Building nuclear power plant in Vietnam

Mr. HirotaFushihara (SUI Advisory Service  Vietnam Ltd.,)

We are a Japanese company. We would like to invite MTON lawyers to assess the legal consequences and civil liability of all involved parties in the nuclear incident when building nuclear power plant in Vietnam (involved parties include both the party directly and indirectly cause the incident).


Mr. Dao XuanThan (MTON law firm)


Is the Law on Nuclear Power compensation established in Vietnam?

In addition to Law on State Compensation Liability (2009),Civil Code (2005), and Law on Atomic Energy Act (2008) - a specialized law regulating officially the nuclear power issues in Vietnam;until now, Vietnam does not have any law as well as drafting law related to the Law on nuclear power compensation.

How to apply the Laws related to the issue of Nuclear Power compensation?

The issue of compensation and remedy for nuclear incidents is regulated in Civil Code, Law on Atomic Energy, and other Laws such as: Law on Environmental Protection, Law on Investment, and Law on Bidding. Article 4 Law on Atomic Energy provides that in the case the provisions of this Law are different from those of another law on the same content related to atomic energy activities and assurance of safety and security in these activities, the provisions of this Law prevail. Therefore, it means that the issue of compensation for nuclear incidents is applied in accordance with the provisions of Law on Atomic Energy if there are any differences with another law.


Responsibility to pay compensations for nuclear damages

Pursuant to Article 87 and 88 Law on Atomic Energy, organizations and individuals that are owners of nuclear material or equipment or those authorized by owners to store or use these materials or equipment shall pay compensations for damage caused by nuclear incidents even though it is not their fault, except for incidents occurring due to wars, terrorism or natural disasters beyond the designed safety limits under national technical regulations.

Thus, it means that all investors, EPC contractor (or advice contractor, design contractor, supply material contractor…),organizations and individuals who store or use nuclear material or equipment have obligation to compensate in the case of nuclear incidents.

If nuclear power plant has been constructed by separated contractors instead of EPC contractor (a general contractor), each separated contractor must be responsible for nuclear incidents in accordance with the contract they signed with the main investor or share responsibility for damages that are not clear.

Damages must be compensated

The responsibility to pay compensation for radiation damage is regulated under Article 307 of Civil Code. It includes both the responsibility to pay for actual damage and compensation by cash in order to offset spirit loss for victims (agreed by parties, the law does not specify).

Levels of compensations for nuclear damage are agreed upon by involved parties. If these parties cannot reach agreement, compensation levels comply with the following provisions:

ü  Damage to human beings shall be determined under the civil law;

ü  Damage to the environment shall be determined under the environmental protection law;

Human losses will be compensated similar to the compensation for the above mentioned radiation damage.

Environmental damage will be compensated according to the Law on Environmental Protection, even though it is not their fault and includes liability for remedy damage.

The total compensation amount

Article 88 of Law on Atomic Energy regulated that total compensation per nuclear incident occurring in a nuclear power plant must not exceed SDR 150 million. For incidents occurring in other nuclear facilities and facilities in the transportation of nuclear material, the total compensation must not exceed SDR 10 million.

SDR specified in this Clause means a currency unit defined by the International Monetary Fund, standing for the special drawing right, and may be converted into Vietnam dong at the exchange rate applicable at the time of compensation payment.

Support fund for remedying nuclear damage

According to Article 91 Law on Atomic Energy, in the case nuclear damage extent exceeds the maximum compensation level per nuclear incident, the support fund for remedying nuclear damage is used. The support fund for remedying nuclear damage is raised from the following sources: contributions of nuclear facilities; financial supports of domestic organizations and individuals; financial supports of foreign organizations and individuals and international organizations…

Government’s orientation to conduct Vietnamese law and policy on nuclear power compensation

Through government’s policy and resolution issued, we can see lots of advantages for foreign investors:

(1) Vietnam strengthens the policy of attracting foreign investment.

(2) The policy of attracting foreign investment to Vietnam brings the priority for investors who use the most advanced technology in the world to apply to Vietnam.

(3) Bilateral agreement and / or multilateral signed by Vietnam usually prevail over domestic law.

(4) The problem of nuclear power plants in Japan brings the valuable lessons for building nuclear power plants in Vietnam.

(5) Representative of the IAEA expert team, Mr. Abdelmadjid DRAIA, worked with the Department for Radiation and Nuclear Safety in Mid-March 2012 to support reviewing and proposing amendments and supplements of the Law on Atomic Energy 2008.

At the time you read above text, the effective of rule or Act may have changed. Moreover, each case have not the same. MTON advised the readers not to be arbitrarily applied in the above text. Please consult a trusted attorney or contact us at the address is listed at the bottom of this website. Thank you!