No Limits for TEPCO’s Liability in Fukushima Crisis, Japan Says

In the past week, Japan’s Prime Minister Naoto Kan and Chief Cabinet Secretary Yukio Edano separately rejected suggestions that Tokyo Electric Power Co. (TEPCO) could be exempt from liability for damages at its crippled Fukushima Daiichi power plant caused by the magnitude 9 quake and 14-meter tsunami wave on March 11.

Kan reportedly told a session of the Lower House Budget Committee on Friday that it was “wrong to think TEPCO is exempt from liability for the damage and that the government alone is liable.” The Asahi newspaper also quoted him as saying that application of a legal provision—which exempts plant operators from liability for damages caused by “grave natural disaster of an exceptional character or by an insurrection”—would essentially mean TEPCO had “immunity from responsibility.”

Kan admitted that the government bore some responsibility for the nuclear crisis. “It goes without saying the primary responsibility lies with Tepco, but the government, which has been promoting nuclear power plants, cannot be exempt from responsibility," the Japan Times quoted him as saying.

Chief Cabinet Secretary Yukio Edano, who has repeatedly said he does not believe the accident at Fukushima qualified TEPCO for a liability exemption, reportedly said on Monday that TEPCO should face full liability, without caps.

"At a Diet session in 1961, a grave natural disaster of an exceptional character was explained as one beyond the imagination of humankind," Reuters quoted Edano as saying to a parliament committee. “The [March 11] earthquake was a very large one, but it was of a scale that had been experienced by humankind in the past.”

TEPCO has begun compensation to residents living near Fukushima Daiichi who were forced to evacuate, in accordance with guidelines announced on April 28. Some estimates say TEPCO could owe as much as 4 trillion yen (US$49 billion). JP Morgan estimated that TEPCO could face 2 trillion yen in compensation costs ($25 billion) while Bank of America-Merrill Lynch suggests costs could balloon to $130 billion if the crisis drags on.

Asahi also reported that the Kan administration may consider establishing a public-private agency to make payment of damages proceed smoothly.

Sources: POWERnews, Asahi, The Japan Times, Reuters, Bloomberg