 Liability bill stalls on fears over nuclear disaster
After years of years of negotiations and sustained backing from the US
government to find acceptance as a global nuclear power, India's plans
to go nuclear for a major share of its energy production are in limbo,
stalled by the refusal of the Lok Sabha, the country's lower house of
parliament, to pass legislation limiting corporate liability in the
event of a nuclear accident.
That has left a flock of
multinational technology suppliers sitting on the sidelines, vainly
waiting to enter the country to supply the materials and manpower for
construction of an atomic energy market estimated at US$150 billion.
They include global majors such as Alstom Group, Areva, Mitsubishi,
GE-Hitachi, Toshiba-Westinghouse and Rosatom which are bidding to win
contracts to supply reactors, technology and fuel. They want the
problems to be sorted, as does the Congress-led government.
With
the economy continuing to grow at a breakneck pace, the peak power
deficit is expected to widen in the current fiscal year to 12.6 percent,
according to junior power minister Bharatsingh Solanki. India plans to
add 78.7 gigawatts (GW) of power generation during the five years ending
March 2012, of which 15.1 GW has been commissioned, most of it
depending on the country's fossil fuel reserves, which create additional
problems from pollution and greenhouse gas production.
However,
the Civil Nuclear Liability Bill (NLB), designed to pin responsibility
for an accident or mishap, should it occur, has foundered in the wake of
rising irritation at buckling under to US interests and particularly
what is considered a weak court judgment in Bhopal – 26 years after what
has been termed the world's worst industrial disaster -- in which
15,000 people died and more than 100,000 were maimed badly when a deadly
mix of methyl isocyanate and other lethal gases spewed out of the then
Union Carbide's pesticide plant in India's central Madhya Pradesh
Province.
The initial demand on Union Carbide, now a part of
Michigan-based Dow Chemical, was for US$15 billion. The company paid out
the equivalent of just US$1 billion (at today's prices) with each
victim calculated to have received only about US$550. Further, a mere
two years' imprisonment for causing "death by negligence'' was awarded
by the Bhopal court recently to the convicted eight senior Indian
executives. Worse, they were granted immediate bail. Warren Anderson,
now 91, the former Union Carbide CEO, an American, is still at large,
with reports that the federal government at the time allowed him to
escape in order to not annoy Washington and affect foreign direct
investment flows. The request sent by New Delhi for Anderson's
extradition in 2003 is still pending.
The other factor is far
from India's shores, in which British Petroleum was forced to pay US$20
billion within weeks of the recent Gulf of Mexico oil spill. The spectre
of a nuclear catastrophe, opponents of the civil liability bill say,
could dwarf either of these disasters and, given the proposed
limitations on liability, could once again leave the poor and powerless
with little recompense.
India has never signed the nuclear
nonproliferation treaty of 1970, testing its first nuclear device in
1974. The 45-nation Nuclear Suppliers' Group lifted a 34-year-old ban on
international nuclear commerce with India in September, 2008. The
Indo-US civil nuclear deal was then approved.
New Delhi has
since approved nuclear power plants of nearly 40,000 MW, with imported
reactors from Russia, France and America forming more than 80 percent of
new capacity and indigenous suppliers the remainder. Prime Minister
Manmohan Singh has said that India could increase its atomic capacity to
470,000 MW by 2050.
Over the last year, India has signed or is
close to signing civil nuclear pacts with South Korea, Kazakhstan,
Namibia, Tajikistan, Argentina and Mongolia for technology or fuel,
apart from dealing closely with Russia, France, Canada, Britain and
America.
Corporate Interest
There is considerable
pressure from France and America to push India to sign a nuclear deal
with Japan despite the fact that Tokyo's current nuclear and high-tech
export control statutes disallow Japanese firms from conducting nuclear
trade with India as long as it continues to refuse to sign the
Non-Proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty
(CTBT).
That means that major players GE-Hitachi and
Toshiba-Westinghouse will not be able to sell nuclear plant knowhow to
India without approval from Tokyo. In the US, Hitachi with General
Electric and Toshiba with Westinghouse are partners.
Recently
US-based Westinghouse, one of the biggest global suppliers of nuclear
reactors, announced that it would open a 10-person office in India by
the end of the year. ``India's energy needs are huge and we plan to be
present,'' Meena Mutyala, Westinghouse's Vice President said.
Nuclear safety
As
India's push for nuclear energy grows, however, so do concerns about
the country's nuclear safety record, another factor in the refusal to
deal with the liability legislation. Some analysts say there could be
cause for alarm, given the non-transparent nature of India's
state-controlled nuclear energy sector - there is no way to estimate
whether safety issues will be carefully followed. Data on the sector are
closely guarded by the nuclear establishment, which functions under the
purview of the Department of Atomic Energy (DAE).
In the early
1990s, the Tarapur plant near Mumbai leaked radioactivity from faulty
cooling systems. Incidents of genetic disorders have been recorded in
populations at Rawatbhata in Rajasthan state and in the sea near
Kalpakkam in Tamil Nadu, where nuclear power plants are located. In
2004, the Kakrapar-1 reactor in Gujarat was shut down.
In the
1990s, the former chairman of the Atomic Energy Regulatory Board, A
Gopalakrishnan, expressed fears about the safety status of some nuclear
installations under the DAE.
NLB Deadlock
The NLB is
currently in limbo due to disagreement between the government and
opposition parties. A Parliamentary committee is seeking to solve the
differences amid allegations of buckling to American interests,
criticism about inadequate liability limits and a low limitation period
on claims.
The liability of the operator at Rs 5 billion ($100
million) has been deemed far too low. There has been criticism about the
operator being exclusively liable while exempting suppliers of nuclear
equipment, which effectively makes the state responsible. (Private
players in India are not allowed to produce nuclear power, which remains
exclusive to state owned firms.)
Both Greenpeace and Indian
industry body Assocham have sought stringent safety clauses in the bill.
They say that “suppliers” must include parties that install equipment,
instruments, spare parts and contractual labor accounting for 5 percent
or above of total project cost.
The main opposition party, the
Bharatiya Janata Party, has said, "the aim of the bill is to please
Americans. The bill is not for the people of India.'' The Communist
Party of India (Marxist) has also objected, saying that “there can be no
compromise with the lives and safety of the Indian people to appease
the commercial interests and profits of foreign and Indian big
business.''
"If there are lessons to be learnt from the tragic
episode of Bhopal, it is that there should be strict laws, which will
assign civil liability and ensure that criminal liability is also pinned
down,'' General Secretary of the Communist Party of India (Marxist)
Prakash Karat told the media.
NLB and CSC
Adding to the
debate is a US Congressional report that says that American firms are
unlikely to undertake any atomic trade with India if New Delhi does not
adopt a Convention on Supplementary Compensation (CSC) for Nuclear
Damage. The convention would place the burden of compensation in case of
nuclear damage on the “Installation State” (where the nuclear
facilities are located), in this instance, India, a politically tricky
aspect for New Delhi to agree.
Opponents in India say that CSC
favors the US, which is why only a handful of countries have ratified
it. India instead, they say, should incline towards the Vienna
Convention on Civil Liability with no cap on nuclear liability but a
minimum floor that permits nations to formulate independent liability
regimes.
Bhopal Tragedy and NLB
Calls for tough
statutes against industrial mishaps have grown due to renewed attention
on the Bhopal tragedy in which the perpetrator, Union Carbide has been
let off the hook.
Siddharth Srivastava is a New Delhi-based journalist. He can be reached at
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