The Civil Liability for Nuclear Damage Bill has started a debate over some clauses in India, even

before it is
introduced in the Indian Parliament

The Nuclear Liability Bill

The bill deals with the liabilities in case of a possible nuclear mishap. The bill is necessary to activate Indo-U.S.
Civilian Nuclear Agreement. As the U.S. nuclear reactor manufacturing companies will require the liability bill to get
insurance in their home state. After this bill becomes an act, India will become a member of the international
convention on liability in the civil nuclear arena.

Debate over the Bill

The bill is certainly debatable as it has certain clauses which indirectly let free the manufacturers and the builders of
the nuclear reactors from any financial and legal liability.

Clause 6
According to the clause 6 of the nuclear liability bill, the maximum financial liability in case a nuclear accident occurs
in nuclear reactors has been set at the rupee equivalent of 300 million special drawing rights (SDRs) which is equal to
$458 million (Rs. 2,087 crore). The amount is considered meagre in comparison to the destruction caused by a
nuclear accident. A same kind of law in U.S. has set the financial liability for such accident at $10.5 billion.
Clause 7
The clause 7 defines the share of financial liability for each of the culpable groups. It states that the operator will have
to pay Rs. 500 crore and the remaining amount will be paid by the Indian government. This is considered as a
ridiculous point as the operator will be the Nuclear Power Corporation of India Ltd. (NPCIL) which in itself is a
government owned facility.
•
The operator can claim the liabilities form the manufacturer and supplier if it is mentioned in the contract. But the
maximum amount payable by the foreign companies will be a very little sum of Rs. 500 crore. Ultimately, it is the
Indian taxpayer who will have to give the money even when the accident has occurred due to others mistakes.
Clause 17
This clause deals with the legal binding of the culpable groups in case of a nuclear accident. It does allow only the
operator (NPCIL) to sue the manufacturers and suppliers. The victims won’t be able to sue anyone. Practically, no
one is considered legally liable because the recourse taken by the operator will yield only Rs. 500 crore at maximum.
Clause 18
Clause 18 of the nuclear liability bill limits the time to make a claim within 10 years. This is very less as compared to
the long term damage that may be caused due to a nuclear accident.
Clause 35
Clause 35 extends the legal binding that the responsible groups may have to face. The operator or the responsible
persons in case of a nuclear accident will undergo the trial under Nuclear Damage Claims Commissions and no civil
court is given the authority. The country will be divided into zones with each zone having a Claims Commissioner. In
the U.S. counterpart – the Price Anderson Act, the lawsuits and criminal proceedings goes under the U.S. courts.
Other Aspects of the Nuclear Liability Bill
Other than these clauses there are some general questions which are being raised upon the bill.
• The foreign made reactors will not be operated by the private companies but the operator will be NPCIL
only. Thus the electricity produced will be state subsidized which indirectly is the taxpayer’s money. In case,
private sector is allowed to operate, the electricity rates would be low due to the competition between
different operators.
• Even finance ministry and environment ministry has raised question on this bill keeping in view the financial
and environmental sustainability. A nuclear mishap can cause negative long term health and environmental
effects.
• M V Ramana, an eminent nuclear scientist said that the Atomic Energy Regulatory Board (AERB) will take
care of the quality of the imported enriched Uranium nuclear reactors. But, the board lacks expertise in such
reactors.
• Since India has developed its nuclear technology in using natural Uranium and Thorium as a nuclear fuel
through indigenous efforts, the import of enriched Uranium reactors is considered to slow down the process
of nuclear research and development in India.
Peaceful Use of Nuclear Power
The technological developments in nuclear reactors have significantly reduced the probability of a serious nuclear
catastrophe. Nuclear energy is considered as an environment friendly and sustainable source of energy. But, it is still
necessary to keep in mind the negative aspects of the nuclear energy and measures must be taken for its peaceful
use.
“I do not know what the third world war will be fought with, but the fourth world war will be fought with sticks and
stones.” – Albert Einstein

