Ethical Performance
inside intelligence for responsible business


Massive corruption undermines South Korea's nuclear industry

November 2013

Concerns about the safety of nuclear power became widespread in South Korea after the nuclear accident at Fukushima, Japan in 2011, prompting a critical examination of the country’s nuclear industry.

Initial worries mushroomed to major public discontent with the discovery that fake documents certified critical components in nuclear power plants. Six of Korea’s 23 reactors are now off line as a result. These used to generate about a third of the country’s electricity supply.

The government has since replaced faulty components used in the 20 nuclear reactors currently operating and says that that faulty parts have caused abrupt reactor shutdowns 128 times over the past decade.

So far, prosecutors have indicted 100 people on corruption charges. Of these, 60 were officials from parts suppliers and quality certification agencies; 35 were officials at government-run sectors of the industry. Those indicted include the former chief executive at Korea Hydro and Nuclear Power Co., a former vice president of Korea Electric Power Corporation, and a former vice commerce minister.

Through supplying faulty cables, one major supplier, JS Cable Co. Ltd. has caused a one-year delay for two new reactors and additional costs of KRW 4 trillion. The company has been banned from government contracts and is expected to go into liquidation.

The problems have forced reactor shutdowns, which triggered summer power shortages and rocked public confidence in nuclear power even more.

The scandal has also dealt a blow to South Korea’s hopes to expand nuclear exports. The country competes for nuclear projects worldwide.

In December 2009, it won a US$20bn contract to supply the U.A.E. with four reactors, its first overseas deal. These are currently under construction but with Korean cabling replaced by that from a US maker.

A vigorous debate about nuclear policy is now under way. However, there are no easy answers. South Korea has few energy resources of its own and must rely on imports of oil and natural gas, as well as nuclear power.

Long-term, South Korea plans to cut reliance on nuclear energy to between 22-29% by 2035 from the current 41%. Even so, it expects to build 11 more reactors by 2024 to meet growing demand. 

Asia | Corruption

3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter