Civil Nuclear Liability: India’s Legislative Shift Towards Investment and Safety

Context

India is seeking to reform its nuclear legal framework by amending two crucial laws:

• Civil Liability for Nuclear Damage Act (CLNDA), 2010

• Atomic Energy Act, 1962

This move aims to:

• Attract foreign investment in nuclear energy

• Address industry concerns over liability clauses

• Align India’s framework with global standards like the Convention on Supplementary Compensation (CSC)

What is Civil Nuclear Liability?

• Objective: To ensure compensation for victims in case of a nuclear accident.

• International Framework: Developed after the 1986 Chernobyl disaster.

• CSC (1997): Set global standards for national liability laws.

• India’s Step: Enacted CLNDA in 2010 to align with CSC requirements.

• Vienna Convention (1963): Established minimum standards for civil nuclear liability across countries.

Key Features of CLNDA, 2010

• Purpose: To provide prompt and no-fault compensation to victims of nuclear damage.

• No-Fault Liability: Operators are liable regardless of negligence or intent.

• Right of Recourse (Section 17):

  • Allows the operator to recover damages from suppliers if:

    • It is mentioned in a contract

    • Damage was caused by supplier’s fault

    • Damage was intentional

• Operator: Typically, the Nuclear Power Corporation of India Ltd (NPCIL)

• Suppliers: Includes foreign reactor builders (e.g., Westinghouse, Framatome) and domestic firms (e.g., L&T, Walchandnagar)

Atomic Energy Act, 1962 – Overview

• Replaced: The earlier 1948 Act

• Objective: To control the development and use of atomic energy for peaceful purposes

• Definition: Covers energy from fission and fusion processes

• Authority: Lies solely with the Central Government and NPCIL

• 2015 Amendment: Allowed NPCIL to form joint ventures with PSUs (but not with private firms)

Challenges in India’s Nuclear Liability Regime

• Broad Supplier Definition: Causes fear among domestic sub-vendors.

• Section 17(b): Cited by foreign companies as a deterrent due to risk of future liability.

• Lack of Foreign Investment: Since 2010, no major foreign company has invested in Indian nuclear projects.

• Exclusion of Private Sector: Current law bars private firms from owning/operating nuclear plants.

Proposed Amendments to Nuclear Laws

• Clarify Supplier Definition: To include domestic sub-vendors and reduce ambiguity

• Reform Section 17 of CLNDA: To align with international liability standards

• Private Sector Entry: Enable Indian and foreign private firms to become nuclear operators

• Foreign Investment: Allow minority equity participation by foreign companies in nuclear projects

Future Prospects and Benefits

• Alignment with CSC: Ensures compliance with global liability norms

• Boost Foreign Investment: Encourages firms from USA and France to participate

• Revive Pending Projects: Can restart contracts stalled for over a decade

• Support Clean Energy Goals: Helps reduce dependence on fossil fuels

• Promote PPP Model: May bring in public-private partnerships in the nuclear sector

What Lies Ahead?

• Political consensus is required to pass the amendments and modernize India’s nuclear legal landscape

• This could help India meet its energy targets while ensuring safety and accountability

Quick Facts

Convention on Supplementary Compensation for Nuclear Damage (CSC)

• Adopted: 1997

• Objective:

  • Set minimum operator liability

  • Enhance compensation for nuclear damage

• Governing Body: International Atomic Energy Agency (IAEA)

• India’s Status: Not a signatory

• Membership: Open to countries under Vienna/Paris Conventions or with compliant national laws

Vienna Convention on Civil Liability for Nuclear Damage (1963)

• Framework: Under IAEA

• Focus:

  • Exclusive liability on operators

  • Mandatory financial security (e.g., insurance)

• Signatories: 193+ countries

• India: Not a signatory