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Cablegate: Japanese Morning Press Highlights 02/05/08

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UNCLAS SECTION 01 OF 12 TOKYO 000291

SIPDIS

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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 02/05/08


Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Child pornography issue:
4) Prime Minister Fukuda vows to toughen restrictions on child
pornography in Japan (Nikkei)
5) Justice Minister Hatoyama wants to make possession of child
pornography a crime (Yomiuri)

Defense and security affairs:
6) Iwakuni mayoralty race marks the third time that city voters have
been asked to make their judgment on the relocation of U.S. jets
from Atsugi (Yomiuri)
7) Yomiuri poll shows mayoralty race in Iwakuni is a dead heat
(Yomiuri)

Political agenda:
8) Asahi poll finds 55 PERCENT of public favor compromise between
ruling and opposition camps in the Diet over tax issue instead of
head-on clashes (Asahi)
9) LDP in disarray over revision of gasoline tax bill with
road-policy clique dead set against placing gasoline tax revenues
into general account budget (Yomiuri)
10) With Upper House controlled by opposition camp, if key
budget-related bills are not passed on time, nation's broadcast
system, NHK, could stop operating July 1 (Sankei)

11) Poisoned dumpling panic could lead to strict system of labeling
imported foods (Yomiuri)

12) Proposed restriction of foreign investments in airports may be
motivated by desire to protect jobs of retired bureaucrats (Tokyo
Shimbun)

13) Japanese flag-carrying ships to double in five years under new
plan linked to resource development and acquisition of rare metals
and other resources (Yomiuri)

14) Kyoto prefecture introduces new carbon gas bank scheme in which
household reductions are purchased by companies (Mainichi)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, & Tokyo Shimbun:
Pesticide detected inside unopened package of Chinese gyoza
dumplings

Nikkei:
Companies offering better pay, hours to attract retired workers

Sankei:
Tianyang Foods frozen foods used in lunches in 606 schools

Akahata:
DPJ lawmaker Yamashita pursues shortage of doctors and financial
difficulties in hospitals


TOKYO 00000291 002 OF 012


2) EDITORIALS

Asahi:
(1) Poisoned Chinese gyoza dumplings: Settlement is touchstone for
Japan and China
(2) New Thai government: Relapse not allowed

Mainichi:
(1) Ministry of Land, Infrastructure and Transport needs to provide
convincing explanations on introduction of restrictions on foreign
investment in airport management companies
(2) Let us support system to protect rights of elderly with
dementia

Yomiuri:
(1) Information disclosure: Measures to exclude fabrication urgently
needed
(2) Terrestrial digital broadcasting: Copyright protection and
user-friendliness important

Nikkei:
(1) Can Japanese banks find means of survival?
(2) Hotel ignored justice

Sankei:
(1) Poisonous Chinese gyoza dumplings: Close cooperation is
important to resolve the issue
(2) Albatross: We pray for success of relocation plan

Tokyo Shimbun:
(1) Microsoft's bid for Yahoo creating stir
(2) What does Prime Minister Fukuda want to do with Social Security
Council?

Akahata:
(1) Kyoto mayoral race: Best chance to refresh municipal
administration

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, February 4

NIKKEI (Page 2) (Full)
February 5, 2008

09:24
Met with Deputy Chief Cabinet Secretary Futahashi at the Kantei.

10:00
Upper House Budget Committee meeting.
12:32
Met with Futahashi at the Kantei.

13:00
Upper House Budget Committee meeting.

15:22
Met with Futahashi and Assistance Deputy Chief Cabinet Secretary
Saka, followed by Public Security Intelligence Agency Director
General Yanagi.

17:00

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LDP executive meeting in the Diet building.

17:40
Met with Afghan Foreign Minister Spanta. Deputy Assistant Chief
Cabinet Secretary Ando was present.

18:07
Met with National Police Agency Director General Yoshimura and
Security Bureau Director General Ikeda. Then met with Saka and
Cabinet Secretariat Director General Yamamoto and General Affairs
Ministry Administrative Management Bureau Director General Muraki.
Saka remained.

19:26
Arrived at the official residence.

