The Indian nuclear industry on Tuesday objected to certain provisions in the proposed Civil Liability for Nuclear Damage Bill, 2010, fearing that it could hamper and completely undo the government's efforts at accelerating nuclear power generation.
In a letter to Prime Minister Manmohan Singh, Federation of Indian Chambers of Commerce and Industry (FICCI) president Rajan Bharti Mittal has expressed his concern over provisions pertaining to clauses 17 and 17(b), and sought his intervention. Chandrajit Banerjee, Director-General of the Confederation of Indian Industry (CII), expressed similar reservations in a letter to the Union Minister of State in the PMO Prithviraj Chavan.
Mr. Mittal maintained that making the supplier liable for any intended or malafide action causing damage would adversely impact the participation of Indian industry not only in future programmes, but also in supporting or servicing the present 17 nuclear power plants, as well as other nuclear installations operating within the country.
The FICCI chief contended that attributing any defect liability beyond internationally accepted period of 12 to 24 months on the supplier of equipment would render unviable the participation of technology providers both domestic and foreign and force them out of the nuclear business.
He was of the opinion that Clause 17 was neither implementable nor justified and said that any Civil Nuclear Liability (CNL) claim on suppliers and service providers, beyond their terms of supply — that is for 60 years of plan life plus claim liability period of 20 years — would make impossible their participation in future.
Mr. Mittal also stressed that nuclear plants involved a large number of suppliers (about 200 to 300) of the material, equipment and services, including small and medium sized enterprises, and underscored the impracticality of bringing all of them under the realm of civil nuclear liability.
Such a step, he maintained, would necessitate each supplier to take requisite insurance leading to huge rise in costs of supplies, which consequently would raise the cost of nuclear power and hurt the country's plans to secure energy supplies at affordable prices.
He apprehended that in regard to the Light Water Reactor (LWR) programme, foreign suppliers passing on their liability to Indian suppliers would stall the growth of Indian nuclear manufacturing industry and deliver a blow to the government's plans to indigenise maximum supplies for the foreign technology plants.
In Mr. Mittal's assessment, Clause 17(b) would severely impact the participation of global nuclear industry in India's nuclear programme, not only hampering the country's nuclear plans but also availability of radioisotopes for nuclear medicines, irradiation of food and waste management.
Underlining the need to distinguish between civil and criminal liability, Mr. Mittal said that suppliers would be unable to take any civil liability on their books and the operator could take recourse to the existing Contract Act and Laws of Torts for any intentional faults by suppliers for causing nuclear damage.
Mr. Mittal urged the Prime Minister to delete Clause 17(b) for continued participation of nuclear suppliers in India's nuclear programme.
Mr. Banerjee maintained that globally there was no insurance coverage available for suppliers in the nuclear business. Foreign suppliers would also not be able to participate because of lack of insurance coverage.