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Updated: November 17, 2011 09:19 IST

New rules give some relief to nuclear suppliers

  • Special Correspondent
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A graphic presentation containing key recommendations on nuclear liability bill.
A graphic presentation containing key recommendations on nuclear liability bill.

The government has finalised rules for the implementation of the country's new nuclear liability that aim to meet the concern of American nuclear suppliers wary of being exposed to unlimited liability in the event of a Fukushima-type accident involving any of their reactors.

The rules, which were notified on November 11, were made public on Wednesday on the eve of Prime Minister Manmohan Singh's visit to Bali for a regional summit where he is also set to meet U.S. President Barack Obama. They are, however, unlikely to satisfy U.S. objections even as they trigger criticism at home for what the Opposition will see as a dilution of Parliament's legislative intent in enacting a tough liability law last year.

American officials had opposed two provisions of the Indian Civil Liability for Nuclear Damage Act that stemmed from the legislature's refusal to indemnify foreign suppliers from accidents caused by faulty equipment. Section 46, which allows ordinary citizens to file tort claims for damages, is seen by the U.S. nuclear industry as exposing its companies to unlimited liability in the event of an accident. The new rules do not affect this Section, thus leaving the primary American complaint unaddressed.

Washington's second objection is to Section 17(b), which grants Indian operators a right of recourse against nuclear suppliers if an accident results from the “supply of equipment or material with patent or latent defects or sub-standard services.”

The new rules do not directly affect 17(b) but open a door for its dilution by giving suppliers the option to piggy-back on 17(a) — which penalises a supplier if he had accepted liability in a written contract — and thereby limit their exposure in the event of faulty equipment to accidents which occur in the first five years of the reactor's operation. The rules do this by specifying that the provision for the right of recourse under 17(a) “shall be for the duration of initial licence issued under the Atomic Energy (Radiation protection) Rules of 2004, or the product liability period, whichever is longer.” The 2004 rules state in Section 9 that every licence runs for a period of five years and the 2011 rules define “product liability period” as the period for which a supplier accepts liability for an accident caused by defective equipment in a contract. By this fix, Indian officials will tell the U.S. that an American vendor can limit its exposure for an accident to five years and Rs. 1,500 crore.

However, since the Fukushima-Daiichi accident in Japan happened some three decades after the initial reactor supply, critics in India are likely to ask whether the five year limit specified by the rules is prudent – or even legal, given that the Liability Act itself specifies no such term limits.

Ironically, Indian officials fully expect to be told in Bali later this week that the new rules do not match up to American expectations. That is why U.S. officials have been floating other solutions, such as getting the International Atomic Energy Agency to “vet” the Indian law to see if it is compliant with the Convention on Supplementary Compensation for Nuclear Safety, an international treaty that India has committed to sign. South Block sources told The Hindu that India has flatly rejected this suggestion and is likely to say so publicly if the U.S. pushes it again.

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This is major dilution , issue is not dilution itself why not passed in parliament rather than notification

from:  Sivaprakasam
Posted on: Nov 18, 2011 at 08:08 IST

Fukushima is a man made natural catastrophe which is fast breeding Fukushimas ubiquitously and hance must never have been allowed ever. Thus there is no case whatsoever for nuclear energy because in modern civilization cumulative unforgiving effects of man will cause more catastrophic consequences of nuclear accidents with nature violently reacting to the genie every time it happens. Abandon nuclear power which in any case is gobbling up all the power produced by it and thereafter requires society to supply power for managing the mothballing of the reactors, it's spent fuel pools and wastes. All citizens must realize the unacceptable danger to all life and prohibit the foolishness whose consequences
will last forever. Stop this madness.

from:  Ashok
Posted on: Nov 17, 2011 at 23:16 IST

The new liability bills remind us UPA Government only concern is to convince the American suppliers to accelerate Nuclear energy program and it stop thinking about the safeguards of its citizens. In every action it concedes that in any cost to obtain NSG approval. The Government didn’t learn lesson from Union carbide Bhopal Gas leak consequences.

