NUCLEAR LIABILITY LAW IN INDIA

1. Context

The issues regarding India’s nuclear liability law continue to hold up more than a decade old plan to build six nuclear power reactors in Maharashtra’s Jaitapur, the world’s biggest nuclear power generation site under consideration at present.

2. What is the law governing nuclear liability in India?

Laws on civil nuclear liability ensure that compensation is available to the victims for nuclear damage caused by a nuclear incident or disaster and set out who will be liable for those damages.
The international nuclear liability regime consists of multiple treaties and was strengthened after the 1986 Chornobyl nuclear accident.
The umbrella Convention on Supplementary Compensation (CSC) was adopted in 1997 to establish a minimum national compensation amount.
The amount can further be increased through public funds, (to be made available by the contracting parties), should the national amount be insufficient to compensate for the damage caused by a nuclear incident.
Even though India was a signatory to the CSC, Parliament ratified the convention only in 2016. To keep in line with the international convention, India enacted the Civil Liability for Nuclear Damage Act (CLNDA) in 2010, to put in place a speedy compensation mechanism for victims of a nuclear accident.

3. Convention on Supplementary Compensation (CSC)

The Convention on Supplementary Compensation (CSC) has the objective to raise the amount of compensation through public funds to be made available by the Contracting Parties if the national amount is insufficient to pay the expenditures related to a nuclear disaster.
Using an online calculator that implements the formula in Article IV of the CSC, users can determine the amounts that would need to be paid to the international fund in a variety of situations involving current and potential Contracting Parties to the CSC.
Both the Paris Convention on Third Party Liability in the Field of Nuclear Energy and the Vienna Convention on Civil Liability for Nuclear Damage has an annex outlining standard civil liability norms that additional States may ratify provided that their domestic legal systems do (including any amendments to either).

4. Civil Liability for Nuclear Damage Act (CLNDA)

On November 21, 2010, the Civil Liability for Nuclear Damage Act of 2010 was approved.
The Act establishes legal liability for nuclear harm as well as rapid compensation for victims of nuclear disasters.
The law specifies the experts who will assess claims of nuclear injury, sanction compensation, and provide financial assurance. Except for the central government, all operators must have insurance or financial security in place before they can perform their obligations.
The operator’s liability is limited by law to 500 crore rupees. As per Section 6(1) of the CLND Act, each nuclear incident’s maximum liability shall not exceed the rupee equivalent of 300,000,000 SDRs (SDRs).
At the current currency rate, which values 1 SDR at roughly Rs 87, 300 million SDRs are equivalent to approximately Rs 2610 crores.
The operator’s maximum liability under Section 6(2) of the Act is Rs. 1500 crore. The Central Government will pay this deficiency of Rs. 1110 crores in accordance with Section 7(1)(a) of the CLND Act if the total liability exceeds Rs. 1500 crores.
India would be able to accept international finance under the CSC for sums bigger than Rs 2610 crores if it becomes a party to the Convention. Section 7 (2) of the CLND Act provides that the Central Government may establish a “Nuclear Liability Fund” by charging such amount of levy from the operators, in such manner, as may be prescribed.
The constitution of a Nuclear Liability Fund has been under consideration for some time. Such a Fund is proposed to be built up over 10 years by levying a small charge on the operators based on the power generated from existing and new nuclear plants.
This is not expected to affect the consumer’s interests. The act outlines who may file a claim for compensation as well as the organizations responsible for calculating and disbursing compensation for nuclear harm. Any violations of the terms of the act could result in fines.

5. Why is the supplier liability clause an issue in nuclear deals?

Foreign suppliers of nuclear equipment from countries as well as domestic suppliers have been wary of operationalizing nuclear deals with India as it has the only law where suppliers can be asked to pay damages.
Concerns about potentially getting exposed to unlimited liability under the CLNDA and ambiguity over how much insurance to set aside in case of damage claims have been sticking points for suppliers.
Suppliers have taken issue with two specific provisions in the law, Section 17(b) and Section 46. The latter clause goes against the Act’s central purpose of serving as a special mechanism enforcing the channeling of liability to the operator to ensure prompt compensation for victims.
Section 46 provides that nothing would prevent proceedings other than those which can be brought under the Act, to be brought against the operator. This is not uncommon, as it allows criminal liability to be pursued where applicable.
However, in the absence of a comprehensive definition of the types of ‘nuclear damage’ being notified by the Central Government, Section 46 potentially allows civil liability claims to be brought against the operator and suppliers through other civil laws such as the law of tort.
While liability for operators is capped by the CLNDA, this exposes suppliers to unlimited amounts of liability.

6. What are the existing Projects in India?

The Jaitapur nuclear project has been stuck for more than a decade the original MoU was signed in 2009 with EDF’s predecessor Areva.
In 2016, EDF and NPCIL signed a revised MoU, and in 2018, both heads signed an agreement on the “industrial way forward” in the presence of Indian Prime Minister Narendra Modi and French President Emmanuel Macron.
In 2020, the EDF submitted its techno-commercial offer for the construction of six nuclear power reactors. However, an EDF official said that the issue arising from India’s nuclear liability law remains an item on the “agenda for both countries”.
Multiple rounds of talks have not yet led to a convergence on the issue. Other nuclear projects, including the nuclear project proposed in Kovvada, Andhra Pradesh, have also been stalled.
Despite signing civil nuclear deals with several countries, including the U.S., France and Japan, the only foreign presence in India is that of Russia in Kudankulam which predates the nuclear liability law.

For Prelims: Convention on Supplementary Compensation (CSC), Civil Liability for Nuclear Damage Act (CLNDA), Paris Convention, Vienna Convention on Civil Liability for Nuclear Damage, Nuclear Liability Fund.

For Mains: 1. What is the Convention on Supplementary Compensation (CSC)? Discuss Why is the supplier liability clause an issue in nuclear deals? (250 Words)

Source: The Hindu

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