CONFIDENTIAL
DSR 11C
GUANGDONG: THIRD PARTY LIABILITY
to be prepared by Dept I Energy
1.
The construction and operation of a nuclear power
station inevitably carries the risk of a nuclear accident
causing damage to persons and property unconnected with the
station itself. Although the probability of such an
accident is small, the resulting damage could be very great.
It is generally accepted that the scale of the potential
damage is such that it is uninsurable and that it is
unrealistic to expect commercial companies to bear the risk
of third party claims.
2.
The question has arisen whether in view of its interest
Guangdong in the project HMG should assume some share of this
1 financial liability. To the extent that it takes an equity
holding in the proposed Hong Kong Investment Company which
is to be the joint owner and operator of the nuclear power
station it will inevitably do so, since this investment will
be at risk.
There are additionally certain liabilities
which attach to the transport of nuclear materials to and
from the UK (described at Annex A). But these arise in any
arrangement for the supply of fuel sessions by the UK, and
are not affected by the particular circumstances of the
project. Et Is there any reason why HMG
Guangdong
should accept any further liability?
3. The normal practice established by international
conventions to which the UK (but not the PRC) is party (see
Annex B) is for strict liability (ie without proof of
negligence or other fault) to be placed on the responsible
operator up to a fixed (insurable) limit, with the relevant
government bearing liability for damage in excess of this,
again up to a fixed limit. In the present case the PRC
CONFIDENTIAL