All dressed up and nowhere to go

M P Ram Mohan*

Appeared in the Financial Express 26 Dec 2011.

In September 2011, facilitated by the Carnegie Endowment for International Peace (CEIP), leading civilian nuclear power plant vendors announced a common set of principles for the export of nuclear power equipment. These principles were adopted to reflect the global best practices in safety, security, environmental protection, spent fuel management, compensation in the unlikely event of nuclear-related damage, non-proliferation and ethics.

The outcome preceded three years of consultation and negotiations that started in 2008. The Fukushima experience has been incorporated in the final set of ‘Principles of Conduct’.

CEIP’s exercise has been unprecedented, considering the nature of the industry. All major exporters of nuclear equipment are part of these voluntary Principles. The Principles have been adopted by nine companies based in Canada, France, Japan, Russia, South Korea and the United States—all have major stakes in world exports and in India in particular. The Principles, being a voluntary initiative or a soft law, are not legally binding. Nonetheless, each company has undertaken to implement the Principles in its business activities.

For the nuclear industry, such an exercise is made relatively easier, considering that international nuclear commerce is highly restricted and regulated. Of course, there have been a few diversions, but guidelines of the Nuclear Suppliers Group (grouping of 44 nuclear exporting countries), Nuclear Non-proliferation Treaty (NPT) provisions, IAEA safeguards agreements and a host of international conventions and national laws have dealt with issues relating to transfer, safety, liability and regulatory environment. However, the business willingness to volunteer for this is an important step considering the kind of pressure the exporting governments and companies have to encounter in host countries once they start doing business.

What does this mean to countries like India? No Indian company was part of the framing process or signatory to the final Principles. The thrust of this exercise is ‘nuclear exports’. CEIP further clarified that “once countries like India are ready to export; their companies will be invited to sign on to the established norms”. Currently what may be worrying for India is that, this may form another strategic and restrictive trading group where exports are seen as acceptable only for signatories.

The department of atomic energy has been very clear about India’s export capability. In 2008, Anil Kakodkar, former chairman of the Atomic Energy Commission, spoke of India’s preparedness to export commercially viable civilian nuclear reactors to other developing nations. He said: “NCPIL is capable of designing, fabricating and erecting commercially viable nuclear reactors” and could share its expertise with others if it was allowed. But India is not yet a member of NSG and cannot operate and export in the same way as NSG members do.

The writer is a fellow at TERI. He Chairs the Nuclear Law Association