Skip to main content

US likely to seek abrogation of India's nuclear liability law for the sake of "market reforms", suggests WSJ

By Our Representative
Clear indications have emerged that, following the controversial nuclear deal between President Barack Obama and Prime Minister Narendra Modi, the US would now insist that India should bend and water down the 2010 nuclear liability law, Civil Liability for Nuclear Damage Act (CLNDA). In an unsigned editorial, America's powerful business daily, "Wall Street Journal" (WSJ) has said that the deal was a "test" whether India would allow market forces to play a role in supplying nuclear technology, and if the "red tape" which still exists in the form of this liability is done away with.
Titled "A US-India Nuclear Test", the editorial praises Modi for promising "to cut the notorious Indian red tape that scares away foreign investors, particularly when it comes to liability laws", but insists, quoting top nuclear suppliers and their supporters within the US, that India should actually act.
Pointing out that this is of "crucial importance" to ensure that the two countries keep up with their promise to be “best partners”, the daily says that the 2008 "reconciliation" under which India agreed to open its civilian reactors to international inspections through the International Atomic Energy Agency (IAEA) was put to nought in 2010 with Indian Parliament "enacted liability laws that broke with international conventions and left US power-plant suppliers vulnerable to excessive criminal and civil penalties in the event of an accident."
The daily argues, "Indian concerns stemmed from the 1984 Bhopal catastrophe that killed thousands around an American-owned chemical factory. But placing liability on foreign suppliers rather than local plant operators would effectively bar firms such as General Electric and Westinghouse from the Indian market."
The editorial quotes Westinghouse CEO Daniel Roderick as telling the "Pittsburgh Post-Gazette" that with the 2010 law, “every person in India can sue you. That’s the bigger issue —- to withstand the costs of a billion people trying to sue you.” Westinghouse has been contracted to supply nuclear reactors for the proposed nuclear plant at Mithi Virdi in Gujarat. The daily further quotes former US diplomat Ashley Tellis as saying, “If litigants were able to file suit against suppliers, essentially it could destroy the whole industry.”
The 2010 nuclear liability law, the daily points out, became the main reason for the "foreign firms suspended their multi-billion-dollar construction plans in 2010." It insists, it contributed to the souring relations between India and the US: "Coupled with Indian backsliding on foreign investment in retail, insurance and other industries, along with diplomatic spats over issues such as Afghanistan, the nuclear-liability controversy contributed to years of drift in US-Indian relations."
WSJ believes, the latest nuclear deal with Modi "seeks to clear the impasse by having New Delhi work with state-backed insurers to create an insurance pool for accident victims while indemnifying suppliers against liability." At the same time, it adds, "Whether it will work is unclear." 
While Westinghouse’s Roderick has "echoed Obama in calling the pact a breakthrough", the fact is "his firm and others stressed that they haven’t seen the details", as the "difficulty is that New Delhi will implement the agreement through a form of executive action meant to avoid having to amend the 2010 liability law."
The daily insists, agreeing with what the suppliers like Westinghouse want, "The underlying law allows the government to set up an insurance pool but appears less clear on whether suppliers can be indemnified from claims by accident victims. Suppliers have previously sought amendments to the law, not simply executive action." 
It warns, "So it may be a while before any foreign firm breaks ground on a new Indian power plant."
It says, while it may be "worth celebrating the bonhomie displayed by Messrs Modi and Obama, along with the growing cooperation between US and Indian defense planners", yet "protectionist policies and political dysfunction in New Delhi continue to limit India’s growth as an economic and diplomatic power." 
Praising Modi for his ability to overcome "political resistance", the daily suggests he would hopefully overcome this problem also and go ahead with "pro-market reforms" that would allow the likes of Westinghouse to invest in nuclear generation in India.

Comments

TRENDING

Whistle-blowing IPS officer Sanjiv Bhatt's wife suspects foul play after truck hits her car

By Nachiketa Desai*
Paranoia has seized Shweta Bhatt, wife of suspended Indian Police Service (IPS) officer Sanjiv Bhatt, after the car she was driving was rammed in broad day light. According to Shweta Bhatt, it was beacon light-flashing truck without registration number plate. The incident took place on January 7, just a day ahead of the Gujarat High Court was scheduled to take up the bail application of Sanjiv Bhatt, arrested last year for "involvement" in a 23-year-old case.

