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Submission on Liability from Damage Bill 2010 to Parliamentary Standing Committee

Written By Gopal Krishna on Wednesday, July 07, 2010 | 4:36 AM


Dr. T. Subbarami Reddy,

The Chairman,


Members of

Parliamentary Standing Committee on Science & Technology, Environment & Forests,

New Delhi

Sub: Submission on 'Liability for Damage Bill 2010'

Ref.: Public Notification dated June 24 2010 (Re.: )

Dear Dr. Reddy and Members of the Committee,

With reference to your public notification inviting comments from the members of the general public, the following submission is made.

I submit that the move to introduce the Nuclear Liability Bill is a pre-condition for the entry of US companies in the Indian civil nuclear sector.

I am alarmed at the swiftness with which the Bill is being introduced to facilitate the entry of US nuclear power companies into India.

I submit that one of the biggest myths being propagated is that nuclear cooperation with the US is the answer to India's energy crisis, which in any case would not see the light of the day before 2016.

I wish to state that Indian Parliament and citizens have been kept in the dark about the cost of electricity from foreign-built nuclear power reactors.

Unmindful of the fact that all the countries that produce nuclear energy are facing a crisis in the management of nuclear wastes, India is taking the same route, that too with a plan of 25k megawatt by 2020.

I wish to draw your attention to an interview conducted by EG Weymouth, editor-at-Large of Newsweek, on November 16, 2009, wherein Prime Minister Manmohan Singh said: 'We had a watershed and a landmark agreement with the United States on nuclear cooperation. We would like to operationalise it and ensure that the objectives for the nuclear deal are realised in full merit. My sincere hope is that we can persuade the US administration to be more liberal when it comes to transfer of dual-use technologies to us. Now that we are strategic partners these restrictions make no sense. India has an impeccable record of not participating in any proliferation of weapons of mass destruction. So, that is my number one concern.'

This was in reference to the consent agreement that the US President would have to sign and send to the US Congress. Responding to the question about the need for Indian Parliament to pass a liability agreement in the matter of nuclear cooperation with US, the prime minister said: 'We will do that. Our Cabinet will be taking a decision. I do not see any difficulties in honouring our commitments.'

Notably, when the prime minister was asked about the specific role of the Indian Parliament, he appears to have highlighted the Union Cabinet.

On October 1, 2008, the Nuclear Cooperation Approval and Non-Proliferation Enhancement Act came into effect after the US Senate passed it. While the role of the US legislature is quite manifest, the Indian Parliament has not been allowed any role to play, not even to examine the deal's provisions, and now wants the Indian legislature to pass a special law to provide foreign companies with liability protection in case of nuclear accidents.

This is being done because US nuclear companies, which are in the private sector, are demanding it. As you are aware so far in India, our nuclear companies, quite like the French and Russians, are State-owned.

I submit that The Liability for Nuclear Damages Bill is an exercise to provide State subsidy to foreign-nuclear reactor builders from the onus of the financial consequences of nuclear disasters, accidents and incidents by shifting the onus for accident liability from the foreign builders to the Indian State and citizens.

The Bill does not provide any evidence that it has taken lessons from The Three Mile Island nuclear plant in Pennsylvania led to 14 years of clean-up costing $1 billion.

The US interests are seeking to avoid open market competition by their companies. Although the US assumes liability for any nuclear catastrophic damages from an accident only above the $10.5 billion figure that is inflation-adjusted every five years and thus variable, which itself is quite low, through its machinations it denies India even that relief which it provides to its own companies.

I submit that the Bill must be revisited in the light of the international nuclear accidents the world over.

I wish to draw your considered attention towards what Peter Mason, president and chief executive of nuclear supplier GE-Hitachi Nuclear Energy Canada while explaining to the Parliamentary Standing Committee of the Canadian House of Commons on Natural Resources that is dealing with Bill C-20, their Nuclear Liability and Compensation Act, November 2009. He said, "If there was not a cap and if there was no suitable legislation insurance in place, then we wouldn't be in the nuclear industry".

