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Mortgaging India
UPA’s mishandling of nuclear liability law

The late September visit of the Indian Prime Minister Manmohan Singh to USA was marked by the signing of a preliminary commercial agreement with USA for a civilian nuclear power project in a “great hurry.”

What are the terms and conditions covering the deal that India’s state owned Nuclear Power Corporation of India Ltd (NPCIL) had entered into with the Westinghouse of USA for the setting up a mega nuclear power project in India, no one is sure as yet.

Even so Singh, over- eager to please the ruling elite in Washington observed that, “We have made enormous progress on the issue of civilian nuclear power and in fact we have been able to achieve just in the last few days an agreement on the first commercial agreement between a US company and India on the civilian nuclear power”.

But then as the greatest surprise there were no words on the Indian nuclear liability clause which the US nuclear power industry had all along been opposing tooth and nail. Does this mean that UPA dispensation is ready to sell India’s “nuclear sovereignty to USA” without a public debate in the country? Both the ruling dispensation in New Delhi and the Department of Atomic Energy (DAE) based in Mumbai are liable to enlighten the public as to whether the nuclear liability clause will be enforced in the final agreement to be clinched before installing the US origin nuclear reactors in the country.

Embroiled in a spate of shocking “scams and scandals”, the Indian Government led by the Prime Minister Manmohan Singh seems to have lost its perspective in terms of safeguarding India’s long term national interests.

American pressure

In yet another instance of the far from transparent functioning of the UPA (United Progressive Alliance) government, an attempt on sly was made to dilute the stringent section 17(B) of the Civil Nuclear Liability Law under pressure from the American suppliers of nuclear reactors. However following media exposure and public outcry, an official spokesman in New Delhi said that there was no move to dilute the civil nuclear liability law.  

All said and done, there is no denying the fact that that western suppliers of nuclear reactors to India are keen on the dilution of the stringent Indian nuclear liability law under which  there is a provision for a huge compensation in the event of accidents or mishaps affecting the civilian population and  disrupting the environment. Clearly and apparently, foreign suppliers of nuclear reactors to India want to tap the lucrative Indian civilian nuclear energy market without any “obligation or responsibilities” associated with the operations of a nuclear power generation system .Indeed they want to eat the cake and have it too.

In fact, not long back media reports had  suggested that the UPA government was  in a great hurry to enter into a preliminary contract with the US based nuclear reactor major Westinghouse without going into the knitty-gritty of the liability law and evaluating  the safety of the project  to set up six 1,000-MW nuclear power reactors in Gujarat.

It was a leaked note from the Cabinet Committee on Security (CCS) which revealed the shocking fact that in flagrant violation of well established practice, there was a plan to seek CCS approval by circumventing the Atomic Energy Department (DAE) whose opinion and clearance is mandatory for the setting up of any nuclear power project in the country.

“Given the paucity of time, approval of the Atomic Energy Commission could not be taken and instead approval of CCS is being solicited directly,” said the note. However, following an uproar in the Indian Parliament, the Government initiated a face saving act.

Consequently, a statement from Department of Atomic Energy (DAE), perceived as a damage control exercise, said, “The contract if approved will not bind NPCIL to enter into a contract with Westinghouse for the supply of reactors without establishing safety and techno commercial viability. The contracts, which will have to be approved by the competent authority of the Government, will be fully consistent with the Indian law”.

Rushing to the defence of UPA Government, External Affairs Minister Salman Kurshid noted that “Laws are framed by the Parliament and nobody can overrule it. This is impossible. The Government will act according to the law of the land and not take any decision which is against the interest of the country”. But then whether this commitment would translate into a reality, only time will tell.

As it is, the Section 17(b) of Civil Liability for Nuclear Damage Act penalises suppliers if an accident is traced back to faulty products or services. International environmental NGO Greenpeace is of view that even if there was no right to recourse written into the contract, 17(b) if the accident was caused by faulty material or equipment provided by the supplier adequate compensation could be claimed. “Hence, irrespective of the written contract, the right to recourse and the liability of the supplier will apply if there is a supply of faulty material or equipment,” says Greenpeace Executive Director Samit Aich.

Rightly and appropriately, senior BJP leader Murli Manohar Joshi has accused the UPA government of “almost mortgaging the Indian interests” to USA. He was clear that the nuclear reactors should be established on India’s terms but the government seemed to be determined to support American companies. “We are surrendering our sovereignty on nuclear issue to US agencies” said Joshi. Though the six nuclear reactors are expected to cost a whopping Rs 300,000 crores, the value of the preliminary contract has not been revealed.

Over the next two decades India has a plan to boost   its nuclear power capability by adding nearly 30 reactors. Major opposition parties have alleged that the Government of India fell back upon the opinion of the Attorney General to waive the liability clause for the foreign suppliers. The ruling dispensation in New Delhi should have sufficient wisdom and foresight to differentiate between the legal opinion and the actual ground reality.

Compromising security

For long USA has been critical of India’s people friendly liability law covering the nuclear accidents and mishaps and this is generally believed to be one of the major hurdles in Indo-US nuclear relationship.  In fact Singh had made the nuclear deal the centrepiece of UPA-1 and in the process staked the very survival of his government. Of course, Singh has been endeavouring to fix the problems with the liability law but with the opposition crying foul he has little manoeuvring space left.

The importance of the nuclear liability act stems from the magnitude of damages associated with the mishaps of nuclear reactors. The Chernobyl and Three Miles island disasters have brought home rather forcefully the serious threat at the heart of nuclear power plants: a hot radioactive core, which improperly handled can break out of steel encasement to ravage life and environment. Hundreds of incidents and accidents involving nuclear power plants keep taking place each year. Though most of them are remedied before they get out of control, the ingredients for a serious accident-operator error and equipment failure remain.

