The 109th Congress is considering the Changed Circumstances Petition , submitted to theUnited States Congress by the Republic of the Marshall Islands (RMI), for further compensation fordamages resulting from U.S. nuclear testing on Marshall Islands atolls during the 1940s and 1950s. Key oversight committees are the Senate Energy and Natural Resources Committee, the HouseResources Committee, and the House International Relations Committee. On May 25, 2005, theHouse Committee on Resources and the Subcommittee on Asia and the Pacific of the HouseCommittee on International Relations held a joint hearing on the Changed Circumstances Petition . On July 19, 2005, the Senate Committee on Energy and Natural Resources held an oversight hearingon the effects of the U.S. nuclear testing program on the Marshall Islands. According to U.S. government estimates, the United States has spent between $520 millionand $550 million in the Marshall Islands on nuclear test-related compensation and assistance,including health care, medical surveillance and environmental monitoring, cleanup of contaminatedsites, and resettlement efforts. About one-half of this assistance was provided through congressionalex gratia payments. (1) TheCompact of Free Association, which established the Marshall Islands as a "freely associatedstate," (2) extended $150million for nuclear test-related compensation as part of a "full and final settlement" (3) of claims. Under Section 177(Article IX) of the Compact, additional compensation may be requested by the RMI, if loss ordamages to persons or property arose or were discovered that could not reasonably have beenidentified as of the effective date of the agreement and if such injuries rendered the provisions of theCompact "manifestly inadequate." In September 2000, the Marshall Islands government submittedto the United States Congress a Changed Circumstances Petition requesting additional compensationpursuant to the Compact. The Petition requests compensation for personal injury awards, propertydamages (loss of use, restoration costs, and hardships suffered), health services infrastructure, ahealth care program, radiation exposure monitoring, and other programs. The Petition justifies its claims of "changed circumstances" largely upon "new andadditional" information since the Compact's enactment -- declassified Department of Energy recordsin the early 1990s that indicated a wider extent of radioactive fallout than previously known ordisclosed and scientific findings that reduced the levels at which exposure to radiation was deemedsafe. As a result of, and in addition to, the above findings, the Petition and accompanying materialsargue that higher than expected health consequences and costs of health care and environmentalcleanup, as well as lower than expected investment returns from the Nuclear Claims Fund, constitutechanged circumstances. Furthermore, according to the Petition's supporting arguments, the NuclearClaims Fund constituted a provisional, "political settlement" rather than a final determination basedupon a conclusive scientific assessment of costs. The Petition contends that the U.S. Congressagreed to retain its authority, through legislation to approve the Compact ( P.L. 99-239 ), toappropriate additional compensation should the need arise. (4) Furthermore, legal counsel for the four nuclear-affected atollsmaintain that U.S. courts left open the possibility that RMI plaintiffs could also return to the courtsif they did not receive adequate compensation from Compact provisions. The Petition's monetary requests include unpaid Nuclear Claims Tribunal (NCT) personalinjury awards of $15.7 million; unpaid NCT property damages awards to Enewetak Atoll and BikiniAtoll totaling $949 million; $50 million for medical services infrastructure; and $45 million annuallyfor 50 years for a health care program for those exposed to radiation. In November 2004, the U.S. Department of State released a report compiled by aninteragency group (Departments of State, Energy, and Defense) evaluating the legal and scientificbases of the Petition. (5) Thereport concludes that "the Marshall Islands' request does not qualify as 'changed circumstances'within the meaning of Article IX of the nuclear claims settlement agreement enacted under Title II,Section 177 of the Compact of Free Association Act of 1985." The report also disputes some keyscientific claims of the Petition regarding the geographical extent of radioactive fallout, radiationdose estimates, and the applicability of U.S. standards to conditions in the RMI. Consequently,according to the Bush Administration, there is no legal basis for considering additional payments. The Administration report further suggests that the radiological health care needs of the RMI,as requested in the Petition, are addressed in part through health sector grants of approximately $16million per year as provided by the amendments to the Compact of Free Association. (6) RMI officials point out,however, that the Petition's requests were not a part of the bilateral negotiations to amend theCompact, and that the Compact, as amended, was not intended to take account of nuclear testcompensation claims. (7) They add that a large proportion of the