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).


I will give up on Japan unless the government designates us as National Special Strategic Zone!

*This is a translation of an article published on the website of Tokyo Press Club.

Toward selection of the National Strategic Special Zones scheduled in March, hearings of candidate municipalities for the final selection have been held since last week. Although the hearings are not opened in public, stakeout activities at the door of meeting place would provide us of many hints of surprising alliance or “unique tag-team” formed at this final stage.

One exceptional case was that a famous “fighting farmer” Mr. Shigeaki Okamoto, CEO of Shinsengumi Co., showed up from the meeting place even though the hearings should be targeting at local governments. Moreover, Mr. Okamoto was accompanying the mayor of Yabu City, located in northern part of Hyogo Prefecture, not his hometown Aichi, and Tottori University Professor Nagaharu Mitsuta.
(February 17 18:25 at the door of Nagata-cho Joint Bldg.)

Interview at the door of Nagata-cho Joint Nldg.

Excerpts of the interview:

Okamoto: 60% of Japan’s agriculture is in a similar situation with Yabu City (in which it is difficult to conduct large-scale agricultural management). And, Mayor Hirose of Yabu City is announcing that he will abolish regulations with regard to agriculture with his own initiative. No such courageous mayor can be found throughout the country.

Mitsuta: (Mayor Hirose) may change the history.

Okamoto: it is difficult to initiate such a proposition as there are pressures from everywhere. The officials of my hometown have deaf ears on such proposals, too. That’s why I will give my every effort to Yabu City. If it passes the selection it will make a good model case that can be applied everywhere in this country. The current state is that we cannot even make a start because of the regulations.


Okamoto: The officials of my hometown are no more than that. But the Mayor of Yabu City made a big decision. This is really it (shaking hands)! I finally met a mayor with whom I could share my view!


Okamoto: If it doesn’t pass (selection of the National Strategic Special Zones) and the government states it will only be applied in low-cost, large-scale agricultural areas, let me speak frankly, I will give up on this country!
I would like to protect Japan. I would like to develop this country. Although I have repeatedly spoken as slogan that potatoes made by nameless grandmothers will make dollars, there will be no hope or dream of this country’s agricultural policy if the idea is to be applied to imaginary, large-scale agriculture alone. It will inevitably meet with failure, fin... Let me speak once again, small-sized municipalities like Yabu City do deserve being qualified (as National Strategic Special Zones)!

Mayor Hirose: What the government is standing for is people living in the areas and legislative frameworks should be meant to let people have prosperous lives and to stimulate economic vitalization. It is all peculiar that the government designs uniform frameworks and say “you cannot do it”. All we are saying is please let us give operation of the legal framework in the best suitable way for Yabu City. And if the central government says no to such a proposition, we cannot stop worrying about future of the country’s agriculture. What will happen to local areas and the whole country? I feel depressed when I think of such possibilities.


This Week’s “Nagata-cho” (18-25.Feb, 2014)

 Last week on February 18, the ruling coalition parties, in eye of
passing the initial budget FY 2014 within this fiscal year,
unilaterally decided to hold a central hearing on the budget on
February 25 in the Lower House Budget Committee despite persistent
oppositions from the opposition camp.
 Beforehand, local hearings had been held in Kofu and Kagoshima on
February 21, where local leaders voiced requests for countermeasures
for natural disasters like heavy-snow or construction of roads.

*The state of deliberations in both Houses and committees are
 available from the following websites.
 House of Representatives Internet TV:
 Live broadcasts and video recordings of the deliberations in the
 House of Councillors (Japanese only):

 Meanwhile, the ruling parties also suggested schedules for voting on
the budget legislation in the Budget Committee and plenary session of
the Lower House on February 28 to the opposition parties. If the
ruling camp is able to pass the budget through the Lower House and
send it to the Upper House by February 28, the budget will
automatically be passed into legislation after 30 days even if the
Upper House decides otherwise for the Constitutional clause #60-2
providing priority of the Lower House. The opposition parties rejected
the schedule and in return requested to hold intensive discussions for
four days with Prime Minister Shinzo Abe’s attendance. The ruling
Liberal Democratic Party has taken a negative stance on the schedule

 Opposition parties, led by Democratic Party of Japan, had planned to
submit a counterproposal jointly in the beginning, but Your Party and
Japan Restoration Party started moves to submit their own original
counterproposal bills. So DPJ held a meeting on February 21 and
suggested a joint struggle with People’s Life Party and Yuinotoh,
then each party reserved final responses.

