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Updated: September 19, 2013 08:22 IST

Manmohan may carry nuclear liability dilution as gift for U.S. companies

    Sandeep Dikshit
    J. Venkatesan
Comment (36)   ·   print   ·   T  T  
The Manmohan Singh government is looking to use the opinion of the Attorney- General to effectively neutralise a key provision of India’s nuclear liability law.
The Manmohan Singh government is looking to use the opinion of the Attorney- General to effectively neutralise a key provision of India’s nuclear liability law.

It is for operator to exercise ‘right of recourse’ under section 17 of Civil Liability for Nuclear Damage Act

Under sustained pressure from the Obama administration, the Manmohan Singh government is looking to use the opinion of the Attorney- General to effectively neutralise a key provision of India’s nuclear liability law that would hold American reactor suppliers liable in the event of an accident caused by faulty or defective equipment.

In an opinion to the Department of Atomic Energy, which referred the matter to him on September 4, Goolam Vahanvati has said it is for the operator of a nuclear plant in India to decide whether it wished to exercise the ‘right of recourse’ provided to it by section 17 of the Civil Liability for Nuclear Damage Act.

The AG’s opinion effectively paves the way for the Nuclear Power Corporation of India Ltd, which will operate any nuclear plant using imported reactors, to repudiate a right that Parliament explicitly wrote into section 17(b) of the law to ensure that foreign suppliers don’t get away scot-free if a nuclear accident is traced back to “equipment or material with patent or latent defects or sub standard services.”

American nuclear vendors Westinghouse and GE have lobbied hard with Washington and Delhi to have this provision amended or removed. Though India has publicly stuck to the line that dilution of this provision is not possible, Mr. Vahanvati’s view opens a door for the government to accommodate the U.S. demand when Prime Minister Manmohan Singh meets President Barack Obama on September 27.

Reiterating the opinion he gave to the government in October 2012 in the context of the Inter-Governmental Agreement between India and Russia, Mr Vahanvati noted, “Section 17(a) provides for recourse if such right is expressly provided for in a contract in writing. If the operator chooses not to incorporate such a provision in the contract, it would be open for him to do so.”

In its reference to the AG, the DAE had sought confirmation “regarding the presumption that the existing provisions of section 17 of the Act facilitate the operator either to exercise his ‘right of recourse’ by incorporating a clause in the contract or to waive his right or to limit the liability on the part of the supplier.”

The AG endorsed the view expressed by the Ministry of External Affairs in an internal note that “a right was given to the operator to have recourse against the supplier but there was no mandatory obligation or requirement for the operator to do so and that the operator could choose not to exercise that right.”

The AG’s view is likely to be challenged by the opposition, since section 17 grants the operator the right of recourse under one of three conditions: (a) if the right is expressly provided for in writing; (b) if the accident is caused by faulty material or equipment provided by the supplier; or (c) the accident results from an act of commission or omission of an individual done with intent to cause nuclear damage.

Since 17(b) suggests Parliament intended to hold suppliers responsible even if there is no contractual liability, it is not clear how a public sector undertaking like NPCIL, which is answerable to Parliament, could give its suppliers a free pass.

In 2008, India had promised American companies 10,000 MWe worth of contracts for setting up nuclear power plants in return for the U.S. administration helping to end the country’s nuclear isolation.

Now, five years later, NPCIL and Westinghouse are set to sign an agreement that in theory will give the American company the go ahead to begin work on its proposed nuclear power park in Mithi Virdi, Gujarat.

Keen to improve the ‘atmospherics’ around the signing of the pact, likely to be on the day Dr. Singh and Mr. Obama meet at the White House, the government is asking NPCIL to announce $100-175 million as the first token payment for the Gujarat reactor.

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People must be warned that it is absolutely useless action to proceed with a nuclear energy programme. We must stop nuclear fuel cycle operation now and secure all installations and in a disciplined scientific manner deal with decommissioning and nuclear waste storage. Nuclear cycles liability is infinite. This is because the dynamic energy analysis of nuke programmes reveals that the programme conumes many fold more energy/electricity than it delivers during its entire lifetime. This has serious implications: The stupid greed in the concerned people will build more and more nukes and go on forever increasing the energy shortage! Thus ultramegawatt thermal power plants, solar plants, hydroelectric plants will all feed the nuke programme but the society does not get any elecricity outside the nuke industry. Google search for energy audit of the indian nuclear programme for data. The possibility of several nuclear meltdowns and enormous radiation exposure will result in extinction.Stop!

