- - Tuesday, May 3, 2011

TOKYO | The Japanese government and the country’s leading business leaders are locked in a bitter dispute over who will pay the billions of dollars in compensation to the victims of the country’s nuclear disaster.

The government maintains that Tokyo Electric Power Co. (Tepco) should pay for the harm caused by the company’s incapacitated Fukushima Dai-ichi nuclear reactor in northeast Japan.

The power plant was crippled after the March 11 earthquake spawned a tsunami that wiped out wholes cities, killed thousands of people and left tens of thousands homeless.

Japan’s main business federation, Keidanren, argues that taxpayers should pick up the bill for the world’s fourth-largest power company.

Government spokesman Yukio Edano this week insisted there should be no limits on Tepco’s liability.

He said the company should not benefit from a Japanese law that can exempt a corporation from responsibility for an accident caused by “a grave natural disaster of an exceptional character.”

Mr. Edano noted that Japan is on an earthquake fault line and has suffered repeated natural disasters over the centuries.

“At a [parliament] session in 1961, a ‘grave natural disaster of an exceptional character’ was explained as one beyond the imagination of humankind,” he told a parliament committee Monday.

“The earthquake was a very large one, but it was of a scale that had been experienced by humankind in the past.”

Many business analysts in Japan maintain that Tepco is too big to fail because it provides electricity to the greater Tokyo area with an economy larger than Australia’s. Stock prices in Tepco have dropped by more than 70 percent since the disasters.

Keidanren Chairman Hiromasa Yonekura said the state should compensate disaster victims “because this is a really large-scale disaster which cannot be imagined.”

He criticized the Japanese government for trying to shift blame onto Tepco.

“They are getting away from taking any kind of responsibility, avoiding it,” he said during a working visit to Europe this week.

Mr. Yonekura argued that the law requires the government to take responsibility for the compensation.

“Tepco built this plant on the basis of a safety standard that was set by the government, and they have been operating in accordance with Japanese regulations,” he said.

Tepco has started making what it calls “initial” compensation payments to residents and governments near the plant who were forced to evacuate. But it has yet to determine how much it will have to pay in total.

JP Morgan estimated Tepco could face $25 billion in compensation losses this year alone. Bank of America-Merrill Lynch said the bill could reach $130 billion if the crisis drags on.

*This article is based in part on wire service reports.

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