STRENGTHENING THE INTERNATIONAL LIABILITY REGIME In the aftermath of the Chernobyl accident, which prompted renewed

interest in the strengthening of the international regime of nuclear liability, the IAEA initiated as a priority matter a comprehensive review of all aspects of nuclear liability. The negotiations pursued two main goals: to improve the existing liability regime, including revision of the Vienna Convention, and to develop a comprehensive liability regime open to worldwide participation. In this context, consideration was given to establishing a mechanism of additional funding through some form of State involvement.

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3.1. Joint Protocol

Although based on the same principles, the Vienna and Paris Conventions existed for years in isolation from each other. In 1988, a combined effort of the IAEA and the OECD/NEA resulted in the adoption by a diplomatic conference convened by the IAEA of the Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention (Joint Protocol). It linked the two Conventions into one expanded regime. Between parties to the Joint Protocol, specified operative articles of both Conventions, i.e. Articles I–XV of the Vienna Convention and Articles 1–14 of the Paris Convention, are applied “in the same manner” as between parties to each convention. In order to avoid conflict of jurisdiction, the Joint Protocol has established a choice of law rule to determine which of the Conventions should apply to the exclusion of the other in respect of the same incident. In the case of a nuclear incident occurring in a nuclear installation, the applicable Convention is that to which the State is party in whose territory that instal-lation is situated. In transport cases, determination of the applicable convention will be made pursuant to the provisions of the two Conventions (identical in substance) governing liability in the course of transport (Article II.1(b) and (c) of the Vienna Convention or Article 4(a) and (b) of the Paris Convention). The Joint Protocol does not change the material provisions of the two Conventions and applies to their current texts and future amendments. It came into force in 1992 and now has twenty-four parties.

Following the adoption of the Joint Protocol, effort was focused on the revision of the Vienna Convention and elaboration of an instrument on supple-mentary compensation. In 1977, intensive negotiations of several years resulted in the adoption of two new instruments by the Diplomatic Conference convened by the IAEA. Eighty-one States participated, four international organizations, and three non-governmental organizations attended as observers. The Conference adopted by an overwhelming majority the Protocol to Amend the Vienna Convention on Civil Liability for Nuclear Damage (by a vote of sixty-four in favour to one against with two abstentions) and the Convention on Supplementary Compensation for Nuclear Damage (by a vote of sixty-six in favour to one against with two abstentions).

3.2. Protocol to Amend the Vienna Convention

The Protocol explicitly provides that the revised Vienna Convention does not apply to nuclear installations used for non-peaceful purposes. It extends the coverage to nuclear damage wherever suffered. Only a limited exception is allowed in respect of nuclear damage suffered in a non-contracting State that

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has a nuclear installation on its territory and does not afford reciprocal benefits.

Thus, damage suffered in a non-contracting State having no nuclear installation is unconditionally covered. Substantial changes have been made to the definition of nuclear damage: the Protocol expressly lists certain kinds of damage, including costs of measures of reinstatement of impaired environment, and costs of preventive measures. The definition of a nuclear incident has been expanded to include, in respect of preventive measures, any occurrence that creates “a grave and imminent threat” of causing nuclear damage. The limit of operator liability is increased to not less than 300 million SDRs, which may be phased in over a fixed period of time. In particular, for a maximum of fifteen years from the date of entry into force of the Protocol, the operator’s liability may be limited to a transitional amount of not less than 100 million SDRs. Given latent injuries that may manifest long after the incident, a thirty-year period is set for claims for loss of life and personal injury.

The ten-year period remains for all other types of nuclear damage. The Protocol enhances the jurisdiction provisions of the Vienna Convention by providing that, in the event of transport incidents within the exclusive economic zone or a similar area, jurisdiction over actions concerning nuclear damage lies with the courts of the coastal State having “most connection” with the incident. This does not, however, permit the exercise of jurisdiction contrary to the interna-tional law of the sea, including the United Nations Convention on the Law of the Sea. The Protocol may be signed and adhered to by all States, not just parties to the 1963 Vienna Convention. Five adherences are required to bring it into force. Currently, it has four contracting States and fifteen signatories.

