WALKER REPORT

1a  When was (i) the existence of the report and (ii) the text first brought to the attention (a) DTI officials and (b) DTI Ministers?

NII Site Inspector conducts Dounreay visits
which were subject of observations	Sept 1996-Feb 1997
NII Site Inpsector send record of observations
to Director, Dounreay	24 June 1997
DTI Officials received copy of observations direct
from Inspector	25 June 1997
Mr Battle told observations exist (but not shown text)
(John Battle answers Roseanna Cunningham PQ—
official record—col 120 of 1 June)	29 May 1998
S of S (Scotland) aware of existence of observations
(but did not see text)	11 June 1998
Mr Battle aware of request for observations by TIC
(but did not see text)	12 June 1998
Full text of observations published	15 June 1998

1b  The Minister referred to legal advice relating to release of the Report. What legal advice was available on the extent of his powers to direct UKAEA to lift its refusal to permit its release?

  In the first instance it is for the HSE to decide whether any working document like the Inspector's Observations arising from a series of inspections in the Fuel Cycle Area (FCA) at Dounreay should be published. In a recent (2 July) letter, already circulated to the Committee, the Director General of the HSE has confirmed that the "inspector's observations" were just that—they were not the result of special investigations and were not intended to be a full report to either HSE management or Ministers. This letter confirms that it is not HSE's "normal practice to bring such reports to Ministers' attention . . . [nor] . . . to put such working documents into the public domain". HSE inspectors produce tens of thousands of such "reports" each year—which are, as in this case, intended to be working documents which inform the subsequent dialogue with the bodies regulated (in this case the UKAEA—the nuclear site licence holder) in order to secure a continuing improvement in standards. It is worth noting that, although extremely critical in tone, the inspector's observations did not give rise to any enforcement action by NII, but rather to the normal regulatory process of debate and then action by the UKAEA.

  As that letter says "Section 28 of the Health & Safety at Work Act (1974) makes it a criminal offence to disclose information that HSE have obtained using [their] powers, except with the consent of the body giving the information." "At no time has the question of commercial pressures affected the action taken by HSE as regulator to secure improvements in safety at Dounreay". It notes, however, that HSE do have statutory authority to override the wishes of the body being regulated IF they consider it necessary to disclose information for the purpose of HSE's statutory function—ie protecting health and safety. Such a circumstance should and would have been drawn to the relevant Minister's attention as appropriate.

  Clearly HSE did not judge it necessary or desirable to do so in this case. Indeed, at the Thurso hearing, HSE made it clear that the consequence had been the expected one of robust debate between them and the UKAEA in line with normal regulatory practice. DTI officials, as sponsors of the UKAEA, confined themselves to their proper role in checking that the UKAEA had sufficient funds available to them to address any necessary improvements at the site which were being agreed with the HSE as regulator from the Summer of 1997.

  The question of publication of Dr Walker's memorandum only arose a considerable time after the observations were writeen—by which time HSE were satisfied that Dounreay management were addressing the issues raised in the report.

  At the time of Mr Battle's 1 June reply to Ms Cunningham MP, it was clear that while the observations, which were now nearly 18 months old, had been highly critical of UKAEA, much work had been undertaken by UKAEA in the interim to address the issues raised in the observations. The HSE were also planning an audit of safety at Dounreay in the near future, the results of which were to be published. Consequently it seemed more helpful to point Ms Cunningham to the results of the forthcoming audit, rather than to a working document which had already served its purpose and was becoming out of date.

  Our legal advice suggests that Ministers do not have the statutory authority to direct the UKAEA on operational matters such as this. It would in any case be an extraordinary use of Ministerial Direction to over-ride rights which every other regulated industry has in circumstance where HSE have determined there are no overriding safety reasons to insist on publication.

1c  Since the 5 June announcement apparently removed the requirement for confidentiality, why was the report not released in the week of 8 June?

  As explained above, the observations had served their purpose as part of the on-going debate on safety improvements at Dounreay. It was essentially put into the public domain, even though the contents had not justified publication by HSE in fulfilment of their statutory functions, since it was requested by the Trade and Industry Committee on 5 June. This then became a matter for decision by the HSE who, together with the Scottish Office, are accountable to Parliament for safety on nuclear sites in Scotland. HSE had to consider whether to refuse the request, make it privately available to the TIC or, subject to the necessary consent from UKAEA publish fully. The decision was to do the latter, but since it had been written for a technical audience, had never been intended for publication, and had been overtaken to some extent by events, it was supported by an explanatory note from the HSE which sought to put it into its proper regulatory context. UKAEA agreed on Friday 12 June to its publication, which it had become possible for them to do, following the removal of the commercial confidentiality impediment by the announcement that UKAEA would accept no new contracts for commercial reprocessing on 5 June. The report was then given to the TIC on the next working day—Monday 15 June—and published simultaneously.

