Beware Bhopal! Legal framework needed for India's use of nuclear energy

V N Haridas and Yash Thomas Mannully
Published in Opendemocracy.net and also in Manupatra Newsline (Jan 2010)


India is entering the nuclear foray with plans for mega electricity generation projects and increased role of private and foreign firms in this area. India was using the nuclear energy for various societal applications including energy generation through the framework provided by the Atomic Energy Act, 1962. Even though the Atomic Energy Act initially provided exclusive government control, the concept of public participation was introduced later and currently there plans to gradually open up the nuclear energy generation sector to full private participation.
The operationalisation of the Indo-US Joint Statement of July 18, 2005 resulted in the collapse of the isolation faced by India in the area of peaceful use of nuclear energy. There prevailed a win-win situation for the Indian government at all stages of operationalisation of the Indo-US Joint Statement that has turned the limelight from major loopholes in the Indian legal system as in areas of environmental protection, rehabilitation, liability and compensation and transparency. The Indian government has decided to introduce in the Union Parliament’s Budget Session a piece-meal legislation called “Nuclear Liability Bill’ to cap the liability from potential accident . In this aspect this article tries to examine the legal issues raised by the Indo-US Nuclear Cooperation Agreement and the ability of Indian legal system to address the issues associated with nuclear energy in the light of the experience gained from the Union Carbide (Dow Chemicals) Disaster at Bhopal.
Why Legal Framework?
The legal framework is important mainly due to the following aspects;
1) Domestically a well developed legal framework covering the peaceful use of nuclear energy will foster development as well as address the problems raised by the industry especially those affecting the public.
2) Internationally it is a prerequisite for engaging in nuclear cooperation and technology transfer.
It will be beneficial to analyse the legal framework in United States and France with which India entered into Nuclear Co-operation Agreements. The gradual operationalisation of the agreements allows nuclear firms from these countries to operate without adequate legal framework in India while at the same time their activities are highly controlled in their home state. This brings a situation similar to the opportunities opened to the multinational corporations as part of the establishment of World Trade Organisation to utilise the availability of cheap labour, rich resources and inefficient legislative, legal, administrative and enforcement mechanisms. The impact of any potential hazard from the nuclear industry to the public and environment will be much higher which in itself highlight the need to provide a legal framework covering all aspects of peaceful use of nuclear energy.
In contrast to India the legal framework in US and France covers all aspects of peaceful use of nuclear energy especially through liability and compensation regime, public participation and transparency. For instance the Price Anderson Act, which was an amendment to the Atomic Energy Act, 1954 provides a unique system of nuclear liability coverage for power plants as well as for transportation of nuclear materials to and from such facilities. It covers all loses of third party bodily injury and property damage off the site of the nuclear installations. Beyond the insurance cover and irrespective of fault Congress, as insurer of last resort it can decide how compensation be provided in the event of a major accident. The 1966 Amendment to the Act provided for the establishment of an Extraordinary Nuclear Occurrence (ENO) for liability and also the concept of precautionary evacuation. The National Environment Policy Act (NEPA) and the Alien Torts Act further strengthens the legal framework.
The French Nuclear Programme is based on substantial involvement by the government in both development and production of nuclear power contrary to the United States with liability cap and uses a single reactor system design for uniform safety systems. The liability constraints in France are based upon a variety of international treaties. France had adopted and modified both Paris and Brussels Convention in its Law on Third Party Liability in pursuant to the Paris Convention, Brussels Convention and Additional Protocols of 1964 and 1982 . The major areas covered by the Act include summary procedure for getting compensation and a special tribunal with power given for emergency measures to the Public Prosecutors and The Examining Magistrates .
Another peculiar legislation is the one regarding the democratisation of public enquiries and environmental protection to inform the public and obtain its comments, suggestions and counter proposals. The 1987 Act clarifies the pre-existing system of assistance, organisation plans and emergency plans to introduce more information about major risk with increased obligation to the operator for safety and risk. More over Article 1384.1 of the Code Civil provides escapes from liability only if the accident occurred due to force majeare or unforeseeable circumstances beyond one’s control.
