Japan Adopts Nuclear Compensation Framework

Tokyo, May 13 (Jiji Press)--The government made a formal decision Friday on a framework to compensate those affected by the nuclear crisis at Tokyo Electric Power Co.'s <9501> Fukushima No. 1 plant in northeastern Japan.
With no upper limit set on the total amount of compensation, the company is held primarily responsible for damage from the spread of radioactive substances from the plant crippled by the March 11 earthquake and tsunami, the government said.
To ensure compensation payments estimated to total several trillion yen, a special organization will be set up by the government and power utilities including Tokyo Electric Power to put the company effectively under public control.
The compensation will cover evacuees from homes near the plant as well as fishermen, farmers and businesses hit by rumors and concerns about food safety that are associated with the crisis.
Minister of Economy, Trade and Industry Banri Kaieda said at a press conference that the public burden should be minimized, expressing opposition to a proposal for raising electricity rates to secure compensation funds.
The government hopes to adopt special legislation on the establishment of the organization at a cabinet meeting in late May.
Instead of cash, the organization will be provided with 5 trillion yen worth of zero-coupon government bonds that can be cashed at any time. It will provide funds to Tokyo Electric Power by purchasing preferred shares and extending loans.
The company will use 100 billion to 200 billion yen of its profits to pay to the sufferers and the organization by implementing sweeping restructuring measures.
Furthermore, the government will set up an independent committee that includes lawyers and business managers and is tasked with closely watching the management of the power supplier and evaluating its assets.
If the compensation amount exceeds Tokyo Electric Power's capacity, the government will consider additional measures including the use of taxpayers' money to avert the company's bankruptcy and ensure a stable power supply.
The government wants Tokyo Electric Power to continue to supply power stably as a listed firm, Kaieda said.
The framework was to be adopted Thursday, but the government put off the schedule due to opposition from some lawmakers of the ruling Democratic Party of Japan.