Nuclear risk: Make ’em pay

Lawrence Solomon
National Post
November 6, 2002

Nuclear power is absolutely safe, the nuclear industry is fond of saying. Only scaremongers, the ignorant and fools think otherwise, it maintains.

Canadian governments have fallen for the nuclear industry’s assurances but, thankfully, Canada’s private sector lenders haven’t. Knowing that the risk of nuclear contamination is real, and that they could be on the financial hook in the event of radioactive contamination, banks and other private financiers have refused to back nuclear facilities.

Soon that will change, the nuclear industry believes, thanks to an innovation designed to make investments in nuclear power safe enough for banks. The innovation is not a tightened safety technology, but a weakened Nuclear Safety and Control Act. With the passage of Bill C-4, which is now wending its way through Parliament, banks and other lenders will be absolved of worrisome liabilities in the event of a mishap.

To make nuclear power safe for other nervous Nellies – such as General Electric, Westinghouse, and other nuclear reactor manufacturers – the federal government took other measures. In the nuclear industry’s early days, GE et al. were worried sick that something small could go wrong – a broken valve, a malfunctioning alarm – and the consequences could be big. One meltdown could lay waste an entire city, the manufacturers explained, adversely affecting them and their shareholders. Legislators in Canada took the manufacturers’ concerns to heart, and took steps to ensure that a simple meltdown that inadvertently took out Toronto wouldn’t also take out a nuclear manufacturer. Canada passed the Nuclear Liability Act in the 1970s to guarantee that no harm whatsoever could come to a GE should any of its nuclear parts fail. To further ease the manufacturers’ nuclear paranoia, the legislation protects them even if an accident results from defective products that they had knowingly shipped, or safety documents that they had knowingly falsified.

The government failed to allay the fears of insurance company executives, who didn’t accept the claim that nuclear plants were virtually risk-free. As a result, insurance policies do not cover our homes and property in the event of a nuclear accident. The risk of a worst-case accident – which some U.S. studies have estimated at more than $400-billion – is just too calamitous to the bottom line for any insurer to contemplate.

Everyone is now reasonably safe in Canada – the lenders, the operators, the manufacturers, the insurers. Everyone, that is, except members of the public, who can neither insure themselves beforehand nor sue for compensation afterwards.

Despite these protections, the worldwide nuclear industry wants more. Although private nuclear companies feel safe at home, they worry that a meltdown in one country would expose them to liability laws in neighbouring lands. As would exports of nuclear goods, should an accident occur during shipping. In the belief that you can never be too safe, the industry is lobbying to make the world a Nuclear-Liability-Free Zone. The industry’s goal is an international protocol, governing all countries, that eliminates any untoward risk to private companies in the nuclear industry.

The state-run portion of the nuclear industry has no great liability concerns. Not so the nuclear industry’s private-sector players. Their concerns were voiced at an international symposium hosted by the Uranium Institute in 1999 by Washington lawyer Omer F. Brown, a member of the OECD Nuclear Energy Agency Contact Group on Liability and the counsel to two major nuclear industry groups: the Contractors International Group on Nuclear Liability and the Energy Contractors Price-Anderson Group.

“It is important to reiterate the fundamental factor that underlies the concerns of privately owned contractors and suppliers: Private – as distinguished from state-owned – companies have a fundamental obligation to protect the assets of their shareholders,” he explained.

“Private companies are exposed to tort and other liabilities to the full extent of their assets. The greater the assets of a private company, the greater its liability concerns are. Private companies ordinarily do not enjoy the immunities that governments and state-owned entities do. Company directors and officers even can be sued by shareholders for imprudent business decisions.”

To the relief of Mr. Brown and his clients, serious efforts are now underway to create the Nuclear-Liability-Free Zone that they wish. Various states are passing legislation that would further an international protocol, and the OECD’s Nuclear Energy Agency has taken up the cause of establishing a Nuclear-Liability-Free Zone. The logic of the Kyoto Protocol also gives governments a reason to lessen the nuclear industry’s international liability, just as it gives Canada’s Natural Resources Minister, Herb Dhaliwal, a rationale for weakened domestic safety legislation.

Solving the nuclear industry’s remaining liability concerns gives governments a warm feeling of accomplishment, and it makes the nuclear industry feel better. But it will leave the public out in the cold, should the accidents everyone in the industry expects but denies come to pass.

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