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Economic gain before disarmament

November 12, 2016

November 12, 2016

 

Japan’s Nuclear Industry Finds a Lifeline in India After Foundering Elsewhere

http://www.asahi.com/ajw/articles/SDI201611122242.html

 

By JONATHAN SOBLE/© 2016 The New York Times

TOKYO--Despite objections from anti-nuclear campaigners, Japan’s government cleared the way on Friday for companies that build nuclear power plants to sell their technology to India -- one of the few nations planning big expansions in atomic energy -- by signing a cooperation agreement with the South Asian country.

The deal is a lifeline for the Japanese nuclear power industry, which has been foundering since meltdowns at the Fukushima Daiichi power plantin northeastern Japan in 2011. Plans to build a dozen new reactors in Japan were canceled after that, a gut punch for some of the country’s biggest industrial conglomerates, including Toshiba and Hitachi.

With the domestic market moribund, Japanese companies had been pursuing deals abroad, but success was elusive.

The economic case for nuclear energy has weakened as a result of low oil and gas prices, prompting utilities and governments around the world to rethink construction. The Fukushima disaster increased safety concerns. And Japanese vendors have had to fight lower-cost rivals from places like Russia and South Korea for a shrinking number of customers.

India looks like a rare opportunity. It is planning 20 new reactors over the next decade or so, and as many as 55 more have been proposed. Shinzo Abe, the Japanese prime minister, and Narendra Modi, his Indian counterpart, are hoping that trade can underpin a broader strategic relationship, aimed in part at fending off China.

The nuclear deal has nonetheless drawn criticism in Japan. India possesses atomic weapons and has kept itself outside the international legal framework against proliferation. Because of that, many in Japan, which was hit by two nuclear bombs in World War II, would prefer not to establish ties with nuclear power.

Left-leaning Japanese newspapers have published editorials against the Indian deal, and the mayors of Hiroshima and Nagasaki, the bombed cities, have issued pleas to stop it. Formal negotiations by the two governments lasted six years. Other countries have already begun allowing nuclear-related exports to India, including the United States, which signed a similar accord a decade ago.

“There was a huge outcry when the government first said it would pursue this” in 2010, said Masaaki Fukunaga, a professor at the Center for South Asian Studies at Gifu Women’s University in Gifu, Japan, who has followed the issue closely. “The industry and the government were determined.”

Abe said Japan had reserved the right to stop nuclear exports if India conducted another nuclear weapons test.

“There is a legal framework to ensure India’s responsible and peaceful use of technology,” he said.

Japanese leaders say they are looking to support more than just the nuclear industry. National economic growth may be at stake. As Japan has become less competitive in sectors like consumer electronics, big industrial projects are being counted on to fill the gap.

In addition to the nuclear accord signed Friday, Abe and Modi agreed to explore plans to build additional high-speed rail lines in India based on Japan’s Shinkansen bullet-train technology. Construction on a previously agreed line from Mumbai to Ahmedabad will begin in 2023, the leaders said. Japan will help finance the project with low-interest loans.

Japan’s push to become a global infrastructure powerhouse has had setbacks. Vietnam’s legislature scrapped plans in 2010 for a Shinkansen train line, citing costs, and is reportedly close to canceling plans for a proposed Japanese-built nuclear power station. Indonesia chose a Chinese group’s bid last year to build a high-speed rail line over a Japanese bid that had been considered the favorite.

South Korea underbid Japan to win a contract to build the first nuclear reactors in the United Arab Emirates. And Tokyo Electric Power, owner of the ruined power station in Fukushima, pulled out of a bid to build and run a nuclear power station in Turkey. A Japanese-French consortium ultimately won the Turkish contract in 2013, after a strong diplomatic push from Abe, but it remains the only successful Japanese nuclear-plant sale since the Fukushima accident.

The bet on India is no sure thing. Nuclear plants can take decades to plan and build, and proposals to develop them are vulnerable to political and economic shifts. The Indian government must find new locations for some proposed plants because of local protests. And even for countries that have already signed nuclear trade agreements with India, little actual business has materialized so far, in part because of an Indian law that opens hardware vendors to potentially unlimited liability claims in the case of accidents.

India has been working with the United States and other countries to create a framework for minimizing vendors’ liability risk, including the creation of a domestic accident compensation fund. Officials hope to complete it next year.

If that hurdle can be overcome, the first Japanese company to benefit from the agreement with India will most likely be Toshiba, whose U.S. subsidiary Westinghouse has won conditional approval to build six reactors in India. Westinghouse uses components from Japan, including reactor-containment vessels built in Japanese steelworks, so the deal signed Friday is essential to moving forward.

Toshiba needs the boost. It acquired Westinghouse in 2006 for $5.4 billion, a princely investment upon which it was struggling to earn a return, even before Fukushima. Investigators examining a $1.2 billion accounting scandal at Toshiba last year concluded that managers had inflated revenue figures at the company in large part to cover up the poor financial state of its nuclear power business.

