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The Case of Civil Liability for Nuclear Damage Bill, 2010

By Yash Thomas Mannully

15 July, 2010
Countercurrents.org

From,

Yash Thomas Mannully
Advocate
Mannully Road
Chilavannoor
Cochin – 682020
Kerala
Ph: 09846357018, 0484-2315916
Email: yashllm@gmail.com

SUBMISSION BEFORE
THE HON’BLE PARLIAMENTARY STANDING COMMITTEE ON
SCIENCE AND TECHNOLOGY; ENVIRONMENT AND FORESTS ON
CIVIL LIABILITY FOR NUCLEAR DAMAGE BILL, 2010

Respected Members of the Parliamentary Committee

Based on the expertise in the area of law regarding nuclear liability, I humbly present before the Hon’ble members the following submission. A detailed clause wise drawback of the Civil Liability for Nuclear Damage Bill, 2010 is discussed as follows;

Clause 3(1)

The need for notifying a nuclear incident as a “nuclear incident” by the Atomic Energy Regulatory Board” is not used in any other national nuclear liability legislations or international nuclear liability conventions except that of the United States’ Atomic Energy Act 1954. It is modelled on the need for ENO (Extraordinary Nuclear Occurrence) under US law.

The Bill is silent on the standards in deciding what constitute a “nuclear incident” by the AERB and it does not provide any remedies in cases where the AERB does not notify a nuclear incident as a “nuclear incident” under the Bill.

The Atomic Energy Regulatory Board (AERB) cannot be treated as an independent regulator even though technically it claims that it got independence. The members of AERB are mainly drawn from those who are part of the Department of Atomic Energy and there is any judicial member in it. The lack of any pro-active use of the various provisions under the Environment (Protection) Act 1986 till now shows the lack of AERB’s legal awareness as well as enforcement capabilities
This section limits the application of Convention on Supplementary Compensation (CSC) even though the government is claiming that it will be signing CSC since the need to notify nuclear incident by AERB is against the spirit of the Convention

Clause 5(1)

The clause does not provide clarity to the aspect of liability to the operator. If the approach adopted by the Supreme Court in M.C. Mehta v. Union of India
(Oleum Gas Leak Case) is followed it provides absolute liability without any exceptions. There arise a potential conflict with the ratio decidendi of the Supreme Court decision in the Oleum Gas Leak Case and the outcome will be depended on the judicial review. The legislations like Public Liability Insurance Act 1991 and the National Tribunal Act 1995 follow the concept of absolute liability as held by the Supreme Court rather than the corresponding position in other countries or in the international level.

The Convention on Supplementary Compensation provides similar exception to the liability of the operator except for terrorism and provides for absolute liability to the operator. Even though technically there is the concept of “absolute liability” under CSC it is completely different from that laid down by the Indian Supreme Court in the Oleum Gas Leak Case.

Clause 5(2)

This clause is not drafted properly and as per the wording of Clause 5(2) it provides that “an operator shall not be liable for any nuclear damage caused to …”. This directly conflict with the objectives for which the Bill is drafted as it provides for civil liability on the operator till a particular amount.

Clause 6(1)

The concept of limited liability with regard to amount and time is an age-old concept introduced mainly in the 1950s to support the nuclear companies in its infancy. It was first introduced in the US Atomic Energy Act 1954 to support the coming of private companies for energy generation. Most of the legislation passed after the year 2000 regarding nuclear liability has discarded this principle and has adopted the concept of unlimited liability with regard to time and amount. The nuclear liability legislations in Austria, Switzerland, Japan and Germany are examples of this approach.

There is no need for India to follow limited liability with regard to amount even to become a signatory of the Convention on Supplementary Compensation since one of the member United States follows a three tier mechanism under the Price Anderson Act, which was an amendment to the Atomic Energy Act, 1954 provides a unique system of nuclear liability coverage for power plants as well as for transportation of nuclear materials to and from such facilities. It covers all loses of third party bodily injury and property damage off the site of the nuclear installations. Beyond the insurance cover and irrespective of fault the US Congress, as insurer of last resort it can decide how compensation be provided in the event of a major accident. Such an approach is missing in India by limiting the liability with regard to the amount.

