Friday, December 6, 2013

Nuclear Liability:

The Logic of Liability Regimes

Once again, I have seen an article criticizing the fact that nuclear liability regimes assign financial responsibility solely to the nuclear plant operator, thus appearing to insulate vendors from financial claims.  On the surface, these criticisms seem to have some logic--after all, who wouldn't want to go after the "real" culprit, if there is one; or after everyone, just to make sure?

This viewpoint, however, neglects to consider fully what the likely outcome would be of a system that tried to assign the "real" blame, or that opened the field to everyone suing everyone.   The likely outcome:  Chaos.  Delay.  Hugh litigation costs.  More delay.  Strong possibility of no compensation for victims. 

It is just those likely outcomes that motivated the originators of all the major nuclear liability compensation regimes (both US and international) to focus the responsibility on the operator.

There is a fundamental logic to that approach.  After all, we always say that it is the operator that is ultimately responsible for the safety of a nuclear plant.  Not the regulator.  Not the vendor.  Not the other suppliers.

Assigning the operator responsibility puts the onus on the operator to check what the vendor and other suppliers do, to hold them to the highest standards, not to skimp where safety is concerned.  While a blog like this is not the place to make final determinations about who knew what and when, and who should have done something about it, I can at least identify the type of questions one would have to address if one were to try to specify exactly who is to blame for the Fukushima accident.

Let's look at the article cited above, which advocates assigning responsibility for the accident to GE.  In the first place, the article identifies critiques of the GE BWR Mark I design by officials of the US Atomic Energy Commission dating from the early 1970s and gives that as a rationale for concluding that GE should take the blame.  However, the article does not note that modifications were made to that design and were implemented in US plants.  Operators--and regulators--in Japan should have known this.  So, who knew what?  When did they know it?  What did they do about it?

The article mentions that GE was "involved" in shaving down the cliff where Fukushima Dai-ichi was constructed, thus increasing its vulnerability to tsunamis.  I don't know what they mean by "involved."  Who recommended it?  Who approved it?  Who brought in the bulldozers?  I have a feeling that everyone shares some blame here, so who should be considered to have the ultimate responsibility? 

While the parallel may not be exact, some of the same thinking went into the approach used to compensate the families of the victims of the World Trade Center--and when presented with the option to litigate endlessly or to accept a one-stop, fixed-price compensation system, most opted for the latter.

I am not here to defend GE--or to vilify it.  I am just here to point out that multiple liability regimes have concluded that it is in the best interest of any injured parties to achieve a prompt resolution of claims, and that can best be done by assigning full responsibility to the one party where one can truly say, "The buck stops here."

As to the final argument in the article cited above, that accepting the Convention on Supplementary Compensation for Nuclear Damage would saddle the taxpayers of Japan either directly or indirectly with the cost of cleanup, that argument, too, has been considered by the framers of this convention, as well as of other liability regimes.

The liability regimes all establish provisions for substantial amounts of compensation that would have to be paid by utilities.  That compensation is expected to be more than adequate for most cases.  However, in very rare cases--and Fukushima is one--the regimes all recognize that governments do have an ultimate responsibility.  Governments have that responsibility for natural disasters, such as tsunamis.  Governments also have that responsibility for other industrial infrastructure.  The government responsibility has been recognized in actions following large industrial accidents and in compensation schemes for other industries.

The Nuclear Energy Institute and the American Nuclear Society have published good accounts of the provisions of the Price-Anderson Act, which is the US nuclear liability law, and give some examples of other industries that have similar liability limits.  The World Nuclear Association has a comprehensive piece covering the different international liability regimes (as well as some of the national ones).  I commend all 3 for further reading:


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