Indian Parliament Adopts Key Nuclear Liability Bill

[GUNNER]

Indian Parliament Adopts Key Nuclear Liability Bill

NEW DELHI: The Lok Sabha on Wednesday gave its nod to the civil nuclear liability bill after 18 amendments were made to the proposed atomic law that triples the liability cap on an operator in case of an accident to Rs.1,500 crore from Rs.500 crore.

The legislation was cleared by the lower house after the government removed the word "intent" and amended a controversial clause stating that the operator will have the right to recourse in case of a nuclear accident if it was the consequence of an "act of supplier or his employees done with the intent to cause nuclear damage".

Moving the Civil Liability for Nuclear Damages Bill, 2010 in the Lok Sabha, Minister of State for Science and Technology Prithviraj Chavan said the government has taken on board the amendments proposed by the opposition parties to the civil nuclear liability bill. The proposed law is critical for India's nuclear deals with various countries.

Earlier, Prime Minister Manmohan Singh on Wednesday assured parliament that the civil nuclear liability bill did not compromise India's interests and urged that the measure be adopted unanimously.

The prime minister told the Lok Sabha that his government was doing everything possible to strengthen safety norms for the operation of nuclear plants.

Pitching strongly for greater use of nuclear energy, he said that he shared the opposition's concern over nuclear safety.

"We will do everything to strengthen the Nuclear Safety Regulatory Board. The concern over safety is one I share with the opposition," Manmohan Singh said.

Saying that India wished to use nuclear energy in a major way, the prime minister urged the house to pass the nuclear liability bill unanimously.

BJP today extended support to the civil nuclear liability bill but was critical of the "sleight of hand" of the government in drafting the law and its attempts to "hustle" it through in Parliament now now.

Initiating the debate on the Civil Liability for Nuclear Damages Bill, 2010 in the Lok Sabha, senior party leader Jaswant Singh also asked the government to take the larger concerns of Indians on board and not those of a "smaller" US market.

Referring to various attempts by the government to introduce contentious clauses in the Bill on which it had to backtrack, Singh said the government was indulging in a "sleight of hand" by first introducing the word 'and' and later 'intent' in the draft bill.

"It is a sleight of hand and trickery. First there was and then intent. It is simpler and easier to take Parliament along," he said.

Opposition parties had contended that insertion of the word "and" between sub-clauses 'a' and 'b' of Clause 17 without the Parliamentary Standing Committee's concurrence had sought to dilute the liability of the suppliers in case of a nuclear accident.

Similarly, they had also attacked the provision "intent" in the same clause with regard to suppliers or their employees role in an accident.

Referring to US President Barrack Obama's oncoming visit to India this year end, Singh sought to suggest that the government was trying to "hustle" through with the legislation before the event.

"Why are you hustling the Committee, Parliament and the issue. It is otherwise a very important issue. India is not South Korea. We don't have to follow their example," he said.

The former External Affairs Minister said while the government signed the agreement in 2005, it was rushing to get the Bill cleared in 2010 just before the visit of the US President Barack Obama.

Singh said his party would support the Bill if the government accepted its amendments. "Give us more candour," he added.

Jaswant Singh (BJP) said the genesis of the bill lies in the 2005 Indo-US nuclear agreement. "There is some hesitation to accept the parentage of the bill," he said.

He claimed that an "I owe you' was signed on September 10, 2005 by the then Foreign Secretary whereby India committed to the US to buy a certain number of nuclear power plants.

"That 'hundi' has created problems now as they (US) are asking for money," he said.

He said since India is buying 40 nuclear power plants, it was "not in a weak position". Therefore, it should not allow the suppliers to dictate their terms.

The BJP leader, who as External Affairs Minister in the NDA government played a key role in furthering closer Indo-US ties, said New Delhi should further closer relations with Washington "as a resurgent and assertive India".

Singh said he did not think that anybody can compensate for a real nuclear incident. Nuclear accidents do not fall in the usual compensation pattern.

