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(Tentative Translation)

Chapter 1 Six Priority Fields

1. Medical Care

[Awareness of the Issues]

The Japanese medical care system so far has been administrated based on the fundamental philosophy that "all people can securely receive medical care services anywhere at any time" under free access to the universal medical care insurance system and to medical institutions. Under this policy, the Japanese medical care system has been satisfying the needs of patients and contributing to the promotion of national health as a social security system.

Meanwhile, amidst the great changes to the economy and society including the declining birthrate and the aging of the society as well as the advances in information technology, the lifestyles, senses of value, and needs of the people have become diversified. Along with this trend, there has been a growing demand for better and more convenient medical care services. Also, an increasing number of people have come to reveal their desire to gather medical care information and choose their treatment method by themselves. In light of such a situation, the present medical care system is not sufficiently responding to the changing national awareness.

[Direction of Reform]

The purpose of regulatory reform of the medical care system is to realize patient-oriented medical care services. For this purpose, it is essential to improve the efficiency of medical care services by thoroughly streamlining the related procedures, while also raising the quality and ensuring the safety of the services. From the patients' standpoint, it is necessary that transparency is secured in medical care and that they gain more freedom in making their own choices. Based on these fundamental ideas, positive efforts should be made in areas including promotion of thorough disclosure and publication of medical care information, promotion of application of information technology in the medical field, review of the medical fee system, and promotion of competition among medical institutions.

Medical care insurers also play a significant role toward the realization of patient-oriented medical care services. In order to provide patient-oriented medical care services, insurers are expected to serve their role as agents (bona-fide representatives) of the insured (patients). In the future, insurers, who are closer to the insured (patients) and are in a flexible position, should take the initiative to demonstrate their original agent function, and an appropriate environment must be created to facilitate such efforts of insurers. It is also important for insurers to raise their awareness and improve their capacities.

At the same time, it is also indispensable to reform the awareness of individual citizens. Instead of having a passive awareness of wanting more benefits but not wanting to bear the burden or leaving all the responsibilities on medical care services to the government, individual citizens are expected to have the awareness that they are each playing a principal role in supporting the administration of the entire medical care system. Since citizens have the right to lead healthy lives and a desire to receive efficient and highly satisfactory medical care services, they should once again recognize their obligation to bear the corresponding burden of their own accord.

Based on these fundamental ideas, our Council recommends the following matters.

[Specific Measures]

(1) Thorough disclosure and publication of medical care information

In order to realize patient-oriented medical care services, medical care information must be thoroughly disclosed and published to patients as a major premise. If a system to disclose and publish information is established and the offered information is properly assessed by patients, many of the current regulations that are intended for the "protection of patients" due to the "asymmetry of information" will no longer be required, and the situation will approach the realization of patient-oriented medical care services in which the patients' choices are respected. To this end, the following points will be particularly important.

A. Disclosure of the patient's information [To be implemented in FY 2002]

Although disclosure of medical fee bills is regulated at present (1997 Transmittal by the Ministry of Health, Labour and Welfare), it has been pointed out that such regulation alone is insufficient in respect to disclosure of patient's information. With the aim to establish and diffuse the practice among doctors to disclose medical records upon the request of patients while protecting patients' privacy, new rules should be created and the guidelines should be reviewed regarding the disclosure of medical care information.

B. Disclosure of information on medical care service providers [To be implemented in FY 2001 (Implementation in successive steps)]

Publication of appropriate information on medical care service providers (e.g. doctors and medical institutions) will facilitate patients to choose medical institutions by utilizing objective information. It will also motivate service providers to provide better services, and will lead to improvement of medical care services as a result. From such a perspective, the publication of objectively comparable information should be promoted with regard to information on the medical functions of medical institutions, the service content, the field of speciality of the doctor, and the record of past medical practices.

Therefore, various kinds of medical information should be digitized and organized into databases and made accessible by computer networks in order to establish an environment in which the citizens can easily access such information.

C. Deregulation of advertising [To be implemented in FY 2001]

While advertising by medical institutions has been regulated from the viewpoint of protecting patients from inappropriate advertising such as exaggerated advertisements, the regulation has even limited citizens from obtaining information on what they truly want to know, such as a record of past medical practices backed by objective facts. In order to realize patient-oriented medical care services in which the patients' choices are respected, the present advertising regulation should be reviewed, and with a view to adopting a negative list in the future, the content and scope of the currently approved advertising should be drastically expanded for the time being (active expansion of the positive list), while at the same time, the accountability should be clarified regarding cases where inclusion of an advertisement in the positive list is difficult despite such a request by the party involved.

D. Improvement of medical institution assessment [To be implemented in FY 2002]

Presently, the Japan Council for Quality Health Care is conducting assessment of medical institutions, but the content of assessment is centered on "structural assessment" covering the status of facilities, structure, staffing, and organizational activities of the medical institution, which is insufficient as an offer of assessment data and information that the patients truly want to know. In aiming at patient-oriented medical care services, the assessment should further cover "process assessment" concerning the technological level and treatment methods as well as "result assessment" such as treatment achievements, which are the facts that the patients truly want to know, and these assessment data should be widely publicized. It is also desirable that competition should occur in the assessment aspect and that the quality of assessment should improve by the emergence of various third party assessment bodies apart from the Japan Council for Quality Health Care.

Since assessment has only been conducted for about 6% of all hospitals, first of all, national and public hospitals, advanced treatment hospitals, and postgraduate education hospitals should be strongly encouraged to receive the assessment, and measures should be taken to have these medical institutions publish the assessment results and contents.

(2) Improving efficiency of medical processing as well as standardizing and upgrading the quality of medical care services by promoting the application of information technology

At present, information technology has yet to be effectively applied in the medical field. For instance, the medical fee bills and medical records are still mainly in paper form. This situation is hindering the efficiency of sequential medical processing, and not only causing enormous burden in time and cost, but also obstructing the modernization and efficiency improvement of medical care services. Such a situation must be promptly remedied by promoting application of information technology. The application of information technology will also enable the creation of databases of various and large-in-volume medical information, promote medical research, and raise the quality of medical care. To this end, the following points will be particularly important.

A. Fundamental use of electronic billing centering on online billing of medical fees

The "special provision on billing of the medical cost by using magnetic tape, etc. (floppy disks, etc.)" (Ordinance by the Ministry of Health and Welfare: individual specification system) that had limited electronic billing was abolished on October 1, 2001. However, in order to improve the efficiency of medical processing by optimizing the advantages of applying information technology, an electronic bill processing method should be established, and online billing should be made available in addition to billing by magnetic tape. Accordingly, a plan that sets forth a clear target deadline, promotion measures for the realization of such a system, and necessary security measures should be formulated by the end of FY 2001 to promptly realize fundamental use of electronic billing. Furthermore, as a measure to make online billing the main means of billing, a system should be introduced to make institutions that do not adopt the online billing system after a specified time limit bear a related cost, and prompt the institutions to fundamentally use electronic billing centering on online billing.

To securely and safely utilize the online billing system, privacy and security measures will be extremely important, but considering today's situation of diffusion of information technology and the status of its application in other fields, such security problems should be cleared in a short period of time.

Placing emphasis on the actual conditions, online billing should be immediately allowed for those systems in which sufficient security measures have been taken. [To be implemented in FY 2001 (Prompt implementation)]

B. Improvement and consolidation of electronic bill standards and diffusion of their use

Currently, the Ministry of Health, Labour and Welfare has set standards for electronic billing called the "medical bill computer processing system," but the diffusion rate of electronic billing is still low at 0.4%. It is important to promote the electronic processing of medical fee bills and improve the quality of medical care by increasing the efficiency of medical processing and effectively utilizing the bill information.

In addition, the disease names, operation names, treatment names and their codes should be unified in bills and medical records, the format of the bill should be standardized accordingly, and efforts should be made to diffuse these standards. [To be implemented in FY 2002]

The current point calculation rule for medical fees is complicated and ambiguous, so it should be clarified and simplified, and at the same time, a calculation rule applicable to computer processing should be established and made thoroughly known to medical care service providers.

C. Review of the description items in the bill (e.g. description of the main injury/disease name) [To be reviewed in FY 2001 and with a view to implement in FY 2002]

The present bill lists multiple injury/disease names, and does not clearly indicate the correspondence between the injuries/diseases and the content of medical treatment, the date on which the medical care service was provided, or the exitus, so the patient is unable to clearly understand the content of treatment received.

Therefore, the description content of the bill must be clarified. For instance, with regard to hospital treatment, the main injury/disease, the concomitant disease, and the secondary disease should be distinguished based on certain criteria, and the medical fee should be clearly indicated in accordance with the main injury/disease. The description items in the bill should be first reviewed in such a manner, and specific measures should be taken based on those items.

The bill information serves as the basis for standardization of medical care, and can be used by medical institutions to verify and improve their medical level. It also has other significant effects of contributing to the offering of better health care services and information to the insured by insurers and to expanding the application of the prospective payment system. Moreover, common understanding can be gained among medical institutions, insurers, and examination and payment organizations, while it will also improve the efficiency of examination and inspection.

D. Digitization of medical records and standardization of the terms, codes and formats

At present, it is difficult to accumulate information on medical practices because of reasons such as the varied terms used for disease names in individual medical institutions. The digitization of medical records will raise the quality of medical care by facilitating accumulation and analyses of information, and is likely to greatly improve the medical services provided to patients as a result.

Accordingly, the introduction and diffusion of electronic medical records should be promoted. In that process, it is vital that the terms, codes and formats are standardized so that doctors and medical institutions use the same descriptions and formats. Thus, while promoting diffusion of the disease names and medicine names that are currently being standardized, the standardization of other terms should also be completed. [To be implemented in FY 2003]

In addition, the terms and codes used in medical records should be made consistent with those used in bills with the future prospect to adopt a system that automatically generates bills from the medical records.

E. Sharing of patients' information among multiple medical institutions [To be implemented in FY 2001 (Implementation in successive steps)]

Presently, patients' information such as medical records is managed by the respective medical institutions that provided the medical care services. However, in order to realize safe and high-quality patient-oriented medical care services, a measure should be taken to share and effectively utilize patients' information among multiple medical institutions under certain conditions including the protection of personal information. This would increase the efficiency of medical care and promote function sharing and cooperation among medical institutions.

F. Promotion of EBM (evidence-based medicine) [To be implemented in successive steps with a view to establish EBM in FY 2003]

At present, the content of medical care varies among medical institutions and doctors, so it is difficult for patients to choose secure and reliable medical institutions. In order to realize patient-oriented medical care services, it is necessary to create medical care guidelines and databases, as well as to establish a system for providing EBM by the end of FY 2003 so as to promptly enable the wide and general provision of EBM. Also, medical care guidelines for citizens must be created as a measure to facilitate understanding and choice by patients of the content of medical care. The guidelines should be created by a third party organization from a fair and neutral standpoint, and the government should take the role of establishing an appropriate environment to that end.

(3) Helping insurers to demonstrate their original functions

Japan's medical care system is based on social security, so the role of an insurer as an agent of the patient is extremely important for providing patient-oriented medical care services. In order to respond to the varied needs and the requested speed pertaining to the improved living standard of citizens, insurers need to provide good health care services and information to the insured and demonstrate their original functions.

For that purpose, the state-administered operations should be shifted to the autonomy of individual insurers as much as possible, and those insurers are expected to improve their business quality so as to fully serve their functions responsibly with an awareness of autonomy and self-reliance in response to the submission by the insured as their agent. In order to improve the functions of the insurers, it is also necessary for insurers to be able to smoothly gather information on medical institutions and the insured. To this end, the following points will be particularly important.

A. Examination and payment of the bills by the insurer [To be implemented in FY 2001 (Prompt implementation)]

The examination and payment of the bills are originally the role of the insurer, so the insurer should be allowed to choose from various options as follows on its own will: (1) conduct examination and payment by itself; (2) entrust them to a conventional examination and payment organization; or (3) entrust them to a third party (private sector). In the case of abolishing the transmittal that virtually forces organizations, such as health insurance unions, to entrust examination and payment to the Social Insurance Medical Fee Payment Fund (1948 Transmittal by the Director-General of the Health Insurance Bureau, Ministry of Health and Welfare) or the ministerial ordinance obligating such organizations to submit the bills for medical care fees to an examination and payment organization (1976 Ordinance by the Ministry of Health and Welfare) for this purpose, the insurers should be allowed to examine and pay the bills by themselves provided that they secure a fair examination system adequate for public insurance and secure confidentiality of information for protection of patients' information.

B. Formation of cooperative ties between insurers and medical institutions [To be concluded in FY 2001 and to be implemented from FY 2002]

Insurers and medical institutions have the same goal to maintain the health of the insured as well as to help them recover from injury or disease, so they are in a position to cooperate with each other in securing the benefits of the insured by efficient use of the medical care system. Accordingly, closer ties should be formed between them through the promotion of health care services and other activities. At the same time, insurers and medical institutions should be allowed to conclude individual agreements concerning services or medical care fees by giving sufficient consideration to securing free access.

C. System for insurers to gather information from the insured and medical institutions [To be implemented in FY 2001]

In order for insurers to fully serve their role as agents of patients, there has to be a system in which they can obtain necessary information from medical institutions and the insured. If insurers were to become responsible for examination and payment, they must be able to gather the information required for such operations. The question of whether this should be an enforceable authority of the insurers requires further reviewing, but it is already possible for insurers to ask questions or conduct a survey for the good of the insured under the cooperation of the insured based on mutual trust, so the administrative authority should publicize this fact as much as possible. Incidentally, protection of privacy of the insured and confidentiality of information on the insurers' part should be secured as a matter of course.

D. Deregulation and relevant measures for autonomous operations of insurers [To be implemented in successive steps]

Under the recent difficult situation of public finances for medical insurance, insurers are expected to further streamline and improve the efficiency of their operations. On the other hand, they need to make active efforts in providing health care services including disease prevention in order to meet the needs of the insured. Presently, however, insurers operations involve many authorization systems and notification systems that limit the insurers from conducting flexible activities. Therefore, further deregulation and relevant measures should be taken for autonomous operations of insurers, such as deregulation of the various authorization procedures like the procedure relating to disposal of property, or a measure to facilitate joint operations between insurers.

(4) Review of the medical fee system

A. Expansion of application of the prospective payment system [To be implemented in phases]

At present, the fee-for-service system is mainly adopted as the medical fee system in Japan. However, the system has been pointed out as having the negative effects of depriving the incentive for cost reduction and inducing excessive medical treatment. On the other hand, the prospective payment system, though pointed out as being likely to induce less satisfactory medical treatment, is expected to standardize the content of medical care, create an incentive for providing more efficient medical care services through shorter hospitalization periods and cost reduction, as well as decrease the medical fee gaps among medical institutions. The cost reduction achieved by standardizing medical care and reducing quality differences for each diagnosis-related group is extremely different from uniform reduction of medical fees. By giving consideration to these points, the specific contents including the categorization of injuries/diseases, target fields, and target facility requirements as well as the timing of application should be examined, while also promoting standardization of medical care and publication of information. The plan for expanding the target medical institutions for application of the prospective payment system (e.g. diagnosis-related group prospective payment system (DRG/PPS)) should be clearly indicated in FY 2001 and should be implemented in phases.

B. Review of the scope covered by public medical care insurance such as provision of medical care services that combines public insurance medical care and medical care not covered by public insurance [To be implemented in FY 2001 (Implementation in successive steps)]

Citizens' demand level concerning medical care has risen due to the improved living standards and diversified senses of value and needs. Today, there are growing needs for the gathering of information by citizens themselves and the assumption of responsibility for choosing the treatment method, or receiving satisfactory treatment even by paying a fee exceeding the amount covered by public insurance of their own accord or through the use of private insurance. Therefore, it is reasonable from the viewpoint of increasing patients' medical care service options to allow combined use of public insurance medical care and medical care not covered by public insurance under the stance to provide medical care as services, while continuing to secure medical care that is necessary and sufficient as social security which citizens can receive adequately regardless of their ability to bear the cost.

Meanwhile, a specified medical care coverage system has been introduced with coverage mainly recognized for "highly advanced medical technology" and "selected medical care (e.g. beds with extra charges, part of dental materials, and the first consultation fee for a hospital with 200 beds or more)," but the scope of coverage is strictly limited compared with the entire scope covered by public insurance.

To realize patient-oriented medical care services, the scope covered by the specified medical care coverage system should be expanded. In that process, patients should be made allowed to choose combined use of public insurance medical care and medical care not covered by public insurance according to the progress of medical technology and diversification of the patients' needs, based on the premise to provide sufficient information to patients.

C. Review of the pricing method [To be implemented in FY 2001]

While the medical fees, drug prices, and prices of medical materials are decided by the Central Social Insurance Medical Council, problems have been indicated with regard to the pricing method, including the grounds for the price and the process for deciding the price.

As for drug prices, the price appraising rule needs to be drastically reformed by measures including setting fair prices for the original product and a generic product or for a revolutionary new drug so as to create an incentive for development. In addition, effects of existing drugs should be reviewed based on certain standards, and appropriate measures should be taken, such as to cancel approval of drugs of which effects are no longer approvable. Presently, there is a "205 yen rule" under which the fee for medicines worth 205 yen or less (e.g. a one-day amount of internal medicine, a single dose of medicine) can be charged without indicating the medicine name or other details on the bill. However, this rule should be abolished and the details should be clearly indicated on the bill in order to secure transparency of medical care.

Regarding medical materials, the required measures should be taken for rectifying the prices, such as the introduction of a foreign price reference system similar to the case of appraising drug prices, as well as measures for rectifying the gap between domestic and foreign prices, such as the thorough execution of competition policy by drastically reforming the entire distribution system.

Since medical care is broadly pertinent to Japanese citizens, the desirable operations of the Central Social Insurance Medical Council should be reviewed from the viewpoint of securing transparency, neutrality, and fairness in the process of pricing and introducing insurance.

(5) Modernization and efficiency improvement of corporate management in the medical field

A. Review of regulations concerning management of medical institutions [To be implemented in FY 2001 (Prompt implementation)]

It has been considered that the reason for regulating the management style of medical institutions was to maintain the quality of medical care services by restraining entrance of commercial bodies into a domain that is highly intended for the public benefit. However, unlike in the case of a social welfare corporation, the property of a medical corporation belongs to the subscribers, in accordance with their respective shares, and the fund procurement method is virtually limited to borrowings from banks. In order to diversify the fund procurement means of medical institutions, such as direct procurement from the financial market, and to modernize and improve the efficiency of management including the introduction of corporate management know-how, efforts should be made toward improving user-oriented medical care services. To this end, the desirable management style of medical institutions including a stock company style should be examined in the future.

B. Review of the requirements for the board chairman [To be implemented in FY 2002]

There is a regulation that the board chairman of a medical corporation must be a doctor or person otherwise approved by the prefectural governor. In order to pave the way for managing the operations of a medical corporation by separating hospital management and medical care management and promoting efficiency of the operations, the requirements for the board chairman should be abolished, except for a case in which there is a reasonable grounds to assume that the person is unqualified, at the earliest possible time in FY 2002.

