Scrutinizing the nuclear liability in Indonesia

Andri G. Wibisana ,  JAKARTA   |  Mon, 07/06/2009 1:10 PM  |  Opinion

State electricity company Perusahaan Listrik Negara (PLN) has finally postponed its plan to build a nuclear power plant, as indicated by the plan's exclusion from the company's Electricity Procurement Business Plans (RUPTL) outlined for up to 2018 (The Jakarta Post, June 16, 2009).

Many people, especially those living near the site of the proposed plant, will certainly welcome this decision. In contrast, proponents of nuclear energy might argue that the decision is the result of baseless and irrational fear. These diverging attitudes towards nuclear energy are nevertheless common in every country.

Studies from around the world have indicated that people oppose nuclear energy because they perceive the technology to be potentially catastrophic and criticize it for exposing the population to involuntary risks and being uncontrollable and unknown. Furthermore, the rejection of nuclear energy may also be attributed to the perception that the benefits of this technology are relatively low compared to its potential impacts (P. Slovic, 2000).

In contrast, proponents of nuclear energy usually argue that opposition to the technology results from the available heuristics, whereby people perceive the risks of the technology as signifi cant and worrying, regardless of whether these risks are statistically large. In addition, opponents may focus only on the seriousness and irreversibility of damage and disregard the fact that the probability of this damage occurring is small.

Van der Pligt observes that conflicting opinions on nuclear energy might in fact reflect not only public perception towards risks, but also people's value and priority setting. Accordingly, policy makers cannot simply dismiss the opposition to nuclear power as irrational because such a dismissal is undemocratic and will certainly preclude public acceptance and trust in the technology.

Rather than accusing the public of being irrational, so van der Pligt rightly argues, the policy makers should reconsider and emphasize the equity and safety aspects of the technology (J. Van der Pligt, 1992).

One issue worth considering when discussing the equity and safety of nuclear power is the issue of compensation. A well-designed compensation system will provide not only adequate protection for the potential victims in the aftermath of a nuclear accident, but also enough incentives for the potential injurer to take the optimal level of precaution ex ante.

According to article 34, paragraph 1 of the Indonesian Nuclear Energy Act (NEA) of 1997, the liability of a nuclear operator, including its insurance or other forms of financial security, is limited to 900 billion IDRs, roughly US$87.1 million. The act is silent about the possibility of nuclear damage exceeding this amount. Although this act states that the amount can be amended by a government regulation, to my knowledge such a regulation is absent. Hence, it can be argued that any damage in excess of 900 billion IDRs would, unfortunately, go uncompensated.

This gap in financial liability is wide compared to the Amended Vienna Convention on Civil Liability for Nuclear Damage, which has also been signed by Indonesia. The Convention sets a financial cap for nuclear operator of up to 300 million Special Drawing Rights (SDRs), or approximately US$ 463 million. The Convention further specifies that if a state sets up a cap of less than 300 million SDRs, this state is obliged to ensure the availability of public funds to meet the difference between that lower cap and 300 million SDRs.

The Indonesian liability cap appears minuscule compared to the caps set up in the Paris and Brussels Conventions, which is applicable in some OECD countries, or the Price-Anderson Act, which is applicable in the US. According to a study of Faure and Borre, the OECD system provides compensation of up to $2.38 billion, which includes the individual liability of a nuclear operator, funds from the installation state and a collective fund from all state parties. Meanwhile, the US system stipulates the provision of up to $10.7 billion, comprising of $300 million from the individual nuclear operator and $10.4 billion from the so-called retrospective premium, financed by all US nuclear operators (M.G. Faure and T.V. Borre, 2008).

Further problems with the 1997 NEA include the defense that can be legally used by the operators to escape liability. Article 32 of the NEA states that a nuclear operator is not liable for accidents caused by, among other things, a grave natural disaster of exceptional character. To my surprise, the elucidation of this article includes earthquakes. Given the fact that Indonesia has suffered so many earthquakes, one may certainly find this exception unjustifiable. It seems that the NEA adopted similar exceptions in article IV paragraph 3b of the old 1963 Vienna Convention, but these were apparently removed by the Amendment Protocol of 1997.

The Indonesian compensation system for nuclear accidents is far behind the international system set up under the Vienna Convention. This picture will get even worse if we compare our compensation system with the OECD and US systems. Hence, one may expect that if a nuclear accident occurred in Indonesia, the victims would receive inadequate compensation, if any at all, while the operator and government would be busy blaming a natural disaster for causing the accident.

From the perspective of compensation, it is very clear that Indonesia is far from ready to have a nuclear power plant. Hence, the decision to cancel the plan to build a nuclear power plant was indeed the right one.

The writer is research and development director of the Community Legal Aid Institute, LBH Masyarakat, based in Jakarta. He is also a lecturer on environmental law at the University of Indonesia's Faculty of Law.

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