The Liability for Nuclear Damage Bill, 2009 is ridden with glaring loopholes and booby traps because it insulates nuclear energy companies from punitive legal consequences.

The Bill seems to pretend the non-existence of the report of the US President's Commission on The Accident at Three Mile Island that happened in 1979.

I submit that to begin with it should be renamed as Liability from Nuclear Damage Bill and it must explicitly inform Parliament and the citizens what all lessons from that report has been incorporated in the Bill.

Mere civil liability is totally unacceptable because clearly it has not factored in all the nuclear accidents which have happened in India and the world. Most importantly, before a Bill of this nature is brought in, the central government must come out with a white paper on the status of relief to radioactive radiation victims and the liability therein with regard to existing facilities. The Bill must include mining sites of radioactive minerals like uranium in its definition of nuclear facility.
The Union Cabinet cleared the text of the Civil Liability for Nuclear Damage Bill on November 19, 2009 for introduction in Parliament. The passage of the Nuclear Liability Bill will allow India to join the international convention on civil liability for nuclear damage.

While placing a cap on the compensation to be paid in the case of an accident at a nuclear site, the proposed legislation puts the responsibility for paying this compensation on the operator and not the suppliers or foreign companies installing the reactors in India, as has been demanded by the multinational corporations like Union Carbide Company and Dow Chemicals Company. This provision is not in the public interest.

Nuclear power companies in general and US nuclear companies like GE Hitachi Nuclear Energy, Westinghouse and Babcock & Wilcox intend to invest in India if and only they are provided anticipatory bail for their legal liability for nuclear accidents in future.

US Assistant Secretary of State for South and Central Asian Affairs Robert Blake informed a US House committee: "We are hoping to see action on nuclear liability legislation that would reduce liability for American companies and allow them to invest in India".

The US nuclear industry is addicted to special laws made by the US government that limits their liability from nuclear radiation accidents. It wishes to operate under the law, which has been shaped by it. It has been noted that US companies who are part of the US commercial nuclear mission to India organised jointly by the Nuclear Energy Institute and the US India Business Council informed the media that they are satisfied over the nature of the Bill and are in active discussion with the Nuclear Power Corporation, Tata Power, GMR, Jindal, NTPC, L&T to explore business potential.

Clearly, the US nuclear companies has seen the Bill (may have drafted it as well) as was reported by financial newspapers, even before it was tabled in our Parliament.

Notably, the Federation of Indian Chambers of Commerce and Industry's 25 member working group on civil nuclear energy-2009 under the Chairmanship of Dr SK Jain, CMD, Nuclear Power Corporation of India Limited came out with a 57-page report with the format of the proposed Civil Liability for Nuclear Damage Bill, 2009. The Bill is based on this report.

The FICCI report has an annexure that is about "Domestic Legislation Dealing with CNL" (Civil Nuclear Liability) wherein it states, "As a natural corollary to the liberalisation of the nuclear sector in India, the government of India is mooting the idea of a CNL Bill. Aligning to any international CNL treaty would involve the enactment of a domestic CNL legislation with appropriate provisions. There being no explicit statute or legislation in India, either creating or limiting liability of persons engaged in nuclear installations till now, liability would stand determined by courts, pursuant to actions in tort."

FICCI's working group on nuclear energy suggests that the directions and observations of the Supreme Court in Charan Lal Sahu's case (in the matter of Bhopal's industrial catastrophe) should serve as the object and purpose for enacting such CNL legislation. This entails the basis for damages in case of leakages and accident should be statutorily fixed taking into consideration the nature of damages inflicted, the consequences thereof and the ability and capacity of the parties to pay.

