78 Letter from Timbs to Plimsoll1

Sydney, 31 December 1965

Confidential

Please refer to your memo. of the 30th November, 1965, your reference 720/6/7,2 relating to the report by Professor Baxter on his visit to India for the inauguration of the plutonium separation plant.3

I note that the Canadian authorities have taken exception to paragraph 21 of Professor Baxter's report which states—

'The Rajasthan Reactor could be operated to produce military plutonium and if India produces its own fuel no one would know it was being done.'4

You will recall that the Commission did not initiate action to present copy of this report to the Canadians for the reason that we are well aware that the Canadians have been a little naive in their nuclear dealings with the Indians and are very sensitive about the rather loose provisions of their agreement with the Indians for safeguarding the Rajasthan Reactor. In these circumstances, whilst the following views may be passed on to the Australian High Commission in Ottawa, I would be grateful if they were not transmitted to the Indian or Canadian Governments.

Professor Baxter has commented as follows—

'With regard to the effect of the Rajasthan Reactor on the military situation my statement was not based upon any misunderstanding. The Canadian reaction is, of course, an understandable one, but my view is that the undertakings between these two countries would cease to have any force at all in the event that India decided upon a military programme at a time of military danger. While international agreements are, of course, important and binding upon the parties, history shows only too clearly that they can be set aside very easily when the real and vital interests of a country are concerned. My personal view is that when the Rajasthan plant is built and operating and when India possesses its own facilities for making fuel from its own uranium, the diversion of the plutonium from that plant to military purposes will be a decision resting solely in Indian hands and the agreement with India would do no more than let the Canadians know what was in fact being done. They would clearly be powerless to prevent it.'

As the Canadians seem to rely rather heavily on Article XIII of the Canada/India Agreement relating to the Rajasthan atomic power station, the following points may be of interest to you-

  1. The Indians have not yet conceded to the Canadians any right to interfere in the operating schedule or fuel cycling of the reactor. Therefore, if the Indians so desire, they can produce as much short burn-up plutonium as they desire, ironically enough, even when burning fuel supplied by Canada. Technically all the Indians are required to do is to account for this plutonium in their recording system, but see (b) below.
  2. A close reading of Article XIII will disclose that it is not as effective as the Canadians would seek to make out. For example, Canadian inspectors would have access to all parts of the Rajasthan plant, etc., to all other places where fuel or fissionable material used in or produced by the station, or an equivalent amount thereof, is being used, stored or located. In other words the agreement introduces the principle of 'substitution' which is the means by which nuclear powers, e.g., the U.K. or the U.S.A., avoid inspection of dual purpose plants which process military materials and also materials subject to safeguards. Provided therefore, the Indians substituted an equivalent amount of fuel or fissionable material, the destination of short burn-up plutonium produced by the Rajasthan Reactor would not on our interpretation of the Agreement be subject to inspection by the Canadians.
  3. Inspection in accordance with Article XIII is 'whenever the designated technical representatives of other governments so request'. There is a world of difference between access on request and a rigid schedule of visits as provided, for example, under the American Bi-lateral Agreements. Under our Bi-lateral Agreement with the United Kingdom, the U.K. Authority has a right to inspect the Hifar Reactor at Lucas Heights upon request, but no such request has been made during the seven years of operation.

No doubt there would be many more comments that could be made after a thorough-going study of the Canada/India Agreement. Suffice it to say it is a very loosely worded document. However the Commission does not wish to become involved in any discussion with the Canadians upon this matter, particularly as it could be highly embarrassing to us in the future. In the circumstances would you please regard the above-mentioned comments as being for Australian eyes only.

[NAA: A1838, 919/19 Annex]