Mohit who heads the litigation and arbitration practice at PXV, was interviewed by Bar and Bench in relation to the Japan Nuclear Disaster and its possible implications on nuclear liability issues in India. Mohit is the Treasurer of the Nuclear Law Association, India, which is a part of the International Nuclear Law Association.
The full article is extracted below.
Japan Disaster revives debate on Nuclear liability and safeguards: Expert Views,
Bar & Bench News Network, Apr 15, 2011,
Are Indian nuclear power plants at risk? In the light of recent nuclear tragedy in Japan, India needs to re-examine the ability of its nuclear power plants to withstand disasters and its policies to handle their repercussions.
As India is moving to a new nuclear regime involving the private sector, there is reluctance by the nuclear establishments to share information with the public on plant safety provisions. The Atomic Energy Commission (AEC) has always kept it very secretive. Now is the time to wake up and demand transparency. Looking at the fact that Japan is a technologically sophisticated country, which had built its nuclear power plants to withstand exigencies and calamities, is still finding it difficult to contain the disaster. The question that arises here – Is India prepared to deal with high-risk nuclear technologies?
Minister for Environment and Forests, Jairam Ramesh speaking with the media on this issue, said “India needs to learn appropriate lessons from the nuclear disaster in Japan and take additional safeguards, but the country cannot abandon its nuclear energy programme”.
The whole nuclear saga began in October 2008, when India signed the controversial and much criticised 1-2-3 deal with the United States. This deal opened a $250 billion nuclear reactor market for India and today foreign companies are waiting for their contracts. India has recently signed a deal with French company Areva which will add a 9,000MW plant at Jaitapur in the Konkan region in Maharashtra. There were protests which were organised in Jaitapur in Maharashtra after adverse effect of nuclear plants was seen on the ecology. Even if one ignores the Jaitapur protests, what comes as a surprise is how our Government seems to have forgotten the biggest disaster of all time in Indian history. People have still not come out of the Bhopal Gas tragedy. The Three Mile and Chernobyl disasters during the eighties are testimonies to catastrophes that can be caused by such plants.
The Parliament after much debate and protest had passed the Civil Liability for Nuclear Damage Act, 2010 (Act) as part of the long-drawn process of implementing the US-India nuclear deal. The main aim of the Act is to attract international companies involved in nuclear commerce and to legally and financially bind the ‘operator’ and the Government to provide relief to the affected population in the case of a nuclear accident.
The Act has been criticized by experts on several grounds. It is argued that the Act has not integrated a safety mechanism to deal with disasters such as the current disaster in Japan. Also, the Act leaves out liability for the operator in case of “grave natural disasters”. The Act has provided a cap on the liability of the operator to Rs. 1,500 crore. The liability of suppliers is limited and Japan disaster has brought all these concerns in the Act in open. The economic damages at Fukushima will in all likelihood exceeded the maximum liability set out under the Act. Under the Act, Nuclear Power Corporation of India Ltd., the state-run operator of nuclear facilities, will pay out the maximum permissible compensation and then seek damages from suppliers if their equipment was found to be defective. The U.S. government has been demanding that supplier liability be reduced or eliminated. This is mainly to accommodate U.S. nuclear equipment manufacturers like General Electric and Westinghouse.
All in all, the Act seems to favour the nuclear industry.
The Fukushima disaster has raised many issues related to building of nuclear power plants in India.
We, at Bar & Bench discussed these issues with a diverse group of experts.
To get the view of nuclear and energy campaigner on nuclear liability and safeguards, Bar & Bench spoke to Karuna Raina of Greenpeace.
Bar & Bench also spoke to Mohit Abraham Partner at PXV Law Partners and Treasurer at Nuclear Law Association and Professor M.P. Ram Mohan Fellow at The Energy and Resources Institute (TERI) and Chairman of Nuclear Law Association, on the nuclear liability and safeguards.