4) Restrictions on child pornography to be tightened

NIKKEI (Page 2) (Full)
February 5, 2008

At a meeting yesterday of the Upper House Budget Committee, Prime
Minister Yasuo Fukuda referred to measures to address child
pornography and noted, "We must take some action." He thus indicated
he is positive about strengthening restrictions on child
pornography. At present, simple possession of child pornography is
not subject to regulation, but Justice Minister Kunio Hatoyama
emphasized, "Moving to punish it would be desirable." Hatoyama was
replying to a question raised by Haruko Arimura of the ruling
Liberal Democratic Party.

5) Justice minister mulling punishment for possession of child
pornography

YOMIURI (Page 2) (Full)
February 5, 2008

At a session yesterday of the Upper House Budget Committee, Justice
Minister Hatoyama revealed his intention to consider revising the
Law for Punishing Acts Related to Child Prostitution and Child
Pornography by setting punishments even for simple possession of
child pornography without any intention of selling or distributing
it.

Hatoyama noted: "Child pornography is closely intertwined with
sexual abuse. Stricter punishment will be desirable. I think there
is no problem about setting a punishment (for simple possession)."
Prime Minister Fukuda, as well, pointed out: "A society that is
tolerant of child pornography is not at all a society that we can be
proud of." They were replying to a question posed by Haruko Arimura
of the ruling Liberal Democratic Party.

When the law drafted by a cross-party group of lawmakers was enacted
in 1999, whether to set a stipulation banning simple possession of
child pornography was discussed, but because many were opposed to
such a stipulation as a violation of privacy, that stipulation was
not included in the law.

6) Iwakuni citizens to make decision for third time on relocation of
U.S. air wing

YOMIURI (Page 4) (Abridged slightly)

TOKYO 00000291 004 OF 012


February 5, 2008

A fierce battle is underway for the Feb. 10 mayoral election of
Iwakuni, Yamaguchi Prefecture, between former LDP House of
Representatives member Yoshihiko Fukuda, who supports the
government's plan to relocate a carrier-based air wing to the U.S.
Marine air station in the city, and former Mayor Katsusuke Ihara,
who opposes the plan. The outcome of the race in Iwakuni, a city of
150,000, is a matter of great concern to the government and ruling
parties, for it might affect the overall issue of U.S. force
realignment.

The governments of Japan and the United States are in an agreement
to relocate 59 aircraft, including FA-18s, to the Iwakuni base from
the U.S. Naval Air Facility Atsugi in Kanagawa Prefecture by 2014.
The Iwakuni base, along with Futenma Air Station in Okinawa, is a
symbol of the realignment of U.S. forces in Japan.

Although a mayor has no legal authority to refuse relocation, the
government is alarmed, with one person saying, "A victory by Ihara
might give the impression that the realignment issue is not
proceeding smoothly."

Fukuda's resignation as a Lower House member will also result in a
by-election in the Yamaguchi No. 2 constituency for April 27, the
first national election under the Fukuda administration. The mayoral
race is a prelude to the by-election.

The LDP effectively backs Fukuda, and the major opposition
Democratic Party of Japan supports Ihara. The two camps, referring
to themselves as citizens' parties, plan to refrain from
eye-catching activities, such as stumping for the candidates by
party executives.

Yesterday, the day after the official campaign for the race kicked
off, Fukuda raised his voice at a restaurant parking lot overlooking
the Iwakuni base, saying: "This area has been suffering from noise.
I'll promise you that once I'm elected, I will negotiate with the
government on a review of the flight paths and shortening flight
times."

Fukuda's strategy is to focus on revitalizing the local economy and
fiscal issues, putting many conditions regarding the base issue to
the central government. Lined with shuttered shops and restaurants,
shopping streets near JR Iwakuni Station are nearly deserted. The
city has over 100 billion yen in debt that bears 7 million yen in
interest a day.

Mainly backed by municipal assemblymen and business circles tolerant
of the relocation plan, the Fukuda camp has repeatedly held small
rallies in an effort to translate economic issues into votes. LDP
lawmakers have also visited corporations behind the scenes. A large
portion of New Komeito supporters, believed to number 7,000 to
8,000, are also expected to vote for Fukuda.

