Published on: April 30, 2023

The nuclear liability law

The nuclear liability law

Why in news? 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.

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 Chernobyl nuclear accident. The umbrella Convention on Supplementary Compensation (CSC) was adopted in 1997 with the aim of establishing a minimum national compensation amount. The amount can further be increased through public funds, (to be made available by the contracting parties)
  • 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.

Features of Civil Liability for Nuclear Damage Act (CLNDA)

  • 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.

What does the CLNDA say on supplier liability?

  • The international legal framework on civil nuclear liability, including the annex of the CSC is based on the central principle of exclusive liability of the operator of a nuclear installation and no other person.
  • Section 10 of the annex of the CSC lays down “only” two conditions under which the national law of a country may provide the operator with the “right of recourse”, where they can extract liability from the supplier — one, if it is expressly agreed upon in the contract or two, if the nuclear incident “results from an act or omission done with intent to cause damage”.
  • However, India, going beyond these two conditions, for the first time introduced the concept of supplier liability over and above that of the operator’s in its civil nuclear liability law, the CLNDA.
  • So, apart from the contractual right of recourse or when “intent to cause damage” is established, the CLNDA has a Section 17(b) which states that the operator of the nuclear plant, after paying their share of compensation for damage in accordance with the Act, shall have the right of recourse where the “nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services”.

Nuclear 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

What are 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.
  • 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. Section 17(b), the provision “permits” but “does not require” an operator to include in the contract or exercise the right to recourse.
  • However, legal experts have pointed out that a plain reading of Section 17 of the CLNDA suggests that Section 17(a), (b) and (c) are distinctive and separate, meaning even if the right to recourse against the supplier is not mentioned in the contract [as provided by Section 17 (a)], the other two clauses stand. This effectively means that the supplier can be sued if defective equipment provided or if it can be established that the damage resulted from an act of intent.