Public Policy Planning & Consulting Co. (SEISAKU-KOUBOU) is a public policy consulting firm based in Tokyo, covering broad policy areas such as economic policy, fiscal policy, regulatory policy, administrative reform, international trade and investment, etc.
PPPC provides consulting and briefing services to the clients in the central/local governments, Diet, local assemblies and the private sector.

This blog is aimed at providing general information, latest updates and some of our analytical reports about Japan's public policy in English.
The contents include;
- updates on some important government councils, especially those in which our executive officers serve as the members,
- weekly reports on latest news in Nagata-cho, the political center in Japan, (partially).
- analytical reports and articles by our members and distinguished experts outside the firm,(partially).


On the National Strategic Special Zones

 On November 14, Eiji HARA, President of our company, Public Policy Planning and Consulting Co., attended a meeting of the Diet's Cabinet Committee in the Lower House and stated his opinion regarding the National Strategic Special Zones on which deliberations are taken place in the Committee.

 Following is a translation of the document distributed in the Committee.

On the National Strategic Special Zones(November 14, 2013)


1.      Framework of the National Strategic Special Zones
annex: document submitted by private sector member in the Industrial Competitiveness Council on April 17)
     Purpose of creating the system
l  Breakthrough as “experiment arena for regulatory reform” in Special Zones. It will tackle the “bedrock” regulation

<points to note>
l  Aimed at heightening freedom of business activities
l  Implementation should evade a practice such as that companies acquire approval for preparatory detailed business plan and are allowed to act within the range.
l  Aimed at regulatory reform (including tax reform)
ð  It should not be inclined to “supportive measures rather than regulatory reform”

     Framework for realizing the goal
l  Minister in charge of Special Zones
l  Headquarter of Special Zones
“quasi-independent government” comprised of central government, local government and business
l  Council on Special Zones
Minister-in-charge and relevant ministers have discussion along with private sector member. Final say resides with Prime Minister

   <points to note>
l  Management of HQ
ð  It should not be implemented as arena for central government, local government, and business speak of respective interests (or even veto each other). (Article 8 clause 6 “agreement by all members”?)

2.      Further challenges concerning the framework
l  Integration or simultaneous implementation of the Special Zones and National-level Regulatory Reform
…during discussion this time, central ministries voiced “not suited to Special Zones” type of arguments (employment, local assembly)
ð  If not in Special Zones, then try nationally…
l  Further promotion of information disclosure

3.      Particulars of regulatory reform
Certain progress has been made while the framework hasn’t launched yet
Meanwhile, there were items not accomplished or on which agreements could not be fully obtained in time
l  Example of missing challenges this time
Tax, monetary, transportation infrastructure such as airport, foreign labors, etc.
l  Example of challenges not fully tackled this time
Employment (working hours), agriculture (corporate entry, etc.)

(FYI) document submitted in the Lower House’s Economy, Trade and Industry Committee
    On the Industrial Competitiveness Bill (November 12, 2013)

Eiji Hara

1.      Overall Framework
l  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.

2.      Regulatory Reform
<Past Efforts on Regulatory Reform>
l  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 Council (2013-)
l  Special Zones: Special Zones for Structural Reform (2002-), Comprehensive Special Zones (2011-)

l  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.

²  Exceptional measures to corporate evidence
     Will it really achieve the regulatory reform effectively?
l  Past efforts (either national or in special zones) left the final coordination to the Cabinet, a highest-ranked decision-making body.
l  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.)
l  ‘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’?

     Selection of reform menu appropriate?
l  Past efforts and the National Strategic Special Zones: transparent process of soliciting proposals and selection of them
l  Exceptional Measures on Records with Corporate Evidence (?)

     Specific Images of Reform Menu and Sense of Speed?
l  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).
l  ‘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 further later…?)

     Relation 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 boundary.
l  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.)

3.      Industrial Metabolism
l  There were such discussions to boost metabolism of the industries in the government panels including the Industrial Competitiveness Council as the following:
²  Enhancement of corporate governance: highly independent outside executives, introduction of Japanese version of Stewardship Code, etc.
²  Labor Market Reform: Reform of Hello Work, Specification of Dismissal Rule, etc.

ð  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 paper above.

(FYI)<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.

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