Anda di halaman 1dari 30

ISSN: 2250-2777

asdasdasd

2011

Vol. 1

Issue 1

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident
Yeo Hoon Park, Georgetown University Law Center, Washington, DC

The nuclear radiation exposure from Japans Fukushima Daiichi nuclear power plant in the aftermath of a massive earthquake and tsunami that hit Japan will lead to a flood of lawsuits from workers, residents, businesses, and even foreigners and foreign entities affected by the incident. This paper examines the international and Japanese legal framework which enables individuals and businesses that were affected by the incident to make claims against liable parties. Under the Workers Accident Compensation Insurance Law of 1947, employees of a nuclear power plant operator will be able to recover for any physical injuries or lost wages as a result of injury or death caused by a nuclear incident. Residents, businesses, foreigners, and foreign entities will be able to claim damages against TEPCO, the owner and operator of the Fukushima Daiichi nuclear power plant under Japans Act on Compensation for Nuclear Damage and Act on Indemnity Agreements for Compensation of Nuclear Damage.

ISSUE NO,VOL NO MANUSCRIPT NO 01/Nov/2011

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

I. Introduction The Chernobyl disaster in 1986 was the worst nuclear power plant accident recorded in history.1 In April, 1986, an explosion occurred at the Chernobyl nuclear power plant in the Ukraine, resulting in the immediate death of workers exposed to high radiation, long-term health problems for the residents nearby and abroad, and evacuation of contaminated territories.2 Before this incident, safety regulation of constructing and operating nuclear power plants were largely considered a domestic issue, and not a concern of other states.3 However, the magnitude of this incident and transboundary effects raised the need for a comprehensive legal regime to set international minimum safety standards of nuclear power plants,4 as well as to provide compensation in case damage results from an incident.5 International safety standards have been significantly improved, with the International Atomic Energy Agency (IAEA) playing a major role.6 In addition, the international liability regime has been reexamined, although progress has been slow. Most recently, the nuclear incident at Japans Fukushima Daiichi nuclear power plant has heightened the need to reexamine the international liability scheme in nuclear incidents. The vast scale of this incident makes it likely that many Japanese people and maybe even foreigners will bring claims against liable parties. This paper lays out facts related to the recent Japanese nuclear incident, examines the current international nuclear liability regime, Japans nuclear laws, and lays out potential claims arising from this incident.


1 2

See Jon M. Van Dyke, Liability and Compensation for Harm Caused by Nuclear Activities, 35 DENV. J. INTL L. & Chernobyl Accident 1986, World Nuclear Assn, Apr. 2011, available at http://www.worldnuclear.org/info/chernobyl/inf07.html. 3 Gunther Handl, Transboundary Nuclear Accidents: The Post-Chernobyl Multilateral Legislative Agenda, 15 Ecology L. Q. 203, 203 (1988). 4 Id. at 203-04. See also Carlton Stoiber et al., Handbook on Nuclear Law 107 (2003). 5 Handl at 203-04. 6 See Liability for Nuclear Damage, World Nuclear Assn, Apr. 2011, available at http://www.worldnuclear.org/info/inf67.html. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 2

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

II. The Fukushima Daiichi Nuclear Power Plant Incident On March 11, 2011, the world watched in shock as a 9.0 magnitude earthquake and tsunami struck the northeastern coast of Japan.7 In a disaster that the Japanese prime minister called the worst crisis since World War II, more than ten thousand people were killed, thousands were left homeless, there was devastating property damage, and coastal villages essentially vanished under the earthquake and tsunami.8 The earthquake also caused units 1, 2 and 3 of the Fukushima Daiichi nuclear power plant to shut down automatically.9 This plant is owned and operated by the Tokyo Electric Power Company (TEPCO).10 Offsite power of the plant was lost, and the emergency diesel generators (EDGs) provided power for the emergency cooling systems for a short time.11 However, a massive tsunami caused by the earthquake stopped the EDGs from working.12 As a result, an evacuation order was issued for persons within the 3km radius of the plant.13 As back-up batteries were depleted and cooling of reactor became more difficult, the evacuation radius was expanded to 20km.14 Seawater was injected to cool the reactors.15 On March 14, a hydrogen explosion occurred at unit 3.16 The next day, another explosion occurred inside unit 2 as well as a fire in unit 4.17 Seawater continued to be sprayed in the units in an attempt to cool and stabilize the units.18 Efforts to stabilize the Fukushima Daiichi nuclear power plant are continuing to this day. The effects of the nuclear power plant incident became apparent within days. On March 19, five days after the first explosion occurred at the nuclear plant, dairy and vegetables

See Martin Fackler, Powerful Quake and Tsunami Devastate Northern Japan, N.Y. Times, Mar. 11, 2011, at A1; Timeline for the Fukushima Dai-ichi nuclear power plant accident, OECD Nuclear Energy Agency (hereinafter Timeline), Apr. 14, 2011, available at http://www.oecd-nea.org/press/2011/NEWS-04.html. 8 Martin Fackler, Death Toll Estimate in Japan Soars as Relief Efforts Intensify, N.Y. Times, Mar. 14, 2011, at A1. 9 Timeline. 10 Mike Head, Japanese government prepares to protect TEPCO from liability, World Socialist Web Site, Mar. 25, 2011, available at http://www.wsws.org/articles/2011/mar2011/japa-m25.shtml. 11 Timeline. 12 Id. 13 Id. 14 Id. 15 Id. 16 Id. 17 Id. 18 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 3

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

produced in the surrounding area exhibited higher-than-standard radiation levels.19 On March 24, three workers at the nuclear power plant were exposed to high levels of radiation and contamination, and many other workers received significant doses of radiation.20 Nonthreatening amounts of plutonium were detected in the soil of the plant,21 and water discharged to the sea contained low levels of radioactive material.22 The evacuation radius was expanded, and residents were warned not to eat or drink from products produced near the plant.23 Radiation has also drifted through the wind to reach other countries.24 Similar to the time of the Chernobyl disaster, traces of radiation, although harmless amounts, reached the East and West coasts of America within days.25 Traces of radioactive iodine and cesium have also been detected in South Korea, the Kamchatka Peninsula in Russia,26 China,27 and even Europe.28 Seawater in the surrounding area has also been contaminated with high levels of radioactive iodine and cesium.29 Although iodine will break down naturally relatively quickly, cesium will last longer and spread wider, potentially contaminating the marine life in the surrounding area.30 Even with the Japaneses governments assurance that the levels of radioactive material in fish will be negligible, concern is spreading that the Japanese fishing industry will be negatively affected.31 Radioactive iodine has been found in fish caught far away from the power plant.32 A scientist from Japan Atomic Energy Agency predicts that the cesium

