Strengthening Global Nuclear Governance

JUSTIN ALGER

TREVOR FINDLAY

Strengthening Global Nuclear Governance

Interest in nuclear energy by developing countries without nuclear experience could pose major challenges to the global rules now in place to ensure the safe, secure, and peaceful use of nuclear power.

Motivated in large part by climate change and the need for carbon-free energy sources, governments and companies around the world are pushing to revive nuclear energy. Developed and developing countries alike have expressed interest. For developing countries, however, building a nuclear power plant can be particularly problematic, both for the countries and the world overall. The lack of regulatory and operating experience of developing countries considering nuclear power could pose major challenges to the global rules now in place to ensure the safe, secure, and peaceful use of nuclear energy.

The challenges facing the global governance regime can be seen in the case of a promising candidate for nuclear energy, the United Arab Emirates (UAE), and a far more worrisome one, Nigeria. Although it has the world’s sixth largest proven oil reserves and fifth largest proven natural gas reserves, the UAE has been making a strong case for nuclear power based on its rapid economic growth and a desire to retain its oil and gas for export rather than domestic use. The federation has moved aggressively to court foreign reactor vendors, sign nuclear cooperation agreements with other countries, and hire foreigners, lured by extraordinary salaries, to run its regulatory authority. It recently ordered its first nuclear power plants from a South Korean consortium. The UAE has sought to be a nonproliferation model by signing an Additional Protocol to its International Atomic Energy Agency (IAEA) safeguards agreement, as well as renouncing any ambition to enrich uranium or reprocess plutonium, and concluding a so-called 123 Agreement with the United States that could provide additional legal assurances.

At the other end of the spectrum, Nigeria, which has repeatedly declared its desire to acquire nuclear power, is the epitome of a bad candidate. Although oil-rich like the UAE, it has a long history of mismanaging large projects, including its oil industry. Its national electricity grid has one of the worst transmission and distribution loss rates in the world, with only a fraction of its generating units operating at a given time. Violence often breaks out in the Niger Delta because of various economic, social, ethnic, and religious tensions, seriously disrupting the country’s predominantly foreign-owned oil industry. Of the developing countries pursuing nuclear power, Nigeria’s scores, calculated by the World Bank, for political violence, government effectiveness, regulatory quality, and control of corruption rank second worst. The country is not a party to key nuclear governance accords. Fortunately, to date its nuclear energy plans have gone nowhere.

Global governance needs to be prepared to address the challenges of the array of developing countries seeking nuclear energy, not just those most likely to succeed. The institutions for doing so are, for the most part, already in place, so the central question is whether they are able to adapt to the needs of developing countries. They are struggling thus far and have much work to do.

Nuclear hopes and realities

The Survey of Emerging Nuclear Energy States (SENES) compiled by the Nuclear Energy Futures Project—a joint undertaking of the Centre for International Governance Innovation (CIGI) in Waterloo, Canada, and the Canadian Centre for Treaty Compliance (CCTC) at Carleton University—tracks the progress of all aspiring nuclear energy countries from an initial governmental declaration of interest to the eventual connection of a reactor to the electricity grid. The project has identified the following as having an official interest in nuclear power: Central Asia (Kazakhstan and Mongolia); Africa (Algeria, Ghana, Kenya, Morocco, Namibia, Nigeria, Senegal, and Tunisia); Europe (Albania and Belarus); the Middle East (Bahrain, Egypt, Iran, Jordan, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Syria, and the UAE); South America (Venezuela); South Asia (Bangladesh); and Southeast Asia (Indonesia, Malaysia, Philippines, Thailand, and Vietnam).

To track states’ progress, SENES uses the IAEA’s Milestones in the Development of a National Infrastructure for Nuclear Power, which identifies three broad milestones that must be accomplished before a state is considered ready for nuclear power: (1) ready to make a knowledgeable commitment to a nuclear program, (2) ready to invite bids for the first nuclear power plant, and (3) ready to commission and operate the first nuclear power plant. The vast majority of the developing states identified in SENES could not now legitimately claim to have reached or gone beyond the first milestone. Only Iran is close to starting up a reactor. No others have even begun construction. The Philippines has a partially completed reactor in Bataan, on which it may resume work. Apart from the UAE, only Egypt, which has aspired to nuclear power for more than 30 years, is known to have invited bids for a plant, which puts it at milestone 2. Jordan and Vietnam are considering several potential vendors.

