Published on November 7, 2019: The Denki Shimbun (The Electric Daily News)
Shojiro Matsuura
Advisor

When I heard about the scandal which Kansai Electric Power Company (KEPCO) President Shigeki Iwane disclosed at the late-September press conference, I was less astonished than appalled.

At a press interview the following week, Nuclear Regulation Authority Chairman Toyoshi Fuketa bluntly stated, “I was first and foremost taken aback and furious, too. Moreover, I was disappointed.” Nevertheless, he concurrently determined that: “This matter is not something that we deal with under the auspices of the Nuclear Reactor Regulation Act.” However, I believe that it is important to establish the specifics of this scandal.

At the second press conference, KEPCO made public its Internal Investigation Committee’s report issued about a year ago, and this report was even stranger and puzzling. Twenty executives, including the company’s chairman and its president, received cash and gifts, but most of these have been returned. Moreover, Eiji Moriyama, the person who gave the executives these gifts, is now deceased. The matter has been dealt with and settled by returning or repaying most of the gifts. Although that should not have been a problem, Moriyama did, in fact, stubbornly refused to take back anything and forced the executives to take his gifts. This left KEPCO with no choice but “to return them eventually while the individuals involved hold on to them for the time being.” It is completely bizarre. This is not a story about governance or compliance in the ordinary sense. A major company like KEPCO where such systems operate properly lapsed into a state where these controls were non-functioning due to complicating circumstances.

On surface, it appears that the coercive power which Moriyama wielded was so strong as to inspire awe and fear in KEPCO. What led to his presence becoming so powerful?

According to information made public so far about Moriyama’s lifetime achievements, he had been an outstanding local government employee, receiving several awards including the Science and Technology Agency Director-General’s Award and a Certificate of Appreciation from the Director of the Ministry of Justice Civil Liberties Bureau. He even attained the honor of being conferred the Order of the Sacred Treasure, Gold and Silver Rays. Such achievements indicate a path of increasing influence as a prominent local figure.

Furthermore, underlying this rise is also a customary influence which is usually not brought out into the open but exercised within the historical and cultural context of Japanese society. For example, such influence may be tied to common rights, water rights, fishing rights and other proprietary rights in village communities.

It is often the case particularly with projects where it is essential for a good relationship to be constructed and maintained with the community, such as, for example, in the electric power, transportation, civil engineering and other such industries, that the enterprise will form particularly cordial relations with influential people in the community with the anticipation that they will provide substantial cooperation for promoting the enterprise’s projects.

Ideally, community residents share the ideas and sentiments upon which this cooperative relationship has been constructed and are supportive, enabling the proper administration of the project. Incidentally, anyone who has ever headed an electric power business has stated in their first speech upon taking office that “considering matters together with the community, embracing the community, walking together with the community, and prospering together with the community” is a basic principle of their management.

This poses no problems as long as the business is properly administered upon the premise that the cooperative relationship between the enterprise and regional and local influential figures is based upon a strong forbearance rooted in the conscience and wisdom of both sides. However, in any sort of cooperative relationship, there is the risk of pitfalls due to changing stakes and interests. When signs are perceived indicating some sort of anomaly or inappropriateness, it is imperative that these be addressed firmly and promptly, and defence-in-depth measures must be readied to counter all sorts of risks.

This KEPCO scandal is likely one where the company fell victim to such a trap of risk. KEPCO has come back from various hardships that it has faced over the history of its development as a business. I wholeheartedly hope that the company will revive the courage, wisdom, fortitude and industry that it has gained from experiences where it broke through a major fracture zone in the construction project of the Kurobegawa No. 4 Power Station, handled the accident where a steam generator tube ruptured at Mihama Unit 2 as well as an accident where a secondary pipe ruptured at Mihama Unit 3, and then resolve and march forward toward recovery and reform.

End