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UNCLAS SECTION 01 OF 07 TOKYO 001026 
 
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 03/09/07 
 
 
INDEX: 
 
(1) Interview with Prime Minister Shinzo Abe on constitutional 
revision 2 
 
(2) Civil service reform plan follows wild path; Reform Minister 
Watanabe isolated in government with no assistance from Abe 
 
(3) Bid-rigging practices - Plunge scalpel into collusive ties (Part 
1): Lenient measures leaving corrupt structure deep seated 
 
(4) US military bases-related income reaches 200.6 billion yen, 5.3% 
of total income of citizens in Okinawa in FY 2004 
 
ARTICLES: 
 
(1) Interview with Prime Minister Shinzo Abe on constitutional 
revision 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
March 8, 2007 
 
Tokyo Shimbun: "Many Liberal Democratic Party lawmakers are calling 
for enacting national referendum legislation by May 3, Constitution 
Day." 
 
Prime Minister Abe: "Under Article 96, constitutional revision 
requires a set of procedures, but the Diet has failed over the last 
six decades to undertake work to support those procedures with 
legislation. In terms of fulfilling its original goal, there is 
every reason for the LDP to desire to enact the legislation by 
Constitution Day as a symbol." 
 
TS: "What is your image of what the new Constitution should be?" 
 
SIPDIS 
 
Abe: "(In the fall of 2005) marking its 50th anniversary, the LDP 
adopted a draft constitution. I think we will proceed with the 
debate in a way that the draft constitution can win support from as 
many lawmakers as possible." 
 
TS: "Will the LDP plan serve as the base in drawing up specific 
 
SIPDIS 
plans with other parties?" 
 
Abe: "I think so." 
 
TS: "Are there any specific themes that you want to make a public 
 
SIPDIS 
appeal in the course of discussion?" 
 
Abe: "As the debate proceeds, the best modality for local 
governments and decentralization would be firmed up, as well. The 
question of how to describe the regional bloc system in the 
Constitution would be discussed in pushing ahead with the Hokkaido 
regional bloc system special zone promotion legislation that was 
enacted last year." 
 
TS: "The government plans to undertake research on individual cases 
 
SIPDIS 
on the nation's exercising of its right to collective self-defense. 
When are you going to produce a conclusion?" 
 
Abe: "The international situation and the environment surrounding 
national security have changed dramatically. Given the government's 
responsibility for protecting people's lives and property, we must 
not spend too much time on it." 
 
TOKYO 00001026  002 OF 007 
 
 
 
TS: "As for the comfort women issue, your view is that there was no 
 
SIPDIS 
proof that Asian women were forcibly recruited to provide sexual 
services for Japanese solders during World War II. Are you planning 
to review the Kono Statement that expressed the government's apology 
and remorse?" 
 
Abe: "There has been no change in my plan to honor the Kono 
Statement. The (draft) resolution (by the US House of 
Representatives seeking the prime minister's apology) is based on 
factual errors, however. There were no documents proving that 
constituted authorities had rounded up Asian women forcibly." 
 
TS: "Do you intend to explain the matter properly to other 
 
SIPDIS 
countries?" 
 
Abe: "I think I have offered additional explanations on the Kono 
Statement. But time and again, my explanations were over-interpreted 
and were not correctly carried to other countries and that drew 
negative reactions as a result. That's why I called them 
'unproductive.'" 
 
Commentary 
 
Although Prime Minister Abe has repeatedly underlined the need for 
constitutional revision, he has rarely discussed specifically what 
part of the Constitution must be revised. 
 
In the interview with the Tokyo Shimbun, he revealed a plan to 
revise the Constitution to specify the introduction of the regional 
bloc system, which is expected to facilitate decentralization and 
civil service reform - challenges bigger than what the Abe 
administration has been addressing. Coming up with clear directions 
for those challenges will not be easy, however. 
 
Discussing specifics about the envisaged constitutional revision at 
this point when national referendum legislation has yet to be 
established involves risks. 
 
Despite that, Abe touched on the regional bloc system apparently 
based on his self-reflection of the Abe administration, which is now 
in its sixth month. 
 
Although the Abe administration has been addressing a wide range of 
policy challenges, its support ratings have been plummeting. The 
prime minister seems to have switched his course to addressing 
larger themes for making Japan a beautiful country, regardless of 
opinion polls on his short-term goals. 
 
