Identifier
Created
Classification
Origin
08TOKYO82
2008-01-10 07:59:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

DAILY SUMMARY OF JAPANESE PRESS 01/10/08

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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UNCLAS SECTION 01 OF 11 TOKYO 000082 

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: DAILY SUMMARY OF JAPANESE PRESS 01/10/08


INDEX:

(1) Civil servant reform panel's draft plan proposes establishing
personnel agency and banning civil servants from contacting
lawmakers in principle (Nikkei)

(2) Civil servant system reform: Government panel proposes
introduction of compensation system to deal with improprieties,
pursue responsibility of retired government officials (Sankei)

(3) Legislature: Part 1 (a): Opposition camp controls Upper House;
DPJ also facing policy dilemma (Yomiuri)

(4) New Komeito secretary general shows understanding for permanent
legislation (Nikkei)

(5) LDP's Upper House Caucus unhappy with ruling bloc's move to
abandon plan to first handle the gasoline tax (Tokyo Shimbun)

(6) UN recognizes greenhouse gas reductions generated by Japan's ODA
project in India as CERs (Yomiuri)

(7) Gist of funding mechanism to counter global warming (Nikkei)

(8) Possibility of April panic moves closer to reality; If
revenue-related bills expired, stock price would plunge and import
product prices would surge (Sankei)

(9) Japan, U.S. agree to build 3 helipads in Okinawa training area
(Okinawa Times)

(10) Gov't enters into full-fledged coordination with Okinawa for
Futenma assessment (Okinawa Times)

(11) MOJ to establish special team tasked to investigate immigrants
with "disguised visa status" (Mainichi)

ARTICLES:

(1) Civil servant reform panel's draft plan proposes establishing
personnel agency and banning civil servants from contacting
lawmakers in principle

NIKKEI (Page 2) (Full)
January 10, 2008

It became clear yesterday that the government panel on the
comprehensive reform of the civil servant system, chaired by Toshiba
Chairman Tadashi Okamura, would produce a draft report later this
month with proposals that include the establishment of a cabinet
personnel agency to exclusively manage personnel affairs regarding
civil servants. The draft plan proposes establishing the post of
parliamentary affairs specialist to assist cabinet ministers with
Diet responses to prohibit civil servants from making direct
contacts with lawmakers. The aim is to break away from the current
bureaucratic sectionalism and eliminate collusive ties between
legislators and government officials.

Former Economic Planning Agency Director-General Taichi Sakaiya
played a central role in drafting the plan. The council will begin
discussions starting today based on the draft report. A strong
reaction is expected from the Kasumigaseki bureaucratic district

TOKYO 00000082 002 OF 011


that would lose interests. To what extent the draft plan will be
reflected in the planned final report remains to be seen.

At present, the National Personnel Authority, a third-party organ,
is responsible for making advice on hiring and salaries, the
Internal Affairs and Communications Ministry Personnel and Pension
Bureau for the management of retirement allowances, and the Finance
Ministry for the management of housing and the pension system. Under
the draft plan, such functions will be integrated into the envisaged
personnel agency, which will also be involved in the selection of
designated positions (above the councilor level) that are determined
independently by each government agency.

Parliamentary affairs specialists, along with cabinet ministers and
senior vice ministers, will offer explanations on bills to lawmakers
and do the spadework, which have been carried out by senior
government officials. Some ten parliamentary affairs specialists who
will be selected form civil servants in posts over the division
director level will be assigned to the personnel agency in
compliance with cabinet ministers' requests. Other public servants
will be prohibited from making contacts with lawmakers in
principle.

The post of national strategic staffer, a specialist on the level of
administrative vice-minister with high-level expertise and
experience, will also be established in the cabinet. The prime
minister will appoint about ten individuals from senior government
officials, academics, and the private sector in order to strengthen
the Prime Minister's Official Residence's (Kantei) ability to plan
and realize policies.

The first- and second-class employment examinations -- one of the
focuses -- will be abolished to introduce three types of tests:
general office worker, specialist, and managerial worker. The draft
also proposes appointing many general officer workers, specialists,
and mid-career workers as senior officials. The effort might end up
as no more than changing the sign boards. It is unclear whether the
measures can result in the abolition of the rigid career system.

