Question-mark over responsibility

The brouhaha over the Bhopal gas leak verdict has turned the spotlight back on the controversial Civil Nuclear Liability Bill 2010 now being reviewed by the Indian Parliament. The Bill — crucial to activating the much-vaunted civilian nuclear agreement between India and the United States in 2008 — deals primarily with the twin aspects of accountability and liability in the eventuality of a nuclear mishap.

The legislation has become a virtual tinderbox in a country that experienced one of the world's most catastrophic industrial disasters in 1984, when a gas leak in a Union Carbide factory in the city of Bhopal killed thousands. The Indian government was severely criticised for accepting what was called a "paltry compensation" of about $470 million for the victims.

Caught in an ugly crossfire between the ruling UPA (United Progressive Alliance) government and the Opposition parties and activists, the Bill has been criticised for primarily two reasons. One, that it caps the liability of foreign companies at a piffling $450 million in the event of an accident at a nuclear power plant. And two, that it makes the operator (or the Indian government-owned entity) and not the supplier (foreign firms) liable for those damages.

The ludicrously low cap, fear detractors, will be incapable of recovering even a fraction of the damage in a worst-case accident. Furthermore, by setting the liability limit so low, the Indian government is reinforcing the well-entrenched view in the global community that "life is cheap" in India.

The real bone of contention is Clause 17 (b) of the Bill, which deals with an operator's "right to recourse". This states that the "operator can seek a right to recourse if the nuclear accident results from the wilful act or negligence on the part of the supplier of the material, equipment or services, or of his employee". This will allow nuclear plant operators to seek damages from a supplier in the case of an accident.

The US nuclear industry — which stands to gain most from lucrative contracts with India — is naturally upset with 17(b) and wants it deleted for fear it would "open the door to more lawsuits." Pressured by the US lobby, the UPA government led by Dr Manmohan Singh is now keen to do away with this sub-clause. The argument being held forth is that foreign firms might be "disinclined" to invest in India's energy-starved civil nuclear industry if they persist with this conditional protection.

Government officials argue the Bill has been drafted "in consonance with international norms", now that India will be participating in international civil nuclear commerce following a landmark civil nuclear deal between India and the US in 2008. The deal had lifted three decades of sanctions imposed on New Delhi for conducting nuclear tests and paved the way for India to get civil nuclear technology.

However, critics maintain that the suggested dilution of the clause will make it well-nigh impossible for the nuclear plant operators to hold suppliers of nuclear material, equipment and manpower responsible in the event of an accident. They insist that if there is any sharp lesson to be learnt from the Bhopal tragedy, it is this — that there should be strict punitive laws to assign civil liability and ensure that criminal liability is also pinned down.

In other words, the Nuclear Liability Bill should be modified to weave in an explicit provision guaranteeing no operator liability cap and that an initial payment of $20 billion be put in a worst-case accident. Incidentally, this is also approximately the arrangement that BP has agreed to (with no cap) in the US in the case of the recent Gulf of Mexico oil disaster.

The point is that even if India feels the heat from the US nuclear lobby, why can't it adhere to the Vienna Convention on Civil Liability that does not cap nuclear liability but only puts a minimum floor? This also doesn't interfere with each nation's independent liability regimes. For instance, during the recent BP oil spill in the US, the powerful oil lobby got the US Congress to put a cap on the liability of oil firms for the damage at $75 million and further raise the cap to $10 billion or to leave the scope for unlimited liability.

There is no doubt that the Nuclear Liability Bill can invigorate India's nascent nuclear industry and ratchet up nuclear power generation from the present 20,000 megawatts to 40,000 by 2020. Understandably, this is a mouth-watering opportunity for the American nuclear suppliers, who can clinch lucrative deals and revive their own industry after a bruising meltdown. According to the US Business Council, about $100 billion worth of investment is needed to develop nuclear energy in India over the next 20 years.

A developing economy such as India can ill-afford to ignore the impending high cost of power generation by non-nuclear means. However, at the same time, it needs to be careful that in its ambition to generate that economical nuclear power, it does not get ensnared in international pacts which could prove to be more of a liability later.

Fears also persist that heavy dependence on US imports might impair India's bold, independent decision-making in future for fear of an adverse economic fallout. More so because the draft bill contains no provision to make the filing and pursuit of these claims or charges easier. This further raises the spectre of cumbersome litigation, the kind the Bhopal victims have been saddled with for 26 years.

The shoddiness with which India has handled the Bhopal disaster necessitates the establishment of strong and unambiguous liability laws to protect victims. An effective liability legislation can not only whittle down the probability of accidents but also ensure speedy and just compensation to victims. Only this can force nuclear suppliers and operators to be held accountable and absorb all costs in the unfortunate eventuality of a nuclear disaster.

Neeta Lal is a New Delhi-based freelance journalist.