Rather than providing a comprehensive explanation of Japan’s system, the lecture focused on how the allocation of responsibility in the event of an accident affects project viability, viewed from the perspective of industries participating in nuclear projects. The lecture was also made available online to undergraduate and graduate students in Fukui Prefecture.
At the outset, the lecture highlighted that for newcomer countries to nuclear power, the development of legal frameworks and institutional infrastructure is indispensable, alongside technology, regulation, and human resource development. Among these elements, nuclear liability and compensation systems were positioned as a critical prerequisite for launching nuclear projects.
A point emphasized in particular was the impact of opaque risks on financing. Where the upper limit of a nuclear operator’s liability is unclear—such as under Japan’s principle of strict and unlimited liability—private financial institutions are unable to foresee lending risks, making project finance for nuclear power infeasible.
Insufficient risk predictability directly affect decision-making not only by financial institutions but by all private companies involved in nuclear projects. Uetake noted that when vendors, suppliers, investors, and financial institutions consider participation in a nuclear project, the most critical question is whether the risks to be taken into account in the event of an accident are clearly defined. If the location or scope of those risks is ambiguous, the result inevitably materializes as higher costs.
For example, where the legal principle of channeling liability exclusively to the nuclear operator is not firmly guaranteed, liability may be dispersed. Vendors and suppliers must then each prepare for potential compensation risks, leading to overlapping insurance coverage and risk-mitigation measures and creating a high-cost structure. Furthermore, if even risks that cannot be covered by insurance are factored into costs, the competitiveness of nuclear power generation is eroded and projects ultimately cease to be commercially viable.
In addition, where other laws—such as general tort law (which governs ordinary claims for damages) or product liability law—leave room for claims to extend to vendors, investors, or parent companies, the effectiveness of liability channeling is undermined, even if it is formally stipulated. Any “loopholes” in the legal framework, he argued, themselves constitute barriers to market entry.
Against this backdrop, Uetake also referred to the significance of the Convention on Supplementary Compensation for Nuclear Damage (CSC). The CSC is regarded as playing an important role in visualizing risks by providing a clear and internationally harmonized framework for diverse stakeholders, including victims, operators, vendors, and investors. At the same time, he stressed that accession to the convention alone is insufficient; the establishment of robust domestic legislation is essential to clearly define liability caps and the role of the state in cases where damages exceed those limits.
The lecture did not seek to evaluate Japan’s nuclear liability system itself. Rather, it highlighted from an industry perspective how the allocation of responsibility in the event of an accident—and the opacity of associated risks—can constrain joint ventures and other forms of private-sector innovation. As nuclear energy is being reassessed internationally, the extent to which institutional frameworks can ensure risk predictability for project development is once again being called into question.
