ForumIAS:Current Affairs & Newspaper Analysis 2018(Morning Batch)
Batch will be started on 23rd December Click here

How is India's Civil Nuclear Liability Bill in contravention of CSC?

The US has been repeatedly saying that India's Civil Nuclear Liability bill is in contravention with the Convention on Supplementary Compensation in case of a nuclear accident. The Convention on Supplementary Compensation is an international treaty and that if India wants to make itself an attractive market for nuclear energy and meet its own energy security needs, it must amend its local legislation.

My question is exactly how is Indian Civil Nuclear Liability law in contravention of CSC. Even Indian law is exactly like the CSC - the operator has limited liability, and over and above liability is of govt. + the operator has right to recourse from the manufacturer/supplier for faulty equipment + operator liability is capped at 1500 crore!

This is a complex issue, but can somebody explain how it works?
*No good deed goes unpunished*

Comments

  • asgasg
    edited 10:36AM
    I think it is exactly this 'right to recourse' that the US is worried about.

    US says that a CSC-compliant bill should bar victims of an accident resulting from nuclear equipment supplied by an American company from approaching US courts for compensation. US analysts have criticized that the section 17(b) - right to recourse - makes India ineligible for the Convention. Indian officials, however, insist that the nuclear liability bill is CSC-compliant. It is all about how the CSC and the bill are interpreted in light of each other.

    India signed the CSC in November 2010 (on the day before the GS paper :P )
    Fate, it seems, is not without a sense of ïrony
  • edited 10:36AM
    I think The right to recourse, is not available to citizens. I mean the RIGHT TO RECOURSE by citizens in limited to 1500 cr with respect to the operator and not wrt the manufacturer or supplier. The operator and only the operator (not the public), however, will have a second RIGHT TO RECOURSE with respect to the manufacturer/supplier.

    Read a rather clumsily written article on the same, after your reply, but could not make much sense out of it. See if it makes some sense to you

    http://www.thehindu.com/opinion/lead/article2675389.ece
    *No good deed goes unpunished*
  • edited 10:36AM
    Okay, a better write up is available here.

    http://www.dnaindia.com/analysis/comment_why-the-nuclear-liability-rules-need-to-be-modified_1621411

    Perhaps you are right. Citizens have a right to recourse under the Torts Act - cases against the govt.

    Quoting from the above article -

    To claim recourse under 17(b), the operator has to prove that the incident occurred because the supplied equipment or material had ‘patent or latent defects or the services provided were sub-standard.’ But, under Section 46, a victim of a nuclear accident could bring a liability claim against the operator in courts under Tort Law and include the supplier also as co-defendant. In this case, the plaintiffs have to merely prove that the product or service caused the harm, but do not have to prove exactly how the product or service was deficient or that the supplier was negligent. The damages to be awarded in such cases are not specifically capped under law, and these will be decided by the court, based on circumstances.

    Pls let me know if you find something better written + most recently written since most articles were written before the bill was presented in the Parliament
    *No good deed goes unpunished*
  • Can anyone throw light on the current position of Civil liability and Nuclear damage act after recent Obama's visit?? A much anticipated question for interview and I'm not making much sense out of the IDSA article.
    कर लेते है बर्दाश्त हर दर्द इसी आस के साथ,
    कि खुदा नूर भी बरसाता है, आज़माइशो के बाद........
  • edited February 2015
    Who is helping you, don't forget them. Who is loving you, don't hate them. Who is trusting you, don't cheat them.

    Signing Off, Houston.
  • कर लेते है बर्दाश्त हर दर्द इसी आस के साथ,
    कि खुदा नूर भी बरसाता है, आज़माइशो के बाद........
  • After reading the above article -- one major takeaway point is, Suppliers liability is not necessary.
    Isn't it dangerous in the aftermath of fukushima incident??
    @Armstrong @all please clarify.
    कर लेते है बर्दाश्त हर दर्द इसी आस के साथ,
    कि खुदा नूर भी बरसाता है, आज़माइशो के बाद........
  • After reading the above article -- one major takeaway point is, Suppliers liability is not necessary.
    Isn't it dangerous in the aftermath of fukushima incident??
    @Armstrong @all please clarify.
    Yes it is dangerous but this is the only way to get the things working. Suppliers include many small companies too which in any case would not be able to pay. Fukushima was due to natural disaster and not due to supplier side issues. I'm reading further on this, will get back to you after some time.
    Who is helping you, don't forget them. Who is loving you, don't hate them. Who is trusting you, don't cheat them.

