The South Australian Government scheme to import international nuclear waste has a major flaw in common with the UK's Hinkley Point C project — secret contracts with foreign organisations, writes Noel Wauchope.
THESE TWO PLANS have something in common. Both the UK's Hinkley Point C plan and South Australia's nuclear waste plan are grandiose and very expensive to set up.
But, more than that, they both require the involvement of foreign governments and companies, in secret arrangements.
The South Australian Nuclear Royal Commission‘s plan for importing international wastes already involves confidential communications from foreign companies. Put into operation, the plan will mean secret contracts — South Australia being beholden to the provisions of foreign laws regarding disclosure, shipping and transport security, insurance and other matters relating to a client nation’s high level nuclear wastes (HLNW).
Plans have been suggested for foreign companies paying up front towards the setting up of the waste facility, in exchange for “ironclad contracts”to later set up “Generation IV” nuclear reactors. With foreign governments and companies involved, South Australia is very likely to become locked in to a deal from which it cannot escape. A later decision to pull out of the scheme would certainly entail heavy compensation payments to foreign companies.
Britain’s Hinkley Point C nuclear project is thoroughly embroiled in complicated negotiations with the government-owned companies of China and France. The major backer, Electricite De France (EDF) is in grave financial trouble and its financial director Thomas Piquemal has resigned, over this Hinkley project. EDF is being bailed out by the French government, so that the £18bn plan can go ahead. UK has had to agree to a contract with EDF, amounting to about £40bn in real terms, and providing State guarantees on insurance, among other matters. The plan locks the UK in, with compensation costs in the event of it being shut down, as shown in an unpublicised departmental "minute":
Under the Secretary of State Investor Agreement (SOSIA), in certain, highly unlikely, scenarios eg HMG permanently prevents the construction or operation of the facility or a reactor or where there is a political shut down of Hinkley Point C (HPC) by a UK, EU or international Competent Authority, payments could be up to around £22bn excluding non-decommissioning operational costs that may be incurred after any shutdown.
The £22bn "poison pill" effectively reduces the risk to zero for EDF and its backers, which is great for them. But from an outside perspective, it smacks of desperation.
There could be so many reasons over 35 years that you would want to close the plant, including rising costs, changes to the UK’s energy system or loss of public confidence.
The British nuclear energy program is in somewhat of a mess, as is EDF. Criticism of the Hinkley project comes from the conservative side, as well as from the left. The project director, Chris Bakken resigned recently.
The governments of the UK, France, and China have invested huge amounts of political capital in seeing Hinkley Point C come to the point of construction.
This political capital lies with the public, convincing them that nuclear is part of a low-carbon future; [with the] the financial institutions, convincing them that when the UK makes a decision it sticks to it and hence the UK is an investable proposition; and with international governments — when the UK makes an international agreement it is binding.
UK Green MEP Molly Scott-Cato bemoans the lack of interest from politicians and the media in this worrisome deal:
The issue of most concern in this whole sorry saga is the total absence of genuine political scrutiny. Most UK MPs only seem to have woken up and taken any interest about a week before the deal was signed off last autumn. Cameron and Osborne have been operating as though in a legal vacuum. The British media has paid no attention to the rules of the single market and my continual efforts to interest them in the issue of state aid have failed.
If Britain is now locked into a bad nuclear system, Australia, as yet, is not. We do have Labor and Liberal politicians enthusing about the nuclear waste importation plan. We do have mainstream media almost completely ignoring it, except for the Adelaide Advertiser — which is virtually a mouthpiece for the nuclear industry. We do indeed have a lack of genuine political and media scrutiny.
However, in two important ways, the Australian situation is very different from that of the UK.
Firstly, although the UK Hinkley project is big, the South Australian nuclear waste plan is ginormous. Potentially sourcing high level nuclear wastes (HLNW) from around the world – USA, Canada, Europe, Asia – would be a massive operation, many decades in the setting up, many thousands of years in carrying it out. The money involved would be not dozens of billions of dollars in costs but hundreds of billions.
Secondly, for all the millions in dollars now being spent on the Royal Commission project – the trips abroad, forums, research, public relations and so on – the plan is nowhere near the point of agreement, whereas the UK plan is well advanced.
The South Australian Nuclear Fuel Cycle Royal Commission has just closed its call for responses to its 'Tentative Findings', (announced on 15 February), which recommend a nuclear waste import business. There have been over 1000 responses, no doubt including many from nuclear-related companies. There have been some compelling arguments against the plan, notably one from South Australian radiation expert Paul Langley. Langley sets out information on stability, geology, water, transport, law, economics and alternative industries.
It is vitally important for Australia to pay attention to the Royal Commission plan and to the scrutiny of Paul Langley and others. Unlike Britain, Australia has the opportunity to prevent this plan, while it’s still only a gleam in the eyes of Royal Commissioner Kevin Scarce and the nuclear lobby.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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