Raising another question, he said that 1650 MW plants would be used in India for the first time. "I don't think they have been fully tried in any other country".

Singh also asked the government to consider the environmental aspects of the Act. He asked the Government for explanations on insurance and inclusion of the term "Special Drawing Rights".

Congress MP Manish Tiwari said the first initiatives for ending nuclear isolation were taken by Jaswant Singh when he held talks with Strobe Talbot.

"When Manmohan Singh took over as the Prime Minister, he only took that forward," he added.

Tiwari said India was not having a nuclear agreement with only the United States, but also with Japan, France and others.

He said that the Bill is important as India needs energy. "If India wants progress, then we have to have nuclear energy".

All the electricity units will be run by Indian companies. The Congress MP said that the Bill has been brought about as if there is any if there is any accident, then the victims will not have any problems getting compensation.

Reacting for demands for increase in the insurance cover, he said, in case there is any increase in the insurance cover, the cost of electricity would also increase.

"Even if clause 17 would not be in existence, no operator would make an agreement to take indemnification of liability".

Samajwadi Party leader Shailendra Kumar said liability should be fixed on both supplier and operator. "We have to bring development in the country that is why I think the bill is very important. "We had supported the government during the nuclear deal also".

He said it was important that the bill is accepted by all. "There is some confusion between the liability for the operator and supplier, this should be clarified".

BSP MP Gorakh Prasad Jaiswal said there was no need for a new Bill. "There is an increasing tendency to bring in new Bills".

"Awareness programmes should be held in places where the nuclear reactors would be set up," he said.

JD(U) leader Sharad Yadav said the way the Bill has been brought about and from the efforts made by the government, people think that the government has been in a tearing hurry.

"Only a handful of people will benefit from nuclear energy. Nuclear energy is not a good thing. At least the government has tried to evolve a consensus," he said adding "I would not like to be an impediment. The government has already decided on the Bill".

Yadav said that the US government wanted to bail out its companies which had suffered massive losses due to the recession and thus was putting pressure on India.

"They (US) are powerful countries and they want India to kow-tow to them," he added.

 

[GUNNER]

Q+A-India's nuclear commerce liability bill

NEW DELHI, Aug 25 (Reuters) - India's main opposition party agreed on Wednesday to back a bill to open up the country's $150 billion nuclear power market after the government brought in tougher accident liability provisions.

WHAT IS THE BILL?

A civil nuclear agreement between India and United States in 2008 ended New Delhi's isolation in global atomic commerce and opened up its state-controlled nuclear power market to foreign firms.

But the deal could not be implemented until India put in place a compensation regime that limited the liability of private companies, especially those from the United States, in the event of an industrial accident.

So India framed the Civil Liability for Nuclear Damage Bill 2010, which stipulates the compensation burden on the state-run reactor operator, the liability of the federal government and the responsibility of private suppliers and contractors.

WHY IS THE BILL IMPORTANT?

The bill is important for private companies whose liabilities are not underwritten by their governments, as is done by the governments of Russia and France.

Compensation claims from one nuclear accident could be enough to bankrupt a private company. Firms are reluctant to enter the Indian market despite its size until there is some clarity on compensation in case of an accident.

WHY IS THE BILL CONTROVERSIAL?

Critics say the original draft law pegged the compensation liability of the operator too low -- at about $110 million, almost 23 times less than that of an operator in the United States.

It also did not hold private suppliers liable, opening a debate on whether the government was allowing them to get off easily in case of an accident.

But the main opposition Hindu-nationalist Bharatiya Janata Party agreed to back the bill after the government trebled the compensation liability of the operator and extended the liability to cover private suppliers.

HOW MUCH COMPENSATION IS BEING OFFERED?

Following opposition to the bill's original draft, the government referred it to a special parliamentary panel.

The panel recommended the liability cap for the operator be trebled to $320 million, a suggestion largely backed by the opposition.

State compensation, or the liability burden on the federal government, has been pegged at the equivalent of 300 million IMF special drawing rights ($450 million) which will be over and above the operator compensation.

