Putting victims at the centre of liability law

Siddharth Varadarajan IN THE HINDU

The Nuclear Liability Bill needs to be amended to ensure adequate compensation in the event of an accident.

The bill must be amended to allow for a proper level of compensation, well beyond the Rs. 2,050 crore “maximum amount of liability”

It extinguishes claims for compensation for damage made more than 10 years after an incident. An unconscionable limit

The nuclear liability bill is currently being reviewed by the Parliamentary Standing Committee on Science & Technology, Environment & Forests. There are several clauses and concepts that need to be amended to ensure the legislation meets its intended purpose.

1. The “maximum amount of liability in respect of each nuclear incident” is fixed at 300 million Special Drawing Rights, approximately Rs 2,050 crore. This figure is too low and can’t possibly cover the kind of nuclear damage a major incident would cause to human life, property and the environment. Since the government wants to accede to the IAEA’s Convention on Supplementary Compensation (CSC), 300 million SDRs has been chosen as national cap so as to receive compensation from countries that are parties to the CSC beyond that. One assumes the government will have to provide compensation above whatever limited sums come from the CSC. Some explicit commitment to this effect, therefore, is essential.

It is worth noting that the CSC will only enter into force if a country with a major nuclear programme like Japan accedes. That is unlikely to happen soon. If every country in the world joins the CSC, a maximum of 300 million SDRs would be available. But since the CSC will never attract universal adherence, the best a member state can hope to receive is around 50 million SDR. Either way, these are not substantial sums. Thus, the Bill must be amended to allow for a proper level of compensation, well beyond the Rs. 2,050 crore “maximum amount of liability”. Since the CSC says the compensation amount a signatory specifies prohibits discrimination between national and cross-border victims of a nuclear accident, some national cap may be necessary. But legal language is needed to assure the people that the government will compensate them fully in the event of an accident.

2. Like the national cap, the liability of nuclear operators is also capped too low at Rs. 500 crore for each incident. The bill says the government shall be liable for nuclear damage exceeding that amount. Two amendments are needed to protect public interest. First, the law must clarify that the cap applies only to public sector operators. Second, the Rs. 500 crore cap is low even for a public sector operator. It creates a double social cost. The fact that the operator is not forced to internalise the cost of damages he may cause will lead to the under-provisioning of safety. And, to the extent to which the operator cap is a subsidy towards the true cost of nuclear power, this would lead to the over-optimal share of nuclear power in India’s energy mix. Depending on the extent to which society wishes to subsidise nuclear energy, the operator cap should be set at some point between Rs. 500 crore and Rs. 2,050 crore. The higher figure would be more in keeping with enlightened liability regimes in other countries.

Some argue that raising the operator limit will increase insurance costs. But nuclear plants around the world take out property insurance for sums several times higher than their accident liability and this does not affect the viability of nuclear power. Insurance premia, in any case, represent a very small fraction of the total cost of a nuclear plant worldwide.

3. The operator’s right of recourse against suppliers under 17(b) should be preserved and perhaps strengthened to include defective equipment and design flaws. India should leverage its mammoth imports to get the supplier to accept a measure of liability in the commercial contract itself. Moreover, the right of recourse must be for the total damage caused by the supplier’s negligence and not be limited to the operator’s liability cap.

Since 17(b) deviates from the right of recourse envisaged by the CSC, India may have to enter a reservation if it accedes to the convention. Alternatively, it can adopt the liability bill but stay outside the convention like South Korea, which faces no impediment in doing business with U.S. suppliers. Not signing the CSC will also preserve the right of Indian victims to approach the courts of the country to which a nuclear supplier belongs in the event of an accident involving their negligence.

4. The bill extinguishes claims for compensation for nuclear damage made more than ten years after an incident. This limit is unconscionable. There is no reason why Indian law should impose such a limit for injuries to humans, especially when the Vienna and Paris conventions on nuclear liability allow a 30 year claim period. In Bhopal, many illnesses are manifesting themselves years after the original incident, and affecting subsequent generations. Physical damage may also require more time to assess. Twenty-five years after the Bhopal disaster, there is still uncertainty about liability for plant remediation. Certainly no claim was brought against Carbide on the question of site clean up within 10 years.

