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RUCNDT/USMISSION USUN NEW YORK 6901

UNCLAS SECTION 01 OF 12 TOKYO 005202 
 
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 11/09/07 
 
 
Index: 
 
(1) Continuing talks on host nation support confirmed (Nikkei) 
 
(2) Prime Minister Fukuda to visit US, saddled with tough issues 
pending (Asahi) 
 
(3) Many hurdles should be cleared to enact new refueling bill 
(Tokyo Shimbun) 
 
(4) LDP secretary general: Lower House dissolution might come sooner 
than expected (Sankei) 
 
(5) Defense Minister Ishiba strongly denies consultation by former 
Defense Planning Division director general on amount of fuel 
supplied to US (Mainichi) 
 
(6) 100 Defense Ministry officials on Yamada Yoko's rank-based gift 
lists screened by Miyazaki (Yomiuri) 
 
(7) Reporters' roundtable on political situation -- Grand coalition 
plan continues to rock political community (Part 3) (Nikkei) 
 
(8) Concern about possible economic slowdown in age of crude oil 
costing 100 dollars per barrel: Could affect personal consumption, 
corporate performance (Sankei) 
 
(9) Food-labeling scandals coming up in succession (Akahata) 
 
ARTICLES: 
 
(1) Continuing talks on host nation support confirmed 
 
NIKKEI ONLINE NEWS (Full) 
November 9, 2007, 13:04 p.m. 
 
Visiting US Secretary of Defense Gates this morning called on 
Finance Minister Fukushiro Nukaga at the Ministry of Finance. In the 
meeting, both senior cabinet members confirmed the policy line of 
continuing working-level talks to discuss the question of revising 
the special measures agreement that enables Japan to bear the 
financial burden for stationing US forces in Japan (host nation 
support). The agreement expires at the end of next March. Prior to 
this meeting, Nukaga in a press conference this morning after a 
cabinet meeting said: "We are strictly assessing expenditures in 
every sector. We will properly assess (the host nation support), as 
well, in terms of whether we can improve its efficiency." 
 
(2) Prime Minister Fukuda to visit US, saddled with tough issues 
pending 
 
ASAHI (Page 3) (Full) 
November 9, 2007 
 
Nanae Kurashige, Toshiya Umehara 
 
Prime Minister Fukuda is to visit the United States possibly late 
next week for his first overseas trip since taking office. He wants 
to reaffirm in his meeting with President Bush the importance of 
Japan-US relations, but Japan has yet to resume its refueling 
mission in the Indian Ocean, which was halted with the expiration of 
the Antiterrorism Special Measures Law. Fukuda yesterday met with 
 
TOKYO 00005202  002 OF 012 
 
 
visiting US Secretary of Defense Gates and conveyed to him Japan's 
intention to make every effort to resume the refueling operation as 
quickly as possible, but at this point in time, there is no prospect 
for the new antiterrorism legislation that would allow a resumption 
of the refueling mission to be adopted. So far, there has been no 
progress seen on the relocation of the US Marine Corps Air Station 
Futenma in Okinawa, and discord is increasing between Japan and the 
US over the issue of whether the US should delist North Korea as a 
state sponsor of terrorism. Saddled with such tough issues, Fukuda 
will soon go to meet with Bush for the first time as prime 
minister. 
 
 Honeymoon-like alliance now getting cold; When to resume refueling 
mission unpredictable; No progress seen on realignment plans for 
USFJ 
 
"Based on the Japan-US alliance, I will actively promote Asia 
diplomacy," Fukuda said yesterday, when he met with Gates at his 
Prime Minister's Official Residence (Kantei). 
 
In his policy speech delivered immediately after taking office as 
prime minister, Fukuda indicated his way of thinking that he would 
make a "resonance" between the Japan-US alliance and Asia diplomacy. 
His US visit and his planned attendance at the East Asia summit in 
Singapore, which will occur soon after he returns from the US, are 
seen as the first steps for him to translate his diplomatic concepts 
into reality. 
 
