Stop the Hogs!

Toronto-Star: Nuclear Liability Limit called Too Low

From: Gordon Edwards
Sent: Thursday, July 02, 2009 8:21 AM

Some background to this story:

Many people are unaware that they cannot buy insurance for their property or their persons that will protect them financially in the event of a nuclear accident. Every insurance policy has a "nuclear exclusion clause" that voids all coverage in such an event.

To encourage and subsidize nuclear power, the federal government has a special law which limits the liability of the owner of any nuclear plant to a small portion of the anticipated financial damage from such an accident (it's sort of a "nuclear deductible" clause) while the Government -- that is, the taxpayer -- provides total coverage for the tens of billions of dollars in damages to citizens who suffer the devastating effects of such an accident.

This "Nuclear Liability Law" also exempts equipment manufacturers from any liability whatsoever, even if their equipment was defective and caused the nuclear accident to happen.

A few questions come to mind.

(1) If this industry is so safe, why won't the insurance companies cover them?

(2) If nuclear accidents are so improbable, how come the owners of nuclear plants won't build these reactors unless they are given legal protection from full financial liability by the Government?

(3) If nuclear suppliers are so reliable, why won't they sell equipment for nuclear plants unless they have a law which protects them from all liability?

Below is a copy of my testimony on this topic to the House of Commons Committee on Natural Resources in November 2007.

If you want to know why $650 million is woefully inadequate to cover the consequences of a nuclear accident, consult http://www.ccnr.org/crac.html.

Gordon Edwards.

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Nuclear liability limit called too low

www.thestar.com/news/canada/article/659526

Legal coverage in case of accident should be in billions, says NDP MP
Jul 02, 2009 04:30 AM

Richard J. Brennan, Toronto Star, OTTAWA BUREAU

OTTAWA. The Conservative government is putting the nuclear industry ahead of the lives of Canadians with a proposed law limiting damages in the event of an accident, a New Democrat MP says.

The government wants to update the Nuclear Liability Act to increase the maximum to $650 million in damages from the current $75 million set in the 1970s, but the NDP's Nathan Cullen said it should be in the billions of dollars.

"The crux of it is how much you can sue for in the event of a nuclear accident," said the MP for Skeena-Bulkley Valley.

Cullen said it's difficult to have confidence in an industry that has to be afforded this kind of protection in the first place, but completely another matter to lowball the cost of human life. "Get somewhere in the ballpark ... into the billions for sure," he said in an interview.

On March 24, 2009, the federal government reintroduced Bill C-20, which proposes to replace the Nuclear Liability Act with a specific civil liability regime for nuclear incidents.

The bill is before the Commons natural resources committee when Parliament resumes in September and the NDP is hoping to delay the bill so it falls off the table when there is another election.

Cullen said the liability limit is about $10 billion in the U.S. In most other countries there is no ceiling.

"It is a pretty unusual situation as far as we can tell that Canada would have this very low ceiling," he said.

Cullen and other critics suspect the reason behind the $650 million figures is to make Canada more attractive for companies wanting to build nuclear power plants.

Full Text: www.thestar.com/news/canada/article/659526

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Comments on Bill C-5 - The Nuclear Liability and Compensation Act
by Gordon Edwards, Ph.D., President, Canadian Coalition for Nuclear Responsibility - invited testimony before the Standing Committee on Natural Resources November 29 2007

1. My name is Gordon Edwards. I have a PhD in mathematics. I graduated originally with a gold medal in mathematics and physics from the University of Toronto. I have been involved for over 30 years as president of the Canadian Coalition for Nuclear Responsibility and also as a consultant to both governmental and non-governmental bodies on nuclear issues, on issues related to nuclear safety and radioactive materials.

2. Before it is used in a nuclear reactor, uranium fuel can be safely handled using only a pair of gloves. Inside the reactor, however, hundreds of new radioactive substances are created called “fission products”. These are the broken pieces of uranium atoms which have been split. The fission products are millions of times more radioactive than fresh uranium fuel. Immediately after being discharged from a reactor, a single CANDU fuel bundle can deliver a lethal dose of penetrating radiation in just 20 seconds to any unprotected person standing one metre away. This intense radioactivity is due to the presence of fission products. Indeed, the irradiated fuel is so radioactive that it has to be cooled under 14 feet of circulating water for at least 7 to 10 years or it will spontaneously overheat, experience self-inflicted damage, and release radioactive gases and vapours.