    Signing Off, Houston.
  • ^^suppliers will be free from legal binding if they dont put the right to recourse into the agreement.But at the same tym it is all abt bargaining if operator can convince suppliers to have the right to recourse.so its a trade if u can bargain u can make supplier liable.Though it is unlikely to happen as npcil will be keen only in getting the suppliers to come.
  • American objections to CLNDA, 2010 are largely concerned with two provisions- Sec 17(b) of the Act and Sec 46.

    Sec 17(b) of the Act gives the operator the right to recover whatever he pays out as no fault liability from the supplier, if the accident had resulted from an act of the supplier or his employees. However, the operator's liability is capped at 1500 cr.

    The Parliament wanted to make it clear that rights of victims were protected and that is why Sec 46 was added which says the CLNDA will be "in addition to and not in derogation of other laws in force" and that payment of civil damages would not exempt operator from other proceedings such as filing of a criminal case.

    US says that 17 (b) lies outside the CSC; that it will expose their companies to unlimited damages in the event of an accident.

    A clarification issued by MEA says that the right to recourse will be possible only if under 6a, it is written in the contract between the NPCIL and the supplier. That is, no liability for supplier unless it is in nuclear contract. Thus, while the right to recourse is permitted, it is not required or necessary.

    As far as Sec 46 goes, the Ministry says Parliament debates over CLNDA had rejected amendments to include the supplier, and therefore the supplier cannot be liable under any class action suit. The operator can still be sued by victims in case of an accident and a lot will depend on how the courts interpret the CLNDA.
  • @iasdream thank you.

    @Mehr it clarified many doubts :-)
    कर लेते है बर्दाश्त हर दर्द इसी आस के साथ,
    कि खुदा नूर भी बरसाता है, आज़माइशो के बाद........
  • Can someone explain why this liability law is an issue with USA only? We are working with France and Russia too but there wasn't any compromise. Or was there any?
    Who is helping you, don't forget them. Who is loving you, don't hate them. Who is trusting you, don't cheat them.

    Signing Off, Houston.

  • @Armstrong

    From IDSA-
    "The provisions of the CLNDA have stalled not only sales of nuclear reactors from US to India but from other major nuclear suppliers – Russia and France – as well. Even though the NSG exemption for nuclear commerce was granted more than six years ago, and India had signed the nuclear cooperation agreements with these countries nearly six years ago, it has not been able to finalise even a single commercial contract for the import of a reactors from any of these countries. The only nuclear cooperation that India has been able to conclude with any of the countries with whom it has nuclear cooperation agreements is in respect of nuclear fuel which would not have any implication for application of CLNDA."

  • Thanks @Mehr. Looks like we are dealing with each nation individually as far as liability law is concerned. This article states that Russia has agreed "in principle" to Indian law. http://indianexpress.com/article/india/india-others/russia-remains-india-important-defence-partner-says-pm-modi-both-countries-sign-key-nuclear-deal/
    Who is helping you, don't forget them. Who is loving you, don't hate them. Who is trusting you, don't cheat them.

    Signing Off, Houston.
  • Under the law, all the liabilities have been capped to 300 million Special Drawing Rights. Why SDR is used here and not any currency? I haven't seen anything before where SDR is used, we generally use USD.
    Who is helping you, don't forget them. Who is loving you, don't hate them. Who is trusting you, don't cheat them.

    Signing Off, Houston.
  • Under the law, all the liabilities have been capped to 300 million Special Drawing Rights. Why SDR is used here and not any currency? I haven't seen anything before where SDR is used, we generally use USD.
    its as per international nuclear liability convention from Brussels Supplementary Convention . May be because SDRs can be exchanged for any freely usable currencies and it is based upon 4 international currencies. I think in case of nuclear accident this compensation would be paid by IMF. May be thats why SDR in this case.
    back to Square 1
  • edited February 2015
    today's article in The Hindu on nuclear liability is a good one
    back to Square 1
  • Under the law, all the liabilities have been capped to 300 million Special Drawing Rights. Why SDR is used here and not any currency? I haven't seen anything before where SDR is used, we generally use USD.
    its as per international nuclear liability convention from Brussels Supplementary Convention . May be because SDRs can be exchanged for any freely usable currencies and it is based upon 4 international currencies. I think in case of nuclear accident this compensation would be paid by IMF. May be thats why SDR in this case.
    Brussel covention nahi vienna convention
    2014-1st attempt,mains--pol science
  • Under the law, all the liabilities have been capped to 300 million Special Drawing Rights. Why SDR is used here and not any currency? I haven't seen anything before where SDR is used, we generally use USD.
    its as per international nuclear liability convention from Brussels Supplementary Convention . May be because SDRs can be exchanged for any freely usable currencies and it is based upon 4 international currencies. I think in case of nuclear accident this compensation would be paid by IMF. May be thats why SDR in this case.
    Brussel covention nahi vienna convention
    actually both say the same thing but india signed CSC without being a member of either of these convention
    back to Square 1
  • What I've summed up is this:

    USA had following problems with CLND Act, 2010

    1. S. 17(b): the operator the right to recover whatever he pays out as no fault liability from the Supplier, if the accident had resulted from an act of the supplier or his employees. However, the operator's liability is capped at 1500 cr.

