Examination of Witnesses (Questions 1-19)
2 DECEMBER 2003
MR STEPHEN
TIMMS MP, MR
PATRICK ROBINSON,
MR PETER
THOMPSON AND
MR LAURENCE
WILLIAMS
Q1 Chairman: Good morning, Minister,
welcome to the European Scrutiny Committee; it is kind of you
to come along this morning. Would you like to introduce your colleagues?
Mr Timms: Thank you, Chairman.
Thank you for your invitation to be here. My team comprises Patrick
Robinson on my right, who is the DTI's Director of Nuclear Safety
and Security. Peter Thompson on my immediate left is a legal advisor
in the department on nuclear matters. Next to him is Laurence
Williams, who is Her Majesty's Chief Inspector of Nuclear Installations,
based in the Health and Safety Executive.
Q2 Chairman: You have obviously brought
a formidable team with you, Minister. Welcome to you gentlemen.
We have a letter which you sent on 30 October to the Chairman
of the House of Lords Committee outlining developments in Brussels
since the summer. Could you update us on what has happened since
then?
Mr Timms: Yes. I reported in that
letter that discussions in the Council working group over the
previous month or so had focused on the respective merits of the
legally binding and non-legally binding approaches. In those discussions
the presidency had made two attempts to revise the directive,
apparently to make it more acceptable to those supporting the
non-legally binding instrument approach. Since then there have
been a further two iterations of the presidency's compromise text.
As a result, the draft now on the table does differ considerably
from the one which was submitted with the explanatory memorandum
in June. The main changes are that there is an additional "Whereas"
clause confirming that safety levels in the accession states are
comparable with those prevailing amongst the existing Member States.
Specific references to the development of common EU safety standards
have been removed. Uranium mines and holders of sealed sources
such as hospitals and research institutions are not to be treated
now as nuclear installations for the purposes of the directive.
An additional article has been inserted confirming the national
responsibility for the safety of nuclear installations. All of
the detailed provisions on financial resources have been removed,
including the proposed requirement for the segregation of decommissioning
funds; the directive would now simply require Member States to
ensure adequate financial resources are available to support the
safety of nuclear installations, including during decommissioning,
in line with advice by the Council Legal Service that the Euratom
Treaty does not provide an adequate legal base for detailed rules
in this area. Lastly, the Commission would not be empowered to
undertake verifications of the national safety authorities using
experts from Member States, instead reviews of the national regulatory
bodies would be undertaken by a regulatory authorities' committee.
That committee would be composed of representatives of the national
regulatory bodies and that committee, rather than the Commission,
would draw up its review programme. There have been a few other
minor drafting changes as well, all at the request of other Member
States. I should make it clear that the four countries preferring
the non-legally binding approach, Sweden, Finland, Germany and
ourselves, have all avoided proposing specific drafting amendments
to ensure we do not undermine our negotiating position. A number
of the amendments have been quite helpful, but they do not resolve
and could not resolve our fundamental concerns about adopting
an EU legally binding instrument. A directive would open the way
to community institution involvement in decisions on nuclear safety,
which in our view can only properly be taken by the Member States
and national regulators. It would run counter to the key principle
enshrined in the Convention on Nuclear Safety that nation states
should be responsible for the safety of nuclear installations
within their jurisdiction. Those discussions in the Council working
group have now been completed. On 26 November, the Italian presidency
asked COREPER for a political decision on whether to pursue the
legally binding or non-legally binding approach. UK, Germany,
Sweden and Finland opposed the Commission's approach, as did Lithuania
and the Czech Republic. The presidency concluded that whilst most
could accept an approach based on directives, some could not and
they have therefore left it to the incoming Irish presidency to
decide how to take the matter forward. As I promised in my letter
of 30 October, if we are drawn into article-by-article discussions
on a directive, I shall submit a supplementary explanatory memorandum
covering the version of the draft directive which is current at
that time. A parliamentary scrutiny reserve would be maintained
until the dossier is cleared by the scrutiny committees of both
houses. Let me finally mention my department's formal consultation
on this directive. The consultation followed the informal consultation
exercise on which I reported in the original explanatory memorandum.
Views were sought with a 17 November deadline. Only two responses
were received to the formal consultation, both from the nuclear
industry and both confirmed their support for the government's
preferred approach of a non-legally binding instrument. I and
my colleagues will be very happy to answer any questions the Committee
might have.