5. It is unsettling that the bill leaves the assessment of damages and claims for a nuclear accident to an executive rather than judicial body. While there is no reason to assume judges will be more sympathetic to nuclear victims than bureaucrats, the prohibition of judicial oversight embodied in clauses 16 and 35 cannot be justified. These will have to be amended or deleted, especially in order to end the ambiguity about the victim’s right to file tort claims.

6. Ironically, nearly half the bill’s clauses deal with the service rules etc of the officers who will process compensation claims rather than victim rights. As far as the composition of Nuclear Damage Claims Commission, it is shocking that more attention is paid to the bureaucratic qualifications of commissioners rather than their knowledge or competence to assess damage claims. In line with the complete exclusion of the health ministry and health professionals from the drafting process, the bill envisages no role for health and environment experts. Amendments are needed to remedy this.

7. Clause 46 says the Act’s provisions “shall be in addition to, and not in derogation of, any other law for the time being in force” and that the operator will not be exempted “from any proceedings which might, apart from this act, be instituted against [him]”. According to officials, the stated intent of this clause is to preserve the victims’ right to file tort claims. It also raises the possibility of criminal liability in the event of negligence on the part of the operator or, presumably, the supplier. But Indian tort law is poorly developed. As for criminal prosecutions, nothing more needs to be said in the light of Bhopal. Thus, for this clause to have any meaning, it must be accompanied by clauses that would facilitate tort claims.

The law ministry should also be asked to clarify what the intent behind mentioning only the “operator” in this clause is. Is it to simplify the filing of victim claims by channelling fault-liability on to the operator leaving him to recover damages from suppliers via his right of recourse? If so, does this mean tort claims cannot be filed against anyone other than the operator? Given the unhappiness over the Bhopal settlement of $470 million – the Centre, in a sense, channelled the claims of victims through itself but sold them cheap — the Standing Committee must ensure the nuclear bill does not dilute the victims’ right to file tort claims against any party in the event of an accident.


Some lessons from the Bhopal outcome

Justice V.R. Krishna Iyer

The court verdict shows that India is still in a Victorian imperial-feudal era, distances away from the socialist dream.

The political parties that were in power during these years are guilty of culpable neglect

One extraordinary feature of the outcome is that the highest officer who was involved in Union Carbide, Warren Anderson, is nowhere in the picture

The mass slaughter that occurred in Bhopal on December 2, 1984 was the consequence of an American multinational corporation dealing with Indian lives in a cavalier manner. Some 20,000 people were “gasassinated.” Yet, after 26 years of trial, the culprits get two years of rigorous imprisonment as punishment. Such a thing can happen only in bedlam Bharat.

The President of the United States and the white world, and the Prime Minister of brown India, shout themselves hoarse against terrorism by the Taliban and the Maoist-naxalites. However, when it came to carnage caused by an American company in a backward region of India, it took all of 26 years to get a court judgment.

India is but a dollar colony, and so the “gasassination” has been treated as a minor crime. This is Macaulay’s justice of Victorian vintage still ruling India. Our Parliament and the Executive are less concerned with the lives of ‘We, the People of India’; their deprivation is of little consequence. The judiciary is another paradigm of insouciance and it is often indifferent to its fundamental duty of issuing a swift verdict. Parliament is too busy making noises to be able to make laws to defend citizens’ lives. The investigative-judicial delay that has occurred is unpardonable for a crime of this kind.

Indian courts will do justice — if proper judges are appointed and fair procedures are made, if sensitive and sensible laws are enacted and the Executive has the needed independence, alacrity and integrity.

Trust violated

Meanwhile, this socialist democracy continues to be a cause for despair for the common people. This contradiction must end. We have enough human resources to redeem the pledge of the Father of the Nation whose ambition was to wipe every tear from every eye. This trust of Indian sovereignty was ludicrously violated in Bhopal.

