Nuclear Liability Bill: Playing Devil’s Advocate

The judicial tragedy following the Bhopal gas incident, has led to many analysts questioning the current clauses in the Liability Bill. The opinion demographic is starting to twist against the government mandate. Skeptics have placed a rhetorical emphasis that the bill if passed, would mean the government has not learnt from the Union Carbide fracas. However, one must realize that if the union government does go through with the bill, it would not have crossed the Rubicon. The bill might actually allow adroit institutional response to grievances in the event of a nuclear catastrophe.

One of the central concerns is the current liability cap at Rs. 500 Crores. First, the cap limits are open to adaptations and may be increased by government notification. The limits are much higher than the financial liability limits in Canada or France. In addition, the bill directs the government to pay a part of the liability. The opposition cites it as a direct burden channel to the taxpayer’s money. The opposition is trivial to the sense that a government channel might allow distribution of liabilities rather deftly, than the case if it had been of the private player’s alone. The current clauses are a welcome depart from the Vienna and Paris convention that majority of the nuclear players had signed. India is not a co-signatory but the current bill is well a cut above those ensured by Vienna and Paris conventions.

News media was rife with concerns during the penultimate court hearings that the Indian government was vulnerable to DOW Chemicals’ rhetoric. DOW Chemical took over Union Carbide following the Bhopal tragedy and an imploding financial bottom line. It lobbied amongst various government quarters to exonerate itself from the inherited debts and to a certain level succeeded. However, the bill places the responsibility on the current operator. The operator would pay for its criminal negligence even if it arises out of faulty equipment. The capped amount would not be open to trial.

Secondly, private players have cajoled the government for a long time to allow Indian private players to the nuclear power sector. There are chances that the government might wield to business groups. In such an event and under the normal scheme of things (if it wasn’t for the present bill), an Indian group would have de facto invited a majority of foreign equity. Following a nuclear tragedy, the overseas player’s recourse, as we have been witness to the past, would be bankruptcy. The Indian players would seek a financial shelter owing to their economic distress. Not with the status quo, the current operator (the current stakeholders) would have to bear the financial responsibility along with the Union Government.

The “Liabilities Bill in the event of a nuclear accident” goes well beyond international rubric. Policy analysts realize that India does rely on nuclear power to tackle its future energy problems. If the bill is amended to include suppliers and procurement agents, the bill would have rose and delivered to the challenge.

Ankit Maheshwari