JAPANESE MORNING PRESS HIGHLIGHTS 08//06

UNCLAS SECTION 01 OF 10 TOKYO 004323 SIPDIS SIPDIS 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 08//06 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule Defense and security affairs: 4) LDP approves change in Iraq basic plan to reflect withdrawal of GSDF and expansion of ASDF services 5) Australia's foreign minister in meeting with Prime Minister Koizumi calls bilateral cooperation in Iraq a "complete success" 6) Foreign Ministry gives commendations to 75 personnel who served in Iraq 7) Three candidates for LDP presidency Abe, Aso, Tanigaki all agree on Japan's use of right of collective self-defense 8) Kadena Air Base has 400,000 rounds of DU ammunition in storage, half the amount that was used in the Gulf war 9) MSDF petty office who took frequent trips to Shanghai, kept classified documents at home, suspected of leaking such information to Chinese girlfriend 10) Minshuto President Ozawa raps JDA's white paper on defense for treating China with alarm Iran problem: 11) Iran's vice president interviewed by Mainichi dismisses UNSC resolution as having no impact on oil field development project 12) Government to explain to Iran its support for UNSC resolution, but fears impact of decision on oil development project 13) Japan fears its oil field development project in Iran is in trouble 14) JBIC loan exposure in Iran now totals 570 billion yen; Bank fears delay in repayment 15) MOFA appoints new director of China Division who is not from the "China school" 16) Three Minshuto leaders spending time deep-sea fishing off Miyake Island: Practicing their hooking and landing skills for next year's election? Articles: 1) TOP HEADLINES Asahi: Matsushita Electric Co.'s affiliate received 200 million yen in subsidies from Hyogo Prefecture for temporary hires, but later changed the status from temporary hires to contractors Mainichi: Poll on international comparison of home education: Japanese fathers spend 3.1 hours with children on weekdays, mother's 7.6 hours, giving Japan the largest gap Yomiuri: MSDF's petty officer 1st class found to have removed classified information; Frequently traveled to Shanghai to meet Chinese girlfriend, who may have connection with the other diplomat's suicide Nihon Keizai & Sankei: Oji Paper to make hostile TOB toward Hokuetsu Paper today TOKYO 00004323 002 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 Tokyo Shimbun: Girl's death in pool drain: Management company commissioned by the city found to have subcontracted maintenance Akahata: Poll: 70% say they are "worse off than last year"; 60% suffer an income decrease 2) EDITORIALS Asahi: (1) UNSC resolution: No choice for Iran (2) Economic growth will be a big task for the next administration Mainichi: (1) Girl's death in pool drain: Full-fledged safety checks required (2) UNSC resolution on Iran: Iran's efforts needed for stability in Middle East: Yomiuri: (1) Defense White Paper: Need for establishing a basis for "assured security" (2) UNSC resolution on Iran: International unity is essential Nihon Keizai: (1) Land deflation coming to an end in big cities (2) Need to resolve Iranian nuclear issue based on UNSC resolution Sankei: (1) Defense White Paper: Be alert to nearby military buildups (2) Girl's death in pool drain: Lack of awareness of danger Tokyo Shimbun: (1) Girl's death in pool drain: Every possible measure must be taken to avoid a recurrence (2) Iran required to observe resolution to avoid sanctions Akahata: Defense White Paper: Does it override the people's will? 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, August 1 NIHON KEIZAI (Page 2) (Full) August 2, 2006 10:01 Attended a cabinet meeting at Kantei. 11:00 Met deputy Chief Cabinet Secretary for Crisis Management Noda and Cabinet Office policy officer Masuda. 12:01 Met Chief Cabinet Secretary Abe. 13:43 Met Upper House member Hiroshige Seko. 14:52 TOKYO 00004323 003 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 Met LDP Kumamoto chapter chairman Mitsuhiro Koga in the presence of Lower House member Toshikatsu Matsuoka. 15:05 Incoming and outgoing Vice Agriculture Minister Kobayashi and Ishihara, followed by Foreign Vice Minister Yachi. 16:32 Attended a meeting of ministers connected with flood countermeasures. 17:33 Met Australian Foreign Minister Downer. 19:07 Dined at an Italian restaurant in Akasaka with Deputy Chief Cabinet Secretary Futahashi and assistant deputy chief cabinet secretaries SIPDIS Ando, Saka, and Yanagisawa, and others. 22:01 Returned to his residence. 