R 240854Z SEP 08
FM AMEMBASSY SEOUL
TO SECSTATE WASHDC 1747
AMEMBASSY BEIJING
AMEMBASSY TOKYO
DEPT OF ENERGY WASHDC

UNCLAS SEOUL 001894 
 
 
E.O. 12958: N/A 
TAGS: IAEA ENRG TRGY AORC KNNP KS JA CH
SUBJECT:  KOREA SEES VALUE IN THE CONVENTION ON SUPPLEMENTARY 
COMPENSATION FOR NUCLEAR DAMAGE, BUT VIEWS CHINA AS THE KEY TO 
RATIFICATION 
 
REFS: A. STATE 86056 
  ¶B. STATE 54213 
 
¶1.  Summary:  In a September 19 meeting with ESTHOFF and U.S. 
nuclear power industry representatives, officials of Korea's 
Ministry of Education, Science and Technology (MEST) agreed in 
principle that the Convention on Supplementary Compensation for 
Nuclear Damage (CSC) was a constructive framework for lessening the 
risks of liability in the case of a nuclear power plant accident, 
but they demurred on speedy ratification of the treaty for two 
reasons.  First, they wished to consult with China and Japan, 
expressing a preference to joining the CSC in tandem with those two 
countries, rather than joining on its own.  Ministry officials said, 
"China is the key."  They said they would discuss the issue with the 
Chinese at a previously scheduled meeting in November. Second, MEST 
officials said they needed to discuss internal legal and legislative 
hurdles, which would take time to resolve.  Industry representatives 
and ESTHOFF also met with Ministry of Knowledge Economy (MKE) and 
Ministry of Foreign Affairs and Trade (MOFAT), but they deferred to 
MEST as the experts on the topic. End summary. 
 
¶2.  On September 19, ESTHOFF accompanied Omer Brown of Contractors 
International Group on Nuclear Liability (CIGNL) and Ramsey Coates, 
General Counsel of Westinghouse, along with local representatives of 
Westinghouse and GE Korea, to meetings with MKE, MOFAT and MEST. 
The officials at MKE and MEST were briefed on the CSC and asked 
pertinent questions.  The Director of MKE's Nuclear Power Industry 
Division expressed some concern that countries vary in their 
vulnerability to accidents not only because of differing 
technologies but also in the way they regard safety issues.  Neither 
MKE nor MOFAT officials, however, delved deeply into the CSC; 
instead, they told the U.S. interlocutors that MEST was the 
authoritative ministry on the subject. 
 
 
China's Role is the Key 
----------------------- 
¶3.  The meeting at MEST went nearly 30 minutes longer than the one 
hour originally scheduled. The meeting was chaired by Chung Heum-soo 
of Nuclear Emergency Division of MEST's Atomic Energy Bureau. 
Several technical experts from MEST, as well as Kim Sang-won of the 
Korea Institute of Nuclear Safety, participated. 
 
¶4.  The meeting at MEST began with the same formal questions and 
answers that had characterized the earlier meetings with MKE and 
MOFAT, but when CIGNL's Mr. Brown mentioned that he had just 
returned from China where the Chinese had appeared interested, but 
non-committal, a lively discussion in Korean ensued among the 
Korean-speaking participants.  The Koreans then emphasized that 
China was key to the CSC.  If Korea joined the CSC alone, they said, 
it would be meaningless; even if Korea and Japan joined together, it 
would be meaningless.  They made clear that it was not that they 
felt a need to follow China's lead, but rather that China's 
participation in the CSC was necessary for the terms of the treaty 
to be effective in Northeast Asia.  They felt a coordinated approach 
by Korea, Japan, and China to be the best way forward.  To that end, 
although they did not propose an advocacy role for Korea, the 
Koreans suggested they would put the issue on the agenda of a Joint 
Committee meeting already scheduled between MEST and the China 
Atomic Energy Agency in November.  They also said they would engage 
with the Japanese about the CSC at the earliest opportunity. 
 
An Internal Legal Hurdle 
------------------------ 
¶5.  The Koreans also explained a legal/legislative hurdle that would 
need to be overcome before it could ratify the CSC.  Currently, they 
said, the Korean Hydro and Nuclear Power Company (KHNP) purchases 
insurance for up to USD 50 million for liability for damages ensuing 
from a nuclear power plant accident.  Although under Korean law, the 
KHNP would still be liable for any damages above USD 50 million, no 
legislation is in place to make the state liable in the case of 
KHNP's default.  The MES officials said the government assuredly 
would step in to pay for damages if KHNP was unable to do so (KHNP 
is a government agency), but through which agencies and under what 
processes this would occur has not yet been discussed internally. To 
meet the conditions of the CSC, Korea would need to amend its 
legislation to specify government liability, they said, and this 
could necessitate the involvement of Parliament. 
 
¶6.  The Koreans acknowledged Mr. Brown's assertion that the Special 
Drawing Rights fund under the CSC would come into play if damages 
exceeded Standard Drawing Rights (SDR) 300 million and that purchase 
of additional insurance for up to SDR 300 million would be the 
simplest way to solve the problem.  But purchase of the additional 
insurance, they estimated, would cost USD 7 to 8 million annually - 
"not a small amount."  The Koreans said that internal government 
discussions on this issue would be necessary before they could 
commit to joining the CSC.  Because the discussions would be complex 
and involve other government agencies, MEST officials said they 
would take time. 
 
 
 
¶7.  The Koreans also told ESTHOFF that the CSC ought to be an agenda 
topic for the U.S.-Korea Joint Standing Committee on Nuclear Energy 
Cooperation (JSCNEC) to be held in Seoul in October.  The draft 
agenda the Koreans submitted earlier had omitted the CSC.  They 
asked if the U.S. side planned to push for speedy Korean 
ratification of CDC.  ESTHOFF and Mr. Brown replied that although 
there was no deadline for ratification, the U.S. hoped that Korea, 
as well as Japan and China, would join the CSC as quickly as 
possible. 
STEPHENS 
 
 
NNNN