Nuclear bill unclear on criminal liability

By Gopal Krishna
14 Jan 2010

The proposed legislation to fix liability for nuclear damages intends to provide a legal protection to multinational nuclear suppliers and to shift the burden on the public sector operators of reactors in the event of a disaster.

The Civil Liability for Nuclear Damage Bill, 2009, (CLND Bill) proposed by the UPA government is ridden with glaring loopholes and booby traps because it insulates nuclear energy companies from punitive legal consequences. It seems the people who drafted this Bill were not aware of the Report of the US President's Commission on The Accident at Three Mile Island that happened in 1979.

The Union Cabinet, in a hastily convened meeting, cleared the text of the CLND Bill on November 19, 2009, just before Prime Minister Manmohan Singh's US visit, for introduction in the Parliament. Such haste clearly exposes the pressure nuclear power companies have been putting on India through US government. The govt hopes passage of the CLND Bill will allow India to join the international convention on civil liability for nuclear damage. So far this Nuclear Bill is not in public domain.

To begin with, the bill should be renamed as Liability from Nuclear Damage Bill and the government must explicitly inform the parliament and the citizens what lessons from the Three Mile Island Accident Report have been incorporated in the Bill. Mere civil liability is totally unacceptable because it has not factored in all the nuclear accidents which have happened in India and the world. Most importantly, before a Bill of this nature is brought in, central government must come out with a white paper on the status of relief to radioactive radiation victims and the liability therein with regard to existing facilities. The Bill must also include mining sites of radioactive minerals like uranium in its definition of nuclear facility.

While placing a cap on the compensation to be paid in the case of an accident at a nuclear site, the proposed legislation puts the responsibility for paying this compensation on the reactor operator (read Public sector companies) and not on the foreign suppliers installing the reactors in India. This has been an old demand of the Multinational Corporations like Union Carbide and Dow Chemicals. Certainly, this provision is not in public interest. Nuclear power companies in general and US nuclear companies like GE Hitachi Nuclear Energy, Westinghouse and Babcock & Wilcox intend to invest in India only if they are provided anticipatory bail for their legal liability for nuclear accidents in future. US Assistant Secretary of State for South and Central Asian Affairs Robert Blake informed a US House committee: "… we are hoping to see action on nuclear liability legislation that would reduce liability for American companies and allow them to invest in India…"

US nuclear industry has been pampered by special laws made by the US government that limit their liability from nuclear radiation accidents. It wishes to be operated under the laws proposed and shaped by the industry itself. It is important to note that US companies which are part of US commercial nuclear mission to India organised jointly by the Nuclear Energy Institute and the US India Business Council (USIBC) recently informed media that they were satisfied with the contents of the Bill and were in active discussion with Nuclear Power Corporation, Tata Power, GMR, Jindal, NTPC, L&T to explore business potential. Clearly, the US nuclear companies have seen the Bill (might have drafted it as well) much before it is to be tabled in the Indian Parliament.

Notably, Federation of Indian Chambers of Commerce and Industry's (FICCI) 25 member Working Group on Civil Nuclear Energy-2009 came out with a 57 page report wherein lies the basis of the proposed 'The Civil Liability for Nuclear Damage Bill, 2009'. The FICCI report has an annexure "Domestic Legislation Dealing with CNL" (Civil Nuclear Liability) wherein it states, "As a natural corollary to the liberalization of the nuclear sector in India, the government of India is mooting the idea of a CNL Bill. Aligning to any international CNL treaty would involve the enactment of a domestic CNL legislation with appropriate provisions. There being no explicit statute or legislation in India, either creating or limiting liability of persons engaged in nuclear installations till now, liability would stand determined by courts, pursuant to actions in tort."

FICCI suggests 'domestic legislation dealing with CNL' may incorporate the following: Single point liability for the operator of the nuclear installation ("Operator"); Liability of non-operators transferred to the Operator; Exceptions to liability to include standard force-majeure provisions with specific emphasis on terrorist and anti-social activities; Capping of liabilities according to internationally adhered benchmarks may be adopted with the government prescribing the threshold limit; State liability to provide for claim amounts awarded by a competent court over and above the liability of the operator; Clear and precise definition of 'nuclear incident' and 'nuclear installation'.

