Legal framework for nuclear ships6 August 2020
Iris Bjelica Vlajić discusses the legal framework and grounds for indemnity for nuclear ships
Above Image: NS Savannah the first commercial nuclear power cargo vessel, en route to the World’s Fair in Seattle in 1962 (Photo: US Government)
THE INTERNATIONAL MARITIME ORGANIZATION (IMO) estimates that shipping is responsible for 2.7-3.3% of annual global carbon dioxide emissions. The need for low-carbon forms of shipping raises the question of whether ships with nuclear propulsion systems could be employed; after all, nuclear-powered submarines and icebreakers are in regular use. In a joint model produced by IMO and UN Intergovernmental Panel on Climate Changes (IPCC) for low- carbon shipping in 2050, nuclear propulsion was marked as a green fuel, alongside renewable energy and bio-fuel. In that event, what would be the legal framework under which the ships operate and would it differ from conventionally powered ships?
There are specific questions regarding the use of nuclear energy in ships that need to be addressed. First, there is the issue of disposal of spent fuel and environmental protection. Second, terms of port access and port location need to be addressed. Finally, what is the operators’ liability in case of an accident regardless of the cause (omission in construction, maintenance or terrorist attack)?
According to some authors, spent fuel represents the main concern since it has to be transferred from the ship to a storage facility and was one of the reasons why NS Savannah and NS Mutsu faced opposition from local communities and port authorities. In order to serve as a used fuel collector, a special nuclear servicing vessel ship, named Atomic Servant was built and tasked to accompany NS Savannah and remove the nuclear waste. Also, regular refuelling or maintenance within a certain period of time requires specialised docks. Recent history shows that conventional ports are reluctant to harbour nuclear ships even when they provide all requested permissions and security certificates. New ports for nuclear vessels must be built. They would be remote from human settlements and with the infrastructure required to meet the needs of the ships, crew and companies.
The first nuclear ships were constructed and used in the mid twentieth century. In 1966 Lloyd’s Register prepared Provisional Rules for the Classification of Nuclear Ships specifying requirements for the main components of the vessel, reactor engineering and radiation control. These rules were later abandoned, since no more nuclear ships were constructed after the first four initially constructed vessels.
The economic and legal aspects of nuclear ships are as important as technical capacities. The question of indemnity in case of an accident still remains to be explored.
Is there a liability framework for nuclear ship operators, based on the same principles as for conventional ship operators? The main aspects of commercial nuclear vessel operators’ accountability in international legislation can be compared with other ship operators to determine whether nuclear faces additional requirements.
The main international documents regulating the use of civil nuclear ships are:
- UN Convention on the Law of the Sea (UNCLOS)
- IMO Convention for the Safety of Life at Sea (SOLAS)
- IMO Convention on The Liability of Operators of Nuclear Ships and the Code of Safety for Nuclear Merchant Ships
- Corresponding EU legislation.
The liability of conventional ship operators lies in the Civil Convention and Fund Convention, and later amendments to these acts. The first Conventions were adopted in 1969 and 1971, respectively. They were amended in 1992 and 2003, forming three sets of provisions that exist independently, since not all signatories of the first conventions ratified all later amendments. In 2008, new convention entered into force for bunker fuel leakage.
Applying the documents
A nuclear ship without a core is a ship like any other, and is subjected to the same rules as a conventional ship.
The legal framework regarding nuclear propulsion in vessels evolved slowly and unevenly, with an even narrower path for nuclear merchant ships. At the time of its creation in 1982, UNCLOS was unique for its comprehensiveness. It addressed some of the most sensitive questions around international relations and was seen as revolutionary for some of its solutions. UNCLOS allowed coastal states to limit the right to innocent passage at sea for nuclear- powered ships and ships carrying nuclear or other inherently dangerous or noxious substances or materials. But it allowed such passage through territorial waters, if the ships obtain and carry the necessary documents and observe special precautionary measures established for such ships by international agreements.
UNCLOS stipulates the same procedure for all damage inflicted on the high seas, regardless of the damage type (nuclear, chemical, oil spill etc.).
The International Maritime Organization dedicated Chapter VIII of its Convention (SOLAS), to all nuclear ships except ships of war. The last version of the convention was adopted on 1 November 1974. Special attention has to be paid to the reactor installation designs, having regard to the special conditions of service on board ship in normal and exceptional circumstances of navigation. Radiation audits are its key concern. Audits of nuclear ships should be carried out at least once a year with other strict conditions.
In 1962, the International Maritime Organization adopted the Convention on the Liability of Operators of Nuclear Ships, with the aim of establishing uniform rules for all nuclear ship operators. This Convention is also known as the Brussels Convention, and it was never ratified and did not enter into force. The majority of the rules in this convention are in line with the other international nuclear agreements, as well as the main principles stated in civil law dealing with the damages.