The panel has also suggesting extending the liability to cover private suppliers and contractors.

WHICH FIRMS WILL BENEFIT AND AT WHAT COST?

The main beneficiaries could be firms such as U.S.-based General Electric (GE.N) and Westinghouse Electric, a subsidiary of Japan's Toshiba Corp (6502.T).

They already lag Russian and French firms, which have moved ahead on building reactors in India. While higher compensation would mean firms would have to shell out more for insurance premiums, a formal compensation regime will bring in much-needed policy clarity which will help speed up projects.

Once the bill becomes law, the U.S. firms can start work on building reactors at at least two sites identified for them. The first fruits of the India-United States deal could fetch GE and Westinghouse up to $10 billion.

The Confederation of Indian Industry, a business lobby, said the bill would keep away domestic and foreign suppliers because of the stiff provisions against private firms.

"Globally, there is no insurance coverage available for suppliers in the nuclear business," CII wrote in a letter to the government, which was released to the press on Wednesday.

"This will stall the growth of the nuclear manufacturing industry in India and be a setback for the government's plan to indigenise maximum supplies for the foreign technology plants."

ANY OTHER HURDLES REMAIN?

Yes, problems over acquisition of land for nuclear power plants could delay projects. In India, farmland acquisition has highlighted a broader standoff between industry and farmers in a country where two-thirds of the population lives on agriculture. There have already been several farmers' protests against upcoming nuclear reactors and opposition support for such demonstrations will complicate the land acquisition process.

 

[trident2010]

Lok Sabha passes Nuclear Liability Bill



NEW DELHI: Ending months of wrangling between treasury benches and the opposition, the Lok Sabha on Wednesday passed the civil nuclear liability bill after government dropped the contentio us provision of "intent" in the case of accident adopting a BJP amendment, paving the way for nuclear commerce with the world.

The Civil Liability for the Nuclear Damages Bill, 2010 was adopted by the House by a voice vote after it rejected a CPM amendment that sought to fix the liability cap on suppliers in case of accidents at Rs.10,000 crore instead of the Rs.1,500 crore proposed in the measure.

The House nod came not not before Prime Minister Manmohan Singh made a spirited intervention in the four-hour long debate rejecting allegations that the bill was brought to advance the interests of the United States and its corporations.

He described the measure as a completion of journey to end apartheid against India in the field of atomic power.

The CPM amendment was negatived in a division pressed by its Parliamentary Party leader Basudeb Acharia with 252 voting against and 25 voting for it.

A total of 18 official amendments were adopted by the House including the one the rephrased clause 17(b) which read "the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment of material with patent or latent defects or sub-standard services."

The BJP's support, which was articulated by senior member Jaswant Singh, came after the official amendment reflected the formulation of the amendment proposed by him.

The bill, which was studied in depth by a Parliamentary Standing Committee, is necessary for full implementation of the civil nuclear deal signed with the US in 2006.

In his brief intervention, Singh asserted that atomic power was the "viable" option which could not be ignored and the legislation would enable India to widen this option by undertaking nuclear commerce with the world.

Moving the bill and later in his reply, Minister of State in the PMO, Prithviraj Chavan said the government had sought to evolve a broad consensus on the legislation by trying to take on board the views of Opposition parties.

The amended Clause 17(B) now does not have the word "intent" with regard to suppliers or their employees in causing an accident in a nuclear plant, a provision that was strongly objected to by BJP and Left parties which felt it was aimed at diluting the suppliers' liability.

Significantly, the language of the official amendment to Clause 17 (b) now matches the amendment moved by BJP leader Jaswant Singh. Left leaders had also submitted amendments to the same clause but did not press them.

Chavan said the compensation cap to be paid by the operator at Rs 1500 crore as provided in the Bill was not the "limit", as overall compensation would be the decision of the Claims Commissioner.

"Compensation is unlimited. Whatever compensation will be decided by the Claims Commissioner and he (operator) will have to pay it," Chavan said adding that the limit on compensation was only to enable the operator take insurance cover.

