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Washington, December 10, 2011

Burns to kick off Asia tour with Delhi visit

Narayan Lakshman
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The United States State Department has announced that Deputy Secretary of State William Burns (in picture) will travel to India on December 10, 2011. File photo
AP The United States State Department has announced that Deputy Secretary of State William Burns (in picture) will travel to India on December 10, 2011. File photo
The United States State Department has announced that Deputy Secretary of State William Burns will travel to India on December 10, 2011 for a series of meetings with senior government officials.
In New Delhi Mr. Burns will aim to discuss “a broad range of bilateral, regional, and global issues, underscoring the continued growth in the strategic partnership,” the Department said in a statement.
It further noted that he would travel to Mumbai as well, where he will meet with business leaders and join Consulate General employees for a ribbon-cutting at the American Consulate General’s new facility.
On December 13, 2011, Mr. Burns will depart India for several Southeast Asian destinations including, Hanoi and Kuala Lumpur.
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India Passes Nuclear Liability Bill

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Eric Auner
The Indian parliament has approved a bill that sets up a mechanism to compensate victims and defines who is liable, and to what extent, in the case of a nuclear accident. The bill makes nuclear supplier firms, in addition to the nuclear facility operator, potentially liable for such an accident.
The Civil Liability for Nuclear Damage Bill passed the Rajya Sabha, the upper house of the Indian parliament, Aug. 30 amid intense debate.
The bill seeks to enable the entry of private firms into the Indian civil nuclear market. Private nuclear firms typically require a legal cap on liability in order to insure themselves against accidents in a given country, and India previously lacked a regime that assigned legal liability. Government-owned firms, such as those in France and Russia, are covered by their respective governments and are not as dependent on a liability cap. U.S. nuclear suppliers are privately owned.
The U.S.-India Business Council in Washington released a statement Aug. 30, saying India should not channel liability to suppliers. “The absence of an effective, CSC [Convention on Supplementary Compensation for Nuclear Damage]-compliant liability regime could preclude involvement by the private sector…and stymie India’s multi-year effort to develop civil nuclear power” the council said.
In 2005, President George W. Bush and Indian Prime Minister Manmohan Singh announced an approach to easing U.S. and international nuclear trade restrictions on India, which is not a party to the nuclear Nonproliferation Treaty (NPT) and conducted nuclear test explosions in 1974 and 1998. In return for access to the global nuclear market, India agreed to place some of its nuclear facilities under International Atomic Energy Agency (IAEA) safeguards. The Nuclear Suppliers Group (NSG) and the U.S. Congress approved the plan in 2008. (See ACT, October 2008.)
A critical part of the new approach to India was a nuclear cooperation agreement, signed in 2007, with the United States. In the United States, critics said the agreement and the new policy as a whole undermined the nonproliferation regime and U.S. law by providing benefits to an NPT nonsignatory without requiring sufficient nonproliferation and disarmament measures in return. Advocates said the pact would bring India into the nonproliferation “mainstream,” improve U.S.-Indian relations, and spur trade between the two countries, in part by giving U.S. firms access to the potentially lucrative Indian nuclear market.
Article 17(b) of the liability bill states that the operator of an Indian nuclear facility has a “right of recourse” from the “supplier of the material, equipment or services” in the event of a “nuclear incident” resulting from the supplier’s “willful act or gross negligence.” The government-owned Nuclear Power Corporation of India Ltd. (NPCIL) currently is the only operator of nuclear power plants in India.
The Congress Party-led coalition government had attempted to change the supplier liability language so the right of recourse would only apply if there was “intent to cause nuclear damage” on the part of the supplier, but opposition complaints led to the removal of that language. International conventions governing nuclear liability, including the CSC, channel liability exclusively to the operator.
The Indian government is not party to any of those conventions. In a 2008 letter to U.S. Undersecretary of State for Political Affairs William Burns, Indian Foreign Secretary Shivshankar Menon said New Delhi intended to “adhere to” the CSC prior to commencing nuclear trade with the United States.
The liability bill also intends to “ensure clarity of liability and the requirement to pay compensation” to those who suffer physical or economic harm “caused by or arising out of a nuclear incident,” according to the “Statement of Objects and Reasons” attached to the text of the bill. In the event of such an incident, compensation is to be awarded by a specially appointed commissioner or by a central government commission in special cases. Article 46 clarifies that additional “proceeding[s]” may be brought against the operator of a nuclear facility under existing Indian law. This article potentially exposes the NPCIL to additional liability, and it is unclear how it would affect foreign suppliers.
There was a heated parliamentary debate on the legislation, including accusations that the bill was intended to shield U.S. corporations at the expense of Indian interests. The debate was influenced by the recent sentencing in India of eight Union Carbide executives who were involved with the 1984 Bhopal industrial accident in which 15,000 people were killed. The sentences were widely seen as lenient, and they drew political attention to U.S. companies involved in potentially hazardous activities in India.
In Aug. 25 remarks before the Lok Sabha, the lower house of parliament, Singh argued that the bill “completes [India’s] journey to end nuclear apartheid, which the world had imposed on India.” The United States and others placed sanctions on India’s nuclear program following the county’s 1974 nuclear test. Singh referred to claims that the bill promoted U.S. interests as being “far from being the truth.”
Indian Atomic Energy Commission Chairman Srikumar Banerjee insisted that the bill is “India-centric” in an interview with India’s Frontline magazine. He also downplayed the possibility that the inclusion of Article 17(b) would discourage foreign suppliers. “I hope I will be able to convince [foreign suppliers] that this will not cause any difficulty” in conducting nuclear commerce with India, he said.
The opposition Bharatiya Janata Party (BJP) had been critical of the bill, with senior BJP member Jaswant Singh accusing the government of “hustling” the bill through parliament. The BJP initially complained that the bill was too lenient toward suppliers and that the liability cap for operators was too low. However, after the government made several changes to the bill, including a tripling of operator liability, the BJP supported the legislation. In a press release on the party’s Web site, senior BJP leaders accused the government of initially attempting to pass a “suppliers immunity law,” but expressed “satisfaction” with the changes.

