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South Korea's 'nuclear mafia'

Nuclear Monitor Issue: 
#844
4649
25/05/2017
Jim Green ‒ Nuclear Monitor editor.
Article

In May 2012, five engineers were charged with covering up a potentially dangerous power failure at the Kori-1 reactor which led to a rapid rise in the reactor core temperature.1 The accident occurred because of a failure to follow safety procedures. A manager decided to conceal the incident and to delete records, despite a legal obligation to notify the Nuclear Safety and Security Commission.

Then in November 2012, a much bigger and broader scandal emerged involving fake safety certifications for reactor parts, sub-standard reactor parts, and bribery.2,3

Here's a bland summary of the scandal from the World Nuclear Association:4

"In 2012 KHNP [Korea Hydro & Nuclear Power] discovered that it had been supplied with falsely-certified non-safety-critical parts for at least five power reactors. The utility told the ministry that eight unnamed suppliers – reportedly seven domestic companies and one US company – forged some 60 quality control certificates covering 7682 components delivered between 2003 and 2012. The majority of the parts were installed at Hanbit (Yonggwang) units 5 and 6, while the rest were used at Hanbit units 3 and 4 and Hanul (Ulchin) unit 3. Hanbit units were taken offline while the parts were replaced.

"Then in May 2013 safety-related control cabling with falsified documentation was found to have been installed at four reactors. The NSSC [Nuclear Safety and Security Commission] ordered KHNP immediately to stop operation of its Shin Kori 2 and Shin Wolsong 1 units and to keep Shin Kori 1, which has been offline for scheduled maintenance, shut down. In addition, the newly-constructed Shin Wolsong 2, which was awaiting approval to start commercial operation, could not start up. All would remain closed until the cabling has been replaced, which was expected to take about four months. Shin Kori 1&2 and Shin Wolsong 1 were cleared to restart in January 2014. Completion of Shin Kori 3&4 was delayed, to 2015, due to the need to replace control cabling which failed tests. In October 2013 about 100 people were indicted for their part in the falsification of documentation."

The Korea Institute of Nuclear Safety states:5

  • A total of 2,114 test reports were falsified: 247 test reports in relation to replaced parts for 23 reactors, an additional 944 falsifications in relation to 'items' for three recently commissioned reactors, and 923 falsifications in relation to 'items' for five reactors under construction.
  • Results were 'unidentified' for an additional 3,408 test reports ‒ presumably it was impossible to assess whether or not the reports were falsified.
  • Twenty-nine of the forgeries concerned 'seismic qualification', with the legitimacy of a further 43 seismic reports 'unclear'.
  • Over 7,500 reactor parts were replaced in the aftermath of the scandal.

Safety-related equipment was installed on the basis of falsified documentation, and according to a whistleblower, equipment had actually failed under Loss-Of-Coolant-Accident conditions during at least one concealed test.6

The situation in Korea was much the same as that in Japan prior to the Fukushima disaster ‒ except that Japan's corrupt nuclear establishment is known as the 'nuclear village'7 whereas South Korea's corrupt nuclear establishment is known as the 'nuclear mafia'.8

A 2014 parliamentary audit revealed that the temporary suspension of the operations of nuclear power plants after the scandal caused the loss of 10 trillion won (US$8.9 billion).9 It also led to power shortages that contributed to growing public opposition to the nuclear industry.

Nuclear lobbyist Will Davis wrote this summary of the scandals in 2014:10

"Electing for brevity, suffice it to say that various schemes to advance the position of persons or companies in the South Korean nuclear industry have resulted in substandard parts being employed (particularly cable supplied by JS Cable, a company that is presently being liquidated), false quality assurance certificates being filed, and various collusion/bribery schemes among varied personnel at contractors and in the KHNP universe of subsidiaries ‒ with involvement reaching even to the highest (former) executives.

"While the true extent and nature of these corrupt activities began to be illuminated only at the end of 2011, in fact the activities stretched far prior; a recent article in the Korea Herald noted that JS Cable failed to obtain certification for nuclear parts for its product twice in 2004, and then somehow immediately made a sale of such equipment for a total of 5.5 billion won (US$5.06 million). That cabling was eventually found to be defective when it triggered shutdowns at two nuclear plants, in May 2013. Many corporate offices (including those of KHNP) were raided throughout the summer, and many arrests made ‒ arrests that included a former president of KHNP.

"Much more than cable from one company has been implicated; implicated parts (questionable parts, or questionable certifications, or both) were thought to possibly be in service at as many as 11 nuclear plants in South Korea. A massive program to find all such parts and associated companies and persons was launched and pressed with a vigor and aggression not normally seen in industrially related investigations."

The corruption also affected South Korea's reactor construction project in the United Arab Emirates.11 Hyundai Heavy Industries employees offered bribes to KHNP officials in charge of the supply of parts for reactors to be exported to the UAE.

The New York Times reported in August 2013 that despite the government's pledge to ban parts suppliers found to have falsified documents from bidding again for 10 years, KHNP imposed only a six-month penalty for such suppliers.12 The New York Times continued: "And nuclear opponents say that more fundamental changes are needed in the regulatory system, pointing out that one of the government’s main regulating arms, the Korea Institute of Nuclear Safety, gets 60 percent of its annual budget from Korea Hydro."12

Worse still, a 2014 parliamentary audit revealed that some officials fired from KEPCO E&C (Korea Electric Power Corporation Engineering and Construction) over the scandals were rehired.9

The scandal was still on the boil in 2014. Korea Times reported on 25 June 2014:8

"The government has discovered irregularities yet again that could threaten the safety of nuclear reactors. This time, the perpetrators are parts suppliers that presented fake quality certificates in the course of replacing antiquated parts used in nuclear power plants. Six state testing facilities were also found to have failed to conduct adequate tests before issuing certificates. A two-month audit of the six testing facilities by the Ministry of Trade, Industry and Energy showed that 39 quality certificates presented by 24 companies were fabricated. ...

"Most disheartening in the latest revelation of irregularities is that the state-run certifiers failed to detect fabrications by skipping the required double-testing. ... Given the magnitude of corruption in the nuclear industry arising from its intrinsic nature of being closed, the first step toward safety should be to break the deep-seated food chain created by the so-called nuclear mafia, which will help enhance transparency ultimately. With the prosecution set to investigate the suppliers, the certifiers will face business suspension. But it's imperative to toughen penalties for them, considering that light punitive measures have stood behind the lingering corruption in the nuclear industry. "

Opposition to South Korea's corrupt 'nuclear mafia' feeds into broader concerns about corruption. Japan Times reported on 10 May 2017: "Opinion polls taken just before the election showed that the top concern for the country’s voters was “deep-rooted corruption" and a desire to promote reform; second on that list was economic revival. If Moon is to succeed in those tasks, he must tackle the chaebol, the huge industrial conglomerates that dominate the South Korean economy and have outsized influence in its politics."13

Japan's corrupt 'nuclear village' survived the political fallout of the Fukushima disaster and is back in charge.14 It would be naïve to imagine that the tepid response to South Korea's scandals has done away with the nuclear mafia once and for all.

References:

1. Nuclear Monitor #765, 1 Aug 2013, 'South Korea: Nuclear scandal widens', www.wiseinternational.org/nuclear-monitor/765/nuclear-news

2. Nuclear Monitor #771, 2 Nov 2013, 'South Korea indicts 100 people over safety scandals', www.wiseinternational.org/nuclear-monitor/771/south-korea-indicts-100-pe...

3. Nuclear Monitor #765, 1 Aug 2013, 'South Korea: Nuclear scandal widens',

www.wiseinternational.org/nuclear-monitor/765/nuclear-news

4. World Nuclear Association, Feb 2017, 'Nuclear Power in South Korea', www.world-nuclear.org/information-library/country-profiles/countries-o-s...

5. Korea Institute of Nuclear Safety, www.kins.re.kr/en/ourwork/cfsi.jsp

6. Mycle Schneider, Antony Froggatt et al., 2016, World Nuclear Industry Status Report 2016, www.worldnuclearreport.org or direct download: www.worldnuclearreport.org/IMG/pdf/20160713MSC-WNISR2016V2-HR.pdf

7. Friends of the Earth, March 2012, 'Japan's Nuclear Scandals and the Fukushima Disaster', http://archive.foe.org.au/sites/default/files/FUKUSHIMA_BRIEFING_MARCH_2...

8. Korea Times, 25 June 2016, 'Fake certificates again', http://koreatimes.co.kr/www/news/opinon/2014/06/137_159789.html

9. Se Young Jang, 8 Oct 2015, 'The Repercussions of South Korea’s Pro-Nuclear Energy Policy', http://thediplomat.com/2015/10/the-repercussions-of-south-koreas-pro-nuc...