Every poor man in hungry despair resisting the British Empire was once called a Congressman. When the Congressman came to power after freedom, every hungry militant was called a Communist. When the Communists came to power in some States and still kept many people starving, these poor men were called naxalites.

Does India have a future? Yes, provided the glorious Constitution and the marvellous cultural tradition, sharing the vision of both Karl Marx and Mahatma Gandhi, are realised. Have we such a sensitive perception? Have the instrumentalities under the Constitution a noble mission and a passion? Have the judges such an ambition? The Bhopal decision shows that India is still in a Victorian imperial-feudal era, distances away from the socialist dream.

One extraordinary feature of the outcome is that the highest officer who was involved in Union Carbide, Warren Anderson, is nowhere in the picture. This is but mockery of justice. If the chief criminal is beyond the party array, the millions who are the victims are being mocked by the trial of lesser offenders. In exempting the powerful from criminal jurisdiction, the law has become lame. Is an American criminal immune to investigation by an Indian court order? Such discrimination makes justice risible.

Over the 26 years it took, what was the Supreme Court, with so many judges who have original jurisdiction to try cases when fundamental rights are violated, doing? The Government of India did not move the court for an early trial? Now the Law Minister says he is not happy with this two years’ rigorous imprisonment that has been granted. During these 26 years, no amendment to Sections 300 to 304 of the Indian Penal Code was moved or enacted, or severe punishment written into the Penal Code. This by itself constitutes dereliction of duty on the part of Parliament and the Executive. The political parties that were in power during these years are also guilty of culpable neglect: they slept over the noxious infliction on Indian humanity.

Fair compensation has not been paid to the victims. A huge hospital financed by Union Carbide was built in Bhopal. But it is not for the poor but the rich. It is over the bodies of the poor that the hospital building was built, and still the have-nots have no access to it. The Supreme Court, seemingly lost in issues relating to its own allowances and perks, did not call up the case from the trial court and decide it at once.

Warren Anderson is a closed chapter for the U.S. The most powerful nuclear nation has its bizarre sense of justice which should give courage for the Indian plural masses to resist dollar colonialism. Americans are above our rule of law. Brown India must be satisfied by White Justice where MNC bosses are indicted.

Washington swears by the Universal Declaration of Human Rights. But it uses a nuclear treaty to leverage things to its own advantage. India has no guts to call this bluff. We have MNCs with cosmic jurisdiction. Anderson is an American, so is Union Carbide. Its ukase is just on Asian fuel in earth. Indian justice is for municipalities and panchayats, not beyond.


The great nuclear folly

The polluter pays, but the price must be right.


MANY Indian governments have pushed some anti-democratic or unconscionable laws and policies. In 1984-85, Rajiv Gandhi blundered on the Shah Bano case and opened the Babri Masjid’s gates to Hindu communalists, eventually catapulting them into power. In 1998, the BJP conducted nuclear tests and tried to rewrite the constitution. The first United Progressive Alliance government sought the US nuclear deal like nirvana — splitting society, even the nuclear establishment. Now, UPA-II has embraced its own folly — the civil liability for nuclear damage bill, which caps nuclear accident liability. The government couldn’t introduce the bill in the Lok Sabha because non-UPA parties and its own constituent, Trinamool Congress, opposed it. It makes no sense to cap the liability for a potentially catastrophic mishap in an accident-prone, highly hazardous industry, whose radioactive fallout can produce cancer and contaminate large areas for centuries.



All 430-odd nuclear reactors worldwide can experience a reactor-core meltdown, like at Chernobyl (Ukraine, 1986). Till 2007, 63 potentially catastrophic nuclear accidents were documented, the including hair-raising loss of coolant accidents (LOCAs). In a LOCA, the coolant — usually water, which must continuously draw out heat from the core — is lost through leaks, evaporation or chemical reaction. Unless the LOCA is contained, the core overheats, and a runaway chain reaction leads to a core meltdown. Although this probability is low, its consequences are catastrophic — hundreds of early deaths from burns and acute radiation poisoning, and tens of thousands from cancers over decades; environmental contamination, and poisoning of vegetation and animal life.