However, when it comes to relations with the US, the fact is that 
"There is nothing good to say at present," a senior Foreign Ministry 
official commented. 
 
Japan's active contribution to the war on terrorism underpinned the 
long Koizumi-Bush honeymoon. Fukuda, as well intends to emphasize 
the need for Japan to continue the refueling operations in the 
Indian Ocean, but the Antiterrorism Special Measures Law expired (on 
Nov. 1) in the wake of the ruling bloc's defeat in the July Upper 
House election, which means that the ruling bloc controls the Lower 
House but it no longer holds a majority of seats in the Upper House. 
Consequently, the refueling mission was halted. 
 
In order to enact a special refueling bill into law, the government 
and the ruling bloc decided to extend the current session of the 
Diet until Dec. 15, and they have demonstrated their eagerness to 
resume the refueling operations. But the Democratic Party of Japan 
(DPJ) remains opposed to the refueling bill. 
 
A Pentagon official, just before Japan suspended the refueling 
mission, took the trouble to release a statement saying that "The US 
hopes for the resumption of Japan's refueling operations, but the 
suspension in itself is not a matter of a nature that will affect 
the overall alliance." Regarding Secretary of Defense Gates' visit 
to Japan this time, as well, the US is trying not to give the 
impression that his visit is taken to mean to put "foreign pressure" 
on Japan, or America's interference in the domestic affairs of 
Japan. 
 
As for the Japan-US alliance, Senior Fellow Derek Mitchell at the 
Center for Strategic and International Studies commented: "The 
foundation of the alliance remains solid." 
 
But some Asia experts in Washington have a strong sense of distrust 
 
TOKYO 00005202  003 OF 012 
 
 
in Japan for its repeated inquiries about how oil it provided was 
used, a matter that is presumably taken by the US during a war that 
is claiming a toll of many lives to be a small matter. One expert 
noted that the suspension of the refueling operations "has withered 
the growing expectations for the role Japan will play in the future 
in the operations led by the Coalition of the Willing." 
 
Japan and the US face other difficult issues in the security area, 
as well. In May 2006, the two countries agreed on the realignment of 
the US Forces Japan (USFJ), the core of which is the relocation of 
the Futenma airfield (in Ginowan City, Okinawa Prefecture). But the 
Futenma relocation has run aground in the face of local objections. 
 
On Nov. 7, the central government, after a lapse of 10 months, 
reopened a consultative council meeting with Okinawa at the Kantei. 
Chief Cabinet Secretary Machimura, when meeting with Secretary Gates 
yesterday, highlighted the Kantei's stance of leading the 
consultative council, telling the Secretary: "We want to put into 
execution realignment plans, including the relocation of the Futenma 
airfield, at a steady pace." Even so, the Kantei is not sure when 
the relocation will be completed, as Okinawa is insisting on 
altering the construction plan for a pair of airstrips planned for 
the relocation site. 
 
Furthermore, coordination with the US on the host nation support is 
proceeding with difficulty. Japan has suggested cutting Japan's 
financial contribution for the costs of the stationing of US forces 
in Japan because of stringent state finances, but the US is 
unwilling to accept Japan's proposal for a cut in host nation 
support. 
 
Discord between Japan and US over DPRK 
 
Washington is moving to remove North Korea from the list of state 
sponsors of terrorism possibly by the end of the year. Meanwhile, a 
high-level US government official commented, "We will not put Prime 
Minister Fukuda in a fix." A notice delisting North Korea is not 
expected to be sent to the Congress during the period when Fukuda is 
visiting the US. 
 
However, a team of US experts is working on disabling nuclear 
facilities in Yongbyon, North Korea. Sung Kim, director of the 
Korean Affairs desk at the US Department of State, noted, "The work 
is going smoothly, so it is possible to disable them by the year's 
end," indicating that an environment to delist North Korea is being 
prepared. 
 
