The Civil Liability For Nuclear Damage Act, 2010

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The Civil Liability for Nuclear Damages Act , 2010 got its presidential assent on 21st September 2010. The bill was introduced in the Parliament on 7th May 2010 and passed by the LokSabha on 25th August 2010, the RajyaSabha on 30th August 2010. India’s ambitious goal to increase fivefold the amount of electricity produced from nuclear power plants apart from the need to fix liability in the case of major nuclear accidents necessitated the passing of the bill. The Bhopal Gas Tragedy 1984 outlined the need to fix such liability and to address the issue of industrial safety.The objective of the act is to provide quick compensation in the event of a nuclear incident. This act is based on the international principles of civil nuclear liability laid down in the Vienna Convention, Paris Convention and Brussels Supplementary Convention. These three conventions taken together provide for absolute liability of the operator. It has been emphasised therein that the operator must maintain insurance or other financial security for an amount corresponding to his liability or the limit set by the installation state, beyond this level the installation state can provide public funds but can also have recourse to the operator.

Thus this act fixes liability for nuclear damage and specifies the procedures for compensating the victims. It specifies who can claim compensation and the authorities who will assess and award compensation for nuclear damage. It defines nuclear incidents, nuclear damage, nuclear fuel. One notable feature is that nuclear damage also includes damage caused to the environment and economic damage resulting from environmental degradation. It enjoins all the operators to take insurance or provide financial security to cover their liability. While the liability of the operator is capped at Rs 500 crore , it also gives them a right of recourse against certain persons. For damages exceeding Rs 500 crore, the Central Government is made liable. i.e. in the case of government facilities liability up-to 300 million SDR will be borne by the government.

The Atomic Energy Regulatory Board has to notify each nuclear incident within 15 days of its occurrence unless the gravity of threat and risk involved in is significant. The operator is made liable where damage is caused by a nuclear incident in that nuclear installation or where the nuclear material is coming from or originating in a nuclear installation and before its responsibility has been assumed by another operator. Liability also arises where damage is caused by nuclear material, sends to that installation and after the operator has assumed charge of the nuclear material. The operator has a right of recourse against third party causing nuclear damage. The operator has such a right when there is an express contract in writing or where the nuclear incident has occurred due to deliberate, negligent act of the employee or when the accident has been caused with the intent to cause damage.

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The act allows the central government to create two authorities by notification, The Claims Commissioner and the Nuclear Damage Claims Commission. The commissioner will invite applications for claiming compensation once a nuclear incident has been notified. The claims commission can be established by the central government if it thinks that the compensation may exceed rupees 500 crore or it is necessary that the claims will be heard by the commission and not the claims commissioner or that it is in public interest.

The act is regarded as the most controversial and debatable. It paves the path for private participation. The act defines operator as a person designated by the central government as the operator of nuclear installation. It also states that for nuclear power plants owned by the central government, the entire liability is that of the government. Currently, all nuclear power plants are owned by the government or government owned entities. For the entry of private players an amendment to the Atomic Energy Act is also required. Another controversial aspect is that regardless of the extent of damage, the total liability is limited. The total liability prescribed by this act is much lower than that prescribed by countries who are major producers of nuclear power. Even though the liability is limited but the central government has the power to take additional measures where necessary if the compensation to be awarded under this act exceeds the total maximum liability.

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It has also been viewed that since the act permits the operator to take recourse against the supplier, this can be an impediment if India wants to join international agreements on civil liability for nuclear damage. It has also been pointed out by scholars that since the extent of damages is notified by the Central Government there may be a conflict of interest in cases where the government is liable to pay compensation. Thus it can be said that in-spite of criticism from various quarters this act has the potential to regulate the nuclear energy sector and safeguard the public interest.