Lok Sabha passes the Nuclear liability bill

Prime Minister Manmohan Singh said charges that his government’s push for the contentious bill was motivated by his concern for American interests and corporations were “far from the truth’’. The bill was later passed by the Lok Sabha by a majority of 252-25 because of the BJP’s support. Singh’s defence was prompted by opposition speakers like the BJP’s Jaswant Singh who said the government was trying to “hustle’’ Parliament into passing the liability bill ahead of US President Barack Obama’s visit in November. The PM said this was not the first time he was being accused of working for American interests. Singh said that just as his 1992 budget—then criticised as “made in US’’—had stood the test of time, history would judge the government’s steps to end what he called a nuclear apartheid imposed on India. “To say that this has been brought to promote American interests, to promote American corporations, I think, this is far from the truth,’’ he said. “I beg of this House to pass this bill with unanimity,’’ the PM said. Singh’s denial, however, also marked an acknowledgement of the larger perception about his being pro-America, especially since he had staked the fate of the UPA-1 over the nuclear deal with the US.

The passage of the N-liability bill with the BJP's support on Wednesday marked a huge respite for the government which had slogged hard for the enactment of the law, crucial to the operationalization of the nuclear deals India has signed with the US and other countries. But that it had to give in to the BJP's insistence on a crucial change regarding the liability of the supplier in the draft the Union cabinet cleared on Monday marked a setback to those in the government and industry who opposed the demand to toughen the clause. The version of the bill cleared by the cabinet had held that the supplier could not be held liable unless he was found to have intentionally caused a mishap--a bar of evidence almost impossible to clear. The Congress had to agree to the BJP's demand because it did not want to strike the deals it signed with the BSP, SP and RJD during the confrontation with the opposition over cut motions in the Budget session. In his impassioned intervention, Singh pointed out that the civil liability for nuclear damage bill was the culmination of a journey begun in 1999 when the NDA, and not the UPA, was in power. He said the NDA's decisions indicated a similar assessment of events. Though the bill's passage was a forgone conclusion with the Left's insistence on a division rejected 252-25, the PM in his brief speech set out a case for the use of nuclear power as an essential option, particularly in areas away from coal mines. Coal also had an environmental price tag, he said. Singh said he agreed with Jaswant Singh that nuclear energy was a serious issue and added that he was committed to the safety of nuclear power plants. He dismissed the Left's arguments on energy sources like coal and hydel power and said the bill was a much-needed step in the right direction.

What is nuclear liability Bill?
The Civil Liability for Nuclear Damage Bill, 2010 was crafted after the India-US nuclear deal went through in 2008. In order to facilitate nuclear trade with global companies it is necessary for India to enact the law. It aims to define financial and legal liabilities by operators, suppliers of equipment, vendors and government in case of a nuclear accident.
Why is the law necessary?
India is negotiating with four foreign firms engaged in making large nuclear reactors. All of them want a specific limit on liability to avail insurance cover. Though even the French and Russians want a law, there has been consistent US pressure for the legislation as two Japanese-US firms are also in the fray.
How does it impact India’s nuclear power plans?
India wants to rev up nuclear power production from 4,000 MW to 40,000 MW by 2020. Getting foreign firms to build mega units of 1650 MW and setting up 10,000 MW parks is key to this strategy. These plans were held up first by the Left’s opposition to the India-US nuclear deal. Then approaching 2009 elections made govt cautious.
What are its salient features?

The bill envisages a three-tier liability system where the operator (the bill says only govt and govt-owned companies) assumes a liability up to Rs 1500 crore where no proof of culpability is needed. The second tier makes govt liable upto 300 million SDRs or Rs 2,133 crore. In the third tier, India can draw upon funds pooled under the Convention of Supplementary Compensation if it joins the group.
What is “no-fault” liability?
This means victims of a nuclear incident will be compensated even without any fault being fixed for the same. The Bill fixes nofault liability on operators so that payment to victims is prompt and does not get entangled in legal tangles like in the Bhopal gas tragedy.
What were the controversies about?

Operator liability — initially Rs 500 crore — was deemed too low. After BJP, Left and some experts opposed the bill govt raised it to Rs 1500 crore. Then, govt was accused of diluting liability of suppliers as the bill said a “willful act” and “gross negligence” had to be established. Some felt that CSC tied in India to unnecessary international commitments. If the damage exceeds upper limit of $ SDR 300 million there was no procedure to higher compensation.
What was the “deal” between the govt and BJP?
First the report of the standing committee examining the bill was mysteriously altered to link specific supplier liability to a written contract with an operator. Then Govt went back on an agreement to specifically state supplier liability irrespective of a contract. The bill in clause 17 (b) said an operator can pursue a supplier in court if a nuclear accident was the result of an "act of supplier or his employees done with the intent to cause nuclear damage". The use of the word intent was again seen to be a sop for foreign suppliers.
BJP and Left said "intent" meant making supplier liability contingent upon proof of deliberate act. Govt has dropped the word.