With only one year left before the presidential election, the Bush 
administration, which has repeated setbacks as a result of being 
involved in the Iraq war for a longer period of time, has a desire 
to "somehow produce diplomatic results" regarding North Korea's 
nuclear issue. 
 
In his policy speech delivered in October, Fukuda stressed the need 
to "resolve the North Korean issue swiftly," but he has not found 
any way out of the current stalemate in Japan-North Korea relations. 
The concern heard in the Japanese government is that if US-North 
Korea relations make progress in a way to leave the abduction issue 
behind, anti-US sentiments in Japan could intensify. If North Korea 
is delisted, even though delisting comes after Fukuda's US tour, the 
prime minister "would be exposed to criticisms, like for what 
purposes he visited the US," a Foreign Ministry official noted. 
 
TOKYO 00005202  004 OF 012 
 
 
 
By the order of the Kantei, Administrative Vice Foreign Minister 
Shotaro Yachi therefore traveled to the US in late October and met 
with Deputy Secretary of State Negroponte and warned him: "We hope 
you will consider progress on the abduction issue when you move to 
delist North Korea. Otherwise, there will be a panic in Japan." 
 
Reportedly, Negroponte said, "We have understood well the situation 
in Japan," but he did not mention whether the abduction issue would 
be made a condition for the US to delist North Korea. Assistant 
Secretary of State Hill also has assumed the position of aiming to 
 
SIPDIS 
delist the North by the end of the year. 
 
Some in the US are concerned that if delisting North Korea provokes 
a backlash in Japan, it would hurt the environment for Japan and the 
US to address various tasks involving them and could trigger a chain 
of negative reaction, which would drive a wedge in the bilateral 
alliance. 
 
(3) Many hurdles should be cleared to enact new refueling bill 
 
TOKYO SHIMBUN (Page 2) (Full) 
November 9, 2007 
 
The government and ruling parties have decided to extend the current 
extraordinary Diet session until Dec. 15. They aim to enact a new 
antiterrorism special measures law. However, they have yet to 
determine their course to push forward with legislation since they 
cannot predict how the main opposition Democratic Party (DPJ or 
Minshuto) will respond. Meanwhile, the DPJ, which was shaken by a 
turmoil caused by President Ichiro Ozawa, intends to turn around the 
situation, stepping up its adversarial stance toward the ruling 
camp. 
 
Ruling coalition cautious about readopting refueling bill 
 
The reason for the government and ruling camp having decided to 
extend by 35 days the ongoing session is to secure enough time for 
deliberations on the new antiterrorism bill at the House of 
Councillors, avoiding an adverse effect as much as possible on the 
compilation of a state budget for fiscal 2008. However, the largest 
opposition party controls management of Diet affairs in the Upper 
House. The ruling coalition has yet to be able to read whether the 
DPJ will scrap the bill without completing deliberations or it will 
vote it down. The DPJ has its position clear that its members will 
vote against the bill. 
 
All eyes are now on whether the ruling coalition will take a vote 
again in the Lower House after the bill is voted down at the Upper 
House. There is a possibility that readopting the bill will give 
rise to a resolution of the Lower House after the opposition camp 
adopts a censure motion against the prime minister. 
 
The New Komeito, the coalition partner of the Liberal Democratic 
Party (LDP), is eager to prolong Lower House dissolution until after 
the Group of Eight summit at Lake Toya next July. The dominant view 
in the LDP is that there is no need to hurry to dissolve the Lower 
House since it is certain that the party will substantially decrease 
its seats in the next Lower House election. There is a cautious view 
also in the ruling camp that the new legislation should not be 
enacted even by resorting to readopting it in the Lower House. 
 
 
TOKYO 00005202  005 OF 012 
 
 
In a meeting yesterday of Diet Affairs Committee chairmen, Kenji 
Yamaoka of the DPJ asked the LDP's Tadamori Oshima, "Are you going 
to pass the bill even using your two-third majority?" Oshima, 
however, gave an evasive answer. 
 
A senior LDP member lamented over the situation that it does not 
appear likely that the bill will clear the Diet even though the 
current session will be extended. 
 
