Japan To Make Citizens Pay Bill For TEPCO’s Nuclear Radioactive Fallout

Japan To Make Citizens Pay Bill For TEPCO’s Nuclear Radioactive Fallout

Crooked Japanese politicians are undertaking steps to let TEPCO off the hook for the measly $1.2 billion in liabilities it faces for the Japan nuclear fallout disaster and will instead make the citizens of Japan pay the bill. If a similar disaster happened in your own country, you’d be paying the bill as well.

It seems to be a recurring theme in modern capitalist society. Greedy corporations bend tax payers over the barrel at every possible corner raking in massive record-breaking profits. Then when the shit hits the fan and it’s time for greedy corporations to take a loss crooked politicians step up and say “Don’t worry about it buddy. I am on your payroll, we’ll make the taxpayer foot the bill”.

Consider the history. For example

  • The US Congress robbed $400 Million from Hurricane Katrina victims to pay for the BP Gulf Oil Spill.
  • The General Motors Bailout
  • The Wall Street Bailout / Financial Crisis of 2008 – numerous banks failed and all stock holders were ripped off of their life savings.
  • Really… the list goes on.

It was this same kind of fraud that caused the Great Depression.

Now Japan is following in the great example set by the US Government.

Japan Considers Temporarily Nationalizing TEPCO

According to Japanese newspaper Yomiuri, authorities in Tokyo are considering a temporarily nationalization of TEPCO, the operator of the troubled nuclear plant.

The Google Translate version of the article is here (via Joe Saluzzi).

The details are a little unclear,a nd it’s clear that this is not a sure thing.

The key thing to bear in mind is that TEPCO has ALWAYS enjoyed the implicit backstop from the government, thanks to pre-existing regulations on nuclear power in Japan. Read the details here.

In Monday trading, TEPCO CDS exploded higher, thanks to the perception that the relationship between the operator and the government were fraying. Read more here.

And look at the Credit Default Swaps

chart of the day, tepco, cds spreads, march 2011

As being discussed on zero hedge

Time To Dump TEPCO CDS: Japan Considering Nationalization Of Most Recent TBTF-Club Entrant

Per Yomiuri, TEPCO may be up for nationalization, precisely as we had predicted, due to the insurmountable amount of accrued liabilities from the Fukushima disaster which would bury a standalone company. And just as we rode the CDS on the way up from 90 to 460, so now is the time to assume there will be no credit risk whatsoever, now that TEPCO is the first ever Japanese non-bank TBTF. Time to bail as central planning is about to branch out.

From Yomiuri:

Liability is expected to cause a huge accident in Fukushima Daiichi Nuclear Power Station, in fact, it has emerged 28 days in a government plan to nationalize the reconstruction was found.

Revealed several government officials. Even if a nuclear accident caused enormous damages, to obtain a majority of the shares of TEPCO and the government to fulfill their liability so that management support.

A government official yesterday, “(for power supply), the temporary nationalization to be privatized to raise capital on the play,” the idea of ??this.

And agricultural products to compensate for shipping companies and can no longer operate in nuclear accident, the government has shown its intention to seek TEPCO pay principle. TEPCO damages are out of view and also a few trillion yen.

Very nice. TEPCO creates what will soon be known as the WORST ENVIRONMENTAL DISASTER EVER and Japanese politicians are already stepping up to the plate to let them off the hook for financial liabilities.

The kicker here is that TEPCO is already limited to only $1.2 Billion in liablities which they are more than able to pay. So why let them off the hook.

Nuclear Liability caps in Japan

Japan has nuclear liability caps much higher than those in Canada. Under the Law on Compensation for Nuclear Damage, plant operator liability is exclusive and absolute, and power plant operators must provide a ‘financial security amount’ of ¥120 billion ($1.2 billion), 16 times the Canadian limit. (This limit was doubled January 1, 2010.) Beyond that, the government provides coverage, and liability is unlimited. However, the deadline for having insurance for this amount does not come until 2019. More details at World Nuclear News.