A law should be enacted to ensure immediate relief to victims -- viz, by providing for the constitution of tribunals regulated by special procedure for determining compensation to victims of industrial disasters or accident. The law should also provide for interim relief to victims during the pendency of proceedings. The law should provide for the establishment of a statutory Industrial Disaster Fund, contributions to which may be made by the government and industries, whether they are of transnational corporations or domestic undertakings, public or private. The Public Liability Insurance Act has been constituted pursuant to this, but it excludes damage from 'accidents caused by radioactivity'.

In the United States, liability for nuclear accidents is set at $10 billion (US), while in Japan [ Images ] the cap will be doubled next year to roughly $1.47 billion (Canadian). Whether a nuclear accident is a $650 million event or a multi-billion dollar catastrophe is determined by the direction and speed of the wind that carries the radioactive radiation.

Currently, Canada is seized with a Nuclear Liability and Compensation Act wherein the bill raises the cap on liability to $650 million from the $75 million limit established in 1976. The damage from Chernobyl is estimated at some $250 billion. In Germany, there is no cap on nuclear liability but an operator must be able to cover at least $4 billion but the civil liability is estimated at Euro 2000-5000 billion.

The international conventions, which provide for the liability regime, also favour the industry and not the possible victims and provides for indemnity to the global nuclear industry: the Paris Convention (1960), the Vienna [ Images ] Convention (VC) revised in 1997 and the Convention on Supplementary Compensation for Nuclear Damage (CSC).

One of the worrying things of the new bill is that liability is likely to shift from manufacturer to operator.

FICCI's suggestions for 'Domestic legislation dealing with CNL' may incorporate the following: Single point liability for the operator of the nuclear installation ('Operator'); Liability of non-operators transferred to the operator; Exceptions to liability to include standard force-major provisions with specific emphasis on terrorist and anti-social activities; Capping of liabilities according to internationally adhered benchmarks may be adopted with the government prescribing the threshold limit; Prescribed liability for the plant must be benchmarked to the risk-magnitude of the installation.

It is now well known that 'hazardous corporations' are a fit case for the application of the principle of Absolute Liability and multinational enterprise liability because they are neither 'restricted by national boundaries' nor effectively controlled by international law' because of their complex corporate structure with 'networks of subsidiaries and decisions which make it 'exceedingly difficult or even impossible to pinpoint responsibility for the damage caused by the enterprise'. They operate through a neatly designed network of interlocking directors', a 'common operating system', global distribution and marketing systems', design development and technology worldwide, financial and other controls and highly sophisticated and technologically capable machines and working staff.

Consequently, victims of such daily actions are unable to identify which unit of the enterprise caused the harm. Therefore, faults by even a local subsidiary must be attributed to the parent company because their duty too is non-delegable.

Notably, the Supreme Court also held that the Act only deals with civil liability and as such does not curtail or affect rights in respect of criminal liability. The Civil Liability from Nuclear Damages Bill must be redrafted to include both criminal liabilities and deterrent civil liabilities.

Defence Research and Development Canada, Canadian Department of Defence has suggested that a severe nuclear accident results in wide contamination. The research looked at the impact of a relatively small dirty bomb going off in downtown Toronto. It estimated that cleaning up the contamination using the most stringent standards could cost up to $250 billion, and that the economic toll could reach $23.5 billion. The research was commissioned in 2007. No such research has been commissioned in India. I submit that the Committee should recommend such study.

The institutional accountability for Bhopal and Kaiga like disasters rests with Cabinet Committee on Economic Affairs and the Civil Liability from Nuclear Damages Bill shows that it has not learnt any lessons because it has not been made accountable for its past lapses.

Private companies who want to do business with India have been seeking a liability law that protects their nuclear energy business at any cost. Foreign companies wanting to supply nuclear reactors and other equipment have been pressing India for the speedy passage of this crucial Bill. The Indian government is required to make some changes in its Atomic Energy Act as well.

