Who pays the bills? Nuclear liability in South Africa
© Greenpeace / Mujahid Safodien. March Against
Nuclear Expansion in South Africa. 2012.
Lessons from Fukushima
On 11 March 2011, a massive earthquake struck off the coast of
Japan, triggering a tsunami, and the beginning of the most severe
nuclear disaster since Chernobyl in 1986,1 which resulted in triple
reactor core meltdowns and exploded containment buildings
at the Fukushima Daiichi nuclear power plant. As a result of
the earthquake and tsunami, communities were destroyed and
thousands of people lost their lives. However, due to the continuing
nuclear crisis in the region, thousands of nuclear victims will never
be able to return home.
The natural disasters exposed the significant weaknesses
in Japanese nuclear regulation and management that led to
the preventable Fukushima disaster. It was a failure of human
institutions to acknowledge genuine reactor risks, a failure to
address known safety problems, and a failure to institute and
enforce the adequate nuclear safety standards that ultimately led
to a nuclear disaster. It was a failure that exposed the utter inability
of the nuclear industry to protect the public and the environment.
The lessons from Fukushima are relevant and critically important
for the nuclear industry, governments and nuclear regulators
around the world.
The full costs of the Fukushima nuclear disaster, both human and
financial, are not yet tallied and are likely to continue to grow. In
Fukushima Prefecture alone, an estimated 146 520 people were
ordered to evacuate,2 and 4 243.2 Billion YEN3 4 (approximately
R461 billion) was listed by TEPCO5 in September 2014 for
permanent indemnification and provisional compensation.
TEPCO received 652 000 compensation applications from
individuals.6 However, nuclear victims have had to struggle for fair
compensation, due to a very difficult compensation process.7
A massive burden has been placed on the Japanese government
(and ultimately taxpayers) to deal with the consequences of
Fukushima: in Japan’s budget note for 2014, 652.3 Billion YEN
(approximately R68 billion) was listed as the cost of reconstruction
after the nuclear disaster.8 The true cost of the disaster has yet to
be calculated, but the most accurate estimate of the economic
cost of Fukushima at the moment is $169 Billion US Dollars, as of
February 2013.9
It is under these circumstances that the issue of nuclear liability
- the levels of financial security to be provided by holders of
nuclear installation licenses in the event of a nuclear incident becomes very important. Who pays the bills when things go
wrong? Should liability ultimately rest with the nuclear industry or
should government bailout nuclear operators in the case of an
accident? Are liability allocations regularly revised in light of the
costs associated with Fukushima? Unfortunately, these issues are
often ignored by governments, the public and the nuclear industry,
which puts all of us at risk.
Nuclear liability in South Africa
The Fukushima nuclear disaster raised serious questions about the myth of nuclear safety and highlighted the fact that the nuclear
disaster was not a result of the tsunami or the earthquake but was rather due to the growing systemic failures in the nuclear
industry. One of these systemic failures was the liability regime and compensation for damages, which were woefully inadequate.
Many countries limit the liability of reactor operators to only a small fraction of real potential damages, which allows the nuclear
industry to escape paying for the full consequences of a nuclear accident. If levels of liability are inadequate this leads to a
situation where the government has to step in (as has happened in Japan), and most losses and damages are shouldered by
ordinary citizens who have to bear the tax burden.
Plans for new nuclear investments in South Africa mean that it is critical that the country’s liability regime is scrutinised to be sure that
at the minimum, it offers maximum protection to the citizens of South Africa. Specifically, Greenpeace has scrutinised the financial
security requirements of Section 29 of the National Nuclear Regulator Act, 47 of 1999, which have proven to be hugely inadequate.
The earthquake caused the loss of external power at the Fukushima Daiichi nuclear power plant, a site with six reactors. The subsequent tsunami flooded the plant’s back-up diesel generators,
causing complete loss of power and leading to a failure of the cooling systems. Due to the lack of cooling, the nuclear fuel was damaged and melted in reactors #1, #2 and #3. The build-up of hydrogen
gas due to the damaged fuel resulted in hydrogen explosions in these three units and damaged the containment structure in reactor #4.
The nuclear disaster was rated Level 7 on the International Nuclear Event Scale (INES), the highest rating. Japan’s Nuclear and Industrial Safety Agency (NISA) estimated that the amount of radioactive
caesium sent into the atmosphere by the explosions was equivalent to 168 Hiroshima bombs.
2
The National Diet of Japan Fukushima Nuclear Accident Independent Investigation Committee (page 38 of the Executive Summary): http://warp.da.ndl.go.jp/info:ndljp/pid/3856371/naiic.go.jp/en/
3
4093.0 Billion YEN for permanent indemnification and 150.2 Billion YEN for provisional compensation.
4
All figures are based on: TEPCO. 2014. Records of Applications and Payouts for Indemnification of Nuclear Damage. 5 September 2014 http://www.tepco.co.jp/en/comp/images/jisseki-e.pdf.
5
TEPCO is the Tokyo Electric Power Company, the electricity utility responsible for the operation of the Fukushima plant.
6
All figures here are based on: TEPCO. 2014. Records of Applications and Payouts for Indemnification of Nuclear Damage. 5 September 2014 http://www.tepco.co.jp/en/comp/images/jisseki-e.pdf.
