Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 11
3
Status of Liability and Insurance
Laws for International Shipments
of Spent Nuclear Fuel
Norbert Pelzer
University of Goettingen
INTERNATIONAL SHIPMENT:
A CHALLENGE FOR THE LAW OF CONFLICT
Exposition of Legal Problems
The international shipment of spent nuclear fuel is the movement of such
materials from one national jurisdiction to at least one other national jurisdic-
tion. In the case of transit, there are one or more additional national jurisdictions
involved. While the shipment is in the territory of a certain state, it is subject to
the laws and regulations of that state. This also includes the civil liability regime.
The changing of jurisdictions during transportation, of course, requires the carrier
or the sending operator and the receiving operator to meet the requirements of
the legislation of the state whose territory they are passing through. In particular,
carriers and operators have to take care that their third-party liability insurance
or any other financial securities to cover liabilities are in line with the applicable
legislation.
International shipments of spent fuel, therefore, pose problems to carriers
and operators. But they also create problems for potential victims of nuclear
incidents during transport. The following questions have to be answered:
• Which court is competent to hear claims?
• Which law is applicable to the incident?
• Is there a guarantee that the judgments of a competent court will be
acknowledged and enforced in the country of the person liable?
OCR for page 12
SPENT NUCLEAR FUEL STORAGE FACILITIES
• Is there a guarantee that compensation amounts awarded can be freely
transferred to the state of the victim?
These questions are basic ones that are typical of the international law of
conflict. They imply a great number of difficult legal problems, and, being a
lawyer, I would like to qualify them as a kind of “gourmet dinner” for lawyers.
There is no doubt that gourmet dinners are a costly pleasure. Clever attorneys try
to find the place where the best dinner is served; this is called “forum shopping.”
Lawyers shop for the most favorable law applicable. In summary, the legal dif-
ficulties consequential to any international nuclear transport accident very often
form a major hurdle for quick and smooth compensation for damages. Neither
victims nor persons liable can be satisfied by that situation. This holds particu-
larly true if we take into account that nuclear incidents are politically sensitive
events, and the political elements of such incidents contribute to the complexity
of the case.
What can be done to prevent or at least mitigate such an unfavorable legal
situation?
Global Treaty Relations
The answer is simple: We need treaty relations among all states involved in a
certain transport or—even better—we need global treaty relations. Such an inter-
—even
even —we
we
national regime based on an agreement would do away with the often incalculable
risks of the general rules of private international law. The agreement should con-
tain rules on a single competent court, it should contain rules on the applicable
law, and it should ensure the enforcement of judgments and the free transfer of
money. Such an agreement would certainly be the ideal situation, but since we do
not live in an ideal world, we have to see what reality is offering us.
There are international nuclear liability conventions that also apply to in-
ternational shipments of spent nuclear fuel, and these conventions contain all
the elements enumerated above. Currently, the following international nuclear
liability conventions exist:
• Worldwide international nuclear liability conventions:
