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Cablegate: Japanese Morning Press Highlights 05/22/08

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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;
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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 05/22/08

Index:

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

Defense and security affairs:
4) Defense Ministry presents reorganization report focusing on
policy, operations, and equipment, and mixing uniformed and civilian
personnel (Nikkei)
5) Defense Ministry's reorganization proposal meets with cool
response (Yomiuri)
6) With passage of Basic Law on Outer Space, introduction of
early-warning satellites is now possible (Nikkei)
7) Procurement-scandal tainted Yamada Corp. files lawsuit against
Defense Ministry seeking compensation for CX engine and other
contract losses (Tokyo Shimbun)
8) Letter to Tokyo Shimbun editor: Government rapped for giving
special treatment to U.S. troops in Japan (Tokyo Shimbun)

9) LDP lawmakers form new study group on North Korea (Yomiuri)

10) Democratic Party of Japan (DPJ) readies own bill on banning
simple possession of child pornography (Asahi)

Food aid:
11) Government plans to provide Africa with 20,000 tons of rice as
food aid (Nikkei)
12) Government to establish new international organization for
increasing rice production (Asahi)

Global warming:
13) Panel presents interim report on global-warming countermeasures
(Asahi)
14) Prime Minister Fukuda says system of emissions trading will have
to be in place five to ten years from now (Nikkei)
15) LDP's proposed global-warming countermeasures calls for the
introduction of an environment (green) tax (Yomiuri)

Political agenda:
16) Extraordinary Diet session may be convened as early as late
August (Yomiuri)
17) Council proposes creation of a consumer affairs agency (Asahi)

18) Government and ruling parties working to revise controversial
system of medical care for elderly over 75 that tops their pensions.
(Mainichi)

Articles:

1) TOP HEADLINES

Asahi:
Toyota Motor to pay full overtime wages linked to "kaizen" or extra
group activities, acknowledging it as related to work

Mainichi:
Nonlife insurers overcharge 29.8 billion yen in premiums: Six
leading companies to return overcharged amounts

Yomiuri:
Government panel seeks to give powerful authority to envisaged

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consumer agency; Point of contacts to be integrated

Nikkei:
Government eyes fund to commercialize untapped state-of-the-art
technologies

Sankei:
Defense Ministry presents reform plan, including mixed organization
consisting of both uniformed group and civilians; Unit management to
be integrated

Tokyo Shimbun:
Consumer agency: State to demand loss compensation from unscrupulous
companies; Accident analysts to be assigned

Akahata:
China quake: Lawmaker Kasai calls for maximum aid; "Additional aid
will be considered, if a request is made," says foreign minister

2) EDITORIALS

Asahi:
(1) Enactment of Basic Law on Use of Space: Clear-cut principles for
military use urged
(2) Narita Airport marks 30th anniversary since opening: Integrating
Narita and Haneda Airport operating companies is one way of
boosting international competitiveness

Mainichi:
(1) Can scandals be rooted out with proposed Defense Ministry reform
proposal?
(2) New Taiwan President Ma Ying-jeou: Dialogue between China and
Taiwan urged

Yomiuri:
(1) Narita Airport marks 30th anniversary since opening: Shift to
policy for co-existence with Haneda Airport
(2) New Taiwan President Ma Ying-jeou: China should also do its
utmost to stabilize Taiwan Strait

Nikkei:
(1) U.S. Democratic Party conducting experiment choosing Obama as
presidential candidate
(2) Japanese banks have still long way to go to become strong

Sankei:
(1) Defense Ministry reform: Give teeth to mixed organization plan
(2) Lay judge system: Further enhance public attitude regarding
taking part in system

Tokyo Shimbun:
(1) Obama declares victory: Will face test of uniting party members
(2) Nominal administrative position: McDonald's decision to pay
overwork wages should be made milestone to reform harsh working
conditions

Akahata:
(1) Consumption tax: LDP-New Komeito-led politics' number is up

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 21

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NIKKEI (Page 2) (Full)
May 22, 2008

09:55
Met Ambassador to Britain Ebihara.

10:06
Met Vice Foreign Minister Yabunaka. Followed by Special Advisor
Ito.

11:18
Met Japan Science Foundation Chairman Arima, chairman of the
Association to Consider the Earth, and others. Followed by Internal
Affairs Minister Masuda and Consumer Affairs Minister Kishida.

