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Disturbing echoes of Bhopal in Nuclear Liability Bill

By Business Standard
March 12, 2010 10:44 IST
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Twenty-five years ago, thousands of Bhopal residents fell victim to a gas leak from a local Union Carbide plant. Five years later, the Supreme Court put its imprimatur on a deal between Carbide, the government and others, setting Carbide's liability at $470 million, which sum Carbide soon handed over to the government. It took another 17 years for the government to fully spend the money, giving compensation to all the "original" claimants. Thousands of people, who have not received compensation, continue to suffer from the effects of the gas leak. Arguably, Bhopal's aftermath has been a bigger scandal than the original accident.

There are disturbing echoes of this history in the Civil Liability for Nuclear Damage Bill, which the government introduced in Parliament earlier this week, amidst bedlam over the reservation of seats for women.

The Bill not merely limits the civil liability of any company running a nuclear power plant to Rs 500 crore per accident (less than a quarter of the dollar equivalent of the Bhopal settlement two decades ago), with an overall cap of 300 million SDRs (roughly Rs 2,100 crore); it also exonerates international companies that supplied the equipment and technology. No equipment supplier in any other industry has such exemption from liability, and no other industry functions with such a cap on the operator's liability.

It is argued that without such a Bill, no private international suppliers will be willing to enter the Indian nuclear market. It is also argued that the proposed law adopts the most stringent norms adopted in such laws elsewhere.

These are at best partial truths; the absence of such a Bill has not prevented Russia (and perhaps France) from supplying nuclear equipment. And neither Russia nor Germany (to cite two examples) accepts any cap on liability. Critics also argue that the Bill confuses between liability and compensation; they aver that the cap that exists elsewhere is on compensation, not liability.

Meanwhile, a legal luminary has argued that the proposed law will violate the Constitution, and run afoul of existing Supreme Court judgments. The principle that the Bill flouts is the accepted one that the polluter pays; what the Bill proposes to do is to tell General Electric and Westinghouse that they can do business in India, with no price to be paid for the consequences if they sell defective equipment or technology. Why the people of India should give such a guarantee to the shareholders of large US corporations is something that the government needs to explain.

All these issues place some large question marks over the Bill as presently framedĀ -- especially when the proponents of nuclear power have argued for decades that it is a safer form of power than any other.

The nuclear power industry is, of course, a hazardous one, but it is not very accident-proneĀ -- with just three major accidents, in 1957 (Windscale), 1979 (Three Mile Island) and 1986 (Chernobyl).

Operators are asked by the Bill to take out insurance for the specified amounts, so why can't giant US equipment/technology suppliers be asked to do the same, and the liability limits multiplied manifold, without impacting in any significant way the cost of a nuclear power project?

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Business Standard
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