Editorial

Introduction

The construction of six nuclear power reactors in Maharashtra's Jaitapur, which will be largest potential nuclear power generation site globally, remains stalled due to ongoing challenges associated with India's nuclear liability law. This issue has persisted for over a decade and continues to hinder progress on the project.

Background

• The Jaitapur nuclear project is stuck for more than a decade as the original MoU was signed in 2009 with the present company Electricite de France’s (EDF) predecessor Areva.
  • The project aims to develop 6 nuclear power reactors in Maharashtra’s Jaitpur of 9900 MW capacity.
• In 2016, EDF and NPCIL (Nuclear Power Corporation of India Limited) signed a revised MoU.
• Thereafter in 2018 an agreement on the Industrial Way Forward in the presence of Indian Prime Minister Narendra Modi and French President Emmanuel Macron was signed.
• Despite of submission of a techno commercial offer in 2020 for the construction of six nuclear power by EDF, the issue that still persists is India’s nuclear liability law for which the deal remains pending.
• The question for consideration is CLNDA’s (Civil Liability for Nuclear Damage Act, 2010) stand on the supplier liability.

Laws Governing Nuclear Liability in India

• There was an International Nuclear Liability Regime in place that was strengthened after the 1986 Chernobyl Disaster.
• There is also an umbrella Convention on Supplementary Compensation (CSC) adopted in 1997 to settle upon a minimum national compensation amount.
  • India is a party to the CSC, an international treaty that supplements the national nuclear liability laws since 2016.
  • The CSC provides a framework for the cross-border settlement of nuclear damage claims, making it easier for victims to receive compensation in the event of a nuclear incident involving multiple countries.
• India enacted the Civil Liability for Nuclear Damage Act (CLNDA) in 2010, to bring a speedy compensation mechanism for victims of a nuclear accidents. It provides for:
  • The legislation establishes the liability regime for nuclear damage in India.
  • It provides for both operator liability and supplier liability in case of a nuclear incident.
  • Operator liability caps are specified in the act and the operator of a nuclear installation is liable to pay compensation for nuclear damage up to the prescribed limit.
  • Supplier liability is addressed over and above that of the operator in CLNDA i.e. operator of the nuclear plant can seek recourse from suppliers in the event of a nuclear incident caused by supplier actions.

Point of Discussion

• The Bone of contention lies on the point of Legal provision relating to Supplier’s Liability provided by CLNDA.
• The Legal Framework on Civil Nuclear Liability is based on the central principle of exclusive liability of the Operator of a nuclear installation.
  • Section 10 of the annexure 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 as:
    • If it is expressly agreed upon in the contract or;
    • If the nuclear incident results from an act or omission done with intent to cause damage.
• 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, after recognizing that defects in the law were partly responsible for The Bhopal Gas Tragedy in 1984.
• Since the Law’s enforcement, 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.
• The concern of potential exposure to unlimited liability and ambiguity over the amount of insurance in case of damage is keeping the suppliers away from dealing in nuclear set ups with India.
• The suppliers were primarily facing difficulty with regard to Sections 17(b) & S 46 of CLNDA.
  • Section 17: Operator's Right of Recourse: The operator of the nuclear installation, after paying the compensation for nuclear damage in accordance with section 6, shall have a right of recourse where–
    • (a) such right is expressly provided for in a contract in writing;
    • (b) 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;
    • (c) the nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage.
  • Section 46 - Act to be in Addition to Any Other Law : The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator from any proceeding which might, apart from this Act, be instituted against such operator.

Way Forward

• Provisions for extraterritorial jurisdiction must be incorporated to access foreign courts when seeking compensation from foreign suppliers. Also there must be a robust and trustworthy collaboration with suppliers in regard to the implementation of a liability cap for them.
• Ambiguous legal provisions must be amended to clarify the scope of criminal liability of suppliers in case of nuclear incident.