Japan

Transparency of asset disposals is maintained through a rigid management of the Ledger of the National Property (国有財産台帳) by monitoring the capital flow. Two Ministries are responsible for national asset disposals in Japan. The Ministry of Finance is in charge of administrative properties and the MOD is in charge of non-administrative properties. The Equipment Procurement and Construction Office (EPCO) of the MOD has been in charge of the centralised asset management from R&D to asset disposals. At the same time, the asset disposal was not entirely centralised and each regional command of the SDF is allowed to carry out asset disposals locally with orders from the regional commander (方面総監).

On October 1, 2015, the Acquisition, Technology & Logistics Agency (ATLA) was established in MoD, which consolidates 6 different agencies related to defence equipment. ATLA is responsible for the procurement, disposal, and export of defence assets.

There are two ways for asset disposals to occur. First, certain defence assets are required to be dismantled and scrapped before they are brought to disposal for sale. Other expendables are exempted from being dismantled before being sold. A number of internal checks are required for defence asset disposal, and commercial actors are involved, normally at the final stage of asset disposal. An asset manager under the command of the regional commander is responsible for assuring the proper dismantling of certain assets such as such as arms and ammunition before they are put into disposal.

Compliance issues sometimes occur at the final stage due to insufficient supervision and inspection of the contractors by the MOD and SDF. There is an account book for the national property system and the process can be monitored by this book. The book does not present any evidence of the disposal of assets however, and there is no involvement of third party monitoring agencies in the controls over the disposal of assets. Press coverage shows one incident where illegal sales of defence assets has been carried out by corrupt contractors in the past (see Q23), although this does not necessarily indicate that improper relationships have existed between the defence actors and corrupt contractors.

Response to Peer Reviewer: Agreed. Score lowered from 3 to 2.

The MOD provides instructions regarding the dispersal of defence assets. All the defence assets are supposed to be disarmed and dismantled into pieces. This process is contracted to private companies. It is very difficult to find examples of illegal disposal of military equipment, except for an incident in which helicopters were sold to an overseas institution even though the contract was to dismantle it and it should have been handled as scrap. According to the report by the Asahi Shinbun on 23 August 2013, 12 helicopters of the Ground Self-Defence Force were sold to a broker illegally by Mitsutoyo Kogyo without dismantling them. Mitsutoyo Kogyo has been penalized by the MOD and its business with the MOD was suspended for 2 months.

Asset disposals are an internal process and there is no independent and transparent scrutiny available except for the inspection by the Board of Audit of Japan that is supposed to provide necessary oversight on asset disposals. However, the mandate of the Board of Audit of Japan is so broad that it is technically difficult to provide constant and comprehensive vigilance over defence asset disposals. The Inspector General’s Office of Legal Compliance, an internal organisation of the MOD, is responsible for providing inspection on issues related to compliance and misconduct of defence actors. It is expected that the establishment of the Equipment Procurement and Construction Office in the MOD, which allows more centralised management of the defence asset, should provide better monitoring of asset disposals. This though has not happened yet.

It's also worth noting that there are also other barriers to the sale (rather than dismantling and sale) of old systems. Many, like the F4 US systems, require US approval. And when the US wanted to buy old F4s from Japan for resale, Japan refused due to constraints in the &quoute;three principles of arms export&quoute;; systems were then again scrapped. Old tanks such as type 71s don't appear to have been considered for resale - and such a decision would require the preparation of English manuals and the provision of Japanese trainers.

Response to Peer Reviewer: As the Peer Reviewer notes it is true that the defence ministry must make financial reports every year and the Board of Audit and the Diet have the scrutiny power over this. And that the Ministry of Finance must record the disposal of assets on a ledger of national assets (i.e. summary information is available). That said there more evidence is needed on the effectiveness of this scrutiny system.

All Japanese ministries, including the MOD and the Ministry of Foreign Affairs, provide a detailed breakdown of their annual budget, which is publicly available. It is recognised that secret items used by the national security and the intelligence services are included in the section of “compensation” (報償費). The amount allocated for the secret items in the budget of “compensation” is unknown, but it will not exceed the allocated amount of “compensation”.

The percentage of secret items in the defence and security expenditure is negligible. In the annual budget for the fiscal year 2014, the Ministry of Foreign Affairs that supervises overseas intelligence activities appropriated 1,650,000,000 yen for its overseas establishments and 900,000,000 yen for the Ministry in Japan. Likewise, the MOD has allocated 117,000,000 yen for “compensation” (報償費). 1,461,652,000 yen has been allocated in the 2014 fiscal budget year for the Secret Funds in the Cabinet Secretariat (内閣官房報償費). This can be used by the national security and the intelligence services, but it is suspected that most funds have been used for domestic political manoeuvres and electoral campaigns.

While secret expenditure can be scrutinised by the National Diet, detailed secret expenditure reporting is not required for submission. A major source of funding for the secret items is the “compensation” or Secret Funds in the Cabinet Secretariat (内閣官房報償費), and most of the legislative scrutiny and the media coverage on the secret items has focused on the Secret Funds in the Cabinet Secretariat.

It was not possible to verify the level of information that is provided for legislative scrutiny and the score has been selected accordingly. There is some interesting contextual information in relation to speculation and interest with respect to the level of Secret Funds.

In June 2013, a Parliamentary member asked the government to disclose the amount and contents of the Secret Funds in the Cabinet Secretariat - the answer, in short, was that the amount could be disclosed but the details would not be (see first and second sources).

In 2012 a lawsuit was raised based on the Public Information Act (情報公開法), in which the plaintiff demanded details of the expenditure of the Secret Funds. This lawsuit has not been concluded. The Osaka District Court has made a decision (partial disclosure of information), but both parties have appealed to Osaka High Court, which has not yet issued its decision.

Public interest can be summarised by stating that the general public are suspicious of the illegal or inappropriate use of Secret Funds for domestic political manoeuvres and such suspicion is largely due to the confidential nature of the Funds. Nevertheless, public attention has been given largely to politically motivated scandals, as the Secret Funds have often been used during the election campaign as a major source for campaign funding. Unlike political scandals, the general public is seems largely indifferent to national security and military intelligence issues if the number of newspaper articles on this issue is taken as a barometer.

The Board of Audit of Japan provides annual audit report about the settlement of account of the security sector including the details of irregularities and misconduct. For example, in its annual report of the Fiscal Year 2013, seven items were identified and the Board of Audit demanded that MOD undertake necessary reforms on these items. Nevertheless, there was no discussion of the secret budgets or programmes in the report, except for the issue related to the expenditure of defence personnel deployed to suppliers in the United States.