(2) Others

A. Securing the quality of medical care workers [Examination to be promptly started to gain the conclusion in FY 2003]

In order to secure safe and high-quality medical care in the midst of dramatic progress of medical technology, it is indispensable to secure the quality and raise the ability of medical care workers, and an environment must be established in which medical care workers can learn the latest knowledge and skills required in accordance with their respective fields of speciality. As one of the measures to this end, efforts should be made to secure the quality of medical care workers even after the qualification has been obtained, by reforming the clinical training system toward the launch of obligatory clinical training for doctors in fiscal 2004, increasing lifelong learning programs, promoting research activities, and disseminating the research results.

B. Reform of education for doctors

Presently, it is said that doctors in Japan are not competing freely nor justly evaluated due to closed old-school-based networks (medical office system). Such a situation should be promptly reformed, and measures should be carried out to train doctors outside of any specific medical office (old-school medical office) during the training period, to enable the objective evaluation of doctors, and to match doctors to be trained and hospitals in a wide scope of areas [Examination to be promptly started to gain the conclusion in FY 2003]

In recent years, the problem of excessive working by intern doctors has been pointed out by some people as a remote cause of medical mishaps. Therefore, from the viewpoint of securing safe and high-quality medical care services and protecting doctors, the working environment of intern doctors and the issue of safety management should be promptly examined and adequate measures should be taken accordingly.

C. Dispatch of workers engaged in the medical field [To be implemented in FY 2001]

A high-quality and efficient medical care providing system needs to be established by effective allocation of specialists engaged in the medical field. Therefore, the need for reviewing the regulation on the dispatch of workers engaged in medical operations should be examined and a conclusion should be obtained.

D. Deregulation concerning sale of drugs [To be implemented in FY 2002 (Implementation in successive steps)]

Considering the result of the measure to shift 15 product groups of drugs to quasi-drugs carried out on March 31, 1999, review of the current system should be continued so that the drugs that satisfy certain standards (e.g. a drug that has caused practically no side effects or other accidents over a long span of time after its release) and whose harmful effects on health are evaluated to be relatively minor by specialists can be sold at general retail outlets.


2. Welfare and Childcare

[Awareness of the Issues]

The common issue in the fields of long-term care and childcare is that there is a demand for system reform that corresponds to the needs of users that will rapidly increase in the future due to the changes in social environment, such as the aging of the society and the increase of working women. Also, as the further diffusion of long-term care and childcare services among users other than the low-income group has increasingly diversified the needs, it has become a vital issue to raise the quality of the services, including the improvement of the living environment in facilities.

Meanwhile, with the launch of the long-term care insurance system and enactment of the Social Welfare Law (Law No. 45 of 1951), both in the year 2000, the system of public welfare, which had been the necessary services provided by the administrative authority to citizens as "measures," was reformed to be based on the free choices of its users and to be fundamentally facilitated under "contracts" between the service providers and the users. As a result, the number of long-term care service users increased dramatically. At the same time, the amount of childcare services provided has been increasing on a nationwide scale, based on the New Angel Plan. On the other hand, the delay of service providers in taking appropriate measures for the regional gaps in the demand for long-term care or childcare services is presenting a serious problem. Long-term care and childcare services are seriously lacking in some areas, and many people are waiting to use long-term care facilities or authorized childcare centers.

This problem is largely attributable to the various problems arising between the new contract-based system and the old system in which the services were "measures." Even after enacting and enforcing the Long-Term Care Insurance Law (Law No. 123 of 1997) and the Social Welfare Law, the government strictly maintains the interpretation of the Constitution of Japan that welfare including long-term care and other services is part of "charitable and philanthropic" activities, and holds that the same kind of public funds as those for social welfare corporations cannot be provided as assistance to private companies to which the regulations and supervision required for maintaining stable and continuous provision of services cannot be imposed. Based on this idea, welfare facilities for long-term care and other purposes built by social welfare corporations are regulated much more strictly than those built by private companies, so public subsidies are provided in respect to stock.

The current welfare system must be reformed toward the direction of securing equal competitive conditions by promoting information disclosure and assessment by third parties. It is the important goal of long-term care and childcare policies to dramatically increase the provision of services and to improve their quality by entrance of various management bodies including NPOs and private companies into the market.

[Direction of Reform]

The long-term care system recognized the entrance of wide-ranging operating bodies including private companies into the field of in-home care. As a result, it promoted competition among the service providers and expanded the options of services for consumers. In the field of in-facility care such as special nursing homes for the elderly, on the other hand, the entrance of private companies is still not recognized. In the field of care facilities that have the function to assist the daily lives of the elderly, there is a way for private facilities, nursing homes, and group homes that provide similar services as long-term care insurance facilities like special nursing homes for the elderly to be subject to long-term care insurance benefits, as an extension of in-home care services. However, there is a great gap in the amount of long-term care benefits.

This is because, while accommodation and meals (the so-called hotel cost) are covered by long-term care insurance in the case of special nursing homes for the elderly and other facilities that are positioned as in-facility long-term care services, the hotel cost is not subject to the benefits in the case of private paid homes for the elderly or nursing homes whose long-term care services are positioned as in-home services provided at a "residence independently selected by the elderly."

In the long-term, there is also an idea to finance the facility establishment/maintenance fee by the long-term care benefits, similarly to the case of medical care insurance benefits, and consider them in substitution to the facility establishment/maintenance allowance for social welfare corporations. Even under the current law, social welfare corporations establishing/maintaining special nursing homes for the elderly are allowed to procure part of the necessary funds (up to a quarter of the total) by loans upon establishing/maintaining the facility, and to reimburse the loans from long-term care benefits.

Under the long-term care insurance system, which is dependent on the users' choice to contract, the users themselves are able to select which service to use between facilities such as special nursing homes for the elderly and facilities such as private paid homes for the elderly or nursery homes. Therefore, it is not only important to create qualification systems, establish regulations based on different business styles, and standardize long-term care services, but also to establish ex-post-facto regulations such as thorough information disclosure, supervision of contracts and assessment by third parties.

With regard to the issue of childcare, the most important point is to consider what brings about the happiness of children. Presently, however, there are many children, particularly small children, that only have the option to use unauthorized childcare centers, including children who are waiting to use authorized childcare centers and children who also require services on holidays. Such a situation is not satisfactory from the viewpoint of the happiness of children. Childcare administration has two legal standards that differ in nature, namely, the minimum standards for children's welfare facilities for authorized childcare centers and the guidance and supervision standards for unauthorized childcare centers, which are implemented according to their respective purposes.

However, when considering the quality of the services provided, there is a gap in burden between users of authorized childcare centers and those of unauthorized centers.

With the aim to remedy this situation, a deregulation measure has been taken to promote conversion of unauthorized childcare centers into authorized childcare centers, but because of reasons such as the difficulty to acquire land in urban areas, the effect of the measure is still very small.

Meanwhile, in order to secure safety and protect the human rights of the socially weak, such as babies, in unauthorized childcare centers, under the principle of "freedom of business," it is necessary to provide thorough guidance and supervision. It is also required to increase the number of high-quality childcare centers through active utilization of private sector managing methods for public facilities.

Social welfare corporations, the core providers of long-term care and childcare services, are greatly contributing to continuous and stable supply of high-quality welfare services, and they will continue to play an important role in the future. However, at present, when the public insurance system has been launched on the premise of competition among service providers under the same conditions irrespective of the type of management body, it is necessary to utilize private companies in various ways including the method of managing a public facility by a private sector. Although deregulation measures have already been carried out for social welfare corporations, further efforts should be made in this area in order to promote competition among varied management bodies, including the existing social welfare corporations, under the same conditions as much as possible.

[Specific Measures]

(1) Competition on equal terms among various management bodies in in-facility long-term care

A. Bearing of the hotel cost for special nursing homes for the elderly by the users [To be implemented in FY 2002]

There is a demand to provide private rooms in care facilities such as special nursing homes for the elderly to make the life of the users more comfortable. In this case, a revision should be made to place the burden of the hotel cost with the users of the special nursing homes for the elderly in addition to the conventional burden relating to nursing care and meals due to the fundamental improvement of the living environment. Also, certain consideration should be given to low-income users who cannot bear such cost.

B. Promotion of the method of managing a public facility by a private body utilizing the PFI method [Already partially implemented; Implementation in successive steps]

The method of managing a public facility by a private body that utilizes the Japanese Private Finance Initiative Law (PFI Law) (Law No. 117 of 1999) is a method by which a PFI operator constructs a facility based on a contract between the public and private sectors, and the facility, which is acquired by the local public entity, is managed by the PFI operator. The acquisition cost has been lately made subject to government subsidy, and also, Article 12 (2) of the PFI Law, which provides that publicly-owned property can be made available to the appointed operator free of charge or for a remuneration lower than the market value, should be actively utilized. While Article 4 (1) of the Local Autonomy Law (Law No. 67 of 1947) had prohibited loans of administrative assets, the PFI Law was amended in the recent extraordinary Diet session and a preferential measure has been adopted. Accordingly, management of public facilities by private bodies that utilizes the PFI should be promoted.

C. Promotion of entrance of stock companies into the field of nursing homes [Already implemented]

Article 62 (2) of the Social Welfare Law provides that authorization of the prefectural governor is required for a party other than the public sector or a social welfare corporation to conduct social welfare business, such as the operation of a nursing home. Although the entrance of private operators had been virtually obstructed, because private operators such as stock companies had not been mentioned as founding bodies or management bodies, a related notice was revised recently to clearly state that any type of corporation can become a founding body or a management body by authorization of the prefectural governor.

D. Promotion of information disclosure concerning group homes [To be implemented in FY 2001]

With regard to group homes for the elderly suffering from senile dementia, financial support for facility maintenance activities by NPOs was included in the budget from FY 2001, but at the same time, new regulations have been added, such as restriction of the number of home units to three within the same site and requirement of the written opinion of the municipality upon authorization. In order to secure the quality of care in group homes, which are highly closed and particularly require a system for protecting the users, the promotion of measures including information disclosure should be continued in the future.

E. Promotion of information disclosure by long-term care service providers and assessment by users and third parties [To be implemented in FY 2001]

Irrespective of the type of the management body, such as the public sector, social welfare corporation, or private company, long-term case service providers should be required to adequately fulfill the information disclosure obligation by creating checklists that can be utilized by users or their families when selecting a provider, and assessment by third parties should be promoted. Moreover, from the viewpoint of consumer interests, the management of the service providers should be supervised more carefully in the future.

F. Improvement of the quality of workers engaged in long-term care services [To be implemented in FY 2002]

With the aim to correspond to various cases of people in need of long-term care, measures should be taken to improve the quality of care workers, home helpers, and other workers engaged in long-term care services, such as a measure to increase training programs for such workers, so as to develop workers who can precisely satisfy the needs of those in need of long-term care.

G. Reform of various regulations for establishing stronger ties between long-term care and medical care

Besides special nursing homes for the elderly, the current major facilities conducting long-term care for the elderly include geriatric health services facilities that place emphasis on helping the elderly to return to their homes. While the living environment in special nursing homes for the elderly is being improved by the changing of all the rooms into private rooms and the adoption of the unit care system, the care environment should also be improved in geriatric health services facilities by paying attention to the fact that they are different in nature from nursing homes which are the places of residence of the users. [To be implemented in FY 2002]

In the meantime, when medical care insurance and long-term care insurance are both applicable to a certain service, the medical care benefits are not granted once the long-term care insurance is applied. However, with a special written instruction of the doctor in charge, one can receive the medical care benefits for two weeks for part of the medical care services, and it has been indicated that this system has been abused. Accordingly, the applicable scope of medical care benefits for such services should be further publicized. [To be implemented in FY 2001]

H. Reform of the system for welfare of the disabled [Consideration to be started immediately and a conclusion to be gained by considering the implementation status of the support fee system to be launched in FY 2003]

Along with the enactment of the Social Welfare Law, it was decided that welfare services for the disabled would be shifted to a system of providing support fees to the disabled in FY 2003. Unlike the conventional measure-based system in which the facilities for the disabled and the content of home services were determined by an administrative disposition, the disabled person can independently choose the content of services and the service provider, and use the services by directly concluding a contract with the service provider. While the municipality pays a support fee for the service used by the disabled person, the user also pays an amount corresponding to his/her ability to pay or such ability of the dependent to the service provider.

This support fee system is highly valued in that it expands the options for the users, but in relation to the long-term care insurance system targeting the elderly, the disabled aged 40 or above and under 65 cannot receive long-term care benefits unless they come to require long-term care due to a disease caused by aging though they are recognized to be insured by the long-term care insurance system, and their benefits are fundamentally based on the support fee system. In that sense, the long-term care insurance system should be reviewed with respect to the support fee system, and at the same time, the relation between the two systems should be fundamentally examined.

(2) Expansion and qualitative improvement of childcare services

Childcare at the present time is facing the serious problem of a shortage of services, particularly in urban areas, due to the rapid increase and diversification of needs. Although efforts have been made recently to increase the number of children admitted and to diversify the content of services at authorized childcare centers, those efforts are not managing to cope with the actual speed of the increasing demand. Furthermore, with the number of working mothers increasing on one hand, and their working conditions changing on the other, generating new childcare needs such as extensions of the time of service or offers of service on holidays. Therefore, children whose parents work for long hours from early morning until late at night are left with baby hotels as their only option because authorized childcare centers cannot cope with such long hours, and deadly accidents are being caused as a result.

Under such a situation, it is an urgent task to increase high-quality childcare services for as many preschool children and elementary school children as possible. The purpose of regulatory reform concerning childcare should be to abolish unnecessary regulations while retaining the necessary regulations for protecting children in order to expeditiously increase high-quality childcare services that assure the sound development of children.

A. Consideration for review of the standards of authorized childcare centers and informing municipalities

One of the measures for promptly responding to the shortage of childcare services is to increase the number of children admitted at authorized childcare centers. In areas with a large number of children waiting for admission, a measure to make the standard for the admissible number of children more flexible should be further promoted particularly regarding public childcare centers. Meanwhile, the founding standards for certain facilities will be considered for possible review. Furthermore, the branching of childcare centers should be positively promoted in order to provide more services while ensuring the quality of such services. [Examination to be promptly started; Implementation in successive steps]

One of the factors holding back the increase of childcare services is that it is difficult for municipalities that have severe financial conditions to succeed in raising the operating funds for new authorized childcare centers. On the other hand, some municipalities augment the subsidy by introducing stricter founding standards than those set by the state, and this is causing excessive financial burden on the state. In order to effectively utilize the limited financial resources and ensure that as many children as possible may be admitted to authorized childcare centers, it is desirable that municipalities do not set unreasonably excessive standards or augment the subsidy, though the quality of the childcare environment must not be allowed to deteriorate.

In addition, by taking measures such as making the standard for the admissible number of children more flexible in areas with many children waiting for admission and expeditious and appropriate authorization of childcare centers that meet the authorization standards, the supply of authorized childcare centers should not be restricted while there is large demand for childcare services. Accordingly, municipalities should be comprehensively informed at an early stage and in successive steps about the deregulation measures that have already been implemented. [To be implemented in FY 2001 (Prompt implementation )]

B. Promotion of entrustment of the management of public childcare centers to the private sector [Already partially implemented; Implementation in successive steps]

Compared to the authorized childcare centers managed by social welfare corporations, public childcare centers have problems of requiring a large amount of management funds and not being able to expeditiously and appropriately meet the needs of the users. Therefore, from the viewpoint of effectively utilizing the limited financial resources and providing childcare services that match social needs, entrustment of the management of public childcare centers to the public sector, such as social welfare corporations, NPOs, and private companies, is considered to be an effective remedy.

Meanwhile, the PFI Law was revised in the recent extraordinary session of the Diet, and the regulation on administrative assets was relaxed as a result. Thus, similarly to the case of long-term care facilities, the PFI method should be utilized to actively make use of public facilities and land lots that are not in use, such as excess school classrooms, as childcare centers, and management of public facilities by private bodies should be promoted by paying attention to potential resources.

C. Promotion of entrance of stock companies to the field of childcare centers [To be implemented in FY 2001 (Prompt implementation)]

In order to avoid obstructing the incentive for the private companies to use their surplus money that has been obtained as a result of efficient management in expanding their businesses into the field of childcare, related transmittals should be reviewed and the accounting procedure should be made more flexible.

D. Strict provision of guidance and supervision to unauthorized childcare facilities [Already incorporated in the amendment of the Child Welfare Law; Implementation in successive steps from FY 2001]

There are indeed more than 200,000 children going to unauthorized childcare centers. They are mostly established in urban areas, but in Okinawa, the number of children going to unauthorized childcare centers exceeds those going to authorized childcare centers, partly due to the historical background. Some of the unauthorized facilities are of high quality comparable to authorized facilities, but some are of such a poor level that accidents could happen at any time. It is an important item of childcare administration to secure safety and protect the human rights of the socially weak, such as babies, at such facilities.

Accordingly, the Child Welfare Law (Law No. 164 of 1947) was revised in the recent extraordinary session of the Diet, by which unauthorized childcare facilities were obligated to submit a notification to the municipality, report the annual management status, and post a notice as well as provide a written notice to users about the management of the facility. Also, the municipality was required to publish the management status of unauthorized childcare facilities and the results of on-the-spot investigation every year, and became authorized to give recommendations to and publicly announce unsatisfactory facilities. Furthermore, the ties between the prefecture and the municipality were made stronger. The purpose of such legal amendment should be thoroughly made known, and guidance and supervision should be strictly provided to unauthorized childcare centers.

In addition to these measures, there are plans to increase the admissible number of children, mainly in cities with large number of children waiting for admission, by utilizing various individual measures taken by the childcare centers, childcare mammies (home childcare welfare staff), and municipalities (e.g. certified childcare centers of Tokyo and Yokohama nurseries).

E. Promotion of information disclosure concerning childcare centers and assessment by third parties [Guidelines to be created in FY 2001 and other measures to be implemented in FY 2002]

Even authorized childcare centers vary in terms of quality and content, so in order to not only allow users to choose childcare centers with a sense of assurance, but also prompt the facilities to further improve their service quality by learning about other facilities, information disclosure concerning childcare centers should be promoted regardless of the type of management body, by appropriately utilizing the current laws and ordinances. With regard to assessment by third parties, guidelines should be created and an appropriate system should be established to facilitate such efforts.

F. Formation of stronger ties between childcare centers and kindergartens through sharing of facilities [To be implemented in FY 2001 (Prompt implementation)]

In order to appropriately correspond to the diverse childcare and education needs of preschool children, sharing of facilities between childcare centers and educational facilities of kindergartens, etc. (1998 guidelines by Ministry of Education, Science, Sports and Culture and Ministry of Health and Welfare) must be promoted and their ties must be further strengthened in respect to management and use of facilities. However, the operations must be designed to suit the actual conditions of the parents' styles of working and child raising as well as to meet social needs.

