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“INTRODUCTION OF H.R. 4266” mentioning the U.S. Dept of State was published in the Extensions of Remarks section on pages E563-E564 on April 13, 2000.
The publication is reproduced in full below:
INTRODUCTION OF H.R. 4266; PROHIBITION ON UNITED STATES GOVERNMENT
LIABILITY FOR NUCLEAR ACCIDENTS IN NORTH KOREA ACT OF 2000
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HON. BENJAMIN A. GILMAN
of new york
in the house of representatives
Thursday, April 13, 2000
Mr. GILMAN. Mr. Speaker, today I have introduced H.R. 4266, the
``Prohibition on United States Government Liability for Nuclear Accidents in North Korea Act of 2000.'' I am pleased to be joined in offering this bipartisan legislation by a distinguished group of original cosponsors including, among others, the Ranking Democratic Member of the Subcommittee on Telecommunications, Trade, and Consumer Protection of the Committee on Commerce, Mr. Markey, the Chairman of our Subcommittee on Asia and the Pacific of the Committee on International Relations, Mr. Bereuter, the Chairman of the Committee on Armed Services, Mr. Spence, and the Chairman of the House Republican Policy Committee, Mr. Cox.
This bill prohibits the United States Government from, in effect, issuing insurance--backed up by the full faith and credit of the American taxpayer--for whatever liability claims might be made if the nuclear reactors that the Administration is trying to give to North Korea are involved in a catastrophic nuclear accident. The fact that the Administration is considering issuing such insurance was reported for the first time in yesterday's Los Angeles Times in an article by Jim Mann. I submit the Los Angeles Times article for the Record.
As explained in the article, the American taxpayer may ultimately be forced to pay tens of billions of dollars in damages if the North Koreans inadvertently create an Asian Chernoble with the advanced nuclear reactors that the Administration is seeking to give them. This is not an idle fear. The North Koreans have no experience whatsoever operating advanced light water nuclear reactors of the type the Administration plans to give them. The existing North Korean nuclear program involves graphite-moderated reactors operating on 1950s technology, with dials, levers, and vacuum tubes. The state of the art nuclear reactors that the Administration wants to give them are far more sophisticated than anything their technicians have ever seen.
This might not be a big problem if their technicians could be properly trained to operate modern light water reactors. But North Korea already has indicated that North Korean technicians will not be allowed to leave the country to receive such training on light water reactors currently operating elsewhere. Apparently the North Koreans are afraid their technicians will defect. Others fear, however, the result could be a Chernoble on the Korean Peninsula.
Among those who fear a possible nuclear catastrophe are the contractors who the Administration thought would be eager to participate in this $5 billion construction project in North Korea. The contractors are afraid that if there is such a catastrophe they might be sued, and the potential liability could bring down their companies. Ordinarily in such situations, companies buy insurance on the private market to protect themselves. In this case, however, the private insurers apparently have not been willing to provide sufficient coverage. This is in contrast to other countries like China, where U.S. and other private vendors have been willing to go forward on nuclear reactor projects because their concerns about liability have addressed by means short of an indemnity backed up by the United States Government.
I was surprised and alarmed to learn that the Administration is considering offering such an indemnity to contractors participating in the North Korean nuclear project. It has been five and a half years since the Agreed Framework between the United States and North Korea was signed. Over that period of time, there have been innumerable consultations between Congress and the Administration about the Agreed Framework. It is probably no exaggeration to say that Administration officials have testified before Congress dozens of times on the subject. The Administration is intimately familiar with our concerns about the potential costs of the project, and also with our unwillingness to provide U.S. Government funding for the construction of nuclear reactors in North Korea. Since 1994, Congress has routinely agreed to U.S. funding for the delivery of heavy fuel oil to North Korea pursuant to the Agreed Framework, but we have consistently prohibited U.S. funding for the construction of nuclear reactors.
Not once over the last five and a half years has the Administration come to us and told us they were considering imposing a contingent liability on the U.S. Government in connection with the construction of nuclear reactors in North Korea that could run into the tens of billions of dollars. Our staff had to ferret out this information through the conduct of congressional oversight, and most members of Congress first learned about it yesterday when they read about it in the press.
