N-liability rules for suppliers on cards

  • Jayanth Jacob, Hindustan Times, New Delhi
  • |
  • Updated: Feb 04, 2011 00:17 IST

The government is planning to create a set of friendly rules to address the concerns of nuclear reactor suppliers on the liability that they will have to bear in case of accidents.

The move comes in the wake of major reactor supplier countries opposing the Civil Liability for Nuclear Damages Act, 2010 and also the manner in which it differs from the global norms.

The government, however, has been walking on a tight rope on the suppliers’ liability issue, as the Bill faced intense political Opposition both from the CPI-M-led Left Front and the BJP in Parliament in 2010.

So much so that it changed the composition of the ruling UPA, as the Left walked out of the ruling UPA on the nuclear pact issue.

The maximum amount of liability in respect of each accident is about $450 million, or 300 million special drawing rights, or R2,100 crore. The operator liability is capped at R1,500 crore for a nuclear power plant and R300 crore in case of spent-fuel reprocessing plants.

Now, one of the possible moves of the government could be capping the suppliers’ liability to the operators as well as the period for which the suppliers can be held liable for equipment.

According to officials familiar with the issue, addressing the suppliers’ concern over article 17 (b) of the Civil Liability for Nuclear Damages Act will have to be “innovative”.

Article 17(b) states that the operator of an Indian nuclear facility has the right to recover the entire cost of damages from the “supplier of the material, equipment or services” in the event of an incident.

But, explained an official: “The suppliers’ liability cannot be open-ended. They have to take insurance against the liability. So, they need to have an idea about how much they have to pay.”

Then comes the question of whether a supplier will be held responsible for the entire lifetime of a reactor — 80 years or so. This, say sources, goes against any normal “product liability notions” followed in the global marketplace.

What’s more, the foreign suppliers have objected to article 46 of the Civil Liability for Nuclear Damages Act that refers to the application of other domestic civil and criminal laws.

The government is, however, of the view that the rules stating the international obligations should prevail over the domestic law in case of a dispute.

That will mean that the Convention on Supplementary Compensation for Nuclear Damage (CSC) that lays stress on “exclusive operator liability” would prevail over the suppliers’ liability norms.


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