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Gov't decides against increasing compensation fund for nuclear disaster

This screenshot shows the website of the Japan Atomic Energy Commission, providing information on the Aug. 6 expert panel meeting in which the government announced its position not to raise the amount of compensation funds for nuclear power plant accidents.

TOKYO -- The government announced on Aug. 6 that it will not raise the amount of financial reserves it partially covers under a system requiring power utilities to pay for damage caused by nuclear power plant incidents.

The announcement came after the government failed to reach a compromise with power companies and insurers about ways to raise the amount utilities must prepare, which now stands at a maximum 120 billion yen per plant.

The subject had been discussed by a panel of experts at the Japan Atomic Energy Commission (JAEC) under the Cabinet Office, because radiation leaks from the March 2011 triple meltdown at Tokyo Electric Power Co. (TEPCO)'s Fukushima No. 1 Nuclear Power Plant caused damage requiring 8.3 trillion yen in compensation. The incident occurred due to cooling system failures triggered by a massive tsunami following the Great East Japan Earthquake that killed at least 15,895 people and left 2,539 missing as of March 2018.

The latest government decision means that financial preparations to provide compensation for nuclear incident damage will remain insufficient. The Ministry of Education, Culture, Sports, Science and Technology, which oversees the implementation of the Act on Compensation for Nuclear Damage, will submit to the Diet a revision to the law with the compensation scheme essentially unchanged as the contract for the government compensation program will expire at the end of 2019.

The ministry explained its decision to leave the amount of compensation reserves unchanged during a JAEC panel meeting on July 6. The panel finalized a draft report on the subject saying "continued careful discussion is necessary."

Under the current law, power utilities must pay for damage caused by a nuclear incident without limit. The compensation reserves are prepared through private insurance and government coverage.

However, the 2011 nuclear power plant incident caused massive damage far exceeding the prepared amount. As a result, the government introduced a stopgap scheme in which the difference between the utility's reserves and the actual compensation amount would tentatively be shouldered by the Nuclear Damage Compensation and Decommissioning Facilitation Corporation, and be paid back by with the cooperation of major power companies.

The JAEC panel started discussions on the compensation scheme in May 2015, and panel members agreed that the current reserves were too low and that a raise was necessary.

However, raising the amount means that power utilities have to pay higher insurance premiums and other compensation-related costs, which would lead to electricity price hikes. Utilities asked the government to offer financial support for increasing the reserves, but the education ministry and other government agencies were unenthusiastic about the idea as they were concerned about a backlash from the public. Moreover, private insurers have said they do not have the capacity to accept more nuclear incident insurance.

The expert panel's draft report said the limitless compensation principle should be maintained, and the difference between the reserve and the actual amount should be covered under the scheme developed after the 2011 accident. The panel will issue a final report as early as October after seeking the public's input.

(Japanese original by Ei Okada, Science & Environment News Department)

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