Ramseyer views the problem from a legal perspective, pointing to the “moral hazard” that arises when the potential losses of a catastrophe far exceed the value of a company. Like any private company, TEPCO’s liability was “capped by the value of its net assets.” Beyond that amount, the company would pay nothing, leaving them with “no incentive to limit damages beyond the value of those net assets. For risks beyond that point, they capture all the returns but bear none of the costs.” The result was that: “Tokyo Electric wildly underplayed the risk of a large earthquake and tsunami, but it did not underplay it carelessly or negligently. It underplayed it rationally — wildly, but rationally.”
And then there is simple human nature – there is a “threshold of concern,” says Howard Kunreuther, Wharton professor of operations and information management and co-director of the risk management and decision processes centre. “You have a lot of things to worry about, and often when you talk about what the chances are of an accident like this occurring, the general feeling is that it’s not going to happen to me,” he said. “That’s not just true in Japan, it’s true around the world.”
Despite the historical inevitability of the earthquake and tsunami, says Kunreuther, the earlier events happened so long ago that “there was a tendency to ignore them. They come out of the woodwork after an event, when everyone looks back and says, ‘Oh, we should have known this.’ But it’s not easy for people to make these decisions when there are so many things on their agenda.”
One way to combat this natural tendency, suggests Kunreuther, is to “stretch time horizons, so you don’t just think about the likelihood of this occurring next year but over a period of years”. The probability of an event, or series of events, increases considerably “when you look at the situation over the next 20 years instead of over the next year”. The geologic time scale involved in the Fukushima disaster – and the decades of radioactive contamination left in its wake – wake it seem prudent to extend the planning time horizon a good deal further in some cases.
The lesson is clear: to adequately prepare for worst-case situations, those in power need to look past cultural prejudices, short-sighted financial reasoning and their own limited experience. Whether the leaders of private companies worried about quarterly earnings or governments struggling to meet pressing needs can, or will, take this lesson to heart is an open question.
Asked what experience he found most challenging during March 11, Kenichi Shimomura, former deputy director general for public relations and chief spokesman for the Japan’s Prime Minister during the crisis, replied: “Being a leader without information.” It is easy, he said, to make decisions when a leader has all the necessary facts, “but information about the nuclear crisis was a luxury we did not have in the prime minister’s office at the time”.
The National Diet’s report explains that: “As the situation deteriorated and the planned government accident response systems failed to function, control of the emergency response was taken by the Kantei, with Prime Minister Kan at the centre of an ad hoc group of politicians, advisors and the chairman of the Nuclear and Industrial Safety Agency (NISA).”
While the government report states that this group did not include any experts, Shimomura told those attending the IGEL panel that there were in fact three top-ranked nuclear experts on hand. However, these experts were incapable of contributing to the decision-making, because of what Shimomura called not just a blackout of energy, but a “blackout of experts” who seemed incapable of providing any useful guidance.
“With each new report from the site, the Prime Minister would ask [the experts] what he should do … and each time they averted their eyes. Once the Prime Minister asked one of the scientific experts a question directly, but the expert was at a complete loss for words.” Even when asked to consult with his company, this expert was frozen in place until Shimomura literally walked up to him, and whispered into his ear that he should take out his cell phone and call his company for answers in the moment. “I was shocked,” said Shimomura. “He had lost his ability to make any decisions on his own.”
The problem was not just that Prime Minister Kan made these mistakes, but that no one in his inner circle questioned his decisions, offered other options or acted independently of the Kantei.
The prime minister also contributed to the confusion. Instead of helping to orchestrate the vast multitude of problems contributing to the disaster, Prime Minister Kan immersed himself in the minutiae of the nuclear plant. Shiozaki reports that Kan and his closest advisors brought a white board into his office and started “counting the number of trucks that were trying to arrive at the Fukushima nuclear plant, trying to check what types of electricity codes could be connected to the power plants”. In a vain attempt to gain direct knowledge of what was going on, Kan himself visited the Fukushima Daiichi plant, which “disrupted the chain of command and brought disorder to an already dire situation at the site,” according to the National Diet’s report.
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