Iwakuni is going to the polls for the third time over the relocation
issue. The anti-relocation group won a March 2006 municipal
referendum and the April 2006 mayoral race. Ihara remained opposed
to the relocation on the strength of those results. In reaction, the
government has frozen 3.5 billion yen in subsidies in fiscal 2007
for the construction of a new city hall. The government has also
removed Iwakuni from the list of subsidies to local governments with

TOKYO 00000291 005 OF 012


greater base-hosting burdens.

Ihara yesterday mainly campaigned in Iwakuni suburbs, arguing,
"Whether the base will become bigger will be determined by this
election. A bigger base will make your life harder."

The Ihara camp, which is trying to rally together anti-relocation
citizens, is alarmed at reports of a close contest, with one
supporter saying: "The atmosphere is clearly different from the
previous race, in which we achieved an overwhelming victory."

Some are concerned about the division. An elderly man said with
alarm, "While the two groups are locking horns, young people will
leave the city, because the economy is in poor shape."

7) Iwakuni race a dead heat

YOMIURI (Page 2) (Abridged)
February 5, 2008

The city of Iwakuni in Yamaguchi Prefecture will elect its new mayor
on Feb. 10. Candidates are now campaigning, and the Yomiuri Shimbun
polled the city's voting population and analyzed the race. Yoshihiko
Fukuda, 37, a new face and a former member of the House of
Representatives, and former Mayor Katsusuke Ihara, aiming for a
second term, are running in a dead heat. One out of every four
voters remains undecided, so the situation is fluid.

The mayoral election has kicked off due to Ihara's resignation as
mayor. Ihara is opposed to accepting the proposed redeployment of
U.S. carrier-borne aircraft to the U.S. Marine Corps' Iwakuni base
along with the realignment of U.S. forces in Japan. Meanwhile,
Fukuda is flexible about accepting carrier-borne aircraft to the
base. The election is a one-on-one duel between the two.

In the survey, local respondents were asked if they supported the
Japan-U.S. agreement on the planned redeployment of U.S.
carrier-borne aircraft to Iwakuni. In response, 15 PERCENT answered
"yes," and 31 PERCENT said "yes, if the government revises the plan
to reflect the opinion of local communities." Meanwhile, "no"
accounted for 47 PERCENT .

The survey was conducted Feb. 3-4 on a random digit dialing basis
after the election was officially announced. A total of 1,251
households were found to have one or more eligible voters, and
answers were obtained from 815 persons (65 PERCENT ).

8) Poll: 55 PERCENT want ruling, opposition blocs to compromise on
gas tax

ASAHI (Page 1) (Abridged)
February 5, 2008

The Asahi Shimbun conducted a telephone-based nationwide public
opinion survey on Feb. 2-3, in which respondents were asked if they
thought the ruling and opposition parties should compromise on a
bill revising the Special Taxation Measures Law to extend the
current rate of temporary taxation on gasoline for another 10 years.
In response to this question, 55 PERCENT answered "yes," with 33
PERCENT saying "no." As seen from these figures, those who want the
ruling and opposition parties to give way to each other
substantially outnumbered those who are negative about that.

TOKYO 00000291 006 OF 012


Respondents were also asked if they thought road-related taxation
should be continued. To this question, "yes" accounted for only 27
PERCENT , with "no" at 60 PERCENT . In the meantime, 54 PERCENT
support the idea of using road-related tax revenues for other
purposes. The cabinet support rate was 35 PERCENT , leveling off
from the 34 PERCENT rating in the last survey conducted Jan.
11-12.

In the breakdown of public support for political parties, the ruling
Liberal Democratic Party stood at 30 PERCENT (26 PERCENT in the
January survey), with the leading opposition Democratic Party of
Japan (Minshuto) at 24 PERCENT (25 PERCENT in the January survey).
Respondents were further asked which political party they would vote
for in their proportional representation blocs if a general election
were held now. To this question, 30 PERCENT chose the LDP, with 32
PERCENT opting for the DPJ.

