Government diluting nuclear liability law to help US firms: Opposition

NEW DELHI: The government's effort to find an honourable way around the constraint of the nuclear liability law without actually violating it ran into rough weather on Thursday with the opposition accusing it of seeking to dilute the law for the sake of US and other foreign suppliers.


The opposition seized upon attorney general Goolam E Vahanvati's opinion, as reported in TOI, that the country's nuclear operator NPCIL could waive the right to recourse to suppliers' liability in a commercial contract for a foreign-supplied nuclear plant, to allege that the government was seeking to dilute the provision in the nuclear liability law that would hold foreign reactor suppliers liable in cases of mishaps caused by faulty and defective equipment.

The government's decision that an early works agreement between NPCIL and Westinghouse could be cleared by the Cabinet Committee on Security without having to seek the nod of the Atomic Energy Commission was cited by the BJP and Left as evidence of government's desire to undo the liability law for the sake of American companies ahead of PM Manmohan Singh's US visit at the end of next week.

With BJP and Left alleging that the government would use the AG's opinion to waive the liability of foreign suppliers, the Department of Atomic Energy (DAE) clarified in a statement that there was no question of subverting Indian law.

"Foreign suppliers as well as domestic vendors have raised a number of queries with regard to the manner in which the Civil Liability for Nuclear Damage Act, 2010 and its associated rules will apply to their contracts. Since these queries involve questions of law, Department of Atomic Energy sought the opinion of the ministry of law and justice on these issues. This will be examined by the Department of Atomic Energy and NPCIL," DAE said.

Foreign minister Salman Khurshid on Thursday said the law and Parliament's approval remained supreme. "The protracted negotiations that have taken place between India, the US and commercial companies in the US have been for this reason that we have stood on our ground. We have said that whatever position Parliament has taken, there no question of retreating from it. We have been convinced, and have tried to convince the US negotiators that whatever basis we have of our agreement, there is adequate scope in that for them to get the protection that they legitimately deserve."

When questioned in 2012, the MEA too had held the view that the operator had the right to choose not to exercise the right to recourse, and thereby limit the liability for the supplier.

The US has been very critical of India's liability law, and this is generally believed to be one of the major hurdles to the relationship. The PM, who made the nuclear deal the centrepiece of UPA-1, has been wanting to fix the problems with the law, but the allegations of sellout underlined once again that he has only limited maneuver space.

The CCS is scheduled to meet on Tuesday to decide on the early works agreement with Westinghouse. This agreement, as reported by TOI, opens the way for detailed and confidential discussions between the two sides.

At the heart of the government's actions is this — the government's signature achievement, a nuclear deal, to enable India to access clean nuclear power by allowing foreign-origin reactors has come unstuck because of the provision in the law holding foreign suppliers liable.

"The government can do one of two things — keep the law's provisions and make nuclear power horribly expensive. Or lower the cost of entry for foreign players, while building strong safety mechanisms. We have chosen the latter," said an official close to the development.