 On reforms on Board of Education in local governments which the
ruling LDP and New Komeito have had different ideas, a subcommittee of
LDP finalized its draft bill on Feb 18 and passed the intraparty
proceeding on Feb 19. The bill entails plans to establish a full-time
appointed position and gives personnel authority over board members to
mayors/governors and other ideas. Although it was approved by the
party officially, there remain internal concerns that the reform may
infringe political neutrality of education and that the board members’
two years terms are too short. Such details will be elaborated in
discussions with the minor coalition partner New Komeito.

 The interparty discussions between LDP and Komeito started on Feb 20.
As Komeito, stressing political neutrality of education, roughly
accepted the reform plan in principle, the focus of discussions will
likely be legal framework of “council on comprehensive education
measures (tentative)”, name of the new position and its terms,
conditions for dismissing board members, etc. Komeito’s concerns
include (1) excessive mayoral/gubernatorial authority through the new
panel, (2) personnel authority of mayors/governors must be carefully
implemented, and (3) establishment of the new panel should not be
compulsory but be decided by municipalities as it may impose burdens
on municipalities.



This Week’s “Nagata-cho” (11-18.Feb, 2014)

 On February 12-13, there were basic discussions on the initial budget
FY 2014 in the Lower House Budget Committee with all the ministers
including Prime Minister attended. Also on February 17, there was an
intensive deliberation on the social security, tax, education, etc.
The opposition Democratic Party of Japan, taking confrontational
tactics toward Abe administration, repeatedly gave questions
concerning interpretation of the Constitution with regard to
collective self-defense, Prime Minister Abe’s visit to Yasukuni
Shrine, diplomatic policy including relations with China and South
Korea, and other matters. On the other hand, while Prime Minister Abe
answered questions of Your Party and Japan Restoration Party, making
concessions as announcing themselves as “responsible oppositions,”
in a sound manner, Abe showed a sarcastic or challenging attitude
against DPJ.

*The state of deliberations in both Houses and committees are
 available from the following websites.
 House of Representatives Internet TV:
 Live broadcasts and video recordings of the deliberations in the
 House of Councillors (Japanese only):

 In a Committee meeting on February 17, with regard to regulatory
reforms that is one of the main pillars of growth strategy, announced
a strong decisiveness to break through the country’s vested interests
within coming two years as concentrative period.
 On Abe’s longstanding policy of corporate tax reduction, the
government’s panel on tax reform started discussions on February 13.
The Cabinet plans to entail policy of corporate tax reduction in the
Basic Guideline of Economic and Fiscal Policy to be compiled in June
this year. In that end, the government will likely launch a working
group to discuss corporate discussions and its financial backgrounds
in early-March.

 On the other hand, the seven opposition parties, including DPJ and
JRP, held a meeting on February 13 to discuss policies, where they
agreed to seek a joint proposition of counterproposal to the budget FY
2014.Also, they agreed to hold discussions on common policies in the
fields of “energy policy,” “administrative reform,” and “disaster management.”



Selection of National Strategic Special Zones

 Toward designation of the National Strategic Special Zones in March,
this week, the government has entered the final selection-process of
holding hearings from local governments.

 The way of selection, according to the “basic guideline” or Prime
Minister Abe’s speech in the Budget Committee, is to be categorized
into the following patterns;
1.Regional urban areas
2.Virtual zones (geographically-unconnected regions will be
  comprehensively designated)

And it seems that
・Tokyo Metropolitan or Kansai areas will be designated as the former
・But an image of the latter-type is not necessarily clarified at this

 Toward final stage of selection, it is said that municipalities
previously acting individually started groping ways of cooperating
with each other or with private companies in different regions in
order to be qualified behind the scenes.
 For example, it is reported that the Shinsengumi co., known as a
new-style agricultural company based in Aichi prefecture, attended
hearing of Yabu City, Hyogo Prefecture, as the City’s business

 Also, although Tokyo is one of the most probable candidates for the
Zones, it is important to see how the new Tokyo governor will take
leadership on this issue.
 At the same time, Osaka is regarded as another equally-probable
candidate for the Zones, but there remains an uncertainty caused by
the coming mayoral election scheduled in March

 In any case, the important point is to start efforts altogether as
soon as the selection of the Zones is to be finalized, as they may
change the country’s scenery all at once.

