NUCLEAR LIABILITY
- NEW DIMENSIONS AND EMERGING TRENDS
Vaibhav Saxena *
Abstract
At the international level there are four instruments for nuclear liability i.e. the 1960 Paris Convention, 1963 Vienna Convention, 1997 Protocol to Amend Vienna Convention, and 1997 CSC. As none of these has universal application, the state practice is diverse and seems inspired by the international instrument individually subscribed. Thus while Korean legislation introduces the element of fault based liability of the supplier, the Indian law prescribes a statutory liability even in the absence of an express contract in writing. India enacted the Civil Liability for Nuclear Damage Act, 2010 and signed the Convention on Supplementary Compensation on 27th October, 2010 which is yet to be ratified. Cardinal question however, is whether this legislation integrates Indian legal framework to a global nuclear liability regime. Indian Act is seen as deviating from the traditional liability regimes and serious reservations are expressed about the Act’s compatibility with the Convention on Supplementary Compensation, 1997. While operator fears that the financial security requirements of this law are impracticable to fulfil, suppliers are scared of the unconventional Right of Recourse provision.
Such trends in the national jurisprudence offer new dimensions to the international nuclear liability regimes and pose hitherto unforeseen issues for evolution of a universal global nuclear liability regime. It calls for scrutiny as to whether these developments are a pointer to evolution of new norms and have the potential to contribute to a progressive development of a universal global regime or are retrogressive to the growth thereof and therefore, an impediment to nuclear power development. Inquest into tenability of such national provisions and their implication for the international law therefore, becomes an interesting area for research. The proposed paper aims at analyzing these legal issues with a view to explore possible future outlook with regard to emergence of a universal nuclear liability regime.
______
* The author is a member of INLA as well as NLA, India. He is a qualified legal practitioner in India at Bombay High Court specializing in Nuclear and Aerospace laws and holds Post Graduate qualifications with work experience at the Indian Atomic Energy establishment and the International Atomic Energy Agency. He can be accessed through mail to: .
Overview
Broadlythere are four instruments for nuclear liability i.e. the 1960 Paris Convention, 1963 Vienna Convention, 1997 Protocol to Amend Vienna Convention, and 1997 Convention on Supplementary Compensation (CSC). Strict liability channeled to the operator is at the heart of these conventions. Indian Civil Liability for Nuclear Damage, 2010 (Indian Act) enunciates however, a fault based right of recourse which holds the supplier of nuclear material or equipment with patent or latent defect or substandard services liable to the operator. If this is seen to be a trend in the national jurisprudence,it introduces new dimensions to the international nuclear liability regimes and poses hitherto unforeseen issues for evolution of a universal global nuclear liability regime. A scrutiny as to whether this developments is a pointer to evolution of new norms and has the potential to contribute to a progressive development of a universal global regime or are retrogressive to the growth thereof and therefore, an impediment to nuclear power development. Inquest into tenability of such national provisions and their implication for the international law therefore, becomes an interesting area for research. This paper aims at analyzing these legal issues with a view to explore possible future outlook with regard to emergence of a universal nuclear liability regime.
Conventional Principles
The common principles underlying various international instruments on nuclear liability may be identified as follows:
(i) Strict liability
(ii) Limitation of Liability in quantum and duration
(iii) Channelling liability to the operator of nuclear installation.
(iv) Strict liability
(v) Limitation of Liability in quantum and duration
(vi) Channelling liability to the operator of nuclear installation.
(vii) Coverage of operator’s liability by insurance or other financial security
(viii) Single forum for adjudication of claims
(ix) Equal treatment of victims
Channelling of Liability
Liability is 'strict' and'exclusive'. This means the liability is channelled exclusively to the operator of the nuclear installation which caused the nuclear damage and that no one else may be held responsible. A supplier or contractor may not be held liable, even if he has been negligent or is at fault, except if he has accepted liability by contract, in which case the operator has a right of recourse. The operator also has a right of recourse against an individual acting with intent to cause damage. Even in these cases, the operator remains exclusively liable vis-à-vis the victims. Liabilityis also based on the principle of ‘no fault’ and negligence on the part of the operator need not be proved by the claimant but there are few exceptions to this rule. This means the claimant needs simply to prove that he has suffered damage or injury and that the damage or injury was caused by the specific nuclear incident. The operator of a nuclear installation is the person recognized or designated as the operator by the competent public authority. The member country is required to designate an operator for each nuclear installation on its territory.The operator is not liable for damage caused by a nuclear incident directly due to an act of armed conflict, hostilities, civil war, insurrection or, except in so far as the legislation of the installation state may provide to the contrary, a grave natural disaster of an exceptional character.
Limit of Liability
Liability for damage caused is limited both in amount and in time. If there is more than one operator liable, their liability isjoint and several. The claims extinguish after the period of prescription. Each instrument lays down a limit of liability and the period of limitation within which the claims have to be lodged.