In addition, from the viewpoint of responding to the various childcare needs, the daycare services at kindergartens should be expanded.

G. Reform of various regulations on childcare workers [To be implemented in FY 2002]

Based on the amendment of the Child Welfare Law in 1997 and the revision of Childcare Center Service Guidelines in 1999, the training curriculums at training institutions for childcare workers (junior colleges, universities, training centers) were also reviewed in order to train childcare workers with the quality to provide community-based child raising support and meet other specific demands of the times.

However, from the viewpoint of maintaining and improving the quality of childcare workers even after graduation, a system such as provision of the content of training via the Internet should be devised to facilitate future learning of the childcare workers actually engaged in the field.

Meanwhile, childcare centers have been recognized to include a certain proportion of childcare workers with short working hours in the designated number of childcare workers to be allocated since 1998, but as the childcare demands have been continuing to diversify and increase since then, including the stronger demand for longer service hours, provision of services on holidays, and admission in the middle of the fiscal year, it is necessary to enable childcare centers to flexibly respond to these demands. The above measure also contributes to creating an environment in which childcare workers who once left their work can demonstrate their skills again in childcare services, so consideration should be made to further relax the present regulation that limits such workers with short working hours to less than 20% of all childcare workers.

In the recent extraordinary session of the Diet, the Child Welfare Law was amended to make the qualification of a childcare worker a national qualification, define the services, create provisions on implementation of examination and registration, and prohibit those who are not qualified as childcare workers to use that title (monopoly of the title of childcare worker) with the aim to improve the quality of childcare at places including unauthorized childcare centers.

H. Introduction of the direct subsidy method for users of childcare services

With the amendment of the Child Welfare Law, the parents became eligible to use the childcare center of their choice from April 1998. At the same time, childcare centers became able to submit the application from on behalf of the parents upon the request of the parents. However, the system in which the municipality examines the application and decides the admission to the childcare center after final coordination has not changed even after the amendment.

By observing the implementation status of such new admission methods, the status of children waiting for admission, and the implementation status of the long-term care insurance system and the support fee system for the disabled, consideration should be made on the possibility of allowing the parents to directly apply to the desired childcare center and the childcare center to examine and decide upon admission in the long term. When examining the possibility of direct contracts between the users and the facilities, the possibility of introducing a method to directly provide subsidies to the users instead of to the childcare centers should also be considered in the long-term, while paying attention to securing the quality of childcare services.

I. Enhancement of systems to accept schoolchildren after school hours [Implementation in successive steps from FY 2002]

Systems to accept schoolchildren, especially those in lower grades, after school hours are lacking particularly in areas surrounding large cities. Therefore, the systems to accept schoolchildren after school hours should be established in an organized manner by, for example, setting up after-school children's clubs and carrying out a project to secure places to be for all children of the community. In that process, excessive school classrooms should be utilized, assistance should be extended to small-scale after-school children's clubs (10 persons or more and under 20 persons), and such systems should be encouraged to adopt longer opening hours and also to open on Saturdays, Sundays and holidays in response to the five-day school week.

(3) Review of regulations concerning social welfare corporations

A social welfare corporation is a special corporation that is founded under the Social Welfare Law in order to enable public financing, based on the interpretation that Article 89 of the Constitution of Japan prohibits the spending of public funds on organizations engaged in charitable and philanthropic activities that are not publicly managed. A social welfare corporation is subject to various regulations and supervisions, but also enjoys a subsidy for three-quarters of the facility maintenance fee and preferential tax treatment. Also, in order to provide stable and continuous social welfare activities, the founder is prohibited from collecting the donated property from the social welfare corporation, and in the case of dissolution of the corporation, that property shall belong to another social welfare corporation or to the national treasury. Since social welfare corporations have become more diversified in recent years, it is necessary to further promote regulatory reform concerning social welfare corporations from the users' standpoint.

A. Review of utilization of systems concerning social welfare corporations [To be implemented in FY 2001 (Prompt implementation)]

As a result of the deregulation efforts concerning social welfare corporations so far, use of leased land is now recognized in establishing a social welfare facility in urban areas where acquisition of land for the facility is difficult. Additionally, although in a limited scope, a social welfare corporation that is managed based on long-term care benefits is permitted to use the benefits for reimbursing loans relating to establishment/maintenance of the facility. Such already implemented deregulation measures should be further publicized to local public entities.

Furthermore, continued efforts must be made in the future to coordinate among the administrative sections in charge and eliminate inconsistency in administration in order to realize more efficient management of social welfare corporations and expand provision of their services.

B. Review of desirable management styles of social welfare corporations

Not only the current management style, but also various modes of management style should be considered as desirable management styles of social welfare corporations. [Examination to be promptly started to gain the conclusion in FY 2001]

Since there still is a strict restriction on usage of any surplus money of the operating funds of a social welfare facility, the restriction should be considered for review according to the nature of the respective services while taking into account the desirable management styles of social welfare corporations.

At present, the operating funds of a social welfare facility are used for the living expenses of the facility users, wages of the facility workers, and facility establishment/maintenance cost, and they are raised by public funds in principle. However, the corporation is recognized to use the surplus money for saving an allowance reserve within a certain scope. In the case of childcare centers, such recognition has been exceptionally expanded even to the rent for the land or building. Moreover, with regard to the revenue of special nursing homes for the elderly from the long-term care benefits, limitation on its use has been basically abolished due to its nature as remuneration for the services provided.

Nevertheless, use of the surplus money of the operating funds is still largely restricted, so the related notification by the Ministry of Health, Labour and Welfare (1993) should be promptly examined regarding points including the following:

  1. the scope of money subject to be transferred to the central corporate accounting; the upper limit of the personnel expenses, the repair expenses, and the allowance reserve for purchasing equipment;

  2. transfer of funds between social welfare services and public utility services; transfer of operating funds between the multiple facilities and services managed by a single corporation;

  3. in the case where a social welfare corporation establishes, apart from the core facility, an additional facility that is not subject to public subsidy, allowing the corporation to acquire a loan on security of that additional facility.

[Conclusion to be gained in FY 2003]

C. Promotion of information disclosure concerning social welfare corporations via the Internet [To be implemented in FY 2001 (Prompt implementation)]

From the viewpoint of expanding the options for consumers, standards for information disclosure concerning social welfare corporations should be reinforced, such as further diffusing the accounting audit of social welfare corporations by certified public accountants conducted on the same level as that of stock companies. Also, due to their nature of serving the public interest, social welfare corporations should be encouraged to disclose documents including the settlement of balance, business report, and written opinions of the auditor via the Internet.

D. Review of the role of social welfare councils [To be implemented in FY 2001]

The social welfare council of each municipality has played a role as a body implementing community welfare through the participation of social welfare facilities, social workers, and volunteers. Meanwhile, from the times of public-welfare services when long-term care services had yet to be provided sufficiently, efforts have been made to establish service-providing social welfare councils that provide services of their own.

A social welfare council has a committee for fair management consisting of third parties, which engages in activities to protect people's right to community welfare for supporting the service users and deals with complaints to protect the users. The committee has a role to protect the rights of the elderly, etc.

In the amended Social Welfare Law of 2000, it was made clear that the social welfare council of the municipality is expected to play the central role in promoting community welfare. Therefore, social welfare councils should bear the role to make focused efforts to provide the type of services that are difficult to be provided by private service providers or social welfare corporations.

With regard to in-home welfare services, the services should not solely depend on public subsidies, but by taking into account the actual conditions of the services in the area, the council should appropriately provide services so as not to obstruct competition caused by entrance of other service providers.


3. Human Resources (Labor)

[Awareness of the Issues]

Amidst the massive changes to the economy and society, labor market and employment situations have also changed significantly. Accordingly, labor regulations also need to change. Herein lies the focal point of regulatory reforms in the area of human resources (labor).

First of all, peoples working lives are becoming longer along with the structural changes in the national population and the aging of the society. Given the further delayed receipt of pension benefits, people will have to remain fully in the work force at least until their mid-60s. On the other hand, international competition is growing in the ever more globalizing economy, domestic competition is getting fiercer as there are more choices now available to consumers, and the technological structure is also rapidly changing as we shift to a more IT-oriented society. Under these conditions, companies and industries are exposed to ups and downs at an unprecedented pace, and can only guarantee shorter periods of employment.

People have to complete their long working lives by moving from one company that can't guarantee employment to another company that needs human resources and attempts to recruit more employees. In a traditional pyramid-shaped population structure, in particular, the weight of the work force shifts from economically deteriorating sectors to growing sectors, mainly among the young generations, but in the significantly decreasing young population in the future, such a shift will have to be achieved through the inter-business or inter-industry reallocation or transfer of mainly middle-aged and older workers. Now that one company can not guarantee a person's whole working life from entering the workforce to mandatory retirement, the society has to establish a system in which employment is guaranteed in the labor market as a whole.

So far, the frameworks for labor-management relations and labor standards have been premised on a typical work force, meaning regular workers engaged in types of works with fixed time frames under the direction of their employers. Under such conditions, work (employment) conditions have been determined collectively on the assumption that employers and employees take different negotiating positions.

But the highly advanced industries produce more and more white collar workers of highly specialized skills. Consequently, labor conditions have been individually (separately) determined as more businesses introduce performance- or result-oriented pay systems. People's attitudes toward working become diversified, and more people choose atypical work patterns, such as part-time or temporary work, depending on their desired balance between life and work.

Traditional regulations are not necessarily appropriate for these new types of workers. They are rather problematic in that they not only hinder smooth recruitment by companies but also limit the options of those who want to work in various ways. Needless to say, in response to such changes, labor policies have been reformed to widen employment options and allow for various working patterns. But such reforms are not necessarily responding properly to the rapid changes in the economy.

From the above viewpoints, regulations on employment and the labor market should be reformed in response to the structural changes of the economy and society so that they can further guarantee employment through a more market-oriented system and meet diverse needs with respect to working and employment status.

[Direction of Reform]

From the above points of view, the following basic ideas shall be further examined in the area of human resources (labor).

The first is the establishment of a labor market system to enable the smooth movement of human resources. That is, to improve labor market conditions, such as availability of guidance about job transition or ability to search with an integrated network of "help wanted" information, no excessive costs associated with job transition or temporary unemployment, supports for ability development as required and a system to facilitate returning to work. Relaxing age limits in recruitment is also to be pursued.

The second is supplementary to the first, and is to create an environment for more comfortable working and easy recruitment by widening employment options such as fixed-term labor contracts and temporary work. This is also important in responding to the ever more diversified ideas and values about working, and also helps women to enter the work force. Also, social insurance systems should be reexamined so that there is no financial difference among working patterns or any obstacles to women's will to work.

These tasks are to be urgently undertaken in these times of fiercer global competition and the aging of the society and the decreasing birthrate. It is important to implement those tasks requiring no legal revision immediately and those requiring legal amendment at the earliest possible time.

As an issue for the future, the labor market system for the 21st century should be promptly examined. In particular, the establishment of a system to respond to new types of workers who carry out jobs with highly professional skills, and of clear rules for layoff or dismissal.

[Specific Measures]

(1) Deregulation to enable smoother job transition

A. Improvement of skill development programs

In order to give more employment opportunities for workers, it is effective to encourage ability development to increase potential. The educational training benefit system has been under review, specifically on the issue of its mechanism to designate qualified courses, with consideration given to the designation of more advanced educational training courses for workers to be provided at universities and graduate schools, and the provision of more focused courses relevant to specific occupations. With a view to improving the potential of the whole labor market, it is necessary to conduct further study about a desirable system to assist educational training programs, including the scope of qualified workers, with due consideration to actual situations in the operation of the system after its inception.

Also in the future, it is necessary to enhance supports for workers' self-help efforts for ability development, by improving career counseling services and evaluation systems for professional skills, and encouraging the active use of loans.

B. Fundamental deregulation of job placement services
(A) Revision of the Ministerial Ordinance to relax fee-charging regulations on job seekers [To be implemented in FY 2001 (Prompt implementation)]

The prohibition on charging fees to job seekers, a principle set forth in ILO Convention 181 on Private Employment Agencies, which was ratified by Japan, is beneficial to protect workers in one sense, but a strict free-of-charge principle hinders the provision of quality services to job seekers. For service companies to provide a wide range of job placement services that meet the diversified needs of job seekers, the Ministerial Ordinance should be revised early in 2002 so that charging of fees to job seekers can be allowed as much as possible within an acceptable range of exceptions (exceptions are allowed if they are beneficial to job seekers) as set forth in ILO Convention 181 and the Job Security Law (Law No. 141 of 1947). Particularly, in addition to models and entertainers, who are now subject to fees, regulations on fee-charging should be removed for those job seekers who may be the targets of so-called head-hunters, i.e., business executives and professionals who can earn more than certain level of pay.

(B) Review of the Ministerial Standards associated with an upper limit on fees charged to a client company [To be implemented in FY 2000 (Prompt implementation)]

There are views that no positive reason exists for regulating upper limits for worker protection since charging fees to a client company falls under the scope of the business contract between the client company and the service company. Thus, this issue should be reexamined, including the abolishment of current standards for an upper limit on fees charged to a client company, and a measure should be taken in early 2002.

To this end, it is important to define the feasibility of trial-based placement (tentative name) (job placement under which a contract of "no-fixed term employment" is expected under the agreements of the job offerer and job seeker, following fixed-term trial employment), as well as to clarify a method of operation for the system.

(C) Deregulation in free-of-charge job placement services [Advance review]

The Government has just started the study and review process on job placement services, despite a clause requiring review three years after the enforcement of the revised Job Security Law (December 2002). But, there are views that free-of-charge job placement services pose some problems because there is room for discretional administration; in the approval system for such services provided by non-school entities, it is a requirement that job placement services can be provided to the extent deemed necessary and appropriate in view of objectives, operation status and the rules of the service company. Thus, the regulations should be promptly revised with consideration given to the transition from an approval system to a registration system to focus on regulation of acts (ex-post-facto monitoring).

Also, in severe recent employment situation, it is necessary to fully use the abilities of all job placement services, whether national, local or private. As long as free-of-charge job placement services provided by municipalities (local governments) are not for profit, they have traditionally not been prohibited, and certain support such as the provision of job information from public job security offices has been provided. Free-of-charge job placement services provided as required by municipalities should be continuously given further support for smoother operation.

(D) Clear definition of "contingent work" [To be implemented in FY 2001]

Businesses only engaging in the "contingent work" of job placement services, such as soliciting job offers or applications, but not receiving them directly, are not required to obtain approval and report in the same manner as job replacement services. But, there are views that the boundary is ambiguous between the business of dealing directly with job offers and applications, for which approval and reporting is required, and the business of soliciting such offers, for which neither of the above is required. The definition of "contingent work" should be clarified so that job placement services can more smoothly develop job opportunities for "U-turn" job seekers and others, even in local districts with no authorized offices of such nature.

(E) Relaxation of requirement of reference from public job security office

As for employment subsidies, including those for employment development for certain job seekers, the requirement for reference from a public job security office was relaxed and a measure was taken to make employment through private job placement services also eligible for subsidies on the condition of reporting to prefectural labor department heads. With close attention paid to the prevention of fraudulent practices, the objectives and contents of the deregulation should be thoroughly publicized. The objectives of such subsidies should also be reexamined from a cost-benefit standpoint.

As for the part of employment promotion benefits set forth in the Employment Insurance Law (Law No. 116 of 1974) that consist of re-employment allowances and money provided for regular employment, again a reference from a public job security office is a requirement for payment, to avoid misuse. This requirement should be reexamined with possible relaxation in mind, while giving due consideration to the tight situation of employment insurance finance.

(F) Deregulation associated with job placement service representatives [Advance review]

In addition to the study and review of the system of job placement as a whole, the following issues as stated in "the Three-Year Program for Promoting Deregulation" should also be reexamined.

  1. Review of requirements (No. of personnel) in assigning job replacement personnel

    To clarify accountability, this issue should be reexamined while giving consideration to the possible adoption of a one-person-per-office method, and their specific responsibilities.

  2. Procedures in changing personnel on each personnel reshuffle should be simplified.

  3. The training seminar system should be reviewed with respect to objectives and specific contents.

(G) Deregulation in overseas jobs placement [To be implemented in FY 2001]

In relaxing requirements for the application for approval for domestic and overseas job placement services, procedures to gather the applicable laws and regulations of other countries and Japanese translation thereof should be simplified.

C. Deregulation in work force recruitment [Advance review]

Along with the review of the job placement system as a whole, the approval system of commissioned recruitment should be reexamined to search for a better method, with consideration given to the progress of the revised Law in 1999 and the situations in other countries.

In pursuit of the above, due attention should also be given to a fundamental review of regulations on recruitment, as one of the "issues to be dealt with from a medium- and long-term perspective" under the "Three-Year Program for Promoting Deregulation."

D. Deregulation and abolished discrimination in recruitment

The "Guideline" under the revised Employment Measures Law enacted in September 2001 requires recruiting companies to explicitly state reasons for age limits, which is a step forward in this area. For now, the guidance on the guideline should be thoroughly publicized and implemented, and at the same time, due attention should be paid to the relevancy of the exemption clause that approves age limits under the Guideline when appropriate. In the mid- and long term, consideration should be given to the possibility of legal obligation of notice for reasons for age limits, or of complete prohibition of age limits. The Government should take the initiative by abolishing age limits for civil service positions.

The Enforcement Ordinance of the Workers Dispatching Law (Law No.88 of 1985) stipulates that worker dispatching companies should report the "age and gender of a dispatched workers" to client companies on the dispatch of workers. But, possible revision of the Ordinance should be explored with a view to requiring reporting only when it is deemed necessary for legal compliance.

In recruitment, it is also necessary to consider the legal prohibition of age discrimination on the grounds of ethnicity, creed, and social status. Article 3 of the Labor Standards Law (Law No. 49 of 1947) prohibits any discrimination of work conditions on the grounds of nationality, creed, or social status. But it is commonly understood that recruitment is not included in such "work conditions." However, the inclusion of recruitment as a subject of regulations has gradually come to be accepted, as reflected in the enhancement of the Equal Employment Opportunity Law (Law No. 113 of 1972) and the revision of the "Employment Measures Law" (Law No. 132 of 1966). In the rapidly globalizing economy, there has been a growing movement to recruit people regardless of employee composition, ethnicity or religious background. The "desired system for human right relief measures" by the Civil Liberties Protection Promotion Council also refers to the improvement of the human right relief system in relation to employment discrimination on the basis of ethnicity, creed or social status. In light of these social changes, discussions should be initiated with a view to further limiting or prohibiting discrimination in recruitment, including the review of relevant laws and regulations.

(2) Deregulation to enable the diversification of working patterns

A. Increasing temporary workers [Advance review]

As for the worker dispatching system, the Worker Dispatching Law, regardless of the clause requiring review three years after the enforcement (December 2002), should be promptly revised on the conclusions of the review already started toward that end, with a view to broadening work options and thus increasing employment opportunities, and with due consideration given to a desirable approval system for worker dispatching services, the expansion of the temporary work period, and the removal of the prohibition of temporary work in the "manufacturing" sector.