Nawab Zaidi (Jeddah(Saudi Arabia))

25/08/2010 at 11:05 pm
That is good news as Lok sabha has passed nuclear liability bill and we are sure as i
would also be passed by Rajya sabha. But the problem is of its implementation. The
involving parties will certaily violate this bill as we see trends in our politics as well in
administrative circle. No doubt our tax will be misused by politicians, contractors, foreign
companies, dealers and a lot of persons and parties. We have a good experience of
corruption and misappropriaton is fed in high circle blood. No doubt we are in need of
energy to fullfill our dreams of development but that is fact that there is no honesty and
impartiality in our national issues. We need transperacy in such national projects which
seems to be impossible. Now this is the duty of opposition to check how the
Government would do on this nuclear law. I dont know why I m in doubt there would be
fair dealing in implementation.

Samajwadi Party leader Shailendra Kumar said liability should be fixed on both supplier
and operator. "We have to bring development in the country. That is why I think the bill
is very important. We had supported the government during the nuclear deal also".

The Indo-U.S. Civilian Nuclear Agreement was enacted successfully in October, 2008. The agreement was to
 facilitate civilian nuclear partnership between United States and India along with many other mutual benefits on the
term that India will separate its civilian and military nuclear facilities and put civilian facilities under the International
Atomic Energy Agency (IAEA) inspection.
To facilitate nuclear commerce and attract U.S. private companies involved in nuclear commerce, it is necessary to
pass the Civil Liability for Nuclear Damage Bill also known as Nuclear Liability Bill. Nuclear Liability Bill will thus
define the financial and legal liabilities upon the involved groups, manufacturers, operators and government in case a
nuclear accident occurs. In this case the suppliers and builders will be the U.S. private companies and the operator
will be the Indian government controlled Nuclear Power Corporation of India Limited (NPCIL).
The United Progressive Alliance (UPA) government has prepared the bill which has been approved by the ministerial
cabinet on November 19, 2009. The bill will be introduced in the Indian Parliament on Monday, March 15, 2010 by the
government.

Nuclear Liability Bill – Why is it necessary?

India has an ambitious and indigenous nuclear power program to achieve the goal of 20,000 MWe electricity
produced through nuclear energy by 2020 which will be further increased to 60,000 MWe by 2032. In this way, India
will produced 25 percent of its electricity from nuclear power plants by 2050. Presently, India is producing 3981 MWe
of electricity through nuclear power. The share of nuclear power can be increased with the involvement of foreign
private involvement in manufacturing and supply of nuclear reactors.
To reap the benefits of Indo-U.S. Civilian Nuclear Deal of nuclear commerce and attract the U.S. companies involved
in nuclear commerce like General Electric and Westinghouse, it was necessary to introduce a liability bill which would
help these private companies in getting insurance cover in their home state. Thus, the bill will help in the realization of
the Indo-U.S. Nuclear deal.
There is no international obligation as such for the bill. Some countries of the Nuclear Supplier’s Group (NSG) like
France and Russia do not require any kind of liability bill for nuclear trade. Both of these countries have shown
interest in nuclear collaboration with India. Still, there are some countries in the group like U.S. which require the host
country to have a liability bill for a possible nuclear accident.
After the enactment of the Nuclear Liability Bill, India will join the international convention on liability in the civil
nuclear arena. India will thus be benefited by the nuclear trade with the participating countries in the nuclear arena.
The bill shall necessitate suitable amendments in the Atomic Energy Act 1962 which will pave way for private
investment in the Indian nuclear power program.
•
Ongoing Debate over the Nuclear Liability Bill
The motive behind the bill is also to legally and financially bind the operator and the government to provide relief to
the affected population in the case of a nuclear accident. But the amount of financial assistance and legal relief is a
point of debate as it is being considered insufficient and unsatisfactory. Other than this, the bill contain certain
clauses which if implemented will let free the manufacturer and supplier legally and to a large extent financially as
well.
According to the groups opposing the bill – in case of a nuclear mishap which if occurs due to defect in manufacturing
process or the imported facilities, the manufacturers and suppliers are also culpable and should be financially and
legally liable as well.
The bill has started a debate in India between the government, opposition, social and environmental organizations.
Because of certain clauses which seem to stake national interests in case of a nuclear accident the bill is likely to
face strong opposition when it will be introduced in the Indian Parliament on March 15,2010.
Important
What is Nuclear Liability Bill?
Reuters / New Delhi August 25, 2010, 19:44 IST

