BASIC NOTES
OCCASIONAL PAPERS ON INTERNATIONAL
SECURITY POLICY
9 JUNE 2006
New Proposal to Iran:
Will It Be Enough to Defuse the Nuclear Crisis?
Ian Davis and Paul Ingram
This Paper is also available in pdf at: http://www.basicint.org/pubs/Notes/BN060609.pdf.
Introduction
On June 6 Iran was presented with a revised package of incentives
to persuade it to curb its uranium enrichment programme. The package
was finalised in Vienna on June 2 by the permanent five members
of the UN Security Council (United States, Britain, France, Russia
and China), plus Germany - hereafter referred to as the P5+1.
Details of the proposals have not been made public, but an early
draft was leaked to ABC News (see Appendix).
This Note is a preliminary analysis of this draft P5+1 proposal.
It will be updated once the final offer is made public.
This latest offer is a definite improvement on the E3 /EU offer
made in August 2005, in that it is less demanding and gives clearer
incentives. The fact that it appears to have the backing of the
United States, Russia and China provides much needed additional
authority and credibility. The softening of the US position in particular
demonstrates recognition of the importance of the multilateral approach.
We argued previously that the earlier E3/EU proposal was vague
on incentives and heavy on demands. (See BASIC Note 11 August 2005
http://www.basicint.org/pubs/Notes/BN050811-IranEU.htm).
If this proposal today had been offered a year ago (or better still
two years ago) we could have probably avoided much of the damage
to diplomatic relations between Iran and the West, and generated
a greater degree of cooperation in resolving the mistrust and fear
on both sides.
What's new and to be welcomed?
There are several new aspects in the leaked proposal that provide
grounds for optimism, including:
- The willingness of the United States to sit down directly with
Iran, conditional upon a suspension of all enrichment and reprocessing
activities during the negotiations.
- Recognition of the Isfahan uranium conversion plant.
- The establishment of an international fuel cycle centre in Russia,
with Iran as a partner, to enrich UF6 from Isfahan (though it
is ambiguous as to the involvement of Iranian scientists).
- Establishment of a five-year fuel-bank/buffer stock exclusively
for the use by Iran (though its location is ambiguous).
- A clear reaffirmation of Iran's inalienable right to nuclear
energy for peaceful purposes.
- An energy partnership to deepen Iran's energy security, investment
in its oil and gas infrastructure, and assistance in energy conservation
and renewable technologies.
- A new political forum to involve Iran and other regional states,
the United States, Russia and China, with a view to establishing
confidence building mechanisms, including recognition of sovereignty,
territorial integrity and crucial security guarantees for Iran.
- Talks on the establishment of a WMD-free zone for the Middle
East, holding the promise of pulling Israel in to the discussions.
Other media reports citing unnamed European officials suggest
that an even more significant concession may have been made: Iran
could be allowed to retain some uranium enrichment activities under
tight IAEA safeguards provided it reaches agreement with the P5+1.
Remaining problems
First, the demand that Iran suspend its enrichment activities before
talks can begin will undoubtedly provide a point of friction over
the next few weeks. The Iranians will see it as giving up leverage
with no clear quid pro quo commitment on the part of the US or the
Europeans. However, if this is seen as a temporary cessation rather
than a moratorium then the prospects of at least getting to the
negotiating table look brighter.
Second, even though the proposal demands that Iran suspend its
nuclear fuel cycle, it holds out the possibility of the transfer
of Western nuclear technology to Iran, including significant assistance
in constructing new light water reactors. But this fails to address
the fundamental underlying problem that a fully domestic nuclear
power involves processes that are inherently dual-use in nature,
and that the linkage with a nuclear weapon capability, while manageable
to some extent under strict safeguards, is at heart unbreakable.
This offer goes beyond recognition of Iran's rights to nuclear power,
by positively encouraging and assisting in its development. This
is like offering a teenager methadone out of the fear they may try
heroine in a few years' time.
A better alternative would be to focus efforts on fleshing out
the proposed energy partnership with real commitments for valuable
investment and significant technology transfer, with the objective
of building a vibrant world-leading sustainable energy industry
in Iran weighted towards renewables. Iran has significant natural
resources that lend themselves to wind, solar and hydroelectric
power with potential energy outputs that dwarf any plans for nuclear
energy.
