Draft Nuclear Liability Bill A Point of View M. Rajaram 08/05/10
Agenda <ul><li>Context to Nuclear Liability Issue </li></ul><ul><li>Do we need a Nuclear Liability Act? </li></ul><ul><li>...
Context to Nuclear Liability <ul><li>The Energy Need </li></ul><ul><li>Private Participation to boost civilian nuclear ene...
Do We need a Nuclear Liability Act? <ul><li>India does not have any Act to cater to this area </li></ul><ul><ul><li>NPCIL ...
Do We need a Nuclear Liability Act? <ul><li>Liability Trends </li></ul><ul><ul><li>Operator Liability Vs Supplier Liabilit...
The Proposed Bill – The Civil Liability for Nuclear Damage Bill 2010 <ul><li>Currently Domestic Framework is regulated by ...
Salient Features of the Bill <ul><li>It extends to the whole of India. </li></ul><ul><li>It also applies to nuclear damage...
Salient Features of the Bill – The Proposed Limits of Liability <ul><li>AERB will be the sole authority to notify a Nuclea...
Salient Features of the Bill – The Proposed Limits of Liability <ul><li>The Central Government shall be liable for nuclear...
Salient Features of the Bill – Claims Commissioner & NDCC <ul><li>Bill provides for the appointment of a Claims Commission...
Salient Features of the Bill – Offences & Penalties <ul><li>Provision for offences and penalities for violating the provis...
Key Issues <ul><li>Jurisdiction </li></ul><ul><ul><li>Extent of Jurisdiction </li></ul></ul><ul><ul><li>Control of the Jur...
Key Issues – How does the proposed Bill address them <ul><li>Jurisdiction </li></ul><ul><ul><li>Extent of Jurisdiction –  ...
What does the International Convention say on Right of Recourse <ul><li>Article IX Rights of Recourse </li></ul><ul><li>1....
Some Observations & Conclusions <ul><li>There is a strong case for such an Act from all perspectives </li></ul><ul><li>The...
Some Observations & Conclusions <ul><li>The Adequacy of the Process is there but there is no judicial intervention on the ...
Some Observations & Conclusions <ul><li>Finally, it all depends not just on an enabling provision or Act, but the politica...
<ul><li>Thank You! </li></ul>
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Nuclear liability bill

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Nuclear liability bill

  1. 1. Draft Nuclear Liability Bill A Point of View M. Rajaram 08/05/10
  2. 2. Agenda <ul><li>Context to Nuclear Liability Issue </li></ul><ul><li>Do we need a Nuclear Liability Act? </li></ul><ul><li>The Proposed Bill – Salient Features </li></ul><ul><li>The Key Issues and how does the proposed bill address them? </li></ul><ul><li>Some Observations & Conclusions </li></ul>
  3. 3. Context to Nuclear Liability <ul><li>The Energy Need </li></ul><ul><li>Private Participation to boost civilian nuclear energy </li></ul><ul><li>The need for a enabling framework </li></ul><ul><li>The need for a Liability Management </li></ul><ul><ul><li>Who is Liable? For What? And to what extent? </li></ul></ul><ul><ul><li>How much is the Liability? </li></ul></ul><ul><li>International Arrangements on Nuclear Liability </li></ul><ul><ul><li>Paris Convention </li></ul></ul><ul><ul><li>Vienna Convention </li></ul></ul><ul><ul><li>Supplementary Convention on Nuclear Damage </li></ul></ul>
  4. 4. Do We need a Nuclear Liability Act? <ul><li>India does not have any Act to cater to this area </li></ul><ul><ul><li>NPCIL is the sole Operator </li></ul></ul><ul><ul><li>AERB is the sole Controller and Regulator </li></ul></ul><ul><ul><li>Liability rests with GOI solely and completely </li></ul></ul><ul><li>India is not a signatory to any of the International Conventions on this regard </li></ul><ul><li>The Objective of the GOI is to allow private participation in Nuclear Power Generation to meet demand – then who should be liable and to what extent? </li></ul><ul><li>The crisis on hand </li></ul><ul><ul><li>Lack of Uranium Supplies and Reserves in India to meet demand </li></ul></ul><ul><ul><li>The time lag to perfect the three stage development and mastering of Thorium Based Nuclear cycle </li></ul></ul><ul><ul><li>The access to technology – Enrichment, Reactor Design and Safety Tech </li></ul></ul><ul><li>India is already a proven technology owner of the entire Nuclear cycle and will be in a position to participate in its own right in the international markets </li></ul>