Bar & Bench: Looking at the crisis in Japan, do you think India’s nuclear power plants can survive natural disasters?
Karuna Raina: There are two dimensions to this question. One is about the physical strength of the reactors to withstand something like this and the second is the disaster preparedness to cater to something like this. Unfortunately, I am sceptical on both. At Kaiga, the containment dome, which is the final line of defense, collapsed on its own following an accident, probably due to defective design and / or substandard materials used in construction. Thus one cannot have too much faith in the integrity of atomic energy structures.
In terms of disaster preparedness, the lack of disaster preparedness with regard to nuclear risk became evident after, radioactive cobalt was sold in a local scrap market in New Delhi. The various authorities were buck passing. There was no clear line of control and chain of responsibility. India definitely is not prepared to handle something like Fukushima.
Bar & Bench: Civil Liability for Nuclear Damage Act 2010 initially provided a cap of Rs. 500 crore on the liability of the operator in case of a nuclear accident. However, later same was amended and increased to Rs. 1,500 crore subject to the discretion of the claims commissioner. Your views on the same.
Mohit Abraham: The Civil Liability for Nuclear Damage Act 2010 was notified as an Act in the gazette of India on September 22, 2010 (Act). Under the Act, the liability of the operator has been increased from Rs. 500 crore, which was provided in the earlier bill, and has been categorized as follows:
- ·In respect of nuclear reactors having thermal power equal to or above ten mega watts – Rs. 1,500 crore;
- In respect of spent fuel reprocessing plants – Rs. 200 crore
- In respect of nuclear reactors having thermal power below ten mega watt, fuel cycle facilities other than spent fuel reprocessing plants and transportation of nuclear materials – Rs. 100 crore.
Further, in terms of Section 6 of the Act, the maximum amount of liability in respect of each nuclear incident is the rupee equivalent of 300 Million Special Drawing Rights (approximately $ 462 million). The Central Government has the discretion to take additional measures where the compensation awarded under the Act exceeds this limit. The amount of 300 million Special Drawing Rights appears to have been taken keeping in mind India’s obligations under the Convention on Supplementary Compensation for Nuclear Damage of 1997 (the Convention is yet to come into force).
It may also be noted that in terms of the Act, in cases the liability exceeds the amount of liability of an operator, the Central Government would be liable for the remainder of such liability. Another feature of the Act is that where a nuclear damage occurs owing to a grave natural disaster, for e.g. the one in Japan, the operator would not be liable and any such liability would be on the account of the Central Government.
The liability caps in the present Act are much below internationally recognized standards. Many countries that are major producers of nuclear energy do not have a cap on the overall liability for nuclear damage. Further, the cap on liability for nuclear damage on the operators is significantly higher in other countries, than what is prescribed for in the Act. In my view, the overall liability of the Central Government capped at 300 million Special Drawing Rights is also extremely low. That this figure is extremely low becomes evident if we take an example close to home – Union Carbide had to provide a compensation of approximately $ 470 Million in the context of the Bhopal Gas tragedy.
There is another reason why the amount of 300 million Special Drawing Rights should be urgently revised. India is signatory to the aforesaid Convention of Supplementary Compensation for Nuclear Damage. While the Convention is yet to come into force, in terms of the same, the other contracting parties would agree to make available public funds, where the liability of another contracting party exceeds 300 million Special Drawing Rights. Therefore, limiting the liability under the Act to 300 million Special Drawing Rights may not permit India to obtain this additional benefit under the Convention as and when the same comes into force.
In such a scenario, the capping of the liability of the operators at low amounts – a maximum of Rs. 1,500 crore – is not an encouraging step. After the operators pay the compensation for nuclear damage, the Act provides for the operators to have the right of recourse where such a right is expressly provided for in a contract in writing (a clause which the international suppliers and other countries are not pleased with). This means that the operators may recover the amount from the manufacturers and suppliers, who in all likelihood will be non-Indian. However, since the liability of the operator itself is capped to a maximum of Rs. 1,500 crore, it appears that any subsequent claim by the operators against the manufacturers and suppliers will also be confined to this sum.
