First Report Regarding Promotion of Regulatory Reform (Summary)

(Provisional Translation)

December 11, 2001

Regulatory reform can achieve both "establishment of socio-economic system based on the needs of consumers" and "vitalization of the economy "at the same time
It is effective to vigorously promote efforts for "reform of the system as a whole", taking account of what it should be in each field
In addition to deregulations, further efforts should be made in order to institute new rules for such issues as disclosure of information, construction of a monitoring system and establishment of safety nets. This should be done based on the fundamental principle that "what can be done by the private sectors should be left to them ".
In the current situation in which structural reform is of urgent necessity, it is particularly important to further accelerate implementation of reform measures.

1) Major specific measures in the Six Priority Areas

1. Medical Care

(1) Thorough information disclosure and public access to information concerning medical care

Relaxation of regulations on advertising (Substantially expanding the scope and content of material that is permitted to be advertised) [Measure implemented during FY2001]

(2) Improvement of the effectiveness of medical care administration, standardization of medical care and improvement of quality through IT

Establishment of a general rule to use an electronic billing system focused mainly on on-line billing system (Moving from a paper-based billing system to an electronic-based system in principle) [Plan formulated in FY2001 for swift implementation]

(3) Reinforcing the original functions of an insurer

Review and payment of bills by insurers (Enabling the insurer to carry out a review and payment procedure by themselves, without going through a payment organization, such as the Social Insurance Medical Fee Payment Fund) [Measure implemented during FY2001 (Swift implementation)]

(4) Revision to the structure of medical treatment fees

Transition from a retrospective payment system to expand to a prospective payment system (e.g. diagnosis related group/prospective payment system (DRG/PPS)) [Step-by-step implementation]
Revision of the scope of application for public medical insurance (Expanding the scope of the payment system for special medical care coverage, and enabling patients to take medical treatment both within and outside of the public medical insurance treatment scope at the same time) [Measure implemented during FY2001 (Sequential implementation)]
Abolition of the "205 yen rule" (Abolishing billing system permitting omission of breakdown of drug names, etc.) [Measure implemented during FY2001]

(5) Modernizing and improving efficiency of management in medical fields

Revision of the requirements for board chairman of medical corporations (Abolishing requirements for board chairman with the exception of rational reasons for disqualification) [Measure to be implemented in FY2002]

(6) Other matters

Revision of the regulations concerning the dispatch of employees engaged in medical-related work [Measure implemented in FY2001]
Relaxation of regulations regarding sale of drugs [Measure to be implemented in FY2002 (Sequential implementation)]

2. Welfare and Childcare

(1) Equal competition for the diversity of operators in the institutional nursing care sector

Users to bear the hotel costs of special nursing homes for the elderly [Measure to be implemented in FY2002]
Promotion of infrastructure that is established by the public sector and operated by the private sector, making use of Private Financing Initiatives (PFI) [Already partially implemented, to be followed by further sequential implementation]

(2) Expansion and quality improvement of childcare services

Review into revising standards for approval of childcare facilities [Review to begin immediately, followed by sequential implementation]
Promotion of the participation of private companies in the establishment of childcare facilities (e.g. Revision of instructions regarding handling of surpluses) [Measure implemented in FY2001 (immediate implementation)]
Reform of various regulations concerning childcare educators (e.g. Relaxation of regulations regarding short working hours for childcare educators) [Measure to be implemented in FY2002]

(3) Revision of regulations concerning social welfare corporations

Revision of modalities for social welfare corporations (e.g. Review of the modalities for the current styles and diverse types of social welfare corporations) [Immediate review, to be followed by a conclusion during FY2001]
Revision of the role of the Council of Social Welfare (e.g. Focus on the services that are difficult for other private sector contractors and social welfare corporations to engage in) [Measure implemented in FY2001]

3. Human Resources (Labor)

(1) Regulatory reform to enable smooth transfer of labor

Revision of commissions that can be collected by private employment agencies (Expansion of the scope of possible leverage of commissions on those requesting work, and abolition of the upper limits for collected commission from the company providing the labor. Revision of a ministerial ordinance and other measures will be implemented early in the new year) [Measure implemented in FY2001 (swift implementation)]
To clarify the means by which the implementation of trial employment can be made possible (to introduce employment that continues from a period of trial employment for an unspecified period) [Measure implemented in FY2001 (swift implementation)]
Review to amend the Employment Security Law, such as a move from a system of permission for a free employment introduction service to a notification procedure [Bring forward revision]

