Academic journal article Washington International Law Journal

Corporate Liability, Government Liability, and the Fukushima Nuclear Disaster

Academic journal article Washington International Law Journal

Corporate Liability, Government Liability, and the Fukushima Nuclear Disaster

Article excerpt

I. Introduction

On March 11, 2011 at 2:46 p.m. JST (5:46 a.m. UTC), a 9.0 magnitude earthquake hit northeastern Japan. The earthquake and resulting tsunami caused the blackout of the Fukushima Dai-ichi Nuclear Power Plant ("Plant"). Without any cooling measures, the Plant experienced hydrogen explosions and a meltdown, releasing radiation into the environment. As a "Major Accident" on the International Nuclear Event Scale, this accident was rated at level seven, the same level as the Chernobyl disaster.1 People living in the vicinity of the plant were evacuated by government order voluntarily. Agriculture, fishing, tourism, and other businesses have been affected substantially by this catastrophic event.

Since then, Tokyo Electric Power Company ("TEPCO"), the operator of the plant, has drawn heavy criticism from around the world. However, is TEPCO the only one to blame? Is it possible the Japanese government, which failed to exercise its regulatory power over TEPCO, or General Electric Company ("GE"), the designer of the Mark I reactor that failed at the Plant, will be held legally liable for this devastating outcome?

This article is divided into four parts. Part II presents a brief overview of the Act on Compensation for Nuclear Damage. Part III provides a description of the compensation scheme for the Fukushima nuclear disaster. Part IV discusses why TEPCO cannot escape from its liability despite the provision in section 3, paragraph 1 of the Act on Compensation for Nuclear Damage. Part V considers the potential liability of the Japanese government and GE.

II. Act on Compensation for Nuclear Damage

A. Purpose

The Act on Compensation for Nuclear Damage2 ("the Compensation Act") was enacted in 1961 with two purposes: 1) "to protect persons suffering from 'nuclear damage,'" and 2) "to contribute to the sound development of the nuclear industry by establishing the basic system regarding compensation in case of nuclear damage caused by reactor operation."3

The term "nuclear damage" means "any damage caused by the effects of the fission process of nuclear fuel, by the radiation from nuclear fuel or material contaminated by nuclear fuel, or by the toxic nature of such materials."4 However, this definition is too ambiguous to set the scope of damage to be compensated. Courts have applied the general principle of "scope of damage" under section 416 of the Civil Code;5 that is, if "effects of the fission process of nuclear fuel, or of the radiation from nuclear fuel etc., or of the toxic nature of such materials" constitute a legally sufficient cause ("sötö ingakanker), victims of any damage caused by such effects may seek compensation from the offending nuclear operator.6 Section 2 contains a provisory clause, "[a]ny damage suffered by the nuclear operator who is liable for such damage is excluded."7

B. Principles of Liability

The Compensation Act provides for strict liability, 8 channeling liability,9 and unlimited liability10 for nuclear operators. Under channeling liability, where reactor operations cause nuclear damage, only the nuclear operator is liable for the damage.11 In other words, no other person is liable for the damage in such case.12 Section 798, paragraph 1 of the Trade Act,13 the Act Relating to the Limitation of the Liability of Shipowners,14 and the Product Liability Act15 do not apply to nuclear damage that is caused as result of reactor operation.16 The court interpreted the Act on Compensation for Nuclear Damage to preclude a claim regarding a failure to perform obligations under contract17 or a tort claim 18 under the Civil Code.19 However, where nuclear damage is caused by the willful act of a third party, the nuclear operator can make a claim for contribution against that third party.20 It should be noted that, in the United States, the liability of nuclear industry is limited under the Price-Anderson Nuclear Industries Indemnity Act ("Price-Anderson Act"). …

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