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As key world capitals scrutinise the Nuclear Liability Bill, passed by the Lok Sabha on Wednesday, for word on how the new legislation would affect potential civil nuclear agreements with India, a senior Union minister has said that private suppliers could still sign agreements with the Nuclear Power Corporation of India clearly stating that their responsibility ended with the handover of equipment and other material to the operator.
As the government finds new ways to deal with international consternation, a first reading of the Bill -- scheduled to be tabled in the Rajya Sabha on Monday -- indicates that the inter-governmental agreement between India and Russia could become a model for other countries, notably France and the United States, to enter into nuclear commerce with India.
The agreement, signed in December 2008 after the Nuclear Suppliers' Group passed the 123 Agreement, explicitly states that Rosatom -- the Russian nuclear agency that supplies reactors as well as other material -- would not be held liable for any nuclear damage in case of an accident.
According to the agreement, the supplier's responsibility ended upon handing over material to the operator, in this case NPCIL. Now, a senior government minister has said that private vendors could sign similar contracts with NPCIL.
The minister pointed out that in case of a nuclear accident, the operator would immediately pay out Rs 1,500 crore to the victims as compensation. If the damages exceeded that amount, the government had committed itself to taking on the claims -- as was done in the Bhopal gas tragedy -- even as the operator sued the supplier for possible damages.
As for "the supply of material with patent or latent defects or sub-standard services," a phrase contained in Clause 17(b) of the Nuclear Liability Bill that has been subject to huge controversy and several amendments over the last few days, the onus to prove equipment and material defect would lie with the operator, in this case the NPCIL, the minister said.
He pointed out that the significance of the new law was to give real teeth to the financial compensation that would be due to victims in case of an accident. But as far as supplier liability was concerned, the contract between the supplier and the operator would be binding; in case the operator wanted to take the supplier to court to prove "latent or patent defects" he could certainly do so, the minister said.
Interestingly, a Russian government source, who confirmed the minister's analysis of the Bill, pointed out that in Moscow's understanding of the proposed legislation, "Things would not change that much under the new law."
The source pointed out that "from what we understand from Clause 17(b), we (Russia) would not be obliged to pay compensation because there should be a proven reason for a nuclear accident, in case it takes place". The source admitted there was much apprehension in Moscow as the Bill was being debated in Delhi over the last few days, but that an initial reading had allayed their misgivings.
The source said Russia "would not accept any changes" to the 2008 inter-governmental agreement (that pact echoed the 1989 agreement between India and the former Soviet Union, when India was not a de facto nuclear power), adding, "Give us a chance to stick to the same pattern."
Perhaps some of Moscow's confidence stems from the fact that India and Russia have even signed a roadmap of future nuclear cooperation when Russian Prime Minister Vladimir Putin came to Delhi in March 2010, with both sides looking at the supply of as many as 16 nuclear reactors and power plants from Russia -- a total of eight in Kudankulam and another eight at a second site.
The source also confirmed that Russia had asked India to change the site in Haripur, West Bengal, that had been originally allotted because of the "political situation in that state" and because the soil consistency was "unsuitable" for building a nuclear power plant.
As for the inter-government agreement between India and France, signed in September 2008 after passage of the 123 Agreement, India had stated that it would soon pass a Nuclear Liability Bill that would be in accordance with "international conventions."
Asked why India needed such a tough Bill if the supplier would, in effect, have immunity, the senior Union minister said the Bill was necessary to warn foreign suppliers that they would have to be "much, much more careful" with the products that they sold to India.
Asked why suppliers had immunity so far, the minister pointed out that until recently, it was India that was wooing the international community for nuclear plants. Now that the doors for large-scale nuclear commerce had been opened, it was important to have legislation enacted to suit India's requirements, he said.
