Meta-governance and the uk nuclear Industry: a limiting Case




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НазваниеMeta-governance and the uk nuclear Industry: a limiting Case
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Methodology


The empirical data was collected using an iterative process of document analysis and semi-structured interviews. Initially, a range of documents were reviewed to identify potential interviewees and to develop an understanding of the debates surrounding nuclear power in Britain. These documents consisted of government White Papers and policy statements, speeches and presentations by senior public officials, nuclear industry experts and members of the environmental movement and finally, articles published in the popular, expert and scholarly press. The document review produced an initial interview sample which included civil servants, senior policy advisers, Members of Parliament (MPs), nuclear and electricity industry experts and environmental campaigners.

In total, 21 interviews were conducted with 25 individuals and each interview lasted between 30 minutes and 1 ½ hours. All the interviews were conducted under promise of anonymity. Following the conclusion of each interview, the interviewee was asked to suggest other potential interviews and further documents for study. The data analysis itself was carried out using qualitative analysis software (NVIVO 8). The empirical data was coded into categories reflecting the NATO framework, the concepts of governance and metagovernance and the different factors driving support or lack of therefore for nuclear power.

The Nuclear Renaissance


The British government has recently concluded that Britain’s long term interests if a new fleet of nuclear reactors are constructed in Britain. However, the British government cannot simply wish new nuclear reactors into existence and to achieve this objective, it will have to engage in metagovernance. The effectiveness of the government’s metagovernance strategies can be analysed by considering metagovernance in terms of the four policy assets we have identified previously; the governance tools of nodality, authority, treasure and organizational capacity. Our findings summarised in Table 1 challenge the state-centric theory of metagovernance. We find that the British state does indeed access to assets along all four dimensions of the NATO framework but that these appear to likely to be overwhelmed by even more substantial institutional limitations or weaknesses along those four dimensions.


Table 1: About here


Nodality


In 1989, as part of a wider programme of privatization of the energy industry, the then Conservative government began to privatise the British electricity industry (Electricity Act, 1989). The process of privatization established independent suppliers and generators who were free to enter into contracts with each other as they saw fit. Although the government acted to establish barriers to entry to electricity market in the form of licences and regulated the market, the government did not interfere in the establishment of contracts (Newbury and Green, 1996). As such, the British government effectively delegated the delivery of its energy policy the market; a self organizing network. This point was made by a senior policy adviser: “Take North sea oil. We didn’t really do anything, we just sat back and issued the licences and permits and let the market get on with it.”[Senior Policy Advisor A, personal interview, July 2009].

Recently, the British government has come to believe that Britain faces three interconnected problems in respect of its energy policy. The first is that Britain has committed itself to stringent and legally binding reductions in greenhouse gas emissions as part of the 2004 Kyoto Protocol (Carter, 2007). The second is that throughout the 1990’s, Britain came to rely on natural gas from the North sea for power and domestic heating but these supplies are now dwindling (DTI, 2003; Lovell, Bulkeley and Owens, 2009) and Britain is increasingly dependent upon imported natural gas (DTI, 2003; DTI, 2007). Finally, Britain’s nuclear power stations are fast approaching obsolescence (BERR, 2009) and this cause Britain to suffer a shortfall in electricity generating capacity. These power stations cannot be easily replaced without compromising Britain’s commitments under the Kyoto protocol or by increasing Britain’s reliance on imports of natural gas. The seriousness of these problems was expressed in comments by a second senior policy adviser who argued that Britain’s situation made it “...vulnerable...” A senior Environment Agency Official went further and stated that:“There a great link between sustainability and security. If we were in the middle of a very cold winter. How long do you think those trees would last if we lost gas or electricity? Not very long.” [personal interview, October 2008].

Given the gravity of the problems, the British government has come to see energy policy as a strategic issue (Scrase and Ockwell, 2009) and is no longer content to rely upon networks of self-governing private sector companies. As such, the British government has opted to assume a more ‘hands-one’ role in the delivery of its policy goals. Historically, the British government has avoided interfering in the network of relationships that compose the electricity market (see, for example, DTI, 1995a; 1995b). Instead government has preferred to act as a regulator by using legislative instruments to nudge autonomous organizations in the desired direction.

