What Japan Must Do Now

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What Japan Must Do Now

Japan has made extraordinary progress in recovering from last year’s earthquake and tsunami. But will political bickering stop progress in its tracks?

It has been one year since the magnitude 9.0 Great Japan East Earthquake struck off the coast of the Tohoku region in northeastern Japan, killing 16,000 people and leaving more than 3,000 missing. Despite the enormity of the disaster, Japan has made a remarkable recovery over the past year. Still, ongoing problems with Fukushima and debris removal limit the pace of reconstruction. Japanese officials are still debating the lessons learned from this disaster to allow them to be better prepared in future. The fact is that implementation of these lessons learned, as well as the speed of recovery, has potentially reached a limit until some important political decisions are made.

If there’s one image of the March disasters that remains in the global consciousness, it is the Fukushima Daiichi nuclear power plant. Today, we know that fuel melted in three reactors, ranking Fukushima on par with Chernobyl in terms of the seriousness of the disaster. One year later, although major progress has been made, problems persist.

Over the past year, efforts have focused on stabilizing the reactors. In December, the government declared them to be in cold shutdown. Although the situation in the reactor cores is now stable, the nuclear fuel requires constant cooling. This has generated a lot of contaminated water that requires storage, prompting Tokyo Electric Power Company (TEPCO) to construct a nearby storage area of 1,100 tanks that can hold 180,000 tons of water. Aside from this water and the area in the immediate vicinity around the plant, the amount of radioactivity in the air or the ocean remains below levels that pose a threat to public health or marine organisms. It’s now believed that as much as 70 percent of the radioactive material released during the height of the disaster, by some estimates, was released into the Pacific Ocean, either by blowing out to sea or leaking from the plant. As a precaution against further leakage, TEPCO plans to seal about 17 acres of seabed near the cooling water intakes of the reactors this spring. While work will continue on the damaged reactors, decontamination efforts, infrastructure rebuilding, and a phased-return of residents are now underway.

Despite its mismanagement of the disaster, TEPCO remains an active entity responsible for providing electricity to as many as 45 million people. Still, public anger against TEPCO remains high. Earlier this month, shareholders of TEPCO filed a lawsuit against its executives. Suing for a historic amount of 5.5 trillion yen ($67.4 billion), the shareholders hope to use the money to compensate those affected by the disaster.

Getting less attention, but just as important, is the fact that other nuclear plants have been slow in preparing protective measures to prevent similar Fukushima-type disasters. Shortly after the March disasters, the government called on plant operators to install/reinforce coastal levees and install strategies to prevent hydrogen explosions. Yet, according to the Asahi Shimbun, only three nuclear facilities will have levees by the end of 2012, while none will have measures to prevent hydrogen explosions. Given that Japan’s seismic activity means another earthquake and/or tsunami is only a matter of time, this lack of preparation is surprising.

Aside from Fukushima, there has been significant progress in other sectors. Consider first the economy. The disasters destroyed or badly damaged Japan’s supply chains and infrastructure throughout Tohoku. According to the Cabinet Office, this led to an annualized 6 percent contraction in the nominal GDP in the second quarter (April-June). Because the government and private sector worked to rapidly restore the supply chains and infrastructure, companies could quickly resume manufacturing. This led to Japan’s nominal GDP to grow at an annualized 5.6 percent in the third quarter (July-September), leading the economy back to pre-disaster levels. By the end of FY2011, although the economy slowed, economic indicators showed that industrial production, private consumption, machine orders, and automobile production have all returned to pre-disaster levels. While full-blown reconstruction efforts are still in their initial phase and exports remained hampered by a high yen, the Cabinet Office expects nominal GDP for FY2012 to grow at about 2 percent. This is because it’s believed that the economy will be driven by domestic demand as reconstruction efforts increase, thereby creating demand and employment.

Politically, the past year provided clarity on the government’s reaction. In the immediate aftermath, Prime Minister Naoto Kan’s handling of the disaster was criticized for under-utilizing his office’s crisis management structure and central government expertise. Instead, he depended on personal acquaintances for policy advice and political committees. In recent months, more has come to light regarding Kan’s performance. For example, in late January it became known that his government failed to keep minutes of the meetings of various task forces and committees established to cope with the disasters. This failure means that Kan’s government escapes scrutiny for the justifications it provided to make decisions. Additionally, it means an accurate record is lacking upon which to learn lessons from the largest natural disaster in Japan’s modern history.

