Legal Affairs
2012Japan’s Compensation

System for Nuclear Damage
As Related to the TEPCO
Fukushima Daiichi Nuclear Accident

NEA

Legal Affairs

ISBN 978-92-64-99200-9Japan’s Compensation System
for Nuclear Damage
As Related to the TEPCO
Fukushima Daiichi Nuclear Accident© OECD 2012
NEA No. 7089

NUCLEAR ENERGY AGENCY
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENTORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENTThe OECD is a unique forum where the governments of 34 democracies work together to address the
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a setting where governments can compare policy experiences, seek answers to common problems, identify
good practice and work to co-ordinate domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan,
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The opinions expressed and arguments employed herein do not necessarily reflect the official
views of the Organisation or of the governments of its member countries.

NUCLEAR ENERGY AGENCYThe OECD Nuclear Energy Agency (NEA) was established on 1 February 1958. Current NEA membershipconsists of 30 OECD member countries: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark,Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, theNetherlands, Norway, Poland, Portugal, the Republic of Korea, the Slovak Republic, Slovenia, Spain, Sweden,
Switzerland, Turkey, the United Kingdom and the United States. The European Commission also takes partin the work of the Agency.
The mission of the NEA is:–

to assist its member countries in maintaining and further developing, through international
co-operation, the scientific, technological and legal bases required for a safe, environmentallyfriendly and economical use of nuclear energy for peaceful purposes, as well as–

to provide authoritative assessments and to forge common understandings on key issues, as input
to government decisions on nuclear energy policy and to broader OECD policy analyses in areas
such as energy and sustainable development.

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The NEA Data Bank provides nuclear data and computer program services for participating countries. In
these and related tasks, the NEA works in close collaboration with the International Atomic Energy Agency in
Vienna, with which it has a Co-operation Agreement, as well as with other international organisations in the
nuclear field.

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© OECD 2012
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Photo credits: TEPCO, Japan.

FOREWORD

Foreword

The Great East Japan Earthquake struck north eastern Japan on 11 March 2011, some
370 kilometres northeast of Tokyo. The magnitude 9.0 earthquake and ensuing tsunami
caused widespread devastation, the confirmed loss of nearly 16 000 lives with almost
3 000 missing, and disruption of the local infrastructure. The earthquake and tsunami
also triggered the accident at the Fukushima Daiichi nuclear power plant site operated by
the Tokyo Electric Power Company (TEPCO). Damage to the reactor units at the site
resulted in the release of radiation and the Japanese government’s decision to order an
evacuation and to establish restrictions on habitation of the area within 20 kilometres ofthe plant.
Besides ensuring the long-term safety of the Fukushima Daiichi site, a major focus of
the Japanese government has been to ensure the proper and efficient compensation of
the victims of the nuclear accident. In addition to the framework established by theJapanese Act on Compensation for Nuclear Damage (originally enacted in 1961), Japan
has adopted further legislation and guidance and has implemented mechanisms
designed to facilitate the implementation of the compensation scheme. As of late October
2012 approximately JPY 1 333.5 billion has been paid in compensation for damages
attributable to the accident. Although Japan does not presently adhere to one of theinternational nuclear liability conventions, its legislation is compatible with the guiding
principles of the international third party nuclear liability regime, with the particularitythat it is one of the few countries that has opted for the unlimited liability of the operator.
As for the safety and emergency management issues that have arisen following the
TEPCO Fukushima Daiichi accident, the international community is highly interested inJapan’s experience with establishing and implementing its compensation scheme forvictims of the accident. For example, the Nuclear Law Committee of the OECD Nuclear
Energy Agency (NEA) received briefings from the Japanese delegation at its meetings in2011 and 2012 on the structure of the liability and compensation system and the Japaneseexperience with its implementation. Given this interest, the NEA Secretariat in cooperation with the permanent Delegation of Japan to the OECD decided to prepare thisspecial publication.
The purpose of this publication is to gather in one volume the English translations of
the major statutes, ordinances and guidelines issued in Japan for the establishment andimplementation of the compensation scheme in response to the TEPCO Fukushima
Daiichi accident. This publication also includes several commentaries by Japaneseexperts in the field of third party nuclear liability who are currently actively involved in
the implementation of the compensation scheme. Every effort has been made to ensure
the accuracy of the translations; they do not, however, have legal force and only theoriginal Japanese texts are authoritative.
The goal of the NEA in the nuclear law area is to help create sound national andinternational legal regimes required for the peaceful uses of nuclear energy, includinginternational trade in nuclear materials and equipment, to address issues of liability andcompensation for nuclear damage, and to serve as a centre for nuclear law informationand education. This publication should foster that objective and provide insights fornational authorities and legal experts as they reflect on potential improvements in theirnational regimes and in the international framework for nuclear liability.

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ACKNOWLEDGEMENTS AND READER’S NOTE

Acknowledgements

The NEA Secretariat is thankful for the participation of Dr. Toyohiro Nomura, J.S.D.,
Professor, Gakushuin University and member of the Dispute Reconciliation Committee for
Nuclear Damage Compensation; Mr. Shigekazu Matsuura, Director for Nuclear Liability,
Deputy Director of Nuclear Liability Office, Research and Development Bureau, Japanese
Ministry of Education, Culture, Sports, Science and Technology (MEXT); Mr. Yasufumi
Takahashi, Councillor, Nuclear Power Plant Accidents Economic Response Office, Cabinet
Secretariat, Government of Japan; Mr. Chihiro Takenaka, Nuclear Legal Unit Chief, Atomic
Energy Division, Research and Development Bureau, MEXT; and Mr. Taro Hokugo, Project
Researcher, Policy Alternatives Research Institute of the University of Tokyo; whocontributed the commentaries that accompany the legal texts published herein. The NEA isalso grateful for the support of the permanent Delegation of Japan to the OECD in coordinating the compilation of texts and commentaries in this publication. In particular, it
wishes to acknowledge the substantial contribution of Mr. Toshihiko Kamada, formerly
First Secretary (Science and Technology Advisor) at the Japanese Delegation, and his
successor Mr. Hiroyuki Kamai, in assisting the NEA Secretariat in this effort.

Reader’s note

The reader is warned that the texts included in this publication are unofficialtranslations. Only the original Japanese texts of laws and regulations have legal effect,
and translations are to be used solely as reference material to aid in the understanding ofJapanese laws and regulations.
Furthermore, readers should be aware that an “In-house Evacuation Area”, as
determined by instructions of the Japanese government, means an area situated between
20 and 30 km around the TEPCO Fukushima Daiichi and Daini nuclear power plants andwhere people were required to take shelter indoors. For this reason, references to such area
may also be found under the names of “Take Shelter Area” or “Indoor Sheltering Area”,
depending on the translations.
The designation of this area was lifted on 22 April 2011, and was then replaced witheither “Evacuation-Prepared Areas in case of Emergency” or “Deliberate Evacuation Areas”,
as defined hereinafter in the Guidelines.
Similarly, depending on the translations, “Evacuation Recommendation Spots” (which
are specific sites, identified from 30 June 2011 onwards, where a cumulative dose over a
one-year period after the accident exceeds 20 mSv – see Maps 1, 2 and 3, pp. 49-51) may
also be referred to as “Specific Spots recommended for Evacuation”.

4

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TABLE OF CONTENTS

Table of contents

ARTICLESThe Japanese nuclear liability regime in the context of the international nuclear
liability principles by Ximena Vásquez-Maignan .......................................................................9Japan’s nuclear liability system by Toyohiro Nomura, Taro Hokugo, Chihiro Takenaka .......15
The current progress of relief of victims of nuclear damage caused by
the Fukushima Daiichi nuclear power plant accident by Shigekazu Matsuura ..................29
The financial support by the Nuclear Damage Compensation
Facilitation Corporation by Yasufumi Takahashi ....................................................................41
LAWS REGARDING NUCLEAR THIRD PARTY LIABILITY
Act on Compensation for Nuclear Damage ...........................................................................61
Act on Indemnity Agreements for Compensation of Nuclear Damage .............................71
Order for the Execution of the Act on Compensation for Nuclear Damage ......................77
Order for the Execution of the Act on Indemnity Agreements forCompensation of Nuclear Damage .........................................................................................83
GUIDELINES
Preliminary Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the Tokyo Electric Power Company
Fukushima Daiichi and Daini Nuclear Power Plants ............................................................89
Secondary Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the Tokyo Electric Power Company
Fukushima Daiichi and Daini Nuclear Power Plants ..........................................................103
Supplement to Secondary Guidelines on Determination of the Scope of
Nuclear Damage resulting from the Accident at the Tokyo Electric Power
Company Fukushima Daiichi and Daini Nuclear Power Plants ........................................117
Interim Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the Tokyo Electric Power Company
Fukushima Daiichi and Daini Nuclear Power Plants ..........................................................123

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Supplement to Interim Guidelines on Determination of the Scope of
Nuclear Damage resulting from the Accident at the Tokyo Electric Power
Company Fukushima Daiichi and Daini Nuclear Power Plants(concerning Damages related to Voluntary Evacuation, etc.) ...........................................163
Outline of Second Supplement to Interim Guidelines on Determinationof the Scope of Nuclear Damage resulting from the Accident at the Tokyo
Electric Power Company Fukushima Daiichi and Daini Nuclear Power Plants(concerning Damages related to Review of Evacuation Areas by Government
Instructions, etc.) .....................................................................................................................169
Second Supplement to Interim Guidelines on Determination of the Scope of
Nuclear Damage resulting from the Accident at the Tokyo Electric Power
Company Fukushima Daiichi and Daini Nuclear Power Plants(concerning Damages related to Review of Evacuation Areas by Government
Instructions, etc.) .....................................................................................................................173
NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION
Nuclear Damage Compensation Facilitation Corporation Act ..........................................185
Order for Enforcement of the Nuclear Damage Compensation
Facilitation Corporation Act ...................................................................................................205
Ordinance on Organisation of the Nuclear Damage Compensation
Facilitation Corporation ..........................................................................................................213
Ordinance on Operation of the Nuclear Damage Compensation
Facilitation Corporation ..........................................................................................................217
Ordinance on Financial Affairs and Accounting of the Nuclear Damage
Compensation Facilitation Corporation ...............................................................................221
Outline of the Nuclear Damage Compensation Facilitation Corporation Act ................229
Framework of government support to the Tokyo Electric Power Company tocompensate for nuclear damage caused by the accident
at Fukushima Daiichi nuclear power plant..........................................................................233
PROVISIONAL PAYMENT OF NUCLEAR DAMAGE COMPENSATION
Act on Emergency Measures Related to Damage
Caused by the 2011 Nuclear Accident...................................................................................237
Incidental Resolution to the Act on Emergency Measures Related
to Damage Caused by the 2011 Nuclear Accident...............................................................243

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TABLE OF CONTENTS

List of figures, tables and maps
Figure 1: Outline of the Interim Guidelines ...........................................................................55
Figure 2: Progress in provisional/main compensation payments by TEPCO ....................58
Figure 3: Estimated total amount of compensation .............................................................59
Figure 4: Outline of the nuclear damage compensation system in Japan .........................88
Figure 5: Compensation support by Nuclear Damage Compensation
Facilitation Corporation ..........................................................................................................235
Figure 6: Outline of the Act on Emergency Measures Related to Damage
Caused by the 2011 Nuclear Accident...................................................................................244
Table 1: Nuclear power plants worldwide: 435 reactors in operation;
62 under construction ...............................................................................................................52
Table 2: Nuclear power generating states and international
nuclear liability conventions – Status of ratifications (as of November 2012) ..................53
Table 3: Comparative overview of the scale of the greatest earthquakes
and tsunami ...............................................................................................................................54
Map 1: Restricted Areas and areas to which evacuation orders have been issued(from 3 August 2011) .................................................................................................................49
Map 2: Restricted Areas and areas to which evacuation orders have been issued(from 1 April 2012) .....................................................................................................................50
Map 3: Restricted Areas and areas to which evacuation orders have been issued(from 15 April 2012) ...................................................................................................................51

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ARTICLESThe Japanese nuclear liability regime in the context of
the international nuclear liability principles

By Ximena Vásquez-Maignan∗
Even after the accident which occurred on 11 March 2011 at the Fukushima Daiichi
nuclear power plant operated by Tokyo Electric Power Company (“TEPCO”), Japanremains one of the major countries with a nuclear power programme, with
50 operational reactors, exceeded only by the United States (104) and France (58). 1
However, the Japanese net nuclear electricity production (156 182.13 GWh for 2011) only
accounts for an 18.14% share of the total national electricity production.
Japan launched its civilian nuclear power programme in 1960, with the constructionof the Japan Power Demonstration Reactor (JPDR), a boiling water reactor with a design
net capacity of 10 MWe. It ran from March 1963 to March 1976. In parallel, the legal
framework to address the consequences of a nuclear incident at a nuclear facility, or
during the transport, storage and disposal of nuclear fuel or nuclear material, was underdiscussion. In 1961, Japan enacted two laws with the purpose to “protect persons
suffering from nuclear damage and to contribute to the sound development of thenuclear industry by establishing the basis system regarding compensation in case of a
nuclear damage caused by reactor operation” 2: the Act on Compensation for Nuclear
Damage (“Compensation Act”) and the Act on Indemnity Agreements for Compensationof Nuclear Damage (“Indemnity Agreements Act”), which form the basis of the Japanese
nuclear liability regime.
Since the beginning of the development of nuclear power reactors, in the 1950s,
governments realised that ordinary common law was not appropriate to address the risks
involved with this new energy source. Even though no major civil nuclear accident withoffsite consequences occurred until 1986 at Chernobyl, governments were already aware thatin case of a major nuclear accident involving a large scale emission of ionising radiation,
there could be widespread and extremely detrimental effects on human health, public andprivate property, the environment and the economy. Furthermore, the public had in mind
the consequences of the atomic bombings of the cities of Hiroshima and Nagasaki in Japan,
and it was necessary to address fear of the potential impact of an accident in order to foster
public acceptance. A special liability regime was seen therefore important to ensure smooth
and adequate financial compensation to the persons who suffer damage caused by a nuclear
accident, and in general to reconcile the interests of the different stakeholders involved in thedevelopment of nuclear power, such as the operators, the suppliers, the insurers and, most ofall, the public. In the late 1950s and early 1960s, nuclear third party liability andcompensation regimes were adopted at both national (e.g. the United States Price-Anderson
Act which became law on 2 September 1957) and international levels. As regards the latter,

∗

1.
2.

Mrs. Ximena Vásquez-Maignan is a senior legal adviser at the Legal Affairs Section of the OECD
Nuclear Energy Agency. The author alone is responsible for the facts and opinions expressed inthis article.
For an overview of the nuclear power generating States, see Table 1, p. 52 herein.
Compensation Act, Section 1.

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considering that a nuclear accident may cause damage beyond the political or geographicalborders of the State where the nuclear accident occurred, it was necessary to establish treaty
relations between the nuclear power State and its neighbours in order to ensure that victims
in such neighbouring countries would also be efficiently and adequately compensated,
including by facilitating the bringing of actions and the enforcement of judgements relating
to nuclear damage compensation. The international nuclear liability regime is based on thefollowing conventions:•the 1960 Paris Convention on Third Party Liability in the Field of Nuclear Energy(“Paris Convention”)3 in force since 1 April 1968: 16 contracting parties to date;•the 1963 Vienna Convention on Civil Liability for Nuclear Damage (“Vienna
Convention”)4 in force since 12 November 1977: 38 parties and 13 signatories todate; and•the 1997 Convention on Supplementary Compensation for Nuclear Damage(“CSC”)5 (not yet in force): 4 contracting States and 15 signatories to date.

All three conventions establish similar nuclear liability regimes to deal with the risks
associated with nuclear activities. These conventions contain basic principles which areinternationally accepted and usually transposed into national legislations, whether theconcerned State has or not adhered to one of the conventions: Strict liability
The operator of a nuclear installation is strictly liable for damages to third parties
resulting from a nuclear incident occurring at its installation or during the course oftransport of nuclear substance to/from that installation (which means that the operator
is held liable regardless of fault, negligence or intention to harm).

 Exclusive liability (legal channelling)
The operator of a nuclear installation is exclusively liable for damages suffered bythird parties resulting from a nuclear incident occurring at its installation or during thecourse of transport of nuclear substance to/from that installation (i.e. no other person
may be held liable for the damages caused by the nuclear incident as all liability fordamage suffered by third parties are “channelled” directly to such operator).

 Limitation of liability in amount
Unlike ordinary tort law rules where there is no limit to the compensation amounts
payable, the international conventions originally provided for a maximum amount ofliability to be borne by the operator of a nuclear installation. However, several States,
such as Germany, Switzerland and Japan, have adopted unlimited liability; and theinternational nuclear liability conventions provide for a minimum liability amountallowing States to adopt unlimited liability at their option.6

 Compulsory financial security
The operator of a nuclear installation must financially secure its liability in order toensure that, in case of a nuclear incident, funds will actually be available to pay the

3.
4.
5.
6.

10

For more information, see http://www.oecd-nea.org/law/paris-convention.html.
For more information, see www.iaea.org/Publications/Documents/Conventions/liability.html.
For more information, see www.iaea.org/Publications/Documents/Conventions/supcomp.html.
It should be noted that the Paris Convention in its current version provides for a maximum
amount, but that such cap has been deleted by the 2004 Protocol to amend the Paris Convention,
not yet in force (“2004 Protocol”).
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victims’ claims for compensation. In most cases, the security is provided by the private
insurance market, although it may take other forms approved by the State where thenuclear installation is situated.

 Limitation of liability in time
As health related damages caused by the emission of ionising radiation may not beperceptible for a certain time after the nuclear incident occurred, the legal period during
which an action may be brought is a matter of great importance for the victims. With
time, the international nuclear liability conventions have extended such period to thebenefit of the victims of an accident.
The conventions also incorporate two additional principles which are designed toaddress the complexities raised by the transboundary scope of nuclear damage and theinstitution of cross-border compensation claims:

 Jurisdiction
Jurisdiction over nuclear damage claims lies only with the courts of the State inwhose territory the incident has occurred.

 Applicable law and equal treatment
The courts having jurisdiction will apply the relevant convention (if the State has adhered
to one of them) and their own national law or national legislation over claims arising out of a
nuclear incident, and that law or legislation shall apply to all matters both substantive andprocedural, without any discrimination based upon nationality, domicile or residence.
Even though Japan is not a party to any of the international nuclear liability
conventions,7 it has a solid national third party liability legislation of which the mainprinciples may be summarised as follows in the perspective of the TEPCO Fukushima
Daiichi nuclear power plant accident (“the accident”):8•The operator of the Fukushima Daiichi nuclear power plant, TEPCO, is strictly andexclusively liable.

•

TEPCO’s liability is unlimited.

•With regard to the Fukushima Daiichi nuclear power plant, TEPCO is obliged tofinancially secure its liability up to JPY 120 billion with private insurers, and TEPCO
signed with the Japanese government an indemnity agreement by which the latter
agrees to cover those risks which are not insurable with the private sector (such as
earthquakes and tsunamis) up to JPY 120 billion.

•

All rights of action are fully extinguished 20 years following the date of the tort andthe actions must be brought within three years from the date at which the person
suffering damage had knowledge both of the damage and of the person liable.

•

The victims may refer their claims directly to the operator concerned, to a local
court or to the Dispute Reconciliation Committee for Nuclear Damage
Compensation (“Reconciliation Committee”).

Although the accident did not claim any lives, it led to the evacuation of a great
number of people (71 124 were evacuated as of 11 February 2011 according to theJapanese Fire and Disaster Management Agency), the establishment of marine exclusion

7.
8.

For the status of ratification of the nuclear liability conventions by the nuclear power generating
States, see Table 2, p. 53 herein.
For more details, see article on “Japan’s nuclear liability system”, p. 15 herein.

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zones, and the issuance of shipping and planting restrictions; all of which had an
overwhelming impact on the population and the economy. The effectiveness of theJapanese nuclear liability regime was therefore tested in depth.
One can only be impressed by the efficiency with which the Japanese government
tried to address the needs of the victims and the economy.
“Emergency preparedness and response” usually refers to nuclear safety and security
capabilities and arrangements to respond to and mitigate the consequences of an
accident; however, this accident has demonstrated that any State with nuclear
installations needs also to be duly prepared to deal with the legal consequences of a
nuclear accident. In a time of crisis, it is important for all the concerned parties to knowwhat to do and, to a certain extent, how. The accident showed that the nuclear liability
principles that were transposed into the Japanese nuclear liability regime allowed theconcerned parties to set up, in time of emergency, the basic procedures required tocompensate the victims from the damages incurred due to the accident.
First, the strict and exclusive liability of the operator allowed the victims to
immediately identify the entity, i.e. TEPCO, that would be legally liable to compensate all
nuclear damage they suffered due to the accident.
Second, the Compensation Act provided for a mechanism to help operators toefficiently and voluntarily settle disputes over compensation of nuclear damage: one of thetasks of the Reconciliation Committee is to issue guidelines to determine the scope of thenuclear damage. 9 Even though such guidelines are not legally binding, they can beconsidered as recommendations issued by an independent and objective third party which
can nevertheless be persuasive influence the judges as the victims and the operator may
invoke them before the courts. The Reconciliation Committee has been efficient in issuing
guidelines in a fairly short time frame (between 28 April 2011 and 16 March 2012), thereby
allowing for a great number of applications for nuclear damage compensation to be settled.
As of 25 October 2012,10 TEPCO had received11 approximately 257 000 applications fromindividuals and 116 000 applications from corporations and sole proprietors, out of whichapproximately 206 000 and 92 000 cases respectively have been voluntarily settled. Afterthe criticality accident which occurred at the facility operated by the Japan Nuclear Fuels
Conversion Company in Tokaimura,12 only two cases were submitted to the Reconciliation
Committee as all other disputes were settled voluntarily.
Third, the Compensation Act, which provides for an unlimited liability of the operator,
had already envisaged the case in which the latter would not be able to cope alone withall the nuclear compensation payments. Its Section 16 provides that “Where nuclear
damage occurs, the Government shall give a nuclear operator […] such aid as is requiredfor him to compensate the damage, when the actual amount which he should pay for the
nuclear damage […] exceeds the financial security amount and when the Government
deems it necessary in order to attain the objectives of this Act.” Such aid will
nevertheless require the previous approval of the National Diet. Because of the extent of

9.

For more details, see article on “The current progress of relief of victims of nuclear damage
caused by the Fukushima Daiichi nuclear power plant accident”, p. 29 herein.
10. Source: TEPCO’s “Records of Applications and Payouts for Indemnification of Nuclear Damage”
as of 26 October 2012.
11. Excluding claims for voluntary evacuation.
12. The accident at the nuclear fuel processing facility at Tokaimura, Japan, on 30 September 1999
did not involve widespread contamination of the environment as in the 1986 Chernobyl
accident. Although there was little risk off the site once the accident had been brought undercontrol, the authorities evacuated the population living within a few hundred metres andadvised people within about 10 km of the facility to take shelter for a period of about one day. It
was nevertheless a serious industrial accident. See Report on the Preliminary Fact Finding Mission
Following the Accident at the Nuclear Fuel Processing Facility in Tokaimura, Japan, IAEA, Vienna, 1999.

12

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compensation amounts to be paid by TEPCO, the Japanese government implemented aseries of means to allow the operator to cope with its obligations towards the victims of
the accident:•

As of September 2011, the government started making provisional payments13
directly to the victims under certain conditions, as an emergency measure. In
order to recover the amounts paid, the government acquired such victims’ right toclaim compensation to TEPCO up to the amount they received from thegovernment as provisional payment.

•

In September 2011, the Nuclear Damage Compensation Facilitation Corporation14 was
set up to provide, under certain conditions, financial support to any nuclear operator
which would face nuclear damage compensation obligations beyond JPY 120 billion.

•

As of 31 July 2012, TEPCO is placed under temporary state control. The Nuclear
Damage Compensation Facilitation Corporation, which is 50% owned by theJapanese government, became TEPCO’s largest and controlling shareholder after
acquiring for JPY 1 trillion of preferred shares.

The accident demonstrated that a State with nuclear installations needs to beprepared by establishing a clear and comprehensive legal framework to deal with thecompensation due to the victims of a nuclear accident. However, it is also important thatthe legal framework allows the government and the operator to quickly adapt to thespecific needs of the nuclear accident.
There are lessons to be learnt from TEPCO’s experience of handling the compensation
claims following the accident. The first application for Compensation Request Forms
prepared by the operator, was not only extremely lengthy (according to the press, TEPCO
issued a 160-page brochure that explained how to complete the form, which itself was
60-page long) but it also required victims to provide the necessary supporting documents,
such as certificate of residence, receipts attesting expenses or documents attesting pastincome with regard to business activities; a condition which was impossible to meet for mostevacuees, especially those who had to escape areas devastated by the earthquake andtsunami. After serious criticism from the government and the public, TEPCO had to review
the forms and its claim compensation procedure. And it did so several times, trying to adapt
to the evolution of the evacuation areas15 and the guidelines issued from time to time by the
Reconciliation Committee, and to fulfil its “five promises for the empathy-based
compensation”:•

Ensure a speedy and appropriate payment of compensation.

•

Handle payments promptly with consideration.

•

Give due attention to reconciliation proposals submitted by the Reconciliation
Committee.

•

Simplify paperwork procedures.

•

Take action in order to address the public’s requests.

In September 2012, TEPCO issued the latest versions of application forms forindividuals,16 and for business entities and sole proprietors.17

13. For more details, see paragraph III.2 of the article on “The current progress of relief of victims of
nuclear damage caused by the Fukushima Daiichi nuclear power plant accident”, p. 29 herein.
14. For more details, see article on “The financial support by the Nuclear Damage Compensation
Facilitation Corporation”, p. 41 herein.
15. For an overview of the evolution of the restricted areas, see Maps 1, 2 and 3, pp. 49-51 herein.
16. www.tepco.co.jp/en/press/corp-com/release/2012/1221987_1870.html.
17. www.tepco.co.jp/en/press/corp-com/release/2012/1221990_1870.html.
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Finally, there will be different matters to be further analysed. For example, the factthat victims may, at their own discretion, either individually or as part of a group, file aclaim against the operator relating to nuclear damage compensation matters (i) directly
to the operator, (ii) before the Reconciliation Committee, or (iii) before the civil courts.
The Japanese legislation does not provide for these claims to be submitted to a single
competent court; any civil court is duly competent to receive claims arising out of thesame nuclear incident. Therefore, there could be contradictory civil court decisions on
the same matter, and it will be necessary to lodge an appeal against those decisions up to
the Supreme Court; the principles which will be applied by the latter in its decisions will
be binding upon all lower courts, resulting in a uniform interpretation andimplementation of the law. It is interesting to note that, unlike the original Paris
Convention and Vienna Convention, their revised versions (i.e. 1997 Protocol to amend
the Vienna Convention and the 2004 Protocol) provide that a single court shall be
designated by the relevant State to hear all claims arising out of a nuclear accident. For
example, Article 13 of the Paris Convention, as amended by the 2004 Protocol, provides
that “the Contracting Party whose courts have jurisdiction under this Convention shallensure that only one of its courts shall be competent to rule on compensation for nuclear
damage arising from any one nuclear incident, the criteria for such selection being
determined by the national legislation of such Contracting Party”.
In time and with the necessary hindsight, the Japanese government and theinternational community will be able to further assess the legal implications and handlingof the accident in order to determine the improvements that should be made to the nuclear
liability regimes, whether at the national or at the international level. Such investigation
will need to take into account the practical matters (such as the claims handlingprocedures) that are required to implement such regimes and thereby to ensure theirefficiency and to meet their purpose: to protect the victims of a nuclear accident byefficiently providing adequate compensation.

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Japan’s nuclear liability system

By Toyohiro Nomura, Taro Hokugo, Chihiro Takenaka*

I. The nuclear liability system
1. Overview of the system
In 1961, Japan enacted two acts regarding nuclear liability: the Act on Compensation for
Nuclear Damage (“Compensation Act”) and the Act on Indemnity Agreements forCompensation of Nuclear Damage (“Indemnity Agreements Act”). Japan’s nuclear liability
system is centred on these two acts. The system has been reviewed approximately every
ten years, with revisions such as increases to the financial security amounts, but the basic
content of the system has generally been upheld since its establishment.

(1) Overview of the Compensation Act
The Compensation Act is aimed at contributing to the protection of victims, and thesound development of the nuclear-related industry, by defining a basic system forcompensation in cases where nuclear damage occurs due to operation of a nuclear
reactor or the like. As well as establishing special rules with relation to nuclear liability
that are to be applied with precedence over the provisions on general tort liability in the
Civil Code, it sets out a framework mainly designed for the smooth implementation ofcompensation. The provisions and the interpretation doctrines on general tort liability in
the Civil Code apply to the matters to which this act does not specifically refer, such as
the terms of the extinction of rights to claim and the approaches to determine the scopeof liability. The outline of its content is as follows:
A. “Nuclear damage” is defined as any damage caused by the effects of the process of
nuclear fission of nuclear fuel material, or by the radiation effects or toxic effects ofnuclear fuel materials and the like.
B. Tort liability for nuclear damage arising due to the operation of a nuclear reactor
etc. is to be borne by the nuclear operator licensed for said operation, regardless ofwhether or not it was wilful or negligent, and no other party is to be liable for nuclear
damage. No limit is set for the compensation liability amounts (no-fault liability,
channelled liability, unlimited liability). It is also stated that a nuclear operator isexempted from liability for compensation when the nuclear damage occurs due to agrave natural disaster of an exceptional character or an insurrection.

*

Mr. Toyohiro Nomura is J.S.D., Professor, Gakushuin University; Mr. Taro Hokugo is Project
Researcher, Policy Alternatives Research Institute, University of Tokyo; Mr. Chihiro Takenaka is
Nuclear Legal Unit Chief, Atomic Energy Division, Research and Development Bureau, Ministryof Education, Culture, Sports, Science and Technology (MEXT) in Japan. The views stated in thisreport are not the official views of the Japanese government, but the personal opinions of theauthors. However, the authors did their utmost to base their explanations of the interpretationof relevant laws on the views most generally accepted among experts.

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C. Nuclear operators have a duty to secure funds up to the financial security amountto allocate to the compensation of nuclear damage. Specifically, nuclear operators musttake one of the measures listed below as a financial security, and have it approved by the
Minister of Education, Culture, Sports, Science and Technology (“MEXT”):(i)

Conclude a liability insurance contract for nuclear damage with insurancecompanies (a “private liability insurance contract”) and an indemnity agreement
for compensation of nuclear liability with the government (a “government
indemnity agreement”).

(ii)

Offer a deposit of money for the compensation of nuclear damage.

(iii) Other measures equivalent to the above.
D. It is stated that the government should assist the nuclear operator in case theamount requiring compensation exceeds the financial security amount and the necessity isrecognised in light of the purposes of this act. In case the nuclear operator is exemptedfrom liability because nuclear damage arises due to a grave natural disaster of an
exceptional character or due to an insurrection, it is stated that the government shouldtake the necessary measures to aid the victims and to prevent the damage from increasing.
E. It is stated that the Dispute Reconciliation Committee for Nuclear Damage
Compensation can be established, if required, and is to mediate reconciliation of any
dispute arising from the compensation process of nuclear damage and to formulate theguidelines regarding the scope of the nuclear operator’s liability for nuclear damage, etc.

(2) Overview of the Indemnity Agreements Act
The Indemnity Agreements Act gives the government the authority to conclude
government indemnity agreements with nuclear operators, whereby, in exchange for regular
payment of indemnity fees, the government promises to compensate the contracting nuclear
operator for any losses it incurs through providing compensation for nuclear damage which
is not covered by private liability insurance contracts. Additionally, the act sets out therequisite framework of procedures etc. for making the indemnity payments.

JPY

operations

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2. Liability of nuclear operators(1) Section 2.2 of the Compensation Act defines “nuclear damage” as being damage“caused by the effects of the fission process of nuclear fuel, or of the radiation from
nuclear fuel, etc., or of the toxic nature of such materials”. This “nuclear damage” is what
is covered by the nuclear liability system.
(2) The main clause of Section 3.1 of the Compensation Act provides that “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 the damage”. This statement imposes no-fault liability on the nuclear operator.
However, the nuclear operator is exempted if the damage occurs due to a “grave natural
disaster of an exceptional character” or “an insurrection” such as an armed attack from aforeign country or a civil war (proviso to Section 3.1).
(3) Section 4.1 of the Compensation Act negates any compensation liability for nuclear
damage caused by the operation of a nuclear reactor etc. of any party other than the
nuclear operator that is liable for said nuclear damage based on the main clause of
Section 3.1. This achieves liability channelling, with the nuclear operator alone bearing
liability for nuclear damage compensation.
(4) The compensation liability amount of a nuclear operator is uncapped, whichmeans the operator bears unlimited liability.
(5) The range of compensation liability to be attributed to a nuclear operator is notparticularly defined other than by the definition of “nuclear damage” in theCompensation Act, so that Article 709 of the Civil Code, which provides general tort
liability, and its standard interpretations apply. Thus, a nuclear operator is liable for thedamage within the range for which one can recognise a reasonable causation from “theeffects of the fission process of nuclear fuel, or of the radiation from nuclear fuel, etc., orof the toxic nature of such materials” resulting from said nuclear operator’s operation of
the nuclear reactor etc. Also, as there are no stipulated conversion rules for the burden of
proof with regard to proving this reasonable causation, the victims’ side bears the burdenof proof in accordance with the principles of general tort liability.
(6) If the amounts for which the nuclear operator bears compensation liability exceed
the financial security amount, Section 16.1 states that the government should provide thenuclear operator with the assistance required to make compensation for the damage if it
is recognised that this is necessary to achieve the purposes of the Compensation Act.
This stipulation, which is by nature a discretionary provision, does not directly impose aduty on the government to provide assistance, but the government has explained in past
Diet deliberations that it would provide this assistance whenever it was recognised as
being necessary.
The enactment of the Nuclear Damage Compensation Facilitation Corporation Act(“Corporation Act”) and the establishment of the Nuclear Damage Compensation
Facilitation Corporation based on said act, in which the government set up a system toprovide assistance to the nuclear operators after the accident at TEPCO’s Fukushima
Daiichi nuclear power plant, can be viewed as measures to translate the support policy
based on Section 16 of the Compensation Act into action for the nuclear operators
operating commercial nuclear reactors and the commercial reprocessing facility.
On the other hand, if the government had not taken these measures, the nuclear
operator in charge could have fallen into a bankruptcy in which legal liquidation isassumed to be extremely difficult from a practical standpoint, because of the great number
and the successive occurrence over a long period of time of nuclear damage claims fromvictims. In addition, under the current laws, in bankruptcy proceedings the rights to claim
for nuclear damage are ranked equal to other general creditors’ claims and are also ranked
subordinate to claims with general priorities such as the secured bonds issued by TEPCO,
so that the reimbursement of compensation to the victims would not be given priority.
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ARTICLES(7) No clear standards have been established regarding what specific kind of situation
would qualify for exemption due to “grave natural disaster of an exceptional character”,
but it is interpreted that this exemption means that even if it exceeds the scale ofdisaster that operators should specifically envisage to prevent damage under the fault
liability principle, this exemption will not apply unless it is evidently a case where it istotally inappropriate to make nuclear operators bear compensation liability. Even in theDiet deliberations when the acts were submitted in 1961, it was explained that theexemption was not equivalent to that for a simple “act of God” but could be expressed asa “super-act of God” or “situations that are completely beyond all imagination”. In thelight of such points, the government has expressed a view that “a grave natural disasterof an exceptional character” is restricted to situations that are beyond all imagination,
which have never been experienced by mankind in history, and that in consideration of
the scale (magnitude) of the earthquakes and the run-up height of tsunami in thedisasters that have previously occurred in the world, the 2011 Great East Japan
Earthquake and the tsunami that occurred in conjunction with it (“the 2011 disaster”) do
not qualify on this basis.1 Therefore, based on the premise that TEPCO, the nuclear
operator in charge, would not be exempted, the government is taking steps to move
forward with TEPCO’s compensation for victims such as indemnity payments based on
indemnity agreements (Compensation Act, Section 10), assistance needed for the nuclear
operators to pay damage compensation (Compensation Act, Section 16), and so on.
The nuclear operators’ liability under Section 3.1 of the Compensation Act is a civil
liability, and if disputes arise in specific cases regarding whether or not there is liability
for compensation or the scope thereof, etc., a court should make the final judgement anddecision based on the evidence and assertions of the parties. However, under the nuclear
liability system, most government measures aimed at helping the victims cannot proceedwithout being based on a fixed premise on whether or not the nuclear operator is liable.
Because of this, the government has made administrative judgements, without legallybinding power, concerning the applicability of exemption in accordance with the proviso
to Section 3.1 of the Compensation Act, and is pushing forward with the procedures onthat basis.
According to the text, it is natural to interpret the character of this exemption under
the proviso to Section 3.1 of the Compensation Act not as a cause for claim but asgrounds for defence, and in consequence it is interpreted that the burden of proof ofbeing exempt is on the nuclear operator in charge rather than on the victims. It is also
unreasonable to impose this burden of proof on victims from the viewpoint of thenecessity of making smooth and prompt compensation to the victims.
(8) The terms of extinction of rights to claim for the compensation of nuclear damage
are not particularly defined in the Compensation Act, so that Article 724 of the Civil Code,which provides the terms of extinction of rights to claim for general tort liability, and its
standard interpretations apply. Thus, the right to demand compensation for nuclear
damages “shall be extinguished by the operation of law if it is not exercised by the victim
or his/her legal representative within three years from the time when he/she comes toknow of the damage and the identity of the perpetrator”, or when “twenty years haveelapsed from the time of the tortuous act”. Since this term of “twenty years” after thetime of the tortuous act is shorter than the term of 30 years from the date of the nuclear
incident for the loss of life and personal injury provided in the Protocol to Amend the1963 Vienna Convention on Civil Liability for Nuclear Damage of 1997, an extension ofthis term had been examined in order to protect the victims of late radiation injuries.
However, the conclusion of the examination was that this term of twenty years would
not substantially bar the claims of such victims, because in recent cases the Supreme

1.

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For a comparative overview of the scale of the world greatest earthquakes and tsunami, see
Table 3, p. 54 herein.
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Court has ruled that for damage which, by its nature, arises after the elapse of a long
period of time from the time of its causal tortuous act, this term is to start from the time
when such damage materialises (3rd Petty Bench, 2004 April 27, Supreme Court Reports(civil cases) 58･4･1032 / 2nd Petty Bench, 2004 October 15, Supreme Court Reports (civil
cases) 58･7･1802 / 2nd Petty Bench, 2006 June 16, Supreme Court Reports (civil cases) 60･5･
1997), and the special extended term for extinctive prescription was not introduced into
the nuclear liability system.

3. Financial security(1) System framework
To ensure that the nuclear operators secure the basic funds for the smooth
implementation of compensation for nuclear damage, Section 6 of the Compensation Act
provides that a nuclear operator is prohibited from undertaking reactor operation etc.
unless it has provided financial security for the compensation of nuclear damage.
Section 7.1 of the Compensation Act provides that this financial security must be one of
the following measures which was approved in advance by the MEXT:(i)

The conclusion of a private liability insurance contract with a private insurancecompany and the conclusion of an indemnity agreement with the government,
either of which meets the financial security amount.

(ii)

A deposit of money meeting the financial security amount.

(iii) Measures equivalent to (i) and (ii).
There are no express provisions concerning the requirements for measuresequivalent to (i) and (ii), but these might be a government guarantee, bank guarantee, or
combinations of these measures, the set of a private liability insurance contract and agovernment indemnity agreement and a deposit of money.
The financial security amount for specific types of nuclear operation etc. isdesignated within the range under JPY 120 billion in the cabinet order, which specifies
JPY 120 billion per site for reactor installations whose thermal output exceeds
10 000 kilowatts, and consequently, all the nuclear power plants in Japan fall in thiscategory. The financial security amount has been raised as far as possible in each reviewof the nuclear liability system, approximately every ten years, in light of factors such as
the growth of the insurance market’s underwriting ability. The current level of
JPY 120 billion was raised from the previous level of JPY 60 billion at the time of the 2009
revision of the Compensation Act.
Private liability insurance contracts are contracts promising, in accordance with
Section 8 of the Compensation Act, that an insurer undertakes to indemnify a nuclear
operator for its losses arising from the compensation of nuclear damage, where thenuclear operator becomes liable for such nuclear damage, in exchange for the payments
of insurance premiums. Government indemnity agreements are agreements promising,in accordance with Section 10 of the same Act, that the government will indemnify anuclear operator for any losses arising from the compensation of nuclear damage whichcannot be covered by private liability insurance contract or other measures, in exchange
for payments of indemnity fees. What is covered by the government indemnity
agreements is set based on the actual situation of private liability insurance contracts in
the insurance market, and includes nuclear damage arising through earthquakes,
volcanic eruptions or tsunami, damage arising through normal operations and damage
claimed more than ten years after an accident, all of which are not underwritten by the
insurance market (Indemnity Agreements Act, Section 3 and Order for the Execution of
the Act on Indemnity Agreements for Compensation of Nuclear Damage, Section 2).

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ARTICLES(2) Details of financial security for the TEPCO’s Fukushima Daiichi nuclear power plant andthe Fukushima Daini nuclear power plant, and related post-accident measures
The financial security for the Fukushima Daiichi nuclear power plant and the
Fukushima Daini nuclear power plant was comprised of private liability insurance
contracts and government indemnity agreements, enabling payments of up to
JPY 120 billion in each case. The Fukushima Daiichi nuclear power plant accident that has
recently given rise to nuclear damage occurred due to an earthquake and tsunami, so
losses arising through compensation for this are covered by the government indemnity
agreement. After the accident, TEPCO claimed JPY 120 billion from the government as anindemnity payment based on the government indemnity agreement on the Fukushima
Daiichi nuclear power plant, on the grounds that its losses from damage compensation
caused by the accident in the plant had exceeded JPY 120 billion. The government
investigated the details of the losses and then complied with the claim, paying
JPY 120 billion.
In addition, with regard to the Fukushima Daini nuclear power plant, an evacuation
instruction was also issued by the government to surrounding residents since the plant
became temporarily unstable because of the loss of cooling function. This means that
nuclear damage which should be covered by the government indemnity agreement hasarisen in the form of evacuation costs etc. Currently, no indemnity payments have yet
been made since the compensation amounts for the claims relating to this plant have notbeen specified, but once they are specified, the government indemnity payment to TEPCO,
which is supposed to be executed upon request, will be initiated.
Section 6 of the Indemnity Agreements Act provides that the indemnity rate, the rate
to be used in calculating the indemnity fees which should be paid annually to thegovernment by the nuclear operators, should be determined by taking into consideration
the probability of the occurrence of damage covered by the government indemnity
agreements and the management expenditures of the government etc., and delegates its
determination to a cabinet order. The indemnity rate had been set at 3/10 000 against theindemnity agreements amount (financial security amount) by the Order for the Executionof the Act on Indemnity Agreements for Compensation of Nuclear Damage, Article 3.
However, after this disaster, which became the first case in which a government
indemnity payment was to be made, the indemnity rate relating only to the operation of
nuclear reactors with a thermal output exceeding 10 000 kW was raised to 20/10 000,
taking into consideration the fact that this disaster had occurred. This revision of thecabinet order was enforced on 1 April 2012. Eventually, the annual indemnity fee per siteof each nuclear power plant operator was raised from JPY 36 million to JPY 240 million.

(3) Issues for consideration
Although the government declared that a state of “cold shutdown” in the Fukushima
Daiichi nuclear power plant has been attained, and the situation has become much morestabilised than before, the facilities destroyed in the accident have not been restored up to
their normal status. The insurance companies affiliated with the Japan Atomic Energy
Insurance Pool, which have until now underwritten the private liability insurance contracts,
did not accept the renewal of the insurance contract from January 2012, on the basis that thiskind of situation is naturally assessed as one in which a nuclear accident is still continuingfrom a technical standpoint. TEPCO therefore deposited JPY 120 billion to fulfil its duty
regarding the financial security of the plant under Section 6 of the Compensation Act.
Although the Fukushima Daiichi nuclear power plant is in a state of “cold shutdown”,
one cannot exclude the theoretical possibility that additional nuclear damage may becaused in some form or other in the future, so there is a certain degree of rationality inseeking to secure compensation funds to cope with such an eventuality. However, theduty of financial security in the situation after the accident, which is technically assessedby insurance companies as being an ongoing accident, and where it is difficult to obtain

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underwriting for private liability insurance contracts, has inevitably led to the choice tofreeze the JPY 120 billion funds in the form of a deposit, which might have been allocatedto the compensation for the damage. What is more, it is in practice difficult to distinguishbetween the damage that has arisen from the accident to date and the damage that willarise as the situation changes from now on, so it is not entirely clear whether thedeposited funds will be paid out smoothly or not. In the light of such points, it seems
more reasonable to deem the state wherein facilities continue to be damaged from theaccident to be an integral part of the original accident, to relieve the duty to take out
financial security within that period, and to have the Corporation support thecompensation funds during that period instead, for the sake of progressing smoothlywith compensation. There is still room for examining the possibility of revising thesystem in this way.
The fundamental problem seems to lie in that Japan’s current nuclear liability system
has been established without envisaging a situation in which an accident continues
substantially for a considerable term, as with the current accident. Thus, in addition to
the aspect of insurance renewal, it is probably advisable to review whether the systemneeds to be amended from the perspective of dealing with such an ongoing accident.

4. Treatment of foreign victims
Foreign victims who suffered nuclear damage inside Japanese territory due to thereactor operation etc. of nuclear power facilities located inside Japanese territory are
eligible for compensation under the Japanese nuclear liability system on equal basis as
the Japanese victims, generally under the same procedure. For nuclear damage arisingoutside Japanese territory, on the other hand, the general rules of conflict of laws apply todetermining the applicable law and the court with jurisdiction, since Japan has notconcluded any of the treaties regarding nuclear liability, nor has any special legislation
on foreign application of the Japanese nuclear liability system been enacted.

(1) If a case is brought in Japan for damage occurring in a foreign territory
If a foreign victim suffers nuclear damage outside Japanese territory due to theoperation etc. of nuclear power facilities located inside Japanese territory, and a case isbrought seeking compensation, the jurisdiction of Japanese courts would generally beaffirmed on the basis that the address of the defendant, the nuclear operator, is in Japanand that the act of tort was committed inside Japanese territory.
However, the applicable law to said claim would not necessarily be specified underJapanese law, and there is some uncertainty over a court’s decision on this issue.
Article 17 of the Japanese Act on General Rules for Application of Laws provides that, inprinciple, the formation and effect of a claim arising from a tort shall be governed by “thelaw of the place where the result of the wrongful act occurred”, while an exception statesthat when “the occurrence of the result at said place was ordinarily unforeseeable”, “thelaw of the place where the wrongful act was committed” shall govern. Hence, if it isjudged that it would normally be impossible to foresee nuclear power facilities inside
Japan giving rise to nuclear damage at said place outside the country, the JapaneseCompensation Act would become the governing law, but it is currently difficult to predict
what judgement a court would make on a specific case.

(2) If a case is brought in a foreign court for damage occurring in a foreign territory
If this kind of claim is brought in a foreign court, decisions about jurisdiction andgoverning law will be governed by the law of the relevant foreign court. Even if the claimof a foreign victim were then approved in the final and binding judgement of said foreign
court, according to Article 22 of the Japanese Civil Execution Act, the plaintiff is obliged toobtain an execution of judgement based on Article 24 of said act in a Japanese court forthe compulsory execution of said foreign judgement in Japan. This execution ofJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 201221

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judgement must be made without investigating whether or not said foreign judicial
decision is appropriate (Civil Execution Act, Article 24.2), but the claim for the execution ofjudgement shall be rejected unless said judgement is proved to be final and binding, and all
the conditions for validity of a final and binding judgement of a foreign court as defined in
Article 118 of the Code of Civil Procedure are met (Civil Execution Act, Article 24.3). The
conditions defined in Article 118 of the Code of Civil Procedure are mainly as follows:(i)

The jurisdiction of the foreign court must be recognised.

(ii)

The defendant must have actually received the service of summons or orders
required for commencement of the litigation, or have appeared even without
receiving it.

(iii) The content of the judgement and the court proceedings must not be contrary to
public policy in Japan.
(iv) There must be a mutual guarantee with the relevant foreign country.
The Supreme Court of Japan, for example, has judged that the portion ofcompensation for liability corresponding to punitive damages that has the character ofsetting an example and imposing a sanction is contrary to public policy in Japan, and thatan execution of judgement cannot be made on this portion.

5. Dispute Reconciliation Committee for Nuclear Damage Compensation(1) Role and character of the Reconciliation Committee
The Dispute Reconciliation Committee for Nuclear Damage Compensation(“Reconciliation Committee”) is a council organisation which can be set up in the MEXT
based on Section 18.1 of the Compensation Act. The Reconciliation Committee is not a
standing committee, but an organisation that is supposed to be specially set up only incases where the possibility has arisen concretely that a dispute may occur regarding
compensation of nuclear damage due to a nuclear accident etc. The Reconciliation
Committee consists of up to ten part-time committee members, who are appointed by
the MEXT from among people of high moral standing and who are highly experienced orhave academic standing relating to law, medicine, nuclear engineering or other nuclear
related technologies (Cabinet Order on the Organisation etc. of a Dispute Reconciliation
Committee for Nuclear Damage Compensation, Article 1).
The role of the Reconciliation Committee is three-fold: (i) to mediate reconciliation ofany dispute arising from the compensation of nuclear damage; (ii) to decide general
guidelines (“Guidelines”) for the promotion of voluntary out-of-court settlement ofdisputes such as the standards for determining the scope of nuclear damage; (iii) toinvestigate and assess nuclear damage as required for the above (Compensation Act,
Section 18.2). Items (i) and (iii) have been stipulated since the system was first created,
but item (ii) was added anew at the time of the 2009 revisions to the Compensation Act,
based on the experience gained from the 1999 Tokaimura nuclear accident.
The Reconciliation Committee that had been first set up to mediate settlements
relating to nuclear liability due to the Tokaimura nuclear accident was disbanded in 2010
after all the litigation relating to the nuclear damage caused by said accident had ended.
The Reconciliation Committee relating to the recent accident at the Fukushima nuclear
power plants was set up in April 2011.

(2) Legal character of the Guidelines and background to their introduction
The Guidelines for the promotion of voluntary out-of-court settlement of disputes suchas the standards for determining the scope of nuclear damage, which are decided by the
Reconciliation Committee as its work under (ii) above, have no legally binding force.
However, if the Guidelines are decided through discussion, on fair and neutral grounds, by

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the committee members who are highly experienced or have high academic standing in
the related areas, based on the necessary investigation and assessment, the views in the
Guidelines such as the scope of nuclear damage to be compensated by the nuclear operator
are reasonably expected to serve as the compensation standard that can be trusted by boththe victims and the nuclear operator. It is consequently expected that the Guidelines willserve as reference for the damage compensation negotiations between the victims and thenuclear operator, and thus will facilitate smoother settlement negotiations between theparties, as well as promote fair compensation of similar damage in the case of a nuclear
accident in which a large number of compensation claims is raised.
Also, provided that credibility is maintained in the fairness and neutrality of theprocess of the Reconciliation Committee in determining the Guidelines, it is further
expected that the Guidelines will also, to a certain extent, be respected as authoritative
opinions expressed by neutral experts in trials if a party makes beneficial use of them.
This additional role of determining the Guidelines was introduced to the Reconciliation Committee based on a review of the progress of nuclear damage compensation for
the 1999 Tokaimura nuclear accident, which was performed in 2008 prior to the revisionof the Compensation Act. First, the review recognised the importance of out-of-court
settlement as a pragmatic means of dealing with the large number of compensation
claims that is expected to be filed within a short period. Secondly, it also recognised thatthe compensation standard decided neutrally by the experts had contributed topromoting out-of-court settlement between the victims and the nuclear operator. Specifically, the Nuclear Damage Investigation Study Group, which was set up at that time
under the contracts of the former Science and Technology Agency, provided relatedparties with reports and the like outlining a basic approach to determine the extent of
reasonable causation, or methods for calculating damage amounts etc., with regard to
the damage categories. Under a situation in which numerous compensation claims had
been filed in a short period, these reports and the like were effective measures inavoiding confusion in the settlement negotiations, in promoting fair compensation and inpartially decreasing the burden of proof of causation on the victims.
At the time of the 1999 Tokaimura nuclear accident, around 8 000 compensation
claims were made in a short period. They were arranged into approximately 7 000 claims,of which around 6000 claims were resolved through settlement within six months of theaccident. Two applications were made to the Reconciliation Committee for mediation,
fewer than 20 claims were brought to court, and the total compensation amount wasaround JPY 15 billion.

(3) Nature of settlement mediation work and its systems
Settlement mediation, performed by the Reconciliation Committee as per theabovementioned operation under (1) above, means intermediation between parties
involved in compensation to arrange out-of-court settlement and is a simple factual act
having no legally binding force. A mediation proposal suggested by the Reconciliation
Committee becomes a valid settlement agreement that binds the parties only when all ofthem agree to said proposal. Thus the Reconciliation Committee is expected to provide a
draft mediation proposal to parties based on neutral and expert viewpoints which would
be found trustworthy by both sides, for the promotion of the settlement.
Given the scale of the recent accident, it was expected that settlement mediation
would have to be performed for an exceptionally high number of disputes, and it wasconsidered that it would be difficult to deal with them under the initial structure of theorganisation. In July 2011 the government therefore revised part of the Cabinet Order on
the Organisation etc. of the Dispute Reconciliation Committee for Nuclear Damage
Compensation, by introducing “special members” of the committee in addition to the up
to ten committee members to perform solely the procedural work for settlement
mediation, and providing that settlement mediation work is to be carried out by one orJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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more than two of the members or special members of the committee as decided by the
Reconciliation Committee.
Based on this revision, the Nuclear Damage Compensation Dispute Resolution Centre(“ADR Centre”), which is composed of part-time special committee members,
investigators to support the activities of the special committee members and an
administrative office to support and co-ordinate their activities, was established under
the Reconciliation Committee with the aim of resolving disputes concerning damage
compensation claims relating to this accident smoothly, speedily and fairly. As a result, it
became possible for settlement mediation operations to be carried out separately fromthe main body of the Reconciliation Committee. The ADR Centre started its operations on
1 September 2011 with two offices, one in Tokyo and another one in the Fukushima
prefecture. As of the end of May 2012, the ADR Centre had 175 part-time special
committee members and 42 investigators. The special committee members andinvestigators of the ADR Centre are all legal specialists. The ADR Centre co-operates with
the Japan Federation of Bar Associations to hire lawyers. The courts and the Ministry ofJustice have also dispatched staff to the ADR Centre, in addition to MEXT. Committee
2
members other than the special committee members have not as yet performed any
settlement mediation work.
The procedure of the ADR Centre is initiated by receiving an application from a party
to a dispute, either a victim or the nuclear operator, following which mediationcommittee members hear from both the applicant and the other party about thecircumstances, investigate and examine the damage to be compensated and suggest
settlement proposals whilst harmonising the opinions of both sides, in order to resolve
the dispute through agreement between the parties (i.e. the conclusion of a settlementagreement). The investigators make investigations of the facts and circumstances
relating to the disputes under their charge as the basis for drafting settlement proposals
for those disputes, and manage legal documentation, etc. as legal professionals. At thismoment, one to three special committee members look after each case.
The settlement mediation track record is that out of 2 432 applications received as of
25 May 2012, settlement mediation has been achieved in 153 cases. The standard
mediation period is targeted at around three months, but at present not as many
settlements have been achieved as had been originally hoped. The ADR Centre provides
three reasons for this low number. The first is that the case review, discussions andexamination of settlement proposals all proceed cautiously with early cases because they
may set precedents for later cases. The second is that applications made without the
involvement of any legal professional such as a lawyer have accounted for as much as
80% of the total, so time is being taken up by investigators looking into these cases due toa lack of documentation proving the damage, etc. The third is that TEPCO has become
quite cautious about entering into discussions about settlement proposals the content of
which is not specified in the Reconciliation Committee’s Guidelines.

6. Compensation procedures
In the Japanese nuclear liability system, no particular litigation procedures have beenenacted for nuclear liability; no priority has been provided for compensation among theprocedures, such as compensation via an out-of-court settlement, compensation inaccordance with a settlement based on Reconciliation Committee settlement mediation,or compensation based on the final and binding judgement of a court; and no mandatory
pre-trial procedures have been provided. Victims can therefore select the procedure
freely to suit their own circumstances.

______________________________
2.

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As of May 2012.

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Also, no stipulations are in place for exclusive jurisdiction of a specific court. Thismeans that in numerous courts where cases have been brought, trials proceed
simultaneously in parallel. However, since a trial judgement is made independently ineach trial even within the same court, the possibility is not excluded even under the
exclusive jurisdiction of a single court that the decisions on the scope of compensationdiffer among cases. On the other hand, if the Guidelines of the Reconciliation Committee
are respected to a certain extent as authoritative opinions expressed by neutral experts
in trials, the possible disunity in the compensation standard among judicial decisions canbe expected to be reduced to some extent.
In the light of such points, it is thought that the fact that domestic jurisdiction on
nuclear liability compensation claims is not specified exclusively would not lead toconsiderable disunity or relativisation of compensation standards.

II. Provisional Payments Act
1. Purpose of the system
The Act on Emergency Measures Relating to Damage caused by the 2011 Nuclear
Accident (“Provisional Payments Act”) was enacted through the submission of a bill in June
2011 by the Diet members of non government parties in order to address the situation,
recognised at that time, where the nuclear damage due to the recent accident would besignificant in scale and continue over the long term to an unprecedented degree, andwhere TEPCO’s compensation payments would take time despite the desire to provide
prompt aid to the victims. This bill was passed on 29 July 2011, after some revisions weremade through discussions. The Provisional Payments Act, which was promulgated on
5 August 2011 and came into force on 18 September 2011, defines a framework for thegovernment to make provisional payments to the victims of a portion of the damage
compensation money, as an emergency measure based on said circumstances.

2. Details of the system
The provisional payments made by the government are supposed to be paid foramounts calculated through the computation of approximate damage values via simple
methods defined by a cabinet order based on the Provisional Payments Act, for types ofnuclear damage defined by the cabinet order, multiplied by a fixed percentage that is
supposed to be no less than 50% as defined by the cabinet order. At the same time, theprovisional payments are positioned as items covering nuclear damage due to the recent
accident (Provisional Payments Act, Article 3). When a victim receives compensationfrom TEPCO, they lose the right to receive provisional payments up to the amount of saidcompensation (Article 9.1), and when the government makes a provisional payment, it
acquires the victim’s right to seek compensation from TEPCO, up to the amount of said
provisional payment (Article 9.2). Furthermore, when the government makes aprovisional payment, it is supposed to promptly exercise the acquired right to seek
compensation from TEPCO (Article 9.3).
The government defined, by cabinet order, the nuclear damage that is eligible forprovisional payments to be the “rumour-related” damage suffered by small and mediumsized enterprises engaged in tourism activities in Fukushima, Ibaraki, Tochigi and Gunma
prefectures (Order for Enforcement of the Act on Emergency Measures Relating toDamage Caused by the 2011 Nuclear Accident, Article 1). The government explained that
this was based on the recognition that a significant proportion of the “rumour-related”
damage in the tourism industry could be attributed to the effect of the earthquake andtsunami themselves in addition to that of the nuclear accident, and that the existence ofsuch multiple causes made it difficult to perform prompt compensation for such damage,unlike the damage suffered by other manufacturing or service industries etc. The
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government also explained that in determining the eligibility for provisional payments,
they placed great importance on promoting the smooth progress of the compensation
payments overall in accordance with the purpose of the Provisional Payments Act, andhad decided the following conditions for the eligibility: (i) items where it is anticipatedthat some time will be required until TEPCO makes the main compensation payment, asdifficulties are foreseen in the negotiations about the extent of damage and thecalculations of figures, etc.; (ii) items where an approximate value for the damage can becalculated by a method that is, to a certain degree, reasonable, simple and clear, based on
the Reconciliation Committee’s Interim Guidelines etc; (iii) items where it is recognisedthat there is an urgent need for provisional payments to be received, considering thecircumstances of the relevant industry bodies etc., and where rough consensus has beenachieved with TEPCO; (iv) items where it is anticipated that TEPCO will respond to thegovernment’s request for compensation. The government explained that the above
eligible damage were specified as being damage that satisfied the conditions above. It isalso explained that eligibility for provisional payments would be revised as appropriate,
depending on the progress made on compensation by TEPCO itself.

3. Payment record
Claims for provisional payments began to be received on 21 September 2011, thepayments in respect thereof began on 6 December 2011, and as of 25 May 2012, 50 cases
out of 64 claims had been paid, representing a total figure of approximately JPY 1.7 billion.
One of the reasons for the fact that the provisional payments are quite low comparedwith the scale of damage suffered is an inconsistency between the simple calculation
methods in determining the payment amount and the treatment of provisional payments
as payments covering the compensation in which the government is supposed to acquire
the right to seek compensation from TEPCO corresponding to the provisional payments it
has made. It is indeed recognised that there is a strong, rational need to adopt simple
calculation methods, to pay the provisional payments rapidly as an emergency measure.
However, if the government acquires the right to seek damage compensation for theamount of a provisional payment, in exercising this right, the amount and the extent of
the corresponding compensation liability judged in the civil proceedings can differ fromsaid amount or its provisional payment basis which was calculated via the simple
calculation method. It is also fair to say that the provisional payments defined by thisProvisional Payments Act are in essence the advance payments made on behalf of TEPCO
by the government. Some comments along this line were made in the Diet deliberations
leading to the passing of the bill too, and some Diet members expressed the opinion thatthe government should confirm, when making the provisional payments, whether or not
TEPCO would agree to its claims for reimbursement. The comments indicated that if
TEPCO did not agree to the government’s claims for reimbursement for a provisional
payment, the expenditure for said payment would be a burden on the national budget.
Consequently, when the bill was passed, an ancillary resolution to the act was made that“when making provisional payments, the necessary steps shall be taken so that noburden arises for the populace, for example by carrying out procedures to confirm inadvance that the nuclear operator will agree to the government’s claims forreimbursement”, and provisions to secure this were introduced in a cabinet order.
However, this does also somewhat contradict the central purpose of this act, namely tomake rapid provisional payments, in that it requires considerable time for the process ofrequesting TEPCO’s decisions on the claims.
This Provisional Payments Act was enacted because the Diet had engaged, with theissue of pursuing compensation for the nuclear damage caused by the recent accident fromthe Diet’s own standpoint, with a strong will and interest. However, the role played by thisact has effectively ceased from a practical standpoint, since TEPCO has already developed astructure that allows it to respond to and pay the victims’ compensation claims.

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III. Considering participation in nuclear liability treaties
The treaties concerning nuclear liability are the Paris Convention, the Vienna
Convention, and the Convention on Supplementary Compensation. Until now, Japan has
not joined any of these. The reasons for this include: the fact that Japan has a domestic
nuclear liability system with a level appropriate for an advanced nuclear nation, and an
adequate legal foundation is already in place for the protection of victims and thedevelopment of the nuclear industry, with regard to nuclear damage arising from
accidents inside the country; the fact that it has no land border with any other country
that uses nuclear power, and issues with neighbouring countries regarding how to handle
cross-border damage are geographically not as marked as in Europe; and the fact that theposition of nearby Asian countries such as China and South Korea with regard to theinternational treaties is unclear, so that there has been no immediate prospect ofconcluding the same treaty with those countries with which Japan has a geographicalrelationship or a machinery exports relationship, etc. These issues were pointed out inthe 2008 report by the Group to Review the State of the Nuclear Liability System,
examining the content of the 2009 revisions to the Compensation Act. However,comments were also made in this report that if Japan were to seriously consider
participation in an international framework on nuclear liability and conclude any ofthese treaties, it was thought to be realistic to focus on the CSC when examining theoptions among the treaties concerning nuclear liability.
The government explains that the treaties concerning nuclear liability incorporate avariety of aspects that need to be examined, including issues relating to the exclusivity ofjurisdiction and the rearrangement of domestic law, so that the advantages anddisadvantages for Japan in these various areas need to be fully and carefully scrutinised
and investigated to judge how to handle them. The related ministries and agencies are
currently engaged in this review process, in response to the Fukushima Daiichi nuclear
power plant accident, recognising the importance of building a compensation schemethat is internationally efficient and stable.

IV. Review of the nuclear liability system
Article 6 of the Supplementary Provisions to the Nuclear Damage Compensation
Facilitation Corporation Act, enacted on 3 August 2011, provides that issues such as what
the government’s responsibility under the nuclear liability system ought to be, and theestablishment of an organisation to resolve any disputes relating to nuclear liability both
rapidly and appropriately, and that drastic revisions such as a revision of the Compensation
Act should be performed as soon as possible based on the results of said consideration.
Without doubt, there is a pressing need to review the state of the nuclear liability
system in the light of the recent accident, such as the handling of situations where an
accident continues over the long term, but it is thought that there will be only limitedareas in which conclusions can be currently drawn, while the compensation process isunderway. Further, it is impossible to apply retrospective changes regarding the state ofcompensation liability for an accident which has already happened. Hence, realistically,
it is thought that the review will focus on the state of the civil procedures for nuclear
liability from the perspective of promptly resolving an exceptionally high number ofcompensation disputes, while ensuring fairness and impartiality of the compensation
among the victims, so that for example similar damage claims are treated in the same
way when no exceptional circumstances exist.