3. Inside the core of a reactor, even after the fission process has been completely shut down, the radioactivity of the fission products is so intense that the core continues to generate 7 percent of full power heat. That’s an awful lot of heat, and if adequate cooling is not provided – even after complete shutdown of the reactor -- the residual heat is more than enough to melt the core at a temperature of 5000 degrees Fahrenheit. When the fuel melts, large quantities of fission products are released as gases, vapours, and ashes. I have provided the Committee members with excerpts from four official Canadian documents. These excerpts confirm the fact that core-melting accidents are possible and even probable if Canada chooses to build a large fleet of nuclear reactors. The official bodies that produced the documents from which these excerpts were taken are the Ontario Royal Commission on Electric Power Planning, the Atomic Energy Control Board, the federal Department of Energy, Mines and Resources, and the Select Committee on Ontario Hydro Affairs.

4. As a participant in the deliberations of both the Royal Commission on Electric Power Planning and the Select Committee on Ontario Hydro Affairs, I can assure the Committee members that the rationale for Bill C-5 is based on the potential offsite consequences of fuel melting accidents. For without fuel melting, it is not possible for a nuclear accident to have offsite property damages exceeding $10 million. However, the consequences of core melt accidents can typically run to tens of billions of dollars, or even hundreds of billions of dollars, and can make large regions of land uninhabitable for a considerable period of time. In the case of such a catastrophe, Bill C-5 limits the liability of nuclear operators to a very modest amount (less than half the cost of retubing a reactor), it eliminates all liability for nuclear equipment suppliers – even if they supplied defective equipment which caused the accident – yet it does not address any important measures that would limit the overall financial liability to the Canadian taxpayer or the societal liability of any of the affected populations.

5. The Canadian Coalition for Nuclear Responsibility feels that it is important for the elected representatives of the people to ensure that the nuclear industry is held publicly accountable, and to ensure that the best interests of Canadians are not compromised in order to serve the interests of the nuclear industry. We believe that the figure of $650 million has no sound scientific or financial basis, and that this arbitrary amount serves to distract the Committee from a much more important question: Just how great might the total damage be in case a core melt accident occurs here in Canada? Have such studies been carried out? Has the Committee received copies of them? What if such an accident occurred at the Pickering site? How much of the Toronto population would have to be evacuated, and for how long? And how far would the radioactive contamination spread?
It is sobering to realize that even today, 20 years after the Chernobyl accident in the Ukraine, some sheep farmers in Northern England and in Northern Wales cannot market their meat because of radioactive contamination with cesium-137 from the Chernobyl reactor, thousands of kilometers away. Will farmers in the Ottawa Valley and in Quebec have to curtail their agricultural practices following a nuclear accident near Toronto? Is the Canadian Parliament expected to pass bill C-5 to limit the liability of the nuclear industry without giving careful thought to the question of limiting the ultimate financial liability of the Crown?

6. One way of limiting public liability would be to require that any new reactors be sited far away from large population centres. Observers both inside and outside of the nuclear industry have commented that the Pickering reactors are among the worst sited reactors in the world, because of the catastrophe potential in such close proximity with one of Canada’s largest cities. Such a catastrophe could be realized not only in the event of a severe industrial accident, but also as the result of external causes such as a large earthquake causing multiple pipe breaks in the reactor core, or an act of deliberate sabotage or terrorism, which can no longer be discounted as fanciful.

7. I was one of the fortunate few to attend a 1977 Conference on the Nuclear Fuel Cycle sponsored by the International Atomic Energy Agency (IAEA) in Salzburg Austria. At that conference, one of the leading American nuclear scientists, Alvin Weinberg, spoke for an hour to an audience of about 300 nuclear scientists from every corner of the world. His message was stark. “We nuclear scientists,” he said “have not faced up to the full consequences of complete success. If we succeed in building tens of thousands of nuclear reactors around the world, which we must do to make any noticeable dent in the world’s use of petroleum, we can expect to have a core meltdown approximately every four years. The lesson is clear. We must stop building these reactors near large cities.” I was impressed by the sincerity of Mr. Weinberg’s proposal. In fact, he recommended that large tracts of land should be set aside specifically for nuclear reactors and nothing else. As he put it, if the reactors are going to melt down, let them do so there, far away from the population centres.

8. Alvin Weinberg’s proposals may strike some of us as extreme, but perhaps it’s only because we have not taken the trouble to educate ourselves about the science behind core melting accidents and the possible consequences of such events. In 1978, one full year before the Three Mile Island Accident, the Ontario Royal Commission on Electric Power Planning spent months on this question and found that if there were 100 reactors operating in Canada at some future date, then under the worst assumptions, there could be a core meltdown here in Canada once every 40 years. In his report, Arthur Porter – a professor of Engineering from the University of Toronto – wrote that serious consideration should be given to building any new reactors underground, so that the radioactive releases from an uncontained core meltdown could be largely trapped in subterranean caverns and prevented from spreading over vast land areas.

