The Confederation of Indian Industry wants clarity in some clauses of the Civil Liability for Nuclear Damage Act, 2011.
Welcoming the notification of implementation rules, the CII said a framework is in place for the first time, instituting strict liability for the operator who has to pay damages of up to Rs 1,500 crore. A balanced legislation would send the right signals to investors and suppliers and expedite the country’s nuclear power programme, it said.
“Section 46 states nothing in the civil liability law will prevent the operation of other laws in force in the country and makes clear that criminal liability in case of an accident remains, as indeed do tort claims. However, clarification is required to ensure that this provision does not alter the exclusive channeling of any claims for nuclear damage on a strict liability basis only to the operator who owns the plant,” it said.
In Section 17, there are issues related to the application of “operator’s right of recourse”. Currently, the limit to liability is applicable only to 17(a), which states that operators have a right to recourse if the right is mentioned in the contract. There is no clarity on whether the limits could also be extended to claims by an operator under clause 17 (b), according to which an operator will have a right to recourse if the nuclear incident has resulted due to an act of supplier or his employee — which includes supply of equipment or material with patent or latent defects or sub-standard services — or 17 (c), which applies in case a nuclear incident has resulted from an act of commission or omission of an individual done with the intent to cause nuclear damage.
As a result, according to CII, there could still be an overlap on claims arising out of supply of equipment or material with patent or latent defects or substandard services. Especially, as it is open to interpretation that the causes of action under all the three clauses of section 17 are mutually exclusive. Therefore, it is critical that the rules or an amendment to the Act expressly set out the legislative intent that the limit of a supplier’s liability will be as defined under clause 17(a).
Specific customised insurance solutions for suppliers need to be developed. In India, insurance providers do not offer any policy under which suppliers to a nuclear power plant can cover their risk.
The operator, who is the owner of the plant, plays a crucial role in selection of the right set of suppliers. The law should also be consistent with the convention on supplementary compensation to do business with global players, CII said.
