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Legal and Regulatory Frameworks for Decommissioning and Waste Management Jonathan leech February 2016 +44 7825 171093 [email protected]

Legal and Regulatory Frameworks for Decommissioning and ... · Legal and Regulatory Frameworks for Decommissioning and ... Legal and Regulatory Frameworks for Decommissioning and

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Page 1: Legal and Regulatory Frameworks for Decommissioning and ... · Legal and Regulatory Frameworks for Decommissioning and ... Legal and Regulatory Frameworks for Decommissioning and

Legal and Regulatory Frameworks

for Decommissioning and Waste

Management

Jonathan leech

February 2016

+44 7825 171093

[email protected]

1

Page 2: Legal and Regulatory Frameworks for Decommissioning and ... · Legal and Regulatory Frameworks for Decommissioning and ... Legal and Regulatory Frameworks for Decommissioning and

• 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

Legal and Regulatory Frameworks for

Decommissioning and Waste Management

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18/02/2016 3

UK legacy nuclear liabilities

2015 2135

“120 years or so …”

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Sites Funder Estimate

Legacy sites (NDA

estate)

State (via NDA) £115 billion

Advanced Gas Cooled

Reactors / Sizewell B

Nuclear Liabilities Fund

(with state guarantee)

£19.1 billion

New build Operators (via

segregated fund)

?

18/02/2016 4

UK strategy

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5

Nuclear Decommissioning Authority

NDA

Dire

ct R

ail S

erv

ice

s (D

RS

)

De

pt. o

f En

erg

y &

Clim

ate

Ch

an

ge

(DE

CC

)

Inte

rnatio

na

l Nu

cle

ar S

erv

ice

s (IN

S)

Pa

cific

Nu

cle

ar T

ransp

ort (P

NT

L)

Ru

the

rford

Inde

mn

ity

ND

A P

rope

rties

Ra

dio

activ

e W

aste

Ma

na

ge

me

nt (R

WM

)

ND

A A

rch

ive

s

Sellafield Ltd

LLW Repository Ltd

Magnox Ltd

Dounreay Site

Restoration Ltd

Supply chain

Parent Body

Organisations

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 Admin

Operations

Capenhurst Nuclear

Services Ltd

Springfields Fuels Ltd

GD

F

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18/02/2016 6

NDA site licence companies / designated sites

Sellafield Ltd

LLW Repository Ltd

Magnox Ltd

Dounreay Site

Restoration Ltd

Capenhurst Nuclear

Services Ltd

Springfields Fuels Ltd

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18/02/2016 7

NDA - control not regulation

NDA • Setting / approving

plans

• Financial

sanctioning

• Directions

• Duty to have regard

to health, safety,

environment and

security

• Cannot authorise

contravention

• Allowable costs

DECC

Site Licence

Company Must use site only for

purposes that secure

compliance with

regulatory / licence

obligations

Parent Body

Organisations • Seconded

leadership team

• Additional support

• Working capital

facility

• Financial

guarantees

• Incentivised by

dividends

• Disallowable costs

Supply Chain

Environment

Agency

Office for Nuclear Regulation

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18/02/2016 8

NDA annual funding spending (2015/16)

£3.31 bn budget

£2.09 bn DECC funding

£1.22 bn commercial revenue

No segregated fund

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18/02/2016 9

PBO model

PBO

NDA

Site Licence Company

Parent Body Agreement

Management & Operations Contract

NDA

Site Licence Company

Service Agreement

Strategic Partner

Purchaser

NDA

Site Licence Company

Overarching Agreement

Investment Agreement

Market Enhanced SLC Asset sale

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18/02/2016 10

PBO

NDA

Site Licence

Company

Parent Body

Agreement Management &

Operations Contract

PBO model

Market Enhanced SLC Asset sale

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18/02/2016 11

PBO

NDA

Site Licence

Company

• Financial guarantees

• SLC shares

• Nuclear indemnity

• Operation

• Decommissioning

• Clean up

• Plan approval

• Allowable Cost

• Fee

• Dividends

• Seconded leadership team

• Additional support

• Working capital

• Disallowable Cost

PBO model

Market Enhanced SLC Asset sale

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18/02/2016 12

NDA

Sellafield Ltd

Service Agreement

Strategic Partner(s)

• Strategy business

partner

• People & transformation

partner

• Programme & project

delivery partner

PBO model

Market Enhanced SLC Asset sale

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18/02/2016 13

Purchaser

NDA

Springfields /

Capenhurst

Overarching

Agreement Investment

Agreement

PBO model

Market Enhanced SLC Asset sale

Page 14: Legal and Regulatory Frameworks for Decommissioning and ... · Legal and Regulatory Frameworks for Decommissioning and ... Legal and Regulatory Frameworks for Decommissioning and

18/02/2016 14

Nuclear Liabilities Fund

Nuclear Liabilities

Fund Ltd (segregated fund)

NDA

• Review of

strategy and

estimates

• Approval of

payments

EDFE

(AGRs +

Sizewell B)

The Nuclear Trust

(Scottish public trust)

National Loans

Fund

• State guarantee

• Investment

strategy

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• 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

Comparison with other approaches

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• Mobility of capability

• Managing nuclear liability risks

• Cross border waste treatment options

18/02/2016 16

International availability of capability and facilities

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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

Page 18: Legal and Regulatory Frameworks for Decommissioning and ... · Legal and Regulatory Frameworks for Decommissioning and ... Legal and Regulatory Frameworks for Decommissioning and

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

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18/02/2016 19

Paris / Brussels liabilities for materials in transit

Damage

• Contracting party

• Joint protocol

• No nuclear installations

• Reciprocal benefits /

identical principles

• Contracting party

• Joint protocol

Ship registered in …

• Contracting party

• Joint protocol

Pre 2004 Protocols

Post 2004 Protocols

Incident

Damage

Incident

Territory of Contracting

party International water

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18/02/2016 20

Paris / Brussels liabilities for out-bound materials

Territory of Contracting

party International water

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)

Territory of Non-

Contracting party (non-JP

with nuclear installations)

Pre 2004 Protocols

Incident

Damage

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Ship registered in … Damage

18/02/2016 21

Paris / Brussels liabilities for out-bound materials

Territory of Contracting

party International water

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)

Post 2004 Protocols

Incident

Territory of Non-

Contracting party (non-JP

with nuclear installations)

{ Liability transfer requires

"direct economic interest"

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18/02/2016 22

Paris / Brussels liabilities for in-bound materials

Territory of Contracting

party International water

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)

Pre 2004 Protocols

Incident

Damage

Territory of Non-

Contracting party (non-JP

with nuclear installations)

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Ship registered in … Damage

18/02/2016 23

Paris / Brussels liabilities for in-bound materials

Territory of Contracting

party International water

Post 2004 Protocols

Incident

Liability transfer requires

"direct economic interest" }

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)

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• 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

Cross border waste management options

Page 25: Legal and Regulatory Frameworks for Decommissioning and ... · Legal and Regulatory Frameworks for Decommissioning and ... Legal and Regulatory Frameworks for Decommissioning and

Legal and Regulatory Frameworks

for Decommissioning and Waste

Management

Jonathan leech

February 2016

+44 7825 171093

[email protected]

25