On November 12, Eiji HARA, President of our company, Public Policy
Planning and Consulting Co., attended a meeting of the Diet’s Economy,
Trade and Industry Committee in the Lower House and stated his opinion
regarding the Cabinet’s Industrial Competitiveness bill on which
deliberations are taken place in the Committee.
Following is a translation of the document distributed in the Committee.
On the Industrial Competitiveness Bill (November 12, 2013)
・It is sound in that the bill is pillared on ‘regulatory reform’
and ‘industrial metabolism’ as well as that the bill limits the
time span for intensive efforts.
<Past Efforts on Regulatory Reform>
・National level: Regulatory Reform Committee (1998-), Panel for Total
Reform on Regulations (2001-), Committee on Regulatory Reform and
Market Opening (2004-), commission for regulatory and institutional
reforms in Government Revitalization Unit (2010-), Regulatory Reform
・Special Zones: Special Zones for Structural Reform (2002-),
Comprehensive Special Zones (2011-)
・Every administration in the past showed the stance of generally
accepting such ideas.
However, the common challenge has been how to get into the
‘particulars’ after the ‘generals’ soon and to what extent.
○Exceptional measures to corporate evidence
①Will it really achieve the regulatory reform effectively?
・Past efforts (either national or in special zones) left the final
coordination to the Cabinet, a highest-ranked decision-making body.
・National Strategic Special Zones: because such efforts did not make
visible achievements, the Working Group attempted to elaborate a
framework on that purpose (e.g., Advisory Council on Special Zones
and the HQs in each Special Zones, the arrangement that relevant
ministers so not even attend the meeting.)
・‘Exceptional measures on records with corporate evidence’ => is it
only that a supervisory government authority over an industry will
request the regulatory authority of that same industry to ‘request
for taking measures’?
②Selection of reform menu appropriate?
・Past efforts and the National Strategic Special Zones: transparent
process of soliciting proposals and selection of them
・Exceptional Measures on Records with Corporate Evidence (?)
③Specific Images of Reform Menu and Sense of Speed?
・Past ‘Zones’ and National Strategic Special Zones: Reform menus
were shown at the initial stage (=> in case of National Strategic
Special Zones, specific deregulatory measures will likely be taken
in next spring).
・‘Exceptional measures on records with corporate evidence’ => no
release of the initial menu
(items requiring legislative amendments will be arranged after the
ordinary Diet session, implementation of the arrangement will be
④Relation with National Strategic Special Zones
Even in the National Strategic Special Zones, there discussed an
idea of virtual special zones which is not restricted by locational
・There is an aspect that the regulations are in fact newly enhanced
behind the discussion of deregulations (e.g., loan business,
internet sales of medicines, etc.)
・There were such discussions to boost metabolism of the industries in
the government panels including the Industrial Competitiveness
Council as the following:
・Enhancement of corporate governance: highly independent outside
executives, introduction of Japanese version of Stewardship Code,
・Labor Market Reform: Reform of Hello Work, Specification of
Dismissal Rule, etc.
→The urgent tasks include, in addition to the government’s
“promotion of industrial reorganization” and “stimulation of
investments in venture businesses”, these measures mentioned in the
<excerpt from LDP interim report by Japan Revitalization HQ, May 2013>
Enhancement of corporate governance, especially through introduction,
proactive nomination and appointment, of outside executive directors.
Compared to other leading economies, it has been pointed that Japan
has been losing in the international competition due to the excessive
domestic competition because there are too many competitors in a same
industry. Nonetheless, seemingly, the more problematic is the presence
of managers, stockholders and financial institutions that have
accepted the low profit-rates.
Normally, executive directors should bear responsibility to renew
administration and cause metabolism by giving critical comments
concerning corporate insolvency or industrial reorganization as
representative of the stockholders in case that the managers of the
company continued low-profit-making businesses.
This is to say, that, a steady introduction of autonomous, external
directors, will be a step toward realizing industrial reorganization
and metabolism in an autonomous manner.