JAPAN | Nuclear redress law vague about responsibility for Fukushima crisis

Posted on August 1, 2011

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JAPAN | MAINICHI | 1 August 2011

Tokyo Electric Power Co. headquarters in Tokyo's Chiyoda Ward. (Mainichi)

The ruling Democratic Party of Japan (DPJ) has drawn up a plan to revise the existing law on nuclear damage compensation following the outbreak of the crisis at the Fukushima No. 1 Nuclear Power Plant, according to sources with knowledge of the draft bill.

Unlike the current law, which is vague about the state’s responsibility, the draft bill clarifies the state’s accountability to fully compensate victims of the nuclear disaster.

The government of Prime Minister Naoto Kan, who is also DPJ president, has rejected the proposal, saying the primary responsibility should rest with plant operator Tokyo Electric Power Co. (TEPCO).

But both ruling and opposition parties have agreed on revising the 50-year-old law and the next government is expected to use the DPJ draft bill as a basis for future debate on the law’s revision.

The current law, established in 1961, has loopholes due in part to the long-held myth that a nuclear catastrophe such as the one that befell the Fukushima plant would never happen.

“Do you know if we absolve TEPCO from its responsibility, there will be no one to pay compensation?” Vice Finance Minister Eijiro Katsu told top executives of major banks in May.

The current law in principle holds electric power firms responsible for nuclear accident compensation but has a waiver clause clearing them of such responsibility in case “the damage is caused by an extraordinarily grave natural disaster.”

Villagers clean the kitchen of their home during a brief visit - their first since the March 11 earthquake and tsunami - to their house located near the Fukushima Dai-ichi nuclear power plant, in Kawauchi, Fukushima prefecture, northern Japan, Tuesday, May 10, 2011. (Pool Photo)

Villagers clean the kitchen of their home during a brief visit – their first since the March 11 earthquake and tsunami – to their house located near the Fukushima Dai-ichi nuclear power plant, in Kawauchi, Fukushima prefecture, northern Japan, Tuesday, May 10, 2011. (Pool Photo)

But that definition is far from clear and the waiver clause makes no mention of the state’s responsibility.

If nuclear power plant operators are held responsible, compensation claims will be astronomical and plant operators are certain to go under.

The present law also says the state will extend necessary support but its redress responsibility is not clear. Under the law, relieving utilities from liability or bankruptcy means there is no primary party to be liable for the damage and payments to victims will stall.

The question is whether the March 11 Great East Japan Earthquake and tsunami which left more than 20,000 people dead or missing could be described as “an extraordinarily grave natural disaster,” as defined by the present law.

Banks and other financial institutions that provide financing to TEPCO had initially insisted on absolving TEPCO from responsibility.

But in response to Vice Finance Minister Katsu’s remarks on the state’s possible greater financial burden due to a TEPCO waiver, the bank executives warmed to the idea that the government should give top priority to compensation for Fukushima nuclear crisis victims in light of the “defective law.”

During a meeting of Cabinet members concerned on May 6, they were handed documents that stated in part that the government should be aware of the absence of a primary party to pay redress if TEPCO were exempted from obligation. The ministers then started talks on the government’s compensation scheme against TEPCO on the premise of keeping TEPCO afloat.

The DPJ draft bill calls for redefining “an extraordinarily grave natural disaster” as “an earthquake and tsunami which will surpass the Great Kanto Earthquake (in 1923) and the Great East Japan Earthquake.” It also says the state will compensate if a nuclear power plant operator is not held responsible.

While the current law says only the state will offer necessary aid in case of an accident caused by something other than a natural disaster, the DPJ draft bill imposes a cap on compensation by a utility and mentions the state’s duty to cover cost overruns.

In this March 15, 2011 photo released by Tokyo Electric Power Co., smoke rises from the badly damaged Unit 3 reactor, left, next to the Unit 4 reactor covered by an outer wall at the Fukushima No. 1 nuclear complex in Okuma, northeastern Japan. (AP Photo/Tokyo Electric Power Co.)

In this March 15, 2011 photo released by Tokyo Electric Power Co., smoke rises from the badly damaged Unit 3 reactor, left, next to the Unit 4 reactor covered by an outer wall at the Fukushima No. 1 nuclear complex in Okuma, northeastern Japan. (AP Photo/Tokyo Electric Power Co.)

The draft bill was prepared by House of Representatives member Shuji Kira, former parliamentary vice foreign minister, and other DPJ lawmakers. They stressed the need for a revision of the current law on nuclear damage compensation, telling the party’s project team dealing with the effects of the Fukushima nuclear crisis and the prime minister’s office that politicians have long been negligent in plugging the loopholes.

The Kan government was initially slow in responding to their calls with Chief Cabinet Secretary Yukio Edano arguing TEPCO was primarily responsible for the nuclear disaster.

But during talks on working out details of legislation to set up a support entity for nuclear accident compensation, the loopholes in the existing law became a focal point.

Prime Minister Kan admitted those loopholes and the DPJ, the largest opposition Liberal Democratic Party and New Komeito party agreed to revise the law in July.

On June 10, a lawyer and TEPCO stockholder filed a lawsuit against the state, demanding 1.5 million yen in damage due to what he says is the government’s failure to apply the waiver clause to TEPCO and the resultant drop in the price of TEPCO shares.

The trial opened Aug. 1 at the Tokyo District Court. Some government officials say similar lawsuits will be filed.

“Under the existing law, we had no choice but to hold TEPCO primarily responsible. We just have to let TEPCO live without killing it,” a high-ranking government official said.

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