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ARTICLESThe current progress of relief of victims of nuclear damage causedby the Fukushima Daiichi nuclear power plant accident

By Shigekazu Matsuura∗

I. Overview of initiatives to provide relief for the victims
The accident that occurred on 11 March 2011 at the Tokyo Electric Power Company(“TEPCO”) Fukushima Daiichi and Daini nuclear power plants inflicted serious damage,including the long-term evacuation of citizens as well as the impact on business activities
over a wide geographic area, and not only in the Fukushima prefecture where theaccident occurred.
The Dispute Reconciliation Committee for Nuclear Damage Compensation(“Reconciliation Committee”), which has drawn up guidelines for determining the scopeof nuclear damage based on the Act on Compensation for Nuclear Damage(“Compensation Act”), has presented these guidelines in order of priority starting where
the probability of nuclear damage is highest, in order to provide prompt relief for thevictims, and on 5 August 2011 the Reconciliation Committee formulated Interim
Guidelines that presented an overall picture of the scope of nuclear damage. Further, due
to the difficulty in arriving at objective criteria for determining what constitutes asufficient causal relationship to the accident, on 6 December 2011 an approach tocompensation was presented in the form of a Supplement to the Interim Guidelines
concerning damages associated with “voluntary evacuation”, etc. carried out not on thebasis of government instructions, which was indicated as a matter for ongoing
consideration at the time of formulating the Interim Guidelines. Based on the basic
approach to a review of those areas subject to evacuation instructions and further issues
which the Government’s Nuclear Emergency Response Headquarters indicated on
26 December 2011, the Reconciliation Committee presented the Second Supplement toInterim Guidelines concerning Damages related to Review of Evacuation Areas by
Government Instructions, etc. on 16 March 2012.
Concerning decontamination, with regard to the measures provided under the Act on
Special Measures concerning the Handling of Pollution by Radioactive Materials, which
was issued in August 2011 and came into force in January 2012, it is stipulated that thecost of decontamination should be borne by the nuclear operator, as this concerns
damage related to nuclear damage pursuant to the Compensation Act.
Concerning the implementation of compensation by TEPCO, in August 2011 theNuclear Damage Compensation Facilitation Corporation Act (“Corporation Act”) was∗

Mr. Shigekazu Matsuura is Director for Nuclear Liability, Deputy Director of Nuclear Liability
Office, Research and Development Bureau, Ministry of Education, Culture, Sports, Science andTechnology (MEXT) in Japan. The views stated in this report are not the official views of theJapanese government, but the personal opinions of the author. However, the author did his
utmost to base his explanations of the interpretation of relevant laws on the views mostgenerally accepted among experts.

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established, paving the way for funding, and based on the Interim Guidelines drawn up
by the Reconciliation Committee, from September 2011 applications for compensation
started being received, and as of 25 May 2012 approximately JPY 898 billion had been paidout. In order to promote prompt and smooth payment of compensation by TEPCO, thegovernment has pushed forward with initiatives including a system of provisional
payments by the State, financial assistance and consultation/information provision by
the Nuclear Damage Compensation Facilitation Corporation (“the Corporation”), andsettlement mediation by the Nuclear Damage Compensation Dispute Resolution Centre(“ADR Centre”).
Compensation by TEPCO has progressed to some extent, in line with the guidelines
drawn up by the Reconciliation Committee, but as an increase in the number of disputes
between TEPCO and victims of the accident is anticipated in the future, arguably it isessential to bolster measures in readiness for an increase in the number of mediation
cases filed with the ADR Centre.

II. Scope of nuclear damage compensation
1. Dispute Reconciliation Committee for Nuclear Damage Compensation Guidelines on
Determination of Scope of Nuclear Damage, etc.
(1) Background to the formulation of the Guidelines
The accident that occurred on 11 March 2011 at the TEPCO Fukushima Daiichi andDaini nuclear power plants inflicted serious damage, including the long-term evacuationof citizens as well as the impact on business activities over a wide geographic area, andnot only in Fukushima prefecture where the accident occurred. In order to provide
prompt relief for the victims, on 11 April 2011 the government set up the Reconciliation
Committee, which has drawn up guidelines for determining the scope of nuclear damage
based on the Compensation Act, and has presented these guidelines in order of priority
starting where the probability of nuclear damage is highest.
On 28 April 2011, the Reconciliation Committee drew up Preliminary Guidelines
indicating the scope of damage arising on the basis of government instructions, etc., andsubsequently drew up Secondary Guidelines (on 31 May 2011) and a Supplement to theSecondary Guidelines (on 31 June 2011), thus expanding the scope of nuclear damage
presented in the guidelines. On 5 August 2011, the Reconciliation Committee drew up
Interim Guidelines that provided an overall picture of the scope of nuclear damage (see(2) below for an overview). In the meantime, hearings were carried out with different
ministries and agencies, as well as six local authorities and 29 trade associations, inaddition to which damage surveys were carried out by 76 expert advisers in 17 fields inorder to identify the circumstances of damage, etc.
Further, due to the difficulty in arriving at objective criteria for determining what
constitutes a sufficient causal relationship to the accident, on 6 December 2011 a
Supplement to the Interim Guidelines was drawn up concerning damages associatedwith “voluntary evacuation”, etc. carried out not on the basis of government instructions,which was indicated as a matter for ongoing consideration at the time of formulating theInterim Guidelines (see (3) below for an overview).
On 16 December 2011, the government’s Nuclear Emergency Response Headquarters
confirmed that the nuclear reactors had been stabilised and that the accident had beenbrought under control and indicated its basic approach to a review of those Areas subject
to Evacuation Instructions and future issues on 26 December 2011. On 16 March 2012, theReconciliation Committee presented the Second Supplement to Interim Guidelines

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concerning Damages related to Review of Evacuation Areas by Government Instructions,etc. (see (4) below for an overview).

(2) Summary of the Interim Guidelines presenting an overall picture of the scope of nuclear
damageThe Interim Guidelines provide an overall picture of the scope of nuclear damage,incorporating the scope of damage indicated in the Preliminary and Secondary Guidelines,
and in the Supplement to the Secondary Guidelines. The Interim Guidelines clearlyspecify that damage having a sufficient causal relationship to the accident, which can be
categorised into types, and also clearly state that rather than immediately disallowing
compensation for something not specified in the Interim Guidelines, it may be possiblefor damage to be recognised as having a sufficient causal relationship to the accident
based on individual, specific circumstances.
The categories of damage indicated in the Interim Guidelines are as follows:•

Damage relating to government evacuation instructions, etc.

•

Damage relating to the declaration by the government of marine exclusion zones,
etc., and no-fly zones.

•

Damage relating to instructions issued by the government or a government agency
restricting the shipment of agricultural, forest or fishery products.

•

Damage relating to any other government instructions, etc.

•

So-called “rumour-related” damage (general criteria, agriculture/forestry/fisheries,
food industry, tourism, manufacturing, services, etc., exports).

•

So-called “indirect damage”.

•

Damage from radiation exposure.

•

Measures for adjustments between government benefits paid to a victim, andcompensation that the victim receives.

•

Property and other damage sustained by local government, etc.

While providing an overall picture of the scope of nuclear damage, the Interim
Guidelines stated that moving forward, as the accident is brought under control andcircumstances change, including a review of the Evacuation Areas, consideration would
be given, as necessary, to the matters to be specified in the guidelines (see Figure 1:
Outline of the Interim Guidelines, pp. 55-57).

(3) Overview of the Supplement to the Interim Guidelines concerning Damages related to
Voluntary Evacuation
Due to the difficulty in defining an objective criterion for determining what
constitutes a sufficient causal relationship to the accident, on 6 December 2011 theReconciliation Committee presented its approach to compensation in the form of a
Supplement to the Interim Guidelines concerning damages associated with “voluntaryevacuation”, etc. carried out not on the basis of government instructions, and which wasindicated as a matter for ongoing consideration at the time of formulating the Interim
Guidelines. An overview of this is given below.

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Overview of the Supplement to the Interim Guidelines concerning
Damages related to Voluntary Evacuation, etc.
Basic approach•

Concerning the persons encompassed by the Supplement to the Interim
Guidelines:– During the period of information insufficiency when the accident
initially occurred, a certain rationality can be recognised, regardless ofage or other factors, in experiencing fear and unease about exposure
to radiation due to the discharge of a large quantity of radioactive
material.

•–

Some time after the accident, amid circumstances in which
information concerning the quantity of radiation, etc. was obtainable
to some extent, the likelihood of extreme sensitivity to radiation is
generally recognised, at least in the case of children and pregnant
women, and therefore a certain rationality can be recognised withregard to experiencing fear and unease about exposure to radiation.

–

As well as voluntary evacuation resulting from the abovementioned
fear and unease, there are damages that should be compensated forpeople who continued to stay without voluntarily evacuating.

Further, damages not encompassed by the Supplement to the Interim
Guidelines may also be recognised as damages having a sufficient causal
relationship to the accident based on the individual, specificcircumstances.

Areas subject to Voluntary Evacuation, etc.
The Affected Areas (23 municipalities in the Fukushima prefecture,
excluding Areas subject to Evacuation Instructions, etc.) are clearly stated,broadly taking into consideration distance from the plant, proximity to Areas
subject to Evacuation Instructions, etc., information about radiation levels
published by the government, etc., and the state of voluntary evacuation, etc.

Amount of damages•

It is fair and reasonable to calculate a fixed sum combining damages formental anguish and the increased cost of living expenses, etc., and to set
the same amount of damages for voluntary evacuees and residents.

•

Specifically, the guideline amounts of damages for people with theirhome inside an area subject to voluntary evacuation, etc. at the time theaccident occurred are as follows:– Child/pregnant woman living in an Affected Area: JPY 400 000(damages from occurrence of the accident until the end of December2011).
–

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Persons other than the above: JPY 80 000 (damages at the time ofinitial occurrence of the accident).

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ARTICLES(4) Consideration of approach to compensation associated with the review of Areas subject to
Evacuation Instructions
On 16 December 2011, the government’s Nuclear Emergency Response Headquarters
confirmed that the nuclear reactors had been stabilised and the accident had beenbrought under control, and on 26 December 2011 it indicated its basic approach to areview of those Areas subject to Evacuation Instructions and future issues. Specifically,by the end of March 2012 the areas were revised to the following three Areas subject to
Evacuation Instructions.

New areas subject to evacuation instructions“Area preparing for lifting of evacuation instructions”:
An area in which it has been definitively confirmed that annual accumulated
exposure dose is 20 mSv or less. Once decontamination work has sufficiently
progressed, focused on the living infrastructure and children’s living
environment, the evacuation instructions will be lifted.
“Area subject to living restrictions”:
An area in which annual accumulated exposure dose could exceed 20 mSv. If it
has been definitively confirmed that annual accumulated exposure dose isbelow 20 mSv due to decontamination and natural decay, transition to “areapreparing for lifting of evacuation instructions”.
“Area in which homecoming is difficult”:
An area in which the level of radioactive contamination is extremely high, andhomecoming is expected to be difficult for a long period. Specifically, an area
currently with annual accumulated exposure dose exceeding 50 mSv, where it isfeared that annual accumulated exposure dose may not fall below 20 mSv evenafter five years.

On 16 March 2012, the Reconciliation Committee presented the Second Supplement toInterim Guidelines, which concerns damages related to the review of evacuation areas bygovernment instructions, etc. and damages related to voluntary evacuation, etc.
encompassed by the Interim Guidelines and First Supplement, in relation to matters thatwere stated as being for future consideration, also based on the review of evacuation
areas subject to government instructions, etc. An overview of this is given below.

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Overview of the Second Supplement to Interim Guidelines concerning
Damages related to Review of Evacuation Areas by Government
Instructions, etc.
1. Evacuation expenses and damages for mental anguish after the review of
evacuation areas (Interim Guidelines are extended until the review of the areas)(1) Establish no differences between persons continuing to evacuate andpersons seeking to relocate.
(2) As a general rule, evacuation expenses continue to be the expenses actually
incurred to a necessary and reasonable extent.
(3) The guideline figures for damages for mental anguish are as follows:i)

Area preparing for lifting for evacuation instructions = JPY 100 000 perperson per month.

ii)

Area subject to living restrictions = JPY 100 000 per person per month,
JPY 2.4 million being also possible as lump sum for two years’ damages.

iii)

Area in which homecoming is difficult = lump sum of JPY 6 million perperson.1(4) The period of eligibility for compensation after the lifting of evacuation
instructions should be determined based on future circumstances,compensation being provided uniformly regardless of when individual evacuees
returned home during that period.

2. Evacuation expenses and damages for mental anguish for former
Evacuation-prepared Areas in case of Emergency(1) The amount of damages from one year after the accident is JPY 100 000 perperson per month.
(2) The guideline period of eligibility for compensation is until the end of August2012 (decided flexibly according to the individual, specific circumstances suchas the healthcare/welfare system and school situation), with compensation
being provided uniformly regardless of when a person returned home from one
year after the accident.
(3) Persons who have already returned home or continue to stay shall be eligible
for compensation according to the individual, specific circumstances.

3. Evacuation expenses and damages for mental anguish for Evacuation
Recommendation Spots(1) The amount of damages after one year is JPY 100 000 per person per month.
(2) The guideline period of eligibility for compensation is provisionally a threemonth period after the lifting of evacuation instructions, with compensation
being provided uniformly regardless of when individual evacuees returned
home during that period.

1.

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A higher amount may be allowable according to the individual, specific circumstances, such as
when evacuation is prolonged.
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4. Loss or reduction, etc., of the value of real estate(1) For real estate in an “area in which homecoming is difficult”, the reduction invalue is presumed to be 100% (total loss).
(2) For real estate in an “area subject to living restrictions” and an “areapreparing for lifting of evacuation instructions”, it is presumed that there has
been some reduction in value, taking into consideration the period until thelifting of evacuation instructions, etc.
(3) Assess rationally, taking into consideration the re-acquisition price ofproperty for dwelling use, etc.

5. Business damages and damages due to incapacity to work
(1) The termination point is not indicated for the time being, and a decision
should be taken rationally based on the individual, specific circumstances.
(2) If change of occupation/career or temporary business operation/employment
is recognised as special efforts, a rational and flexible approach is required, suchas not deducting from the amount of damages the income derived therefrom.

6. Damages related to voluntary evacuation, etc.
From January 2012, decisions are made for individual cases and types withregard to children and pregnant women, without establishing areas (based on
the criterion of reasonableness for an average, ordinary person).

7. Damages related to decontamination, etc.
(1) Notwithstanding the operation of the Act on Special Measures concerning
the Handling of Pollution by Radioactive Materials, expenses that are inevitably
incurred in connection with carrying out necessary and reasonabledecontamination, etc. are eligible for compensation, including damage toproperty/business.
(2) Expenses related to necessary and reasonable testing, etc. carried out by
local authorities and educational institutions in order to allay residents’ unease,etc. about exposure to radiation are eligible for compensation.

8. The response of TEPCO
A rational and flexible approach is required, also with regard to damages thatare not clearly stated in the guidelines, such as allowing compensation for all
damages or a certain range of damages in individual cases or types, according to
the nature of the damage, based on the general intent of the guidelines.

2. The relationship between decontamination based on the Act on Special Measuresconcerning the Handling of Pollution by Radioactive Materials
In August 2011, the Act on Special Measures concerning the Handling of Pollution byRadioactive Materials (“Special Measures Act”) was issued to tackle environmental
contamination arising from radioactive material released as a result of the accident.
Based on this act, a unified surveillance/measurement system was established to identify
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ground, etc. In addition, measures enacted based on the above-cited Act relate to nuclear
damage based on the Compensation Act, and it is stipulated in this Act that the cost ofthese measures should be borne by the nuclear operator.
The Special Measures Act came into force in January 2012. Prior to this, the Minister for
Environment designated 11 municipalities in the Fukushima prefecture, which are
Restricted Areas or Deliberate Evacuation Areas, as “Special Decontamination Areas” inorder for the State to conduct decontamination work, and designated 102 municipalities in
8 prefectures as “Intensive Contamination Survey Areas” in order for municipalities tomake concrete assessments of decontamination plans in the future (areas of 0.23μSv/houror higher (equivalent to additional annual exposure dose of 1mSv)).
The national budget associated with the implementation of the abovementioned
Special Measures Act is JPY 464 billion in the FY 2011 budget and JPY 451 billion in the
FY 2012 initial budget.

III. Status of compensation payments by TEPCO and system to promote promptand smooth payments
1. Status of compensation payments by TEPCO
Since April 2011, TEPCO has made provisional compensation payments to residents andcommercial operators in Areas subject to government evacuation instructions and tooperators engaged in agriculture, forestry, or fisheries in areas subject to shipping restriction
orders issued by the government, in order to supply the necessary funds as quickly as
possible, premised on the allocation of funds to damage resulting from evacuation. These
provisional compensation payments are regarded as temporary payments of compensation
for damage that will arise in the future once they have been finalised.
In August 2011, the Corporation Act was adopted, paving the way for funding, andbased on the Interim Guidelines drawn up by the Reconciliation Committee, from
September 2011 applications for compensation started being received.
As of 25 May 2011, a total of JPY 897.7 billion (including unfinalised provisional
compensation payments) had been paid out to approximately 79 900 cases for individuals(other than voluntary evacuees etc), 47 200 cases for corporations and 572 000 cases forvoluntary evacuees etc. (see Figure 2: Progress in provisional/main compensation
payments by TEPCO, p. 58).
Concerning the system for the receipt of compensation claims and payments, TEPCO
started with 1 000 personnel, and this has increased to about 13 100 personnel at the endof April 2011 (including approximately 3 500 employees).

2. System of provisional payments by the StateThe Act on Emergency Measures Relating to Damage from the 2011 Nuclear Accident(“Provisional Payments Act”) for provisional payments by the State was adopted at theend of July 2011. The scope of the act is specified by cabinet order. As TEPCO had now
stepped up compensation payments, as described under Section 1 above, the cabinet
order adopted in September 2011 specified Small and Medium-sized Enterprises (SMEs) in
Fukushima, Ibaraki, Tochigi and Gunma prefectures in the tourism industry, which hadsustained “rumour-related” damage and where the payment of compensation by TEPCO
was expected to require some time, as being eligible for provisional payments by theState, which is also clearly stated in the Interim Guidelines.
The receipt of applications for provisional payments by the State started on 21 September
2011, and by the end of 2012 a total of approximately JPY 1.7 billion had been paid for 50 cases.
A short time after the receipt of applications was started, there was a string of enquiries and36

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claims. In particular, tourism-related organisations in the Fukushima prefecture and otherareas were unhappy that in TEPCO’s calculation method for compensation, the deduction
ratio for factors other than the accident such as earthquake and tsunami was 20% fromMarch to the end of August 2011, and they withheld making compensation claims to TEPCO.
However, following TEPCO’s announcement at the end of October 2011 that it would reducethe deduction ratio, tourism operators in the Fukushima prefecture and other areas began
making compensation claims to TEPCO. As a result, there has been a visible decline in thenumber of enquiries and claims concerning provisional payments by the State.

3. Initiatives by the Nuclear Damage Compensation Facilitation Corporation(1) State of financial assistance for TEPCO
An explanation of the framework for support of TEPCO by the Corporation is provided
in a separate report. In October 2011, the Management and Finance Investigation
Committee concerning TEPCO estimated that approximately JPY 4.5 trillion incompensation would be required, this figure being a macro estimate using miscellaneous
statistical data (see Figure 3: Estimated total amount of compensation, p. 59), based on
which the government issued JPY 5 trillion in bonds to the Corporation in its FY 2011
supplementary budget. In the Comprehensive Business Plan certified by competent
ministers on 9 May 2012, the Corporation committed approximately JPY 2.43 trillion in
financial assistance as funds for compensation payment to TEPCO and subscription for
TEPCO’s shares of JPY 1 trillion for improvement of financial strength.

(2) Support for victims through consultation/information provision
The Corporation Act states that when implementing financial assistance for nuclear
operators, the Corporation should provide consultation and information. Therefore, theCorporation has held free seminars and face-to-face consultations concerning how tomake compensation claims to TEPCO and how to apply to the ADR Centre, as follows:(i)

On-site consultations

Teams of lawyers and administrative scriveners have visited temporary accommodationin which evacuees are housed to provide free on-site consultations and free consultation
seminars. Since the evacuation sites extend to areas outside Fukushima prefecture,
consultations are also being held in the major cities of Niigata and Yamagata prefectures.
(ii)

Regular consultations

Free consultations and telephone consultations are being carried out by lawyers, etc.
at the Corporation’s headquarters (in Tokyo) and at its Fukushima offices.

4. Status of settlement mediation by the Nuclear Damage Compensation Dispute
Resolution Centre(1) Status of settlement mediation
The ADR Centre, which mediates in settlements, started receiving mediation
applications from 1 September 2011. As of 25 May 2012, 2 432 applications had been
received, among which 153 cases had been settled (including 29 cases of partial/provisional
settlements), 94 cases had been withdrawn, and 50 cases had been terminated.
The ADR Centre had targeted a period of three months from application to settlement,
but so far this has not been achieved. In a report published in mid-February 2012
concerning its activities to the end of 2011, the ADR Centre gave the following reasons forthe settlement delays:

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The main reasons cited on the part of the ADR Centre are the need for careful
deliberation, as given the scale, etc. of the accident, the handling of one casebecomes a precedent influencing the handling of many other cases; and as manycases are filed in person rather than through a legal representative, time is needed
to verify/investigate the details of the claim and the facts, etc.

•

The main reasons cited on the part of TEPCO are the withholding of decisions inmany written responses, and the lack of proactive deliberation concerning matters
not specifically stated in the Interim Guidelines and concerning the loss/reduction,etc. of property value.

(2) Future issues
Given the scale of the damage resulting from the accident, there are naturally limits tothe processing capability of the ADR Centre and judicial bodies, and it is essential that thehuge number of cases is resolved through negotiation between the victims and TEPCO.
Further, in order to process the applications to the ADR Centre promptly andsmoothly, there is a need to strengthen the ADR Centre’s structure and enhance its
procedures, as well as achieve co-operation with the Corporation, etc. and improve theresponse of TEPCO, etc. In addition, the ADR Centre plans to share the results andexperience of settlement mediation with society by making public the circumstances
thereof, including the accumulated settlement cases and the criteria, etc. underlying thesettlement process, provided that this is not contrary to the interests of the victims. Thisis expected to promote negotiation between the victims and TEPCO, as well as settlementby the ADR Centre and judicial bodies, thereby contributing to prompt, fair andappropriate relief for the huge number of victims who sustained damage in the accident.

5. Information sharing, etc., by the Committee for Smooth Payment of Compensation for
Nuclear Damage
In order to achieve prompt and smooth relief for the victims through thecompensation of damage, etc., at the end of December 2011 the government established a“Committee for Promotion of Smooth Compensation for Nuclear Damage” comprising theVice Ministers of MEXT and the Ministry of Economy, Trade and Industry, the board
member of the Corporation, and the Vice President of TEPCO, as a framework for policy
consideration aimed at sharing information with related bodies and resolving issues. The
establishment of this Committee is furthering co-operation between the related parties inorder to achieve the prompt and smooth payment of compensation, including theconstruction of a system of compensation related to voluntary evacuation, etc., and theconsideration of measures aimed at addressing an increase in the number of applications
to the ADR Centre, etc.

IV. Conclusions
The Fukushima Daiichi nuclear power plant accident inflicted serious damage,including the long-term evacuation of citizens as well as the impact on business activities
over a wide geographic area, and not only in the Fukushima prefecture where theaccident occurred. The Reconciliation Committee drew up guidelines for determining thescope of nuclear damage, etc., based on the Compensation Act, and in August 2011
published the Interim Guidelines presenting an overall picture of the scope of nuclear
damage. In constructing a system for the prompt payment of compensation by TEPCO in
accordance with the guidelines, the Reconciliation Committee has arguably played asignificant role in providing prompt relief for the victims.
Compensation by TEPCO has progressed to some extent, in line with the guidelines
drawn up by the Reconciliation Committee, but as an increase in disputes between

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ARTICLESTEPCO and victims of the accident is anticipated in the future in relation tocompensation claims that are difficult to categorise in the guidelines, arguably it isessential to bolster measures to address an increase in the number of mediation cases
filed to the ADR Centre.
In addition, as a review of the Areas subject to Evacuation Instructions will be carriedout in the future, while measures related to the clean-up of waste material, ground, etc.
contaminated with radioactive material also evolve, careful attention will need to be paid
to the resulting monetary increase in the compensation requirements.

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ARTICLESThe financial support by the Nuclear Damage Compensation
Facilitation Corporation

By Yasufumi Takahashi*

1. Background to enactment of the Nuclear Damage Compensation Facilitation
Corporation Act(1) Act on Compensation for Nuclear Damage
In Japan, a nuclear damage compensation system is provided in order to protect victims
and to contribute to the sound development of nuclear operators, based on the Act onCompensation for Nuclear Damage (“Compensation Act”).
The Compensation Act stipulates the following:1.

a nuclear operator shall have no-fault, unlimited liability for nuclear damage
caused by its reactor operation, etc., and the liability is channelled to the nuclear
operator (Compensation Act, main clause of Section 3, paragraph (1)). However, if
the damage is caused by “a grave natural disaster of an exceptional character” orby “an insurrection”, the nuclear operator is exempted from the liability (theproviso of the same paragraph);2.

a nuclear operator is obligated to take measures for compensation of nuclear
damage (hereinafter referred to as “financial security”). A nuclear operator is
prohibited from reactor operation, etc. unless the financial security forcompensation of nuclear damage has been provided (Compensation Act,
Sections 6 to 15);

3.

in the case where a nuclear operator shall be liable for nuclear damage, and theactual amount which the operator should pay for the nuclear damage exceeds
the financial security amount, the government shall give the nuclear operator
such aid as is required for a nuclear operator to compensate the damage(Compensation Act, Section 16, paragraph (1)). However, this aid shall be given to
the extent that the government is authorised to do so by decision of the Diet(paragraph (2) of the same section); and4.

if a nuclear operator is exempted from its liability, the government shall take thenecessary measures to relieve victims and to prevent the damage from spreading(Compensation Act, Section 17).

(See Figure 4: Outline of the nuclear damage compensation system in Japan, p. 88.)*

Mr. Yasufumi Takahashi is Councilor, Nuclear Power Plant Accidents Economic Response Office,Cabinet Secretariat, Government of Japan. The views stated in this report are not the official
views of the Japanese government, but the personal opinions of the author. However, theauthor did his utmost to base his explanations of the interpretation of relevant laws on theviews most generally accepted among experts.

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ARTICLES(2) Grave natural disaster of an exceptional character
The accident at the Tokyo Electric Power Company’s (“TEPCO”) Fukushima nuclear power
plant (“the accident”) resulting from the 2011 off the Pacific coast of Tohoku earthquake andtsunami caused the large-scale nuclear damage to local residents and businesses.
The government established the Nuclear Power Plant Accident Economic Damage
Response Team which consists of related ministers (secretariat: the Nuclear Power Plant
Accident Economic Damage Response Office, Cabinet Secretariat), and said team has
dealt with this issue.
Under the Compensation Act, the nuclear operator would be exempted from its
liability if the accident were caused by “a grave natural disaster of an exceptional
character”. Therefore, at the beginning, it became problematic whether the earthquake
and tsunami corresponded to “a grave natural disaster of an exceptional character”.
Although of course the final judgement would be made by a court, the government
judged that the earthquake and tsunami did not correspond to “a grave natural disasterof an exceptional character”, and concluded that TEPCO should not be exempted from its
liability for nuclear damage.

(3) Government aid and legal liquidation
The next issue was government aid for TEPCO.
In general, the liability of a business company which caused damage is defined as
unlimited. If the business company does not have sufficient funds to compensate, legal
liquidation such as bankruptcy or corporate reorganisation procedures will be carried out.
Therefore, unlimited liability means that a business company essentially has liability tocompensate within the scope of its resources.
In the process of legal liquidation, the rights to be compensated for damage shall betreated in the same way as other general rights, and the remaining property shall be
distributed in accordance with pro rata allocation. In Japan, the corporate bonds issued
by electricity utilities are provided with a general security (Electricity Business Act,
Article 37). Since TEPCO is not only a nuclear operator but also an electricity utility, thevictims’ rights to claim compensation for damage are subordinate to the corporate bonds
issued by TEPCO. Therefore, the distributed sum was expected to be even smaller.
Moreover, in the case of bankruptcy procedures, victims would not be able to claim
compensation for damage arising after the procedures. For these reasons, victims would
not be able to receive sufficient compensation in the case where legal liquidation of
TEPCO was carried out.
The government’s basic stance has been that sufficient compensation should be paid
to the victims in Japan with regard to the damage that have legally sufficient causal
relationship to the accident. The government judged that victims would not becompensated appropriately if TEPCO was subject to legal liquidation as a result of nogovernment aid.
There could be various conceivable measures as government aid, including granting
funds directly to the nuclear operator, but some sort of basis such as authority for budget
expenditure is required for granting funds. Thus, the government asked the Diet to enact
a new law, the Nuclear Damage Compensation Facilitation Act, as a legal framework ofgovernment aid based on Section 16 of the Compensation Act.
On the other hand, there were also strong arguments that TEPCO should be subject tolegal liquidation. For one thing, it would be contrary to market rules that TEPCO survived bymeans of the government aid in spite of being substantially insolvent. For another, it would
be contrary to the principle of self-responsibility that even the stockholders and the creditors
such as financial institutions, etc. would be protected because of the government aid.

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However, in the case of legal liquidation, not only the victims would be unable toreceive sufficient compensation, but also they would be inevitably forced to bear theburden inflicted by participating in the legal liquidation procedures under difficult living
conditions in physical and psychological terms as a result of evacuation, etc. Furthermore,in principle the victims would not be able to receive compensation until the conclusion oflegal liquidation. In addition, in the case of corporate reorganisation procedures, TEPCO
would survive and compensate damage arising after the procedures. However, as it was
not clear how large the total amount of compensation in the future would be, it would
probably be difficult to gain sponsors and to carry out corporate reorganisation
procedures. Furthermore, legal liquidation could also have a risk of obstructing the
response to the accident as well as ensuring the stable supply of electricity.
Taking these points into consideration, the government aid for TEPCO has been
carried out in line with rules based on the Compensation Act.
Separate from the arguments for legal liquidation, there was also a view that theState should bear legal liability for compensation jointly with TEPCO, rather thanassuming TEPCO’s primary liability for damage, due to the State’s legal responsibility for
failing to direct TEPCO to take sufficient measures against the earthquake and tsunami as
well as its social responsibility for causing the accident as a result of its promotion of thenuclear energy policy. Moreover, some people claimed that the nuclear business could nolonger continue without limitation of liability. However, the Compensation Act stipulates
the channelling of liability as well as the unlimited liability of the nuclear operator, andtherefore the State does not bear any liability for damage.

(4) The enactment of the Nuclear Damage Compensation Facilitation Corporation Act
On 10 May 2011, TEPCO requested government aid based on Section 16 of theCompensation Act as it had financial difficulty due to the accident, based on the premisethat the earthquake and tsunami did not correspond to “a grave natural disaster of an
exceptional character”.
In response to the request, the government required TEPCO to confirm whether
TEPCO would implement the following policies:
1.

No limitation should be imposed in advance on the amount of compensationand the compensation of damage should be implemented in a prompt andappropriate manner.

2.

The utmost efforts must be paid to stabilise the condition of TEPCO’s Fukushima
nuclear power plant as well as the safety and living environment of workers at
the nuclear plant should be improved and adequate attention should be paid totheir economic aspects.

3.

Necessary expenses should be secured for stable electricity supply and safety ofequipment, etc.

4.

Except for the above, rationalisation of management and cost reduction should besought to the utmost extent.

5.

The actual conditions of management and finance should be examined by a third
party committee established by the government, in order to implement strict asset
valuation and complete re-examination of costs, etc.

6.

Co-operation of all stakeholders should be sought and especially the status ofco-operation from financial institutions should be reported to the government.

After receiving the confirmation from TEPCO, on 13 May 2011, the government
support to TEPCO and the specific framework for this support were decided by the
Nuclear Power Plant Accident Economic Damage Response Team, under the system of
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1.

take every possible measure for prompt and appropriate compensation for damage;2.

stabilise the condition of TEPCO’s Fukushima nuclear power plant and avoid any
adverse impact on related business operators, etc. dealing with the accident; and3.

supply stable electricity which is indispensable for people’s living.

(See: “Framework of government support to the Tokyo Electric Power Company tocompensate for nuclear damage caused by the accident at Fukushima Daiichi nuclear
power plant”, p. 233.)
Based on the framework of government support, the Cabinet Secretariat worked to
draw up a bill, and the bill and said decision were decided by the Cabinet on 14 June 2011.
Then the bill for the Nuclear Damage Compensation Facilitation Corporation Act was
submitted to the Diet.
Following deliberation in the Diet, the bill for the Nuclear Damage Compensation
Facilitation Corporation Act (“Corporation Act”) was passed on 3 August 2011, and then it
was promulgated and enforced on 10 August 2011. During the Diet deliberation, someprovisions were added such as stipulating the State’s social responsibility (Corporation Act,
Article 2), making the nuclear operator receiving the government aid request co-operationof all its related parties (Supplementary Provisions of the Corporation Act, Article 3,
paragraph (2), granting of funds given by the government in the case of shortage of funds
despite of granting of government bonds (Corporation Act, Article 51), and implementing
affairs concerning payment of compensation by the Corporation upon entrustment by the
nuclear operator (Corporation Act, Article 55), and the review provision (Supplementary
Provisions of the Corporation Act, Article 6) was amended.

2. Features of the Nuclear Damage Compensation Facilitation Corporation Act(1) Realisation of Section 16 of the Compensation Act
The purpose of the Nuclear Damage Compensation Facilitation Corporation (“theCorporation”) is, in the case where large-scale nuclear damage of which the actual
amount to be compensated by a nuclear operator exceeds the financial security amount(JPY 120 billion), to provide necessary support to the nuclear operator so thatcompensation measures are implemented promptly and appropriately by the nuclear
operator, while ensuring the smooth management of a stable supply of electricity andany other business activities of the reactor operation, etc., and thereby to enhance thestability of citizens’ lives and to contribute to the sound development of the national
economy (Corporation Act, Article 1).
The Corporation Act is an institutional framework to realise government aid based on
Section 16 of the Compensation Act, rather than a temporary framework supporting only
the payment of compensation for damage arising from the accident.
The specific government aid is carried out through measures such as the granting offunds to a nuclear operator via the Corporation, loan of funds and share subscription by
the Corporation. In this scheme, whether to provide support to a nuclear operator isdetermined for each nuclear accident.
The Corporation Act states “taking into consideration that the State has had thesocial responsibility that comes along with promoting the nuclear energy policy…”(Corporation Act, Article 2), and also the Cabinet decision states “in recognition of thegovernment’s social responsibility on nuclear energy policy, which has been promoted
through the co-operation between the government and nuclear operators”. In both cases,
the State’s legal liability for damage is not admitted, but the reason for realising thegovernment aid based on Section 16 of the Compensation Act is stated.

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ARTICLES(2) Nuclear Damage Compensation Facilitation Corporation(See “Outline of the Nuclear Damage Compensation Facilitation Corporation Act”,
p. 229, and Figure 5: Compensation support by Nuclear Damage Compensation
Facilitation Corporation, p. 235.)

 Mutual support among nuclear operators
The government established the Corporation in order for nuclear operators to prepare
for the future eventuality of huge compensation payments exceeding the financial
security amount.
The Corporation sets the amount of reserves necessary for all nuclear operators and theperiod to achieve such reserve funds, and calculates the annual amount to accumulate.
The Corporation assigns the required amount to each nuclear operator based on certain
criteria such as the capacity of electricity generated by each operator’s nuclear power
facility, and requires the payment (Corporation Act, Articles 38 and 39). The Corporation
accumulates the contributions as reserve funds, and, as a general rule, grants the necessary
funds within the scope of the reserve funds to a nuclear operator that needs funds forcompensation for nuclear damage (Corporation Act, Article 41, paragraph (1)).
Nuclear operators have a duty to pay contributions (Corporation Act, Article 38).
When they have received funds from the Corporation, nuclear operators have no duty to
repay the funds.
A nuclear operator that has caused an accident needs to raise funds and capital forinvestment in facilities and expenses for reactor decommissioning etc., to ensure thestable supply of electricity. On the other hand, the nuclear operator is simultaneously
forced to be in a difficult situation to do so because of a drop in its creditworthiness.
Therefore, the Corporation is able not only to grant funds to the nuclear operator, butalso to give financial assistance including by way of the loan of funds, share subscription
and acquisition of bonds (Corporation Act, Article 41, paragraph (1)). This support enables
the nuclear operator to implement smooth payment of compensation and to ensure thestable supply of electricity, etc.

 Special Financial AssistanceIf the Corporation does not have enough reserve funds necessary to grant funds to anuclear operator, the Corporation gives financial assistance by means of government aid(Article 45 of the Corporation Act). This financial assistance to them is referred to as“Special Financial Assistance”.
Government aid is carried out by granting government bonds (Corporation Act,
Article 48). These government bonds may be redeemed at any time, and the Corporation
gives funds to a nuclear operator by means of the funds obtained by redeeming them.
The funds the nuclear operator obtained by means of the Special Financial Assistance
may be used only for compensation for damage. While a nuclear operator may receive
normal financial assistance without special conditions, a nuclear operator shall prepare a“Special Business Plan” jointly with the Corporation in order to receive the Special
Financial Assistance (Corporation Act, Article 45). In consideration of the fact that theSpecial Financial Assistance is carried out by means of the government aid, the Special
Business Plan requires to contain measures for rationalisation of management andclarification of management responsibility of the nuclear operator. In addition, it isrequired that the plan contains the measures to request co-operation of relevant persons
in order to secure funds for compensation payment.
When preparing the plan, the Corporation shall value the nuclear operator’s assets
strictly as well as objectively and review its business management thoroughly, and shallJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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also confirm whether the requests for co-operation of relevant persons made by the
nuclear operator are appropriate and sufficient.
After certifying the Special Business Plan, the government grants government bonds
as government aid (Corporation Act, Article 45). It is possible that government aid is not
given if the content of the Special Business Plan is judged to be inadequate.
A nuclear operator that receives the Special Financial Assistance is obliged to pay an
additional contribution, the special contribution, separately from the normal contribution,
the general contribution (Corporation Act, Article 52).
The Special Financial Assistance given to TEPCO has been implemented as a form of
the Special Financial Assistance carried out in the case where a nuclear accident occurs
while the Corporation does not have enough reserve funds (Supplementary Provisions of
the Corporation Act, Article 3).

 Management of the Corporation
Only one Corporation shall be established (Corporation Act, Article 4). The capitalsubscribers are the government and non-governmental persons (Corporation Act, Article 5,paragraph (1)). Non-governmental capital subscribers are not limited to nuclear operators,
while conversely, nuclear operators are not obliged to subscribe.
In fact, nuclear operators including TEPCO and a future nuclear operator (J-POWER)
became capital subscribers as non-governmental persons, and a total of JPY 7 billion has
been subscribed by them. The government has subscribed the same amount as the nongovernmental subscribers (JPY 7 billion). The Corporation was established on 12 September
2011, with stated capital of JPY 14 billion.
The Corporation shall have one president, up to four directors and one auditor as
officers (Corporation Act, Article 23). The officers carry out the ordinary management of
the Corporation, while important decisions related to the business and management of
the Corporation such as decisions on financial assistance are made by the “Management
Committee” (Corporation Act, Article 15).
The Management Committee shall be composed of up to eight committee members,
and the president and directors of the Corporation (Corporation Act, Article 16,
paragraph (1)). The committee members shall be appointed from among persons with
“expert knowledge and experience concerning the electricity business, economics,
finance, law or accounting” (Corporation Act, Article 17). While the Corporation is amutual support organisation, the Management Committee shall be established in orderto ensure neutral and fair management.

(3) Persons who substantively bear the expenses for the compensation
When the Special Financial Assistance has been given, the Corporation has an
obligation to pay to the Treasury up to the amount equal to the amount given by thegovernment aid (Corporation Act, Article 59, paragraph (4)).
Since the Corporation pays to the Treasury the general contributions and the special
contribution, electricity rates that nuclear operators earn will substantively be used forthe payment to the Treasury. In Japan, the electricity rate system has adopted an
approval system and “Cost of Service Rate-making Method”. In the same way of
insurance premiums paid out to take financial security, general contributions shall be
admitted as “Cost of Service”. Because the purpose of general contributions is to prepare
for future compensation for nuclear damage, therefore, they shall be recognised as a cost
necessary for nuclear electricity generation.

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On the other hand, a special contribution shall not be admitted as “Cost of Service”,
and shall be paid out of “Fair Profit”. The amount of the special contribution is specified
each business year for the nuclear operator so that in principle no profit accrues.
Government aid under the Corporation Act is a scheme intended to avoid causing afinancial burden because of the Corporation’s payment to the Treasury. However, in thecase where the amount of the Special Financial Assistance is too huge, when the
Corporation intends to pay contributions to the Treasury, it would be inevitable that thecontributions are set at an excessive amount over a long period. As just described, in thecase where “an excessive amount of contributions [...] obstructs the smooth managementof business activities of the reactor operation, etc. such as stable supply of electricity andany other operations, or imposes extreme burden on the users of the business, and hence
poses the risk of causing unexpected disruption in the lives of the citizenry and thenational economy”, the government may grant necessary funds to the Corporation(Corporation Act, Article 68). Furthermore, an additional provision (Corporation Act,
Article 51) was added in the Diet deliberation: “only when the government finds that thefunds pertaining to the Granting of Funds are likely to be insufficient even after granting
government bonds, it may grant necessary additional funds to the Corporation within theamount prescribed by the budget in order to secure the funds necessary to give said
Granting of Funds”. If the Corporation receives funds by way of these provisions, thisreduces the burden of the contribution.
In this way, the compensation for damage arising from a nuclear accident is coveredby the electricity rates by means of the mutual support scheme, and any eventual
shortfall is covered by the financial burden (tax burden). However, thoroughrationalisation of management, clarification of management responsibility and thepayment of a special contribution, etc. are required for the nuclear operator as conditionsof receiving the Special Financial Assistance. Thus, the scheme also imposes a significant
burden on the nuclear operator that caused an accident.

(4) Businesses for facilitating smooth compensation for damage
The Corporation not only gives financial assistance. In order for the nuclear operator
to support the smooth implementation of compensation for damage, the Corporation
may carry out the following (Corporation Act, Articles 53 to 55):
1.

provide necessary information and give advice to persons who suffer nuclear damage;2.

purchase the assets of the nuclear operator; and3.

implement affairs concerning compensation payment on behalf of the nuclear
operator upon entrustment by it, and temporary payment1 on behalf of the nuclear
operator upon entrustment by the State and prefectural governor.

(5) Review clause
While support for TEPCO was closely connected with the energy policy, incircumstances where it was difficult to formulate the energy policy at an early stage andvarious views existed concerning the responsibility of the State, the Corporation Act was
promptly enacted because the legal liquidation of TEPCO needed to be avoided, even if
the costs including compensation for damage were expected to be huge. As a result, thebill submitted by the government included a review clause which provided that a review
would be carried out in the future. During the Diet deliberation, the review clause wasamended to comprehend wider content including reviewing the Compensation Act(Supplementary provisions of the Corporation Act, Article 6).
(See :“Outline of the Nuclear Damage Compensation Facilitation Corporation Act”, p. 229.)

1. Temporary payment on behalf of the nuclear operator by the State based on the Act on
Emergency Measures Related to Damage Caused by the 2011 Nuclear Accident.
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3. Government aid for TEPCO
On 28 October 2011, TEPCO applied for the financial assistance to the Corporation. In
response to this, the Corporation prepared the Special Business Plan and submitted it to
the government for certification jointly with TEPCO. The Special Business Plan wasessentially prepared from a medium-term perspective. However, in consideration of theurgency of giving the Special Financial Assistance to TEPCO, on 4 November 2011, theSpecial Business Plan containing no medium-term plans was certified as an emergency
measure (“Emergency Special Business Plan”) on the premise of preparing acomprehensive version of the Special Business Plan (“Comprehensive Special BusinessPlan”).2
On 27 April 2012, the Corporation and TEPCO applied for certification of theComprehensive Special Business Plan which included renewal of the management setup,thorough rationalisation of management and cost reduction, and medium-term plansconcerning the business and the balance of payments. In the Comprehensive Special
Business Plan, the amount of compensation was estimated at approximately
JPY 2.5 trillion, which was estimated at JPY 1 trillion in the Emergency Special Business
Plan in November of last year, and at JPY 1.7 trillion in the revised Emergency Special
Business Plan in February of this year. In addition, for the purpose of strengthening
TEPCO’s financial basis, the Corporation would subscribe TEPCO’s shares for JPY 1 trillion.
In regard to rationalisation of management, TEPCO would reduce costs by more than
JPY 3.4 trillion in ten years. Moreover, concerning the co-operation of the stakeholders,
the shareholders would not earn dividends for the time being, and the financial
institutions would be requested to loan additional financing in addition to maintaining
TEPCO’s outstanding debt on 11 March 2011. Finally, the Comprehensive Special Business
Plan was certified on 9 May 2012.

2.

48

See TEPCO’s website for details of the Comprehensive Special Business Plan (May 2012):
www.tepco.co.jp/en/press/corp-com/release/betu12_e/images/120509e0104.pdf.
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Map 1: Restricted Areas and areas to which evacuation orders have been issued(from 3 August 2011)

Source: Ministry of Economy, Trade and Industry.

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Map 2: Restricted Areas and areas to which evacuation orders have been issued(from 1 April 2012)

Source: Ministry of Economy, Trade and Industry.

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Map 3: Restricted Areas and areas to which evacuation orders have been issued(from 15 April 2012)

Source: Ministry of Economy, Trade and Industry.

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Table 1: Nuclear power plants worldwide: 435 reactors in operation;
62 under construction (UC)Argentina

2 + 1 UC

Mexico2

Armenia1

Netherlands

1

Belgium

7

Pakistan

3 + 2 UC

Brazil2 + 1 UC

Romania2

Bulgaria

2

Russian Federation

33 + 11 UC

Canada20

Slovak Republic

4 + 2 UC

China

16 + 26 UC

Slovenia

1

Czech Republic

6

South Africa

2Finland

4 + 1 UC

Spain

8

France58 + 1 UC

Sweden10

Germany

9

Switzerland

5

Hungary

4

Taiwan6 + 2 UCIndia

20 + 7 UC

Ukraine15 + 2 UC

Iran, Islamic Republic of

1

United Arab Emirates

1 UC

Japan

50 + 2 UC

United Kingdom

16

Korea, Republic of

23 + 4 UC

United States

104 + 1 UC

Source: IAEA Power Reactor Information System (PRIS), www.iaea.org/pris/ (data posted as of
8 November 2012).

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Table 2: Nuclear power generating states and international nuclear liability
conventions – Status of ratifications (as of November 2012)
Argentina

VC; RVC; CSC

MexicoVC

Armenia

VC

Netherlands

PC; BSC; JP; RPC;
RBSC

Belgium

PC; BSC; RPC;
RBSC

PakistanBrazilVC

Romania

VC; JP; RVC; CSC

Bulgaria

VC; JP

Russian Federation

VC

CanadaSlovak Republic

VC; JP

China

Slovenia

PC; BSC; JP; RPC;
RBSC

Czech Republic

VC; JPSouth Africa

Finland

PC; BSC; JP; RPC; Spain
RBSC

PC; BSC; RPC; RBSC

FrancePC; BSC; RPC;
RBSC

PC; BSC; JP; RPC;
RBSC

Germany

PC; BSC; JP; RPC; Switzerland*
RBSC

Hungary

VC; JP

TaiwanIndia(signed CSC)

UkraineVC; JP

Iran, Islamic Republicof

United Arab Emirates

RVC; JPJapan

United Kingdom

PC; BSC; RPC; RBSC

Korea, Republic ofUnited States

CSC

SwedenPC; BSC; RPC; RBSC

PC:

1960 Paris Convention on Third Party Liability in the Field of Nuclear Energy (Paris
Convention).
BSC: 1963 Brussels Convention Supplementary to the Paris Convention (Brussels
Supplementary Convention).
RPC: 2004 Protocol to amend the Paris Convention (Revised Paris Convention – not in force).
RBSC: 2004 Protocol to amend the Brussels Supplementary Convention (Revised Brussels
Supplementary Convention – not in force).
VC:
1963 Vienna Convention on Civil Liability for Nuclear Damage (Vienna Convention).
RVC: 1997 Protocol to Amend the Vienna Convention (Revised Vienna Convention).
JP:
1988 Joint Protocol Relating to the Application of the Vienna Convention and the Paris
Convention.
CSC: 1997 Convention on Supplementary Compensation (not in force).
*
Switzerland deposited its instrument of ratification of the PC and BSC as
amended by the 2004 Protocols; therefore such conventions shall only enter into
force for Switzerland upon the entry into force of the 2004 Protocols.

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Table 3: Comparative overview of the scaleof the greatest earthquakes and tsunami
Great world earthquakes
Earthquakes(from 20th century)

Great earthquakes in Japan

Magnitude

Earthquakes(after Edo period)

Magnitude

Chile (1960)

9.5

Tohoku (2011)

9.0

Alaska (1964)

9.2

Hoei (1707)

8.6

Sumatra (2004)

9.1

Ansei Tokai (1854)

8.4

Tohoku (2011)

9.0

Ansei Nanakai (1854)

8.4

Kamchatka (1954)

9.0

Meiji Sanriku (1896)

8.2-8.5

Source: United States Geological Survey.

Source: The Headquarters for Earthquake Research Promotion.

Reference: Intensity at Fukushima Daiichi nuclear power plant is 6+ magnitude, which was observed atseven places in Japan for the 2001-2010 period.

Great world tsunami

Great tsunami in Japan

PlacesHeight(m)Earthquakes(after Edo period)

Height(m)

Shoup Bay (Alaska) (1964)

67.1

Meiji Sanriku (Sanriku-cho
ryori) (1896)

38.2

Rhiting (Smatora/Indonesia)(1930)

48.9

Tohoku (Miyako) (2011)38.0

Tohoku (Miyako) (2011)38.0

Hokkaido Nansei Oki(Okushiri) (1993)

31.7

Scotch Cap (Alaska) (1946)

35.0

Yaeyama (Ishigaki Island)(1771)≈ 30

Meiji Sanriku (Tanohata)(1896)

29.1

Source: National Oceanic and Atmospheric Administration,
Fact-finding Mission of Yokohama National University andDisaster Prevention Research Institute of Kyoto University.

Source: Japanese Tsunami Damage Comprehensive List.

Based on a presentation made by the Delegation of Japan to the OECD during the NEA Nuclear Law
Committee meeting held on 21-22 March 2012.

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Figure 1: Outline of the Interim Guidelines
1.1: Determination of the scope of nuclear damage resulting from the accident
at the Tokyo Electric Power Company (TEPCO) Fukushima nuclear power plant

Backgroundo In order to facilitate smooth compensation, the Dispute Reconciliation
Committee for Nuclear Damage Compensation has formulated guidelines fordetermining the scope of nuclear damage, etc., in order of priority starting withthe highest probability of nuclear damage.
Preliminary Guidelines (28 April 2011):
Damage related to Government Instructions, etc.

Secondary Guidelines (31 May 2011, supplement on 20 June 2011):
So-called “rumour-related” damage and mental anguish damage resulting
from evacuation, etc.

Characterisation of the Interim Guidelines
o The Interim Guidelines provide an overall picture of the scope of nuclear damage,including the scope of damage indicated in previous guidelines.
o Rather than immediately disallowing compensation for something notencompassed by the Interim Guidelines, it may be possible for damage to berecognised as having a sufficient causal relationship to the Accident based on theindividual, specific circumstances.
o Moving forward, as the Accident is brought to a resolution and circumstanceschange, including change of the Evacuation Areas, consideration will be given, as
necessary, to the matters to be specified in the guidelines.

Source: Dispute Reconciliation Committee for Nuclear Damage Compensation (5 August 2011).

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o Examination expenses (material) Cost of testing for products forcontamination.

o Examination expenses (material)o Damage due to incapacity to worko Business damage
 Cost of measures to provide replacement
water, store sludge, reduce radiationlevels in school yards, etc.

(Restrictions on the consumption of drinking
water, guidance on the handling of water supply
and sewerage by-products, notices concerning
the use of school facilities/yards, etc.).

 Fall in revenue from sales, trading, etc.
 Additional costs such as productdisposal expenses, office relocation.

o Damage due to incapacity to work

IV. Other damage associated withgovernment instructions, etc.

 Fall in revenue due to shipment being
abandoned, etc.
 Additional costs such as productdisposal expenses.
 Damage due to incapacity to work.
 Examination expenses (material).

agriculture/forestry/fisheries, distributor, etc.)

o Business damage (operator engaged inor pasture grass provision, sales ban, testing
based on Food Sanitation Act, etc.)(shipment/planting restrictions, restricted grazing

III. Damage associated with Shipping
Restriction Orders for agricultural/
forestry/fisheries products (including
processed goods) and food products Fall in revenue due to operationaldifficulty.
 Increase in costs due tocircumnavigation.
o Damage due to incapacity to work.

(Agriculture, forestry and fisheries, generalindustry including manufacturing)o Business damageo Loss or reduction, etc. of propertyvalue JPY 50 000/month for the 6-month
period from the end of stage 1 (stage 2),
etc.

in a gymnasium, etc.).

o Injury or death Medical treatment expenses, etc. due todeterioration in state of health, etc.
resulting from evacuation, etc.
o Mental anguish JPY 100 000/month for 6 months after
accident (Stage 1) (JPY 120 000 for livingo Examination expenses (human)accommodation expenses, removal
expenses for household belongings, etc.).

o Evacuation, temporary access,homecoming expenses
 Evacuation expenses (transport ando Business damage(Evacuation Area [Restricted Area], In-house
Evacuation Area, Deliberate Evacuation Area,
Evacuation-Prepared Area in Case of
Emergency, Evacuation Recommendation Spot,areas for which temporary evacuation was
requested by Minami-soma City).
(fishing operator, shipping operator,
passenger shipping operator, air carrier, etc.).

II. Damage related to establishmentof Marine Exclusion Zone, no-fly zone

I. Damage associated with
evacuation, etc.

Areas subject to Government Instructions, etc.

o Examination expenses(material)o Damage due to incapacity
to work• Fall in revenue due to dropin trading volume, pricereductions• Additional costs such as
product disposal expenseso Business damageo Property damage sustained by local governments, etc.

o Adjustment between various benefits, etc. and damage
compensation payments.

o Damage resulting from exposure to radiation
 Acute and late-onset radiation damage suffered by nuclear
power plant workers and self-defence force officials engaged in
the recovery effort, civilians, etc.

VII. Others

Example of business damage of Indirect Victim:
 A store adjacent to an Evacuation Area in which the majority ofcustomers have evacuated, which has seen a fall in sales, etc.
 Ice maker, broker, etc. in a fishing port where no fish are being
landed due to business being suspended

damage is inevitable as customers or suppliers are limited geographically,
due to the nature of the business)”.

In connection with a Primary Victim who has sustained damage underI-V above, the following is allowed as damage with a sufficient causal
relationship: “a case in which trading is non-replaceable (where

VI. So-called “Indirect Damage”

Note: Categorised into different types including agriculture/forestry/fisheries,
food industry, tourism, manufacturing (see next page for details)

 The psychological state ofwanting to avoid something
due to concern about therisk of contamination withradioactive material isreasonable from theperspective of an average,
ordinary person.
 As a general rule, indicate
the types that are allowable
as damage.

o General criteria

V. So-called “rumour-related” damage (see Figure 1.3)

Areas not subject to Government Instructions, etc.

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1.2: Determination of damage according to areas
subject/not subject to government instructions

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Damage other than the above• Compensation will be allowable, regardless of the region, according to theindividual, speciﬁc circumstances, where a sufﬁcient causal relationship exists
in relation to damage resulting from cancellation, reluctance in booking, etc.

Damage related to foreign tourists
Cancellations exceeding the normal cancellation rate up until 31 May 2011 (wholeof Japan excluding the above 4 prefectures).

Areas in which at least a sufﬁcient causal relationship is acknowledged:
Fukushima, Ibaraki, Tochigi, Gunma prefectures.

“Rumour-related” damage to tourism

Damage other than the above:• Compensation is allowable where a sufﬁcient causal relationship exists, taking
into consideration factors such as reluctance in purchasing and shipment
restrictions.

Costs of testing, issuance of certiﬁcates, etc. requested by destination
countries:

Agricultural/forestry/ﬁsheries processed products, foods:• Main ofﬁce or factory is in Fukushima prefecture.
• Main raw material is among the above mentioned products, etc.

Damage arising at the point of refusal to import by a destination country (importregulations or refusal by customer), where the goods have already been
exported or production/manufacturing has started (the whole of Japan).

Scope of “rumour-related” damage:• Categorised sectors (agriculture/forestry/fisheries, food, industry, tourism,
manufacturing, services, exports).
• Concerning specific damage that cannot be categorised, verify a sufficient causal
relationship on a case-by-case basis, with reference to the general criteria.

General criterion for “rumour-related” damage:• The psychological state of wanting to avoid something due to concern about therisk of contamination with radioactive material is reasonable from the perspectiveof an average, ordinary person.

•

Damage resulting from refusal to import• Costs of testing, issuance of certiﬁcates, etc. due to import regulations indestination countries or where requested by customers, etc. (for the time being,
the whole Japan).

“Rumour-related” damage to exports

E.g.: Refusal of foreign artists to visit, refusal of foreign vessels to call at port.

• Cancellations up until 31 May 2011 (the whole of Japan)

Services dependent on foreign visitors, etc.

• Damage arising from avoidance of collecting sludge from water and seweragesystems (including products that are raw materials)

E.g.: Refusal of transport operators to visit, cancellation of events such as art exhibitions• Damage resulting from operators refusing to visit Fukushima prefecture

E.g.: Textile products manufactured in Fukushima prefecture, rejection of cargo by
operators from outside the prefecture• Damage related to goods/services, etc. made or soldin Fukushima prefecture

Domestic manufacturing/services, etc.

“Rumour-related” damage to the manufacturing and service sectors

Other agricultural/forestry/ﬁsheries products (timber, etc.): Fukushima
prefecture.

Flowers: Fukushima, Ibaraki, Tochigi prefectures.

Fisheries products (limited to use in food and animal feed): Fukushima,
Ibaraki, Tochigi, Gunma, Chiba prefectures.

* Note: The same treatment shall apply if a fall in beef prices is confirmed in prefecturesother than those listed above, due to distribution/use of newly contaminated rice straw.

Beef (beef cattle contaminated with cesium): Hokkaido, Aomori, Iwate, Miyagi,
Akita, Yamagata, Fukushima, Ibaraki, Tochigi, Gunma, Saitama, Chiba, Niigata,Gifu, Shizuoka, Mie, Shimane.*Livestock products (limited to use in food): Fukushima, Ibaraki, Tochigi
prefectures.

Tea: Fukushima, Ibaraki, Tochigi, Gunma, Chiba, Saitama, Kanagawa, Shizuoka
prefectures.

Agricultural/forestry products (excluding tea and livestock products, limited
to use in food): Fukushima, Ibaraki, Tochigi, Gunma, Chiba, Saitama prefectures.

“Rumour-related” damage to agriculture/forestry/ﬁsheries, foodindustry

In addition to the scope encompassed by the Secondary Guidelines (31 May 2011; agriculture/forestry/ﬁsheries and, part of the tourism sector), the Interim Guidelines clearly specify
the scope of “rumour-related” damage, based on the results of detailed damage investigation by expert advisers .

ARTICLES

1.3: Determination of “rumour-related” damage

57

2011

29

/6

tion
ensa
comp ns, local
Main
io
)
nisat
(orga ernments ngovbillio
.6
8
5
1
≈ JPY

Evacuated residents
es(additional): JPY 100 000-JPY 300 000 per person according
to evacuation circumstances ≈ JPY
P 44.1 billion (provisional)

Main compensation(business operators)≈ JPY 228.8 billion(≈ 47 200 cases)

Evacuated residents (initial): JPY
P 1 millionm
per household (JPY 750
75 000 for single-person households) ≈ JPY 54.4 billion (provisional)

/7
14

100

Agriculture/forestry/fisheries operators(Shipping Restriction Order, etc.):
1/2 of the damage amount≈ JPY 36.4 billion (provisional)

/7
29

200

SMEs: 1/2 of the damage amount≈ JPY 8.5 billion (provisional)

/8
13

300

Main compensation(individuals)≈ JPY 115.2 billion(≈ 79 900 cases)

12
/1
0
27
/1
0
11
/1
1

400

12

500

11
/

600

/4

30

/8
28

/5

15

Voluntary evacuation, etc.
≈ JPY 248.5 billion( ≈ 572 000 cases)

2012

2

700

9/

800

/9
12

/5

30

6 December“First supplement to
the Interim Guidelines"

428 April"Preliminary
Guidelines"
31 May"Secondary
Guidelines"

/9
27

/2
24

/3
25

/6

14

5 December individuals/corporations
16 March“Second Supplement toStart of receipt of main
the Interim Guidelines"
compensation for Stage 2

9/

900

12 September individuals
21 September corporations
Start of receipt of maincompensationfor Stage 1
5 August"Interim
Guidelines"

20 June"Supplement to theSecondary Guidelines"

5

Billion
JPY

/1
1
26

/4
24

2
/1
26

/1
10

/1
25

/3
10

/4

15

JPY 146.5 billion (as of 25 May 2012)
JPY 751.2 billion (as of 25 May 2012)

9/

58
/5

Main compensation

24

Provisional:
Main compensation:

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Figure 2: Progress in provisional/main compensation payments by TEPCO

Provisional

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Figure 3: Estimated total amount of compensation

Management and Finance Investigative Committee concerning
Tokyo Electric Power Company(3 October 2011)

A provisional calculation of the amount of compensation to be paid by TEPCO has been
carried out based on the Interim Guidelines drawn up by the Dispute Reconciliation
Committee for Nuclear Damage Compensation, using miscellaneous macro statistical data.
Note: As this is a macro estimate, there could be an over-estimation.
st

An estimate was made of the compensation amount for each fiscal year (1 yearnd
≈ JPY 1.246 trillion; 2 and subsequent years ≈ JPY 897.2 billion/year) and thecompensation amount for assets/temporary factors (≈ JPY 2.6184 trillion).

1. Estimate of compensation during period until accident resolution:st

1 year ≈ JPY 1.246 trillion; 2ndand subsequent years ≈ JPY 897.2 billion/year.

st

Main breakdown of 1 year compensation:• Evacuation/homecoming expenses: ≈ JPY 113.9 billion.
• Mental anguish damages: ≈ JPY 127.6 billion.
• Business damages: ≈ JPY 191.5 billion.
• Damages associated with incapacity: ≈ JPY 264.9 billion.
• Temporary entry expenses: ≈ JPY 7.9 billion, etc.
Example of estimation method: basis for calculation of business damages – business surplus,
number of business operators, etc. for each municipality as detailed in the “Fukushima Prefecture
Civic Economy Statistics”.

2. Estimate of compensation for temporary damage such as loss of property value and “rumourrelated” damage ≈ JPY 2.6184 trillion.
Loss of / reduction in property value, etc. (loss of value due to exposure, etc.)≈ JPY 570.7 billion.
So-called “rumour-related” damage (agriculture/forestry/fisheries, tourism, manufacturing,
services, etc.) ≈ JPY 1.3039 trillion, etc.
Example of estimation method: basis for calculation of "rumour–related" damage in agriculture,
forestry and fisheries – amount of consumer expenditure in “Family Income and Expenditure Survey”,
amount of imports/exports in “Trade Statistics”, etc.

Important notes• Cases where decontamination expenses exceed the property value are not taken
into account.

• Damage types not mentioned in the Interim Guidelines (e.g. voluntary evacuation) are
not included in the estimate, but there are some types of damage where a sufficientcausal relationship to the Accident could be recognised in the future.
• This provisional calculation is only a macro estimate, and it has been considered
completely independently of the necessity for TEPCO to make accounting provisions.

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Act on Compensation for Nuclear Damage(Act No. 147 of 1961)
As amended by Act No. 19 of 17 April 2009Part I
General provisions
Section 1. Purpose
The purpose of this Act is to protect persons suffering from nuclear damage and to contributeto the sound development of the nuclear industry by establishing the basic system regarding
compensation in case of a nuclear damage caused by reactor operation, etc.

Section 2. Definitions
As used in this Act, “reactor operation etc.” means any activity which comes under any
one of the following cases below as well as any incidental transport, storage and disposalof nuclear fuel or material contaminated by nuclear fuel (including nuclear fission
products; this applies also to sub-paragraph (v)), as provided by Cabinet Order:(i)reactor operation;(ii)

production;(iii)

reprocessing;(iv)

use of nuclear fuel;(iv-2) storage of spent fuel;(v)

waste disposal of nuclear fuel or material contaminated by nuclear fuel(referred to as “nuclear fuel etc.” in the following paragraph and in Section 3,
paragraph 2).

2. As used in this Act, “nuclear damage” means any damage caused by the effects of thefission 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 thefollowing Section, is excluded.
3. As used in this Act, “nuclear operator” means any person as specified under any one of
the following sub-paragraphs (including a person who had been deemed so previously).
(i)A person who is granted a permit as provided in Section 23, paragraph 1 of the
Act for the Regulation of Nuclear Source Material, Nuclear Fuel and Reactors(Act No. 166 of 1957; “Regulation Act”) (including a national licence under theprovisions of the same paragraph applying instead by virtue of Section 76 of theRegulation Act) (including a person who is regarded as a reactor operator
pursuant to Section 39, paragraph 5 of the Regulation Act).

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A person who is granted a permit as provided in Section 23-2, paragraph 1 of theRegulation Act.

(iii) A person who is granted a licence as provided in Section 13, paragraph 1 of theRegulation Act (including a national licence under the provisions of the same
paragraph applying instead by virtue of Section 76 of the Regulation Act).
(iv) A person who is granted a licence as provided in Section 43-4, paragraph 1 of theRegulation Act (including a national licence under the provisions of the same
paragraph applying instead by virtue of Section 76 of the Regulation Act).
(v)

A person who is granted a licence as provided in Section 44, paragraph 1 of theRegulation Act (including a national licence under the provisions of the same
paragraph applying instead by virtue of Section 76 of the Regulation Act).