Constitutional revision lies at the roots of the creation of a 
beautiful country. 
 
Abe expressed his hope for an early enactment of national referendum 
legislation, as well. He is likely to continue sending strong 
messages on constitutional revision. 
 
(2) Civil service reform plan follows wild path; Reform Minister 
Watanabe isolated in government with no assistance from Abe 
 
ASAHI (Page 2) (Abridged) 
March 9, 2007 
 
A plan to reform the public servant system featuring a ban on 
 
TOKYO 00001026  003 OF 007 
 
 
amakudari (senior bureaucrats retiring into key jobs in public 
corporations or private firms closely linked to their government 
roles) is following a wild path. Administrative Reform Minister 
Yoshimi Watanabe, who is in charge of civil service reform, aims to 
totally ban ministries and agencies from arranging for retiring 
bureaucrats to get cushy jobs. Watanabe intends to project himself 
as a "fighting minister" by modeling his approach on the style of 
former Prime Minister Koizumi, who constantly fought the "forces of 
resistance." But Watanabe's plan has drawn stiff objections from 
bureaucrats, Liberal Democratic Party lawmakers, and other cabinet 
ministers. The administrative reform minister now finds himself left 
high and dry in the government with no support from Prime Minister 
Shinzo Abe. The growing power of the Kasumigaseki bureaucratic 
district stands out against the backdrop of work to submit related 
bills to the Diet in the current session. 
 
The LDP committee on reform of the civil servant system met at party 
headquarters yesterday in which Administrative Reform Minister 
Watanabe explained a plan to establish a human resource bank after 
banning government offices from making arrangements for 
postretirement jobs. Hearing Watanabe's explanation, Upper House 
Causes Secretary General Toranosuke Katayama warned that a lack of 
trust of bureaucrats would hinder the plan. 
 
Watanabe aims to insert a surgical knife into the amakudari system, 
which is regarded as the hotbed of bureaucrat-initiated bid rigging, 
by eliminating the senior government officials' practice of securing 
postretirement jobs for senior bureaucrats to push for early 
retirements. 
 
Watanabe's plan elicited strong objections from attendants. In the 
session, 23 attendants voiced their opinions, and of them, only a 
few supported Watanabe's plan. The LDP's opposition before the 
meeting was so strong that Watanabe was barely able to hand out only 
two-page documents to the committee members. 
 
The LDP's gaze at Watanabe has been cold from long before. Katayama 
and LDP Administrative Reform Promotion Headquarters chief Koki 
Chuma, a former administrative reform minister, are skeptical that 
Watanabe's plan to prohibit government offices from arranging jobs 
for retiring bureaucrats will become reality. 
 
After the meeting, headquarters secretary general Yoichi Miyazawa 
told reporters: "(Documents produced by Watanabe) do not mirror the 
government's view. The government must draw up bills on its own." 
 
LDP lawmakers' strong objections come from an acute sense of alarm 
in the Kasumigaseki district about the gloomy outlook for the 
amakudari system. Between February 28 and March 5, Watanabe 
interviewed officials responsible for personnel affairs from such 
offices as the Finance Ministry and the Health, Labor, and Welfare 
Ministry in an effort to find out the actual situation of amakudari. 
In the interviews, all officials denied the existence of a system to 
force amakudari jobs on retiring bureaucrats. 
 
This prompted Watanabe to aim at a system allowing retiring 
bureaucrats to openly exploit their experiences. 
 
But in an informal cabinet meeting on Feb. 27, such members as 
Foreign Minister Taro Aso and Finance Minister Koji Omi complained 
that Watanabe's idea was void of real substance. 
 
Abe remains elusive 
 
TOKYO 00001026  004 OF 007 
 
 
 
Prime Minister Abe has yet to clarify where he stands about 
eliminating the amakudari system. Abe simply said at his official 
residence last night: "I think Administrative Reform Minister 
Watanabe has been finalizing concrete measures in line with the 
government's policy to eradicate the amakudari practice." 
 
