JAPANESE MORNING PRESS HIGHLIGHTS 03//09

UNCLAS SECTION 01 OF 10 TOKYO 000605

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09

Index:

Defense and security affairs:
1) Government to issue order at to Self-Defense Forces end of month
to destroy incoming missiles from North Korea (Yomiuri)
2) Cabinet approval coming for missile-intercept plan (Asahi)
3) Government considering additional sanctions on North Korea if its
launches a missile at Japan (Nikkei)
4) Defense Ministry will not budge on Okinawa request to change
Futenma relocation plan (Yomiuri)
5) Democratic Party of Japan (DPJ) to call for adding Diet approval
to the new bill allowing MSDF anti-piracy operations overseas
(Mainichi)

"Ozawa shock":
6) As a result of the political donation scandal centered on party
head Ozawa, the DPJ has been taking a flexible approach in its Diet
tactics (Tokyo Shimbun)
7) The scandal set off by the arrest of an Ozawa aide for accepting
illegal donations has upset Ozawa's election strategy to win big in
the regions (Mainichi)
8) Twenty of Nishimatsu Construction's subcontractors in northern
Japan were under the thumb of Ozawa's aide, who required them to
donate contributions (Mainichi)
9) Ozawa's order to the DPJ to end acceptance of all donations from
companies and organizations has set off debates in the ruling and
opposition camps (Nikkei)

10) Liberal Democratic Party's (LDP) Kunio Hatoyama has set up a new
political group, apparently in anticipation of making a bid for
party president (Sankei)

11) Under Kyoto Protocol, Japanese government has purchased 30
million tons of emission rights from Ukraine (Asahi)

12) Fair Trade Commission has fined 12 air cargo companies for
running a cartel (Sankei)

Articles:

1) Gov't to order SDF to destroy N. Korean missile

YOMIURI (Page 2) (Full)
March 19, 2009

Concerning North Korea's readiness to launch a ballistic missile as
a "satellite," the government decided yesterday to order the
Self-Defense Forces as early as late this month to destroy missiles
and any other projectiles to prevent their landing on Japanese
territorial soil or waters. This missile destruction order will be
issued by the defense minister in conformity with SDF Law Article
82-2 since the SDF will intercept missiles with its missile defense
(MD) system. The law stipulates that the SDF is to destroy
"ballistic missiles and the like" flying toward Japan. The
government takes the position that they include satellites and their
launching vehicles that may fall in Japan's territorial soil or
waters due to an accident or for some other reasons.

The SDF law preconditions the issuance of a missile destruction
order on the prime minister's approval. Specifically, a missile
destruction order will be issued after a cabinet decision. The
destruction order is expected to be made public.

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Meanwhile, the SDF law stipulates that the defense minister may
issue a missile destruction order to the SDF beforehand during a
certain period of time in order to provide against an emergency. In
this case, there is no need for a cabinet decision. However, the
defense ministry fears that North Korea may launch a missile after
the preissued order's expiry, according to one of the ministry's
senior officials. Given this, the government will not make public
whether it has issued a missile destruction order.

The government has not decided whether or not to issue the missile
destruction order after adopting it in a cabinet meeting.

The SDF, once it receives the order, will destroy a missile or other
projectile outside the atmosphere that will land on Japan using SM-3
missiles launched from an Aegis vessel, and if the missile slips
through, destroy it with ground-based PAC-3 missiles. If the missile
will not fall on Japan, it will not be intercepted.

2) Cabinet decision in focus for missile intercept

ASAHI (Page 4) (Full)
March 19, 2009

North Korea has recently declared its plan to launch a "satellite."
In response, the government is now studying whether it will make a
cabinet decision on a "ballistic missile destruction order" to be
issued under the Self-Defense Forces Law. The government is also
studying where to deploy the Patriot Advanced Capability 3 (PAC-3),
a land-based ground-to-air guided missile. This, however, may fan
public anxiety or incur North Korea's sharp reaction. The government
will therefore make a careful judgment.

