04/13/23

Draft Nuclear Liability BillA Point of View

M. Rajaram

Agenda

Context to Nuclear Liability Issue

Do we need a Nuclear Liability Act?

The Proposed Bill – Salient Features

The Key Issues and how does the proposed bill address them?

Some Observations & Conclusions

Context to Nuclear Liability

The Energy Need

Private Participation to boost civilian nuclear energy

The need for a enabling framework

The need for a Liability Management

Who is Liable? For What? And to what extent?

How much is the Liability?

International Arrangements on Nuclear Liability

Paris Convention

Vienna Convention

Supplementary Convention on Nuclear Damage

Do We need a Nuclear Liability Act?

India does not have any Act to cater to this area

NPCIL is the sole Operator

AERB is the sole Controller and Regulator

Liability rests with GOI solely and completely

India is not a signatory to any of the International Conventions on this regard

The Objective of the GOI is to allow private participation in Nuclear Power Generation to meet demand – then who should be liable and to what extent?

The crisis on hand

Lack of Uranium Supplies and Reserves in India to meet demand

The time lag to perfect the three stage development and mastering of Thorium Based Nuclear cycle

The access to technology – Enrichment, Reactor Design and Safety Tech

India is already a proven technology owner of the entire Nuclear cycle and will be in a position to participate in its own right in the international markets

Do We need a Nuclear Liability Act?

Liability Trends

Operator Liability Vs Supplier Liability

Differing World Standards on exposure & the International Response

Liability Dimensions – Liability for Damage & Punitive Damage

Jurisdiction over Liability

Impact on Costs and Viability of Nuclear Energy

The need for equitable, quick and effective and comprehensive

compensation

The need for a Liability Cap

Open ended Liability Vs Capped Liability

The Proposed Bill – The Civil Liability for Nuclear Damage Bill 2010

Currently Domestic Framework is regulated by Atomic Energy Act 1962

No Provision in the said Act to cover for Nuclear Liability

The Proposed Bill is to be in Line with the Convention on

Supplementary Compensation for Nuclear Damages to the Vienna

Convention of 1997

India is not a signatory to any convention related to Nuclear Liability

Proposed Bill is necessary to address the issue of Nuclear Liability

With regard to transport of Nuclear Material

With regard to Trans-Boundary Nuclear Liabilities

It is important to read the Bill in conjunction with the Supplementary

Convention to Vienna Convention

Salient Features of the Bill

It extends to the whole of India.

It also applies to nuclear damage suffered—

(a) in or over the maritime areas beyond the territorial waters of India;

(b) in or over the exclusive economic zone of India as referred to in section 7 of

the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other

Maritime Zones Act, 1976;

(c) on board or by a ship registered in India under section 22 of the Merchant

Shipping Act, 1958 or under any other law for the time being in force;

(d) on board or by an aircraft registered in India under clause (d) of sub-

section(2) of section 5 of the Aircraft Act, 1934 or under any other law for the

time being in force;

(e) on or by an artificial island, installation or structure under the jurisdiction

ofIndia.

Salient Features of the Bill – The Proposed Limits of Liability

AERB will be the sole authority to notify a Nuclear Incident – to be done within

15 days

The maximum amount of liability in respect of each nuclear incident shall be the

rupee equivalent of three hundred million Special Drawing Rights.

The liability of an operator for each nuclear incident shall be rupees five hundred

crores (Section 6)

Provided that the Central Government may, having regard to the extent of risk

involved in a nuclear installation, by notification, either increase or decrease

the amount of liability of the operator:

Provided further that where the amount of liability is decreased, it shall not be

less than rupees one hundred crore

Provided also that the amount of liability shall not include any interest or cost

of proceedings.

Salient Features of the Bill – The Proposed Limits of Liability

The Central Government shall be liable for nuclear damage in respect

of a nuclear incident, —

(a) where the liability exceeds the amount of liability of an operator

specified under sub-section (2) of section 6, to the extent such liability

exceeds such liability of the operator;

(b) occurring in a nuclear installation owned by it; and

(c) occurring on account of causes specified in clauses (i) and (ii) of

subsection (1) of section 5.

Salient Features of the Bill – Claims Commissioner & NDCC

Bill provides for the appointment of a Claims Commissioner with due powers

Also details the Committee that will appoint, the powers and for salaries and officials for the office

Bill also provides for the setting up of a Nuclear Damage Claims Commission

Where the Central Government, having regard to the injury or damage caused by a nuclear incident, is of the opinion that—

(a) the amount of compensation may exceed the limit specified under sub-section (2) of section 6; or

(b) it is expedient and necessary that claims for such damage be adjudicated by the Commission instead of Claims Commissioner; or

(c) it is necessary in the public interest to provide special measures for speedy adjudication of claims for compensation,

the Central Government may, by notification, establish a Nuclear Damage Claims Commission, for the purposes of this Act.

