Licensing and Liability of Atomic Energy

Policy and State Control

Section 2 states the policy of the Philippine Government to encourage, promote, and assist the development and use of atomic energy for all peaceful purposes.
Section 2 requires State control of the production and use of atomic energy facilities and atomic energy materials to:
- fulfill international obligations of the State;
- protect the health and safety of workers and the general public; and
- protect against unauthorized purposes.
Section 2 declares it is in the national interest to establish rules on liability for nuclear damage and to assure the availability of funds to satisfy liability claims.

Key Definitions Under the Act

Section 3 defines the Commission as the Philippine Atomic Energy Commission.
Section 3 defines atomic energy facility as equipment or a device that the Commission may determine by regulation to be capable of producing or utilizing atomic energy material in a significant quantity or manner to national interest or public health and safety.
Section 3 defines atomic energy material to include “source material,” “special fissionable material,” and any other radioactive material.
Section 3 defines nuclear damage as loss of life, personal injury, or loss of, damage to, or loss of use of property arising out of radioactive properties or a combination of radioactive properties with toxic, explosive, or other hazardous properties of nuclear fuel or radioactive products or waste in, of, or sent to a nuclear installation, or ionizing radiation emitted by any other source of radiation inside a nuclear installation.
Section 3 defines nuclear incident as any occurrence or series of occurrences having the same origin that causes nuclear damage.
Section 3 defines nuclear installation to include:
- any nuclear reactor (other than one with which a means of sea or air transport is equipped as a power source);
- factories using nuclear fuel to produce nuclear material, factories processing nuclear materials (including re-processing irradiated nuclear fuel); and
- any facility storing nuclear material (other than storage incidental to carriage).
Section 3 defines person broadly to include individuals; partnerships; private or public bodies whether corporate or not; Government agencies other than the Commission; international organizations enjoying legal personality where the nuclear installation is situated; and any State or its constituent subdivisions, plus legal successors, representatives, agents, or agencies of the foregoing.
Section 3 defines radioactive products or waste to include radioactive material produced in, or material made radioactive by exposure incidental to the production or utilization of nuclear fuel, excluding nuclear fuel or radioisotopes that have reached the final stage of fabrication so as to be usable for scientific, medical, agricultural, commercial, or industrial purpose.

Licensing and Regulation of Atomic Energy Facilities

Section 6 makes it unlawful for any person to transfer, construct, receive, own, possess, operate, import, or export any atomic energy facility except under a license issued by the Commission.
Section 7 requires that each license application for an atomic energy facility be in writing and contain information the Commission requires, including:
- technical and financial qualifications;
- character and citizenship of the applicant;
- technical information on the proposed facility, reactor fuel requirements (amount, kind, source), proposed location and site, operational procedure, and other Commission-required information to assess undue risk to public health and safety.
Section 8 requires the Commission to issue a facility license only upon finding that:
- the proposed activities are consistent with Section 2 policies;
- the applicant is technically and financially qualified;
- the activities will not pose undue risk to health and safety of the public; and
- the applicant has required financial security if required by the Act or Commission regulations.
Section 9 prohibits issuing any license to acquire, own, or operate an atomic energy facility to an alien or to any corporation or entity owned or controlled by an alien, a foreign corporation, or a foreign government; a corporation or entity is not considered alien-owned if at least sixty percent (60%) of its capital stock is owned by Filipino citizens.
Section 10 authorizes a provisional license for constructing an atomic energy facility when there is reasonable assurance (based on technical information/data available) that the installation can be constructed and operated at the proposed location without undue risk to public health and safety; a provisional license may issue even if health and safety information available is less than what would be needed for operation if reasonable assurance exists that health and safety questions will be resolved to warrant an operating license.
Section 11 requires the Commission to issue a license to operate upon filing additional needed data and upon finding the facility was constructed and will operate in conformity with the application as amended and with the Act and Commission regulations, and absent good cause why granting a license would not be in accordance with the Act.
Section 12 requires the National Science Development Board Chairman, upon recommendation of the Commission, to establish an Advisory Board (not exceeding eleven members) composed of experts outside the Commission from other government agencies or the private sector or both; the Commission retains final decision and responsibility; written opinions/reports must be made available to the public.
Section 13 allows continued operation despite a revoked license when public convenience and necessity or the Commission’s development program requires it; after consultation with the Public Service Commission or appropriate agency, the Commission may order possession and operation for the required period or until a new license becomes effective; just compensation must be paid for use.
Section 14 requires that operators of commercial-power atomic energy facilities still comply with other applicable existing law requirements (franchise, certificate of public convenience and necessity, approval for rates and services, and others); upon certification by the Commission, importations of nuclear fuel for use in these facilities are free from all taxes and duties for ten years commencing from the date of delivery of the first importation of fuel for the first such atomic energy facility in the country, notwithstanding contrary provisions of existing laws.
Section 15 requires the Commission to:
- prescribe classes of atomic energy facilities for which individual operators’ licenses are required to protect public health and safety;
- determine qualifications of such individuals;
- issue such individual licenses; and
- suspend or revoke such licenses for violations of the Act or any Commission regulation/order.

