28 / 386
RISK FACTORS
04
4.5 Operational risks
4.4.3.
OTHER ENVIRONMENTAL RISK
NATURAL DISASTERS PREVALENT IN CERTAIN REGIONS
IN WHICH THE GROUP DOES BUSINESS COULD AFFECT
ITS OPERATIONS AND FINANCIAL POSITION
The location of some of the group’s production sites in areas exposed to natural
disasters, such as earthquakes or flooding, could weaken the group’s production
capacity. Following the Fukushima accident inMarch 2011, stress tests were carried
out or are being completed on nuclear facilities in most of the countries that have
them; the conditions required for their continued operation were set upon the
completion of these tests.
OCCUPATIONAL DISEASES RELATED IN PARTICULAR
TO EXPOSURE TO ASBESTOS OR RADIATION CANNOT BE
RULED OUT
The group believes that it fundamentally complies with legal and regulatory
provisions pertaining to health and safety in every country in which it operates and
considers that it has taken the measures needed to ensure the health and safety
of its own personnel and of subcontractor personnel (see Section 17.
Human
Resources)
. However, the risk of occupational disease cannot be excluded in
principle. Yet the occurrence of disease could result in legal action against the
group or in claims for compensation, either from employees or former employees,
or from buyers of the group’s businesses, in the event that occupational disease
as the result of a previous exposure should arise in employees prior to their transfer
with the business. These actions could result in the payment of damages.
The group had a limited number of reports of occupational disease in France
in 2016.
4.5.
OPERATIONAL RISKS
4.5.1.
RISK OF INTERRUPTION IN THE SUPPLY CHAIN FOR PRODUCTS OR SERVICES
An industrial breakdown, a work stoppage or an interruption of the supply chain
in the group’s manufacturing plants or at a supplier’s location could delay or stop
the flow of the group’s products or services.
This risk is heightened by the fact that the group’s different plants, in any given
business, are highly integrated and interdependent, and that some of the group’s
suppliers could have financial difficulties or might not be able to cope with demand
while complying with the group’s deadlines and quality standards. A potential
breakdown or stoppage of production in a plant or at a supplier’s location, or an
interruption of some shipments could affect all of the group’s operations and cause
an interruption of supplies or services.
Contracts between the group and its customers include a certain number of
warranties that can trigger penalties for delays. These warranties could enter into
play as a result of an industrial breakdown, work stoppage or an interruption of
the supply chain, whether at one of the group’s industrial units or at one of its
supplier’s locations.
Although the group has implemented measures to limit the impact of a potential
breakdown and has covered its exposure through business interruption insurance
for its industrial units, and although it selects its suppliers based on stringent criteria
for quality and financial soundness, it is nonetheless still possible that an industrial
breakdown, a work stoppage or an interruption of the supply chain at the group’s
industrial units or at a supplier’s location could have a significant negative impact
on the group’s financial position and on its ability to respond in optimum manner
to customer demand.
4.5.2.
RISK OF DEFAULT BY SUPPLIERS, SUBCONTRACTORS, PARTNERS AND CUSTOMERS
AREVA’s suppliers, subcontractors and partners could encounter financial
difficulties related to economic conditions and no longer be in a position to perform
contracts entered into with the group.
Depending on the region, the economic situation could have a negative impact
on the group’s suppliers, subcontractors, partners and customers, whether as
concerns their access to sources of funds or their ability to meet their obligations
in the group’s regard.
28
2016 AREVA
REFERENCE DOCUMENT