Newsletter No. 372
News-Analysis
September 2, 2006

 

ALL SHOOK UP -- TOKYO AND AZADEGAN

Iran’s Ahmadinejad Administration has let the latest ultimatum pass without halting its uranium enrichment activities, and so the ball is back in the court of the “international community.” Predictably, the Bush Administration is taking the hardest line with Bush himself declaring: "We will continue to work closely with our allies to find a diplomatic solution, but there must be consequences for Iran's defiance. We must not allow Iran to develop a nuclear weapon."

Of course, the accusation that Tehran intends to build a nuclear weapon is a major part of the issue. The Iranian establishment has said repeatedly that the nuclear program is for civilian energy purposes, not nuclear weapons. Moderate former President Mohammad Khatami underlined this assertion during his recent visit to Tokyo: "We are seeking a peaceful kind of use of nuclear technology. Iran doesn't want to get access to nuclear weapons. Not at all. We do not need them."

Indeed, no one has yet produced a shred of evidence that Iran’s nuclear program is military, including the latest IAEA report. However, this hasn’t stopped American and other international commentators from behaving as if the existence of a military program were already an established fact.

The whole debate has the ring of deja vu. Weren’t we having the same debate about Iraq just a few short years ago? At that time, US Defense Secretary Donald Rumsfeld issued his famous dictum: “The absence of evidence is not evidence of absence.” True enough. And even Hans Blix said that he agreed with Rumsfeld on this point. Nevertheless, it also needs to be understood that Rumsfeld’s dictum is true in the reverse as well: The absence of evidence is not evidence of existence.

Does Iran have a program to make nuclear weapons? Probably only the Iranian government knows for sure. If the US government had evidence of such a program, they would have every political incentive to make it public. They have not done so. All we hear are the endless innuendoes in the media that lack any basis in established fact. Washington was wrong about Iraq. They could be wrong about Iran as well. We just don’t know yet.

Shinzo Abe, awaiting his coronation later this month, has gone on record making it clear that he earlier believed that Baghdad was hiding WMDs: "Based on the existing fact that Iraq used weapons of mass destruction and biochemical weapons in the past, Japan had a logical reason to assume that Iraq had weapons of mass destruction." I have previously discussed the problems of this particular assertion of Abe in Shingetsu Newsletter No. 141 back in December 2005. One wonders whether he has learned his lesson yet.

At any rate, all of this forms the backdrop to the two interrelated issues of UN economic sanctions on Iran and the fate of Inpex’s involvement in the Azadegan oil field development.

In regard to sanctions, the lay of the land remains difficult to perceive. There can be no doubt that the Bush Administration is lobbying for sanctions; but Russia and China do not seem very enthusiastic. Russian Foreign Minister Sergei Lavrov went so far as to say: "[When] we take into account the experience of the past, we cannot ally ourselves with ultimatums, which all lead to a dead end… Yes, there are countries whose policies raise doubts, and cause discontent, but we all live in the same world, and we need to draw them into dialogue, and not isolation and sanctions."

That sure doesn’t sound like Russia is on board for tough UN sanctions, does it?

If Russia and China are not on board for sanctions on Iran, it is unlikely that Tokyo would want to jump ahead either. This is what accounts for Foreign Minister Taro Aso’s uncharacteristically cautious response yesterday: "I would like to refrain from making any comment when matters are unpredictable… There are different directions we can take."

There are conflicting reports about how much sanctions on Iranian oil would hurt the Japanese economy. On the one hand, we have METI Vice-Minister Takao Kitabata telling a news conference recently: "Unlike in the past two oil crises, we now have ample oil reserves and I believe we can deal with (emergencies) without a hitch… We have developed alternative resources, and our country is the most advanced in the world in energy conservation. We have a thoroughgoing system in terms of oil." On the other hand, Finance Minister Sadakazu Tanigaki said very much the opposite to the press about a week earlier: “Given Japan's high reliance on Iran for oil, it won't be so easy for Japan’s economy to stop importing it… While the issue of nuclear non-proliferation is very important for Japan, securing sufficient oil supplies is in the national interest.”