Q3 Chairman: I am sure we will have a
good few. You said in your original explanatory memorandum that
the Council's atomic questions group had asked the Council Legal
Service for an opinion on whether the European Court of Justice
ruling cited by the Commission actually provides sufficient support
for the competence which it is seeking. Has that opinion been
provided and can you tell us what it says?
Mr Timms: Yes. The Council Legal
Service provided an opinion on 23 October and it confirmed the
competence of the Community to make general rules in the area
of nuclear installation safety for the purpose of protecting workers
and the general public from the effects of ionising radiations.
The areas covered by the directive fall within the legislative
competence of the Community by virtue of Articles 31 and 32 of
the Euratom Treaty.
Q4 Jim Dobbin: You said the question
arose as to whether Article 203 of the Euratom Treaty could be
used as a further legal base if the Commission was considered
to have insufficient powers. Would you like to elaborate on that?
Mr Timms: It is the case that
Article 203 provides a legislative base for Community legislation
where the Euratom Treaty does not provide sufficient powers for
the Community to legislate. The Council Legal Service's opinion
is very clear that Article 203 is not necessary in the areas covered
by the directive because the combination of Articles 31 and 32(2)(b)
in the Euratom Treaty already provide sufficient powers for the
Community to legislate in the areas covered by the proposed directive.
So the recourse to Article 203 does not arise.
Q5 Mr David: You have made reference
to the non-legally binding alternative to a directive which the
government has been developing and promoting. You have mentioned
that the text has been circulated by the UK, Finland and Sweden.
I think you mentioned that Belgium and Germany have given it support
and you just mentioned that there has been a favourable reaction
from Lithuania and the Czech Republic. Is any more support other
than those states likely to emerge in the future? Is there any
possibility of achieving a consensus or even a majority for this
approach which you favour?
Mr Timms: As you say, the text
was jointly favoured by those three countries and we do have firm
support from Germany as well. The position with Belgium is less
clear cut and it is the case that Belgium is open minded on the
idea of a non-legally binding instrument, but they are pressing
hard for some very firm rules on decommissioning funds. So that
is a rather different approach to the one we have taken. There
are some others who may be able and prepared to support our position.
Denmark might be persuaded that the non-legally binding approach
is right. The Netherlands are still considering their opinion.
Of the other existing Member States, all of them have indicated
their support for a directive. At the moment we have a blocking
minority and those countries which have committed to that view
will stand by it. Whether others will join is less clear at the
moment.
Q6 Mr Tynan: It is clear from your earlier
explanatory memorandum that the proposal would give rise to a
number of practical difficulties, particularly as regards the
role of the Environment Agency, the use of separate decommissioning
funds to meet public sector nuclear liability and the proposed
implementation date of May 2004. Have any of these issues been
addressed and in particular where do we now stand on the decommissioning
fund idea?
Mr Timms: There are several practical
difficulties which would arise in our view if the directive were
to go forward. I shall ask Mr Williams to comment from his point
of view as the Chief Inspector of Nuclear Installations about
what some of those difficulties might be. Let me pick up first
your specific question about decommissioning funds. Our view is
that we do support the principle that nuclear generators should
ensure that there are sufficient resources to meet the requirements
of decommissioning and in the case of British Energy, our biggest
nuclear generator, they already have segregated funds separately
managed and those would have met the criteria originally identified
by the Commission. In that case it is more a matter of ensuring
fair competition rather than ensuring safety. In our view, where
the government has undertaken to fund the cost of decommissioning,
it must be free to arrange for them to be met in the most cost
effective way. That is the approach which we think is right here.
In terms of some of the other practical difficulties which we
think would arise, I should be grateful if Mr Williams would comment.
Mr Williams: There would be a
significant number of practical difficulties for us if we had
a directive on nuclear safety. At the moment nuclear safety is
our responsibility; the practical day-to-day regulation of the
nuclear industry is delegated to me as the Chief Inspector. I
operate a very non-prescriptive licensing regime which enables
us to cover the wide range of nuclear installations. It is not
just nuclear reactors; it is a whole range of different activities.