19 20

Id. Id. 21 Id. 22 Id. 23 Id. 24 See William J. Broad, Radiation Over U.S. Is Harmless, Officials Say, N.Y. Times, Mar. 22, 2011, at A8. 25 Id. 26 See Traces of radioactive iodine detected in Seoul, Korea Times, Mar. 29, 2011, available http://www.koreatimes.co.kr/www/news/nation/2011/03/113_84040.html. 27 SE China detects low-level radioactive material, China Daily, Mar. 28, 2011, available http://www.chinadaily.com.cn/china/2011-03/28/content_12239932.htm. 28 Japan defends radioactive dumping, CHINA DAILY, Apr. 6, 2011, available http://www.chinadaily.com.cn/cndy/2011-04/06/content_12276265.htm. 29 Japan's next threat: Radioactive seawater?, The Week, Mar. 23, 2011, available http://theweek.com/article/index/213414/japans-next-threat-radioactive-seawater. 30 Id. 31 Ilbon, Oyeomsu Tongjeryeok Sangsil..Jukeumui Bada Gongpo (Japan loses control of polluted water.. Fear Deadly Sea), YONHAP NEWS, Apr. 5, 2011 available http://www.yonhapnews.co.kr/bulletin/2011/04/05/0200000000AKR20110405085600073.HTML?did=1179m. 32 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

at at at at of at

P a g e | 4

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

in seawater will reach North America in five years, the East Coast in ten years, and spread all over the Pacific in thirty years.33 Because the release of radioactive water to the ocean is unprecedented, the long-term effects of this release are unclear. TEPCO and the Japanese government have acknowledged responsibility and apologized to affected parties about the incident.34 Japan's Nuclear and Industrial Safety Agency reportedly apologized to neighboring countries for failing to contact them before releasing contaminated waters into the ocean.35 In addition, South Koreas Ministry of Health and Welfare has stated that Japans health minister Kohei Otsuka apologized to South Koreas health minister Chin Soohee during a meeting in Geneva.36 Otsuka reportedly said the government of Japan apologizes to its neighbors for the radioactive contamination of air and seawater.37 III. International Nuclear Liability Regime 1. Source-State liability versus Cost-Sharing There are two different views on how transboundary claims should be compensated. One view is that a source state is fully responsible for transboundary harm.38 The other view is that there should be a cost-sharing between source and victim states.39


33

Bangsaseon Oyeomsu 30Nyeon Nae Taepyeongyang Jeonyeogeuro Hwagsan (Radioactive polluted water to spread all over Pacific Ocean in 30 years), CHOSUNILBO, Apr. 10, 2011, available at http://news.chosun.com/site/data/html_dir/2011/04/10/2011041000294.html. 34 Cf. TEPCO president apologizes again after nuclear crisis upgraded, CNN, Apr. 13, 2011, available at http://articles.cnn.com/2011-04-13/world/japan.nuclear.reactors_1_nuclear-crisis-chernobyl-disaster-industrialsafety-agency?_s=PM:WORLD; Japan apologizes to S. Korea for radioactive contamination, YONHAP NEWS AGENCY, May 16, 2011, available at http://english.yonhapnews.co.kr/news/2011/05/16/52/0200000000AEN20110516010400320F.HTML. 35 Japan apologizes to S.Korea for water release, NHK WORLD, Apr. 5, 2011, available at http://www3.nhk.or.jp/daily/english/05_43.html. 36 See generally Japan apologizes to S. Korea for radioactive contamination, YONHAP NEWS AGENCY, May 16, 2011, available at http://english.yonhapnews.co.kr/news/2011/05/16/52/0200000000AEN20110516010400320F.HTML; Fukushima, Japan to apologize to the Korean nuclear accident, CHINA DAILY, May 18, 2011, available at http://www.chinadaily.org/International-News/Fukushima-Japan-to-apologize-to-the-Korean-nuclear-accident/; Wonjeon Sago Hanguk Jeongbue Gongshig Sagwa (Official apology to Korean government over nuclear power plant incident), HANKOOK ILBO, May 17, 2011, available at http://news.hankooki.com/lpage/society/201105/h2011051700102421950.htm. 37 Id. 38 Handl at 203. 39 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 5

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Chernobyl could be seen as an example of cost-sharing.40 After the Chernobyl disaster,

none of the affected governments formally made an international legal claim for damages against the Soviet Union.41 Also, the Soviet Union itself disclaimed any international responsibility for the incident.42 However, specific facts of this incident must be considered in analyzing this interpretation. First, the Soviet Unions rejection of international claims implied that the claims were inappropriate in the context of the specific incident, and not in general.43 Second, the EastWest factor, the concept of the economically better-off victim states contributing to the costs of dealing with transboundary impacts, may have discouraged victims states from pressing international claims.44 Many of the victim states were economically advanced Western European states, which might have made it natural for them to absorb some of the costs. Third, there was uncertainty about the basis for such a claim since the incident was unprecedented, and states were reluctant to establish a precedent when they also operated nuclear power plants.45 Many of the factors considered in determining liability in the aftermath of Chernobyl do not exist in the present context. First, although the earthquake and tsunami was devastating, it was not unprecedented nor was it unexpected. Japan sits astride the ring of fire, where the most violent seismic activity occurs in the Pacific Basin.46 Earthquakes and tsunamis of vast scale are frequent in Japan.47 Therefore, the power plants structure could have contemplated disasters of this scale. Second, compared to the Soviet Unions position at the time of Chernobyl, Japan is economically advanced than states affected by the incident including South Korea, Russia, and China. Although these victim states will be sympathetic to Japans situation, the East-West factor is less likely to play a role in determining whether to pursue claims. Third, it is important to recognize that the Soviet Union indeed recognized a duty to provide compensation to the victims by provided significant aid and assistance to the affected people.48 Lastly, the fact that states did not make legal claims against the Soviet Union after the Chernobyl incident does not

