Split TEPCO: a "bad" company + a "good" company

November 1, 2013

INTERVIEW/ Shuya Nomura: Avoiding TEPCO's bankruptcy exacerbated Fukushima crisis

http://ajw.asahi.com/article/views/opinion/AJ201311010009

SPECIAL TO THE ASAHI SHIMBUN

The words from Prime Minister Shinzo Abe’s mouth were clear: “The situation is under control.”

But radioactive water continues to leak from the Fukushima No. 1 nuclear power plant operated by Tokyo Electric Power Co.

The cleanup has remained in disarray since the accident started to unfold on March 11, 2011, and contaminated water spills have exposed structural problems.

The root cause of the Fukushima mess is the government’s decision to avoid a TEPCO bankruptcy, according to Shuya Nomura, a member of the former National Diet of Japan Fukushima Nuclear Accident Independent Investigation Commission.

When the commission looked into the Fukushima nuclear disaster, Nomura said he saw measures being taken for the radioactive water that could only be described as stopgap.

In an interview with The Asahi Shimbun, Nomura also said bureaucrats should get off their “lazy butts” and stop acting like innocent bystanders.

Excerpts from the interview follow:

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The misery began soon after the nuclear disaster, when the government opted to prevent TEPCO from going bankrupt.

Another idea floated at the time was to allow the utility to go through bankruptcy proceedings and have the government take over the job of cleaning up the site. However, the Finance Ministry, which did not want to throw away taxpayer money, apparently agreed with the opinion that failure to repay the company’s debts to the banks would cause problems, and that the government needed to make sure that TEPCO honored the corporate bonds it had issued.

When TEPCO needed money, the government ended up giving loans to the company in the form of “government compensation bonds.”

Officially, TEPCO took responsibility. But behind the scenes, the government exerted awkward control, like a “helping hands” comedy (in which one performer provides the arms for the performer in front, but without being able to see what is happening).

This, naturally, does not allow for a flexible response to the disaster. Additionally, TEPCO fell into a situation that made it difficult to prioritize the cleanup because the company became worried about how bankruptcy concerns would affect its stock price.

I toured the Fukushima No. 1 nuclear power plant in December 2011. This was when they began adding more tanks for storing contaminated water. Following harsh criticism for dumping the water into the ocean soon after the earthquake without notifying nearby countries, a decision was made to just store it in the tanks.

But it was obvious to anyone who took a look that this would not bring the problem under control. If effective measures had been taken at this time, the crisis would not have grown so grave.

The public sees the problem as stemming from leaving the cleanup to TEPCO, but I don’t think so. That’s because after the disaster, TEPCO was not in a position to make independent decisions.

The public image we see is only TEPCO’s, while the bureaucracy, the helping hands behind the scenes, acts like an innocent bystander. This is the problem.

The government, in an attempt to prevent disorder, makes itself out to be the hero, daringly rescuing us from the radioactive water. But I feel the government should first reconsider the lack of expertise and irresponsible handling by the bureaucracy, which has tolerated TEPCO’s sloppy cleanup.

My greatest fears concern the 350,000 tons of radioactive water stored in the tanks. Even though, as Prime Minister Abe tells us, the effects of contaminated water runoff into the ocean have been blocked off in a contained area, we do not know whether the tanks on land could tip over and cause a massive spill.

What the government should now do is control the radioactive water stored in the tanks and put it through final disposal as soon as possible. Most of the funds the government has set aside will be used to stanch the further release of contaminated water, and there is no outlook for what to do with the water already in storage.

Discussion is fixated on whether to release filtrated water that still contains tritium, a radioactive isotope of hydrogen, into the sea, but no one has even spelled out how to dispose of the highly concentrated waste matter removed in the process.

SPLIT UP AND NATIONALIZE

I was involved in writing off bad debts under the minister in charge of financial affairs during the early 2000s, and I can’t help but recall a lesson I learned during that time. Throwing taxpayer money at a problem in piecemeal fashion has little effect.

Unlike financial reconstruction, we cannot recover the taxpayer money we throw at the contaminated water problem. But now is the time for the political will to get the bureaucrats off their lazy butts. To do this, I think arrangements to bring in outside experts will be important.

The government has created response teams to deal with the contaminated water issues--one led by the Minister of Economy, Trade and Industry and another led by Cabinet ministers--but has left liaising with TEPCO up to the bureaucrats. What the government should do is promptly set up a task force of technical and management experts under the appropriate Cabinet ministers and dispatch it to TEPCO.

The government will have to invest a heavy dose of taxpayer money to take aggressive measures dealing with the radioactive water.

To win over the people’s understanding, there must be another debate over what is to become of TEPCO, but this time without skirting the issue of responsibility for TEPCO shareholders and the financial institutions that lent money to the utility.

I believe the only solution is to split TEPCO into a company for decommissioning and disaster cleanup (a “bad” company) and a company for supplying electricity (a “good” company), force responsibility on banks and other investors by liquidating the former, followed by a complete nationalization, and then hand responsibility for decommissioning and the like to the government.

One more important perspective to consider is the global governance of nuclear power. Due to the risk that the effects of accidents can spill over borders, we need to start thinking right away about nuclear power as part of the collective wisdom of humankind, to be governed by us all.

An example we could learn from is the European Organization for Nuclear Research (CERN), the institute that discovered the Higgs boson and is jointly managed by its member states.

Japan should be proactive in using the world’s knowledge during decommissioning and disaster response, and lead a movement to build a global cooperative framework.

(This article is based on an interview by Tsuyoshi Komano, staff writer.)

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Shuya Nomura, born in 1962, is a professor at the Chuo University Law School and a lawyer. He has served as an adviser to the Financial Supervisory Agency (now the Financial Services Agency) and was a member of the commission that investigated the scandal over missing national pension records.