[Reader-list] US Pressure on India

[Rakesh Iyer]

Dear all

Please do go through this article. It seems members of the UPA govt have
decided that they deserve to be bought and enjoy, at the cost of the public
of course.

Regards

Rakesh

Article:

Outlook Magazine


   Pallava Bagla/AP
The Kalapakkam MAPS reactor building; A post-explosion view of the Chernobyl
plant
 nuclear energy: compensation
The Spill Bill Is Here
The nuclear liability bill rests only on a clear bias towards foreign
suppliers
 Pranay Sharma<http://outlookindia.com/peoplefnl.aspx?pid=10152&author=Pranay+Sharma>

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  Writing Out An Anticipatory Bail

*What’s the proposed Civilian Nuclear Liability Bill about?*

It seeks to cap the level of compensation (likely at $450 million) in the
event of an accident and makes the operator, not the supplier, liable for
it.

*Are the operator and the supplier different?*

Yes, the Nuclear Power Corporation of India will be the operator; the
suppliers are big foreign companies like America’s GE and Westinghouse and
France’s Areva.

*Is the supplier liable to pay compensation?*

No, it’s exclusively the operator’s liability, though it can enter into an
agreement with the supplier to share the burden of compensation.

*Why a cap on compensation?*

Insurance companies don’t provide cover for unlimited liability.
Compensation over and above the fixed amount will be the Indian government’s
responsibility.

*Why do critics feel the bill favours American companies?*

Unlike the French and Russian firms, which are either fully or partly owned
by the government, the US companies are all privately owned. Had the
supplier been made liable, these companies would have found it difficult to
get an insurance cover—even for a compensation of $450 million. In contrast,
French and Russian companies have their governments to bail them out.
Without this legislation, American companies would have been muscled out.

*What is the government’s stand?*

Unless there’s a domestic liability regime, no foreign company will invest
in the civil nuclear field. Without it, India is unlikely to be eligible for
other funds from foreign bodies if a nuclear meltdown or a major accident
takes place.

*Is a compensation of $450 million adequate?*

Certainly not. For instance, the compensation paid by Union Carbide to the
victims of the 1984 Bhopal Gas Tragedy was just $470 million, according to
one estimate, it amounted to nine cents per day per person over the 19 years
since the incident occurred. Initial official death toll was 3,000;
subsequent deaths were nearly 15,000; people disabled permanently totalled
50,000. A nuclear disaster will have much wider and far-reaching negative
consequences than what happened in Bhopal.

*The worst nuclear accident:*

Chernobyl disaster, Ukraine, 1986. Over 50 people died at the plant. An
estimated 65,000 died from Chernobyl over the years; 400,000 people from
neighbouring areas of Ukraine, Belarus and Russia were evacuated and an
“exclusion zone” of 3,000 sq km was created and deemed off limits for human
habitation for an indefinite period.

***

The Indo-US nuclear deal simply refuses to go away, goading activists to
engage in a furious debate over a contemplated legislation. Called the Civil
Nuclear Liability Bill, it’s considered imperative to lure foreign players
into the lucrative civil nuclear energy sector. But its provisions have
raised serious questions over the government providing access to foreign
nuclear companies, particularly those of the United States, to the Indian
market without holding them responsible for the severe repercussions of any
accident. This debate also has the echo of that familiar question: is
nuclear energy a viable option for India?




“A nuclear accident could occur due to faulty equipment or design, so the
supplier should be made liable.”



There are two contentious aspects of the proposed bill. One, it proposes to
cap the level of compensation at $450 million in the event of an accident at
a nuclear facility. Two, the responsibility for paying this compensation
will rest on the operator (likely to be the Nuclear Power Corporation) and
not the supplier or foreign companies building and installing reactors in
India. “Even from the free market point of view, such a proposal is totally
flawed,” says writer-activist Nityanand Jairaman. His argument: since an
accident in a nuclear plant could take place because of faulty design or
substandard equipment, the supplier too should be held liable.