What would worry me if we had a directive would be that initially
the directive seems to imply that the only effect would be that
you would set up a committee of regulators, which presumably would
be my colleagues in other countries within Europe. Then we would
carry out reviews of each other's regulatory systems. If you actually
look at the proposed directive, which is a little bit messy in
terms of what it thinks is important to nuclear safety, there
are hooks upon which people could hang, such as how to do nuclear
inspection, how to make regulatory decisions, what standards to
apply. Once it becomes a legally binding directive, people could
then start questioning my staff's decision-making and this could
bring us into a whole range of areas where currently we do not
get involved. We could be taken to the European Court, we could
be taken to all sorts of areas, which could affect my ability
to carry out the day-to-day regulation. There would be other areas,
if the directive were to come in and it would not be long before
the committees would be looking at why we have so many regulatory
systems within Europe. I do not think there are any two nuclear
countries currently within the European Union which have the same
regulatory system. We have a whole mixture: some prescriptive
systems, some regulatory systems, where we have a government control
regulator supported by a technical support organisation in the
United Kingdom; we have a completely independent nuclear regulatory
authority which has its own technical capability so we stand alone.
There are no two the same. If people then started questioning
whether we should or should not have harmonised approaches, that
could have a major effect upon the way we regulate nuclear safety;
certainly it would have an effect on the size of my organisation
and the cost to the UK nuclear industry. I wonder for what benefit.
Mr Timms: The central point here
is that at the moment it is crystal clear that nuclear safety
is a responsibility of each of the national regulators. The great
worry about a directive is that the position would then become
less clear. It would not be quite clear whether the responsibility
was at the national or at the Community level and quite how those
two tiers related would raise some serious uncertainties about
just where the responsibility lies with a potentially unhelpful
impact on nuclear safety.
Q7 Mr Tynan: Playing devil's advocate,
obviously you would say that the nuclear safety regulation in
this country at the present time is exceptional, it is very, very
good and it serves its purpose. Would you not think that spreading
that type of regulation across the Community, especially with
the accession countries coming in, our regulation being spread
out across the Community countries would lead to better safety
regulation as regards the nuclear industry on a European basis?
Mr Timms: That spreading best
practice is exactly the approach which the non-legally binding
instrument proposes. Our view is that nuclear safety in the accession
countries—and there has been a positive report on the state
of that now—can best be assured by making sure that there
is good and effective national regulation in each of the accession
countries. If there were to be a view in some of the accession
countries that actually they did not need to worry too much about
this because the Commission was going to take care of it so it
would all be done on the European level, then that would damage
the prospects for nuclear safety which all of us agree must be
paramount. I do not know whether Mr Williams can add to that.
Mr Williams: Yes, Minister, I
agree with you that the non-legally binding proposal does incorporate
how we spread best practice. Let us not forget that in the nuclear
community at the moment, we have the Nuclear Safety Convention
which virtually every country in the European Union has currently
signed and ratified. I believe all of the applicant countries
have signed and ratified the Nuclear Safety Convention. In that
convention every three years we have to present to our peers a
report on how our countries are delivering the intent of the articles
of the convention. There is an opportunity there for people to
examine how we do things and share best practice. Within Western
Europe we set up in 1999 what is called the Western European Nuclear
Regulators' Association with the explicit intent of sharing best
practice and harmonising our approaches. There are different legal
systems within Europe, which makes it difficult to have exactly
the same system. We have tried to set up an approach where we
can demonstrate that we have harmonised our approaches to nuclear
safety. We have the International Atomic Energy Agency standards
which are the only true internationally recognised safety standards
for nuclear safety, radiation protection, radioactive waste management
and the transport of nuclear materials. Every member of the European
Union, the accession countries and the Commission itself participate
in the development of those standards. We also have bilateral
arrangements where we share best practice. For instance, we have
bilateral arrangements with France and I currently have one of
my inspectors working in the French regulatory organisation and
I have a French regulator working in mine. There are plenty of
opportunities for sharing best practice and that is what we do.
Q8 Mr Tynan: On the decommissioning fund,
Finland has a decommissioning fund which is instigated at the
very beginning of the process. When you are going to build that
nuclear power station then a cost is put into the building and
the commissioning of the plant. You say that British Nuclear Fuels
have a segregated fund at the present time. Under those circumstances
is there a requirement for the decommissioning fund to be strengthened?
