WHALING: PRIVATE SECTOR GETS OUT OF WHALING

UNCLAS TOKYO 002073

SIPDIS

STATE FOR D, G and OES/OA - MHAYES AND EAP/J - KMIDHA
USDOC FOR NOAA/NMFS - US IWC COMMISSIONER HOGARTH AND
McCARTHY

SIPDIS

E.O. 12958: N/A
TAGS: SENV EFIS KSCA IWC JA ETRD
SUBJECT: WHALING: PRIVATE SECTOR GETS OUT OF WHALING
BUSINESS BUT NO CHANGE IN GOJ POLICY

REF: A) 05 TOKYO 2193; B) 05 TOKYO 2932;

C) 05 TOKYO 6131

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SUMMARY
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1. Five private fisheries companies that own Kyodo
Senpaku, the owner and operator of the vessels used in
Japan's lethal research whaling program, have
collectively decided to give away their shares to several
public-interest organizations, including the Institute of
Cetacean Research (ICR). GOJ officials and other
stakeholders in the Japanese whaling community claim the
move underpins the public nature of Japan's whaling
program, which they claim is supported by the entire
nation. No changes in Japan's lethal research whaling
program are expected, although the credibility of Japan's
call for a resumption of commercial whaling may be
further undermined. The real motive from the
shareholders is their long-standing desire to free
themselves from the hook of anti-whaling NGO pressure and
its negative effect on their globally expanding food
business. END SUMMARY.

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Shares Donated, Research Whaling "Belongs to Nation"
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2. On March 24, Kyodo Senpaku Kaisha Ltd., which owns
and operates the fleets used by Japan's lethal research
whaling program, announced that its five parent companies
would donate their shares to several public-interest
organizations, including the ICR. Kazuo Yamamura,
President of Kyodo Senpaku, explained at a press
conference that the move demonstrates the public nature
of Japan's research whaling activities and aims at
gaining a broader support base from the public for its
expanded lethal whaling program, JARPA II (refs).


3. Kyodo Senpaku's 5,730 shares were each valued at Yen
10,000 (USD 84),with a total value of only Yen 57.3
million (USD 490,000). The current shareholders are five
private fisheries and food processing/distribution
companies: Nissui (31.9 percent share),Kyokuyo and its
subsidiary Kyokuyo Suisan (31.9 percent collectively),
Taiyo A&F (percentage not disclosed) and Delmar
Development (percentage not disclosed). According to
Tadashi Tomisawa at the Accounting Division of Kyodo
Senpaku, only the IRC has been designated as one of the
share recipients. Other potential candidates are still
under negotiation. He said the company hopes to complete
the process of the shareholder changeover by June or
July.


4. According to Mr. Shimizu, Public Relations Manager at
Nissui, the largest shareholder of Kyodo Senpaku, the
company respects the decision by Kyodo Senpaku and has no
intention of selling its shares to the public
organizations. Shimizu, who refused to reveal his first
name, explained by way of background that Kyodo Senpaku
took on Nissui's former whaling crew members when Japan
withdrew from commercial whaling in 1987, so Nissui
considers it a fair trade-off to give away its shares
which are valued at Yen 18 million (USD 152,000). In a
press conference on April 6, Naoya Kakizoe, President and
CEO of Nissui, announced that the company would cease
operations selling canned whale meat as well, which means
an end to the company's whaling-related business
altogether.

Global Food Company Chose "Harmonious Approach"
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5. Shimizu emphasized that the company wants to keep a
low-profile on the issue, as it was torn between the
GOJ's whaling policy and the company's own expanding
global business in the U.S., Europe, New Zealand and
South America, which has required it to take a more
"harmonious" approach in line with other countries' local
values toward whaling. Asked if the company had been
pressured by Greenpeace and other NGOs to divest its
shares of Kyodo Senpaku and related whale meat
businesses, Shimizu admitted that Greenpeace had launched
"fierce attacks" on its U.S. subsidiaries, though he
declined to give more specifics.