Main points from the draft report by the civil servant system reform
council

? Establish a cabinet personnel agency to exclusively handle
personnel affairs
? Establish the post of parliamentary affairs specialist to assist
cabinet ministers with Diet responses.
? Establish the post of national strategic specialist to assist the
Kantei in policy planning.
? Prohibit civil servants other than parliamentary affairs
specialists from making direct contacts with lawmakers.
? Replace the existing employment examinations with three types of
tests: general office worker, specialist, and managerial worker.
? Actively appoint general office workers and mid-career workers as
senior officials.

(2) Civil servant system reform: Government panel proposes
introduction of compensation system to deal with improprieties,
pursue responsibility of retired government officials

SANKEI (Top play) (Excerpts)
January 10, 2008


TOKYO 00000082 003 OF 011


The government council on the comprehensive reform of the civil
servant system, chaired by Toshiba Chairman Tadashi Okamura, decided
yesterday to incorporate in its draft report a proposal for
establishing a system that will obligate retired government
officials, who are found to have committed irregularities, to return
their retirement allowances in compensation for inflicting damage on
the government. Under the current system, one is not required to
return his allowance even if he committed an irregularity that did
not escalate into a criminal case or when a penalty for it stopped
short of imprisonment. Calls for a review of the current system have
been growing in the government.

The pension record fiasco and the issue of hepatitis C by
contaminated blood products have caused heavy damage to the Social
Insurance Agency and the Health, Labor, and Welfare Ministry,
respectively. The panel's decision indicates that it takes those
issues seriously. The panel has decided that the government needs a
new system to pursue the responsibility of those who handled such
issues.

The panel is scheduled to meet today to discuss the draft report
with the aim of presenting it to Prime Minister Yasuo Fukuda later
this month. After receiving the report, the government plans to
submit what is tentatively called a civil servant system reform
basic bill to the next regular Diet session, expected to open on
Jan. 18.

Specifically, in the event a retired government official is found to
have committed an irregularity during his tenure of office, the
envisaged system allows the government which suffered loss to seek
compensation from him and a court to determine the amount of damage
in view of his ability to pay. The system also envisages the return
of retirement allowances and the confiscation of assets to cover
shortfalls.

(3) Legislature: Part 1 (a): Opposition camp controls Upper House;
DPJ also facing policy dilemma

YOMIURI (Page
UNCLAS SECTION 01 OF 11 TOKYO 000082

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: DAILY SUMMARY OF JAPANESE PRESS 01/10/08


INDEX:

(1) Civil servant reform panel's draft plan proposes establishing
personnel agency and banning civil servants from contacting
lawmakers in principle (Nikkei)

(2) Civil servant system reform: Government panel proposes
introduction of compensation system to deal with improprieties,
pursue responsibility of retired government officials (Sankei)

(3) Legislature: Part 1 (a): Opposition camp controls Upper House;
DPJ also facing policy dilemma (Yomiuri)

(4) New Komeito secretary general shows understanding for permanent
legislation (Nikkei)

(5) LDP's Upper House Caucus unhappy with ruling bloc's move to
abandon plan to first handle the gasoline tax (Tokyo Shimbun)

(6) UN recognizes greenhouse gas reductions generated by Japan's ODA
project in India as CERs (Yomiuri)

(7) Gist of funding mechanism to counter global warming (Nikkei)

(8) Possibility of April panic moves closer to reality; If
revenue-related bills expired, stock price would plunge and import
product prices would surge (Sankei)

(9) Japan, U.S. agree to build 3 helipads in Okinawa training area
(Okinawa Times)

(10) Gov't enters into full-fledged coordination with Okinawa for
Futenma assessment (Okinawa Times)

(11) MOJ to establish special team tasked to investigate immigrants
with "disguised visa status" (Mainichi)

ARTICLES:

(1) Civil servant reform panel's draft plan proposes establishing
personnel agency and banning civil servants from contacting
lawmakers in principle

NIKKEI (Page 2) (Full)
January 10, 2008

It became clear yesterday that the government panel on the

comprehensive reform of the civil servant system, chaired by Toshiba
Chairman Tadashi Okamura, would produce a draft report later this
month with proposals that include the establishment of a cabinet
personnel agency to exclusively manage personnel affairs regarding
civil servants. The draft plan proposes establishing the post of
parliamentary affairs specialist to assist cabinet ministers with
Diet responses to prohibit civil servants from making direct
contacts with lawmakers. The aim is to break away from the current
bureaucratic sectionalism and eliminate collusive ties between
legislators and government officials.