With regard to the secret budgets, the “compensation” or Secret Funds in the Cabinet Secretariat (内閣官房報償費) was discussed in the House of Representatives at the 174th session of the National Diet in 2010. The issue was not related to the security sector at all, however, but was on suspicion that the Secret Funds in the Cabinet Secretariat had been misappropriated by the Chief Cabinet Secretary for an electoral campaign. This case shows that it is technically possible to provide legislative scrutiny and parliamentary debate within the National Diet on the secret budget of the security sector - nevertheless, in reality, little has been done, perhaps due to the lack of political and public interest in this matter.

Audit reports from the Board of Office covering the Ministry of Justice which in turn oversees the Public Security Intelligence Agency are presented to the Diet and made accessible to the public. Audit reports include details of irregularities. However, while this allows in theory for an open and free parliamentary debate, very little has taken place.

Off-budget military expenditures are not permitted in Japanese law under the Act for Establishment of the MOD. The Japanese SDF are technically not military by constitutional definition however, and their expenditures could be formally stated instead as defence expenditures under the MOD budget. Following the East Japan Great Earthquake in 2011 a series of supplementary budgets was approved for the MOD to pay for the operational costs during the disaster relief operations and to repair the equipment, for example. All government budget and expenditures have to go through legislative scrutiny for budget appropriation regardless of source however; therefore it can be safely stated that all defence related expenditures including those of the SDF and the Japan Coast Guard are within the official national budget.

All defence expenditures are included in the budget, including supplementary budgets. An interesting and perhaps unique case would be the Base Grant (基地交付金) / Coordination Grant (調整交付金), which is provided from the government to the local municipality where it hosts national assets such as the land, facilities and buildings of the SDF as well as those belong to the US Forces in Japan. Although there is no sign of involvement of illicit economic activities, such a practice can be seen as non-defence expenditure that may indirectly contribute to the defence of Japan.

In 2013 the Act on the Protection of Specially Designated Secrets (特定秘密の保護に関する法律) was enacted into law. Chapter 2 of the Act stipulates that the head of administrative bodies are eligible to designate certain information as classified for up to five years (renewable) and no longer than 30 years in total without Cabinet approval. The controversy with regard to the Act revolves around the issue of providing effective oversight for these positions. Two key questions include who should be given the authority to monitor and/or scrutinise the decision about the designation of classified information, and who should be appropriate to judge and guarantee that the government does not abuse the Act in the name of national security.

The legitimate grounds for information to be classified as secret have 4 components: (1) defence, (2) Diplomacy, (3) Counterintelligence, and (4) Terrorism. Each category, has different legitimate grounds for classifying as secret, but the common point is that the information would have a dire effect on the security of Japan as a country and the Japanese people.

The Secrets Act was enacted in 2013, but didn’t come into effect until December of 2014. During this time, the oversight mechanism, which was stipulated in Article 9 of the law but its details were left for later discussions, have been decided. There will be an annual committee of an independent panel of experts, appointed by the Cabinet, to review the report from the Prime Minister on the implementation of this law in order to secure effective oversight of the government’s decisions on classifying certain information.

A three has been selected for this question on the basis that the process is still new and there is a lack of evidence as to how the independent panel of experts will function in practice.

There are no government-owned defence and security manufacturers in Japan, and all the defence and security procurements have to be made either through domestic private enterprises or through trade with foreign countries often via Japanese intermediaries. “Amakudari”, the practice that retired senior government officials take up positions within private sector and public corporations, is also common in the defence and security sector. Defence manufacturers and trading companies in Japan often prepare advisory positions in their organisations for retired senior officials of the MOD and the SDFs, expecting those advisors to serve as an intermediary between them and the MOD and thus facilitating business deals. Such procurement practices can become a hotbed for collusion. This practice should not be seen only as a personnel matter, as it has been institutionalised and constituted as one of Japanese corporate culture. Nevertheless, there are no Japanese national defence and security institutions that have beneficial ownership of commercial business.

There are no military-owned businesses in Japan, and thus there is no independent scrutiny at a recognised international standard. An effective system of civilian control over the activities of the Self-Defence Forces has guaranteed the prevention of illegal military-owed business from emerging and eluding prosecution.

There is no evidence of any private enterprise (authorised or unauthorised) run by members of the SDF and other Defence Ministry employees. There are a number of private enterprises run by former members of the SDF and other Defence Ministry employees, including some that specifically target active duty SDF officers and their family members. While these private enterprises are not illegal, they take advantage of a special relationship they have with the SDFs and the MOD.

Reform of the MOD has been one of the top priorities for Japanese government, both during the previous DPJ administration and the current LDP administration. An anti-corruption or “prevention of the recurrence of misbehaviour（不祥事の再発防止)” policy is now included within the framework for the reform of the MOD. This policy is stated clearly in Section 2, Chapter 2 of the Defence White Paper (Defence of Japan 2013) for example, and again in the 2015 White Paper. The topic of MOD reform is similarly listed on the top page of the website of the Japanese MOD.

In November 2012, the Liberal Democratic Party published a so-called “J-File 2012” in which the party promised to accelerate the defence reform including anti-corruption and integrity measures. In February 2013, the Defence Minister Itsunori Onodera (小野寺五典) issued a ministerial directive emphasizing his commitment to accelerate the defence reform to prevent the recurrence of 'disgraceful' affairs (i.e., corruption). “The Investigative Committee of Reform of the MOD” was established under the auspice of the MOD. Other relevant senior leaders of the MOD, such as the Director General of the Equipment Procurement and Construction Office and the Inspector General of the Inspector General’s Office of Legal Compliance, have made public remarks indicating their commitment to fight corruption and prevent irregularities and misconduct.

The formation of Acquisition, Technology & Logistics Agency (ATLA) in October 2015 is one of the efforts by the MoD to alleviate instances of corruption by unifying 6 different procurement-related agencies for better oversight, along with other reasons such as improving cost-effectiveness, reducing bureaucratic stove-piping in decision-making, etc. In other words, the mandate of ATLA isn’t exclusively anti-corruption. Nevertheless, this can be seen as an evidence for improvement compared to the 2013 GI assessment.

The examples above show that there is a strongly expressed anti-corruption commitment at the senior level.

