Two recent unrelated events formed a subtle connection in my mind. On 25 January, India and the United States announced a “breakthrough” in negotiations to operationalise the long-stalled nuclear deal.
On 26 January, eminent cartoonist R K Laxman, the creator of the much-loved “Common Man”, died. The Indian and American governments, and GE and Toshiba Westinghouse, see the “breakthrough” as cause for celebration. If American corporations are sufficiently convinced to follow through and supply nuclear power plants to India, the common man (and woman) – namely, Indian taxpayers, electricity consumers and communities that host the plants – may well get the wrong end of the stick.
Here’s why. The Indo-US civil nuclear deal was signed by George Bush and Manmohan Singh in 2008. As per the deal, India agreed to separate its civilian and military nuclear activity and open up the civilian part to inspection by the International Atomic Energy Agency. In return, the US offered to resume full nuclear trade with India, ending its nuclear ostracism.
A thankful India carved out two large chunks of real estate in Mithi Virdi, Gujarat, and Kovvada, Andhra Pradesh, and offered them to two American multinationals to set up nuclear power plants. Toshiba-Westinghouse was given the Gujarat site for building six AP1000 reactors of 1100 MW each. GE-Hitachi plans to set up six units of 1594 MW each at the Kovvada site. Both projects involve untested technologies. In both instances, public sector Nuclear Power Corporation of India will be the operator.
Damages to run into billions
But two thorny issues have held up the export of nuclear technology from the US to India. First, US domestic law requires tracking by US authorities of nuclear supplies made to countries like India that have not ratified the Non-Proliferation Treaty. India found the requirement unduly intrusive as it was in addition to International Atomic Energy Agency verification.
Second, the Indian Civil Liability for Nuclear Damages Act provides for two-part recourse – through Section 17(b) and Section 46 – against nuclear equipment suppliers if the nuclear plant blows up.
India is not alone in providing such avenues. Japan, Austria, Switzerland and Germany have actually gone one step further and even removed liability caps. This is in line with the realisation that damages arising from nuclear accidents can run into billions of dollars, including compensation, relocation and rehabilitation, environmental remediation and lost trade due to contaminated agricultural and marine produce.
A study released in 2014 by researchers from Ritsumeikan University and Osaka City University said the Fukushima disaster will cost $105 billion or twice the predicted damage in 2011. This figure does not include the cost of decommissioning of reactors or safe disposal of the contaminated material and wastes. The researchers point out that the increased costs would be passed down to taxpayers and electricity ratepayers through increased tariffs. Belarus, which was worst hit by the Chernobyl disaster, has spent at least $235 billion over the last 30 years on relief, rehabilitation and clean-up. That is more than twice the size of the Indian nuclear market that American corporations are hoping to tap into.
Scrapping even limited liability
Indian law – CLNDA – is already weak. But American and Indian private equipment suppliers – like Westinghouse, L&T, JSW Steel and Tata Power – feel it is not weak enough. Section 17(b) of the Indian Act allows the operator to sue equipment suppliers. The Rules to the Act, however, limit supplier liability to Rs 1,500 crore in damages or the value of the contract, whichever is less. Section 46 of the Liability Act potentially exposes suppliers to unlimited tort liability under relevant Indian laws. However, under Section 17, only the operator can sue, and only if such a provision is expressly made in the contract.
Winning the suit is conditional to proving deficiencies in the material or equipment supplied or services rendered. After all this trouble, if the value of the contract with the supplier of the equipment that caused the accident is only Rs 5 lakh, then regardless of the extent of damage caused by that flawed equipment, Rs 5 lakh is all the operator is entitled to get from that supplier. A writ petition challenging the constitutional validity of the Act is pending before the Supreme Court.
The Indian government has indicated that it will do away with even this limited liability.
In a twist of Republic Day irony, Obama and Modi have opted to use backroom deals and executive discretion to bypass the spirit and intent of their respective legislatures. The US president says he has found a way to exempt supplies to India from US inspections meant to ensure non-proliferation goals. In return, the Indian prime minister has suggested that a publicly funded insurance pool will be set up to indemnify foreign suppliers and cover the liability under Section 17(b). Section 46 is sought to be neutralised through a legal opinion offered by the Attorney General.
Cont on page 2.......
View more random threads:
- People of Karachi Came Out on roads in...
- Lahore: Military summoned for terror fight
- A Runaway Transfer of Wealth to the...
- [[M]] Gum disease care 'aids arthritis'
- [[M]] Problems are solved by sleeping
- fake news of cinema destruction in USA by...
- Operation “Get Nawaz Sharif !!!
- Pakistan is a `Chick Magnet’......By Smita...
- 3 big threats to the global economy......
- 5 Sure Signs the U.S. Economy is...