Since temporary workers should also be given a free choice of occupations in the same manner as other types of workers, and it is thus problematic that the types of occupations open to them and the work period are limited, views that such limits should be abolished in principle need due attention.

In examining the legal amendment, the opinions of temporary workers themselves should be taken into account as specified in the "Three-Year Program for Promoting Deregulation."

(a) Expansion of temporary work period [Advance review]

In light of opinions that there is no reasonability in the one-year limitation placed on the temporary work period to prevent increased replacement of regular workers, this limit should be reexamined and possibly abolished. In doing so, consideration should be given to views that the temporary work period limitation should be treated in the same way as for the 26 original allowable job categories.

The recently enacted "the Law concerning tentative special measures under the Employment Insurance Law and others, in order to promote smooth re-employment and create job opportunities for middle- and older workers, in response to the rapidly changing economy and society" is limited in terms of its content, only providing for the expansion of the temporary work period for workers aged 45 or older, but given the severe on-going employment situation, its strict enforcement should be provided.

(b) Expansion of allowable job categories [Advance review]

Job categories open to temporary workers should be further expanded, but the following points, in particular, should be considered.

1) Manufacturing [Advance review]

The Supplementary Provision of the current Workers Dispatching Law prohibits dispatching workers to the "manufacturing" sector for the time being. In light of the corresponding situations in other countries, the Law should be reviewed, including the possible removal of the clause in question.

2) Expansion of allowable job categories (now 26 categories) that don't require legal amendment [To be implemented in FY 2001 (Prompt conclusion)]

Given the severe on-going employment situation, those that don't require legal amendment should be reviewed for conclusion within 2001 as an urgent measure toward the legal amendment, with a view to the expansion of allowable job categories (now 26 original categories) for which the three-year temporary work period is currently approved.

Review should be made while giving due consideration to the fact that the "Three-Year Program for Promoting Deregulation" requires a study and review process on the possible "approval of the about three-year period to sales and other highly specialized jobs, by expanding the 26 original job categories.

(c) Review of worker dispatching on a trial basis for future employment [Advance review]

As for the prohibition of client companies specifying temporary workers, which hinders the smooth operation of trial-based placement, the period allowable to confirm the intention of a job offer and application and clarify conditions of recruitment was expanded from one week to two weeks to the expiration of the temporary work period, in September 2001.

However, there are certain limitations when regulating the trial-based placement in the same clause as for regular dispatch services. Based on fact finding with respect to real situations, and with a view to removing any factor that hinders the smooth operation of trial-based placement, the review of the current system, including the relevant legal systems themselves, should be considered along with the review of the Workers Dispatching Law.

(d) Others
1) Review of assignment of temporary staff service representatives [Advance review]

A preferable mechanism for assigning temporary staff service representatives should be explored along with the review of the worker dispatching system as a whole.

2) Simplification of procedures for dispatching workers [Advance review]

Simplification of procedures for dispatching workers should be examined along with the review of the worker dispatching system as a whole.

3) Notification in electronic form from client companies to dispatching companies

Notification from client companies to service companies should be reviewed to allow for notification in electronic form, with consideration given to workers protection and along with the review of the worker dispatching system as a whole.

4) Others [Advance review]

When the main task of the work for which one is dispatched is any of the original allowable job categories and/or when the working days are limited, such as only the beginning of every month or only Saturdays and Sundays, those jobs should be treated in the same manner as for such job categories. That possibility should be examined along with the review of the worker dispatching system as a whole.

B. Expansion of fixed-term work contracts

The revised Labor Standards Law approves a maximum of three years for fixed-term work contracts, but certain conditions are placed such as those that limit these contracts to people with a high level of specialized knowledge, skills or experience, except in the case of contracts for older workers aged 60 or over.

The study and review process has just started toward the earliest possible legal amendment, with a view to further expanding the maximum length of contracts from 3 years to 5 years, as well as increasing the allowable job categories. Talks should be promptly carried out to widen work options and increase job opportunities. [Prompt review]

As a tentative measure, review should be made with regard to the permissible professional jobs set forth in the Ministerial Notice, with a view to further increasing the allowable categories. [To be implemented in FY 2001 (Prompt implementation)]

C. Expansion of discretional work system

With a view to improving the environment to assist workers in fulfilling their creative abilities in response to the diversified working values, it is necessary to expand the discretional work system in which people can work in a flexible way at their own discretion.

As for the discretional work system for professional jobs, eleven jobs, including research, SE, production of broadcast programs and copy writing, are covered for now. The range of applicable jobs should be increased within 2001. [To be implemented in FY 2001 (Prompt implementation)]

As for the discretional work system for planning jobs, a study and review process has just started, despite the clause requiring review three years after the enforcement of the revised Labor Standards Law associated with this system (April 2003). Discussion should be promptly carried out toward the revision of relevant laws and regulations after clarifying where the problems exist in the current system based on the fact-finding with respect to actual situations. [Advance review]

Since labor-management representatives in specific fields are the most familiar with the actual situations in those fields, it is appropriate to review the system with a view to entrusting the decision on applicable job categories to their self-governing ability.

(3) Reform towards a system most appropriate for new types of workers

A. Revision of the Labor Standards Law [Prompt examination]

For the half century or so since the end of World War II, the Labor Standards Law, through several revisions, has been playing a major role in stabilizing workers' lives, as well as maintaining and improving their living standards. But, amidst the structural changes in the economy and society as mentioned at the beginning of this section, employment has also been facing significant changes. In particular, it is inappropriate to uniformly apply regulations premised on typical job workers to new types of workers such as white collar workers with a high level of professional skills.

With consideration given to such structural changes, the Labor Standards Law should be reviewed so that it becomes a basic law that sets forth employment relations in the new century.

The current discretional work system applies a de facto working hour system and does not approve any exception from working hour regulations. But its essence lies in the principle that "no specific instructions shall be given to workers that become engaged in designated jobs, in determining the procedures of performing jobs and allocating time." Given that essence, it is natural to approve the exemption of white collar workers from working hour regulations, as in the case of managerial jobs. Thus, in the mid- and long term, it is necessary to examine the adoption of an exemption clause for those job categories with a high level of discretion, with reference to the white collar exemption in the United States. The current exemption of managerial jobs should also be concurrently reviewed to search for a better method, including the suitability of exemption of night work from the regulations.

Dismissal is only specified in terms of advanced notice under the Labor Standards Law, and dismissal as a whole, for now, is regulated under case laws including the legal doctrine governing abusive exercise of the right to dismiss (regular workers). But, in order to improve the predictability of dismissal validity for both labor and management sides, it is necessary to conduct study to make legal clarification of the criteria and rules of dismissal. In clarifying such rules, it seems appropriate to pay attention to possible effects on the labor market.

B. Reform of social insurance systems [Prompt examination]

It is necessary to promptly examine the reform of social insurance systems in response to the diversified working (employment) patterns. In addition to the expanded application of employment insurance to part-time and temporary workers starting in April 2001, the addition of pension and medical insurance systems should be promptly examined. The establishment of a health insurance union for temporary workers should be approved with consideration given to their work situations and the clarification of the application criteria should also be promptly discussed. The Employment Insurance system is in principle a system covering all employees in the private sector, and private school teachers whose participation rate remains low should be promptly encouraged to join the system.

The system should be neutralized so that it doesn't give disadvantage to any working pattern. For example, it is necessary to further examine the expansion of the portability of corporate pensions at the time of bankruptcy or job transition (switch) as well as a retirement allowance system and its framework.

The spouse allowance system, which seems to hinder the women's intention to work, should be reexamined for public servants as well, from the viewpoint of having a gender equal society, and to keep in step with the private sector, which has worked on the abolition of the allowance and review of the system.


4. Education

[Awareness of the Issues]

With the increasing globalization of the society, economy and culture, and the growing global competition, it is essential to provide quality education at all levels from compulsory education to higher education, and to develop outstanding human resources that can meet the changing needs in the society. For the continuous growth of the nation, it is urgent for universities and graduate schools to further conduct advanced and creative research and to develop this into new industries and innovations.

Qualitative improvement of the Japanese educational system as a whole could be largely achieved from healthy competition among institutions and faculties in university education and the diversification of elementary and lower secondary schools to ensure a wide range of choices and involvement for those who are receiving education. It is necessary to actively motivate students and pupils to learn under such conditions.

[Direction of Reform]

From the above point of view, it is necessary to revitalize education and research activities and improve their quality through the development of further competitive environments, such as by relaxing advance regulations related to the establishment of universities and faculties and improving the ex-post-facto monitoring system. Furthermore, in elementary and lower secondary education, the main issue is to improve the transparency of school operation by introducing an evaluation system and promoting information disclosure in order to increase the range of educational opportunities available for pupils and students to select in accordance with their respective abilities and aptitudes, and at the same time, to improve the system to provide quality education by diversifying educational environments, such as through the introduction of new types of public schools and the promotion of private school establishments, to ensure that people are provided with more choices and chances to get involved in their operation.

We, as the Council for Regulatory Reform, wish to propose to the Prime Minister the following specific measures as immediate actions.

[Specific Measures]

(1) Development of free competitive environments for higher-education

In order to revitalize university education, institutions and faculty members should compete with each other to provide high quality education services, and institutions themselves have to improve their initiative and autonomy in operation on their own judgment and responsibility. From this point of view, it is preferable that faculties and departments, which are key elements of higher education services provided by universities, are flexibly arranged by their own responsible decisions. However, those who want to establish universities, faculties and departments, or change their fixed capacity (hereinafter collectively referred to as "establishment of universities") are required to meet the university establishment standards set by the Ministry of Education, Culture, Sports, Science and Technology (hereinafter referred to as MEXT) (Ministerial Ordinance of Education, No. 28 of 1956) and ask for advice and recommendations from the Council for University Chartering and School Juridical Person. This requirement somewhat hinders the flexible arrangement of institutional organization on the responsible and autonomous judgment of each university.

Universities also have to make constant efforts to fulfill their responsibilities for providing higher education services that satisfy the needs of students and the society, but there are concerns that a strict preliminary examination and an ex-post-facto monitoring system that doesn't function properly might have led to a lack of sense of responsibility about their educational services and deteriorated quality. To deal with these concerns, it is necessary to further relax regulations on the establishment of universities, to create more competitive environments to enable the provision of a higher level of education and research activities on their own decisions and responsibility, and at the same time, improve the monitoring system, such as by introducing a regular accreditation system by third-parties.

Further relaxed regulations on the establishment of universities could create various higher education services, which means that the general public as receivers of such services will be required to be more conscious of their choices on their own judgment and responsibility than ever before. In other words, they are advised to raise their self-awareness to choose institutions providing quality services and take responsibility for their own choices.

A. Minimization of common rules in regulating the establishment of universities and faculties [To be implemented in FY 2002 (Examination and conclusion)]

In approving the establishment of universities and faculties, and the change in their fixed capacities, the MEXT should clarify objective standards minimally required to ensure the quality of institutions, such as the ratio of students to instructors and the ratio of students to school building area, and establish various forms of standards set forth at multiple levels, such as the university establishment standards and the examination standards by the Council for University Chartering and School Juridical, to make them a more defined list on a legal and regulatory level. To that end, the necessity of each standard should be fully reviewed, and minimum requirements should be strictly selected, such as by removing unnecessary standards or facilities and faculty organizations.

Issues to be examined and relevant procedures at the Council for University Chartering and School Juridical Person should be reduced and simplified through the strict screening of standards.

Furthermore, establishment or closure of departments that are positioned under faculties should be accented solely through reporting.

When certain standards are not satisfied after the establishment, the MEXT has to be able to take corrective measures and order closure when no improvement has been made.

The establishment of universities and faculties requires the satisfaction of the qualitative standards in respect to proper educational curriculum and faculty organization, as well as to the quantitative standards such as the ratio of students to instructors, and the ratio of students to school building area. In essence, these issues should be dealt with on the sole decision and responsibility of each university, but it is considered necessary to evaluate whether each university meets the minimum requirements, as there is a gap between students and universities in terms of accessibility to information.

In determining whether each university and faculty meets such requirements, not only routine confirmation but also professional judgment is necessary. At present, that professional judgment is only made on the advice and recommendations of the Council for University Chartering and School Juridical Person. Also, as for approval standards for the establishment of universities and faculties, multiple layers of provisions in various forms exist, such as the university establishment standards, the examination standards of the Council of University Chartering and the "Policy in dealing with the examination of the university chartering after FY 2000" (Determined by a chairman of the university chartering sub-committee under the said Council), which seems to partially contribute to the rather complicated standards. Thus, it is necessary to establish those standards at a legal and regulatory level to obtain a clearly defined list.

In pursuit of the above, it is important to fully review the necessity of each standard, and make drastic changes if appropriate, such as by removing unnecessary standards, to obtain a strictly selected minimum requirements. Issues to be examined and procedures at the Council should also be reduced and simplified through the above strict screening.

In order to ensure the on-going maintenance of the minimum requirement level of education and research activities, a system should be established to take administrative measures to improve a situation when the above standards are not met after their establishment.

(A) Review of policies restrictive policies in the approval of the establishment of universities and faculties [To be implemented in FY 2002]

A review should be made of the policy that "the Government shall take a restrictive approach to the establishment of universities and faculties and changes in their fixed capacity" as specified in the "Policy in dealing with the examination of university chartering after FY 2000."

At present, many rules concerning the approval of the establishment are determined on the decision made by a chairman of the university chartering sub-committee under the Council, but such a system tends to make accountability somewhat ambiguous. Such rules should be set forth by the Ministerial Ordinance of the MEXT when deemed necessary after the thorough examination of its necessity. In particular, it is problematic that the policy of restrictive approach toward the university establishment stated in the above Policy might have regulated new entries.

(B) Relaxing regulations on the ratio of students to school building area and the ratio of holding area, in approving the establishment of universities [To be implemented in FY 2002]

It is necessary to promptly examine the relaxation of regulations on the above ratios, and to further promote the disclosure of financial information.

As for the substantial regulations on the establishment, it is necessary to immediately examine the relaxation of the standard that school premises should be three times as large as the school building area (the ratio of school premise area), since the important factor to university education is the area of school buildings, not of school premises, now that land can be used in more advanced way.

The above standard was established to ensure the stable and constant operation of institutions, but on the other hand, it virtually hinders the establishment of universities in city areas.

Furthermore, the disclosure of financial information necessary to ensure the continuity in providing education should be further encouraged.

(C) Fundamental review of the Law of Regulating Industry Zones (Factories) [To be implemented in FY 2001 (Examination and conclusion)] (See "6. Urban Renaissance")
(D) Abolishment of the Area Regulation for the Establishment of Universities [To be implemented in FY 2002]

The restrictive stance regarding authorization for the establishment of universities in areas where the establishment of industrial and academic facilities is regulated and areas where such establishment is partially regulated, as set forth in the Policy for the Examination on the Establishment of Universities from FY 2000 Onward, should be abolished.

The Policy for the Examination on the Establishment of Universities from FY 2000 Onward sets forth that the authorization for establishing universities shall be more restrained for those areas where the establishment of industrial and academic facilities is regulated and areas where such establishment is partially regulated compared to other areas.

Today, universities are increasingly expected to play pluralistic roles, such as cooperating among universities, industries, and the government, offering vocational training for adults, and providing opportunities for lifelong learning toward further innovation. Under such a situation, it is highly problematic that the regulation should impede the provision of higher education services in city centers where the demand is particularly strong. Also in light of increasing educational programs at universities, graduate schools, and higher vocational schools to help adults upgrade their skills, the improvement and expansion of the educational and research environment through efficient use of land in city centers would become more important in the future. Moreover, the improvement and increase of advanced higher educational institutions in city centers are also indispensable for enhancing the appeal of the urban environment.

B. Introduction of a continuous accreditation system by third-party organizations [To be implemented in FY 2002 (Examination and conclusion)]

With a view to maintaining and improving the level of university education and research activities, a continuous accreditation system should be introduced by which all authorized universities are required to take accreditation by third-party organizations and report the results regularly. When any violation of laws and regulations is exposed in the evaluation results, the MEXT should be able to take corrective measures.

The continuous accreditation system by a third-party organization is an evaluation and approval mechanism to ensure quality education and research activities at universities, in which universities are to acquire accreditation from a specialized organization on whether they satisfy requirements for universities, once every 5 or 10 years.

To establish such a system for universities, it is considered necessary to introduce frameworks as follows:

Through the above mechanism, the ex-post-facto monitoring system for universities can be improved, and an environment can be developed where students and the general public can have easy access to information about educational services provided by universities, consequently producing a healthy ground for competition among universities.

Since the accreditation of special fields such as engineering and medical education, or by theme such as the development of highly professional workers and correspondence courses, is also considered to play an important role in improving the international versatility and commonality of Japanese university education and strengthening its global competitiveness, this should be promoted and supported.

C. Development of safety nets for students [To be implemented in FY 2003]

Proper safety nets should be arranged to ensure uninterrupted learning opportunities for students when universities they attend are to be closed.

As private schools reportedly face severe management situations, universities have been making various efforts to survive. As the deregulation of the university establishment standards as mentioned above progresses, some universities may not be able to keep going in the future.

In such cases, proper measures should be devised to ensure uninterrupted learning opportunities for students even if they choose their respective universities under their own responsibilities.

D. Others

The following issues suggested in the interim report should be continuously worked upon. (Issues (A), (C) and (D) are determined as those to be dealt with in the Advanced Reform Program)

(A) Development of the research environment in universities [To be implemented in FY 2002 (Examination and conclusion)]

It is necessary to further increase various competitive research grants to enhance research activities at universities. To that end, a competitive ground should be further developed, for example, by applying competition-based recruitment of researchers who can command a great amount of research funds. At the same time, specific measures should also be devised to give full support to outstanding researchers and doctoral level students with competitive research grants.

(B) Improvement of competitive environment in dealing with contributions and funded research [To be implemented in FY 2001 (On-going examination)]

In examining the corporatization of national universities, due consideration should be given to the competitive treatment of national, public and private universities in dealing with contributions and funded research.

(C) Better treatment for limited term instructors [To be implemented in FY 2001]

Consideration should be given and conclusion made about a better treatment depending on the abilities and achievements of limited term instructors, including guest instructors, by taking preferential measures under the Salary Law.

(D) Promotion of revitalization in university organizations [To be implemented in FY 2001]

From the viewpoint of the effective university operation, measures to revitalize university organizations should be promptly discussed and devised, such as the outsourcing of clerical works at the university's discretion.

(2) Better career development through higher-education institutions

A. Introduction of a double major system at faculties [To be implemented in FY 2002 (On-going promotion)]

In addition to the introduction of a double major system in which students can take more than one major at universities, various supportive measures by universities should be explored to encourage the introduction of such a system.