The absence of a record, while egregious in and of itself, speaks to a larger problem of information exchange. It’s now known that high levels of mistrust between Kan and bureaucrats and between the central government and TEPCO resulted in a limited exchange of information about the severity of problems at Fukushima. For example, although the public was being told that there was little reason to panic, it’s now known that the central government was considering evacuating Tokyo given what little information they had about Fukushima. Because of vertical sectionalism within central government ministries, there was also a delay in the release of data on the direction of radioactive particles from Fukushima.

Although Kan stepped down in August, replaced by Yoshihiko Noda, little has changed. Despite a brief reprieve from partisanship following the disasters, the Liberal Democratic Party (LDP) reverted to its attacks on the ruling Democratic Party of Japan (DPJ). Worse, the DPJ returned to infighting. Like Kan, Noda has not been spared from the attacks. Nevertheless, his government passed two supplementary budgets. With total material damage estimated to be as much as $309 billion, the passage of four supplementary budgets (the first time since 1947) worth 20.5 trillion yen ($262 billion) has shown that the government is serious about reconstruction.  

In an attempt to streamline the reconstruction process, Noda opened a Reconstruction Agency (RA) in February. The RA, under the direct control of the premier but headed by Tatsuo Hirano, acts as Japan’s main administrative agency responsible for Tohoku’s reconstruction, scheduled to operate until March 2021. Prior to its establishment, local officials requesting central government funds for reconstruction projects needed to visit various central government ministries. As the lead agency, the RA will draw up post-reconstruction plans and receive and respond to all requests, including managing the account for reconstruction and allocating funds. Yet, while it will have the power to approve special reconstruction zones (with tax exemptions and lax regulations) and allocate subsidies, it will face numerous challenges from other central government ministries that have vested interests in areas where a project may be specified or a special reconstruction zone created. Because reconstruction projects administered by the central government will be implemented by the ministry related to that project, if the RA and that ministry disagree, the RA has no legal authority to impose its decision. This could lead to the RA’s decisions being overruled during implementation or simply delays in reconstruction. The effectiveness of this new RA is therefore unknown.

Like the reconstruction process, one of the lessons learned from Fukushima is that the existing nuclear regulatory structure must be streamlined. The Nuclear and Industrial Safety Agency (NISA), responsible for monitoring industry safety, was created in 2001 through the merger of nuclear regulatory bodies that existed separately in the Ministry of International Trade and Industry (today, Ministry of Economy, Trade and Industry, or METI) and the Science and Technology Agency. When created, NISA was placed within METI, which is responsible for promoting Japan’s nuclear energy industry. Thus, a conflict of interest existed for NISA, an agency responsible for monitoring and identifying safety problems but embedded in a ministry responsible for promoting this same technology. Understanding this, the government will open a new nuclear safety regulatory agency on April first of this year.

This new agency will be independent of METI and exist as an external agency of the Environment Ministry. Along with its nuclear regulatory functions, the new agency will also have the System for Prediction of Environmental Emergency Dose Information (SPEEDI), which tracks radiation particle movements, currently under the Ministry of Education, Culture, Sports, Science and Technology’s (MEXT) jurisdiction. Despite the integrated functions, there are no plans to abolish another nuclear safety body under MEXT, the Japan Atomic Energy Agency (JAEA). As such, it’s unclear how the two will integrate or differentiate their responsibilities. Given that METI will remain responsible for promoting nuclear technology and MEXT for the JAEA, and that power companies are used to operating in non-transparent environments, the new agency is likely to confront blowback. It’s unclear how successful it will be in overcoming this.

Although the government set aside an enormous amount of funds to assist in Tohoku’s reconstruction and established the RA to streamline the process, forward progress on reconstruction efforts remains stalled. This is because of ongoing problems with how to handle an estimated 20 million tons of debris generated by the earthquake and tsunami. According to the Environment Ministry, this is equivalent to 11 years of garbage normally generated in Iwate and about 19 years of garbage in Miyagi. Such a large amount of debris blocks reconstruction efforts.

