KHNP tries to avoid legal woes

Korea Hydro and Nuclear Power (KHNP) has been consulting with its parent company and law firms to avoid possible legal issues stemming from a temporary halt to construction of two nuclear reactors.

The energy supplier received input from its owner, the Korea Electric Power Corporation (Kepco), last week before the board voted to suspend construction of the Shin Kori 5 and 6 reactors so that a government commission can hear public opinion on the project, according to Kim Jung-hoon, a lawmaker from the opposition Liberty Korea Party, who was briefed Wednesday on the matter.

President Moon Jae-in had ordered KHNP last month to temporarily halt construction of the two reactors, which is in line with his policy goal of eliminating Korea’s dependence on nuclear energy.

Kepco, a state-owned utilities company, has a 100 percent stake in KHNP. It conveyed support for the KHNP board in a letter before their meeting last week to discuss the fate of the reactors.

“As a shareholder, we have voting rights through the shareholders’ meeting for your company’s decision making, but this agenda is something for your company’s board members to decide on,” Kepco told KHNP in a letter. “We hope the board will decide on this issue by cooperating closely with the government and related institutions to fulfill its responsibility as a public institution.”

Kepco’s letter indicates the company believes the decision on the reactors’ fate belongs to KHNP’s board but also that KHNP should cooperate with the government’s policy as a “public institution.”

KHNP requested Kepco’s advice because it was concerned about the possibility of running into legal problems from the reactor project’s suspension. Minutes from the KHNP board meeting last week showed the nuclear power plant operator also solicited advice from major law firms in the country including Bae, Kim & Lee and Lee & Ko.

“The official letter from the Ministry of Trade, Industry and Energy sent to KHNP is based on a decision made by the president’s cabinet, and it falls within reason to temporarily suspend construction,” lawyers from Bae, Kim & Lee said.

Lee & Ko concurred, saying the Trade Ministry’s request to KHNP stemmed from a cabinet order and since KHNP is a state-owned company, it should follow the order.

Construction of the Shin Kori 5 and 6 reactors will stop for three months while a commission deliberates on the matter.

On Wednesday, KHNP’s labor union filed an injunction to suspend the board members’ decision to halt the construction. The union accused the board of making its decision without first consulting with the union, and said that it would consider suing the board for damages stemming from the shutdown, including compensation.

Earlier on Monday, KHNP CEO Lee Kwan-sup said he would do all he can to prevent the temporary halt from turning into permanent shutdown of the project.

He said that because the government has decided to hear the public’s opinion on the issue, he would try to explain to the people during the three-month public assessment process that the nuclear power plants are safe to use as energy sources.

BY KIM YOUNG-NAM, LEE SEUNG-HO [kim.youngnam@joongang.co.kr]