K.K. Ri Ben Ekorozi

1. The construction company entered into a contract with a private client in November 2022 in Shimonoseki City, Yamaguchi Prefecture, regarding a solar power generation system (hereinafter 'the contract'). The contract involved the construction company installing the solar power system equipment and selling it to the client, with payments made in eight installments according to progress. The contract stipulated that if discrepancies were found during inspection after completion, the construction company must perform repairs before handover. In December 2022, the construction company transferred the land for the solar project to the client through a land sale contract, and commissioned Urban Craft Corporation to undertake grading and installation work from around December 2022 to November 2023. The contract is a mixed purchase and construction contract, deemed a manufacturing supply contract, and thus considered a construction subcontract under the Building Business Act, making the construction company the direct contractor to the client. The construction company violated the Building Business Act by undertaking electrical work exceeding the permitted scope without the necessary electrical work permit. 2. The construction company obtained a general construction license for electrical work on September 29, 2023. However, during the project, it increased subcontracting payments to Urban Craft Corporation without proper permits, violating the Act’s provisions regarding specific construction licenses and exceeding permitted contract amounts. The company also failed to appoint a qualified supervising engineer on-site and did not prepare required construction management documents. 3. The construction company failed to appoint qualified engineers and perform all necessary planning, management, quality control, safety management, and technical guidance, instead subcontracting the main parts of the construction work to Urban Craft Corporation, violating Article 22, Paragraph 1 of the Building Business Act. 4. Initially, the construction company subcontracted only land grading to Urban Craft Corporation. After obtaining an electrical work permit in November 2023, it subcontracted electrical installation work, including solar equipment installation, to the same company, and paid 50 million yen, violating the Act by engaging in electrical construction without the proper permit.

The construction work related to a solar power system contract in Shimonoseki City, Yamaguchi Prefecture, involved land clearing for installing solar panels, including grading based on forest land development permits. Since the work involves clearing forests, the contractor has an obligation to take sufficient measures to prevent sediment disasters. The contractor subcontracted the work to Urban Craft Corporation, which resulted in violations of the conditions of forest land development permit under Article 10-2, Paragraph 4 of the Forest Law, by felling and altering forests outside the project area and within residual forest land. Furthermore, measures such as strengthening temporary disaster prevention facilities and installing sedimentation basins were insufficient. Consequently, in July of Reiwa 6 (2024), heavy rains caused large quantities of sediment to flow outside the project area, damaging nearby rice fields and waterways, and causing harm to the public due to inadequate construction practices.