12:14
Met Mie Asaoka, president of the Climate Network, and others, with
former Foreign Minister Kawaguchi president.

14:13
Signed a condolence book at the Chinese Embassy in Moto-Azabu. Met
Ambassador Cui Tiankai.

15:20
Met at the Kantei with U.S. PhRMA Chairman Richard Clark, with
Foreign Ministry Economic Affairs Bureau Director General Otabe
present. Later met Deputy Chief Cabinet Secretary Futahashi and
Assistant Deputy Chief Cabinet Secretary Saka.

16:25
Met Environment Minister Kamoshita and Vice Minister Tamura.

17:00
Attended a meeting of the Council for Promoting Consumer Policy.
Minister Kishida stayed behind.

18:05
Met LDP Tax System Research Commission Tsushima.

19:55
Returned to his official residence.

4) Defense Ministry submits reform plan for policy planning, SDF
operations, defense buildup

NIKKEI (Page 2) (Abridged)
May 22, 2008

The Defense Ministry reported its reorganization plan to a Defense
Ministry reform panel in its meeting held yesterday at the prime
minister's office. The plan features reorganizing the current
separate setups of the Defense Ministry's internal bureaus and the
Ground, Maritime, and Air Self-Defense Forces' respective staff
offices into three functional bodies, each of which is to consist of
both the Defense Ministry's internal bureau officials and the SDF's
uniformed staff officers. The Defense Council, which advises the
defense minister, will also be expanded. The plan goes no further
than to come up with multiple ideas over whether to retain the SDF
staff offices and what to do about its divisions for SDF operations,
because the Defense Ministry was divided in opinion.


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The Defense Ministry has set up a team under Defense Minister
Shigeru Ishiba to overhaul itself against the backdrop of scandals
and incidents, such as its officials' corruption over acquisition
and an MSDF Aegis destroyer's collision with a fishing boat. The
reform panel will work out a report in mid-June. However, its
coordination is expected to face rough going.

In the reform panel meeting, Ishiba suggested the need for the
Defense Ministry to rectify its bureaucratic sectionalism, noting
that it is difficult for the Defense Ministry to optimize its budget
and personnel allocation. The plan lists five problems, such as the
ambiguity of authority and responsibility in the overlapping
functions of the Defense Ministry's internal bureaus and the GSDF,
MSDF, and ASDF staff offices.

In addition, the Defense Ministry plans a new advisory system for
its minister. In this regard, the Defense Ministry will abolish its
current defense counselor system, under which the Defense Ministry's
senior officials, including the directors general of its internal
bureaus, assist the defense minister as defense counselors. Instead,
the Defense Ministry plans to have political appointees as special
assistants to its minister. The Defense Council, which has rarely
met so far, will also be defined as a law-based body to advise and
assist the defense minister on defense policies in general.

The Defense Ministry will reorganize its current central
organizational setups into three functional divisions for policy
planning and public relations, SDF operations, and defense buildup
programs. Each division is to be made up of civilian officials and
SDF staff officers. When it comes to the two divisions for SDF
operations and defense buildup programs, the reported plan lists
both the idea of combining them into an internal bureau of the
Defense Ministry and the idea of creating a special body like the
SDF Joint Staff Office.

Concerning the current setups of the three SDF staff offices, the
Defense Ministry takes the position that they need to retain their
respective administrative functionalities, such as providing SDF
personnel with education and training programs. Even so, the Defense
Ministry's reform plan lists three ideas: 1) absorbing the three SDF
staff offices into an internal bureau of the Defense Ministry to
abolish their current setups; 2) establishing headquarters in the
GSDF, MSDF, and ASDF to retain some of their functionalities; and 3)
maintain the current setups of the three SDF staff offices as they
are.

5) Defense Ministry reform plan draws cautious views; Ironing out
views likely to be difficult

YOMIURI (Page 2) (Abridged)
May 22, 2008

The Ministry of Defense (MOD) presented yesterday a set of MOD
reform proposals to the government's Council on Reform of the
Defense Ministry, chaired by Tokyo Electric Power Co. advisor Nobuya
Minami, that met yesterday at the Prime Minister's Official
Residence (Kantei). The proposal is mainly designed to integrate and
realign the internal bureaus (civilian staff) and the staff offices
of the three SDF branches (uniformed group) into bodies responsible
for three separate functions. The plan elicited cautious views from
most attendants.


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The council plans to produce a report in June.

