Canada, from where Prime Minister Manmohan Singh returned Tuesday, is debating a new legislation to repeal its existing Nuclear Liability Act.
It proposes to increase a nuclear plant operator’s liability to Rs 3,000 crores at current conversion rate — which is not only six times the cap of Rs 500 crores contained in the Civil Liability for nuclear damage bill 2010, currently being debated by an Indian parliamentary standing committee, but it also exceeds the “maximum amount of liability” of about Rs 2,300 crores set out in the bill.
Canada’s draft legislation, known as Bill C-15, was introduced in the House of Commons on April 16, 2010. It proposes to increase the civil nuclear liability cap from $75 million to $650 million.
It also increases the extent of an operator’s financial security that they are required to maintain, which has been pegged at $650 million. Bill C-15 is the fourth attempt by the Canadian government to update Canada’s regime of civil liability for nuclear incidents.
The Canadian draft legislation contains at least five amendments adopted by the House of Commons standing committee on natural resources during its study of the earlier version in the previous session of Parliament. For instance, the Canadian minister of natural resources is required to review operators’ liability limits taking into consideration nuclear liability limits in other countries.
The minister’s first review of the liability limit must take place within the first 15 months of the Act coming into force.
Also, when reviewing financial liability limits, the minister must consult with both industry and non-industry stakeholders and refer the matter to parliamentary committee.
Furthermore, the minister is required to table reinsurance agreements before each House of Parliament together with any assessment studies undertaken concerning those agreements.
In India, raising the amount of liability is seen as leading to an increase in insurance premium which means more financial liability for the government. This is because under the Atomic Energy Act of 1962, only Government of India or its public sector units (PSUs) can operate a nuclear installation. Therefore, there are only two operators in India today: the National Power Corporation of India Limited (NPCIL) and the Bharatiya Nabhikiya Vidyut Nigam Limited (or BHAVINI).
The Indian government has said that there will be three tiers of liability: one at the level of the operator, another at the level of the government and a third tier, if signed, at the level of the Convention of Supplementary Compensation.
Accordingly, if the liability exceeds the stipulated Rs 500 crores, then the government may shell out up to Rs 1,600 crores.
If the liability exceeds this amount too, then India can withdraw funds of up to about Rs 2,350 crores if it has signed the Convention of Supplementary Compensation.
The Indian bill is likely to come up for discussion and voting during the Monsoon Session of the Parliament, which is likely to be convened later this month.