 

Speaking of liability damages, wherever you live you should look into your countries liability caps. As the Global Advisor reported, Canadian companies would be limited to only $75 million in damage.

Liability cap on Canada’s nuclear plants ‘outdated’

Plant operators would have to pay only $75-million in a nuclear disaster, a figure even the industry thinks is too low

Canadian nuclear plant operators would have to pay no more than $75-million in liability claims if a nuclear disaster like that unfolding in Japan were to occur in Canada.

Nuclear critics say that’s a tiny fraction of the billions in health and damage claims that could result, and even Canada’s nuclear industry thinks it is too low. But a 1970s-era law, still on the books, caps the operators’ civil liability.

If such a disaster where to happen here at home well we would be paying the bill for some greedy corporation nuking our citizens to.

Nuclear Liability caps in Japan

US Framework

It was renewed for 20 years in mid-2005, with strong bipartisan support, and requires individual operators to be responsible for two layers of insurance cover. The first layer is where each nuclear site is required to purchase US$300 million cover from private insurers. The second layer is jointly provided by all US reactor operators. It is funded through retrospective payments if required of up to US$96 million per reactor collected in annual installments of US$15 million (adjusted for inflation). Combined, the total provision comes to over US$10 billion paid for by the utilities. The U.S. Department of Energy (DOE) also provides US$10 billion for its nuclear activities. Beyond this cover and irrespective of fault, U.S. Congress, as insurer of last resort, must decide how compensation is provided in the event of a major accident.

And here are the laws for other countries.

Other countries

In the UK, the Energy Act of 1983 brought legislation into line with earlier revisions to the Paris/Brussels Conventions and set a new limit of liability for particular nuclear installations. In 1994, this limit was increased again to £140 million for each major installation, so that the operator is liable for claims up to this amount and must insure accordingly. The majority of this insurance is provided by a pool of UK insurers comprising 8 insurance companies and 16 Lloyds syndicates. Beyond £140 million, the current Paris/Brussels system applies, with government contribution to SDR 300 million (c. €360 million).

In mainland Europe, individual countries have legislation in line with the international conventions and, where set, cap levels vary. Germany has unlimited operator liability and requires €2.5 billion security which must be provided by the operator for each plant. This security is partly covered by insurance, up to €256 million. Switzerland (which has signed but not yet ratified the international conventions) requires operators to insure up to €700 million.

In Finland, a 2005 Act requires operators to take at least &eur;700 million insurance cover, and operator liability is unlimited beyond the &eur;1.5 billion provided under the Brussels Convention. “Nuclear damage” is as defined in the revised Paris Convention, and includes that from terrorism.

In Canada, the Nuclear Liability Act of 1976 is also in line with the international conventions and establishes the licensee’s absolute and exclusive liability for third-party damage. Suppliers of goods and services are given an absolute discharge of liability. At present a limit of CA$75 million per nuclear power plant is set on the insurance cover required for individual licensees, but this is under review. Cover is provided by a pool of insurers, and claimants need not establish fault on anyone’s part, but must show injury. Beyond the cap level, any further funds would be provided by the government.

Japan is not party to any international liability convention, but its domestic law generally conforms to them. Plant operator liability is exclusive and absolute, and power plant operators must provide financial security of 60 billion yen (US$540 million). Beyond that, the situation is unclear, though liability is unlimited. In relation to the 1999 Tokai-mura fuel plant criticality accident, insurance covered 1 billion yen and the parent company (Sumitomo) paid the balance of 13.5 billion yen.

Russia is not party to any international liability convention, nor does it have any domestic laws on nuclear liability. The country signed but has not ratified the Vienna Convention. It has some “interim” bilateral agreements to cover entities working under safety assistance programs, but the legislative deficit is a deterrent to Western contractors in particular.