A civil nuclear agreement between India and United States in 2008 ended New Delhi's isolation in global atomic
commerce and opened up its state-controlled nuclear power market to foreign firms.
But the deal could not be implemented until India put in place a compensation regime that limited the liability of
private companies, especially those from the United States, in the event of an industrial accident.
So India framed the Civil Liability for Nuclear Damage Bill 2010, which stipulates the compensation burden on the
state-run reactor operator, the liability of the federal government and the responsibility of private suppliers and
contractors.
WHY IS THE BILL IMPORTANT?
The bill is important for private companies whose liabilities are not underwritten by their governments, as is done by
the governments of Russia and France.
Compensation claims from one nuclear accident could be enough to bankrupt a private company. Firms are reluctant
to enter the Indian market despite its size until there is some clarity on compensation in case of an accident.
WHY IS THE BILL CONTROVERSIAL?
Critics say the original draft law pegged the compensation liability of the operator too low -- at about $110 million,
almost 23 times less than that of an operator in the United States.
It also did not hold private suppliers liable, opening a debate on whether the government was allowing them to get off
easily in case of an accident.
But the main opposition Hindu-nationalist Bharatiya Janata Party agreed to back the bill after the government trebled
the compensation liability of the operator and extended the liability to cover private suppliers.
HOW MUCH COMPENSATION IS BEING OFFERED?
Following opposition to the bill's original draft, the government referred it to a special parliamentary panel.
The panel recommended the liability cap for the operator be trebled to $320 million, a suggestion largely backed by
the opposition.
State compensation, or the liability burden on the government, has been pegged at the equivalent of 300 million IMF
special drawing rights ($450 million) which will be over and above the operator compensation.
The panel has also suggesting extending the liability to cover private suppliers and contractors.
WHICH FIRMS WILL BENEFIT AND AT WHAT COST?
The main beneficiaries could be firms such as US-based General Electric and Westinghouse Electric, a subsidiary of
Japan's Toshiba Corp.
They already lag Russian and French firms, which have moved ahead on building reactors in India. While higher
compensation would mean firms would have to shell out more for insurance premiums, a formal compensation
regime will bring in much-needed policy clarity which will help speed up projects.
Once the bill becomes law, the US firms can start work on building reactors at least two sites identified for them. The
first fruits of the India-United States deal could fetch GE and Westinghouse up to $10 billion.
The Confederation of Indian Industry, a business lobby, said the bill would keep away domestic and foreign suppliers
because of the stiff provisions against private firms.
"Globally, there is no insurance coverage available for suppliers in the nuclear business," CII wrote in a letter to the
government, which was released to the press on Wednesday.
"This will stall the growth of the nuclear manufacturing industry in India and be a setback for the government's plan to
indigenise maximum supplies for the foreign technology plants."
ANY OTHER HURDLES REMAIN?
Yes, problems over acquisition of land for nuclear power plants could delay projects. In India, farmland acquisition
has highlighted a broader standoff between industry and farmers in a country where two-thirds of the population lives
on agriculture.
There have already been several farmers' protests against upcoming nuclear reactors and opposition support for
such demonstrations will complicate the land acquisition process.