Government can claim nodal status because it has the ability to permit, forbid or restrict the actions of the participants in the network. In other words, it can exercise influence. As such, the intentions of government are carefully monitored by those within the network, a point that a parliamentary policy adviser drew particular attention to: “Government has a voice. Simply by broadcasting its intentions government can change the risk profile that market assigns to particular energy technology.” [Policy Advisor, personal interview, July 2009]. This is consistent with the state-centric view of metagovernance outlined previously but suggests that the communicative abilities of government are actually a product of its legislative authority rather than its possession of democratic legitimacy.

Nuclear power stations take many years to build and have life spans of more than fifty years. As such, would-be nuclear operators are keen to determine whether or not the British government is willing to establish and maintain a policy regime that will continue to support the nuclear industry (Cadoux-Hudson in Wood, 2009). In an effort to promote its policy objective (a revival of nuclear power), the British government has sought to communicate to the private sector that it is supportive of nuclear power. This has involved as sustained attempt to highlight the steps that it has taken such as legislative reform, streamlining of regulation. Civil Servant A [personal interview, December 2009] explained that the purpose of this communication exercise was to “…provide certainty to business….” Furthermore, the government has also enlisted the support of the main opposition party in an effort to communicate to industry that the British body politic is largely united on the issue of nuclear power (Hendry, 2008). In fact, Senior Policy Advisor A went as far as to comment that: “...there is not a cigarette paper between the government and the opposition.

The government’s communication strategy is most effectively understood as a story-telling exercise. This is designed to establish a narrative that Britain is ‘a good place to do business’ - because the political climate is supportive, the regulatory regime is not onerous and that substantial commercial opportunities exist. The apparent success of this strategy can be gauged by the fact that the nuclear industry currently believes that Britain represents the most viable commercial opportunity after the United States (Ward, 2008). Senior Civil Servant A even went as far as to argue that government has successfully: “…built confidence in the nuclear industry. EDF bought British Energy and we have sold the NDA sites and that was something like £4bn. That is a huge sum of money with no possibility of return for ten years.

Hood (1986) and Hood and Margetts (2007) argue that the ability of government to exploit nodality is affected by its credibility. In the case of nuclear power, the British government may not be a particular credible actor as it is deeply divided over nuclear power. Furthermore, whilst the British government is a nodal actor in Britain, the network in which the nuclear power industry is embedded is a multinational network in which other governments are seeking to establish their own claims to nodal status.

The British government is deeply divided over nuclear power and this has caused the government to send mixed signals as to its support for nuclear power. This point was made rather forcefully by a former Cabinet Minister: “Parliament is very divided on this. Both the parties are divided. I raised a question on nuclear power and there were many members of the Tories cheering in support and many of my own side sitting there glumly or shaking their head vigorously.” [Former Minister, personal interview, May 2009]. These divisions are reflected in the government’s policy statements. In the 2003 Energy White Paper (DTI, 2003) nuclear power was largely dismissed as uneconomic and it was argued that the government should promote renewable technologies. This policy was abandoned in 2006 and the government began to promote nuclear power as an alternative to renewable energy sources (DTI, 2006; BERR, 2007; 2008). However, recent government documents such as the UK Renewable Energy Strategy (DECC, 2009a) and UK Low Carbon Transition Plan (DECC, 2009b) place great emphasis on the economic and environmental potential of renewable energy technologies and are far more cautious about nuclear power.

The British government is a nodal actor within the British electricity industry because of its legislative power. As such, its pronouncements are closely monitored in an attempt to divine its intentions and whilst continual shifts in policy may satisfy internal constituencies within government, they undermine the narrative that the British government is committed to nuclear power. The state-centric approach to metagovernance (Bell and Hindmoor, 2009) and the policy tools framework (Hood, 1986) are based on an implicit assumption that government is a unitary entity. The evidence presented above suggests that the government does not speak with a single voice and that when the government is attempting to realise policy in highly sensitive arenas, the very plurality of government reduces its capacity to govern governance.