40 41

See Van Dyke at 28. Handl at 223. 42 Id. 43 Id. at 225. 44 Id. at 225. 45 Van Dyke at 29. 46 Martin Fackler, Death Toll Estimate in Japan Soars as Relief Efforts Intensify, N.Y. TIMES, Mar. 14, 2011, at A1. 47 See id. 48 Van Dyke at 30. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 6

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

preclude new claims arising from a different nuclear incident. The international communitys experience in dealing with transboundary effects of nuclear incidents and subsequent development of international law shows a strong possibility of such claims arising in the future. Source-State liability, the so-called polluter pays principle,49 is the alternative and more desirable approach to cost-sharing. This approach has broad support from the international community.50 States have reaffirmed the need to adhere to this principle in international forums.51 The Paris Convention and the Vienna Convention implicitly recognize this principle, although the scope is limited.52 This principle is partly based on the premise that nuclear accidents are inherently different from other types of disasters and should therefore be distinguished.53 First, nuclear disasters are intrinsically human-caused.54 In addition, states choose to have nuclear power as an energy source, while other states choose not to.55 This strengthens the point that the states that choose to use nuclear power must take responsibility for their actions, and therefore should be responsible for any damage that might result from operating nuclear power plants. 2. Current International Nuclear Liability Regime The current international nuclear liability regime consists of regional and worldwide conventions.56 In Europe, the Convention on Third Party Liability in the Field of Nuclear Energy of 1960 (Paris Convention) and the Convention Supplementary to the Paris Convention of 1963 (Brussels Supplementary Convention) provide a framework for nuclear damage compensation among a number of OECD member states.57 Worldwide, the Vienna Convention on Civil Liability for Nuclear Damage of 1963 (Vienna Convention) provides a comprehensive regime for civil liability and damage.58 The Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention of 1988 (Joint Protocol) links the Vienna

49 50

Handl at 227. Id. 51 Id. 52 Id. at 234, 237. 53 See id. at 25. 54 Handl at 226. 55 Id. 56 STOIBER at 108. 57 Id. 58 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 7

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Convention and the Paris Convention to ensure that benefits of one convention extend to the other convention.59 Additionally, the Convention on Supplementary Compensation for Nuclear Damage of 1997 (CSC) was developed as an umbrella for other international liability conventions and to attract a broad adherence.60 The CSC provides for additional amounts to be provided from member states through contribution.61 This treaty is not yet in force due to the limited number of parties that have ratified it.62 These international conventions aim to ensure that victims can claim, and will receive adequate compensation for the loss they have suffered.63 The nuclear liability conventions generally include the following provisions:64 Procedural Law No State Immunity: State or liable agency cannot invoke jurisdictional immunity.65 Exclusive Jurisdiction of Source State: Courts of the State where the incident occurred have exclusive jurisdiction.66 Law of Source State: Law of the country where the court is situated applies.67 Automatic Recognition and Enforcement of Judgments: Victims can enforce judgments in the State where judgment was rendered.68 Substantive Law Strict Liability: Victims seeking compensation are not required to prove fault.69 Operators of nuclear plants are strictly liable.70

59 60

Id. INTERNATIONAL EXPERT GROUP ON NUCLEAR LIABILITY (hereinafter INLEX), CIVIL LIABILITY FOR NUCLEAR DAMAGE: ADVANTAGES AND DISADVANTAGES FOR JOINING THE INTERNATIONAL NUCLEAR LIABILITY REGIME 1 (1997) 61 Liability for Nuclear Damage, World Nuclear Assn, Apr. 2011, available at http://www.worldnuclear.org/info/inf67.html. 62 Id. 63 INLEX at 10. 64 See id. at 2-11. 65 Id. at 3. 66 Id. at 4-5. 67 Id. at 7. 68 Id. at 8. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 8

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Non-Discrimination: Victims are not discriminated based on nationality, domicile, or residence.71 Therefore, foreigners are free to bring claims.72 Sole Liability of Operator: Operator of the nuclear installation is the only party liable.73 Maximum Liability Capped: States may limit the liability of the operator.74 Causation Undefined: States may apply principles of causality in their national law.75 No Exemption from Liability: Operator is liable even if the incident was caused by force majeure (Act of God).76 Operator is only exonerated when it proves that the nuclear incident was a direct result of an armed conflict, hostilities, civil war or insurrection, or a result from gross negligence of the victim or from an act or omission of the victim committed with intent to cause harm.77 Japan is not a party to any of the international conventions mentioned above.78 For the Paris Convention, Japan has stated that it is not part of the Convention due to its geographical situation in relation to the other member states,79 even though it is a member of the OECD.80 As for the Vienna Convention, Japan has pointed out that the Convention does not have enough members and the level of liability provided in the Convention is insufficient.81 Japanese law provides for unlimited liability, which conflicts with the limited liability provided by both Conventions.82 Because Japan and the countries that may experience damage from the Fukushima Daiichi nuclear power plant incident, including South Korea, China, and the U.S., are

69 70

Id. at 10. Id. 71 Id. 72 See id. 73 Id. 74 Id. at 11; STOIBER at 113. 75 STOIBER at 111. 76 Id. at 113. 77 Id. at 113. 78 See OECD Nuclear Energy Agency, Reform of Civil Nuclear Liability: Budapest Symposium 1999 (hereinafter Budapest) 535 (2000). 79 Id. 80 OECD Website, available at http://www.oecd.org/country/0,3731,en_33873108_33873539_1_1_1_1_1,00.html. 81 Id. 82 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 9

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

not part of any international nuclear liability regime,83 we must examine Japans domestic nuclear laws to understand what kind of liability parties are subject to and what kind of claims parties may bring. IV. Japans Nuclear Liability Regime Although Japan is not a party to any international convention for nuclear liability, it has incorporated a number a principles embodied in both the Paris and Vienna Conventions to its laws.84 The two laws that govern nuclear liability in Japan are the Act on Compensation for Nuclear Damage, Act No. 147 of 1961 (Compensation Law) and the Act on Indemnity Agreements for Compensation of Nuclear Damage, Act No. 148 of 1961 (Indemnity Law).85 1. Procedural Law State Immunity Because Japan is not part of any international nuclear liability regime, customary international law applies in determining state immunity.86 According to customary international law, state immunity is determined based on whether the state acted as a state (acta jure imperii) or like a private person (acta jure gestionis).87 If a state uses a nuclear power plant to produce energy for general supply, it is unclear whether the state will enjoy immunity.88 In case of the Chernobyl disaster, German courts denied state immunity of the Soviet Union, since energy was produced and supplied in the same way as private enterprises.89 Other courts may decide otherwise.90


