Cabinet clears Nuclear Liability Clause ahead of PM's UN General Assembly visit

In a move which is likely to evoke sharp reaction from the Opposition, the Cabinet Committee on Security (CCS) cleared the contentious Nuclear Liability Clause, paving way for signing of an agreement between Nuclear Power Corporation of India Ltd (NPCIL) and America's Westinghouse.

The controversial clause was cleared hours ahead of Prime Minister Dr Manmohan Singh's departure for the United States to attend the UN General Assembly meet, reports said on Wednesday. The clause dilutes the Nuclear Liability Law by which NPCIL will have the right to recourse in case of a nuclear accident.

It was also reported that clause was cleared on the basis of Attorney General GE Vahanvati's interpretation of the deal which states that the right to recourse in case of a nuclear accident lies with India.

Opposition had taken the government on over the issue claiming that it was making attempts to exempt US suppliers of reactors from the liability clause and thus bypassing the law passed by Parliament. Owing to Opposition's protest, the CCS met last week to deliberate on the clause, which according to the opposition parties, was not in tune with the law. 

The US also saw the Civil Liability for Nuclear Disaster Act as hurdle in selling nuclear reactors to India. The law passed by the Parliament empowered NPCIL to seek partial compensation from suppliers if their reactors are involved in a nuclear accident.

However, in an opinion to the Department of Atomic Energy, Attorney General G E Vahanvati stated that it is up to the nuclear plant operator to invoke section 17 of the Act regarding liability of suppliers in case of a mishap. It is this interpretation of the A-G that provided the basis for the Union cabinet to clear the clause.

In order to placate the Opposition, the Centre had maintained India is not going back on the deal. "There is no question that we will go back on the Nuclear Liability Bill," said External Affairs Minister Salman Khurshid. The agreement will allow two sides to begin negotiations taking into account all the opposition to the Civil Nuclear Suppliers Liability Clause from the US.

While the government denies changes, it allows NPCIL to change course in case of an accident. It will allow them to continue negotiations on the 6,600 megawatt plant in Gujarat.  The development is significant as it coincides with Prime Minister Dr Manmohan Singh's meeting with US President Barack Obama on September 27. The cabinet clearance is also being seen as an attempt to show that the India and US rapport hasn't hit a plateau.

During the meeting, the two leaders are expected to discuss implementation of the civil nuclear deal, ways to expand cooperation in the fields of defence, security and economic issues.

Also read: Opposition criticises UPA govt for clearing contentious nuke liability bill