Takemasa Moriya, former Administrative Vice-Minister of the MOD, who was considered to be the most influential person in the Ministry, was arrested together with his wife Sachiko by the Tokyo District Public Prosecutor’s Office (東京地検特捜部) in 2008. Later he was convicted of bribery and sentenced to two years and six months in prison. This case, which is often referred to as the “Moria bribery scandal”, showed that effective and tough measures are in place when a member of the defence sector is found to have taken part in forms of bribery and corruption. The cases of major scandals involving bribery and corruption by senior public figures will be taken up by the Tokyo District Public Prosecutor’s Office as well as by the mass media in Japan. In particular, the scrutiny by the mass media is persistent and harsh on public figures and the members of the government and bureaucracy, especially those who belong to the MOD. As for the minor cases, personnel found to have taken part in forms of bribery and corruption face disciplinary sanctions, including dismissal and salary reduction.

Response to Peer Reviewer: Agree. The Japanese government has been been doing more to prevent corruption, but there are still shortcomings. Score changed from 4 to 3.

The Inspector General’s Office of Legal Compliance in the MOD has set up a Legal Compliance “Hotline” to encourage members of the MOD/SDFs to report irregularities in terms of legal compliance directly to the Inspector General’s Office of Legal Compliance. In addition, the MOD has set up three additional focal points for whistleblowing. There is institutionalised legal protection from reprisal for reporting evidence of corruption and the follow-up support for whistle-blowers, and such a mechanism is highlighted in the “Compliance Guidance” issued by the Inspector General’s Office of Legal Compliance.

The only evident cases of whistleblowing that could be found involved violence and harassment. However, these nonetheless demonstrate whistleblowers have come forward. Nevertheless, it is not clear how far the organisational culture in effect encourages whistle-blowers to come forward and it is also difficult to determine how seriously reports of corruption are or would be taken. In addition, the Act on the Protection of Specially Designated Secrets (特定秘密の保護に関する法律), although its original intention is to prevent the leaking of critical information for the sake of protecting national security, may further discourage whistleblowing.

Civil servants in Japan at all levels, including within the MOD and SDF, normally rotate through various posts throughout their career. Most terms are between 2-3 years, and the same individuals would not be able to remain in the same position for a consecutive period, particularly for senior and sensitive positions. One of the most controversial recent exceptions to this practice was the appointment of Takemasa Moriya as the Administrative Vice-Minister of the MOD, the highest bureaucratic/administrative rank in the Ministry, for more than four years.

Short-term rotation of senior and sensitive positions can contribute to the reduction of possible collusion and inappropriate relationships developing between individual MOD officials and the defence industry. However, the deep-rooted practice of “Amakudari” (see question 10) has a greater impact in cultivating the institutional ties between the MOD and some defence-related industries. A considerable number of retired officials have taken up posts in tendering companies such as Mitsubishi Electric, Mitsubishi Heavy Industries and Toshiba with the permission of the Defence Minister or Chief of Staff.

One highly visible effort by the MOD to eradicate an endemic corruption practice was the change to Article 62 of the SDF Law, which extended the moratorium for SDF personnel involved in defence procurement to take up positions in tendering companies requiring official approval of the Defence Minister from two years to five years after retirement from the SDF.

Information about the number of both civilian and military personnel (including part-time employees) employed in the Japan’s MOD and the SDFs is fully open to the public and easily available through the annual government report called “Defence White Paper” and the MOD’s website. According to the data from 2015 the MOD employs 247,160 SDF personnel - details of civilian numbers and reservists are also given. The accuracy of this information can be cross-checked against the defence budget as all the personnel expenses from the Defence Minister to private soldiers are listed in the detailed statement in the annual budget of the Ministry.

The Law regarding the Salary of the Personnel of the MOD (防衛省の職員の給与等に関する法律) stipulates all the information regarding the pay rates and other allowances, including all the trajectory of changes made in the past. The law is available through the internet (in the governmental database of Japan’s laws). The matrices of the updated salary for all ranks (both civilian and military) and for all categories (from doctors and instructors to a typist) who are employed by the MOD are attached to the Law. In practice the system for calculating the exact salary and allowances for each individual is quite complicated however, and there are a number of considerations that need to be made, meaning specialist skills and knowledge are required for accurate calculations.

Japanese national civil servants including MOD staff and the SDFs benefit from a highly sophisticated and well-structured pay system. All the procedures are standardised and centrally regulated. The Law regarding the Salary of the Personnel of the MOD (防衛省の職員の給与等に関する法律) articulates all the necessary information about the payment. As a basic salary, each full-time employee receives his or her monthly salary regularly on the set date and the biannual bonus in summer (June) and winter (December). Depending on the lengths and types of the mission carried out by each individual, such as disaster relief operations, United Nations peacekeeping operations and overseas business trips, he or she will receive appropriate allowances. The absence of evidence of any issues, controversy, or other media reports regarding payment indicates that the system is well established and enjoys public trust in Japanese society.

The SDF is a professional organisation and the promotion of the SDF is systematically regulated in a meritocratic manner. Officers must go through the Command and General Staff Course (CGS) to be promoted to a senior ranking. Each candidate has to pass the entrance exam to join, and has to achieve an excellent grade to be able to be promoted to higher ranks such as Major General and Lieutenant General. The process cannot be said to be transparent however. There is no independent oversight mechanism outside of the MOD and the Inspector General’s Office of Legal Compliance of the MOD does not examine personnel affairs, including promotions. There are no formal appraisal processes regarding promotion, although formal processes exist for a disciplinary dismissal such as the Deliberative Council on Defence Personnel Affairs (防衛人事審議会) and the Deliberative Council on the SDF’s Code of Conduct (自衛隊倫理審議会). Finally, all decisions about the promotion of senior SDF positions are made internally, although results are all publicized through the MOD website.

A large number of the senior positions within defence (12 categories, both military and civilian) are appointed by the Defence Minister. According to the SDF law (Article 31), the Defence Minister will select appropriate candidates for the senior positions from the list of those who are qualified for the positions and passed the aptitude test. This practice may allow political influence on personnel affairs of the SDF, however at the same time it is considered to be the key element that guarantees civilian oversight and control. Hence, a member of the senior management who is regarded as acting inappropriately or incompetently in the tasks given by him or her can be discharged by the Defence Minister. For example, a former Chief of Staff of Air SDF, Toshio Tamogami, who wrote a paper legitimizing Japanese conduct in the Second World War, was discharged and eventually retired. Pacifist elements of Japanese society welcomed this decision by the government, while Sankei Shinbun wrote an editorial criticizing the government for dismissing Tamogami without giving him an opportunity to defend his action. In retrospect, it appears the public widely supported this decision and considered Tamogami's view to be nationalistic and dangerous. This incident made Tamogami an icon of Japanese nationalism however, as indicated by his capture of around 600,000 votes when he ran for the governorship of Tokyo in 2014.