83 84

Id. OECD Nuclear Energy Agency, Tokai-Mura Accident, Japan: Third Party Liability and Compensation Aspects (hereinafter Tokai-Mura) 7 (2000); OECD Nuclear Energy Agency, Nuclear Legislation: Analytical Study: Regulatory and Institutional Framework for Nuclear Activities (hereinafter Framework) 12 (2004). 85 Japan revises nuclear liability laws, World Nuclear News, Apr. 23, 2009, available at http://www.world-nuclearnews.org/RS-Japan_revises_nuclear_liability_laws-2304091.html. 86 INLEX at 3. 87 Id. 88 Id. 89 Id. 90 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 10

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

It is likely that Japanese courts will not rule in favor of state immunity based on its precedent91 of denying state immunity in similar cases. In Trading Corporations in Japan v. The Islamic Republic of Pakistan, the Supreme Court of Japan held that a company affiliated with the Pakistani government could not enjoy immunity because state immunity in customary international law does not apply in regards to acts jure privatorum.92 The Pakistani companys acts of concluding contracts, receiving objects, and establishing loans were seen as acts jure privatorum.93 The court ruled that a foreign state does not enjoy immunity for acts jure privatorum except where the exercise of jurisdiction is likely to infringe on the sovereignty of the foreign state.94 Therefore, applying the rationale used in Trading Corporations in Japan v. The Islamic Republic of Pakistan, if a private party brings a lawsuit against the Japanese government (in its capacity as the Japanese government itself, or as the successor of TEPCO in case the Japanese government succeeds TEPCO), it is likely that state immunity will not be a ground for dismissing the claims. Jurisdiction The Compensation Law does not define who can bring claims in Japanese courts for nuclear damage. Because there is no specific provision governing parties that can bring suits, this is likely to be governed by the Japanese tort law under the Civil Code.95 Although not clearly defined, previous cases indicate that a foreigner may bring claims against a Japanese individual, entity, or the Japanese government. For example, in X et al. v. State of Japan, where Chinese nationals sued the Japanese government for damages resulting from kidnapping and rape during World War II, the Japanese court recognized that the plaintiffs had a right to bring claims under the relevant Japanese Civil Code, even though the court ruled that the plaintiffs did not have a right to do so under international law due to lack of relevant international law norms.96 Based on this case, it seems that foreigners situated in foreign states at the time of an occurrence can sue

91

Japan is a civil law country, and therefore precedent does not control future holdings. However, precedents are useful in analyzing how Japanese courts have applied the law, and predict how they will rule in the future. 92 Trading Corporations in Japan v. The Islamic Republic of Pakistan, Japan Supreme Court (2006). 93 Id. 94 Id. 95 Yusuke Ueda, TEPCO(2): estimated recompense and its impact 7 (2011). 96 X et al. v. State of Japan, Tokyo High Court, 51 Shomu Geppo (11) 2813 (2005). Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 11

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

the Japanese government for damages suffered as long as there is a substantive claim under Japanese law.97 The Compensation Law also provides a possibility of referring claims to a Dispute Reconciliation Committee for Nuclear Damage Compensation (Committee).98 Under Section 18 of the Compensation Law, the Committee may be responsible for mediating disputes for nuclear damage.99 Regarding the states of limitations, general rules of tort law under the Civil Code apply because there is no relevant provision in the Compensation Law.100 Section 724 of Japans Civil Code provides that the right to compensation for damage is extinguished if an action is not brought within three years from the date the person suffering damage had knowledge of both the damage and of the person liable for such damage.101 This means that a person or entity has three years after finding out that they have suffered damage and that the damage was a result of the nuclear power plant incident. The right to compensation is also fully extinguished twenty years after the date on which a tort occurs.102 Therefore, anyone who decides to bring a claim must do so within twenty years after the date of the incident. Applicable Law In the absence of applicable international law or an international framework that determines the applicable law, national rules on applicable tort law apply.103 If there is a conflict, the law of the country where the nuclear incident happened or where the damage was suffered is likely to apply (lex loci delicti commissi).104 In this case, since the incident happened in Japan, it is likely that the legal disputes will be subject to Japanese law.


97 98

See id. Tokai-Mura at 8. 99 Act on Compensation for Nuclear Damage, Act No. 147 of 1961 (hereinafter Compensation Law), Section 18 (2009). 100 Id. at 7. 101 Id. 102 Id. 103 INLEX at 7. 104 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 12

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

2. Substantive Law Liable Parties Under Sections 3 and 4 of the Compensation Law, a nuclear operator is liable for any damage caused as a result of reactor operation etc.105 This means that the operator is strictly liable.106 Reactor operation etc. is defined as any incidental transport, storage and disposal of nuclear fuel or material contaminated by nuclear fuel.107 Since air and water contamination from radiation occurred during the operation of the nuclear power plant while the nuclear material was stored, the present situation is covered by this definition. No person other than the operator is liable for the damage.108 Third parties like Toshiba, the nuclear power plant engineering company, or General Electric, the supplier of nuclear equipment, will not be subject to liability under this law.109 There may also be a question government liability in cases of damage caused by water released after the plant and the surrounding area were contaminated. However, this distinction is meaningless since the decision to release contaminated water seems to be a joint decision by TEPCO and the Japanese government,110 and the Japanese government will share responsibility for the damages claimed.111 Causation A very clear causal relationship must be established between the radiation and damages resulting from the radiation in order to be compensated.112 As long as causation is established, the range of damages compensable will be wide.113 For example, produce affected by radiation


105 106

Compensation Law at Section 3. See Framework at 12. 107 Compensation Law at Section 2. 108 Id. at Section 4. 109 Ueda at 6; Matt Egan, GE Not Exposed to Nuclear Liability in Japan, FOX Business, Mar. 15, 2011, available at http://www.foxbusiness.com/industries/2011/03/15/ge-exposed-nuclear-liability-japan/. 110 Cf. Hiroko Tabuchi & Ken Belson, Japan Releases Low-Level Radioactive Water Into Ocean, N.Y. Times, Apr. 5, 2011, at A4. 111 Framework at 12; Compensation Law at Section 16. 112 Ueda at 5. 113 Ueda at 6. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 13

