Modern Nuclear Regulation
Responding to Industry Growth

Notes for an Address by

Linda J. Keen, President and Chief Executive Officer
Canadian Nuclear Safety Commission

to the

Canadian Nuclear Association 

Thursday, February 23, 2006

Check against delivery

Introduction

Good morning.

I would like to thank you for the opportunity to address your seminar once again this year.

Mon discours de ce matin sera en anglais, mais une copie en français sera disponible sur notre site Web et vous pourrez poser des questions en français à la fin de cette présentation.

As the title of your seminar implies – “Nuclear’s Path Forward – Building For Tomorrow” – the Canadian nuclear industry is on the cusp of substantial growth in all areas, be it in power generation or uranium mining and milling, or industrial and medical uses.

Growth has started and more is on the horizon.

In the face of this growth, Canadians can be assured that the Canadian Nuclear Safety Commission will remain steadfast in its mandate to protect the health, safety and security of our only client – the people of Canada – to protect the environment, and to ensure that Canada’s commitments on the peaceful use of nuclear energy are respected.

To fulfill this mandate, the CNSC is committed to being a strong, vigorous, independent and impartial regulator, ensuring excellence in our regulatory oversight.

Today, I would like to speak to you to about the modernized approach of the CNSC to regulate the growing nuclear industry in Canada and how the CNSC has been working to put into place a modern governance regime to demonstrate accountability and transparency in its regulatory oversight activities.

Look Back at the Last Year

Before I begin, I would like to discuss a few select highlights from the last year and important progress on some key areas.

First, the CNSC’s business case for new resources was submitted to the Government and we received some short-term funds. We are hopeful that decisions will be taken soon on our longer-term funding requirements. This business case was based on detailed plans of industry. This is part of our modern regulatory planning.

As you are aware, the CNSC will require these resources to avoid placing high-impact regulatory delays for initiatives that are critical to the industry and to Canadians.

Second, last April, the CNSC led the Canadian delegation at the Third Review Meeting of the Convention on Nuclear Safety. Canada participated fully as a Contracting Party and has made its report and its peer review questions and answers public. CNSC representatives also publicized the records of proceedings via media interviews and made a presentation to the Commission in a public meeting. It is, again, a modern approach to an international industry.

In addition, in an unprecedented move, I was asked by the 58 countries of the Convention on Nuclear Safety to extend my Presidency of the Convention for the next three years to ensure Canadian leadership in nuclear safety is available to all member countries of the Convention.

Third, in September last year, after five years of implementing strengthened safeguards in Canada, the IAEA drew its broader safeguards conclusion, for the first time, following assurances by the CNSC and industry of the absence of undeclared nuclear material and activities in Canada.

This conclusion provides an increased level of confidence for Canadians in our domestic activities and demonstrates to the international community the leadership and importance that Canada places on all countries demonstrating that their nuclear activities are strictly for peaceful purposes.

This also opens the door to a new, more efficient and effective approach to safeguards.

Fourth, and starting to look forward, the CNSC will be leading the Canadian Delegation to the Second Review Meeting of the Joint Convention on Spent Fuel and Radioactive Waste Management in May of this year.

Again, the report will be available on our website and will be the basis of the peer review later this year.

As you are aware and will be hearing in the context of this seminar’s discussions, waste management and the safe handling of waste is a high priority to Canadians, to governments, to industry and, of course, to the CNSC.

Modern Regulation

I would now like to turn to the subject of new nuclear energy projects and the modern regulatory practices underpinning the CNSC’s approach to regulatory oversight.

Decisions have already been taken by industry to pursue refurbishment of part of the CANDU fleet – at Bruce, at Point Lepreau and, in part, at Pickering – and due diligence is being done on decisions affecting refurbishment of Gentilly-2 and life extension of Darlington. Moreover, the signals for the building of new power reactors in Canada have been growing over the last year.

For example, the Ontario Power Authority’s December 2005 report to the Ontario government recommended that the province either refurbish or replace the current fleet of nuclear reactors.

I understand that the Province will reply to the report in the near future.

However, I must emphasize that to date, there has not been a license application, by any operator, to start a new reactor process—and it would be an operator – not a vendor, not a government – who would trigger this process.

The impact of such projects would be to dramatically increase the regulatory work of the CNSC. The regulatory oversight of reactor refurbishment and new builds presents an immense challenge for the CNSC.

While we are already working on the refurbishments that I have named, and there is that potential for more, the building of new reactors will be an incrementally bigger challenge.

As I mentioned at last year’s winter seminar, the Canadian regulator has not licensed a new nuclear reactor in over 25 years. Consequently, the CNSC has been busy preparing for the development of a regulatory regime for potential new power reactors – one that reflects our modern regulatory regime, regulatory practices and the overall environment in which we operate.

This preparation should not be seen as deviating from our policy of neutrality on nuclear energy. The CNSC has a responsibility to be ready with the regulatory regime focused on safety.

