Information Notice 2018-11, Kobe Steel Quality Assurance Record Falsification
| ML18190A466 | |
| Person / Time | |
|---|---|
| Issue date: | 09/24/2018 |
| From: | Dan Collins, Mcginty T, Chris Miller NRC/NMSS/DMSST, Division of Construction Inspection and Operational Programs, Division of Inspection and Regional Support |
| To: | |
| Schwab A | |
| References | |
| L-2018-GEN-0004 IN 2018-11 | |
| Download: ML18190A466 (5) | |
UNITED STATES
NUCLEAR REGULATORY COMMISSION
OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS
OFFICE OF NUCLEAR REACTOR REGULATION
OFFICE OF NEW REACTORS
WASHINGTON, DC 20555-0001 September 24, 2018 NRC INFORMATION NOTICE 2018-11: KOBE STEEL QUALITY ASSURANCE RECORD
FALSIFICATION
ADDRESSEES
All holders of an operating license or construction permit for a nuclear power reactor under
Title 10 of the Code of Federal Regulations (10 CFR) Part 50, Domestic Licensing of
Production and Utilization Facilities, except those that have permanently ceased operations
and have certified that fuel has been permanently removed from the reactor vessel.
All holders of an operating license for a nonpower reactor (research reactor, test reactor, or
critical assembly) under 10 CFR Part 50, except those that have permanently ceased
operations.
All holders of and applicants for a power reactor early site permit, combined license, standard
design approval, or manufacturing license under 10 CFR Part 52, Licenses, Certifications, and
Approvals for Nuclear Power Plants. All applicants for a standard design certification, including
such applicants after initial issuance of a design certification rule.
All holders of and applicants for a power reactor operating license under 10 CFR Part 50 that
have exercised their general license for an independent spent fuel storage installation using dry
storage under 10 CFR Part 72, Licensing Requirements for the Independent Storage of Spent
Nuclear Fuel, High-Level Radioactive Waste, and Reactor-Related Greater Than Class C
Waste.
All contractors and vendors that supply basic components, as defined in 10 CFR Part 21, to U.S. Nuclear Regulatory Commission (NRC) licensees under 10 CFR Part 50 or
All holders of and applicants for a fuel cycle facility license under 10 CFR Part 70, Domestic
Licensing of Special Nuclear Material.
All holders of and applicants for a transportation package certificate of compliance under
10 CFR Part 71, Packaging and Transportation of Radioactive Material.
All holders of and applicants for a specific approval for transport of radioactive material shipping
containers under 10 CFR Part 71.
PURPOSE
The NRC is issuing this information notice (IN) to alert addressees to a widespread quality
assurance (QA) record falsification at Kobe Steel Limited (Kobe Steel) that took place over five
decades, from the 1970s until recently.
DESCRIPTION OF CIRCUMSTANCES
According to the corporate profile on its Web site, Kobe Steel is one of Japan's leading
steel-making companies as well as a major supplier of aluminum and copper products. The
Kobe Steel Group comprises numerous consolidated and equity-valued companies in Japan, the Americas, Asia, and Europe. As of March 31, 2018, the group included 212 subsidiaries
and 55 affiliated companies. Kobe Steel held an American Society of Mechanical Engineers
(ASME) Nuclear Material Organization Quality System Certificate but recently allowed it to
expire.
Original Issue
On October 8, 2017, Kobe Steel announced that it had falsified QA data related to the strength
and durability of some aluminum and copper products to appear that they met customer
standards. Later that month, the scope was expanded to include steel powder, steel and
stainless steel wire, and heavy plates, impacting 525 customers. The triggering event was the
detection of a June 2016 quality issue at one of Kobe Steel Groups companies, Shinko Wire
Stainless Company, Ltd. To address this problem, Kobe Steel established an independent
investigation committee on October 26, 2017, as described in the Kobe Steel report, Improper
Conduct in the Kobe Steel Group, dated October 26, 2017, and posted on the companys Web
site.
As a result of the announcement, the NRC staff gathered data on components used in the
U.S. nuclear fleet that Kobe Steel manufactured or for which it supplied materials. The NRC
staff identified dry cask storage materials, containment metallic components, and weld filler
material at construction sites that were supplied by Kobe Steel but determined that they were
not impacted by the falsification activities.
Recent Updates
On May 3, 2018, the NRC staff was contacted by the U.S. Department of Energys Occurrence
Reporting and Processing System with an update to the Kobe Steel QA record falsification issue
with information released in a March 2018 investigation report by the Japanese government.
The new information contained two major points:
(1) The timeline of Kobe Steels misconduct, initially estimated to be less than 10 years, or
dating back to 2007, has been expanded to five decades, or dating back to the 1970s.
(2) The number of impacted Kobe Steel customers is substantially larger than 525.
As a result of this update, the NRC staff further researched the Kobe Steel misconduct issue
and found the following additional information:
- Since the establishment of the independent investigation committee, additional impacted
products (such as compressors and industrial machinery) and services (such as
corrosion analysis and heat treatment) were identified, bringing the number of impacted
customers to 688. * Some Kobe Steel staff falsified inspection data (i.e., as if they met customer
specifications) or fabricated test data for unmeasured products (i.e., as if they were
actually measured).
- According to Kobe Steel, the causes of the misconduct included overemphasis on
profitability, inadequate corporate oversight, and insufficient quality control procedures.
- Kobe Steel has listed preventive measures to deal with the identified causes.