6. Mizuki Takana, Oceans Campaigner at Greenpeace Japan,
told us that Greenpeace International had published
reports on its website about Nissui's involvement in
whaling from late November to December 2005 as part of
its campaign called "Defending Our Oceans". This led
some grocery store chains in California to exclude
products of Nissui's U.S. subsidiary Gorton's, a frozen
food company, which Takana believes was the major factor
in Nissui's decision to relinquish its shares. When
Takana met with Nissui representatives in mid-November
2005, they told her that canned whale meat does not sell
well and that the company had no intention of getting
involved in whaling again, even if commercial whaling
resumed. Junko Sakuma, a journalist and long-time
whaling industry watcher, assumes that Nissui would
probably have encouraged the other shareholders to take
similar action together -- just "donating" shares to
"public organizations" -- so they could be completely off
the hook of anti-whaling pressure, to avoid further
hurting their brand image in both Japan and anti-whaling
countries.

Implications: No Change for Research Whaling
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7. Japan's major players involved in whaling uniformly
argue that the shareholder change will have no major
impact on the operations of the current Japanese lethal
research whaling program. Haruo Tominaga at the Far Seas
Fisheries Division at the Fisheries Agency of Japan (FAJ)
said that the move would simply make it clear that the
lethal research whaling program is backed by the entire
nation. Hiroshi Hatanaka, Director General of the ICR,
told EST FSN that even before the move, "we heard that
Kyodo Senpaku had never paid dividends to its
shareholders", so he believes the money flow -- the GOJ
pays subsidies to the ICR, which the ICR then pays to
Kyodo Senpaku for vessel fees including labor costs for
the crew -- will remain unchanged. Kyodo Senpaku will
continue to be the owner and operator of all the vessels.
Yoshihiko Tashiro of Tonichi Company, one of the GOJ-
accredited whale meat wholesale/processing companies,
also said that his company had not heard from the GOJ of
any possible changes to the industry. With regard to the
increased amount of whale meat expected from JARPA II,
Yamamura at Kyodo Senpaku stated in a press conference on
March 24 that the company plans to expand its business in
whale meat processing and distribution by establishing
its own subsidiary, according to the March 27 issue of
the Minato Shimbun, a fisheries trade newspaper.

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End of Commercial Whaling? More of the Same
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8. Asked about possible impacts on Japan's desire to
resume commercial whaling, Tominaga at the FAJ said that
it was "not the time to comment on that". But veteran
observers of the whaling scene interpret the latest
developments as virtually signaling the end of any
realistic quest for commercial whaling in Japan. Shigeko
Misaki, an independent whaling analyst and former adviser
to the Japan Whaling Association, said that "no one could
counter the argument that there are no longer any germs
of commercial whaling in Japan". Tetsuji Ida, staff
writer for Kyodo News, however, questions whether this
really means a victory for environmentalists, as
Greenpeace claims, since nothing has really changed.
Sakuma had a similar view and argues that the current
scale and structure of Japan's whaling operations have
reached an optimal state for the industry in terms of
capacity and supply/demand. The status quo currently
serves the vested interests of the Japanese whaling
community quite nicely, she says. Therefore, we can
expect no changes in Japan's lethal research program.
The annual GOJ subsidy to the IRC of Yen 900 million (USD
7.6 million) is unlikely to become a target of PM
Koizumi's budget-cutting reform efforts either. Sakuma
recounted that, when the Ministry of Finance once tried
to cut FAJ/ICR's whaling subsidy, it was strongly opposed
and written off by pressure from the ruling Liberal
Democratic Party's Whaling Caucus.

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COMMENT
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9. The shareholder change seems to simply reinforce the
status quo in Japan. While prospects for a resumption of
commercial whaling appear ever more dim, Japan's lethal
research whaling program is likely to become even more
entrenched while being repackaged as a public good that
benefits the entire nation. Japan's public stance on
whaling will remain unchanged, with its industry taking
on a simpler structure, less vulnerable to anti-whaling
NGOs.

SCHIEFFER