Nuclear Energy Insight
Winter 2012—Major global companies involved in the export of technology for nuclear energy facilities recently agreed to a voluntary code of conduct, with more participants expected to sign on over time. The nuclear power plant exporters’ Principles of Conduct include such practices as ensuring countries receiving the exports are party to the International Atomic Energy Agency’s Convention on Nuclear Safety and the Convention on the Physical Protection of Nuclear Materials. The rules will also ensure exporters abide by the high standards in the IAEA Fundamental Safety Principles. The principles have been adopted by companies based in Canada, France, Japan, Russia, South Korea and the United States.
George Perkovich, director of the Nuclear Policy Program at the Carnegie Endowment for International Peace, researches nuclear strategy and nonproliferation, with an emphasis on South Asia and Iran and on justice in the international political economy.
Q: The Nuclear Suppliers Group includes countries that seek to contribute to the nonproliferation of nuclear weapons through the implementation of guidelines for nuclear exports and nuclear-related exports. How do the principles of conduct take the Nuclear Suppliers Group’s guidelines further?
Perkovich: First, the principles were developed by companies, not states, as was the case with the Nuclear Suppliers Group. NSG has been focused only on nonproliferation criteria. The principles were developed by [nuclear energy] vendors and include concepts that go way beyond nonproliferation to include safety, environmental stewardship and compensation in the case of an accident. The purpose of the principles of conduct is not to deny exports but rather to promote a culture of social responsibility in the distribution and management of nuclear power plants. The principles compose a much more comprehensive picture.
Q: How can the U.S. create a commercial nuclear trade framework that allows trade to grow, while ensuring sensitive weapons technologies do not spread?
Perkovich: The principles set a common bar or standard for trade in nuclear power plant technologies. It’s in everyone’s interest that there is a common floor of best practices in this trade. You want to prevent a race to the bottom. ... With the principles of conduct, exporting companies voluntarily agree to require the sorts of capabilities and practices set out by the IAEA and other internationally recognized expert bodies.
Q: Who enforces this or makes sure companies comply? Is it only self-enforced?
Perkovich: The first line of assurance is that each CEO has committed in writing to uphold these principles and each company is establishing internal implementation procedures. Second, it’s a public document. If the public has questions, they can raise them. It’s a public scorecard. We also have a review process where we can present any questions about implementation and vendors will need to explain how they are upholding the principles, and their competitors will be there to evaluate whether they are serious or not. The fourth layer of incentives is provided by potential financiers and insurers. We know from other industries that have voluntary codes of conduct that bankers use participation in such codes in their due diligence evaluations. It’s likely that lenders and insurers in the nuclear power plant sector would want to know whether the corporation they would be financing and insuring has volunteered to abide by these principles of conduct.
The Principles of Conduct are at: http://carnegieendowment.org.
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