(2)Regulatory reform that enables diversity in type of work

Abolition of the one-year limit on the dispatch of personnel through a revision to the Worker Dispatch Law, and a review into the expansion of the scope of business dispatching temporary workers in fields such as the manufacturing industry. [Bring forward revision] Review into the expansion of businesses that are currently allowed to dispatch for up to three years, through an amendment to the government ordinance. [Measure implemented in FY2001 (swift process to conclusion)]
Revision of the modalities for designation of a person responsible for personnel dispatch, simplification of the procedures to change this person, and electronification of the system of notification from dispatching company to the company to which personnel are being dispatched. [Bring forward revision]
Extending the maximum period for term of labor contracts through a revision to the Labor Standards Law (from 3 years to 5 years), and review into expanding the scope of such labor contracts. [Review to be implemented swiftly] Revision of ministerial notification stipulating the scope of specialist jobs. [Measures implemented in FY2001 (swift implementation)]
Expansion of the jobs that come under the discretionary working hours system for specialist jobs (Amendment to government notification). [Measure implemented in FY2001 (swift implementation)] Revision of the current system toward a revision of the laws relating to the flexible working-hours system for planning jobs. [Bring forward revision]

(3) Regulatory reform based on the type of new laborers

Review into making standards and rules for terminating employment clearer in legal terms [Swift review]
Review into reform of social insurance systems, and appropriate expansion of pension and health care insurance for part-time employees. [Swift review]

4. Education

(1) Establishment of an environment that facilitate free competition in higher education

Making regulations for establishment of universities and faculties that do not require prior governmental permission. [Measures to be reviewed & concluded by FY2002] (Transfer from permission system to notification system for establishment of faculties [Measures to be reviewed & concluded by FY2002]; Review of the restrictive control policies for establishment of faculties, etc. [ to be reviewed by FY2002]; Relaxation of the regulations for school land requirement and its self-ownership ratio [Measure implemented in FY2002]; Fundamental review of the "Factories Universities Restriction Law" [Measures implemented in FY2001 (review and conclusion)]; and Abolition of the restrictive control policies in "restricted areas" [Measure implemented in FY2002]
Introduction of accreditation system by third parties [Measure implemented in FY2002 (review and conclusion)]

(2) Improvement of career opportunities through institutes of higher education

Creation of a double-major system and a part-time student system [Measure implemented in FY2001 (continuous promotion)]

(3) Revision of the modalities for public support for higher education

Increase of funds for competitive research activities and its distribution in order to promote competition [Measure implemented in FY2002]

(4) Promotion of practical research into the establishment of a legal structure to introduce "Community Schools"

Review into the organize a legal structure [Measure implemented in FY2003] and clarification of requirements for model schools experiments [Measure implemented in FY2002]

(5) Clarification of standard requirements for elementary and lower secondary school establishment and relaxation of requirements to promote increase of private schools

Relaxation and clarification of the requirements standards for permission of private elementary and lower secondary schools. [Measure implemented in FY2001]
Increase opportunities for graduates of international schools to higher education [Measure implemented in FY2002]

(6) Promotion of evaluation and selection in elementary and secondary education

Promotion of a school choice system (Promotion of a chosen school based on choices by parents or guardians and students themselves and clarification of the procedure for changing schools) [Measure implemented in FY2002]

5. Environment

(1) Establishment of measures to purify soil pollution in urban areas

Consideration of measures including submission of a bill to the next ordinary Diet session to survey and clean up areas of soil pollution in urban areas, and to support measures in the case when the person or organization responsible for the pollution is unclear. [Measure implemented in FY2001]

(2) Reduction of greenhouse gas emissions

In preparation for the ratification of the Kyoto Protocol, to implement comprehensive measures including development of economic instruments such as Taxes, charges and emission trading and the establishment of a domestic registry agency which verifies voluntary initiative undertaken by private companies. [Measures related to the ratification of the Kyoto Protocol implemented in FY2001]
Review into the modalities for regulations regarding the building of a gas pipeline, in order to promote the use of natural gas (Modalities include technical standards concerning the depth to which a pipeline should be buried, and the installation at sea, as well as coordination with fishing rights) [A conclusion on the depth of a pipeline will be reached in FY2003, and review into technical standards for sea installation will begin in FY2002]

(3) Implementation of various measures to achieve coexistence between people and nature

Effective and efficient implementation of projects for regeneration of nature [Sequential implementation]
Addition of an eco-system protection function to the Natural Parks Law [Measure implemented at the next regular Diet session]
Review of system to deal effectively with exotic species [Measure implemented in FY2002]

(4) Review of the various systems to deal with waste and recycling

Review of the definition and classification of waste, and of the permission for work and facilities related to waste disposal, and review into enlarging expanded producer responsibility [Measure implemented in FY2002]

6. Urban Renaissance

(1) Securing transparency in the real estate market

Expanding the scope for public inspection of the assessment roll book (Enabling comparisons between self-owned assets and the assets of others) [Submission of a bill to the next ordinary session of the Diet]
Securing effectiveness of auctions through revision based on the abolition of the short-term lease system [Measure implemented in FY2002 (submission of bill)]