 Let us hope for prompt designs and appropriate designations.


Banning on Insurance Agency Business?

* Written by PPPC Visiting Fellow

 On January 16, the Financial Services Agency announced revisions of
guideline of supervision over insurance companies as public comment.
The news gave a huge impact on the insurance industry, though it had
been partly rumored.

 To explain it in a simple way, in short, it is that the Financial
Services Agency stated explicitly that it is illegal that
insurance companies delegate sales of insurance goods to insurance
agencies or re-delegate to independent agents (like self-foreman in
construction industry) with whom insurance companies or agencies do
not have direct labor contracts, according to provisions of the
Insurance Business Act.

 Furthermore, the Financial Services Agency states that it would no
longer allow insurance companies and agencies to delegate sales and
advertisement of insurance goods by literally implementing the law,
and pressured insurance companies and agencies to have direct
employment relationships with such agents if they wanted to keep
delegating/re-delegating sales of insurance goods.

 In recent years, there has been an expansion of insurance agency
business (such as insurance window) that handles multiple
insurance goods, but it was in fact backed up by this sort of
re-delegation agencies. This times revision of guideline is meant
to eradicate this type of business.

 On this revision, the Financial Services Agency explains that it is
based on the report of working group with regard to provision of
insurance goods and services in the Monetary Council released in June
2013, and it was decided as part of revision of rules of
advertisements and sales of insurance goods.

 However, actually looking at the report, it could be implied as a
suggestion toward strengthening monitoring over the agents (compulsory
report, on-the-spot inspection, etc.) as well as enhancing training on
employees who engage in insurance businesses irrespective of
employment relationships (in other words, not necessarily demanding to
make direct employment contracts as regular employees).

 Nevertheless, this time, the Financial Services Agency has shifted
its direction suddenly to prohibit all kinds of re-delegation agencies
accordingly with the basic principle.

 On this policy shift, many scream in alarm at sites. A young agent
says I have worked with pride as an independent business agent,
rather than as an employee of agency, since I left a major insurance
company. It is so unfortunate that this will no longer be authorized.
It is difficult to start up an official agency with the current
business scale, so I must find a job in other agents.

 In the background of expansion of re-delegation agencies, in the
first place, there was a deregulation in 2000 regarding employees
engaging in damage insurance business that deleted a sentence saying
employment relationship with agents as its condition; it was
according to requests from the insurance industry to expand the scope
for temp labors.

 Although there was no such provision regarding life insurance, the
same idea has been applied and it has regarded not only the temp
labors but re-delegated agents as employees and many agencies have
delegated advertisements and sales of insurance goods to such
independent agents.

 The authoritys view would probably be that it is necessary to have
a regular employment relationship with agents in order to keep every
employee under thorough training, instruction and supervision, though
obviously visible problems have yet to be made tangible.

 However, it seems that there should have been other alternative
measures to support training, instruction and supervision over such
re-delegated agents. To make them salaried workers is not the only
way. A vision of insurance agent working with pride as an independent
entrepreneur should have been sought.

This Week’s “Nagata-cho” (4-11.Feb, 2014)

 Last week on February 6, 5.46 trillion yen of the supplementary
budget for this fiscal year was approved in the Upper House with
support of the ruling parties and New Renaissance Party. The other
opposition parties voted against the budget for inadequate measures on
possible negative impacts of the consumption tax hike scheduled in
April especially toward mid- and small-sized enterprises (SMEs)
entailed in the budget. At the same time, the Upper House also passed
into legislation other bills related with the budget with regard to
local government subsidies and Japan Science and Technology Agency.

