Monday, May 23, 2005

Japan combats dango

by Brian Turner

Japan’s Fair Trade Commission has been investigating, and has now filed charges against, eight Japanese companies suspected of engaging in bid-rigging in 2003 and 2004.

The charges have to do with the companies’ participation in a scheme to fix bids so that bridge-building contracts would be shared among those companies and denied to other companies, including foreign bidders.

The companies which have been charged include Yokogawa Bridge, JFE Engineering, Kawada Industries, Ishikawajima-Harima Heavy Industries (IHI), Miyaji Iron Works, TTK, Takadakiko, and Kurimoto.

This activity is in violation of Japanese anti-monopoly laws, and has been under investigation since last October, when the FTC carried out searches in the offices of steelmakers and heavy machinery firms in order to secure evidence of the practice.

Bid-rigging is part of a practice in Japan called dango, which is an institutionalized practice to allocate public works contracts among a select group.

A law was passed last month that increased fines for this practice, but the fines have been decreased even before the law goes into effect next year due to opposition by industry and some politicians.

 

 

 

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