Limiting nuclear liability may affect safety standards, Finance Ministry said

Updated - November 17, 2021 07:05 am IST

Published - March 05, 2010 12:23 am IST - New Delhi

Questioning the logic of limiting the liability of private companies in the nuclear field, the Finance Ministry suggested that a “formula-based limitation be considered which matches the liability regime for the operator to the types of accidents that may occur so as to incentivise adherence to the higher safety standards, limit negligence and encourage the practice of the highest international standards while providing reasonable and scientifically determined cover by the Central government.”

The Ministry requested the Department of Atomic Energy (DAE) to revise this aspect of the law so as to “limit the government's liability to a reasonable, justifiable, appropriate and methodically determined level and not to fix it to an arbitrary, predetermined figure.”

In its answers to the objections and suggestions of both the Ministry of Environment and Forests (MoEF) and the Ministry of Finance, the DAE cited the conformity of the draft nuclear liability law with the provisions of the Convention on Supplementary Compensation (CSC).

The DAE said it tried to strike a balance between promoting the nuclear industry, reducing the burden of the government and facilitating speedy compensation. It also pointed out that “presently, liability is, in effect, 100 per cent the responsibility of government. With this law, the burden will be shared by fixing responsibility on the operator to the extent of Rs. 500 crore.”

While the government is today fully liable for nuclear accidents since all atomic power plants are in the public sector, the DAE's explanation sidesteps the Finance Ministry's objection to subsiding private companies in the event of an accident.

The draft Bill was referred to the MoEF, the Ministry of External Affairs, the Ministry of Finance, the Ministry of Home Affairs and the Law Ministry. The Cabinet note, accessed by this newspaper, is silent about any consultation with the Ministry of Health, a curious omission given the effect of any nuclear accident on the health of people.

Though the law has acquired urgency for the government because of a commitment it made to Washington, the government has been working on the Bill for more than a decade.

Shortly after the Kudankulam project began in 2000, the DAE set up a two-man committee consisting of legal scholar V.B. Coutinho and nuclear scientist Rajaraman to study the legislative framework on nuclear liability of different countries. The committee produced a report soon thereafter, recommending India's accession to the CSC and drafting a broad nuclear liability law for the country.

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