Transcript International Treaties on Insurance and Liability related

International Treaties on
Insurance and Liability related
to Nuclear Accidents
Michel Vandersmissen
Attorney-at-law, Brussels Bar
AEEC, 23 November 2009
General outline
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Introduction
International Framework
US Framework
Case Studies:
– Belgium
– UK
– Germany
Ratio Legis
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Why limit nuclear liability?
– 1950’s: considered necessary to expand
nuclear industry
– Original amount of Paris Convention was
merely 5-15 million SDR (€ 9-18 million)
General principles of nuclear liability
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Strict liability of the nuclear operator
Exclusive liability of the nuclear operator
Limitation of liability in amount and time
Mandatory financial coverage of the
operator’s liability
Exclusive jurisdiction
International Framework
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Paris Convention and Brussels
Supplementary Convention
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Vienna Convention
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Joint Protocol
Paris Convention and Brussels
Supplementary Convention
Paris Convention on Third Party Liability in the
Field of Nuclear Energy (PC)
• Signed under the auspices of OECD-NEA
in 1960
• Entered into force in 1968
• Signed by most West-European countries
• Completed by additional protocols in
1964, 1982 and 2004
Paris Convention and Brussels
Supplementary Convention
Fundamental principals of nuclear liability:
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Exclusive liability (art. 3)
Strict liability (art. 4)
Limitation of liability in amount (art. 7)
Limitation of liability in time (art. 8)
Financial security (art. 10)
Territory of contracting states (art. 2)
Paris Convention and Brussels
Supplementary Convention
Brussels Convention supplementary to the
Paris Convention (BSC)
• Signed in 1963
• Entered into force in 1974
• System of additional compensation:
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Three-tier system of supplementary compensation
Only on territory of contracting parties
Paris Convention and Brussels
Supplementary Convention
• Three-tier system of supplementary
compensation (art. 3, b)
1. 5 million SDR by operators
2. 5-175 million SDR by State
3. 175-300 million SDR by contracting parties
2004 Paris/Brussels Protocol
Protocols to amend the PC and BSC
(signed 2004, not into force)
• New limits of liability:
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€ 700 million for operators
€ 500 million for installation state
€ 300 million for contracting parties
• Definition of “nuclear damage” broadened
• Not yet into force, old limits still apply
Vienna Convention
Vienna Convention on Civil Liability in the Field
of Nuclear Energy
• Signed under the auspices of the IAEA in
1963
• Entered into force in 1977
• Wider geographic scope than Paris
Convention; signed by 33 countries of
Central, Southern and Eastern Europe
and Africa, South America and Asia
• Completed by additional Protocols of 1997
Vienna Convention
Principals are similar to Paris Convention:
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Absolute and exclusive liability (art. II-IV)
Limitation of liability in amount (art. V)
Limitation of liability in time (art. VI)
Operator provides financial security (art. VII)
States ensure payment of claims (art. VII)
Only in territory of contracting states (art. XI)
Additional Protocols 1997
Protocol to amend the Vienna Convention
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Possible limit of operator’s liability at 300 million SDR
Broadens definition of “nuclear damage”
Extends geographical scope
Extends the period for claims
Jurisdiction for coastal states
Entered into force in 2003, but with few members
Convention on Supplementary Compensation
for Nuclear Damage (CSC)
– Additional amounts by state parties
– Not yet ratified
Joint Protocol
Joint Protocol relating to the application of the
Vienna Convention and the Paris Convention
• Signed under the auspices of both OECD/NEA and
IAEA in 1988
• Entered into force in 1992
• Brings the geographical scope of two conventions
together
• Bridge between the two conventions
• Broadens coverage of two conventions
• Obviates possible conflicts of law in case of
international transport of nuclear material
US Framework
• USA is not party to any international
liability convention
• Price Anderson Act (1957)
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Renewed for 20 years in 2005
US$ 10 billion in cover
No fault needs to be proven
Individual operators are responsible for two
layers of insurance coverage
Price Anderson Act
• Two layers of insurance coverage:
– First layer:
• Each nuclear site must purchase US$ 300 million
liability cover
• provided by two private insurance pools
• Average annual premium is $ 400,000
• Financial liability >< legal liability in European
liability conventions
Price Anderson Act
– Second layer:
• Jointly provided by all US reactor operators
• Funded by retrospective payments if required of up
to $ 112 million/reactor/accident
• Collected in annual instalments of $ 17.5 million
– Total provisions over $ 10 billion
– Beyond this cover, Congress acts as insurer
of last resort
Case study: Belgium
Act of 22 July 1985 on Civil Liability in the Field
of Nuclear Energy (last modified by Act of 11 July 2000)
– Strict and exclusive liability (art. 5)
– Liability is limited to € 297.5 million (art. 7 and 17)
– Beyond this limit, Paris/Brussels system applies (art.
19)
– Operator provides financial security (art. 8)
– Direct right of action against insurer (art. 27)
– Liability is limited to 10 years (art. 23.1)
Case Study: UK
Energy Act 1983
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Ratification of Paris/Brussels Conventions
Operators are liable for claims up to £ 140 million
Beyond this limit, Paris/Brussels system applies
Government plans legislation for 2010:
• Insurance towards € 700 million (2004 Paris/Brussels
Protocol, when it enters into force)
• Insurance is to be provided by Government at commercial
rates
Case study: Germany
Act of 2002 on the Peaceful Use of Atomic
Energy and the Protection against its Hazards
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Ratification of Paris/Brussels Conventions
Unlimited operator liability
Maximum amount of coverage of € 2.5 billion
Not available in the insurance market;
complementing coverage scheme