India ratifies a controversial international law that allows nuclear suppliers to escape liability
Indian Government today ratified the international convention on supplementary compensation (CSC). This convention essentially puts the absolute liability on the operator as well as allows access to additional fund for clean-up and compensation whereas it takes away responsibility of private nuclear reactor suppliers such as Rosatom, GE, Westinghouse, AREVA/EDF.
The CSC was a U.S. nuclear lobby led initiative with the sole purpose to facilitate business around the world, to maximize profit and dump liability on the shoulders of that country.
The condition for India to ratify CSC was laid down as part of Indo-US nuclear deal. A similar condition was laid down for Japan. To access help in Fukushima clean up, Japan was asked to sign and ratify CSC. For the convention to come into force it needed a cumulative of 400GW of installed nuclear capacity, with Japan signing and ratifying CSC, this condition has been met and CSC is now in force.
In somewhat contrast to the CSC, India’s domestic nuclear liability regime allows operators a right to recourse from suppliers if the cause of the nuclear accident is because of a fault in reactor design or equipments.
What this essentially means that if there is an accident in India, and if the fault is of American, French of Russian nuclear suppliers, the cost of which will have to be ultimately born by those nuclear suppliers. India follows the polluter pays principle whereas the CSC does not. There clearly is a conflict between India’s domestic nuclear liability regime vs the CSC.
How is this conflict resolved?
Interestingly, in India, the Indian rules will prevail over the CSC. In 2011, Greenpeace had queried former Attorney General of India, Soli Sorabjee on his views in regards to the nuclear liability Act, its Rules and whether they are in conflict with the Convention on Supplementary Compensation. Following is an extract from his opinion:
“Article 10 of the annex to the CSC provides for right to recourse only for contingencies mentioned in (a) and (b). Under Section 17 (b) of the said Act the operators shall have right to recourse also where the nuclear incident has resulted as a consequence of an act of supplier or his employees, which includes supply of equipment or material with patent or latent defects or substandard services. This provision is totally omitted in the CSC and to that extent it is clearly in conflict with the said Act.
I shall now answer the queries.
Q.1 Whether the Convention for Supplementary Compensation (in short the CSC) to be ratified by India is contrary to the The Civil Liability for Nuclear Damage Act, 2010 (in short the Nuclear Liability Act)? In case it is contrary to The Civil Liability for Nuclear Damage Act, 2010, whether the CSC or the Act would have the binding effect in case of any conflict between the two?
Ans. The annex in the Article 10 of the CSC is repugnant to section 17(b) of the Nuclear Liability Act. National law viz. the Nuclear Liability Act would prevail over the CSC and have overriding effect even if India ratifies the CSC.
Q.2 Whether the Rules notified on 11 November, 2011 under the Nuclear Liability Act, 2010 are repugnant to the parent Act?
Ans. Yes, for the reasons set out in the opinion.
Q.3 Whether the Rules should also provide that the contract between the Operator and the Supplier would be subject to the Nuclear Liability Act, 2010?
Ans. This is not strictly necessary because the Nuclear Liability Act which is the municipal law of India is binding and will prevail over the CSC. However it would be desirable if the same is done by way of abundant caution.”
Regardless of whether India ratifies the CSC, the India’s domestic nuclear liability regime and its supplier liability clause will prevail over the CSC.
Foreign companies along with its lobbyist in India have for long asked India to do away with supplier liability and follow the practice of absolute operator liability. This is convenient for the private industry to ask for so long as the operator is a government owned entity. Of course, this argument falls flat when nuclear operators are private and non-governmental players such as the way it is in the U.S.
Another interesting and less publicised fact to note is that while the U.S. nuclear suppliers such as Westinghouse and GE have always tried to dodge supplier liability in India, they may soon have to cough up billions in retrospective application once U.S. Government introduces supplier liability by way of notice of proposed rulemaking (NOPR).
The section 934 of the U.S. Energy Independence and Security Act of 2007 (EISA) gives the authority to the secretary of Energy to issue regulations of establishing a retrospective risk pooling program wherein the funds are to be collected from private nuclear suppliers such as AREVA, Westinghouse as well as GE amongst others.
This is what hypocrisy looks like.
Hozefa Merchant works for Greenpeace as a Senior Nuclear Campaigner.