Do you think what we have at the present time is sufficient and
if not, why not?
Mr Timms: I made the point earlier
that British Energy already had segregated funds in place separately
managed and so would have met the criteria originally identified
by the Commission. I think in the UK we are well placed on this.
I do not think the directive takes things forward.
Mr Robinson: The point is that
British Energy has a segregated fund and the restructuring British
Energy have recently gone through has taken account of the decommissioning
requirements and I would say we in the UK are well placed.
Q9 Mr Cash: In the accession countries,
particularly I recall in the vicinity of Vienna, in Hungary—I
am not sure which country—there have been some extremely
dangerous Chernobyl type reactors. I do not know the exact description
of them, but I am sure you do. May I just say in parenthesis,
like Chernobyl, if something goes wrong, it affects everybody
in a very big way? Two questions really. First of all, have the
problems associated with those reactors actually been sorted out?
I understand they were given a patch and mend, not very high quality,
refurbishment. The second thing: what are the arrangements in
terms of providing an adequate fund for compensation and/or damages
if in fact any of these things go wrong on a Europewide basis?
Mr Timms: The accession states
with nuclear power plants are the Czech Republic, Lithuania, Slovenia,
Slovakia and Hungary. Some of the reactors in those states have
in the past given rise to some safety concerns. That issue has
been addressed as part of the EU enlargement process and a working
group of the European Council undertook a detailed assessment
of nuclear safety in all of the accession states, with nuclear
installations. As a result, a number of the states made specific
commitments on nuclear safety, including in some cases agreement
to close their higher risk reactors. Those commitments will be
fully enforceable in the European Court of Justice under the protocols
of accession and the Council's working party on nuclear safety
concluded that the countries have already achieved a comparable
level of safety to that prevailing amongst the existing Member
States, subject to them fulfilling their accession obligations.
The concerns which have rightly been raised have been fully and
effectively addressed in the discussions around the margins.
Q10 Mr Cash: You have not answered my
questions about the fund which would be needed to provide the
backup for damages and for compensation in the event that your
optimistic analysis actually proved to be unjustified.
Mr Thompson: There are three existing
international conventions covering the subject of liability following
nuclear accidents, the Paris, Vienna and Brussels conventions.
They provide for a system for people to claim compensation in
the event of nuclear accidents. The Paris and Brussels conventions
are at the moment subject to amendment. The protocols amending
those conventions have been agreed and they can also cover non-contracting
states to allow the people to claim compensation. There is a provision
in the Energy Bill which has been introduced to allow the United
Kingdom to put into place legislation to cover those amendments
to those conventions. There is an existing international regime
to cover compensation.
Q11 Mr Cash: Where is the money coming
from?
Mr Thompson: It comes in part
from operators because the provisions of the Paris and Vienna
conventions provide that liability is channelled to nuclear operators,
so they have to take out insurance or other financial provision
to cover the cost in the event of nuclear accidents. Then there
is also a top-up provision which is provided by the states in
question under the Brussels convention.
Q12 Mr David: Have the Commission's proposals
had any implications for the possibility of the United Kingdom
or any other EU state reviving the nuclear energy option?
Mr Timms: It is certainly the
case that some of those who favour the legally binding approach
are in part motivated by seeing this as in some way providing
EU affirmation of nuclear energy. That is part of the motivation
behind the drive here. In terms of whether it affects what we
could do in the UK, I do not think it does. I do not think, for
example, that we would need to do very much to UK legislation
if the directive were to be agreed. It is really much more a question
of what are the most effective ways of assuring nuclear safety
in the enlarged European Union and our view is very clearly that
it needs to be crystal clear that this is a national responsibility.
I am certainly not aware of any direct impact on what we can do
in the future on nuclear.
Q13 Mr Connarty: Having read the documents,
I feel that there is something missing. In a post 9/11 situation
there seems to be absolutely nothing in these documents about
the nuclear security and the threat of targeting by terrorists.
I notice that Mr Robinson is in fact Director of Nuclear Safety
and Security. Is there a parallel discussion going on about how
to deal with the threat of terrorism and nuclear reactors?
Mr Timms: Clearly the concern
post 11 September is part of the backdrop to these discussions.