Legal Framework for the Use of Nuclear Energy in India
The Constitution of India includes the subject of atomic energy and its mineral resources in the Union List providing the Central Government exclusive control over nuclear energy . The Atomic Energy Act was enacted in 1948 and it was replaced in 1962 which empowers the Central Government and in turn to the Atomic Energy Commission , to do all things associated with the use of nuclear energy.
The Atomic Energy Act does not specifically deal with the question of compensating nuclear damage. Section 29 of the Atomic Energy Act of 1962 provides that; “No suit, prosecution or other legal proceeding shall lie against the Government or any person or authority in respect of anything done by it or him in good faith in pursuance of this Act or of any rule or order made under.”
This provision seems to confer immunity from legal action and in case of a nuclear incident causing radiation exposure to the public and environment will the Government resist a claim of compensation and liability. More over with the approval of private firms in this area, the present legal framework’s ability to address these issues gains much importance.
Rhetorically it can be said that the judicial activism in the field of Article 21, Constitution of India has expanded the concept of right to life and personal liberty. The Indian judiciary was able to develop compensatory jurisprudence based on Article 21 and principles like the absolute liability principle .
The developments related to Article 21 of the Constitution of India will limit the application of section 29 of the Atomic Energy Act conferring immunity on the government. But this must be analysed in the light of the justice rendered to the victims of the Union Carbide Tragedy at Bhopal which highlight the weakness of the present legal framework to provide liability, damages and even to bring those responsible for trial. The impact of a major nuclear incident will be catastrophic raising complex tort litigation which may take decades under the present position.
Union Carbide Gas Tragedy: Unsettled Issues
The Union Carbide tragedy at Bhopal remains an outstanding example of failure on the part of judiciary, government machinery and certain sections of the civil society to provide justice to the victims as well as to the future generations due to the lack of proper legal framework and inefficiency. The experience gained from the aftermath of Union Carbide Tragedy gets more importance as India is entering into the nuclear foray without proper legal framework and underdeveloped compensation and liability regime.
Union Carbide opened its Bhopal Plant in 1968 and on the night of December 2nd -3rd 1984, methyl isocyante, hydrogen cynide and other toxic gases began to leak in substantial quantity from Union Carbide India Limited (“UCIL”) pesticide factory in Bhopal, India. Even though the government figures are less it was estimated that around 8,000 people died with 3 days of leakage with profound affect on the surviving population .
The Indian government passed the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 making itself the exclusive representative of the Bhopal victims and filed "unprecedented" claim in the United States Court against Union Carbide Corporation the majority shareholder in UCIL. The case was a unique one since India; a sovereign republic representing thousands of indigent victims was asking the United States judiciary to determine the liability of a Multinational Corporation. The Indian claim was to hold the parent corporation absolutely liable for foreign harms regardless of whether it was a subsidiary or head office that caused the harm since the Multinational Corporation is in the best position to prevent those harms in its profit making enterprises. More over India also argued that its laws were not developed to handle this mass tort litigation and the legal argument was based on three situations namely 1) Indian legal system is inadequate for the litigation, 2) Union Carbide by its control of UCIL was responsible for the acts of its subsidiary and 3) there is overwhelming American interest in encouraging American multinational corporations to protect the health and well being of peoples throughout the world .
Union Carbide requested the US court to dismiss the action on the ground of Forum Non Conveniens, pleading that India is the appropriate forum. The district court hearing the consolidated action resulting from these suits ultimately dismissed the case under the doctrine of forum non conveniens which was upheld by the second circuit effectively denying the plaintiffs an opportunity to vindicate their legal rights in U.S. federal courts. In the decision by Justice Keenan as it was reasoned that the dismissal would best serve US public interest factors.
After the dismissal of the case in U.S, the Government of India brought a $ 3 billion claim against Union Carbide in India. In the mean time the assets in India were sold and the money was donated to build a hospital to treat victims. In the aspect of liability of Multinational Corporations for the actions of its subsidiary, the interim order reached by the Bhopal District Court and the Madhya Pradesh High Court needs special emphasis as it deviated from the perceptions held in Judge Keenan’s decision .