3.3. Convention on Supplementary Compensation

The objective of the Convention on Supplementary Compensation (CSC) is to generate additional funds to supplement the compensation of nuclear damage available under the national legislation of States parties implementing the Vienna or Paris Convention or which is consistent with similar liability rules set out in the Annex. As a free-standing instrument, the CSC is also aimed at estab-lishing a worldwide liability regime for nuclear damage that may be adhered to by all States irrespective of whether they are party to two basic conventions or not. The importance of the free-standing character of the CSC is underscored by the fact that at present many States, both nuclear-power generating and non-nuclear, for various reasons do not participate in the Vienna Convention or Paris Convention and, therefore, adherence to the CSC provides them with an alternative channel to establish treaty relations and join the worldwide nuclear liability regime. The Annex, which is an integral part of the Convention, provides the mechanism through which States not party to the Vienna and the

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Paris Conventions may adhere. They will be required to bring their national legislation on compensation for nuclear damage into line with the liability provisions laid down in the Annex, which are in general equivalent to those of the two Conventions and the Protocol to Amend the Vienna Convention.

However, contracting parties without nuclear installations may have only the legislation necessary to enable them to give effect to their obligations under the CSC. Also, the Annex contains special provisions (a “grandfather” clause) that allow a State having well developed legislation with “economic channelling” to participate in the CSC without changing its legislation. The “grandfather” clause was designed to satisfy the specific situation of the United States of America.

Supplementary compensation is provided by States parties in addition to the national compensation amount of at least 300 million SDRs, the availability of which is ensured by the installation State. This threshold for triggering the system of supplementary compensation correlates with the minimum level of the operator liability under the revised Vienna Convention. The Convention provides a phasing-in mechanism similar to that in the Protocol to Amend the Vienna Convention. The contribution of a contracting party is calculated according to a special formula on the basis of its installed nuclear capacity of nuclear reactors (one unit for each MW of thermal power) and its United Nations rate of assessment. The formula heavily relies on nuclear capacity; the latter part of the supplementary funds constitutes 10% of the part calculated on the basis of installed nuclear capacity. Contracting parties on the minimum United Nations rate of assessment with no nuclear reactors are not required to contribute.

The provision on the allocation of supplementary funds is designed to achieve a balance between non-differential treatment among victims in and outside the territory of the installation State of a liable operator and the need for certain proportionality between the national compensation amount and compensation of domestic and transboundary damage. In particular, 50% of the funds are devoted to compensate for nuclear damage in or outside the installation State; 50% are reserved for compensation of transboundary damage. In the event and to the extent that the national compensation amount of the installation State is less than 300 million SDRs, the amount for compen-sation of both domestic and transboundary nuclear damage is reduced propor-tionally and the other part of the supplementary funds is increased accordingly.

On the other hand, if the national compensation amount is not less than 600 million SDRs, then all supplementary funds will be used to compensate nuclear damage in and outside the installation State.

The CSC contains a jurisdiction clause similar to that included in the revised Vienna Convention regarding jurisdiction of the coastal State party

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over actions in connection with nuclear incidents occurring in the exclusive economic zone.

The CSC enters into force when five States with a minimum total of 400 000 units of installed nuclear capacity adhere to it. Since this amounts to approximately 40% of the world total, the enforcement of the CSC depends on participation of States of large nuclear capacity. Currently, there are three contracting States and thirteen signatories.

3.4. Revision of the Paris and Brussels supplementary conventions

In 2002, the contracting parties to the Paris Convention and BSC completed negotiations on their revision by elaboration of two draft instru-ments: the Paris Amending Protocol and the BSC Amending Protocol. They are not yet open for signature. The most significant changes suggested in the former are the increase of the minimum amount of operator liability to 700 million euros, introduction of a detailed definition of nuclear damage and extended geographical scope. The BSC Amending Protocol raises the total compensation under the three-tier system to 1.5 billion euros. Also, the Protocol contains a provision that, where all the BSC contracting parties join any other international agreement in the field of supplementary compensation for nuclear damage, e.g. the CSC, a contracting party to the BSC may use the funds from the third tier of the BSC to meet its obligations under the CSC. This, in principle, creates a possibility for States parties to the revised BSC to join the CSC.

4. FUNCTIONS OF THE IAEA UNDER LIABILITY INSTRUMENTS