【News】 Australian NGO sends open letter to highlight JERA’s governance issues

On October 22, Australian environmental NGO Market Forces (MF) announced that it had sent an open letter to the Japan Exchange Group (JPX) and JERA’s major institutional investors to point out that JERA, Japan’s largest power utility, is in violation of Japan’s Corporate Governance Code due to its neglecting of stakeholders in local communities impacted by its fossil fuel development projects in Japan and in other countries.

This letter points out that although JERA has publicly stated its commitment to engagement and “proactive communication” with stakeholders as part of its corporate social responsibility, its failure to deliver on this commitment exemplifies a troubling disconnect between the company’s statements and actions. This is contrary to the General Principles of Japan’s Corporate Governance Code, which states under “Appropriate Cooperation with Stakeholders Other Than Shareholders” that “the rights and positions of stakeholders are respected and sound business ethics are ensured“.

The open letter emphasizes that JERA did not respond to requests for meetings or interviews by citizens impacted by its projects such as the Barossa gas project in the Tiwi Islands, Australia; the Matarbari Summit LNG power plant and Matarbari LNG onshore terminal project in Bangladesh; the Freeport Haven Project in Texas, USA; the JERA Taketoyo Thermal Power Station in Aichi Prefecture, Japan; and fossil gas expansion projects in the Philippines. Numerous domestic and international civil society organizations have expressed criticisms regarding JERA’s problematic handling of these cases.

The JERA Taketoyo Thermal Power Station, one of the projects mentioned in the letter, was responsible for an explosion in January 2024 that unsettled nearby residents. JERA held an explanatory meeting that May but has not held any other explanatory meetings for local residents since announcing new accident prevention measures on September 3.

The Taketoyo Thermal Power Station (Unit 5) has had four accidents since it began operation in August 2022. Many written questions sent to JERA by local citizens have gone unanswered, and those that were answered came late and with unsatisfactory answers. Residents were also not satisfied with the explanations given at the May 2024 explanatory meeting, and many residents remain opposed to the restart of Taketoyo Unit 5.

Charred wall of turbine building after explosion

Large-scale coal depot located near residential houses just across the street

MF’s open letter reveals that JERA has been avoiding accountability by progressing with its projects while refusing engagement and communication with local residents in Japan and abroad. MF calls for engagement with JERA, pointing out that JPX and investors may be alarmed by how JERA’s attitude may not only damage the company’s reputation (reputational risk), but also lead to financial risk as well.

JERA, as the largest electric power utility in Japan, should be responding to these issues with urgency and acting with sincerity toward local residents and their concerns.

Open Letter

Full text of Open Letter to JPX
Open Letter to JPX and Investors
Governance Concerns at JERA: Neglecting Community Stakeholder Engagement（PDF）

Press Release: Communities and CSOs worldwide send an open letter to JPX and investors on JERA’s disregard for community stakeholders (Link)
Over the past year, JERA has rejected meeting requests from at least 10 community stakeholders (Link)