A nuclear liability law is a key piece of legislation for foreign nuclear equipment suppliers to enter the Indian nuclear energy market. The legislation also has to perform a balancing role: It has to prevent unlimited liability, in case of a nuclear accident, from falling on the shoulders of operators and suppliers and at the same time ensuring that legitimate liabilities are paid off by the operator and the supplier.
As matters stand now, the Union government is heavily biased in favour of foreign nuclear suppliers. It refuses to heed the concerns of opposition parties on this score. Repeated changes to The Civil Liability for Nuclear Damage Bill, 2010, are testimony to this. They are a blatant attempt to let nuclear suppliers escape any liability.
All this would have gone unchecked had a vigilant Opposition not read the fine print of the Bill. The government relented after it realized that the Bill would have few, if any, chances of becoming a law.
Perhaps that was too early. If newspaper reports are to be believed, the government has modified a key clause once again. Now an operator can sue a supplier for damages only if it can prove that an accident (if it happens) has been due to the intent of the supplier or his employees to cause such an accident.
Anyone familiar with the basic features of legal procedure and evidence knows that in liability cases, and even otherwise, proving wrongful intent is next to impossible. Unless the government explains why it has introduced such wording in the Bill, it can be safely assumed that it is out to confer uncalled for advantages on suppliers.
Once suppliers are safe from liabilities, they have little or no incentive to keep on focusing on design improvements and improving safety features. In the history of nuclear power, it has been seen that suppliers often suppress new information on improved designs. In the absence of a strong liability law, suppliers resist implementing new designs as they fear litigation. With a strong law, they have every reason to revisit old designs and spend time and effort on improving them.
The result is that changes of the kind being made in the Indian Bill create an incentive compatibility problem: A law with purposely flawed features will ensure that suppliers have no interest in devoting efforts to improve equipment design.
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