SEPTEMBER 1995 · VOLUME 16 · NUMBER 9

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N U C L E A R   P O W E R   P U S H E R S

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SYDNEY -- WITH A DE FACTO MORATORIUM on new nuclear reactor orders in place in many Western countries, the nuclear power industry is desperately seeking new markets, particularly in developing countries. Although Taiwan, China and South Korea are still expanding their nuclear programs, they are not placing enough orders to sustain the nuclear construction industry. And so the nuclear industry has turned its sights elsewhere in the Third World, especially to Indonesia, the largest potential new market.

"We will build 12 nuclear power plants, with the first coming on line in 2003," Iyos Subki, of the Indonesian National Atomic Energy Agency (BATAN), told the Ninth Pacific Nuclear Basin conference last year. "Nuclear power is a necessary part of an energy diversification policy in which we hope to reduce domestic oil consumption and promote other energy sources."

Companies from Canada, Japan, the United States and France have put forward proposals to build Indonesia's nuclear plants. The two leading contenders that have emerged are Mitsubishi and Westinghouse, which are submitting a joint bid. Mitsubishi, struggling to get new orders in Japan, is counting on offshore markets to see it through the next decade, when it hopes sales will improve back home. With 80 percent of Indonesia's aid coming from Japan, the company is optimistic about its chance of getting the Indonesian order. For its part, Westinghouse has set up a nuclear engineering school in Jakarta as part of its efforts to win the Indonesian government's approval.

With a rapidly growing economy, Indonesian planners insist that nuclear power is vital to the country's future.

Estimates of how much energy Indonesia will need vary greatly. Critics say that claims by Western utilities that massive energy use is an inevitable byproduct of economic growth have proven false.

"Another Chernobyl"

Agus P. Sari is an independent Indonesian environmentalist and energy expert who has written extensively on the issue. "I think that we really have to assess what the needs are with independent specialist advice." Agus told a regional meeting of environmental and aid groups in Japan in 1993. "At present, there are too many competing interests from the coal, oil and nuclear industry to get a clear picture of what's really needed."

Like many environmentalists, Agus advocates energy conservation and efficiency before the building of new power plants. Then, he says, "We should look at what renewable energy we have available. It is estimated that geothermal energy, which Indonesia has a massive amount of, could easily offset the 7,000 megawatts of electricity the nuclear plants will produce."

Mitsubishi and Westinghouse have said that they can build safe and reliable plants that will deliver electricity at competitive prices. Community groups, academics and religious leaders are skeptical.

"People here fear another Chernobyl," says a resident of Ujung Watu, a village on the Muria Peninsula, the proposed site of the first two plants. The resident says that people are scared to voice their fears. Speaking on the condition of anonymity, he says that, "a number of people who live here have publicly expressed their concerns, and have been taken to the local police station for questioning. Only those living in the big cities are really free to discuss the issue."

Jakarta-based WALHI, Indonesia's largest environmental coalition, has entered the debate in a low-key and non-confrontational way. WALHI is distributing educational leaflets on the risks of nuclear power at regional centers such as universities and libraries.

"We suspect this issue will be decided at an elite level," said Mohammed Anung, WALHI's nuclear campaign coordinator, "but we still feel that the public needs to be informed so that they can take part in this discussion if the opportunity arises."

Calls for an open public debate on the nuclear question have already come from some powerful quarters. Abdurrahman Wahid, the leader of Indonesia's Nahdlatul Ulama's, a massive grassroots Islamic organization, says, "This matter must be debated, it is a key issue for Indonesia. There is a risk to human life from this industry. This must be considered."

The Indonesian government, sensitive to domestic criticism, is also concerned about international scrutiny of its plans. Environmental groups from Japan, Malaysia, the Philippines, Thailand, Australia and the Netherlands have offered to help Indonesian groups challenge the nuclear plans.

Of major concern for many groups is that the reactors will be built on a seismic fault line at the base of a dormant volcano. The site proposed is in the center of Java, an island that is home to 110 million people. If a Chernobyl-scale accident were to occur, critics fear the scale of the damage and the evacuation that would be required.

Mitsubishi claims that, as a Japanese company, it is experienced in building earthquake-resistant reactors. For some, that claim seems less convincing in the wake of the Kobe disaster, which completely destroyed many allegedly quake-proof structures.

"Although we have experienced several accidents/incidents, the nuclear power industry has generally maintained a good safety record in the world," says a report Mitsubishi submitted to an industry seminar in Indonesia in 1994. "In Japan, Mitsubishi has been working to maintain a high level of safety in nuclear power comparable with that of other large scale industrial technologies."

Major accidents notwithstanding, there are also troubling questions about what to do with the highly radioactive spent nuclear fuel that the reactors would generate. Environmentalists say there is no ecologically acceptable method of radioactive waste disposal. There have been rumors that Indonesia will use one of its uninhabited islands as a disposal site.

"That seems a little foolish, given the seismic risk," an anonymous Australian government official says. "We certainly wouldn't approve of them taking that avenue."

"Technological colonization"

Many regional groups want to keep South East Asia free of nuclear reactors. At a major peace conference in Kuala Lumpur, Malaysia held in August 1994, a Singapore delegate said, "When I see the smoke from the forest fires in Indonesia, I think of how easy it would be for radioactive contamination to reach my home."

The involvement of Westinghouse -- which built a nuclear reactor in Bataan, the Philippines, that was beset by cost overruns and construction problems -- has sullied the reputation of the project in the region. Environmentalists and organizations in the Philippines are already actively working with Indonesian opponents to prevent the nuclear program from going ahead. "We fought government plans to open a nuclear power here. We don't want it built next door in Indonesia. Jakarta's plans to build a reactor put the whole region at risk," says Father Edwin Gozon, a Catholic priest whose parish covers the site of the Philippines nuclear plant.

