Japan’s Parliament passed a law on Wednesday that will allow the use of public funds to shore up the company operating the crippled Fukushima Daiichi nuclear plant, and help it pay what is expected to amount to billions of dollars in compensation claims.
The law creates a state-backed fund that will pay damages to victims of the disaster at the plant, where three reactors melted down and spewed radiation after cooling systems were lost in the March tsunami. The government will initially pay 2 trillion yen, or nearly $26 billion, into the fund, Banri Kaieda, the trade minister, told lawmakers on Tuesday.
Swift compensation payments are vital not only in helping victims, analysts say, but also in helping to kick-start economic growth in the disaster zone. But the sheer size of payments could easily render Tokyo Electric Power, the embattled operator of the plant, insolvent.
Yukio Edano, the chief cabinet secretary, called the law “a major step forward.”
Many uncertainties remain, however. Under the law, shareholders of Tokyo Electric, as well as other electric power companies in Japan, will also be asked to contribute to the fund. But it is unclear how big those contributions will be.
It is also unclear how many people or businesses might be compensated. More than 100,000 people have evacuated from around the plant, and fisheries and farms in the immediate vicinity have been destroyed.
Radiation has also been detected from crops and livestock, including beef from a widening area of the country, prompting the government to impose shipment bans.
Though the government intends to keep Tokyo Electric, known as Tepco, afloat for the time being, Prime Minister Naoto Kan has said that Japan should eventually revisit the fate of the company. Some critics have called for it to be split into separate energy generation and distribution companies. Others have said that Tokyo Electric’s nuclear division should be spun off, and possibly nationalized.
“We should discuss without preconceived ideas,” Mr. Kan said in Parliament earlier this week, “whether Tepco will remain in its current form forever.”
