Opposition remains strong against American business interests
Controversial legislation to establish monetary liability limits in case of a nuclear energy accident was introduced to the Indian parliament last week for the second time. Last March Prime Minister Manmohan Singh had to withdraw the bill due to strong opposition. The measure is a crucial element of an agreement with the U.S. to open Indian markets to U.S. firms.
If approved this time, the legislation would provide protection to suppliers against legal action if their equipment was involved in a nuclear accident in India. The bill would limit the liability of a nuclear power plant operator to 5 billion rupees or $110 million. Critics claim this figure is so low that it effectively exempts firms from any accountability.
U.S. firms maintain the bill is essential because unlike France’s Areva or Russia’s Rosatom, they don’t have sovereign immunity. With stockholders to protect, U.S. firms need to have liability limits especially if a local operator using their equipment causes the accident.
The Indian government does not command a majority in parliament. Opposition members from the Bharatiya Janata Party and the Communist Party claim they have the numbers to block the bill. Their focus of opposition is that passage would allow American firms to enter the Indian market. Their opposition is more of an ideological issue than anything else designed to thwart any agenda item of Singh’s majority party coalition.
Greenpeace is also in the picture urging Indian legislators to vote against the bill. The group issued a statement said it wants the designers of the plants to be held accountable even if the accident is the result of operator error. This position illustrates a more widespread political view of wanting to shift all liability regardless of fault to reactor vendors.
G.E. Hitachi plans Indian manufacturing center
Passage of liability limits would position G.E. Hitachi to carry out agreements it inked year with NPCIL and Bharat Heavy Industries to collaborate to build ABWR and ESBWR reactors. G.E. Hitachi also inked a nonexclusive deal to source large forgings from Larsen & Toubro which is building a facility that can handle steel forgings up to 600 tons. Once operational, it will compete head-to-head with a similar facility now operated by Japan Steel Works.
Westinghouse also has plans to build new reactors in India once the liability issue is resolved by the government. it has signed similar nonexclusive agreements with NPCIL and Indian heavy manufacturing firms.
India has plans to expand its current 4 GW of nuclear energy to 60 MW by 2030. Last December S.K. Jain, managing director of NPCIL, told the Economic Times the first five new reactor sites are being acquired and that construction will begin in 12-18 months.
As for the opposition to the liability bill during the first round, Jain reportedly said, “There will always be those who are never satisfied. It is a noisy democracy. I don’t see a major problem.”
One of the reasons members of parliament may find to support the bill is that is will create jobs and the electricity from the reactors will promote economic development. Like its competitor Westinghouse, G.E. Hitachi has agreed to “localize” manufacturing up to 70% of components creating thousands of jobs across India. The firm also has plans to establish a nuclear components manufacturing center to export nuclear technologies with the competitive factor being India’s lower labor costs.
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4 comments:
U.S. firms maintain the bill is essential because unlike France’s Areva or Russia’s Rosatom, they don’t have sovereign immunity. With stockholders to protect, U.S. firms need to have liability limits especially if a local operator using their equipment causes the accident.
Why the should a private company get immunity for the consequences of its own actions? This is unfair, favoritist legislation, pure and simple. There's nothing special or exemplary about nuclear risk (fear mongerers notwithstanding); nothing precludes nuclear operators from covering their own liability in an insurance pool.
This kind of market distortion is very prominent in the news lately. BP is immune to the most of the damages caused by its oil spill (e.g. losses to fisheries), thanks to an analogous liability-limiting law for oil wells. There's quite a lot of Americans furious about this, and I think they're right: it is simply injustice. If you break it, you are obliged to pay for it. Granted, commercial power reactors aren't nearly as hazardous as oil wells -- but I believe the principles are the same.
http://www.businessweek.com/news/2010-05-05/obama-backs-significantly-higher-spill-damage-cap-update2-.html
US Nuclear Companies should talk the US congress if they think there is a need for special insurance for their exports.
Lobbying the Indian government to limit a foreign company's liability to ridiculously low levels will prove in the long term to be against US interests. (And I can't imagine such a law could be passed without a lot grease.)
It was a US company that gave India the continuing Bhopal disaster, and the US is harbouring an excutive of Union Carbide from Indian justice. Any Indian man on the street will tell you that they could never accept another accident where a US company is allowed to cut and run.
The Union Carbide thing is not at all correct. Today it is no more than a political ploy.
İt was an İndian subsidiary ran poorly by İndian management and operators - UC is at fault only for letting local operators control it - for not sitting on them.
There were no slums all around the plant when built - local politicians allowed them to happen.
The whole thing is kept alive by politicians for their own purposes. UC paid their bill and there is no reason to make Warren Anderson stand trial except for being a fool for giving the 500 million to begin with.
It doesn't matter whether or not you agree with Union Carbide that it was sabotage. It is what Indians think that will colour the issue.
It is extremely presumptious to say there is no reason for Anderson to be tried. If the US is going to do business in a country, shouldn't it at least show that it respects its judicial system?
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