10. Will Davis, 6 Feb 2014, 'South Korea nuclear power: Are the dark times over?', http://ansnuclearcafe.org/2014/02/06/south-korea-nuclear-power-are-the-d...

11. Choi Kyong-ae, 12 Jan 2014, 'Hyundai Heavy vows to root out corruption', http://koreatimes.co.kr/www/news/biz/2014/01/602_149613.html

12. Choe Sang-hun, 3 Aug 2013, 'Scandal in South Korea Over Nuclear Revelations', www.nytimes.com/2013/08/04/world/asia/scandal-in-south-korea-over-nuclea...

13. Japan Times, 10 May 2017, 'The pendulum swings in South Korea', www.japantimes.co.jp/opinion/2017/05/10/editorials/pendulum-swings-south...

14. Nuclear Monitor #800, 19 March 2015, 'Japan's 'nuclear village' reasserting control', www.wiseinternational.org/nuclear-monitor/800/japans-nuclear-village-rea...

Twists and turns in South Africa's nuclear power program

Nuclear Monitor Issue: 
#835
4607
06/12/2016
Jim Green ‒ Nuclear Monitor editor
Article

A draft energy plan recommends that South Africa's nuclear power program should be deferred ‒ yet state-owned utility Eskom wants to press ahead.

A draft of the government's Integrated Resource Plan (IRP) proposes increasing nuclear power capacity by as little as 1.36 gigawatts (GW) by 2037, compared to a previous target of adding 9.6 GW of new capacity by 2030.1 Start-up of new reactors is pushed back from 2023 in the 2010 IRP to as late as 2037. The government cited additional generation capacity, lower demand forecasts and changes in technology costs among the reasons for the revisions.2

Energy spokesperson Gordon Mackay from the largest opposition party, the Democratic Alliance (DA), said the draft IRP "deals a serious blow to President Zuma's attempts to finalise a corrupt and unnecessary nuclear deal. The Minister [Tina Joemat-Pettersson] must be commended for her bravery in standing against the prevailing winds of state capture and bequeathing the South African people the legal and statutory basis to challenge an irrational and ruinous nuclear deal."3

The 2010 IRP promoted nuclear power but the 2013 IRP did not ‒ it suggested that any decision on nuclear should be deferred well into the future. However the 2013 IRP was never adopted and so only has unofficial status.4,5 Given that history, it is an open question whether the draft 2016 IRP will be accepted. The plan is for the draft IRP to be revised by March next year and then submitted to the cabinet for final sign-off.6

Eskom, which will procure, own and operate new nuclear plants, said it will still issue a 'Request for Proposals' (RFP) from international nuclear vendors by the end of this year. Eskom cited the long lead-time to build nuclear plants to justify its decision, and said that testing the market with a RFP is not the same as entering a contract. The utility said its plans are closely aligned to the 2016 IRP, but in fact Eskom envisages 6.8 GW of new nuclear capacity by 2030.7

Whether a RFP will elicit any responses in the current political environment is an open question. Numerous vendors have expressed interest in recent years, but the nuclear program is now shrouded in allegations of corruption, and President Jacob Zuma's days are numbered. Johan Muller from the Frost & Sullivan consultancy told Reuters: "If I was an investor or project developer in the nuclear space, I would not pick up a pen before the IRP is finalised next year to submit any request for proposals, specifically considering the dark cloud hanging over the nuclear program with alleged corrupt relationships."2

Democratic Alliance spokesperson Gordon Mackay said the RFP should be deferred until the IRP has passed public consultation and been adopted by Parliament. He further noted that the RFP would be open to legal challenge as it would be issued "on the basis of an outdated and legally dubious Section 34 Ministerial determination, itself based on the much maligned and now out of date IRP 2010".8

Business 'delighted'

Hardly anyone supports South Africa's nuclear power program other than the corporates and kleptocrats who stand to directly benefit from it. Business interests, other than those with a direct interest, are overwhelmingly opposed.

The rand strengthened on the news that nuclear power was downgraded and deferred under the draft IRP.9

The Cape Chamber of Commerce and Industry said it is "delighted to see that the new Integrated Resource Plan (IRP 2016) says there is no need for more nuclear power in South Africa before 2037". Chamber President Janine Myburgh said: "This means that we will not have to make a decision on building new nuclear power stations for the next 10 years and by that time we will be in a better position to judge the performance and cost of renewable energy."10

The Cape Chamber added that "one worrying factor about the new IRP was that it did not include a scenario in which there were no artificial restraints on renewable energy and the effect this would have on the case for nuclear power." The draft IRP imposes annual limits on the installation of new renewable power capacity.

Dawie Roodt, an economist formerly with South African Reserve Bank, said: "We don't even need a deal like this to sink the South African economy. We are already in seriously deep trouble. If you add this to the economy, I'm afraid it's going to be fatal. This nuclear deal cannot happen now. You cannot enter into an agreement with anybody else at this stage because there's too much homework that we need to complete first."11

Responding to the draft 2016 IRP's downgrading and deferral of nuclear power, Jana Van Deventer, an economic analyst at ETM Analytics in Johannesburg, said: "It's been postponed so far down the line that by the time we get there nuclear energy might possibly be obsolete and not be a viable option anymore. This latest development potentially means that any nuclear power deal is off the table for the time being."9

The rise and fall of President Jacob Zuma

The likely deferral of the nuclear program is inevitably seen through the prism of President Zuma's fortunes. Zuma is scheduled to step down as leader of the governing African National Congress next year, and his second and final term as president ends in 2019.

Zuma may not last that long: he faces internal revolt within the ANC and so-far unsuccessful votes of no confidence in Parliament.12,13

Bloomberg reported: "South Africa's decision to stall plans championed by President Jacob Zuma to build nuclear plants has exposed his waning authority. ... While Zuma says reactors are key to addressing power constraints in Africa's most-industrialized economy, Finance Minister Pravin Gordhan, economists and ratings companies warn that South Africa can't afford them now."14

If Zuma had his way, the most likely outcome is that Finance Minister Pravin Gordhan would have been pushed aside (indeed he never would have been appointed in the first place), the draft IRP would never have been released, and the nuclear program would be moving ahead at pace.

Robert Schrire, a politics professor at the University of Cape Town, said: "Essentially the project has been indefinitely postponed and the final decision on nuclear power will only be taken by Zuma's successor. This is a great victory for economic rationality and political expediency and reflects the new political balance of a weakened Zuma administration."14

Keith Gottschalk, a political scientist from the University of the Western Cape in Cape Town, said Zuma is "still able to out-vote and out-maneuver his opponents in the ANC, but the mounting pressure has meant he has not been able to always get his own way all the time. He is on the way down like a slow-leaking puncture."14

Corruption

The nuclear debate is occurring in the context of a wide-ranging debate over corruption. On November 2, the Office of the Public Protector released a State of Capture report that details evidence of corruption and is critical of the executive for failing to act on claims that there had been interference in the appointment of cabinet ministers.15 The report orders Zuma to appoint a commission of inquiry within 30 days and for it to be headed by a judge who has the same powers as the public protector.

Hartmut Winkler, Professor of Physics at the University of Johannesburg, said: "Unsurprisingly, the nuclear industry and its supporters have reacted very negatively to the new draft [IRP]. Strong nuclear advocates in the state electricity utility Eskom have gone so far as to defiantly declare that they will invite nuclear construction proposals before the end of the year. But Eskom's defiance is unlikely to lead to anything substantial. This is because the state utility is facing both a credibility crisis and its finances are in poor shape."16

Eskom's 'credibility crisis' relates to, among other things, evidence of its questionable and possibly illegal dealings with the powerful Gupta family and Gupta associates.17

Another issue taken up in the State of Capture report concerns the dismissal and appointment of a succession of finance ministers.18 On 9 December 2015, Zuma sacked finance minister Nhlanhla Nene, who said he wouldn't sign off on the 9.6 GW nuclear program if it was unaffordable, and wouldn't be swayed by political meddling. Nene was replaced by little-known backbencher David van Rooyen. The rand plummeted. Four days later, Zuma was forced to replace van Rooyen with Pravin Gordhan. According to the State of Capture report, the mystery of van Rooyen's appointment was connected to the Gupta family wielding undue political influence.14,19

In November 2016, prosecutors withdrew fraud charges against Gordhan for allegedly approving a pension payment to a tax agency official. The Democratic Alliance alleged that Zuma planned to use the court case as a pretext for firing Gordhan and in the process removing the biggest obstacle to his nuclear ambitions.14