DPJ to try to turn the situation by stepping up the offensive 
 
There is a growing mood in the DPJ to try to turn the situation in 
the extended Diet session although the party is ostensibly opposed 
to the extension of the session. The largest opposition party 
intends to strengthen its confrontational stance toward the 
government and ruling parties as there is a sense of concern about a 
possible resolution of the Lower House. 
 
Regarding the reason for the DPJ opposing the extension of the 
current session, Deputy President Naoto Kan said, extending the 
session to enact the bill is "too lax and irresponsible" because the 
ruling camp created a political vacuum with the resignation of 
Shinzo Abe as prime minister. 
 
The DPJ, however, intends not to oppose completely the extension of 
the session. Taking advantage of the extended session, the party 
will enact such bills it sponsored as one to support hepatitis-C 
patients, as well as shed light on suspicions about former defense 
equipment trading house executive, who has been arrested on 
suspicion of embezzling corporate funds and who had excessively 
entertained former Administrative Vice Defense Minister Takemasa 
Moriya. 
 
Secretary General Yukio Hatoyama even said yesterday that his party 
 
SIPDIS 
would submit a censure motion against Fukuda to the Upper House if 
the ruling coalition readopted the bill in the Lower House. It is 
certain that the move is aimed at an early dissolution of the Lower 
House. 
 
It is not that all the DPJ members have accepted Ozawa's decision to 
continue remaining in the presidential post. "I'm not at all 
convinced," a junior lawmaker said. The unity in the party has 
instead loosened. Since it is noticeable that Ozawa's grip on the 
party has declined, it is uncertain how far the DPJ will take the 
offensive. 
 
(4) LDP secretary general: Lower House dissolution might come sooner 
than expected 
 
SANKEI ONLINE NEWS (Full) 
November 9, 2007, 11:56 a.m. 
 
Liberal Democratic Party (LDP) Secretary General Bunmei Ibuki 
indicated in a press conference this morning that depending on moves 
by the main opposition Democratic Party of Japan (DPJ), dissolution 
of the House of Representatives for a snap election might come 
earlier than expected. Commenting on the DPJ's negative response to 
the new antiterrorism special measures bill, Ibuki said: "If the 
party is overly-swayed by narrow party interests, various things 
could happen all of sudden." 
 
Ibuki stressed: 
 
TOKYO 00005202  006 OF 012 
 
 
 
"Should the party take action without considering national interests 
and the will of the public, I cannot deny the possibility that 
dissolution of the Lower House might come sooner than expected. That 
depends on what actions the DPJ will take." 
 
He thus sought to constrain the DPJ, which has made its position 
clear that it will vote against the new antiterrorism bill. 
 
(5) Defense Minister Ishiba strongly denies consultation by former 
Defense Planning Division director general on amount of fuel 
supplied to US 
 
MAINICHI online (Full) 
13:09, November 9, 2007 
 
Concerning the issue of the Defense Ministry having concealed the 
need correct the amount of oil fuel supplied to a US oiler, Defense 
Minister Shigeru Ishiba during a press conference after a cabinet 
meeting today revealed that former Maritime Staff Office (MSO) 
Defense Planning Division Director General Masayoshi Teraoka 
(retired last year) in a Diet summoning as a witness testified that 
he consulted the matter with then Defense Agency Director General 
Ishiba. He then strongly ruled out such a possibility, noting, "It 
is impossible for a division director of the MSO to consult with the 
director general under normal circumstances, and I cannot recall 
such a matter, either." 
 
He presented a shorthand note on the behind-the-door meeting of the 
Lower House Antiterrorism Special Measures Committee held on Nov. 7. 
The Joint Staff Office chairman during a press conference on May 5, 
2003 explained that the amount of fuel supplied to the US was 
200,000 gallons, but the press conference was disrupted with one 
reporter questioning that that amount was too small for supplying to 
an oiler. The former division director allegedly testified that he 
had consulted with his superiors on how to deal with this matter. 
 