Former Economic Planning Agency Director-General Taichi Sakaiya
played a central role in drafting the plan. The council will begin
discussions starting today based on the draft report. A strong
reaction is expected from the Kasumigaseki bureaucratic district

TOKYO 00000082 002 OF 011


that would lose interests. To what extent the draft plan will be
reflected in the planned final report remains to be seen.

At present, the National Personnel Authority, a third-party organ,
is responsible for making advice on hiring and salaries, the
Internal Affairs and Communications Ministry Personnel and Pension
Bureau for the management of retirement allowances, and the Finance
Ministry for the management of housing and the pension system. Under
the draft plan, such functions will be integrated into the envisaged
personnel agency, which will also be involved in the selection of
designated positions (above the councilor level) that are determined
independently by each government agency.

Parliamentary affairs specialists, along with cabinet ministers and
senior vice ministers, will offer explanations on bills to lawmakers
and do the spadework, which have been carried out by senior
government officials. Some ten parliamentary affairs specialists who
will be selected form civil servants in posts over the division
director level will be assigned to the personnel agency in
compliance with cabinet ministers' requests. Other public servants
will be prohibited from making contacts with lawmakers in
principle.

The post of national strategic staffer, a specialist on the level of
administrative vice-minister with high-level expertise and
experience, will also be established in the cabinet. The prime
minister will appoint about ten individuals from senior government
officials, academics, and the private sector in order to strengthen
the Prime Minister's Official Residence's (Kantei) ability to plan
and realize policies.

The first- and second-class employment examinations -- one of the
focuses -- will be abolished to introduce three types of tests:
general office worker, specialist, and managerial worker. The draft
also proposes appointing many general officer workers, specialists,
and mid-career workers as senior officials. The effort might end up
as no more than changing the sign boards. It is unclear whether the
measures can result in the abolition of the rigid career system.

Main points from the draft report by the civil servant system reform
council

? Establish a cabinet personnel agency to exclusively handle
personnel affairs
? Establish the post of parliamentary affairs specialist to assist
cabinet ministers with Diet responses.
? Establish the post of national strategic specialist to assist the
Kantei in policy planning.
? Prohibit civil servants other than parliamentary affairs
specialists from making direct contacts with lawmakers.
? Replace the existing employment examinations with three types of
tests: general office worker, specialist, and managerial worker.
? Actively appoint general office workers and mid-career workers as
senior officials.

(2) Civil servant system reform: Government panel proposes
introduction of compensation system to deal with improprieties,
pursue responsibility of retired government officials

SANKEI (Top play) (Excerpts)
January 10, 2008


TOKYO 00000082 003 OF 011


The government council on the comprehensive reform of the civil
servant system, chaired by Toshiba Chairman Tadashi Okamura, decided
yesterday to incorporate in its draft report a proposal for
establishing a system that will obligate retired government
officials, who are found to have committed irregularities, to return
their retirement allowances in compensation for inflicting damage on
the government. Under the current system, one is not required to
return his allowance even if he committed an irregularity that did
not escalate into a criminal case or when a penalty for it stopped
short of imprisonment. Calls for a review of the current system have
been growing in the government.

The pension record fiasco and the issue of hepatitis C by
contaminated blood products have caused heavy damage to the Social
Insurance Agency and the Health, Labor, and Welfare Ministry,
respectively. The panel's decision indicates that it takes those
issues seriously. The panel has decided that the government needs a
new system to pursue the responsibility of those who handled such
issues.

The panel is scheduled to meet today to discuss the draft report
with the aim of presenting it to Prime Minister Yasuo Fukuda later
this month. After receiving the report, the government plans to
submit what is tentatively called a civil servant system reform
basic bill to the next regular Diet session, expected to open on
Jan. 18.

Specifically, in the event a retired government official is found to
have committed an irregularity during his tenure of office, the
envisaged system allows the government which suffered loss to seek
compensation from him and a court to determine the amount of damage
in view of his ability to pay. The system also envisages the return
of retirement allowances and the confiscation of assets to cover
shortfalls.