— Vienna Convention on Civil Liability for Nuclear Damage of 21 May
1963 (35 state parties)1
— Protocol to Amend the Vienna Convention on Civil Liability for
Nuclear Damage of 12 September 1997 (5 state parties)2
— Convention on Supplementary Compensation for Nuclear Damage of
12 September 1997 (3 state parties but not yet in force)3
1 IAEA Doc. INFCIRC/500 = UNTS, vol. 1063, p. 266.
2 IAEA Doc. INFCIRC/566 = 36 ILM 1461 (1997).
3 IAEA Doc. INFCIRC/567 = 36 ILM 1473 (1997).
OCR for page 13
STATUS OF LIABILITY AND INSURANCE LAWS
• Regional international nuclear liability conventions:
— Paris Convention on Third-Party Liability in the Field of Nuclear
Energy of 29 July 1960, as amended by the Additional Protocol of 28 January
1964 and the Protocol of 16 November 1982 (15 state parties)4
— Protocol to Amend the Convention on Third-Party Liability in the
Field of Nuclear Energy of 29 July 1960, as amended by the Additional Protocol
of 28 January 1964 and the Protocols of 16 November 1982 and 12 February
2004 (the later not yet in force)5
— Brussels Convention of 31 January 1963 Supplementary to the Paris
Convention of 29 July 1960, as amended by the Additional Protocol of 28 January
1964 and the Protocol of 16 November 1982 (12 state parties)6
— Protocol to Amend the Convention of 31 January 1963 Supplemen-
tary to the Paris Convention of 29 July 1960 on Third-Party Liability in the Field
of Nuclear Energy, as amended by the Additional Protocol of 28 January 1964
and the Protocols of 16 November 1982 and 12 February 2004 (the latter not yet
in force)7
Unfortunately, only 50 states are contracting parties to these conventions. All
the other states of the world, including those with major nuclear programs, are
not parties to any of these conventions. Among those states are the United States,
Canada, China, Japan, India, South Korea, and South Africa.8 Many of the states
not party to the conventions nevertheless enacted nuclear liability legislation that
in substance follows more or less the principles of the international nuclear li-
ability conventions.
Consequently, there are three groups of states:
• States party to the international nuclear liability conventions
• States having enacted national nuclear liability legislation without being
party to any of the conventions
• States without any specific nuclear liability legislation
There are 20 million shipments of radioactive materials transported annually.
Each shipment is made up of either a single package or a number of packages
transported from one location to another. The overwhelming majority of these
4 Reproduced in OECD/NEA, Paris Convention on Third Party Liability in the Field of Nuclear
Energy, etc., Paris, 1989, and available on the Internet at http://www.nea.fr/html/law/nlparis_con.
html.
5 Not yet officially published. The text is available on the Internet at http://www.nea.fr/html/law/
paris_con.html.
6 See footnote 4 and http://www.nea.fr/html/law/nlbrussels.html.
7 Not yet officially published. The text is available on the Internet at http://www.nea.fr/html/law/
brussels_supplementary.html.
8The box at the end of this paper shows the participation of states with civilian nuclear programs
in the nuclear liability conventions.
OCR for page 14
SPENT NUCLEAR FUEL STORAGE FACILITIES
shipments relate to non-fuel-cycle transports, while only a very small fraction
relate to fuel-cycle transports, which includes the transportation of spent nuclear
fuel.9
Below, I deal first with international shipments among contracting parties
to the nuclear liability conventions and, second, with shipments between states
without respective treaty relations.
THE TRANSPORT REGIME OF THE INTERNATIONAL
NUCLEAR LIAbILITY CONVENTIONS
basic Concept
The leading concept of the international nuclear liability conventions is that
all liability for nuclear damage is concentrated on the operator of the nuclear
installation in which the nuclear incident took place or the installation from
which the nuclear material originates. This so-called legal channeling of liability
to the operator liable is supported and strengthened by a number of additional
elements. One of those elements is the liability for nuclear damage occurring
during the course of transportation. As a general rule, it is not the carrier that is
held liable for a nuclear incident but rather the sending or receiving operator of
a nuclear installation. The carrier can only be held liable in exceptional cases
and following a special procedure: Provided the installation state has enacted
relevant legislation, a carrier of nuclear material may, at his request and with the
consent of the operator concerned, be designated or recognized as the operator
with respect to such nuclear material. If the requirements of that procedure are
fulfilled, the carrier is treated like an operator of a nuclear installation situated
within the territory of that state.
Concentrating Liability on the Operator of a Nuclear Installation
The provisions for liability for nuclear damage caused during the course of
transport are identical in all of the three international conventions providing the
basis for nuclear liability, namely the Vienna Convention (VC), the Paris Con-
vention (PC), and the Convention on Supplementary Compensation for Nuclear
Damage (CSC). It is obvious that this identical approach simplifies the legal
situation. The respective provisions in the three conventions are Article II para. 1
sub-paras. b and c VC, Article IV PC, and Article III para. 1 sub-paras. b and c
of the Annex to the CSC. The Revision Protocols to the Paris Convention and the
Vienna Convention did not change the transport provisions in substance.
9 Seeinformation from the World Nuclear Transport Institute on the Internet at http://www.wnti.
co.uk/nuclear-transport-facts/facts-and-figures/key-facts.