9) LDP in disarray over revision of gasoline tax bill, with LDP
Upper House positive, road construction clique negative

YOMIURI (Page 4) (Full)
February 5, 2008

The ruling Liberal Democratic Party (LDP) leadership has run into
trouble in dealing with the issue of modifying a bill to amend the
Special Taxation Measures Law that would retain the current
provisional tax for gasoline and other road-related taxes. The
reason is that members of the LDP caucus in the House of Councillors
are calling for consultations with the main Democratic Party of
Japan (DPJ or Minshuto) on revising the bill in order to make sure
the legislation is enacted by the end of the current fiscal year.
However, LDP lawmakers with ties to road construction interests are
opposed to tinkering with the bill.

Secretary General Bunmei Ibuki stated in a press conference Feb. 1:

SIPDIS
"We have obtained the party's approval of the present government's
bill. We have no intention to seek a revision of the bill."

The agreement between the ruling and opposition parties through the
good offices of the leaders of the two Diet houses calls for: 1)
reaching a certain conclusion by the end of the fiscal year; and 2)
revising those provisions on which each party can agree. The DPJ,
however, has asserted that the party did not agree to take a vote on
the bill within the current fiscal year, and it is taking a stance
of responding to revising the bill.

The LDP Upper House caucus has sought a revision of the bill in the
House of Representatives, citing that the DPJ considers a revision
of the bill a precondition for it to respond to putting the bill to
a vote before the end of March.

Election Committee Chairman Makoto Koga, a leader of the road
construction clique in the Diet, expressed displeasure with revising
the bill, saying, "It is extremely regrettable that the issue of
revising the bill is going ahead."

The dominant view in the LDP is that the party will not be able to
accept the idea of abolishing the tax revenue for road construction
and reducing the provisional tax rates even if it agrees to
revisions in the bill. The focus will be on whether to extend by a
decade the provisional tax rates.


TOKYO 00000291 007 OF 012


The largest opposition party is, however, trying to shift its
strategy of abolishing the provisional tax for gasoline and cutting
gasoline prices. The reason is that it does not appear likely that
the party will force to abolish the provisional tax rates since it
accepted the mediation by the Lower House speaker and Upper House
president. Appearing on an NHK talk show on Feb. 3, Vice President
Katsuya Okada underscored: "What we want to place top priority is to
integrate the special account of road-related taxes into the general
account. As a result, we want to reduce the provisional tax rates."
He made this remark to shake up the LDP since there is a view in the
party favoring the plan of shifting the revenues for road projects
to the general budget.

10) NHK may suspend broadcasting on July 1 in aftermath of battle
between ruling and opposition blocs in divided Diet if budget bill
fails to get approval from opposition parties

SANKEI (Page 5) (Abridged)
February 5, 2008

Personnel selection for key positions requiring Diet approval, such
as the Bank of Japan (BOJ) governor, is drawing attention in the
divided Diet where the ruling bloc controls the Lower House but the
Upper House is under the opposition bloc's control. Besides, what
will happen to a 2008 budget bill for NHK (Japan Broadcasting
Corp.), a pending problem, is also drawing attention. The NHK budget
bill needs to be approved by both the chambers of the Diet, but
because the provision stipulating the Lower House's decision
overrides a bill rejected by the Upper House is not applied to this
budget bill as well as personnel selection requiring Diet approval,
a worst-case scenario is that if the NHK budget bill fails to be
approved by the Upper House, NHK may be forced to stop broadcasting
on July 1. Although such a worst-case scenario is expected to be
somehow avoided, the NHK budget bill is unlikely to be approved so
smoothly, given a series of scandals involving NHK personnel.

Under the Broadcast Law, NHK is obligated to obtain Diet approval
for its budget bill as well as its business plans by the end of
March every year. Even if the NHK budget bill is not approved (by
the end of March), a provisional budget for NHK will be implemented
for three months until the end of June unlike annual revenue-related
bills (that must be passed by a fixed date). But if that happens,
NHK will be saddled with a number of restrictions.

During the implementation of the provisional budget, NHK will have
difficulty to implement new projects and it will also find it
impossible to hike the television reception fee. Also, NHK will be
forced to suspend its ongoing project for constructing terrestrial
digital broadcasting relay stations; as a result, there will be a
significant impact on a full transition to terrestrial digital
broadcasting in the target year of 2011.

