Finland under more pressure over Russian N-plant plan

Monday, September 29, 2014

Finland’s government has come under renewed pressure over its decision to approve a Russian-built nuclear reactor after legal experts questioned the independence of the economy minister responsible for the plan.

There were claims that technical plans for the plant were based on a flawed and outdated design by Rosatom, the Russian state-owned company that holds a 34 per cent stake in the project.

Olli Rehn, the Finish MEP and former EU economics commissioner, wrote on his blog on Sunday night that the plan for the Fennovoima nuclear plant was “economically uncertain and politically crippled”.

“Finland has a history of large industrial policy mistakes that have become politically and economically costly,” Mr Rehn said, calling on economy minister Jan Vapaavuori to give a full explanation.

“In the end, it is of course PM [Alex] Stubb who carries the overall responsibility of the government’s industrial policy,” he added.

Mr Rehn is a senior member of Finland’s opposition Centre party, which is running neck-and-neck with Mr Stubb’s National Coalition party in polling for national elections in April. He is seen as a possible foreign minister if the Centre party gets into government.

He told the FT his objections to the nuclear plant were based on his belief that the EU needed to show unity towards the Kremlin, noting the European parliament has called for a reduction of energy reliance on Russia and a cancellation of any newly-planned energy projects with Russia.

“In line with this, the Finnish government would do wisely to revisit the political and economic sense of the Rosatom deal,” Mr Rehn said. “It is also a question of excessive energy dependence. There are other ways to ensure reasonably priced basic energy for the Finnish industry. And we should not crowd out substantial investment in renewable energy sources.”

Ville Niinistö, leader of Finland’s Green party and former environment minister, demanded that the attorney-general examine the legality of the deal. He quit in protest at the project, accusing the coalition government of favouring Russia.

In a major address on Russia policy to be delivered later on Monday in Berlin, Mr Stubb, does not refer to the nuclear deal or broader EU energy policy, according to an advanced copy of the speech provided to the FT.

He will, however, give a robust defence of the EU’s recent hard-line stance on sanctions, saying they are necessary until the Kremlin changes its behaviour in Ukraine and were “exactly the right thing” once diplomacy failed to stem Russian aggression.

“Finland has a longer common border with Russia, 1,300km, than the rest of the EU countries put together,” Mr Stubb will say, according to the draft. “Neighbours are actually a bit like relatives – you cannot choose them . . . Unfortunately, this is no guarantee of a happy marriage. For that end, both parties would actually have to want to work in the same direction. With our relationship to Russia, this is unfortunately not the case at the moment.”

Finland faced criticism earlier this month after it delayed the implementation of tough new sanctions by the EU against Russia, while its foreign minister opposed their adoption altogether. The European Parliament has called on the EU to consider freezing nuclear co-operation with Russia.

Three legal scholars claimed there was a possible conflict of interest after the economy minister in February signed a nuclear co-operation agreement on behalf of the government with Rosatom – a company, not another state. Mr Vapaavuori went on to present the plan for the new power station, which the coalition government narrowly approved two weeks ago.

“The agreement is a textbook example of the improper influence of authority, in this case the Ministry of Employment and Economy,” Olli Mäenpää, professor of law at Helsinki University, told Helsinki Sanomat newspaper. Mr Vapaavuori called the accusations “far-fetched”.

Separately, Jukka Laaksonen, former head of Finland’s Radiation and Nuclear Safety Authority (STUK) and now vice-president of Rosatom’s operations in Finland, told Keskisuomalainen newspaper that the plans for the new Fennovoima plant were in fact an old design for a nuclear power station near St Petersburg in Russia.

Fennovoima’s order had come as a surprise to the Russian company, Mr Laaksonen told the paper, and there was not enough time to create fresh plans for a new plant, so existing copies of the older plans were filed with the application.

Rosatom was currently formulating a new, safer, specification for the plant, which would be submitted next summer, Mr Laaksonen said. “The Leningrad [now St Petersburg] plant has thin walls, but the [new plant] will be built three times thicker.”

According to the paper, the STUK was unaware that Rosatom’s plans for the plant did not correspond to the documentation accompanying Fennovoima’s application for permission to build it.

In a statement, Finland’s economics ministry condemned “unfounded interpretations” of the nuclear co-operation agreement with Rosatom, and insisted that the minister had been impartial in his handling of the deal. Finland had similar bilateral nuclear deals with several countries, it said, which were necessary to enable specific projects such as Fennomoiva.

The ministry did not respond to the claims about possible safety flaws in the design submitted for the plant.

Jaakko Jonkan, attorney-general, told Helsinki Sanomat in an email on Sunday he had no grounds to suspect unlawful conduct in the deal.

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