This seems to be a recurring question: is TEPCO legally liable? The day following the start of problems at TEPCO's Fukushima Daiichi Nuclear Power Plant, I received a phone call from a journalist wanting to know what the financial impact to the company's bottom-line would be. Obviously, one of the major financial question marks relates to the company's liability as it prepares to fend off a likely barrage of commercial and civil lawsuits over the next few years.

I am neither a lawyer nor a legal scholar (so please do not consider this comment legal advice in any way), but having touched on the issue of electric power liability laws in Japan for my forthcoming book on Japan's electric power restructuring in cross-national context, is appears to me that, in terms of strict liability, TEPCO *may* not be liable. Article 3 of the Law on Compensation for Nuclear Damage (Law No. 147, June 17, 1961) that was revised in 2003, clearly states that the company is liable in all nuclear accidents resulting from reactor operations EXCEPT for cases provoked by "grave natural disaster of an exceptional nature or by an insurrection." One could argue, perhaps not unreasonably, that TEPCO is not legally liable for the events of March 11, and everything that follows, as both the earthquake and tsunami disrupted the normal cooling system operations of Fukushimi Daichi. In the language of the law, they were provoked by "grave natural disaster[s] of an exceptional nature."

Of course, if I were desperate to sue and wanted someone to blame, I doubt the law would get in my way. I would probably find a clever team of lawyers who could research a loophole in either the commercial code or the civil code or some other law that allows a plaintiff access to the courts.

I suspect that TEPCO might face the same uphill legal battles that Toyota had to endure with its recalls and alleged mechanical defects last year. How much it will impact the bottom-line defending itself against lawsuits is one of the questions that analysts will be trying to assess as banks, corporate bond holders, and the government do their due diligence on the company's future.

Paul J. Scalise, PhD
Institute of Contemporary Asian Studies
Temple University, Japan Campus
Minato-ku Minami-Azabu 2-8-12 Tokyo 106-0047
Location: www.tuj.ac.jp/maps (English)