Introduction

The Nuclear Safety Law was promulgated by the 12th Standing Committee of the National People's Congress's on 1 September 2017 and entered into force on 1 January 2018. Subsequently, on 20 September 2018, the Ministry of Justice published for public comment the draft Atomic Energy Law,(1) which the legislature had been drafting for nearly 30 years. Together, the two laws are expected to form the fundamental legal framework for China's nuclear energy industry.(2)

This article provides an overview of the draft Atomic Energy Law and discusses two important issues concerning nuclear energy in China:

  • the relationship between the Atomic Energy Law and the Nuclear Safety Law; and
  • the nuclear damages compensation system.

Overview of draft Atomic Energy Law

Legislative research for the Atomic Energy Law commenced in the 1980s, when China began its peaceful use of nuclear energy. Over the years, China has established a legal and regulatory regime for its nuclear industry comprising a number of basic laws and regulations, including:

  • the Nuclear Safety Law;
  • the Law on the Prevention and Control of Radioactive Pollution;
  • the Regulations on the Safety Supervision and Administration of Civil Nuclear Facilities;
  • the Regulations on the Supervision and Administration of Civil Nuclear Safety Equipment; and
  • the Regulations on the Safety and Protection of Radioactive Isotopes and Radiation Installations.

Once promulgated, the Atomic Energy Law will further improve China's existing regulatory system and will be treated as the basic law governing the nuclear industry.(3)

The draft law aims to:

  • regulate and strengthen nuclear energy research, development and use;
  • promote scientific and technological progress and development;
  • safeguard national security; and
  • promote economic and social development.

The draft law includes the following provisions.

Nuclear industrial development In order to strengthen China's nuclear industrial development, the law proposes to:

  • establish a nuclear fuel cycle system;
  • implement spent fuel recycling; and
  • ensure the proper disposal of radioactive waste.

Nuclear import and export and international cooperation In order to strengthen China's nuclear import and export and international cooperation, the law encourages enterprises to actively and orderly participate in international market development and promote the export of nuclear power, nuclear fuel and related equipment and technical services. This is the first time that international nuclear energy cooperation has been formally stipulated in Chinese legislation.

Integration of the military-private participation and application of nuclear technology In order to promote the integration of military-private participation in nuclear energy and the application of nuclear technology in various industrial sectors, the law:

  • strengthens the market allocation of resources;
  • promotes the further development of military-civilian integration; and
  • encourages the application of nuclear technology in the industry, agriculture, national defence, biology, medical care and environmental protection fields.

Promotion of public education and participation As regards the promotion of public education and participation in the nuclear sector, the law requires relevant state bodies, enterprises and institutions to improve public participation by disclosing information concerning safety regulation and environmental impact assessments through the public consultation process.

Private investment In order to accelerate private investment in the atomic energy sector, the law proposes that the state encourage the use of social capital to invest in the nuclear fuel cycle sector to enable the gradual development of a diversified investment mechanism. This stipulation provides a legal basis for using social capital to participate in the nuclear power industry chain.(4)

Relationship between Atomic Energy Law and Nuclear Safety Law

While there is still debate among academics and legislators regarding the relationship between the Atomic Energy Law and the already promulgated Nuclear Safety Law, the legislators behind the Atomic Energy Law appear to believe that it will operate as a basic law to promote the nuclear industry. Conversely, the Nuclear Safety Law focuses on:

  • the construction quality and operational safety of nuclear facilities in order to prevent large-scale radioactive releases;
  • the safety of radioactive waste and spent fuel; and
  • the disposal requirements for radioactive waste in order to mitigate the deficiencies of the Law on the Prevention and Control of Radioactive Pollution 2003, the scope of which is limited to environmental safety, the regulation of radioactive sources and radioactive waste.

Notably, the Atomic Energy Law covers all aspects of the nuclear energy industry and has a wide regulatory scope.(5)

Nevertheless, the Nuclear Safety Law and the Atomic Energy Law overlap on certain matters, such as nuclear safety. At present, there appear to be two main views among academics and legislators regarding the relationship between the two laws:

  • the 'parallel relationship' view; and
  • the 'big atomic energy law' view.

Wang Jin, director of the Centre for Nuclear Policy and Law Studies at Peking University and a professor at the Peking University School of Law, believes that nuclear safety and atomic energy legislation need not be incompatible. Rather, countries can choose whether to have two separate laws or include nuclear safety in their atomic energy law.(6) As is the case in other countries which have chosen the parallel model (eg, Canada, South Korea and Australia), China can have two separate laws, with the Atomic Energy Law mainly promoting the development of the nuclear energy industry and the Nuclear Safety Law focusing on nuclear safety.

