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#dnaEdit: A fresh start

Wednesday, 25 June 2014 - 6:05am IST Updated: Tuesday, 24 June 2014 - 9:57pm IST | Agency: dna

Though delayed, India has signalled a new beginning in its attempts to woo the global nuclear energy industry by choosing to ratify the Additional Protocol

India’s decision to ratify the Additional Protocol(AP) to its nuclear safeguards agreement with the  International Atomic Energy Agency(IAEA) has taken five years despite the country wresting significant concessions from the IAEA’s Board of Governors when it approved the AP in March 2009. Strangely, the important decision to ratify the Additional Protocol, which will allow the international community to verify nuclear exports from India and check the possibility of diversion for unauthorised use, was revealed through a media report rather than an official pronouncement from the External Affairs Ministry. It is unclear, yet, whether this lack of transparency on an important policy decision was due to abundant caution, fears of adverse reactions or just another case of oversight. Notwithstanding this faux pas, the implications of India ratifying the AP are immense. The last of India’s contractual obligations for entering the 45-member Nuclear Suppliers Group that controls the global trade of nuclear material has been met. It also sends a message to Washington, where Prime Minister Narendra Modi is headed, that India is looking to regain the momentum that the Manmohan Singh government lost during its second tenure after enthusiastically spearheading the Indo-US nuclear agreement during UPA-1.

But the Additional Protocol — which merely grants IAEA inspectors multiple-entry visas and uninterrupted real-time communication facilities for transmission of information generated by the Agency’s containment, surveillance and measurement devices — is not the prize the US desires. India’s Additional Protocol does not allow for inspection of sites outside the purview of the safeguards agreement, notably the ones dealing with India’s nuclear weapon arsenal, and it does not subscribe to the onerous reporting requirements on nuclear installations, mining, reprocessing and enrichment that other countries signed up for. The protocol India has signed also deviated from the ‘complementary access’ that allows unbridled physical inspection and environmental sampling.

The indulgence that the US seeks from India is the dilution of Section 17(b) of the Civil Liability for Nuclear Damage Act, 2010. It gave India’s nuclear installation operator, Nuclear Power Corporation of India Limited(NPCIL), the right of recourse to claiming liabilities if a nuclear incident resulted as a consequence of the supplier providing “equipment or material with patent or latent defects or substandard services”.

The grim reminder served by the Bhopal Gas Tragedy on how international companies elude Indian laws was the rationale for Section 17(b) though the preceding section, 17(a), allows NPCIL to waive the right to recourse when it is not expressly specified in the contract. With legal opinion divided on whether Section 17(a) or 17(b) will take precedence in the event of an accident, suppliers are understandably nervous about entering the Indian market without clarity on this count. Though the US has claimed that India’s legislation violated the Convention on Supplementary Compensation for Nuclear Damage that places the liability on the operator, its provisions that favour supplier countries have been energetically contested in international fora.

As a sop to reactor suppliers, Rule 24(1)) was enacted for the civil nuclear liability Act which caps the compensation that can be collected from suppliers to the extent of the operator’s liability (Rs1,500 crore) or the contract price, whichever is less. With India affirming its commitment to non-proliferation and reporting of its nuclear exports, whenever the country enters the global nuclear material trade, and framing Rule 24(1) as a concession to foreign suppliers, Prime Minister Modi must assert that India’s nuclear liability legislation can not be amended to suit foreign interests at the cost of its citizens.

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