Foreign suppliers to be let off even if accident caused by their gross negligence ...
10 June 2010
Government dilutes nuclear bill under U.S. pressure
New Delhi: At Washington's request, the Manmohan Singh government has agreed to delete a key provision of the draft civil nuclear liability bill allowing American suppliers to be sued for recovery of damages in the event of an accident caused by gross negligence on their part.
Although the bill channels all liability for a nuclear accident on to the operator of the facility, Section 17 of the draft tabled in Parliament last month allows the operator a ‘right of recourse' — legalese for the right to recover any compensation it is forced to pay — under three circumstances. These are if (a) such a right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted from the wilful act or gross negligence on the part of the supplier of the material, equipment, or of his employee, and (c) the nuclear incident has resulted from the act of commission or omission of a person done with intent to cause nuclear damage.
Of these, only (a) and (c) find mention in the model law specified by the Convention on Supplementary Compensation for Nuclear Damage (CSC). The CSC, which India will accede to, however, does not prohibit the inclusion of additional provisions. Indeed, some countries have already included gross negligence by suppliers as grounds for invoking the right of recourse in their liability laws. Article 4 of the South Korean Act on Compensation for Nuclear Damage, for example, includes language similar to 17(b) of the Indian draft.
When the Indian bill's provisions were made public, senior officials took pride in the inclusion of 17(b), which they said was needed to deter suppliers from being negligent taking their safety obligations lightly; 17(a) alone was inadequate, they said, since no supplier agreed to accept liability of negligence in a contract. But pressure from Washington seems to have prompted a rethink.
On March 8 and April 1, The Hindu had reported how the U.S. nuclear industry was upset with 17(b) and wanted it deleted for fear it would “open the door to more lawsuits.” The government has now obliged the American side by getting rid of this sub-clause entirely.
Window for action
The only window for legal action against a supplier of faulty or unsafe equipment is now Section 46 of the nuclear bill, which says the Act's provisions “shall be in addition to, and not in derogation of, any other law for the time being in force.” This, say Indian officials, will allow the filing of tort claims and even criminal charges in case a nuclear accident is caused by negligence on the part of the nuclear operator or its equipment suppliers.
But the draft bill contains no provisions to make the filing and pursuit of these claims or charges easier, raising the prospect of lengthy and eventually fruitless litigation of the sort the victims of the Bhopal gas disaster have had to endure for 25 years.