SHANTI Bill: Nuclear Glasnost

NOT LONG after the Manmohan Singh government de­feated the no-confi­dence motion moved against it over its decision to conclude the nuclear cooperation deal with the US, the Civil Liability for Nuclear Damage Bill, 2010 was referred to the parliamen­tary committee on science, technology, environment and forests headed by Congress MP T Subbirami Reddy, a colour­ful figure who had earned his fortune as an industrialist and filmmaker. The committee’s task was to examine the Bill that would regulate matters of liability and culpability having an important bearing on foreign suppliers participating in India’s nuclear energy programme.

Neither Reddy nor those who gave him charge of the parliamentary committee would have envisioned he might have to steer such an important piece of legislation. The sociable MP with a hail-fellow-well-met approach was more at home with construc­tion contracts and studio deals than complex and politi­cally fraught technicalities of nuclear commerce. Reddy was quite glad to be guided by the government on various aspects of the Bill which aimed to, among other things, fa­cilitate the entry of American nuclear suppliers—a natural corollary to the US doing the heavy lifting in procuring an India-specific waiver from the Nuclear Suppliers Group.

In one of the early meetings of the committee, amendments that deleted a sub-clause deal­ing with foreign suppliers in the event of a nuclear accident sparked a major furore. The deletion was part of official amendments circulated at the June 7-8, 2010, deliberations of the committee. Clause 17(b) provided for the operator of a nuclear facility, which in India’s case is the government, to seek the “right to recourse” for a nuclear accident if it was the result of a wilful act or gross negligence on part of the supplier, which though not stated explicitly, included a foreign company. Such was the blowback that the clause was speedily restored and singed by the episode. Reddy speedily concluded the committee’s deliberations.

The contentious clause, however, ensured no Ameri­can firm took part in India’s Nuclear civil energy programme.

In fact, barring Russia which had ongoing projects in India, almost no other nation capable of supplying advanced nuclear technology was prepared to step forward. The reason? The right to recourse created liabilities that no insurer was prepared to underwrite, effec­tively barring companies like Westinghouse or GE-Hitachi from the Indian market. In hindsight, a moderation of the right to recourse clause was needed as it gave rise to poorly defined liabilities. Try as they might, Indian and American governments were unable to resolve the issue resulting in India being denied the full benefits of nuclear commerce. India was able to import uranium but foreign collabora­tion in building reactors and plants remained limited.

Congress MP from Chan­digarh Manish Tewari is right when he said during the debate in Parliament on the Sustain­able Harnessing and Advance­ment of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 that the Bharatiya

Janata Party’s (BJP) opposition to the India-US nuclear deal was not in the interest of India’s nuclear programme. At the time, BJP was swayed by the strong and hawkish views of Arun Shourie and Yashwant Sinha, and tempted by the possibility that the Manmohan Singh government might fall paving the way for a mid-term election.

But Tewari and some others are misplaced in their opposition to privatisation of the sector. It has taken 15 years for the ill-considered clause 17(b) of the 2010 Act to be deleted and it is amply clear that government monopoly will not deliver on India’s clean energy targets.

The SHANTI Bill’s state­ment of objective outlines the role of the private sector in India’s nuclear energy programme. “…it is desirable to harness the potential of nuclear energy through active involvement of both public and private sectors and to lever­age the participation of the do­mestic industry to contribute to and benefit from the global nuclear energy ecosystem including research, technol­ogy, manufacturing, finance, insurance and skill develop­ment.” The terms allowing “any other company” or “a joint venture” in clause 3 can lead to a sea change in India’s civil nuclear programme. The SHANTI Bill pins the liability for nuclear damage primarily on the operator of a nuclear facility though, as Minister of State in the Prime Minister’s Office Jitendra Singh said in Parliament, the operating en­tity can have agreements with suppliers as is almost certain to be the case. The right to recourse can be invoked only where such a right is expressly provided for in a contract or the nuclear incident is the result of “commission or omission” of an individual with an inten­tion to cause nuclear damage.

Despite a major expansion in nuclear energy, the sector contributes just 3 per cent to India’s power needs. If India is to reduce its fossil footprint and meet international obligations, an enhanced role for nuclear energy is absolutely essential.

The Bill is not without safeguards. It defines nuclear damage comprehensively, in­cluding economic loss, costs of restoration and loss of income while a nuclear facility covers a power plant, spent fuel storage, fuel fabrication, refinement or conversion plants and waste management. The source material, defined to include uranium containing naturally occurring mixture of isotopes, depleted uranium isotope 235 and thorium and spent fuel will be stored as per directions of the central government. Heavy water used in a facility will be under the supervision of the Centre and certain set of activities are set out as exclu­sively government domain. These are enrichment or isotopic separation, manage­ment of spent fuel and produc­tion of heavy water.

Clause 5 of the SHANTI Bill states the Central government may on the recommendation of the Atomic Energy Regulatory

Board or even on its own assume control of any radioactive substance or “radiation-gen­erating” equipment in order to prevent a radiation hazard. Further, the working of mines and minerals in onshore and offshore areas containing uranium and thorium and de­commissioning of such mines shall be carried out only by the government, a government company or a corporation owned or controlled by the government. The maximum liability in respect of each nuclear incident has been set at the rupee equivalent of 300 million Special Drawing Rights (SDRs) or such higher amount as the Central government may notify.

Taken in totality, the SHANTI Bill will provide the platform to accelerate the sophistication and spread of India’s nuclear energy pro­gramme. The Union Budget had set out the development of modular reactors as a new objective of the programme alongside large conventional reactors. The “portability” of modular reactors that might be well suited for remote regions where setting up transmission lines is a challenge and a costly affair, all need infusion of technology currently available in developed nations, and a research base that will require government and private sector participation. The SHANTI Bill advocates the pooling of private and government resources and opens the doors to meaningful foreign participation.