Tentacles of the Nuclear Deal: Civil Nuclear liability and India

Posted in United States , India , Energy Security | 15-Feb-10 | Author: Yogesh Joshi

The Indo-U.S. nuclear deal has opened up the otherwise closed doors of sensitive nuclear trade for the country. India is expected to increase its share of nuclear energy from a mere 4000 Megawatt (MW) today to more than 30,000 MW by 2030. This will mean more than $ 300 billion worth of capital investment which is in fact enormous. However, just before President Bush signed the deal into law, India submitted a letter of intent promising U.S. to buy more than 10,000 MW of this supposed energy capability from the US nuclear industry. This is precisely the trade off which has created the pressure for India to enact a Civil Nuclear Liability Bill ( CNLB) allowing the private enterprises such as Westinghouse and General Electric to establish and may be in future operate nuclear power plants (NPP) in the country.

In her visit to India last year, Secretary of State Hillary Clinton made this point absolutely clear. Evidence can also be gauged from the regular briefs issued by business lobbies such as US-India Business Coucil. The Federation of Indian Chambers of Commerce and Industry ( FICCI) has even accepted the enactment of such a law and submitted a report to the Indian government to this effect. Even the rights on reprocessing of spent fuel of US origin, which the diplomats from both the sides are negotiating in Vienna, are often linked with the creation of CNLB.

A CNLB is a must if US nuclear industry has to make inroads into the Indian nuclear market. There are number of reasons for such a claim. First, Nuclear energy production is an ultra-hazardous activity. The negative externalities produced by NPP are both acute as well as unquantifiable. Sellafield nuclear leak in Britain, the Three Mile Island incident in U.S, the Chernobyl reactor meltdown in erstwhile USSR and the Tokaimura nuclear fire in Japan are all indicative of this aspect of nuclear energy production. Therefore the liability accruing from any kind of nuclear accident can run into billions of dollars depending upon its severity. A CNLB will limit the liability of claims to be made against any damages accruing from a nuclear accident. Under the 1997 Convention on Supplementary Compensation this limit is reduced to $ 300 million. As far as the Indian government is concerned this limit has been fixed at $ 450 million.

Second, the CNLB will exonerate the suppliers of nuclear material against any claims in case of nuclear accident in a reactor where they have supplied the equipment and the burden of liability will completely be shouldered by the operator. This allows the US companies to walk free even when the fault would have been in the technology and apparatus provided by them. This greatly reduces the space for the victims to seek compensation from wider sources leading to a phenomenon called 'localization of costs and globalization of the profits'. This is because the costs of nuclear accidents will be born by the local people whereas the profits of nuclear trade will move to U.S. multinationals.

Third, the CLNB will also restrict the time limit of liability claims. As per the international law on nuclear liability, this time limit has been reduced to 10 years from the date of the incident. However, radiation effects are latent and may manifest themselves quite late in the life of a potential victim. Since the CLNB has to follow the international law, it is supposed to do the same. By arbitrarily reducing the time limit for seeking compensation, the CLNB will reduce the chances of successful claims being brought out against the nuclear operators. If US nuclear industry, in future, becomes operators of NPP in India, which they are surely planning for, this limitation will be an asset.

Fourth, as the US government argues, the CNLB will provide a level playing field to its nuclear industry vis-à-vis the French and the Russians. Both Areva and Rosatom, which are French and Russian nuclear companies respectively, are co-owned by their respective governments. So in case of a nuclear accident, they can be bailed by the intervention of the French or Russian governments. However, this will not be possible for Westinghouse and the General Electric. Hence, until and unless US nuclear industry finds itself secured from liability claims, it will rather not step in the Indian nuclear market.

The interests of the US and its nuclear industry in the CNLB are quite evident and are also obvious. However, the ghosts of Bhopal are still lingering in the minds of the ordinary Indians. The victims of Bhopal gas tragedy are still uncompensated and the fallouts of the disaster are still unfolding. A nuclear accident will be much more severe and disastrous. Therefore, it is highly important for the government to take into account our past experiences before tabling the CNLB, the draft of whom has already been made, in the parliament. There is also need for a wider debate in the public over the question of liability. The recent incidents in Kaiga where a number of personnel where exposed to radiations and the incident in BARC, Mumbai leading to death of two researchers should be the eye-openers.