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INDIA-U.S.: Hurdles Aplenty Before Nuclear Deal Goes Commercial

Ranjit Devraj

NEW DELHI, Jul 20 2009 (IPS) - As U.S. Secretary of State Hillary Clinton began talks with Indian officials in New Delhi on Monday to take a forward a civilian nuclear cooperation agreement, signed by the previous Bush administration, it was apparent that there were many roadblocks to be cleared before deals worth an estimated 10 billion dollars are signed.

Robert Blake, assistant secretary of state for South Asia, said last week, that the deal presented a “major opportunity for American companies, and opens up as much as 10 billion dollars worth of exports to India’’.

But standing in the way of those business opportunities — involving the export of reactors and technology — is legislation pending in Indian parliament that would shield U.S. suppliers from liability in the event of an accident, thereby allowing them to access insurance cover.

Probir Purkayastha, a leading member of the Delhi Science Forum, told IPS that placing responsibility on Indian operators alone while protecting U.S. suppliers was “unacceptable” and likely to be challenged by human rights activists and also by opposition groups in parliament whenever it comes up.

Purkayastha, said he was not opposed to the use of nuclear power to meet India’s energy needs but was worried because of the sheer cost of U.S. atomic energy which he estimated at around 5.6 million dollars per megawatt.

U.S. firms like GE-Hitachi and Westinghouse Electric already face competition from suppliers such as the Paris-based Areva SA and Russia’s Rosatom Corp. which are covered by sovereign immunity because they are fully or partially controlled by governments when it comes to liability issues.

While sites have already been identified in the Indian states of Andhra Pradesh and Gujarat, where U.S. nuclear power plants may be built, separate talks between Indian and U.S. officials are to begin later this week in Vienna to determine how spent fuel generated by U.S. supplied reactors will be reprocessed.

Under the pact signed last year between the two countries to open up sales of civilian nuclear technology to India, after a gap of three decades, India was to build a specially safeguarded facility where the reprocessing of spent fuel would be carried out.

India, under the deal, gains access to U.S. technology and atomic energy it allows inspection of Indian civilian nuclear facilities by the International Atomic Energy Agency (IAEA). Military sites are excluded and this has been a sticking point with arms-control advocates who opposed deal on the grounds that there were inadequate safeguards to separate India’s military nuclear programme from its power-generation.

As part of the deal, the Bush administration had obtained for India a special waiver on nuclear trade from the 45-nation Nuclear Suppliers Group (NSG). The group ruled last September that “participating governments may transfer nuclear-related dual-use equipment, materials, software and related technology to India for peaceful purposes and for use in IAEA safeguarded civil nuclear facilities.”

However, the G8 nations, at their summit in L’Aquila, Italy earlier this month, declared a ban on the transfer of enrichment and reprocessing (ENR) technology and equipment to countries that have not signed the Nuclear Non-Proliferation Treaty (NPT). India has consistently refused to sign the NPT saying it is discriminatory.

The G8 declaration welcomed efforts to “reduce the proliferation risks associated with the spread of enrichment and reprocessing facilities, equipment and technology,” and the “progress that continues to be made by the NSG on mechanisms to strengthen controls on transfers of such enrichment and reprocessing items and technology.”

However, the declaration committed NSG member countries to implement on a “national basis” proposals that were “useful and constructive” to strengthen controls on ENR items and technology developed at a November 2008 meeting of its consultative group.

U.S. involvement in the G8 sparked fears being expressed in India that the administration of President Barack Obama was targeting India as non-signatory of the NPT. But these fears were allayed in Parliament by Finance Minister Pranab Mukherjee on Jul. 13 when he told members that because there was an “India-specific safeguards agreement with the IAEA, we are not concerned over what position the G8 takes.”

Analysts say that India’s real bargaining strengths lie in its plans to spend at least 175 billion dollars on nuclear energy production in the next 30 years and the fact that it has developed its own technologies in spite of technology sanctions on reactors, technology and fuel imposed immediately after it carried out nuclear tests in 1974.

There are other worries for the main U.S. nuclear suppliers, Westinghouse and General Electric because of their close links with Japan, a country with which India does not have a nuclear cooperation agreement. Westinghouse is owned by Japan’s Toshiba Corp., while GE has a strategic partnership with Hitachi to jointly execute nuclear energy projects worldwide

On Sunday, the Imagindia Institute, an independent think-tank, issued a statement that said: “It is our significant worry that unless Japan and India have a nuclear cooperation agreement, it may be difficult for Westinghouse and GE to participate in Indian business.”

According to the Institute’s statement, unless Toshiba and Hitachi obtain specific clearances form Tokyo “the ability of GE and Westinghouse to engage in India’s nuclear business may be severely handicapped.”

But the biggest opposition to U.S. companies may come from activists who are citing the dismal record of the Union Carbide Corp. which was responsible for the world’s worst industrial disaster when its pesticides plant in Bhopal city killed 3,800 people following a leak of cyanide gas in December 1984.

In June, a group of 27 members of U.S. Congress wrote to Dow Chemicals, which took over Union Carbide’s assets in Bhopal in 2001, to accept responsibility for meeting the medical needs of the survivors and their economic rehabilitation, besides cleaning up the soil and water of the area around the site.

“Despite repeated public requests and protests around the world, Union Carbide has refused to appear before the Bhopal District Court to face the criminal charges pending against it for the disaster,” the letter to Dow said.

“With what happened in Bhopal in view, we will oppose any move to bring in legislation to shield U.S. suppliers from liability in the event of a nuclear accident,” S.P. Udayakumar, convenor of the convenor of the National Alliance of Anti-nuclear Movements (NAAM), told IPS.

In particular, NAAM is opposed to India acceding to the Convention on Supplementary Compensation for Nuclear Damage which makes plant operators responsible for damages from any accident while shielding suppliers from liability.

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