The Japanese Experience on Compensation of Nuclear Damage
Caused by Fukushima Accident
Toyohiro NOMURA
Emeritus professor at the Gakushuin University
President of Japan Energy Law Institute
Introduction.
As you know very well, on March 11, 2011 a strong earthquake attacked
the north eastern part of Japan. And a huge tsunami followed the earthquake.
At Fukushima Daiich Nuclear Power Plant of Tokyo Electric Power Company(TEPCO), these events led to the loss of electrical power and the shutdown ofcooling systems of reactors which induced a partial melting of core of threereactors and large radioactive releases. This accident resulted in serious
damage to large areas, and the compensation of the damage became an
important social issue.
Today in this report I would like to present you the Japanese legal
system of the compensation of nuclear damage. In particular, I want to focus on
the specific measures that are taken for the smooth and rapid compensation
after the Fukushima accident. It is probable that almost all of you have noexperience of transaction of a large number of disputes on compensation in ashort time. Therefore our experience must be certainly useful for the
improvement of your legal regime of compensation of nuclear damage.
The Fukushima accident has caused considerable damages in the very
wide geographic area. In early April 2011, the Japanese government
established the Dispute Reconciliation Committee for Compensation of Nuclear
Damage (DRC) in accordance with the Act on Compensation for Nuclear
Damage 1961 (the Compensation Act). Since then the Committee has
published several guidelines on the extent of damages which should becompensated.
･”Interim guidelines” (August 5, 2011). This guideline includes two
previous guidelines and shows an overall picture of the nuclear damage
categories which were recognized and which could be broken down into patterns
at that point.
･1st Supplement to the “Interim Guidelines” (December 6, 2011).
This Supplement encompasses the damage concerning voluntary evacuation in
the scope of nuclear damage which should be compensated. The residents
including those who continue to stay in designated area in the guideline arealso eligible for compensation.
･2nd Supplement to the “Interim Guidelines” (March 16, 2012).

-1-Based on the change of evacuation areas, this Supplement reviews the scope ofdamage concerning specified matters (the ordered evacuation, the voluntaryevacuation, the decontamination).
･3rd Supplement to the “Interim Guidelines” (January 31, 2013).
Based on the survey of the market of the agricultural, forestry and fisheryproducts after the “ Interim Guidelines ” , the scope of rumor-damage isbroadened in areas and in categories of items by this Supplement.
･4th Supplement to the “Interim Guidelines” (December 26, 2014).
As regards evacuation areas, the scope of nuclear damage associated with theevacuation orders is reviewed by this supplement in addition to the “Interim
Guidelines” and 2nd Supplement to the “Interim Guidelines”.
These guidelines give the general scope of damage which should becompensated by TEPCO. So since 2015 new guideline is not issued.
The TEPCO, responsible for the accident, makes also his efforts tocompensate victims. But I have to say that the compensation does not work sosmoothly and rapidly as to satisfy victims, in particular at first stage. We cangive some reasons for this slowness of compensation. At least it is clear that the
aforementioned law is considered insufficient to solve an enormous amount ofcompensations demanded by victims within a short period.
Accordingly in this report, we present, at first, the legal system ofcompensation for nuclear damage under the Compensation Act, and then somemeasures taken after the accident.
1. General survey of nuclear liability -- Liability at common law (Civil Code) and thespecial rules for compensation for nuclear damage.
(1) The Civil Code.
Until 2015 Japan was not a member of any international convention on
nuclear liability. So the Japan made a law of compensation as seemed to be thebest in maintaining of the international level of financial security of nuclear
liability.
Concerning the tortious liability, the article 709 of the Civil Codestipulates clearly the principle of liability based on fault. That is to say, one
who inflicts damage to other person with his fault must compensate the damage.
If he does not commit a fault, he is not liable for damage which he caused.
(2) The Act on Compensation for Nuclear Damage (the Nuclear Compensation Act).
On the other hand, in 1961 the Act on Compensation for Nuclear
Damage (the Nuclear Damage Compensation Act) and the Act on Indemnity
Agreements for Compensation on Nuclear Damage (the Indemnity AgreementsAct) were enacted. The nuclear liability system in Japan is based on these two-2-