Licensing and Regulation of Atomic Energy Materials

Section 16 makes it unlawful for any person to manufacture, produce, receive, possess, own, use, transfer, import, or export any atomic energy material except under a Commission license or as otherwise authorized by the Commission under the Act; mining and processing of radioactive ores or minerals are governed by applicable mining laws prior to removal from their place of deposit in nature.
Section 17 authorizes the Commission by regulation to exempt small quantities of low activity atomic energy materials and users or uses from licensing requirements if the Commission finds the exemption will not constitute undue risk to public health and safety and will be consistent with national interest.
Section 18 requires that anyone who ships or transports atomic energy materials comply with Commission regulations and orders necessary to protect health and safety of the public.
Section 19 requires applications for atomic energy material licenses to be in writing, contain Commission-required information, and be signed by the applicant or licensee; multiple license types specified in the Act may be combined in a single application.
Section 20 requires Commission issuance of a material license only upon findings that:
- the proposed activity is consistent with Section 2 policies;
- the applicant is technically and financially qualified;
- the activity will not pose undue risk to public health and safety; and
- the applicant has financial protection to fulfill liability obligations for nuclear damage if required.
Section 21 grants the Government (acting through the Commission) the right to acquire any special fissionable material owned by a person in the Philippines when, in the Commission’s view, development of atomic energy in the Philippines or the national interest requires; acquisition must be for a fair and reasonable price.

Common Licensing Rules and Enforcement

Section 22 requires each license to be in a form and with terms prescribed by the Commission to effectuate the Act; every license is subject to Commission possession/control rights and all other Act provisions and valid Commission regulations/orders.
Section 23 limits the duration of each license to a specified period determined by the Commission depending on the activity type, not exceeding thirty five years, and allows renewal upon expiration.
Section 24 prohibits transferring, assigning, encumbering, or otherwise disposing of any license or right under it without:
- full information to the Commission; and
- a Commission written consent finding that the transfer/disposition is in accordance with the Act’s purposes and provisions.
Section 25 makes all license terms and conditions subject to amendment or modification due to amendments to the Act or amendments of Commission regulations/orders issued under the Act.
Section 26 authorizes regulatory enforcement before decisions or during licensing, including:
- requiring additional written statements under oath or affirmation (if Commission so decides) and additional technical information/data;
- entering licensed premises or material storage sites at reasonable times for inspection;
- ordering applicants/licensees to adopt measures to eliminate or protect against endangering conditions for life, health, or property.
Section 27 allows suspension or revocation for:
- material false statements in applications or required statements/records/reports;
- reasons/conditions warranting refusal based on the application/statement/inspection or other means;
- failure to construct or operate in accordance with the license terms;
- violation or failure to observe any Act terms or any Commission regulation/order.
Section 28 requires the Commission, upon suspension, revocation, or expiration (not renewed), to take or require necessary measures to protect public health and safety or national interest; the Commission may take temporary custody of atomic energy materials or facilities held by the licensee pending lawful disposition by or for the licensee.
Section 29 clarifies that conducting activities by or on behalf of the Commission does not require a license under the Act.
Section 30 authorizes combining multiple activities for which a license is required into a single application and a single license authorization; the Commission may require applications or statements be under oath or affirmation.
Section 4 establishes the Commission’s broad authority, including issuing regulations/orders, inspecting, licensing and regulating or prohibiting import/export as necessary in the national interest, modifying/suspending/revoking licenses, requiring records/reports, holding hearings/investigations with subpoena power, establishing advisory boards (with per diem not exceeding fifty pesos per meeting), regulating safe transport, and charging/collecting reasonable fees imposed by regulation on published criteria.

