperate.” [14]  In addition, the joint declaration adopted during the third India, Brazil, South Africa (IBSA) summit meeting in March 2006 highlighted the prospect of civil nuclear cooperation among them, including a vague reference to “forward looking approaches” to enhance such cooperation. [15]

Despite these indications of South Africa’s support for changing the NSG rules for India, South African officials have not publicly reacted to the terms of the agreement as refined by the Hyde Act. Pretoria may be awaiting further movement on steps to be taken by India, as well as evidence of an emerging consensus within the NSG before expressing a definitive position on the matter. Its role as chair may also encourage it to maintain a position of neutrality for the time being.

South Africa must also be mindful of its relationship with the United States, which is one of its largest trading partners. It has recently engaged in a number of bilateral initiatives with Washington on expanding trade, investment, and development assistance. [16] The United States has sought to promote the exemption for India with the other 44 members of the NSG and, according to news sources, has expressed hope that it will be able to obtain the necessary approvals during the first half of 2007—a hope which may be affected by South Africa’s handling of the agenda for the NSG this year. [17] Given the status of these negotiations and the difficult issues to be decided, it is highly unlikely that the agreement will be reached before the April 2007 NSG Plenary, and it is possible that it might not be completed during South Africa’s tenure as the group’s chair.

Leonard S. Spector and Peter Crail – Monterey Institute Center for Nonproliferation Studies