acts. According to this system the nuclear operator is responsible for nuclear
damage which he caused even if he did not commit a fault. Since then, the basic
structure of these acts remains unchanged. Nevertheless, every about ten years,
the Nuclear Compensation Act was revised mainly to raise the amount offinancial security for compensation. In 2009 this amount was raised to 120
billion yen. It should be noted that the 2009 reform has also added the task ofestablishing a directive on the extent of nuclear damage which should becompensated by the nuclear operator who inflicts damages, taking into accountthe process of compensation made during the JCO accident that happened in
1999.
On January 2015 Japan signed the Convention on Supplementary
Compensation for Nuclear Damage (CSC Convention). For this signing, Japan
made some amendments to Act on Compensation for Nuclear Damage. But
these amendments are not so important, because Japanese Act is already inconformity with international principles concerning nuclear liability.
It has to be noted that this Act applies not only to the operation of
nuclear reactor, but also to the transport of nuclear material (including nuclear
fuel, nuclear waste etc.).
(3) The Civil Code and the Nuclear Compensation Act.
The relation of the Civil Code and the Nuclear Compensation Act seems
to be that of the general law and special law. In this case, the special law isapplicable prior to the general law. And if there is no suitable provision in thespecial law, the general law covers the gap. But in the field of tort, the special
law generally provides a strict liability which is more advantageous to thevictim. So without taking the easy route of the special law, the victim candemand the compensation of suffered damage on proving the hard conditions
required by the Civil Code. Accordingly, regarding the legal basis for liability of
the nuclear operator, at first view not only the law on compensation for nuclear
damage but also the Civil Code applies to nuclear damage. Of course, the Civil
Code provides general rules on tort and the Compensation Act covers only the
nuclear liability. The Nuclear Compensation Act does not expressly excluding
the application of the Civil Code. But the system of Special Compensation Act
implicitly means that the provisions of the Civil Code do not apply at least on
the basis of the liability of the nuclear operator.
We can show two foundations of reasoning. Firstly the responsibility of
persons other than the nuclear operator is excluded by the Nuclear
Compensation Act (Art. 4, paragraph 1). Secondly this special law limits therecourse of the nuclear operator against the third person who is responsible forthe nuclear accident, after he has compensated to accident victims.

-3-But if there are no rules in the Nuclear Compensation Act, the Civil
Code applies. For example, the extent of damages which should be compensatedis determined by the Civil Code. This is the theory of the adequate causality
established by the doctrine and the case law that applies to nuclear damage
caused by a nuclear accident. And the amount of compensation may be reducedby taking into account the victim's fault (art. 722 of the Civil Code). But thisreduction is no more than theory and in the practice of compensation after
Fukushima accident there seems to be no case where the reduction is done
according to the article 722.
In any way at least we can say that no third person other than the
nuclear operator is responsible for the nuclear accident, because the article 4 of
the Nuclear Compensation Act applies and the article 709 of the Civil Code is
excluded. Nevertheless, in some cases the victims demand the compensation of
nuclear damage by proving the fault of TEPCO according to the article 709 of
the Civil Code. The lawyers of the victims want to condemn strongly the fault of
the TEPCO. But the judgment of tribunal is not yet done.
2. The Compensation of Nuclear Damage under the Nuclear Compensation Act.
(1) The liability of the nuclear operator without fault and cause of exemption.
The nuclear operator is liable for any nuclear damage even if hecommits no fault (art. 3 of the Compensation Act1). But in case of "a grave
natural disaster of an exceptional character and social revolt" the responsibilityof the nuclear operator is exempt. Regarding Fukushima accident, we knew thecontroversy on the possibility of this exemption. This exemption provision does
not specify the definite conditions of the major natural disasters of an
exceptional character. But at least in common law of liability, in principle, thefault of the author of the damage (perpetrator) is one of the necessary
conditions for the compensation of damage. So even if the natural disaster is so
grave that the nuclear operator could not foresee it, it is not considered that thenuclear operator is exempted from the liability. After Fukushima accident, theJapanese government took several measures to protect victims based on the
non-application of this exemption.
At all events, it is only the government's interpretation of the exemption
provision. It is quite possible that the judicial court decide freely on this point.
Recently, a stockholder of TEPCO filed a suit demanding damage compensation
1 Where nuclear damage is caused as a result of reactor operation etc. during such operation, thenuclear operator who is engaged in the reactor operation etc. on this occasion shall be liable for thedamage, except in the case where the damage is caused by a grave natural disaster of an exceptional
character or by an insurrection.

