India’s Nuclear Liability Law has new relevance, as Fukushima disaster unfolds

The Obama administration is keen to see the Indian liability law changed, warning that any supplier burden could jeopardize investment gains teed up by the U.S.-India civil nuclear pact in 2005, but the Japanese crisis stands to throw a wrench in that effort…..Should the prospect of nuclear suppliers and operators battling in court over any Indian safety lapse dissuade U.S. companies from entering that country’s market, it would compound the financial blow already expected within the industry as a result of the Fukushima crisis

Japan Disaster Refuels Liability Debate in U.S.-India Nuclear Pact, NYTimes.com, By ELANA SCHOR March 25, 2011 Nuclear-powered nations are taking a hard look at safety in the wake of Japan’s struggle to stave off a meltdown. But as the thorny question of liability emerges, a push to reassess who pays for post-disaster rebuilding could flare up in India — where the United States hopes to gain from a nascent nuclear boom Six months after India left the door open for suppliers to shoulder cleanup costs after an accident, breaking from international precedent that gives nuclear operators that role, the country is still working on a solution to its liability puzzle.

The Obama administration is keen to see the Indian liability law changed, warning that any supplier burden could jeopardize investment gains teed up by the U.S.-India civil nuclear pact in 2005, but the Japanese crisis stands to throw a wrench in that effort.
“If it was proved over time that an act of God was exacerbated” by a flawed design in the reactor model used at Japan’s Fukushima Daiichi plant, “that finding would definitely impact the liability debate in India,” said Ashley Tellis, a former State Department adviser who helped secure the 2005 nuclear agreement.

“But if such a finding is not forthcoming,” added Tellis, now a senior associate at the Carnegie Endowment for International Peace, “the tragedy itself has no bearing on the debate over liability.”…….

Should the prospect of nuclear suppliers and operators battling in court over any Indian safety lapse dissuade U.S. companies from entering that country’s market, it would compound the financial blow already expected within the industry as a result of the Fukushima crisis (E&ENews PM, March 24)…….

And if a Japanese-style nuclear calamity were to hit India, the volatile liability debate ultimately could prove irrelevant. India’s law exempts operators from paying any damages directly linked to an “exceptional” natural disaster — language similar to the Japanese rules that are likely to leave taxpayers on the hook.

Japan Disaster Refuels Liability Debate in U.S.-India Nuclear Pact – NYTimes.com