South Korea widens nuclear lapses probe; KEPCO chief resigns

SEOUL Wed Nov 7, 2012 4:25am EST

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SEOUL (Reuters) - South Korea widened a probe into how thousands of parts for its nuclear reactors were supplied using forged safety documents, with regulators set to inspect all 23 of the country's facilities - a move that could test public support for the industry and threaten billions of dollars worth of exports.

Two reactors remained shut on Wednesday, and five others are closed for maintenance, or through other glitches, raising the prospect of winter power shortages. The nuclear industry supplies close to a third of South Korea's electricity.

The authorities have stressed that the parts - such as fuses, switches and heat sensors - are non-crucial, and there is no safety risk.

Kim Joong-kyum, president and CEO of power utility Korea Electric Power Corp (KEPCO), which owns the operator of the nation's nuclear plants, tendered his resignation for what KEPCO officials said were "personal reasons". The presidential office would decide this weekend whether to accept Kim's resignation, an economy ministry official said.

A second nuclear official, appointed in June after a series of closures at other nuclear plants, also said he would resign once the investigations over the latest lapses were completed.

"I am sorting out what happened in the past. I will resign at any time once this is settled," Kim Kyun-seop, head of Korea Hydro & Nuclear Power, the KEPCO subsidiary that runs the country's nuclear industry and reviews equipment certification, told a parliamentary hearing.

KEPCO stock fell 3 percent to its lowest close in a month.

The closure of the two reactors in Yeonggwang county, 300 km (186 miles) southwest of the capital Seoul, and concerns of more widespread potential problems with a large and growing nuclear program, come after last year's nuclear disaster in neighboring Japan.

"Following Fukushima, our residents have become more and more concerned about safety levels at the reactor," said Na Seung-man, who chairs the local council in Yeonggwang.

PROBE WIDENED

South Korea's Nuclear Safety & Security Commission said it set up a team of 58 private and public investigators to inspect all the country's reactors to see if they were supplied with parts with forged certificates.

"The team will inspect all 23 reactors, which will take some time, as you can imagine," a spokeswoman for the commission, which supervises nuclear safety, told Reuters. The commission said it plans measures to improve supply systems, quality controls and external auditing.

Eight companies submitted 60 false certificates to cover more than 7,000 parts used in the two reactors between 2003 and 2012, and Economy Minister Hong Suk-woo told parliament that most of the documents, which purported to come from certifying body UCI, were forgeries.

A senior ministry official told Reuters that UCI was one of 12 U.S. certifiers, but was not one of the eight firms under investigation. The firms have not been named.

Public support for nuclear power remains strong in South Korea, even after the Fukushima disaster last year, and Seoul plans to have added another 11 reactors by 2024.

The regulator, however, has come under fire.

"The problem here is that nothing has been done to put in place a system that will allow for oversight, at a time when we need stepped up safety management," opposition legislator Oh Young-sik of the Democratic United Party told parliament.

NO RISK TO BIG CONTRACT

The investigation had not prompted the United Arab Emirates (UAE) to reconsider its 2009 order for some $20 billion worth of nuclear plant and construction work contracted to a KEPCO-led South Korean consortium, [ID:nL3E8F341H] a spokesman for the Emirates Nuclear Energy Corporation told Reuters in Dubai.

Also, Byun Jun-yeon, an executive vice president at KEPCO in charge of reactor exports, told Reuters the fraud would not damage the utility's export drive.

"The effects of this development on existing contracts like the UAE will be insignificant," he said. "From what I understand, the parts that were fraudulently certified were not key to the function of the nuclear reactor, rather they were for general usage in non-critical aspects.

"It's an ethical failure."

(Additional reporting by Jack Kim and Narae Kim in SEOUL and Amena Bakr in DUBAI; Editing by Ian Geoghegan)

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