Don't dilute

The reported move of the UPA government to  weaken the obligations of  suppliers  of equipment under the nuclear liability law amounts to circumventing parliament and going against its will.

The move is intended to make it easier for US companies like GE and Westinghouse which want to set up nuclear plants in India. They have been lobbying with the US and Indian governments for watering down a key provision in the law which stipulates that reactor suppliers would be held liable if an accident is caused by the use of faulty or defective equipment or because of substandard services. Section 17 (b) of the civil liability of nuclear damage act, which lays this down, is reasonable and necessary to ensure that suppliers do not evade their responsibility as it happened in the case of the Bhopal gas disaster.

Attorney-General G Vahanvati has advised the government that the right of recourse provided by the provision is not mandatory and that the Nuclear Power Corporation of India (NPCIL), which operates nuclear plants in India, can choose not to incorporate the provision in a contract with a supplier. This is misinterpretation of the law which clearly says that the right to recourse shall be there irrespective of the contract.  Therefore, the use of the contract to allow the supplier a loophole is  inexplicable. US companies are vary of the liability implications but an appropriately high insurance cover can make their position safe. This  may increase the cost of the plant and the power produced by it but  the solution is not to do away with adequate safeguards which should be part of a deal to set up a nuclear plant. If Russia and France can accept India’s nuclear liability law why can’t US companies do so? In fact the law is considered as  model legislation for all countries which want to set up nuclear plants.

Westinghouse wants to set up a nuclear plant in Gujarat and an agreement between the company and the NPCIL is being finalised. The US administration is  unhappy that American companies have not commercially gained from the civil nuclear deal it signed with India. Both governments want a concrete result on the table when Prime Minister Manmohan Singh visits the US later this week and meets President Obama. But India  should not  sacrifice national and pubic interest in order to please the US. New Delhi should not succumb to pressure on the matter.

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