4) LDP approves new masterplan for Iraq SANKEI (Page 5) (Full) August 2, 2006 The government has altered its basic plan for Japan's overseas dispatch of Self-Defense Forces personnel to assist Iraq with its reconstruction under a special measures law, and the ruling Liberal Democratic Party approved the modified masterplan in a joint meeting of its defense related panels yesterday. The masterplan was revised in response to the withdrawal of Ground Self-Defense Force troops deployed in the southern Iraqi city of Samawah and the expansion of Air Self-Defense Force activities. The government will make a cabinet decision on Aug. 4 to adopt the revised plan. The new basic plan has crossed out stipulations regarding GSDF activities. Instead, it specifies Taril and Arbil in addition to Baghdad, Basra, Mosul, and Balad for ASDF activities in Iraq. The ASDF's Iraq mission is up to Dec. 14 this year as initially planned. The revised plan says the government will conduct ASDF activities in an appropriate way, factoring in various conditions, such as: 1) progress in the political process of establishing Iraq's effective governance; 2) public security in Iraq; 3) activities conducted by the multinational force and changes in its constitutional members; and 4) progress in the reconstruction of Iraq. The original basic plan referred to the GSDF's Iraq deployment premised on "activities conducted by Britain, Australia, and other multinational force members in Iraq." 5) Australian foreign minister tells Koizumi: Cooperation between Japan and Australia was complete success ASAHI (Page 4) (Full) August 2, 2006 Australian Foreign Minister Downer, now visiting Japan, met yesterday with Prime Minister Junichiro Koizumi at his office. In the meeting, Koizumi expressed his gratitude for Australian forces' TOKYO 00004323 004 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 role of the maintenance of order in the southern Iraqi city of Samawah. Downer then told Koizumi: "Cooperation between Japan and Australia was a complete success." In his meeting with Chief Cabinet Secretary Shinzo Abe, the Australian foreign minister stated that SIPDIS his country would closely cooperate with Tokyo on North Korea's nuclear and missile issues, as well as the abduction issue. 6) Foreign Ministry gives awards to personnel who served in Iraq ASAHI (Page 4) (Full) August 2, 2006 The Foreign Ministry gave awards yesterday to 75 people who served at the embassy in Iraq or the liaison office in Samawah more than twice since the start of the Iraq war. At the ceremony held at the ministry, Samawah liaison office director Hidenobu Sobashima reported: "We were able to accomplish visible results by improving the living environment and creating jobs." Foreign Minister Taro Aso also praised their services by citing the 2003 tragedy involving Ambassador Katsuhiko Oku and First Secretary Masamori Inoue, saying: "The two lives were lost in the unforgettable, heart-breaking incident. To accomplish their wishes, you performed activities in the extremely difficult environment with a strong sense of mission." 7) 3 LDP presidential candidates favor collective defense NIHON KEIZAI (Page 2) (Full) August 2, 2006 Chief Cabinet Secretary Shinzo Abe, Finance Minister Sadakazu Tanigaki, and Foreign Minister Taro Aso remarked yesterday that they would accept Japan exercising its right to collective self-defense. The right of collective self-defense allows a country to fight back against an attack on its ally. The government, in its constitutional interpretation, has taken the position that Japan has the right but is not allowed to exercise it. Abe, meeting the press yesterday, remarked: "Not only in the LDP but also in the nation, there are people insisting on revising the Constitution to resolve the problem, and there are people saying Japan is allowed to exercise the right even in the current constitutional interpretation." Abe added, "I also think we should always keep this in mind." Tanigaki clearly said to reporters in the Diet yesterday, "I think Japan should be allowed to exercise the right of collective self-defense." However, Tanigaki also suggested the need for a national consensus based on broad discussions on constitutional revision. Meanwhile, Aso also said to reporters after yesterday's cabinet meeting, "There are various arguments about this issue, so I don't think it would be very meaningful to state my personal views." He also said, "I've always thought that it would be bad for our country to be destroyed for adhering to the law." 8) USFJ stored 400,000 DU shells at Kadena base in 2001 MAINICHI (Page 27) (Full) August 2, 2006 The US Air Force stored about 400,000 depleted uranium shells in TOKYO 00004323 005 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 2001 at its Kadena Base in Okinawa Prefecture. This fact became known from declassified US Air Force documents. The DU shells stored at Kadena are equal to about half the number used by the US Air Force in the 1991 Gulf War. In May 2000, the base revealed its storage of DU shells at its ammunition depot. However, this is the first time that the specific quantity has been revealed. In February 2001, Kyle Kajihiro, an American peace activist from Hawaii, requested the US Air Force to disclose all its records regarding the US Pacific Forces' DU ammunition. In August that year, the US Air Force disclosed documents as "records provided by the Kadena Air Base and the Osan Air Base in South Korea." One of the declassified files lists the types and quantities of DU shells. This