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India’s troublesome Nuclear Liability Laws: still an issue for the US? October 31, 2013

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

Auriol Weigold

In May 2010 I noted that the then Civil Nuclear Liability Bill defined the financial and legal liabilities for groups, seeking “to put the burden of damages on the nuclear plant operator”. (South Asia Masala, “Operationalizing” the Indo-US nuclear agreement) That burden remained unacceptable to potential operators United States’ companies Westinghouse and General Electric Hitachi, which have waited some three years for inter-government agreement to be reached on the unsatisfactory Nuclear Liability laws, before taking up long-since allocated sites in India to develop commercial nuclear power plants.

The Liability bill approved by Prime Minister Manmohan Singh’s Ministerial Cabinet in 2009 and passed by Parliament in 2010, defined financial and legal liabilities, and was the final facilitating step in the 2008 Indo-US Nuclear Agreement, itself several years in negotiation. The benefit for India in the US reversal of a lengthy ban on supplying nuclear fuel and technology is immense, but the fine-tuning in this last stage is as problematic as the earlier delays and trade-offs over the issue of a nuclear reprocessing facility in India.

Amidst rumours, outcry and denial in political India that the UPA Government might move to dilute the Civil Nuclear Liability Bill to suit the US government – without whose support the moratorium on nuclear-related trade with India would not have ended – the game continues.

When Prime Minister and President met in Washington at the end of September this year, they signed their first commercial agreement on civilian nuclear power cooperation. They then issued a joint statement that noted that negotiations were taking place between Westinghouse and NPCIL (Nuclear Power Corporation of India) and that discussions on the administrative arrangements would be concluded as soon as possible. The joint statement went on to reaffirm their “commitment to the full and timely implementation of the Indo-US Civilian Nuclear Co-operation Agreement”.

Again, according to their joint statement, the US Nuclear Regulatory Commission and the Indian Atomic Energy Regulatory Board have yet to sign off on an MoU on the exchange of technical information relating to nuclear safety, while, the troublesome Civil Liability for Nuclear Damage Act 2010 (gazetted 11 Nov 2011), which will not be diluted to suit the needs of American firms and their government, has to be further negotiated. Despite the Prime Minister’s and President’s positive joint message, there clearly remain issues for both governments and their regulatory bodies to resolve.

The prospect remains murky. In relation to a final agreement with Russia on two reactors on which ‘most’ but ‘not all’ issues have been settled, a headline in The Telegraph, Calcutta on 21 October, states, “Liability pest stalls PM’s nuke harvest”. Indian negotiators were in Moscow a month after the meetings in Washington attempting to allay Russian fears by stating that the Nuclear Liability law is not as draconian as it sounds – that the wording is vague and can be interpreted in various ways.

Is this what we will next hear in ‘final’ negotiations with the US? The Telegraph proposes that if even with an old and trusted friend like Russia India could not provide an acceptable framework for agreement to proceed, how will it negotiate other deals?

The US has endeavoured to achieve international agreement to overlook India’s refusal to commit to the NNPT and has compromised more than once to reach agreement with India on civil nuclear cooperation, so the answer may well be that its ultimate goal – ties with India cemented in place, although short of an alliance – cannot be risked and that a way forward will be found.


1. Sandy Gordon - October 31, 2013

This is a very timely piece of commentary on a most important issue, both from the point of view of the crucial US-India relationship and from the perspective of India’s efforts to mitigate its CO2 production. Thanks Auriol. Sandy Gordon