2. However, the system has failed to smoothly evaluate and adopt new technologies (including those beyond the philosophy of the Housing Quality Assurance Act, hereinafter the same) as the housing performance indication standards and the like stick to existing technologies. The system is a major impediment to the diffusion in Japan of new technologies developed in the United States, etc.

3. The problem has emerged in regard to anti-termite treatment of wooden houses, as explained below:
(1) As for anti-termite treatment of wooden houses, the housing performance indication standards and the like provide for "chemical treatment" and mat foundation methods of outer wall frames, foundation and ground, excluding the termite bait system. According to the Ministry of Land, Infrastructure and Transport, the bait system cannot be admitted as equivalent to anything as provided in the standards.
But the "chemical treatment" has problems. Since the anti-termite chemical treatment uses chemicals that are concentrated several tens or hundreds of times more than for agricultural use, there is a tendency to avoid the chemical treatment in order to reduce human exposure to chemicals. A panel on sick house problems at the Ministry of Health, Labor and Welfare has set guidelines for chlorpyrifos and BPMC as anti-termite agents, leading the Ministry of Land, Infrastructure and Transport to consider a ban on the use of chlorpyrifos for building materials under the guidelines to help solve the sick house problems. Considerations are thus given to reducing human exposure to chemicals in order to address the sick house problems.
On the other hand, the bait system does not involve the direct chemical treatment of building materials. It is set up in an underground case close to a house and uses a very small amount of chemicals that are safer to humans. The bait system thus has far less human or environmental risks than the chemical treatment. Its usefulness has enjoyed high ratings in Japan as well as the United States, etc.
Under the circumstances, the bait system that has less adverse effects on humans and the environment than the chemical treatment has been growing dominant in place of the chemical treatment in the United States, etc.
(2) The Ministry of Land, Infrastructure and Transport says it cannot admit the bait system under the housing performance indication standards and the like because the bait system requiring continuous maintenance services are not suitable for the Housing Quality Assurance Act that is designed to deal with the indication of the performance of new houses.
(3) However, the bait system poses less risk to humans and the environment and is safer to humans. Many people want to use only the bait system to prevent termites. The system is in line with sick house measures (reduction of human exposure to chemicals) of the Ministry of Health, Labor and Welfare and the Ministry of Land, Infrastructure and Transport. Furthermore, more than 130 firms in Japan are ready to manage and back up the bait system. Depending on guarantee contracts, the bait system can maintain its functions for more than 10 years.

4. Based on the above, the Ministry of Land, Infrastructure and Transport should (1) revise the present system to smoothly adopt new technologies by evaluating new technologies promptly and accurately and by changing (making additions to) the philosophy of the Housing Quality Assurance Act flexibly, and (2) change (make additions to) the philosophy of the act flexibly, instead of sticking to the current philosophy, in regard to the present issue of anti-termite treatments for wooden houses and take measures to admit the bait system as an effective anti-termite treatment and certify houses, which have the bait system as the only anti-termite treatment, as meeting the housing performance indication standards and the like.

2.The ministry replied further as follows:
The housing performance indication system is designed to objectively evaluate and indicate the performance of houses and their components in order to allow consumers to confidently acquire houses. It also has the following mechanisms.
(1) The contents of a housing performance evaluation report as prepared by a designated housing performance evaluation body are incorporated into a house construction or sale contract to specify the responsibility of a house builder or seller.
(2) As for houses as evaluated by designated housing performance evaluation bodies, out-of-court conflict settlement bodies are established to smoothly and promptly solve conflicts over house acquisition contracts.
Since the housing performance indication system has the first mechanism, it is inappropriate to include into the evaluation standards the special maintenance conditions that are for those other than houses themselves and cannot be inserted into house construction or sale contracts. Matters that can be interpreted as representing the performance of houses themselves upon delivery can be subject to the evaluation.
If the first and second mechanisms are to cover maintenance contracts and the like in addition to house construction and sale contracts, excessive responsibilities or work burdens will be imposed on housing suppliers, designated housing conflict settlement bodies, and the like. This could affect the use of this optional system and make it an inappropriate system for the main purpose of consumer protection.
The complainant in the second opinion says the bait system "is not a housing component itself." The statement amounts to admitting that the bait system does not represent any part of the housing performance. Given this as well as the mechanisms as mentioned above, it is inappropriate to position the bait system in the housing performance indication system.

