Legal and Regulatory Frameworks for Decommissioning and Waste Management Jonathan leech February 2016 +44 7825 171093 jonathan.leech@dentons.com
Legal and Regulatory Frameworks for Decommissioning and Waste Management Structures for decommissioning / waste management Responsibility / funding / strategy UK and other national examples International capability Liability and compliance risks International availability of waste treatment facilities 18/02/2016 2
UK legacy nuclear liabilities 2015 2135 120 years or so 18/02/2016 3
UK strategy Sites Funder Estimate Legacy sites (NDA estate) Advanced Gas Cooled Reactors / Sizewell B New build State (via NDA) Nuclear Liabilities Fund (with state guarantee) Operators (via segregated fund) 115 billion 19.1 billion? 18/02/2016 4
Nuclear Decommissioning Authority Parent Body Organisations Dept. of Energy & Climate Change (DECC) Pacific Nuclear Transport (PNTL) International Nuclear Services (INS) Direct Rail Services (DRS) Operations NDA NDA Properties Rutherford Indemnity Admin NDA Archives Radioactive Waste Management (RWM) GDF Principal function Securing operation, decommissioning and clean-up of designated sites / operation of designated waste facilities Supplementary functions Research Distributing information Education and training Supporting socio-economic activities and environmental benefits Providing advice Policy implementation / advice Sellafield Ltd LLW Repository Ltd Magnox Ltd Dounreay Site Restoration Ltd Capenhurst Nuclear Services Ltd Springfields Fuels Ltd Supply chain 5
NDA site licence companies / designated sites Dounreay Site Restoration Ltd Magnox Ltd Sellafield Ltd LLW Repository Ltd Springfields Fuels Ltd Capenhurst Nuclear Services Ltd 18/02/2016 6
NDA - control not regulation DECC Office for Nuclear Regulation Environment Agency NDA Setting / approving plans Financial sanctioning Directions Duty to have regard to health, safety, environment and security Cannot authorise contravention Allowable costs Site Licence Company Must use site only for purposes that secure compliance with regulatory / licence obligations Supply Chain Parent Body Organisations Seconded leadership team Additional support Working capital facility Financial guarantees Incentivised by dividends Disallowable costs 18/02/2016 7
NDA annual funding spending (2015/16) 3.31 bn budget 2.09 bn DECC funding 1.22 bn commercial revenue No segregated fund 18/02/2016 8
PBO model Market Enhanced SLC Asset sale NDA PBO NDA NDA Purchaser Management & Operations Contract Parent Body Agreement Service Agreement Investment Agreement Overarching Agreement Site Licence Company Site Licence Company Strategic Partner Site Licence Company 18/02/2016 9
PBO model Market Enhanced SLC Asset sale NDA PBO Management & Operations Contract Parent Body Agreement Site Licence Company 18/02/2016 10
PBO model Market Enhanced SLC Asset sale NDA Financial guarantees PBO Plan approval Allowable Cost Fee SLC shares Nuclear indemnity Operation Decommissioning Clean up Site Licence Company Dividends Seconded leadership team Additional support Working capital Disallowable Cost 18/02/2016 11
PBO model Market Enhanced SLC Asset sale NDA Service Agreement Sellafield Ltd Strategic Partner(s) Strategy business partner People & transformation partner Programme & project delivery partner 18/02/2016 12
PBO model Market Enhanced SLC Asset sale NDA Purchaser Investment Agreement Overarching Agreement Springfields / Capenhurst 18/02/2016 13
Nuclear Liabilities Fund The Nuclear Trust (Scottish public trust) State guarantee Investment strategy NDA Review of strategy and estimates Approval of payments Nuclear Liabilities Fund Ltd (segregated fund) National Loans Fund EDFE (AGRs + Sizewell B) 18/02/2016 14
Comparison with other approaches Substitution for existing segregated funds? Application to private sector liabilities? Strategic and financial control NDA (UK) AECL (Canada) Contrast operational roles (e.g. EWN / ENRESA / Sogin) Benefits? Control / security of funds Strategic oversight Alignment of performance risks and benefits Collaboration 18/02/2016 15
International availability of capability and facilities Mobility of capability Managing nuclear liability risks Cross border waste treatment options 18/02/2016 16
Geographic extent of nuclear liabilities conventions Paris Convention Paris Convention plus Brussels Supplementary Convention Paris / Brussels 2004 Protocols Vienna Convention Vienna Convention plus 1997 Protocol Joint Protocol Convention on Supplementary Compensation (CSC) Not party to any convention or is party but not ratified 2/18/2016
Geographic extent of nuclear liabilities conventions Paris Convention Paris Convention plus Brussels Supplementary Convention Paris / Brussels 2004 Protocols Vienna Convention Vienna Convention plus 1997 Protocol Joint Protocol Convention on Supplementary Compensation (CSC) Not party to any convention or is party but not ratified 2/18/2016
Paris / Brussels liabilities for materials in transit Incident Damage Pre 2004 Protocols Contracting party Joint protocol Contracting party Joint protocol Territory of Contracting party International water Damage Ship registered in Incident Post 2004 Protocols Contracting party Joint protocol No nuclear installations Reciprocal benefits / identical principles 18/02/2016 19
Paris / Brussels liabilities for out-bound materials Operator liable if incident occurs before: another operator assumes liability by contract another operator has taken charge nuclear substances unloaded from means of transport by which have arrived in territory of a non-contracting State Nuclear substances enter territory of non-contracting state (subject to extension under national law) Pre 2004 Protocols Territory of Contracting party International water Territory of Non- Contracting party (non-jp with nuclear installations) Incident Damage 18/02/2016 20
Paris / Brussels liabilities for out-bound materials Post 2004 Protocols Operator liable if incident occurs before: another operator assumes liability by contract Liability transfer requires another operator has taken charge { "direct economic interest" nuclear substances unloaded from means of transport by which have arrived in territory of a non-contracting State Nuclear substances enter territory of non-contracting state (subject to extension under national law) Territory of Contracting party International water Territory of Non- Contracting party (non-jp with nuclear installations) Damage Incident Ship registered in 18/02/2016 21
Paris / Brussels liabilities for in-bound materials Pre 2004 Protocols Incident Damage Territory of Contracting party International water Territory of Non- Contracting party (non-jp with nuclear installations) Operator liable if incident occurs after: liability assumed by contract from another operator has taken charge nuclear substances loaded on the means of transport by which they are to be carried form territory of non-contracting State, where sent with operator's written consent nuclear substances leave territory of non-contracting state (subject to extension under national law) 18/02/2016 22
Paris / Brussels liabilities for in-bound materials Post 2004 Protocols Incident Damage Ship registered in Territory of Contracting party International water Territory of Non- Contracting party (non-jp with nuclear installations) Liability transfer requires "direct economic interest" } Operator liable if incident occurs after: liability assumed by contract from another operator has taken charge nuclear substances loaded on the means of transport by which they are to be carried form territory of non-contracting State, where sent with operator's written consent nuclear substances leave territory of non-contracting state (subject to extension under national law) 18/02/2016 23
Cross border waste management options Assessment of practicable options Best Available Technique (BAT) / optimal treatment and disposal routes Limited relevance of proximity - radiological risk? Compliance with EU procurement (where relevant) Compliance and liability risks Import / export licencing Environmental risks in destination state Return shipping costs Public / political pressures 18/02/2016 24
Legal and Regulatory Frameworks for Decommissioning and Waste Management Jonathan leech February 2016 +44 7825 171093 jonathan.leech@dentons.com