list describes the names and quantities of five shells stored at the Kadena base, including "30MM API/HEI PGU 14B/B AJ" (i.e., 30-mm armor-piercing incendiary, high-explosive incendiary). Fighter planes are reportedly loaded with 30-mm armor-piercing incendiaries to attack tanks and armored vehicles. Kadena Air Base's DU ammo storage, classified into five categories, totaled 398,768 shells. In South Korea, the US Air Force stored 1,360,000 DU shells at Suwon Air Base, about 930,000 at Chongju Air Base, and about 450,000 at Osan Air Base. "Some of our weapons can use DU shells," a US Kadena Air Base official told the Mainichi Shimbun. "But," the official added, "it's our policy that we're not allowed to reveal anything specific about where and how much ammunition we store." The official also said, "We don't use DU shells in our training, and we fully consider the safety of DU-handling military personnel and neighboring local communities." 9) MSDF internal-use-only documents taken out of office; Petty officer 1st class repeatedly traveled to Shanghai to meet Chinese woman working at karaoke parlor frequented by Consulate General communications officer committed suicide YOMIURI (Top play) (Excerpts) August 2, 2006 A 45-year-old Maritime Self-Defense Force petty officer first class stationed at the Kamitsushima Guard Post repeatedly traveled to Shanghai, China, without leave, and kept copies of documents marked internal use only on CDs at his home, the Yomiuri Shimbun learned yesterday. The purpose of his trips was to see a Chinese woman working at a karaoke parlor catering to Japanese clientele, where a Chinese woman involved in the suicide of a Japanese Consulate General communications officer also worked. The petty officer has reportedly told MSDF investigators that he did not pass any intelligence to China. However, police authorities are conducting their own investigation, suspecting that he leaked some information. The police are attempting to determine, among other things, what kind of relationship he had with the woman. The petty officer assisted with vessel navigation duties at the Kamitsushima Guard Post in Tsushima City, Nagasaki Prefecture, since April 2004 until he was suspended from duty for 10 days in July. He is currently stationed at the MSDF Sasebo District Headquarters' administration department. According to the Defense Agency's Maritime Staff Office, a whistle-blower claimed in April that the officer was copying TOKYO 00004323 006 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 classified information and taking it out of the office and that he had been going to China without reporting the trips to his superiors. Alerted by the tip, Sasebo headquarters began an investigation and found CDs in the officer's living quarters at the Kamitsushima Guard Post that contained MSDF documents, including photographs of military ships and submarines belonging to neighboring countries. The petty officer admitted that he copied the documents by using the post's computer in February. Officers from the Sasebo headquarters also found letters from the Chinese woman at the petty officer's home. It was also found out that in order to meet the woman, he had made eight trips to Shanghai without leave during the 15-month period until this March. 10) Ozawa criticizes defense white paper for being alarmed at China ASAHI (Page 4) (Full) August 2, 2006 President Ichiro Ozawa of the largest opposition party Minshuto (Democratic Party of Japan) criticized yesterday the 2006 defense white paper that included a section urging China to increase the transparency of its defense buildup and spending. Ozawa said: "In order to eliminate a destabilizing factor, a relationship of trust must be forged first. Nothing good will come out of a confrontational mentality. Japan cannot conduct heart-to-heart talks with China, South Korea, or any other Asian countries for that matter. With China, Japan cannot discuss anything at all, and that's the problem with Koizumi politics." Ozawa was responding to questions from reporters in Miyake Island, Tokyo. 11) Iran's vice president: "We'll continue negotiations" on nuclear issue; No impact of UNSC resolution on Hinomaru oil project MAINICHI (Page 2) (Full) August 2, 2006 Eiji Maeda In an exclusive interview yesterday with the Mainichi Shimbun, visiting Iranian Vice President Rahim Mashaee criticized the United Nations Security Council's (UNSC) adoption on July 31 of a resolution threatening his country with sanctions as "unreasonable." "We'd like to sweep away international doubts about our country and continue negotiations," he said, indicating he would look for ways to resolve the issue through negotiations. Referring to the comprehensive policy package proposed by the United States, Britain, France, Germany, China, and Russia, he reiterated that Iran would come up with an answer by Aug. 22. While noting that the UNSC resolution would have no effect on the development of the Azadegan oilfield that Japan has the right to develop, he stressed Iran's intention