• Mon
  • Nov 24, 2014
  • Updated: 11:25pm

HK not covered if Daya Bay reactor leaks, insurer warns

PUBLISHED : Sunday, 27 March, 2011, 12:00am
UPDATED : Sunday, 27 March, 2011, 12:00am
 

Who will pick up the bill for the impact on families and businesses of a serious leak of radioactivity from the Daya Bay nuclear power complex? No one - not your insurer, and not the Hong Kong government. And that won't do, says a leading insurance executive.

Anna Tipping, Asia-Pacific head of insurers Norton Rose, believes the government should copy Japan and set aside special reserves to cover personal claims for compensation in the event of a nuclear accident. And now is the time to do it.

Like many other jurisdictions which lie far from the fault lines in the earth's crust that trigger earthquakes, Hong Kong, just 50 kilometres southwest of the Daya Bay nuclear power complex in Guangdong, has made no such arrangement.

'The average man in the street is not covered if they get sick from radiation or if their home becomes contaminated from radiation,' she said.

'This is typically a worldwide position on the basis that nuclear consequences are catastrophic, both at a personal and economic level. This then is not a risk for the insurance industry to take but the government, in which case they will set up pools.'

The pool represents money set aside for specific catastrophic risks such as natural disasters, aviation calamities and terrorism.

Japan has a nuclear pool that covers primary exposure of civilians and businesses.

Waiting for something to happen before creating a pool would not work, said Singapore-based Tipping. 'You don't really want to set up a pool after the event,' she said. 'If there are nuclear facilities in a region or very close to a region then a pool should already be set up in that country.'

So what can Hongkongers do?

A Security Bureau spokesman said compensation claims by anyone within or outside China suffering radiation contamination caused by a nuclear incident 'can be lodged in China against the operators of the plants, the Guangdong Nuclear Power Joint Venture Company Limited or the Lingao Nuclear Power Company Limited as the case may be, both at Nuclear Power Building, Shennan Road, Shenzhen city, Guangdong'.

Tipping said it may not be that simple for people in Hong Kong.

'In Hong Kong, where the reactor is across the border, the city's officials may say that it's [the mainland's] responsibility when actually it's not,' she said. 'If you are civilians whose residence is affected by someone else's nuclear facility the local government still has to look after its own civilians.

'Considering Hong Kong's special position within China, this could cause major problems.'

Tipping said nuclear plants such as Daya Bay have been purposely built away from the mainland's major cities, but that if something were to happen at the complex Hong Kong would pay the price.

The city imports about 70 per cent of the Daya Bay power plant's output of 14 billion kilowatts of electricity per year. Six nuclear reactors built next to Daya Bay, at Lingao, help power Guangdong. Environmentalists describe these and other Guangdong nuclear plants as hidden bombs in Hong Kong's backyard.

Unlike the nuclear power plant in Fukushima, northeast Japan, that was crippled by the March 11 magnitude-9 earthquake and the 14-metre-high tsunami it triggered, the Daya Bay facility is not built on a fault line. Still, there are obvious dangers.

The nuclear industry uses a 'defence in depth' approach - having backups for backup systems - but disaster and human error overwhelmed those systems in Japan and pushed the Fukushima reactors to the brink of a nuclear meltdown.

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