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“Operationalizing” the Indo-US nuclear agreement May 26, 2010

Posted by southasiamasala in : India, Weigold, Auriol , trackback

Auriol Weigold

India and the United States have ironed out their remaining differences over the reprocessing of US-originated spent nuclear fuel amidst much activity on nuclear matters.

These activities included the Washington Nuclear Summit in mid-April, closely followed by the Iranian conference, “Nuclear energy for All, Nuclear Weapons for None” (which India also attended), together with the release of the Nuclear Posture Review and the US-Russia Nuclear Agreement.

At a time of such activity, and with the 2010 NPT Review Conference now under way, was this, at last, the final step in the reprocessing saga? Compromise on the remaining contentious part of the 123 Agreement had stalled in early March 2010, but by the end of the month India and the United States announced that they had come to agreement on a nuclear reprocessing facility in India, expected to draw to a close the lengthy negotiations on an Indo-US nuclear agreement initiated during the Bush Administration.

The agreement to grant India consent to reprocess spent fuel was described as a “significant step forward for US-India commercial nuclear cooperation” (Arun Kumar, IANS, in Business News, 29 Mar 2010).The Times of India on 29 March and Reuters on the following day reported the agreement on procedures under International Atomic Energy Agency safeguards, another piece in the jigsaw puzzle that makes up the bilateral civilian nuclear pact, but each article recognized that it was not the end of the road for American commercial interests.

That reprocessing was not the final step was emphasised in press announcements such as “completion of these arrangements will facilitate participation (my emphasis) by US firms in India’s rapidly expanding civil nuclear sector”, also reported by The Times of India on 29 March. The blunt “a new cause for delay …” cited by Reuters in The West Australian on 30 March, heralded an additional hurdle for the Indian Government and for American firms waiting to take up opportunities in the nuclear industry in India: the passage of India’s Nuclear Liability Bill.

A civil liability bill for nuclear damage is essential for American nuclear commercial interests to enter the Indian market. Following objections to the bill’s terms by India’s major opposition parties the government deferred its introduction to Parliament in mid-March, the hoped for completion before the Washington Nuclear Summit not realized. Chaitanya Ravi’s “India’s Nuclear Liability Bill” is a fine analysis of the bill’s provisions.

The bill was listed for introduction in the Lok Sabha on 15 March, but the opposition of the Bharatiya Janata Party (BJP) and the left parties compelled the Government to withdraw it while it sought to build consensus. The BJP opposed the bill on the grounds that the compensation cap was insufficient; the Left parties urged MP’s not to support the bill and the Communist Party of India-Marxist called it “a harmful piece of legislation meant to serve [the] interests of the United States and its nuclear industry”. A consensus has not yet been reached despite Manmohan Singh’s optimism on 19 April.

His Government prepared the bill which was approved by the Ministerial Cabinet on 19 November 2009, a considerable time-lag before its attempted introduction to the Parliament and its failure to gain support.

The bill defines the financial and legal liabilities for involved groups, including manufacturers, operators and government in the case of a nuclear accident. It places a compensation cap not considered adequate by the opposition parties and seeks to put the burden of damages on the nuclear plant operator and not on the suppliers of equipment (Washington Post, 8 May).

In such a case the suppliers and builders will be American private companies willing to take up allocated sites, at this time Westinghouse Electric and GE Hitachi, and the operator will be the Indian Government-controlled Nuclear Power Corporation of India Limited. The bill caps the liability of any incident at approximately Rs 2100 crores, and the maximum liability by the operator (and future private operators) at Rs500 crores.

The bill was referred to the Rajya Sabha’s Parliamentary Standing Committee on Science, Technology, Environment and Forests in mid-May with the Committee expected to announce its recommendations within two months. The Government hinted on 18 May that it might be prepared to make changes to the bill based on the Standing Committee’s recommendations. To lay to rest the opposition-raised spectre of Bhopal and “operationalize” American commercial interests under Indo-US Nuclear Agreement, it may well need to do so.


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