1d  What part did DTI play in the decision to release the document between 11 and 15 June?

  The DTI was supportive. But the decision was for the Scottish Office, HSE and UKAEA. Once the UKAEA's agreement had been received on 12 June, it was for HSE to make the necessary arrangements for publication, which occurred on the next working day.

MONEY

2.   It would be helpful to have a note of the financial arrangements, including the sums paid to the Georgian government (Para 10 of the DTI memo), the value to the UKAEA of the material, and the UKAEA's additional attributable costs.

  We understand the United States government paid the Georgian government the approximate world market value of the unirradiated HEU—approximately £27,000 per kg—so around £110,000. The UK made no payments to the Georgian government, but paid the US government a single US dollar for the total consignment under the terms of the Transfer Agreement (Article IV) negotiated with them. On the advice of our lawyers, a token sum was deemed advisable to buttress the liability clause in the unlikely event of an accident en route from Georgia since the US and UK governments are signatories of different nuclear liability conventions. This sum was paid over in cash to the senior US government representative on Kinloss air field and will be met by a DTI budget for physical protection assistance in Eastern Europe and the FSU.

  Both the value of the unirradiated and irradiated High Enriched uranium and low enriched uranium and the UKAEA's additional attributable costs are subject to a range of assumptions about world market prices, amounts recoverable through reprocessing, storage times at Dounreay prior to processing or reprocessing and the price the UKAEA will get for the targets and the civil research reactor fuel which should be the end products. So figures are very approximate only. Unirradiated HEU currently has a world market price of around £27,000 a kg and LEU, which is more widely available, a maximum of £4,000 per kg. There is no real market in irradiated fuel so no value has been assumed for this. Thus the very approximate gross value of the Georgian consignment to the UKAEA is around £147,000.

  BUT against this need to be set: the costs of transport from Kinloss to Dounreay and unloading (estimated by UKAEA at £56,000), the costs of storage for what is at present an uncertain length of time—though hopefully the unirradiated HEU will be processed fairly swiftly if and when the current ban on operations in the FCA is lifted; and the costs of processing and reprocessing currently estimated by the UKAEA as around £150,000. At present therefore the net loss to the UKAEA, and therefore to the DTI and the taxpayer looks to be around £60,000. This is clearly a UK financial contribution to nuclear safety and security in Eastern Europe and the FSU. Arrangements have already been made for the DTI to monitor regularly the UKAEA's specific costs relating to the Georgian material until all the consignment is dealt with.

5 JUNE DECISION

3.   Exactly when and how were DTI officials and Ministers told of the UKAEA's view that it would not be economic to continue to seek new commercial reprocessing contracts?

  On 17 March 1998, the UKAEA Board considered the future of reprocessing at Dounreay and recommended that no new commercial work be accepted as part of a phased rundown to a complete cessation of reprocessing. The Chief Executive of UKAEA advised DTI officials of the Board's proposed course of action by letter dated 19 March 1998. Officials then sought clarification from UKAEA on their proposal and a situation report was submitted to Mr Battle on 30 April. This was for information only, as at that stage officials were seeking further information from the UKAEA. Mr Battle arranged a meeting with the Chairman and Chief Executive of UKAEA on 20 May to discuss these issues fully. The President of the Board of Trade consulted colleagues by letter on 29 May before the Government made the announcement on 5 June to endorse UKAEA's decision to accept no new commercial reprocessing contracts at Dounreay.

SECURITY

4.   Is there anything in the 27 April answer to the PNQ and subsequent answers that in Ministers' view should be corrected in the light of Mr Pointer's memorandum.

  No. The DTI is content for the restricted memorandum on security which we submitted to the Committee to be published, subject to a small number of excisions of the most security sensitive passages, which we have agreed with the Clerk. This memorandum we believe deals fully with the issues raised by Mr Pointer in his memorandum to the Committee. It is important that a reasoned reply should be in the public domain. Frank debate about operational and budget issues will continue to be a fact of life in the UKAEAC, as in all Home Office police forces.