IAS Exam: Convention on Supplementary Compensation For Nuclear Damage

For the aspirants of UPSC IAS Exam, here, we have provided provisions and a complete analysis of Convention on Supplementary Compensation For Nuclear Damage which sets parameters on a nuclear operator’s financial liability.

Updated: Apr 4, 2016 10:12 IST

In terms of Civil Services IAS Prelims Exam as well as IAS Mains Exam, the current issues are very important. Here, we have provided we have provided provisions and a complete analysis of Convention on Supplementary Compensation For Nuclear Damage which sets parameters on a nuclear operator’s financial liability.

                                        Convention on Supplementary Compensation For Nuclear Damage


The Convention on Supplementary Compensation (CSC) is an international nuclear liability regime governed by International Atomic Energy Agency (IAEA). The convention, which sets parameters on a nuclear operator’s financial liability, was signed on 12th September 1997. It has been framed in consistent with the principles of Vienna Convention on Civil Liability for Nuclear Damage (1963) and the Paris Convention on Third Party Liability in the Field of Nuclear Energy (1960). It desires to establish a worldwide liability regime to supplement and enhance these measures with a view to increasing the amount of compensation for nuclear damage. It also recognises further that such a worldwide liability regime would encourage regional and global co-operation to promote a higher level of nuclear safety in accordance with the principles of international partnership and solidarity. It provides a uniform framework for channelling liability and providing speedy compensation after the nuclear accident.


1.It defines the definitions of Vienna Convention, Paris Convention, Special Drawing Right, Nuclear Reactor, Installation State, Nuclear Damage, Measures of Reinstatement, Preventive measures, Nuclear Accident, Installed Nuclear Capacity, Law of the competent court  and Reasonable measures

2.The purpose of this Convention is to supplement the system of compensation provided pursuant to national law.

3.The system of this Convention shall apply to nuclear damage for which an operator of a nuclear installation used for peaceful purposes situated in the territory of a Contracting Party is liable.

4.It seeks to establish a uniform global legal regime for compensation to victims in the unlikely event of a nuclear accident.

5.The Convention stipulates the establishment of an international fund to increase the monies available for compensation of victims.

6.Compensation in respect of nuclear damage per nuclear incident shall be ensured by the following means:


(i) The Installation State shall ensure the availability of 300 million SDRs  [“Special Drawing Right”], the unit of account defined by the International Monetary  Fund and used by it for its own operations and transactions] or a greater amount  that it may have specified to the Depositary at any time prior to the nuclear incident,  or a transitional amount

(ii) A Contracting Party may establish for the maximum of 10 years from the date of  the opening for signature of this Convention, a transitional amount of at least 150  million SDRs in respect of a nuclear incident occurring within that period.

(b) beyond the amount made available under sub-paragraph (a), the Contracting  Parties shall make available public funds according to the formula specified

7.The Convention also allows compensation for civil damage occurring within a state's exclusive economic zone, including damage resulting from the loss of tourism or fishery-related income.

8.The Convention sets parameters on the financial liability of nuclear operators, stipulates time limits for possible legal action, requires that nuclear operators maintain insurance or other instruments of financial security, and provides for jurisdiction and applicable law in the event of a nuclear incident.

9.All states are free to participate in it regardless of their presence of nuclear installations on their territories or involvement in existing nuclear liability conventions.


The CSC aims at increasing the amount of compensation available in the event of a nuclear accident through public funds to be made available by the Contracting Parties on the basis of their installed nuclear capacity and UN rate of assessment. It also aims at establishing treaty relations among States that belong to the Vienna Convention on Civil Liability for Nuclear Damage, the Paris Convention on Third Party Liability in the Field of Nuclear Energy or neither of them, while leaving intact the 1988 Joint Protocol that establishes treaty relations among States that belong to the Vienna Convention or the Paris Convention. However, this convention is far from being perfect as evident by following points:

1.The definitions of twelve terms used in the Convention are substantially longer and more involved than the others, reflecting a need to accommodate different concepts of tort liability found in a wide variety of domestic legal systems while at the same time ensuring uniformity with respect to certain core elements.

2.The limitation to installations used for peaceful purposes excludes military          facilities from the coverage of the Convention.

3.Convention requires that the “minimum national compensation amount" be distributed equitably without discrimination on the basis of nationality, domicile or residence. The Installation State's courts are thus required to treat domestic and trans-boundary victims without regard to their nationality when allocating the first tier of compensation. Subject to obligations it may have under the Vienna or Paris Convention, the Installation State is, however, free to include or exclude damage suffered in a non-Contracting State from the first tier.

What more can be done?

It is perceived that this convention will facilitate better compensation for nuclear damages. However, it removes a country’s flexibility in charging international nuclear operators in the event of an accident. Hence, there should be due considerations in reaching a mid way between standardisation of international compensatory regime and the sovereignty of a country. Another issue is that of ratification, wherein, the CSC would come into force only if five countries with a installed capacity of 400000 units of nuclear power ratify it.  These needs to be diluted and more countries must be persuaded to sign and ratify it. The CSC provides no forum to signatories to challenge each other’s national law. In case of any dispute, arbitration would be done by International Court of Justice. But US while ratifying the treaty had reservations against it and made it clear that it is under no obligation to be bound by dispute settlement cases. More countries can have similar objections, thereby rendering the CSC toothless. In this respect, standard sets of procedures must be established which should be uphold by all the possible stakeholders. Moreover, comprehensively issue is not about few particular and random points. An amicable process and institution is required to resolve all the possible scenarios, which can only be reached through consensus, as we have been observing in case of Climate Change.






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