There also remains the issue of Inpex and Azadegan, which has reached a crucial phase. Mehdi Bazargan, the managing director of Iran’s Petroleum Engineering and Development Company, was quoted by Iran’s Oil Ministry as saying that Inpex has a September 15th deadline to reach an agreement with Tehran over the next stage of development. He further asserted that the landmine issue was "clearly a pretext" to delay the development. If Inpex fails to make an agreement by mid-September, Bazargan threatened that Iran may begin negotiations with Chinese or Russian companies over the matter.

My analysis is that Inpex is indeed dragging its heels over the Azadegan development. The media emphasizes political pressure from the United States, but probably a bigger issue is Inpex’s quite understandable fear that they may pour large amounts of money into Azadegan only to have their own government pull the plug on the project a few weeks or months later. Truly, the dilemma faced by Inpex’s management must be severe.

METI Minister Toshihiro Nikai -- who is probably a key ally in Tokyo of the Azadegan project -- commented publicly on Bazargan’s latest threat: “Iran is trying to shake us up in some ways. We'll take a wait-and-see attitude and respond in the right way.”

Finally, there was the interesting interpretation of Japan’s position in Azadegan offered by Dmitri Kosirev of Russia’s Novosti news service which echoes much of what has been said previously in the Shingetsu Newsletter: “Japan had better play an independent role… The Japanese companies that signed a contract in 2004 to develop the giant Azadegan oil field have received a warning from their Iranian partners: if no work is started on the field in September, as specified in the contract, Azadegan will be turned over to the Russians or Chinese. Perhaps if Japan were not seen in Tehran (deservedly or not) as a dutiful American ally, the situation with the contract could be interpreted as a purely technical rather than a political one. Independent powers are respected and needed by everyone.”

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Discussion between Mr. Tsuneo Nishida, Deputy Minister for Foreign Affairs and Dr. Abbas Araghchi, Deputy Foreign Minister for Legal and International Affairs of the Foreign Ministry of the Islamic Republic of Iran
September 1, 2006

Deputy Press Secretary Tomohiko Taniguchi: Today, as you may already know, there took place a bilateral discussion between Dr. Abbas Araghchi, Deputy Foreign Minister for Legal and International Affairs of the Foreign Ministry of the Islamic Republic of Iran, and his counterpart Mr. Tsuneo Nishida, Deputy Minister for Foreign Affairs. Dr. Araghchi is now in Japan, and he had a talk with Minister for Foreign Affairs Taro Aso yesterday, but during today's talk Dr. Araghchi once again explained the Iranian Government's position about the nuclear issue. The deadline imposed by the International Atomic Energy Association (IAEA) and the United Nations to put their uranium enrichment program on hold was not met, and Dr. Araghchi came to Japan to make the position about why it was not met. During the talk, Dr. Araghchi, as he did with Mr. Taro Aso yesterday, said that all doors on the side of the Iranian Government for negotiations are still open, and they are prepared to continue negotiations with the international community in good faith, on the grounds, as he says, that the counterparts of the Iranian Government in the international community would do the same in good faith.

Dr. Araghchi requested to Mr. Nishida that, as an influential nation among Asian countries, Japan play a positive role to solve these issues. In return, Mr. Nishida referred to the Director-General's report pointing out that Iran has failed to faithfully follow the United Nation Security Council's Resolution 1696, and once again urged the Iranian Government that they should return to the negotiation process as early as possible.

That is about the bilateral discussion between Dr. Araghchi and Mr. Nishida that took place today in Tokyo.

Reporter: You mentioned about Mr. Nishida and Dr. Araghchi's meeting. It seems from the meetings with Dr. Araghchi and Mr. Aso yesterday and the one with Mr. Nishida that Iran continues to hold its position that it will continue with its uranium enrichment, but Japan is continuing to urge Iran to return to negotiations. Is there anything stronger that Japan has told Iran, apart from urging them to return to negotiations?