At present, it is a general practice for students to take one major at their respective universities. Universities could allow students to take two majors depending on their interests, not necessarily making them stick to only one major, when they select their majors and proceed with their learning. Accordingly, curriculum development should be reexamined for this purpose.

B. Establishment of a part-time student system [To be implemented in FY 2001 (On-going promotion)]

Universities should accept part-time students as regular students so that working persons can get degrees while learning over a certain long period, and various supportive measures for universities' efforts to that end should be explored to facilitate the introduction of such a system.

Japan doesn't have a well-established part-time student system in which people work towards degrees through a rather long-term learning process, and it is not a general practice that working people continue their studies at universities and graduate schools on a continuous basis. Under the current system, the concept of part-time students is understood as a type of course work by which regular students take courses for a certain long period and accumulate credits to get degrees. But, in the future, working people as part-time students should be accepted as regular students at universities so that they can earn degrees through part-time learning.

(3) Review of public support to higher-education

Higher-education institutions in Japan are to fulfill their missions of promoting quality education and research activities and developing outstanding human resources. In reviewing public support to education in general, it is considered necessary to enhance public support to higher-education.

That improved public support should not be provided only because the beneficiaries are national universities, but through the increases in competitive research grants, with which higher-education institutions can mutually develop by working together in competitive environments, with all national, public and private universities involved. That means it is necessary to develop further competitive environments among universities and distribute resources (funds) to excellent education and research activities in a more focused and effective way.

A. Increases in competitive research grants and strict competition-based distribution of grants to national universities [To be implemented in FY 2002]

Of the budget for national universities, expenditures for core educational and research institutions should be further reexamined by each university with respect to a proper distribution mechanism, and further efforts should be made to create competitive environments with consideration given to the ensured continuity of basic education and research activities.

In increasing competitive research grants, so called core expenditures should be given due consideration in terms of usage, from the viewpoint of their expected contribution to the creation of competitive environments.

Although the current expenditures for core education and research institutions for national universities could be internally distributed in an effective and flexible manner on each university's judgment, the reality is that they are distributed rather rigidly, being restrained by traditional practice.

In distributing the expenditures within each university, a method should be further devised to make it beneficial to the creation of an internal competitive environment, with due consideration given to the continuity of basic education and research activities.

B. Introduction of a faculty member evaluation system at universities [To be implemented in FY 2003]

Each university should conduct evaluation of faculty members properly, specifically with respect to the goal setting of each faculty member, the establishment of a system to evaluate the goals set, the establishment of achievement-based evaluation criteria and the examination method, and a university management reform to conduct evaluation. To this end, it is conceivable to include this faculty member evaluation as one of evaluation items in the regular accreditation by a third-party as described in (1) B above.

Systematized evaluation of faculty members has been conducted only by faculty councils at the time of recruitment and promotion or the Council of University Chartering and School Juridical at the time of establishment of new universities or faculties. As university functions expand in both quantitative and qualitative terms and their level of excellence becomes of more importance to individuals and the society, more people call for proof of whether each faculty member fulfills his/her own responsibility. And more than anything else, to revitalize universities, it is essential that each university evaluates the performance of their faculty members in a proper and systematic manner.

Such evaluation should take into account not only their educational or research activities, but also their overall performance in all relevant activities such as university management and social activities. It is also important to evaluate them while relating the missions and roles of each university with the roles and personal development goal of each member within such larger frameworks. In other words, an evaluation method based on a single externally set criterion is difficult to apply in any aspect, given the high level of specialty and various duties of members, the costs required for the evaluation, and the limited validity of indexes. Furthermore, proper evaluation of any aspect should be conducted on evidence, and the treatment system should also properly reflect the evaluation results.

In establishing this evaluation for faculty members, it is necessary to clarify the missions of each organization (university, faculty and department) as a basis for such evaluation and create a structure (framework) to that end. Even within one university, it is natural that goals are different for departments of basic studies and of professional studies such as at business schools. It is necessary for each university to arrange a firmly-established evaluation system with consideration given to such diversity.

C. Determination of directions in corporatizing national universities [To be implemented in FY 2002]

In order to corporatize national universities at the earliest possible time, overall directions of the national university reform should be determined within FY 2001, including the selection of a non-government employee model, and the introduction of private-sector management practices (principles).

The significance of corporatizing national universities lies in the creation of an environment for Japanese universities to conduct world-class education and research activities, by introducing the principles of competition into a national university system that has always been protected by multi-layered regulations, and establishing autonomous and strategic governance at each university.

The interim report published in September 2001, which summarized the discussion results at the study and review committee of the MEXT, has not provided definite conclusion on some issues such as whether faculty members should be treated as government employees or not. For example, the "life line" for universities and research institutions are their human resources, but in national universities it is difficult to recruit faculty members flexibly and give them fair treatment based on their abilities and achievements since they are civil servants. It is also pointed out that certain institutional restraints exist about double engagement at universities and enterprises or the starting-up of venture businesses.

Independent administrative institutions are supposed to be free of the control of the National Personnel Authority with respect to payment and working conditions, regardless of whether the government employee model or non-government employee model is applied, and thus universities with such status have more freedom than traditional national universities. But universities of the government employee model are still restrained to some extent in terms of personnel management. Through further consideration with all of the above in mind, such national university corporations (tentative name) should be designed to allow them to determine autonomously on payment, fixed capacity, dual engagement or job transition, leave, and recruitment procedures, to retain (secure) human resources as their most important asset.

In addition of this member status issue, there are many other issues requiring further clarification toward the corporatization, such as administrative units of national university corporations (tentative name) and specific schemes in introducing private-sector management practices.

To this end, the study and review committee should clarify all these issues and determine overall directions of the reform by the end of FY 2001 to facilitate the corporatization of national universities at the earliest possible time.

(4) Promotion of practical study toward the improvement of the legal system to accept community schools

In introducing "community schools" (tentative name) as a new type of public school, the Government should examine the expansion of school discretion over operations, for example, in the establishment of a "community school council (tentative name)" with community members and parents concerned, teacher recruitment, budgeting, and other administrative aspects such as curriculum development, material selection and class arrangement, in order to improve the legal system in which opinions from parents and community members are properly reflected to ensure the uniqueness of individual schools. [To be implemented in FY 2003]

In conducting a practical study at model schools, certain requirements should be satisfied, such as the introduction of the open application system for principals, proper zoning of school districts, and respect for a principal's selection of teachers, respect for the principal's opinion in curriculum development, material selection, and class arrangement. [To be implemented in FY 2002]

There are views that the quality of "educational services" provided at public schools tend to be nationally uniform and cannot meet the needs of the local community and individual schools, and that school autonomy and responsibility are also easily neglected, despite the more than 10 trillion yen of public funds provided every year to the public school system for primary and secondary education. In light of such views, several "reforms" have been gradually carried out, such as the creation of schools more open to local communities, the appointment of principals from the private sector, and more flexible zoning for school choice, but there are concerns that the pace of these "reforms" is too slow, due partly to the difficulty in measuring the results in an objective manner.

One possible approach to flexibly respond to local characteristics and needs to promote further distinctive educational activities is the introduction of "community schools," a new type of public school that would have several features, such as a better association with the local community, the school's enhanced discretion and strict accountability for educational results. This is expected to produce more effective outcomes rather than placing all public schools uniformly in competitive environments.

In introducing "community schools (tentative name)," school discretion should be expanded, such as over the establishment of a "community school council (tentative name)" that has participation form the community, teacher recruitment, budgeting, and other administrative aspects such as curriculum development, material selection and class composition, and discussion should be conducted with a view to developing a legal system in which the opinions of parents and community members are properly reflected and the distinctiveness of each school can be maintained. The introduction of this new type of school could diversify selections for parents and other local stakeholders, and realize co-existence with conventional public schools. Under this healthy tension, schools are expected to work hard together to raise the quality of public schools as a whole in all school districts.

In conducting a practical study at model schools, efforts should be made to satisfy certain requirements including open application for principals, proper zoning of school districts, respect for a principal's selection in teacher recruitment, and respect for a principal's opinion about curriculum development, material selection, and class composition.

(5) Clarification of establishment standards of elementary and lower secondary schools and relaxation of requirements to promote the new entry of private schools

Amidst the economic globalization, rapid technological progress, and maturing of the society, a whole area of school education needs the promotion of distinctive education and research activities that properly respond to the more diversified and sophisticated needs of the society and the general public. Under such a circumstance, the role of private schools that are active in providing highly original education and research activities built on their respective spirit of foundation has come to be considered ever more important.

However, the number of private elementary and lower secondary schools, elementary schools in particular, is very low in comparison to that of higher-education. The ratios of private schools are 74.1% for universities, 24.1% for upper secondary schools, while they are just 6.1% for lower secondary schools and as little as 0.7% for elementary schools (As of May 1, 2001).

The biggest reason for this slow growth in private elementary and lower secondary schools may be that this stage of education is compulsory education provided to the public free-of-charge. On the other hand, trust in public schools is deteriorating as classroom disruption is recognized even among children in lower grades of elementary schools.

Under these circumstances, the expectations from the general public, the receivers of educational services, for private schools that can provide unique educational services, has been further growing particularly in metropolitan areas, and competition for some private schools has become quite intense.

Given these realities, it is expected that the promotion of the establishment of private schools that provide unique and varied educational services could provide a good opportunity to facilitate the creation of good public schools (and existing private schools) by increasing the opportunities to provide distinctive educational services to the general public and stimulating competition among schools in districts.

In light of these situations, and with a view to promoting the new entry of private schools, it may be necessary to allocate more subsidies (favorably) to those private schools that provide excellent educational services satisfying the needs of children and their parents, while reexamining the allocation of public funds.

A. Clarification of the establishment standards of elementary and lower secondary schools, and relaxation and clarification of examination standards in approving the establishment of school juridical persons and private schools [To be implemented in FY 2001]

In clarifying the establishment standards of elementary and lower secondary schools as one of the issues to be examined and concluded by the end of FY 2001 in the "Three-Year Program for Promoting Deregulation," proper requirements should be established with a view to promoting the establishment of private elementary and lower secondary schools. Also, local governments should be encouraged to properly relax the requirements relating to prefectural standards in approving the establishment of private elementary and lower secondary schools and school juridical persons.

At present, a permit from a prefectural governor is required in establishing private elementary, lower and upper secondary schools.

However, as for the establishment standards to be set forth by the national government under the School Education Law (Law No. 26 of 1947), upper secondary schools have further detailed standards under the establishment standards of upper secondary schools (Ministerial Ordinance of Education, No. 1 of 1947), while elementary and lower secondary schools have only the Execution Regulations of the School Education Law (Ministerial Ordinance of Education, No. 11 of 1947), which serves only as a guideline, and no detailed standards have been set down. Thus, the legal grounds that substantially serve as establishment standards of elementary and lower secondary schools include 1) the Execution Regulations of the School Education Law (Stipulating the standards of school facilities and teachers), and 2) the Law Concerning State Subsidies for Facilities in Compulsory Education Schools (Law No. 81 of 1958) (Stipulating areas as a basis for the calculation of work costs and others). Prefectures approve the establishment of private schools under prefectural "examination standards."

However, the prefectural examination standards don't approve liabilities or borrowing of facilities and equipment in principle, and some prefectures don't even approve the dual usage of school premises when lower and upper secondary schools are built together. These prefecture specific standards, which respond to their local realities, coupled with the fact that primary and lower secondary education is compulsory and provided to the people free of charge, hinder the promotion of private school establishment.

In this reform to clarify the standards for the establishment of elementary and lower secondary schools, the government should establish proper requirements with consideration given to the promotion of the establishment of private elementary and lower secondary schools, such as non-excessive area standards for class rooms and school grounds, and the approval of the co-use of school facilities for other purposes such as combined building. The form of school ground ownership should not be fixed, and only a certain area of space should be required.

It is thought that the examination standards set forth by each prefecture can be properly relaxed through the clarification of the national standards for the establishment of elementary and lower secondary schools.

For information disclosure of school operation status to receivers of educational services (children and their parents), it is necessary to release financial statements of school juridical persons as well, and to encourage prefectures to properly relax the examination standards for approving the establishment of school juridical persons to facilitate the new entry of private schools.

B. Review of functions of Councils of Private Schools [To be implemented in FY 2002]

To accelerate the reform to establish more open Councils of Private Schools, the desirable functions of the Council, including its members and operation, should be examined, and a list of members and proceeding overview should be actively published on the Web site of each prefecture.

Councils of Private Schools, advisory organizations to prefectural governors, are to discuss the establishment of private schools excluding universities, private higher vocational schools and private schools in the "miscellaneous" category, and of the juridical persons that establish such private schools, and give recommendations to prefectural governors. They also have the role of suggesting important issues relating to the said schools to prefectural governors.

Three quarters of the Council members come from existing private schools from the viewpoint of the respect for school autonomy. However, there are concerns that Councils might rather restrict the development of a healthy competition in establishing a new private school, and hinder the proper reflection of opinions from actual service receivers and community members.

C. Increase opportunities for international school graduates to go on to higher educational institutes in Japan [To be implemented in FY 2002]

International school graduates who have acquired a certain level of education should be provided with more opportunities to go on to universities or upper secondary schools in Japan if they want to do so.

In recent years, along with the growing overseas investment in Japan, more and more foreign people stay in Japan for mid- and long-term durations, and consequently, many of these expatriates' children attend international schools located in Japan.

From a viewpoint of educational globalization, and with due consideration given to consistency with the Japanese educational system, international school graduates who have acquired a certain level of education should be provided with more opportunities to go on to Japanese universities or upper secondary schools if they want to do so.

This is thus expected to encourage the increased establishment of international schools in Japan.

(6) Promotion of evaluation and choice in primary and lower secondary education

In response to the diversified social needs for school education, one important approach to create a more diversified and better public school system than the current one that has been criticized as uniform (cookie-cutter) may be to create an environment to allow children and their parents to compare characteristics among public schools and choose the school that will be attended accordingly.

School districts of public elementary and lower secondary schools are traditionally determined for each school, but in recent years, some school districts are set forth more flexibly to allow parents to choose the schools their children will attend.

Although educational choices are increasing, there is a concern that necessary information is not provided properly to help children and parents make informed choices. Needless to say, sufficient information about the educational goals and uniqueness of each school should be provided to those who choose schools. In that sense, the current situation is not preferable, because schools tend to be selected based on the reputation or rumors passed around among parents, or just the newness of school facilities, due partly to the lack of proper information available to them.

A. Promotion of the introduction of a school selection system
(A) Promotion of designate schools based on the parents and children's choice [To be implemented in FY 2002]

With a view to properly promoting a school selection system, it should be made clear that such a system can be introduced at the discretion of each municipal board of education. Furthermore, in municipalities implementing such a system, relevant laws and regulations should be reexamined to clarify the procedures for presenting a list of applicable schools to parents and children to allow them to choose the school that will be attended.

A very limited number of municipalities have introduced the school selection system in which parents and children can designate public elementary and lower secondary schools of their choice, but this has been increasing recently.

However, there are some views that Article 5 of the Execution Order of the School Education Law (Cabinet Order No. 340 of 1953) only stipulates that the municipal boards of education in the districts where children live shall designate the elementary or lower secondary school they would attend," and no provisions exist about the school selection system and there is thus no defined legal grounds for the system.

Needless to say, some parents and children may not express their specific preference about schools, and certain schools might be flooded with applications. Thus, the municipal boards of education implementing the system may be required to designate the school that will be attended or adjust applications when necessary, to facilitate proper school operation under the school choice system. Policies and methods of adjustment to be required as a result of approaches in presenting choices and actual applications should be developed with consideration given to situations in municipalities, but the relevant information should be clearly disclosed.

(B) Clarification of required conditions to accept designated school change [To be implemented in FY 2002]

Even in the municipalities that do not introduce the school selection system, requirements and procedures should be clarified in case parents and children want to change the designated school. To that end, the relevant laws and regulations should be reexamined.

Article 8 of the Execution Order of the School Education Law stipulates the procedures for changing the designated school including for the implementing municipalities. Since the provision uses vague wording such as "when deemed appropriate," municipalities all have different judgments. There are concerns that even in one single municipality some cases are approved and others are not. This indicates that the procedures to follow are not clearly defined.

Given these situations, and as the number of municipalities introducing the system is expected to increase, the relevant laws and regulations should be reexamined, with a focus on the improvement of necessary procedures.

B. Increased involvement of parents and community members in school operation

As parents and local communities increase their interest in involvement in the operation of schools, educational administration has also been reformed to create "open schools" to ensure trust from parents and community members. However, some problems are pointed out about the public school system, and specifically that there is an information gap between service providers (schools, boards of education, principals, teachers and others) and service receivers (children, parents, community members) due to the fact that services are provided by public entities, and that it is difficult to for reform to happen from inside the service providers.

It is desirable that each school makes efforts to create a distinctive school and come up with various ideas for primary and secondary education as well. But, unless the providers have complete accountability and a mechanism exists to allow parents and community members to get involved in the operation of schools, it will be difficult to make efforts for continual improvement.

(A) Promotion of further effective use of the School Councilor System [To be implemented in FY 2002]

To encourage further effective use of the school councilor system, school councilors should be able to get together to consult with each other or reflect opinions from parents and community members in evaluating school operation. Furthermore, support to school councilors provided by municipal boards of education should be increased, and proper information disclosure should be encouraged with regard to school evaluation results by school councilors as well as their activities.

The school councilor system, which was started in April 2000 on the recommendation by the Central Education Council in September 1998, has been well received in general, as it has helped schools to be more open to the community and society and thereby to fulfill their duties of accountability. But, there is a strong suggestion that the system is a kind of advisory organization to principals since the establishment depends on the judgment of municipal boards of education and councilor candidates are selected by municipal boards of education based on principals' recommendations. This practice should be modified to allow community members to get involved more easily in school operation with a view to more effective use of the system.

According to the results of an extensive questionnaire survey of responsible units of municipal boards of education conducted by the MEXT, only 14.2% of respondent municipalities introduced the system (or similar system) at all schools in districts, while those that stated "under consideration" or "no plan to introduce" has reached as much as 58.1% (as of April 1, 2001). When schools and a certain number of parents and community members ask for the introduction, municipal boards of education should give positive consideration to the possibility. Believing that the school councilor system should be further introduced and promoted for more active use, we, the Council, wish to suggest the following points with regard to the operation of the school councilor system.

First of all, the school councilor system is a mechanism in which school councilors express their opinions about school operation at the principal's request. There are some views that the current non-council format has certain benefits, but it seems necessary to accept some alternative approaches as occasions demand, such as a council system in which school councilors get together to share opinions.

Because parents and community members are asked to serve as school councilors, an objective evaluation of schools can be expected. As one of the methods to make active use of the system, it is conceivable that school councilors would evaluate schools in accordance with a certain set of evaluation items listed by municipal boards of education and report the evaluation results to the boards of education, which in turn would publish them for the general public.

The evaluation results could be effectively used by parents and children when choosing a school.

