Monday, June 14, 2010

Family Ties! Similarities between the IPL and India's Nuclear Establishment

Though patricide, fratricide and familial coups were a common occurrence amongst the various dynasties the world over, it has done nothing to deter business and politicians from using family to maintain power. Dynasties be it business or political have played important roles across continents, the Rothschild’s financed the Napoleonic wars, the Kennedy’s ruled America, the Tata’s, one of India’s first business houses, have ventures across the world and the Gandhi’s are touted to be the first-family of Indian politics.

There is good reason why kin are sought as business and political partners – it keeps the money and power in the clan. There is another reason for getting family into business and politics it allows newer members to milk the goodwill of the brand while also perpetuating it.

It is for this reason that the Indian National Congress christens most development projects after their past leaders – Jawaharlal Nehru, Indira Gandhi and Rajiv Gandhi. This is a leitmotif reminding people of the antecedents of the party. This constant reminder of lineage gives budding leaders like Rahul Gandhi a platform from which to speak from.

Besides encashing on the brand, building on it and ensuring stability, family in politics helps in pushing agendas without much party disapproval. Family in politics also provides stability within the party as it reduces the possibility of infighting for top-jobs. In other words it maintains status –quo, keeping other hands out of the honey pot.

Even outside the party the family plays an important part in a politician’s life. Politicians use their wife, children and other family members as fronts to horde money. So it comes as no surprise to see a non earning wife with a bank balance as large as that of the husband when the politician makes his accounts public before elections.

Much like politics, business too makes use of family, for three major reasons one is to ensure that money remains within the family, the other is to keep power in the family and the third is to reward family. However unlike politics, business uses another set of people – close friends. Doing business with friends allows leeway that may not be there with others, it reduces the cost of risk, and it is a form of investment - collecting brownie points that can be exchanged at a later date. Friends are a special breed of venture capitalists who instead of only looking at future monetary gain look at such investments as future leverage or a form of ‘repayment’ for past favours or even as a cross that needs to be borne for being friends.

Thus, it is no surprise that Lalit Modi filled the Indian Premier League (IPL) and its ancillaries with friends and family. For one, being a new venture, people willing to take a financial risk and put money into his idea were needed, family and friends met the requirements. Also by getting family into the IPL, money did not change ownership nor was making deals difficult. Finally, filling the IPL with family and friends gave Lalit a free hand over the functioning of the IPL.

It was not only Lalit who used family and friends, it is alleged that a member of the Board for Control of Cricket in India (BCCI), under whose wings the IPL grew, used his authority to change the rules of the BCCI to allow him to purchase an IPL team.

This kind of leverage that the use of family bestows in business and politics is mirrored in government bodies - the Indian nuclear establishment for example.

The Department of Atomic Energy (DAE) was setup on August 3 1954 under the direct charge of the Prime Minister. In 1958 the Atomic Energy Commission (AEC) was established in the DAE. The resolution creating the AEC acknowledges giant strides made in the peaceful use of the atom since the creation of the DAE in 1954 and thus finds need for the creation of an organisation ‘with full authority to plan and implement the various measures on sound technical and economic principles and free from all non-essential restrictions or needlessly in-elastic rules. - - -’ The Secretary to the Government of India in the DAE is ex-officio Chairman of the Commission. Other Members of the AEC are appointed for each calendar year on the recommendation of the Chairman of the AEC and after approval by the Prime Minster. The functions of the AEC include formulating the policy of the DAE, preparing the budget of the DAE, implementing policies of government on Atomic energy

There are a number of organisations under the AEC; the Nuclear Power Corporation, Heavy Water Board for example; R & D institutions like Babha Atomic Research Centre (BARC) also come under AEC. The Atomic and Energy Regulatory Authority (AERB) is another institution under the AEC. It was constituted on November 15, 1983 by the President of India through the powers conferred by the Atomic Energy Act to carry out regulatory and safety functions under the Act.

As per the AERB Constitution Order DECEMBER 31,1983/PAUSA 10,1905[PART II-SEC.3(II) AERB ‘[AERB]shall have powers to lay down safety standard and frame rules and regulations in regard to the regulatory and safety requirements envisaged under the Atomic Energy Act,1962’ The Order lists out the functions of the Board which include developing safety codes, guidelines for site selection, design, construction, commissioning, operation and decommissioning of the different types of plants; ensuring compliance of regulations by DAE and Non-DAE bodies, reviewing from safety angle requests for authorising/commissioning/operation of DAE projects. These standards ensure the health and safety of the workers and the public.

So what we have here is a body that is supposed to ensure that all organisations working on different aspects of nuclear science and energy meet certain standards. To do so there is need for the AERB to be independent and immune to pressures. Instead the AERB, like the organisations that it is supposed to regulate, falls under the AEC, the patriarch. Thus we have a case where the AERB tattles on its siblings to the father which is the AEC.

This is made clear in Subsection (xvi) of Section 2 of the Order. It states that the AERB will ‘Send reports periodically to Chairman, AEC on safety status including observance of safety regulations and standards and implementation of the recommendations in all DAE and non-DAE units. It will also submit an Annual Report of its activities to Chairman, AEC.’

It is not enough that the regulator and regulated fall under the AEC; the last paragraph of Section 2 of the Order makes the relationship even stronger. The DAE Science Research Council (DAE SRC) along with the Directorate of Radiation Protection at BARC will assist the AERB to enforce the Atomic Energy Act, 1962 for radiation safety in the country and under the Factories Act, 1948 for industrial safety in the units under the control of DAE. They will review health and safety aspects of modifications in design/ operation involving changes in the technical specification adopted in any of the DAE units, review from the safety angle requests for authorising/ commissioning/ operation of DAE Projects/plants and ensure compliance by DAE and non-DAE installations of safety codes and standards during construction commissioning stages.

DAE working with the AERB to check on safety and other aspects of its own units is incongruous. How different is this from the lie of self-regulation? Or is this a more refined version of setting a thief to catch a thief? Or has the nuclear establishment created a self serving mechanism that allows it to perpetuate unhindered. This is quite similar to the ‘Governing Body’ setup by the BCCI whose members were from BCCI and were also part of the IPL working either as commentators or brand ambassadors. The fact that the wheelings and dealings of the IPL was carried out under the nose of the BCCI created Governing Council indicates the kind and level of latitude given within the family.

The ‘self serving mechanism’ of the nuclear industry in India is built on a close knit family. Like in business and politics, the consanguineous of the nuclear establishment ensures that operations continue unrestricted no matter what. The AEC through the family it has created is fulfilling its mandate to free the nuclear establishment from ‘all non-essential restrictions or needlessly in-elastic rules - - -‘ an objective of any other business and political party using similar means.

The charges against BCCI, IPL and Lalit Modi are no different from the charges made against the nuclear establishment. The lack of oversight, transparency and accountability, financial opaqueness are hallmarks of any establishment that uses family.

The human tendency to overlook misdeeds because of family considerations has been morphed into a business, political and a regulatory tool. But the BCCI IPL saga shows that the weight of family is insufficient to keep the lid on a can of worms, a lesson that the AEC should take to heart.