unable to read shape file with ESRI SHAPE Reader

Does this happen for all shapefiles you try to read or only for a specific one?

If it happens for all files it might mean something is wrong with your installation. I doubt ArcGIS and the background geoprocessing are the cause of it, the regular shapefile reader does not rely on any external components. I would recommend trying to reinstall FME first (maybe upgrade to 2019 if you have the opportunity)

This really happens to all shape files that we try. It works fine on a different environment with the same FME version and architecture.

This is the full error message :

"BADNEWS: Shape Reader: Failed to open dataset 'E:/Shape_Test/S_FIRM_PAN.shp' which is neither an existing file nor directory (shapread.cpp:538)

Shape Reader: Failed to open dataset 'E:/Shape_Test/S_FIRM_PAN.shp' which is neither an existing file nor directory

Read 0 schema features from dataset #1 of 1 (E:/Shape_Test/S_FIRM_PAN.shp)

BADNEWS: Failed to obtain any schemas from reader 'ESRISHAPE' from 1 datasets. This may be due to invalid datasets or format accessibility issues due to licensing, dependencies, or module loading. See logfile for more information (contfile.cpp:850)

Failed to obtain any schemas from reader 'ESRISHAPE' from 1 datasets. This may be due to invalid datasets or format accessibility issues due to licensing, dependencies, or module loading. See logfile for more information"

I'll try to repair the installation

A Shapefile dataset consists of at least three files ( *.shp, *.shx, *.dbf) with the same root name, and missing *.dbf causes the error. Firstly make sure that the source Shapefile dataset has all the required files.