August 3, 2011
A government-sponsored bill on nuclear accident compensation became law on August 3. The Japanese Communist Party voted against the bill because the framework for compensation acquits Tokyo Electric Power Co. (TEPCO) of responsibility for the Fukushima plant nuclear accident and makes the public pay for compensation with their taxes. Let’s take a close look at the law.
Q: What is the mechanism of the framework?
A: The government establishes an entity to facilitate nuclear damage reparation, which uses government funds, and TEPCO will be relieved.
The funds can appear in the following two ways: issue interest-free national bonds up to 2 trillion yen; and give a government guarantee up to 2 trillion yen when the entity procures funds, making 4 trillion yen in total.
Plus, as a result of the strong push by the Liberal Democratic, Democratic, and Komei parties, the third way to using tax revenues for reparation has been incorporated into the law. It is to directly put taxes into the entity. If the grant national bond of 2 trillion yen is not enough, more tax money can be put in. Even a purchase of TEPCO assets is listed. The government the other day decided that TEPCO should be supported any time if need be, on the premise that TEPCO must survive. The law does not call into question how much TEPCO shareholders and major banks should bear the burden and liability.
The law is based on the premise of continued nuclear power generation in the future, by upholding the entity’s goal as ensuring smooth administration in regard to nuclear power plant operations. The need is for the government, taking lessons from having promoted nuclear power generation by spreading the “safety myth” and resulting in the accident, to be determined to withdraw from nuclear power generation and work for this in a set time frame.
Q: Who should be held liable?
A: TEPCO is virtually in default from excessive debts. Usually, a bankrupt company in its due legal procedure is demanded to put up its assets, and the maximum possible burden is demanded to be placed on its shareholders and major banks and other interested parties involved.
The law, however, states that TEPCO is to request cooperation from shareholders and others, without any obligation to make them shoulder burdens.
The law can endlessly throw tax money into the entity through buying up bad debts or other means with the result of forcing the general public to shoulder more burdens.
This is a scheme intended to maintain TEPCO stock listings on the Tokyo Stock Exchange at the expense of taxes paid by the general public and to bail out not only TEPCO but also major banks such as Sumitomo Mitsui Bank, a big shareholder of TEPCO and a big financial lender to TEPCO.
Moreover, the bill’s revision enables the entity to make provisional payments along with regular payments. Thus, TEPCO is relieved of all duties regarding collecting reparation funds and practical payments of compensation, with all the financial burdens shifted onto the state.
Q: Will electricity charges become higher?
A: Any public fund put into TEPCO through the reparation entity should be repaid someday to state coffers. The source of repayment will be from contributions to the entity from TEPCO and other power companies. The utilities will regard this money as a business cost, which will finally be reflected in higher electricity charges imposed on the public.
This means that the victims of the accident have to pay a part of the compensation for themselves.
Prime Minister Kan Naoto in the House of Representatives plenary session on July 8 approved of the cost being added to electricity charges.
Q: How will reparation be funded?
A: TEPCO, the perpetrator of the nuclear reactor accident, should be liable. It is seriously responsible for neglecting to take any effective steps to cope with an emergency situation, although warnings of danger had been made in advance.
The government must urge TEPCO to put up, as much as needed, its inventory of assets, including its enormous internal reserves, land and buildings, to be used for compensating victims.
Major life insurance companies and major banks are major TEPCO shareholders. Three major bank credits alone amount to 2 trillion yen. Why should they walk away paying nothing?
A “community of interest” profiting from nuclear power promotion, made up of such corporations as Toshiba Corporation, Hitachi Ltd., Mitsubishi Heavy Industries, and General Electric (GE), the iron and steel industry, cement companies, general contract construction companies, and trading companies, should also shoulder their due social responsibility.
The electricity industry has some 2.5 trillion yen in reserve funds for spent nuclear fuel recycling, which has been saved up from high electricity charges. In addition, there is another 16 trillion yen also saved from electricity charges as a cost for back-end disposal of nuclear fuel. The power industry as a whole can sufficiently fund compensation payments.
