True to his credentials as an obsessively US-friendly Prime Minister, Manmohan Singh presided over his Cabinet on August 20 and approved the final draft of the Civil Liability for Nuclear Damage Bill 2010, with substantial modifications and additions to allow the
Cabinet’s action in clearing such a highly supplier-biased draft legislation amounts to nothing less than an abject surrender to the
When the discussions in the S&T Committee were winding up, BJP leaders took a vehement stand against the Bill, asserting that there was no need for a two-part or capped compensation, that under no circumstances will they allow the suppliers to escape their due responsibility to the victims of an accident, etc. But, after a 45-minute discussion with the Union finance minister on August 17, the top leaders of the BJP stated that all their problems with the Bill have been sorted out and that their party would have no difficulty in supporting the Bill.
On the same day that BJP expressed satisfaction, members of the Left parties in the S&T Committee had given a dissent note, pointing out serious lacunae in the Bill. CPI(M) MP Saman Pathak’s note clearly pointed out the still existing infirmities in the Bill, including the now infamous ‘and’ which was introduced at the end of Clause 17(a) of the Bill to block any realistic possibility of pursuing the operator’s right of recourse against the foreign supplier. This modified version of Clause 17(a) along with a moderately strengthened Clause 17(b) appeared in the Report of the Parliamentary Committee on S&T which was submitted to both houses on August 18.
The ‘and’ clause
When the CPI(M) objections were highlighted by the media as extremely valid, the BJP leadership once again started protesting. The government finally appeased them by assuring that the ‘and’ would be removed from the end of Clause 17(a) before the amendments are moved in Parliament after the Cabinet approval. But, now it turns out that the government was not being honest with the BJP about their real intent.
The Cabinet has indeed misled the BJP and the nation by acceding to the demands of the CPI(M) and BJP to drop the ‘and’ from the end of Clause 17(a), but at the same time entirely re-writing Clause 17(b) to provide a water-tight immunity to the foreign suppliers against any possibility of successful litigation by the Indian operators for right of recourse. In doing so, the PM and his Cabinet have blatantly supported US interests and demands, and have over-ruled the recommendations of the Parliamentary Committee based on the opinion of national experts who deposed before them. More seriously, the PM and his Cabinet have at the same time deliberately blocked any chance of potential Indian nuclear accident victims to get compensation from foreign suppliers, even in cases where it can be reasonably proven beyond doubt that an accident occurred due to the supply of defective equipment and systems, negligent or faulty design and manufacture, use of substandard materials, or wrong execution of support services provided by them.
Section 17(b) as recommended in the Parliamentary Committee Report reads: “The operator of a nuclear installation shall have a right of recourse where the nuclear incident has resulted as a consequence of latent or patent defect, supply of sub-standard material, defective equipment or services or from the gross negligence on the part of the supplier of the material, equipment or services”. It took depositions made by many experts before the committee and some valid arguments from the opposition members within the committee to get this consensus statement agreed upon.
Succumbing to demands
But, the PM and his Cabinet found Clause 17(b) recommended by the Parliamentary Committee to be not at all compatible with what the US State Department and the nuclear business lobbies in India and the US want. The inclusion of this clause in our National Liability Law also runs counter to the requirements of the CSC Annex which requires no one other than the operator shall be liable under the law. Ever since the committee recommended this revised Clause 17(b) to the Cabinet, it would appear that extreme pressure has been brought on the PM by the
Succumbing to their demands, the PM and his Cabinet have modified Clause 17(b) to read: “The operator of a nuclear installation shall have a right of recourse where the nuclear accident has resulted as a consequence of an act of supplier or his employees, done with the intent to cause nuclear damage, and such act includes supply of equipment or material with patent or latent defects or sub-standard services”.
By framing this modified clause, the Cabinet is requiring that future accident victims have to prove (through the operator) that a supplier has given defective supplies ‘with the intent to cause nuclear damage’, before they can get any compensation! Almost always, such sub-standard supplies result from gross negligence, lack of knowledge or expertise, poor quality control at various stages, wrong design, selection of materials, manufacture, and assembly, etc. And, unless the Cabinet feels that some of the reputed foreign suppliers could also be at times latent international terrorists, out to harm Indians through their intentionally made sub-standard or defective nuclear supplies, there is no basis for framing an absurd clause like this.
Under these circumstances, Parliament must restore the Parliamentary Committee’s recommended version of Clause 17(b) cited above, and reject the Cabinet’s version. If the Cabinet’s version somehow gets through Parliament and becomes part of the liability law, it must then be vehemently challenged in the highest courts of the country.
The operator’s right of recourse against the suppliers will not be meaningful unless the operator’s liability for compensation is raised to a realistic and adequate level, commensurate with a nuclear accident. The Cabinet has only approved a measly sum of `1,500 crore as compensation for accidents in reactors having a power level above 10 MW, `300 crore for spent-fuel reprocessing plants, and `100 crore for research reactors with power up to 10 MW, other fuel cycle facilities, and transportation of nuclear materials. These amounts have been grossly underestimated and intentionally kept low by the government to help a government company (with up to 49 per cent private share-holding, as now allowed under the Atomic Energy Act 1962) and/or a private sector company in the future (with major share-holding, after a subsequent modification of the Atomic Energy Act) to derive profits by operating nuclear plants, without having much of a financial burden towards annual charges for securing financial security to cover their liability through insurance or bank guarantees.
The very low operator’s liability, however, tends to relax the operator’s diligence in ensuring a high level of nuclear safety in his plant, allows him to get only up to the same limited judicial compensation under any right of recourse litigation against suppliers, and will allow the operator to transfer a bulk of his responsibility for compensation liability to the tax-payers. Parliament must, therefore, pay serious heed to amendments which will be put forward to enhance operator liability limits.
New ‘last minute’ clauses
In the Cabinet’s revision of the Bill, they took care to define under a revised Clause 2(l) the ‘operator’ of a nuclear installation as the central government or any authority or corporation established by it or a government company who has been granted a licence pursuant to the Atomic Energy Act 1962 for the operation of that installation. The Cabinet has also introduced a fresh Clause 3(A) which says that “(this law) applies only to the nuclear installations owned or controlled by the central government either by itself or through any authority or corporation established by it or a government company”. It is further explained that a government company means a company in which not less than 51 per cent of the paid-up share capital is held by the central government.
In addition, the Cabinet decided to add a sentence at the end of Clause 7(1) which reads: “Provided that the central government may, by notification, assume full liability for a nuclear installation not operated by it, if it is of the opinion that it is necessary in public interest”.
It is interesting that new Clauses 2(l), 3(A) and the additional sentence added to Clause 7(1) are all creations only at the level of the PM and the Cabinet at the last minute. Therefore, the real purpose of these three deliberate insertions by the Cabinet at the last stage is worth examining. This could most likely signal the government’s intention to have private sector-controlled and owned nuclear installations at a later stage, after making suitable amendments to the Atomic Energy Act 1962. In any case, the opposition parties must ask the UPA government why they made these additions, especially the sentence added to Clause 7(1).
Dr. A Gopalakrishnan is a former chairman of the Atomic Energy Regulatory Board of the Government of