South Korea: A nuclear industry riddled with corruption

By Neil Harris

THE SOUTH Korean nuclear industry had been hoping to take advantage of Japan’s continuing problems following the disaster at Fukushima. It planned to win orders to build up to 80 reactors around the world in the next decade, using its experience running south Korea’s 23 nuclear plants as an advertisement for its expertise.

As part of its campaign, the state owned Korea Electric Power Corporation opened a new London office and is actively seeking contracts to build and operate the next generation of British nuclear reactors including Anglesey, Oldbury in Gloucestershire and Sellafield.

Unfortunately south Korea’s reactors may not look quite as attractive as the country had hoped after a year of scandals which have rocked its secretive nuclear industry. A number of those reactors have had to be shut down during the swelteringly hot Korean summer, causing electricity shortages, a ban on air conditioning and a series of arrests.

It all started in May 2012, when five senior officials of the Korea Hydro and Nuclear Power Company were charged and later jailed for covering up a dramatic power loss at the Kori-1 reactor, which potentially put the plant in danger of a meltdown.

In November 2012 a whistle-blower revealed that over 5,000 components used in five separate reactors at Yeonggwang Nuclear Power Plant did not have proper safety certificates and that eight suppliers had faked 60 warranties for the parts. As a result two of the reactors had to be shut down for vital components to be replaced, just in time for the peak winter demand for electricity. Arrests of engineers and suppliers followed, together with government assurances that the parts weren’t significant and that everything was under control.

It didn’t take long for those assurances to unravel; in May 2013 another whistle-blower broke cover to reveal that two nuclear reactors were using emergency control cabling that was authorised with forged safety certificates. According to World Nuclear News on 13/8/13, the resulting investigation found that safety-related control cabling with falsified documentation had been installed at four of KHNP's reactors: “Shin Kori units One and Two and Shin Wolsong units One and Two. KHNP was ordered to stop operations at Shin Kori Two and Shin Wolsong One, while Shin Kori One has remained out of operation following scheduled maintenance. In addition, the newly-constructed Shin Wolsong Two, which is awaiting approval to start commercial operation, has been prevented from starting up.”

The four units will not be allowed to operate until the cabling has been replaced – not an easy job in a radioactive environment and expected to take about four months.

The investigations that followed showed that illegal components have been installed in 14 of south Korea’s 23 nuclear power plants and there are still some 120,000 test certificates to be checked for forgeries.

In all 30 suppliers have been raided and prosecutors have opened inquiries into the testing companies for faking safety test results when parts failed, while the Korea Hydro and Nuclear Power Co itself is now being investigated for its role in both scandals.

But the south Korean puppet government has always controlled the nuclear industry and has previously extended it protection from investigations into corruption due to its potential as a source for nuclear materials for military purposes. This is currently by the US government following the south’s last attempt to develop a nuclear bomb.

Meanwhile a freezing cold winter has been followed by a long hot summer and the minister for trade, industry and energy Yoon Sang Jick was forced to urge the public to cut electricity consumption: "We are in a very desperate situation, where we cannot overcome this crisis without all your active support."

Air-conditioning in all government and public office buildings has been turned off and the power companies have been trying to juggle supply and demand to avoid power cuts: "The country's maximum electricity demand is expected to hover above 80,000 MWe a week and far exceeding its generation capacity of 77,400 MWe." He added: "We may have to carry out a rolling blackout ... if a single power plant goes out of operation.”  

What the scandals have revealed is a nuclear industry that, until 2011, was allowed to design, build and manage its nuclear plants at the same time as regulating itself. It promoted itself as having the potential to save the south Korean economy from the worldwide downturn but keeping the reactors on stream and turning in profits required forged safety certificates and bribed officials.

Despite this, the government is going to expand its nuclear power building programme at home adding 16 reactors by 2030, while expanding its export of plants around the world.

Against the imperialist military attack against Syria

We, the communist and workers’ parties, express our solidarity with the Syrian people and denounce the military attack against Syria which is being prepared by the imperialists of the USA, NATO and the EU together with their allies in order to promote their interests in the region.

We reject the pretexts of the imperialists which, as was demonstrated, were also used in the war against Iraq and in the other imperialist wars against Yugoslavia, Afghanistan and Libya.

We call on the working class, the peoples all over the world to oppose and condemn the new imperialist war, to demand that the governments of their countries have no involvement in and do not support the criminal military offensive.