Mmusi Maimane, leader of the Democratic Alliance, said: "South Africans should be deeply concerned about the government's nuclear project. Let's be clear. It is in no way motivated by a genuine desire to secure South Africa's energy future in the most cost effective and sustainable way. Rather, this huge project is going ahead because Zuma, the Guptas and other ANC elites stand to make millions in bribes and tenders. ... In forging ahead with this ill-conceived plan, our hapless government is locking SA into an over-priced, outdated technology within Eskom's monopoly, while blocking the development of renewables which are dynamic, increasingly cost-effective and more job-creating."20

Jackie Cameron sums up the current, sad situation in Biznews: "The twists and turns in the political stories unfolding in South Africa read like an over-the-top action thriller. There are allegations of deals struck in secret between President Jacob Zuma and Russian heavyweights. Then there are suspicions that the president's associates, including three brothers from India, have been involved in a chess-style plot to seize control of South Africa's state organisations. This strategy is going so well, the narrative goes, that billions of rands have been siphoned out of government coffers. Add to the mix an antagonist in the form of fearless Public Protector Thuli Madonsela, who has been working tirelessly in the face of intimidation to unpack the deception. And, let's not forget an economic superman in the form of finance minister Pravin Gordhan, who is believed to be blocking a deal with Russia – and stands between South Africa and the end of the world as we know it."21

Perhaps the nuclear program will die when Zuma's presidency ends ... or perhaps there are enough kleptocrats inside the government and the state apparatus to keep it alive. Keith Gottschalk from the University of the Western Cape takes the optimistic view: "The biggest consequence of Zuma's removal would be that his cronies and agents in state departments and parastatals would be purged. This would mean the end of Zuma's reign, heralding a new era of honest government and better use of taxpayers' money."22

References:

1. Department of Energy, 2016, 'Integrated Resource Plan, www.energy.gov.za/IRP/irp-2016.html and www.gpwonline.co.za/Gazettes/Gazettes/40445_25-11_NationalGovernment.pdf

2. Reuters, 22 Nov 2016, 'South Africa slows nuclear power expansion plans', www.reuters.com/article/us-safrica-power-idUSKBN13H180

3. Gordon Mackay, 22 Nov 2016, 'It's DoE vs Eskom as Integrated Resource Plan says no to nuclear – Gordon Mackay', www.politicsweb.co.za/politics/its-doe-vs-eskom-as-integrated-resource-p...

4. 25 Nov 2016, 'South Africa: Understanding the Court Challenge to the Nuclear Deal', http://allafrica.com/stories/201611250810.html

5. Anton van Dalsen, 19 Nov 2016, 'The govt's policy on nuclear power', www.politicsweb.co.za/opinion/the-govts-policy-on-nuclear-power

6. Paul Vecchiatto and Michael Cohen / Bloomberg, 22 Nov 2016, 'South Africa Slows Nuclear Plans as Rating Assessments Loom', www.bloomberg.com/news/articles/2016-11-22/south-africa-delays-nuclear-p...

7. 7. WNN, 23 Nov 2016, 'Eskom procurement plan unchanged by lower capacity target', www.world-nuclear-news.org/NP-Eskom-procurement-plan-unchanged-by-lower-...

8. Gordon Mackay, 23 Nov 2016, 'Nuclear deal: Eskom must suspend Request for Proposals', www.politicsweb.co.za/politics/nuclear-deal-eskom-must-suspend-request-f...

9. Xola Potelwa, 22 Nov 2016, 'Rand Leads Currency Gains as South Africa Delays Nuclear Program', www.bloomberg.com/news/articles/2016-11-22/rand-leads-currency-gains-as-...

10. Dean Le Grange, 23 Nov 2016, 'IRP says no need for more nuclear power – Janine Myburgh', www.politicsweb.co.za/politics/irp-says-no-need-for-more-nuclear-power--...

11. 15 Sept 2016, 'Brilliant – How Zupta's nuclear deal will sink SA', www.biznews.com/sa-investing/2016/09/15/brilliant-how-zuptas-nuclear-dea...

12. 29 Nov 2016, 'The enemy wants to jail me, Zuma tells NEC', www.vocfm.co.za/enemy-wants-jail-zuma-tells-nec/

13. Peter Dube, 30 Nov 2016, 'Zuma survives ouster bid but faces vote of no confidence', www.nation.co.ke/news/africa/1066-3469260-format-xhtml-mlruggz/index.html

14. Michael Cohen and Paul Vecchiatto, 23 Nov 2016, 'Zuma's Waning Power Exposed by Stalled South Africa Nuclear Plan', www.bloomberg.com/news/articles/2016-11-23/zuma-s-waning-power-exposed-b...

15. 14 Oct 2016, 'State of Capture', a Report of the Public Protector, http://mg.co.za/article/2016-11-02-breaking-read-the-full-state-capture-...

16. Hartmut Winkler, 29 Nov 2016, 'What's next for SA energy, now that Russian nuclear build is on ice? Expert unpacks the plan', https://www.biznews.com/sa-investing/2016/11/29/sa-russia-energy-nuclear...

17. Siseko Njobeni, 3 Nov 2016, 'Eskom, Gupta dealings exposed', www.iol.co.za/business/companies/eskom-gupta-dealings-exposed-2086293

See also: Jessica Bezuidenhout, 25 Nov 2016, 'Eskom's ties to Gupta-linked Trillian exposed', http://mg.co.za/article/2016-11-25-00-eskoms-trillian-links-exposed

18. 17 Dec 2015, 'South Africa's nuclear power program', Nuclear Monitor #816, www.wiseinternational.org/nuclear-monitor/816/south-africas-nuclear-powe...

19. Conor Gaffey, 3 Nov 2016, 'South Africa: Five Things Thuli Madonsela's State Capture Report Told Us', http://europe.newsweek.com/south-africa-five-thuli-madonsela-state-captu...

20. Mmusi Maimane, 16 Sept 2016, 'Zupta's nuclear deal: either we end it or it ends us', www.da.org.za/2016/09/bokamoso-zuptas-nuclear-deal-either-end-ends-us/

21. 13 Oct 2016, 'State capture claims: For real? Unpacking #Zupta nuclear conspiracy theory', www.biznews.com/leadership/2016/10/13/state-capture-claims-for-real-unpa...

22. Keith Gottschalk, 30 Nov 2016, 'Zuma lives to fight another day. But fallout from latest revolt will live on', https://theconversation.com/zuma-lives-to-fight-another-day-but-fallout-...

Brazil's nuclear power program undone by corruption

Nuclear Monitor Issue: 
#835
4604
06/12/2016
Jim Green ‒ Nuclear Monitor editor
Article

The future of Brazil's partially-built Angra-3 reactor is uncertain in the wake of a wide-ranging corruption scandal that has engulfed the country. Angra-3 was conceived in controversy in 1975 and it may die in controversy.

The turnkey Angra-1 reactor was built by Westinghouse from 1971 to 1982. Angra-1 suffered continuing problems with its steam supply system and its load factor was only 25% over its first 15 years, but since 1999 it has performed "much better" according to the World Nuclear Association.1

Then came the hugely controversial "deal of the century" between Germany and Brazil for the supply of eight reactors, a suite of nuclear fuel cycle facilities and oodles of technology transfer despite Brazil's obvious interest in nuclear weapons. Academic Matthew Bunn explains:2

"In 1975, Brazil and Germany agreed on a nuclear "deal of the century" in which Germany was to provide several reactors and a complete nuclear fuel cycle, including both an enrichment plant and a reprocessing facility, under international safeguards. (The deal was later drastically scaled back, due to delays, economic constraints, and U.S. pressure.)

"At about the same time, Brazil launched a secret, unsafeguarded "parallel program" run by the military, divided into segments run by different services, with the Navy pursuing centrifuge enrichment (ultimately successfully establishing an enrichment facility), and the Army pursuing plutonium production.

"Personnel trained in the safeguarded program with Germany were transferred to the weapons program, and technologies from the safeguarded program are believed to have been used in both the unsafeguarded enrichment facility and a small plutonium separation facility. The weapons program was cancelled under a later civilian government, and following the Brazil-Argentina rapprochement, all of Brazil's nuclear facilities are now under safeguards."

Under the Germany/Brazil agreement, the Angra 2 and 3 pressurized water reactors were to be built immediately, with equipment from Kraftwerk Union (KWU). Work began on Angra-2 in 1976 but was suspended due to a lack of finances and lower than expected growth in electricity demand. Work resumed in 1995 and the reactor came online in 2000. Three years earlier, Eletronuclear was formed as a subsidiary of state energy utility Eletrobrás and assumed responsibility for construction and operation of nuclear power plants.