OCR for page 15
5
STATUS OF LIABILITY AND INSURANCE LAWS
The contents of the conventions’ liability provisions on transport follow a
simple pattern: The sending operator is liable for nuclear damage
• before liability with regard to nuclear incidents has been assumed pursu-
ant to the express terms of a contract in writing by the operator of another nuclear
installation;
• in the absence of such express terms, before the operator of another
nuclear installation has taken charge of the material;
• if the nuclear material is intended to be used in a nuclear reactor with
which a means of transport is equipped, the sending operator is liable before
the person duly authorized to operate such reactor has taken charge of the
materials;
• in case of a transport sent to a person within the territory of a noncon-
tracting state, the operator is liable before the material is unloaded from the
means of transport by which it has arrived in the territory of the noncontracting
state.
If the nuclear material is sent to a nuclear installation, the liability of the
receiving operator is formed in a symmetric way: The receiving operator may
either assume liability pursuant to the express terms of a contract in writing or,
in the absence of such terms, after he has taken charge of the nuclear material. If
the material is sent from a means of transport equipped with a nuclear reactor, the
receiving operator will be liable after he has taken charge of the nuclear material.
If the nuclear material was sent with the written consent of the receiving operator
from a person within the territory of a noncontracting state, the receiving opera-
tor will only be held liable after the material has been loaded on the means of
transportation by which it is to be carried from the territory of that state.
The structure of this transport liability concept is clear and simple. It is
stipulated that transportation only takes place between the sending and receiving
operators of a nuclear installation, and one of them is held liable exclusively. A
consequence of this structure is that material that is sent to a person who is not
an operator in the sense of the convention, for example, a professor at a university
or a research laboratory, the sending operator remains liable for damage caused
by that material.
Deficiencies of the International Regime
As long as the transportation takes place only between or among contracting
parties of the same convention, there is no problem in determining the competent
court and applicable law. The respective jurisdiction provisions in the conventions
(Article XI VC, Article XIII PC, Article XIII CSC) clearly define the competent
court. As a general rule, it will be the court of the country in which the nuclear in-
cident occurred. The court will apply the lex fori, and judgments will be enforced
OCR for page 16
6 SPENT NUCLEAR FUEL STORAGE FACILITIES
in the territories of all contracting parties. All victims will be treated equally in
accordance with the respective articles of the conventions. In summary and in
principle, among contracting parties, law of conflict problems do not exist.
The conventions offer a widely unified nuclear liability regime that is de-
signed for the specifics of the nuclear risk. In particular, they ensure that the op-
erator has and maintains insurance or other financial security to cover its liability
(Article VII VC, Article X PC, Article V Annex to the CSC). There is, however,
no harmonization of the individual liability amounts, and consequently, also
among contracting parties there remain differences, which may be considerable.
The benefits of being a party to the conventions only apply to those states that
are party to the same convention. If a person in a VC state or a CSC state suffers
damage from a transportation for which the operator of a PC state has assumed
liability, neither the Paris Convention nor one of the other two conventions will
apply. In principle, there is no link among the three conventions: Their territo-
rial scope of application is limited to the contracting parties, and vis-à-vis other
states, the general rules of the law of conflict have to determine the applicable
law, including the competent court. This unfavorable situation will be slightly
improved when the Revision Protocols to the VC, the PC, and the CSC attract
considerably more states and enter into force respectively. These new instruments
provide for a broader territorial scope of application and extend their benefits in a
well-defined way also to noncontracting states (Article I A VC rev., Article II PC
rev.10). However, such territorial extension is only a unilateral act of the parties to
the conventions and does not do away with the private international law problems
with regard to noncontracting states.
International bridging Instruments
To make things even more complicated, we have to take into account that
there are two international instruments that aim to bridge the international con-
ventions and thus at least mitigate or even entirely abolish the drawbacks of the
application of general private international law rules.
The first instrument is the CSC, which is not yet in force. Obviously, if there
were universal adherence to this instrument, or at least adherence of the main
players in the shipment of spent nuclear fuel, this convention would create treaty
relations among the parties to the VC, the PC, and the so-called annex states with
their domestic nuclear liability legislation (Article XIV CSC) and thus would
provide legal harmonization among the participants.
Regarding the VC and the PC, the Joint Protocol relating to the application
10With regard to the CSC, the Annex to that convention does not contain any territorial restrictions
of the national law; however, supplementary compensation under the CSC shall only be made avail-
able in accordance with the restrictions under Article V.