29/8/2013

1. Algerian Party for Democracy And Socialism
2. Communist Party of Australia
3. Communist Party of Azerbaidjan
4. Democratic, Progressive Tribune, Bahrain
5. Communist Party Of Belarus
6. Workers’ Party Of Belgium
7. Communist Party Of Belgium (Wallonia-Brussels)
8. Communist Party Of Bohemia And Moravia
9. Communist Party Of Brazil
10. Brazilian Communist Party
11. Communist Party of Britain
12. New Communist Party of Britain
13. Communist Party Of Canada
14. Communist Party Of Chile
15. Communist Party of Cuba
16. The Progressive Party of the Working People – AKEL, Cyprus
17. Communist Party in Denmark
18. Communist Party of Finland
19. Unified Communist Party of Georgia
20. German Communist Party (DKP)
21. Communist Party of Greece
22. Hungarian Workers’ Party
23. Tudeh Party of Iran
24. Communist Party of Ireland
25. Party of the Italian Communists
26. Jordanian Communist Party
27. Socialist Party of Latvia
28. Socialist People’s Front of Lithuania
29. Communist Party of Luxembourg
30. Communist Party of Malta
31. Communist Party of Mexico
32. Communist Party of Norway
33. Communist Party of Pakistan
34. Palestinian Communist Party
35. Palestinian People’s Party
36. Philippine Communist Party [PKP-1930]
37. Communist Party of Poland
38. Portuguese Communist Party
39. Communist Party of the Russian Federation
40. Communist Workers’ Party of Russia
41. Communist Party of Soviet Union
42. Communist Party of Slovakia
43. Communist Party of Spain
44. Communist Party of the People of Spain
45. Sudanese Communist Party
46. Communist Party of Sweden
47. Syrian Communist Party
48. Syrian Communist Party [Unified]
49. Communist Party of Tadjikistan
50. Communist Party of Turkey
51. Labour Party of Turkey (EMEP)
52. Communist Party of Ukraine
53. Union of Communists of Ukraine
54. Communist Party of Venezuela
55. Communist Party of Albania
56. Communist Party of Bangladesh
57. Popular Socialista APN, Mexico
58. New Communist Party of the Netherlands
59. CP of Denmark
60. CPUSA

Other Parties Not On the Solidnet List

1. Communist Party of Workers of Belarus
2. Danish Communist Party
3. Communist Workers’ Party of Finland
4. Pole of Communist Revival, France
5. Communists People’s Left-Communist Party, Italy
6. Activist Group Shiso-Undo, Japan
7. People’s Resistance, Moldova
8. Party for Socialism and Liberation (USA)
9. URCF (France)
10. Galician People's Union, Spain

The Price of doing business

                                                  By Neil Harris

As the world’s leading imperialist power, America has a dominant role in every field – diplomatically, militarily and, of course, its economy dominates the whole world. It survives by exporting capital and sucking in cheap labour, natural resources and profits. However, the highly successful world of American finance capital also has a dark side, normally glossed over; the American government is the greatest debtor in the world and that debt is still growing.

This US Federal debt, which reached $9909 billion at the end of 2012, is often discussed, but not in much detail. The complex flows of capital around the world, ending up at the US Treasury department highlight some interesting realities about the world economy and America’s relationship with it.

Out of the total debt of $9 trillion, 56.2 per cent was held by foreign investors in December 2012 and of that 72.3 per cent was held by ‘official investors’ such as governments and national reserves. The list makes interesting reading, the top ten lenders are 70.9 per cent of the total.

As is well known, the greatest lender to America is People’s China, a socialist country propping up the world’s greatest imperialist power by lending it $1.2 trillion or nearly 22 per cent of all its foreign debt. Except that this lending is essentially enforced, as is lending by the other countries on the list. In China’s case its ‘market economy’ is dominated by its export led consumer goods industries and this has always relied on American (or America’s allies) technology and investment as well as access to American markets. Re-investing that balance of payments surplus into the US Federal debt is the price of doing business with America.

Interestingly, at sixth place lending $195 billion (3.5 per cent) is Taiwan, just as reliant on American markets and technology as People’s China. At tenth place is the autonomous region of Hong Kong which lends $142 billion (2.5 per cent), paying just the same entry fee for access to American markets. Overall, ‘greater China’ takes up three places in the top ten, lending 27.9 per cent of the total foreign held debt.

In an honourable second place is Japan which lends just short of 20 per cent ($1,111 Billion). This is just the same fee for access to American markets but is also a mechanism by which Japan uses the investment to reduce the value of the yen against the dollar.

A country like Brazil (sixth 4.5 per cent) with an unstable, developing economy but with lucrative foreign currency earnings from farming and raw materials is always looking for a safe haven for its money. More surprising is to find a similar economy like Russia represented in eighth place with 2.9 per cent or $161.5 billion. America’s condemnation of the Putin regime has never extended to refusing to take its money – and Putin’s criticism of US imperialism will always be muted while Russia remains so reliant on the American economy.