(3) Legislature: Part 1 (a): Opposition camp controls Upper House;
DPJ also facing policy dilemma

YOMIURI (Page 1) (Slightly abridged)
January 9, 2008

Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa
during an informal meeting with the Rengo (Japanese Trade Union
Confederation) local of Kumamoto held at a Kumamoto City hotel on
the evening of Dec. 27 slowly said: "The Upper House has adopted
bills covering the pension issue and agricultural policy. However,
in the Lower House, the Liberal Democratic Party (LDP) and the New
Komeito have not even deliberated on those bills. It is shameful.
However, nothing can be done because of an overwhelming difference
in the number of seats held by the ruling and opposition camps. It
is truly regrettable."

The Fukuda government and the ruling parties, which lost their
majority in the Upper House, and the DPJ, which is now the number
one party in the upper chamber, all feel blocked in their steering
of the Diet.

Ozawa spearheaded the move to submit DPJ-sponsored bills after the
Upper House election last July. However, blocked by the wall of
ruling camp members in the Lower House, Ozawa last fall even
searched for the possibility of forming a grand coalition with the
LDP, judging that if the DPJ were to hold policy talks with the LDP,

TOKYO 00000082 004 OF 011


it would become possible for it to follow through with its
commitments to the public.

However, he failed to obtain the understanding of the members of his
own party. His authority was damaged.

Officials of the Tax Bureau of the Finance Ministry were busy at
work on Jan. 2 despite it being the New Year's holidays. They were
drafting an amendment to the special taxation measures law in order
to extend the time limit of the provisional tax rate imposed on the
gasoline tax.

If the legislation fails to secure Diet approval by the end of
March, the provisional taxation would expire, cutting gasoline
prices by 25 yen per liter starting in April. Should that happen,
national tax revenues would drop 1.7 trillion yen a year. The result
would be a major shortfall in road construction funds.

Tax-related bills are usually submitted to the Diet in early
February. However, with the DPJ calling for a total abolition of the
provisional tax, there are no prospects for deliberations to take
place in the Upper House. The ruling coalition ordered the Finance
Ministry to prepare a bill as soon as possible.

Commenting on Diet deliberations on the draft fiscal 2008 budget,
Prime Minister Fukuda during his New Year's press conference on Jan.
4 noted, "There should not be an adverse effect on people's lives.
We must have ample opportunities for substantial talks with the DPJ,
the number one party in the opposition." If confusion affects the
passing of the budget, the administration would be driven into a
corner.

Bills submitted by the government and the ruling parties will not
clear the Upper House, while those introduced by the DPJ in Upper
House will be blocked in the Lower House. There is a possible danger
that the Diet, in which the upper and lower houses are controlled by
different parties, could become dysfunctional, since it would be
impossible key policy proposals to be adopted.

When the Fukuda administration came into office in September last
year, Ryuhei Ogawa (53),who is responsible for rating Japan's
long-term government bonds at U.S. rating company Standard and
Poors, noted in a report sent to clients: "As long as the opposition
remains in control of the Upper House, Japan faces a considerable
degree of policy risk. It is essential for it to promote structural
reforms. However, since a weakened coalition government could lead
to stalemate in steering the Diet, it could prevent us from
upgrading the ratings of long-term government bonds." Standard and
Poors had just upgraded the rating of Japan's government bonds in
April, giving high praise to Japan's progress in structural
reforms.

Prime Minister Fukuda has shown understanding about hiking the
consumption tax rate, saying, "We cannot afford to let the nation's
fiscal deficit increase any further." Ogawa took note of this
remark. However, even after his meetings with Ozawa, Fukuda was
unable to obtain any cooperation from the DPJ. Discussions on the
consumption tax issue by the government and the ruling parties have
also been put on the back-burner.

A fund manager from a certain country asked Ogawa at the Standard
and Poors' office in Singapore, "Is Japan's fiscal management all

TOKYO 00000082 005 OF 011


right?"

Citing various policies incorporated in the draft budget, such as a
freeze on an increase in elderly patients' share of medical
treatment fees, keeping special-purpose road construction revenues
as they are, and an increase in local tax allocations, all of which
require more budget funds, Ogawa had no other choice but to say, "It
will be difficult for an unstable administration to drastically
reconstruct public finances."

(4) New Komeito secretary general shows understanding for permanent
legislation

NIKKEI (Page 2) (Full)
January 10, 2008

The government has begun considering enacting a permanent law
allowing the country to dispatch the Self-Defense Forces on overseas
missions as necessary. New Komeito Secretary General Kazuo Kitagawa
yesterday showed some understanding toward such a move by saying to
the press: "The ruling bloc's project team will discuss the matter.
If common ground is found, we might submit a bill." With strong
cautious views in the party in mind, Kitagawa also presented the
following conditions as prerequisites: (1) constitutionality, (2)
clear weapons-use standards, and (3) thorough civilian control.

(5) LDP's Upper House Caucus unhappy with ruling bloc's move to
abandon plan to first handle the gasoline tax

TOKYO SHIMBUN (Page 2) (Slightly abridged)
January 10, 2008

Shunsuke Shimizu

The ruling bloc intended to first deal with a bill revising the
Special Taxation Measures Law ahead of a budget bill for 2008 in
order to keep the current temporary tax rates of the so-called
gasoline tax (including the benzine tax) beyond April. But it later
decided not to do so. This decision has met with voices of
discontent in the Upper House Caucus of the ruling Liberal
Democratic Party (LDP). Members of the caucus are concerned that
they may be forced to take responsibility one-sidedly if the current
tax rates expire (on March 31, 2008) as a result of failure to keep
them in place beyond their expiration.

"It has now become definite that gasoline prices will decline for a
while," a senior member of the LDP Upper House Caucus spat out.

The major opposition Democratic Party of Japan (DPJ) is likely to
aim to wait for the current temporary tax rates to expire by
delaying a vote on the revision bill in the Upper House. However, if
the revised bill clears the Lower House by the end of the month and
is sent to the Upper House, it is possible to enact the legislation
by the end of this fiscal year in accordance with the Constitution's
provision that states no action by the Upper House within 60 days
after receipt of a bill passed by the Lower House may be determined
by the Lower House to constitute a rejection of the said bill by the
Upper House.

If the ruling bloc gets budget-related bills to clear the Lower
House ahead of a budget bill, the opposition bloc would be certain
to vehemently oppose the ruling bloc's unusual attitude like that.

TOKYO 00000082 006 OF 011


So a plan to first deal with the gasoline tax problem ahead of the
budget bill was abandoned with a senior member of the LDP Lower
House Diet Affairs Committee noting: "If the Diet falls into
turmoil, calls for dissolution of the Lower House will erupt."

The senior lawmaker intends to have the revision bill approved as
swiftly as possible in the Lower House and prompt the DPJ to agree
to take a vote on the revision bill at the end of March, which is
the end of this fiscal year.

Even if that bill is rejected (by the Upper House) within this
fiscal year, if the bill is immediately put to a second vote in the
Lower House, it is possible to maintain the current temporary tax
rate of the gasoline tax.

One plan being considered in the LDP at present is to strongly
encourage some DPJ lawmakers who have expressed their understanding
about maintaining the current temporary tax rates for the promotion
of road construction to revolt against their party.

Meanwhile, a senior member of the LDP Upper House Caucus, which has
suffered from the offensive by the DPJ since the it has become the
top party in the Upper House by winning last summer's Upper House
election, sharply criticized the view taken by the above senior
Lower House member: "It's too optimistic if he expects the DPJ to
change its mind or some of that party to revolt against the party."

Another senior LDP lawmaker stressed: "The members of the LDP Lower
House Caucus are too lenient toward the DPJ. We must pick a fight
with the DPJ if necessary." LDP Upper House lawmakers are urging the
Lower House members, who, together with members of the junior
coalition partner New Komeito, hold an overwhelming majority of
seats there, to hold their ground against the DPJ.

(6) UN recognizes greenhouse gas reductions generated by Japan's ODA
project in India as CERs

YOMIURI (Page 18) (Excerpts)
January 10, 2008

A subway system that was constructed in India with Japan's official
development assistance (ODA) funds and its energy-conservation
technology has contributed to reducing about 40,000 tons of carbon
dioxide (CO2) emissions annually. It has been decided that Japan
will be allowed to use the reduced portion to offset its emissions
to help meet its emissions target under the Kyoto Protocol. The
United Nations Clean Development Mechanism (CDM) Executive Board
last month approved the application of this portion to the CDM -
designed to allow greenhouse reductions from projects implemented in
developing countries to offset emissions of industrialized
countries, regarded them as their certified emissions reductions
(CERs) - in response to a request by the governments of Japan and
India. This is the second Japan's ODA project to be recognized as a
CDM project, following the wind-power construction project in Egypt.
Among railway construction projects, this is the first case.

