Civil nuclear liability bill: hoping for a safe Passage
It looks like the government may have no option but to reconcile itself to amending the Civil Nuclear Liability Bill, and accept some of the opposition parties’ suggestions, especially on the liability amount. Otherwise, the bill looks unlikely to get the lawmakers’ consent. The United Progressive Alliance (UPA) government is on the back foot in the Lok Sabha after the loss of outside support from Samajwadi Party and Rashtriya Janta Dal and is in no position to face the combined strength of the BJP and the Left parties on the issue and chose to drop its plan to introduce the bill in the first half of the budget session.
The current draft provides for a cap of US $300 million special drawing rights (SDR) or around Rs 2108 crore on total compensation and limits the liability of the plant operator to Rs 500 crore.
The opposition parties’ major objection to the bill in its present format is the maximum limit for compensation which they claim is too low. “In the case of a nuclear accident, the bill allows the supplier to get away without paying a dime, even if it is established that the accident was caused by defective supply. The bill protects the interests of American companies, as neither the Russians nor the French who have agreed to supply nuclear reactors to India have asked for the passage of the bill,” said the Brinda Karat, Rajya Sabha MP and CPI (M) politbureau member. American law explicitly forbids the supply of equipment to any country which doesn’t have a law to limit liability in case of a nuclear accident.
Minister of state in the Prime Minister’s Office, Prithviraj Chavan, countered these arguments saying, “The government has an open mind on the issue. Parliament can pass a law raising the cap. But we have to remember, higher the cap higher cost of getting insurance and generating power. We examined caps all over world and came up with figure of Rs 500 crore. China has cap of Rs 200 crore. Very few countries like Japan, Germany, and South Korea put no cap but if we keep no cap, no one will invest in India.”
Chavan also refuted charges that that government is opening the sector to private investors including foreign ones through the backdoor. “The nuclear core and part of the pressurised chamber and heat generating rods will be supplied by foreign companies. However, the dome which houses the core, the concrete work, brickwork, cladding, etc. will be by our own companies.”
Internationally, there are three major conventions on liabilities in the case of a nuclear accident – the Convention on Supplementary Compensation for Nuclear Damages (CSC), and the Vienna and Paris conventions. These conventions are based on seven principles of law – a) no fault liability, b) liability limited in amount, c) liability limited in time, d) channelling of liability to the installation operator, e) a single competent court to adjudicate claims, f) compulsory financial security, g) no discriminatory treatment (based on nationality, domicile or residence).
Currently India is not a signatory to any of these conventions but has indicated that it might join the CSC to which the US is also a party. Under CSC the operator is liable for nuclear damages up to specified amount with a two-tier compensation system. The country where nuclear plant is installed has to ensure the availability of at least US $300 million SDRs and the second tier of compensation can come from contributions made by contracting parties and limits the period for compensation claim to 10 years.
A retired bureaucrat with a long stint at the Department of Atomic Energy (DAE) observed that apart from bringing Indian laws on par with various international conventions on atomic accident liability, the present bill also aims to open up the sector for private investment 10-15 years down the line. “Private investment will come only if an investor knows what will be his liability in case of an accident,” he said. “This is a quid pro quo that we have to accept to end our nuclear isolation,” he added.
Former finance minister and senior BJP leader Yashwant Sinha said, “The bill in its present form is not acceptable at all. We want the government to scrap the present legislation completely and bring in a new one which takes care of our concerns like setting higher limits for compensation, blocking the backdoor entry of FDI into the sector and not allowing suppliers to get away with blue murder.” Elaborating on his argument Sinha said, “We suspect government wants open backdoor for foreign direct investment (FDI) in the field of nuclear power by way of this bill; otherwise there is no need for liability bill. The Atomic Energy Act 1962, clearly states that all the nuclear plants in the country will be run by the government or government-owned entities. If the government has no intention to amend this position then why have this bill? For last 50-odd years since India built its first nuclear reactor, the present regime has worked for us perfectly, so why can it not work in the future also? And if the unfortunate eventuality of a nuclear accident takes place, and then since the government owns the nuclear reactors, its liability is absolute, so there is no need for liability law.”
Sinha pointed out that the US law on civil nuclear liability, the Price-Anderson Act, sets a minimum liability of US $10 billion and puts no cap on the maximum and the courts are free to decide on damages beyond this amount. However, our bill puts a maximum limit of Rs 2133 crore which is absolute peanuts. One is forced to draw the conclusion that the life of a US citizen is 23 times more valuable compared to an Indian.”
Former power minister Suresh Prabhu said, “The present liability limit is too low and it must be substantially increased. Considering that the governments are always constrained for resources, the amount which it proposes as compensation for accidents beyond what is the liability of the operator should be kept in a separate fund and managed through this fund. Besides, the limit of one year for filing compensation after the accident is too low, considering that it can take years before one comes to know the health problems associated with radiation.”
With the government being eager to sign the spent fuel deal with the US during president Barack Obama’s India visit in the later half of the year, and the opposition having the numbers to make its stand stick in the Lok Sabha, it seems that the government has no choice but to redraft the bill to ensure the safe passage.
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