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Japanese 7-Eleven’s Battle Typifies Post-Tsunami Struggle

Thursday, May 26th, 2011
7-11

For Seven & i Holdings Co., the first priority after the earthquake and tsunami of March 11 devastated much of the coastal region of northeastern Japan was to see what happened to several hundred of its 7-Eleven stores in hard-hit towns and villages and to look for survivors among staff members and customers.

In the first days after the tsunami, the company estimated that 40 stores were entirely or half-destroyed and that perhaps 16 owners of 7-Eleven franchises were dead or missing.

One week after the tsunami, 350 of 7-Eleven’s 13,219 stores in Japan were still closed, including about 100 that had to be evacuated due to their proximity to the beleaguered Fukushima Dai-ichi nuclear power plant. In the rush among people from the region to stock up on bottled water, tissue and other items, however, total sales in that period actually rose by 20 percent. A subsidiary chain of grocery stores, York-Benimaru, may have suffered more, evacuating 19 stores located near the plant. All told, York-Benimaru had to close 68 of its 170 stores.

The troubles afflicting the 7-Eleven and York-Benimaru stores were shared by thousands of companies, including motor vehicles and electronics plants operating in areas affected by the earthquake and tsunami and then by fear of radiation. With only 80 percent of the normal power supply available in greater Tokyo and the northern prefectures, manufacturers had to suspend or reduce operations and scale down supply networks while waiting for power to resume and repair facilities. Jun Saito, director-general of economic analysis for the cabinet, estimated recovery from the disaster would take at least three years. He said it was uncertain when the government could “relax constraints” on power supply and how much it would cost to repair damages estimated at more than US$300 billion. The good news, he said, was that the reconstruction effort could help to make up for the losses.

The response of Seven & i Holdings typified that of companies large and small as they coped with the terrible reality of disaster. At the Seven & i headquarters in Tokyo, Miyaji Nobuyuki, a public relations director, told me that five or six of the ten centers that produce fast-food items for the region were inundated by the tsunami. In their place, centers in other prefectures were producing more items to make up the difference. Deliveries initially were impeded by lack of gasoline and closed roads, and the small trucks that carry the daily deliveries of spiced rice balls, sandwiches, boxed cold meals called “obento” and other items could not get into difficult areas, but soon roads opened and gasoline became more available. The heaviest damage was in Sendai City, where about 100 7-Eleven stores were damaged. Most of the workers and customers got out in time to beat the tsunami. “When the earthquake hit, they walked into high buildings,” said Nobuyuki.

“In regard to items that are especially important to daily life, we are supplying more than usual,” said a company statement. “However, demand is concentrated on stores in certain regions, and as a result there are still locations where supply of these items is inadequate.” The company also said it was cutting electricity consumption and “taking a variety of steps to save electricity as a member of local communities.” The share price of Seven & i Holdings was down from ¥2,300 before the tsunami to ¥2,000 a share when I saw him ten day later.

Much was left to the individual franchise owners and managers. “The group’s stores are closely linked to the daily lives of customers in each region,” said another statement provided by Nobuyuki, “and the group is working to maintain operations and to rapidly reopen stores that have closed.” However, said the statement, “to respond to electricity shortages as a member of the local community, each store is implementing a variety of measures to reduce electricity consumption.” Seven & i Holdings was also sending emergency supplies to centers housing refugees forced to flee their homes.

Just as all appeared “under control” at the Fukuhima Dai-ichi power plant, however, new shocks confounded scores of engineers and technicians attempting to cool down the reactors before meltdown could shoot radioactive ashes and gases into the atmosphere. Officials and ordinary citizens alike came to expect the unexpected. An uncomfortable feeling swept the country when the International Atomic Energy Agency reported radiation levels picked up in a town 20 kilometers from the plant. That’s right on the edge of the danger zone within which authorities were telling people to leave or at least stay inside, wash carefully and wear protective clothing.

On top of that came unsettling word that traces of radiation had spread to the same waters that had inundated the region on March 11. Vapors from the plant and water running off the soil might affect sea life on which thousands made a living and millions dined in a society accustomed to eating raw seafood. Seawater samples reportedly showed levels of radiation 126.7 times higher than the legal limit. The ministry of Health, Labor and Welfare reported “radioactive contaminants,” including high levels of cesium and a trace of cobalt-58 in sea water collected from a drain near the plant. The ministry ordered two prefectures to extend monitoring plans for examining seafood. Officials persisted in saying a person would have to dine out on seafood and veggies from around the plant for a year before suffering ill effects.