-4-

against the government who took some measures for victims on the assumptionthat the exemption clause should not be applied. According to the claim ofplaintiff, the stock price of TEPCO fell down by the non-application ofexemption. Tokyo district court dismissed this claim deciding that the
government did not commit negligence by denying the exemption clause2. This
is not the case on dispute between TEPCO and victim of Fukushima accident.
So I don’t think this judgment is not an appropriate court decision on thismatter.
(2) The unlimited liability.
The liability of the nuclear operator is unlimited. Only the financial
security is limited to 120 billion yen.
(3) The legal channeling.
The nuclear liability is concentrated in the nuclear operator. That is tosay, in case of a nuclear accident, only the nuclear operator is required tocompensate the nuclear damage. Other people are not liable for the nuclear
damage. Only when the nuclear operator has compensated the damage, he isable to have recourse against the person who caused the damage intentionally.
(4) The concept of nuclear damage.
The article 2 of the nuclear Compensation Act defines the nuclear
damage in its paragraph 2: “nuclear damage” means any damage caused by the effectsof the fission process of nuclear fuel, or of the radiation from nuclear fuel etc., or of the
toxic nature of such materials (which means effects that give rise to toxicity or its secondary
effects on the human body by ingesting or inhaling such materials); however, any damage
suffered by the nuclear operator who is liable for such damage pursuant to the following
Section, is excluded.
By reading this legal text it is very difficult, if not impossible, todetermine effectively the nuclear damage to which this Act applies. In fact inthe discussion of DRC, this definition is not in question and we discuss simply ifthere is a relationship of cause and effect, namely a causal relation between the
nuclear accident and the damage in question. In my personal opinion, in the
future, we must clarify the distinction between the nuclear damage that thenuclear operator is liable to compensate and that he is not liable to compensate.
(5) Resolution of disputes of compensation for nuclear damage.
With regard to the claim for compensation for the nuclear damage, there
2 Tokyo District Court, 19 July 2012, Hanreijiho, no 2172, p. 57.

