The problems and gaps in the nuclear liability conventions and an analysis of how an actual claim would be brought under the current existing treaty regime in the event of a nuclear accident.

• Author: Currie, Duncan E.J.
• Position: Updating International Nuclear Law

1. EXECUTIVE SUMMARY

   This paper addresses the problems and gaps in the existing nuclear liability conventions and conducts an analysis of how an actual claim would be brought under the current existing treaty regime in the event of a nuclear accident.

   The nuclear liability conventions have been described with some justification as forming a very complex labyrinth. However since the Labyrinth was an elaborate maze to hold the Minotaur, the description may mislead. In this case, it could be said that the Minotaur largely constructed the labyrinth.

   The international nuclear liability regime is extremely patchy, complicated and features sparse participation. While the recent amendments to the Vienna and Paris Conventions are much heralded, they are heavily hedged with exceptions and the amended Protocols enjoy even more sparse participation than the original Conventions. Others, such as the Convention on Supplementary Convention, are not in force; and for those that are in force, many major nuclear countries are not party to them. So discussion of Conventions must take into account their membership.

   Characteristics of the system include that no neutral tribunal is provided and claimants are generally required to file claims in the courts where the nuclear installation is located, even with respect to nuclear transports on the high seas, with attendant costs, concerns about neutrality of the courts and law, and limitations of recoverable damages. Liability is limited in time and in amount, amounting to a subsidy of the nuclear industry; the definition of damage is narrow and likely to be interpreted by the courts of the installation state; and the treaties that are there enjoy very narrow participation.

   The value of these features to victims of nuclear accidents and to non-nuclear States is limited. While unlimited liability may lead to the ruin of the operator, limited liability may lead to the ruin of the victim. Other arguments are that the capacity of the insurance market is limited. Non-nuclear States and others may question why they or the environment at large should be subjected to risks which exceed the capacity of the insurance market. Similarly, with respect to the limitation of time, the existence of radiation may not be known, consequences may not be manifested until later generations, and even when they are manifested, the causes may not be known or may be difficult to prove. Thus even a thirty year time period may be too short for claimants, and ten years clearly would be too short for claims for inter-generational injury.

   Other barriers to justice exist, such as high legal costs, security for costs, liability for costs of the opposing party, access to legal aid and standing requirements, particularly to defend the environment, as opposed to property interests. Groups acting in the general interest and to protect the environment should have standing, as should groups representing fishing interest, farmers and communities. The burden of proof and causation issues may place insurmountable barriers on claims, as they have in past cases in the United Kingdom.

   Three frequent concerns of non-nuclear States, being terrorist attacks, environmental damage and pure economic loss, are all likely to fall within exceptions. The 1997 Vienna Protocol introduces a poorly defined exception for military installations. There are also some significant pitfalls in joining the Conventions, in exposing Parties to low limits in other Conventions. The absence of explicit provisions on standing raise questions on the ability of groups to act to protect the environment.

   The 1997 Vienna Protocol does explicitly extend the geographical coverage of damage covered, covering damage 'wherever suffered', but leaves jurisdiction in the Installation State; and while it extends the definition of damage, it leaves much discretion to the laws of the Installation State. Economic loss arising from loss of life, any personal injury or any loss of, or damage to, property is covered, but economic loss other than that specified in the new definitions is only covered if permitted by the law of the competent court, which will usually be the Installation State. So economic loss to tourism and fisheries, for instance, which is not arising from damage to property or personal injury as such, may well not be compensated. So-called 'rumor damage', or economic loss caused by an incident without necessarily being predicated on actual contamination, is no less real for the lack of contamination.

