(July 20, 2010, Special to ‘Teesri Duniya’)

by Praful Bidwai

The Bill has three principal objectives: to demarcate and channel civil (as distinct from criminal) liability for damage arising from an accident in a nuclear installation; second, to enable and prepare India’s accession to an international treaty called the Convention on Supplementary Compensation (CSC); and third, to facilitate the entry of private operators, whether foreign or indigenous, into nuclear power generation by placing stringent limits on the liability they are asked to bear.

Admittedly, the Bill has two merits. First, it creates a framework for compensating the victims of nuclear accidents without fresh litigation. No such framework exists in India at the moment, and our law of torts (civil wrongs) is extremely primitive. As such, the idea of making some agency liable for compensating the victims through a prior legal arrangement is useful: it is better to have a liability law than an open-ended situation.

Secondly, the Bill recognises that the consequences of a nuclear accident may not be limited to national borders, and provides for liability outside India’s territory. This too is consistent with physical reality: radioactive fallout from a nuclear accident cannot stop at the borders of the state in which the mishap occurs. But as we see below, the Bill’s demerits and flaws vastly exceed its merits.

The primary motivation, purpose and function of the Bill is to channel the liability for a nuclear accident exclusively to the operators of nuclear installations, while exempting their designers, manufacturers and suppliers (except in rare and legally fraught cases) and to cap liability. It stipulates the maximum liability for a nuclear mishap, however serious, at as little as 300 million Special Drawing Rights, equivalent to Rs 2,200 crores. And the liability for the operator of a nuclear facility is capped at a laughable Rs 500 crores. Indeed, the Bill also empowers the government to lower the cap to a trivial Rs 100 crores.

This total accident liability cap (300 million SDRs) translates into a measly $460 million, which is even lower than the compensation of $470 million approved by the Supreme Court of India for the victims of the Bhopal gas disaster way back in 1989. If exchange-rate changes and inflation are taken into account, the sum works out to about one-third of what the Bhopal victims got, which is universally considered shamefully inadequate.

The unwritten script here is that no private, in particular foreign, operators will be willing to invest in nuclear power in India unless they are subsidised through an artificially low total liability cap such as Rs 2,200 crores, of which they pay only Rs 500 crores. The rest of the liability for an accident would be transferred to the government, that is to say, the public, which is in no way responsible for the mishap. This is deplorable in and of itself.

The implicit premise here is nuclear power generation deserves to be supported and subsidised because it is “the technology of the future” and carries immense benefits for humanity, in particular for the people of a developing country like India. This premise is not only question-begging; it is also plain wrong. As we see below, nuclear power has a bleak future globally.

The real motive behind the Bill is more crass. It is to create conditions conducive to investment in nuclear power in India by nuclear power corporations of the United States, which have not won any orders for reactors for more than 30 years. The Americans are telling Indian leaders: “We gave you the India-US nuclear deal, an exceptional arrangement under which your nuclear weapons were normalised and regularised although you haven’t signed the Nuclear Non-Proliferation Treaty or any other nuclear restraint agreement; we have facilitated the resumption of civil nuclear commerce and dual-use technology transfer to you; we piloted the deal through the International Atomic Energy Agency and the Nuclear Suppliers’ Group and overcame various obstacles. And what do we get in return? Nothing. All the new nuclear reactor contracts in India are going to the Russians and the French. Our corporations must have a piece of the action, a slice of the nuclear cake. They will only invest here if there is a law which caps nuclear accident liability at a low level.”

Hence the Bill. The liability caps set by the legislation bear no relationship to the likely damage from an accident involving a radioactivity release. An accident like the Chernobyl reactor core meltdown of 1986 in Ukraine will wreak damage upon human and animal life, the environment and the infrastructure running into hundreds of billions to several trillions of dollars, and make huge swathes of land uninhabitable for centuries.

The initial damage from Chernobyl was estimated by the Ukrainian government at $250 billion. It may turn out even higher as more cases of cancer and genetic damage come to light, necessitating expensive treatment. German researchers estimate that a Chernobyl-type accident in Germany will cause damage in the Euro 2,000-to-5,000 billion range. This equals the entire annual GDP of the world’s third-biggest economy.

Every single of the world’s 430-odd operating commercial reactors can undergo a core meltdown, releasing vast amounts of radioactivity. The radioactivity, carried in dust clouds, is liable to spread over hundreds of kilometres depending on the wind direction and speed. So far-reaching was the impact of Chernobyl that thousands of sheep in faraway Scotland and reindeer in northern Sweden had to be slaughtered because they had fed on radioactively contaminated grass.

