Who Pays for a Nuclear Disaster? The Truth Behind the Proposed Amendments

Context

India's nuclear energy sector operates under two key laws:

1. Atomic Energy Act – Regulates the development and use of nuclear energy.
2. Civil Liability for Nuclear Damage Act (CLNDA) – Defines liability and compensation in case of a nuclear accident.

In the Union Budget 2024, Finance Minister Nirmala Sitharaman announced that the government plans to amend these laws. This has raised concerns because:

• The changes may reduce the liability of nuclear equipment suppliers, which could impact nuclear safety.
• The U.S. has been pressuring India to modify these laws so that American companies can sell reactors without financial risk in case of an accident.

Key Concerns About the Amendments

1. Reducing Supplier Responsibility

• Under the current law, if an accident occurs due to faulty equipment, the operator (NPCIL) can demand compensation from the supplier. This is called the ‘right of recourse’.
• The proposed amendments might remove this clause, meaning suppliers will not be responsible even if their equipment is defective.
• This could increase safety risks because suppliers may not be as careful in maintaining high-quality standards.

2. Financial Burden on India

• The U.S. wants India to buy expensive reactors, even though they are not cost-effective.
• Example: The AP1000 reactors built in the U.S. had severe cost overruns. Two reactors in Georgia were completed at $36.8 billion, more than 250% above the original estimate.
• If India imports such reactors, the cost of electricity will be much higher than alternative sources like solar and wind energy.

3. Lessons from Past Nuclear Accidents

Nuclear disasters show why supplier accountability is crucial:

• Fukushima (2011) – Caused by design flaws in the reactors, which had been flagged as risky decades earlier. The total cleanup cost is estimated at ₹20-46 lakh crore, but India’s current law caps liability at just ₹1,500 crore—an extremely low amount in case of a disaster.
• Bhopal Gas Tragedy (1984) – Led to a Supreme Court ruling that companies dealing with hazardous industries must bear full liability. However, India’s nuclear liability law diluted this principle by capping liability and reducing supplier responsibility.

4. U.S. Pressure and India’s Response

• The U.S. government, including former Ambassador Eric Garcetti, has actively lobbied Indian leaders to amend the liability law so that American nuclear companies face no financial risk.
• The previous UPA government and the current NDA government have both tried to weaken supplier liability, showing that corporate interests are being prioritized over public safety.
• In 2015, India and the U.S. discussed bypassing the right of recourse, but U.S. companies still refused to sell reactors, fearing future legal risks.

Conclusion

The proposed changes to India’s nuclear liability laws could have serious consequences:

• If suppliers are not held accountable, they may not focus on safety, increasing the risk of accidents.
• The financial burden of a disaster would fall on the Indian government and citizens, while foreign suppliers escape responsibility.
• India must prioritize public safety over corporate profits and resist external pressure that could compromise nuclear safety.

Instead of buying expensive foreign reactors, India should focus on safer, more affordable energy alternatives.