Context: As reported by The Hindu, the SHANTI Act, passed during the Winter Session of Parliament, marks a decisive shift in India’s nuclear energy policy. It opens the nuclear power sector to private participation and substantially modifies the liability architecture under the Civil Liability for Nuclear Damage Act (CLNDA), 2010. While aimed at boosting investment and capacity, the Act has revived concerns over liability dilution, safety incentives, and victim compensation.
Key Features of the SHANTI Act
- Private Sector Entry: Ends the Union government’s monopoly by allowing private entities to operate nuclear power plants.
- Supplier Indemnity: Removes the operator’s right of recourse, preventing operators from suing suppliers for defective equipment.
- Liability Caps:
- Operator liability capped between ₹100 crore – ₹3,000 crore.
- Total accident liability capped at 300 million SDR (~₹3,900 crore).
- Omission of Clause 46 (CLNDA): Victims can no longer seek remedies under other civil or criminal laws beyond the Act.
- Regulatory Framework: Gives statutory backing to the Atomic Energy Regulatory Board (AERB), but member selection remains linked to a committee constituted by the Atomic Energy Commission (AEC).
Liability and Safety Concerns
Supplier Indemnity Debate
- Evidence from Past Accidents: Major nuclear disasters were linked to design and engineering flaws—
Chernobyl (reactor instability), Three Mile Island (control room failures), Fukushima (containment and flood protection gaps). - Distorted Safety Incentives: Indemnifying suppliers weakens pressure for rigorous quality control and accountability.
- Risk Transfer: Liability shifts from suppliers → operators → State/victims, diluting the polluter-pays principle.
Liability Cap vs Potential Damage
- Scale Mismatch:
- SHANTI Act cap: ~₹3,900 crore
- Fukushima damages: ~₹46 lakh crore
- Compensation Deficit: Even the Convention on Supplementary Compensation (CSC) funds would cover <1% of catastrophic loss.
- Absolute Liability Dilution: Relaxation for “grave natural disasters” weakens India’s traditionally strict hazardous industry liability regime.
Way Forward
- Liability Rebalancing: Restore calibrated supplier accountability through hybrid liability models used in select OECD countries.
- Regulatory Independence: Strengthen AERB autonomy to prevent regulatory capture, on lines of the US NRC and France’s ASN.
- Safety Investment Mandate: Enforce stronger multi-hazard resilience and disaster preparedness, reflecting post-Fukushima global standards.
Institutional Background
- Atomic Energy Regulatory Board (AERB)
- Established: 1983, under the Atomic Energy Act, 1962
- Role: Licensing, safety oversight, decommissioning approvals
- Position: Functions under the Department of Atomic Energy (DAE)
- Atomic Energy Commission (AEC)
- Established: 1948
- Role: Policy direction and strategic control of India’s nuclear programme
- Oversees: BARC, NPCIL, AERB
- Chaired by: Secretary, DAE