A fresh Indo-US deal, to subvert the Nuclear Liability Act

P K Sundaram

The United States and India have formed a Joint Working Group tasked to find ways for the US corporates to avoid nuclear liability in case of an accident.  It is deeply disturbing to see the two countries, that are never tired of boasting their democratic credentials, blatantly undermining the constitutionally mandated suppliers liability provision for the nuclear companies.This is the third such attempt to get away with the liability clause. The first such attempt was made during legislating the Nuclear Liability Act in 2010. The government’s attempts to omit the supplier’s liability were exposed and resisted by sustained public pressure in and outside the parliament.  Again in November 2011, while formulating the Rules to supplement this Act of the parliament, the government limited supplier’s liability to a “product liability period” of mere 5 years ! India’s eminent jurist Soli Sorabjee has called this move ultra vires and constitutionally invalid.

Not only the US, even Russia has refused to abide by any liability mechanism. In fact, the contention on nuclear liability was a key reason why the agreement for Koodankulam 3 & 4 reactors could not be inked during the Indian PM’s recent Russia visit. While the US keeps reminding of engineering the 2008 NSG exemption for India and, Russia has even tacitly offered to ease the impasse  over the supplies of Enrichment and Reprocessing (ENR) technologies for India. France is also reported to have expressed strong reservations over the suppliers’ liability provisions.

Liability is not a largesse

While the Indian nuclear liability regime remains far from providing adequate compensation to the victims, nuclear liability as such is not just a matter of ensuring compensation. It is also a mechanism to ensure that the companies adhere to best safety practices.  The IAEA itself has underlined these roles of nuclear liability mechanisms- to protect the public, the environment and to enhance nuclear safety. After Fukushima, the need to revisit and revise the nuclear liability regulations has been widely recognised. As Mark Cooper noted in his article in Bulletin of the Atomic Scientists,

When governments socialize risk — shift it from the private sector to the public — they create what economists call moral hazard. This is the hazard that the private actor, who no longer bears the risk, will do more risky things than he would have done, if he had borne the full liability of his actions. It is a moral problem; the irresponsible actions of one person or entity harm an innocent bystander. It is also an economic problem because it induces firms to engage in uneconomic activities.

The nuclear industry has made every attempt to minimize its liability internationally. There are primarily two reasons for this. Firstly,  because the higher liability would make their insurance coverage prohibitively expensive; and this also underlines the fact that then nuclear energy is not really viable as a purely private economic enterprise. And secondly, if the amount of nuclear liability is spelt correctly, it would also reveal the astronomical economic cost of nuclear accidents. While the most conservative estimates for the clean-up of Fukushima accident  are around $250 billion, the total cost of Chernobyl was over 600 billions dollars. It is not surprising that immediately after the Fukushima accident, when sections of official media called for nationalisation of TEPCo, the skeptics argued that actually the government-industry nexus is trying to shift the costs to the public.

It has been repeatedly pointed by independent experts that the insistence on curtailing liability by the nuclear industry shows that they do not have faith in their own product. M V Ramana rightly argues:

“If there was really a “0% chance” of an accident, why would nuclear vendors work so hard to indemnify themselves?…….. When nuclear companies are unwilling to stake their financial health on these claims of “100% safety,” how can the government ask local residents to risk their lives?”

Undermining Indian Democracy

Tampering with the Civil Liability for Nuclear Damage Act 2010 is an act of undermining the very ethos of our parliamentary democracy. Starting with the former President Dr. Kalam to all the leading experts from nuclear establishment have been assuring people about safety of the nuclear reactors in India, but when it comes to holding the nuclear corporates liable and accountable, we do not get to hear any such reassuring voices. The language adopted by the govt officials as well as the media is such that it portrays the corporates as the primary victims, being “prevented” from nuclear commerce.  When democracy comes in the way of the industry’s insistence for a free-ride, it is termed a ‘stalemate’ on nuclear liability!

Contrary to the high-decibal official rhetoric, the Indian nuclear industry has a poor track-record on safety. As recently as August last year, radioactive leak took place in India’s Kakrapar nuclear reactor leaving 3 workers severely sick due to radiation exposure, all employed on contractual basis without any health benefits or insurances. The officials in the power plant pressurised the workers for a month until their condition worsened and they complained to the district collector. Embarrassed when this incident was revealed, a senior official from the NPCIL said –  “taking advantage of it, the workers, who were on contract, began demanding regularisation” !

Casual workers doing hazarduous work without protection, lenient liability laws, heavy subsidies, insulation from scrutiny, unaccountability and outright deception has become the hallmark of nuclear industry globally. And India is no exception.

Driven by vested interests and misleading notions of safety and energy security with nuclear power, the Indian elite is undermining our democracy. This is happening both in terms of undemocratically and unfairly favoring the nuclear industry and repressing the people’s genuine movement against nuclear protests in various parts of the country. It is high time we stand together in defence of people’s safety, livelihoods and the country’s democratic fibre.


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