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Japan to Keep Closer Watch on Aid Providers

Japan is vowing to keep a more careful watch over Japanese companies involved in carrying out the country's overseas development assistance. VOA's Steve Herman reports from Tokyo the pledge follows a series of financial scandals involving Japanese foreign aid.

Five Japanese companies were suspended earlier this year for either one or two months from bidding on new projects, after they were accused of corrupt or fraudulent practices in such places as Bolivia, Papua New Guinea, and the Pacific island nation of Kiribati.

All five companies are again eligible to bid for official Japanese projects.

A sixth company, Pacific Consultants International, is also back in the good graces of the Foreign Ministry and the Japan International Cooperation Agency (JICA).

Pacific Consultants International was suspended from bidding on new projects for 18 months through March of this year, after it was found to have embezzled $1.5 million in connection with development projects in at least 16 countries.

Japan International Cooperation Agency President Sadako Ogata says an internal agency investigation uncovered the fraudulent billings by Pacific Consultants International.

"It is a big consulting company and it has done a lot of good work," said Ms. Ogata. "But they do re-commission that work to smaller companies, and in that process there was a lot of undesirable losses and ineffectiveness that was discovered. And they are actually already reimbursing quite a lot of the losses to JICA."

The Foreign Ministry revealed Friday that since the lifting of the suspension, Pacific Consultants International has been awarded 18 contracts worth $6 million, through JICA and the Japan Bank for International Cooperation.

Foreign Ministry spokesman Tomohiko Taniguchi acknowledges the ministry has been reprimanded for not properly supervising billions of dollars worth of aid.

"The Board of Audit made a warning to the Ministry of Foreign Affairs that the ministry has to take far greater care of the details of the contracts so that never again this sort of fraudulent activity will be conducted by the contractors," he said.

Japan, which annually dispenses $6.5 billion worth of assistance to other countries, is the world's second-largest foreign aid contributor after the United States.