Furthermore, the boards of education should further clarify the current selection method of school councilors under which they are selected by municipal boards of education on principals' recommendations, such as by establishing a kind of "school councilor selection regulations" that stipulate members of school councils, such as parents and community members.

In the school councilor system, the municipal boards of education could be required to release information at the request of parents and community members to help councilors to provide constructive opinions that reflect worthwhile ideas from those local stakeholders, including other good practices.

On-demand information disclosure about councilors' activities should be examined while keeping a rule that privacy data shall not be disclosed under certain conditions.

(B) Classes given by parents and community members [To be implemented in FY 2002]

The efforts to introduce a system of "parent teachers" and/or "citizen teachers" under which parents and community members would give classes at schools should be further encouraged. In preparing for classes, it seems necessary to ask for the corporation of school councilors, as liaisons between schools and communities.

Old reforms of primary and lower secondary education also have promoted the active use of working persons, such as the appointment of non-teachers for principal positions and the active recruitment of those who have working experience, and the part-time teacher system and as well as other relevant ones have been promoted to allow those without official certificates to teach in schools. Such efforts should be further encouraged in the future.

Certainly, it is important for children to spend a long time with one teacher. But, working with several teachers (adults) could work positively when children develop their personalities, value judgments and work values. Given this fact, it is preferable to widely promote the part-time teacher system and "parent teacher classes" or "citizen teacher classes" from the viewpoint of community involvement (voluntary) in school operation as well. It is necessary to further promote and enhance such efforts.

These efforts could be actively made under the current educational system as well, and some schools already have introduced the system. However, for the future growth of the systems, such as the school councilor system, a mechanism to obtain cooperation from community members in school operation, should be effectively used in implementing "parent teacher classes" or "citizen teacher classes," and thereby, school councilors could be asked to provide support as links between schools and local communities.

C. Reform of school operation and promotion of information supply
(A) Promotion of a self-monitoring and evaluation system in schools [To be implemented in FY 2002]

Every primary and secondary school should set educational goals, and monitor and evaluate how well such goals are being achieved.

In working towards the provision of a higher quality of educational services, it is necessary for schools to monitor and evaluate their proper goal setting and achievement. Also, together with this self-monitoring and evaluation, various other approaches to evaluation can be taken, such as evaluation by school councilors on the items listed by the municipal boards of education.

Many schools seem to have introduced the self-monitoring and evaluation system already, but it is desirable that all schools do so for proper setting and achievement of goals.

In setting educational goals, all schools don't necessarily need to fit the same role. For example, some schools focus on the improvement of basic academic or physical abilities of students, some emphasize etiquette and manners, and some could be active in international exchange to help their students better understand the world. It is thus desirable that they set various goals and develop their own uniqueness.

(B) Promotion of information supply by schools and teachers [To be implemented in FY 2002]

To help children and parents properly select a school, more information about teachers' educational policies should be provided together with a school overview (number of teachers, number of students, school building area, educational goals, management policy, educational plan and others) and the results of self-monitoring and evaluation.

At present, the introduction of the school selection system has been limited, but any municipality can implement the system on its own judgment. Further implementation of the system is strongly expected.

Important for the proper functioning of the school selection system is not only its introduction itself but also the provision of sufficient information about educational goals and the uniqueness of individual schools, which is beneficial to proper choice by parents and children. There are some concerns that schools are selected based on reputation or rumors passed around among parents or just the newness of school facilities, due to a lack of available necessary information. Needless to say, such a situation is not desirable.

Of course, some schools fulfill their duties of accountability proactively, for example, by preparing a kind of guidebook on the school, but unfortunately such efforts do not seem to be on display on a nationwide level.

Information that it is considered necessary to provide include the educational goals set of individual schools and the results of self-monitoring and evaluation, and teachers' educational policies, which are considered the most important factor of educational services, should also be further disclosed.

D. Others

The following issues suggested in the interim report should be continuously advanced.

(A) Better contents in primary and secondary education [To be implemented in FY 2001 (On-going examination)]

It is necessary to further improve education to develop creative human resources, such as in the fields of science and mathematics, IT, the arts, and communication/language, and the specific approaches to provide such education should be continuously examined.

Also, educational opportunities to develop children's social skills and their values about work and working should also be further increased.


5. Environment

[Awareness of the Issues]

(Soil environment protection measures)

According to a study conducted by the Ministry of Environment, of the cases of soil pollution in the place where a factory had been situated before that were detected by prefectural governments during the period from FY 1975 to FY 1999, 431 cases did not conform to the elution standards set by the soil environment standard, with 117 of them discovered in FY 1999. Moreover, it was pointed out that the figure by no means represents the actual number of soil pollution cases in city areas but is just the tip of the iceberg.

(Problem of global warming)

<Reduction of greenhouse gas emission>

Due to an increase in the emission of greenhouse gases in line with the expansion of human activity, the density of greenhouse gases in the atmosphere has increased and the temperature on the surface of the earth has risen, triggering concerns that it may have adverse effects on the ecosystem and on human beings.

In order to reduce the emission of such greenhouse gases, the United Nations Framework Convention on Climate Change was adopted in 1992 and went into effect in 1994. And in 1997, the Kyoto Protocol was adopted to enhance the effectiveness of the Convention. The Protocol sets targets to reduce six kinds of greenhouse gases, including carbon dioxide, and requires Japan to reduce emissions of such gases by 6%. The Protocol has yet to go into effect. However, as an accord was reached concerning operation details at the 7th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 7), parties to the convention are expected to move toward signing the Protocol so that it goes into effect in 2002.

<Promotion of gas pipeline construction>

Promoting the use of natural gas, which emits relatively less carbon dioxide than oil and coal, is one of the extremely effective measures against global warming. From this standpoint, it is a matter of utmost urgency to establish the environment to shift the proportion of fossil fuels consumed in power generation and the industrial sector, which are the emission source of carbon dioxides, from oil and coal to natural gas.

(Promotion of corporations' voluntary measures using information)

In order to solve environmental problems such as global warming and massive discharges of waste, it is important for all entities in the society to voluntarily and positively promote environmental protection. It is indispensable, in particular, to prompt corporations, the main players in terms of economic activities, to promote voluntary efforts to protect environment.

Conventional anti-pollution measures were of the end-of-pipe type, that is to say, they were directed at reducing environment loads at the end of the discharge of pollutants into the atmosphere. However, with environmental problems becoming complicated and diversified, it is pointed out that such conventional measures are limited in their effectiveness and instead comprehensive measures that utilize economic and information techniques are increasingly called for.

(Elimination of heat island phenomena in city areas)

The heat island phenomenon has been drawing attention of late as an environmental problem particular to city areas.

This refers to a phenomenon of higher temperatures in city areas than in their surrounding areas, caused by an increase in the surface of the earth covered by concrete or asphalt, a decrease in green tracts of land, and an increase in heat discharged by air-conditioners and automobiles as a result of urbanization.

The heat island phenomenon has aggravated the living environment, such as increases in hot nights, torrential downpours, and cases of fever, as well as an increase in power consumption due to the increased demand for air-conditioners in summer. And, it worsens air pollution by forming inversion layers in winter.

(Coexistence of human beings and nature)

Although Japan is not so large in size, it boasts rich fauna, with the percentage of fauna indigenous to Japan (those inhabiting only in Japan) being high. In particular, Japan is unrivaled in terms of the richness of the kind of fauna that require both shore and forest to inhabit, such as amphibians and dragonflies.

However, some of the animals and plants that were normally seen in people's living areas, such as killifish and bellflowers, are now listed as endangered species. This has resulted from the development of places (such as villages, village mountains, coastal areas, and shallow sea areas) for human being (natural seashores with no artificial structures decreased to 55% of the total seashores surrounding Japan in 1993 and tideland areas in 1994 had decreased to about 60% of what they were in 1945. (the 4th Basic Survey on Natural Environment Protection, Environmental Agency)) and changes in production modes (inappropriate use of agricultural chemicals, etc.) and in people's life style (mass-production, mass-disposal society, etc.).

Alien species also had a major impact. As a result of the import and use of a wide variety of alien species and the unintentional movement of wildlife along with man and goods, wildlife has been run wild outside of their original habitats, causing adverse effects not only on the ecosystem but also on industries and human health and life.

(Waste/recycling problems)

In order to establish a cyclical society, it is necessary to promote the 3 Rs, reduce, reuse, and recycle, and ensure the appropriate disposal of waste.

(Environment assessment)

Urban development projects are expected to improve the environment to some extent as the establishment of area heating and cooling systems and water supply systems of reclaimed water for reuse make it possible to save energy and resources and as tree-planting spaces are secured in such projects. However, since some local ordinances require time-consuming procedures for assessment of the environment, more efficient and appropriate ways to promote development projects are called for.

[Direction of Reform]

(Soil environment protection measures)

Although there is a legal system for soil pollution of farm land in Japan, there is no such system in city areas, except for dioxins, and there are environment standards for only 26 substances. Therefore, even when soil pollution cases are detected, there is no legal framework for countermeasures to be taken, such as the purification of the soil. This has caused the following problems:

There are no measures in place to cope with the risk to health posed by the intake of polluted soil.

There are cases where land purchasers have to shoulder a huge amount of costs to purify the land because land transactions are conducted without checking if the land is polluted or not, raising concerns that it may restrain smooth transactions of land.

Since soil pollution is highly likely to lead to groundwater contamination, leaving soil pollution as it is may eventually make it impossible to use groundwater as drinking water.

While local governments have begun to establish ordinances and guidelines concerning surveys on polluted areas and countermeasures against pollution, if the ordinances and guidelines were different from each other, businesses operating nationwide would be forced to take measures individually, putting a huge financial burden on them. It is important to take measures based on the actual state of their situation, but the central government must first set the standard.

Under the current situation where there is no legal framework concerning measures against soil pollution in city areas, those who voluntarily take measures often become targets of criticism causing the feelings of unjustness.

As the U.S. and European countries established a legal framework for measures against soil pollution after 1980, foreign companies, when they purchase land or merge in Japan, often demand measures similar to the legal framework in their home countries. Therefore, the absence of such a legal framework in Japan may work to discourage foreign investment in Japan in the end.

(Problem of global warming)

<Reduction of greenhouse gas emission>

Japan accounted for 8.5% of the carbon dioxides discharged by advanced countries in 1990 and 8.7% in 1998. Japan, as the host of the Kyoto Conference, should carry out its responsibility for the prevention of global warming.

To this end, the House of Representatives and the House of Councilors in April 2001 unanimously adopted a Diet resolution calling on to "establish domestic structures for the prevention of global warming, ratify the Kyoto Protocol as early as possible, and achieve a leadership position so that the Protocol goes into effect in 2002." And, with the agreement reached at COP7, the Global Warming Prevention Headquarters has decided to begin full-scale preparations for ratification of the Kyoto Protocol in 2002, by vigorously promoting the following measures: (1) reviewing the current Outline for Global Warming Prevention in order to attain the Kyoto Protocol objectives and (2) implementing full-scale preparations for the next ordinary session of the Diet in order that ratification of the Kyoto Protocol and the adjustment or establishment of the domestic structures necessary for ratification can be achieved.

Therefore, comprehensive measures should be established in preparation for ratification of the Kyoto Protocol. Japanese greenhouse gas emissions in FY 1999 rose by 6.8% when compared to the benchmark year 1990. On the major premise of ensuring safety, therefore, it is necessary to continue to seek the understanding and cooperation of the people for utilizing nuclear power plants, which are the most effective in reducing greenhouse gases. At the same time, it is also necessary to implement policies that will reduce environmental loads on the society as a whole by promoting energy-saving measures, expanding the use of natural gas, and promoting new energies, such as wind, solar energy, and biomass power generation. In doing so, inter-ministerial efforts should be studied in disseminating the use of new energies and promoting energy saving.

In studying domestic measures, (1) it is vital that each and every person in Japan changes his or her lifestyle in order to prevent global warming, (2) the concerted efforts of both the government and the people will be necessary and the understanding and action of each person is required, (3) excessive burden on the economy should be avoided, and (4) it is vital that each entity flexibly chooses reasonable and optimum measures in order to achieve the maximum results at the minimum cost.

<Promotion of gas pipeline construction>

With regard to dissemination of natural gas, which, unlike oil and coal, cannot be easily transported, the following problems should be expressly taken into account:

As one of the reasons for high-priced natural gas, it can be pointed out that competition among gas companies is not sufficient. This is because Japanese pipeline networks are divided according to each gas company's supply area.

Moreover, since it is difficult to secure private land for the laying of gas pipes in Japan, unlike in the U.S. and European countries, pipes are basically laid under public thoroughfares. For this reason, pipe layers have to spend a considerable amount of time negotiating with relevant local parties concerned and administrative organs, resulting in prolonged periods of time being required for the actual laying of gas pipes.

We also have to take into account the fact that, since Japanese regulations concerning laying pipes and repairing them are prescribed in more detail than in the U.S. and European countries, the unit cost of laying gas pipes and repairing them is higher.

In light of the above, we should scrupulously examine the reasonableness of the current regulations and consider whether they should be kept in place or not. If, as a result of the study, the regulations are found to have outlived their originally envisioned roles, or if they can be rationalized in view of recent technological innovation, then we should positively review them.

(Promotion of corporations' voluntary measures using information)

Of late, two methods are drawing attention as ways to reduce the environmental loads caused by corporate activities. One of them is environment reports to publish information concerning companies' environmental measures and environmental loads, the other is environment accounting, a method to quantitatively understand and analyze the cost and effect of environmental protection in business activities.

The number of corporations that have adopted environment reports and environment accounting has been increasing, as guidelines were established and various symposiums were held to promote their dissemination. However, the proportion of such corporations is still small and further efforts to promote their dissemination are required.

There are critical comments, such as "There is no unified environment reporting or environment accounting. There is no way to check whether the information given is correct or not." In response to these comments, studies should be made from the standpoint of securing the comparability and reliability of environment reports and environment accounting.

(Elimination of heat island phenomena in city areas)

In order to eliminate heat island phenomena in urban areas, such measures as people leaving cities during summer holidays, as Europeans do, and lowering the level of corporate activities will be considered. But what is most important is to reduce waste heat and improve the cover of the earth's surface.

With regard to these points, the central and local governments have implemented various measures, including energy saving, the promotion of tree planting on building roofs, the improvement of artificial covers, and the improvement of urban structures. For example, the Ministry of Land, Infrastructure and Transport revised the City Greenery Conservation Law (Law no. 72 of 1973) and created an approval system for greenery facility establishment and planning. The Tokyo metropolitan government has passed an ordinance that makes tree-planting mandatory.

(Coexistence of human beings and nature)

Recently, Japan has implemented measures aimed at "coexistence of human beings and nature," such as nature-regenerating public works that involve various concerned parties. However, such measures are not enough to stop the rapidly progressing loss or decline of biological diversity.

The current National Strategy of Japan on Biological Diversity has played a certain role in raising interest and understanding concerning the conservation of biological diversity and in promoting various measures by the private as well as public sectors. However, it is pointed out that the policies adopted by various ministries and agencies are not fully integrated or coordinated. Therefore, it is necessary to enhance effectiveness with regard to the ideals and objectives advocated in the policies. The current National Strategy of Japan on Biological Diversity should be enhanced as a total plan for "the coexistence of human beings and nature" and the ministries and agencies concerned should establish a nature regeneration project promotion council to promote the implementation of the total plan.

There are several mechanisms to cope with problems of alien species, such as those concerning importation of creatures from abroad and their domestic movement. But they are designed to ensure "the safety and promotion of agricultural production" and do not cover management of the wide range of risks concerning the effects of alien species on the ecosystem, biological diversity, human health, and industries. According to the Public Opinion Poll on Protection and Use of Nature (May 2002), by the Public Relations Office of the Cabinet Office, about 90% of Japanese people want some kind of regulations, including restrictions on bringing alien species into Japan. In order to respond to these calls and from the standpoint of promoting "the coexistence of human beings and nature," it is necessary to enhance the mechanisms related to the problems of alien species.

(Waste/recycling problems)

It is necessary to drive home the importance of the obligations of business operators and manufacturers and the nation who discharge waste and to efficiently promote waste disposal and recycling by utilizing private-sector vitality.

(Environment assessment)

In order to make Japanese cities better places so that the people living there actually feel that the environment surrounding them is healthy, it is necessary to draw city-wide medium- and long-term development plans, or grand designs for urban development, and implement them promptly and efficiently.

[Specific Measures]

(1) Soil environment protection measures [Measures to be taken in FY 2001 (excluding 7)]

Measures for investigating and purifying soil pollution in city areas should be worked out and studies on the measures, including the submission of related bills to the next session of the Diet, should be concluded, while paying attention to the following points:

  1. With regard to soil pollution, studies should be made on the advisability of investigating, business operators handling harmful substances under certain conditions, and conducting investigation before the development of land, from the standpoint of preventing harmful effects on human health and new extent of pollution, and facilitating smooth land transactions.

  2. A system to register polluted land and disclose information on such land should be established in order to promote information disclosure for people living nearby and to prevent a situation where people end up purchasing risk-managed land and having to shoulder a huge amount of costs to purify the land.

  3. With regard to soil pollution, those who caused pollution should bear the cost to purify polluted land, in principle, be shouldered, and landholders, under certain conditions, should be obligated to take countermeasures.

  4. Criteria of measures and the concrete contents of measures should be balanced and measures should be flexibly employed so that they will not result in excessive burden on landholders.

  5. When the polluter cannot be identified or doesn't have sufficient funds, it is sometimes difficult to have the landholder shoulder all the costs. Therefore, it is necessary to study support measures, including the establishment of a fund and providing tax relief, while maintaining the principle of having the polluter shoulder the cost.

  6. In establishing a national system, it must be ensured that such a system is consistent with ordinances issued by local governments, giving due respect to the objective of the decentralization of power.

  7. In order to promote the use and transaction of land, it is necessary to study means, including the use of existing systems, that will contribute to the smooth settlement of disputes, such as civil action for damage compensation, and to secure the effectiveness of research and measures concerning soil pollution.

(2) Problem of global warming

A. Reduction of greenhouse gas emission [Measures that are necessary to ratify the Kyoto Protocol will be taken in FY 2001. Other measures will be implemented in successive steps]

Comprehensive measures should be implemented in the following ways:

  1. In view of the facts that prevention of warming is a matter for the society and the economy as a whole and that greenhouse gases (especially carbon dioxide) are discharged from various sources, including actions taken in the daily lives of the general public, it is important to employ cost-effective methods in dealing with the problem. In promoting measures, it is also necessary to keep in mind that global warming may generate new business.

  2. The introduction of technologies to reduce greenhouse gases has made little progress due to the long time required to recover the investment. Therefore, it is necessary to implement measures to back up the effectiveness of introducing such technologies. If the "non-regret measures" that are implemented with other policy objectives, such as public transportation means, joint transportation, Intelligent Transport Systems (ITS), and the recycling of food waste, are found to be effective, the introduction of such measures should be promoted.