I submit that the Committee should study the report of the investigative commission appointed by US President Jimmy Carter immediately following the nuclear accident and take lessons from it for recommendations to the government. US President Jimmy Carter had appointed a 12-member commission which submitted its Report of the President's Commission on The Accident at Three Mile Island -- The Need for Change: The Legacy of TMI in October 1979. It is advisable to learn from the blunders of the past.

Indian 'Nuclear Liability Bill' must take note of the environmental hazards from the nuclear facilities and potential nuclear accidents and incorporate stringent criminal and civil liability provisions taking lessons from worst accident at a civilian nuclear power plant in Three Mile Island occurred on March 28, 1979 in US and the Chernobyl disaster, a nuclear reactor accident that occurred on April 26, 1986, at the Chernobyl Nuclear Power Plant in Ukraine. This nuclear accident led to the cessation of new nuclear plant construction in the US.

Before passing the bill an independent and credible multi-disciplinary commission and a joint parliamentary committee should be constituted with immediate effect to ascertain the potential consequences of nuclear accidents or 'incidents' and the liability arising out of it.

I submit that the Bill should be amended to include an explicit provision that says there would be no operator liability cap. It should be revisited in the light of compensation regime post BP oil spill disaster in Gulf of Mexico with the wherein first installement has been put at $20 billion (about Rs. 92,000 crores).

I submit that the Parliament should consider the much higher limits than the United States has set for itself keeping in mind the possibility that the actual damages could be far greater than the U.S. liability limit.

I have come across a reference of a 1997 study by the U.S. government's own Brookhaven National Laboratory, on Long Island, New York, found that the severe spent fuel pool accidents could result in damages from somewhat under $1 billion of up to $566 billion, depending on a how full and hot the pool is at the time of the accident and the intensity of the postulated fire. The high-end figure would amount to over $700 billion in 2009 dollars. Vast amounts of land — up to about 7,000 square kilometres in the worst case — would have to be condemned. Large numbers of people would have to be evacuated. Further, the maximum estimated monetary damages do not take into account some critical elements. For instance, the Brookhaven amount does not include excess cancer deaths, estimated to range from 1,500 to more than 100,000. Worst case nuclear reactor accident cancers and condemned area were estimated to be generally comparable to the upper end of the spent fuel accident estimates. ( R.J. Travis, R.E. Davis, E.J. Grove, M.A. Azarm, A Safety and Regulatory Assessment of Generic BWR and PWR Permanently Shutdown Nuclear Power Plants, Brookhaven National Laboratory, 1997 (NUREG/CR-6451). See Tables 4.1, 4.2, and 4.3.)

The Parliament must consider the inevitability of a severe nuclear power plant disaster and legal remedy must be provided considering the worst case scenario. The June 7, 2010 verdict by the Bhopal's Chief Judicial Magistrate's Court sets a precedent for the worst of corporate crimes -- and even nuclear disasters too -- to be treated like a traffic accident. Bhopal’s verdict was constrained because of the order of Justice Ahmadi Bench of the Supreme Court dated September 13, 1996, in which the charges against Indian officials of Union Carbide India Limited (the subsidiary majority owned by Union Carbide Corporation) were diluted. Since February 2001, the culpability lies with the Dow Chemical Company, which took over Union Carbide Corporation USA. The Parliament must make corporations in general and nuclear corporations in particular subservient to its legislative will else if laws become the artifacts of the corporations supreme legislative body is turned into a rubber stamp.

I submit the following specific suggestions:

1. Atomic Energy Regulatory Board should be reconstituted to ensure that its function is indeed of a regulator with sufficient teeth and not a promoter of nuclear commerce at any cost.

2. Liability to “operator”. (Chapter II, Cl. 4 (1))

This provision reminds one of how Corporation was defined as "An ingenious device for obtaining individual profit without individual responsibility” by Ambrose Bierce (1842– 1914), the author of The Devil's Dictionary.

