Food co-op sues Tepco over soiled reputation

by Tomoko Otake

Staff Writer

Nanohana Seikyo — a Chiba Prefecture food distribution cooperative with about 11,500 members — made headlines last month when it took on the role of David by suing the corporate Goliath that is Tokyo Electric Power Co. for losses in sales incurred as a result of the March 2011 nuclear disaster.

In its civil suit filed on Sept. 24 at the Chiba District Court, the co-op is seeking ¥22.91 million in damages from the utility company that operates the stricken Fukushima No. 1 nuclear power plant.

The amount being sought is minuscule set against the hundreds of billions of yen Tepco has already paid to corporations and individuals affected by the disaster — let alone the estimated ¥4.5 trillion that it, with massive injections of public money, is likely to have to pay in damages and compensation due to the explosions and reactor meltdowns at the plant, and the resulting releases of radioactive materials.

Nonetheless, the case is of crucial importance, since it raises the fundamental question of who bears ultimate responsibility for all the public anxiety over — and the loss of confidence in — food safety in post-Fukushima Japan.

Shinji Kase, head of the 38-year-old co-op, told The Japan Times in a recent interview that his organization had long sourced food from Fukushima, with the goal of delivering pesticide- and additive-free non-genetically modified foods to its members. However, to do this, he explained, it has been vital to establish long-term relationships with farmers in order for them and the co-op to work together toward the goal of delivering safe food.

Since the March 2011 disaster, Kase said Nanohana Seikyo — which has become active in the anti-nuclear campaign — had started independently testing the food it handled, including produce from Fukushima, applying radiation limits far stricter than those set by the government. Despite its testing, however, the co-op’s sales have plummeted and some of its members have left.

“Around 50 members who had trusted us withdrew from our co-op, citing clearly their fears of radiation risks as the reason,” Kase said. “Many more have quit without exactly saying why — but we think it’s attributable to the disaster.”

In its restitution scheme, Tepco already has a provision for compensating businesses that have incurred financial damage as a result of fūhyō higai — a term that means “damage from speculation or a bad reputation.”

Nanohana Seikyo’s current suit follows an out-of-court compensation claim it filed in November 2011 for ¥18.73 million to cover lost revenue and its extra costs due to the radiation testing. After examining that claim, Tepco paid a total of ¥10.51 million in January and April this year. In June, however, the utility informed Nanohana it was under no obligation to pay the ¥8.22 million balance since the co-op’s loss in sales had no causal relationship with the accident, according to a letter from Tepco to the co-op, a copy of which has been obtained by The Japan Times.

Kase said he suspects that recent moves by other co-ops to file compensation claims made Tepco wary, and that’s why it had taken that position.

What really enraged Kase about Tepco’s move, though, was not so much its withholding of money but the way it rejected the claim — hence the suit now filed claiming damages from the utility, he said.

Specifically, in that letter from Tepco it was the following sentence that so offended Kase: “With regard to food products that your co-op deals in, when there is a possibility that (member consumers) will refrain from buying products and cause damage based on speculation that those products might be tainted with radioactive materials, your co-op has the option of taking preventive measures, such as sourcing your food from other suppliers,” Tepco wrote.

In other words, as Kase regards it, Tepco was effectively telling the co-op, “If your consumers don’t buy from Fukushima farmers for fear of radiation risks, you should get your food from somewhere else.”

What’s more, Kase said Tepco also hinted that Nanohana Seikyo’s independent food testing was an extra frill that didn’t warrant compensation. To support that claim he cited the following from that letter: “The results of your radiation tests show no radioactive substances have been detected in almost all of the foods. It cannot be judged, therefore, that the tests are absolutely necessary. It can be considered that you have been conducting (radiation tests) to allay your members’ concerns as part of your business judgment.”

Hence at issue here, as Kase sees it and has asked the court to rule on, is whether or not it is the responsibility of distributors to pay costs incurred when they try to meet consumer demand by monitoring food independently, because their consumers do not entirely believe the government’s testing or its safety limit. And further, when consumers don’t even trust the results of such independent tests, and stop buying food from safety-conscious retailers, who should be blamed?

So clearly, despite the relatively petty amount being sought, Nanohana Seikyo’s damages suit raises major issues.

“Ideally, it should be Tepco — as a party that spread radiation all around — conducting radiation tests of food and making sure all foods are safe,” Kase said. “If we change our policy and drop our producers (when our test results show their food is safe), we won’t be ourselves — because we have long championed the idea of building trust with producers.”

The Japan Times contacted Tepco to discuss the lawsuit and the issues it raises, but its spokesman said it had no comment to make.

The Chiba District Court will have its first hearing on the case on Nov. 27. A ruling is not expected until sometime next year.