Cablegate: Egypt's Nuclear Regulatory Law to Be Enacted But

P 231415Z DEC 09

C O N F I D E N T I A L CAIRO 002361


E.O. 12958: DECL: 12/16/2019

Classified By: Counselor for Economic and Political Affairs Stephen P. O'Dowd for reasons 1.4 (b) and (d)
1. (C/NF) Main points: -- Egypt's draft law on regulation of civil nuclear power and safety is expected to pass into law shortly after the New Year. -- Egyptian Atomic Energy Authority (EAEA) Chairman Mohamed El Kolaly told us December 15 that under the new law his agency will be succeeded by an independent regulatory entity reporting directly to President Mubarak. -- Nuclear Power Plants Authority (NPPA) Chairman Yassin Ibrahim previously told us that the draft law does not adequately treat the issue of civil liability nor does it give sufficient weight to nuclear safety. New Law to Be Enacted Soon --------------------------

2. (C/NF) EAEA Chairman El Kolaly told Econoff December 15 that a draft law on regulation of civil nuclear power and safety calls for the creation of a new independent regulatory entity, the Radioactive and Nuclear Activities Control Authority (RNACA). The RNACA will report directly to President Mubarak and its head will be appointed by presidential decree. El Kolaly said he expected the law, passed by the Shura on December 13, to be enacted shortly after the New Year. El Kolaly and his staff offered nothing more specific on the impact of the new law. (Note: EAEA is the main organization responsible for overseeing nuclear power technology development in Egypt. The NPPA and the EAEA currently report to the Minister of Electricity. End note.) Uncertainly Over Law's Likely Effects -------------------------------------

3. (C/NF) NPPA Chairman Ibrahim had earlier expressed to Econoff his uncertainty over how much control the NPPA will have over nuclear power decisions and administration under the new nuclear regulatory legislation. He indicated that the independent nuclear regulatory authority called for in the draft law (RNACA) will be responsible for oversight of the NPPA, but added that many key elements in the draft law are "unclear." He claimed that the legislative review of the bill was a purely cosmetic exercise and stressed the urgent need for nuclear safety to be made an overriding priority in the regulation and management of Egypt's nuclear power development.

4. (C/NF) Ibrahim also expressed concern that the issue of civil liability needed to be more effectively addressed. He noted that the government would need to guarantee unlimited civil liability in order to attract the necessary investment and foreign expertise. Notes on Text of Draft Law --------------------------

5. (C/NF) According to a partial translation of the nuclear draft law obtained by post, the functions and oversight of the new regulatory entity, the RNACA, are described in general terms. Key issues appear to have been left for implementing regulations or other later measures to resolve; for example: -- Although Article 51 gives RNACA comprehensive nuclear licensing authority, Article 7 states that ministries controlling civil aviation, interior affairs, foreign affairs, the Suez Canal, General Intelligence, and the EAEA, will have equal responsibility for protecting radioactive materials within their purview, with specific powers and functions to be set via regulations to be issued at an unspecified time by the Prime Minister. -- Under Article 17 the RNACA head is to be appointed by the President, while the qualifications and ministerial affiliation of a majority of the RNACA's Board of Directors are unspecified. -- Article 10 appears to create a large exemption from radiation safeguards requirements for unnamed future licensees. -- Article 11, on standards for facility licensing, states only that parties operating a nuclear facility must have "management and quality assurance programs." -- Article 21 puts the annual budget under the control of the Prime Minister, with no provision for public or legislative review or inquiry. -- Article 19 provides for RNACA personnel pay and regulations to be set by the Prime Minister with no apparent reference to rules governing other GOE employees. -- Articles 2, 3, and 25 state all nuclear and radioactive activities must be "peaceful," and that all "natural and juristic persons" (i.e., all non-governmental entities) are banned from nuclear waste or weapons-related research or activity. -- Article 79 provides for the Prime Minister to set up a Supreme Committee to manage nuclear emergencies; Article 80 includes a long task list for the as-yet unformed Supreme Committee, while subsequent articles constitute a crisis management task list for RNACA itself. -- A detailed license fee schedule is set out in Article 34, one of the few areas in which the law's drafters made specific provision for the regulator's operating environment. -- Although there are in several references to the importance of international law to RNACA's setting of Egyptian licensing standards, there is no international treaty, convention, or code cited or incorporated by reference anywhere in the draft law. Comment --------

6. (C/NF) Our conversations with Ibrahim and Kolaly suggest a lack of clarity in the new law on authority over nuclear regulatory oversight as well as some potential gaps in critical areas such as nuclear safety. The new nuclear regulator's attempts in the coming year to establish and consolidate its mandate and gain control of resources may result in major turf and policy struggles among GOE entities with a stake in control of or access to nuclear fuel, power, or technology. Scobey

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