N-liability bill capped at Rs 300 crore

The proposed bill on nuclear civil liablity—very high on the US priority list with India—to cover accidents in nuclear installations will limit monetary accountability of the operator to Rs 300 crore, while damages in excess will be borne by the Indian government. The limited liability clause could bring cheer to multinationals who are looking at billions of dollars worth of business in India. Fixing the liability on operators is important to US firms who are looking to supply nuclear reactors at Andhra Pradesh and Gujarat as otherwise they cannot avail of insurance. With operators, not suppliers, responsible for liability commitments, US firms can go ahead with their business contracts. The government had deflected US pressure earlier this year on the plea that polls are round the corner. Now while a draft bill is ready, it seems it will be tabled in the winter session. The US was keen as Russia and France are already ahead with projects lined up in India. The proposed bill, besides limiting the liability of the operator, gives flexibility to the central government to decrease the compensation amount on the operator. But in what could be of significance, the bill states that in each case where the government decides to decrease the liability, it “shall not be less than Rs 100 crore”. The amount of liability shall not include any interest or cost of proceedings. The bill debars civil courts from entertaining any suit or proceedings in respect of any matter which the claims commissioner is empowered to adjudicate. It says, “No injunction shall be granted by any court or other authority in respect of any action taken in pursuance of this Act.” The setting up of a six-member nuclear damage commission has been proposed to look into the claims. The chairperson and members of the commission shall be appointed by the central government on the recommendation of a three-member committee headed by the cabinet secretary and having secretaries from the department of atomic energy and the ministry of law as the other two members. The chairperson of the commission will be a person who will be qualified to be an HC judge. A special mention has been made of ensuring that the project is insured for financial security before it is started. “The operator shall, before he begins operation, take out insurance policy or other financial security covering his liability,” it states. An operator has been defined in the bill as the person designated as the operator of that installation. It also explains that several nuclear installations of one operator which are located at the same site shall be considered as a single installation.

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