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India: Convention on Supplementary Compensation for Nuclear Damage Signed

(Oct. 29, 2010) India signed the Convention on Supplementary Compensation for Nuclear Damage on October 27, 2010. Dubbed in the Indian press as a “significant step” that will enable India to conduct nuclear commerce, the action is viewed by some commentators as an attempt to ally concerns voiced by U.S. companies about India's newly enacted Nuclear Liability Law, because the Convention sets parameters on a nuclear operator's financial liability and provides for compensation to victims in cases where a nuclear accident has transnational implications. (India Signs CSC on Nuclear Damages, THE TIMES OF INDIA, Oct. 27, 2010,
; Dan Yurman, Liability Law Puts India's Nuclear Future in Doubt, The Energy Collective website, Sept. 14, 2010,

The Convention was adopted on September 12, 1997, and opened for signature that same month; it will enter into force on the 90th day after the date of ratification by at least five States that have an installed nuclear capacity of a minimum 400,000 units. India is the fourteenth signatory state to the treaty; at present there are four contracting states: Argentina, Morocco, Ukraine, and the United States. (IAEA Information Circular,INFCIRC/567, July 22, 1998 [with text of Convention on Supplementary Compensation for Nuclear Damage attached], International Atomic Energy Agency [IAEA] website,

The Convention stipulates the establishment of an international fund to increase the monies available for compensation of victims. Compensation is based in general on article III (1):

1. Compensation in respect of nuclear damage per nuclear incident shall be ensured by the following means:

(a) (i) the Installation State shall ensure the availability of 300 million SDRs [“Special Drawing Right”], the unit of account defined by the International Monetary Fund and used by it for its own operations and transactions] or a greater amount that it may have specified to the Depositary at any time prior to the nuclear incident, or a transitional amount pursuant to subparagraph (ii);

(ii) a Contracting Party may establish for the maximum of 10 years from the date of the opening for signature of this Convention, a transitional amount of at least 150 million SDRs in respect of a nuclear incident occurring within that period.

(b) beyond the amount made available under sub-paragraph (a), the Contracting Parties shall make available public funds according to the formula specified in Article IV. (Id.)

The Convention also allows compensation for civil damage occurring within a state's exclusive economic zone, including damage resulting from the loss of tourism or fishery-related income. In addition, the Convention sets parameters on the financial liability of nuclear operators, stipulates time limits for possible legal action, requires that nuclear operators maintain insurance or other instruments of financial security, and provides for jurisdiction and applicable law in the event of a nuclear incident.

The IAEA has indicated that “all States are free to participate in the Convention regardless of their involvement in existing nuclear liability conventions or the presence of nuclear installations on their territories.” (THE TIMES OF INDIA, supra.)