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Nuclear Liability Bill needs scrutiny

Written By mediavigil on Friday, February 26, 2010 | 4:46 AM

Nuclear Liability Bill needs scrutiny
February 25, 2010 03:50 IST
Tags: CNL, US India Business Council, Federation of Indian Chambers of Commerce and Industry, Indian Parliament, Bill

Of all the 36 bills listed for introduction in the ongoing session of Parliament, the move to introduce the Nuclear Liability Bill, a pre-condition for the entry of American companies in the Indian civil nuclear sector, is the most significant.

Civil society groups and Opposition parties are alarmed at the swiftness with which the Bill is being introduced to facilitate the entry of US nuclear power companies into India.
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. Also 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.

In an interview conducted by EG Weymouth, editor-at-Large of Newsweek, on November 16, 2009, 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 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. So far in India, our nuclear companies, quite like the French and Russians, are State-owned.

The proposed Civil Liability for Nuclear Damages Bill, proposed to be introduced in the current Parliament session, 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 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.

The Bill must be revisited in the light of the international nuclear accidents the world over, before it is even tabled in Parliament.

"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," said 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.

The Congress-led United Progressive Alliance government's proposed Civil 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. 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. So far, this nuclear Bill is not in the public domain.

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 have seen the Bill (may have drafted it as well), which has not even been 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 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 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 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 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.

The CSC limits the compensation payable by the operators of nuclear plants for any accidents or damage to $450 million, leaving the responsibility for the rest to national governments almost in the range of compensation paid to the victims of the Bhopal industrial disaster ($470 million) wherein victims were turned from citizens into subjects of the ruling regime.

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.

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.

In such a context, the drafters of Green Tribunal Bill and the Civil Nuclear Liability Bill must study the report of the investigative commission appointed by US President Jimmy Carter immediately following the accident. 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 should be constituted with immediate effect to ascertain the potential consequences of nuclear accidents or 'incidents' and the liability arising out of it.

Gopal Krishna

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PM seeks Opp help on N-liability bill

Wednesday, 03 March 2010 02:46

New Delhi, March 2: The government is set to table the Civil Liability for Nuclear Damage Bill 2009, commonly referred to as the nuclear liability bill, in the Budget Session of Parliament.

Prime Minister Manmohan Singh has sought the BJP’s help in ensuring passage of the nuclear liability bill that was cleared by the Cabinet last November, especially since the ruling coalition is short of numbers in the Rajya Sabha.
Leader of the Opposition in the Rajya Sabha Arun Jaitley refused to elaborate on what the Bharatiya Janata Party’s stand on this bill was going to be insisting they were keeping their strategy on this all-important bill, which will allow American companies to gain entry in the nuclear sector, close to their chest. “We are not going public on what our stand on this bill is,” said an emphatic Jaitley.

CPI(M) politburo member and Rajya Sabha MP Sitaram Yechury has also expressed discomfort with the bill in its present form. Mr Yechury pointed out that “the compensation ceiling being provided in the bill is exceedingly low. Besides, the liability rests with the operator. We believe that the nuclear liability bill should be referred to the standing committee of Parliament,” he said in the course of a telephonic interview from Kathmandu.

The cap set for the liability on the nuclear plant operator is of Rs 300 crores in the eventuality of an accident. The onus for paying damages will be on the operator and not the supplier or builder of a facility — an important clause that allows US firms to seek insurance cover at home.

The bill will allow for the setting up of a claims commissioner with powers of a civil court to arbitrate the cases. But the bill highlights that in case of a “grave national disaster” or an act of terrorism, then the operator would not be liable to pay damages.

If the government decides that compensation could be more than Rs 300 crores for a “nuclear incident”, a Nuclear Damage Claims Commission could be constituted.

American companies GE-Hitachi and Westinghouse are still waiting in the wings to set up nuclear complexes even as the Indian government has announced two sites in Gujarat and Andhra Pradesh to build 10,000-MW nuclear complexes.

Rashme Sehgal

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