US: Japan should accept liability to receive international help at Fukushima Daiichi

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As reported last week, United States Energy Secretary Ernest Moniz requested that Japan join a treaty called the Convention on Supplementary Compensation for Nuclear Damages.  This treaty collects funds from participating nations to assist with payments for damages resulting from nuclear disasters.

What most mainstream media sources failed to relate, was that the treaty also assigns accident liability to the operators of the nuclear power plant, rather than the vendors which develop the technology or construct the equipment.

To receive help, the United States essentially told Japan that they would have to incur the losses and sign a treaty which would prevent them from seeking compensation from contracted companies, like those which built and constructed the Fukushima Daiichi nuclear power plant, and instead must satisfy itself only with seeking repayment from the operator, Tokyo Electric – who is facing bankruptcy and relies largely upon the Japanese government for funds to prevent a financial meltdown.  In the wording of the treaty, “the operator’s liability for nuclear damage shall be absolute”, and “the right to compensation for nuclear damage may be exercised only against the operator liable.”

Currently, the situation surrounding the utility reminds one of an operation to remove a leg to prevent further damage to the host body.  TEPCO is facing the end of life as they know it, as being forced to cover the full brunt of the Fukushima Daiichi nuclear disaster would put the entire organization into a financial pit they would likely never find a way out of.

Instead, TEPCO is working on new reorganization plans, in order to prevent the more drastic options proposed by the Japanese government, like breaking up the company or the equivalent of a Chapter 11-style bankruptcy.  Sources have told the Reuters that TEPCO may reorganize itself into a holding company, which would separate the electricity generation and transmission businesses from the Fukushima Daiichi cleanup operations.

Seeing as Tokyo Electric will be unable to pay back the money they owe in the near future, this means Japan must accept to largely handle the financial costs themselves, aside from the amount that they would receive from the international funds.

Readers may ask why Japan would accept this deal that obviously appears to be the short end of the stick.  Even if Japan were to attempt to seek compensation from the American companies that designed and constructed the Fukushima Daiichi nuclear power plant, like General Electric, they are not guaranteed to get judgment in their favor.  By signing the treaty, Japan will receive some monetary compensation, and while it will likely be far less then they could seek as damages – it is more certain of a process then the legal system.

Source: Bloomberg

Source: CNBC

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  1. Go after the designer, builders and promoters that convinced TEPCO to build that plant that is so poorly built for the past known natural earth quacks and tsunamis events. Jury will for sure go against them all twelve.

  2. They will add to this a maximum pay out per melt down site that will be low as hell. Surely they will not make it retroactive.

  3. I fail to understand why signing the treaty would absolve Kurion and others from their contractual liability for damages towards TEPCO. The treaty is about liability towards the national and international public, as I understand it.

    I also don’t quite see why or how Japan would receive money from an international fund since the accident occurred before the effectiveness of the treaty. Even if retroactively applied (i.e., toward signing the treaty vs. ratify it), one could argue that any “mishaps” during the water cleaning process would not constitute a separate nuclear event, but are part of the series of events of the original accident.

    Nonetheless, Japan would imho have a huge incentive to signing the treaty and, if necessary, change it’s laws accordingly:

    “No liability shall attach to an operator for nuclear damage caused by a nuclear incident directly due to an act of armed conflict, hostilities, civil war or insurrection.
    Except insofar as the law of the Installation State may provide to the contrary, the operator shall not be liable for nuclear damage caused by a nuclear incident caused directly due to a grave natural disaster of an exceptional character.”

  4. Japan should be investing in Wind and Solar Energy immediately.

    Look at the success Germany is having:

    * On a bad day, Germany is producing the energy-equivalent of 14 nuclear power plants with Solar Energy alone.

    * On a good day, Germany is producing the energy-equivalent of 20 nuclear power plants with Solar Energy alone.

    * On a great day, Germany is producing the energy-equivalent of 40 nuclear power plants with Wind and Solar Energy alone.

    * On a great day, 1/3 of Germany’s energy needs are being covered by Wind and Solar Energy alone.

    And it’s only going to get better from there.

    Even on the worst producing days of Solar and Wind Energy, Germany is proving that nuclear energy is unnecessary.

    As a matter of fact, Wind and Solar Energy are producing so much energy for Germany that energy prices are FALLING in Germany.

  5. High thyroid cancer rates detected in Fukushima children
    November 5, 2013 ABC News
    Before the nuclear meltdowns, health authorities estimated thyroid cancer rates among Fukushima’s children at between one and two cases in every million.
    Since the disaster the Fukushima local government has carried out a large-scale screening program and with about 200,000 children tested, there have been 18 confirmed cases of thyroid cancer and 25 more suspected cases – an unexpectedly high rate.
    And it’s not just the thyroid data that has been kept secret, so too were the initial meetings of the Fukushima panel charged with screening the region’s children.

  6. Seems to be creating a scapegoat to me. Our idea of liability surely needs some serious discussion. While I would like to see international help and feel that this is necessary, the scale of this precludes fault, which is inevitably universally shared. It will not, in any way or form, bring the whole concept of nuclear power into the discussion, just beat the dog one has starved already because it chewed on your shoe.

    So Tepco goes away, the individual decisionmakers walk away, from the government of Japan for allowing the building of the plant on such precarious ground, to those design contractors who may have recognized such but just shrugged their shoulders thinking it’s not their problem. Insulation of such responsibility through corporate entities has to stop when the impact is greater than shareholders.

    I’ve worked in industry which has relations to weapons of one sort or another. I’ve had to ask myself the moral questions about such personal activity in relation to the consequences to my family. The answer, always, was always ‘no’, I would refuse to take part even if it meant some measure of suffering. For instance, I would never work in a plant that manufactured those killing drones. But, then, I don’t separate my spirit from this material reality that’s been created, and attempt to carefully weigh my responsibility even in the actions of others. How can one say, even if it’s in very some small measure, one isn’t responsible for a death with a handgun if one manufactures handguns? Though one may not be party to the decision of how another utilizes one’s product, the fact that you’ve made such a thing dictates its probability, doesn’t it? This might seem extreme, but it recognizes the interconnectiveness that is shared and is apparent to me. By the way, I’m fiercely independent, so it’s not some wacky rationale.

  7. So the nuclear industry wants the people to pay for their mistakes, poor maintenance to increase profits and poor judgments, keeping the profits to them self. We can not allow this.

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