Opinion » Columns » Siddharth Varadarajan

Updated: June 22, 2010 16:49 IST

Government dilutes nuclear bill under U.S. pressure

Siddharth Varadarajan
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A woman on her way to file RTI requests at the PMO in New Delhi with regard to the Civil Nuclear Liability Bill. File Photo: V.V. Krishnan
The Hindu
A woman on her way to file RTI requests at the PMO in New Delhi with regard to the Civil Nuclear Liability Bill. File Photo: V.V. Krishnan

At Washington's request, the Manmohan Singh government has agreed to delete a key provision of the draft civil nuclear liability bill allowing American suppliers to be sued for recovery of damages in the event of an accident caused by gross negligence on their part.

Although the bill channels all liability for a nuclear accident on to the operator of the facility, Section 17 of the draft tabled in Parliament last month allows the operator a ‘right of recourse' — legalese for the right to recover any compensation it is forced to pay — under three circumstances. These are if (a) such a right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted from the wilful act or gross negligence on the part of the supplier of the material, equipment, or of his employee, and (c) the nuclear incident has resulted from the act of commission or omission of a person done with intent to cause nuclear damage.

Of these, only (a) and (c) find mention in the model law specified by the Convention on Supplementary Compensation for Nuclear Damage (CSC). The CSC, which India will accede to, however, does not prohibit the inclusion of additional provisions. Indeed, some countries have already included gross negligence by suppliers as grounds for invoking the right of recourse in their liability laws. Article 4 of the South Korean Act on Compensation for Nuclear Damage, for example, includes language similar to 17(b) of the Indian draft.

When the Indian bill's provisions were made public, senior officials took pride in the inclusion of 17(b), which they said was needed to deter suppliers from being negligent taking their safety obligations lightly; 17(a) alone was inadequate, they said, since no supplier agreed to accept liability of negligence in a contract. But pressure from Washington seems to have prompted a rethink.

On March 8 and April 1, The Hindu had reported how the U.S. nuclear industry was upset with 17(b) and wanted it deleted for fear it would “open the door to more lawsuits.” The government has now obliged the American side by getting rid of this sub-clause entirely.

Window for action

The only window for legal action against a supplier of faulty or unsafe equipment is now Section 46 of the nuclear bill, which says the Act's provisions “shall be in addition to, and not in derogation of, any other law for the time being in force.” This, say Indian officials, will allow the filing of tort claims and even criminal charges in case a nuclear accident is caused by negligence on the part of the nuclear operator or its equipment suppliers.

But the draft bill contains no provisions to make the filing and pursuit of these claims or charges easier, raising the prospect of lengthy and eventually fruitless litigation of the sort the victims of the Bhopal gas disaster have had to endure for 25 years.

The voice of truth seems to be drowning in the cacaphony of protests.
The decision of the Government of India to limit the liability of nuclear suppliers from the United States of America appears to be in bad judgement at first sight. The timing of the decision, although might not have been helped,coming in the wake of the Bhopal Tragedy verdict has only fuelled what seems like a pro-corporate, anti-people stance by the ruling alliance. The true failing in both these decisions, spanning the Legislative and the Judicial machinery, is the fact that a fundamental truth has been ignored.

With regard to the Bhopal verdict, our focus should have been on the failing of our fellow countrymen first, who had neglected precaution either willingly or by ignorance(non-excusable by law in either case). The inherent profit-maximisation (as well as cost-minimisation) principle of capitalist economies neglects catastrophic loss in favour of forseeable cost that can be measured. In other words, companies will continually cut corners and take risks, even at the expense of human life (which incidentally cannot be measured).

As for the cap on liability; although it appears to let the nuclear materials suppliers 'wash their hands' of any blood that might be shed as a result of their negligence or intent, the opposition and indeed the citizens of our country would be better served to try and overhaul our screening procedures/training for handling and long-term operation of these sensitive equipment(maybe by enforcing a contribution from suppliers as part of the purchase contract) as our energy crisis is not going to be wished away.

With 1,139,964,932 voices raised in unison, Political parties or the Judiciary can ill-afford to suffer willful neglect or ignorance.

Jai Hind.

from:  Grain Of Salt
Posted on: Jun 11, 2010 at 11:30 IST

Amidst all the hype that Siddharth and the Editor have created, readers are asking some related questions.In the case of possible disasters arising out of Russian and French reactors, how will India tackcle losses, in the absence of a similar law? Are we to expect that an absence of law in case of these nations will do us any good? We have a history of running away from mishaps -- in the last 5 decades, MiG warplanes have been crashing with nauseating regularity. Why did we not take any action on the suppliers? I do realize that this comment will be "moderated" and never appear.

from:  Jay Ravi
Posted on: Jun 11, 2010 at 06:42 IST

Why can't you link to the March 8 and April 1 reports you mention by the Hindu to bolster your case? There are no articles on the nuclear bill to be found on the Hindu website on those dates. Given that the entire suggestion of US pressure is based on hearsay, one would think that the least you could do was to link directly to the articles you say support your case.

from:  Rahgav A
Posted on: Jun 11, 2010 at 00:37 IST

this is disappointing...especially given how the government had bragged about having the section 17(b). This is shocking considering the Bhopal Gas Tragedy and the BP oil spill happening almost in parallel...

