The agitations in Jaitapur and Kudankulam have shown that mere assurances of safety of nuclear plants are not enough for the people. After Fukushima, unless the Government creates a credible regulator, the resistance to nuclear plants is only likely to grow.

Any nuclear legislation today gets enmeshed in Manmohan Singh Government's nuclear deal with the US. As we all know, the Liability Act watered down the liability of the nuclear suppliers, which has been weakened even further by a set of Rules that the former Attorney General, Soli Sorabjee has termed as “.. ultra vires the said Act and is invalid ”. As a part of the India-US nuclear deal, the Manmohan Singh Government had given assurances to the US that it would buy 10,00 MW of nuclear plants from the US. It had also given similar assurances to the French and the Russians. For Manmohan Singh and his Government, fulfilling these assurances appear to be more important than the safety of the Indian people. That is why we see a concerted attempt to remove liability of the US and other suppliers and now a proposal for a toothless regulator.

The basic principle for regulation is that there should be regulatory independence, transparency in regulations and the regulator should have teeth to enforce the decisions taken. Unfortunately, the proposed Bill is lacking on all these counts.

There are three provisions in the Bill that makes the regulator subservient to the Government of the day. The first is that the provision of a Council of Nuclear Safety, headed by the PM, some central ministers, and the Head of the Atomic Energy Commission. This body will “oversee and review policies with respect to radiation safety and other matters connected therewith and incidental thereto”. Clearly, by this provision, the Head of Atomic Energy Commission, the body that runs all nuclear facilities has been placed above the body that is supposed to regulate it!

One of the problems with the earlier regulatory body was precisely this – the Atomic Energy Regulatory Board (AERB) was reporting to the Atomic Energy Commission. By this clause, the hierarchy of regulation – the regulator is above the body that he is regulating has been again reversed. As per this Bill, the head of the body that is being regulated will have oversight over the regulator and will also decide on its policies. If such a Council is required – and frankly I do not see its purpose – then both the Heads of the Regulatory Body and the Atomic Energy Commission should be ex officio members of the Council.

The second provision that goes against the independence of the regulator is in Clause 42 – by virtue of this clause, the Central Government has kept to itself the right to issue any directive it may deem necessary and the Authority is bound by such directions. It is important to note that this clause is not restricted to policy alone but applies to all matters and is final. Under this clause, the Central Government, for example, may direct the Authority not to look at safety aspects of Areva or Westinghouse reactors and the Authority is bound by this directive.

We are all aware that the Liability Act and the Rules were drafted in consultations with the US authorities and suppliers. It is this that fuels the suspicion that such provisions may be there to remove from the regulator's jurisdiction for actions that the Manmohan Singh has already committed in its deals with the US.

The Central Government can also dissolve the regulatory body whenever it wants. Clause 48 (d) gives it the right to supersede the authority at any time for a period of up to 6 months. Again such rights appear to be unfettered and would seriously impair the independence of the regulator.

Apart from these aspects, the other part where the Bill has serious problems is with respect to a provision it calls “Other Regulatory Bodies”. While what the regulator will do and what it will make public has been clearly spelt out for the main regulatory body, nothing has been specified for these “other Regulatory Bodies” It is clear that from other provisions in the Bill, that defence installations will not come under the proposed regulator and “Other Regulatory Bodies” is meant to cover such facilities. The problem here is that some of these facilities are identical to civilian nuclear facilities – a nuclear reactor that is kept outside the civilian sector may be identical to a reactor that for instance produces fissile material for the nuclear weapons program. What will be the safety standards for such a reactor – will it be different from that of this identical civilian reactor? Are the people of these area to be kept in the dark and will the authorities running these facilities have no responsibility to inform the people in case of accidents?

While one can accept that the demand for transparency in defence related installations are different from that of civilian facilities, the standards for safety and reporting after an accident involving release of nuclear materials to the atmosphere cannot be different. In fact the Liability Act makes clear that all its provisions apply also to defence facilities, with the exception of nuclear submarines. However, by this provision, the Government is putting safety of such nuclear installations beyond any serious safety scrutiny.

The other measures that are weak in the Bill relate to what the Authority is supposed to do before passing an order. It should be clear today – after Jaitapur and Kudankulam – that people need to be involved in the decisions relating to nuclear plants. Public hearings are not just for some tamasha but an important mechanism of allaying peoples doubts on the safety of nuclear plants. Therefore, the Bill should spell out that before any order of the regulatory authority, there should be mandatory public hearings.

The other serious problem is with the Appellate Authority that the Bill seeks to create. Regulating safety of the nuclear facilities is a technical issue requiring highest technical competence. The Bill has spelt out in details the need for knowledge of nuclear safety and its various aspects for the members of the regulatory body. While the chairperson and the member of the regulatory body would have the necessary competence, the chairperson and members of the appellate body would have no such competence. Why there is a need for such an appellate body is not clear, when the Bill does not even propose to have a permanent appellate body. It is to be created as and when it is required. If we recognise that this body is only required in exceptional circumstances, what is the need for such a body at all? Why cant the courts address such disputes? In any case, if there is a dispute r between the regulator and the authorities running nuclear plants egarding what constitutes safety of a nuclear installation, should this be indeed be subject to a quasi judicial procedure with an appellate body who does not have the necessary competence?