All states pursuing nuclear power, whether developed or developing, will face problems of cost, industrial bottlenecks, personnel constraints, and nuclear waste, but developing states face unique challenges. Because they are poorer, they often lack the finances, institutional capacity, and physical infrastructure to support a large-scale, multibillion-dollar nuclear power plant project.

For relatively poor countries, paying for a nuclear power plant is a massive hurdle, even if the costs are spread out over several years. There is no precise way to measure whether a country can afford a nuclear power plant, especially since decisions may be driven by politics, national pride, energy security, industrialization strategy, or in the unlikely worst case, nuclear weapons hedging, rather than sound financial analysis or a rational national energy strategy. Although stretching a national budget to buy a nuclear power plant may in theory be possible, this always implies opportunity costs, especially in the vital energy sector. Development banks do not lend for nuclear energy projects, and private investors are likely to be wary. The only developing countries that may be able to ignore such constraints are those with oil-based wealth, such as Nigeria, Saudi Arabia, Venezuela, and the small Gulf States. But the recent drop in the price of oil and international financial turmoil will probably make even these states wary of committing to expensive projects such as a nuclear power reactor.

A second major barrier to aspiring nuclear states in the developing world is having the physical infrastructure to support a nuclear power plant or plants. This includes an adequate electrical grid (at least 10 times the size of a 1,000-megawatt reactor), roads, a transportation system, and a safe and secure site. The IAEA’s milestones document includes a comprehensive list of hundreds of infrastructure targets, including physical infrastructure, for aspiring nuclear states to meet before they should commission a nuclear plant. This includes supporting power generators, a large water supply, and waste management facilities. Meeting all of the targets will be a major challenge for most developing states, requiring them to invest billions of dollars in infrastructure upgrades for several years.

The combination of new, relatively untested, and more complex types of nuclear reactors and developing countries that lack operational and regulatory experience is worrisome for the global nuclear safety regime.

Finally, there is the challenge of governance. A country’s ability to run a nuclear power program safely and securely depends on its capacity to successfully and sustainably plan, build (or at least oversee construction of), and manage a large and complex facility and its associated activities. For a nuclear reactor, such a commitment stretches over decades, at least 60 years from initial planning to decommissioning. For high-level, long-lasting nuclear waste, some of which can remain radioactive for millennia, the commitment is essentially forever. Although the existing nuclear energy states have learned through experience and trial and error, this is not possible or permissible in the current era. Norms, expectations, and standards have evolved. The IAEA estimates that it can take at least 10 years for a state with no nuclear experience to prepare itself for hosting its first nuclear power plant. Many aspiring nuclear energy states have struggled with managing large investment or infrastructure projects for a wide range of reasons, including political violence, mismanagement, and corruption. It is telling that all of the aspiring developing states except Oman, Qatar, and the UAE score 5 or below on the 10-point scale of Transparency International’s Corruption Perception Index.

It seems clear at this early stage of the so-called nuclear revival that for the vast majority of developing states, nuclear energy will remain as elusive as ever. They will simply be priced out of the nuclear energy market, because of the high capital costs of nuclear power plants and the required investment in infrastructure and institutional capacity. Most will need to make unprecedented progress in their economic development, infrastructure, and governance before nuclear power is a feasible option. Because of the low probability of an influx of developing countries into the nuclear business, the risk to the current global governance system is less than what it otherwise would have been. Despite this, global governance needs to be prepared for the handful of developing states that might succeed in acquiring a nuclear energy sector; those that may make the attempt, however ill-advised; and those that seriously consider the option and need assistance in doing so.

Nuclear safety

It is impossible to quantify the impact of a nuclear revival in the developing world on global nuclear safety because it is unclear how large that revival is likely to be. However, it is possible to identify some qualitative implications for safety. Some of these arise from the type of country that is acquiring a nuclear reactor for the first time. Others arise from the new reactor designs that are being purveyed by companies to the newcomers and the terms and conditions under which they are sold. The combination of relatively untested and more complex types of nuclear reactors with developing countries that lack operational and regulatory experience is worrisome for the global nuclear safety regime.

