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No sweetheart deal this

The growth of the nuclear industry cannot come at the cost of millions of lives, write M.V. Ramana and Suvrat Raju.

india Updated: Aug 26, 2010 00:44 IST
M.V. Ramana and Suvrat Raju

A few months ago, Toyota was forced to recall millions of cars when problems with runaway acceleration led to a number of accidents. If the automobile industry had been governed by a law like the Civil Nuclear Liability Bill, all liability for these accidents would have been channelled away from Toyota — the manufacturer — and to the drivers operating these cars.

Since this is evidently unfair, the parliamentary opposition would like the bill to include a 'right of recourse' that allows the operator of a nuclear plant to sue its supplier for accidents that result from a design failure. This is a far cry from full-fledged 'joint and several' liability between the operator and the supplier: the supplier is accountable only to the operator and not to the victims. Since the operator is likely to be the government, this could easily lead to a repeat of the Bhopal case, where the government first arrogated to itself the right to represent all victims and then let Union Carbide off the hook.

However, the government argues that even this limited provision is unnecessary because the bill merely establishes an 'ex gratia' payment while both the operator and supplier remain accountable under existing tort laws. The eminent lawyer, Prashant Bhushan, assessed this claim by saying, "For the government to argue that the liability capped by the Act is in addition to the normal law of torts is not only disingenuous but dishonest. No lawyer who knows any law whatsoever will make such a statement." In fact a moment's reflection brings out the absurdity of the government's position. Nuclear manufacturers have spent considerable effort in lobbying for this bill. If they are to gain nothing, and will remain vulnerable under ordinary laws, is one to believe that this lobbying effort was driven purely by the largeness of their hearts? The natural conclusion is that, without a right of recourse, the supplier will not be liable even for accidents that occur due to a design defect.

Second, the proponents of the bill argue that there will be hundreds of suppliers for the myriad parts of a nuclear plant. However, a nuclear plant is not like a home-assembled computer where one purchases a medley of components from the neighbourhood hardware store and puts them together; it involves a well-defined designer and manufacturer. Before a plant is constructed, the designer — invariably a large company like GE or Westinghouse — draws up a detailed design blueprint and then proceeds, perhaps in collaboration with another large company, to construct a plant that meets regulatory standards. For example, Areva, which is planning to construct a nuclear complex in Jaitapur (Maharashtra), has set up a consortium with Siemens to build a plant with the same design in Olkiluoto (Finland) on a 'turnkey' basis. This means that the consortium will construct the entire plant and then merely hand over the keys to the operator. It's only fair that such a plant vendor should accept some responsibility for a potential accident.

The final argument for the the bill is that it is necessary to foster the growth of nuclear power: suppliers will refuse to participate in the industry without indemnity and a higher liability for operators would drive insurance costs too high. This is dangerously similar to the argument that was used to strike a "sweetheart deal" with Enron in the 90s. Moreover, suppliers constantly need to balance costs with safety, and indemnifying them will make them pay less attention to safety regulations. So the bill not only forces ordinary people to accept that they will not be compensated beyond the cap on liability, it puts their lives at risk. Is this an acceptable price to pay for promoting the nuclear industry?

M.V. Ramana and Suvrat Raju are physicists at Princeton University and the Harish Chandra Research Institute, Allahabad, respectively.

The views expressed by the author are personal.