Environmental groups today lost the latest round of their legal battle to block the opening of a controversial nuclear reprocessing plant.
Three Court of Appeal judges rejected an appeal brought by Friends of the Earth and Greenpeace over a High Court ruling on November 15 that the Government had made "no error of law" in giving the go–ahead for the opening of the mixed plutonium and uranium oxide (MOX) plant at Sellafield in Cumbria.
Lords Justices Simon Brown, Waller and Dyson unanimously dismissed the appeal at a hearing in London.
Objectors argue that the Secretary of State for the Environment, Food and Rural Affairs and the Secretary of State for Health, took a "distorted" view last month when they decided that allowing the introduction of MOX was "economically justified" under European Union law.
Environmental groups fear the Sellafield scheme could lead to pollution, and also become a target for terrorists or theft of nuclear materials.
Lord Justice Simon Brown said he would make no order for costs of the appeal against the groups as there were two special features of the case.
The first was that the "public interest in this particular area of public health and well–being is obviously very great and very exceptional" and the second was that the appellants had succeeded on "one important point of principle".
During the appeal the environmental groups had argued that the Government's decision that the MOX plant was "economically justified" was based on distorted figures and that £470 million construction costs for the plant were "ignored and disregarded" in assessing its benefits.
Lord Justice Simon Brown said the groups had contended that in evaluating the economic benefits the Secretaries of State "failed to take into account the capital costs inherent in the practice".
He said BNFL, which appeared in the proceedings as an interested party, "intend if possible to take 'irreversible implementation steps' on December 20 2001. Hence the need to decide the challenge urgently".
Rejecting one of the grounds of the High Court decision, Lord Justice Simon Brown said the groups had rightly argued on appeal that "the capital costs inherent in a new type of practice (mainly no doubt the costs of constructing the necessary plant) are indeed a cost of the practice and relevant, therefore, when evaluating the overall economic benefit (or detriment) likely to result from adopting the practice".
He added: "Assume, for example, that approval were sought to operate a number of nuclear power stations and that no such stations had previously been constructed.
"To my mind it could not reasonably be suggested that the capital costs of the project should simply be ignored."
But he said the "critical" question was: What if the capital costs have already been expended?
The appeal judges decided that as SMP was likely to be the only MOX plant built in this country there was no requirement for the Government to take into account the costs of construction that had already been incurred (the 'sunk' costs).
Lord Justice Simon Brown said: "It cannot, in my judgment, be said that the Secretaries of State were bound to take into account costs which had already been incurred in constructing SMP, which plainly cannot be recovered, and which equally plainly are not going to be incurred anywhere else.
"Secretaries of State are entitled to decide these cases in the real world.
"To bring into account sunk costs on the fictional basis that equivalent costs would be incurred were approval to be invoked to operate the practice elsewhere in the future would be absurd. It would be to sacrifice reason on the altar of blind theory."
After the ruling the environmental groups involved in the action said they had won a "partial victory".
In a statement they said: "Friends of the Earth and Greenpeace have overturned an important part of last month's controversial High Court ruling that the Government had lawfully given the Sellafield MOX plant the green light.
"But the MOX plant can still open, despite the fact that it will never recover its costs and that it represents a serious threat to public safety."
The statement added: "The Court of Appeal's decision means that in future, before any new nuclear project can go ahead, the construction and other capital costs will have to be taken into account when deciding if the practice is economically beneficial."
Charles Secrett, executive director of Friends of the Earth, said: "We are pleased that the Appeal Court has overturned the worst features of the High Court's judgment. But we are angry that this pointless, dangerous and uneconomic MOX plant is still on course to open.
"Nobody wants MOX and nobody needs it. It will simply encourage nuclear proliferation, increase nuclear pollution and threaten public safety.
"It is not too late for the Government to see sense over MOX and change its mind."
Stephen Tindale, executive director of Greenpeace UK, commented: "The Government argued in court that the MOX plant made economic sense and then promptly declared the plant a liability. They can't have it both ways.
"The Government has no commonsense justification for opening a plant that would only serve to spread plutonium around the world and increase the danger of nuclear terrorism."
BNFL said in a statement following the ruling: "BNFL is pleased that the Appeal Court has backed the decision of the High Court and rejected the Friends of the Earth and Greenpeace claims.
"This is further support that the operation of the Sellafield MOX Plant (SMP) is justified. We now have three judgments in favour of operating the plant within the last three weeks.
"This is excellent news for the plant, the workforce and the local community. It is time to let us get on with the important job of manufacturing MOX fuel for our customers."