Angra-3

The development of Angra-3 ‒ a Siemens/KWU pressurized water reactor, identical to Angra-2 ‒ began in 1984 but was halted in 1986 before full construction began. In 2006, the government announced plans to complete Angra-3 and also to build four more reactors beginning in 2015. In 2008, Eletronuclear signed an agreement with Areva for work on Angra-3. In mid-2010, the National Nuclear Energy Commission granted a construction licence and work began on Angra-3 after a 24-year hiatus. In November 2013, a contract was awarded to Areva in line with the 2008 agreement.

And then the Angra-3 project began to fall apart ... again. Funding was a problem. Areva said in April 2015 that progress on the project was "dependent on the securing of project financing by the customer".3 Areva announced in June 2015 that it had reduced its activities at Angra-3 due to delays in securing financing for the remainder of the project.4,5

In August 2015, four Brazilian construction companies stopped work on Angra-3 due to non-payment of millions of dollars from Eletronuclear, and in the context of an escalating bribery corruption scandal engulfing the construction companies as well as Eletronuclear, Eletrobrás, politicians and political parties.6,7

The following month, Eletrobrás suspended work on Angra-3 pending an internal corruption inquiry. Eletronuclear CEO Pedro José Diniz de Figueiredo ‒ newly appointed after the July 2015 arrest of former CEO Othon Luiz Pinheiro da Silva in connection with the corruption scandal ‒ said all building contracts for the project had been frozen for 90 days.8

Over a year later and the Angra-3 project remains frozen. Figueiredo said in April 2016 that several issues needed to be resolved: completion of the internal corruption investigation; setting a new budget for the project, cancelling contracts suspected of being fraudulent and conducting a new tender process, and renegotiating funding for the project.9

When construction began in 2010, commissioning of Angra-3 was expected in late 2015.1 Now, Eletrobrás and Eletronuclear hope to commission the reactor in 2021.10 But that timeline assumes that work will resume, and that it will resume in 2017, and both assumptions are doubtful. According to the World Nuclear Association, the timeline for completion of Angra-3 is "indefinite, maybe 2022"; in other words, it may never be completed.1

Construction of Angra-3 is about two-thirds complete according to Eletronuclear.9 But more funding is required to complete the project. According to powertechnology.com, an additional US$1.8 billion is required in addition to a government loan previously secured.11 In December 2016, Eletronuclear executives will visit China in an attempt to secure new investors to complete Angra-3.12 China might be interested in supporting Angra-3 if it opens up options for the deployment of Chinese reactor technology in Brazil (as with Chinese funding for Hinkley Point C in the UK). But it is doubtful whether new reactors will be built in Brazil in the foreseeable future.

Eletrobrás and its subsidiary Eletronuclear are in no position to be covering the funding shortfall for Angra-3. In November 2015, Eletrobrás booked a 3.39 billion reais (US$980 million) impairment charge on Angra-3.13 In the same month, Eletrobrás announced that it would cut 13,000 jobs over the next two years, around 30% of the utility's staff.10

Then Eletrobrás reported its biggest ever annual loss: a net loss of 14.4 billion reais (US$4.1 billion) in 2015. Economic consulting firm BNamericas reported that the largest write-down was 5 billion reais (US$1.44 bn) for Angra-3.14

The estimated cost of Angra-3 has increased significantly. According to BNamericas, in the late 2000s the estimated cost was US$5.4 billion whereas the latest estimate is 121% greater at US$12 billion.15 According to the World Nuclear Association, the estimated cost in 2010 was US$6 billion and it is now US$7.6 billion.1 Cost increases have arisen due to exchange rate fluctuations, inflation and additional works required to satisfy environmental concerns.15 Eletronuclear reportedly estimates additional losses of US$1.7 million per day if the reactor is not operational by the end of 2018.7

Corruption and crisis

Angra-3 featured in the 'Most Controversial Projects 2015' list compiled by RepRisk, a business intelligence provider specializing in environmental, social, and governance risk analytics.16 Angra-3 was listed at number five in RepRisk's top 10. The award citation read:

"Repeated allegations of corruption have led to the inclusion of Brazil's third nuclear power plant, the Angra 3 Nuclear Reactor, in the MCP 2015 report. ... [I]n May 2015, Eletrobras found itself embroiled in a corruption scandal, when it was alleged that Edison Lobao, Brazil's former Minister for Mines and Energy, had received BRL 1 million (USD 250,000) to help the construction company, UTC Participacoes, win a contract for the Angra 3 Nuclear Plant.

"It was then revealed that the CEO of Eletronuclear had accepted bribes from construction companies involved in the Angra 3 project and in July 2015, he was arrested for allegedly receiving BRL 4.5 million (USD 1.1 million) in kickbacks between 2009 and 2014 from Andrade Gutierrez and Engevix Engenharia (Engevix). A senior energy executive of Andrade Gutierrez was also arrested. Investigators then began to probe the Angramon consortium, charged with constructing Angra 3 ...

"Later in July [2015], hundreds of shareholders of Eletrobras filed charges against the company in New York, claiming that the firm had known about the corruption at Eletronuclear and had hidden the fact for more than a year. One month later, Eletrobras and some of its executives were sued in a class-action lawsuit in a US District Court for violating the US Securities Exchange Act and for providing materially false statements related to the awarding of USD multibillion construction projects, including the Angra 3 Nuclear Reactor.

"In November 2015, the Brazilian Administrative Council for Economic Defense (CADE) launched an investigation into a group of construction companies, including UTC Engenharia, EBE, Construtora Andrade Gutierrez, Construtora Norberto Odebrecht, Construtora Queiroz Galvao, Camargo Correa, and Techint, on suspicions that they had formed a BRL 3 billion (USD 775.3 million) cartel to rig the bidding for the Angra 3 Nuclear Reactor. According to CADE, the cartel was known as the "big group," which held meetings to agree on the prices and winners of each construction tender.

"In December 2015, Brazil's Federal Criminal Court ratified the charges brought by the Federal Ministry of Public Prosecution against Eletronuclear and former executives of Andrade Gutierrez for corruption related to the Angra 3 Nuclear Reactor. The CEO of Eletronuclear, a shareholder of Engevix, and the former president of Andrade Gutierrez Energia were placed under house arrest."

Eletronuclear CEO Othon Luiz Pinheiro da Silva, considered the father of Brazil's nuclear program, was arrested in July 2015. In the same month, Luiz Pinguelli Rosa, a nuclear physicist and Eletrobrás' chief executive from 2003‒2005, said: "The arrest is a tragedy for the industry. The industry was already in crisis, but now the corruption concerns are bound to delay Angra 3 further and cause costs to rise even more."17

The drama has continued this year. In August 2016, Silva was sentenced to 43 years in prison for colluding with executives at Brazilian construction companies to set up an over-billing and kick-back operation for Angra-3.18,20 Investigators alleged Silva skimmed up to 30 million reais (US$8.6 m) from Angra-3 engineering and construction contracts.19

The judge said in his ruling: "The elements of the court findings permit the conclusion that the corruption scheme was structured before, during and after the tenders for Eletronuclear's construction of Angra 3 and consisted in the payment of bribes to public servants and agents" by the construction and engineering companies.18

In addition to Silva, 12 other people, including Silva's daughter, were sentenced in August 2016 for their involvement in the embezzlement of public funds.20

In July 2016, prosecutors announced that Eletronuclear CEO Pedro Figueredo had been suspended from his duties for allegedly colluding with Silva and interfering with the company's internal investigations.19 In the same month, 19 people were arrested for allegedly paying bribes to senior executives of Eletronuclear.22 In return for bribes, Eletronuclear executives allegedly let construction companies inflate the cost of contracts for Angra-3, and politicians and political parties were also beneficiaries of the corruption.22

In May 2016, Brazil's second biggest contractor, Andrade Gutierrez, agreed to a plea deal and will pay one billion reais (US$288 million) to settle the matter. The company was involved in corrupt dealings in connection with Angra-3 and other projects.21

A future for nuclear power in Brazil?

