West Japan also worried about foreign capital buying up forestry

In February, two men wearing sweaters visited the Uda Forestry Cooperation Uda City, Nara Prefecture. The men said they were managers of an Osaka-based business and spoke with the Co-op chairman for about 30 minutes. The chairman did not take long to determine that they were only after land with a water source and told them in no uncertain terms that he had no sellers for them. The two men promptly left.

Uda City has 18,330 hectares of forest. It is the source of the drainage system for Osaka’s Yodogawa River and the majority of the forest has restrictions over timber felling. The chairman said that although there are members of the co-op who want to let go of their land, he worries that troubles may arise if forestry falls into the hands of foreign capital.

According to the Forestry Agency, there were 40 transactions of forest totaling 620 hectares to foreign buyers across Japan between 2006 and 2010. Of the buyers, 16 listed their address as Hong Kong and 5 listed the British Virgin Islands.

The market price of forest land in Japan ranges from several hundred thousand Yen to several million Yen per hectare. There are rumors that the land can be sold for a much higher price if it includes a water source. The purchase of land containing water sources is though to be part of the ‘water business’ for foreign corporations looking to export bottled water.

Under the Civil Law, the right to collect and use underground water belongs to the landholder. This means that local governments have no legal power to restrict or prohibit any activities that may affect the water.

Hokkaido and Saitama Prefectures are introducing a system whereby the buyer of forestry is obligated to provide advance notice to the governor when buying forestry. Nagano and Gunma Prefectures are also considering introducing similar regulations. A representative from Hokkaido Prefecture said that the ability to understand the movements of foreign capital allows the local governments to act quickly and forestall any transactions.

The Forest Act was revised last April which obligates all new owners of forest land to inform the prefectural governor of the change in ownership.  There are current preparations underway to unify the Act with water preservation laws.

Professor Taikan Oki of the University of Tokyo’s Institute of Industrial Science said that whether it is from foreign or domestic capital, local governments should have powers to restrict any potential risk to natural water sources.

Source: The Yomiuri Shimbun, March 21, 2012.