Global nuclear equipment vendors are guarded in their response to the new rules notified by the Government for the implementation of the country's nuclear liability legislation.
Industry players widely see the notified Civil Damage for Nuclear Liability Rules as a tightrope walk by the Centre, in terms of it partially addressing the equipment suppliers' concerns of being exposed to unlimited liability in the event of a nuclear incident, while keeping in line with the Government's repeated commitment to enact a tough liability law.
“We welcome their publication, but are still to fully read and understand them. We do not wish to comment on the Rules for the time being and will comment in due time,” Mr Arthur de Montalembert, Chairman and Managing Director of Areva India, said in response to a query. A GE Energy India spokesperson said the company was “closely reviewing the Rules” and that it did not have a comment at this time.
The Rules, which were notified on November 11 and made public on Wednesday, address crucial implementation issues pertaining to the Civil Liability for Nuclear Damage Act 2010 that was passed by Parliament last year. Among key provisions, it specifies a limit to the Indian nuclear operator's right of recourse against equipment suppliers if an accident were to result from the “supply of equipment or material with patent or latent defects or sub-standard services.”
The Rules suggest that the operators' right of recourse under 17(a) of the Act “shall be for the duration of initial licence issued under the Atomic Energy (Radiation protection) Rules of 2004, or the product liability period, whichever is longer”. As a consequence, the operator's right of recourse could be effectively limited in time — either five year (the licence period provided in the 2004 Atomic Energy Rules) or to a period for which the supplier accepts liability for an accident caused by defective equipment in a contract.
The new Rules also do not seem to affect Section 46 of the Act, which allows citizens at large to file tort claims for damages. US operators such as GE-Hitachi and Toshiba-Westinghouse have cited objections to this particular Section as it opens up the possibility of facing unlimited liability.