The subway system runs in and around New Delhi. The construction
started in 1997, and three lines (59 kilometers in total)
constructed in the first stage of the project started operation by

2006. The project costs approximately 278 billion yen, of which
about 163 billion yen was disbursed from the yen-loan program.


TOKYO 00000082 007 OF 011


India has concluded a contract with Japan to sell 200,000 tons of
emissions reductions to be accrued over five years to Japan Carbon
Finance (JCF),a private firm based in Tokyo and invested by 33
Japanese companies, including the Tokyo Electric Power Co. and
Nippon Oil Co.

(7) Gist of funding mechanism to counter global warming

NIKKEI (Page 2) (Full)
January 10, 2008

The following is a gist of the government's financial assistance
mechanism for developing countries to contain global warming:

"Initiation to Cool Earth 50" and aid to developing countries

? Halve the current level of greenhouse gases emitted from the
entire world by 2050.
? Three principles to be kept in designing a specific framework to
fight global warming beyond the 2012 timeframe set under the Kyoto
Protocol.


1. Include all major greenhouse gas emitters to reduce gases emitted
from the entire world beyond the timeframe set in the Kyoto
Protocol.

2. Make a flexible and diversified framework, giving consideration
to each country's circumstances.

3. Give priority to both environmental preservation and economic
development bye making use of energy-conservation and other
technologies.

Japan will offer assistance in wide-ranging areas to developing
countries that have a lofty aspiration and to developing countries
willing to change their policies in response to Japan's request - a
new form in which Japan proposes policies and cooperation.

To offer such assistance, Japan will build a new fund mechanism. The
government will consider forming a new fund mechanism on a somewhat
long-term basis and a considerably large scale, instead of
allocating the funds set aside for assistance to developing
countries in a conventional way. Japan will call on other
industrialized countries and international organs to fall in step
with Japan in order to operate the mechanism based on international
coordination.

Aid for measures to curb climate changes (reduction in greenhouse
gas emissions)

? Enhance the efficiency of energy use and proliferate
energy-conservation technology; for instance, help China improve the
efficiency of its superannuated thermal power plants. In the case of
a medium-sized power plant, an about 5 PERCENT increase in
efficiency will contribute to reducing 200,000 tons of carbon
dioxide (CO2) per unit annually.

Japan will provide China mainly with technology and other official
flows (OOF) than official development assistance (ODA) after Japan
stops offering yen loans to that nation.

Aid for developing countries to adjust themselves to climate changes
(global warming preventive measures)


TOKYO 00000082 008 OF 011


Carry out projects to cope with climate changes (in such areas as
water, agriculture, forest, and disaster-damage prevention).

Prepare and monitor documents kept in developing countries, for
instance, make plans on disaster prevention by making use of global
simulation, etc.

Improvement in access to energy

Increase the use of alternative energy sources, such as solar heat,
water power, and terrestrial heat.

Promote electrification in farm villages and assist communities, for
instance, offer aid to develop such villages while protecting the
environment, focusing on small-scale alternative energy, water, and
forests.

(8) Possibility of April panic moves closer to reality; If
revenue-related bills expired, stock price would plunge and import
product prices would surge

SANKEI (Page 5) (Full)
January 9, 2008

Ahead of the Jan.18 convocation of the ordinary Diet session, the
government and the Liberal Democratic Party-New Komeito ruling
coalition are already at odds. There is a growing conflict over the
handling of revenue-related bills between the LDP caucus in the
House of Councillors, which has called for passage of the bills in
January, and its caucus in the House of Representatives, which has
taken a cautious stance toward such passage for fear of uproar in
the ordinary session from the beginning. The main opposition
Democratic Party of Japan (DPJ or Minshuto) has called for
abolishing the current provisional tariff on the gasoline tax,
showing its stance of driving the Prime Minister to dissolve the
Lower House as early as possible. Once the regular session starts
under the present situation, the possibility of an "April panic" --
oil-buying-rush, a slump in stocks, and a steep rise in import
products -- which would directly affect consumers, will move closer
to reality.

"What is the Lower House going to do? They don't understand
anything."

