Japanese Government Revising Legislature to Hold TEPCO Responsible for Nuclear Disaster

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).

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.

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.

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

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.

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.

“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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