Mon, 31st March 2008   ROBB ADDRESS TO THE SYDNEY INSTITUTE - URANIUM SALES TO INDIA...

The Hon Andrew Robb AO MP   Shadow Minister for Foreign Affairs (to 22 September 2008)

URANIUM SALES TO INDIA: A STRATEGIC IMPERATIVE

E&OE

In August 2007 the Howard Government agreed to export uranium to India. The  uranium was intended only for power generation and would not contribute to nuclear  proliferation.

The decision has since been overturned by the Rudd Government.

The Rudd Government position is wrong and unsustainable.

The decision also reflects confused and inconsistent policy priorities given that one  of Mr Rudd's supposed three pillars of his foreign policy is enhancing relations with  Asia.

Ultimately I expect that the Rudd Government will need to reverse this decision not  to sell Australian yellowcake to India. The decision, and the amateur way in which  the decision was communicated to the Indian Government, has left a very bitter taste  in Indian mouths.

From a climate perspective there is overwhelming merit in India, the world  community and Australia, addressing the reality of India's energy needs, given the  very stringent conditions India is prepared to accept to enter the international nuclear  market for peaceful energy purposes.

The Rudd Government's position will also set back the cause of nuclear non-proliferation. The nuclear protocols agreed to last August would see 65 per cent of all  nuclear reactors in India coming under the strict coverage of the International Atomic  Energy Agency.

Global non-proliferation would be greatly strengthened by including India, a country  which has an exemplary record on non-proliferation.

Furthermore, the Rudd Government's position is unsustainable from the point of view  of wider bilateral interests, notably the potential free-trade agreement between our  two countries.

In August 2007 Australia and India agreed to undertake a joint feasibility study on the  merits of a bilateral free-trade agreement between the two countries, with a view to  seeing large-scale elimination of trade, investment and services barriers between our  two economies.

The economic, social and security implications of such an agreement are potentially  of enormous benefit to our community. Australian opposition to uranium sales to  India for energy purposes could severely compromise and undermine any worthwhile  progress on a bilateral free-trade agreement.

An Historical Perspective

From independence through until the end of the 20th Century, Australia-India  relations could best be described as qualified indifference.

The foreign policy position of non-alignment pioneered by Prime Minister Jawaharlal  Nehru saw us on opposite sides on many international issues through the Cold War  period, from the Korean War, to India's support for China in the UN, to the Vietnam  War and to the Soviet presence in Afghanistan.

All of this, when combined with the state of the Indian economy, a 1980s and '90s  Australian view of India through the narrow prism of the 'India-Pakistan' conflict and  the nuclear tests of 1998, meant that relations between our two countries came to be  characterised more by mutual disinterest or mutual testiness.

Our shared commitment to cricket and democracy probably helped us weather  significant differences which sprung from other commitments and other alignments  over these decades.

As well, the bond of the Commonwealth should not be underestimated in the role it  played in carrying us through our differences.

However, in this century so much has changed. In a few short years our relations  have not only normalised, but reached the point of a potentially strong and enduring  strategic partnership.

And, just as the powerful strategic partnership India is forging with the United States  has as its cornerstone the agreement for civilian nuclear cooperation, so too is this  nuclear cooperation a primary factor in India's prospective full engagement with  Australia.

For Mr Rudd not to see this is a serious error of judgement. This is particularly so at  a time when Mr Rudd is seeking a rotating seat on the UN Security Council while  denying India reliable clean energy, the very thing that will bolster India's legitimate  claim to be a permanent member of the UN Security Council.

Australia must engage because India has truly begun to look east with constructive  and responsible eyes.

India is increasingly playing a vital role in the evolution of our region. It is the  emerging economic powerhouse of South Asia.

It is expected that India will pass China's population as the worlds largest within 20  years, at around 1.5 billion people.

The economic revolution masterminded by India's current Prime Minister, Manmohan  Singh, when he was Finance Minister, heralds an economic awakening comparable  to that prompted by Deng Xiaoping in China.

Along with China, the rise of India in the years ahead look to be the major forces  altering the global economy and world politics.

The time for Australia to make a major political investment in India is now. The  strategic imperative is overwhelming.