The British government is not the only government interested in nuclear power (see Baker, 2009). However, nuclear is technology is complicated and the skills and technology is controlled by a few multinational companies. In fact Civil Servant B [personal interview, May 2009] commented that “The nuclear industry is global. You wouldn’t dream of building a nuclear power programme in isolation so we are pretty much linked.” This has created a situation in which governments are scrambling to secure contracts with the nuclear industry. Ward (2008) characterises this situation as “...a race...” To secure its own position and attract the interest of the private sector, the British government has taken to emphasising the scale of the commercial opportunity Britain represents. However, Nuclear Industry expert A [telephone interview, December 2008] offered a rather more sceptical view: “If you listen to presentations by the government, they talk about very large nuclear programmes – 20 to 30 reactor units and the creation of 100,000 jobs; it’s just pie in the sky.” This scepticism can be explained by considering the nature of nuclear industry.

The manufacture of nuclear reactors is, as Senior Policy Advisor A put it: “...a black art of the highest order and Japan is about the only country with the skills.” Therefore, the number of reactors that can be produced in any given year is limited by industrial capacity of the manufacturers in Japan. In the race to secure contracts, Britain is against countries such as China, the United States or the Middle Eastern states and these countries are prepared to spend vast sums on money. This point was acknowledged by Senior Policy Advisor B who noted that “If other countries need to bounce the queue, if they need to accelerate their pace in the race, they just write a big cheque. Well, we’re not in a position to be able to do that.” As such, it can be observed that the nuclear industry is embedded within a multinational network in which there are multiple centres of power competing with one another. The British government cannot credibly claim nodality in such a network as it no longer cast the shadow of hierarchy and lacks the necessary resources to establish a dominant position. In other words, it is less far capable than it first appears.

Authority


By exercising authority, government may permit or restrict actions or reconfigure institutions. Consistent with a state-centric understanding of metagovernance, the British government is using its legislative power to create an institutional environment that is supportive of nuclear power. It is widely believed that Britain’s planning legislation poses a significant barrier to the development of nuclear power stations or any large infrastructure project. As one nuclear industry expert commented:

You get into the mire of planning difficulties. We have seen that in other major projects in the UK and you could be spending inordinate amounts of money on design and preparation and dialogue over the licensing only to find that the planning application gets bogged down. [Nuclear Industry Expert A, telephone interview, March 2009]

Prior to the enactment of the Planning Act (2008) and the creation of the centralised Infrastructure Planning Commission (IPC), local government was responsible for granting planning consent. This created the rather absurd situation in which local government would be asked to decide upon, on the basis on local politics, whether infrastructure of national importance could be constructed. As Senior Civil Servant B scathingly put it: “The first three pages of a planning application go into global warming. That is not something for local councils to go into. Government needs to do that.”

The Planning Act (2008 C. 29, S.5, para. 1a - b) grants government the power to define particular infrastructure projects as national policies by Ministerial fiat. Civil Servant C [personal interview, March 2009] was explicit on this “The intention is that you have one debate over whether or not you have nuclear power and a series of [local] debates that are site specific.” However, it should be noted that throughout Britain’s nuclear programme, local councils were highly supportive of the development of nuclear power stations (see Williams, 1980 or O’Riordan, Kemp and Purdue, 1988). As such, the government’s belief that centralisation was necessary to bypass uncooperative local authorities is simply not supported by the historical record. If approached in state-centric metagovernance terms, the British government’s decision to centralise the planning system can be explained. To ensure a revival of nuclear power, the government must provide ‘certainty’ to the nuclear industry by demonstrating the existence of a benign policy regime. The senior Environment Agency Official interviewed explained that: “... [n]o-one is going to shell out the billions necessary to build nuclear reactors without been sure that there is a likely outcome of the planning process.” As such, the power of the state is deployed to remove, as Civil Servant A put it “…any unnecessary obstacles…”

