CIVIL LIABILITY FOR NUCLEAR DAMAGE: DEBATE

Any nuclear catastrophe has the potential to have far-reaching implications beyond the borders of the country in which it happens, and a number of international accords augment national rules on nuclear liability. Liability is restricted by both international treaties and national legislation, such that beyond the limit (which is often covered by insurance), the state can assume responsibility as the insurer of last resort, as in all other parts of industrial society.

Three important international accords comprise the international structure of nuclear liability: (a) The Paris Convention of 1960; (b) The Vienna Convention of 1963; and (c) The Convention on Supplementary Compensation for Nuclear Damage of 1997.

These Conventions are founded on the civil law paradigm and share the following key principles:

1. The operators of nuclear plants bear the exclusive responsibility for liability.
2. The operator's liability is absolute, which means that he is held guilty regardless of fault.
3. Liability is restricted in amount. Under the Vienna Convention, it may be limited at no less than US$ 5 million (the value of gold on April 29, 1963), but no higher limit is set. The Paris Convention establishes a maximum liability of 15 million SDRs, with the Installation State able to arrange for a higher or lower sum, but no less than 5 million SDRs, taking into account the availability of insurance coverage. The Brussels Supplementary Convention created extra funding above the amount available under the Paris Convention, up to a total of 300 million SDRs, consisting of payments from the installation State and contractual parties.
4. Liability is time-limited. Both Conventions provide that if a case is not filed within 10 years following the nuclear incident, compensation rights would be lost. Longer durations are permitted if, under the installation State's legislation, the operator's responsibility is protected by financial security. National law may specify a lower time limit, but at least;two years (the Paris Convention) or three years (the Vienna Convention) from the date the plaintiff knew or ought to have known of the injury and the operator's liability.
5. The operator must keep insurance or other financial security for an amount comparable to his obligation; if such security is insufficient, the installation State is required to make up the shortfall up to the extent of the operator's liability.
6. Jurisdiction for actions rests entirely with the courts of the Contracting Party whose territory the nuclear event occurred.
7. Victims will not be discriminated against based on their country, domicile, or residency.

The Civil Liability for Nuclear Damage Act of 2010

In most countries, nuclear plant operators are responsible for any damage caused by an accident and must have liability insurance. India was an obvious exception, with reactor providers possibly responsible for damages in the case of a disaster. The 2010 Act makes Indian operators largely accountable for any nuclear mishap, although it also allows for redress against suppliers.

The Civil Liability for Nuclear Damage Act of 2010 aims to provide a framework for compensating victims of nuclear harm resulting from a nuclear disaster.

Key Features:

• It establishes culpability for nuclear harm and sets up processes for compensating victims.
• The Bill establishes no-fault liability for operators and grants them a right of action against specific individuals. It caps the operator's liability at Rs 500 crore. The central government will be accountable for any damages in excess of this sum, up to 300 million SDR.
• All operators (excluding the central government) must get insurance or offer financial security to cover their liabilities.
• For government-owned facilities, the government will bear the complete responsibility of up to 300 million SDR.
• The Bill states who can seek compensation and which agencies will analyze and grant compensation for nuclear damage.

 Key issues and analysis

Section 17(b) allows the operator, the Nuclear Power Corporation of India, to shift liability for a nuclear accident to suppliers of nuclear material, particularly if the accident was caused by an act of the supplier or his employee, such as the supply of patent or latent defects or substandard services.

Section 46 allows victims of a nuclear disaster to sue the operator or supplier for damages under tort law, even though such actions are beyond the authority of the CLNDA and its liability ceiling, exposing providers to limitless responsibility. Both sections are expected to increase the cost of insurance coverage for providers, maybe beyond what is financially practicable and within the constraints of competitive energy prices.

Regardless of the amount of damage, the overall responsibility would be restricted to SDR 300 million. This sum may be insufficient to offer suitable compensation in the event of a serious incident. The Union Carbide tragedy in Bhopal resulted in a chemical spill that impacted over five lakh people. For that event, the Supreme Court ordered Union Carbide to pay 470 million dollars in compensation and urged the government to cover any additional liabilities. Many other nations that are major nuclear energy producers do not have a limit on total responsibility for nuclear damage.

The operator's liability has been set at Rs. 500 crore (USD 109 million at current exchange rates). This implies that if the nuclear damage surpasses this sum, the central government is required to pay victims up to a maximum of 300 million SDR. Several nations that are major manufacturers of nuclear power have a greater liability limit for the operator.

The Bill allows the operator to seek redress against the provider. This might be a barrier if India seeks to join international accords on civil responsibility for nuclear disasters.

Compensation claims can be submitted within ten years of being notified of a nuclear disaster. This may be insufficient in circumstances when the effects of radiation are identified after a significant amount of time.

India signed the Convention on Supplementary Compensation for Nuclear Damage (CSC)

The 1997 Convention on Supplementary Compensation for Nuclear Damage (CSC) aims to create a global liability structure and raise the amount of compensation available to victims of nuclear accidents.

India adopted the Convention on Supplementary Compensation for Nuclear Damages (CSC) in the month of February 2016.

The CSC Annex in no way restricts the terms of the contract between the operator and the supplier, including the agreed-upon grounds for recourse.

Once ratified, the Indian government's position on the interpretations would be strengthened, and the NPCIL will be allowed to begin preliminary techno-economic conversations with US suppliers while also providing comparable guarantees to other international suppliers.

Simultaneously, the NPCIL should align its contract wording with these reasons, which is currently not the case, so that local suppliers may be confident. The explanations should assist in smoothing up the procedure.

Indian Nuclear Insurance Pool

In June 2015, the state-owned General Insurance Corporation-Reinsurer (GIC-Re) and other Indian insurance companies established the Indian Nuclear Insurance Pool to provide NPCIL with an insurance product that covers the operator's liability under the provisions of the Civil Liability for Nuclear Damage (CLND) Act 2010. NPCIL will thereafter develop a new product to explicitly cover the suppliers' risks under this Act.

India chose to create a nuclear insurance pool to cover the liabilities of operators and suppliers. This Rs. 1,500 crore insurance pool was established in June 2015 by various Indian insurance firms and a British insurance partner.

Beyond Rs. 1,500 crore, the Indian government will bear the responsibility up to Rs. 2,610 crore, after which India would have access to international funding through the CSC. The ratification allows India to get access to this pool, which is currently fairly modest because only the United States, Japan, and the United Arab Emirates are affluent nations who have signed on to the Convention.

Conclusion

India intends to develop many additional nuclear power stations, all of which would be managed by the state-owned Nuclear Power Corporation of India (NPCIL). Any development in the nuclear power sector would be undertaken by NPCIL, which is funded by Indian taxpayers.

Foreign corporations like as Westinghouse, Areva, and GE Hitachi will only participate as contractors and suppliers to NPCIL, not as investors. India is not considering these corporations for 'investments'; their presence in India will be limited to serving as vendors for NPCIL, and vendors cannot dictate conditions to customers.

The statute specifies the conditions in which a provider may be held accountable for an occurrence. In this scenario, Indian law cannot be overruled. As a result, as long as NPCIL includes a right of recourse in the contracts it enters into with its suppliers, the vendors can be held accountable for any omissions on their side that cause issues. NPCIL is wholly owned by the Government of India and is required to obey Indian legislation in this regard. India's present nuclear liability regulations still enable electric companies to seek payment from nuclear power plant providers in the case of an accident.