Japan revises nuclear liability laws

23 April 2009

The Japanese Diet has unanimously approved a bill to revise the country’s nuclear damage compensation laws. Under the revised law, the nuclear liability of plant operators will be doubled by 2010.

Japan is not party to any international liability convention, but its law generally conforms to them. Two laws governing them are revised about every ten years: the Law on Compensation for Nuclear Damage and Law on Contract for Liability Insurance for Nuclear Damage.

On 10 April, the upper house of the Diet unanimously approved a bill to revise the two laws. The bill will come into force on 1 January 2010.

Plant operator liability is exclusive and absolute, and power plant operators must provide a 'financial security amount' of ¥60 billion ($600 million). From 2010, this doubles to ¥120 billion ($1.2 billion). Beyond that, the government provides coverage, and liability is unlimited. The revision to the law also increases penalties, including fines, for nuclear companies operating plants without financial security, from the current maximum of ¥500,000 ($5040) up to ¥1 million ($10,090).

Currently, the deadline for nuclear companies to enter into nuclear damage compensation contracts, as well as for the government to provide financial support to a nuclear operator if the compensation the company will have to pay is more than the financial security amount, is 31 December 2009. That date will now be extended by ten years, to 31 December 2019.

In addition, in order to increase underwriting by domestic insurance companies, the government may commission part of the administration to non-life insurance companies and others under indemnity agreements for compensation for nuclear damage.