9. Another way of limiting the nuclear liability of the Crown and of the Canadian population is to invest in other energy technologies which can reduce greenhouse gases faster and more efficiently than nuclear power can possibly do, without posing the same risks of catastrophic impact.
According to a report issued in May 2007 by the Intergovernmental Panel on Climate Change, nuclear power currently provides about 16 percent of the world’s electricity (which amounts to about 2.7 percent of total energy use). In the next quarter century, the IPCC estimates that nuclear power could increase its contribution from 16% to 18% of electricity use. This is far from solving the climate change problem. Meanwhile, the same IPCC report states that renewable electricity currently accounts for 18% of electrical supply – that’s the target in 25 years for nuclear – and that in the next 25 years renewables could account for 35% of all electricity. That’s twice as much as nuclear can provide in the same time frame. Evidently, renewables are a better bet than nuclear, at least for the next 25 years, in the opinion of this estimable panel. Nuclear power just doesn’t get the job done.

10. Germany decided about 10 years ago to phase out of nuclear power. They have shut down 2 of their 17 reactors and will soon shut down a third. In that same 10-year period, Germany has installed 20,000 megawatts of wind power. That’s more than the entire Canadian nuclear program.
Meanwhile, Germany is leading all other European countries in reducing greenhouse gas emissions. So perhaps instead of passing Bill C-5, the Committee members should be recommending that a comprehensive inquiry into the risks and benefits of nuclear energy in comparison with other energy technologies be undertaken in the public interest. Such an inquiry is long overdue. 11. So perhaps instead of just passing Bill C-5 , the committee members should be refusing to pass it and recommending that a comprehensive inquiry into the risks and benefits of nuclear energy, in comparison with other energy technologies, be undertaken. In the public interest such an inquiry is long overdue. It would be a shame for this Committee to approve a piece of legislation that is so peripheral to the larger issues. While Parliament is asked to rubber-stamp legislation such as this, which merely shifts financial liability from the nuclear industry to the taxpayer, multi-billion dollar decisions are being made behind closed doors without any Parliamentary debate. I refer in particular to the recent decision by the Minister of Natural Resources to approve a 25-billion dollar proposal of the nuclear industry to centralize its inventory of irradiated nuclear fuel at some location within Canada, yet to be determined. If Parliament votes for Bill C-5 that vote will be interpreted as a green light for nuclear expansion, even though such a question is never phrased in a forthright and honest manner. Is the government afraid to ask an honest question of Parliament: “Do you approve of this government embarking on a vast expansion of nuclear power both here and abroad?”

12. Ultimately, Bill C-5 is based on much misinformation, and perhaps even a profound misunderstanding of the nature of the energy choices that we all must confront. I am concerned about the marginalization of our democratic institutions. I am concerned about the problem of governance of this industry. I do not believe, if we are going to embark upon an enlargement of this industry, it is responsible to continue to allow it to operate outside of public scrutiny, outside of responsible accounting, and I would hope this committee would do something about that. We believe Bill C-5 should not be passed unless it is radically revised to include stringent measures to limit the financial liability of the Crown and to dramatically reduce the potential risks to Canadian citizens.

Exhibit: Findings on CANDU Reactor Accidents, prepared by Gordon Edwards in 1996.
http://ccnr.org/CANDU_Safety.html

Civil Liability for Nuclear Damage (November 2009)

http://www.world-nuclear.org/info/inf67.html

Operators of nuclear power plants are liable for any damage caused by them, regardless of fault. They therefore normally take out insurance, and in most countries they are required to do so.

The potential cross boundary consequences of a nuclear accident require an international nuclear liability regime, so national laws are supplemented by a number of international conventions, though these are not comprehensive.

Liability is limited by both international conventions and by national legislation, so that beyond the limit (normally covered by insurance) the state can accept responsibility as insurer of last resort, as in all other aspects of industrial society.

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An illustrative exchange on insuring nuclear power plants

It is commonly asserted that nuclear power stations are not covered by insurance, and that insurance companies don't want to know about them. This is incorrect, and the misconception was addressed as follows in 2006 by a broker who had been responsible for a nuclear insurance pool: "it is wrong [to believe] that insurers will not touch nuclear power stations. In fact, wherever they are available to private sector insurers, Western-designed nuclear installations are sought-after business because of their high engineering and risk management standards. This has been the case for fifty years." He elaborated: "My comment refers very much to the world scene and is not contentious. Apart from Three Mile Island, the claim experience has been very good. Chernobyl was not insured. Significantly, because Chernobyl was of a design that would not have been an acceptable risk at the time, notably the lack of a containment structure, the accident had no impact on premium rates for Western plants.