Financial Security
In order to ensure that funds will be available to pay compensation, the operator is required to have and maintain compulsory insurance or other financial security approved by the installation state for the amount of his liability. Although insurance is the most common form of financial security, it is also possible to benefit from a state guarantee or a form of indemnity or insurance provided by the state. The state determines the form and conditions for the financial security which must be used solely to compensate claims for damage.
Competent Court
The courts having jurisdiction are those where the nuclear incident occurredand thus the courts of the installationstate of the liable operator have jurisdiction.
State Practice
A number of counties including India have passed national nuclear liability laws. India signed the Convention on Supplementary Compensation on 27th October, 2010 and is yet to ratify it. However, Indian Act is seen as deviating from the traditional liability regimes. A look at some of these legal models may, therefore be instructive.
Canada
The main supervisory authority in the field of nuclear energy is the Ministry of Energy, Mines and Resources and the Regulatory Agency is the Atomic Energy Control Board, since 1997 replaced by the Canadian nuclear safety commission. Nuclear liability is regulated by the Nuclear Liability Act, 1970[1]. Although Canada is not a contracting party to any of the international nuclear third party liability agreements, its Nuclear Liability Act largely follows the legal principles of those agreements.
The operator will be liable for nuclear damage only which constitutes loss of life and personal injury, as well as any loss of or damage to property or damage resulting from such loss or damage. The Canadian Act covers damage resulting from any incident caused by the fissionable or radioactive properties or a combination of those properties with other hazardous properties of nuclear material under the nuclear operator's control as defined by the Act. The Act, however, does not consider to what extent other types of nuclear damage may be compensable or not, such as environmental damage, deferred damage, and costs of preventive measures.
A Canadian nuclear operator is in principle, not liable for injury or damage occurring outside Canada, resulting from a violation of a duty imposed upon it by the Nuclear Liability Act or for which it could be held liable under domestic law. Nevertheless, the Governor in Council (the government) can decide that, due to adequate arrangements existing in a foreign country for compensation for nuclear damage occurring in the territory of Canada, equal reciprocal benefits should be accounted to that country for the purpose of Nuclear Liability Act in case of transboundary nuclear damage for which a Canadian operator is liable. Example is the arrangement between Canada and U.S (Canada — U.S. Nuclear Liability Rules) which became effective as on 11.10.1976, provides that Canadian operators are liable for injury or damage that is sufficient in the U.S. but caused by a nuclear incident occurring in Canada. Similarly, the local Canadian Courts having jurisdiction for such incidents are also competent to adjudge in such case where U.S. citizens claim compensation for damage or injury resulting therefrom.
The nuclear operator must, with respect to each installation for which is it liable, maintain with an insurer approved by the competent Minister insurance covering its liability under the Act, unless the Canadian State operates a nuclear installation. The insurance consists of basic insurance not exceeding 75 million Canadian dollars (51 million US $) and supplementary insurance for the same period and for an amount equal to the difference, if any, between the amount for the basic insurance and the ceiling of 75 million Canadian dollars. This means that particular facilities can be subject to an amount less than 75 million Canadian dollars if the seriousness of the risks presented by that facility so justifies and provided supplementary insurance for the difference up to that amount is obtained, with the Canadian Government acting as reinsurer. However, special measures for compensation, requiring active state intervention must be taken where the amount of insurance taken out by the operator (75 m. Canadian dollars) is likely to be insufficient to cover the amount of the damage or where as a result of the nuclear incident, it is in the public interest to take such measures. In such situation, the state shall issue a proclamation; consequently the liability of the operator normally liable for the nuclear damage ceases the state being substituted for the operator. Unless authorized by Parliament the aggregate of compensation paid by the state must not for any one nuclear incident exceed 75 million Canadian dollars. The court at the place of the nuclear installation where the incident occurred will have jurisdiction.
France
The main supervisory authorities in the field of nuclear energy are the Ministry for Industry and Regional Development and the Ministry for Research and Technology. France is a contracting party to the Paris Convention but has not yet ratified the Joint Protocol. The French Nuclear Liability Act of 1990 applies to nuclear incidents occurring in and damages suffered in the territory of the contracting parties to the Paris Convention as well as to nuclear incidents and damage occurring on the high seas.
French Act follows the Paris Convention and also covers damage due to ionizing radiation emitted by any source of radiation within a nuclear installation and damage caused to any means of transport carrying nuclear substances at the time the incident occurred. Damages recoverable also include expenses related to personal injury as such (medical expenses, disability payments, pensions paid to the heirs of persons killed), evacuation costs of the local population and any resulting loss of salary, loss of production caused by contamination, cleanup costs (decontaminating property), and loss of income suffered by any neighboring enterprises due to interruption of their activities. However, the operator will not be liable for damage to the nuclear installation itself or onsite property, in accordance with the Paris Convention. There is no provision for compensation to be paid for transboundary damage. The state can either intervene in a subsidiary manner in place of the operator, or in a supplementary manner in accordance with the Brussels Supplementary Convention. The State, in the last resort, will pay compensation up to the liability limit of the operator, in case victims are unable to recover damages because of the failure to pay compensation by the financial guarantor, insurer or operator.
