Possible closing down of facility is now on agenda

If any of the bastions of British industry were found to have "systematic management failures" it would probably lead to a sharp…

If any of the bastions of British industry were found to have "systematic management failures" it would probably lead to a sharp downward trend in their stocks, quickly followed by a management clean-out with tight private industry-type deadlines for a turnaround. Aftershocks sent through the UK economy aside, it would then come down to: shape up or die.

For British Nuclear Fuels to be found to have such shortcomings - as the UK Nuclear Installations Inspectorate (NII) reported last month - is on an entirely different plane and the solution not so straightforward, though the possibility of ending reprocessing is now on the agenda.

Against an error-ridden background, which some contend is inevitable in the nuclear industry, comes the revelation of routine fabrication of quality-control figures. This may trigger major retrenchment of Sellafield's operations and the most significant move towards ending reprocessing so keenly sought by Irish governments. It was an article in the London Independent last September exposing falsification of data surrounding mixed oxide (MOX) fuel bound for Japan that signalled Sellafield's darkest days since the Windscale fire.

All this suggests that a new scenario has emerged, and a loss of the blind faith in Sellafield within the British establishment. It is seen in damning NII reports, which confirmed falsification took place on a much wider scale and for much longer than thought (three years), facilitated by "the treacle (middle) managers". The tone is notable for its brutal frankness and contrasts with stoical defence by others of Britain's "strategic interests" in the past.

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Then the NII chief inspector, Mr Laurence Williams, raised the "closure" word for the first time. He told a House of Commons committee that he would close the plant if the company did not present within two months a detailed action plan to combat management failures. Acute embarrassment was felt in the British government, reflected in the words of the Secretary of State for Trade and Industry, Mr Stephen Byers, who told the same committee: "The events (at Sellafield) show a fundamental flaw in the management at BNFL, and that has to change."

The safety of MOX fuel was never an issue, nor was the Sellafield site found to be unsafe, according to the BNFL communications director, Mr Colin Duncan. On the possibility that MOX falsification may be one crisis too far, he insisted that Sellafield's safety performance was "not bad, could be better", and accepted there had been a loss of confidence in its operation that needed to be restored.

"The solution is not to have something like this happen again," he told The Irish Times. This was being done by bringing in "middle managers" with the best of operating experience from private industry; "those with a first-class safety record" to ensure there is clear accountability and proper controls.

But the crisis has festered. Japan suspended MOX shipments and was followed by Germany (with Switzerland joining their ranks only last week). The NII reports forced the BNFL chief executive, Mr John Taylor, to quit. The Guardian revealed that BNFL pays the Foreign Office £500,000 a year to have its man working inside the British embassy in Tokyo who negotiates on nuclear trade on behalf of the UK government; suggesting a hand-in-glove relationship between the parties. Then the US Energy Secretary, Mr Bill Richardson, uneasy about the company's operations in the US, announced a safety inquiry, which threatens a £1.5 billion privatisation of BNFL.

The fast breeder programme has failed. Now loss of foreign reprocessing contracts will affect the £1.8 billion THORP plant, as it makes the plutonium part of MOX. Options are shrinking fast. Speculation is that reincarnation will come in the form of helping to decommission many of the world's nuclear stations - a role that even the Greens support.

Reprocessing was supposed to be mainly the preserve of nuclear weapons production, as it needed enriched plutonium. It has survived by switching from a military to a civil role; acting as supplier of fuel for more modern nuclear power stations. Yet these have yet to generate competitively priced electricity. Pure economics may have the final say on the fate of this arm of Sellafield's operations.