Four big reasons not to sell uranium to Ukraine

18 April 2016, Independent Australia

As the 30th anniversary of the Chernobyl disaster approaches, Noel Wauchope outlines just a few compelling reasons why the Coalition Government’s uranium deal with Ukraine may have further disastrous consequences.

WHAT AMAZINGLY insensitive timing. As the anniversary of the Chernobyl nuclear catastrophe approaches, Australia makes a deal (at the Nuclear Security Summit) to sell uranium to Ukraine.

This is such a bad idea for so many reasons — it’s hard to know which to pick first!

Economics: simply because uranium exporting is not really economically worthwhile.

Chernobyl’s plight: because Ukraine’s Chernobyl radioactive disaster is continuing. (We supplied uranium for that other catastrophe — Fukushima.)

Insecurity: Ukraine’s dangerous nuclear industry due to civil war, ageing reactors, risks of smuggling and terrorism.

Political crisis: Ukraine’s notoriously corrupt and unstable political regime.

Let’s check those four reasons.
Economics

The global uranium industry is in a declining state. Price reporting companies describe repeated low and falling uranium prices. Australia’s uranium industry now accounts for 0.2 per cent of national export revenue — and that’s not counting profits that go overseas, due to the high degree of foreign ownership of companies mining uranium in Australia.
Chernobyl’s plight

The 30th anniversary of Ukraine’s Chernobyl nuclear accident is on 26 April 2016. Ukraine is still suffering from, and struggling with, the legacy of that radioactive catastrophe. The conservative World Health Organisation (WHO) estimates the radiation caused deaths at 4,000 — based on its report ‘Health Effects of the Chernobyl Accident and Special Health Care Programmes’. The 2016 TORCH (The Other Report on Chernobyl) Report amplifies this discussion (summary here) but all sources agree that no conclusive figure can be given.

The legacy of the accident includes the struggle to contain the radioactivity of the shattered reactor.

Ukraine seeks international funds to complete its new concrete tomb being built over the reactor, the old cover having decayed to an unsafe state. The reactor itself is still too contaminated for workers to approach. Removal of radioactive materials there will begin only after the new confinement structure has been finished. But experts believe that it will contain radioactivity for only 30 years .
Insecurity

This issue of nuclear security is another irony in this uranium sales deal. Julie Bishop and Ukraine President used the meeting of the Nuclear Security Summit in New York to discuss the sale. The focus of the Summit was the need to protect radioactive materials from dangerous zones, and from the risk of terrorists obtaining them.
You couldn’t pick a more dangerous zone than Ukraine

Ukraine’s Zaporizhia nuclear facility is Europe’s largest and is only 200 kilometres from the conflict zone in eastern Ukraine. Already there have been sabotage events that affected its nuclear programme.

All of these events have led to an additional emergency shutdown of the electrical network of two units at thermal power plants – the Dnieper and Uglegorskaya – and the emergency unloading by 500 MW of nuclear power plants in Ukraine. This includes Zaporozhskaya NPP and the South Ukrainian NPP. I want to stress that such emergency unloading of a nuclear plant – it is very dangerous. ~ Senior Ukrainian energy official Yuriy Katich.

Some commentators have described nuclear plants in the region as pre-deployed nuclear targets and there have already been armed incursions during the recent conflict period.

Bankwatch recently listed 10 reasons why Ukraine’s nuclear power stations are a security danger for Europe. These include Ukraine’s ageing reactors – some already having exceeded their planned lifespan – and restrictions on the nuclear regulator’s ability to inspect reactors. Bankwatch regards Ukraine as a huge financial risk to Europe:

The European Commission, the European Parliament, and EU governments – particularly in neighouring countries that could be affected by the Ukrainian government’s reckless nuclear adventure – need to demand Ukraine complies with its international obligations, especially when EU public money is involved.

Petro Poroshenko’s Government is responding to Bankwatch’s criticism with a lawsuit against Bankwatch’s member group National Ecological Centre of Ukraine (NECU), in an attempt to silence criticism and avoid public scrutiny. Organisations in five European countries have joined in a campaign for transparency about Ukraine’s nuclear programme.

