Indian liability debate returns

23 July 2010

The Indian parliamentary committee studying the implications of Nuclear Civil Liability Bill will submit its report to the upper house of the parliament in the monsoon session starting next week.

The committee was formed on 8 June under the chairmanship of Congress Party members of parliament T Subbirami Reddy following the walk-out by the opposition Bharatiya Janata Party (BJP) and Communist Parties when the government presented the bill on 7 May. The committee was recently given a time extension to submit the report.

The major contention concerning the bill is Clause 6 which sets the maximum financial liability in case of a nuclear accident at the equivalent of 300 million special drawing rights (SDRs), which is equal to Rs 2087 crore ($458 million). Clause 7 states that the operator would have to pay the first Rs 500 crore ($109 million) of this, with any remaining needs met by the Indian government. Commentators on this are well aware that the only company now legally allowed to operate nuclear power plants is state-owned Nuclear Power Corporation of India Ltd (NPCIL).

By comparison, the US system under the Price Anderson Act requires each nuclear operator to have insurance for $300 million from two pools. After that, the country's nuclear utilities as a whole would be required to meet needs of up to $10 billion before looking to government funds.

The BJP and Communist Party have said the proposed operator's cap on liability is too low and feelings on this are fuelled by India's experience of the 1984 Bhopal disaster, after which the Union Carbide Corporation escaped with a light penalty despite causing the deaths of several thousand people. Further inflaming the debate is the idea that the liability legislation is being brought in especially for US companies wanting to do business in India, although in fact it is a prerequisite for any construction by private enterprise

In Clause 35, the operator or the responsible persons in case of a nuclear accident could undergo trial under a special Nuclear Damage Claims Commission with no civil court having authority to handle the case. In Amercia's equivalent legislation, lawsuits and criminal proceedings would go through the usual court system.

After series of meetings, the Parliamentary Standing Committee on Science and Technology, Environment and Forests is expected to take up clause-by-clause consideration of the bill. The Committee will also take note of experts like former Atomic Energy Commission chairman PK Iyengar, strategist Brahma Chellaney, former diplomat Kanwal Sibal and legal expert Shams Khwaja before submitting its report.

In addition, officials from NPCIL, the Department of Atomic Energy and its Bhavini subsidiary, the Ministries of Labour, Agriculture, Health and Family Welfare and Home Affairs will also present their views.

The committee is thought to believe that liability should be extended to suppliers as well as operators and that the Rs 500 crore cap should be raised substantially. It is also likely to suggest modification of Clause 35 to prevent claims being adjudicated outside the normal court system. 

BJP has asked the government to withdraw the legislation from the parliament and said the bill is not in the interest of the people of India, but the government is confident that it can get the bill through parliament soon.

Reporting by Jagdish Kumar
for World Nuclear News