Concerned about public unrest

The missile destruction order is prescribed in an amendment of 2005
to the SDF law. This destruction order, if issued, would be applied
for the first time. The SDF, based on this destruction order, is to
destroy missiles and any other projectiles like satellite-launching
vehicles should they land in Japan. Chief Cabinet Secretary
Kawamura, meeting the press yesterday, stated: "We must make efforts
to wipe away the people's anxieties. We're studying whatever we can
do for crisis management while anticipating every possible
situation."

There are two missile destruction orders. One is based on a cabinet
decision. This destruction order will be issued by the defense
minister to the SDF after it is adopted in a cabinet meeting. The
other destruction order is to be issued beforehand by the defense
minister without a cabinet decision. This order is intended to
provide against an emergency. A Defense Ministry official says the
order should be based on a cabinet decision. If the order is issued
at the defense minister's discretion only, the Defense Ministry will
have to be held responsible. The Defense Ministry therefore wants to
get a cabinet endorsement. One government source said: "If the
government makes a cabinet decision to adopt this order, it means
the government acknowledges that a missile may head toward Japan.
Even if North Korea does not aim at Japan, I don't know if they
think their missile is a piece of junk and might fall on Japan. As
for the rest, it's up to a political judgment."

One high-ranking government official will respect the Defense

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Ministry's judgment, saying: "As for whether a cabinet decision is
needed or not, the Defense Ministry will primarily make a judgment.
Based on that, the government will study this matter." The
government is expected to shortly hold a meeting of the chief
cabinet secretary, foreign minister, and defense minister for
coordination in the final phase.

But there are also cautious arguments about making a cabinet
decision to adopt the missile destruction order. This will make it
easy for the government to alert the nation. However, it may
heighten public fears. "This is the most important thing we should
consider," an aide to the prime minister said. A senior official of
the Cabinet Secretariat indicated that if we're in a panic and if
many people will not go out, that will only benefit North Korea.

Where to deploy PAC-3 batteries

The PAC-3 for missile interception is currently placed at nine air
defense missile detachments in the Kanto and Chubu regions. North
Korea says its "satellite" will be passing over the northeastern
districts of Japan. If it does so as North Korea says, the PAC-3
will not be able to cover the districts. The PAC-3 is capable of
covering areas within a radius of several dozen kilometers. PAC-3
batteries, when moved out for missile interception, will have to be
deployed near predesignated areas for defense. The Defense Ministry
is also thinking of mobilizing the PAC-3 batteries to the
northeastern districts. However, the ministry will have to make a
difficult judgment for where to deploy the PAC-3.

Ballistic missile destruction order for two cases

Based on cabinet decision Preordered by defense minister
Conditions If and when a missile is feared to come flying to Japan A
missile is not feared to come flying to Japan, but to provide
against an emergency
Procedures The defense minister issues with the prime minister's
approval The defense minister issues without the prime minister's
approval
Public announcement Upon a cabinet decision Not made public
Plus Easy to alert the public. Easy to ready PAC-3 deployment. Easy
to ensure civilian control. Not fan public unrest. Not irritate
North Korea.
Minus Public anxieties may spread. Order issued will be made known
to North Korea as well, highly likely to incur North Korea's
repulsion. PAC-3 deployment requires public accountability. Hard to
alert the public. Civilian control feared to be insufficient.

3) North Korean missile issue: Government seriously considering
additional sanctions, such as expanding export ban and extending
period of ban

NIKKEI (Page 2) (Abridged slightly)
March 19, 2009

The government has begun seriously considering the imposition of
additional sanction measures in reaction to the expected ballistic
missile launch by North Korea. Key options include expanding the ban
on exports and prolonging the sanctions period. At the same time,
there is a view that the impact of Japan's alone taking sanctions
would be limited. The government intends to make a decision after
monitoring developments in the North and public opinion.


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Keiji Furuya, chair of the abduction issue special committee of the
Liberal Democratic Party (LDP),made a request yesterday to Chief
Cabinet Secretary Takeo Kawamura to impose additional sanctions on
North Korea. Furuya quoted Kawamura as saying in response: "If the
North continues taking a provocative attitude, we need to impose
such sanctions."

