India is channelling its civil liability for nuclear damage bill through Parliament in the Monsoon Session and is already under pressure over the draft legislation which fixes the maximum liability for an nuclear incident at Rs 2,385 crores and the caps the liability of the operator, whether public or private, at Rs 500 crores.
The liability has to be capped for insurance reasons or the cost of producing nuclear electricity would be unaffordable, admits British energy expert Antony Froggatt.
However, he said the amount can be increased if the legislation identifies different tiers of accountability, like it is done in Germany and the United States. “The primary responsibility is with the operator, then you have a system whereby all of the nuclear operators within the country have a financial responsibility and then you have the state as the third tier. This system basically just increases the financial resources available in event of an accident,” he said. Pointing to the BP case, Mr Froggatt said that political and media pressure made the British oil giant’s liability for offshore oil drilling in the US, which only amounted to $75 million, ineffective as BP agreed to pay out in excess of $20 billion in compensation. “I don’t know what the widespread ramifications of the BP issue will be. It is very clear that political pressure was exerted on BP and BP said it will come out with the money. I don’t know whether or not legally BP could have held out and said, ‘No, no, no. This is what law says and our maximum liability is $75 million. All of you people who wish to have money, we are sorry, but our responsibility is only this much.’ I just think politically it was impossible for them to do so and the value of their shares and all the rest of it make this a worthwhile trade-off,” he added.
Comparing the BP issue with the Bhopal disaster, Mr Froggatt said, “Taking the example of the Bhopal gas tragedy, there you have a situation where it took many decades and compensation was not perceived to be adequate. In some ways, BP and Bhopal are the two extremes of the liability issue and who knows what will happen in the future.”
Civil society groups in India have been lobbying the government to increase the financial liability to unlimited. With the debate on the bill expected in the Monsoon Session, it remains to be seen whether MPs take heed of the Bhopal tragedy and 1986 nuclear disaster at Chernobyl, Ukraine, and ensure equitable procedures for compensation available to Indian citizens in the event of an accident.