SA Nuclear Energy Corporation & National Nuclear Regulator Annual Reports 2012

PMG 12 October 2012.

Date of Meeting:

12 Oct 2012

Chairperson:

Mr S Njikelana (ANC)

(Editor’s note: Please let me know if you have trouble accessing the documents above.)
Summary:

The National Nuclear Regulator (NNR) and the South African Nuclear Energy Corporation (NECSA) briefed the Committee on their Annual Reports for 2011/12. NNR assured the Committee that nuclear installations and entities under the oversight of NNR did not expose workers to harmful levels of radiation or cause nuclear damage to the environment in 2012. NNR had successfully fulfilled its fiduciary duties and continued to discharge its mandate in accordance with best practices of governance. After the Fukushima Daiichi accident, safety assessments performed on Koeberg and SAFARI-1 nuclear installations indicated that these facilities would withstand earthquakes and tsunamis. The facilities under its control, and the way in which the nuclear activities were regulated, was outlined. In 2011/12, NNR had granted 27 authorisations and carried out 333 inspections. The situation with special case mines was specifically explained. It had participated in a number of international, regional and national initiatives, including safety awareness campaigns and working with other authorities to move informal settlements situated close to mine dump tailings.

NNR was operating under a new structure, following an organisational restructuring process aimed at improving efficiency and operations. Financial resources had been managed conservatively with a total operating revenue of R125,6 million, a 14% increase on the last financial year. NNR achieved 75,3% of its planned strategic initiatives during 2011/2012. The large depreciation costs were due to the move to new headquarters. Overall, NNR showed an operating surplus of R1,2 million, which was just below 1% of the total budget. It had obtained an unqualified report for the third successive year, although the Auditor-General (AG) had raised issues around asset managements, changes to the financial statements, internal control deficiencies in cash administration, and performance targets that were not time bound. Irregular expenditure of R5.8 million related to the lease at headquarters. These had been addressed. Amendments to the NNR Act were pending. The activities of the Audit and Risk Management Committee were outlined in detail. Members asked if there were sufficient inspectors, enquired about those near the Tudor Shaft Settlement, asked for an update whether residents in Wonderfonteinspruit had epidemiological studies done, and enquired about the Pelindaba incident, and security measures at that site. NECSA was asked to explain the approval for import of ten tonnes of depleted uranium, and its purpose. They asked for further explanations on the monitoring of special case mines.

National Energy Corporation of South Africa (NECSA) then presented its Annual Report for 2011/12, highlighting the reassessment on the SAFARI-1 nuclear reactor, which revealed it was safe, and describing the innovations taken to replace this, in time, with a new SAFARI-2 model. NECSA was regarded as a research rather than a commercial institution. It had recorded 11 new innovation disclosures and 39 peer reviewed publications, NTP (a subsidiary) remained one of the world leaders in the supply of medical isotopes. NECSA was awarded US$ 25 million by the United States Department of Energy for its successful production of Mo-99 using low enriched uranium target plates. Group revenue had gone from R1.61 billion to R1.64 billion although there were a number of pressures in the radioisotope market. Not all the financial key performance indicators were met, although its operational targets were exceeded. The Auditor-General had raised questions about financial sustainability, and it was explained that NECSA had had to make some severe cutbacks, including retrenchment of some non-core staff, and although it had implemented other austerity measures this may not be sustainable in the long term. It had, however, managed to recruit black technical professionals and exceeded its marketing and compliance targets. Its training programmes were fully described. It managed also to use less water and electricity in this year. Although it had an unqualified audit report, there was a matter of emphasis on restatement of corresponding figures, and an issue of fruitless and wasteful expenditure. The Audit and Risk Committee was fully functional, met regularly and was taking steps to address key commitments, including post-retirement liabilities. Finally a feasibility study on the SAFARI-2 was presented. Members asked for clarity on the position of NECSA, given the funding it was receiving for operations, as well as the costs for the SAFARI-2 and what benefits it would offer. The lessons learned from the Japan incident were queried. Members wondered if enough information on waste management was given out. Members asked about potential future joint ventures, and proposed that the Eskom model of skills might offer some lessons…

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