French nuclear watchdog upsets industry with straight talk

* French watchdog ASN disclosed EPR steel weak spots

* ASN's Chevet irks former EDF (Paris: FR0010242511 - news) executives, union

* Reputation of French nuclear industry abroad is key

By Michel Rose

PARIS, June 22 (Reuters) - The head of France's nuclear watchdog has upset the industry by taking an increasingly assertive approach that critics say could jeopardise efforts to win more business overseas.

The tensions at the top of a key French industry bring into focus the role of the ASN, an independent body set up in 2006, whose decisions can cost nuclear companies billions of euros.

The ASN shocked the country's mainly pro-nuclear establishment in April when it disclosed that state-controlled Areva (Paris: FR0011027143 - news) had found weak spots in the steel of its flagship European Pressurised Reactor (EPR) which is being built in Normandy.

ASN head Pierre-Franck Chevet made no attempt to play down the importance of the anomalies in a series of subsequent media interviews, calling them "serious, even very serious."

Chevet's decision to be so vocal about his concerns rather than wait for the outcome of further tests ruffled feathers in an industry which accounts for about 100,000 jobs across France.

Nuclear provides around 75 percent of France's electricity but times are hard after the 2011 Fukushima disaster in Japan prompted concerns about the technology in a number of countries.

Areva has lost money for four consecutive years and is going through a major restructuring, with fellow state-owned EDF (Swiss: EDF.SW - news) poised to buy its nuclear reactor arm.

Chevet's intervention prompted retired EDF executives to write him an unusually blunt letter, calling the ASN's decision to go public on the EPR's problems an "abuse of power".

"Allowing oneself to publicly heap opprobrium on the industrial abilities of a national economic player like Areva based on fragile presumptions at a strategic moment in its history does not seem to be in the remit of ASN," wrote André Pellen, a former member of EDF's national crisis team.

SAFETY REMIT

Although the ASN's sole responsibility is safety, its decisions can have material consequences for Areva and EDF.

The watchdog has the power to halt nuclear installations at any time if it sees a risk and, crucially for the future of EDF, is the only authority which can allow an extension of the lifespan of its nuclear fleet beyond 40 years.

The watchdog's independence marks a change from before 2006 when safety was under control of the industry ministry. Earlier, it was the responsibility of atomic research institute CEA, which created the French nuclear industry and still owns a majority of Areva.

That meant any issues were usually fixed behind close doors.

"What's irritating a bit is the spectacular fashion of his performance," Pellen, the former EDF executive, told Reuters. "It's like these people have no sense of the state's greater good."

The French industry is worried about the damage the EPR's problems could do its image abroad, with export orders such as the 16 billion pound ($25 billion) Hinkley Point project in western England vital to tide it over until France decides whether to renew its ageing nuclear plants.

Industry insiders argue other competitors like Russian or Chinese companies do not face the same level of scrutiny.

"In my view it's overstepping its role; its strategy is causing anxiety and has a major impact, including internationally," a union source who sits on the board of a French energy company said.

ENSURING QUALITY

Chevet said the French industry should see the close supervision as a guarantee of quality.

"I think we have a reputation for being demanding on safety, some can consider this as a disadvantage, I for one consider this as an advantage, even in terms of exports," he said.

Chevet, 53, is no maverick. The civil servant is a product of the French establishment, having graduated from top engineering school Polytechnique. In 1986, the year of the Chernobyl disaster in Ukraine, he joined the industry ministry.

"Seeing the extent of the catastrophe, I thought I could help to avoid a repeat, especially in France," he told L'Usine Nouvelle magazine in 2013.

He rose through the ranks of French administration under conservative and socialist governments and his recent plain speaking has taken some by surprise. In April, he publicly criticised EDF's choice of language after the utility described a leak of 100 cubic meters of water at its Fessenheim nuclear plant as a mere "lack of watertightness".

"He is asserting its true role as an independent authority, and that's bothering some," Green MP Denis Baupin said.

For Yannick Rousselet of Greenpeace France, the increasingly blunt tone is due to the responsibility of supervising a country with 58 nuclear reactors in a post-Fukushima world, rather than to Chevet's personality.

"He does not want to be the guy who wakes up tomorrow having the responsibility to deal with an accident like Fukushima." ($1 = 0.6452 pounds) (Additional reporting by Benjamin Mallet; Editing by Keith Weir)