Protocols to amend the Paris and Brussels Conventions were signed on 12 February 2004 but have still not entered into force. Ratification and entry into force of the revised Conventions is currently scheduled for 3 January 2022. They require higher amounts of compensation than the original conventions, in order to cover a greater number of victims and types of damage that are eligible for indemnification. The State in which the nuclear facility of the operator that is liable for causing the damage is located is liable for amounts above the €700 million for which the operator is liable, up to €1,200 million (provided that said State is a Contracting State of the Brussels Convention). Over and above this amount, the Contracting States of the Brussels Convention are liable up to a maximum amount of €1,500 million. In addition, for personal injury only, the time limit to claim compensation has changed from 10 years to 30 years from the date of the incident. The definition of “nuclear damage” is evolving and includes, in addition to damages to persons and property, economic losses, the cost of protective measures, the cost of measures to rehabilitate damaged environments, and certain other losses resulting from damage to the environment.
These Conventions also provide that the operator has an obligation to take out insurance or lodge a financial guarantee for the liability amounts established in order to guarantee the availability of funds.
In France, the civil liability obligations imposed on nuclear facility operators were transposed into the French Environmental Code.
More specifically, since 2016, Articles L. 597-28 and L. 597-32 of the FrenchEnvironmental Code provide that the limits on the civil liability of nuclear operators are set at €700 million for nuclear installations (€70 million for low-risk installations) and €80 million for risks during transport.
EDF has a “Nuclear Civil Liability Insurance Programme (RCN)” insurance cover obtained following a call for tenders, which enables the Group to meet its obligations while controlling their financial impact. The insurance is shared between the nuclear insurance market (AXA, reinsured by the French nuclear pool Assuratome), theGroup’s captive insurance companies, and the nuclear mutual insurance company ELINI.
In view of probable changes to nuclear operators’ obligations during this period (particularly following the application of protocols amending the Paris and Brussels Conventions), withdrawal clauses were included in the contract.
Framatome joined the Group’s insurance system on 18 February 2020. Its insurance programme is equally divided between the nuclear insurance market (AXA, reinsured by Assuratome), the Group’s captives and the ELINI nuclear mutual insurance company.
In the United Kingdom, where EDF Energy operates nuclear power plants, the nuclear operator’s civil liability rules are similar to French rules. The UK Parliament approved on 4 May 2016 the “Nuclear Installations Order” (order transposing the above-mentioned amending Protocols of February 2004), which makes substantially the same changes as the French TSN Act in 2006 but which, for the most part, shall enter into force only in conjunction with the Protocols.
This Order will raise the British operators’ obligations from the current limit of £140 million to the equivalent of €700 million, and they will be progressively increased over a five-year period to reach a cap of €1.2 billion.
EDF Energy is currently insured by ELINI and Wagram Insurance Company DAC. There insurance company Océane Re shares in this risk under the reinsurance contract it issues for the benefit of Wagram Insurance Company DAC.
Furthermore, the Conventions provide that for Contracting States, over and above the maximum amount for which the operator is liable, the State in which the incident occurred is responsible for compensating victims up to a maximum of €217.4 million; over and above this amount, Member States that have ratified the BrusselsConvention contribute collectively to compensation up to a limit of €372.6 million.
Under the Paris Convention, the operator that is the “shipper” is civilly liable for transport of nuclear substances (unless stipulated otherwise). Since 18 February2016, the liability ceiling has been set at €80 million with an unchanged scope of damage, and will subsequently be extended to a broader scope of damage admissible for compensation when the revised Paris Convention comes into force. This liability is as of now covered by the aforementioned nuclear operator civil liability policy.
The cover obtained through EDF’s membership in the OIL mutual insurance company provides protection against material damage in cold areas, excluding the consequences of a nuclear accident, of 60% of $400 million in excess of a deductible of $15 million, both in France and the United Kingdom.
Since 1st October 2018, the insurance system covering nuclear installations has been revised as follows:
Framatome is insured with the Mutuelle EMANI for damage and consequential operating loss affecting installations involved in the manufacture of fuel, up to €650 million, with a deductible not exceeding €5 million in damages and 90 days in operating losses. In addition, EDF Inc. is a member of NEIL (Nuclear Electric InsuranceLimited) – a nuclear mutual insurance company located in the United States, so as to cover the activities of CENG (Constellation Energy Nuclear Group) in the UnitedStates.
In France and in 2020, employee health and provident insurance policies do not exclude the consequences of the pandemic; moreover, only operating losses resulting from a damage claim may be insured for certain Group companies. As a result, the Group has not been confronted with the issues related to possible pandemic-related exclusions in property and casualty insurance policies.
The total amount of Group insurance premiums for all types of cover was €240 million in 2020.
The Group’s audit unit is composed of all of the audit resources of the Group exercising an internal audit activity. Pursuant to a decision of the Chairman and CEO this function is supervised by the Group Audit Director. It includes the Internal Audit Department (“IAD” reporting to the General Secretary) and audit teams specific to each of the main French and foreign subsidiaries. The relationship between the IAD and Enedis audit teams, as well as their respective prerogatives were set to ensure compliance with the principle of management independence. The IAD carries out functional supervision of the business line (co-appointment and peer assessment of Audit Directors of the subsidiaries by the IAD – excluding Enedis –, exchanging best practices, training, sharing tools and methods, etc.). At the end of 2020, the Group audit unit consisted of 70 FTE(1).
(1) Full-Time Equivalent.