Furthermore, NHK will find it difficult to produce grand-scale
programs, such as "NHK special," and to conclude contracts on talent
charges.

If the NHK budget bill is not approved at the end of June, more
serious effects would arise The Broadcast Law has no rules about
budget compilation after the provisional budget expires, and NHK is
highly likely to be unable to collect the television reception
fees.


TOKYO 00000291 008 OF 012


Although there is no law banning broadcasting if the budget bill is
not approved, NHK may be forced to suspend broadcasting.

According to a senior ruling Liberal Democratic Party (LDP) member,
the tide of opinion in the ruling bloc is that no opposition parties
will drive NHK into suspending broadcasting. But in March 2005, the
opposition parties, namely, the Democratic Party of Japan (DPJ), the
Japanese Communist Party (JCP), and the Social Democratic Party
(SDP) were opposed to approving the 2005 NHK budget bill on the
grounds of a former NHK chief producer having swindled money out of
the program production budget and the problem of nonpayment of the
television reception fees.

NHK also has suffered internal dissension even now after its
Chairman resigned in January 2005. In last December, some executive
committee members "revolted" openly against Executive Committee
Chairman Shigetaka Komori. In January, former NHK Chairman Genichi
Hashimoto resigned to take the responsibility for the scandal that
some NHK employees engaged in insider stock trading. Former Asahi
Breweries Chairman Shigeo Fukuchi became new chairman and revamped
the structures in the company, but some in the opposition bloc are
still unhappy with the current NHK management. Depending on
circumstances, NHK may be forced to drastically revise the initial
budget bill.

11) New law regulating food labeling to be enacted: Government
considering mandating labeling imported ingredients

YOMIURI (Page 1) (Full)
February 5, 2008

The government yesterday decided to establish a food labeling law by
unifying food labeling regulations stipulated under several laws,
including the Food Hygiene Law. The aim is to adopt an
easy-to-understand labeling system for expiry dates, country of
origin and other information. The move is in response to a flurry of
false food labeling incidents. The government wants to include in
the envisaged law a unified expiry label, by unifying two different
standards -- an eat-by freshness date and a use-by date, a stricter
regulation on country-of-origin labels and the confiscating of
illegally earned profits from companies that use false information.
It plans to submit a bill to the next regular Diet session at the
earliest.

There are five laws regulating food-labeling -- the Food Hygiene
Law, the Japan Agricultural Standards, the Unfair Competition
Prevention Law, the Law against Unjustifiable Premiums and
Misleading Representations and the Measurement Law. The Ministry of
Health, Labor and Welfare, the Ministry of Agriculture, Forestry and
Fisheries, the Ministry of Economy, Trade and Industry and the Fair
Trade Commission have jurisdiction on those laws. Regarding this
situation, some have noted that there is bureaucratic sectionalism
and that cooperation among concerned government agencies is not
smooth.

The National Life Advisory Council, a panel reporting to Prime
Minister Fukuda, who advocates attaching importance to consumers, is
now looking into the possibility of enacting a new law. The
government will enter a full-fledged legislative process, based on a
report the panel will submit in late March.

There are currently two labels to indicate expiration dates --

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use-by date for perishable food items, such as packed lunches and
prepared foods, and eat-by freshness date for confectioneries, which
have less possibility of causing food poisoning, though their taste
deteriorates after the expiration date has passed. Consumers have
complained that such a dual labeling system is difficult to
understand. The panel is now discussing the issue with the
possibility of unifying the two standards into a use-by date in
order to give priority to safety.

Concerning country-of-origin labeling, the panel will look into the
possibility of mandating the labeling of country of origin of raw
materials used for processed food products. JAS does not obligate
country-of-origin labeling for raw materials, if they weigh less
than half the total weight of the processed food product. In the
food poisoning case from Chinese-made gyoza dumplings, it was found
that pouch-packed-foods using materials produced by Tianyang Food
Processing, the maker of the gyoza dumplings in question, had no
label indicating that the products contain Chinese ingredients,
indicating that key information has not been provided to consumers.

