Key change in n-liability drowns in monsoon session

The disruption of the Monsoon session of Parliament has caused a notice to amend the rules framed for implementation of the Civil Nuclear Liability Act to lapse

Written by Manoj C G | New Delhi | Published:September 14, 2012 12:26 am

The disruption of the Monsoon session of Parliament has caused a notice to amend the rules framed for implementation of the Civil Nuclear Liability Act to lapse.

The notice,moved by the CPM’s Sitaram Yechury and K N Balagopal,was the last opportunity to force changes in the law that seeks to make the operator of a nuclear facility fully responsible to pay compensation to victims of a nuclear accident.

The CPM’s Rajya Sabha members wanted amendments in a key provision of the rules,pertaining to right of recourse that allows the operator to claim damages from the supplier of equipment in the event of the accident being caused by faulty parts. This provision,as it stands,had also been criticised by a Parliamentary committee which had found it “inconsistent” with the overall act.

While the 2010 act empowers the operator to seek damages from the supplier equal to its own financial liability to the victims,the rules had two conditions. The rules say the operator cannot ask the supplier for damages more than the value of the equipment supplied,even if the compensation paid to victims is much larger. Also,the operator cannot ask for damages beyond a period of five years,or a “product liability period” — to be defined in the contract between the operator and supplier — whichever is longer.

The CPM members wanted the first condition — that the right to recourse cannot be greater than the value of the contract — to be dropped altogether. As for the duration during which the right of recourse could be enforced, they demanded that the present provisions be replaced with 30 years.

Their amendments could not be taken up for discussion due to repeated adjournments. Motions to amend the rules are valid only for a limited period,and this motion lapsed with the end of the session. “Going by strict interpretation of the legislative rules,the motion has lapsed. But the larger question is that it has lapsed without coming to the house and the right of seeking amendments has not been utilised by the MPs,” Balagopal said. He is planning to write to the Rajya Sabha chairman raising this point.

The government has,however,defended the two conditions in the rules saying it will benefit domestic suppliers who generally provide equipment of lesser value. It has argued that in the case of most foreign suppliers,the value of equipment would be more than the total financial liability of the operator to the victims,which is limited to Rs 1500 crore.

On the second condition,the government has argued that the life of most equipment is substantially lesser than that of the nuclear facility itself,which is 40-60 years. The licence of the nuclear facility is renewed every five years after a thorough inspection during which the “latent and patent defects” of equipment would become evident. An equipment supplier cannot therefore be made liable for damages when the equipment has already been replaced or removed,the government has maintained.

The government has also pointed out that the two conditions apply only to those cases where the operator and the supplier expressly provide for a right to recourse in a written contract. In all other cases,where such a written contract is not made,the operator can invoke the right of recourse without any restriction.

However,it has agreed to address a third point raised by the Committee on Subordinate Legislation about the right of recourse in the event of compensation paid out over a staggered period. The committee had said that nothing in the act or the rules make it clear whether the operator can seek repeated damages from the supplier,if the total amount was within the overall limit.

The government has said that the intention is to enable the operator to make staggered claims on the supplier,and that it would be willing to amend the rules to make this provision more direct and clear.

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