State-central metagovernance is based on an implicit belief in state sovereignty and a belief that the capable state can govern by legislative fiat. The empirical case suggests this displays a rather unsophisticated view of the relationship between the government and the judiciary in a modern democratic state. Although the nuclear industry is subject to the domestic legal systems of the countries in which it operates, it is also subject to international legislation and regulation from the International Atomic Energy Agency and the European Union [EU]. Whilst a state can ignore international regulation (e.g. Iran), it is unthinkable that a modern democratic state would violate international law in such a manner. As such, the multilevel nature of the nuclear industry imposes a significant constraint to the ability of the British government to invoke authority (see Hoodge and Marks, 2001 for more discussion on the impact of multilevel networks). As Civil Servant C noted: “European legislation requires governments to justify any major impact of any major project that has benefits and risks and justify that it makes sense.

A second barrier to the British government’s ability to metagovern by exercising authority is that it is subject to its own laws and is embedded within a system of checks and balances. In Britain, government decisions can be subject to legal challenge if it shown that the government has acted in a manner that is fundamentally incompatible with its own procedures statutory duties or existing legislation. This is particularly relevant in the case of nuclear power as there over 500 individual legislative instruments that govern the possession, use and disposal of radioactive and nuclear materials in Britain. As such, the sheer complexity of the legislation creates numerous opportunities for government decisions to be challenged because compliance with more than 500 pieces of legislation is very difficult. As Senior Civil Servant A acknowledge: “Some of the decisions [we make] may be open to legal challenge but you can’t do everything so perfect that there is no possibility of challenge. As such, government’s understandable mistakes will provide ample opportunity for those opposed to nuclear power to launch legal challenges

Treasure


A state-centric view of metagovernance argues that government has access to vast resources that it can use to promote its policies. Usually government can simply deploy financial resources to secure its objectives. In the case of nuclear power, it is simply unnecessary for government to offer financial support to the nuclear industry because the nuclear industry is dominated by huge multinational corporations. Senior Civil Servant B commented that: “Nuclear new build is game for big companies. EDF is Europe’s largest utility. It’s a hundred-and-fifty billion Euro company and RWA and E.oN who have bought the NDA sites are hundred billion Euro companies.”

Although, the British government cannot use financial resources to influence the nuclear industry directly, it has access to other resources such as land. The most attractive sites for the development of new nuclear power stations are former nuclear sites because these sites have pre-existing connections to the electricity grid (BERR, 2009c). In Britain, former nuclear sites are owned by the Nuclear Decommissioning Authority or NDA. The NDA is a non-departmental agency controlled by the government (NDA, 2009) and this has granted the government access to another form of treasure. As Senior Policy Advisor B explained:

[The NDA] owns a lot of land, and a lot of the land is prime site for nuclear new build in the UK. So it had a whole bunch of assets, and we were quite instrumental in trying to make sure that those assets became available for potential investors.

The ability of the government to metagovern through treasure is restricted by the physical structure of the electricity grid and the corporate operations of the private company that manages the grid. Britain’s electricity grid is not a single unitary system but is more accurately understood as several regional grids linked together (Chessire, 1996; Thomas, 2006). The grid itself is owned and managed by a private company – National Grid – which charges electricity supply utilities for access to the electricity distribution grid (National Grid, 2008/9). The National Grid’s fee structure is based on a complicated formula which levies charges upon electricity generators based upon the costs of managing the distribution of the electricity (National Grid, 2009). As it is easier to manage the distribution of electricity within a single grid rather than across several regional grids, National Grid charges lower fees if the electricity does not have far to travel. This creates an incentive for electricity supply companies to build power stations as close as possible to regions where there is demand for electricity.

