New Delhi
29 June 2010
Canada, from where Prime Minister Manmohan Singh returned Tuesday, is
debating a new legislation to repeal its existing nuclear liability act. It proposes to
increase a nuclear plant operator's liability to Rs 3,000 crore at current conversion rate --
which is not only six times the cap of Rs 500 crore contained in the Civil Liability for
Nuclear Damage Bill 2010, currently being debated by an Indian parliamentary standing
committee, but it also exceeds the "maximum amount of liability" of about Rs 2,300
crore set out in the Bill.
Canada's draft legislation, known as Bill C-15, was introduced in the House of Commons
on April 16, 2010. It proposes to increase the civil nuclear liability cap from 75 million
dollars (about Rs 350 crore) to 650 million dollars (or Rs 3,000 crore). It also increases
the extent of an operator's financial security that they are required to maintain, which
has been pegged at 650 million dollars (or Rs 3,000 crore). Bill C-15 is the fourth attempt
by the Canadian government to update Canada's regime of civil liability for nuclear
incidents.
The Canadian draft legislation contains at least five amendments adopted by the House
of Commons standing committee on natural resources during its study of the earlier
version in the previous session of Parliament. For instance, the Canadian minister of
natural resources is required to review operators' liability limits taking into consideration
nuclear liability limits in other countries. The minister's first review of the liability limit
must take place within the first 15 months of the Act coming into force. Also, when
reviewing financial liability limits, the minister must consult with both industry and non-
industry stakeholders and refer the matter to parliamentary committee. Furthermore, the
minister is required to table reinsurance agreements before each House of Parliament
together with any assessment studies undertaken concerning those agreements.
In India, raising the amount of liability is seen as leading to an increase in insurance
premium which means more financial liability for the government. This is because under
the Atomic Energy Act of 1962, only Government of India or its Public Sector Units (PSUs)
can operate a nuclear installation. Therefore, there are only two operators in India today:
the National Power Corporation of India Limited (NPCIL) and the Bharatiya Nabhikiya
Vidyut Nigam Limited (or BHAVINI).
The Indian government has said that there will be three tiers of liability: one at the level
of the operator, another at the level of the government and a third tier, if signed, at the
level of the Convention of Supplementary Compensation. Accordingly, if the liability
exceeds the stipulated Rs 500 crore, then the government may shell out up to Rs 1,600
crore. If the liability exceeds this amount too, then India can withdraw funds of up to
about Rs 2,350 crore if it has signed the Convention of Supplementary Compensation.
The Indian Bill is likely to come up for discussion and voting during the monsoon
session of Parliament, which is likely to be convened later this month.
// Box //
A COMPARISON
India
1. Liability of an operator of a nuclear installation is Rs 500 crore.
2. Maximum amount of liability is the Rupee equivalent of 300 million special drawing
rights (SDRs) as determined by the International Monetary Fund (IMF), which amounts to
about Rs 2,300 crore.
Canada
1. Liability to be raised to Rs 3,000 crore and it will be subject to review. The first review
by the Canadian minister of natural resources must take place within the first 15 months
of the Act coming into force.
3. An operator in Canada will also be required to carry 650 million dollars (or Rs 3,000
crore) in financial security.
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