VANCOUVER, JUNE 23/10 - In Japanese, zotohin means ‘gift’ while zowai means ‘giving a bribe’ and shuwai means ‘taking a bribe.’ If you Google the words Japan bribery corruption whaling you get 1,110,000 hits - and where there is smoke there is fire, says The Humane Society of Canada (HSC).
“Eight years after it signed an international Anti-Bribery Convention aimed at reducing corruption in developing nations by combating bribery, Japan has still failed to properly implement and enforce this law and its own domestic laws against bribery. Not one single formal investigation or prosecution for bribery has been made, and that means more dead whales,” according to Michael O’Sullivan, HSC Chairman & CEO.
He says that in 2001, the IWC was so concerned about allegations of bribery and vote buying that it passed a resolution on transparency within the IWC endorsing the ‘complete independence of sovereign nations to decide their own policies and freely participate in the International Whaling Commission (IWC) without undue interference or coercion from other countries.’ Organizations like Transparency International have also expressed concerns about bribery and whaling in their Global Corruption Report 2004 (Box 5.2, page 87) as well as in an article dated June 12th, 2006 here. In the 2008 Progress Report on the Enforcement of the OECD Anti-Bribery Convention, the group again notes there is no centralized national office for foreign bribery enforcement and there is unlikely to be one in future and recommends Japan also enact an independent law against foreign bribery and establish a special intelligence unit within the National Police or the Public Prosecutors Office to tackle corruption.
Japan continues to deny longstanding allegations that the country has used its multibillion aid programs to buy the votes of small developing nations and garner their support for Japan’s ongoing slaughter of whales in defiance of an international ban. However, the voting records of the countries which receive Japanese foreign aid and their vocal support for Japan’s killing of whales along with investigations by other animal protection organization and groups indicate otherwise.
"Until the international community starts applying serious global sanctions against the Japanese Government, in our opinion, they will continue to use bribery as an instrument of their foreign policy towards whales. The Japanese whalers will never change because they see the light. They will only change because they feel the heat," says O'Sullivan.
Most troubling of all says O’Sullivan, are the four independent reports filed by a 36 country international panel made up of investigators from the OECD (Organization for Economic Co-operation and Development) which take no position one way or the other on whaling. The OECD investigators reviewed Japanese compliance with anti-bribery laws in 2002, again in 2005, a third time in 2006 and an unprecedented fourth time in 2007.Copies of their reports can be found here and more information about the OECD can be found here.
In 2005, the OECD investigators stated in part: “…Given that Japan is the second largest economy in the world, and in view of its level of exports and outward foreign direct investment, including economic activity in certain countries believed to be at high risk for soliciting bribes, the [OECD] Working Group was surprised about the absence of any formal investigations. Moreover, Japan is an important foreign aid donor, ranking second in the world behind the United States, which creates significant opportunities for public procurement contracting by Japanese companies in developing economies where the risk of bribe solicitation is particularly high. The concern of the Working Group about the absence of formal investigations was heightened by various press allegations of foreign bribery involving Japanese companies….”
The investigators also said: “… The Japanese authorities suggested that there had not been any formal investigations of foreign bribery, because there had been no instances of foreign bribery by Japanese companies doing business abroad. The [OECD] Working Group was not persuaded by this argument and recommended that the Japanese authorities assess as a priority the impediments to effective investigations and prosecutions…”
According to O’Sullivan, the OECD is learning hard lessons that he and others who have been fighting Japanese whalers for years already know: “In our opinion, the Japanese Government has absolutely no interest in cracking down on corruption and bribery. In fact, in our view, the Japanese Government instead is doing everything it in their considerable power to allow bribery and corruption to flourish,” said O’Sullivan, chronicling an litany of what in the opinion of The Humane Society of Canada believes are very well thought out and very deliberate failures in their legal system which give the appearance of concern, but are designed to ensure that no formal investigations or prosecutions take place, including:
- not a single case of bribery formally investigated or prosecuted, with the Japanese government arguing in part that even if they ever did, publicizing such cases would discourage Japanese corporations from reporting bribery because it harms the company’s investors and public image
- loopholes in the laws that foster a climate of secrecy and encourage bribery
- a 2007 amendment to government guidelines now spells out clearly that bribery includes all international business activities (overstating the obvious to the point of absurdity)
- relatively low fines and penalties
- although a 2006 amendment to existing laws means that bribes are no longer officially tax deductible, so called “facilitation payments” and “entertainment expenses” (bribes and money laundering by any other names) are in fact still tax deductible
- although a 2004 amendment to the law means a Japanese citizen making a bribe overseas can now be prosecuted in Japan this does not apply to a corporation, the entity behind the bribe
- tax authorities, one of the key agencies likely to spot bribes in conducting audits of Japanese corporations are forbidden by the tax law from disclosing this to police and prosecutors because of confidentiality and the tax law which expressely states that such information will not be used as an investigation for crimes
- although a 2006 amendment for making false financial statements raised the penalty to up to 10 years imprisonment or up to 10 million yen (USD$92,744) for individuals; and although the fines are now up to 700 million yen (USD$ 6,491,533) remember that only Japanese citizens and not the Japanese companies behind the bribe can be charged under Japanese law for overseas bribes and with not a single bribery case ever formally investigated or prosecuted, these penalties only look good on paper
