BackTen years of a nuclear odyssey
Some hurdles have been cleared, but India's nuclear challenges remain
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Finally, India and the US have completed the last lap of governmental negotiations on civilian nuclear cooperation. What began as a joint statement of intent by George Bush Jr. and then prime minister Manmohan Singh in Washington 10 years ago, achieved fruition in New Delhi on Republic Day.
After years of arduous negotiations, two issues remained unresolved—one, the problem of liability in case of an accident at a nuclear power plant and, two, administrative arrangements for implementing the nuclear agreement.
Civilian nuclear cooperation between India and the US is based on a complex legal architecture that includes a number of laws crafted for the specific purpose of letting nuclear commerce begin between the two countries. The operational framework revolves around the so-called 123 Agreement. The 123 Agreement provides for safeguards by the International Atomic Energy Agency (IAEA) for nuclear materials and equipment transferred to India. No agreement can fully cover all situations. One open question in the 123 Agreement was about inspections in case IAEA says that it can no longer carry out safeguards (Article 10, section 4 of the 123 Agreement). What would happen then? Would the US insist on intrusive inspections directly? India would never have accepted this. This so-called tracking of nuclear material has now been resolved.
The other contentious issue was that of liability in case of an accident. This was largely a product of India’s making. In 2010, the Civil Liability for Nuclear Damage Act was passed. This law provides for not only operators of nuclear power plants being sued in case of an accident but also the suppliers of equipment. This is in case the equipment is found to be faulty. The wording of the law made possible open-ended claims that would have made any nuclear equipment supplier baulk. Insurance companies, too, would have been reluctant to take on any commitment in this respect. This has been resolved by the creation of a nuclear insurance pool comprising a number of Indian insurance companies. Insurance companies will pool in ₹ 750 crore for this purpose and the government will also contribute to the pool, taking the overall insurance sum to ₹ 1,500 crore.
This proposal has been criticized and the insurance pool, at first sight, appears to be too small. For example, this sum is far less than what was required for the cleanup of the Fukushima region of Japan after the nuclear accident there in 2011. But this is not the final word on the matter; the pool can evolve and can be increased in case the government and insurers feel that is needed.
This was the easy part. India now has to focus on creating a robust nuclear regulatory arrangement, far better than the existing Atomic Energy Regulatory Board (AERB) that is hampered by conflicts due to its organizational design. Many of the reactors now sought to be put in place in India are new in design. India needs scientists and technologists who can, and should, have the requisite knowledge base to inspect and understand the safety and efficacy of the parts of these new reactors not only in isolation but also when they are run along with thousands of other parts of a reactor.
While India has the wherewithal to produce such engineers and scientists, the challenge is to put together a regulatory institution. The safety of these plants is critical. No expense should be spared in creating a world-class nuclear regulatory infrastructure. It is important to pay attention to design issues for the regulator to prevent its capture, something that has been seen in other sectors.
In other domains, regulatory capture will only lead to economic losses and inefficiency; in nuclear power, the results can be fatal for the country as a whole.
The agreement could not have come a moment too soon. India is power-starved and in the future there will be immense pressure on India to cut back on thermal power for the sake of limiting climate change. Nuclear power, with all the controversies that surround it, is an important ingredient in India’s energy security.
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