National

Japan brings life to nuclear accident fund

Six-nation kitty offers financial help for dealing with disasters

Bloomberg, Kyodo

An international pact on nuclear disaster compensation will enter into force April 15 after Japan signed on to the treaty last week, and a fund will be created to help victims of accidents like the one at the Fukushima No. 1 power plant in 2011.

The Convention on Supplementary Compensation for Nuclear Damage, which will come into force 90 days after Japan’s treaty acceptance, obliges each country to cover at least ¥47 billion in compensation in connection with nuclear disasters within their borders. The other member countries are required to contribute to compensation above that amount with funds set aside by business operators related to nuclear power.

Under the treaty, Japan will contribute up to ¥4 billion to an international fund and could receive up to ¥7 billion to cover compensation in the event of another nuclear accident.

The decision taken by Japan, with the world’s third-biggest installed nuclear capacity, ended a 17-year wait for the treaty to become legally binding.

“As a country that experienced an accident, Japan has a responsibility to push forward, not only nuclear safety but also the international convention,” Mitsuru Kitano, Japan’s ambassador to the International Atomic Energy Agency, said Thursday in Vienna, where he deposited the treaty.

Japan will seek to get more Asian countries to adopt the accord, he said.

The convention will allow countries and companies to offset liability in the event of a nuclear accident. The U.S., with the world’s largest installed nuclear-power base, has championed the convention but struggled to get other leading atomic powers on board. Argentina, Morocco, Romania and the United Arab Emirates are the only other signatories.

“The use of nuclear power looks set to continue to grow throughout the world in the coming decades and it is important to have adequate compensation schemes in place,” IAEA Director General Yukiya Amano said at the signing ceremony. Japan’s accession is a “valuable additional step toward establishing a global nuclear liability regime.”

Even as global nuclear power generation sank last year to its lowest level in more than three decades, IAEA forecasters see installed capacity growing at least 8 percent by 2030. Asian countries, with a combined 47 reactors under construction, are propelling the growth.

Countries have struggled to reassure populations about the safety of nuclear power after the 2011 tsunami caused three reactors at Fukushima No. 1 to melt down and forced 160,000 people to evacuate their homes.

The pact is seen as likely to help promote Japan’s exports of nuclear power plants at a time when the administration of Prime Minister Shinzo Abe is seeking such exports and is in talks with India to export nuclear power technology there.

The convention is also likely to make it easier for Japanese nuclear plant manufacturers to export products to member countries because it limits their responsibility in the event of a disaster.

The pact may also make it easier for foreign firms to offer technology to help decommission the Fukushima reactors and clean up the fallout.

While the new compensation fund is intended to encourage nuclear trade between companies located in countries adhering to the pact, it will not come without costs for U.S. manufacturers. Nuclear suppliers will be on the hook to pay at least $70 million in compensation in the event of an accident, according to the U.S. Department of Energy, which asked the industry for comments last month.

“Initial great expectations for the CSC have been tempered by the long road to its entry into force,” James Glasgow, a partner at Washington-based Pillsbury Winthrop Shaw LLP, wrote last month. There are still “doubts that the CSC will gain sufficient members to constitute a global regime.”

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