A Question of Corporate Liability for Clinton

New Delhi is under pressure to get its nuclear act together in time for US Secretary of State Hillary Clinton's scheduled visit to India on July 20-21. Prime Minister Manmohan Singh's government is proceeding posthaste to meet the deadline on two tasks: getting nuclear liability legislation ready and deciding on the sites for two US nuclear reactors.

Also trying to get their act together are two concerned groups. Anti-nuclear activists, worried over implications of the proposed law, are joining forces with the Indian section of the International Campaign for Justice in Bhopal (ICJB) which has been fighting for long years on the liabilities of a multinational corporation responsible for a major industrial disaster and mass tragedy.

We have covered the question of sites for the US reactors in these columns before (Strategic Part of India's Civilian Nuclear Plans, July 1, 2009). Focus is now beginning to shift to the nuclear liabilities legislation with frightening import for a country that has yet to forget the Bhopal gas leak calamity of over two decades ago.

The purpose behind US pressures on the legislation is no secret. On June 25, 2009, Assistant Secretary of State for South and Central Asian Affairs Robert Blake told the House Foreign Affairs Committee: "... we're ... hoping to see action on nuclear liability legislation that would reduce liability for American companies and allow them to invest in India."

The pressure has been on for quite some time. David Mulford, US ambassador to India during George Bush's second presidential term, minced no words on the issue. Impatient with the excuse of inadequate time for the long procedure for the legislation, he reportedly urged the Indian government to opt instead for an ordinance, if the Indian parliament's calendar was too crowded.

The nuclear liability bill was delayed further by the fact that India's Atomic Energy Act of 1962 needed to be amended first to allow private sector investment in the civil nuclear sector. But this posed no serious problem. A scarred public memory, however, made the more important legislation much harder to sell.

Mulford and company could sell it, easily enough, to the ministers. One of them, understandably preferring anonymity, was reported to have told a reporter recently: "The draft of the Nuclear Liability Bill is ready. What this will do is indemnify American companies so that they don't have to go through another Union Carbide in Bhopal." No practicing politician can publicly profess such tender solicitude for the transnational cause of the tragedy.

Bhopal, capital of the central Indian State of Madhya Pradesh, turned into a "Hiroshima of chemical industry" on December 3, 1984. Union Carbide's pesticide plant leaked a highly toxic cloud of 42 tons of methyl isocyanate (MIC) into the air of a densely populated region. Of the 800,000 people living in the city then, 8,000 to 10,000 died within 72 hours. About 300,000 were injured and as many as 25,000 have died from gas-related diseases since the incident.

A long period of legal wrangling over compensations followed, first in the US and then in India. An out-of-court settlement was announced in 1989. This was not the end of the matter. The average amount to each of the families of the dead was no more than $2,200. The struggle of surviving victims for justice has continued.

In 2001, Dow Chemical Company bought Union Carbide for $9.3 billion. But Dow has refused to accept moral responsibility and any accountability for the tragedy. New Delhi did not protest too much. It has been more concerned that, by incurring Dow's displeasure, India might scare away US and other foreign investors.

It is against this background that many in the country find off-putting the official anxiety to spare any Bhopal-like experience, not for the people, but for nuclear corporates. It is in response to this lopsided logic that the two groups against liberating the corporates from liability in Bhopal-like contexts are coming together.

As Nityanand Jayaraman, an Indian activist of the ICJB, puts it, his organization is "keen that yet another disaster is not hatched on the skeletons of the Bhopal disaster." He adds: "At a time when neither the US nor the Indian government has done anything to address the lingering liabilities of the Bhopal disaster, it is unacceptable to project US multinationals as the only real victims of the Bhopal disaster, and take steps to immunize them from liabilities in the future."

Such considerations have not deterred New Delhi, as noted before, from keeping a draft of the proposed law ready for Clinton. Chances are that it is modeled on an earlier draft by the Indian corporates, represented by the Federation of Indian Chambers of Commerce and Industry (FICCI), waiting for nuclear commerce of mouth-watering prospects.

The stated purpose of the law will be to shield US suppliers from liability in the event of a nuclear accident. The law will make India a party to the international liability treaty, known as the Convention on Supplementary Compensation for Nuclear Damage, which makes plant operators responsible for damages from any accidents. Operators must set aside about $450 million for compensation in case of damage, and governments that sign the treaty must cover additional claims.

Competitors to the US firms, like Paris-based Areva SA and Russia's Rosatom Corporation, are covered by sovereign immunity because they are fully or partially controlled by government. Clinton's predecessor and Bush's Secretary of State Condoleezza Rice and her State Department officials have repeatedly stated they expect India to create a "level playing field'' for the US companies. It is difficult to see a post-Bush policy departure on this particular issue - unless protests against the liability bill become large enough in India to make a difference.

A freelance journalist and a peace activist in India, J. Sri Raman is the author of "Flashpoint" (Common Courage Press, USA). He is a regular contributor to Truthout.

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