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India | Updated Dec 08, 2011 at 08:07am IST

Russia upset with Indian nuclear liability law

New Delhi: The US is not the only country upset over India's Nuclear Liability Law. Even old friend and strategic partner Russia is concerned.
Russian Ambassador Alexander Kadakin has said that the law should not apply to the first two reactors in Kudankulam as the agreement was signed in 1998, when the law did not exist.
"As regards to Kudankulam, the rules are not applicable as agreements were signed in 1978 by Gorbachev and another agreement was signed in 1998 when there were no liability laws, so they are not applicable to unit 1 and 2," he said.
Kadakin further said that the law should not apply to more Russian reactors that may be added on at Kudankulam in the future.
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William Burns to iron out N-liability irritants

PTI | Dec 11, 2011, 04.10AM IST
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NEW DELHI: India and the US are expected to make efforts to iron out irritants in the nuclear liability law for the implementation of the civil nuclear deal during the talks that US deputy secretary of state William Burns will have on Monday.
The civil nuclear agreement, signed by the two countries in 2008, will top the agenda when Burns meets National Security Adviser Shivshankar Menon, foreign secretary Ranjan Mathai and other officials. He is also expected to call on external affairs minister S M Krishna.
Burns "will meet with senior government officials to discuss a broad range of bilateral, regional, and global issues underscoring the continued growth in the strategic partnership", the US embassy said in a statement.
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N-liability Bill trips on compensation

