The bill seeks to cap liability arising out of a nuclear accident at Rs 2,200 crore. Of this, liability for the operator, a private firm or one owned by the government, will be Rs 500 crore.
That means, the operator will pay maximum of Rs 500 Crore, if an accident happens and then Government will pick the tab up to 2,200 crore.
Now To put the things in perspective:-
For an industrial accident, Bhopal Gas Tragedy -1984, that killed about 10,000 people over time, the Union Carbide paid a compensation of $470 million (Rs 2350 crore, per today's conversion rate) in 1999 settlement. That was the sum it got from insurance.
And that compensation got only following to the victims (quoted from wiki):-
* Widow pension of the rate of Rs 200/per month (later Rs 750) was provided.
* One-time ex-gratia payment of Rs 1,500 to families with monthly income Rs 500 or less was decided.
* From 1990 interim relief of Rs 200 was paid to everyone in the family who was born before the disaster.
* The final compensation (including interim relief) for personal injury was for the majority Rs 25,000 (US$ 830). For death claim, the average sum paid out was Rs 62,000.
* Widow pension of the rate of Rs 200/per month (later Rs 750) was provided.
* One-time ex-gratia payment of Rs 1,500 to families with monthly income Rs 500 or less was decided.
* From 1990 interim relief of Rs 200 was paid to everyone in the family who was born before the disaster.
* The final compensation (including interim relief) for personal injury was for the majority Rs 25,000 (US$ 830). For death claim, the average sum paid out was Rs 62,000.
You know what is going to happen! After opposition's hue and cry government will increase the liability (it will be interesting to see, to how much). And everyone will come across winner, except the general public.
Now THINK what could happen in case of a nuclear accident! Try searching "Chernobyl" on google.
For a Nuclear accident, government wants to cap the liability to only $100 million (Rs 500 crore), that is one fifth of liability settlement for Bhopal Gas Tragedy?
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Update March 31st, 2010
Now US nuclear industry wants this bill to be even more restrictive.
In it's current form, the bill envisages Rs 500 crore cap only in case of "no-fault liability".
What that mean is that in case of accident operator pays Rs 500 crore. Victims can sue operator for more compensation, but will have to prove operator's fault for that. (of course this will take decades in current judicial system).
US N industry wants cap for total liability not just for "no-rault liability"
Also, the current form of bill ALLOWS operator to sue reactor manufacturer in turn for it's negligence that may have caused accident.
US nuclear industry wants the bill to ensure that they CANNOT be sued, no matter what!
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Lets say we increase the operators liability to 2200 crores. Do you still think that will be enough for nuclear tragedy?
ReplyDeleteNo! Rs 2200 crores will not be enough. And that is the point! Why put a limit on liability by enacting a law!
ReplyDeleteLet operators buy enough insurance as they deem fit. (Union Carbide just payed what it got from insurance.)
When you buy a vehicle, Government requires you to buy a "minimum liability" insurance, that helps you pay part of liability arising out of accident that you cause. That still does not limit how much you can be sued for (in other words your liability).
Why limit liability of nuclear power plants?
Here is how it is setup in USA:-
ReplyDeleteNuclear industry assumes liability for first $10 billion (Rs 50,000 Crore, compared to Rs 500 crore envisaged in the bill). After that the US Government assumes liability.
http://en.wikipedia.org/wiki/Price–Anderson_Nuclear_Industries_Indemnity_Act
The $10 billion that you are talking about doesnt work the way you think. USA has a Minimum Liability Act which puts a part of the liability on the operator. In US, all of the nuclear power plants are operated by the Private Sector. So, all the nuclear power plant operators have come together to and formed a corpus of $10 billion and they pay out the liabilities out of this money in case of an accident. Just because the corpus is valued at $10 billion doesnt mean that they will pay out the entire $ 10 billion. Also, its not the govenrment's mandate that they form a corpus.
ReplyDeleteThe government has just framed a Minimum Liablility Act. The companies that run the nuclear power plants could have decided to form a corpus on their own.
They could've decided not to set up the corpus also but I guess they thought that if they pay out individually, the liability that one company can afford might not be enough.
Akash: Actually, in USA there IS an Act called "Price-Anderson Nuclear Industries Indemnity Act (commonly called the Price-Anderson Act)" passed in 1957. The purpose of the act is to reduce the financial blow to nuclear operators against liability claims arising from nuclear incidents while still ensuring compensation coverage for the general public.
ReplyDeleteThe act REQUIRES $10 billion pool created by operators to pay claims up to $10 Billion. (It is an Insurance type of arrangement, where all parties pay a small portion to cover large incident for any of them.) Any claims above the $10 billion would be payed by the federal government.
So the system thus created ensures $10 billion compensation arising out of an accident BY this pool. Compared to Rs 500 corore ($100 million) envisaged in bill in India.
Also there is NO CAP on compensation, even beyond $10 billion, as the US Government will pay any claims beyond that. This is in contrast to a cap of Rs 2200 crore ($440 million) envisaged in bill in India.
Quoted from wiki:- http://en.wikipedia.org/wiki/Price–Anderson_Nuclear_Industries_Indemnity_Act