The south of England accounts for around one third of Britain’s electricity demand and the highest population density (Office of National Statistics, 2001; DECC, 2008). Therefore, the most desirable land for building nuclear power stations is in the south of England. This led Nuclear Industry Expert A to comment that: “...as soon as you start loading [new] combinations onto the grid in the South of England, you have a serious risk of destabilising the grid. OFGEM and National Grid are really worried about it.” As the British electricity industry is a privatised system, the electricity generators are not responsible for the stability of the grid whilst the organization(s) that are responsible for the stability of the grid are not responsible for the actions that may destabilise the grid. This leads to the rather ironic situation in which the government’s attempts to assist the private sector in an effort to promote nuclear power to address an electricity shortage effectively undermining the stability of the distribution system.

A state-centric view of metagovernance assumes that when government exchanges treasure, the outcomes of these exchanges is progress towards the government’s agenda. As such, it is assumed that treasure grants the government control. The empirical case study has suggested that the deployment of treasure – in the form of land – simply grants the British government an ability to influence (rather crudely) the decisions of private sector companies. However, the complexity of the electricity supply system requires a greater degree of control than the British government is capable of exercising given the policy instruments that it has to hand.

Organizational Capacity



A capable state has access to considerable administrative and organizational capacity which can be deployed in support of government policy by enabling the actions of those that government wishes to metagovern. The society-centric view of metagovernance argues that the state is value neutral and seeks to enable outcomes regardless of its own preferences (Sørensen, 2006; Sørensen and Torfing, 2009). The state-centric view of metagovernance would argue that the state is a strategic, self interested actor. For example, Sørensen and Torfing (2009) suggest a government may seek to lower the transaction costs for all parties. A state-centric view, by contrast, would suggest that government’s willingness to lower transaction costs of interacting parties is conditional upon the willingness of those parties to advance government’s policy goals. This can be observed in the empirical case study.

In Britain, nuclear power is overseen by a multitude of different organizations ranging from the Health and Safety Executive (HSE), the Environment Agency, Office of Civil Nuclear Security and the UK Safeguards Office. Furthermore, prior to passage of the 2008 Planning Act, would-be nuclear operators also had to interact with local authorities to obtain planning permission. The transaction costs involved in interacting with all these different organizations is considerable (see Williamson, 1975; 1987). In an effort to simplify the number of different organizations that would-be nuclear investors must work with, the British government has created the Office of Nuclear Development (OND). The OND is designed to serve, as Civil Servant A put it, as a “…one stop shop for industry…” and to “…act as a liaison between the different parts of government. We look to make the process work.” In other words, the nuclear industry interacts with the OND and the government itself incurs the transactions costs. As such, the British government uses its organizational capacity to reduce the costs the nuclear industry may face and by doing so makes Britain appear to be more attractive within the global market.

To operate a nuclear power station in Britain, a nuclear operator’s licence is required. These licences are issued by the Nuclear Installations Inspectorate (NII) which is part of the Health and Safety Executive. The process of licensing a nuclear reactor is a time consuming one in which the NII assesses each individual reactor on its own merits and considers every aspect of the reactor’s design and proposed operation an effort to determine if the design is as safe as possible. This requires that the reactor designer and the would-be nuclear operator engage in lengthy dialogues with the NII and if the NII is not convinced by the arguments it receives, it can mandate that changes be made (1965 Nuclear Installations Act). However, the costs of altering an established reactor design are considerable as new equipment and parts must be purchased (see O’Riordan et al., 1988). As such, the nuclear industry is faced with an expensive and uncertain process.

To address these issues, the British government proposed a system of ‘pre-licensing.’ This would involve the NII examining and licensing a specific reactor design and allowing industry to construct future reactors ‘off the shelf’ without reference to regulation. However, Nuclear Inspector A [personal interview, August 2008] explained that: “Politicians were talking about pre-licensing without knowing what it meant. They wanted a system of pre-licensing like the Americans and you could take a design off the shelf.” Nuclear Inspector B [personal interview, August 2008] explained that British nuclear regulation is based on the principle of “…As Low As Reasonably Achievable…” and this is a principle that cuts across the entirety of British regulation and regulatory practice. In other words, the British government would have to change the entirety of British health and safety regulation which would be extremely difficult. It is worth noting that the comments of the two nuclear inspectors offer support for the previous argument that the ability of government to metagovern by authority may be limited by legislative complexity.

