India wants to sign compensation treaty on nuclear disasters

In an apparent bid to overtly allay US anxieties over a diluted nuclear liability law, National Security Advisor Shivshanker Menon has said in Washington that India also intends to sign the Convention on Supplementary Compensation (CSC).

CSC is a kind of umbrella legislation drawn up in 1997 after the Chernobyl nuclear leak and provides a framework to deal with additional compensation in the event of an accident in a nuclear power plant or during transportation of nuclear material.

This is an additional liability that addresses transnational effects of a nuclear accident. The International Atomic Energy Agency has a Vienna Convention (1963) and the Organisation for Economic Co-operation and Development has a Paris Convention (1960). These are based on civil law operating in continental Europe.

CSC visualises a corpus contributed by participating states, on the basis of installed nuclear capacity. It provides for 300 million Special Drawing Rights which is equivalent to euro 360 million, at current rates.

Thirteen states have signed the CSC so far including the US but only four have ratified it. So, government officials say that by signing CSC, India will have a foot in the door in terms of liability legislation, while setting at rest US concerns.

However, nuclear technology expert G Balachandran warns: “India can draw from the CSC corpus only if other countries, too, join in — at least five states, with a minimum of 400,000 units of installed nuclear capacity are needed for it to enter into force.” The US signed into the CSC last year, and America’s massive nuclear deployment takes care of a large chunk of this requirement.

In Washington, addressing potential investors’ fears that the Indian liability law that covered operators as well as suppliers would make the liability (and insurance) for nuclear power so expensive as to be priced out of the market, Menon said the legislation was not inconsistent with international norms and it would not be as hard for foreign investors to do nuclear business in India as they imagined.

“I do not think it is going to be as difficult as we make it out to be... Once the bill is done and becomes an Act, then I think, we see how it actually works,” he said.

Arguing that the Indian legislation was not much different from international law or national laws of several countries, he said: “There is a whole range of laws. But there is certain common body of international law which applies.”

That was why India intended to sign the CSC, “which I think codifies that in one place”, he said. “Our lawyers say that the act is in keeping with the CSC — that is entirely in conformity.”

“The simple way was to work the way through the companies and see how the liability legislation worked in practice,” Menon said, noting, “One thing that we want is to avoid the argument between the lawyers, because that will be very expensive and will take a long time”.