Taiwan has a humid, sub-tropical climate. People living in this country are not too au fait with how flammable powder can be. On Aug. 2 last year, following the Kaohsiung gas explosions, there was a powder explosion in a Taiwanese-run plant in Kunshan in China’s Jiangsu Province, a tragedy leaving 75 dead and 120 injured. The inferno at Formosa Fun Coast (八仙海岸) last Saturday was an accident waiting to happen and nearly 500 people were injured. Could it really be that we have learned nothing from previous tragedies and disasters about how accidents can be averted?
I first went to the US in 1985. I studied at the University of Minnesota Twin Cities. It was the first time I had ever encountered real snow. There was a well-known ice sculpture event in the area, held once every two years. It might have been an annual event, save for the prohibitive cost of insurance. Later, I got a car, which meant I needed a license and insurance. I signed a mountain of forms for the insurance, asking for my age, gender, smoker status, marital status and the make, age and color of my car.
The questions were to determine the premium I would have to pay should an accident occur. It is not like that in Taiwan; here you are just told how much you are to pay.
It is as if insurance in Taiwan is simply a financial consideration and not so much a risk management device. Insurance is flat rate and not linked to the risk presented by the person being insured. The taxpayer takes on the entire risk. The idea seems to be about spreading the cost of risk rather than about reducing or eliminating risk itself.
When applying for car insurance in Taiwan, they ask a handful of question. Is this really the most efficient way to allocate resources?
When the same premium asked of smokers and drinkers is paid by others who do not smoke or drink alcohol, then you are spreading the heightened risk of the former to the latter, and asking them to cough up the cash in the process. This is not only unfair and unjust, it is also a little backward.
In the US, nuclear power stations that fail to meet local emergency response requirements cannot be insured because no insurance company is going to risk liability in the event of a nuclear accident, so the plant has no choice but to cease operation until deemed safe.
Article 24 of the Nuclear Damage Compensation Act (核子損害賠償法) states that “the liability of a nuclear installation operator for nuclear damages arising out of each single nuclear incident shall be limited to NT$4.2 billion, [US$135 million].” Taiwan’s nuclear plants produce 40 terawatt-hours of electricity every year, selling each kilowatt hour for NT$3, which is NT$120 billion.
With that in mind, compensation limited to NT$4.2 billion starts to look pretty good. This is, then, the clearest evidence for the assertion by Taiwan Power Co (Taipower) and the Ministry of Economic Affairs that nuclear power is cheap. Although not as cheap, it seems, as life.
Last month, Fubon Financial Holding Co chairman Daniel Tsai (蔡明忠) topped the list of the nation’s richest people. There is a strong link between Fubon’s financial insurance and property holdings, and nuclear accidents.
If Fubon wants to guarantee sustainable and continued development in Taiwan, it should look at the nuclear power plants, nuclear waste storage facilities, nuclear power research and development, and international insurance industry standards on evaluating the risk of spent nuclear material and see which insurance companies in the world would be prepared to insure Taiwan’s nuclear power plants. Otherwise, should a nuclear disaster be visited upon the nation, Taiwan’s richest man may well become the poorest.
In terms of nuclear safety, Taiwan’s geography, Taipower’s management and government restrictions all present huge problems: They are the worst in the world.
The combined risk of 6 million people living within 80km of the nuclear power plants in New Taipei City’s Shihmen (石門) and Wanli (萬里) districts, the excessive amount of spent nuclear fuel stored in the plants’ spent fuel pools, the reckless attitude of Taiwanese politicians — in both opposition and government — in relation to the possibility of nuclear disasters and the lack of any nuclear disaster response capability or training at the local government level would be enough to bankrupt any insurance company in the world.
Had the government not capped compensation at NT$4.2 billion for insurance to the shoddy operation of nuclear power plants in Taiwan, nobody in the world would be able to take up running them.
The water park disaster should be a wake-up call for risk management in the insurance market.
All economic activity should be insured and this insurance should take into account liability for negligence, with no limit placed upon compensation payouts for damages. The alternative is for the entire population to bear the cost of each disaster that occurs.
Everything, from nuclear power plants to Cingjing Farm (清境農場) to solar power generation plants to wind power plants to the Taipei Dome and the Taichung Bus Rapid Transit system should be insured.
If they are not, it is difficult to know exactly what risk they present. We need to have no ceiling and to allow compensation for negligence and not to allow government officials to conspire to defraud us all.
Jay Fang is a member of the Taipei Clean Government and Transparency Commission and chairman of the Green Consumers’ Foundation.
Translated by Paul Cooper
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