N-bill liability cap hiked to Rs.1,500 crore, suppliers’ liability fixed (Roundup)

NEW DELHI - Relenting to key concerns of the opposition, a parliamentary panel Wednesday proposed to triple the liability cap in case of a nuclear accident to Rs.1,500 crore (about $322 million) and also sought to make suppliers of atomic equipment accountable if it is found defective.

The proposed changes in the legislation that earlier faced unrelenting hostility from the opposition parties have brightened the chances of the Civil Liability of Nuclear Damage Bill, 2010, during the monsoon session of parliament that concludes Aug 31.

The government is keen to get the legislation through before US President Barack Obama visits India in November as it is a prerequisite for implementing the 2008 India-US civil nuclear deal.

The 31-member parliamentary standing committee on science and technology tabled its report in both houses of parliament Wednesday amid noisy protests and accusations of a deal between the ruling Congress and the opposition Bharatiya Janata Party (BJP).

The bill was referred to the standing committee after it was introduced May 7 during the budget session of parliament.

The report recommended trebling the operator’s compensation cap from Rs.500 crore to Rs.1,500 crore, “specially keeping in view the present level of inflation and the purchase value of the Indian rupee”.

The panel recommended that while the government may increase the compensation cap, it should not decrease it under any circumstances. It also recommended doubling the period for victims’ claims to 20 years.

Private players eyeing a piece of the nuclear pie will, however, be disappointed as the report recommended shutting them out from the sector in India, leaving the operation of nuclear plants in the hands of the government or government-owned companies.

The committee has also suggested expanding the definition of nuclear damage by including the immediate and long-term health impact on a person and loss of life and personal injury, as also including the word “environment” as defined by the Environment (Protection) Act, 1986.

Giving in to a key demand of the BJP, the panel recommended the inclusion of a clause specifying suppliers’ liability, a crucial concession that helped the government to win the party’s support.

Agreeing that the expression “willful act or gross negligence” in clause 17 (B) in the draft bill was “quite vague,” the panel recommended that it needed to be rephrased as: “The nuclear incident has resulted as a consequence of latent or patent defect, supply of sub-standard material, defective equipment or services or from the gross negligence on the part of the supplier of the material, equipment or services.”

This clause became a rallying point for the opposition, which missed no chance in lambasting the government for allegedly crafting an escape route for foreign suppliers who were averse to taking the blame in case of an accident.

The panel’s report makes it clear that the operator should have a written contract with the suppliers providing for the right of recourse and says that an operator must compensate victims first and then settle liability with the supplier.

Speaking to reporters, T. Subbarami Reddy (Congress), the chairman of the parliamentary panel, said the main objective of the bill was to provide for a mechanism of prompt payment of compensation to the victims in case of a nuclear accident.

The bill also provides for the appointment of a Claims Commissioner and a Nuclear Damage Claims Commission to dispose off claims within three months.

Stressing that the the bill was needed to boost power production in India, he said the Left members had given a note of dissent but all other members backed the panel’s recommendations.

The committee, which completed its work after an extension of more than a month, heard about 70 witnesses, including secretaries of the government, NGOs, industry, trade unions, experts and insurance companies. The panel visited nuclear facilities at Kalpakkam and Tarapur and also invited suggestions through advertisements in newspapers.

The liability issue became a hot political potato after a fresh round of outrage in India when a court in Bhopal June 7 sentenced seven people to two years in jail for the Dec 2-3, 1984 Bhopal gas tragedy that killed thousands instantly and many more over the years.

The government has also filed a curative petition in the Supreme Court on its judgment reducing to $470 million from $3.3 billion the compensation sought from Union Carbide, the US-based owner of the plant.

Surprised by the support of the BJP, Samajwadi Party and Rashtriya Janata Dal (RJD) accused the government of a trade-off — the BJP lending support to the civil nuclear liability bill in lieu of letting off Gujarat Chief Minister Narendra Modi in the 2005 Sohrabuddin Sheikh staged shootout.

“They have struck a deal and Modi has been exempted from the (Central Bureau of Investigation) probe in the Sohrabuddin fake encounter case,” Samajwadi Party leader Mulayam Singh said.

RJD chief Lalu Prasad said the non-United Progressive Alliance and non-National Democratic Alliance parties will “bring the issue in parliament”.