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Nagoya Citizen Ombudsmen v. Director of the Central Japan Economics and Industry Bureau of the Ministry of Economics and Industry

Case number:
1083 Hanrei Times 311
Country:
Japan
Date of decision:
13 December 2001
Court / Arbiter:
Nagoya District Court ( First instance )


Decision:

The business information exemption to FOIA only applies where there is objective evidence indicating that disclosure would result in injury to the “rights, competitive standing, or other legitimate interest” of a business entity or individual.


Keywords:
Commercial confidentiality (including financial/economic interests of private parties or public authorities)
Economic information (including of public authorities, national government; not of individuals)
Harm (including harm to legitimate interest, harm test)
RTI law

Case details:

Facts

A citizens group requested to examine finance-related documents submitted to the Ministry of Economics and Industry by a non-profit foundation formed to organize a World Exposition.

The Ministry refused to disclose two types of information: (1) a list of financial institutions in negotiation with the foundation to provide funding, and (2) cash flow projections for the project. The Ministry relied on the exception in Art. 5(2) of the Freedom of Information Act (FOIA), which exempts business information from disclosure where “there is a risk that public disclosure would cause injury to the rights, competitive standing or other legitimate interest” of a business entity or individual. The requester filed suit.

Decision

The Court held that the Art. 5(2) exemption should apply only in cases where the government can “objectively” show that disclosure would present the risks stated in the Act. Further, the Court ruled it inappropriate to exempt all information formalistically labeled as sales, management or financial secrets, offering a core principle that, when deciding if information should be disclosed, there must be a comprehensive review of such elements as the nature and content of the information, its relationship to information already published, and specific conditions surrounding these matters.

Regarding the names of financial institutions, the Court noted that terms of the proposed loans were in a range typical in the marketplace and that making the proposed lender names public would create no objective risk to the foundation. Regarding financial projections, the Ministry argued that disclosure would cloud the public’s understanding of the finality of the data, but the Court ruled that there was no apparent evidence that the public would misunderstand or incorrectly interpret it.

Finally, the government argued that there was a strong likelihood that disclosure of information such as income from expected operations would injure its negotiating position with potential business partners, but the Court stated that prematurely disclosing the information at issue as known contains only annual amounts, not specific details such as the amount of funding or the conditions on the use of trademarks or joint advertising. Therefore, its disclosure cannot cause an objectively apparent obstruction to negotiations or to the financial operations of the Foundation.

Resources:

Summary of the judgment of the Court by Article 19.