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

contamination-related rumors can be compensated as long as the causal relationship is clearly proven.114 Insurance/Security The Compensation Law requires that installation of nuclear power plants be insured for a prescribed amount.115 Pursuant to the amendment in 2009 entered into force starting 2010, this amount is JPY 120 billion (USD 1.2 billion).116 Unless this financial security is provided, nuclear operators are prohibited from operating reactors.117 This amount will be available to compensate victims, although the potential damages will far exceed this security amount. Indemnity Agreement The Compensation Law and Indemnity Law provides that the government may sign an agreement with the operator saying that it will indemnify the operator for any amount not covered by the operators insurance.118 This is especially important in the event of natural disasters not covered by private liability insurance.119 The government essentially indemnifies the nuclear operator from any loss incurred from compensating nuclear damage not covered by liability insurance or other financial security.120 In return the operator pays an indemnity fee to the government.121 In addition to the insurance and indemnity agreements, Section 16 of the Compensation Law provides for a possibility of government aid where the cost of the damage exceeds the operators financial capacity.122 This ensures that victims will be compensated for damage, regardless of the gravity and extent of the disaster, in cases such as the present one where the liable partys capacity to compensate greatly exceeds the expected damages.


114 115

Id. Framework at 12. 116 Compensation Law at Section 7; World Nuclear News. 117 Compensation Law at Section 6. 118 Framework at 12. 119 Id. 120 Compensation Law at Section 10. 121 Id. 122 Framework at 12; Compensation Law at Section 16. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 14

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Exemption for Natural Disasters Under Section 3 of the Compensation Law, there is an exception of operator liability where the damage is caused by grave natural disaster of an exceptional character or by an insurrection.123 Although this exemption has never been invoked, it is commonly understood that this exemption applies to natural disasters in a scale unprecedented in historical experience.124 Even though the recent earthquake was the strongest ever recorded in Japan, it seems that a political decision has been made that this clause will not apply to the current situation.125 Therefore, this exception is inapplicable in the present context. Dispute Reconciliation Committee The Compensation Law also provides for possibility of a Dispute Reconciliation Committee for Nuclear Damage Compensation that will investigate and assess the nuclear damage, draft instructions to aid in a voluntary settlement, and mediate reconciliation for any dispute on compensation.126 It is likely that the Japanese government will invoke this clause as it has gone through a similar path in past nuclear accidents. In case of the Tokai-Mura accident that occurred in a nuclear fabrication plant in Tokai-Mura September 1999, where workers and residents of the surrounding area were exposed to radiation, the Science and Technology Agency (STA) established guidelines for compensation within eight months of the incident.127 The prefectural government and local authorities offered mediation between the company and the victims, resulting in over 98% of these claims being settled within a year of the incident.128


123 124

Compensation Law at Section 3. Budapest at 534. 125 Ueda at 6. 126 Compensation Law at Section 16. 127 Tokai-Mura at 1-3. 128 Id. at 3-5. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 15

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

3. Potential Claims By Workers The government under a separate legal framework indemnifies employees of a nuclear operator that suffer nuclear damage.129 Under the Workers Accident Compensation Insurance Law of 1947, the Japanese government is required to pay compensation for all medical expenses and loss of earnings for injured workers.130 The government is also required to pay for the funeral expenses and compensation pension to the workers who died.131 The separate legal framework may have its advantages and disadvantages. Because this comes from a separate fund and under a separate law, employees can be ensured that they will be compensated in a speedy manner under a well-established legal framework without concern of lack of funds. However, the statute of limitations is shorter than that provided for victims under the Compensation Law. Employees must bring claims within two years of the injury under this law,132 which may not be long enough to determine the long-term effects of exposure to radiation. By Residents Residents of the affected areas may be able to recover for bodily injury, costs of medical tests, evacuation costs, testing costs for objects, property losses, and psychological damage.133 If the damage does not directly result from the nuclear damage, this could be covered by the Civil Code, rather than the Compensation Law.134 For example, if damage results from harmful rumors that persist even after radiation is under control, this situation could be covered by the Civil Code.135


129 130

See Compensation Law at Supplementary Provision Section 4. Tokai-Mura at 5. 131 Id. 132 See id. at 8. 133 Id. at 10. 134 UEDA at 9. 135 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 16

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

By Businesses Businesses may also sue for damages under the Compensation Law.136 Businesses may sue for evacuation costs, testing costs for objects, property losses, losses from interruption of business, and operating losses.137 In reality, the compensation paid to businesses constituted a significant portion of the compensation scheme in the Tokai-Mura incident.138 However, damages from electric power shortages will likely not be compensated because contracts with the users include provisions that the company is not liable for electric power shortages caused by earthquakes.139 In case of agricultural produce, compensation by damaging rumors will not be limited to produce subject to shipment restrictions mandated by the government.140 For example, damage resulting from import bans imposed by surrounding countries like South Korea, Russia, China, and Australia,141 although independent from the ban of the Japanese government, will likely be compensated.142 Statute of limitations for claims under the Compensation Law is governed by the general rules of tort law pursuant to the Civil Code because there is no specific provision that governs this under the Compensation Law.143 An action must be brought within three years from the date on which the person suffering damage had knowledge of the damage and the person liable for such damage.144 In addition, all rights to compensation are fully extinguished twenty years after the date of the tort.145


136 137

See id. at 6. Id. at 10. 138 Tokai-Mura at 9. 139 Id. at 5. 140 Id. at 3. 141 Andrew Jacobs, China Bans Some Foods From Japan, N.Y. Times, Mar. 26, 2011, at A11. 142 Cf. Ueda at 3. 143 Tokai-Mura at 7. 144 Id. 145 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 17