"The structure of insurance of nuclear installations is different from ordinary industrial risks. It involves international conventions, national legislation channeling liability to the operators, and pooling of insurance capacity in more than twenty countries. The national nuclear insurance pool approach was particularly developed in the UK in 1956 as a way of marshalling insurance capacity for the possibility of meltdown, etc. Other national pools that followed were modeled on the UK pool - now known as Nuclear Risk Insurers Limited, and based in London."

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Ever since the first commercial nuclear power reactors were built, there has been concern about the possible effects of a severe nuclear accident, coupled with the question of who would be liable. This concern was based on the supposition that even with reactor designs licensable in the West, a cooling failure causing the core to melt would result in major consequences akin to those of the Chernobyl disaster. Experience over five decades has shown this fear to be exaggerated, and the local impact of a severe accident or terrorist attack is likely to be small - the Three Mile Island accident in 1979 being indicative.

Nuclear liability principles

Strict liability of the nuclear operator (relieves the victim from proving fault)
Exclusive liability of the operator of a nuclear installation (legal channelling of liability, regardless of the accident's cause)and in time
Mandatory financial coverage of the operator's liability (the operator must maintain insurance covering its liability)
Exclusive jurisdiction (only courts of the State in which the nuclear accident occurs have jurisdiction)

International Framework

Before 1997, the international liability regime
Limitation of liability in amount 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**.
* Parties to Vienna Convention are mainly outside of Western Europe, including: Argentina, Bulgaria, Czech Rep, Hungary, Lithuania, Mexico, Poland, Romania, Russia, Slovakia, Ukraine.
See also http://www.iaea.org/Publications/Documents/Conventions/
liability_status.pdf

** The Paris convention includes all Western European countries except Ireland, Austria, Luxembourg and Switzerland. Parties to both Paris & Brussels are: Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Slovenia, Spain, Sweden, UK. Paris only: Greece, Portugal, Turkey.
See also: http://www.nea.fr/html/law/paris-conven ... ation.html
http://www.nea.fr/html/law/brussels-con ... ation.html

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 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.
* parties: http://www.iaea.org/Publications/Documents/Conventions/
jointprot_status.pdf
** 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 Conventions 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.

In 1997 governments took a significant step forward in improving the liability regime for nuclear damage when delegates from over 80 States adopted a Protocol to Amend the Vienna Convention. The amended IAEA Vienna Convention sets the possible limit of the operator's liability at not less than 300 million SDRs (about EUR 360 million) and entered into force in 2003 but with few members.

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 USA expects to complete its ratification process in 2007, in connection with the Global Nuclear Energy Partnership.

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. Consequently new limits of liability were set as follows: Operators (insured) €700 million, Installation State (public funds) €500 million, Collective state contribution (Brussels) €300 million => total €1500 M. The definition of "nuclear damage" is broadened to include environmental damage and economic costs, and the scope of application is widened. 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. They are not yet in force, and the old limits still apply (c €210 million, €360 million).

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.

However, states with a majority of the world's 440 nuclear power reactors are not yet party to any international nuclear liability convention, relying on their own arangements.

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).

US Framework

The USA takes a somewhat different approach, and having pioneered the concept is not party to any international nuclear liability convention. The Price Anderson Act - the world's first comprehensive nuclear liability law - has since 1957 been central to addressing the question of liability for nuclear accident. It now provides $10 billion in cover without cost to the public or government and without fault needing to be proven. It covers power reactors, research reactors, and all other nuclear facilities.
It was renewed for 20 years in mid 2005, with strong bipartisan support, and requires individual operators to be responsible for two layers of insurance cover. The first layer is where each nuclear site is required to purchase US$ 300 million liability cover which is provided by two private insurance pools. This is financial liability, not legal liability as in European liability conventions.

The second layer is jointly provided by all US reactor operators. It is funded through retrospective payments if required of up to $112 million per reactor per acident* collected in annual instalments of $17.5 million (and adjusted with inflation). Combined, the total provision comes to over $10 billion paid for by the utilities. (The Department of Energy also provides $10 billion for its nuclear activities.) Beyond this cover and irrespective of fault, Congress, as insurer of last resort, must decide how compensation is provided in the event of a major accident.
* plus up to 5% if required for legal costs.

More than $200 million has been paid by US insurance pools in claims and costs of litigation since the Price- Anderson Act came into effect, all of it by the insurance pools. Of this amount, some $71 million related to litigation following the 1979 accident at Three Mile Island.

The Nuclear Regulatory Commission (NRC) requires all licensees for nuclear power plants to show proof that they have the primary and secondary insurance coverage mandated by the Price-Anderson Act. Licensees obtain their primary insurance through American Nuclear Insurers. Licensees also sign an agreement with NRC to keep the insurance in effect. American Nuclear Insurers also has a contractual agreement with each of the licensees to collect the retrospective premiums if these payments become necessary. A certified copy of this agreement, which is called a bond for payment of retrospective premiums, is provided to NRC as proof of secondary insurance. It obligates the licensee to pay the retrospective premiums to American Nuclear Insurers if required.

