More on My Take on TEPCO’s Post-Nuclear Disaster Liability

A friend of mine wrote in to tell me that according to a media report, plans are afoot for a 50/50 split between TEPCO and the government for liability stemming from the nuclear disaster under Article 16 of the Act on Compensation for Nuclear Damage. However, he’s looked at the TEPCO website and thinks that it’s still looking to be absolved altogether somewhere down the line under Article 3, paragraph 1 of the Act. The following is my response, lightly edited. I left a couple of embarrassing details visibly edits because I thought it was funny that I’d totally forgotten that I’d blogged it. At least I didn’t imagine it all in the still of the night.

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It’s about time.

I made the argument early on—the SSJ Forum, where predictably no one picked up on it—that TEPCO directors could face shareholder lawsuits if they did not pursue the Article 3.1 route. And if I were a hedge fund holding TEPCO shares, I would be afraid of being sued by my investors if I didn't file that lawsuit against the TEPCO directors. Now, if I were a shareholder of that little old bank in Illinois that had put some of its money in that hedge fund... Remember how those little old banks would hold the entire deal in ransom during the 90s bailout negotiations?

As for the 50/50 split, it's been at least a couple of weeks since Chief Cabinet Secretary Edano said that the government and TEPCO were jointly and severally liable (I think that's essentially what he meant by 真正連帯債務) and maybe a week[couple of days] (ed. HAHA I’d forgotten that I’d blogged it two nights ago) since he mentioned, almost in passing, that it would be a 50/50 split. I was surprised on both occasions when the media failed to take note. It's probably hard for people who don't go to the source to realize that the power utility that everyone loves to vilify is facing strict liability. It would be difficult IMHO to prove negligence, since TEPCO had jumped all the legal hoops up to the Fukushima disaster. Government negligence should be easier to prove, since it was the one who decided not to require more precautions despite some expert opinion to the contrary. With power comes responsibility. But 50/50? I wonder where that came from. Surprising to hear a lawyer—Edano—make that concession before the inevitable negotiations with TEPCO. I wonder if the fix is already in.

All in all, I'd go for Article 3, paragraph 1; it heals you, whereas Article 16 only keeps you alive, and who wants to be on life support for the next 20 years…Oh, Dr. Kerkevorian...

The Japanese Government’s Liability around the Nuclear Disaster: or, Edano Got Game

Chief Cabinet Secretary Yukio Edano has quietly but firmly made it clear that the Japanese government is jointly and severally liable (he apparently invented what appears to be a retronym—真正連帯債務—to emphasize the point) for damages arising from the Fukushima nuclear disaster. Yesterday (? Monday), he went on record as saying that the government and Tepco would be responsible for half each of the (according to the latest estimates) 4 trillion yen tab. When everybody is finding it convenient to dump on Tepco, he’s injecting a little lawyerly reality into the process without being called a Tepco lackey. That’s quite a feat.

Soichiro Tawara Revives Two Year-Old Story about Ichiro Ozawa's Money Issues and Yukio Edano Is Furious

Sunday Project features four policy wonks, Nobuteru Ishihara (LDP), Yukio Edano (DPJ), Yosuke Takagi (New Komeito), and Akira Koike (Japan Communist Party), to sock it out, right after the Plenary sessions, just before the Diet committees begin their work. Other things being equal, Mr. Edano would be running circles around Mr. Ishihara. Unfortunately for the DPJ, Mr. Edano is one of the most anti-Ozawa politicians in Japan, never mind the DPJ, and it shows. He makes it clear that he disagrees with Ichiro Ozawa on the Japanese anti-terror operations in and around Afghanistan, and the most he is willing to do is to explain Mr. Ozawa's position on Japanese presence in Afghanistan. In doing so he splits a legal hair by pointing out that Mr. Ozawa has stated that he wishes to have Japan participate in ISAF operations when he assumes power, but has not said he actually will.

That sounds very much like damning with faint praise. But it was nothing compared to Mr. Edano's act when the talks came around to political financing.

Now Prime Minister Fukuda has been having money issues of his own. His office has had to reacquire and resubmit approximately a hundred receipts that it altered inappropriately, and forced to return political donations from a construction company that relied heavily on public works contracts and a company in which foreigners (in this particular embarrassing case, North Koreans) held a majority stake. However, before it gets interesting, host of the show Soichiro Tawara, the cruelest septuagenarian this side of Uncle Scrooge, whips out a panel, which, together with further explanations, reveals:

When Mr. Ozawa's Liberal Party was dissolved and merged into the DPJ in 2003, the LP donated 1.3 billion yen to the Kaikaku Kokumin Kaigi (Reformatory People's Conference; yes, I know, but it sounds awkward in Japanese too), a political organization over which Mr. Ozawa had substantial control. The money included 0.56 billion yen of the political funds given to the LP under the Political Party Assistance Act. Moreover, just two days before the LP was dissolved, DPJ gave 0.3 billion yen, just like that.

This matter first came out on 2 February 2005, when Katsutoshi Matsuoka (yes, the MAFF Minister who committed suicide as allegations of irregularities and possible criminal acts piled up) raised it in the House of Representatives Budget Committee. The Kaikaku Kokumin Kaigi appears to be doing nothing particular these days, other than to sit on a pile of cash.

Mr. Edano is furious to learn this, because he was the DPJ Policy Research Council Chairman at the time but was not told anything at the time about the 0.3 billion yen gift to the soon-to-be-disbanded Liberal Party. In fact, he appears to be claiming that this is the first time he's heard about the Kaikaku Kokumin Kaigi itself. He says repeatedly that the DPJ has no right to attack the Fukuda administration on political financing issues unless it gives a satisfactory explanation, and vows to get to the bottom of the matter. And it is on that note this particular segment of the program ends. (The JCP, the only party that has elected to decline the public money, makes the more general point that unused public money should be returned to public coffers, but is understandably ignored by the other parties.)

Mr. Ozawa is in many ways old-school LDP, more so, actually, than any of the Tokyo-native, second-, third-, fourth-generation, neotenous contenders in the LDP. And this is, in fact, the second money issue that has been raised against him this year, and the other one also involved a large amount of loose money. The renewed accusations, though there appears to be nothing illegal about them, are strong incentives to make himself even scarcer in the Diet - he has been as elusive as Kim Jong Il during the Plenary sessions – and in the public eye; not exactly the kind of leadership that is conducive to a DPJ that is struggling to distance itself from the LDP without looking irresponsible while papering over significant internal policy differences and personality clashes.

(note) The precise facts and figures cited by Mr. Matsuoka were:
(24 September 2003)
DPJ gives LP 295,540,000 yen.
(26 September 2003; day of the DPJ-LDP merger)
LP gives Kaikaku Kokumin Kaigi 745,899,041 yen.
LP gives Kaikaku Kokumin Kaigi 560,964,143 yen in public funds that it has received under the Political Party Assistance Act.