From a global governance perspective, the most obvious source of specific concern is the patchy adherence by developing states to the key safety-related international agreements. Astonishingly, considering their announced enthusiasm for nuclear energy, 4 of the 30 developing countries supposedly interested in nuclear energy—Bahrain, Kenya, Namibia, and Venezuela—are not party to any of the relevant nuclear safety conventions.

The most important of them, the 1994 Convention on Nuclear Safety (CNS) and the 1997 Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste, commit parties to the highest standards of nuclear safety for civilian nuclear power plants, spent fuel, and nuclear waste. This implies compliance with an array of IAEA safety standards and guidelines. The treaties also draw parties into their increasingly effective peer review systems. Thirteen of the 30 developing aspirant states have neither signed nor ratified the CNS, and only 6 are party to the Joint Convention. These states are thus neither integrated nor socialized into the global nuclear safety regime. They are ineligible to attend and participate in the treaty review conferences that conduct peer reviews. Even some nuclear aspirants that are party to the agreements, including Bangladesh, Kuwait, and Nigeria, fail to participate in the regime by attending the review meetings, despite a legal obligation to do so.

If such prominent developing states cannot even commit resources to attending meetings, they’re likely to experience difficulty in fulfilling the more significant legally binding obligations of the conventions. These include establishing the necessary legislative, regulatory, and administrative steps to implement their obligations, setting up a national regulatory body, conducting a comprehensive and systematic safety assessment before a nuclear power plant or waste repository is allowed to operate (and repeating this throughout the lifetime of the facilities), and ensuring that relevant levels of maintenance, inspection, and testing are conducted by facility operators.

Currently, all of the developing countries seeking nuclear energy lack the requisite national laws and regulations, agencies and practices, trained and experienced personnel, and appropriate safety culture to safely host a nuclear plant. None has the capacity to manage nuclear waste, except that currently resulting from medical or research applications. Some with relatively advanced nuclear energy plans, such as Indonesia, the UAE, and Vietnam, are beginning to put in place the necessary prerequisites. Others, such as Algeria and Egypt, have been operating research reactors and using radioactive sources for peaceful purposes for some time, so they have some institutional elements in place and some experience to draw on. Few developing states will be able to afford the UAE approach of buying everything required from abroad. Even an advanced nuclear state such as the United Kingdom is having difficulty finding enough qualified regulatory staff to prepare for its national nuclear revival.

No country is able to buy two critical components: a ready-made safety culture and a robust independent regulator. Since the accidents at Three Mile Island in 1979 and Chernobyl in 1986, both caused and exacerbated by human error, there has been a realization that the human factor is the most difficult element to control for in nuclear safety. Hence there is an increasing emphasis on developing and sustaining a nuclear safety culture, where safety is paramount rather than incidental. With regard to an independent nuclear regulator, the sacking of the Canadian nuclear regulator by the Canadian government in 2008, justified partly on political grounds, indicates that even mature nuclear energy states have difficulty establishing a truly independent regulator. Among the aspirant developing states, Algeria, Bangladesh, Libya, Nigeria, Senegal, Syria, Venezuela, and Vietnam all rate especially poorly on the World Bank’s regulatory control index.

Nuclear security

The global governance regime for nuclear security is much less mature than that for nuclear safety. States are more secretive, often understandably, about nuclear security than about nuclear safety. International cooperation and transparency are therefore constrained. Heightened fears of nuclear terrorism have led to improvements in the global regime since 9/11. Yet as the April 2010 Nuclear Summit convened by President Obama indicated, concerns remain about unsecured nuclear material and facilities worldwide, including those connected with current and future peaceful applications of nuclear energy.

The acquisition of nuclear reactors by states with a poor security record and nonexistent security culture would be a significant challenge to the nascent global nuclear security regime. Nuclear power reactors and associated facilities, even in the construction phase, may be high-value targets for secessionist movements, nonstate actors, or potentially even other states. Inexperienced countries may be more vulnerable to unauthorized access to facilities or seizure of nuclear materials. Many developing states, despite having relatively large armed forces and in some cases capable and often oppressive security apparatuses, may not have the type of sophisticated rapid response capability necessary for protecting nuclear infrastructure. They are likely to be left out of the intelligence-sharing arrangements of the Western states and not trusted with actionable information. A newcomer will take years—the IAEA estimates at least five—to establish legislative and regulatory frameworks and security infrastructure, systems, and practices. As in the case of nuclear safety, it may take such states much longer to establish an acceptable security culture.