The question in our mind is: how can we best assure nuclear safety
throughout the European Union? Our view is that the non-legally
binding approach that we are promoting is the right way to do
that.
Mr Robinson: Let me start by making
clear that these proposals address safety and not security and
there is no formal parallel discussion going on at Community level
about nuclear security at this stage, although the Commission
is demonstrating an interest in the subject. To the best of my
knowledge they have no current intention to make any legislative
proposals on security. We take the view that nuclear security
is very much a matter to be dealt with at national level, it is
national security and that is how we are addressing it. That does
not preclude us and our security regulator from consulting as
appropriate with European and other counterparts, in particular
the United States. We do not see this as an area for Community
legislation, perhaps even more so than we do not see safety as
a proper area for Community legislation. I should finally say
that we have done a very large amount of work in the UK on nuclear
security since 9/11 and have taken a lot of measures to improve
security since then.
Q14 Angus Robertson: There is an issue
of concern in this Committee and elsewhere in the House, indeed
across the House, about the energy provisions within the draft
Constitutional Treaty for the European Union and in particular
Articles 113 on shared competence and III-157, which is the so-called
energy chapter. Those concerns are shared in oil and gas producing
areas, in the industry, the House's all-party group, indeed the
Foreign Secretary yesterday told the Standing Committee on the
IGC that the government's view was that there was an unacceptable
extension of competence in this chapter. Do you agree with the
Foreign Secretary that that is the case? Can you confirm whether
the Department of Trade and Industry asked the Foreign Office
to table an amendment at the appropriate meeting which was on
27 October this year?
Mr Timms: I do agree with the
Foreign Secretary and indeed the Prime Minister has spoken in
the House about the concerns we have about the current form of
the energy chapter as well. I should make it clear that we take
the view that bringing competence and energy together under a
single legal base does have benefits in terms of transparency.
So the fact that there is an energy chapter in itself is something
we are happy with, but it is essential from our point of view
that safeguards over protection of Member States' rights to organise
their own energy markets and supply are clear. We have suggested
a number of amendments in collaboration with the Netherlands.
Perhaps I should just set out what those amendments are: to ensure
that fiscal measures proposed under the energy chapter are subject
to unanimity, to enable Member States to retain control over the
exploitation of their natural resources such as oil and gas and
to reflect existing derogations which allow Member States to protect
security of energy supply in an emergency. You asked me about
the date on which those were tabled. That is not something I have
in front of me. I think I am right in saying that these particular
three amendments have been tabled quite recently following discussions
with the government of the Netherlands. Some proposals were put
forward by us on or about 27 October—I think I am right
in saying—although I think I am also right in saying there
was no substantive discussion at that stage about them.
Q15 Angus Robertson: That is interesting.
I have the 60 proposed amendments by different Member States on
various questions and there is indeed a proposed amendment in
the energy chapter but not from the UK. The reason I asked the
question about this particular meeting was that this was the appropriate
meeting on non-institutional issues where these were set to be
discussed. A lot of people are saying there is a great deal of
uncertainty about this key issue. I am asking: did the DTI put
forward an amendment at the appropriate meeting or not? It is
a pretty important question.
Mr Timms: We certainly did table
the changes which were appropriate at every appropriate stage.
In terms of exactly what happened on 27 October, that is not something
I have in front of me, although helpful inspiration has arrived.
I understand that our three concerns were raised before the 27
October and we submitted our text to the presidency. We have done
everything necessary to protect and maintain the UK interest in
this matter and, as the Prime Minister has said in the House,
we will continue to do so with every expectation of success.
Q16 Angus Robertson: I am confused. If
the UK put forward its concerns and an amendment at this stage,
why is it not in the presidency notes on amendments for the key
meeting on institutional issues on 27 October?
Mr Timms: I do not have that document
in front of me, so I cannot answer that question. I shall be very
happy to provide the Chairman with the details. I agree with Mr
Robertson about the importance of this, that we have been very
vigilant in protecting what we regard as essential UK interests.
We will continue to be very active on this and we are very optimistic
of the outcome.
Q17 Mr Cash: There is still time for
these matters to be resolved. It does not necessarily confine
itself to the question of oil and gas, vital as that is to our
interests: it is also other sources of energy, coal for example.