The debate also witnessed unusual bonhomie between the ruling coalition and the BJP with members praising each other's governments.

The Prime Minister noted that the process for having civil nuclear deal with the US was initiated by the Vajpayee government.

The government dropped the word "intent" and rephrased Clause 17(b) after intense negotiations with the opposition including a couple of meetings convened by Finance Minister Pranab Mukherjee to break the deadlock.

The original version of the amendment had come under sharp attack from the BJP and Left parties as it provided for proving the "intent" of a supplier of causing an accident if an operator were to claim compensation.

The parties had contended that it was impossible to prove an intent on the part of suppliers or their employees in case of an accident.

The controversial word "intent" found its mention in an earlier government amendment, which was different from the one recommended by the Parliamentary Committee that examined the bill.

On allegations that the bill was aimed at benefiting US companies, Singh said "to say that this is being done to promote American interest and to help American corporation, I think, is far from the truth."

He said such charges against him were not new as he had faced these even in 1992 when he presented the Budget as the then Finance Minister.

Pointing to senior BJP leader L K Advani, Singh said he was aware of it and added the whole opposition, with a few exceptions, demanded his impeachment claiming that the budget had been prepared in the US.

"To say we have anyway compromised India's national interest will be a travesty of facts," Singh said apparently addressing the Left parties which have alleged that the bill had been drafted to suit American companies.

"History will be the judge," the Prime Minister said as he pointed to the economic reforms initiated in 1991 when he was the Finance Minister.

"I leave with the people of this country to judge. It is with this very motivation that our government has tried to complete the journey towards ending the regime of nuclear apartheid," he said.

Chavan also justified the addition of Clause 7, which provides for government assuming "full liability" for a nuclear installation not operated by it if it is of the opinion that it is necessary in public interest. This is aimed at taking insurance cover for a nuclear installation.

He said that the raise in the compensation cap from Rs 500 crore to Rs 1,500 crore matches a similar provision in the US.

Making a case for nuclear power, Chavan said though coal and hydro power plants were important options nuclear energy cannot be ignored.

While hydel projects caused great displacements, coal was a dirty fuel considering its impact on the environment and contribution to global warming.

Responding to Opposition criticism that the government was hurriedly getting the Bill passed, Chavan said five years had already passed since India and the US agreed on civil nuclear cooperation.

As regards references to the visit of US President Barack Obama in November, the minister said " France, Russia are also our friends". French President Nicholas Sarkozy and Russian President Dmitry Medvedev are also scheduled to visit India later this year.

Chavan said the Bill also addressed the issues of criminal liability of suppliers.

On Left concerns on joining the Convention on Supplementary Compensation ( CSC), Chavan said that the government does not intend to join the IAEA-drafted measure right now.

He said the government can take a decision on it at a later date.

Earlier, the BJP extended support to the civil nuclear liability bill but was critical of the "sleight of hand" and "trickery" of the government in drafting the law and its attempts to "hustle" it through in Parliament now.

Jaswant Singh (BJP) said the genesis of the bill lies in the 2005 Indo-US nuclear agreement. "There is some hesitation to accept the parentage of the bill," he said. "You agree to something and then 'and' comes. You agree. Then comes 'intent'. It shows repeated instances of sleight of hand (in drafting the law)."

He also questioned the attempts to "hustle" the bill through Parliament and the country.

Congress member Manish Tewari said the first initiatives for ending nuclear isolation were taken by the then External Affairs Minister Jaswant Singh when he held talks with US Deputy Secretary of State Strobe Talbot.

"When Manmohan Singh took over as the Prime Minister, he only took that forward," he added.

Samajwadi Party leader Shailendra Kumar said liability should be fixed on both supplier and operator. "We have to bring development in the country. That is why I think the bill is very important. We had supported the government during the nuclear deal also".