All reactor types currently in operation the world over are vulnerable to grave accidents. Sixtythree serious accidents with a catastrophic potential were documented worldwide till 2007. Some of these are of a hair-raising kind, called loss of coolant accidents (LOCAs). In a LOCA, the coolant—usually water, which must continuously draw out the heat produced by fission from the core—is lost through leaks, evaporation or chemical reaction. Unless the LOCA is contained, the core overheats and barely controlled fission becomes a runaway chain reaction, leading to a core meltdown. That’s what happened at Chernobyl.

Nothing suggests that the damage from an Indian reactor-core meltdown will be less severe. Even lesser accidents like spills and leaks of nuclear material during transportation and handling, LOCAs, other radioactivity releases, and overexposure of the public to routine non-catastrophic emissions and effluents containing dangerous material, can cause serious damage.

It is wrong in principle to cap nuclear liability. Logically, a liability law must provide for compensation commensurate with the maximum likely damage from an accident. The nuclear Bill does the opposite. It wishfully assumes that no accident will cause damage exceeding Rs 2,200 crores. Alternatively, it holds that the public does not deserve compensation beyond that sum. The first assumption runs against whatever physics, organisation theory and risk assessment science knows about nuclear power hazards. And limiting compensation to a trivial level on the second premise is downright immoral.

Nuclear technology is extremely hazardous, indeed uniquely so: it is the only mode of energy generation which is capable of catastrophic accidents. Nuclear reactors concentrate within a small volume large quantities of fissile material as fuel, equivalent to several hundred multiples of the critical mass needed to make a nuclear bomb (which is of the order of 5 to 20 kilogrammes). Their core must be cooled effectively and without interruption so that it does not overheat, leading to a runaway reaction.

All nuclear power generation based on existing reactor designs is inherently hazardous because it involves large, complex systems, within which various sub-systems are tightly coupled, leading to a rapid transmission of a problem event to the entire system and hence to catastrophic accidents. The probability of occurrence of catastrophic nuclear accidents is admittedly low. But their consequences are unacceptably large.

For instance, an estimated 65,000 to 95,000 people perished in the Chernobyl accident. This is more than three times the number killed in Bhopal. And the death toll mounts by the month. An Indian Chernobyl could conceivably kill even more people given our cities’ high population density. Such estimates are in line with forecasts made in the mid-1970s by US Nuclear Regulatory Commission-sponsored studies, with 3,300 early deaths plus 45,000 early illnesses in each serious accident.

More recent estimates of likely damage run into scores of billions of dollars. It makes no ethical, technological or practical sense to subsidise nuclear power by depressing the liability burden or transferring it to the public.

Nuclear technology is now 60 years old, and as mature as it can be. Indeed, it is turning geriatric. But it cannot be said to have evolved significantly as regards safety. According to a post-Chernobyl study by an independent expert body, Gruppe Ökologie (Germany), all existing reactor types have safety problems and are vulnerable to all kinds of mishaps that can produce a catastrophic accident. Very few new reactors have been built in the developed countries since Chernobyl. No nuclear reactor has been ordered in the U.S. since 1973, even before the Three Mile Island accident of 1979.

Two new designs—Westinghouse’s AP-1000 and Areva’s European (since pompously renamed Evolved) Power Reactor (EPR)—have just emerged, which are claimed to be “Generation III-plus” and safer than the designs of the 1970s. But they have run into problems with regulatory authorities in the US, France, the UK and Finland, where the first fully market-driven nuclear project in Europe is now in progress, called Olkiluoto. The US Nuclear Regulatory Commission has raised serious questions about the AP-1000 design, in particular its structural soundness in seismic conditions. It has not cleared the design.

The Olkiluoto EPR is in serious trouble—with a 60-percent cost overrun and three-and-a-half years behind schedule. It may well be abandoned. Scrapping the Olkiluoto project will produce a potentially fatal setback to the global nuclear industry.

At any rate, the poor safety record of the global nuclear industry warrants a liability compensation regime which is strict and based on the Precautionary Principle and the Polluter Pays Principle. That alone can provide the industry the incentive to redesign reactors for greater safety and operate them with abundant caution.

The Precautionary Principle says no activity with potentially large but inadequately understood hazards should be undertaken. Under the Polluter Pays Principle, those causing damage must fully compensate the public. These cardinal principles and the absolute liability notion have been upheld by the Supreme Court of India in many judgments as deriving from Articles 21 (right to life), 47 (responsibility to improve nutrition and public health) and 48A (improving the environment and safeguarding forests).

