SO far there is no specific legal regime in place in India to tackle the complex question of speedy compensation in the event of a nuclear mishap nor is India a member of any related international convention on this matter. Therefore, it is both necessary and desirable that the Government of India should put in place a national law to fill up this vacuum particularly when more atomic power stations are going to be constructed in India with foreign assistance.
But the liability regime must be balanced one, reasonable to all stakeholders and must conform to the Constitution and the laws as laid down by the Supreme Court of India lest it is struck down in judicial reviews.
The Civil Liability for Nuclear Damage Bill 2010 as drafted by the Manmohan Singh government is totally tilted in favour of foreign companies as it totally exempts foreign suppliers from all liabilities in event of mishaps and also restrains Indian courts from ordering the foreign suppliers to pay compensation to victims in India.
Under this Bill the liability of plant operator has been capped at Rs 500 crore [US$ 100 million] irrespective of number of victims whereas in the US it is a minimum of about US$ 10,000 million.
The Bill proposes to fix the total liability for a nuclear mishap at about Rs 2200 crore out of which Rs 500 crore will be paid by the operator company [public or private] and the balance by the Government of India out of taxes paid by Indian citizens. Beyond this cap, the affected people will not get any compensation for either loss of life, health damages or damages to property and environment. This capping of damages is violative of Indian case laws.
The Nuclear Power Corporation of India Ltd [NPCIL] will be the Indian operator so all damages will come from public funds till private companies are allowed by law to operate atomic power stations.
The Bill does not impose any civil liability on foreign suppliers even if later on it is found that mishap happened because of some manufacturing defect or wrong technical advice by the foreign supplier. This blanket exemption may encourage foreign suppliers to dump substandard or defective equipment in India.
Clause seven of the Bill reads: “The Central Government shall be liable for nuclear damage in respect of a nuclear accident when such liability exceeds the Rs 500 crore liability limit of the operator or where the accident occurs in a nuclear installation owned by it.”
However criminal liabilities of foreign suppliers and local operator under Section 304(A) of the Indian Penal Code read with the Tehri Dam and the Uphaar Cinema case laws appear to remain intact.
The Bill stipulates that a Nuclear Damage Claims Commission will be set up and that no Indian court can order any nuclear supplier to pay any compensation. Thus this Bill curtails jurisdiction of Indian courts on some event which happened on Indian soil affecting lives and properties of people which the Parliament is not competent to do as the Parliament cannot prevent Indian courts from protecting fundamental rights of citizens.
Soli Sorabjee, former Attorney General, has also opined that the Bill is discriminatory.
The Bhopal Settlement of $470 million (Rs 2152 crore) reached between the Central Government and Union Carbide, a US company, and accepted by the Supreme Court, has proved to be inadequate. And even today, thousands of gas victims are suffering and have received only peanut compensation.
Though the Bill would favour all the foreign suppliers but in the Indian media only the US has been targeted as the one twisting arms of the Manmohan Singh government as the US officials have been publicly making the loudest demands for such legislation in India.
Omer F Brown, a key spokesperson for the US nuclear industry, speaking at a business summit in Mumbai in December 2006 said: “Currently, India does not have a nuclear liability law covering its facilities. Therefore, concerns over nuclear liability would be a major impediment to any nuclear trade with India…Most US nuclear suppliers would not be willing to work in India without nuclear liability protection.”
Last year the US Assistant Secretary of State for South and Central Asian Affairs Robert Blake informed House Foreign Affairs Committee last year, “We are hoping to see action on nuclear liability legislation that would reduce liability for American companies and allow them to invest in India…”
Recently, Blake said in an interview ( March 10, 2010): “We also are very much hoping that the Indian government will proceed with very important legislation on nuclear liability, that will be very important protection for American companies who are seeking to do more business in the civil nuclear area, in India. And, we were very gratified to learn that the President of India has announced India’s intention to introduce this bill in the current session of the Indian Parliament.”
American firms are shaky in view of the three miles mishap and as the US did not allow construction of new atomic reactors in USA for a long number of years.
Suppliers from other countries have not been making such a law as pre-condition. Vladimir Putin, Russian Prime Minister, who was in Delhi in March 2010, signed an agreement to construct six new atomic reactors in India by 2017 without insisting for any Liability Bill and with higher degrees of indigenisation. Four new will be set up at Kudankulam, Tamil Nadu and two at Haripur, West Bengal.
While serving abroad I noticed that foreign investors did show concerns about slow judicial process in India. So the Bill ought to have tackled this genuine concern of foreign investors by offering in the Bill time-bound decision-making based on day-to-day hearing in courts. In such cases of nuclear mishaps first hearing should be by a division bench of a High Court with single appeal to a three-judge bench of the Supreme Court.
The UPA government ought to have provided in the Bill that in the event of nuclear a mishap representatives of all stakeholders including foreign supplier(s) will jointly determine within three months the cause(s) of mishap; and, if cause was attributable to a foreign supplier, the foreign supplier shall also pay compensation to Indian victims as per norms applicable in the home country of foreign supplier or as per Indian law whichever is higher.
It is unfortunate that the UPA government has adopted such anti-people attitude. The Bill is an affront to the dignity of Indian people.
(The writer belongs to the Indian Foreign Service (1971 batch) and served as Ambassador to Finland, Estonia, Jamaica, Dominican Republic, Tunisia and Tanzania and; as Consul General, Dubai and Birmingham (UK). Contact address: opg4444@yahoo.co.in)