expenditures noted in the Administration report supportedU.S. government research into the effects of radiation upon human beings and the environment andbenefitted U.S. interests, but did not directly benefit communities affected by the nuclear testing. This report analyzes and discusses several issues related to key personal injury, health care,and property damages claims in the Petition. These include expected radiation-related illnesses inthe Marshall Islands; the methodology for determining the value of "lost use" of damaged properties;the appropriate standard of risk (annual dose limit) for determining cleanup levels; and the extentof radioactive fallout. Finally, this report discusses possible legal options for the RMI in pursuingnuclear damages claims. Congress has several policy options regarding the Marshall Islands' request for additionalcompensation for nuclear damages. These include: Grant or reject the Changed Circumstances Petition's requests, in whole or inpart, on the basis of the changed circumstances rationale. Continue congressional ad hoc, ex gratia payments through Department of theInterior appropriations measures. Enact legislation that would provide for a "full and final settlement" ofclaims. Allow the federal courts, through an amendment to the Compact of FreeAssociation, to review the judgments of the Nuclear Claims Tribunal and potentially to order theUnited States to pay these awards, in whole or in part. (8) The following sections summarize selected key issues related to the Changed CircumstancesPetition . These issues are analyzed in depth in subsequent sections of the report. The Petition'spersonal injury claims and health care requests are modeled after U.S. programs for compensatingradiation-exposed individuals, and based upon scientific studies establishing the areas of theMarshall Islands in which residents likely have been exposed to dangerous levels of radioactivecontamination. A National Cancer Institute (NCI) study, discussed below, provides support for theneed for compensation. However, as noted below, there is some dispute regarding the portion of theRMI population that has been exposed to radiation from the nuclear weapons tests. The Petition's request for compensation to conduct further environmental restoration is basedon a U.S. Environmental Protection Agency (EPA) cleanup standard, and the RMI assertion that thecontamination is more widespread than previous surveys had found. The issue of whether the EPA'sstandard should apply to the cleanup of the Marshall Islands, as well as disagreement over the extentof contamination, are summarized here and examined later in the report. A significant amount ofthe property claim in the Petition is based on the claimants' "loss of use" calculations. This reportprovides an assessment of the methodology employed by the claimants in calculating "loss of use." Test-Related Cancer Estimates. The NCI inSeptember 2004 estimated that nuclear testing would result in about 530 additional lifetime cancersamong the 14,000 Marshall Islands residents exposed to the testing. NCI also estimated that about5,600 cancers would have occurred in that population without the fallout exposure. Because thecancers caused by testing cannot be distinguished from cancers that would have occurred anyway,all victims of certain types of cancers are being compensated. NCI estimates that about half thecancers expected in the exposed population have yet to be diagnosed, so additional compensationclaims are likely. "Loss of Use" Methodology. In general, themethodology used by the NCT to estimate the value of the lost use of the claimants' property isconsidered to be reasonable and appropriate. For several reasons, however, the specific applicationof the methodology -- much of the critical data used, many of the assumptions, and certain statisticalprocedures applied (i.e., the sampling technique and the regression model) -- result in past and futureloss-of-use estimates that appear to be overstated, which leads to possibly excessive total damagesclaimed and awarded by the NCT. The main problem is with the use of inflated average rents peracre, which are estimated by applying an exponential regression model to unrepresentative sampledata that reflect RMI government-influenced rents, rather than competitive, free-market rents. Thiscan lead to an overestimate of not only past loss-of-use, but because estimated rents is a criticalvariable used as an input into future-loss-of-use calculations, a possible overestimate of futureloss-of-use as well. The methodology also 1) assumes that more land is lost to use, and for longer periods thanis actually the case, 2) undervalues the rentals on alternative atoll habitation, and 3) assumes thatrecipients of rental proceeds, as consumers and savers, would have saved 100% of the rentalproceeds. Each of these assumptions can lead to an overestimate of past loss of use. Cleanup Standards. The RMI argues that a morerecent U.S. radiation protection standard warrants further cleanup in the Marshall Islands. However,the Bush Administration contends that the standard applied to past cleanup efforts there remainsunchanged and that levels of contamination remain safe according to this standard.