The MOD's plan is designed to integrate the main duties of the
internal bureaus and the staff offices into three functions: defense
policymaking and planning, including public relations activities;
operation of SDF units; and unified equipment procurement. This also
designed to set up mixed units of personnel from both the civilian
and uniformed groups. The plan lists two options: one is to
integrate the three functions into the internal bureaus, and the
other is to set up two new organizations, which in addition to the
bureau would deal either with the operation of SDF units or the
procurement of equipment.

On personnel affairs and education regarding the staff offices of
the three SDF branches that are outside the three functions, three
plans were presented: (1) abolishing the staff offices to shift such
functions to the internal bureau; (2) abolishing the staff offices
and split the functions either to the internal bureau or the Joint
Staff Office; and (3) laving them at the staff offices. The first
two plans are designed to remove the chiefs of staff of the three
SDF forces from the units' chain of command to exclusively serve as
assistants to the defense minister.

The reform plan has drawn critical views from attendants, with one
saying: "The connection between a series of scandals and the planned
organizational reform is hard to understand."

The plan is drawing fire also from within the ministry. A uniformed
officer said: "The elimination of the staff offices would lead to a
decline in the SDF's voice. Unless the chiefs of staff of the three
forces exit at the top of the units, their morale would decline."

6) Basic space law enacted; Introduction of early-warning satellites
possible

NIKKEI (Page 2) (Abridged slightly)
May 22, 2008

The House of Councillors passed in its plenary session yesterday
legislation allowing space to be used for defense purposes. The
legislation will also allow the possession of high-performance
reconnaissance satellites by the Self-Defense Forces, as well as the
development and introduction of early-warning satellites for a
missile defense system. The Defense Ministry intends to set up a
space and maritime policy office as early as July to study a
concrete policy for using space.

Equipped with an infrared sensor, an early-warning satellite can
detect the heat of a fired ballistic missile. A person concerned
expressed hope, saying, "We have relied on the United States in
obtaining intelligence. We will now be able to obtain information
speedily and independently." The use of space has a wide range of
applications, such as the introduction of communication satellites
exclusively for use by the SDF and the development of special
materials. The LDP Space Development Committee, which has been
promoting basic space legislation, produced an interim report
yesterday urging the government to incorporate space development in
the next Midterm Defense Buildup Program.

The Diet adopted a resolution in 1969 allowing the use of space
limited to peaceful purposes only, and the government has followed
it. But because industrialized countries began using military

TOKYO 00001402 006 OF 013


satellites earnestly, the government slightly revised the resolution
in 1985 to "allow the SDF to use satellites that are common."

In the wake of a ballistic missile fired in 1998 by North Korea, the
government has shifted the policy to allow the possession of
multiple-purpose information-gathering satellites to deal with
disasters and other situations. The country now has four such
satellites (including one that is unusable). Nevertheless, their
solution is about one meter, on the level of commercial satellites,
in comparison to U.S. satellites' 10 centimeters.

At the same time, there are cautious views in Japan and other
countries about using space for military purposes. The development
and possession of high-accuracy reconnaissance would weigh heavily
on the nation's finances, and reactions by neighboring countries
cannot be ignored, either. China has been alarmed at Japan's moves.
Its official Xinhua News Agency has made a quick report on the
enactment of Japan's basic space law, saying, "It is intended to
launch military spy satellites."

A senior Defense Agency official also expressed a cautious view:
"Which is better -- to share the cost with the United States or to
bear it independently? The government's space development budget has
hit a plateau. I would like to watch the government's interpretation
of the text at the Diet, as well as public opinion."

Space industry expresses hope

Fuji Heavy Industries President Ikuo Mori, who became chairman of
the Society of Japanese Aerospace Companies (SJAC) yesterday, spoke
highly of the enacted the basic space law in a press conference
yesterday: "The area of industrialization will be expanded." Former
SJAC chairman and IHI advisor Mototsugu Ito also commented:
"Bureaucratic sectionalism will be eliminated and administration
will be unified, making it possible to tackle matters
comprehensively, from basic research to industrialization."

7) Yamada Corp. files lawsuit against MOD seeking to pay all prices
for sale of C-X engine, etc.