-5-are three different ways.
1. Direct negotiation between the victim and the nuclear operator.
2. Mediation by the Center for Dispute Resolution at the Dispute
Resolution Committee.
3. The court.
There is no priority among these three means. The victim can choose
any of these means which is the most favorable to him. Until now more than
300cases are brought before the judicial court.
(6) The financial security of compensation.
The nuclear operator is required to have a financial security in theamount specified for each category of site or transport by the Nuclear
Compensation Act or by an order issued for each application.
In case of Fukushima Daiichi, this is a site composed of six reactors.
As to the means of the financial security of compensation, the nuclear operator,
one the one hand, concludes a contract of insurance with a group of insurancecompanies (insurance pool), on the other hand, enters into an indemnity
agreement for the compensation of the nuclear damage with the State. The
agreement with the State completes the insurance contract. So when the groupof insurance companies is exempt by the terms of the insurance contract, it is
the State which finances the nuclear operator in accordance with the agreement.
In the case of the Fukushima accident, the group of insurance companies did
not pay the amount of coverage, because the earthquake and tsunami are
grounds for exemption. In place of the insurer, the State has paid 120 billion
yen according to the indemnity agreement.
The Nuclear Compensation Act allows the deposit of money as a meansof guarantee. But before the Fukushima accident, the nuclear operator has notpassed this way. After the Fukushima accident, the group of insurancecompanies refused to renew insurance on the Fukushima Daiichi site wherefour of six reactors were injured. So the company TEPCO has obliged to deposit
120 billion yen of money.
Until now, the damaged reactor is not considered in the abovementioned system of financial security. So we need to create a new way offinancial security for the damaged reactor until the abolition of the reactor. For
example, it is possible that the initial financial security covers any damage even
if they are caused after the accident. It is also conceivable that the State would
be obliged to renew the guarantee agreement even after the accident.
In Japan the amount of financial security is reduced for the nuclear
activities which risk is not as high as a large nuclear power plant. Therefore insome types of nuclear material, the amount of financial security is 24 billion-6-yen (highly contaminated waste, spent nuclear fuel etc.) or 4 billion yen.
(7) Compulsory measures of government.
When the amount of the liability of the nuclear operator exceeds thevalue of the financial security (120 billion yen), the government must allocate
to the operator such aid as is required for him to compensate the nuclear
damage.
The legal character of this provision is somewhat ambiguous, but the
government says several times in Parliament that the government gives always
the necessary assistance to facilitate compensation by the nuclear operator.
After the Fukushima accident, the government has established a specialorganization to facilitate the compensation of TEPCO. This is an example of theassistance under the Nuclear Compensation Act.
The article 17 of this Act provides the measures which must be taken incase of the irresponsibility of the nuclear operator under the article 3. Thismeasure taken by the government is, in nature, not the compensation ofdamages. Therefore it is quite conceivable that the remedy is limited andsometimes the amount of remedy paid by the government is less than thedamage suffered actually by the victim of the accident.
(8) The Dispute Reconciliation Committee for Compensation of nuclear damage(DRC).
The Dispute Reconciliation Committee for Compensation of nuclear
damage (DRC) is established according to the Nuclear Compensation Act.
(i) The tasks of the DRC.
The DRC takes three tasks.
Firstly, the DRC assume the task to mediate and to reconcile the victim
of a nuclear accident and the nuclear operator, if between them there is any
conflict on the compensation of damages.
Second, the DRC is to work to establish guidelines to determine theextent of damages which should be compensated. This is a new task given by
the reform of 2009 made after the JCO accident.
Third and finally, the DRC takes to task the investigation on the
nuclear damage and the assessment for carrying out two tasks as mentioned
above.
(ii) The organization of the DRC.
The DRC consists of 10 qualified members of different specialties. This
composition is very important for the best function of the committee. After the
Fukushima accident, the Minister of Education and Science has established the-7-committee and nominated its members. I was appointed as a member, specialistof compensation law. After finishing the principal guidelines, on March 2016
some members are replaced and I was retired.
Since its establishment in April 2011, the DRC made distinguishedefforts and issued the guideline in several times.
3. The measures taken after the Fukushima accident which make easy thecompensation of nuclear damage.
(1) The activities of the DRC.
(i) The guidelines on the extent of nuclear damage.
Since the establishment of the Dispute Reconciliation Committee for
Nuclear Damage (DRC), the DRC discussed on the extent of damage whichshould be compensated, and made a series of guidelines on this matter as I havealready mentioned above. The first guideline was published on April 28, 2011,
the second guideline on May 31, 2011 and the supplement to the second
guideline on June 20, 2011. All these guidelines are incorporated into “Interim guidelines” dated August 5, 2011. And regarding to this Interim
guidelines four supplements were issued on December 6, 2011, on March 16,
2012, on January 31, 2013 and on December 26, 2013. We do not enter into thedetails of these guidelines. Because the contents of these guidelines are socomplicated that I cannot explain them in a short time. Therefore we are forced
to show you the basic conception of them. The guidelines give the fundamental
rules on compensation subject to typical damages which many victims suffered.
And we expect that the victims and the company TEPCO may conclude thecontract of compromise by reference to principles laid down by these guidelines.
Of course they can bring about a settlement which is contradictory to the rulesof guidelines(ii) The legal nature of guidelines.
It is difficult to clarify the legal nature of the guideline. In my personal
opinion, the guideline is simply a recommendation to the victims and thenuclear operator. The parties are not legally obliged by the principles laid downby these guidelines. It is also approved that the individual conditions can betaken into account to decide the amount of compensation. In fact there are
already some compromises more favorable to the victim than the guideline. But
the guidelines are actually respected not only by the company TEPCO but also
by the victims as the neutral and independent conception is shown in theseguidelines. Even in cases brought before the court, we think that the guidelines
actually influence the judge. We can say, at least, that the victim can invoke theguidelines to justify his demand.