from:  R. Ashok Kumar
Posted on: Sep 19, 2013 at 15:01 IST

"Under sustained pressure from the Obama administration.....". Do
anybody remember how much did the obama administration claimed from the
BRITISH PETROLEUM" when the oil rig broke out off the shore some years
before in USA.
I believe, there is god and he is watching all around here and he will
make one day that america pay for all such things.

from:  sidhiq
Posted on: Sep 19, 2013 at 14:20 IST

I suggest don't make an opinion before this actually happens ... I don't think it will happen as suggested by our beloved media !!
My PM knows much more about what is good for India than the folks in media or opposition.
Although I must agree he is not a natural leader and neither a decent orator. But holds strong understanding of our system,politics
and realistic future of diverse tricky country India !!

from:  Saurabh
Posted on: Sep 19, 2013 at 14:07 IST

Why must we dilute everything for USA and the West ? They are only interested in their well being have we forgotten Union Carbide and its
doings in Bhopal ???

from:  Avinash
Posted on: Sep 19, 2013 at 14:06 IST

With the supplier clause more or less removed with NPCIL not including the liability clause; and NPCIL being a Government Undertaking - it means if there is a nuclear disaster or accident the liability will be borne by the taxpayers of India. That's very sad.

from:  Pradeep
Posted on: Sep 19, 2013 at 13:56 IST

Since the UPA's inception to exercise the world's largest democracy,
it is striving painstakingly hard to woo the Americans and other
aliens (outsiders)in order to get benefited on long term basis.
Despite of putting the country and prospective growth at first and
large respectively, they are aiming high at retrospective growth by
encouraging the lobbying phenotype and professional right wing to
further weaken our already crippled system. Why do you invest in
something that is so nascent, unpredictable and dangerous, instead of
concentrating on the improvement of our personal development via the
alternative technologies. As a responsible citizen and a common man I
have concerns regarding this decision and I am vexed with this
present system of Government jeopardizing the very basic principle of
democracy = people.

from:  sandeep kumar
Posted on: Sep 19, 2013 at 13:36 IST

On a serious technical issue like this, everybody should be extremely
cautious and responsible. India's dependence on imported oil is
bleeding us to death. One would support non mined resource based
energy generation at whatever monetary cost. However, if this is not
practical, atomic energy is a good choice over other fossil based
energy in terms of environment friendliness and benefits to economy.
Savings in oil bills can do wonders to our economy. This ought to be
PM's consideration for any concession to US companies. But the way
cabinet notes are getting leaked is amazing. Is it part of diplomacy
to resist US pressures if any or is it pure mischief by somebody who
knows ? Here one does not rule out possibility of a section of media
and bureaucracy and political set up sabotaging India's bid for energy
security and import of technology from US at the behest of interested
parties in India or abroad. If PM by any chance is acting arbitrarily,
Congress must intervene and restrain him.

from:  Ashim kumar Chatterjee
Posted on: Sep 19, 2013 at 13:33 IST

Time to migrate to somewhere 'safer' where quality controls are stringent!

from:  Alex
Posted on: Sep 19, 2013 at 13:11 IST

US FDA issues import alert on Ranbaxy drugs for the presence of single black fiber(might have been hair) present in a tablet and other side it demands exemption from liability in the case of nuclear accident. This is paradoxical nature of US to value Human rights, as evident from recent Obama's speech of 'exceptionalism'. Indian Gov should make it clear to its citizens who will be responsible in case of nuclear catastrophe, if such an exemption is provided. Lack of clarity always leads to in the making of many more Warren Anderson like personalities.

from:  Siddu Mangad
Posted on: Sep 19, 2013 at 13:08 IST

It seems the UPA govt. will bend over backwards, prostrate and grovel
without any hint of self-respect. The corporate greed of such western
companies knows no bounds and they will go to any extent to remove any
liability on themselves and maximize their profitability. Iraq is just
an example. One wonders why MMS and team need to be so subservient to
the US... What a shame!!

from:  rajeev
Posted on: Sep 19, 2013 at 13:04 IST

So, will MMS tell his unfortunate Indian citizens - what if US firms provided a faulty equipment or material causing an accident - who should be held responsible? Why not to remove all liability from all the sector and let Indian citizens pray to God for their safe being??? How can a PM of such big country can even imagine to think on this line?

from:  Avinash Baranwal
Posted on: Sep 19, 2013 at 12:41 IST

why does the govt want to neutralize the liability clause ? , Does the PM's word for nuclear contracts to US outweigh the combined sentiments of the parliament ?

from:  fathima
Posted on: Sep 19, 2013 at 12:38 IST

This is nothing but servility. There can be no other explanation for the manner in which our PM succumbs to the U.S on each and every issue.