   The 1997 Vienna Protocol does introduce preventive measures, but if nuclear damage has not yet occurred, these measures can only be taken where there is a 'grave and imminent threat'. Costs of reinstatement of the impaired environment are covered, provided the impairment is significant and reinstatement measures are actually taken. So where reinstatement is not possible, compensation may not be forthcoming. The limitation of compensation to measures actually taken omits any value of the impairment of the environment as such where reinstatement or remediation is not possible, taking into account any impact on biodiversity and the non-economic value of the environment including value to future generations. Compensation for environmental impairment is limited to loss of income deriving from an economic interest in any use or enjoyment of the environment, where the environment was significantly impaired. The revised Convention extends the ten year time limit for claims to thirty years for loss of life and personal injury, as does the 2004 Paris Protocol. On standing, the revised Vienna Convention does provide that the State may bring an action on behalf of victims, but otherwise standing provisions are extremely limited. Standing for groups to claim for economic loss for environmental impairment would depend on whether they are entitled to claim, leaving the matter to the lex fori.

   The 2004 Paris Protocol has a more restricted geographical application, and does not cover damage caused on the high seas or other areas beyond national jurisdiction. It also does not include the Vienna Protocol residual definition of economic loss. The Paris Protocol does allow a Party to subject passage through its territory to increase the minimum amounts of liability.

   A number of recommendations are made including criteria for a liability regime where there is unlimited liability, a broad definition of recoverable damage, absolute liability with few or no exceptions, all responsible parties bear joint and several liability and a neutral tribunal for the adjudication of claims. Three damage scenarios are postulated, to provide an opportunity to examine how the system may work in practice.

2. INTRODUCTION TO THE LIABILITY TREATY SYSTEM

   The Paris and Vienna Conventions have a number of features in common. They both:

   1. Limit liability to a certain amount and limit the period for making claims

   2. Require insurance or other surety by operators

   3. Channel liability exclusively to the operator of the nuclear installation

   4. Impose strict liability on the nuclear operator, regardless of fault, but subject to exceptions. This is sometimes incorrectly referred to as absolute liability.

   5. Grant exclusive jurisdiction to the courts of one country, normally the country in whose territory the incident occurs.

   Of these, only the second and fourth offer significant benefits to victims of an accident or incident, and even then, the strict liability is militated by various exceptions.

   The international liability regime is primarily contained in two sets of instruments: the International Atomic Energy Agency's [IAEA] Vienna Convention of 1963 which entered into force in 1977, (2) and the OECD's Paris Convention on Third Party Liability in the Field of Nuclear Energy of 1960 which entered into force in 1968, (3) and which was bolstered by the Brussels Supplementary Convention in 1963. The Brussels Convention (4) supplements the very low liability levels starting with the Paris Convention of SDR 5 million, or 6 million [euro], to SDR 175 million (about 210 million [euro]). (5) Those levels were increased by the 1982 Protocol to SDR 300 million.

   Following the Chernobyl nuclear accident, the two main conventions were linked by the 1988 Joint Protocol (6) which entered into force in 1992. However, many important States have not ratified the Joint Protocol, including the United Kingdom and France. Thus those countries are not linked by the treaty system to Vienna Convention arties.

   In 1997, the Vienna Protocol (7) and the Convention on Supplementary Convention (CSC) (8) featured increased limits and introduced a somewhat broader, but still limited, definition of nuclear damage to include preventive steps and environmental reinstatement (9) and made some other changes, such as allowing compensation to residents of non-Contracting Parties. The minimum amount State Parties must make available under national laws was increased to 300 million SDRs (about 360 million [euro]), (10) and the CSC would provide for a supplementary fund. (11) The CSC defines additional amounts to be provided through contributions by State Parties collectively on the basis of installed nuclear capacity and a UN rate of assessment. Any State may adhere to the CSC, whether or not they are Parties to any existing nuclear liability conventions or have nuclear installations on their territories. The CSC has not yet entered into force and is nowhere near entering into force. (12)

   In 2004, a Protocol to amend the Paris Convention and a Protocol to amend the 1963 Brussels Supplementary Convention were adopted, (13) bringing total liability amounts, including State backup funding, to 1.5 billion [euro]. (14) However, those Protocols are not yet in force.

   The Vienna Convention has by far the widest participation, with 33 Parties (15) compared to the Paris Convention's 15 Parties. There are no States party to both, but there are 25...