While the areas hit by the disasters have worked to clear the debris, they are overwhelmed by it. It has simply been sorted and piled, awaiting disposal. In fact, Iwate has only disposed of 8 percent, Miyagi 5 percent and Fukushima 4 percent. As long as this debris isn’t disposed of or buried, it remains a barrier to reconstruction. Worse, it poses safety hazards. Although the central government wants to dispose of all debris by March 2014, this is unlikely because local governments outside Tohoku aren’t accepting the debris, fearing it might be contaminated with radiation. Because waste management policies are the jurisdiction of city councils and prefectural authorities, the central government has little authority to push local and prefectural governments to accept it.

This means reconstruction is proceeding slowly. Yet, inland areas and coastal areas face different challenges that translate into different speeds of reconstruction. The three prefectures hit hardest by the tsunami had vibrant coastal towns dominated by the fishing industry. This industry was devastated by the tsunami. According to a CNN report, an estimated 90 percent of the 29,000 boats in these prefectures were lost or damaged, causing an estimated $5 billion worth of damage to the fishing industry. While inland areas and coastal towns both are struggling with debris, coastal areas are also challenged by town planning and levee heights. One particular problem is obtaining consent from residents to move new residential areas to higher grounds. Cognizant of the unique challenges these coastal areas are facing, the RA is preferentially treating coastal areas’ local government requests for subsidies before inland requests.

As local governments continue their debates over debris removal and reconstruction, the central government is focused on two macro debates: Japan’s energy policy and disaster preparedness.

Because of the problems at Fukushima, Tokyo has been shutting down the country’s nuclear power plants for stress tests when they come offline for regularly scheduled maintenance. Currently, only 2 of its 54 reactors are in use, with no clear plan of when (or if) to restart the reactors. By late April, all 54 reactors will be offline. If this comes to pass, it will be the first time Japan has been nuclear-free since 1966.

This is because the government is in the midst of a debate on Japan’s energy future. Specifically, it is focused on whether Japan should continue to rely on nuclear energy and, if so, how much? Currently, it relies on nuclear energy for about 30 percent of its energy. Additionally, the debate is focusing on the ratio of renewable energy and the extent it can increase this ratio within its energy mix. Under the government’s current energy plan, there’s a target to increase this ratio from its current 9 percent to 21 percent by 2030. While this ratio is expected to rise, how much it rises is a function of the decision regarding nuclear energy.

Kan strongly advocated a move away from nuclear energy, which was initially supported by the DPJ and LDP. Yet, Noda doesn’t share Kan’s enthusiasm. Since Noda became premier, support within the parties has also fallen. Reports indicate that senior figures in the DPJ support nuclear power resumption. The LDP also deferred a decision on nuclear energy policy for 10 years. With a Mainichi Shimbun poll showing 57 percent of local governments near nuclear power plants favoring reactor restarts, and senior officials from Japan’s major economic organizations supporting nuclear energy, the government today is under less pressure to stop nuclear energy generation than it was under Kan.

The nuclear shutdown though means Japan needs alternative energy sources. This has resulted in an increased reliance on Liquefied Natural Gas (LNG). Japan’s LNG imports in 2011 marked a record high of 78.53 million tons, up 12 percent from the preceding year. If no nuclear reactors come on online in 2012, Japan’s annual LNG imports will likely reach close to 100 million tons. 

It has also meant more oil imports, although rising crude oil prices has meant this option is not as attractive as LNG. Worse, this option has run into unexpected geopolitical pressure. To prevent Iran from utilizing its nuclear program to make weapons, the U.S. is pushing for sanctions to punish financial institutions that do business with Iran’s central bank. Japan relies on Iran for about 10 percent of its oil. Given the loss of its nuclear power, this oil is crucial to Japan’s economy. As such, Japan requested the U.S. for waivers for its banks, which can be obtained if there is a significant cut in trade with Iran. Japan has therefore offered to gradually reduce (but maintain some level) its Iranian oil imports, underscoring that it has already reduced oil imports by 40 percent over the last five years in line with U.S. sanctions and gave up its interest in the Azadegan oil field in 2010. To prepare for reduced Iranian supplies, Tokyo has been actively securing stable supplies from its top oil suppliers (Saudi Arabia, United Arab Emirates, and Qatar). Yet, because of the nuclear plants’ shutdown, Japan has little room to buffer itself from events regarding Iran. 

