Japan Press Weekly

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2011 April 13 - 19 [NUCLEAR CRISIS]

Responsibility of TEPCO’s major shareholders in providing compensation

While the government and Tokyo Electric Power Co. (TEPCO) clearly need to compensate for damages caused by the Fukushima nuclear power plant accident, major corporate shareholders of the electric company should also assume the responsibility of providing compensation for damages.

TEPCO has major insurance firms and banks as major shareholders, including Dai-ichi Life Insurance Company, Nippon Life Insurance Company, Sumitomo Mitsui Banking Corporation, and Mizuho Corporate Bank.

Daiichi Life Insurance Chair Morita Tomijiro is involved in the TEPCO management team as its external board member. Morita and TEPCO President Shimizu Masataka are vice chairs of the Japan Business Federation (Nippon Keidanren).

The Act on Compensation for Nuclear Damages requires a nuclear power plant operator (TEPCO in the latest case) to cover the total amount of compensation for damages caused by the plant’s accident.

On the other hand, under the indemnity agreement it concludes with TEPCO, the government is obliged to give TEPCO up to 120 billion yen per plant as a fund to pay compensation from nuclear plant damages caused by earthquakes or tsunamis.

Although TEPCO is responsible for paying the amount of damages exceeding 120 billion yen, the excess money can be also covered by the government with Diet approval.

Even if TEPCO is required to pay for the compensation this time, it can just add the cost to users’ utility rates. Such financial burdens should not be easily pushed off to the public.