(vi) A person who is granted a licence as provided in Section 51-2, paragraph 1 of theRegulation Act (including a national licence under the provisions of the same
paragraph applying instead by virtue of Section 76 of the Regulation Act).
(vii) A person who is granted a licence as provided in Section 52, paragraph 1 of theRegulation Act (including a national licence under the provisions of the same
paragraph applying instead by virtue of Section 76 of the Regulation Act).
4. As used in this Act, “reactor” means a reactor as provided in Section 3, paragraph 4 of
the Basic Atomic Energy Act (Act No. 186 of 1955), “nuclear fuel” means nuclear fuel asprovided in Section 3, paragraph 2 of the Basic Atomic Energy Act (including spent fuel asprovided in Section 2, paragraph 8 of the Regulation Act), “production” means production
as provided in Section 2, paragraph 7 of the Regulation Act, “reprocessing” means
reprocessing as provided in Section 2, paragraph 8 of the Regulation Act, “storage of spentfuel” means the storage of spent fuel as provided in Section 43, paragraph 4(1) of theRegulation Act; “waste disposal of nuclear fuel or material contaminated by nuclear fuel”,
means the underground disposal of waste and waste management as provided in
Section 51, paragraph 2(1) of the Regulation Act; “radiation” means radiation as provided
in Section 3, paragraph 5 of the Basic Atomic Energy Act, and “nuclear ship” and “foreign
nuclear ship” mean nuclear ship and foreign nuclear ship as provided in Section 23-2,
paragraph 1 of the Regulation Act.

Part II
Liability for nuclear damage
Liability without fault, channelling of liability, etc.
Section 3
Where nuclear damage is caused as a result of reactor operation etc. during suchoperation, the nuclear operator who is engaged in the reactor operation etc. on thisoccasion shall be liable for the damage, except in the case where the damage is caused bya grave natural disaster of an exceptional character or by an insurrection.
2. Where nuclear damage is covered by the preceding paragraph and if the damage iscaused as a result of the transport of nuclear fuel etc. between nuclear operators, thenuclear operator who is the consignor of the nuclear fuel etc. shall be liable for thedamage unless there is a special agreement between the nuclear operators.

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LAWS REGARDING NUCLEAR THIRD PARTY LIABILITY

Section 4
Where nuclear damage is covered by the preceding Section, no person other than the
nuclear operator who is liable for the damage pursuant to the preceding section shall be
liable for the damage.
2. Where nuclear damage is covered by paragraph 1 of the preceding Section, the liabilityof a nuclear operator who furnishes the financial security as provided in Section 7-2,
paragraph 2 and wants a foreign nuclear ship to enter into Japanese territorial waters
shall be limited to the amount as provided in Section 7-2, paragraph 2.
3. The provisions of Section 798, paragraph 1 of the Trade Act (Act No. 48 of 1899), the Act
relating to the Limitation of the Liability of Shipowners (Act No. 94 of 1975) and theProducts Liability Act (Act No. 85 of 1994), shall not apply to nuclear damage which is
caused as a result of reactor operation etc.

Section 5. Rights of recourse
Where nuclear damage is covered by Section 3 and if the damage is caused by the wilful
act of a third party, the nuclear operator who has compensated the damage pursuant to
Section 3 shall retain a right of recourse against such third party.
2. The provisions of the preceding paragraph shall not prevent a nuclear operator fromentering into a special agreement with any person regarding rights of recourse.

Part III
Financial security

CHAPTER 1
Financial security
Section 6. Duty to provide financial security
A nuclear operator is prohibited from reactor operation etc. unless financial security forcompensation of nuclear damage (hereinafter referred to as “financial security”) has
been provided.

Details of financial security
Section 7
Except when the provisions of the following section are applicable, financial security
shall be provided by the conclusion of a contract of liability insurance for nuclear damage
and an indemnity agreement for compensation of nuclear damage or by a deposit,
approved by the Minister of Education, Culture, Sports, Science and Technology (MEXT)
as an arrangement that makes available for compensation of nuclear damage,JPY 120 billion (in case of such reactor operation etc. the Cabinet Order may provide for alesser amount than JPY 120 billion; hereinafter this amount is referred to as “financial
security amount”) for each installation or site or nuclear ship, or by an equivalentarrangement approved by MEXT.
2. Where the amount available for compensation of nuclear damage falls below thefinancial security amount because the nuclear operator has paid compensation for nuclear
damage pursuant to Section 3, MEXT may, if it deems it necessary to ensure fullcompensation of nuclear damage, order the nuclear operator to bring the amount available
for compensation of nuclear damage up to the financial security amount by a given time.
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LAWS REGARDING NUCLEAR THIRD PARTY LIABILITY

3. In the case provided for in the preceding paragraph, the preceding section shall not apply
until the Order is made pursuant to the preceding paragraph (until the time designated by
the Order, where such an Order has been made pursuant to the preceding paragraph).

Section 7-2
Where a nuclear operator wants a nuclear ship to enter into foreign territorial waters,
financial security shall be provided by the conclusion of a contract of liability insurance
for nuclear damage and an indemnity agreement for compensation of nuclear damage orby other financial security, approved by MEXT as an arrangement that is sufficient for thecompensation of nuclear damage, in the amount agreed between the government ofJapan and the government of such foreign country and subscribed by the nuclear
operator of the nuclear ship who is liable for the compensation of nuclear damage.
2. Where a nuclear operator wants a foreign nuclear ship to enter into Japanese territorial
waters, the financial security shall be that approved by MEXT as an arrangement that is
sufficient for the compensation of nuclear damage, in the amount (not less than
JPY 36 billion in respect of nuclear damage caused by any one incident) agreed between thegovernment of Japan and the government of such foreign country and subscribed by the
nuclear operator of the foreign nuclear ship liable for the compensation of nuclear damage.

CHAPTER 2
Contract of liability insurance for nuclear damage
Contract of liability insurance for nuclear damage
Section 8
The contract of liability insurance for nuclear damage (“liability insurance contract”) shall be
the contract under which an insurer undertakes to indemnify a nuclear operator for his loss
arising from compensating nuclear damage, where the nuclear operator becomes liable forsuch nuclear damage, and under which the insurance policy holder has undertaken to pay a
premium to the insurer (this provision applies only to a person who is authorised to engage
in liability insurance activities pursuant to the Insurance Business Act (Act No. 105 of 1995),
such as a risk insurance company under Section 2, paragraph 4 of this same act, or a foreignrisk insurance company under paragraph 9 of the same Section, this being the meaning
given to the term “insurer” used hereafter).

Section 9
Any person suffering from nuclear damage shall, with regard to his claim for such
nuclear damage, have priority over other creditors in respect of compensation from theamount provided by the liability insurance contract.
2. The insured may request the insurer to make the insurance payment only to the extent
of the amount of compensation which the insured has paid or to the extent to which theinsured has acquired the consent of persons suffering from nuclear damage.
3. The right to request insurance payment under the liability insurance contract shall not
be assigned, mortgaged or seized; however, a person who has suffered nuclear damage
may proceed with a seizure with regard to his claim for nuclear damage.

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CHAPTER 3
Indemnity agreements for compensation of nuclear damage
Indemnity agreements for compensation of nuclear damage
Section 10
An indemnity agreement for compensation of nuclear damage (“indemnity agreement”)
shall be the contract by which the Government undertakes to indemnify a nuclear
operator for his loss arising from compensating nuclear damage not covered by theliability insurance contract or other financial security for compensation of nuclear
damage, where the nuclear operator becomes liable for such damage, and under whichthat operator has undertaken to pay an indemnity fee to the Government.
2. Provisions relating to indemnity agreements shall be laid down in another act.

Section 11
The provisions of Section 9 shall apply mutatis mutandis to the indemnity payment under
the indemnity agreement.

CHAPTER 4
Deposit

Section 12. Deposit
A deposit for financial security shall be made in the Legal Affairs Bureau or the District
Legal Affairs Bureau nearest to the main office of the nuclear operator, either in cash or
in securities as provided by MEXT (including electronic securities specified in the Act on
the Transfer of Securities such as shares, company bonds etc. (Act No. 75 of 2001)
Section 278, paragraph 1. This provision applies also to what follows in this chapter).

Section 13. Payment from deposit
Any person suffering nuclear damage may, with regard to his claim for compensation,
receive compensation from the cash or securities deposited by the nuclear operator
pursuant to the preceding section.

Section 14. Withdrawal of deposit
A nuclear operator may, in the following cases, withdraw the cash or securities deposited
pursuant to Section 12 with the approval of MEXT where:(i)the nuclear damage has been compensated;(ii)

financial security other than the deposit has been provided;(iii) reactor operation etc. has ceased.
2. When MEXT grants an approval under the preceding sub-paragraphs (ii) or (iii), it may,
to the extent that it deems it necessary to ensure full compensation of nuclear damage,designate the time when the nuclear operator may withdraw cash or securities, as well as
the amount of such withdrawal.

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Section 15. Specifications by Orders
Provisions regarding deposits other than those provided in this chapter shall be promulgated by Orders of MEXT and the Ministry of Justice.

Part IV
Measures taken by the State
Section 16
Where nuclear damage occurs, the Government shall give a nuclear operator (except thenuclear operator of a foreign nuclear ship) such aid as is required for him to compensate
the damage, when the actual amount which he should pay for the nuclear damage
pursuant to Section 3 exceeds the financial security amount and when the Government
deems it necessary in order to attain the objectives of this Act.
2. Aid as provided for in the preceding paragraph shall be given to the extent that theGovernment is authorised to do so by decision of the National Diet.

Section 17
Where the provision for exoneration in Section 3, paragraph 1 applies or where nuclear
damage is deemed to exceed the amount provided under Section 7-2, paragraph 2, theGovernment shall take the necessary measures to relieve victims and to prevent thedamage from spreading.

Part V
Dispute Reconciliation Committee for Nuclear Damage Compensation
Section 18. Dispute Reconciliation Committee for Nuclear Damage Compensation
The Dispute Reconciliation Committee for Nuclear Damage Compensation (“Reconciliation
Committee”) may be established as an organisation attached to MEXT, pursuant to theprovisions laid down by Cabinet Order; this Committee shall be in charge of mediatingreconciliation of any dispute arising from compensation of nuclear damage and of
preparing general instructions to help operators reach a voluntary settlement of suchdisputes.
2. The Reconciliation Committee shall:(i)mediate reconciliation of any dispute arising from compensation of nuclear
damage;(ii)

in the event of a dispute arising from compensation of nuclear damage, draft
guidelines establishing the scale of the nuclear damage and other general
instructions to help operators reach a voluntary settlement of the said dispute;(iii) investigate and assess nuclear damage as necessary for dealing with the matters
mentioned in (i) and (ii) above.
3. Provisions regarding the organisation and operation of the Reconciliation Committee
as well as procedures for a request for, and conduct of, mediation other than those
provided in paragraphs 1 and 2 shall be promulgated by Cabinet Order.

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Part VI
Miscellaneous provisions
Section 19. Presentation of reports and written opinions to the National Diet
Where nuclear damage occurs on a comparatively large scale, the Government must
report to the National Diet as soon as possible on the extent of the damage and on themeasures it has taken pursuant to this Act.
2. When nuclear damage occurs, the Government must present to the National Diet thewritten opinion regarding mitigation, prevention etc. of the damage, which the Atomic
Energy Commission or the Nuclear Safety Commission has submitted to the Prime Minister.

Section 20. Application of Section 10, paragraph 1 and Section 16, paragraph 1
The provisions of Section 10, paragraph 1 and Section 16, paragraph 1 shall apply to nuclear
damage arising from reactor operation etc. in respect of which the activity, falling under any
one of sub-paragraphs mentioned in Section 2, paragraph 1, has begun by 31 December 2019.

Section 21. Submission of reports and inspections
MEXT may, if it deems it necessary to ensure execution of the provisions of Section 6,
require a nuclear operator to present any necessary reports or allow his officials to enter
the latter’s office, installation or site or his nuclear ship, to inspect his books, documents
and other necessary objects, or to ask questions of the persons concerned.
2. When an official enters premises pursuant to the preceding paragraph, he shall carryan identification card and present it if requested by the persons concerned.
3. The right to conduct an inspection pursuant to paragraph 1 shall not be construed as aright to investigate a criminal offence.

Section 22. Consultations with the Minister for the Economy, International Trade andIndustry (METI) or with the Minister for Regional Development, Infrastructure, Transport
and Tourism (MLIT)
When MEXT takes action pursuant to Section 7, paragraph 1 or Section 7-2, paragraphs 1 or
2, or makes Orders pursuant to Section 7, paragraph 2, it shall hold prior consultations with
the Minister for the Economy, International Trade and Industry (METI) in cases concerning
reactors for the production of electricity, the production, reprocessing or storage of spent
nuclear fuel or the disposal of waste consisting of nuclear fuel or materials contaminatedby nuclear fuel, or the Minister for Regional Development, Infrastructure, Transport andTourism (MLIT) in cases concerning reactors installed in vessels.

Section 23. Exclusion of application to the state
The provisions of Part III, Section 16 and Part VII shall not apply to the state.

Part VII
Penal provisions
Section 24
A person who breaches the provisions of Section 6 shall be punishable by imprisonmentof not more than one year, or by a fine not exceeding JPY 1 000 000, or both.

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Section 25
A person shall be punishable by a fine not exceeding JPY 1 000 000 for:(i)

failing to present a report pursuant to Section 21, paragraph 1, or presenting a
false report;(ii)

refusing access to inspectors or interrupting or evading them, or refusing toanswer a question pursuant to Section 21, paragraph 1 or giving a false answer tosuch a question.

Section 26
When the representative of a legal entity, or the agent or other employee of a legal entity
or of a natural person commits any one of the offences referred to in Sections 24 and 25
in connection with the business of the legal entity or the natural person, the legal entity
or the natural person shall, in addition to punishment of the actual offender, bepunishable by a fine as provided in the said sections.

Supplementary provisions (omitted)
Date of entry into force
Section 1
This Act shall enter into force on the date laid down by Cabinet Order and at the latest,nine months after the date of its promulgation.
*

Section 3
The penal provisions relating to acts committed before the entry into force of this Act or
to acts committed before the provisions laid down in Section 26, paragraph 1 of theCompensation Act cease to apply shall, before amendment by the provisions of this Act
and after its entry into force (this concerns the part relating to Section 23, paragraph 2 (9)of the said Act), remain applicable.

Section 4. Adjustment of indemnities pursuant to other legislation
In the circumstances referred to in the preceding section, when the employees of a nuclear
operator suffer nuclear damage and the nuclear operator is liable for such damage
pursuant to the said section (designated simply, in the rest of this section, as “nuclear
operator”), such employees or the families of the deceased shall receive an indemnity as
laid down by Cabinet Order in the form of an indemnity under the provisions of the
Insurance Act for the Compensation of Work Accidents (Act No. 50 of 1947) and equivalent
to the compensation of such damage, or any other indemnity governed by other provisionsof the Act (hereinafter referred to in this section as “compensation for work accidents”). In
such cases, any compensation of nuclear damage paid to employees or the families of thedeceased shall be temporarily subject to the following provisions:(i)the nuclear operator shall be entitled not to pay indemnification, and that during
a period which may extend to the extinction of the right of employees or families
to receive compensation for work accidents, up to an amount equal to the valueof the said compensation for work accidents calculated at the legal rate in force
between the time when the damage occurred and the date on which thecompensation for work accidents was paid;___________________________*

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Note by the NEA: No Section 2 appeared in the original text.

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where the circumstances of the preceding paragraph apply, when compensation
for work accidents has been paid, the nuclear operator shall be exonerated fromhis indemnification obligation up to an amount equal to the value of the saidcompensation for work accidents calculated at the legal rate in force between
the time when the damage occurred and the date on which the compensation
for work accidents was paid.

2. Where the employees of a nuclear operator have suffered nuclear damage and suchdamage was caused intentionally by a third party, the nuclear operator who has paidcompensation for work accidents to the employees or families of the deceased shallretain a right of recourse against such third party.

Supplementary provisions (Act No. 19 of 17 April 2009)This Act shall enter into force on 1 January 2010.

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Act on Indemnity Agreements for Compensation of Nuclear Damage(Act No. 148 of 1961)
As amended by Act No. 19 of 17 April 2009

Section 1. Definitions
As used in this Act, “reactor operation etc.” means reactor operation etc. as provided in
Section 2, paragraph 1 of the Act on Compensation for Nuclear Damage (Act No. 147, 1961,“Compensation Act”), “nuclear damage” means nuclear damage as provided in Section 2,
paragraph 2 of the Compensation Act, “nuclear operator” means nuclear operator as
provided in Section 2, paragraph 3 of the Compensation Act (except the nuclear operator
as provided in Section 2, paragraph 3, sub-paragraph (i) 2), “nuclear ship” means nuclear
ship as provided in Section 2, paragraph 4 of the Compensation Act, “financial security”
means financial security as provided in Section 6 of the Compensation Act, “financial
security amount” means the financial security amount as provided in Section 7,
paragraph 1 of the Compensation Act, and “liability insurance contract” means liability
insurance contract as provided in Section 8 of the Compensation Act.

Section 2. Indemnity agreements for compensation of nuclear damage
The Government may conclude an agreement with a nuclear operator under which theGovernment undertakes to indemnify the nuclear operator for his loss arising fromcompensating nuclear damage not covered by a liability insurance contract or other meansfor compensating nuclear damage in case the nuclear operator becomes liable, and underwhich the nuclear operator undertakes to pay an indemnity fee to the Government.

Section 3. Indemnified loss
The loss which the Government indemnifies under the agreement as provided in thepreceding Section (“indemnity agreement”) shall be the loss suffered by the nuclear
operator as a result of compensating nuclear damage in the following cases:(i)

nuclear damage caused by an earthquake or volcanic eruption;(ii)

nuclear damage caused by normal operation (which means reactor operation etc.
performed under the conditions provided by the Cabinet Order); 1(iii) nuclear damage which can be covered by a liability insurance contract, but for which
the persons suffering therefrom have not claimed compensation within a period often years from the day of the occurrence of the event (with regard to the nuclear
damage appearing in such period, this shall apply only to the case where there is ajustifiable reason for their failure to claim compensation within such period);(iv) nuclear damage which occurs due to the visit of a nuclear ship in foreign
territorial waters, but which cannot be covered by the financial security or otherarrangements for compensation of nuclear damage as provided in Section 7,

1.

Note by the NEA: Cabinet Order No. 45 of 6 March 1962 is referred to throughout the Act.

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paragraph 1 of the Compensation Act (limited to the financial security approved
as a part of the financial security provided for in Section 7-2, paragraph 1 of theCompensation Act);(v)

nuclear damage as provided in the Cabinet Order other than that mentioned in
the preceding sub-paragraphs.

Section 4. Indemnity agreement amountThe contracted amount concerning an indemnity agreement for the nuclear damage
mentioned in the preceding Section sub-paragraphs (i) to (iii) and (v) (“indemnity
agreement amount”) shall be the amount equivalent to the amount of the financial
security as provided in Section 7, paragraph 1 of the Compensation Act (where thefinancial security includes an arrangement other than the conclusion of a liability
insurance contract and an indemnity agreement, this amount shall be reduced by theamount available for compensation of nuclear damage by means of such otherarrangement; where an indemnity agreement other than the indemnity agreement
concerned has been concluded, this amount shall be reduced by the amount available forcompensation of nuclear damage by means of such other indemnity agreement).
2. The indemnity agreement amount for the nuclear damage mentioned in Section 3,
sub-paragraph (iv) shall be the amount equivalent to the amount of the financial security
as provided in Section 7-2, paragraph 1 of the Compensation Act (where the financial
security and other arrangements for compensation of nuclear damage as provided in
Section 7, paragraph 1 of the Compensation Act are approved as a part of the financial
security provided for in Section 7-2, paragraph 1 of the Compensation Act, this amountshall be reduced by the amount available for compensation for nuclear damage by meansof such other financial security).

Section 5. Period of indemnity agreement
The period of the indemnity agreement concerning the nuclear damage mentioned in
Section 3, sub-paragraphs (i) to (iii) and (v) shall run from the time of its conclusion to thetime when the reactor operation etc. has ceased.
2. The period of the indemnity agreement concerning the nuclear damage mentioned in
Section 3, sub-paragraph (iv) shall run from the time when the nuclear ship leaves
Japanese territorial waters to the time when it arrives back in Japanese territorial waters.

Section 6. Indemnity fee
The annual amount of the indemnity fee shall be equivalent to the amount computed bymultiplying the indemnity agreement amount by the rate as provided in the Cabinet
Order, taking into account the probability of the occurrence of damage covered by theindemnity agreement and the expenditures of the Government in relation to theindemnity agreement and other conditions concerned.

Section 7. Payment under the indemnity agreement
The Government shall, under an indemnity agreement, indemnify up to the indemnity
agreement amount for the loss suffered by the nuclear operator as a result ofcompensating nuclear damage caused by the reactor operation etc. during the period
covered by the indemnity agreement concerned.
2. Where the Government indemnifies the loss suffered by a nuclear operator as a resultof compensating the nuclear damage mentioned in Section 3, sub-paragraphs (i) to (iii)and (v), if there is any amount to be covered by the liability insurance contract, the total
sum paid from the indemnity agreement shall not exceed the amount computed bydeducting the amount paid from the liability insurance contract from the financial

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security amount (or the amount computed by deducting the amount paid from theliability insurance contract from the financial security amount further reduced by theamount available for compensation of nuclear damage by means of other arrangements,
which the financial security concerned includes, excepting the liability insurance
contract and the indemnity agreement).

Section 8. Financial limit of indemnity agreements
The Government shall conclude indemnity agreements to the extent that the total sum of
the indemnity agreement amount does not exceed the budget amount approved by the
National Diet for each year.

Section 9. Duty to notify
When concluding an indemnity agreement, a nuclear operator shall, pursuant to theprovisions of the Cabinet Order, notify the Government of important facts regarding
reactor operation etc. The same shall apply where there is a change in the notified facts.

Section 10. Specifications by Cabinet Order
The conclusion of an indemnity agreement and the date of payment of the indemnity fee,the date of payment under the indemnity agreement and other necessary mattersregarding the payment of the indemnity fee and payment under the indemnity
agreement shall be regulated by Cabinet Order.

Section 11. Prescription
The right to receive payment from an indemnity agreement shall be extinguished three
years after the nuclear operator has paid compensation.

Section 12. Subrogation, etc.
Where the Government has indemnified under an indemnity agreement, if the nuclear
operator who is a party to the indemnity agreement has a right of recourse against athird party, the Government shall take over that right up to the smaller of the two
amounts following:(i)the amount indemnified by the Government; or(ii)

the amount of the said right of recourse (where the amount mentioned in thepreceding paragraph does not cover the amount of the loss giving rise toindemnification under the said indemnity agreement, the said amount of theright of recourse shall be reduced by the amount not covered).

2. Where the nuclear operator who is party to the indemnity agreement has received apayment by virtue of his right of recourse, the Government shall be exonerated from its
indemnification obligation up to the smaller of the two amounts following:(i)the amount of the payment the said nuclear operator has received by virtue of
his right of recourse; or(ii)

the amount paid by the Government under its indemnification obligation laid
down in Section 7 relating to the loss giving rise to indemnification under thesaid indemnity agreement (where the amount mentioned in the preceding
paragraph does not cover the amount of the loss giving rise to indemnification,
the said amount paid by the Government pursuant to its indemnification
obligation shall be reduced by the amount not covered).

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Section 13. Reimbursement of the sum paid under an indemnity agreement
Where the Government has indemnified the loss suffered by a nuclear operator as aresult of compensating the nuclear damage mentioned in the following sub-paragraphs,
the Government shall require the nuclear operator to reimburse the amounts received,
pursuant to the provisions of the Cabinet Order, for the compensation of:(i)

nuclear damage arising from a fact which the nuclear operator who is a party to
the indemnity agreement has failed to notify pursuant to Section 9, or which hehas notified falsely;(ii)

nuclear damage caused by the reactor operation etc. during the period from the
day when the nuclear operator received from the Government notice ofcancellation of the indemnity agreement pursuant to Section 15, to the day prior
to the day when the cancellation comes into force.

Cancellation of an indemnity agreement
Section 14
Where the nuclear operator who is a party to the indemnity agreement has provided
financial security other than that which was taken into account at the time of theconclusion of the indemnity agreement concerned, the Government may accept an offer
for the cancellation of the indemnity agreement, or may cancel it itself.
2. Cancellation of the indemnity agreement as provided in the preceding paragraph shalltake effect immediately.

Section 15
The Government may cancel the indemnity agreement where the nuclear operator who
is a party to the indemnity agreement has committed one of the following offences:(i)

breached the provisions of Section 6 of the Compensation Act;(ii)

failed to pay the indemnity fee;(iii) failed to notify pursuant to Section 9 or notified falsely;(iv) failed to take the measures pursuant to Section 21-2, Section 35, Section 43-18,
Section 48, Section 51-16, Section 57, paragraph 1 or 2, Section 57-4, Section 57-5,
Section 58, paragraph 1, or Section 59, paragraph 1 of the Act for the Regulationof Nuclear Source Material, Nuclear Fuel and Reactors (Act No. 166 of 1957;“Regulation Act”);(v)

breached the provisions of the indemnity agreement laid down in accordancewith the Cabinet Order.

2. Cancellation of an indemnity agreement pursuant to the preceding paragraph shalltake effect upon a lapse of 90 days from the day when the nuclear operator, who is aparty to the indemnity agreement, has received notice of the cancellation.

Section 16. Fines
Where the nuclear operator, who is a party to the indemnity agreement, breaches aprovision of the indemnity agreement laid down in accordance with the Cabinet Order,
the Government may impose a fine pursuant to the said Order.

Section 17. Administrative aspects
The interests of the Government as provided in this Act shall be taken in charge by the
Minister of Education, Culture, Sports, Science and Technology (MEXT).

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2. The Minister of Education, Culture, Sports, Science and Technology (MEXT) shall, on
the occasion of the cancellation of an indemnity agreement as provided in Section 15, ask
the prior opinion of the Minister of Economy, Trade and Industry (METI) in cases
concerning the operation of reactors for the generation of electricity (which means
reactors as defined in Section 3, paragraph 4 of the Basic Atomic Energy Act, Act No. 186
of 1955, the term “reactor” being hereinafter given this meaning), the production (asdefined in Section 2 paragraph, 7 of the Regulation Act), the reprocessing (as defined in
Section 2, paragraph 8 of the Regulation Act), the storage of spent nuclear fuel (as definedin Section 43, paragraph 4 (1) of the Regulation Act) or the disposal of waste consisting of
nuclear fuel or materials contaminated by nuclear fuel (meaning the undergrounddisposal of waste and waste management as defined in Section 51, paragraph 2 (1) of theRegulation Act), or the prior opinion of the Minister of Land, Infrastructure, Transport andTourism (MLIT) in cases related to reactors installed in vessels.

Section 18. Mandate
The Government may, as laid down by Order, grant a mandate for the performance of someof its operations under an indemnity agreement. The authorised agent may, in particular,
be a risk insurance company under Section 2, paragraph 4 of the Insurance Act (Act No. 105
of 1995), or a foreign risk insurance company under paragraph 9 of the said Section (thisprovision applies solely to persons authorised to conduct liability insurance activities).
2. When a mandate is granted under the preceding paragraph, the Minister of
Education, Culture, Sport, Science and Technology (MEXT) must communicate theidentity of the authorised agent and any other conditions required by a Ministerial
Order issued by his department.

Supplementary provisions
This Act (No. 19 of 17 April 2009) shall enter into force on 1 January 2010.

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Order for the Execution of the Act on Compensation for Nuclear Damage(Cabinet Order No. 44 of 6 March 1962)
As amended by Cabinet Order No. 201 of 7 August 2009

The Cabinet has enacted this Cabinet Order pursuant to the provisions of Section 2,
paragraph 1 and Section 7, paragraph 1 of the Act on Compensation for Nuclear Damage(Act No. 147 of 1961).

Section 1. Reactor operation, etc.
The activities provided for in the Cabinet Order referred to in Section 2, paragraph 1 of the
Act on Compensation for Nuclear Damage (“Compensation Act”) shall be the following(each of the activities mentioned in paragraphs (i) to (v) includes the incidental operationsof transport, storage and disposal of waste referred to in sub-paragraphs a), b) and c)
performed in the installations or on the sites of the said activities or, in the case of reactors
installed in nuclear vessels, such incidental operations performed on board the vessel. This
provision also applies subsequently):(i)reactor operation;(ii)

the production of the following nuclear fuels:(a)uranium or its compounds in which the ratio of uranium 235 to uranium 235
and uranium 238 is higher than that of natural uranium but lower than fivehundredths, and any material which contains one or more of these nuclear
materials, whenever these contain 2 000 grams or more by weight of uranium
235;

(b)

uranium or its compounds in which the ratio of uranium 235 to uranium 235
and uranium 238 is higher than five-hundredths, and any material whichcontains one or more of these nuclear materials, whenever these contain
800 grams or more by weight of uranium 235;(c)

plutonium or its compounds, and any material which contains one or more ofthese nuclear materials, whenever these contain 500 grams or more by weightof plutonium;(iii)

reprocessing;(iv)

the use of the nuclear fuels mentioned in sub-paragraphs (ii) (a), (b) and (c);(iv-2) the storage of spent fuel;(v)

underground disposal and management of waste as provided in Section 51-2,
paragraph 1, sub-paragraph (iii) of the Act for the Regulation of Nuclear Source
Material, Nuclear Fuel and Reactors (Act No. 166 of 1957; “Regulation Act”)(hereinafter referred to as “the underground disposal of waste” and “waste
management”);(vi)

the transport, storage and disposal of waste consisting of the following
materials, undertaken outside installations or sites and in the context of eachof the activities mentioned in the sub-paragraphs above:

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spent fuel, as provided in Section 2, paragraph 8 of the Regulation Act(“spent fuel”);(c)materials contaminated by nuclear fuel (including nuclear fission products;
the same applies to the following provisions).

Section 2. Amount of financial security
The cases of reactor operation etc. and their corresponding amount as provided in the
Cabinet Order referred to in Section 7, paragraph 1 of the Compensation Act are set out inthe following table. However, when reactor operation etc. being performed at one and thesame installation or site (or vessel in the case of reactors installed in a vessel, a provision
which also applies to heading (i) of the table) involves activities coming under two or
more of headings (i) to (xvii) of the table, the amount of financial security for the overall
reactor operation etc. shall be the highest individual amount required under the relevant
headings of the table.
Operation of a reactor with a maximum thermal rating ofless than 10 000 kWth (including any transport, storage or
disposal of materials referred to in Section 1, paragraph 6,
sub-paragraphs (a), (b) or (c) (hereinafter referred to as“nuclear fuel etc.”) performed within the installation or on
the site and incidental to operation of the reactor inquestion, to the exclusion of the operations referred to under
any of the headings of the table (ii) or (iii) below).

JPY 120 billion(ii) Transport, storage and disposal of nuclear fuel etc.,
performed within the installation or on the site andincidental to operation of the reactor in question, as definedin heading (i) of the table (concerns solely the shutdown of
the said reactor as well as operations subsequent to removalof the nuclear fuel etc. from the reactor core. This provisionapplies also to headings (iii) and (v) of the table, to the
exclusion of operations referred to under heading (iii) of thetable).

JPY 24 billion(iii) Transport, storage and disposal of nuclear fuel etc., asreferred to in Section 1, sub-paragraph 2(a), or of elements
such as those referred to in paragraph 6(c) of the same
section, performed within the installation or on the site andincidental to operation of the reactor in question, as defined
under heading (i) of the table.

JPY 4 billion(iv) Operation of a reactor with a maximum thermal rating of
more than 100 kWth, without however exceeding
10 000 kWth (including any transport, storage or disposal of
nuclear wastes etc., performed within the installation or on
the site and incidental to operation of the reactor inquestion, to the exclusion of the operations referred to underheading (v) of the table).

JPY 24 billion(v) Transport, storage and disposal of nuclear fuel etc., asreferred to in Section 1, sub-paragraph 2(a) or of elements as
referred to in sub-paragraph 6(c) of the same Section,
performed within the installation or on the site andincidental to operation of the reactor in question, as defined
under heading (iv) of the table.

JPY 4 billion

(i)

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Operation of a reactor with a maximum thermal ratingof 100 kWth (including any transport, storage or disposalof nuclear fuel etc., performed within the installation or
on the site and incidental to operation of the reactor inquestion).

JPY 4 billion(vii)

Production of nuclear fuel as referred to in Section 1,
sub-paragraph 2(a) (including any transport, storage or
disposal of nuclear fuel etc., performed within the
installation or on the site and incidental to the
production of the reactor in question).

JPY 4 billion(viii) Production of nuclear fuel as referred to in Section 1,
sub-paragraphs 2(b) and 2(c) (including any transport,
storage or disposal of nuclear waste etc., performed
within the installation or on the site and incidental tothe production in question).

JPY 24 billion(ix)

Reprocessing (including any transport, storage andwaste disposal of nuclear fuel etc., performed within the
installation or on the site and incidental to thereprocessing in question).

JPY 120 billion(x)

Use of nuclear fuel etc., as referred to in Section 1, subparagraph 2(a) (including any transport, storage or
disposal of nuclear fuel, etc., performed within the
installation or on the site and incidental to the use of thenuclear fuel in question, to the exclusion of theoperations referred to under headings (i), (iv), (vi), (vii)and (ix) of the table).

JPY 4 billion(xi)

Use of the nuclear fuel etc., as referred to in Section 1,
sub-paragraphs 2 (b) or (c) (including any transport,
storage and disposal of nuclear fuel etc., performed
within the installation or on the site and incidental tothe use of the nuclear fuel in question. This provisionapplies also to heading (xii) below, and excludes theoperations referred to under headings (i), (iv), (vi), (viii)and (ix) of the table).

JPY 24 billion(xii)

Transport, storage and disposal of nuclear fuel etc., asdefined in Section 1, sub-paragraph 2(a), or of elements
as defined in sub-paragraph 6(c) of the same Section,
performed within the installation or on the site andincidental to the use of nuclear fuel as defined underheading (xi), above.

JPY 4 billion(xiii) Storage of spent fuel (including any transport, storage or
disposal of spent fuel, performed on the site andincidental to the storage of the spent fuel in question, tothe exclusion of the operations referred to underheadings (i), (ii), (iv), (vi) and (ix) to (xi) of the table).

JPY 24 billion(xiv) Underground disposal of waste (including any transport
or disposal of the waste, performed on the site andincidental to the underground disposal of the waste inquestion consisting of nuclear fuel, etc., to the exclusionof the operations referred to under each of the precedingheadings and under heading (xv) of the table).

JPY 4 billion

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Underground disposal of the waste consisting of thevitrified materials obtained from the liquid effluents
remaining after separating the nuclear fuel and otheruseful materials from spent fuel solutions, as defined in
Section 1, sub-paragraph 6(b) (including any transport ordisposal of the waste, performed on the site andincidental to the underground disposal of the waste inquestion consisting of nuclear fuel etc., to the exclusionof the operations referred to under heading (ix) of thetable).

JPY 24 billion(xvi) Waste management (including any transport or waste
disposal of waste consisting of nuclear fuel etc., on thesite and incidental to the waste management inquestion, to the exclusion of the operations referred tounder each of the preceding headings and heading (xvii)
of the table).

JPY 4 billion(xvii) Management of the waste consisting of the vitrified
materials obtained from the liquid effluents remaining
after separating the nuclear fuel and other usefulmaterials from spent fuel solutions, as defined in
Section 1, sub-paragraph 6(b) (including any transport ordisposal of the waste, performed on the site andincidental to the underground disposal of the waste inquestion, consisting of nuclear fuel, etc., to the exclusionof the operations referred to under headings (ix) and (xv)of the table).

JPY 24 billion(xviii) Transport of nuclear fuel etc., incidental to the reactor
operation, production, reprocessing, or use of thenuclear fuel, the storage and underground disposal of
spent fuel, or waste management (to the exclusion of
the operations referred to under any one of thepreceding headings, under heading (xix), following, andheading (xxii) of the table).

JPY 4 billion(xix) Transport of nuclear fuel material, etc., as referred to in
Section 1, sub-paragraphs 2(b) and (c) incidental to thereactor operation, production, reprocessing or use of
nuclear fuel, the storage and underground disposal of
spent fuel, or the management of waste or spent fuel, as
defined in the same Section, sub-paragraph 6(b), and of
vitrified materials obtained from the liquid effluents
remaining after separating nuclear fuel and other usefulmaterials from spent fuel solutions, as defined in thesame Section 1, sub-paragraph 6(b) (excluding theoperations referred to under any of headings (i), (ii), (iv),(vi), (viii) to (xi), (xiii), (xv) or (xvii) of the table).

JPY 24 billion(xx)

JPY 4 billion

(xv)

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Storage of nuclear fuel etc., incidental to the reactor
operation, production, reprocessing or use of nuclear
fuel and the storage of spent fuel (to the exclusion of theoperations referred to under any of headings (i) to (xiii)
or the following heading (xxii) of the table).

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LAWS REGARDING NUCLEAR THIRD PARTY LIABILITY(xxi) Storage of nuclear fuel etc., as referred to in Section 1,
sub-paragraphs 2(b) or (c), incidental to the reactor
operation, production, reprocessing or use of nuclear
fuel or the storage of spent fuel, as defined in the same
Section, sub-paragraph 6(b) as well as the vitrified
materials obtained from the liquid effluents remaining
after separating nuclear fuel and other useful materials
from spent fuel solutions, as defined in the same
Section 1, sub-paragraph 6(b) (to the exclusion of theoperations referred to under any of headings (i), (ii), (iv),(vi), (viii) to (xi), (xiii) of the table).

JPY 24 billion(xxii) Disposal of waste consisting of nuclear fuel etc., incidental to the reactor operation, production, reprocessing
or use of nuclear fuel, the storage and undergrounddisposal of spent fuel or waste management (including
any transport of nuclear fuel, etc., incidental to the disposal of the waste in question, and to the exclusion of
the operations referred to under any of headings (i) to(xvii) of the table).

JPY 4 billion

Section 3. Compensation for work accidents
Compensation for work accidents, provided for by Cabinet Order pursuant to Section 4,
paragraph 1 of the supplementary provisions of the Act, shall be as follows:
1. Indemnities as defined by the Act on Compensation for Work Accidents of Government
Civil Servants (Act No. 191 of 1951);
2. Indemnities as defined by the Act on the Insurance of Seamen (Act No. 73 of 1939) andsubject to professional conditions.

Supplementary provisions (omitted)
1. This Cabinet Order shall enter into force as from the date of the entry into force of the
Act (15 March 1962).

Supplementary provisions (Order No. 201 of 7 August 2009)This Cabinet Order shall enter into force on 1 January 2010.

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Order for the Execution of the Act on Indemnity Agreements forCompensation of Nuclear Damage(Cabinet Order No. 45 of 1962)
As amended by Cabinet Order No. 201 of 7 August 2009

The Cabinet has enacted this Cabinet Order pursuant to the provisions of the Act on
Indemnity Agreements for Compensation of Nuclear Damage (Act No. 148 of 1961).

Indemnified loss
Section 1
The conditions laid down by Cabinet Order as defined in Section 3, paragraph ii) of the
Act on Indemnity Agreements for Compensation of Nuclear Damage (hereinafter referred
to as “the Act”) must meet the requirements laid down in each of the following
paragraphs:(i)

The event triggering the occurrence of nuclear damage cannot be a breach of theSections mentioned below of the Act for the Regulation of Nuclear Source
Material, Nuclear Fuel and Reactors (Act No. 166 of 1957): Sections 21-2, 22(4), 226(2) in application of Section 12-2(4), 35, 37 (4), 43-2(2) in application of Section
12-2(4), 43-18, 43-20(4), 43-25(2) in application of Section 12-2(4), 48, 50(4), 50-3(2)in application of Section 12-2(4), 51-16, 51-18(4), 51-23(2) in application ofSection 12-2(4), 56-3(4), 57(1) or 57(2), 57-2(2) in application of Section 12-2(4), 57-4,
57-5, 58(1), 59(1) and 60(1) or 60(2).

(ii)

The event triggering the occurrence of nuclear damage cannot be damage to an
installation for reactor operation etc.

(iii) The event triggering the occurrence of nuclear damage cannot be a natural
cataclysm or the act of a third party.

Section 2
Nuclear damage, as defined in Section 3, paragraph 5 of the Act and laid down by Cabinet
Order, shall be that resulting from a tidal wave.

Section 3. Indemnification rate
The rate of indemnification, as defined in Section 6 of the Act and laid down by cabinet
order (“indemnification rate”) shall be 3 for 10 000 (1.5 for 10 000 for indemnity agreements
relating to the operation etc. of a reactor in universities and technical colleges).
2. Where, at the time the indemnity fee is paid, the amount available for indemnifying
nuclear damage under an indemnity agreement is insufficient to cover the amount laid
down by the said agreement, the indemnification rate under the said agreement shall be
determined, notwithstanding the provisions of the previous paragraph, by dividing the said
amount available by the amount laid down in the indemnity agreement, and multiplying
the value obtained by the indemnification rate as defined in the previous paragraph.

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Section 4. Duty to notify
In accordance with the provisions of Section 9 of the Act, a nuclear operator must notify
the Government of the following:(i)

Indemnity agreement relating to reactor operation:(a)what the nuclear reactor is being used for;(b)type, thermal rating and number of nuclear reactors;(c)name and address of the installations or sites equipped with a nuclear reactor(in the case of a vessel equipped with a nuclear reactor, the place it was built
and the main place of business of the shipbuilder);(d)location, structure and equipment of the building housing the nuclear reactor;(e)dates of the beginning and planned end of operating activities of the nuclear
reactor;(f)

types and quantity of the nuclear materials to be used as fuel in the nuclear
reactor;(g)

method of disposing of spent fuel;(h) information about the liability insurance contract.
(ii)

Indemnity agreement relating to production:(a)name and address of the installations or sites equipped with a production
plant;(b)location, structure, equipment and production procedures of the production
plants;(c)dates of the beginning and planned end of production activities;(d)types and quantity of the nuclear materials to be produced;(e)

information about the liability insurance contract.

(iii) Indemnity agreement relating to reprocessing:(a)name and address of the installations or sites equipped with a reprocessing
facility;(b)location, structure, equipment
reprocessing facilities;(c)dates of the beginning and planned end of reprocessing activities;(d)types and quantity of the spent fuel to be reprocessed;(e)

information about the liability insurance contract.

andreprocessing

procedures

of

the

(iv) Indemnity agreement relating to the use of nuclear fuel:

84

(a)

purposes and methods of use;(b)places of use;(c)location, structure and equipment used in installations for the use, storage
and disposal of waste;(d)dates of the beginning and planned end of use activities;(e)types and quantity of nuclear fuel to be used;(f)method of disposing of the spent nuclear fuel;(g)information about the liability insurance contract.

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LAWS REGARDING NUCLEAR THIRD PARTY LIABILITY(v)

Indemnity agreement relating to the storage of spent fuel:(a)name and address of the sites equipped with a storage facility for spent fuel;(b)location, structure, equipment and procedures used in the storage facilities
for spent fuel;(c)dates of the beginning and planned end of the nuclear fuel storage activities;(d)types and quantity of spent fuel to be stored;(e)method of transferring spent fuel subsequent to storage;(f)information about the liability insurance contract.

(vi) Indemnity agreement relating to the underground disposal or management ofwaste:(a)name and address of the sites equipped with facilities for the undergrounddisposal or management of waste;(b)

location, structure, equipment and procedures for disposal of the facilities forthe underground disposal or management of waste;(c)

dates of the beginning and planned end of the activities for the undergrounddisposal or management of waste;(d)types and quantity of nuclear fuel or materials contaminated by nuclear fuel(including nuclear fission products, a provision which applies also to theremainder of this section) to be disposed of by underground burial or waste
management;(e)

information about the liability insurance contract.

(vii) Indemnity agreement relating to transport in accordance with the provisions ofSection 1, paragraph 6 of the Order for the Execution of the Act on Compensation
for Nuclear Damage (Cabinet Order No. 44 of 1962):(a)itinerary and method of transport;(b)dates of the beginning and planned end of the transport activities;(c)types and quantity of nuclear fuel or materials contaminated by nuclear fuelto be transported;(d)information about the liability insurance contract.

(viii) Indemnity agreement relating to storage in accordance with the provisions ofSection 1, paragraph 6 of the Order for the Execution of the Act on Compensation
for Nuclear Damage:(a)places and methods of storage;(b)dates of the beginning and planned end of the storage activities;(c)types and quantity of nuclear fuel or materials contaminated by nuclear fuelto be stored;(d)information about the liability insurance contract.

(ix) Indemnity agreement relating to the disposal of waste in accordance with theprovisions of Section 1, paragraph 6 of the Order for the Execution of the Act onCompensation for Nuclear Damage:(a)places and methods of waste disposal;(b)dates of the beginning and planned end of the waste disposal activities;(c)itinerary and method of transport of the waste constituted by nuclear fuel ormaterials contaminated by nuclear fuel, as well as the dates of the beginningand planned end of such transport activities;

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LAWS REGARDING NUCLEAR THIRD PARTY LIABILITY(d)types and quantity of waste constituted by nuclear fuel or materials
contaminated by nuclear fuel to be disposed of;(e)information about the liability insurance contract.

Section 5. Payment of the indemnity fee
The nuclear operator must pay the Government an indemnity fee on the date of theconclusion of an indemnity agreement and, subsequently, on each anniversary thereof(when, depending on the year, there is no anniversary date, payment must be made theday before). The indemnity fee shall be paid for a length of agreement of one year fromthe day concerned (when the length of the indemnity agreement is less than one year,
the fee is payable for the duration in question).

Section 6. Payment under the indemnity agreement
When a nuclear operator requests indemnification, the Minister of Education, Culture,
Sports, Science and Technology (MEXT) must pay the indemnity within 30 days of theformulation of the request. This provision does not, however, apply if there areunpredictable and inevitable circumstances.

Reimbursement of the sum paid under an indemnity agreement
Section 7
In accordance with the provisions of Section 13, MEXT shall have one year as from thedate of payment of an indemnity within which to require reimbursement of a sum
equivalent to the said indemnity.

Section 8[Abolished]

Section 9. Cancellation of an indemnity agreement
The provisions referred to in Section 15, paragraph 1, sub-paragraph v) of the Act andestablished by Cabinet Order concern the breaching of the requirement to take thenecessary steps to prevent or mitigate nuclear damage when such damage occurs or is
likely to occur.

Fines
Section 10
The provisions referred to in Section 16 of the Act and established by Cabinet Orderprovide the following requirements in the event of a breach:(i)when nuclear damage occurs or is likely to occur, take all the steps necessary to
prevent or mitigate it;(ii)

obtain the prior approval of MEXT when the operator intends to admit liability,in whole or in part, for the damage;(iii) when nuclear damage occurs, submit without delay an opinion to MEXT toinform him of the date, time and place of the accident and report on the extent
of the damage;(iv) when a nuclear operator brings proceedings or is the subject of proceedings,
submit without delay an opinion to MEXT informing him of the facts.

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Section 11
Under Section 16 of the Act, MEXT may impose a fine up to the amounts mentioned in
the following paragraphs and as from the date on which the nuclear operator received
indemnification:(i)an amount equivalent to 1/10th of the indemnification received, in cases of abreach of the provisions mentioned in paragraphs i) and ii) of the preceding
Section on the indemnity agreement requirements;(ii)

an amount of JPY 100 000, in cases of a breach of the provisions mentioned inparagraphs iii) and iv) of the preceding Section on indemnity agreement
requirements.

Section 12. Mandate
The operations for which the Government may grant a mandate, in accordance with theprovisions of Section 18, paragraph 1 of the Act, are as follows:(i)

reception of requests for the payment of an indemnity;(ii)

investigations into the amount of loss giving rise to an indemnity;(iii) in addition to the cases referred to in the two preceding sub-paragraphs, any
operation relating to the payment of indemnities and required by Ministerial
Order adopted by MEXT.
2. In addition to the cases mentioned in the preceding paragraph, the relevant provisions
relating to mandates under Section 18, paragraph 1 of the Act, shall be laid down by
Ministerial Order taken by MEXT.

Supplementary provisions
This Cabinet Order shall enter into force as from the date of the entry into force of the
Act (15 March 1962).

Supplementary provision (Order No. 201 of 7 August 2009)This Cabinet Order shall enter into force on 1 January 2010.

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Figure 4: Outline of the nuclear damage compensation system in Japan
4.1: Outline of the applicable acts regarding nuclear damage compensation
Act on Compensation for Nuclear Damage (Act No.147 of 1961)• A nuclear operator engaged in the reactor operation, etc. is liable for nuclear damages
caused by its reactor operation, etc. (no-fault liability, channelling of liability, unlimited
liability).
Note: “Nuclear damage” means any damage caused by the effect of the process of atomic
fission of nuclear fuel material, or the effect or toxic effect of the radiation of nuclear fuelmaterial, etc.

• Nuclear operators shall have and maintain financial security for compensation
for nuclear damage (“financial security”).

=

a contract of liability insurance for nuclear damage ( “ private liability insurance ” ).
an indemnity agreement for compensation of nuclear damage (“ government indemnity agreement ”)
or a deposit of money.

• In the case where the amount of the operator’s liability exceeds that of the financial security
and there is the risk of obstructing the purpose of the Act, the G overnment shall givenecessary aid to the nuclear operator.

• The Dispute Reconciliation Committee for Nuclear Damage Compensation may beestablished as an organisation attached to MEXT; this Committee shall be in charge of
mediating reconciliation of any dispute concerning compensation for nuclear damage andof formulating guidelines for extent of nuclear damage.

Act on Indemnity Agreement for Compensation of Nuclear Damage(Act No.148 of 1961)• In order to indemnify the operator’s loss caused by compensating nuclear damage which is
not covered by the private liability insurance, this Act specifies such matters as procedures
and compensation payment, etc. of a government indemnity agreement concluded between
the Government and a nuclear operator.

4.2: General overview of the nuclear damage compensation system(Act on Compensation for
Nuclear Damage, Section 16)

Necessary measures to relieve
victims and prevent the
spreading of damage (Act onCompensation for Nuclear
Damage, Section 17)

JPY

operations

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GUIDELINES

Preliminary Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the Tokyo Electric Power Company
Fukushima Daiichi and Daini Nuclear Power Plants
28 April 2011
Dispute Reconciliation Committee for Nuclear Damage Compensation

Part 1. Introduction
1. The accident at the Tokyo Electric Power Company (“TEPCO”) Fukushima Daiichi andDaini nuclear power plants that occurred on 11 March 2011 (“the accident”) brought about
the discharge of radioactive material over a wide area, and risked precipitating a situationof even greater severity. As a result, many civilians were forced to evacuate or take otheractions in accordance with government instructions to evacuate or take shelter indoors, orwere forced to abandon business activity such as production and sales. The impact was felt
over a wide area, not just in Fukushima prefecture but also in neighbouring prefectures,
centred on a radius of approximately 30 km around the Fukushima Daiichi nuclear power
plant. The scale and scope of the damage inflicted on the surrounding population are
unprecedented, and although more than a month has passed since the accident occurred,it has still not come to an end. In addition, the tens of thousands of evacuees andnumerous enterprises that have sustained business damage can do nothing but wait until
the full picture of the damage becomes clear, and are living under conditions of great strain.
Such victims require prompt, fair and appropriate relief.
Therefore, when drawing up “guidelines for determining the scale of the nuclear damage
and other general guidelines to help operators reach a voluntary settlement of said
dispute” (Section 18-2 (ii) of the Act on Compensation for Nuclear Damage; hereinafter
the “guidelines”) based on the Act on Compensation for Nuclear Damage (“CompensationAct”), which provides for compensation for nuclear damage, the aim has been to provide
relief for the victims as soon as possible by presenting guidelines in order of priority
starting with those areas with the highest probability of nuclear damage, after due
consideration of the above circumstances.
2. Therefore, these guidelines (“Preliminary Guidelines”) clarify the basic approachconcerning only a certain scope of damage arising from actions, etc. carried out based on
government instructions.
Specifically, the following are considered: (1) as “damages related to government
instructions for evacuation, etc.”: “evacuation expenses”, “business damages”, “damages
arising from incapacity”, “loss or reduction, etc. of property value”, “examination
expenses (human)”, “examination expenses (material)”, “injury or death”, “mental
anguish”; (2) as “damages related to government designation of a navigation dangerzone”: “business damages” and “damages arising from incapacity”; and (3) as “damages
related to shipping restriction orders, etc. issued by the government, etc.”: “businessdamages” and “damages arising from incapacity”.
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not the result of government instructions but is not excluded from damage compensation,for example, from among the following: evacuation expenses and business damages(including so-called “rumour-related” damage) sustained by individuals not encompassedby the Preliminary Guidelines, damages associated with radioactive exposure suffered by
nuclear power plant workers, self-defence force officials, fire-fighters, police or others
engaged in post-accident recovery efforts, so-called “indirect damage” sustained bytrading partners who became unable to supply non replaceable parts and the like as aresult of the accident, own property damage sustained by local government authorities,
and damages arising after government instructions, etc. were lifted.
Concerning damage sustained by the victims, meanwhile, several measures have alreadybeen implemented that are not based on compensation under the Compensation Act, inorder to provide relief for the victims, or could be implemented in the future. The interaction
with these measures (possibility to offset profits/losses, etc.) will be considered in the future.
3. It is hoped that the approach to the scope of damage presented in the Preliminary
Guidelines will contribute to smooth discussions and consensus-building between thevictims and TEPCO, and we hope that TEPCO will implement prompt, fair andappropriate relief after urgently establishing a structure that facilitates compensation
for the many victims.

Part 2. Common approach to types of damage
1. The Compensation Act states that a nuclear operator’s liability extends to “nuclear
damage” due to the operator’s reactor operation etc.: Section 3. As for the scope of thatdamage, however, there is no reason to take the view that this will be especially different
from the scope of damage in any standard claim in tort for damages. When drafting these
Guidelines therefore, the Committee also took the view that so long as there was a legally
sufficient cause between an item of damage and the accident – namely that it was damage
within a scope that is judged as logically and reasonably arising from the accident based
upon the social convention – then it was included in nuclear damage.
With respect to those types of damage that might arise on an ongoing basis, such as
evacuation expenses, business damage, or damage arising from incapacity to work, thecriteria for determining an end date for these items will present difficulties, andconsideration will be given by the Committee to this point going forward.
2. Also, in formulating these Guidelines, reference was made to the following reports of
the Nuclear Damage Investigation Study Group: the “Nuclear Damage Research Group’s
Interim Confirmation – Views on business damage”, dated 15 December 1999 and the“Investigation Study Report on Nuclear Damage caused by the Criticality Accident of Fuel
Facility at the JCO Co., Ltd Tokai plant”, dated 29 March 2000.
However, the accident far exceeds the JCO criticality accident in terms of its nature,
severity, scale of damage inflicted on the surrounding area, scope, duration, etc., andgiven the wide range of victims and types of damage, the Guidelines have been drawn up
while taking full account of the unique circumstances of the accident.
3. Furthermore, when calculating damages, as a general rule compensation of the actual
costs incurred is made for evacuation expenses and the like, for example, based on
certification thereof. However, given that the victims of the accident number several tensof thousands, and given the need for urgent relief, methods could be considered such asallowing a reasonably calculated fixed amount of compensation. However, if it wereproven that evacuation expenses or the like were incurred in excess of this fixed amount,then the amount of compensation could be increased to an extent that is necessary andreasonable. With regard also to business damages, compensation could be made on thebasis of mitigated certification requirements, to the extent that is necessary andreasonable, for example where evacuation had made it difficult to gather evidence, and90JAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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rational calculation methods could be employed based on objective statistical data andthe like in order to quickly process large volumes of claims.
4. A rational and flexible approach is also required of TEPCO with regard to thecompensation payment method, taking into consideration the circumstances of victims
in need of urgent relief. Examples would be where a fixed figure of compensation or a
portion of a claimed amount is paid at certain regular intervals for recurring damage,even prior to a final determination of the full amount of compensation for the damage.

Part 3. Damages related to government instructions for evacuation, etc.
Affected Areas
The areas to which government instructions for evacuation, etc. apply are as follows:

1. Evacuation Areas
Areas for which the Government has issued civilian evacuation instructions to the headsof local government bodies, based on the Act on Special Measures concerning Nuclear
Emergency Preparedness:i)area within a 20-km radius from the Fukushima Daiichi nuclear power plant (thisarea was designated restricted area on 22 April 2011, meaning that as a generalrule the public was prohibited from entering this area); andii)

area within a 10-km radius from the Fukushima Daini nuclear power plant (on21 April 2011 this was reduced to an area within an 8-km radius).

2. In-house Evacuation Area
Area for which the Government has issued civilian in-house evacuation instructions to
the heads of local government bodies, based on the Act on Special Measures concerning
Nuclear Emergency Preparedness:iii)

the area between a 20-km radius and a 30-km radius from the Fukushima Daiichi
nuclear power plant.

Note: Concerning this In-house Evacuation Area, on 25 March 2011, the Chief Cabinet
Secretary urged voluntary evacuation, etc. due to difficulties being encountered bycivilians in maintaining daily life. However, this area was lifted on 22 April 2011 following
the designation of 3. Deliberate Evacuation Area and 4. Evacuation-Prepared Area in Caseof Emergency, explained below.

3. Deliberate Evacuation Area
Areas in which the Government has issued planned evacuation instructions to the headsof local government bodies, based on the Act on Special Measures concerning Nuclear
Emergency Preparedness:iv)

surrounding areas lying outside a 20-km radius from the Fukushima Daiichi nuclear
power plant, where accumulated radiation could reach 20 millisieverts a year,
requiring planned evacuation to a separate location within about one month.

4. Evacuation-Prepared Area in Case of Emergency
Areas in which the government has issued instructions to prepare for emergency
evacuation, etc. to the heads of local government bodies, based on the Act on Special
Measures concerning Nuclear Emergency Preparedness:

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Surrounding areas lying in a radius between 20 km and 30 km from the
Fukushima Daiichi nuclear power plant, excluding any Deliberate Evacuation
Area, where preparation is required at all times to facilitate in-house evacuationand evacuation in an emergency, and where on-going voluntary evacuation isrequired; and where children, pregnant women, persons requiring nursing care,
hospitalised patients, etc. are especially required not to enter.

Evacuees
Evacuees, meaning individuals who evacuated etc. or took other actions of necessity inaccordance with government instructions, are as follows:
1. persons who were forced to leave an Affected Area (“evacuation”) after the accident
and who continue to stay outside this area (“reside outside an Affected Area”);
2. persons who were outside an Affected Area at the time of the accident, and who, ofnecessity, continue to reside outside the Affected Area, despite having their main home
inside this area;
3. persons who were forced to take shelter indoors in an Affected Area (“in-houseevacuation”).

 Notes#1 The aforementioned “evacuation”, “reside outside an Affected Area,” and “in-houseevacuation” are referred to collectively as “evacuation, etc.”.
Evacuees, etc. also include persons who, after evacuating, returned home and shelteredindoors (although this distinction may be considered when calculating the monetaryamount of damages).
#2 Persons residing in an Affected Area are instructed by the Government to evacuate(Evacuation Area and Deliberate Evacuation Area), as mentioned above, or are asked tovoluntarily evacuate (In-house Evacuation Area, Evacuation-Prepared Area in Case of
Emergency), according to the area. Consequently, with regard not only to persons
resident in areas subject to government evacuation instructions, but also persons
resident in areas where voluntary evacuation is requested, taking action to evacuate
outside the Affected Area and refraining from returning to one’s residence, etc. inside theAffected Area from outside the area are rational actions and correspond to evacuation“based on government instructions” and “of necessity” having “to evacuate or to reside
temporarily outside the Affected Area. In addition, with regard to persons who did
evacuate or reside temporarily outside an Affected Area before the government
evacuation instructions or request for voluntary evacuation, such action is deemed to berational from an objective/ex-post facto perspective, in the light of the government
instructions, and therefore such persons should be considered to be included within the
category of those who evacuated “based on government instructions” or “of necessity”
had to evacuate or to reside temporarily outside an Affected Area.

Types of damage
1. Examination expenses (human) Guideline
Where, at any time after the accident, an Evacuee who took indoor shelter in an Affected
Area or evacuated outside an Affected Area, arranged for reasonable examination toascertain exposure to radioactive material, etc., the incurred examination expenses and92

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GUIDELINES

expenses incidental thereto (such as travel expenses incurred to undergo theexamination) will be recognised as damage warranting compensation.

 Notes#1 Depending on its volume, radioactive material poses the risk of inflicting significant
harm on the human body, and cannot be detected by the human senses. For this reason,
if at the very least a person from among those Evacuees, etc. who took indoor shelter inan Affected Area or evacuated outside an Affected Area due to the accident, is concernedthat their own body may have been exposed to radiation and undergoes an examination
to dispel this concern, then this is arguably rational action.
#2 Concerning examination expenses in the case of a free-of-charge examination, no
damages are allowed as the victim did not incur any loss.
#3 Further, if part of the expenses arose due to the accident but before the government
evacuation instructions, etc., there are no rational grounds to exclude this fromcompensation, and therefore this is allowed as damage to be compensated by theexamination expenses arising after the date of the accident.

2. Evacuation expenses

 Guidelines
The following expenses incurred by Evacuees, etc., are allowed as damages.
I) Travel expenses, removal expenses for household belongings incurred in order toevacuate outside an Affected Area.
II) Accommodation expenses and expenses incidental thereto incurred as a result of
having, of necessity, to reside temporarily outside an Affected Area.
III) If an Evacuee incurs an increase in living expenses due to evacuation, etc., the portion
representing the increase.

 Notes#1 It is appropriate that evacuation expenses incurred by a resident inside an Affected
Area (travel expenses, removal expenses for household belongings, accommodation
expenses and miscellaneous expenses incidental thereto, hereinafter “accommodation
expenses, etc.”) should also be eligible for compensation.
Further, as a general rule, evacuation expenses are not allowable for a person who hastaken shelter indoors, but expenses corresponding to III) are eligible for compensation, in
addition to which mental anguish may also be considered in relation to lifestyledifficulties and worry associated with the obligation to shelter indoors.
In addition, after an In-house Evacuation Area has been lifted, compensation ofevacuation expenses, etc. arising after the elapse of a reasonable period of time from themoment of lifting will not be allowable in areas that are no longer subject to any
regulations. Consideration will be given to how long this period should be.
#2 Among the evacuation expenses, with regard to I) Travel expenses and removal
expenses for household belongings, as a general rule the amount of damages will becalculated from confirmation of receipts, etc. for the expenses actually incurred byresidents inside the Affected Area, and the actual amount will be compensated. However,in this instance, it would be difficult to verify the actual expenses from every single
receipt obtained from the victims, who number in the tens of thousands, as doing this
could actually hinder the provision of prompt relief to the victims. Therefore, a fixedJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 201293GUIDELINES

average amount of damages could be calculated and paid uniformly to all of the affected
persons. Urgent consideration will be given to this average amount of damages.
#3 Among the evacuation expenses, with regard to III) Increase in living expenses, theincrease portion will be eligible for compensation in cases such as a person who has totake shelter indoors and who has to travel far to purchase food, or an Evacuee who isunable to use their home-grown agricultural produce or where such use is extremely
difficult (“inability, etc.”), resulting in increased food costs.
#4 Among the evacuation expenses, with regard to II) Accommodation expenses, etc.,
many variations are conceivable among persons who have carried out evacuation, etc.,
such as a person who stays in a hotel, inn or the like at their own expense, and a person
who stays in a gymnasium, civic hall, evacuation centre, etc., incurring noaccommodation costs. Strictly speaking, no accommodation expenses, etc. are actually
incurred in the latter case, and therefore such expenses would not be allowed asdamages. However, if a person who, relatively speaking, is obliged to live inconveniently
for a long period receives less compensation, the result is inevitably unjust and lacks
fairness. Consequently, the compensation method could be adjusted, such as (1) uniform
compensation for all Evacuees comprising an average amount of accommodation
expenses, etc., whether or not they have actually incurred any accommodation expenses,
etc.; or (2) in the case of the latter, increasing the payment for mental anguish due to thegreater emotional trauma. Urgent consideration will be given to these issues.

3. Injury or death Guidelines
For Evacuees, etc., the following are allowed as damages:
I) Loss of earnings, medical treatment expenses, costs of medication, mental anguish, etc.
caused by injury, deterioration in state of health, contraction of illness or death due toforced evacuation, etc., of necessity, outside an Affected Area as a result of the accident.
II) Increased examination expenses, medical treatment expenses, costs of medication, etc.
in order to prevent deterioration in state of health, etc. arising from forced evacuation,etc. outside an Affected Area, of necessity, as a result of the accident.

 Notes#1 If an Evacuee, etc. sustains damage to life or limb due to having to evacuate, ofnecessity, outside an Affected Area due to the accident, ensuing loss of earnings as wellas incurred medical treatment expenses, a sum equivalent to the costs of medication,
mental anguish, etc. will be allowed as damages. The amount of damages for mental
anguish associated with Injury or Death should be calculated on a case-by-case basis
according to the extent of the Injury or Death, unlike Section 4 below.
#2 In addition, even in the absence of actual deterioration in state of health due toevacuation, etc. from an Affected Area, it would be reasonable for an elderly person or aperson with a chronic condition to receive more costly treatment than before to prevent
deterioration in their state of health following evacuation, etc., and therefore the ensuingincrease would also be allowed as damages.
#3 Moreover, consideration will be given in the future as to whether conditions such as
PTSD (post-traumatic stress disorder) would equate to “damage to limb” discussed here.

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4. Mental anguish Guideline
Regarding emotional trauma experienced by an Evacuee, etc. following the accident (inthis case, only where unaccompanied by injury or death), it is difficult to determine
which degree of damage has a sufficient causal relationship to the accident. However,with regard to emotional trauma arising from the substantial inability to lead a normallife over a long period following having to evacuate, etc. of necessity, at the very least
there is scope for this to be allowed as damages, and urgent consideration will be given to
matters including the assessment criteria and calculation factors.