-8-

For the nuclear operator, liable to compensate nuclear damages, theguidelines are also useful in order to deal many victims fairly and with strict
impartiality.
(2) Nuclear Compensation Facilitation Corporation (The Corporation).
After the Fukushima accident, the government has established a specialorganization to facilitate the compensation of TEPCO. This is an example of theassistance under the Nuclear Compensation Act.
According to the Nuclear Damage Compensation Facilitation Act
enacted on August 10, 2011, the Government has established the Nuclear
Damage Compensation Facilitation Corporation (Corporation) to get ready forhuge compensation payment exceeding the financial security amount in the
future, not only for the purpose of supporting the compensation of Fukushima
accident, but also as a permanent organization.
This Corporation sets the amount of resources necessary for all nuclear
operators. So not only the company TEPCO but also other electric companies
are obliged to pay the amount assigned by the Corporation. In this way, theCorporation gives funds to a nuclear operator who needs financial resources forthe compensation of nuclear damage.
In August 2014 the function of the promotion of decommissioning is
added to the Corporation.
(3) Nuclear Damage Compensation Dispute Resolution Center (ADR Center).
As I explained earlier, it is important initial task of the Dispute
Reconciliation Committee (DRC) to resolve the dispute between the victim andthe nuclear operator through mediation. But the DRC is composed of only 10
members. Therefore it cannot handle all disputes that have come before thecommittee. In case of the accident of JCO in 1999, there were only two casesthat were brought before the committee. All other cases (approximately 6,000
cases) were resolved amicably by the direct negotiation between the victim andthe JCO. However, regarding the Fukushima accident, it was expected that ahuge number of claims would be brought before the DRC. Therefore the Nuclear
Damage Compensation Resolution Center (ADR Center) was established under
the DRC in September 2011.
The ADR Center is composed of 278 councilors, 189 special investigatorsand 153 staffs3. The councilors and investigators are all lawyers. The councilor
works part-time as mediator and the investigator works full-time as researcherof all information necessary for compensation. So the function of special
3 This data is at the end of 2015.

-9-

investigator is a key point for the resolution of a great number of disputes in ashort time.
And the ADR Center opens one office in Tokyo and 5 offices inFukushima. The ADR Center began its activities in September 2011. Since then
18,610 applications are brought to the ADR Center and 15,864 cases wereresolved (85.2%)4. At first the number of resolved cases was far less than those
newly brought. Afterwards every month about 300 to 500 applications werebrought. And about 300 to 600 cases were resolved per month. Therefore, theaccumulated cases were decreasing gradually. But recently, in spite ofdiminution of new cases, resolved cases are also decreased. We can point out
the increase of difficult cases which take a lot of time for resolving.
(4) The Compensation paid by TEPCO5.
According to the home page of TEPCO, TEPCO received 956,000 cases
from Individuals, 1,308,000cases from Individuals (Losses due to voluntaryevacuation) and 427,000 cases from Corporations and Sole proprietors. Totalamounts paid are 6,478.6 billion yen.
(5) Two special acts on statute of limitation for nuclear damage.
As to the limitation of the action on compensation of nuclear damage,there is no article in the Nuclear Compensation Act. Therefore the article 724 of
the Civil Code applies to this matter. "The right to demand compensation fordamage in tort shall be extinguished by the operation of prescription if it is not
exercised by the victim or his/her legal representative within 3 years from thetime when he/she comes to know of the damages and the identity of theperpetrator. The same shall apply when 20 years have elapsed from the time of
the tortious act."
In the case of Fukushima accident the right to demand compensation
will be extinguished on March 2014. It is feared that many victims will lose theright to demand compensation on March 2014. The TEPCO declared that hehas no intention to refuse the compensation by invoking the rules of the Civil
Code. But this statement could not relieve the anxiety of victims.
At first the Act on the interruption of Statute of Limitations for
Settlement Mediation Procedure in the DRC was enacted on May 29, 2013.
According to this act, the application to the ADR Center is considered to besubmission of a lawsuit to the court. The period of prescription stops at the timeof application and if the mediation is not reached, the victim can bring a case to4This data is at the end of 2015.
5 Website of TEPCO on October 2016.

- 10 -

the court within one month even if 3 years after the accident
And the act on Sure and Prompt Compensation and the Special
Exception on the Statute of Limitations for the Damage Caused by Nuclear
Accident in 211 was enacted on November 29, 2013. This act extends simply theperiod of prescription to ten years after recognizing the damage and theperpetrator.
Conclusion.
The Nuclear Damage Compensation Facilitation Act 2011 requires therevision of the Nuclear Compensation Act. In occasion of entering into theConvention on Supplementary Compensation for Nuclear Damage the Nuclear
Compensation Act was slightly revised. And the discussion of the reform of the
Act started on May 2015. Until now the points in question are arranged. We
hope that the direction of reform will be clarified in near future.
Regarding the nuclear damage in large scale the Fukushima accident is
the first experience not only for the Japanese people but also for the people in
the world. Our experience and your observation would find some good ideas torevise the national legal system and international nuclear liability. We would
be very pleased if this report will be useful for this revision in the future.

- 11 -