Angra 1 and 2 provided Brazil with 13.9 terawatt-hours or 2.8% of its electricity in 2015, down from a maximum of 4.3% in 2001.23

In addition to Angra 1‒3, plans for an additional 4‒8 reactors have been discussed. However, as the World Nuclear Association notes, "funding is likely to be a problem".1 Claudio Salles, president of Instituto Acende, a Brazilian energy-research group, said in mid-2015: "These [nuclear] plants take 10−15 years to build and as time goes on they become less viable."17

Plans to expand renewable energy have better prospects. The World Nuclear Association states that power from existing nuclear plants at about US$75/MWh is about 1.5 times more expensive than hydropower, and power from Angra-3 is expected to be slightly over twice as expensive as hydro.1

Hydro generates about three-quarters of Brazil's electricity. Plans are in train to add around 40 gigawatts (GW) of new hydro capacity by 2035, primarily from small- to medium-sized run-of-the-river plants which generally have a small impact on the environment and indigenous tribes when compared to some large hydro projects.24

Brazil's Ministry of Mines and Energy says that wind power will make up over 30% of new capacity in the next 11 years, and that at least 25 GW of new wind power capacity will be added by 2035.24

Modest increases of solar and biomass (primarily leftovers from other production processes, such as bagasse from sugarcane processing) are planned. Brazil plans to shut down its coal-fired power plants (2.5 GW) by 2030, and no new permits for coal-fired plants will be granted.24

In mid-2015, Brazil announced its intention to increase the share of non-hydro renewable electricity sources to 20% by 2030.25

References:

1. World Nuclear Association, Sept 2016, Nuclear Power in Brazil, www.world-nuclear.org/info/Country-Profiles/Countries-A-F/Brazil/

2. Matthew Bunn, 2001, "Civilian Nuclear Energy and Nuclear Weapons Programs: The Record", www.academia.edu/737916/Civilian_nuclear_energy_and_nuclear_weapons_prog...

3. AREVA, Press Release, 29 April 2015.
4. WNN, 29 June 2015, http://us1.campaign-archive2.com/?u=140c559a3b34d23ff7c6b48b9&id=7b66592e5d

5. Laura Buckley, 29 June 2015, 'Work slows at Brazilian nuclear plant, says AREVA', www.energylivenews.com/2015/06/29/work-slows-at-brazilian-nuclear-plant-...

6. Reuters, 3 Sept 2015, 'Eletrobras suspends Angra nuclear contract as contractors quit', www.trust.org/item/20150903004211-npgl2/

7. Lise Alves, 13 Aug 2015, 'Brazil's Angra 3 Nuclear Reactor May be Delayed', http://riotimesonline.com/brazil-news/rio-business/brazils-angra-3-nucle...

8. Michael Place, 30 Sept 2015, 'Brazil's Eletronuclear suspends US$4bn Angra 3 project', www.bnamericas.com/en/news/electricpower/brazils-eletronuclear-suspends-...

9. 29 April 2016, 'Brazil's 3rd nuclear plant on track to come online in 2020', www.kallanishenergy.com/2016/04/29/brazils-3rd-nuclear-plant-track-come-...

10. Michael Place, 21 Nov 2016, 'Brazil postpones Angra 3 nuclear project', www.bnamericas.com/en/news/electricpower/brazil-postpones-angra-3-nuclea...

11. 'Angra-3 PWR Nuclear, Brazil', www.power-technology.com/projects/angranuclear/

12. Michael Place, 24 Nov 2016, 'Brazil seeks Chinese investors to kick-start Angra 3 nuclear works', www.bnamericas.com/en/news/electricpower/brazil-seeks-chinese-investors-...

13. Caroline Stauffer and Jeb Blount / Reuters, 13 Nov 2016, 'Eletrobras posts 3rd-quarter loss on Angra 3 nuclear plant impairment', www.trust.org/item/20151113035209-88tsd/

14. Michael Place, 31 March 2016, 'Eletrobras posts record loss', www.bnamericas.com/en/news/electricpower/eletrobras-posts-record-loss

15. BNamericas, 'BNamericas' Angra 3 risk analysis', www.bnamericas.com/en/project-profile/electricpower/angra-iii-nuclear-pl...

16. RepRisk, March 2016, 'Most Controversial Projects 2015', www.reprisk.com/content/5-publications/1-special-reports/3-most-controve...

17. Reuters, 30 July 2015, 'Brazil Nuclear Leader's Arrest May Stymie Atomic Ambitions', www.voanews.com/content/brazil-nuclear-leader-arrest-may-stymie-atomic-a...
18. Reuters, 4 Aug 2016, 'Brazil Eletronuclear CEO gets 43-year sentence for corruption -paper', www.reuters.com/article/brazil-corruption-eletrobras-idUSL1N1AL16E

19. Michael Place, 6 July 2016, 'Lava Jato: Police arrest former Eletronuclear head', www.bnamericas.com/en/news/electricpower/lava-jato-police-arrest-former-...

20. Lise Alves, 4 Aug 2016, 'Eletronuclear President Sentenced to 43 Years for Corruption in Brazil', http://riotimesonline.com/brazil-news/rio-politics/brazils-eletronuclear...

21. Rod Sweet, 10 May 2016, 'Brazil construction giant pays $284m and says sorry to 'all Brazilians' for corruption', www.globalconstructionreview.com/companies/brazil-construction-giant-pay...

22. Jeb Blount, 6 July 2016, 'Brazil police arrest 19 in Eletrobras nuke-plant bribe probe', www.reuters.com/article/us-brazil-corruption-idUSKCN0ZM13N

23. Mycle Schneider, Antony Froggatt et al., 2016, World Nuclear Industry Status Report 2016, www.worldnuclearreport.org/IMG/pdf/20160713MSC-WNISR2016V2-HR.pdf

24. Nov 2016, 'Future Electricity Policy of Brazil & Planning of Energy Projects', www.reddit.com/r/GlobalPowers/comments/5flvgm/event_future_electricity_p...

25. Suzanne Goldenberg and Dan Roberts, 1 July 2015, 'Brazil announces massive reforestation and renewable energy plan with US', www.theguardian.com/world/2015/jun/30/brazil-us-reforestation-forests-re...

About: 
Angra-1

South Africa's nuclear program lurches from scandal to scandal

Nuclear Monitor Issue: 
#831
4589
05/10/2016
Author: Jim Green ‒ Nuclear Monitor editor
Article

South Africa's controversial plan to build 9.6 gigawatts of new nuclear power capacity is heading to court on December 13‒14. This is the latest chapter in a protracted saga stemming from legal action initiated by Southern African Faith Communities' Environment Institute (SAFCEI) and Earthlife Africa Johannesburg (ELA).1,2

In 2014, SAFCEI submitted several requests for information on the nuclear plans to the Department of Energy using the Promotion of Access to Information Act. Those requests were refused on unsatisfactory grounds. In October 2015, SAFCEI and ELA initiated legal action, challenging various aspects of the nuclear procurement process. They maintained that the government did not follow legal procedure in the procurement process and didn't meet the requirements of the constitution for a fair, equitable, transparent, competitive and cost-effective process.3

The government's response to the legal action, long delayed, revealed further inconsistencies. It was revealed that the Department of Energy gazetted a 2013 Section 34 Determination (which is required before a nuclear procurement process can go ahead) on 21 December 2015, after keeping it secret for two years. Moreover, the Department side-stepped the necessary Parliamentary approval and public participation process by tabling this determination under section 231.3 and not section 231.2 as was advised by the state law adviser.4

SAFCEI and ELA's lawyers submitted a supplementary affidavit in March 2016. The government delayed its response, missing three deadlines and compelling SAFCEI and ELA to issue a rule 30A notice, which gave the government until 31 May 2016 to respond. The government's answering affidavit was finally received, but it failed to include 10 documents that had been referenced in the affidavit. When lawyers requested these documents, the government refused.5

SAFCEI and ELA signed the last affidavit on September 15 and the dispute goes to court on December 13‒14. The organizations contend that the case is about the requirements for lawful, procedurally fair, rational, statutory and constitutional decision making.6

SAFCEI and ELA allege that legal documents in their possession indicate that South Africa signed a binding nuclear deal with Russia to supply the reactors, and that the Russian agreement was entered into unlawfully. Russian nuclear firm Rosatom issued a press release in 2014 saying that it had been chosen to supply reactors, but quickly back-tracked.7

The Mail & Guardian editorialized in February 2015 that the bilateral agreement "is a lopsided, murky and legally fraught arrangement that hands most of the aces to Russia's state-owned nuclear company and carries significant risks for South Africa. ... Acting as if there are no other possible vendors, the agreement is heavily tilted to feather Rosatom's bed and minimise its risk. The Russians are indemnified against nuclear accidents and promised a host of regulatory and tax concessions."8

Further evidence of the government's obsessive secrecy came with Energy Minister Tina Joemat-Pettersson's rejection of an appeal by the Open Democracy Advice Centre ‒ acting on behalf of the Business Day newspaper ‒ against her department's refusal to grant access to documents relating to government's nuclear procurement plans. The centre requested access to three reports ‒ on nuclear procurement models, the cost of nuclear plants, and financing models.9

Delay

On September 7, Joemat-Pettersson said in Parliament that the government would issue the formal 'request for proposals' (RFP) on September 30, kicking off the tendering process. But the RFP was not issued on September 30. The Rand Daily Mail portrayed the delay as another indication of President Jacob Zuma's diminishing influence, and suggested that the nuclear project will be scaled down, if it goes ahead at all.10

There are divisions within the government regarding the scale of the nuclear new-build project, the timing, the cost, whether Zuma's preference for a deal with Rosatom should be allowed to prevail or whether a genuine tendering process should proceed, and whether the procurement should be led by the Department of Energy or energy utility Eskom. Until now the department has been the procuring agent while Eskom, which is the designated owner-operator of nuclear energy plants, watched from the sidelines.

