Sunday, December 20, 2015

Fukushima and Volkswagen: Systemic Similarities and Observations for the U.S. Nuclear Industry

Fukushima
VW Logo (Source: Wikipedia)
Recent New York Times articles* have described the activities, culture and context of Volkswagen, currently mired in scandal.  The series inspired a Yogi Berra moment: “It’s deja vu all over again.”  Let’s look at some of the circumstances that affected Fukushima and Volkswagen and see if they give us any additional insights into the risk profile of the U.S. commercial nuclear industry.

An Accommodating Regulator

The Japanese nuclear regulator did not provide effective oversight of Tokyo Electric Power Co.  One aspect of this was TEPCO’s relative power over the regulator because of TEPCO’s political influence at the national level.  This was a case of complete regulatory capture.

The German auto regulator doesn’t provide effective oversight either.  “[T]he regulatory agency for motor vehicles in Germany is deliberately starved for resources by political leaders eager to protect the country’s powerful automakers, . . .” (NYT 12-9-15)  This looks more like regulatory impotence than capture but the outcome is the same.

In the U.S., critics have accused the NRC of being captured by industry.  We disagree but have noted that the regulator and licensees working together over long periods of time, even across the table, can lead to familiarity, common language and indiscernible mutual adjustments. 

Deference to Senior Managers

Traditionally in Japan, people in senior positions are treated as if they have the right answers, no matter what the facts facing a lower-ranking employee might suggest.  Members of society go along to get along.  As we said in an Aug. 7, 2014 post, “harmony was so valued that no one complained that Fukushima site protection was clearly inadequate and essential emergency equipment was exposed to grave hazards.” 

The Volkswagen culture was a different but had the same effect.  The CEO managed through fear.  At VW, “subordinates were fearful of contradicting their superiors and were afraid to admit failure.”  A former CEO “was known for publicly dressing down subordinates . . .”  (NYT 12-13-15)

In the U.S., INPO’s singled-minded focus on the unrivaled importance of leadership can, if practiced by the wrong kind of people, lead to a suppression of dissent, facts that contradict the party line and the questioning attitude that is vital to maintain safe facilities.

Companies Not Responsible to All Legitimate Stakeholders

In the Fukushima plant design, TEPCO gave short shrift to local communities, their citizens, governments and first responders, ultimately exposing them to profound hazards.  TEPCO’s behavior also impacted the international nuclear power community, where any significant incident at one operator is a problem for them all.

Volkswagen’s isolation from public responsibilities is facilitated by its structure.  Only 12% of the company is held by independent shareholders.  Like other large German companies, the labor unions hold half the seats on VW’s board.  Two more seats are held by the regional government (a minority owner) which in practice cannot vote against labor. So the union effectively controls the board. (NYT 12-13-15)

We have long complained about the obsessive secrecy practiced by the U.S. nuclear industry, particularly in its relations with its self-regulator, INPO.  It is not a recipe for building trust and confidence with the public, an affected and legitimate stakeholder.

Our Perspective

The TEPCO safety culture (SC) was unacceptably weak.  And its management culture simply ignored inconvenient facts.

Volkswagen’s culture has valued technical competence and ambition, and apparently has lower regard for regulations (esp. foreign, i.e., U.S. ones) and other rules of the game.

We are not saying the gross problems of either company infect the U.S. nuclear industry.  But the potential is there.  The industry has experienced events that suggest the presence of human, technical and systemic shortcomings.  For a general illustration of inadequate management effectiveness, look at Entergy’s series of SC problems.  For a specific case, remember Davis-Besse, where favoring production over safety took the plant to the brink of a significant failure.  Caveat nuclear.


*  See, for example: J. Ewing and G. Bowley, “The Engineering of Volkswagen’s Aggressive Ambition,” New York Times (Dec. 13, 2015).  J. Ewing, “Volkswagen Terms One Emissions Problem Smaller Than Expected,” New York Times (Dec. 9, 2015).

1 comment:

  1. Common lackings involve competence, integrity, compliance, and transparency on both sides of the interfaces.

    ReplyDelete

Thanks for your comment. We read them all. We'd like to display them under their respective posts on our main page but that's not how Blogger works.