Friday, March 18, 2011

Who would be liable for a Japan-like nuclear accident in India?


As we know, the Nuclear Suppliers Group (NSG) removed the ban on India's participation in international nuclear trade in September 2008. This happened after intense lobbying by US. A month later, India rewarded US by signing an agreement with the United States and opening up it’s civilian nuclear energy program worth $ 150 billion for US investments. The market is huge as right now India produces just above 2% of its total energy from nuclear plants and would like to increase that many fold in next few years to meet the needs of its growing economy. India has 20 nuclear reactors operational at 7 nuclear plants. See the map. Apart from upgrading these, it has already permitted a few other new plants after the ban has been removed.

US companies such as General Electric Co. and Westinghouse Electric Co. which design and manufacture nuclear reactors are supposed to be the biggest beneficiaries. India then moved ahead to set up a regime in place to govern the civil nuclear program. As part of this, it passed the The Civil Liability for  Nuclear Damage Bill last year. In context of the Japanese nuclear crisis and debate about who should shoulder responsibility for the crisis, this ball now assumes significance. India’s Nuclear damage liability bill lays down the framework for responsibilities on part of nuclear manufacturers, suppliers and operators of the nuclear power plants.

Who is liable for the damages of Japan’s nuclear accident?
It is to be noted that in the present situation in Japan, General Electric (GE), the designer and manufacturer of the Fukushima reactors now leaking radiation, faces no risk of liability in Japan even if a design flaw is proved to be the reason behind the failure. Tokyo Electric Power Corporation (TEPCO) - the operator of the nuclear power plant - will have to bear all liability. TEPCO’s maintenance was not the reason for the accident. In fact the reactor site survived the quake and the tsunami. TEPCO’s workers are now risking their lives to control radiation. It is clear the design of reactors’ cooling water system was flawed and so got disrupted. Even if this is proved in investigations in coming months, GE is not liable for damages.

What does the Indian nuclear liability law say?
Almost all countries using nuclear technology framed similar rules that exempt the suppliers from liability. India was obviously under pressure to frame similar laws both from suppliers of the NSG as well as India’s private corporations who would eventually enter the business of building and operating private nuclear plants. While the Indian government caved in, it ‘dressed up’ the words in the bill to pretend that in case of a nuclear accident, the operator of the plant has a ‘right of recourse’ against the nuclear supplier. A right of recourse is a procedure of shifting responsibility of paying damages on to the nuclear supplier. This usually happens when, after the nuclear accident, the operator sues the supplier for damages. The Indian act pretends to support the operator. But has put in clauses which are enough to disable this ‘right of recourse’.

Section 17 of the bill says:
The operator of a nuclear installation shall have a right of recourse where
(a)  such right is expressly provided for in a contract in writing;
(b) the nuclear incident has resulted from the wilful act or gross negligence on
the part of the supplier of the material, equipment or services, or of his employee;

Implications of the clauses:
So clause (a) tells us the right to recourse can be excluded through a carefully crafted contract. And clause (b) tells us that even if the contract stipulates, unless the accident is due to ‘wilful act or gross negligence’, the supplier is not liable. This is weak ground as the supplier can claim there was no precedent for the accident due to a design flaw and so they did not ‘wilfully’ cause the accident. For instance, the Jaitapur nuclear plant in India is going to house a reactor which has never been used anywhere in the world. If an accident happens, Areva, the supplier, can’t be blamed they ‘wilfully or negligently’ caused the accident.

Obviously, with the clauses the operator stands liable. Right now, only public-sector Nuclear Power Corporation of India Limited (NPCIL) operates the plants. So the Government ends up paying for liabilities with tax-payers money!

The bill shows ‘foresight’ about future private participation in operating plants and taken care of that too. It says in Section 5: 
 (1)  An operator shall not be liable for any nuclear damage where such damage is
caused by a nuclear incident directly due to—
(i)                a grave natural disaster of an exceptional character; or

So in an earthquake or a tsunami kind of situation, even the operator is not liable. So the government pays up, again. 

How the law favored the suppliers & operators while leaving out potential victims 
Additionally, the liability in any nuclear accident is capped by section 5 which says ‘..the liability of an operator for each nuclear incident  shall be rupees five hundred  crores… such liability shall not be decreased less than rupees one hundred crore…’.

The Kovvada nuclear plant with 6 reactors on the coast of Andhra Pradesh is said to be costing around Rs 75,000 crores. In case of a catastrophic quake or tsunami, there would be zero liability on part of the suppliers and the operators. The government will have to pay up. The nuclear damage bill, despite the experiences of Bhopal gas tragedy, has been insensitive to victims of nuclear accidents while going full throttle to open up a lucrative $ 150 billion market for multi-nationals.

5 comments:

Anonymous said...

nice article & analysis

chomskyist said...

The chances of a Richter scale 9 earth quake Occurring in India ,i think are similar to that of an Football- ground sized Asteroid hitting Our country.

The Nuclear reactors in Japan were Old 60's designs and even then they Performed remarkably well as There was No Total- Meltdown of the Reactor Core, which could be classified as Catastrophic failure.
The reactors they are building in India are using the latest technology, so their safety features will be Much Much more Robust. That Said India has a Culture of Lax Industrial safety Standards Subject to Corporate Greed, So the Safety Standards must be Certainly Reviewed.

But the Environmental and economic Costs of Using thermal and Hydel power instead of Using Nuclear energy because of Mass Paranoia about Nuclear Technology will be High.

The disposal of Used Nuclear Fuel is a bigger Headache than the Safety of operating nuclear plants.

Amar said...

/The chances of a Richter scale 9 earth quake Occurring in India ,i think are similar to that of an Football- ground sized Asteroid hitting Our country.
../

When we frame a law, the probability of it being used or not used should not influence the seriousness of the exercise. And probabilities are what they are, not surities, as Japanese found out.

/The reactors they are building in India are using the latest technology, so their safety features will be Much Much more Robust.../
The Jaitapur reactor is untested. The first of its kind. Maybe we shouldn't prefer so latest!
Other reactors in India still relies on water boilers, coolant system of which caused the present crisis.

/That Said India has a Culture of Lax Industrial safety Standards Subject to Corporate Greed, So the Safety Standards must be Certainly Reviewed./

This is the point I am making. I am not questioning use of nuclear power.

/The disposal of Used Nuclear Fuel is a bigger Headache than the Safety of operating nuclear plants./

Agree 100%

chomskyist said...

<<<Other reactors in India still relies on water boilers, coolant system of which caused the present crisis.



The type of coolant used was not the reason for crisis, there are two main reasons:

1. Using of MOX as fuel in one of the reactor, which is a mixture containing Plutonium, which is particularly dangerous.

2. Storing of spent fuel rods in water tanks within the building housing the reactor, most of the radiation leaked was from the storage tanks rather than the reactor core.

Amar said...

@ chomskyist

I am unaware of the first point you mentioned. And I didn't read anything that suggested radiation from spent fuel rods.

All I understood is that the 'heat' is generated due to failure of coolant system as tsunami disrupted the motors pumping water.

Thanks for your input. I will spend some time on it.