A flawed Bill

The United Progressive Alliance could not table the Civil Liability for Nuclear Damage Bill, 2010, on March 15, given the strong opposition from the Left parties, sections of the Bharatiya Janata Party, the centrist parties and some of the Congress own allies. The Bill will hopefully be referred to a Parliamentary Standing Committee, creating an opportunity to analyse it thoroughly and critique the rationale for limiting the liability for accidents in civilian nuclear installations.

Four features of the Bill are noteworthy. First and foremost, it caps the total liability for a nuclear mishap, however serious, at as little as 300 million SDR (Special Drawing Rights), equivalent to Rs.2,300 crore, and the liability for the operators of nuclear facilities to a laughable Rs.500 crore. Secondly, it channels liability exclusively to the operator, exempting plant designers, manufacturers and suppliers. Thirdly, it leaves the determination of the occurrence and gravity of a nuclear accident exclusively to the Atomic Energy Regulatory Board (AERB). Finally, it bars the post-mishap period for which the operator is liable to only 10 years.

The Bills sole merit is the recognition that the consequences of a nuclear accident may not be limited to national borders. It thus provides for liability outside Indias territory too. Its primary function and purpose is to limit artificially nuclear liability and substantially transfer the bulk of what remains of it to the government, that is to say, the public, which is in no way responsible for the mishap in question. This is deplorable in and of itself. But to add insult to injury, the Bill sets the liability caps so low as to bear no relationship to the likely damage from a significant nuclear accident involving a radioactivity release.

A Chernobyl-like accident (1986) will wreak damage upon human and animal life, the environment and the infrastructure running into hundreds of billions to several trillions of dollars, and make huge swathes of land uninhabitable for centuries. The initial damage from the reactor-core meltdown in Chernobyl was estimated by the Ukrainian government at $250 billion. It may turn out even higher as more cases of cancer and genetic damage come to light, necessitating expensive treatment. German researchers estimate that a Chernobyl-type accident in Germany will cause damage in the range of 2 trillion to 5 trillion euros, which equals the entire annual gross domestic product of the worlds third biggest economy, and until recently, its topmost exporter.

Every single of the worlds 430-odd operating commercial nuclear reactors can undergo a core meltdown, releasing vast amounts of radioactivity. The radioactivity, carried in dust clouds, is liable to spread over hundreds of kilometres depending on the wind direction and speed. So far-reaching was the impact of the Chernobyl fallout that thousands of sheep in faraway Scotland and reindeer in northern Sweden had to be slaughtered because they had fed on radioactively contaminated grass.

Nothing suggests that the damage from an Indian reactor-core meltdown will be less severe. Even lesser accidents such as spills and leaks of nuclear material during transportation and handling, loss-of-coolant accidents (LOCAs), other radioactivity releases, and overexposure of the public to emissions and effluents containing dangerous material can cause grave damage.

It is wrong in principle to cap nuclear liability. Logically, a liability law must provide for compensation commensurate with the maximum likely damage from an accident. The nuclear Bill does the opposite. It wishfully assumes that no accident will cause damage exceeding Rs. 2,300 crore, or alternatively, holds that the public does not deserve compensation beyond that sum.

The assumption runs against whatever physics, organisation theory and risk assessment science knows about nuclear power hazards. And limiting compensation to a trivial Rs.2,300 crore corresponding to a sub-Bhopal-level amount for every death or serious radiation injury is downright immoral.

Nuclear technology is extremely hazardous, indeed uniquely so: it is the only mode of energy generation capable of catastrophic accidents. Nuclear reactors concentrate within a small volume large quantities of fissile material, equivalent to several hundred multiples of the critical mass needed to make a nuclear bomb and hence a high energy density. Their core must be cooled effectively and without interruption so that it does not overheat, potentially leading to a runaway reaction.

A LOCA is a serious matter. It can within seconds produce an uncontrollable chain of events. The danger is especially high in certain reactor types that have a positive void coefficient of reactivity. Simply put, this describes the reactors tendency to get progressively hotter when bubbles form in the coolant. This can have grave consequences. The natural uranium-heavy water-based CANDU design, the mainstay of Indias nuclear programme, has such a positive coefficient.

That apart, all nuclear power generation based on existing reactor designs is inherently hazardous because, as organisation theory puts it, it involves large, complex systems within which various subsystems are tightly coupled, leading to a rapid transmission of a problem event to the entire system and hence to catastrophic accidents. (This is discussed at length and lucidly in Charles Perrows classic Normal Accidents; Basic Books, 1984.) The probability of catastrophic nuclear accidents is admittedly low. But their consequences are extremely large, indeed unacceptably so.

For instance, an estimated 65,000 people perished in the Chernobyl accident. And the death toll mounts every month. This is more than three times the number killed in Bhopal. An Indian Chernobyl could conceivably kill even more given our cities high population density. Such estimates are in line with forecasts made in the mid-1970s by United States Nuclear Regulatory Commission-sponsored studies with 3,300 early deaths plus 45,000 early radiation-related illnesses. More recent estimates are higher and run into scores of billions of dollars. It makes no ethical, technological or practical sense to subsidise nuclear power by extinguishing the liability burden or transferring it to the public.

Nuclear technology is now 60 years old, and as mature as it can be. But it cannot be said to have evolved significantly as regards safety. According to a post-Chernobyl study by an independent expert body, Gruppe kologie (Germany), all existing reactor types have safety problems, many have had LOCAs, and are vulnerable to all kinds of mishaps that can produce a catastrophic accident. Very few new reactors have been built in the developed countries since Chernobyl. No nuclear reactor has been ordered in the U.S. since 1973, even before Three Mile Island (1979). This has severely limited safety innovation.

