Saturday, September 4, 2010

Liability Bill simplified

India joined the elite club of nuclear powers on 11th May 1998. Although they immediately brought many economic sanctions but in the long run these nuclear tests had a huge significance. The Indo – US civilian nuclear deal was certainly one of its memorable outputs. In Oct 2008, being a non-NPT country India successfully crossed all barriers to finalize the Indo-US Civilian Nuclear Agreement. It was a big win for our country in the world arena. The agreement was to facilitate civilian nuclear partnership between United States and India along with many other mutual benefits on the term that India will separate its civilian and military nuclear facilities and put civilian facilities under the International Atomic Energy Agency (IAEA) inspection. Soon other countries like Russia, France, Namibia, Canada and others joined the race and finalized similar deals with our country.

Presently the contribution of nuclear energy in the energy sector is around 4%. The civilian nuclear agreements with the above mentioned countries would certainly improve this dismal show. Also the Indian government has set a goal to reach the mark of 20,000 MW electricity produced using Nuclear power by 2020. These deals have definitely boosted the morals of our nuclear sector as almost 40 nuclear reactors will be installed in our country within a decade.

But to facilitate this nuclear commerce and attract U.S. private companies involved in nuclear commerce, it is necessary to pass the Civil Liability for Nuclear Damage Bill also known as Nuclear Liability Bill. Nuclear Liability Bill will thus define the financial and legal liabilities upon the involved groups i.e. manufacturers, operators and government in case a nuclear accident occurs. In this case, the suppliers and builders will be the U.S. private companies such as GE (General Electric) and Westinghouse and the operator will be the Indian government controlled Nuclear Power Corporation of India Limited (NPCIL). This Bill will also help India to accede to the Convention on Supplementary Compensation (CSC) for nuclear damage.

After storming the whole monsoon session, the Bill was finally passed by the Loksabha. There have been a lot of controversies regarding the actual and final form of the Nuclear Liability Bill. The Clause 17 of the actual text, surrounding which the whole controversy was mounted read like this:

The Operator of a nuclear installation shall have a right to recourse where –

a) Such right is expressly provided for in a contract in writing.

b) The nuclear accident has resulted from the willful act or gross negligence on the part of the supplier of the material, equipment or services, or of his employees.

c) The nuclear accident has resulted from the act of commission or omission of a person done with the intent to cause nuclear damage.

As seen in the Clause 17 (b) of the above text, it actually defines the liability of the supplier side in case of a nuclear mishap. Here the clause 17 (b) has clearly mentioned the “Right to Recourse” by Indian operators against the suppliers in case any nuclear accident occurs due to defective equipment or design failure. While all multinational suppliers including Russia and France would prefer to remove such a clause, it is the US that is most insistent on this issue because its companies (GE, Westinghouse) are not backed by public finances and hence run the risk of bankruptcy if they have to pay damages for a large scale nuclear accident.

Owing to the US pressure, the government totally removed Clause 17 (b) from the Bill in its second version. It meant, US suppliers were no more responsible for any nuclear mishap even in case of their negligence. It was like giving a blank cheque to the suppliers. Insulating the suppliers from all liabilities could encourage them to take greater risks and compromise with the quality of equipments to make huge profits. It could pose a grave threat to the safety of our countrymen. How could our government forget the horrors of the world’s deadliest industrial mishap, the 1984 Bhopal Gas tragedy? It killed almost one lakh people and contaminated almost every drop of water and every dust of soil so that the people of Bhopal could carry this burden forever. Till now, the affected peoples are hammering the doors of justice for help. Hopefully our government won’t like to repeat any such incident in near future.

Respecting the true meaning of democracy the opposition reacted sharply in the recently concluded monsoon session and vehemently condemned the second version of the Bill which totally removed Clause 17 (b). Indian Government had no way but to bring back the Clause 17 (b) to get it passed in the Loksabha.

But this time round, playing some word games they included an “intent” clause in the Bill. It meant Indian operators can only sue the suppliers if only the accident was intentionally plotted by the suppliers. This was ridiculous, because it is always very hard to prove such a case and also it would have taken a long time to reach the culprits. Again the opposition played its role effectively and in the final version, the “intent” clause was removed.

Now as per the final version of the Civil Liability for Nuclear Damage Bill, Indian Operators can take action against the supplier if it is proved that the accident occurred due to some latent or patent defects in the equipment or design. Another issue which caught attention of the opposition was the amount prescribed as the relief package. Looking at the severity of a nuclear accident the Rs 500 crores as the nuclear accident indemnity appeared so meagre. Our government should have studied the history of nuclear accidents like Three Mile Island (TMI) before coming to this conclusion. In the final version the amount was raised from Rs. 500 crores to Rs. 1500 crores which is far more practical than the initial amount.

The proponents of the Civil Liability for Nuclear Damage Bill might have challenged the opposition, that our country would lose the fruits of nuclear commerce very early if the Bill doesn’t see the daylight. But they need to understand that the safety of our countrymen should come first and at any cost. Finally it’s the democracy which won the battle of supremacy.

Deepak Pal works as a Software Analyst in an reputed IT Consultancy company. His areas of interests are India's Foreign Policy and domestic policies pertaining to Energy, Education, Agriculture and Industries.He may be contacted at

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