In the summoning, former Division Director Teraoka also allegedly 
testified, "I think persons I consulted with or talked with included 
the Defense Policy Bureau director general, the director general of 
the Secretariat, the administrative vice minister and the director 
general at the time." 
 
Defense Minister Ishiba said, "Even if I had been consulted, it 
should have been before the former division director general 
realized the need to correct the amount." 
 
(6) 100 Defense Ministry officials on Yamada Yoko's rank-based gift 
lists screened by Miyazaki 
 
YOMIURI (Page 39) (Abridged slightly) 
November 9, 2007 
 
Yamada Corp., a Tokyo-based aviation and defense equipment trading 
house, annually made summer and winter gift lists containing the 
names of over 100 former Defense Agency (currently Defense Ministry) 
officials that was finally screened by Motonobu Miyazaki, 69, a 
former Yamada executive already under arrest on suspicion of 
embezzlement, sources said yesterday. Former Defense Agency 
officials working at Yamada after retirement played important roles 
in compiling the lists. Part of Miyazaki's business activities was 
trying to win over not only former Vice-Defense Minister Takemasa 
 
TOKYO 00005202  007 OF 012 
 
 
Moriya, 63, who was frequently treated to golf, but also other 
defense officials. This has now become clear. 
 
According to former Yamada executives, on the lists were mainly 
internal bureau officials on the assistant division director level 
and above and Ground, Maritime, and Air Staff Office officials on 
the division director level and above. The lists were produced by 
Yamada's general affairs department. 
 
Ahead of the mid-August Bon and year-end holiday seasons each year, 
the company's general affairs department compiled lists based on 
names of Defense Agency officials worth receiving seasonal gifts 
recommended by sales representatives responsible for the agency. The 
lists were then examined by Miyazaki and became final with his seal 
of approval. 
 
A former general affairs department official said that the gifts had 
been sent out after being checked by Miyazaki. The persons on the 
list were classified by Miyazaki in accordance with ranks in the SDF 
and the degree of their value to the company. Miyazaki also 
determined specifics, such as the prices of gifts and whether to 
send gifts in both seasons. 
 
The over 100 persons on the list also included a dozen or so senior 
ministry officials picked from Miyazaki's personal networks. Those 
who returned the gifts were excluded from the list, which was 
renewed annually. 
 
Miyazaki also made former Defense Agency officials working at Yamada 
after retirement obtain copies of lists of high-ticket defense 
equipment likely to be procured by the agency as well as of files of 
planned personnel changes and addresses of Defense Agency officials. 
He was believed to have paved the way for receiving orders from the 
agency by sending gifts to and lavishly entertaining promising 
officials based those data. 
 
Sauies handled by a fishery in the group were a standard gift item. 
A former Yamada employee who had been involved in making lists 
noted: "The prices started at 10,000 yen for high-class beef, crabs, 
salted salmons and so on. Prices for the ranks also rose by 10,000 
yen. The total cost came to several million yen to 10 million yen." 
 
The former senior Yamada official explained Miyazaki's business 
technique this way: "Once he found someone useful, Mr. Miyazaki 
bombarded him with gifts and entertainment. He did the same with Mr. 
Moriya. That was his approach." 
 
Defense Ministry officials on edge 
 
A tense atmosphere enveloped the Defense Ministry yesterday, the day 
Miyazaki was arrested. 
 
One senior ministry official said: "(Miyazaki's arrest) did not come 
as a surprise, because I thought the Tokyo District Public 
Prosecutors Office would take action someday. I'm afraid, however, 
that the Defense Ministry, too, might be investigated." Miyazaki has 
already found to have lavishly entertained former Vice-Defense 
Minister Moriya. He is also suspected to have sent gifts to defense 
officials and wined and dined officials other than Moriya. "Some 
colleagues are on pins and needles," another official said. 
 
