People's Democracy

Reject Civil Nuclear Liability Bill

THE union cabinet has approved a legislation to be introduced in parliament on civil nuclear liability. Such a bill is being brought to meet the demand of the United States that a law be enacted to protect the US suppliers of nuclear equipment from liability to pay compensation in the case of a nuclear accident. The US has linked the completion of the Indo-US nuclear agreement to India's capping of nuclear liability and that is why the hasty move to introduce this in parliament. The UPA government had, already before the ratification of the 123 agreement, given a written commitment that India will buy 10,000 MW of nuclear reactors from US companies. The nuclear liability regime demanded by the United States is to put a cap on the liability of nuclear operators and also remove all liabilities of the equipment suppliers.

The proposed bill has sought to limit all liability arising out of a nuclear accident to only 300 million SDRs (about $450 million) and the liability of the operator only to Rs 300 crore. The difference between $450 million and Rs 300 crore (about $67 million) is the government's liability. Given that a serious accident can cause damage in billions, the small cap of $450 million proposed shows the scant regard the UPA government holds for the Indian people. The Bhopal Settlement of $470 million reached between the government of India and Union Carbide and accepted by the Supreme Court, has been shown to be a gross underestimation. Even today, lakhs of gas victims are suffering and have received only meagre compensation. It is completely unconscionable of the UPA government to suggest that all nuclear accidents, which have the potential of being much larger than Bhopal, be capped at a figure that has already been shown to be a gross underestimate.  Since the government wants to allow private operators in the nuclear power sector, this low level for compensation is meant to serve their interests too. Apart from this, the minuscule liability of Rs 300 crore for the actual operator is tantamount to encouraging the operator to play with plant safety.

The Indian legal regime is quite clear: for hazardous industries, the plant owners have strict liability. Neither does the law accept any limits to liability � the party concerned must not only pay full compensation but also the cost of any environmental damage that any accident may cause. The Oleum leak from Sriram Food and Fertility settled the liability regime in India and any legislation seeking to cap liability will be completely retrogressive.

Contrary to the claims being made, the Vienna Convention -- the basis of the proposed nuclear liability bill -- does not cap nuclear liability but only puts a minimum floor. It also allows countries to operate their liability regimes. For example, Germany, Japan and Finland all have unlimited liability, the same as current Indian law. The US has a liability cap of $ 10.2 billion. Not only is the Indian government proposing to cap liability of nuclear plants, but is also proposing a cap of only $450 million, way below what can happen in any serious nuclear accident. It appears that in order to promote private nuclear power and foreign suppliers, UPA government is willing to sacrifice its own people.

The suppliers� liability is also being considerably weakened in the proposed bill. Instead of the normal contract law, where recourse of the operator to claim damages is inherent, the bill limits this recourse only if it is explicitly mentioned in the contract. Otherwise, the nuclear operator cannot claim compensation from the supplier of equipment even if it is shown to be faulty. It is evident that contracts for buying US nuclear reactors will explicitly exclude any liability on the part of the supplier and therefore by the law to be adopted they will go scot free even if an accident occurs due to a defect in the equipment supplied by a US company.

It is also important to note that neither Russian or French suppliers have raised the issue of capping or limiting nuclear liability. It is an entirely US concern and being driven by the interests of US suppliers and investors. If this is accepted, this will prove another case of India capitulating to the US and putting the interest of US capital before the interests of its people.

The proposed legislation on civil nuclear liability is another example of the sell out that the Indo-US nuclear deal represents.  The government cannot be allowed to disregard the lives and safety of the people of India. It is imperative that parliament reject this legislation when it is presented. All political parties represented in parliament will have to take a stand in defence of the basic interests of the Indian people.

(December 16, 2009)