The conditions for customary use and navigation include: construction according to acceptable technical documentation; regular maintenance and service of the vessel, reactor and equipment; and a trained and educated crew. But there are some incidents that may lead to a nuclear accident or nuclear damage. Usually, nuclear damage means damage that causes loss of life or any bodily harm to a person, loss or damage of things arising from radioactive properties associated with toxic, explosive or other dangerous properties of nuclear fuel, or radioactive products and waste.
On the other hand, a nuclear accident refers to any event or series of events having the same origin that caused the nuclear damage. It is possible that nuclear and non-nuclear damage may be caused jointly by nuclear accidents. In that case, if it is not possible to reasonably separate nuclear from other damage, all damage would be considered nuclear.
In Article III, the Convention requires that the operator be fully accountable and required to maintain insurance or other financial security covering its liability for nuclear damage. This financial instrument should be in such amount, of such type and in such terms that it ensures the payment of claims for nuclear damage compensation established against the operator.
On 19 November 1981, the Convention was accompanied by the Code of Safety for Nuclear Merchant Ships (IMO Resolution A. 491(XII)). Since it contains general safety principles and principles of risk acceptance the Code is set as a guidebook regarding safety criteria for use of nuclear ships. (It includes design criteria and conditions; ship design, construction and equipment; nuclear steam supply system; machinery and electrical installations; radiation safety; operation and emergency operation procedures; surveys. Appendices cover: sinking velocity calculations; seaway loads depending on service periods; safety assessment; limiting dose-equivalent rates for different areas and spaces; quality assurance programme; application of single failure criterion). The initial application of the Code is restricted to conventional ships propelled by nuclear propulsion plants of the PWR type. It provides a technical and regulatory reference for nuclear merchant ships and underlined duties cited in other relevant international instruments. Special attention is given to decommissioning nuclear-powered ships.
The Vienna Convention on Civil Liability for nuclear damage, adopted on 21 May 1963, excludes mini power plants in ships and aircrafts from its application.
If nuclear damage is similar to civil law damage, then it could be ruled the same way: the nuclear ship user would be solely responsible for nuclear damage. This is in accord with civil law, in which a person who is using a dangerous item or object is to be held accountable for all damage that comes from it. Exceptions to this rule exist only in cases when the owner or user of a dangerous object is conscientious and a third party misused the object or committed damage.
The provisions of liability apply to a nuclear ship from the moment the nuclear fuel is loaded. The ship bears the flag of the country where it was built. After sale to a new owner, the flag may be changed because the new owner determines the country in which the ship is registered.
The state whose flag the nuclear ship flies is seen as the licensing state and has an obligation to exercise permanent control. If it is a ship owner, the state is liable for compensation for damage claimants. So states are advised not to grant a licence or authority to operate a nuclear ship flying the flag of another state. If uniform rules were to be accepted by all countries that precaution would become unnecessary.
Originally the value of a ship provided compensation for damages arising from it. But that can be insufficient and liability insurance for the operator evolved out of the need to protect the ship owner against damage caused to transport users or third parties. The ship user has to have a financial instrument such as insurance or other similar guarantee, in order to pay for the damage.
A person who has suffered nuclear damage should have the right to directly claim compensation from the insurer of the nuclear ship user, or the person who provided the financial guarantee to cover the liability of the nuclear ship user. International instruments do not prevent states or legal enterprises from setting up special funds to pay for nuclear damage.
A nuclear ship operator who has recovered nuclear damage should have the right of recourse to the person who intentionally caused the nuclear accident.
When two or more nuclear ship users are responsible for nuclear damage and the damage attributable to each user cannot be reasonably separated, then nuclear ship users should be held jointly and severally liable for such damage. Each nuclear ship user should have the right to seek proportionate to fault contributions from other users. When circumstances are such that the proportion of fault cannot be determined, the overall liability should be divided into equal parts.
There should also be provisions where the liability of a nuclear ship user may be reduced. This may apply if they prove that the injured party intentionally caused the nuclear damage. The court, in such an instance may fully or partly relieve the nuclear ship user of their liability towards such injured party.
A second reason is if nuclear damage is caused to the nuclear vessel, its equipment, fuel or supplies. That operator has already suffered certain damage and cannot be held liable for what they have already paid for. Likewise, when nuclear damage was a direct result of war, hostilities, civil war or uprising, the operator’s liability should be diminished to the extent to which they have taken all the necessary and realistic precautions. Omissions of the personnel employed by the operator should be seen as operator omissions, unless proven they were intentional.
There are specific rules around shipwrecks. A natural or legal person lifting a nuclear ship wreck and causing a nuclear accident during that operation is seen as the person who intentionally caused the accident. Generally, a ship wreck may be lifted upon request of a ship owner or the authority responsible for maintaining the fairway endangered by the wreck. If it is not possible to determine who owns the ship, the wreck may be addressed by a third interested party. If an operation is undertaken despite the lack of approval of a nuclear shipowner and it results in nuclear damage, the unauthorized person initiating lifting is liable.
