On the agenda: the dangerous opening of the nuclear sector.

With privatizations returning to the agenda of Michel Temer's interim government, even the state monopoly on the construction and operation of reactors for nuclear energy production is threatened. A constitutional amendment presented in 2007 lay dormant in the Chamber of Deputies all these years and has now reappeared, with a chance of being approved soon.

The complaint comes from Paulo Metri, a member of the Engineering Club, who explains the matter further in the interview below. He reports that the amendment proposed by Congressman Alfredo Kaefer (PSDB-PR) in 2007 was attached to another amendment from 2011, also by Congressman Carlos Sampaio (PSDB-SP). On June 12th, they were approved by the Constitution and Justice Committee of the Chamber of Deputies and are now ready to go to the plenary session. If approved, he says, the change to the Constitution will open the sector to foreign participation, with serious repercussions for national development. National companies, says Metri, would lack the technology and capital to enter such a sensitive and strategic area. Both authors and the rapporteur are prominent figures in Temer's governing coalition.

Watch Metri's interview.

247 - What does PEC 122 actually represent for the national nuclear sector?
Paulo Metri - Federal Deputy Alfredo Kaefer, from the PSDB party in Paraná, presented Constitutional Amendment Proposal (PEC) No. 122 in 2007, which aims to modify articles 21 and 177 of our Constitution to exclude the Union's monopoly on the construction, operation, and, implicitly, the ownership of nuclear reactors for the purpose of generating electricity. Today, only the state-owned company Eletronuclear owns, builds, and operates in the sector. Unless I'm mistaken, this proposal will soon be submitted to a plenary vote and could be approved without much debate. In reality, it's about allowing foreign companies to enter the nuclear power generation sector in the country. 

247 - But the text of the proposed constitutional amendment mandates the participation of national companies in the sector...
Metri - There is no possibility of a genuinely national private company undertaking this activity, due to the size and experience required. They may even camouflage the entry of foreign companies into the sector by using genuine national private companies as fronts, but these will only be figureheads. It is necessary to differentiate between external technical assistance given to a Brazilian company, as is the case with Areva, which assists Eletronuclear, and the use of a Brazilian company without competence in the sector as a figurehead. So, in practice, the sector model proposed in this PEC is one of coexistence between subsidiaries of foreign nuclear companies and the only Brazilian company of size and tradition: Eletronuclear, which already owns Angra I, II and III.

247 - Why is it important to keep the construction, maintenance, and operation of nuclear power plants in the hands of the State, as currently stipulated by the Constitution? 
Metri - Foreign companies will not want to have all the design, construction, equipment manufacturing, and assembly activities of the power plants in Brazil. They will surely bring the design and equipment from abroad. Construction and assembly may be contracted to Brazilian companies, but they may also push for foreign construction and assembly companies to enter the market. Regarding the fuel cycle, the congressman's proposal makes no mention of it, but they will certainly import fuel elements, which will maximize the operation of their industrial units abroad. It cannot be forgotten that, in addition to the obligation to provide the safest and cheapest possible electricity to society, other objectives of the State are to maximize job and income generation in Brazil, which are included in maximizing local purchases. Thus, this criterion is much better met by Eletronuclear.

247 - There is a global market for nuclear products and services in which Brazil could participate in the near future. Could the changes proposed by the PEC impact this participation?
Metri - With the introduction of the new model in Brazil, the country is prevented from participating in the share of the global nuclear products and services market permitted by the International Atomic Energy Agency (IAEA). This is because foreign subsidiaries based here will not participate in tenders in other countries due to a lack of interest from their parent companies in using their subsidiaries. Furthermore, the profit from any eventual export would not remain in the country. Brazil could attempt to enter the market in the future with the Eletronuclear, Nuclep, and INB consortium, assisted by Areva. This future possibility is being denied with the introduction of the new model today, and the level of technological development mastered by the country in the sector will regress.

247 - Regarding the interests and practices of parent companies and subsidiaries, are there other losses?
Metri - Yes. The total remittances of profits and technical assistance fees abroad are higher when adopting the foreign model. The difference between the values ​​of the state/national model and the foreign model represents the amount that will not be remitted abroad and will be reinvested in the country.

247 - One point that always comes up in debates about nuclear energy generation is safety. Does opening up to private initiative contribute to safety in the sector? 
Metri - In fact, the construction and private operation of a nuclear power plant brings to light the well-known conflict between profitability and safety. It is known that with the addition of safety measures, the investment in the plant becomes more expensive. The private sector aims to maximize profit while operating safely. However, it is omitted that there are different levels of safety for any undertaking, and each increase in safety requires additional investment, which increases the total investment. The choice of the level of safety to be adopted in a project is also a decision that takes into account the impact on profitability, and no one can say for sure what the minimum sufficient level of safety is. Therefore, it can be said that the construction and operation of nuclear power plants directly by the State can result in safer plants, as the State does not seek to maximize profit.

247 - The proposed constitutional amendment (PEC) envisions the creation of an agency to regulate the sector. Wouldn't this agency be sufficient to ensure that private companies meet not only safety criteria but also the interests of the population?
Metri - This is a commonly used counter-argument. Some say that with a state entity overseeing nuclear safety, currently the National Nuclear Energy Commission (CNEN), safety is guaranteed. However, some of the country's largest regulatory agencies, ANP, ANEEL, and ANATEL, which oversee sectors open to foreign capital, are examples of agencies dominated by the very companies they regulate. ANP has already auctioned off more than 1.000 blocks of national territory for oil exploration, an activity of little value to society and great value to foreign companies. ANEEL allowed concessionaires to overcharge consumers for about 10 years. ANATEL allows Brazil to have one of the highest telephone rates in the world, in a blatant cartel action by the operators.

247 - If the PEC passes, what will be the last line of resistance?
Metri - If it passes, I count on the management and technical staff of CNEN, or the agency that may be created, to resist the attempts at co-optation by the private sector, which will certainly exist, since they will come along with this new model.