The international conventions in this field are far from universal in adherence and application and nowhere near as effective as in the nuclear safety field. The principal treaty, the 1980 Convention on the Physical Protection of Nuclear Material (CPPNM), currently applies only to international shipments of nuclear material. The 2005 Amendment to the Convention, which would extend the regime to the domestic realm of each party, is not yet in force. The 2007 International Convention for the Suppression of Acts of Nuclear Terrorism essentially focuses on criminalizing nuclear terrorism. Although legally binding in respect to their broad provisions, both agreements leave detailed implementation up to each party. International verification of compliance and penalties for noncompliance are unknown, as are requirements for peer review.

Even so, a number of aspiring developing states are not party to the conventions. Bahrain, Iran, Venezuela, and Vietnam are party to none, and other key contenders for nuclear energy such as Egypt, Malaysia, Syria, and Thailand have not signed either the CPPNM or its Amendment. Beyond simply becoming parties, the extent of compliance with these agreements is largely unknown publicly because of the lack of transparency and treaty-mandated peer review.

An additional binding instrument is United Nations Security Council resolution 1540 of April 2004, with subsequent reiterations. This obliges all states to put in place implementation measures to prevent nonstate actors such as terrorists from acquiring any type of so-called weapons of mass destruction, including nuclear or radiological weapons, and to periodically report progress to a Security Council committee. Among the measures expected to be put in place are those to protect the civilian nuclear industry. But compliance by developing countries is mostly episodic and incomplete. None of this engenders confidence in the ability of aspiring nuclear energy states to manage the security of nuclear facilities that they may acquire.

Nuclear nonproliferation

From the outset of the nuclear age, it was feared that states would seek to acquire civilian nuclear energy as a cover for a nuclear weapons program. The result is the evolution of an international nonproliferation regime based on the 1968 Nuclear Non-Proliferation Treaty (NPT) and its safeguards system. This has indeed helped prevent the spread of nuclear weapons to scores of states but has not entirely prevented proliferation. Safeguards have been considerably strengthened since the case of Iraq, but more needs to be done. Moreover, the regime still suffers from its original central contradiction: Some states have accorded themselves the right to retain nuclear weapons apparently in perpetuity, whereas all others are under the legally binding obligation never to acquire them.

The current renewed enthusiasm for nuclear electricity generation is raising fears of nuclear hedging, in which states seek to establish the peaceful nuclear fuel cycle so they can move quickly to nuclear weapons acquisition when required, either clandestinely or by leaving the NPT. The international regime is currently being challenged in this manner by Iran, which is engaging in the type of ambiguous hedging behavior that some say an unbridled nuclear energy revival could unleash.

Yet it is easy to exaggerate the threat. The handful of developing countries that can overcome the hurdles to acquiring nuclear power will, in all probability, acquire only one or two reactors in the next two decades. Although some already have varying degrees of nuclear expertise and research capacity, all will be reactor importers and thus reliant on outside assistance. None, with the sole exception of Iran, will probably acquire an advanced nuclear program with a complete nuclear fuel cycle. Most of the states that acquire nuclear power will not be able to fabricate their own fuel, much less succeed in enriching uranium, which is a technologically challenging and expensive process. None is likely to be legitimately interested in reprocessing plutonium, either for dealing with nuclear waste or for fast reactors.

Because all of the aspiring developing states, along with all other nonnuclear weapon states, are party to the NPT and have comprehensive safeguards agreements, they will be required to apply nuclear safeguards to all of their power reactors and associated facilities. In addition, there will probably be strong pressure on such states to conclude an Additional Protocol to their comprehensive safeguards agreement, making illicit diversion or a hidden clandestine nuclear weapons program more difficult than in the past. Most have, in fact, either signed one or already have one in force. However, key aspiring states—Egypt, Oman, Qatar, Saudi Arabia, Syria, and Venezuela—have not yet signed one, which is of some concern.