The personnel affairs (recruitment and promotion) of the MOD/SDF personnel are meritocratic. Promotion is in accordance with the objective criteria such as the Command and General Staff Course (CGS), which consists of 1-2 years depending on the SDF branch (GSDF is around 2 years, whereas MSDF and ASDF is around 1 year) with written, physical, and oral examinations, and subjective criteria such as the performance evaluation conducted by the supervisors. These assessment criteria for these examinations are clearly stipulated in the rules written by each of the SDF branches so as to secure an objective criteria. The performance of each public servant (both civil and military) is normally evaluated by his or her direct supervisor. This custom is widely adopted in Japan, and in fact it is one of the core duties of the supervisor to evaluate the performance of his or her subordinates. Hence, it is inevitable that the chain of command has great influence over the promotion of individuals in the MOD/SDF.

As identified in Q41, although promotions of the senior officers are published through the MOD website as well as major newspapers, all decisions about the promotion of senior SDF positions are made internally. The promotion process is vulnerable as it lacks independent internal and external oversight mechanisms.

There is no compulsory conscription in Japan, although some elements in Japan are concerned about the current policy of Prime Minister Shinzo Abe. According to the newspaper Asahi Shinbun, the former chief Secretary of the Liberal Democratic Party, Koichi Kato, has criticized the Prime Minister’s current drive for changing the interpretation of collective self defence as leading toward the (re)introduction of compulsory conscription. Similar concerns have also been expressed by Yoshiki Yamashita, Chief Secretary of the Communist Party of Japan, according to Asahi Shinbun.

There is no compulsory conscription in Japan. There are a variety of ways to enter the SDF, including limited-term assignment for retired SDF personnel (mainly for taking up vacant positions caused by maternity leave). Japanese Nationals between the ages of 18 to 27 are eligible for applying for the entry positions such as SDF Candidate (自衛官候補生) and General Sargent Candidate (一般曹候補生) for example, while Japanese males under the age of 17 with Junior High School Diploma can join the Ground SDF Engineering High School (陸上自衛隊高等工科学校). There is no evidence that suggests that there is any bribery in the recruitment process.

There is no evidence to suggest the existence of ‘ghost soldiers’ as Japan has a highly sophisticated payment system centrally regulated by the National Personnel Authority. The National Personnel Authority (人事院) exists as an independent government agent to monitor the salary of public servants, including MOD/SDF personnel.

During the administration of the Democratic Party of Japan, the then Prime Minister Naoto Kan introduced a bill reducing the salary of national civil servants in order to meet the financial challenges in the aftermath of the East Japan Great Earthquake in 2011. Objection to this bill was raised by Masahisa Sato, a retired Colonel of the Ground SDF who is a Member of Parliament (the House of Councillors) from the Liberal Democratic Party. He argued that SDF personnel that are under the category of the Special Civil Servants (特別国家公務員) should receive different treatment from the General Civil Servants (一般国家公務員). This shows that the salary of the MOD/SDF personnel is effectively managed by the existing system together with other national public servants.

The chain of payment is formally separated from the chain of command, and the action of payment is processed by the specific division for the payment of salaries (personnel affairs division), in accordance with the existing procedures of the payment for the national public servants regulated by the National Personnel Authority in the same manner as the rest of the national public servants.

As national public servants, the staff members of the MOD (both civilian and military) are subject to the National Public Service Ethic Law, which prohibits bribery, gifts and hospitality. In addition, SDF’s Code of Conduct (自衛隊員倫理法) is applied to the SDF personnel. In response to a number of incidents of unethical behavior and misconduct by MOD/SDF personnel, the MOD initiated reforms including the establishment of the Deliberative Council on Defence Personnel Affairs (防衛人事審議会) and the Deliberative Council on the SDF’s Code of Conduct (自衛隊倫理審議会) with the aim of addressing issues related to the code of ethics and conduct by the MOD/SDF personnel. The Inspector General’s Office of Legal Compliance at the MOD is also given a mandate to promote legal compliance by the MOD/SDF personnel. The Inspector General’s Office of Legal Compliance offers a number of training courses for the MOD/SDF personnel, aiming at socialisation and familiarisation with the code of conduct. There are comprehensive legal frameworks for the code of conduct, and several mechanisms exist to deal with the issue.

Breaches of the code of conduct by MOD/SDF personnel can result in severe punishment including a disciplinary, dismissal and prosecutions. As the Act on the Protection of Specially Designated Secrets (特定秘密の保護に関する法律) is now enacted, the MOD/SDF personnel will face severe charges should they breach the code of conduct, particularly leaking confidential information. Occasionally, breaches of the code of conduct by high ranking MOD/SDF officials are reported by the mass media and for serious cases the results of prosecutions are made publicly available in the MOD website. The corruption scandal of a former Administrative Vice-Minister Takemasa Moriya is a case in point. Minor incidents committed by low ranking officers are obviously reported far less by the mass media or the MOD - but there is plenty of evidence that information on prosecutions for breaching the code of conduct is widely available via mass-media - see sources.

In response to the government’s initiative for anti-corruption, and in particular as a part of the Reform of the Defence Ministry, a number of reform initiatives have been undertaken. Regular anti-corruption training for the MOD/SDF personnel is now carried out by different organisations within the MOD. For example, the Inspector General’s Office of Legal Compliance of the MOD not only provides regular and special inspections but also it offers regular training on anti-corruption from the perspective of legal compliance for the MOD/SDF personnel stationed in the districts. The Office also published a manual for anti-corruption called the “Compliance Guidance” and it distributed the copies to each unit in the SDF. On the other hand, the Equipment Procurement and Construction Office of the MOD offers regular anti-corruption training for both the MOD/SDF personnel and the tenderers. These trainings emphasise ethical, legal and technical aspects of anti-corruption, focusing on collusive bidding. Nevertheless, senior officials of the MOD and high-ranking officers of the SDF are normally not the main focus of the training, and thus political corruption involving senior leadership of the MOD/SDF and the politicians has not yet been adequately addressed through training.

Response to Peer Reviewer: there is somewhat conflicting evidence presented by Peer Reviewers. But with evidence from an interview of a serving official suggesting only one training session had occurred and without further sources, a score of 2 has been selected.

Disciplinary actions against major corrupt activities by the MOD/SDF personnel are made public (also notified at the homepage of MOD). The penalties include suspension of duty, demotion and dismissal. Other cases with minor penalties that are considered to be not serious enough to require disciplinary actions will not always be reported publicly. Corruption scandals involving politicians and high profile MOD/SDF officials are a regular topic of interest for both the mass media and the National Diet, and outcomes of the prosecution of defence service personnel for corrupt activities are often reported by both local and national media outlets. Cases involving high profile individuals typically experience persistent scrutiny from the national mass media and the National Diet even before the investigation begins.