7
Greenpeace International. 2013. Fukushima Fallout: Nuclear business makes people pay and suffer. Available: http://www.greenpeace.org/international/Global/international/publications/nuclear/2013/
FukushimaFallout.pdf.
8
Highlights of the Budget for FY2014. Outline of Special Account for Reconstruction from the Great East Japan Earthquake (FY2014). p.10 http://www.mof.go.jp/english/budget/budget/fy2014/01.pdf
9
Greenpeace International.2013. Fukushima Fallout: Nuclear business makes people pay and suffer. Available: http://www.greenpeace.org/international/Global/international/publications/nuclear/2013/
FukushimaFallout.pdf.
1
The court case
Section 29(1) of the National Nuclear Regulator Act requires the Minister of Energy, on recommendation of the Board of the
National Nuclear Regulator (NNR) and in consultation with the Minister of Finance, to determine the level of financial security to
be provided by holders of nuclear installation licences, and the manner in which such security is to be provided. The last time that
the level of financial security was revised was on 7 May 2004, when a notice was published in the Government Gazette (Notice
number 581 of Gazette 26327). According to the regulations, the levels of financial security should be revised every five years, and
are now more than 10 years out of date, despite the fact that the NNR has apparently made recommendations for the revision of
the levels of financial security to the Minister in the interim.
These determinations are made in order to ensure that the holders of nuclear installation licences are in a position to fulfill any
liability which may be incurred in terms of section 30 of the Act, which provides that holders of nuclear licences are strictly liable
for damage caused by their respective nuclear facilities.10 This means that at present the level of financial security available in the
event of a nuclear disaster at the various nuclear facilities in South Africa is woefully inadequate, and as a result, the South African
public is exposed to significant financial risk.
Despite repeated lawyers’ letters addressed to the Minister of Energy since October 2013, Greenpeace has not been provided with
the recommendations for the revision of the levels of financial security made by the NNR, nor has the Minister published revised
levels of financial security as she is obliged to do in terms of the Act. Greenpeace believes that at a minimum, compliance with the
Act is critically important and that current levels of liability are hopelessly inadequate.11 The 2011 Fukushima disaster continues to
place a major burden on the Japanese government (and ultimately taxpayers), which clearly illustrates the importance of regularly
updating the levels of financial security as required by the Act.
As a result, Greenpeace has been left with no choice but to approach the High Court in order to declare that the Minister of
Energy has failed to comply with section 29(2) of the Act and to compel her to do so, taking into account the costs that have been
associated with the Fukushima nuclear disaster in Japan. The respondents in this case are: the Minister of Energy, the National
Nuclear Regulator and the Minister of Finance.
Rethinking nuclear
However, despite the risks associated with nuclear power, and various government documents questioning the need for new nuclear
investments (and their associated costs),13 the South African government is pushing ahead with plans to build at least six new nuclear
reactors. In fact, nuclear co-operation agreements have been signed with various countries in the last quarter of 2014, including France,
Russia and China, signalling clear moves towards new nuclear energy investments in South Africa.
Nuclear is not the answer
Greenpeace believes that if South Africa is concerned about
energy security, then the last option should be nuclear. A nuclear
plant takes more than a decade to build, is dependent on a nonrenewable resource, creates dangerous radioactive waste and
will cause skyrocketing electricity prices. In contrast, renewable
energy capacity can be built much faster, and without the safety,
environmental and financial risks associated with nuclear power.
Importantly, Section 30 of the Act limits the liability of the licence holder to the amounts determined by the Minister of Energy.
Regulation 3 provides in relation to the level of financial security to be provided, that:
3. The level of financial security to be provided by holders of nuclear installation licences in respect of each of the categories as determined in section 2 hereof, for the financial year 2004/5, shall be –
(a) Category 1: R2.4 billion to be provided in such currency, which is acceptable to the Board of the National Nuclear Regulator. Where the financial security has been provided in a foreign currency and
the exchange rate has resulted in the required level of financial security being devalued more than 15%, the holder of the nuclear installation licence must report it to the regulator within 10 days.
(b) Category 2: R120 million.
(c) Category 3: R1 million.
12
Greenpeace International. 2014. Rosatom Risks: Exposing the troubled history of Russia’s state nuclear corporation. Available: http://www.greenpeace.org/hungary/PageFiles/636986/rosatom_risks.pdf.
13
These documents include the National Development Plan, and the IRP2010 Update, which has yet to be approved by cabinet.
10
11
For more information please contact:
Mbong Akiy, Communications Manager for Greenpeace Africa: [email protected]
Kaitoma Creatives. Printed on 100% recycled post-consumer paper with vegetable based inks.
© Greenpeace / Shayne Robinson. Greenpeace activists at the ‘No nuclear’
protest in front of the Department of Energy in Pretoria. 2011.
As a result of Fukushima, governments around the world are rethinking their investments in nuclear power and three of the world’s four
largest economies - China, Germany and Japan - are now generating more power from renewable energy than from nuclear energy.12
The German government has decided to phase out nuclear energy and 95% of Italians voted against the use of nuclear energy in a
national referendum because nuclear power has consistently delivered too little, too late and at too high a price.