So what in case of a Nuclear Accident?

 -BILL LIMITS LIABILITY OF OPERATOR TO RS 5OO CRORE, ANYTHING ABOVE WILL BE GOVT RESPONSIBILITY

Answers to questions on the nuclear damage bill the Centre withdrew from the Lok Sabha on Monday, 15 March,2010

The Purpose - The Civil Liability for Nuclear Damage Bill seeks to set down the mechanisms and rules for claims from liability and payments that may arise because of a nuclear accident that may happen in future as the number of nuclear reactors and power generation will triple in the coming years. Further, it is aimed to pave way for India to join an international liability regime.

Situation Today - Currently, all of the country’s nuclear power reactors and facilities are owned by the government, or by Nuclear Power Corporation and Bharatiya Nabhikiya Vidyut Nigam (Bhavini) – both PSU’s. Any liability that may arise today due to any mishappening is the responsibility of our government. India has also purchased two nuclear reactors at Kudankulam in Tamil Nadu from Russia but the agreement is not clear on the issue. This has meant uncertainty over trans-boundary liability issues.

So why Now? – The Indo – US civilian nuclear agreement allows private players in US to sell nuclear equipment to India. But the companies expressed concerns over the absence of any clear nuclear liability regime in India. Environmental groups believe foreign companies will be reluctant to invest without a liability regime in place because they do not want to run the risk of having to compensate without a cap for a nuclear incident. Without the bill, under the existing legal regime, a company may have to encounter absolute, unlimited and non-delegable liability.

What’s in the Bill – A leaked version circulated by environmentalists indicate that government plans to cap the maximum liability for each nuclear incident to “300 million Special Drawing Rights”($460 million or Rs. 2100 crore). This is lower than the $470 million settlement in Bhopal gas disaster.

If the claims for compensation for nuclear damage exceed SDR 300 million, an additional 300 million SDR may be available through an international convention. The liability of a nuclear power operator (so far only the NPC and Bhavini) for each nuclear incident will be Rs 500 crore. The limit will also apply to private companies if they are allowed entry into the sector.

The central government will be liable for nuclear damage if the liability exceeds the operator’s limit.

What’s the Problem with it? – The bill has generated the controversy that the US firms and other multinational suppliers will go scot free or with too low liability and the Indian government will ultimately pay (the taxpayer’s money) as compensation. Some environmental activists are contrasting the proposed Indian cap of $460 million with the much larger $10 billion pool of funds available in the US to cover liability and provide compensation to the public in the event of a nuclear accident. Some legal experts are arguing that there is no place for a cap on liability under Indian law. Any such legislation would be vulnerable and open to challenge and could be easily struck down as a violation of the environmental jurisprudence established by India’s Supreme Court.

Are the concerns Real? - A clause in the bill appears to allow the nuclear operator to have “a right to recourse” —which would mean the operator could seek assistance — when the nuclear incident has resulted from negligence on the part of a foreign supplier of a material, equipment or service. However, this would have to be reflected in written contracts between the Indian operator (the NPC, for now) and the foreign suppliers. Environmental groups are skeptical, and fear that this will not emerge in actual contracts.

The International Nuclear Liability Regime- The Convention on Supplementary Compensation under the International Atomic Energy Agency provides for an international fund to compensate for nuclear damage in the event of an accident. The convention envisages a two-tier system — the state will ensure availability of at least 300 million SDR, and an international fund for which all participating nations are obliged to contribute. Any country that plans to join will have to ensure its national legislation is consistent with the convention’s provisions. By enacting domestic legislation, India could join the convention and — should the event arise — also seek money from the much larger international fund, which could help India access an additional 300 million SDR.

What’s in Other countries - It varies from country to country. Belgium has set a liability amount of 300 million Euros, and the France 91.5 million Euros, and the UK £40 million. Germany has set unlimited liability though a financial security limit is set at about 2,500 million Euros. Japan also has unlimited liability, but a maximum financial security limit of 60 billion yen.

Our Take - With the sort of ‘under the table deals’ necessary to get the contracts in India, it’s very much possible that the private players drastically cut expenses on safety of the reactors to make the profits. And Rs.500 Crores is too little a liability for a company, if it commits such a dangerous and genocidal act of nuclear accident, considering the long term deadly effects of radiation. Most of the burden will fall on the Indian government. It seems from the bill that the government is openly inviting private players to come and operate in India without any tension of liability or safety of the citizens. Government should think to increase the limit of the liability so that it may prove to be hindrance for the operators for acting irresponsibly. Currently the amount is not more than a formality, a joke on the value of Indian lives.

Nuclear accidents are not uncommon around the world. For information on the nuclear accidents around the world, Click here.