TOKYO SHIMBUN (Page 1) (Excerpts)
May 22, 2008

It has been learned that the defense trading company Yamada Corp.
has filed a civil lawsuit against the Ministry of Defense (MOD)
calling for payments for the sale of such products as the C-X engine
to be installed in the Air Self-Defense Force's (ASDF) Cargo
aircraft-X (C-X) engine and other products. It is unusual for a
company trading with the MOD to file a complaint against it. The
first hearing is scheduled to take place in the Tokyo District Court
on May 26.

According to the MOD, the ministry was supposed to pay 1.42 billion
yen to Yamada Corp. for the purchase of two C-X engines and a
missile alarm device, which were all distributed in fiscal 2007 by
Yamada Corp.

Afterwards, however, it was discovered through the bribery case
involving Yamada Corp's former executive Motonobu Miyazaki and
former Administrative Vice Defense Minister Takemasa Moriya that the
company had broadly padded the prices of its products. The MOD paid
to the company the amount in two installments - in this past

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February and April -- after deducting the padded portion of 540
million yen from the 18 invoices related to the purchase of parts
for the F-2 fighter.

Yamada Corp., however, insisted that "It's strange that the ministry
did not pay the prices of products after they were distributed to
it. We purchased the C-X engine upon borrowing money from a bank. We
had to pay interest on the money, but (the MOD) unilaterally reduced
the amount it had to pay to us. We want to discuss the problem of
padded invoices separately, but the MOD is unwilling to do so."

8) Letter to editor from bookstore employee: Government responsible
for giving preferential treatment to U.S. service members

TOKYO SHIMBUN (Page 5) (Full)
May 22, 2008

Kaori Suzuki, 51 year-old, resident in Nerima Ward, Tokyo

The number of incidents caused by U.S. military personnel totaled
9,193 over the past five years from 2002 to 2006, averaging five
cases a day. If such crimes as sexual ones that victims tend to hide
were added, the total number would be certain to increase.

It is surprising that more than 80 PERCENT of the crimes caused by
U.S. service members occurred while they were off duty. It means
that there were more than 7,000 incidents in the five years that
would not have occurred if U.S. military personnel were not allowed
to go outside bases.

Japan spends annually several tens of billions yen of tax money for
U.S. bases. Since there are entertainment facilities on U.S. bases
made under Japan's host-nation support budget, I want U.S. military
personnel to stay in their bases even when they are off duty. If
they leave the bases, let them as U.S. citizens residing in Japan
follow Japan's law.

Meanwhile, I think the Japanese government, which gives preferential
treatment to U.S. military personnel in Japan, is obliged to take
responsibility in place of them. It is unforgivable that the
government does not pay compensations to victims of crimes that are
caused by U.S. service members while they are off duty. When
thinking how much the Japanese government gives consideration to
U.S. forces in Japan, I cannot accept such a government's stance.

9) LDP lawmakers to study North Korea pressure

YOMIURI (Page 4) (Full)
May 22, 2008

Former Deputy Chief Cabinet Secretary Hakubun Shimomura and other
middle-ranking and junior lawmakers belonging to the ruling Liberal
Democratic Party will launch a study group today to promote cautious
and pressure-oriented diplomacy toward North Korea. The study group
will start with a total of six LDP legislators, including Shimomura,
Kenichi Mizuno from the House of Representatives, and Ichita
Yamamoto from the House of Councillors. They insist that Japan
should take economic sanctions and other resolute measures against
North Korea in order to resolve issues over its nuclear development
and abduction. The group will invite Kyoko Nakayama, special advisor
to the prime minister on the abduction issue, to its first meeting
today to hear about the abduction issue.

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The study group is believed to be aimed at constraining former LDP
Vice President Taku Yamasaki and other LDP lawmakers against their
move to set up a superpartisan parliamentary league today for the
normalization of diplomatic relations between Japan and North Korea
at an early date.

10) DPJ decides on outline of own bill amending law banning child
pornography, applies "simple possession" to limited cases

ASAHI (Page 4) (Full)
May 22, 2008

Noriko Akiyama

The major opposition Democratic Party of Japan (DPJ) decided on the
outline of its own bill amending the Law for Punishing Acts Related
to Child Prostitution and Child Pornography. The features of the
DPJ's bill include a review of the definition of child pornography.
The bill will provide for punishment of "simple possession," namely
individuals who collect child pornography, but the application of
punishment on this sort of possession will be limited to cases where
"individuals recklessly collect or obtain child pornography after
purchasing it." The DPJ aims to submit the bill to the current
session of the Diet.