Oppose
Left opposes Nuclear Liability Bill
Press Trust of India / New Delhi August 30, 2010, 16:22 IST

The Left today opposed the Nuclear Liability Bill in the Rajya Sabha asking whether it was the right time to exercise
the option of nuclear energy.
"Moving towards nuclear option has to be judiciously exercised. Is this the right time to exercise nuclear option for
energy," CPI-M leader Sitaram Yechury posed while participating in the debate on Civil Nuclear Liability Bill, 2010.

He said there was tremendous potential for hydro-electric power in the country which was not being utilised even
though the cost differential between it and nuclear energy is 1:3.
"For producing 40,000 MW of power, the cost differential (between hydro-electric and nuclear power) would be Rs 3
lakh crore plus," he said, adding this money could go to the youth and development of the country through hospitals
and schools.
"There are two Indias - the shining India and the suffering India. Let us help the suffering India with this," he said.
He said there was a "big corporate interest" in this as even though the Bill was for government companies, some
entities had 49 per cent private shares.
Noting that the "US interest was implicit", Yechury took a dig at the Prime Minister for not intervening in the debates
on price rise and the Bhopal gas tragedy though he intervened in the Lok Sabha on the nuclear liability bill.
He said the government should have a rethink on the issue.
Referring to the Prime Minister's speech in Parliament in 2008, he said Singh had used the expression reciprocity
with US in his speech.
"That reciprocity has not been fulfilled by the US. When this has not been done, why are we opening nuclear
commerce with the US?" he asked.
Yechury emphasised that the country needed energy but wondered if nuclear energy was the best option. If it was the
best option, why was it not exercised earlier, he asked.

Oppose
Why a nuclear liability bill is essential
Last updated on: August 28, 2010 02:08 IST

Tags: India India, Observer Research Foundation, Vienna Convention on Civil Liability for Nuclear Damage, Lydia Powell
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The oil spill in the Gulf of Mexico and the Bhopal tragedy have brought back into focus the issue
of industrial accidents, contractual liabilities and questions of operator liability, notes Manoj
Kumar and Lydia Powell in an Observer Research Foundation study, which will be published in
a three-part series. Here goes the first part:

Read Part 2: The loopholes in the Nuclear Liability Bill

Read Part 3: How the world perceives nuclear liability

The Bhopal tragedy, which is closer to Indian hearts, has engaged the Indian government and courts for
over 26 years and yet a solution acceptable to victims and other stakeholders is proving to be elusive.

Every step from the government and the courts has been welcomed only with exasperated cries of 'not
enough', 'too little' and 'too late'.

Many questions remain unanswered: who was liable to compensate the victims of Bhopal Gas Tragedy?
What ought to have been done to ensure immediate compensation to the victims? Could a structured
legal regime have made the difference? Should there have been a liability regime in place before allowing
units of the likes of Bhopal to be set up? Did India [ Images ] pay for the absence of a liability regime in
terms of human lives, livelihoods and irreversible environmental degradation?

The world saw the Bhopal Gas Tragedy (1984) and the Chernobyl accident (1986) follow in quick
succession to each other. Though both accidents had different backgrounds, they opened up appreciation
of the magnitude of damage and loss such tragedies could cause, especially nuclear tragedies which do
not recognise any geographic or temporal boundaries.

Damage caused by ionizing radiation to human cells may remain latent for a long time before manifesting
itself. Even the best of safety standards cannot completely exclude the possibilities of nuclear accidents
and in this light, the need to have a legal regime to compensate for damage and losses arising from
nuclear accidents in India becomes evident.

Increasing energy availability in general and electricity availability in particular is not merely an economic
pursuit for India but a social necessity.
Enriching the quality of life of millions of 'energy poor'. Indians while also facilitating the integration of their
livelihoods into the formal economy is not possible without the supply of electricity.

