TEPCO to Get Protective Custody in Nationalization Plan

TOKYO -- The Tokyo Electric Power Company (TEPCO), which had been a bastion of cronyism and corruption even before the triple meltdown at its Fukushima Daichii nuclear power following the March 11 earthquake, has today begun the process of being nationalized by the Japanese government.

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TOKYO -- The Tokyo Electric Power Company (TEPCO), which had been a bastion of cronyism and corruption even before the triple meltdown at its Fukushima Daichii nuclear power following the March 11 earthquake, has today begun the process of being nationalized by the Japanese government. The announcement, made on Wednesday evening, explains that TEPCO will be state-controlled and put under strict government supervision. This is ostensibly to prevent the firm from going bankrupt and to ensure that victims of the disaster are duly compensated for damages. But there are other issues troubling the company. The Atlantic Wire reported on December 30 that TEPCO was on the brink of nationalization," partly due to its problems with organized crime infiltration.

Today TEPCO’s spokesman Masaru Saito confirmed that the company would be undergoing de facto nationalization under a special 10-year restructuring plan. Under the plan, the government will invest over a trillion yen into the firm and gain a majority of the stock. “However, the company will continue to exist, keeping its name,” he added. TEPCO also announced that Chairman Tsunehisa Katsumata and the current CEO will be replaced.

Yukio Edano, the Trade and Industry Minister, has said in taking over TEPCO that Japan will adopt the same model used “to salvage Resona Holdings Inc. in 2003, when it invested almost ¥2 trillion into the bank for 70 percent control." As part of the plan, TEPCO will receive ¥1 trillion in government money from the Nuclear Liability Facilitation Fund after the shareholders’ meeting in June approves the necessary proposals.

One significant factor in the nationalization of TEPCO is revelations of the firm’s long running ties to organized crime.  Starting last July, the National Police Agency forced TEPCO to hold conferences on anti-organized crime measures, directed primarily at removing yakuza workers from the TEPCO plants and from preventing the company from working with other yakuza front business, such as construction companies. Police officers and NPA representatives attended the meeting as advisors. According to the firm, TEPCO and National Police Agency representatives have met once every two months. The last meeting was in January and another is planned in the near future.  

A senior National Police Agency (NPA) bureaucrat noted on background that TEPCO has a long history of collusion with organized crime, including a ¥30 million payment in cash to one yakuza boss, Takeuchi Youichi (Yamaguchi-gumi crime group), to convince him to stop writing about the Fukushima Reactor safety problems in a local magazine Fukushima Finance World (財界ふくしま). The NPA source added, “TEPCO until last year ignored organized crime involvement with its business partners and happily used cheaply supplied yakuza labor. Under government management, this should stop quickly, I hope.”

TEPCO is not the only nuclear power plant operator in Japan to get in trouble for using yakuza supplied labor. KEPCO (Kansai Electric Power Company) also had workers illegally supplied by a Kudo-kai front company working at their Ooi Nuclear Power Plant. A Fukuoka Police investigation in January uncovered the problem. The Kudo-kai is an extremely violent yakuza group based in Kyushu, and like other southern Japan gangs they are known for their fondness of pineapples.

TEPCO also had a history of illegally hiring minors to work at their nuclear power plants, most recently a 17-year-old boy. In 2009, the company was admonished for allowing 4 boys under 18 to work at the site in violations of the labor standard laws. While the authorities scolded TEPCO, only the labor dispatch company, ACTO, was criminally prosecuted. While it may surprise many, background checks on nuclear power plant workers in Japan are not mandated, although Japan’s Nuclear Energy Commission thinks doing so might be a good idea. Almost anyone can get a job there, raising some concerns about the potential for terrorism. 

The nationalization of TEPCO is also expected to speedup up a long-running investigation by the Tokyo Prosecutor’s Office of the top executives of TEPCO on suspicions of criminal neglect. After a much smaller scale nuclear accident at the JCO plant in Tokaimura in 1999, six employees of the firm were investigated and finally found guilty of professional negligence resulting in death-- in 2003.

This article is from the archive of our partner The Wire.