1. The export-import company in question has applied for a permit to use "F Area Pier -10m" of Takamatsu Port under the control of Kagawa Prefecture for importing natural sand from China's Fujiang Province under an agreement with its parent organization in Hong Kong. But, since 2001, the Kagawa Prefecture Governor (who has commissioned the Takamatsu Port and Harbor Management Office Chief to deal with such applications) has disapproved all such applications for such reasons as dust.
However, the system of permits to use port and harbor facilities is considered to have been established due to the necessity to coordinate use of the facilities to avoid an overlap of uses and to facilitate use. Therefore, Kagawa Prefecture's disapproval for the reasons of dust, etc. does not meet the purpose of this system.
From the fact that the Kagawa Prefecture Port and Harbor Management Ordinance has no provisions for conditions of such permits, it is clear that the system of permits to use port and harbor facilities should be implemented to coordinate uses even at Takamatsu Port. Kagawa Prefecture's internal regulations ("screening standards" for permit applications under the Kagawa Prefecture administrative procedures ordinance) on which disapproval is based are considered to be in violation of the Port and Harbor Law. The prefecture's arbitrary creation and application of such internal regulations is considered to run counter to Japan's port and harbor policy and the view of the Ministry of Land, Infrastructure and Transport.

2. In this respect, the ministry's local office seems to have made some guidance to Kagawa Prefecture. However, the prefecture has rejected the guidance for the reason of local autonomy and made no improvement.

3. Seeing import performance after fiscal 2000 in the Shikoku, Chugoku and Kinki regions, all of which are near Takamatsu Port, natural sand is imported at such ports as Matsuyama, Imabari, Uwajima, Niihama, Kochi, Uno, Mizushima, Fukuyama, Wakayama, Hamada, Amagasaki, Himeji, Sakai, Kishiwada, Osaka, Tsuruga and Maizuru. In these regions, Takamatsu is the only major port where natural sand cannot be imported. At these other ports, the system of permits to use port and harbor facilities is implemented within the scope of necessity for coordinating uses.

Based on these points, the Ministry of Land, Infrastructure and Transport should take prompt measures to allow using Takamatsu Port's F Area Pier -10m for smoothly importing natural sand from China.

(Second Opinion, February 10, 2003)
1. This complaint does not request the interpretation of any law or ordinance. But it calls for eliminating an existing import barrier, even if the barrier does not run counter to any law or ordinance.

2. A reply from the Ministry of Land, Infrastructure and Transport says "Kagawa Prefecture has disapproved applications for permits to use the pier for natural sand imports for the reason of dust, which reflects considerations to the impact on the port and its vicinity and is considered rational." However, some of the applications for permits to use the pier in and after 2001 specified "bagged river sand" for which the reason of dust cannot stand.
3. The import barrier subject to this complaint includes the fact that Kagawa Prefecture government officials discourage pilots who are under contracts with the export-import company from providing compulsory piloting so as to prevent foreign ships carrying import natural sand from entering compulsory pilot zones like the Seto Inland Sea. The complainant requests that the Ministry of Land, Infrastructure and Transport strictly look into such fact including the pilots' acts.

4. The import interruption in 3 above also runs counter to Articles 17 and 24 of the United Nations Convention on the Law of the Sea. Furthermore, it violates Article 13(2) of the Port and Harbor Law of Japan. The complainant requests that the Ministry of Land, Infrastructure and Transport grasp facts regarding this case.

(Third Opinion, February 24, 2003)
The complainant does not request that the Ministry of Land, Infrastructure and Transport give its interpretation of any law or ordinance but requests that it eliminate the existing import barrier (the disapproval of applications for permits to use port and harbor facilities) even if it does not violate any law or ordinance. In order to further improve market access and facilitate imports, the Ministry of Land, Infrastructure and Transport should immediately take appropriate measures to improve the present situation where the river sand in question cannot be imported at the F area of Takamatsu Port so as to make it possible to import such sand there.

(Fourth Opinion, March 24, 2003)
The complainant requests that the import barrier in question be eliminated even if the current measure is assumed to be legitimate and does not request that the Ministry of Land, Infrastructure and Transport give its interpretation of law and ordinance or excuses.

(Fifth Opinion, April 18, 2003)
(The same effect as the Fourth Opinion)

(Sixth Opinion, May 13, 2003)
(The same effect as the Fourth Opinion)

(Seventh Opinion, May 28, 2003)
The OTO at the Cabinet Office is also asked to consider the elimination of a specific import barrier.

