TNAG-0950-FCO40-1169-Effect-of-nuclear-exports-to-China-on-Hong-Kong-Guangdong-nu-1980 — Page 160

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25.

A decision on the liabilities that might have to be assumed need not be taken now. It must be essentially one of tactics during the negotiations. However if it appeared that

refusal to accept some third party liability was likely to prejudice the project it would be useful to have had some

provisional views from Ministers.

26 One possible approach might be to propose that while responsibility be placed on the operating company to meet claims for nuclear damage wherever it occurs, subject to an insurable limit, the PRC should be relieved of any residual liability above that limit in respect of damage in Hong Kong. In return the PRC should accept that no claims could be made against the Hong Kong or UK Governments in respect of damage in the PRC. It would of course be necessary to provide (either in Hong Kong or UK legislation) that claims for compensation for damages in Hong Kong, which could not be met by the operating company, would be met (subject to an overall limit) by the Hong Kong and/or UK Government. This approach has a number of advantages:

(a)

Since the nuclear power station is planned to be 30 miles from Hong Kong (with a range of hills between), the chances of damage there are con- siderably less than in the PRC. The contingent liability would thus be less if shared on a territorial basis than if shared in proportion to the respective PRC and Western holdings in the operating company;

(b) The people of Hong Kong would have a reliable

guarantee of compensation in the event of nuclear accident which would not be dependent on PRC acceptance, e.g. of valuations of property and expectation of life, which might differ considerably between Hong Kong and the PRC. HMG's confidence

in the project implied in this assumption of

liability could also help overcome public resistance in Hong Kong to the Guangdong project;

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