The economic damage from Chernobyl, in which an estimated 65,000 people died from cancer, is $250 billion. Should a Chernobyl occur in Germany, the damage, according to an independent expert study, would be $2,400 to 6,000 billion — equivalent to Germany’s GDP. Capping the liability for such large-scale damage violates two vital safety tenets: the precautionary principle and the polluter pays principle. The first says no activity with inadequately understood hazards should be undertaken. Under the second, those causing damage must compensate the victims.

These principles and the absolute liability notion have been upheld by the supreme court of India in many judgments deriving from Articles 21 (right to life), and 47 and 48A (improving public health and safeguarding the environment ) of the constitution. In a 1996 case, the Court held: “Once the activity carried on is … potentially hazardous, the person [responsible] is liable to make good the loss … irrespective [of] whether he took reasonable care …”. Absolute liability extends to restoring environmental degradation. The nuclear liability bill violates these principles. It artificially caps total liability for an accident at $ 300 million special drawing rights, or about Rs 2,300 crores and the operator’s liability at Rs 500 crores. The difference is to be made up by you and me. This is outrageous. The bill lets nuclear equipment suppliers and designers off the hook. The notions of strict liability and product liability demand that they pay damages in case the equipment is poorly designed or manufactured. Equally obnoxious is the 10-year limit to liability: many forms of radiation injury, including cancer and genetic damage, reveal themselves only 20 years after exposure.

These flaws stem from two 1960s nuclear conventions meant to promote and subsidise nuclear power when it was seen as safe and “too cheap to meter” and hence deserving of subsidy. But not even a tenth of the projected increase in nuclear power has since materialised. The US, once the world’s leading nuclear-power nation, hasn’t ordered a new reactor since 1973. Nuclear power’s contribution to global electricity generation is stagnant — while non-polluting solar and wind energy are growing annually at 20 percent-plus. “Next-generation” fast-breeder reactors, which can conserve uranium by producing more fissile fuel than they consume — has failed everywhere.

Nuclear power is inherently hazardous, because it involves high-pressure, high-temperature processes and great energy intensity. A nuclear reactor is a complex system, whose sub-systems are tightly coupled. A mishap in one sub-system gets instantly transmitted to others, potentially causing a runaway reaction. Nuclear power poses the radiation danger at every step — routinely, even without accidents. The costs of the damage, including treatment, are hard to estimate. Nuclear power generation generates tonnes of radioactive waste which remains hazardous for thousands of years. Science hasn’t found a safe waste storage solution, leave alone disposal method. The costs of long-term storage would be unfairly dumped on society.

India’s experience with the 1984 Bhopal disaster has been terrible. Even today, the plant site and nearby water sources remain contaminated with toxic chemicals, including carcinogens. And nuclear materials are more hazardous than chemicals. That’s why developed countries like Germany, Japan, Austria and Sweden impose unlimited liability on the operator, supplier and transporter, etc., and often demand a $3 billion-security deposit. However, the UPA has latched on to the 1997 convention on supplementary compensation for nuclear damage sponsored by the International Atomic Energy Agency, as if it enjoyed wide acceptance. It isn’t actually in force yet — five states need to ratify it, but only four (Argentina, Morocco, Romania and the US) have. The IAEA’s mandate is to promote nuclear power as safe and economical. It trivialises Chernobyl and only admits to under forms of 5,000 cancers. The CSC follows the Paris-Vienna model and raises total liability per accident to a miserly $986 million.

The sole justification offered for India’s nuclear bill is that without a low liability cap, no foreign nuclear operator will invest in India. But Indians don’t need nuclear power at the expense of safety or constitutional principles. The Rs 500-crore operator liability (even if raised, according to a new proposal) won’t remotely compensate for Indian lives. The bill represents capitulation to US and Indian corporate pressure, and a retreat from the state’s responsibility to protect citizens against hazards. The US, having given India the nuclear deal, is now furiously lobbying to extract nuclear contracts for American corporations. This must stop. The sooner the bill is scrapped, the better for Indian citizens.

Praful Bidwai is an eminent Indian columnist.

E-mail: bidwai@bol.net.