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A losing proposition

On the last day of the budget session of Parliament, the government hurriedly introduced the Civil Nuclear Liability Bill amid largescale protests by the Opposition, writes Sitaram Yechury.

india Updated: May 10, 2010 23:19 IST
Sitaram Yechury

On the last day of the budget session of Parliament, the government hurriedly introduced the Civil Nuclear Liability Bill amid largescale protests by the Opposition. The Left had opposed the introduction of the Bill itself on the grounds of violation of Article 21 of the Constitution, which guarantees protection of life and personal liberty. Former Attorney General Soli Sorabjee says, “In view of Supreme Court judgements which are part of Indian jurisprudence and whose thrust is for the protection of victims of accidents as part of their fundamental rights under Article 21 of the Constitution there is no warrant or justification for capping nuclear liability.”

However, it is precisely such a cap that the Civil Nuclear Liability Bill introduces.

The proposed Bill has sought to limit all liability arising out of a nuclear accident to only 300 million Special Drawing Rights (about $450 million) and the liability of the operator only to Rs 300 crore. The difference between $450 million and Rs 300 crore (about $67 million) is the government’s liability. Given that a serious accident can cause damage in billions, the small cap of $450 million that’s been proposed shows the scant regard the the UPA has for the people.

The Bhopal Settlement of $470 million reached between the government of India and Union Carbide and accepted by the Supreme Court, has been shown to be a gross underestimation. Even today, gas victims are suffering and have received only meagre compensation. It is unconscionable of the UPA government to suggest that all nuclear accidents, which have the potential of being much larger than Bhopal, be capped at a figure that has already been shown to be a gross underestimate. Since the government wants to allow private operators in the nuclear power sector, this low level for compensation is meant to serve their interests too. Apart from this, the minuscule liability of Rs 300 crore for the actual operator is tantamount to encouraging the operator to play with plant safety.

The Indian legal regime is quite clear: for hazardous industries, the plant owners have strict liability. Neither does the law accept any limits to liability — the party concerned must not only pay full compensation but also the cost of any environmental damage that any accident may cause. The Oleum leak from Sriram Food and Fertility settled the liability regime in India and any legislation seeking to cap liability will be completely retrogressive.

Contrary to the claims being made, the Vienna Convention — the basis of the proposed Nuclear Liability Bill — does not cap nuclear liability but only puts a minimum floor. It also allows countries to operate their liability regimes. For example, Germany, Japan and Finland all have unlimited liability, the same as current Indian law. The US has a liability cap of $10.2 billion. Not only is the Indian government proposing to cap liability of nuclear plants, but it is also proposing a cap of only $450 million, way below the consequences of any serious nuclear accident. It appears that in order to promote private nuclear power and foreign suppliers, the UPA government is willing to sacrifice its own people.

The suppliers’ liability is also being considerably weakened by the proposed Bill. Instead of the normal contract law, where recourse of the operator to claim damages is inherent, the Bill limits this recourse only if it is explicitly mentioned in the contract. Otherwise, the nuclear operator cannot claim compensation from the supplier of equipment even if it is shown to be faulty. It is evident that contracts for buying US nuclear reactors will explicitly exclude any liability on the part of the suppliers and, therefore, by the law to be adopted, they will go scot-free even if an accident occurs due to a defect in the equipment supplied by a US company.

In fact the UPA-II government wanted such a legislation, which the prime minister could carry with him to the Nuclear Security Summit that President Obama convened in Washington in April. However, following the controversial passage of the Women’s Reservation Bill in the Rajya Sabha with the help of marshals, the crucial support of 47 Lok Sabha MPs belonging to the BSP, SP and RJD was not forthcoming. This obstacle, however, appears to have been overcome now through possibly some ‘bargain’ similar to what happened at the time of the passage of the Indo-US nuclear deal.

The US is insisting that this law be enacted to protect US suppliers of nuclear equipment from liability to pay compensation in the case of a nuclear accident. Currently, only the State-run Nuclear Power Corporation of India Ltd. under the existing Atomic Energy Act can operate nuclear power plants. But with the opening up of international nuclear commerce, US companies have sought a civil nuclear liability framework to be put in place before they enter. The US government has linked the completion of the Indo-US nuclear agreement to India’s capping of nuclear liability. The UPA-I government, prior to the ratification of the 123 Agreement, had given a written commitment that India will buy nuclear reactors from the US totalling 10,000 megawatt of capacity.

This Bill has now been referred to the parliamentary standing committee for its consideration. It will now be tabled in the monsoon session. It is imperative for all political parties to ensure that the government is not allowed to disregard the life and safety of the Indian people through such a legislation. Article 21 of the Constitution and the various judgements of the Supreme Court cannot be allowed to be violated.

Sitaram Yechury is CPI(M) Politburo member and Rajya Sabha MP
The views expressed by the author are personal