Nobody seemed totally confident after a sample of water from a treatment plant in Tokyo showed radiation sufficiently high to be unsafe for infants below the age of one. Rain clouds drifting over metropolitan Tokyo were blamed for carrying radioactive substances. Mothers, on hearing the news, scurried at once to supermarkets and convenience stores. “All the bottled water was gone immediately,” said Azusa Imamura after a quick shopping trip in her crowded neighborhood. “Nobody is sure of anything.” Least confident were mothers with infants as they wondered whether to feed them with bottled or breast milk. “We are confused,” said one young woman with a baby. “We hear there’s radiation in milk, but if you breast-feed a baby, maybe the water in your system will also get into the milk.” The deepest fear was that of thyroid cancer, to which children and infants are far more susceptible than adults.

As the anxiety level heightened, Chief Cabinet Secretary Yukio Edano said authorities had put out notices of increased radiation in vegetables as well as water in metropolitan Tokyo as merely a precaution. He assured the nation, on television, that Japan adhered to “strict safety standards” – more so than those of other nations. He had the support of Dr. Robert Peter Gale, formerly with the University of California in Los Angeles, now a visiting professor at Imperial College, London, with widespread experience in studying nuclear disasters. People in the Fukushima area “need guidance regarding risks,” he said in a visit to Tokyo. “People are starting to be more comfortable in dealing with radiation.” Radioactive iodine-131 has a “half life” of eight days, he said, and within 80 days all the radioactivity would disappear.

Concerns ratcheted up again, however, as black smoke suddenly burst from the troublesome number three unit at the Fukushima plant, forcing evacuation of workers attempting to bring the reactor to what is called a “cold shutdown” by pumping water onto the reactor and the cooling pond for spent fuel rods. “We did not see fire,” said Hidehiko Nishiyama, deputy directorgeneral of the nuclear safety agency. “The smoke is now being subdued. We are not sure of the cause.” An hour later, workers were able to return after confirming the level of radioactivity. Incredibly, however, many hours after the smoke had dissipated, he still did not know what it was that was smoking or why.

The news got worse when two workers had to be hospitalized with skin burns suffered when water with radioactivity 10,000 times the normal level leaked into their boots as they were wading in the basement of the turbine building of the number three unit. Prime Minister Naoto Kan said the outcome of efforts to shut down the reactors at Fukushima was “very unpredictable” while the number of dead and missing from the earthquake and tsunami neared 30,000 and 250,000 people remained homeless. Many of those were consigned to ill-heated shelters, existing on handouts of rice and instant noodles.

An aura of mystery hung over the results of the massive operation to close the plant and seal the leaks. While “keeping the situation from turning worse,” said Edano, whose role as cabinet secretary made him the chief government spokesman, “we still cannot be optimistic.” No happy ending was in sight as engineers and technicians battled to run whatever was left of the original equipment or whatever they had to replace it. As if the earthquake and tsunami were not enough, they had to cope with far more damage created by explosions that ripped through the roof and walls of the plant. Firemen pumped thousands of tons of sea water onto the reactors and cooling systems to stop a meltdown from sending radioactive clouds far and wide.

The Tokyo Electric Power Company, under fire for having failed to make certain all back-up equipment was working well before March 11, was heavily criticized for failing to carry out inspections, to cooperate fully with the government – or even to provide adequate protective gear for everyone entering the facility. Nishiyama at the nuclear safety agency noted “problems in the way work was conducted,” and Edano urged TEPCO “to provide information to the government more promptly.” Nonetheless, as sole operator of the plant, TEPCO remained at the forefront of the complex operation to revive, repair or replace equipment needed to shut down the reactors.

Of more immediate importance for average citizens was the safety of all they had to eat and drink. Prime Minister Kan stoked concerns by ordering the governor of Fukushima to apply “measures not to distribute and/or consume” a wide range of leafy vegetables. Food business operators in a neighboring prefecture were also ordered “not to distribute any fresh raw milk and parsley.”

