Japan Press Weekly

Tweet

2007 December 19 - 2008 January 8 [SDF]

Two corporations exclusively receive Defense Ministry orders for fuel supply in the Indian Ocean

Akahata has learned that two corporations have exclusively received Defense Ministry orders for fuel that Maritime Self-Defense Force ships have procured to supply to U.S. and other foreign warships in the Indian Ocean.

The two firms are Itochu Corporation based in Osaka and Yokohama’s Asahi-tsusan Corporation.

According to Defense officials and other informed sources, the two firms obtained a monopoly over contracts for the provision of fuel to the Defense Ministry when the MSDF began its refueling mission in the Indian Ocean.

During the 6 years since 2001, Japan used 22.5 billion yen in tax money to procure 490 thousand kiloliters under 152 contracts (up to April 2, 2007). Most of these procurement contracts were awarded to the two firms without bids. There were only two cases of designated competitive bidding.

In the Diet, the opposition parties have repeatedly cited the lack of transparency in discretionary contracts for the fuel procurement and requested the disclosure of the contractor’s name. However, the Defense Ministry has refused on the grounds that “disclosure will do harm to their fair business for profit.”

The ministry says it opted to award contracts to Itochu and Asahi-tsusan after assessing their ability to supply fuel in 2001 and 2004, but they refused to disclose the findings of the survey.

The lack of transparency in discretionary contracts has been criticized as a source of corruption as it has been the case with the bribery scandal involving former Vice Defense Minister Moriya Takemasa and military equipment trading firm Yamada Corporation.