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

By Foreigners, Foreign Entities As mentioned above, foreigners and foreign entities may be able to sue in Japanese courts as long as they have a substantive claim under Japanese law.146 In addition to suing TEPCO or the Japanese government for damages suffered by the Fukushima Daiichi nuclear power plant incident, foreigners may be able to sue their respective governments for failure to provide adequate notice or warning. Citizens of Western European countries have brought various claims against their governments for damages suffered during and after the Chernobyl disaster.147 The governments of Germany and the UK paid compensation for businesses that suffered damages by setting up a guideline.148 In France, a group of cancer victims sued the government for deceiving the public and downplaying the effects of the Chernobyl disaster years after the incident occurred.149 The case is still ongoing, 25 years after the Chernobyl disaster.150 Similarly, in the present case, foreign citizens of affected states may be able to bring these types of claims against their governments if they suffer damage as a result of inadequate warning or outright deception by the government. The type of damages available and statute of limitation will be determined by the states domestic laws. 4. Estimated Outcome Government officials have indicated that the government is currently considering a rapid formation of a commission to investigate the compensation.151 This will likely be under the current Compensation Law regime. The compensation program contemplated by the government will be extensive in geography and timeframe, and agricultural compensation will be paid in advance.152


146 147

See X et al. v. State of Japan, Tokyo High Court, 51 Shomu Geppo (11) 2813 (2005). See generally Philippe J. Sands, Chernobyl: Law and Communication 17-18 (1988); French Cancer Victims File Chernobyl-Related Lawsuit, United Press Intl, Mar. 1, 2001, available at http://www.highbeam.com/doc/1P142417219.html. 148 Sands at 17-18. 149 Pierre-Antoine Souchard, French seek to drop probe into Chernobyl fallout, YAHOO NEWS, Mar. 31, 2011, available at http://news.yahoo.com/s/ap/20110331/ap_on_re_eu/eu_france_chernobyl. 150 See id. 151 UEDA at 15. 152 Id. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 18

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

The claims are estimated to be anywhere between JPY 1-10 trillion.153 These claims will

likely be paid by sources including TEPCO, private liability insurance companies, government indemnity, and further governmental action.154 The government has a strong interest in assisting TEPCO with the current situation because it seeks to provide stable electricity to service areas.155 This cannot be achieved if TEPCO runs into bankruptcy.156 V. Conclusion The nuclear incident at Japans Fukushima Daiichi nuclear power plant has highlighted the need for a comprehensive nuclear liability regime that is consistent and reliable. Compared to other countries that do not adhere to international nuclear liability regimes, the Japanese law provides a relatively clear guideline as to what kind of claims victims may bring in case of a nuclear incident like the present one. Japans Compensation Law and Indemnity Law provide a basis for workers, residents, businesses, foreigners, and foreign entities to bring claims against TEPCO and the Japanese government. The increased use of nuclear energy throughout the world has increased the possibility of nuclear incidents that could have transboundary effects. Japans Fukushima Daiichi nuclear power plant incident could be an opportunity for the international community to develop a comprehensive international legal regime on compensation for nuclear incidents that would provide a clear guideline for future incidents.


153 154

Id. at 1. Id. at 14. 155 Id. at 17. 156 See id. at 18. Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 19

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

APPENDIX I Act on Compensation for Nuclear Damage, Act No. 147 of 1961 (As Amended by Act No. 19 of 17 April 2009) Selected Provisions PART I General Provisions Section 1 Purpose The purpose of this act is to protect persons suffering from nuclear damage and to contribute to the sound development of the nuclear industry by establishing the basic system regarding compensation in case of a nuclear damage caused by reactor operation etc. Section 2 Definitions As used in this act, reactor operation etc. means any activity which comes under any one of the following cases below as well as any incidental transport, storage and disposal of nuclear fuel or material contaminated by nuclear fuel [including nuclear fission products; this applies also to sub-paragraph (v)], as provided by Cabinet Order: i) Reactor operation; ii) Production; iii) Reprocessing; iv) Use of nuclear fuel; (iv-2) Storage of spent fuel; (v) Waste disposal of nuclear fuel or material contaminated by nuclear fuel (referred to as nuclear fuel etc. in the following paragraph and in Section 3, paragraph 2). 2. As used in this act, nuclear damage means any damage caused by the effects of the fission process of nuclear fuel, or of the radiation from nuclear fuel etc., or of the toxic nature of such
Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 20

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

materials (which means effects that give rise to toxicity or its secondary effects on the human body by ingesting or inhaling such materials); however, any damage suffered by the nuclear operator who is liable for such damage pursuant to the following Section, is excluded. 3. As used in this act, nuclear operator means any person as specified under any one of the following sub-paragraphs (including a person who had been deemed so previously). (i) A person who is granted a permit as provided in Section 23 paragraph 1 of the Act for the Regulation of Nuclear Source Material, Nuclear Fuel and Reactors (Act No. 166 of 1957; hereinafter referred to as the Regulation Act) (including a national licence under the provisions of the same paragraph applying instead by virtue of Section 76 of the Regulation Act) (including a person who is regarded as a reactor operator pursuant to Section 39, paragraph 5 of the Regulation Act); (ii) A person who is granted a permit as provided in Section 23-2, paragraph 1 of the Regulation Act; (iii) A person who is granted a licence as provided in Section 13, paragraph 1 of the Regulation Act (including a national licence under the provisions of the same paragraph applying instead by virtue of Section 76 of the Regulation Act); (iv) A person who is granted a licence as provided in Section 43-4, paragraph 1 of the

Regulation Act (including a national licence under the provisions of the same paragraph applying instead by virtue of Section 76 of the Regulation Act); (v) A person who is granted a licence as provided in Section 44, paragraph 1 of the Regulation Act (including a national licence under the provisions of the same paragraph applying instead by virtue of Section 76 of the Regulation Act); (vi) A person who is granted a licence as provided in Section 51-2, paragraph 1 of the

Regulation Act (including a national licence under the provisions of the same paragraph applying instead by virtue of Section 76 of the Regulation Act);

