Before 1997, the international liability regime was embodied primarily in two instruments:
-the IAEA’s Vienna Convention on Civil Liability for Nuclear Damage of 1963 (entered into force in 1977), and
-the OECD’s Paris Convention on Third Party Liability in the Field of Nuclear Energy of 1960 which entered into force in 1968 and was bolstered by the Brussels Supplementary Convention in 1963.
These Conventions were linked by the joint Protocol adopted in 1988 to bring together the geographical scope of the two. They are based on the concept of civil law and share the following main principles:
Liability is channelled exclusively to the operators of the nuclear installations;
Liability of the operator is absolute, i.e. the operator is absolute, i.e. the operator is held liable irrespective of fault, except for “acts of armed conflict, hostilities, civil war or insurrection”;
Liability of the operator is limited in amount. Under the Vienna Convention the upper ceiling is not fixed; but it may be limited by legislation in each State.
Liability is limited in time. Generally, compensation rights are extinguished under both Conventions if an action is not brought within ten years;
The operator must maintain insurance or other financial security for an amount corresponding to his liability or the limit set by the Installation State, beyond this level the Installation State can provide public funds but can also have recourse to the operator;
Jurisdiction over actions lies exclusively with the courts of the Contracting Party in whose territory the nuclear incident occurred;
Non-discrimination of victims on the grounds of nationality, domicile or residence.
The Paris Convention set a maximum liability of 15 million Special Drawing Rights – SDR (about EUR 18 million), but this was increased under the Brussels Supplementary Convention up to a total of 300 million SDRs (about EUR 360 million), including contributions by the installation State up to SDR 175 million (EUR 210M) and other Parties to the Convention collectively on the basis of their installed nuclear capacity for the balance.
Following the Chernobyl accident in 1986, the IAEA initiated work on all aspects of nuclear liability with a view to improving the basic Conventions and establishing a comprehensive liability regime. In 1988, as a result of joint efforts by the IAEA and OECD/NEA, the Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention was adopted. This broadened the coverage of the two Convention combining them into one expanded liability regime. It was also intended to obviate any possible conflicts of law in the case of international transport of nuclear material. It entered into force in 1992.
Also in 1997 IAEA parties adopted a Convention on Supplementary Compensation for Nuclear Damage (CSC). This defines additional amounts to be provided through contributions by States Parties collectively on the basis of installed nuclear capacity and a UN rate of assessment, basically at 300 SDRs per MW thermal (ie about EUR 360 million total). The CSC – not yet ratified – is an instrument to which all States may adhere regardless of whether they are parties to any existing nuclear liability conventions or have nuclear installations on their territories.
The Protocol amending the Vienna Convention – ratified in 2003 – broadens the definition of nuclear damage (now also addressing the concept of environmental damage and preventive measures), extends the geographical scope of the Convention, and extends the period during which claims may be brought for loss of life and personal injury. It also provides for jurisdiction of coastal states over actions incurring nuclear damage during transport.
In 2004, contracting parties to the OECD Paris (and Brussels) Conventions signed Amending Protocols which brought the Paris Convention more into line with the IAEA Conventions amended or adopted in 1997. The principal objective of the amendments was to provide more compensation to more people for a wider scope of nuclear damage. They also shifted more of the onus for insurance on to industry. These Protocols are expected to be ratified by the contracting parties once they have consulted with industry stakeholders and then drafted the necessary amending legislation.
Beyond such provision there is at least a tacit acceptance that the installation state will make available funds to cover anything in excess of these provisions, just as is the case with any major disaster – natural or other (the main ones have been chemical plants). This has long been accepted in all developed countries. In the event of government payout to meet immediate claims however, the operator’s liability is in no way extinguished, and taxpayers would expect to recover much or all of the sums involved.
Beyond the international conventions, most countries with commercial nuclear programs also have their own legislative regimes for nuclear liability. These national regimes implement the conventions’ principles, and impose financial security requirements which vary from country to country. There are three categories of countries in this regard: those that are party to one or both of the international conventions and have their own legislation, those that are not parties to an international convention but have their own legislation (notably USA, Canada, Japan, S. Korea), and those that are not party to a convention and are without their own legislation (notably China).