from:  Habeeb Rahman
Posted on: Sep 19, 2013 at 12:36 IST

Another example of the spinelessness of our government. We all know how much US companies are willing to take responsibility for their actions from the Bhopal gas tragedy. Now the Indian government is only kowtowing to their demands by making it easier for them to run away scot-free if some equipment explodes.

from:  Nitya
Posted on: Sep 19, 2013 at 12:36 IST

While clause 17a could be adequate, as wondered by the author as to how a Public Sector
organization answerable to Parliament, would not stipulate in writing the liability clause, it is
necessary to make it more secure by Clause 17b, as experience shows, in the Defense
Tatra Truck and the Helicopter scams quite a number of contractual clauses were changed
on quid pro quo compromises and down the line in time this could happen in this case also.
Clause b would ensure that such opportunity is totally denied and not to depend on
vulnerable human interventions, as consequences are disastrous. Bhopal gas tragedy is a
standing reminder of unfulfilled liabilities taking advantage of loopholes in contractual terms,
that still haunts us after decades; can't take chances in a nuclear deal

from:  M.R.Sampath
Posted on: Sep 19, 2013 at 11:03 IST

Our administration must not succumb to pressure in matters of such criticality since such diplomatic lapses might set the precedent for compromises of a much graver kind.

from:  Karthik
Posted on: Sep 19, 2013 at 10:58 IST

This is outrageous! The clause will at least make the suppliers go through strict quality checks and also some relief to the nation in case of, god forbid, a disaster. Any compromise in this regard will be compromising the lives of people, and at the very least, a sell out. I am sure, Dr Manmohan Singh will not do any such injustice, however lucrative, the offers from the lobbyists may be, to his own people. He surely remembers the Bhopal gas tragedy!!!

from:  Sandy
Posted on: Sep 19, 2013 at 10:52 IST

This is just bowing down to pressures from the lobbyists.
Why not have a stand and maintain it? How many more Bhopal tragedies do we want to learn this?

from:  satty
Posted on: Sep 19, 2013 at 10:50 IST

This is ridiculous and utterly irresponsible of the Govt! The Bhopal Gas Tragedy has been conveniently forgotten by the Govt. Large multinationals cannot be given watered-down clauses so they can make money when the sun-shines but go scot-free when events go wrong!

from:  Suresh
Posted on: Sep 19, 2013 at 10:46 IST

Ah, how we kow tow to the Americans, and for what, I do not know. Contrast this with the position of Brazil, which has postponed a meeting with Obama to protest spying/snooping charges by the NSA.

from:  Alok
Posted on: Sep 19, 2013 at 10:40 IST

Can the media give the country a reason, why govt of India easily bends to US business lobby.
Like the govt choose to not to seek liability from Union Carbide or its new owners, the govt will wave its right to seek compensation for faulty equipment. If the suppliers were so sure that their equipment is not faulty, then they would not be opposing this law.

from:  Abhinav
Posted on: Sep 19, 2013 at 10:29 IST

The above Section 17 has been a major bottleneck in the US Civil
Nuclear deal and also with Russia(Kudankulam). Instead of diluting the
provision and shifting the decision entirely on NPCIL, the government
must amend the provision providing for a joint checking of the
equipment by Indian experts and US manufacturers(at manufacturing
stage) and reduce the amount of compensation(in case of accident).This
way the operator is also responsible for checking the defects of the
equipment. We must understand that diplomacy is all about give and take
, the power requirements of our country are increasing and nuclear
power is the a viable option for clean energy . India should also
bargain hard for diluting some provisions of the Hyde Act(US) and check
that our independent Foreign policy is not jeopardized

from:  Ganshyam Meena
Posted on: Sep 19, 2013 at 10:24 IST

Lets dilute our constitution to accommodate foreign rule in India. This
is what is meant for Mr. Economist to make India a rich country and
100% reliable on foreign soils. The FDI(retail) is diluted, now the
nuclear bill, tomorrow the constitution.
This time I will vote for sure, if it costs me Rs.1000 also I`ll not
A sorcerer told a man to sacrifice his child, so that he can be
wealthy. The man did it and he found that no one is there along with
him to enjoy the wealth.

from:  Madan Mohan Reddy
Posted on: Sep 19, 2013 at 10:23 IST

I consider that the Attorney- General's opinion given to GOI to
"effectively neutralise a key provision of the Nuclear Liability Law"
(NLL) which was passed by the Parliament keeping the interests of the
NATION as being of foremost importance, is fraught with infirmity and
danger of being struck down later. Can any person in Authority at
NPCIL afford to try and circumvent the spirit of the NLL as the news
report above seems to suggest? Doing so may at a later date boomerang
back with great force, particularly if an America-purchased NPP runs
into an accident situation (God forbid), the needle of suspicion for
the cause pointing to an error of commission or omission by the
Supplier - a wholly credible scenario considering that the plants
proposed to be purchased from abroad are unproven. Thank you for red-
flagging this undesirable move proposed by GOI. I do hope cognoscenti
will stand up as one to oppose this. In summary, in my view import of
NPPs is not in the interests of our Nation.