 Notes#1 As stated above, damage that has a sufficient causal relationship to the accident
corresponds to “nuclear damage”, and therefore emotional trauma (mental anguishdamage) unaccompanied by injury or death should arguably be compensated, provided
that a sufficient causal relationship is established.
#2 There are considerable differences in the presence, form and extent, etc. of emotional
trauma unaccompanied by injury or death, depending on various factors such as the age,gender, occupation, character, living conditions and family composition of the victim,
and from this fact too we can see that there are naturally limits to achieving an objective
view of the presence and extent of damage.
However, in this accident, radioactive material was discharged over a wide surroundingarea, and there were government instructions to evacuate and take shelter indoors, etc. As
a result, civilians in the Affected Areas were forced to evacuate their homes or take shelterindoors, which actually hindered the realisation of a quiet daily life. Further, the durationof the evacuation, etc. is generally long, and many people are living under harsh conditions.
Consequently, in the case of the accident, it is possible to conceive a certain level ofmental anguish damage resulting from being substantially hindered from leading anormal life over a long period following having to evacuate, etc., of necessity, at the very
least for Evacuees, etc., according to their situation.
#3 It is difficult to make a specific calculation of the monetary amount of damages
associated with this mental anguish, but a certain level of mental anguish damage andcorresponding monetary compensation may be allowed for the affected persons after
categorising the Evacuees, etc. and establishing graduated and reasonable differences
based on, for example, the circumstances leading to evacuate, etc., of necessity (byevacuation instructions, in-house evacuation instructions, etc.), the type of evacuation,etc. (evacuation, residing temporarily outside an Affected Area, in-house evacuation),
duration of the evacuation, etc., living environment in the evacuation facilities and living
conditions in other types of evacuation, etc.
On the other hand, as stated under Section 2 (Evacuation expenses) above, generally
speaking persons who stay in a gymnasium, civic hall, evacuation centre, etc., incurring noaccommodation costs, suffer greater mental anguish than persons who stay in a hotel, innor the like at their own expense. Therefore, in consideration of this difference, it seems
reasonable to calculate a fixed sum, regardless of the place of accommodation, and approve
compensation for both the former and latter, and this will also be considered.
#4 As well as mental anguish accompanied by injury or death, and mental anguishaccompanied by the substantial inability to lead a normal life following evacuation, etc.,
as discussed above, various other forms are conceivable, such as mental anguish after
exposure to at least a certain level of radioactive material. Of course, generalised, abstract
concern and apprehension about the nuclear accident and the discharge of radioactive
material is not allowable as mental anguish damage. Concerning cases in which this kindJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 201295

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of generalised, abstract concern and apprehension is exceeded, consideration will begiven as to what can be considered to be damage, and the extent thereof.

5. Business damages

 GuidelinesI) If a person previously conducted all or part of a business in an Affected Area and thebusiness was obstructed by government instructions to evacuate, etc., making it
impossible for them to conduct the business, etc., with regard to sales, trading, etc.,
where an actual reduction in income was sustained, this reduction in income will beallowed as damages.
As a general rule, the aforementioned reduction in income will be a sum calculated bydeducting the cost of sales that would have been incurred had the accident not occurred(i.e. avoided as a result of the accident) from the sales that would have been received had
the accident not occurred (loss of earnings).
II) Further, additional expenses incurred as a result of obstruction to the business as
described above (such as costs incurred for the disposal of products and business assets),
as well as additional expenses incurred to avoid business obstruction or due to a changeof business (such as costs of relocating the business, costs of transfer/storage of businessassets), will be allowed as damages to a reasonable extent.

 Notes#1 If a person engaged partly or fully in agriculture or another business in an Affected
Area was hindered from carrying on the business due to their own or their employees’
evacuation, etc., of necessity, outside the Affected Area on government instructions toevacuate, etc., or due to their being hindered in travelling to/from the Affected Area withvehicles, products, etc., losses associated with the business will be allowed as damages.
Applicable businesses include agriculture, forestry and fisheries, manufacturing,
construction, retail, services, transportation and other businesses in general, without
limitation to for-profit business, and a business may be eligible if it is only partiallyconducted in an Affected Area.
Additional expenses will also be allowed as damages to a necessary and reasonable extent,such as the costs of disposing or returning products or business assets due to obstruction to
the business as described above, or the cost of relocating the business outside an Affected
Area in order to avoid such a situation or the cost of transporting the business assets, etc.
required for the business (including cattle), costs incurred in changing the business, etc.
#2 In the event that the cost of sales has already been incurred for the sake of future sales,
or is incurred on a continuous basis, it will be appropriate to calculate the reduction inincome (loss) without deducting such cost of sales on the basis that it was not avoided asa result of the accident.
#3 Further, if part of the expenses arose due to the accident but before the government
instructions to evacuate, etc., there are no rational grounds to exclude this fromcompensation, and therefore business damage arising after the date of the accident willbe allowed as damages to be compensated.
#4 The calculation method, etc. for damages incurred up until the disbandment orbankruptcy of a business is a difficult issue, and will be considered going forward.

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6. Damages arising from incapacity to work

 Guideline
If a worker who has their place of employment in an Affected Area suffers incapacity, etc.
to work following evacuation, etc., of necessity, associated with this area, the reductionin their salary, etc. will be allowed as damages.

 Notes#1 If a worker subject to evacuation, etc., of necessity, within an Affected Area suffers
incapacity, etc. to work, for example when their place of work in the Affected Area isclosed as a result of the accident or the place of evacuation is far from the place of work,
then arguably the reduction in salary, etc. corresponds to damage with a sufficient causal
relationship to the accident.
Further, incapacity, etc. to work also includes dismissal or other termination of
employment that has a sufficient causal relationship to the accident.
#2 However, loss of earnings of self-employed persons or persons employed in home
agriculture, etc., is not eligible for damages for incapacity to work, etc. as described here,
as this may be eligible for separate business damages.
#3 In addition, if during the period of incapacity to work, etc. the employer paid theworker a salary, etc., the loss incurred by the employer constitutes damage, and thisshould be considered as the employer’s business damages.
On the other hand, wages that have not yet been paid, despite the work having been
done, ought to have been paid by the employer, and if it is acknowledged that theinability, etc. to pay such wages was due to the accident, then the affected portion ofwages may correspond to the worker’s damages.
#4 Further, if there are damages associated with incapacity to work, etc., that arose dueto the accident but before the government instructions to evacuate, etc., there are norational grounds to exclude them from compensation, and therefore damage arising after
the date of the accident will be allowed as damages to be compensated.
#5 Further, a person who was not yet employed, but was due to be employed, may be
eligible for compensation for damage arising from incapacity to work, etc., depending on
the certainty of the employment.

7. Examination expenses (material) Guideline
Concerning property, including products, in an Affected Area, if (i) confirming the securityof said property through examination is necessary and reasonable due to the nature, etc. of
the property, or (ii) an examination was necessitated at the request of a trading partner,
etc., the examination expenses incurred by the victim will be allowed as damages.

 Notes#1 The full extent of damage from the accident is yet to be determined, and it is unclear
whether exposure from radioactive material is of sufficient quantity to cause loss of or
reduction in the value of individual items of property.
However, the value or price of property is significantly affected by psychological andsubjective factors including the impression, awareness, recognition, etc. of the person
engaged in the trading, etc. of said property. Moreover, in many cases examination of theJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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property is also deemed to be necessary in order to prevent refusal by trading partners to
do business, requests for cancellation or reduction in value, etc., and also to minimise anincrease in business damages.
Consequently, it would be appropriate to allow the incurred examination expenses asdamages if (i) based on the understanding of an average, ordinary person, it would bereasonable for the owner, etc. of the property, concerned for its security due to its typeand nature, to conduct an examination to eliminate this concern, or (ii) an examination isnecessitated at the request, etc. of a trading partner.
#2 Further, if part of the examination expenses arose due to the accident but before thegovernment instructions to evacuate, etc., there are no rational grounds to exclude thisfrom compensation, and therefore damage arising after the date of the accident will beallowed as damages to be compensated.

8. Loss or reduction, etc. of property value

 Guidelines
For property, the following, which have actually occurred, are allowed as damages: herein,“property” means immovable as well as movable property.
I) If following evacuation, etc. of necessity under government instructions, it is recognisedthat property owned in an Affected Area has lost all or part of its value due to inability, etc.
to manage the property, the real reduction in value and related additional expenses (suchas the cost of disposing of the property) will be allowed as damages, to a reasonable extent.
II) In addition to the provisions of I), if the property is in an Affected Area when theaccident occurred, and(i)it was exposed to radioactive material of sufficient quantity to cause loss of or
reduction in the value of the property,

or,
(ii)

although not corresponding to (i), based on the understanding of an average,
ordinary person, it can be recognised that all or a part of the value of theproperty has been lost due to the accident, in view of the property’s type, natureand trading form, etc., then the real loss of or reduction in value and additional
expenses for decontamination and the like would be allowed as damages.

 Notes#1 With regard to I), if it is recognised that after evacuation, etc. from an Affected Area, it
becomes necessary to dispose of agricultural produce as waste without being able toharvest it, due to inability, etc. to manage agricultural produce or cattle, etc., or if it isrecognised that all or part of the value of said agricultural produce is lost due to the deathof cattle, etc., the real loss of or reduction in the value will be allowed as damages.
However, if said property is a product, whether to assess as a loss of or reduction inproperty value (objective value), or as a reduction in business income (loss of earnings),
should be determined according to the individual circumstances.
Further, if it is not possible to actually confirm the loss of or reduction in value due toinability to enter the area, the loss or reduction could be calculated on the basis that it ishighly probable, but consideration will be given to the method to be adopted when thisprobability cannot be assumed.
#2 With regard to II) (i), when the value of the property has been lost or reduced due tothe adherence of radioactive material discharged as a result of the accident, this loss invalue or reduction in value will be eligible for compensation.

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GUIDELINES#3 With regard to II) (ii), even if no loss of or reduction in property value due to theadherence of radioactive material as described in II) (i) is recognised, if based on theunderstanding of an average, ordinary person, it is inevitably recognised that theproperty value has been lost or reduced in view of the property’s type, nature and trading
form, etc., having duly considered that the value or price of the property is significantly
affected by psychological and subjective factors including the impression, awareness,
recognition, etc. of the person engaged in the trading, etc. of said property, then it will be
eligible for compensation.
#4 Moreover, regarding II) (i) and (ii), measures such as decontamination may be required
to restore the lost or reduced value of the property. In this case, the damages are either
the loss of or reduction in the value, or the cost of measures such as decontamination.
Consideration will be given to this issue going forward.
#5 Concerning damage such as that arising from the cancellation of a real estate
sale/purchase contract, the refusal to offer financing secured by real estate, damage due
to a decrease in the scheduled sale price, or damage due to a reduction in rent orcancellation of a rental contract after the accident, consideration will be given to whether
such damages have a sufficient causal relationship to the accident.

Part 4. Damage related to government establishment of marine exclusion zones
Affected Areas
Circular ocean area within a 30-km radius centred on the Fukushima Daiichi nuclear
power plant, designated by the Japan Coast Guard as a marine exclusion zone.

Types of damage
1. Business damages

 Guideline
Following the establishment of a marine exclusion zone, both of the following will beallowed as damages, to a reasonable extent: (1) in the case that a fishing operator has
been forced to abandon operations in the Affected Area and has sustained a real
reduction in income, the reduction in income; (2) in the case that a person, etc. engaged
in coastal shipping or coastal passenger transport operations incurs increased costs orsustains a reduction in income due to the need to circumnavigate the affected region, theincrease in costs or reduction in income.

 Notes#1 Following the establishment of a marine exclusion zone by the Japan Coast Guard, if a
fishing operator abandons fishing in the Affected Area due to it being dangerous, this is
recognised as rational action, and therefore any reduction in income resulting therefrom
is allowed as damages.
The method of calculating the reduction in income is the same as provided for in Part 3
Section 5 (Business damages).
#2 Similarly, if a coastal shipping operator or coastal passenger transport operator isforced to use a different route to avoid the Affected Area due to the danger of navigating
through this area, and incurs additional costs or a reduction in income, the increase incosts or reduction in income will also be allowed as damages, to a necessary andreasonable extent.

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The method of calculating the reduction in income is the same as provided for in Part 3
Section 5 (Business damages).
#3 Further, if damage arose due to the accident but before the government establishmentof a marine exclusion zone, there are no rational grounds to exclude this fromcompensation, and therefore business damage arising after the date of the accident willbe allowed as damages to be compensated.

2. Damages arising from incapacity to work

 Guideline
If following the establishment of the marine exclusion zone, a fishing operator or coastal
shipping operator, etc. suffers business deterioration due to inability, etc. to operate inthis zone, and consequently the workers employed there are incapable of working, thereduction in income including salary will be allowed as damages.

 NoteThe same as Part 3, Section 6, Notes #1 through #5 (excluding those parts related todifficulty in commuting to work, etc. specific to evacuation, etc.).

Part 5. Damages related to shipping restriction orders, etc. issued by theGovernment, etc.
Affected Areas and commodity items
In the Preliminary Guidelines, for the time being, applicable damages are those related toareas and their affected commodity items for which the Government has issued shipping
restriction orders or where local government authorities have issued requests forvoluntary restraint in relation to shipments or operations that were carried out in
connection with the accident based on rational grounds (including where carried out by
producer groups in connection with the accident with the involvement of thegovernment or local authorities, based on rational grounds; hereinafter “shipping
restriction orders, etc. issued by the Government, etc.”).
However, consideration will be given to the extent of eligible compensation associatedwith shipping restriction orders, etc. issued by the Government, etc. outside the above
areas and other than the above commodity items, as damage that has been caused by the
return of goods, cessation of shipments, fall in prices, etc.

Types of damage
1. Business damages

 GuidelinesI) If an operator engaged in agriculture, forestry or fisheries abandons, of necessity, theshipment or operation of a commodity item associated with shipping restriction orders,etc. issued by the Government, etc., and sustains a reduction in income, this reduction inincome will be allowed as damages.
II) Additional expenses (including the costs of product disposal) arising from theaforementioned abandonment of shipment or operation will also be allowed as damages,
to a reasonable extent.

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III) Damages will also be allowed for a reduction in income sustained by a distributor, etc.
that has supplied a commodity item and, of necessity, abandons sale, etc. of thecommodity item due to shipping restriction orders, etc. issued by the Government, etc.

 Notes#1 When a reduction in income is sustained after being forced to abandon the shipment
or operation of a commodity item in an area covered by a shipping restriction orderissued by the Government, this will be allowed as damages.
The method of calculating the reduction in income is the same as provided for in Part 3
Section 5 (Business damages).
Additional expenses including the costs of product disposal arising from theaforementioned abandonment of shipment or operation will also be allowed as damages,
to the extent that this is necessary and reasonable.
#2 With regard to prefectural or other local authorities’ requests for voluntary restraint
relating to shipment or operation, for example in the case that radioactive material
exceeding the provisional safety limit for a specific commodity item has been detected,
the associated reduction in income and additional expenses will be allowed as damages
as per Note #1), on the basis that this was carried out in connection with the accident on
rational grounds.
#3 If a request for voluntary restraint, etc. has been made by a producer group in relation to
shipment or operation, it is difficult to state whether all damage has a sufficient causal
relationship to the accident, but at the very least the reduction in income and additional
expenses related to requests for voluntary restraint made by fisheries groups in Fukushima
prefecture based on discussions with the prefecture will be allowed as damages as per
Note #1), based on circumstances such as the establishment of a navigation exclusion area
off the coast of Fukushima and the discharge of contaminated water.
#4 Where shipment or operation was voluntarily suspended prior to shipping restriction
orders, etc. issued by the Government, etc., this can also be assumed to have been carriedout based on a rational judgement following the occurrence of the accident, and since
there are no rational grounds to exclude this from compensation, damage arising after
the date of the accident will be allowed as damages to be compensated.
#5 As for producers, damages will also be allowed for a reduction in income sustained bya distributor, etc. that has supplied a commodity item and, of necessity, abandons sale,etc. of the commodity item due to shipping restriction orders, etc. issued by theGovernment, etc. The calculation method of damages is the same as provided for inPart 3 Section 5 (Business damages).

2. Damages arising from incapacity

 Guideline
If an operator engaged in agriculture, forestry or fisheries producing an affectedcommodity item suffers business deterioration following shipping restriction orders, etc.
issued by the Government, etc., and consequently the workers employed there areincapable of working, the reduction in income including salary will be allowed asdamages for the victims.

 Notes
The same as Part 3, Section 6, Notes #1 through #5 (excluding those parts related todifficulty in commuting to work, etc. specific to evacuation, etc.).

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Secondary Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the Tokyo Electric Power Company
Fukushima Daiichi and Daini Nuclear Power Plants
31 May 2011
Dispute Reconciliation Committee for Nuclear Damage Compensation

Part 1. Introduction
1. On 28 April 2011, the Preliminary Guidelines on Determination of the Scope of Nuclear
Damage resulting from the Accident at the Tokyo Electric Power Company Fukushima
Daiichi and Daini Nuclear Power Plants were finalised and published.
The Preliminary Guidelines stated that types of damage and the scope thereof, as well as
specific damage calculation methods not encompassed by the Preliminary Guidelines,
would be considered going forward.
2. Accordingly, the present guidelines (“Secondary Guidelines”) clarify the basic approachto those matters which it is possible to present additionally at this moment, from among
types of damage and the scope thereof not encompassed by the Preliminary Guidelines,
and also clarify specific calculation methods for some of the damage types encompassedby the Preliminary Guidelines.
Specifically, the following are considered: (1) as “damage related to government
evacuation instructions, etc.”: “temporary access expenses”, “homecoming expenses”,“mental anguish damage (mental anguish damage arising from, of necessity, having lived
as an Evacuee)”, “damage calculation method for evacuation expenses”, “damage
calculation method for mental anguish arising from, of necessity, having lived as an
Evacuee”; (2) as “damages related to shipping restriction orders, etc. issued by theGovernment, etc.”: “damages related to abandoned planting of commodity items coveredby shipping restriction orders, etc.”, “damages arising after the lifting of shipping
restriction orders, etc.”; (3) “damages related to planting restriction orders, etc. issued by
the Government, etc.”; and (4) “so-called ‘rumour-related’ damage”.
3. Further, items not encompassed by the Preliminary Guidelines and Secondary Guidelinesthat are not excluded from the damage to be compensated will also be considered going
forward, as stated under Part 1 Introduction paragraph 2 of the Preliminary Guidelines.

Part 2. Damage related to government evacuation instructions, etc.
Types of damage
1. Temporary access expenses

 Guideline
Among persons subject to evacuation, etc. on the instructions of the Government, aperson with a home in a Restricted Area (which may also be an Evacuation Area; same
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hereinafter) who incurs travel expenses, removal expenses for household belongings,
decontamination expenses, etc. (including accommodation expenses where a night’s stay
before or after is essential; same hereinafter) will be eligible for compensation, to anecessary and reasonable extent.

 Notes#1 Among persons subject, of necessity, to evacuate, etc. outside an Affected Area on
government evacuation instructions, etc., from 10 May 2011, persons with a home in a
Restricted Area to which access is generally prohibited (within a 20-km radius from theTokyo Electric Power Company Fukushima Daiichi nuclear power plant; excluding
persons who have a home within 3 km of this nuclear power plant) have been able toreturn home temporarily by participating in “temporary access” carried out by towns andvillages with the support of the Government and prefecture, in order to collect the items
they need for daily life, etc.
This “temporary access” is carried out by means of the participants gathering at a“temporary access” rendezvous departure point (relay site) and travelling to their home
district in special buses, on a district-by-district basis.
#2 However, when travelling from a place in which they are staying outside of an
Affected Area to the aforementioned departure point, it cannot be denied that return
travel expenses and the like are incurred at own expense, as well as travel expenses fromthe rendezvous point to their home district, decontamination expenses for persons andobjects, removal expenses for household belongings (including cars), etc.
The expenses thus incurred for participation in “temporary access” can be allowed asdamages with a sufficient causal relationship to the accident, since persons who, ofnecessity, had to evacuate, etc. as a result of the accident were strictly prohibited fromentering Restricted Areas containing their homes due to the discharge of radioactive
material as a result of the accident, and expenses were necessitated in order for them tocollect the items necessary for daily life from their homes, etc.
Consequently, the travel expenses, removal expenses for household belongings,
decontamination expenses, etc. (including accommodation expenses where a night’s stay
before or after is essential; same hereinafter), which are incurred at own expense in orderto participate in “temporary access” as described above, are eligible for compensation, toa necessary and reasonable extent.
#3 The calculation method for such travel expenses, etc. is the same as described under“Calculation method for damages” below.

2. Homecoming expenses

 Guideline
Travel expenses and removal expenses for household belongings incurred by an Evacuee,
etc. as a result of the accident in order to return to their home in an Affected Area will be
eligible for compensation, to a necessary and reasonable extent.

 Notes#1 Following the lifting of the In-house Evacuation Area on 22 April 2011, certain people
staying outside an Affected Area were able to return to their home inside the AffectedArea.
The travel expenses and removal expenses for household belongings incurred in order toreturn to their home in this way will be eligible for compensation, to a necessary and104

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reasonable extent, in the same way as evacuation expenses described under Part 3,
Section 2 of the Preliminary Guidelines.
#2 The calculation method for such travel expenses and removal expenses for householdbelongings is the same as described under Section 1 of “Calculation method for damages”
below.

3. Mental anguish damage (mental anguish damage arising from having, of necessity, lived
as an Evacuee) Guidelines
I) For a person who was subject to evacuation, etc. due to the accident and who, ofnecessity, continued to reside outside an Affected Area, the emotional trauma arisingfrom being substantially hindered from leading a normal life over a long period due tohaving, of necessity, lived away from their home will be allowed as damage to becompensated.
II) Similarly, for a person who, of necessity, had to take shelter indoors due to theaccident and whose freedom of movement is restricted, etc., the emotional trauma
arising from being substantially hindered from leading a normal life over a long period
will be allowed as damage eligible for compensation.

 Notes#1 As stated in Part 3, Section 4, Note #2 of the Preliminary Guidelines, from among themental anguish damage resulting from the accident, it is possible to conceive of damage
to be compensated at the very least for the considerable number of Evacuees, etc.,
according to their situation, who (1) had to evacuate and continuously reside outside an
Affected Area, and to live away from their home for a long period, or (2) of necessity, had
to take shelter indoors and have had their freedom of movement restricted, etc. over along period, and who suffered long-term mental anguish due to evacuation, etc.
(hereinafter collectively referred to as “mental anguish damage arising from having, ofnecessity, to live as an Evacuee”).
Consequently, this mental anguish damage will be eligible for compensation, to areasonable extent.
The calculation method for such mental anguish damage is the same as described under
Section 2 of “Calculation method for damages” below.
#2 Various other forms of mental anguish arising from the accident are conceivable, forexample mental anguish resulting from specific concern about one’s state of health due
to being exposed to a considerable amount of radiation, etc. and whether these should be
eligible for compensation will continue to be considered going forward.

Calculation method for damages
1. Calculation method for damages comprising evacuation expenses

 GuidelinesI) Among evacuation expenses, with regard to “travel expenses”, “removal expenses forhousehold belongings”, and “accommodation expenses, etc.”, the expenses actually
incurred by an Evacuee, etc. are eligible for compensation, and it is reasonable tocalculate this by setting the amount actually incurred as the amount of damages.

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However, if it proves difficult to verify the amount of damages from receipts or the like,then the amount of damages should be confirmed by means of estimation using objective
statistical data, etc.
II) On the other hand, with regard to “increase in living expenses” among the evacuation
expenses, as a general rule it is reasonable to add these expenses to the mental anguishdamage arising from having, of necessity, lived as an Evacuee, and assign this fixed sum,after addition, as the amount of damages for both.
The specific method is described under Section 2 of “Calculation method for damages” below.

 Notes#1 In the Preliminary Guidelines, with regard to “travel expenses” and “removal expenses
for household belongings” among the evacuation expenses, as a general rule the amountactually incurred is eligible for compensation, but in order to provide prompt relief for thevictims, a fixed average amount of damages could be calculated and paid uniformly to allof the applicable persons, and it was stated that urgent consideration would be given tothis average amount of damages (see Preliminary Guidelines Part 3, Section 2, Note #2).
In addition, with regard also to “accommodation expenses, etc.” among the evacuation
expenses, a certain adjustment could conceivably be made to avoid a result that depends
on the place of accommodation, etc. and is unjust and lacks fairness, such as (1) uniform
compensation for all Evacuees comprising an average amount of accommodation
expenses, etc., whether or not they have actually incurred any accommodation expenses,
etc., or (2) in the case of accommodation in a gymnasium, civic hall, evacuation centre,
etc., increasing the payment for mental anguish due to the greater emotional trauma. It
was stated that urgent consideration would be given to these issues (see Preliminary
Guidelines Part 3, Section 2, Note # 4).
#2 However, on subsequently investigating, to a certain extent, the evacuation status andexpenditure, etc. of the Evacuees, etc., with regard to one-off “travel expenses” and“removal expenses for household belongings”, it was inferred that a considerable numberof people had not incurred these expenses at own cost. Moreover, since the final
evacuation destinations extend around the country and various means of travel areemployed, there is considerable variance in the amount of these expenses, even among
those who have incurred expenses at own cost. In addition, with regard also to“accommodation expenses, etc., in many cases these are assumed by local government
authorities, etc., and since it is understood that relatively few people continue to incurthese expenses at own cost, it was inferred that there is considerable variance in theamount incurred at own cost, according to the place of accommodation. Therefore, withregard to these types of damage, a method of compensating all Evacuees, etc. with a fixed“average amount of damages” does not necessarily correspond to the actual situation,
nor is it thought to be fair.
In addition, when compensating the actual amount of expenses incurred, in line with thegeneral rule, verifying the expenses is problematic. If it is not possible to verify theamount from receipts or the like, then the amount of damages should be confirmed bymeans of estimation using objective statistical data, etc. For example, for “travel
expenses” incurred when evacuating in one’s own vehicle, the cost of the gasoline
required to reach the destination, based on the distance travelled, and in the case of“accommodation expenses, etc.”, the average cost of accommodation, etc. in thesurrounding area could be calculated and used to estimate the amount of damages. By
using this approach, it can hardly be said that the victims have been especiallydisadvantaged, even if the actual expenses had been compensated in principle.
In the light of the above, with regard to “travel expenses”, “removal expenses for householdbelongings”, and “accommodation expenses, etc.”, it is fair and reasonable for only those
persons who have incurred expenses for the above damage types at own cost to receive

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compensation for the expenses actually incurred, to a reasonable extent, in line with thegeneral rule, rather than calculating an amount on the assumption that all applicable
persons have incurred the same average amount, or have incurred average expenses.
#3 At the same time, with regard to “increase in living expenses” among the evacuation
expenses, in the Preliminary Guidelines it was stated that increased food costs, etc.
resulting from evacuation, etc. could be eligible for compensation (see Preliminary
Guidelines, Part 3, Section 2, Note #3).
However, this “increase in living expenses” resulting from evacuation, etc. is likely to beexperienced by the vast majority of Evacuees, etc., and it is normally not such a large
monetary sum, with little variation between individual people. At the same time, it isextremely difficult to precisely calculate the actual costs incurred, and it would be harshon the victims to request evidence.
Moreover, this “increase in living expenses” is closely correlated with the living
conditions, etc. associated with evacuation, etc. and continuing to reside outside an
Affected Area or to take shelter indoors, and therefore it is judged to be fair andreasonable to add these expenses to the mental anguish damage arising from having, ofnecessity, lived as an Evacuee, and calculate a lump sum comprising both expenses.
However, ultimately the calculation of a lump sum “increase in living expenses” as anelement additional to mental anguish damage arising from having, of necessity, lived as
an Evacuee, as described above, only envisages expenses within a normal range, and if
among those Evacuees, etc., there are persons who, of necessity, have assumed aparticularly large increase in living expenses, the actual amount of expenses incurred will
only be eligible for separate compensation where such special circumstances exist, to areasonable extent.

2. Calculation method for damages comprising mental anguish damage arising from having,of necessity, lived as an Evacuee

 GuidelinesI) Regarding the amount of damages for mental anguish arising from having, of necessity,
lived as an Evacuee, etc., it is judged to be reasonable to calculate a fixed amount ofdamages by adding the amount of mental anguish damages to the increase in living
expenses described in Section 1 of “Calculation method for damages”.
II) Further, when calculating the specific amount, the degree of mental anguish is likely
to differ between people, in consideration of factors such as the living environment,
convenience and level of privacy, depending on the place of accommodation, etc., andtherefore graduated differences in monetary amount could be established in the ordershown below. We will continue to examine this issue.
(1)

Evacuation centre, gymnasium, civic hall, etc.

(2)

Apartment, rental house, municipal house, emergency housing, own home,
home of relative/acquaintance, etc.

(3)

Hotel, inn, etc.

III) Regarding a person who, of necessity, (4) sheltered indoors for a long period, whilemental anguish is not conceivable in the same way as cases (1) through (3) above, since
the person has been living in their own home, the amount of damages could be
calculated so as not to exceed the amount calculated for (3), in consideration of therestriction on freedom of movement, such as not being able to go outside. We willcontinue to examine this issue.

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GUIDELINES Notes#1 In the Preliminary Guidelines, with regard to the amount of damages for mental
anguish arising from having, of necessity, lived as an Evacuee, etc., it was stated that (i) acertain level of mental anguish damage and corresponding monetary compensation may
be allowed for the applicable persons after categorising the Evacuees, etc. andestablishing graduated and reasonable differences based on factors such as the living
environment in evacuation, or (ii) a fixed sum could be calculated, regardless of the placeof accommodation, and an amount of damages could be approved for both the former
and latter, and that this would be considered going forward (Preliminary Guidelines,
Part 3, Section 4, Note #3).
However, with regard to “accommodation expenses, etc. as stated under Section 1 (Types ofdamage), Note #2, compensating the actual amount of expenses incurred would notnecessarily hinder prompt relief for the victim, and this was judged to be fair and reasonable,in consideration of the evacuation conditions and expenditure of the Evacuees, etc.
Therefore, we reached the conclusion that method (i) above was reasonable.
#2 As stated under Section 1 (Types of damage), Note #3, among the evacuation expenses,
as a general rule it was judged to be fair and reasonable to add “increase in living
expenses” to damage for mental anguish arising from having, of necessity, lived as an
Evacuee, etc., and calculate both as a fixed sum.
With regard to damage for mental anguish arising from having, of necessity, lived as an
Evacuee, etc., if it is assumed that eligibility for compensation should be limited to having,of necessity, to reside outside an Affected Area or to take shelter indoors for at least acertain length of time, then the calculation method for damages could, for example,
comprise calculating a monthly sum. We will continue to examine this issue going forward.

Part 3. Damages related to shipping restriction orders, etc. issued by theGovernment, etc.
1. Damages related to abandoned planting of commodity items covered by shipping restriction
orders, etc.

 GuidelinesI) If an operator engaged in agriculture or forestry is forced to abandon planting, either
wholly or partially, of a commodity item due to shipping restriction orders, etc. issued by
the Government, etc. (hereinafter “damage related to shipping restriction orders, etc.
issued by the Government, etc.”, as in Part 5 of the Preliminary Guidelines), and sustains
a reduction in income as a result thereof, this reduction in income will be allowed asdamage to be compensated (business damages).
Additional expenses (including the costs of disposing of seedlings) arising from theaforementioned abandonment of planting will also be allowed as damage to becompensated (business damages), to a reasonable extent.
II) If an operator engaged in agriculture or forestry suffers business deterioration after
being forced to abandon planting, either wholly or partially, of a commodity item due toshipping restriction orders, etc. issued by the Government, etc., and consequently theworkers employed there are incapable of working, the reduction in income includingsalary will be allowed as damage to be compensated.

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GUIDELINES Notes#1 If an operator engaged in agriculture, forestry or fisheries is forced to abandon the
shipment or operation of a commodity item associated with shipping restriction orders,etc. issued by the Government, etc., and sustains a reduction in income, this reduction inincome and additional expenses will be allowed as damage to be compensated, to areasonable extent, as stated in Part 5 Section 1 of the Preliminary Guidelines.
Moreover, in the case of an operator engaged in agriculture or forestry, a considerable
period of time is required from planting of the agricultural or forestry commodity until
shipment, and although the planting itself is not restricted by a shipping restriction order,
etc. issued by the Government, etc., if such an order is actually issued and is not expected
to be lifted, in many cases the planting would inevitably be abandoned, either wholly or
partially. Therefore, the ensuing reduction in income and additional expenses, as well as
damage associated with incapacity to work, etc., are allowed as damage to becompensated, except where the decision to abandon planting is unreasonable.
#2 The method of calculating the reduction in income is the same as provided for inPart 3 Section 5 (Business damages) of the Preliminary Guidelines. Concerning damages
associated with incapacity, etc., this is the same as Part 3, Section 6, Note #1 through #5of the Preliminary Guidelines (excluding those parts related to difficulty in commuting towork, etc. specific to evacuation, etc.).

2. Damages arising after the lifting of shipping restriction orders, etc.

 GuidelinesI) If an operator engaged in agriculture, forestry or fisheries abandons, of necessity, theshipment, operation or planting of a commodity item associated with shipping restriction
orders, etc. issued by the government, etc., and sustains a reduction in income even after
the order has been lifted, this reduction in income will also be allowed as damage to becompensated.
II) Further, any additional expenses necessitated to re-start such shipment, operation orplanting after the lifting of the order, etc. (including the cost of re-establishing agriculturalland or equipment) will also be allowed as damage to be compensated, to a reasonable extent.

 NoteThe method of calculating the reduction in income is the same as provided for in Part 3
Section 5 (Business damages) of the Preliminary Guidelines.

Part 4. Damages related to planting restriction orders, etc. issued by theGovernment, etc.
Affected Areas and commodity items
Applicable damage is that related to areas and their applicable commodity items forwhich the Government has issued planting restriction orders or guidance on restrictedgrazing or pasture grass provision, etc., or where local government authorities haveissued requests for voluntary restraint in relation to planting or other farming that was
carried out in relationship with the accident based on rational grounds (including where
carried out by producer groups in connection with the accident with the involvement of
the Government or local authorities, based on rational grounds; hereinafter “planting
restriction orders, etc. issued by the Government, etc.”).

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Types of damage
1. Business damages

 GuidelinesI) If a farmer is forced to wholly or partially abandon the planting of a commodity item orother farming-related actions such as the provision of grazing and pasture grass(hereinafter “planting, etc.”) due to planting restriction orders, etc. issued by theGovernment, etc., and sustains a reduction in income as a result thereof, this reduction
in income will be allowed as damage to be compensated.
II) Additional expenses (including the costs of purchasing replacement feed) arising fromthe abandonment of planting, etc. will also be allowed as damage to be compensated, to areasonable extent.

 Notes#1 The method of calculating the reduction in income is the same as provided for inPart 3 Section 5 (Business damages) of the Preliminary Guidelines.
#2 Where planting, etc. of an applicable commodity item was voluntarily suspended prior
to the issuance of planting restriction orders, etc. by the Government, etc., this can also
be assumed to have been carried out based on a rational judgement following theoccurrence of the accident, and since there are no rational grounds to exclude this fromcompensation, damage arising after the date of the accident will be allowed as damage tobe compensated.

2. Damages arising from incapacity

 Guidelines
If a farmer producing an applicable commodity item suffers business deterioration
following planting restriction orders, etc. issued by the Government, etc., andconsequently the workers employed there are incapable of working, the reduction inincome for such workers, including salary, will be allowed as damage to be compensated.

 Notes
The same as Part 3, Section 6, Notes #1 through #5 of the Preliminary Guidelines(excluding those parts related to difficulty in commuting to work, etc. specific toevacuation, etc.).

Part 5. So-called “rumour-related” damage
1. General criteria

 GuidelinesI) Although there is no established definition of so-called “rumour-related” damage, inthese Guidelines “rumour-related” damage refers to concern about the risk ofcontamination with radioactive material in relation to products or services, due to facts
that are widely known through media reports, leading consumers or trading partners torefrain from purchasing the product or service, or stop trading in the service or product,
resulting in damage.

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GUIDELINESII) “Rumour-related” damage is eligible for compensation if there is a sufficient causal
relationship to the accident. The general criterion for this is as follows: when a consumer
or trading partner is concerned about the risk of contamination with radioactive material
resulting from the accident in relation to a product or service, and their psychologicalstate of wanting to avoid the product or service is reasonable from the perspective of an
average, ordinary person.
III) With regard to the specific kind of “rumour-related” damage that is allowable asdamage with a sufficient causal relationship to the accident, the following approach canbe adopted, after breaking it down into different types such as the nature of the businessor product, region, type of damage, etc., based on the characteristics of each industry:(1)

Damage within a certain scope of types arising due to reluctance to purchase,
etc. after the accident (damage corresponding to Guideline IV); same hereinafter)
is deemed to have a sufficient causal relationship to the accident, as a general
rule.

(2)

With regard to damage types other than (1), damage arising due to reluctance topurchase, etc. after the accident is verified on a case-by-case basis to judge
whether it has a sufficient causal relationship to the accident, with due
consideration of the general criteria stated in II). The matters to be considered in
making this judgement are indicated in these Guidelines and in guidelines to be
published in the future.

IV) Types of damage comprise the following damage arising due to reluctance topurchase, cessation of trading, etc. by consumers or trading partners in relation to
products or services.
(1)

Business damage

Reduction in income and reasonable additional expenses (such as the cost of
returning or disposing of products) due to a drop in transaction volumes or prices.
(2)

Damage arising from incapacity

A reduction in the salary or other income of workers at a business that suffers
deterioration following the reduction in income described in (1) above, resulting in
the workers being incapable of working.
(3)

Examination expenses (material)

Examination expenses necessitated by a trading partner’s request for examination.

 Notes#1 The expression so-called “rumour-related” damage is interpreted in various ways bydifferent people, and is sometimes used to mean damage arising from psychologicalconcern that induces customers or trading partners to avoid purchasing/trading in a
product or service due to worry about the risk, even though there is no risk due toradioactive material or the like at all. However, when related to a nuclear accident suchas the accident, at the very least it should be regarded as an adverse reaction by themarket in order to avoid the risk of contamination with radioactive material, which is notnecessarily clear scientifically, and consequently there is eligibility for compensation as
nuclear damage where such avoidance behaviour can be said to be reasonable.
From this understanding, while it is intrinsically desirable to avoid the expression “rumourrelated” damage, currently no appropriate substitute expression has been indicated incourt procedure. Unlike business damage resulting from the abandonment of businessfollowing evacuation, etc., this type of damage is characterised in the way that the thinking,judgement, actions, etc. of third parties such as media organisations, consumers andtrading partners intervene, so it cannot be denied that this is a special type of damage.

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Therefore, we use the expression “rumour-related” damage as defined in I), while
cautioning against the misunderstanding it can provoke, as described above.
#2 As well as agricultural, forestry or fisheries produce and other foods, “rumour-related”
damage also includes products in general and intangible services (such as the various
services provided by tourism).
#3 Inherently, the denotation of “rumour-related” damage is not necessarily clear, andultimately whether there is sufficient causal relationship to the accident should beascertained on a case-by-case basis. For this form of damage, indicating the types ofdamage with a particularly high probability of sufficient causal relationship to theaccident, and the issues to be considered when determining whether a sufficient causal
relationship exists, should be effective in resolving disputes related to the accident.
Concerning damage corresponding to type III) (1), where this is damage resulting fromreluctance to purchase, etc. arising after the accident, as a general rule this alone would
allow it to be inferred as damage with a sufficient causal relationship to the accident.
For the time being, only damage that is judged to correspond to type III) (1) is presented
in the Secondary Guidelines, and consideration will be given to additionally presenting as
type III) (1) other types of damage that are judged to have a sufficient causal relationshipto the accident.
In making this judgement, market trends such as the handled volumes, pricing, etc. of
products and services constitute an important element, as do the various enacted
measures to stem rumour damage (for example, the request made by the Minister of
Economy, Trade and Industry on 22 April 2011 concerning the manufacturing sector,
asking for consideration in business dealings with sub-contracting SMEs).
#4 The scope of the type described in III) (1) may vary depending on the type of damage.
#5 As stated above, in the Secondary Guidelines and future guidelines, as a general rulethe types presented as type III) (1) are those types for which a sufficient causal
relationship to the accident can be affirmed, but “rumour-related” damage with asufficient causal relationship to the accident is not limited to these types. With regard
also to “rumour-related” damage not corresponding to type III) (1) (i.e. “rumour-related”
damage corresponding to III) (2)), damage that is separately proven to have a sufficientcausal relationship to the accident will be eligible for compensation.
The method of proving this could involve the use of rational techniques based on
objective statistical data, for example.
#6 If the dual influence of a cause other than the accident is recognised (for example, adownturn in consumer confidence due to the Great East Japan Earthquake itself), this willbe allowed as damage to be compensated, to the extent that it has a reasonable causal
relationship to the accident.
#7 Further, since “rumour-related” damage is based on the psychological state of
consumers and trading partners whereby they wish to avoid the relevant product, etc.
due to concern about the risk, there is a certain time limitation to this.
However, the accident has still not come to an end, and in this situation it is difficult toindicate the specific timing of termination. We will continue to consider this matter inthe light of future circumstances.
#8 The method of calculating the reduction in income due to “rumour-related” damage isthe same as provided for in Part 3 Section 5 (Business damages) of the Preliminary
Guidelines.
#9 Concerning damage associated with incapacity, etc., this is the same as Part 3,
Section 6, Notes #1 through #5 of the Preliminary Guidelines (excluding those parts
related to difficulty in commuting to work, etc. specific to evacuation, etc.).

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2. “Rumour-related” damage in agriculture, forestry and fisheries GuidelinesI) In agriculture, forestry and fisheries, among damage arising due to reluctance topurchase, etc. after the accident, as a general rule there is deemed to be a sufficientcausal relationship to the accident, at the very least, where such damage is related to the
products listed below, on the basis that this is damage corresponding to type 1 III) (1).
(1)

All agricultural and forestry products (only where used for food, excluding
livestock products) produced in areas in which shipping restriction orders, etc.
(limited to orders issued until April 2011) have been issued by the government,
etc. in relation to agricultural and forestry products (excluding livestock products)(2)

All produced livestock products (used for food) in areas in which shipping
restriction orders, etc. (limited to orders issued until April 2011) have been issued
by the Government, etc. in relation to livestock products(3)

All produced fisheries products (used for food) in areas in which shipping
restriction orders, etc. (limited to orders issued until April 2011) have been issued
by the Government, etc. in relation to fisheries products

II) Regarding the products described under I), if an operator engaged in agriculture, forestry or
fisheries itself abandons shipment, operation or planting in advance, either wholly or
partially, due to concern about possible damage resulting from reluctance to purchase, etc.,
as a general rule the damage arising therefrom is deemed to have a sufficient causal
relationship to the accident, provided that the operator’s decision is judged to be unavoidable.

 Notes#1 The following characteristics are observed for agricultural, forestry and fisheries
products that are food:(i)Consumers tend to be particularly sensitive in avoiding these products, as they
are taken into the body through consumption and there is a fear of internal
exposure to radioactive material.

(ii)

As these are animals or plants that are grown/raised on farms, fisheries, etc.,
concern about the risk of contamination of the land or water with radioactive
material tends to lead directly to concern about these agricultural, forestry andfisheries products.

(iii) In some regions, radioactive material exceeding the provisional safety limit has
been detected for certain commodity items, and therefore when shipping
restriction orders, etc. have been issued by the Government, etc., concern caneasily arise that a similar quantity of radioactive material may have adhered toother commodity items of the same type (agricultural/forestry products,
livestock products, fisheries products).
(iv) As food, agricultural, forestry and fisheries products are essential to daily life,and since they do not normally have such a high value, it would normally be
difficult to conceive reluctance to purchase or cessation of trading, etc., ascaused by a downturn in consumer confidence resulting from the Great East
Japan Earthquake itself. At the same time, they can be replaced relatively easily
by produce from other production regions, meaning that reluctance to purchase,cessation of trading, etc. can occur relatively easily.
#2 As food, agricultural, forestry and fisheries products have the characteristics describedabove, and so in areas where shipping restriction orders, etc. have been issued by theGovernment, etc., for a certain period, it is reasonable, from the perspective of an average,
ordinary person, for consumers or trading partners to avoid trading, etc. due to concern
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about the adherence of radioactive material and exposure to this inside the body, etc.,
even after a shipping restriction order has been lifted, not just for the commodity item inquestion, but also for similar types of agricultural, forestry and fisheries produce
grown/raised in the same area (agricultural/forestry products, livestock products,
fisheries products).
#3 Moreover, as the actual status of “rumour-related” damage affecting agriculture,
forestry and fisheries has not necessarily been identified as yet, for the time being they
are categorised and presented as high-probability type I) products with a sufficient causal
relationship to the accident. Regarding products other than I), we will continue tomonitor market trends and give further consideration after due analysis, etc.

3. “Rumour-related” damage in the tourism industry

 Guideline
Among the damage arising after the accident due to cancellations, reluctance to book, etc.
in relation to the tourism industry, there is a high probability that cancellations,
reluctance to book, etc. by consumers, etc. resulted from the accident and subsequent
discharge of radioactive material across a wide area, at the very least with regard to thetourism industry in which there are sales offices in the prefectures where the accident
occurred, and thus where a reduction in income is recognised due to such cancellations,
reluctance to book, etc. affecting the tourism industry after the accident, as a general rule
this will be allowed as damage with a sufficient causal relationship to the accident, on
the basis that it is type 1 III) (1).
However, with regard to this reduction in income in the tourism industry, there isconsiderable probability that this was due to a downturn in consumer confidence causedby the Great East Japan Earthquake itself, and therefore this also needs to be consideredwhen approving damage and calculating the monetary amount of damages.

 Notes#1 Within the so-called “tourism industry”, it is possible to include the accommodationrelated sector such as hotels, inns and the travel business, the sightseeing industry suchas leisure facilities and passenger boats, the transportation industry such as buses andtaxis, as well as restaurants and retail outlets at tourist sites. However, the degree ofcontribution to sales made by tourists in these sectors is varied, and these circumstances
should be fully taken into consideration when calculating specific, individual monetaryamounts of damage.
#2 However, in general, the following characteristics are observed for the tourism
industry:

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(i)

The tourism industry is premised on tourists taking themselves to the region inquestion, and therefore concern about the risk of contamination of the land or
water with radioactive material tends to lead directly to concern about tourism
in these regions.

(ii)

Unlike food products, etc. which are consumed on a daily basis, the various
services in the tourism industry do not necessitate daily consumption, andtherefore once “rumour-related” damage occurs, use of these various services
can decline suddenly. Further, the tourism industry provides multiple services to
consumers engaged in tourism targeting food products and tourism resources inthe tourist region, and therefore once “rumour-related” damage occurs, not only
does the use of individual services decline, but it also tends to impact on services
as a whole, in other words the entire tourism industry in the region in question.

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GUIDELINES#3 Since the tourism industry has the characteristics described above, it is reasonable,from the perspective of an average, ordinary person, for consumers, etc. to avoid tourism
due to concern about exposure to radioactive material, especially in all areas throughout
the prefectures where the accident occurred, and therefore this could impact on theentire tourism industry in the concerned region.
Consequently, if a reduction in income due to cancellations, reluctance to book, etc. after
the accident is recognised with regard to the tourism industry in which there are sales
offices in the prefectures where the accident occurred, as a general rule the reduction inincome and additional expenses (disposal expenses, etc.) will be allowed as damage witha sufficient causal relationship to the accident, provided there is no reasonable doubtthat this reduction in income is not due to other factors.
Moreover, a reduction in income arising from cancellations, reluctance to book, etc.
affecting the tourism industry due to the impact of the accident is not necessarily limited
to the tourism industry in which there are sales offices in the prefectures where theaccident occurred, but may also be recognised to have occurred in the tourism industry inwhich there are sales offices outside these prefectures, in connection with these
prefectures, and in the tourism industry in the vicinity of these prefectures. However, as
the actual status of “rumour-related” damage has not necessarily been identified as yet,for the time being the type presented is that of the tourism industry in which there aresales offices in the prefectures where the accident occurred. Concerning other types of
tourism, we will continue to monitor market trends and give further consideration after
due analysis, etc.
Nonetheless, the tourism industry is characteristic in that there is considerable
probability that the cancellations, reluctance to book, etc. affecting the tourism industry
resulted from a downturn in consumer confidence caused by the Great East Japan
Earthquake itself.
Therefore, when cancellations, reluctance to book, etc. arise in relation to the tourism
industry in which there are sales offices in the prefectures where the accident occurred,
it is possible to assume that this is due to “rumour-related” damage with a sufficientcausal relationship to the accident, as described above. However, since there is also a
considerable probability that other factors have had an impact (such as damage to thetransportation infrastructure due to the Great East Japan Earthquake itself andcancellations, reluctance to book, etc. due to a downturn in consumer confidence),comparison with other regions, etc. needs to be considered when approving damages andcalculating the specific monetary amount of damages, etc.

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Supplement to Secondary Guidelines on Determination of the Scope of
Nuclear Damage resulting from the Accident at the Tokyo Electric Power
Company Fukushima Daiichi and Daini Nuclear Power Plants
20 June 2011
Dispute Reconciliation Committee for Nuclear Damage Compensation

Part 1. Introduction
1. In the “Secondary Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the Tokyo Electric Power Company Fukushima Daiichi andDaini Nuclear Power Plants” published on 31 May 2011 in “2. Calculation method fordamages comprising mental anguish damage arising from having, of necessity, lived as
an Evacuee” (in Calculation method for damages, under Part 2), we set out our provisional
approach to the specific calculation method for damages comprising the sum of “mental
anguish damage arising from having, of necessity, lived as an Evacuee” and “increase inliving expenses” (“damages”). In other words, when calculating the amount of damages,
the degree of mental anguish is likely to differ between people, in consideration of factors
such as the living environment, convenience and level of privacy, depending on the placeof accommodation, etc., and therefore graduated differences in monetary amount could
be established for people staying in (1) evacuation centre, gymnasium, civic hall, etc.,(2) apartment, rental house, municipal house, temporary housing, own home, home ofrelative/acquaintance, etc., and (3) hotel, inn, etc., in this order. Regarding a person who,of necessity, (4) had to take shelter indoors, the amount of damages could be calculated
so as not to exceed the amount calculated for (3). It was stated that we would continue toexamine this issue.
2. In the light of the above, we clarify our approach to the calculation method for damages,
etc. in this supplement to the guidelines (“Supplement to the Secondary Guidelines”).
Specifically, we clarify our thinking on “applicable persons”, “basic approach to
calculation of damages and calculation period”, “calculation method for damages”, and“commencement and termination of damage occurrence”.

Part 2. Calculation method for damages comprising mental anguish damage
arising from having, of necessity, lived as an Evacuee
1. Applicable persons

 GuidelinesI) The applicable persons for compensation of damage are those who are substantiallyhindered from leading a normal life over a long period due to evacuation, etc., including(1) persons who, of necessity, evacuate or reside outside an Affected Area for a long
period, forcing them to live for a long period away from their home, or (2) persons who, ofnecessity, take shelter and whose freedom of movement is restricted for a long period.
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GUIDELINESII) If a person corresponds to (1) or (2) above, then each individual Evacuee, etc. will be
eligible for compensation, regardless of factors such as their age or the number of people
in the household.

 Notes#1 A person corresponding to (1) or (2) under Guideline I) is someone who, after actually
evacuating outside an Affected Area (Evacuation Area, Restricted Area, In-house
Evacuation Area, Deliberate Evacuation Area, Evacuation-Prepared Area in Case of
Emergency), had (or has), of necessity, to reside for a long period outside the Affected
Area, someone who was outside an Affected Area when the accident occurred anddespite having their main home inside this area, had (or has), of necessity, to reside for along period outside the Affected Area, or someone who, of necessity, had to take shelter
for a long period in an In-house Evacuation Area until the In-house Evacuation Area
designation was lifted.
However, I) (1) does not apply to a person who has their main home in an EvacuationPrepared Area in Case of Emergency and began evacuation outside this area after thedate on which the Guidelines were established (excluding children, pregnant women,
persons requiring nursing care, hospitalised patients, etc.).
#2 The right to claim compensation for damage arises at an individual level, andcompensation itself should also be paid to each individual rather than on a householdbasis.
Further, although it cannot be denied that there are differences between individuals inthe degree of mental anguish actually experienced by each Evacuee, due to age, numberof people in the household and other circumstances, in the Guidelines it is held to beappropriate to allow eligibility for compensation for mental anguish common to all
people, and since there are also thought to be few differences between individuals interms of the increase in living expenses, it has been decided that no monetarydifferential should be set due to factors such as age.

2. Basic approach to calculation of damages and calculation period

 Guidelines
When calculating the amount of damages, for the time being the calculation period is
divided into the following three stages, and it is judged to be reasonable to calculatemonetary amounts for each period.
I) Six-month period after occurrence of the accident (Stage 1)∗.
II) Six-month period from the end of Stage 1 (Stage 2).
However, this will be revised as necessary in cases such as the review of Restricted Area, etc.
III) Stage from the end of Stage 2 to termination (Stage 3).

∗118

Note by the NEA:
Stage 1: from 11 March 2011 to 11 September 2011.
Stage 2: from 11 September 2011 to 11 March 2012.
Stage 3: from 11 March 2012 to termination (i.e. prospect for an end to evacuation with apositive perspective to return home).
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GUIDELINES Notes#1 As stated in Part 1, in the Secondary Guidelines it was stated that we would continue
to examine the method of calculating damages based on four categories according to thetype of accommodation, etc.
#2 However, all Evacuees, etc. for a long period experience mental anguish in general, due
to being substantially hindered from leading a normal daily life over a long period, andthinking about individual living conditions, such as staying in temporary housing or
staying in an inn or hotel, it is hard to categorically state that there are clear differencesin living conditions. Therefore, instead of categorising by type of accommodation, etc., it isappropriate to establish reasonable differences based primarily on the timing of evacuation,etc., by performing a uniform calculation and adding a certain monetary amount for acertain period after the accident, based on the duration of stay only in evacuation centres,etc., where it is recognised that the evacuation lifestyle is relatively harsh.
#3 The six-month period after the accident (Stage 1) until an infrastructure for long-term
evacuation living was set up, such as the possibility for the majority of Evacuees to moveinto temporary housing, etc., was arguably the worst in terms of mental anguish.
Regional communities, etc. were suddenly scattered over a wide area; and people weredeprived of their formerly quiet daily lives and living infrastructure, and, of necessity led
an inconvenient life of evacuation away from their homes while worrying about when
they might be able to return.
#4 Mental anguish continues in the six-month period from the end of Stage 1 (Stage 2), as
people still have, of necessity, to live an inconvenient life away from home and continue
to worry about when they will be able to return. On the other hand, elements such as theconfusion, etc. resulting from the sudden loss of daily life and living infrastructure
essentially do not appear at this stage. In this period, an infrastructure for long-term
evacuation has been established, including the possibility for the majority of people tomove into temporary housing, etc., people gradually adapt to their new environment at
the place of evacuation, and elements such as the inconvenience of evacuation are
reduced compared with Stage 1. However, the duration of this period may be revised asnecessary.
#5 In the period after the end of Stage 2, when it becomes possible to actually return
home, etc. (Stage 3), at some point the prospect for an end to evacuation, etc. emerges,
and a positive approach can be taken, such as preparing to return home and theestablishment of a living infrastructure, etc. However, at this point it is difficult toindicate in specific terms when this will occur, and therefore it is considered appropriate
to consider the calculation of damages for Stage 3 again in the future, based on various
circumstances including the status of conclusion of the accident.
#6 For persons who had sheltered indoors in an In-house Evacuation Area until
designation of the In-house Evacuation Area was lifted, the amount of damages iscalculated so as not to exceed the amount of damages for a person who had been subject
to evacuation or had to reside outside an Affected Area.

3. Calculation method for damages

 Guidelines
When calculating the amount of damages, the following method is conceivable, based on
Stages 1 to 3 described in Section 2 above.
I) For Stage 1, a sum of JPY 100 000 per person is the guideline figure. However, for a
person who, of necessity, lived as an Evacuee in an evacuation centre, etc. during thisperiod, the guideline figure is JPY 120 000 per person for this period. Further, for a person
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house Evacuation Area was lifted (excluding a person who evacuated from a Deliberate
Evacuation Area, or a person who began evacuation from an Evacuation-Prepared Area inCase of Emergency not later than the date one day before the date on which the
Guidelines were established), the guideline figure is JPY 100 000 per person.
II) For Stage 2, a sum of JPY 50 000 per person is the guideline figure.
III) For Stage 3, it is considered appropriate to consider the calculation of damages again in
the future, based on various circumstances including the status of conclusion of the accident.

 Notes#1 As stated in Section 2, Note #3, Stage 1 was a particularly difficult period in terms ofmental anguish. Therefore, when calculating the damages for this period, consideringthat mental anguish unaccompanied by injury is being considered in this case, thepayment for mental anguish provided by Compulsory Automobile Liability Insurance(a daily sum of JPY 4 200, or JPY 126 000 monthly) was taken as reference. Consideringthat as a result of the accident, people were deprived of their quiet daily lives and living
infrastructure, and had, of necessity, to lead an inconvenient life of evacuation awayfrom their homes while worrying about when they might be able to return, sufferingsignificant pain and incurring an increase in living expenses, a guideline figure of
JPY 100 000 per person is judged to be reasonable.
However, it is difficult to deny that long-term evacuation in an evacuation centre, etc.,
particularly at the beginning of evacuation, was relatively harsh in consideration offactors such as the living environment, convenience and level of privacy, as comparedwith other places of accommodation. Taking this into consideration as an element to be
added to the amount of damages, a guideline figure of JPY 120 000 per person isconceivable, but only for the period of evacuation in an evacuation centre, etc.
#2 As stated in Section 2, Note #4, in Stage 2 the sudden confusion, etc. seen in Stage 1
has passed and an infrastructure for long-term evacuation is established, including thepossibility for the majority of people to move into temporary housing, etc., if they so wish,
and the harshness of evacuation life is also reduced as compared with Stage 1. Therefore,a guideline figure of JPY 50 000 per person per month is conceivable, with reference also
to movement in the mental anguish payment over time as defined in the Calculation
criteria for Damages in Civil Traffic Accident suits (Nichibenren (Japanese Federation of Bar
Associations) Traffic Accident Consultation Centre).
#3 As stated in Section 2, Note #5, with regard to Stage 3, at some point the prospect foran end to evacuation, etc. emerges, and a positive approach can be taken, such as
preparing to return home and the establishment of a living infrastructure, etc. However,at this point it is difficult to indicate in specific terms when this will occur, and therefore
it is considered appropriate to consider the calculation of damages again in the future,
based on various circumstances including the time when the accident is considered over.
#4 While it is deemed reasonable to calculate the damages on a monthly basis, this is
only a guideline and does not preclude a flexible approach when making specificcompensation.
#5 For persons who had to take shelter indoors in an In-house Evacuation Area until thedesignation of In-house Evacuation Area was lifted, the amount of damages is calculated
so as not to exceed the amount of damages for a person who had been subject toevacuation or had to reside outside an Affected Area, and a guideline figure of JPY 100 000
is appropriate.

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4. Commencement and termination of damage occurrence GuidelinesI) In principle, commencement of the occurrence of damage is 11 March 2011, the date on
which the accident occurred, regardless of the date on which individual applicable
persons did evacuated, etc.
II) With regard to the termination of damage occurrence, essentially it is reasonable to set
this as the date on which the applicable persons are able to return to their homes in the
Affected Areas, but as it is difficult to predict the exact timing of this at the moment, we
will continue to consider the issue.

 Notes#1 Regarding commencement of the occurrence of damage to the applicable persons, it isconceivable for this to be the date on which the individual applicable persons actually
evacuated, etc.
However, although the actual dates of evacuation of the applicable persons vary
according to the circumstances, it is conceivable that even in their life prior to evacuation,etc., they experienced mental anguish due to being substantially hindered from leading anormal daily life over a long period from the date on which the accident occurred,virtually equivalent to the mental anguish experienced after evacuation, etc. andtherefore it is deemed reasonable to set 11 March 2011 as the date of commencement of
the occurrence of damage, being the date on which the accident occurred.
However, with regard to an applicable person who has their main home in an
Evacuation-Prepared Area in Case of Emergency (child, pregnant woman, person
requiring nursing care, hospitalised patient, etc.) and evacuated after the date on which
the Guidelines were established, the date on which the person actually evacuated is thecommencement date.
#2 Further, regarding the termination of damage occurrence, essentially it is reasonable
to set this as the date on which it became possible for the person to return to their homein the Affected Area. However, as it is difficult to predict the exact timing of theapplicable persons’ return home at the moment, it is viewed appropriate to consider the
specific timing of termination again in the future, based on various circumstances
including the time when the accident is considered over.

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GUIDELINESInterim Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the Tokyo Electric Power Company
Fukushima Daiichi and Daini Nuclear Power Plants
5 August 2011
Dispute Reconciliation Committee for Nuclear Damage Compensation

Foreword
When radioactive debris was released over a broad area of northeastern Japan following
the 11 March 2011 accident at the Tokyo Electric Power Company (TEPCO) Fukushima
Daiichi and Daini nuclear power plants (referred to below as “the accident”), it becamealmost inevitable that the situation would become far more serious. As a result, theconsequences have been felt far and wide, not just in Fukushima prefecture but also insurrounding prefectures, with well over 100 000 residents alone receiving instructions fromthe Japanese government to evacuate or to take shelter indoors, and many business
operators being forced to abandon part, if not most or even all of their operations.
The damage incurred by these residents and business operators in the areas surrounding
the plants are unprecedented in their scale and scope. Moreover even today, some fivemonths after the accident, work is still underway to bring the ongoing discharge ofradioactive material under control so that some degree of resolution can be achieved
regarding the accident. While the government instructions to evacuate issued in theimmediate wake of the accident were partially terminated, on 22 April residents in new
areas were instructed to engage in deliberate evacuation, and then on 30 June certain
specific spots were placed under evacuation recommendations due to the recording of highlevels of radiation. Finally, since 8 July we have received new reports showing that we still
have not reached a resolution regarding the radiation-related damage from this accident,
notably on the detection of cesium 137 in beef and rice straw in several prefectures.
While the central government and local authorities have been providing a range of support
measures, the situation is still acute for those impacted by the accident, such as theresidents and business owners forced to evacuate, as well as producers and others in the
Affected Areas whose businesses have been disrupted by measures like the restrictions
placed on the shipment of goods. It is imperative that these individuals be provided with anappropriate level of relief in a fair and prompt manner.
To that end, the Dispute Reconciliation Committee for Nuclear Damage Compensation(“Committee”) decided, pursuant to the Act on Compensation for Nuclear Damage(“Compensation Act”), which governs the issue of compensation for nuclear damage, tourgently draft the “Guidelines for Determining the Scope of Nuclear Damage and Other
General Guidelines to Assist in the Voluntary Resolution of Disputes by the Parties”(Section 18-2 (ii) of the Compensation Act). In light of the circumstances above theCommittee decided to draft the various guidelines starting with guidelines on thosecategories of damage mostly likely to fall under nuclear damage, so as to provide victims
with relief as early as possible.

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These guidelines (“Interim Guidelines”) will give an overall picture of the nuclear damage
currently caused by the accident. It is the Committee’s hope that the approach to the scopeof the damage we have expressed in these Interim Guidelines will contribute to facilitating
talks and shaping an agreement between the victims and TEPCO. It must also be
remembered that it is not the Committee’s view that specific forms of damage notexplicitly mentioned in these Interim Guidelines will not be compensated. The Committee
expects TEPCO to establish, as a matter of urgency, a process that will allow the majority ofvictims to receive appropriate compensation in a fair and prompt manner, certainly fordamage that is explicitly described in these Interim Guidelines, but also for nuclear damage
that is not.

Part 1. About these Interim Guidelines
1. The Committee has already adopted and released the following documents: (1) on
28 April 2011, the Preliminary Guidelines on Determination of the Scope of Nuclear Damage
resulting from the Accident at the TEPCO Fukushima Daiichi and Daini Nuclear Power
Plants (“Preliminary Guidelines”); (2) on 31 May 2011, the Secondary Guidelines on
Determination of the Scope of Nuclear Damage resulting from the Accident at the TEPCO
Fukushima Daiichi and Daini Nuclear Power Plants (“Secondary Guidelines”); and (3) on
20 June 2011, the Supplement to Secondary Guidelines on Determination of the Scope of
Nuclear Damage resulting from the Accident at the Fukushima Daiichi and Daini Nuclear
Power Plants (“Supplement”). The Committee was to examine matters such as items ofdamage not covered by documents and their scope at a future date.
2. These Interim Guidelines now add matters the Committee examined after deciding
and announcing the matters already set out in the Preliminary Guidelines and Secondary
Guidelines (including the Supplement; the same applies below). To a certain extent theseInterim Guidelines also set out types of damage recognised as warranting compensation.
Specifically, it was decided to describe in these Interim Guidelines, in as much detail as
possible, the following types of damage: (1) damage relating to government evacuation
instructions; (2) damage relating to the declaration by the Government of marine
exclusion zones and no-fly zones; (3) damage relating to instructions issued by theGovernment or a government agency restricting the shipment of agricultural, forestry or
fishery products; (4) damage relating to any other government instructions; (5) “rumourrelated” damage; (6) “indirect damage”; and (7) damage from radiation exposure, as wellas (8) measures for adjustments between government benefits paid to a victim andcompensation that the victim receives, and (9) the property and other damage sustainedby local government and so on.
3. The types of damage judged in the Preliminary and Secondary Guidelines previously
decided and released as qualifying for compensation have been incorporated in theseInterim Guidelines, along with matters such as their scope, to the extent necessary. Thismeans these Interim Guidelines supersede the Preliminary and Secondary Guidelines
with respect to matters such as the scope of future damage.
4. Given that the accident has not been resolved, the situation points to an increase in theinventory of damage ultimately sustained. Although these Interim Guidelines describe
those types of damage, along with matters such as the scope of those items, that arecapable of a certain degree of classification as damage warranting compensation, types ofdamage not included in these Interim Guidelines are not automatically disqualified fromcompensation. It is still possible for damage to be recognised as being in a sufficiently
causal relationship, depending on the particular circumstances surrounding that damage.
Lastly, as the situation on the ground continues to evolve, for example when the accident
is finally resolved and current evacuation areas are re-assessed, the Committee will reexamine the matters to be addressed in further guidelines as is necessary.

