P 190411Z SEP 08
FM AMEMBASSY BEIJING
TO SECSTATE WASHDC PRIORITY 0002
INFO DEPT OF ENERGY WASHINGTON DC
DEPT OF COMMERCE WASHDC
NSF WASHDC
NSC WASHDC
SECDEF WASHDC
AMEMBASSY MOSCOW
AMEMBASSY NEW DELHI
AMEMBASSY PARIS
AMEMBASSY TOKYO
AMEMBASSY SEOUL
USEU BRUSSELS
CHINA POSTS COLLECTIVE
AMCONSUL HONG KONG
NRC WASHDC
AIT TAIPEI 7069

UNCLAS BEIJING 003625 
 
 
STATE FOR OES/SAT, EAP/CM, ISN/MDSP AND T, AND FOR ISN/NESS R. 
DELABARRE, P. COMELLA 
USDOE FOR INTERNATIONAL/FREDRIKSEN, YOSHIDA, BISCONTI, AND BALLOU 
USDOE FOR NNSA/BAKER, BLACK, SCHEINMAN, BIENIAWSKI, HUIZENGA, AND 
KROL 
USDOE FOR NE/SPURGEON AND MCGINNIS 
USNRC FOR ROSALES-COOPER 
USDOC FOR 4420/ITA/MAC KASOFF 
TOKYO FOR DOE ATTACHE CHERRY 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ENRG KNNP TPHY PREL CH
SUBJECT: NUCLEAR LIABILITY ISSUES IN CHINA; CSC ACCESSION LIKELY TO 
TAKE SOME TIME 
 
REF: A. 2008 State 94537 
 ¶B. 2008 State 94977 
      ¶C. 2008 Beijing 2863 
 ¶D. 2008 State 54213 
 
 
¶1.  (SBU) Summary and Introduction.  Per ref A, DOE China Deputy 
Office Director and ESTHoff on September 12 and 16, 2008, led a 
group of nuclear industry experts to discuss nuclear liability 
issues and the United States May 2008 ratification of the Convention 
on Supplementary Compensation for Nuclear Damages (CSC) with China's 
newly established National Energy Administration (NEA) and the China 
Atomic Energy Authority (CAEA), respectively.  (Note: The CSC was 
established in 1997 to provide a single treaty regime for nuclear 
liability; to date, four countries have ratified the convention. 
End note) NEA official Qin Zhijun, noting that China is paying close 
attention to nuclear liability issues in general, had invited 
officials from the three major nuclear power companies to join the 
September 12 NEA meeting.  Qin noted ,however, that China's 
accession to the CSC would need to follow implementation of a new 
Atomic Energy Law (AEL), on which discussions are not scheduled to 
even begin until after the new Energy Law is passed sometime next 
year.  Dong Baotong, Director General of the Systems Engineering 
Department of CAEA, agreed that waiting until the AEL is approved by 
the National People's Congress woul delay accession to the CSC for 
a long time.  DG Dong said that he personally believes China should 
accede to the CSC before the AEL is considered, as it would be 
easier to draw up implementing legislation for the CSC than to 
complete and pass an entirely new AEL, though there are many 
obstacles to this approach as well.  DG Dong suggested that the 
United States and China take additional measures to promote the CSC, 
including bilateral meetings with other countries (including Japan 
and South Korea), and calling for IAEA member states to join the CSC 
at the next IAEA General Conference (GC) and Board of Governors 
(BOG) meeting.  End summary. 
 
NEA Still Filling Ranks; Just Listening Now 
------------------------------------------- 
 
¶2.  (SBU) Qin Zhijun, formerly Director of the Power Division at the 
National Development and Reform Commission (NDRC), noted that China 
places high importance on civil nuclear liability issues, as 
evidenced by the State Council's issuance of Guo Han 64 in 2007. 
(Note: Guo Han 64, an official letter from the state council, was 
drafted with input from Westinghouse and the State Nuclear Power 
Technology Corporation (SNPTC) prior to the signing of the 
Westinghouse AP1000 contract in July 2007.  It includes some 
stipulations that coincide with the CSC, such as channeling 
liability to the operator and putting civil claims under the 
jurisdiction of a single court system.  Guo Han 64 also stipulates 
that the nuclear liability issue will be included in the new Atomic 
Energy Law when it is concluded.  End note.)  Qin had invited 
representatives from the three major Chinese nuclear power 
corporations - China National Nuclear Corporation (CNNC), Guangdong 
Nuclear Power Corporation (GNPC) and SNPTC - to join him for this 
discussion of the CSC.  Qin indicated that he would rely on their 
expertise as China deliberates the CSC and upcoming AEL. 
 
