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Updated: July 30, 2010 02:15 IST

India-Russia nuclear talks hit liability snag

Siddharth Varadarajan
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Water pipes assembled at the Kudankulam nuclear power plant. India and Russia failed to agree on the issue of liability during the last round of commercial negotiations held in Moscow recently. File Photo: A. Shaikmohideen
The Hindu Water pipes assembled at the Kudankulam nuclear power plant. India and Russia failed to agree on the issue of liability during the last round of commercial negotiations held in Moscow recently. File Photo: A. Shaikmohideen

Russian firms not to have liability for any accident that may occur in reactors sold to India

It's not just American suppliers, Russia too is now insisting all liability for any accident that may occur in reactors sold to India must rest solely with the Indian operator and not with Russian companies involved in supplying components and knowhow.

At the last round of commercial negotiations held in Moscow recently between the Nuclear Power Corporation of India Ltd (NPCIL) and Atomstroyexport for the supply of four additional 1000 MWe reactors at Kudankulam (KK 3,4,5,6), the two countries failed to agree on the issue of liability. The Indian side wanted the contract to include a ‘right of recourse' which would allow NPCIL to claim damages from Atomstroyexport in the event of an accident resulting from negligence on the part of the Russian supplier. But Russian officials refused, citing the Inter-Governmental Agreement (IGA) the two countries signed in 2008 to back up their stand that all liability must be channelled on to NPCIL, the operator at Kudankulam.

Indeed, the IGA which India and Russia finalised in February 2008 and signed in December that year is clear on this point. Though the agreement has not been made public, The Hindu has accessed the text. Article 13 states: “The Indian Side and its authorised organisation at any time and at all stages of the construction and operation of the NPP power units to be constructed under the present Agreement shall be the Operator of power units of the NPP at the Kudankulam Site and be fully responsible for any damage both within and outside the territory of the Republic of India caused to any person and property as a result of a nuclear incident occurring at the NPP.”

Since Article 13 does not provide for the operator's right of recourse — a standard part of international conventions on civil nuclear liability — the Russian side says India's insistence on its inclusion in the commercial contract runs counter to the IGA.

Indian officials acknowledge the lacuna but put it down to India's weak negotiating hand in the days before the Nuclear Suppliers Group voted to lift its export ban on the country in September 2008. The language on liability was copied verbatim from the agreement for the first two Kudankulam reactors, though India — which is in the market for a mammoth 20,000 MWe of imported reactor capacity — is likely to drive a harder bargain in future negotiations with Russia.

More hurdles

Nevertheless, the current stand-off is likely to further complicate the Manmohan Singh government's efforts to pass a nuclear liability law that is acceptable to all domestic stakeholders and foreign partners.

The draft law includes three grounds for the Indian nuclear operator to invoke a right of recourse against its foreign suppliers. India is under pressure from the U.S. to dilute one of those provisions — Section 17(b) — which allows for claims in the event of negligence. Diplomatic sources told The Hindu that Russia was also uncomfortable with this clause.

Though Russia is refusing to include a right of recourse for the Kudankulam reactors, the 1963 Vienna Convention on Civil Liability for Nuclear Damage — which the Russian Federation acceded to in 2005 — allows for such a right if expressly provided for by a contract in writing.

'The operator's right of recourse — a standard part of international conventions on civil nuclear liability'

This is not correct and is the point. Suppliers liability is NOT part of any international convention, just the opposite.

from:  S Kennedy
Posted on: Sep 2, 2010 at 23:06 IST

I don't know which way this is going. All these countries highlights rules to prohibit sailing ENR technologies to India while at the same time ignores the rule of Vienna convention. India must make its stand clear on the liability issue. Though the primary responsibility lies with the operator, the supplier can not be let off for negligence on their part.

from:  Naveen Kumar
Posted on: Jul 30, 2010 at 14:25 IST

It seems to me that the Indian government does not really know what it is doing in such negotiations. How could they have agreed to the 2008 IGA? Is anyone paying attention?

from:  Rajneet S
Posted on: Jul 30, 2010 at 10:31 IST

Ya it would be very much helpful to include a right of recourse as govt cannot take a burden of the whole loss of property or a person.It is clearly mentioned in the article 13 also...............Jai hind

from:  vinay
Posted on: Jul 30, 2010 at 08:03 IST

Russis has shown that India is its best friend until Yelsin show India that do not trust us. We are in for what we can get. Looking at the very good relations Russia have with Iran, Russia have tet to supply Iran with the S_300 missiles. Putin personally may best of intentions but that best of Russian intentions can be easily coloured. Russia knows very well that India is close friend of Iran as Iran is to India. I suspect that has and cannot be easily changed. Remember, Iran's conduct when Pakistan and India had their problems. Russia seems to be moving a direction where India cannot trust it as a true friend. India be careful.

from:  Joseph lallman
Posted on: Jul 30, 2010 at 06:29 IST

Where is democracy when the representatives of the people of India serve their interest than the people's interest who they represent. By not making the key points in the agreement, the GOI has implicitly acceded that this agreement is not welcome at home but has gone anyway which shows their callousness and their tendency to cover up. While the Russians have full right for arguing on exempt from liability on the grounds of the agreement it is our politicians who have to be blamed for this mess and Nuclear liability should be borne the party which is the cause of the accident. If the accidental or incidental fault by the suppliers is the cause of an incident they should be made to bear the full liability and be tried in an international court (as Indian judiciary always favors the rich and powerful and before any verdicts the victims grand-son/daughter would have long be passed away) free of charge for the victims. The INternational court can collect the charge, if needed, from GOI. If the operator is the cause of the incident he should bear the liability again the victim should be able to try the operator in a neutral court, International court. We cannot ask the GOI to pay the victim to conduct the trial because it will never be done, practically. And one day there will be a news that so much money has been granted for the trials but on the ground none of the victim would have received anything.

Anyway, people are dumb so they can be exploited, isn't it? There is not a shred of victim activism after Mumbai and the victim activism is mild and can be brushed under carpet in case of Bhopal, so why should it be any different after a nuclear incident? I believe in the perspective of the politicians they are doing the right thing that serves them.

from:  Sivasathivel KANDASAMY
Posted on: Jul 30, 2010 at 04:38 IST
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