The most worrying development would be if the new entrants seek the full nuclear fuel cycle, including uranium enrichment and plutonium reprocessing, which can be used to make reactor fuel or nuclear weapons. Jordan is reportedly resisting the UAE model of foregoing such options, because it may wish to enrich its own domestic uranium resources at some stage rather than relying on others for enrichment services. Turkey has also raised this possibility. One developing country with nuclear power already, Brazil, has its own enrichment plant and is an NPT party but refuses to sign an Additional Protocol. Joint enrichment plans by Argentina and Brazil are being aired. South Korea is pressing the United States to support its plans to reprocess plutonium using an allegedly more proliferation-resistant technology called pyroprocessing.

The quest for energy security is helping legitimize demands for the full fuel cycle. New enrichment technologies such as laser separation may attenuate the current technological and cost barriers. The resistance of key developing states to IAEA and Russian attempts to establish nuclear fuel banks that would provide assurances of supply of nuclear reactor fuel has added to concerns that the future of nuclear energy faces a major political impasse. This is partly driven by anti-Western political gamesmanship by Cuba, Iran, Pakistan, and Syria, but also by genuine developing-country fears that they are being deprived of valuable technological options.

Although the NPT guarantees its parties the “inalienable right to the peaceful uses of nuclear energy,” this is conditional on the acceptance of nuclear safeguards and does not oblige any state to share any particular technology with any other. The United States and other countries, including key members of the G8 and the Nuclear Suppliers Group, are seeking to prevent additional states from acquiring enrichment or reprocessing capabilities, sometimes to the chagrin of even their allies such as Canada. One proposal for resolving this issue over the long term is for the existing possessors of such technology to give up their national capabilities through multilateralization or internationalization of these “sensitive” aspects of the nuclear fuel cycle. Numerous proposals are on the table for pursuing this vision, but its realization would involve enormous compromises on all sides. The issue ultimately reflects the bitter division between the nuclear haves and have-nots that is embedded in the NPT, a resolution of which can come only with the achievement of nuclear disarmament.

Strengthening nuclear governance

Global governance must be strengthened to cope with the expected increase in the number of nuclear facilities operated by the existing nuclear energy states. But much more needs to be done about aspiring developing countries. And this has to be accomplished without giving the impression that the goal is to deprive such states of their rights to the peaceful uses of nuclear energy, while at the same time impressing on them that rights come with the fulfillment of obligations that are in the interests of all.

A nuclear energy revival of whatever size and shape presents risks and opportunities for the IAEA. The opportunities include the potential to shape the revival in a way that did not occur in the early days of nuclear energy or in the first round of significant nuclear energy expansion in the 1970s and 1980s. The most urgent task is for the IAEA to bring all states into all of the nuclear governance regimes for safety, security, and nonproliferation as soon as possible, to inform them of their rights and responsibilities, and to assist them with implementation and compliance. The IAEA is also well positioned to provide expanded advisory services to help new entrants plan their programs from the ground up so as to ensure that they have in place the best possible regulatory, safety, and security measures, are fully compliant with nuclear safeguards, and have the necessary infrastructure and personnel. The IAEA is able, for instance, to assist states in conducting feasibility studies, which it has done for the member states of the Gulf Cooperation Council and Jordan. IAEA documents such as Considerations to Launch a Nuclear Power Programme, Milestones in the Development of a National Infrastructure for Nuclear Power, and Evaluation of the Status of National Nuclear Infrastructure are thorough and informative in setting out the requirements for a successful program. The ideal outcome would be for the IAEA to quietly use the new interest in the peaceful uses of nuclear energy as leverage to convince states to put in place all of the prerequisites for a safe, secure, and proliferation-resistant enterprise.

There is, however, a danger that the IAEA will be swamped by such demands. Yury Sokolov, IAEA Deputy Director General of Nuclear Energy, estimated in July 2009 that during the coming two years, the agency is expected to assist 38 national and 6 regional nuclear programs, a threefold increase from the previous reported period. To be able to continue functioning effectively, the IAEA’s member states, essentially the Western countries, will need to increase the agency’s budget to meet the ever-increasing demands placed on it, as well as ensuring that it is equipped with modernized facilities, up-to-date technology, and expert human resources.