It's absolutely essential, "If there was not a cap and if there was not suitable legislation insurance in place, then we wouldn't be in the nuclear industry." Peter Mason, president and chief executive of nuclear supplier GE-Hitachi Nuclear Energy Canada explained to the Parliamentary Standing Committee of the Canadian House of Commons on Natural Resources that is dealing with Bill C-20, their Nuclear Liability and Compensation Act, November 2009.
In the United States, liability for nuclear accidents is set at $10 billion (US), while in Japan the cap will be doubled next year to roughly $1.47 billion (Canadian). Whether a nuclear accident is a $650 million disaster or a multi-billion dollar catastrophe is determined by the direction and speed of the wind that carries the radioactive radiation. Currently, Canada is seized with a Nuclear Liability and Compensation Act wherein the bill raises the cap on liability to $650 million from the $75 million limit established in 1976. The damage from Chernobyl is estimated at some $250 billion. In Germany, there is no cap on nuclear liability but an operator must be able to cover at least $4 billion and the civil liability is estimated at Euro 2000-5000 billion.

The international conventions which provide for liability regime also favour the industry and not the possible victims and provides for indemnity to the global nuclear industry: the Paris Convention (1960), the Vienna Convention (VC) revised in 1997 and the Convention on Supplementary Compensation for Nuclear Damage (CSC).

The CSC limits the compensation payable by the operators of nuclear plants for any accidents or damage to $450 million, leaving the responsibility for the rest to national governments almost in the range of compensation paid to the victims of the Bhopal's industrial disaster ($470 million) wherein victims were turned from citizens into subjects of the ruling regime.

Not surprisingly, in its report FICCI feigns ignorance about all the nuclear accidents in the world and has repeatedly cited the Supreme Court order in the Charan Lal Sahu, Petitioner vs. Union of India, Respondent case in which the validity of the doctrine of parens patriae was upheld but this remains a matter of judicial scrutiny by jurists all over the world. The Petitioner in this case had challenged the validity of the doctrine invoked through Bhopal Gas Disaster (Proceedings of Claims) Act, 1985 in the Supreme Court. The Supreme Court held that the Act was valid and that the State had rightly taken over the exclusive right to represent and act on behalf of every person entitled to make a claim, as a majority of the victims were poor and illiterate. Consequently, the exclusion of the victims from filing their own cases was held to be proper.

It is now well known that 'hazardous corporations' are a fit case for the application of the principle of Absolute Liability and Multinational Enterprise Liability because they are neither 'restricted by national boundaries' nor effectively controlled by international law because of their complex corporate structure with networks of subsidiaries and decisions which make it exceedingly difficult or even impossible to pinpoint responsibility for the damage caused by the enterprise. They operate through a neatly designed network of interlocking directors, a common operating, distribution & marketing systems, design & technology, financial & other controls and highly sophisticated machines & working staff. Consequently, victims of such enterprises are unable to identify which unit of the enterprise caused the harm. Therefore, faults by even a local subsidiary must be attributed to the parent company because their duty too is non-delegable.

Notably, the Supreme Court also held that the Act only deals with civil liability and as such does not curtail or affect rights in respect of criminal liability. So, the CLND Bill must be redrafted to include both criminal liabilities and deterrent civil liabilities.

Defence Research and Development Canada, the Canadian Department of Defence, has suggested that a severe nuclear accident results in wide contamination. The research conducted by it looked at the impact of a relatively small dirty bomb going off in downtown Toronto. It estimated that cleaning up the contamination using the most stringent standards could cost up to $250 billion, and that the economic toll could reach $23.5 billion. This research was commissioned in 2007. However, no such research has ever been commissioned in India.

The institutional accountability for Bhopal and Kaiga like disasters rests with Cabinet Committee on Economic Affairs and the proposed 'CLND Bill' shows that it has not learnt any lessons because it has not been made accountable for its past lapses.

The Nuclear Liability Bill must take note of the environmental hazards from the nuclear facilities and potential nuclear accidents and incorporate stringent criminal and civil liability provisions taking lessons from worst accident at a civilian nuclear power plant in Three Mile Island (TMI) occurred on March 28, 1979 in US and the Chernobyl disaster, a nuclear reactor accident that occurred on 26 April 1986 at the Chernobyl Nuclear Power Plant in Ukraine.

This nuclear accident led to a cessation of new nuclear plant construction in the US. Indian government and the parliament must take lessons from these accidents to avoid legislative and judicial disasters through these Bills which do not have the power to prevent Three Mile Island, Bhopal, Chernobyl & Kaiga like accidents. Parliamentary deliberations in countries like Canada and Germany on liability and nuclear energy issues must be factored in before admitting any Bill under the influence from vested interests in supreme public interest.

An independent and credible multi-disciplinary commission should also be constituted with immediate effect to ascertain the potential consequences of nuclear accidents or 'incidents' and liability arising out of it, before putting the CLND Bill before parliament.