The two leading opposition parties, the Democratic Alliance (DA) and the Economic Freedom Fighters, have expressed strong criticism of the planned nuclear build. Gordon Mackay, the DA's energy spokesperson, said the delay in issuing the RFP was linked to efforts to hand the procurement process to Eskom:11

"This must be seen for what it is ‒ a blatant attempt by the Zuma administration to: side-line parliamentary oversight of the nuclear new build programme; block public debate on the need for additional nuclear capacity; create a veil of secrecy around the procurement process which would now be subject to internal Eskom processes and procedures; give President Jacob Zuma greater control of the nuclear procurement process."

"Designating Eskom as the procuring agent of the state will fundamentally limit the role and capacity of Parliament to oversee the nuclear deal and, in doing so, increase the potential of corruption surrounding the trillion rand deal. The DA rejects any attempt to designate Eskom, headed by CEO and Zupta buddy, Brian Molefe, as the procuring agent for nuclear. Eskom has proven with Medupi and Kusile that it is unfit to manage mega-projects. It has also proven that its governance procedures are lax and the Supreme Court of Appeal has found its Board Tender Committee to be corrupt."

There is also speculation that the state-owned South African Nuclear Energy Corporation (NECSA) could play a greater role.12 NECSA has been involved in two court actions over allegations of corporate governance breaches over the past year.13 The Auditor-General found that NECSA incurred R128 million (US$9.4m; €8.4m) in irregular expenditure in the 2015 financial year because it failed to comply with the government's procurement regulations. NECSA management and its board are currently being investigated by a taskforce appointed by the Energy Minister. The investigation relates to "serious mismanagement"‚ the Auditor-General said.14

Who pays?

The lowest of the estimates of the capital cost of the 9.6 GW nuclear build is around US$50 billion.15 South Africa is in no position to be stumping up that amount of capital. It's doubtful whether Rosatom would be able or willing to provide the capital under its Build-Own-Operate (BOO) model given Rosatom's other commitments at home and abroad.

The levelized cost of electricity for new nuclear is calculated to be R1,30 per kWh by EE Publishers, rising to R1,52 per kWh if fuel, operating and maintenance costs are included. That compares unfavorably with wind (R0,69 per kWh) and solar (R0,87 per kW).15 Likewise, the Council for Scientific and Industrial Research estimated the levelized cost of electricity from nuclear power to be R1/kWh compared to R0.60/kWh for wind and R0.80/kWh from solar PV.16

While the nuclear program makes little economic sense for South Africa, it could be hugely profitable for corrupt politicians and corporate spivs. South Africa has been rocked by numerous corruption scandals, such as the payment of around US$300 million in bribes associated with an Arms Procurement Deal. Andrew Feinstein, executive director of Corruption Watch UK (and a former ANC MP) said he feared the corruption associated with the nuclear deal "might dwarf the arms deal".17

The Right2Know Campaign said the nuclear program "commits us to a dangerous technology, and has all the hallmarks of the corrupt arms deal ‒ the risk of massive corruption-prone foreign tenders that have the potential of indebting us to foreign companies and rob the country of funds for service delivery and job creation."18

An investigation by the Rand Daily Mail summed up the nuclear program: "Zuma has assumed personal control of the nuclear programme, and it has been characterised by: secret meetings; undisclosed documents and classified financial reports; deceit; aggressive campaigning; damage control exercises; illegality; use of apartheid ('national key-point') legislation; sidestepping of Eskom's technical and financial oversight; destruction of oversight organs of state; disregarding of industry experts; refusal of public consultation; ignoring of the ANC's national executive committee (NEC) and ANC resolutions; and the removal of any government opponents, the most notable of whom was [former Finance Minister Nhlanhla] Nene."17

Pro-nuclear commentator Dan Yurman's December 2014 warning has come to pass: "Almost no one believes that as long as Zuma is in power that anything remotely resembling an orderly procurement process is likely to take place."19

References:

1. SAFCEI, 13 Sept 2016, 'Court papers & press releases from SAFCEI/ELA court case', http://nuclearcostssa.org/?p=3488

2. SAFCEI, 14 Sept 2016, 'SAFCEI & ELA Jhb's Nuclear Campaign and Court Case', http://nuclearcostssa.org/?p=3491

3. SAFCEI, 15 Oct 2016, 'Press Release: Court Action', http://safcei.org/press-release-court-action/

4. SAFCEI, 30 March 2016, 'Court case exposes web of secrecy in government nuclear dealings', http://nuclearcostssa.org/?p=3192

5. SAFCEI and ELA, 18 Aug 2016, 'Nuclear court case – more missing documents requested', http://nuclearcostssa.org/?p=3450

6. SAFCEI, 16 Sept 2016, "See you in Court", http://nuclearcostssa.org/?p=3504

7. SAFCEI, 21 Sep 2016, 'Civil bodies a step closer in nuclear deal challenge', http://nuclearcostssa.org/?p=3522

8. Mail & Guardian, 13 Feb 2015, 'Editorial: 'Atomic Tina' blows SA away, http://mg.co.za/article/2015-02-12-atomic-tina-blows-sa-away

9. Linda Ensor, 22 March 2016, 'Access to nuclear documents denied once again', www.bdlive.co.za/business/energy/2016/03/22/access-to-nuclear-documents-...

10. Ray Hartley, 30 Sept 2016, 'Signs of a great rift over Zuma's nuclear programme', www.rdm.co.za/politics/2016/09/30/politics-live-signs-of-a-great-rift-ov...

11. Gordon Mackay, 30 Sept 2016, 'South Africa: Nuke RFP Delayed in Order to Give Eskom Greater Say and Avoid Parliamentary Scrutiny', http://allafrica.com/stories/201609300697.html

12. 30 Sept 2016, 'South Africa: Nuclear Plan On Ice As Eskom May Take Ownership', http://allafrica.com/stories/201609300935.html

13. The Times Editorial, 28 Jan 2016, 'Step one: Sort out the mess at the nuclear corporation', www.timeslive.co.za/thetimes/2016/01/28/Step-one-Sort-out-the-mess-at-th...

14. Linda Ensor, 27 Sept 2016, 'Nuclear corporation's spending comes under scrutiny of Auditor-General', www.timeslive.co.za/local/2016/09/27/Nuclear-corporations-spending-comes...

15. Chris Yelland, 1 Aug 2016, 'Study of the capital costs and the cost of electricity from new-nuclear in SA', www.ee.co.za/article/study-capital-costs-cost-electricity-new-nuclear-sa...

16. www.bdlive.co.za/business/energy/2015/07/29/revealed-real-price-of-nucle...

17. 17. Lily Gosam, 2 Feb 2016, 'Zuma, the Guptas and the Russians ‒ the inside story', www.rdm.co.za/politics/2016/02/02/zuma-the-guptas-and-the-russians--the-...

18. 26 Sept 2016, 'Nuclear deal 'has the hallmarks of the corrupt arms deal'', www.biznews.com/briefs/2014/09/26/nuclear-deal-hallmarks-corrupt-arms-deal/

19. Dan Yurman, 6 Dec 2014, 'China jumps into the action in South Africa', http://neutronbytes.com/2014/12/06/china-makes-haste-to-develop-its-nucl...

About: 
Koeberg-1

South Korea indicts 100 people over safety scandals

Nuclear Monitor Issue: 
#771
02/11/2013
Article

South Korea has indicted 100 people of corruption and forgery in the scandal over fake safety certifications for parts in its nuclear reactors, authorities said on October 3. The people are from Korea Hydro and Nuclear Power Co (KHNP − which operates the nation's 23 nuclear reactors), from parts suppliers, and from certifiers.[1] A vice president at Korea Electric Power Corp. (KEPCO) and a former KHNP chief executive face bribery charges.[2]

The scandal broke last November after the country's energy ministry ordered the shutdown of two reactors after admissions that eight unnamed firms that supplied parts had faked certificates covering thousands of nuclear power components from 2003 to 2012, affecting at least five reactors. Then in May, it was revealed that four other reactors had components (safety-related control cabling) with forged documentation, prompting the shut down of two reactors for about four months for replacements.[1] Currently, six of the country's 23 reactors are off-line either because of the scandal or scheduled outages.