(Nov. 11, 2016)

Japan-India pact puts economic gain before disarmament: critics

 

http://www.japantimes.co.jp/news/2016/11/12/national/politics-diplomacy/japan-india-pact-puts-economic-gain-disarmament-critics/

 

Kyodo

The government signed a controversial civilian nuclear cooperation pact with India on Friday, disappointing A-bomb survivors and other opponents of the deal who believe Tokyo has placed economic gain ahead of its stated goal of global nuclear disarmament.

The pact opens up a massive market for Japan’s nuclear energy industry, which suffered a huge setback from the March 2011 Fukushima disaster, and falls in line with Prime Minister Shinzo Abe’s infrastructure export-focused growth strategy.

But opponents argue that India, which tested nuclear weapons in the 1970s and 1990s, could end up using technology obtained through the pact for military purposes. India is a nonsignatory to the Nuclear Non-Proliferation Treaty.

The government has downplayed the concerns, saying strictly peaceful use of the nuclear technology is ensured by provisions stating Japan that can terminate the pact if India breaks its 2008 promise to maintain a moratorium on nuclear testing.

“(The pact) matches with our country’s stance to promote nonproliferation and a world without nuclear weapons,” Abe told a joint news conference Friday after the deal was signed in Tokyo at a meeting with Indian counterpart Narendra Modi.

“(It) will ensure India will take responsible action regarding the peaceful use of nuclear energy,” Abe said.

But the mayors of Hiroshima and Nagasaki, which were devastated by atomic bombs in 1945 in the closing stages of World War II, said the deal defies the will of the Japanese people.

Nagasaki Mayor Tomihisa Taue called the pact “extremely regrettable.”

“Nuclear-related technology and nuclear material could be diverted to development of nuclear weapons,” Taue said in a statement. “I have concerns the NPT regime could be hollowed out.”

Hiroshima Mayor Kazumi Matsui issued a similar statement, saying he remains concerned about possible diversion of nuclear materials and technology for military use.

Matsui also urged the Abe government to pressure India to join the NPT as soon as possible so the South Asian country will end its nuclear weapons development.

The deal hinged on a compromise by Tokyo, which walked back its demand for a guarantee that India would not resume nuclear testing, according to a source close to the negotiations, which began in 2010.

Japan had long demanded an explicit provision stating that the deal is off if India restarts nuclear tests, but this was dropped at the last minute, apparently out of consideration for India’s reluctance to renounce its nuclear capabilities in the face of border disputes with both China and Pakistan.

Critics say the pact is unprincipled and driven only by the lure of the 1.3 billion-strong Indian market. They say it sullies Japan’s mission to rid the world of nuclear weapons as the only country in history to have come under nuclear attack.

The government is “only thinking about immediate profit,” said Takeshi Yamakawa, 80, who is a member of an anti-nuclear group in Nagasaki.

So Horie, a 76-year-old hibakusha, said that exporting nuclear technology to India is the “coercive selling of unhappiness” and shows that the government is “prioritizing the economy.”

The decision to sign the pact with India also spurred anger among the people displaced by the 2011 Fukushima nuclear disaster, including 67-year-old Fukushima Prefecture resident Haruko Kanai.

“I don’t want another restart of nuclear power plants … I don’t want (nuclear technology) to be sold,” she said.

As China’s growing influence in the Asia-Pacific region extends to its economic push in India, analysts say Abe is keen to counter with infrastructure investment, including nuclear energy.

China has poured money into port facilities in India and its neighbors on the Indian Ocean, which are close to sea lanes Japan relies on for its oil imports from the Middle East.

The opening of the Indian market is welcome news for Japan’s nuclear technology firms, whose domestic market ground to a halt after the Fukushima disaster was triggered by a powerful earthquake that spawned a massive tsunami.

The Federation of Electric Power Companies of Japan, an electric utility lobby, stressed the importance of Japan “using its experience to make a contribution to the world, on the basic premise of the peaceful use of nuclear energy.”

Tightened safety guidelines and legal fights, along with public safety concerns, have delayed the government’s push to put its shuttered reactors back into service. Vietnam also recently scrapped plans to build its first nuclear reactors due to budgetary concerns. Some of the contracts had been awarded to Japanese concerns.

For India, whose economy grew 7.6 percent in 2015, the pact may help it meet its urgent need for stable power. With more than 300 million people in India living without electricity, the country aims to increase the proportion of nuclear-generated electricity from 2 percent now to 25 percent by 2050.

Standing next to Abe in Tokyo Friday, Modi said India’s economy is “pursuing many transformations.”

“Our aim is to become a major center for manufacturing, investment and for 21st century knowledge industries, and in this journey we see Japan as a natural partner,” he said.

 

 

 

 

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