Japan Inc shrugs off devastating Fukushima report, and totters on

PUBLISHED : Saturday, 14 July, 2012, 12:00am
UPDATED : Saturday, 14 July, 2012, 12:00am

An official report roundly damned Japan Inc last week for collusion in the country's worst nuclear accident, part of the triple whammy of disasters last year that killed 20,000 people. This week, Japan Inc is still in business and under no obvious threat except that of the country's inexorable economic and political decline to third-world status.

The findings shatter the myth of Japan as a modern, efficient industrial democracy and paint a picture of a cosy, corrupt club of old boys running the country for their own benefit. 'The Tepco [Tokyo Electric Power Company] Fukushima nuclear power plant accident was the result of collusion between the government, the regulators and Tepco, and the lack of governance by said parties,' the parliamentary inquiry concluded. Collusion between the unholy trio meant that they had all 'betrayed the nation's right to safety from nuclear accidents'.

Tepco 'manipulated its cosy relationship with regulators to take the teeth out of regulations', the report said after more than 900 hours of hearings and interviews with 1,167 people.

Its chairman, Kiyoshi Kurokawa, a medical doctor and university professor, lamented in his introduction: 'What must be admitted, very painfully, is that this was a disaster 'Made in Japan'. Its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience; our reluctance to question authority; our devotion to 'sticking with the programme'; our groupism; and our insularity.'

Naoto Kan, prime minister at the time, was criticised, basically for running around like a headless chicken, visiting the Fukushima plant and trying to direct the workers, distracting them. Tepco's then president, Masataka Shimizu, was also slammed for his 'inability to clearly report' to the prime minister's office what was going on and provoking Kan's anger.

In any other democracy, parliament would have urgently set aside days to debate its findings: Japan's nuclear future, and the wider implications about the government and governance of Japan would have been top of the agenda; Kan would have been called to account; today's prime minister, Yoshihiko Noda, would have faced detailed questions about his plans to prevent a repeat of the disaster; Tepco and the nuclear watchdogs would have been grilled.

Instead, poor Kan tried to defend himself. Noda has remained silent. There has been no suggestion of a parliamentary debate. Members of parliament are too busy with more important matters such as who is making alliances with whom and the imminence of the next election to bother with trivia such as the future of the nuclear industry or governance of Japan.

Having settled on the scapegoat - Kan - Japan Inc can continue with business as usual.

I say 'poor Kan' because he was not responsible for the long history of collusion between Tepco, the bureaucrats, the nuclear industry and the simpering watchdogs. He would have been pilloried politically if he had not visited the stricken areas; he was being kept in the dark by Tepco and believed, wrongly says Kurokawa's report, that Tepco was planning to abandon Fukushima.

Noda, meanwhile, shows himself to be a man of action. He has masterminded the resumption of nuclear power at the Oi plant. He has rammed through lower house legislation to double the consumption tax by 2014 to get to grips with Japan's public debts.

Alice in her journey through the looking glass might recognise this world as pervertedly normal, but for Japan it should be profoundly worrying.

Restarting Oi's nuclear reactors was condemned as 'irresponsible' by The Japan Times, which accused the government and the Kansai Electric Power Company of ignoring the lessons from Fukushima and of rushing ahead without a road map for Japan's nuclear future. The Oi plant, which could lie on a fault line, has not been stress-tested for a magnitude 9 earthquake.

One critical blogger claimed that if Noda had been in charge at the time of the Fukushima disaster, there would have been no problem since he would simply have ordered 'full steam ahead'.

Raising the consumption tax might seem a sensible attempt to tackle Japan's indebtedness given that the debts will rise to 250per cent of gross domestic product by 2014. But the risk is that a higher tax will reduce Japan's tax revenues via slower growth or recession and actually increase indebtedness.

Japan is sitting on a potentially devastating economic fault line. Its ludicrously low 10-year government bond yield comes from collusion, with Japan Inc stuffing its banks. It will be different when Japan reaches the tipping point of a current account deficit and has to depend on international markets - which could come as soon as 2016, or earlier as the rising yen pushes Japanese manufacturing abroad.

Japan may soon come to regret that action man Noda did not think more before leaping into the arms of the cosy collusion of Japan Inc.

Kevin Rafferty is author of Inside Japan's Power Houses, a study of Japan Inc and internationalisation