The future of nuclear power in India: a question of liability law

Journal article

In 2008, as a result of a joint Indo-US agreement on civil nuclear cooperation, India gained access to the Nuclear Suppliers’ Group, allowing it to access civilian nuclear technology and fuel from other countries despite not being party to the Non Proliferation Treaty (NPT). Following this, in 2011 India announced ambitious plans to expand its installed nuclear power generation capacity to 63 Gigawatts (GW) (out of over 800 GW) by 2032 through civil nuclear trade. However, several years on, much of this envisaged trade and investment has yet to come to fruition. Nuclear power remains on the agenda; India’s new government (elected in May 2014) urged the Department of Atomic Energy to triple nuclear power generation capacity from the current 5.7 GW (out of a total installed capacity of over 200 GW) to 17 GW by 2024. In the longer term, India’s Atomic Energy Commission expects a far more ambitious 500 GW of nuclear power capacity to be in place by 2060. However, the quantum of domestic and foreign investments required to achieve these targets has remained elusive. This has largely been put down to the passage into law of the Civil Liability for Nuclear Damage Act, 2010 (‘the Act’).

The Act, which sets up a specialized compensation mechanism for victims of nuclear incidents, contains provisions arguably inconsistent with India’s international obligations. Additionally, it has been held to be excessively onerous on the suppliers of nuclear equipment and materials. Two specific provisions are particularly contentious:

• Section 17(b) which holds suppliers liable for recourse when a nuclear incident results from either a patent or a latent defect in the equipment or material supplied, or as a result of the supply of substandard services; and
• Section 46 which arguably allows suppliers to remain liable under regular provisions of tort law and other general legislation despite having fulfilled their liabilities under this Act.

This article explores these two issues and argues for a legislative re-alignment that ensures nuclear safety while incentivizing participation in the nuclear industry. Though several other issues are relevant for operationalizing the Act, specifically the establishment of the India Nuclear Insurance Pool, recently announced by the Government of India for insuring operator and supplier liability, they are incidental to the core legal concerns that currently impair the growth of nuclear energy in India, and are consequently not dealt with in this article.

Authors: Sengupta, A

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford Institute for Energy Studies
• Journal: Oxford Energy Forum
• Issue: 98
• Pages: 37-39
• Publication date: 2015-01-12
• ISSN: 0959-7727
• Language: English
• Keywords: OIES