Finally when the issue came before the Supreme Court of India, it failed to acknowledge the established legal principles or the novel concept of treating businesses tightly interconnected as a single entity by piercing the corporate veil forwarded by Judge Seth of Madhya Pradesh High Court. The Indian government agreed to an out-of-court settlement of $470 million USD in February 1989 which will be the full and final settlement of all civil liability. There were cases challenging the constitutional validity of the Bhopal Gas Leak Disaster (Processing of Claims) Act 1985, which gave the Indian central government exclusive power to represent the victims in all legal proceedings on grounds that it made no provision for a hearing violating the natural justice. Even though the Court upheld the constitutional validity of the Act it does not clearly distinguished the validity of the Act and the settlement judgement .
The settlement order was challenged in a review petition. On review the Supreme Court upheld the settlement but reinstated the criminal charges against UCC, UCIL and several officers including UCC Chief Executive Officer Warren Anderson . Even though before the US District Court the UCC showed its submission to Indian Jurisdiction, none of the accused appeared before the Bhopal courts to face the criminal trial. The court declared UCC, UCIL, Warren Anderson and other indicated officers as absconders from justice. But no creative step like extradition proceedings were initiated like in the case of the extradition of "Natwest Three" from England to face charges in US regarding the collapse of Enron shows the inability of the Indian Judiciary and Government to give justice to the victims.
The Union Carbide never provided the information regarding the composition of the leaked gases or its impact on human and environment. The factory was abandoned leaving behind large quantity of toxic waste causing health hazards to the population around it, birth defects to even second generation of children and groundwater pollution. In 2001 Union Carbide merged with Dow Chemical making Dow Chemical the largest chemical company in the world. Dow has refused to accept the moral responsibility for the actions of Union Carbide in Bhopal. In US there are cases still going regarding the legal responsibilities while the local population of Bhopal continue to suffer the contamination left behind by the disaster.
Recently the Bhopal District Court has issued an order asking U.S.-based Dow Chemical Corporation to explain why it should not be required to have its subsidiary, Union Carbide, appear to face pending charges in a criminal case relating to the 1984 gas explosion which killed thousands of Bhopal residents . To escape from the issues of legal liability the Dow Company is now trying for out of court settlement regarding cleaning up the UCC’s abandoned Bhopal plant and at the same time distancing itself from the UCC’s liability .
The leakage at Bhopal provides three points namely 1) the absence of legal framework for dealing multinational corporations as it was not subject to the law of its home state (United States) or its host state (India) or to international law 2) the ability of the Indian judiciary and legal profession to handle complex tort cases and 3) the extreme delay in providing justice (in its fullest sense). More over it also highlight the ability of the multinational corporation to escape civil and criminal liability and at the same time its ability to lobby the government machinery for escaping from cleanup costs and to continue its business. .
Conclusion
Currently it is difficult to bring class actions under civil law and the law of torts is underdeveloped when compared with position in other states using nuclear energy. More over together with other issues like delay in deciding cases, restrictive approach of courts towards compensation amount, ability of the Indian legal profession to handle complex tort cases, difficulty in access to the Indian Judicial System and the need for scientific and medical evidence makes litigation in the area of nuclear damages virtually impossible for an average Indian.
The Indian government’s approach presently focuses only on the commercialisation and projects for maximum use of nuclear energy for power generation with the incorporation of private firms into this foray without any legal framework to deal the eventualities arising out of the use of nuclear energy. The policy change for increased use of nuclear energy together with the entry of private companies both domestic and international as result of Indo-US Nuclear Cooperation Agreement, 2007 should be backed by legislative framework. The present plans to introduce a Bill in the Parliament to cap the liability from potential accident does not address the other issues attached with peaceful use of atomic energy which highlights the need for a comprehensive legislation so that future growth will have a strong legal foundation.
In this light it is high time for the government to address the issues of liability regime, compensation, public participation in decision making, waste disposal and environmental protection and relief and rehabilitation related to the use of nuclear energy through a comprehensive legal framework. This will remove the fears attached with the use of nuclear energy and will further help in its public acceptability. Other wise it will be the common man who will be left behind to suffer the consequence which in the long term will result in violence and collapse of law and order as evident from the opposition against the mining and industrialisation in the eastern states of India.