(7) Reporters' roundtable on political situation -- Grand coalition 
 
TOKYO 00005202  008 OF 012 
 
 
plan continues to rock political community (Part 3) 
 
NIKKEI (Page 4) (Full) 
November 8, 2007 
 
Lower House dissolution 
 
-- How do you think (the Ozawa resignation fiasco) will affect (the 
prime minister's) decision to dissolve the Lower House for a snap 
general? 
 
A: I don't know if Lower House dissolution for a general election 
has moved away or come closer. In a normal sense, it must have moved 
away. 
 
F: He might opt for next spring after passing the FY2008 budget 
bill. He would probably want to host the G8 Summit in July. But that 
depends on whether the DPJ takes a confrontational or cooperative 
policy course. 
 
C: The Lowe House takes precedence regarding the budget bill. But 
related bills might be rejected if the DPJ opposes them in the Upper 
House. In such a case, there is no other way but to return them to 
the Lower House to readopt them there based on two-thirds clause. 
The same is true with the new refueling bill, now under discussion 
in the Lower House. 
 
B: If the matter develops into a situation in which the ruling camp 
readopts it in the Lower House, the DPJ would be pressed for a 
decision on whether to submit censure motions against the prime 
minister and other relevant ministers in the Upper House. 
 
C: Although they have no binding power, the adoption of censure 
motions would be a blow to the administration. I think Fukuda will 
venture to dissolve the Lower House rather than just watching such a 
development. 
 
-- Isn't there any chance for the prime minister to dissolve the 
Lower House early by taking advantage of the DPJ's chaotic 
situation? 
 
A: People around Fukuda think he now has greater options for 
dissolving the chamber. Until now, early dissolution has been 
envisaged only as a result of heavy pressure, but given the DPJ's 
blunder, he might now aggressively use that option. 
 
E: The DPJ fears it. After all, Ozawa, the campaign strategist, has 
admitted that bringing about regime change in the next general 
election would be difficult. Those planning to run in the next race 
on the DPJ ticket are becoming anxious as well. A veteran lawmaker 
nervously said that some might even opt to give up DPJ endorsement. 
Ways to eliminate blank constituencies also remain unclear. 
 
D: In the 2005 election, the LDP and New Komeito won over two-thirds 
of the Lower House seats. It now seems difficult for them to secure 
that level. 
 
F: A midlevel LDP lawmaker said that in view of election, it would 
be more threatening for Okada, who has a fresh image, to become DPJ 
president. In the DPJ, no one but Ozawa can paint the political 
situation. With Ozawa losing his momentum, the DPJ is bound to 
plunge into confusion. 
 
TOKYO 00005202  009 OF 012 
 
 
 
-- Did the grand coalition plan disappear altogether? 
 
C: Ozawa in his press conference on Nov. 7 dismissed the coalition 
vision. Then again, now that he has decided to stay on as DPJ 
president, the grand coalition option might resurface before the 
regular Diet session next year. If he says that he wants to form a 
grand coalition, who can stop it? 
 
A: Fukuda also tried to woo Ozawa, saying at the Diet on the same 
day, "(Mr. Ozawa) and I can understand each other. I think we can 
create something new." I think he will continue to use the "Ozawa 
card." 
 
E: In my view, no DPJ executives thinks the grand coalition vision 
is completely over. If the DPJ fails to win a majority in the next 
Lower House election, realignment might follow. 
 
(8) Concern about possible economic slowdown in age of crude oil 
costing 100 dollars per barrel: Could affect personal consumption, 
corporate performance 
 
SANKEI (Page 3) (Slightly abridged) 
November 9, 2007 
 
Futures prices of the West Texas Intermediate (WTI) on the New York 
Mercantile Exchange, the international index for crude oil prices, 
are for the first time close to the 100-dollar-per- barrel level. 
Following a sharp increase in crude oil prices, a move to increase 
prices has spilled over into wide areas, including petrochemical 
products as well as food products. If high prices continue, it would 
seriously affect corporate performance and personal consumption. 
 
