In your interest.
Online Personal Finance Magazine
No beating about the bush.
The contentious nuclear liability Bill, if passed by Parliament, would enable India to tap an international corpus of funds to pay compensation in case of a nuclear accident
The contentious nuclear liability Bill, if passed by Parliament, would enable India to tap an international corpus of funds to pay compensation in case of a nuclear accident, officials said, reports PTI.
A civil liability for nuclear damage law is a prerequisite for India to be part of the Convention on Supplementary Compensation (CSC) adopted by UN nuclear watchdog, the International Atomic Energy Agency (IAEA), in 1997.
The CSC makes the operator of the nuclear installation and not the suppliers, liable in the event of an accident and caps the level of compensation at not less than 300 million Special Drawing Rights (SDRs), equivalent to nearly $460 million.
Similarly, the Civil Liability for Nuclear Damage Bill 2010, which the government has been forced to defer, seeks to put a financial cap on compensation at Rs2,100 crore (300 million SDRs) and limits the liability of the operator to Rs500 crore. The government has to share the rest of the amount.
If more funds are needed, the government could tap into an international corpus proposed to be set up under the CSC and draw an additional (approximate) $500 million. However, the CSC is yet to come into force as it has been ratified by only four countries—the US, Argentina, Morocco and Romania.
According to the IAEA, at least five states with a minimum of 4,00,000 MWe of installed nuclear capacity have to ratify the Convention for it to come into force.
The other international conventions that provide such indemnities to the global nuclear industry are the Paris Convention (1960) and the Vienna Convention, which was revised during an IAEA conference in Vienna in September 1997.
Meanwhile, many countries who are not yet party to any convention have their own legislative regimes for nuclear liability.
In the US, nuclear liability is addressed by its 1957 Price Anderson Act, the world's first comprehensive nuclear liability law, that calls for $10 billion in cover without cost to the public or government and without fault needing to be proven.
According to the World Nuclear Association (WNA), an international organisation that promotes nuclear energy, the federal law covers power reactors, research reactors, and all other nuclear facilities.
In the UK, the Energy Act 1983 addresses the nuclear liability and in 1994, it set a new limit of £140 million for each major installation, so that the operator is liable for claims up to this amount and must insure accordingly.
Germany has unlimited operator liability that requires €2.5 billion security which must be provided by the operator for each plant. This security is partly covered by insurance, to €256 million.
In France, the domestic law requires financial security of €91 million per plant, while in Switzerland (which has signed but not yet ratified the Conventions) it requires operators to insure up to €600 million. The country is now mulling increasing this to €1.1 billion and ratifying the Paris and Vienna conventions.
A 2005 Act in Finland requires operators to take at least €700 million insurance cover, and operator liability is unlimited beyond the €1.5 billion provided under the Vienna Convention.
In Sweden, the country's nuclear liability act requires operators to be insured for at least 3,300 million Swedish kroner (€302 million), beyond which the state will cover to SEK 6 billion per incident.
The Czech Republic is moving toward ratifying the amendment to the Vienna Convention and in 2009 increased the mandatory minimum insurance cover required for each reactor to Czech koruna eight billion (€296 million).
In Canada the Nuclear Liability and Compensation Act is also in line with the international conventions and establishes the licensee's absolute and exclusive liability for third party damage.
While suppliers of goods and services are given absolute discharge of liability, the law sets 75 million Canadian dollars per power plant as the insurance cover required for individual licensees.
In Japan, which is not party to any international liability convention, plant operator liability is exclusive and absolute and they must provide a financial security amount of 60 billion yen ($600 million). From 2010 this doubles to 120 billion yen ($1.2 billion).
Russia, which is party to the Vienna Convention since 2005, has a domestic nuclear insurance pool comprising 23 insurance companies covering liability of some $350 million.
Ukraine adopted a domestic liability law in 1995 and has revised it since in order to harmonise with the Vienna Convention, which it joined in 1996. It is also party to the Joint Protocol and has signed the CSC.
China is not party to any international liability convention but is an active member of the international insurance pooling system.
The international community has been showing seriousness for the safety of nuclear plants since the Chernobyl nuclear plant disaster in Ukraine in 1986. Over 50 people died at the plant, while an estimated 65,000 died from complications over the years.
Nearly 400,000 people from neighbouring areas of Ukraine, Belarus and Russia were evacuated and an exclusion zone of 3,000 sq km was created and deemed off-limits for human habitation for an indefinite period after the disaster.