‘Oil Exporters’ (not including Russia) make up $262 billion or 4.7 per cent of foreign holdings and this puts them in fourth place. With the exception of the Norwegian State North Sea oil fund which has been well run, the history of oil producers ‘sovereign funds’ has been an investment history of vast sums of money lost through bad advice, corruption and incompetence. It’s not surprising to see so much of their money invested in the relatively safe haven of US federal debt. Except that just like the bloated and unnecessary arms purchases forced on Middle Eastern oil sheikdoms, this investment is a price that they have to pay to ensure that their autocracies will continue to be propped up by the American military – which in turn is paid for by US government debt.

At the end of the month when you are a bit short of cash, you have to borrow the money from wherever you can which is partly why Russian and Chinese money plays such a big role in this list. However, these figures have to be treated with a degree of caution – they represent the location of the holdings not necessarily the nationality of the holder or even the true nature of the ownership in some cases. Therefore in the case of Hong Kong, the figure may well be bloated by the desire of individuals and organisations to export funds from China, to hide them from the state. Similarly, the ‘New Russians’ and their corporations are just as keen to find a safe foreign home for their money.

There’s an awful lot of American money being hidden in the US Treasury too and this isn’t referring to conventional private investors. Given America’s ‘War on Drugs’ and condemnation of ‘tax havens’, there are some surprises on the list.

In ninth place is tiny Luxembourg lending a massive $155 billion (2.8 per cent) far more than Britain, Germany or France whose economies tower above it. Lacking any real industry or raw materials, these are funds derived from its shadowy and secretive world of ‘offshore’ banking. Luxembourg is manipulating, laundering and generally hiding the ill-gotten gains of assorted European capitalists and criminals – then depositing the capital with the US Treasury department.

For the better class of European tax avoider you can’t go wrong with Switzerland, the refuge of choice for White Russians, Nazis, dictators, politicians and celebrities. It comes in at seventh place with $195.4 Billion (3.5 per cent) of dirty money dumped in America.

The Drugs Enforcement Agency may have a fearsome reputation in the Caribbean and Latin America for mercilessly hunting down drug dealers and extraditing them back to the states for trial but they haven’t had it all their own way. The coyly named ‘Caribbean banking centres’ come in at third place amongst the list of largest foreign lenders to the US Government.

A scattering of tiny island paradises are lending the US a staggering $266.2 billion (4.7 per cent of the total) and these billions are made up of the life savings of assorted American small businessmen, dentists and doctors who have hidden their savings pot in offshore banks – as do giant corporations. The tiny banks taking such big deposits are propping up the economies of an archipelago of offshore banking islands, where questions are rarely asked. This is because they are also the financial home of choice for fraudsters, the directors of Ponzi schemes, the mafia, the drugs cartels of Mexico and Latin America, as well as all the generals and dictators – their extended families and hangers-on - that kept this part of the world safe for US capitalism for the last 100 years. That money, like all the rest, ends up back home in America, which is why this whole process is allowed to continue.

You might imagine that the countries that lend America the money that keeps its state running would have some power over it; ‘he who pays the piper calls the tune’.  In fact the opposite is true, each is lending money as a tribute, part of a worldwide protection racket run by America. It’s the price of doing business with the greatest imperialist power.

  

TOR: The Trap closes

By Neil Harris

LAST YEAR a New Worker article exposed TOR (The Onion Router) as a US Government “honey trap”, designed to support America’s friends and entrap its enemies. Our interest developed further after some excellent research by “Cryptome.org”.

On the face of it TOR appears to be a subversive hacktivist site, offering anonymity to anarchists, political dissidents, leakers, internet activists and the underground criminal world. In fact, the systems used on the site were developed by a unit of The US Office of Naval Intelligence as part of US “Public Diplomacy”. Currently TOR’s three biggest sources of funding are: The US Department of Defence, The US State Department and The Board of Broadcasting – another propaganda arm of the US Government.

While providing some assistance to US intelligence, TOR’s main role has been to encourage the destabilisation of regimes around the world that America does not approve of. It does this by providing an anonymous internet hideaway and communications hub to opposition groups it approves of. However to work properly, the site needs thousands of innocent, idealistic people who allow their computers to become part of the network (The Onion) which allows data to be “routed” between at least three home computers, to hide its origins.

