This docums DECLADSSEEIZD DEPARTMENT OF NW3 Memorandum of Conversation M3213 fig SECRET DATE April 26 1960 susnane Safeguards Harry Williamson Canadian Embassy M L ManfUIl Robert M Winfree I Afi a comrs 1'0 3m 4 AC5 Wax 272 ABC 2 #80 50A a 2c 7% M9739 I 3' I Several weeks ago I asked Mr Williamson if he could give me an abstract of the safeguards article in the Canadian-Indian agreement I told him at that time that we had been told by Dr Bhabha that the Canadians and Indians had been successful in finding a formula which permitted the Canadians to verify their fuel rods in the CIR reactor Williamson began the conversation by reading a portion of his instructions In essence his instructions said that he was to request that this agreement be held in the strictest confidence and that while he could show me a copy he should not permit me to retain a copy What Williamson then showed me was a letter dated February 6 1960 from the Canadian High Commissioner in New Delhi to Prime Minister Nehru Other than the introduction and complimentary closing para- graph the letter consisted of six numbered paragraphs the essence of which were as follows 1 Canada would supply up to 100 fuel elements for the CIR reactor 2 Special consideration would be given to the use of Indian fuel elements in the reactor 3 The Canadians and Indians agreed that any material supplied by Canada and any plutonium produced by use of the material would be used only for peaceful purposes SECRET DECLASSIFIED Tait mat SECRET 2 4 The Indian Atomic Energy Commission would keep records and would exercise self-inspection Also the Indian AEC would make a physical audit of the fuel elements once a year 5 If Canada so requests India will agree to a joint audit In this case the report will be prepared jointly 6 Only plutonium produced from the Canadian fuel elements will be audited Later in this paragraph it is recognized that this is an impossible task since both Indian and Canadian fuel elements will be used in the reactor and there is no way of telling what plutonium comes from what elements The paragraph continues however by stating that India has an option to place an amount of plutonium equivalent to that produced from the 100 Canadian fuel elements at Canada's disposal at a fair market price Canada has a first option to purchase for peaceful uses only any amounts of plutonium which India does not wish to retain When Williamson asked me for my reaction to this letter I told him that in my mind it meant the Canadians had no safeguards I pointed out that Bhabha had indicated to us that a form of words similar to the wording of the Canadian letter might be worked out with the united States and added that such wording would not be acceptable to the United States Williamson then went off the record to state that he personally disagreed completely with the safeguards as incorporated in this agree- ment and he thought that Canada might have been placed in a very difficult position He added that the initial agreement had been negotiated between Loren Gray President of Atomic Energy of Canada Limited and Dr Bhabha and that External Affairs had not known about it until after it had been negotiated External Affairs had then insisted that it be a government-to-government undertaking I told Williamson that I did not see how Canada could take such a staunch stand for safeguards in the IAEA and then turn around and undercut the entire principle of safeguards in a bilateral agreement The fact that the Canadians had agreed to self-inspection and that even if the Canadians did decide to make an audit the report would have to be jointly prepared substantially weakened our joint safe- guards position I asked if Ambassador warshof the Canadian Ambassador who has so capably fought for strong IAEA safeguards knew about this agreement and he replied that he did not know He said that both the Government of India and the Government of Canada wanted SECRET DECLASSIFIED 'l LE SECRET 3 to keep this agreement just as quiet as possible He added that Bhabha had even wanted to keep the agreement from his own government but the Canadians had insisted on a government-to-government exchange William- son recalled the long history of difficulties encountered by Canada in the CIR reactor negotiations--by the time the safeguards issue came to a head Canada was so enmeshed that Canada had to settle for the best it could get on safeguards He personally believed and off the record Canada's explanation of the weak safeguards provisions could only be that Canada had made a mistake recognized it and would not repeat it in the future I told Williamson that this would greatly increase our diffi- culties in getting IAEA safeguards If it became known that the Canadians had negotiated such a weak agreement with India they would be in a poor position to fight strongly for comprehensive IAEA safe- guards Furthermore if other countries found out about this they would be inclined to soften on the safeguards issue Although the U S was following the enriched uranium route nevertheless if other countries soften safeguards on natural uranium reactors we would not be in a very good position to insist on safeguards on enriched uranium since we would be under very strong pressure from our domestic manu- facturers I personally doubted that we would be able to hold the line on enriched I asked Williamson if the Indian-Canadian agreement was in effect and he replied that while he had not seen a copy of Mr Nehru's reply he was certain that it was in effect See attached addendum dated April 29 SECRET i new 1 SECRET 1 Hr Williamson called again at his request on April 29 He started off by saying that after reflection he thought that perhaps my comments re no safeguards had been too harsh and went on to explain that the original agreement with the Indians had been negotiated in 1956 before any stress was being put on safeguards Therefore since the original agreement had contained no safeguards Canada had been unable to institute safeguards in the supplementary agreement To this I replied that if the United States amended an agreement or negotiated a contract for the sale or lease of fuel after the initial umbrella agreement had been signed if we found that safeguards or other important parts of the agreement had been omitted in the initial negotiation we endeavored to have them incorporated in the supple- 'mentary agreement or contract I did not see why such a course of action was not applicable in the Indo-Canadian case Williamson the difficulties of negotiating with the Indians and said the Canadians felt they had to reach an agreement- otherwise the Indians would have gone off on their own with no Canadian supervision and completed the reactor and inserted all Indian fuel elements In such case the Canadians feared that the reactor would fail in its operation with the resultant damage to Canadian prestige Therefore to keep Canadian advisers on the job and to have Canadian fuel elements in the reactor--at least at start up--the Canadians felt that they had to reach agreement with the Indians I told Williamson that my comments should be considered as personal since they had not been checked out within the Department or AEC As one who had fought long and hard for safeguards both bilaterally and within the IAEA I deplored any action which tended to weaken our position I personally felt that Ambassador warshoff who had fought longer and harder than I would share my views Williamson indicated that he too would like to know Wershoff's views SECRET                     National Security Archive    Suite 701  Gelman Library  The George Washington University    2130 H Street  NW  Washington  D C  20037    Phone  202 994‐7000  Fax  202 994‐7005  nsarchiv@gwu edu