NEWS FLASH - JUNE 2001

(Selected information on social & labour developments in Japan)

June 2001

Basic policy on economic and fiscal management announced

The Economic and Fiscal Policy Council, a key panel headed by the Prime Minister Koizumi announced on 21 June the economic and fiscal reform plan that is aimed at sending the economy on the recovery track in response to the write-off of bad loans by banks in two to three years. The plan sets out seven key areas, as well as a guideline for formulating the budget for next fiscal year. It includes such proposals as follows:

the government will

solve the bad loan problem by strengthening the Resolution and Collection Corporation;
consider privatizing postal savings, insurance and mailing services;
promote privatization of public corporations;
increase the employment opportunities through 5.3 million job creation in service sector over five years and further deregulation of employment-related services.

In order to address the unemployment problem envisaged due to the reform, the plan provides measures to strengthen social safety net, such as the lightening of financial burden from housing loans and educational expenses during the period of unemployment.

Privatization of postal services under consideration

Prime Minister Koizumi launched an advisory panel on 4 June to discuss the privatization of postal services. It consists of 10 members, including the Prime Minister himself, who will convene the meeting. The panel will compile a report by next June after discussing the future of the currently state-owned postal services - postal, savings and insurance - beyond 2003, when they are to be operated as public corporations. The privatization of postal services will likely face fierce opposition not only from workers and unions concerned, but also from the ruling Liberal Democratic Party, whose largest group of supporters is that of managers of rural post offices.

Japan will make substantial contribution to the global fight against HIV/AIDS

Former Prime Minister Yoshiro Mori attended the UN Special Session on HIV/AIDS, and addressed the meeting on 25 June. Referring to the Okinawa Infectious Disease Initiative by the Japanese Government, announced at the G8 Summit in July 2000, he pledged that Japan will contribute "substantially" to the global HIV/AIDS and health fund. Under the Okinawa Initiative, Japan will extend support to developing countries for measures against HIV/AIDS and other infectious diseases. The Government hopes to allocate a total of US$3 billion over five years, and has so far implemented specific measures amounting to approximately US$700 million. The Prime Minister Koizumi also announced on the occasion of his recent visit to the United States that Japan would contribute about US$200 million, while the United States and France will contribute US$200 million and US$120 million respectively.

Japan falling behind in forming gender-equal society

The "Fiscal Year 2000 Annual Report on the State of Forming a Gender-equal Society" released on 22 June by a government panel says that Japanese women are falling behind in the participation in economic and social activities and in obtaining decision-making roles. Japan ranked 41^st out of 70 countries last year on their gender empowerment measure (GEM). It declined from 38^th in 1999.

Millenium babies pushed up Japanese fertility rate

The total fertility rate of Japan rose by a slight 0.01 percentage point to 1.35 from 1.34 last year, according to the Health, Labour and Welfare Ministry statistics, released on 20 June. This is the first rise in 4 years, since 1996. The Ministry says that the long-term trend of decline in birth rate had not stopped, and attributed last year's rise in birthrate to more couples deciding to have babies in the commemorative year of 2000. Mother's average age for first childbirth was a record-high 28 years, up 0.1 year from 1999.

New and revised legislation

The 151^st session of the Diet concluded on 29 June. A number of laws were adopted, and the following are the major ones related to the world of work including social security. (Law titles are tentative translation by ILO Tokyo Branch Office.)

Law concerning Defined-Contribution Pension: This law introduces a new pension system based on self-responsibility, under which the subscriber chooses the method of investment to the effect that the amount of future pension benefit and retirement allowance depends on the performance of his/her investment. At present, companies are allowed to operate only defined-benefit pension schemes. With the new legislation, companies and their employees will be able to choose between the defined-contribution and defined-benefit schemes. The latter system is that the amount of pension is fixed in advance. The new pension will be in two forms, one in which companies pay premiums and the other in which individuals pay premiums. The program allows the employees to instruct his/her pension fund managers as to which financial investment their contributions should be invested in. And the new defined-contribution pension is portable, as employees who change jobs can transfer their pension assets if they have worked for at least three years.
Law concerning Defined-Benefit Corporate Pension: This law reorganizes the existing defined-benefit corporate pension system. It also aims to protect the employees' right to receive pension through stricter supervision and wider disclosure of financial matters.
Revised Law on Employment Measures: The law obliges companies planning to cut their workforce to assist those employees obliged to separate to take up new jobs. Companies are also required to make efforts towards the abandonment of upper age limit in recruitment.
Law to Facilitate the Resolution of Individual Labour Disputes: The law is aimed at speeding up the resolution of individual disputes, by enabling the Prefectural Labour Departments of the Ministry of Health, Labour and Welfare, and the Prefectural Labour Relations Commissions, if the Governor authorizes, to give advice and guidance to the parties concerned and to mediate the disputes.

Interim report on government future employment measures

The Headquarters on Industrial Structural Reform and Employment Measures, headed by Prime Minister Koizumi, compiled an interim report on 22 June which contains the basic policy directions for future employment measures. Its four main pillars are "employment creation by nurturing new markets and industries," "promotion of human resources development," "creation of decent working environment," "safety net (note: literal translation of the Japanese word; more suitable word in English would be social protection) for employment, consistent with the structural reform of the labour market." Under the first heading, the report aims to boost the capacity of universities to create employment, by assisting them to develop venture enterprises and entrepreneurs. To that end, it will concentrate investment to the top-rated 30 universities. It will also support the activities of the non-profit organizations (NPOs) by facilitating their establishment and reinforcing subsidizing systems. Under the second heading, in order to provide high level education and training to working people, it will increase access to education of workers to universities and private entities. The third pillar is to create decent working environment taking into account diversified forms of employment, including part time and dispatched workers. It also plans to reassess fixed term employment, with a view to give flexibility to the labour market. The fourth pillar aims to facilitate labour mobility, while at the same time establishing social protection system. This is to cope with expected increase in unemployment due to the structural adjustment of industries and the disposition of non-performing loans.

Japan ratifies Worst Forms of Child Labour Convention

The Director-General of the ILO accepted the instruments of ratification of the Worst Forms of Child Labour Convention, 1999 (No.182) and of acceptance of the Amendment to the Constitution of the International Labour Organisation, 1997 submitted by the Japanese government on 18 June 2001. With this, Japan ratified six out of eight ILO core Conventions: Conventions No. 29 on forced labour, Nos. 87 and 98 on freedom of association and collective bargaining, No. 100 on equal remuneration and No.138 on child labour. The amendment to the Constitution, which opens the way to abrogate a Convention that has lost its purpose or no longer useful, will come into force once it has been ratified or accepted by two-thirds of the members of the Organization (117/175) including five of the ten members of chief industrial importance. The total number of ratifications and acceptances rose to 65 including 5 by States of chief industrial importance (China, India, Italy, Japan and United Kingdom).

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(Purpose of the news flash is to provide readers with rough idea of social and labour developments in Japan. It is not an official document of the ILO. The designations employed do not imply the expression of any opinion whatsoever on the part of the ILO concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. Reference to names of firms and commercial products and processes does not imply their endorsement by the ILO, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval.)

Updated by EU. Approved by MH. Last update: 8 August 2001