"It seems they are saying please confuse the Diet to bring about an
early dissolution of the Lower House."

The above conversation was held between senior LDP Upper House
members on the afternoon of Jan. 7.

Secretary General Bunmei Ibuki is the first person who enraged the

SIPDIS
LDP Upper House executive. Appearing on a NHK talk show on Jan. 6
wearing a coat worn over armor in feudal Japan, he stated clearly:
"It is difficult to end a debate on the revenue-related bills before
the end of January."

Chief Cabinet Secretary Nobutaka Machimura also said yesterday: "We
received various views, but it is not possible in consideration of
the Diet schedule (to pass the bills in January)." Even Prime
Minister Yasuo Fukuda stated in the LDP's New Year party: "We will
walk on the right path fairly and squarely. There are some measures
but if we take them, we will lose public trust."

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All the more because Diet Affairs Committee Chairman Tadamori Oshima
stated in a meeting in late last year of the Diet affairs chiefs
from the two chambers that the revenue-related bills would be
enacted before the end of March by using the two-thirds majority
vote in the Lower House, the LDP caucus in the Upper House insisted
that's not the way they understood it. A senior LDP Upper House
member grumbled: "The Lower House still does not understand a fear
of April panic."

If the bills do not clear the Lower House by the end of January,
they will not be readopted with a two-thirds lower chamber majority
override vote, which is allowed by law after 60 days after they were
sent to the Upper House. If such happens, about 1000 special
taxation measures would automatically lose effect at midnight on
April 1.

If the current provisional tariff, including the gasoline tax,
becomes invalid, the cost of gasoline would drop by about 25 yen per
liter, causing long lines of cars gassing up at gas stations. If the
invalidation is prolonged, there would be pressure for a review of
the road maintenance and improvement plan, and measures to modify
the state budget would be needed.

What is more serious is the special government bond law, a legal
basis for the issuance of deficit government bonds, expires. If the
law expires, the government would not be able to issue
deficit-covering bonds, resulting in a revenue shortfall. In order
to cover such a shortfall, the calculation is that it would be
necessary to hike the consumption tax by eight percent.

If tariff special measures for about 420 import products are
abolished, the import beef rate would rise sharply from 38.5 PERCENT
to 50 PERCENT .

Tax deduction for capital investment and tax breaks for foreign
companies would also be abolished. Special measures for Tokyo
Offshore Market (market scale of about 60 trillion yen),which loans
deposits by foreign firms, are discontinued, financial markets would
be thrown into confusion. As a result, the trend of "selling Japan"
might be accelerated.

In a meeting on Jan. 8 of the secretaries general and Diet affairs
chiefs of the LDP and the New Komeito, Ibuki stated: "Since passage
of the revenue-related bills is precondition for the budget bill,
there is no theoretical problem for them to be discussed before the
budget." Many in the LDP Lower House have a faint hope that the
bills will be enacted by the end of March, with one mid-level
lawmaker saying, "Since there is no doubt that the opposition wants
to avoid a panic, they are supposed to respond to a vote on them."
However, a senior LDP member in the Upper House stated clearly:
"What lies at the end of panic is the resignation of the cabinet en
masse or Lower House dissolution. The opposition will never
compromise with us."

Mikio Aoki, former LDP Upper House chairman, who has a strong
behind-the-scenes influence as the political boss in the upper
chamber, told persons close to him: "When fighting, the party which
has more members than the other one will win. I want the party with
more members to fight it out."

(9) Japan, U.S. agree to build 3 helipads in Okinawa training area

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OKINAWA TIMES (Page 2) (Full)
January 10, 2008

TOKYO-Japan and the United States yesterday held a meeting of their
intergovernmental joint committee and agreed to build three helipads
on the northern side of the U.S. military's training area in Okinawa
Prefecture's northern village of Kunigamison. The training area has
six helipads, which are to be relocated after the training area is
partially returned into local hands. The Japanese government will
now enter into an agreement with a contractor to start construction
work.

In March last year, the Japanese and U.S. governments agreed to
build the other three helipads on the training area's southern side
straddling the villages of Kunigamison and Higashison. The Japanese
government started construction work there in July last year. The
Defense Ministry says the new helipads will be built in about two
years. The ministry plans to complete construction work in July

2009.

