Japan Press Weekly

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2012 July 18 - 24 [POLITICS]

Harmful effects of ‘market testing system’ surfaces

The so-called “market testing system” pushed ahead by the Koizumi government of the Liberal Democratic Party under a “from-public-to-private” campaign has turned out to be harmful.

The Justice Ministry is going to terminate a contract in August with two private companies for their dishonest practices, possibly resulting in a loss of 1,400 jobs.

Started in 2006, the “market testing system” contracts out public services to private sectors through competitive bidding, enabling fictitious or malicious businesses also to make successful bids at lower prices for public contracts.

ATG Company and IA Company, both Tokyo-based, have won contracts for clerical work in the Legal Affairs Bureau through the bidding practice.

They, however, are questionable enterprises. They have received administrative orders frequently to improve and twice to suspend their businesses.

In addition, in February this year, these “black” companies incurred penalties on charges of undervalued payment of the employers’ share of contribution to pension and healthcare insurance premiums.

After the fact that they have been in arrears with payments of healthcare insurance premiums came to light, the ministry eventually decided to cancel its consignment contract with them in August.

Associated with the expected annulment of their contracts, the two companies filed for bankruptcy and gave their 1,400 workers a dismissal notice.

Anxiety is spreading among the workers at each workplace. As a superintendent of legal affairs, the Ministry of Justice should take responsibility for their employment and wages to be secured.