No Civil Court can pass any order or adjudicate on the proceedings of the Claims Commissioner or the Commission

Salient Features of the Bill – Offences & Penalties

Provision for offences and penalities for violating the provisions of this Act is proposed

Whoever—

(a) contravenes any rule made or any direction issued under this Act; or

(b) fails to comply with the provisions of section 8; or

(c) fails to deposit the amount under section 36,

shall be punishable with imprisonment for a term which may extend to five years or with fine or with both.

Whoever fails to comply with any direction issued under section 43 or obstructs any authority or person in the exercise of his powers under this Act shall be punishable with imprisonment for a term which may extend to one year or with fine or with both.

Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment under this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Key Issues

Jurisdiction

Extent of Jurisdiction

Control of the Jurisdiction

Extent of Liability

Adequacy of Damages

Adequacy of Coverage

Claims Process

Empowerment

Ease of Claims Process to ensure coverage and time bound redressal

Offences & Penalties

Adequacy of Penalties for non-compliance

Accountability

Right to Recourse

Key Issues – How does the proposed Bill address them

Jurisdiction

Extent of Jurisdiction – Only to the Operator

Control of the Jurisdiction – Remains within Indian perview but not subject to judicial redressal or review from Judiciary – compartmentalised to the competent authority set up under the Act

Extent of Liability

Adequacy of Damages – Aligning to the International Obligations under the Supplementary Compensation Convention

Adequacy of Coverage - Debatable

Claims Process

Empowerment – Adequately Empowered

Ease of Claims Process to ensure coverage and time bound redressal – On paper, the proposed Act calls for this

Offences & Penalties

Adequacy of Penalties for non-compliance - Debatable

Accountability - Debatable

Right to Recourse – Absolutely Silent and this is crucial

What does the International Convention say on Right of Recourse

Article IX Rights of Recourse

1.Each Contracting Party shall enact legislation in order to enable both the Contracting Party in whose territory the nuclear installation of the operator liable is situated and the other Contracting Parties who have paid contributions referred to in Article III.1(b), to benefit from the operator's right of recourse to the extent that he has such a right under either one of the Conventions referred to in Article I or national legislation mentioned in Article II.1(b) and to the extent that contributions have been made by any of the Contracting Parties.

2.The legislation of the Contracting Party in whose territory the nuclear installation of the operator liable is situated may provide for the recovery of public funds made available under this Convention from such operator if the damage results from fault on his part.

3.The Contracting Party whose courts have jurisdiction may exercise the rights of recourse provided for in paragraphs 1 and 2 on behalf of the other Contracting Parties which have contributed.

Some Observations & Conclusions

There is a strong case for such an Act from all perspectives

The Indian Bill is to align it with the international arrangement and hence must be read in conjunction with the Supplementary Compensation Convention of 1997

It should be noted that Supplementary Compensation Convention has not come into force.

US has already ratified it along with Morocco, Argentina and Romania (thirteen other countries have signed but not ratified)

None of the other P5 countries have signed up

For it to come to force at least 5 countries that have at least 400000 units of nuclear energy must sign up

The compensation levels have been designed on a multilateral basis and so cannot be changed easily

Also provides for two tier system with a depositary – so the funds will be there but access will be through the international arrangements

Some Observations & Conclusions

The Adequacy of the Process is there but there is no judicial

intervention on the competent body set up under the Act

A lot will depend on the international bi-lateral treaty conditions as they

are a pre-requisite and will govern as per the convention

Right to Recourse – is a key element that is missing a mention even!

The whole Act has to be understood in an international geo-political

context as well

We need to enable the capability to assert sovereign decision making

and seeking of additional damages should the situation demand despite

international obligations – A fine balancing Act

E.g. how the US does these things

Some Observations & Conclusions

Finally, it all depends not just on an enabling provision or Act, but the

political willingness to enforce the same

The debate has to be on these substantive issues – Not likely to

happen

GOI seeming willingness to rush through things without proper

debate and commit to surrendering or diluting sovereign control over

crucial issues

Opposition to the bill is politicised – Some opponents to the bill are

motivated by ideological blinkers or other foreign considerations

Lack of in-depth understanding of the issue involved.

Thank You!