The government responsibility is to get TEPCO and other major shareholders to take responsibility to fully compensate victims and to secure a stable electricity supply.
Q: What is the mechanism of the framework?
A: The government establishes an entity to facilitate nuclear damage reparation, which uses government funds, and TEPCO will be relieved.
The funds can appear in the following two ways: issue interest-free national bonds up to 2 trillion yen; and give a government guarantee up to 2 trillion yen when the entity procures funds, making 4 trillion yen in total.
Plus, as a result of the strong push by the Liberal Democratic, Democratic, and Komei parties, the third way to using tax revenues for reparation has been incorporated into the law. It is to directly put taxes into the entity. If the grant national bond of 2 trillion yen is not enough, more tax money can be put in. Even a purchase of TEPCO assets is listed. The government the other day decided that TEPCO should be supported any time if need be, on the premise that TEPCO must survive. The law does not call into question how much TEPCO shareholders and major banks should bear the burden and liability.
The law is based on the premise of continued nuclear power generation in the future, by upholding the entity’s goal as ensuring smooth administration in regard to nuclear power plant operations. The need is for the government, taking lessons from having promoted nuclear power generation by spreading the “safety myth” and resulting in the accident, to be determined to withdraw from nuclear power generation and work for this in a set time frame.
Q: Who should be held liable?
A: TEPCO is virtually in default from excessive debts. Usually, a bankrupt company in its due legal procedure is demanded to put up its assets, and the maximum possible burden is demanded to be placed on its shareholders and major banks and other interested parties involved.
The law, however, states that TEPCO is to request cooperation from shareholders and others, without any obligation to make them shoulder burdens.
The law can endlessly throw tax money into the entity through buying up bad debts or other means with the result of forcing the general public to shoulder more burdens.
This is a scheme intended to maintain TEPCO stock listings on the Tokyo Stock Exchange at the expense of taxes paid by the general public and to bail out not only TEPCO but also major banks such as Sumitomo Mitsui Bank, a big shareholder of TEPCO and a big financial lender to TEPCO.
Moreover, the bill’s revision enables the entity to make provisional payments along with regular payments. Thus, TEPCO is relieved of all duties regarding collecting reparation funds and practical payments of compensation, with all the financial burdens shifted onto the state.
Q: Will electricity charges become higher?
A: Any public fund put into TEPCO through the reparation entity should be repaid someday to state coffers. The source of repayment will be from contributions to the entity from TEPCO and other power companies. The utilities will regard this money as a business cost, which will finally be reflected in higher electricity charges imposed on the public.
This means that the victims of the accident have to pay a part of the compensation for themselves.
Prime Minister Kan Naoto in the House of Representatives plenary session on July 8 approved of the cost being added to electricity charges.
Q: How will reparation be funded?
A: TEPCO, the perpetrator of the nuclear reactor accident, should be liable. It is seriously responsible for neglecting to take any effective steps to cope with an emergency situation, although warnings of danger had been made in advance.
The government must urge TEPCO to put up, as much as needed, its inventory of assets, including its enormous internal reserves, land and buildings, to be used for compensating victims.
Major life insurance companies and major banks are major TEPCO shareholders. Three major bank credits alone amount to 2 trillion yen. Why should they walk away paying nothing?
A “community of interest” profiting from nuclear power promotion, made up of such corporations as Toshiba Corporation, Hitachi Ltd., Mitsubishi Heavy Industries, and General Electric (GE), the iron and steel industry, cement companies, general contract construction companies, and trading companies, should also shoulder their due social responsibility.
The electricity industry has some 2.5 trillion yen in reserve funds for spent nuclear fuel recycling, which has been saved up from high electricity charges. In addition, there is another 16 trillion yen also saved from electricity charges as a cost for back-end disposal of nuclear fuel. The power industry as a whole can sufficiently fund compensation payments.
The government responsibility is to get TEPCO and other major shareholders to take responsibility to fully compensate victims and to secure a stable electricity supply.