Canadians should expect a modern, twenty-first century, world-class review of any new reactors and the CNSC is preparing to deliver that.

We must ask, “How can we use the regulatory framework to bring the most modern safety oversight to reactors that may be in existence 100 years from now?”

Significant work must still be done to develop a clear and concise framework that will guide operators, vendors, stakeholders and CNSC staff.

I appreciate the concerns of provincial authorities. The CNSC has been and will continue to work closely with the Ontario Power Authority and Ontario Energy Board, among others, to ensure the regulatory requirements are understood.

There are some practical approaches to licensing and the timelines of applications. The regulatory process is not a stop and start process, as the timelines make it difficult for the CNSC.

Groups look towards you - the industry - and how you will approach the licensing process. It is important to recognize that the right approach for governments and industry might not be the right approach for communities.

We intend to communicate openly to ensure that all interested parties are able to make informed decisions based on the CNSC’s regulatory expectations for any new build.

In order to start this communication, the CNSC has produced an information document entitled “The Licensing Process for New Nuclear Power Plants in Canada”.

This document is now available on the CNSC website and copies will be available to you following my remarks.

The document describes the licensing process for any new nuclear power plant in Canada, based on the requirements of the Nuclear Safety and Control Act and its associated regulations. It is the precursor to a series of regulatory documents which are to be developed for the licensing of new power reactors.

We will hold an information session tomorrow morning at 9:30 at the Government Conference Centre at which Mr. Ian Grant, CNSC Director General of Power Reactor Regulation, will present the report and respond to any questions you may have.

In addition to this document, a number of other regulatory documents will have to be developed over the next five years to support an application to build a new power reactor.

The first of these new regulatory documents is entitled “Requirements for the Design of Nuclear Power Plants.” It is in the regulatory document process and should be ready for public consultation in the months ahead.

It is important to note that the CNSC’s approach to the licensing of any new build is bound by several principles.

First, safety is the CNSC’s priority. Other stakeholders, including operators, governments and vendors, will have different interests – such as economics, timelines, productivity and efficiency – but our job and mandate is safety.

Second, the CNSC’s regulatory requirements will be aligned with international standards and practices to the greatest extent practicable.

Despite the suggestion of some, these are not American standards. They are international standards developed under the IAEA.

Why? Because these standards represent world’s collective knowledge and experience and can best ensure that Canadians can have confidence in our modern, internationally benchmarked regulatory oversight.

Third, as an independent regulatory body, the CNSC does not make choices on technology. The CNSC is technology neutral in all areas of our mandate, including power reactors, and our regulatory framework will be technology neutral to the extent possible.

This is based both on the nature of international approaches and the fact that operators will choose the technology that meets their needs. The CNSC does not license technology.

Independence and objectivity on nuclear matters are key principles in ensuring the CNSC operates in accordance with its mandate and ensures public trust.

The final principle is that the safety case and the information submitted by a proponent in support of a new licence must be complete at the time the application is submitted.

The better prepared the proponent at the initiation of the licensing process, the more effective and efficient the licensing process will be.

So, how will new reactors fit in with respect to other ongoing pressures facing the CNSC?

As we move forward in the new power reactor service line, the CNSC’s first priority remains the safety of existing facilities.

Our second priority is the refurbishment of the current existing fleet of CANDU power plants.

The licensing of new nuclear power reactors will need to be third.

As such, proponents must give the CNSC ample notice in order to prepare. The CNSC will have to acquire new resources – both human and financial – in order to carry out the necessary work.

The pressure on human resources will be particularly acute. The combined forces of a growing industry and a workforce with many nearing retirement present challenges. We are already experiencing difficulties in hiring staff which will delay projects.

Without more qualified people, operators will be required to wait. Timelines could suffer but safety will not take a back seat in this process.

To address this pending and serious shortage, the CNSC has agreed to work with industry to support a conference that includes industry, research institutions and universities, to examine our future human resources needs and how we will address them. I cannot over emphasize that this acute shortage of qualified staff will affect our ability to respond.

Governance

The final area I’d like to speak to you about today is governance.

As you have heard me state before in these seminars and in our regular meetings, independent regulatory bodies such as the CNSC are important in order to assure public confidence and trust in the effectiveness of regulatory oversight and trust in the nuclear industry.

Maintaining an arm’s length relationship to government and industry is a critical element of sustaining that confidence.

For this reason, the CNSC reports to Parliament through the Minister of Natural Resources rather than to him. As such, the Minister is answerable in general to Parliament, but it as President and Chief Executive Officer that I appear before parliamentary committees in accordance with the principles of ministerial responsibility and political neutrality in order to account for the governance of the agency and for our programs – be they safety and security for the protection of Canadians or the environment or the implementation of international safeguards – through effective regulatory oversight.

I welcome the clarification of the role and responsibilities of independent federal quasi-judicial administrative tribunals, such as the CNSC, in the new Government’s recent document, entitled, “Accountable Government (2006).”