Our concerns followed recent FBI arrests of activists from Lulzsec/Anonymous as well as those involved in “The Farmers Market”, a criminal site offering a market in illegal drugs. While the FBI highlighted its use of informants in securing those arrests, the evidence they used to put together the cases appeared to come from access to TOR, which both organisations had used and trusted.

Last week, the FBI was busy again, this time in Ireland where Eric Marques was picked up on a US arrest warrant for distributing and promoting child abuse material online. We certainly wouldn’t want anything to do with a rat like Marques, a major supplier of images of child abuse. His “Freedom Hosting” site also provided a home to many other anonymous sites on TOR and in addition to paedophilia these include the notorious “Silk Road” which matches customers to drug dealers as well as other sites offering illegal weapons for sale or the services of hit men.

In response to concern amongst its more legitimate users, TOR posted a detailed statement that appeared to be for the benefit its US Government sponsors: "The persons who run Freedom Hosting are in no way affiliated or connected to the Tor Project Inc, the organisation co-ordinating the development of the Tor software and research."

It went on: "Anyone can run hidden services, and many do…organisations run hidden services to protect dissidents, activists, and protect the anonymity of users trying to find help for suicide prevention, domestic violence, and abuse recovery.”

All of which may be true, but this should be a warning to those who still trust TOR and imagine that their secrets are safe there: “Whistle-blowers and journalists use hidden services to exchange information in a secure and anonymous way and publish critical information in a way that is not easily traced back to them. The New Yorker's Strongbox is one public example."

Every indication is that the “secrets” on TOR are not hidden from the US Government. Another example is Wikileaks which has made extensive use of TOR. During the recent trial of Bradley Manning, evidence produced by the US Military included emails allegedly sent between Manning and “pressassociation” who, allegedly, was Julian Assange. Once again TOR appears to have been the anonymiser Manning was encouraged to use.

Perhaps more interestingly, as a result of the operation against Marques, we now know that the TOR Browser appears to have been compromised by the insertion of JavaScript malware, and that this was analysing and sending off information identifying visitors to the sites on “Freedom Hosting”.  Not surprisingly this started a panic amongst users, one quoted on the Guardian’s website wrote: "The situation is serious," said gmerni. "They got the owner of FH and now they're going after all of us. Half the Onion sites were hosted on FH! Disable JavaScript in your Tor browser for the sake of your own safety."

But this doesn’t stop with the FBI – the information trail was followed by “Ars Technica”, a more technical site which was looking for the ultimate destination of this “secret” data:

“Initial investigations traced the address to defence contractor SAIC, which provides a wide range of information technology and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) support to the Department of Defence. The geolocation of the IP address corresponds to an SAIC facility in Arlington, Virginia. Further analysis using a DNS record tool from Robtex found that the address was actually part of several blocks of IP addresses allocated by SAIC to the NSA.”

Naturally The National Security Agency (NSA) would always be an interested client of any organisation with access to confidential information about political dissidents, journalists, terrorists or criminals around the world.

As our original article pointed out, TOR’s website even carries what appears to be a warning to users: “Law enforcement uses Tor for visiting or surveilling web sites without leaving government IP addresses in their web logs, and for security during sting operations.” This looks very much like a legal warning, putting users on notice that they are liable to arrest and is designed to avoid the use of the defence of entrapment in the US courts.

You have been warned.

Latest Revolutionary Democracy

Review

By Ray Jones

Revolutionary  Democracy Vol XIX No 1 April 2013. £4.50 plus 50p from NCP Lit, PO Box 73, London SW11 2PQ.

This issue of Rev Dem includes the usual in-depth articles on Indian politics as well as a wide range of material from around the world and historical documents.

There are two interviews with Aleksandra Kollontai, a leading woman Bolshevik in the 1930’s, on the situation of women in the Soviet Union.

There’s also two interesting records of meetings between Stalin and Mao – in which Kim Ill Sung gets a mention. These give an insight into the early relationship between the Soviet Union and revolutionary China.

Rafael Martinez provides a scathing critique of the economic programme of the South African Communist Party (SACP). This centres on an attack on “market socialism” with a side swipe at “peaceful coexistence”.

While I feel there is some weight to his criticisms of  market socialism in general I think in other places he goes off the mark. His suggestion that the concept of “democracy” is not a Marxist Leninist one is surely mistaken – the concept of “Democratic Centralism” immediately springs to mind.

And I think he’s a little unjust to some quotes he gives from the SACP – even if his unease that their policies has some basis.

Culture as usual is not forgotten in Rev Dem. There is a highly self-critical article by Sergei Eisenstein on his film Bezhin Lug from International Literature, 8, 1937. This gives an idea of how art was considered in the Stalin period in the Soviet Union.