The Law for Punishing Acts Related to Child Prostitution and Child
Pornography was initiated by lawmakers and was enacted into law in
1999. Whether to punish simple possession was discussed at the time
of the establishment of the law, but it was decided not to punish it
because of concerns that doing so may lead to violations of privacy.
But this past March, United States Ambassador to Japan J. Thomas
Schieffer, who has called for an international effort to prevent
child abuse, asked for Justice Minister Hatoyama's cooperation to
punish simple possession. The ruling parties are also discussing the
question of amending the law.

The ruling bloc's bill is likely to ban simple possession across the
board and give a sentence of up to one-year imprisonment or a fine
of up to one million yen. In contrast, the DPJ has limited cases
subject to punishment to certain acts out of concern that there may
arise cases where investigations will be carried out in an arbitrary
manner or a confession will be forced. For both sides' bills, it is
difficult, however, to be enacted into law during the current Diet
session.

The DPJ's bill reconsiders the current definition of child
pornography. The bill revises the current provision on "acts of
touching a child's sexual organs by others or child's behavior
related to touching on others' sexual organs" to "something that
arouses sexual organs, etc." and deletes the provision on "poses a
naked child or semi-naked child " on the grounds of the ambiguity of
the provision.

The DPJ's bill also amends the title of the current law from "Acts
Related to Child Prostitution and Child Pornography to "Acts Related
to Child Abuse and Sexual Exploitation, Etc."

11) Government plans to provide 20,000 tons of rice to Africa as
first tranche of emergency food aid

NIKKEI (Page 5) (Excerpts)

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May 22, 2008

The government has set a policy course of setting aside for African
countries some $50 million and providing them with food aid
centering on approximately 20,000 tons of rice that Japan has in
stock. The cabinet will formally make a decision on May 23. This
will be the first tranche in emergency food aid worth $100 million
(approximately 10 billion yen) that was announced in April. The
assistance in principle will be provided through the World Food
Program (WFP). The aid policy measures will be specified at the
TICAD Africa development conference that starts on May 28.

The countries subject to the food aid will center on Africa,
including the Sudan, Kenya, and the Congo Republic, as well as 12
other countries (sic) in the region including Afghanistan and the
Palestinian Autonomous Region. Either rice or wheat will be
provided, depending on the request of the recipient. Rice provided
to five countries including Kenya will total 20,000 tons. The rice
used will be minimum access rice, which Japan is obliged to import
under international trade rules, and rice stored for emergencies.

12) Japan to establish international agency aimed at doubling rice
production with eye on assistance to Africa

ASAHI (Page 7) (Slightly abridged)
May 22, 2008

Yusuke Murayama

The government will establish an international aid organization
aimed at doubling rice production in Africa. This new organization
will consolidate aid in the agricultural sector provided so far by
various aid organizations and distribute assistance in an effective
manner in line with Africa's needs. This organization is expected to
have the participation of some 30 countries and organizations,
including the Food and Agriculture Organization of the United
Nations (FAO). The objective is to constrain social unrest and help
Africa to become independent economically.

The name of the new organization is CARD (Africa Rice Production
Promotion Initiative). CARD will be joined by seven agencies,
including the Japan International Cooperation Agency (JICA) and the
International Rice Research Institute. CARD will be set up by
October. Its headquarters will be located in Nairobi, Kenya. Japan
will call on the World Bank, the United Nations Development
Programme, and the United States to take part in CARD.

Rice is the principal food in Western Africa, and rice consumption
is increasing even in East Africa. But with the rice
self-sufficiency rate staying at 60 PERCENT , soaring food prices
worldwide have hit the poor people in Africa. Famine and riots have
occurred. At the upcoming fourth Tokyo International Conference on
African Development (TICAD) slated for May 28, Prime Minister Fukuda
will announce a policy of doubling rice production in Africa over
the next 10 years. CARD will serve as a major engine to promote this
policy.

CARD will first conduct a feasibility study as to an increase in
rice production in African countries. It will select a dozen
countries as priority aid-recipient countries and chart a rice
production increase strategy. It will make arrangements and
reorganize various aid measures provided by various aid agencies

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with an eye on (1) improvement in variety of rice; (2) setting of
small-scale water facilities; (3) introduction of rice mill machine;
(4) support for small farmers to expand their sales networks; and
(5) spread of production of New Rice for Africa (NRA).

