US President Obama’s visit to India may be over, but controversies swirl ranging from the cost of the pinstripe button-up suit of Prime Minister Modi to what exactly has been the solution found to the civil nuclear cooperation conundrum over India’s Civil Liability for Nuclear Damage Act of 2010, which US suppliers found onerous.
During his and Mr Obama’s joint press conference after delegation-level talks at Hyderabad House, Mr Modi said that a solution has been found.
In a press conference that foreign secretary Sujatha Singh had, details were shared grudgingly by a panoply of aides on her two flanks.
Considering that the BJP in the Opposition had led the charge to tighten liability, particularly by extending constructive blame to the suppliers, the reticence can only be read as embarrassment at executing what Mr Modi termed as a “tactical” manoeuvre.
It needs to be recalled that Arun Jaitley in a signed article in Outlook magazine, as the Leader of the Opposition in the Rajya Sabha, had argued for the “principle of strict liability”, adding that the suppliers were in any case subject to the Law of Torts.
He also explained that while the government could assume liability for damages to be paid by a public sector company, were the same done for private operators, “the compensation would be paid by the Indian taxpayers”.
Essentially, the government’s negotiators were told to settle the issue well before Mr Obama arrived in India. While the US was concerned about the “liability” burden, India was unwilling to accept any “tracking” of US material by them outside the IAEA safeguards, including the additional protocol.
The US backpaddled on its demand, thus clearing the path for finalisation of the 123 Agreement and operationalisation of the civil nuclear deal. This is what Mr Modi meant by India conforming to its international obligations.
The onus then shifted to India to present a solution to the liability issue, ironically embedded into the act at the insistence of the BJP while in the Opposition.
The lead Indian negotiators in the ministry of external affairs decided to get all Indian stakeholders in one room and on the same page i.e., the department of atomic energy (DAE), ministry of finance, ministry of law and justice, etc.
They looked at international best practices. They studied 26 international insurance pools and made DAE do a probability safety assessment of a nuclear accident. They examined all current reactor designs and how probable was a nuclear radiation spillage beyond the containment shields.
Then came bargaining with the insurance companies to cover the risk and match it with premiums payable. It was also noted that the extant act only talks of “operator” in Sec. 46, which talks of the act as addition to and not in derogation of any other law i.e., Torts, and an attempt to add “supplier” in the Rajya Sabha was rejected.
The insurance pool thus crafted is provided for in the act, but capped at Rs 1,500 crore. There is in addition, now that India is ratifying its membership of the Convention on Supplementary Compensation (CSC), an additional cushion of 300 million SDRs available. But it is worth noting that neither the US nor China, Russia nor France are signatories to the CSC.
Another issue arising is the safety of the designs, for instance the GE one. Part of the reason is the role of shale gas in the US energy mix and public concern in the West about N-power after the Fukushima disaster.
It is argued that the Westinghouse design is an updated version of the Advanced Heavy Water Reactors, which are the standard DAE design for Indian reactors. This may allow it to be produced in India, particularly as Westinghouse has already tied up with L&T.
The mix of energy has to begin shifting away from polluting thermal/coal units to renewable and nuclear power. But the solution is not for political parties to play politics with this sensitive issue.
After all, the nuclear liability law in India only got stricter because, as the bill was being discussed in Parliament, the Bhopal gas tragedy case resurfaced judicially.
Nuclear power is not an issue that can quietly be settled. Safety concerns spill into public space. It would have been ideal if the Opposition and public had been taken into greater confidence about the “insurance pool” solution crafted by the government.
The government must use both Parliament and media to develop a consensus on such issues. While it is yet unclear if the US corporate sector is satisfied with the compromise, whether Indian opinion are on board remains to be determined.
The writer is a former secretary in the external affairs ministry. He tweets at @ambkcsingh
