THE U.S. BASE REALIGNMENT BILL: WHAT IT IS AND

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002359 SIPDIS SIPDIS TO COMUSJAPAN, FOR J00 E.O. 12958: DECL: 05/26/2017 TAGS: MARR JA MARR PARM PGOV SUBJECT: THE U.S. BASE REALIGNMENT BILL: WHAT IT IS AND WHAT IT IS NOT Classified By: AMBASSADOR J. THOMAS SCHIEFFER, REASONS 1.5 (B),(D). ¶1. (C) Summary: On May 23, the Upper House of the Diet passed legislation to support U.S. base realignment under the Defense Policy Review Initiative (DPRI). The legislation designates certain local governments as "special municipalities connected with U.S. force realignment," and will provide subsidies to those municipalities which will increase as progress is made in the local realignment plan. The bill will help ensure that DPRI remains on schedule and should temper local opposition to relocation efforts. End Summary. What It Is -------------- ¶2. (U) The Special Measures Law Concerning Smooth Implementation of the Realignment of U.S. Forces in Japan and Related SDF Forces (herein referred to as the "Realignment Law"),approved by the Lower House on April 13, passed the Upper House on May 23 by a vote of 112 in favor and 88 opposed (all LDP and New Komeito members plus one independent voted in favor). The vote for the bill occurred along strict party lines with no member of the DPJ nor any opposition party member voting in favor of the bill. The Realignment Law is valid through March 31, 2017, with a provision allowing extension up to five additional years if realignment is delayed. ¶3. (SBU) The core of the Realignment Law is the designation of "special municipalities connected with U.S. force realignment" who are eligible for 5.1 billion yen worth of Government of Japan subsidies in fiscal year 2007. The Defense Facilities Administration Agency reports that of the 69 local governments (prefectural and city) that will be directly affected by U.S. base realignment, 48 have "accepted" the DPRI process. The Government of Japan will offer subsidies based on a graduated 4-stage plan. In the event one stage is not completed the subsidy tied to the following stage will not be paid to the local government. These four stages are: 1) Accepting the Realignment Plan 2) Starting an Environmental Impact Study 3) Starting Construction Work 4) Completion of Construction ¶4. (U) The Realignment Law also allows for funding measures from the Japan Bank for International Cooperation (JBIC) to offer approximately 6 billion dollars in loans to finance the transfer of 8,000 U.S. Marine Corps personnel from Okinawa to Guam. What It Is Not -------------- ¶5. (C) The Government of Japan legislative and financing efforts of DPRI are based on "lessons learned" from missteps that occurred during the mid-90s SACO (Special Action Committee on Facilities and Areas in Okinawa) process. SACO, a previous effort to realign U.S. bases in Okinawa, stalled in large part because the 70 billion yen the Government of Japan gave to the local governments in Okinawa did not secure support for the initiative. The process outlined in the Realignment Law indicates that the Government of Japan learned from the SACO missteps and rather than front-loading the subsidies that do not guarantee sustained support for the duration of projects, the government will administer finances based on continued acceptance of the DPRI process through the graduated 4-stage plan. ¶6. (C) Focus now turns to local government officials like Mayor Katsusuke Iihara of Iwakuni city in Yamaguchi prefecture. MCAS Iwakuni is slated to accept Carrier Airwing Five (CVW5) from the wing's current home in Atsugi. The Mayor is a vocal opponent of the relocation of Iwakuni-related DPRI efforts. Prior to the passage of the realignment bill, the Government of Japan discontinued as a result of Iihara's opposition a 3.5 billion yen subsidy for the Iwakuni's plan to construct a new office building. MOFA contacts claim that the discontinuation of funding for Iwakuni was unconnected to the realignment bill and explains there is a difference between the "punishment" of subsidy discontinuation with the "rewards" of the Realignment Law. TOKYO 00002359 002 OF 002 With the knowledge that government subsidies are now linked to realignment there is growing pressure in Iwakuni for the city to take a "pragmatic" approach to realignment. Recently, the Iwakuni Chamber of Commerce and Industry have stated their desire for the subsidies. City council members characterize the subsidies as "a once-in-a-century opportunity." A city assembly member suggested that Iihara's opposition is "a serious blow to the city." SCHIEFFER