Independent regulator to monitor UAE nuclear power

| Oct. 10, 2010

When the UAE breaks ground on its first nuclear power plant, independent regulators will be there every step of the way, with the clout to halt work, approve construction materials, and decide whether it is ever switched on.

The powerful Federal Authority of Nuclear Regulation approved this week by Sheikh Khalifa, President of the UAE, is a key step in the development of a modern regulatory system insulated both from industry and political decisions, experts say. In a law issued last Sunday, the Government set the framework for "a fully independent" regulator, "which aims to oversee the nuclear energy sector in the state and to promote the highest standards of nuclear safety, nuclear security, and radiological protection".

Because of the potentially catastrophic consequences of a nuclear accident, it has become standard practice to create an independent regulator whose sole purpose is to question and inspect every step taken in the design, construction, and operation of a nuclear power plant. In many cases in western countries, regulators play a very public role, detailing how often plants are shut for safety reasons, for example, or soliciting public comment on the extension of operating licences.

The new entity will be funded through licensing fees paid by the nuclear operator, and members of the authority's board will be protected from dismissal if they make an unpopular decision. At the same time, the law seeks to prevent conflicts of interest by prohibiting board members and their families from having any business connection to the nuclear industry. "Board members are not allowed to be involved directly or indirectly in any regulated activity," said Hamad al Kaabi, the UAE's permanent representative to the International Atomic Energy Agency.

Experts say the creation of such a body in the UAE marks an important moment in the development of institutions, in a country where government's relationship with business has historically been defined by close personal ties. Dr Abdulkhaleq Abdulla, a political-science professor at UAE University in Al Ain, hopes the new entity will improve transparency. "The thing this country needs most is transparency, and the more transparent our regulatory agencies are, the better off we are," he says. "I think the public expects more openness, and more transparency about the operation, the goals [of the nuclear programme]."

The tough requirements enshrined in the new law were driven largely by international considerations, as the UAE sought to convince the international community of its peaceful intentions, says Justin Dargin, an expert on Gulf energy politics at the Dubai School of Government. "Even though it's a domestic and internal body, it firmly stands in the international arena," he says. "This regulatory body will be used as a type of example for the UAE to go out to the world and say 'look how we are constructing a peaceful nuclear sector'."

As part of that commitment, the law put in writing a pledge by the Government to forego the enrichment of uranium and import the fuel instead. Mr Dargin said the Government wants the international community to see a clear distinction between its approach and that of Iran, which is accused of using its civilian nuclear programme as a cover to develop nuclear weapons. But the creation of the new regulator could have far-ranging effects on the energy industry and the country's overall business culture, he says.

In the UAE's rapid development from a collection of tiny sheikhdoms to cosmopolitan trade centres, the relationship between government and business was based on the personal trust bestowed by the leaders and their trusted advisers, Mr Dargin says. Both business and government officials tended to eschew legal and bureaucratic structures in favour of an individual's reputation when they sought guarantees that a deal would be completed.

"It's heavily based on personality, who you know, and what your status is, even though you do also have a bureaucracy," Mr Dargin says of the UAE's business climate. "The population is so small so you can have this intimate way of conducting business." Although the country will probably retain a degree of intimacy in business, it has by necessity taken part in what Mr Dargin calls "the evolution of transparency that has been sweeping the world".

The precursor for the new nuclear regulator is the Regulatory and Supervision Bureau (RSB), an entity based in Abu Dhabi that was created in 1998 to regulate the power industry. The RSB was created at the same time that Abu Dhabi was looking to partially privatise its power plants. Like the nuclear regulator, it has been allowed full financial and regulatory independence, and benefited from stability in its legal structure, says Nick Carter, the director general of the bureau.

The RSB will maintain a role in the nuclear programme, regulating the transmission of the thousands of megawatts of power produced by the plants, he says. "We will be part of the regulatory process, and we are working very closely with the nuclear regulatory body to ensure full compliance beyond the factory gate," Mr Carter says. But whereas the RSB has often stayed out of the public spotlight, the new nuclear regulator will have the world's full attention and face constant international scrutiny, Mr Dargin says.

"I think they're going to do this right," he says. "Just based on the fact there are going to be people in the US and EU looking at every step the Government takes with the regulatory body." One of the biggest challenges for the regulator is the tough requirements on conflict of interest, says Dr Abdulla. The rationale behind the rules is that a member of the regulatory board should not have any monetary incentive to soft-pedal on safety requirements, for example, or benefit financially from the body's approval of certain materials.

But the Government has vowed to crack down on conflicts of interest before, with few results, Dr Abdulla says. "There are so many laws and regulations that try to stop conflicts of interest, but by the day we see it at all levels of the Government," he says. "I don't know how this new body is going to be immune from this." The new regulator will also need to groom Emiratis to take over key operation roles, so that day-to-day control of such a sensitive industry is not left to foreigners, Dr Abdulla says.

The growth of a fully independent regulator will take time, experts note. In the West, the modern regulatory system evolved after years of experimentation, Bill Borchardt, the executive director for operations at the US Nuclear Regulatory Commission, told a conference in Dubai earlier this year. "Nations that today have very well-established nuclear programmes did not always have what could be termed an independent regulator," he said. "History has shown very clearly the benefit of having an organisation that is solely focused on safety."

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For more information on this publication: Belfer Communications Office
For Academic Citation: Stanton, Chris. "Independent regulator to monitor UAE nuclear power." The National, October 10, 2010.

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