(November 23, 2001) On 6 November, the Sierra Club of Canada took part in a hearing in the Supreme Court of Canada to defend the right of public access to documents regarding the 1996 sale of two CANDU nuclear reactors to China. The hearing concerned the refusal of CANDU reactor vendor Atomic Energy of Canada Limited (AECL) to make Chinese environmental assessment documents publicly accessible. The demand by Sierra Club to make these documents public is part of a broader federal court case, started in 1997, on the question of whether the Canadian funding of the Chinese reactors makes an environmental assessment under Canadian law necessary.
(558.5342) Sierra Club of Canada/WISE Amsterdam - AECL was defeated in two prior attempts before the Federal Court of Canada and the Federal Court of Appeal to keep Chinese environmental assessment documents secret. AECL argues that the documents contain commercial secrets, and their public disclosure would offend the Chinese. A confidentiality order, which AECL wanted, would bar the public and the media from the courtroom when the documents would be mentioned, and would seal the documents from public eyes. AECL has now taken its appeal to the Supreme Court of Canada.
The Sierra Club of Canada filed the case at the Federal Court (on the necessity of an environmental assessment) almost five years ago in January 1997 on the grounds that the Canadian government's decision to provide CDN$1.5 billion (US$0.91 billion) in loans to support the sale triggered a duty to conduct a public environmental assessment of the project. During the process AECL stated that Chinese documents exist and that they are the equivalent to a Canadian environmental assessment. AECL however refused to make these documents public in the court, which was requested by the Sierra Club.
In 1996, AECL signed the contract with the China National Nuclear Corporation (CNNC) for the sale of two CANDU-6 reactors, known as Qinshan Phase III. The export of the two 678 MWe reactors is worth over CDN$3 billion according to AECL. The reactor vessels for both reactors have already been installed and piping and equipment installation is underway. In March 2001, AECL said the reactors would be "completed" in February 2003 and February 2004 respectively. Qinshan Phase I consists of a 300 MW PWR built by CNNC (criticality in 1991), Phase II of two 600 MW PWRs being built by CNNC (criticality expected in 2002 and 2003).
Revised Environmental Assessment regulations
Some weeks before the deal was signed, the Canadian cabinet met on 6 November 1996 in a hastily arranged night-time session to make changes to regulations under the Canadian Environmental Assessment Act. As they stood, the Projects Outside Canada Environmental Assessment Regulations would have required that a preliminary screening, and a comprehensive study (environmental assessment) be carried out on the proposal by AECL to build the two CANDU reactors. The revised regulations had the purpose of eliminating requirements for preliminary screenings and "comprehensive" assessments on Canadian funded overseas projects. The revised regulations were given the force of law the next day, without the normal publishing in the Canada Gazette for a 60-day comment period.
On 8 November 1996, the Minister for International Trade (then Art Eggleton), with the concurrence of Minister of Finance Paul Martin authorized a loan of up to CDN$1.5 billion to the State Development Bank of China (SDB) through the Canada Account of the Export Development Corporation (EDC). This means that the funds would come directly out of the Consolidated Revenue Fund, the main operating fund of the federal government. The CDN$1.5 billion government guarantee and loan for the Qinshan reactors was the largest loan in Canadian history, and as an EDC Canada Account transaction, it will remain a liability on the federal government's accounts until paid back.
On 26 November 1996, AECL signed the contract with CNNC and the revised regulations were published one day later.
Sierra Club Federal Court case
On 20 January 1997, the Sierra Club of Canada filed an Application for Judicial Review with Federal Court of Canada-Trial Division. Sierra Club wants a judgment about the decision by the government not to demand an environmental assessment in the export deal. According to the Sierra Club, the obligation for an environmental assessment remains applicable as the decision to provide the loan and the signing of the contract had taken place before the revised regulations were published.
In November 1997, minutes of an April 1997 cabinet were leaked to the public. The document primarily dealt with the financing of the proposed sale of two CANDU reactors to Turkey, but it commented extensively on the Sierra Club court case:
"In the Sierra Club litigation challenging the CANDU China transaction, the government has taken the position that CEAA [Canadian Environmental Assessment Act] does not apply to projects which receive financial assistance from Crown corporations through the Canada Account. However, [the Department of] Justice has advised that its case is not strong and that the Federal Court may well rule in favor of the Sierra Club. If the government loses, Justice expects that the court could issue an order directing the 'responsible authority(s)', DFAIT [Department of Foreign Affairs and International Trade] and Finance, to conduct an environmental assessment which satisfies the Projects Outside Canada Environmental Assessment Regulations."
AECL's secrecy attempt
AECL, who is involved in the process as an intervener, has subsequently engaged in a lengthy series of delaying tactics, while work has continued on the reactors in China. It has argued that Chinese environmental reviews are as good as a Canadian environmental assessment, but has also argued that these Chinese documents should remain secret for reasons of commercial confidentiality. AECL was defeated in its attempt to keep the documents secret in the process, first by a decision of the Federal Court of Canada (October 1999), which stated that the court was "not satisfied that the need for confidentiality exceeds the public interest in open justice." AECL's subsequent appeal of this decision before the Federal Court of Appeal in May 2000 was also defeated.
AECL then tried to reverse the two court's decisions by appealing the case at the Supreme Court. AECL's appeal was heard before the Supreme Court on 6 November.
The AECL actions have delayed the broader court case on the necessity of an environmental assessment, so that the question of such an assessment is becoming increasingly moot, as construction on the Chinese reactors proceeds.
A decision by the Supreme Court on the public access to the Chinese environmental documents is expected in January or February 2002. A hearing in the broader court case at the Federal Court (on the necessity of an environmental assessment) will be held in late 2002.
Sources:
- Sierra Club of Canada media release and backgrounder, 6 November 2001
- web sites www.sierraclub.ca
- and www.euronuclear.org
Contact: Nuclear Campaign - Sierra Club of Canada, c/o P.O. Box 104, Uxbridge, Ontario, Canada L9P 1M6
Tel/fax: +1 905 852 0571
Email: nucaware@web.ca
Web: www.sierraclub.ca/national