Behind the sharp increase in crude oil prices is the influx into the 
crude oil money of speculative money, which has lost investment 
targets following the commotion on the financial market triggered by 
the soured Subprime loan, high-interest housing loan for people in 
low income-brackets. Fumiaki Watari, chairman of the Petroleum 
Association of Japan and Nippon Oil Corporation said, "The situation 
is apparently abnormal, because the sharp rise has been brought 
about not by the supply-demand trends but by the money game." 
 
Yasuhiko Nagata, senior research at the Institute of Energy 
Economics, Japan, has analyzed the phenomenon that investment funds 
have been poured into the crude oil market out of concern about the 
supply-and-demand trends, following a 5 PERCENT  decrease in the US 
crude oil stockpiles in the Oct-Dec quarter from the previous year's 
level. The International Energy Agency (IEA) has also revised up the 
long-term estimate for crude oil prices. Concern about price 
increases is growing due also to an increase in demand in newly 
emerging economies, such as China and India. 
 
The price of regular gasoline per liter has topped 150 yen at many 
gas stations since November 1. Voices concerned about a decline in 
demand are growing, as Idemitsu Kosan President Akihiko Tenbo said, 
"We are concerned about a decrease in demand stemming from pullbacks 
in consumer spending. 
 
Takashi Ishida, chairman of West Nippon Expressway Co., views, "The 
use of highways and the distribution of goods are stable, but it 
would not be strange even if the current price trend has affected 
recreational drivers." There are indications that the high gasoline 
 
TOKYO 00005202  010 OF 012 
 
 
prices will lead to consumers holding off on driving their cars. 
 
Some in the auto industry have expressed concern about a possible 
slump in the sale of autos, with Toyota Motors Executive Director 
Takeshi Suzuki noting, "Transportation costs and electricity bills 
will rise" and Daihatsu Company President Teruyuki Minoura noting, 
"Consumers will become unable to afford to buy cars." The high crude 
oil prices can back the popularity of compact and fuel-efficiency 
cars, the forte of Japanese manufacturers. Mitsubishi Motors 
President Osamu Mashiko sees the setback as a business opportunity, 
saying, "Automobile purchases in oil-producing countries would 
increase." The impact of the high crude oil prices on the auto 
industry is thus varied. 
 
The impact on the aviation industry is serious. The international 
index price of jet fuel shot up to 100 dollars per barrel at the end 
of October. Both Japan Airlines and All Nippon Airlines placed 
surcharges on international flight fares from October. However, if 
the prices of jet fuel continue to remain at this level, fares could 
be raised again as early as January. 
 
 With the high season for winter overseas travel just ahead, the 
tourism industry is concerned that the number of travelers going 
abroad during the year-end and New Year holiday season could fall 
below the previous year's level. 
 
Japan Airlines has decided to add about 7 yen per kilo to 
international airfreight fares to cover the rise in fuel prices, 
staring in December. The trucking industry, which has been unable to 
shift the increase in gasoline prices on transportation prices, 
complained that it is difficult to absorb the increased prices with 
management efforts, as an official of Nippon Express put it. 
 
The increased crude oil prices are also a life-or-death matter for 
the petrochemical industry, because crude oil is their major raw 
material. The price of naphtha (crude gasoline), a raw material for 
petrochemical products, per kiloliter reached 60,740 yen, up 150 
PERCENT  from the previous year's level. The IEA has estimated that 
if the price of 1 barrel of crude oil rises by more than 10 dollars, 
it would push down Japan's GDP by 0.2 PERCENT , as chief researcher 
Nagata explained. A decline in demand for oil as a result of an 
economic slowdown will likely pose a major problem also for 
oil-producing countries. 
 
(9) Food-labeling scandals coming up in succession 
 
AKAHATA (Page 3) (Full) 
November 9, 2007 
 
Apology ads and articles about food scandals involving major 
companies and smaller specialty firms have appeared on newspapers 
almost every day since early this year. It was found in January that 
Fujiya Co. made cakes with ingredients past their expiry dates. In 
June, Meat Hope in Hokkaido was found to have falsely labeled mixed 
mince as pure ground beef. In October, it was reported that 
Hinaidori Co. sold culled hens as Hinai-jidori chicken, a local 
breed, and that such confectionery companies as Akafuku Co. and 
Kiccho Co. mislabel products with improper expiration dates. The 
Akahata probes into problems with food regulations that give 
consideration to companies' profits. 
 