    US & Fr feels this right to recourse isn’t in tune with CSC (Convention of supplementary convention) on N-damages where the primary liability is with the operator & Not Supplier.

    2. S. 46: puts liability on N-suppliers in case of accident due to faulty material supplied by suppliers. US Cos like Westinghouse & GE-Hitachi are worried. It is also interpreted that victims can use S. 46 to tort claims & compensation (i.e. sue these N-suppliers). So US want amendment in CLND Act 2010

    India clarifies: A clarification issued by MEA says that the right to recourse will be possible only if under 6a, it is written in the contract between the NPCIL and the supplier. Thus it isn’t by default part of Civil N-Cooperation agreement.

    3. Another contentious clause in the liability law was unlimited liability for which international companies will find it difficult to get insurers.

    Now Question is How did the reconciliation happen without amending CLND Act?
    Point 3 was addressed without changing law how? Point 2 was addressed as can be seen from MEA statement.

    Also for Point 1 it is said that N-risk fund is planned but when we make a Nuclear Risk fund with funding from Insurance PSUs. Isn't public money used in here?
    CSE 2014| 1st Attempt | AIR 470s| IRS C&CE
    ESE 2014| 1st Attempt | AIR 90s |
  • CSE 2014| 1st Attempt | AIR 470s| IRS C&CE
    ESE 2014| 1st Attempt | AIR 90s |
  • I think other ppl would be able to provide better answer but here is what I know about the issue
    Nuclear liability act provides for operator liability to the tune of 1500 crore with right to recourse under section 17 of the act.
    But section 46 allows victims of nuclear accidents to launch class action suits against both suppliers and operated and demand compensation over and above the amount of compensation fixed under csc (that is 300 million sdr or 1500 crore).so suppliers would be exposed to unlimited compensation claims that would be decided by judicial process.
    2014-1st attempt,mains--pol science
  • edited October 2015
    What I've summed up is this:

    USA had following problems with CLND Act, 2010

    1. S. 17(b): the operator the right to recover whatever he pays out as no fault liability from the Supplier, if the accident had resulted from an act of the supplier or his employees. However, the operator's liability is capped at 1500 cr.

    US & Fr feels this right to recourse isn’t in tune with CSC (Convention of supplementary convention) on N-damages where the primary liability is with the operator & Not Supplier.

    2. S. 46: puts liability on N-suppliers in case of accident due to faulty material supplied by suppliers. US Cos like Westinghouse & GE-Hitachi are worried. It is also interpreted that victims can use S. 46 to tort claims & compensation (i.e. sue these N-suppliers). So US want amendment in CLND Act 2010

    India clarifies: A clarification issued by MEA says that the right to recourse will be possible only if under 6a, it is written in the contract between the NPCIL and the supplier. Thus it isn’t by default part of Civil N-Cooperation agreement.

    3. Another contentious clause in the liability law was unlimited liability for which international companies will find it difficult to get insurers.

    Now Question is How did the reconciliation happen without amending CLND Act?
    Point 3 was addressed without changing law how? Point 2 was addressed as can be seen from MEA statement.

    Also for Point 1 it is said that N-risk fund is planned but when we make a Nuclear Risk fund with funding from Insurance PSUs. Isn't public money used in here?
    as per my understanding,
    -point 3 ie sec 46, excluded suppliers during the parliamentary debate, now only the operators are liable as per the act.
    -section 35 says about nuclear damage claims commission to be set up and will have sole jurisdiction over it..so the question of tort law for compensation doesn't arise.
    -there is no such unlimited liability in the act.
    -N-risk fund will have both public as well as private players including international insurance cos.
    Our survival instinct is our single greatest source of inspiration. - Dr. Mann
Sign In or Join to comment.

Courses by ForumIAS for CSE
ForumIAS is trusted by over 10,000+ students for their Prelims, Mains and Interview Preparation and we currently run several assistance programs to help students from Civil Services prelims preparation to rank upgradation to IAS. You can enroll for these programs by visiting http://blog.forumias.com/courses

Welcome!

We are a secret self-moderated community for Civil Services preparation. Feel free to join, start a discussion, answer a question or just to say Thank you.

Just dont spread the word ;)

Sign in or join with Facebook or Google

Subscribe to ForumIAS Blog