American Nuclear Insurers is a pool comprised of investor-owned stock insurance companies. About half the pool's total liability capacity comes from foreign sources such as Lloyd's of London. The average annual premium for a single-unit reactor site is $400,000. The premium for a second or third reactor at the same site is discounted to reflect a sharing of limits.

The nuclear operators' mutual arrangement is Nuclear Electric Insurance Limited (NEIL) which is well funded (a $5 billion surplus) and cooperates closely with the American Nuclear Insurers pool. It was founded in 1980 and insures operators for any costs associated with property damage, decontamination and related nuclear risks.

The Price Anderson Act has been represented as a subsidy to the US nuclear industry. If considered thus, the value of the subsidy is the difference between the premium for full coverage and the premium for $10 billion in coverage. On the basis of data obtained from two studies - one conducted by the Nuclear Regulatory Commission (NRC) and the other by the Department of Energy (DOE) - the Congressional Budget Office (CBO) estimated that the subsidy probably amounts to less than 1 percent of the levelized cost for new nuclear capacity.

Other countries

In the UK, the Energy Act 1983 brought legislation into line with earlier revisions to the Paris/Brussels Conventions and set a new limit of liability for particular installations. In 1994 this limit was increased again to £140 million for each major installation, so that the operator is liable for claims up to this amount and must insure accordingly. The majority of this insurance is provided by a pool of UK insurers comprising 8 insurance companies and 16 Lloyds syndicates - - Nuclear Risk Insurers. Beyond £140 million, the current Paris/Brussels system applies, with government contribution to SDR 300 million (c €360 million). The government is planning legislation for 2010 which will require insurance above the £140 million level, and towards the EUR 700 million level specified under the 2004 Paris/Brussels Protocol (when it enters force), this to be provided by government at commercial rates.

In mainland Europe, individual countries have legislation in line with the international conventions and where set, cap levels vary. Germany has unlimited operator liability and requires €2.5 billion security which must be provided by the operator for each plant. This security is partly covered by insurance, to €256 million. France requires financial security of EUR 91 million per plant. Switzerland (which has signed but not yet ratified the international conventions) requires operators to insure to €600 million. It is proposed to increase this to €1.1 billion and ratify the Paris and Brussels conventions.

In Finland a 2005 Act requires operators to take at least €700 million insurance cover, and operator liability is unlimited beyond the €1.5 billion provided under the Brussels Convention. "Nuclear damage" is as defined in revised Paris Convention, and includes that from terrorism. Sweden has ratified the Joint Protocol relating to Paris and Vienna conventions. The country's Nuclear Liability Act requires operators to be insured for at least SEK 3300 million (EUR 302 million), beyond which the state will cover to SEK 6 billion per incident. However, Sweden is reviewing how this relates to the EUR 700 million operator's liability under the amended Paris convention.

The Czech Republic is moving towards ratifying the amendment to the Vienna Convention and in 2009 increased the mandatory minimum insurance cover required for each reactor to CZK 8 billion (EUR 296 million).

In Europe there are two mutual insurance arrangements which supplement commercial insurance pool cover for operators of nuclear plants. The European Mutual Assurance for the Nuclear Industry (EMANI) was founded in 1978 and European Liability Insurance for the Nuclear Industry (ELINI) created in 2002. ELINI plans to make EUR 100 million available as third party cover, and its 28 members have contributed half that to late 2007 for a special capital fund. ELINI's members comprise most EU nuclear plant operators. EMANI's funds are also only about EUR500 million.

In Canada the Nuclear Liability and Compensation Act is also in line with the international conventions and establishes the licensee's absolute and exclusive liability for third party damage. Suppliers of goods and services are given an absolute discharge of liability. The limit of C$75 million per power plant set as the insurance cover required for individual licensees was increased to $650 million in the Act's 2008 revision, though this has not yet passed. Cover is provided by a pool of insurers, and claimants need not establish fault on anyone's part, but must show injury. Beyond the cap level, any further funds would be provided by the government.
Japan is not party to any international liability convention but its law generally conforms to them. Two laws governing them are revised about every ten years: the Law on Compensation for Nuclear Damage and Law on Contract for Liability Insurance for Nuclear Damage. Plant operator liability is exclusive and absolute, and power plant operators must provide a financial security amount of 60 billion yen (US$ 600 million). From 2010 this doubles to 120 billion yen (US$ 1.2 billion). Beyond that, the government provides coverage, and liability is unlimited. In relation to the 1999 Tokai-mura fuel plant criticality accident, insurance covered 1 billion yen and the parent company (Sumitomo) paid the balance of 13.5 billion yen.

