Safety should be the highest priority of any nuclear power-generating program. Japan, the world’s only victim of atomic bombings, has every reason to be particularly sensitive about nuclear safety. However, some of the nation’s electric power companies have been found wanting in the safety management of their nuclear plants.

The latest case of gross failure to meet safety standards is exceptionally outrageous because the company implicated is Tokyo Electric Power Co., Japan’s largest utility company. It was revealed late last month that Tepco had concealed cracks in reactor shrouds (casings), falsified repair records and submitted erroneous reports to the regulatory authorities from the late ’80s to early 1990s. Even more disturbing, two more regional power suppliers, Chubu Electric Power Co. and Tohoku Electric Power Co., admitted last Friday that they had failed to report defects in reactor piping to the Nuclear and Industrial Safety Agency.

All this has confirmed the public suspicion raised by the Tepco coverups that similar attempts might have been made by other power companies. Now it seems reasonably clear that a tendency to tolerate minor faults in reactor systems is fairly widespread in the nuclear power industry. Moreover, as a Tepco investigation has found, coverups have been made “systematically for many years.”

Power companies enjoy de facto regional monopoly, so competition is restricted. Prices are set under a special cost formula that effectively guarantees long-term profit stability. As public-interest companies, they naturally have an obligation to maintain higher standards of corporate ethics and to ensure strict adherence to laws and regulations. On the basis of this, they must build a long-term relationship of trust and confidence vis-a-vis consumers and users. The coverup scandals have shattered that confidence.

Power companies are the latest additions to the long and lengthening list of corporate scandals in this country. The list includes the Snow Brand group (beef mislabeling), Nippon Meat Packers (ditto) and Mitsui & Co. (corruption involving a foreign-aid project). The fact that all these companies, including Tepco, are leaders of Japanese industry indicates that there is something amiss with Japan’s corporate world.

Particularly worrying is lapses in nuclear safety management. The structural faults that have come to light, such as cracks in reactor shrouds, may not cause immediate problems, but one of the common lessons of accidents is that minor defects, unless rectified in time, can lead to disasters. In reality, though, the safety problem appears to have received less attention than it deserved at practically all levels of the nuclear power program, including plant managers and frontline workers.

The 180-page investigative report from Tepco hints at some of the underlying problems that may have contributed to the coverups: a play-it-safe mentality, a tendency toward self-protection, cronyism and a misguided allegiance to the company. These negative aspects of corporate culture may have demoralized the entire organization and weakened its respect for laws. Admittedly, these are the problems that also plague some of the nation’s big-name corporations. The Mizuho Financial Group, for one, exposed similar weaknesses in its inept handling of the computer system breakdown that occurred soon after its debut in April. For all the talk of transparency, it appears that many Japanese companies still live in a closed world. In such inward-looking organizations, employees are not free to speak up, and negative corporate information is kept secret.

Encouragingly, Tepco is now trying to turn its misfortune into a blessing. Having published a candid self-critique, the company has announced that it will become a more open organization that is fully accountable for its conduct. Thus it has set an example for other companies that also need to open up. The hard part is to change the bad habits that stand in the way of reform, particularly the conservative mind-set of individual employees.

Meanwhile, the internal investigation, which remains incomplete, needs to be continued to provide a fuller accounting of what happened. Some important but subtle questions have been left unanswered, such as who ordered the coverups, and when. However, if experience is any guide, it will be difficult to unravel such specific questions of responsibility.

There is another significant aspect to the Tepco scandal: It came to light thanks to tips given by a former employee of a related U.S. company. Whistle-blowing is becoming something of a trend in corporate Japan; some recent scandals were also revealed by such enlightened insiders. It is a pity that were it not for whistle-blowers, such corporate abuses and mistakes would have been kept under wraps.

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