3. At the 20th meeting of the OTO Grievance Resolution Committee on September 25, 2003, the Chairman summed up as follows:
(1) It is reported that the bait system subject to this complaint has diffused quickly over the recent years and has been admitted under the construction standards in the United States. This can therefore be conceived as a reliable anti-termite system.
(2) It is also reported that the bait system secures its anti-termite effect while using less chemical than conventional anti-termite measures depending on chemical treatment and is friendly to humans and the environment.
(3) In spite of these features, the Ministry of Land, Infrastructure and Transport has explained that the bait system cannot be qualified for the housing performance indication system because it consists of continuous services and cannot be confirmed objectively in the house design and construction phases.
(4) However, whether the system is qualified for the housing performance indication system is of great significance to real house transactions. From the viewpoint of the market for anti-termite measures, chemical treatment can be viewed as being given more favors than the bait system. From the viewpoint of consumers, there can be a complaint that consumers have been deprived of an opportunity to choose the bait system when they buy new houses.
(5) If a government-created system gives unfair treatment to some products or companies and potential disadvantages to consumers irrespective of legislative purposes, it is unreasonable for the government to conclude that such unfairness or disadvantages do not have to be addressed because they are not environed or suitable under any law or institution.
(6) For example, it is reported that maintenance and management conditions are set to allow the bait system to be admitted under the construction standards in the United States. Therefore, based on such certification method, the Ministry of Land, Infrastructure and Transport should consider measures to solve the unfair treatment, including flexible interpretation of the present institution and creation of a new institution.
(7) We ask the Ministry of Land, Infrastructure and Transport to reconsider its response to the complaint in question on the basis of today's discussion and report the results of its consideration at the Grievance Resolution Committee after about three months.

4. In response to the 20th meeting of the OTO Grievance Resolution Committee, the ministry provided the results of consideration (dated October 16, 2003).
On the assumption that, from the viewpoint of consumer protection, it is indispensable to continue to ensure the appropriateness of the objective methods for confirming information on housing performance provided to consumers under the housing performance indication system, if it becomes possible to evaluate the bait system appropriately as a housing performance, it would be considered beneficial to consumers because of the expanding scope of information provided to consumers. That is also considered to be conforming to the purpose of the Housing Quality Assurance Act that stipulates the housing performance indication system.
In the housing performance indication system, a neutral and fair third-party organization examines what level of performance houses that consumers intend to build or purchase have with respect to certain housing-related items, and provides the examination results to consumers as objective information about housing performance. Due to this characteristic of the system, information provided to consumers must not be uncertain information from the viewpoint of consumer protection, and it has to be objectively confirmable. Therefore, it is difficult to adopt an operation that cuts out the current examination method in which a third-party organization confirms through on-site inspection that the performance is objectively expressed in drawing and specification and that construction work is property conducted according to the drawing and specification. But the ministry considers it possible to evaluate the bait system under the housing performance indication system by confirming through general evaluation methods that the bait system has effective anti-termite performance and by using on-site inspection of the construction site to ensure that the bait system is positioned in drawing and specification as a method for anti-termite treatment on the ground and then is undertaken according to the drawing and specification for anti-termite treatment.
Incidentally, further consideration is required on the methods of describing the drawing and specification for the bait system and the objective methods of confirming the implementation of anti-termite treatment. On this point, the ministry asks the complaint to give specific proposals based on the characteristic of the bait system as a product and the actual handling of it in the United States.