*The state of deliberations in both Houses and committees are
 available from the following websites.can be seen.
 House of Representatives Internet TV:
 Live broadcasts and video recordings of the deliberations in the
 House of Councillors (Japanese only):

 The supplementary budget, giving financial backgrounds to economic
measures to alleviate negative economic impacts of the consumption
tax-hike from April 2014, entailed (1) measures to enhance
competitiveness of infrastructure development and support for SMEs in
eye of the 2020 Tokyo Olympic Games (1.39 trillion yen), (2) safety
measures and disaster management such as disaster-resilient school
building (1.19 trillion yen), (3) transfer to the special account for
reconstruction after Great East Japan Earthquake (1.93 trillion yen),
and measures toward low-income or child-rearing brochures (0.64
trillion yen), etc.
 Sources said that Prime Minister Abe directed all the ministers to
implement the supplementary budget steadily and swiftly in a Cabinet
meeting on February 7.

 According to passage of the supplementary budget, the lawmakers
entered discussions on the initial budget FY 2014 in the Lower House
Budget Committee on February 10. Interpellation sessions will be held
on February 12-13. The government and ruling parties will make efforts
to pass the budget through the Lower House by February 28, a date by
which the budget will be smoothly preceded within the fiscal year,
because the budget will be automatically passed into legislation in
the Upper House 30 days after being sent to the House for
Constitutional provisions. Yet, as deliberation and voting on the
supplementary budget spent a little time, the remaining time for the
initial budget is shorter than every year and schedule is already
rather tight.
 On the other hand, the opposition parties seek to prevent passage of
the budget within the fiscal year by extending the schedule, having an
eye on a joint struggle. Still, the ruling camp dominates majority in
both Houses of the Diet anyways so it is not likely that intension of
the oppositions will be met successfully.



Amakudari in Tokyo Metropolitan Government

* Written by Eiji HARA, PPPC President

 When we speak of amakudari, we tend to turn attentions toward the
issue in the central government ministries. But similar phenomena do
exist in the local governments. The issues are often said to be
particularly serious in Tokyo, to the extent more serious than in the
central government.

Actually, looking at data,
Most of reemployment of executive officials (higher than
  director-level) of Tokyo metropolitan government are undertaken by
  the affiliated organizations (for the past one year, among 160
  officials, 32 were reemployed by supervised organizations, 16 by
  reported organizations, and 39 were recruited by public-interest
On the contrary, among 1,122 retired high officials (higher than
  director-level) of the central government ministries for the past
  one year, many found reemployments in private companies or started
  their own businesses, and the proportion of reemployment in public
  corporations and independent administrative agencies is rather small.

 In the background of such gaps, there are differences in the
regulations over amakudari between the central and local governments.

 In the central government, the first Abe administration in 2007
passed into legislation the revision to the national public service
act and the following regulations were taken into effect.
Prohibition on mediation for reemployment
Restriction on job-application activities, prohibition on lobbying
  after being reemployed
Monitoring by the Reemployment Oversight Committee

 Subsequently, there were emasculation or adverse-reforms such as
Basic Guideline for Retirement Management (expansion of dispatch of
  incumbent officials)
Late-start of the Reemployment Oversight Committee,
However, the regulations do exist in the central government after all.

 On the other hand, as for the local government employees, the bill to
revise the local public service act entailing the following measures
was proposed in the same year 2007, but the bill was dropped without
being deliberated.
Measures to ensure that the local governments implement fair
  management on retirement.
Prohibition on lobbying after being reemployed

 There have been no legislative discussions on the local public
service act with regard to regulation over amakudari thereafter.

 During the time, there was an introduction of regulation which
basically prohibits reemployment of officials in affiliated
organizations through legislation of Basic Ordinance on Employees
in Osaka city and prefectural governments. However, there are no such
restrictions in any other local governments including Tokyo.

 Unfortunately, the candidates for the February 9 Tokyo gubernatorial
election seem to have relatively low interests on such issues at the
current moment.

 In essence, it is hoped that new governor of Tokyo metropolitan
government will tackle with issues relating with dark parts of the
existing structures of administration irrespective of past practices.
It is highly expected that a new Tokyo governor will cope with such issues.


This Week’s “Nagata-cho” (28.Jan-4.Feb, 2014)

 Last week on January 28-30, there were interpellations in both Houses
of the Diet with regard to four government speeches including Prime
Minister Shinzo Abes general policy speech.

