Consequences of Fukushima accident on international framework for nuclear liability and compensation Open lecture, Higher School of Economics, National Research University, Moscow 7. June 2011 Dr. Jakub Handrlica LL.M. Law School, Charles University in Prague, Czech Republic

Content of presentation 1. Nuclear incident and nuclear damages 2. Existing nuclear third party liability treaties 3. Nuclear third party liability in Japan 4. Consequences of the Fukushima accident

1. Nuclear incident and nuclear damages (1) from the early beginnings of peacefull use of nuclear energy, the international legal framework on nuclear liability tryed to balance 3 rather different interests: 1. protection of potentional victims of a large scale accident 2. support of a new and prospective energy sector 3. interests of nuclear suppliers (in particular the US industry)

1. Nuclear incident and nuclear damages (2) What kind of damages can occur as consequence of a nuclear incident? Personal injuries Medical examination expenses Evacuation expenses Menthal suffering Damage to property Lost of income Costs of measures of reinstatement of impaired environment Costs of preventive measures etc.

2. Existing nuclear third party liability treaties (1) Overview of international organisations, active in the field of nuclear liability: Organisation for Economic Cooperation and Development / Nuclear Energy Agency (OECD/NEA) (originally: European Nuclear Energy Agency) International Atomic Energy Agency (IAEA) European Atomic Energy Community (Euratom) International Maritime Organisation (IMO)

2. Existing nuclear third party liability treaties (2) International treaties of the „first generation“: 1. Convention on Third Party Liability in the Field of Nuclear Energy of 1960 (Paris Convention) 2. Convention on the Liability of Operators of Nuclear Ships of 1962 (Nuclear Ships Convention) 3. Convention Supplementary to the Paris Convention of 29th July 1960 on Third Party Liability in the Field of Nuclear Energy of 1963 (Brussels Suppelementary Convention) 4. Convention on Civil Liability for Nuclear Damage of 1963 (Vienna Convention) 5. Convention relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material of 1971

2. Existing nuclear third party liability treaties (3) International treaties of the „second generation“: 1. Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention of 1988 (Joint Protocol) 2. Protocol to Amend the Vienna Convention on Civil Liability for Nuclear Damage of 1997(1997 Protocol) 3. Convention on Supplementary Compensation for Nuclear Damage, Supplementary Compensation Convention of 1997 (Convention on Supplementary Compensation) 4. Protocol to Amend the Paris Convention Third Party Liability in the Field of Nuclear Energy of 2004 (2004 Protocol) 5. Protocol to Amend the Brussels Supplementary Convention of 2004 (2004 Protocol)

2. Existing nuclear third party liability treaties (4) Basic principles of existing nuclear liability treaties: Strict (absolute) liability Exclusive liability of operator (legal channeling) Liability limitation Congruence principle (mandatory insurance) Very restricted exonerations (war, grave natural disaster etc.) Exclusive jurisdiction of the competent court Time limitations for claims

2. Existing nuclear third party liability treaties (5) Improvements in the treaties of “second generation”: More money available 1997 Protocol> liability limit 300 millions SDR, 2004 Protocols> together 1,5 billions EUR More victims compensated also victims from the non/contracting non/nuclear states and non>contracting states offering reciprocity More damage compensated environmental damages, economical loss, preventive measures etc.

3. Nuclear third party liability in Japan (1) Japan (similarly to India, China, Canada etc.) is not contracting party to any international nuclear liability convention Japanese legislation on nuclear liability: the Act on Compensation for Nuclear Damage the Act on Indemnity Agreements for Compensation for Nuclear Damage Order for the Execution of the Act on Compensation for Nuclear Damage Order for the Execution of the Act on Indemnity Agreements for Compensation of Nuclear Damage

3. Nuclear third party liability in Japan (2) Japanese legislation anchored basically similar basic principles as the international conventions: The operator is strictly and exclusively liable for nuclear damages The liability is not limited in amount The operator is obliged to financially secure its liability up to a certain amount (for nuclear power plants JPY 120 billion which equals EUR 1.05 billion). Where nuclear damage exceeds the financial security amount, the Government may help a nuclear operator to compensate the damage Japan’s Civil Code provides that all rights of action are fully extinguished 20 years following the date of the tort

3. Nuclear third party liability in Japan (3) Questions, which need to be answered very soon: Who will be liable for damages arising as consequence of Fukushima accident? Section 3 of the Compensation Act provides: “Where nuclear damage is caused as a result of reactor operation etc. during such operation, the nuclear operator who is engaged in the reactor operation etc. on this occasion shall be liable for the damage, except in the case where the damage is caused by a grave natural disaster of an exceptional character or by an insurrection ”. How the transboundary damages will be handled? Japan is not a contracting party to any of the international nuclear liability conventions. Should there be claims brought forward from outside Japan claimants will have to rely on general tort law with the burden to establish fault etc.

4. Consequences of the Fukushima accident (1) Status quo of the “second generation” international treaties: Joint Protocol entered into force in 1992, it has currently 26 contracting parties (however, important European nuclear states - France, Belgium, United Kingdom – did not ratify) 1997 Protocol entered into force in 2003, it has currently 9 contracting parties (however, only 2 of them – Argentina and Romania – are nuclear states) Convention on Supplementary Compensation did not entered into force yet 2004 Protocols did not entered into force yet

4. Consequences of the Fukushima accident (2) Facing the Fukushima accident, two basic questions are arising: international (worldwide) vs. regional (or bilateral) nuclear liability relations ?? most recently: Euratom is interested in being more active in the field state responsibility and compensation vs. liability of operator?? take into consideration competition law – related aspects of nuclear subsidies

Thank you for your invitation and attention!! Dr. Jakub Handrlica LL.M. Law School, Charles University in Prague, Czech Republic