¶3.  (SBU) Because the NEA, which is responsible for managing the 
drafting of the Energy Law, is currently being stood up, Qin noted, 
there will be some delay before the law can be completed.  In fact, 
most positions at the NEA remain unfilled, and Qin himself has not 
yet received an official title, other than that he is in the Power 
Department.  (Note: Qin is the only person at the NEA or NDRC who is 
knowledgeable at a technical level on nuclear issues.  He is a 
trained nuclear engineer, and will likely be the key person for 
 
 
developing future nuclear power programs.  End note.)  The NEA will 
also be responsible for input to the new AEL.  Work on the AEL will 
not begin until the Energy Law is passed. 
 
CAEA Offers to Work Towards Broader CSC Accession 
--------------------------------------------- ---- 
 
¶4.  (SBU) Dong Baotong, Director General for Systems Engineering at 
CAEA said that personally he thought that China should accede to the 
CSC first, and then pursue the AEL, since the latter will take much 
more time.  DG Dong, China's long-time representative on the 
International Nuclear Liability Experts Group (INLEX) at the IAEA 
and an expert on the CSC, believes that it would be quicker and 
easier for China to write implementation legislation following 
accession to the treaty than to wait until the AEL is drafted and 
passed.  However, DG Dong noted that there are two obstacles to that 
approach: (1) China's liability limits are insufficient to meet the 
CSC's threshold; and (2) the statute of limitations under China's 
Law on Civil Procedures does not match those required by the CSC. 
Dong noted that the second obstacle is the greatest challenge. 
 
¶5. (SBU) Moving forward, Dong suggested that the United States 
encourage other countries to join the CSC at the upcoming IAEA GC 
and BOG.  Since the United States is actively encouraging other 
countries to follow suit, China will hold bilateral meetings with 
other countries, including Japan and South Korea, most likely on the 
margins of the upcoming IAEA GC, to discuss the CSC, Dong said. He 
also noted that CAEA will review the agenda of CAEA's bilateral 
meeting with the United States at the IAEA GC to see if there is 
enough time to discuss CSC issues. DG Dong stated that he would 
report on the results of this meeting to CAEA Chairman Chen Qiufan. 
(Comment: Although DG Dong is personally in favor of quick accession 
to the CSC, his ability to actually convince the Chinese bureaucracy 
is probably limited.  The State Council already set in motion the 
path through the AEL in Guo Han 64.  Any plan to bypass this, no 
matter how creative, is unlikely to gain traction.  However, we 
should endeavor to maintain close contact with Dong on this, as he 
is an eager ally.  End comment.) 
 
CAEA Reorganization Update 
-------------------------- 
 
¶6.  DG Dong also provided an update on CAEA's structure due to the 
ongoing reorganization.  Chairman Chen, recently officially 
designated as CAEA Chairman, also holds the positions and titles of 
Chairman on the State Administration of Science Technology and 
Industry for the National Defense (SASTIND) and Vice Minister of the 
Ministry of Industry and Information Technology (MIIT).  DG Dong 
noted that the Department of Systems Engineering consists of four 
Divisions: the Division of Nuclear Reactors, Division of Nuclear 
Fuel (Note: Possibly Division of Nuclear Fuel Cycle.  End note), 
Division of Nuclear Emergency and Nuclear Safety, and the Division 
of International Cooperation.  (Comment: As Director General of 
Systems Engineering, Dong is in charge of the day to day activities 
of CAEA.  According to ref C, CAEA and CNSA (China National Space 
Administration) are now officially the first and second systems 
engineering departments of SASTIND.  End comment.) 
 
RANDT 
 
 
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