Guest Blog – Socio-Legal Issues Arising from Japan’s ‘3-11’ Disasters

In an article published in the Zeitschrift für Japanisches Recht / Journal of Japanese Law [“Die Haftung für Nuklearschäden nach japanischem Atomrecht – Rechtsprobleme der Reaktorkatastrophe von Fukushima I” (Liability for Nuclear Damages pursuant to Japanese Atomic Law – Legal Problems Arising from the Fukushima I Nuclear Accident) (ZJapanR 31, 2011)] Julius Weitzdörfer, Research Associate with the Japan Unit of the Max Planck Institute for Comparative and International Private Law (and JSPS Visiting Researcher at Kyoto University Law Faculty), examines the legal challenges currently facing the Japanese judiciary, government and economy in the aftermath of the nuclear disaster. The article (in German along with an English abstract) can be downloaded here, and shorter summary by the author is reproduced below (from the MPI website).
Luke Nottage (also now at Kyoto University Law Faculty, as a Visiting Scholar over October-November) then adds a broader perspective on the disasters afflicting Japan since 11 March 2011, based on his presentation at Tohoku University in Sendai over 14-15 October.

Guest Blog – New study by Julius Weitzdörfer provides comprehensive overview of liability issues associated with the Fukushima nuclear disaster:
With expected damage claims estimated as high as 90 billion Euros, the nuclear catastrophe in Fukushima represents the largest liability case in Japanese history. Claims for compensation are expected from various categories of victims, including evacuated plant workers and citizens, impacted farmers and fishermen, and representatives of industry and tourism. Notwithstanding the unlimited liability imposed on nuclear operators under Japanese law, lump-sum State payments have been initiated in connection with extra-judicial proceedings. The economic burden thus likely primarily falls upon the treasury but will also impact the financial institutions which are being required by the government to make the necessary financial support available; other energy providers may be required to bear a financial burden as well, with the result that consumers could ultimately face higher energy prices.
The question whether Japan’s most powerful earthquake constitutes an “extraordinary natural disaster” excluding operator liability was subject to considerable debate in the wake of the accident, yet such an exclusion has thus far been rejected in legal and governmental circles. Accordingly, it remains to be clarified what standard of causality is applicable, e.g. in relation to subsequent health consequences, and how to treat lost business profits resulting from mere rumours in regard to radiation levels. Additionally, the question arises whether the Japanese State could be made liable on account of insufficient nuclear energy supervision.
The decision of the Japanese government to provide relief to victims as quickly and unbureaucratically as possible on the basis of central guidelines and through the payment of lump-sum damages is a prime example of institutionalised conflict management demonstrating obvious practical advantages. By contrast, in light of the complexity of the legal problems presented and the number of individual damage claims which can be expected from affected parties – claims which will be raised by lawyers in formal judicial proceedings – the danger of an overburdened Japanese judiciary looms. Simultaneously, the government’s currently pursued strategy for coping with the catastrophe also raises a number of constitutional questions.
The article (in German along with an English abstract) can be downloaded here.
Luke Nottage, “Comparing Disaster Law in Japan: Culture, Politics and Economics”
Attitudes and behaviour in planning earthquakes/tsunami or nuclear power plant accidents, as well as responding to these terrible events on 11 March 2011, highlight familiar issues in Japanese law and society. Some commentators (especially in the mass media) have seen traditional cultural forces as the most important explanation: Japanese people trusted in “social superiors” (government and major firms).
Others prefer a more political explanation, reminiscent of the “elite social management” thesis advanced by Professor Frank Upham (1987) to emphasise especially “bureaucratic informalism” persisting in post-War Japan. Contemporary political explanations relevant to recent events include Tohoku University’s Professor Koichi Hasegawa regarding the comparative difficulties experienced by the anti-nuclear movement in Japan, or the University of California’s Professor Hiroshi Sakurai regarding the psychological warfare waged by the CIA from 1945-55 to persuade Japanese citizens about the safety of nuclear power plants. (See here, in Korean, from a recent international conference in Seoul.) An interesting question within this explanatory paradigm is why the Japanese nuclear energy industry – despite various smaller earlier accidents – did not seem to improve safety self-regulation to the extent found by Professor Joseph Rees (1994) in the US over the 1980s after the Three Mile Island disaster, due to a growing awareness that firms were “Hostages of Each Other”.
But a third view is that Japanese have been acting as economic rationalists. Basically, the Japanese knew that they were taking risks, and have simply endured adverse consequences. (An analogy is those that experience bad luck when gambling – it’s hard for them to complain.) Another economic problem, not unique to Japan and recently highlighted by Harvard University’s Professor Mark Ramseyer, is that limited liability of corporations operating nuclear power plants creates moral hazard and excessive risk-taking. (That is, like a casino, the odds are weighted in favour of one side!)
My presentation will ask which sorts of explanations seem most compelling to an audience that has experienced the recent disasters at first hand, and/or have probably read much more about related issues than I can ever hope to. I will draw partly on the work on Harvard University Professor Michael Reich (1991) on “Toxic Politics: Responding to Chemical Disasters”. But I am also interested in disaster prevention as well as disaster management. And, more broadly, are there are differences in approaches between natural disasters (like earthquakes, where we can at least often predict where they will occur – but not, when) versus artificial disasters (like accidents in nuclear power plants, not limited to those caused by earthquakes, so more easily avoidable in a physical sense)? I will also briefly raise (related) more normative questions about what regulatory approaches are most effective (efficient and/or legitimate) to address safety issues. In particular, as in the field of consumer product safety or financial services more generally, when should we rely more on markets, private law or public regulation?

Author: Luke Nottage

Prof Luke Nottage (BCA, LLB, PhD VUW, LLM LLD Kyoto) is founding co-director of the Australian Network for Japanese Law (ANJeL), Associate Director (Japan) of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), and Professor of Comparative and Transnational Business Law at Sydney Law School. He specialises in international dispute resolution, foreign investment law, contract and consumer (product safety) law.