Monthly Archives: March 2010

Civil Nuclear Liabilty Bill: What does it mean?

Update : The government of India tabled the Nuclear liability bill in the parliament a few days back. But because of intense opposition, the Govt has to back track. They have postponed introducing the bill and the Law Minister Veerappa Moily has said that the govt is open to discussions on the controversial bill.

The bill has far reaching consequences to every citizen of the nation that wide spread public discussions should have happened before the bill was tabled, not after it was opposed in the parliament. So what exactly is the bill and what is so controversial about it.

The Bill:

The purpose of the bill is the cap the economic liability of the supplier of nuclear reactor and the operator of the reactors and the total liability of the govt in case of a nuclear disaster (Remember Chernobyl).

  • Total liability: The total liability in case of a nuclear accident (the cash that will be distributed to people as compensation) will be 300 million SDRs (around Rs. 2300 crore or 450m Dollars)
  • Supplier: With the NSG waiver and subsequent deals India has signed with 8 nations, technically India can buy nuclear reactors from these 8 nations. So suppliers refers to Nuclear reactor manufacturers in all these nations (eg: GE(USA), Areva(France)). As per the bill, the liability of the supplier is zero. Liability is channeled from the supplier to the operator.
  • Operator: The operator, (in India all reactors are under NPCIL , a departmental undertaking under the Dept of Atomic Energy) will have to pay a maximum of Rs.500 crores
  • So the remaining (2300-500 crores) will be the govts liability……

Summing up…..if a reactor blows up, the govt will collect 500c from NPCIL and put in another 1800c and distribute it to people

All this appropriations should be done by the govt. No one can sue the supplier (read the huge American companies). If its a case of gross negligence, the operator can sue the supplier to get back what it paid (max of 500c).

If all reactors are run by NPCIL, a govt undertaking, then why divide the liability between govt and the operator??

ANS: We plan to expand our total installed nuclear capacity form 4300MW (19 reactors) to 4lakh+MW by 2050. The most modern reactor of Areva has a capacity of 1600MW. So that is about 250 reactors by 2050. The govt simply cannot run all those. So naturally we will open nuclear sector to private operators very soon. The differentiation is to take into account this fact.

Putting in perspective, the Bhopal gas tragedy case was settled off court. The total damages paid by Union Carbide was 470 million USD. That is estimated to be less than one fifth of the damage caused by the incident. So when the effect of an industrial disaster is placed at more than 2500 million USD, the govt is trying to cap a possible nuclear tragedy at 10m (Rs.500c) USD for the foreign operator…

Come on people, even common sense suggests that this is the most unjust piece of legislation ever to be taken up in our parliament. It also goes against three fundamental aspects of our legal system:

  1. Article 21 of the constitition: ‘Right to Life’. The meaning of this article has been expanded by the Supreme court ever since to Right to life with dignity. The bill threatens exactly that
  2. ‘Precautionary principle’: This is a result of a number of SC judgments on industrial cases. As a precautionary step, the onus of the safety of an industrial establishment in our country is completely placed on the operator. Lack of economic accountability removes this onus
  3. ‘Polluter pays’: This has also been a result of SC judgments. The compensation and the cost for cleaning up the environment will have to be paid by the polluter, namely the supplier and operator.

If its so unjust and unfair then why is the govt trying to pass it….Who needs this bill???????

ANS:  The American companies and the American companies alone need this bill to be passed by the govt. The wont supply their reactors to any nation that dont have a liability regime in place. The French or Russian companies dont need this.

So why cant we just buy only from Russia and France and not from US??

ANS:We cant do that. As a non NPT nation, none of the nuclear nations (NSG members) are supposed to sell nuclear reactor or fuel to us. But under US’ initiative, an exemption has been given to India (‘NSG waiver’). The waiver was given only because of US’ clout (Not for our good, but for american giants to access India’s growing nuclear market). So as a return for that India has given written assurance in 123 agreement that a part of our nuclear requirements will be sourced to American companies.

Plainly, US gave us the exemption for them to make profits, so we are bound to buy reactors from them.

Fortunately because of the intense media glare and scrutiny the issue got (The Hindu had initiated an extensive debate in the op-ed page), the bill has been put in the back burner. But going with what has been happening recently, I feel its just a matter of time before the govt passes it. Whenever American does anything, it comes with strings attached that we might have never even dreamt of. End User Verification Agreement, Iran vote and the current bill are only a few to name. Its an open world. There are other nations who are ready to offer better products at better terms (Russia has been helping us with nuclear reactors since when….even the nuclear reactor in Arihant is supposed to be based on Russian design). Given that, the policy makers in South bloc should have the balls to negotiate with US on equal terms and not come later to the people with such preposterous legislations that defy common sense.

Tail note: The liability regime in US is the Price Anderson Act. As per this liability is capped at 10 billion USD for operators (again, 1000 times higher than our 10 million) and remaining is to be paid up by the govt. Is this how the govt values an Indian life. I think preposterous is an understatement