The government will also consider introducing a regulation for
confiscating profits from companies that use false information, by
estimating profits the companies in question made unduly.

12) Transport Ministry eyes restrictions on foreign ownership of
airports -- aiming to secure postretirement posts?

TOKYO SHIMBUN (Page 26) (Excerpts)
February 25, 2008

The Land, Infrastructure, and Transport Ministry is studying the
possibility of limiting foreign stakes in the operators of major
facilities at Haneda and Narita airports. Some argue that it could
hamper the Fukuda administration's policy of expediting outside
investment in Japan. Under such a situation, the ministry hopes to
have a bill amending the Airport Development Law approved by the
cabinet on Feb. 8. The bill includes the proposed restrictions. Many
in the government and the Liberal Democratic Party criticize the
proposed rules as intended to help bureaucrats secure their
interests.

A government source grumbled: "What officials in the Transport
Ministry want to protect by introducing restrictions are their
lucrative postretirement positions, that is, executive posts at
companies linked to both Haneda and Narita airports.

The Koizumi administration decided in a cabinet meeting in 2002 to
turn the predecessor of Narita International Airport Corp., which
operates Narita Airport, into a special corporation in the process
of privatizing it in the future. In 2004, the administration
transformed the company into a special corporation financed 100
PERCENT by the government. The government is aiming to privatize it
sometime after next fiscal year. But the ministry is concerned that
it might lose its important retirement posts if foreign firms
acquire large shares in airport operators.

Three of the 13 executives in Narita International Airport Corp.
came from the Transport Ministry. Among the remainder, there is also
a former National Police Agency official and a former National Tax
Administration official. The total amount of annual salary paid to
the 13 executives is 286 million yen, an average of 22 million yen.


TOKYO 00000291 010 OF 012


Among all government agencies, the Transport Ministry has secured
the largest number of post-retirement jobs for its officials. A
ministry official said: "Narita is a very lucrative company for
retired ministry bureaucrats."

Last summer, an Australian investment fund purchased nearly 20
PERCENT of the shares in Japan Airport Terminal Co. (JAT) and
became the biggest shareholder. This move prompted the Transport
Ministry to move to place restrictions on foreign firms. JAT
operates Haneda Airport and is listed on the First Section of the
Tokyo Stock Exchange.

A ministry official commented: "Haneda and Narita are key
infrastructure. To dispel concerns about the safety of airports, it
is necessary to place certain restrictions on foreign ownership."
The ministry is considering holding foreign ownership of four
airports -- three firms linked to Haneda, including JAT, and Narita
International Airport -- to less than one-third in terms of voting
rights.

However, LDP House of Representatives member Hiroshige Sekou has
continued to oppose the proposed regulations, arguing: "The logic of
the Transport Ministry, which brandishes the word 'safety', is
irrational."

Citing an incident in July 1999 in which an ANA airplane left Haneda
for New Chitose was hijacked and its captain killed, Sekou
emphasized in a meeting of the LDP Land and Transport Department:
"The main cause for the incident was the lax security system at
Haneda Airport. Ownership of foreign companies and air safety have
nothing to do with each other."

Sekou also pointed out that 75 PERCENT of total revenues earned by
JAT are from sales of goods at Haneda, Kansai, and Chubu airports.
He then assured: "I wonder why foreign-ownership regulations are
necessary on sales of goods. After all, what the ministry wants to
protect are postretirement jobs." Former Deputy Vice Transport
Minister Katsuji Doi is now vice president at JAT.

The restriction plan contradicts the Fukuda administration's goal of
promoting foreign investment in Japan. Financial Services Minister
Yoshimi Watanabe is also critical of the plan, arguing: "The
proposed rules go against the national strategy of strengthening
Japan's capital market and expediting foreign investment."

According to a survey by the Transport Ministry, only Thailand has
placed almost the same level of restrictions on foreign ownership of
airports as the rules now under consideration in Japan. Thailand
limits foreign ownership to less than 5 PERCENT . A government
source commented: "Restricting foreign capital is indisputably a
sort of discrimination toward foreigners. The Japanese government
has called in trade negotiations of the Association of Southeast
Asian Nations (ASEAN), including Thailand, for easing or abolishing
all measures to protect their domestic firms. It is a bad joke for
the government to introduce restrictions, following Thailand."

