*Note: This is a provisional translation for reference purposes only.
Friday, August 5, 2022
Press Conference Room, METI Main Building
Business and Human RightsI would like to mention one point.
In response to growing international calls for companies to respect human rights, METI has inaugurated a study group and been working to create cross-industrial guidelines for respecting human rights in business supply chains and ensuring what is called “human rights due diligence.” A draft of the guidelines has now been completed, which will be reported today to a meeting of the relevant ministries and agencies that has been set up by the Cabinet Secretariat.
We have been progressively discussing the guidelines to ensure that they will be based on international standards, and easy for companies to understand. To prepare a complete version of the guidelines, we intend to call for public comments and thereby incorporate views from a wide range of stakeholders. We hope to strengthen Japan's international competitiveness by encouraging companies to use the guidelines to reduce their risks and improve their corporate value.
I invite you to hear further details from the administrative staff for more about the guidelines, schedule, and other relevant matters after this briefing.
Sakhalin-2Q: The first question is about Sakhalin-2.
You also spoke about the Cabinet Order announced by the Russian government when I asked you at the on-the-move interview the other day. Please tell us your views on it now that it must have been scrutinized and analyzed. Also, please tell us about the progress being made regarding future action, including in the discussions with the relevant parties.
A: I have been telling the Japanese people that Sakhalin-2 is an important project for the nation from the viewpoint of a stable supply of electricity and gas.
I met with Mitsui & Co.'s President Hori this morning, and personally requested that he positively consider participating in the new Russian corporation that will be established. The administrative staff have also conveyed the same message to Mitsubishi Corporation, and I myself plan to meet with them soon.
On the other hand, the details of the Russian government's decisions are still being confirmed, so I will refrain from commenting on them or making any predictions about future concrete measures. We intend to address the situation by having the public and private sectors act together, in order to protect the interests of Japanese companies and ensure a stable supply of LNG.
Q: I have another question related to energy.
The Australian Competition and Consumer Commission, an independent government agency, has recommended to its government that export controls be imposed on LNG to avoid domestic supply difficulties, and the Australian government will now consider how to proceed.
Japan has also asked Australia to increase production of LNG, and the situation surrounding Sakhalin-2 is becoming increasingly opaque. Can you please tell us how you regard these developments? Also, please tell us how you intend to proceed, including regarding sharing information with the Australian Government.
A: I am aware that the Australian Competition and Consumer Commission has recommended to its government that it initiate the first step of the Australian Gas Security Mechanism to impose export controls on LNG. I understand that the Australian government is going to set up opportunities to discuss the relevant matters with interested parties, and consider the pros and cons of such actions, and what actions should be taken if that is the decision made.
Meanwhile, the Australian Minister for Resources Madeleine King, has said that she will continue to talk with Australia's major trading partners to reassure them that the country remains a stable and reliable exporter of resources and energy, and when I visited Sydney the other day for the Quad, I too urged the Australian side to ensure that the supply of LNG to Japan will not be affected. I intend to continue strongly urging the relevant parties in Australia to ensure that a stable supply of energy for Japan is not compromised.
Q: The Russian Cabinet Order states that the new company is to be established by the 5th. As of now, has the government confirmed that it has been established?
Also, can you tell us what you discussed about Sakhalin-2 with the Prime Minister when you met with him personally after this morning's cabinet meeting?
A: First of all, no details have been reported to us yet regarding the timing and other specifics of establishing the corporation. All we have been told is that intentions must be declared within a month after it has been established, and we have not yet confirmed whether it has been established.
This morning, the Prime Minister and I reaffirmed the basic policy on Sakhalin-2, and as I just said, also affirmed that the Japanese government recognizes it as an important supply base, and will therefore continue to thoroughly maintain the policy.
Q: Have you received any information on Russia's terms for allowing the two Japanese trading companies to invest in the new corporation that is to be established? Also, I presume it would be unacceptable to the Japanese government if Russia required the Japanese side to provide additional funding for equity.
A: Firstly, we have not yet confirmed the detailed terms for participation. However, amid the various exchanges in advance, it will basically entail a change in corporate status; to put it simply, it will be just like moving house. I am not aware of any requests at this point in time for additional financial burden or further funding.
The two private companies are positively considering the Japanese government's request while taking various risks into account. We need to consider together with them how to proceed if unexpectedly large burdens or other tough terms arise. Basically however, I do not think it is appropriate to offer any predictions at this stage.