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Sunday, October 12, 2008

Are businesses and government agencies prepared for the implications of nuclear disasters?

by invitation BEYOND N-DEAL

Biz opportunities to reduce risk

SOON India will move ahead with the long-awaited 123 nuclear deal. But do the businesses understand the implications of the deal beyond the political rhetoric? The deal will be done, but what's next? One of the issues least likely to attract business attention at this stage is the unlikely but potentially devastating possibility of nuclear disaster.
    Are businesses and government agencies prepared for the implications of nuclear disasters? Prudent and active efforts can ensure that businesses and local authorities are well prepared but this will require vigilant public debate and business involvement. Yet there is hardly any public debate about how businesses can go about safeguarding India from the risks that nuclear power brings. That public debate is lacking is odd, but unfortunately, not uncommon.
    A nuclear disaster is too serious of a matter to be left to businesses. The businesses should say the same about the government. The fact is that both must prepare jointly.
    First, and most importantly, businesses must understand the basics of nuclear disaster risk: fundamental concepts, the disaster cycle, and even nuclear disaster myths. Businesses of India, even the corporate entities with global brand and ambitions, just do not know enough. This creates great risk, not just for responders, but for all. In this regard, chamber of commerce, universities, business federations, media and governments have a huge role to play in educating the businesses about what nuclear power can and cannot offer.
    Second, as nuclear energy related institu
tional architecture is designed and built, businesses must debate how India can institutionalise nuclear disaster risk reduction efforts. Are India's nuclear policies, strategies, geographic and sectional plans, and programme and project proposals available for public debate and open to improvement
in favour of risk reduction? Nuclear safety requires an informed businesses that can extract accountability from public institutions. The Chernobyl nuclear disaster on the unfortunate 26th of May in 1986 was the result of a long chain of government neglect for safety measures. An informed business could have held safety standards higher and avoided the disaster. How high are our expectations? Businesses must utilise the procedures of the Right to Information Act to demand that safeguard information and performance data — vital to pub
lic safety — be publicly available.
    Third, reducing nuclear risk is costly. Although it is potentially less so than the environmental cost of coal, financing nuclear risk reduction will require upfront capital. The government has not shared who will cover these costs, how, and under what arrangements. Should the cost be distributed equally among citizens or among users through energy bills?
    One desirable option is to mandate commer
cial insurance where premiums are set by an actuary in proportion to the level of risk of the facility. If managed well, nuclear facilities would then have a direct financial incentive to implement pro-active risk reduction efforts. India's ambitious insurance companies
    have a role to play here.
    Fourth, how will India select technology that reduces risk? Sure, experts will have some say, and supplier firms will aggressively promote their products in order to get the prime government contracts. If the process were to be an open market transaction, contracts would be awarded based on a balance of cost vs. quality and safety. Yet the government procurement system is likely to include other factors that influence decision-making. If authorities — suffering from multiple budget squeezes of existing debt finance, inflation,
and expensive food and fuel subsidies — decide for less costly technology, India risks becoming the global dumping ground for out-of-date and risk-exposed technology and expertise? Who will want responsibility for this type of technology and infrastructure?
    Fifth, a huge number of nuclear power plant options will soon arise, and project after project will line up for approval. How will vulnerability and risk assessments of these projects be audited, and who will conduct them? The National Disaster Management Authority will rush to create such guidelines. Will this be enough? How will the businesses know how cost effective and safe the guidelines are? Have such guidelines helped in the past? Will this process remain in the public domain? To improve safety, these processes and standards should remain transparent and open for scrutiny and improvement by citizens and businesses.
    Sixth, nuclear risk reduction is not a single-agency agenda. It needs a wide range of public and private partnerships demanding good governance, private sector involvement, military readiness, and even regional geo-political considerations. Most agenda setting will be done by public authorities and expert committees. However, worldwide experience shows that necessary and effective alarms are often sounded by a citizen or a business interest, be it about a leak of radioactive material or an abuse of power. Civil society needs to ensure that this space for public alarm remains open and that an aware public feels confident and safe in uncovering abuses and shortcomings in nuclear security that put the public and businesses at risk.
    Seventh, India will need a renewed national legal framework for securing these nuclear developments, as well as for enforcing high standards and accountability. Who will develop and enforce the safety framework and standards? The government should make this information available in simple terms. Businesses should not wait for another disaster to design safety and recovery blueprints; they should draw lessons from the Bhopal tragedy that has drawn out decades of procedures, court cases, and struggles for compensation. The businesses must actively work with their representatives in parliament to establish an appropriate new framework.
    The businesses of India should be preparing to ask these questions to this or the next government. Political leaders, from Left to Right, should be preparing to answers these questions of real risk with real solutions.
    The writer is director, All India Disaster Mitigation Institute


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