In Asia, Green Revolution that led to remarkable production increase
due to improvement of variety of rice occurred in the 1960s. This
became the basis for industrialization. Africa was slow to address
improvement in agricultural production. Rice production per hectare
in Africa is 40 PERCENT of Asia, but a government official noted:
"Production increase is highly likely."

13) Subcommittee on global warming in interim report: "Discussion
will continue" on whether to introduce emissions-trading system

ASAHI (Page 4) (Full)
May 22, 2008

A subcommittee of the government's Council on Global Warming
released its interim report yesterday. On whether to introduce an
emissions-trading system, the report includes both the pros and cons
of a system and specifies a willingness to continue discussion. The
council will set forth a policy direction on the propriety of
introducing the system in early June. Prime Minister Fukuda will
then make a final decision.

Regarding an emissions-trading system, the report introduces this
argument favorable for the system: "Introducing the system is a
global trend. Since it is an effective means to reduce emissions,
Japan should introduce it at an early date." But the report also
inserts this view dominant in industries discharging large amounts
of greenhouse gases: "How to allocate (emission credits) and what
effect it will have on the nation's industrial competitiveness must
be thoroughly considered. Western countries are taking a
trial-and-error approach. Japan also should discuss whether to
introduce the system in a cautious manner." The report then
concludes: "While carefully watching moves in Western countries, we
will continue discussion based on Japan's circumstances."

The report stopped short of presenting a definite policy direction
on an environment tax, just introducing such views as: "Taxes should
be imposed on the private sector, emissions from which cannot
covered by the proposed emissions-trading system," and "The existing
tax system, not a new tax, should be made use of."

Subcommittee Chairman Akio Morishima, former chairman of the Central
Council for the Environment, told reporters: "Since the
emissions-trading system contains various problems, no conclusion
was reached on introducing it, but the way has been paved for
discussing it, based on the judgment that the issue is worth
discussing."

The prime minister intends to announce a set of comprehensive
proposals to fight global warming, based on the subcommittee's
recommendations. Attention is focused on whether Fukuda will decide
to introduce the emissions-trading system prior to the Group of
Eight Summit in July.

14) Carbon emissions trading system: "The system will become
necessary in five to 10 years' time," says prime minister

NIKKEI (Page 1) (Excerpts)

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May 22, 2008

The government has started looking into specific measures aimed at
introducing a global warming greenhouse gas emissions trading
system. Prime Minister Yasuo Fukuda yesterday told former Foreign
Minister Yoriko Kawaguchi, who visited the Prime Minister's Office
(Kantei): "Emissions trading will become necessary in five to 10
years' time. Charging for gas emissions would make people feel that
they must cut emissions." He wants to make the system the showcase
of the Fukuda Vision, which is to be released in June with an eye on
the post-Kyoto framework staring in 2013. The focus will be when to
introduce and how to design such a plan.

Fukuda during the exchanges of views on the environmental issue with
Kawaguchi and others underscored: "With a view to 2050, what should
be done now is important. Efforts for the next decade are important.
For international negotiations, five years from now are important."
He also said, "I will make a surprising proposal. Please look
forward to it."

Under the Fukuda Vision, the prime minister intends to come up with
a long-term goal of cutting domestic emissions by 60 PERCENT -80
PERCENT by 2050 anticipating that global warming green gas
emissions will be a main item on the agenda of the G-8 in July. He
wants to display leadership, including in the Fukuda Vision the
pending issue of the domestic adoption of the emissions trading
system.

However, some domestic industries, such as the steel and power
industries, are cautious about the idea of introducing such a system
with one noting, "Such a system will hamper economic growth." A
member from the Federation of Electric Power Companies of Japan
(FEPCJ) during a subcommittee meeting yesterday of the Round-Table
on Global Warming reporting to the prime minister pointed out, "It
would be difficult to strike a balance between emissions cuts and
economic growth under a system of the government forcibly
establishing emissions quotas."

15) LDP taskforce on global warming prevention proposes introducing
environment tax, emissions-trading system

YOMIURI (Page 4) (Full)
May 22, 2008

The Liberal Democratic Party's Global Warming Prevention
Headquarters, chaired by Takeshi Noda, will compile a set of
recommendations by the end of May. A draft of the package defines
the next five to 10 years as a period for special action and
suggests that the government should intensively promote such tasks
as introducing an emission-trading system and an environment tax
designed to impose tax based on carbon dioxide emissions. The panel
wants to reflect the recommendations in the Fukuda vision to be
released by the government on how to curb global warming in June.

