The Bhopal Clause: Obama's Nuclear Deal with India Gives US Companies Immunity in the Event of Accidents
January 27, 2015
Andrea Germanos / CommonDreams
India is one of the few nations that do not exempt nuclear suppliers from accident liability. The reason can be found in the central Indian city of Bhopal, where more than 10,000 people were killed or injured in a 1984 chemical leak from a Union Carbide Corp. pesticide plant. President Obama has changed all that. The new US/India trade agreement appears to shield US companies from liability from nuclear accidents, leaks, meltdowns and explosions.
Obama, India's Modi Hail 'Breakthrough'
Nuclear Deal that Limits US Corporate Liability
Andrea Germanos / CommonDreams
"We think we came to an understanding of the liability."
-- US Ambassador Richard Verma
NEW DELHI (January 25, 2015) -- President Barack Obama and India's Prime Minister Narendra Modi on Sunday announced a "breakthrough" after reaching a deal on commerce that appears to shield US companies from liability from nuclear accidents.
Obama is in India for a three-day visit.
A decade-old deal that would allow the US to provide India with nuclear reactor components and fuel had met obstacles, one of which was about tracking where the material went.
Siddharth Varadarajan, Senior Fellow at the Centre for Public Affairs and Critical Theory at Shiv Nadar University, explained the second at the Huffington Post:
Nuclear commerce is stuck because American companies like GE and Westinghouse -- which regard being sued for a nuclear accident as part of the risk of selling reactors inside the US -- are unwilling to subject themselves to any claims for damages in the event of an accident in India. India's liability law is seen by them as an obstacle and the Obama administration has spent the past four years trying to get the Indian side to dilute its provisions.
Bloomberg News adds:
India is one of the few nations that do not exempt nuclear suppliers from accident liability. The reason can be found in the central Indian city of Bhopal, where more than 10,000 people were killed or injured in a 1984 chemical leak from a Union Carbide Corp. pesticide plant. The episode remains the world's worst industrial accident.
Public support for the liability legislation only hardened after the 2011 Fukushima meltdown in Japan . . .
Danny Roderick, CEO of Westinghouse, which has a tentative deal to build as many as eight reactors in Gujarat, has said that potential litigation stemming from a nuclear accident in the country would be costly. "The way the current law was written, every person in India can sue you" the Pittsburgh Post-Gazette reports Roderick as saying. "That's the bigger issue -- to withstand the legal costs of a billion people trying to sue you."
According to reporting on Sunday, the sticking point may have been resolved. Reuters reports that the deal reached "could open the door for US companies to build nuclear reactors in India by promising insurance cover to US companies that had shied away from an Indian law placing liability on suppliers in case of an accident."
The Guardian adds: "After pressure from US diplomats, the Indian government was thought to have agreed a state-backed insurance scheme that would cap the exposure of nuclear suppliers and open the door to billions of dollars of new contracts. India will also allow closer tracking of spent fuel to limit the risk of it falling into terrorist hands."
And from the Washington Post: "The White House said the agreement was reached through a combination of insurance pools and an assurance that reducing the liability would be within the framework of the 2010 agreement. It will now be up to companies to decide whether or not to go forward with doing business in India. Officials said that, despite the law, the change would not require additional legislation in India."
Full details on the implementation were not yet revealed, but US Ambassador Richard Verma stated, "We think we came to an understanding of the liability" issue, and said the deal "now opens the door for US and other companies to come forward and help India develop its nuclear, non-carbon-based energy production."
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