by David H. Martin, Nuclear Awareness Project
for the Campaign for Nuclear Phaseout
September, 1997
Executive Summary
In December 1996, the Turkish state electrical utility TEAS invited
bids from foreign reactor vendors for the construction of a 100% financed
nuclear power station to be built at Akkuyu Bay on Turkey's Mediterranean
coast. Atomic Energy of Canada Limited (AECL) is bidding to supply two
to four 700 MW CANDU reactors in a two-unit or four-unit station.
Ironically, just as Canada has shut down one-third of its own nuclear power
reactors because of technological problems, AECL is trying to sell the
same flawed technology to countries in the developing world. AECL's attempt
to sell CANDU reactors to Turkey is a tragic mistake, that if successful,
would have very high costs for the citizens of both Canada and Turkey.
Many observers believe that Ontario Hydro's August 1997 announcement of
the shutdown of seven reactors heralded the beginning of the end of nuclear
power in Canada. By March 1998, ten of Ontario Hydro's CANDU reactors will
be shut down, most having operated for only about one-half of their expected
40-year lifetimes.* High cost, poor performance and endemic technical problems
make it unlikely that they will ever be restarted. In 1996, CANDU performance
was by far the worst of all major reactor types.
In Canada, there have been no new reactor orders since 1978. The situation
is similar in the United States, where the last uncancelled reactor order
was placed in 1973.
There is strong grassroots opposition to the proposed Akkuyu Bay nuclear
plant in Turkey, where, as in Canada, citizens are fighting their government
in order to promote a truly sustainable energy future based on efficiency
and renewable energy. Unlike Canada, however, Turkey has the opportunity
to avoid the disastrous mistake of building nuclear power plants in the
first place.
Turkey has made four attempts to start a nuclear power program, beginning
in the 1960s. AECL spent untold millions of dollars in an unsuccessful
attempt to sell a CANDU reactor to Turkey in the mid-1980s. At that time,
AECL was championed by the Energy Minister of the day -- Jean Chrétien.
AECL's bid was ultimately vetoed by the Canadian Cabinet of the day, because
the financial risk was deemed unacceptable. Unfortunately, as Prime Minister,
Chrétien has been in a position to force approval of AECL's bid
to sell CANDU reactors to Turkey, despite the fact that the costs and risks
are just as great, if not greater, than they were in the 1980s.
* Ontario Hydro's Douglas Point reactor was shut down in 1984; the NPD
reactor was shut down in 1987; the four Pickering "A" reactors
will be shut down in December 1997; Bruce "A" reactor 2 was shut
down in 1995; and Bruce "A" reactors 1, 3 and 4 will be shut
down in March 1998.
Safety and Environmental Impacts / Alternatives
CANDU reactors are no more or less safe than other reactor designs, and
the risk of a catastrophic accident is real. CANDUs have had their share
of serious accidents, and it is only a matter of time before a disastrous
accident occurs.
Turkey has great potential for energy efficiency improvements, since unlike
the rest of Europe, its energy efficiency has worsened, rather than improved
since 1980. A truly sustainable energy future in both Canada and Turkey
will be based on efficiency and renewable energy -- not nuclear power.
Economic Risks for Canada
In a February 1997 publication by the Campaign for Nuclear Phaseout entitled
Nuclear Budget Watch 1997 , it was demonstrated that Atomic Energy
of Canada Limited (AECL) has received federal taxpayer subsidies totalling
over $15 billion since 1952. There is no possibility of that massive subsidy
ever being repaid to the Canadian government through reactor sales.
Part of the government's support for AECL included $1.5 billion in financing
for the November 1996 sale of two CANDU reactors to the Peoples' Republic
of China (total cost $4 billion). The sale of two reactors to Turkey would
carry a similar financial burden for Canadian taxpayers, who would not
only provide the funds, but bear all of the risk if the money was not repaid.
Such a loan cannot be considered a commercial transaction. Like the loan
to China, it would go through a crown corporation, the Export Development
Corporation, on its Canada Account, which is carried on the books of the
Department of Foreign Affairs and International Trade. The loan would be
too big and too risky for the private sector or the Export Development
Corporation to consider on their own. That is why every reactor sale actually
increases the financial burden on Canadian taxpayers.
