A Few Observations, Questions and Comments on the MOU

Dr. Najmedin Meshkati

Institute of Safety and Systems Management

University of Southern California

Los Angeles, California

December 22, 1995

Observation 1: One of the "Principles" (# 8) of the MOU declares: "The recognition of the fact that the responsibility for nuclear safety lies exclusively with the operating state.." (emphasis added) [Understandable, given the political sovereignty of operating states.] However, the right to ascertain that all aspects of a comprehensive nuclear safety program (and culture) are considered by the operating state should lie with the international community. Concerned international entities which would suffer collectively in the case of a nuclear disaster like Chernobyl are also stakeholders in this process. Because, succinctly put: a nuclear accident anywhere is a nuclear accident everywhere.

Fact 1: According to the International Atomic Energy Agency (IAEA), "the (Chernobyl) accident can be said to have flowed from deficient safety culture, not only at the Chernobyl plant, but throughout the Soviet design, operating and regulatory organizations for nuclear power that existed at the time....Safety culture ... requires total dedication, which at nuclear power plants is primarily generated by the attitudes of managers of organizations involved in their development and operation" (The Chernobyl Accident: Updating of INSAG-1, 1992).

Question 1: Is it not precisely because of this fact -- lack of the safety culture at Chernobyl and its operating state at the time of the accident -- that the G-7 and the international community have become involved in this project now? Has the safety culture of the nuclear industry in the former Soviet republics, e.g., Ukraine, improved enough during the last ten years to warrant entrusting them the responsibility for nuclear safety? If the answer to the last question is yes, then we need to know how this improvement was achieved and how we can independently verify it. If the answer is no, then the premise and validity of one of the MOU's building blocks -- Principle # 8 -- is questionable.

Suggestion 1: The dormant, inherent safety problems of many nuclear power plants in Central and Eastern Europe are analogous to the 'resident pathogens' within the human body, which combine with various triggering factors (e.g., stress, toxic agencies) could bring about a disease. Some of these plants have not failed yet, probably because either they have not been given enough time, or because the concatenation of events needed for any failure, has not yet occurred. Due to the complexity and unknown nature of these safety pathogens, conventional safety practices are no longer capable of offering effective prognosis. Possibly, either their effectiveness may have reached a saturation level, or safety in this context, i.e., a field of science and practice, needs an overall paradigm shift in dealing with nuclear power technology and operation. Nevertheless, safety personnel of these plants (and countries), like small town physicians trying to diagnose and cure AIDS, are neither equipped nor in a position to solve the problem individually, no matter how educated or how dedicated they may be. They need to tackle it collectively with an institutionalized approach and share their findings. Nuclear safety specialists in Central and Eastern Europe need a supporting, centralized think-tank research staff to unravel the unknown, develop implementation policies, and disseminate findings. This, of course, is a collaborative effort which needs active participation of the nuclear safety community in the West.

Fact 2: A complex and not so well-understood cause of incidents and accidents at nuclear power plants derives from human and organizational factors. Human performance is of vital importance to the reliability of nuclear installations around the world; a 1985 U.S. NRC study of Licensee Event Reports suggested that upwards of 65% of U.S. commercial nuclear systems failures involve human error. The critical role of human and organizational factors-related causes in the Chernobyl accident is captured in the following statement which has appeared in the conclusion of the IAEA's Summary Report on the Post-Accident Review Meeting on the Chernobyl Accident (1986): "The root cause of the Chernobyl accident, it is concluded, is to be found in the so-called human element....The lessons drawn from the Chernobyl accident are valuable for all reactor types."

Question 2: It is not enough only to declare, in the context of nuclear safety in the MOU, "the necessity of the continuous promotion of a high level of nuclear safety" (Principle # 4). What are the essential elements, areas, or issues in the continuous promotion of nuclear safety, and how are they prioritized? Who determines them and makes all these decision? Local politicians (in operating states), managers of financial institutions, or consultants?

Fact 3: Experience has shown that if the above is left to local politicians, they would be interested only in those aspects of nuclear safety, the 'pork barrel' projects, which could further enhance their popularity with their constituencies; managers of financial institutions would primarily be concerned with the cost effectiveness and return on investment, and would, therefore, resort to 'cherry picking'; and consultants would identify only those projects with which they are most familiar, i.e., those for which they have in-house experience, expertise or can find a convenient joint venture.