Nuclear energy is particularly attractive for electricity generation in India as India has entered a resource
intensive high economic growth path just as the world has begun to acknowledge natural limits in the
supply of cheap and easily accessible fossil fuels along with the consequences of green house gas
emissions that result from the combustion of fossil fuels.

The status of nuclear power generation in India

India currently has 19 operational nuclear power plants with the total capacity of 4.5 GW. Four more
reactors under construction would add another 2.7 GW.

Russia [ Images ] has traditionally been the major source of nuclear fuel to India since the early 1990s.
Dwindling domestic uranium reserves and sanctions on supply of fuel following India's nuclear weapons
tests restricted nuclear fuels availability and thus limited power generation capacity to a mere 3 percent of
total installed power generation capacity.

According to optimistic estimates, nuclear power generation capacity in India is expected to increase to
about 35 GW by 2020 when the demand for power is projected to stand at about 350-400 GW.

The waiver from the Nuclear Suppliers Group in September 2008 has facilitated the entry of India into
international nuclear trade and India has already signed nuclear deals with several countries including
France [ Images ], UnitedStates, United Kingdom, Canada [ Images ], Namibia, Mongolia, Argentina and
Kazakhstan.

In February 2009, India also signed a $700 million deal with Russia for the supply of 2000 tonnes nuclear
fuel. India now envisages increasing the contribution of nuclear power to overall electricity generation
capacity from 3 percent to 9 percent in the next 25 years.

The case for nuclear power

The world's population is expected to increase from the present 6 billion to about 8 billion over the next 25
years, and perhaps 10 billion later in the century.

Such a dramatic increase in population will have a dramatic impact on energy demand. At the very least,
energy demand is expected to double by 2050, even if developed countries adopt effective energy
conservation policies that reduce their growth in energy demand to zero.

Global coal reserves are estimated to be abundant but how much of it would be mined and used for
power generation in the future is uncertain given that combustion of coal is among the most important
sources for GHG emissions, the most probable cause of 'climate change'.

Coal accounts for only about 25 percent of total global primary energy supply but it contributes over 42
percent of energy related carbon emissions.
The energy density of uranium compared to that of coal and other fossil fuels also adds to the
attractiveness of nuclear power. Assuming a thermal efficiency of about 33 percent, a 1 GW power station
would consume roughly 3.1 million tonnes of black coal each year while a nuclear power plant of the
same capacity would consume only about 24 tonnes of enriched uranium.

In other words, ten trucks filled with coal will be required to make 380,000 trips to fuel the power plant
while just a single trip by ten trucks carrying uranium will be sufficient if the power generator was based
on nuclear fuel.

If the energy required by the trucks is factored in, the net energy gain or the return on energy invested in
a coal based power plant reduces substantially.

The merits of nuclear power cannot however mask the grave risks involved in harnessing that power.
Both coal and uranium require intensive mining which invariably use 'human energy' which is not
registered in any energy balance sheet.

This risk shrinks in significance when compared to the risk of accidents in nuclear reactors due to
mishandling of nuclear material or a fault in the nuclear reactor.

Since 1950, there have been 23 nuclear accidents in nuclear reactors around the globe with the latest
occurring in 2006. Out of these the biggest was the Chernobyl disaster which claimed more than 4000
human lives.

The long-term storage of radioactive waste is yet another factor that adds to the risk of nuclear power
generation. Nuclear damage has such a wide range that when nuclear installations are built close to
national borders, the fall out from a nuclear accident cannot be confined to national borders.

Despite the magnitude of risks that harnessing nuclear energy entails, very few countries have the luxury
of not including nuclear power as one of their key energy options for the future.

The geological limits to the availability of fossil fuels such as coal, oil and natural gas and the risk of
climate change make it necessary that energy poor countries such as India invest in harnessing nuclear
energy.