Even Ukraine’s own Progress Report to the Nuclear Security Summit admits some safety problems, listing over 1400 sources of ionising radiation that are not under regulatory control.

Ukraine now has a messy and competitive nuclear power system, in which Western companies AREVA and Westinghouse compete in marketing and upgrading nuclear reactors and lobby to sell nuclear fuel. But Russia actually controls the fuel supply, providing nuclear fuel to 13 out of Ukraine’s 15 reactors.

Ukraine is just next door to Moldova, the heart of a 2014 nuclear smuggling gang. With Ukraine’s secretive nuclear arrangements, and inadequate regulatory system, the possibility of theft of radioactive materials is a real one in Ukraine.
Political crisis

If you thought that Ukraine’s nuclear regulatory regime was dubious, what about its political regime?

Many see corruption as Ukraine’s greatest danger. Russia was notorious for its oligarchs, but to some extent they were held in check. Not in Ukraine, where oligarchs appropriated government money to become very wealthy, using some of their wealth to buy politicians and set up a “convenient’ political system.

Oligarchs are reported to control 70 per cent of the state’s economy. The country has been described as a “cleptocracy” —with so much intrigue amongst corrupt politicians and oligarchs that it’s called “Ukraine’s Deep State”.

President Petro Poroshenko himself is a very successful businessman, whose business assets have increased over the past year. Before the last election, Poroshenko pledged to sell his company Roshen but now refuses to do so. He also owns a major TV channel. His private assets are larger than those of any other European leader. Poroshenko is currently involved in a real estate scandal.

Along with lawmaker and business partner Ihor Kononenko, Poroshenko is co-owner of the International Investment Bank. Kononenko is accused of being involved in a laundering scheme that moves money from Ukrprominvest (a group founded by Kononenko and Poroshenko) to the British Virgin Islands through offshore companies Intraco Management Ltd and Ernion. Economy Minister Aivaras Abromavicius, who worked to expose political corruption, resigned in disgust on 3 February, saying:

“Neither me nor my team have any desire to serve as a cover-up for the covert corruption, or become puppets for those who, very much like the “old” government, are trying to exercise control over the flow of public funds”.

Aivaras claimed that Prime Minister Mr Yatsenyuk and Mr Poroshenko were blocking reforms aimed at tackling corruption.

Ukraine Prime Minister Arseniy Yatsenyuk resigned suddenly on 11 April, under pressure from Poroshenko, who has replaced him with close associate, Volodymyr Groysman. Several reformers from Ukraine’s previous government are departing after declining to serve under Mr Groysman.

The West is watching the Ukrainian regime carefully. The IMF has been providing a $17.5 billion support scheme to cash-strapped Ukraine but has put it on hold, due to the corruption and instability of the regime.

Early this month, the Netherlands held a referendum regarding a potential Ukraine-EU treaty on closer political and economic ties. A whopping 61 per cent (2.509 million people) voted against Ukraine’s association with the EU. European nations, as well as many Ukrainians share in loss of confidence in the government, following this referendum as well as revelations of scandals in the Prosecutor General’s Office.

All this concern came to a head with the revelations of the Panama Papers, in which President Poroshenko figures largely. Unlike Iceland’s President, Poroshenko has no intention of resigning. The West has been very quiet about the allegations against him — presumably they support anyone who is opposed to Russia’s Putin.

Poroshenko claims that his financial arrangements have all been legal. But not everyone agrees with that. Igor Lutsenko, a member of Verkhovna Rada, Supreme Council of Ukraine, outlines how Poroshenko violated Ukrainian law in setting up the British Virgin Islands firm.

For security reasons, Australia has suspended uranium sales to Russia. It seems extraordinary that Australia should now enter into a deal with even more unsafe and unstable Ukraine, in its present war and political crisis.


No doubt the federal parliament’s influential Joint Standing Committee on Treaties (JSCOT) will examine the planned deal, that Julie Bishop signed up to in New York with Ukrainian Energy and Coal Industry Minister Volodymyr Demchyshyn.

JSCOT recently warned against the agreement to sell uranium to India but its recommendations were ignored by the Coalition Government. Here’s hoping that there will be scrutiny on the Ukrainian agreement and that the government will pay attention.