  5. 5. Do We need a Nuclear Liability Act? <ul><li>Liability Trends </li></ul><ul><ul><li>Operator Liability Vs Supplier Liability </li></ul></ul><ul><li>Differing World Standards on exposure & the International Response </li></ul><ul><ul><li>Liability Dimensions – Liability for Damage & Punitive Damage </li></ul></ul><ul><ul><li>Jurisdiction over Liability </li></ul></ul><ul><li>Impact on Costs and Viability of Nuclear Energy </li></ul><ul><li>The need for equitable, quick and effective and comprehensive compensation </li></ul><ul><li>The need for a Liability Cap </li></ul><ul><ul><li>Open ended Liability Vs Capped Liability </li></ul></ul>
  6. 6. The Proposed Bill – The Civil Liability for Nuclear Damage Bill 2010 <ul><li>Currently Domestic Framework is regulated by Atomic Energy Act 1962 </li></ul><ul><ul><li>No Provision in the said Act to cover for Nuclear Liability </li></ul></ul><ul><li>The Proposed Bill is to be in Line with the Convention on Supplementary Compensation for Nuclear Damages to the Vienna Convention of 1997 </li></ul><ul><ul><li>India is not a signatory to any convention related to Nuclear Liability </li></ul></ul><ul><li>Proposed Bill is necessary to address the issue of Nuclear Liability </li></ul><ul><ul><li>With regard to transport of Nuclear Material </li></ul></ul><ul><ul><li>With regard to Trans-Boundary Nuclear Liabilities </li></ul></ul><ul><li>It is important to read the Bill in conjunction with the Supplementary Convention to Vienna Convention </li></ul>
  7. 7. Salient Features of the Bill <ul><li>It extends to the whole of India. </li></ul><ul><li>It also applies to nuclear damage suffered— </li></ul><ul><ul><li>(a) in or over the maritime areas beyond the territorial waters of India; </li></ul></ul><ul><ul><li>(b) in or over the exclusive economic zone of India as referred to in section 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976; </li></ul></ul><ul><ul><li>(c) on board or by a ship registered in India under section 22 of the Merchant Shipping Act, 1958 or under any other law for the time being in force; </li></ul></ul><ul><ul><li>(d) on board or by an aircraft registered in India under clause (d) of sub-section(2) of section 5 of the Aircraft Act, 1934 or under any other law for the time being in force; </li></ul></ul><ul><ul><li>(e) on or by an artificial island, installation or structure under the jurisdiction ofIndia. </li></ul></ul>
  8. 8. Salient Features of the Bill – The Proposed Limits of Liability <ul><li>AERB will be the sole authority to notify a Nuclear Incident – to be done within 15 days </li></ul><ul><li>The maximum amount of liability in respect of each nuclear incident shall be the rupee equivalent of three hundred million Special Drawing Rights. </li></ul><ul><li>The liability of an operator for each nuclear incident shall be rupees five hundred crores (Section 6) </li></ul><ul><ul><li>Provided that the Central Government may, having regard to the extent of risk involved in a nuclear installation, by notification, either increase or decrease the amount of liability of the operator: </li></ul></ul><ul><ul><li>Provided further that where the amount of liability is decreased, it shall not be less than rupees one hundred crore </li></ul></ul><ul><ul><li>Provided also that the amount of liability shall not include any interest or cost of proceedings. </li></ul></ul>
  9. 9. Salient Features of the Bill – The Proposed Limits of Liability <ul><li>The Central Government shall be liable for nuclear damage in respect of a nuclear incident, — </li></ul><ul><ul><li>(a) where the liability exceeds the amount of liability of an operator specified under sub-section (2) of section 6, to the extent such liability exceeds such liability of the operator; </li></ul></ul><ul><ul><li>(b) occurring in a nuclear installation owned by it; and </li></ul></ul><ul><ul><li>(c) occurring on account of causes specified in clauses (i) and (ii) of subsection (1) of section 5. </li></ul></ul>
