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Clifford Chance

Clifford Chance


Fukushima: Proposed governmental support for TEPCO for nuclear liabilities

20 June 2011

The Japanese government has reacted to the nuclear accident at the Fukushima Daiichi power plant by unveiling plans for a dedicated organisation to support nuclear power operators with their liabilities.

The government's proposal is in response to a request by the Tokyo Electric Power Company (TEPCO) for help with its compensation liabilities for the accident at the Fukushima Daiichi plant which was damaged in March by an earthquake and tsunami.

The new organisation is to be called the Nuclear Damage Compensation Support Institution. Its principal aim is to help nuclear business operators to avoid becoming insolvent because of their nuclear damage liabilities.

The Institution will be financed by contributions from TEPCO and other nuclear business operators. The government will also back it by providing delivery bonds and guarantees.

The Governmental Assistance Clause of the Nuclear Damage Compensation Law does not specify the type of support the government has to provide nuclear business operators. It merely says that the government "will provide necessary assistance".  The government intends to create the institution as part of its support schemes rather than provide loans and other support directly to the nuclear business operators.

The Japanese Diet has yet to approve the government's proposal to support TEPCO with its liabilities for the nuclear accident at the Fukushima Daiichi nuclear power plant.

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