- the lack of coordination between police and prosecutors
- no centralized agency to investigate and prosecute bribery
- a refusal to pass a specific law outlawing bribery
- misleading information given out by government agencies to companies about bribery and corruption
- to ask companies suspected of offering bribes to voluntarily turn over documents and records rather than using search warrants (a legal process doomed to failure from the start with the only certainty that the company’s shredders and data purgers will be working overtime)
- poor improvement in monitoring fraudulent accounting practices and no requirement for auditors to report or be held accountable for concealing bribes and an admission by auditors that even if they did for whatever reason decide to make such reports to the authorities such reports would have to based instead on how general investors in the company making the bribes would be affected
- a reluctance to work with other governments and request mutual legal assistance to conduct investigations and to provide special training for police and prosecutors
- arguing that many police and prosecutors do not speak foreign languages making it difficult to track down overseas bribes (Japanese companies do business and offer bribes all over the world in every major language and the government’s position in this regard is absolute nonsense)
- refusing to offer immunity from prosecution or plea bargaining which are critical tools to investigate and prosecute bribery saying that this goes against the values of Japanese society (however, apparently according to the Japanese government this is considered a perfectly acceptable trade-off by Japanese society which allows bribery to continue to flourish unabated)
- a Japanese prosecutor stated he would not prosecute a case of bribery without a confession from the person doing the bribing and the person receiving the bribe and another prosecutor said he would "not necessarily decline" to prosecute if there was no confessions
- there is a five year statute of limitations for any cases involving bribery
- even confessions are not routinely videotaped or tape-recorded to ensure transparency and accuracy
- Japanese law also forbids or restricts practices that prosecutors in other countries consider essential such as the discretionary power to grant immunity to witnesses giving evidence against other parties, the power to subpoena witnesses during investigations, wiretaps and undercover operations
- the whistle blower law critical to reporting bribery need to be stronger (currently Japanese citizens working overseas for Japanese companies where foreign bribery is most likely to occur are not protected by this law therefore making it virtually impossible for them to provide information about bribery)
- amendments to laws that were the subject of the four devastating OECD reports look good on paper but there is little likelihood they will ever be enforced [the statue of limitations has been increased from 3 to 5 years; and fines increased from 3 million yen (USD $ 27,091) to 5 million yen (USD $ 46,820); and the maximum sentence has been increased from 3 to 5 years; and both fines and imprisonment can be levied rather than just one or the other]
- with a population of over 30 million, and very limited natural resources, Japan imports the overwhelming majority of its raw resources and goods and in our opinion is likely to continue using bribes as an instrument of its foreign policy
- a general lack of concern on the part of the Japanese government concerning the reasons for the absence of formal investigations and prosecutions.
The 2006 OECD report asks: "... How could the Japanese government's best efforts to detect and investigate foreign bribery cases have yielded no formal investigations or prosecutions in seven years? Such an outcome seems hardly feasible, in light of the nature of Japan's economy, the number of foreign bribery allegations involving Japanese nationals or companies that have appeared in the press over the relevant period, and the level of investigative activity in other major economies that are signatories to the [international Anti-Bribery] Convention and members of the [OECD] Working Group on Bribery in International Business transactions ..."
While the 2007 OECD report starts out more diplomatically than previous reports and says in part: “…Overall, the [OECD] Working Group is satisfied that Japan has made a serious and comprehensive effort to satisfy the recommendations for an objective self-assessment (of its laws and enforcement of the anti-bribery convention)…” it then goes on to say in part: “…but also believes that three very important [OECD] recommendations were not adequately considered by Japan. More importantly, Japan has not addressed the overall concern of the [OECD] Working Group … that Japan was not sufficiently proactive in investigating and prosecuting foreign bribery cases… and has not considered moving the foreign bribery offences to a separate statute …and Japan has not considered whether territorial jurisdiction in Japan is adequate for covering acts of the Japanese parent companies (e.g. incitement and authorization) in relation to foreign bribery by foreign subsidiaries…” The report also outlines all of the problems listed previously above with Japanese law and enforcement and concludes they want to keep a watchful eye on Japan by saying in the main: “…the [OECD] Working Group recommends a yearly informal meeting between the lead [OECD] examiners and the Japanese authorities in the margins of the [OECD] Working Group on Bribery meetings to enable the lead examiners to assess progress by Japan in implementation the recommendations of the [OECD] self assessment report and the Phase 2 Recommendations of the [OECD] Working Group that are not fully implemented. These meetings will in particular review whether Japan is proactively investigating and prosecuting foreign bribery cases. The assessment of the lead [OECD] examiners will be reported to the [OECD] Working Group Plenary with the opportunity for further discussions…”
For people who want to see an end to the slaughter of whales, the news is even worse: “In a damning conflict of interest, although all other offences relating to bribery fall under the much more serious Japanese Penal Code administered by the Ministry of Justice - offences relating to bribery fall instead under the much less serious Uniform Competition Prevention Law (UCPL) which falls under the Ministry of Economy, Trade and Industry (METI) - the very same government agency which overall directs Japan’s whaling efforts,” said O’Sullivan.