Priority to profits causing series of cases involving leading makers 
 
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In November, Mister Donut, a doughnut chain operated by Duskin Co. 
in Japan, acknowledged it used out-of-date syrups in some of its 
drinks. Some of the syrups were 29 days past their expiry date. 
 
Included among false labeled products are "Shiroi Koibito" (White 
beloved ones) chocolate made by lshiya Co., in August, "Akafuku" by 
Akafuku Co., which started to mislabel products 30 years ago, and 
Ofuku Mochi made by Ofukumochi Honke, which also continued 
mislabeling products with improper expiration dates for 27 years. 
 
Senba Kiccho in Fukuoka Prefecture was found to have shipped unsold 
products after they were relabeled with improper expiration dates. 
 
In the poultry processing business, Hinai-jidori and Nagoya Kochin 
have already been embroiled in fake label suspicions. 
 
Many of such companies in question continued illegal practices for 
many years. 
 
Government responsible for abolishing labeling requirement on 
production dates under pressure from US 
 
Ministry of Agriculture, Forestry and Fisheries (MAFF) Minister 
Masatoshi Wakabayashi has emphasized the companies' responsibility, 
saying: "This is an issue linked to corporate compliance." But the 
series of scandals have exposed the government's responsibility. 
 
The Liberal Democratic Party-led government abolished the labeling 
system on the dates of production under pressure from the United 
States government in 1995. The then US government applied pressure, 
calling the labeling system as a non-tariff barrier. 
 
The Japanese government instead introduced the labeling system on 
expiration dates. Under this new system, consumers find it difficult 
to learn when products were made. The government drew up guidelines 
on setting expiration dates, but how to apply the system was 
entrusted to the food industry's judgment, so there are no 
consistent ways and items for setting a deadline. 
 
Some also point out a lack of legal arrangements. The food labeling 
requirement on expiry, quality, and origin of ingredients are 
provided for in the Japan Agricultural Standards (JAS) Law, the Food 
Sanitation Law, and the Fair Trade Law. The contents of these laws 
are also inconsistent. Some voice criticism of the laws giving 
consideration to companies' interests, rather than to consumers' 
safety. 
 
The recent false labeling scandals are punishable based on the JAS 
Law under the jurisdiction of MAFF. But Satoshi Fujita, who 
authorized the book titled: "False and genuine evaluations on food," 
said: "There are no companies that were punished. MAFF has 
maintained the policy of protecting food makers." 
 
Set off by a beef-mislabeling scandal, the government amended the 
JAS Law in 2002 to introduce tougher punishments. Under the revised 
version, an individual offender is sentenced to up to one year of 
imprisonment or fined up to one million yen. A company offender is 
fined up to 100 million yen. However, offenders will be actually 
punished for the first time after they fail to follow an order three 
times. The law is still lenient for food companies. 
 
TOKYO 00005202  012 OF 012 
 
 
 
It was exposed late last month by a report to MAFF on the phone that 
about 1.4 million bottles of juice, more than 50 PERCENT  of the 
total shipping volume, were mislabeled with a false growing 
district. MAFF, however, only instructed the company to improve its 
business. 
 
In a case in which a fugu-processed product imported from China was 
labeled as a "thread-sail filefish processed product" in violation 
of the Food Sanitation Law, as well, the Ministry of Health, Labor 
and Welfare just took the step of collecting products through local 
governments. 
 
The government is now urged to change the current food regulations 
into those designed to protect consumers. The series of illegal 
practices teach us that the production day-labeling system should be 
revived and that food sanitation regulations, including the 
monitoring system and the spot inspection system, should be 
significantly strengthened. 
 
SCHIEFFER