US, India still thrashing out issues on nuke liability laws

The US administration isn't entirely happy with Indian concessions limiting the liability of nuclear equipment suppliers in the event of accidents. More hard bargaining lies ahead.

Uttara Choudhury November 24, 2011 05:57:29 IST
US, India still thrashing out issues on nuke liability laws

New York: US frustration with India's domestic nuclear liability laws is well known. America has been long-faced about India's legislation, which it contends is tough on suppliers of reactors. Prime minister Manmohan Singh did try to convince president Barack Obama in Bali last week that India had gone "some way" to quiet America's concerns by announcing new rules that cap the liability of nuclear equipment suppliers in case of accidents.

US India still thrashing out issues on nuke liability laws

Indian concessions limiting the liability of nuclear equipment suppliers haven't gone far enough to assuage the US administration. AFP

But after raising the issue on the sidelines of the East Asia Summit in Bali, Obama merely heard Singh out and kept his mouth diplomatically shut. Obama now has the state department making America's unhappiness known. Diplomats from Washington are reportedly in talks with their counterparts in New Delhi over how liability is determined in an accident.

"We want to ensure that our companies can compete freely and fairly in this industry... So we want to make sure that legislation on the books in India does not disadvantage American firms," state department spokesperson Victoria Nuland told reporters.

"This is an issue we have not yet resolved with the Government of India and we're continuing to work on it because we think it's very important for both countries to finalise all of the terms that offer so much promise for both of our people," Nuland said.

"This is an issue that we've been discussing. It's an issue that both governments know we have an interest in resolving. Sometimes these things take time, so we're gonna continue to work on it," she added.

India's parliament last year passed a nuclear liability act that made companies liable to pay compensation without monetary limit in the event of a nuclear accident. But India posted new rules earlier this month, called Civil Liability for Nuclear Damage Rules 2011, effectively limiting the liability on foreign suppliers and imposing time constraints on claimants seeking compensation.

The new rules implementing the act have laid a cap of Rs 1,500 crore as damages that can be claimed by a plant operator from reactor suppliers in the event of faulty equipment causing an accident. The rules also set a five-year time limit within which the operator can claim damages from the supplier. This is a departure from the earlier clause in the nuclear liability bill that made nuclear equipment suppliers liable for 80 years in the event of an accident.

However, these new rules still don't assuage all the concerns of foreign suppliers, which include GE Hitachi Nuclear Energy and Westinghouse Electric Co. US companies argue that international norms put the onus on the operator of nuclear power plants to maintain safety, not on equipment suppliers. They want India's nuclear liability laws to be in alignment with the international standards of the Convention on Supplementary Compensation for Nuclear Damage (CSC).

The CSC was adopted by the International Atomic Energy Agency in 1997 and seeks to establish a uniform global legal regime for the compensation of victims in the event of a nuclear accident. Fifteen nations have signed the convention, agreeing to limit compensation claims against the nuclear industry and protect the interests of private nuclear suppliers. India signed the convention last October but is yet to ratify it.

Singh said after meeting Obama that he had stressed that India had "gone some way to respond to concerns of American companies and within the four corners of the law of the land, we are willing to address any specific grievances."

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