The government of India's original position in the Bhopal case that "the corporation and its subsidiaries are treated as a unit, without regard to the location of responsibility within that unit". Consequently, an illegal act by it be deemed as the act of the corporation, without consideration to its location of responsibility. The customary alibi of corporations is an act in sophistry designed to conceal fact of their crime.

3. Factories Act should be suitably amended to deal with industrial disasters like the one from nuclear installations. Such disasters provide a compelling logic for a legal regime to pierce the corporate veils created through provisions such as act of subsidiary and liability of operator alone.

In 1987, after Union Carbide insincerely argued in court that it had given a flawlessly designed plant which was operated negligently, the government of India amended the Factories Act 1948. A new chapter was added with the “provisions relating to hazardous processes”. Section 7 B, sub-section (5) absolved the person (who) designs, manufactures, imports, or supplies” plant and machines from the responsibility for the effect that the plant and machines has on risk and safety, provided the user gives an assurance “to take steps specified in such undertaking to ensure, so far as is reasonably practicable, that the (plant and machinery) will be safe and without risks to the health of workers when properly used, the elimination or minimisation of any risks to the health or safety of the workers to which the design or article may give rise.”

This demonstrates how, even after the Bhopal experience, corporations succeeded in getting a law enacted that provided them with a convenient loophole in case of negligence.
The Committee should look at the "Atomic Economics" as enunciated by Bush administration's blueprint for nuclear power policy and whether or not it suits India's supreme public interest. The Bus administration's "Nuclear 2010" program was an effort to subsidize the development of new nuclear power plants by the end of the decade. The atomic component of the Bush-Cheney energy agenda led to the US administration's request for $38.5 million for the 2010 program in its fiscal 2003 Energy Department budget. This funding request was cleared by House and Senate committees with ease apparently because this nuclear energy program is a public policy by and, for corporations. The program was based on a report by the Near Term Deployment Group (NTDG), a panel co-chaired by executives from nuclear powerhouses Duke Energy and Southern Nuclear Operating Co. Of the panel's 13 members, at least 10 are either directly employed by the nuclear industry or have consulted for it.

It is noteworthy that although it was prepared by corporate executives and their advocates, the NTDG's report-titled "A Roadmap To Deploy New Nuclear Power Plants in the United States by 2010"-is candid about the numerous economic reasons why new nuclear power plants should not be built. Summing up the sanity of new plant construction, the Bush administration's blueprint stated that "economic viability for a nuclear plant is difficult to demonstrate."

The panel had estimated that new plants could cost as much as a staggering $2,128 per kilowatt of electricity generated. Natural gas fired plants, by comparison, are likely to top out under the most expensive scenarios at $682 per kilowatt. Even the NTDG's lowest estimate comes in at $1,000 per kilowatt of generating capacity- 46 percent higher than the highest estimate to build a gas-fired plant. Using a more realistic cost of gas-fired plant construction of about $500 per kilowatt-a cost for which, unlike nuclear power, there is a track record in the real world-a nuclear plant project built under optimum circumstances would still cost twice as much as building a gas-fired plant.

Investors too are wary because nuclear power plants take a long time to build; and by the time they actually start generating electricity, more power may be available on the market, rendering >. the new plants even more of an economic white elephant.

The Committee should take note of NTDG suggestions but reach reach its own conclusions Of eight designs for new nuclear reactors identified as "near term candidates" in the 2010 report, the pebble bed modular reactor "is the only one for which there is currently a potential customer actively involved and investing in the plant's development."

The committee should examine the corporate crimes of nuclear corporations like Exelon, the mother of all nuclear power corporation which had walked away from a pebble-bed demonstration project in South Africa where it is reported to be proposing to build a nuclear reactor without a containment dome which was deemed ludicrous and the US Nuclear Regulatory Commission analyzed the technology in anticipation of a design application.