  3. Frameworks for field-by-field environmental conservation measures should be established, including those for a clean transportation system, the improvement of urban and regional social infrastructure to establish a warming-free society, warning-free life styles, and reduction of the emission of non-energy-originated carbon dioxide and other greenhouse gases.

  4. In order to reduce emission of greenhouse gases efficiently and effectively, it is important to study combining conventional methods of regulation with other methods, such as imposing a tax, or a surcharge economic methods like efficient transactions of ecology rights through the market mechanism, and voluntary efforts. Results of the implementation of such measures should be evaluated and, if necessary, additional measures should be taken.

    In light of the current severe economic conditions, it is important to make use of the creativity of business circles when studying measures and to see to it that the measures contribute to the revitalization of the Japanese economy.

  5. With regard to new energy, specific studies are now being made to introduce new market expansion measures in the field of power supply, such as the Renewables Portfolio Standard (RPS). Such measures and other new energy measures should be strongly promoted.

  6. The introduction of low emission vehicles and low energy consumption vehicles, including clean energy cars, should be promoted and technological development for lower costs and higher performance should also be promoted.

  7. However, as for measures that impose economic burden, studies should be made from various aspects, including progress in people's understanding of the effectiveness of such measures, effects on environmental conservation, results of studies and research on the effects of such measures on the national economy, and the current state of measures implemented in other countries considering the situation after the measures.

  8. With regard to voluntary efforts of the private sector, the voluntary action programs of such as Japan Federation of Economic Organizations, it is desirable to study the potential establishment of a domestic registration body as a scheme to provide third-party evaluation of private-sector initiatives in order to further secure the credibility of such initiatives and keep them in place.

  9. Since technology development has the huge potential to significantly enhance energy efficiency, it is important to continue promoting measures for technology development. In doing so, it is important for industry, universities and government agencies to play their appropriate roles in order to promote technology development organically and systematically.

  10. With regard to forests, which play an important role as a source of absorbing carbon dioxide, it is necessary to promote appropriate measures to manage and protect forests in order to maintain forest's multifunctional roles of preventing global warming and preserving the ecosystem.

B. Promotion of gas pipeline construction

In studying regulations on laying gas pipes, it is important to give top priority to securing safety, while keeping in mind the situations in the United States and European countries. Specific points that have to be studied are as follows.

Even in the case of laying high pressures pipes of more than 2 MPa beneath roads in city areas, if it does not pose any problems in terms of the thickness of the pavement of the road in question and the interval between the pipes and other buried materials, a burial depth of 1.2 meters is sufficient, as opposed to 1.8 meters. [To be implemented in FY 2002 (examination), To be implemented in FY 2003 (conclusion)]

Assuming the laying submarine pipelines in the future, it is necessary to study technological standards for the quality of the material, design load, and allowable stress of gas pipes, while giving top priority to securing safety and keeping in mind the situations in the U.S. and European countries. [To be implemented in FY 2002 (study to begin)]

It is assumed that pipeline layers will exercise their public interest prerogatives when laying undersea pipelines. In that case, it may be difficult to adjust different rights, such as public interest prerogatives and fishery rights, among private entities. Therefore, study should be made on appropriate adjustment methods that will ensure objectivity and transparency. [Study to be made at the necessary time]

(3) Promotion of corporations' voluntary measures using information

A. Measures to promote the diffusion of environmental reports and environment accounting

In order to promote the diffusion of environmental reports and environment accounting not only to large enterprises but also to small and medium-sized enterprises, administrative support measures to promote the diffusion should be taken, such as providing information by establishing a database on environmental reports and environment accounting. [To be implemented in FY 2002]

In the light of the gains in terms of environmental protection that are to come about due to environmental reports and environment accounting, a study should be made and conclusion should be reached on a new framework for promoting diffusion as well as on establishing a government goal to put this diffusion firmly in place, such as measures to provide some kind of incentives to enterprises engaged in environmental protection and measures to enable such enterprises to enjoy a good reputation in the society and, as a result, leading to the enhancement of their competitiveness. [To be implemented in FY 2002]

A study should be made and conclusion should be reached on environment management accounting methods, such as including the environment item in cost accounting, material flow-cost accounting, and performance evaluation. [To be implemented in FY 2002]

B. Ensuring the comparability of environmental reports and environment accounting [To be implemented in FY 2002]

It is necessary to further improve environment accounting and evaluation of the results of environment measures (environment performance information) that are to be entered in environment reports. Specifically, study should be made on theoretical issues, such as systematizing the effects of environmental protection measures from the standpoint of clarifying environment accounting rules, and revision should be made in order to enhance the practical convenience of guidelines by such means as systematizing the methods to collect environment performance information. To that end, further study should be made from the standpoint of making industry-by-industry comparison possible, while making items common for more accurate and easier industry-wide comparison.

C. Ensuring the credibility of environmental reports and environment accounting [To be implemented in FY 2002]

In order to prevent misunderstanding based on wrong information, the European Union has established the Eco-Management and Audit Scheme (EMAS). In line with such international movements, Japan should study and establish a framework to ensure the credibility and reliability of the contents of environmental reports and environment accounts, including the establishment of a third-party audit system.

In doing so, the following points should be taken into account.

  1. Measures should be taken to establish a system to qualify the persons conducting the inspection or to remit such person. It is also necessary to take measures to train inspectors and enhance their ability to cope with changes in the environment. In establishing a qualification system, it is necessary to set a time limit for the validity of the qualification and make it a private approval organization, like the International Standardization Organization (ISO). If the qualification is to be made official, certified public accountants that are actually conducting inspection should be included.

  2. It is necessary to clarify audit methods, audit scope and audit standards as much as possible.

  3. In the case of third-party audit, care should be taken so that the person who prepares the reports does not need to bear high costs.

  4. Since negative information that is disadvantageous to companies could be important information for consumers, investment organizations, or local residents, etc., such information should be included in environmental reports and environment accounting.

  5. Administrative measures against false entries should also be studied.

(4) Elimination of heat island phenomena in city areas [To be implemented in FY 2002]

In order to cope with the heat island phenomena in city areas, the following measures should be taken:

  1. At present, central government ministries and agencies and local governments are implementing various measures separately. In order to make the measures more effective, it is necessary to implement them in a mutually coordinated, systematic way.

    To this end, a comprehensive promotion system should be set up, such as a comprehensive measure council comprising of the ministries and agencies concerned, including the Ministry of the Environment, the Ministry of Land, Infrastructure and Transport, and the Ministry of Economy, Trade and Industry. It is also necessary to study the establishment of general guidelines for measures to eliminate the heat island phenomena.

  2. With regard to the heat island phenomena, there are differences by region in the degree of contribution by type of cause of waste heat, as well as in the mutual relevancy of causes, and in the geographical features. In order to further promote the measures, it is necessary to carry out investigations and analyses to elucidate the complicated mechanisms, such as the relevancy of each cause of the phenomenon and the degree of its contribution.

  3. In promoting measures against the heat island phenomena, it is important to take the shape of the city into account. For example, the heat island phenomenon can be eased by taking the following measures: promoting the construction of high-rise buildings in certain areas of cities while promoting construction of lower buildings in others in order to secure "Wind Roads" so that winds from the sea and surrounding areas can pass through cities; reducing built upon areas by promoting the construction of high-rise buildings and increasing green belts; and promoting the construction of high-rise buildings in inner cities and lessening the area in order to reduce the energy costs required for movement and physical distribution and power distribution losses, thereby reducing waste heat. In order to promote the above measures, it is necessary to elucidate the mechanisms of the heat island phenomenon. The Ministry of Land, Infrastructure and Transport should also study measures against heat islands as part of its urban policy.

(5) Coexistence of human beings and nature

A. Designing a national strategy to promote the "coexistence of human beings and nature" [To be implemented in FY 2001]

In order to make the current National Strategy of Japan on Biological Diversity a total plan for "the coexistence of human beings and nature," it should be revised to include the following factors.

  1. Active use of Natural Parks covering wide areas of secluded mountains as a backbone to conserve the biological diversity of Japanese land.

  2. Forests cover nearly 70% of the land area in Japan and play important roles for public interests, such as the conservation of national land, the headwater construction of rivers, and the maintenance of the natural ecosystem. In order to maintain such functions of forests, it is necessary to implement improvement and protection measures appropriate to each function.

  3. Making clear the position of villages and mountain villages that are located between cities and secluded mountains in the conservation of biological diversity. And, the implementation of effective measures to achieve the objective by combining various methods, including support for NPO activities and driving home consideration in public works.

  4. In the areas in which the nature has been destroyed or impaired, such as river areas like seashores and shallow sea areas, and city areas, regenerating or restoring nature is an important problem. One of the effective methods to regenerate or restore nature is nature regeneration projects undertaken by various entities, such as local residents and NPOs. Therefore, it is necessary to establish conditions to effectively and efficiently promote nature regeneration, such as the adjustment of cooperation and the roles of each ministry and agency, and the joint implementation of projects by the ministries and agencies concerned. To this end, the cooperative structure of the ministries and agencies concerned should be reinforced, including the establishment of a nature regeneration project promotion council composed of representatives from various ministries and agencies concerned. It is also important to utilize various systems in order to obtain the participation of experts, local residents, NPOs, etc. all through the promotion of nature regeneration projects, from the designing and planning stage to the implementation of the projects and to the maintenance and management after their completion. For example, it is necessary to respond to the detailed needs of citizens by utilizing an adoption program (a system under which corporations and civic groups clean rivers, etc. within their assigned area on a voluntary basis) for maintenance and management work or consigning such work to NPOs. It is also necessary to carry out regeneration projects and restoration projects on the basis of scientific planning and methods, such as setting specific goals based on scientific studies, monitoring the natural environment restored, and feeding back the results of the assessment to the projects.

  5. Expanding learning opportunities to understand and conserve nature.(Include such opportunities in nature regeneration projects and elementary and junior high school education)

  6. Enhancement of basic research on nature conservation (reinforcement of state-run monitoring bases, establishment of database on creatures and ecosystem of shallow sea areas, enhancement of basic data on nature in the Asia region, etc.)

  7. With regard to endangered species, some preventive steps are being taken in environment assessment and various measures. However, it is necessary to further shift the emphasis from conventional emergency measures to preventive measures by including such species in nature regeneration projects and using them as the index of biological diversity of villages and mountain villages.

  8. In order to avoid erosion of biological diversity by alien species and to prevent their adverse effects on the ecosystem, human health and life, and businesses, a system to cope with problems related to alien species should be established from the standpoint of promoting the "coexistence of human beings and nature."

*Note: Measures to promote the "coexistence of human beings and nature" are expected to create new jobs, particularly in the following fields: (1) investigation, designing and planning, (2) nature regeneration public works projects (Since projects to regenerate nature require the use of natural resources in the region, such as timbers which were cut out for thinning out and brushwood, instead of iron and concrete, they are labor intensive and the proportion of personnel costs to total public works expenditures is high.) (3) Learning guidance on the "coexistence of human beings and nature"

B. Measures to realize a national strategy to promote the "coexistence of human beings and nature"
(A) Follow-up study and evaluation [To be implemented in successive steps]

In order to ensure the realization of a national strategy to promote the "coexistence of human beings and nature," follow-up studies and evaluation of the National Strategy of Japan on Biological Diversity should be carried out on a regular basis.

(B) Submission of a bill to revise the Natural Park Law [Measure to be dealt with at the next session of the Diet]

In order to actively use nature parks as the mainstay in conservation of biological diversity, nature parks' function of ecosystem conservation and wildlife protection should be included in the Nature Park Law (Law of 1957 No. 161).

(C) Study concerning measures to cope with alien species from the standpoint of promoting the "coexistence of human beings and nature" [To be implemented in FY 2002]

Since existing systems are not enough to cope with the immediate problem of alien species, it is necessary to establish a new system from the standpoint of promoting the "coexistence of human beings and nature." Therefore, studies should be launched immediately on the establishment of an effective system, including the establishment of a law, and a conclusion should be reached as soon as possible. In doing so, it is necessary to take into account the establishment of systems necessary for risk assessment and a shoreline measures that are essential in securing the effectiveness of the following measures and systems to avoid erosion of biological diversity and other adverse effects of alien species.

  1. Risk assessment of the introduction of alien species and restrictions based on the assessment

    With regard to species that are regarded as highly harmful, scientifically assessing the possibility of them becoming wild and their effects on the ecosystem, wildlife, industry, and human health. Imposing certain restrictions on the importation and use of the species that are assessed as highly harmful.

  2. Measures to appropriately manage alien species

    Imposing certain restrictions on persons who own, use, or manage species that are assessed as needing proper management, in such way as to prohibit abandoning and leaving, prevent losing, and require registration.

  3. Measures concerning extermination and control of alien species

    It is necessary to provide financial support to the local governments and NGOs that are carrying out the extermination of harmful alien species. And certain roles (extermination of harmful alien species, contribution to funds promoting the use of conventional species, etc.) should be imposed on persons who are held responsible for allowing harmful alien species to be released in the wild.

  4. Promotion of industrial use of conventional species

    Encouraging the use of domestic species in the industries that have been using alien species, by promotion of research and development concerning the industrial use of domestic species.

(6) Waste/recycle problems [Measures to be taken in FY 2002(*)]

(*) An interim report is to be worked out by March 2002 concerning reviews of the definition and classification of waste. Studies will also be made by March 2002 concerning expansion of producers covered by Extended Producer Responsibility, support for establishment of recycle markets, and promotion of construction of recycle facilities in order to reestablish waste/recycle systems.

Study should be made and conclusion should be reached concerning various systems, including the Law concerning Disposal and Cleaning of Waste (Law of 1960 No. 137) (hereinafter to be called [the Waste Disposal Law])

  1. Review of definition and classification of waste, approval for waste disposal business and facility, etc.

    Study to review the definition of waste and the classification of ordinary/industrial waste should be conducted, along with their disposal responsibility. With regard to the waste disposal business and waste disposal facilities in the Waste Disposal Law approval and simplification of its procedures should be reviewed. With regard to employing the Waste Disposal Law or the Construction Standard Law (Law No. 201 of 1950) for approval of facilities, surveys should be conducted concerning residents' consent and the law should be properly employed.

  2. Introduction of Extended Producer Responsibility, deposit system, etc.

    With regard to the Extended Producer Responsibility (EPR) that restrains waste discharge and encourages production of recyclable products, the introduction of EPR into the fields that have yet to introduce this should be promoted and measures to enhance EPR in the fields in which it has already been introduced should be studied. Immediate expansion of the standards concerning introduction of the deposit system and promotion of the 3 Rs (Environment JIS and measures to provide information, etc. on the Law concerning Promotion of Procurement of Environmental Goods, etc. by the Government, etc. (Law No. 100 of 2000)) should be studied.

  3. Reinforcement of measures to restore illegal waste-dumping sites

    With regard to measures to restore illegal waste-dumping sites, expense sharing and burden sharing should be made clear and measures to promote technological development and environment restoration businesses should be taken.

In studying the above measures, it is necessary to take into account the division of roles among the central government, local government, waste discharging business operators and manufacturers.

(7) Environment assessment

In order to promote the creation of environment-friendly cities, the Council requests local governments to do as follows:

  1. Prepare a grand design concerning the future state of the city and strive to promote the creation of environment-friendly cities immediately and efficiently.

  2. In enforcing an environment assessment ordinance, strive to promote flexible and effective environment assessment in accordance with the type of work and place. When problems have become tangible, strive to shorten the time required as the need arises by streamlining procedures as follows:

    1. Diversifying the methods to announce public notices and explanatory meetings

    2. Setting a standard period of time for immediate clerical processing with regard to consultations between operators and the administration, and related advisory councils' deliberation periods

    3. Flexibly setting the area to be covered for explanatory meetings

    4. Increasing efficiency by utilizing existing data of similar nature


6. Urban Renaissance

[Awareness of the Issues]

In Japan, policies to control the "excessive concentration" in metropolitan areas had been implemented since the 1970s. However, it is pointed out that such policies had slowed down not only the productivity of Tokyo and other big cities but also that of Japan as a whole. Japanese cities are now facing competition with cities in other countries but still unable to solve even long-standing problems, such as long commuting hours and chronic traffic congestion. Although various systems have been established for the real estate market, there still remain factors that smack of the land investment myth in this market.

Under such circumstances, it is important to carry out reform of various systems rapidly in order to properly cope with environmental changes that are expected to take place in the future. First of all, with the aim of creating safe and affluent living spaces that will directly lead to enhancing the attractiveness of cities, it is necessary to allow cities to fully exert their functions by directing policies toward creating mature cities that are comfortable to live in and easy to work in and, from the standpoint of realizing efficient distribution of resources, by enhancing the attractiveness and international competitiveness of the cities, the center of economic and social activities. It is also necessary to promote structural reforms in order to restructure the real estate market into a fair, transparent, and reliable one that is suitable for the present-day society.

[Direction of Reform]

In order to maintain and enhance the attractiveness of cities, needless to say, it is important to introduce appropriate management methods and various mechanisms and systems in response to progress in socio-economic maturity. But, it is the local residents and relevant business persons who play the main role in promoting regional vitality by making use of such systems, etc., and what is required is securing the public interest and dynamism of land use. Therefore, the structural reform of the real estate market and the drastic reform of various systems related to cities should be promoted from this standpoint.

Since structural reform of the real estate market is essential for urban renaissance, it is important to establish a system that will enhance the transparency of the real estate market, by promoting disclosure of transaction information, enhancing the functions of real estate agents and their quality, and creating liquidity by further promoting securitization. In particular, promoting disclosure of transaction information is the most basic policy. Some may call for the protection of privacy. But it should be argued that, in view of the public nature of land use and revitalization of the real estate market, promoting disclosure of transaction information is more beneficial to the national interest as a whole than protecting privacy in the long run. Information disclosure will contribute directly and indirectly to the solution of national problems, such as the disposal of non-performing loans. It is also necessary to reform various systems related to real estate, such as the house renting system, in order to secure predictability to the maximum extent. Through these efforts, a real estate market that is transparent, fair and reliable should be established. In addition, it is important to establish a secondhand house market in order to maintain and distribute existing homes as good-quality social capital.

In drastically reforming various systems related to city, it is first of all necessary to map out and implement a specific grand design that will prompt creation of cities of international standards. In doing so, it is important to foster private sector responsibility and initiative for urban renaissance projects in order to promote active investment by the private sector. While promoting the establishment of various systems to facilitate redevelopment projects led by the private sector, city functions should be further advanced by, for example, promoting integrated development of loop roads in big cities and redevelopment of surrounding areas of loop roads. In addition, in order to create city spaces that are safe from disasters such as earthquakes, it is necessary to build a city framework that is on a par with international standards by promoting the integration of sites, including the consolidation of blocs. These measures will promote the advanced utilization of cities and result in enhancing the productivity of the cities through economies of concentration. It is also necessary to promote focused distribution of funds to the establishment of infrastructures, such as traffic and information/communication infrastructures, and to correct the institutional factors that hamper development of the infrastructures.