Two new designs Westinghouses AP-1000 and Arevas European (since pompously renamed Evolved) Power Reactor have just emerged. These are claimed to be Generation III-plus and safer than the designs of the 1970s. But they have run into problems with regulatory authorities in the U.S., France, the United Kingdom and Finland, where the first fully market-driven nuclear project in Europe is now in progress three-and-a-half years behind schedule and with 60 per cent over budget. Scrapping the Olkiluto project will produce a potentially fatal setback to the global nuclear industry.

At any rate, the none-too-happy story of nuclear safety warrants a liability compensation regime which is strict and based on the polluter pays principle and the precautionary principle. That alone can provide the nuclear industry the incentive to redesign reactors for greater safety and operate them with abundant caution. The Bill does the opposite by lightening the nuclear industrys responsibility by Rs.1,800 crore to compensate the victims of a nuclear accident.

The Indian Bill is modelled on two nuclear liability conventions of the early 1960s, when the nuclear industry was in its infancy, held out extravagant hopes, and received huge undeserved subsidies as a spur to research and development, which it claimed it needed to grow namely, the Convention on Third Party Liability in the Field of Nuclear Energy, or the Paris Convention of the Organisation for Economic Cooperation and Development (OECD), and the Vienna Convention on Civil Liability for Nuclear Damage of 1963 under International Atomic Energy Agency (IAEA) auspices.

The conventions capped nuclear liability because nuclear power was believed to have unlimited potential for public welfare. Sixty years on, nuclear power has comprehensively belied its early promise. It is far more expensive (about twice as costly as) than electricity from fossil fuels or even renewables like wind. It is inappropriate for developing-country grids that have large peaking-power requirements. And it bristles with safety problems from radiation exposure of occupational workers, routine radioactivity releases, LOCAs, and problems posed by high-level wastes, which remain hazardous for thousands of years. Besides, many renewable energy sources have since evolved impressively, demolishing the no-alternative-to-nuclear-power claim.

The global nuclear industry, working through the IAEA, recently sponsored the Convention on Supplementary Compensation (CSC) for Nuclear Damage which works within the Paris-Vienna framework but doubles the maximum compensation, to $986 million.

The CSC has been paraded as a tried and tested, widely respected international treaty the international regime for compensation payment in case of nuclear accidents, as Science and Technology Minister Prithviraj Chavan put it.

In fact, since it was opened for signature in 1977, the CSC has only been signed by 13 states and ratified by only four countries (Argentina, Morocco, Romania and the U.S.) in place of the minimum of five countries needed for its entry-into-force.

Most developed countries have their own domestic laws on nuclear liability. Although they still tend to be soft on the nuclear industry, their compensation levels are not as sordid as the CSCs. States like Germany, Austria and Sweden place no cap on liability. Even the U.S. has a corpus fund of $10.7 billion for compensation.

The CSC exists only on paper today despite the IAEAs exertions. Lest it be thought that the IAEA is some kind of impartial body as regards nuclear safety or regulation, its very charter commits it to promote nuclear power on the presumption that it is safe and economical. On safety, the IAEA is as prejudiced as any international agency can get. It refuses to involve another United Nations agency, in particular the World Health Organisation with its strong health mandate, in assessing the damage from Chernobyl. For years, it blatantly claimed that less than 30 people died in the accident primarily firemen.

The Bill is a poorly disguised imitation of the CSC. It sets the total liability compensation level even lower than the $470 million given to the victims of the Bhopal gas disaster, which was scandalously paltry and represented no more than Union Carbides insurance cover plus accumulated interest. If we take inflation since 1984 into account, even the Bhopal settlement would be $1.5 billion today about three times higher than the Bills ceiling. It is no remedy that the Bill allows for the raising or lowering of liability (with an unspeakably low floor of Rs.100 crore). That concentrates arbitrary power in the states hands.

The Bills whole plan is incompatible with the precautionary principle and the polluter pays principle as interpreted by the Supreme Court in relation to fundamental constitutional rights. The proposition that nobody should embark on potentially harmful activities whose hazards are unknown is ethically and legally sound. As is the idea that the polluter who harms the public must pay for the damage.

As the 1996 verdict in Vellore Citizens Welfare Forum vs Union of India put it, Once the activity carried on is hazardous or potentially hazardous, the person carrying on such activity is liable to make good the loss caused to any other person by his activity irrespective whether he took reasonable care. This absolute liability extends not only to compensate the victims of pollution but also the cost of restoring the environmental degradation.

The other three characteristics of the Bill mentioned at the outset further vitiate its impact. It makes no sense to let manufacturers and suppliers of nuclear plant and equipment off the liability hook. If defective designs are at the root of a mishap (as in Bhopal), the designer must be made liable. Or else, we will end up punishing a subordinate agency, like the Indian subsidiary of Union Carbide, while exonerating the culpable parent.

The AERB is not an independent and credible agency. It works entirely under the Atomic Energy Commission, which has the same head as the Department of Atomic Energy. The AERB has an embarrassingly poor record as safety watchdog and regulator as the handling of the recent Kaiga tritium episode and the Narora fire, and so on, show. Its appointment as the sole determinant of the occurrence of an accident inspires no confidence. It is illogical to time-bar nuclear liability to 10 years. Many forms of radioactive damage reveal themselves over a much longer time frame.

The Cabinet was foolhardy in approving the Bill while ignoring the thoughtful objections raised by the finance and environment ministries. Its apologists are equally unconvincing where they claim that the U.S. is not a factor behind the Bill. It patently has been, as statements of U.S. officials and the U.S.-India Business Council clearly show (Frontline, August 14, 2009).

American pressure is, of course, reinforced by Indian domestic industry pressure, creating an unholy mess. The sooner we extricate ourselves from it, the better.