A year and a half after a suit was launched and five years after an agreement on the Paks II NPP expansion was signed between Hungary and Russia the Municipal Court of Budapest ordered the government to disclose the bulk of the contract. Following two deferrals a second instance verdict was reached in early February, 2019. On 28 March the publicly-owned Paks Ltd. released a redacted version of the 110-page EPC contract between Paks Ltd. and a subsidiary of the Russian state nuclear corporation Rosatom.
The Hungarian government first signed the agreement to construct two VVER nuclear reactors in Paks in 2014. Shortly thereafter the National Assembly adopted a proposal to classify the document for 30 years for reasons of “national security.”
Two of the government-friendly news outlets, Magyar Nemzet and Origo, neither of whom were parties to the suit, published commentaries about the Paks contract before the complainants themselves were even aware of its publication. Both sources reported that the “secret contract affair” had been “settled at last” and concluded that the contract appeared “particularly favourable to Hungary; with robust legal protections”.
But the measures – at times extreme – that Prime Minister Orbán has taken to keep a tight lid on the project specifics are curious for an investment with such favourable economic prospects. Also curious is the magnitude of funds that have been allocated to promote the project.
Access was denied to Bernadett Szél, leader of an opposition party and member of the National Security Council; many of the technical and financial conditions of the project were also unknown until the Freedom of Information Authority was asked to intervene. In 2017 Hungarian Dialogue MEP Benedek Jávor and Szél turned to the national Freedom of Information Authority (NAIH) to determine whether the “state secret” classification of the contract was justified. The bulk of the documents were declassified before the investigation ended, but the NAIH still supported the concealment of information that could have geopolitical consequences and a significant impact on both the country’s economic future and its safety.
On 13 January, 2014, the Hungarian government spokesman announced that the Prime Minister was in Moscow to discuss economic affairs with the Russian President. The following day Rosatom and Paks Ltd. signed the nuclear expansion agreement; it was declared that the Russian state bank would also provide a €10 Bln loan to finance 80% of the project under conditions that were not shared at the time. Government officials maintained, and continue to maintain, that the decision had already been authorized by the National Assembly in 2009. In reality, the resolution only consented to the initiation of preparatory activities for a nuclear expansion.
Many key impact studies and feasibility reports were kept under wraps prior to and following the signing of the agreement, and MPs and NGOs are still seeking access to expert opinions that, in principle, should already be accessible to the public. In principle, the government has the duty to make the contracts of all publicly-owned and publicly-funded entities public. In practice, the electorate has been entirely excluded from a decision with profound political and economic implications.
Paks II contract lawsuits
Benedek Jávor MEP has been fighting for access to the implementing agreements that stipulate the design, construction, operation and maintenance of the two VVER reactors since 2014 and launched a suit against the government and Rosatom in 2017. Under a first instance decision in May, 2018 it was established that Hungary’s Freedom of Information Act applies to international agreements as well as to national ones, and that the government could not justify classifying thousands of pages of a public contract. The Court also recognized that the MEP’s access requests had “not been abusive,” as the defence attorney had argued.
Notably, the second instance court contested the legitimacy of the “national security” grounds exception that the first instance court had recognized, but identified a number of sections that would remain classified to protect the business interests of Rosatom. This includes the project’s execution schedule, official permit details and technical documentation along with sections covering liquidated damages, general limitation of liability, and most importantly, termination conditions.
In a separate case, Hungary’s leading economic and political news weekly HVG also won its lawsuit to access the contract on 7 March, 2019. HVG argued that the judgment appears to suggest that the governments of Hungary and Russia determined that nuclear safety aspects must also remain secret to protect business interests. It is not clear from the judgment on what grounds Rosatom’s business interests override the public’s interest in disclosure of the termination conditions—potentially a sum of around €12 Bln which could effect the central budget for decades to come.
Neither HVG nor Jávor are entirely satisfied with the amount of information that Paks II Ltd. released publicly. Their prime objective with the lawsuits was to discover the potential financial repercussions of unilateral contract termination, which are as yet unclear. Jávor argues that the disclosed documents represent only a fraction of the total contract portfolio, which may include thousands of pages of annexes.
In the meantime, the daily Népszava reports that Russian designs are continually failing to meet EU standards and that a shortage of skilled workers in Hungary is a pressing problem. In January of 2019, the head of the opposition party LMP submitted a freedom of information request to learn the amount of the additional costs of the Paks nuclear plant expansion resulting from the project’s now significant delay. The right-wing opposition party Jobbik also announced that it wants to establish a parliamentary committee to review the Paks II project. Given the government’s track record, neither initiative has much likelihood of success.
Safety permit schedule modified to protect “national economy”
For his part, Benedek Jávor MEP announced that he intends to submit further freedom of information requests related to the contracts. At a press conference on 3 April the MEP urged the Hungarian government to initiate the annulment of the Paks expansion contract, arguing that neither Hungary nor Russia have the skilled capacity to meet the deadlines with quality work. Citing security risks, he added that repeated attempts to undercut official permit procedures will compromise the integrity of the process, leading to nuclear safety risks.
The Hungarian government adopted an act, akin to a state of exception, which permits it to bypass legislative protocol to accelerate the adoption of policies and projects considered “important for the national economy”. Earlier this served as the basis for Atomic Energy Act amendments, which, in breach of the Euratom Treaty and the Convention on Nuclear Safety, would have enabled the government to issue nuclear permit procedure “decrees” in lieu of independent nuclear regulators. These provisions were repealed due to pressure from the European Commission which had been made aware of the inconsistency by NGOs. Needless to say (one would hope) the “effective separation between the functions of the regulatory body and those of any other body or organization concerned with the promotion or utilization of nuclear energy” is mandated in the Convention on Nuclear Safety because conflict of interest could adversely impact nuclear safety. The Energiaklub climate policy institute noted at the time that neither the government nor the Commission issued public communications on the matter.
Presumably under great pressure to limit the financial consequences of the delay, Hungary’s Prime Minister is again resorting to extreme measures: a legislative package was adopted on (Sunday) 7 April that, inter alia, simplifies and accelerates the permit process and, according to Jávor, shortens certain permit deadlines by a third. The bill advocates the revision of administrative deadlines of the nuclear regulator’s procedural regulations to “ensure that the investment in the Paks Nuclear Power Plant is suitably effectuated”.
Both pro- and anti-nuclear advocates see eye to eye on the fact that safety can only be assured by a range of independent and well-informed oversight bodies. As is the case with any controversial initiative, the public also plays a role in monitoring its effects or in holding governments or industry accountable. The United Nations called access to information the “touchstone of all the freedoms” at its opening session in 1946, because, without timely and accurate information citizens are not in a position to assess the legitimacy of decisions made on their behalf.
Access is a necessary basis for exercising a broad range of civil and human rights.
This is the first of three articles examining the transparency and safety implications of Hungary’s nuclear power plant expansion.
Christiana Maria Mauro is a Project Leader at Eticas Research and Consulting. She has contributed to public interest advocacy projects at the European level, focusing on issues of civil liberties. Her background in social sciences, humanities and law supports Eticas’ creative approach to social and practical problem-solving by highlighting the broader context. She’s a member of Nuclear Transparency Watch since 2018.