OCR for page 17
7
STATUS OF LIABILITY AND INSURANCE LAWS
of the Vienna Convention and of the Paris Convention of 21 September 1988 11
establishes a bridge between the two conventions by extending the benefits of
both instruments mutually. The choice of law rules in the protocol determines the
competent court and the applicable law. There is no need to resort to the general
rules of private international law. Currently, the protocol has 25 parties only,
namely 15 Vienna states and 10 Paris states.12
Assessing the International Regime
A summary of this short exposé of the liability situation under the interna-
tional nuclear liability conventions is encouraging and discouraging at the same
time.
As long as nuclear incidents occur within the “family” of one and the same
convention, the legal situation related to the choice of laws and the substance of
the law applicable is satisfactory, although liability amounts sometimes may be
insufficient. When, however, the state of the operator that is liable and the state of
the victim are parties to different conventions, compensation for nuclear damage
is subject to the general rules of private international law, which is a field of law
difficult to predict. The joint protocol solves the problems only to a territorially
limited extent. The CSC is not yet in force and may offer only a medium- or a
long-term perspective. There are some 50 states in the world that are parties to
the nuclear liability conventions, and even among them there is no satisfactory
harmonization of the liability regime.
INTERNATIONAL SHIPMENTS OUTSIDE THE REGIME OF THE
INTERNATIONAL NUCLEAR LIAbILITY CONVENTIONS
General Sources of the Law of Conflict
In case of shipments among or to and from states not party to any of the
nuclear liability conventions, senders, consignees, and carriers have to deal with
the question of the relevant court and the applicable law on the basis of the gen-
eral rules of private international law. Such general sources might be regional
or universal treaties or, as applicable, national law of the states involved in the
shipment. State involvement may be, inter alia, based on the nationality of the
persons involved in the incident, either as tortfeasor or as victim, of the place
where the incident took place or on a contract concluded and designed for a
specific shipment.
11 IAEA Doc. INFCIRC/402.
12 IAEA Doc. Registration No. 1623.
OCR for page 18
8 SPENT NUCLEAR FUEL STORAGE FACILITIES
Jurisdiction
There is no worldwide international instrument regulating jurisdiction. The
efforts of the Hague Conference on Private International Law to establish a global
regime have not yet been successful.
At the regional level, there exist European instruments on jurisdiction, namely
the Brussels Convention of 196813 and its successor, the European Union (EU)
Council Regulation No. 44/2001 of December 22, 2000, on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters.14 There is also the
Lugano Convention of 198815 on the same subject. All three instruments contain
more or less identical rules on jurisdiction. The victim has a choice of the court:
He may sue at the court of the place of the defendant’s domicile or at the place
where the incident occurred. The place of the incident includes both the place
where the tortfeasor acted or where the damage was suffered.
If there are no international instruments applicable, the jurisdiction will be
determined by national law. Obviously, there exists a great variety that cannot be
elaborated on here. One might, however, conclude that in most states rules similar
to those of the European instruments apply.
In the context of this workshop, U.S. law surely is of greatest interest. Since
I am speaking in the presence of our U.S. colleagues, I am most reluctant to make
statements on the U.S. law. Generally speaking, the United States is not a state
with a unitary civil law system. The individual states have competence in civil law
matters, a fact that may entail considerable differences. Generally speaking again,
I would like to say that U.S. courts claim a very broad approach to international
jurisdiction. Even rather transient contacts may be sufficient to make U.S. courts
competent. This is called “long-arm statutes.”
With regard to the Russian statutes, I shall entirely refrain from any state-
ment. Since I cannot speak Russian, I would have to rely on secondhand sources,
which I do not accept as a sound approach to a foreign law system.
The Applicable Law
The competent court, in general, will apply its domestic law to the case. If the
respective country has enacted special nuclear liability legislation, the principles
of that legislation will mostly be similar to the law of the international nuclear
liability conventions. This applies, for example, to Canada, Japan, and South
Korea. The U.S. law also belongs to this group, but in the U.S. nuclear liability
law there are also elements that are not entirely compatible with the law of the
conventions.
The great majority of states did not issue special nuclear liability laws.
