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Liability and Compensation for Nuclear Damage

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Liability and Compensation for Nuclear Damage LIABILITY AND COMPENSATION FOR NUCLEAR DAMAGE An International Overview NUCLEAR ENERGY AGENCY ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and to contribute to the expan~ion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became Members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973) and Mexico (18th May 1994). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention). NUCLEAR ENERGY AGENCY The OECD Nuclear Energy Agency (NEA) was established on 1st February 1958 under the name of the OEEC European Nuclear Energy Agency. It received its present designation on 20th April 1972, when Japan became its first non-European full Member. NEA membership today consists of all European Member countries of OECD as well as Australia, Canada, Japan, Republic of Korea, Mexico and the United States. The Commission of the European Communities takes part in the work of the Agency. The primary objective of NEA is to promote co-operation among the governments of its participating countries in furthering the development of nuclear power as a safe, environmentally acceptable and economic energy source. This is achieved by: encouraging harmonization of national regulatory policies and practices, with particular reference to the safety of nuclear installations, protection of man against ionising radiation and preservation of the environment, radioactive waste management, and nuclear third party liability and insurance; assessing the contribution of nuclear power to the overall energy supply by keeping under review the technical and economic aspects of nuclear power growth and forecasting demand and supply for the different phases of the nuclear fuel cycle; developing exchanges of scientific and technical information particularly through participation in common services; setting up international research and development programmes and joint undertakings. In these and related tasks, NEA works in close collaboration with the International Atomic Energy Agency in Vienna, with which it has concluded a Co-operation Agreement, as well as with other international organisations in the nuclear field. Publie en fran~s sous le titre : RESPONSABILITE ET REPARATION DES DOMMAGES NUCLEAIRES UNE PERSPECilVE II'ITERNATIONALE ©OECD 1994 Applications for permission to reproduce or translate all or part of this publication should be made to: Head of Publications Service, OECD 2, rue Andre-Pascal, 75775 PARIS CEDEX 16, France. FOREWORD From the beginning of the civil nuclear power industry, it has been realised that the use of nuclear energy involves risks. While the chances of an accident are low, the consequences may be severe and spread across national boundaries. This is why the countries of western Europe, when their nuclear industries were first being established, joined together to create an international regime governing liability and compensation in the case of a nuclear accident- the 1960 Paris Convention, later complemented by the 1963 Brussels Supplementary Convention. This initiative was soon followed by the adoption of the 1963 Vienna Convention, which aimed at worldwide coverage. More than 20 years later, the first nuclear accident with major transboundary consequences occurred at Chernobyl, and led to a fundamental reappraisal of the international liability and compensation regime. This reexamination is still under way. The situation has been both an incentive and a complication for publishing this study. It has been an incentive because of the wide interest in nuclear liability, triggered by the Chernobyl accident and the consequent revision of the regime. In response to this interest, this book describes for the general reader the international nuclear liability and compensation regime, selected national legislative systems and insurance arrangements. The fact that the revision is not yet complete, however, means that it has been necessary to describe a regime in a state of flux. Negotiations began in 1989 with a view to amending the Vienna Convention, and creating a new supplementary funding scheme to increase the amount of compensation available to victims. Although it is not possible to list all the proposals put forward, or to predict with absolute certainty which will eventually be adopted, the chapters on the subject aim at identifying the general trend of ideas and debate. The Secretariat of the Nuclear Energy Agency is grateful to the European Insurance Committee for its co-operation in the preparation of this study. The report is published under the responsibility of the Secretary-General of the OECD, and the views expressed do not necessarily correspond to those of OECD Member countries. *** The Secretariat of the OECD Nuclear Energy Agency wishes to thank Ms. Louise de La Fayette, an international lawyer with the Canadian Department of Foreign Affairs, for her invaluable contribution to the preparation of this report. 3 TABLE OF CONTENTS I. INTRODUCTION 9 The Originality of Nuclear Liability Law . 10 The Necessity for a Special Regime . 10 National Legislation and the International Conventions . 11 Problems Appear . 11 Solutions Proposed . 12 II. ORIGIN OF THE CONCEPT OF CIVIL NUCLEAR LIABILITY . 15 Liability in General . 15 Fault Liability or Strict Liability . 15 Historical Development . 17 The Theory of Liability for Risk and the Concept of Equity . 19 Economic Analysis . 20 Safety and Prevention . 21 Application to the Nuclear Field . 21 Origins . 21 Strict Liability . 22 Channelling and the Exclusive Liability of the Operator . 23 Compulsory Financial Security . 24 Limits on Liability . 25 Time limits . 25 The Role of the State . 26 Scope of the Special Liability . 27 III NUCLEAR LIABILITY INSURANCE . 29 Historical Background . 30 Problems Involved in Third Party Liability Insurance for Nuclear Installations . 31 Nuclear Insurance Pools . 32 Pools Provide a Solution . 32 The International Pooling System . 34 5 Coverage and Capacity . 35 Nuclear Insurance Policies . 36 Liability coverage . 36 Property damage coverage . 39 IV. THE INTERNATIONAL CONVENTIONS . 41 Introduction . 41 The Paris - Brussels System . 43 The Paris Convention on Third Party Liability in the Field of Nuclear Energy . 43 The Brussels Convention Supplementary to the Paris Convention of 29th July 1960 on Third Party Liability in the Field of Nuclear Energy. 52 Revisions, Decisions and Recommendations . 55 The Vienna Convention on Civil Liability for Nuclear Damage . 56 The Maritime Conventions . 59 The Convention Relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material . 59 The Convention on the Liability of Operators of Nuclear Ships . 61 V. NATIONAL REGIMES . 63 Canada .............................................. 64 France ............................................... 66 Germany ............................................. 68 Japan ................................................ 70 Netherlands ........................................... 72 Poland ............................................... 74 Switzerland . 76 United Kingdom . 79 United States . 80 VI. THE ACCIDENT AT CHERNOBYL AND THE NEED FOR CHANGE . 87 The Accident at Chemobyl . 87 Emergency Response and Damage Close to the Accident . 88 Emergency Response and Damage at a Distance from the Accident 89 International Co-operation in Response . 91 Nuclear Safety . 91 Emergency Response . 91 The Conventions on Notification and Assistance . 92 Importance of Emergency Response in Relation to Liability . 93 6 The Joint Protocol Relating to the Application of the Paris Convention and the Vienna Convention . 93 The Problem of Insufficient Geographical Coverage . 94 Functioning of the Joint Protocol . 95 Other Issues . 97 Status of the Joint Protocol . 97 International State Liability . 98 Private International Law and Public International Law . 99 State Responsibility and Liability . 100 State Responsibility for Trans boundary Environmental Harm . 101 One Responsibility Implies Another . 103 Application to the Nuclear Field . 104 VII. UNRESOLVED PROBLEMS . 105 Improvements Required in the Civil Liability Conventions . 105 Geographic Scope . 106 Amount of Compensation and Limitation of Liability . 106 Definition of Damage . 107 Proof of Causality and of Damage . 108 Priorities . 108 Time Limits for Submitting a Claim and Delayed Damage . 109 Exonerations . 109 Military Installations . 109 Lack of Harmonisation . 110 Competent Courts . 110 Procedural Inadequacies of the Civil Liability System . 110 Action at the IAEA . 111 Intervention Levels and the Proof of Damage . ..
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