E.A.S.Sarma
14-40-4/1 Gokhale Road
Maharanipeta
Visakhapatnam 530002
Mobile: 919866021646

Email: eassarma@gmail.com

To
Dr. Manmohan Singh
Prime Minister

Dear Dr. Manmohan Singh,

Subject:- Proposed dilution of civil nuclear liability law to accommodate US interests- objections

The Hindu has reported today that “Manmohan may carry nuclear liability dilution as a gift for US companies”. Similar reports appeared widely in several other news papers.

These reports have also indicated that the government has obtained a legal opinion to justify NPCIL incorporating such a dilution in the contract to be signed with its US counterparts for the supply of nuclear reactors to be installed at Kovvada (Andhra Pradesh) and other locations.

I hope that these reports are not true, as any such dilution of the civil nuclear liability law will have the following deleterious implications for the country.

The Civil Liability for Nuclear Damage Act, 2010 is a law enacted by the Parliament. The government will be committing contempt of the Parliament if it chooses to short circuit that law in any manner to accommodate the interests of the US MNCs.

If NPCIL signs contracts with its US counterparts incorporating a dilution in the civil nuclear liability regime approved by the Parliament, it can no longer resist demands from the other MNCs to agree to a similar dilution in respect of the contracts signed with them. This will certainly open the floodgates to bypassing the Parliament-enacted Civil Liability for Nuclear Damage Act of 2010.

There are already two writ petitions pending before Hon’ble Supreme Court on the Constitutional legality of the Civil Liability for Nuclear Damage Act itself and its applicability to the various nuclear power projects being set up in different parts of the country. It will be highly imprudent and perhaps inappropriate for the government to do anything at this stage to go beyond the existing law and further dilute its application from the point of view of the polluter-should-pay principle.

The government has framed Rules under the Act that do not conform to the norms contained in the Act itself. Instead of revisiting the Rules from that point of view, it is ironic that the government should further weaken the provisions of both the Act and the Rules.

A weak civil nuclear liability law that provides a protection to the reactor manufacturers from liability arising from an accident would not only shift the bulk of the liability to the Indian tax-payer but it would also introduce an element of moral hazard that would incentivise the reactor manufacturers to cut corners in incorporating adequate safety features in the design of the reactors. In other words, in its present form, the Civil Liability for Nuclear Damage Act of 2010 has enhanced the scope for reactor design deficiencies and the consequent increase in the possibility of occurrence of a disastrous accident such as the one that took place at Fukushima in 2011.

Incidentally, the reactors in which meltdowns took place at Fukushima were supplied by US MNCs. In the case of EPRs to be supplied by Areva company for the project at Jaitapur in Maharashtra, the nuclear regulators of Finland had raised several objections on the safety features of the reactors. Post-Fukushima, the safety of nuclear power reactors has assumed great importance. India should be wary of this and not cave in to pressures from the MNCs. There cannot be any compromise on safety.

The civil nuclear liability regime in USA (The Price-Anderson Nuclear Industries Indemnity Act) and in the other countries like Canada have incorporated more stringent provisions in regard to the liability to be borne by the reactor suppliers. There is no reason why India should cave in to MNCs’ overtures to exempt them from the full liability in the event of an accident. The government should know that Fukushima has already cost Japan a mind boggling liability exceeding $20 billion with the final figure further going up steeply. The adverse impacts of Fukushima are inter-generational and they also transcend the international boundaries, especially as a result of the radioactive water from the site leaking into the Pacific and contaminating the marine resources.

Finally, it will be imprudent on the part of the government to mock at its own laws and regulations just to appease the countries which supply nuclear reactors. The government should know that the regulators in USA and other countries have become extra-cautious in enforcing safety regulations in their own countries.

Against this background, I would urge upon the Department of Atomic Energy (DAE) and NPCIL not to attempt any dilution of the Civil Liability for Nuclear Damage Act of 2010. Any such dilution will compromise the interests of the country. Instead, it is necessary that India should revisit the liability regime as it exists today and make it more realistic and stringent.

Regards,

Yours sincerely,
E.A.S.Sarma
Former Secretary to GOI
Visakhapatnam
19-9-2013