Russia is party to the Vienna Convention since 2005 and has a domestic nuclear insurance pool comprising 23 insurance companies covering liability of some $350 million. It has a reinsurance arrangement with Ukraine and is setting one up with China. It has some "interim" bilateral agreements to cover entities working under safety assistance programs, but the legislative deficit here is a deterrent to Western contractors in particular.

Ukraine adopted a domestic liability law in 1995 and has revised it since in order to harmonise with the Vienna Convention, which it joined in 1996. It is also party to the Joint Protocol and has signed the CSC. Operator liability is capped at 150 million SDRs (c €180 million). Special provisions provisions apply to work on the Chernobyl shelter so as to extend coverage outside the Vienna Convention countries.

China is not party to any international liability convention but is an active member of the international insurance pooling system. Its 1986 interim domestic law on nuclear liability corresponds with international conventions and the liability limit was increased to near international levels in September 2007. It is setting up a reinsurance arrangement with Russia which is more symbol than substance.

Ping'an Insurance Company accounts for more than half of China's nuclear power insurance market, with its clients including nuclear power plants in Guangdong, Jiangsu and both first- and second-phase projects of Qinshan Nuclear Power Station in Zhejiang. Four Chinese Insurance companies provided US$ 1.85 billion worth of insurance to Tianwan Nuclear Power Station in Jiangsu, most of which will be reinsured internationally. About RMB 40 billion ($5.85 billion) insurance for the first two EPR units of the Taishan nuclear plant in being provided by Ping'an, All Trust, CPIC, PICC and others.

In late 2009 seven insurance companies and China Power Investment Corporation (CPI) signed a RMB 100 billion insurance cooperation agreement with China Guangdong Nuclear Power Co to insure the ten CPR-1000 units that CGNPC plans to build in the next three years.

Sources:

IAEAWorldatom web site
Nuclear Risks, by G.C.Warren, British Nuclear Insurers, 2000 (now: Nuclear Risk Insurers)
NEI Nuclear Energy Overview 13/8/01,
UNECAN News 9/6/00.
Nucleonics Week 19/2/04.
Brown, O.F. 2004, Nuclear Liability paper at WNA-NEI conference, Madrid.
Brain, S. 2006, personal communication (former chairman of the Australian Nuclear Insurance Pool from 1985 to 1997) re initial section.

Canada: Nuclear Liability Capped at $650 Million?

Don’t nuke green energy

http://www.greenpeace.org/canada/en/campaigns/
end-the-nuclear-threat/archive/what-we-do/nuclear_liability_compensation_act/On this page

November 16, 2009

Towards full liability for nuclear power plant operators

A new report commissioned by Greenpeace analyses the Harper government's proposed Nuclear Liability and Compensation Act (NLCA) and shows how the legislation would significantly short change Canadians on compensation in the event of a serious nuclear accident.

The report documents how the Harper government's proposed legislation would, if passed, artificially cap the liability of a nuclear operator for accidents at $650 million - a miniscule fraction of the likely actual cost of a nuclear disaster. This cap on liability represents a hidden subsidy for nuclear power, a massive unaccounted liability for the Canadian tax-payer and creates an unfair playing field for safer green energy technologies.

The nuclear industry claims its reactors are safe, but it withholds information on reactor accident risks while requiring this special favour from the federal government to do business - a law protecting nuclear operators from paying the realistic costs of compensation for victims of a nuclear accident.

Protecting the nuclear industry, not Canadians

The Harper government's proposed cap on the liability of the nuclear industry would mean that Canadian victims of a nuclear accident would receive significantly less industry compensation than citizens in other western countries.

American victims of nuclear accidents can count on over $10 billion in industry compensation.

Members of the Paris Convention - most of Western Europe - require that nuclear operators have at least $1.2 billion (€700 million) in insurance to compensate victims.

Germany has no limit on the liability limit of nuclear operators and requires nuclear operators to have €2.5 billion in financial security to compensate victims in case of an accident.

Japan requires nuclear operators make available $1.2 billion to compensate victims of nuclear accidents

Sweden is proposing to nuclear operators guarantee at least €1.2 billion in compensation with no cap on their liability.

Harper's Hidden Tax-Payer Liability

The NLCA would expose the federal taxpayer to billions in possible liabilities by shifting the responsibility for cleaning up after nuclear accident from reactor operators to the federal government. Any damages incurred beyond the liability cap of $650 million would be paid by the federal taxpayer.

Industry studies show that the just the health costs for a catastrophic accident at the Pickering B nuclear station just east of Toronto would exceed $52 billion. A similar accident at the Bruce A nuclear station on Lake Huron would cost $49 billion in health costs.