According to the government's policy coordination ministry, 277 out of 22,000 documents of tests on components at 20 reactors were found to be forged. Of 218,000 documents examined for a further eight units, including five under construction, a total of 2,010 were found to be falsified.[3]

The scandal continues to widen. On October 16, KHNP revealed that control cables at two reactors under construction − Shin Kori 3 and 4 − failed a re-evaluation. Completion of these reactors has been put back by 6−12 months.[1]

Park Young-June, a former deputy minister in charge of energy, has been charged with accepting 50 million won (US$45,000) bribes in 2010 in return for favouring a constructor bidding for a nuclear reactor contract. He is also charged with taking money from Kim Jong-Shin, the one-time chief of KHNP.[4]

In late September, new KHNP chief executive Cho Seok issued a public apology. "Our domestic nuclear project is facing the utmost crisis," he said, adding that public trust had "hit the ground" because of Fukushima and the corruption issues in Korea.[3]

The Atomic Power Review website provides a useful summary of recent events:[5]

"In terms of "will parts with faked certificates actually work," the answer appears in at least one case to be "no," and "do parts supplied under these bribery-induced contracts meet specs," the answer also appears to be "no." Much else has developed in the interim. Let's detail developments in recent times, since it was announced that about 100 people had been indicted overall in the scandal ...

  • In early October, it was found that eight nuclear cable suppliers were price fixing; a fine was imposed and a case referred to prosecutors.[6]
  • The cable makers were found to have been paying very high dividends − and it was noted that the fine amount was insignificant to deter the practice when compared with the profit derived from a successful bid.[7]
  • A large number of faked testing results were discovered in connection with investigation into the corruption scandal, including 277 used to cover parts at operating plants.[8]
  • Suspect cables have failed inspections at two reactor plants.[9]
  • On October 17 it was revealed that the Korean Government would sue LS Group, which owns JS Cable − the major culprit in supply of suspect cables.[10]
  • Another piece hinted that LS Group might sue Korea Hydro & Nuclear Power.[11]
  • On October 22, Korea Hydro & Nuclear Power confirmed it would sue LS Group for very significant amounts in damages.[12]"

 

On October 13, a government working group recommended that nuclear power capacity be kept between 22−29% of total electricity generation by 2035, well below existing plans to grow the sector to 41% in less than 20 years. The government will hold public hearings to decide whether to back the recommendation before finalising its policy in December.[13]

References:
[1] www.powermag.com/s-korea-indicts-100-in-nuclear-graft-scandal-considers-...
[2] www.reuters.com/article/2013/10/10/us-korea-nuclear-idUSBRE99905O20131010
[3] www.world-nuclear-news.org/RS-Indictments_for_South_Korea_forgery_scanda...
[4] http://au.news.yahoo.com/a/-/world/18870327/s-korea-ex-vice-minister-cha...
[5] http://atomicpowerreview.blogspot.com.au/2013/10/south-korea-cables-fail...
[6] http://koreatimes.co.kr/www/news/biz/2013/10/602_144114.html
[7] www.koreaherald.com/view.php?ud=20131020000200
[8] www.koreaherald.com/view.php?ud=20131010000797
[9] www.koreaherald.com/view.php?ud=20131017000948
[10] http://koreatimes.co.kr/www/news/biz/2013/10/602_144514.html
[11] http://koreatimes.co.kr/www/news/biz/2013/10/602_144640.html
[12] http://koreatimes.co.kr/www/news/biz/2013/10/602_144781.html
[13] www.reuters.com/article/2013/10/28/korea-energy-nuclear-idUSL3N0I70G8201...

See also Nuclear Monitor #765, 1 Aug 2013, 'South Korea: Nuclear scandal widens'

About: 
Shin-Kori-3Shin-Kori-4

Nuclear News

Nuclear Monitor Issue: 
#765
01/08/2013
Shorts

Stop Japan's Rokkasho Reprocessing Plant
Action Requested: Sending letter to the Japanese Embassy in your country urging Japan not to start the Rokkasho reprocessing plant.

Dear Friends,

Greetings from Japan! Sixty-eight years ago on August 9, an atomic bomb containing about 6kg of plutonium destroyed the city of Nagasaki in an instant. Next year, Japan intends to start the commercial operation of the Rokkasho reprocessing plant, the only industrial-scale reprocessing plant in a non-nuclear weapons state, to separate plutonium from fuel used in nuclear power plants at a rate of 8 tons per year, equivalent to 1,000 bombs using the IAEA formula of 8 kg per bomb.

Originally, Japan intended to use separated plutonium to fuel fast breeder reactors, which were supposed to produce more plutonium than they consumed, guaranteeing a semi-eternal energy source. As in other countries, this program stalled, however. So Japan launched an uneconomical program to consume its accumulating plutonium in light water reactors. This also stalled. As result Japan has accumulated about 44 tons of plutonium, equivalent to more than 5,000 bombs: 34 tons in Europe, from reprocessing Japan's spent fuel in the UK and France, and 10 tons in Japan.

Due to the Fukushima accident we have only two of 50 reactors operating. The number and the timing the reactors to be restarted is uncertain and the prospect of being able to consume a significant amount of the existing plutonium in reactors anytime soon is dim. Applications for review for restart of 10 reactors under the new safety rules were just submitted July 8.

The government still wants to start operation of the Rokkasho reprocessing plant. Further accumulation of nuclear-weapon-usable material is a concern for the international society and for Japan's neighbors, who wonder about its intentions.

Separated plutonium is also a security risk. And if other countries follow Japan's example, it would increase proliferation risks.

Please help us to stop Japan from further separating nuclear weapon usable material by doing the following:

Send a message/letter by fax or otherwise to the Japanese Embassy in your country by August 9 urging Japan not to start the Rokkasho reprocessing plant and send a copy of the message/letter that you have sent or intend to send to the following e-mail address by 5 August no-pu[@]gensuikin.org

List of Japanese Embassies: www.mofa.go.jp/about/emb_cons/mofaserv.html

We will deliver them to the government of Japan on August 9. We also will release them to the media.

Thank you very much in advance.
 

NO MORE HIROSHIMAs! NO MORE NAGASAKIs! NO MORE PLUTONIUM!

Sincerely yours,

Yasunari Fujimoto
Secretary General,
Japan Congress Against A- and H-Bombs (GENSUIKIN)
 

(For background information see 'Japan's Reprocessing Plans, Nuclear Monitor #763, 13 June 2013).

------------------->

Canada: Cameco agreement to silence indigenous protests on uranium mining
After the Pinehouse collaboration Agreement with Cameco and Areva in December 2012, with the English First River Nation in May 2013 another indigenous community of Northwest Saskatchewan has - against protests of their community members - signed an agreement with these uranium mining companies to support their business and not to disturb it anymore.

The agreement - which members have not been permitted to see - allegedly promises $600 million in business contracts and employee wages to the Dene band, in exchange for supporting Cameco/Areva's existing and proposed projects within ERFN's traditional territory, and with the condition that ERFN discontinue their lawsuit against the Saskatchewan government relating to Treaty Land Entitlement section of lands near Cameco's proposed Millenium mine project.

− from Nuclear Heritage Network − NukesNews #10, 29 July 2013, nukenews.nuclear-heritage.net

More information:
Committee for Future Generations, http://committeeforfuturegenerations.wordpress.com/
Peter Prebble and Ann Coxworth, July 2013, 'The Government of Canadaʼs Legacy of Contamination in Northern Saskatchewan Watersheds, tinyurl.com/uran-sask

South Korea: Nuclear scandal widens
The scandal in South Korea concerning the use of counterfeit parts in nuclear plants, and faked quality assurance certificates, has widened. [1]
In May 2012, five engineers were charged with covering up a potentially dangerous power failure at the Kori-I reactor which led to a rapid rise in the reactor core temperature. The accident occurred because of a failure to follow safety procedures. [2] A manager decided to conceal the incident and to delete records, despite a legal obligation to notify the Nuclear Safety and Security Commission. [3] In October 2012, authorities temporarily shut down two reactors at separate plants after system malfunctions.

Then in November 2012, the scandal involving counterfeit parts and faked certificates erupted. [4] The reactor parts included fuses, switches, heat sensors, and cooling fans. The scandal kept escalating and by the end of November it involved at least 8601 reactor parts, 10 firms and six reactors and it was revealed the problems had been ongoing for at least 10 years. Plant owner Korea Hydro and Nuclear Power (KHNP) acknowledged possible bribery and collusion by its own staff members as well as corruption by firms supplying reactor parts. [5]

Two reactors were taken offline to replace thousands of parts, while replacement parts were fitted to other reactors without taking them offline.

In recent months the scandal has continued to expand.