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GUIDELINESPart 2. Concepts common to the types of damage
1. The Compensation Act states that a nuclear operator’s liability extends to “nuclear
damage” due to the operator’s reactor operation etc. (Section 3). As for the scope of thatdamage, however, there is no reason to take the view that this will be especially different
from the scope of damage in any standard claim in tort for damages. When drafting these
Guidelines therefore, the Committee also took the view that so long as there was a legally
sufficient cause between a type of damage and the accident – namely that it was damage
within a scope that is judged as logically and reasonably arising from the accident based
upon the social convention – then it was included in nuclear damage.
Specifically, while not all damage that occurred in fact as a result of the accident will
qualify for compensation as “nuclear damage”, the following types of damage will qualify
for compensation to a certain extent: damage that was a consequence of a government
instruction, etc. issued on reasonable grounds to protect the life or health of citizens fromthe accident; damage arising through reasonable avoidance behaviour in markets; andindirect damage necessarily arising in third parties as a result of these other two types ofdamage having arisen.
The purpose of the scheme of compensation for nuclear damage in the Compensation
Act is to provide relief for the victims of damage arising as a result of the accident bycompensating the victims for that damage, just as is the case with an ordinary claim in
tort. For their part, however, the victims are also expected to take steps to avoid or
mitigate the damage they sustain through the accident as much as possible. This means
it must also be noted that if a victim neglected without reasonable cause to take such
steps, which it was in fact possible for the victim to take, it is conceivable thatcompensation will be limited.
2. With respect to those types of damage that might arise on an ongoing basis, such as
evacuation expenses, business damage, or damage due to incapacity to work, the criteria for
determining an end date for these types of damage will present difficulties. On this point theCommittee decided to indicate those types of damage on which the Committee can express aview at the current time. The Committee will examine those types of damage for which thisis not the case at a future time as necessary, in keeping with how events progress.
3. When drafting these Interim Guidelines, our Committee referred to the following reports
prepared by the Nuclear Damage Investigation Study Group in connection with the JCO Co.,
Ltd. Tokai Plant Nuclear Accident of 30 September 1999: the “Nuclear Damage ResearchGroup’s Interim Confirmation – Views on business damage”, dated 15 December 1999, andthe “Investigation Study Report on Nuclear Damage caused by the Critically Accident ofFuel Facility at the JCO Co., Ltd. Tokai Plant”, dated 29 March 2000.
But this accident far and away exceeds the Tokaimura nuclear accident in terms of its
nature and gravity and in other respects such as the scale, extent, and duration ofdamage caused to surrounding areas. Given this, as well as the diversity of both thevictims and the types of damage sustained, the Committee gave ample consideration to
the special circumstances of this accident.
4. The cause of the accident was an underwater earthquake in the Pacific Ocean off thecoast of the Tohoku region and the chain of disasters that resulted from the tsunami
generated by that earthquake (collectively known as the “Great East Japan Earthquake”).
But as stated in paragraph 1 above, under the Compensation Act the liability of a nuclear
operator extends purely and simply to “nuclear damage” due to the reactor operation etc.
during such operation (Section 3). This means that damage caused by the earthquake ortsunami does not qualify for compensation under the Compensation Act.
However, for some types of damage covered by these Interim Guidelines, for example“rumour-related” damage, it will not be possible to make a clear distinction, in somecases, between damage caused by the accident and damage caused by the earthquake

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GUIDELINES

and/or tsunami. In such cases, since it would be unfair to compel victims to provide
evidence of the exact difference, one option would be to presume, to a reasonable extent,
whether or not specific damage constitutes “nuclear damage” as well as the amount ofthat damage, for example through comparisons with damage in areas which were also
damaged in the Great East Japan Earthquake but where the accident had comparatively
less impact. And TEPCO will be asked to respond in a practical and commonsensemanner in these cases.
5. On the issue of calculating an amount of damages, as a general rule compensation is tobe paid, within reason, for the actual cost of damage based on whether or not damage
exists in the individual case, and on evidence of the amount of damage. But in view of thefact that just the number of residents alone who became victims of the accident as a resultof government evacuation instructions reaches well over 100 000 and that those victims are
currently in need of prompt relief, for some types of damage, we could also consider
methods like authorising a predetermined amount of compensation that has been
calculated on a reasonable basis. However if such a method is in fact adopted, if a victim
also provides evidence of an actual amount of damage which exceeds the set figure, it isconceivable that the figure would be increased to the extent necessary and reasonable.
In cases where, for example, evacuation makes it difficult for a victim to gather evidence,
it is possible that the level of substantiation required could be eased when providing
compensation, to the extent that is necessary and reasonable. And for the purpose of theprompt processing of large volumes of claims, it is also possible that a practical
calculation method would be employed, based for example on objective statistical data.
6. With respect to the method of payment of compensation, given that victims are
currently in need of prompt relief, TEPCO will be required to respond in a practical andflexible manner. Examples would be where a set figure of compensation or a portion of aclaimed amount is paid at certain regular intervals for recurring damage, even prior to a
final determination of the full amount of compensation for the damage.

Part 3. Damage relating to government instructions to evacuate
Affected Areas
The following areas were included within the instructions (see Note #2 in the section on
Evacuees below) issued by the Japanese government to evacuate (see Note #1 in thesection on Evacuees below) (these areas include the “sites” covered by Section 5 below;
the same applies below).

1. Evacuation Area
These are the areas for which the Japanese government issued an instruction under the
Act on Special Measures concerning Nuclear Emergency Preparedness (“Nuclear
Preparedness Act”) to heads of local government entities for the evacuation of residents:i)the area within a 20-km radius from TEPCO Fukushima Daiichi nuclear power
plant (this area was designated Restricted Area on 22 April 2011, meaning that asa general rule the public was prohibited from entering this area); andii)

the area within a 10-km radius from TEPCO Fukushima Daini nuclear power
plant (on 21 April 2011 this was reduced to an area within an 8-km radius).

2. In-house Evacuation Area
This is the area for which the Japanese government issued an instruction under the
Nuclear Preparedness Act to heads of local government entities for residents to takeshelter:

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the area between a 20-km radius and a 30-km radius from TEPCO Fukushima
Daiichi nuclear power plant.

Note: On 25 March 2011, the Chief Cabinet Secretary announced that the Government
would promote voluntary evacuations from communities within this In-house
Evacuation Area that had found it difficult to keep functioning normally as aconsequence of the instruction. However the designation as In-house Evacuation Area
was terminated on 22 April 2011 due to the designation of the areas as the Deliberate
Evacuation Area described in Section 3 below and the Evacuation-Prepared Area in Caseof Emergency described in Section 4.

3. Deliberate Evacuation Area
The areas for which the Japanese government issued an instruction under the Nuclear
Preparedness Act to the heads of local government entities for a planned evacuation:
iv)

Areas in the perimeter region beyond the 20-km radius from the TEPCO
Fukushima Daiichi plant where there is a risk that cumulative radiation levels
will reach 20 millisieverts within one year from the date of the accident, andfrom where the residents were required to make a planned evacuation within
about one month.

4. Evacuation-Prepared Area in Case of Emergency
Areas for which the Japanese government issued an instruction under the Nuclear
Preparedness Act to the heads of local government entities for residents to be ready tomake an emergency evacuation or to take shelter:v)

Those areas between a 20-km radius and a 30-km radius from the TEPCO
Fukushima Daiichi nuclear power plant, excluding any “Deliberate Evacuation
Area” where residents were required to be ready to be removed at any time inorder to evacuate the area or take shelter for the purpose of evacuating in an
emergency; and where on-going voluntary evacuation was required; and whichchildren, pregnant women, persons requiring nursing care, hospitalised patients,
etc. were especially required not to enter.

Note: The outer borders of these Evacuation Areas, In-house Evacuation Areas, Deliberate
Evacuation Area, and Evacuation-Prepared Area in Case of Emergency do not necessarily
sit exactly at the end of the radius line from the TEPCO Fukushima Daiichi or Daini
nuclear power plants – each outer border has been determined based on thecircumstances of each relevant local government entity which the border cuts through,including the special features of administrative areas and rural sub-districts.

5. Evacuation Recommendation Spots
These are specific individual residences designated by the Japanese government as sites
where the Government has placed residents on a state of alert and supported andpromoted their voluntary evacuation:vi)

Sites designated by the Government for individual residences in areas outside a
Deliberate Evacuation Area or exclusion zone, with an ongoing air dose rate thatwill presumably be a cumulative radiation level in excess of 20 millisieverts for
one year from the date of the accident, which is not expected to spread acrossthat locality, for which the Government has announced it will put residents on astate of alert and support and promote their voluntary evacuation.

6. Area where a local government entity asked residents to evacuate temporarily
The area where Minami Soma City, exercising its own judgement, asked residents toevacuate temporarily (excluding the areas in Sections 1 to 4 above), as follows:
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GUIDELINESvii) Minami Soma City asked residents across that city to evacuate temporarily,
excluding any residents in the areas in Sections 1 to 4 above.
Note: On 16 March 2011, Minami Soma City asked its residents to evacuate temporarilyon grounds including ensuring their safety, and the City provided support with that
temporary evacuation. On 22 April 2011, when the In-house Evacuation Area designation
was terminated, Minami Soma City indicated its view to residents who had evacuatedfrom the area in Section 6 above that those residents who could carry on their lives intheir own homes were permitted to return to their homes.

Evacuees
The scope of Evacuees, meaning individuals who evacuated, etc. of necessity inaccordance with evacuation instructions, is as follows:
1. Individuals who, after the accident were, of necessity, removed from an Affected Area
in order to evacuate or take shelter outside that area (to “evacuate”), and who continue toreside temporarily outside that area (to “reside temporarily outside an Affected Area”)(excluding, however, individuals other than children, pregnant women, persons requiring
nursing care, hospital patients and others who on or after 20 June 2011 started toevacuate from Evacuation-Prepared Area in Case of Emergency (excluding Evacuation
Recommendation Spots) to outside that area);
2. Individuals who were outside an Affected Area at the time of the accident and who,
despite having their principal residence in the Affected Area (their “residence”), ofnecessity continue to reside temporarily outside the Affected Area; and3. Individuals who, of necessity, take shelter in an In-house Evacuation Area (to “takeshelter”).

 Notes#1 To “evacuate,” to “reside temporarily outside an Affected Area,” and to “take shelter”
as defined above will be referred to collectively as to “evacuate, etc.”
Evacuees also include individuals such as those who after having evacuated at some stage
return to their residence where they take shelter (for the purpose of calculating the amountof damages to such individuals, however, these differences may be taken into consideration).
#2 An “evacuation instruction” is a collective term meaning an instruction or request, or
support or promotion, from the Japanese government, or immediately after the accident
from a local government entity based on its reasonable judgement, in an Affected Area,
for residents to evacuate, etc. Although different evacuation instructions were issued toresidents in the Affected Areas above depending on the area, where a resident in an area
covered by a Japanese government instruction to evacuate etc., or where a resident in anarea where the government promoted, etc. voluntary evacuation (excluding individuals
other than children, pregnant women, persons requiring nursing care, hospital patientsand others who started on or after 20 June 2011 to evacuate from Evacuation-Prepared
Areas in Case of Emergency (excluding an Evacuation Recommendation Spot) to outsidethat area), acted on a decision to evacuate outside an Affected Area, or being outside thatarea acted on a decision to refrain from returning to his or her residence in that area,
since those residents were justified in acting on those decisions, they fall under an eventof evacuating or residing temporarily outside an Affected Area “of necessity” by force ofan evacuation instruction. On the issue also of a local government entity asking residents
to evacuate temporarily based on a decision by that entity, in light of the specificcircumstances surrounding that request at the time, namely that it was madeimmediately after the accident occurred and that it was a request to evacuate
temporarily from a local government area, most of which was gradually designated as an
Evacuation Area or In-house Evacuation Area, since we find that the decision to make

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that request was not unreasonable, temporary evacuations made on the basis of thatrequest will also be treated the same as evacuating “of necessity” by force of anevacuation instruction. Lastly, with respect to those individuals who evacuated etc. prior
to an evacuation instruction, since in light of the subsequent issuing of the evacuation
instruction we find that those individuals were justified both objectively and after thefact in taking such action, any consideration of this matter should proceed on the basis ofincluding those individuals in the category of “individuals who, of necessity,” evacuatedetc. by force of an evacuation instruction.
#3 The section on types of damage below basically sets out the scope and other details of
the damage suffered by Evacuees. However, some types of damage (such as damage due
to examination expenses, business damage, or incapacity, etc. to work), damage incurredby those individuals with a residence in an Affected Area who did not evacuate after theaccident (an “Affected Area temporary resident”) is also included.

Types of damage
1. Examination expenses (human) Guideline
Where, at any time after the accident, an Evacuee who evacuated or took shelter, or an
Affected Area temporary resident, arranged as necessary and appropriate for
examination to ascertain exposure to radioactive material, etc., the examination
expenses incurred by that resident (including incidental costs, such as transport
expenses incurred to receive testing; the same applies in Note #3 below) will berecognised as damage warranting compensation.

 Notes#1 Radiation is hazardous, and depending on the amount of radiation received can have
major negative consequences on the human body. Moreover, radiation is not somethingthat a human being can detect themselves with any of their five senses. For that reason, asa general rule it can be said to be reasonable for at least those Evacuees who as a result of
the accident evacuated from an Affected Area to outside that area or took shelter in such aarea, or Affected Area temporary residents, to be concerned that they have been exposed toradiation and to arrange to be tested to entirely dispel that concern.
#2 If an individual who evacuated or took shelter or an Affected Area temporary resident
is tested free of charge, since that individual or resident will have incurred no actual
examination expenses, this will not be damage warranting compensation.
#3 If examination expenses arose as a result of the accident prior to an evacuation
instruction from the Japanese government, it can be presumed that the testing was
arranged based on reasonable judgements due to the accident, and in the absence of
reasonable grounds for disqualifying these examination expenses for compensation,these expenses can be recognised as damage warranting compensation, to the extent
necessary and reasonable.

2. Evacuation expenses

 GuidelinesI) The following expenses incurred by Evacuees can be recognised as damage warranting
compensation, to the extent necessary and reasonable.
(1)transport expenses and removal expenses for household belongings incurred inorder to evacuate from an Affected Area;

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accommodation expenses incurred as a result of residing temporarily, ofnecessity, outside an Affected Area and expenses incurred incidentally to that
accommodation (collectively, “accommodation expenses”); and(3)

if an Evacuee’s living expenses increase as a result of evacuation etc., the portion
representing the increase.

II) The method for calculating an amount of evacuation expenses shall be as follows:(1)

Evacuation expenses that are transport expenses, removal expenses forhousehold belongings, and accommodation expenses that were actually incurred
by Evacuees will qualify for compensation. Taking those actual expenses to be
the amount of damage should be a valid calculation method.
However, where substantiating an amount of damage through receipts or othermeans is difficult, substantiating the relevant amount of damage by estimating the
average expense for that damage should also be recognised as a valid method.

(2)

As a general rule, for evacuation expenses comprising an increase in living
expenses, we find that adding this to the amount defined under Section 6(Damage for Mental anguish), Guideline I) (1) or (2) below and using that
increased amount as the amount of damage for both will be a fair and valid
calculation method. For a specific example of this calculation method, see
Section 6 below.

III) Evacuation expenses that arise after the elapse of a reasonable period from the momentof lifting, etc. an evacuation instruction (including not only lifting instructions or requests
but also, for example, indications of the view that it is permissible to return home; thesame applies below) will not qualify for compensation except in exceptional circumstances.

 Notes#1 With respect to expenses described in Guideline I), it is appropriate to treat asnecessary and appropriate expenses that fall under (1) and (2) – that is, evacuation
expenses incurred by Evacuees (specifically, transport expenses, furniture and household
goods removal expenses, and accommodation expenses), as qualifying as damage
warranting compensation.
In addition, with respect to expenses that fall under (3) – that is, an increase in living
expenses – such expenses may qualify as damage warranting compensation where, forexample, an individual who happened to take shelter needed to travel longer distances tobuy food, or where the food expenses of Evacuees increased because they were no longer
able or it became extremely difficult for them to make use of their own agricultural
produce (“incapacity”).
#2 With respect to the expenses in Guideline II) (1), according to our limited research on
issues including the particular evacuation circumstances and expenditures of individual
Evacuees, with respect to transport expenses, which are the first thing people would spendmoney on, many people incurred no actual transport expenses, people ended up in final
evacuation destinations all over the country, and a diverse range of services was used totransport them. It can therefore be assumed that there will be a considerable difference
between the amounts that individual residents incurred, even among those residents who
did incur their own transport expenses. With respect to accommodation expenses also, inmany cases these were incurred by local government entities and similar bodies, and since
it was also found that the number of people who are continuing to incur their own
accommodation expenses remains comparatively small, we estimate that there will also be
considerable variation between the amounts incurred by residents themselves, dependingon where they obtained accommodation. We also estimate with respect to furniture andhousehold goods removal expenses that there will be considerable variation between theamounts incurred by individual residents themselves. For all these types of damage

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therefore, a method of taking a certain fixed figure as the “average damage amount” andusing this as compensation for each Evacuee alike would not necessarily reflect thevictims’ actual circumstances, and furthermore would also not be considered fair.
In addition, if compensation is to be paid for the actual cost of damage incurred, in linewith the general rule, then providing evidence of those costs will become an issue.
However, if it is not possible to substantiate such amounts by way of receipts, forexample, substantiation methods that involve estimating an amount of damage using,for example, objective statistical data should be recognised. As examples of suchmethods, for transport expenses where individuals evacuated in their own vehicle, thecost of gasoline, etc. could be calculated based on the distance travelled to reach theirevacuation destination, and with accommodation expenses, the average accommodation
expenses in the vicinity where the particular residents had taken accommodation could
be calculated and used to estimate the amount of compensation. If this approach is taken,
we do not think victims would be particularly disadvantaged compared with if they werecompensated for their actual expenses in line with the general rule.
This means that, for evacuation expenses that are transport expenses, furniture andhousehold goods removal expenses, and accommodation expenses, it is fair andreasonable that individuals who actually incurred costs for these types of damage receive
compensation for the cost of these items, to the extent necessary and reasonable, in linewith the general rule.
#3 With respect to the expenses in Guideline II) (2), since it is thought that an increase inliving expenses arising as a result of evacuation etc. will have arisen for the majority of
Evacuees, while on the one hand these expenses will generally not be particularly
significant and the differences in these expenses between individuals will also be slight, inpractice it will be difficult to calculate the actual cost of these expenses with precision, andit would be unfair to compel Evacuees to substantiate their actual costs.
In addition, given that an increase in living expenses is closely tied to an individual’s
evacuation etc. living conditions, we decided that it would be fair and reasonable to add
these costs to the amount in Section 6 (Damage for mental anguish), Guideline I) (1) or (2)below to produce a fixed amount, bundling both together.
However, we envisage that this method of treating these expenses in this way – that is, as
an extra element to be added to either of those amounts for damage for mental anguish –would at most cover an ordinary range of expenses. Accordingly, if there are some
Evacuees who have incurred particularly significant increases in their living expenses, andif there were special circumstances which meant that those individuals had no choice but
to incur such a high level of expenses, then the actual costs should be recognised, in
addition, as damage warranting compensation, to the extent necessary and reasonable.
#4 With respect to the expenses under Guideline III), for areas that were no longer subject
to an evacuation instruction after the 22 April 2011 lifting of the In-house Evacuation Area
designation, and for areas in the Affected Areas described in Section 6 above (an area in the
Affected Areas described in Section 6 above may be deemed to be an area where on thatdate, residents were permitted to return to their residence in that area), those expenses will
not qualify for compensation after the elapse of a reasonable period since that date. The
end of July 2011 is to be taken as the benchmark for this reasonable period, based on
factors such as the state of restoration of public facilities within these areas, and taking
into consideration a period of preparation that residents would normally be regarded as
requiring in order to return to their residence following the date of lifting etc. However
where elementary and secondary school children, etc. who were attending schools, etc.
located in these areas, evacuated of necessity, the end of August 2011 is to be thebenchmark.
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suffered during evacuation and they will require ongoing medical treatment at anevacuation destination, etc. other than their own home.

3. Temporary access expenses

 Guideline
Transport expenses, furniture and household goods removal expenses, decontamination
expenses etc. incurred by Evacuees who have a residence in Restricted Area in order toparticipate in a “temporary access” organised by their municipality with the support of theJapanese and prefectural government (including accommodation expenses where it isessential for a resident to take overnight accommodation the night before or the night after;
the same applies below) can be recognised as damage warranting compensation, to theextent necessary and reasonable.

 Notes#1 Evacuees who have a residence in an exclusion area (excluding residents etc. who have aresidence within a 3 km radius from the TEPCO Fukushima Daiichi nuclear power plant),
which as a general rule the public is prohibited from entering, have been able to return totheir residence briefly by participating in “temporary access” organised since 10 May 2011by their municipality with the support of the Japanese and prefectural governments, for the
purpose of retrieving etc. items necessary for their immediate day-to-day lives. The
procedure for such “temporary access” is that those taking part gather at a designatedassembly point that also serves as the departure point (and staging area) for the relevant“temporary access”, from where they are transported to their residential areas in busesassigned to particular areas.
#2 However, some participants will undoubtedly incur transport expenses, etc. in getting toan assembly point from where they reside temporarily outside an Affected Area (and backagain after the visit), and some will also incur transport expenses from an assembly point
to their residential area, along with expenses for the decontamination of their person andproperty, removal expenses for their furniture and household goods (including their cars,etc.), and other similar expenses.
The general prohibition of entering into Restricted Areas, including residences in suchareas, was put in place as a result of the accident, from the perspective of ensuring thesafety of residents. As a consequence of this prohibition, this “temporary access” wasorganised for residents to retrieve articles from their residence that they need for their
immediate day-to-day lives. It follows that the necessary expenses of residents who took
part in such temporary access (“temporary access visitors”) can be regarded as damage in a
sufficient causal relationship with the accident.
It follows that transport expenses, furniture and household goods removal expenses, anddecontamination expenses, etc. incurred by temporary access visitors as described above
can be recognised as qualifying as damage warranting compensation, to the extent
necessary and reasonable.
#3 The same considerations discussed in Note #2 of Section 2 above will apply with respect
to methods for calculating transport expenses, etc. incurred for the purpose of temporary
access.

4. Homecoming expenses

 Guideline
Transport expenses, furniture and household goods removal expenses etc. incurred by
Evacuees in order to finally return to their residence inside an Affected Area due to the132

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lifting, etc. of an evacuation instruction for that Affected Area (including accommodation
expenses where it is essential for a resident to take overnight accommodation the night
before or the night after; the same applies below) can be recognised as damage warranting
compensation, to the extent necessary and reasonable.

 Notes#1 Where an evacuation instruction is terminated etc., after a “reasonable period” (being
the period required for preparation) has passed, residents will be able to return to theirresidences in the Affected Area.
As with the evacuation expenses described in Section 2 above, transport expenses,
furniture and household goods removal expenses, etc. incurred in this way in order to
finally return to a residence can be recognised as damage warranting compensation, to theextent necessary and reasonable.
#2 The same considerations discussed in Note #2 under Section 2 above will apply withrespect to methods of calculating transport expenses, etc. incurred for this purpose.

5. Injury or death Guidelines
The following damage suffered by Evacuees can be recognised as damage warranting
compensation:I) Lost earnings, medical treatment expenses, pharmaceutical costs, mental anguish etc.
arising as a result of suffering an injury, experiencing a deterioration in health to an extent
that requires medical treatment (including a psychological ailment; the same applies
below), contracting a disease, or dying, because of evacuating etc. of necessity due to theaccident.
II) For an individual who evacuated etc. of necessity due to the accident, increased medical
diagnosis expenses, medical treatment expenses, pharmaceutical costs etc. incurred inorder to prevent, for example, a deterioration in health to an extent that requires medical
treatment due to that evacuation etc.

 Notes#1 Where an Evacuee has suffered “injury or death” for having evacuated etc. of necessity
due to the accident, in addition to lost earnings caused by the Evacuation etc., theexpenditures on medical treatment expenses and pharmaceutical costs sustained, and the
Evacuee’s damage for mental anguish, etc., can be recognised as damage warranting
compensation. The value of this “damage for mental anguish due to injury or death”
should, unlike the case in Section 6 below, be calculated in addition, in proportion toamong other factors the degree of injury or loss of life.
#2 Even if an individual’s health did not actually deteriorate as a result of evacuating, etc.,
the elderly or those with a chronic ailment or disease would be justified in receiving
medical treatment that involves an increase in their existing expenses to the extent
necessary in order to prevent a deterioration in their health as a result of evacuating, etc.
This means that the resulting increase in expenses can be recognised as damage
warranting compensation.

6. Damage for mental anguish GuidelinesI) At least the following forms of psychological anguish (limited to psychological anguishwhich does not result in “injury or death”; the same applies below in this paragraph) thatJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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Evacuees experience from the accident can be recognised as damage warranting
compensation.
(1)

Psychological anguish caused to individuals who, of necessity, continuously(resided or) reside temporarily outside an Affected Area for an extended periodof time after actually evacuating from that Affected Area, or to individuals whoat the time of the accident were outside an Affected Area and who continuously(resided or) reside temporarily outside an Affected Area for an extended periodof time despite having a residence in that area, owing to extreme disruption overan extended period of time to the maintenance of a normal day-to-day life due
to having, of necessity, conducted their lives in a location other than their own
home for an extended period of time.

(2)

Psychological anguish caused to individuals who, until the lifting of a area’s takeshelter designation, of necessity took shelter in that area for an extended periodof time, owing to extreme disruption for an extended period of time to themaintenance of a normal day-to-day life including due to having, of necessity,
limited freedom of movement.

II) With respect to the amount of damage for “mental anguish” relating to Guideline I) (1)and (2), we consider a valid calculation method to be to calculate a fixed sum combining
this amount with the increase in living expenses in “evacuation expenses” under 2 above
in order to comprise the amount of damage for both items.
Each individual Evacuee who falls under either (1) or (2) in Guideline I) will qualify forcompensation, regardless of factors such as their age or the number of people in theirhousehold.
III) For the purpose of calculating a specific amount of damages for (1) in Guideline I), forthe time being the calculation period is to be divided into the following three stages andgoverned as follows:(1)

Six months from the date of the accident (Stage 1)1
For Stage 1, the benchmark is JPY 100 000 per person per month. However, forindividuals who of necessity lived in Evacuation etc. during this period in, forexample, an evacuation centre, gymnasium, or community centre etc. (collectively, “evacuation centre”), the benchmark is JPY 120 000 per person per monthfor the period they lived in evacuation in the evacuation centre.

(2)

Six months from the end of Stage 1 (Stage 2)
However, where for example a Restricted Area, etc. is reassessed, this stage will
be reviewed as necessary. For Stage 2, the benchmark is JPY 50 000 per person
per month.

(3)

From the end of Stage 2 until the end date (Stage 3)
For Stage 3, we consider it appropriate to re-examine the method of calculation
for the amount of damages based on the course of future events, such as theresolution of the accident.

IV) The following will apply with respect to the starting date and end date for theoccurrence of damage under Guideline I) (1):
(1)

1.

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As a general rule the starting date will be 11 March 2011, the date of the accident,
regardless of the particular date when an Evacuee evacuated etc. However, forchildren, pregnant women, persons requiring nursing care, hospital patients andothers who have a residence in an Evacuation-Prepared Area in case of
Emergency and who evacuated on or after 20 June 2011, and for individuals who

Note by the NEA: for the precise periods, see note p. 118.
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evacuated from Evacuation Recommendation Spots, the date when suchindividuals actually evacuated will be the starting date.
(2)

With respect to the end date, mental anguish that arises after the elapse of areasonable period following the lifting etc. of an evacuation instruction, will not
qualify for compensation, except in exceptional circumstances.

V) With respect to the amount of damage under Guideline I) (2), for an individual who
took shelter in an In-house Evacuation Area until the lifting of that take shelter
designation (excluding an individual who began their evacuation on or before 19 June
2011 from Evacuation-Prepared Area in Case of Emergency, and an individual who
evacuated from Deliberate Evacuation Area), the benchmark is JPY 100 000 per person.

 Notes#1 With respect to Guideline I), as mentioned above, provided it is damage with asufficient causal relationship to the accident, it will fall under “nuclear damage”. So evenwith respect to (a solatium for) damage for mental anguish which does not result in“injury or death,” so long as a sufficient causal relationship etc. can be recognised, we cansay this is damage that should be compensated.
However, the fact too that extreme disparities will be seen in psychological anguish which
does not result in injury or death, in terms of whether it is suffered or not, in what form andto what degree, depending on a range of factors such as age, gender, occupation, nature, dayto-day living environment, and family structure means there will naturally be limits on
making objective findings as to whether damage has been sustained, and its extent.
However, in the accident, radioactive particles were in fact released over a wide area in thevicinity, and evacuation instructions were issued in response. For that reason, it is clearthat residents in Affected Areas had their daily peaceful lives disrupted in reality, forexample by having to evacuate from their residences or to take shelter, of necessity. It canalso be recognised that the duration of their evacuation etc. was generally speaking lengthy,
and that the lives of a large number of people have been placed under extreme conditions.
It is therefore possible to conceive that there will be damage warranting compensationfrom the accident for at least Evacuees, in proportion to their circumstances, having
experienced psychological anguish for an extended period of time due to evacuation etc.,
in respect of at least, for example, the following: (i) of necessity having to evacuate andsubsequently reside temporarily outside an Affected Area for an extended period of time;(ii) at the time of the accident being outside an Affected Area and as a consequence,
despite having a residence in that Area, of necessity continuously having to reside
temporarily outside the Affected Area for an extended period of time, and of necessity
conducting their life in a location other than their own home for an extended period oftime; (iii) or as a consequence of having to take shelter of necessity, having limited
freedom of movement, etc. for an extended period of time, of necessity.
It follows that this damage for mental anguish can be recognised as damage warranting
compensation, to the extent that is reasonable.
#2 With respect to Guideline II), for the purpose of calculating an amount of damages under
Guideline I) (1) and (2), as mentioned under Guideline II) (2) in Section 2 above, we made thedecision that as a general rule it would be fair and reasonable to calculate a fixed sum byadding “an increase in living expenses” to evacuation expenses, and bundling the two
together.
In addition, since the right to claim damages is a right belonging to an individual,
compensation for damage is to be paid not to households, but to individuals. Furthermore,while factors such as a person’s age or the size of their household will unquestionably
result in individual differences between the degree of psychological anguish that each
Evacuee in fact experiences, given our view that it is appropriate for the psychologicalanguish suffered by all individuals to qualify for compensation, and from our belief that
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GUIDELINESInterim Guidelines we decided not to set different amounts of compensation based on
factors like the age of individuals.
#3 For the individuals who had to evacuate etc. of necessity for an extended period of time,
everyone suffered the shared anguish of having their normal day-to-day lives extremely
disrupted for an extended period of time. Furthermore, it is also unlikely that, with respect
to people’s individual living conditions, sweeping statements can be made about clear
differences in living conditions between people taking accommodation in temporary
housing and the like, and those taking accommodation in a hotel, Japanese inn or similar.
This means that instead of making any classification based principally on factors such as
the accommodation facility, it would be appropriate to establish reasonable differences
based principally on the timing of the evacuation, etc., perform the same calculation foreveryone, and then add a fixed amount for a certain period after the accident just forpeople in evacuation centres etc., where living in evacuation is recognised as being
comparatively harsh, in proportion to the period of temporary residence.
#4 With respect to Guideline III) (1), in the six months following the accident (that is,Stage 1), a framework was being put in place to allow living in evacuation for an extended
period of time, such that for example it was becoming possible for most Evacuees to takeup residence in temporary housing and the like. These six months can be described as theperiod of greatest psychological anguish, when local communities were suddenly scatteredover a wide area, people’s peaceful day-to-day lives up to that point and the foundations of
their lives were taken away from them, with people removed from their homes, ofnecessity, to lead uncomfortable lives in evacuation, and to suffer, what is more, theanxiety of having no prospect of returning home.
It follows that when calculating the amount of damage for this period, we took into accountthe fact that this is not a case of damage for mental anguish resulting in physical injury;
used the solatia payable under automobile liability damage insurance (JPY 4 200 a day, or
JPY 126 000 as a monthly figure) as a reference point; and took into consideration theconsiderable psychological anguish experienced as described above, along with an increasein living expenses. In the result we decided that a reasonable benchmark would be
JPY 100 000 per person per month.
It is hard to deny however that living in evacuation for an extended period of time, inparticular in an evacuation centre at the start of the evacuations, would have been, in acomparative sense, a harsh way to live, more so than in other accommodation facilities interms of the living environment, comfort, and privacy. For this reason, taking this point
into account as a factor for increasing the amount of damage, and only in respect of aperiod of living in evacuation at an evacuation centre, a benchmark of JPY 120 000 perperson is conceivable.
#5 With respect to Guideline III) (2), during the six months following the end of Stage 1 (thatis, Stage 2), individuals will have experienced psychological anguish from, of necessity,
having to continuously lead a life mostly lacking in comfort in a location other than theirown home, and being in a state of ongoing uncertainty from not knowing when they will beable to return home. On the other hand those earlier factors, such as the turmoil ofsuddenly losing the life that they knew, along with the very foundations of that life, arenow basically absent in this stage, and during this time, with the foundations for living inevacuation for an extended period of time having been put in place and, for example, mostpeople being able to take up residence in temporary housing and the like, people will be
slowly adapting to their new environment in their evacuation destination. This means thatit can be seen how those factors such as the discomfort associated with living inevacuation will also be diminished compared to Stage 1. The length of this period, however,will be re-assessed as necessary.
When calculating the amount of compensation for this period, in view of the factors
described above, we took into account the fact that the foundations for living in evacuation
for an extended period of time were being put into place, such that for example it was

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becoming possible for most people to take up residence in temporary housing and the like
if they wished to, so that it was possible to take the view that the harshness of living inevacuation etc. was being mitigated compared to Stage 1. Our Committee also used as areference the variations in solatia with the passage of time listed in the Calculation Criteria
for Damages in Civil Traffic Accident Suits (produced by the Tokyo Branch of the
Nichibenren (Japanese Federation of Bar Associations) Traffic Accident Consultation Centre),and as a result we considered a benchmark of JPY 5 000 per person per month to be feasible.
#6 With respect to Guideline III) (3), during the period following the end of Stage 2 until theend date when, for example, people will actually be able to return home (that is, Stage 3),
while it will be possible for people to have a more forward-looking approach, for example
by allowing themselves the prospect of at some point, definitely ceasing to live inevacuation etc., making preparations to return home, and laying down the foundations fortheir lives, at the present time it is difficult to indicate specifically just when that will be.
We therefore think it appropriate to leave the calculation of an amount of damage forStage 3 for re-examination based on the course of future events, including the resolution of
the accident; except, however, for those areas where an end date has already been reached.
#7 With respect to Guideline IV) (1), it is feasible for the starting date for damage under
Guideline I) (1) to be the date when the qualifying individuals actually evacuated etc.
However, although these qualifying individuals will have evacuated on various dates
depending on their particular circumstances, in the fairly lengthy period following theaccident but prior to their evacuation etc., these individuals can also be regarded as having
experienced psychological anguish in their lives to a degree corresponding to postevacuation psychological anguish, as a result of the extreme disruption to the maintenanceof a normal day-to-day life. Our Committee therefore decided that it would be reasonable
to set 11 March 2011, the date of the accident, as the starting date for the occurrence of thisdamage for these individuals.
However, for children, pregnant women, persons requiring nursing care, hospital patientsand others with a residence in an Evacuation-Prepared Area in Case of Emergency who
evacuated on or after 20 June 2011, and for individuals who evacuated from Evacuation
Recommendation Spots, the starting date will be the date when such individuals actually
evacuated.
#8 The same considerations discussed in Notes #4 and #5 under Section 2 above will apply
with respect to Guideline IV) (2).
#9 With respect to Guideline V), individuals who fall under Guideline I) (2) – that is,
individuals who took shelter in an area until the lifting of that area’s take shelter
designation – in that they remained in their own homes, cannot imagine the psychologicalanguish of the sort experienced by those individuals who fall under Guideline I) (1) – that is,
individuals who evacuated and resided temporarily outside an Affected Area. However, on
the other hand, we took into account factors such as the fact that those taking shelter had
limited freedom of movement, for example in venturing outdoors, and while we decided
that their amount of damages should not exceed the amount of damages for individuals
falling under Guideline I) (1), we think that an appropriate benchmark for this amount ofdamages would be JPY 100 000 per person.
#10 While our Committee believes it would be reasonable to calculate amounts of damages
as monthly figures, since the figures for Guideline III) (1) and (2) and Guideline V) are justbenchmarks, this does not preclude a flexible approach in terms of specific compensation.
#11 Other forms of psychological anguish caused by the accident can also be recognised as
qualifying for compensation, depending on the individual circumstances involved.

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7. Business damage

 GuidelinesI) Where an individual who formerly operated or currently operates all or part of a businessinside an Affected Area in fact suffers a fall in revenue because, as a consequence of anevacuation instruction, that business is disrupted, for example because that individual isunable to operate the business, or the business suffers a decline in custom, the fall inrevenue can be recognised as damage warranting compensation.
This fall in revenue (“lost earnings”) will as a general rule be the difference between therevenue that the operator would have earned had it not been for the accident and therevenue that the operator did earn, less the difference between the costs that theoperator would have incurred had it not been for the accident and the costs that theoperator did incur (costs that the operator avoided incurring due to the accident).
II) In addition, extra costs that a business operator in Guideline I) incurred because of
disruption to his or her business as described above (such as extra costs relating toemployees, the cost of disposing of goods and/or business assets, and decontamination
expenses), or extra costs that arose in order to avoid disruption to the business or
because the operator made changes to the business (such as the cost of relocating abusiness base, and/or the cost of shifting or storing business assets) can also berecognised as damage warranting compensation, to the extent necessary and reasonable.
III) Furthermore, where after the lifting of such an instruction etc. a business operator
in Guideline I) suffers a fall in revenue because his or her business was disrupted as aconsequence of that instruction etc., the fall in revenue can also be recognised asdamage warranting compensation, to a reasonable extent. Extra costs that arose after
the lifting of the evacuation instruction etc. for the purpose of restarting all or part of abusiness (such as decontamination expenses and the cost of restoring machinery andother equipment) can also be recognised as damage warranting compensation, to theextent necessary and appropriate.

 Notes#1 Where an individual who was operating all or part of a business in an Affected Area
experiences disruption to that business owing to, for example, their own or theiremployees’ evacuation etc., of necessity, from that area or their being impeded fromtaking vehicles or goods etc. in or out of that area, due to an evacuation instruction,business damage relating to that business can be recognised as damage warranting
compensation.
Eligible businesses can be an agricultural, forestry or fishery business, a manufacturingbusiness, construction business, sales business, services business, transportation
business, medical services business, school education business, or any other business ingeneral. Eligible businesses are not restricted to for-profit businesses, and so long as partof a business is conducted in an Affected Area, it can be eligible.
The cost of disposing of or returning goods or business assets, an increase in costs forexample to procure goods, and extra costs relating to employees, etc., that arise as aresult of this disruption to business, or extra costs to avoid such a situation, such as thecost of the business operator’s relocation of a business site from inside to outside an
Affected Area, or the cost of removing business assets etc. required for the business(including, for example livestock) can also be recognised as damage warranting
compensation, to the extent necessary and reasonable.
#2 In addition to sales, “revenue” in Guideline I) also includes the corresponding portionof any grants etc. that the operator would have received as a consequence of conducting

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the business (for example, household income support grants for farmers, medical fees etc.
in a medical services business, and matching fund subsidies for private universities).
#3 Where, for example, a business operator did not deduct from lost earnings the rent
payments and employee wages, etc. that the operator avoided incurring as a result of theaccident, since it would be inappropriate for a business operator to also be inadvertently
compensated for selling expenses and general administrative expenses that they did notactually incur, “costs” in Guideline I) includes selling expenses and generaladministrative expenses in addition to the cost of the goods for sale.
#4 Where a business operator had already incurred costs associated with prospective
sales, or has costs that he or she necessarily incurs on an ongoing basis, it will beappropriate not to deduct these costs when calculating that operator’s fall in revenue(which is the amount of damage), given that the operator would not have avoided
incurring these costs as a result of the accident.
#5 While the reference to a “fall in revenue” in Guideline I) is not the same as thereference to a “reduction in income” in Guideline I) of Part 3, Section 5 of the Preliminary
Guidelines, here revisions have been made to define the meaning more clearly, and there
is little or no substantive difference between the terms.
#6 If a business operator suffered business damage as a result of the accident prior to an
evacuation instruction, since there are no reasonable grounds to disqualify this forcompensation, business damage on or after the date of the accident can be recognised asdamage warranting compensation.
#7 While it would be reasonable to set as the end date for business damage the day fromwhen an eligible business operator became able to conduct basically the same businessactivities as before, or equivalent business activities, at the present time it is difficult toindicate in every case the date until which compensation should apply, including theperiod for which a fall in revenue occurred as a result of the accident, and this issue will
be re-examined. During that re-examination however, since the option will be generally
be available for a business operator to, for example, relocate its business site or change
businesses, it will be necessary to keep in mind that there will be certain limits to thelength of time that ought to warrant compensation, and that there will be someindividuals who have made a special effort, for example, to change businesses early on.
#8 If a business operator has become insolvent or has closed their business, it is possible
for the lost or reduced value (reduction in value) of business assets, lost earnings for acertain period, and extra costs resulting from the insolvency or business closure, etc. toconstitute damage warranting compensation.
#9 If a business operator has already shut down a site in an Affected Area, relocated abusiness site, or changed businesses (including a temporary relocation or change), it ispossible for the reduction in value of their business assets; lost earnings for the period
until the business site relocation or change of business is achieved; the amount of thegap between the current and former revenue of the business for a certain period
following the business site relocation or change of business; and extra costs resulting
from a relocation described in Guideline II), etc., to constitute damage warranting
compensation.
#10 When examining the issue of a “certain period” during which lost earnings, etc. are to
attract compensation in the event of a business operator’s “insolvency” or “businessclosure” in Note #8 or “relocation” or “change of business” in Note #9, particular attention will
be given to cases such as those where changing occupations would be especially difficult,such as for older persons or individuals in an agricultural, forestry or fishery business, and tocases where the business operator has made a special effort.

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8. Damage resulting from incapacity to work

 Guideline
Where as a result of an evacuation instruction a worker with a residence or place of workin an Affected Area, or where a worker, employed by a business operator who suffers
business damage as described in Section 7 above, as a result of that business operator’sbusiness damage, experiences incapacity to engage in that work, then the reduction inthat worker’s salary etc. and, to the extent necessary and reasonable, the worker’s extra
costs, can be recognised as damage warranting compensation.

 Notes#1 Where a worker who of necessity evacuates, etc., experiences incapacity to work, forexample because the business conducted at their place of work, which was in an Affected
Area, is closed of necessity as a result of the accident, or their evacuation destination isfar from their place of work, then the reduction in their salary, etc. and, to the extent
necessary and reasonable, their extra costs can be recognised as damage warranting
compensation. Incapacity to work also includes termination from employment and otherforms of redundancy that are in a sufficient causal relationship with the accident.
#2 Because the lost earnings of self-employed individuals and family farm employees etc.
may qualify separately as business damage, they will not qualify as damage resulting
from an incapacity to work here.
#3 Where a worker’s employer pays that worker wages, etc. for any part of a period whenthat worker experiences incapacity to work, this constitutes an expense of the employer,
which is damage incurred by that employer, and ought to be taken into consideration as
business damage of that employer.
On the other hand, with respect to unpaid wages for work already performed, whileproperly speaking the employer ought to pay those wages, where it is recognised that theemployer’s inability to pay the wages is a result of the accident, the wages could also fallunder damage to the worker (see also Note #1 in Section 10 below; however, it should be
noted that if a worker does receive compensation, the worker’s claim to wages will besubrogated to the limit of that amount).
#4 If a worker suffers damage prior to an evacuation instruction as a result of incapacity
to work due to the accident, since there are no reasonable grounds to disqualify this forcompensation, the damage on or after the date of the accident can be recognised asdamage warranting compensation.
#5 For individuals who were not working but who had work scheduled, that work might
qualify as damage resulting from an incapacity to work that warrants compensation,
depending on how certain the work was.
#6 A reduction in wages etc. will as a general rule be the individual’s wages etc. prior to
the incapacity to work less their wages etc. after they experience the incapacity to work.
These “wages, etc.” also include the worker’s various allowances, bonuses, and likepayments.
#7 These extra costs, to the extent necessary and reasonable, also include the costs ofchanging residence, an increase in commuting expenses, and similar costs incurred
where a worker is reassigned or changes employment, etc., of necessity, because theirplace of work, which was in an Affected Area, of necessity, is relocated or suspends
operations, etc. as a result of the accident, as well as an increase in commuting expenses
and similar costs incurred by a worker who, of necessity, evacuates etc. from an Affected
Area.

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GUIDELINES#8 While it would be reasonable to set as the end date for damage resulting from anincapacity to work the day from when an eligible worker became able to engage inbasically the same work activities as before, or equivalent work activities, at the present
time it is difficult to predict the specific date, etc. until which compensation should apply,
including the period for which a reduction occurred as a result of the accident, and thisissue will be re-examined. During that examination, however, since it is generally
conceivable that the option will be available for an individual to respond to an incapacity
to work, for example by changing employment, it will be necessary to keep in mind that
there will be certain limits to the length of time that ought to attract compensation, andthat there will be some individuals who have made a special effort, for example, tochange employment or find temporary work early on.

9. Examination expenses (property)

 Guideline
With respect to property, which includes goods, that was located in an Affected Area,
where it is recognised as necessary and reasonable to arrange for testing to ascertain thesafety of the property, based on factors such as the nature of that property, examination
expenses incurred by the property owner, etc. (including incidental costs, such astransportation costs incurred for the purpose of testing; the same applies below) can berecognised as damage warranting compensation, to the extent necessary and reasonable.

 Notes#1 With a clear picture of the full damage caused by the accident yet to emerge, it isunknown whether or not any particular item of property was exposed to radioactive
material at levels that resulted in its value being completely lost or reduced.
The value or price of property, however, is greatly influenced by psychological andsubjective factors such as the impressions, thoughts, and awareness of the individuals
who buy and sell, etc. that property. Moreover, property testing often needs to be
conducted, for example as a preventive measure to stop the other party from backing outof the transaction, asking for the transaction to be cancelled or asking for a pricereduction, or to keep the escalation of business damage to a minimum.
It follows that judging by the standard of the knowledge of the average, ordinary person
and based on factors such as the type and nature of the property in question, where theowner, etc. of that property has deep concerns over the safety of that property and it isrecognised as necessary and reasonable for that owner, etc. to arrange for testing in orderto entirely dispel those concerns, it is reasonable to recognise those examination
expenses incurred as damage.
#2 If examination expenses as a result of the accident are incurred prior to an evacuation
instruction, it can be presumed that the testing was arranged based on a reasonablejudgement due to the accident, and in the absence of reasonable grounds fordisqualifying these examination expenses for compensation, these expenses can also berecognised as damage warranting compensation to the extent necessary and reasonable.

10. Loss or reduction, etc. of property value

 Guidelines
The following actual damage to property can be recognised as damage warranting
compensation. “Property” here includes both personal and real property.
I) Where it is recognised that a property in an Affected Area has lost some or all of its
value because of an inability to manage the property as a consequence of an evacuation

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etc., of necessity, due to an evacuation instruction, the extent to which the value wasactually lost or reduced, and to the extent necessary and reasonable, additional costs dueto that loss or reduction (such as the costs of disposing of or repairing the property), canbe recognised as damage warranting compensation.
II) In addition to Guideline I), property in an Affected Area:(1)

that is exposed to radioactive substances at levels that resulted in the loss or
reduction of its value; or(2)that does not fall under (1), but where it is recognised that, based on factors suchas the property’s type and nature and the mode of the transaction, and judging
by the standard of the knowledge of the average ordinary person, the property
has lost some or all of its value as a result of the accident, the extent to which
the value was actually lost or reduced, and to the extent necessary andreasonable, additional costs such as the costs of decontamination, can berecognised as damage warranting compensation.

III) Expenses incurred by an owner, etc. to prevent the complete loss of or reduction in
the value of a property in an Affected Area due to an inability to manage that property or
to its exposure to radioactive material can be recognised as damage warranting
compensation, to the extent necessary and reasonable.

 Notes#1 With respect to Guideline I), where it is recognised that property has lost some or all of
its value because of an inability to manage the property as a consequence of anevacuation, etc., the extent to which the value was actually completely lost or reduced,
and to the extent necessary and reasonable, additional costs due to that loss or reduction(such as the costs of disposing of or repairing the property), can be recognised as damage
warranting compensation.
However, where the property comprises goods, the decision on whether to assess thedamage as completely lost or reduced etc. property value (property’s objective value) or
as a fall in revenue as part of business damage (lost earnings) should be made inaccordance with the particular circumstances of the matter.
For property for which completely lost or reduced value cannot actually be confirmed
because the property cannot be entered, one option will be to calculate the lost or
reduced value by making an assumption as to the property’s most probable state.
#2 With respect to Guideline II) (1), where the property’s value is completely lost or
reduced because radioactive substances released in the accident came in contact withthe property, that loss or reduction of value, and to the extent necessary and reasonable,
additional costs due to that loss or reduction (such as the costs of decontaminating or
disposing of the property), will qualify for compensation.
#3 With respect to Guideline II) (2), even if it is not possible to go so far as to recognisethat the value of property was completely lost or reduced because radioactive substancescame in contact with the property as under Guideline II) (1), in view of the fact that thevalue or price of property is greatly influenced by psychological and subjective factors
such as the impressions, thoughts, and awareness of the individuals who buy and sell,etc. that property, where there is no alternative to recognising that the value of theproperty has been completely lost or reduced, based on factors such as the type andnature of the property, and the mode of the transaction, judging by the standard of theknowledge of the average, ordinary person, that loss or reduction in value and, to theextent necessary and reasonable, additional costs will constitute damage warranting
compensation.

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GUIDELINES#4 With respect to Guidelines I) and II), as a general rule, reasonable repair,decontamination and similar costs will be limited to the objective value of the property inquestion. However, with respect to cultural property, agricultural land, and other nonfungible forms of property, it will be possible to allow, as an exception, compensation in
an amount that exceeds the objective value of the property in question, within reason.
#5 Although as a general rule the value of an item of property, which constitutes thecriterion for damage, ought to be the amount corresponding to the property’s market
value at the time of the accident, where it is difficult to calculate the market value,another option is to make a calculation based on the property’s book value in accordancewith corporate accounting practices that are generally accepted as fair and appropriate.
#6 With respect to damage relating to a fall in the price of a real property sales agreement
or a real property lease (“real property contract”), where it can be recognised as certainthat such a contract would have been executed for the price originally arranged had it notbeen for the accident, the difference between that price and the actual contract price canbe recognised as damage warranting compensation, within reason.
With respect to damage relating to, for example, refusal to execute or repudiation during
the term of a real property contract, where it can be recognised as certain that the contract
in question would have been executed or continued had it not been for the accident, thatdamage can be recognised as damage warranting compensation, within reason.
With respect to, for example, damage caused by the refusal of finance that was to be
secured by real property or damage caused by the reduction of the rent under a leaseon real property, where it can be recognised as certain that had it not been for theaccident the finance would not have been refused or the rent would not have been
reduced, etc., that damage can be recognised as damage warranting compensation,
within reason.

Part 4. Damage relating to government marine exclusion zones and no-fly zones

Affected zones
1. A circular nautical area within a 30-km radius centered on the TEPCO Fukushima
Daiichi nuclear power plant, designated by the Government on 15 March 2011 as amarine exclusion zone (a circular area in the same nautical area within a 20-km radius
was also designated as an “exclusion zone” on 22 April 2011, and subsequently on
25 April, the marine exclusion zone was terminated for the entire nautical area, and at
the same time, a circular area between a 20-km radius and a 30-km radius, excluding theexclusion zone, was designated as an “Evacuation-Prepared Area in Case of Emergency”.
All these circular nautical areas designated before and after this change are referred tocollectively below as “marine exclusion zones”).
2. A circular airspace area within a 30-km radius centered on the TEPCO Fukushima
Daiichi nuclear power plant designated by the Government on 15 March 2011 as a no-fly
zone (reduced to a circular airspace area within a 20-km radius on 31 May 2011).
Types of damage

1. Business damage

 GuidelinesI) If as a result of the designation of the marine exclusion zones (i) fishermen had toabandon operations or navigation in the affected zones, or (ii) persons operating coastal

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shipping or passenger liner businesses had to navigate detouring around the zones, sothat there was an actual fall in revenue, or a detour-related increase in costs, the fall inrevenue or increase in costs can be recognised as damage warranting compensation, tothe extent that is necessary and reasonable.
II) If as a result of the designation of the no-fly zone, persons operating air transportbusinesses had to fly detouring around the zone, and costs increased, the increase incosts can be recognised as damage warranting compensation, to the extent that isnecessary and reasonable.

 Notes#1 The calculation method etc. for the fall in revenue will be the same as in Part 3,
Section 7 above (excluding however, portions associated with evacuations, etc.).
#2 Note that where persons imposed restrictions voluntarily before the Government
designated the marine exclusion zones and no-fly zone, it can be presumed that thesewere carried out based on reasonable judgements due to the accident, and falls inrevenue etc. as a result of these restrictions can also be regarded as damage warranting
compensation, in the absence of reasonable grounds for disqualification from compensation.

2. Damage due to incapacity to work

 Guideline
If due to worsened business conditions as a result of the designation of marine exclusion
zones and the no-fly zone, fishermen, coastal shipping operators, passenger liner
operators, air transport operators and others experience an inability to operate, navigate
or fly in those zones, so that workers who worked in those businesses experience anincapacity to work, of necessity, the reduction in wages etc. and to the extent necessary
and reasonable, the additional costs for such workers can be recognised as damage
warranting compensation.

 Note
The calculation etc. of the reduction in income will be the same as in Part 3, Section 8
above (excluding, however, portions associated with evacuations, etc.)

Part 5. Damage relating to government restrictions on shipment of agricultural,
forestry and fishery products
Affected activity
Damage due to instructions, etc. (“instructions”) issued by the Government concerning
the accident in relation to the shipping, planting and other production, manufacturing
and distribution of agricultural, forestry and fishery products and foods, and examination
for foods (including those issued by local government entities based on reasonablegrounds regarding the accident and those issued by producers’ associations based onreasonable grounds regarding the accident with the involvement of the government or
local government entities).

 Notes#1 Instructions “issued by the Government concerning the accident” includes, forexample, the following: instructions issued by the Government to the head of any local
government entity under the Nuclear Preparedness Act restricting the shipment of goods,

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instructions restricting consumption and planting, guidance restricting the provision of
pasturage and grazing etc., and prohibitions on sale and instructions on examination forfoods under the provisions of the Food Sanitation Act (Act No. 233 of 24 December 1947,
as amended).
#2 Instructions “issued by local government entities based on reasonable grounds
regarding the accident” includes, for example, where a prefecture asks the producer of a
specific item to voluntarily refrain from the shipment of goods or operations on the
grounds of examination results for the specific item in excess of a provisional regulatorylevel.
#3 Instructions “issued by producers’ associations based on reasonable grounds regarding
the accident with the involvement of the Government or local government entities”
includes, for example, designations of coastal waters off prefectures involved in theaccident as marine exclusion zones, and decisions made by fishermen associations in
those prefectures, in consultation with the prefecture, to voluntarily refrain fromoperations, based on circumstances such as the discharge of contaminated water.
Types of damage

1. Business damage

 GuidelinesI) If an operator engaged in agriculture, forestry or fishery, or in another business affectedby instructions, abandons an activity affected by the instructions, of necessity, due tothose instructions, and suffer an actual fall in revenue due to the business being impeded,that fall in revenue can be recognised as damage warranting compensation.
II) Further, the additional costs of an operator engaged in agriculture, forestry or fisheryor in another business affected by instructions, which are borne due to the impediments
to business mentioned above (such as costs of recalling products and disposal), or arise inorder to avoid impediments to business or to change businesses (such as the costs ofbuying alternate feed, and of replacing contaminated production materials), can also berecognised as damage warranting compensation, to the extent necessary and reasonable.
III) The actual fall in revenue and, to the extent necessary and reasonable, additionalcosts arising for a manufacturer or distributor that had, for example, alreadymanufactured or stocked items affected by the instructions and had to abandon sellingthe item or a product made from the item, of necessity, due to impediments that arose inrelation to that business, can also be recognised as damage warranting compensation.
IV) Further, after the lifting of the instructions as well, if operators affected by the
instructions or the manufacturers or distributors in III) suffer a fall in revenue due toimpediments that arose due to the instructions, that fall in revenue can also berecognised as damage warranting compensation. Also, the additional costs arising due tothe reopening of all or a part of a business after the lifting of the instructions (such as
preparing agricultural land or machinery for re-use, or decontamination) can also berecognised as damage warranting compensation, to the extent necessary and reasonable.

 Notes#1 In terms of Guideline I), if, for example, an instruction restricting the shipment ofagricultural or forestry products does not actually restrict planting itself, but in light ofcircumstances such as the time required from planting to shipment, and the fact that
there is no prospect of the restriction being terminated as at the time of planting, so thatabandoning all or some of the planting is regarded as unavoidable, the fall in revenue etc.

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that arises due to abandoning planting can also be recognised as damage due to the
instructions that warrants compensation.
#2 In terms of restrictions imposed voluntarily before instructions are issued, falls in revenue
etc. due to these restrictions can be presumed to have been carried out based on reasonablejudgements due to the accident and can be recognised as damage warranting compensation,in the absence of reasonable grounds for disqualification from compensation.
#3 The calculation method etc. for the fall in revenue will be the same as in Part 3, Section 7
above (excluding however, portions associated with evacuations, etc.).

2. Damage due to incapacity to work

 GuidelineIf, due to instructions, operating conditions worsen for operators affected by the
instructions or manufacturers or distributors in Section 1 Guideline III) above, so thatworkers who worked in those businesses experience an incapacity to work, of necessity,
the reduction in wages etc., and to the extent necessary and reasonable, the additionalcosts for such workers can be recognised as damage warranting compensation.

 Note
The calculation method etc. for the reduction in income will be the same as in Part 3,
Section 8 above (excluding however, portions associated with evacuations, etc.).

3. Examination expenses (property)

 Guideline
The costs of examination borne by agriculture, forestry, fishery and other operators carriedout under instructions, of necessity, can be recognised as damage warranting compensation.

 NoteIf examination is carried out, of necessity, due to demands etc. from trading partners,
this can constitute damage under Part 7 below (“rumour-related” damage).

Part 6. Damage relating to other government instructions
Affected activity
Damage due to instructions etc. issued by the Government concerning the accident, in
addition to the government instructions listed above in Parts 3 through 5.

 NoteInstructions here means guidance restricting water consumption, guidance on
examination for water, guidance on the handling of the by-products of water supply andsewerage treatment etc. where radioactive substances have been detected and guidanceon determining usage in school buildings and grounds etc.

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Types of damage

1. Business damage

 GuidelinesI) If there has been an actual fall in revenue due to the business of an affected operator being
impeded due to restrictions on activity, of necessity, due to the instructions, that fall inrevenue can be recognised as damage warranting compensation.
II) Further, the additional costs of operators affected by instructions, which are borne due tothe kind of impediments to business above (such as costs of recalling, storing or disposing ofproducts), or arise in order to avoid impediments to business or to change businesses (suchas the costs to a water operator of providing alternate water, decontamination costs and thecosts of reducing the amount of radiation in schoolyards and gardens), can also be recognised
as damage warranting compensation, to the extent necessary and reasonable.
III) Moreover, even after the termination of the instructions, if operators affected by the
instructions suffer a fall in revenue due to impediments that arose due to the instructions
that fall in revenue can also be recognised as damage warranting compensation. Also, theadditional costs arising due to the reopening of all or a part of a business after thetermination of the instructions can also be recognised as damage warranting compensation,
to the extent necessary and reasonable.

 Notes#1 Note that where persons imposed restrictions voluntarily before the instructions were
issued, it can be presumed that these were carried out based on reasonable judgements
due to the accident, and falls in revenue etc. due to these restrictions can also be regarded
as damage warranting compensation, in the absence of reasonable grounds fordisqualification from compensation.
#2 The calculation method etc. for the reduction in income will be the same as in Part 3,
Section 7 above (excluding however, portions associated with evacuations, etc.).
#3 In terms of measures for reducing the amount of radiation affecting elementary andsecondary school children and others from the soil in schoolyards and gardens, this will, atthe least, be pursuant to the results of investigations by the Government and local
government entities, and if the Government supports some of the cost of measures toreduce the amount of radiation, the additional costs for those measures that are borne byschools and other authorities can be recognised as damage warranting compensation, tothe extent necessary and reasonable.

2. Damage due to incapacity to work

 GuidelineIf, due to instructions, operating conditions worsen for operators affected by the instructions
so that workers who worked in those businesses experience an incapacity to work, ofnecessity, the reduction in wages etc., and to the extent necessary and reasonable, theadditional costs for such workers can be recognised as damage warranting compensation.

 Note
The calculation method etc. for the reduction in income will be the same as in Part 3,
Section 8 above (excluding however, portions associated with evacuations, etc.).

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3. Examination costs (property)

 Guideline
The costs of examination, carried out under instructions, that are borne by operators affectedby those instructions, of necessity, can be recognised as damage warranting compensation.

 Notes#1 Note that where testing was carried out voluntarily before the instructions were issued,
it can be presumed that these were carried out based on reasonable judgements due to theaccident, and the testing can be regarded as damage warranting compensation, in theabsence of reasonable grounds for disqualification from compensation.
#2 If examination is carried out, of necessity, due to demands etc. from trading partners,
this can constitute damage under Part 7 below (“rumour-related” damage).

Part 7. “Rumour-related” damage
1. General criteria

 GuidelinesI) Although there is no established definition of so-called rumour damage, in these guidelines“rumour-related” damage refers to concern about the risk of contamination with radioactive
material in relation to products or services, due to facts that are widely known through media
reports, leading consumers or trading partners to refrain from purchasing the product orservice, or stop trading in the service or product, resulting in damage.
II) “Rumour-related” damage is eligible for compensation if there is a sufficient causal
relationship to the accident. The general criteria for this is as follows: when a consumer ortrading partner is concerned about the risk of contamination with radioactive material
resulting from the accident in relation to a product or service, and their psychological state ofwanting to avoid the product or service is reasonable from the perspective of an average,
ordinary person.
III) In terms of what specific kind of “rumour-related” damage will be recognised as damage
with a sufficient causal relationship with the accident, our view is as follows, based on thespecial characteristics of each industry etc. and divided by type according to factors like sales,
the nature of the item, the region, and items of damage.
(1)

In terms of the types of “rumour-related” damage that is to a certain extent
indicated for every industry, damage due to reluctance to purchase etc. that
actually arose at the time of the accident onwards (meaning damage
corresponding to that in Guideline IV); the same applies below) will, in principle,
be recognised as qualifying for compensation as damage in a sufficient causal
relationship with the accident.

(2)

In terms of types other than those in (1), instances of damage due to reluctanceto purchase etc. that actually arose at the time of the accident onwards will be
individually evaluated in light of the general criteria in Guideline II) to determine
whether there is a sufficient causal relationship with the accident.

IV) The types of damage will be the following items arising due to consumers or
trading partners being reluctant to purchase or suspending transactions for goods orservices:

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Business damage
A fall in revenue and, to the extent necessary and reasonable, additional costs, due
to a reduction in trading volume or a drop in trading prices (including the costs ofreturns, disposal and decontamination of goods).

(2)

Damage due to incapacity to workIf, due to the business damage in (1), operating conditions worsen for
operators so that workers who worked in those businesses experience anincapacity to work, of necessity, the reduction in wages etc., and to the extent
necessary and reasonable, the additional costs.

(3)

Examination costs (property)
The cost of examination carried out, of necessity, due to demands etc. fromtrading partners.

 Notes#1 The expression “rumour-related” damage is interpreted to mean a variety of things
depending on the person, and it is sometimes used in the sense of damage caused by stateof anxiety in consumers or trading partners who avoid buying goods and services due toconcerns about risks even though there is absolutely no risk from radioactive material, etc.
However, when we are speaking of a nuclear accident like the accident, we should insteadat the very least, be considering “rumour-related” damage to be due to a rejection by themarket in order to avoid the risk of contamination due to radioactive substances which are
not necessarily well-defined in scientific terms. It follows that if this kind of avoidance
behaviour can be regarded as reasonable, the damage will qualify for compensation.
We understand “rumour-related” in this way, although it is desirable to avoid the expression“rumour-related” from the outset, but there is no suitable expression to replace it at present,
either in the courts or in practice. Furthermore, this type of damage differs from the businessdamage in the case of businesses having been abandoned due to evacuation etc., in thespecial characteristic of media outlets and the opinions, judgements and acts of third
parties – consumers and trading partners – being interposed, so that it is undeniably asomewhat unique type of damage.
It follows that we have decided to use the expression “rumour-related” defined in Guideline I),
while remaining conscious of the fact that this will unavoidably invite the kind of
misunderstandings mentioned above.
#2 “Rumour-related” damage is not limited to agricultural, forestry or fishery products or
foods, but also includes damage to products in general, namely personal property and real
property, or intangible services other than goods (for example, the various services etc.
provided in the tourism industry).
#3 The limits of “rumour-related” damage are not necessarily well-defined, and while in
the final result the existence of a sufficient causal relationship with the accident issomething that should be determined on an individual case-by-case basis, we will indicate,in these Interim Guidelines, in relation to this kind of damage as well, in order to contributeto the resolution of disputes relating to the accident, the types of damage most likely to berecognised as being in a sufficient causal relationship and matters that should beconsidered when determining the existence of a sufficient causal relationship.
Where damage that falls within Section 1, Guideline III) (1) above is damage due to reluctanceto purchase etc. arising after the accident, this alone will lead to a presumption that asufficient causal relationship exists, and the damage can, in principle, be recognised as
warranting compensation.

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However, it goes without saying that the “rumour-related” damage that qualifies forcompensation is not limited to these types, and “rumour-related” damage that does not fallwithin the types in Guideline III) (1) (the “rumour-related” damage in Guideline III) (2)) will
qualify for compensation where a sufficient causal relationship with the accident isrecognised. In these cases it will be possible, for example, to use reasonable evidentiary
methods relying on objective statistical data etc. and comparing such damage with damage
that does fall within Guideline III) (1).
#4 Where damage is regarded as having been caused by both the accident and other causes(for example, the drop in consumer sentiment due to the Great East Japan Earthquake itself,etc.), the damage can be recognised as warranting compensation to the extent that it is in a
sufficient causal relationship with the accident.
#5 Note that given that “rumour-related” damage is based, as stated above, on the mindsetof consumers and trading partners who fear risks concerning goods etc. and avoid them,
there are certain limits on the period for which “rumour-related” damage will qualify forcompensation.
In general terms, the end of the period will be when “it would be reasonable for the
reluctance to purchase and suspension of transactions to have resolved, taking the average,
ordinary person as the standard”, however given factors including that the accident are notyet resolved, it is at the very least difficult at present to indicate specifically just when thatwill be. For the time being it is appropriate to make reasonable decisions according to theindividual circumstances, considering matters like trading volumes and prices, the specificdetails of how the reluctance to purchase etc. arose, and the special characteristics etc. of thegoods and services concerned, while referring to objective statistical data etc.
#6 The calculation methods etc. for damages due to business damage or incapacity to work
will be the same as in Part 3, Section 7 or Part 3, Section 8 above (excluding however,portions associated with evacuations, etc.).