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 21

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

(vii) A person who is granted a licence as provided in Section 52, paragraph 1 of the Regulation Act (including a national licence under the provisions of the same paragraph applying instead by virtue of Section 76 of the Regulation Act); 4. As used in this Act, reactor means a reactor as provided in Section 3, paragraph 4 of the Basic Atomic Energy Act (Act No. 186 of 1955), nuclear fuel means nuclear fuel as provided in Section 3, paragraph 2 of the Basic Atomic Energy Act (including spent fuel as provided in Section 2, paragraph 8 of the Regulation Act), production means production as provided in Section 2, paragraph 7 of the Regulation Act, reprocessing means reprocessing as provided in Section 2, paragraph 8 of the Regulation Act, storage of spent fuel means the storage of spent fuel as provided in Section 43, paragraph 4(1) of the Regulation Act; waste disposal of nuclear fuel or material contaminated by nuclear fuel, means the underground disposal of waste and waste management as provided in Section 51, paragraph 2(1) of the Regulation Act; radiation means radiation as provided in Section 3, paragraph 5 of the Basic Atomic Energy Act, and nuclear ship and foreign nuclear ship mean nuclear ship and foreign nuclear ship as provided in Section 23-2, paragraph 1 of the Regulation Act. PART II Liability for Nuclear Damage CHAPTER 1 Financial Security Liability without fault, channelling of liability etc. Section 3 Where nuclear damage is caused as a result of reactor operation etc. during such operation, the nuclear operator who is engaged in the reactor operation etc. on this occasion shall be liable for the damage, except in the case where the damage is caused by a grave natural disaster of an exceptional character or by an insurrection.

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 22

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

2. Where nuclear damage is covered by the preceding paragraph and if the damage is caused as a result of the transport of nuclear fuel etc. between nuclear operators, the nuclear operator who is the consignor of the nuclear fuel etc. shall be liable for the damage unless there is a special agreement between the nuclear operators. Section 4 Where nuclear damage is covered by the preceding section, no person other than the nuclear operator who is liable for the damage pursuant to the preceding section shall be liable for the damage. 2. Where nuclear damage is covered by paragraph 1 of the preceding section, the liability of a nuclear operator who furnishes the financial security as provided in Section 7-2, paragraph 2 and wants a foreign nuclear ship to enter into Japanese territorial waters shall be limited to the amount as provided in Section 7-2, paragraph 2. 3. The provisions of Section 798, paragraph 1 of the Trade Act (Act No. 48 of 1899), the Act relating to the Limitation of the Liability of Shipowners (Act No. 94 of 1975) and the Products Liability Act (Act No. 85 of 1994), shall not apply to nuclear damage which is caused as a result of reactor operation etc. PART III Financial Security CHAPTER 1 Financial Security Section 6 Duty to provide financial security A nuclear operator is prohibited from reactor operation etc. unless financial security for compensation of nuclear damage (hereinafter referred to as financial security) has been provided.

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 23

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Details of financial security Section 7 Except when the provisions of the following section are applicable, financial security shall be provided by the conclusion of a contract of liability insurance for nuclear damage and an indemnity agreement for compensation of nuclear damage or by a deposit, approved by the Minister for Education, Culture, Sport, Science and Technology (MEXT) as an arrangement that makes available for compensation of nuclear damage, 120 billion yen (in case of such reactor operation etc. The Cabinet Order may provide for a lesser amount than 120 billion yen; hereinafter this amount is referred to as financial security amount) for each installation or site or nuclear ship, or by an equivalent arrangement approved by MEXT. 2. Where the amount available for compensation of nuclear damage falls below the financial security amount because the nuclear operator has paid compensation for nuclear damage pursuant to Section 3, MEXT may, if it deems it necessary to ensure full compensation of nuclear damage, order the nuclear operator to bring the amount available for compensation of nuclear damage up to the financial security amount by a given time. 3. In the case provided for in the preceding paragraph, the preceding section shall not apply until the Order is made pursuant to the preceding paragraph (until the time designated by the Order, where such an Order has been made pursuant to the preceding paragraph). CHAPTER 2 Contract of Liability Insurance for Nuclear Damage Section 9 Any person suffering from nuclear damage shall, with regard to his claim for such nuclear damage, have priority over other creditors in respect of compensation from the amount provided by the liability insurance contract.

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 24

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

2. The insured may request the insurer to make the insurance payment only to the extent of the amount of compensation which the insured has paid or to the extent to which the insured has acquired the consent of persons suffering from nuclear damage. 3. The right to request insurance payment under the liability insurance contract shall not be assigned, mortgaged or seized; however, a person who has suffered nuclear damage may proceed with a seizure with regard to his claim for nuclear damage. CHAPTER 3 Indemnity Agreements for Compensation of Nuclear Damage Section 10 An indemnity agreement for compensation of nuclear damage (hereinafter referred to as indemnity agreement) shall be the contract by which the Government undertakes to indemnify a nuclear operator for his loss arising from compensating nuclear damage not covered by the liability insurance contract or other financial security for compensation of nuclear damage, where the nuclear operator becomes liable for such damage, and under which that operator has undertaken to pay an indemnity fee to the Government. 2. Provisions relating to indemnity agreements shall be laid down in another act. PART IV Measures taken by the State Section 16 Where nuclear damage occurs, the Government shall give a nuclear operator (except the nuclear operator of a foreign nuclear ship) such aid as is required for him to compensate the damage, when the actual amount which he should pay for the nuclear damage pursuant to Section 3 exceeds the financial security amount and when the Government deems it necessary in order to attain the objectives of this act.

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 25

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

2. Aid as provided for in the preceding paragraph shall be given to the extent that the Government is authorised to do so by decision of the National Diet. Section 17 Where the provision for exoneration in Section 3, paragraph 1 applies or where nuclear damage is deemed to exceed the amount provided under Section 7-2, paragraph 2, the Government shall take the necessary measures to relieve victims and to prevent the damage from spreading. PART V Section 18 Dispute Reconciliation Committee for Nuclear Damage Compensation The Dispute Reconciliation Committee for Nuclear Damage Compensation (hereinafter referred to as Reconciliation Committee) may be established as an organisation attached to MEXT, pursuant to the provisions laid down by Cabinet Order; this Committee shall be in charge of mediating reconciliation of any dispute arising from compensation of nuclear damage and of preparing general instructions to help operators reach a voluntary settlement of such disputes. 2. The Reconciliation Committee shall: (i) mediate reconciliation of any dispute arising from compensation of nuclear damage; (ii) in the event of a dispute arising from compensation of nuclear damage, draft instructions establishing the scale of the nuclear damage and other general instructions to help operators reach a voluntary settlement of the said dispute; (iii) investigate and assess nuclear damage as necessary for dealing with the matters mentioned in (i) and (ii) above. 3. Provisions regarding the organisation and operation of the Reconciliation Committee as well as procedures for a request for, and conduct of, mediation other than those provided in paragraphs 1 and 2 shall be promulgated by Cabinet Order.