Administrative Procedure, Regulation Notice, Review

Section 31 requires the Commission to hold a hearing (including for provisional licenses and applications to transfer control) upon request of any person whose interest may be affected, and to admit such person as a party.
Section 31 prohibits effectiveness of orders suspending, revoking, or modifying a license, and orders under Sections 13, 21, 26, or 28, until after notice and opportunity to be heard, except when immediate action is needed to protect public health and safety or national interest.
Section 31 provides that if an order is made effective without prior hearing notice, it is temporary pending the hearing and issuance of a final decision.
Section 32 requires that no Commission regulation becomes effective less than fifteen days after publication in the Official Gazette; the Commission may make regulations effective immediately upon publication or upon furnishing copies to persons affected when health and safety or national interest requires.
Section 33 prohibits admission of any licensee incident report (made pursuant to Commission requirements) as evidence in any suit or action for damages arising from matters mentioned in the report.
Section 34 directs that Commission hearings/investigations follow Commission-adopted rules; the Commission is not bound by technical rules of evidence, while excluding irrelevant, immaterial, or duly repetitious evidence as a matter of policy.
Section 35 requires Commission orders/decisions after hearing to be in writing, clearly stating facts, issues, and reasons, and made available to the public.
Section 36 gives the Court of Appeals judicial review of any final Commission order/decision under Section 35, allowing modification or setting aside when there is no evidence reasonably supporting the order/decision or when contrary to law.
Section 36 provides that review must be sought by application within the period the Commission prescribes, but not exceeding thirty days from notice, by certiorari in appropriate cases or petition for review under the Rules of Court; appeal does not suspend the grant of a license but stays suspension/revocation until final disposition unless the Court determines otherwise; Supreme Court review is limited to questions of law only.