In recent years important groundwork has been lain, beginning with the significant  counter-terrorism cooperation with India following 9/11, the joint action over the  Tsunami, the decision by the Howard Government to allow the export of Australian  uranium for civilian nuclear energy, the active support for India's bid to become a  permanent member of the UN Security Council, the beginning of negotiations for a  bilateral free-trade agreement, the involvement of Australia in quadrilateral talks  involving the US, Japan and India, the joint naval exercise held in the Bay of Bengal  in 2007 and the extraordinary growth in our trade.

Already India is Australia's fourth largest export market, with exports growing at year-on-year rates in excess of 30 per cent since 2000, faster than export growth to  China.

Mining and agriculture are obvious growth centres, but investment and services also  hold huge potential for growth, with India already our second largest source of  overseas students, and tourism expanding dramatically.

All of this on top of the 250,000 strong Australian Indian community that contributes  so vibrantly to the multicultural success of our nation, no less than our successful  Chinese community.

In terms of strategic initiatives of enormous moment to Australia since World War II,  we should aim to be in a position in future years to look back and see  comprehensive engagement with India in the 21st Century standing alongside our  achievement of other great partnerships - the signing of ANZUS in 1951, the  formalising of our involvement with Japan in the 1950s and our engagement with  China in the 1990s and into this century.

India's energy needs

Rapid population and economic growth will see a rapid rise in India's energy needs  as it seeks to grow at close to 10% to lift its people out of poverty.

As India grows it will rank third behind the US and China in terms of global energy  usage.

Power generation will account for much of the increase in primary energy demand,  given surging electricity demand in industry and in residential and commercial  buildings. Most of the new electricity generating capacity will be fuelled by coal.

Among end-users, energy demand for transport sees the fastest rate of growth, as  rising household incomes drive accelerating demand for motor vehicles.

In the absence of strong alternative policy action, galloping energy demand will see  major increases in imports of coal, oil and gas, and in the generation of greenhouse  gas emissions.

Over the next 25 years, for logistical and quality reasons, much of India's coal needs  will need to be met by imports.

The trend is evidenced by the growth in Australia's coal exports to India since 2000.  Until 1990, Australia exported no coal to India. In 2000/2001 Australia exported just  over $800 million worth of coal to India; last year our coal trade reached $2.5 billion,  an extraordinary 300 per cent growth in six years.

Again, over the next 25 year period primary energy demand in India is expected to  double, with India overtaking Japan before 2025 to become the world's third largest  net importer of oil after the United States and China.

India's greenhouse gas emissions

All of this adds up to India becoming the world's third largest emitter of carbon  dioxide by 2015, after ranking fifth in 2005.

Two-thirds of India's emissions come from burning coal, mainly in power stations.  Without a change in the method of base-load power generation, this share of  emissions from coal fired power stations will increase through to 2030, and beyond.

India will not sacrifice development to reduce greenhouse gas emissions. This will  only occur by employing less carbon-intensive energy - nuclear, gas or clean coal.

This has been strongly emphasised by Prime Minister Singh who has said, ''Nuclear  energy offers a way out by providing clean energy for development. So I see  enormous opportunities for members of the Nuclear Suppliers Group and India with  regard to supply of raw materials, technology and reactors''.

The greenhouse impact of nuclear power generation is brought home by the fact that  the export of Australian uranium ore concentrates in 2006-07 was sufficient to power  50 reactors, producing about 40 per cent more than Australia's total electricity  production.

Countries using Australian uranium avoid carbon dioxide emissions roughly  equivalent to our entire annual CO2 emissions from all sources.

Around the world nuclear power today reduces global emissions by more than 2  billion tonnes a year.

If the uranium deal succeeds, and the existing restrictions on the import of nuclear  technology and uranium for peaceful power sources are removed, it is estimated that  by 2050 as much as 35 per cent of India's total energy needs could be met by clean  nuclear power plants.

Australia's Uranium Exports Policy

Australia's uranium export policy acknowledges the strategic significance which  distinguishes uranium from other energy sources.

Australian policy has consistently recognised that special arrangements need to be  put in place to distinguish between the civil and military applications of nuclear  energy.

