Business indirectly hurt by the accident at the Fukushima No. 1 power plant should also be compensated by Tokyo Electric Power Co. for damages, according to a government panel.
Business indirectly hurt by the accident at the Fukushima No. 1 power plant should also be compensated by Tokyo Electric Power Co. for damages, according to a government panel.
The screening panel, which is tasked with drawing up guidelines for TEPCO's crisis compensation, included the provisions in a draft for interim guidelines published July 19. The drafting will decide the TEPCO's compensation payment amounts.
The first and second guidelines, published earlier by the panel, set standards for compensation categories and eligibility for damages incurred by parties in government-designated evacuation zones, and for those who lost business due to consumer fears of radioactive contamination.
Establishments that have business connections with these "directly affected parties" will be categorized as "indirectly affected parties," and will be eligible for compensation.
The indirectly affected parties refer to entities that suffered damage because business partners, to which they sold goods and services or from which they procured raw materials, evacuated or suspended operations and because they could not find replacement goods or services and new customers.
These include businesses that saw sales plummet because they lost customers from evacuation zones and businesses that lost their supply of raw materials from plants located in evacuation zones.
The government screening panel appointed 76 experts from 17 fields to conduct surveys on the extent of the damage.
The survey results were summarized in a report more than 1,300 pages long, which revealed the extent of indirect damage.
The amount of compensation may soar in cases where the supply of irreplaceable raw materials or parts was from evacuation zones.
For example, rubber products, manufactured at a plant near the Fukushima No. 1 nuclear plant, were supplied to auto parts makers and ended up in cars made by almost all major automakers.
The nuclear accident, however, effectively shut down the plant.
Another firm, manufacturing electronic parts for cellphones, is also located within the evacuation zone. It holds more than a 20 percent global share in crystal oscillators, or parts that control the emission of radio waves, but it, too, halted production. Many of the electronic appliances makers that relied on this maker were not able to procure replacement products, disrupting production.
Elsewhere, the suspension of farm product shipments affected the performance of transportation and warehouse businesses. Depopulation due to evacuation orders dealt a blow to sales in supermarkets, cram schools and gas stations that lie outside evacuation zones.
Indirect damage due to consumer fears of radioactive contamination is also eligible for compensation.
The panel's second guidelines recommended that all farm food products from all parts of Fukushima, Ibaraki, Tochigi and Gunma prefectures, be eligible. The panel's latest guideline policy means that distribution companies that transport farm products from these prefectures may also be eligible for compensation.
While the inclusion of indirect damage will significantly expand the eligibility for compensation, drawing the limit line is no easy task. The screening panel plans to recommend broad eligibility for compensation, because constraining the eligibility within a narrow range could result in a large number of lawsuits.
While the screening panel decided to make indirect damage eligible for compensation, it postponed a decision on how to deal with the impact on manufacturing and other industries due to radiation fears until July 19 or later.
The screening panel plans to accelerate discussions to complete its interim guidelines by the end of July.
TEPCO has so far made temporary payments of about 100 billion yen ($1.26 billion) to evacuees, farmers, fishermen and small- and mid-size enterprises. This amount includes no compensation for indirect damage and no compensation for lost business from radiation fears.