JD(U) leader Sharad Yadav said the way the Bill has been brought about and from the efforts made by the government, people think that the government has been in a tearing hurry


Lok Sabha passes Nuclear Liability Bill - India - The Times of India

 

[Nahraf]

Liability law puts India's nuclear future in doubt | The Energy Collective

Liability law puts India's nuclear future in doubt
September 14, 2010 by Dan Yurman

It imposes conditions which go beyond international law

India nuclerAmerican firms hoping to get a piece of India's expected $150 billion nuclear energy market over the next two decades got a rude shock Sept 1.

Instead of an open door to hundreds of billions in trade deals, with the passage of a divisive liability law, India's parliament imposed harsh liability measures on both suppliers and operators of any new nuclear plants.

The law goes beyond international rules that limit liability to operators of the plants. It effectively stops any American firm from selling nuclear reactors, fuel, or components to India. This may have been the opposition party's goal all along which used the Bhopal tragedy as a poster child for their cause. The new law has created a huge headache for both countries.

The U.S. India Business Council, composed of hundreds of U.S. firms that could be affected by the new law, took the unusual step of issuing a protest. It said in a statement that the sole remedy for compensation from accidents should be with Indian operators.

What were you thinking?

American firms aren't the only ones upset with the new law. Russia, which is building four new reactors for India, demanded a "clarification" from India. This is diplomatic speak for "what were you thinking?"

Russian Ambassador to India, Alexander M. Kadakin, told the Times of India Sept 15, that the liability law is being looked on as a "deterrent" for suppliers to sell into the Indian nuclear market.

Areva, the French state-owned nuclear giant, also weighed in on the liability law. According to a report in Platts Sept 7, French President Nickolas Sarkozy is expects to bring up the issue on a state visit to India in December.

Areva spokesperson Pauline Briand told Platts her firm "does not consider the clause to be good news," and she noted that the Nuclear Power Corporation of India Ltd (NPCIL) has also criticized the measure.

NPCIL is worried the law will cut off the supply of western components for the 30-40 GWe of new nuclear generation capacity the country wants to build in the next two decades. If that happens, India's ambitious plans to build new reactors will quickly come to an end.

The Wall Street Journal reported Sept 9 the new law has U.S. and Indian diplomats "scrambling" to fix the situation prior to a November visit to New Delhi by President Obama prior to the G20 summit in Seoul, South Korea Nov 11-12.

The newspaper says U.S. diplomats and companies planning to do business in India were "caught by surprise." This report is difficult to accept since anyone following the history of the measure could see the opposition position coming a mile away. This is the third time PM Singh tried to pass the law having failed previously twice before to pass the bill.

What to do about a bad bill?

Efforts to mitigate the impact of the law on American firms could take one of three paths.

* Option 1: India pledges to indemnify foreign suppliers through government-to-government agreements.
* Option 2. PM Singh sets aside the supplier provision via the equivalent of an executive order.
* Option 3: NPCIL assumes the liability as the supplier since it is India's only operator of nuclear plants. Private investment in nuclear reactors is not allowed under Indian law.

Efforts to diminish the effect of the law would likely set off a firestorm among opposition groups. To see how hard over they are about the supplier provision, consider this statement to the WSJ by Ravi Prasad, spokesman for the main opposition party.

"India is a huge market. Come on my terms or not at all."

His problem is that his party is not in power, and has no executive ability to enforce the law.

Nonproliferation group has ideas that are non-starters

ImageNot everyone in the U.S. nuclear world is unhappy with India's tough new law. Henry Sokolski, head of a nonproliferation think tank in Washington, DC, (right) wrote a Sept 13 Op Ed in the WSJ. He said the US. needs to concentrate on trade issues and not new nukes.

Sokolinski said efforts by PM Singh to gut the liability law could "poison" U.S. relations with India and would make President Obama look like he was carrying water for the nation's nuclear component manufacturers.

Actually, that second thought is on the mark. Sokolski got some other things right, but in several cases, imposed his own idealistic worldview on two countries that probably don't agree with them.

