“Legal and Practical Issues in the Export of Nuclear Power Plants: The Case of the Barakah Nuclear Power Plant in the UAE”by Byungik Kim and Deokgeun Yoon

Journal of International Business Transactions Law, Vol. 33, No. 1 (July 2024), pp. 155–209.

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【Abstract】

With the South Korean government shifting its nuclear energy policy from denuclearization to active support for nuclear power plant (NPP) exports, legal and practical issues surrounding such exports have garnered increasing attention. Successful NPP exports require not only a solid understanding of plant design and structure, but also of nuclear law, due to the international regulatory framework that governs the industry.

Nuclear law can be categorized into four key areas: safety, security, safeguards, and liability for nuclear accidents. While international treaties govern safety standards, their effectiveness hinges on implementation into domestic law. In terms of security—protecting radioactive and nuclear materials from external threats—the IAEA's Convention on the Physical Protection of Nuclear Material (CPPNM) is a key instrument. To meet safeguards obligations, non-nuclear-weapon states must sign a Comprehensive Safeguards Agreement (CSA) with the IAEA.

Regarding nuclear liability, four international treaties—the Paris Convention, Vienna Convention, Joint Protocol, and the Convention on Supplementary Compensation—establish principles such as strict liability, legal channelling of liability, liability caps, and limited rights of recourse.

The IAEA standard bidding process includes five stages: preliminary preparation, preparation of bid invitations, bid submission, bid evaluation, and contract negotiation/conclusion. Close coordination with the importing country's government and industry is essential, and risk can be minimized by ensuring clarity and precision in contractual terms, including scope of supply.

Contractual structures for NPP projects vary depending on financing methods, risk allocation, and national market/regulatory environments. Models include Engineering, Procurement, and Construction (EPC) contracts, Public-Private Partnerships (PPP), intergovernmental agreements, and the Mankala model. While South Korea has largely relied on EPC contracts—beneficial for increasing winning bids—these contracts expose suppliers to higher construction risks, and present challenges when the importing country has limited financing capability. This highlights the need for exploring and developing diverse business models.

Major risks in NPP projects include economic risks, political risks, regulatory risks, project delivery risks, and safety risks. Economic risks relate to lenders’ evaluations of financing feasibility, with reference to the UK’s Contracts for Difference (CfD) and Regulated Asset Base (RAB) models. Political risk—often heightened in nuclear projects—can be mitigated not only by force majeure clauses but also through strong diplomatic engagement. Project delivery risks can be further subdivided into fuel supply, design, and construction risks. Each should be clearly identified and reflected in the contract to minimize large-scale disputes. To ensure safety, adherence to international nuclear and radiation safety standards, as well as ongoing follow-up safety measures, is critical.

【Table of Contents】

Ⅰ. Introduction

Ⅱ. Legal Frameworks and Procedures for Nuclear Power Plant Exports 1. Nuclear Law 2. International Bidding Process for Nuclear Power Plants

Ⅲ. Contract Structures and Risks in NPP Projects 1. Overview of Contractual Structures 2. Major Project Risks and Mitigation Strategies

Ⅳ. Case Study: The Barakah Nuclear Power Plant Project in the UAE 1. Project Overview 2. Legislative Developments in UAE Nuclear Law

Ⅴ. Conclusion

#Nuclear Power Export#Nuclear Law#Safety#Security#Safeguards#Liability for Nuclear Accidents#Intergovernmental Agreements#Mankala Model#Contracts for Difference (CfD)#Regulated Asset Base (RAB) Model