, TNN | Mar 11, 2010, 01.22AM IST
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NEW DELHI: The much-debated nuclear liability bill, critical to participation of US firms in atomiccommerce with India, seems headed for the standing committee on energy with contradictions emerging over liabilities that will be incurred by state operators and foreign firms in case of a mishap.While government is keen to pass the bill ahead of US President Barack Obama's expected visit to India in mid-2010, the complex legislation may require more deliberations on liabilities of operators as and when the bar on foreign participation in running N-plants is lifted as also on long-term transnational compensation payouts.In a bid to garner support for the bill opposed by the Left, national security adviser Shiv Shankar Menon met BJP leaders to canvass for the party's backing.For the government to pass the nuclear liability bill, BJP support will be needed in both Rajya Sabha and Lok Sabha as the party's numbers will be important with SP and RJD no longer UPA supporters. BJP's nod would rid government of the worry of ensuring numbers.
BJP-government discussions do not appear to have resulted in a breakthrough as it was pointed out that the Rs 500 crore cap for the operator's liability may have to be revisited in the light of foreign participation as the opening up of the sector is very much on the cards. At present, only state-owned NPCIL operates power stations.
The bill looks to cap the overall compensation at Rs 2,300 crore or $450 million. On the other hand, US is not bound by any international liability convention and is governed by the Price Anderson Act of 1956 which provides for a cover of $10 billion with no cost to government. It covers power and research reactors as well other nuclear establishments.
With foreign participation of 26% being considered, liabilities may need further definition even though NPCIL remains the majority stakeholder. At present, the bill provides for NPCIL to pay up to Rs 500 crore while corporation would have its own liability terms with a foreign supplier in case equipment provided has contributed to a mishap. Official sources agreed issues like liability caps did need discussion and said the government would not be averse to sending the bill to a standing committee.
"We would like the bill to be considered, it has been circulated. But we can explain to the US or anyone else that it is part of our legislative process and cannot be avoided," they said.
Apart from BJP's objections, Trinamool Congress may also be an in-house objector as the party looks to blunt any "advantage" to Left for opposing a "pro-US" move. Trinamool is ultra-sensitive about the allergy its Muslim vote bank has to the US. It has also opposed nuclear power plants at Haripur in West Bengal on the grounds that they are "unsafe", though this may be more to do with denying the Left government any brownie points.
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Readers' opinions (1)

Rohit (Kolkata)
11 Mar, 2010 10:08 AM
Bhopal all over again....once again the Indian Government (is it a mere co-incidence that the Congress is in powere) is bending backwards to protect US interest.. terms that us does not agree to when it concerns the US...and capital costs will be just as high...who is pocketing the profits ???
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New Indian nuclear liability rules
18 November 2011New rules published on 11 November have clarified the amounts that nuclear material and equipment suppliers may find themselves liable for in the case of a serious accident at an Indian nuclear power plant.In August last year, the Indian government approved the Civil Liability for Nuclear Damages Act – the aim of which is to provide for prompt payment to victims of any nuclear accident that takes place within the country. The act broadly conforms to the usual principles of nuclear civil liability although several unique features proved controversial.One of these was that the act allowed operators of nuclear facilities to have 'right of recourse' against equipment suppliers if "the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services." No other nuclear country includes such a condition, as it sits uncomfortably with the principle of exclusive liability, which states that the operator is the one responsible for paying compensation in the case of an accident.
The result of this clause so far has been that foreign supply companies, especially those based in the USA, have been unwilling to supply to India because of this unexpected extra risk. This has led to a stagnation in a market place which had been predicted to burst into life with the finalisation of a nuclear trade agreement between India and the USA in 2008.
The recent rules seek to remove this blockage by explaining to suppliers the amount of 'recourse' they may potentially be exposed to. This will be for an amount that "shall in no case exceed the actual amount of compensation paid by [the operator] up to the date of filing such claim" or "the value of the contract itself, whichever is less".
The rules also explain the length of time that suppliers are be subjected to this risk: "The provision for the right of recourse shall be for the duration of initial license issued under Atomic Energy (Radiation Protection) Rules, 2004 or the product liability period, whichever is longer".
Foreign suppliers have yet to indicate if the new rules give a reasonable framework for them to do business, and the text still contains language that exposes suppliers to potential tort claims against operators separate from the capped amounts for liability. Some companies have said that they will hold off on supplying to India until it ratifies the Convention of Supplementary Compensation (CSC) – an international treaty that sets certain requirements for operator liability for countries that join it. India signed the convention late last year, but has yet to ratify it despite stating its firm resolve to do so. Some commentators have questioned whether the Indian Act comports with the requirements of the CSC. This means that the unusual nature of the Indian liability Act may yet be subject to international scrutiny.
Researched and written by World Nuclear News
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