India’s civil nuclear liability regime affects its nuclear sector growth

Ques. “India’s civil nuclear liability regime is tremendously unbalanced and may adversely affect the nuclear capacity addition programme of India” while critically analysing the given statement describe how nuclear liability law 2010 may be a threat to nuclear sector growth in India.

The Civil Liability for Nuclear Damage Act, 2010 or Nuclear Liability Act aims to provide a civil liability for nuclear damage and prompt compensation to the victims of a nuclear incident through a no fault liability to the operator, appointment of Claims Commissioner, establishment of Nuclear Damage Claims Commission and for matters connected therewith or incidental thereto. The act contains several controversial clauses that the opposition parties claim to be ‘unconstitutional’. The opposition believes the bill is being pushed through due to US pressure though this is denied by the government.

May be a threat in following ways:

  • India’s civil nuclear liability regime is victim-friendly and offers adequate, fast compensation, without any discrimination, to victims. However, it’s tremendously unbalanced and unworkable and a deterrent to the nuclear industry’s growth.
  • No other country has the right to recourse from suppliers unless it’s mentioned in the contract. No other industry has a similar regime. If other industries are also covered by such a liability regime, it will lead to zero growth.
  • If the liability regime,  Act continue to remain inconsistent with the Annex to the Convention of Supplementary Compensation (CSC), it will make any attempted ratification by India problematic and subject to challenge by the other signatories when the treaty eventually comes into effect.
  • India is home to biodiverse ecosystems. With the high risk of accident, the introduction of nuclear power plants is not viable due to the environmental impact. A nuclear accident is disastrous for the environment. The Act does not properly address liability in the face of an accident or even day to day risks.

In the context of the nuclear sector a good safety and security culture in all organisations engaged in the sector which should prevent accidents is appreciable. There should be national mandate and political consensus on the nuclear programme and all nuclear issues, including liability. The national mandate with political consensus should result in a policy for the nuclear sector, which should be long term, clear, sustained and irreversible.

The Indian law of 2010, which brings in the concept of supplier liability, may not be consistent with existing practice, but it is certainly much more in consonance with the spirit of the times. The idea of some measure of supplier liability is an idea that can no longer be bypassed. However, what the government needs to ensure is that supplier liability does not become “infinite” or “open-ended.” What is necessary is a genuine effort to address the concerns of the suppliers’ community so that their liability can be quantified in a manner that does not raise costs to prohibitive levels.

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