Context: India’s nuclear liability law has hold up the plan to build 6 nuclear power reactors in Maharashtra’s Jaitapur.
- It is the world’s biggest nuclear power generation site under consideration at present.
International nuclear based-treaties
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International nuclear liability consists of multiple treaties which was strengthened after the 1986 Chernobyl nuclear accident.
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The Convention on Supplementary Compensation (CSC) establishes a minimum national compensation amount.
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It is an umbrella treaty that was adopted in 1997.
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India was a signatory to the CSC, which was ratified by 2016.
About the Civil Liability for Nuclear Damage Act (CLNDA)
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It is an international treaty that puts in place a speedy compensation mechanism for victims of a nuclear accident.
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India enacted the treaty in 2010.
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It provides for strict and no-fault liability on the operator of the nuclear plant, where it will be exclusively held liable for damage regardless of any fault on its part.
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It specifies the amount as Rs 1,500 crore which the operator will have to give in case of damage caused by an accident.
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It states that the operator has to cover liability through insurance or other financial security.
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In case the damage claims exceed Rs 1,500 crore, the government has to step in to provide the government liability amount equivalent to 300 million Special Drawing Rights (SDRs)
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It is equivalent to Indian rupee of about Rs 2,100 to Rs 2,300 crore.
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It 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?
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Avoid legal complications in establishing separate liability in each case.
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Make just one entity in the chain, that is the operator to take out insurance, instead of having many suppliers, construction contractors and so on to make their own insurance.
Only 2 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-
The operator of the nuclear plant, after paying their share of compensation for damage shall also have the right of recourse where the nuclear incident has resulted as a consequence of an act of supplier or his employee.
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It includes supply of equipment or material with patent or latent defects or sub-standard services.
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India in addition to this has also introduced the concept of supplier liability in its civil nuclear liability law.
India’s CLNDA, 2010
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It ensures that compensation is paid to the victims for nuclear damage caused by a nuclear incident or disaster
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It also lay down the who will be liable for such damages.
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The amount can be further increased through public funds, if the national amount is insufficient to compensate the damage caused by a nuclear incident.
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Public funds have to be made available by the contracting parties
Why is India’s supplier liability clause an issue in nuclear deals?
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Foreign and domestic suppliers of nuclear equipment from countries have been wary of operationalising nuclear deals with India as it is the only country with law where suppliers can be asked to pay damages.
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Section 17(b) of the CLNDA, 2010 states the supplier can be sued if defective equipment provided or if it can be established that the damage resulted from an act of intent.
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Section 46 of the CLNDA, 2010 enforces the channelling of liability to the operator to ensure prompt compensation for victims.
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Nothing would prevent criminal proceedings to be brought against the operator.
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In the absence of proper determination of the types of ‘nuclear damage’, Section 46 allows civil liability claims to be brought against the operator and suppliers through other civil laws such as the law of tort.
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As liability for operators is capped by the CLNDA, suppliers can have unlimited amounts of liability.
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This causes worry amongst the nuclear equipment suppliers.
Impacts of CLNDA, 2010
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In 2020, the EDF, nuclear power company of France, has offered the construction of Jaitapur’s 6 nuclear power reactors but the act has been bone of contention.
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An MoU was signed in 2009 between the company and government of India.
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Other nuclear projects, including the nuclear project proposed in Kovvada, Andhra Pradesh, have also been stalled.
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Despite signing civil nuclear deals with countries including the U.S., France and Japan, the only Russia’s help in establishing Kudankulam power plant has been successful.
Key facts