The special committee chiefly consists of ruling party members with
hard-line views toward the North. Additional proposed sanction
measures finalized by the committee in March include: (1) extending
the sanctions period, which is to expire on April 13, for another
year instead of six months, as has been done in the past; and (2)
banning all exports of goods to North Korea. The Prime Minister's
Office (Kantei),too, has been studying steps since last week with
officials in charge from all relevant government agencies.

The government is envisaging a two-stage approach: a UN Security
Council sanctions resolution and Japan's independent sanctions.
China and Russia are reportedly reluctant to adopt a UN resolution.
Some observers think if the North launches a satellite, as claimed,
adopting a UNSC resolution would be difficult.

The opinion is gaining ground in the government and the ruling bloc
that if the UN fails to adopt a sanctions resolution, Japan should
go ahead and step up its sanctions independently. According to the
North's report to the International Maritime Organization (IMO),the
first stage of the "satellite" rocket is expected fall in the Sea of
Japan. "Since the area (designated as a danger zone by the North) is
close to Japan, we need to raise our voice regardless of reactions
of other countries," a Kantei source said.

In the event Japan imposes sanctions independently, to what extent
the step would work as pressure on the North remains unknown. Japan
has already banned North Korean ships from calling at Japanese ports
and economic exchanges between Japan and the North have been
reduced.

Given that the abduction issue has made no progress, if the North
fires another missile, Japan cannot afford to overlook it. A prime
ministerial aide took this view: "Policy-wise, there is room for
considering options, but there is no option for a political
decision."

4) Defense Ministry plans to implement Futenma relocation just as
originally planned; Environmental assessment report ready

YOMIURI (Page 2) (Excerpts)
March 19, 2009

In connection with the relocation of the U.S. Marines' Futenma Air
Station (Ginowan City, Okinawa Prefecture),the Defense Ministry has
firmed up its policy intention to go ahead with the original plan
and not alter the location of site for the alternate facility. It
will first ready a report with the results of an
environmental-assessment survey carried out in coastal portion of
Camp Schwab (Nago City, same prefecture),which is the relocation
site. Although the prefecture has sought to have the relocation site
move into the sea waters, citing the noise factor, the government in
its survey did not come up with a rational reason for complying. The
preparatory report will be presented to Governor Hirokazu Nakaima
possibly in early April.


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The governor will next prevent his view of the preparatory report,
based on the Environmental Protection Law. He is expected around
September to again assert that the site be moved into the sea. The
government aims to start construction of the new facility in 2010
and complete the relocation by 2014. Since landfill operations along
the coastline require the approval of the governor, the focus will
be on how the government responds, after hearing the view of the
governor. The U.S. side is against moving the site into the sea,
saying the plan should be implemented as originally agreed by the
U.S. and Japan.

5) Anti-piracy legislation: Use of MSDF the biggest point at issue;
DPJ sorts out points at issue, including reporting to Diet

MAINICHI (Page 2) (Abridged slightly)
March 19, 2009

Yoshitaka Koyama

In the wake of the government's presentation of anti-piracy
legislation to the Diet, the members of the Democratic Party of
Japan's (DPJ) foreign affairs and defense departments met yesterday
to sort out the main points at issue. The legislation stipulates,
"When the Japan Coast Guard (JCG) finds it difficult to deal with,
the Maritime Self-Defense Force (MSDF) shall be dispatched." In
yesterday's meeting, many indicated that the use of the MSDF was too
abrupt. The group defined the need to dispatch the MSDF as the
biggest point at issue, while deciding to seek an explanation for
it. The group also pointed out the need for Diet approval of such
dispatches.

The discussion was based on a report produced on March 17 by Policy
Research Committee Chair Masayuki Naoshima and the foreign and
defense ministers of the party's "next cabinet." One member pointed
out the option of using diplomatic efforts to promote reforms in
pirate-infested Somalia, which is in a state of anarchy. Another
member voiced the need to increase the JCG's budget to build ships
fit for long cruises.

The prevailing view at the discussion for sorting out points at
issue was that the party envisioned revisions to the government's
bill. The DPJ, however, has yet to determine its final policy
course. The members will meet again on March 19 to finalize the
points at issue.