The number of condominiums that have been in existence for more than 30 years now stands at about 120,000 and it is expected to swell to about 930,000 in 10 years from now. How to cope with run-down condominiums, therefore, is an urgent problem in terms of housing policy. Since there are many problems involved in rebuilding condominiums, a system to facilitate reconstruction of condominiums should be established without delay.

In order to efficiently promote urban renaissance, it is extremely important to take comprehensive measures including budgetary and taxation measures, such as securing financial resources for an early establishment of urban roads and effectively utilizing taxes to revitalize the real estate market, in addition to regulatory reforms.

[Specific Measures]

(1) Ensuring transparency of the real estate market

A. Further disclosure of real estate-related information

The needs for correct and detailed information concerning real estate have increased significantly, reflecting the internationalization of the real estate market, the growth of the real estate financial market, and people's increased interest in the quality of real estate. However, various pieces of real estate-related information are, though accumulated in the public sector, not fully disclosed and used. It is necessary to study a system to provide information appropriately in response to requests from the public.

Specifically, the private entities that create real estate indexes should establish a system to allow full utilization of information on real estate transactions, including actual transaction prices, while keeping the duty of secrecy. [ To be implemented in successive steps from FY 2002]

In order to enhance the transparency and social credibility of officially published land prices, their information should be further disclosed in such a way as offering for public inspection the basic information used for evaluation and evaluation procedures without identifying the parties and land involved in transactions. [To be implemented in successive steps from FY 2001]

Concerning the fixed assets tax, in order to enable comparison with assessed value of other's assets, the scope of public inspection of the assessment roll book, which is limited only to self-owned assets at present, shall be expanded, and relevant information shall be further disclosed. [Bill to be submitted to the next ordinary session of the Diet; To be implemented in FY 2002]

B. Adjustment of real estate appraisal [To be implemented in FY 2002]

With the environment surrounding real estate undergoing structural changes, such as the securitization of real estate and introduction of market-value accounting, the needs for appraisal of real estate have diversified and become complicated. In order o meet these needs accurately, the accountability of realty appraisers should be enhanced by establishing real estate appraisal standards focused on profitability and used more precise methods and more detailed surveys. Real estate appraisal based on the standards should be promoted and put firmly in place at the operational level.

C. Re-establishment of transparent and fair distribution system for real estate [To be implemented in FY 2002 (examination/conclusion)]

In order to increase real estate distribution, transparency and fairness in real estate transactions must be ensured. To that end, it is necessary to re-establish real estate agency business as well as to promote disclosure of real estate-related information.

Earthquake-resistance tests of existing houses and periodical inspection of occupied houses are beyond the scope of conventional real estate businesses. In order to meet consumers' needs for such advanced services, it is important to promote cooperation and coordination with other organizations and experts.

To that end, it is necessary first of all to define the scope of operations and responsibility of real estate dealers and then to study how other services should be provided.

In addition, it is necessary to study reorganizing the increasingly complicated "explanation of important matters" by taking into account the order of priority.

D. Further improvement of house renting system

With regard to residential buildings, it is necessary to study allowing a switch to a fixed-time house rental contract if the parties concerned agree. It is also necessary to study whether or not to abolish the requirement of explanation in writing when concluding a fixed-time house rental contract and the forcible provision of borrower's right to cancel a fixed-time house rental contract. [To be implemented in FY 2002 (examination); To be implemented in FY 2003 (conclusion)]

The requirements for the due-cause system under the Land Lease and Rental House Law (Law No. 90 of 1991) should be made objective to reflect the changes in the utilization conditions of nearby land, such as the purpose of the use of buildings, rebuilding, and re-development, and study should be made with regard to compensation for eviction. [To be implemented in FY 2002 (examination); To be implemented in FY 2003 (conclusion)]

From the standpoint of promoting the spread of long-term fixed-time house rental contracts, the actual state of the brokerage fee, which is set at one month of rent, should be investigated and analyzed and more proper ways should be studied. [To be implemented in FY 2002 (examination/conclusion)]

E. Securing the effectiveness of auction

With regard to the short-term lease protection system under Article 395 of the Civil Law (Law No. 89 of 1896), study should be made with the aim of basically abolishing the system, including not allowing a lease that has not priority rights for hypothec to remain effective after it was put up for auction, unless the mortgagee agrees beforehand.

Study should be made to increase the opportunities for bidders to preview the property to be put up for auction. Study should be made to make it possible to reject the title of possession when the possessor is unable to prove the legitimacy of possession. With regard to court order to exclude squatters, such as provided under the Law of Civil Execution (Law No. 4 of 1979), legislative measures should be studied to make the order effective in the case where squatter can not be identified.

The minimum selling price system and obligations of warranty for latent defect of auctioned property should be examined and better ways should be studied.

F. Acceleration of cadastral survey

Cadastral survey, which gives fundamental information for the land management, is one of the preconditions for the smooth implementation of urban renaissance projects. The government, therefore, should allocate sufficient fund for the survey as well as adopt necessary measures including further use of private expertise so that the survey makes an intensive progress towards the planned target, particularly in the urban areas where the survey is delayed. [To be implemented in successive steps from FY 2002]

From the standpoint of establishing a comprehensive institutional base for an alternative dispute resolution system concerning disputes over land boundaries, necessary measures should be studied, including the possible enactment of a law (such as the "ADR Basic Law") that prescribes a basic framework to promote the use of ADR and to strengthen coordination with trial procedures. [To be implemented from FY 2002 following the enactment of the ADR Basic Law]

G. Integrated promotion of measures related to urban renaissance [Measure to be taken in successive steps]

In the field of urban renaissance, it is extremely important to take comprehensive measures combining budgetary and taxation measures, in addition to carrying out regulatory reforms. Since promoting the liquidity of land is particularly important in urban renaissance, measures should be taken to revitalize the real estate market by promoting participation by various entities. From the standpoint of promoting such investment, various regulations should be reformed and the budgets and tax systems should be used.

(2) Review of various systems related to cities

A. Reform of urban planning systems
(A) Drawing grand designs for cities [To be implemented in FY 2002]

In the master plans based on the current Urban Planning Law (Law No. 100 of 1967), each local government can determine social priority issues as urban planning objectives, such as the reduction of environmental loads and enhancement of anti-disaster measures, on its own judgement. However, it is necessary for bigger cities to present more specific and clear grand designs for the future state of cities.

The basis of drawing a grand design is actively promoting advanced utilization of the areas designated as advanced utilization areas and restraining utilization of the areas designated as restrained utilization areas.

In addition, with regard to bigger city areas, the following matters should be clearly defined:

(B) Introduction of procedures for urban planning proposals by private sector

It is necessary to foster local residents' initiatives and responsibility for community development and to make it possible for residents to voluntarily take part in community planning of new era. To that end, study should be made on submitting to the next ordinary session of the Diet a set of legislation on establishing procedures for urban planning proposals so that residents' ideas are respected and reflected in urban planning. [To be implemented in FY 2001 (examination/conclusion)]

In addition, management of the Urban Planning Council should be improved to facilitate smooth deliberations on urban planning proposals, by shortening the intervals between council meetings, publishing an annual schedule of council meetings, and simplifying procedures, as the need arises. [To be implemented in FY 2002]

(C) Prior specification of urban planning/building regulations [To be implemented in FY 2002]

With regard to urban planning/building regulations such as urban redevelopment plan, prefectural governors have considerable discretion in easing regulations on the ratio of building volume to lot and on building height. This makes it difficult to definitely forecast the final shape of development projects and regulations on them. Besides, it takes time before final decisions on regulations are made. Therefore, it is difficult to make preparations for more efficient promotion of projects, resulting in the protraction of the projects. In order to enhance the private sector's motivation for community development, to induce investment, and to realize better improvement of city areas, regulations concerning the operation of urban planning/building regulations should be made more objective and explicit and a system should be established under which prefectural governors have to respond within a fixed period to inquiries concerning urban planning, such as possible easing of regulations on the ratio of building volume to lot.

(D) Introduction of a planning permission system [To be implemented in FY 2001 (examination/conclusion)]

Since confirmation of building is made on a site by site basis under the current building confirmation system, it is impossible to make integrated examinations of plans involving more than one building or conformity with existing buildings. It is necessary to study a mechanism, under which building regulations are imposed bloc by bloc or district by district and under which the regulations are flexibly enforced by taking the conformity with surrounding areas into consideration. Legislation incorporating such mechanism should be submitted to the next ordinary session of the Diet.

(E) Promoting shift of group provisions to performance provision

Study should be made to shift the group provisions of the Building Standards Law (Law No. 201 of 1950) from specification provisions to performance provisions as much as possible with the aim of submitting legislation to the next ordinary session of the Diet. With regard to provisions that cannot be shifted, their purposes and aims should be clarified and their contents simplified. For example, the road slope restriction (restriction on height by the width of roads) is a restriction designed to secure lighting on the road and it should be explained quantitatively by indexes, such as the sky ratio. While taking into account the clarification of the restriction, the sky ratio and other basic indexes should be flexibly employed by taking advantage of various technological progress. [To be implemented in FY 2001 (examination /conclusion)]

As for building codes, study should be made to rationalize the provision concerning lighting. [To be implemented in FY 2002 (examination/conclusion)]

(F) Accountability for urban planning/building regulations

Urban planning decision-makers have the obligation to explain the grounds for regulations concerning the use of land and the ratio of building volume to lot. [To be implemented in FY 2002]

With regard to administrative litigation concerning urban planning/building regulations, from the standpoint of clarifying litigation requirements, information should be provided concerning dispositions and standing to sue. [To be implemented in FY 2001 (examination); To be implemented in FY 2002 (conclusion)]

(G) Measures against illegal buildings [To be implemented in FY 2001 (examination); To be implemented in FY 2002 (conclusion)]

In order to secure the effectiveness of corrective measures against violation of building regulations, various measures should be studied from wide angles, including preparation of manuals for administrative execution by proxy against illegal buildings, disclosure of information concerning illegal buildings, and imposition of surcharges, etc. that will have economic incentives.

B. Active promotion of urban redevelopment projects
(A) Easing requirements for urban redevelopment areas [To be implemented in FY 2001]

With regard to requirements for urban redevelopment areas, buildings that have passed two-thirds of their useful life are excluded in calculation of fireproof buildings. From the standpoint of developing earthquake-resistant urban areas, the useful life should be shortened and the areas covered by urban redevelopment projects expanded.

(B) Private sector participation in the second classification of urban redevelopment projects [To be implemented in FY 2001 (examination/conclusion)]

Utilize funds and know-how from the private sector, and in order to promote the development of attractive cities and improvement of areas where wooden houses are clustered, private builders meeting certain requirements should be allowed to take part as main project executors in the second classification of urban redevelopment projects, in addition to public entities such as local governments and public corporations. Study should be made with the aim of submitting legislation to that effect to the next ordinary session of the Diet.

(C) Rapid approval of risk conversion plans in the first classification of urban redevelopment projects [To be implemented in FY 2001]

From the standpoint of speeding up projects, it should be thoroughly known that prefectural governors must approve title changes in the first classification of urban redevelopment projects promptly, except when the changes run counter to objective standards, such as laws and ordinances.

(D) Reinforcement of administrative execution by proxy in the Urban Redevelopment Law [To be implemented in FY 2001 (examination); To be implemented in FY 2002 (conclusion)]

When it is necessary for construction works related to an urban redevelopment project, the project executor can request possessors to evacuate the buildings and lands. When the buildings are not evacuated, prefectural governors are allowed to carry out administrative execution by proxy on request from the project executor. However, administrative execution by proxy is seldom carried out. In order to speed up urban redevelopment projects, manuals should be improved so that prefectural governors, if requested by project executors, can carry out administrative execution by proxy in an appropriate manner.

(E) Facilitation of changes in the allocation of the ratio of building volume to lot in the same bloc [To be implemented in FY 2002]

In order to facilitate appropriate changes in the allocation of the ratio of building volume to lot in a plan to build more than one house in the same bloc, the comprehensive design system for one group of land should be utilized and, when it has become necessary to change the contents of urban planning, such as those for advanced utilization areas and redevelopment areas, due to a change in the project plan, the change should be implemented promptly.

C. Appropriate system operation by local governments [To be implemented in FY 2002]

With regard to the administrative guidelines of local governments, their rules should be made clear and objective. For example, the guidelines that are virtually compulsory, such as those obligating construction of parking lots and housing, imposing burden charges and provision of facilities, should in principle be set forth in ordinances and they must be reasonable in light of rules and regulations.

Administration by guidelines should be kept to a minimum and the purposes and meanings of the guidelines should be reviewed regularly and reduced as much as possible.

D. Promotion of public land purchase
(A) Development of urban transportation infrastructure [To be implemented in successive steps from FY 2001]

In order to develop cities that are on a par with international standards, it is important to set targets for the number of years for development to be completed with regard to yet-to-be-developed roads and strive for an early achievement of these targets. To that end, financial resources for public land purchases should be secured and execution setups should be reinforced.

(B) Active use of the Land Expropriation Law [To be implemented in FY 2001 (examination); To be implemented in FY 2002 (conclusion)]

In implementing public works, such as the construction of urban planning roads, it is important to map out appropriate project plans by taking into account budgets and execution setups, etc. and to proceed to expropriation procedures at the appropriate time.

To this end, study should be made on measures to have operators apply for authorization under the Land Expropriation Law at an appropriate time and, from the standpoint of appropriate progress management of the project, have them discharge their responsibility of making explanations to facilitate application at an appropriate time. With regard to urban planning projects, study should be made on measures to make clear that operators have to proceed to expropriation procedures at an appropriate time and to have them complete the procedures within a certain period.

E. Easing traffic congestion
(A) Shortening of the period of time for breaking up roads [To be implemented in FY 2002]

Since road-use permits attach importance to keeping per-day road traffic congestion at a low level in such works as underground electric wiring and laying gas and water pipes, the construction period in downtown areas tends to be prolonged, increasing the cost of congestion caused by construction works as a whole. Therefore, road-use permits should be issued by taking into account lowering the cost of congestion that is caused by construction works as a whole.

(B) Efficient control over parking violation by promoting consignment to the private sector [To be implemented in successive steps from FY 2001]

In order to ease traffic congestion in cities and to realize efficient economic activities, it is important to solve the problem of illegal parking. In order to make control over parking violation in city areas more efficient, consignment of some of the control works to the private sector should be further promoted.

(C) Introduction of time-of-use system for commuter train fares [To be implemented in FY 2002 (examination); To be implemented in FY 2003 (conclusion)]

In order to effectively utilize land in inner cities, it is necessary to drastically increase the total number of passengers who can commute comfortably. The effective measure to that end is lowering off-peak hour fares and raising peak-hour fares (time-of-use fare system).

The time-of-use fare system has two merits. (1) It increases the number of commuters who use trains during off-peak hours. Since the system increases the number of commuters in the service industries, especially commerce, it will contribute to the revitalization of inner cities. (2) It disperses peak-hour commuters to other time zones. In big cities, commuter congestion occurs only during peak times of 30 minutes to one hour. The system will have the effect of reducing congestion during peak times and expanding the commuting time zone. In other words, the system has a public-interest function to effectively utilize resources by internalizing the effect of external diseconomies caused by congestion of commuters.

The present fare regulation system does not offer railway operators any incentives to introduce a time-of-use fare system. Study should be made on measures to induce railway operators to introduce a time-of-use fare system.

F. Overhaul of the Manufacturing Industry (Factory) Restriction Law [To be implemented in FY 2001 (examination/conclusion)]

Amid changes in industrial structure, advances in the aging of the society and decreasing birthrate, and drastic changes in social and economic conditions, radical review should be carried out, including possible abolition, with regard to the Manufacturing Industry (Factory) Restriction Law that restricts construction or expansion of factories, universities, etc. of more than a certain floor space area to prevent excessive concentration of factories and population in existing cities in the Tokyo metropolitan area and the Kinki area, with the aim of submitting related legislation to the next ordinary session of the Diet.

(3) Facilitationof condominium rebuilding, etc.

A. Facilitation of condominium rebuilding
(A) Review of the requirements for rebuilding under the Comparted Ownership Law (Law No. 69 of 1962) [To be implemented in FY 2002 (submission of a bill)]

Study should be made immediately on measures to facilitate rebuilding of condominiums, including limiting the requirements for rebuilding under the Comparted Ownership Law to consents from more than four-fifths of the residents, allowing joint rebuilding of condominiums on adjoining land, and allowing a sharp increase in floor space other than residential sections (commercial/business floors). A bill to revise the Law should be prepared by the autumn of 2002.

(B) Development of a legal framework for rebuilding of condominiums [Bill to be submitted to the next ordinary session of the Diet]

In order to facilitate rebuilding of condominiums into ones equipped with a good living environment, taking the legal security into consideration, a new system for the rebuilding of condominiums by residents should be determined immediately, including establishment of a corporate organization based on governmental authorization and establishment of a system to transfer the mortgage and other related titles to new buildings smoothly and securely.

(C) Facilitating rebuilding of disqualified condominiums [To be implemented in FY 2002]

Efforts should be made to facilitate the rebuilding of disqualified condominiums by using a special system for floor area ratio such as the comprehensive design system.

B. Establishment of secondhand house market
(A) Establishment of a testing system and performance indication system for secondhand housing [To be implemented in FY 2002]

A system should be established under which a third-party assessment organization inspects the exterior, interior, equipment, earthquake resistance, etc. of secondhand housing by using standardized methods on behalf of sellers or buyers so that they can determine conclusion of a sales contract or lease agreement on the basis of the results of the inspection.

(B) Records on maintenance and management of condominiums [To be implemented in FY 2002 (examination /conclusion)]

For the purposes of supporting proper maintenance and management of condominiums by condominium management unions and of facilitating distribution of secondhand condominiums on the market, measures should be studied to enhance the use of records concerning the maintenance and management of condominiums by management unions and purchasers of secondhand condominiums.

C. Effective utilization of public assets
(A) Effective utilization of public land [To be implemented in successive steps from FY 2001]

In the light of the fact that land held by public entities, such as local governments, for use in public housing construction is not effectively utilized, measures should be taken to facilitate effective utilization of public-held land, mainly in cities, by aggressively promoting PFI projects, etc. for integrated and advanced utilization of land as well as the private facilities.

(B) Proper management of public housing

Since it is important to provide public housing to persons who are in dire need of a dwelling, study should be made on appropriate management of public housing, including consideration of assets of those moving into public housing, and on efficient management in accordance with regional situations. [To be implemented in FY 2002 (review); To be implemented in FY 2003 (conclusion)]

In order to prevent nonpayment of rent by public housing tenants who are receiving public subsidy for house rent, measures should be taken to promote coordination and cooperation among departments concerned, such as a system under which the department in charge of public housing receives rent directly from the department in charge of providing subsidy for house rent. [To be implemented from FY 2002]


Council for Regulatory Reform