When adopted in 1977, Australia's export policy was a more rigorous safeguards  policy than that of any country supplying uranium to world markets. Today it is now  very similar to that of the USA and Canada.

Australia's policy embodies fundamental tenets first outlined in 1977, and adjusted to  reflect a number of developments in the intervening period.

For example, the sale of uranium to a non-signatory of the Nuclear Non-Proliferation  Treaty (NPT) is not unprecedented.

In 1981, the Fraser Government negotiated an agreement to sell uranium to France,  with Australia exporting uranium to them throughout the '80s under the Hawke  Government. However, France did not become a signatory to the Nuclear Non-Proliferation Treaty until 1992.

Australia has always required assurances that exported uranium and its derivatives  cannot assist the development of nuclear weapons or be used in other military  programs. It is only sold for exclusively peaceful purposes of power generation and  related research and development.

This is done by precisely accounting for amounts of Australia-Obligated Nuclear  Material as it moves through the nuclear fuel cycle.

It is exported under Australia's network of bilateral safeguards agreements which  ensures coverage by the International Atomic Energy Agency from the time it leaves  Australian ownership, for the full life of the material.

Nature of the Australia/India Uranium Agreement

The US-India nuclear deal, struck personally between Prime Minister Singh and  President Bush, was concluded in principle last August after two years of  negotiation.

The deal separates India's nuclear energy program from its nuclear weapons  program.

To be finalised, the agreement must pass the US Congress, get the International  Atomic Energy Agency to meet a special protocol to oversight India's peaceful  nuclear power plants and receive agreement by the 45 member Nuclear Suppliers  Group to sell uranium to India.

Very importantly, the US/India deal will strengthen nuclear non-proliferation by  making very significant progress in drawing India in under the safeguards and  oversight of the International Atomic Energy Agency. In due course this may prompt  progress with other non signatories of the Nuclear Non-Proliferation Treaty (NPT).

The agreement will put 65 per cent of India's nuclear program, or 14 of its 22 nuclear  reactors, under the stringent safeguards of the International Atomic Energy Agency.

The agreement would be a break with the Nuclear Non-Proliferation Treaty which  disallows sales of uranium to countries with nuclear weapons, except the US, Britain,  France, Russia and China. As India has nuclear weapons it cannot join the NPT,  despite never proliferating nuclear technology to any nation.

Against this background the US-India agreement accepts the reality of India as a  weapons state, but allows India's peaceful nuclear energy program to gain access to  uranium, nuclear technology and nuclear reactors.

It is a commonsense accommodation of India's circumstances, just as sensible  accommodations have been made for China in various regional and global matters.

The Howard Government agreed last August to sell uranium to India subject to the  finalisation of the US-India deal, and the conclusion of a bilateral Australia-India  safeguards agreement.

Strategic Importance to Australia

It was proposed that Australia sell uranium to India according to the identical strict  safeguards under which we sell uranium to China and Russia. In years gone by  China has sold nuclear technology to Pakistan and North Korea; unlike India which  has abided by the NPT obligations, even from the outside.

In these circumstances, and provided the conditions agreed with India are fully met,  it would be highly hypocritical to deny India this technology while China benefits from  full nuclear access.

Furthermore, if the US-India agreement is finalised, including approval by the  International Atomic Energy Agency, then any Australian Government opposition  would be a very serious matter, and invite long-term misunderstanding in our  relationship with India.

India and Australia are two great democracies sharing the common values and  interests of democracies. We are partners in regionalism as members of the  Commonwealth members of the East Asia Summit.

This is a critical moment in seeking to cement an Australian/Indian strategic  partnership - a relationship of great importance to Australia's interests and Australia's  future.

It is a strategic partnership that can be built around the challenge of energy in an  energy hungry world, while simultaneously addressing two of the great challenges of  our time - climate change and non-proliferation of nuclear weapons.

On greenhouse considerations alone this agreement is a 'must do'. Opposing it  forces India into increasing reliance on its substantial dirty coal reserves. However,  other considerations are also compelling.

There is strategic sense in seeing the largest democracy in the region taking a  stronger role in the region, and in a way where it enjoys the respect and standing of  other major regional powers.