For instance, in the Vellore Citizens Welfare Forum case (1996), the Court held: “Once the activity carried on is hazardous or potentially hazardous, the person carrying on such activity is liable to make good the loss … irrespective of whether he took reasonable care …”. This absolute liability extends to “the cost of restoring the environmental degradation …”.

The Bill violates these principles by encouraging the hazardous industry that nuclear power generation is, and by lightening its responsibility to compensate its victims by Rs 1,700 crores.

The Bill is modelled on two nuclear liability conventions of the early 1960s, when the nuclear industry was in its infancy, held out extravagant hopes (soon to be betrayed), and received huge undeserved subsidies which it claimed it needed to grow. These were the “Convention on Third Party Liability in the Field of Nuclear Energy”, or the Paris Convention of the OECD, and the Vienna Convention on Civil Liability for Nuclear Damage of 1963 under the International Atomic Energy Agency auspices.

The global nuclear industry, working through the IAEA, recently sponsored the Convention on Supplementary Compensation for Nuclear Damage which works within the same framework but doubles the maximum compensation, to $986 million, by allowing signatory states to access a part of the global compensation pool which it creates. The CSC has been paraded as a tried and tested, widely respected international treaty—“the international regime for compensation payment in case of nuclear accidents”, as Minister of State for Science and Technology Prithviraj Chauhan put it.

In fact, the CSC is not in force. Since it was opened for signature in 1997, the CSC has only been signed by 13 states and ratified by only four (Argentina, Morocco, Romania and the US). To enter into force, it needs ratification by a minimum of five countries with a significantly large nuclear power generation capacity.

Most developed countries have their own domestic laws on nuclear liability. Although they still tend to be soft on the nuclear industry, their compensation levels are not as sordid as the CSC’s. States like Germany, Austria and Sweden place no cap whatever on liability. Even the US has a corpus fund of $10.7 billion for compensation.

The CSC exists only on paper today despite the IAEA’s exertions. Lest it be thought that the IAEA is some kind of impartial body as regards nuclear safety or regulation, its very charter commits it to promote nuclear power on the presumption that it is safe and economical. On safety, the IAEA is as prejudiced as any international agency can get. It refuses to involve another UN agency, in particular the World Health Organisation despite its strong health mandate, in assessing the damage from Chernobyl. It severely minimises the damage. For many years, it blatantly claimed that only 32 people died in the accident—primarily firemen.

The Bill is flawed on other counts as well. Four of them are noteworthy: facilitating the entry of private sector operators into nuclear power; indemnifying the suppliers and manufacturers of nuclear plants of liability; time-barring liability claims; and appointing the Atomic Energy Regulatory Board as the agency to determine the occurrence and severity of a nuclear accident.

It is unacceptably dangerous to allow private sector companies into nuclear power even when there is a strong regulatory agency which can rigorously evaluate their designs, construction standards and operating practices for safety and certify them as reasonably safe. Profit maximisation is the raison d’etre and driving force of private enterprise. Private operators are innately prone to cutting corners in matters of safety in order to save costs and earn high returns on investment. Given that nuclear power generation is inherently hazardous, such measures can have extremely risky consequences.

India has a generally poor safety culture in its industry and is an accident- and disaster-prone society without a tradition of strict and rigorous enforcement and monitoring. India has no nuclear regulatory authority worth the name. This reinforces the case against the entry of private operators. Yet, this is facilitated by Clauses 6 and 7 of the Bill, which contains two categories of operators: the Central government, and others—meaning private and foreign operators.

Second, while channelling liability to the operator, the Bill lets the manufacturers and suppliers of nuclear plant and equipment virtually off the hook. If defective designs are at the root of a mishap (as in Bhopal), the designer must be made liable. Or else, we will end up punishing a subordinate agency, like the Indian subsidiary of Union Carbide, while exonerating the culpable parent.

True, Clause 17 of the Bill does specify some conditions under which the operator can legally sue the supplier. But these are so extreme and hard to establish—e.g. “wilful sabotage”, or intent to cause harm—that it would be practically impossible to secure a judgment extending or transferring a part of the liability to the designer/supplier. The Bill’s language on “the right of recourse” of the operator does not and cannot ensure the right will not be given up.

Third, the Bill limits the period within which a victim may claim compensation to 10 years. But the harm caused by radiation, such as cancer, chromosomal damage or genetic mutation, usually reveals itself much later, after 20, 30, even 40 years. Given the possibility of genetic transmission of damage from parents to children, it makes no sense to effectively bar the latter from claiming compensation for birth defects, which are widely noted in respect of radiation and chemical injuries.