Additional information appears in Kobe Steels latest misconduct report, dated March 6, 2018, posted on the companys Web site.
BACKGROUND
Related NRC Requirements and Policy
NUREG/BR-0500, Rev. 4, Safety Culture Policy Statement, dated May 31, 2018 (Agencywide
Documents Access and Management System (ADAMS) Accession No. ML18137A389), defines
nuclear safety culture as the core values and behaviors resulting from a collective commitment
by leaders and individuals to emphasize safety over competing goals to ensure protection of
people and the environment. The Safety Culture Policy Statement applies to all licensees, certificate holders, permit holders, authorization holders, holders of QA program approvals, vendors and suppliers of safety-related components, and applicants for a license, certificate, permit, authorization, or QA program approval, subject to NRC authority.
The NRC Enforcement Policy (ADAMS Accession No. ML16197A561), Section 2.2.1.d, on
page 9, partly states, Willful violations are of particular concern because the NRCs regulatory
program is based on licensees and their contractors, employees, and agents acting with
integrity and communicating with candor. The Commission cannot tolerate willful violations.
Appendix B, Quality Assurance Criteria for Nuclear Power Plants and Fuel Reprocessing
Plants, to 10 CFR Part 50 establishes QA requirements for the design, manufacture, construction, and operation of safety-related structures, systems, and components.
In 10 CFR Part 21, Reporting of Defects and Noncompliance, and 10 CFR Part 50.55, Conditions of Construction Permits, Early Site Permits, Combined Licenses, and Manufacturing
Licenses, the NRC establishes procedures and requirements for reporting noncompliance
activities associated with basic components that could create a substantial safety hazard.
Related NRC Generic Communications
Information Notice 2013-15, Willful Misconduct/Record Falsification and Nuclear Safety
Culture, dated August 23, 2013 (ADAMS Accession No. ML13142A437), informed addressees
of willful misconduct and record falsification incidents at U.S. nuclear sites and emphasized the
importance of establishing and maintaining an effective safety culture by applicants, licensees, and their contractors.
Information Notice 1995-45, American Power Service Falsification of American Society for
Nondestructive Testing (ASNT) Certificates, dated October 4, 1995 (ADAMS Accession
No. ML031060177, informed addressees of deliberately falsified ASNT certificates given to an
NRC licensee in connection with the procurement of commercial-grade services. Related NRC Inspection Reports
Inspection Report No. 99901395/2017-201, IHI Corporation, dated January 25, 2018 (ADAMS
Accession No. ML18024A739), identified safety-related materials supplied by Kobe Steel to be
used at U.S. nuclear construction sites. However, based on verification work by IHI, the
inspectors concluded the Kobe Steel falsification activities did not impact the materials in
question.
NRC Integrated Inspection Reports 05200027/2017003, 05200028/2017003, Virgil C. Summer
Nuclear Station Units 2 and 3, dated September 14, 2014 (ADAMS Accession
No. ML17257A407), identified a Unit 2 reactor coolant pump casing material that Kobe Steel
supplied. However, the review of the related certified material test report did not yield any
findings. Shortly after this inspection, but for separate reasons, construction of Virgil C.
Summer Nuclear Station, Units 2 and 3, was abandoned.
DISCUSSION
Kobe Steel used to hold an ASME Quality System Certificate, and the NRC staff found
information during inspection activities that, as a third-party supplier, Kobe Steel sold parts for
use in safety-related applications at U.S. nuclear facilities. The misconduct activities by Kobe
Steel did not impact the parts in question. However, because Kobe Steel is typically a third- party supplier and because misconduct activities by some of its employees date to the 1970s, the NRC suggests that addressees review the information contained herein for potential impact
on their nuclear safety-related activities. In addition, it is important for addressees to be vigilant
about similar safety culture issues, particularly as they relate to third-party suppliers.
CONTACT
S
Please direct any questions about this matter to the technical contact listed below.
Daniel S. Collins, Director Christopher G. Miller, Director
Division of Materials Safety, Security Division of Inspector and Regional Support
State, and Tribal Programs Office of Nuclear Reactor Regulation
Office of Nuclear Material Safety
and Safeguards
RA (Terry W. Jackson for)
Timothy J. McGinty, Director
Division of Construction Inspection
and Operational Programs
Office of New Reactors
Technical Contact:
Alfred Issa, NRR
301-415-5342 E-mail: Alfred.Issa@nrc.gov
ML18190A466; *via email EPID No. L-2018-GEN-0004 NRR/DIRS/ NRO/DCIP/ NRO/DCIP/ NRR/DIRS/ NMSS/
OFFICE QTE*
IOEB/TL* QVIB1* QVIB2* IOEB/BC* FCSE/D*
NAME AIssa JDougherty TJackson KKavanagh RElliott JRubenstone (A)
DATE 08/10/18 08/09/18 08/10/18 08/10/18 08/27/18 08/16/18 NRR/DIRS/ NRR/DIRS/ NRR/DIRS/
OFFICE NMSS/DSFM/D* NRO/DCIP/D NMSS/MSST/D
IRGB/PM* IRGB/LA* IRGB/BC*
BPham TMcGinty DCollins (SAtack
NAME MLayton ASchwab ELee
(w/comment) (TJackson for) for)
DATE 08/23/18 09/10/18 09/06/18 09/10/18 09/20/18 09/11/18 OFFICE NRR/DIRS/D
NAME CMiller
DATE 09/24 /18