In yesterday's meeting, the members did not discuss such options as
relaxing the weapons-use rules and expanding the scope of escort to
include foreign ships in addition to Japanese-registered -- matters
discussed in the ruling bloc. The reason is because the DPJ still
thinks the explanation of the dispatch of the MSDF was insufficient,
while the ruling camp has already endorsed the MSDF dispatch under
the SDF Law.

6) DPJ has eased its tough stance and has become flexible in Diet
tactics, reflecting the Nishimatsu scandal

TOKYO SHIMBUN (Page 2) (Excerpt)
March 19, 2009

There has been a change in the pattern of maneuvering between the
ruling and opposition camps in the Diet. The Democratic Party of
Japan (DPJ),with the arrest of the policy secretary of President

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Ichiro Ozawa for taking large amounts of donations from Nishimatsu
Construction Co., has been hit with a mood of depression that has
muted its usual confrontational stance in the Diet. In addition, the
united front among the opposition parties that had consolidated
their resolve to fight in the next Lower House election has started
to crumble, as can be easily perceived in their handling of Diet
affairs.

7) Ozawa's election strategy goes awry

MAINICHI (Page 2) (Full)
March 19, 2009

Democratic Party of Japan (DPJ) President Ichiro Ozawa's first
state-funded secretary has been arrested on suspicion of the
Political Funds Control Law. The secretary's arrest is upsetting
Ozawa's strategy of winning the next House of Representatives
election by building on the momentum from victories in major local
elections. Ozawa yesterday accepted the request from officials
connected with the gubernatorial election of Akita Prefecture that
the opposition forces should be allowed to enter the election
effectively divided. The official campaign for the Akita
gubernatorial election on April 12 will kick off March 26. Concerned
about any negative impact from his secretary's arrest, Ozawa has not
visited Chiba Prefecture, which will hold its gubernatorial election
on March 29.

"The DPJ Akita chapter has left the cooperation table of the
coalition of (the DPJ, Social Democratic Party and People's New
Party)." With this remark, officials from Rengo (Japanese Trade
Union Confederation) Akita and the SDP, who called yesterday on
Ozawa at DPJ headquarters, expressed their displeasure. Ozawa just
listened to them for about 40 minutes, skipping lunch. Two
candidates are running in the Akita race: one candidate backed by
the DPJ Akita chapter and part of the assembly members belonging to
the ruling Liberal Democratic Party (LDP) and the other supported by
the DPJ and SDP Akita chapters. After the meeting, Ozawa told
reporters: "DPJ headquarters has received no word from the
prefectural chapter. I presume that they will fight the election on
their own judgment." He then stressed: "We have agreed that we will
maintain cooperation among the opposition parties in fighting the
next general election with an eye on a change in government."

When the Yamagata gubernatorial election was held in January, Ozawa
entered Yamagata immediately before the election day to support the
candidate backed by opposition parties. The candidate defeated the
rival backed by the ruling camp. Secretary General Yukio Hatoyama
commented: "This is an expression (by the voters) that they wanted
to change the government." However, such a situation will unlikely
to occur in the Chiba and Akita gubernatorial elections. Ozawa told
Hatoyama on the 17th: "I asked (New Party Nippon leader) Yasuo
Tanaka (Upper House member) to go to Chiba to support the campaign.
I also want you to go there, since voters would listen to you." He
said to a lawmaker: "We must win at any cost. But I can't go there
now."

There is a view in the DPJ that if its candidates (in those
elections) are defeated, Ozawa should resign as the party president.
Ozawa strongly wants to win, but he has to give consideration to any
negative impact that might occur due to the donation scandal.

8) Nishimatsu Construction donations: 20 subcontractors in Tohoku

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region cooperated; Bills sent from Ozawa side

MAINICHI (Page 29) (Full)
March 19, 2009

Concerning the allegation that Nishimatsu Construction Co., a
second-tier general construction contractor, made indirect donations
to the Democratic Party of Japan (DPJ) President Ichiro Ozawa side
through its subcontractors, Mainichi Shimbun has learned that at
least 20 subcontractors in the Tohoku region had cooperated in
making such donations. They formed a voluntary organization called
Showa-Kai for that purpose. Nishimatsu compensated their payments,
by including those amounts in its payments to them for subcontracted
building construction works. It appears that the Tokyo Public
Prosecutors Office special investigation squad is continuing its
investigation, suspecting that Nishimatsu made contributions to the
Ozawa side, using one route through dummy organizations and another
route using subsidiaries and subcontractors.