Suggestion 2: Organized international efforts, such as the G-7 project, should, as much as possible, explicitly spell out and ensure the inclusion of all needed aspects of safety improvements (such as the emphasis on human and organizational factors) of nuclear power plants in Central and Eastern Europe.

Observation 2: You rightly included "safety improvements and completion of Khmelnitsky # 2 and Rovno # 4" in the Revenue Generating Projects section of Priority Projects.

Question 3: But why is there a blank cell in the table on the Attachment 1, i.e., no IFI and Euratom Loan Financing for this very important activity? Is it not precisely because of safety problems of Chernobyl and their disastrous consequences, that international financial institutions are involved here? In other terms, is safety not the raison d'Étre of their involvement in this project -- either for mitigating effects of lack of safety in the past or for improving the safety in the future? Can it be due to the fact that international financial institutions, such as the World Bank Group (IBRD, IDA, IFC, & MIGA) or the European Bank for Reconstruction and Development (EBRD), are not fully convinced yet that investing in, or lending to safety improvement projects are sound business decisions which would eventually generate revenue? Or is it because they are not yet considering this type of lending as a part of their traditional business?

Fact 4: The World Bank, as the largest lending institution financing development in the world, has even a more sensitive and pivotal role than before -- particularly when it comes to financing environmental restoration or energy generation projects. When considering financing energy-related projects, the World Bank and its sister organization, the EBRD, should expand their focus to include projects' safety aspects, in addition to potential for revenue generation and its financial risks. Because a)- there is a synergy between productivity, safety, and environmental considerations, particularly for technological systems which use hazardous material in their processes; and b)- a productive and profitable production process is generally considered to be one that is well managed, performs to specification, and is operated in a controlled manner without harming personnel, damaging property, creating waste, or causing undue shutdowns. Based on my experience and research, the collective impact of these factors on "resource productivity" will be much higher and, therefore, projects' outcome will be even much more certain and pronounced. [For a thorough analysis of this issue, please refer to Professor Michael Porter's seminal article, "Green and Competitive," in the Harvard Business Review (October 1995).]

Suggestion 3: Of course, financing the efforts for improving the safety of nuclear power plants around the world is a monumental task which requires a systematic approach and an institutionalized resource mobilization. The institutions which would presumably lead this effort are the World Bank and EBRD. However, presently they are neither equipped nor capable of accomplishing their new global mission, essentially because of role ambiguity and structural problems. The traditional mission of these multilateral lending organizations is to finance economic development project, such as in agriculture, education, or supporting macroeconomics projects, e.g., the Sector Adjustment Lending (SAL).

Thus, international financial institutions should be sensitized, convinced, and re-directed. Of course if it requires redefining their focus and mission statements, the G-7 should initiate a top-down process via exercising their member state' oversight right and prerogative. [In the case of the World Bank, Executive Directors from the G-7 countries that make up the overwhelming majority of the shareholders of the Bank and whose vote is therefore decisive, can easily carry the day on this issue.]

Suggestion 4: In addition to the IAEA, the Global Environment Facility (GEF) can and should be re-directed by the G-7 to participate in nuclear safety and environmental restoration related efforts, after broadening its rather narrow mission and making the necessary structural adjustments. [The GEF, presently, is a program of grants to assist developing countries to deal with environmental problems that transcend borders in four areas: global warming, pollution of international waters, destruction of biodiversity, and depletion of the ozone layer. The GEF is jointly implemented by the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP) and the World Bank.] Broadening the GEF's activities to include nuclear safety-related issues is quite consistent with its present mission which addresses "environmental problems that transcend borders." Does fallout from nuclear accidents not transcend borders? The GEF is already an operational entity, has the commitment and participation of U.N. agencies, as well as the World Bank. However, presently, the GEF is underutilized. By addressing safety-related issues, the newly reconfigured Global Safety and Environment Facility (GSEF) will certainly be much more effective, because of the foregoing synergy between safety and environmental considerations in large-scale hazardous industries.


As I mentioned in my testimony before the U.S. Commission on Improving the Effectiveness of the United Nations, in order to ensure the safety of nuclear power plants around the world, we need much greater commitment, communication and active cooperation among those who could make these systems safer -- the member states' governments and regulatory agencies, international financial institutions, international specialized agencies, reactor manufactures, plant managers, operators, unions, and concerned research communities.