India Rewrites Nuclear Rules

Commentary | September 07, 2010

Writing for India’s Mail Today, Kanwal Sibal, a former foreign secretary of India and a member of EWI’s Board of Directors, assesses the probable impact of the controversial Civil Nuclear Liability Bill, recently passed by the Indian Parliament.

The bill, which finalized the civil nuclear agreements between the United States and India begun under the Bush administration, has drawn heated criticism domestically and internationally -- particularly among U.S. nuclear suppliers. Spurred by collective memory of the 1984 Bhopal disaster, in which thousands of people were killed by poisonous emissions from a pesticides factory, Parliament crafted a bill that would hold suppliers liable in case of nuclear accident. Ordinarily, only operators are held liable.

Much of the controversy over the bill stems from the fact that India is re-writing international civil nuclear law, notes Sibal. But the main thrust of criticism is that suppliers from United States, France and Russia, fearful of risk exposure, will not help bring new nuclear power plants to India. Sibal argues that this is not the case:  “It is not chest-thumping to say that foreign suppliers will find it very difficult to ignore India’s large nuclear market, and ways to adapt to the Indian legislation will eventually be found.”

Some of suppliers’ worst fears about legal repercussion are baseless, according to Sibal: by the new law, a plant’s liability is not automatic, but would need to be established in court, and insurance amounts would be capped at a “tiny percentage” of a nuclear plant’s budget.

Despite critical reception to the bill, Sibal writes that the bill is ultimately a positive indicator for Parliament’s ability to seek consensus through compromise. As for whether India -- the nuclear community’s newest member-- should be able to alter international civil nuclear law, Sibal points out that for better or for worse, it already has.

Click here to read Sibal’s article in Mail Today.