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Hi Blog. Here’s a shocking development post-Tohoku disasters: The bureaucrats interfering with international business assistance/opportunities in disaster relief unless Japanese firms could get a slice of the pie. Which begs the question: What’s more important — the lives, shelter, and comfort of stricken Japanese citizens, or maintaining the trade barriers around Japan Inc.? I think I already knew that answer (given what happened in Kobe in 1995-9), but this article helps substantiate it. Arudou Debito
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Foreign firms feel sidelined in post-quake rebuilding
By Julian Ryall for BCCJ ACUMEN, Courtesy of CB
Japan Today.com Jan. 30, 2012
http://www.japantoday.com/category/business/view/foreign-firms-feel-sidelined-in-post-quake-rebuilding
Red tape and rigid adherence to regulations stopped a number of foreign firms from providing help and specialist expertise in the immediate aftermath of the March 11 disasters in northeast Japan, while other firms say their efforts to render assistance to the homeless and destitute were frustrated because the markets here are effectively closed to outsiders.
Among those whose offers of help were dismissed, and who agreed to speak to ACUMEN, are British firms with experience in providing high- quality emergency shelter — that has been gratefully accepted in disaster zones around the world — as tens of thousands of people were living rough in school gymnasiums and municipal offices in the hardest-hit prefectures of Fukushima, Miyagi and Iwate. In addition, there are at least two UK firms that were eventually successful in securing contracts, after having endured frustrating delays and red tape, but they declined to be identified out of fear of jeopardising future deals.
The experience of trying to meet the demands of government ministries and prefectural authorities has left some British firms irritated or angry — in particular those whose members travelled to areas affected by the magnitude-9 Great East Japan Earthquake and the tsunami that it triggered, and who saw for themselves the misery of the victims. The people who lost out due to officials’ inability to think outside the box, they say, were those who had already lost everything in the disasters.
“Our first reaction, on hearing of the disaster, was that we could help — and help very quickly — with low-cost, quickly assembled temporary housing and other raw materials for rebuilding,” said Colin Shea, managing partner of Sure Lock Homes.
The firm, a subsidiary of UK-based Convolvulus Ltd, manufactures solid- wood, interlocking buildings and has been operating for more than 25 years.
“We have the resources, the manpower and the technology to design, make and deliver 500 solid-wood temporary homes each month,” he said. “Each unit can be put up in a single day by two semi-skilled workers.
“We worked 24 hours a day for three days to complete the tender requested by the Ministry of Land, Infrastructure and Transport and I submitted it in person by the April deadline at the Shibuya offices,” Shea said. “It was immediately rejected as we did not have a Japanese partner with a construction license.”
Trade officials at the British Embassy Tokyo used all their contacts and skills to help UK firms get a toehold in the Japanese market, but to no avail.
“Even with their support, we could not get past the red tape”, said Shea, who complains that the experience of trying to offer assistance to Japan has left him deeply frustrated.
The Charles Kendall Group (CKG) had a similar experience.
Three members of staff from the firm’s offices in Kuala Lumpur were in Sendai within 48 hours of the tragedy striking and an operations room had been opened in Tokyo. The firm, which is a global end- to-end supply-chain management group based in London, immediately grasped that there would be a critical need for modular housing. That was confirmed in meetings with officials from the three prefectures most severely affected and the ministry.
CKG responded to the tender, partnering with Berkshire Hathaway’s Clayton Homes — the largest builder of homes in the world — offering 10,000 modular homes that met all the requirements of the ministry and the prefectural authorities. The homes would be manufactured in the U.S. and could have been installed in Japan within 60 days.
Not a single unit was accepted, said Hugh Mainwaring, who spearheaded the campaign to provide assistance.
“Once the tender had been submitted, before the 25 April closing date, the prefectures and the ministry became very distant and somewhat unthankful for the offer,” said Mainwaring. He was told that the local Japanese market would be able to meet the demand for emergency housing — but that was proved incorrect by the delays over the summer that saw families, the elderly and those with infants still living rough well into August.
The Japanese government initially promised to provide 30,000 temporary housing units for victims of the quake and the tsunami, as well as those who had to be evacuated from the immediate vicinity of the Fukushima Daiichi Nuclear Power Plant, by the end of May. The effort fell nearly 3,000 units short and it was not until the Bon summer holidays that emergency housing was available to the 110,000 people who had been in 2,000 shelters across northern Japan.
The ministry stipulated that foreign firms submitting tenders to provide emergency services or assistance needed to have a Japanese partner on the grounds that the three prefectures would find it difficult to communicate with non-Japanese firms. It also had a deadline of one week before tenders had to be submitted.
“As soon as the UK firms heard they had to find a Japanese partner and provide a tender—preferably in Japanese, as the ministry stated — most of them simply gave up,” said a UK Trade and Investment spokesperson at the embassy. “It was just impossible for them to do that.”
The official, who was instrumental in providing help and advice to a number of UK firms that decided to push ahead with the tender process, said the effort was almost certainly futile from the outset. “The ministry was, we believe, keen to show that it was doing all it could to help the people of Tohoku by opening up the opportunity to foreign trade and imports,” the official said. “For example, they relaxed the normal requirement for pre-registration as a government supplier to make it easier for foreign companies to participate. But the reality was that the need for local partners and for submission in Japanese meant that foreign companies were disadvantaged from the start.” But the problems were not limited to British firms and the construction sector.
A large amount of high-end children’s clothing was donated through the Embassy of Portugal in Tokyo during the summer, but was initially refused because the aid agencies said they already had enough, while another firm delivered boxes of gloves to a shelter in the disaster zone, only to be told that they could not be accepted as there were not enough pairs for everyone at the facility.
The barriers that foreign firms need to overcome may not be deliberately erected, and are more likely due to excess caution, inefficiency and Japan not keeping up with technological advances, believes Alison Murray, executive director of the European Business Council in Japan.
“We hope to change their mindset and, once they start removing some of the non-tariff barriers, I think there will be a significant shift in attitude,” said Murray. “They have to overcome the fear that they will be flooded with foreign imports that will be of inferior quality.
“We are not talking about not having any regulations, but we want rational regulations that meet global standards,” she said. “Where there are international standards that the EU and the U.S. use, then Japan should use those standards as well.”
The situation in Tohoku may have been exacerbated by the preference, among local authorities, for employing firms based in the region, in order to provide work for local businesses, she said, while the government has also been slow to draw up a master plan for the overall reconstruction of the affected area.
The hurdles that Sure Lock Homes’ Colin Shea came up against simply encouraged him to try to circumvent the red tape, with a degree of success.
In early November, Shea visited the Fukushima Prefecture town of Aizu Misato to meet the mayor and local town hall staff to discuss the donation of a community centre by information technology and communications services provider KVH Co Ltd for evacuees from the nearby town of Naraha-machi, which was devastated by the tsunami and lies within the exclusion zone around the nuclear plant.
Previously, Sure Lock Homes built a kindergarten in the town of Kamaishi, with the help of the local rugby team, the Kamaishi Sea Waves. The building was donated by Sure Lock Homes and the former CEO of Wedgwood Japan.
“I believe that the Japanese wanted to do everything in-house,” Shea said. “I get a sense of inflexibility.
“Anyone who visits the Tohoku region will see it is the people who are suffering; they are the ones losing out by far,” he added. “I shall never forget the look of hope and appreciation on faces of the people of Naraha on my visit to Aizu Misato. One little boy, curious as to why a foreigner was visiting the temporary home camp, said ‘Hello’ — I think it was his only English vocabulary. And I replied in English to encourage him.
“We will never give up and shall continue offering our building solutions to the Japanese people, especially children,” he added. “We will keep chipping away, so to speak.”
ENDS
16 comments on “Japan Today: GOJ ministries block foreign firms from helping tsunami-stricken Japanese, using bureaucratic stonewalling”
Many Japanese in the disaster zones told me they were also shut out by red-tape. For example, officials in Morioka reportedly rejected licensed doctors who rushed up to Iwate because they hadn’t filled out proper forms. I was told that Miyagi was more open than Iwate to this, but they were late also.
The US navy, for example, immediately dispatched a salvage ship to clear debris to open the Hachinohe harbour to aid shipments. But there was the issue of “what about local salvage companies.” US soldiers also told me about price gouging by landowners “hosting” them in Ishinomaki.
Same issues arose in Kobe 95. Japanese officials wouldn’t allow in European dog search and rescue teams until it was too late. Japan has at least improved the system allowing Japanese troops to deploy faster to disaster areas.
The lesson here is that there needs to be an international system of coordination in advance of disasters, whether in regards to Japan, Haiti, Thailand or wherever. No government in any country can cope in the crucial hours and days after a disaster. There should be a temporary hand-off to allies and international aid organizations, without any loss of sovereignty. In Thailand after the Dec. 26, 2004 tsunami, for example, World Vision could immediately deploy and hire local Thai and foreign volunteers to build temporary shelters in devastated Baan Nam Khem area. Thais had shelters much sooner than Japanese victims.
It was terrible to see people withering away on the floors of gyms and halls in Tohoku in 2011. Everybody in Tohoku was outraged about this.
I went to a hospital in Kesennuma in March. The doctors and admins told me long stories about how they were desperately overworked and exhausted. “What can foreigners do to help?” “Nothing,” they said. We would like to thank the world for the kind thoughts and sympathy, but we can take care of ourselves by ourselves.
“I get a sense of inflexibility.’
He was only in Japan for a couple of days, but 10 out of 10 for being bang on in spotting the problem.
A great deal has been written on non-tariff barriers and measures to trade, and Japan has regularly been noted as engaged in such practices.
Moreover, the global recession can be expected to exacerbate this problem.
What is particular in the case of Japan is the additional “Small Japan” xenophobia about which the blog has written.
This creates the suspicion that Japan engages in such practices not because they are profitable, but, as in the case of immigration measures, even when such practices are economically harmful.
As pointed out with the Kobe earthquake, just another case of history repeating…
The parallels to the Kobe quake have already been pointed out, but reading this, I was also reminded of Japan’s response to the crash of JAL 123. http://en.wikipedia.org/wiki/JAL_123#Delayed_rescue_operation
There are probably other similar cases, and sadly, there will probably be more in the future.
Besides xenophobia, I think bureaucrat also has asymmetric incentive there.
in the case of allowing foreigner to help:
If foreigner success, bureaucrat have nothing to gain. no reward..
If foreigner failed, people may blame bureaucrat allowing gaijin in.
in the case of prohibit foreigner to help:
If problem solved, bureaucrat can claim its their effort.
If problem remained, bureaucrat can claim its not their fault or they are still working on it.
Maybe its just conspiracy, but I can’t stop thinking GOJ using this as chance to provide their industry chance to earn profit or simply providing job for their own.
Here is a link to a related article on possible reasons why Japan has refused aid. Some very interesting points brought up..
some meat:
“Jacques Attali, founding president of the European Bank for Reconstruction and Development, for instance, chastised Japan’s ‘pride and arrogance – along with a penchant for secrecy and lack of transparency’ which supposedly ‘led the public and private authorities in Japan to refuse international aid while hiding the scope of the disaster, both from their own people and from the international community.’”
The fallout from the nuclear meltdown in Japan has been made worse, such pundits argue, by another cultural shortcoming that many see as peculiar to Japan – extreme deference to authority. The Economist wasn’t alone in chiming in with the sentiment that ‘Japan has a political system so set in its ways that it has trouble adapting to creeping change, let alone emergencies on a biblical scale. Too often, the flipside of Japan’s deference is an establishment able to blunder on without fear of protest and social strife.’
These views were echoed by Attali, who claimed that ‘Japanese officials are merely asked in their own polite etiquette what the real facts are. No one insists when they refuse outside help in order not to spread panic, and to salvage their costly investment.’
full article here written by a Mr. Shogo Suzuki
http://the-diplomat.com/2011/07/15/fukushima-and-cultural-superiority/
Japanese love to work harder instead of smarter. It’s culturally ingrained into every aspect of their lives from education to politics to so-called “disaster relief.” Chris Johnson’s account of the doctors in Kesennuma claiming they can take care of themselves despite the obvious is so typical of their “gaman spirit.” This will not change and nothing we NJ will do, no matter how positive, will change that until something comes up and bites the country, the people, and the culture in the ass.
“The ministry stipulated that foreign firms submitting tenders to provide emergency services or assistance needed to have a Japanese partner on the grounds that the three prefectures would find it difficult to communicate with non-Japanese firms.”
Doesn’t this logic ever get old to them? Are there people who actually believe that there is that large of a communication barrier; that there are no Japanese-speaking people outside of Japanese companies; that there are no speakers of foreign languages working in prefectural governments? Beyond that it’s unconscionable to allow that to be a reason to impede disaster relief.
Oh, if I could only get my hands on that magical hanko that trumps all others so I could approve rationality. There must be a super hanko somewhere.
Well, permit me to play devils advocate;
The Japanese in Tohuku got the governance they deserved. Couldn’t we make the case that the general populace’s affected disinterest in the discrimination against and xenophobia towards ‘the foreigner’ that is institutionalized in the system, is not without a little ‘blow-back’, such as the above article? The ‘chrysanthemum and the double-edged sword’ effect in action.
I deal with local bureaucrats reasonably frequently for work, and the company position is that there is no need to rock the boat, but the bureaucrats I deal with are frankly a pain in the backside, and do their country no favours whatsoever.
Two observations. Firstly, they are overstaffed and could function with a lot fewer staff.
Secondly, some of them still think it’s the bubble era and companies are beating down the door to operate in Japan. The reality is somewhat different. If Japan is too much hassle, foreign companies will simply either scale back operations, or leave Japan altogether, at the cost of Japanese jobs and tax revenue.
At both companies I have worked at in Japan, getting head office to agree to invest in Japan has been extremely difficult. Institutional memory around bureaucratic intransigence is very strong.
I understand full well that it is a privelege rather than a right to be able to do business in Japan, but at the same time too much hassle for too little reward equals why bother.
Johnny:
I do not understand your comment:
“I understand full well that it is a privelege rather than a right to be able to do business in Japan, but at the same time too much hassle for too little reward equals why bother.”
It IS a right to do business in Japan.
Japan is a member of the World Trade Organisation, and itself agreed through that process that doing business is a right, and not a privilege.
@Charuzu
Don’t be too hard on Johnny, Japan has been so successful at subverting international laws and conventions/agreements for so long, that he doesn’t realise that WTO membership makes it a right.
Been reading this site and it’s great. I tried to keep a website updated once and appreciate the amount of work involved.
About the article, though, I read it and it lumps together silly rejection of contributions with rejection of a couple of business deals where foreign firms would have provided “modular housing.” These things are disparate. Also, the article seems to be written off company press releases without any independent research, which is not uncommon for popular journalism these days (try following the Apple v. Samsung litigation in the popular press.)
Here is a link to an article that the Japan times article might have been based on: http://bccjacumen.com/features/cover-story/2012/01/disaster-aftermath/ It has a picture of one of these modular homes that looks like it’s built out of a giant version of some kid’s “lincoln log” building set with the notched “lincoln logs” carved from 4x4s. The thing is cute but looks awfully tiny to me, more like a cabin of a couple of rooms than a home, and the design wastes lumber, as you might expect a “lincoln log” type of cabin to do. I suppose since the concept is like a giant kid’s building toy, you could build larger homes with the kit (they built a preschool with one, which must have been cute) and you could disassemble a home that was no longer needed and build something else. What is missing from the article is a. how big the homes would have been, and b. the price! These are essential details to consider in determining whether the Japanese authorities foolishly turned down a good deal or rejected an expensive proposal. In theory, it seems cost inefficient to manufacture houses in California and ship them all the way to Japan.
About the “Japanese partner” requirement, this seems similar to requirements in U.S. government contracts to “buy American” — i.e., get things built by American firms if possible. See http://en.wikipedia.org/wiki/Buy_American_Act for an example.
@Nazcalito
The building in the photo in your link does indeed look lumber intensive! Not my image of emergency disaster housing (but I am no expert in the field). As for the size, I don’t think that it looks too small, but rather too permanent! I don’t know if such high quality temporary housing is desirable.
I could imagine how government officials would turn down these homes in favor of the one that look like they were made from plasterboard and chip board.
This shows how everyone has their own story. It was quite widely covered in the British press soon after March 11 that the British Embassy in Tokyo had been sufficiently obstructive and focused on red tape that a British rescue team was unable to carry out its mission and had to return home. That story itself has two sides, of course, because the government and the Embassy vehemently deny this, but for those who might be interested, it can be read here:
http://www.independent.co.uk/news/uk/politics/uk-charitys-aid-effort-hindered-by-red-tape-2244109.html
I don’t know who’s right, but it does show that you can’t just take people’s word for it when they say “A” happened, and it happened because of “B”. If we believe SureLock Homes that the embassy was nothing but helpful, perhaps we should disbelieve IRC, the rescue team, when they say the embassy obstructed them. Yet both would seem to be the kind of people you’d take at their word.