The NTDG had analyzed economic competitiveness of several large-scale reactor designs, including the Westinghouse AP-600 and AP-1000. Those reactors now appear to be the most likely candidates in the Nuclear 2010 initiative. But Westinghouse estimates that an AP-1000, the cheaper of the two thanks to economy of scale, would cost $1,657 per kilowatt of electricity generating capacity-more than three times the going rate for gas-fired plants. The NTDG doesn't think that the market price of electricity will cover the costs of such an expensive project.

It is feared that Indian consumers would be forced to buy power from the new nuclear plant, even if other, lower-cost options are available. Such purchase power agreements could be foisted on hapless consumers by state or regional regulators. But even then the new plants would need millions in taxpayer subsidies.

It is submitted that as has been the case in general the citizens and the legislatures have been taken for granted in the matter of the permitting and approval process to avoid pesky questions about safety, security or other issues get raised.

It is contended that the proponents of the nuclear power plants are putting profit ahead of public safety. The Nuclear 2010 blueprint prepared by the NTDG attempted to rationalize the economics of nuclear power plants by asserting repeatedly that, despite the frightening economics of nuclear plant construction, the projects will be competitive over the long term. The committee should get seek more to time and constitute its own experts team to examine the economic track record of nuclear power plants is characterized chiefly by cost overruns, unexpectedly high operation and maintenance costs, expensive unscheduled shutdowns, and an overall failure to perform competitively.

As recently as 1999, the US Nuclear Regulatory Commission was predicting early retirement for nuclear plants because the plants couldn't compete economically.It must be noted that nuclear companies have themselves gone to great lengths to convince regulators in state after state that nuclear power plants could not compete with other energy sources in a deregulated electricity environment.The corporations were fighting to ensure that as states deregulated their markets, electricity consumers-not nuclear power corporations-would get stuck with the lingering debt on nuclear plants. Such "stranded costs" are estimated to have cost consumers tens of billions of dollars nationwide, including $28 billion in California alone as per a 2002 report. The Committee should study these reports before reaching its conclusions.

The committee should consider recommending protecting consumers by making sure that no public money and government handouts reaches the nuclear industry.

I humbly submit that in the light of the might of nuclear corporations, which pose a challenge to the authority of the government and the parliament to a trial of strength and to bid defiance to the laws of the country, the Parliamentary Standing Committee on Science & Technology, Environment & Forests has been provided a historic opportunity to take step to factor in US President Eisenhower’s farewell speech, wherein he made an appeal to "guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."

Yours faithfully

Gopal Krishna
ToxicsWatch Alliance
New Delhi
Mb: 9818089660
Blog: toxicswatch.blogspot.com

Members of Parliamentary Standing Committee on Science & Technology, Environment & Forests

Dr. Ejaz Ali Member
Shri Jabir Husain Member
Dr. Barun Mukherjee Member
Shri Saman Pathak Member
Shri Anil H. Lad Member
Shri S.S. Ahluwalia Member
Shri Ramachandra Khuntia Member
Shri Rajiv Pratap Rudy Member
Prof. Ram Gopal Yadav Member
Shri K.C. Singh Baba Member
Shri Balkrishna Khanderao Balu Shukla Member
Dr. Mirza Mehboob Beg Member
Shri Ninong Ering Member
Kaisar Jahan Member
Shri Jayaram Pangi Member
Shri S.S. Ramasubbu Member
Shri Arjun Ram Meghwal Member
Shri Francisco Sardinha Member
Shri Mansukhbhai D. Vasava Member
Shri Akhilesh Yadav Member
Prof. Ranjan Prasad Yadav Member
Shri A. Ganeshamurthi Member
Dr. Charan Das Mahant Member
Shri Gajendra Singh Rajukhedi Member
Dr. Rajan Sushant Member
Shri Pradeep Tamta Member
Shri Bibhu Prasad Tarai Member
Shri Udyanraje Bhonsle Member
Shri D.V. Sadananda Gowda Member
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