Case Summary and Outcome

The Nagoya District Court, in a case in which the Japanese Ministry of Economics denied an information request from a citizens group regarding finance-related documents, held that the business information exemption in the Law Concerning Access to Information 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. The Court ordered the Ministry to disclose the information.

This case analysis was contributed by ARTICLE 19.

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 Japanese 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 Overview

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 the 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 had 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. The Court dismissed this argument, stating 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, the Court held that disclosure of this information cannot cause an objectively apparent obstruction to negotiations or to the financial operations of the Foundation.