But the Indian industry thinks otherwise. A recent FICCI working group
report on civil nuclear energy, chaired by Nuclear Power Corporation
chairman S.K. Jain said, “It’s advisable that the liability for nuclear
damages in India be solely attached to the operator of the nuclear
installation. The rationale is further augmented by the fact that any
activity, whether in respect of supply or services, is being utilised for
the operator and not otherwise.”

In a nutshell, this means the supplier—foreign companies like France’s Areva
SA, Russia’s Rosatom Corp and US giants GE and Westinghouse—will reap huge
profits by setting up nuclear reactors and selling their technologies, but
will not be required to pay compensation in case of a nuclear accident at
their plants. It will also be the operator’s liability to seek insurance
cover for a maximum limit of $450 million. Compensation over and above this
amount would be borne by the Indian government. The FICCI report, however,
adds a caveat—the operator and supplier could enter into a private contract
to share the compensation burden.

Says Praful Bidwai, writer and a member of the Coalition for Nuclear
Disarmament and Peace, told *Outlook*, “This is being done under the
combined pressure of the US and Indian industry, both of which are keen to
get a share of the Indian civil nuclear energy pie.” However, the Department
of Atomic Energy (DAE), responsible for formulating the proposed
legislation, says putting a cap on compensation is an international
practice. The reason, say DAE officials, is simple—a nuclear accident can
cause colossal damages and raise demands for inconceivable compensation
amounts. Typically, insurance companies are not willing to underwrite
unlimited compensation. Consequently the cap.

But why absolve the supplier from liability? Activists allege this proviso
has been introduced to enable the American companies to enter the Indian
market. It’s easy for the French and Russian companies, which are either
completely or partially owned by their governments, to buy an insurance
cover for the earmarked $450-million. Since the two US companies are
privately owned (though Japanese firms now have major stakes in them),
finding an insurance cover would have been a gargantuan task. Without the
bill absolving the supplier of liability, the Americans run the risk of
being edged out of the Indian market, estimated to be worth over $200
billion.

“We’re only trying to create a level playing field,” justifies a South Block
official, saying the legislation will help attract investment in the civil
nuclear energy sector. Critics, however, accuse the UPA government of
favouring the Americans who, during US secretary of state Hillary Clinton’s
recent visit, managed to secure a site each in Andhra and Gujarat for
nuclear plants (worth $10 billion) based on US technology.

Interestingly, three international conventions—the Paris Convention (1960),
the Vienna Convention (revised in 1997) and the Convention on Supplementary
Compensation for Nuclear Damage (CSC)—also attempt to provide such indemnity
to the global nuclear industry. The CSC, however, hasn’t yet come to force
as it has been ratified by only three countries. Arguing that it is
essential to have a CNL (Civil Nuclear Liability) framework to attract
foreign investment and technologies in the civil nuclear energy field, DAE
officials also hold out the imminent possibility of India signing and
ratifying the Vienna Convention and the CSC. They feel this could help India
access larger and “multi-layered” compensation from international sources.

But critics say the funds generated through these measures would hardly
suffice, pointing to the scale of damage wrought by the Chernobyl nuclear
disaster to bolster their point. Closer home, activists point to the
experience of the 1984 Bhopal gas tragedy and say the $470 million as
compensation was grossly insufficient (see infographic). “It’s unfortunate
that a negative lesson is being learnt from the Bhopal gas tragedy,” says
Satinath Sarangi of the International Campaign for Justice in Bhopal. He
feels the $450-million cap and transfer of liability to the operator has
been done because American companies, after their experience in Bhopal, are
wary of entering the Indian civil nuclear market unless they receive
guarantees of not being held culpable in an accident.

The resistance to the bill, the draft of which is ready, has set the stage
for the Opposition to accuse the UPA of succumbing to “US pressure” yet
again.