2. “Rumour-related” damage to agriculture, forests and fisheries, and food production

 GuidelinesI) The damage listed as follows can, in principle, be recognised as damage of type 1
Guideline III) (1), which warrants compensation:(1)

Damage due to reluctance to purchase etc. in the agricultural, forestry andfishery industries that actually arose at the time of the accident onwards and isrelated to the products listed as follows:i)

agricultural and forestry products (limited to those for human consumption;
excluding tea and livestock products) produced in any of Fukushima, Ibaraki,
Tochigi, Gunma, Chiba and Saitama prefectures;ii)

tea produced in any prefecture in i) or in either of Kanagawa or Shizuoka
prefectures;iii) livestock products (limited to those for human consumption) produced inany of Fukushima, Ibaraki and Tochigi prefectures;iv)

fishery products (limited to those for human consumption and feed)
produced in any of Fukushima, Ibaraki, Gunma or Chiba prefectures;v)

flowers produced in any of Fukushima, Ibaraki or Tochigi prefectures;vi)

other agricultural, forestry or fishery products produced in Fukushima
prefecture;vii) processed goods for which the agricultural, forestry or fishery products in i)
through vi) are the primary raw material.

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Damage due to reluctance to purchase etc. in the agricultural industry that
actually arose on or after 8 July 2011 to beef, processed goods for which beef isthe primary raw material and cattle for human consumption produced or raisedin, at least, any of Hokkaido, Aomori, Iwate, Miyagi, Akita, Niigata, Gifu, Shizuoka,
Mie or Shimane prefectures.

(3)

Damage due to reluctance to purchase etc. in the processing and food productionindustries for agricultural, forestry and fishery products that actually arose at thetime of the accident onwards and is related to the products and foods(“products”) listed as follows:i)

products for which the processing or manufacturing operator has its main
office or plant in Fukushima prefecture;ii)

products for which the main raw material is the agricultural, forestry or
fishery products in (1) i) through vi) or the beef in (2).

iii) foods for which water subject to measures restricting human consumption(including measures aimed at infants) was actually used as an ingredient.
(4)

Damage due to reluctance to purchase etc. in the distribution industry for
agricultural, forestry and fishery products, and foods that actually arose at thetime of the accident onwards, and is related to products stocked by operators
who were continually dealing with the products listed in (1) through (3).

II) Damage which arose in the agricultural, forestry and fishery industries, the processing
and food production industries for the agricultural, forestry and fishery industries andthe distribution industry for agricultural, forestry and fishery products and foods,
through voluntarily abandoning some or all shipments of goods, operations, planting,processing or similar in advance due to fear of the damage due to reluctance to purchase,
etc. listed in Guideline I) can, as a general rule, be recognised as damage warranting
compensation, if such decision was unavoidable.
III) Examination costs, in the agricultural, forestry and fishery industries, the processing
and food production industries for the agricultural, forestry and fishery products and the
distribution industry for agricultural, forestry and fishery products and foods, and inother food production industries, relating to testing of agricultural, forestry and fisheryproducts (including processed goods) or foods (including the water used in the course ofprocessing or manufacturing) carried out, of necessity, on the demands, etc. of trading
partners at the time of the accident onwards, in prefectures under instructions from theGovernment to carry out testing in connection with the accident, in relation to productsof the same type as the products affected by those instructions, can in principle berecognised as damage warranting compensation.
IV) Damage due to reluctance to purchase, etc. that actually arose at the time of the accident
onwards, in addition to the damage listed in Guideline I) through Guideline III) in the
agricultural, forestry and fishery industries, the processing and food production industries forthe agricultural, forestry and fishery products and the distribution industry for agricultural,
forestry and fishery products and foods, and in other food production industries, will be
evaluated in terms of trends in trading volume and prices, and the details of how specificinstances of reluctance to purchase etc. arose, on a case-by-case or type-by-type basis, giving
consideration to matters such as the special characteristics of the product (including thecircumstances of its production and distribution), the special characteristics of the regions
where it is produced etc. (for example, the locality and the distance from the location where
the accident occurred), plans to carry out examination and the test results, the details ofgovernment and other instructions restricting shipments (including prefectural requests tovoluntarily refrain from shipments; the same applies below) and the contamination ofmaterials used in the production or manufacturing of the product, and if it is recognised as
being reasonable, based on the standard of the average, ordinary person, for consumers or
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the accident, and want to avoid the product, then a sufficient causal relationship with theaccident will be recognised and the damage will qualify for compensation.

 Notes#1 For agricultural, forestry and fishery products, and foods:i)

agricultural, forestry and fishery products must be plants and animals cultivatedand raised on agricultural land or fishing grounds etc. and the fear of radioactive
contamination of soil and waters must tend to be directly connected to fears
about these plants and animals;ii)

given that food in particular is something that consumers consume andintroduce into their bodies, consumers are particularly sensitive and will tend to
avoid them out of fear of internal exposure to radiation;iii)

since food is essential to people’s daily lives and since normally it is not that
expensive, normally it would be hard to believe that the drop in consumer
confidence due to the Great East Japan Earthquake itself would cause consumers
to go so far as a reluctance to purchase food, etc.;

iv)

given that flowers, etc. are distributed unwashed after picking and that
consumers use them in close proximity to their persons, consumers will tend tofear coming into contact with them; andv)

since in general it is comparatively easy to obtain substitute agricultural, forestry
and fishery products and food from other production areas, it is also
comparatively easy for a reluctant consumer to consider them as an alternative.

Accordingly, to a certain extent, we also believe that, by the standard of the average,
ordinary person, it is reasonable for consumers and trading partners to fear the risk ofradioactive material contamination and so to be reluctant to purchase etc.
#2 As a result of our research on, among other matters, trends in trading prices andvolumes to date since the accident, and specific examples of reluctance to purchaseaffecting the agricultural, forestry and fishery industries and the food productionindustry, we did confirm that damage due to reluctance to purchase, etc. has arisen formany items and in many regions. Of these, with respect to zones that came under
government and other instructions restricting shipments as a result of the detection, insome affected items, of radioactive material in excess of provisional criteria, we find that,by the standard of the average, ordinary person, it is reasonable even if consumers or
trading partners go so far as to have a mindset where they avoid buying or selling, etc.
not just those affected items but also agricultural, forestry and fishery products (such as
agricultural and forestry products, livestock products, and fishery products) of the sametypes cultivated and raised in that area, because they fear coming into contact withradioactive material and as a result being exposed to radiation internally, etc., including
for a certain period after the termination of that instruction, etc. We find that evenoutside areas subject to those instructions, etc., with respect to certain regions there will
be cases where, based on factors such as the special characteristics of their geography (inparticular their distance from the site of the accident, and their geographic connections
to the zones subject to those instructions, etc.), and the circumstances of the distributionof those products (in particular, the designation of their place of origin), going so far as tohave the same sort of mindset will be unavoidable.
#3 From 8 July 2011, radioactive material in excess of provisional regulatory levels was
detected in beef and in the rice straw used in its production, and it was confirmed that
this was the cause of damage due to reluctance to purchase etc. beef in many regions. In
this case, with respect to beef produced in prefectures in circumstances where, forexample, rice straw and other materials contaminated with radioactive material(specifically, materials in which radioactive material in excess of provisional permissible

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levels was detected) were used in cattle rearing, by the standard of the average, ordinary
person we consider that it was also reasonable for consumers and trading partners to be
reluctant to purchase etc. that beef, because they feared the risk of contamination. Lastly,
while 17 prefectures are specifically listed under Guideline I) (2), this list is based on
factors including the distribution and use of the rice straw and other materials inquestion reported by 29 July 2011 as well as trends in trading prices for beef produced inthose prefectures. If it is confirmed that factors similar to those in the prefectures listed
in Guideline I) (2) apply in other prefectures, those other prefectures ought to be treatedin the same manner.
#4 In relation to the processing and food production industries for agricultural, forestry
and fishery products, it will be recognised as reasonable even if consumers and trading
partners have the same fear in relation to processed goods, such as foods etc., for which
agricultural, forestry and fishery products that are feared by consumers and trading
partners are the primary raw material (as a benchmark, with those agricultural, forestry
and fishery products taking up roughly 50% or more of the weight of the raw materials).
In addition, it will be recognised as reasonable even if consumers and trading partners
want to avoid transactions, etc. due to the location of a main office or plant, or due to thewater used as an ingredient.
#5 In relation to the distribution industry for agricultural, forestry and fishery products,
and foods, for “rumour-related” damage relating to products already stocked arising for
operators who are continually dealing with products, given that it is difficult to avoid
damage due to reluctance to purchase, etc., this “rumour-related” damage will berecognised in the same way as that arising for agriculture, forestry and fishery operators,
processing operators and food manufacturers.
#6 Note that whether damage arising due to processing operators and distributors being
unable to stock products related to “rumour-related” damage qualifies for compensation
as “indirect damage” is determined under Part 8.
#7 The gist of Guideline II) is that where it is regarded as reasonable to voluntarily abandon
some or all of the shipment of goods, operations, planting and processing or similar inadvance, since there are costs involved in these activities, in order to avoid or reduce damage
due to reluctance to purchase, etc., this will be recognised as qualifying for compensation.
#8 The examination costs that qualify for compensation under Guideline III) include, forexample, the costs where testing of water used in the course of manufacturing foods iscarried out due to the demands etc. of trading partners in prefectures that are carryingout examination of city water supplies under guidance from the Government.
#9 Guideline IV) indicates matters to be considered when determining if there is a sufficientcausal relationship in cases of the type mentioned in Section 1, Guideline III) (2) that areevaluated separately for damage that does not fall within Guidelines I) through III).

3. “Rumour-related” damage to tourism

 GuidelinesI) Among the nationwide damage to tourism arising after the accident, there is a highprobability, using the standard of the average, ordinary person, that cancellations or
reluctance to book, etc., resulted from the accident and subsequent discharge of radioactive
substances, at the very least with regard to the tourism industry in the prefecture of
Fukushima, where the accident occurred, and in the prefectures of Ibaraki, Tochigi andGunma; thus, where a fall in tourism revenue due to such cancellations and reluctance tobook etc. affected the tourism industry after the accident, as a general rule this can berecognised as damage with a sufficient causal relationship with the accident, on the basisthat it is the type mentioned in Section 1, Guideline III) (1).

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GUIDELINESII) In addition to Guideline I) related to foreign tourists, for the tourism industry within Japan,
if bookings had already been made before the accident, the fall in revenue due to a higher
than usual cancellation rate at least until then end of May 2011 can, as a general rule, be
recognised as damage with a sufficient causal relationship with the accident, on the basisthat it is the type mentioned in Section 1, Guideline III) (1).
III) However, given that the fall in revenue in the tourism industry is highly likely to result
from a downturn in consumer confidence caused by the Great East Japan Earthquake, thisissue also needs to be evaluated when ascertaining damage and calculating the amount ofcompensation. This evaluation would, for example, compare the situation for cancellations
and reluctance to book, etc. in regions that were comparatively unaffected by the accident, inorder to make assumptions, to a reasonable extent, about whether or not damage arose andthe amount of it.

 Notes#1 Regarding the so-called “tourism industry”:i)

It is possible to include within the “tourism industry” the accommodationrelated sector such as hotels, inns and the travel business, the sightseeing
industry such as leisure facilities and passenger boats, the transportationindustry such as buses and taxis, as well as restaurants and retail outlets attourist sites. However, the degree of contribution to sales made by tourists inthese sectors is varied.

ii)“Rumour-related” damage differs in degree between travel arrangements andregions; thus, the extent of its impact on sales varies.

These circumstances should be fully taken into consideration when evaluating “rumourrelated” damage. However, trends in tourist numbers since the accident, the results ofsurveys of cases of cancelled accommodation, and damage resulting from cancellations
and reluctance to book, etc. centred on a certain area including Fukushima prefecture
have been confirmed.
Given that the precondition that tourists come to the region is a special feature of
tourism, based on information including the above-cited surveys and reports on travelrelated perceptions, in addition to Fukushima prefecture where the accident occurred,
travellers have reached a mindset where they fear release of radioactive substances andavoid tourism in Ibaraki, Tochigi and Gunma prefectures, in principle, this can berecognised as reasonable using the standard of the average, ordinary person. Further,since once “rumour-related” damage arises it tends to affect the entire tourist region, it ispossible to recognise that there can be a range of impacts across the entire tourism
industry in that region due to tourists not coming.
#2 Further, it has been confirmed from survey results so far, that damage has occurred
due to foreign tourists cancelling their visits from the time of the accident onwards. In
terms of foreign tourists, although on the one hand international bodies and others
provided information to the effect that Japan was safe as a destination immediately after
the accident onwards, the fact that there was a difference between the information
received by Japanese people and the ordinary foreigner residing outside Japan, and thefact that some countries issued travel advisories, meant that it can be recognised asreasonable, using the standard of the average, ordinary person, for foreign tourists toconsider avoiding visiting Japan, at least for the bookings that had already been made asat the time of the accident and also for those cancelled during a certain period
immediately after the accident occurred. As for that certain period, it is reasonable to
make that period to the end of May 2011 when the travel advisories issued by various
countries were relaxed to a degree. Note that given that a certain level of cancellations is
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causal relationship with the accident can be recognised, in principle, only in relation to
the portion by which the cancellation rate exceeded the normal level.
#3 Since as stated in Note #1 i) and ii) a range of circumstances have an impact on“rumour-related” damage in the tourism industry, there is no alternative but for
determinations on damage to be separate and specific. In particular, the tourism industry
comprises modes that are specific to the operations in specific regions etc., and thecircumstances of the industry vary from region to region. This means, as mentioned
above, that “rumour-related” damage is prescribed as the types falling under Section 1,
Guideline III) (1) above, but even damage that does not belong to those types can berecognised as being in a sufficient causal relationship with the accident if in light of theseparate, specific circumstances of the tourism operator, damage due to cancellations
and reluctance to book that has actually arisen, irrespective of the region, could berecognised as reasonable using the standard of the average, ordinary period reaching amindset where they fear and want to avoid the risk of contamination from radioactive
substances due to the accident, then a sufficient causal relationship with the accident
can be recognised. For example, even for a tourism business based in a region other thanthose in Guideline I), if due to circumstances like geographic proximity to Fukushima
prefecture or the special characteristics, etc. of the tourism resources employed by that
tourism business, the fact of a fall in revenue etc. caused by cancellations or reluctance tobook, etc. on the grounds of the accident is recognised, this can be recognised as damage
in a sufficient causal relationship with the accident.

4. “Rumour-related” damage to manufacturing and services

 GuidelinesI) In addition to the damage listed in Sections 2 and 3 above, the damage to the
manufacturing and service industries that arose from the accident onwards due toreluctance to purchase and suspension of trading etc. that is listed as follows, can, as a
general rule, be recognised as being in a sufficient causal relationship with the accident, as
damage of the type mentioned in Section 1, Guideline III) (1):(1)

Damage in relation to goods that are manufactured or sold or services that areprovided from a site located in Fukushima prefecture where the accident
occurred, which arose at that base.

(2)

Damage that arose at a site located in Fukushima prefecture where the accident
occurred due to providers of services, etc. refusing to visit, in relation to thoseservices, etc.

(3)

In relation to government guidance etc. concerning the handling of the byproducts of water supply and sewerage treatment, etc. where radioactive
substances have been detected:

(4)

i)

Damage arising due to operators affected by the guidance etc. avoiding
accepting the by-products etc.

ii)

Damage relating to the products of operators who were manufacturing
manufactured goods using the by-products as raw materials.

Damage related to radiation testing carried out, of necessity, on the demand, etc.
of trading partners, from the time of the accident onwards, by operators, inprefectures that are issuing guidance on examination for water (however, giventhat some water used in the course of manufacturing is ingested, etc. into thehuman body, for example in food additives, pharmaceuticals and medical
equipment, this is limited to examination costs for products that consumers andtrading partners are particularly sensitive about avoiding).

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GUIDELINESII) It should be noted that in terms of services, etc. provided by or to foreigners
visiting Japan, decline in revenue and additional costs that were incurred due todamage sustained in Japan (including damage that arose for Japanese operators due
to foreign vessels refusing to call at Japanese ports or to navigate through the waters
off Fukushima) for services already contracted before the accident, and cancelled atleast before the end of May 2011 (including refusal to call at port or navigate), can, in
principle, be recognised as damage with a sufficient causal relationship with theaccident, as damage of the type mentioned in Section 1, Guideline III) (1).
III) However, when evaluating Guidelines I) and II), for example, given that the probabilityof the impact of the Great East Japan Earthquake can be found to be considerable fordamage arising due to the provider of a service etc. refusing to visit Fukushima prefecture,
this issue also needs to be evaluated when identifying whether or not damage arose andwhen calculating the amount of damage.

 Notes#1 As a result of surveys on specific instances of reluctance to purchase in the
manufacturing and service industries etc., damage to goods manufactured and services
etc. provided in Fukushima prefecture has been confirmed, and was due to service etc.
providers refusing to visit Fukushima. In light of the circumstances of the accident, it canbe regarded as reasonable, using the standard of the average or ordinary person for
consumers and trading partners to fear the risk of contamination from radioactive
substances, and to be reluctant to purchase etc. these goods manufactured and services
etc. provided in Fukushima prefecture, and also to refuse to visit Fukushima. Further, thesame applies to visits by foreigners in Note #2 for Section 3 above.
#2 On the one hand “subcontracting” can be seen in the manufacturing and service
industries, etc., but it is necessary to be aware that a parent company refusing to takedelivery of goods delivered by a subcontractor for the sole reason that the subcontractor
is located in Fukushima prefecture, taking delivery in the short term only to then havethe subcontractor take the goods back, risks violation of the Act on the Prevention of
Delay in the Payment of Subcontracting Charges and that a request was made to the
Minister for the Economy, Trade and Industry on 22 April 2011 for consideration
regarding transactions with subcontracting small to medium enterprises.
#3 “Foreign vessels refusing to call at Japanese ports” in II) includes where foreign vessels
have refused to call at a certain Japanese port and called at a different Japanese port.

5. “Rumour-related” damage to exports

 GuidelinesI) Costs including the costs of examination (including incidental costs accompanying
testing such as the costs of decontamination and disposal; the same applies below in
Note #3), to an extent that is necessary and reasonable, that actually arose due to demands
from export destination countries (including demands under the government importregulations of those countries and from trading partners in those countries), after theaccident, in relation to goods exported from Japan and the vessels and containers used to
do so, and the costs of issuing the various certifications, can be recognised as being in a
sufficient causal relationship with the accident, in principle, as damage of the typementioned in Section 1, Guideline III) (1).
II) The fall in revenue and, to the extent necessary and reasonable, the additional costs
arising due to the actual disposal, on-selling, or abandonment of production or
manufacturing, of necessity, at the point when export destination countries have refused
to allow goods exported from Japan to be imported (including refusals to import under
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countries), limited to goods already exported to or produced or manufactured (including
goods in the process of being produced or manufactured) for that export destination
country, can be recognised as being in a sufficient causal relationship with the accident,
in principle, as damage of the type mentioned in Section 1, Guideline III) (1).

 Notes#1 The damage that has arisen in Japan’s exports from the time of the accident onwards
can be said, in general, including where the import regulations of foreign governments
are involved, to have arisen when foreigners fear contamination by radioactive
substances from Japanese exports, and avoid them, so that this damage can be thoughtof as one type of “rumour-related” damage.
#2 “Rumour-related” damage concerning exports also raises the question of thereasonableness of the judgement of the average, ordinary person, and in fundamental
terms, it is appropriate to regard this “rumour-related” damage within the same scope as
where a Japanese consumer or trading partner is envisaged. However, as there is adifference between the information received by a Japanese person and that received byan ordinary foreigner residing outside Japan, it is appropriate to regard the damage
related to exports as qualifying for compensation more broadly than in the case ofdomestic transactions, limited to certain items of damage and a certain period of time.
#3 In light of the difference between the information received by foreigners residing
overseas and Japanese people, and of the need to avoid damage arising from refusals toimport, we can recognise the general reasonableness of a mindset that seeks
examination and various certifications, including point of origin certification, for goods
exported from Japan. It follows that for the time being, while the accident remains
unresolved, the costs of examination and the costs, etc. of the issuance of various
certificates of this nature for all exports from Japan can, in principle, be recognised asdamage warranting compensation.
#4 On the other hand, it is generally difficult to recognise the reasonableness of a mindset
that goes further than demanding testing and various certificates and involves thewidespread rejection of all exports from Japan just because there is a difference ininformation. Further, generally speaking, Japanese operators whose exports have been
rejected can also be expected to avoid or reduce the damage, for example by selling toanother country or within Japan. It follows that, in principle, refusal to import can berecognised as being “rumour-related” damage in a sufficient causal relationship with theaccident solely to the same extent as where a Japanese consumer or trading partner isenvisaged. However, given that it is difficult for Japanese operators who have suffereddamage to avoid damage due to refusal to import (into a another country, translator’snote) in relation to goods for export that, before the refusal to import, were alreadyexported, already produced or manufactured and ready to export to that country or in theprocess of production or manufacture, it is appropriate to recognise “rumour-related”
damage in a sufficient causal relationship, limited, in principle to damage in thissituation. Further, even in this situation, as stated above, given that even Japanese
operators are expected to take steps to avoid damage, if for example damage arises due
to exports where knowledge of the import refusal could have been obtained, this cannot
be recognised as damage warranting compensation.
#5 “Goods already exported or produced or manufactured (including goods in the processof being produced or manufactured)” in Guideline II) means damage arising from the fact
that, given that the type, quality, standards, wrapping and processing or manufacturingmethods etc. for the goods for export are particularly tailored for the export destination
country, it is difficult to sell them to another country (or if the goods can be sold on,revenue will fall or additional costs will be incurred).

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GUIDELINESPart 8. “Indirect damage”

 GuidelinesI) In these Interim Guidelines, “indirect damage” means damage suffered by third parties
who are in certain economic relationships with individuals who suffered damage
recognised as qualifying for compensation under Part 3 or Part 7 above as a result of theaccident (“primary damage” and “primary victims”).
II) Where the business transactions between the individuals who suffered indirect
damage (“indirect victims”) and the primary victims are irreplaceable due to the nature of
the indirect victims’ business, the indirect damage can be recognised as being in a
sufficient causal relationship with the accident. Specific examples of this type of indirect
damage include the following:
Damage that is suffered by business operators whose customers are regionally limited dueto the nature of the business which necessarily arises due to the evacuation or suspensionof business operations, etc. of the primary victims who are the operators’ customers.
(1)

Damage that is suffered by business operators whose suppliers are regionallylimited due to the nature of the business which necessarily arises due to theevacuation or suspension of business operations, etc. of the primary victims who
are the operators’ suppliers.

(2)

Damage that is suffered by business operators whose suppliers are regionallylimited due to the nature of the raw materials or service which necessarily arises
due to the evacuation or suspension of business operations, etc. of the primary
victims who are the operator’s suppliers.

III) The items of damage are as follows:(1)

Business damage.
Fall in revenue suffered and, to the extent necessary and reasonable, additionalcosts incurred by indirect victims as a result of the primary damage.

(2)

Damage due to incapacity to work.
Reductions in income suffered and, to the extent necessary and reasonable,
additional costs incurred by employees where, due to the business damage under (1)above, operating conditions worsen for the indirect victims, who are business
operators and the employers of the employees, so that the employees, of necessity,
experience an incapacity to work.

 Notes#1 Types of damage other than those set out as examples under Guideline II) will be
individually evaluated for damage caused by the accident, and where the indirect victims’
business transactions with the primary victims are irreplaceable due to the nature of theindirect victims’ business, a sufficient causal relationship with the accident can berecognised. For example, where indirect victim is legally obligated to conduct business
transactions with a primary victim, damage necessarily arising due to business
transactions with the primary victim can be recognised as being in a sufficient causal
relationship with the accident.
#2 With regard to Guideline II) (3) above, as business operators are generally expected totake measures in advance to diversify and minimise risks in business transactions, cases
where “suppliers are (…) limited due to the nature of the raw materials or service” will besituations where advance measures to minimise risks are either impossible or extremely
difficult. Examples will include situations where raw materials necessary for certain

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products are produced by a primary victim utilising special processes, etc. and it is
impossible or extremely difficult to obtain the same type of raw materials from anothersupplier. In such cases, however, given that it is possible, after a certain period of time, totry to recover from damage by modifying materials or services, we regard the time period
for compensation as being limited.
#3 Moreover, where third parties incur costs on behalf of primary victims or tortfeasors thatshould have been incurred by primary victims or tortfeasors, such costs will qualify forcompensation, although they may not necessarily fit the definitions of indirect damage in
Guideline I) above.

Part 9. Damage resulting from radiation exposure Guideline
Lost earnings, medical treatment expenses, pharmaceutical costs and damage for mental
anguish, etc. suffered by nuclear power plant workers involved in the repair work, etc.
associated with the accident, members of the self-defence forces, firemen, police officers,
residents or others, which arose as a result of contracting an injury, experiencing adeterioration in health to an extent that requires medical treatment, contracting a
disease, or death brought about as a result of acute or tardive radiation disorderdeveloped through radiation exposure in the accident will be recognised as damage
warranting compensation.

 Notes#1 The value of the “damage for mental anguish due to injury or death” indicated here
should, unlike cases under Part 3, Section 6 above, be calculated individually in proportion
to the degree of injury or loss of life.
#2 Injury or death due to radiation exposure can be tardive radiation sickness, and if it iscaused by radiation exposure in the accident, it will be also recognised as damage
warranting compensation.

Part 10. Miscellaneous
1. Adjustments between various benefits and compensation for victims

 Guideline
Where individuals who suffered nuclear damage in the accident are found to havereceived benefits for damage of the same nature as the damage caused by the accident,
the amount of those benefits should be deducted from the amount of the damage.

 Notes#1 Where victims receive benefits and suffer damage in tort at the same time from thesame cause, the general tort law recognises that the amount of benefits be deducted fromthe amount of damage that the tortfeasor should compensate, so long as the damage andbenefits are of the same nature (the legal principle of set-off).
#2 Each benefit should be evaluated as to whether it bears the same nature as the damage
so that the specific amount of benefit to be deducted from the damage can be determined.
At least the following, however, should be deducted from the damage amounts listed
respectively below. Furthermore, in this case, benefits of the same nature that can be
deducted from the damage are limited to benefits that have already been paid to the victim,
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or benefits that are so certain to be paid that they can be regarded as already having been
paid – the Government cannot go as far as to deduct benefits that are expected to be paid in
future:i)

Various insurance benefits under the Workers’ Accident Compensation Insurance
Act and the Welfare Pension Insurance Act (with respect to the first act, excluding
special benefits paid as an incidental project), as well as various payments under the
National Pension Act (excluding the lump sum payment on death).
Only damage that is found to be of the same nature is deducted from the amountof the various kinds of lost earnings.

ii)

Various compensation under the Government Employees’ Accident Compensation
Act and the Act on Disaster Compensation for Local Government Employees, as wellas various long-term payments under the National Public Service Mutual Aid
Association Act and the Local Public Service Mutual Aid Association Act.
Only damage that is found to be of the same nature is deducted from the amountof the various kinds of lost earnings.

#3 Further, although the following are not subject to set-off, they should be deducted fromthe damage amounts listed respectively below:
iii)

Assistance payments for lodging or rent paid to victims by local government entities.
These are deducted from the amount of evacuation expenses.

iv)

Unpaid wages that have been paid on behalf under the Act on Security of Wage
Payment.
These are deducted from the damage amounts related to incapacity to work.

v)

Accident insurance benefits
These are deducted from the complete loss of or reduction in value of property.

#4 On the other hand, at least the following should not be deducted from damage amounts:
vi)

Life insurance benefits.

vii) Special benefits paid as an incidental project under the Workers’ Accident
Compensation Insurance Act.
viii) Lump sum payments on death under the National Pension Act.
ix)

Unemployment benefits under the Employment Insurance Act.

x)

Disaster condolence money and disaster disability solatium under the Act on
Payments of Disaster Condolence Money (excluding the part with the purpose of
supplementing the damage).

xi)

Various donations.

#5 Note that where victims are eligible to demand damages from Tokyo Electric Power
Company as well as various benefits, they are entitled to make any of these demands first.

2. Property damage suffered by local government entities, etc.

 Guideline
Damage to the property owned by local government entities or the national government(“local government entities etc.”) and damage to businesses that local government
entities, etc. conduct in the same capacity as private business operators are subject tocompensation, so long as a sufficient causal relationship with the accident is recognised,
under the standards applicable to business operators described in these Interim

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Guidelines. Costs incurred by local government entities, etc. on behalf of tortfeasors forthe purpose of assisting victims, etc. are also subject to compensation.

 Notes#1 Among the damage suffered by local government entities, etc., with respect to damage
for the lost or reduced value of property owned by local government entities, etc. anddamage to businesses that local government entities, etc. conduct in the same capacity as
private business operators (including water supply businesses, sewerage businesses,
companies and for-profit businesses, etc. such as hospitals, etc. operated by local
government entities, etc.), since there is no reason to treat this damage differently to thedamage suffered by individuals or private businesses, the scope of the damage warranting
compensation will be determined in light of the standards applicable to business operators
described in these Interim Guidelines. In addition, where local government entities, etc.
incurred costs on behalf of tortfeasors for the purpose of assisting victims, etc., such costs
will also qualify for compensation in the same manner as described in Part 8 Note #3 above.
Moreover, other types of damage suffered by local government entities, etc. may berecognised as damage warranting compensation, depending on specific individual
circumstances.
#2 On the other hand, decreased tax revenues suffered by local government entities etc. asa result of the accident cannot be regarded the same as damage to the property owned by
local government entities etc., or damage to businesses conducted by local government
entities etc. in the same capacity as private business operators, since only the right toexpect the tax revenue is compromised, and moreover, tax revenues are imbued withspecial characteristics of public law, in that taxes are levied and collected in accordancewith the law. In addition, the right to collect taxes that local government entities etc.
actually possess does not cease to exist as a result of the accident, and also given the factthat residents and business operators, etc., who are taxpayers, will, in principle, gain
capacity to pay taxes when they receive damages for the accident, in the absence of special
circumstances, decreased tax revenues cannot be recognised as warranting compensation.

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Supplement to the Interim Guidelines on Determination of the Scope of
Nuclear Damage resulting from the Accident at the Tokyo Electric Power
Company Fukushima Daiichi and Daini Nuclear Power Plants (concerning
Damages related to Voluntary Evacuation, etc.)
6 December 2011
Dispute Reconciliation Committee for Nuclear Damage Compensation

Part 1. Introduction
1. Situation concerning voluntary evacuation, etc.
In the “Interim Guidelines on Determination of the Scope of Nuclear Damage resulting
from the Accident at the Tokyo Electric Power Company Fukushima Daiichi and Daini
Nuclear Power Plants” (“Interim Guidelines”) finalised and published on 5 August 2011,
the Dispute Reconciliation Committee for Nuclear Damage Compensation(“Reconciliation Committee”) indicated its thinking concerning the scope of damage
related to government instructions to evacuate, etc. (“evacuation instructions, etc.”), andstated that further consideration would be given to damage related to evacuation not
carried out on the basis of evacuation instructions, etc. (“voluntary evacuation”).
As a result of surveys and other considerations, including interviews with related parties,
the Reconciliation Committee confirmed that there were a considerable number ofpeople in areas surrounding the areas subject to evacuation instructions, etc. indicated inPart 3 of the Interim Guidelines (hereinafter “Areas subject to Evacuation Instructions,etc.”) who had carried out voluntary evacuation.
The main scenarios leading to voluntary evacuation are considered to be as follows:(1) When the accident at the Tokyo Electric Power Company Fukushima Daiichi and Daini
nuclear power plants (the “accident”) initially occurred, amid a situation in which there
was insufficient information about their own circumstances, people’s choice to evacuate
due to fear and unease about exposure to radiation from the discharge of a large quantityof radioactive material arising from hydrogen explosions and the like in the Tokyo
Electric Power Company Fukushima Daiichi nuclear reactor building, in order to escapethis risk; and (2) people’s choice to evacuate some time after the occurrence of theaccident due to fear and unease about exposure to radiation, in order to escape this risk,
amid a situation in which information concerning air radiation levels and the impact of
exposure to radiation, etc. in the living area was to some extent obtainable.
At the same time, most people living in the Affected Areas continued to stay in their
existing homes without voluntarily evacuating, and we cannot ignore theaforementioned fear and unease that those who did not evacuate are likely to havecontinued experiencing (voluntary evacuation and the act of staying by people in the
Affected Areas is collectively referred to hereinafter as “voluntary evacuation, etc.”).

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2. Basic approach
Based on the aforementioned circumstances of voluntary evacuation, etc., in the present
Supplement to the Interim Guidelines (“Supplement to the Interim Guidelines”), damages
related to voluntary evacuation, etc. are presented as damages other than damages related
to evacuation instructions, etc. encompassed by the Interim Guidelines.
The presence of a sufficient causal relationship between the accident and damages
associated with voluntary evacuation, etc. should ultimately be determined based oneach individual case, but in the Supplement to the Interim Guidelines, a certain scope ispresented in which compensation should be allowed, in order to promote the resolutionof damage compensation disputes related to the accident.
Further, rather than immediately disallowing compensation for something notencompassed by the Supplement to the Interim Guidelines, it may be possible fordamages to be recognised as having a sufficient causal relationship based on theindividual, specific circumstances.

Part 2. Damages related to voluntary evacuation, etc.
Areas subject to voluntary evacuation, etc.
The municipalities in Fukushima prefecture listed below are areas that exclude areas
subject to evacuation instructions, etc. (“Areas subject to Voluntary Evacuation, etc.”).

 Northern prefectural area
Fukushima-shi, Nihonmatsu-shi, Date-shi, Motomiya-shi, Kori-machi, Kunimi-machi,
Kawamata-machi, Otama-mura.

 Central prefectural area
Koriyama-shi, Sukagawa-shi, Tamura-shi, Kagamiishi-machi, Tenei-mura, Ishikawa-machi,
Tamakawa-mura, Hirata-mura, Asakawa-machi, Furudono-machi, Miharu-machi, Ono-machi.

 Soso area
Soma-shi, Shinchi-machi.

 Iwaki area
Iwaki-shi.

 Notes#1 As indicated in Section 1 of Part 1 (Introduction), two main scenarios may be considered
to lead to voluntary evacuation after the accident, and under circumstances in which there
was no stabilisation of the Tokyo Electric Power Company Fukushima Daiichi nuclear
power plant, in both cases this kind of fear and unease is thought to have arisen throughthe compounding of factors including distance from the plant, proximity to Areas subject
to Evacuation Instructions, etc., information about radiation levels published by theGovernment and local authorities, and the state of voluntary evacuation in the individual’s
own municipality (the number of people voluntarily evacuating, etc.). Taking the above
factors as a whole, there were considerable grounds for residents to feel considerable fear
and unease about exposure to radiation, at least in the Areas subject to Voluntary
Evacuation, etc. in the Supplement to the Interim Guidelines, and in some respects
voluntary evacuation to avoid this risk was inevitable.

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GUIDELINES#2 The circumstances of voluntary evacuation, etc. differ in individual cases, and thenature of damage is also thought to be varied, but the Supplement to the Interim
Guidelines establishes a certain Area subject to Voluntary Evacuation, etc. and presents
damage common to those people living in this area in order to fairly compensate the“eligible persons” stated below and provide relief as widely and quickly as possible.
#3 With regard also to areas outside the aforementioned Areas subject to Voluntary
Evacuation, etc., compensation will be allowed for persons corresponding to the “eligible
persons” stated below, and even in other cases, compensation may be allowable according
to the individual, specific circumstances.

Eligible persons
A person who had their main home (“home”) in an Area subject to Voluntary Evacuation,etc. when the accident occurred (regardless of whether they carried out voluntaryevacuation from this home after the accident occurred, were outside an Area subject toVoluntary Evacuation, etc. when the accident occurred and continued to reside outside
said area, or to reside in said home, etc.; hereinafter “person subject to voluntaryevacuation, etc.”).
Further, a person whose home was inside an Area subject to Evacuation Instructions, etc.
when the accident occurred will also be eligible for compensation in the same way as aperson subject to voluntary evacuation, etc., for the period of non-eligibility for mental
anguish damage under “Types of damage” Section 6 in Part 3 of the Interim Guidelines,
and for children and pregnant women, for the period of residing in an Area subject toVoluntary Evacuation, etc. after evacuating there (excluding the period when the accident
initially occurred).

 Notes#1 The right to claim compensation for damage arises at an individual level, and therefore
compensation itself should also be paid to each individual.
#2 A person whose home was inside an Area subject to Evacuation Instructions, etc. when
the accident occurred should also be eligible for compensation if they are deemed to havesustained similar damage to a person subject to voluntary evacuation, etc. In this case, theperson should be eligible for compensation based on the Supplement to the Interim
Guidelines provided that there is no overlap with compensation based on the Interim
Guidelines, and therefore the period during which they are not eligible for mental anguishdamage under “Types of damage” Section 6 in Part 3 of the Interim Guidelines is applicable(for example, following designation of an Evacuation-Prepared Area in Case of Emergency
on 22 April 2011, the period in which the person stayed in said area without evacuating, or
the period after returning home after the designation of said area was lifted). Meanwhile, aperson living in an Area subject to Evacuation Instructions, etc. who evacuated to an Area
subject to Voluntary Evacuation, etc. as a result of the accident and continued to reside inthis Area for a long period would be eligible for compensation for mental anguish withregard to this period, in accordance with the Interim Guidelines. However, this is mental
anguish damage arising from having, of necessity, to live as an Evacuee for a long period,
which in some respects differs qualitatively from mental anguish damage experienced as aperson who continues to reside in their home for a long period in an Area subject toVoluntary Evacuation, etc. (hereinafter “resident(s)”), and therefore should also be
encompassed by the Supplement to the Interim Guidelines (specifically, this corresponds tochildren and pregnant women who evacuated to and resided in an Area subject toVoluntary Evacuation, etc. (see below Guideline III and Note #3 under “Types of damage”).
#3 Persons other than the above “eligible persons” may also be eligible for compensationaccording to the individual, specific circumstances.

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Types of damage

 GuidelinesI) Among the damage sustained by persons subject to voluntary evacuation, etc., thefollowing are allowable as damages to be compensated within a certain scope.
(1)

When the person has voluntarily evacuated from their home located inside an
Area subject to Voluntary Evacuation, etc. due to fear and unease about exposure
to radiation (including when the person was outside the Area subject toVoluntary Evacuation, etc. when the accident occurred and continued to resideoutside that area; likewise hereinafter), the following:i)

The increased cost of living expenses arising from voluntary evacuation.

ii)

Mental anguish arising from being substantially hindered from leading anormal life due to voluntary evacuation.

iii) Removal expenses required for evacuation and homecoming.
(2)

When continuing to reside inside an Area subject to Voluntary Evacuation, etc.
while experiencing fear and unease about exposure to radiation, the following:i)

Mental anguish arising from being substantially hindered from leading anormal life due to fear and unease about exposure to radiation and therestriction on freedom of movement, etc. associated with this.

ii)

If there is an increase in the cost of living expenses due to fear and uneaseabout exposure to radiation and the restriction on freedom of movement,
etc. associated with this, the increased cost.

II) Regarding the amount of damages under I) (1) i) through iii) and (2) i) and ii), in both cases it
is deemed to be fair and reasonable to calculate said amount by totalling these damages.
III) When calculating the specific amount of damages under II), the guideline figure is
1) JPY 400 000 per person with regard to children and pregnant women among thepersons subject to voluntary evacuation, etc., for the period from the occurrence of theaccident until 31 December 2011, and 2) JPY 80 000 per person for other persons subject tovoluntary evacuation, etc., for damages at the initial time of occurrence of the accident.
IV) Regarding a person whose home was inside an Area subject to Evacuation
Instructions, etc. when the accident occurred, the damage to be compensated is based on
the case of a person subject to voluntary evacuation, etc., and the calculation of thespecific amount of damages is as follows:
1. For the period of non-eligibility for mental anguish damages under “Types of damage”
Section 6 in Part 3 of the Interim Guidelines, an amount taking into account that theamount specified in III) is a guideline amount according to the applicable periods
specified under III) 1) and 2).
2. With regard to the period during which children and pregnant women evacuated toand stayed in an Area subject to Voluntary Evacuation, etc., an amount according to theperiod during which such persons were eligible under the Supplement to the Interim
Guidelines, using a guideline figure of JPY 200 000 damages per person from theoccurrence of the accident until 31 December 2011.

 Notes#1 A person who has voluntarily evacuated from their home in an Area subject toVoluntary Evacuation, etc. due to the accident primarily incurs an increase in living
expenses due to living away from their home and removal expenses necessitated forevacuation and returning home, as well as a certain level of mental anguish arising from

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this evacuation lifestyle, and therefore it is possible to conceive that at least this damage
should be compensated. Further, residents inevitably experience mental anguish primarily
due to fear and unease about exposure to radiation and the associated restriction on freedomof movement, etc., as well as an increase in living expenses, in some cases, due to thisunease, etc., and therefore it is possible to conceive that at least this damage should becompensated.
#2 Regarding the amount of damage to be compensated, voluntary evacuation differs from
evacuation due to evacuation instructions, etc., and therefore it is not necessarily fair andreasonable to treat the damage associated with this in the same way as the case ofevacuation instructions, etc.
At the same time, although it cannot be denied that there is a difference between
voluntary evacuees and residents in terms of the nature and extent of the mental
anguish actually experienced and the nature and amount of the expenses actually
incurred, arguably it is not fair or reasonable to establish a difference in monetaryamount depending on whether someone is a voluntary evacuee or a resident, in
consideration of factors including the following: both cases arose due to fear and uneaseabout exposure to radiation associated with staying at home in an Area subject toVoluntary Evacuation, etc.; whereas the mental anguish, etc. associated with said staying
is relieved through voluntary evacuation, there is a correlation between the two in that
there is an increase in living expenses, etc. associated with the new evacuation lifestyle;among those people in Areas subject to Voluntary Evacuation, etc., there are also likely tobe people who, of necessity, have had to stay there, for various reasons; and with regard
to the large number of persons subject to voluntary evacuation, etc. residing over a widearea, it is in practice extremely difficult to distinguish between voluntary evacuees andresidents, and to certify the presence and duration of voluntary evacuation, etc. on an
individual basis, and there is concern that this could hinder prompt relief.
In the light of these circumstances, it is deemed appropriate to calculate a fixed sum
combining mental anguish damages and the increased cost of living expenses, etc., andto set the same amount of damages for voluntary evacuees and residents.
#3 Regarding the relationship to the attributes of a person subject to voluntary evacuation,etc., a certain rationality can be recognised, regardless of age or other factors, inexperiencing fear and unease about exposure to radiation due to the discharge of a large
quantity of radioactive material, particularly when the accident initially occurred.
Subsequently too, the likelihood of extreme sensitivity to radiation is generally recognised,at least in the case of children and pregnant women, and therefore although relatively low
level, a certain rationality can be recognised with regard to experiencing fear and uneaseabout exposure to a dosage of radiation that is considerably higher than normal, also when
considering the circumstances of voluntary evacuation inferred from population relocation.
For this reason, it is deemed appropriate to calculate the periods of eligibility forcompensation as the period from the occurrence of the accident until 31 December 2011 in
the case of children and pregnant women among the persons subject to voluntaryevacuation, etc., and the initial time of occurrence of the accident for other persons subject
to voluntary evacuation, etc. Moreover, with regard to the period from January 2012,
consideration will be given in future to the scope of compensation, etc., as necessary.
#4 When calculating the amount of damages for the period under Note #3, a certain level ofdamages has been taken into consideration with regard to mental anguish and theincreased cost of living expenses, including a portion for accompanying persons and caregivers in the case of children and pregnant women, with reference to court precedent, etc.
concerning payment for mental anguish unaccompanied by damage to life and limb.
#5 Among persons whose home was inside an Area subject to Evacuation Instructions, etc.
when the accident occurred, when calculating the amount of damages for the period inwhich children and pregnant women evacuated to and stayed in an Area subject toJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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Voluntary Evacuation, etc., these persons are already eligible for compensation for
mental anguish damages during the evacuation period under Section 6 in Part 3 of theInterim Guidelines, and therefore the partial overlap of these respective damages has
been taken into consideration.
#6 Regarding Guidelines I) through IV), other types of damage may also be eligible forcompensation and different amounts of compensation may be calculated according to theindividual, specific circumstances.

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Outline of Second Supplement to Interim Guidelines on
Determination of the Scope of Nuclear Damage resulting from the
Accident at the Tokyo Electric Power Company Fukushima Daiichi
and Daini Nuclear Power Plants (concerning Damages related to
Review of Evacuation Areas by Government Instructions, etc.)
16 March 2012
Dispute Reconciliation Committee for Nuclear Damage Compensation

We indicate our thinking, to the extent currently possible, concerning damages related togovernment instructions to evacuate, etc. and damages related to voluntary evacuation,etc. encompassed by the Interim Guidelines and the First Supplement, in relation tomatters that were stated as being for future consideration, also based on the review of
Evacuation Areas, etc.

1. Evacuation expenses and damages for mental anguish after the review of Evacuation Areas(Interim Guidelines are extended until the review of the areas)(1) Establish no differences between persons continuing to evacuate and persons seeking
to relocate.
(2) As a general rule, evacuation expenses continue to be the expenses actually incurred
to a necessary and reasonable extent.
(3) The guideline figures for damages for mental anguish are as follows:(i)

Area preparing for lifting of evacuation instructions = JPY 100 000 per person
per month.

(ii)

Area subject to living restrictions = JPY 100 000 per person per month,
JPY 2.4 million being also possible as lump sum for 2 years’ damages.

(iii) Area in which homecoming is difficult = lump sum of JPY 6 million per person.1(4) The period of eligibility for compensation after the lifting of evacuation instructions
should be determined based on future circumstances, compensation being provided
uniformly regardless of when individual Evacuees returned home during that period.

2. Evacuation expenses and damages for mental anguish for former Evacuation-Prepared
Areas in Case of Emergency(1) The amount of damages from one year after the accident is JPY 100 000 per person
per month.
(2) The guideline period of eligibility for compensation is until the end of August this year
(decided flexibly according to the individual, specific circumstances such as the1.

A higher amount may be allowable according to the individual, specific circumstances, such as
when evacuation is prolonged.

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healthcare/welfare system and school situation), with compensation being provided
uniformly regardless of when a person returned home from one year after the accident.
(3) Persons who have already returned home or continue to stay shall be eligible forcompensation according to the individual, specific circumstances.

3. Evacuation expenses and damages for mental anguish for Evacuation Recommendation Spots(1) The amount of damages after one year is JPY 100 000 per person per month.
(2) The guideline period of eligibility for compensation is provisionally a three-month
period after the lifting of evacuation instructions, with compensation being provided
uniformly regardless of when individual Evacuees returned home during that period.

4. Loss or reduction, etc., of the value of real estate
In the Interim Guidelines, it is stated, “for property, the real loss of or reduction in thevalue and related necessary and reasonable additional expenses (including repair anddecontamination expenses) are allowable as damage to be compensated.”(1) For real estate in an “area in which homecoming is difficult”, the reduction in value ispresumed to be 100% (total loss).
(2) For real estate in an “area subject to living restrictions” and an “area preparing for
lifting of evacuation instructions”, it is presumed that there has been some reduction invalue, taking into consideration the period until the lifting of evacuation instructions, etc.
(3) Assess rationally, taking into consideration the re-acquisition price of property for
dwelling use, etc.

5. Business damages and damages due to incapacity to work
In the Interim Guidelines, it is stated, “the termination point is the date on which,essentially, it becomes possible to engage in the same or equivalent business or
employment activity to that which was engaged in before, taking into consideration that
there is the possibility for relocation or change of occupation, change of career or
temporary employment, etc.” It is further stated, “As a general rule, the reduction inincome such as pay is an amount calculated by deducting the pay, etc. after the onset ofincapacity, etc. from the pay, etc. prior to incapacity, etc.”(1) The termination point is not indicated for the time being, and a decision should betaken rationally based on the individual, specific circumstances.
(2) If change of occupation/career or temporary business operation/employment isrecognised as special efforts, a rational and flexible approach is required, such as notdeducting from the amount of damages the income derived therefrom.

6. Damage related to Voluntary Evacuation, etc.
In the First Supplement to the Interim Guidelines, concerning damage related tovoluntary evacuation, etc. until the end of December 2011, uniform damages are allowed
for all residents in the Affected Areas, based on municipality units.
From January 2012, decisions are made for individual cases or types with regard tochildren and pregnant women, without establishing areas (based on the criterion ofreasonableness for an average, ordinary person).

7. Damages related to decontamination, etc.
(1) Notwithstanding the operation of the Act on Special Measures concerning theHandling of Environmental Pollution by Radioactive Materials, expenses that are
inevitably incurred in connection with carrying out necessary and reasonable

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decontamination, etc.
property/business.

areeligibleforcompensation,

includingdamageto(2) Expenses related to necessary and reasonable testing, etc. carried out by local
authorities and educational institutions in order to allay residents’ unease, etc. about
exposure to radiation are eligible for compensation.

8. The response of TEPCO
A rational and flexible approach is required, also with regard to damages that are notclearly stated in the Guidelines, such as allowing compensation for all damages or acertain range of damages in individual cases or types, according to the nature of thedamage, based on the general intent of the Guidelines.

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Second Supplement to Interim Guidelines on Determination of the
Scope of Nuclear Damage resulting from the Accident at the Tokyo
Electric Power Company Fukushima Daiichi and Daini Nuclear Power
Plants (concerning Damages related to Review of Evacuation Areas
by Government Instructions, etc.)
16 March 2012
Dispute Reconciliation Committee for Nuclear Damage Compensation

Part 1. Introduction
Status of Review, etc. of Evacuation Areas, etc.
In the Interim Guidelines on Determination of the Scope of Nuclear Damage resulting
from the Accident at the Tokyo Electric Power Company Fukushima Daiichi and Daini
Nuclear Power Plants (“Interim Guidelines”) finalised and published on 5 August 2011, theDispute Reconciliation Committee for Nuclear Damage Compensation (“Reconciliation
Committee”) indicated its thinking concerning the scope of damages related togovernment instructions to evacuate, etc. and stated that as circumstances changed,
including a review, etc. of the Evacuation Areas, etc. further consideration would begiven, as necessary, to the matters to be specified in the Guidelines.
Subsequently, on 30 September of the same year, the Government (Nuclear Emergency
Response Headquarters) lifted the Evacuation-Prepared Area in Case of Emergency
designation, and gave instructions and public notice in this regard. Further, based on the“Basic Approach concerning Review of Restricted Areas and Areas Subject to Evacuation
Instructions following stage 2 Completion, and Future Issues for Consideration” formulated
on 26 December of the same year, the Government (the said Headquarters) reviewed thecurrently established Areas subject to Evacuation Instructions, and planned to establish
new Areas subject to Evacuation Instructions, with the end of March 2012 as target.
Meanwhile, concerning so-called voluntary evacuation, etc., the Reconciliation
Committee indicated its approach to the scope of damages in the Supplement to theInterim Guidelines on Determination of the Scope of Nuclear Damage resulting from the
Accident at the Tokyo Electric Power Company Fukushima Daiichi and Daini Nuclear
Power Plants (concerning Damages related to Voluntary Evacuation, etc.) finalised andpublished on 6 December 2011 (“First Supplement”).

Basic approach
Based on the aforementioned review, etc. of the Evacuation Areas, etc., in the present
supplement to the Interim Guidelines (“Second Supplement”), we indicate our thinking,to the extent currently possible, concerning the scope of damage related to government
instructions to evacuate, etc. and the scope of damage related to voluntary evacuation,etc. encompassed by the Interim Guidelines and First Supplement, in relation to mattersthat were stated as being for future consideration, etc.

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The existence of a sufficient causal relationship between the accidents at the Tokyo
Electric Power Company Fukushima Daiichi and Daini nuclear power plants (the“accident”) and their respective damages should ultimately be determined on a case-bycase basis, but the Second Supplement indicates a certain scope within which
compensation should be allowed, in order to promote the resolution of disputes
concerning the compensation of damage resulting from the accident.
Further, rather than immediately disallowing compensation for something notencompassed by the Interim Guidelines, the First Supplement and the Second
Supplement, it may be possible for damage to be recognised as having a sufficient causal
relationship based on the individual, specific circumstances. In this respect, a rationaland flexible approach is required of TEPCO, also with regard to damages that are notclearly stated in these Guidelines, such as allowing compensation for all damage or acertain range of damage in individual cases or types, according to the nature of thedamage, based on the general intent of these Guidelines.

Part 2. Damages related to government instructions to evacuate, etc.
Evacuation expenses and damage for mental anguish
In addition to what was indicated in the Interim Guidelines, Section 2 (Evacuation
expenses) and Section 6 (Damage for mental anguish) under the Types of Damage inPart 3 of the Interim Guidelines are as follows.

1. Areas subject to Evacuation Instructions
Among the Affected Areas under Part 3 of the Interim Guidelines, with regard to i) area
within a 20-km radius from the Tokyo Electric Power Company Fukushima Daiichi
nuclear power plant (established on 22 April 2011 as Restricted Area to which entry is
prohibited) and (4) Evacuation-Prepared Area in Case of Emergency under Section 1(Affected Areas), the following new Areas subject to Evacuation Instructions are
established (the descriptions in brackets under i) to iii) below represent the basic thinking
for each area) (hereinafter “review of Areas subject to Evacuation Instructions”), with theend of March 2012 as target:i)Area preparing for lifting of evacuation instructions (area in which it has been
definitively confirmed that annual accumulated exposure dose is 20 mSv or less).

ii)

Area subject to living restrictions (area in which annual accumulated exposure
dose could exceed 20 mSv, where continued evacuation is required in order toreduce the level of radiation dose of residents).

iii)

Area in which homecoming is difficult (an area currently with annual
accumulated exposure dose exceeding 50 mSv, where it is feared that annual
accumulated radiation may not fall below 20 mSv even over a long period,
specifically after five years).

Based on this, the evacuation expenses and damage for mental anguish for persons who,at the time of the accident, had their main home (“home”) in an area established as oneof these Areas subject to Evacuation Instructions (“Area subject to Evacuation
Instructions”) are as follows: GuidelinesI) Concerning a person who had their home in an Area subject to Evacuation Instructions,
Sections 2 and 6, under Types of Damage in Part 3 of the Interim Guidelines are extended
to the moment of review of Areas subject to Evacuation Instructions, and the period fromthis point until termination is Stage 3.

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GUIDELINESII) As a general rule, the evacuation expenses and damage for mental anguish to becompensated in Stage 3 defined under Guideline I), and the calculation methods for their
damage amounts, continue to be as indicated in Sections 2 and 6 under the Types ofDamage in Part 3 of the Interim Guidelines. However, it should be noted that foraccommodation expenses, etc. (Guideline I) item (2) “accommodation expenses, etc.”
under Section 2 (Evacuation expenses) under the Types of Damage in Part 3 of the Interim
Guidelines; likewise hereinafter), there are limits to the amounts and periods eligible forcompensation.
III) When calculating the specific amount of damages for mental anguish in Stage 3
defined under Guideline I) (including among evacuation expenses, an increase in living
expenses within the normal range), the following applies, according to the area in which
the Evacuees had their home.
i)Concerning an area established as an area preparing for lifting of evacuation
instructions along with the review of Areas subject to Evacuation Instructions,the guideline figure is JPY 100 000 per person per month.

ii)

Concerning an area established as an area subject to living restrictions alongwith the review of Areas subject to Evacuation Instructions, the guideline figure
is JPY 100 000 per person per month, and a person may claim JPY 2.4 million as alump sum for roughly two years’ damages. However, if the period up to thelifting of the evacuation instructions is extended, an amount will be added
according to the period eligible for compensation.

iii)

Concerning an area established as an area in which homecoming is difficult
along with the review of Areas subject to Evacuation Instructions, the guideline
figure is JPY 6 million per person.

IV) Concerning “considerable period” in “after the elapse of a considerable period fromthe lifting, etc. of evacuation instructions, etc.”, which the Interim Guidelines state is not
eligible for compensation, except where special circumstances exist with regard toevacuation expenses and damage for mental anguish, a decision should be taken basedon future circumstances with respect to Areas subject to Evacuation Instructions.

 Notes#1 With regard to Guideline I) above, in Section 6 under the Types of Damage in Part 3 ofthe Interim Guidelines, Stage 2 – which is the calculation period for the specific amount ofdamage for mental anguish – is the “six-month period from the end of Stage 1 (six-month
period from the occurrence of the accident)”, and it was stated that “this Stage will be
reviewed as necessary, where for example a Restricted Area, etc. is reassessed”. Therefore,
with regard to Areas subject to Evacuation Instructions, the period until the moment of said
review is Stage 2, along with the review of Areas subject to Evacuation Instructions, and a
new period, Stage 3, is the period from this point until termination.
#2 With regard to Guideline II) above, under the Types of Damage in Part 3 of the Interim
Guidelines, “(1) Transport expenses and removal expenses for household belongings
incurred in order to evacuate from an Affected Area”, “(2) Accommodation expenses
incurred as a result of residing temporarily, of necessity, outside an Affected Area andexpenses incurred incidentally to that accommodation” and “(3) If an Evacuee’s living
expenses increase as a result of evacuation, etc., the portion representing the increase” isrecognised as evacuation expenses that should be compensated, to a necessary andreasonable extent. Further, in Section 6 under the Types of Damage in Part 3 of the Interim
Guidelines, among the damage for mental anguish sustained by a person subject toevacuation, etc., at the very least “mental anguish arising from being substantiallyhindered from leading a normal life over a long period due to having, of necessity, to live
away from their home” and “psychological anguish from being in a state of ungoing
uncertainty from not knowing when they will be able to return home” are allowed asJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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damage to be compensated. In this case, reasonable calculation methods are as follows: for(1) and (2) above, the actual costs incurred constitute the amount of damages; and for (3)above, as a general rule the amount of damages is a fixed sum calculated by adding theamount of the aforementioned damage for mental anguish to the increase in living
expenses.
#3 With regard to Guideline II), accommodation expenses, etc. are compensated to anecessary and reasonable extent, and for example for persons whose former home was arental house, provisionally the amount of the compensation could conceivably be the fullamount of the accommodation expenses, etc. or the increase in rent if the person was
obliged to pay an increase over the previous rent after the elapse of a certain period of time.
Further, as a general rule the period in which accommodation expenses, etc. are eligible forcompensation is a considerable period of time after the lifting of evacuation instructions.
For example, if a person's former dwelling was a home which they owned and the realestate value of the home suffered a total loss, as a guide the period of eligibility could
conceivably last until it became possible for them to receive compensation for the fullamount of the loss.
#4 With regard to Guideline II), in the case of a person whose home was in an area in whichhomecoming is difficult, etc., who gives up returning home and seeks to relocate, theassociated removal expenses, increase in living expenses, etc., are allowable as damage tobe compensated on the basis of evacuation expenses and homecoming expenses under
Sections 2 and 4 under the Types of Damage in Part 3 of the Interim Guidelines. In addition,in an area in which homecoming is difficult, mental anguish arising from a person having,of necessity, to abandon the home and region with which they have become familiar overmany years is recognised, and even in other Areas subject to Evacuation Instructions,
damage for mental anguish is allowed based on the mental anguish indicated under
Section 6 under the Types of Damage in Part 3 of the Interim Guidelines. Further, it isappropriate that no differences should be established in the damage amounts and payment
methods, etc. between persons continuing to evacuate and persons seeking to relocate.
#5 With regard to Guideline III), in calculating the specific amount of damages, an increasein “psychological anguish from being in a state of ungoing uncertainty from not knowing
when they will be able to return home”, etc. associated with prolonged evacuation has beentaken into consideration. In this case, for an area preparing for lifting of evacuation
instructions, the lifting of evacuation instructions is anticipated in the relatively near
future, and therefore calculation is made on a monthly basis, as before. On the other hand,in an area in which homecoming is difficult, a situation in which it is not possible to returnhome is expected to continue for at least the next five years, and therefore a uniform
calculation has been made regardless of the period until the evacuation instructions are
actually lifted, as lump sum damages resulting from not being able to return home for along period. This is only a guideline amount, and a higher amount may be allowableaccording to the individual, specific circumstances, such as when the period of not being
able to return home is prolonged. Further, in an area subject to living restrictions, although
the specific time-scale until the lifting of evacuation instructions is unclear at the present
time, essentially calculation is made on a monthly basis, based on the assumption that thelifting of instructions will be prolonged to some extent, and for the moment it isappropriate for a lump sum payment to be received envisaging damages for a fixed period,in order to provide relief for the victims. Moreover, if the time-scale until the lifting of
evacuation instructions is prolonged, the amount of damages in said area would increasein proportion to the period eligible for compensation, in which case the approximate
guideline figure could conceivably be the amount of damages for an area in whichhomecoming is difficult, at the most.
#6 With regard to Guideline IV), since at the present time no Area subject to Evacuation
Instructions has actually seen the lifting of evacuation instructions, it is currently difficult
to indicate a specific considerable period, at least at the present time.

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GUIDELINES#7 With regard to “where special circumstances exist” after the elapse of a considerable
period of time under Guideline IV), a flexible approach is appropriate according to theindividual, specific circumstances, for example taking into consideration thehealthcare/welfare system in an area following the lifting of instructions in relation to aperson requiring certain medical treatment/nursing care, etc., or for a child thecircumstances at the school they will attend. Further, in order to compensate a large
number of Evacuees promptly and fairly, as a general rule it is reasonable to calculate an
amount of damages taking as a uniform termination point the moment at which said
period elapsed, even if a person returned home before the elapse of a considerable period
after the lifting of evacuation instructions, and regardless of the point at which individual
Evacuees actually returned.

2. Former Evacuation-Prepared Areas in Case of Emergency
Among the Affected Areas in Part 3 of the Interim Guidelines, with regard to Section 4(Evacuation-Prepared Area in Case of Emergency), based on the lifting of such Areas on
30 September 2011, the evacuation expenses and damage for mental anguish for a person
whose home was inside such an area (hereinafter “former Evacuation-Prepared Area inCase of Emergency”) are as follows: GuidelinesI) The evacuation expenses and damage for mental anguish to be compensated in Stage 3
under the Interim Guidelines, and the calculation methods for their damage amounts,
continue to be as indicated in Sections 2 and 6 under the Types of Damage in Part 3 of theInterim Guidelines.
II) When calculating the specific amount of damage for mental anguish in Stage 3 underthe Interim Guidelines (including among evacuation expenses, an increase in living
expenses within the normal range), the guideline figure is JPY 100 000 per person permonth.
III) Concerning “considerable period” in “after the elapse of a considerable period from thelifting, etc. of evacuation instructions, etc.”, which the Interim Guidelines state is not
eligible for compensation, except where special circumstances exist with regard toevacuation expenses and damage for mental anguish, for former Evacuation-Prepared
Areas in Case of Emergency the guideline period is to the end of August 2012. However,with regard to the area of Naraha town within such area, for the Area subject to Evacuation
Instructions in this town the period lasts until the elapse of a “considerable period” after
the lifting of instructions (Guideline IV) under Section 1 above).

 Notes#1 With regard to Guideline I), Stage 2 for a former Evacuation-Prepared Area in Case of
Emergency is the six-month period from the end of Stage 1 (the six-month period from theoccurrence of the accident), as indicated in Section 6 of Types of Damage in Part 3 of theInterim Guidelines, and Stage 3 is the period lasting from 11 March 2012 until termination.
#2 With regard to II), a calculation has been made based on the case of an Area subject to
Evacuation Instructions.
#3 With regard to III), the following matters, among others, have been taken into
consideration: (i) restoration of the infrastructure in this area is expected to be largely
completed by the end of March 2012; (ii) although it will take some additional time toestablish a living environment, the related municipalities expect to establish anenvironment for school attendance by September 2012, before the start of the second termof the fiscal 2012 academic year; (iii) a certain period will be required to prepare for
Evacuees to return to their former homes. However, at the present time this is only aguideline indication, premised on these circumstances, and in the event of a future changeJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012177

GUIDELINESin these circumstances, it would be appropriate to make decisions flexibly, taking into
consideration the actual conditions. With regard to “where special circumstances exist”
after the elapse of a considerable period of time, the approach is the same as describedunder Note #7 in Section 1 above.
#4 With regard to Naraha town, the fact that there are special circumstances has beentaken into consideration, for example almost the entire area of the town is subject toevacuation instructions.
#5 With regard to Guideline III), in Stage 3 as a general rule it is reasonable to calculate an
amount of damages taking as a uniform termination point the moment at which said
period elapsed, even if a person returned home before the elapse of a considerable period
after the lifting of evacuation instructions, and regardless of the point at which individual
Evacuees actually returned, in the same manner as with Areas subject to Evacuation
Instructions. In the event that a person returned home in Stage 1 or Stage 2, or continued toreside in this area from the moment the accident occurred, without evacuating, they may
be eligible for compensation according to the individual, specific circumstances.

3. Evacuation Recommendation Spots
Among the Affected Areas in Part 3 of the Interim Guidelines, with regard to Section 5(Evacuation Recommendation Spots), given that investigation is underway with a view tolifting such areas, the evacuation expenses and damage for mental anguish for persons
whose home was in such a site are as follows: GuidelinesI) The evacuation expenses and damage for mental anguish to be compensated in Stage 3
under the Interim Guidelines, and the calculation methods for their damage amounts,
continue to be as indicated in Sections 2 and 6 under the Types of Damage in Part 3 of theInterim Guidelines.
II) When calculating the specific amount of damage for mental anguish in Stage 3 under theInterim Guidelines (including among evacuation expenses, an increase in living expenses
within the normal range), the guideline figure is JPY 100 000 per person per month.
III) Concerning “considerable period” in “after the elapse of a considerable period from thelifting, etc. of evacuation instructions, etc.”, which the Interim Guidelines state is not
eligible for compensation, except where special circumstances exist with regard toevacuation expenses and damage for mental anguish, for Evacuation Recommendation
Spots the provisional guideline period is three months.

