Photo/IllutrationA secret ledger of accounts of a Myanmar dispatch company lists 6,490,490 kyat kickbacks paid to a Japanese supervising organization at the bottom. Part of the picture is modified. (Provided by a Myanmar dispatch company)

Some Japanese entities accepting foreign technical intern trainees under a government-sponsored program are receiving kickbacks from dispatch companies overseas, sources said.

The practice is not only outlawed, but also a matter of deep concern as trainees might decide not to come to Japan as they are effectively forced to pick up the tab for such funds.

In Myanmar, a senior official with a job placement agency showed The Asahi Shimbun a section of the company's secret ledger of accounts.

The agency is certified by the Myanmar government as an institution that dispatches Burmese trainees to Japan for the program that started in 1993 to train people from developing countries to acquire job skills so that they can use what they learned in Japan to make a living when they return to their homeland.

According to the ledger, the company received a total of 15.12 million kyat (1.1 million yen, or $10,500) from four trainees as fees for handling the process for them to take part in the intern program.

The company made a profit of about 12.98 million kyat after deducting expenses for producing recommendation letters and submitting visa applications.

Half of the amount, about 6.49 million kyat, was paid to a “supervising organization” in western Japan that accepted the trainees, the ledger showed.

“It is a kickback to the supervising organization (in Japan),” the official conceded. “We don’t want to pay it, but there is nothing we can do.”

Last year, this institution paid more than 2 million yen in kickbacks for about 20 trainees. The sum included the amount paid for the four aspiring trainees.

Supervising organizations, such as local chambers of commerce and industry and agricultural cooperatives, place trainees in jobs.

As they operate on a nonprofit basis, they must obtain a license from the government. The organizations are outlawed from receiving fees or financial rewards under the Technical Intern Training Law, which was enforced in 2017 with the aim of providing greater protection to foreign trainees.

The entity that purportedly received the illegal fees denied the Myanmar agency's claim when contacted by The Asahi Shimbun in late July.

“No kickbacks were given and none were received kickbacks,” it said in a statement.

However, the entity in question declined to answer further questions.

Officials with institutions tasked to send technical intern trainees in Myanmar and Vietnam to Japan told The Asahi Shimbun that they paid fees to Japanese supervising organizations.

The practice is primarily due to the fierce competition to find candidates for the program.

The more trainees they can send to Japan, the more they can reap in charges.

For this reason, dispatch companies are keen to prod Japanese supervising organizations toward accepting more trainees by offering “money under the table.”

Financial sources for such payments are brokerage fees the dispatch institutions are permitted to charge trainees.

Developing countries working with Japan on the technical intern training program set an upper limit of such fees per individual.

For instance, the figure in Myanmar is set at $2,800 and $3,600 in Vietnam.

But a murky understanding of every aspect of the program on the part of trainees leaves room for dispatch companies to devise ways to charge more.

One company charges more than $10,000 per individual to ensure its own profitability as well as setting aside funds to reward the Japanese side.

Most trainees coming to Japan cover their fees paid to dispatch companies and travel expenses by borrowing a large sum of money.

As a result, trainees tend to accept they have no choice but to accede when their Japanese employers fail to pay the full amount of promised wages and demand excessive overtime.

As they are obliged to repay their debts, they tend to view their dismal working conditions as better than losing their jobs.

In some cases, foreign trainees commit suicide out of despair.

Akira Hatate, a director of the Japan Civil Liberties Union, a public interest association that supports technical trainees, said it is ultimately trainees who “must pick up the tab for illegal funds” under the current setup.

He called on Japan’s Immigration Services Agency and tax authorities to work together to look into the issue of kickbacks.

“Otherwise, the practice of giving and receiving kickbacks will not stop,” he said.

There are about 2,700 supervising organizations in Japan registered by the Organization for Technical Intern Training (OTIT).

The OTIT, an entity approved by government ministries, exercises oversight of supervising organizations and Japanese companies that accept trainees.

It remains unknown how many of those supervising organizations have accepted kickbacks.

The OTIT, in its website in June, cautioned supervising organizations that accepting kickbacks will result in punitive measures.

Last December, the OTIT issued a similar warning about "inappropriate relations with sending organizations” overseas.

Many of the dispatch companies overseas told The Asahi Shimbun that they are reluctant about reporting to authorities about their dealings with Japanese entities.

“Our license to operate would be taken away if we expose what has been going on,” said an official of one company.

Some Japanese supervising organizations adamantly refuse offers of illegal payments and wining and dining by dispatch companies.

One such organization, located in Kyushu, said it has taken in about 40 Vietnamese trainees to date and spurned frequent offers from the Vietnamese dispatch company to send funds as a token of appreciation.

A senior official with the organization underlined the urgency of rooting out the practice of accepting unwarranted and illegal payments.

“If the practice were left as it is, trainees might stop coming to Japan one day,” the official said.

(This article was written by Makoto Oda, correspondent, and Seiji Iwata.)