Clauses 9, 10 & 11

There is no fixity of tenure for the Claims Commissioners and it affects the independence and integrity of the Commissioners. Provides complete discretion to the government with regard to the appointment, tenure and removal of Claims Commissioners under the Bill.

The lack of clarity regarding criteria for appointment as well as removal of the Claims Commissioner makes them a mere puppet of the ruling government.

Clause 15(2) and Clause 18

Limitation with regard to time is not proper since the adverse affect of nuclear damage may takes years to express and it may even extend to generations.

There is inherent conflict with regard to the limitation of time under Clause 15(2) and Clause 18 of the Bill.

Clause 16(5)

Clause 16(5) Deviates from the basic principle of judicial review and is against the basic structure of the Indian Constitution.
It would be wise enough to examine the fate of Constitutional (Twenty Fifth Amendment) Act 1971 in Keshavananda Bharati v. State of Kerala in relation to exclusion of judicial review under Article 31C of the Indian Constitution. The exclusion of judicial review implies the lack of application of mind during the drafting of the Bill or its inclusion was to please the private suppliers and operators.

Clause 20

Clause 20 with regard to the Nuclear Damage Claims Commission also has the same drawbacks of the Claims Commissioner in relation to fixity of tenure, independence and removal from office.

No independence in the Commission as the majority of the members are serving officials appointed by the government and only one judicial member. The decision of the Commission will be reflection of the government stand in relation to the nuclear incident.

Statement of Objects and Reasons

In the ‘Statement of Objects and Reasons’ of the Bill the Government highlights the importance of Convention on Supplementary Compensation 1997 (CSC) while the actual provisions of the Bill are silent on the equitable distribution of compensation without discrimination on the basis of nationality, domicile or residence under the CSC. This prevents India from becoming a signatory member of the CSC even if the Civil Liability for Nuclear Damage Bill 2010 is enacted by the Parliament.

The Government has tried to make the Civil Liability for Nuclear Damage Bill, a standalone legislation by clearly stating in the Statement of Objects and Reasons that neither Atomic Energy Act 1962 nor any other law in India deals with nuclear liability or compensation. This wilfully ignores the immunity granted for all actions done in good faith by government under Section 29 and also the provisions for licensee’s liability under sections 14 (3) (d) & (e) of the Atomic Energy Act 1962. This also raises critical questions whether the drafters of the Bill has even gone through the provisions of the Atomic Energy Act 1962 or the Convention on Supplementary Compensation, 1997.

General Discussion regarding the major issues with Civil Liability for Nuclear Damage 2010

Most of the debate surrounding the Bill was confined to the aspect of judicial review, liability of foreign operators and limited liability with regard to time and amount. But there are many areas of serious concern in relation to the Civil Liability on Nuclear Damage Bill, 2010 especially in areas like transparency, regulatory independence and independence of the mechanism created under the Act.

The Civil Liability for Nuclear Damage 2010 is a piecemeal legislation does not cover all aspects associated with the civilian use of the nuclear energy and does not provide any reforms to the Atomic Energy Act 1962 especially regarding the independence of the Atomic Energy Regulatory Board (AERB). The Atomic Energy Act 1962 was passed at a period when India was facing increased threats from China in its borders and as result there are several provisions in it which provided blanket power to the government. The 1962 Act also reflected the prevalent concept of undisputed power of the sovereign government. Over the years the Indian Supreme Court has developed the concept of right to life and this aspect has been taken by the legislature also in several legislations.

At a time when most of the countries using nuclear energy has either introduced or drafting comprehensive legislation covering various aspect of nuclear energy, the approach under the Civil Liability for Nuclear Damage Act provides for only short term solutions while pertinent issues can be addressed as a response to disasters like in the present initiative by the Union Government as a result of the euphoria created by the decision of the Chief Judicial Magistrate’s Court, Bhopal in relation to the criminal charges for the Bhopal Gas Leakage. If the Chernobyl disaster has triggered a series of reviews to the international nuclear liability regimes which is still continue, India as a country has not learned anything from the worst chemical disaster the earth has witnessed.

