By Antoni Slodkowski
TOKYO, April 1 (Reuters) - Japan is considering expanding a controversial program that now offers workers from China and elsewhere permits to work for up to three years, as the world's fastest-aging nation scrambles to plug gaps in a rapidly shrinking workforce.
Prime Minister Shinzo Abe's Liberal Democratic Party on Tuesday submitted a proposal to let workers to stay for up to five years, relax hiring rules for employers and boost the number of jobs open to them.
"We will strengthen the governance of the program," LDP lawmaker Yasuhisa Shiozaki, who authored the proposal, told reporters. "We are aware of the concerns and we allowed people who had objections to voice their objections."
Shiozaki said the LDP wanted to see harsher penalties for Japanese companies that abused foreign workers and would use external inspectors and local governments to monitor compliance.
The program, started in 1993, sponsors around 150,000 workers, mostly Chinese, for jobs in areas such as the garment industry and farms.
In theory, the foreign workers come to Japan as trainees to acquire technical expertise, but lawyers and labor activists say many face abuse, from illegally low wages to the confiscation of their passports.
Such conditions "may well amount to slavery", the United Nations said in 2010, and called on Tokyo to scrap the program.
But Japan is desperate for more workers, especially in industries such as construction and farming. With just under half its population expected to be aged 65 or older by 2060, Japan faces a severe labor shortage that promises to hamper Abe's ambitious economic revival plans.
Shoichi Ibusuki, a lawyer who has represented foreign workers based in Tokyo, said the proposed safeguards would not go far enough and urged the government to abolish, rather than expand, the program.
"The workers can't freely choose their workplace after coming to Japan. They are refused the right to sign and cancel contracts, so they have no freedom as labourers," said Ibusuki.
"If you don't fix this structural problem, it doesn't matter how much you tighten regulations, it won't go away," he said.
Nearly 200 companies were found to have mistreated trainees in 2012, a jump of 21 percent from two years earlier, government data show. There were 90 cases of failure to pay legal wages and more than 170 cases of violations of labor regulations.
The shortage of workers is most acute in the construction industry, whose workforce has shrunk by a third from 1997, when public works peaked. By 2010, about a fifth of all construction workers were older than 60.
The lack of workers has left construction companies struggling to meet demand for new projects tied to the 2020 Tokyo Olympics and reconstruction work in areas in northern Japan destroyed by the 2011 tsunami.
Shiozaki said two government panels reporting to Abe will discuss the proposal and consider it as part of a growth strategy to be announced in June.
Foreign-born workers make up less than 1.3 percent of Japan's workforce, according to the 2010 census. (Editing by Clarence Fernandez)