There is evidence of effective prosecutions that serve as a warning to the MOD/SDF. In one case, a major corruption scandal by the former Administrative Vice-Minister of Defence Takemasa Moriya led to the imprisonment of the individuals involved and dissolution of the Yamada Corporation, one of the leading arms trading companies in Japan. There is no evidence in the public domain to suggest that prosecutions have been suppressed.

Facilitation payments are illegal and discouraged in Japan with a number of different measures in place. For example, the Defence Inspector General（防衛監察官）and his Office of Legal Compliance in the MOD is supervising the contracts and procurements concerning the MOD, and the Equipment Procurement and Construction Office of the MOD centralizes the procurement and construction contracts with a view to minimize the temptation for illegal conduct. Facilitation payments to public officials involved in international business transactions are prohibited in Japan as a signatory of the OECD Convention on Combating Bribery (国際商取引における外国公務員に対する贈賄の防止に関する条約). The MOD sends Import Procurement Officers (輸入調達専門官) and Foreign Military Sales Liaison Officers (FMS連絡官) to the United States to facilitate overseas defence equipment procurement who are also bound by this Convention.

Response to Peer Reviewer: The most recent OECD report on Japan by the Convention on Combating Bribery published in December 2011 states that there have only been two cases of prosecutions in Japan. The OECD's view was that this &quoute;two foreign bribery cases in 12 years appears very low in view of the size of the Japanese economy, and the Working Group continues to have serious concerns that Japan still does not appear to be actively enforcing its foreign bribery offence.&quoute; Transparency International describes Japan as exhibiting &quoute;little or no enforcement&quoute; of the OECD anti-bribery convention, and there are also media reports supporting the judgement that Japan could do more to enforce the convention particularly oversees. So on further reflection score has been reduced to 2.

The SDF has a list of doctrines ranging from combat-related operational ones to administrative functionalities such as accounting. However, as these doctrines are not easily available to the public, it is difficult to evaluate whether the issue of corruption is addressed properly in them. While it is not a military doctrine, SDF personnel are legally bound by the SDF’s Code of Conduct that stipulates the terms of corrupt behaviours and possible penalties.

There is no specific training in corruption issues for commanders at all levels, although they receive pre-departure trainings and briefings before they are deployed to overseas missions. Recently, more and more SDF units have been deployed to overseas missions not limited to United Nations Peacekeeping Operations, but also disaster relief operations. When the SDF unit was deployed in Iraq in 2003, the SDF officers deployed in the field also carried out project management for Official Development Assistance (ODA) projects of the Japanese government, undertaking procurement (including bidding and contracting) in the field. Similar tasks were also carried out by the SDF units deployed to the United Nations Stabilization Mission in Haiti (MINUSTAH) and the United Nations Mission in South Sudan (UNMISS). While so far no systematic training in corruption issues has been offered to the commanders deployed to overseas missions, they have been extremely cautious of their behaviour in the field and have tried to maintain their positive public image throughout the mission.

All personnel who are deployed to United Nations Peacekeeping Operations must be within the scope of the so-called PKO Law, which does not anticipate nor formally stipulate a role for corruption monitors. Recent missions have however included procurement officers who are aware of the corruption risk and have received sufficient training revolving around the procurement and corruption risk. For example, Japanese SDF units deployed to the United Nations Mission in South Sudan (UNMISS) included procurement specialists dispatched from the Equipment Procurement and Construction Office. In theory the unit commander can and is expected to perform the role of a corruption monitor, but in practice there is no mechanism through which trained professionals are deployed to the field to oversee or support this function.

Although there are no special courses/guidelines developed for the Japanese SDF deployed for United Nations missions, SDF personnel about to take part in a United Nations mission participate in a pre-departure training package which includes briefings on the United Nations Conduct and Discipline. The focuses of this training appears to be on how SDF personnel can avoid being entrapped into local customs of bribery by the local contractors and politicians. Corruption by the SDF personnel deployed in the overseas field mission appears not to have been anticipated, and no tangible measures in terms of developing guidelines or conducting staff training have been introduced.

There are a number of private security companies operating in Japan such as ALSOK and SECOM. However, the Law to Control the Possession of Firearms and Swords (銃砲刀剣類所持等取締法) prohibits these private entities to arm their security officers with lethal weapons such as firearms. Private security companies also operate overseas such as in Afghanistan. For example, Fuji General Security Inc., which offers security-related risk consulting for both domestic and overseas activities, has carried out unarmed security provisions (mainly in the area of risk consulting) for Japan’s ODA reconstruction projects in Afghanistan. There is no oversight for the overseas activities of private security companies based in Japan, and the Law to Control the Possession of Firearms and Swords (銃砲刀剣類所持等取締法) also does not apply to companies when operating outside Japan.

There is no policy of engaging PMCs in SDF overseas operations, although the Japanese embassy in Kabul, for example, hires an armed PMC (UK-based) to provide security for the facilities and staff. It has been reported that Japanese citizens (both with an SDF background and without) have joined foreign PMCs operating in overseas missions.

The score has been selected on the basis that while the SDF does not appear to employ PMCs, there are no regulations prohibiting this explicitly either.

The Antimonopoly Act (独占禁止法) as well as the Act on Elimination and Prevention of Involvement in Bid Rigging, etc. and Punishments for Acts by Employees that Harm (入札談合等関与行為防止法) is applicable to all defence and security procurement, and Japan's Fair Trade Commission’s mandate includes defence and security procurement. There is a threshold under which items can be purchased without prior approval of the Defence Minister or the head of the Equipment Procurement and Construction Office of the MOD. This procurement must be reported afterwards to the Defence Minister or the head of the Equipment Procurement and Construction Office of the MOD. Items over this threshold require prior approval of the Defence Minister.

Vulnerabilities have been identified in defence procurement in Japan. From the perspective of the reform of the MOD, amendment of the SDF Law and institutional reform have been initiated. However, in practice the reform has been more focussed on improving the cost efficiency of defence procurement rather than improving transparency and anti-corruption measures; most of the anti-corruption measures introduced have been directed toward preventing overpayment and other misconduct by tenderers (private enterprises).

The defence procurement cycle process is disclosed to the public. Assessment of needs regarding both major and minor defence procurements are discussed in the form of budget appropriation and detailed documents related to defence budget appropriation are published by the MOD. Contract implementation and sign-off are monitored and relevant information is made public. Information about the contracts of asset disposal is available but verification is limited as information is limited to the transaction of assets.
The MOD has introduced the system of Life Cycle Cost (LCC) management of defence assets/equipment. As asset disposal is an integral part of the LCC management, the detailed information about asset disposal should be included in the LCC Final Reports, however these are not fully open to the public, though transparency of asset disposals is maintained through a rigid management of the Ledger of the National Property (国有財産台帳) by monitoring the capital flow.