from:  Maxmialn
Posted on: Nov 17, 2011 at 22:30 IST

When lives are either extinct or crippled, what good is the compensation? It is ironic to bargain on what is adequate compensation when a whole generation of people is wiped out or crippled, like in the Bhopal disaster. The Bhopal Plant was considered a state of the art plant until the tragedy struck. A nuclear disaster, caused by whatever reasons, is far more calamitous. Is any compensation good enough? Limiting the liability to the first five years and Rs.1500Cr, what is the basis? Looks some conjured up empirical figure. Any technology being fallible, the least one can expect is, in the event of an unforeseen accident, the risk should be controllable and containable, limiting the damages within certain parameters of costs and loss of lives. A plane crash or a train accident is limited to the passengers and the cost of equipment and incidentals. It is not so in a nuclear plant accident; the consequences of radiation are far reaching and for far too long to haunt, kill and destroy.

from:  M.R.Sampath
Posted on: Nov 17, 2011 at 22:15 IST

Fukushima accident happened due to natural event of a grave order. No civil liability is invoked for compensation as civil liability act for nuclear damage excludes damages resulting from extreme natural events. So is the case with the Japan act. So the compensation is paid by the operator or Government who also pay much larger compensation on account of the damages resulting from Tsunami. The suppliers, in any case, are are liable for any compensation whatsoever.

from:  sudhinder thakur
Posted on: Nov 17, 2011 at 15:28 IST

An important component ought to be opening up of nuclear safety analysis technologies. At the very least, the nuclear equipment suppliers should verify the integrity of their supplied parts every couple of years. They can be held liable for their failure then.

from:  Vineeth
Posted on: Nov 17, 2011 at 14:59 IST

"However, since the Fukushima-Daiichi accident in Japan happened some three decades after the initial reactor supply, critics in India are likely to ask whether the five year limit specified by the rules is prudent" Fukushima accident was caused by a tsunami outside of design parameters and was no failure of standards. Your argument is invalid.

from:  Vineeth
Posted on: Nov 17, 2011 at 14:55 IST

I disagree with Sugavanam, one must not chide the prime minister using such strong words. But, coming to the actual issue, i stand by what Suguvanam says, we cannot let the safety of our people be traded for the interests of a handful of American nuclear suppliers, though america may have held india's hand in getting a waiver from the NSG, it cannot dictate the terms on how law is made in India.

from:  bharath
Posted on: Nov 17, 2011 at 14:36 IST

It is difficult to believe that the Congress, the party of Gandhi and Nehru, would degenerate to this state of total unconcern for the life and welfare of the people and allow its Prime Minister to play with people's habitats,livelihood, health and life itelf to generate more electricity ostensibly for the good of the people. People know who among the people will be the beneficiaries. About every 6th person in the world lives in India and evry Indian deserves better.

from:  K.Vijayakumar
Posted on: Nov 17, 2011 at 09:40 IST

I cannot understand why there is a specific mention that the operator of an atomic plant will only be the government. And also, it mentions that the cap in the compensation by the operator which is now ONLY the government will be 1500 crores. So essentially these vampires sitting on the cabinet is going to use tax payers money to pay is back for the damages that were not the tax payers fault? So long as there is a political nexus with nuclear supply and folks with plenty of money to throw in the wind for private electricity distribution, we will be fleeced by our own flesh and blood.

from:  Jayakrishnan Rajendran
Posted on: Nov 17, 2011 at 08:47 IST

Our PM took all of us for a ride on the Indo-US nuclear agreement and has made it more difficult to get Nuclear plants from abroad. Americans are very clear in that they want to dump all their defective nuclear plants in India and make money.The very fact that other nations do not like our Nuclear liability bill shows that nuclear plants are accident prone and not as safe as the scientists are saying about Kudankulam.Let us face facts clearly. We do not want another Bhopal like tragegy in this country. The Congress Party does not in effect care for aam admi but only talks about helping him.Do intensive research on solar and wind energy. Hand over power generation to the private sector and one will get results.The State agencies are terribly corrupt and employ people not by their knowledge but by their capacity to pay bribes.The telecom sector is the best example of what the private sector can do.Going for nuclear plants is a stupid and impracticable idea.

