-M O H I T A B R A H A M ,
-P A R T N E R , P X V L A W P A R T N E R S ,
-C H A I R , L I A B I L I T Y W O R K I N G G R O U P ,
N U C L E A R L AW A S S O C I AT I O N O F I N D I A
-E M A I L : M O H I T . A B R A H A M @ P X V L A W . C O M
STRICTLY PRIVATE – NOT FOR CIRCULATION
Regional Reactor Sales
in India – Prospects and
Problems
POWER ALLOCATION IN INDIA
68%
8%
15%
6%
Coal
Gas
Hydro
Nuclear
Others
3%
ELECTRICITY DEMANDS
•
India is the 4th largest economy in the world.
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India has the 2nd largest GDP amongst developing countries based on
purchasing power parity.
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Buoyant economy – growth still expected to be in the region of 7-8%.
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Availability of electricity a key factor in sustaining growth.
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5th largest electricity generation capacity in the world – over 1,90,592
MW.
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Worlds 3rd largest transmission and distribution network.
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Country continues to suffer from massive demand-supply gap
particularly during peak hours.
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8-10 hours of “load shedding” even in industrialised states. July ‘12
power grid failure – affected over 600 million people.
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Great scope for nuclear power – potential value of sector in India at
USD 150 Billion.
NSG – EXEMPTIONS TO INDIA
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As a nuclear weapons country, India was excluded from the Nuclear NonProliferation Treaty – hence excluded from the nuclear trade by the Nuclear
Suppliers Group (NSG).
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India could join NPT only if it disarmed and joined as a Non-Nuclear Weapons
State – politically impossible.
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Owing to an impeccable record of nuclear non-proliferation and strategic
economic considerations, India was afforded a clean waiver.
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IGAs with France (Sept. 2008), Russia (Dec. 2008) and the US (Oct. 2008)
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India – Specific Safeguards Agreement signed in Feb. 2009. Additional
protocol signed in May 2009.
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Agreements also signed with Canada, Kazakhastan, UK, South Korea,
Mongolia, Australia, Argentina. Negotiations on with Japan and EU.
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Recognition that India has no obligation from treaties and arrangements to
which it is not party (NPT, CTBT, etc.) and the importance of India having
assured fuel supplies.
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All agreements for peaceful purposes, but do not affect India’s unsafeguarded
nuclear activities.
NUCLEAR ENERGY IN INDIA
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As of today
• About 3-4% of the total electricity produced (approx. 4800 MWe)
• Fully indigenous PHWRs
• Active collaboration with Russia on Kudankulam NPP (2*1000 MWe)
– possible to upscale to another 2*1000 MWe).
•
The Future
• NSG exemptions resulted in about 17% increased outputs in
existing plants. Uranium already imported and used in existing
PHWRs.
• High capacity reactors for imports being negotiated with France, US,
Russia, Germany and others.
• JV with AREVA and NPCIL for 6*1000 MWe in implementation
phase.
• DAE projects – 30000 MWe by 2020 and 60,000 MWe by 2032.
CIVIL NUCLEAR LIABILITY LAW
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The Civil Liability for Nuclear Damages Act, 2010 and the Rules, 2011.
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Background – Bhopal Gas Tragedy (Union Carbide), 1984.
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Many features of the Act similar to the Convention on Supplementary
Compensation for Nuclear Damage, 1997 (CSD) – India has signed but not
ratified.
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Liability Caps
• NPPs equal to or > than 10 MWe – about USD 330 Million.
• Spent fuel reprocessing plants – about USD 66 Million.
• NPPs < than 10 MWe, fuel cycle facilties, transportaion of nuclear material, etc. –
About USD 22 Million.
• Anything over the above caps would be paid by the Government subject to a limit
of 300 Million SDR (about USD 450 Million)
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Sufficient ? Union Carbide paid over USD 1 billion for the Bhopal Disaster.
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Some significant departures from the CSD
• While primary liability is on the operators (NPCIL, BHAVINI – both state owned
entities), operators may claim a right of recourse in some situations against the
supplier.
• Section 46 – Act is supplemental – other laws to also apply. Therefore, opening
suppliers to actions in Tort, other environmental laws and even criminal liability.
SUPPLIER LIABILITY – CHANGING
INTERNATIONAL NUCLEAR LIABILITY
JURISPRUDENCE
Section 17:
“
The operator of the nuclear installation, after paying the compensation for
nuclear damage..shall have a right of recourse where –
(a) Such right is expressly provided for in a contract in writing;
(b) The nuclear incident has resulted as a consequence of an act of supplier or
his employee, which includes supply of equipment or material with patent or
latent defects or sub-standard services;
(c) The nuclear incident has resulted from the act of commission or omission of
an individual done with the intent to cause nuclear damage”.
•
Exact reproduction of Article 10 of CSC except sub clause (b).
SUPPLIER LIABILITIES - AMBIGUITIES
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To mollify international community, the government introduced Rule 24
“ (1) A contract referred to in clause (a) of section 17 of the Act shall include a provision
for right of recourse not less than the extent of the operator’s liability or the value
of the contract itself, whichever is less;
(2) The provision for the right of recourse referred to in sub-rule (1) shall be for the
duration of initial license issued under the Atomic Energy (Radiation Protection)
Rules, 2004 or the product liability period, whichever is longer.”
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Does not refer to situations in Section 17(b).
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Serious ambiguity – no supplier, Indian or foreign happy.
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Price escalation – Russian Government and Kudankulam 1,2,3 and 4.
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Other countries opposed to supplier liability. GE-H, Westinghouse, Areva,
sought changes to the law.
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Westinghouse says it will await India’s ratification of the CSC before offering
to supply equipment to India.
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Activist Indian Judiciary.
A PRO-PEOPLE LEGISLATION?
(Pic: Courtesy, the Hindu, A. Shaikhmohideen
PUBLIC PERCEPTIONS
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Major protests at Kudankulam and Jaitapur (site of Areva project).
Some NGOs believe that apparent limits on liability of supplier
unacceptable.
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Hunger strikes, storming of NPP, police strong handedness in
combating protests. Pending PIL against Act and Rules in Supreme
Court.
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Significant change in India’s civilian nuclear power policies post
2008. Earlier NPPs set up in the 80s and 90s near major cities like
New Delhi and Chennai witnessed no protests – Why?
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Lack of public awareness and engagement with the people on the
issue of nuclear power.
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Sudden engagement compounds fears – an example of
Kudankulam.
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Many fears arising out of misinformation – Indian government alleges
NGOs of certain countries intentionally spreading misinformation.
THE WAY FORWARD
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Ambiguities regarding supplier liability have to go – Government must bite the
bullet one way or the other.
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Politically, very difficult to remove supplier liability altogether, but clarity would
help. Suppliers can then determine the extent of liability, have price
negotiations and take out insurance.
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Insurance pools – needs to be created. Presently no nuclear insurance pool
in India due to restrictions on inspection of facilities by international pools.
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Contractual negotiations on supplier liability must be encouraged. Can the
Indian government contractually waive its right of recourse against a
supplier?
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Generation of positive public opinion and detailed engagement with the
public.
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Tremendous potential for exploiting Nuclear energy in India. India can be an
exporter of reactors. Massive potential yet to be tapped.
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The future – Regional SAARC based cooperation? Proposal by M.P. Ram
Mohan, Chairman, Nuclear Law Association, India.
Thank You