At the CNSC, we have put significant effort over the last five years into a governance regime that demonstrates our accountability and transparency. It can be summarized by answering three questions: What do we do, how do we do it, and how are we measured?

What do we do?

The CNSC is committed to an effective regulatory regime that is based on modern legislation and clear, modern, risk-informed regulatory approaches.

It is absolutely essential that my agency draws its direction from Parliament through the clear direction provided by the Nuclear Safety and Control Act. It is the foundation of the regime, from licensing to compliance.

The nuclear regulatory regime is based more and more on international standards and experience and is being modernized as new and proven good practices and approaches are available.

It is clear in international discussions and peer reviews under convention processes that the CNSC has one of the broadest sets of regulatory responsibilities and is often chosen as a benchmark for its regulatory framework.

How do we do it?

The CNSC is founded on a strong regulatory culture based on integrity and adherence to shared values and ethics.

The CNSC has a Values and Ethics strategy and, this year, will be producing information that will help ensure that all of you understand our ethical commitments and assist us in meeting our objectives.

These are the basics, but there are other examples. The CNSC has already instituted an internal disclosure mechanism which is in advance of any formalized government requirement, to help staff disclose wrongdoing in a safe and constructive manner, and to protect staff against reprisals when they raise an issue or disclose wrongdoing in good faith.

We have also committed to a new Quality Management Program based on IAEA standards and are the first major nuclear regulatory body in the world to do so.

I would argue that transparency and public confidence are cornerstones of our governance regime. Public confidence is based on knowledge of what we do and a sharing of our regulatory expectations and the results.

From the participatory public hearings to the published records of decisions, the Commission is committed to openness and transparency.

The complex scientific nature of nuclear regulation will always be a challenge. But using a variety of methods from meetings with communities, websites, and publications, we seek to provide information and opportunities for stakeholders to both be informed of the strong oversight but also to input into the regulatory development and licensing processes.

How are we measured?

The Government of Canada institutes measures for reporting such as Annual Reports, Reports on Plans and Priorities, and Departmental Performance Reports.

In addition, measures for auditing - both internally through the CNSC’s Audit and Ethics Group and externally by the Office of the Auditor General - are in place, as well as systems for the disclosure of travel expenses, hospitality and contracts. The CNSC adheres to these requirements.

But since our vision is to be one of the best regulators in the world, the CNSC also places a priority on measuring the quality of our regulatory practices. Accordingly, last year, I requested from the IAEA an independent assessment of our regulatory programs, starting with our power reactor program.

In preparation for this, we hosted our colleagues from the United States and United Kingdom last fall, who are working together with us on our preparations for a self assessment in advance of the formal International Regulatory Review Team assessment. As part of our governance commitments to transparency, the CNSC will make the results of this assessment public.

Other Emerging Pressures

As I stated earlier, there are other emerging pressures. It seems the nuclear industry is poised for significant growth in all areas of the nuclear fuel cycle, and the CNSC recognizes that power reactors are only a part of this growth.

The nuclear industry is experiencing significant growth in all areas of the nuclear fuel cycle, which presents additional pressures on the CNSC.

The initiatives and issues that we anticipate will have a significant impact include:

• In mining, the potential development drilling, mining and milling of newly discovered uranium ore bodies and the planned expansion of uranium production from existing operations.
   
• In waste, the proposed Deep Geological Repository for low and medium level wastes at Kincardine, including the management of waste generated from the decontamination and demolition of facilities that are to be decommissioned.
   
• The November 2005 Nuclear Waste Management Organization (NWMO) report with its recommendations for permanent storage of Canada’s nuclear fuel waste.
   
• In addition, we are seeing substantial increases in regulatory oversight work due to growth in the nuclear substances sector. For example, the number of licensed cancer treatment facilities already increased by 86 percent between 2000 and 2004, with further and substantial growth in coming years due to changes to health care approaches.

Conclusion

Through all of the challenges the future will bring, the CNSC will continue to strive to be one of the best nuclear regulators in the world.

The CNSC is committed to a high level of effectiveness, while achieving our other objectives of transparency, efficiency and accountability.

Our governance structure will remain strong. We will continue to exercise due diligence and proactively undertake activities to further enhance our good governance practices.

I believe that the CNSC has a clear vision of its purpose and mandate, is results-based, and has instituted the necessary processes and structure to deliver on its responsibilities and address emerging pressures.

These pressures are creating, and will create, challenges which the CNSC must address.

As the regulator, the CNSC also plays an undeniable role in maintaining public confidence in the safety of facilities in Canada.

But, the CNSC does not regulate in a vacuum. The industry’s actions and performance also shape the public’s attitude. The onus is on licensees to pursue a culture of safety which generates trust and confidence among Canadians. You must also be “world class” in your own fields.

It was a great personal honour for me to be re-appointed in 2005 as President and CEO of the Canadian Nuclear Safety Commission for a further term of five years. The quality of this organization and its people is well proven and I look forward to the new challenges.

Thank you very much.