(Eighth Opinion, June 18, 2003)
A written reply from the Ministry of Land, Infrastructure and Transport only reiterates its argument that Kagawa Prefecture's disapproval of applications for permits to use port and harbor facilities is not illegal, and it does not consider the elimination of a specific import barrier at all. Therefore, the complainant wants the ministry to specifically consider "the elimination of the import barrier" irrespective of whether or not the disapproval in question is illegal.
Meanwhile, the complainant considers the disapproval in question to be illegal for the following reasons. In the case that the ministry considers that Kagawa Prefecture's disapproval is not illegal, the complainant asks the ministry to specify legal reasons for it.

Notes

1. The disapproval of applications for permits to use mooring facilities for the foreign ship in question violates the United Nations Convention on the Law of the Sea. The disapproval in question is thus illegal or invalid.

2. Articles 1 and 2 of the "Convention and Statute on the International Regime of Maritime Ports" are also to be applied to the foreign ship in question.

3. The disapproval of applications for permits to use mooring facilities for the foreign ship in question also violates Article 13(2) of the Port and Harbor Law, and is thus illegal or invalid.

4. The disapproval of applications for permits to use mooring facilities for the foreign ship in question also violates Paragraphs (2) and (3) of Article 244 of the Local Autonomy Law, and is thus illegal or invalid.

5. The disapproval of applications for permits to use mooring facilities for the foreign ship in question also violates Article 8(2) of the Kagawa Prefecture Port and Harbor Management Ordinance, and is thus illegal or invalid. Article 8(2) of the Kagawa Prefecture Port and Harbor Management Ordinance provides no requirements for such permits. Article 8(2) of the Kagawa Prefecture Port and Harbor Management Ordinance has to be interpreted and applied based on the idea that permits are to be issued in principle pursuant to the "principles of the freedom of passage and the free use of the sea" under the United Nations Convention on the Law of the Sea.

(Ninth Opinion, September 22, 2003)
The complainant wants the ministry to specifically consider the elimination of the existing "import barrier" irrespective of whether or not the disapproval in question is illegal.

Notes
1. The Ministry of Land, Infrastructure and Transport should not quibble about preventing use of public port and harbor facilities but should consider measures to eliminate the existing "import barrier."
2. The OTO should not only send oppositions from related ministry to the public but also consider the elimination of the existing "trade barrier."

(A reply on February 7, 2003)
Kagawa Prefecture has an ordinance requiring anyone who is going to use port and harbor facilities to obtain a permit from the governor. The Port and Harbor Law allows port and harbor managers to impose necessary regulations on ships using mooring facilities. There is nothing wrong with establishing internal rules for enforcing such regulations in terms of the Port and Harbor Law, unless these rules result in unreasonable discrimination.
The disapproval of the applications by the export-import company subject to the complaint in question has been given for the reason of dust. This reason reflects considerations given to the possible impact on the vicinity of the port and is deemed to be rational.
The Ministry of Land, Infrastructure and Transport cannot identify any problem in terms of the Port and Harbor Law in respect to the Kagawa Prefecture's action based on the complaint, and thus cannot respond to the complaint.

(A reply on February 21, 2003)
Since the second opinion on the OTO No. 658 case referred to specific facts, the ministry conducted a fact-finding survey through a local office.
According to the results of the survey, the export-import company in question filed eight applications with the port and harbor manager (Kagawa Prefecture) for permits to use port and harbor facilities from 2001 to 2002, and all of the applications were rejected.
All of the reasons for the disapproval can be considered to be rational, and the disapproval must be considered to fall within the reasonable scope of regulations that the port and harbor manager imposes on ships using mooring facilities in accordance with the conditions of port and harbor.
As far as a port and harbor manager setting his/her own standards in imposing the regulations on the use of mooring facilities and the standards being applied equally to all applicants, the regulations in question are not considered to fall under the unequal treatment as provided in Article 13(2) of the Port and Harbor Law (Law No. 218 of 1950).
During this survey, the ministry found that the export-import company in question filed a lawsuit in May 2001 against Kagawa Prefecture's disapproval of an application for a permit to use port and harbor facilities. On January 20, 2003, Takamatsu District Court turned down the lawsuit, deciding that the claims of the export-import company in question were unreasonable and that Kagawa Prefecture's action could not be considered to be illegal.
Although the complainant claims that Kagawa Prefecture's action amounts to a trade barrier, what the Ministry of Land, Infrastructure and Transport can do is to make judgment from the viewpoint of whether Kagawa Prefecture's action presents any problems in terms of the Port and Harbor Law. Since the action is considered to present no problems in terms of the Port and Harbor Law, the ministry cannot respond to the complaint.
As for piloting services to F Area of Takamatsu Port, pilots determined not to accept requests for piloting services to Takamatsu Port since the Kagawa Prefecture Takamatsu Port Management Office does not permit the ship in question to enter the port. The pilots have also explained this to the ship in question. Therefore, the pilots' actions are based on reasonable grounds.

