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Too little is known about firms with nuclear ties, critics say

March 31st, 2009

Martin Mittelstaedt, Globe and Mail (Canada)
February 8, 2006

The federal government is licensing companies to handle dangerous nuclear materials that have both peaceful and military uses without knowing who ultimately owns the businesses.

Nuclear critics say the fact that the Canadian Nuclear Safety Commission, the federal watchdog agency, does not know the identity of owners of the companies it oversees is a major blunder, given the high-security risks presented by nuclear materials and the potential costs of any accident involving radioactive releases.

If problems were to arise at a company licensed to use radioactive material, the government should know who owns the business, Dave Martin, an energy analyst at Greenpeace, said.

“Understanding the ownership is part of understanding [a company's] capability, their economic viability, and ultimately that could have environmental and health impacts as well as business impacts,” he said.

Mr. Martin noted that there has been a “history of problems” at nuclear facilities, and he is worried that companies might dodge their environmental responsibilities.

But the federal regulator ensures only that a company is legally incorporated to do business in Canada; that is where its scrutiny stops.

The Nuclear Safety and Control Act “does not require that the commission obtain shareholder information from a licensee,” Pascale Bourassa, a spokeswoman for the CNSC, said in an e-mailed statement to The Globe and Mail.

Some of the businesses the CNSC regulates are household names because they are government electric utilities or are large publicly traded companies that must disclose major shareholders under securities law. But others are privately held and little information is available about them.

The lack of routine checks on the ownership of nuclear companies came to light during a hearing into a licence renewal for SRB Technologies (Canada) Inc., an Ontario company allowed to handle radioactive tritium.

The transcript of the hearing indicates regulators were unaware of who owned the Pembroke company, which makes glow-in-the-dark signs and is privately owned through corporations based in Holland and a Caribbean tax haven.

SRB is regulated by the commission because it uses tritium, a radioactive gas that can also be used to boost the explosive power of nuclear weapons. At the hearing, the regulators were trying to determine if the company, which has been operating in Canada since the early 1990s, could get the financial guarantees needed to cover the costs of cleaning up its factory when it closes.

The CNSC has been pressuring SRB to reduce its emissions, after discovering the company had underestimated contaminant releases by about 90 per cent around its factory in the Ottawa River community, as well as discovering that groundwater more than a kilometre away has become radioactive.

According to the transcript of the SRB hearing, regulators were in the dark about who owned the company.

SRB president Stephane Levesque was asked who owned it and he identified a Dutch holding company whose owners “are throughout the world in various countries.”

“So do you confirm that the company is owned by a Dutch holding company ultimately?” CNSC commissioner James Dosman asked.

“Yes, it is,” Mr. Levesque replied.

Mr. Dosman said he asked the question to determine if the parent company had the resources to help SRB get a financial guarantee for its decommissioning plan, which is currently being developed.

Nuclear regulations require companies to have cleanup plans and financial guarantees to make sure their facilities do not release harmful radiation after they close. Decommissioning plans for many licence holders include multimillion-dollar guarantees, but no amount has been fixed for SRB.

Despite seeking information on SRB’s shareholders, Ms. Bourassa said in an interview that the CNSC did not make further inquiries into SRB’s ownership.

A Globe and Mail review of the holding company, Amsterdam-based Sarodel Investments B.V., found it is a small company with about 500,000 euros (about $680,000) in assets and no individual shareholders. According to Dutch corporate records, Sarodel is owned by a company in the Netherlands Antilles, a tax haven. After the hearing, the government issued SRB a restrictive one-year licence; among its conditions is a requirement that the plant pump emissions up its smokestacks with enough force to ensure that any radioactivity disperses widely and does not build up around the site.

The CNSC also concluded, based on assurances from SRB, that once it is allowed to resume full operations next fall “it should be in a financial position to put the required decommissioning financial guarantee in place,” according to a regulatory document issued in late January.

Ms. Bourassa said the commission believes it can demand ownership information from companies under a general rule that it has the authority to request any data relevant to a licence application.

Unlike regulatory requirements in the United States, the Canadian watchdog doesn’t require routine notification when a company’s ownership changes.

Tritium Awareness Project