Nuclear liability needs a far better approach

The government of India put out certain clarifications on Sunday on the contentious issues surrounding liability, compensation and right of recourse against the equipment supplier in the event of a nuclear accident. The clarifications come in the wake of a lot of uncertainty over the understanding on the policy hurdles that was said to have been reached between the Indo-US Nuclear Contact Group and later confirmed by US President Barack Obama and Indian Prime Minister Narendra Modi. Clarity still appears to be elusive.

Prima facie, the concession to foreign suppliers of atomic reactors that they cannot be sued for damages by victims of a nuclear accident, but can be held liable by the operator who has the option of the right of recourse, appears to be bad in law and goes against the grain of India’s experience in the Bhopal gas tragedy when it came to making a foreign equipment supplier as well as operator of a chemical plant compensate victims fairly.

In the nuclear scenario, the operator of nuclear power plants is the government of India itself through the Nuclear Power Corporation of India. It appears as if New Delhi would like to take on the entire liability, or at least that of paying the premium for insurance plus operator liability up to approximately Rs 6,200 crore, and leave foreign suppliers entirely out of the legal process.

This is obviously being done to accommodate foreign companies who want to supply nuclear equipment. The crux of the matter is that tort law or a civil damages suit clause for victims does not apply to suppliers, who will not be liable under “class-action” suits, so famous in the US for groups who fight corporate America. It appears India is prepared to forego the rights of its citizens. The issue should not be clouded by the Fukushima disaster. But the need to consider a possible liability in case of an accident, or compensate for Indian lives affected in the event of an accident, is an absolute must.

A far more balanced approach would be to create a template from now that would include existing players and potential suppliers so as to make a level playing field in which no one’s rights need to be trampled upon in order to attract business from a particular country. And since the Russians and the French are prepared to shed their reluctance and still do nuclear business with India even under the existing laws — as can be seen in their readiness to supply reactors to the Kudankulam and Jaitapur power plants, respectively — should the government bend over backwards to entice US companies?