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RISK FACTORS
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4.4 Industrial and environmental risks
4.3.3.4.
CFMM
A petition for arbitration was submitted to the International Chamber of Commerce
on July 28, 2014 against the CFMM company by a partner, Mr. George Arthur
Forrest, in which the petitioner challenges the decision of the General Meeting of
Shareholders of June 24, 2013 to liquidate the ArevExplo RCA company. CFMM
has submitted counterclaims in response to this petition. An arbitration court has
been designated and the proceeding is expected to end with a decision in 2017.
4.3.3.5.
PALUEL 2
On March 31, 2016, a steam generator fell during handling in reactor building 2 of
the Paluel nuclear power station.
ASN conducted an inspection concerning this event on April 7, 2016.
In addition, a court-ordered appraisal was initiated by EDF after this event to
determine its circumstances and the potential liability of the members of the
consortium in charge of steam generator handling, consisting of AREVA NP and
three other companies.
4.3.3.6.
BIOENERGY OPERATIONS
In February 2016, the group made the decision to withdraw from bioenergy
operations in view of AREVA’s non-optimum position in that field and the difficulties
of that operating segment in several projects in which AREVA was present.
The graduation cessation of these operations is in progress but will be fully effective
only after AREVA has fulfilled its remaining contractual commitments. These
concern the Green Innovation Project (GIFT) in the Philippines and the Commentry
Bio Energy Project (BEC) in France. Following the announcement of this cessation
of operations, various claims were lodged against the Brazilian entity. The provisions
set aside for commercial disputes and litigation in progress were reassessed, and
adjustments were made at December 31, 2016.
4.3.3.7.
KOEBERG PROJECT
On September 6, 2014, AREVA signed a contract with the South African utility
Eskom to replace the steam generators of the Koeberg nuclear power plant.
This 4.3-billion-rand project (about 300 million euros) called for the design and
manufacturing of six steam generators, their installation in the power plant’s two
reactors, and related engineering services.
On August 27, 2014, Westinghouse submitted a complaint to the South African
courts challenging the call for bids process which led to the award of said contract
to AREVA.
Thrown out by the lower court, Westinghouse’s claims were partially admitted by
the Supreme Court of Appeal which, on December 9, 2015, annulled the decision
awarding the contract to AREVA but declined the request for the substitution of
Westinghouse.
Eskom and AREVA appealed that decision before the Constitutional Court of South
Africa in January 2016.
On December 21, 2016, the Constitutional Court of South Africa rendered
its decision in favor of Eskom and AREVA, finding Westinghouse’s request for
annulment of the call for bids inadmissible.
Concerning the Koeberg project, the reader is invited to peruse the detailed
information given in note 24.
Provisions for losses at completion
of Section 20.2.
Notes to the consolidated financial statements
of this Reference Document.
4.3.3.8.
EMPLOYEE SHAREHOLDING
In November 2015, the group was informed through a handout from the CFE-CGC
labor union that it had “filed an action against person or persons unknown for false
information” with the public prosecutor of Nanterre concerning the circumstances
in which the employee share ownership plan was implemented in the first half
of 2013. Since then, a certain number of employees have allegedly joined the
complaint as individuals.
4.3.3.9.
MISCELLANEOUS INVESTIGATIONS
The company is also aware of the existence of other preliminary investigations
in progress led by the French national financial prosecutor’s office. Since these
investigations are being carried out in connection with legal proceedings against
parties unknown, AREVA is not currently implicated.
4.4.
INDUSTRIAL AND ENVIRONMENTAL RISKS
By nature, the group’s operations carry risk, most notably those performed in
the nuclear facilities listed in 4.3.1.1. and those performed in its other industrial
facilities or during logistics or maintenance operations at its customers’ sites. To
prevent these risks and limit their consequences, the group has adopted risk
management strategies and procedures in line with best practices. If incidents
and accidents were nonetheless to occur, in particular due to security breaches or
acts of malfeasance, the group could face substantial liability or significant operating
cost overruns. In fact, the group’s operations require processes that use various
toxic chemical compounds and radioactive substances. Such events could have
serious consequences, particularly in the event of radioactive contamination and/
or irradiation of the environment, of individuals working for the group or of the
general public, as well as a significant negative impact on the group’s operations
and financial position.
If an accident should affect one of the group’s plants or the transportation of
hazardous and/or radioactive materials, the severity of the accident could be
aggravated by various factors that are not under the group’s control, such as
meteorological conditions, the type of terrain, or the intervention of outside entities.
2016 AREVA
REFERENCE DOCUMENT
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