Would I be right in thinking that you referred to an amendment
which would effectively say that the nation states of Europe will
retain national control over their own resources and ownership?
If that was not what you said, would you go to the Prime Minister
or Foreign Secretary and say that is the amendment we want?
Mr Timms: It may be helpful if
I make available to the Committee our proposed amendments to the
energy chapter, so that everybody can see exactly what it is that
we propose. The amendments do indeed contain the following "Such
laws or framework laws shall not affect the right of a Member
Sate to determine the sources of energy within its territory to
be made available for exploitation and the manner of any exploitation
and its regulation". I think that meets the point Mr Cash
is raising, but I have a number of copies here, if the Committee
wants to look at them. [1]
Q18 Mr Cash: I do not need to declare
an interest as such, but I was the legal advisor in private practice
to UKAEA during the Petroleum and Submarine Pipelines Act in 1975.
I must say that the regulatory regime which was provided there
was based on assumptions about ownership in relation to the median
lines in international law and things of that kind. I simply ask
again, because the amendment you put forward does not seem to
me to be as explicit as I would have hoped for. I just ask you
once more, because you have not quite answered it. Would you be
prepared to go to the Prime Minister and the Foreign Secretary
and say you want an amendment, the effect of which is to guarantee
that the control and ownership of the natural resources of the
United Kingdom, including oil and gas, will be retained in national
control and ownership?
Mr Timms: No; I am satisfied that
the amendment we have proposed—which the Committee does
now have in front of it—does the job which needs to be done.
The key thing here is not to introduce ambiguity and uncertainty
and at a time when we are actually seeing a lot of very welcome
additional interest, particularly in the North Sea in the exploitation
of oil and gas. It is very important from the point of view of
the UK economy and is a very high priority for the UK Government
that we maintain the clarity of the arrangements and that people
do not start worrying that there will be some other agency which
will have a hand in licensing decisions in the future. That is
the motivation for us proposing the amendment that we have proposed.
I am confident it will do the job which is needed.
Mr Cash: Article III-157 emphatically
does not do that. It does not relate the question of the determination
of sources of energy to the arrangements which would be required
within a nation state for a nation state.
Q19 Mr Heathcoat-Amory: We have to get
to the bottom of this pre 22 October list. I asked a Parliamentary
Question about what amendments on non-institutional matters had
been submitted to the presidency and the answer I got did not
include energy. I was very surprised about this, given the concerns
of the industry which had been expressed. I think either in correspondence
or now the Minister must confirm on what dates he submitted all
these revised amendments. Getting on to the matter in hand, I
am glad he has confirmed that this is not a tidying up measure
and that there is a substantial new competence being claimed here
going beyond the existing treaty. There is a slight tendency for
the government to suppose that it is all there in the treaty and
all we are doing is clarifying it. I am glad at least that he
has confirmed that is not the case. My specific question is this:
even the amendments which he has now apparently tabled and which
he has helpfully provided us with just now do not include a lot
of the measures which the industry have been raising. They have
written to the government pointing out that other matters, specifically
boundary issues, the rights of the United Kingdom in respect of
third parties, the implication for treaty negotiations, particularly
on decommissioning, the award of petroleum licensing and the issuing
of consents and the use of infrastructure and a number of other
concerns could all come within the competence of Article III-157
and others and are not covered by the government's amendments.
Could you confirm that this is not exhaustive and they will attempt
either to delete the offending article completely, which the government
initially tried to do in the convention on the future of Europe,
or will extend their list of amendments to meet industry concerns?
Mr Timms: As I have said, we are
entirely happy about there being an energy chapter. We think actually
there is some merit in that because it makes transparent some
things which have been less clear up until now. In terms of what
the proposal actually does, the great difficulty is that it would
introduce a great deal of ambiguity because the wording as proposed
is not quite clear as to what the implications of it would be
and it would introduce uncertainty. Rather than introducing a
very clear shift of responsibility, as Mr Heathcoat-Amory suggests,
it introduces a lot of very potentially damaging uncertainty within
which people would not quite know what the position was. I can
say to him that we are talking; my colleagues and I have spoken
on a number of occasions to people in the industry about this.
My colleagues in other departments affected are speaking to industry
as well. I am very hopeful that we will reach an outcome which
the industry is satisfied with.
1 See appendix 1. Back
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