I guess coming events are casting their shadows before...

from:  Chetan
Posted on: Jun 10, 2010 at 22:24 IST

lifes of Indians are cheap to both Indian government and also US govt. Hence diluting the bill.Indian politicians never learn lessons from History. They always like to play with Life of Indians.

from:  Indrajeet
Posted on: Jun 10, 2010 at 14:00 IST

A Nuclear accident usually occurs due to an uncontrollable sustained chain reaction. It usually results in (i) Melting of the reactor core and (ii) Radioactive contamination. If there happens to be a wilful act or gross negligence by the supplier ( like failure of the material or design failure ), it should be identified by the engineers of our Nuclear establishment in the inspection stage itself and further during operation. More often Nuclear accidents happen due to misunderstanding of plant capacity and negligence during the operation of the plant. Hence, the operator of the plant must be fully liable for any Nuclear accident.

from:  Veda narayanan
Posted on: Jun 10, 2010 at 11:29 IST

The verdict on the gas tragedy has given a new impetus to the controversial Nuclear Liability Bill which has become a centre of attention. The proposed Bill still pending before the Parliamentary Standing Committee was mainly opposed for capping of Rs.500 crores in respect of compensation payable by the operator in the event of any unfortunate accident. In the last month The Finance Minister Pranab Mukharjee had expressed his judicious admonition in reply to the apprehension of opposition to the Bill stating that the capping of Liability may be a setback for India, but GOI may propose to empower itself to raise or lower the “LIABILTY” upon factoring into the extent of risks or threats connected with a nuclear installation, wherein if the amount of liability is lowered, it shall not be less than Rs.100 crores! He had not encouraged Opposition M.Ps to speak on the merits of the Bill at the introduction stage. The amendment of Sec.6 of the Bill had proposed that the GOI may review the amount of liability periodically and may even increase if necessary by issuing orders under the Act.

Further the GOI had proposed deletion of subsection (b) of Section 17 of the existing Bill which states: “Operator of a nuclear installation shall have a right of recourse where, the nuclear incident has resulted from the willful act or gross negligence on the part of the Supplier of the material, equipment or services, or of his employee”. The proposed amended version “will have right to recourse only if such right is expressly provided for in a contract in writing” will be incorporated in the Bill. Thus the In other words, the onus will be on the Operator (meaning the government) to ensure a foolproof commercial agreement with the supplier, failing which it would have to solely bear the burden of compensation in the event of a nuclear incident. The amendment is construed to be on the behest of the U.S administration.

The relief will be that the Bill will be having provisions wherein victims can apply the option to put forth legal proceedings in a court of law if not satisfied with the compensation package decided by the Nuclear Damage Claims Commission. The standing committee, headed by Rajya Sabha member T Subbarami Reddy, is supposed to meet again on 15thJune,2010.

The explanation by the Officials of Science and Technology Ministry that the reasoning for specifying the "cap" of liability is in the best interest of the nation, as it will facilitate the operating company to arrange for an insurance cover. As the nation is embarking on a massive expansion of civil nuclear projects to combat the mounting energy crisis, there is relevance in passing a proper Bill offering protection and compensation through a Liability Act. The GOI must dispel the fear of the opposition that any legislation will give room for foreign operators to venture in Indian soil in disguise.

from:  Prof.Madan Menon Thottasseri
Posted on: Jun 10, 2010 at 07:21 IST

doesn't look like the government has learned anything from the recent fiasco. i hope such a bill isn't passed. it would not only hurt the sentiments of the people of the country, but also jeopardize our lives.

it's like a green signal for american companies to make guilt-free blunders.

from:  Kishore
Posted on: Jun 10, 2010 at 07:00 IST

If US acts on the same yard stick, with respect to the oil industry, then BP MUST be allowed to go scott free without paying for the oil slick cleanup in Gulf of Mexico.
Hypocrisy, Thy Name is US !

from:  Arun Kumar
Posted on: Jun 10, 2010 at 05:11 IST

It's so ironical to the stance United States is taking with regard to BP and Oil Spill in Gulf of Mexico. The liability for "environmental" damage is limited only if the cause of the oil spill is an "accident". However, if the cause emanates from an act/acts of negligence and overlooking safety standards, the liability is almost unlimited. In such an event, it is highly likely BP would end up paying hundreds of billions of dollars to cover the damage.

from:  Akanksha Ahuja
Posted on: Jun 10, 2010 at 05:04 IST

why the hell Indian govt. is acting according to will of U.S ?. n why it has decided to dilute the bill.?...even a lame person has idea of the consequences to be faced after this..
justice for sufferers of BHOPAL GAS TRAGEDY is burried ...n same is going to future !

from:  mayank sahajwani
Posted on: Jun 10, 2010 at 01:53 IST

It is pity that Indian govt agreed to such an unacceptable clause put forth by US govt. Accepting this cause is a threat to the safety of civilians and Indian must highlight this to US authority that it is asking something which is absolutely unjustified under both legal and moral ground. The safety of civilians should not be compromised at any ground. Instead of making the draft bill more stringent, india is preferring to bow down to the inexplicable demand from USA. Hope sanity prevails.

from:  Biswajit
Posted on: Jun 10, 2010 at 00:53 IST
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