Turkey is demanding 100% financing of the two to four 700 MW reactors,
even including the local costs, which will be to its direct economic benefit.
It is not clear if Turkey will provide a `hard' sovereign guarantee of
the debt. In addition, there are crucial questions about:
- the absence of risk insurance on the loans;
- whether AECL will be required to provide a performance guarantee (CANDU
performance has declined alarmingly in recent years);
- who will make up the shortfall in case of cost overruns; and
- the degree to which AECL will give away the store through transfer of
CANDU manufacturing and marketing rights.
AECL has kept secret all the contractual details of the November 1996 sale
of two reactors to China -- despite the fact that Canadian taxpayers provided
the largest loan in Canadian history to finance the deal. AECL is a publicly
owned crown corporation -- it should disclose the details of the financial
arrangements that it has proposed in its bid to sell CANDU reactors to
Turkey.
AECL Corruption
It is a matter of public record that AECL bribed officials in Argentina
and South Korea in the 1970s in order to obtain reactor sales. Those bribes
totalled at least $22 million. As recently as 1994, AECL's agent in South
Korea was convicted and imprisoned in that country for corruption and bribery,
after giving a bribe to the head of KEPCO, the Korean state utility that
owns and operates that country's nuclear power plants. AECL has in the
past disguised bribes as agent fees. Without improved disclosure and oversight,
there is no assurance that AECL's corrupt practices are not continuing
to this day.
Nuclear Weapons Proliferation
The dark underside of nuclear power has always been its potential for nuclear
weapons proliferation, either through the production of plutonium -- an
inevitable byproduct of reactor operation -- or through the transfer of
sensitive nuclear information, technology and materials. Since the early
1980s there have been reports that Turkey has aided Pakistan in its acquisition
of nuclear weapons. Turkey's attempt to build the Argentinean CAREM-25
reactor was likely aimed at plutonium production for nuclear weapons.
Security Threats
Terrorists do not need nuclear weapons if they can trigger a catastrophic
radiation release by sabotaging or bombing a nuclear power plant. Potential
security threats to a nuclear plant in Turkey would be both internal and
external. Turkey has been in a virtual state of civil war for more than
a decade, and the longstanding military conflict with Greece over control
of Cyprus is again heating up. Cyprus is directly offshore from proposed
nuclear station at Akkuyu Bay.
Human Rights in Turkey
Turkey has a long history of gross human rights abuses, and these abuses
have worsened in recent years. Abuses include systematic, widespread torture
and murder of prisoners in custody; death squad murders; disappearances;
restrictions on freedom of speech; and incommunicado detention without
legal representation. A virtual state of war with Kurdish rebels has resulted
in an estimated 20,000 deaths since 1984 and the displacement of two million
people in the southeastern provinces, where a state of emergency is in
place.
Turkish Politics
Turkey does not provide a secure environment for a risky, multi-billion
dollar, long-term nuclear investment. There have been three military coups
d'état in recent years in Turkey -- in 1960, 1971, and 1980.
Events of the last year may be considered a quasi-coup. On June 18, 1997,
the democratically elected Prime Minister, Necmettin Erbakan, was forced
to resign by the military and Mesut Yilmaz, leader of the conservative
Motherland Party, was named Prime Minister. The intense political instability
of Turkey in 1996-97 has also destabilized the country's economy. Annual
inflation in Turkey is at 80%. The annual deficit is about $15 billion,
and the country's debt is about $100 billion.
Conclusion
There are many good reasons why Canada should not export nuclear reactors.
However, if the government is determined to proceed with its CANDU export
attempts, certain minimum conditions should be placed on these efforts.
This report therefore makes the following recommendations to the Government
of Canada:
(1) require full public disclosure of details of the proposed deal with
Turkey and establish an ongoing mechanism in Canada for public review and
oversight of AECL's business practices;
(2) end governmental backing for the loans to Turkey for the nuclear deal;
(3) require immediate public disclosure of the fees paid or contracted
to AECL's agents in Turkey;
(4) be prepared to end the nuclear deal and impose trade sanctions on Turkey
if gross human rights violations continue; and
(5) end all subsidies for AECL.