Confidential information or public scrutiny?

1 January 2002

In court proceedings in Canada, it had been decided that documents originating in China regarding the supply of Candu by AECL should be made public. AECL appealed to the Canadian Supreme Court. By: Stephen Salaff

In early November 2001, AECL appealed to the Supreme Court of Canada for a secrecy order to ensure confidentiality of a document AECL proposed to give a lower court. AECL simultaneously asked the Supreme Court to keep the existence of the proposed confidentiality order secret. AECL was trying to reverse the decision of two lower courts which deemed that documents originating in China which AECL sought to introduce in a legal proceeding instigated by the Sierra Club should be made public.

During the Sierra Club lawsuit, AECL declared its intention to submit to a lower court an environmental assessment document (the Qinshan Candu Environmental Assessment) prepared in China with AECL participation. AECL sought, through production of the Qinshan Candu EA to legally demonstrate in Canada that its Qinshan Candu export project complies with Canada's Environmental Assessment Act.

Canada's Prime Minister Jean Chretien signed a MoU on nuclear commerce with Premier Li Peng of China, which envisioned future bilateral negotiations for the supply by AECL to the China National Nuclear Corporation of two 700MWe class Candu 6 heavy water reactors.

In the MoU, Li endorsed Chretien's offer of favourable financing, which was later agreed as a low-interest C$1.5 billion loan from Canada's Export Development Corporation (EDC)to the State Development Bank (SDB) of China. The loan was at 7.49%. EDC is funding this loan, which was signed in November 1997, although the collection risk resides with the Canadian government. The controversial loan was approved by Chretien's cabinet. EDC also loaned US$350 million to cover the interest charges accruing during the drawdown period of the loan.

EDC communications officer Rod Giles told NEI that the Canada Account supports export transactions which the federal government deems in the national interest, and which EDC is unwilling to support under its own corporate account. Canada Account loans are authorised by the minister of trade with the agreement of the minister of finance.

Construction is underway at Qinshan, 125km south of Shanghai. The first Candu calandria for Qinshan was shipped from Tracey in Quebec to Shanghai in 1997.

AECL's major partners in the Qinshan project are:

• Canatom NPM (Canada).

• Hydro Quebec (Canada).

• Bechtel (USA).

• Hitachi (Japan).

• A consortium of KEPCO and Hanjung (South Korea).

A number of Chinese construction companies are also among the major partners.

The two Candu units will enter commercial operation at Qinshan in 2003.

The Sierra Club of Canada, an environmentalist pressure group, has a different view on Canada's nuclear commerce with China. Sierra deplores China's "abysmal environmental and human rights record, China's lack of commitment to safe radioactive waste management, including the adequate disposal of nuclear fuel waste that will be produced by the Qinshan reactors, and China's sale of nuclear technology to a number of nuclear 'rogue' states, including Pakistan." In January 1997, Sierra launched an "Application for Judicial Review" of federal government Candu export actions in the Federal Court of Canada, arguing that the Canadian government's decision to provide financial assistance to support the Qinshan sale triggered a governmental duty to conduct a public environmental assessment of the Qinshan project under Canada's Environmental Assessment Act. The Sierra Application named the federal ministers of finance, international trade, foreign affairs, and the attorney general of Canada as respondents.

Dave Martin, Sierra's nuclear consultant, claims that all federally funded construction projects on foreign soil should undergo a comprehensive and rigourous public environmental assessment in the recipient country or in Canada. Martin argues that the Environmental Assessment Act necessarily applies to the Qinshan project, because the EDC loans are guaranteed by the Canadian government.

Following the Sierra initiative, AECL obtained documents by Chinese experts cited in AECL affidavits to be a form of environmental assessment of the Qinshan project conducted in China with AECL participation. AECL has claimed that these Chinese language documents are the equivalent of a Canadian environmental assessment. AECL argued that China's nuclear regulation meets international standards and pleaded that the government of China would not accept imposition of a Canadian environmental assessment process on the Qinshan project.

In April 1998, AECL applied to the Federal Court for standing as a Respondent in the Sierra case. The court dismissed AECL's motion, but agreed to a subsequent AECL motion for standing as an Intervenor.

In June 1998, the Federal Court ruled against a motion by AECL to 'strike-out' Sierra's original application for judicial review. The Federal Court offered AECL the opportunity to provide 'an edited version' of the confidential Qinshan Candu environmental assessment, which AECL declined to file with the court.

  Martin said: "Our goal is to preserve the public's constitutional right of access to open court. This is a public interest case involving the potentially illegal use of C$1.5 billion in taxpayers' money to finance the Qinshan project. This case should be open to public scrutiny. AECL's Qinshan Candu sale is illegal under Canadian law, and that is why we are challenging the sale."

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