India’s nuclear liability law and associated issues – Explained, pointwise

Introduction

India’s nuclear liability law, the Civil Liability for Nuclear Damage Act (CLND) 2010, outlines the legal framework for handling liability in the event of a nuclear accident. It governs compensation for victims and holds nuclear facility operators responsible for any damage caused. While this law aims to protect citizens and the environment, it has also faced challenges and controversies.  

What is nuclear liability?

Nuclear liability refers to the legal responsibility of an operator or supplier of a nuclear facility for any damages or injuries caused as a result of a nuclear incident. This liability typically includes compensation for loss of life, personal injury, property damage, and environmental damage caused by the release of radioactive materials or the occurrence of a nuclear accident.

In most countries, nuclear liability laws establish a framework to ensure that adequate compensation is available to the affected parties and that the financial burden is fairly distributed among the responsible entities, such as the operator or supplier of a nuclear power plant.  

What is the need for nuclear liability law in India?

Improper compensation structures for victims: A nuclear liability law is needed to establish a legal framework that guarantees victims of nuclear accidents are compensated fairly and promptly. For example, in the case of a nuclear accident, the law would ensure that affected individuals or communities are compensated for damages to health, property, and the environment.  

Low investment in the nuclear sector: The law is necessary to encourage investment in the Indian nuclear sector by providing a clear and predictable liability regime, which minimizes uncertainties for investors, operators, and suppliers. For instance, foreign suppliers may be hesitant to invest in the Indian nuclear industry without a clear understanding of their potential liabilities in case of an accident, so a well-defined liability law helps to alleviate their concerns.  

Incompatibility with international standards: India needs a nuclear liability law to align its domestic regulations with international standards and facilitate cooperation with other countries in the nuclear field. For example, by adopting a liability law consistent with international norms, India can more easily engage in collaborative projects, such as importing advanced nuclear technology or exporting domestically developed technology to other countries.  

Legal accountability: A nuclear liability law is essential to create a system that holds operators and suppliers legally accountable for their actions, encouraging adherence to safety measures and fostering a culture of responsibility. For instance, if an operator fails to follow safety regulations and an accident occurs, the liability law would hold them accountable for the consequences, which could include financial penalties or legal action.  

Lack of negligence: The law is necessary to deter potential negligence by establishing a clear legal and financial liability framework for the nuclear power sector, which ultimately leads to safer operations. For example, if an operator knows that they will be held financially responsible for any damages resulting from a nuclear accident due to negligence, they will be more likely to prioritize safety and avoid cutting corners.  

Increasing focus on nuclear power: India currently has 22 reactors, all of which are operated by the NPCIL. Apart from this, it has 10 reactors that are at various stages of construction and 10 more have been sanctioned. All of these are expected to start functioning by 2031 so a comprehensive law is essential.

What is India’s Civil Liability for Nuclear Damage Act and its key provisions?

India’s Civil Liability for Nuclear Damage (CLND) Act was passed in 2010 to establish a legal framework addressing liability and compensation in the event of a nuclear accident. The Act outlines the responsibilities of nuclear plant operators, suppliers, and the government, ensuring prompt and fair compensation for affected individuals and communities.  

Here are some of the key provisions of the Act:  

Operator liability: The Act designates the nuclear plant operator as the primary entity responsible for compensating victims in case of a nuclear accident. This “strict liability” means that the operator is liable regardless of whether or not they were at fault.  

Financial cap on liability: The Act sets a financial cap on the operator’s liability at INR 1,500 crore (approximately USD 205 million) for each nuclear incident. If the compensation amount exceeds this cap, the central government is responsible for providing additional funds up to the rupee equivalent of 300 million Special Drawing Rights (SDRs), which is approximately INR 3,300 crore (USD 450 million).  

Right of recourse: The Act addresses supplier liability in Section 17, which grants the operator a right of recourse against the supplier under certain conditions. This right of recourse can be invoked if (a) the contract between the operator and supplier contains such provisions, (b) the nuclear incident occurs due to the supplier’s negligence, or (c) the supplier provided defective equipment or services that caused the incident. This provision aims to ensure accountability among suppliers and share the burden of liability in case of a nuclear accident. 

Claims Commission: The Act provides for the establishment of a Nuclear Damage Claims Commission to adjudicate claims arising from nuclear accidents. This commission ensures a streamlined process for victims to seek compensation and resolves disputes between operators, suppliers, and affected individuals or communities.  

Time limits for claims: The CLND Act sets a time limit for filing claims for compensation. Claims related to personal injury or death must be filed within 20 years of the nuclear incident, whereas claims for damage to property must be filed within 10 years.  

Mandatory insurance: The Act requires nuclear plant operators to obtain insurance or financial security to cover their liability. This ensures that funds are available for compensation in the event of an accident.  

What are the advantages of India’s nuclear liability law?

Some of the key advantages are:  

Victim protection: The CLND Act prioritizes the protection of victims by ensuring that they receive prompt and adequate compensation in the event of a nuclear incident. By channelling liability exclusively to the operator and setting clear time limits for compensation claims, the Act simplifies the compensation process for victims.  