to expand economic ties with Japan. Mashaee insisted that Iran's nuclear development is at the "research level," emphasizing his country's right to use nuclear power for peaceful purposes as a member of the Nuclear Nonproliferation Treaty (NPT). TOKYO 00004323 007 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 In addition, he stated, "Iran has no intention to manufacture nuclear weapons" and indicated an intention to continue talks focused on the proposed policy package that offers such assistance measures by European countries as constructing a light-water reactor in return for Iran's halt to uranium enrichment. Also, referring to the UNSC resolution, he pointed out that the UNSC president's statement on the Lebanon situation did not criticize Israel, arguing: "Because of pressure from the US, the UNSC has not made any criticism of Israel, which is doing bad things. (Iran) is given discriminatory treatment." "Some countries," he continued, "are manufacturing nuclear bombs with the state-of-art technology." Posing this question, "Who can guarantee that Israel will not use nuclear weapons in the Middle East?" he criticized the double standard of the US and other countries that have tacitly allowed Israel's possession of nuclear weapons. Commenting on Japan's voting for the resolution, Mashaee said, "It's undesirable," but he added, "Economic ties (with Japan) are not under any political pressure." He then emphasized: "Japan is a friendly nation. We want to expand relations in such areas as economic affairs." 12) UNSC resolution warning Iran over its nuclear development: Government to push Tehran to accept resolution out of concern over possible impact on oil development project; Japan relies on Iran for 10% of crude oil imports TOKYO SHIMBUN (Page 2 (Full) August 2, 2006 Following the adoption by the United Nations Security Council (UNSC) of a resolution warning Iran that sanctions will be considered unless it suspends its nuclear development activities by the end of August, the government will make every effort to persuade that nation to accept the resolution. That is because if sanctions are invoked, followed by the suspension of crude oil imports from that nation, the Japanese economy will suffer a major blow, as Japan depends on Iran for about 15% of crude oil imports. The development of oil fields in that nation, in which Japan has a major stake, will also be affected. Japan, a non-permanent UNSC member, supported the resolution. Chances are that if Japan supports a sanctions resolution or takes part in a coalition of the willing in response to a call from the US, Iran could take countermeasures, including the cancellation of the contract for the development of the Azadegan oil field, which Japan won in February 2004. Foreign Minister Aso yesterday noted, "The nuclear issue has priority." He thus indicated his intention to press Iran to abandon its nuclear development program, even if the oil project is "taken hostage." If full production starts at the Azadegan oil field, which is believed to have 5-26 billion barrels of reserves, this oil field is expected to become Japan's largest crude oil supplier. The government wants to continue the development of the oil field by getting Iran to abandon its nuclear development program soon. It intends to push Iran to accept the resolution at every available TOKYO 00004323 008 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 opportunity, as Chief Cabinet Secretary Abe put it. However, to what extent Japan's persuasion will work is unclear. 13) UNSC adopts resolution against Iran, warning of economic sanctions over its nuclear development activities ASAHI (Page 2) (Excerpts) August 2, 2006 Japan concerned about possible impact of resolution on oil field development Japan has given priority to the solidarity of the international community, instead of to crude oil. Chief Cabinet Secretary Abe yesterday told a news conference: "The UN resolution indicates the international community's firm stance toward Iran. It is an important step toward settling that nation's nuclear issue through diplomacy." Asked about a possible impact of the resolution on Japan's energy strategy, Foreign Minister Aso indicated a stance of attaching importance to the nuclear issue. He noted, "The nuclear issue has priority." A senior Foreign Ministry official explained, "The UN resolution censuring North Korea adopted in July served as a precedent." He also said: "The international community issued a warning in unity. The pattern is the same as the case with Pyongyang." However, if Iran does not follow the resolution before the end-of-August deadline, the possibility of the UN slapping economic sanctions on it will increase. Should that occur, it is bound to affect Japan's energy strategy. If crude oil trade with Iran, the world's fourth-largest crude oil producer, becomes subject to sanctions, it would affect the global crude oil market, sparking a further rise in prices. Japan is bound to suffer, as it depends on Iran for roughly 15% of its crude imports. In