A smaller scale accident at the Pickering B nuclear station considered "credible" by the nuclear industry and its regulators would cause $1.2 billion in health cost damages alone.

Government studies regarding the impacts of nuclear terrorism contract the government's claim that the $650 million cap is adequate. A federal government study on the economic impacts of a dirty bomb spreading a limited amount of radioactive material by CN Tower estimated costs of clean up at $28 billion.

The Harper government has failed to carry out and release any studies to tell Canadians how large this tax-payer liability or how it could be reduced or eliminated.

The nuclear industry doesn't trust its safety: Why should the public?

The industry's desire for special protection Act shows the private lenders, insurers and even reactor vendors lack confidence in safety of Canada's nuclear reactors.

Special protection for the nuclear industry began in the 1950s because American nuclear reactor designers feared being sued for catastrophic damages caused if one their reactors had an accident. The insurance industry refused to fully insure the nuclear industry so governments stepped in to protect nuclear operators and vendors.

Before they occurred, the nuclear industry and its regulators claimed that the nuclear accidents at Three Mile Island and Chernobyl could not happen. Following the accidents nuclear regulators sought to downplay the potential for future accidents by withholding information on accident risks instead of requiring existing plants be able to withstand a full range of realistic events.

All current and proposed reactor designs in Canada contain fundamental design flaws that leave them vulnerable to catastrophic radiation releases following an accident or terrorist attack.

The Harper government fired the president of Canada's nuclear safety regulator after she imposed modernized international standards on Atomic Energy of Canada Limited (AECL) reactors.

Don't nuke green energy!

Canada has committed to implement the polluter pays principal and require polluters to pay all the clean up costs of their own pollution. The NLCA breaks this principal and requires Canadians to pay for the nuclear industry's pollution. This hidden subsidy pushes cleaner, safer and more cost-effective green energy options out of the electricity markets.

The hidden subsidy to nuclear operators would range from 5.4 to 11.0 c/kWh.

Based on the electricity output of Canada's reactors in 2007, the NLCA would provide an implicit subsidy to nuclear operators of $4.8 to 9.7 billion.

Unlike the nuclear operators, renewable energy and clean energy operators pay their own insurance.

Despite receiving billions in direct and hidden subsidies like the NLCA over the past 50 years, the nuclear industry has failed to lower its costs while green energy sources have innovated and become cost-competitive.

What does Greenpeace want?

A level playing field for green energy. Reactor operators must be required to assume responsibility for the risks they impose on society just like green energy operators.

Canadian victims of nuclear accidents deserve to be compensated by the nuclear industry at minimum on a level on par with other Western countries.

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Liability for Nuclear Damage

http://www.world-nuclear.org/info/inf67.html

(updated March 2011)

[World Nuclear Association: People and organizations of the global nuclear profession
http://www.world-nuclear.org/ ]

Operators of nuclear power plants are liable for any damage caused by them, regardless of fault. They therefore normally take out insurance for third-party liability, and in most countries they are required to do so.

The potential cross boundary consequences of a nuclear accident require an international nuclear liability regime, so national laws are supplemented by a number of international conventions.

Liability is limited by both international conventions and by national legislation, so that beyond the limit (normally covered by insurance) the state can accept responsibility as insurer of last resort, as in all other aspects of industrial society.

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An illustrative exchange on insuring nuclear power plants
It is commonly asserted that nuclear power stations are not covered by insurance, and that insurance companies don't want to know about them either for first-party insurance of the plant itself or third-party liability for accidents. This is incorrect, and the misconception was addressed as follows in 2006 by a broker who had been responsible for a nuclear insurance pool: "it is wrong [to believe] that insurers will not touch nuclear power stations. In fact, wherever they are available to private sector insurers, Western-designed nuclear installations are sought-after business because of their high engineering and risk management standards. This has been the case for fifty years." He elaborated: "My comment refers very much to the world scene and is not contentious. Apart from Three Mile Island, the claim experience has been very good. Chernobyl was not insured. Significantly, because Chernobyl was of a design that would not have been an acceptable risk at the time, notably the lack of a containment structure, the accident had no impact on premium rates for Western plants.

"The structure of insurance of nuclear installations is different from ordinary industrial risks. It involves international conventions, national legislation channeling liability to the operators, and pooling of insurance capacity in more than twenty countries. The national nuclear insurance pool approach was particularly developed in the UK in 1956 as a way of marshalling insurance capacity for the possibility of [serious accidents]. Other national pools that followed were modeled on the UK pool - now known as Nuclear Risk Insurers Limited, and based in London."