(A reply on March 19, 2003)
(1) Article 13(2) of the Port and Harbor Law
Although the complainant claims that Kagawa Prefecture's action amounts to a trade barrier, what the Ministry of Land, Infrastructure and Transport can do is to make judgment from the viewpoint of whether Kagawa Prefecture's action presents any problems in terms of the Port and Harbor Law. Since the action is considered to present no problem in terms of the Port and Harbor Law, the ministry cannot respond to the complaint.
When the ministry made an inquiry on the matter to Kagawa Prefecture, the prefecture answered that it could give a permit to use some port and harbor facilities if an application filed meets the standards for permission to use port and harbor facilities and the like as set by Kagawa Prefecture.

(2) Treatment of the Seto Inland Sea under the United Nations Convention on the Law of the Sea
In June 1977, Japan specified the Seto Inland Sea as internal waters and sent a notice to this effect to foreign countries through foreign embassies in Tokyo and the United Nations. Therefore, the complainant's claim is groundless.

(3) Japan's Territorial Sea Limit off Kochi
As shown in the material (from the Japan Coast Guard), the straight baseline as provided in Article 7 of the United Nations Convention on the Law of the Sea is established in water off Kochi Prefecture. According to Article 8 of the convention, waters on the landward side of the baseline are internal waters. Therefore, Japan's territorial sea is up to 12 miles away from the straight baseline.

(4) Action of Association of Pilots for Internal Waters
As written in a reply to the second survey on the OTO No. 658 case, the action of the Association of Pilots for Internal Waters had no problems. There is no fact that a threatening act as claimed by the complainant was conducted.

(A reply on April 17, 2003)

The Ministry of Land, Infrastructure and Transport makes judgment from the viewpoint of whether Kagawa Prefecture's action presents any problem in terms of the Port and Harbor Law. The regulations imposed by the Kagawa Prefecture cannot be considered to amount to the unequal treatment as provided in Article 13(2) of the Port and Harbor Law as far as they are applied equally to all applicants rather than only to a particular applicant.

(A reply on May 9, 2003)
The same as the reply on April 17, 2003.

(A reply on May 26, 2003)
The same as the reply on April 17, 2003.

(A reply on September 19, 2003 (under the joint signatures of the Ministry of Public Management, Home Affairs, Posts and Telecommunications))
(1) The right of innocent passage as provided in the United Nations Convention on the Law of the Sea is interpreted as in the attachment. Therefore, it is not considered to conflict with the United Nations Convention on the Law of the Sea that Kagawa Prefecture enacts the Kagawa Prefecture Port and Harbor Management Ordinance (hereinafter referred to as "Management Ordinance") based on the Local Autonomy Law and the Port and Harbor Law and impose regulations on the use of port or harbor facilities.
(2) The "Convention and Statute on the International Regime of Maritime Ports" is interpreted to the effect as in the attachment, and Takamatsu Port is also considered to fall under "maritime ports" under the said statute. The Management Ordinance is applied generally and uniformly to all ships irrespective of the ship's registry, type of ship, place of destination, and place of provenance, and it is considered to be necessary and rational from the viewpoint of the appropriate management and operation of ports and harbors. The Management Ordinance is thus not considered to be in conflict with the said statute as long as it is recognized as being applied generally and uniformly to all ships irrespective of the ship's registry, etc. in operations.
(3) Kagawa Prefecture does not allow the unloading of sand in F Area of Takamatsu Port based on a rational reason that gives considerations to the impact of dust caused by cargo handling of sand on the vicinity of the port from the viewpoint of the appropriate management and operation of the port. In addition, since the Management Ordinance in question is applied generally and uniformly to all ships irrespective of the ship's registry, etc., it does not conflict with Article 13(2) of the Port and Harbor Law. The disapproval of applications for permits to use mooring facilities given by Kagawa Prefecture to foreign ships based on the said Management Ordinance is lawful in light of Article 13(2) of the Port and Harbor Law.

