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India: Shadow of Bhopal on the Civil Liability for Nuclear Damage Bill 2010 (Nuclear Bill)

by Rajeev Dhavan, 23 March 2010

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From: Mail Today, 22 March 2010

India is paying price for signing 123 Agreement

What A way to go! For a country that suffered the Oleum Gas escape (1986), the Bhopal gas tragedy, was flooded with ’Chernobyl’ butter and suffers escapes and mishaps from factories every day, the Civil Liability for Nuclear Damage Bill 2010 (Nuclear Bill) disappoints. In the Bhopal Constitutional case (1989), the Union government claimed to be parens patriae to its people. The Bill shows the Union government as an irresponsible parent protecting the liability of multinational investors and using the taxpayers’ money to make the difference. Who is the Bill for? It should be to provide comprehensive relief for victims and to effect immediate relief, rehabilitation and compensation.

Whom will it help? Those who should be visibly and invisibly responsible and liable for nuclear mishaps.

This is certainly the wrong way to pick up the pieces of possible nuclear disaster. In 1991, India’s Public Liability Insurance Act 1991 was supposed to reflect post Bhopal concerns. Despite amendments providing for minimal insurance and interim relief, it proved to be a damp squib. Insurance does not reflect claims. The Act is barely used — a disastrous recipe to deal with the aftermath of disaster.

The Nuclear Bill has a lot of “ ifs” and “ buts”. In the first place, the

Board under the Atomic Act 1962 is required to notify a ‘ nuclear incident’ in 15 days (!). If the Board feels the risk or injury is not grave, not notify it. Then what happens? A bureaucratic signal is necessary to accept that a disaster has occurred.

Anomalies

But what happens, if a nuclear incident is not declared by the Board, which classifies it as not grave or serious. Is that the end of story? Second, the operator ( on whom the liability falls) is someone who is designated by the Central government and, presumably following factories legislation, would be an individual.

Enter designated Manager for the facility, exit Union Carbide or Warren Anderson! Third the liability clause is interesting. The upper limit of Rs. 500 crores per incident is illusory. The Union government may increase it or decrease it to Rs. 100 crores. Fourth, under the Nuclear Bill, damage is essentially awarded for damage outside the installation.

This is important. In the Oleum Gas Case (1986), the Supreme Court made it clear that any ’escape’ from an inherently hazardous activity would give rise to an absolute liability as soon as escape is shown. This was affirmed in the Bichhri (Indian Enviro) case ( 1995).

This is not reflected in the Bill. Nor really taken into account.

In fact the Bill actually reverses the principle by saying that the operator can hide behind the fact that his employees did something willfully wrong.

Such an approach used to exist before 1911! Why should the Central government be liable for any liability over the limit? Or for

damage due to natural disaster, insurrection, terrorism and the like? Why should the ’operator’ not take out insurance for all damage as well? Fifth, the present insurance requirement is only to a certain sum for external damage under ’normal circumstances’. Let it be more comprehensive. This will make the premium higher.

But inviting the worst of possible hazards is an expensive business which cannot be dealt with by a blind eye to justice. Sixth, according to Minister Jairam Ramesh, Indian nuclear power generation is to reach 6000 MW by 2011.

Russia wants to build 12 nuclear reactors in India.

There will be 60,000 MW by 2032 as against 4,120 MW now ( an increase of 1456 per cent).

Seventh, the normal adjudicatory system is through a Claims Commissioner.

This is an ambitious plan locked up in procedure. The remedy is reposed in a Claims Commissioner who could be a person with 10 years practice or a Joint Secretary with 5 years special knowledge of nuclear liability. I assume such a person exists and is right for the job! Eighth, the limitation period is 3 years from discovery of knowledge of harm. Or a maximum of ten years — presumably, even if cases of latent damage are discovered years later.

Ninth, there is little scope for relief to alleviate and rectify the damage immediately.

Relief and rehabilitation are given the go by. The relief is just money. In the words of the song: "Money, money, money. It’s a poor man’s world”. Tenth, a Claims Commission headed by a person qualified to be High Court judge or an Additional Secretary (both over 55 years) is to hear difficult cases and those where damage is greater than Rs 500 crores even though that is a mandatory cap. When the Central government feels the Commission has too little work it will be dissolved.

Recourse to civil courts is ousted. This ensemble of authorities which is to determine issues of such grave portents will not necessarily have the ability or experience to do so. There are no provisions for legal aid. None to help those affected.

Price

We have forgotten Bhopal! Eleventh, there is the usual hateful provision that the Act shall come into effect on such dates the Central government decides — with possibly different dates for different parts of the Act. Acts should come into effect at once. This political largesse to the government is arbitrary.

An argument has been made that India’s cap on liability is Rs. 500 crores as opposed to China (205 crores) and Canada ( 335 crores); and is similar to France (575 crores). But the Nuclear Bill leaves it to the government to reduce the amount to Rs. 100 crores in each case. Why? To say that America’s private operators have pooled together a fund of $ 10 billion is a fact. This is just the corpus. Why should the

Indian taxpayer bear the burden of the excess? This bill purports to be comprehensive, but is comprehensively problematic.

It is said India breached history when it signed the ill- fated 123 agreement and ventured out from ‘ nuclear isolation’. But the price of that is being exacted in this Bill.

Parliament

The operator in India is liable, the foreign investor goes scot- free. India is not party to the related Vienna Convention 1963, the Paris Convention of 1960, the 1997 Vienna Protocol or the Supplementary Convention for Compensation of 1997. To cite the China example ignores that there is no upper limit in the Vienna Convention and the Paris Convention’s limit is €700 million (Euros).

The problem is that Parliament is not permitted to discuss matters in two ways. Firstly, the Opposition brings Parliament to a halt. This was done in the case of the Women’s Reservation Bill. But this usual tactic of the BJP in opposition is not the case with the Nuclear Bill. Second, the Government is often too much in a hurry to rush Bills through Parliament (sometimes under devious or foreign pressure) without discussion in Parliament or with political parties or people.

Foreign governments want to protect their investors. This is precisely the Bhopal situation. Union Carbide was sought to be protected. Warren Anderson was de facto absolved.

Multinational investors in hazardous activity (even less so in the field of nuclear liability) do not deserve protection from consequent liability.

Today, the Bill is precariously poised because the opposition is keen to bring the government down. As with the Women’s Bill, the government wants to be cautious. Tactic is an alternative to discourse. Let us wait and see.

The writer is a Supreme Court lawyer

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