From the viewpoint of mitigating global warming, the draft proposes
reconstructing every policy mechanism, such as the tax and subsidy
systems, as well as regulations. Besides, it suggests introducing
daylight-saving time. Regarding the global warming countermeasures
now being taken by the government, too, the panel will look into
their effect and review them.

Further, the package proposes that a basic law on creating a

TOKYO 00001402 012 OF 013


low-carbon society be enacted and that the law should include
measures to (1) set medium-term and long-term goals for reducing
greenhouse gas emissions; and (2) establish a study committee on
climate change control (tentative name) composed of eminent persons
from industry and academics.

16) Extra Diet session likely to be convened in late August

YOMIURI (Page 2) (Full)
May 22, 2008

The government and ruling parties yesterday started looking into the
possibility of convening an extraordinary session of the Diet in
late August. The session now is scheduled to open in the fall. With
an eye on the expiration next January of the new antiterrorism
special measures law, the growing view is that an early opening of
the extra Diet session is necessary in order to secure sufficient
time for deliberations in the House of Councillors.

There is a possibility that if a bill revising the new antiterrorism
special measures law, intended to extend its term, is submitted to
the Diet, the main opposition Democratic Party of Japan (DPJ) will
be opposed to taking a vote on the bill in the Upper House. The DPJ
has opposed also a bill amending the special law on state subsidies
for the government-controlled health care program, which will be
carried over to the extra session from the ongoing regular Diet
session.

Therefore, the ruling camp has judged that it is needed to secure
the term of the session in view of the constitutional 60-day rule
that stipulates if the House of Councillors fails to take vote on a
bill within 60 days after receiving it from the House of
Representatives, it is considered that the bill was rejected.

A senior Liberal Democratic Party member even said yesterday: "When
assuming the constitutional 60-day rule will be used, the extra Diet
session should be opened sometime between late July and early
August."

In the past, the fall extraordinary Diet sessions were often
convened during late September and early October. Under the
political situation with the Diet divided between the ruling and
opposition camps, the extra session opened on Sept. 10 last year.

17) Consumer policy panel reveals draft final report on

ASAHI (Page 1) (Excerpts)
May 22, 2008

The government's Council for Promoting Consumer Policy held a
meeting at the Kantei yesterday, in which Chairman Takeshi Sasaki,
professor at Gakushuin University, spelled out its draft final
report. The draft proposes establishing a consumer agency as an
organ affiliated with the Cabinet Office, calling for giving to it
powerful comprehensive coordination and recommendation rights. To
reflect consumers' views, the report also suggests establishing an
experts panel.

Ministerial negotiations will start this week. Based on results in
the negotiations and the recommendations in the draft report, the
council will come up with a final report in early June. The
government will then adopt its basic plan in a cabinet meeting and

TOKYO 00001402 013 OF 013


submit a bill governing establishing a consumer agency in the
extraordinary Diet session in the fall.

As key duties for the consumer agency, the draft cites "planning and
drafting new legislation beyond the vertically divided system of
government administration." It also specifies that the panel will
work out legal measures to save victims, focusing on such measures
as seizing profits illegally earned by companies or dealers and
introducing a system in which administrative organs file a damage
complaint on behalf of victims.

In the new body, two key sections will be set up; one as a control
tower for coordinative views among government agencies, and another
responsible for instructing companies or dealers, as well as for
product testing.

The proposed expert panel will be established based on Article 8 of
the National Administrative Organization Law. The panel will be
allowed to offer views to the prime minister and others on consumer
policies and administrative punishment by government agencies.

18) Government, ruling parties to review medical insurance premiums
reduction from pension benefits of people aged 75 and over

MAINICHI (Page 1) (Abridged)
May 22, 2008

The government and ruling parties decided yesterday to review part
of the system of medical insurance premiums reduction from the
pension benefits of those aged 75 and older. Under the present
system, the medical insurance premiums of people whose monthly
pension benefit is more than 15,000 yen are withheld. The government
and ruling coalition will promote coordination with municipalities
on a plan to raise the minimum to more than 30,000 yen. Although
they intend to compile a revision plan by June 13 when the medical
insurance premiums are withheld next time, the outlook is that the
revision plan will be compiled in the fall or later since
modification of the system is needed.

SCHIEFFER

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