The deal is done. We have reached an understanding. We have broken the logjam of the past few years,” exulted former foreign secretary Sujatha Singh on the first evening of President Barack Obama’s visit to New Delhi to participate in the Republic Day parade. She was referring to the Indo-US Civil Nuclear Deal negotiated by the UPA government. For all her labours, the reward was her removal just two days after Air Force One lifted off from the technical area of the Palam Airport.
After moving a no-confidence motion to derail the nuclear deal in July 2008, the BJP had no qualms of attempting to take acclaim for operationalising it in 2015. A day after the 123 Agreement was made public on August 4, 2007, the BJP had termed it as an “assault on the nuclear sovereignty and foreign policy options” of India.
So it was from January 25 onwards the nation was oblivious as to what was the “done deal”. Finally the day after polling in Delhi was over did the foreign office come out with an explanation in the form of frequently asked questions on Civil Liability for Nuclear Damage Act 2010 and related issues. What were the sticking points that Modi and Obama presumably resolved? The first pertained to the interpretation of Section 17(b) of the Nuclear Liability Act. The original clause in the bill read: “The nuclear incident has resulted from the willful act or gross negligence on the part of the supplier of the material, equipment or services, or of the employee. There was consternation in Parliament about the difficulty of proving intent.”
Bowing to the will of Parliament, the clause was redrafted to make the liability of the supplier absolute. The amended clause in the Nuclear Liability Act reads: “the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment with patent or latent defects or substandard services”.
Now let us come to what does the government clarification says. “However, the situations identified in Section 17(b) relate to actions and matters such as product liability stipulations/conditions or service contracts. These are ordinarily part of a contract between the operator and the supplier. This situation is not novel but is rather a normal element of a contract.
Thus this provision is to be read along with/in the context of the relevant clause in the contract between the operator and supplier on product liability. It is open for the operator and the supplier to agree on the terms of their contract relying on the applicable law”.
Demystified of legalese it essentially means that the supplier-operator contract would have overriding precedence over a statutory provision. If this interpretation was correct then what was the need of for this section? The previous provision section 17 (a) states inter alia “the operator of the nuclear installation after paying compensation for nuclear damage in accordance with Section 6, shall have a right to recourse where such right is expressly provided for in a contract in writing.”
In fact, the un-amended and amended Section17 (b) was specifically for situations where such a right of recourse was not specifically written into a contract between an operator and a supplier. Now who is selling the national interest with such self-serving interpretations? Now the next sticking point is Section 46. The provision states “this act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator from any proceeding which might, apart from this act, be instituted against such operator.”
The intent of the provision is clear that if a nuclear accident or incident takes place, the option of tortious liability and criminal proceedings would be open to the victims in both Indian and foreign courts. If the accident or the incident happens because of the supplier’s fault then obviously the operator or even the government can take him to task for criminal negligence or punitive damages in Indian or foreign courts respectively.
Now discern how the government in its explanation seeks to water it down. “The CLND Act channels all legal liability for nuclear damage exclusively to the operator and Section 46 does not provide a basis for bringing claims for compensation for nuclear damage under other acts. That this section applies exclusively to the operator and does not extend to the supplier. At the same time it does not create the grounds for victims to move foreign courts. In fact, that would be against the basic intent of the law to provide a domestic legal framework for victims of nuclear damage to seek compensation”.
Now juxtapose this explanation against the plain meaning of Section 46 and you can draw your own conclusions as to who is batting for the nuclear behemoths when the UPA was batting for the people.
Last but not the least the insurance conundrum. Section 6(2) fixes the liability between Rs 100-1,500 crores for different kind of nuclear reactors and plants. Explaining this provision in the Lok Sabha, the then minister of state in the Prime Minister’s office stated that the compensation cap to be paid by the operator at Rs 1,500 crore as provided in the bill was not the “limit” as overall compensation would be the decision of the claims commissioner. “Compensation is unlimited. Whatever compensation will be decided by the Claims Commissioner and he (operator) will have to pay it. The limit on compensation was only to enable the operator take insurance cover.
How does the ministry of external affairs FAQ interpret this provision? “Section 6(2) of the act lays down that the operator’s maximum liability shall be Rs 1,500 crore. In case the total liability exceeds Rs 1,500 crore as per Section 7(1) a of the CLND Act, this gap of Rs 1,100 crore would be bridged by the Central government”.
Moreover, the FAQ says that Rs 1,500 crore would also be made up of an insurance pool made up of GIC Re and four other PSUs, which would together contribute '750 crore and the balance would be contributed by the government. The suppliers can also access this insurance pool. In other words, Indian money would pay for a nuclear accident in India and a foreign supplier can virtually take a free ride at the expense of the Indian savers and taxpayers. Does that sound like protecting national interest or selling the sovereign short?
In essence, as long as Section 17 and 46 remain on the statute book, no amount of sophistry or chicanery would allow the government to escape the rigours of the law. These provisions were inserted by the UPA government to protect people from a Fukushima-, Chernobyl- or a Three Mile Island-type of disaster, while retaining the flexibility to access nuclear power. No formal or informal understanding arrived at by the BJP government can surmount the explicit letter of the law.
— The writer is a lawyer and a former Union Minister. The views expressed are personal. Twitter handle @manishtewari