Others, such as Wei Fulei, director of the Comprehensive Development Research Institute of the Silver Lake New Energy Strategy Research Centre of China (Shenzhen), believe that the Atomic Energy Law will serve as the parent law in the atomic energy industry and lay the legislative foundation for the industry's development. Those who agree believe that those countries which adopt this legislative model (eg, Russia) will provide for nuclear safety monitoring in the parent law. Notably, in the past two decades, some countries have amended their atomic energy laws by strengthening the provisions on nuclear safety.(7)

Nuclear damage compensation system

China currently operates 43 nuclear power units and a further 13 are under construction, rendering it the world leader in this regard. Further, China is the third highest annual generator of power worldwide. With the rapid development of nuclear energy, the potential risks of nuclear technology – in particular, the ionising radiation generated by nuclear or radiation accidents – could have a significant impact on human health and the environment. Even with the Nuclear Safety Law's enactment, China's legislation is silent as to liability for damages in nuclear accidents. Thus, the party responsible for investigating nuclear damage can be determined only with regard to the basic laws governing the legal relationship of civil liability – namely:

  • the General Principles of Civil Law;
  • the Torts Law; and
  • the Law on the Prevention and Control of Radioactive Pollution.

In addition to these basic laws, the State Council has issued:

  • the Reply of the State Council on the Handling of Third-Party Nuclear Liability Issues to the Ministry of Nuclear Industry, the National Nuclear Safety Administration and the State Council Nuclear Power Leading Group (1986); and
  • the Reply of the State Council on the Issue of Nuclear Accidents Damages Compensation Liability (2007).

However, these documents are said to be lagging behind the development of the nuclear energy sector both domestically and abroad.

These three laws and the State Council reply documents form the legal basis for determining liability for damages caused by nuclear accidents in China and establish the basic framework of China's nuclear damage compensation system. However, the two reply documents are not only overly simple in content and largely ineffective, but also provide for a low level of damages. As such, they are inadequate as a safeguarding mechanism that encourages competent authorities and nuclear enterprises to prevent nuclear safety risks.(8)

Convention on compensation for nuclear damage Although seven conventions cover nuclear damage compensation (excluding the convention on the liability of nuclear ship operators), the two main conventions in this regard are the Vienna Convention and the Paris Convention. These international legal instruments, together with their amendments and supplementary documents, form the basis of the international nuclear damage compensation system.

The principles and content of the Vienna Convention and the Paris Convention are similar. The Vienna Convention is a global nuclear damage liability convention led by the International Atomic Energy Agency, which covers a greater number of countries than the Paris Convention. The Vienna Convention system is slightly different to the Paris Convention system in terms of compensation limits and the statute of limitations.

Under the impetus of the Organisation for Economic Cooperation and Development and the International Atomic Energy Agency, the international nuclear damage compensation system has been continuously improved. As such, it has gradually become the principal nuclear damage liability legal system and is now accepted by the majority of the international community. Although some countries have not joined the above conventions, they are still affected by the basic framework of the nuclear damage compensation system.

Will China accede to international conventions? Although China has not acceded to any international nuclear liability conventions, it has adopted many of the legal principles set out in the Vienna Convention in its nuclear damage liability legislation. However, China's nuclear damage liability compensation system has a number of shortcomings which need to be remedied.

In this regard, China should not only strengthen its nuclear safety management, but also take into account the (albeit small) possibility of nuclear accidents and provide for compensation for nuclear damage. It should also make legal and institutional arrangements to develop the power industry as soon as possible.(9) This will enable China to protect its citizens and promote coordinated economic and social development and international nuclear cooperation.

Comment

The Atomic Energy Law's promulgation will promote the sustainable development of China's nuclear energy industry and ensure that it operates in a safe and orderly manner. It will also allow China to maintain its reputation as a responsible user of nuclear power. With the acceleration of China's nuclear power use, nuclear technology is becoming more widely used in various fields. As such, it is necessary to adopt laws that regulate and guide the development of the nuclear energy sector.

For further information on this topic please contact Libin Zhang or Meng Qi at Broad & Bright by telephone (+86 10 8513 1818) or email (libin_zhang@broadbright.com or meng_qi@broadbright.com). The Broad & Bright website can be accessed at www.broadbright.com.

Endnotes

(1) Further details are available here. According to the China Nuclear Energy Industry Association, the Atomic Energy Law is a major event for China's nuclear energy industry and one of the biggest developments in the association's history.

(2) Tong Pu and Zhang Jiaqi, "Entering the Atomic Energy Law", Economic Daily, 13 October 2018, 6th Edition.

(3) Ibid.

(4) Wei Fulei, "Atomic Energy Law Seeks Advice, Which Will Promote the Development of Nuclear Industry", Silver Lake New Energy Strategy Research Centre of China (Shenzhen) Comprehensive Development Research Institute, 12 October 2018.

(5) Guo Chengzhan, deputy director of the Nuclear Safety Supervision Department of the Ministry of Environmental Protection, "What are the Issues under the Nuclear Safety Law? - Interpretation of the Legislative Objectives and Scope of Application of the Nuclear Safety Law", China Environmental News, 14 March 2018.

(6) Wang Jin, "On the relationship between the Nuclear Safety Law and the Atomic Energy Law", Science and Technology and Law, 15 April 2014.

(7) Ibid.

(8) Wang Jin and Yan Baojiang, "Reflections and suggestions on accelerating the formulation of the Nuclear Safety Law in the context of rapid development of nuclear energy", Environmental Protection News, 10 April 2015.

(9) Cai Xianfeng, "The Construction of China's Nuclear Damage Liability System, Proceedings of the International Forum on Environmental Legislation and Sustainable Development", 20 October 2005.

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