Finally, the Bill authorises the Atomic Energy Regulatory Board as the sole agency which is empowered to report, investigate and determine the occurrence of a nuclear accident. But the AERB is not an independent agency. It is a subsidiary of the Atomic Energy Commission, whose chairman is the ex officio secretary of the Department of Atomic Energy which operates all Indian nuclear installations at present. The AERB has no independent budget, equipment or personnel of its own. So, it cannot be considered an independent and objective authority with no conflict of interest with operators.

The AERB’s ambit is severely limited to only those nuclear installations which are declared as “civilian” under the military-civilian separation plan negotiated with the US and the IAEA under the US-India nuclear deal. Its remit does not even include all the 22 power reactors in operation or under construction, but only 14 of them. More crucially, it excludes all R&D (research and development) and military facilities and many other nuclear installations, such as uranium mines, fuel fabrication plants, etc. The entire huge set-up of the Bhabha Atomic Research Centre is excluded.

The point is not technical. The AERB does not even have access to a large number of nuclear facilities. It cannot possibly investigate or confirm the occurrence of an accident in all of India’s nuclear facilities, which are by definition covered under civil liability. The crucial distinction here is not between civilian and military/strategic/R&D facilities, but between civil and criminal liability. The Bill thus exclusively authorises an agency to conduct a function that it cannot conduct.

Nor can it be claimed that the AERB detects or discovers nuclear mishaps on its own or in advance of other agencies/persons. For instance, many recent mishaps like the Kaiga tritium exposure and the cobalt-60 radiation case in a Delhi scrapyard were detected and reported by others, including the media, the police and medical personnel.

The Bill, then, is fatally flawed on numerous counts. It is designed to shield the nuclear industry from discharging its public responsibility. Its foundational premises go back to the 1950s and 1960s, a period when the hope was propagated that nuclear power would be safe, economical (“too cheap to meter”), abundant, and free the world from fossil-fuel dependence.

The promise has been comprehensively betrayed. Not even a tenth of the projected increase in nuclear power has materialised. Globally, the nuclear power industry has lost $1,000 billion in subsidies, failed plants, abandoned projects, cash losses and unpaid costs left for society to bear. Nuclear power has been described as the biggest industrial failure and managerial disaster in world.

No “nuclear renaissance” is happening in the world. The nuclear power prospect is gloomy. Contrary to claims, nuclear power is not growing, but shrinking. Last year, global nuclear electricity generation fell by 2 percent, on top of another 2 percent decline in 2008.

Today, nuclear power contributes just 12 percent to the world’s electricity generation, and less than 5 percent to its primary energy production.

More than 110 of the world’s 430 reactors are due to retire in the next 5 to 10 years. The number of reactors under construction or planned reactors is not even one-third of the number due to retire.

Nuclear reactors show a negative “learning curve”: it now takes 10 to 13 years to construct a reactor, compared to 8 years in the 1970s. The costs of nuclear power are unaffordable: about twice as high as electricity from renewable sources like wind and biomass, leave alone fossil fuels like gas or coal.

These are all signs of an exhausted geriatric technology which has belied its promise and is not about to undergo a rejuvenation or renewal through innovation. It would be extremely unwise for India to promote nuclear power generation, especially at the cost of artificially reducing nuclear accident liability, as the Bill aims to do.

Does this mean that the Bill should be abandoned? The answer is yes, unless it is severely amended in the following manner.

  • There must be no cap on liability for an accident, or on operator liability.
  • No private operator should be allowed in nuclear power generation.
  • Initial or interim compensation must be paid without litigation from an escrow account into which each operator must deposit a sum such as $1 billion before commissioning and running a reactor.
  • Compensation must be adequate and commensurable with the magnitude of damage and not determined by the profits and insurance cover of the operator.
  • The operator must have “the right of recourse” to sue the manufacturer/supplier; this right cannot be rescinded, even voluntarily.
  • · The AERB must be made fully independent of the DAE; its ambit must be extended to all nuclear facilities, civilian, military, R&D, and so on.
  • The AERB must be made to consult and report to an independent commission, comprised of governmental and non-governmental experts, eminent citizens, social scientists and civil society representatives. This alone can ensure that its findings about the occurrence of accidents and their severity stand up to scrutiny.
  • The Claims Commission must include independent medical, environmental and rehabilitation experts with impeccable credentials. Its award must be made adjudicable in the courts.

This is a big agenda which involves radically reforming the Bill. But the nature of the nuclear industry and its hazards warrant nothing less.—end--