Indeed, says the OECD Working Group, the reasons for the 2006 follow up investigation was that: "... Japan had not demonstrated sufficient efforts to enforce the offence of bribing a foreign public official. This was the first and to date the only time that the [OECD] Working Group recommended this extraordinary measure [in any country it has examined]..." In 2006, although Japanese authorities appeared more cooperative, they refused to allow OECD investigators to speak with the Japanese prosecutors who handled the only four non-formal investigations so they could find out why no prosecutions had taken place.
“The Humane Society of Canada believes that the only meaningful way to ensure that Japan cannot continue using foreign aid to slaughter more whales is to force Japan to crackdown on bribery and corruption through international sanctions. The Japanese Government must truly believe that the rest of us are fools. In our opinion, they are doing a tremendous disservice to their own citizens and those of developing nations as well as Japan’s image at home and abroad.
“While the Japanese Government makes hard decisions about whether or not to put their own house in order, in the meantime, we encourage all nations to actively pursue allegations of bribery in relationship to whaling and where there is evidence both sufficient and admissible to launch vigorous prosecutions under their own laws with or without Japan’s cooperation,” says O’Sullivan.
CONTACT: Michael O'Sullivan by toll free 1-800-641-KIND or Michael on his cell phone (416) 876-9685 or at www.humanesociety.com
[A father with two children and a houseful of dogs and cats, O'Sullivan has worked across Canada and in over 100 countries during the last 40 years helping people, animals and nature.]
The Humane Society works to protect dogs, cats, horses, birds, livestock, lab animals, wildlife and the environment. They carry out hands on programs to help animals and nature, mount rescue operations, expose cruelty through hard hitting undercover investigations, work to pass laws to protect animals, fund non-invasive scientific research, use a multidisciplinary approach, support animal shelters and wildlife rehabilitation centres and spread the word about how to help animals and nature through humane education.
A registered charity, The Humane Society of Canada depends entirely on donations to support our programs to help animals and the environment. All donations are gratefully acknowledged with a receipt for income tax purposes. If you would like to support our campaign to protect animals and the earth, please make a donation here. Because when it comes to fighting cruelty, we don’t give up. Ever.
More Background on the 2005 OECD Report
“In 2005, the investigators report they were stonewalled by government officials, reports and meetings were delayed, information was refused on the grounds that it would interfere with ongoing investigations; and there was a general lack of knowledge and will on the part of prosecutors, chartered accountants, police and other public officials to actively search out, investigate and prosecute cases of bribery under either international or Japan’s own domestic laws,” says O’Sullivan.
The team found that in Japan there were few prosecutions for bribery that actually made it to court, and that in many cases if they did, those found guilty were given suspended sentences. They also found loopholes in the law which allowed a Japanese national to give a bribe in a foreign country and not be bound by Japanese law, and statutes of limitation periods that were too short to carry out complex investigations and prosecutions," he says.
The 2005 OECD Report goes on to say: “… Entertainment and social” expenses, which the Japanese authorities state includes bribe payments, made by corporations to foreign public officials are tax deductible up to a certain limit for companies up to a certain size and consolidated groups up to a certain size and consolidated groups up to a certain limit based on the size of the parent company. There appears to be uncertainty about whether bribe payments made by individuals to foreign public officials appear to be deductible without limits.
The lead examiners therefore recommend that Japan amend its tax laws as a matter of priority to expressly prohibit the tax deductibility of bribe payments made to foreign public officials by any individuals or corporations…” More information about Japan’s Unfair Competition Prevention Law, Penal Code and other laws which on paper give the appearance of preventing bribery but in practice leave a great deal to be desired can be found here.
Background on the IWC
A reported 81 nations have now signed the international whaling agreement and there is strong evidence that Japan has bought the votes of small developing nations. Japan and its allies are expected to use these votes to support secret ballots and other mechanisms in those dealing with environmental threats to whales, animal welfare, whale sanctuaries, whale watching and slaughter of whales and dolphins. In open defiance of the twenty one year old ban on whaling, Japan, Norway, Iceland and other countries have slaughtered over 30,000 whales; and in the opinion of The Humane Society of Canada these countries are nothing but environmental outlaws.
The Humane Society of Canada supports ECO which is published at the whaling talks by a coalition of non-governmental organizations and can be found here.
The animal charity is also a member of the Global Whale Alliance fighting to end the slaughter of whales.More work about our efforts to protect whales can be found here