Mr. Taniguchi: There have been a number of attempts from the Japanese side to convince the Iranian side of how important it is for them to faithfully follow the resolutions of the United Nations Security Council. Due to the time constraint for Mr. Taro Aso yesterday, he did not have much time to reiterate his position, but he understood that his position had already been well taken by the Iranian Government. He did not specifically mention about what Japan was going to do, but he did so with the idea that his position needed no reiteration, understanding that his point had already been well taken.

Reporter: Given that Iran does not seem to be flexible on its position, what do you think is the stance of the Government of Japan? Do you think it is satisfied, or is it disappointed?

Mr. Taniguchi: It is obviously disappointing that Iran has repeatedly failed to follow the resolution that has been coming out from the United Nations Security Council, but we should also note the difference between the two languages. You can see that the President of Iran always uses the most powerful language about it, but on the other hand, the Iranian Government, as shown by Dr. Araghchi this time around once again, also has never failed to repeatedly emphasize that their negotiation doors remain open, and remain for that matter flexible to come to the discussion table. Our position is, if that is really the case, do it as soon as possible. That is our message.

Reporter: How long has Japan been waiting for Iran to return to the negotiating table?

Mr. Taniguchi: It is not just Japan; the international community is waiting and waiting and waiting. This September is going to be a busy month for all of the member countries, and I should remind you that Japan is currently a member of the United Nations Security Council, so Japan obviously is going to be engaged in heated discussions with other nations such as EU3 and P3 nations to say to the Iranian side how important to them it would be to come back to the negotiation table

Reporter: Does the issue of Azadegan ever come up between the two nations?

Mr. Taniguchi: No, no word was mentioned.

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Below is an op-ed article from the Nihon Keizai Shinbun several weeks ago that presents a view diametrically opposite to my own and that of Mr. Dmitri Kosirev. However, the author is Michael Green, whose views are taken far more seriously in Washington and Tokyo. From 2001 to 2005, he was on the US National Security Council (NSC) tasked with managing East Asian policy. Basically, he has been, and still is, one of the Bush Administration’s key advisers on the US-Japan Alliance.

APPEASING IRAN IS CONTRARY TO THE NATIONAL INTEREST OF JAPAN
By Michael Jonathan Green
Senior Adviser and Japan Chair
Center for Strategic and International Studies (CSIS)

Japan Should Cooperate with the US and Western Countries

It is contrary to Japanese national interest to take the course of appeasement of Iran, which is strengthening its activities to develop nuclear weapons in defiance of the international community. Japan should not wait to see how cautious China and Russia are going to react. Japan should seek ways to stabilize the Middle East and energy supplies in cooperation with America and Europe, maintaining a strong attitude in considering imposing sanctions.

Japan and America Have an Inclusive Dialogue over the Azadegan Development

Three years ago, Japan showed a positive will to join in the development of the Azadegan oil field in southwest Iran. It is said that there is a huge amount of oil there, and it was expected to become a huge, independent oil development to replace Japan’s interest in the Arabian Oil project in Saudi Arabia, which expired in 2000.

However, the US government faced a dilemma over this problem. I was one of the members of the Bush Administration at that time. There was a possibility that Japan may have become a target of sanctions through the Iran-Libya Sanctions Act (ILSA) if Japan pushed too far ahead in its development of the Azadegan oil field. For both Japan and the United States, measures were needed to strengthen cooperation. Avoiding sanctions and ending Iran’s nuclear development and its support for terrorism were goals that both countries had in common.

Consequently, the two governments started a dialogue about Japan-America energy strategies. It was an inclusive dialogue about not only Iran, but also general energy strategies and nuclear nonproliferation, including that of Russia and other places.

After this, Japan advanced in its development of Azadegan. However, it was under the understanding that if Iran did not change its ways, it might receive sanction or other forms of pressure. Both Japan and the US strengthened efforts to pressure Iran through the IAEA.

Three years have passed, and at present it is obvious that Iran is directly challenging the international community and planning nuclear development. According to some reports, Iran may construct nuclear weapons within the coming five or ten years. What’s worse, it may gain nuclear weapons much more quickly through the support of “dangerous countries” like North Korea.