(2) Revision of various systems relating to cities

Establishment of proposal procedures that enable the will of the residents to be reflected in urban planning. [Measure implemented in FY2001 (review and conclusion) ,with the aim of submitting a bill to the next ordinary session of Diet]
Promotion of a shift from specification requirements to performance requirements concerning zoning codes of the Building Standard Law (Introduction of a sky ratio in the Building Standard Law) [Measure implemented in FY2001 (review and conclusion), with the aim of submitting a bill to the next ordinary session of the Diet]
Expansion of areas where it is possible to implement urban redevelopment projects (Relaxation of stipulations for fire-proof buildings) [Measure implemented in FY2001]
Promotion of urban planning activities that are led by the private sector (Review into the introduction of a private sector entity in the urban redevelopment projects, that are carried out through the purchase of land [Measure implemented in FY2001 (review and conclusion), with the aim of submitting a bill to the next ordinary session of the Diet]
Drastic revision of the acts concerning Restriction on Industry etc. in the Built-up Areas (Including abolition of the acts that was designed to control excessive concentration of factories and population in the existing urbanized areas of metropolitan Tokyo and the Kinki region) [Measure implemented in FY2001 (review and conclusion), with the aim of submitting a bill to the next regular session of the Diet]

(3) Facilitating the smooth rebuilding of apartments

Relaxation of the stipulations for rebuilding in the Low Concerning Unit Ownership, etc, of Building (Including review into making a decision to rebuild an apartment block possible with the agreement of more than four-fifths of the owners only) [Measure implemented in FY2002 (submission of bill)]
Establish a legal system to facilitate the smooth process of rebuilding apartment blocks (Measures to smoothly transfer comparted ownership to rebuilt apartment blocks, and to give corporate status to the group involved in rebuilding) [Bill to be submitted to the next ordinary session of the Diet]

2) Main Measures in Other Areas

1. Competition Policies

Abolition of regulations on the formal standard relating to the restrictions of stockholdings by large-scale companies [Measure to be submitted to the next ordinary session of the Diet]
Expansion of competitive bidding in public works [Sequential implementation from FY2001]

2. Law and Justice

Clarification on the scope of legal affairs that can be exclusively conducted by an attorney [Schedule of measure will be considered in the process of the plan for judicial reform promotion]
Revision of the Corporate Reorganization Law (Relaxation of conditions to initiate reorganization procedures) [Measure implemented in FY2002]

3. Finance

Establishment of a legal measure to enable over-the-counter sales of Exchange Traded Funds (ETF), at registered financial institutions such as commercial banks. [Measure implemented in FY2001]
Concerning non-life insurance products, to reduce the product inspection period from 90 days to 60 days [Measure implemented in FY2001] and to examine the introduction of a File and Use system [Measure implemented in FY2002 (Examination commenced as early as possible in FY2002)]

4. Agriculture, Forestry and Fisheries

Examination of the current system and situation for agricultural production corporations, and then further promotion of corporatization in agricultural management. [Swiftly begin examination followed by sequential implementation based on obtained conclusions after FY2002]

5. Distribution

Reforming institution related to a franchise system (Revision of franchise guidelines and improvement of information disclosure to affiliate applicants of franchisee from a franchiser [Measure implemented in FY2001 (immediate implementation)], research and clarification of actual conditions relating to franchises other than retail, e.g. the service industry and review of modalities for system of information disclosure and others [Research and clarification of actual conditions implemented in FY2002, and modalities for systems promptly reviewed based on the actual conditions]
Implementation of surveys aimed at bringing forward review of the guideline Large-Scale Retail Stores Location Law [Sequential implementation]

6. Energy

Expansion of the scope of liberalization for electricity retail (Immediate liberalization at the very least for high-voltage electricity, and review of timed disclosure of total liberalization. [Measure implemented in FY2002 (review and conclusion)]
Expansion of the scope of liberalization for gas retail. (Review into the expansion of the scope for demand of less than 100m³ to consumers [Measure implemented in FY2002 (review and conclusion)]

7. Transportation

Regulatory reform relating to truck transportation industry (Reform of the fare notification system (from prior notification to expostfacto notification) and abolition of the current system regarding business area) [Conclusion in FY2001]
Acceleration of the introduction of a one-stop service for import and export procedures at ports. (Creation of a single window by integrating all systems) [Begin operations as soon as possible in FY2003]

8. Standard Certification

Introduction of self-declaration system concerning conformation to standards for telecommunication terminal equipment (Review into the introduction of a system whereby makers themselves announce conformation to technical standards) [Measure implemented in FY2001 (Conclusion)]
Revision of regulations relating to the Electrical Appliance and Material Safety Law (Review into rational change for notification content undertaken by manufacturers and promotion of international compliance of technical standards) [The latter is aimed to be implemented in FY2001]

9. Simplification of Procedures

Efforts to simplify the application procedures for all fourteen articles.

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