Fundamentally, the problem lies in international double standards
in the nuclear field: states making demands of Iran at a point when
they themselves are on the brink of a massive expansion in their
own nuclear power industries, and a renewal of nuclear weapons in
the nuclear weapon states. In demanding Iran demonstrate that "any
new activity in the nuclear field is linked to a credible and coherent
economic rationale", the P5+1 should show the lead and do the same.
Conclusions
It would be a mistake for the Iranian leadership to believe that
these concessions from the West are the result of a hard line negotiating
stance or because the strategic balance has shifted in their favour;
and that by holding the line further concessions can be extracted.
That would be a highly dangerous course of action, especially since
it appears that Russia and China have agreed in principle to consider
targeted sanctions and other economic sticks in the event of an
agreement not being reached. The employment of economic sanctions
that may not be effective against those targeted within Iran could
build an unstoppable momentum and presage moves towards US military
action.
It would also be a mistake for Iran to focus entirely upon its
rights under the NPT, to the exclusion of its responsibilities,
both to its own people and in addressing the concerns of the international
community. Iran does have a right to develop its nuclear power industry,
but it needs to build confidence with the international community,
and to consider whether its nuclear power plans really do represent
value for money in comparison with other options open to them. To
continue with the nuclear option simply for reasons of misguided
prestige would be a false diplomatic victory: Iran would have surrendered
its energy security to misplaced ideological and political ends.
The multilateral approach demonstrated by this proposal is to be
welcomed. It is crucial, however, that this is not abused (by either
side) to create the conditions for an escalation in the crisis.
Negotiations must be given a proper chance, which will demand further
flexibility on the part of the United States and Iran in the interests
of an agreement. The negotiations might take months, even years,
but a 'grand bargain' that satisfies both sides is possible.
The key micro issue in any such bargain will involve enrichment.
Tehran may need to accept limitations on its enrichment capabilities
(i.e. no indigenous industrial-scale enrichment), with the fuel
for its reactors being produced abroad and shipped back when spent.
The United States may need to allow Iran to maintain its 164-centrifuge
enrichment cascade at Natanz for research purposes, under additional
supervision. At the macro-level security guarantees will be central
to any deal. The current nuclear dispute is not the cause, but a
symptom, of a failed relationship between Tehran and Washington.
It is this relationship that must, in the long-term, be improved
if further political crises like the present one are to be avoided.
Appendix
Draft Proposals as leaked to ABC News:
POSSIBLE ELEMENTS OF A REVISED PROPOSAL TO
IRAN
To develop relations and cooperation with Iran based on mutual
respect and the establishment of international confidence in the
exclusively peaceful nature of Iran's nuclear programme, and to
prepare for a fresh start in negotiations of a comprehensive agreement
to that end, to be deposited with the IAEA and endorsed in a Security
Council resolution:
The International Community will:
- reaffirm Iran's inalienable right to nuclear energy for peaceful
purposes in line with Art IV of the NPT and in conformity with
its international obligations, and political support for development
of a civil nuclear programme;
- actively support activities in accordance with Iran's civil
nuclear plan, including the building of new light water reactors
in Iran through joint projects, within the framework of the IAEA
and in accordance with its Statute;
- agree to suspend discussions of Iran's file at the Security
Council on resumption of negotiations.
Iran will:
- commit to address the outstanding issues and all other international
concerns through full cooperation with the IAEA;
- suspend all enrichment-related and reprocessing activities
and commit to continue this during these negotiations;
- resume implementation of the Additional Protocol.
AREAS OF FUTURE COOPERATION TO BE COVERED IN NEGOTIATIONS
ON A LONG TERM AGREEMENT
NUCLEAR
International community will take the following steps:
Iran's right to nuclear energy:
- reaffirm Iran's inalienable right to nuclear energy for peaceful
purposes in line with Art IV of the NPT and in conformity with
its international obligations, and reaffirm its political support
for development of a civil nuclear programme;
- negotiate and implement a Euratom/Iran nuclear cooperation agreement.
Light Water Reactors:
- in accordance with Iran's own civil nuclear power generation
plan, actively support the building of new light water reactors
in Iran through joint projects, within the framework of the IAEA
and in accordance with its Statute, using state-of-the art technology,
including authorising the transfer of necessary goods.