According to the Defense Ministry, the six new helipads are
round-shaped with a diameter of 45 meters. Each helipad has a
15-meter safety clearance zone on both sides. The three helipads on
the training area's northern side are estimated at 400 million yen
on a contract basis. Japan and the United States have agreed in a
final report of the Japan-U.S. Special Action Committee on
Facilities and Areas in Okinawa (SACO) to return the training area
in part to the extent of about 3,987 hectares.

The six new helipads will be handed over to the U.S. military after
they are all completed, the Defense Ministry says. The training
area's partial return is expected to take place in July 2009 or
after.

(10) Gov't enters into full-fledged coordination with Okinawa for
Futenma assessment

OKINAWA TIMES (Page 1) (Full)
January 10, 2008

TOKYO-The government yesterday entered into full-fledged
coordination with Okinawa Prefecture to start an environmental
impact assessment in early February for the relocation of the U.S.
Marine Corps' Futenma Air Station to a coastal area of Camp Schwab
in the prefecture's northern coastal city of Nago. Okinawa Gov.
Hirokazu Nakaima yesterday met with Chief Cabinet Secretary Nobutaka
Machimura and Deputy Chief Cabinet Secretary Masahiro Futahashi at
the prime minister's office to confirm that the government will hold
its next consultative meeting with officials from Okinawa's
prefectural and municipal governments at an early date to discuss
the environmental assessment. In the next meeting, Okinawa
Prefecture is expected to approve the government's proposal to
sample corals for its environmental assessment.

Okinawa Prefecture has asked the government to think twice about how
to survey the relocation site's environs and release its forecast of
the possible impact of Futenma relocation on the environment before
conducting the environmental assessment. "I have told the Defense
Ministry to give (Okinawa Prefecture) more detailed explanations," a
high-ranking government official said. This official also said,
"There are not so difficult problems." The official expects that the

TOKYO 00000082 011 OF 011


government and Okinawa Prefecture can agree in the next consultative
meeting to set about the environmental assessment, saying: "There
are not so many difficulties. We are now ready to go ahead."

Gov. Nakaima is to set forth his statement on Jan. 21 about the
government's environmental assessment plan. The government is now
coordinating with Okinawa Prefecture to hold the next consultative
meeting late this month after that. The government plans to lay down
a V-shaped pair of airstrips on the premises of Camp Schwab as an
alternative for Futenma airfield. Okinawa Prefecture and Nago City
have proposed moving the construction site to an offshore area. The
government is expected to exchange views with Okinawa's prefectural
and municipal governments on this proposal in the next consultative
meeting.

(11) MOJ to establish special team tasked to investigate immigrants
with "disguised visa status"

MAINICHI (Page 3) (Full)
January 3, 2008

Takashi Sakamoto

The Ministry of Justice's (MOJ) Immigration Bureau decided to form a
special team tasked to analyze information about and lay bare
immigrants with "disguised residential status" as the number of
cases of foreigners working beyond their initial visa status granted
by Japan is on the rise.

The revised law on the Employment Promotion Law, which includes a
system for employers to report to the Ministry of Health, Labor and
Welfare (MHLW) about names of foreign employees and other items,
went into effect in last October. With this kind of information
available to the MOJ, the Immigration Bureau now can constantly
grasp the situation of employment and separation of foreign workers.
This information is said to be helpful to examine, for instance, the
case of an immigrant with a student visa continuing to work at a
restaurant or the case of an immigrant who entered Japan in the
disguise of being a wife of a Japanese national working at a place
far away from her house.

The special team was formed in last October and consists of 58
officials coming mainly from the Tokyo Immigration Bureau. Of them,
15 are engaged in analyzing information provided by the MHLW, and 43
engaged in investigating and exposing cases of foreign nationals
illegally working here in Japan. If the MOJ finds foreign nationals
are working without working visas, it will cancel their residential
status and take the procedures for deportation.

There were 594 cases of immigrants with disguised visa status in
2001, but the number of those cases exposed in 2006 reached 1,736.
"It is difficult to expose immigrants with disguised visa status
unlike fake passports. All we can do is to expose a small fraction
of the real figure," a senior immigration official said.

Meanwhile, some people express concern about the application of the
reporting system to foreign workers. For instance, the Japan
Federation of Bar Association has lodged a protest against the
reporting system, citing the reason that the system violates
foreigners' privacy.

DONOVAN