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U.S. firm sheds liability for Canadian nuclear peril Add to ...

One of the world's largest nuclear plant suppliers has ordered its Canadian division to hermetically seal itself off from its U.S. parent, going so far as to forbid engineers at the U.S. wing from having anything to do with Canadian reactors.

The move by GE Hitachi Nuclear Energy is spurred by concerns about liability - if an accident at a Canadian plant spreads damage across the border, Americans might be able to sue the parent company. The result is a Canadian company cut off from the technical advances of its parent, a leading player in the industry.

The company also won't allow any equipment built or designed by the U.S. parent to be used in Canadian reactors for the same reason.

The efforts of private sector companies in the nuclear industry to shield their finances from the risk of atomic accidents aren't well known. GE Hitachi revealed its precautions earlier this month at a parliamentary committee reviewing a bill that proposes raising insurance coverage for victims of a nuclear power plant mishap to $650-million from $75-million.

GE Hitachi favoured the increase, saying the existing insurance level is so low it believes U.S. judges would scoff at it and allow U.S. courts to hear lawsuits seeking damages in connection with accidents that happened across the border.

That would put GE, with annual revenue of $180-billion (U.S.), at risk of becoming a juicy target for liability lawsuits if components from the U.S. parent company were found to be involved in causing the incident. "From a shareholder point of view, that's a big concern," Peter Mason, president of GE Hitachi's Canadian arm, said in an interview.

GE Hitachi said is not acting to isolate its Canadian subsidiary beyond the legal protections usually provided by separate incorporations because nuclear accidents are likely. "The nuclear industry has got a great track record," Mr. Mason said, adding that the company's steps have been driven by legal advice and not by Canadian reactor safety concerns. "You sit down with any lawyer and they paint the worst-case scenario, which I think is what environmentalists do as well," he said.

But Shawn-Patrick Stensil, a spokesman for Greenpeace, said the company's internal assessment of its financial risks has to be linked to the odds of an accident. "If they're that scared that they need to hermetically seal the branch plant here in Canada because they're worried about an accident, it shows they believe it's a realistic possibility," he asserted.

In addition to isolating the Canadian branch to protect itself legally, GE Hitachi - along with Babcock & Wilcox Canada Ltd., another major nuclear supplier, and Bruce Power, the operator of two nuclear stations in Ontario - urged the federal government at the hearings to sign the Convention on Supplementary Compensation for Nuclear Damage. It is an international pact ratified by the U.S. that stipulates legal jurisdiction for a nuclear incident lies only in the courts of the country where the accident occurs.

If Canada were to ratify the convention, it would free companies from cross-border liability worries by preventing U.S. victims of Canadian nuclear fallout from suing over it in their own courts, and preclude Canadians from doing likewise in Canada over damages from a U.S. nuclear station mishap.

Fallout from any accident would be most likely to cross the international boundary along the shores of the Great Lakes, which have 10 U.S. and five Canadian nuclear generating stations.

Mr. Mason said worries over liability were among the reasons GE Hitachi was unwilling to submit a bid on building a new nuclear station under a recent request by the Ontario government. He said Canada isn't the only country it avoids because of liability concerns. It won't sell in China for the same reason.

 

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