Following a series of scandals that involved the MOD/SDF personnel, the Investigative Committee of Reform of the MOD (防衛省改革検討委員会) was set up in July 2007 and undertook a thorough review of procurement practice. A number of measures were then introduced to strengthen the resilience (institutional capacity) of the MOD against corruption not only for major procurements but also to more mundane procurement at district level. The Equipment Procurement and Construction Office (装備施設本部) was established in September 2007 to improve monitoring capacity in the MOD and to enable centralised Life Cycle Cost Management to be implemented. The Inspector General’s Office of Legal Compliance in the MOD has also been strengthened, and now provides regular annual inspection and special inspections. In February 2013, another new set of MoD reform committee has been established, which resulted in the establishment of Acquisition, Technology & Logistics Agency (ATLA) that subsumed the Equipment Procurement and Construction Office along with 5 other agencies with responsibilities on defence procurement.

The MOD's response indicates it is taking anti-corruption issues very seriously, and in particular, a number of legal and operational reforms have been made to combat collusive bidding in defence procurement. It is argued that the official commission fee is too low and this serves as a hotbed for illegally inflated bills from commercial enterprises that seek profit. It is recognised that due to its limited capacity, the MOD cannot investigate all foreign contracts brokered by trading companies and agents, and therefore, inappropriate deals (where the MOD had to pay higher than the market price) have been made. A certain portion of this excessive payment (a gap between the market price and the billing price) is considered to have been taken by trading companies and agents as a part of “tacit” facilitation payments. To address such situations the MOD now sends Import Procurement Officers (輸入調達専門官) and Foreign Military Sales Liaison Officers (FMS連絡官) to the United States to investigate defence equipment manufactures in the United States as well as accurate market prices for purchasing items to prevent over-payment.

Given that the Acquisition, Technology & Logistics Agency (ATLA) was established only in October 2015, there is naturally a lack of evidence upon which to score this question higher, despite this being an important step.

Both potential and actual defence purchases are made public through official MOD publications. The general strategic intent for defence development is periodically shown in the “mid-term defence development plan” (中期防衛力整備計画). Potential defence purchases are presented annually by the MOD in its publication called “Defence Programs and Budget of Japan” and are discussed during the budget appropriation in the National Diet. Actual defence purchases (procurement, contracts and expenditures) are monitored and inspected by both internal bodies and independent bodies such as the The Board of Audit of Japan (会計検査院) and the Japan Fair Trade Commission (公正取引委員会), both of which provide reports and requests for reform.

The level of disclosure is quite extensive. As noted in previous questions, anyone can access the MoD website to find out exactly how many vehicles the Japanese government bought for how much and for what purpose.

The MOD has introduced a number of measures to prevent pre-arranged collusive bidding, and called for strict adherence to a set of guidelines for bidding and contract. One of the most significant changes has been the abolishment of non-transparent contracting in principle. As a result, single-sourced bidding or so-called discretionary/designated contracts (随意契約), once a common practice (88.8% of all the contracts in 2006), is now hardly seen in defence contracts (9.6% in 2011). If single-sourced bidding, or discretionary/designated contract, is deemed necessary, the MOD is required to publicise the list of tenderers that are contracted.

In an effort to impress upon tenderers its seriousness in combating corruption, the MOD issued a “Guidance on Bidding and Contract,” which was first published in July 31, 2006 and has been revised constantly, and a “Compliance Requirements Confirmation Note”, which require companies to show that they have a formal and publicly declared compliance programme and an ethical supply chain. Companies with prosecutions for corrupt activities are barred from bidding. The “Guidance of Bidding and Contract” of the Joint Chief of Staff requires the signing of compliance requirement document to the private companies, and if the company falls short on some of the requirements, they must change their company rules within 3 months of the submission of the document (annex 47).

The National Security Strategy (NSS) sets the broad strategic context, the National Defence Program Guidelines (NDPG) outlines the broad procurement plans based on NSS, and the Medium Term Defence Program specifies the 5-year plans for the procurement based on NSS and NDPG. The Defence Programs and Budgets of Japan then details the annual plan of the procurements.

All defence purchases are based on the clearly identified and quantified requirements stipulated in the budgetary documents. This does not guarantee that the MOD/SDF decision is not a product of compromise, as it has been practically difficult to purchase a sufficient amount of expensive weaponry such as Aegis destroyers and F-35 fighters under recent financial constraints. In addition, the “Mid Term Defence Plan” does not necessarily reflect the changing requirements accurately. Some analysts judge that while the nature of the threats to Japan has evolved, thinking about requirements has not kept pace.

Although, technically speaking, defence purchases are clearly prescribed in advance in both strategic planning and budgetary documents and every purchase is underpinned by a strategic / tactical rationale for procurement, there is some evidence to question whether this is always reliable. Although there is no specific evidence of collusion between industry and officials in the procurement process, the deep-rooted societal system of Amakudari creates risk in the procurement process.

All defence purchases are based on the clearly identified and quantified requirements stipulated in the budgetary documents. This does not guarantee that the MOD/SDF decision is not a product of compromise, as it has been practically difficult to purchase a sufficient amount of expensive weaponry such as Aegis destroyers and F-35 fighters under recent financial constraints. In addition, the “Mid Term Defence Plan” does not necessarily reflect the changing requirements accurately. While the nature of the threats to Japan has changed dramatically since the end of the Cold War, Cold War mentality still often influences the threat perception of senior management and strategists in the MOD. Nevertheless, technically speaking, defence purchases are clearly prescribed in advance in both strategic planning and budgetary documents.

The Japanese government decided in 2006 that all Defence procurements would be conducted as open and transparent competition in principle. This had a significant impact on defence procurement. According to MoD figures - see final source - the percentage of single-sourced contracts in FY2005-06 was 99.8%, but after the revision in 2006, the percentage for FY2007-08 substantially decreased to 40.3%, and has hovered around the 30% mark since (FY 2010-11 is 30.3%, FY 2011-12 is 29.3%, FY2012-13 is 32.9%, and FY2013-14 is 35.6%).

More recently the government announced that due to the &quoute;special characteristics&quoute; of the defence industry, this regulation will be reviewed to support the domestic industry and to allow more cost-effective purchasing.This would seem to imply that the policy priority set by the Democratic Party of Japan, as well as the trend which was accelerated by the 2008 defence scandal, has shifted from anti-corruption to the protection of the national industry since the Liberal Democratic Party took over.

