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Published January 18, 2008 10:10 AM

Japanese Paper Industry in Recycling Scandal

Two major players in the Japanese paper industry have been left with egg on their face after admitting they lied about the amount of recycled paper in their products.

Several days ago Nippon Paper Group, the second largest paper company in Japan, admitted it had lied about the percentage of recycled material in its products. Oji Paper, the country’s biggest paper company, revealed that it too had lied about the recycled content of its paper today.

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Oji had claimed that up to 50% of its paper was made of recycled materials in one case. The actual amount was between 5% and 10%. They had also claimed their envelopes contained up to 70% recycled paper, but they never actually contained more than 30%. Some of their paper contained no actual recycled material.

Oji Paper’s president Kazuhisa Shinoda said:”We had let the ratio of recycled paper fall amid rising shipments while the amount of recycled paper did not grow.” He added that the firm “betrayed public trust and we apologise to our clients and customers”. Shinoda said that while he apologized to the public, he would not be stepping down over the incident. This contrasts with Nippon Paper’s president Masatomo Nakamura, who announced he will resign in order to take responsibility for the company’s actions.

While the two companies are the largest firms involved in the scandal, they’re by no means the only ones. Five of the leading Japanese paper companies are under scrutiny for allegedly lying about how much recycled content they use. The Japanese fair trade commission is determining whether they companies can be prosecuted under mislabeling laws.

The incident has had an effect on the companies’ bottom line as well. Shares of both Nippon Paper and Oji Paper dropped drastically. Nippon Paper is feeling the heat from its clients as well, as Fuji, Xerox, and other paper retailers said they would no longer sell their products.

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