In her budget speech earlier this month, the Finance Minister slipped in a seemingly unrelated remark: the government plans to amend the Indian nuclear liability act. This was deliberately timed so that the Prime Minister could point to this announcement in Washington, which he is visiting today. Nuclear liability might seem to be an arcane detail but this announcement should concern all of us.
Ever since the Indo-US nuclear deal, the U.S. has wanted India to buy nuclear reactors from American companies. However, there are two problems: (a) these reactors are extraordinarily expensive; the main American reactor on offer is the Westinghouse AP1000 and the last two constructed in America cost $36.8 billion. (b) American companies want a legal arrangement where they are completely indemnified from the consequences of an accident! (Similar comments apply to multinational companies from countries like France.)
In 2010-11, the UPA government created a law to appease the U.S. This law overrides the Indian “absolute liability” framework for hazardous enterprises. It channels any liability for an accident to the operator, which is an Indian public sector company and caps the liability at an absurdly small amount. However, due to pressure from civil society and the opposition, the UPA government was forced to include a clause called the “right of recourse”, which allows the operator (but not the victim) to sue the reactor manufacturer if the accident was caused by a design defect. The US has been furious about this clause ever since and, partly for this reason, its companies have been unable to sell in India.
This is an excellent outcome! It has saved us from several Enron-type deals: had India bought these reactors, we would have been paying for them for years, with this money lining the pockets of U.S. companies. The fact that no such reactor has been imported in almost two decades is a significant success of peoples movements that have pointed out their problems.
It now appears that the Modi government has announced its intention to bend the knee and amend the law to please Washington.
In today’s Hindu, Ramana and I wrote about the implications of this potential amendment and what it reveals about the government’s priorities. https://www.thehindu.com/opinion/lead/nuclear-energy-dangerous-concessions-on-liability/article69211997.ece