from:  S N IYER
Posted on: Nov 17, 2011 at 07:45 IST

Instead of thinking about the safeguards for our country against liability,the UPA govenment tries to satisfy the suppliers.They have totally forgotten the Bhopal accident involving Union Carbide.So we should not compromise by diluting the Nuclear Liability Bill.The act of UPA government may be in panic, after being cold shouldered by Mr.Obama during the G-20 summit.Why should we dilute the bill to help the Amerikan suppliers in the first place?Is the lives of Indians inferior to that of Amerikans?We know very well,how the Amerikan Government reacted to the fiasco in the gulf of Mexico oil spill and recovered the entire cost for damage,and asked them to stop spillage and clean up the mess and BP bowed..Amerika is known for its double standards when it is the affected party.Mr.Manmohan Singh is doing something which is detrimental to India's Sovereignity.The future generation will never forgive UPA and its allies for the attempt to take us through the untrodden path towards submission.

from:  K.Sugavanam
Posted on: Nov 17, 2011 at 06:44 IST

Isn't there something like lifetime warranty? Why can't that norm beapplied in the nuclear industry?

from:  Venugopal Kaikulath
Posted on: Nov 17, 2011 at 06:27 IST

If India is protecting nuclear energy production from possible legal option to sue the suppliers of nuclear equipment for unlimited damages after unlimited period by the government and any citizen, there is no chance for India to obtain investment and equipment from the US. The producers of nuclear energy and the operators of the nuclear plants are the primary target for any legal action in the event of an accident and in this instance the government of India and the operators of the nuclear plant are responsible for the accident. If government of India wants to hide under the legal requirements for the suppliers of the nuclear equipment only, no one will come forward for the supply of nuclear equipment to India. The US will not take such a risk. Russia has already withdrawn technical staff from the Kundamkulam nuclear plant construction because of the impedements for construction and the scare of law suits in the event of any future accident.

from:  Davis K. Thanjan
Posted on: Nov 17, 2011 at 05:56 IST

Interesting that we are more interested in satisfy American Suppliers demands for liability. It seems government somehow doesn't care about Indian citizens, Kundankulam for example is unheard. We pacify American suppliers not the people. I wonder what should be our look out?

from:  Chowdhary
Posted on: Nov 17, 2011 at 03:56 IST

I hope the readers of the latest news will have some valuable comments on the dilution of the liability clause. Looking at things in life in a simplified manner, in normal course of use of any equipment, system or the like, some thing going wrong or not according to the design parameters is more likely as the object in reference ages. So as the years progress, the fatigue factor, among others, has more influence on the non performance, under performance of failure of components or systems. Best maintenance and replacement and restoration practices in the industry provide care of long and fruitful use of devices addressing to minimise the possibility of unplanned things happening. First five years may be kind to the systems and equipment compared to later years of plant operation. For readers and experts consideration.

from:  Bharani
Posted on: Nov 17, 2011 at 02:39 IST

If the Nuclear Accident is powerful enough, these Laws will have no relevance,as the location will be inhospitable for Centuries,as Chernobyl is showing us all.Better eschew Nuclear energy as Germany, Belgium and even the Japanese Government[foolish,due to US pressure,as is being applied on MM Singh also, now] have decided. Reportedly,serious RADIATION problems,due to Fukushima, are being hidden due to the pressure of the Nuclear Lobby by the Japanese Government.Will the USA,not force an Indian government to do the same in the case of an accident?
As regards the so-called,recourse, Bhopal has shown how unreliable and inhuman, the USA is!Dow [who,it is strongly suspected,purchased the plant from UCI,to defeat the Indians using Legal shenanigans] is being pampered by the UPA.

from:  Sadasivan
Posted on: Nov 17, 2011 at 00:40 IST
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