By Muhammad Umar
President Obama’s expected visit to India is causing hysteria in Indian media. Pundits left and right are already busy making too much out of nothing.
Over the past month, media organizations have speculated that during Obama’s visit, a plan will be announced to finally implement the nuclear cooperation deal.
Although at the moment there is a nuclear cooperation deal between the two countries, it has not been executed due to India’s strict liability law, which makes suppliers liable in case of an accident.
The nuclear suppliers are held to unlimited liability both in time and costs, which discourages American suppliers from taking part in the nuclear cooperation deal.
During his visit to the United States late last year, Prime Minister Modi made a commitment to President Obama to amend the liability act, with the aim of reducing the burden on nuclear suppliers. Modi failed to change the act.
The government has now proposed to sell insurance to those companies willing to supply nuclear materials, in an effort to work around the liability law. This proposal has been a direct result of Modi’s botched attempt at amending the law.
Modi hopes that by offering insurance, he will be able to attract American suppliers. But the question remains, why should the American companies be forced to buy insurance, and will the insurance ensure zero liability or will the American companies have to share financial responsibilities?
The insurance available for sale will be offered through a State owned and operated insurance company, which means that the State will be liable in case of a nuclear accident.
We already know that the State will most likely fail to compensate, (like they did after the Bhopal tragedy?), and that they do not have the money to offer unlimited protection from the liability law; the suppliers will have to share some of the financial responsibility, bringing them back to square one, to precisely the same reason why they are not willing to supply India in the first place.
The possibility of a nuclear accident in India is a very real one, making this debate an important one to have.
Three decades ago, the worst ever industrial accident in recent history happened in Bhopal city, where an American run pesticide manufacturing plant sprung a gas leak that resulted in the deaths of over 20,000 people. To this day, the victims have not been properly compensated.
After the 2011 Fukushima disaster in Japan, the reality of something like that happening in India became very real. It was in 2004, when the Indian Ocean tsunami hit India’s southern coast, and the Kalpakkam nuclear plant had to be shutdown because water had overcome the cooling intakes, similar to what happened at Fukishima.
India has now built two new reactors on the same coast, at Kudankulam, without appropriately calculating the risk of an accident as a result of a natural disaster. Clearly showing the Indian government’s neglectful attitude towards such issues.
The Indian government under Prime Minister Modi’s leadership has set some very grand and seemingly unrealistic goals of increasing their electricity production through nuclear power.
The thing that the Indian people need to realize, as well as Obama, and those American companies looking to supply India, is that no matter how advanced the technology gets, an accident is always possible.
If India wants American companies like General Electric, and Westinghouse to supply them with nuclear reactors, they will have to amend the liability law to relieve them of all liability, because as mentioned above, even if the companies were to buy insurance from the State, they would still have to share some of the financial responsibility in the case of an accident. And for this reason, G.E., Westinghouse, and other American companies are not willing to supply India.
If Modi somehow succeeds in finding a way around the liability law, or amending it, then the Indian people have to be wary of the outcomes. It would mean in case of an accident, it would be unclear to what extent the government is liable, because clearly the suppliers will not be, and most likely, that would mean that the victims will not receive sufficient compensation, which we have seen happen in the aftermath of the Bhopal tragedy.
Therefore, President Obama, while trying to ensure zero liability for American suppliers, should also ensure that in case of an accident the victims are properly compensated.
This is a huge task for both leaders, and that is why I discourage the media from creating hype. This is a very serious issue, and it should be dealt with patiently. Both parties should look at all the facts, and must weigh the implications of their decisions.
*The writer is an assistant professor at the National University of Sciences and Technology in Islamabad, he tweets @umarwrites.
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