Call to support IIM-Bangalore professor, censured for seeking action against Uniliver

Counterview Desk
Sections of the Indian Institute of Managements (IIMs) across India have strongly reacted to the decision to censure Dr Deepak Malghan, a faulty at IIM-Bangalore. Prabhir Vishnu Poruthiyil, who is faculty at IIM-Tiruchirapalli, has sought wider solidarity with Dr Malghan, saying, "The administration has censured Deepak for merely suggesting a meaningful action against Hindustan Unilever for their abysmal environmental record" by “disinviting” it for campus placement.

Morari Bapu, who has installed new statues of Ram, Laxman, Hanuman without weapons

By Sandeep Pandey*
A saint is one who can give some inner peace by his/her voice. This will happen only when s(he) will talk about love and harmony. Morari Bapu is one saint who has been conveying the message of love, peace, harmony, fraternity, etc. Today when a number of saffron clad figures with aggressive posture, spewing venom, fanning hatred to polarise voters are at the forefront of politics of Hindutva it is a relief to see Morari Bapu in a different mould.

99% MGNREGA funds "exhausted", Govt of India makes no additional sanctions: Study

Counterview Desk
A letter, addressed to Prime Minister Narendra Modi, and prepared by senior activists led by Aruna Roy on behalf of the Peoples’ Action for Employment Guarantee (PAEG), and signed, among others, by 80 members of Parliament, has regretted that, despite repeated public statements by his government promising employment and job creation that will boost the country’s growth, the country’s only employment guarantee programme, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), “is being systematically undermined.”

Nuclear reactors sought from French giant "not safe": Letter to Modi on Jaitapur project

Counterview Desk
Amidst reports that the French nuclear giant EDF has submitted a “techno-commercial offer” for the world’s largest nuclear power park proposed in Maharashtra’s Jaitapur nuclear power park in Jaitapur on the Maharashtra coast, Dr EAS Sarma, India’s former Union Secretary in the Minister of Power, and an eminent voice in the civil society, has written an open letter to Prime Minister Narendra Modi, who also heads Department of Atomic Energy (DAE),  protesting the move.

World Bank clarifies: Its 26th rank to India not for universal access to power but for ease of doing business

By Our Representative
In a major embarrassment to the Government of India, the World Bank has reportedly clarified that it has not ranked India 26th out of 130 countries for providing power to its population. The top international banker’s clarification comes following Union Power Minister Piyush Goyal’s claim that India has “improved to 26 position from 99” in access to electricity in just one year.

Rejoinder: Worldwide anxiety post-Fukishima is fading, slowly and steadily

By Dr KS Parthasarathy* 
EAS Sarma, former Secretary, Government of India (GoI) in a letter addressed to the Secretary, Department of Atomic Energy (DAE), GoI, stated that, there has been "worldwide anxiety about the consequences of catastrophic nuclear accidents, either due to manual lapses or natural calamities" (Counterview, December 2, 2018). "In the recent years, globally, the pace of growth of nuclear power has escalated in leaps and bounds, causing a great deal of public concern and apprehension."

Kerala land being acquired using "draconian, anti-people" National Highway Act, 1956

Counterview Desk
In a letter Chief Minister of Kerala Pinarayi Vijayan, senior activists and politicians have insisted that the Kerala government should not agree to "inhuman displacement and buid-operate-transfer (BOT) Toll system", imposed by the Government of India and the National Highway Authority of India, for widening the current National Highway (NH) 66.

Kaiga NPP expansion: Karnataka to get just 400 MW, but lose thick forest, fresh water

Counterview Desk
In an open letter to the chairman and members of the Atomic energy Commission (AEC) on the issue of Kaiga nuclear power plant (NPP) expansion plan in Karnataka, Shankar Sharma, well-known power policy analyst, has argued that that in case of expansion, the site will face “exponential increase in radiation emission risks”, underlining, “Nuclear safety experts identify such a scenario as enhanced risk for NPPs with multiple reactors and shared technical facilities."
Sharma says the questions that also be asked whether Karnataka should lose more than 54 hectares of thick forests and about 152,304 cubic meters of fresh water per day from Kali river for a meager benefit of 400 MW from the Kaiga NPP, for which “there are many benign alternative options available for the state at much lower overall costs to the state.”
Text of the letter: This has reference to the public hearing under the Environmental Impact Assessment (EIA) Rule 2006 of Ministry of Environment, Fore…

Uttarakhand High Court: Biodiversity boards can impose fees on Ramdev's Divya Pharmacy

By Mridhu Tandon
In a significant decision, the Uttarakhand High Court on December 21, 2018 has dismissed the writ petition filed by Divya Pharmacy founded by Baba Ramdev and Acharya Balakrishnan, challenging the demand of the Uttarakhand Biodiversity Board (UBB) imposing fees under the provisions of the Fair and Equitable Benefit Sharing (FEBS).