The MOD set up a third party “Fair Tender Investigation Meeting” (公正入札調査会議) in October 2006, which is composed of five external legal experts including academics and lawyers to increase the transparency of the bidding process within the Ministry. The meeting convenes 3 times a year and its reports and summary of the minutes of the meetings are made available to the public and can be accessed from the MOD website.

There are eight Regional Defence Bureaus in the MOD: each Bureau has set up a third party Tender Monitoring Board consisting of external legal experts to investigate the appropriateness of the MOD contracts made through it. The regulations of the tender boards are publicly available. These internal efforts to guarantee and monitor legal compliance and transparency are supplemented by independent and external investigations by the Board of Audit of Japan (会計検査院) and the Japan Fair Trade Commission (公正取引委員会).

Laws and regulations exist that disallow collusion. Negative incentives for both MOD personnel and contractors range from disqualification as a tenderer to penalty fees, dismissal and criminal prosecution. One highly visible effort by the MOD to eradicate an endemic corruption practice was the change to Article 62 of the SDF Law, which extended the moratorium for SDF personnel involved in defence procurement to take up positions in tendering companies requiring official approval of the Defence Minister from two years to five years after retirement from the SDF.

Several incidents involving MOD officials have been identified in the recent past, even after the high profile collusion scandal involving the former Administrative Vice Minister, Takemasa Moriya received enormous public and media attention in 2008. One of the major MOD-led collusive biddings that was disclosed in March 2010 (the so-called 'MOD-led Collusion in Air SDF Office Materials Order (航空自衛隊事務用品発注官製談合)') resulted in 50 MOD officials involved in the collusion being subjected to disciplinary punishment, and the resignation of the Chief of Staff of Air SDF, Kenichiro Hokazono.

MOD-led collusive bidding seems to have been effectively tackled after a series of major reform initiatives were introduced in response to the major collusion case within MOD in 2010. However, a number of irregularities have been reported in the areas of overpayment (過払い) or inflated invoicing (水増し請求) and the import of arms via Foreign Military Sales from the United States. These incidents are evidence of the inability of MOD project and contract managers to supervise defence contracts effectively.

Procurement officers in the MOD Equipment, Procurement and Construction Office, for example, receive training to ensure that the defence contractors meet their obligations on reporting and delivery, though details of compliance training are in the public domain; handouts for the seminars, overview of the seminars, and even the guidance book for the lecturer can all be downloaded. The MOD has also introduced a pre-bidding technical screening of the qualification of potential tenderers. However, the MOD is very concerned about the lack of sufficient and adequate supervision to international business contracts and transactions. The MOD has begun to hire legal experts and accounting experts to strengthen their capability in this area.

Staff shortages and rotations are no more a problem in the MoD than for Japanese bureaucrats in other departments, though they may nonetheless be an issue affecting the capacity of procurement department. The post rotation of &quoute;first grade&quoute; civil servants is likely to be only around 2-3 years, as they are rotated around to grasp the overall dynamics of the bureau, so as to prepare them for higher, leading positions. But there are also those that stay in the same or related fields throughout their careers and can become expert. The newly established ATLA is also a promising sign that the MOD may be addressing these issues to some extent. The consolidation of various procurement bureaus into one has the potential to enhance expertise of those that tend to stay in one function areas

There are mechanisms in place to allow companies to complain about perceived malpractice in procurement. For example, the Equipment, Procurement and Construction Office of the MOD has a section that deals with complaints about collusive bidding, artificially inflated invoices, and other malpractice in procurement and construction contracts. There are two ways to report complaints formally to the MOD: (1) reporting via the whistle-blower protection programme; and (2) reporting without it.

Regulations regarding whistle-blowing and the whistle-blower protection programme are based on an assumption that whistle-blowers are primarily from within the MOD - the protection programme is designed to protect the whistle-blower from illegal dismissal by the MOD. Tendering companies that wish to continue having business with the MOD may therefore hesitate to report malpractice in procurement for fear of affecting their future relationship with the MOD or other tenderers.

The Equipment, Procurement Construction Office has now been restructured under ATLA, but this new organisation has yet to establish a section on their website for whistle-blowers.

Corrupt suppliers have been punished depending on the level of their corrupt behaviour, with punishment often ranging from suspension from the bidding process to paying a penalty. For example, as a consequence of a scandal in 2007, Yamada Corporation was dissolved. Some argue that the defence industry has very different characteristics and cannot be treated in the same way as other industries. A key argument is that the government should not and cannot rely on foreign countries for its key defence technologies. Hence, its domestic defence industry often has to be protected and nurtured beyond the normal economic rule of efficiency and fairness.

It appears that the government intends to protect the fragile defence industry in Japan for national security considerations, and that harsh punishment has often been avoided as a result. Only a handful of corruption cases have been seriously discussed in the National Diet or covered by the leading national news media since a major corruption scandal involving high-ranking MOD officials in 2008. For example, Mitsubishi Electric was indicted in a major corruption case in 2012 along with a number of other defence companies, and made to pay a penalty for breach of contract. Nonetheless, Mitsubishi Electric remains as one of Japan’s key defence suppliers.

The Japanese government does not impose import offsets. However, the government is considering adopting offset contracts based on the recommendation of the Defence Production, Technological Base Study Group (防衛生産・技術基盤研究会), which is organised by the MOD and composed of external experts, journalists, and stakeholders. By referring to the cases of the United States and South Korea, the government seeks to support the Japanese defence industry by expanding both domestic and international markets and increasing the demand for products manufactured by Japanese Defence Industry.

The replacement of &quoute;the three principles of arms exports&quoute;, which prohibited Japan from exporting armaments to &quoute;the three principles on transfers of defence equipment and technology&quoute; in 2014 has also paved the way for offset exports. Although direct export offsets are yet to be in place, there are recent cases of license manufacturing exports for arms. For instance, a &quoute;seeker gyro&quoute; used in the missile defence system, PAC-2, was licensed for production in Japan and these were exported back to the US. According to the final source listed, there were 5 such licensing cases in FY2014-15 (the first year after the new three principles had been established).

License exports are subject to discussion at the National Security Council and the final authorisation is given by the Minister of Economy, Trade and Industry.

Japan does not impose offset contracts. However, the government is considering adopting offset contracts based on the recommendation of the Defence Production, Technological Base Study Group (防衛生産・技術基盤研究会), which is organised by the MOD and composed of external experts, journalists, and stakeholders. By referring to the cases of the United States and South Korea, the government seeks to support the Japanese Defence Industry by expanding both domestic and international markets and increasing the demand for products manufactured by Japanese Defence Industry. Nevertheless, judging from the final report of the Defence Production, Technological Base Study Group, the government of Japan has not yet considered thoroughly how to make the details of offset programmes, contracts, and performance available to the public.

