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India moves to cap nuclear liability

Step would allow US investments

By Rama Lakshmi
Washington Post / May 8, 2010

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NEW DELHI — A controversial law to establish a compensation system for nuclear accidents — a key step to allowing American companies to set up reactors in India — was introduced in Parliament yesterday, as opposition lawmakers accused the government of favoring US and business interests over the rights of the people.

Opponents chanted “shame, shame’’ as minister of science and technology Prithviraj Chavan moved the Civil Liability for Nuclear Damage Bill in the lower house of parliament. They then left the chamber in protest.

“We tried our best to bring changes to this bill, but because of the stubborn attitude of this government, we have decided to walk out,’’ said Sushma Swaraj, a member of the main opposition Bharatiya Janata Party. Other members called the bill “illegal’’ and “unconstitutional’’ and accused the government of acting under American pressure.

The opposition lawmakers said the bill takes away victims’ right to bring compensation claims to court in the event of a nuclear mishap.

After yesterday’s walkout, a government official said the government may agree to defer voting and refer the bill to a review committee of lawmakers.

The bill, which has been the subject of heated debate for months in India, seeks to place the burden of damages solely on the nuclear plant operator and not on suppliers of equipment. It is controversial for Indians because it renews troubling memories of compensation battles in the aftermath of a poisonous gas leak from the Union Carbide factory in Bhopal in 1984.

The liability legislation is one of the last steps needed to fully activate a landmark civilian nuclear agreement between India and the United States that will allow American companies to set up reactors in India.

The 2008 nuclear accord allows India to access global nuclear technology and fuel supplies after more than three decades of international boycott, after the Indian atomic test in 1974.

With the help of American, French, and Russian nuclear companies, India hopes to fortify its power-starved emerging economy by generating 63,000 megawatts of nuclear power by 2030 — up from 1,700 megawatts currently. Tens of thousands of jobs would be created in both India and the United States, proponents say, generating business worth more than $100 billion.

But India, a nuclear power for more than 30 years, has no legislation to cover claims in the event of a nuclear accident.

Until India passes a liability law, American companies such as GE and Westinghouse cannot begin operations there, even though two sites have been set aside for nuclear plants supported by American technology.

Critics say the bill places legal liability for mishaps on the state-run operator of the plant, the Nuclear Power Corp. of India, and not on the private suppliers and contractors.

The bill places a compensation cap of $100 million on the state-run operator and allows compensation directly from the Indian government of up to $450 million.