APR: your source for nuclear news and analysis since April 16, 2010

Tuesday, January 28, 2014

Korea Hydro & Nuclear Power undergoes a reset

It's been some time since we've updated the situation regarding the corruption and parts scandals that have rocked the South Korean nuclear energy program; this update contains a quite considerable amount of positive news.

KHNP Policy Reform, Corporate Culture Redefinition

•In September 2013, Korea Hydro & Nuclear Power's new CEO, Cho Seok, made an announcement that the company was going to launch into a major personnel and policy / procedure reform movement no doubt having been pressured both by continued heated statements by the South Korean Prime Minister as well as by public discontent.  In his announcement he stated that this would amount to a "cultural reformation" which would focus on three areas:  First, listen to the public voice; second, work for the public good; and third, "transform KHNP into a healthy organization where active and live communication is put into practice among the employees."

It was not long before a massive overhaul of the corporate culture at KHNP was developed and published.  This writer has read more than once, in discussions, statements written by South Koreans to the effect that "we didn't know that things which were normal in our country were considered corrupt until we were educated in the West."  Considering that reality, it's refreshing to see the massive overhaul - but more refreshing still to see that it contains measures to get rid of the systemic problems that have led to the corruption scandal and the parts / quality assurance scandal.

•The program to revise the corporate culture at KHNP is massive and includes many required elements.  The company has decided to both immediately institute massive changes, and declare that from a standing start, 2014 will be "the first year free of corruption" as well as the first of one hundred percent safety focus.  In order to accomplish these goals, KHNP seems to be rooting out its supply chain to ensure there's no collusion, or falsification, or bribery.  The company will increase both transparency with the public and outreach, essential to achieving the public trust.  Management will flood into the field to monitor processes and parts acquisition.  KHNP will form an overall nuclear plant management committee which will have seats filled by persons from its major contractors in order to ensure that this program is spread to these contractors (these include the A&E, constructor, procurement, and major parts supplier areas.) 

The management organization will also be revised at the company, as will the process by its employees are evaluated and promoted. 

KHNP will begin an overall program to install what we'd properly call a 'safety culture' at all levels of operations.  It has identified - clearly, honestly - ten "unhealthy practices" which it will find and stamp out.  These practices were identified by polling of the staff. They are not all listed in the public release, but some of them are; these include "adhesion relationship with subcontractors," "inconvenient and unfair work directives," and "work-related personal gains by fraud."  Of course, two of these are the fundamental causes of the entire situation in which KHNP now finds itself.

•Importantly, KHNP has identified a pair of "people problems" associated with the scandal - its public image, and low personnel morale inside the company.  KHNP will take quick action to restore the public trust via a number of outreach initiatives and construction projects (including a 'national streetlight project' that will illuminate both areas such as schools, and areas with high crime).  To address the sagging morale, KHNP plans to provide training to get employees 'bought in,' and to give them a sense of ownership -- with which they'll be able to realize they can pull through. 

Of course, KHNP has not exactly been quiet about these revelations, and they're being covered slowly in various South Korean media venues.  Click here for a Korea Herald piece.

US Licensing of APR1400 Delayed

The news came out in December 2013 that the licensing process for the APR1400 (the most powerful South Korean plant, and the one on which export effort is focused) in the United States had been delayed, which was received in some circles as news of another damaging blow to the South Korean nuclear energy program.  However, in this writer's opinion, it's important to keep things in perspective.  For starters, not one single utility has stepped up with a plan to build a new APR1400 nuclear plant here.  Of course, many would be quick to point out that South Korea may never intend for that to happen and just seeks the "gold standard" design approval of the US NRC.  That would be my viewpoint, tempered by the assumption that should anyone later wish to build an APR1400 (or the planned more powerful follow-on APR+, rated 1500 MWe and announced by KHNP to be ready for construction about 2016) then they certainly would have the design certification in hand. 

What seems to matter more is that KHNP gets everything right at home first, and second where it's already building its first export plants - the United Arab Emirates, or UAE.  In fact, some analysts believe that the recent cutback in planned nuclear energy capacity in South Korea could be beneficial to its nuclear export business in terms of freed up manufacturing capacity.  While it's certain that KHNP will respond to NRC's requests for more information and continue with licensing, it may be true that the failure to deliver all of the required documentation to NRC is more a sign of focusing on troubles at home than it is a sign of incompetence, or failure to deal with NRC's requirements.

Frankly, in terms of the "gold standard" NRC approval, it would seem clear that some nations will not wait for design certification in the US of given nuclear plant designs before buying them - and as such, KHNP will likely not suffer at all from this development.  In fact, it may also be true that the worst of the scandals are behind KHNP and that it will emerge from this public relations conflagration tempered against things inherent in South Korean business practices which are no longer considered acceptable either for export business of any kind or for nuclear energy anywhere.  Only time will tell that, but given the breadth of the program KHNP's management has announced, the company is off on the right foot.


For more information:

APR1400 Official Site

Emirates Nuclear Energy Corporation page on the APR1400 plants being built at Barakah

KEPCO E&C Nuclear Architect-Engineer Overview


Atomic Power Review has long been reporting on the South Korean nuclear program.  To see a previous story on the topic click here.  This story (from November 2013) also contains links to all of my previous reporting on the subject, as well as a link to my history of the South Korean nuclear program (at least, the part of the program related to the nuclear plants in question, which is that related to the CE80 series plants, and their derived OPR1000 and APR1400 relatives.)

Since that story (linked above) it was announced that JS Cable would close.  Click here for my report on that sequence of events.

12:15 PM Eastern 1/28/2014

Wednesday, January 8, 2014

South Korean parts scandal - JS Cable to close permanently

It has been reported in the press, although not yet at the LS Cable site (parent of JS Cable) that the company at the center of the cabling controversy in South Korean nuclear power plants, JS Cable, is going to be completely shut down.

At the same time as LS Cable announced closure of JS Cable, it announced the donation of 100 million won for use in nuclear safety research.

The three reactors shut down for recabling and reinspection due to having been fitted with I&C cabling supplied by this company have been approved for startup.  Two are on line; the third is expected to be within a week.  However, the scandal has clearly been too much for this company to continue operating the subsidiary - although it has been stressed that as the hearings continue, the company will continue to respond and supply witnesses and information.

Story here:

LS Cable to close JS Cable subsidiary


Previous reporting on this issue at Atomic Power Review:

July 2013 report

September 2013 report

October 2013 report

November 2013 report


UPDATE - 1/13/2014  9:00 AM

A further story on JS Cable was published by The Korea Times.  Click here to read it.

Hyundai Heavy Industries has made a vow to root out corruption, relative to the discoveries made during the Korea Hydro & Nuclear Power scandal.  Click here to read about this development.

Not related to the parts scandal, but of interest indirectly is the report that KEPCO, or Korea Electric Power Corporation, is back to profitability after six years in the red.  Click here to read about it.  Part of the monies raised could include sale of KEPCO's stake in Denison, a Canadian uranium mining firm.  Click here to read about the KEPCO core assets sale.

1:30 PM Eastern 1/8/2014