from:  Udhishtir
Posted on: Sep 19, 2013 at 10:19 IST

The logic behind dilution of Civil Liability for Nuclear Damage Act is
very simple. The logic and language of unfettered capitalism is money
and only money. That the foreign supplier of reactors cannot be held
liable for any damages shows India's weak stance in the international
To be even simpler, it is giving a green signal to sub-standard imports
from the foreign companies which are already racist. Hope we do not have
one more disaster like Bhopal Gas Tragedy.

from:  C Sivakumar Kashyap
Posted on: Sep 19, 2013 at 10:13 IST

This man manmohan is out to sell the country. An american agent. Sad days for India. He should take an example of the Brazilian Head of State, what a contrast.

from:  asoke aryapratheep
Posted on: Sep 19, 2013 at 09:56 IST

Contrast this to how the Obama administration brought BP to account for the Gulf of Mexico spill resulting in penalties paid crossing billions of dollars. There are times I wonder on which side do India's politicians play for.

from:  Kartick
Posted on: Sep 19, 2013 at 09:24 IST

Safety of the nation as gift to the corporate's of the west
(capitalists). Well, this is in line with what this govt. has been
anyways doing so far.

from:  Kasi Viswanath
Posted on: Sep 19, 2013 at 09:18 IST

Great.. On one hand you have Obama that is frying BP over an oil spill and here we have a PM who is willing to write away nuclear accident liabilities. Way to go.. What a shame we are down to this state even with the Bhopal incident fresh at the back of our minds where Union Carbide blatantly refused compensation. Quid pro quo is ok, but this is such a bad deal.

from:  Krishnan
Posted on: Sep 19, 2013 at 09:16 IST

Only a few days ago, Japan closed down its last functioning nuclear reactor indefinitely. The German Chancellor, Angela Merkel who had been the most ardent proponent of nuclear power, in the wake of the Fukushima disaster, formally announced on May 30, 2011, her country’s plans to abandon nuclear energy completely within 11 years. In the U S, there has been no ground breaking on new nuclear plants since 1974. Against this background, it is rational to assume that there will be little appetite in these countries to spend any large sums of money on R & D in nuclear power field. But, paradoxically, our own atomic energy establishment, which has to depend entirely on foreign vendors for design and construction for nuclear reactors, is going ahead with its own grandiose plans for more and more reactors, regardless of what is happening in the more advanced countries. Is this, then, a case of ***** rushing in where Angela (Merkel) fears to tread?

from:  V Nagarajan
Posted on: Sep 19, 2013 at 09:00 IST

Looks like Congress Govt will sell India before May 2014- before it is
kicked out of power. Good work by The Hindu

from:  Ragu
Posted on: Sep 19, 2013 at 08:50 IST

There we go again, the American lobby apparatus influencing Indian
politicians to provide immunity to US Corporatism. Our government should
keep in mind the Bhopal tragedy. No one went to jail for killing 1000s
of people.

from:  Anand S
Posted on: Sep 19, 2013 at 07:38 IST

There cannot be any status below this begging level.

The country has to repent for ever for having elected congress government

from:  vasudevan
Posted on: Sep 19, 2013 at 06:43 IST

Here is another report with a tendentious headline that imputes motives to the PM on a legal matter of interpretation of Article 17b. I have no ides whether the authors are lawyers expressing their personal opinion in which case they should write an opinion piece. The fall in standards of the Hindu is appalling.

from:  T.N. Srinivasan
Posted on: Sep 19, 2013 at 04:59 IST

The nuclear deal since it beginning has brought uproarious scenes in the law making House as well as among intellectuals to avoid a high baragain by the counterpart.
Anyhow after prolonged contemplation an agreement has been made betwenn the
countries. This deal has positioned India in the international scenario a bit super at the same time some reviewers found side-effect that may cause adverse effect to India. Having business concious to provide fiscal benefits, such movement is wort'hy to woo both the business houses all along.

from:  George P. Joseph
Posted on: Sep 19, 2013 at 04:55 IST

There is nothing to be surprised. Dr. Manmohan Singh became prime
minister of India with a tacit understanding that he would protect the
American interest at any cost. If Indians have not understood it in the
last 9 years, it is their stupidity. After all, is he an elected prime
minister or one appointed by the high command?

from:  Bijay K Dash
Posted on: Sep 19, 2013 at 04:23 IST
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