Dangers of a weak n-liability regime

THE Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, passed in Parliament this month, has revived the longstanding debate on three key issues concerning nuclear power development — regulation, civil liability in case of accidents and private sector participation in nuclear power generation. The new law replaces the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. The 1962 law provided for the development and use of atomic energy and the 2010 Act gave a framework for assigning liability and compensation in case of nuclear accidents.

The context of the new Bill, as explained by the government, is the emergence of a new option — small modular reactors (SMRs) — for power generation and the need for private sector participation in achieving the ambitious goal of generating 100 GW of nuclear power by 2047.

Since the government has decided to open nuclear power generation to the private sector, both regulation and liability frameworks become paramount and the two are interlinked. The new law retains the status quo with regard to regulation. The Atomic Energy Regulatory Board (AERB) will function as in the past. In the formative years of atomic energy development in the 1960s, the Directorate of Radiation Protection (DRP) was established to enforce radiation safety in radiation facilities outside the Department of Atomic Energy (DAE).

Vikram Sarabhai, who took over the atomic energy department after Bhabha, proposed an independent Atomic Energy Regulatory Authority (AERA), but he passed away before the idea could be implemented. His successor, Homi N Sethna, junked the AERA plan and decided to continue with the DRP. In 1983, Raja Ramanna gave the go-ahead for a regulatory body — the AERB — though not fully autonomous like similar bodies in other sectors. The 2025 law continues with this framework of the AERB.

It is clear that the atomic energy establishment does not favour the idea of an independent regulator. Yet, despite being under the purview of the DAE, the AERB in the past has issued uncomfortable regulatory restrictions on power plants and other establishments in cases of violations on several occasions, especially under A Gopalakrishna’s chairmanship.

Now that the private sector is being allowed in, we need a transparent, upright and technically sound regulatory system. Continuing with the status quo of the AERB, even in the garb of SHANTI, does not augur well. In the space sector too, where private sector entry has been permitted, the government has created an ambivalent system called In-SPACE instead of an autonomous regulatory system. The cardinal principle is that promotion and regulation should not be under the same roof.

Related to regulation is the liability for damage arising out of possible nuclear accidents. If the regulation is not sound, it creates room for accidents. A liability regime was introduced in the form of Civil Liability for Nuclear Damage Act, 2010 after the Indo-US nuclear deal in the hope that it would attract foreign participation in nuclear power generation. But foreign companies, including suppliers of reactors, refrained from doing so, fearing the risks and liability of nuclear accidents despite the law capping their liability at a mere Rs 1,500 crore.

The international conventions governing liability are highly complex and national laws need to be aligned with them. Most conventions are based on the principle that the operator of a nuclear installation where a nuclear accident occurs is liable to compensate third parties. Here, nuclear installation refers to the nuclear reactor, but the accident may take place at a nuclear site where facilities other than the reactor may also be situated. Usually spent fuel or nuclear waste is stored in power plant premises. Then, there is the question of a safety zone around a plant and radiation affecting people and environment in areas extending to several kilometres.

Multiple factors determine liability and capping it at Rs 3,000 crore and linking it to the size of a nuclear plant, as done in the 2025 law, is absurd. For small reactors ranging from capacities of 150 MW to 750 MW, the liability will be as low as Rs 300 crore. For plants below 150 MW capacity, it will be a mere Rs 100 crore. This is clearly to placate nuclear suppliers who have been promoting SMRs as an alternative to large capacity plants that need huge capital and have long gestation periods. The industry has also been lobbying for de-risking SMRs through diluted liability framework for nuclear accidents. The graded liability system unveiled in the new law satisfies this demand.

The new law defines and fixes liability arising out of accidents at nuclear reactors (along with attached nuclear fuel cycles) but is silent on liability due to accidents or radiation leaks that may happen at what is defined as 'nuclear facilities.' A nuclear facility may house a range of activities — handling and storage of fissile materials, spent fuel storage facility, storage of waste from the use of source or fissile material, etc. Such facilities may be located in the same premises as a nuclear power reactor. Who will be liable to pay for damages if something happens in such premises? 'Nuclear damage' has been given a sweeping explanation in the law — human loss of life and injury, loss of property, economic loss and costs of restoration of environment damaged due to a nuclear accident. The liability of all this is capped between Rs 100 crore and Rs 3,000 crore.

In comparison, British Petroleum ended up paying $20 billion for immediate environmental damage and settlement for its Deepwater Horizon oil spill that occurred in 2010. In addition, the company had to spend billions more for clean-up costs and economic damages to individuals and businesses.

The accident cost BP a total of $65 billion — supposed to be the largest environmental settlement in history. The victims of the world's worst industrial disaster in Bhopal are still waiting for closure and nobody has paid anything for the environmental damage or remediation as yet. Let us draw lessons from the past before taking the nuclear leap. Promotion and regulation should not be under the same roof