Opinion Concerning the Concept of the Nuclear Damage Compensation System
August 18 2016
Japan Federation of Bar Associations
The Japan Federation of Bar Associations (JFBA) prepared its " Opinion Concerning the Concept of the Nuclear Damage Compensation System " (the "Opinion") on August 18, 2016, and submitted it to the Prime Minister, the Minister of the Economy, Trade and Industry, the Minister of Education, Culture, Sports, Science and Technology, the Chairman of the Atomic Energy Commission of Japan, and the Chairman of the Advisory Committee on Nuclear Damage Compensation System on August 19, 2016.
Summary of the Opinion
The phrase “to contribute to the sound development of the nuclear power industry” in Article 1 (purpose) of the Act Concerning Nuclear Damage Compensation should be deleted.
The Act Concerning Nuclear Damage Compensation (“the Compensation Act”) describes its purpose as “the sound development of nuclear power industry” as well as “the protection of victims.” It reflects the policy of the government to promote the protection and development of the nuclear power business during the early days of the nuclear power industry around 1961, when the Compensation Act was enacted.
Presently, however, “the sound development of the nuclear power industry” as one of the purposes could be used as a basis to argue for limited liability. In order to prevent the purpose of “protection of victims” from being devalued when the Compensation Act is applied, the Compensation Act’s purpose should be limited only to “protection of victims.”
- In order to prevent the moral hazard of nuclear power business operators, the no-fault and unlimited liability clause for nuclear power business operators should be kept and should not be replaced with limited liability. It should be noted that manufacturers of nuclear reactors are exempted from the application of the Product Liability Act under Article 4-3) of the Compensation Act, inviting the concentration of damage liability only on nuclear business operators. This clause should be discarded because such an exemption could invite a possible moral hazard among manufacturers of nuclear equipment and because compensation only from nuclear power business operators for accidents caused by equipment defects is inadequate.
- Article 16 of the Compensation Act (measures taken by state) provides that in the event nuclear business operators are faced with difficulties in paying damage compensation, the state can provide "support to nuclear business operators" even when the state is not found liable for such an accident under the Compensation Act. In order to clarify the "support to nuclear business operators" provided by the state, it should be specified in the Compensation Act that the state can take emergency actions including the settlement of a nuclear accident and reimbursement for unpaid compensation to victims, and that the state can claim repayment of expenses disbursed. inadequate.
- In cases where the amount of damages due to a nuclear accident exceeds the ability of a nuclear business operator to pay, a new system should be created concerning the legal liquidation of nuclear business operators that can secure a full, priority reimbursement for damage given to victims of a nuclear accident and carrying out the work necessary for putting an end to the accident and decommissioning the reactor, in addition to the use of Nuclear Damage Compensation and Decommissioning Facilitation Corporation Act.