13) Japan to double ships in 5 yrs

YOMIURI (Page 2) (Full)
February 5, 2008

The government's ocean policy task force, headed by Prime Minister

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Fukuda, has worked out a draft of its basic oceanic plan for Japan's
ocean policy. The draft basic plan, revealed yesterday, notes that
the number of ships under the flag of Japan has been decreasing. As
it stands, the draft plan sets numerical benchmarks to attain. In
concrete terms, the draft plan suggests the need for Japan to double
its holding of ships in five years. In addition, the draft plan
proposes increasing the number of Japan's ocean line seafarers by 50
PERCENT in 10 years. The government will also work out a plan
within fiscal 2008 for Japan's development of marine energy and
mineral resources, including oil and natural gas. The draft plan is
expected to be adopted in a cabinet meeting this month.

The draft basic plan for Japan's ocean policy is based on the Basic
Act on Ocean Policy, which was enforced in July last year. The basic
plan is intended to unify the government's ocean policy measures
that are currently in the hands of its ministries. The government
will review its ocean policy in five years.

Japan's holding of ocean liners is now below 1,000 as of 2006. The
number of Japanese seamen is also below 3,000. "Japan depends
largely on ocean shipping," the draft plan notes. "This situation is
therefore problematical for Japan from the perspective of ensuring
ocean shipping," it adds. The government will lighten or reduce
taxes on Japanese shipping companies to increase their ships and
seafarers.

In addition, the draft basic plan stresses that it is "vital" for
Japan to probe and exploit marine energy and mineral resources. In
this regard, the basic plan suggests the need for government
ministries and agencies to work together and formulate a "marine
energy and mineral resources development plan" within fiscal 2008.
This development plan is to prescribe a blueprint of projects for
Japan's exploitation of marine resources as well as technology
development needed for Japan to exploit marine resources.

Furthermore, the draft basic plan says Japan, for the time being,
will need to probe and exploit marine resources in its exclusive
economic zone (EEZ) waters, pinpointing: 1) petroleum; 2) natural
gas; 3) methane hydrate; and 4) sea-floor hydrothermal deposits,
including rare metals. The basic plan says the government should
intensively invest its policy-based resources as necessary. It also
sets a goal for Japan to head for its commercialization of methane
hydrate and sea-floor hydrothermal deposits in about 10 years.

14) Kyoto Prefecture to launch CO2 reduction bank: Company to
purchase emissions reduced by households

MAINICHI (Page 2) (Full)
February 5, 2008

Kyoto Prefecture on February 4 released a plan to start a Kyoto CO2
Reduction Bank, an emissions quota transactions system allowing
companies to purchase carbon dioxide (CO2) emissions cut by
households, staring this fiscal year. Under the system, each
household registers with the bank and obtains points, according to
the amount of CO2 it has cut. It can use the points at registered
neighborhood stores. Companies that purchased emissions credits can
count them as emissions cuts. The registered stores would receive
the payment for goods they sold through the bank. Kyoto is the first
area to adopt such a system, according to the prefecture.

Kyoto Prefecture has adopted a regulation on measures to combat

TOKYO 00000291 012 OF 012


climate change. It seeks to have leading companies cut CO2 emissions
by 10 PERCENT by 2010, compared with 1990 levels. The envisaged
system would benefit both companies and households and would
stimulate local shopping areas.

The prefecture will establish the bank in April and invite
households and companies to register. Emissions trading will start
this fall. It expects that about 3,000 households and 20-30
companies will take part, enabling the reduction of 1,200 tons of
CO2 emissions a year.

The amount of cuts achieved by households will be confirmed using
the amount of electricity and gas they use compared with the
previous year. The prefecture calculated that a company would
purchase a 1 kg cut for 5 yen. An average household that emits 4
tons of CO2 a year could obtain points worth 2,000 yen if it cuts
emissions by 10 PERCENT . A credit card will be used for shopping at
registered stores.

SCHIEFFER

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