Late May 2013: Two more reactors were shutdown and the scheduled start of two others was delayed because an anonymous whistleblower revealed that "control cables had been supplied to [the] four reactors with faked certificates even though the part had failed to pass a safety test." [6]

June 20: Widespread police raids. [7] Prosecutors reveal that the number of plants suspected to have non-compliant parts (or at least paperwork) has widened to include 11 of South Korea's 23 reactor reactors. [8]

July 8: The former president of KHNP was arrested as part of the ongoing investigation into nuclear industry corruption. [9,10]

July 10: Search and seizure occurred at Hyundai Heavy Industries after the Busan Prosecutor's office obtained warrants relating to the nuclear parts scandal. [11]

July 11: Details emerged on the involved parties in the Hyundai headquarters raid, including persons and exchanged funds. Contract bribery is included in the charges. [12]

Even before the scandals of the past two years, a 2011 IPSOS survey found 68% opposition to new reactors in South Korea. [13] The proportion of South Koreans who consider nuclear power safe fell from 71% in 2010 to 35% in 2012. [14]

References and Sources:
1. Atomic Power Review, 14 July 2013, 'South Korea's Nuclear Energy Corruption Scandal Widens in Scope', http://atomicpowerreview.blogspot.com.au/2013/07/south-koreas-nuclear-en...
2. www.koreaherald.com/opinion/Detail.jsp?newsMLId=20120315000875
3. www.world-nuclear-news.org/RS_Safety_culture_questions_after_loss_of_pow...
4. http://planetark.org/enviro-news/item/67070
5. www.abc.net.au/news/2012-11-05/uncertified-parts-force-nuclear-reactor-s...
6. www.greenpeace.org/international/en/news/Blogs/nuclear-reaction/south-ko...
7. www.koreaherald.com/view.php?ud=20130620000802
8. www.koreaherald.com/view.php?ud=20130623000225
9. www.koreaherald.com/view.php?ud=20130708000852
10. www.koreaherald.com/view.php?ud=20130705000621
11. www.koreaherald.com/view.php?ud=20130710001055
12. www.koreaherald.com/view.php?ud=20130711000801
13. IPSOS, June 2011, 'Global Citizen Reaction to the Fukushima Nuclear Plant Disaster', www.ipsos-mori.com/Assets/Docs/Polls/ipsos-global-advisor-nuclear-power-...
14. Reuters, 7 Jan 2013, 'South Korea to expand nuclear energy despite growing safety fears', www.reuters.com/article/2013/01/08/us-nuclear-korea-idUSBRE90704D20130108

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France: Activists target uranium and nuclear plants
Two uranium facilities were blocked by activists in the South of France on June 19. The collectives "Stop Uranium" and "Stop Tricastin" organised simultaneous non-violent blockades in front of two uranium facilities in the south of France. The first facility, the Comurhex Malvési (near Narbonne) is the entrance gate for yellowcake in France. The second facility was the Eurodif enrichment plant, on the Tricastin nuclear site, near Avignon.

About 30 Greenpeace activists were arrested on July 15 after breaking into an EDF nuclear power plant in southern France, saying they wanted to expose security flaws and demanding its closure. The activists said they reached the walls of two reactors at the Tricastin plant, one of France's oldest. The protesters who entered the plant at dawn unfurled a yellow and black banner on a wall above a picture of President Francois Hollande, marked with the words: 'TRICASTIN ACCIDENT NUCLÉAIRE: PRÉSIDENT DE LA CATASTROPHE?' (Tricastin Nuclear Accident: President of the Disaster?).

"With this action, Greenpeace is asking François Hollande to close the Tricastin plant, which is among the five most dangerous in France," said Yannick Rousselet from Greenpeace France. Greenpeace is pressing Hollande to honour his previous promise to close at least 10 reactors by 2017 and 20 by 2020.

In July 2008 an accident at a treatment centre next to the Tricastin plant saw liquid containing untreated uranium overflow out of a faulty tank during a draining operation. The same month around 100 staff at Tricastin's nuclear reactor number four were contaminated by radioactive particles that escaped from a pipe.

Nuclear Heritage Network − NukesNews #10, 29 July 2013, nukenews.nuclear-heritage.net
Reuters, 'Greenpeace activists break into French nuclear plant', www.euronews.com/newswires/2029444-dozens-of-greenpeace-activists-enter-...
'French Greenpeace activists break into nuclear power plant', 15 July 2013, www.guardian.co.uk/environment/2013/jul/15/french-greenpeace-activists-n...
Angelique Chrisafis, 25 July 2008, 'It feels like a sci-fi film' - accidents tarnish nuclear dream', www.guardian.co.uk/environment/2008/jul/25/nuclear.industry.france

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Germany: Activists blockade nuclear fuel production plant
On July 25, around 50 activists blockaded Areva's nuclear fuel production plant in Lingen, north-east Germany. The protest included a climbing action as well as Samba-band. For seven hours, traffic delivering material to the plant was blocked. Around midday, police arrived and cleared away the peaceful non-violent blockade. A number of activists were taken to the police station. A female activist was wounded and had to be taken to the hospital.

Photo from visual.rebellion: www.dropbox.com/sh/taymq41hbd0cj9h/BmermA60cG

In brief

Nuclear Monitor Issue: 
#726
13/05/2011
Shorts

Areva suspends work on US nuclear manufacturing facility.
Areva Newport News, a joint venture of Areva NP Inc. and Northrop Grumman, has postponed indefinitely further construction of a nuclear power reactor component manufacturing facility in Newport News, USA, "until market conditions become more favorable," spokesman Jarret Adams said on May 9. And "the situation in Japan" is not helping the market, according to Adams. The facility is for the manufacture of heavy components for Areva power reactors, such as reactor vessels and steam generators, including components for its US-EPR design being considered for construction by utilities in Maryland, Missouri and Pennsylvania.

When ground was broken for the facility in July 2009, the companies said manufacturing would begin in mid-2012. In August 2010, that date was pushed back to 2013. The plant represents a US$360 million investment, the partners said in 2009.
Platts, 10 May 2011


Still funding needed for new shelter Chernobyl reactor. 
On April 19, at a pledging conference in Kiev, Ukraine, representatives of about 30 countries promised to collectively provide Euro 550 million (US$ 785 million) to finish the shelter, called the New Safe Confinement for the Chernobyl-4 reactor, and a long-term spent fuel storage facility. According to the European Bank for Reconstruction and Development (EBRD), the funding gap before the conference was estimated at Euro 740 million — Euro 600 million for the shelter and Euro 140 million for the spent fuel facility — out of a total cost estimated for the two projects of about Euro 1.9 billion.

The projects have been delayed repeatedly and the price tags have crept up due to increases in labor and materials costs, as well as the requirement for more detailed technical knowledge.The NSC is currently estimated to cost Euro 1.6 billion and the spent fuel facility Euro 300 million. (More on the NSC project: Nuclear Monitor 719/20, 12 November 2010).
Nucleonics Week,  21 April 2011


Italy: WikiLeaks documents show nuclear industry corruption.
In the wake of the emotion prompted by Fukushima and at a time when the Italian government appears to be reluctant to implement a policy of redeploying nuclear power (phased out following a referendum in 1987), the Italian magazine L'Espresso publishes in its March 18 "All'Italia mazzette sull'atomo" article, a series of American diplomatic cables that reveal how "bribes could have a major impact on the future of the country’s energy industry." The documents obtained by WikiLeaks provide details of a four-year US campaign, which began in 2005, to encourage Italy to re-start a nuclear power program with a view to reducing its energy dependence on Russian gas and limiting the influence of the partnership between Italian energy company ENI and Russia’s Gazprom. To this end, according to the article in the March 18 issue of L'Espresso, Washington fought a prolonged battle with the French nuclear power specialist EDF-Areva in which it took advantage of its close ties with several Italian companies. In the end, writes L'Espresso, the American lobbyists succeeded in convincing Rome to set aside EU safety standards for new power stations and to adopt more flexible OECD norms — a victory for US industry, obtained at the expense of the safety of the Italian people.
Presseurope, 18 March 2011, WikiLeaks - nuclear industry corruption


Arrests at antinuclear action Belarus.
Activists from Belarus and Germany arrested brutally at peaceful anti-nuclear action. On  April 25, six activists from Germany and five activists from Belarus, as well as one activist from Poland have been brutally arrested in the Belarus capital of Minsk. Around 40 activists have protested peacefully against the construction of the first nuclear power in Ostrovetz, Belarus. They held banners saying «Chernobyl, Fukushima --- Ostrovets?» and «We are against nuclear power plants» and handed out leaflets. There were two flashmobs - the first lasted around 5 minutes.

However, the second flashmob was interrupted immediately. After around one minute two vehicles with civil police stopped, as well as a red prisoner's transport. Peaceful protestors were thrown to the ground and arrested using brutal force.

All German people and the person from Poland were deported by train to Warsaw on the evening of April 27.
Indymedia Germany, 25 & 27 April 2011