The United Kingdom
The Nuclear power plants are operated by the British Energy plc. wholly owned by the UK Government and the commercially operating AEA Technology plc. under the Atomic Energy Act 1946. The Secretary of State has a duty to promote and control the development of atomic energy. The UK is a contracting party to both the Paris and Brussels Supplementary Convention and its legislation follows the rules laid down in the conventions.
The damages cover injury to persons and damage to property caused by the radioactive properties, ionizing radiation and contamination to property. Transboundary damage suffered in the territory of a non-contracting state is not covered. Liability for nuclear damage is limited both in time and in amount. The time limit is 10 years to submit claims for compensation from the date of the occurrence or after the last occurrence in case of a succession or interrelated occurrences on a particular site.
Peoples Republic of China
China is not a contracting party to either the Paris or the Vienna Convention. It has ratified the Nuclear Safety Convention, which incorporates a duty to ensure an adequate nuclear liability regime. It does not have any general legislation addressing the use of nuclear energy in China. All regulations deal with only nuclear safety and nuclear exports. No specific rules for nuclear liability have been developed.
Japan
All power plants are operated by private companies. Japan is not a party to either the Paris or Vienna Conventions. However, it established a national regime in 1961 to deal with compensation for nuclear damage and Law on Indemnity Agreements for Compensation of Nuclear Damage and an Ordinance for the Enforcement of the Law on Compensation. The nuclear liability regime was developed independent from the international nuclear liability agreements.
There is no limit to operator’s legal liability. The compensation law requires each installation to be insured for a prescribed amount. Ten years is the time limit for bringing action, from the date of occurrence of the incident causing the nuclear damage. State intervention may take two forms in Japan, namely the conclusion of an indemnity agreement with the nuclear operator to complement the operator’s insurance for liability and a more general and less strict undertaking of state aid to provide compensation for any nuclear damage exceeding the amount of financial security and that of the Government indemnity.
New Dimensions - Emerging Trends
Approach of each individual state seems inspired from the international instrument subscribed by it. Those states who are yet to join any Convention adopt individualistic path in channeling liability as also in determination of limits of compensation both in terms of quantum as well as duration, jurisdiction and procedure for adjudication of claims. It seems therefore, difficult to discern even from national liability laws certain commonly acceptable principles of universal applicability which the states consider binding on themselves.
As none of the international nuclear liability conventionshas universal application, the state practice is diverse and seems inspired by the international instrument individually subscribed. Thus while Korean legislation introduces the element of fault based liability of the supplier subject to an agreement in writing between the operator and the supplier, the Indian law prescribes a statutory liability even in the absence of an express contract in writing. Indiasigned the CSCon 27th October, 2010 which is yet to be ratified. The comparatively new CSC envisages a two tier system with respect to the amount of compensation e.g. Installation State to ensure availability of the amount of compensation (at least 300 million Special Drawing Rights), and International Fund for which all contracting parties are obliged to contribute the amount based on a formula for calculation of contribution. The Convention is open to all countries. However, a state party to it is expected to abide by the basic principles of the nuclear liability law and to ensure that its national legislation is consistent with the Annex to the CSC.
Cardinal question however, is whether this legislation integrates Indian legal framework to a global nuclear liability regime. Indian Act is seen as deviating from the traditional liability regimes and serious reservations are expressed about the Act’s compatibility with the CSC. While operator fears that the financial security requirements of this law are impracticable to fulfill, suppliers are scared of the unconventional Right of Recourse provision. A detailed analysis of the Indian Act may therefore, be instructive.
Indian National Legislation
India enacted the Civil Liability for Nuclear Damage Act, 2010 to provide for prompt compensation to the victims of a nuclear incident. The Act came into force on 11th November, 2011.Salient features of the Act may be enumerated as follows:
- notification of nuclear incident by the Atomic Energy Regulatory Board.[2]
- provides that the operator shall be liable for nuclear damage caused by a nuclear incident occurring in his nuclear installation.[3]
- provides for the circumstances under which an operator shall not be liable for the nuclear damage.[4]
- provides the limits of liability. The maximum amount of liability in respect of each nuclear incident shall be the rupee equivalent of three hundred million Special Drawing Rights (SDRs) and the liability of an operator for each nuclear incident shall be rupees one thousand and five hundred crores.[5]
- fixes the liability of the Central Government for nuclear damage resulting from a nuclear incident in the following cases[6] -
(i)where the liability exceeds the amount of liability of an operator to the extent such liability exceeds liability of the operator;
(ii)where the nuclear incident occurs in a nuclear installation owned by it; and