Civil Nuclear Liability- recent visits by the President of USA took 2 steps to expedite setting up of Nuclear reactor services by American Firms.

1: Please explain the Insurance angle. how that ad-hoc solution is challenging International legal regime and whether its an exception made in our own Nuclear Liability law to facilitate the process?
2: Also comment on how the Section 17(b) that was earlier thought to be of "open-ended" nature (and hence posing an issue) is now resolved saying its "restricted" to the "terms of contract".
I suggest that you should see the media briefing by foreign secretary and other officers of January 25, 2015 available under section Media Briefings at Media Center of www.mea.gov.in

I shall reproduce the relevant portion

The insurance pool or what would be called the India Nuclear Insurance Pool is a risk transfer mechanism which is being formed by GICRE and four other public sector undertakings in the general insurance business in India. These companies would together contribute Rs.750 crore to the pool and the balance capacity would be contributed by the government on a tapering basis. So, this is the general shape of the pool. It is similar to 26 such international pools around the world. The details, for example, of the premiums are being worked out. And the United States has committed to work with India to share information and best practices on the formation of this insurance pool. This is a complete risk management solution for both operators and suppliers without causing undue financial burden.

I'm struggling to understand how creating a corpus takes care of the entire challenge

What don't you understand. Pl elaborate

Sir eventually, the pool contributed by the State insurance companies- is also public money

The international norm is that the operator takes the liability and not the supplier.

In view of the Bhopal incident, our parliament had passed a nuclear liability bill making the supplier also liable for damages. Normally operators are also in the private sector else where. In our case it is PSU – NPCIL. So in any case it would be public money or a deposit that can be taken from the supplier or an insurance company that can take the liability.  Insurance companies have the certainty of fixing costs that are important for companies to arrive at their total liability and outgo. So the cost of supply would be determined after taking into consideration the premium cost too. For anything above the insurance there is an international convention called the CSC (Convention on supplementary compensation)

We have now made changes to our internal legislations to be Compliant to the CSC

India has signed but not ratified it sir. Am I correct ?

Yes. We are in the process

This will take care of the spill over from the insurance pool. So while we cannot change the law on liability passed by the Parliament, both the countries have found a via media to arrive at an acceptable solution through an insurance pool, Supported by CSC

Sir, so the Suppliers are still liable, but the compensation shall be taken out from the pool created?

Supplier and operators will work through the pool. Cost of premium would be worked out in advance and built into the price. So there is a certainty for the suppliers and satisfaction for the operator. Over and above there is CSC and then the sovereign government

Sir if there is a nuclear breakdown say 30 years down the line after construction of nuclear plant ..will the insurance be still available or is it available for a fixed period from start of operation ? Sir is the insurance pool amount fixed for years to come or will be adjusted to inflation ?

These things will be worked out in the contract between the supplier and the operator. The insurance companies are expected to cover the lifetime of the plant

Sir, since you said the rest of the amount will be paid by the government on a tapering basis- aren't the tax-payers paying for the misdeeds of the supplier? if yes, then how are we ensuring the spirit of the Civil Nuclear Liability act which guarantees the right to recourse against the Supplier?

If misdeed is proven, then no contract is required for compensation or enforcement of criminal liability, Law of the land takes over

not intentional misdeed sir- for that even International Legal regime holds the supplier liable

Yes. The foreign companies that are used to a different system in which the suppliers framed the rules, we're not clear about proceeding. By forming the insurance pool, we have sorted the issue out

Sir my question is still very basic-the entire debate was about holding the suppliers liable for accidents creating a pool with majority public money in it- how does it hold suppliers liable?

sure it takes care of the liability issue overall in terms of monetary compensation and a source- but as far as holding them liable as per our own legislation?

Let us see it comprehensively, Liability - 1) willful and 2) machine fatigue or fault but unintentional

When wilfull, criminal liability sets in and there is no limit. When force majeure or out of control, then we need to see how to address them. Insurance pool is a method through which the supplier knows how much he could be liable for and takes measures to address them. The operator is confident that there is recourse through the pools for compensation. CSC comes into play for the supplementary compensation. Finally if the issue is huge, no government can sit back and say it was note responsibility and only the supplier or operator has to pay for it. So, on the whole, while our law on legislation exists, if the operator and supplier enter into a contract that sets limit of the compensation or liability, the contract will have the final say

Final question sir- if the insurance pool arrangement takes care of the nuclear industry (suppliers particularly) and makes sure that it doesn't hinder their business in India, what about the litigations? right to recourse for accidents (not intentional) is still available against Suppliers right?

Criminal liability and right to recourse under the law is always available. While there is no clear cut answer that cN explicitly be given now, suffice to state that the Act, read with the contract that would be signed between the supplier and the operator, supported by international conventions like the CSC and the newly created pool of insurances should be in a position to address the demand for energy and the risk mitigation factors.