The fear was that experts would never figure out all that was wrong, much less come up with permanent solutions for avoiding disaster “next time.” Just ask Masahige Sugiyama, who as a small boy was staying with family friends outside Hiroshima when his mother and father were irradiated in the atomic bombing of the city on August 6, 1945. “I never saw them again,” he told me when I stopped off with a volunteer worker at the tent where he lives in a small city park populated by scores of aged, indigent people, the flotsam of one of the world’s richest economies. “I never knew them.”

Beneath an outward appearance of calm, lack of confidence in anyone’s ability to deal with the nuclear crisis rose even as officials claimed limited success in cooling down the reactors with sea water and restoring power to the coolant facilities. “Why,” asked a waitress in a coffee shop, “is the American government saying people within 60 kilometers of the plant should leave and our own government is saying only people within 30 kilometers should leave.” Unaccustomed though Japanese are to accepting the American over the Japanese version in most matters, she said this time she believed the Americans were probably right. “The Japanese government cannot tell the truth. They are afraid if they do people will get panicked.”

Azusa Imamura, accompanying me among the narrow streets and alleys of the historically poor district by the Sumida River, on the northern edge of the city, was even more skeptical about government assurances. Why, she wanted to know, were reports carried by the government’s NHK network so different from what she was seeing on CNN and BBC. “NHK is for ordinary people with no news from foreign networks,” she said. “BBC and CNN say the news is more serious. Our government is afraid many people will panic. Then it will be hard to calm them down. I don’t like the way the government is acting. I’m afraid the contamination will get worse.”

The greatest immediate concern was for the workers inside the power plant, risking immediate and long-term effects as they struggled to bring power to the systems needed to cool down the reactors. How impervious their white radiation-proof garb was is an open question after a number of them were reported injured. “The people working inside the plant must be very brave,” said Imamura. “I’m very thankful for them but very worried.”

Along the banks of the Sumida River, in a vinyl-roofed hut that he had set up while eking out a living selling empty soft-drink and beer cans to recycling companies, Fumiyo Higuchi had another fear – that of a tsunami capable of washing away all his worldly possessions. On March 11, the day the tsunami flooded cities and villages 250 kilometers northeast of Tokyo, the Sumida River rose above its banks three times. Standing on a walkway well above the river, Higuchi watched as his makeshift quarters were flooded. “I could see the river bottom as the water drained out,” he said. “Then suddenly the water came up. Now we’re worried about radiation.”

The fear level at the Fukushima plant increased after a grey cloud of smoke wafted from the damaged facilities into which fire trucks and helicopters had pumped thousands of tons of water to stop the number three reactor from completely melting down. Workers had to flee the site, the Tokyo Electric Power Company reported, for fear of radioactivity -- and possibly an explosion similar to the blast that blew off the roof and a portion of the walls surrounding the reactor. In the face of official pronouncements of carefully qualified optimism, the industry minister, Banri Kaieda, found it “difficult to say that things are showing progress.”

Always, however, the bureaucracy looked for a silver lining in the clouds, mingling cautious optimism with realism. “We have come to a situation that is close to getting the situation under control,” said Tsuburo Fukuyama, deputy chief cabinet secretary. “However, we have repeatedly faced a situation that was not predicted. We must remain attentive in dealing with the situation.”

Careful avoidance of any declaration of success in containing the threat of radiation portended a long struggle to which there was no certain ending. Radiation might spread over a much wider area if the reactors that presented the worst problems did not cool down soon enough to stop radioactive substances from escaping into the high atmosphere and drifting in rain and wind currents over much wider swaths of territory, including the densely populated capital region and possibly much further afield.

Although far from panicked, many people preferred to buy foodstuffs from other regions after Prime Minister Kan ordered the governors of the four hardest hit prefectures to restrict shipments of milk and all varieties of vegetables in which samples had been “detected to exceed the limit” of radioactive material. Jeffrey Tudor, who worked for many years for a large Japanese company, said that he and his wife were no longer buying spinach from the entire region. “The Japanese are very careful about labeling,” he said. “We get vegetables from Shikoku,” the large island off the coast well south of here.

The mysterious smoke rising from the number three reactor showed how uncertain was the recovery. Always, the answer to questions about what would happen next remained painfully unclear. “We consider the cooling is the most important matter we have to deal with,” said Fukuyama. No, “It would not be appropriate to say how long it will be.”

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