Top court to rule on nuclear industry law

Linda McQuaig
The Globe and Mail
October 10, 1989

The nuclear industry greets almost any question about a nuclear accident with the quick assurance that the chances of such a mishap are so small as to be infinitesimal.

But companies that manufacture parts for nuclear-power plants will not sell their equipment to plant operators unless they are granted immunity from lawsuits over damages that could result from an accident.

The manufacturers’ insistance on this led Ottawa, in 1970, to pass the Nuclear Liability Act, under which the Industry is completely off the hook for damages in the event of a nuclear accident – even if an operator is negligent.

Almost 20 years later, with the reputation of nuclear energy tarnished by Three Mile Island and Chernobyl, a coalition of energy critics, scientists and the City of Toronto has launched a court challenge under the Charter of Rights and Freedoms to strike down the law.

The Supreme Court of Canada is expected to announce on Thursday whether it will uphold a lower-court ruling that would allow the case to proceed.

The coalition, led by the environmental group Energy Probe, argues, that the act reduces incentives for the industry to design safe equipment, limits the rights of victims, and leads to false conclusions about the real risks and costs of nuclear energy.

“The industry, perhaps more than anyone else, realizes the extraordinary risks we’re dealing with,” said David Poch, a lawyer with Energy Probe in Toronto. “They just aren’t prepared to shoulder the financial risks.”

Mr. Poch said that, like other governments around the world in the early days of nuclear power, Canada was so keen to build reactors that it agreed to the industry’s demand for a blanket exemption.

Ian Wilson, vice-president of the Canadian Nuclear Association, which represents the manufacturers and suppliers of nuclear equipment, said an accident at a reactor could lead to damages that would be “quite horrendous.”

Mr. Wilson added: “It’s impossible to have the suppliers accept that level of responsibility.”

The act places some liability – for a maximum of $75-million – on the Crown corporations, such as Ontario Hydro, that operate nuclear-power plants.

Mr. Wilson said this amounts to a no-fault insurance scheme, under which victims would be automatically compensated.

But Mr. Poch estimates that if there were a nuclear accident at Hydro’s reactor at Pickering, near Toronto, the $75-million would provide about $20 each to residents, who might face damages including lost relatives, cancer, and the permanent loss of the use of their properties.

By comparison, he notes, the Soviet Union has already spent $12.8-billion compensating the families of victims, relocating 25,000 survivors and cleaning up the environmental disaster caused by the 1986 fire and explosion at the nuclear plant in Chernobyl. Yet even the $75-million limit set by the Canadian government for nuclear operators caused the insurance industry to balk when it was called on to provide coverage.

Although the Nuclear Liability Act was passed in 1970, it was not proclaimed until 1976 because of problems in negotiating insurance coverage, and the insurance industry’s unwillingness to insure the full “span of risks”, according to a discussion paper prepared by the Atomic Energy Control Board. Canada’s nuclear-regulatory agency.

Mr. Wilson, from the nuclear industry association, acknowledges that the costs of a nuclear accident are “unthinkable”. But he argues that the Nuclear Liability Act does not limit the compensation of Canadians to $75 million. He notes that it leaves open the door for Parliament to provide, additional funds, although there is no guarantee of such funds.

The impact of this would be to, transfer the burden onto the taxpayer.

Mr. Poch said that this passing of the buck to the federal government helps mask the true cost of nuclear power.

He said that if there was no protection against lawsuits, the industry and the Crown corporations operating the plants would face such massive insurance premiums – if they could get that much insurance – that nuclear energy would suddenly seem like a far less cost-efficient form of energy.

He also notes that the act provides a protection for private companies that is not available to companies in other industries.

Ontario Hydro, the largest nuclear-power operator in Canada, argues that the special protection provided for the nuclear industry has been essential for the development of nuclear energy in Canada.

Hydro, which is strongly committed to the development of nuclear power, has intervened against Energy Probe’s court challenge, and has gone to the Supreme Court in an attempt to block the environmental group from proceeding with the case.

In an affadavit filed with the court, Lorne McConnell, a nuclear engineer and Hydro vice-president, said striking down the act would have “a serious commercial effect upon Ontario Hydro.”

He said that, without some sort of blanket exemption for the industry, most of Hydro’s suppliers and contractors would simply refuse to supply and service the corporation in the future.

For Energy Probe, this only confirms suspicions that the risks of a nuclear accident are greater than the industry lets on.


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