The information of these license offsets which were referenced in question 70 are in the public domain, since the Ministry of Economy, Trade and Industry is required to submit an annual report on the status of defence equipment export approvals.

Japan does not impose offset contracts. However the Japanese government has undertaken a comparative study of offset contracts in other counties such as the UK, Italy, Greece, South Korea and Saudi Arabia. The introduction of offset contracts is being considered with the aim of supporting the Japanese defence industry and achieving cost effectiveness in import of defence equipment from overseas. It is not presently clear what kind of regulations will be applied to the offset contracts if the Japanese government decides to enter into offset contracts with foreign countries. It has been reported that the introduction of offset contracts in Japan would be difficult due to very different defence procurement practices in Japan however.

There is a positive aspect of the introduction of the offset contracts from the perspective of increasing the transparency of the defence procurement. In the current practice of foreign defence procurement in Japan, the number of items purchased, the date of delivery, and the total amount (budget) of purchase are not specifically articulated upon making contracts. Such a fluid situation will have to be changed in order for the government to engage in offset contracts.

Due to the nature of license manufacturing, the process of deciding on licensing goes through a different process than other contracts. However, as mentioned in Q.71, all license offsets are subject to discussion at the National Security Council and the authorisation is given by the Minister of Economy, Trade and Industry.

The MOD does not have a sufficient capacity to conduct nor scrutinise its overseas contracts, which are primarily from the US, without relying on agents or brokers such as trading companies or experienced individuals. The use of, or reliance on, both agents and brokers has been considered to be a major cause of inefficiency and illegal action in defence procurements, particularly in overseas defence procurement.

One endemic system of corruption works in the following way: the MOD/SDF legally provides defence procurement contracts to a trading company. In return, this company accepts retired officials from the MOD/SDF under the well-documented practice of “amakudari”. (It must be acknowledged however that the difficulty with amakudari is that the knowledge and experience of former MoD officials is something that the private companies really want). An arms manufacturer in the US subsequently provides the exclusive right for negotiating a contract on its behalf to an individual broker. With a senior politician serving as an intermediary, the broker connects the Japanese trading company to the manufacturer in the US. In return, the broker can get a legal commission, and the politician can get a political contribution from the trading company. The case involving Yamada Corporation, a leading arms trading company in Japan, and Naoki Akiyama, the executive director of the Japan-U.S. Center for Peace and Cultural Exchange (日米平和・文化交流協会), serves as a good example of this.

Yamada Corporation was discovered to have been involved in many illegal overseas defence contracts. Following a series of accusations of illegal activity through its relationships with high-profile political and defence officials by the media in 2007, Yamada Corporation dismissed all of its employees and was dissolved in September 2011. This incident vividly illustrated how deeply corrupt practices have penetrated the triangular relationship among politicians, defence officials, and defence brokers.

There is some evidence that a certain level of oversight exists in the form of legislation requiring the ministry to report where former officials found their new job and whether they had taken role while in the ministry that had dealt with this person’s new job or not. A list of personnel from the MoD is published openly on the MoD website, enabling a certain level of oversight/scrutiny.

The basic information about public procurement is publicised when the bidding announcement is made, but information regarding the payment timelines, interest rates and commercial loans or export credit agreements is not listed in the bidding announcement. A monthly summary of the contracts is made available via the website of the MOD when the contract is concluded. This summary does not include the payment timelines, interest rates and commercial loans or export credit agreements, but it lists the name and the address of the tenderer, the section of the MOD that is responsible for the management of the contract, the anticipated price, and the contract price. This shows that information about the payment timelines, interest rates and commercial loans or export credit agreements is provided to the tenderer but not to the public prior to the signing of the procurement contract.

Since the reform that the Defence Ministry has been undertaken since 2012 following repeated revelations of defence related industries overcharging MoD for various defence procurements, a number of initiatives have been taken to increase the transparency of defence procurement. Each section of the MOD/SDF that is involved in bidding and contracting has been issued the “Guidance for Bids and Contracts” (入札及び契約心得), which was first published in July 31, 2006 and has been revised constantly.

Guidance issued for the Joint Chief of Staff deals with the topic of sub-contractors in Chapter 6, section 6.4. The major focus has been placed on the contracting process of a lead tenderer however, and limited attention has been paid to the supervising responsibility of the main contractor for the anti-corruption behaviour of sub-contractors. A key issue is that a company that is penalised due to its previous wrongdoing can nevertheless be included in the supply chain as a secondary sub-contractor if that company is considered to have some irreplaceable capacity.

No stipulation that contractors must ensure subcontractors adopt anti-corruption programmes was included this guidance.

As elaborated in Q11, the government justifies all military procurements according to strategic / military needs by referring to the NSS and NDPG as a strategic document, Medium Term defence Program for 5-year-terms, and Defence Programs and Budget of Japan for annual planning. However, political influence may also be a factor.

The most critical political influence that can be visibly detected over the decisions of defence acquisition is the Japan-US Security Treaty (the Treaty of Mutual Cooperation and Security between the United States and Japan). It is inevitable that the decision of the Japanese government regarding the purchase of its military equipment from overseas is largely dependent on its relationship with the US as the seller in order to maintain interoperability between the SDF and the US military, as well as to maintain a strong political relationship. The Japan-US Acquisition and Cross-Servicing Agreement (ACSA) has enables reciprocal provision of logistic support, supply and services between the SDF and the US military, and Japan has purchased its defence assets from the US via Foreign Military Sales.

Japan also has purchased military equipment from other foreign countries such as the UK, Germany, Canada, France and Israel. The Japanese government provides rational for purchasing certain military assets in the official document called “Defence Programs and Budget of Japan” (我が国の防衛と予算). Nevertheless, there is criticism of US interference with the Japanese efforts to develop national capacity to produce military assets such as fighter airplanes. For example, the Mitsubishi Heavy Industries produced the first domestic fighter jet called F-1 in 1977. However, upon the decision of the successor fighter jet (F-2), the Japanese government adopted the idea of producing F-2 based on the Lockheed Martin’s F-16 instead of producing F-2 domestically. It was alleged that this decision was influenced by political considerations of the then Prime Minister Yasuhiro Nakasone, who yielded to the pressure from the US. Similar accusations have been made by defence experts such as Shinichi Kiyotani and the mass media in Japan regarding recent decisions to adopt the Lockheed Martin’s F-35.