Like the debate on the Indo-U.S. nuclear deal, and the subsequent accord with the Nuclear Suppliers Group in 2008, the one on the nuclear liability bill has left a lot of imponderables and uncertainties. Will the bill finally end India’s nuclear isolation? Or does it risk maintaining the three decades of ‘nuclear apartheid’ because of stringent liabilities sought to be imposed on nuclear suppliers? Will it protect the common man in the event of a nuclear accident? Or would he or she, like most victims of the Bhopal gas leak, be abandoned with little or no compensation?

In a rare show of bipartisanship, weeks ahead of U.S. President Barack Obama’s visit, the Parliament passed the bill and obviously expects it to bring to fruit India’s ambitions of generating vast amounts of nuclear energy. Even though the Bharatiya Janata Party played a constructive role in shaping the bill, a far greater force was a vigilant media led by The Hindu newspaper. The national daily’s Siddharth Varadarajan uncovered evident biases in favour of nuclear suppliers that even the opposition had missed. So much so, the same writer, in an editorial page article, even accused the United Progressive Alliance government of deceit in trying to favour foreign suppliers. Eventually, Prime Minister Manmohan Singh, who has shepherded the nuclear accord with rare force over the past few years, once even outwitting one-time communist party allies, conceded all points. The question is: Did he give away too much?

Many believe that may be the case. This is not a mere western view or that of vested nuclear interests. Many inside the country including the leading business chambers are convinced nuclear suppliers will not invest in India because of the stringent obligations the law imposes. Here’s what Sudhinder Thakur, executive director at Nuclear Power Corp. of India, the public-sector monopoly operator, told Bloomberg:

“This clause (supplier liability) doesn’t appear in any domestic legislation in any other country…If you supply $2 million of equipment, how can you be held liable for up to $300 million over 80-odd years? It’s not practical.”

The reference to 80 years is a clause that holds a supplier liable for 60 years of the plant’s life and a further 20 years for any accident. That prompts the question: Is the bill seriously flawed?

The bill imposes liability on suppliers, something many nations don’t. In fact, a global accord signed by 80 nations after the Chernobyl disaster, the lone nuclear accident, imposes such obligations only on the operators regardless of fault. The question then is: Did India need to impose supplier liability to protect the Indian people in the event of accidents like Chernobyl? Probably not. This is because the bill already imposes operator liability of $322 million and potentially unlimited government compensation for victims. Besides, India also could draw on a global fund of at least $455 million to pay for damages. That leads us to the question: Why did the bill seek to impose stringent liabilities on all and sundry, instead of the operator alone?

I think the opposition pressed for the supplier liability, and the Indian government acceded, mainly because of the recent backlash over the Bhopal gas leak case. It is obviously in error because in the Union Carbide Corporation case, it was the operator itself, not the supplier, that was at fault. And eventually, India allowed the operator to get away lightly. If anything, then, the bill should have set high liabilities on the operator, not the suppliers. But in drafting this bill, everybody — the government included — has sought to be seen as protecting the Indian people against accidents, regardless of whether this actually achieves it. In the misdirected effort, the bill errs in placing an onerous, and additional, responsibility on the supplier.

Regardless, I think there might still be a way that allows suppliers to escape liabilities. Already, industry groups in India have asked the government to take a “pragmatic approach” in implementing the bill’s provisions once it is enacted. I have not read the final version of the bill but think this can happen if a nuclear operator – currently, only the government-run enterprise – voluntarily relinquishes the right of recourse against suppliers or, in contracts with suppliers, simply indemnifies the supplier. Or limits the liability both in terms of the amount as well as the time. Clause 17 (a) grants nuclear operators the right of recourse against suppliers only if expressly provided for in a contract. What if the contract never does that? What if the government makes sure the Nuclear Power Corporation, the sole operator, does not seek supplier liabilities in its contracts? Is this what the government had in mind when it simply accepted all the other concessions sought by the opposition?