South Korea and Nuclear Safety

The coat of arms of South Korea Español: escud...
The coat of arms of South Korea Español: escudo de Corea del Sur 日本語: 大韓民国の国章 中文: 大韩民国国徽 (Photo credit: Wikipedia)

South Korea and Nuclear Safety

South Korea has become the center of a nuclear corruption scandal. Basically, parts that meet the safety requirements of a nuclear plant are expensive. Sub standard parts can save a plant operator millions upon millions of dollars. So, they faked the required documents and used sub standard parts on what appears to be a gigantic scale.

Now, I’m one of those foolish people who keep pointing at the record of problems with nuclear safety. I have the perception regarded by many, even some modern environmentalists as foolish, that nuclear power has been distinguished by lies, exaggerations, safety violations and the occasional complete disaster during all of the history of its use.

Isn’t this a cautionary tale when many reactors in the fourth most powerful economic power in Asia are found to be using parts that in an emergency will fail?

What worries me is the enormous sums of money to be made by evading the safety standards. If a nuclear plant melts down, thousands of square miles can be unusable for human habitations for tens of thousands of years. In fact, the exclusion zone at Chernobyl is 1,006 square miles. For comparison, Benton County in Arkansas is roughly 880 square miles. Oklahoma City is 612 square miles. it’s a lot of real estate to lose permanently unless you consider twenty thousand years or so a reasonable amount of time to wait.

I believe that the temptation to make millions of dollars by evading the regulations in nuclear power plants makes a nuclear disaster inevitable.

James Pilant

Below are a few news stories on the South Korean nuclear corruption story.

South Korea charges 100 with corruption over nuclear scandal

October 10th, 2013 South Korea
has indicted 100 people, including a top former state utility official,
of corruption in a scandal over fake safety certifications for parts in
its nuclear reactors, authorities said on Thursday.

Asia’s fourth largest economy
has faced a series of shutdowns of nuclear reactors due to fake
documents going back to late 2012. Of its 23 reactors, six remain
offline, including three halted in May to replace cables supplied with
bogus certificates.

hope the so-called nuclear mafia style behavior would be rooted out if
strict investigations and law enforcement and system reforms continue,”
Kim Dong-yeon, a top government policy coordinator, told a news

Stung by Scandal, S. Korea Weighs Costs of Curbing Nuclear Power

October 28th, 2013

A shift away from nuclear, which generates a third of South Korea’s
electricity, could cost tens of billions of dollars a year by boosting
imports of liquefied natural gas, oil or coal.

Although helping calm safety concerns, it would also push the government
into a politically sensitive debate over whether state utilities could
pass on sharply higher power bills to households and companies.

Gas, which makes up half of South Korea’s energy bill while accounting
for only a fifth of its power, would likely be the main substitute for
nuclear, as it is considered cleaner than coal and plants can be built
more easily near cities.

“If the proportion of nuclear power is cut, other fuel-based power
generation has to be raised. If we use LNG, the cost will definitely go
up,” said Hwang Woo-hyun, vice president of state-run utility Korea
Electric Power Corp (KEPCO).

Scandal threatens South Korea nuclear-export ambitions

November 7th, 2013 Selling nuclear equipment is a point of pride for a nation that has
made stunning gains in technology in a single generation. South Korea
also has planned to step up nuclear power at home as a way to reduce
fossil-fuel imports and burnish its green credentials. Eighteen plants
are supposed to be built before 2030.

“That’s going to be in jeopardy,” said Katharine H.S. Moon, professor
of political science at Wellesley College. However, “if the government
can correct this efficiently and quickly and transparently, they will
have a better chance of resuming their export ambitions.”

The investigation isn’t the first problem to hit the South Korean
nuclear sector this year. Two reactors were temporarily shut down last
month after malfunctions, and corruption charges hit employees at the
state nuclear power agency earlier this year. In the latest scandal,
South Korean media reported that the forged safety certificates only
came to light because of an outside tip, which has added to the public

“I don’t think you can have confidence that the system is working
until the agencies catch these things on their own,” Lyman said.

From around the web.

From the web site, Counterfeit Parts.

South Korea Shuts Down 2 Nuclear Reactors – VOA Breaking News

South Korea has been forced to shut down two nuclear reactors to replace components provided with fake quality certificates…

Some You Tube Video’s You May Find Interesting in the Context of Business Law

This first selection is a documentary telling the story of how General Motors bought out the public transit systems particularly cable cars and replaced them with bus lines. It’s an older documentary but it’s a good one. You should watch it if only for the scene of the cable cars being put to the torch.

Documentary Film Video General Motors History = Taken for a Ride.flv

This documentary discusses whether faults in the design played a major role in the loss of the ship.

Titanic’s Achilles Heel (2007) History Channel

This one is about an unusual fire in a high rise building in Hong Kong. If you are interested in fire investigation, this one is fascinating.

Blueprint For Disaster – S02E05 – Hong Kong Inferno

Try these three on for size. Remember the rules on tort liability from your business law class and see if you can tell which ones apply.

James Pilant

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Can Manufacturing Come Back?

Joseph Stiglitz, one of my favorite economists, believe that Asia is “decoupling” from the United States and Europe. You see, the United States is a 300 million population but if you sell to India and China alone of the nations in the region, you have 2.6 billion consumers. It’s a better market in the long term than the United States or Europe as well as providing necessary long term benefits to the nations themselves.

But there are other reasons, the great nations of Asia are likely to shift more to domestic production and investment. In the past, China, India, South Korea, Japan, etc. invested in the United States. They as well as many European nations bought into the housing bubble as well as many more reliable investments. They did this in the belief that the United States was reliable investment environment and that, more importantly, Wall Street had great skills in the banking and other investment industries. Of course, the “legendary” expertise of Wall Street was no more than successful propaganda protecting a rotting edifice that through financial “innovation” and simple greed severely damaged the world’s economy.

If you were a government official would you encourage investment in the United States or take the advice of any Wall Street investment firm? I’m sure there are some officials remaining who can hold that view but the long term does not bode well for U.S. investment or purchasing, you see, the development of the domestic market in these countries means a rise in the standard of living, an increase in wages and rise in prices. All of these factor mitigate against the corporate dream of an endless stream of off shored jobs pushing their profits.

But this is an opportunity. As these other nations develop higher standards of living and their purchasing power increases, we can sell them products. We can make things again. If we start now, and by now I mean by the end of this decade, for not only is there no political will, intelligence or leadership, the current business philosophy will not allow the government to encourage such investment. The United States government since the 1980’s has pursued a policy of the financial sector as a priority as opposed to the poor stepchild of manufacturing. The result of this policy are all around us. We can do better.

James Pilant