According to a source connected with Nishimatsu, Showa-Kai was set
up by about 20 subcontractors in the Tohoku region more than 10
years ago. An incumbent executive of the Tohoku branch of Nishimatsu
Construction served as executive director of the organization and
called for cooperation in support of Ozawa. According to a Showa-Kai
member, since then the LDP's branch division in Iwate Constituency
No. 4 started sending a bill for 500,000 yen to the organization
annually.

Subcontractors that donated funds to the branch division received
compensations from Nishimatsu in the form of those amounts included
in its payments for subcontracted works. One member said, "If you
say that this is a roundabout donation, it may be so. We just did as
our parent company asked us to do."

Nishimatsu has donated approximately 25 million yen a year to the
Ozawa side from more than 10 years ago. The investigation squad
suspects that Nishimatsu had donated approximately 15 million yen to
that branch and Rikuzan-kai through Mirai Sangyo Kenkyu-Kai (Future
Industry Study Group) and Shin-Seiji Mondai Kenkyu-Ka (New Political
Issue Study Group) and approximately 10 million yen to the branch
division through contractors and subsidiaries. Showa-Kai is
estimated to have been involved in the greater part of the donations
made through the latter route.

9) Ozawa orders consideration of whether to completely ban donations
from corporations and organizations

NIKKEI (Page 2) (Full)
March 19, 2009

Democratic Party of Japan (DPJ) President Ichiro Ozawa met yesterday
with Secretary General Yukio Hatoyama at party headquarters. In the
wake of the alleged illegal donation scandal involving Nishimatsu
Construction Co., Ozawa instructed Hatoyama to discuss a review of
the Political Funds Control Law, including a complete ban on the
donations from corporations and organizations. The DPJ intends to
submit a bill amending the law to the current Diet session at the
earliest, after discussing the issue at its political reform
promotion taskforce (headed by Katsuya Okada).

Ozawa expressed his willingness to completely prohibit the donations
from corporations and organizations. He then pointed out: "We should

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make a clear change and do it quickly." After that, he told
reporters at party headquarters: "A complete ban is the only
effective method. If we don't do it drastically, our efforts will be
meaningless." As to whether a manifesto (set of campaign pledges)
for the next House of Representatives election will stipulate a
complete ban on such donations, he said: "I would not mind doing so,
if everyone agrees."

Ozawa's remarks on the complete ban on donations from corporations
and organizations created a stir yesterday in the government and
ruling parties. Prime Minister Taro Aso told reporters: "I don't
think we should take a view that corporate donations are bad. The
present system has existed after we had discussed for a long time on
the way of donations." LDP Diet Affairs Committee Chairman Tadamori
Oshima also told reporters: "The donation system has been made much
more open."

New Komeito Secretary General Kazuo Kitagawa took a positive stance
toward the complete ban on corporate donations. He told reporters:
"More restrictions are needed for donations from corporations and
organizations."

10) Is LDP's Hatoyama trying to form a new group?

SANKEI (Page 2) (Full)
March 19, 2009

Internal Affairs and Communications Minister Kunio Hatoyama, a
member of the Tsushima faction in the ruling Liberal Democratic
Party (LDP),is considering forming a group along with five
lawmakers belonging to the Tsushima faction, it was leaned
yesterday. Hatoyama had initially decided to hold an inaugural
meeting of the group at noon today, when the Tsushima faction holds
a regular meeting, but he has cancelled the planned meeting, since
the rumor spread faster than expected.

According to all those involved, the five lawmakers include Takamori
Yoshikawa, Tatsuharu Mawatari and Toru Toida. Hatoyama and the five
Lower House members reportedly agreed to hold a regular meeting
every Thursday the same time when the Tsushima faction's regular
meeting starts.

The six members had planned to celebrate the formation of the group
at Hatoyama's private office in Tokyo, while having lunch together.
A senior Tsushima faction member criticized the six, arguing:
"Skipping the faction's meetings is equivalent to withdrawal from
the faction."

