N-compromise a liability, will kill local reactor programme

The nuclear compromise approved by Prime Minister Narendra Modi and President Barack Obama is as much a financial liability for the Indian people as the 2008 civilian nuclear cooperation deal with the United States is a strategic millstone round the country’s neck, and contravenes the Civilian Nuclear Damage Liability Act 2010. First the Congress Party-led coalition regime and now the Bharatiya Janata Party dispensation at the centre, busily explored every possible avenue to circumvent the 2010 Act. The proposed solution, however, seems only to be a means to get a troublesome issue gumming up the bilateral ties off the table, and induce wary American companies, uncertain about their financial obligations but drawn, like moths to a flame, by the prospects of lucrative sales to risk supplying nuclear reactor technology to India.

The compromise was reached by forcing the Indian liability law into the straitjacket of the Convention on Supplementary Compensation, which channels all liability to the operator. Also, an “insurance pool” has been contrived with contributions totaling Rs 1,500 crores from the public sector General Insurance Corporation and other insurance companies and the Indian Exchequer to cover liability obligations. In short, the Modi-Obama solution ensures miniscule compensation in case of nuclear disasters potentially affecting hundreds of thousands of people in densely populated areas and billions of dollars in property damage by dumping all liability into the laps of the Indian taxpayer while zeroing out the financial responsibility of supplier companies selling untested, unproven, and unsafe nuclear reactors. Because no nuclear reactor has been installed in the US since the 1979 Three Mile Island mishap, India will become the testing ground for new American reactor technology and leverage to revive the US nuclear industry.

The 2010 Act, voted with the 1984 Bhopal gas tragedy in mind, was meant to prevent precisely such outcomes. But it has been undermined by creatively interpreting some of its provisions. Thus, Section 17(b) which talks of the operator’s “right of recourse” in case of “supply of equipment or material with patent or latent defects or sub-standard services”, which comprehensively shuts down all escape routes to technology suppliers, is viewed by MEA, as only another “normal element of a contract”. It further clarified that Section 17 renders the right of recourse a function of the operator’s whim in writing contracts with supplier firms and, if by some oversight it is included in the contract, leaves it to the operator to “exercise” it or not! Meaning, the sole Indian operator the public sector Nuclear Power Corporation of India Limited can, on its own, decide to absolve foreign companies of any responsibility for supplying flawed reactor designs and technology that could lead to accidents while transferring all liability to the Indian state and taxpayer. Likewise, compensation claims on supplier companies by individuals dissatisfied with the pittance given by the government, are disallowed. Next MEA torpedoed Section 46 of the 2010 Act by impugning India’s sovereign right to legislate measures, including in the future to retroactively affect contracts NPCIL signs with supplier firms voiding the latters’ immunity from liability. This is particularly galling considering India was targeted by US Congress’ retroactive legislation post-1974 nuclear test that stopped fuel supply to Tarapur reactors.

Imported enriched uranium nuclear reactors are the worst possible option from every angle. It will create a nuclear spares and fuel dependency, starve the indigenous natural uranium reactor program and the development of the follow-on breeder and thorium reactors per Bhabha’s three-stage 1955 plan to achieve energy self-sufficiency of funds because the exorbitantly-priced foreign reactors (at $6-$9 billion per 1,000MW plant) will corner all the monies, negate the possibility of exporting Indian-designed reactors to developing countries and earning revenue and, with the promised entry into the Nuclear Suppliers Group, tighten the nonproliferation noose. Meanwhile, the impossible target of 63,000 MW of nuclear energy by 2032 will, like Manmohan Singh’s “20,000 MW by 2020”, remain a mere slogan.

[Published in the Economic Times, February 10, 2015, at http://blogs.economictimes.indiatimes.com/et-commentary/n-compromise-a-liability-will-kill-local-reactor-programme/

About Bharat Karnad

Senior Fellow in National Security Studies at the Centre for Policy Research, New Delhi, he was Member of the (1st) National Security Advisory Board and the Nuclear Doctrine-drafting Group, and author, among other books of, 'Nuclear Weapons and Indian Security: The Realist Foundations of Strategy', 'India's Nuclear Policy' and most recently, 'Why India is Not a Great Power (Yet)'. Educated at the University of California (undergrad and grad), he was Visiting Scholar at Princeton University, University of Pennsylvania, the Shanghai Institutes of International Studies, and Henry L. Stimson Center, Washington, DC.
This entry was posted in Asian geopolitics, disarmament, domestic politics, Geopolitics, Great Power imperatives, India's strategic thinking and policy, Indian ecobomic situation, Indian Politics, nonproliferation, nuclear industry, Nuclear Policy & Strategy, nuclear power, society, South Asia, Strategic Relations with the US & West, Technology transfer. Bookmark the permalink.

3 Responses to N-compromise a liability, will kill local reactor programme

  1. Atul says:

    Have you seen these details of India-Australia nuclear agreement hearing by JSCOT?
    . The next JSCOT hearing is tomorrow at 3.30 PM.

    Will India agree to revise the treaty with Australia and put additional safeguards in the treaty or later in administrative arrangements, as is being suggested? Aussie experts seem quite confident that initially Indians would not agree, prevaricate or stall but in the end, they will have no choice because Australian safeguards are “GOLD STANDARD” !!!!. I am wondering what MEA.. rather DAE thinks about this deal and how far Modi government can dilute the Indian position in Indo-US Nuclear Agreement ???

  2. Atul says:

    The link didn’t come in previous post. Here it is : http://tinyurl.com/lepkscu

  3. Many thanks, most revealing!

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