The Civil Liability and Nuclear Damages Bill 2010

No Clear Liability
Government has today introduced Civil Liability for Nuclear Damages Bill 2010 in the parliament. A logical consequence of much controversial and widely debated nuclear deal with the US, the Bill intended to facilitate entry of foreign firms in nuclear power generation seems destined to be no less controversial. The likely opposition against the bill is to be both political and economic in nature. The political one carries the echoes of controversy surrounding Indo-US nuclear deal while the economic factors may point to role of state in risk subsidization of intrinsically hazardous nature of nuclear commerce.
Liability arising from accidents is an important issue in nuclear civil nuclear power generation. Two multilateral regimes exist today to handle liability issues arising from nuclear accidents. The IAEAs Vienna Convention for Nuclear Damages and OECD led Paris Convention. This is apart from the national liability laws like Price-Anderson Act in the US. There is no provision for liability in India’s Atomic Energy Act of 1962. Most of the imported civil nuclear reactors in India today are a result of agreement between governments that the government of India ( read Indian taxpayer) through its state actor, Nuclear Power corporation of India Ltd, NPCIL ,alone liable against any nuclear accidents.
The bill pegs the liability of plant operator at Rs 500 cr with a further Rs 2087 Cr to be born by the government in case of an accident. Clearly ,it seems, the major burden of safety is to be borne by the taxpayer not the plant-maker foreign firms. Besides the provision against raising any lawsuit by victims in an Indian court or home country of the reactor builder ostensibly seems to be for purpose of easing the entry of private firms, mostly US based, in nuclear power generation. Though it can easily be labeled by critics as appeasement of US, the government may in fact be bending to US pressure to help its nuclear firms, most notably, General electric and Westinghouse. Besides the low upper liability limit can be treated as attempt to subsidize foreign reactor builders through taxpayer paid funds. India is not a signatory to Vienna or Paris convention, which doesn’t prescribe any upper limit on damages. Incidentally the upper limit under proposed Indian bill is the minimum prescribed under the Vienna convention. Governments anxiety to control cost of nuclear power generation appears to have got better of its commitment to protect health and safety of its people. It is likely to set a precedent on government bearing the burden of private-sector failure.
The Price-Anderson Act of the US does not providing for the channeling of legal liabilities and was one main reason for US not joining any of the two international nuclear damages liability regimes. Though it does allow economic liability enforcement through lawsuits and criminal proceedings against the reactor makers. International regimes were crafted by the suppliers nations under competitive claims of superior safety standards as a platform to outbid each other in this highly regulated business. Hence the terms of conditions in Vienna and Paris Convention put a high bar on safety in reactor business. Surprisingly the Indian bill seems to be designed keeping in mind India as a supplier of nuclear power technology rather than a receiver as it is today and also may be as a prelude to joining some international safety convention in future. As a receiver it is likely to become a ginny pig to test low end and low cost safety technologies. As a supplier the benefits may be in distant future when it will get a piggy ride on global giants like, Areva, Toshiba, GE to get a slice of lucrative emerging global nuclear business .
By making it easier for foreign firms to do nuclear power business in India than in their home countries, the bill gives an unmistakable signal on lowering safety standards for lure of cheap power. The message may be: if you find it tough to test your hazardous innovations at home under a vibrant consumer-protected environment, as has been the case in home turfs of leading nuclear suppliers, do it here with little or no fear for consequences. As our lives are not as precious as yours. Coming from a country that has seen history’s worst industrial disaster, the Bhopal gas catastrophe, the bill clearly conveys our inability to learn from past mistakes.
The more appropriate and balanced approach would be to peg the bar not at the minimum of international standards but fairly higher up to be in a position to influence nuclear safety issues at a global scale in future. There is no denying that safety technologies today are far advanced than in 60s when the current global standards were laid, yet the very nature of nuclear power calls for near perfect safety standards and can’t be compared with conventional power generating methods in an actuarial mode. Any lack of indication to suppliers to the potentially serious costs of laxity and pursuing profits at the cost of safety will seriously endanger the growth of nuclear power.
The common features of amended Vienna and Paris protocols which served as the template for the bill have been adopted in their minimalist forms. It continues to securely hide the suppliers behind the operators who will invariably be domestic companies i.e the public sector NPCIL in India’s case , and thrust on him the absolute liability. So are the other contentious issues related to time limitation of 10 years and court jurisdiction.
The necessity of raising legal infrastructure for high-technology industry like civil nuclear power is hardly denied. Yet government conveys an impression of being in hurry and pilots a bill with little thought on long-term consequences. Thus by inevitably inviting charges of pandering to Washington, it helps little his own case as was also seen in a similar legislation Foreign Trade Act up for amendment before the parliament.