13 Official Journal of the EC No. L 299/32 (1972).
14 Official Journal of the EC No. L 12/1 (2001).
15 Official Journal of the EC Nos. L 319/9 (1988) and L 20/38 (1989).
OCR for page 19
9
STATUS OF LIABILITY AND INSURANCE LAWS
The applicable statutes will be the general civil code and, as the case may be,
environmental liability law, water law, and other sources. General civil liability
law mostly is based on fault on the part of the tortfeasor and is not limited in
amount.
Recognition and Enforcement of Judgments,
Transfer of Compensation Amounts
Recognition and enforcement of judgments in a state other than the state
of the court in most states require an express agreement between the states con-
cerned. Some states recognize and enforce foreign judgments on the basis of
reciprocity, as, for example, Russia in accordance with a decision of the Supreme
Court of the Russian Federation of 7 June 2002.16 Many states concluded relevant
agreements with their neighboring states, but there is no global instrument of that
type. At the regional European level, there are the instruments referred to above,
in particular EU Regulation 44/2001/European Community.
In most states national currencies are freely transferable. However, this is-
sue must be addressed, as the case may be, to ensure that victims receive their
compensation.
CONCLUSION
This brief overview of the problems of nuclear liability connected with the
international shipment of spent nuclear fuel shows a multicolored picture. It also
shows that operators and carriers face complex problems if a nuclear incident
occurs during the course of a shipment.
If the nuclear incident and the damage suffered occur within the territorial
scope of application of one of the three international nuclear liability conventions,
the law of that convention, as implemented by the respective contracting party,
applies (Box 1). That law includes rules on the relevant court, the applicable law,
the recognition and enforcement of judgments, and the free transfer of compen-
sation amounts. If, however, the nuclear incident is not entirely covered by one
convention, the people involved in the incident easily may get lost in the jungle
of private international law. Both victims and persons liable will face major legal
problems.
If the amounts covering the operator’s liability are limited, or even if the li-
ability is unlimited, there will be major problems if, under general law of conflict
rules, several courts have jurisdiction and distribute the money without knowing
about the total extent of the damage.
The corollary for the subject of this workshop, namely International Re-
positories for Spent Nuclear Fuel, is quite obvious: International repositories per
16The judgment is in German translation reproduced in Praxis des Internationalen Privat- und
Verfahrensrechts (IPRax), 2003, pp. 356 et seq.
OCR for page 20
20 SPENT NUCLEAR FUEL STORAGE FACILITIES
BOX 1
Nuclear Power Generating Countries’ Participation in
Nuclear Liability Conventions
World’s nuclear power generating countries that are contracting parties/states
to the:
• Paris Convention on Nuclear Third Party Liability, amended 1964 and 1982
(PC)
• Brussels Supplementary Convention, amended 1964 and 1982 (BSC)
• 1963 Vienna Convention on Civil Liability for Nuclear Damage (VC)
• Protocol to Amend the 1963 Vienna Convention (VCP)
• Convention on Supplementary Compensation for Nuclear Damage (CSC)
(not in force)
Note: The 2004 Protocol to Amend the Paris Convention has been signed by 16
countries but has not yet been ratified, approved, or accepted by any of the sig-
natories. The 2004 Protocol to Amend the Brussels Supplementary Convention
has been signed by 13 countries and ratified by one (Spain).
Argentina: VC, VCP, CSC Mexico: VC
Armenia: VC Netherlands: PC, BSC
Belgium: PC, BSC Pakistan
Brazil: VC Romania: VC, VCP, CSC
Bulgaria: VC Russian Federation: VC
Canada Slovak Republic: VC
China Slovenia: PC, BSC
Czech Republic: VC South Africa
Finland: PC, BSC Spain: PC, BSC
France: PC, BSC Sweden: PC, BSC
Germany: PC, BSC Switzerland
Hungary: VC Taiwan
India Ukraine: VC
Japan United Kingdom: PC, BSC
Korea United States
Lithuania: VC
SOURCE: Schwartz, J.A. 2006. International nuclear third party liability law: The
response to Chernobyl, p. 72 in International Nuclear Law in the Post-Chernobyl
Period: A Joint Report by the OECD Nuclear Energy Agency and the International
Atomic Energy Agency. Paris: OECD.
definitionem need international shipments of spent fuel. It is, therefore, one of
the essential prerequisites of the operation of an international repository for spent
fuel that the state in the territory of which the repository is operated and all those
states that are planning to use the repository are contracting parties to the same
international nuclear liability convention.