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 26

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Supplementary Provisions (Omitted) Section 4 Adjustment of indemnities pursuant to other legislation In the circumstances referred to in the preceding section, when the employees of a nuclear operator suffer nuclear damage and the nuclear operator is liable for such damage pursuant to the said section. (Designated simply, in the rest of this section, as Nuclear Operator), such employees or the families of the deceased shall receive an indemnity as laid down by Cabinet Order in the form of an indemnity under the provisions of the Insurance Act for the Compensation of Work Accidents (Act No. 50 of 1947) and equivalent to the compensation of such damage, or any other indemnity governed by other provisions of the act (hereinafter referred to in this section as compensation for work accidents). In such cases, any compensation of nuclear damage paid to employees or the families of the deceased shall be temporarily subject to the following provisions: (i) the nuclear operator shall be entitled not to pay indemnification, and that during a period which may extend to the extinction of the right of employees or families to receive compensation for work accidents, up to an amount equal to the value of the said compensation for work accidents calculated at the legal rate in force between the time when the damage occurred and the date on which the compensation for work accidents was paid; (ii) where the circumstances of the preceding paragraph apply, when compensation for work accidents has been paid, the nuclear operator shall be exonerated from his indemnification obligation up to an amount equal to the value of the said compensation for work accidents calculated at the legal rate in force between the time when the damage occurred and the date on which the compensation for work accidents was paid. 2. Where the employees of a nuclear operator have suffered nuclear damage and such damage was caused intentionally by a third party, the nuclear operator who has paid compensation for work accidents to the employees or families of the deceased shall retain a right of recourse against such third party.

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 27

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Supplementary Provisions (Act No. 19 of 17 April 2001) This act shall enter into force on 1 January 2010. APPENDIX II Act on Indemnity Agreements for Compensation of Nuclear Damage, Act No. 148 of 1961 (As Amended by Act No. 19 of 17 April 2009) Selected Provisions Section 2 Indemnity agreements for compensation of nuclear damage The Government may conclude an agreement with a nuclear operator under which the Government undertakes to indemnify the nuclear operator for his loss arising from compensating nuclear damage not covered by a liability insurance contract or other means for compensating nuclear damage in case the nuclear operator becomes liable, and under which the nuclear operator undertakes to pay an indemnity fee to the Government. Section 4 Indemnity agreement amount The contracted amount concerning an indemnity agreement for the nuclear damage mentioned in the preceding Section sub-paragraphs (i) to (iii) and (v) (hereinafter referred to as indemnity agreement amount) shall be the amount equivalent to the amount of the financial security as provided in Section 7, paragraph 1 of the Compensation Act (where the financial security includes an arrangement other than the conclusion of a liability insurance contract and an indemnity agreement, this amount shall be reduced by the amount available for compensation of nuclear damage by means of such other arrangement; where an indemnity agreement other than the indemnity agreement concerned has been concluded, this amount shall be reduced by the amount available for compensation of nuclear damage by means of such other indemnity agreement). 2. The indemnity agreement amount for the nuclear damage mentioned in Section 3, sub paragraph (iv) shall be the amount equivalent to the amount of the financial security as provided

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 28

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

in Section 7-2, paragraph 1 of the Compensation Act (where the financial security and other arrangements for compensation of nuclear damage as provided in Section 7, paragraph 1 of the Compensation Act are approved as a part of the financial security provided for in Section 7-2, paragraph 1 of the Compensation Act, this amount shall be reduced by the amount available for compensation for nuclear damage by means of such other financial security). Section 5 Period of indemnity agreement The period of the indemnity agreement concerning the nuclear damage mentioned in Section 3, sub paragraphs (i) to (iii) and (v) shall run from the time of its conclusion to the time when the reactor operation etc. has ceased. 2. The period of the indemnity agreement concerning the nuclear damage mentioned in Section 3, sub paragraph (iv) shall run from the time when the nuclear ship leaves Japanese territorial waters to the time when it arrives back in Japanese territorial waters. Section 7 Payment under the indemnity agreement The Government shall, under an indemnity agreement, indemnify up to the indemnity agreement amount for the loss suffered by the nuclear operator as a result of compensating nuclear damage caused by the reactor operation etc. during the period covered by the indemnity agreement concerned. 2. Where the Government indemnifies the loss suffered by a nuclear operator as a result of compensating the nuclear damage mentioned in Section 3, sub paragraphs (i) to (iii) and (v), if there is any amount to be covered by the liability insurance contract, the total sum paid from the indemnity agreement shall not exceed the amount computed by deducting the amount paid from the liability insurance contract from the financial security amount (or the amount computed by deducting the amount paid from the liability insurance contract from the financial security amount further reduced by the amount available for compensation of nuclear damage by means of other arrangements, which the financial security concerned includes, excepting the liability insurance contract and the indemnity agreement).

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 29

International Legal Implications of the Fukushima Daiichi Nuclear Power Plant Incident

2011

Section 8 Financial limits of indemnity agreements The Government shall conclude indemnity agreements to the extent that the total sum of the indemnity agreement amount does not exceed the budget amount approved by the National Diet for each year. Section 11 Prescriptions The right to receive payment from an indemnity agreement shall be extinguished three years after the nuclear operator has paid compensation. Section 13 Reimbursement of the sum paid under an indemnity agreement Where the Government has indemnified the loss suffered by a nuclear operator as a result of compensating the nuclear damage mentioned in the following sub paragraphs, the Government shall require the nuclear operator to reimburse the amounts received, pursuant to the provisions of the Cabinet Order, for the compensation of: i) Nuclear damage arising from a fact which the nuclear operator who is a party to the indemnity agreement has failed to notify pursuant to Section 9, or which he has notified falsely; ii) Nuclear damage caused by the reactor operation etc. during the period from the day when the nuclear operator received from the Government notice of cancellation of the indemnity agreement pursuant to Section 15, to the day prior to the day when the cancellation comes into force. Supplementary Provisions This act (No. 19 of 17 April 2009) shall enter into force on 1 January 2010.

Dec. 2011 Vol. 1 Issue 1 Asian Law Journal

P a g e | 30