Although pre-licensing is impossible, the British government pressured the NII to develop a similar procedure and this led to the development of the Generic Design Assessment [GDA]. In the GDA process, the NII communicates to the would-be nuclear vendors the criteria under which their reactor and power station designs will be assessed and the standards they must achieved to receive a nuclear operator’s licence. As Nuclear Inspector B explained: “What you see is a series of testings. We ask them: Why can’t you go that bit further? They will come back and say we have looked at it and it causes problems elsewhere or perhaps the cost is disproportionate.” As the NII is simply assessing designs in the GDA process, any problems can be detected and changes made before the reactor is constructed. As such, it is believed that the GDA process will reduce costs.

There are three principle barriers to the British government’s attempts to leverage its organizational capacity in support of the nuclear industry. The first is that the GDA process is unique in global nuclear regulation. The second barrier is that the NII is short of manpower and third barrier is that the relationships between the different government departments and agencies involved in nuclear regulation are far from harmonious.

The majority of countries operate prescriptive systems of nuclear regulation based on the American model. Whilst the GDA process is not especially costly in and of itself, the NII has a tendency to demand information far beyond that which is required in most countries give that they are seeking to reconstruct “…the decision-process…” In fact, Nuclear Inspector B explained that the nuclear industry has found it “…difficult to put themselves in the place of the regulator…” and that the GDA demands information that is “…very different to what they provide for their own regulator.” Therefore, it might be argued that the GDA creates actually increases the transaction costs that industry faces.

The NII is a small organization and the majority of its inspectors are former employees of the [nationalised] nuclear industry. This gave the NII an unparalleled understanding of the operation of the British designed reactors that form the majority of the British reactor fleet (Williams, 1980). As no-one has sought to construct a nuclear reactor in Britain since Sizewell B, there was no incentive for the NII to expand their recruitment (Weightman, 2008). As Nuclear Inspector C [telephone interview, August 2008] commented “…there is a shortage of staff, it’s well documented [and] it’s exacerbated by the need to do these assessments.” Nuclear Inspector B was more forthright and commented that: “…to put it in perspective, the American Nuclear Regulatory Agency has 430 people at the moment. We have 16 so far and we are ramping it up to twice that.” Although the NII possesses an expert staff, it is hard to believe that 32 people could assess multiple reactors designs quickly enough for Britain to begin construction of the nuclear power stations it needs to avoid an electricity shortage.

Although the OND is attempting to coordinate the actions of a multitude of different department, these departments and agencies are actually involved in a classic bureaucratic competition for control (see Downs, 1967; Nicholson-Crotty, 2005). This can be well illustrated by the reactions of the Environment Agency and the NII to an event1 at the Sizewell A nuclear power Station. The NII is formally responsible for the regulation of the operation of nuclear power stations (1965 Nuclear Installations Act) whilst the Environment Agency has authority over releases of radioactive material off-site (1993 Radioactive Substances Act). In 2007, a leak in a water pipe delivering water to a spent fuel storage pond developed a leak and an alarm that would trigger in the event of falling water levels failed to sound (World Nuclear News, 2009). The leak was swiftly detected and fixed and was ranked at 1out of a 7 (the lowest possible score) on the International Nuclear Event Scale. However, the NII deemed the event serious enough to investigate but did not opt to prosecute given that the event was minor and very little radiation was released (HSE, 2007 in Large, 2009). This decision was not supported by the Environment Agency who considered their own prosecution under the 1993 Radioactive Substances Act (Sizewell Stakeholders Group, 2008). This is despite the Environment Agency’s lack of jurisdiction over a nuclear site. The NII claims that throughout its investigation, it worked closely with the Environment Agency (HSE 2009) but this is simply not supported by the Environment Agency’s statements at the Sizewell Stakeholder’s Group. It is hard to see how the OND can coordinate the different organizations involved in nuclear regulation for the benefit of the nuclear industry if they are in competition with each other. To paraphrase Civil Servant A, the process does not appear to work

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