ECONOMIC
International Trade & Investment
Support for full integration into international structures, including
the WTO, and to create the framework for increased direct investment
in Iran and trade with Iran (including a Trade and Economic Cooperation
Agreement with EU).
Civil Aviation
Civil aviation cooperation (including possibility to purchase civil
aircraft) and removal of restrictions on civil aircraft manufacturers
from exporting such aircraft to Iran, thereby opening up the prospect
of Iran purchasing a new fleet of modern civil airliners.
Energy Partnership
Establishment of a long-term strategic energy partnership between
Iran and the EU, i.e. extension and modernisation of oil and gas
sectors, scientific and technological cooperation also on downstream
activities, development of the Iranian energy infrastructure incl.
pipeline construction, and in the area of energy efficiency and
renewable energies.
High Technology Co-operation
Co-operation in the fields of high technology and other areas to
be agreed.
Research & Development in Nuclear Energy
- provide a substantive package of research and development co-operation,
including possible provision of light water research reactors,
notably in the fields of radioisotope production, basic research
and nuclear applications in medicine and agriculture.
Fuel Guarantees
- give legally binding, multi-layered fuel assurances to Iran,
based notably on:
- participation as a partner in an international fuel cycle
centre in Russia, which would enrich all UP6 produced by the
UCF at Isfahan;
- establishment of a facility/fuel bank/buffer stock to hold
a reserve of up to 5 years' supply of nuclear fuel dedicated
to Iran, with participation and under supervision of the IAEA;
- implementation of US/French ideas on multi-layer assurance
of supply mechanism.
Review of Moratorium
The long-term agreement would, with regard to common efforts to
build international confidence, include a clause for review of the
agreement in all its aspects, to follow:
- confirmation by the IAEA that all outstanding issues and other
international concerns have been resolved and that it is in a
position to conclude that there are no undeclared nuclear activities
or materials in Iran or diversion of nuclear materials;
- demonstration by Iran that any new activity in the nuclear
field is linked to a credible and coherent economic rationale
in support of the existing civilian power generation programme;
- and decisions by the IAEA, BoG and UNSC that all of Iran's
obligations have been met and that international confidence in
the exclusively peaceful nature of Iran's civil nuclear programme
has been restored.
POLITICAL
Regional Security Co-operation
Support for an Inter-governmental regional forum, including Countries
of the region and other interested Countries, to promote dialogue
and cooperation on security issues in the Persian Gulf, i.e. with
the aim of establishing regional security arrangements and a co-operative
relationship on important regional security issues, including guarantees
for territorial integrity and political sovereignty.
WMD Free Zone in the Middle East
Support the objective of establishing a zone free of weapons of
mass destruction and their means of delivery in Middle East.
POSSIBLE MEASURES IN THE EVENT THAT IRAN DOES NOT COOPERATE
In the event that Iran does not co-operate with the international
community, we would adopt proportionate measures, selected from
the following list, in order to give effect to the decisions of
the international community. Where appropriate, these measures would
be adopted under Chapter VII Article 41 of the UN Charter.
Measures Targeted Against Iran's Nuclear and Missiles Programmes
a) Embargo on export of goods and technologies relevant to these
programmes.
b) Freeze of assets and ban on financial transactions of organisations
and/or individuals involved in these programmes.
c) Travel/visa ban on individuals related to these programmes.
d) Suspension of technical co-operation with the IAEA.
e) Ban on investment against entities associated with these industries.
f) Ban on Iranians from studying abroad disciplines related to
nuclear and missile development.
Political and Economic Measures
g) Reduction/freeze of bilateral contacts.
h) Visa/travel ban on selected high-ranking officials and personalities.
i) Freeze of assets of individuals and organisations connected
to or close to the regime.
j) Arms embargo against Iran.
k) Embargo on exports of specific products (e.g. refined oil/gas
products) to Iran.
l) End support for Iran's WTO Membership Application.
m) Prohibition on co-operation/investment in Iran in certain sectors.
n) General freeze of assets of Iranian financial institutions.
o) Reduction in government support for trade and export credit
insurance to Iran.
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