  10. 10. Salient Features of the Bill – Claims Commissioner & NDCC <ul><li>Bill provides for the appointment of a Claims Commissioner with due powers </li></ul><ul><ul><li>Also details the Committee that will appoint, the powers and for salaries and officials for the office </li></ul></ul><ul><li>Bill also provides for the setting up of a Nuclear Damage Claims Commission </li></ul><ul><ul><li>Where the Central Government, having regard to the injury or damage caused by a nuclear incident, is of the opinion that— </li></ul></ul><ul><ul><li>(a) the amount of compensation may exceed the limit specified under sub-section (2) of section 6; or </li></ul></ul><ul><ul><li>(b) it is expedient and necessary that claims for such damage be adjudicated by the Commission instead of Claims Commissioner; or </li></ul></ul><ul><ul><li>(c) it is necessary in the public interest to provide special measures for speedy adjudication of claims for compensation, </li></ul></ul><ul><ul><li>the Central Government may, by notification, establish a Nuclear Damage Claims Commission, for the purposes of this Act. </li></ul></ul><ul><li>No Civil Court can pass any order or adjudicate on the proceedings of the Claims Commissioner or the Commission </li></ul>
  11. 11. Salient Features of the Bill – Offences & Penalties <ul><li>Provision for offences and penalities for violating the provisions of this Act is proposed </li></ul><ul><li>Whoever— </li></ul><ul><ul><li>(a) contravenes any rule made or any direction issued under this Act; or </li></ul></ul><ul><ul><li>(b) fails to comply with the provisions of section 8; or </li></ul></ul><ul><ul><li>(c) fails to deposit the amount under section 36, </li></ul></ul><ul><li>shall be punishable with imprisonment for a term which may extend to five years or with fine or with both. </li></ul><ul><li>Whoever fails to comply with any direction issued under section 43 or obstructs any authority or person in the exercise of his powers under this Act shall be punishable with imprisonment for a term which may extend to one year or with fine or with both. </li></ul><ul><li>Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was directly in charge of , and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: </li></ul><ul><li>Provided that nothing contained in this sub-section shall render any such person liable to any punishment under this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. </li></ul><ul><li>Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. </li></ul>
  12. 12. Key Issues <ul><li>Jurisdiction </li></ul><ul><ul><li>Extent of Jurisdiction </li></ul></ul><ul><ul><li>Control of the Jurisdiction </li></ul></ul><ul><li>Extent of Liability </li></ul><ul><ul><li>Adequacy of Damages </li></ul></ul><ul><ul><li>Adequacy of Coverage </li></ul></ul><ul><li>Claims Process </li></ul><ul><ul><li>Empowerment </li></ul></ul><ul><ul><li>Ease of Claims Process to ensure coverage and time bound redressal </li></ul></ul><ul><li>Offences & Penalties </li></ul><ul><ul><li>Adequacy of Penalties for non-compliance </li></ul></ul><ul><li>Accountability </li></ul><ul><li>Right to Recourse </li></ul>
  13. 13. Key Issues – How does the proposed Bill address them <ul><li>Jurisdiction </li></ul><ul><ul><li>Extent of Jurisdiction – Only to the Operator </li></ul></ul><ul><ul><li>Control of the Jurisdiction – Remains within Indian perview but not subject to judicial redressal or review from Judiciary – compartmentalised to the competent authority set up under the Act </li></ul></ul><ul><li>Extent of Liability </li></ul><ul><ul><li>Adequacy of Damages – Aligning to the International Obligations under the Supplementary Compensation Convention </li></ul></ul><ul><ul><li>Adequacy of Coverage - Debatable </li></ul></ul><ul><li>Claims Process </li></ul><ul><ul><li>Empowerment – Adequately Empowered </li></ul></ul><ul><ul><li>Ease of Claims Process to ensure coverage and time bound redressal – On paper, the proposed Act calls for this </li></ul></ul><ul><li>Offences & Penalties </li></ul><ul><ul><li>Adequacy of Penalties for non-compliance - Debatable </li></ul></ul><ul><ul><li>Accountability - Debatable </li></ul></ul><ul><li>Right to Recourse – Absolutely Silent and this is crucial </li></ul>