Operator accountability: The Act holds the operators of nuclear installations strictly liable for any damages caused by a nuclear incident at their facility, regardless of fault or negligence. This promotes safety and encourages operators to maintain high safety standards to minimize the risk of accidents.  

Supplier accountability: The Act provides operators with a right to recourse against suppliers in certain cases, such as when the nuclear incident results from the supplier’s negligence or defective equipment. This provision holds suppliers responsible for the quality of their products and services, promoting a culture of safety within the supply chain.  

Financial security: By mandating that operators obtain insurance coverage or financial security to cover their liability for nuclear damage, the CLND Act ensures that operators have the necessary resources to compensate victims in the event of an accident.  

Government support: The Act outlines the role of the Indian government in providing additional compensation if the operator’s liability limit is exceeded, or in exceptional circumstances such as acts of terrorism or natural disasters. This provision demonstrates the government’s commitment to protecting its citizens and supporting the nuclear industry.  

Legal clarity: The CLND Act establishes a clear legal framework for liability and compensation in the event of a nuclear incident, reducing uncertainties and ambiguities in the process. This clarity benefits both operators and victims by outlining their respective rights and responsibilities.  

International compatibility: The Act aligns India’s nuclear liability regime with international standards and conventions, such as the Convention on Supplementary Compensation for Nuclear Damage (CSC), which India joined in 2016. This compatibility fosters cooperation and collaboration with other countries in the field of nuclear energy.  

What are the challenges associated with India’s nuclear liability law?

Inadequate Liability Cap for Operators: The liability cap on the operator may not be sufficient to compensate victims in the event of a major nuclear disaster. Compared to other countries, this cap is relatively low and may prevent India from accessing an international pool of funds for compensation purposes.  

Uncertainty over Private Operators: The cap on the operator’s liability may not be necessary if all nuclear plants are owned by the government. It is unclear whether the government intends to allow private operators to manage nuclear power plants, creating uncertainty around liability concerns.  

Potential Conflict of Interest: The government is responsible for notifying the extent of environmental damage and economic loss. This could create a conflict of interest in cases where the government is also the party liable to pay compensation, possibly affecting the compensation process.  

Non-compliance with International Agreements: The right of recourse against the supplier provided in the Act may not be compliant with international agreements that India may wish to sign, potentially limiting India’s ability to cooperate with other countries on nuclear matters.  

Limited Timeframe for Compensation Claims: The ten-year time limit for claiming compensation may be inadequate for those suffering from nuclear damage, as some health effects or damages may not become apparent until after this period.  

Ambiguity in Applicable Laws: The Act allows operators and suppliers to be liable under other laws, but it is not clear which specific laws apply. Different interpretations by courts could either constrict or unduly expand the scope of such a provision, leading to inconsistencies in the application of liability rules. 

Challenges faced by India Nuclear Insurance Pool (INIP): It faces several challenges, including the collection of adequate funds to cover the mandated liability amount under the Civil Liability for Nuclear Damage Act (CLNDA). The current INIP funds are insufficient, amounting to only half of the required INR 1,500 crores. Furthermore, limited reinsurance support hampers the ability of insurance companies to contribute fully. Finally, experts question the adequacy of the capped liability amount to cover all nuclear installations in India, potentially leaving some without proper insurance coverage. 

What should be done to ensure proper nuclear liability?

Strengthen the India Nuclear Insurance Pool (INIP): Increase the funds collected by INIP to meet the required liability amount under the CLNDA. Encourage more insurance companies to participate and contribute to the pool, ensuring a more robust risk transfer mechanism.

Review liability caps: Reevaluate the current liability caps for operators and suppliers to determine if they are adequate to cover potential damages in the event of a nuclear incident. Comparing the liability caps with international standards and practices can help inform this assessment.

Improve reinsurance support: Develop mechanisms to enhance reinsurance support for nuclear risk liability. This may include working with international reinsurance markets to provide additional coverage and encouraging domestic reinsurers to participate in nuclear risk coverage.

Enhance regulatory oversight: Strengthen the role of regulatory bodies, such as the Atomic Energy Regulatory Board (AERB), to ensure strict compliance with safety standards and guidelines in nuclear power plants.

Clarify legal provisions: Address ambiguities in the CLNDA by providing clear guidelines on the application of the Act to suppliers and operators. This could include specifying the extent of liability and the applicable laws in case of nuclear damage.

International cooperation: India should actively engage in international forums and work with other countries to share best practices, technical expertise, and strategies to address nuclear liability issues. This includes participation in treaties and conventions, such as the Convention on Supplementary Compensation for Nuclear Damage (CSC).

Public awareness and transparency: Increase transparency in the nuclear sector and enhance public awareness about nuclear liability, safety measures, and emergency preparedness plans. This would help build trust and confidence in India’s nuclear power program

Sources:  The Hindu (Article 1, Article 2 and Article 3), TOI, Aljazeera, The Diplomat, Indian Express, 

Syllabus: GS 2: Governance – Government policies and interventions for development in various sectors and issues arising out of their design and implementation.