India’s civil nuclear liability regime (CNLR) has infact raised serious questions instead of providing solutions. Suppliers from India and abroad argue it was tremendously unbalanced and may adversely impact nuclear capacity addition programme. In an interview with Sanjay Jog, GR Srinivasan, former vice chairman of Atomic Energy Regulatory Board (AERB) and currently Principal Associate - Nuclear Power Business of GMR Energy Limited explains his views
Q: Why there has been much noise over India’s CNLR?
A: CNLR meets all objectives such as fast compensation (within five months), simple and victim friendly, adequate compensation and without discrimination of victim. However, it is tremendously unbalanced and unworkable to implement and a deterrent to growth of the nuclear industry.
No other country has recourse to supplier unless mentioned in contract. No other industry or power plants with other energy sources have regime similar to CNLR. If all industries are covered by similar CNRL, it will lead to zero growth. Nuclear is the safest energy source. Polluter pays principle is agreed. But who is the polluter? It will be quite difficult to determine technically, logically and legally.
The Liability Act and the Rules strike an optimum balance between satisfactory compensation to victims, implementability and the continuation of nuclear programme through domestic and imported routes. Any change may adversely affect any of the above three parameters including the nuclear programme. Also if this trend is extended to other industries that have caused more damage in the past such as Bhopal accident, mining accidents, dams, chemicals and industries then we may retard overall industrial development itself due to apprehension in the mind of the suppliers.
The notified rules should be quickly released for implementation.
Q: What are the implementation problems?
A: The Indian model for imported reactors will not be Turn Key where there is a single designer, equipment supplier, erector commissioning agency. There could be many designers, engineering, procurement, construction (EPC) contractors. How logical, rational and legal to hold a single agency responsible?
India has got more than 3,000 suppliers with contract values ranging from few lakhs to many crores. Now each of them have to take insurance for Rs 1,500 crore or more. Even with respect to imported nuclear power plants (NPPs), considerable indigenization will be undertaken due to the policy of the country and to reduce cost. Even the imported equipment would be manufactured in more than 40 countries by different suppliers. This will result in difficulties in determining the supplier on whom to take recourse. Moreover, each of them will have to take insurance, thus resulting in overall cost increase with no commensurate gains in safety.
Q: Is the recourse provision unnecessary?
A: Supplier is defined under the Rules 17 (a), 17 (b) and (c) of the Liability Act would be automatically covered through 17 (a) with respect to supplies. However, on careful reading Chapter V Right to Recourse 2 b (ii) definition “provides build to print or detailed design specifications to a vendor for manufacturing a system equipment or component or building a structure and is responsible to the operator for design and quality assurance.” This section has ambiguity as supplier cannot be held responsible for design for suppliers of items built to print or detained design specifications provided by operator. Responsibility may be limited only quality assurance for materials and manufacturing.
Operator is solely responsible for safety and bestowed license. License review by Atomic Energy Regulatory Board in India (1 million technical man hours) is extensive, deep, rigorous and goes to the bottom of each issue. During operation periodic mandatory surveillance, inspection performance tests stipulated by Atomic Energy Regulatory Board ensures safety.
Q: Do you feel the CNLR, the Rules and the Act will adversely impact India’s nuclear capacity addition?
A: If the CNLR, the Rules and the Act continue to remain inconsistent with the Annex to the Convention of Supplementary Compensation (CSC), which will make any attempted ratification by India problematic and subject to challenge by the other signatories when the treaty eventually comes into effect.
Q: So according to you what is the way forward?
A: I want to reiterate here that nuclear is inevitable to India. What needs to be appreciated in the context of nuclear sector is that good safety and security culture in all organizations engaged in the sector will prevent accidents.
There should be national mandate and political consensus on the nuclear programme and all nuclear issues including liability. The national mandate with political consensus should result in a policy for nuclear sector which should be long term, clear, sustained and irreversible.
