Jeff Sallot
The Globe and Mail
August 11, 1997

Warnings about environmental impact ignored in Candu sale to China, documents show

The federal government ignored its own consultants’ warnings about the need for environmental studies when it signed a contract to sell nuclear reactors to China last November.

Internal federal documents show that Marbek Resource Consultants Ltd. of Ottawa advised the government on Nov. 18 that there was not enough scientific analysis and data available to determine the environmental impact of the construction of two Candu nuclear reactors on Hangzhou Bay south of Shanghai.

The consultants recommended further studies and public environmental hearings in Canada to air the issues because taxpayers are guaranteeing $1.5-billion in loans to China to cement the deal.

Nevertheless, on Nov. 26, eight days after the Marbek report was received by the Department of Foreign Affairs and International Trade, Prime Minister Jean Chretien signed the Candu agreement with China during a visit to Shanghai.

The sale of the reactors by federally owned Atomic Energy of Canada Ltd. is the jewel in the crown of the Chretien government’s China trade policy.

Mr. Chretien has met several times with China’s top leaders to promote Canadian exports in general and the nuclear reactor sales specifically.

The reactor sales will create 27,000 jobs, according to briefing notes prepared by bureaucrats for cabinet ministers.

But Canada’s environmental laws, requiring thorough impact studies for federal projects, were seen by the government as a potential stumbling block.

The Marbek report was released only recently under the Access to Information Act. Public-interest researcher Ken Rubin of Ottawa was told initially that no studies existed, but after a six-month battle he obtained the Marbek report from Foreign Affairs.

The consultants pointed out that electricity produced by the nuclear reactors would reduce the need for dirty coal-fired power generation in China, significantly reducing air pollution.

Even so, throughout the report the consultants point out gaps in the scientific information about the possible impact of the project. Highlights include:

The consultants had to rely on an “incomplete version” of environmental reports from the Shanghai Nuclear Energy Research Institute;

Marbek, which had only five days to complete its report, could not verify the accuracy of the Chinese information and strongly recommended that the documentation be further reviewed by nuclear safety experts;

More information is needed on the probability of earthquakes, tornadoes, typhoons, floods or other disasters in the vicinity of the nuclear reactors;

Additional information is required on the impact of the construction project on the shoreline and the bay;

Not enough information was available to assess the project’s impact on currents, tides and other ocean conditions in the vicinity of the reactors;

Further reviews should be conducted by oceanographic and water-quality experts, as well as experts from the Atomic Energy Control Board, Environment Canada and the Departments of Fisheries and Oceans and Natural Resources.

The consultants said it is “not practicable” for a full environmental consultation with the local Chinese population, but the Canadian public should be given a chance to comment on environmental issues.

(China’s Communist Party authorities maintain a tight grip on information and political activity throughout the country. They have rarely allowed the concerns of local populations to stand in the way of large infrastructure projects.)

The Marbek report said there was no evidence of significant adverse environmental effects from the project, but cautioned that “it is not possible to reach a final conclusion concerning the environmental impact” because of gaps in the information.

The Canadian Environmental Assessment Act would require the government to conduct additional studies to determine whether the project complies with Canada’s environmental standards, the report concluded.

This cautionary report arrived 11 days after cabinet had already dealt with the issue. On Nov. 7, in preparation for Mr. Chretien’s Shanghai trip, cabinet approved an unprecedented order waiving requirements for a full environmental-impact assessment under Canadian law.

Briefing notes prepared by the Foreign Affairs Department for cabinet ministers suggest that the politicians tell the public “we do not expect projects in other countries to conform to Canadian environmental law.”

The Sierra Club of Canada and other environmental groups argue that Canadian assessment standards should apply when the project involves Canadian technology and the financing is being underwritten by Canadian taxpayers.

The Sierra Club is asking the Federal Court of Canada to order the government to conduct an environmental assessment under Canadian law.

The briefing notes say that requiring environmental assessments to Canadian standards for these kinds of projects will put Canadian technology exporters at a disadvantage with foreign competitors for sales.

The French were considered rivals for this particular project.

The briefing notes also say Canada is trying to get an international agreement on an environmental assessment process for these kinds of projects so that everyone is competing on a level playing field.

The Marbek report was completed in secrecy and with great haste. The Nov. 13 contract required the report to be completed five days later. “Time is of the essence,” the contract says. The consultants were also required to treat all information provided to them in confidence.