Having said this, a unique feature of the Act, which is absent in similar legislations of other countries, is contained in Section 46. Section 46 states that the provisions of the Act are in addition to and not in derogation of other laws. Incidentally, this very clause has also emerged as a point of discomfort for international suppliers and other countries. In terms of this section, the provisions of other environmental legislations as well as principles of tort law would be applicable in addition to the provisions under the Act. A charitable interpretation of this provision would mean that even if the liability arising out of a nuclear incident is over and above the caps stipulated in the Act, this can be covered under the provisions of other laws. While such a possibility does exist, I feel that when it comes to claiming nuclear damages, it would be better if the Act functions as a “single window”. A system where compensation would be awarded under this Act and subsequently, separate proceedings have to be initiated for claiming additional compensation is best avoided.
Therefore, to make the Act truly effective and protective of the rights of the people, I am of the view that the liability for the operators must be significantly increased. An “economic channeling” mechanism such as that provided in the American Price-Anderson Act may be considered where the operators are required to obtain the maximum amount of insurance against nuclear incidents available in the insurance market (as opposed to the present system of obtaining insurance corresponding to their liability under the Act) and any liabilities arising over and above this amount must be contributed from a fund set up under the Act itself. The contributories to the fund would be the operators, and as and when they enter India – the foreign manufacturers and suppliers. Any amount over and above this may be contributed by the Central Government. The system should therefore be such that the taxpayer money is utilized only as the absolute last resort to resolve liabilities that arise out of a nuclear incident.
It is to be noted that the Act in its present form does vest with the Government the discretion to set up such a fund. This discretion must be utilized and should be done keeping in mind prior instances of public tragedies, for e.g. Chernobyl and Bhopal, and the liability limits must urgently be revised.
Karuna Raina: Civil Liability for Nuclear Damage Act 2010 has twin mandate: one to provide speedy compensation and second to provide assurance to nuclear industry that the risks will be capped and quantified and that nuclear remains profitable. And it will not be wrong to say that the government’s bias was towards industry. It was only with considerable pressure from legal luminaries, civil society and political parties that government yielded to pressure. To specifically answer your question, it would really depend on how independent the claims commissioner is allowed to act, which would depend on how keen government is to help people.
Ram Mohan: As we have seen from nuclear disasters at Chernobyl and Fukushima, or even industrial disasters such as Bhopal gas tragedy, Sandoz chemical spill – the accurate quantification of damages is practically impossible. Can any amount be considered as adequate compensation for accidents of such magnitude?
However, the concept of limited liability in respect to nuclear accidents is well accepted in international law. The Paris Convention, 1960 and Vienna Convention, 1963 provide for limited liability in amount and time. This has been incorporated in multiple national legislations around the world, with varying amounts, and sharing of responsibility between the government and the operator.
India is not a party to the above conventions; instead it adheres to the Convention on Supplementary Compensation for Nuclear Damage, 1997.
On a reading of the Civil Liability for Nuclear Damage Act 2010, and the position taken by the government during the parliamentary debates, it would incorrect to state that the liability is limited to Rs. 1500 crore.
The amount can be increased by a notification of the Central Government (Section 6 (2) proviso). However, any increment of the amount is subject to a ceiling of Rs 300 million Special Drawing Rights currently (1 SDR = approx $1.54 as of April 2010).
Notifications can provide for an increment of the ceiling as well (Section 6 (1)).
Further, Section 46 of the Act provides, that the provisions in the Act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator form any proceeding which might, apart from this Act, be instituted against such operator.
This provision is unique to the Indian national law and allows for redressal under both tort and criminal law. It is the Government of India’s position that the section allows for the fixation of liability through both tort and criminal action, in addition to any statutory claims.
Bar & Bench: Do you think the Act is in the interest of present and future generations?