There is India's position as our fourth biggest export market, in a burgeoning trade  relationship, to be protected and nurtured.

There is a growing bilateral security relationship to be fostered, especially involving  cooperation in counter-terrorism and in maintaining stability in the Indian Ocean.

And, critically, there is an opportunity to significantly advance the cause of non-proliferation by bringing 65 per cent of all India's nuclear reactors under UN  inspections, and under the protocols of the International Atomic Energy Agency.

At the same time, it creates a safer and more secure environment for these nuclear  power stations.

Labor Government Position

Given all these considerations, it is remarkable that one of Labor's first acts as a  government was to summon the Indian nuclear envoy, Shyam Saran, and advise  him that, for 'party political' reasons, Australia would not be selling uranium to India.  The manner, timing and substance of this communication was highly condescending,  inept and wrong.

The national interest was not considered. Climate change was ignored. Nuclear non-proliferation was sidelined. A China bias was implied. Constructive US policy  towards Asia was opposed. India's feelings were trampled on.

And all in the interests of an irrational and weak sop to the hard left of the Labor  Party. Mr Rudd is putting the internal machinations of the Labor Party ahead of the  national interest. Again it goes to poor judgement.

If Labor is committed to all it has said about global warming, then refusing to sell  uranium to India, while supporting new uranium sales to China and Russia, is totally  irrational and hypocritical.

How can the Rudd Government claim moral leadership on the global stage in  reducing greenhouse gas emissions when it ducks the first hard decision which  would result in massive reductions in emissions.

Furthermore, the decision comes at a time when the sale of our coal to India has  grown 300 per cent in six years, with the growth in sales showing no sign of slowing.  So much for consistency.

This old thinking of Australia's Labor Government is starkly revealed when compared  against the agreement last week of Britain and France to construct a new generation  of nuclear power stations and export the technology around the world in an effort to  combat climate change.

To add to the confusion the Rudd Government is saying to our Indian friends that we  do not trust them with our uranium, while at the same time Mr Rudd has said he has  not yet made up his mind on whether to veto sales by the 44 other members of the  Nuclear Suppliers Group.

This makes no sense. How can Australia refuse to sell our uranium to India, yet  plausibly support the rest of the world supplying uranium. Either way, Australia will  be adding insult to injury.

How can the Rudd Government claim that Australia's relationship with India is a high  Government priority when it snubs this direct and heartfelt request from the highly  respected Prime Minister of the world's largest democracy. It is stupidity.

India's Reaction

India is understood to be deeply offended by the Rudd Government decisions, and  the manner in which it was conveyed.

Influential foreign affairs commentators from India have denounced the decision in  the strongest terms, labelling the scrapping of the pledge to sell uranium as  ''retrograde ideology, pathetic hypocrisy, misplaced non-proliferation zealotry'' and  accusing our Prime Minister of parroting ''the same lame excuse, as if he has not  read the Nuclear Non-Proliferation Treaty text''.

The observation has been pointedly made that far from the NPT forbidding civil  exports to a non-signatory, the treaty indeed encourages the peaceful use of nuclear  technology among all states.

Further comments claim that ''Prime Minister Rudd has no qualms about selling  uranium to China but will not export to India''.

As well, the simultaneous holding of a strong position on greenhouse gases, and a  disposition against selling uranium to an energy starved India, is seen in India as  showing ''a lack of logic''.

Conclusion

The bottom line on all this is that reversing Australia's commitment to sell uranium to  India will do substantial damage to the Australia-India relationship.

It makes absolutely no sense to sell uranium to China and Russia, and not to India.

It makes absolutely no sense to claim climate change to be the great moral  challenge of our time and then block the adoption of nuclear technology which is  greenhouse gas free, and which already provides 16 per cent of the world's  electricity needs.

The US-India nuclear agreement is good for India, good for Australia, good for the  region, good for climate change and good for nuclear non-proliferation.

In this regard Labor is standing against a critical new engagement in Asia.

This issue can make Australia a strategically important partner to India. It is the thing  India really wants from us. It is a big issue.

Labor's position is very bad policy, and disastrous politics. It is a position that is  unsustainable. It can and must be reversed.

