Nuclear shield for MNCs
The new Indo-US agreement protects American companies from being held liable for nuclear accidents
Tnuclear energy cooperation HE CIVIL agreement between India and the US,announced on January 25,was hailed as the highlight of the US President Barack Obama’s recently concluded visit. Although former prime minister of India Manmohan Singh and then US president George Bush had signed a landmark civilian nuclear deal in 2008,the two countries could not do business because the US did not agree to subject its companies to India’s liability laws in case of an accident. It also insisted on keeping a tab on nuclear materials supplied. The new agreement has taken care of US concerns but compromised those of India.
After the 2008 deal, India passed the Civil Liability for Nuclear Damage Act (clnda), 2010, which held suppliers liable for compensation in case of any accident caused by faulty equipment and gave the operator (the government) the right to sue them. This is the law which nuclear fuel suppliers,especially from the US and France, have been fiercely opposed to.
To come out of the logjam,India has now offered to set up Indian Nuclear Insurance Pool of 1,500 crore. This would indemnify
` suppliers and ensure that American companies enter the market without being held liable for compensation.The Government of India and national insurance companies will contribute 750 crore each to the pool.
` General Insurance Corporation of India (gic), a 100 per cent government-owned company,has been made the administrator of the pool. It is trying to approach private bankers to garner the money. It is also planning to issue insurance-linked bonds to tap new funding sources. When contacted,