19.11.11

N-Liability Bill

Having notified the regulations on the Civil Nuclear Liability Act, India says it is now up to foreign firms to decide whether they want to engage in the Indian nuclear industry. The government on Wednesday put out regulations that place limits on liability of suppliers to nuclear power plants. These include putting a floor and ceiling on the amount of liability for the companies. It defines the time period for the liability — the duration of the initial licence or the “product liability period” which roughly translates to the warranty period for the equipment being supplied. The regulations clarify the Centre’s position on clause 17 (a) of the nuclear damage Act passed in 2010. The clause, as interpreted in the text of the law, assumes endless liabilities for companies that would supply equipment and services to nuclear power plants. However, US firms have expressed reservations on Article 46 of the law, which essentially says that other Indian laws would also apply. Government sources said in the post-Fukushima world, it would be unreasonable to expect that liabilities would not apply, because potential victims would be first on everybody’s minds. “It’s not just Fukushima. We cannot say that Indians cannot access their own laws for relief and compensation, particularly the law of torts,” official sources said. India now has to ratify the Convention on Supplementary Compensation (CSC), a commitment made to US president Barack Obama last year. Prime Minister Manmohan Singh had said India would ratify it by the end of 2011. The Indian government has circumscribed a contentious supplier liability clause in the Civil Nuclear Liability Act, walking a tightrope between the language of the act itself and the concerns of foreign and domestic nuclear suppliers. The rules governing liability of suppliers have been clarified in a way that is designed to reassure suppliers that they would not be liable endlessly on nuclear supplies. The regulations, which were quietly put up on the NPCIL website on Wednesday, have been a long time coming, keeping Indian and foreign suppliers on tenterhooks for almost a year. The trouble was, India’s liability law, which seemed to put unlimited liability on suppliers, could have made the law non-compliant with the CSC once India ratified the convention, though Indian officials deny this. India signed the CSC in November 2010, and had committed to ratify it by end 2011. With Singh scheduled to meet Obama in Bali on Friday, this issue could have been embarrassing for the government. The rules place limits on the floor and ceiling of the amount of money the operator can claim from the supplier. It places a time limit on the duration of liability for the supplier.

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