#v Beyond Citations | A relook at nuclear liability
Are nuclear liability insurers back-stage diplomats?
Curated by Lokendra Sharma, Beyond Citations grounds vital tech developments in foundational scholarship. Because academic work is deeply relevant beyond citations in the scholarly universe.
February 2025 has been an eventful month for India’s nuclear sector. From budget announcement of amending India’s liability law to Modi discussing nuclear trade with Macron and Trump, there is a concerted effort by Indian government to resurrect trade in nuclear tech. But this edition is neither about nuclear reactors nor about liability in case of accidents. It is about players who do back-stage nuclear diplomacy but are hardly talked about — nuclear liability insurers.
In February 2025, barely a few days after the presentation of the first full budget of Modi 3.0, the prime minister undertook important trips to France and the US. In the former, Modi co-chaired the AI Action Summit in Paris along with French president Macron. In the latter, Modi spoke of merging MAGA (make America great again) with MIGA (make India great again) to form a MEGA partnership for prosperity. Trump also offered the 5th generation F-35 stealth aircraft to India.
Amid so many headlines about Modi-Trump and Modi-Macron bonhomie, a lesser noticed development was on nuclear energy. Both in France and the US, announcements were made with the subtext of resurrecting nuclear trade between India and the US/France. With France, India intends to work on Small Modular Reactor (SMR) and Advanced Modular Reactor (AMR). Not to be left behind, the India-US joint statement went a step ahead, clearly acknowledging the reason for resurrection of nuclear energy cooperation agenda:
The leaders announced their commitment to fully realize the U.S.-India 123 Civil Nuclear Agreement by moving forward with plans to work together to build U.S.-designed nuclear reactors in India through large scale localization and possible technology transfer. Both sides welcomed the recent Budget announcement by Government of India to take up amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act (CLNDA) for nuclear reactors, and further decided to establish bilateral arrangements in accordance with CLNDA, that would address the issue of civil liability and facilitate the collaboration of Indian and U.S. industry in the production and deployment of nuclear reactors.
In her budget speech on 1 February 2025, India’s finance minister Sitharaman announced that the government plans to amend both the CLNDA and Atomic Energy Act to foster private sector involvement in India’s civil nuclear energy sector with the ultimate goal of achieving 100 GW nuclear power by 2047.
In my opinion piece for Moneycontrol on this issue, I have argued that this target is ambitious yet unrealistic and is only intended as a signaling mechanism to the private sector. I have also examined the nuclear liability issue in detail. In general globally, only nuclear operators are held liable for nuclear accidents. But in India, CLNDA holds suppliers liable through something called a right to recourse (given to the operators). This has been often blamed as the reason why the I23 agreement between India and the US could not take-off. But I argue that it is not the quantum of supplier liability that is the issue. It is the ambiguity about liability that’s the problem:
Given the relatively limited amount of INR 1500 crore that operators (and in extension suppliers) are liable to, the quantum of liability is not the primary issue with India’s liability regime. There are ambiguities and questions regarding applicability of other Indian laws to the suppliers, mandatory versus contractual nature of the right to recourse, compatibility of liability law with the CSC [Convention on Supplementary Compensation] and a future possibility of the revision of the liability amount by the government. This is despite the Ministry of External Affairs as well as the Department of Atomic Energy issuing detailed FAQs.
Nuclear liability is an issue that has been examined by many, especially in the context of India. But what about nuclear insurers — the behind-the-scenes players who are willing to insure the nuclear industry in case of accidents?
There is where the following 2021 paper by Kyrtsis and Rentetzi makes a seminal contribution:
Kyrtsis, A. A., & Rentetzi, M. (2021). From lobbyists to backstage diplomats: how insurers in the field of third party liability shaped nuclear diplomacy. History and Technology, 37(1), https://doi.org/10.1080/07341512.2021.1893999 (open access)
Nuclear accidents are a messy and costly affair even if an accident is a minor one. This is because of the invisible nuclear radiation that can leak out to the areas surrounding a nuclear power plant. This radiation leak does not respect national boundaries. Europe in the 1950s and 60s with its small nation-states (experimenting with nuclear power) knew these risks all too well. Normally, given the heavily regulated nature of nuclear energy — even in capitalist states at the height of the Cold War — one would expect governments to be at the forefront of setting liability expectations. But Kyrtsis and Rentetzi make a compelling case that it was nuclear liability insurers in Europe along with their partners in the US that shaped the nuclear liability regime in the formative years. And it was one person — Archibald George Mount Batten, an expert nuclear insurance practitioner — ‘who turned insurers into backstage nuclear diplomats in the early 1960s.’
It was in the interest of the governments (as well as nuclear plant operators) in the 1950s and 1960s to ensure that in case of accidents the insurers covered as much as possible — thereby limiting their own exposure. The insures on the other hand wanted the entire arrangement to bend to suit their interests. And, it did bend eventually. This was because without the insurers being convinced, nuclear liability insurance could not have happened, and governments and operators would have to assume complete liability. As the authors explain:
Without terms of insurability of nuclear risks acceptable to all stakeholders, investment in the nuclear industry could neither be easily expanded, nor further enhanced by governments already exposed to the risks of nuclear accidents since the construction of the first nuclear power plants (NPPs) in the mid-1950s. Defining the terms of insurability by national legislation, imposed according to international legislation enshrined in multilaterally agreed conventions, was the main objective of insurers functioning as inconspicuous diplomatic mediators among governments, and as opinion makers in the context of multilateral institutions.
This paper, when looked at in the context of India’s liability regime flux raises some question in search for answers: Are insurers playing a similar role today as well? Are they batting on the side of the suppliers or the operators or the state? Would they influence how India goes about nuclear liability?