particular, some Japanese government officials are concerned over a possible impact of sanctions on the Azadegan oil field, which has the largest reserves in the Middle East. Japan's INPEX Corporation has a 75% stake in the Azadegan oil field. It is expected that once production starts, imports from Iran could cover as much as 6% of Japan's annual oil imports. If sanctions are invoked, Japan's investment in this project could be suspended. Ever since Japan obtained a stake in the Azadegan oil field in 2004, the US has repeatedly warned that the investment could benefit Iran. Some believe that if Japan withdraws from the project, China might replace Japan. A senior official of the Ministry of Economy, Trade, and Industry noted: "If China develops that oil field, replacing Japan, Iran would suffer no pressure from the resolution. Oil development is important for Japan." His comment revealed Japan's real feeling that it does not want to abandon this large energy resource. 14) JBIC reveals outstanding loan balance with Iran totals 570 billion yen as of end of March; Economic sanctions could delay repayment NIHON KEIZAI (Page 5) (Full) TOKYO 00004323 009 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 August 2, 2006 Japan Bank for International Cooperation (JBIC) Governor Kyosuke Fujisawa during yesterday's press conference revealed that the outstanding lending balance with Iran as of the end of March stood at 570 billion yen. Japan's loan claims with that nation, including yen loans, is estimated to top 600 billion yen. Chances are that if economic sanctions are invoked, that nation will fall behind in its debt repayments. Fujisawa indicated his intention to closely watch the international situation, noting, "I would like to pay full attention to the international situation." The United Nations Security Council (UNSC) in late July adopted a resolution mandating Iran to suspend its uranium enrichment-related activities. It warned that unless the nation complies with the resolution, it would invoke economic sanctions. Iran has indicated a stance of rejecting the resolution. If economic sanctions are invoked, trade and financial transactions with Iran will be effectively put on hold. Should that occur, there is a strong possibility of that nation falling behind in its debt repayments, pressing the JBIC to boost loan loss reserves. There is also concern that the matter will eventually lead to a financial burden on the nation. Fujisawa also revealed a plan to open an office in Amman, Jordan, to look into the situation regarding Iraqi reconstruction assistance. 15) Foreign Ministry to appoint official who is not a member of "China School" as China and Mongolia Division chief ASAHI (Page 4) (Full) August 2, 2006 Takeo Akiba, director of the Foreign Ministry's International Legal Affairs Division, was named new director of the China and Mongolia Division as of Aug. 1. In the past, a pattern of members of the so-called China School, who took Chinese training, assumed the China and Mongolia Division director post. The China School members are regarded as giving too much consideration to China. Akiba, who received English training, is not a China School member. Japan-China relations show signs of improvement, as seen in the holding of a foreign ministerial meeting, but mutual summit visits by top Japanese and Chinese leaders have been suspended due to Prime Minister Junichiro Koizumi's annual visits to Yasukuni Shrine. With an eye on the post-Koizumi era, the Foreign Ministry appears to be flexibly facing up to China. Akiba has engaged in consultations with China on such issues as gas exploration in the East China Sea. He has enjoyed the confidence of Asian and Oceanian Affairs Bureau Director General Keiichiro Sasae and has communication channels to the ruling and opposition parties. It has been widely viewed since late last year that Akiba would serve in the post. 16) Three Minshuto leaders go fishing off Miyake Island, Will it help them capture the political helm as well? YOMIURI (Page 4) (Full) TOKYO 00004323 010 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08//06 August 2, 2006 Minshuto (Democratic Party of Japan) President Ichiro Ozawa, Acting President Naoto Kan, and Secretary General Yukio Hatoyama yesterday visited Miyake Island (Miyake Village, Tokyo),where they boarded a boat and went deep-sea fishing together, playing up their unity. They caught about 80 fish, including parrot bass and Japanese horse mackerels. Ozawa was in the best of spirits: "What is most important in a democracy is numbers, so it was good we hauled up so many fish." The three leaders of the largest opposition party enjoyed fishing for six and a half hours from early in the morning. Fishing is one of Ozawa's hobbies. Kan and Hatoyama, however, are novices at fishing. Ozawa gave them advice about how to fish. Kan, who released a big fish, told reporters, "I think I will be good at catching fish around the fall of next year." He implied his eagerness for capturing the reins of government. SCHIEFFER