Trust Law in the Atomic Era: Lessons from Fukushima
Likely to be of a surprise to most readers, Canada has a law on the books governing, among other things, policy and financing with respect to the disposal of nuclear waste. The purpose of the federal Nuclear Fuel Waste Act (the “NFWA”) is to “provide a framework to enable the Governor in Council to make […] a decision on the management of nuclear fuel waste that is based on a comprehensive, integrated, and economically sound approach for Canada.”
The intersection of trust law with the NFWA occurs with respect to how the purpose and the goals of the act are to be financed. Section 9 of the NFWA provides that every “nuclear energy corporation” must maintain a trust fund with a duly incorporated financial institution, the purposes of which are described in greater detail below. The following entities are defined as a “nuclear energy corporation” under the NFWA:
- Ontario Power Generation;
- New-Brunswick Power Corporation; and
- Atomic Energy of Canada Limited.
When the NFWA came into effect, each nuclear energy corporation was required to make a substantial initial deposit into its respective trust fund, and each must make a minimum annual deposit of a prescribed amount to the capital of the trust. To provide some context, the largest trust fund is that maintained by Ontario Power Generation. At its inception, OPG was required to make an initial contribution of $500,000,000.00 to its fund, and its minimum annual levy is $100,000,000.00.
The NFWA provides that the corporations may only make withdrawals from their respective funds for the purposes of implementing a plan selected by the Governor in Council to “[avoid or minimize] significant socio-economic effects on a community’s way of life or on its social, cultural or economic aspirations.” In layman’s terms, the nuclear energy corporations must use the capital of their respective trusts exclusively for the purposes of ensuring the nuclear waste is managed and disposed of in an efficient and comprehensive manner while minimizing the social impact.
Control and management of all aspects of nuclear power generation is top of mind in the wake of the Fukushima nuclear disaster in 2011. We may all hope the capital of the trusts established under the NFWA continue to be used for their intended purpose rather than to fund clean-up efforts in the event of a similar tragedy. However, consider that the most recent financial statements for all of the aforementioned trust funds list a total combined balance of approximately $4 billion. Now consider that some have estimated the total cost of cleaning up and containing the waste and fallout from the Fukushima disaster as exceeding $626 billion. A drop in the proverbial bucket, to be sure. Indeed, the magnitude of the Fukushima incident likely far surpassed any reasonable expectations, though it gives us pause to consider whether we are giving nuclear power the deference it deserves.
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