Sort out the impasse created by Indian Civil Liability for Nuclear Damage Act to accelerate nuclear energy production

Kudankulam Atomic power plant Associated Press Pic

Kudankulam Atomic power plant Associated Press Pic

Sydney, 3rd October, 2014

India wanted and projected the goals to have 20,000 MWe from nuclear energy by 2020 and 60,000 MWe by 2030. With the impasse created due to Civil Liability For Nuclear Damage Act 2010, the target for 2020 has been scaled down to about 11080 MWe. Indigenously produced Pressurised Heavy Water Reactors (PHWRs) can not produce electricity in sufficient amounts when compared to what can be done with imported Light Water Reactors (LWRs). No wonder that India is producing only 5780 MWe from Nuclear energy currently.

With Indo-US Nuclear Cooperation Agreement in 2008, and waiver from the Nuclear Suppliers’ Group (NSG), India was able to get rid of two decades-old embargo on nuclear trade, which was imposed on it after 1998 nuclear tests. India was expected to sign and ratify Convention on Supplementary Compensation (CSC) and enact a Civil nuclear liability Act, which was commensurate with CSC, to facilitate importation of Nuclear plants/reactors and components. India signed CSC in 2010, just a few months before the Nuclear Liability Act was passed, but has not ratified it as yet.

Nuclear Civil Liability Act (Civil Liability For Nuclear Damage Act) was passed in Indian Parliament in 2010.  The Act has now become a major stumbling block for the suppliers of Nuclear energy plants and components, irrespective of where they are from. As a result, no supplier-domestic or international- is willing to supply such plants to India.

India has deals with many countries for the importation of Uranium, but no deal with suppliers of Plants or components to use that Uranium.

Its result is that Nuclear energy production has not had the projected growth. This is affecting Indian economic growth.

This needs to change.

All the Conventions-Vienna, Brussels and Paris, and CSC have one common stipulation, and that is about absolute exclusion of any liability of suppliers for any nuclear accident. Liability lies exclusively with the Operator of Nuclear Plants, and the Operator does not have a recourse to sue the Supplier. Indian Nuclear Liability Act  has given this recourse to the Operators to sue the Suppliers for the liability if there was any latent or patent defect in the Plant and/or substandard service. On the surface, this does not look unusual but this provision clearly violates CSC provisions.

If India ratifies CSC, which it had promised many years ago, right to recourse provision will become null and void. USA does not accept validity of any provision of any Liability law if it violates CSC provisions. If India gives this exemption to USA suppliers like Westinghouse Electric or GE Electric, then it will have to do the same to French and Russian suppliers.

Section 17 b and Section 46 of Civil Liability For Nuclear Damage Act 2010, which give right to recourse for the Operators to sue the Suppliers and also the right to victims to  use provision of Indian Tort law, are in breach of CSC provisions. Not only the operators can use right to recourse and sue Suppliers for the loss, victims can also sue suppliers under provisions of section 46.

Indian Liability to the operator is capped at $1500 Crore ($250 million), which is a relatively small amount to compensate damage from a nuclear accident. Many other countries have much bigger, or even unlimited, amount as the cap for such damage liability.

There is no doubt that new Govt in New Delhi needs to tackle this impasse quickly and reach a mutually acceptable formula. This could be via an amendment to bring Indian Liability Act in line with CSC or via some other mechanism like well-defined insurance package to the suppliers from some insurance companies.

India needs pragmatism to remove the impasse to have sufficient nuclear energy. Previous Indian Govt led by Dr Manmohan Singh had to accept amendments in the original draft of the Civil Liability For Nuclear Damage Act 2010 Bill, simply because it did not have sufficient goodwill or strength to overcome the opposition in the Parliament, but current Govt led by Mr Narendra Modi should be able to tackle this matter because it is not compromised with coalition compulsions.

India needs energy, which can be produced easily, speedily, and does not cause harmful effects to the environment. To do so, it needs nuclear reactors from USA, France and Russia. They do not want to sell these reactors/plants until Suppliers’ liability issues from Section 17 b of Civil Liability For Nuclear Damage Act 2010 is sorted out amicably.

Dr Yadu Singh


One thought on “Sort out the impasse created by Indian Civil Liability for Nuclear Damage Act to accelerate nuclear energy production

  1. Pingback: India should clear all hurdles for N-power generation | The Indian Sub-continent Times

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