Policy background Part 14: Civil Nuclear Sector Convention on Supplementary Compensation for Nuclear Damage
Nuclear Third-Party Liability (NTPL) treaties are international agreements that ensure that in the unlikely event of a nuclear incident there is a minimum amount of compensation available to victims and that claims are channeled to the operator of the nuclear installation (and not the supply chain). Operators are required to have sufficient coverage to meet their liability cap to ensure that compensation would be available to victims. These agreements ensure that claims are heard in the country in which the incident occurs, which gives clarity to victims regarding the appropriate jurisdiction for bringing claims. Further, the agreements provide for strict liability, so that claimants need only prove harm and not fault. This brings benefits to potential victims, while encouraging investment by limiting the potential liability of operators who can cover their liability through private insurance and protecting the supply chain from claims. Additionally, some regimes create an international pooling mechanism amongst contracting parties to provide additional funds to victims if the operator liability cap is reached. The UK is currently party to the 1960 Paris Convention and 1963 Brussels Supplementary Convention (together Paris-Brussels) and has ratified the 2004 Protocols that came into force on 1 January 2022. NTPL treaties are implemented domestically through the Nuclear Installations Act 1965. The UK is intending to enhance its NTPL regime by seeking accession to the Convention on Supplementary Compensation for Nuclear Damage (CSC).
	The legislation will introduce amendments to the Nuclear Installations Act 1965 in order to implement the requirements of the CSC to enable the UK’s accession. Accession to the CSC will establish treaty relations with the 11 members of the CSC, and any other countries who may join the CSC in the future. Nuclear power has an important role to play in domestic energy security and in reducing greenhouse gas emissions to net zero in 2050, and an effective NTPL regime is a key enabler for driving new nuclear projects. Accession would be likely to give private sector developers increased confidence in investing in new nuclear projects; offer participants in the UK’s nuclear supply chain protection from claims; and reduce the risk of increased costs and timings associated with essential projects such as decommissioning. Additionally, these benefits are also equally applicable to potential UK exports, both presently and into the future.
	The UK is potentially the first Paris Convention member to seek accession to the CSC. The legislation includes a section that gives the Secretary of State the power to make changes to the implementing legislation if required in the future. This is intended to future proof the legislation and ensure that the CSC works as part of the UK’s NTPL regime.
	As with the 1963 Brussels Supplementary Convention, the CSC establishes a pool of funds which countries can draw from to provide compensation for victims. The size of the fund is dependent on the United Nations contributions and installed nuclear capacity of the contracting parties at the time of an incident. The exact size of the fund will change over time as reactors come offline and online, exchange rates fluctuate, and United Nations contribution rates of contracting parties change. At present, with the UK as a contracting party the fund would be around £116 million, with the UK’s contribution £7.5 million. This would only be called upon in the event of an incident occurring in a CSC member country after exceeding the operator liability limit. To date no party has drawn on any international funds.