Maximum corporate liability for a nuclear disaster in India : $322 million

The Gulf of Mexico oil spill disaster which killed nine Americans and destroyed some marine life in the affected area will cost the British company BP an estimated 30 -50 billion dollars in liability.

But an American nuclear power company will have to pay a maximum of 322 million dollars for a nuclear disaster in India which can potentially kill hundreds of thousands of people and leave behind contamination affecting future generations with birth defects and severe health problems.

Indian Cabinet has finally approved the controversial Nuclear Liability Bill (Civil Liability for Nuclear Damage Bill) which caps the liability for a civilian nuclear power power plant disaster to a maximum of $322 million. This amount is three times higher than the original proposed by the ruling Congress party regime. They increased the amount in the face of intense opposition and criticism from other parties and activists.

The American nuclear industry lobby wanted the liability cap before they start investing in India's civilian nuclear sector which has recently been opened up for private investment. They have succeeded. US company General Electric will be the biggest beneficiary of the liability cap as the company will now be able to look for nuclear deals in India without much worries about the potential liability.

By contrast, a nuclear power plant operator's liability in the US under the US legislation is $12.5 billion dollars.

German, Russian and French nuclear power companies had already started signing deals in India as they were not seeking any liability cap. The reason is that their respective governments underwrite their nuclear disaster liability.

But the US government does not take any such responsibility for the US companies' actions abroad. As a result, the US companies were not bidding for nuclear plant contracts in India. Rather they relied on an intensive lobbying with the reported support of the Obama administration to influence the legislation.

The bill needs to be passed by the parliament where it is likely to meet protests by the main opposition party BJP which want more stringent supplier liability clause in the bill.

It may be mentioned that the infamous Bhopal Gas disaster took place when the currently ruling Congress party was in power. And the disaster happened in a chemical plant owned by Union Carbide, a US company. So they have not learnt any lessons. See here a feature we did in Ethical Corporation on this.