Mohit Abraham: The Act seeks to quantify the liability of an operator of a nuclear facility. Further, it has been enacted to facilitate India becoming a party to the international nuclear liability regime.
Therefore, without dealing with the endless debate on the pro and cons of the use of nuclear energy per-se, I think that the Act is in the interest of the future generations as it would enable India to adequately harness nuclear energy. The intention behind the Act is certainly laudatory, however, as noted above, I feel the caps on liability must be increased and provisions for setting up of a fund must also be hastened.
In addition to this, I also feel that the discretion vested in the Claims Commissioner to decide on an award should be better streamlined. Presently, the Act does not provide for heads of compensation for making of an award, priority of claims, quantum for certain events, etc. For e.g., the Act, or subsequent Rules and notifications issued under the Act should provide for objective minimum amounts that must be paid in case of death, serious physical disability, economic loss etc. Basically, to support the no fault liability concept that permeates the Act, some kind of “minimum damages” on the happening of defined events, may also be considered. These steps would better streamline the discretion presently vested in the Claims Commissioner.
Karuna Raina: The Act can definitely become much stronger to address interest of present and future generations. We would like to see certain changes in the Act. We have recommended certain changes like the functions of regulatory bodies should be separated from those of other organization concerned with the promotion or utilization of nuclear energy and the operator of a nuclear installation should be liable for damage due to acts of terrorism and many more.
Ram Mohan: The law is an attempt at balancing the interest of society and business.
Bar & Bench: As you are aware, there is not much disclosure on nuclear establishment, projects and the safety measures undertaken. Do you think there needs to be more transparency and public awareness?
Mohit Abraham: Definitely. The Government should engage with the people directly and through civil society to increase awareness. Details of proposed projects, benefits, possible risks etc., should be adequately highlighted. This is the hallmark of any vibrant democracy. Of course, this can be done only subject to the concerns of national security.
It is also to be noted that the Nuclear Power Corporation of India Ltd., and the Bhabha Atomic Research Centre have now been brought within the fold of the Right to Information Act. These traditionally secretive organisations will take some time to attain the ideal levels of transparency – but it is only a matter of time and steps are being taken in the right direction.
Karuna Raina: The public has no access to the details of even the routine releases from nuclear power plants. Similarly regarding accidents, while the ministers claim India’s record of safety is ‘very high,’ no detailed information is available to the public so that it can form its own opinion. There is no competent independent agency in the country which can look into the safety records of the Department of Atomic Energy (DAE) and under the secrecy provisions of the Atomic Energy Act, 1962, the Government refuses to give the public access to critical information.
In other countries, public hearings are held before finalizing the most appropriate site among the different alternatives, for which environmental impact statements are prepared and circulated among people well in advance. Unfortunately the Atomic Energy Commission in India plays an apparently self-contradictory dual role, not only as the promoter of Atomic Energy, but also as its regulator. There by, it yields to expediency. In a participatory democracy, the people for whose benefit the energy is intended, must have a say in determining which alternate source of energy or which alternate location for a reactor, would be in the best interests of the nation.
Ram Mohan: India’s nuclear energy program unlike many other nuclear countries was initiated for peaceful uses of atomic energy. India could have been an excellent example of openness and transparent working in the nuclear industry. However, that has not been the case.
With the massive expansion of our nuclear energy program in place, it is imperative that public trust be gained by the government. The only way to do so is to make more transparent the working of the power plants and more importantly, its regulator – Atomic Energy Regulatory Board (AERB).
The Prime Minister has given an assurance that steps will be taken to make the AERB autonomous and independent.
Bar & Bench: Even today, when the Jaitapur plant in Maharashtra is in the midst of huge opposition from communities, there is a lot of reluctance to share information or to ensure that proper scrutiny of the plant and its safety provisions. Your views on Nuclear reactor planned in Jaitapur area which is in earthquake prone zone.