The Tsushima faction lacks unity, as there are such groups as one
led by Mikio Aoki, former chairman of the LDP caucus in the House of
Councillors, and another one which supported Agriculture Minister
Shigeru Ishiba in last years' LDP presidential election. Hatoyama's
aide said: "Hatoyama does not have any intention to succeed Prime
Minister Taro Aso. So, he called off the meeting planned for the
19th." However, the dominant view in the Tsushima faction is that
Hatoyama is eyeing running in the presidential race.

11) CO2 emissions credits: Government to purchase 30 million tons
from Ukraine

ASAHI (Page 1) (Full)
March 19, 2009

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The government on March 18 announced that it signed a contract to
purchase greenhouse gas emissions credits for 30 million tons from
the Ukraine government. In order to achieve its goal of cutting
carbon emissions as set under the Kyoto Protocol, the government
plans to purchase emissions credits for roughly 100 million tons by
fiscal 2012. The government has now achieved 30 PERCENT of its
plan.

The government did not reveal the value of the purchases so as to
avoid a possible impact on negotiations with other countries. The
market prices of emissions credits for 30 million tons are between
45-50 billion yen. The value of the purchase this time estimated to
be lower than that level. Since the price of emissions credits have
fallen to one-third of the level last summer due to the financial
crisis, the government has judged that the timing is right for such
purchases. The cost for the purchase will be used for measures to
address global warming in Ukraine.

Japan is obligated to cut greenhouse gas emissions by 6 PERCENT in
comparison with the 1990 level. The government plans to cover 1.6
PERCENT or roughly 100 million tons through the purchases of
emissions credits. It had already obtained emissions credits for
about 23 million ton through the Clean Development Mechanisms (CDM),
under which industrialized countries that use their own technologies
and funds for projects based in developing countries to cut
greenhouse gas emissions can offset the cuts against the output of
their own country. It has achieved half of its target of obtaining
emissions credits, if the amount purchased from Ukraine is
included.

The government has signed a memorandum for purchases of carbon
dioxide emissions credits with Poland, the Czech Republic and
Hungary. It will continue negotiations with them for such
purchases.

12) Administrative surcharges totaling 9 billion yen imposed on 12
freight companies for cartel on international freight transport

SANKEI (Page 1) (Full)
March 19, 2009

Recognizing 14 major transport companies, such as Nippon Express, as
having formed a price cartel over charges for international aircargo
transport, the Fair Trade Commission (FTC) has issued an order to
end the unfair trade practices to 12 companies with the aim of
preventing a recurrence. It has sent orders to them to pay
administrative surcharges totaling approximately 9.053 billion yen.

The FTC has also issued an order to prevent a recurrence to the
Japan Aircargo Forwarders Association (JAF),a venue where the 14
companies conferred on the cartel. DHL Global Forwarding Japan
affiliated with a German postal services company was exempted from
those orders, as it voluntarily submitted information on its illegal
trade practices before coming under scrutiny. The remaining one
company had already closed business.

According to the FTC, those companies in question had made an
arrangement between September 2002 and November 2007 to shift full
fuel surcharges they were supposed to pay to airline companies onto
consigners.


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Specifics of the cartel were decided at an executive meeting of the
JAFA International Department, attended by former Transport Ministry
official-turned executives. In November 2007, when there was a press
report on the launch of an investigation by U.S. anti-trust
officials, they decided not to hold an executive meeting at Nippon
Express. The cartel was then dissolved.

European and U.S. anti-monopoly officials order airline companies
also pay fines for forming such a cartel. In Japan, however,
international air fares are exempt from the application of the
Anti-Monopoly Law.

The volume of international aircargo transport for exports in 2007
reached about 1.15 million tons. Nippon Express', Yusen Air's and
Sea Service's (Tokyo) and Kintetsu Express' (Tokyo) share of such
transport accounts for nearly 50 PERCENT .

Main companies that received an order to pay administrative
surcharges and the amounts of such charges are as follows: 2.49503
billion yen on Nippon Express; 1.72828 billion yen on Yusen Air and
Sea Service; 1.49461 billion yen on Kintetsu Express; and 851.96
million yen on Nishi Nippon Railroad Co.

ZUMWALT