The debate on the appropriateness of ministries and agencies making 
arrangements for postretirement jobs started with the Dec. 7 meeting 
of the Council on Economic and Fiscal Policy (CEFP). In the session, 
private-sector members presented a proposal calling for a ban on 
government bureaus from helping retiring officials land lucrative 
jobs in the private sector, saying that they would eventually make 
moves to obtain favors from government agencies of behalf of their 
new employers. The idea was similar to Watanabe's plan. 
 
The proposal drew objections from participating cabinet ministers, 
including Finance Minister Omi and Economy, Trade, and Industry 
Minister Akira Amari, who underlined the need to help senior 
government officials find jobs outside the government as they near 
their retirement age. 
 
Two days before the CEFP meeting, Deputy Chief Cabinet Secretary 
Junzo Matoba, a former Finance Ministry official, was briefed on the 
proposal in advance. Matoba rebutted the proposal, saying, "It's 
absurd to pound civil servants for the sake of elections." 
 
Witnessing strong protests from other cabinet ministers in the CEFP 
meeting, Abe did not touch on the appropriateness to prohibit 
government agencies from brokering postretirement jobs. 
 
A senior government official, who is in a position to support Prime 
Minister Abe, indicated matter-of-factly yesterday that the plan 
worked out by Watanabe, who was handpicked by Abe for the job, did 
not reflect the government's view. 
 
Abe is visibly enthusiastic for national referendum legislation. But 
he appears less eager when it comes to the amakudari issue, just 
telling Watanabe to work things out with the LDP. 
 
(3) Bid-rigging practices - Plunge scalpel into collusive ties (Part 
1): Lenient measures leaving corrupt structure deep seated 
 
NIHON KEIZAI (Page 1) (Excerpts) 
March 8, 2007 
 
The Fair Trade Commission brought criminal charges against general 
contractors for the first time on suspicion of violating the 
Antimonopoly Law with collusive arrangements to rig bids for subway 
construction projects in Nagoya. The presidents of leading general 
contractors had pledged to abandon bid-rigging practices in 2005. 
 
In October 2005, before an amendment of the Antimonopoly Law took 
effect in January 2006 to toughen penalties for violations, the 
presidents of Kajima Corp., Taisei Corp., Shimizu Corp., Obayashi 
Corp., and Takenaka Komuten Co., secretly met to discuss how to bid 
farewell to bid-rigging practices. The five companies repeatedly 
held a meeting and agreed to reassign those engaged in tenders. But 
some executives worried that their collusive practices in Nagoya and 
Hiroshima would be exposed. 
 
Among those arrested was Masahiro Shibata, former advisor to 
Obayashi's Nagoya branch. In the Tokai district, he took the lead in 
 
TOKYO 00001026  005 OF 007 
 
 
determining which firm would win tenders. In the Chubu district, a 
former managing director of Obayashi was playing the same role. The 
indictment of this managing director on suspicion of arranging 
tenders for a project offered by the Defense Facilities 
Administration Agency last March has led to a weakening of the group 
of major general contractors in Hiroshima. But the group in Nagoya 
remained influential. 
 
After the agreement was reached among the five construction 
companies, their managers, fearing a huge surcharge, called together 
their employees to bid a farewell to bid-rigging practices. Kashima 
President Nakamura said determinedly, "We will not offer retirement 
allowances to employees if they are engaged in bid-rigging 
practices." Despite this warning, an illegal case still occurred in 
Nagoya. 
 
Sales representatives in general contractors, once assigned to the 
public works section, start approaching coordinators for collusive 
arrangements to rig bids for projects in an effort to win contracts. 
Shibata reportedly had received cash or vouchers on his birthday or 
as summer or winter gifts, 500,000 - one million yen each. 
 
In the engineering industry, many orders take a joint venture 
(JV)-type formula. Once one company is shunned in the industry, the 
company finds it difficult to receive an order. That is why sales 
representatives (in charge of bid-rigging practices) give priority 
to a reputation for reliability in the industry over that within 
their companies. 
 
The Nagoya branches of several companies only too the measure of 
reassigning or transferring those in charge of tenders to other 
posts in the same branches, leaving the collusive ties intact in the 
industry. An informed industrial source said, "The presidents 
carried out 'propaganda activities,' but the steps actually taken 
were lenient." 
 
In subway construct projects in Nagoya, about 90 general contractors 
were found in 1994 to have repeatedly carried out bid-rigging 
practices. 
 