I cannot deny the possibility that Japan may lose oil imports from Iran, and such strong economic measures might confront Japan in the future. Japanese political and industrial leaders don’t want this to happen. Japan depends on Iran for 15% of its crude oil. They believe that if the imports stopped, Japan would be affected more than most other countries. Japan is also afraid of losing diplomatic influence in the Middle East and its special relationship with Iran.

Yet because the possibility that Russia and China will agree with imposing sanctions on Iran is low, Japan seems to think that they still have time to consider their options.

Concerns about Imports Can Be Solved by Procuring Oil in the International Market

Those premises are all wrong. Let me explain why one by one.

First of all, Japan should not pay attention to the 15% of oil imported from Iran. What is more important is that Japan imports nearly 90% of its crude oil from the Gulf States. If Iran is regarded as developing nuclear weapons, it will be a threat for all of the Gulf States. There is also the concern that Israel might carry out a first strike, and it may come to a long war in that region.

Iran might try to deter America and other major countries by threatening the use of nuclear weapons in an unstable situation caused by Saudi Arabian and other Gulf States’ fears of its Islamic Revolution. This might cause political unrest among major oil-producing countries, or may trigger competition among some countries to gain hegemonic status in reaction to the advance of Islamism.

These problems would probably cause a sudden rise in crude oil prices. That is to say, Japan should not endanger the rest of its oil by paying too much attention to that 15% of crude oil from Iran.

Second, in the case of sanctions imposed on Iran, it’s wrong to think that Japan will receive disproportionate damage. Not only the countries which impose sanctions but also everyone else would be forced to pay expensive prices. However, crude oil is a market product that can be replaced, and the market will provide it.

Oil does not always need a pipeline as natural gas does. Moreover, the major interested parties would join their hands tightly. In any case, to avoid future conflicts and the imposition of sanctions, there is high probability that Iran would concede. This means that Japan could still secure the necessary oil.

Third, Japan should not be swayed by Iran’s charm offensive. The reason why the Ahmadinejad Administration of Iran has a “special relationship” with Japan is because Japan has kept buying Iran’s crude oil without demanding very much in return.

Iran will probably say that “Japan should act in accordance with its national interests, and should not always follow the US.” This is obviously an attempt to influence Japanese politicians through the utilization of Japanese nationalism and the desire for independence in Japanese diplomacy, which is a sensitive matter.

On the other hand, can we see any signs in the actions of the Iranian government whereby they pay their respects to Japanese culture or society through diplomacy? Is the oppression of women reflecting the special ties between Iran and Japan?

No, it cannot be. Japanese citizens may have an affinity toward Iranians as they do toward Americans, but this should not be applied to the Iranian government.

Iran’s Cooperation with North Korea Increases the Threat toward Japan

Moreover, can it really be true that the “special relationship” between Iran and Japan contributes to Japanese security and national interest? Considering that the Iranian government has wide, cooperative relations with North Korea in regard to missile development, it is almost impossible to believe it.

Through such a cooperative relationship, North Korea’s ability to fire missiles at Japan with chemical, biological, and nuclear weapons has been enhanced.

It is also unnatural to believe that the affiliation of Iran’s Islamic Shia organizations with Hizballah and other Middle Eastern extremist organizations does anything good for the Japanese national interest. That support makes the entire Middle East unstable.

Although the SDF is supporting reconstruction in Samawa in southern Iraq, does it do any good for Japanese national interest if Iran interferes in Iraqi domestic affairs, and spreads instability and violence in the areas where SDF has its activities?

Finally, it should be obvious that Japan should strengthen pressure on Iran without waiting to see what Russia and China will do. America and the EU are now coordinating their opinions.

The largest three European countries -- Britain, France, and Germany -- have sincerely tried to persuade Iran to give up nuclear development by using their “special relationships.” From this experience, the EU found that diplomacy doesn’t work on Iran without pressure, including the application of future sanctions. Russia and China keep refusing stronger measures through the United Nations.

The US and Japan will enhance their strategic dialogue about preventing nuclear proliferation. The US government should let Japan join in the diplomatic efforts in regard to Iran. The Japanese side should also discuss what is truly in their national interest at this current point in time. This means securing sources of energy from the entire region, and at the same time fighting against nuclear proliferation.