Posted on Sun, Jun. 27, 2010
The U.S. is pushing India to limit the liability of nuclear-energy firms doing work in that country.
Even as President Obama is insisting that BP pay for all the damage caused by its oil spill, his administration is leaning on the Indian government to render its citizens unable to claim damages from U.S. power-plant suppliers in the event of a nuclear accident.
Before U.S. companies enter India’s burgeoning nuclear-power market, the U.S. government is pushing for legislation limiting their liability. “The passing of the bill by Indian parliament would mean a win-win situation for both the countries, generating employment a well as giving India abundant clean energy,” U.S. Ambassador Timothy J. Roemer said.
Clean is a curious word to use in this context, given that the bill is necessitated by the potentially catastrophic filthiness of nuclear power. The bill in question would indemnify foreign suppliers and make India’s domestic operators responsible for the costs of nuclear
disasters – though only up to a point.
Domestic operators’ liabilities are to be capped at about $110 million, after which the Indian government would be responsible. If damages exceed $460 million, the victims would be on their own.
The Chernobyl disaster is estimated to have cost more than $250 billion. In the event of such a catastrophe, India’s liability bill would put almost the entire burden on victims and taxpayers, giving suppliers and operators less incentive to ensure safety.
To be sure, indemnifying suppliers and capping the liability of operators are the international norms, or else few companies would be in the nuclear business. The Price-Anderson Act, which regulates liability for nuclear accidents in the United States, also channels costs to operators and caps them at $11 billion (to be shared by the industry as a whole).
That is a considerable sum, though it’s arguably inadequate in light of the staggering potential costs of a nuclear calamity. Nevertheless, the law allows victims to sue for additional damages. Indians, by contrast, stand to lose this right under the proposed nuclear-liability law.
Arguments over India’s nuclear bill have been particularly passionate because of memories of the night in December 1984 when clouds of poison gas escaped from a Union Carbide pesticide factory in Bhopal, in central India. At least 15,000 people have died as a result, and more than 100,000 have suffered permanent impairment.
At the time, the Indian government estimated damages at $3.3 billion, and today, given extensive long-term effects that no one foresaw, they would be reckoned as far greater.
But Union Carbide paid a settlement of only $470 million. Circumstantial evidence suggests the Reagan administration prevailed upon Indian leaders to go easy on Union Carbide.
Historically, countries have often helped their corporations bring home profits while leaving human and environmental costs in far-off places. The people who bear the brunt – such as Nigerians, with their chronic oil contamination, and Indians – are usually too politically
feeble, and their governments too subservient, to demand accountability from corporations and their backers.
India hasn’t even been able to get Dow Chemical, which subsequently bought Union Carbide, to remedy the Bhopal site, which still leaches toxins into the city’s groundwater.
Just days ago, public fury over a long-delayed, lenient verdict for seven men accused in the Bhopal case – all Indians; no American has ever stood trial for the catastrophe – induced the Indian government to announce a $325 million relief package, to be paid for by taxpayers.
In contrast, Obama has been remarkably successful in gaining redress for the oil spill in the Gulf of Mexico. The $20 billion fund he obliged BP to establish greatly exceeds the liability cap of $75 million set by American law. The move prompted the Economist, which feels the pain of investors, to warn of the “scary” prospect of unlimited liability.
In fact, a lifting of liability caps in the United States would exacerbate dirty industries’ tendency to relocate to corners of the earth where lives are cheap and governance is weak.
Increased accountability in powerful countries makes it all the more imperative that residents of poor and corrupt countries also find ways to make corporations share the suffering.
Will they get help from Obama? In a recent letter to the president, Bhopal victims asked that he force Dow to provide adequate compensation and clean up the contaminated site.
“Is it too much to expect that you use the same yardsticks of accountability you are using for BP . . . for corporations based in the country you rule?” they asked.
How the president responds to their plea remains to be seen. But it’s worth noting that an administration that wouldn’t dream of curbing Americans’ rights to redress is demanding that Indians hurt by nuclear accidents be precluded from suing those who may be responsible.
Madhusree Mukerjee can be reached at email@example.com.