Govt spells out nuke liability rules

Govt spells out nuke liability rules

The new rules notified on November 11 did not clarify some of the US’s concerns with the Indian liability law passed by Parliament last year.

But in a limited relief, the rules allow nuclear plant operator – at the moment, Nuclear Power Corporation of India Ltd – the right to recourse only for an initial licensing period thereby restricting the liability period for the suppliers.

The new rules, when read with the Atomic Energy (Radiation Protection) Rules of 2004, limit suppliers’ initial license period up to five years. On the other hand, the Act fixes the maximum compensation at Rs 1,500 crore.

The rules also make it clear that an operator's claim shall not exceed the actual amount of compensation paid by him up to the date of filing such claim. But the rules are silent on Section 46 of the Indian liability law that permits ordinary citizens to file tort claims for damage. The US sees this as a ploy to expose its nuclear firms to unlimited liability claims in case of any accident.

One of India’s future nuclear suppliers, Areva, is cautious and seeks more time to analyse the rules before going ahead with the commercial contract for supplying the first two 1,650 MW nuclear reactors for the Jaitapur plant.

“We welcome their publication, but are still to fully read and understand them. We do not wish to comment on the Rules for the time being and will comment in due time,” Areva Chairman and Managing Director Arthur de Montalembert told Deccan Herald.

Even though the French nuclear major is to eventually supply six EPR reactors for Jaitapur in Maharashtra, the first contract between Areva and NPCIL would be for the first two reactors, which are scheduled to be operational by 2018.

The American government, too, is wary about the new liability regulations because it thinks in the event of a Bhopal-like accident, an executive order of the government would not hold water in the face of a massive public outcry.

Instead, the Obama administration is pushing for an additional safety net in the form of the Convention on Supplementary Compensation that has legal safeguards suiting American interests.

Bilateral talks

As the liability rules fall short of the expectations of foreign suppliers, the issue may dominate the bilateral talks between Manmohan Singh and the American president in Bali on Friday.

India’s ambitious nuclear power programme revolves around supplying of big reactors by foreign vendors who need to be on-board with the liability regime before commencing nuclear commerce with India.