Indo-US Civil Nuclear Agreement - Importance, India’s Liability and US opposition

Indo-US Civil Nuclear Agreement – Importance, India’s Liability and US opposition

Write a note on Indo-US Civil nuclear agreement and why it is important for India. Also examine India's Civil Liability for Nuclear Damage Act, 2010 and why US is opposed to it?

Highlights:

- In 2005 India US Civil nuclear agreement was signed
- Also called as 123 agreement
- India agreed to separate its civil and military nuclear facilities and to place all its civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards and in exchange, the United States agreed to work toward full civil nuclear cooperation with India.

Progress:

1. Amendment of U.S. domestic law, especially the Atomic Energy Act of 1954

2. A civil-military nuclear Separation Plan in India - India will classify 14 of its 22 nuclear facilities as being for civilian use, and thus open to inspection.

3. An India- IAEA safeguards (inspections) agreement - The IAEA Board of Governors approved the safeguards agreement on August 1, 2008

4. The grant of an exemption for India by the Nuclear Suppliers Group - In 2008 NSG ends the ban on nuclear trade with India. Permits supply of any nuclear equipment and material for civilian use.

Importance

1. Formally recognizing India's strong non-proliferation record even though it has not signed the NPT.

2. Financially, the U.S. also expects that such a deal could spur India's economic growth and bring in $150 billion in the next decade for nuclear power plants, of which the U.S. wants a share

3. United States might benefit from access to Indian nuclear technology

4. Increased strategic ties with India and having separate policies toward India and Pakistan rather than just an "India-Pakistan" policy

5. The United States also sees India as a viable counter-weight to the growing influence of China,and a potential client and job creator.

Obstacles

1. The Civil Liability for Nuclear Damage Act, 2010 or Nuclear Liability Act -

{The Act aims to provide a civil liability for nuclear damage and prompt compensation to the victims of a nuclear incident through a no fault liability to the operator, appointment of Claims Commissioner, establishment of Nuclear Damage Claims Commission and for matters connected therewith or incidental thereto.}

2. No-fault liability

Civil Liability for Nuclear Damage Act, 2010 says the operator of the nuclear plant is liable regardless of the proximate cause of the accident up to an amount of Rs 1,500 crore on the basis of no-fault liability

3. Right of recourse

The operator can exercise Act to exercise a “right of recourse” for Rs 1,500 crore the accident was caused by an act of the supplier or his employee

4. Conflict of interest

If the damage caused by a nuclear accident is more than Rs 1,500 crore then, the Act makes the Central government liable for damages in excess of that amount but there is conflict of interest as government itself as government itself appoints claims commissioner for valuing the damage.

5. Operator can undergo criminal proceedings though he has paid up to Rs 1,500 crore on the basis of no-fault liability

6. Since the liability Act does not derogate from any other law, victims are free to file tort claims against the reactor supplier too if they think the accident was the fault of the supplier and they are confident of providing the court with the evidence.

7. Also an Indian operator could also file a case against his supplier, and so could the government.


US Argument against Civil Liability for Nuclear Damage Act, 2010

1. Indian law is incompatible with the Convention on Supplementary Compensation for Nuclear Damage (CSC), an international treaty governing nuclear liability that India had signed. This treaty is based on the concept of “legal channeling”, in which the operator is held strictly liable for a nuclear accident and has only a limited right of recourse against the supplier.

2. Suppliers would be liable for potentially unlimited claims either by government, victims or operators.

3. The damages from an accident are potentially so enormous that they would go bankrupt if they were held liable in any way.

Recent actions to speed up the deal

- An insurance pool of $244 million, half of which is to be contributed by Indian insurance companies run by GIC and the other half by the government, had helped achieve the end to the supplier-liability nuclear impasse that had held up the deal.