5. Based on a written proposal of the complainant in response to the above 4, the responsible ministry answered as follows on January 8, 2004.
If the bait system has an effective termite-controlling performance and meets the conditions 1)that the system can be put into drawings and specifications and 2) that inspectors are allowed to definitely confirm the installation of relevant devices as instructed in drawings and specifications through on-site inspections, it may be qualified for evaluation under the housing performance indication system. The ministry may have to coordinate details with the complainants. The basic framework for evaluation of the bait system under the housing performance indication system is as follows.

(1) How to position the bait system in evaluation standards
If, after examination by academic experts, a fair, neutral organization confirms that the bait system is a ground-based anti-termite measure that effectively controls termites, it will be interpreted as meeting 5-3-1(3) A(1) d (iii) of the evaluation standards (MLIT Notice No. 1347, 2001).

(2) How to evaluate the bait system in examination of designed housing performances
In examination of designed housing performances, the bait system will be evaluated through confirmation of the following three points in drawings and specifications attached to applications for evaluation.
1) The bait system is used as a ground-based termite-controlling measure.
→ Confirmation is based on design explanations.
2) The bait system effectively controls termites.
→ Confirmation is based on specifications that describe the confirmation of such performance through examination by a fair, neutral organization (the name of such organization and the like) and are accompanied by a copy of written examination results. The copy of written examination results specifies rules for installation of termite detectors for the bait system.
3) Termite detectors for the bait system are installed in accordance with the installation rules.
→ Confirmation is based on the copy of written examination results and the installation drawings.

(3) How to evaluate the bait system in examination of housing performances after construction
In examination of housing performances after construction, the bait system will be evaluated through confirmation of the following two points during on-site inspections. On-site inspections may be carried out at anytime during the period provided in the evaluation method standards, as long as the following two points can be checked.
1) Pre-designated devices are used as termite detectors for the bait system.
→ Termite detectors buried underground are visually confirmed as devices as specified in the copy of written examination results.
2) Termite detectors for the bait system are buried at pre-designated locations.
→ Termite detectors are visually confirmed as installed as instructed in installation drawings.

6. At the 21st meeting of the OTO Grievance Resolution Committee on January 22, 2004, the Chairman summed up as follows.
(1) Based on deliberations at the previous meeting of the Grievance Resolution Committee and subsequent proposals by the complainants, the Ministry of Land, Infrastructure and Transport indicated that the bait system can effectively be admitted for evaluation under the housing performance indication system through flexible enforcement of relevant laws. We appreciate this response as prompt and positive.
(2) We would like to see the Ministry of Land, Infrastructure and Transport and the complainants cooperating to deepen their communications and consider measures required for evaluating the bait system under the housing performance indication system.
(3) We would also like to see the Ministry of Land, Infrastructure and Transport trying to communicate with other relevant agencies and to lay the groundwork for early implementation of the plan indicated at the Grievance Resolution Committee.
(4) We ask the Ministry of Land, Infrastructure and Transport to give timely reports to the Grievance Resolution Committee through the OTO secretariat about the implementation of the plan.
(5) We also ask the Ministry of Land, Infrastructure and Transport to continue efforts to fully respond to technological changes in enforcement of the Quality Assurance Law.

7. The ministry took the following actions after the meeting of the Grievance Resolution Committee: At the request of the complainant, the Japan Wood Preservative Examination Organization, which is a fair and neutral third-party organization, started preparing examination standards to determine the effectiveness of the anti-termite performance of the bait system. However, a lot of time was required for coordination with the existing certification operations of anti-termite agents and construction methods by related industry associations.
To promptly promote the grievance resolution, the Ministry of Land, Infrastructure and Transport decided to deal with the complaint by the Minister's system of "certification by special evaluation method" based on the complainant's request. The complainant has just filed an application for test (examination) by a designated test organization, which is the precondition for certification, on May 13, 2005. The examination is now in progress.
The complainant agreed to close the case by the above-mentioned action.