The Board of Audit of Japan must investigate the Japan Bank for International Cooperation for their financing of projects involving corruption

27th June 2024, Tokyo –  Today, three environmental organisations submitted information on cases of corruption in the financing of the Japan Bank for International Cooperation (JBIC) to the Board of Audit of Japan and requested them to conduct an appropriate accounting audit.

JBIC, which is subject to inspection by the Board of Audit of Japan, is a Japanese policy-based financial institution that invests in overseas resource development projects and projects that help Japanese industries maintain and improve their international competitiveness.

However, human rights violations, environmental destruction, and even corruption were reported in the projects involving JBIC.

The Anti-Bribery Policy of the JBIC states “[e]xporters and relevant parties are required to understand and comply with all relevant laws and regulations prohibiting bribery in the country or jurisdiction where they are conducting business”.

However, Trafigura Pte Ltd, with which JBIC concluded a loan agreement on March 28, 2024, has been found to have violated the U.S. Foreign Corrupt Practices Act for bribery in Brazil.

Furthermore, on April 18, 2017, JBIC concluded a project finance loan agreement for the Cirebon coal-fired power plant expansion project in West Java, Indonesia. There were reports suspecting a bribery case in this project since 2019. In March 2023, the Indonesian Corruption Eradication Commission (KPK) indicted the former regent of Cirebon in connection with a series of bribery and money laundering cases, including cases related to the expansion project. In August 2023, the former regent of Cirebon was sentenced on charges including bribery related to the expansion project.

JBIC’s policy states that “JBIC takes the appropriate actions, such as informing law enforcement authorities, refusal of providing official export credit support, suspension or cancellation of the unutilized portion of loans or mandatory prepayment if it turns out that bribery has been involved in the transaction." However, it is unclear whether JBIC has taken such actions after the corruption case was confirmed.

In light of multiple reports of corruption related to the projects that JBIC has supported, and to improve administrative and fiscal transparency, accountability, and business operations, the Board of Audit of Japan should conduct a further investigation on the legitimacy of JBIC’s loan execution.

Please read our submission to the Board of Audit for further details. (PDF or Japanese page)