The tenders in question (held in 1988) were for projects to extend 
sections of the Sakuradori subway line in Nagoya. Since information 
on the illegal practices was leaked, a cover-up was reportedly 
undertaken. The recent scandal is similar to this case, showing that 
the corrupt structure remains in the construction industry. 
 
Company executives involved in the allegations revealed in 1994 were 
not prosecuted in the end. Around that time, Shibata began to exert 
greater influence as a coordinator. Absorbing more than five million 
workers, the construction industry has supported local economies. 
Due to strong resistance, it was difficult to plunge a scalpel in 
the industry. Given tight financial conditions, though, the budget 
for public works projects in FY2006 was reduced to 18.12 trillion 
yen, almost half that in FY1995. Big-name lawmakers working for the 
interests of construction industry have disappeared, and the revised 
Antimonopoly Law has steadily produced positive results. 
 
Although the tide is changing for the construction industry, the 
industry itself has yet to emerge from following its conventional 
system. Despite a sharp decrease in public works projects, there was 
no major change in the number of construction companies across the 
nation over the past decade. In local governments, governors who had 
cozy relations with businesses were arrested. In the central 
 
TOKYO 00001026  006 OF 007 
 
 
government, the Law to Prevent Collusive Bidding at the Initiative 
of Government Agency will be applied to the Ministry of Land, 
Infrastructure and Transport for the first time. 
 
(4) US military bases-related income reaches 200.6 billion yen, 5.3% 
of total income of citizens in Okinawa in FY 2004 
 
Ryukyu Shimpo (Page 1) (Full) 
March 8, 2007 
 
The Okinawa prefectural government's planning office announced 
yesterday afternoon an estimated amount of income related to US 
military bases. This estimate is more accurate than the past one, 
because it was worked out based on new data provided by the US 
military. The total amount of base-related income in FY2004 was 
200.6 billion yen, with money spent on transactions between military 
personnel or units and companies in Okinawa totaling 72.9 billion 
yen. The ratio of base-related income to total prefectural earnings 
(3,792.8 billion yen) was 5.3%. 
 
For the estimate announced yesterday, a different calculation method 
was used for transactions with companies in the prefecture. The 
Okinawa prefectural government has announced for the first time the 
more accurate total amount of US military base-related income and 
the value of orders from the US military. 
 
The total value of contracts for orders by the US military in Japan 
for construction projects and goods (worth more than 25,000 dollars) 
reached 80.5 billion yen. Orders placed to companies in the 
prefecture were worth 15.5 billion yen, accounting for 19.3% of 
total orders. 
 
The planning office worked out estimates for FY2003 and FY2004. It 
intends to ask the US military to continue to provide data and 
compile a similar report every year. 
 
Of income related to US military bases, the planning office was able 
to work out accurate amounts of wages paid to Japanese employees at 
US bases and payments for real estate rentals, based on budgetary 
records kept by the Defense Facilities Administration Agency, but 
the office worked out value transactions under the so-called 
"regression formula," using records related to currency exchanges 
and the like. Their accuracy therefore was questionable. 
 
An itemized statement on transactions in the prefecture in FY2004 
shows that 31.7 billion yen (43.5% of the total) was spent on 
building facilities within the base complexes, which are related to 
regional defense facilities administration bureaus; 13.1 billion yen 
(31.7% ) as expenses related to US military units, including orders 
placed on companies in the prefecture; 3.9 billion yen (5.4% ) paid 
to barbershops, cleaners and other shops; and 14.1 billion yen 
(19.4% ) spent as servicemen's household consumption fees. 
 
Of contracts concluded with companies in Okinawa, the largest amount 
of money - 364 million yen - was used to purchase other items, 
followed by 355 million yen to purchase official non-fighter planes, 
and 160 million yen for medical and dental equipment. 
 
Under the conventional calculation method, base-related income in 
FY2004 is 174.3 billion yen, which includes 46.5 billion yen in 
value transactions in Okinawa. Under the new method, the figures 15% 
higher than these were worked out. The rate of base-related income 
to total earnings of citizens was also 0.7 percentage points higher 
 
TOKYO 00001026  007 OF 007 
 
 
than the 4.6% worked out under the conventional method. 
 
SCHIEFFER