According to yesterday's press report, the Administration is considering imposing this liability on the American taxpayer by reinterpreting an old law in such way as to ensure that congressional approval will not be required. It is totally unacceptable that the Administration would consider obligating the American taxpayer in this way without the approval of Congress. The bipartisan legislation we are introducing today will make sure that the Administration cannot get away with this.
A Risky Policy On N. Korea
(By Jim Mann)
Warning to American taxpayers. Without knowing it, you may soon take on responsibility for what could be billions of dollars in liability stemming from nuclear accidents in, of all place, North Korea.
At the behest of the General Electric Co., the Clinton administration is quietly weighing a policy change that would make the U.S. government the insurer of last resort for any disasters at the civilian nuclear plants being built for the North Korean regime.
In case of a Chernobyl-type disaster in North Korea (a country not known for advanced safety procedures), the U.S. might wind up paying legal claims.
The proposed U.S. government guarantee, now being intensively studied by the State and Energy departments, would be aimed at easing the way for construction of two light-water nuclear reactors in North Korea. Those reactors are a key element in the Clinton administration's 1994 deal in which North Korea agreed to freeze its nuclear weapon program.
North Korea, which has defaulted on debts in the past, is too poor and unreliable to be counted on to pay legal claims arising from a nuclear accident. Private insurers are unwilling to take on the potentially astronomical claims of a North Korean Three Mile Island. So, American companies supplying parts for the North Korean reactors worry that, if there were a disaster, they would be sued.
Both the Clinton administration and GE confirmed that the company asked several months ago to be indemnified by the U.S. government before participating in the North Korea deal.
``We would like indemnity before we sign'' any contract, said a spokesman for GE, which makes the steam turbines that would be used in the project.
``If there's an accident, they [GE officials] have to understand on what basis they'd be covered,'' explained Charles Kartman, the State Department's special envoy for North Korea.
Kartman acknowledged that GE's request was unusual, if not unique: Other firms participating in the North Korea project have been willing to go ahead without the indemnity GE is seeking in hopes that the unsettled liability questions could be worked out over the next few years.
How will the Clinton administration go about granting new legal protection to GE? It is reluctant to seek a new law from the Republican Congress, which often has criticized the administration's policy of engagement with North Korea.
That roadblock has set administration lawyers scurrying through the U.S. code, and they have found an obscure law that might be used in a new way to cover GE.
This law--Title 85, Section 804--was intended to indemnify companies that took part in nuclear cleanup operations. But the State and Energy departments are now thinking of applying it to protect the firms participating in the North Korean civilian reactor project.
Presto! One little legal reinterpretation by the administration and one huge new legal liability for American taxpayers.
Not to worry, insisted Kartman. The idea that the U.S. government will ever have to pay these claims is ``very hypothetical.''
He noted that the parts for the North Korean reactors would not be shipped
But ask yourself this: If the proposed international accord Kartman describes is such a sure thing and the prospects of claims from a nuclear accident are so remote, why can't the Clinton administration persuade GE to go ahead without the indemnity it is seeking? Why does the U.S. Government, rather than GE, have to take responsibility for this supposedly hypothetical risk?
Viewed strictly from GE's self-interest, its request has a certain logic. GE is a relatively small player in the North Korea project; most of the work is being done by South Korean companies. The sale of GE's steam turbines will bring in roughly $30 million, yet the company fears it could face lawsuits ranging in the billions.
Why don't the organizers of the North Korea project simply do without GE and find another company more willing to take the risk?
They could. But doing that would require a redesign of the North Korea project, would lead to delays of a year or more and would increase the overall costs--most of which are being paid by South Korea. So, on the whole, everyone involved is eager to avoid losing the big American company.
For GE, it seems, the Clinton administration brings good things to life. The rest of us are left to pray that we don't get stuck with massive bills from nuclear plants we won't run in a country over which we have no control.
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SOURCE: PROHIBITION ON UNITED STATES GOVERNMENT LIABILITY FOR NUCLEAR ACCIDENTS IN NORTH KOREA ACT OF 2000
