UK consults on nuclear liability

The UK government yesterday released a consultation on draft proposals to implement new national laws consistent with the 2004 amendments to the Paris and Brussels conventions on third party liability for nuclear damage. The revision could see operators liable for up to €1200 million ($1600 million) per incident.

The UK government is party to both the Paris and supplementary Brussels convention (as amended in 1984), and domestic laws are embodied in the Nuclear Installations Act of 1965. Yesterday's consultation and draft proposals aim to put the existing UK legislation in line with amendments to the conventions adopted in 2004, although these have yet to be ratified by a majority of contracting countries (the 'Paris countries'), including the UK, and are not yet in force.
 
The government proposals fall mainly into three categories; liability amounts, types of damage and geographical scope.

Raising operator liability 

 
Combined, the Paris and Brussels conventions provide for compensation in a three tier system where the operator (or their insurance) provides for the first level, the state in which the incident occurs provides for the second, and supplementary compensation is provided by the countries party to the Brussels convention.

Under the new UK proposals, the cap for operator liability will be raised from the existing value of approximately €160 million per incident ($220 million), to €1200 million per incident ($1600 million), phased in from a €700 million starting point through €100 million increments over five years.  This substantial raise put the cap far above the €700 million baseline for operator liability required under the 2004 amendments. When the third tier is included, the total amount of compensation made available to claimants would be €1500 million ($2000 million).

The new level of operator liability removes any requirement for the state to pay under the second tier arrangements, before compensation becomes available under the third. In this way, the new laws would enforce the UK government's avowed policy of no-subsidy-for-nuclear. In the government's words, it is "right and proper" that operators provide for both the first and second tier of finance under Brussels.

However, the government's proposals fall short of unlimited operator liability, which is seen as not aiding safety and not fairly reflective of the other onerous requirements imposed on operators by the liability regime.

Further categories of 'damage' 

 
A second proposal aims to add to the types of damage that can be claimed for. The Nuclear Installation Act restricted the definition of claimable damage to personal injury and property damage, but under the new rules four further categories will be added: damages due to loss of income that results from property loss; the cost of repairing an impaired environment; compensation for loss of income due to a direct economic interest in an impaired environment; and the cost of preventative measures taken by private individuals to mitigate damage.
 
Of course adding environmental damage to the list raises questions as to what exactly constitutes environmental impairment, since background radiation levels vary throughout the UK and indeed the world. The government underlines its position here "in order for the impairment to be treated as significant it must, at the very least, be of such a degree that it would be eligible for compensation as property damage under the 1965 Act".

A further revision increases the time for claims to be brought in case of personal and property damage from 10 years to 30 years.

Increasing geographical scope and other measures 

 
The third proposal lists those countries which can potentially make claims. Along with the Paris countries, this has been expanded to include countries party to both the Vienna Convention and the Joint Protocol, countries with no nuclear installations and countries with identical and reciprocal liability arrangements.
 
Other measures would see an increase in the operator liability cap for low risk facilities from €10 million to €70 million. It would also see the government adopt a lower liability level – €80 million – for the transport of certain low risk materials, and would enforce tougher rules for the transfer of liability for nuclear materials. Another measure would see high level waste disposal facilities subject to the €1200 million liability regime, and low level facilities subject to the reduced €70 million requirement; though the government currently intends to fight for an exemption for low level waste facilities from the Paris regime.

The UK government will now discuss its proposals with the country's nuclear industry, which together with foreign investors plans to replace retiring nuclear power plants with a new fleet throughout the 2020s. The consultation ends on 28 April.