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Wall Street Journal (US): Coverup at French Nuclear Supplier Sparks Global Review

Wednesday 14 December 2016

Coverup at French Nuclear Supplier Sparks Global Review

Inspectors say Areva unit’s files suggest manufacturing flaws in critical parts were covered up for decades

Wall Street Journal, Dec. 13, 2016 5:30 a.m. ET

By MATTHEW DALTON and INTI LANDAURO in Paris and REBECCA SMITH in San Francisco

Inspectors from the U.S. and other countries are investigating a decadeslong coverup of manufacturing problems at a key supplier to the nuclear power industry, probing whether flaws introduced in a French factory represent a safety threat to reactors world-wide.

Inspectors from the U.S., China and four other nations visited Areva SA’s Le Creusot Forge in central France earlier this month to examine the plant’s quality controls and comb through its internal records.

A string of discoveries triggered the newly expanded review: First, French investigators said they found steel components made at Le Creusot and used in nuclear-power plants across France had excess carbon levels, making them more vulnerable to rupture. Then, the investigators discovered files suggesting Le Creusot employees for decades had concealed manufacturing problems involving hundreds of components sold to customers around the world.

The disclosure of flaws covered up by Le Creusot led to two reactor shutdowns this summer in France, and in September authorities ordered Areva to check 6,000 manufacturing files by hand, covering every nuclear part made at Le Creusot since the 1960s.

“I’m concerned that there keep being more and more problems unveiled,” said Kerri Kavanagh, who leads the U.S. Nuclear Regulatory Commission’s unit inspecting Le Creusot. Regulators are considering returning to Le Creusot or inspecting Areva’s Lynchburg, Va., offices to deepen their probe of the plant, a U.S. official said.

On Wednesday, Paris prosecutors opened a preliminary investigation into whether Le Creusot’s activities were fraudulent and dangerous, according to a spokeswoman for prosecutors.

“What we see now at Le Creusot is clearly unacceptable,” said Julien Collet, assistant general manager at France’s Nuclear Safety Authority.

Areva executives have acknowledged the records falsifications and blamed them on a breakdown of manufacturing controls spanning many decades at Le Creusot. Areva has since tightened its controls and is cooperating with the regulators’ reviews, company officials said.

“We’re facing a problem of ‘quality culture,’ ” said David Emond, a senior Areva executive in charge of Le Creusot, in an interview. “ ‘Quality culture’ means declare a problem so it can be addressed, whether it’s serious or not.”

Areva executives said Le Creusot stopped falsifying documents in 2012, when oversight of quality control was removed from an internal office at the factory to a different Areva factory in Saint-Marcel, France. French regulators said they are investigating that claim.

Beyond France, regulators are trying to determine whether other nuclear facilities that relied on components from Le Creusot are safe. Finnish inspectors visiting the forge last week said they learned of potential flaws in a component slated for a reactor in the southwestern island of Olkiluoto. In the U.S., the NRC has identified at least nine nuclear plants that use large components from Le Creusot.

Still, NRC spokesman Scott Burnell said the agency’s “examination of the evidence, to this point, fails to raise a safety concern” with U.S. facilities, adding that “no final conclusions have been reached.”

Le Creusot’s production and documentation practices uncovered by the regulators risk undermining public trust in an industry still struggling to recover after the disaster caused by an earthquake and tsunami at Japan’s Fukushima nuclear plant in 2011. That manufacturing irregularities have been found in France—a leading exporter of nuclear technology to the rest of the world—is even more troubling for the industry.

‘Likely we have seen only the tip of the iceberg.’
—Mycle Schneider, nuclear energy consultant

France occupies a key place in the supply chain for the global nuclear power industry. With a history dating back to the dawn of the industrial revolution, Le Creusot is one of just a handful of manufacturing sites around the world capable of forging the enormous steel components that lie at the heart of nuclear power plants.

Officials and experts said the instances of manufacturing problems at Le Creusot are rare in the nuclear industry, where strict adherence to production and operating rules forms a crucial buffer against nuclear accidents.

“Having worked for over 30 years in France, I did not think this was possible for this country,” said Mycle Schneider, an independent nuclear energy consultant. “Likely we have seen only the tip of the iceberg.”

French investigators say the most serious safety threat they uncovered at Le Creusot concerns a nuclear power plant in the eastern French town of Fessenheim, on the border with Germany. Areva inspectors earlier this year unearthed a 2008 document at Le Creusot that showed a piece of flawed steel had been left on the protective casing of a steam generator at Fessenheim. That component weighs hundreds of tons and transforms the reactor’s heat into steam under immense pressure.

“Warn the [supervisor] during tracking to determine next steps,” wrote one employee in an excerpt of the document reviewed by The Wall Street Journal.

French regulators and Areva inspectors said they found the document inside a dossier barré—a folder Le Creusot marked with two dashes that investigators said signaled it shouldn’t be shown to customers or regulators. Fessenheim later installed the part relying on documents Le Creusot provided to regulators that made no mention of the problems.

Electricité de France SA, which this year agreed to buy most of Areva’s nuclear-reactor business including Le Creusot, shut the reactor at Fessenheim this summer after learning of the dossier barré. More than 200 of these previously undisclosed files have been found this year, the earliest dating from the 1960s.

EDF said initial tests of its Fessenheim reactor showed it is safe to operate even with the flawed steel on the steam generator. The French nuclear regulator is examining the issue, a process that officials said would take months.

Last week’s inspection has turned up a concern with one of Areva’s next-generation reactors, the European Pressurized Reactor under construction in Finland, versions of which are also planned for plants in China, France and the U.K.

Of the nine plants in the U.S. with parts from Le Creusot, at least one has a component with documentation problems, according to the NRC. Areva informed its owner, Dominion Resources Inc., that a manufacturing problem wasn’t detailed in final documents given to Dominion for its Millstone plant in Connecticut. Areva and Dominion say the discrepancy isn’t a threat to the safety of the Millstone reactor.

Write to Matthew Dalton at Matthew.Dalton@wsj.com, Inti Landauro at inti.landauro@wsj.com and Rebecca Smith at rebecca.smith@wsj.com

Corrections & Amplifications:
The Fessenheim nuclear plant is in eastern France. A photo caption on an earlier version of this article incorrectly said it was in northwestern France. (Dec. 13, 2016)016)

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