What he got right is that India doesn't need American firms to build out its nuclear energy infrastructure. Russia has four reactors under construction there. France has two more with plans to build six. Both countries operate through state-owned corporations that self-insure through sovereign immunity. Good luck suing either one if there is a problem. American firms are already behind in gaining market share for India's nuclear new build.

What he gets wrong is a claim that what India really needs is "energy efficiency." This is a blind spot that affects green groups and now appears to have moved to the nonproliferation community. India needs growth, and to get it, needs electricity. For instance, in late August the state-owned railway system started talking about having its own nuclear reactor so it can electrify the country's train system. India needs the baseload power that comes from nuclear reactors to stabilize its shaky electric grid.

Also, Sokolski gets wrong the view that Indian can supply its own fast reactors to replace the ones the country wouldn't get from the U.S. That technology is decades out in the futrue along with India's continued exploration of Thorium fueled reactors. India doesn't have the manufacturing capability to build either design in the near term. And there is no way India will import reactors from China which is supplying them to Pakistan.

Obama is coming

ImageWhat’s driving the need to resolve the nuclear liability issue is that President Obama is coming to India in November. Neither the U.S. State Department nor India's foreign policy establishment want the nuclear liability issue as a distraction.

The diplomatic trap lines are being worked at both ends. In Sept 8, U.S. Ambassador to India Timothy Roemer met with Indian national security advisor Shiv Shankar Menon to express U.S. concerns. That's a repeat of the U.S. India Business Council's question, "What were you thinking?"

In the U.S. India's foreign minister Nitrupana Rao arrived this week to meet with U.S. Undersecretary of State William Burns and other senior officials to finalize the agenda for Obama's visit. One of India's desires coming out of Obama's visit is support for a permanent seat on the U.N. Security Council. There are also a host of defense and trade issues to be worked out.

The nuclear liability law looms large because the U.S. supported India's return to being able to buy nuclear fuel as part of an implied promise that U.S. firms would be able to supply the fuel, and reactors. That hasn't happened and U.S. firms have become more vocal about it.

John Rice, head of G.E., which has plans to build six 1,500 MW ESBWR reactors for India, told the WSJ flatly he's not going to do the deals if the law stays on the books.

"We're not going to do business in countries where the nuclear liability regime is not well-defined."

Right now the situation has the potential to cause political problems between the two counties. These are problems that PM Singh has inherited from his own political system. Whether he'll accept any of the options to resolve it remains to be seen.

 

[Capt.Popeye]

^^^
"What to do about a bad bill?"
Not too much really. The bill is "bad" for whom? The suppliers, or the populace of a country that is likely to be affected in case of a nuclear disaster.

As the posts above explain, the concept of Liability exists in all countries operating Nuclear power plants; so this move cannot unexpected.


"Efforts to mitigate the impact of the law on American firms could take one of three paths.

* Option 1: India pledges to indemnify foreign suppliers through government-to-government agreements.
* Option 2. PM Singh sets aside the supplier provision via the equivalent of an executive order.
* Option 3: NPCIL assumes the liability as the supplier since it is India's only operator of nuclear plants. Private investment in nuclear reactors is not allowed under Indian law. "


These "supposed" options have been proposed by The Energy Collective, which is a lobbyist for the manufacturers of nuclear equipment which is understandable.

Is it likely to pan out that way- Very Unlikely.
* Option 1- Not easy to do because the GoI can't pull that off.
* Option 2- There is no way that PM Singh can do that, because of the Indian constitutional set-up. Only if he assumes "Emergency Powers", he can override a law, in which case he will be looking for another job.
* Option 3- NPCIL already has the burden of "Operator's Liability", it cannot (and will not) assume additionally the "Supplier's Liability".

Keeping the legal aspects aside; the facts of the matter are rather simpler. There are approx. 40 plants to built and supplied for, not a small number.
Hence in the terms of the article above:
"India is a huge market. Come on my terms or not at all."
There are not too many countries lining up to make many Nuclear plants (except China probably) so eventually "market forces" will play a big role in this matter.