Nuclear liability: Safety needs to be assigned top priority says CUTS International

Nuclear liability: Safety needs to be assigned top priority says CUTS International

New Delhi, March 31, 2010

The Civil Liability for Nuclear Damage Bill 2010 is a step forward to ensure an appropriate regulatory environment in the energy sub sector. Enabling a conducive regulatory environment is a must for attracting the required investment; however, at the same time there should be proper safeguards for the protection of human interests, especially those related to effective implementation of safety standards and compensation provisions. These views have been expressed by CUTS International, a think tank working on economic and consumer policy issues including energy and infrastructure.

“India is planning to increase its nuclear power generating capacity from 4000 MW presently to 20,000 MW by 2020. Apart from public sector units such as Nuclear Power Corporation (NPC), private players, both domestic and foreign, would have to play a crucial role in achieving the nuclear capacity addition targets. The proposed bill is an initiative to address key concerns, especially safety standards and compensation issues raised by such actors. At the same time, the government should ensure that safety of people is not compromised”, added Pradeep S. Mehta, Secretary General, CUTS International.

“It is a pity that the debate on the bill has lacked balance with too much attention being given to a few issues such as the maximum liability fixed for compensation. There are many other important issues which have not been given due importance such as effective compliance with service standards, assessment of loss due to fatal or non-fatal accidents and most importantly the determination of the liability of operators, suppliers of inputs and raw material etc.”, he added.

It is good that the government has proposed the constitution of an independent regulatory body in the sector to look after various regulatory issues, especially as competition in the nuclear segment is low relative to other segments of the power sector. The regulatory body would have to play an important role in fixing, monitoring, and maintaining safety standards, given the current lack of transparency in operation of nuclear power plants.

“Apart from the maximum limit, there should also be a minimum limit on compensation to be paid by investors if they fail to maintain safety standards which should be linked to the costs of such compliance. This would make compliance more effective. This measure should be complemented by accurate assessment of losses and timely compensation so that cases like ‘Bhopal gas tragedy’ are not repeated.” averred Mehta

CUTS International also strongly feels that there is a need to recalculate the currently proposed maximum limit which was revealed to be low by the IOC fire accident in Jaipur last year. The estimated losses from that accident were many times the maximum limit fixed by the company under the Public Liability Insurance Act 1991 (PLI Act). At the same time, this limit should exist and not be too high as consumers would bear the enhanced costs of insurance and other risk related expenses unless a strong regulatory regime is enforced.