Ukraine adopted a domestic liability law in 1995 that it has since revised in order to harmonize with the Vienna Convention, which it joined in 1996. It is also party to the Joint Protocol and has signed the Convention on Supplementary Compensation for Nuclear Damage (CSC). Operator liability is capped at 150 million SDRs (c. €180 million). Special provisions apply to work on the Chernobyl shelter so as to extend coverage outside the Vienna Convention countries.

China is not party to any international liability convention and has only a 1986 interim domestic law on nuclear liability, which corresponds with international conventions except that the liability limit is only about US$36 million.

I find this to be totally appalling and outrageous. Such low liability caps encourage a culture of profit over safety and we see what that got us will the BP Gulf Oil Spill.

TEPCO has a history of engaging in cover up and the such low liability explains it

Japan and TEPCO’s History of Nuclear Accidents and Cover-ups

Bungling, cover-ups define Japanese nuclear power (AP):

Behind Japan’s escalating nuclear crisis sits a scandal-ridden energy industry in a comfy relationship with government regulators often willing to overlook safety lapses.

Leaks of radioactive steam and workers contaminated with radiation are just part of the disturbing catalog of accidents that have occurred over the years and been belatedly reported to the public, if at all.

In one case, workers hand-mixed uranium in stainless steel buckets, instead of processing by machine, so the fuel could be reused, exposing hundreds of workers to radiation. Two later died.

“Everything is a secret,” said Kei Sugaoka, a former nuclear power plant engineer in Japan who now lives in California. “There’s not enough transparency in the industry.”

Sugaoka worked at the same utility that runs the Fukushima Dai-Ichi nuclear plant where workers are racing against time to prevent a full meltdown following Friday’s 9.0 magnitude quake and tsunami.

In 1989 Sugaoka received an order that horrified him: edit out footage showing cracks in plant steam pipes in video being submitted to regulators. Sugaoka alerted his superiors in the Tokyo Electric Power Co., but nothing happened. He decided to go public in 2000. Three Tepco executives lost their jobs.

The legacy of scandals and cover-ups over Japan’s half-century reliance on nuclear power has strained its credibility with the public. That mistrust has been renewed this past week with the crisis at the Fukushima Dai-Ichi plant. No evidence has emerged of officials hiding information in this catastrophe. But the vagueness and scarcity of details offered by the government and Tepco — and news that seems to grow worse each day — are fueling public anger and frustration.

Japan is haunted by memories of past nuclear accidents.

—In 1999, fuel-reprocessing workers were reported to be using stainless steel buckets to hand-mix uranium in flagrant violation of safety standards at the Tokaimura plant. Two workers later died in what was the deadliest accident in the Japanese industry’s history.

— At least 37 workers were exposed to low doses of radiation at a 1997 fire and explosion at a nuclear reprocessing plant operated in Tokaimura, northeast of Tokyo. The operator, Donen, later acknowledged it had initially suppressed information about the fire.

— Hundreds of people were exposed to radiation and thousands evacuated in the more serious 1999 Tokaimura accident involving JCO Co. The government assigned the accident a level 4 rating on the International Nuclear Event Scale ranging from 1 to 7, with 7 being most serious.

— In 2007, a powerful earthquake ripped into Japan’s northwest coast, killing at least eight people and causing malfunctions at the Kashiwazaki Kariwa nuclear power plant, including radioactive water spills, burst pipes and fires. Radiation did not leak from the facility.

Tepco has safety violations that stretch back decades. In 1978, control rods at one Fukushima reactor dislodged but the accident was not reported because utilities were not required to notify the government of such accidents. In 2006, Tepco reported a negligible amount of radioactive steam seeped from the Fukushima plant — and blew beyond the compound.

TEPCO knew “But Didn’t Want To Hear About” the nuclear reactor tsunami risks. In fact a Fukushima nuclear reactor engineer confessed to engaging in a criminal cover up and is quoted as saying “Fukushima has always been a ‘Time Bomb’”.

With such high profits to be made for energy around the world and such little punishment for accidentally murdering a few million people it makes you wonder how many other nuclear power plants around the world are as safe as we believe them to be.

Categories: FUKUSHIMA

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