(4) With respect to the complaint in question, the Ministry of Public Management, Home Affairs, Posts and Telecommunications is now deliberating a request for reexamination of the disapproval of applications for permits to use port and harbor facilities, so the Ministry of Land, Infrastructure and Transport wants to withhold a reply to an inquiry stating that the disapproval violates the Local Autonomy Law. (*)

(5) The right of innocent passage as provided in the United Nations Convention on the Law of the Sea is interpreted as in the attachment.
In addition, Kagawa Prefecture disapproves of the use of port and harbor facilities by foreign ships based on the Management Ordinance because F Area of Takamatsu Port is one of the greatest bases for physical distribution in Kagawa Prefecture and the unloading of earth and sand liable to disperse is highly likely to interrupt cargo handling for other ships or have unfavorable impacts on the vicinity. The purpose of the regulation is considered to coincide with the purpose of the Port and Harbor Law, i.e., promoting the appropriate management and operation of ports and harbors.

(Reference) Attachment to the ministry's reply ("Interpretation of international law pointed out in the eighth written complaint concerning OTO No. 658" by the Ministry of Foreign Affairs)

(i) Generally under international law, a state has complete territorial sovereignty in internal waters (waters on the landward side of the baseline of the territorial sea, though there are provisions concerning archipelago waters: Article 8-1 of the United Nations Convention on the Law of the Sea) in the same way as in its territory. The right of innocent passage (Article 17 of the United Nations Convention on the Law of the Sea) is not given to foreign ships in internal waters unlike in territorial sea. In the first place, Article 18-1 of the United Nations Convention on the Law of the Sea provides that passage means "navigation through the territorial sea" for the purpose of (a) and (b) of the article. This does not mean the right to navigate through internal waters nor the right to make a port call.
(Note) The right of innocent passage is valid in waters that are newly determined to be internal waters by straight baselines as provided in Article 7 of the United Nations Convention on the Law of the Sea.

(ii) The "Convention and Statute on the International Regime of Maritime Ports" (hereinafter referred to as the "Statute") defines "maritime ports" as ports which are normally frequented by sea-going vessels and used for foreign trade (Article 1 of the Statute), and stipulates the grant of the equality of treatment at maritime ports, etc. (Article 2 of the Statute).

2. At the 22nd meeting of the OTO Grievance Resolution Committee on June 21, 2004, the Chairman summed up the response to the complaint in question in addition to OTO No. 659 that is based on the same complaint as follows:

(1) The complaint in question is that disapproval by Kagawa Prefecture (the port and harbor manager for F Area of Takamatsu Port) of all applications for permits to use port and harbor facilities for importing river sand for the reason of dust, etc. forms an import barrier.
(2) The complainant asserts that there is no threat of dust, etc. and that the disapproval in question violates the Port and Harbor Law and the United Nations Convention on the Law of the Sea. However, the Ministry of Land, Infrastructure and Transport states that the disapproval is based on a rational reason and it has no problem in terms of the Port and Harbor Law, and that in relation to the United Nations Convention on the Law of the Sea, the disapproval does not conflict with the convention in light of interpretation by the Ministry of Foreign Affairs.
(3) On the other hand, the importer that filed applications for permits to use with Kagawa Prefecture also filed a lawsuit claiming that disapproval by Kagawa Prefecture is illegal based on almost the same claim in parallel with filing the complaint in question. However, the Takamatsu District Court and High Court have already rendered a judgment that the disapproval in question is not illegal in light of the purpose of the Port and Harbor Law and that it also does not run counter to the United Nations Convention on the Law of the Sea.
(4) Since, as mentioned above, the court has already legitimated disapproval by Kagawa Prefecture from the viewpoint of public interest, deliberation on the complaint in question that claims the disapproval forms an import barrier leads to discussing legal interpretation made by the court. Therefore, it is not appropriate to deliberate the complaint in question at this committee.
(5) In addition, the complainant asserts that disapproval by Kagawa Prefecture should be eliminated as an import barrier before questioning its illegality. However, disapproval of unloading in F Area of Takamatsu Port cannot be immediately considered to form an import barrier, taking into consideration the fact that the Japanese government does not restrict the import of sand and that the unloading of sand is allowed in other areas of Takamatsu Port.
(6) The OTO has so far met requests from the complainant in terms of provision of information, etc., but in light of the above-mentioned court judgment, the complaint in question is considered to have lost its basis of argument. Regarding the complaint in question, although explanation by the administrative authorities seems to have been insufficient in some points in the process, the processing of the complaint cannot proceed since the complainant has not clearly shown a basis of argument for claiming that disapproval by Kagawa Prefecture forms an import barrier. Since there are only two kinds of status of processing of individual complaints, i.e. "processing" and "processed," it is appropriate to consider this case to be "processed."