 Notes#1 With regard to Guideline I), Stage 2 for Evacuation Recommendation Spots is the sixmonth period from the end of Stage 1 (the six-month period from the occurrence of theaccident), as indicated in Section 6 under the Types of Damage in Part 3 of the Interim
Guidelines, and Stage 3 is the period lasting from 11 March 2012 until termination.
#2 With regard to Guideline II), a calculation has been made based on the case of an Area
subject to Evacuation Instructions.
#3 With regard to Guideline III), the following factors, among others, have been taken into
consideration: (i) sufficient discussion is due to be carried out with local authorities before
lifting an Evacuation Recommendation Spot; (ii) such sites are established on a dwelling
unit basis, and as they encompass relatively narrow areas, public facilities, etc. are notobstructed over a wide area; (iii) a certain period will be required to prepare for Evacuees toreturn to their former homes. However, since at the present time no site has actually been
lifted, this is indicated only as a provisional guide. With regard to “where special

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circumstances exist” after the elapse of a considerable period of time, the approach is thesame as described under Note #7 in Section 1 above.
#4 With regard to Guideline III), the same as described in Note #5 under Section 2 above
applies if in Stage 3 under the Interim Guidelines a person returns to their home in an
Evacuation Recommendation Spot before the elapse of a considerable period after thelifting of the specific site, if they return in Stage 1 or Stage 2, or if they have continued toreside in this site from the moment the accident occurred, without evacuating.

Business damage
In addition to what was indicated in the Interim Guidelines, Section 7 (Business damage),
under the Types of Damage in Part 3 of the Interim Guidelines is as follows: GuidelinesI) Regarding the termination point for Section 7: Business damages under Types ofDamage in Part 3 of the Interim Guidelines, nothing is indicated for the time being, and adecision should be taken rationally based on the individual, specific circumstances.
II) If special efforts are recognised on the part of a business operator who has sufferedbusiness damage, such as change of occupation/career or temporary business
operation/employment, a rational and flexible approach is required, such as not deductingfrom the amount of damages the profits or pay gained as a result of these efforts.

 Notes#1 The termination point for business damage under Guideline I) is not indicated for the time
being. Indeed at the present time at least, it is difficult to indicate specific, uniform guidancein view of the special characteristics of the accident, which caused damage that was sudden
and extended over a wide area, and in view of the diversity of business operators thatsustained business damage, etc., it is appropriate for a decision to be taken rationally basedon the individual, specific circumstances. Further, the termination point for business damage
is determined solely based on Guideline I), and it does not arrive independently thereof as aresult of the lifting of evacuation instructions, etc., the elapse of a considerable period after
such lifting, or the return to an Area subject to Evacuation Instructions, etc.
#2 When determining the specific termination point, the following factors, among others,
are taken into consideration: (i) it is reasonable to specify the termination point as the dateon which, essentially, it becomes possible for the victim to engage in the same orequivalent business activity to that which they were engaged in before; (ii) on the other
hand, the victim is also expected to take measures to avoid or mitigate the damage fromthe accident, as far as possible, and generally there is thought to be the possibility forrelocation of the business site or change of occupation, etc. In addition, reference could bemade to the loss indemnification criteria, etc. associated with the acquisition of public land,for example, in which case it should be noted that there are special characteristics thatdiffer from the appropriation of land, etc., given that the accident involved damage thatwas sudden and extended over a wide area, and there are cases in which an Evacuee
returns home after the lifting of evacuation instructions, etc.
#3 With regard to Guideline II), in the case of a business operator who has sustained
business damage, if there are profits or pay, etc. that were obtained as a result of business
operation/employment after the accident (including change of occupation/career or
temporary business operation/employment), as a general rule this is deducted from theamount of business damages, but only where such business operation/employment would
have been directed at the former business activity had the accident not occurred. However,given the special characteristics of the accident, namely that damage was inflicted on the
lives and business activities, etc. of a large number of people, suddenly and over a wide

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area, in some cases it could be more difficult than usual for the victims to engage inbusiness/employment. Moreover, when a uniform deduction is made across the board forthe profits, pay, etc. obtained from such business operation/employment, there is no
decrease in the monetary amount of damages of a person who does not engage in suchkind of business operation/employment, whereas the amount of compensated damage
actually reduces the more a person carries on such business operation/employment. For
this reason, a “rational and flexible approach” is needed with regard to such profits, pay,etc., such as not making a deduction from the monetary amount of damages within a fixed
period or monetary amount on the basis of “special efforts”.

Damages arising from incapacity to work
In addition to what was indicated in the Interim Guidelines, Section 8 (Damages arisingfrom incapacity to work) under the Types of Damage in Part 3 of the Interim Guidelines is
as follows: GuidelinesI) Regarding the termination point for Section 8 (Damages arising from incapacity towork) under the Types of Damage in Part 3 of the Interim Guidelines, nothing is indicatedfor the time being, and a decision should be taken rationally based on the individual,
specific circumstances.
II) If special efforts are recognised on the part of a worker who has suffered damages
arising from incapacity to work, such as change of career or temporary employment, arational and flexible approach is required, such as not deducting from the monetaryamount of damages the pay, etc. gained as a result of these efforts.

 Notes#1 The approach to the termination point for damages arising from incapacity to work
under Guideline I) is essentially the same as under Notes #1 and #2 in Section 2 above.
However, also taken into consideration is the fact that generally this termination point
could arrive sooner than the termination point for business damages.
#2 With regard to Guideline II), the approach to “rational and flexible approach” associatedwith “special efforts” is essentially the same as under Note #3 above.

Loss or reduction, etc. of property value
In addition to what was indicated in the Interim Guidelines, Section 10 (Loss or reduction, etc.
of property value) under the Types of Damage in Part 3 of the Interim Guidelines is as follows.

 GuidelinesI) Concerning the property value of real estate in an area in which homecoming is difficult,it can be presumed that taking the value immediately prior to occurrence of the accident as
the basis, there has been a 100% reduction in value as a result of the accident (total loss).
II) Concerning the property value of real estate in an area subject to living restrictions
and an area preparing for lifting of evacuation instructions, it can be presumed thattaking the value immediately prior to occurrence of the accident as the basis, there has
been some reduction in value as a result of the accident, taking into consideration the
period until the lifting of evacuation instructions, etc.

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GUIDELINES Notes#1 With regard to Guideline I), concerning the loss of or reduction in property value, etc.,
under Section 10 under the Types of Damage in Part 3 of the Interim Guidelines “the real
loss of or reduction in the value” is allowed as damage to be compensated, but withregard particularly to real estate in an area in which homecoming is difficult, special
circumstances exist, such as restricted access to the area and inability to use the property
for a long period of at least five years, so for the time being it is possible to conceive thatthe market value has been lost. For this reason, it can be presumed that taking the value
immediately prior to occurrence of the accident as the basis, there has been a 100%
reduction in value as a result of the accident (total loss), and therefore the full amount of
the value immediately prior to occurrence of the accident should be compensated, inorder to provide prompt relief for the victims.
#2 Concerning Guideline II), with regard also to the property value of real estate in anarea subject to living restrictions and an area preparing for lifting of evacuation
instructions, the reduction in property value can be eligible for compensation on thebasis that it cannot be used for a certain period, based on objective inference of the
reduction in value, in accordance with the criteria for real estate in an area in whichhomecoming is difficult.
#3 “The value immediately prior to occurrence of the accident” should be assessed
rationally according to the individual, specific circumstances, for example in the case of abuilding for dwelling use, setting a price at which an equivalent building can be acquired.
#4 If following compensation, there is a recovery in value as a result of decontamination,
repair, etc., the costs thereof being assumed by Tokyo Electric Power Company (“TEPCO”),
conceivably that portion of the value which has been recovered may be settled throughthe agreement of the parties.
#5 As indicated in Section 4 under Part 2 of the Interim Guidelines, damage resulting fromearthquake and tsunami is not eligible for compensation, but since in some cases it isdifficult to ascertain whether the damage was caused by the accident or byearthquake/tsunami, it may be possible to infer whether the damage corresponds to“nuclear damage” and infer the monetary amount of the damages, within reasonable
limits, and a rational and flexible approach is also required of TEPCO.

Part 3. Damages related to voluntary evacuation, etc.
With regard to damages related to voluntary evacuation, etc. indicated in the First
Supplement, from January 2012 the following applies.

 GuidelinesI) At the very least for children and pregnant women, there is eligibility for compensation
where it is recognised to be reasonable for an average, ordinary person to have considerable
fear and unease about exposure to radiation and seek to evacuate voluntarily in order toavoid this risk, taking into consideration objective data concerning radiation levels, proximity
to Areas subject to Evacuation Instructions, etc. for individual cases or types.
II) In the case of eligibility for compensation under Guideline I), the damage to becompensated and the calculation method for such damage is, as a general rule, as
indicated under the Types of Damage in Part 2 of the First Supplement. The specificmonetary amount of the damages should be calculated rationally in line with the generalintent of the First Supplement and according to the nature of the damage.

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GUIDELINES Notes#1 The First Supplement set a certain area in relation to damages associated withvoluntary evacuation, etc., and indicated damages that can be recognised as being
common at least to persons who were residing in this area. The applicable period for thiscalculation was from the time of occurrence of the accident until the end of December
2011, under circumstances in which there was no stabilisation of the TEPCO Fukushima
Daiichi nuclear power plant, etc. In this regard, concerning the period from January 2012,
consideration will be given in future to the scope of compensation, etc., as necessary.
#2 Accordingly, in the Second Supplement, concerning the period from January 2012: i) the
circumstances in the applicable period generally differ from the First Supplement; ii) at thesame time, for children and pregnant women at least, it is thought that the likelihood of
extreme sensitivity to radiation is generally recognised, etc., so the content of the First
Supplement is not applied “as is”. However, there is eligibility for compensation wheresuch persons have considerable fear and unease about exposure to radiation, and where it
is recognised to be reasonable for an average, ordinary person to seek to evacuate
voluntarily in order to avoid this risk, according to the individual case or type.

Part 4. Damages related to decontamination, etc.
In addition to what was indicated in the Interim Guidelines, damages related todecontamination, etc. are as follows: GuidelinesI) Concerning radioactive material originating in the accident, additional expenses thatare inevitably incurred in connection with carrying out decontamination, etc. to anecessary and reasonable extent (as well as the removal of contaminated soil, etc.,
including measures to prevent the spreading, etc. of contamination, the collection,transportation, storage and disposal of contaminated soil as well as the processing ofcontaminated waste material), the reduction in income and loss of/reduction in property
value are allowed as damage to be compensated.
II) Expenses related to necessary and reasonable testing, etc. carried out by local
authorities and educational institutions in order to allay residents' unease and fear about
exposure to radiation are allowed as damage to be compensated.

 Notes#1 With regard to Guideline I), in Article 44-1 of the Act on Special Measures concerning theHandling of Environmental Pollution by Radioactive Materials Discharged as a Result of the
Nuclear Plant Accident following the 11 March 2011 Earthquake Off the Pacific Coast of the
Tohoku District (“Special Measures Act”), it is stipulated, “Measures to tackle
environmental contamination resulting from radioactive materials originating in theaccident, which are enacted on the basis of this Act, pertain to damages for which related
nuclear operator bear a compensation liability, pursuant to the provisions of Section 3-1 of
the Act on Compensation for Nuclear Damage (Act No. 147 of 1961), and the burden for
implementing these measures shall be assumed by said related nuclear operator”. As well
as expenses that are directly necessitated by measures based on the Special Measures Act,
items corresponding to Guideline I), regardless of whether they are encompassed by Article
44-1 of said Act, including property damage and business damage, etc. accompanying saidmeasures, are eligible for compensation as nuclear power damage.

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GUIDELINES#2 With regard to Guideline II), consideration has been given to the fact that the existing
situation regarding exposure and the unease and fear of evacuating residents about
exposure to radiation are serious, and in order to allay such unease and fear, local
authorities and educational institutions have been forced to take measures such asmeasuring children’s external exposure to radiation and testing radioactivity on daily
food items, etc.

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Nuclear Damage Compensation Facilitation Corporation Act(Act No. 94 of 2011)

Chapter I. General provisions

 Purpose
Article 1. The purpose of the Nuclear Damage Compensation Facilitation Corporation is,in the case where nuclear damage [meaning the “nuclear damage” prescribed in Section 2,
paragraph 2 of the Act on Compensation for Nuclear Damage (Act No. 147 of 1961; hereafter
the “Compensation Act”)] of which the actual amount to be compensated by the nuclear
operator (meaning the “nuclear operator” prescribed in Article 38, paragraph 1 of thepresent Act; hereinafter the same shall apply in Article 37) pursuant to the provisions ofSection 3 of the Compensation Act exceeds the financial security amount provided in
Section 7, paragraph 1 of the Compensation Act [such a financial security amount ishereinafter simply referred to as “Financial Security Amount” in Article 41, paragraph (1)],to attempt to implement prompt and appropriate compensation for nuclear damage and toensure the smooth management of stable supply of electricity and any other businessactivities of the reactor operation, etc. [meaning the reactor operation, etc. prescribed in
Article 38, paragraph (1)of the present Act] by granting the necessary funds to and carryingout other businesses for said nuclear operator incurred in compensating the damage, andthereby to enhance the stability of citizens’ lives and to contribute to the sounddevelopment of the national economy.

 Responsibility of the State
Article 2. Taking into consideration that the State has had the social responsibility
that comes along with promoting the nuclear energy policy, the State shall take allnecessary measures to enable the Nuclear Damage Compensation Facilitation
Corporation to achieve the purpose described in the preceding Article.

 Juridical personality
Article 3. The Nuclear Damage Compensation Facilitation Corporation (“Corporation”)
shall be a juridical person.

 Number
Article 4. Only one Corporation shall be established.

 Stated capital
Article 5. The Corporation’s stated capital shall be the total amount subscribed byboth the Government and non-governmental persons.
(2) The Corporation, when necessary, may increase its stated capital with theauthorisation of the competent ministers.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION NameArticle 6. The Corporation shall use the term “Genshiryoku Songai Baisho Shien Kikou”(meaning “Nuclear Damage Compensation Facilitation Corporation”, the same shall apply
hereinafter) in its name.
(2) No person other than the Corporation shall use any term “Genshiryoku Songai Baisho
Shien Kikou”, in its name.

 Registration
Article 7. The Corporation shall complete its registration pursuant to the provisions ofa Cabinet Order.
(2) The matters that required registration pursuant to the provision of the preceding
paragraph may not be duly asserted against a third party prior to the registration.

 Application Mutatis Mutandis of the Act on General Incorporated Associations andGeneral Incorporated Foundations
Article 8. The provisions of Articles 4 and 78 of the Act on General Incorporated
Associations and General Incorporated Foundations (Act No. 48 of 2006) shall apply
mutatis mutandis to the Corporation.

Chapter II. Establishment

 Founders
Article 9. In order to establish a Corporation, three or more persons with expert
knowledge and experience concerning the electricity business need to become the founders.

 Preparation of articles of incorporation, etc.
Article 10. The founders shall promptly prepare articles of incorporation of the
Corporation, and shall solicit capital subscription in the Corporation from nongovernmental persons.
(2) The articles of incorporation set forth in the preceding paragraph shall state thefollowing matters:(i)purpose;(ii)

official name;(iii) office locations;(iv) matters concerning stated capital and capital subscription;(v)

matters concerning the Management Committee;(vi) matters concerning officers;(vii) matters concerning businesses and their execution;(viii) matters concerning finance and accounting;(ix) matters concerning amendment of the articles of incorporation; and
(x)

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 Authorisation for establishment
Article 11. When the solicitation set forth in paragraph (1) of the preceding Article has
been terminated, the founders shall promptly submit the articles of incorporation to thecompetent ministers and apply for authorisation for the establishment.

 Succession of affairs
Article 12. When authorisation for the establishment has been granted, the founders
shall, without delay, hand over the affairs to a person who shall become the President of
the Corporation.
(2) When the affairs have been handed over pursuant to the preceding paragraph, aperson who shall become the President of the Corporation shall, without delay, request
payment for capital subscription from both the Government and the non government
persons who have applied for the solicitation of capital subscription.

 Registration of establishment
Article 13. When the capital subscription has been paid in pursuant to paragraph (2)of the preceding Article, a person who shall become the President of the Corporation
shall, without delay, complete its registration of establishment pursuant to the provisionsof a Cabinet Order.
(2) The Corporation shall be established by completing a registration of establishment.

Chapter III. Management Committee Establishment
Article 14. The Corporation shall establish a Management Committee.

 Authority
Article 15. In addition to matters specified elsewhere in this Act, the following
matters shall be subject to resolution of the Management Committee:(i)amendment of the articles of incorporation;(ii)

preparation or amendment of the statement of operational procedures;(iii) preparation or modification of the budget and financial plan;(iv) settlement of account; or(v)

any other matter that the Management Committee finds particularly necessary.

 Organisation
Article 16. The Management Committee shall be composed of up to eight committee
members, and the President and officers of the Corporation.
(2) The Management Committee shall have a chairperson, who shall be designated by thecommittee members from among themselves.
(3) The chairperson of the Management Committee shall exercise general control over its
business.
(4) The Management Committee shall, in advance, designate a person who shall performthe duties of the chairperson when the chairperson is prevented from attending tohis/her duties from among the committee members.
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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION Appointment of committee members
Article 17. The committee members shall, with the authorisation of the competent
ministers, be appointed by the President of the Corporation from among persons withexpert knowledge and experience concerning the electricity business, economics,
finance, law or accounting.

 Term of office of committee members
Article 18. The term of office of committee members shall be two years; provided,
however, that the term of office of a substitute committee member appointed where
there is any vacancy shall be the remaining term of the predecessor.
(2) Committee members may be reappointed.

 Dismissal of committee members
Article 19. The President of the Corporation may dismiss a committee member withthe authorisation of the competent ministers when a committee member falls under anyof the following items:(i)when an officer has received an order for the commencement of bankruptcy
proceedings;(ii)

when an officer has been sentenced to imprisonment without work or a heavier
punishment;(iii) when an officer has been deemed incapable of executing his/her duties due tomental or physical disorder; or(iv) when an officer has breached his/her obligations in the course of duties.

 Resolution method
Article 20. The Management Committee may not hold a meeting nor make aresolution without the attendance of a majority of committee members, and thePresident and directors of the Corporation in addition to the attendance of either thechairperson or a member who shall perform the duties of the chairperson, pursuant to
Article 16 paragraph (4).
(2) A resolution of the Management Committee shall be made by a majority of votes castby the committee members, and the President and directors of the Corporation who arepresent. When the votes are equally split, the chairperson shall make a final decision.

 Committee members’ duty of confidentiality
Article 21. The committee members shall not divulge any secrets that they have learnt in
the course of their duties. The same shall apply even after they have left the Corporation.

 Position of committee members
Article 22. With regard to the application of the Penal Code (Act No. 45 of 1907) andany other penal provisions, the committee members shall be deemed employees engaged
in public service pursuant to laws and regulations.

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Chapter IV. Officers, etc.

 Officers
Article 23. The Corporation shall have one President, up to four Directors and one
auditor as officers.

 Duties and authority of officers
Article 24. The president shall represent the Corporation and preside over its business.
(2) In accordance with the decision made by the President of the Corporation, theDirectors shall represent the Corporation, assist the President in administering thebusiness of the Corporation, act on behalf of the President when he/she has had an
accident, and perform the duties of the President when his/her position is vacant.
(3) The auditor shall audit the Corporation’s business.
(4) When it is found necessary based on the results of audits, the auditor may submit
opinions to the Management Committee, to the President or to the competent ministers.

 Appointment of officers
Article 25. The President and the auditor shall be appointed by the competent ministers.
(2) The Directors shall be appointed by the President with the authorisation of thecompetent ministers.

 Term of office of officers
Article 26. The term of office of officers shall be two years; provided, however, thatthe term of office of a substitute officer appointed in the case where there is any vacancy
in the position shall be limited to the remaining term of the predecessor.
(2) An officer may be reappointed.

 Ineligibility for officers
Article 27. Officials of the Government or a local government (excluding part-timeofficials) may not become officers.

 Dismissal of officers
Article 28. The competent ministers or the President shall dismiss the officer when an
officer appointed by either of them falls under the provisions of the preceding Article.
(2) The competent ministers or the President may dismiss the officer as prescribed in theprovisions of Article 25, paragraph (1) when an officer appointed by either of them falls
under any of the items of Article 19 or when it is deemed to be inappropriate for that
officer to remain in his/her position.

 Prohibition of concurrent holding of positions by officers
Article 29. Officers (excluding a part-time officer) shall not become an officer of a forprofit body, or shall not be engaged in commercial business; provided, however, that thisshall not apply to the case where the officer obtains the approval of the competent ministers.

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 Prohibition of concurrent holding of positions by the auditor
Article 30. The auditor shall not concurrently hold the post of President, officer,
Management Committee member, or employee of the Corporation.

 Restriction on authority of representation
Article 31. With regard to matters in which there exists conflict of interests between
the Corporation and the President or Directors, these persons shall not have authority ofrepresentation. In this case, the auditor shall represent the Corporation.

 Appointment of agents
Article 32. The President may appoint an agent who has the authority to undertake all
judicial or non judicial acts relating to a portion of the business of the Corporation fromamong employees of the Corporation.

 Appointment of employees
Article 33. The Corporation’s employees shall be appointed by the President.

 Confidentiality obligation, etc. of officers, etc.
Article 34. The provisions of Articles 21 and 22 shall apply mutatis mutandis to officers
and employees.

Chapter V. Business
Section 1. Scope of business, etc.

 Scope of business
Article 35. The Corporation shall conduct the following businesses in order toaccomplish the purpose prescribed in Article 1:(i)

receipt of contributions pursuant to the provisions of the following section;(ii)

financial assistance pursuant to the provisions of Section 3 and other businesspursuant to the provisions of the same section;(iii) consultation pursuant to the provisions of Section 4 and any other businesspursuant to the provisions of the same section; and(iv) business incidental to the business listed in the preceding three items.

 Statement of operational procedures
Article 36. When the Corporation commences business, it shall prepare a statement ofoperational procedures and shall obtain the authorisation of the competent ministers.
The same shall apply when the Corporation intends to amend the statement ofoperational procedures.
(2) The matters concerning the contributions and any other matters specified by an
Ordinance of the competent ministries shall be included in the statement of operational
procedures set forth in the preceding paragraph.

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 Collection of reports, etc.
Article 37. When it is necessary in order to carry out its business, the Corporation may
request nuclear operators to submit reports or materials.
(2) A nuclear operator that has been requested to submit reports or materials pursuant to
the provision of the preceding paragraph shall submit them without delay.

Section 2. Contribution

 Payment of contributions
Article 38. A nuclear operator [meaning a person as set forth below who is engaged (orwas formerly engaged) in the reactor operation, etc. [meaning the reactor operation, etc.
pertaining to either commercial power reactors prescribed in item (i) or commercial
reprocessing facilities prescribed in item (ii) of the definition of reactor operation, etc.
prescribed in Section 2, paragraph 1 of the Compensation Act, the same shall apply
hereinafter)] shall pay its contribution to the Corporation to cover expenses necessary for
the Corporation’s business for each business year of the Corporation:(i)a person who has received a permission set forth in Section 23, paragraph 1 of
the Act for the Regulation of Nuclear Source Material, Nuclear Fuel and Reactors(Act No. 166 of 1957; referred to as “Nuclear Reactor, etc. Regulation Act” in thefollowing item) pertaining to the commercial power reactors (meaning thecommercial power reactor prescribed in item (i) of the same paragraph; the same
shall apply in the following item); or(ii)a person who has received a designation set forth in Section 44, paragraph 1 of the
Nuclear Reactor, etc. Regulation Act pertaining to commercial reprocessing
facilities (meaning the reprocessing facilities specified by a Cabinet Order as
reprocessing facilities) that conduct the reprocessing (meaning the reprocessing
prescribed in Section 2, paragraph 8 of the Nuclear Reactor, etc. Regulation Act) of
nuclear fuel material [meaning the nuclear fuel material prescribed in Section 3,
paragraph 1, item (i) of the Basic Atomic Energy Act (Act No. 186 of 1955)] used asfuel in commercial power reactors at the reprocessing facilities prescribed in
Section 44, paragraph 2, item (ii) of the Nuclear Reactor, etc. Regulation Act.

(2) The contribution set forth in the preceding paragraph shall be paid within threemonths from the end of that business year; provided, however, that an amountequivalent to half of said contribution may be paid within three months from the day
following the day on which six months has elapsed from the day following the date of
the end of that business year.
(3) When a nuclear operator has not paid the contribution by the deadline, theCorporation shall, without delay, report that fact to the competent ministers.
(4) When the competent ministers receive a report pursuant to the provision of thepreceding paragraph, they shall publicise that fact.

 Amount of contribution
Article 39. The amount of the contribution set forth in paragraph (1) of the preceding
Article for each nuclear operator shall be an amount obtained by multiplying the total
annual amount of general contribution (meaning the amount specified by the
Corporation after obtaining a resolution of the Management Committee as the total
amount of the contribution (excluding the special contribution prescribed in Article 52,
paragraph (1)) that shall be paid by the nuclear operators in each business year of the
Corporation; hereafter the same shall apply in this Article) by the contribution rate(meaning a ratio specified by the Corporation after obtaining a resolution of theJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATIONManagement Committee for each nuclear operator as a ratio of the amount that shall be
paid by each nuclear operator to the total annual amount of the general contribution;
hereafter the same shall apply in this Article).
(2) The total annual amount of general contribution shall be specified in accordance withthe criteria specified by an Ordinance of the competent ministries as the amountnecessary to satisfy the following requirements:(i)

in light of long-term forecast of the expenses necessary for the Corporation’s
business, the total annual amount of the general contribution shall be sufficientenough to implement said business properly and certainly; and(ii)

in light of the condition of income and expenditure of each nuclear operator, thetotal annual amount of the general contribution shall pose neither the risk of
obstructing the smooth management of business activities of the reactor
operation, etc. such as stable supply of electricity and any other operations, northat of imposing extreme burden on the users of the business.

(3) Taking into consideration scale and content of business activities of the reactor
operation, etc. by each nuclear operator, and any other circumstances, the contribution
rate shall be specified in accordance with the criteria specified by an Ordinance of thecompetent ministries.
(4) When the Corporation intends to specify the total annual amount of the generalcontribution or the contribution rate, or to modify each of them, it shall obtain theauthorisation of the competent ministers.
(5) When the competent ministers intend to approve the total annual amount of thegeneral contribution set forth in the preceding paragraph, they shall, in advance, consult
with the Ministry of Finance.
(6) When the Corporation has received the authorisation set forth in paragraph (4), it
shall, without delay, notify the nuclear operators of the total annual amount of thegeneral contribution and the contribution rate pertaining to said authorisation.
(7) When the competent ministers find it necessary in light of circumstances of
implementation of business by the Corporation, that of business activities of the reactor
operation, etc. by each nuclear operator and any other circumstances, the competent
ministers may order the Corporation to modify the total annual amount of the generalcontribution or the contribution rate.

 Late payment charge
Article 40. When a nuclear operator does not pay its contribution by the deadline, it
shall pay a late payment charge to the Corporation.
(2) The amount of the late payment charge shall be an amount calculated by multiplying
the unpaid contribution by 14.5% a year in accordance with the number of days from the
day after the deadline to the day of payment inclusive.

Section 3. Financial AssistanceSub-section 1. General Rules

 Offer for Financial Assistance
Article 41. In the case where the actual amount to be compensated by a nuclear
operator for nuclear damage pursuant to the provisions of Section 3 of the Compensation
Act [“Total Amount of Compensation” in this Article and Article 43, paragraph (1)] is
expected to exceed the Financial Security Amount, the nuclear operator may make an

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application to the Corporation to provide the following measures (“Financial Assistance”)
to contribute to securing the implementation of prompt and appropriate compensation
for nuclear damage as well as smooth management of business activities of the reactor
operation, etc. such as stable supply of electricity and any other operations:(i)granting of funds to the said nuclear operator (“Granting of Funds”) to beallocated to the performance of compensation for damage within the limit of theamount obtained by deducting the Financial Security Amount from the Total
Amount of Compensation;(ii)

share subscription issued by the said nuclear operator;(iii) loan of funds to the said nuclear operator;(iv) acquisition of bonds issued by the said nuclear operator or promissory notes
specified by an Ordinance of the competent ministries; or(v) guarantee of obligations pursuant to borrowing of funds by the said nuclear operator.
(2) A nuclear operator that makes an application pursuant to the provision of the preceding
paragraph shall submit to the Corporation a document containing the following matters:(i)circumstances of nuclear damage;(ii)

forecast of the Total Amount of Compensation and measures for implementing
prompt and appropriate compensation for damages;(iii) reason for the necessity of Financial Assistance, and its contents and amount; and(iv) medium-term plans concerning the business and the balance of payments.

 Decision of Financial Assistance
Article 42. When the application has been made pursuant to paragraph (1) of thepreceding Article, the Corporation shall, without delay, after obtaining a resolution of theManagement Committee, decide whether to provide Financial Assistance, and its
contents and amount in the case where the Corporation grants it.
(2) When the Corporation has made the decision pursuant to the provision of thepreceding paragraph, it shall, without delay, notify the nuclear operator that it has
decided the said application and matters pertaining to the said decision and shall report
this to the competent ministers.
(3) In the case where the competent ministers have received the report pursuant to theprovision of the preceding paragraph, when they find it necessary to ensure that thenuclear operator, that has received the decision pertaining to the said report, implements
prompt and appropriate compensation for nuclear damage, and conducts the smoothmanagement of business activities of the reactor operation, etc. such as stable supply ofelectricity and any other operations, the competent ministers may order the Corporation
to change said decision.

 Amendment of contents, etc. of Financial Assistance
Article 43. A nuclear operator that has been notified of the decision to provide the
Financial Assistance pursuant to the provisions of paragraph (1) of the preceding Article
may make an application to change the contents or the amount of said Financial
Assistance when necessary due to an increase in the Total Amount of Compensation orother circumstances.
(2) A nuclear operator making an application pursuant to the provision of the preceding
paragraph shall submit to the Corporation a document stating the matters listed in theitems of Article 41, paragraph (2).

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(3) When the application set forth in the preceding paragraph has been made, theCorporation shall, without delay, after obtaining a resolution of the Management
Committee, make a decision whether to modify the contents or the amount of said
Financial Assistance.
(4) The provisions of paragraphs (2) and (3) of the preceding Article shall apply mutatis
mutandis to the decision pursuant to the preceding paragraph.

 Return of granted funds
Article 44. In light of the progress of the compensation for damage performed by the
nuclear operator that has received the Granting of Funds, when the Corporation findsthat all or part of the amount obtained by deducting said amount that has already been
allocated for the performance from the amount of said Granting of Funds is no longer
likely to be allocated for the performance of compensation, the Corporation shall require
said nuclear operator to pay that amount to the Corporation.

Sub-section 2. Certification of Special Business Plan, etc.

 Certification of Special Business Plan
Article 45. In the case where the Corporation intends to make a decision to provide
Financial Assistance pursuant to the provision of Article 42, paragraph (1), when it isnecessary, or is expected to be necessary, to receive government bonds pursuant to theprovision of Article 48, paragraph (2) to allocate funds necessary for the Granting of Funds
pertaining to said Financial Assistance, after obtaining a resolution of the Management
Committee, jointly with the nuclear operator that made an application for said Financial
Assistance, the Corporation shall prepare a plan (“Special Business Plan”) concerning theimplementation of compensation for damage and any other management of businesses by
the nuclear operator as well as the Financial Assistance to said nuclear operator, and shallobtain certification of the competent ministers.
(2) The Special Business Plan shall contain the following matters:(i)matters listed in Article 41, paragraph (2), item (i), item (ii) and item (iv);(ii)

measures for rationalisation of management of the nuclear operator;(iii) in addition to the measures listed in the preceding item, making a request for
co-operation to relevant persons by the nuclear operator in order to secure thefunds to be allocated for performance of compensation for nuclear damage andany other measures;(iv) matters concerning valuation pertaining to the nuclear operator’s assets andcondition of income and expenditure;(v)

measures to clarify the management responsibility of the nuclear operator;(vi) contents and amounts of Financial Assistance to the nuclear operator;(vii) matters concerning financial resource of the amount of government bonds
requested to be granted and any other funds necessary for Financial Assistance; and(viii) other matters specified by an Ordinance of the competent ministries.
(3) When the Corporation prepares a Special Business Plan, the Corporation shall value
the nuclear operator’s assets strictly as well as objectively and review its business
management thoroughly, and shall also confirm whether the requests for co-operation to
relevant persons made by the nuclear operator are appropriate and sufficient.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(4) The competent ministers may grant certification set forth in paragraph (1) only in thecase where the Special Business Plan submitted for certification set forth in the same
paragraph meets all of the following requirements:(i)

the Special Business Plan is appropriate to implement prompt and appropriatecompensation for nuclear damage and to ensure the smooth management ofbusiness activities of the reactor operation, etc. such as stable supply ofelectricity and any other operations;(ii)

matters listed in paragraph (2), item (ii) show that said nuclear operator exerts its
utmost efforts to secure the funds to be allocated for performance ofcompensation for nuclear damage; and(iii) the Special Business Plan is expected to be implemented smoothly and certainly.
(5) When the competent ministers intend to grant certification set forth in paragraph (1),they shall, in advance, consult with the Ministry of Finance and other heads of relevant
administrative organs.
(6) When the competent ministers intend to grant certification set forth in paragraph (1),they shall, without delay, give public notice of the approval and of the Special Business Plan
pertaining to said certification (“Certified Special Business Plan”); provided, however, that
this shall not apply to the matters that may be a breach of confidence of trading partners of
the nuclear operator that submitted said Special Business Plan and may pose a risk of
causing unjust disadvantage upon execution of the business of said nuclear operator.

 Change of Certified Special Business Plan
Article 46. When the Corporation and the nuclear operator intend to change theCertified Special Business Plan (excluding minor amendments specified by an Ordinanceof the competent ministries), they shall obtain certification of the competent ministers.
(2) When the Corporation intends to apply for the certification set forth in the preceding
paragraph, it shall be subject to a resolution of the Management Committee.
(3) When an application for the certification set forth in paragraph (1) has been
submitted, the competent ministers may grant certification set forth in the same
paragraph only in the case where the application meets all of the following requirements:(i)the changed Special Business Plan satisfies all of the requirements listed in theitems of paragraph (4) of the preceding Article; and(ii)

there are compelling reasons to change the Certified Special Business Plan, in
consideration of the implementation status of damage compensation and othercircumstances.

(4) The provisions of paragraphs (5) and (6) of the preceding Article shall apply mutatis
mutandis to the certification set forth in paragraph (1).

 Ensuring performance of the Certified Special Business Plan
Article 47. During a period [referred to as “special period” in this Article, paragraph (3)and Article 52, paragraph (1)] from the date of certification set forth in Article 45,
paragraph (1) to the date when the competent ministers find that all of the following
requirements have been satisfied and have given public notice, if the competent ministers
find it necessary to ensure performance of the Certified Special Business Plan (if changed,
the changed one; hereinafter the same shall apply in this paragraph), they may order the
nuclear operator (“certified operator”) that has received the certification set forth in
Article 45, paragraph (1) [including certification set forth in paragraph (1) of the preceding
Article; hereinafter the same shall apply in Article 69, paragraph (2)] to report on the
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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(i)

in light of the progress of compensation for damage performed by the certified
operator and of the implementation of the Financial Assistance based on theCertified Special Business Plan (“Special Financial Assistance”), it is foundunnecessary to grant additional government bonds pursuant to the provision ofparagraph (2) of the immediately following Article in order to give Granting ofFunds pertaining to the Special Financial Assistance to said certified operator;(ii)

among the government bonds granted to the Corporation pursuant to theprovision of paragraph (2) of the immediately following Article, the government
bonds that have not been redeemed pursuant to the provision of Article 49,
paragraph (2) have already been returned to the Government; and(iii) the total amount paid to the Treasury by the Corporation pursuant to the provisionof Article 59, paragraph (4) has already reached the total amount of thegovernment bonds redeemed pursuant to the provision of Article 49, paragraph (2).
(2) When the competent ministers have ordered a report pursuant to the provision of thepreceding paragraph, they may give public notice of said report.
(3) If the certified operator ceases to be a nuclear operator during the special period
pursuant to said certification, it shall be deemed to be a nuclear operator continuously
during the special period, and the provisions of this Chapter (including penal provisions
pursuant to these provisions) shall apply to that operator.

Sub-section 3. Government aid for Special Financial Assistance Granting of government bonds
Article 48. The Government may issue government bonds in order to use them tosecure the funds necessary for the Corporation to give Granting of Funds pertaining to
the Special Financial Assistance.
(2) The Government shall issue government bonds within the amount prescribed by thebudget, and shall grant the bonds to the Corporation pursuant to the provision of thepreceding paragraph.
(3) Bonds issued pursuant to the provision of paragraph (1) shall be free of interest.
(4) Bonds issued pursuant to the provision of paragraph (1) shall not be subject totransfer, attachment or any other dispositions.
(5) In addition to the provisions of the preceding three paragraphs, the necessary mattersconcerning government bonds issued pursuant to the provision of paragraph (1) shall be
specified by an Ordinance of the Ministry of Finance.

 Redemption of government bonds, etc.
Article 49. The Corporation may request the redemption of government bonds issued
pursuant to the provision of paragraph (2) of the preceding Article up to the amountnecessary to give Granting of Funds pertaining to the Special Financial Assistance.
(2) When the Government has been requested by the Corporation to redeem all or part of
the amount of the government bonds granted pursuant to the provision of paragraph (2)of the preceding Article, it shall redeem them promptly.
(3) For the purpose of clarifying accounting of measures concerning financial measures inorder to ensure prompt and appropriate implementation of the compensation for nuclear
damage implemented pursuant to the provisions of this Act, the redemption pursuant to
the provision of the preceding paragraph shall be settled in the account established in the
Energy Policy Special Account.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(4) The defrayment of the account prescribed in the preceding paragraph shall be carriedout smoothly using the establishment of special funds, the appropriate receipt or paymentof these funds, and any other necessary measures to secure funds of the account.
(5) In addition to what is listed in the preceding paragraphs, the necessary mattersconcerning the redemption of the government bonds granted by the Government
pursuant to the provision of paragraph (2) of the preceding Article shall be specified by an
Ordinance of the Ministry of Finance.

 Return of government bonds, etc.
Article 50. In the case where there are government bonds that have not beenredeemed among the ones granted pursuant to the provision of Article 48, paragraph (2),in light of the progress of compensation for damage performed by said certified operator
and of implementation of the Special Financial Assistance, when the Corporation finds it
unnecessary to request a new redemption of government bonds pursuant to theprovision of paragraph (1) of the preceding Article in order to give Granting of Funds
pertaining to the Special Finance Assistance to the certified operator, the Corporation
shall return the government bonds not redeemed to the Government.
(2) When the government bonds have been returned pursuant to the provision of thepreceding paragraph, it shall immediately cancel them.
(3) In addition to the provisions of the preceding two paragraphs, the necessary mattersconcerning return and cancellation of the government bonds granted by the Government
pursuant to the provision of Article 48, paragraph (2) shall be specified by an Ordinance ofthe Ministry of Finance.

 Granting of Funds
Article 51. In the case where the Corporation gives Granting of Funds pursuant to theSpecial Financial Assistance, only when the government finds that the funds pertaining to
the Granting of Funds are likely to be insufficient even after granting the Government bonds,
it may grant necessary additional funds to the Corporation within the amount prescribed by
the budget in order to secure the funds necessary to give said Granting of Funds.

Sub-section 4. Special provisions on amount of contribution
Article 52. Notwithstanding the provision of Article 39, paragraph (1), the amount ofcontribution to be paid by a certified operator for the business year of the Corporation, allor part of which falls within the special period pertaining to said certification, shall be an
amount equivalent to the amount obtained by adding the amount of a special contribution(meaning an amount to be specified for each business year by the Corporation after
obtaining a resolution of the Management Committee as a reasonable amount to be borne
additionally by the certified operator; hereinafter the same shall apply in this Article) to theamount calculated pursuant to the provision of the same paragraph.
(2) In light of the condition of income and expenditure of a certified operator, the amountof special contribution shall be specified within a limit that does not obstruct the smoothmanagement of business activities of the reactor operation, etc. such as a stable supply ofelectricity and any other operations, as an amount that requires a certified operator tobear as much as possible its burden in accordance with the criteria specified by an
Ordinance of the competent ministries.
(3) When the Corporation intends to specify an amount of the special contribution or tomodify this, it shall obtain the authorisation of the competent ministers.
(4) When the competent ministers intend to give the authorisation set forth in thepreceding paragraph, they shall, in advance, consult with the Ministry of Finance.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(5) When the Corporation receives the authorisation set forth in paragraph (3), it shall,
without delay, notify the amount of the special contribution pertaining to said authorisation.

Section 4. Consultation and other businesses for smooth implementation ofcompensation for damage

 Consultation and information provision, etc.
Article 53. In the case where the Corporation has provided Financial Assistance to anuclear operator, it shall conduct consultation, provide necessary information and give
advice to persons who suffer nuclear damage pertaining to said nuclear operator. In thiscase, the Corporation may entrust these businesses to a third party.

 Purchase of assets
Article 54. Based on an application from the nuclear operator that received Financial
Assistance, the Corporation may purchase assets held by said nuclear operator in order
to contribute to securing the funds to be allocated to the performance of compensation
for nuclear damage pertaining to the Financial Assistance.
(2) In the case where the Corporation receives an application of purchase of assets set
forth in the preceding paragraph, the Corporation shall, without delay, after a resolutionof the Management Committee, decide whether to purchase said assets.
(3) The provisions of Article 42, paragraphs (2) and (3) apply mutatis mutandis to thedecision pursuant to the preceding paragraph.

 Payment of compensation for nuclear damage by the Corporation, etc.
Article 55. Upon entrustment by the nuclear operator that received Financial
Assistance, the Corporation may pay all or part of the compensation for nuclear damage
on behalf of said nuclear operator.
(2) When the Corporation finds it necessary in order to proceed with a payment pursuant
to the preceding paragraph, it may inquire with, or request the co-operation of, relevant
persons such as government agencies or public entities.
(3) Pursuant to the provisions of the Act on Emergency Measures Related to Damage
Caused by the 2011 Nuclear Accident (Act No. 91 of 2011), upon entrustment by thecompetent ministers pursuant to the provision of Article 15 of the same Act or by aprefectural governor who conducts part of the affairs concerning making temporary
payment on behalf of the nuclear operator pursuant to Article 8, paragraph (1) of thesame Act, the Corporation may conduct part of the affairs (excluding affairs concerning
decision of expenditure and granting based on the Accounting Act (Act No. 35 of 1947))
concerning making temporary payment on behalf of the nuclear operator pursuant to theprovision of Article 3, paragraph(1) of the same Act.

Chapter VI. Finance and accounting Business year
Article 56. The business year of the Corporation shall begin on 1 April and end on
31 March of the following year.

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 Authorisation of budget, etc.
Article 57. The Corporation shall, every business year, prepare the budget andfinancial plan and obtain the authorisation of the competent ministers before the start ofthat business year. The same shall apply when the Corporation intends to modify these.
(2) When the competent ministers intend to give the authorisation set forth in thepreceding paragraph, they shall, in advance, consult with the Ministry of Finance.

 Financial statements, etc.
Article 58. The Corporation shall, every business year, prepare a balance sheet, aprofit and loss statement, documents concerning the disposal of profit and losses, andany other documents specified by an Ordinance of the competent ministries, andannexed detailed statements thereto (“Financial Statements”), shall submit them to thecompetent ministers within three months after the end of that business year, and shallobtain their approval.
(2) When the Corporation submits the Financial Statements to the competent ministers
pursuant to the provision of the preceding paragraph, it shall attach a business reportand a statement of accounts according to the budget classifications for that business
year, and the written opinion of the auditor concerning the Financial Statements and thestatement of accounts to the Financial Statements.
(3) When the Corporation receives the approval of the competent ministers pursuant to
the provision of paragraph (1), it shall, without delay, give public notice of the Financial
Statement in the Official Gazette, and shall keep copies of business reports, annexed
detailed statement, and the written opinion of the auditor as well as the Financial
Statements at each office, and provide these for public inspection for a period of time
specified by an Ordinance of the competent ministries.
(4) The Corporation shall manage the figures pertaining to the contributions for eachnuclear operator.

 Treatment of profits and losses
Article 59. When the profit has accrued based on the profit and loss calculation, theCorporation shall, every business year, offset the loss carried over from the previous
business year, and then when there is any surplus even after offsetting the loss, theCorporation shall keep the amount of this reserve as reserve funds.
(2) When the loss has accrued based on the profit and loss calculation, the Corporation
shall, every business year, settle this by reducing the reserve funds pursuant to theprovision of the preceding paragraph (1), and when there is any shortage after reducing thereserve, the Corporation shall book the amount of this shortage as a loss carried forward.
(3) The Corporation may, up to the limit of the amount specified by the budget, allocate
the reserve funds pursuant to the provision of paragraph (1) to the expenses necessary
for the businesses listed in Article 35, items (ii) and (iii).
(4) In the case where the Corporation has given Granting of Funds pertaining to theSpecial Financial Assistance, when there is any reserve pursuant to the provision ofparagraph (1), the Corporation shall, every business year, pay to the Treasury up to thelimit of the amount obtained by deducting the amount that has already been paid to theTreasury pursuant to the provision of this paragraph from the total amount of thegovernment bonds that has been already redeemed pursuant to the provision of the
Article 49, paragraph (2). In this case, the term “when there is any reserve” shall bedeemed to be replaced with “when there is any reserve in the case where there is any

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reserve even after deducting the amount that shall be paid to the Treasury pursuant to
the provision of paragraph (4)”.
(5) Concerning the payment pursuant to the provision of the preceding paragraph, theprocedures of payment and any other necessary matters shall be specified by a Cabinet
Order.

 Borrowing and Nuclear Damage Compensation Facilitation Corporation bonds
Article 60. The Corporation may, with the authorisation of the competent ministers,
borrow funds (including refinancing) from financial institutions and any other persons, orissue Nuclear Damage Compensation Facilitation Corporation bonds (“Corporation
bonds”) (including issued for refinancing Corporation bonds). In this case, theCorporation may issue debenture certificates of Corporation bonds.
(2) When the competent ministers intend to give the authorisation set forth in thepreceding paragraph, they shall, in advance, consult with the Ministry of Finance.
(3) The total amount of the current amount of the borrowings pursuant to the provisionof paragraph (1) and the current amount of the obligations pertaining to the principal of
Corporation bonds issued pursuant to the provision of the same paragraph shall not
exceed the amount specified by a Cabinet Order.
(4) The creditors of Corporation bonds pursuant to the provision of paragraph (1) shall havethe right to receive payment ahead of other creditors concerning the property of the
Corporation.
(5) The statutory lien set forth in the preceding paragraph shall be ranked next in priority
to the general statutory lien pursuant to the Civil Code (Act No. 89 of 1896).
(6) The Corporation may, with the authorisation of the competent ministers, entrust all orpart of affairs concerning the issuance of Corporation bonds to banks or trust companies.
(7) The provisions of Article 705, paragraph (1), Article 705, paragraph (2) and Article 709 of theCompanies Act (Act No. 86 of 2005) apply mutatis mutandis to a bank or a trust company thathas received an entrustment pursuant to the provision of the preceding paragraph.
(8) In addition to the provisions of paragraphs (1) and (2), and from paragraphs (4) to (7), any
necessary matters concerning the Corporation bonds shall be specified by a Cabinet Order.

 Government guarantee
Article 61. Notwithstanding the provision of Article 3 of the Act on Limitations ofGovernment Financial Assistance to Juridical Persons (Act No. 24 of 1946), thegovernment may guarantee obligations pertaining to the Corporation’s borrowing set
forth in paragraph (1) of the preceding Article or Corporation bonds within the amountapproved by a Diet resolution.

 Investment of surplus funds
Article 62. The Corporation shall not invest surplus funds occurring in the course ofbusiness other than by the following methods:(i)retention of the State bonds or any other securities designated by the competent
ministers;(ii)

deposit in financial institutions designated by the competent ministers; or(iii) any other method specified by an Ordinance of the competent ministries.

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 Delegation to Ordinance of ministries
Article 63. In addition to the provisions of this Act, any necessary matters related to
the Corporation’s finances and accounting shall be specified by an Ordinance of thecompetent ministries.

Chapter VII. Supervision

 Supervision
Article 64. The Corporation shall be supervised by the competent ministers.
(2) When the competent ministers find it necessary for the enforcement of this Act, they
may issue orders necessary for supervision to the Corporation.

 Report and inspections
Article 65. When the competent ministers find it necessary for the enforcement of
this Act, they may order the Corporation to submit a report concerning its business, or
may have his/her officials enter the Corporation’s offices to inspect its books, documents
or any other objects.
(2) A person who enters and inspects pursuant to the provision of the preceding paragraphshall carry a certificate for identification, and show it to the persons concerned.
(3) The authority concerning the on-site inspection pursuant to paragraph (1) shall not be
construed as the one authorised for criminal investigation.

Chapter VIII. Miscellaneous provisions

 Amendment to the articles of incorporation
Article 66. An amendment to the articles of incorporation shall not come into effectwithout the authorisation of the competent ministers.

 Dissolution
Article 67. In the case of dissolution, when there are residual assets after the
Corporation has performed its obligations, it shall distribute them to each of the capitalsubscribers within the limit of the amount of their capital subscription.
(2) In addition to what is specified in the provision of the preceding paragraph, mattersconcerning dissolution of the Corporation shall be specified separately by an Act.

 Granting of Funds by the Government
Article 68. In light of the occurrence of a significantly large amount of nuclear damage
or any other circumstances, only when the Government finds that if it specifies theamount of contributions that shall be sufficient enough to implement the Corporation’s
business properly and certainly, this leads to specifying an excessive amount ofcontributions that obstructs the smooth management of business activities of the reactor
operation, etc. such as stable supply of electricity and any other operations, or imposes
extreme burden on the users of the business, and hence posing the risk of causing
unexpected disruption in the lives of the citizenry and the national economy, theGovernment may grant necessary funds to the Corporation.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION Special provisions for Corporation tax
Article 69. When a nuclear operator pays a contribution to be allocated to the expenses
necessary for the Corporation’s business for the Corporation’s business year based on theprovisions of Article 38, the amount of this contribution shall be included in the amount of
deductible expenses in the calculation of the amount of income of the nuclear operator’sbusiness year [meaning a business year as defined in Articles 13 and 14 of the Corporation
Tax Act (Act No. 34 of 1965); the same shall apply in the following paragraph] to which thelast day of the said Corporation’s business year belongs or corporation’s consolidated
income [meaning a corporation’s consolidated income as defined in Article 2, item (xviii-iv)
of the same Act; hereinafter the same shall apply in the following paragraph] of theconsolidated business year (consolidated business year as defined in Article 15-2 of thesame Act; hereinafter the same shall apply in the following paragraph).
(2) When a nuclear operator has received the certification set forth in Article 45,
paragraph (1), concerning the amount of income from the Special Financial Assistance(limited to the measure listed in Article 41, paragraph (1), item (1)), the amount of funds
granted by the Corporation shall be included in the amount of gross profit whencalculating the amount of income of the business year to which belongs the date of the
granting or the corporation’s consolidated income of the consolidated business year.
(3) The necessary matters for the application of the provisions of the preceding two
paragraphs shall be specified by a Cabinet Order.

 Special provision for registration and license tax
Article 70. In the case where the Corporation purchases the assets from the certified
operator that has received Granting of Funds pertaining to the Special Financial Assistancepursuant to the provision of Article 54, paragraph (1), the registration of transfer of rights
on the real estate associated with the purchase of assets shall not be subject to theregistration and license tax, as long as such registration is made within three months fromthe purchase pursuant to the provisions of the Ordinance of the Ministry of Finance.

 Delegation to Ordinances of competent ministries
Article 71. In addition to what is specified in this Act, any necessary matters for theenforcement of this Act shall be specified by Ordinances of the competent ministries.

 Competent ministers and Ordinances of the competent ministries
Article 72. The competent ministers and Ordinances of the competent ministries ofthis Act shall be specified by a Cabinet order.

Chapter IX. Penal provisions
Article 73. Any person who has leaked secrets learned in the course of his/her duties
in violation of Article 21 (including the case where it is applied mutatis mutandis pursuant
to Article 34) shall be punished by imprisonment with work for a period not exceeding ayear or by a fine not exceeding five hundred thousand yen.
Article 74. Any person who has failed to make a report pursuant to the provision of
Article 47, paragraph (1), or have made a false report shall be punished by a fine notexceeding five hundred thousand yen.
Article 75. When falling under any of the following items, the Corporation’s officers or
employees shall be punished by a fine not exceeding five hundred thousand yen:

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(i)when he/she has failed to make a report pursuant to the provisions of Article 42,paragraph (2) [including the case where it is applied mutatis mutandis pursuant to
Article 43, paragraph (4) and Article 54, paragraph (3)], or has made a false report; or(ii)when he/she has failed to make a report pursuant to Article 65, paragraph (1) or
having made a false report, or has refused, obstructed, or avoided the inspection
pursuant to the provisions.

Article 76. Any person who has failed to make a report or to submit materials, or has
made a false report or has submitted a false material shall be punished by a fine notexceeding three hundred thousand yen.
Article 77. When a representative person of a juridical person, or an agent, employee
or other worker of a juridical person or individual, has engaged in illegal conduct set forthin Article 74 or the preceding Article with regard to the business of said juridical person
or individual, not only the offender shall be punished but also said juridical person orindividual shall be punished by the punishment prescribed in the same Article.
Article 78. When falling under any of the following items, the Corporation’s officer
who has committed the violation shall be punished by a fine not exceeding two hundred
thousand yen:(i)when he/she has not received the authorisation or approval of the competent
ministers in the case where he/she shall receive said authorisation or approval;(ii)

when he/she has failed to complete his/her registration in violation of a Cabinet
Order pursuant to the provision of Article 7, paragraph (1);(iii) when he/she has engaged in a business other than the business prescribed in
Article 35;(iv) when he/she has failed to make a report or has made a false report in violation of
the provision of Article 38, paragraph (3);(v)

when he/she has violated an order of the competent minister pursuant to theprovisions of Article 38, paragraph (7), Article 42, paragraph (3) [including the casewhere it is applied mutatis mutandis pursuant to Article 43, paragraph (4) and
Article 54, paragraph (3)] or Article 64, paragraph (2);(vi) when he/she has, in violation of Article 58, paragraph (3), failed to keep documents
or has failed to provide them for public inspection; or(vii) when he/she has invested surplus funds in the course of business in violation of theprovision of Article 62.

Supplementary provisions (Act No. 94 of 2011) (extract) Effective date
Article 1. This Act shall come into effect as from the day of promulgation; provided,
however, that the provision of Article 55, paragraph (3) shall come into effect as from theeffective date of the Act on Emergency Measures related to Damage caused by the 2011
Nuclear Accident or the effective date of this Act, whichever comes later.

 Transitional measures
Article 2. The provision of Article 6, paragraph (2) shall not apply, for a period of six
months counting from the effective date, to a person who uses the term “Genshiryoku
Songai Baisho Shien Kikou” (translator’s note: Nuclear Damage Compensation Facilitation
Corporation) in its name at the time when this Act comes into effect.

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Article 3. The provisions of Article 41 shall also apply to nuclear damage that occurredprior to the enforcement of this Act.
(2) A nuclear operator that applies to the Corporation for Financial Assistance related tonuclear damage that occurred prior to the enforcement of this Act shall rationalise its
management and clarify its management responsibility thoroughly, and also request thenecessary co-operation from its shareholders and any other relevant persons in order toimplement prompt and appropriate compensation for the nuclear damage.
Article 4. The business year of the Corporation shall, notwithstanding the provision of
Article 56, begin on the date of its establishment and end on the first 31 March thereafter.
Article 5. With regard to the budget and financial plans for the first business year of the
Corporation, “before the start of that business year” in Article 57, paragraph (1) shall bedeemed to be replaced with “without delay after the establishment of the Corporation”.

 Review
Article 6. As soon as possible after the enforcement of this Act, on the basis ofverification of the causes of the nuclear power plant accident that occurred on 11 March2011 following the 2011 off the Pacific coast of Tohoku Earthquake (“the 2011 nuclear
accident”), the progress of compensation for nuclear damage pertaining to the 2011
nuclear accident, and economic and financial situations, etc., the government shallreview the responsibility of the State pertaining to the compensation of nuclear damage
and the involvement, as well as the responsibility of the State pertaining to therestoration from the nuclear power plant accident with a view toward clarifying theseissues, and shall also review the establishment of an organisation for prompt andappropriate resolution of disputes pertaining to compensation for nuclear damage, andshall take necessary measures including fundamental review of amending theCompensation Act, etc. based on the result of these reviews.
(2) At an early date after the enforcement of this Act, on the basis of verification of thecauses of the 2011 nuclear accident, the progress situation of compensation for nuclear
damage pertaining to the 2011 nuclear accident, and economic and financial situations,etc., the government shall review the status of enforcement of this Act including theburden on the nuclear operator receiving the Financial Assistance pertaining to the 2011
nuclear accident, the government and other nuclear operators, and the burden on
shareholders and any other relevant persons of said nuclear operator, etc., from theviewpoint of minimising burden on citizens, and shall take necessary measures based on
the result of this review.
(3) From the viewpoint of contributing to the improvement of the stability of the citizens’
lives and to the sound development of the national economy, the government shallreview the responsibility of the State for the nuclear energy policy, etc. based on thereview of the policy on energy including improving systems pertaining to electricity
supply, and shall take necessary measures including fundamental review of Acts
concerning nuclear energy based on the result of this review.

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Order for Enforcement of the Nuclear Damage Compensation
Facilitation Corporation Act(Cabinet Order No. 257 of 2011)

The Cabinet enacts this Cabinet Order based on the provisions of Article 7, paragraph (1),Article 13, paragraph (1), Article 38, paragraph (1), item (ii), Article 59, paragraph (5),Article 60, paragraphs (3) and (8), Article 69, paragraph (3), and Article 72 of the Nuclear
Damage Compensation Facilitation Corporation Act (Act No. 94 of 2011).

 Commercial reprocessing facilities
Article 1. The matters specified by the Cabinet Order as prescribed in Article 38,
paragraph (1), item (ii) of the Nuclear Damage Compensation Facilitation Corporation Act(hereinafter the “Act”) shall be reprocessing facilities [meaning the reprocessing facilitiesprescribed in Section 44, paragraph 2, item (ii) of the Act for the Regulation of Nuclear
Source Material, Nuclear Fuel and Reactors (Act No. 166 of 1957); hereinafter referred to as“Nuclear Reactor, etc. Regulation Act” in this Article] that operate reprocessing (meaning
the reprocessing prescribed in Section 2, paragraph 8 of the Nuclear Reactor, etc.
Regulation Act) of nuclear fuel material [meaning the nuclear fuel material prescribed in
Section 3, item (ii) of the Basic Atomic Energy Act (Act No. 186 of 1955)] used as fuel incommercial power reactors [meaning the commercial power reactors prescribed in
Article 23, paragraph (1), item (i) of the Nuclear Reactor, etc. Regulation Act] that are used
for other than providing research and test.

 Procedure of payment to treasury
Article 2. When the Nuclear Damage Compensation Facilitation Corporation (the“Corporation”) makes the payment pursuant to the provision of Article 59, paragraph (4) of
the Act, it shall make said payment to the Treasury by 31 July of the following business year.
(2) When the Corporation makes the payment pursuant to the provision of Article 59,
paragraph (4) of the Act, it shall attach a balance sheet at the end of said business year, aprofit and loss statement for said business year and any other documents specified by an
Ordinance of the competent ministries in addition to the financial statements of the amountto be paid to the Treasury calculated based on the provision in the same paragraph, andshall submit these to the competent ministers by 21 July of the following business year.

 Account to which payment attributes
Article 3. The payment pursuant to the provision of Article 59, paragraph (4) of the Act
attributes to the Nuclear Damage Compensation Facilitation Account of the Energy Policy
Special Account.

 Limits on borrowings and issuance of Nuclear Damage Compensation Facilitation
Corporation bonds
Article 4. The amount specified by the Cabinet Order prescribed in Article 60,
paragraph (3) of the Act shall be two trillion yen.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION Debenture certificates of Nuclear Damage Compensation Facilitation Corporation bonds
Article 5. When the Corporation issues the Nuclear Damage Compensation Facilitation Corporation bonds (“Corporation bonds”) prescribed in Article 60, paragraph (1) of
the Act, it shall issue debenture certificates of the Corporation bonds except in the casewhere the provisions of the Act on Book-entry Transfer of Company Bonds, Shares, etc.
(Act No. 75 of 2001; referred to as “Company Bonds, etc. Transfer Act” in Article 8,paragraph (1), item (vi) and paragraph (2), item (iii)) apply to said Corporation bonds.
(2) The debenture certificates of the Corporation bonds set forth in the preceding
paragraph shall be bearer bonds cum coupon.

 Method of issuing Corporation bonds
Article 6. The Corporation bonds shall be issued through the method of solicitation.

 Determination of matters concerning Corporation bonds for subscription
Article 7. Whenever the Corporation intends to solicit persons who subscribe for the
Corporation bonds that it issues, it shall determine the following matters with respect to
the Corporation bonds for subscription (meaning the Corporation bonds that will beallocated to persons who have subscribed for said Corporation bonds in response to said
solicitation; the same shall apply hereinafter):(i)the total amount of the Corporation bonds for subscription;(ii)

the amount of each of the Corporation bonds for subscription;(iii) interest rate for the Corporation bonds for subscription;(iv) the method and deadline of redemption of the Corporation bonds for subscription;(v)

the method and deadline of interest payment;(vi) when debenture certificates of the Corporation bonds are to be issued, astatement to that effect;(vii) the amount to be paid in for each of the Corporation bonds for subscription(meaning the amount of money to be paid in exchange for each of the Corporation
bonds for subscription; the same shall apply in Article 13, paragraph (2), item (iii));(viii) due date for a payment of the money in exchange for the Corporation bonds forsubscription;(ix) when it is to be arranged that the Corporation bonds for subscription shall not be
issued in their entirety unless the persons to whom the Corporation bonds forsubscription will be allocated are not prescribed for the total amount of the
Corporation bonds by a certain date, a statement to that effect and that certain
date; and(x)

in addition to what is listed in the preceding items, matters specified by an
Ordinance of the competent ministries.

 Offer of subscription for Corporation bonds
Article 8. The Corporation shall notify the following matters to the persons who
intend to subscribe for the Corporation bonds for subscription in response to solicitation
set forth in the preceding Article:

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(i)

name of the Corporation bonds for subscription;(ii)

matters listed in the items of the preceding Article pertaining to said solicitation;

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(iii) when debenture certificates of the Corporation bonds are to be issued, a statementthat they are bearer bonds;(iv) measures for the case where the amount of the Corporation bonds for subscription
for which have been offered to subscribe exceeds the total amount of the
Corporation bonds for subscription;(v)

if a person is entrusted with the solicitation or administration, his/her tradename or name;(vi) when the provisions of the Company Bonds, etc. Transfer Act are applicable, astatement to that effect and the trade name of the Institution for Book-entry
Transfer (meaning the Institution for Book-entry Transfer prescribed in Article 2,paragraph (2) of the Company Bonds, etc. Transfer Act); and(vii) in addition to what is listed in the preceding items, matters specified by an
Ordinance of the competent ministries.
(2) A person who offers to subscribe for the Corporation bonds in response to thesolicitation set forth in the preceding Article shall submit to the Corporation a document
specifying the following matters:(i)name and address of the person who makes an offer;(ii)

the total par value of the Corporation bonds for which he/she intends to subscribe
and the number of bonds by par value; and(iii) for persons who intend to respond to solicitation of the Corporation bonds to which
the provisions of the Company Bonds, etc. Transfer Act apply (such bonds arereferred to as “transfer Corporation bonds” in Article 10, paragraph (2)), an accountopened for their own benefit in order to conduct transfer of said Corporation bonds.
(3) A person who makes an offer set forth in the preceding paragraph may, in lieu ofsubmitting the document prescribed in the same paragraph, and pursuant to theprovisions of an Ordinance of the competent ministries, provide the matters to be
indicated in such document by electromagnetic means (meaning any of the methods
using an electronic data processing system or any other information and communication
technology specified by an Ordinance of the competent ministries) with consent of the
Corporation. In this case, the person who has made the offer shall be deemed to havesubmitted the document prescribed in the same paragraph.
(4) The Corporation shall immediately notify a person who has made an offer set forth inparagraph (2) (“Offeror”) of any change in the matters listed in the items of paragraph (1)and the matter affected by the change.
(5) It shall be sufficient for a notice or demand to an Offeror to be sent by the Corporation
to the address set forth in paragraph (2) item (i) (or to any other place or contact address
notified by the Offeror to the Corporation for the receipt of notices or demands).
(6) The notice or demand in the preceding paragraph shall be deemed to have arrived at
the time when said notice or demand should normally have arrived.

 Allocation of Corporation bonds for subscription
Article 9. The Corporation shall select from among the Offerors the persons to receive
an allocation of the Corporation bonds for subscription, and shall determine the parvalue and the number of the Corporation bonds for subscription. In this case, theCorporation may reduce the number of each value of the Corporation bonds forsubscription to be allocated to such persons. In this case, the Corporation may reduce thenumber of the Corporation bonds for subscription to be allocated to each Offeror for eachname from the number prescribed in paragraph (2) item (ii) of the preceding Article.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(2) The Corporation shall notify the Offeror, no later than the day immediately preceding
the date set forth in Article 7, item (viii) of the par value and the number by the name of
the Corporation bonds for subscription that will be allocated to each Offeror.