  14. 14. What does the International Convention say on Right of Recourse <ul><li>Article IX Rights of Recourse </li></ul><ul><li>1.Each Contracting Party shall enact legislation in order to enable both the Contracting Party in whose territory the nuclear installation of the operator liable is situated and the other Contracting Parties who have paid contributions referred to in Article III.1(b), to benefit from the operator's right of recourse to the extent that he has such a right under either one of the Conventions referred to in Article I or national legislation mentioned in Article II.1(b) and to the extent that contributions have been made by any of the Contracting Parties. </li></ul><ul><li>2.The legislation of the Contracting Party in whose territory the nuclear installation of the operator liable is situated may provide for the recovery of public funds made available under this Convention from such operator if the damage results from fault on his part. </li></ul><ul><li>3.The Contracting Party whose courts have jurisdiction may exercise the rights of recourse provided for in paragraphs 1 and 2 on behalf of the other Contracting Parties which have contributed. </li></ul>
  15. 15. Some Observations & Conclusions <ul><li>There is a strong case for such an Act from all perspectives </li></ul><ul><li>The Indian Bill is to align it with the international arrangement and hence must be read in conjunction with the Supplementary Compensation Convention of 1997 </li></ul><ul><ul><li>It should be noted that Supplementary Compensation Convention has not come into force. </li></ul></ul><ul><ul><ul><li>US has already ratified it along with Morocco, Argentina and Romania (thirteen other countries have signed but not ratified) </li></ul></ul></ul><ul><ul><ul><li>None of the other P5 countries have signed up </li></ul></ul></ul><ul><ul><ul><li>For it to come to force at least 5 countries that have at least 400000 units of nuclear energy must sign up </li></ul></ul></ul><ul><ul><li>The compensation levels have been designed on a multilateral basis and so cannot be changed easily </li></ul></ul><ul><ul><ul><li>Also provides for two tier system with a depositary – so the funds will be there but access will be through the international arrangements </li></ul></ul></ul>
  16. 16. Some Observations & Conclusions <ul><li>The Adequacy of the Process is there but there is no judicial intervention on the competent body set up under the Act </li></ul><ul><li>A lot will depend on the international bi-lateral treaty conditions as they are a pre-requisite and will govern as per the convention </li></ul><ul><li>Right to Recourse – is a key element that is missing a mention even! </li></ul><ul><li>The whole Act has to be understood in an international geo-political context as well </li></ul><ul><li>We need to enable the capability to assert sovereign decision making and seeking of additional damages should the situation demand despite international obligations – A fine balancing Act </li></ul><ul><ul><li>E.g. how the US does these things </li></ul></ul>
  17. 17. Some Observations & Conclusions <ul><li>Finally, it all depends not just on an enabling provision or Act, but the political willingness to enforce the same </li></ul><ul><li>The debate has to be on these substantive issues – Not likely to happen </li></ul><ul><ul><li>GOI seeming willingness to rush through things without proper debate and commit to surrendering or diluting sovereign control over crucial issues </li></ul></ul><ul><ul><li>Opposition to the bill is politicised – Some opponents to the bill are motivated by ideological blinkers or other foreign considerations </li></ul></ul><ul><ul><li>Lack of in-depth understanding of the issue involved. </li></ul></ul>
  18. 18. <ul><li>Thank You! </li></ul>
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