Nuclear Third Party Liability Framework

Thursday 16th December 2021 Written Statements

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

Today I am notifying Parliament of the ratification of the 2004 protocols to amend the convention on third party liability in the field of nuclear energy (the “Paris convention”) and the convention supplementary to the Paris convention (the “Brussels convention”) (together the “2004 protocols”) that will come into force on 1 January 2022. The 2004 protocols were laid before Parliament in September 2015 under cover of miscellaneous series 6 (2015), Command Paper 9135 and miscellaneous series 7 (2015), Command Paper 9136 respectively.

The Paris and Brussels conventions are implemented domestically through the Nuclear Installations Act 1965. This has been amended prospectively by the Nuclear Installations (Liability for Damage) Order 2016 to implement the 2004 protocols. Ratification of the 2004 protocols will trigger the remainder of the 2016 Order coming into force in the UK on 1 January 2022.

Nuclear has a key role to play in our transition to net zero by 2050. Nuclear safety and regulation are of paramount importance and the risk of any accidents in the UK remain very low. Nevertheless, ratification of the 2004 protocols mean that in the highly unlikely event of an incident, an increased level of compensation would be available to victims and the period during which claims can be brought would be extended. The 2004 protocols, once in force, increase operator liability in the event of a nuclear incident from the current €140 million to a maximum of €1.2 billion over a period of five years and extend the period for which claims can be made from 10 to 30 years.

The Government recognise that in the short term, there is a gap in the insurance market. Therefore, the Government have agreed initially to provide an indemnity, for a charge, to cover increased personal injury liabilities for the 10 to 30 year period. For each individual site, the maximum HMG liability is between €70 million and €160 million depending on the site's classification, operator’s uptake of the indemnity, and whether transit of nuclear material takes place. The indemnity will be reviewed annually to ensure that it remains the best value for money option. In relation to this, I have today laid before Parliament a departmental minute giving notice of the Department incurring this contingent liability.

Additionally, the Government are also providing an indemnity to the Nuclear Decommissioning Authority (NDA). The NDA are a non-departmental public body who are responsible for the decommissioning of several civil nuclear facilities, and who will be required to have appropriate cover in place. This creates a maximum contingent liability of €700 million in the first year, rising to €1.2billion for the Government per site over a five year period.

We also intend to build on our well established nuclear third party liability regime by seeking accession to the convention on supplementary compensation for nuclear damage (the “CSC”), by working with the International Atomic Energy Agency (“IAEA”) as depository for the CSC, and legislating when parliamentary time allows. Accession to the CSC would expand the number of countries to which the principles of channelling liability to the operator, and capping that liability, apply. This further improves the investment climate for new nuclear in the UK, without placing any additional burden of liability for developers or operators. In the event of a nuclear incident in a country that is party to the CSC, the UK would contribute an amount to the shared international fund, based on its installed capacity and UN contributions at the time. Similarly, in the events of an incident in the UK, we would be able to draw on these pooled CSC funds.

[HCWS504]