Tuesday, March 16, 2010

Indians life is cheaper so says Nuclear Liability Bill

The Indo-U.S. Civilian Nuclear Agreement was enacted successfully in October, 2008. However, to attract private companies to invest in India, it is necessary to pass the Civil Liability for Nuclear Damage Bill (Nuclear Liability Bill). This bill defines the financial and legal liabilities upon the involved groups, manufacturers, operators and government in case of a nuclear accident occurs.

Back ground:
In early 1950’s U.S. Atomic Energy Commission ordered a study of the possible consequences of a nuclear accident at a medium-sized (200 MW) nuclear reactor sited near (about 30 miles from) a medium-sized city. The resulting 1957 AEC study, known as the Brookhaven Report, found that property damages could run as high as $7 billion (in 1957 dollars), mostly due to radioactive contamination of land, buildings, food and water. It also documented the thousands of deaths (immediate and delayed) that could be expected from such an accident, and the large numbers of defective children that would result both immediately and many years later. But U.S. insurance companies told the U.S. Congress that it was impossible for them to insure against such an enormous liability as described in the Brookhaven Report. Thus came Price Anderson Act, limiting the liability of a nuclear reactor owner to $560 million in the event of an accident -- that's about 8 cents on the dollar for a $7 billion accident -- of which $90 million would be covered by private insurance and the remainder by the government.
The Price Anderson Act now provides $10 billion in cover without cost to the public or government and without fault needing to be proven. It covers power reactors, research reactors, and all other nuclear facilities.

Point to note: Even as back in 1957 US Govt had kept the liability at USD 560 Million. But GOI in 2010 is trying to cap nuclear liability(acc to  clause 6), at the rupee equivalent of 300 million special drawing rights (SDRs) which is equal to $458 million (Rs. 2,087 crore).

Why an Indians life is cheaper.

The clause 7 of  bill outlines the share of financial liability of each group. It states that the operator will have to pay Rs. 500 crore and the remaining amount will be paid by GOI. It’s amusing that in reality the operator is GOI itself as the plants will be operated by Nuclear Power Corporation of India Ltd (NPCIL) a government owned facility. The operator can claim the liabilities from the manufacturer and supplier if it is mentioned in the contract. But the maximum amount payable by the foreign companies will be paltry sum of Rs. 500 crore.
In contrast -
In Europe,  most of countries are moving towards 2004 Paris/Brussels Protocol which cap’s liabilities as under –
  •   € 700 million(abt 1Bn USD) for operators
  •   € 500 million for installation state
  •   € 300 million for contracting parties
  • Point to note: So I think we can safely say that the price of an Indian is half that of a European

Now if you think you a victim of an accident can approach courts for redressal. Well don’t hold your breath for that as Nuclear Liability Bill will closed that door too. Clause 17 of  bill allows only  operator (NPCIL) to sue the manufacturers and suppliers. The victims won’t be able to sue anyone. Practically, no one is considered legally liable because the recourse taken by the operator will yield max of  Rs. 500. Lastly, Clause 18 of the nuclear liability bill limits the time to make a claim within 10 years. This is very less as compared to the long term damage that may be caused due to a nuclear accident

You are welcome to feel outraged....

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