Nuclear liability law

Subject : International Relations

Section: International Conventions

Concept :

The issues regarding India’s nuclear liability law continue to hold up the 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.

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 Chernobyl nuclear accident.
The umbrella Convention on Supplementary Compensation (CSC) was adopted in 1997 with the aim of establishing a minimum national compensation amount.
India is signatory to the CSC.

The Civil Liability for Nuclear Damage Act:

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.
The CLNDA provides for strict and no-fault liability on the operator of the nuclear plant, where it will be held liable for damage regardless of any fault on its part.
It also specifies the amount the operator will have to shell out in case of damage caused by an accident at ₹1,500 crore and requires the operator to cover liability through insurance or other financial security.
In case the damage claims exceed ₹1,500 crore, the CLNDA expects the government to step in and has limited the government liability amount to the rupee equivalent of 300 million Special Drawing Rights (SDRs) or about ₹2,100 to ₹2,300 crore.
The Act also specifies the limitations on the amount and time when action for compensation can be brought against the operator.

Reactors in India:

India currently has 22 nuclear reactors with over a dozen more projects planned.
All the existing reactors are operated by the state-owned Nuclear Power Corporation of India Limited (NPCIL).

Supplier liability clause as an issue in nuclear deals

Foreign suppliers of nuclear equipment from countries as well as domestic suppliers have been wary of operationalising 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.
While liability for operators is capped by the CLNDA, this exposes suppliers to unlimited amounts of liability.

Existing projects in India

The Jaitapur nuclear project has been stuck for more than a decade.
Other nuclear projects, including the nuclear project proposed in Kovvada, Andhra Pradesh, have also been stalled.
Despite signing civil nuclear deals with a number of 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.

What is the government’s stand?

The central government has maintained that the Indian law is in consonance with the CSC.
The provision “permits” but “does not require” an operator to include in the contract or exercise the right to recourse.