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EXCERPTS:

In Canada the Nuclear Liability and Compensation Act is also in line with the international conventions and establishes the licensee's absolute and exclusive liability for third party damage. Suppliers of goods and services are given an absolute discharge of liability. The limit of C$75 million per power plant set in 1976 as the insurance cover required for individual licensees was increased to $650 million in the Act's 2008 revision, though this has not yet passed. Cover is provided by a pool of insurers, and claimants need not establish fault on anyone's part, but must show injury. Beyond the cap level, any further funds would be provided by the government.

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Japan is not party to any international liability convention but its law generally conforms to them. Two laws governing them are revised about every ten years: the Law on Compensation for Nuclear Damage and Law on Contract for Liability Insurance for Nuclear Damage. Plant operator liability is exclusive and absolute, and power plant operators must provide a financial security amount of JPY 120 billion (US$ 1.4 billion) - half that to 2010. Beyond that, the government provides coverage, and liability is unlimited. In relation to the 1999 Tokai-mura fuel plant criticality accident, insurance covered JPY 1 billion and the parent company (Sumitomo) paid the balance of JPY 13.5 billion.

MORE:
http://www.world-nuclear.org/info/inf67.html

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We tried the nuclear power experiment -- and it didn't work

http://www.thewhig.com/ArticleDisplay.aspx?e=3041655

By Joshua Pearce, Kingston Whig Standard (QMI Agency), March 24 2011

Every nation with nuclear power is currently in a frenzy to determine if they are at risk of ending up in a "situation" like the one plaguing Japan's Fukushima nuclear power plant.

What is happening now in Japan simply lets the public in on a secret that has been well known in both the energy and insurance industries for decades: No nuclear power plant would exist without a government-backed insurance liability subsidy.

Nuclear energy is simply not insurable in the free market. Period.

Thus, the nuclear industry is completely dependent on an artificial cap on insurance liability, which reduces the costs of nuclear energy to something affordable rather than its real cost. In the U.S. this cap is about $10 billion.

If the nuclear disaster amounts to something like $310 billion, as the U.S. Sandia National Lab. estimated in the 1980s for a major screw-up, then the public ends up picking up the tab on $300 billion. In Canada this cap is orders of magnitude lower, exposing the public to an even greater potential financial risk.

These liability caps represent an indirect subsidy because no money actually flows from government coffers unless a disaster occurs. In general these indirect subsidies have been ignored because they are hard to calculate.

MORE:

http://www.thewhig.com/ArticleDisplay.aspx?e=3041655

Liability cap on Canada’s nuclear plants ‘outdated’


http://www.theglobeandmail.com/report-on-business/
industry-news/energy-and-resources/liability-cap-on-canadas-nuclear-plants-outdated/article1960595/

JEFF GRAY — LAW REPORTER From Tuesday's Globe and Mail

Published Monday, Mar. 28, 2011 7:12PM EDT

Last updated Tuesday, Mar. 29, 2011 5:41PM EDT
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QUOTE:

"Greenpeace anti-nuclear activist Shawn-Patrick Stensil, also attending the hearings last week on the Toronto-area Darlington plant, said the need for a liability cap undermines the industry’s refrain about the safety of splitting atoms to make electricity.

“If you got rid of [the cap], a lot of [nuclear companies] would just pull out of the market because their own accountants would tell them it’s not worth the risk,” he said."
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Canadian nuclear plant operators would have to pay no more than $75-million in liability claims if a nuclear disaster like that unfolding in Japan were to occur in Canada.

Nuclear critics say that’s a tiny fraction of the billions in health and damage claims that could result, and even Canada’s nuclear industry thinks it is too low. But a 1970s-era law, still on the books, caps the operators’ civil liability.

Such caps are common for the nuclear business around the world, but Canada’s stands out as particularly inadequate. A government bill that would have increased the limit to $650-million died on the order paper last week with the defeat of the Conservative government.

Nuclear critics around the world have long attacked the caps as hidden subsidies designed to limit potentially crippling costs for nuclear operators. Now, with all eyes on Japan, those caps could be getting a second look.
Tokyo Electric Power Co., which operates the troubled Fukushima Daiichi nuclear plant, faces tens of billions of dollars in liability claims from those who lived inside the 20-kilometre exclusion zone.

The claims could ultimately be so large that the government may have to nationalize the company, Japanese politicians and analysts say.

Shares of TEPCO hit a 34-year low Monday as speculation grew about a possible government takeover of the company, which faces multibillion-dollar losses from its nuclear disaster.

For now, TEPCO hopes to raise around ¥2-trillion, or $25-billion (U.S.), in loans from major Japanese banks to deal with the crisis. Under Japanese law, the company’s liability for a nuclear accident is technically unlimited. But Japanese law also only demands that nuclear power operators have insurance for about $1.4-billion per reactor. The Japanese government could be called upon to cover claims that exceed that amount. [ . . . ]