NUCLEAR LIABILITY ISSUES IN CHINA; CSC ACCESSION LIKELY TO

UNCLAS BEIJING 003625


STATE FOR OES/SAT, EAP/CM, ISN/MDSP AND T, AND FOR ISN/NESS R.
DELABARRE, P. COMELLA
USDOE FOR INTERNATIONAL/FREDRIKSEN, YOSHIDA, BISCONTI, AND BALLOU
USDOE FOR NNSA/BAKER, BLACK, SCHEINMAN, BIENIAWSKI, HUIZENGA, AND
KROL
USDOE FOR NE/SPURGEON AND MCGINNIS
USNRC FOR ROSALES-COOPER
USDOC FOR 4420/ITA/MAC KASOFF
TOKYO FOR DOE ATTACHE CHERRY

SENSITIVE

E.O. 12958: N/A
TAGS: ENRG KNNP TPHY PREL CH
SUBJECT: NUCLEAR LIABILITY ISSUES IN CHINA; CSC ACCESSION LIKELY TO
TAKE SOME TIME

REF: A. 2008 State 94537

B. 2008 State 94977

C. 2008 Beijing 2863

D. 2008 State 54213



1. (SBU) Summary and Introduction. Per ref A, DOE China Deputy
Office Director and ESTHoff on September 12 and 16, 2008, led a
group of nuclear industry experts to discuss nuclear liability
issues and the United States May 2008 ratification of the Convention
on Supplementary Compensation for Nuclear Damages (CSC) with China's
newly established National Energy Administration (NEA) and the China
Atomic Energy Authority (CAEA),respectively. (Note: The CSC was
established in 1997 to provide a single treaty regime for nuclear
liability; to date, four countries have ratified the convention.
End note) NEA official Qin Zhijun, noting that China is paying close
attention to nuclear liability issues in general, had invited
officials from the three major nuclear power companies to join the
September 12 NEA meeting. Qin noted ,however, that China's
accession to the CSC would need to follow implementation of a new
Atomic Energy Law (AEL),on which discussions are not scheduled to
even begin until after the new Energy Law is passed sometime next
year. Dong Baotong, Director General of the Systems Engineering
Department of CAEA, agreed that waiting until the AEL is approved by
the National People's Congress woul delay accession to the CSC for
a long time. DG Dong said that he personally believes China should
accede to the CSC before the AEL is considered, as it would be
easier to draw up implementing legislation for the CSC than to
complete and pass an entirely new AEL, though there are many
obstacles to this approach as well. DG Dong suggested that the
United States and China take additional measures to promote the CSC,
including bilateral meetings with other countries (including Japan
and South Korea),and calling for IAEA member states to join the CSC
at the next IAEA General Conference (GC) and Board of Governors
(BOG) meeting. End summary.

NEA Still Filling Ranks; Just Listening Now
--------------


2. (SBU) Qin Zhijun, formerly Director of the Power Division at the
National Development and Reform Commission (NDRC),noted that China
places high importance on civil nuclear liability issues, as
evidenced by the State Council's issuance of Guo Han 64 in 2007.
(Note: Guo Han 64, an official letter from the state council, was
drafted with input from Westinghouse and the State Nuclear Power
Technology Corporation (SNPTC) prior to the signing of the
Westinghouse AP1000 contract in July 2007. It includes some
stipulations that coincide with the CSC, such as channeling
liability to the operator and putting civil claims under the
jurisdiction of a single court system. Guo Han 64 also stipulates
that the nuclear liability issue will be included in the new Atomic
Energy Law when it is concluded. End note.) Qin had invited
representatives from the three major Chinese nuclear power
corporations - China National Nuclear Corporation (CNNC),Guangdong
Nuclear Power Corporation (GNPC) and SNPTC - to join him for this
discussion of the CSC. Qin indicated that he would rely on their
expertise as China deliberates the CSC and upcoming AEL.


3. (SBU) Because the NEA, which is responsible for managing the
drafting of the Energy Law, is currently being stood up, Qin noted,
there will be some delay before the law can be completed. In fact,
most positions at the NEA remain unfilled, and Qin himself has not
yet received an official title, other than that he is in the Power
Department. (Note: Qin is the only person at the NEA or NDRC who is
knowledgeable at a technical level on nuclear issues. He is a
trained nuclear engineer, and will likely be the key person for


developing future nuclear power programs. End note.) The NEA will
also be responsible for input to the new AEL. Work on the AEL will
not begin until the Energy Law is passed.

CAEA Offers to Work Towards Broader CSC Accession
-------------- --------------


4. (SBU) Dong Baotong, Director General for Systems Engineering at
CAEA said that personally he thought that China should accede to the
CSC first, and then pursue the AEL, since the latter will take much
more time. DG Dong, China's long-time representative on the
International Nuclear Liability Experts Group (INLEX) at the IAEA
and an expert on the CSC, believes that it would be quicker and
easier for China to write implementation legislation following
accession to the treaty than to wait until the AEL is drafted and
passed. However, DG Dong noted that there are two obstacles to that
approach: (1) China's liability limits are insufficient to meet the
CSC's threshold; and (2) the statute of limitations under China's
Law on Civil Procedures does not match those required by the CSC.
Dong noted that the second obstacle is the greatest challenge.


5. (SBU) Moving forward, Dong suggested that the United States
encourage other countries to join the CSC at the upcoming IAEA GC
and BOG. Since the United States is actively encouraging other
countries to follow suit, China will hold bilateral meetings with
other countries, including Japan and South Korea, most likely on the
margins of the upcoming IAEA GC, to discuss the CSC, Dong said. He
also noted that CAEA will review the agenda of CAEA's bilateral
meeting with the United States at the IAEA GC to see if there is
enough time to discuss CSC issues. DG Dong stated that he would
report on the results of this meeting to CAEA Chairman Chen Qiufan.
(Comment: Although DG Dong is personally in favor of quick accession
to the CSC, his ability to actually convince the Chinese bureaucracy
is probably limited. The State Council already set in motion the
path through the AEL in Guo Han 64. Any plan to bypass this, no
matter how creative, is unlikely to gain traction. However, we
should endeavor to maintain close contact with Dong on this, as he
is an eager ally. End comment.)

CAEA Reorganization Update
--------------


6. DG Dong also provided an update on CAEA's structure due to the
ongoing reorganization. Chairman Chen, recently officially
designated as CAEA Chairman, also holds the positions and titles of
Chairman on the State Administration of Science Technology and
Industry for the National Defense (SASTIND) and Vice Minister of the
Ministry of Industry and Information Technology (MIIT). DG Dong
noted that the Department of Systems Engineering consists of four
Divisions: the Division of Nuclear Reactors, Division of Nuclear
Fuel (Note: Possibly Division of Nuclear Fuel Cycle. End note),
Division of Nuclear Emergency and Nuclear Safety, and the Division
of International Cooperation. (Comment: As Director General of
Systems Engineering, Dong is in charge of the day to day activities
of CAEA. According to ref C, CAEA and CNSA (China National Space
Administration) are now officially the first and second systems
engineering departments of SASTIND. End comment.)

RANDT


NNNN