If such an Appellate body is indeed required, then it certainly should have its powers and terms defined properly and not as an afterthought as it appears to be in the Bill.

The central problem with the Regulatory Bill as drawn up by the Government that it does not seem to understand that Safety is not just another regulatory subject – such as electricity or telecom tariffs. An accident can kill thousands of people and create enormous damages. The Fukushima accident has created damages worth more than $50 billion already and the bill is still growing. In such an area, the regulator has to be have much more powers than a tariff regulator and be seen to be far more independent than he is currently or is proposed in the Bill. Without such a regulator, an ambitious nuclear energy program will not be credible to the people. If we are asking the people of an area to bear the risk of a nuclear plant close to where they live, it is necessary that we give them guarantees that we are making all efforts that we can in ensuring its safety. It is the attempt to manipulate public opinion, disregard the will of the people and even that of the Parliament that that is damaging the prospects of nuclear energy in the country. The Government and the atomic energy establishment can either have an expanded nuclear program in which they take the people along or they can continue on their current course of extreme secrecy and lack of accountability. Unfortunately, the current Bill show that neither the Manmohan Singh Government nor the nuclear establishment is willing to learn from recent events. That is the real tragedy.

D. Raghunandan
9th January 2012

Records, they say, are meant to be beaten. Those who had characterized India’s acquisition of 126 combat aircraft for around $10 billion, billed as the largest ever single military purchase, as the “mother of all arms deals” will have to change terminology. Last week, the US announced it had clinched a deal with Saudi Arabia for sale of F-15 fighters and upgradation of the current Saudi F-15 fleet for a combined value of about $30 billion. Clearly the grandmother of all deals!

Almost simultaneously, the US also announced the first-ever overseas sale of its THAAD (Terminal formerly Theatre High Altitude Area Defence) ballistic missile defence system to the UAE. The $3.5 billion value is dwarfed by the Saudi deal but is no less weighty given the advanced technology involved and the strategic significance of the US-UAE arrangement.

Media commentary, primed by US Defence Department and Pentagon briefings and dominated by Western press agency releases, carried an almost uniform narrative. These deals were aimed squarely at sending a strong message to Iran, the timing being especially apt against the background of Iranian naval and missile exercises in the Persian Gulf and supposed threats to close the Straits of Hormuz, and at equipping other states in the littoral who were increasingly anxious about growing Iranian missile and nascent nuclear capability. A deeper analysis would, however, show that while this story line has been spun to resonate with contemporary issues, the real picture is a more complex one of a long-standing US security calculus unfolding in the context of recent developments, not only in the Persian Gulf and wider West Asia region but also domestically in the US. The US press statements have also pointedly underlined the commercial value of the deals and the boost they would give to US manufacturing industry and employment, a resonance avidly promoted by a beleaguered Obama administration 

The F-15SAs come bristling with advanced weaponry. For aerial combat, the aircraft will have AIM 9X Sidewinder short-range heat-seeking air-to-air missiles and AIM 120 C7 “AMRAAM” (advanced medium range air to air missile) “fire-and-forget” missiles deigned to target beyond-visual-range targets. For ground attack, the F-15SAs will carry 500 pound laser-guided munitions, 2000 pound Paveway III laser-guided bombs, wind-corrected munitions dispensers, AGM-88B high-speed anti-radiation missiles to detect and strike ground-based radars and transmitters such as on anti-aircraft or missile batteries, as well as well as AGM-84 Harpoon anti-ship missiles. Apart from the AESA radars, the F-15SAs would be equipped with LANTIRN (Low Altitude Navigation and Targeting Infrared for Night) combined navigation and targeting pods enabling low-altitude, night-flight ground attack with precision-guided weapons, and with Sniper Advanced Targeting Pods for the precision-guided weapons.

With this acquisition, Saudi Arabia will have arguably the most advanced and well-equipped air force in the region other than Israel. The RSAF already operates the third largest fleet of F-15s after the US and Japan. Apart from the Tornados of the British-led consortium inducted in the mid-eighties, the Saudis in an obvious effort to diversify from over-dependence on the US and also spread its petro-dollars around other Western suppliers, had acquired 72 Eurofighters a few years ago, a deal which earned a great deal of notoriety for the kickbacks and slush money involved, and which had also embroiled the then British Prime Minister Tony Blair.

Strategic imperatives For the past few years, there had been speculation about whether the Saudis, known to be in the market, would once again buy European rather than US combat aircraft, either as a deliberate choice or as a result of a growing unease in Washington with the Saudi regime. The US had been unhappy with what it perceived as inadequate Saudi efforts to tackle jihadist radicalism both within its country and in other countries receiving generous support from Saudi patrons. On its part, the Saudis were upset with increasingly vocal US criticism of conservative regimes in West Asia and shrill support for democracy movements. Then US Secretary of State Condoleezza Rice had famously remarked in 2005 that the US had for over 50 years favoured stability over democracy in the region, and had achieved neither. Saudi Arabia was particularly disturbed by the US abandonment of its faithful ally of over three decades, Hosni Mubarak of Egypt.

