Government paralysis and crippling mistrust

The key to understanding Japan's nuclear policy crisis is clearly grasped in a New York Times article by Norimitsu Onishi and Martin Fackler. The article, "In Nuclear Crisis, Crippling Mistrust," incisively details how mistrust of the bureaucracy he heads and the companies it oversees crippled Prime Minister Naoto Kan's ability to deal with the unfolding triple meltdown at the Fukushima Daichi power plant.

Events since that June 12 article make it clear that mistrust is paralyzing Japan's nuclear energy industry and policy, and hampering its handling of earthquake and tsunami recovery unrelated to nuclear energy.

Three debacles since June 12 have exacerbated mistrust and helped drop the cabinet's approval rating 9 points to 16% in just one month..

The first is Kan's abrupt call for stress tests. While the stress tests themselves may be a good idea, the timing of Kan's call and failure to consult his cabinet beforehand made a liar out of METI Minister Banri Kaieda. According to the Nihon Keizai Shimbun, Kan's position on nuclear energy made a major shift on the evening of June 29 after a meeting in Roppongi Hills with an unnamed Italian anti-nuclear activist. Unfortunately, that very day. Banri Kaieda earlier gave Saga Prefecture Governor Furukawa a green light toward restarting the Genkai nuclear power plant.

The second is the email scandal perpetrated by Kyushu Electric in Saga Prefecture. At a televised hearing, fully half of emails contributed to the program in favor of restart were sent by employees of Kyushu Electric and its subsidiaries. At the moment, this scandal does not extend to other electric power companies, but we should not be surprised if others, maybe even all other utilities are outed. (Note added 2011/7/15; The Nihon Keizai Shimbun today reports on p.39 that the Agency for Natural Resources and Energy has launched an investigation of the other 6 electric power companies. http://s.nikkei.com/nQe5d5)

The third is Kan's appointed of Ryu Matsumoto as Reconstruction Minister, who then promptly trekked to Tohoku and relieved his ego in its living room. More precisely, he upbraided Miyagi Governor Murai for not being in the designated meeting room at precisely the agreed time and accused Murai of forgetting proper subservience that he should have learned in the military. Matsumoto then flatly refused to help Miyagi without prior local consensus. (Governor Murai is locked in a struggle with local fish farmers over allowing corporations to hold fish farming licenses.) Matsumoto then moved on to Iwate Prefecture and said to Governor Tasso, "No smarts, no help" (a faithful translation of tone and content), a pointed criticism of Iwate Prefecture's decision to solve its crisis itself.

The Asahi Shimbun is calling for Japan to become nuclear-free.  On July 13, Prime Minister Kan also called for a shift away from nuclear power. However, neither of these calls contributes to resolution of the current paralysis and will more likely hinder it by cementing and uncompromising bipolarity. The next day, Chief Cabinet Secretary Yukio Edano distanced himself from Kan's call, further exhibiting the cabinet's paralysis.

Japan's horses are in the middle of the stream and it cannot decide whether to go forward or to go backward - or to change horses.

Over the next few weeks or months, look for positions to harden as the stress of the stress tests extends further and further beyond the nuclear plants themselves.