 Special provisions regarding applications for and the allocation of subscription
Corporation bonds
Article 10. In the case where a local government subscribes for the Corporation bonds
for subscription or a person who has been entrusted with the solicitation of the
Corporation bonds for subscription subscribes for the Corporation bonds for subscription
by themselves, the provisions of the preceding two Articles shall not apply to such bonds.
(2) In the case of the preceding paragraph, the local government that subscribes for thetransfer Corporation bonds or a person who has been entrusted with the solicitation of
the transfer Corporation bonds shall show to the Corporation the matters listed in Article
8, paragraph (2), item (iii) at the time of such subscription.

 Right holder of Corporation bonds for subscription
Article 11. Any person listed in the following items shall become right holder to the
Corporation bonds for subscription specified in said items:(i)Offerors: the Corporation bonds for subscription allocated by the Corporation;(ii)

local governments that subscribe for the Corporation bonds: the Corporation bonds
for which said local governments subscribe; or(iii) a person who has been entrusted with the solicitation of the Corporation bonds forsubscription subscribes for the Corporation bonds for subscription by themselves:
the Corporation bonds for which such person subscribes for.

 Issuance of debenture certificates of Corporation bonds
Article 12. After the day on which debenture certificates of the Corporation bonds
with provisions specifying the issuance of debenture certificates of the Corporation
bonds are issued, the Corporation shall, without delay, issue said debenture certificatesof the Corporation bonds.
(2) The Corporation shall state the matters listed in Article 7, items (ii) through (v), andArticle 8, paragraph (1), items (i), (iii) and (v), and the serial number on each debenture
certificate of the Corporation bonds, and the President of the Corporation shall affix
his/her name and seal on them.

 Nuclear Damage Compensation Facilitation Corporation bonds registry
Article 13. The Corporation shall keep the Nuclear Damage Compensation Facilitation
Corporation bonds registry in its main office.
(2) The following matters shall be stated or recorded in the Nuclear Damage
Compensation Facilitation Corporation bonds registry:(i)the matters listed in items (iii) through (vi) and other matters specified by an
Ordinance of the competent ministries (referred to as “class” in the following item)as the matters that specify the features of the Corporation bonds;(ii)

for each class, the total amount of the Corporation bonds and the amount of each of
the Corporation bonds;(iii) the amount to be paid in for each of the Corporation bonds and the day of thepayment in;

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(iv) when debenture certificates of the Corporation bonds are issued, the serial numberof debenture certificates of the Corporation bonds, the days of issue and the numberof the debenture certificates of the Corporation bonds;(v)

matters listed in Article 8, paragraph (1), items (i), (v) and (vi);(vi) matters in relation to a payment of principal and interest; and(vii) in addition to what is listed in the preceding items, matters specified by an
Ordinance of the competent ministries.

 Assignment of Corporation bonds with issued debenture certificates ofCorporation bonds
Article 14. Assignment of the Corporation bonds for which there is provision to the effectthat debenture certificates of the Corporation bonds shall be issued shall not become
effective unless the debenture certificates pertaining to said Corporation bonds are delivered.

 Presumption of rights, etc.
Article 15. A possessor of debenture certificates of the Corporation bonds shall be
presumed to be the lawful owner of the right in relation to the Corporation bonds
pertaining to said debenture certificates.
(2) A person who takes the delivery of debenture certificates of the Corporation bonds
shall acquire the rights in relation to the Corporation bonds pertaining to said
certificates; provided, however, that this shall not apply if that person has knowledge oris grossly negligent.

 Pledge of Corporation bonds with issued debenture certificates of Corporation bonds
Article 16. Pledges of debenture certificates of the Corporation bonds for which there
is provision to the effect that debenture certificates of the Corporation bonds shall be
issued, shall not become effective, unless the debenture certificates pertaining to said
Corporation bonds are delivered.

 Perfection of pledge of Corporation bonds
Article 17. Pledge of the Corporation bonds cannot be asserted against the
Corporation and any other third parties unless he/she is in continuous possession of thedebenture certificates pertaining to said Corporation bonds.

 Loss of debenture certificates of Corporation bonds
Article 18. Debenture certificates of the Corporation bonds may be invalidated
pursuant to the public notification procedures under Article 142 of the Non Contentious
Cases Procedures Act (Act No. 14 of 1898).
(2) A person who has lost debenture certificates of the Corporation bonds may not request
the reissuing of his/her debenture certificates until after he/she obtains the invalidationprescribed in Article 148, paragraph (1) of the Non Contentious Cases Procedures Act.

 Redemption of Corporation bonds where coupons missing
Article 19. In the case where the Corporation redeems the Corporation bonds forwhich a debenture certificate is issued before it matures, when a coupon attached to the
Corporation bond is missing, the Corporation shall deduct the amount of the claim forinterest on the Corporation bond indicated on such coupon from the redemption amount;provided, however, that this shall not apply if such claim has fallen due.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(2) The possessor of the coupon in the preceding paragraph may demand at any time that
the Corporation pays the amount that shall be deducted pursuant to the provision of thesame paragraph in exchange for the coupon.

 Extinctive prescription of right to claim redemption of Corporation bonds
Article 20. The right to claim the redemption of the Corporation bonds shall be
extinguished by prescription if not exercised for ten years.
(2) The right to claim interest on the Corporation bonds and the right to claim pursuant to
the provision of paragraph (2) of the preceding Article shall be extinguished byprescription if not exercised for five years.

 Authorisation for issuing Corporation bonds
Article 21. When the Corporation intends to obtain authorisation for issuing the
Corporation bonds pursuant to the provision of Article 60, paragraph (1) of the Act, it
shall submit a written application containing the following matters to the competent
ministers 20 days prior to the day of the solicitation of the Corporation bonds:(i)reason for the necessity of issuance of the Corporation bonds;(ii)

matters listed in Article 7, items (i) through (v) and (vii), and Article 8, paragraph (1),items (i), (v) and (vi);(iii) method of solicitation of the Corporation bonds;(iv) estimated amount of expenses necessary for issuance of the Corporation bonds; and(v)

in addition to what is listed in the preceding items, matters that are to be stated on
the debenture certificates of the Corporation bonds.

(2) The following documents shall be attached to the written application set forth in thepreceding paragraph:(i)a document containing the matters listed in each item of Article 8, paragraph (1);(ii)

a document containing the use of funds raised by issuing the Corporation bonds;
and(iii) a document containing the prospect of subscription of the Corporation bonds.

 Delegation to Ordinances of competent ministries
Article 22. In addition to the matters specified in Articles 5 through 21, any necessary
matters concerning the Corporation bonds shall be specified by an Ordinance of thecompetent ministries.

 Special provisions for Corporation tax
Article 23. In the case where the provision of Article 69, paragraph (1) or paragraph (2)of the Act applies to the nuclear operator set forth in paragraph (1) or paragraph (2) of thesame Article in the consolidated business year prescribed in paragraph (1) of the same
Article, when calculating the amount of individual income or individual loss prescribed in
Article 81-18, paragraph (1) of the Corporation Tax Act (Act No. 34 of 1965) of said nuclear
operator, the amount included in the calculation of the amount of deductible expenses
pursuant to the provision of Article 69, paragraph (1) of the Act shall be included in theamount of individually attributed deductible expenses prescribed in Article 81-18,
paragraph (1) of the Corporation Tax Act, and the amount included in the calculation of
the amount of gross profit pursuant to the provision of Article 69, paragraph (2) of the Act
shall be included in the amount of individually attributed gross profit prescribed in
Article 81-18, paragraph (1) of the Corporation Tax Act.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION

 Competent ministers and Ordinances of the competent ministries
Article 24. The competent ministers of the Act and this Cabinet Order shall be theministers specified in each of the following items according to the classification ofmatters listed in each said item:(i) matters relating to authorisation pursuant to the provisions of Article 5, paragraph (2), Articles 11, 17 and 19 of the Act, acceptance of opinions pursuant to theprovision of Article 24, paragraph (4) of the Act, appointment pursuant to theprovision of Article 25, paragraph (1) of the Act, authorisation pursuant to theprovision of paragraph (2) of the same Article, dismissal pursuant to the provisionof Article 28 of the Act, approval pursuant to the provision of the proviso to
Article 29 of the Act, supervision pursuant to the provision of Article 64, paragraph(1) of the Act (excluding supervision to enforce the provisions of Chapters V and VI
of the Act), orders pursuant to the provision of paragraph (2) of the same Article(excluding orders to enforce the provisions of Chapters V and VI of the Act),
collection of reports and on-site inspections pursuant to the provision of Article 65,
paragraph (1) of the Act (excluding collection of reports and on-site inspections toenforce the provisions of Chapters V and VI of the Act), and authorisation
pursuant to the provision of Article 66 of the Act: the Prime Minister and theMinister of Education, Culture, Sports, Science and Technology;(ii) matters relating to authorisation pursuant to the provision of Article 36, paragraph (1)of the Act, acceptance of reports pursuant to the provision of Article 38, paragraph (3)of the Act, publication pursuant to the provision of paragraph (4) of the same Article,
authorisation pursuant to the provision of Article 39, paragraph (4) of the Act,
consultation pursuant to the provision of paragraph (5) of the same Article of the Act,orders pursuant to the provision of paragraph (7) of the same Article, acceptance ofreports pursuant to the provision of Article 42, paragraph (2) of the Act (including thecases where it is applied mutatis mutandis in Articles 43, paragraph (4) and 54,
paragraph (3) of the Act), orders pursuant to the provision of Article 42, paragraph (3)of the Act (including cases where it is applied mutatis mutandis in Articles 43,
paragraph (4) and 54, paragraph (3) of the Act), certification pursuant to the provisionof Article 45, paragraph (1) of the Act, consultation pursuant to the provision
paragraph (5) of the same Article (including the cases where it is applied mutatis
mutandis in Article 46, paragraph (4) of the Act), publication pursuant to the provisionof Article 45, paragraph (6) of the Act (including the cases where applied mutatis
mutandis in Article 46, paragraph (4) of the Act), certification pursuant to theprovision of Article 46, paragraph (1) of the Act, announcement, collection of reports
and orders pursuant to the provision of Article 47, paragraph (1) of the Act, publication
pursuant to the provision of Article 47, paragraph (2) of the Act, authorisation
pursuant to the provision of Article 52, paragraph (3) of the Act, consultation pursuant
to the provision of Article 52, paragraph (4) of the Act, supervision pursuant to theprovision of Article 64, paragraph (1) of the Act (limited to the purpose for enforcing
the provisions of Chapter V of the Act), orders pursuant to the provision of paragraph(2) of the same Article (limited to the purpose for enforcing the provisions of
Chapter V of the Act), and collection of reports and on-site inspections pursuant to theprovision of Article 65, paragraph (1) of the Act (limited to the purpose for enforcing
the provisions of Chapter V of the Act): the Prime Minister and the Minister of
Economy, Trade and Industry; or(iii) matters relating to authorisation pursuant to the provision of Article 57, paragraph (1)of the Act, consultation pursuant to the provision of paragraph (2) of the same Article,
approval pursuant to the provision of Article 58, paragraph (1) of the Act,authorisation pursuant to the provision of Article 60, paragraph (1) of the Act,
consultation pursuant to the provision of paragraph (2) of the same Article,
authorisation pursuant to the provision of paragraph (6) of the same Article,
designation pursuant to the provisions of Article 62, item (i) and (ii) of the Act,
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supervision pursuant to the provision of Article 64, paragraph (1) of the Act (limited tothe purpose enforcing the provisions of Chapter VI of the Act), orders pursuant to theprovisions of paragraph (2) of the same Article (limited to the purpose enforcing theprovisions of Chapter VI of the Act), and collection of reports and on-site inspections
pursuant to the provision of Article 65, paragraph (1) of the Act (limited to the purpose
enforcing the provisions of Chapter VI of the Act), and acceptance of calculations
pursuant to the provision of Article 2 paragraph (2) and acceptance of applications
pursuant to the provisions of Article 21, paragraph (1): the Prime Minister, the Ministerof Education, Culture, Sports, Science and Technology, and the Minister of Economy,
Trade and Industry.
(2) The authority of the competent minister prescribed in Article 65, paragraph (1) of the
Act does not prevent each respective competent minister from exercising it individually.
(3) Ordinances of the competent ministries prescribed in the Act and this Cabinet Ordershall be the Ordinance specified in each of the following items according to theclassification of matters listed in each said item:(i)the Ordinance of the competent ministries prescribed in Article 36, paragraph (2),39 paragraphs (2) and (3), Article 41, paragraph (1), item (iv), Article 45, paragraph (2),item (viii), Article 46, paragraph (1) and Article 52, paragraph (2) of the Act, and theOrdinance of the competent ministries prescribed in Article 71 of the Act (limited toprovisions that specifies matters necessary for enforcing the provisions of Chapter Vof the Act, and necessary matters concerning supervision pursuant to the provision of
Article 64, paragraph (1), order pursuant to provision of paragraph (2) of the same
Article of the Act, and collection of reports and on-site inspections pursuant to theprovision of Article 65, paragraph (1) for the purpose of enforcing the provisions of
Chapter V of the Act): an order issued by the Prime Minister and the Minister of
Economy, Trade and Industry;(ii)

the Ordinance prescribed in the competent ministries in Articles 58, paragraphs (1)and (3), Article 62, item (iii) and Article 63 of the Act, and the Ordinance of thecompetent ministries prescribed in Article 71 of the Act (limited to provisions thatspecifies necessary matters concerning supervision pursuant to the provision of
Article 64, paragraph (1), orders pursuant to provision of paragraph (2) of the same
Article of the Act, and collection of reports and on-site inspections pursuant to theprovision of Article 65, paragraph (1) for the purpose of enforcing the provisions of
Chapter V of the Act), and the Ordinance of the competent ministries specified in
Articles 2, paragraph (2), Article 7, item (x), Article 8, paragraph 1, item (vii) andparagraph 3, Article 13, paragraph (2), item (i) and (vii) and Article 22: an orderissued by the Prime Minister, the Minister of Education, Culture, Sports, Scienceand Technology, and the Minister of Economy, Trade and Industry; or(iii) the Ordinance of the competent ministries prescribed in Article 71 of the Act (excluding
provisions listed in the preceding two items): an order issued by the Prime Minister andthe Minister of Education, Culture, Sports, Science and Technology.

Supplementary provisions (extract) (Cabinet Order No. 257 of 2011)

 Effective date
Article 1. This Cabinet Order shall come into effect as from the day of promulgation.

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Ordinance on Organisation of the Nuclear Damage Compensation
Facilitation Corporation(Ordinance No. 1 of 2011 of the Cabinet Office andthe Ministry of Education, Culture, Sports, Science and Technology)

In order to implement the provisions of the Nuclear Damage Compensation Facilitation
Corporation Act, the Ordinance on Organisation of the Nuclear Damage Compensation
Facilitation Corporation shall be enacted as follows.

Definitions
Article 1. The terms used in this Ordinance shall have the same meaning as thoseused in the Nuclear Damage Compensation Facilitation Corporation Act (the “Act”).

Application for authorisation of appointment and dismissal of the Management
Committee members
Article 2. When the President of the Corporation intends to obtain authorisation
pursuant to the provisions of Articles 17 or 19 of the Act, he/she shall submit to thewritten application for an authorisation to the Prime Minister and the Minister of
Education, Culture, Sports, Science and Technology attached to a document containing
the following matters:(i)Name, address and career history of the committee member whom the President
intends to appoint or dismiss.

(ii)

Pledge that the committee member whom the President intends to appoint does not
fall under any of the following persons:(a)a bankrupt who has not obtained a restoration of rights; and(b)a person who was sentenced to imprisonment without work or more severe
punishment and who has not completed the execution of the sentence or towhom the sentence still applies.

(iii) Reason for intending to appoint or dismiss.

Application for authorisation of appointment and dismissal of directors
Article 3. When the President of the Corporation intends to obtain authorisation
pursuant to the provisions of Article 25, paragraph (2) or Article 28, paragraph (2) of theAct, he/she shall submit to the written application for authorisation to the Prime Ministerand the Minister of Education, Culture, Sports, Science and Technology attached to a
document specifying the following matters:(i)Name, address and career history of the Directors for whom appointment or
dismissal is intended.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(ii)

Pledge that the directors for whom appointment is intended do not fall under any of
the following points:(a)he/she falls under Article 27 or Article 29 of the Act; and(b)he/she falls under item (ii) (a) or (b) of the preceding Article.

(iii) Reason for intending to appoint or dismiss.

Application for authorisation of amendment of the articles of incorporation
Article 4. When the Corporation intends to obtain approval pursuant to the provisionsof Article 66 of the Act, it shall submit to the written application for authorisation to thePrime Minister and the Minister of Education, Culture, Sports, Science and Technology
attached to a document containing the following matters:(i)matters intended to be amended and content of said amendment;(ii)

reason for the necessity to amend;(iii) a record of the proceedings of the Management Committee where the amendment
was resolved; and(iv) other matters to be used as a reference.

Personal identification document of inspection personnel
Article 5. A personal identification document carried by personnel who carries out onsite inspection pursuant to the provisions of Article 65, paragraph (1) of the Act shall be
specified by the appended form.

Supplementary provisions
This Ordinance shall come into effect as from the day of its promulgation.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION

Appended form (related to Article 5)
Front

No. _ _
On-site Inspection ID pursuant to Article 65, paragraph (2) of the Nuclear Damage
Compensation Facilitation Corporation Act
Position & Name
Photography
DOB YYYY(Seal with stamp)

Issued

MM

DD

YYYY

Competent Minister

MM

DD

Seal

Back

Extract from the Nuclear Damage Compensation Facilitation Corporation Act
Article 65. When the competent ministers find it necessary for the enforcementof this Act, they may order the Corporation to submit a report concerning its
business, or may have his/her officials enter the Corporation’s offices to inspect its
books, documents or any other objects.
(2) A person who enters and inspects pursuant to the provision of the preceding
paragraph shall carry a certificate for identification, and show it to the persons
concerned.
(3) The authority concerning the on-site inspection pursuant to paragraph (1) shallnot be construed as the one authorised for criminal investigation.
Article 75. When falling under any of the following items, the Corporation’s
officers or employees shall be punished by a fine not exceeding JPY 500 000:(ii)

When he/she has failed to make a report pursuant to Article 65, paragraph (1)or having made a false report, or has refused, obstructed, or avoided theinspection pursuant to the provisions.

(Remarks) The size of the form shall be JIS B7.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION

Ordinance on Operation of the Nuclear Damage Compensation
Facilitation Corporation(Ordinance No. 1 of 2011 of the Cabinet Officeand the Ministry of Economy, Trade and Industry)

Based on the Nuclear Damage Compensation Facilitation Corporation Act (Act No. 94 of2011) and the Order for Enforcement of the Nuclear Damage Compensation Facilitation
Corporation Act (Cabinet Order No. 257 of 2011), and in order to implement the same Act,
the Ordinance on Operation of the Nuclear Damage Compensation Facilitation
Corporation is enacted as follows.

Definitions
Article 1. The terms used in this Ordinance shall have the same meaning as thoseused in the Nuclear Damage Compensation Facilitation Corporation Act (the “Act”).

Application for authorisation of amendment to statement of operational procedures
Article 2. When the Corporation intends to obtain authorisation pursuant to theprovisions of the latter part of Article 36, paragraph (1) of the Act, it shall attach a document
containing the matters listed in the following to application form for authorisation andsubmit them to the Prime Minister and Minister of Economy, Trade and Industry:(i)matters intended to be amended and content of said amendment;(ii)

reason for the necessity to amend; and(iii) other matters to be used as a reference.

Matters listed in statement of operational procedures
Article 3. The matters specified by an ordinance of the competent ministries
prescribed in Article 36, paragraph (2) of the Act, are as follows:(i)matters concerning financial assistance pursuant to the provisions of Chapter V,
Section 3 of the Act and other businesses pursuant to the provisions of the same
Section;(ii)

matters concerning consultation pursuant to the provisions of Chapter V, Section 4of the Act and other businesses pursuant to the same section; and(iii) other methods of business pursuant to the provisions of Article 35 of the Act.

Criteria for setting annual amount of general contribution
Article 4. The criteria specified by an ordinance of the competent ministries,
prescribed in Article 39, paragraph (2) of the Act, shall be as follows:
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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(i)

In light of the long-term forecast of the expenses necessary for the Corporation’s
business, the Corporation shall secure the necessary amount.

(ii)

The amount of the contribution of each nuclear operator, as calculated pursuant to
the provisions of Article 39, paragraph (1) of the Act, shall satisfy the following
criteria from (a) to (b) below:(a)it shall secure the funds necessary for the smooth management of businessactivities of the reactor operation, etc. such as stable supply of electricity by
nuclear operators;(b)

it shall pose no risk of impeding the activities that are found reasonable tothe normal implementation of fund procurement, dividends and any otherfinancial activities of nuclear operators; and(c)it shall not be expected to have any significant impact on the economic
activity, etc. of electricity users; and(iii) It shall be able to be maintained at a certain level in a stable manner.

Criteria for setting contribution rate
Article 5. The criteria specified by an ordinance of the competent ministries,
prescribed in Article 39, paragraph (3) of the Act, shall be as follows:(i)in the light of the scale, contents and other circumstances of business activities
pertaining to the reactor operation, etc., it shall be appropriately set; and(ii)

it shall not be unfairly discriminatory for a certain nuclear operator.

Promissory note
Article 6. The promissory note specified by an ordinance of the competent ministries
prescribed in Article 41, paragraph (1), item (iv) of the Act shall be deemed commercial paper.

Matters, etc., described in the Special Business Plan
Article 7. The matters specified by an ordinance of the competent ministries,
prescribed in Article 45, paragraph (2), item (viii) of the Act, shall be as follows:(i)measures to ensure the smooth operation of business by nuclear operators;(ii)

financial condition of the Corporation; and(iii) matters concerning measures for the appropriate treatment (including measures
to ensure the safety, etc. of persons engaged in said treatment) of thecommercial power reactors or the commercial reprocessing facilities pertaining
to nuclear damage.
(2) Reference materials for the Special Business Plan shall be attached to the Special
Business Plan.

Minor changes
Article 8. The minor changes specified by an ordinance of the competent ministries,
prescribed in Article 46, paragraph (1) of the Act, shall be as follows:

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(i)changes of the trade name or name, location of the head office or principal office, or
the title or name of the representative of the Corporation or nuclear operators that
submit the Certified Special Business Plan;(ii)changes of the type of the Financial Assistance (excluding Granting of Funds;
hereinafter the same shall apply in this item) (limited to the amendments without
increasing the total amount of the Financial Assistance);(iii) changes of the timing of the Financial Assistance (limited to the amendments withina period not exceeding one year);(iv) changes of the amount of the Financial Assistance (limited to the amendment
reducing the amount);(v)

the necessary changes resulting from the changes set forth in each of the preceding
items (limited to changes which do not change the purpose of the CertificatedSpecial Business Plan);(vi) changes of the matters listed in Article 7, paragraph (1), item (2); and(vii) in addition to what is listed in the preceding items, changes which do not change
the purpose of the Certificated Special Business Plan.
Registration of government bonds
Article 9. When the Corporation has received the issuance of government bonds
pursuant to the provisions of Article 48, paragraph (2) of the Act, it shall promptly
demand registration of the government bonds pursuant to the provisions of Article 28 of
the Government Bond Regulations (Ministry of Finance Ordinance No. 31 of 1922).

Criteria for setting Special Contribution
Article 10. The criteria specified by an ordinance of the competent ministries,
prescribed in Article 52, paragraph (2) of the Act, shall be as follows:(i)

it shall secure the funds necessary for the smooth management of businessactivities of the reactor operation, etc. such as stable supply of electricity by thecertified operator; and(ii)

in light of the condition of income and expenditure of a certified operator, it shallrequire the certified operator to bear as much as possible its burden within the limitthat does not impair the financial basis.

Personal identification document of inspection personnel
Article 11. A personal identification document carried by a personnel who carries out
on-site inspection pursuant to the provisions of Article 65, paragraph (1) of the Act shallbe specified by the appended form.

Supplementary provisions
This Ordinance shall come into effect as from the day of promulgation.

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Appended form (related to Article 11)
Front

No. _ _
Inspection ID pursuant to Article 65, paragraph (2) of the Nuclear Damage
Compensation Facilitation Corporation Act
Position & Name
Photograph
DOB YYYY(Seal with stamp)

Issued

MM

DD

YYYY

Competent Minister

MM

DD

Seal

Back

Extract from the Nuclear Damage Compensation Facilitation Corporation Act
Article 65. When the competent ministers find it necessary for the enforcementof this Act, they may order the Corporation to submit a report concerning its
business, or may have his/her officials enter the Corporation’s offices to inspect its
books, documents or any other objects.
(2) A person who enters and inspects pursuant to the provision of the preceding
paragraph shall carry a certificate for identification, and show it to the persons
concerned.
(3) The authority concerning the on-site inspection pursuant to paragraph (1) shallnot be construed as the one authorised for criminal investigation.
Article 75. When falling under any of the following items, the Corporation’s
officers or employees shall be punished by a fine not exceeding JPY 500 000:(ii)

When he/she has failed to make a report pursuant to Article 65, paragraph (1)or having made a false report, or has refused, obstructed, or avoided theinspection pursuant to the provisions.

Remark: the size of the form shall be JIS B7.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION

Ordinance on Financial Affairs and Accounting of the Nuclear
Damage Compensation Facilitation Corporation(Ordinance No. 1 of 2011 of the Cabinet Office, the Ministry of Education, Culture,
Sports, Science and Technology, and the Ministry of Economy, Trade and Industry)

Based on the Nuclear Damage Compensation Facilitation Corporation Act (Act No. 94 of2011) and the Order for Enforcement of the Nuclear Damage Compensation Facilitation
Corporation Act (Cabinet Order No. 257 of 2011), and in order to implement the same Act,
the Ordinance on Financial Affairs and Accounting of the Nuclear Damage Compensation
Facilitation Corporation is enacted as follows.

Definitions
Article 1. The terms used in this Ordinance shall have the same meaning as thoseused in the Nuclear Damage Compensation Facilitation Corporation Act (the “Act”).

Accounting principle
Article 2. In order to clarify the financial condition and management performance of
the Corporation, the Corporation shall carry out accounting of increase or decrease andchange of property, and income and expenditure based on fact that these have accrued.

Establishment of accounts
Article 3. In the accounting of the Corporation, the Corporation shall establish abalance sheet account and a profit and loss account, and if necessary, it shall establish an
account to clarify the process of the calculation.
(2) When the Corporation carries out the accounting set forth in the preceding paragraph,it shall state a received amount of the special contribution, the progress situation of
implementation of the Special Financial Assistance and any other necessary figures inorder to clarify the accounting concerning the Special Financial Assistance.

Contents of budget
Article 4. The budget of the Corporation shall consist of general budget provisions andincome and expenditure budgets.

General budget provisions
Article 5. General budget provisions shall include comprehensive provisions
pertaining to income and expenditure budgets and the provisions pertaining to thefollowing matters:

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(i)with regard to actions to provide for debts pursuant to the provisions of Article 9, anamount of the limit of debts associated with each matter, the term to satisfy thedebts based on said actions, and the reason for necessity;(ii)

designation of expenses pursuant to the provisions of Article 10, paragraph (2); and(iii) in addition to the matters listed in the preceding two items, the necessary mattersconcerning the implementation of the budget.

Income and expenditure budgets
Article 6. Income and expenditure budgets shall be separated according to the natureof the income, and the purpose for the expenditure.

Attached documentation to budget
Article 7. When the Corporation intends to obtain authorisation for the budget
pursuant to the provisions of the first sentence of Article 57, paragraph (1) of the Act, theCorporation shall attach the following documents to the budget and submit them to thePrime Minister, the Minister of Education, Culture, Sports, Science and Technology, andthe Minister of Economy, Trade and Industry:(i)a projected balance sheet and a projected profit and loss statement for the priorbusiness year;(ii)

a projected balance sheet and a projected profit and loss statement for the current
business year; and(iii) in addition to the matters listed in the preceding two items, helpful documents for
said budget.
(2) When the Corporation intends to obtain authorisation to make a change to the budget
pursuant to the provisions of the second sentence of Article 57, paragraph (1) of the Act,
the Corporation shall attach a document listed in items (ii) and (iii) of the preceding
paragraph to a document stating the matters that the Corporation intends to change andthe reason for this, and shall submit these to the Prime Minister, the Minister of
Education, Culture, Sports, Science and Technology, and the Minister of Economy, Tradeand Industry.

Contingency funds
Article 8. The Corporation may provide contingency funds with regard to income andexpenditure budgets in order to compensate for variances in items of an unpredictable
nature in an expenditure budget.

Act to assume debts
Article 9. In addition to debts within the scope of the expenditure budget, theCorporation may, every business year, assume debts within the scope of the amount of
the budget with authorisation of the Prime Minister, the Minister of Education, Culture,
Sports, Science and Technology, and the Minister of Economy, Trade and Industry as
necessary to conduct its business.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATIONDiversion of budgeted funds
Article 10. The Corporation shall not use the funds represented in an expenditurebudget for any purpose other than as specified in said budget; provided, however, that if
it is appropriate and necessary for the implementation of the budget, the budget funds
may be diverted notwithstanding the categories pursuant to the provision of Article 6.
(2) The Corporation shall not divert the amount of expenses designated by general budget
provisions to any other expense of these, or to other non designated expense, or apply
the contingency funds, without obtaining the authorisation of the Prime Minister, theMinister of Education, Culture, Sports, Science and Technology, and the Minister of
Economy, Trade and Industry.
(3) When the Corporation intends to obtain the authorisation set forth in the preceding
paragraph, it shall submit documents clarifying the reason for the diversion, the amount ofdiversion and basis for the estimate to the Prime Minister, the Minister of Education,
Culture, Sports, Science and Technology, and the Minister of Economy, Trade and Industry.

Funding plans
Article 11. The financial plan set forth in Article 57, paragraph (1) of the Act shall
include plan concerning the following matters:(i)sources and methods of raising funds;(ii)

uses of funds; and(iii) other necessary matters.
(2) When the Corporation intends to obtain authorisation for change to the financial planpursuant to the provision of the second sentence of Article 57, paragraph (1) of the Act, it
shall submit a written application stating the matters that the Corporation intends tochange and the reason to the Prime Minister, the Minister of Education, Culture, Sports,
Science and Technology, and the Minister of Economy, Trade and Industry.

Financial statements
Article 12. The documents specified by an ordinance of the competent ministries
prescribed in the provision of Article 58, paragraph (1) of the Act are statement ofchanges in net assets, statement of cash flows and a document concerning thecontributions of each nuclear operator.

Annexed detailed statements
Article 13. The annexed detailed statements set forth in Article 58, paragraph (1) of
the Act shall state the following matters:
(i)

(ii)

matters concerning capital subscription to the Corporation:(a)capital subscribers and detailed statements of the amount of capitalsubscription (including increase or decrease from the end of the previous
business year for each capital subscriber);(b)legal and regulatory grounds; and(c)separate accounting of the State pertaining to the capital subscription of thegovernment;

matters concerning detailed statements of main assets and liabilities:

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(a)detailed statements of long-term borrowings (including lenders and increaseor decrease from the end of the previous business year for each lender);(b)detailed statements of the Corporation bonds (including issues (specifying
when government-guaranteed bonds have been issued) and increase or
decrease from previous business year for each issue);(c)detailed statements of allowances (including increase or decrease from theend of the previous business year for each type of allowance);(d) detailed statements of the amount of capital subscription by the
Corporation; and(e)detailed statements of cash and deposits, accrued income, and other main
assets and liabilities:(iii) acquisition and disposition of fixed assets and detailed statements of depreciation
charges;(iv) detailed statements of shares in affiliated companies (meaning companies in which
the Corporation substantially holds a majority of the voting rights (hereinafter suchcompanies are referred to as "subsidiary" in this item; in the case where the
Corporation and a subsidiary hold or a subsidiary holds a substantial majority of thevoting rights of the another company, the another company shall also deemed a
subsidiary of the Corporation) and companies in which the Corporation (including a
subsidiary in the case where the Corporation has a subsidiary) substantially holds
more than twenty percent and less than fifty percent of the voting rights, and is able
to have a significant influence on the finance and business policies through capitalsubscription, personnel affairs, funds, technology, transactions or any other matters;
the same shall apply hereinafter):(a)name of affiliated companies;(b)amount of per share;(c)number of shares;(d) acquisition price; and(e)(v)

amount credited in the balance sheet (including increase or decrease fromthe end of previous business year);detailed statements of capital subscription to capitalised organisations;(vi) detailed statements of claims and obligations to affiliated companies; and(vii) matters concerning main expenses and profits:

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(a)

detailed statements of subsidies of the State that have been accepted for thebusiness year and the previous business year or any other equivalent
subsidies (hereinafter referred to as “National Subsidies, etc.”; including
name of the National Subsidies, etc. accepted in the business year, separate
accounting of the State, and explanation of the relationship between
National Subsidies, etc. and related subjects in the balance sheet and the
profit and loss statement);(b)

detailed statements of remuneration for the officers and employees;(c)received amount of the special contribution, detailed statements of the
progress of implementation of the Special Financial Assistance and anyother detailed statements concerning accounting relating to the Special
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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(d) other detailed statements of expenses and profits that are found to beimportant based on the business characteristics of the Corporation.

Report of income and expenditure, etc.
Article 14. The Corporation shall, on a quarterly basis, report income and expenditureby the trial balance of totals and balances, and shall report the debts assumed pursuant
to the provisions of Article 9 by the amounts as stated by each matter to the Prime
Minister, the Minister of Education, Culture, Sports, Science and Technology, and theMinister of Economy, Trade and Industry within one month after the end of every quarter.

Business reports
Article 15. The business reports set forth in Article 58, paragraph (2) of the Act shallstate the following matters:(i)outline of the Corporation:(a)contents of business;(b)location of offices (including secondary offices);(c)amount of stated capital and the amount of capital subscription of thegovernment (including increase or decrease from the end of the previous
business year, respectively);(d) fixed number of officers, names, appointments, terms of office andbackgrounds;(e)fixed number of employees (including increase or decrease from the end of
the previous business year);(f)history of the Corporation (including a statement that the grounds forestablishment is the Act);(g)statement that the competent ministers are the Prime Minister, Minister of
Education, Culture, Sports, Science and Technology, and Minister of
Economy, Trade and Industry; and(h) matters concerning the Management Committee and any other outline of
the Corporation;(ii)

status of business implementation for the business year and the previous businessyear;(iii) results of the implementation of the financial plan;(iv) lenders of sums borrowed, purpose of borrowing and amount of borrowing for thebusiness year and the previous business year;(v)

name, purpose and amount of National Subsidies, etc;(vi) matters concerning affiliated companies:(a)outline of affiliated companies (including a chart systematically showing
their relationship to the Corporation);(b)matters concerning affiliated companies:
1. name;
2. contents of business;

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3. location of offices (including secondary offices);
4. amount of stated capital;
5. name of representative;
6. number of officers;
7. number of employees; and8. corporation’s shareholding ratio and any other details of its relationship to
the Corporation; and(vii) issues to be dealt with by the Corporation.

Statement of accounts
Article 16. The statement of accounts set forth in Article 58, paragraph (2) of the Act
shall be statements concerning financial statements, and debts.
(2) The statement of accounts set forth in the preceding paragraph shall state the actual
results of administration of budget pertaining to the matters prescribed in the generalbudget provisions pursuant to the provisions of Article 5.

Financial statements, etc.
Article 17. The financial statements set forth in paragraph (1) of the preceding Article
shall be prepared pursuant to the same categories of the income and expenditurebudgets, and shall state the matters specified in each of the following items inaccordance with the categories listed in each of said items:
(i)

(ii)

income: the following matters:(a)amount of budgeted income;(b)amount of determined income; and(c)difference between the amount of budgeted income and of determined
income;expenditure: the following matters:(a)amount of budgeted expenditure;(b)amount of contingency funds to be applied, and the reason for suchapplication;(c)amount of diversion and the reason for such diversion;(d) amount of actual budgeted expenditure;(e)amount of determined expenditure; and(f)amount of unused budgeted funds for expenditure.

(2) The financial statements concerning debts set forth in paragraph (1) of the preceding
Article shall state the amount of debts assumed pursuant to the provisions of Article 9 foreach matter.

Inspection period
Article 18. The period specified by an ordinance of the competent ministries
prescribed in Article 58, paragraph (3) of the Act shall be five years.

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Submitted documents by the Corporation
Article 19. The documents specified by an ordinance of the competent ministries
prescribed in Article 2, paragraph (2) of the Order for Enforcement of the Nuclear Damage
Compensation Facilitation Corporation Act are documents clarifying the basis forcalculation of the amount paid by the Corporation to the Treasury pursuant to theprovisions of Article 59, paragraph (4) of the Act.

Application for authorisation of borrowing
Article 20. When the Corporation intends to obtain authorisation to borrow funds
pursuant to the provisions of Article 60, paragraph (1) of the Act, the Corporation shallsubmit an application for authorisation stating the following matters to the Prime
Minister, Minister of Education, Culture, Sports, Science and Technology, and Minister of
Economy, Trade and Industry:(i)reason for necessity to the borrow funds;(ii)amount of the borrowing;(iii) lenders;(iv) interest rate on the borrowing;(v)

method and deadline of reimbursement of the borrowings;(vi) method and deadline of interest payment; and(vii) in addition to the matters listed in the preceding items, necessary mattersconcerning the borrowing.

Method of investment of surplus funds
Article 21. The method specified by an ordinance of the competent ministries set
forth in Article 62, paragraph (3) of the Act is the money held in trust (limited to themoney held in trust with an agreement to compensate any loss of the principal).

Accounting rules
Article 22. The Corporation shall specify accounting rules for its financial affairs andaccounting.
(2) When the Corporation intends to specify the accounting rules set forth in thepreceding paragraph, it shall obtain the approval of the Prime Minister, Minister of
Education, Culture, Sports, Science and Technology, and Minister of Economy, Trade andIndustry. The same shall apply when the Corporation intends to change them.

Personal identification document of inspection personnel
Article 23. The personal identification document carried by a personnel who carries
out on-site inspection pursuant to the provisions of Article 65, paragraph (1) of the Act
shall be specified by the appended form.

Supplementary rules
This Ordinance shall come into effect as from the date of promulgation.
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Appended form (related to Article 23)
Front

No. _ _
Inspection ID pursuant to Article 65, paragraph (2) of the Nuclear Damage
Compensation Facilitation Corporation Act
Position & Name
Photograph
DOB

YYYY

(Seal with stamp)

Issued

MM

DD

YYYY

MM

Competent Minister

DD

Seal

Back

Extract from the Nuclear Damage Compensation Facilitation Corporation Act
Article 65. When the competent ministers find it necessary for the enforcement of
this Act, they may order the Corporation to submit a report concerning its business,or may have his/her officials enter the Corporation’s offices to inspect its books,
documents or any other objects.
(2) A person who enters and inspects pursuant to the provision of the preceding
paragraph shall carry a certificate for identification, and show it to the persons
concerned.
(3) The authority concerning the on-site inspection pursuant to paragraph (1) shallnot be construed as the one authorised for criminal investigation.
Article 75. When falling under any of the following items, the Corporation’s officers
or employees shall be punished by a fine not exceeding JPY 500 000:(ii) When he/she has failed to make a report pursuant to Article 65, paragraph(1) or having made a false report, or has refused, obstructed, or avoided theinspection pursuant to the provisions.
Remark: the size of the form shall be JIS B7.

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Outline of the Nuclear Damage Compensation
Facilitation Corporation Act
August 2011
Cabinet Secretariat

1. Objective of the Act
In response to the large-scale nuclear damage due to the accident at the Tokyo ElectricPower Company (“TEPCO”)’s Fukushima Daiichi and Daini nuclear power plants, theGovernment will take every possible measure to support the compensation for nuclear
damage in accordance with the basic policy of “aiming to minimise the burden to beplaced on the public” in order to ensure to:(1)take every possible measure for prompt and appropriate compensation for damage;(2)

stabilise the condition of TEPCO’s Fukushima nuclear power plant and avoid any
adverse impact on related business operators, etc. dealing with the accident; and(3)

supply stable electricity which is indispensable for people’s living;in recognition of its social responsibility as the promoter of nuclear policy to date.

2. Outline of the Act
Taking into account the possible payment of a large amount of nuclear damage
compensation related to the nuclear business, the Government shall build, under theconcept of mutual support among nuclear operators, a framework by which to establish a
support organisation (the Nuclear Damage Compensation Facilitation Corporation) thatenables nuclear operators to deal with future compensation payment for nuclear damage
and associated transactions.

(1) Establishment of the Nuclear Damage Compensation Facilitation Corporation andreceipt of contributions from nuclear operators
As the support organisation dealing with compensation payment for nuclear damage andassociated transactions in case of an occurrence of nuclear damage, the Nuclear Damage
Compensation Facilitation Corporation (the “Corporation”) shall be established and it
shall reserve funds in preparation for nuclear damage compensation.
The Corporation shall receive contributions from nuclear operators, as expenses
necessary for the Corporation’s business.
The Corporation shall have a third party committee (the “Management Committee”)
which makes resolutions with respect to business operation of the Corporation, including
resolutions on financial assistance to a nuclear operator.

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NUCLEAR DAMAGE COMPENSATION FACILITATION CORPORATION(2) Normal financial assistance by the Corporation
If a nuclear operator is in need of assistance by the Corporation in order to compensate
nuclear damage, the Corporation shall grant financial assistance (such as granting offunds, share subscription, loan of funds and acquisition of bonds, etc.) after obtaining a
resolution of the Management Committee.
In order to raise funds necessary for the financial assistance, the Corporation may issue
government guaranteed bonds and borrow funds from financial institutions.

(3) Special financial assistance by the Corporation(i) Certification of the Special Business Plan
When the Corporation needs to receive special government aid for giving financial
assistance to a nuclear operator, the Corporation shall, jointly with the nuclear operator,
prepare a “Special Business Plan” and apply for certification of the competent ministers.
The Special Business Plan shall include the forecast of the total amount of compensation,measures for implementing prompt and appropriate compensation for damage, thecontents and the amount of financial assistance, measures for rationalisation ofmanagement, request for co-operation to stakeholders in order to secure the funds
necessary for performance of compensation for nuclear damage, and measures forclarification of management responsibility.
Upon preparing of the Special Business Plan, the Corporation shall value the nuclear
operator’s assets strictly as well as objectively and review its business management
thoroughly, and shall also confirm whether the requests for co-operation to relevant
persons (stakeholders) made by the nuclear operator are appropriate and sufficient.
The competent ministers shall grant certification of Special Business Plan, following
mutual consultation with heads of relevant administrative organs.

(ii) Support to a nuclear operator based on the Special Business Plan
In order to grant financial assistance (Special Financial Assistance) under the Special
Business Plan, after receiving the certification of the competent ministers, theGovernment shall grant government bonds to the Corporation, and then the Corporation
requests for reimbursement of (raising cash through) the government bonds and grantnecessary funds to the nuclear operator.
The Government may grant additional necessary funds to the Corporation within theamount prescribed by the budget, only when the Government finds that the funds to beallocated for compensation are likely to be insufficient even after granting thegovernment bonds.
The Corporation may raise funds by issuing government guaranteed bonds, etc. in orderto support the nuclear operator.

(4) Payment to the Treasury by the Corporation
The nuclear operator, which has received financial assistance from the Corporation, shall
pay a special contribution.
From the contributions, etc., the Corporation shall make payments to the Treasury until
the repayment reaches the amount of reimbursement of government bonds.
However, the Government may grant necessary funds to the Corporation only when the
Government finds that specifying an excessive amount of contributions leads to the riskof obstructing stable supply of electricity and any other operations, or of causing

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unexpected disruption in the lives of the citizenry and the national economy by imposing
extreme burden on the users of the business.

(5) Facilitation of smooth implementation of compensation for damage
In order to facilitate the payment of nuclear damage compensation, the Corporation may(i) provide necessary information and give advice in response to consultation requests
from the affected people, (ii) purchase assets possessed by the nuclear operator, and(iii) implement affairs concerning compensation payment on behalf of the nuclear
operator upon entrustment by the nuclear operator, and temporary payment1 on behalf ofthe nuclear operator upon entrustment by the State and prefectural governor.

(6) Accounting
The Corporation shall manage contribution figures for each nuclear operator.

3. Effective date
The Act shall come into effect on the day of promulgation. The Government shall:(1)

review the responsibility of the State pertaining to the compensation of nuclear
damage and its involvement, and shall take necessary measures including
fundamental review of amending the Compensation Act, etc. based on the result of
these review;(2)

review the status of enforcement of this Act including the burden among TEPCO, theGovernment and other nuclear operators, and the burden on shareholders and anyother relevant persons of TEPCO, etc., and shall take necessary measures based on
the result of this review; and(3)

review the responsibility of the State for the nuclear energy policy, etc. based on thereview of the policy on energy including improving systems pertaining to electricity
supply, and shall take necessary measures including fundamental review of acts
concerning nuclear energy.

1. Temporary payment on behalf of the nuclear operator by the State based on the Act on
Emergency Measures Related to Damage Caused by the 2011 Nuclear Accident.
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Framework of government support to the Tokyo Electric Power
Company to compensate for nuclear damage caused by the accident
at Fukushima Daiichi nuclear power plant
14 June 2011
Cabinet Decision

Regarding the accident at the Tokyo Electric Power Company (“TEPCO”)’s Fukushima
Daiichi nuclear power plant (the “accident”), TEPCO published on 17 April the “Roadmap
towards Restoration from the Accident”. The Government will request TEPCO to ensure
the stable implementation of this roadmap in a manner as timely as possible, and will
make regular follow-ups and monitor the progress of work as well as necessary safety
checks. In order to achieve a stable condition through cooling of the reactor cores as soon
as possible, the Government will gather together all knowledge, technologies and otheravailable resources from Japan and abroad and take every possible measure available.
With respect to the serious damage suffered by residents and business operators due tothe accident, TEPCO has recently stated that it will compensate damage fairly andpromptly under the Act on Compensation for Nuclear Damage (the “Compensation Act”).
TEPCO had also requested government support as it has financial difficulty due to theaccident caused by the Great East Japan Earthquake, etc.
In response to the request, the Government has required TEPCO to confirm whether TEPCO
would implement the following policies and TEPCO confirmed that it would do so: (1) nolimitation should be imposed in advance on the amount of compensation to be granted
and relief should be implemented in a prompt and appropriate manner; (2) the utmost
efforts must be paid to stabilise the condition of TEPCO’s Fukushima Daiichi nuclear power
plant, the safety and living environment of workers at the Daiichi nuclear power plantshould be improved and adequate attention should be paid to their economic aspects;(3) necessary expenses should be secured for stable electricity supply and for the safety ofequipment, etc.; (4) except for the above, rationalisation of management and cost reduction
should be sought to the utmost extent; (5) the actual conditions of management andfinance should be examined by a third party committee established by the Government, inorder to implement strict asset valuation and complete re-examination of costs, etc.; and(6) co-operation of all stakeholders should be sought and especially the status of cooperation from financial institutions should be reported to the Government.
The Government must ensure to (1) take every possible measure for prompt andappropriate compensation for damage, (2) stabilise the condition of TEPCO’s Fukushima
Daiichi nuclear power plant and avoid any adverse impact on related business operators,
etc. dealing with the accident and (3) supply stable electricity which is indispensable forpeople’s living.
In recognition of the Government’s social responsibility on nuclear energy policy, which
has been promoted through the co-operation between the government and nuclear
operators, the government will support TEPCO under the framework of theCompensation Act, basically aiming to minimise the burden to be placed on the public.

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Under the current situation, the Government will establish a framework that also enables
nuclear operators to deal with future payments of compensation for nuclear damage, etc.
and will ask nuclear operators other than TEPCO to participate in the framework.
The Government will facilitate examination to review the energy policy including thefuture of Japan’s electricity business, and implement necessary reforms. The Government
should create a framework that won’t interfere with such examination and reforms andwill further examine, after a certain amount of time, whether the victims have been
provided adequate relief, whether a stable electricity supply is ensured, whether thestability of financial markets is ensured etc., and will take additional measures if necessary.

Specific support framework
As the framework of the government support for TEPCO, the Government will establish ageneral support framework for nuclear operators as described below.
1. A support organisation (the “Corporation”) will be established and deal with payments,
etc. of compensation in case of occurrence of nuclear damage.
2. Basically, electric utilities that operate nuclear power plants (nuclear operators) are
obligated to participate in the Corporation. The participants are required to pay
contributions to the Corporation to enable the Corporation to procure adequate funds.
The contributions will be paid by the business operators as operating expenses.
3. The Corporation will support (including Granting of Funds, maintaining capital, etc.)
any nuclear operators in need of funds for paying compensation for nuclear damage. No
upper limit will be imposed on the assistance, and the assistance will be provided as
many times as necessary and will cover all amounts that are necessary for compensation
for damage, investment in facilities, etc. in order to prevent nuclear operators fromincurring excessive debts.
4. The Government or the Corporation will provide consultation for victims of nuclear
damage. The Corporation will take proper measures in order to facilitate smoothpayment of compensation, including purchase of assets a nuclear operator.
5. The Government will provide necessary aid to the Corporation including granting ofgovernment bonds and government guarantee, etc.
6. Prior to initiation of the aid, the Government, in response to request from a nuclear
operator, will examine the details of necessary aid, rationalisation of management, etc.
and will supervise (authorise, etc.) the nuclear operator for a certain period of time withrespect to rationalisation of management, etc.
7. If a nuclear operator receives support from the Corporation, the nuclear operator will
pay a special contribution to be set taking into account the operating revenue of eachyear as well as other factors.
8. The Corporation will pay to the Treasury necessary amounts from the contributions,etc. paid by nuclear operators.
9. A legal provision will be stipulated to the effect that, in an exceptional case such as when
nuclear operators have difficulties in maintaining stable electricity supply due to thepayment of contributions, the Government will be able to provide subsidy to the Corporation.

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Figure 5: Compensation support by Nuclear Damage Compensation Facilitation Corporation
5.1: General financial assistance
Affected people/business

Granting of Funds
Financial
institution

Repayment

The Corporation(newly established)

General and special contributions

Loan, etc.
General contributions
Government
guarantee

Payment
to Treasury

Granting
government bonds

Government

Claim

Framework of mutual support

Compensation

Facilitating compensation payment,
e.g. establishing a compensation
information desk

Tokyo Electronic
Power Company(TEPCO)
Other nuclear operators(electricity utilities, etc.)

Loan of funds, share subscription, acquisition ofbonds, etc. (for cost of settlement of the accident,
capital investment for stable electricity supply, etc.)

5.2: Special Financial Assistance system

TEPCO(4) Provides Special
Financial Assistance(1) Jointly prepare and submit
Special Business Plan

(2) Certifies Special Business Plan

Corporation

Government

Ensures implementation of Special Business Plan

(3) Grants government bonds

Note: When preparing a Special Business Plan, the Corporation shall strictly evaluate TEPCO’s assets,thoroughly review its business operations and check that its request for co-operation of parties concerned
is appropriate and sufficient.

Contents of Special Business Plan
1. Circumstances of nuclear damage.
2. Forecast of compensation amount and compensation procedure.
3. Medium-term plans concerning the business and the balance of payments.
4. Measures for rationalisation of management.
5. Measures to request co-operation of relevant parties.
6. Valuation of assets and income/expenditure conditions.
7. Measures to clarify management responsibility.
8. Contents and amounts of financial assistance, etc.

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Act on Emergency Measures Related to Damage Causedby the 2011 Nuclear Accident(Act No. 91 of 2011)

Purpose
Article 1. The damage caused by the nuclear plant accident following the Pacific
Ocean earthquake off the coast of the Tohoku district that occurred on 11 March 2011
was unprecedented in its scale and long-term duration, and in consideration of the needto provide prompt relief to the parties who sustained damage as a result thereof, as well
as special circumstances such as the time needed to pay compensation for specified
nuclear damage to such parties, as an emergency measure related to the emergency
countermeasures associated with said damage, this Act specifies the necessary mattersconcerning the prompt and appropriate payment of provisional payments by the State inorder to indemnify damage caused by the 2011 nuclear accident and support local public
entities that have established emergency funds for nuclear damage, based on the role tobe performed by the State in connection with the measures related to said damage.

Definitions
Article 2. In this Act, “specified nuclear damage” means damage for which nuclear
operators (“nuclear operator” as defined by Section 2 paragraph 3 of the Act onCompensation for Nuclear Damage (Act No. 147 of 1961); likewise hereinafter) are liable
based on the provisions of Section 3 paragraph 1 of said Act.

Payment of provisional payments
Article 3. The State shall make provisional payments to parties who have sustained
specified nuclear damage as defined by cabinet order, in accordance with the provisionsof this Act, in order to indemnify said specified nuclear damage.
2. Based on the provisions of the preceding paragraph, the payment of provisional
payments by the State shall be prompt in order to provide relief for parties who havesustained specified nuclear damage, and shall be appropriate from the perspective of theburden on the public.

Amount of provisional payment
Article 4. The amount of a provisional payment in relation to the specified nuclear
damage sustained by a party pursuant to the provisions of Article 3-1 is an amountcalculated by multiplying a ratio of not less than five tenths, as defined by cabinet order,
to the approximate value of said specified nuclear damage, using a simplified method
defined by cabinet order based on materials submitted by said party, which are definedby cabinet order. However, if submitting said materials by said party is deemed to bedifficult, the amount shall be calculated by multiplying said ratio to an amount of said
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which said party lives or carries out their business and/or the type of said specified
nuclear damage, as defined by cabinet order.
2. The cabinet orders under Article 3-1 and the preceding paragraph shall be defined
based on the matters defined in the guidelines under Section 18 paragraph 2 ii) of the Act
on Compensation for Nuclear Damage in relation to the compensation of specified
nuclear damage as defined by the Dispute Reconciliation Committee for Nuclear Damage
Compensation, in order to contribute to the prompt relief of parties who sustained
specified nuclear damage.

Claim for provisional payment
Article 5. A party seeking to receive a provisional payment must make a claim to thecompetent ministers, as specified by cabinet order.
2. If inheritance, merger or demerger occurs to a party who has the right to receive aprovisional payment (but only where said party transfers a business associated with thespecified nuclear damage stipulated under Article 3-1), and said party had not claimed aprovisional payment before their death, dissolution or demerger, said party’s heir, thecorporation continuing after the merger or established as a result of the merger, or the
corporation inheriting said business as a result of the demerger, may claim payment of
said party’s provisional payment in their own name.
3. If there are two or more heirs of the same rank who can receive payment of aprovisional payment in accordance with the provisions of the preceding paragraph, aclaim by one of the heirs shall be regarded as a claim for the full amount for all of theheirs, and payment to one of the heirs shall be regarded as a payment to all of the heirs.

Assistance with preparation of documents, etc.
Article 6. Organisations of which the business operator is directly or indirectly amember, including local public entities and agricultural co-operatives, fisheries cooperatives, chambers of commerce, and commerce and industry associations, shallendeavour to provide the necessary assistance in the preparation of the required
documents for the claim, in order to facilitate the party’s claim for the provisional payment.

Provision of materials and request for other co-operation, etc.
Article 7. If deemed necessary in order to make payment of the provisional payment
promptly and appropriately, the competent ministers may request the local public
entities, concerned nuclear operators or other public or private organisations to provide
materials or otherwise co-operate or seek confirmation as necessary.

Processing of administrative work, etc.
Article 8. Part of the administrative work associated with the payment of provisional
payments may be carried out by prefectural governors, as defined by cabinet order.
2. When establishing the cabinet order under the preceding paragraph, due consideration
should be given so as not to impose an excessive burden on prefectural governors.
3. The competent ministers, or prefectural governor carrying out part of theadministrative work related to the payment of provisional payments pursuant to theprovisions of paragraph 1, may commission an appropriate party as defined by cabinet
order to carry out part of such business related to the payment of provisional payments(excluding the determination and issuance of expenditure based on the Public Accounts
Act (Act No. 35 of 1947)).

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4. The competent ministers, or prefectural governor carrying out part of theadministrative work related to the payment of provisional payments pursuant to theprovisions of paragraph 1, may issue the necessary funds required for payment of theprovisional payment to the party defined by cabinet order pursuant to the provisions of
the preceding paragraph.
5. A party receiving funds pursuant to the provisions of the preceding paragraph shall be
regarded as an employee who has received funds based on the provisions of Article 17 of
the Public Accounts Act, and shall be subject to the provisions of said Act, as well as the
Act on the Responsibility of Employees, etc. who execute the Budget (Act No. 172 of 1950)
and other applicable laws. In this case, any necessary technical change in interpretation
shall be defined by cabinet order.
6. Agricultural co-operatives, fisheries co-operatives and other organisations specified incabinet order may receive the commission of administrative work based on theprovisions of paragraph 3, notwithstanding the provisions of other laws, and carry out
said administrative work.
7. A party, their director or employee, or a party who was formerly such a party who hasreceived the commission of administrative work based on the provisions of paragraph 3
shall not divulge any secrets they have learned in relation to receiving the commission ofsuch administrative work without valid reason.
8. If a prefectural governor carries out part of the administrative work related to thepayment of provisional payments, or commissions such administrative work pursuant to
the provisions of paragraph 3, the State shall assume the full amount of the costs
necessitated for processing and commissioning said administrative work, within thescope of the budget, as defined by cabinet order.
9. When the provisions of the preceding paragraph apply, the State shall provide thenecessary assistance to the applicable prefecture and enact other measures to ensuresmooth implementation, in addition to the provisions of said paragraph.
10. With regard to the payment of provisional payments, the heads of related governmental
bodies shall co-operate with the competent ministers, with the prefectural governor
carrying out part of the administrative work related to the payment of provisional
payments pursuant to the provisions of paragraph 1, or with the party who has received
the commission of such administrative work pursuant to the provisions of paragraph 3.

Relationship to compensation for damage
Article 9. When a party who has sustained specified nuclear damage pursuant to theprovisions of Article 3-1, or a party who can claim payment of a provisional payment intheir own name pursuant to the provisions of Article 5-2, has received compensation forsaid specified nuclear damage (including where defined by cabinet order as being amonetary payment equivalent thereto), no provisional payment shall be made up to theamount of such compensation.
2. When the State has made a provisional payment, it acquires the right of the party who
received said provisional payment to claim compensation for specified nuclear damage,up to the amount thereof.
3. In the case of the preceding paragraph, the State shall immediately exercise this rightto claim compensation.

Refund of provisional payment
Article 10. If the amount of compensation for specified nuclear damage for a party
who has received a provisional payment has been finalised, said party shall refund theJAPAN’S COMPENSATION SYSTEM FOR NUCLEAR DAMAGE, ISBN 978-92-64-99200-9, © OECD 2012

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monetary difference if the amount of the compensation is less than the amount of theprovisional payment.

Collection of dishonest gain
Article 11. If a party has received a provisional payment through deceit or otherdishonest means, the competent ministers may collect from the party a sum equivalent
to the full or partial amount of the received provisional payment, based on the same
rules as those for the collection of national tax.
2. Regarding the order of the lien for money collected pursuant to the provisions of thepreceding paragraph, the collection shall come after national tax and local tax.

Protection of right to receive payment of a provisional payment
Article 12. The right to receive payment of a provisional payment shall not be
assigned, pledged as collateral, or seized.

Taxation measures
Article 13. The State and local public entities shall enact the necessary taxation
measures with regard to received provisional payments, with due consideration for thecircumstances of the party who has sustained specified nuclear damage.

Emergency fund for nuclear damage
Article 14. If local public entities establish an emergency fund for nuclear damage as afund under Article 241 of the Local Government Act (Act No. 67 of 1947), in order to fullyor partially cover the costs necessitated by operations taken by the local public entities
related to emergency measures based on the Act on Special Measures concerning Nuclear
Emergency Preparedness (Act No. 156 of 1999) or related legislation with regard todamage arising from the 2011 nuclear accident, and the operations of local public entities(limited only to emergency measures to prevent or mitigate the impact of the 2011
nuclear accident on the economy or lives of the residents within the district, or in orderto achieve recovery from the effects thereof) that could be subject to financial measures
under Article 85-4 of the Act on Special Accounts (Act No. 23 of 2007), the State may
support said local public entities by providing the necessary funds for this fund, in part orin full, within the scope of the budget.
2. If local public entities have enacted measures associated with specified nuclear
damage, covering the costs thereof from the emergency fund for nuclear damage, theprovisions of the preceding paragraph shall not preclude the State from claiming fromthe applicable nuclear operator an amount up to a sum equivalent to the amount offinancial support provided pursuant to the provisions of said paragraph.
3. When operating the provisions of paragraph 1, the State shall pay due consideration to
the views of the related local public entities.

Competent ministers
Article 15. The competent ministers under this Act shall be the Minister for Education,
Culture, Sports, Science and Technology, the minister with jurisdiction over the businessof a business operator which sustained specified nuclear damage, and ministers definedby other cabinet orders.

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Entrustment to cabinet order
Article 16. In addition to the provisions of this Act, any procedures for the
implementation of this Act and any other necessary matters in relation to the executionof this Act shall be defined by cabinet orders.

Penal provisions
Article 17. A party who violates the provisions of Article 8-7 shall be punished withimprisonment of up to one year or a fine of up to JPY 1 million.

Supplementary provisions
Date of enforcement
1. This Act is enforced from the date defined by cabinet order, provided that this is notlater than 45 days from the date of its promulgation.

Application
2. The provisions of Article 3-1 shall also apply to a party who sustained specified nuclear
damage pursuant to the provisions of said paragraph, who died or was subject to merger
or demerger before the enforcement of this Act.

Securing of financial resources
3. In order to contribute to securing the financial resources for the costs necessitated by
the payment of provisional payments and support for local public entities that haveestablished emergency funds for nuclear damage, the State shall endeavour to utilise its
assets, surplus and reserves, review expenditures and take other measures.

Review
4. Approximately two years or less from the effectiveness of this Act, the State shallreview the provisions of this Act, based on the status of damage compensation payments
by nuclear operators connected with the 2011 nuclear accident and the status of
implementation of this Act, etc., and enact the required measures based on the results
thereof, if deemed necessary.
5. Concerning the system for compensation of nuclear damage, a review shall be
conducted promptly in order to contribute to prompt relief for the parties who sustained
nuclear damage, and the necessary measures enacted based on the results thereof.

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Incidental Resolution to the Act on Emergency Measures Related toDamage Caused by the 2011 Nuclear Accident
26 July 2011
House of Representatives Special Committee on Recovery from the Great East Japan Earthquake

Upon the effectiveness of this Act, the government shall comprehensively implement thefollowing matters:
1. With regard to the payment of provisional payments, achieve organic co-ordination
with new, separately implemented schemes, etc., in order to effect prompt andappropriate compensation of nuclear damage, etc.
2. Quickly establish a system for the payment of provisional payments in order to provide
prompt relief for the victims, and strive to make prompt payments.
3. With regard to the payment of provisional payments, enact the necessary measures toensure that there is no burden on the public, including conducting procedures to verify inadvance that nuclear operators satisfy the indemnification claims of the State.
4. Enact the necessary measures to prevent confusion and delays in the implementationof provisional payments by nuclear operators and the State, respectively.
5. Address the near-term costs necessitated by this Act through the Great East Japan
Earthquake recovery and reconstruction contingency funds, etc. included in the current
fiscal year’s second supplementary budget.

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Figure 6: Outline of the Act on Emergency Measures Related to Damage Causedby the 2011 Nuclear Accident(Promulgated on 5 August 2011, in force on 18 September 2011)
1) Right to claim compensation
for nuclear dammage according
to Compensation Act

Nuclear operator
TEPCO

3) Right to Indemnity Subrogation:
State acquires victim’s right to claim
compensation according toCompensation Act

2) Payment of nuclear damage compensationaccording to Compensation Act

1) Right to claim provisional payment

State

under Emergency Measures Act to avoid
lengthy payments under Compensation Act

 Receipt of claims as from 21 September 2011.

Victims

 Amount calculated by multiplying a ratio of not less than 5/10

(Business operators/
residents)

 If compensation is received from operator for the same damage,to the approximate/estimated value of the damage, both to be
defined by cabinet order.

Competent ministries forprovisional payment: MEXT Those with jurisdiction
over business of affectedbusiness operator

that amount is deducted from the provisional payment.

 Scope of damage eligible for provisional payment is defined bycabinet order based on Reconciliation Committee guidelines.** With regard to “rumour-related” damage, for the time being only
compensated for SMEs damage in tourism industry in Fukushima, Ibaraki,
Tochig, Gunna prefectures (cabinet decision of 13 September 2011).

Part of administrative workfor provisional payments
may be commissionned
to third parties bycabinet order(Corporation Act).

2) Provisional payment by the State
under the Emergency Measures Act

Local public entities
Emergency Fund for nuclear damage
to cover cost of Emergency Measures related to:2) Support from local
public entities

 Measuring residents’ exposure to radiation.
 Decontamination.
 Prevention and mitigation of effects of nuclear
accidents, etc...

1) Possibility for Stateto financially support
Emergency FundCan be eligible for funds not encompassed by theguidelines of the Reconciliation Committee.

OECD/NEA PUBLISHING, 2 rue André-Pascal, 75775 PARIS CEDEX 16
ISBN 978-92-64-99200-9

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Japan’s Compensation System
for Nuclear Damage

Following the TEPCO Fukushima Daiichi nuclear power plant accident, extraordinary efforts were
undertaken in Japan to implement a compensation scheme for the proper and efficient indemnificationof the affected victims. This publication provides English translations of key Japanese legislative andadministrative texts and other implementing guidance, as well as several commentaries by Japaneseexperts in the field of third party nuclear liability.
The OECD Nuclear Energy Agency (NEA) has prepared this publication in co-operation with thegovernment of Japan to share Japan’s recent experience in implementing its nuclear liability andcompensation regime. The material presented in the publication should provide valuable insights for thosewishing to better understand the regime applied to compensate the victims of the accident and for thoseworking on potential improvements in national regimes and the international framework for third party
nuclear liability.

OECD Nuclear Energy Agency
12, boulevard des Îles92130 Issy-les-Moulineaux, France
Tel.: +33 (0)1 45 24 10 15
nea@oecd-nea.org www.oecd-nea.org

ISBN 978-92-64-99200-9-:HSTCQE=^^WUU^: