Construction company collusion in Japan

Monday, February 20, 2012

Construction company collusion in Japan

I walked past the very stylish Supreme Court building in Hayabusa-cho, Chiyoda ward, Tokyo, on Monday. There were several TV camera crews waiting outside it, which prompted me to check the news. Sure enough, an important decision had just been passed down by the court.

Four big construction companies: Taisei Corporation, Tobishima Corporation, Okumura Corporation and Araigumi Co., Ltd. ("Big Four,") were originally convicted, along with 30 other companies, of collusive bidding (called dango in Japanese) by the Japan Fair Trade Commission in 2008. The collusion was over a public works project between 1997 and 2000 commissioned by the Tokyo New Town Development Corporation for sewage and drainage work.

The fine imposed on the 30 companies was 600 million yen (about USD7.5 million), and 100 million yen (about USD1.25 million) on the Big Four. By no means big bucks for players of this size, but naturally they appealed.

The case went all the way to the Supreme Court, which today - 15 years after the fact - passed its judgment: that Taisei, Tobishima, Okumura and Araigumi were guilty of collusion.

Construction company collusion in Japan

Collusive bidding for public works projects is very common in Japan and costs the Japanese taxpayer enormous sums of money, considering the gigantic amounts involved in the public works commissioned every year.

The Supreme Court in Japan might better be called the Supine Court considering, at least, how few laws passed by the Japanese Diet it has overturned as being unconstitutional, so any decision it comes to that actually has teeth is big news.


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