*The state of deliberations in both Houses and committees are
 available from the following websites.can be seen.
 House of Representatives Internet TV
 Live broadcasts and video recordings of the deliberations in the
 House of Councillors (Japanese only)

 During the session, Banri Kaieda, representative of opposition
Democratic Party of Japan, took a confrontational attitude by throwing
doubts on the risks caused by policies initiated by the Cabinet such
as (1) widening income gaps caused by Abenomics, (2) deteriorating
relations with China and South Korea, and (3) conservative-colored
legislation such as special intelligence protection bill.
 Kaieda criticized negative impacts of Abes economic policies dubbed
Abenomics and requested to tackle with issues such as raising
wages overcoming increased prices and correcting income gaps. Prime
Minister Abe, given the comments, stressed the positive
accomplishments of Abenomics and gave critical comments on the
economic policies introduced under the DPJ administration in the past.
 Kaieda also criticized Abes diplomatic attitude that worsened the
relations with China and South Korea due to Abes visit to Yasukuni
Shrine late last year and that hasnt realized a summit meeting. In
response Abe stressed significance of the concept of proactive
contribution to peace and showed again his decisiveness toward
lifting Japans self-imposing ban on exercising the right to
collective self-defense by reviewing interpretation of the pacifist
Constitution. Kaieda also opposed to the special intelligence
protection legislation pushed through the last extraordinary session
and stressed significance of two bills submitted by DPJ to amend the
information disclosure act.

 On monetary policy, Abe stated his expectation that the Bank of Japan
would firmly continue the relaxing policy to achieve the 2% price
target, as well as that he does not exclude an idea to revise the BOJ
Act to expand governments interventions with BOJs monetary policy.
On the consumption tax that is to be hiked in April, Abe explained
that measures have been taken to prevent corporations from shifting
the burdens onto small- and medium-sized enterprises.

 While Abe maintained a high-handed manner against the confrontational
DPJ, his remarks have been softer with regard to Your Party or Japan
Restoration Party to which the ruling parties have called for
consultative negotiations. Still, as there have emerged oppositions
against Abes attitude placing importance on strategic dialogue with
the opposition parties among the ruling coalition, Abe avoided further
comments on dialogue with the oppositions. In particular, the ruling
Liberal Democratic Party hasnt obtained consents of its coalition
partner New Komeito on issues of Board of Education, interpretation of
Constitution over the right to exercise collective self-defense, and
relooking of the Three Discipline on Arm Exports, etc. For this reason
LDP and Komeito held a meeting of Director-General and Chairman of
Diet Affairs Committee on January 29 and reaffirmed the conventional
policy to reach an agreement among the Cabinet and ruling parties and
then to obtain consents of the opposition camp.

 On January 30, the lawmakers entered discussions on the 5.46 trillion
yen of supplementary budget that gives financial backgrounds to the
economic stimulus package. Discussions took place in the Lower House
Budget Committee on January 31 and February 3. During the discussion,
Prime Minister Abe expressed his idea to conduct a corporate tax
reduction. Nevertheless, Taro Aso, Deputy Prime Minister and Minister
of Finance, as well as Koumura, Vice President of LDP and Advisor to
LDPs Council on Tax Reform, have shown cautious views on the
corporate tax reduction in an earlier stage.

 On February 4, after intensive discussions in the Lower House Budget
Committee with presence of Prime Minister and relevant ministers, the
voting on the supplementary budget was held and the budget was passed
through the Committee and plenary session of the Lower House.
Accordingly, the budget was sent to the Upper House, where discussions
start on February 5 and the voting will be held on February 6.
 On the supplementary budget, DPJ, JRP, Japan Communist Party and
Social Democratic Party have announced to vote against its legislation.
Although the oppositions had sought a joint struggle against the
budget, the idea was given up in a meeting on January 30 for
inadequate time for coordination. In the meeting of secretary-generals
on February 4, eight parties confirmed to continue requesting the
ruling parties to secure time and opportunities for discussions on
bills submitted by the opposition camp. They also reaffirmed to seek a
joint struggle over the initial budget FY 2014.