While it’s uncertain whether the government will stop using nuclear energy, it is expected that the use of renewable resources will rise. Currently, there are numerous discussions focusing on taking advantage of Japan’s renewable energy resources: geothermal heat, wind, and solar power. Yet, they aren’t without problems. For example, while it’s easier to build large plants for wind-power generation, windmills need to be in windy areas. In Japan, this means mountainous regions or offshore. But these locations are distant from existing power transmission facilities, which mean costly infrastructure required from power companies. Additionally, erecting windmills require an easing of Forest Laws as well as coordinating with fishing rights, neither of which will be easy. Solar power too is problematic given that an enormous amount of space is required to generate the equivalent of one nuclear plant. The greatest promise appears to be geothermal. Until recently, there were restrictions that prohibited geothermal plants in national parks, where most geothermal activity exists in Japan. But in February, the Environment Ministry eased conditions for building geothermal plants in national or quasi-national parks, making it possible to drill diagonally into a national park from outside of the park on the condition that the facility has no impact on the surface of the ground.

In addition to Japan’s energy policies, the central government is also debating the country’s preparation to handle large-scale disasters. This shouldn’t be surprising given that Japan is one of the most seismically-active countries in the world. Preparation requires contemplation of lessons learned from the last disaster. This is particularly relevant given that the University of Tokyo’s Earthquake Research Institute released a report in January that predicted a 70 percent chance that a magnitude 7.0 quake would hit the Tokyo metropolitan area within the next four years (98 percent within the next 30 years). Because Tokyo is home to all key administrative, judicial, and legislative institutions and the greater Tokyo-area contains about 30 percent of Japan’s population and 60 percent of large companies’ headquarters, there is a crucial need to prepare.

As city planners discuss how to build redundancy into supply systems (water, electricity, gas) and how to rebuild “smarter” cities that are more ecologically friendly, there are other debates that often go unnoticed but have profound implications for Japan’s future. It’s important to highlight a few:

The March disasters demonstrated that entire regions can be affected by a single event. With an eye on preventing government paralysis resulting from simultaneous disasters in the Tokyo area, debate has begun on relocating government functions out of Tokyo. This debate isn’t new. After the 1995 Great Hanshin Earthquake, there were discussions on relocating all administrative, legislative, and judiciary functions out of Tokyo. A Diet council established to debate this issue chose the Tochigi-Fukushima, Aichi-Gifu, and Mie-Kio regions. Discussion eventually died due to the enormous cost that relocation would entail. This time, the discussion is focused on moving key ministries or agencies, rather than full-scale relocation. Because relocation on any scale will be expensive, and because it will be difficult to pick which government functions are “key,” relocation is unlikely. Nevertheless, the government needs to establish alternative facilities in areas unlikely to be hit by a major disaster at the same time.

Similar to this debate is a discussion on decentralizing Japan’s production areas. Because Tohoku is home to many of Japan’s production supply chains, the March disasters paralyzed manufacturers. While the concentration of production sites increases manufacturing efficiency, it also makes them vulnerable to large scale disasters. To reduce this, there is a call to decentralize production sites to hub cities throughout the country. Unfortunately, given the appreciation of the yen, many companies considering such moves are actually contemplating moves to other countries.

Finally, there’s a debate over how to handle disaster refugees. Although the March earthquake hit Tohoku, trains throughout the Tokyo area stopped, leaving millions of people stranded. Japan Railway East was criticized for not providing services to get people home. As a way to prepare for the next disaster, at about 30 major train stations in the Tokyo area, JR East and Tokyo Metro have begun stocking emergency supplies, blankets, and water for an estimated 30,000 people. Because a disaster striking Tokyo is likely to knock out all trains, this stocking of supplies is a good start. Yet, given that over 40 million people use the Tokyo area’s trains daily, much more stocking is necessary to be adequately prepared.

Arguably, no one knew what to expect of Japan one year after such overwhelming disasters.

Although Fukushima remains a problem, politics has returned to pre-disaster bickering, and debates continue unresolved over important aspects of Japan’s reconstruction and future, it’s still miraculous how the Japanese pulled together to recover from such massive devastation. While full reconstruction is still years away, the progress made in just one year is unbelievable. There will no doubt be many challenges ahead, and many hard political decisions are required, but the benefits that come from a more fully prepared Japan will be appreciated the next time disaster strikes.

Jeffrey W. Hornung is associate professor at the Asia-Pacific Center for Security Studies in Honolulu. The views expressed in this article are those of the author and do not reflect the official policy or position of APCSS, the U.S. Pacific Command, the U.S. Department of Defense, or the U.S. government.