Pollution's High Price

Japan's Chisso Corp. sold $200 million worth of petrochemicals last year, is effectively managed, and should by any standards be doing well. But Chisso may soon have to shut down. It is one of several major Japanese businesses that have run afoul of a three-year-old government principle: companies that cause individuals any physical harm or financial loss through environmental pollution must compensate them.

Chisso's trouble began in 1950 after it opened in the fishing port of Minamata an acetaldehyde factory that began to discharge effluents into Minamata Bay. One of the waste substances: a highly toxic methyl mercury compound that was passed up the food chain from tiny organisms to small fish to the larger fish that comprise a substantial part of the townspeople's diet. By 1953 the mercury contamination had reached a dangerous level in some people, who began to suffer the crippling symptoms of what is now referred to as Minamata disease. Howling in pain and racked by convulsions, 106 citizens of Minamata died over a period of a decade, and many other victims became deaf, blind or insane. In 1963, after scientists had determined that mercury poisoning was to blame, the government banned fishing in the bay and ordered Chisso to remove the pollutant from the plant's wastes. The company was soon able to stop using mercury in its industrial processes.

An even harder problem was how to compensate the victims of Minamata disease. Many sufferers had been given court-ordered awards by Chisso in 1970. But under what has come to be known as the three-P policy (polluters pay for pollution), another group of victims sued for more money, and the courts upheld the suit. As a result, Chisso so far has had to pay the staggering sum of $67.3 million to 793 victims. As the less serious cases are identified--and there are 2,700 suspected victims still to be given official medical examinations--Chisso will be liable for compensation payments of as much as $60,000 per person. Says a contrite executive: "We have to do our utmost to pay up, no matter what."

Public Outcry. That could break Chisso. Because of the compensation payments, the company lost $12 million last year. Indeed, it has been able to remain in business only by selling $40 million worth of its $250 million total assets and persuading banks to defer for up to three years interest and amortization payments on $90 million in outstanding loans. To add to Chisso's troubles, another of its plants was partially destroyed by an explosion in 1973. Company officials last year quietly asked the Japanese government's development bank for a low-interest $13 million loan to repair the factory. But when news of the request became known in January, there was a public outcry.

"Pollution is an act akin to murder," charged a government environmental officer, who argued that taxpayers' money should not be used to bail out an industrial polluter. Jun Ui, Japan's leading environmentalist, goes further: if Chisso gets the loan, he says, a wrong precedent would be set. He fears that the government may be asked for low-interest loans by other polluters--Mitsubishi Oil Co., for example, which was responsible for a serious oil spill at the Mizushima industrial complex (TIME, Jan. 20).

But Prime Minister Takeo Miki points out that "Chisso wants the loan to pay not for the consequences of pollution but to repair its damaged production system." Then, too, says Labor Leader Kaoru Ohta, if Chisso were to go bankrupt, there would be no compensation for the remaining Minamata victims--nor would there be jobs for the company's 1,500 workers and those of its subcontractors. "PPP is fine with me," Ohta says, "but the government should grant that loan." Even if it does, however, Chisso for a long time to come will have to contend with a fourth P: profitlessness.

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