Conclusions
15.
The responsibility for meeting the cost of most of the risks of the Guangdong project would rest with commercial interests. The UK Government's liabilities should be limited (apart from ECGD insurance and fuel provision) to those resulting from a severe nuclear accident. These would be: the probable loss of investment in the operating company; the cost of technically directing the cleaning up operation; and third party liability. There is no compelling logical or legal reason for HG assuming the last. However, the Guangdong project is essentially a joint venture and the PRC is likely to insist on shared liability as part of the price for preferring equipment and other supplies from the UK. If this price has to be paid, we should aim for the PRC to accept
that:
(a) the operating company should have strict liability up to an agreed limit UK contractors should not be
liable;
(b)
the PRC Government should accept all residual liability for damage within the PRC and that in return, no claim would rest against their government in respect of damage in Hong Kong.
The above arrangements would need to be set out in a bilateral agreement between the PRC and the UK.
JNU FCO
AE2 D/EN
September, 1980
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