PANAMA CANAL COMMISSION

INTERNATIONAL SQUARE
1825 I STREET NW., SUITE 1050
WASHINGTON, DC 20006-5402

28 January 1998

Mr. Paul Levanthal
President
Nuclear Control Institute
1000 Connecticut Ave., NW
Suite 804
Washington, DC 20036
Dear Mr. Levanthal:

I'm enclosing answers to the full set of questions submitted to the Panama Canal Commission by NCI and Greenpeace International on the transit of nuclear waste material through the Panama Canal. We are aware that other U. S. federal agencies are involved in regulating the shipment of dangerous cargo; we cannot speak for their views on this matter. Our reply provides you as complete an answer as we can at this time and, of course, is constrained by the dictates of security.

The Panama Canal is an asset to the international community and as such, we at the Panama Canal Commission welcome and appreciate your interest.

Sincerely,

(signed)
John A. Mills
Secretary

Enclosure

cc:
Richard Stratford, Department of State
Leonard Spector, Department of Energy
Gavin Carter, British Nuclear Fuels Inc.
Jean-Claude Guais, Cogema
Yoshiyuki Sakakibara, Japan Federation of Electric Power Companies



1. A report by Sandia National Laboratories describes a two-stage attack in which terrorists use a shaped charge to penetrate the cavity of a vitrified high-level nuclear waste shipping cask and then inject a low-explosive charge to blow off the lid of the cask to facilitate the theft of the undamaged canisters within. This was intended as a credible theft scenario (in which the attackers remove the canisters by helicopter and later use explosives to remove cans of warhead plutonium embedded in the glass contents of the canisters). However, the Sandia analysis also suggests a credible sabotage scenario for commercial vitrified waste shipments (which contain no cans of plutonium) by noting that "excessive explosive charge size can rupture and deform the fragile component" (the waste canisters) within the cask. Although Sandia did not analyze what effect injection of a high-explosive charge in the cask cavity would be, the Nuclear Control Institute believes it is straightforward to assurne that such a charge would cause serious damage to the radioactive contents and likely result in the expulsion of pulverized glass both in the form of respirable particles and non-respirable fragments. Such a two-stage attack utilizing high explosives in the Panama Canal could result in both the sinking of the ship and the dispersal of deadly radioactive material. The environmental and economic consequences of such an attack would be catastrophic. Thus, Sandia's warning that ''sufficient institutional measures must be provided to prevent unauthorized parties from accessing and removing sufficient material" is applicable to a sabotage as well as to a theft scenario.

Ql: In the meeting with Nuclear Control Institute and Greenpeace, you noted that the Commission has on occasion placed armed guards on vessels during passage through the Canal. If the Pacific Swan chooses the Panama Canal route to Japan, will the Commission place armed guards on board to protect the cargo of vitrified high-level nuclear waste from terrorist attack?

A: This decision will be based upon the threat assessment.

Q2: Is the Commission requesting the U.S. Government to conduct an intelligence assessment of whether a terrorist threat exists at the time of passage of the Pacific Swan through the Canal?

A: The US Army periodically provides the Panama Canal Commission with threat assessments.

Q3: Will the Commission request that U.S. Army forces in the Panama Canal Zone be placed on special alert during passage of the Pacific Swan?

A: This will depend on the threat assessment and other factors.

Q4: Will the Commission impose special restrictions and precautions concerning public access to the Canal (including installation of metal and explosive detectors at the Visitors Center) during passage of the Pacific Swan?

A: Normal security procedures will govern public access to the Canal unless a threat not known at present develops.

Q5: Will the Commission bill Japan the additional cost of any special security arrangements made for this and future shipments of vitrified high-level nuclear waste?

A: Security of vessels using the Panama Canal is part of transit fees.

2. Given that this shipment may establish a precedent for dozens, perhaps hundreds, of vitrified waste shipments to follow, what arrangements will the Commission make to ensure that the Government of Panama has adequate security and emergency-response capabilities to deal with a radiological disaster after Panama takes over ownership and control of the Canal in the year 2000?

A: As part of the transition effort, the U.S. has been working diligently with Panama to ensure that ample and effective safety, security and emergency-response procedures will continue.

3. 35 CFR Part 113 subpart C 113.50(c) states:

"For the purpose of approval of shipments and prior notification of the radioactive substances...Panama Canal waters will be considered a country en route."

What does this mean? Who exactly is the country? If it's PCC, then as a USG entity certifying the adequacy of the containers carrying the hazardous cargo (i.e., vitrified plutonium waste), PCC is required to comply with government safety regulations for packaging and licensing. However, these containers are not meeting the packaging requirement nor are they licensed in the U.S. How do you explain this?

Environmental impact assessments are being requested by transporting countries. If the PCC is acting as "a country en route," why hasn't an environmental assessment been done? Doesn't NEPA apply?

A: The Panama Canal Commission, is considered a country en route for the purpose of approval of shipment of radioactive cargoes through the Panama Canal, under the rights and scope granted by the Panama Canal Treaty Article I, Paragraphs 2 and 4; Article III, Paragraph 2 c and by the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal Article II and Article m Paragraph (a). As such, the Panama Canal requires all radioactive shipments to comply with applicable international requirements, specifically, those of the IMDG Code. Vessels are required to provide full evidence of compliance of such requirements in advance of vessel's arrival to the Panama Canal. Approval for transit is granted only after review that applicable international and Panama Canal requirements are met.

4. 35 CFR Part 113 subpart C 113.50(d) states:

"Vessels carrying nuclear materials shall be required to provide current proof off nancial responsibility and adequate provision for indemnity covering public liability and loss to the United States or any agency thereof, ... ."

Naturally the U. S. has liability concerns and expects to have indications of any potential liability(s) for a shipment of nuclear waste material. In the case of the Pacific Swan transit, who bears the responsibility for liability? More specifically, (a) who has provided the information requested in the CFR (i.e., proof of financial responsibility) and (b) what is the total amount of coverage which establishes an adequate provision for indemnity?

A: With regards to the submission of financial responsibility required pursuant to 35 CFR 113.50 (d), the applicable language is as follows:

Vessels carrying...or consistent with international practice and standards as set forth by the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal."

The applicable treaty language is found in Article III (d) of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, which says:

(d) As a precondition of transit, vessels may be required to establish clearly the financial responsibility and guarantees for payment of reasonable and adequate indemnification, consistent with international practice and standards, for damages resulting from acts or omissions of such vessels when passing through the Canal..."

Shippers are required to provide us with proof of financial responsibility. It will be reviewed and determine if on its face it satisfies the insurance requirement. If it appears to comply we permit transit. The burden of compliance, however, never shifts, the shipper or vessel owner always has the burden of providing adequate insurance.

5. Can you provide examples of shipments through the Canal that have had a security escort? Was the security escort required because of the nature of the cargo or a possible threat made?

A: Security is provided routinely to nuclear powered vessels.



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