India's Nuclear Push: The Conflicts Within
|Jul 28, 2010|
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.
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.
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.
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 email@example.com