Liability for Nuclear Damage

Section 37 makes the installation operator liable for nuclear damage upon proof that the damage was caused by a nuclear incident:
- in the operator’s nuclear installation; or
- involving nuclear material coming from or originating in the operator’s nuclear installation and occurring before contractual liability for that material is assumed by another operator (or, absent written contract, before another operator has taken charge); or
- involving nuclear material sent to the operator’s nuclear installation and occurring after liability is assumed by another operator under written contract (or, absent written contract, after the operator has taken charge).
Section 37 provides a special rule where nuclear damage is caused by a nuclear incident in a nuclear installation involving nuclear material stored incidentally to carriage: the operator’s liability under paragraph (a) does not apply where another installation operator or person is solely liable under the Act’s referenced provisions.
Section 37(d) imposes installation operator liability for nuclear incidents involving nuclear material during carriage to/from nuclear installations outside the Philippines, applicable only in the absence of an effective international agreement to which the Philippine Government and the government of the foreign nuclear installation are parties.
Section 38 establishes absolute liability: installation operator liability for nuclear damage is absolute and cannot be relieved because damage is caused directly or indirectly by a grave natural disaster of an exceptional character.
Section 38(c) provides that, except as otherwise provided in Part VII, no person other than the installation operator is liable for nuclear damage.
Section 39 gives the installation operator a right of recourse only:
- if a right exists under an express written contract with another installation operator; or
- if the nuclear incident results from an intentional act or omission to cause damage, against the individual who acted or omitted to act with such intent.
Section 40 authorizes a court to relieve the installation operator from paying compensation in respect of damage suffered by a claimant when the nuclear damage resulted wholly or partly from the claimant’s gross negligence or from the claimant’s intentional act or omission to cause damage.
Section 41 excludes liability for nuclear damage directly due to an act of armed conflict, hostilities, civil war, or insurrection.
Section 42 caps liability at an amount in Philippine pesos equivalent to five million dollars (United States currency) for any one nuclear incident, exclusive of interest or costs that may be awarded.
Section 43 removes installation operator liability under this Act for:
- the nuclear installation itself or property on the site used or to be used in connection with that installation; and
- the means of transport upon which the nuclear material involved was located at the time of the nuclear incident.
Section 44 preserves liability outside this Act by clarifying that:
- individual liability remains where an individual is liable under Sections 41 and 43 due to intent; and
- the installation operator remains liable outside this Act for nuclear damage where the operator is not liable under referenced provisions.
Section 45 allows the Commission, by regulation, to exclude by regulation any small quantities of nuclear material from Part VII if the Commission determines the small extent of risks warrants exclusion.
Section 46 requires that no license to operate a nuclear installation be issued unless the installation operator secures and maintains insurance or other financial security covering liability for nuclear damage; the Commission must prescribe the type and terms, guided by assuring adequate and effective compensation for potential victims without imposing an unreasonable burden.
Section 47 requires the appropriate installation operator to provide a certificate to the carrier of nuclear material, in the form and with the information prescribed by Commission regulations, including:
- name and address of the appropriate installation operator;
- amount, type, and duration of security; and
- a statement that certificate information may not be disputed by the person for whom/on whose behalf the certificate was issued;
- the certificate must identify the nuclear material covered and include Commission verification that the designated person is an appropriate installation operator; the certificate is issued by or on behalf of the insurer or other financial guarantor providing the security.
Section 48 provides that where both nuclear damage and other-than-nuclear damage are caused by a nuclear incident (or jointly by a nuclear incident and other occurrences), the other damage deemed not reasonably separable from nuclear damage is treated as nuclear damage for purposes of Part VII; where joint causation involves an emission of ionizing radiation not covered by Part VII, Part VII does not limit liability related to that emission.
Section 49 establishes multiple-operator rules:
- where damage attributable to each operator is not reasonably separable, operators are jointly and severally liable;
- in nuclear incidents in the course of carriage (same means of transport) or storage incidental to carriage (same nuclear installation), total liability does not exceed Section 42’s limit;
- in those cases, no operator’s individual liability exceeds Section 42’s limit.
Section 50 states that where several nuclear installations of one installation operator are involved in one incident, subject to Section 49, the operator is liable for each installation up to the Section 42 limit.
Section 51 allows the Commission, subject to terms and conditions it prescribes by regulation/order, to designate a carrier of nuclear material or a handler of radioactive waste (with request and consent of the installation operator concerned) as an installation operator for purposes of Part VII regarding the nuclear material/waste; the designated carrier/person is treated as an installation operator.
Section 52 requires Government indemnity through the Commission to indemnify the liable installation operator and provide necessary funds where insurance/other financial security is inadequate, but combined Government obligation plus security yield must not in the aggregate exceed the maximum amount in Section 42 per nuclear incident.
Section 53 provides for claims handling when damage likely exceeds Section 42:
- on petition of the operator or the Commission with showing that damages will probably exceed the limit, the court issues orders for equitable distribution, partial payments before final determination, and setting aside funds for possible latent injuries not discovered until later;
- when it appears damage exceeds or will probably exceed Section 42, the Commission must report to Congress with recommendations, including possible appropriation of additional funds.
Section 54 gives the Court of First Instance in the place where the nuclear incident occurs exclusive jurisdiction over claims for compensation under this Act.
Section 55 allows the Commission to intervene in court proceedings when Government indemnity under Section 52 appears likely, upon petition and at any time before final judgment.
Section 56 allows the Commission, after a nuclear incident where compensation may be payable, to determine exposed persons and adopt measures that include summons to submit to examination within three months from summons; courts may consider the claimant’s inexcusable failure to comply in determining damages or right to recover.
Section 57 requires the Commission to investigate cause and extent of nuclear incidents where compensation may be payable; findings must be made available to the public, the parties involved, and the courts.
Section 58 authorizes the Commission to determine that several nuclear installations of one operator at the same site are treated as a single nuclear installation for purposes of Part VII.
Section 60 prohibits insurers/financial guarantors from suspending or canceling insurance/financial security provided under the Act without prior written notice required by Commission regulations.
Section 61 allows persons entitled to compensation to sue, at their option, the liable operator or the insurer/other financial security providers required under the Act.
Section 62 provides prescription rules:
- rights to compensation prescribe after ten years from the date of the nuclear incident;
- actions are barred unless brought within three years from the date the person suffering nuclear damage knew or should have known of the damage and of the liable installation operator;
- a claimant who sues within the applicable period may amend the claim to take into account aggravation even after expiry of that period, if final judgment has not been entered.
Section 63 provides a special computation where nuclear material was stolen, lost, jettisoned, or abandoned: the period under Section 62 is computed from the nuclear incident date, but cannot exceed twenty years from the theft/loss/jettison/abandonment.
Section 59 contains the Act’s Government exemption from financial security.

Penal Provisions

Section 64 punishes wilful violation, attempt to violate, or conspiracy to violate Section 6 or Section 16 with imprisonment of not more than five years, or a fine of not more than Ten thousand pesos (P10,000.00), or both.
Section 65 punishes wilful violation, attempt to violate, or conspiracy to violate any provision of the Act for which no specific penalty is provided or any regulation/order/license issued under the Act with imprisonment of not more than two years, or a fine of not more than Five thousand pesos (P5,000.00), or both.

Final Clauses

Section 66 provides separability: invalidity of any provision or application does not affect the remainder of the Act or the application to other persons/circumstances.
Section 67 provides a repealing clause: all Acts, executive orders, administrative orders, proclamations, rules, and regulations inconsistent with the Act are repealed or modified accordingly.