Deciphering the Nuclear Liability Law in India

Introduction 

Imagine a world in which science and technology unlock the door to exceptional innovations and energy solutions. Nuclear power emerges as a powerful contender in this setting, promising innovation and sustainable energy. However, alongside its enormous potential, nuclear energy entails substantial risks and obligations. The Civil Liability for Nuclear Damage Act (CLND) of 2010 is the legal foundation that influences India’s response to nuclear incidents. The purpose of this legislation is to ensure that the promises of nuclear power are balanced by a commitment to the safety of citizens and the environment. 

The CLND Act embodies a fundamental principle, the nuclear liability principle. It encapsulates the unambiguous obligation of nuclear facility operators and suppliers to accept full liability for the consequences of any untoward incident. This liability is expansive, encompassing loss of life, bodily harm, property destruction, and ecological repercussions caused by the discharge of radioactive substances. This law is based on the principles of fairness and justice, assuring that those affected by nuclear accidents obtain adequate compensation. It also serves as a guide for investors, operators, and suppliers, providing a distinct framework that promotes responsible practises and accountability. 

However, as with any significant legislation, the CLND Act has faced its share of obstacles and debates. It seeks to protect citizens and the environment, but its implementation has been difficult. India’s dynamic nuclear ambitions, including ambitious expansion plans, underscore the need for a strong nuclear liability law. This article aims to analyse the CLND Act and the issues that arise in the nuclear liability law in India in the following manner: 

• Background of Nuclear Liability Law in India 
• Issues with Nuclear Liability Law in India 
• Implications and Challenges 
• Stakeholder Perspectives 

Background of Nuclear Liability Law in India 

Nuclear power has emerged as a major actor in the context of technological advancement and rising energy demands. However, the potential hazards of nuclear energy call for a robust legal framework to regulate liability in the event of nuclear incidents. 

Internationally, the notion of civil nuclear liability has evolved over time, gathering momentum following the 1986 nuclear disaster at Chernobyl. This resulted in the establishment of a network of treaties designed to ensure compensation for victims and establish liability in the event of nuclear accidents. The signing of the Convention on Supplemental Compensation (CSC) in 1997 marked a significant turning point. This overarching agreement intended to establish a national minimum compensation level. In addition, it defined provisions for increasing compensation through public funds if the national amount was insufficient to cover the damages caused by a nuclear incident. 

The beginning of India’s journey towards comprehensive nuclear liability was its signing of the CSC. In 2016, however, the Indian Parliament formally ratified the convention, demonstrating the nation’s commitment to international standards. India enacted the Civil Liability for Nuclear Damage Act (CLNDA) in 2010 in order to align domestic law with the CSC and to guarantee effective compensation mechanisms. The CLNDA is a landmark legislation intended to provide victims of nuclear accidents with prompt and equitable compensation. The imposition of strict and no-fault liability on nuclear plant administrators is central to its principles, ensuring that accountability is maintained even in the absence of negligence.  

This Act establishes the operator’s liability for nuclear catastrophes up to 1,500 crore, which requires insurance or financial security. If damages exceed this amount, the government’s liability, which is constrained to approximately 2,100 to 2,300 crore, kicks in. In addition to establishing a timeline for compensation claims, the act authorises the Atomic Energy Regulatory Board to report incidents within 15 days. In addition, the act establishes a Nuclear Damage Claims Commission to facilitate equitable compensation and conflict resolution. These provisions demonstrate India’s dedication to expedient and responsible nuclear liability management. As of today, India has 22 nuclear reactors, all owned by Nuclear Power Corporation of India (NPCIL), and several future projects planned. 

Additionally, the Ministry of Atomic Energy issued the Civil Liability for Nuclear Damage Rules of 2011 to supplement the Act. According to Section 17(a) of the Act, they address the conditions for the operator’s right of recourse against the supplier. Nonetheless, it is unclear whether a contract governed by Section 17(a) restricts recourse under other Act provisions. The rules further set out procedures for claiming compensation, taking into account unique aspects like the claimant’s gender, literacy level, and disability. In addition, the rules specify the timeframes for exercising the right to recourse during the ‘initial licence period’ or the product liability period. 

Issues with Nuclear Liability Law in India 

Within the framework of the nuclear liability law in India, CLNDA addresses the issue of supplier liability. While the global legal framework, including the CSC, places liability exclusively on the operator of a nuclear installation, India introduced a novel concept of supplier liability through the CLNDA. This innovation was inspired by the realisation that historical occurrences, like the Bhopal gas tragedy, were partially attributable to defective parts. In addition to the two conditions laid out in the CSC for recourse against a supplier, Section 17(b) of the CLNDA states that the operator of a nuclear plant may seek recourse against a supplier when a nuclear incident is caused by the supplier’s acts, such as the supply of equipment or material with patent or latent defects or substandard services. 

This clause regarding supplier liability has caused concern, particularly among foreign and domestic suppliers. Suppliers fear being held liable for damages, which could expose them to limitless liability. Two particular provisions, Section 17(b) and Section 46, have been the subject of debate. Section 46 permits non-CLNDA proceedings to be brought against the operator, potentially exposing suppliers to liability claims under other civil laws. 

The CLNDA’s approach to supplier liability differs from the international standard, reflecting India’s determination to hold suppliers accountable in certain circumstances. This provision strengthens the operator’s recourse and represents a significant step towards fortifying domestic nuclear liability laws. This innovative approach aligns with India’s aim of ensuring comprehensive compensation and accountability in the case of a nuclear incident, despite concerns and debates.

Implications and Challenges 

Implementing the nuclear liability law in India presents a number of obstacles and potential repercussions. Even though the current liability cap for operators is lower than in other countries, it may not be sufficient to compensate victims adequately in the event of a major nuclear accident. Conflicts of interest may arise as a result of the government’s dual role in assessing damage and paying compensation. The provision for recourse against suppliers may conflict with certain international agreements, thereby limiting the scope of possible collaboration. The ten-year statute of limitations for compensation claims may not consider delayed health effects, and ambiguity in the application of liability could lead to differing court interpretations. The India Nuclear Insurance Pool faces difficulties accumulating funds and reinsurance support, which could leave installations uninsured. 

Stakeholder Perspectives 

Various perspectives on the CLNDA have emerged within the nuclear supplier community. The domestic industry seeks modifications to the Act’s definitions to mitigate supplier liability, whereas industry organisations advocate for more substantive changes, such as the elimination of Section 46 and the linking of Rule 24 restrictions to both Sections 17(a) and 17(b). Vidhi, a legal NGO, suggests keeping Section 17(b) consistent with the ‘polluter pays’ principle and modifying Sections 5 and 9 to emphasise the Act’s exclusive jurisdiction over nuclear damage claims. In addition, Vidhi proposes government-owned insurance for reactors, insurance pools, and contributions from suppliers to the Nuclear Liability Fund. The industry’s drive to eliminate supplier liability, Vidhi’s adherence to principles and international obligations, and the Department of Atomic Energy’s nuanced response, possibly influenced by political considerations, illustrate divergent positions. [1]

Conclusion and The Way Forward 

CLNDA represents a step forward in the establishment of nuclear liability and compensation mechanisms. However, obstacles including liability limit disparities, private sector participation, and ambiguous provisions need to be addressed. On issues such as supplier liability, stakeholder perspectives vary. Moving forward, a balanced approach is required, aligning with international standards, addressing concerns, and improving the framework to ensure equitable compensation and the secure development of nuclear energy.

[1] https://indianstrategicknowledgeonline.com/web/Nuclear_Liability_1421915251765.pdf (Written by a Former Indian Diplomat, Indian Foreign Services)