One regional actor who has sought to play down public concerns about the Indonesian nuclear program is the Australian government. A document from the Department of Foreign Affairs and Trade, leaked to Australian environmental groups, glossed over many concerns about the plants. In addressing the issue of seismic risk, the document notes that "all modern reactors are designed to withstand severe seismic activity" and "the probability of an accident producing even a small release of radioactivity to the atmosphere is extremely low."

Australia government support stems in part from the fact that, despite its non-nuclear power policy, the country supplies uranium to some of the world's biggest nuclear utilities. Australia would find it embarrassing to challenge nuclear power plants close to home when its uranium fuels nuclear plants around the world. Australian uranium mining companies have already hosted visits by BATAN officials, with a view to possible contracts early in the next century. Australia also plans to sign a Nuclear Science and Technology Cooperation Agreement with Indonesia. To date, the details of the agreement are being kept under wraps and it will not be debated in the Australian Parliament. Foreign Affairs officials concede that critics might see the agreement as a legitimization of Indonesia's nuclear plans.

Apart from environmental concerns about the nuclear reactors, critics are challenging the operational and financial structures of Indonesia's plans. One worry is Indonesia's technical ability to operate nuclear reactors.

"Indonesia doesn't really need nuclear power; it's an extremely expensive and difficult technology which even technologically advanced, wealthy Western countries have had real problems with. It's dishonest of these countries to allow a technology to be built in Indonesia which has failed or is now rejected in their own country," says Dr. Paul Brown of the University of New South Wales, Australia. "There are real questions as to whether Indonesia has the technical infrastructure needed to adequately support the industry," he says.

BATAN officials say that, given the necessary training, their personnel can cope with large-scale reactor programs. They point to the millions of dollars already invested in the Serpong nuclear research center, outside Jakarta.

A paper submitted by BATAN to last year's regional nuclear seminar acknowledged that more technological training is required. The paper recommends that "a manpower development programme should be planned and implemented among relevant organisations at the earliest stage of the nuclear power project because of the long-lead time in developing qualified manpower."

Brown disagrees. "It's not in the nature of these [nuclear] companies to hand over all their expertise and technical knowledge. It will be Japanese and American engineers and technicians who oversee this project. This is a form of technological colonization."

Indonesia must either depend on another country's technical support or face the risk of using home-grown expertise. Jakarta appears to accept that, for some time to come, it will have to rely on overseas companies for nuclear back-up.

The high cost of power

The government has said each reactor will cost $2 billion at today's prices. While working for Applied Systems Analysis, energy consultant Bill Keeping estimated that the price of a large reactor is $3 billion and that this cost will continue to rise in the future.

The capital financing plan for the first two reactors is to be met by Mitsubishi, Westinghouse or both under a Build-Own-Operate-Transfer (BOOT) scheme. The reactor will only be fully signed over to Indonesian utilities once the builders recoup their capital costs through electricity sales.

"This will put a high risk on shareholders in these companies," says Asako Hama, a Japanese activist who is campaigning in Tokyo to stop reactor sales to Indonesia. "What will happen if the plants don't work? Who will accept the financial liability? Who will provide an alternative energy source? There is a rumor that the Japanese Export-Import Bank will guarantee the loan. Why should Japanese taxpayers subsidize these companies?"

Hama, who lived in Java for 12 years, is primarily concerned about the environmental threat. "I truly love Indonesia, and I do not want to see them saddled with this dangerous nuclear technology. I do not believe them [the nuclear companies] when they say there will not be an accident."

Whatever the argument over the risk of a major nuclear accident, the financial risk may prove more difficult to calculate. BOOT, while gaining popularity for fossil fuel plant ventures, lacks a track record in the nuclear field. In the event of a technical problem leading to a prolonged shutdown, it is not clear who would be liable for repairs. If there were a large-scale accident, many ask who would pay for radioactive fallout damage. To date, the International Atomic Energy Agency's committee reviewing the liability regime has not come up with an internationally accepted formula.

When the Indonesian government takes control of the reactors, they will be 15 to 20 years old, a mature age for nuclear plants. The government will get limited additional service out of the reactors before having to bear the substantial cost and risk of decommissioning them.

These are matters that Indonesian academic George Aditjondro, currently at Murdoch University in Perth, Australia, thinks should be discussed as part of a wider development issue in Indonesia. "It's part of a push to get new technology, particularly certain Western technology, without thinking through the environmental consequences," he says.

Whether Indonesia's nuclear plans proceed depends on many factors. The World Bank has said that nuclear power is the last energy option that Indonesia should explore. Even B.J. Habibie, Indonesia's research and technology minister and the man behind the current push to build the reactors, was recently reported as saying that nuclear power will be given "the lowest and last priority" over other energy sources. Last year, the Indonesian Environment Minister Sarwono said he did not expect to see nuclear power in Indonesia in his lifetime.

President Suharto, who has previously given unconditional support to the project, has urged caution. "We have various energy alternatives, and with good planning we must increase their utilization, such as hydro energy and wind power that are abundant," he told a May 1995 mining and energy conference in Jakarta. "We are aware of big risks in using nuclear energy, especially if it leaks. Therefore, we need to study very closely the experiences from other countries in nuclear power use."

Jakarta's enthusiastic view of nuclear power may be fading. This gradual recognition of the technology's environmental and financial risks may prove too powerful for even Mitsubishi and Westinghouse to overcome.