Ronen Sen, who was India’s ambassador to the US between 2004 and 2009 and architect of the Indo-US nuclear deal, seems to be batting for the US interests with this statement, “I wonder how issues become controversial only if they are related to the US”. But then as started by Bharat Karnad, Professor at Centre for Policy research, “Singh seems happy to be in a play scripted by Obama. Among the gifts he will carry to the US is a commercial contract to buy Toshiba-Westinghouse AP 1000 enriched uranium fuelled reactors, with the Indian monies reviving a comatose US nuclear industry even as the indigenous advanced pressurised heavy water reactor programme is starved of funds.”

Indeed, at the instance of the power that is at Washington, the moribund UPA government had pushed the bulk of the dual use natural uranium fuelled civilian Indian reactors into the IAEA (International Atomic Energy Agency) inspection and safeguard net. What is more, India does not enjoy the “rights and privileges” of a nuclear weapon state” promised in the July 8, 2005 Bush-Manmohan Singh Joint statement and the country has failed to gain into  entry into the Nuclear Supplier Group (NSG). To make the matter worse, India has also agreed for a moratorium on the testing of nuclear weapons.

Experience clearly shows that all the deals that India had entered into with USA has turned into a one way street in which USA stands a net beneficiary and India a pathetic loser.

The blind reliance on American defence hardware could imply a serious challenge to the state of India’s military preparedness. And the Indian Government going gaga over the defence deals with USA is nothing but a forerunner to the troubles in store in the years ahead.  For the Uncle Sam has the habit of imposing trade sanctions and technology embargo at the drop of the hat that could render in one fell swoop all the glitzy American fighting equipment unserviceable. With the massive procurement of military hardware from USA, India is helping the US defence industry to stay aloft and that too at the cost of Indian tax payers’ money.

By all means the Indo-US civilian nuclear agreement also called “Agreement 123’ has turned out be a damp squib. This was touted as a veritable magic wand to end India’s energy crisis. Despite the animated talk of many players in India’s energy sector importing nuclear reactors as a follow up to this agreement, to this day not a single reactor of foreign origin has reached India.

Meanwhile DAE has told the US industry that the companies would have to meet the Indian regulatory requirements. DAE has informed the US nuclear energy industry that the cost per megawatt and unit energy cost would have to be competitive with other options. Further, DAE touched upon the escalating protest against nuclear energy in India and told US industry members that they would have to address ideological opposition in this regard and also safety related concerns. To what extent the American nuclear power industry will share the perception of DAE, there is still no clarity.

Opportunist ally

That the US cannot be counted as a dependable ally was proved to the hilt by the sanction that came in the wake of India’s twin Pokhran nuclear blasts of 1998.mFollowing this, many of the establishments under DAE, ISRO (Indian Space Research Organisation) and Defence Research and Development Organisation (DRDO) along with some of the defense public sector enterprises came under the purview of sanctions leading to the technology denial.

Prior to that in 1990s, USA had pressurised India to drop its program of developing the intermediate range ballistic missile Agni. And in 1992, USA had coerced a politically turbulent and economically emaciated Russia into dropping its contractual commitment to transfer the cryogenic engine technology to India.

As per the agreement that ISRO had signed with Russian space outfit Glavkosmos of the erstwhile Soviet Union in late 1980s, Russia was to provide two stages of cryogenic engine stage along with the relevant technology to help ISRO engineer its own cryogenic engine stage for its three stage 415- tonne Geosynchronous Satellite Launch Vehicle (GSLV) capable of hurling a two tonne plus satellite into a geostationary transfer orbit. Subsequently, this deal was diluted to the supply of seven cryogenic engine stages to ISRO to enable its GSLV fly till India develops an indigenous cryogenic engine stage. US argument was that the dual use nature of cryogenic engine brought it under the scope of Missile Technology Control regime (MTCR).

Despite the tall talk of Indo-US strategic initiative, India is not allowed to launch a commercial class US made satellite or a commercial satellite carrying US made components by making use of its launch capability. On the other hand, USA is making all out efforts to sell military hardware to India with the sole objective of keeping its defence industry alive and kicking. Like the earlier dependence on the Soviet Union for military hardware that proved “costly and troublesome”, the reliance on Uncle Sam for meeting the defence requirement of the country cannot but be an invitation to “roadblocks and hindrances” in the years ahead.

There are allegations that the reactors that India would be buying from USA are untested and promise of their high level of safety is nothing but a poorly substantiated claim. Further the worry over the commercial side is that the power generated by this type of reactor would be pretty expensive.

As Suvrat Raju and M V Ramana, physicists associated with Coalition for Nuclear Disarmament and Peace say, “The reluctance to accept the liability is in sharp contrast with the claims of safety surrounding the reactors.”

Westinghouse asserts that its reactors are likely to suffer severe accidents less than once in four million yeas. If this was true then given the cap on liability, it would cost only Rs 2 lakh to insure the reactor for its entire lifetime - an absurdly low number. The problem is that Westinghouse bases it claims on a method called “probabilistic safety assessment” that cannot be justified scientifically. By using a standard mathematical technique called “Bayesian analysis”, to extrapolate from the observed pattern of nuclear accident it is easy to show that the Westinghouse figure is almost certainly wrong”.

Despite the great hype on the opening up of the nuclear power sector to private participation in the country, not much progress has been achieved on this front. Clearly and apparently, NPCIL on its own can’t achieve the target that the Government of India has set for it.