International nuclear liability regimes

The nature and magnitude of liability regimes varies widely across nations. Before 1997, the international
liability regime was embodied primarily in two instruments namely; the International Atomic Energy
Agency's Vienna [Images ] Convention on Civil Liability for Nuclear Damage of 1963 (entered into force in
1977), and the OECD's Paris Convention on Third Party Liability in the Field of Nuclear Energy of 1960
which entered into force in 1968 and was bolstered by the Brussels Supplementary Convention in 1963.

These conventions were linked by the Joint Protocol adopted in 1988 to bring together the geographical
scope of the two. They are based on the concept of civil law and share the following main principles:
· Liability is channelled exclusively to the operators of the nuclear installations;

· Liability of the operator is absolute, i.e. the operator is held liable irrespective of fault, except for 'acts of
armed conflict, hostilities, civil war or insurrection';

· Liability of the operator is limited in amount. Under the Vienna convention the upper ceiling is not fixed;
but it may be limited by legislation in each state.

· Liability is limited in time. Generally, compensation rights are extinguished under both conventions if an
action is not brought within ten years;

· The operator must maintain insurance or other financial security for an amount corresponding to his
liability or the limit set by the installation state, beyond this level the installation state can provide public
funds and can also have recourse to the operator;

· Jurisdiction over actions lies exclusively with the courts of the contracting party in whose territory the
nuclear incident occurred;

· Non-discrimination of victims on the grounds of nationality, domicile or residence.

States with a majority of the world's 440 nuclear power reactors are not yet party to any international
nuclear liability convention, and each State relies on its own arrangements.

Beyond the international conventions, most countries with commercial nuclear programmes also have
their own legislative regimes for nuclear liability which vary from country to country. There are three
categories of countries in this regard:

· Those that are party to one or both of the international conventions and have their own legislation;

· Those that are not party to an international convention but have their own legislation (notably USA,
Canada, Japan [ Images ], South Korea);

· Those that are not party to a convention and are without their own legislation (notably China).

This Observer Research Foundation brief has been prepared by eminent lawyer and corporate
counsel Manoj Kumar and energy sector expert and senior fellow at the ORF, Lydia Powell

Stay tuned for the second part which discusses at length the loopholes of the Nuclear Liability
Bill, 2010.
Manoj Kumar and Lydia Powell

by babu (View MyPage) on Aug 26, 2010 06:46 AM

N-power is very helpful for India as it will help solve the problems of Fuel, power etc as Nuclear power is
cheaper and Environment savvy . The LEFT and BJP being a Communist Party, will always be crying like a
baby saying "They sold our country to the U.S." etc. But they dont even know what is this Nuke Deal all about.
They wont even know the full form of IAEA.

ndustrial Disaster Regime

by Govind Lal (View MyPage) on Aug 26, 2010 09:00 AM

The article goes with the suggestion for an industrial liability regime. It is the duty of the state to promulgate a liability
regime in case of Industrial disaster. In India we do not have one with clear definitions and recommendations. It is
good to think of enacting a LAW for this purpose. India can enact this LAW any time. Naturally all industries working
in the country should come under the purview of this LAW. It comes under the SOVEREIGNTY of state. The Nuclear
Plants working in the country also will come under this LAW. When a comprehensive LAW is made for industrial
disaster the Liability Bill passed on 25.8.2010 now can be annulled.
The study mentioned elaborately about the feasibility of Uranium energy. Have they assessed the total availability of
Uranium deposits in the world? It is not a satisfactory judgement to support the nuclear energy.
The 123 agreement and Hyde act stand as tumbling block in development 'NUCLEAR TECHNOLOGY' in India. India
cannot move an inch against the US laws. India has signed the treaty submitting to this process.
There is no logic that any state that has not signed any international treaty to insist another country to be part of
another international treaty. It is funny!!!
It seems the details of death furnished by the author in Chernobyl is not true. The truth is that it is kept a secret in
line with an agreement signed between WHO and IAEA. I remember to have read the death toll at two lakhs. Truth
has to be verified.