Mohit Abraham: I feel that the tragic events unfolding in Japan will raise sufficient alarm bells within government circles to revaluate the Jaitapur Nuclear Power Project. The recent events in Japan have also brought the Jaitapur plant and the issue of nuclear power into the pubic consciousness at a national level like never before. It is the duty of the government to share information with regard to the impact of the project and the possible hazards. The fears of the people should also be allayed and there must be public accountability when someone finally signs off on the project. Undoubtedly, proper scrutiny of the proposed site as well as the safety provisions and disaster management plans have to be in place, and I am positive that the government will go ahead with the project only after satisfying itself on all these counts.
Karuna Raina: The proposed site for the reactors and the realities of nuclear waste pose serious dangers for the local community.
Ratnagiri district (where Jaitapur is) has been classified as Zone IV, meaning it is prone to strong earthquakes with the possibility of one reaching above 6.5 on the Richter scale, which can cause buildings to collapse. No nuclear plant has ever been hit by an earthquake of this magnitude.
Over the past 20 years alone, there have been three earthquakes in Jaitapur exceeding 5 points on the Richter scale. In 2007, Japan’s Kashiwazaki-Kariwa nuclear power plant was near the epicentre of the strongest earthquake ever to hit a nuclear plant. The 6.4 earthquake damaged the plant and shut it down for almost two years.
Fukushima tragedy, clearly points out on what is wrong with building nuclear reactors on earthquake zones.
Ram Mohan: In the wake of nuclear accident in Japan, Department of Atomic Energy (DAE) has already announced safety review of the Jaitapur Nuclear Power Plant. The French technology which is been used in Jaitapur has its own fair share of technical controversy as well. In terms of public consultation of Jaitapur project, government must be fully committed to present all facts in a manner that is understandable to the people and take cognizance of their views.
Bar & Bench: It is not about being for or against nuclear power. It is well understood that nuclear energy is a potential source of energy across the world. The issue is what kind of safeguards should be built to protect people against high risks? Does the Act provide for proper safeguards?
Mohit Abraham: The Act does not seek to provide safeguards vis-à-vis a nuclear power plant but only deals with a situation where the nuclear damage has already taken place. The Act needs to be understood in light of its purpose which is twofold, firstly to provide a regime where by any damage arising out of or in connection with a nuclear installation is compensated by the person responsible for setting up the installation and secondly, to enable India to become a party to the international liability regime governing liability in cases of nuclear damage.
The safety requirements that an operator of a nuclear installation needs to comply with are provided for under the Atomic Energy Act, 1962 and the rules framed under it. Further, the Atomic Energy Regulatory Board issues directives at regular intervals that specify the compliance requirements of a nuclear installation.
It should also be noted that Indian civilian nuclear plants would also be subject to scrutiny by the International Atomic Energy Agency (IAEA) and its Department of Safeguards. Therefore, these plants will have to pass the scrutiny of the highest international standards.
In light of this regime, the need for the Act to specify any safeguards does not arise. Needless to add, the safeguards which are eventually put in place would have to measure up to the highest internationally recognized standards and should be in light of constant changes in technology as well as the environment.
Karuna Raina: Its not only the mandate of this Act alone to provide for nuclear safety. If you look at the policy and regulatory environment in India, it is not independent at all and that therefore creates not only trust deficit but also serious issues with safety of reactors in India. The government needs to make the sector transparent, revoke 1962 atomic energy Act, remove civilian sector from OS act and create a strong regulator. Also, emergency powers and draconian majors cannot be evoked if it’s about generating electricity and not making bombs. The present Act partially provided safeguards, however there need to be systemic changes in the nuclear sector to make it transparent. The government should end the subsidies to the sector and see if it is economically viable on its own.
Ram Mohan: The Act concerns civil liability in case of nuclear accident. Safeguards are provided by the technical guidelines and safety rules of AERB, International Atomic Energy Agency, and the International Commission on Radiological Protection.