As a democratically elected government working under the Constitution of India there is a general expectation that the lex loci (law of the place) will be followed for the nuclear damage occurred. The Civil Liability for Nuclear Damage Bill 2010 does not reflect the Indian law on liability nor the principles of international nuclear liability. The Bill fails to acknowledge even the basic concept of ‘judicial review’ under the Indian Constitution through the inclusion of clauses providing finality to awards passed by the Claims Commissioners and Nuclear Damage Claims Commission.

The Bill provides mere ‘liability’ and it does not clarify the application of the concept of “absolute liability” developed by the Indian Supreme Court. The Public Liability Insurance Act 1991 and the National Tribunal Act 1995 even though do not apply to nuclear damage testifies the importance given to the principle of absolute liability by the previous governments. The absence of valid reasoning for the exclusion of absolute liability creates ambiguity on the intention behind the Bill. More over the provisions regarding limitation on time and amount which has been introduced to support the private suppliers as well as future private operators fails to support the basic concept of reasonableness, fairness and justifiable of procedures affecting right to life.

The Indian Nuclear Energy Programme due to the non-separation of civil and military purposes till the operationalisation of the 123 Agreement is characterised by lack of transparency and high government control. This aspect has been reflected in the Bill through the provisions for Constitution of Nuclear Damage Claims Commission, its dissolution and also in the notification of nuclear incident. The Claims Commissioners have jurisdiction only if the Atomic Energy Regulatory Board notify a nuclear incident and there is guidance regarding what all matters should be taken into account in reaching the decision regarding the notification of nuclear incident under the Bill. This aspect should be seen in the light of the regulatory independence of the Atomic Energy Regulatory Board (AERB) which is constituted from with in the Indian Atomic Energy Establishment and comes with in organisational structure of the Department of Atomic Energy. Even though it has wide powers under various environmental legislations and the Atomic Energy Act 1962 it has never used it powers in a proactive manner. The lack of transparency of the Department of Atomic Energy together with the lack of regulatory independence of AERB will be detrimental to the interest of the victims of nuclear incidents.

Only the aspect of civil liability is provided by the “Civil Liability for Nuclear Damage Bill 2010” and there is no clarity regarding the approach towards criminal liability of the operators and suppliers in case of their negligence. This becomes extremely relevant in the light of the treatment of the criminal charges for causing gas leak at the Union Carbide factory at Bhopal. Moreover in cases of multinational companies due to the lack of clear approach regarding the jurisdiction as well as liability of the parent company in India and Internationally the lack of legislative approach is detrimental to the interest of India.

Thus it can be concluded by introducing the Nuclear Bill the Indian Government through the introduction of the Bill failed to utilise the golden opportunity for acknowledging the aspects of transparency, regulatory independence and also developing a liability principle suitable for India.

It humbly requested before the Hon’ble Parliamentary Committee to consider all the above explained issues in relation to the Civil Liability for Nuclear Damage Bill, 2010 so that the Indian public will not be left out in the dark without any adequate remedy and compensation. I am also attaching a number of articles in this area to enlighten the Hon’ble Parliamentary Committee about the adverse effect of the present approach reflected in the legislation.

I am interested in orally presenting the submission before the Hon’ble Parliamentary Standing Committee on Science and Technology; Environment and Forests to clarify the serious flaws in the Civil Liability for Nuclear Damage Bill, 2010 and also for clarifying any doubt regarding this.

Yours Sincerely

Ernakulam
22-06-2010 Yash Thomas Mannully

Yash Thomas Mannully graduated in law in 2003 from Mahatma Gandhi University and has taken LL.M. Degree from Cochin University (2005) and Wales University (2008). He has obtained diploma in International Nuclear Law from International School of Nuclear Law at the University of Montpellier (2008). Currently practicing as an advocate before the High Court of Kerala, India and is also in the Guest Lecture panel for teaching International Trade Law at Cochin University of Science and Technology. Area of specialisation includes Nuclear Law, Constitutional Law and Environmental Law. He has published a number of articles in the area of nuclear law in India. He can be reached at yashllm@gmail.com