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New voluntary code for reactor exports

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COMMENTS

27 September 2011 14:58

Just over a week ago, the giants of the nuclear power industry announced a new voluntary code of conduct that will guide their future nuclear reactor exports.

The 'Nuclear Power Plant Exporters' Principles of Conduct' took three years to negotiate, facilitated by the Carnegie Endowment for International Peace, a panel of experts and the now–adherents to the code — Areva, Russia's Atomstroyexport, Canada's Candu Energy, GE Hitachi, Korea Electric Power Co, Mitsubishi, Toshiba and Westinghouse. The Principles have not made a serious media splash, but are significant for their specificity, comprehensiveness and proactive approach to the risks posed by the industry.

Lowy Institute Deputy Director Martine Letts and I have previously advocated for the nuclear industry to be more proactive in supporting the non-proliferation regime (see our report to the Evans-Kawaguchi disarmament commission, an update of which is due to be published later this year). It remains to be seen whether this initiative will spur further industry efforts in support of the non–proliferation regime, though the signs are promising.

The fact that the Code covers more than just non–proliferation but also safety, security, environmental protection, waste and other ethical considerations, provides a framework for more integrated thinking about the corporate social responsibilities (CSR) of the nuclear industry.

It makes sense to consider all of these factors together given events such as the Fukushima accident, President Obama's Nuclear Security Summit last year, persistent concerns about the proliferation of sensitive nuclear technology and the inability of the non–proliferation regime to address non–compliance, as the Iranian, DPRK and Syrian cases illustrate.

The Code rides on the coat–tails of a more general groundswell of support for corporate social responsibility this year, with the UN Human Rights Council, OECD and the International Finance Corporation releasing or updating guidelines. Sceptics will of course question how effective the Principles will actually be in changing the practices of the nuclear industry. Like other CSR initiatives, this will depend on how effectively governments and civil society use the Principles to monitor corporate behaviour.

It also depends on who signs on. In terms of membership, the Code ticks all the boxes for effectiveness. The companies who drafted and adopted the Principles dominate the market for reactor sales. Where they go, there is a good chance that the rest of the nuclear industry will follow, especially as a key driver for developing the Principles was a recognition that accidents and mistakes by one company are costly for the entire industry. These companies account for almost all reactor exports globally, and China's reactor export arm was also involved in the negotiations, and is seeking domestic approval to adopt the Code.

Given South Korea's recent emergence as a major reactor exporter and the export ambitions of Chinese and Indian firms, involvement of these new Asian vendors is crucial for the future of the Code. CSR principles must be fairly specific if they are to be of any use to outsiders for monitoring corporate behaviour. What sets the new Code apart from the other global CSR standard for the nuclear industry — the World Nuclear Association's Charter of Ethics (discussed here) — is its specificity. It describes not only the commitments of the industry, but the steps companies will take to implement them.

Although the new non–proliferation steps do not go far beyond what companies are obliged to do by domestic laws applicable to them, among those steps are a commitment to inform both their home country governments and other members of the Code, consult with those governments and abide by their instructions if non–proliferation concerns arise. Such commitments have not before appeared in writing, even if they occur in an ad hoc manner. Affirming closer collaboration within the industry and with governments on proliferation threats is a plus for the regime.

The Principles will no doubt be subject to the usual criticisms of CSR initiatives, that implementation differs between members and there is no enforcement mechanism, to name just two. But the reactor vendors do deserve some credit for proactively managing risks and trying to do the best by the local, national and global communities in which they do business. 

It is now up to governments and civil society, as well as the industry, to use the Principles as a starting point for a conversation about better nuclear corporate citizenship.

The Nuclear Reactions column is supported by the Nuclear Security Project of the Nuclear Threat Initiative, as part of a wider partnership between the NSP and the Lowy Institute.

Photo, of an advanced test reactor core, courtesy of the Argonne National Laboratory.

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