Finally, the operator should not usually be liable for nuclear incidents occurring before the nuclear fuel has been taken on board of the respective ship. A duly authorized person bears the responsibility for any damage while a nuclear reactor, fuel or waste is under their care, so the owner or producer of the nuclear fuel is held responsible until the fuel is under the ship operator’s control. Similarly, after the spent fuel, radioactive products or waste are transferred the new owner becomes liable for any nuclear damage.
The right to compensation is not absolute but should be tied to time limits.
European continental law has both objective and subjective time limits. An objective time limit is determined in advance and starts from the day of the accident. If civil law statutory limitations are to be applied to nuclear damages, the right to compensation ceases if the claim is not filed within an objective time limit of ten years. If nuclear damage is caused by nuclear fuel, radioactive products or waste which was stolen, lost, jettisoned, or abandoned, the injured party must initiate proceedings within twenty years.
A subjective time limit starts from the day the injured party was informed or acknowledged in another way about the incident. The right to compensation becomes obsolete within three years from that day.
Until the late 1960s, there was a legal vacuum in the issue of liability for oil pollution damage and compensation, while claimants for pollution damage had to rely on the national civil liability law. Maritime accidents resulting in huge oil spills (Torrey Canyon, Amoco Cadiz and Exxon Valdez) initiated a process of international legislation development. The same legal vacuum existed in the field of nuclear propulsion ships.
Both nuclear and conventional ships’ pollution indemnity is regulated under two systems, depending on whether cargo or fuel is involved. In Europe, a third level of compensation for oil pollution is added to established systems.
The Civil Liability Convention (CLC) provides to persons who suffer damage from pollution by leaking or ejecting oil carried as cargo. The objective liability of the ship-owner has been established and the injured party has the right to direct compensation. The CLC was accompanied by the International Convention on the Establishment of an International Pollution Damage Fund in 1971. The Fund pays compensation when the ship-owner cannot, when insurance is insufficient to cover the damage, or when the amount of damage exceeds the limits of the ship-owner’s liability. Payments to the Fund were divided between shipowners and oil importers.
The Convention on Civil Liability for Marine Fuel Pollution 2001 (Bunker Convention) defines a wider range of responsible persons (ship operator, charterer, ship-owner, ship manager) and provides a free-standing instrument covering pollution damage only. The convention foresees compulsory liability insurance and the injured party has the right to sue the liability insurer directly.
Under the Bunker Convention, ship operators face potentially unlimited liability in certain jurisdictions where the right to limit liability does not exist or can be broken easily. Those aspects that may pose significant problems to shippers and insurers require the international legislators to undertake stronger actions against polluters.
The court of the state in whose territory the pollution occurred has exclusive jurisdiction to decide not only the claim for compensation filed against the ship-owner, his insurer, but also any other person. Compensation includes real damage (including loss of revenue) and non- pecuniary damage (including loss of life or personal injury). Environmental damage liability is limited to the costs of actual, reasonable measures or those that will be taken to restore the situation before the damage occurs.
Contamination with nuclear fuel is possible and can affect both marine and human life. Although the reactor core and boiler are insulated to prevent radiation damage, it is vital to minimise external impacts to avoid uncontrolled chain reactions or human casualties. It is also necessary to be prepared for rising security standards during the ships’ life cycle and the current drive to tighten liability and reduce the liability limits of nuclear or conventional vessel operators, making them fully accountable for any damage.
An ancient rule states that whoever causes harm to another — and is at fault — is obliged to provide compensation. This should be applied to all nuclear ship operators, who would bear responsibility for harm to the environment, injury or loss of human life.
Hence, it is necessary to adopt new set of international rules that would accompany technological development in this field.
Establishing a special fund for damage compensation may be the answer to plenary protection of the individuals, industry and environment.
A nuclear power plant in a ship makes its cost far higher than a conventional vessel, since it requires additional protection from collision, grounding or impact and needs more crew members than conventional ships of the same class. That makes economic viability an obstacle. In addition, any nuclear ship’s crew has to undergo special training. The only economic advantage of nuclear vessels is that their fuel is cheaper and more durable than fossil fuels.
If nuclear ships prove to be economically sustainable or productive as well as environmentally friendly, then they will be used in maritime transport.
Analyses of international treaties and civil law principles confirm that nuclear ships operators would be held accountable for nuclear damage unless they can prove that the cause of the damage was outside of their control and the effect could not have been foreseen, avoided or eliminated, or unless it can be proven to be due to a third party. Nuclear ships’ mobility represents a potential danger because, unlike immobile nuclear facilities, the ship is exposed to external factors (such as temperature oscillation, wind and water resistance, collision, corrosion etc). But the principles apply to all damages linked to ships regardless of whether they are nuclear or conventional.
Legislation can provide a framework under which the rights of all involved in the process are secured. But it is not possible to change public opinion through legislation: that requires a transparent discussion. The scientific community, governments and environmentalists must convince local communities that the technologies used in shipping are reliable.
Author information: Iris Bjelica Vlajic, Associated professor at the High Maritime School of Academic Studies