But the global governance system also needs to be able to discourage states when nuclear energy appears not to be an appropriate choice. Although the IAEA’s detailed briefings and documentation may deter some from proceeding, the agency is neither mandated nor competent to provide advice on more appropriate alternative energy policies. In these cases, the International Energy Agency in Paris and the new International Renewable Energy Agency established in Bonn in 2009, along with countries with advanced national energy plans, are better placed to assist. Despite having a mandate to promote only nuclear energy, the IAEA should be able to develop partnerships with others to offer comprehensive energy policy advice. The threat of climate change and the need to urgently reduce carbon emissions may ultimately steer the international community into collaborating better on rational, comprehensive national energy plans.

Nuclear vendor states and companies are also in a position to strengthen nuclear global governance, not least to protect the long-term interests of developing countries. Responsibility for ensuring the safety and security of nuclear power plants lies not just with the customer states but with vendor states and their companies. Seller and recipient states usually sign bilateral nuclear cooperation agreements to provide a political framework for reactor sales within which their companies must operate, notably by adhering to their requirements relating to safety, security, and nonproliferation. The 2009 US-UAE 123 Agreement is a model in this respect. Some nuclear regulators in vendor countries are beginning to recognize the need to balance commercial interests with broader considerations. French regulator Andre-Claude Lacoste has reportedly suggested to President Nicolas Sarkozy that he be “a little bit more pragmatic” about signing nuclear cooperation agreements with countries now devoid of nuclear safety infrastructure. France has in fact established a unit within government to assess the institutional readiness of potential French nuclear reactor customers and advise them on how they might be assisted to prepare. It is not clear whether other vendors such as Russia and South Korea are making similar efforts.

In addition to ensuring that their customers are well prepared, vendor companies must also ensure that their product can be operated as safely and securely as possible. Most of the new entrants will probably purchase the latest nuclear technology, so-called Generation III or Generation III+, especially because it is advertised as being safer, more efficient, and more likely to achieve economies of scale. Luckily, the new designs will probably be deployed first in experienced states that have rigorous licensing procedures. Countries with companies that sell reactors need to engage in continuing efforts to harmonize safety requirements and the licensing and other regulatory requirements for new reactor types. The Multinational Design Evaluation Program, run in cooperation with the Nuclear Energy Agency and the IAEA, should be strongly pursued. In addition, vendor states and companies should assist the IAEA in revising its safety standards to take account of the new generation of reactors, because its current standards were written with existing light-water reactors in mind.

Vendor companies have compelling reasons to help strengthen global governance, because a major accident, a nuclear 9/11, or yet another state that acquires nuclear weapons under the guise of a peaceful program would probably sound the death knell of the predicted nuclear revival. The April 2010 CIGI/CCTC report The Future of Nuclear Energy to 2030 advocates the establishment of an international forum to bring together all states and companies, including vendors and utilities, involved in international nuclear reactor sales in order to harmonize criteria for such sales. Such a forum could consider an industry code of conduct, which could take into account the nonproliferation record of potential purchasers, along with their safety and security records and intentions, and the security context in the region where they are located. Industry bodies such as the World Association of Nuclear Operators should seek membership by developing-country operators even before nuclear power plants are built, so that they can begin to absorb the lessons learned from the experience of others. The new World Institute for Nuclear Security is another avenue for acclimating newcomers into the norms and requirements of nuclear security.

Developing countries will need to be convinced that strengthening nuclear global governance is not a plot by the developed world to deprive them of the benefits of nuclear energy, but rather an important way of ensuring that nuclear energy is used in a safe, secure, and peaceful manner, to the benefit of everyone. The fact that some developing countries, notably China, India, and South Korea, are entering the reactor sales business will help because such states and their industries will be eager to avoid a disaster arising from their product. But in the longer term, the sting will be taken out of nuclear energy politics only by the resolution of the perceived inequality resulting from the most advanced nuclear energy states also being the ones in possession of nuclear weapons.


Justin Alger () is a researcher at the Canadian Centre for Treaty Compliance (CCTC) at Carleton University in Ottawa, Canada. Trevor Findlay () is the William and Jeanie Barton Chair in International Affairs and director of the CCTC at Carleton’s Norman Paterson School of International Affairs. His book, Nuclear Energy and Global Governance: Safety, Security and Nonproliferation, will be published by Routledge in late 2010.