However, several developments seem to have prompted somewhat of a reversal of this trend. The winding down of the US military presence in Iraq and the perceived strengthening of forces in the region that Saudi Arabia considered inimical to its interests, such as in Lebanon and Syria with support from Iran, caused anxiety in Saudi ruling circles. The “Arab spring” uprisings in several North African and West Asian countries were also viewed with considerable dismay by Saudi Arabia which supported a vicious crack-down by US ally Bahrain which was watched with studied silence by the US. And there was always the Saudi disquiet with Iranian efforts at spreading its regional influence and acquiring greater military and strategic clout through missile and nuclear technology. All these factors including equally impelled the US into once again warming up its strategic relations with Saudi Arabia and with other allies in the region. The economic woes of the US and its dire need to bolster its economy especially with elections approaching only added to the impetus.

When Saudi Arabia had requested a new set of military hardware from the US Defence Security Cooperation Agency (DSCA) in December 2010, there was considerable doubt if the deals would go through and many questions were raised in Congress. But go through it did, and in a big way.

The F-15 deal is part of a much larger shopping list worth around $60 billion. Saudi Arabia is looking to buy Apache attack helicopters, other helicopters, a major upgrade of its Patriot anti-missile system, armoured vehicles and so on.

US security presence enhanced The US has also ramped up its arms sales to other countries in the region. An Iraqi deal worth around $4 billion to buy F-16s, aerial defence systems and other hardware is in the pipeline, as is a deal to sell additional F-16s to Egypt.

Another major recent deal has been the sale of anti-missile systems to the UAE. The UAE deal follows a $1.7 billion contract earlier in the year to upgrade Saudi Arabia's Patriot anti-missile system, and the sale of over 200 advanced Patriot missiles to Kuwait for around $1 billion.

The UAE sale is however strategically more significant. It is the first export sale of the THAAD anti-missile batteries system and underlines the importance Washington attaches to this Gulf ally and to US security interests in the region. The THAAD system enables interception of medium-range missiles towards the latter part of their trajectory wither inside or outside the atmosphere, and therefore have a far greater defensive potential than the Patriot type systems which seek to counter shorter-range missiles. West Asia is one of the regions where the US has been able to place its land-based anti-missile systems, whereas Japan and South Korea have acquired more advanced ship-based systems and the US has faced problems in Europe due to unease in those countries with hosting missiles and inviting Russian ire. Whereas the systems sold to the UAE are independent land-based systems, they are also compatible with and will be fully supported by the US Aegis ship-based anti-missile systems now permanently stationed in the Persian Gulf. The UAE deal is thus more than a sale: it physically ties up regional security installations with the US security infrastructure and provides greater strategic reach to US forces in the Gulf. For all the specifics of the current situation vis-à-vis Iran, these recent US arms deals are thus solid pointers to the US security presence seeking greater depth and more permanence in the wider West Asia region.

Amit Sengupta

4th January 2012

The Government has recently made public the “Draft National Pricing Pharmaceutical Policy, 2011” The circulation of the draft policy, supposedly to make medicines more affordable, comes in a situation where studies show that out-of-pocket medical costs push over 2% of the population below the poverty line in one year. A major part of expenditure on health in India, that people have to meet from their own resources, goes towards buying medicines. This is so because the government spends too little on health care and medicine prices are too high. Unlike in countries with well developed public health systems, where a major proportion of medicines consumed is provided by the public health system, in India around 85% of medicines consumed are bought by patients from chemists shops.

Table: Change in Drug Price Control

*Even less now as many of the 74 drugs are now obsolete and just over 30 of the drugs in the price control list have any public health relevance

Thus, over time, the prices of an overwhelming majority of medicines in the market have been decontrolled. While the Government has continued to reason that such decontrol is necessary for the health of the industry, it has had a serious and continuous impact on drug prices – which have grown exponentially over time (see Chart below).

Drug prices have risen in the past decades because of price decontrol and through manipulation of the market by pharmaceutical companies. That the market for medicines is rigged by drug companies is clear from the fact that top-selling brands of medicines are often the most expensive or one of the most expensive. This is clearly not a free market situation where competition helps stabilize prices, but a situation where large companies maintain high prices by bribing doctors and chemists to promote their more expensive medicines even though the same drug is available at 1/5^th or 1/10^th of the price charged by many top selling brands.

In 2002 a new drug policy was announced, that if implemented, would have further slashed the number of drugs under price control from the 74 in the 1994 policy. However a PIL challenged the policy in the Karnataka High Court on the grounds that it did not effectively control drug prices. The Karnataka High Court issued a stay on the implementation of this Policy. This order was challenged by the Government in the Supreme Court. The All India Drug Action Network joined this PIL in the Supreme Court which vacated the stay vide its order but observed: