Over 20 senior officials from Korea Hydro Nuclear Power arrested for corruption

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The most recent controversy comes after a series of bribery allegations involving the Korea Hydro Nuclear Power (KHNP)employees since February, when there was a power outage at the Kori plant on February 9th of this year, where a unit briefly lost power and the backup emergency generator failed to kick in.

This week the Ulsan District Prosecutors’ Office in Korea announced that it has charged 32 people with corruption, and arrested and indicted 23 senior officials of the state-run utility on charges of taking bribes from subcontractors — setting a new record for the largest amount of officials from one state firm arrested related to a single corruption case.

Prosecutor says case confirmed structural corruption

The indicted officials of the Korea Hydro Nuclear Power (KHNP) are two vice presidents and four senior managers at the company’s headquarter in Seoul, and 16 manager-level engineers at local plants.  They allegedly received at least 2.22 billion ($1.94 million USD) in exchange for helping vendors and suppliers clinch lucrative deals with the company.

“The case confirmed structural corruption such as bribery, bid-rigging and favours at one of the country’s major state firms,” prosecutor Koo Bon-Jin told reporters.

Vice Presidents

The prosecution said one of the two vice presidents, only identified as Kim, is suspected of taking 70 million won ($61,290 USD) from two subcontractors. The other vice president, identified as Lee, allegedly received 10 million won ($8,750 USD) from a different subcontractor.

Manager-Level Engineers

The 16 manager-level engineers are suspected of taking up to 450 million won ($393,700 USD) in bribes from subcontractors in exchange for helping supply companies clinch lucrative deals with the agency.

Subcontractors

The prosecution added some of the subcontractors had supplied defective goods including engines and pressure gauges for years. Prosecutors also indicted nine subcontractors of supply firms and brokers for offering bribes to the KHNP officials.

Insider Information

Prosecutors said they also notified the state agency of 12 other employees who they said were involved in minor acts of corruption including stock trading on inside information or taking petty bribes.

“The latest investigation confirmed deep-rooted corruption between lobbyists and the state firm in relation to bribery, bid rigging and favors in selecting suppliers,” a prosecution official said. “These have been difficult to investigate due to the state facility’s nature of confidentiality and professionalism.”

History of Kori -1

The Kori No. 1 reactor has been notoriously problem-ridden ever since going on line in 1978. It has accounted for 20% of all the accidents in South Korea to date.   It went offline in 2007 when it completed its 30-year life cycle, but was given a 10-year extension.

Actions after February 9th Blackout

After Korean investigators discovered that the five chief engineers tried to cover up the February 9th blackout, they also found that the generator was left unfixed several days after the incident.

The prosecution subsequently launched an investigation to look into corruption allegations surrounding the KHNP officials across the country, and found out a number of them accepted money from subcontractors in return for business favor.

IAEA Investigation of Blackout

The Korean Nuclear Safety and Security Commission shut down the Kori -1 reactor after the blackout, then conducted an “emergency safety check” on the reactor, and also invited an eight-member team from the International Atomic Energy Agency (IAEA) to carry out a separate, independent examination — even though neither the country’s nor IAEA’s safety regulations required such a move.

To some, it was further indication that the IAEA visit was just for show, a formality requested by the KHNP to get the plant running again.

The subsequent IAEA report concluded that the February event was largely attributable to the lax safety culture of KHNP employees and violations of operation and servicing procedure.

In particular, the IAEA report said the incident was not the result of a simple mistake, but the product of “overconfidence of [the] worker due to long experience with” the generation protection test, which led to violations of procedure and safety regulations.  However, they provided no detailed explanation as to why the same generator stayed idle during the 12-minute blackout.

Penalties and Judgements

The safety commission imposed a 93 million penalty ($81,840) in fines on the utility for two accounts of safety regulation violations, including removing fuel rods when the back-up generator was incapacitated.

In May, five engineers at Kori were charged with trying to cover up the potentially dangerous power failure.  In an unrelated case, a businessman was jailed for three years for supplying potentially defective parts to the Kori plant.

Meanwhile, the Ulsan District Court handed down one-year prison sentence to a manager-level engineer of the Kori -2 Nuclear Power Plant for bribery. It also ordered him to pay 14.8 million won ($12,940) in fine.

Gori Restart

On July 4th, the Korean Nuclear Safety and Security Commission granted permission to put the Kori plant back on line.

Source: Korea Times

Source: My Sinchew

Source: The Hankyoreh

Source: Korea Times

Source: Yon Hap News Agency

Source: The Hankyoreh

Source: The Korea Times

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